SALES AGREEMENT
THIS AGREEMENT is made by and between Advisers Management Trust ("TRUST"), a
Massachusetts business trust and American Skandia Life Assurance Corporation
("SKANDIA"), a life insurance company organized under the laws of the State of
Connecticut.
WHEREAS, TRUST is registered with the Securities and Exchange Commission under
the Investment Company Act of 1940 (" '40 Act") as an open-end diversified
investment management company; and
WHEREAS, TRUST is organized as a series fund, currently with four
Portfolios: Liquid Asset Portfolio, Limited Maturity Bond Portfolio, Growth
Portfolio and Balanced Portfolio; and
WHEREAS, TRUST was organized as a funding vehicle for variable contracts offered
by life insurance companies through separate accounts of such life insurance
companies; and
WHEREAS, SKANDIA has established a separate account to offer variable contracts
and may establish others, and is desirous of having TRUST serve as one of the
funding vehicles for at least one such variable contract, and possibly others in
the future.
NOW, THEREFORE, and in consideration of the mutual covenants herein contained,
it is hereby agreed by and between TRUST and SKANDIA as follows:
1. TRUST will make available to the designated separate accounts of SKANDIA
shares of the selected portfolios for investment of purchase payments of
variable contracts allocated to the designated separate accounts.
2. TRUST will make the shares available to such separate accounts at net
asset value.
3. Orders shall be placed for such shares with the TRUST's custodian pursuant to
procedures which are then in effect and which may be modified from time to time.
TRUST will provide SKANDIA with documentation of all procedures now in effect
and will undertake to inform SKANDIA of any modifications to such procedures.
4. TRUST will provide SKANDIA camera ready copy of the current TRUST prospectus
and any supplements thereto for printing by SKANDIA. TRUST will provide SKANDIA
a copy of the statement of additional information for duplication. TRUST will
provide SKANDIA copies of its proxy material suitable for printing. TRUST will
provide SKANDIA annual and semi-annual reports and any supplements thereto, in
camera-ready form.
5. Any materials utilized by SKANDIA which describe TRUST, its shares, or
its adviser shall be submitted to TRUST for approval prior to use.
6. (a) SKANDIA shall be solely responsible for its actions in connection with
its use of TRUST and its shares and shall indemnify and hold harmless TRUST, its
officers and trustees, and its adviser and distributor, Xxxxxxxxx & Xxxxxx
Management Incorporated, and its officers and directors, from any liability for
its negligent or wrongful acts or failures to act with respect to SKANDIA's use
of TRUST or its shares.
(b) TRUST shall be solely responsible for its actions in connection
with its operations and shall indemnify and hold harmless SKANDIA, its officers
and directors from any liability for its negligent or wrongful acts or failures
to act with respect thereto.
7. SKANDIA agrees to inform the Board of Trustees of TRUST of the existence of
or any potential for any material irreconcilable conflict of interest between
the interests of owners of contracts using the separate accounts of SKANDIA
which invest in the TRUST and/or the interests of owners of contracts using any
other separate account of any other insurance company which invests in the
TRUST.
A majority of the Board of Trustees of the TRUST ("Board") shall be composed of
persons who are not "interested persons" of TRUST as defined by the '40 Act. The
Board shall monitor TRUST for the existence of any material irreconcilable
conflicts between the interests of the contract owners of all separate accounts
investing in the TRUST.
Any material irreconcilable conflict may arise for a variety of reasons,
including:
(a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, or any similar action
by insurance, tax or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any portfolio are being managed;
(e) a difference in voting instructions given by variable annuity contract
owners and variable life insurance contract owners or by contract owners of
different life insurance companies utilizing TRUST; or
(f) a decision by SKANDIA to disregard the voting instructions of contract
owners.
SKANDIA will be responsible for assisting the Board in carrying out its
responsibilities by providing the Board with all information reasonably
necessary for the Board to consider any issue raised including information as to
a decision by SKANDIA to disregard voting instructions of contract owners.
It is agreed that if it is determined by a majority of the members of the Board
or a majority of its disinterested Trustees that a material irreconcilable
conflict exists affecting SKANDIA, SKANDIA shall, at its own expense, take
whatever steps are necessary to remedy or eliminate the irreconcilable material
conflict, which steps may include, but are not limited to:
(a) withdrawing the assets allocable to some or all of the separate accounts of
SKANDIA from TRUST or any Portfolio and reinvesting such assets in a different
investment medium, including another Portfolio of the TRUST, or submitting to a
vote of all affected contract owners the question of whether segregation of
assets should be implemented and, as appropriate, segregating the assets of any
particular group (i.e. annuity contract owners, life insurance contract owners
or qualified contract owners) that votes in favor of such segregation, or
offering to the affected contract owners the option of making such a change;
(b) establishing a new registered management investment company or managed
separate account.
If a material irreconcilable conflict arises because of SKANDIA's decisions to
disregard contract owner voting instructions and that decision represents a
minority position or would preclude a majority vote, SKANDIA may be required, at
the TRUST's election, to withdraw its separate account's investment in TRUST. No
charge or penalty will be imposed against a separate account as a result of such
a withdrawal. SKANDIA agrees that any remedial action taken by it in resolving
any material conflicts of interest will be carried out with a view only to the
interest of contract owners.
For purposes hereof, a majority of the disinterested members of the Board shall
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event will TRUST be required to establish a new
funding medium for any variable contracts. SKANDIA shall not be required by the
terms hereof to establish a new funding medium for any variable contracts if an
offer to do so has been declined by vote of a majority of affected contract
owners.
TRUST will undertake to promptly make known to SKANDIA the Board's determination
of the existence of a material irreconcilable conflict and its implications.
8. SKANDIA shall provide pass-through voting privileges to all variable contract
owners so long as the Securities and Exchange Commission continues to interpret
the '40 Act to require such pass-through voting privileges for variable contract
owners. SKANDIA shall be responsible for assuring that each of its separate
accounts participating in TRUST calculates voting privileges in a manner
consistent with other life companies utilizing TRUST. It is a condition of the
Agreement that SKANDIA will vote shares, for which it has not received voting
instructions as well as shares attributable to it, in the same proportion as it
votes shares for which it has received instructions.
9. The Agreement shall terminate automatically in the event of its
assignment, unless made with the written consent of each party.
10. This Agreement may be terminated at any time on sixty (60) days'
written notice to the other party hereto, without the payment of any penalty.
11. This Agreement shall be subject to the provisions of the '40 Act and the
rules and regulations thereunder, including any exemptive relief therefrom and
the orders of the Securities and Exchange Commission setting forth such relief.
12. It is understood by the parties that this Agreement is not to be deemed
an exclusive arrangement.
Executed this 20th day of September, 1988.
ADVISERS MANAGEMENT TRUST
ATTEST: Xxxxxxx X. Xxxxxxx By: Xxxxxxx Xxxxxx
Secretary President
AMERICAN SKANDIA LIFE
ASSURANCE CORPORATION
ATTEST: Xxxxx Xxxxxxxxxx By: Xxxxxxx X. Xxxxxxxx, XX
