SALES AGREEMENT
THIS AGREEMENT is made by and between American Skandia Trust ("FUND"), 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, FUND 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, FUND is organized as a series fund authorized to issue separate
series of shares ("Portfolios"); and
WHEREAS, FUND was organized as a funding vehicle to sell its shares only to
variable life insurance separate accounts and variable annuity separate
accounts, and that such variable products separate accounts may be of insurance
companies not affiliated with SKANDIA or any of SKANDIA's affiliated companies
(hereinafter referred to as "shared funding") and the FUND may be the investment
vehicle for both variable life and variable annuity contracts (hereinafter
referred to as "mixed funding"); and
WHEREAS, SKANDIA has established a separate account to offer variable contracts
and may establish others, and is desirous of having certain Portfolios of FUND
serve as funding vehicles for some of its variable contracts, and possibly
others in the future.
NOW, THEREFORE, and in consideration of the mutual covenants herein contained,
it is hereby agreed by and between FUND and SKANDIA as follows:
1. FUND will make available to the separate accounts designated by SKANDIA
shares of FUND Portfolios designated by FUND for investment of certain account
values of variable contracts supported by the designated separate accounts. FUND
will diversify the assets in each portfolio in the manner required for the
variable contracts to be treated as such under Section 817(h) of the Internal
Revenue Code of 1986, as amended, and the rules and regulations thereunder.
2. FUND will make the shares of the designated Portfolios available to such
separate accounts at net asset value.
3. Orders shall be placed for such shares with the FUND's custodian pursuant to
procedures which are then in effect and which may be modified from time to time.
FUND will inform SKANDIA of the procedures for placing orders with the FUND's
custodian and will undertake to inform SKANDIA of any modifications to such
procedures.
4. FUND will provide SKANDIA camera ready copy of the current FUND prospectus
and any supplements thereto for printing by SKANDIA. FUND will provide SKANDIA a
copy of the statement of additional information for duplication. FUND will
provide SKANDIA copies of its proxy material suitable for printing. FUND will
provide SKANDIA annual and semi-annual reports and any supplements thereto, in
camera-ready form. For printing and delivery of such documents to the beneficial
owners of FUND shares, FUND will pay SKANDIA 0.1%, on an annualized basis, of
the net asset value of the shares legally owned by any separate accounts of
SKANDIA. Such value is to be determined on the last day of each calendar quarter
and is payable within 10 days after the end of such calendar quarter. The amount
payable quarterly is one quarter of the above-stated percentage.
3. SKANDIA will only (i) convey any information or make any representations
concerning FUND or its investment advisor, its shares or operations which are
contained in the most recent Registration Statement relating to the FUND and any
supplements thereto or (ii) use any materials or advertising which mention the
FUND or its investment advisor (including sales literature, brochures, letters,
illustrations and other similar material, whether transmitted directly to
potential applicants or published in print or audio-visual media), if, in either
case, FUND approves such items prior to use.
Neither SKANDIA nor FUND will use the other's name nor any other name,
logo, trademark, service xxxx nor symbol that is now or may hereafter be owned
by the other party, a parent or an affiliate or subsidiary thereof, except in
the manner and to the extent that the other party may specifically authorize.
Upon termination of this Agreement, each party will discontinue the use of such
name, logo, trademark, service xxxx or symbol belonging to the other party,
parent, affiliate or subsidiary thereof. Such discontinuance will occur
immediately or, if applicable, as soon as permitted under applicable law or
regulation.
6. (a) SKANDIA shall be solely responsible for its actions in connection with
its use of FUND and its shares and shall indemnify and hold harmless FUND, its
officers and directors from any liability for its negligent or wrongful acts or
failures to act with respect to SKANDIA's use of FUND or its shares.
Notwithstanding the foregoing, SKANDIA will not be liable to the extent that any
such loss, claim, damage, liability or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in good faith reliance upon and in conformity with information furnished by
FUND specifically for use in the presentation of the Registration Statement
relating to the variable contracts.
(b) FUND 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. Notwithstanding the foregoing, FUND will not be liable
to the extent that any such loss, claim, damage, liability or expense arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in good faith reliance upon and in conformity with
information furnished by SKANDIA specifically for use in the presentation of the
Registration Statement relating to FUND.
7. SKANDIA agrees to inform the Board of Directors of FUND ("BOARD") 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 FUND and/or the interests of owners of
contracts using any other separate account of any other insurance company which
invests in the FUND.
A majority of the BOARD shall be composed of persons who are not
"interested persons" of FUND as defined by the '40 Act. The BOARD shall monitor
FUND for the existence of any material irreconcilable conflicts between the
interests of the contract owners of all separate accounts investing in the FUND.
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 FUND; 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, inter alia, any
potential or existing conflicts between contract owners and 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 Directors 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:
(i) withdrawing the assets allocable to some or all of the separate
accounts of SKANDIA from FUND or any Portfolio and reinvesting such assets in a
different investment medium, including another Portfolio of the FUND, if any, or
submitting to a vote of all affected contract owners the question of whether
segregation of assets should be implemented and, as appropriate, segregating of
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;
(ii) 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 FUND's election, to withdraw its separate account's investment
in FUND. 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 FUND 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 adversely
affected contract owners. Should FUND or any affiliate of FUND choose to
establish a new funding medium or recommend other remedial action as a way to
resolve any material irreconcilable conflict, SKANDIA will recommend to its
policyowners that they decline an offer to establish a new funding medium or
take other remedial action only if it believes it is in the best interest of the
policyowners to do so.
FUND 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 FUND calculates voting privileges in a
manner consistent with the '40 Act. It is a condition of the Agreement that
SKANDIA will vote shares of FUND, for which it has not received voting
instructions as well as shares attributable to SKANDIA, in the same proportion
as it votes shares for w 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 shall continue in full force and effect from its effective
date, and 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 federal securities
laws and the rules and regulations thereunder, including any exemptive relief
therefrom and the orders of the Securities and Exchange Commission setting forth
such relief, and the laws of the State of Connecticut.
FUND will comply with applicable state law concerning permissible
investments for separate accounts, provided that SKANDIA will notify the FUND of
any changes in such laws when SKANDIA has been made aware of such changes in
connection with SKANDIA contracts which utilize FUND.
12. If any provisions of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
13. Any notice required under this Agreement shall be deemed to have been
given to SKANDIA if mailed to:
American Skandia Life Assurance Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
and notice is deemed given to the FUND if mailed to:
American Skandia Trust
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxx X'Xxxxx
or such other address furnished to the other party pursuant hereto.
14. The waiver by any party of a breach by any other party of any of the
provisions of this Agreement shall not operate or be deemed as a waiver of any
other provision of this Agreement or of any subsequent breach thereof by any
party.
15. This Agreement may be executed in any number of counterparts and by the
different parties hereto each of which shall be deemed to be an original and all
of which, when so executed and delivered by the parties, taken together, shall
constitute one and the same instrument.
16. This Agreement constitutes the entire agreement between the parties
hereto and may not be modified except in a written instrument executed by all
parties hereto.
17. It is understood by the parties that this Agreement is not to be deemed
an exclusive arrangement.
Executed this 26th day of May, 1992.
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
ATTEST: /s/ Xxxxxxxxxx Xxxxxx
By: /s/ Xxxxxx Xxxxxxx
AMERICAN SKANDIA TRUST
ATTEST: /s/ Xxxxxxxxxx Xxxxxx
By: /s/ Xxxxxx X. Xxxxxxxxxx
