SALES AGREEMENT
THIS AGREEMENT is made by and between The ▇▇▇▇▇ American Fund
("ALGER"), 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, ▇▇▇▇▇ 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, ▇▇▇▇▇ is organized as a series fund, currently with
five Portfolios: The ▇▇▇▇▇ American Money Market Portfolio, the Alger American
Income and Growth Portfolio, the ▇▇▇▇▇ American Small Capitalization Portfolio,
the Alger American Growth Portfolio and the ▇▇▇▇▇ American Fixed Income
Portfolio, and may establish others; and
WHEREAS, ▇▇▇▇▇ 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 ▇▇▇▇▇
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 ▇▇▇▇▇ and SKANDIA as
follows:
1. ▇▇▇▇▇ 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. ▇▇▇▇▇ will make the shares available to such separate accounts at net
asset value.
3. Orders shall be placed for such shares with ▇▇▇▇▇'▇ designated agent
pursuant to procedures which are then in effect and which may be modified from
time to time. ▇▇▇▇▇ will provide SKANDIA with documentation of all procedures
now in effect and will undertake to inform SKANDIA of any modifications to such
procedures.
4. ▇▇▇▇▇ will provide SKANDIA camera ready copy of the current ▇▇▇▇▇
prospectus and any supplements thereto for printing by SKANDIA. ▇▇▇▇▇ will
provide SKANDIA a copy of the statement of additional information for
duplication. ▇▇▇▇▇ will provide SKANDIA copies of its proxy material suitable
for printing. ▇▇▇▇▇ will provide SKANDIA annual and semi-annual reports and any
supplements thereto, in camera-ready form.
5. Any materials utilized by SKANDIA which describe ▇▇▇▇▇, its shares, or
service providers, including its adviser, shall be submitted to ▇▇▇▇▇ and be
approved by it prior to use.
6. (a) SKANDIA shall be solely responsible for its actions in connection
with its use of ▇▇▇▇▇ and its shares and shall indemnify and hold harmless
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ Management, Inc., ▇▇▇▇ ▇▇▇▇▇ & Company, Incorporated, its
officers, directors and trustees from any liability, including reasonable
attorney's fees, arising from SKANDIA's use of ▇▇▇▇▇ or its shares. SKANDIA
shall exonerate ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ Management, Inc., ▇▇▇▇ ▇▇▇▇▇ & Company,
Incorporated, its officers, directors and trustees for any use by SKANDIA of
▇▇▇▇▇ or its shares.
(b) ALGER shall be solely responsible for its actions in connection with
its operations and shall indemnify and hold harmless SKANDIA, it's officers and
directors from any liability, including reasonable attorneys' fees, for its
negligent or wrongful acts or failures to act with respect thereto.
7. SKANDIA agrees to inform the Board of Trustees of ▇▇▇▇▇ of the existence
of or any potential for a material irreconcilable conflict of interest between
the interests of owners of contracts using the separate accounts of SKANDIA
which invest in ▇▇▇▇▇ and/or the interests of owners of contracts using any
other separate account of any other insurance company which invests in ▇▇▇▇▇.
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 ▇▇▇▇▇; or
(f) a decision by SKANDIA to disregard the voting instructions of contract
owners.
SKANDIA will be responsible for assisting the Board of
Trustees of ▇▇▇▇▇ 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 of Trustees of ▇▇▇▇▇ 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 ▇▇▇▇▇ or any Portfolio and reinvesting such assets in a
different investment medium, including another Portfolio of ▇▇▇▇▇, or submitting
to a vote of all affected contract owners the questions of whether (i)
withdrawal of assets from ▇▇▇▇▇ or (ii) segregation of assets should be
implemented and, as appropriate, withdrawing or 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 withdrawal or
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 ▇▇▇▇▇'▇ election, to withdraw its separate account's
investment in ▇▇▇▇▇. 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 of Trustees of ▇▇▇▇▇ shall determine whether or not any proposed
action adequately remedies any material irreconcilable conflict. In no event
will ▇▇▇▇▇ 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.
▇▇▇▇▇ will undertake to promptly make known to SKANDIA the
Board of Trustees' 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 ▇▇▇▇▇ calculates voting privileges in a
manner consistent with other life companies utilizing ▇▇▇▇▇. 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. SKANDIA shall at least annually submit to ▇▇▇▇▇'▇ Board of Trustees such
reports, materials or data as the Trustees may reasonably request so that the
Trustees may fully carry out the obligations imposed upon them by any order of
the Securities and Exchange Commission exempting any of the parties to this
Agreement from any of the provisions of the 1940 Act and the rules and
regulations thereunder. Said reports, materials and data shall be submitted more
frequently if deemed appropriate by the Trustees.
10. The Agreement shall terminate automatically in the event of its
assignment.
11. 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.
12. 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.
13. It is understood by the parties that this Agreement is not to be deemed
an exclusive arrangement.
Executed this 22nd day of July 1988.
THE ▇▇▇▇▇ AMERICAN FUND
ATTEST: /s/ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer - Secretary
AMERICAN SKANDIA LIFE ASSURANCE
CORPORATION
ATTEST: /s/ By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
