ADMINISTRATION AGREEMENT
American Skandia Advisor Funds, Inc. ("ASAF"), a Maryland Corporation
having its principal business office at Xxx Xxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxxx 00000, and American Skandia Investment Services, Inc. ("ASISI"), a
Connecticut Corporation having its principal office and place of business at Xxx
Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, have agreed to enter into this
Administration agreement ("Agreement") as of the 3rd day of June, 1998.
Pursuant to separate management agreements ASISI serves as investment
manager to each series of ASAF, an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act") that is authorized
to issue shares in separate series, with each such series representing interests
in a separate portfolio of securities and other assets (each, a "Fund").
Employers sponsoring 401(k) qualified plans and certain other qualified plans
("Plans") may establish one or more Fund accounts on behalf of such plans to
purchase Class A shares of a Fund (collectively, the "Accounts," and
individually, each an "Account"). Certain parties ("Recordkeepers") serve as
recordkeepers of qualified plan trusts under agreements with plan sponsors and
provide administrative services to the qualified plans and their participants
("Participants"). ASAF has appointed State Street Bank and Trust ("State
Street"), and State Street currently serves, as its transfer agent, dividend
disbursing agent, custodian of certain retirement plans and agent in connection
with certain other activities pursuant to a Transfer Agency and Service
Agreement (the "Transfer Agency Agreement"), dated July 21, 1997 (in such
capacity, State Street or any successor to State Street is hereinafter referred
to as the "Transfer Agent"). ASAF has appointed PFPC, Inc. to provide, and PFPC,
Inc. currently provides, certain administrative and accounting services,
including computing the net asset value of each class of shares of each series
of ASAF, pursuant to an Administration and Accounting Services Agreement (the
"Administration Agreement"), dated June 1, 1997 (in such capacity, PFPC or any
successor to PFPC is hereinafter referred to as the "Administrative Agent").
ASAF, on behalf of each Fund, and ASISI desire to enter into this Agreement
whereby ASISI, directly or through one or more Recordkeepers, will provide for
the submission of purchase, withdrawal and transfer requests via electronic data
link to the Transfer Agent, generation and delivery of confirmation statements
and periodic reports to Participants and plan sponsors and the performance of
all tax reporting functions associated with each qualified plan and its
Participants for which a Recordkeeper serves as both recordkeeper and trustee of
such qualified plan or otherwise agrees to perform tax reporting functions for
qualified plans for which the Recordkeeper is recordkeeper only.
The terms and conditions set forth in this Agreement are as follows:
Article 1 - Services
1.0 Subject to the terms and conditions set forth in this Agreement, ASISI is
authorized to enter into one or more agreements with Recordkeepers
providing for the performance of administrative services ("Services") on
behalf of Participants' accounts, which Services shall be substantially the
same in nature and scope as those contemplated by the form of the
Sub-administration Agreement attached as Schedule A.
1.1 ASAF agrees that each Recordkeeper will be recognized as record owner of
its Account on the books and records of the Funds in such manner as shall
be specified by the Recordkeeper and that separate or allocated accounts
for Participants will not be maintained by ASAF. ASAF and its agents
(including the Transfer Agent and the Administrative Agent) will be
entitled to rely conclusively upon any written information, data or
instructions received from Recordkeepers.
1.2 ASAF shall direct the Transfer Agent and Administrative Agent in writing to
establish and perform the operational procedures as may be agreed upon
between ASISI and each Recordkeeper provided that such procedures are
satisfactory in all respects to the Transfer Agent and the Administrative
Agent.
1.3 ASISI undertakes to comply and to use its best efforts to cause
Recordkeepers to comply with all applicable requirements of law, rules and
regulations with respect to the performance of Services.
1.4 ASISI shall use its best efforts to prevent the use of any material using
ASAF's name by any Recordkeeper without the prior approval of ASAF.
1.5 In order to benefit from certain cost efficiencies, ASISI may require
Recordkeepers to establish and maintain an electronic data link for the
transmission of qualified plan information to and from the Transfer Agent.
ASAF may agree to pay, but shall not be obligated to pay, Recordkeepers'
costs and expenses associated with electronic data links in such amounts as
may be specified from time to time by ASISI in writing.
1.6 In selecting Recordkeepers, ASISI shall use reasonable care. ASISI shall
evaluate and consider the reputation and standing of proposed Recordkeepers
among providers of Services, the financial responsibility of proposed
Recordkeepers, the operational capabilities of proposed Recordkeepers and
such other factors as may, in its judgment, be appropriate. ASISI shall
make due inquiry as to whether Recordkeepers will be year 2000 compliant
before November 1, 1999 and will be able to perform all services and/or
obligations contemplated by this Agreement without interruption, shall
monitor the year 2000 compliance efforts of Recordkeepers and shall notify
ASAF immediately upon being aware of any facts or circumstances that would
reasonably indicate that any Recordkeeper will not be year 2000 compliant
by November 1, 1999. 1.7 ASAF agrees to provide access to its records,
files and other information related to an Account or any records, files or
information related to this Agreement to Recordkeepers, or to their
external auditors. The requesting Recordkeeper will bear the expense of
producing any records, files or information in excess of the expense of
normal business activities. ASISI will require Recordkeepers to allow it
access on the same terms and conditions to records, files and other
information relating to Accounts, this Agreement or Sub-Administration
Agreements, and will provide ASAF with any information contained in or
derived from such records, files or information necessary for ASAF to
perform its obligations under this Agreement and applicable laws, rules and
regulations or to evaluate the services of Recordkeepers. 1.8 ASISI will
require each Recordkeeper to implement and to maintain internal controls
reasonably designed to prevent orders received from Participants or Plans
after 4:00 P.M. on any given business day on which orders are processed by
ASAF from being aggregated with orders properly received before that time.
Article 2
2.0 Exchange of Information and Confidentiality. ASAF acknowledges that ASISI
from time to time may disclose to Recordkeepers information concerning ASAF
including but not limited to (i) books, records, or data for the purpose of
performing ASISI's obligations under this Agreement and under
Sub-Administration Agreements and (ii) documents or information of a
confidential nature. ASISI shall cause each Recordkeeper to use
confidential information solely for the purpose of performing its
obligations in respect of Accounts and not for any other purpose. ASISI
shall cause each Recordkeeper to maintain the confidentiality of all
confidential information using the same degree of care it uses in
connection with the treatment of its own confidential information, but in
no event may such Recordkeeper use less than reasonable care. Confidential
information shall not be made available by any Recordkeeper to other
persons or companies, even in the fulfillment of its responsibilities under
a Sub-Administration Agreement, without the express written permission of
ASAF, provided that such consent shall not be unreasonably withheld. ASISI
acknowledges that any violation of its duties or the duties of a
Recordkeeper in respect of confidential information may cause irreparable
injury and incalculable harm to ASAF as to which there is no adequate
remedy at law and may entitle ASAF to injunctive relief, specific
performance and other equitable relief for such breach or threatened breach
in addition to all other rights or remedies available to ASAF in any court
having jurisdiction thereof. ASISI agrees to seek immediately injunctive
relief, specific performance or other equitable relief for any breach or
threatened breach of any Recordkeeper's obligations in respect of ASAF's
confidential information.
Article 3 - Compensation
3.0 Compensation. ASAF shall pay compensation to ASISI for services rendered in
accordance with the terms of this Agreement at the rate and in the manner
set forth in Schedule B to this Agreement as the same may be amended from
time to time by mutual written agreement of the parties. It is understood
and agreed that ASISI shall be responsible for payment of compensation to
Recordkeepers.
3.1 Out of Pocket Expenses. ASAF will reimburse ASISI for other reasonable
out-of-pocket expenses incurred by ASISI in the performance of services in
accordance with this Agreement.
Article 4 - Indemnification
4.0 Indemnification. ASISI shall indemnify and hold harmless ASAF against all
liability, loss, damage and expense (including but not limited to,
investment "breakage costs," reasonable attorneys' fees and costs), to the
extent that such liability, loss, damage or expense was proximately caused
by ASISI's negligent act or omission, or willful act or omission, or those
of its employees or subcontractors (including Recordkeepers), in connection
with the provision or use of the service described under this Agreement
(including the selection of Recordkeepers). ASISI shall be notified as soon
as practicable of any such claim and shall have the right to participate in
the defense of such claims, lawsuits or proceedings with its own counsel at
its own expense. In no event shall XXXX xxxxxx any such claim, lawsuit or
proceeding without ASISI's prior written approval.
4.1 Intellectual Property Indemnity. ASISI shall indemnify and hold harmless
ASAF from any and all claims, actions, liabilities, damages, costs and
expenses, including reasonable attorneys' fees and expenses, arising in
connection with this Agreement out of any third-party claims of
infringements of any patents, copyrights, licenses, trademarks, service
marks or any other property right, to the extent such claim, action,
liability, damage, cost or expense was proximately caused by the negligent
or willful act or omission of ASISI or any Recordkeeper, or those of their
employees, agents or subcontractors, and provided that ASISI is notified in
writing as soon as practicable of such claims. ASISI shall have the right
to participate in the defense of all such claims, lawsuits or other
proceedings with its own counsel at its own expense. In no event shall XXXX
xxxxxx any claim, lawsuit or proceedings subject to this provision without
ASISI's prior written approval.
Article 5 - Termination
5.0 Termination Upon Notice. This Agreement may be terminated at any time by
either ASAF or ASISI by providing sixty (60) days prior written notice of
such termination to the other party.
5.1 Expenses. Unless this Agreement is terminated as the result of a material
breach of this Agreement by another party, the terminating party will
reimburse the non-terminating parties for all reasonable out-of-pocket
expenses incurred in connection with such termination, as described in
Section 5.0 above, including the retrieval and movement of documents,
records and data.
5.2 Rights and Obligations. Termination of this Agreement will not terminate
the rights and obligations of any party arising out of the period during
which this Agreement was in force, including the payment of any outstanding
fees due to a party who performed services prior to the termination of this
Agreement.
Article 6- Miscellaneous
6.0 Assignment. Neither this agreement nor any rights or obligation under the
Agreement may be assigned by a party without the written consent of the
other parties.
6.1 Entire Agreement. This Agreement, including Schedule B attached hereto,
constitutes the entire agreement between ASAF and ASISI and, except as set
forth in Section 6.2 below, supersedes all prior negotiations and
representations whether written or oral regarding the subject matter of
this Agreement. The parties may, upon mutual consent, engage with one
another in other business not subject to this Agreement.
6.2 Conflicts with Investment Management Agreements. In the event of any
conflict between a provision of this Agreement and a provision of any
investment management agreement between ASISI and a Fund, the investment
management agreement will control.
6.3 Obligations of Relevant Funds. Any amounts payable by ASAF hereunder shall
be the responsibility of the relevant Funds, and shall be satisfied only
against the relevant Fund's assets and not against the assets of any other
Fund.
6.4 Governing Law. This Agreement will be governed by and interpreted under the
laws of the State of Connecticut.
6.5 Invalid Part. If any provision of this Agreement is held invalid and not
enforceable in accordance with its terms in a particular jurisdiction, this
determination will not affect the validity or enforceability of the
remaining provisions of this Agreement.
6.6 Amendment. This Agreement may not be amended except by written agreement
signed by duly authorized officers of ASAF and ASISI.
6.7 Non-Waiver. The failure of any party to require strict compliance with any
provision of this Agreement will be without prejudice and will not
constitute and not be deemed a waiver of that party's right thereafter to
require strict compliance from the noncomplying party or parties.
6.8 Section Headings. The headings in this Agreement are for reference and
convenience only and will not be construed so as to limit or otherwise
affect the meaning of this Agreement.
6.9 Multiple Copies. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original.
In witness whereof, ASAF and ASISI have caused this Agreement to be executed in
their names and on their behalf under their seals by and through their duly
authorized officers, as of the day and year first above written.
AMERICAN SKANDIA ADVISOR FUNDS, INC.
By: _____________________________________________
Name: __________________________________________
Title: ___________________________________________
Date: ___________________________________________
AMERICAN SKANDIA INVESTMENT SERVICES, INCORPORATED
By: _____________________________________________
Name: __________________________________________
Title: ___________________________________________
Date: ___________________________________________
SCHEDULE B
ASAF shall pay to ASISI under Section 3.0 of this Agreement a fee on a quarterly
basis, with respect to each Plan the Recordkeeper for which has entered into a
sub-administration agreement with ASISI providing for the maintenance of omnibus
accounts for such Plan in an amount equal to, depending on the particular
sub-administration agreement, either (a) 0.05% of the assets of such Plan
invested in the Company as of the last day of the preceding calendar quarter and
for which the Recordkeeper provides Services, or (b) a fixed dollar amount up to
$3.75 ($15 annually) per each Participant account maintained by Recordkeeper
reflecting the holdings of a Participant in a Fund. In no event shall ASISI
receive any compensation under this Agreement in excess of the amounts paid to
Recordkeepers plus amounts retained by ASISI as reimbursement for other
out-of-pocket expenses under Section 3.1.
