AMERICAN SKANDIA ADVISOR FUNDS, INC.
Amended and Restated Underwriting and Distribution Agreement
This Agreement is made as of August 2, 1999 between American
Skandia Advisor Funds, Inc. (the "Company"), a Maryland corporation, and
American Skandia Marketing, Incorporated ("ASM" or the "Distributor"), a
Delaware corporation.
W I T N E S S E T H
WHEREAS, the Company is registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), as an open-end
management investment company; and
WHEREAS, shares of the Company may be divided into one or more
series (each a "Fund," and together, the "Funds") and the shares of each Fund
may be divided into one or more classes; and
WHEREAS, each Fund currently is authorized to offer Class A,
Class B, Class C, Class X and New Class X shares (respectively, the "Class A
Shares," the "Class B Shares," the "Class C Shares," the "Class X Shares," and
the "New Class X Shares") and may offer shares of one or more additional classes
of shares in the future; and
WHEREAS, the term "Shares" where used in this Agreement
pertains collectively to Class A, Class B, Class C, Class X and New Class X
shares of a Fund; and
WHEREAS, from time to time, ASM may enter into sales
agreements with brokers-dealers, banks or other financial intermediaries
providing for the sale of Shares to eligible investors and may engage in certain
other promotional and sales efforts on behalf of the Company; and
WHEREAS, ASM is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is engaged in the business of
selling shares of registered investment companies either directly or through
other broker-dealers; and
WHEREAS, the Company and ASM wish to enter into an agreement
with each other, with respect to the continuous offering of Shares from and
after the date hereof in order to promote the growth of the Company and
facilitate the distribution of Shares; and
WHEREAS, each Fund has adopted a plan (or plans) of
distribution pursuant to Rule 12b-1 under the Investment Company Act with
respect to the Class A, Class B, Class C, Class X and New Class X shares (the
"Class Plans"), as well as a Supplemental Distribution Plan pursuant to Rule
12b-1 (the "Supplemental Plan"), authorizing payments to the Distributor with
respect to the distribution of such classes and the maintenance of related
shareholder accounts (collectively, the "Plans").
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Appointment of the Principal Underwriter
The Company proposes to issue and sell Shares as permitted by
applicable law. The Company hereby appoints ASM as the principal underwriter and
general distributor of the Shares to sell Shares on behalf of the Company, and
ASM hereby accepts such appointment and agrees to act hereunder. In the event
that the Company from time to time designates one or more Funds in addition to
the current Funds or one or more classes of Shares in addition to the Class A,
Class B, Class C, Class X and New Class X Shares, the Company and the
Distributor may enter into a written supplement to this Agreement, and the
additional Funds or classes of Shares thereafter shall be subject to this
Agreement. The Company hereby agrees during the term of this Agreement to sell
each class of Shares through ASM on the terms and conditions set forth below and
as otherwise specified by the Board of Directors of the Company (the "Board of
Directors").
Section 2. Exclusive Nature of Duties
2.1 The exclusive rights granted to ASM to sell Shares shall not apply
to Shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Company or the
acquisition by purchase or otherwise of all (or substantially all) the assets or
the outstanding shares of any such company by the Company.
2.2 Such exclusive rights shall not apply to Shares issued pursuant to
any reinvestment of dividends or capital gains distributions or through the
exercise of any conversion feature or exchange privilege.
2.3 Such exclusive rights shall not apply to Shares issued pursuant to
any reinstatement privilege afforded redeeming shareholders.
2.4 Such exclusive rights shall not apply to purchases made through the
Company's transfer and dividend disbursing agent in the manner set forth in the
currently effective Prospectus of the Company. The term "Prospectus" shall mean
each Prospectus and Statement of Additional Information included as part of the
Company's Registration Statement, as such Prospectus and Statement of Additional
Information may be amended or supplemented from time to time; and the term
"Registration Statement" shall mean the Registration Statement filed by the
Company with the Securities and Exchange Commission (the "Commission") and
effective under the Securities Act of 1933, as amended (the "Securities Act"),
and the Investment Company Act, as such Registration Statement is amended from
time to time.
Section 3. Purchase of Shares from the Company
3.1 ASM shall have the right to buy from the Company on behalf of
investors the Shares needed, but not more than the Shares needed (except for
clerical errors in transmission) to fill unconditional orders for Shares placed
with ASM by investors or registered and qualified securities dealers, banks and
other qualifying financial institutions ("Dealers").
3.2 Shares shall be sold by ASM on behalf of the Company and delivered
by ASM or Dealers, as described in Section 6.4 hereof, to investors at the
applicable offering price set forth in the Prospectus.
3.3 The Company shall have the right to suspend the sale of any or all
classes and/or series of Shares at times when redemption is suspended pursuant
to the conditions in Section 4.3 hereof or at such other times as may be
determined by the Board of Directors.
3.4 The Company, or any agent of the Company designated in writing by
the Company, shall be promptly advised of all purchase orders for Shares
received by ASM. Any order may be rejected by the Company; provided, however,
that the Company will not arbitrarily or without reasonable cause refuse to
accept or confirm orders for the purchase of Shares.
3.5 The Company (or its agent) will confirm orders upon their receipt,
will make appropriate book entries and upon receipt by the Company (or its
agent) of payment therefor, will deliver deposit receipts for such Shares
pursuant to the instructions of ASM. Payment shall be made to the Company in New
York Clearing House funds or Federal funds or such other method as may be agreed
upon in writing by ASM and the Company. ASM agrees to cause such payment and
such instructions to be delivered promptly to the Company (or its agent).
Section 4. Repurchase or Redemption of Shares by the Company
4.1 Any of the outstanding Shares may be tendered for redemption at any
time, and the Company agrees to repurchase or redeem the Shares so tendered in
accordance with its Articles of Incorporation and By-Laws, as amended from time
to time, and in accordance with the applicable provisions of the Prospectus. The
price to be paid to redeem or repurchase Shares shall be equal to the net asset
value determined as set forth in the Prospectus. All payments by the Company
hereunder shall be made in the manner set forth in Section 4.2 below.
4.2 The Company shall pay the total amount of the redemption price as
defined in the above paragraph pursuant to the instructions of ASM on or before
the seventh day subsequent to its having received the notice of redemption in
proper form. The proceeds of any redemption of Shares shall be paid by the
Company as follows: (i) in the case of Shares subject to a contingent deferred
sales charge, any applicable contingent deferred sales charge shall be paid to
ASM and the balance shall be paid to or for the account of the redeeming
shareholder, in each case in accordance with the applicable provisions of the
Prospectus; and (ii) in the case of all other Shares, proceeds shall be paid to
or for the account of the redeeming shareholder, in each case in accordance with
applicable provisions of the Prospectus.
4.3 Redemption of any Shares or payment may be suspended at times when
the New York Stock Exchange is closed for other than customary weekends and
holidays, when trading on said Exchange is restricted, when an emergency exists
as a result of which disposal by the Company of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Company
fairly to determine the value of its net assets, or during any other period when
the Commission, by order, so permits.
Section 5. Duties of the Company
5.1 Subject to the possible suspension of the sale of Shares as
provided herein, the Company agrees to sell its Shares so long as it has Shares
available.
5.2 The Company shall furnish ASM copies of all information, financial
statements and other papers which ASM may reasonable request for use in
connection with the distribution of Shares, and this shall include one certified
copy, upon request by ASM, of all financial statements prepared for the Company
by independent public accountants. The Company shall make available to ASM such
number of copies of its Prospectus and annual and interim reports as ASM shall
reasonable request.
5.3 The Company shall take, from time to time, but subject to the
necessary approval of the Board of Directors and the shareholders of the
Company, all necessary action to fix the number of authorized Shares and such
steps as may be necessary to register the same under the Securities Act, to the
end that there will be available for sale such number of Shares as ASM
reasonably may expect to sell. The Company agrees to file from time to time such
amendments, reports and other documents as may be necessary in order that there
will be no untrue statement of a material fact in the Registration Statement, or
necessary in order that there will be no omission to state a material fact in
the Registration Statement which omission would make the statements therein
misleading.
5.4 The Company shall use its best efforts to qualify and maintain the
qualification of any appropriate number of Shares for sale under the securities
laws of such states as ASM and the Company may approve; provided that the
Company shall not be required to amend its Articles of Incorporation or By-Laws
to comply with the laws of any state, to maintain an office in any state, to
change the terms of the offering of Shares in any state from the terms set forth
in its Registration Statement, to qualify as a foreign corporation in any state
or to consent to service of process in any state other than with respect to
claims arising out of the offering of Shares. Any such qualification may be
withheld, terminated or withdrawn by the Company at any time in its discretion.
As provided in Section 9 hereof, the expense of qualification and maintenance of
qualification shall be borne by the Company. ASM shall furnish such information
and other material relating to its affairs and activities as may be required by
the Company in connection with such qualifications.
Section 6. Duties of ASM
6.1 ASM shall devote reasonable time and effort to effect sales of
Shares to investors, but shall not be obligated to sell any specific number of
Shares of any class or in the aggregate. Sales of Shares shall be on the terms
described in the then current Prospectus. ASM may enter into like arrangements
with other investment companies. ASM may compensate the Dealers as set forth in
the Prospectus.
6.2 In selling each class of Shares, ASM shall use its best efforts in
all respects duly to conform with the requirements of all federal and state laws
relating to the sale of such securities. Neither ASM nor any Dealer nor any
other person is authorized by the Company to give any information or to make any
representations, other than those contained in the Registration Statement or
Prospectus and any sales literature approved by appropriate officers of the
Company.
6.3 ASM shall adopt and follow procedures for the confirmation of sales
to investors and Dealers, the collection of amounts payable by investors and
Dealers on such sales and the cancellation of unsettled transactions, as may be
necessary to comply with the requirements of the National Association of
Securities Dealers, Inc. (the "NASD").
6.4 ASM shall have the right to enter into agreements with Dealers of
its choice for the sale of Shares ("Dealer Agreements"), provided that the
Company shall approve the forms of such agreements. Within the United States,
ASM shall offer and sell Shares only to such Dealers as are members in good
standing of the NASD or are not eligible to become members of the NASD. Shares
sold to Dealers shall be for resale by such dealers only at the offering price
determined as set forth in the Prospectus.
Section 7. Payments to ASM
7.1 ASM shall receive any front-end sales charge which is imposed upon
such sales of Shares and may retain any portion of such sales charge not
reallocated to Dealers as set forth in the Prospectus, subject to the
limitations of Rule 2830(d) of the NASD Conduct Rules. Payment of these amounts
to ASM is not contingent upon the adoption or continuation of any applicable
Plans.
7.2 ASM shall receive and may retain any contingent deferred sales
charge which is imposed on such sales as set forth in the Prospectus, subject to
the limitations of Article III, Section 26 of the NASD Rules of Fair Practice.
Payment of these amounts to ASM is not contingent upon the adoption or
continuation of any applicable Plans.
Section 8. Payment to ASM under the Plans
8.1 The Company shall pay to ASM as compensation for services under any
Class Plan and this Agreement distribution and service fees with respect to the
Shares as described in such Plan and this Agreement. To the extent that
distribution fees are payable to ASM under any Class Plan in respect of Shares
already sold by ASM, such fees shall not be paid to any person other than ASM or
its designee so long as such Plan is in effect. The Company shall pay to ASM as
compensation under the Supplemental Plan and this Agreement only from brokerage
commissions paid by the Funds in connection with their portfolio transactions
that are made available to ASM as described in such Plan.
8.2 So long as a Plan or any amendment thereto is in effect, ASM shall
inform the Board of Directors of the commissions and account servicing fees with
respect to Shares to be paid by ASM to account executives of ASM and to Dealers
which have Dealer Agreements with ASM. In addition, so long as a Plan or any
amendment thereto is in effect, at the request of the Board of Directors or any
agent or representative of the Company, ASM shall provide such additional
information as may reasonably be requested concerning the activities of ASM
hereunder and the costs incurred in performing such activities with respect to
the relevant class of Shares and/or Fund.
Section 9. Allocation of Expenses
The Company shall bear all costs and expenses of the
continuous offering of Shares (except for those costs and expenses borne by ASM
pursuant to a Plan and subject to the requirements of Rule 12b-1 under the
Investment Company Act), including fees and disbursements of the Company's
counsel and auditors, in connection with the preparation and filing of any
required Registration Statements and/or Prospectuses under the Investment
Company Act or the Securities Act, and all amendments and supplements thereto,
and preparing and mailing annual and periodic reports and proxy materials to
shareholders (including but not limited to the expense of setting in type any
such Registration Statements, Prospectuses, annual or periodic reports or proxy
materials). The Company shall also bear the cost of expenses of qualification of
Shares for sale, and, if necessary or advisable in connection therewith, of
qualifying the Company as a broker or dealer, in such states of the United
States or other jurisdictions as shall be selected by the Company and ASM
pursuant to Section 5.4 hereof, and the cost and expense payable to each such
state for continuing qualification therein until the Company decides to
discontinue such qualification pursuant to Section 5.4 hereof.
Section 10. Indemnification
10.1 The Company agrees to indemnify, defend and hold ASM, its officers
and directors and any person who controls ASM within the meaning of Section 15
of the Securities Act, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any reasonable counsel fees
incurred in connection therewith) which ASM, its officers, directors or any such
controlling person may incur under the Securities Act, or under common law or
otherwise, arising out of or based upon any untrue statement of a material fact
contained in the Registration Statement or any Prospectus or arising out of or
based upon any alleged omission to state a material fact required to be stated
in either thereof or necessary to make the statements in either thereof not
misleading, except insofar as such claims, demand, liabilities or expenses arise
out of or are based upon such untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
furnished in writing by ASM to the Company for use in the Registration Statement
or any Prospectus; provided, however, that this indemnity agreement shall not
inure to the benefit of any such officer, director or controlling person unless
a court of competent jurisdiction shall determine in a final decision on the
merits, that the person to be indemnified was not liable by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of its reckless disregard of its obligations under this Agreement
(disabling conduct), or, in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the indemnified person was
not liable by reason of disabling conduct, by (a) a vote of a majority of a
quorum of those directors (the "Qualified Directors") who are neither
"interested persons" of the Company as defined in Section 2(a)(19) of the
Investment Company Act nor parties to the proceeding, or (b) written opinion of
an independent legal counsel. The Company's agreement to indemnify ASM, its
officers and directors and any such controlling person as aforesaid is expressly
conditioned upon the Company's being promptly notified of any action brought
against ASM, its officers or directors or any such controlling person, such
notification to be given by letter or telegram addressed to the Company at its
principal business office. The Company agrees promptly to notify ASM of
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issue and sale of any Shares.
10.2 ASM agrees to indemnify, defend and hold the Company, its officers
and Directors and any person who controls the Company, if any, within the
meaning of Section 15 of the Securities Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) which the Company, its
officers and directors or any such controlling person may incur under the
Securities Act or under common law or otherwise, but only to the extent that
such liability or expense incurred by the Company, its directors or officers or
such controlling person resulting from such claims or demands shall arise out of
or be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by ASM to the Company for use in the
Registration Statement or any Prospectus or shall arise out of or be based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or any
Prospectus or necessary to make such information not misleading. ASM's agreement
to indemnify the Company, its officers and directors and any such controlling
person as aforesaid, is expressly conditioned upon ASM's being promptly notified
of any action brought against the Company, its officers and directors or any
such controlling person, such notification being given to ASM at its principal
business office.
Section 11. Duration and Termination of this Agreement
11.1 This Agreement shall become effective as of the date first above
written and shall remain in force for a period of more than one year after it
takes effect only so long as such continuance is specifically approved at least
annually by (a) the Board of Directors, or by the vote of a majority of the
outstanding voting securities of the applicable class of Shares and/or Fund as
required by the Investment Company Act, and (b) by the vote of a majority of the
Qualified Directors cast in person at a meeting called for the purpose of voting
upon such approval.
11.2 This Agreement may be terminated with respect to any class of
Shares offered by any Fund or to any Fund at any time, without the payment of
any penalty, by vote of a majority of the Qualified Directors or by vote of a
majority of the outstanding voting securities of the applicable class of Shares
and/or Fund as required by the Investment Company Act, or by ASM, on sixty (60)
days' written notice to the other party. This Agreement shall automatically
terminate in the event of its assignment.
11.3 The terms "affiliated person," "assignment," "interested person"
and "vote of a majority of the outstanding voting securities," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the rules and regulations thereunder, subject to such exemptions
as may be granted by the Securities and Exchange Commission.
Section 12. Amendments to this Agreement
This Agreement may be amended by the parties only if such
amendment is specifically approved by a vote of (a) the Board of Directors, or
by the vote of a majority of the outstanding voting securities of the applicable
class of Shares and/or Fund as required by the Investment Company Act, and (b)
the vote of a Qualified Directors cast in person at a meeting called for the
purpose of voting on such amendment.
Section 13. Separate Agreement as to Each Class of Shares and Fund
The amendment or termination of this Agreement with respect to
any class of Shares or any Fund shall not result in the amendment or termination
of this Agreement with respect to any other class of Shares or Fund unless
explicitly so provided.
Section 14. Governing Law
The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Connecticut as at the
time in effect and the applicable provisions of the Investment Company Act. To
the extent that the applicable law of the State of Connecticut, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year above written.
American Skandia Advisor Funds, Inc.
By: _______________________________
American Skandia Marketing, Incorporated
By: _______________________________
11803-1
