Exhibit Number Description
9(a) Service Agreement between American Skandia
Investment Services, Incorporated and Xxxxxx
Life Insurance Company.
SERVICE AGREEMENT
This SERVICE AGREEMENT, dated as of June 7, 1995 between Xxxxxx Investors
Life Insurance Company, ("KILICO") an Illinois insurance corporation having its
principal offices and place of business at 0 Xxxxxx Xxxxx, X-0, Xxxx Xxxxx, XX
00000, and American Skandia Investment Services, Incorporated ("ASISI"), as
Investment Advisor for the American Skandia Trust (the "Fund"), a Connecticut
corporation having its principal office and place of business at Xxx Xxxxxxxxx
Xxxxx, Xxxxxxx, XX 00000.
In consideration of the promises and mutual covenants set forth in this Service
Agreement, KILICO and ASISI agree as follows:
1. KILICO agrees to provide services to beneficial shareholders of
Portfolios of the Fund ("Beneficial Holders") on behalf of ASISI, to the same
extent ASISI is authorized to provide such services, including the following
services:
a) responding to inquiries from Beneficial Holders regarding the services performed by KILICO or any
affiliate of KILICO, as they relate to the Fund;
b) providing information to ASISI and to Beneficial Holders with respect to shares beneficially owned by
Beneficial Holders;
c) communicating directly with Beneficial Holders concerning the Fund's operations, and portfolio
composition and performance;
d) including the Fund portfolios that are offered as underlying
investment options for accounts that serve as investment
vehicles for certain variable life and/or variable annuity
contracts (the "Variable Insurance Contracts") and qualified
plan funding agreements offered by KILICO, as well as relevant
financial and performance data, in any software program
currently available or proposed, that are or will be made
available by KILICO to financial professionals that sell
products or provide investment allocation services in relation
to such products ("Portfolio Support Services");
e) updating any Portfolio Support Services and other printed portfolio information on a quarterly basis; and
f) providing such other similar services in connection with the Fund as ASISI may reasonably request, to
the extent permitted under applicable statutes, rules and regulations.
2. KILICO also agrees to consult, either directly or through one of its
affiliates, with ASISI in connection with the design and implementation of
shareholder servicing arrangements relating to shares issued by the Fund,
including without limitation, sponsoring and/or participating in seminars and/or
sales meetings relating to the distribution of shares of the Fund and servicing
of Fund Portfolios.
3. ASISI agrees to provide or arrange to provide, to KILICO, or its
designated representative, with the portfolio information reasonably requested
to support any Portfolio Support Services.
4. ASISI recognizes KILICO as the sole legal shareholder of the shares of
the Fund purchased pursuant to the Variable Insurance Contracts offered by
KILICO. ASISI also recognizes that substantial savings in administrative and
shareholder servicing support expenses will be derived by virtue of the Fund
having a sole legal shareholder of such shares rather than multiple legal
shareholders. These substantial savings to ASISI will be the result of KILICO's
performing the services set forth in Paragraphs 1and 2 above. In consideration
of the administrative and shareholder servicing support savings resulting from
such arrangement, ASISI agrees to pay KILICO a fee (the "Portfolio Servicing
Fee") calculated as a percentage of the average daily net asset value of all
shares in Portfolios of the Fund purchased by KILICO, including such shares
purchased through reinvestment of dividends and distributions, which fee shall
be payable monthly. The current Portfolio Servicing Fee Schedule is set forth in
Appendix A. The Portfolio Servicing Fee, which is payable ten (10) days after
the end of a calendar month, shall be payable only so long as the portfolios of
the Fund continue to be available as investment options for accounts that serve
as investment vehicles for the Variable Insurance Contracts and qualified plan
funding agreements offered by KILICO as set forth in Schedule A ("Investment
Option(s)"). If a new portfolio of the Fund becomes available or ceases to be
available as an Investment Option during a calendar month, the Portfolio
Servicing Fee payable shall be pro-rated for the time period such portfolio was
available as an Investment Option. Any Investment Option additions or deletions
will be reflected in Schedule A. Fees described in this Paragraph 4 shall cease
to accrue with respect to shares that are redeemed. Any overpayment of
compensation and fees pursuant to this Paragraph 4 shall reduce amounts payable
to KILICO in subsequent months. ASISI and KILICO agree that the services
provided thereunder will be reviewed not less than annually. Neither ASISI nor
KILICO will agree to waive any portion of the Portfolio Servicing Fee unless
clearly mandated by law, without the consent and concurrence of the other, which
consent and concurrence will not be unreasonably withheld.
5. KILICO represents, warrants and covenants that it is a corporation
organized under the laws of the State of Illinois, and has the authority,
pursuant to such laws, to enter into and perform services under this Service
Agreement, and that it may lawfully receive the Portfolio Servicing Fee under
all applicable laws.
6. ASISI represents, warrants and covenants that it is a corporation
organized under the laws of the State of Connecticut, and has the authority,
pursuant to such laws, to enter into and perform services under this Service
Agreement, and that it may lawfully pay the Portfolio Se icing Fee under all
applicable laws.
7. ASISI agrees to indemnify and hold harmless KILICO and its officers,
directors and each affiliated person of KILICO within the meaning of Section
2(a)(3) of the Investment Company Act of 1940, as amended (collectively, the
"KILICO Indemnified Parties"), from any and all loss, liability and expense
resulting from willful misfeasance, bad faith or gross negligence, or by reason
of the reckless disregard of the respective obligations and duties of the ASISI
Indemnified Parties, as defined below, under this Service Agreement, or breach
of a representation, warranty or covenant contained in paragraph 6, except to
the extent such loss, liability or expense is the result of (a) the breach of a
representation, warranty or covenant contained in paragraph 5 hereof, or (b) the
willful misfeasance, bad faith or gross negligence of any of the KILICO
Indemnified Parties in the performance of their respective duties, or by reason
of the reckless disregard of respective obligations and duties of the KILICO
Indemnified Parties under this Service Agreement.
8. KILICO agrees to indemnify and hold harmless ASISI and it officers,
directors and each affiliated person of ASISI within the meaning of Section
2(a)(3) of the Investment Company Act of 1940, as amended (collectively, the
"ASISI Indemnified Parties"), from any and all loss, liability and expense
resulting from willful misfeasance, bad faith or gross negligence, or by reason
of the reckless disregard of the respective obligations and duties of the KILICO
Indemnified Parties under this Service Agreement, or breach of a representation,
warranty or covenant contained in paragraph 5, except to the extent such loss,
liability or expense is the result of (a) the breach of a representation,
warranty or covenant contained in paragraph 6 hereof, or b) the willful
misfeasance, bad faith or gross negligence of any of the ASISI Indemnified
Parties in the performance of their respective duties, or by reason of the
reckless disregard or respective obligations and duties of the ASISI Indemnified
Parties under this Service Agreement.
9. Either party may terminate this Service Agreement on six (6) months'
written notice to the other party. Any notice shall be sufficiently given when
sent by registered or certified mail to KILICO at
Xxxxxx Investors Life Insurance Company
0 Xxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: General Counsel
or to ASISI at:
American Skandia Investment Services, Incorporated
Xxx Xxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx X. Xxxxxxxxxx
Telecopy Number: (000) 000-0000
or to such other address furnished to the other party pursuant hereto.
00.Xx the event that ASISI ceases to act as Investment Advisor for the
Fund, this Service Agreement will terminate at the option of KILICO on thirty
(30) days written notice. This Service Agreement is terminable immediately upon
notice by one party to another upon (a) dissolution or bankruptcy of either
party, (b) a material breach of this Service Agreement by either party, or (c)
termination of the Participation Agreement, dated June 1996, between the parties
and the Fund.
11.ASISI, unless otherwise objecting, agrees that an affiliate of KILICO
may provide any of the services set forth in paragraphs 1and 2, subject to
KILICO's reasonable and good faith determination that its affiliate will provide
such services in a manner consistent with this Agreement.
00.Xx waiver by either party of any provision of this Service Agreement
shall operate as, or be construed as, a waiver of any subsequent breach thereof,
or waiver of any other provision of this Service Agreement.
00.Xx the event that any provision of this Service Agreement shall be held
invalid, the same shall not affect in any respect whatsoever the validity of the
remainder of this Service Agreement and such provision, to the extent that the
rights and mutual obligations of the parties hereto are not materially adversely
affected, shall be deemed to be severable therefrom.
14.Except as set forth in Paragraph 11, neither this Service Agreement nor
any rights or obligations hereunder shall be assignable by either ASISI or
KILICO without prior written consent of the other party thereto.
15.KILICO and ASISI agree to attempt to resolve any dispute that may arise
under the Service Agreement amicably between themselves. If such discussions
fail to result in an amicable settlement, then the parties shall arbitrate such
dispute in Shelton, Connecticut. Each party shall select on arbitrator from
among the business community familiar with the type of business conducted by
ASISI and KILICO, and such two arbitrators shall select a third arbitrator. The
American Arbitration Association rules shall govern the procedures to be
followed. However, arbitration shall not be under the auspices of the American
Arbitration Association.
16.This Service Agreement shall be construed in accordance with, and its
performance shall be governed by, the laws of the State of Connecticut.
17.This Service Agreement may be amended or modified in whole or in part
only by a written Service Agreement executed by both parties.
IN WITNESS WHEREOF, the parties to this Service Agreement have caused this
Service Agreement to be executed by their authorized officers as of the day and
year first above written.
XXXXXX INVESTORS LIFE INSURANCE COMPANY
By:___________________________________________
Authorized Signature
Print Name:__________________________________
Print Title:__________________________________
AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
BY:______________________________________
Authorized Signature
Print Name:______________________________
Print Title:_______________________________
APPENDIX A
Portfolio Servicing Fee Schedule
The breakpoints listed below are determined by the total value of portfolio
shares of the Fund owned by KILICO. The annual fee is listed as a percentage of
that value, and is calculated in accordance with Paragraph 4 of the Service
Agreement. Each annual fee, as listed below, is paid only on those assets which
exceed the indicated breakpoint,
Breakpoint (Millions) Annual Fee
--------------------- ----------
$0 - $49.9 0.00%
$50.0 - $99.9 0.10%
$100.0 - $499.99 0.15%
$500.0 - + 0.20%
SCHEDULE A
Investment Options Fund Portfolios
Founders Capital Appreciation Portfolio Founders Capital Appreciation Portfolio
Xxxxxx Capital Growth Portfolio Xxxxxx Capital Growth Portfolio
JanCap Growth Portfolio JanCap Growth Portfolio
Lord Xxxxxx Growth and Income Portfolio Lord Xxxxxx Growth and Income Portfolio
INVESCO Equity Income Portfolio INVESCO Equity Income Portfolio
X. Xxxx Price International Equity Portfolio X. Xxxx Price International Equity Portfolio
X. Xxxx Price Asset Allocation Portfolio X. Xxxx Price Asset Allocation Portfolio
PIMCO Limited Maturity Bond Portfolio PIMCO Limited Maturity Bond Portfolio
PIMCO Total Return Bond Portfolio PIMCO Total Return Bond Portfolio
