ASSIGNMENT AND MODIFICATION AGREEMENT
This Agreement is made by and between Xxxxxxxxx & Xxxxxx Advisers Management
Trust ("Trust"), a Massachusetts business trust, Xxxxxxxxx & Xxxxxx Management
Incorporated ("N&B Management"), a New York corporation, Xxxxxxxxx & Xxxxxx
Advisers Management Trust ("Successor Trust"), a Delaware business trust,
Advisers Managers Trust ("Managers Trust") and American Skandia Life Assurance
Corporation ("Life Company"), a life insurance company organized under the laws
of the State of Connecticut.
WHEREAS, the Life Company has previously entered into a Sales Agreement dated
September 20, 1988 (the "Sales Agreement") with the Trust regarding the purchase
of shares of the Trust by Life Company; and
WHEREAS, as part of the reorganization into a "master-feeder" fund structure
(the "Reorganization"), the Trust will be converted into the Successor Trust, a
Delaware business trust; and
WHEREAS, as part of the Reorganization, each Portfolio of the Trust will
transfer all of its assets to the corresponding Portfolio of the Successor Trust
("Successor Portfolio") and each Successor Portfolio will invest all of its net
investable assets in a corresponding series of Managers Trust; and
WHEREAS, as part of the Reorganization, an Order under Section 6(c) of the
Investment Company Act of 1940 (" '40 Act") is expected to be issued by the
Securities and Exchange Commission ("SEC") granting exemptions from Sections
9(a), 13(a), 15(a) and 15(b) of the '40 Act and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder; and
WHEREAS, the Order is expected to require that certain conditions (the
"Conditions") as set forth in the Notice (Investment Company Act Release No.
21003 (April 12, 1995)) be made a part of the Sales Agreement; and
WHEREAS, the parties hereto desire to assign the Sales Agreement from the Trust
to the Successor Trust, to modify the Sales Agreement to include the Conditions
and Indemnification and to rename the Sales Agreement; and
WHEREAS, N&B Management and Managers Trust will become parties to the Sales
Agreement as modified hereby, due to and for purposes of their obligations under
the Conditions and N&B Management's obligations under the Indemnification
provision.
NOW THEREFORE, in consideration of their mutual promises, Trust, N&B Management,
Successor Trust, Managers Trust and Life Company agree as follows:
1. The Sales Agreement is hereby assigned by the Trust to the Successor
Trust.
2. Pursuant to such assignment, the Successor Trust hereby accepts all rights
and benefits of the Trust under the Sales Agreement and agrees to perform all
duties and obligations of the Trust under the Sales Agreement. Upon the
effectiveness of this Assignment and Modification Agreement, the Trust will be
released from all obligations and duties under the Sales Agreement.
3. The Sales Agreement is hereby modified to include the Conditions as
follows:
Sections 7 and 8 of the Sales Agreement are replaced by the following:
7. a) The Board of Trustees of each of the Successor Trust and Managers Trust
(the "Boards") will monitor the Successor Trust and Managers Trust,
respectively, (collectively the "Funds") for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
insurance company separate accounts investing in the Funds. A material
irreconcilable conflict may arise for a variety of reasons, including: (a) state
insurance regulatory authority action; (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 the Funds are
being managed; (e) a difference in voting instructions given by variable annuity
and variable life insurance contract owners or by contract owners of different
participating insurance companies; or (f) a decision by a participating
insurance company to disregard voting instructions of contract owners.
b) Life Company, will report any potential or existing conflicts to the
Boards. Life Company will be responsible for assisting the appropriate Board in
carrying out its responsibilities under the Conditions set forth in the notice
issued by the SEC for the Funds on April 12, 1995 (the "Notice") by providing
the Board with all information reasonably necessary for it to consider any
issues raised. This responsibility includes, but is not limited to, an
obligation by Life Company to inform the Board whenever variable contract owner
voting instructions are disregarded by Life Company. These responsibilities will
be carried out with a view only to the interests of the contract owners.
c) If a majority of the Board or a Fund or a majority of its
disinterested trustees or directors, determines that a material irreconcilable
conflict exists, affecting the Life Company, Life Company, at its expense and to
the extent reasonably practicable (as determined by a majority of disinterested
trustees or directors), will take any steps necessary to remedy or eliminate the
irreconcilable material conflict, including: (a) withdrawing the assets
allocable to some or all of the separate accounts from the Funds or any series
thereof and reinvesting those assets in a different investment medium, which may
include another series of the Successor Trust or Managers Trust, or another
investment company or submitting the question as to whether such segregation
should be implemented to a vote of all affected variable contract owners and, as
appropriate, segregating the assets of any appropriate group (i.e., variable
annuity or variable life contract owners of one or more Participants) that votes
in favor of such segregation, or offering to the affected variable contract
owners the option of making such a change; and (b) establishing a new registered
management investment company or managed separate account. If a material
irreconcilable conflict arises because of Life Company's decision to disregard
contract owner voting instructions, and that decision represents a minority
position or would preclude a majority vote, the Life Company may be required, at
the election of the relevant Fund, to withdraw its separate account's investment
in such Fund, and no charge or penalty will be imposed as a result of such
withdrawal. The responsibility to take such remedial action shall be carried out
with a view only to the interests of the contract owners.
For the purposes of this Section (c), a majority of the disinterested members of
the applicable Board shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the relevant Fund or N&B Management (or any other investment adviser of the
Funds) be required to establish a new funding medium for any variable contract.
Further, Life Company shall not be required by this Subsection (c) to establish
a new funding medium for any variable contract if any offer to do so has been
declined by a vote of a majority of contract owners materially affected by the
irreconcilable material conflict.
d) Any Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to all Participants.
8. a) Life Company will provide pass-through voting privileges to all contract
owners so long as the SEC continues to interpret the '40 Act as requiring
pass-through voting privileges for variable contract owners. This condition will
apply to UIT-separate accounts investing in the Successor Trust and to managed
separate accounts investing in Managers Trust to the extent a vote is required
with respect to matters relating to Managers Trust. Accordingly, Life Company,
where applicable, will vote shares of a Fund held in its separate accounts in a
manner consistent with voting instructions timely received from its variable
contract owners. Life Company will be responsible for assuring that each of its
separate accounts that participates in the Funds calculates voting privileges in
a manner consistent with other Participants as defined in the Conditions set
forth in the Notice. The obligation to calculate voting privileges in a manner
consistent with all other separate accounts investing in the Funds will be a
contractual obligation of all Participants under the agreements governing
participation in the Funds. Each Participant will vote shares for which it has
not received timely voting instructions, as well as shares it owns, in the same
proportion as its votes those shares for which it has received voting
instructions.
b) If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the '40 Act
or the rules thereunder with respect to mixed and shared funding on terms and
conditions materially different from any exemptions granted in the Order, then
the Successor Trust, Managers Trust and/or the Participants, as appropriate,
shall take such steps as may be necessary to comply with Rule 6e-2 and Rule
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such Rules are
applicable.
c) No less than annually, the Participants shall submit to the Boards
such reports, materials or data as such Boards may reasonably request so that
the Boards may fully carry out the obligations imposed upon them by these
Conditions. Such reports, materials, and data shall be submitted more frequently
if deemed appropriate by the applicable Boards.
4. The Sales Agreement is hereby modified to include Indemnification as
follows:
13. (a) Except as limited by and in accordance with the provisions of
Sections 13 (b) and 13 (c) hereof, N&B MANAGEMENT agrees to indemnify and hold
harmless LIFE COMPANY and each of its directors and officers and each person, if
any, who controls LIFE COMPANY within the meaning of Section 15 of the '33 Act
(collectively, the "Indemnified Parties") against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of N&B MANAGEMENT) or litigation (including legal and other expenses) to
which the Indemnified Parties may become subject under any statute, or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of TRUST's shares or the variable contracts
and arise as a result of a failure by Trust to comply with the diversification
requirements of Section 817(h) of the Code.
(b) N&B MANAGEMENT shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
LIFE COMPANY.
(c) N&B MANAGEMENT shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified party unless
such Indemnified Party shall have notified N&B MANAGEMENT in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify N&B MANAGEMENT of
any such claim shall not relieve N&B MANAGEMENT from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, N&B MANAGEMENT shall be entitled to participate
at its own expense in the defense thereof. N&B MANAGEMENT also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party named in
the action. After notice from N&B MANAGEMENT to such party of N&B MANAGEMENT'S
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and N&B MANAGEMENT
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
5. The Sales Agreement shall be renamed Fund Participation Agreement.
6. This Assignment and Modification Agreement shall be effective on May 1, 1995,
the closing date of the conversion. In the event of a conflict between the terms
of this Assignment and Modification Agreement and the terms of the Sales
Agreement, the terms of this Assignment and Modification Agreement shall
control.
7. All other terms and conditions of the Sales Agreement remain in full
force and effect.
Executed this 1st day of May, 1995.
Xxxxxxxxx & Xxxxxx Advisers
Management Trust
(a Massachusetts business trust)
Attest: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx, Chairman
Xxxxxxxxx & Xxxxxx Advisers
Management Trust
(a Delaware business trust)
Attest: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx, Chairman
Advisers Managers Trust
Attest: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx, Chairman
Xxxxxxxxx & Xxxxxx Management
Incorporated
Attest: /s/ Xxxxx Xxxxxxx By: /s/ Xxxx Xxxxxx
American Skandia Life Assurance
Corporation
Attest: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxxx
