ADMINISTRATION AGREEMENT
American Skandia Advisor Funds, Inc. ("ASAF"), a Maryland Corporation
having its principal business office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and American Skandia Investment Services, Inc. ("ASISI"), a
Connecticut Corporation having its principal office and place of business at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 ASAF accounts on behalf of such plans to
purchase Class A shares of ASAF (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 Exhibit 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 Exhibit 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 ▇▇▇▇ ▇▇▇▇▇▇ 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 ▇▇▇▇ ▇▇▇▇▇▇ 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 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 employee benefit plan the third-party
administrator for which has entered into a sub-administration agreement with
ASISI providing for the maintenance of omnibus accounts for such employee
benefit plan in an amount equal to the lesser of (a) 0.05% of the assets of such
plan invested in the Company as of the last day of the preceding calendar
quarter, or (b) the amount that the third-party administrator charges the plan
for its services for the quarter. In no event shall ASISI receive any
compensation under this Agreement that is not paid to third-party administrators
or for other out-of-pocket expenses under Section 3.1.
