TRANSFER AGENCY AND SERVICE AGREEMENT
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AGREEMENT made as of the day of ____, 2001, by and between AMERICAN SKANDIA ADVISOR FUNDS, INC., a Maryland
Corporation, having its principal office and place of business at Xxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000 (the
"Fund"), and AMERICAN SKANDIA FUND SERVICES, INC., a Delaware Corporation, having its principal office and place of
business at Xxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000 ("ASFS").
WHEREAS, the Fund is an open-end management investment company registered under the Investment Company Act of 1940 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 such series, together with all other series subsequently established by the Fund and
made subject to this Agreement in accordance with Article 10, being herein referred to as a "Portfolio", and collectively
as the "Portfolios"); and
WHEREAS, ASFS is registered as a transfer agent under the Securities Exchange Act of 1934; and
WHEREAS, the Fund desires to appoint ASFS as its transfer agent, dividend disbursing agent, custodian of certain
retirement plans and agent in connection with certain other activities and ASFS desires to accept such appointment; and
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
l. Terms of Appointment; Duties of ASFS
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1.1 Subject to the terms and conditions set forth in this Agreement, the Fund, on behalf of the Portfolios, hereby
employs and appoints the ASFS to act as, and ASFS agrees to act as, its transfer agent for the Fund's
authorized and issued shares of its common stock, $.001 par value, ("Shares"), dividend disbursing agent in
respect of the Shares, custodian of certain retirement plans and agent in connection with any accumulation,
open-acount or similar plans provided to shareholders of each of the respective Portfolios of the Fund
("Shareholders") and set out in the currently effective prospectus and statement of additional information
("prospectus") of the Fund on behalf of the applicable Portfolio, including without limitation any periodic
investment plan or periodic withdrawal program.
1.2 Subject to the terms and conditions set forth in this Agreement, the Fund, on behalf of the Portfolios, hereby
authorizes ASFS to subcontract for the performance of its obligations and duties hereunder in whole or in part.
1.3 ASFS agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by agreement between the Fund on behalf of
each of the Portfolios, as applicable, and ASFS, ASFS shall:
(i) receive for acceptance, orders for the purchase of Shares, and promptly deliver payment and
appropriate documentation thereof to the Custodian of the Fund authorized pursuant to the
Articles of Incorporation of the Fund (the "Custodian");
(ii) pursuant to purchase orders, issue the appropriate number of Shares and hold such Shares in
the appropriate Shareholder account;
(iii) Receive for acceptance redemption requests and redemption directions and deliver the
appropriate documentation thereof to the Custodian;
(iv) In respect to the transactions in items (i), (ii) and (iii) above ASFS shall execute
transactions directly with broker-dealers authorized by the Fund;
(v) At the appropriate time as and when it receives monies paid to it by the Custodian with
respect to any redemption, pay over or cause to be paid over in the appropriate manner such
monies as instructed by the redeeming Shareholders;
(vi) Effect transfers of Shares by the registered owners thereof upon receipt of appropriate
instructions;
(vii) Effect conversions of Shares in accordance with the Articles of Incorporation and prospectus
of the Fund
(viii) Prepare and transmit payments for dividends and distributions declared by the Fund on behalf
of the applicable Portfolio:
(ix) Issue replacement certificates for those certificates alleged to have been lost, stolen or
destroyed upon receipt by ASFS of indemnification satisfactory to ASFS and protecting ASFS
and the Fund, and ASFS at its option, may issues replacement certificates in place of
mutilated stock certificates upon presentation thereof and without such indemnity;
(x) Maintain records of account for and advise the Fund and its Shareholders as to the foregoing;
and
(xi) Record the issuance of shares of the Fund and maintain pursuant to SEC Rule 17Ad-10(e) a record of the total
number of shares of the Fund which are authorized, based upon data provided to it by the
Fund, and issued and outstanding. ASFS shall also provide the Fund on a regular basis with
the total number of shares which are authorized and issued and outstanding and shall have no
obligation, when recording the issuance of shares, to monitor the issuance of such shares or
to take cognizance of any laws relating to the issue or sale of such shares, which shall be
the sole repsonibility of the Fund.
(b) In addition to and neither in lieu nor in contravention of the services set forth in the above paragraph
(a), ASFS shall: (i) perform the customary services of a transfer agent, dividend disbursing agent,
custodian of certain retirement plans and as relevant, agent in connection with accumulation,
open-account or similar plans (including without limitation any periodic investment plan or periodic
withdrawal program), including but not limited to: maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing Shareholder reports and prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts, preparing and filing U.S. Treasury
Department Forms 1099 and other appropriate forms required with respect to dividends and distributions by
federal authroities for all Sahreholders, preparing and mailing confirmation forms and statements of
account to Shareholders for all purchases and redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements for Shareholders, and providing
Shareholder account information and (ii) provide a system which will enable the Fund to monitor the
total number of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to ASFS in writing those confirmations and assets to be treated
as exempt from blue sky reporting for each State and (ii) verify the establishment of transactions for
each State on the system prior to activation and thereafter monitor the daily activity for each State.
The responsibility of ASFS for the Fund's blue sky State registration status is solely limited to the
initial establishment of transactions subject to blue sky compliance by the Fund and the reporting of
such transactions to the Fund as provided above.
(d) Procedures as to who shall provide certain of these services in Section 1 may be established from time to time by
agreement between the Fund on behalf of each Portfolio and ASFS. ASFS may at times perform only a
portion of these services and the Fund or its agent may perform these services on the Fund's behalf.
(e) ASFS shall provide additional services on behalf of the Fund which may be agreed upon in writing from
time to time between the Fund and ASFS.
2. Fees and Expenses
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2.1 For the performance by ASFS pursuant to this Agreement, the Fund agrees on behalf of each of the Portfolios to
pay ASFS such fees as set out in the initial fee schedule attached hereto. Such fees and out-of-pocket
expenses and advances identified under Section 2.2 below may be changed from time to time subject to mutual
written agreement between the Fund and ASFS.
2.2 In addition to the fee paid under Section 2.1 above, the Fund agrees on behalf of each of the Portfolios to
reimburse ASFS for out-of-pocket expenses, including but not limited to postage, telephone, microfilm,
microfiche, records storage, or advances incurred by ASFS for the items set out in the fee schedule attached
hereto. In addition, any other expenses incurred by ASFS at the request or with the written consent of the
Fund, will be reimbursed by the Fund on behalf of the applicable Portfolio.
3. Representations and Warranties of ASFS
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ASFS represents and warrants to the Fund that:
3.1 It is a corporation duly organized and existing and in good standing under the laws of the State of Delaware.
3.2 It is duly qualified to carry on its business in all jurisdictions in which such qualification is required.
3.3 It is empowered under applicable laws and by its Charter and By-Laws to enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities, equipment and personnel to perform its
duties and obligations under this Agreement.
4. Representations and Warranties of the Fund
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The Fund represents and warrants to ASFS that:
4.1 It is a corporation duly organized and existing and in good standing under the laws of the State of Maryland
4.2 It is empowered under applicable laws and by its Articles of Incorporation and By-Laws to enter into and
perform this Agreement.
4.3 All corporate proceedings required by said Articles of Incorporation and By-Laws have been taken to authorize
it to enter into and perform this Agreement.
4.4 It is an open-end management investment company registered under the Investment Company Act of 1940, as amended.
4.5 A registration statement under the Securities Act of 1933, as amended on behalf of each of the Portfolios is
currently effective and will remain effective, and appropriate state securities law filings have been made and
will continue to be made, with respect to all Shares of the Fund being offered for sale.
5. Wire Transfer Operating Guidelines/Articles 4A of the Uniform Commercial Code
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5.1 ASFS is authorized to promptly debit the appropriate Fund account(s) upon the receipt of a payment order in
compliance with the selected security procedure (the "Security Procedure") chosen for funds transfer and in
the amount of money that ASFS has been instructed to transfer. ASFS shall execute payment orders in compliance
with the Security Procedure and with the Fund instructions on the execution date provided that such payment
order is received by the customary deadline for processing such a request, unless the payment order specifies
a later time. All payment orders and communications received after this the customary deadline will be deemed
to have been received the next business day.
5.2 The Fund acknowledges that the Security Procedure it has designated on the Fund Selection Form was selected by
the Fund from security procedures offered by ASFS. The Fund shall restrict access to confidential information
relating to the Security Procedure to authorized persons as communicated to ASFS in writing. The Fund must
notify ASFS immediately if it has reason to believe unauthorized persons may have obtained access to such
information or of any change in the Fund's authorized personnel. ASFS shall verify the authenticity of all
Fund instructions according to the Security Procedure.
5.3 ASFS shall process all payment orders on the basis of the account number contained in the payment order. In
the event of a discrepancy between any name indicated on the payment order and the account number, the account
number shall take precedence and govern.
5.4 ASFS reserves the right to decline to process or delay the processing of a payment order which (a) is in excess
of the collected balance in the account to be charged at the time of the ASFS' receipt of such payment order;
(b) if initiating such payment order would cause ASFS, in ASFS' sole judgement, to exceed any volume,
aggregate dollar, network, time, credit or similar limits which are applicable to ASFS; or (c) if ASFS, in
good faith, is unable to satisfy itself that the transaction has been properly authorized.
5.5 ASFS shall use reasonable efforts to act on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are received in a timely manner affording
ASFS reasonable opportunity to act. However, ASFS assumes no liability if the request for amendment or
cancellation cannot be satisfied.
5.6 ASFS shall assume no responsibility for failure to detect any erroneous payment order provided that ASFS
complies with the payment order instructions as received and ASFS complies with the Security Procedure. The
Security Procedure is established for the purpose of authenticating payment orders only and not for the
detection of errors in payment orders.
5.7 ASFS shall assume no responsibility for lost interest with respect to the refundable amount of any
unauthorized payment order, unless ASFS is notified of the unauthorized payment order within thirty (30) days
or notification by ASFS of the acceptance of such payment order. In no event (including failure to execute a
payment order) shall ASFS be liable for special, indirect or consequential damages, even if advised of the
possibility of such damages.
5.8 When the Fund initiates or receives Automated Clearing House credit and debit entries pursuant to these
guidelines and the rules of the National Automated Clearing House Association and the New England Clearing
House Association, ASFS will act as an Originating Depository Financial Institution and/or receiving
depository Financial Institution, as the case may be, with respect to such entries. Credits given by ASFS
with respect to an ACH credit entry are provisional until ASFS receives final settlement for such entry from
the Federal Reserve Bank. If ASFS does not receive such final settlement, the Fund agrees that ASFS shall
receive a refund of the amount credited to the Fund in connection with such entry, and the party making
payment to the Fund via such entry shall not be deemed to have paid the amount of the entry.
5.9 Confirmation of ASFS' execution of payment orders shall ordinarily be provided within twenty four (24) hours
notice of which may be delivered through ASFS' proprietary information systems, or by facsimile or call-back.
Fund must report any objections to the execution of an order within thirty (30) days.
6. Data Access and Proprietary Information
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6.1 The Fund acknowledges and ASFS hereby represents that the data bases, computer programs, screen formats, report
formats, interactive design techniques, and documentation manuals furnished to the Fund by ASFS or its agents
as part of the Fund's ability to access certain Fund-related data ("Customer Data") maintained by ASFS on data
bases under the control and ownership of ASFS or other third party ("Data Access Services") constitute
copyrighted, trade secret, or other proprietary information (collectively, "Proprietary Information") of
substantial value to ASFS or other third party. In no event shall Proprietary Information be deemed Customer
Data. The Fund agrees to treat all Proprietary Information as proprietary to ASFS and further agrees that it
shall not voluntarily divulge any Proprietary Information to any person or organization except as may be
provided hereunder or as may be required by law. Without limiting the foregoing, the Fund agrees for itself
and its employees and agents:
(a) to access Customer Data solely from locations as may be designated in writing by ASFS and solely in accordance
with the ASFS' applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary Information;
(c) to refrain from obtaining unauthorized access to any portion of the Proprietary Information, and if
such access is inadvertently obtained, to inform in a timely manner of such fact and dispose of such
information in accordance with the ASFS' instructions;
(d) to refrain from causing or allowing the data acquired hereunder from being retransmitted to any other
computer facility or other location, except with the prior written consent of ASFS;
(e) that the Fund shall have access only to those authorized transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by ASFS to protect at ASFS' expense the rights of ASFS
or its agents in Proprietary Information at common law, under federal copyright law and under other
federal or state law.
Each party shall take reasonable efforts to advise its employees of their obligations pursuant to this Section 6. The
obligations of this Section shall survive any earlier termination of this Agreement.
6.2 If the Fund notifies ASFS that any of the Data Access Services do not operate in material compliance with the
most recently issued user documentation for such services, ASFS shall endeavor in a timely manner to correct
such failure. Organizations from which ASFS may obtain certain data included in the Data Access Services are
solely responsible for the contents of such data and the Fund agrees to make no claim against ASFS arising out
of the contents of such third-party data, including, but not limited to, the accuracy thereof. DATA ACCESS
SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN
AS IS, AS AVAILABLE BASIS. ASFS EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6.3 If the transactions available to the Fund include the ability to originate electronic instructions to ASFS in
order to (i) effect the transfer or movement of cash or Shares or (ii) transmit Shareholder information or
other information, then in such event ASFS shall be entitled to rely on the validity and authenticity of such
instruction without undertaking any further inquiry as long as such instruction is undertaken in conformity
with security procedures established by ASFS from time to time.
7. Indemnification
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7.1 ASFS shall not be responsible for, and the Fund shall on behalf of the applicable Portfolio indemnify and hold
ASFS harmless from and against, any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to:
(a) All actions of ASFS or its agents or subcontractors required to be taken pursuant to this Agreement,
provided that such actions are taken in good faith and without negligence or willful misconduct.
(b) Any breach of any representation or warranty of the Fund hereunder involving lack of good faith,
negligence or willful misconduct by the Fund or its agents other than ASFS.
(c) The reliance on or use by ASFS or its agents or subcontractors of information, records, documents or
services which (i) are received by ASFS or its agents or subcontractors, and (ii) have been prepared,
maintained or performed by the Fund or any other person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by ASFS or its agents or subcontractors of any instructions or
requests of the Fund on behalf of the applicable Portfolio.
(e) The offer or sale of Shares in violation of any requirement under the federal securities laws or
regulations or the securities laws or regulations of any state that such Shares be registered in such
state or in violation of any stop order or other determination or ruling by any federal agency or any
state with respect to the offer or sale of such Shares in such state.
7.2 At any time ASFS may apply to any officer of the Fund for instructions, and may consult with legal counsel with
respect to any matter arising in connection with the services to be performed by ASFS under this Agreement, and
ASFS and its agents or subcontractors shall not be liable and shall be indemnified by the Fund on behalf of the
applicable Portfolio for any action taken or omitted by it in reliance upon such instructions or upon the opinion
of such counsel. ASFS, its agents and subcontractors shall be protected and indemnified in acting upon any paper
or document, reasonably believed to be genuine and to have been signed by the proper person or persons, or upon
any instruction, information, data, records or documents, reasonably believed to be genuine, provided to ASFS or
its agents or subcontractors by machine readable input, telex, CRT data entry or other similar means authorized
by the Fund, and shall not be held to have notice of any change of authority of any person, until receipt of
written notice thereof from the Fund.
7.3 In order that the indemnification provisions contained in this Section 7 shall apply, upon the assertion of a
claim for which the Fund may be required to indemnify ASFS, ASFS shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all developments concerning such claim. The Fund
shall have the option to participate with ASFS in the defense of such claim or to defend against said claim in
its own name or in the name of ASFS. ASFS shall in no case confess any claim or make any compromise in any
case in which the Fund may be required to indemnify ASFS except with the Fund's prior written consent.
8. Standard of Care
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8.1 ASFS shall at all times act in good faith and agrees to use its best efforts within reasonable limits to insure
the accuracy of all services performed under this Agreement, but shall be liable for loss or damage due to
errors only if said errors are caused by its negligence, bad faith, or willful misconduct or that of its
employees and otherwise shall not be held responsible or liable.
8.2 If the Fund suffers a loss for which ASFS is liable under section 8.1 hereunder ASFS's obligation to the Fund
shall include the Fund's counsel fees and expenses directly arising out of or attributable to such liability.
9. Covenants of the Fund and ASFS
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9.1 The Fund shall on behalf of each of the Portfolios promptly furnish to ASFS the following:
(a) A certified copy of the resolution of the Board of Directors of the Fund authorizing the appointment
of ASFS and the execution and delivery of this Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the Fund and all amendments thereto.
9.2 ASFS shall keep records relating to the services to be performed hereunder, in the form and manner as it may
deem advisable. To the extent required by Section 31 of the Investment Company Act of 1940, as amended, and
the Rules thereunder, ASFS agrees that all such records prepared or maintained by ASFS relating to the services
to be performed by ASFS hereunder are the property of the Fund and will be preserved, maintained and made
available in accordance with such Section and Rules, and will be surrendered promptly to the Fund on and in
accordance with its request.
9.3 The Bank and the Fund agree that all books, records, information and data pertaining to the business of the
other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement
shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be
required by law.
9.4 In case of any requests or demands for the inspection of the Shareholder records of the Fund, ASFS will use its
best efforts to notify the Fund and to secure instructions from an authorized officer of the Fund as to such
inspection. ASFS reserves the right, however, to exhibit the Shareholder records to any person whenever it is
advised by its counsel that it may be held liable for the failure to exhibit the Shareholder records to such
person.
10. Termination of Agreement
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10.1 This Agreement may be terminated by either party upon one hundred twenty (120) days written notice to the other.
10.2 Should the Fund exercise its right to terminate, all out-of-pocket expenses associated with the movement of
records and material will be borne by the Fund on behalf of the applicable Portfolio(s). Additionally, ASFS
reserves the right to charge for any other reasonable expenses associated with such termination.
11. Additional Funds
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In the event that the Fund establishes one or more series of Shares in addition to the Portfolios with respect
to which it desires to have ASFS render services as transfer agent under the terms hereof, it shall so notify
ASFS in writing at least forty-five (45) days prior to the anticipated effective date of the new series, and
unless ASFS responds in writing within thirty (30) days of such anticipated effective date that it does not
wish to provide such services, such series of Shares shall become a Portfolio hereunder.
12. Assignment
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12.1 Neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
12.2 This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted
successors and assigns.
13. Amendment
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This Agreement may be amended or modified by a written agreement executed by both parties and authorized or
approved by a resolution of the Board of Directors of the Fund.
14. Connecticut Law to Apply
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This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws
of the State of Connecticut.
15. Force Majeure
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In the event either party is unable to perform its obligations under the terms of this Agreement because of
acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other
causes reasonably beyond its control, such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes.
16. Consequential Damages
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Neither party to this Agreement shall be liable to the other party for consequential damages under any
provision of this Agreement or for any consequential damages arising out of any act or failure to act hereunder.
17. Merger of Agreement
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This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement
with respect to the subject matter hereof whether oral or written.
18. Counterparts
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This Agreement may be executed by the parties hereto on any number of counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same instrument.
19. Reproduction of Documents
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This Agreement and all schedules, exhibits, attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The
parties hereto each agree that any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or
further reproduction shall likewise be admissible in evidence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by
and through their duly authorized officers, as of the day and year first above written.
AMERICAN SKANDIA ADVISOR FUNDS, INC.
BY:
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ATTEST:
AMERICAN SKANDIA FUND SERVICES, INC.
BY:
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ATTEST:
American Skandia Advisor Funds/American Skandia Fund Services
Shareholder Servicing Agreement
Initial Fee Schedule
New Account Set-up $5.00/each
Manual Transactions $1.50/each
Telephone Calls $2.50/each
Correspondence $1.50/each
