AMERICAN SKANDIA ADVISOR FUNDS, INC.
SUB-ADVISORY AGREEMENT
----------------------
THIS AGREEMENT is between American Skandia Investment Services, Incorporated Prudential Investments LLC (the "Investment Manager")
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, L.P. (the "Sub-Adviser").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, American Skandia Advisor Funds, Inc. (the "Company") is a Maryland corporation organized with one or more series of
shares and is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the
"ICA"); and
WHEREAS, the Investment Manager and the Sub-Adviser each is an investment adviser registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"); and
WHEREAS, the Board of Directors of the Company (the "Directors") have engaged the Investment Manager to act as investment manager
for the ▇▇▇▇ ▇▇▇▇▇▇▇ Sachs Mid-Cap Growth Fund (the "Fund"), one series of the Company, under the terms of a management agreement,
dated May 1, 2003 with the Company (the "Management Agreement"); and
WHEREAS, the Investment Manager, acting pursuant to the Management Agreement, wishes to engage the Sub-Adviser, and the Directors
have approved the engagement of the Sub-Adviser, to provide investment advice and other investment services set forth below.
NOW, THEREFORE, the Investment Manager and the Sub-Adviser agree as follows:
1. Investment Services. The Sub-Adviser will formulate and implement a continuous and prudent investment program for the
--------------------
Fund conforming to the investment objective, investment policies and restrictions of the Fund as set forth in the Prospectus and
Statement of Additional Information of the Company as in effect from time to time (together, the "Registration Statement"), the
Articles of Incorporation and By-laws of the Company, any investment guidelines and procedures adopted by the Directors, or other
instructions received by the Sub-Adviser in writing from the Investment Manager from time to time. Any amendments to the
foregoing documents will not be deemed effective with respect to the Sub-Adviser until the Sub-Adviser's receipt thereof. The
appropriate officers and employees of the Sub-Adviser will be available to consult with the Investment Manager, the Company and
Directors at reasonable times and upon reasonable notice concerning the business of the Company, including valuations of
securities which are not registered for public sale, not traded on any securities market or otherwise may be deemed illiquid for
purposes of the ICA; provided it is understood that the Sub-Adviser is not responsible for daily pricing of the Fund's assets.
--------
Subject to the supervision and control of the Investment Manager, which in turn is subject to the supervision and control
of the Directors, the Sub-Adviser will in its discretion subject to its fiduciary obligation determine which issuers and
securities will be purchased, held, sold or exchanged by the Fund or otherwise represented in the Fund's investment portfolio from
time to time and, subject to the provisions of paragraph 3 of this Agreement, place orders with and give instructions to brokers,
dealers and others for all such transactions and cause such transactions to be executed. At any time, upon request by the
Investment Manager, the Sub-Adviser will provide to the Investment Manager a complete list of the current holdings of the Fund.
The Sub-Adviser may delegate certain of its investment advisory and other responsibilities and duties hereunder to one or more
sub-sub-advisers; subject to: (i) the prior written approval of the Investment Manager, (ii) the execution of a written
------- --
sub-advisory agreement between the Sub-Adviser and its delegate, and (iii) the approval of such agreement by the Directors;
provided however that the Sub-Adviser may rely upon any of its advisory affiliates in connection with portfolio decisions and
management without the approvals described in this paragraph. Under the terms of such sub-advisory agreement, the Sub-Adviser
shall remain responsible for ensuring that the investment program of the Fund is maintained. Custody of the Fund will be
maintained by a custodian bank (the "Custodian") and the Investment Manager will authorize the Custodian to honor orders and
instructions by employees of the Sub-Adviser designated by the Sub-Adviser to settle transactions in respect of the Fund. No
assets may be withdrawn from the Fund other than for settlement of transactions on behalf of the Fund except upon the written
authorization of appropriate officers of the Company who shall have been certified as such by proper authorities of the Company
prior to the withdrawal.
The Sub-Adviser (or its designated agent) will be responsible for voting proxies solicited by or with respect to the
issuers of securities in which assets of the Fund may be invested. In voting such proxies for the Fund the Sub-Adviser shall do
so in a manner that is in the best interests of the Fund and that is consistent with the Sub-Adviser's own written proxy voting
guidelines or policies.
In addition, upon reasonable request from the Investment Manager the Sub-Adviser (through a qualified person) will
consult with the pricing committee of the Investment Manager or the Company in valuing securities of the Fund as may be required
from time to time, including upon request of the Investment Manager making available information of which the Sub-Adviser has
knowledge related to the securities being valued.
The Sub-Adviser will not be responsible for the provision of administrative, bookkeeping or accounting services to the
Fund except as specifically provided herein, as required by the ICA or the Advisers Act or as may be necessary for the Sub-Adviser
to supply to the Investment Manager, the Fund or the Fund's shareholders the information required to be provided by the
Sub-Adviser hereunder. Any records maintained hereunder shall be the property of the Fund and surrendered promptly upon request.
In furnishing the services under this Agreement, the Sub-Adviser will comply with and use its best efforts to enable the
Fund to conform to the requirements of: (i) the ICA and the regulations promulgated thereunder; (ii) Subchapter M , to the extent
applicable, (including Sections 851 (b)(1), (2) and (3)) of the Internal Revenue Code and the regulations promulgated thereunder;
(iii) other applicable provisions of state or federal securities law (iv) the Articles of Incorporation and By-laws of the
Company; (v) policies, procedures and determinations of the Company and the Investment Manager provided to the Sub-Adviser in
writing; provided that with respect to procedures governing transactions involving affiliates (such as those adopted pursuant to
ICA Rules 17a-7, 17e-1 and 10f-3), such procedures will identify any affiliate of the Investment Manager and the Company other
than affiliates of the Sub-Adviser; (vi) the fundamental and non-fundamental investment policies and restrictions applicable to
the Fund, as set out in the Registration Statement in effect, or as such investment policies and restrictions from time to time
may be amended by the Fund's shareholders or the Directors and communicated to the Sub-Adviser in writing; (vii) the Registration
Statement; and (viii) investment guidelines or other instructions received in writing from the Investment Manager including
procedures adopted by the Directors, or other instructions received in writing from the Investment Manager. In connection with
(ii) above, the Sub-Adviser shall notify the Investment Manager immediately if it has any reasonable belief of an impending
failure to comply with the diversification or qualification requirements the Sub-Adviser will take all necessary steps as directed
by the Investment Manager to adequately diversify the Fund within the period under applicable Treas. Reg. 1.817-5.
Notwithstanding the foregoing, the Sub-Adviser shall have no responsibility to monitor compliance with limitations or restrictions
for which information from the Investment Manager or its authorized agents is required to enable the Sub-Adviser to monitor
compliance with such limitations or restrictions unless such information is provided to the Sub-adviser in writing. The
Sub-Adviser shall supervise and monitor the activities of its representatives, personnel and agents in connection with the
investment program of the Fund.
Nothing in this Agreement shall be implied to prevent the Investment Manager from engaging other sub-advisers to provide
investment advice and other services to the Fund or to series or funds of the Company for which the Sub-Adviser does not provide
such services, or to prevent the Investment Manager from providing such services itself in relation to the Fund or such other
series or funds. The Sub-Advisor and the Investment Manager understand and agree that if the Investment Manager manages the Fund
in a "manager-of-managers" style, the Investment Manager will, among other things, (i) continually evaluate the performance of the
Sub-Advisor through quantitative and qualitative analysis and consultations with the Sub-Advisor, (ii) periodically make
recommendations to the Company's Board as to whether the contract with one or more sub-advisors should be renewed, modified or
terminated, and (iii) periodically report to the Company's Board regarding the results of its evaluation and monitoring
functions. The Sub-Advisor recognizes that its services may be terminated or modified pursuant to this process.
The Sub-Advisor acknowledges that the Investment Manager and the Company intend to rely on Rules 17a-10 and 10f-3 under
the ICA, and the Sub-Advisor hereby agrees that it shall not consult with any other Sub-Advisor to the Fund or the Company with
respect to transactions in securities for the Fund's portfolio or any other transactions of Fund assets. The Sub-Advisor further
acknowledges that it shall not consult with any other sub-advisor of the Fund that is a principal underwriter or an affiliated
person of a principal underwriter with respect to transactions in securities for the Fund's portfolio or any other transactions of
Fund assets, and that its investment advisory responsibilities as set forth in this Agreement are limited to such discrete portion
of the Fund's portfolio as determined by the Investment Manager.
The Sub-Adviser shall be responsible for the preparation and filing of Schedules 13D and 13G, and Form 13F reflecting the
Fund's securities holdings, as well as preparing and filing with any non-U.S. jurisdiction any such similar information required
to be filed by the Fund reflecting the Fund's securities holdings. The Sub-Adviser shall not be responsible for the preparation
or filing of any other reports required of the Fund by any governmental or regulatory agency, except as expressly agreed to in
writing.
2. Investment Advisory Facilities. The Sub-Adviser, at its expense, will furnish all necessary investment facilities,
--------------------------------
including salaries of personnel, required for it to execute its duties hereunder.
3. Execution of Portfolio Transactions. In connection with the investment and reinvestment of the assets of the Fund, the
------------------------------------
Sub-Adviser is responsible for the selection of broker-dealers to execute purchase and sale transactions for the Fund in
conformity with the policy regarding brokerage as set forth in the Registration Statement, or as the Directors may determine from
time to time, as well as the negotiation of brokerage commission rates with such executing broker-dealers. Generally, the
Sub-Adviser's primary consideration in placing Fund investment transactions with broker-dealers for execution will be to obtain,
and maintain the availability of, best execution at the best available price.
Consistent with this policy, the Sub-Adviser, in selecting broker-dealers and Futures Commission Merchants ("FCMs") and
negotiating brokerage commission rates, will take all relevant factors into consideration, including, but not limited to: the best
price available; the best method of execution available, including the overall cost of execution; the reliability, integrity and
financial condition of the broker-dealer or financial intermediary used; the size of and difficulty in executing the order; and
the value of the expected contribution of the broker-dealer to the investment performance of the Fund on a continuing basis.
Subject to such policies and procedures as the Directors may determine, the Sub-Adviser shall have discretion to effect investment
transactions for the Fund through broker-dealers and FCMs (including, to the extent permissible under applicable law,
broker-dealers affiliated with the Sub-Adviser) qualified to obtain best execution of such transactions who provide brokerage
and/or research services, as such services are defined in section 28(e) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and to cause the Fund to pay any such broker-dealers an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the
Sub-Adviser determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either that particular investment transaction or the
Sub-Adviser's overall responsibilities with respect to the Fund and other accounts as to which the Sub-Adviser exercises
investment discretion (as such term is defined in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
Sub-Adviser on behalf of the Fund to such broker-dealers as well as brokerage and/or research services shall be in such amounts
and proportions as the Sub-Adviser shall determine in good faith in conformity with its responsibilities under applicable laws,
rules and regulations. The Sub-Adviser will submit reports on such allocations, brokerage services, and research services to the
Investment Manager regularly as requested by the Investment Manager, in such form as may be mutually agreed to by the parties
hereto, indicating the broker-dealers or others to whom such allocations have been made and from whom such brokerage and/or
research has been received and the basis therefor.
Subject to the foregoing provisions of this paragraph 3, the Sub-Adviser may also consider sales of shares of the Fund,
or may consider or follow recommendations of the Investment Manager that take such sales into account, as factors in the selection
of broker-dealers to effect the Fund's investment transactions. Notwithstanding the above, nothing shall require the Sub-Adviser
to use a broker-dealer, which provides research services, or to use a particular broker-dealer that the Investment Manager has
recommended.
4. Reports by the Sub-Adviser. The Sub-Adviser shall furnish the Investment Manager monthly, quarterly and annual reports,
--------------------------
as may reasonably be requested by the Investment Manager concerning the transactions, performance, and compliance of the Fund so
that the Investment Manager may review and evaluate the management of the Fund. The Sub-Adviser shall permit the books and
records maintained with respect to the Fund to be inspected and audited by the Trust, the Investment Manager or their respective
agents at all reasonable times during normal business hours upon reasonable notice. The Sub-Adviser shall immediately notify both
the Investment Manager and the Company of any legal process served upon it in connection with its activities hereunder, including
any legal process served upon it on behalf of the Investment Manager, the Fund or the Company. The Sub-Adviser shall promptly
notify the Investment Manager of (1) any changes in any information regarding the Sub-Adviser or the investment program for the
Fund required to be disclosed in the Company's Registration Statement, or (2) any violation of any requirement, provision, policy
or restriction that the Sub-advisor is required to comply with under Section 1 of this Agreement.
5. Compensation of the Sub-Adviser. The amount of the compensation to the Sub-Adviser is computed at an annual rate. The
---------------------------------
fee shall be payable monthly in arrears, based on the average daily net assets of the Fund for each month, at the annual rate set
forth in Exhibit A to this Agreement.
In computing the fee to be paid to the Sub-Adviser, the net asset value of the Fund shall be valued as set forth in the
Registration Statement. If this Agreement is terminated, the payment described herein shall be prorated to the date of
termination.
The Investment Manager and the Sub-Adviser shall not be considered as partners or participants in a joint venture. The
Sub-Adviser will pay its own expenses for the services to be provided pursuant to this Agreement and will not be obligated to pay
any expenses of the Investment Manager, the Fund or the Company. Except as otherwise specifically provided herein, the Investment
Manager, the Fund and the Company will not be obligated to pay any expenses of the Sub-Adviser.
6. Delivery of Documents to the Sub-Adviser. The Investment Manager has furnished the Sub-Adviser with true, correct and
-----------------------------------------
complete copies of each of the following documents:
(a) The Articles of Incorporation of the Company, as in effect on the date hereof;
(b) The By-laws of the Company, as in effect on the date hereof;
(c) The resolutions of the Directors approving the engagement of the Sub-Adviser as portfolio manager of the Fund and
approving the form of this Agreement;
(d) The resolutions of the Directors selecting the Investment Manager as investment manager to the Fund and approving
the form of the Management Agreement;
(e) The Management Agreement;
(f) The Code of Ethics of the Company and of the Investment Manager, as in effect on the date hereof;
(g) A list of companies the securities of which are not to be bought or sold for the Fund ("Restricted Securities"); and
(h) Procedures adopted by the Directors ("Board Adopted Procedures").
The Investment Manager will furnish the Sub-Adviser from time to time with copies, properly certified or otherwise
authenticated, of all amendments of or supplements to the foregoing, if any. Such amendments or supplements as to items (a)
through (f) above will be provided within 30 days of the time such materials become available to the Investment Manager. Such
amendments or supplements as to item (g) and (h) above will be provided not later than the end of the business day next following
the date such amendments or supplements become known to the Investment Manager. Any amendments or supplements to the foregoing
will not be deemed effective with respect to the Sub-Adviser until the Sub-Adviser's receipt thereof. The Investment Manager will
provide such additional information as the Sub-Adviser may reasonably request in connection with the performance of its duties
hereunder.
7. Delivery of Documents to the Investment Manager. The Sub-Adviser has furnished the Investment Manager with true, correct
------------------------------------------------
and complete copies of each of the following documents:
(a) The Sub-Adviser's Form ADV as filed with the Securities and Exchange Commission as of the date hereof including
the Sub-Adviser's most recent Form ADV Part II;
(b) The Sub-Adviser's most recent audited balance sheet;
(c) Separate lists of persons who the Sub-Adviser wishes to have authorized to give written and/or oral instructions
to Custodians of Company assets for the Fund;
(d) The Code of Ethics of the Sub-Adviser, as in effect on the date hereof;
(e) The Sub-Adviser's proxy voting policy or guidelines
The Sub-Adviser will furnish the Investment Manager from time to time with copies, properly certified or otherwise
authenticated, of all amendments of or supplements to the foregoing, if any. Such amendments or supplements will be provided
within 30 days of the time such materials become available to the Sub-Adviser. Any amendments or supplements to the foregoing
will not be deemed effective with respect to the Investment Manager until the Investment Manager's receipt thereof. The
Sub-Adviser will provide additional information as the Investment Manager may reasonably request in connection with the
Sub-Adviser's performance of its duties under this Agreement.
8. Confidential Treatment. The parties hereto understand that any information or recommendation supplied by the Sub-Adviser
-----------------------
in connection with the performance of its obligations hereunder is to be regarded as confidential and for use only by the
Investment Manager, the Company or such persons the Investment Manager may designate in connection with the Fund. The parties
also understand that any information supplied to the Sub-Adviser in connection with the performance of its obligations hereunder,
particularly, but not limited to, any list of securities which may not be bought or sold for the Fund, is to be regarded as
confidential and for use only by the Sub-Adviser in connection with its obligation to provide investment advice and other services
to the Fund.
9. Representations of the Parties. Each party hereto hereby further represents and warrants to the other that: (i) it is
-------------------------------
registered as an investment adviser under the Advisers Act and is registered or licensed as an investment adviser under the laws
of all jurisdictions in which its activities require it to be so registered or licensed; (ii) it will use its reasonable best
efforts to maintain each such registration or license in effect at all times during the term of this Agreement; (iii) it will
promptly notify the other if it ceases to be so registered, if its registration is suspended for any reason, or if it is notified
by any regulatory organization or court of competent jurisdiction that it should show cause why its registration should not be
suspended or terminated; and (iv) it is duly authorized to enter into this Agreement and to perform its obligations hereunder.
The Sub-Adviser further represents and warrants to the Investment Manager that it believes to the best of its knowledge
the information provided in items (a) and (b) of paragraph 7 are in all material respects, complete and not misleading.
The Sub-Adviser further represents that it has adopted a written Code of Ethics in compliance with Rule 17j-1(C)of the
ICA. The Sub-Adviser shall be subject to such Code of Ethics and shall not be subject to any other Code of Ethics, including the
Investment Manager's Code of Ethics unless specifically adopted by the Sub -Adviser.
The Investment Manager further represents and warrants to the Sub-Adviser that (i) the appointment of the Sub-Adviser by
the Investment Manager has been duly authorized and (ii) it has acted and will continue to act in connection with the transactions
contemplated hereby, and the transactions contemplated hereby are, in conformity with the ICA, the Company's governing documents
and other applicable law.
10. Liability. In the absence of willful misfeasance, bad faith, negligence or disregard for its obligations hereunder, the
---------
Sub-Adviser shall not be liable to the Company, the Fund, the Fund's shareholders or the Investment Manager for any act or
omission resulting in any loss suffered by the Company, the Fund, the Fund's shareholders or the Investment Manager in connection
with any service to be provided herein. The Federal laws impose responsibilities under certain circumstances on persons who act
in good faith, and therefore, nothing herein shall in any way constitute a waiver or limitation of any rights which the Company,
the Fund or the Investment Manager may have under applicable law.
11. Other Activities of the Sub-Adviser. The Investment Manager agrees that the Sub-Adviser and any of its partners or
--------------------------------------
employees, and persons affiliated with the Sub-Adviser or with any such partner or employee, may render investment management or
advisory services to other investors and institutions, and that such investors and institutions may own, purchase or sell,
securities or other interests in property that are the same as, similar to, or different from those which are selected for
purchase, holding or sale for the Fund. The Investment Manager further acknowledges that the Sub-Adviser shall be in all respects
free to take action with respect to investments in securities or other interests in property that are the same as, similar to, or
different from those selected for purchase, holding or sale for the Fund. The Investment Manager understands that the Sub-Adviser
shall not favor or disfavor any of the Sub-Adviser's clients or class of clients in the allocation of investment opportunities, so
that to the extent practical, such opportunities will be allocated among the Sub-Adviser's clients over a period of time on a fair
and equitable basis. Nothing in this Agreement shall impose upon the Sub-Adviser any obligation (i) to purchase or sell, or
recommend for purchase or sale, for the Fund any security which the Sub-Adviser, its partners, affiliates or employees may
purchase or sell for the Sub-Adviser or such partner's, affiliate's or employee's own accounts or for the account of any other
client of the Sub-Adviser, advisory or otherwise, or (ii) to abstain from the purchase or sale of any security for the
Sub-Adviser's other clients, advisory or otherwise, which the Investment Manager has placed on the list provided pursuant to
paragraph 6(g) of this Agreement.
12. Continuance and Termination. This Agreement shall remain in full force and effect for one year from the date hereof, and
----------------------------
is renewable annually thereafter by specific approval of the Directors or by vote of a majority of the outstanding voting
securities of the Fund. Any such renewal shall be approved by the vote of a majority of the Directors who are not interested
persons under the ICA, cast in person at a meeting called for the purpose of voting on such renewal. This Agreement may be
terminated without penalty at any time by the Investment Manager upon 60 days written notice to the Sub-Adviser or by the
Sub-Adviser upon 90 days written notice to the Investment Manager, and will automatically terminate in the event of (i) its
"assignment" by either party to this Agreement, as such term is defined in the ICA, subject to such exemptions as may be granted
by the Securities and Exchange Commission by rule, regulation or order, (ii) upon termination of the Management Agreement,
provided the Sub-Adviser has received prior written notice thereof, or (iii) upon the filing of bankruptcy proceedings by the
Sub-Adviser or the filing of any receivership proceedings against the Sub-Adviser.
13. Notification. The Sub-Adviser will notify the Investment Manager within a reasonable time of any change in the personnel
------------
of the Sub-Adviser with responsibility for making investment decisions in relation to the Fund (the "Portfolio Manager(s)") or who
have been authorized to give instructions to the Custodian. The Sub-Adviser shall be responsible for reasonable out-of-pocket
costs and expenses incurred by the Investment Manager, the Fund or the Company to amend or supplement the Company's Prospectus: to
reflect a change in Portfolio Manager(s) or otherwise to comply with the ICA, the Securities Act of 1933, as amended (the "1933
Act") or any other applicable statute, law, rule or regulation, as a result of such change; provided, however, that the Sub-Adviser
shall not be responsible for such costs and expenses where the change in Portfolio Manager(s) reflects the termination of
employment of the Portfolio Manager(s) with the Sub-Adviser and its affiliates or is the result of a request by the Investment
Manager or is due to other circumstances beyond the Sub-Adviser's control..
The Sub-Adviser will obtain the Investment Manager's written approval prior to naming the Fund in any legal proceeding
involving the Fund, its holdings, assets, liabilities, affairs, or reputation.
Any notice, instruction or other communication required or contemplated by this Agreement shall be in writing. All such
communications shall be addressed to the recipient at the address set forth below, provided that either party may, by notice,
designate a different recipient and/or address for such party.
Investment Manager: American Skandia Investment Services, Incorporated
Gateway Center Three
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
Sub-Adviser: ▇▇▇▇▇▇▇ Sachs Asset Management, L.P.
▇▇ ▇▇▇ ▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Company: American Skandia Advisor Funds, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Law Department
14. Indemnification. The Sub-Adviser agrees to indemnify and hold harmless the Investment Manager, any affiliated person
---------------
within the meaning of Section 2(a)(3) of the ICA ("affiliated person") of the Investment Manager and each person, if any who,
within the meaning of Section 15 of the 1933 Act, controls ("controlling person") the Investment Manager, against any and all
losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses), to which the Investment
Manager or such affiliated person or controlling person of the Investment Manager may become subject under the 1933 Act, the ICA,
the Advisers Act, the Internal Revenue Code, under any other statute, law, rule or regulation, at common law or otherwise, arising
out of the Sub-Adviser's responsibilities hereunder (1) to the extent of and as a result of the willful misconduct, bad faith, or
gross negligence by the Sub-Adviser, any of the Sub-Adviser's employees or representatives or any affiliate of or any person
acting on behalf of the Sub-Adviser, or (2) as a result of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including any amendment thereof or any supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading,
if such a statement or omission was made in reliance upon and in conformity with written information furnished by the Sub-Adviser
to the Investment Manager, the Fund, the Company or any affiliated person of the Investment Manager, the Fund or the Company or
upon verbal information confirmed by the Sub-Adviser in writing, or (3) to the extent of, and as a result of, the failure of the
Sub-Adviser to execute, or cause to be executed, portfolio investment transactions according to the requirements of the ICA, the
Registration Statement and the Board Adopted Procedures provided, however, that in no case is the Sub-Adviser's indemnity in favor
-------- -------
of the Investment Manager or any affiliated person or controlling person of the Investment Manager deemed to protect such person
against any liability to which any such person would otherwise be subject by reason of willful misconduct, bad faith or gross
negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this
Agreement.
The Investment Manager agrees to indemnify and hold harmless the Sub-Adviser, any affiliated person of the Sub-Adviser
and each controlling person of the Sub-Adviser, if any, against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which the Sub-Adviser or such affiliated person or controlling person of the
Sub-Adviser may become subject under the 1933 Act, the ICA, the Advisers Act, the Internal Revenue Code, under any other statute,
law, rule or regulation, at common law or otherwise, arising out of the Investment Manager's responsibilities as investment
manager of the Fund (1) to the extent of and as a result of the willful misconduct, bad faith, or gross negligence by the
Investment Manager, any of the Investment Manager's employees or representatives or any affiliate of or any person acting on
behalf of the Investment Manager, or (2) as a result of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including any amendment thereof or any supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading,
if such a statement or omission was made other than in reliance upon and in conformity with written information furnished by the
Sub-Adviser, or any affiliated person of the Sub-Adviser or other than upon verbal information confirmed by the Sub-Adviser in
writing; provided, however, that in no case is the Investment Manager's indemnity in favor of the Sub-Adviser or any affiliated
-------- -------
person or controlling person of the Sub-Adviser deemed to protect such person against any liability to which any such person would
otherwise be subject by reason of willful misconduct, bad faith or gross negligence in the performance of its duties or by reason
of its reckless disregard of its obligations and duties under this Agreement. It is agreed that the Investment Manager's
indemnification obligations under this Section 14 will extend to expenses and costs (including reasonable attorneys fees) incurred
by the Sub-Adviser as a result of any litigation brought by the Investment Manager alleging the Sub-Adviser's failure to perform
its obligations and duties in the manner required under this Agreement unless judgment is rendered for the Investment Manager.
15. Conflict of Laws. The provisions of this Agreement shall be subject to all applicable statutes, laws, rules and
-----------------
regulations, including, without limitation, the applicable provisions of the ICA and rules and regulations promulgated
thereunder. To the extent that any provision contained herein conflicts with any such applicable provision of law or regulation,
the latter shall control. The terms and provisions of this Agreement shall be interpreted and defined in a manner consistent with
the provisions and definitions of the ICA. If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall continue in full force and effect and shall not be affected by
such invalidity.
16. Amendments, Waivers, etc. Provisions of this Agreement may be changed, waived, discharged or terminated only by an
---------------------------
instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.
This Agreement (including Exhibit A hereto) may be amended at any time by written mutual consent of the parties, subject to the
requirements of the ICA and rules and regulations promulgated and orders granted thereunder.
17. Governing State Law. This Agreement is made under, and shall be governed by and construed in accordance with, the laws
--------------------
of the State of Connecticut.
18. Severability. Each provision of this Agreement is intended to be severable. If any provision of this Agreement is held
------------
to be illegal or made invalid by court decision, statute, rule or otherwise, such illegality or invalidity will not affect the
validity or enforceability of the remainder of this Agreement.
The effective date of this agreement is May 1, 2003.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
___________________________________ ___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
Date: ____________________________ Date: ____________________________
Attest: ____________________________ Attest: ____________________________
American Skandia Advisor Funds
▇▇▇▇ ▇▇▇▇▇▇▇ Sachs Mid-Cap Growth Fund
Sub-advisory Agreement
EXHIBIT A
---------
An annual rate equal to the following percentages of the combined average daily net assets of the Fund and ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ Concentrated Growth Fund and the following series of American Skandia Trust, AST ▇▇▇▇▇▇▇ Sachs Mid-Cap Growth Portfolio and
AST ▇▇▇▇▇▇▇ ▇▇▇▇▇ Concentrated Growth Portfolio, that are managed by the Sub-Advisor and identified by the Sub-advisor and the
Investment Manager as being similar to the Funds .28% of the portion of the average daily net assets of the Funds not in excess of
$1 billion plus .25% of the portion of the net assets over $1 billion.