Travelers Series Trust
File Number 811-6465
Question 77Q1
Small Cap Value Portfolio
INVESTMENT SUBADVISORY AGREEMENT
ENTERED INTO BETWEEN
TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY LLC
AND
DREMAN VALUE MANAGEMENT LLC
This Investment Subadvisory Agreement (the "Agreement")
is entered into as of May 1, 2005, by and between
Travelers Asset Management International Company LLC,
a limited liability company duly organized and existing
under the laws of the State of New York ("TAMIC"), and
Dreman Value Management LLC ("Dreman"), a limited
partnership duly organized and existing under the laws
of Delaware (the "Subadviser").
WHEREAS, TAMIC and The Travelers Series Trust, an
open-end management investment company registered
under the Investment Company Act of 1940, as amended
(the "1940 Act") and organized as a Massachusetts business
trust (the "Trust"), have entered into an Investment
Advisory Agreement dated May 1, 2005, (the "Investment
Advisory Agreement"), a copy of which is attached as
Exhibit A hereto;
WHEREAS, pursuant to the Investment Advisory Agreement,
TAMIC has agreed to provide investment management and
advisory services to the Small Cap Value Portfolio, a series
of the Trust (the "Portfolio"); and
WHEREAS, the Investment Advisory Agreement provides that
TAMIC may engage a duly organized subadviser, to furnish
investment information, services and advice to assist
TAMIC in carrying out its responsibilities under the
Investment Advisory Agreement, provided that TAMIC obtains
the consent and approval of the Board of Trustees of the
Trust (the "Board") and a majority of those trustees who
are not parties to the Investment Advisory Agreement or
"interested persons" of any party thereto in accordance with
the requirements of the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, TAMIC desires to retain the Subadviser to render
investment advisory services to TAMIC in the manner and on
the terms set forth in this Agreement, and the Subadviser
desires to provide such services.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements set forth in this Agreement, TAMIC and the
Subadviser agree as follows:
1. Investment Description; Appointment
(a) Investment Description. The Trust desires to employ
its capital relating to the Portfolio by investing and reinvesting
in investments of the kind and in accordance with the investment
objective(s), policies and limitations specified in the
prospectus (the "Prospectus") and the statement of additional
information (the "SAI") filed with the Securities and Exchange
Commission (the "SEC") as part of the Trust's Registration
Statement on Form N lA, as may be periodically amended. TAMIC
agrees to provide promptly copies of all amendments and
supplements to the current Prospectus and the SAI, and copies
of any procedures adopted by the Board applicable to the
Subadviser and any amendments thereto (the "Board Procedures"),
to the Subadviser on an on going basis. Until TAMIC delivers
any such amendment or supplement or Board Procedures, the
Subadviser shall be fully protected in relying on the last
Prospectus and SAI and any Board Procedures, if any, previously
furnished to the Subadviser. In addition, TAMIC shall furnish
the Subadviser with a certified copy of any financial statement
or report prepared for the Trust with respect to the Portfolio
by certified or independent auditors, and with copies of any
financial statements or reports made by the Trust to shareholders
or to any state or federal regulatory agency. TAMIC shall also
inform the Subadviser of the results of any audits or examinations
by regulatory authorities pertaining to the Subadviser's
responsibilities for the Portfolio. TAMIC further agrees to
furnish the Subadviser with any materials or information that
the Subadviser may reasonably request to enable it to perform
its functions under this Agreement.
(b) Appointment of Subadviser. TAMIC hereby engages
the services of the Subadviser in connection with the investment
and reinvestment of that discrete portion of the Portfolio's
assets deemed appropriate from time to time by TAMIC in its
discretion, subject to the periodic review by the Board.
References to the Portfolio or Portfolio assets shall mean the
portion of the Portfolio for which Subadviser is responsible.
Pursuant to this Agreement and subject to the oversight and
supervision by TAMIC and the Board, the Subadviser shall manage
the investment and reinvestment of the Portfolio's assets.
Subject to the terms and conditions of this Agreement, the
Subadviser hereby accepts the engagement by TAMIC in the
foregoing capacity and agrees, at the Subadviser's own expense,
to render the services set forth herein and to provide the
office space, furnishings, equipment, and personnel required by
the Subadviser to perform these services on the terms and for the
compensation provided in this Agreement. Except as specified
herein, the Subadviser agrees that it shall not delegate any
material obligation assumed pursuant to this Agreement to any
third party without first obtaining the written consent of both
the Trust and TAMIC.
2. Services as Subadviser
Subject to the supervision, direction and approval of the Board
and TAMIC, the Subadviser shall conduct a continual program of
investment, evaluation, sale, and reinvestment of the Portfolio's
assets. The Subadviser is authorized, in its sole discretion and
without prior consultation with TAMIC, to: (a) obtain and
evaluate pertinent economic, financial, and other information
affecting the economy generally and certain companies as such
information relates to securities which are purchased for or
considered for purchase in the Portfolio; (b) manage the
Portfolio's assets in accordance with the Portfolio's investment
objectives and policies as stated in the Prospectus and the SAI,
rules and regulations under the 1940 Act; (c) make investment
decisions for the Portfolio; (d) place purchase and sale orders
for portfolio transactions on behalf of the Portfolio and manage
otherwise uninvested cash assets of the Portfolio; (e) price such
Portfolio securities as TAMIC and Subadviser shall mutually agree
upon from time to time; (f) execute account documentation,
agreements, contracts and other documents as the Subadviser
shall be requested by brokers, dealers, counterparties and other
persons in connection with its management of the assets of the
Portfolio (in such respect, and only for this limited purpose,
the Subadviser shall act as TAMIC's and the Trust's agent and
attorney in fact); and (g) employ professional portfolio managers
and securities analysts who provide research services to the
Portfolio. The Subadviser shall in general take such action as
is appropriate to effectively manage the Portfolio's investment
practices. In addition,
(i) The Subadviser shall furnish TAMIC routinely with daily
information concerning portfolio transactions and other reports
as agreed upon from time to time concerning transactions and
performance of the Portfolio, in such form and frequency as may
be mutually agreed upon from time to time. The Subadviser
agrees to review the Portfolio and discuss the management of
the Portfolio with TAMIC and the Board as either or both shall
from time to time reasonably request.
(ii) The Subadviser shall maintain and preserve the records
specified in Section 17 of this Agreement and any other records
related to the Portfolio's transactions as are required under
any applicable state or federal securities law or regulation
including: the 1940 Act, the Securities Exchange Act of 1934,
as amended (the "1934 Act), and the Investment Advisers Act of
1940, as amended (the "Advisers Act"). TAMIC and the Trust
shall maintain and preserve all other books and records for
the Portfolio as required under such rules. The Subadviser
shall furnish to TAMIC all information relating to the
Subadviser's services hereunder reasonably requested by TAMIC
within a reasonable period of time after TAMIC makes such request.
(iii) The Subadviser shall comply with Board Procedures
and any amendments thereto provided to the Subadviser by TAMIC
or the Trust. The Subadviser shall notify TAMIC as soon as
reasonably practicable upon detection of any material breach of
such Board Procedures.
(iv) The Subadviser shall maintain a written code of ethics
(the "Code of Ethics") that it reasonably believes complies with
the requirements of Rule 17j 1 under the 1940 Act, a copy of
which will be provided to TAMIC and the Trust, and shall
institute procedures reasonably necessary to prevent Access
Persons (as defined in Rule 17j-1) from violating its Code of
Ethics. The Subadviser shall follow such Code of Ethics in
performing its services under this Agreement. Further, the
Subadviser represents that it has policies and procedures
regarding the detection and prevention of the misuse of material,
nonpublic information by the Subadviser and its employees as
required by the Xxxxxxx Xxxxxxx and Securities Fraud Enforcement
Act of 1988, a copy of which it will provide to TAMIC and the
Trust upon any reasonable request.
(v) The Subadviser shall manage the investment and
reinvestment of the assets of the Portfolio in a manner consistent
with the requirements of Subchapter M and the diversification
requirements of Section 817(h) of the Internal Revenue Code of
1986, as amended (the "Code"). The Subadviser will also manage
the investments of the Portfolio in a manner consistent with any
and all applicable investment restrictions (including
diversification requirements) contained in the 1940 Act and
the rules and regulations thereunder, any SEC no-action letter
or order applicable to the Trust, and any applicable state
securities law or regulation. TAMIC shall provide Subadviser
with copies of any such SEC no-action letter or order.
3. Information and Reports
(a) The Subadviser shall keep the Trust and TAMIC informed
of developments relating to its duties as subadviser of which
the Subadviser has, or should have, knowledge that would materially
affect the Portfolio. In this regard, the Subadviser shall
provide the Trust, TAMIC, and their respective officers with
such periodic reports concerning the obligations the Subadviser
has assumed under this Agreement as the Trust and TAMIC may from
time to time reasonably request. Additionally, prior to each
Board meeting, the Subadviser will provide TAMIC and the Board
with reports regarding the Subadviser's management of the
Portfolio during the most recently completed quarter, to include
written certifications that the Portfolio is in compliance with
the Portfolio's investment objectives and practices, the 1940
Act and applicable rules and regulations under the 1940 Act,
and the requirements of Subchapter M and the diversification
requirements of Section 817(h) under the Code, and otherwise
in such form as may be mutually agreed upon by the Subadviser
and TAMIC. The Subadviser also shall certify quarterly to the
Trust and TAMIC that it and its "advisory persons" (as defined
in Rule 17j-1) have complied materially with the requirements
of Rule 17j-1 during the previous quarter or, if not, explain
what the Subadviser has done to seek to ensure such compliance
in the future. Annually, the Subadviser shall furnish a written
report, which complies with the requirements of Rule 17j-1,
concerning the Subadviser's Code of Ethics to the Trust and TAMIC.
Upon written request of the Trust or TAMIC with respect to
violations of the Code of Ethics directly affecting the Portfolio,
the Subadviser shall permit representatives of the Trust or TAMIC
to examine reports (or summaries of the reports) required to be
made by Rule 17j-1(d)(1) relating to enforcement of the Code of
Ethics.
(b) Each of TAMIC and the Subadviser will provide the other
party with a list, to the best of TAMIC's or the Subadviser's
respective knowledge, of each affiliated person (and any
affiliated person of such an affiliated person) of TAMIC or the
Subadviser, as the case may be, and each of TAMIC and the Subadviser
agrees promptly to update such list whenever TAMIC or the Subadviser
becomes aware of any changes that should be added to or deleted
from the list of affiliated persons.
(c) The Subadviser will also provide TAMIC with any information
reasonably requested regarding its management of the Portfolio
required for any shareholder report, amended registration statement,
or prospectus supplement to be filed by the Trust with the SEC.
The Subadviser shall promptly inform the Trust and TAMIC if any
information in the Prospectus or SAI is (or will become)
inaccurate or incomplete, or if the Portfolio no longer is
ompliant with Section 817(h) of the Code or Treasury Regulation
Section 1.817-5, if applicable.
4. Rule 38a-1 Compliance
The Subadviser represents, warrants and agrees that it has
adopted and implemented, and throughout the term of this Agreement
will maintain in effect and implement, policies and procedures
reasonably designed to prevent, detect and correct violations by
the Subadviser and its supervised persons, and, to the extent the
activities of the Subadviser in respect of the Trust could affect
the Trust, by the Trust, of "federal securities laws" (as defined
in Rule 38a-1 under the 1940 Act), and that the Subadviser has
provided the Trust with true and complete copies of its policies
and procedures (or summaries thereof) and related information
requested by the Trust. The Subadviser agrees to cooperate with
periodic reviews by the Trust's compliance personnel of the
Subadviser's policies and procedures, their operation and
implementation and other compliance matters and to provide to
the Trust from time to time such additional information and
certifications in respect of the Subadviser's policies and
procedures, compliance by the Subadviser with federal securities
laws and related matters as the Trust's compliance personnel
may reasonably request.
5. Standard of Care
The Subadviser shall exercise its best judgment and shall act
in good faith and use reasonable care and in a manner consistent
with applicable federal and state laws and regulations in
rendering the services it agrees to provide under this Agreement.
6. Subadviser's Duties Regarding Portfolio Transactions
(a) Placement of Orders. The Subadviser shall take all
actions that it considers necessary to implement the investment
policies of the Portfolio, and, in particular, to place all
orders for the purchase or sale of securities or other
investments for the Portfolio with brokers or dealers the
Subadviser selects. To that end, the Subadviser is authorized
as the Trust's agent to give instructions to the Trust's
custodian as to deliveries of securities or other investments
and payments of cash for the Portfolio's account. In connection
with the selection of brokers or dealers and the placement of
purchase and sale orders, the Subadviser is directed at all
times to seek to obtain best execution and price within the
policy guidelines determined by the Board and set forth in the
Trust's current Prospectus and SAI, subject to provisions (b),
(c) and (d) of this Section 5.
(b) Selection of Brokers and Dealers. To the extent
permitted by the policy guidelines set forth in the Trust's
current Prospectus and SAI, in the selection of brokers and
dealers to execute portfolio transactions, the Subadviser is
authorized to consider not only the available prices and rates
of brokerage commissions, but also other relevant factors,
which may include, without limitation: the execution
capabilities of the brokers and dealers; the research,
custody, and other services provided by the brokers and
dealers that the Subadviser believes will enhance its
general portfolio management capabilities; the size of
the transaction; the difficulty of execution; the
operational facilities of these brokers and dealers; the
risk to a broker or dealer of positioning a block of
securities; and the overall quality of brokerage and
research services provided by the brokers and dealers.
In connection with the foregoing, the Subadviser is
specifically authorized to pay those brokers and dealers
who provide brokerage and research services to the
Subadviser a higher commission than that charged by other
brokers and dealers if the Subadviser determines in good
faith that the amount of the commission is reasonable in
relation to the value of the services in terms of either
the particular transaction or in terms of the Subadviser's
overall responsibilities with respect to the Portfolio and
to any other client accounts or portfolios that the
Subadviser advises. The execution of such transactions
shall not be considered to represent an unlawful breach
of any duty created by this Agreement or otherwise.
(c) Soft Dollar Arrangements. On an ongoing basis,
but not less often than annually, the Subadviser shall
identify and provide a written description to the Trust
and TAMIC of all "soft dollar" arrangements that the
Subadviser maintains with respect to the Portfolio or
with brokers or dealers that execute transactions for
the Portfolio, and of all research and other services
provided to Subadviser by a broker or dealer (whether
prepared by such broker or dealer or by a third party)
as a result, in whole or in part, of the direction of
Portfolio transactions to the broker or dealer. Prior
to the commencement of the active management of the
Portfolio, and periodically thereafter, but not less
often than annually, the Subadviser shall provide the Trust
and TAMIC with a written description of all arrangements
with third parties and other individuals, entities, brokers,
or money management firms that have or may receive or share
in the payment of fees for services in connection with
securing or continuing this Agreement.
(d) Aggregated Transactions. On occasions when the
Subadviser deems the purchase or sale of a security or
futures contract to be in the best interest of the
Portfolio as well as other clients, the Subadviser is
authorized, but not required, to aggregate purchase and
sale orders for securities or futures contracts held (or
to be held) by the Portfolio with similar orders being made
on the same day for other client accounts or portfolios that
the Subadviser manages. When an order is so aggregated,
the Subadviser may allocate the recommendations or
transactions among all accounts and portfolios for whom
the recommendation is made or transaction is effected on a
basis that the Subadviser reasonably considers equitable and
consistent with its fiduciary obligations to the Portfolio
and its other clients. The Subadviser, TAMIC and the Trust
recognize that in some cases this procedure may adversely
affect the size of the position obtainable for the Portfolio.
7. Compensation
In consideration of the services rendered, the facilities
furnished, and the expenses assumed pursuant to this Agreement,
TAMIC will pay the Subadviser a fee as listed in Attachment A
based on the Portfolio's average daily net assets. The
parties understand that the fee will be calculated daily and
paid monthly. The Subadviser shall have no right to obtain
compensation directly from the Trust or the Portfolio for
services provided hereunder and agrees to look solely to
TAMIC for payment of fees due. The fee for the period from
the Effective Date (defined below) of the Agreement to the
end of the month during which the Effective Date occurs shall
be prorated according to the proportion that such period bears
to the full monthly period. Upon any termination of this
Agreement before the end of a month, the fee for such part of
that month shall be prorated according to the proportion that
such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For
the purpose of determining fees payable to the Subadviser,
the value of the Portfolio's net assets shall be computed at
the times and in the manner specified in the Prospectus and
the SAI, and on days on which the net assets are not so
determined, the net asset value computation to be used shall
be as determined on the immediately preceding day on which the
net assets were determined.
8. Expenses
The Subadviser shall bear all expenses (excluding
expenses to be borne by either the Portfolio or the Trust as
described in the following sentence) in connection with the
performance of its services under this Agreement. The Trust
will bear certain other expenses to be incurred in its operation,
including, but not limited to, (i) interest and taxes; (ii)
brokerage commissions and other costs in connection with the
purchase or sale of securities and other investment instruments;
(iii) fees and expenses of the Trust's trustees who are not
"interested persons" of the Trust; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees
and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's
shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices
and proxy material to shareholders of the Portfolio; (viii)
all other expenses incidental to holding meetings of the
Portfolio's shareholders, including proxy solicitations
therefore; (ix) insurance premiums for fidelity bond and o
ther coverage; (x) investment management fees; (xi) expenses
of typesetting for printing prospectuses and statements of
additional information and supplements thereto; (xii) expenses
of printing and mailing prospectuses and statements of additional
information and supplements thereto; and (xiii) such non recurring
or extraordinary expenses as may arise, including those relating
to actions, suits or proceedings to which the Portfolio is a
party and legal obligations that the Portfolio may have to
indemnify the Trust's trustees, officers and/or employees or
agents with respect thereto.
9. Services to Other Companies or Accounts
TAMIC understands that the Subadviser and its affiliates now act,
will continue to act and may act in the future as investment manager
or adviser to fiduciary and other managed accounts, and as an
investment manager or adviser to other investment companies,
including any offshore entities or private accounts. TAMIC has
no objection to the Subadviser and its affiliates so acting,
provided, that, whenever the Portfolio and one or more other
investment companies or accounts managed or advised by the
Subadviser and its affiliates have available funds for investment,
investments suitable and appropriate for each will be allocated
in accordance with a formula reasonably believed to be equitable
to each such company and account. TAMIC represents that the
Trust recognizes that in some cases this procedure may adversely
affect the size of the position obtainable for the Portfolio and
that the Trust also understands that the persons employed by the
Subadviser to assist in the performance of the Subadviser's
duties under this Agreement may not devote their full time to
such service, and that nothing contained in this Agreement shall
be deemed to limit or restrict the right of the Subadviser to
engage in and devote time and attention to other businesses or
to render services of whatever kind or nature. This Agreement
shall not in any way limit or restrict the Subadviser or any of
its directors, officers, employees, or agents from buying,
selling or trading any securities or other investment instruments
for its or their own account or for the account of others for
whom it or they may be acting, provided that such activities will
not adversely affect or otherwise impair the performance by
the Subadviser of its duties and obligations under this Agreement.
10. Delegation of Proxy Voting Rights
The Subadviser shall be responsible for voting proxies on
securities held by the Portfolio. The Subadviser represents
that is has adopted and implemented written policies and procedures
that are, and are reasonably designed to ensure that the Subadviser
will vote proxies, in compliance with the 1940 Act and the rules
and regulations thereunder. The Subadviser shall provide the
Trust in a timely manner with (1) such records of its proxy
voting on behalf of the Portfolio as necessary for the Trust to
comply with the requirements of Form N-PX, or any successor law,
rule, regulation, or SEC position, and (2) such information as
necessary for a summary description of the Subadviser's proxy
voting policies and procedures to be included in the registration
statement with respect to the Trust.
11. Affiliated Brokers
The Subadviser or any of its affiliates may act as broker in
connection with the purchase or sale of securities or other
investments for the Portfolio, subject to: (a) the requirement
that the Subadviser seek to obtain best execution and price
within the policy guidelines determined by the Board and set
forth in the Trust's current prospectus and SAI; (b) the
provisions of the 1940 Act and the Advisers Act; (c) the
provisions of the 1934 Act, including, but not limited to,
Section 11(a) thereof; and (d) other provisions of applicable
law. These brokerage services are not within the scope of the
duties of the Subadviser under this Agreement. Subject to the
requirements of applicable law and any procedures adopted by the
Board, the Subadviser or its affiliates may receive brokerage
commissions, fees or other remuneration from the Portfolio or
the Trust for these services in addition to the Subadviser's
fees for services under this Agreement.
12. Custody
Nothing in this Agreement shall require the Subadviser to take
or receive physical possession of cash, securities, or other
investments of the Portfolio.
13. Term of Agreement; Termination of Agreement;
Amendment of Agreement
(a) Term. This Agreement shall become effective April
__, 2005 (the "Effective Date"), and shall continue for an
initial two year term and shall continue thereafter so long
as such continuance is specifically approved at least annually
as required by the 1940 Act.
(b) Termination. This Agreement may be terminated, without
penalty, (i) by the Board or by vote of holders of a majority
of the outstanding shares of the Portfolio upon sixty (60) days'
written notice to TAMIC and Subadviser, (ii) by TAMIC upon 60
days' written notice to the Trust and Subadviser, or (iii) by
Subadviser upon 60 days' written notice to the Trust and TAMIC.
This Agreement will also terminate automatically in the event of
its assignment or in the event of the assignment or termination
of the Investment Advisory Agreement.
(c) Amendment. This Agreement may be amended by the parties
only if the amendment is specifically approved by: (i) a
majority of those trustees who are not parties to this Agreement
or "interested persons" of any party cast in person at a meeting
called for the purpose of voting on the Agreement's approval;
and (ii) if required by applicable law, the vote of a majority
of outstanding shares of the Portfolio.
14. Representations and Covenants of TAMIC
TAMIC represents and covenants to Subadviser as follows:
(a) It is duly organized and validly existing under New York
law with the power to own and possess its assets and carry on
its business as the business is now being conducted.
(b) The execution, delivery and performance by TAMIC of
this Agreement are within TAMIC's powers and have been duly
authorized by all necessary limited liability company action
and by the Board of Trustees of the Trust, and no action by or
in respect of, or filing with, any governmental body, agency or
official is required on the part of TAMIC for the execution,
delivery and performance of this Agreement by the parties hereto,
and the execution, delivery and performance of this Agreement by
the parties hereto does not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation,
(ii) TAMIC's governing instruments, or (iii) any agreement,
judgment, injunction, order, decree or other instruments binding
upon TAMIC.
(c) It is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement.
(d) It has met, and shall continue to seek to meet for the
duration of this Agreement, any other applicable federal or state
requirements, or the applicable requirements of any regulatory of
industry self-regulatory agency, necessary to be met by TAMIC in
order to perform the services contemplated by this Agreement.
(e) It (i) is registered with the SEC as an investment adviser
under the Advisers Act, (ii) is registered and licensed as an
investment adviser under the laws of all jurisdictions in which
its activities require it to be so licensed, and (iii) shall
promptly notify the Subadviser of the occurrence of any event
that would disqualify TAMIC from serving as an investment adviser
to an investment company pursuant to Section 9(a) of the 1940 Act.
(f) It acknowledges that it has received a copy of the
Subadviser's Form ADV at least 48 hours prior to the execution of
this Agreement and has delivered a copy of the same to the Trust.
(g) The Trust is registered as an open-end management investment
company under the 1940 Act and that the Trust's shares representing
interests in the Portfolio are registered under the Securities Act
of 1933 and under any applicable state securities laws.
(h) It shall carry out its responsibilities under this Agreement
in compliance with (i) federal and state law, including securities
law, governing its activities; (ii) the Portfolio's investment
objective, policies, and restrictions, as set forth in the Prospectus
and SAI, as amended from time to time; and (iii) any policies or
directives as the Board may from time to time establish or issue and
communicate to the Subadviser in writing. The Trust shall promptly
notify TAMIC in writing of changes to (ii) or (iii) above, and upon
receipt of such notice, TAMIC shall promptly notify the Subadviser
in writing of such changes to (ii) or (iii) above.
15. Representations and Covenants of the Subadviser
The Subadviser represents and covenants to TAMIC as follows:
(a) It is duly organized and validly existing under Delaware
law with the power to own and possess its assets and carry on its
business as this business is now being conducted.
(b) The execution, delivery and performance by the Subadviser
of this Agreement are within the Subadviser's powers and have been
duly authorized by all necessary action on the part of its board of
directors or managing member, and no action by or in respect of, or
filing with, any governmental body, agency or official is required
on the part of the Subadviser for the execution, delivery and
performance of this Agreement by the parties hereto, and the
execution, delivery and performance of this Agreement by the
parties hereto does not contravene or constitute a default under
(i) any provision of applicable law, rule or regulation, (ii) the
Subadviser's governing instruments, or (iii) any agreement,
judgment, injunction, order, decree or other instruments binding
upon the Subadviser.
(c) It is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement.
(d) It has met, and shall continue to seek to meet for the
duration of this Agreement, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement.
(e) It (i) is registered with the SEC as an investment adviser
under the Advisers Act, (ii) is registered or licensed as an
investment adviser under the laws of jurisdictions in which its
activities require it to be so registered or licensed, and (iii)
shall promptly notify the Trust of the occurrence of any event that
would disqualify it from serving as an investment adviser to an
investment company pursuant to Section 9(a) of the 1940 Act.
(f) It has provided TAMIC with a copy of its Form ADV as most
recently filed with the SEC and will, promptly after filing any
amendment to its Form ADV with the SEC, furnish a copy of such
mendments to TAMIC. The information contained in the Subadviser's
Form ADV is accurate and complete in all material respects and does
not omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading.
(g) It shall carry out its responsibilities under this Agreement
in compliance with (i) federal and state law, including securities
law, governing its activities; (ii) the Portfolio's investment
objective, policies, and restrictions, as set forth in the
Prospectusd
and SAI, as amended from time to time; and (iii) any policies or
directives as the Board may from time to time establish or issue
and communicate to the Subadviser in writing. The Trust or TAMIC
shall promptly notify the Subadviser in writing of changes to (ii)
or (iii) above.
16. Cooperation with Regulatory Authorities or Other Actions
The parties to this Agreement each agree to cooperate in a
reasonable manner with each other in the event that any of them
should become involved in a legal, administrative, judicial or
regulatory action, claim, or suit as a result of performing its
obligations under this Agreement.
17. Records
(a) Maintenance of Records. The Subadviser hereby undertakes
and agrees to maintain, in the form and for the period required
by Rule 31a-2 under the 1940 Act, all records relating to the
Portfolio's investments that are required to be maintained by
the Trust pursuant to the requirements of paragraphs (b)(5),
(b)(6), (b)(7), (b)(9), (b)(10), and (f) of Rule 31a-1, as such
may be amended from time to time, under the 1940 Act with respect
to the Subadviser's responsibilities hereunder for the Portfolio
(the "Portfolio's Books and Records").
(b) Ownership of Records. The Subadviser agrees that the
Portfolio's Books and Records are the Trust's property and
further agrees to surrender promptly to the Trust or TAMIC the
Portfolio's Books and Records upon the request of the Trust or
TAMIC; provided, however, that the Subadviser may retain
copies of the records at its own cost. The Portfolio's Books
and Records shall be made available, within two (2) business
days of a written request, to the Trust's accountants or
auditors during regular business hours at the Subadviser's
offices. The Trust, TAMIC or their respective authorized
representatives shall have the right to copy any records in
the Subadviser's possession that pertain to the Portfolio or
the Trust. These books, records, information, or reports shall
be made available to properly authorized government representatives
consistent with state and federal law and/or regulations. In
the event of the termination of this Agreement, the Portfolio's
Books and Records shall be returned to the Trust or TAMIC. The
Subadviser agrees that the policies and procedures it has
established for managing the Portfolio, including, but not
limited to, all policies and procedures designed to ensure
compliance with federal and state regulations governing the
adviser/client relationship and management and operation of the
Portfolio, shall be made available for inspection by the Trust,
TAMIC or their respective authorized representatives upon
reasonable written request within not more than two (2) business
days.
18. Confidentiality.
(a) Non-Disclosure by Subadviser. The Subadviser agrees
that the Subadviser will not disclose or use any records or
confidential information obtained pursuant to this Agreement
in any manner whatsoever, except as authorized in this A
greement or specifically by TAMIC or the Portfolio or Trust, or
if this disclosure or use is required by federal or state
regulatory authorities or by a court.
(b) Non-Disclosure Exceptions. The Subadviser may disclose
the investment performance of the Portfolio; provided that the
disclosure does not reveal the identity of TAMIC, the Portfolio,
or the Trust. The Subadviser may also disclose that TAMIC, the
Trust and Portfolio are the Subadviser's clients, provided that
the disclosure does not reveal the investment performance or
the composition of the Portfolio.
19. Limitation of Liability; Indemnification
(a) Limitation of Liability. Except as provided herein
and as may otherwise be provided by the 1940 Act or other
federal securities laws, TAMIC and its respective officers,
directors, employees, agents, representatives or persons
controlled by them (collectively, the "Related Parties") on
the one hand, and the Subadviser and the Subadviser Related
Parties on the other hand, shall not be liable to each other,
the Trust or any shareholder of the Trust for any error or
judgment, mistake of law, or any loss arising out of any
investment or other act or omission in the course of, connected
with, or arising out of any services to be rendered under this
Agreement, except that TAMIC, the Subadviser and any
respective Related Party shall be so liable by reason of
conduct that constitutes willful misfeasance, bad faith, or
gross negligence in the performance of its duties or by reason
of reckless disregard of its obligations and duties under this
Agreement.
(b) Subadviser Indemnity to TAMIC. The Subadviser agrees
to indemnify and defend TAMIC and TAMIC's Related Parties for
any loss, liability, cost, damage, or expenses (including
reasonable investigation and defense costs and reasonable
attorneys fees and costs) arising out of any claim, demand,
action, suit, or proceeding arising out of (i) the Subadviser's
conduct that constitutes willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this
Agreement provided, however that the Subadviser shall not be
liable under this paragraph in respect of any loss, expense,
claim, damage or liability to the extent that a court having
jurisdiction shall have determined by a final judgment, or
independent counsel agreed upon by the Subadviser and the Adviser
or the Trust, as the case may be, shall have concluded in a
written opinion, that such loss, expense, claim, damage or
liability resulted from the Adviser or the Trust's willful
misfeasance, bad faith or gross negligence or by reason of the
reckless disregard by the Adviser or the Trust of its duties, or
(ii) any actual or alleged material misstatement or omission in
the Trust's registration statement, any proxy statement, or
communication to current or prospective investors in the Portfolio
relating to disclosure about the Subadviser or the Portfolio in
writing provided to TAMIC or the Trust by the Subadviser.
(c) TAMIC Indemnity to Subadviser. TAMIC agrees to indemnify
and defend the Subadviser and the Subadviser's Related Parties for
any loss, liability, cost, damage, or expenses (including reasonable
investigation and defense costs and reasonable attorneys fees and
costs) arising out of any claim, demand, action, suit, or proceeding
arising out of (i) TAMIC's conduct that constitutes willful
misfeasance, bad faith, or gross negligence in the performance of
its duties or by reason of reckless disregard of its obligations
and duties under this Agreement provided, however that TAMIC shall
not be liable under this paragraph in respect of any loss, expense,
claim, damage or liability to the extent that a court having
jurisdiction shall have determined by a final judgment, or independent
counsel agreed upon by TAMIC and the SubAdviser or the Trust, as the
case may be, shall have concluded in a written opinion, that such
loss, expense, claim, damage or liability resulted from the
Subadviser's willful misfeasance, bad faith or gross negligence or
by reason of the reckless disregard by the Subadviser of its duties,
or (ii) any actual or alleged material misstatement or omission in
the Trust's registration statement, any proxy statement, or other
communication to current or prospective investors in the Portfolio
(other than a misstatement or omission relating to disclosure about
the Subadviser or the Portfolio provided to TAMIC or the Trust in
writing by the Subadviser).
(d) Indemnification Procedures. Promptly after receipt of
notice of the commencement of any action by a party seeking to be
indemnified under this Section 19 (the "Indemnified Party"), the
Indemnified Party shall, if a claim in respect thereof is to be
made against a party against whom indemnification is sought under
this Section 19 (the "Indemnifying Party"), notify the Indemnifying
Party in writing of the commencement thereof; provided, however,
that the omission to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability which it may
have to any Indemnified Party otherwise than under the provisions
hereof, and shall relieve it from liability hereunder only to the
extent that such omission results in the forfeiture by the
Indemnifying Party of rights or defenses with respect to such action.
In any action or proceeding, following provision of proper notice by
the Indemnified Party of the existence of such action, the
Indemnifying Party shall be entitled to participate in any such
action and, to the extent that it shall wish, participate jointly
with any other Indemnifying Party similarly notified, to assume the
defense thereof, with counsel of its choice (unless any conflict
of interest requires the appointment of separate counsel), and after
notice from the Indemnifying Party to such Indemnified Party of its
election to assume the defense of the action, the Indemnifying Party
shall not be liable to such Indemnified Party hereunder for any legal
expense of the other counsel subsequently incurred without the
Indemnifying Party's consent. The Indemnified Party shall cooperate
in the defense or settlement of claims so assumed. The Indemnifying
Party shall not be liable hereunder for the settlement by the
Indemnified Party for any claim or demand unless the Indemnifying
Party has previously approved the settlement or it has been notified
of such claim or demand and has failed to provide a defense in
accordance with the provisions hereof. In the event that any
proceeding involving the Indemnifying Party shall be commenced by
the Indemnified Party in connection with the Agreement, or the
transactions contemplated hereunder, and such proceeding shall be
finally determined by a court of competent jurisdiction in favor of
the Indemnifying Party, the Indemnified Party shall be liable to the
Indemnifying Party for any reasonable attorney's fees and direct
costs relating to such proceedings. The indemnifications provided
in this Section 19 shall survive the termination of this Agreement.
20. Survival
All representations and warranties made by the Subadviser and TAMIC
herein shall survive for the duration of this Agreement and the
parties hereto shall notify each other in writing immediately upon
becoming aware, but in no event later than five (5) days after
becoming aware, that any of the foregoing representations and
warranties are no longer true.
21. Use of Name
The Trust and TAMIC, together with its subsidiaries and affiliates
may use the names "Dreman Value Management LLC," or any derivative
thereof or logo associated therewith in offering materials of the
Portfolio only with the prior written approval of the Subadviser
and
only for so long as this Agreement or any extension, renewal, or
amendment hereof remains in effect. At such time as this Agreement
shall no longer be in effect, the Trust and TAMIC together with its
subsidiaries and affiliates each agree that they shall cease to use
such names or any other name indicating that it is advised by or
otherwise connected with the Sub-adviser (except to the extent that
the Trust and TAMIC may be required by law to disclose the former
name and/or subadviser of the Portfolio or disclosure of such
former
name and/or subadviser is reasonably necessary to avoid investor
confusion), and shall promptly change its name accordingly. The
Trust acknowledges that it has adopted the name "Dreman Value
Management LLC" or any derivative thereof or logo associated
therewith in offering materials of the Portfolio only with the
prior approval of the Subadviser and through permission of the
Subadviser, and agrees that the Subadviser reserves to itself
and any successor to its business the right to grant the non
exclusive right to use the aforementioned names or any similar
names to any other corporation or entity, including but not
limited to any investment company of which the Subadviser or any
subsidiary or affiliate thereof or any successor to the business
of any thereof shall be the investment adviser or subadviser.
22. Limitation on Consultation
In accordance with Rule 17a-10 under the 1940 Act and any other
applicable law, the Subadviser shall not consult with any other
subadviser to the Portfolio or any subadviser to any other
portfolio of the Trust or to any other investment company or
investment company series for which TAMIC serves as investment
adviser concerning transactions for the Portfolio in securities
or other assets, other than for purposes of complying with
conditions of paragraphs (a) and (b) of Rule 12d3-1 under the 1940
Act.
23. Governing Law
This Agreement shall be governed by, construed under and interpreted
and enforced in accordance with the laws of the state of New York,
without regard to principles of conflicts of laws.
24. Severability
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 not be affected thereby.
25. Definitions
The terms "assignment," "affiliated person," and "interested
person," when used in this Agreement, shall have the respective
meanings specified in Section 2(a) the 1940 Act. The term
"majority of the outstanding shares" means the lesser of (a)
sixty-seven percent (67%) or more of the shares present at a
meeting if more than fifty percent (50%) of these shares are
present or represented by proxy, or (b) more than fifty percent
(50%) of the outstanding shares.
26. Counterparts
This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of such counterparts
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY, LLC
By:
Name:
Title:
DREMAN VALUE MANAGEMENT LLC
By:
Name: Xxxxx Xxxxx
Title: Chief Operating Officer
ATTACHMENT A
INVESTMENT SUBADVISORY FEES
For the services rendered under this Agreement, TAMIC shall pay
Subadviser an amount equivalent on an annual basis to the following:
Annual Management Fee Aggregate Net Asset Value of
Subadviser's Assets
0.60% Up to $50 million
0.55% Next $50 million
0.50% Greater than $100 million
