EXHIBIT 99.G2
SUB-INVESTMENT ADVISORY AGREEMENT
TRAVELERS CORPORATE LOAN FUND INC.
_________, 1998
Dear Sirs:
Travelers Corporate Loan Fund Inc., a Maryland corporation (the "Fund"), and
Mutual Management Corp., a Delaware corporation (the "Adviser"), each confirms
its agreement with Travelers Asset Management International Corporation, a New
York corporation (the "Sub-Adviser"), as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in: (i)
its Articles of Incorporation as amended from time to time; (ii) the Fund's
Prospectus (the "Prospectus"); and (iii) the Fund's Statement of Additional
Information, if any (the "Statement") filed with the Securities and Exchange
Commission (the "SEC") as part of the Fund's Registration Statement on Form N-2,
as amended from time to time, and in such manner and to such extent as may from
time to time be approved by the Board of Directors of the Fund (the "Board").
Copies of the Fund's Prospectus and the Statement and the Articles of
Incorporation have been or will be submitted to the Sub-Adviser. The Fund
employs the Adviser as the investment adviser for the Fund and the Fund and the
Adviser desire to employ and hereby appoint the Sub-Adviser to act as the sub-
investment adviser to the Fund.. The Sub-Adviser accepts the appointment and
agrees to furnish the services for the compensation set forth below.
2. SERVICES AS SUB-INVESTMENT ADVISER
Subject to the supervision and direction of the Board and the Adviser, the
Sub-Adviser will: (a) manage the Fund's portfolio in accordance with the Fund's
investment objective(s) and policies as stated in the Articles of Incorporation,
the Prospectus and the Statement; (b) assist in supervising all aspects of the
Fund's operations; (c) make investment decisions for the Fund; (d) place
purchase and sale orders for portfolio transactions for the Fund; and (e) employ
professional portfolio managers and securities analysts who provide research
services to the Fund. In providing those services, the Sub-Adviser will conduct
a continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets.
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3. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, the
Adviser will pay the Sub-Adviser, on the first business day of each month, a fee
for the previous month at an annual rate of 0.50% of the Fund's average daily
net assets. The Sub-Adviser shall have no right to obtain compensation directly
from the Fund for services provided hereunder and agrees to look solely to the
Adviser for payment of fees due. The fee for the period from the date the Fund
commences its investment operations to the end of the month during which the
Fund commences its investment operations shall be pro-rated according to the
proportion that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of any month, the fee for such part
of that month shall be pro-rated 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 Sub-Adviser, the value of the Fund's net assets shall be computed at the
times and in the manner specified in the Fund's Prospectus and/or the Statement,
as from time to time in effect.
4. EXPENSES
The Sub-Adviser will bear all expenses in connection with the performance of
its services under this Agreement. The Fund will bear all other expenses to be
incurred in its operation, including, but not limited to, investment advisory
and administration fees payable under the Fund's Investment Advisory Agreement
with the Adviser; taxes, interest, brokerage fees and commissions, if any; fees
of the Board members of the Fund who are not officers, directors or employees of
Xxxxxxx Xxxxx Xxxxxx Inc., or any of its affiliates; SEC fees and state blue sky
qualification fees; charges of custodians and transfer and dividend disbursing
agents; the Fund's and its Board members' proportionate share of insurance
premiums, professional association dues and/or assessments; outside auditing and
legal expenses; costs of maintaining the Fund's existence; costs attributable to
investor services, including, without limitation, telephone and personnel
expenses; costs of preparing and printing Prospectuses and Statements for
regulatory purposes and, for distribution to existing shareholders; costs of
shareholders reports and meetings of the officers or Board and any extraordinary
expenses.
5. BROKERAGE
In selecting brokers or dealers to execute transactions on behalf of the Fund,
the Sub-Adviser will seek the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser will consider
factors it deems relevant, including, but not limited to, the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of the
commission, if any, for the specific transaction and on a continuing basis. In
selecting brokers or dealers to execute a particular transaction, and in
evaluating the best overall terms available, the Sub-Adviser is authorized to
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended) provided to
the Fund and/or other accounts over which the Sub-Adviser or its affiliates
exercise investment discretion.
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6. INFORMATION PROVIDED TO THE FUND
The Sub-Adviser will keep the Adviser and the Fund informed of developments
materially affecting the Fund and will, on its own initiative, furnish the
Adviser from time to time with whatever information the Sub-Adviser believes is
appropriate for this purpose. The Sub-Adviser has adopted, and will maintain, a
Code of Ethics in accordance with Rule 17j-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), and will provide a copy of such Code of
Ethics to the Fund, including any amended versions thereof.
7. STANDARD OF CARE
The Sub-Adviser shall exercise its best judgment in rendering the services
listed in paragraphs 2, 5 and 6 above. The Sub-Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Sub-Adviser against any liability to the Fund or to the Fund's shareholders to
which the Sub-Adviser would otherwise be subject by reason of willful
malfeasance, bad faith or gross negligence on its part in the performance of its
duties or by reason of the Sub-Adviser's reckless disregard of its obligations
and duties under this Agreement.
8. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Fund understands that the Sub-Adviser now acts, will continue to act and
may act in the future as: investment adviser to fiduciary and other managed
accounts, as well as to other investment companies; and the Fund has no
objection to the Sub-Adviser so acting, provided that whenever the Fund and one
or more other investment companies advised by the Sub-Adviser have available
funds for investment, investments suitable and appropriate for each will be
allocated in accordance with a formula believed to be equitable to each company.
The Fund recognizes that in some cases this procedure may adversely affect the
size of the position obtainable for the Fund. In addition, the Fund understands
that the persons employed by the Sub-Adviser to assist in the performance of the
Sub-Adviser's duties under this Agreement will not devote their full time to
such service and nothing contained in this Agreement shall be deemed to limit or
restrict the right of the Sub-Adviser or any affiliate of the Sub-Adviser to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
9. TERM OF AGREEMENT
This Agreement shall become effective as of ____________, 1998 and continue
for an initial two-year term and shall continue thereafter so long as such
continuance is specifically approved at least annually by (i) the Board or (ii)
a vote of a "majority" (as defined in the 0000 Xxx) of the Fund's outstanding
voting securities, provided that in either event the continuance is also
approved by a majority of the Board members who are not "interested persons" (as
defined in the 0000 Xxx) of any party to this Agreement, by vote cast in person
or by proxy at a meeting called for the purpose of voting on such approval.
This Agreement is terminable, without penalty, on 60 days' written notice, by
the Board or by vote of holders of a majority of the Fund's shares, or upon 90
days' written notice, by the Sub-Adviser. This Agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act).
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If the foregoing is in accordance with your understanding, kindly indicate your
acceptance hereof by signing and returning the enclosed copy of this Agreement
to us.
Very truly yours,
Travelers Corporate Loan Fund Inc.
By: __________________________________
Title:
Mutual Management Corp.
By: __________________________________
Title:
Accepted:
Travelers Asset Management International Corporation
By:___________________________________
Title:
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