Travelers Series Trust
File Number 811-6465
Question 77Q1
Small Cap Value Portfolio
Small Cap Growth Portfolio
INVESTMENT SUBADVISORY AGREEMENT
ENTERED INTO BETWEEN
TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY LLC
AND
TRAVELERS INVESTMENT MANAGEMENT COMPANY
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 Travelers Investment
Management Company ("TIMCO"), a Connecticut general business corporation
(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 and Small Cap Growth Portfolio, each a series of the
Trust (each a "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 compliant 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
other 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 Connecticut
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
amendments 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 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 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 Agreement 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 "Travelers Investment Management Company," 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 "Travelers Investment
Management Company" 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:
TRAVELERS INVESTMENT MANAGEMENT COMPANY
By:
Name:
Title:
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
0.300% Up to $500 million
0.250% Next $500 million
0.200% Greater than $1 billion
