INTERIM INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 1st day of October, 2004 between XXXXXXX XXXXX
INVESTMENT MANAGERS, L.P. a limited partnership organized under the laws of the
State of Delaware and having its principal place of business in 000 Xxxxxxxx
Xxxx Xxxx, Xxxxxxxxxx, X.X. 00000 (the "Adviser") and CIGNA VARIABLE PRODUCTS
GROUP, a Massachusetts business trust having its principal place of business in
Newton, Massachusetts (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser is engaged in the business of rendering investment
management services and is so registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust operates as a "series company" as contemplated by Rule
18f-2 under the 1940 Act and is authorized to issue shares of beneficial
interest ("Shares") in separate series with each such series representing a
separate portfolio of securities and other assets; and
WHEREAS, the Trust desires to engage the Adviser to serve as the
investment adviser for the TimesSquare VP S&P 500 Index Fund, a series of the
Trust (the "Series"), and the Adviser has agreed to serve in that capacity.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. The Trust hereby appoints the Adviser to act as investment adviser to
the Series for the period and on the terms herein set forth, subject to the
control of the Board of Trustees of the Trust. The Adviser hereby accepts such
appointment and agrees during such period, at its own expense, to render the
services and to assume the obligations herein set forth for the compensation
herein provided
2. (a) The Adviser, at its expense, will furnish continuously an
investment program for the Series, will determine, subject to the control and
periodic review of the Board of Trustees of the Trust, what investments shall be
purchased, held, sold or exchanged by the Series and what portion, if any, of
the assets of the Series shall be held in cash, cash equivalents or other
temporary investments and shall, on behalf of the Series, make changes in the
Series' investments. The Adviser shall take, on behalf of the Series, all
actions which it deems necessary to implement the investment policies as set
forth in the Series' Prospectus or Statement of Additional Information, and in
particular to place all orders for the purchase or sale of portfolio securities
for the Series' account with brokers or dealers by it, and to that end, the
Adviser is authorized as the agent of the Trust to give instructions to the
custodian of the Trust as to deliveries of securities and payments of cash for
the account of the Series. The Adviser shall be responsible for voting all
proxies in relation to securities held in the Series. The Trust will bear all
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; (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
Series' 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 Series; (viii) all other expenses incidental to holding
meetings of the Series' shareholders, including proxy solicitations therefore;
(ix) insurance premiums for fidelity bond and other coverage; (x) expenses of
typesetting for printing prospectuses and statements of additional information
and supplements thereto; (xi) 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 Series is a party and legal
obligations that the Series may have to indemnify the Trust's trustees, officers
and/or employees or agents with respect thereto.
(b) The Adviser, at its own expense, shall place orders for the
purchase and sale of portfolio securities for the account of the Series with
brokers or dealers selected by the Adviser. In executing portfolio transactions
for the Series and selecting brokers or dealers, the Adviser will use its best
efforts to seek on behalf of the Series the best overall terms available. In
assessing the best overall terms available for any transaction, the Adviser
shall consider all factors it deems relevant, including 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
evaluating the best overall terms available, and in selecting the broker or
dealer to execute a particular transaction, the Adviser may also consider the
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934, as the same may be amended from time to
time (the "1934 Act")) provided to the Series and/or other accounts over which
the Adviser or an affiliate of the Adviser exercises investment discretion. The
Adviser is authorized to pay to a broker or dealer who provides such brokerage
and research services a commission for executing a Series portfolio transaction
which is in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or
dealer--viewed in terms of that particular transaction or in terms of all of the
accounts over which investment discretion is so exercised.
(c) The Adviser or any of its affiliates may act as broker in
connection with the purchase or sale of securities or other investments for the
Series, subject to: (i) the requirement that the Adviser 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; (ii) the provisions of the 1940
Act and the Advisers Act; (iii) the provisions of the Securities Exchange Act of
1934, including, but not limited to, Section 11(a) thereof; and (iv) other
provisions of applicable law. These brokerage services are not within the scope
of the duties of the Adviser under this Agreement. Subject to the requirements
of applicable law and any procedures adopted by the Board, the Adviser or its
affiliates may receive brokerage commissions, fees or other remuneration from
the Series or the Trust for these services in addition to the Adviser's fees for
services under this Agreement.
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(d) On occasions when the Adviser deems the purchase or sale of a
security or futures contract to be in the best interest of the Series as well as
other clients, the Adviser is authorized, but not required, to aggregate
purchase and sale orders for securities or futures contracts held (or to be
held) by the Series with similar orders being made on the same day for other
client accounts or portfolios that the Adviser manages. When an order is so
aggregated, the Adviser 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 Adviser reasonably considers equitable and
consistent with its fiduciary obligations to the Series and to its other
clients. The Adviser and the Trust recognize that in some cases this procedure
may adversely affect the size of the position obtainable for the Series.
3. The Adviser shall indemnify the Trust against any expense of personnel
of the Adviser, or any affiliate of the Adviser, which might otherwise have been
charged to the Trust under any provision of this Agreement.
4. The Adviser and its officers, directors, employees, agents,
representatives or persons controlling or controlled by it shall not be liable
to the Trust or any shareholder of the Trust for any error of judgement or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Series, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder and Adviser agrees to
indemnify and hold the Trust and the Series harmless against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses) with respect to any and all damages the Trust or Series may sustain
directly resulting from the Adviser's willful misfeasance, bad faith, gross
negligence, reckless disregard of its obligations hereunder or a material breach
of this agreement.
5. The services of the Adviser to the Trust hereunder are not to be deemed
exclusive and the Adviser shall be free to render similar service to others so
long as its services hereunder are not impaired or interfered with thereby.
6. The Trust shall pay the Adviser as full compensation for all services
rendered hereunder as a management fee for the Series determined in accordance
with Schedule A attached hereto.
7. It is understood that trustees, officers, agents and shareholders of
the Trust are or may be interested in the Adviser as directors, officers,
shareholders or otherwise, that directors, officers, agents and shareholders of
the Adviser are or may be interested in the Trust as trustees, officers,
shareholders or otherwise, that the Adviser may be interested in the Trust as a
shareholder or otherwise, and that the existence of any such dual interest shall
not affect the validity hereof or of any transactions hereunder except as
otherwise provided in the Declaration of Trust of the Trust and the Certificate
of Incorporation of the Adviser, respectively, or by specific provision of
applicable law.
10. (a) This Agreement will take effect as of October 1, 2004. This
Agreement shall thereafter continue in full force and effect until February 27,
2005; provided, however, that:
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(b) This Agreement may at any time be terminated without the payment
of any penalty on 30 days' written notice to the Adviser either by vote of the
Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Series;
(c) This Agreement shall immediately terminate in event of its
assignment (as that term is defined in the 1940 Act); and
(d) This Agreement may be terminated by the Adviser in its entirety
or with respect to one or more than one of the Series on 60 days' written notice
to the Trust.
11. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage prepaid to the other party at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed for this purpose that the address of the
Adviser shall be 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, X.X. 00000, Attn: General
Counsel and that the address of the Trust shall be c/o CIGNA Corp., 000 Xxxxxxxx
Xxxxxx, X00X, Xxxxxxxx, XX 00000 Attn: Mutual Fund Counsel.
12. Copies of the Master Trust Agreement establishing the Trust are on
file with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this Interim Investment Advisory Agreement is executed on
behalf of the Series by an officer of the Trust as an officer and not
individually and that the obligations of or arising out of this Interim
Investment Advisory Agreement are not binding upon any of the Trustees,
officers, shareholders, employees or agents of the Trust individually but are
binding only upon the assets and property of the Series.
13. Notice Upon Change in Partners of Adviser. The Adviser is a limited
partnership and its limited partner is Xxxxxxx Xxxxx & Co., Inc. and its general
partner is Princeton Services, Inc. The Adviser will notify the Trust of any
change in the membership of the partnership within a reasonable time after such
change.
14. Nothing in this Agreement shall require the Adviser to take or receive
physical possession of cash, securities, or other investments of the Series.
15. This Agreement shall be construed in accordance with laws of the State
of New York and the applicable provisions of the 1940 Act. To the extent that
the applicable laws of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate as of the day and year first above written.
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CIGNA VARIABLE PRODUCTS GROUP
By:
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Xxxxxxx X. Xxxxx
Chairman of the Board and President
XXXXXXX XXXXX INVESTMENT MANAGERS
By:
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Name: Xxxxxx Jelilan
Title: Director
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SCHEDULE A
Compensation Schedule for the TimesSquare VP S&P 500 Index Fund:
The Trust shall pay the Adviser as full compensation for all services rendered
hereunder, a management fee at an annual rate of 0.10% of the Series' average
daily net asset value, computed in the manner used for the determination of the
Series' net asset value. During any period when the determination of net asset
value is suspended by the Trustees, the net asset value of a share as of the
last business day prior to such suspension shall for this purpose be deemed to
be the net asset value at the close of each succeeding business day until it is
again determined.
The fee accrued as of the end of each month shall be paid no later than the 15th
day of the following month. Fees for partial periods shall be prorated for the
portion of the period for which services were rendered.
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