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EXHIBIT 5(AA)
FORM OF
INVESTMENT ADVISORY AGREEMENT
ENTERED INTO BETWEEN
TRAVELERS ASSET MANAGEMENT INTERNATIONAL CORPORATION
AND
THE TRAVELERS SERIES TRUST
This Investment Advisory Agreement (the "Agreement") is entered into
as of ________, ___, 1998 by and between The Travelers Series Trust (the
"Trust") by itself and on behalf of Jurika and Xxxxxx Core Equity Portfolio
(the "Portfolio") and Travelers Asset Management International Corporation, a
New York corporation ("TAMIC").
WHEREAS, the Trust desires that TAMIC provide certain investment
management and advisory services for the Portfolio; and
WHEREAS, TAMIC desires to accept such appointment to provide advisory
services to the Portfolio in the manner and on the terms set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, the Trust and TAMIC agree as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
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
authorized by its Board of Trustees (the "Board") and as specified in the
prospectus (the "Prospectus") and the statement of additional information (the
"SAI") filed with the Securities and Exchange Commission as part of the Trust's
Registration Statement on Form N-1A as may be periodically amended. Copies of
the Prospectus and the SAI have been and will be (following amendments)
forwarded to TAMIC. The Trust desires to employ and accordingly appoints TAMIC
to act as investment adviser to the Portfolio. TAMIC accepts the appointment,
and subject to the supervision of the Board, agrees to furnish the services
contemplated herein for the compensation set forth below.
2. SERVICES AS INVESTMENT ADVISER
Subject to the supervision, direction and approval of the
Board, TAMIC will manage the investment operations of the Portfolio and will
furnish or cause to be furnished to the Trust advice and assistance with
respect to the acquisition, holding or disposal of the Portfolio's investments,
in accordance with the investment objectives, policies and restrictions as
communicated to it by the Board and as are contained in the Prospectus and SAI.
It is expressly understood and the Trust, subject to the approval of the Board,
hereby agrees that TAMIC may enter into agreements, pursuant to which a duly
organized investment adviser (the "Sub-Adviser") may be appointed to provide
investment advice or other services to the Portfolio.
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TAMIC shall remain responsible for ensuring that each Sub-Adviser conducts its
operations in a manner consistent with the terms of this Agreement.
3. INFORMATION PROVIDED TO THE COMPANY
TAMIC shall keep the Board and the Trust informed of
developments materially affecting the Portfolio. In this regard, TAMIC shall
provide such periodic reports concerning the obligations assumed under this
agreement as the Trust and the Board may from time to time reasonably request.
Additionally, TAMIC shall ensure that the Sub-Adviser, at least quarterly, will
provide the Board with a written certification that the Portfolio is in
compliance with the Portfolio's investment objectives and practices.
4. STANDARD OF CARE
TAMIC shall exercise its best judgment and shall act in good
faith in rendering the services contemplated herein. TAMIC shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Trust 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
TAMIC against any liability to the Trust or the shareholders of the Portfolio
to which TAMIC would otherwise be subject by reason of its willful misfeasance,
bad faith, or gross negligence on its part in the performance of its duties or
by reason of TAMIC's disregard of its obligations and duties under this
Agreement.
5. COMPENSATION
In consideration of the services rendered pursuant to this
Agreement, the Trust will pay TAMIC an annual fee calculated at .75% of the
Portfolio's average daily net assets. The parties understand that the fee will
be calculated daily and paid monthly. 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 TAMIC, the value of
the Portfolio's net assets shall be computed at the times and in the manner
specified in the Prospectus and/or the SAI.
6. EXPENSES
TAMIC shall bear all expenses (excluding brokerage costs,
custodian fees, auditors fees or other expenses to be borne by either the
Portfolio or the Trust) in connection with the performance of its services
under this Agreement and shall pay: (a) any sub-investment adviser fee to the
Portfolio under any and all Subadvisory Agreement(s), and (b) any other fees
required to be paid to any Sub-Adviser. 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
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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 other
than those who are "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 therefor; (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) expense 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 obligation
that the Portfolio may have to indemnify the Trust's trustees, officers and/or
employees or agents with respect thereto. The Trust will bear all other
expenses that TAMIC has not specifically assumed hereunder.
7. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Trust understands that TAMIC now acts, will continue to
act and may act in the future as investment manager or adviser to fiduciary and
other managed accounts, and as investment manager or adviser to other
investment companies, and the Trust has no objection to TAMIC's so acting,
provided that whenever the Trust or the Portfolio and one or more other
investment companies or accounts managed or advised by TAMIC 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
or account. The Trust recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for an affected Portfolio.
The Trust also understands that the persons employed by TAMIC to assist in the
performance of TAMIC's duties under this Agreement may not devote their full
time to such service and nothing contained in this Agreement shall be deemed to
limit or restrict the right of TAMIC or any affiliate of TAMIC to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
8. TERM OF AGREEMENT
This Agreement shall become effective ________ ___, 1998 (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 Investment Company Act of 1940, as amended
(the "1940 Act"). This Agreement is terminable, without penalty, on 60 days'
written notice, by the Board or by vote of holders of a majority (as defined in
the 1940 Act and the rules thereunder) of the outstanding voting securities of
the Trust, or upon 60 days' written notice, by TAMIC. This Agreement will also
terminate automatically in the event of its assignment (as defined in the 1940
Act and the rules thereunder).
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9. REPRESENTATIONS
The Trust represents that a copy of the Declaration of Trust
is on file with the Secretary of the State of Massachusetts. The Trust further
represents that it shall maintain compliance with applicable regulatory
mandates and requirements, including but not limited to compliance with any
reporting required or information requested by the California Commissioner of
Insurance. TAMIC also represents that it shall maintain compliance with
applicable regulatory mandates including periodic reporting requirements,
including but not limited to compliance with any reporting or information
requested by the California Commissioner of Insurance.
10. MISCELLANEOUS
This Agreement may be signed in more than one counterpart. It
shall be governed by the laws of the state of Connecticut.
11. COOPERATION WITH INVESTIGATIONS
TAMIC and the Trust each agree to cooperate with each other in
the event that either should become involved in any investigation, legal
proceeding, claim, suit, or other similar action arising from the performance
of the obligations described in this Agreement.
12. COMPLIANCE WITH APPLICABLE LAW
TAMIC agrees to conduct itself in a manner consistent with
applicable laws and regulation, including but not limited to Sections 2a-7,
5(b), 12, 17, 18, and 36 of the 1940 Act. Additionally, TAMIC shall assume
responsibility for ensuring compliance with the applicable investment
diversification requirements set forth in both the 1940 Act and Section 817(h)
of the Internal Revenue Code of 1986, as amended. TAMIC shall also ensure that
its activities are conducted in a manner consistent with a Code of Ethics
maintained pursuant to Section 17j-1 of the 1940 Act. TAMIC agrees to use good
faith efforts to ensure that any sub-adviser appointed shall adopt and follow a
similar Code of Ethics. TAMIC also agrees that it shall conduct its activities
in a manner consistent with any No-Action Letter, order or rule promulgated by
the SEC applicable to the Trust or the Portfolio.
13. LIMITATION OF LIABILITY
Except as may otherwise be prohibited by the Investment
Company Act of 1940 or other applicable federal securities law, neither TAMIC
nor any of its officers, directors, employees or agents shall be subject to any
liability to 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 by reason of 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. To the extent permitted under federal and state law, the Trust
shall hold
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harmless and indemnify TAMIC for any loss, liability, cost, damage or expense
(including reasonable attorneys fees and costs) arising from any claim or
demand by any past or present shareholder of the Trust that is not based upon
TAMIC's willful misfeasance, bad faith, or gross negligence in the performance
of its duties or the reckless disregard of its obligations and duties under
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Investment
Agreement to be signed by their respective officials thereto duly authorized as
of the day and year first above written.
Travelers Asset Management International Corporation.
By:
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Its:
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The Travelers Series Trust
By:
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Its:
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