Ex-99.(d)(78)
Exhibit (d)(78)
INVESTMENT SUBADVISORY AGREEMENT
ENTERED INTO BETWEEN
TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY LLC
AND
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
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 Deutsche Investment Management
Americas Inc. ("DIMA"), a corporation 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 Managed
Allocation Series: Conservative Portfolio, Moderate-Conservative Portfolio,
Moderate Portfolio, Moderate-Aggressive Portfolio and Aggressive 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 asset
allocation services as described in the Prospectus and Statement of Additional
Information 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. In advance of any amendments to Prospectus
and Statement of Additional Information applicable to Subadviser, TAMIC agrees
to provide copies of all prepared amendments and supplements to the current
Prospectus and the SAI. TAMIC will also promptly provide 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. 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. Pursuant to this Agreement, the
Prospectus, and the Statement of Additional Information, and subject to the
oversight and supervision by TAMIC and the Board, personnel team members of the
Subadviser designated in the Prospectus as "Portfolio Manager" for purposes of
the Prospectus are solely responsible for the services set forth in Section 2.
herein. The Subadviser's asset allocation decisions will be made based on the
Portfolios made available by TAMIC (the "Underlying Funds") The Subadviser has
not approved the Underlying Funds as suitable investment options or otherwise.
The Subadviser's role is limited to using its proprietary technology to allocate
assets within the universe of the Underlying Funds taking into consideration the
Portfolio's investment strategy. Periodically, the Subadviser will re-evaluate
asset allocations based upon its proprietary technology and adjust the
allocation consistent with the Portfolio's investment strategy set forth herein,
as appropriate. In doing so, the Subadviser may also consider factors such as an
Underlying Fund's historical manager performance. 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
(a) Subject to the supervision, direction and approval of the Board and
TAMIC, the Subadviser shall conduct a continual program of asset allocation of
the Portfolio's assets, AND SHALL, IN ITS DISCRETION, RECOMMEND TO TAMIC THE
ALLOCATION OF THE PORTFOLIO'S ASSETS AMONG THE UNDERLYING FUNDS. Subadviser
acknowledges that it is TAMIC's intention to implement those recommendations
absent unusual circumstances. The Subadviser is authorized and shall: (a) design
a written strategic asset allocation program based on the Subadviser's strategic
asset allocation forecasts which will be updated on at least an annual basis and
more frequently if necessary as agreed by Subadviser and TAMIC; (b) using the
Subadviser's proprietary optimization technology, seek to optimize the Portfolio
investments consistent with the performance objective specified by each
Portfolio and TAMIC (i.e. the probability of outperforming a benchmark or
target, minimize expected shortfall to a benchmark or target, or a combination
of these objectives); (c) on a periodic basis provide the written allocation
program to TAMIC or to a third party authorized by TAMIC; (d) consult with TAMIC
periodically regarding the proposed allocations and review and monitor
performance once the actual allocations are implemented; (e) seek to achieve the
investment objective stated by each Portfolio by investing in the Underlying
Funds selected by TAMIC. The Subadviser has not and shall not exercise any
judgment or discretion in the selection of the Underlying Funds MADE AVAILABLE
FOR INVESTMENT BY THE PORTFOLIO, and shall have no responsibility to oversee,
monitor or otherwise direct TAMIC or the activities of the Underlying Funds; (f)
the Subadviser has not and shall not exercise any judgment or discretion in
selecting the portfolio managers of the Underlying Funds, and shall have no
responsibility for overseeing, monitoring, or otherwise directing any direct or
ancillary activities associated with the conduct of the portfolio managers of
the Underlying Funds.
In connection with the above-referenced activities, TAMIC agrees to
provide the Subadviser with any asset class and Portfolio constraints.
(b) 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.
(c) The Subadviser shall comply with Board Procedures, as applicable
and any amendments thereto provided to the Subadviser by TAMIC or the Trust.
(d) The Subadviser shall maintain a written code of ethics (the "Code
of Ethics") that it reasonably believes complies with the requirements of Rule
204A-1 under
the Investment Advisers Act of 1940 and 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 Rules 204A-1 and
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.
3. INFORMATION AND REPORTS
(a) The Subadviser shall keep the Trust and TAMIC informed of
developments relating to its duties 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 asset allocation
decisions during the most recently completed quarter which will include a
written certification that its recommendations for the Portfolio are in
compliance with the Portfolio's investment objectives and investment strategies.
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 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.
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.
Subadviser agrees to promptly notify TAMIC of any material compliance violations
which affect the Portfolios sub-advised by Subadviser.
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. See Attachment B.
(b) SELECTION OF BROKERS AND DEALERS. Not applicable.
(c) SOFT DOLLAR ARRANGEMENTS. Not applicable.
(d) AGGREGATED TRANSACTIONS. Not applicable.
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 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. PROXY VOTING
TAMIC and not the Subadviser shall be responsible for voting proxies on
securities held by the Portfolio.
11. AFFILIATED BROKERS
Not applicable.
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 May 1, 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 TAMIC 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, 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 applicable and as
amended from time to time; and (iii) any policies or directives as the Board may
from time to time establish or issue and that are communicated 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 applicable, 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, copies of the
Portfolio's Books and Records shall be returned to the Trust or TAMIC.
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, 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 Subadviser's management of the Portfolio provided in
writing to TAMIC or the Trust by the Subadviser or which has been reviewed and
approved 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, 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 Subadviser's management of the Portfolio provided in writing
to TAMIC or the Trust by the Subadviser or which has been reviewed and approved
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 "Deutsche Investment Management Americas Inc.," or "Deutsche Asset
Management" 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 Subadviser
(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.
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: /s/ Xxxx Xxxxxxxxx
Name: Xxxx Xxxxxxxxx
Title: Vice President
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Director and Assistant Secretary
ATTACHMENT A
INVESTMENT SUB-ADVISORY 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
..15% on the first $100 million
..10% on the next $400 million
..05% on the amount over $500 million
Minimum annual fee of $1 million across all portfolios
Minimum fee waived for first year, to be in effect beginning June 30, 2006
