Exhibit 10.4
INVESTMENT MANAGEMENT AND ADMINISTRATIVE
SERVICES AGREEMENT
Citigroup Alternative Investments LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
This Agreement (the "Agreement"), dated as of August 6, 2002, for the
period April 1, 2002 to March 31, 2004, is entered into by and between
Citigroup Alternative Investments LLC ("CAI"), a Delaware limited
liability company and Travelers Insurance Group Holdings Inc. on behalf of
itself and its subsidiaries ("Client"), a Delaware corporation. Client
hereby retains CAI to perform the services set forth below under the
following terms and conditions:
1. INVESTMENT MANAGEMENT
Client hereby retains CAI to provide investment management and advisory
services for Client including, but not limited to, the services set forth
in Exhibit A, all of the investment related services currently provided to
Client by affiliates of CAI and the supervision, review, recommendation,
advice and analysis of the investments held or to be made by Client (the
"Account"). CAI shall invest and reinvest the securities, cash and/or
other investments held in the Account in accordance with Client's written
investment policies, objectives and restrictions (the "Investment
Guidelines"). Client may modify the Investment Guidelines from time to
time in its sole discretion by informing CAI in writing of any such
modifications, except as otherwise provided therein. CAI shall have a
reasonable period of time after receipt of notice of modifications in
accordance with Section 17 of this Agreement to conform the securities
and/or other investments in the Account to the guidelines as modified.
Notwithstanding anything to the contrary contained herein or in the
Investment Guidelines, (i) Client shall give CAI not less than ten days'
prior written notice of its intention to change the existing asset class
allocation (as defined in the Investment Guidelines) and CAI shall use
reasonable best efforts to effect such changes as soon as practicable,
(ii) CAI shall only be obligated to effect any such change to the extent
there is sufficient liquidity in the Account and to the extent such change
is permitted by the applicable legal documents and by applicable law,
(iii) as to any change in asset allocation involving illiquid asset
classes such as private equity and real estate or where the applicable
legal documentation or applicable law restrict the redemption, transfer or
sale of such asset or investment, CAI will only be obligated to use
reasonable best efforts to effect such change on a prospective basis and
(iv) CAI shall not be deemed to be in breach of this Agreement (including
the Investment Guidelines) or its obligations hereunder nor shall it have
any liability hereunder if it is unable to effect such change. Subject to
the foregoing CAI and Client will cooperate to implement such changes to
the maximum extent practicable.
Client agrees to inform CAI in writing of any material change in Client's
circumstances that might affect the manner in which Client's assets should
be invested and to provide CAI with such other information as it shall
reasonably request.
CAI shall carry out its obligations with reasonable care and in good faith
and shall render the services provided for in this Agreement with a degree
of skill and attention no less than that which CAI exercises with respect
to comparable assets managed by it in accordance with the laws and
regulations applicable to investments for insurance companies (as to
assets of Client owned by an insurance company) and in accordance with its
existing practices and procedures and consistent with the degree of skill
and attention used by other professional investment managers, except as
expressly provided otherwise in this Agreement. CAI shall use its
reasonable best efforts to comply with any restrictions that Client places
on a particular security or category of securities ("Restricted Security")
for the Account. Where only a category of
securities is restricted, CAI will determine in its sole discretion the
specific securities in that category to be treated as Restricted
Securities. To the extent that CAI becomes aware of an inadvertent
purchase of a Restricted Security, CAI will immediately dispose of the
security and credit the Account for any loss resulting from a failure of
CAI to use its reasonable best efforts to comply with the relevant
restriction, unless otherwise instructed by Client.
2. ADMINISTRATIVE SERVICES
CAI will provide Client with such reports at such intervals as shall be
mutually agreed to by the Client and CAI. In addition, CAI will provide
(or cause to be provided) the additional administrative services as set
forth in Exhibit A attached hereto in draft form, which Exhibit shall be
finalized within 10 days of the execution hereof. CAI will use reasonable
best efforts to furnish all such reports and information to Client so as
to permit it to satisfy its reporting obligations under the Intercompany
Agreement, dated as of March 26, 2002, by and between Travelers Property
Casualty Corp. and Citigroup Inc. (the "Intercompany Agreement") and under
applicable laws, regulations and stock exchange rules. CAI shall carry out
its obligations with reasonable care and in good faith and shall render
the services provided for in this Agreement with a degree of skill and
attention no less than that which CAI exercises with respect to comparable
services provided by it to other institutional clients in accordance with
its existing practices and procedures and consistent with the degree of
skill and attention used by other professional service providers of
similar services, except as expressly provided otherwise in this
Agreement. To the extent that the parties determine in good faith that
there is a necessary service, report or information that is currently
being provided to Client by CAI that is not otherwise included on Exhibit
A hereto, CAI shall use reasonable efforts to provide or cause such
service to be provided to Client at no additional cost. Other than certain
privately-placed debt and equity investments, CAI will not have custody of
the securities, cash or other investments of the Account, which will be
held for Client by the custodian named in Exhibit B (the "Custodian"). The
Account will be subject to any applicable custodial or trust agreements
from time to time entered into and/or amended by Client. Fees of the
Custodian shall be paid by Client and are not included in the fee
schedules set forth in Exhibit ▇. ▇▇▇ shall not be liable for any act or
omission of the Custodian, including, without limitation, the accuracy of
Custodian's records with respect to the Account and Client agrees not to
hold CAI liable for any errors, omissions or actions taken by the
Custodian, except for actions properly executed per instructions of CAI.
CAI will charge Client custodial fees for assets of Client currently held
in custody by CAI or its affiliates at the incremental cost that the
Custodian would charge Client for custody of such assets, it being
understood, that CAI and its affiliates are under no obligation to
continue to hold such assets in custody and Client may instruct CAI to
deliver such assets to Client or Client's Custodian at any time.
Client grants CAI full authorization to issue such instructions to, and
engage in such transactions with, the Custodian as CAI reasonably
determines to be appropriate in connection with the management of the
Account. Client will instruct the Custodian to follow CAI's instructions
to make and to accept payments for, and to deliver for value or receive
securities, cash or other investments purchased, sold, redeemed,
exchanged, pledged or loaned for the Account. Client will also instruct
the Custodian to send Client and CAI monthly statements showing the
securities, cash and other investments in and all transactions for the
Account during such month.
Client will not change or add another custodian without giving CAI at
least 60 days' prior written notice of its intention to do so together
with the name and other relevant information with respect to the new
custodian. CAI and Client shall separately agree upon compensation, if
any, to be paid to CAI for its assistance in connection with any
transition to a new custodian.
The Chief Financial Officer of Citigroup Investments and Chief Investment
Officer of CAI will furnish to Client on a quarterly basis, a
certification in connection with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and related
Securities and Exchange Commission ("SEC") regulations that to the best of
their knowledge, with respect to information originating from, or related
to, the investment portfolio of Client, the information supplied by CAI
and contained in the periodic SEC filings of Travelers Property Casualty
Corp. ("TPC") concerning or
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related to the investment portfolio of Client, is true, correct and
accurate in all material respects. Upon mutual agreement, such agreement
not to be unreasonably withheld, the Chief Financial Officer of Citigroup
Investments and Chief Investment Officer of CAI will provide appropriate
representations to TPC concerning the foregoing and in connection with
TPC's SEC certification requirements consistent with past practice. This
certification will be provided in addition to the representation letters
that have been and will continue to be provided by CAI or Citigroup
Investments periodically consistent with past practice.
3. BROKERAGE TRANSACTIONS -- AUTHORIZATION
Unless otherwise instructed by Client, CAI, in its sole discretion, may
effect transactions through or with affiliated brokers or dealers. In
choosing a broker or dealer to execute a transaction, CAI and such third
parties whom it employs to render investment services or other services
pursuant to Section 13 hereof , shall seek to obtain the best price and
execution considering all circumstances, it being understood that CAI and
such third parties shall consider the full range and quality of a broker's
or dealer's services including, among other things, the value of research
provided, execution capability, commission rate, financial responsibility,
responsiveness, reputation and access to the markets for securities being
traded for the Account. Subject to obtaining best prices and execution,
CAI and such third parties may select broker-dealers that provide research
or other transaction-related services and may cause Client to pay such
broker-dealers commissions for effecting transactions in excess of
commissions other broker-dealers may have charged. Such research and other
services may be used for other client accounts to the extent permitted by
law.
CAI and such third parties may, but are not required to, aggregate sales
and purchase orders placed with respect to the Account with similar orders
being made simultaneously for other accounts managed by CAI or such third
parties or their affiliates, if in such person's sole judgment such
aggregation shall result in an overall economic benefit to Client, taking
into consideration the selling or purchase price, brokerage commission and
other expenses. Client acknowledges that the determination of any such
economic benefit is subjective and represents such person's evaluation at
the time that Client will be benefited by relatively better purchase or
sales prices, lower commission expenses and beneficial timing of
transactions or a combination of these and other factors. When aggregate
sales or purchase orders occur, the objective of CAI or such third parties
(and any of their affiliates involved in such transactions) shall be to
allocate the executions among the accounts in a manner believed by such
person to be fair and equitable for all accounts involved.
Client hereby grants CAI and such third parties the authority to effect
agency cross transactions for the Account with affiliated brokers or
dealers. An agency cross transaction is a transaction in which a person
acts as an investment adviser in relation to a transaction in which such
investment adviser, or any person controlling, controlled by or under
common control with such investment adviser, acts as broker for both such
advisory client and for another person on the other side of the
transaction. Client acknowledges that such person's affiliates may receive
compensation from the other party to such transactions (the amount of
which may vary) and that due to the receipt of such compensation the
affiliate will have a potentially conflicting division of loyalties and
responsibilities. The consent to agency cross transactions contained
herein can be revoked at any time by written notice to CAI in accordance
with Section 17 hereof. Notwithstanding any other provisions hereof,
Client shall have the right to audit execution and the cost thereof.
Client hereby also grants CAI and such third parties the authority to the
extent permitted by law to effect principal transactions in publicly
traded securities or Rule 144A securities for the Account with affiliated
brokers or dealers. Such affiliated brokers will charge Client fees for
the brokerage services, thereby increasing overall revenues to such
person's parent corporation. Prior to the settlement of each principal
transaction in publicly traded securities or Rule 144A securities, CAI
will provide written notice to Client's designee of the transaction. Such
notice shall state that the transaction was effected on a principal basis
at market price, in accordance with CAI's written procedures for such
transactions, describe the terms of the transaction, state that Client may
object to the transaction before noon of the next trading day, and
describe a process by which Client can make such objection. Client
acknowledges and agrees that unless Client raises an objection before noon
of the next trading day, Client will be deemed to have consented to each
principal transaction of which Client has been given notice, as described
above.
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Client may direct CAI to effect transactions through a particular broker
or a dealer, other than CAI and its affiliates ("Directed Broker"), by
notifying CAI in writing of such direction in accordance with Section 17
hereof. In the event that Client directs CAI to utilize a Directed Broker,
Client acknowledges that (i) Client will be charged a commission rate that
Client has negotiated with the Directed Broker, and that CAI will not
negotiate commissions on Client's behalf, which may result in a disparity
between commissions charged to the Account and the accounts of other CAI
clients, (ii) CAI may not be in a position to monitor for best price and
execution of Client's transactions, and (iii) Client may forego benefits
that CAI may be able to obtain for its other clients through, for example,
negotiating volume price discounts for block trades. In connection with
Client's selection of a Directed Broker, Client agrees that CAI will not
be required to effect any transaction through the Directed Broker if CAI
reasonably believes that to do so may result in a breach of its fiduciary
duties.
Pursuant to the provisions of Section 11(a) of the Securities Exchange Act
of 1934, certain transactions effected by an affiliate for certain clients
on a national or regional securities exchange may be executed with the
affiliate only upon receipt of Client's consent. Client specifically
consents, in the absence of contrary instructions, to the affiliate,
acting as a broker for the Account and in connection therewith retaining
compensation as payable hereunder. In no event will CAI or such third
parties or their affiliates be obligated to effect any transactions for
Client which they believe would violate any applicable state or federal
law, rule or regulation, or of the rules or regulations of any regulatory
or self-regulatory body. CAI shall furnish to Client at least quarterly a
statement setting forth the total amount of commissions and markups
retained by its affiliates in connection with effecting transactions as a
broker or dealer for the Account during the period covered by the
statement.
4. SERVICES TO OTHER CLIENTS; NON-PUBLIC INFORMATION
It is understood that CAI and its affiliates perform, among other things,
investment banking, lending, research, brokerage and investment advisory
services for persons other than Client. Client recognizes that CAI or its
affiliates may provide investment management services to other clients,
regardless of whether the investment policies of such clients are similar
to, or differ from, those that CAI hereby undertakes to perform on behalf
of Client. In addition, CAI or its affiliates may give advice and take
action in the performance of their duties to clients that may differ from
advice given, or the timing and nature of action taken, with respect to
the Account. Nothing in this Agreement shall be deemed to impose upon CAI
any obligation to purchase or sell or recommend for purchase or sale for
the Account any security or other property that CAI or its affiliates may
purchase or sell, or recommend for purchase or sale, for its own account
or the account of any other client. CAI or its affiliates may receive fees
for services rendered to the issuer of any securities. Where there is a
limited supply of a security, CAI will use its reasonable best efforts to
allocate or rotate investment opportunities among all applicable accounts
and clients in an equitable manner.
By reason of investment banking, investment, lending and other activities,
CAI or its affiliates may from time to time acquire privileged and/or
confidential information about corporations or other entities and their
securities. Client recognizes that CAI or its affiliates will not be free
to divulge such information to Client or to act upon it.
5. CLIENT AUTHORITY
The signatory on behalf of such Client represents that the execution of
this Agreement has been duly authorized by appropriate corporate action.
Client undertakes to advise CAI of any event that might affect the
authority or validity of this Agreement. Client warrants that (i) it has
been duly incorporated and is validly existing under the laws of the State
of Delaware, (ii) it has full power and authority to execute, deliver and
perform this Agreement and its obligations thereunder, (iii) this
Agreement has been duly authorized, executed and delivered and constitutes
a legal, valid and binding obligation of Client, enforceable against it in
accordance
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with its terms except that enforceability thereof may be subject to
bankruptcy, insolvency, reorganization or other similar laws relating to
creditors' rights and general principles of equity, and (iv) to the
knowledge of Client, any securities delivered are free of any
encumbrances, claims or restrictions, including constructive liens.
6. FEES
In consideration of the performance of the obligations of CAI hereunder,
Client shall pay CAI the fees set forth on EXHIBIT C in immediately
available funds. The fee for any period less than a calendar month shall
be reduced pro rata based on the number of days during such month that CAI
managed the Account.
In computing the fair market value of any security or other investment in
the Account, a security or other instrument traded on a market providing
contemporaneous actual transaction prices shall be valued, as of the
valuation date, at the closing price on the market on which the security
principally trades, provided that the security or instrument was actually
traded on such date, trading was not suspended in that security on that
date and the closing price was within the bid/ask range or within the
bid/ask of at least three market makers (or such lesser number if there
are fewer than three market makers). Any other security or investment in
the Account shall be valued in a manner determined in good faith by CAI
(or any person to whom it has delegated such responsibility) to reflect
fair market value in accordance with generally accepted valuation
principles. Any such valuation should not be considered a guarantee of any
kind whatsoever with respect to the value of the assets in the Account. In
the event of any dispute between Client and CAI as to valuation or
calculation of fees hereunder, Client or CAI may request a valuation by an
independent investment banker or appraiser selected by mutual agreement of
Client and CAI for purposes of calculating the fees and valuation no more
frequently than once per calendar year. The fees and expenses of such
banker or appraiser shall be borne equally by Client and CAI and the
determination of such banker or appraiser shall be binding upon Client and
CAI for purposes of this Agreement.
7. RECORDS; CONFIDENTIALITY
CAI shall maintain complete and accurate accounts and records relating to
all services performed hereunder and such additional information as Client
may reasonably request for purposes of its internal bookkeeping and
accounting operations, and such accounts, records and information shall be
accessible for audit, inspection and copying by a representative of Client
(including professional advisers and regulators) during normal business
hours and upon reasonable advance notice to CAI. In addition, all books,
records and files established and maintained by CAI by reason of
performance of this Agreement which, absent this Agreement, would have
been held by Client, shall be deemed the property of Client and shall be
delivered to Client upon the termination hereof. CAI shall, and shall
cause its affiliates to, keep confidential any and all information
obtained in connection with the services rendered hereunder and shall not,
and shall cause its affiliates not to, disclose any such information to
any person except (i) with the prior written consent of Client, (ii) as
required by law, regulation, court order or the rules or regulation of any
self-regulating organization, body or official having jurisdiction over
CAI or any of its affiliates, as applicable, provided that CAI shall first
give prompt notice to Client of such a requirement so that Client may seek
a protective order or other appropriate remedy (at its sole expense),
(iii) to its professional advisers who have a need to know such
information in their capacity as an adviser and who have agreed to keep
such information confidential, (iv) such information as shall have been
publicly disclosed other than in violation of this Agreement, (v) such
information as was or is obtained by CAI on a non-confidential basis,
provided that CAI does not know or have reason to know of any breach by
such source of any confidentiality obligations with respect thereto, (vi)
such information relating to an asset or investment, to participants or
other investors in the respective asset or investment, and (vii) such
information relating to an asset or investment, to potential purchasers
who have expressed an interest in buying such asset or investment and have
executed a confidentiality agreement. Subject to the foregoing exceptions,
Client and its affiliates shall treat all proprietary recommendations and
advice furnished to Client by CAI and/or any person as confidential;
provided, however, that nothing herein shall prevent Client from
disclosing Client's investment holdings, asset allocation and general
investment strategy. Except as expressly provided herein, and subject to
Client's audit rights hereunder, Client shall not be entitled to any cost
information of CAI
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in rendering its services hereunder, other than information relating to
costs that are passed through and borne by Client under this Agreement
8. DISCRETIONARY TRADING AUTHORIZATION
Client hereby appoints CAI from and after the date hereof as Client's
agent and attorney-in-fact with power and discretionary trading
authorization, pursuant to and subject to this Agreement and the
Investment Guidelines to (i) buy and sell securities and other instruments
and investments for the Account and at Client's risk through or with
brokers or dealers, including its affiliates, (ii) enter into and execute
any agreements, documents or instruments, and (iii) open (and take any
action in respect of) any bank account or trading account, in each case,
as CAI in its sole discretion deems appropriate, subject to the provisions
of this Agreement and applicable law.
9. TAX STATUS/WITHHOLDING TAX
Client shall provide CAI with information as to its U.S., Canada and
United Kingdom tax status as reasonably requested by CAI from time to
time. Client may be required from time to time to file such proof of
taxpayer status or residence, to execute such certificates and to make
such representations and warranties, or to provide any other information
or documents, as CAI may deem necessary or proper to fulfill its
obligations under applicable law. Client shall provide CAI, in a timely
manner, with copies of originals if necessary and appropriate, of any such
proofs of residence, taxpayer status, beneficial ownership and any other
information or documents which CAI may reasonably request and that Client
is legally able to deliver.
If any tax or other governmental charge or assessment shall become payable
with respect to any payment due to Client ("Taxes"), such Taxes shall be
withheld from such payment, if necessary, in accordance with applicable
law. CAI shall give notice to Client in connection with any new bank or
brokerage account of Client of any withholding obligations and shall allow
Client a reasonable period of time to provide any information or documents
that will permit such payment to Client to be made without such
withholding. To the extent withholding is required, CAI may withhold any
interest, any dividends or other distributions or securities or property
receivable in respect of the Account's assets, proceeds from the sale or
distribution of the Account's assets ("Payments"), or may sell for the
Account any part thereof or all of the Account's assets, and may apply
such Payment in satisfaction of such Taxes, Client remaining liable for
any deficiency. If any Taxes shall become payable with respect to any
payment made to Client by CAI in a prior year for which CAI or any
affiliate may be liable, CAI may withhold payments in satisfaction of such
prior year's Taxes. Client will indemnify and hold harmless CAI, any of
such third parties to whom it has delegated any responsibilities
hereunder, their affiliates and each of their respective directors,
partners, officers, members, employees, agents and advisers against any
Taxes, penalties, additions to tax, and interest, and costs and expense
related thereto, arising out of claims against CAI or any such third party
by any governmental authority or third party for failure to withhold Taxes
to the extent that such failure to withhold Taxes is as a result of
instructions from Client or the action or inaction of Client.
10. GOVERNING LAW
Client agrees that this Agreement and all of the terms herein shall be
governed and construed in accordance with the laws of the State of New
York without giving effect to principles of conflict of laws.
11 CONTRACT TERMINATION
This Agreement shall have a term commencing as of April 1, 2002 and ending
on March 31, 2004. Either CAI or Client may terminate this Agreement as of
the last day of any calendar month upon not less than three months' prior
written notice to the other party hereunder. In no event may either party
terminate this Agreement pursuant to the preceding sentence effective
prior to March 31, 2003. Notwithstanding the foregoing, this Agreement may
be terminated by Client upon 60 days' prior written notice in the event
CAI
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ceases to be a majority-owned subsidiary of Citigroup Inc. Any termination
will not affect the liabilities or obligations of the parties under this
Agreement arising from transactions initiated prior to such termination.
Without limiting the foregoing, no amendment, supplement or termination of
this Agreement shall prevent the fulfillment by CAI or any third party to
whom it has delegated any of its responsibilities hereunder of any binding
commitment made by it in respect of the Account's assets before the
effective date of such amendment, supplement or termination. Upon
termination of this Agreement, CAI shall be under no obligation to render
investment advice with regard to the securities or other investments held
in the Account. Following termination of this Agreement for any reason,
CAI shall continue to provide such information and reports related to the
Account as may be reasonably necessary for Client to meet its financial
and regulatory reporting obligations under applicable law for investment
activity in respect of the Account for periods prior to termination of
such Agreement and shall transfer to Client all investment records
maintained by CAI or its affiliates related to the Account. CAI and Client
shall cooperate in the transition of administrative and investment
services from CAI to the new service provider(s). Client and CAI shall use
reasonable best efforts to effect the transition of any administrative
services prior to the termination of this Agreement. However, to the
extent that any such services have not been transitioned to a new service
provider(s) prior to such termination, CAI will continue to provide such
administrative services at fair market value and for such time period as
mutually agreed. Such post termination services will only be provided
until the service has transitioned and both parties agree to transition
such services as promptly as practicable. As part of the transition,
software will be transferred and/or licensed consistent with the terms of
the Intercompany Agreement and consistent with the terms of third party
agreements.
12. PROXIES AND OTHER LEGAL NOTICES
Except to the extent otherwise instructed in writing by Client, in the
ordinary course of business CAI shall be responsible for voting proxies
solicited by, or with respect to, the issuers of any securities,
investments or instruments held in the Account. Without limiting the
foregoing, except to the extent otherwise instructed in writing by Client,
including as specifically set forth in the Investment Guidelines, CAI
shall be empowered and authorized to take any action with respect to
Client's exercise of any rights in the ordinary course (including voting
rights, tender rights and rights arising in connection with the bankruptcy
and insolvency of an issuer or borrower, or the consensual or non-judicial
restructuring of the debt or equity of an issuer or borrower) or remedies
in connection with any securities, assets, investments or instruments held
in the Account. In all other cases, CAI shall obtain the prior approval of
Client before exercising Client's rights on Client's behalf.
13. LIMITATION ON LIABILITY; DELEGATION
In providing services hereunder, CAI may employ third parties, including
its affiliates, to render investment advice and to provide other services;
provided, however, that CAI shall not be relieved of any of its duties
hereunder as a result of the employment of such third parties. CAI and
such third parties to whom it has delegated any of its responsibilities
hereunder assume no responsibility or liability under this Agreement other
than to render the services specified herein, except to the extent
provided below. None of CAI or any of such third parties or their
respective affiliates and any of their respective directors, partners,
members, officers, shareholders, employees, agent and advisers shall have
any liability to Client or its affiliates for any error of judgment,
mistake, or for any loss, claim, damages, judgment, assessment, cost or
other liability arising out of any investment or the Account, or for any
other act or omission in the performance of its obligations to Client, or
for any act of Client in following or declining to follow any direction of
CAI or any of such third parties, except for liability to which CAI or
such third party would be subject by reason of willful misfeasance, fraud,
bad faith, negligence or reckless disregard of its duties and obligations
hereunder, violation of applicable law or breach of this Agreement. The
federal securities laws impose liabilities under certain circumstances on
persons who act in good faith, and therefore, nothing contained herein
shall in any way constitute a waiver or limitation of any rights which
Client may have under applicable securities laws. Neither CAI nor any of
such third parties or their respective affiliates shall be liable for any
consequential damages hereunder.
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Client shall indemnify CAI and such third parties and their affiliates and
each of their respective directors, partners, members, officers,
shareholders, employees, agents and advisers against any claims which may
be made against such persons by third parties and any damages, claims,
losses, costs or expenses (including all legal and other expenses
reasonably incurred by such persons) or other liabilities which such
persons may incur as a result of, or in connection with any act or
omission related to the performance by or on behalf of CAI and/or such
third party of its obligations and services under this Agreement, except
to the extent that the same is directly attributable to the negligence,
willful misfeasance, fraud or bad faith of such persons or the reckless
disregard of such persons' duties hereunder, or violation of applicable
law or breach of this Agreement.
14. CLIENT DIRECTIONS
The names of each individual who is authorized to give directions to CAI
on Client's behalf under this Agreement are set forth on EXHIBIT D. Client
agrees to inform CAI in writing of any change to that list in accordance
with Section 17 hereof.
15. NO PARTNERSHIP OR JOINT VENTURE
Client and CAI are not partners or joint venturers with each other and
nothing herein shall be construed to make them such partners or joint
venturers or impose any liability as such on any of them. CAI's relation
to Client shall be deemed to be that of an independent contractor.
16. SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of and be binding upon the
successors to the parties hereto. No assignment (as that term is used in
the Investment Advisers Act of 1940 and the rules thereunder) of this
Agreement, in whole or in part, may be made by CAI without the consent of
Client, it being understood that CAI may transfer its rights and
obligations under this Agreement to any Citigroup wholly-owned subsidiary,
affiliate or successor by merger or consolidation or otherwise if such
transaction does not constitute an "assignment" for purposes of the
Investment Advisers Act of 1940 and the rules thereunder. No assignment of
this Agreement, in whole or in part, may be made by Client without the
prior written consent of CAI. Any purported assignment of this Agreement
in violation of this Section 16 shall be null and void.
17. NOTICES
Any notice under this Agreement shall be in writing and sent by facsimile,
hand delivery, overnight or express delivery or certified mail, postage
prepaid, return receipt requested to the other party as such other party
may designate for the receipt of such notice. Until further written notice
by Client to the other parties hereto, it is agreed that the address of
Client for this purpose shall be:
Travelers Insurance Group Holdings Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
With a copy to the General Counsel
CAI's address for this purpose shall be:
Citigroup Alternative Investments Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Investment Officer
8
With a copy to the General Counsel
To the extent any notice or other instruction under this Agreement is not
delivered in compliance with this Section, it shall be null and void for
purposes of this Agreement unless such notice was actually received by the
intended recipient.
18. MISCELLANEOUS
a. Not less than 48 hours prior to the date hereof, CAI shall
deliver to Client a copy of CAI's Form ADV, Part II and upon receipt
Client shall acknowledge the same in writing to CAI.
b. This Agreement (including the exhibits thereto) represents the
entire agreement among the parties with respect to the services described
herein. Except as otherwise provided herein, this Agreement may not be
modified or amended except by a writing signed by the parties hereto. This
Agreement supersedes all previous agreements and understandings between
the parties hereto with respect to the subject matter hereof.
▇. ▇▇▇ represents and warrants that this Agreement has been duly
authorized, executed and delivered and is a valid and binding obligation
of CAI. CAI also represents that it is registered as an investment adviser
under the Investment Advisers Act of 1940. CAI makes no representation or
warranty as to the success of the investment strategies or securities or
other investments recommended by CAI to Client. Poor investment
performance shall not be deemed negligence.
d. The provisions of this Agreement shall be deemed to be severable.
Paragraph headings are for convenience of reference only and do not form a
part of this Agreement. If any provision of this Agreement is found to
violate any statute, regulation, rule, order or decree of any governmental
authority, court, agency or exchange, such invalidity shall not be deemed
to affect any other provision hereof or the validity of the remainder of
this Agreement, and such invalid provision shall be deemed deleted
herefrom to the minimum extent necessary to cure such violation. To the
extent that any such provision is so held to be invalid, illegal or
unenforceable, Client and CAI shall in good faith use their reasonable
best efforts to find and effect an alternative means to achieve the same
or substantially the same result as that contemplated by such provision.
▇. ▇▇▇ and Client each reserve the right to refuse to renew this
Agreement in its sole discretion and for any reason.
f. This Agreement may be executed in any number of counterparts, all
of which together shall constitute a single instrument.
g. Any dispute relating to this Agreement shall resolved in the
manner provided for in the Intercompany Agreement.
Dated: August 6, 2002
TRAVELERS INSURANCE GROUP HOLDINGS INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
ACCEPTED BY
CITIGROUP ALTERNATIVE INVESTMENTS LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
Date of Acceptance: August 6, 2002
9
