1
EXHIBIT 5(dd)
FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
ENTERED INTO BETWEEN
TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY, INC.
AND
THE TRAVELERS INVESTMENT MANAGEMENT COMPANY
This Investment Sub-Advisory Agreement (the "Agreement") is entered
into as of ______ __, 1998, by and between Travelers Asset Management
International Corporation, a corporation duly organized and existing under the
laws of the state of New York ("TAMIC"), and The Travelers Investment
Management Company, a corporation duly organized and existing under the laws
of the state of Connecticut (the "Sub-Adviser").
WHEREAS, TAMIC has entered into an Investment Advisory Agreement dated
_______ ___, 1998, (the "Investment Advisory Agreement") with The Travelers
Series Trust (a Massachusetts business trust, hereinafter referred to as the
"Trust"). A copy of such agreement is attached as Exhibit A hereto, pursuant
to which TAMIC provides investment management and advisory services to the
Trust; and
WHEREAS, the Investment Advisory Agreement provides that TAMIC may
engage a duly organized sub-adviser, to furnish investment information,
services and advice to assist TAMIC in carrying out its responsibilities under
the Investment Advisory Agreement; and
WHEREAS, TAMIC desires to retain Sub-Adviser to render investment
advisory services to TAMIC in the manner and on the terms set forth in this
Agreement, and the Sub-Adviser desires to provide such investment advisory
services.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, TAMIC and Sub-Adviser agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF TAMIC
TAMIC represents and warrants to the Sub-Adviser as follows:
a. TAMIC is registered with the SEC as an investment adviser
under the Advisers Act;
b. TAMIC is registered and licensed as an investment adviser
under the laws of all jurisdictions in which its activities
require it to be so licensed, except in such jurisdictions
where the failure to be so licensed would not have a
material effect on its business;
c. TAMIC is a corporation duly organized and validly existing
under the laws of the State of New York with the power to
own and possess its assets and carry on its business as it
is now being conducted;
2
d. The execution, delivery and performance by TAMIC of this
Agreement are within TAMIC's powers and have been duly
authorized by all necessary action on the part of its
directors, 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 Articles of Incorporation or
By-Laws, or (iii) any agreement, judgment, injunction,
order, decree or other instruments binding upon TAMIC;
e. This Agreement is a valid and binding Agreement of TAMIC;
f. TAMIC has provided the Sub-Adviser with a copy of its Form
ADV as most recently filed with the SEC and will, within a
reasonable time after filing any amendment to its Form ADV
with the SEC, furnish a copy of such amendments to the
Sub-Adviser. The information contained in TAMIC'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 this they were made, not misleading;
g. TAMIC acknowledges that it received a copy of the
Sub-Adviser'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; and
2. REPRESENTATIONS AND WARRANTIES OF SUB-ADVISER
The Sub-Adviser hereby represents and warrants to TAMIC that:
a. The Sub-Adviser is registered with the SEC as an investment
adviser under the Advisers Act;
b. The Sub-Adviser 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,
except where the failure to be so licensed would not have a
material adverse effect on its business;
c. The Sub-Adviser is a business trust duly organized and
validly existing under the laws of the State of Delaware
with the power to own and possess its assets and carry on
its business as it is now being conducted;
d. The execution, delivery and performance by the Sub-Adviser
of this Agreement are within the Sub-Adviser's powers and
have been duly authorized by all necessary action on the
part of its 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 Sub-Adviser 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 Sub-Adviser's Articles of
Incorporation or By-Laws, or (iii) any agreement,
2
3
judgment, injunction, order, decree or other instruments
binding upon the Sub-Adviser;
e. This Agreement is a valid and binding Agreement of the
Sub-Adviser;
f. The Sub-Adviser 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 the Sub-Adviser. The
information contained in the Sub-Adviser'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. The Sub-Adviser acknowledges that it received a copy of
TAMIC's Form ADV at least 48 hours prior to the execution of
this Agreement.
3. INVESTMENT DESCRIPTION APPOINTMENT
The Trust, which is divided into segments including the segment
known as the Disciplined Small Cap Stock Portfolio ( the "Portfolio") desires
to employ its capital relating to the Portfolio by investing and reinvesting in
investments of the kind and in accordance with the investment(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-1A, as amended or supplemented from time to time, and in the manner and to
the extent as may from time to time be approved by the Board of Trustees of the
Trust (the "Board"). TAMIC will supply copies of the Prospectus and the SAI to
the Sub-Adviser promptly after the Trust's Registration Statement is declared
effective. TAMIC agrees promptly to provide copies of all amendments and
supplements to the current Prospectus and the SAI, and copies of any procedures
adopted by the Board applicable to the Sub-Adviser and any amendments thereto
(the "Board Procedures"), to the Sub-Adviser on an on-going basis. Until TAMIC
delivers any such amendment or supplement or Board Procedures, the Sub-Adviser
shall be fully protected in relying on the Prospectus and SAI and any Board
Procedures, if any, as previously furnished to the Sub-Adviser. In addition,
TAMIC shall furnish the Sub-Adviser with a certified copy of any financial
statement or report prepared for the Trust with respect to the Portfolio by
certified or independent public accountants, and with copies of any financial
statements or reports made by the Trust to shareholders or to any state or
federal regulatory agency. TAMIC shall also inform the Sub-Adviser of the
results of any audits or examinations by regulatory authorities pertaining to
the Portfolio. TAMIC further agrees to furnish the Sub-Adviser with any
materials or information that the Sub-Adviser may reasonably request to enable
it to perform its functions under this Agreement.
TAMIC and the Trust desire to employ and hereby appoint the
Sub-Adviser to act as the sub-investment adviser to the Portfolio. Subject to
the terms and conditions of this Agreement, Sub-Adviser accepts the appointment
and agrees to furnish the services for the compensation and for the term set
forth below. Except as specified herein, the Sub-Adviser 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.
3
4
4
5
4. SERVICES AS SUB-ADVISER
Subject to the supervision, direction and approval of the
Board and TAMIC, the Sub-Adviser shall conduct a continual program of
investment, evaluation and, if appropriate in its view, the sale and
reinvestment of the Portfolio's assets. The Sub-Adviser is authorized, in its
sole discretion and without prior consultation with TAMIC, to: (a) obtain and
evaluate pertinent economic, financial, and other information affecting the
economy generally and certain companies as such information relates to
securities which are purchased for or considered for purchase in the Portfolio;
(b) manage the Portfolio's assets in accordance with the Portfolio's investment
objective(s) and policies as stated in the Prospectus and the SAI; (c) make
investment decisions for the Portfolio; (d) place purchase and sale orders for
portfolio transactions on behalf of the Portfolio and manage otherwise
uninvested cash assets of the Portfolio; (e) price such Portfolio securities as
TAMIC and Sub-Adviser shall mutually agree upon from time to time; (f) execute
account documentation, agreements, contracts and other documents as the
Sub-Adviser shall be requested by brokers, dealers, counterparties and other
persons in connection with its management of the assets of the Portfolio (in
such respect, and only for this limited purpose, the Sub-Adviser shall act as
TAMIC's and the Trust's agent and attorney-in-fact); (g) employ professional
portfolio managers and securities analysts who provide research services to the
Portfolio; and (h) regularly report to TAMIC and to the Board with respect to
its subadvisory activities. The Sub-Adviser shall execute trades, and in
general take such action as is appropriate to effectively manage the
Portfolio's investment practices.
In addition, (i) the Sub-Adviser shall furnish TAMIC daily
information concerning portfolio transactions and quarterly and annual reports
concerning transactions and performance of the Portfolio in such form as may be
mutually agreed upon, and the Sub-Adviser agrees to review the Portfolio and
discuss the management of it with TAMIC and Board as either or both shall from
time to time reasonably request.
(ii) Unless TAMIC gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a manner which
it reasonably believes best serves the interests of the Portfolio's
shareholders to vote or abstain from voting all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio may be
invested.
(iii) The Sub-Adviser shall maintain and preserve such records
related to the Portfolio's transactions as are required under any applicable
state or federal securities law or regulation including: the Investment
Company Act of 1940, as amended (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 shall maintain and preserve all books
and other records not related to the Portfolio's transactions as required under
such rules. The Sub-Adviser shall timely furnish to TAMIC all information
relating to the Sub-Adviser's services hereunder reasonably requested by TAMIC
to keep and preserve the books and records of the Trust. The Sub-Adviser
agrees that all records which it maintains for the Portfolio are the property
of the Trust and the Sub-Adviser will surrender promptly to the Trust copies of
any of such records.
5
6
(iv) The Sub-Adviser shall maintain compliance procedures for the
Portfolio that it reasonably believes are adequate to ensure the Portfolio's
compliance with: (i) the 1940 Act and the rules and regulations promulgated
thereunder; and (ii) the Portfolio's investment objective(s) and policies as
stated in the Prospectus and SAI. The Sub-Adviser shall notify TAMIC
immediately upon detection of any material breach of such compliance
procedures. The Sub-Adviser shall maintain compliance procedures that it
reasonably believes are adequate to ensure its compliance with the Investment
Advisers Act of 1940.
(v) The Sub-Adviser shall maintain a written code of ethics (the
"Code of Ethics") that it reasonably believes complies with the requirements of
Rule 17j-1 under the 1940 Act, a copy of which it will provide to TAMIC or
Trust upon any reasonable request. The Sub-Adviser shall follow such Code of
Ethics in performing its services under this Agreement. Further, the
Sub-Adviser represents that it has policies and procedures regarding the
detection and prevention of the misuse of material, nonpublic information by
the Sub-Adviser and its employees as required by the Xxxxxxx Xxxxxxx and
Securities Fraud Enforcement Act of 1988.
(vi) The Sub-Adviser shall manage the investment and reinvestment
of the assets of the Portfolio in a manner consistent with the diversification
requirements of Section 817 and Section 851 of the Internal Revenue Code of
1986, as amended (the "IRC"). The Sub-Adviser will also manage the investments
of the Portfolio in a manner consistent with any and all investment
restrictions (including diversification requirements) contained in the 1940
Act, any SEC No-Action Letter or order applicable to the Company, and any
applicable state securities law or regulation.
(viii) The Sub-Adviser shall submit on a quarterly basis to the Board
and TAMIC a written certification detailing any variation from applicable
investment objectives, practices, policies or procedures, or from its Code of
Ethics.
5. BROKERAGE
In selecting brokers or dealers (including, if permitted by
applicable law and appropriate Board Procedures, any broker or dealer
affiliated with either TAMIC or the Sub-Adviser) to execute transactions on
behalf of the Portfolio, the Sub-Adviser will seek the best overall terms
available. In assessing the best overall terms available for any transaction,
the Sub-Adviser will consider factors it deems relevant, including, but not
limited to, the breadth and nature of the market in the security, the price of
the security, the size of the order, the timing of the transaction, the
difficulty of the transaction, the reputation, experience, financial condition
and execution capability of the broker or dealer, the quality of the service
and the reasonableness of the commission, if any, for the specific transaction
and on a continuing basis. In selecting brokers or dealers to execute a
particular transaction, and in evaluating the best overall terms available, the
Sub-Adviser is authorized to consider the brokerage and research services (as
those terms are defined in Section 28(e) of the 0000 Xxx) provided to the
Portfolio and/or other accounts over which the Sub-Adviser or its affiliates
exercise investment discretion. Nothing in this paragraph shall be deemed to
prohibit the Sub-Adviser from paying an amount of commission for effecting a
securities transaction in excess of the amount of commission another
6
7
member of an exchange, broker, or dealer would have charged for effecting that
transaction, if the Sub-Adviser determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such member, broker, or dealer, viewed in terms
of either that particular transaction or its overall responsibilities with
respect to the Portfolio and/or other accounts over which the Sub-Adviser or
its affiliate exercise investment discretion.
To the extent consistent with the applicable law, Sub-Adviser may
aggregate purchase or sell orders for the Portfolio with contemporaneous
purchase or sell orders of other clients of Sub-Adviser or its affiliated
persons. In such event, allocation of Securities so purchased or sold, as well
as the expenses incurred in the transaction, will be made by Sub-Adviser in the
manner Sub-Adviser considers to be the most equitable and consistent with its
and its affiliates' fiduciary obligations to the Portfolio and to such other
clients. TAMIC hereby acknowledges that such aggregations of orders may not
result in a more favorable price or lower brokerage commissions in all
instances.
6. INFORMATION AND REPORTS
(a) TAMIC will provide Sub-Adviser with a list, to the best of
TAMIC's knowledge, of all affiliated persons of TAMIC (and
any affiliated person of such an affiliated person) and will
promptly update the list whenever TAMIC becomes aware of any
additional affiliated persons.
(b) The Sub-Adviser will maintain books and records relating to
its management of the Portfolio under its customary
procedures and in compliance with applicable regulations
under the 1940 Act and the Advisers Act. Sub-Adviser will
permit TAMIC to inspect such books and records at all
reasonable times during normal business hours, upon
reasonable notice. Sub-Adviser agrees that all records
which it maintains for the Portfolio are the property of the
Trust and Sub-Adviser will surrender promptly to the Trust
copies of any such records upon request by the Trust or
TAMIC.
(c) Prior to each Board meeting, Sub-Adviser will provide TAMIC
and the Board with reports regarding its management of the
Portfolio during the interim period, in such form as may be
mutually agreed upon by Sub-Adviser and TAMIC. Sub-Adviser
will also provide TAMIC with any information regarding its
management of the Portfolio required for any Board Meeting,
any shareholder report, amended registration statement or
prospectus supplement filed by the Portfolio with the SEC.
Sub-Adviser will submit on a quarterly basis to the Board
and TAMIC a written certification detailing any variation
from applicable investment policies or procedure, or from
its Code of Ethics.
7
8
7. COMPENSATION
In consideration of the services rendered pursuant to this
Agreement, TAMIC will pay the Sub-Adviser an annual fee calculated at the rate
of .40% of the Portfolio's average daily net assets. These fees are calculated
daily and paid monthly. The Sub-Adviser 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 Sub-Adviser, 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.
8. EXPENSES
The Sub-Adviser shall bear all expenses in connection with the
performance of its services under this Agreement. In no event will the
Sub-Adviser bear brokerage costs, custodian fees, auditors fees or other
expenses to be borne by the Portfolio or the Trust. The Portfolio 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 other than those
who are "interested persons" of the Trust, TAMIC, the Sub-Adviser; (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
obligations that the Portfolio may have to indemnify the Trust's trustees,
officers and/or employees or agents with respect thereto. The Portfolio shall
assume all other expenses not specifically assumed by the Sub-Adviser or by
TAMIC under the Investment Advisory Agreement entered into between TAMIC and
the Trust.
9. STANDARD OF CARE
The Sub-Adviser shall exercise 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. Neither the
Sub-Adviser nor its officers, directors, employees, agents,
8
9
affiliated person, legal representatives or persons controlled by it
(collectively, the "Related Persons") shall be liable for or subject to any
damages, expenses, or losses in connection with any error of judgment or
mistake of law or for any loss suffered by the Trust, the Portfolio or TAMIC or
any shareholder, director, trustee or officer thereof, 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 the Sub-Adviser
against any liability to TAMIC, the Trust or to the shareholders of the Trust
to which the Sub-Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the performance of
its duties or by reason of the Sub-Adviser's disregard of its obligations and
duties under this Agreement.
10. LIMITATION OF LIABILITY
Except as may otherwise be provided by the 1940 Act or federal
securities laws, neither TAMIC or Sub-Adviser, nor any of their officers,
directors, employees or agent, shall be subject to any liability or subject to
any damages, expenses, or losses in connection with any error of judgment,
mistake of law, or any loss to each other or the Trust 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 if its duties or by reason of reckless disregard of its obligations
and duties under this Agreement. TAMIC shall hold harmless and indemnify
Sub-Adviser against any loss, liability, claim, cost, damage or expense
(including reasonable investigation and defense costs and reasonable attorneys
fees and costs) arising by reason of any matter to which this Agreement relates
unless the Sub-Adviser is negligent in the performance of its duties or it has
reckless disregard of its obligations and duties under this Agreement. The
Sub-Adviser shall hold harmless the Trust and TAMIC for any loss, liability,
cost, damage, or expenses arising from any claim resulting from the
Sub-Adviser's negligence in connection with the performance of its duties or
the reckless disregard of its obligations and duties under this Agreement.
Promptly after receipt by a party seeking to be indemnified under this
Section 10 (the "Indemnified Party") of notice of the commencement of any
action, 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
10 (the "Indemnifying Party"), notify the Indemnifying Party in writing of the
commencement thereof; but 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
9
10
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 by such Indemnified Party in
connection with the defense thereof. 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 it 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
against the Indemnified Party shall be commenced by the Indemnified Party in
connection with this 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 court
costs relating to such proceedings.
The indemnifications provided in this Section 10 shall survive the
termination of this Agreement.
11. 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 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
the Sub-Adviser. This Agreement will also terminate automatically in the event
of its assignment (as defined in the 1940 Act and the rules thereunder).
If the Board of Trustees fails to approve the Agreement or any
continuance of the Agreement, Sub-Adviser will continue to act as investment
subadviser with respect to the Portfolio pending the required approval of the
Agreement or its continuance or of any contract with Sub-Adviser or a different
adviser or subadviser or other definitive action, provided that the
compensation received by Sub-Adviser in respect of such Portfolio during such
period is in compliance with Rule 15a-4 under the Investment Company Act.
12. SERVICES TO OTHER COMPANIES OR ACCOUNTS
TAMIC understands that the Sub-Adviser and its affiliates act,
will continue to act and may act in the future as investment manager or adviser
to fiduciary and other managed accounts, as an investment manager or adviser to
other investment companies, including any offshore entities, or accounts.
TAMIC has no objection to the Sub-Adviser and its affiliates so acting,
provided that whenever the Portfolio and one or more other investment companies
or accounts managed or advised by the Sub-Adviser and its affiliates 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 and account. TAMIC recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for the Portfolio. In
10
11
addition, TAMIC understands that the persons employed by the Sub-Adviser to
assist in the performance of the Sub-Adviser's duties under this Agreement will
not devote their full time to such service and nothing contained in this
Agreement shall be deemed to limit or restrict the right of the Sub-Adviser or
any affiliate of the Sub-Adviser 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 Sub-Adviser 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
Sub-Adviser of its duties and obligations under this Agreement.
13. 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.
14. COMPLIANCE WITH APPLICABLE LAW
The Subadviser agrees to conduct itself in a manner consistent
with applicable laws and regulations, including but not limited to Sections
2a-7, 5(b), 12, 17, 18, and 36 of the 1940 Act. The Subadviser shall 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. The Subadviser 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 any of the Portfolio.
15. MISCELLANEOUS
This Agreement may be signed in one or more counterpart.
Each party to this Agreement represents and warrants that it is
validly existing and taken all necessary action to obtain the requisite
authority to enter into this Agreement and to perform the duties contemplated
herein.
The Trust represents that a copy of the Declaration of Trust is
on file with the Secretary of the Commonwealth of Massachusetts.
This Agreement shall be governed by the laws of the State of
Connecticut.
Each party agrees to comply with all applicable reporting
requirements pursuant to state and federal laws and regulations.
All representations and warranties made by the Sub-Adviser and
TAMIC herein shall survive for the duration of this Agreement and the parties
hereto shall immediately notify,
11
12
but in no event later than five (5) days, each other in writing upon becoming
aware that any of the foregoing representations and warranties are no longer
true.
16. USE OF NAME
The Trust and TAMIC, together with its subsidiaries and
affiliates may use the names "The Travelers Investment Management Company." or
"TIMCO" or any derivative thereof or logo associated therewith in offering
materials of the Portfolio only with the prior approval of the Sub-Adviser and
only for so long as this Agreement or any extension, renewal, or amendment
hereof remains in effect. At such time as this Agreement shall no longer be in
effect, the Trust and TAMIC together with its subsidiaries and affiliates each
agree that they shall cease to use such names or any other name indicating that
it is advised by or otherwise connected with the Sub-Adviser and shall promptly
change its name accordingly. The Trust acknowledges that it has adopted the
name "The Travelers Investment Management Company" or "TIMCO" or any derivative
thereof or logo associated therewith in offering materials of the Portfolio
only with the prior approval of the Sub-Adviser and through permission of the
Sub-Adviser, and agrees that the Sub-Adviser reserves to itself and any
successor to its business the right to grant the non-exclusive right to use the
aforementioned names or any similar names to any other corporation or entity,
including but not limited to any investment company of which the Sub-Adviser or
any subsidiary or affiliate thereof or any successor to the business of any
thereof shall be the investment advisor.
IN WITNESS WHEREOF, the parties hereto have caused this Investment
Sub-Advisory Agreement to be signed by their respective officials thereunto
duly authorized as of the day and year first above written.
Travelers Asset Management International Corporation
By:
--------------------------------------------
Its:
--------------------------------------------
The Travelers Investment Management Company
By:
--------------------------------------------
Its:
--------------------------------------------
12
