ADMINISTRATION AGREEMENT
Western Asset Trust, Inc.
Corporate Securities Portfolio
Mortgage Securities Portfolio
ADMINISTRATION AGREEMENT, made this 30th day of June, 1992, by and
between Western Asset Management Company, a California Corporation, ("Western
Asset"), and Xxxx Xxxxx Fund Adviser, Inc., a Maryland corporation (the
"Administrator"), having its principal place of business at 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, XX 00000.
WHEREAS, Western Asset serves as investment adviser to Western Asset
Trust, Inc. ("Fund"), an open-end, diversified management investment company
which is registered under the Investment Company Act of 1940 ("1940 Act") and
has registered its shares of common stock for sale to the public under the
Securities Act of 1933; and
WHEREAS, the Fund initially has established seven separate portfolios,
two of which are known as the Corporate Securities Portfolio and the Mortgage
Securities Portfolio (referred to herein as the "Portfolios"), and may establish
additional portfolios in the future; and
WHEREAS, Western Asset wishes to retain the Administrator to provide
administrative services to the Fund on behalf of each Portfolio; and
WHEREAS, the Administrator is willing to furnish such services on the
terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. Western Asset hereby appoints Xxxx Xxxxx Fund Adviser, Inc. as
Administrator of each Portfolio for the period and on the terms set forth in
this Agreement. The Administrator accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
2. Western Asset shall at all times keep the Administrator fully
informed with regard to the securities owned by the Portfolios, their funds
available, or to become available, for investment, and generally as to the
condition of their affairs. It shall furnish the Administrator with such other
documents and
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information with regard to the affairs of the Portfolios as the Administrator
may from time to time reasonably request.
3. Services on a Continuing Basis.
(a) Subject always to the control of the Board of Directors of
the Fund (the "Board") and to such policies as the Board may determine, the
Administrator agrees, at its expense, (1) to furnish the management and
administrative services necessary for the operation of each Portfolio and
handling their shareholder relations, including overseeing bookkeeping and
accounting services and the calculation and publication of each Portfolio's net
asset value, providing office space, equipment and facilities, data processing,
internal auditing and clerical services (excluding determination of net asset
value); preparing reports to the Portfolios' shareholders and tax returns;
reports to and filing with governmental bodies; and conducting relations on
behalf of the Fund with custodians, depositories, transfer agents, registrar and
dividend disbursing and reinvestment plan agents, accountants, attorneys,
underwriters, insurers and banks, (ii) to pay all salaries, fees and expenses of
officers and directors of the Fund who are affiliated persons of the
Administrator (except to the extent such persons are employees of the
Corporation's investment adviser), and (iii) to furnish all necessary management
facilities, including salaries of personnel, required for it to execute its
duties faithfully.
(b) The Administrator shall oversee the maintenance of all
books and records required by the Investment Company Act of 1940 and the rules
and regulations thereunder, as well as all other applicable federal and state
laws and regulations. In compliance with the requirements of Rule 31a-3 under
the Investment Company Act of 1940, the Administrator hereby agrees that any
records which it maintains for the Fund are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's
request. The Administrator further agrees to arrange for the preservation of the
records required to be maintained by Rule 31a-1 under the Investment Company Act
of 1940 for the periods prescribed by Rule 31a-2 under said Act.
(c) In the performance of its duties under this Contract, the
Administrator will comply with the provisions of the Articles of Incorporation
and By-laws of the Fund and the stated investment objectives, policies and
restrictions of each Portfolio, and will use its best efforts to safeguard and
promote the welfare of the Fund, and to comply with other policies which the
Board may from time to time determine.
(d) The Administrator shall act as liaison with the Fund's
independent public accountants and shall provide account analyses, fiscal year
summaries, and other audit related schedules. The Administrator shall take all
reasonable action in
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the performance of its obligations under this Agreement to assure that the
necessary information is made available to such accountants for the expression
of their opinion, as such may be required by the Fund from time to time.
4. (a) The Administrator, at its own expense, shall provide a system
whereby information is supplied to shareholders concerning their accounts and
the operation of the Fund. The Administrator shall also provide, at its own
expense, a system whereby orders for purchases and redemption of Portfolio
shares which are received by the Fund or its distributor, Xxxx Xxxxx Xxxx
Xxxxxx, Incorporated, are promptly processed and transmitted to the Fund's
transfer agent. The Administrator may delegate some or all of the functions
specified in this subparagraph to Xxxx Xxxxx Xxxx Xxxxxx, Incorporated or
another appropriate person. The Administrator shall not have the right to use
any list of shareholders of the Fund or any other list of investors which it
obtains in connection with its provisions of services under this Agreement, nor
shall the Administrator sell or knowingly provide such list or lists to any
unaffiliated person.
(b) Other than as specifically indicated in this Agreement, the
Administrator shall not be responsible for the Fund's expenses. Specifically,
the Administrator will not be responsible, except to the extent of the
reasonable compensation of employees of the Fund whose services may be used by
the Administrator hereunder, for any of the following expenses of the Fund,
which expenses shall be borne by the Fund: organizational expenses; legal
expenses; interest; taxes; governmental fees; fees, voluntary assessments and
other expenses incurred in connection with membership in investment company
organizations; the cost (including brokerage commissions or charges, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; distribution fees, if any; fees of custodians, subcustodians,
transfer agents, registrars or other agents for all services to the Fund;
expenses relating to the redemption or repurchase of the Fund's shares; expenses
of registering and qualifying Fund shares for sale under applicable federal and
state law and maintaining such registrations and qualifications; expenses or
preparing, setting in print, printing and distributing prospectuses, proxy
statements, reports, notices, stock certificates and dividends to Fund
shareholders; costs of stationery; costs of stockholders' and other meetings of
the Fund; compensation of officers and directors who are not affiliated persons
of Fund Adviser; fees and expenses of independent auditors; traveling expenses
of directors of the Fund, if any; expenses for fidelity bonds and other
insurance covering the Fund and its officers and directors; costs of
indemnification; and any extraordinary expenses.
(c) The Administrator shall authorize and permit any of its directors,
officers and employees, who may be elected as
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directors or officers of the Fund, to serve in the capacities in which they are
elected, and shall bear their salary or other compensation and expenses, if any.
5. No director, officer or employee of the Fund shall receive from the
Fund any salary or other compensation as such director, officer or employee
while he is at the same time a director, officer or employee of the
Administrator or any affiliated company of the Administrator.
6. As compensation for the services performed and the facilities
furnished and expenses assumed by the Administrator, including the services of
any consultants or agents retained by the Administrator, each Portfolio shall
pay the Administrator, as promptly as possible after the last day of each month,
a fee, calculated daily, of 0.025% annually of the daily net assets of each
Portfolio.
In the event that the Administrator's right to such fee from a
Portfolio commences on a date other than the first day of the month, the fee
from such Portfolio for such month shall be based on the average daily net
assets of that Portfolios in that period from the date of commencement to the
last day of the month. If this Agreement is terminated with respect to a
Portfolio as on any date not the last day of a month, the fee from such
Portfolio shall be paid as promptly as possible after such date of termination,
and shall be based on the average daily net assets of that Portfolio in that
period from the beginning of such month to such date of termination. The average
daily net assets of each Portfolio shall in all cases be computed as of such
time as may be determined by the Board of Directors of the Fund. The manner of
calculating each Portfolio's average daily net assets for the purpose of this
Agreement shall be determined by the Fund's Board of Directors and shall be
binding on the parties.
7. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with
performance of this Agreement, except a loss resulting from willful misfeasance,
bad faith, or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties hereunder.
8. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Administrator who may also be a director,
officer, or employee of the Fund, to engage in other business or to devote his
time and attention in part to the management or other aspects of any other
business, whether or a similar nature or a dissimilar nature, or limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind, including investment advisory and management
services, to any other corporation, firm, individual or association.
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9. The Administrator may make payments from the fees paid to it under
this Agreement, from past profits or from any other source available to it to
other persons, including but not limited to Western Asset Management Company and
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, for shareholder, administrative, advisory,
recordkeeping and distribution services provided by such persons in connection
with the Fund's shares.
10. As used in this Agreement, the terms "assignment", "interested
person", and "majority of the outstanding voting securities" shall have the
meanings given to them by Section 2(a) of the 1940 Act, subject to such
exemptions as may be granted by the Securities and Exchange Commission by any
rule, regulation or order.
11. This Agreement will become effective on the date first set forth
above, provided that it shall have been approved by the Fund's Board of
Directors and, unless sooner terminated as provided for herein, shall continue
in effect for two years from the date of its execution and for successive annual
periods, provided that its continuance is specifically approved annually by the
Fund's Board of Directors, including a majority of the directors of the Fund who
are not parties to this Agreement or "interested" persons as defined by the 1940
Act, of any such party ("Disinterested Directors") cast in person at a meeting
called for the purpose of voting on such Agreement.
This Agreement is terminable with respect to a Portfolio without
penalty by Western Asset, by vote of the Fund's Board of Directors, by vote of a
majority (as defined in the 0000 Xxx) of the outstanding voting securities of
the Fund or by the Administrator, on not less than 60 days' notice to the other
party and may be terminated immediately upon the mutual written consent of the
Administrator and the Fund. This Agreement will automatically and immediately
terminate in the event of its assignment, and will automatically and immediately
terminte with respect to a Portfolio in the event Western Asset no longer serves
as investment adviser to that Portfolio.
12. No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
13. 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. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
[SEAL] WESTERN ASSET TRUST, INC.
Attest:
By: /s/ Xxxxx X. Xxxxxx By: /s/ W. Xxxxxx Xxxxxxxxxx
[SEAL] XXXX XXXXX FUND ADVISER, INC.
Attest:
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxx, III
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