INVESTMENT SUBADVISORY AGREEMENT
XXXX XXXXX GLOBAL TRUST, INC.
AGREEMENT made this 1st day of May, 1997 by and between Western Asset
Management Company ("Adviser"), a California corporation, and Western Asset
Global Management, Ltd. ("Western Asset Global"), a corporation organized under
the laws of the United Kingdom, each of which is registered as an investment
adviser under the Investment Advisers Act of 1940.
WHEREAS, the Adviser is investment adviser to Xxxx Xxxxx Global Government
Trust ("Fund"), a portfolio represented by a separate series of shares of Xxxx
Xxxxx Global Trust, Inc. (the "Corporation"), an open-end, diversified
management investment company registered under the Investment Company Act of
1940, as amended (the 111940 Act"), and
WHEREAS, the Adviser wishes to retain Western Asset Global to provide it
with certain investment subadvisory services in connection with the Adviser's
provision of investment advisory services to the Fund; and
WHEREAS, Western Asset Global 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. APPOINTMENT. The Adviser hereby appoints Western Asset Global
Management, Ltd. as investment subadviser for the Fund for the period and on the
terms set forth in this Agreement. Western Asset Global accepts such appointment
and agrees to furnish the services herein set forth for the compensation herein
provided.
2. DELIVERY OF DOCUMENTS. The Adviser has furnished Western Asset Global
with copies properly certified or authenticated of each of the following:
(a) The Corporation's Articles of Incorporation, as filed with the
State Department of Assessments and Taxation of the State of Maryland on
December 31, 1992 and all amendments thereto (such Articles of
Incorporation, as presently in effect and as they shall from time to time
be amended, are herein called the "Articles");
(b) The Corporation's By-Laws and all amendments thereto (such
By-Laws, as presently in effect and as they shall from time to time be
amended, are herein called the "By-Laws");
(c) Resolutions of the Corporation's Board of Directors authorizing
the appointment of Xxxx Xxxxx Fund Adviser, Inc. ("Manager") as the
manager, the Adviser as investment adviser and Western Asset Global
Management, Ltd. as investment subadviser, respectively, and approving the
Management Agreement between the Manager and the Fund dated May 1, 1995
(the "Management Agreement"), the Amended Investment Advisory Agreement
between the Manager and the Adviser, dated May 1, 1997 ("Advisory
Agreement"), and this Agreement;
(d) The Corporation's Registration Statement on Form N-lA under the
Securities Act of 1933, as amended, and the 1940 Act (File No. 3356672) as
filed with the Securities and Exchange Commission most recently, including
all exhibits thereto, relating to shares of common stock of the Fund, par
value $.001 per share (herein called "Shares") and all amendments thereto;
(e) The Fund's most recent prospectus (such prospectus, as presently
in effect and all amendments and supplements thereto are herein called the
"Prospectus"); and
(f) The Fund's most recent statement of additional information (such
statement of additional information, as presently in effect and all
amendments and supplements thereto are herein called the "Statement of
Additional Information").
The Adviser will furnish Western Asset Global from time to time with copies of
all amendments of or supplements to the foregoing.
3. INVESTMENT SUBADVISORY SERVICES. (a) subject to the supervision of the
Corporation's Board of Directors, the Manager and the Adviser, western Asset
Global shall as requested by the Adviser regularly provide the Fund with
investment research, advice, management and supervision and shall furnish a
continuous investment program for the Fund's portfolio of securities consistent
with the Fund's investment objective, policies, and limitations as stated in the
Fund's current Prospectus and Statement of Additional Information. Western Asset
Global shall as requested by the Adviser determine from time to time what
securities will be purchased, retained or sold by the Fund, and shall implement
those decisions, all subject to the provisions of the Corporation's Articles of
Incorporation and By-Laws, the 1940 Act, the applicable rules and regulations of
the Securities and Exchange Commission, and other applicable federal and state
law, as well as the investment objective, policies, and limitations of the Fund.
Western Asset Global will as requested by the Adviser place orders pursuant to
investment determinations for the Fund either directly with the issuer or with
any broker or dealer. In placing orders with brokers and dealers, Western Asset
Global will attempt to obtain the best net price and the most favorable
execution of its orders; however, Western Asset Global may, in its discretion,
purchase and sell portfolio securities from and to brokers and dealers who
provide the Fund with research, analysis, advice and similar services, and
Western Asset Global may pay to these brokers, in return for research and
analysis, a higher commission or spread than may be charged by other brokers. In
no instance will portfolio securities be purchased from or sold to Western Asset
Global or any affiliated person thereof except in accordance with the rules,
regulations or orders promulgated by the Securities and Exchange commission
pursuant to the 1940 Act. Western Asset Global shall also perform such other
functions of management and supervision as may be requested by the Adviser or
Manager and agreed to by Western Asset Global.
(b) Western Asset Global will as requested by the Adviser or Manager
oversee the maintenance of all books and records with respect to the securities
transactions of the Fund in accordance with all applicable federal and state
laws and regulations, and will furnish the Board of Directors of the Corporation
with such periodic and special reports as the Board or the Adviser or Manager
reasonably may request.
(c) The Corporation hereby authorizes any entity or person associated with
Western Asset Global which is a member of a national securities exchange to
effect any transaction on the exchange for the account of the Corporation which
is permitted by Section 11(a) of the Securities Exchange Act of 1934, and the
Corporation hereby consents to the retention by such person associated with
Western Asset Global of compensation for such transactions, whether in
accordance with Rule lia2-2(T)(a)(2)(iv) or otherwise.
4. SERVICES NOT EXCLUSIVE. Western Asset Global's services hereunder are
not deemed to be exclusive, and Western Asset Global shall be free to render
similar services to others. It is understood that persons employed by Western
Asset Global to assist in the performance of its duties hereunder might not
devote their full time to such service. Nothing herein contained shall be deemed
to limit or restrict the right of Western Asset Global or any affiliate of
Western Asset Global to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 3la-3
under the 1940 Act, Western Asset Global hereby agrees that all books and
records which it maintains for the Fund are property of the Fund and further
agrees to surrender promptly to the Fund or its agents any of such records upon
the Fund's request. Western Asset Global further agrees to preserve for the
periods prescribed by Rule 3la-2 under the 1940 Act, any such records required
to be maintained by Rule 3la-1 under the 1940 Act.
6. EXPENSES. During the term of this Agreement, Western Asset Global will
pay all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Fund.
7. COMPENSATION. For the services which Western Asset Global will render
to the Adviser and the Fund under this Agreement, the Adviser will pay Western
Asset Global a fee, computed daily and paid monthly, at an annual rate equal to
0.20* of the Fund's average daily net assets. Fees due to Western Asset Global
hereunder shall be paid promptly to Western Asset Global by Western Asset
following its receipt of fees from the Fund. If this Agreement is terminated as
of any date not the last day of a calendar month, a final fee shall be paid
promptly after the date of termination and shall be based on the percentage of
days of the month during which the contract was still in effect.
8. LIMITATION OF LIABILITY. western Asset Global will not be liable for
any error of judgment or mistake of law or for any loss suffered by the Adviser
or by the Fund in connection with the performance of this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations or duties under this Agreement.
9. DEFINITIONS. As used in this Agreement, the terms "securities" and "net
assets" shall have the meanings ascribed to them in the Articles of
Incorporation of the Corporation; and 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.
10. DURATION AND TERMINATION. This Agreement will become effective May 1,
1997, provided that it shall have been approved by the Corporation's Board of
Directors and by the shareholders of the Fund in accordance with the
requirements of the 1940 Act and, unless sooner terminated as provided for
herein, shall continue in effect until May 1, 1999. Thereafter, if not
terminated, this Agreement shall continue in effect for successive annual
periods, provided that such continuance is specifically approved at least
annually (i) by the Corporation's Board of Directors or (ii) by a vote of a
majority (as defined in the 0000 Xxx) of the outstanding voting securities of
the Fund, provided that in either event the continuance is also approved by a
majority of the Corporation's Directors who are not interested persons (as
defined in the 0000 Xxx) of the Corporation or of any party to this Agreement,
by vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable without penalty, by vote of the
Corporation's Board of Directors, by vote of a majority (as defined in the 0000
Xxx) of the outstanding voting securities of the Fund, by the Adviser or by
Western Asset Global, on not less than 60 days' notice to the Fund and/or the
other party(ies) and will be terminated immediately upon any termination of the
Management Agreement with respect to the Fund, the Amended Investment Advisory
Agreement between the Manager and the Adviser, or upon the mutual written
consent of Western Asset Global, the Adviser, and the Fund. Termination of this
Agreement with respect to the Fund shall in no way affect continued performance
with regard to any other portfolio of the Corporation. This Agreement will
automatically and immediately terminate in the event of its assignment.
11. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
12. AMENDMENTS. 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, and no material amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the Fund's
outstanding voting securities.
13. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. Should any part of this Agreement 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 and shall inure to the
benefit of the parties hereto and their respective successors.
14. GOVERNING LAW. This Agreement shall be construed in accordance with
the 1940 Act and the laws of the State of California. To the extent that the
applicable laws of the State of California conflict with the applicable
provisions of the 1940 Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
[SEAL] WESTERN ASSET MANAGEMENT COMPANY
Attest:
By: /s/ [ILLEGIBLE] By: /s/ Xxxxx X. Xxxxxx
----------------- -------------------
[SEAL] WESTERN ASSET GLOBAL MANAGEMENT, LTD.
Attest:
By: /s/ Xxxx Xxx Xxxxxx By: /s/ [ILLEGIBLE]
------------------- -------------------
