N-SAR Exhibit: Sub-item 77Q1(e)
Xxxx Xxxxx Partners Variable Income Trust
Western Asset Core Plus VIT Portfolio
Sub-Advisory Agreement between Western
Asset Management Company and Western
Asset Management Company Pte. Ltd.
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT
("Agreement") is made this 15th day of April,
2015, by and between Western Asset
Management Company, a corporation organized
under the laws of California (the "Subadviser")
and Western Asset Management Company Pte.
Ltd., a corporation organized under the laws of
Singapore ("Western Singapore").
WHEREAS, the Subadviser has been
retained by Xxxx Xxxxx Partners Fund Advisor,
LLC to provide investment advisory,
management, and administrative services to
Xxxx Xxxxx Partners Variable Income Trust
(the "Trust"), a Maryland statutory trust
registered as a management investment company
under the Investment Company Act of 1940, as
amended (the "1940 Act") to provide investment
advisory, management, and administrative
services to the Trust with respect to the series of
the Trust designated in Schedule A annexed
hereto (the "Fund"); and
WHEREAS, the Subadviser wishes to
engage Western Singapore to provide certain
investment advisory services to the Fund, and
Western Singapore 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. In accordance with and subject
to the Subadvisory Agreement between the
Subadviser and Xxxx Xxxxx Partners Fund
Advisor, LLC with respect to the Fund (the
"Subadvisory Agreement"), the Subadviser
hereby appoints Western Singapore to act as a
subadviser with respect to the Fund for the
period and on the terms set forth in this
Agreement. Western Singapore accepts such
appointment and agrees to render the services
herein set forth, for the compensation herein
provided.
2. The Subadviser shall cause
Western Singapore to be kept fully informed at
all times with regard to the securities owned by
the Fund, its funds available, or to become
available, for investment, and generally as to the
condition of the Fund's affairs. The Subadviser
shall furnish Western Singapore with such other
documents and information with regard to the
Fund's affairs as Western Singapore may from
time to time reasonably request.
3. (a) Subject to the supervision of the
Trust's Board of Trustees (the "Board"), Xxxx
Xxxxx Partners Fund Advisor, LLC and the
Subadviser, Western Singapore shall regularly
provide the Fund with respect to such portion of
the Fund's assets as shall be allocated to
Western Singapore by the Subadviser from time
to time (the "Allocated Assets"), with
investment research, advice, management and
supervision and shall furnish a continuous
investment program for the Allocated Assets
consistent with the Fund's investment
objectives, policies and restrictions, as stated in
the Fund's current Prospectus and Statement of
Additional Information. Western Singapore
shall, with respect to the Allocated Assets,
determine from time to time what securities and
other investments will be purchased (including,
as permitted in accordance with this paragraph,
swap agreements, options and futures), retained,
sold or exchanged by the Fund and what portion
of the Allocated Assets will be held in the
various securities and other investments in
which the Fund invests, and shall implement
those decisions (including the execution of
investment documentation), all subject to the
provisions of the Trust's Declaration of Trust
and By-Laws (collectively, the "Governing
Documents"), the 1940 Act, and the applicable
rules and regulations promulgated thereunder by
the Securities and Exchange Commission (the
"SEC") and interpretive guidance issued
thereunder by the SEC staff and any other
applicable federal and state law, as well as the
investment objectives, policies and restrictions
of the Fund referred to above, and any other
specific policies adopted by the Board and
disclosed to Western Singapore. Western
Singapore is authorized as the agent of the Trust
to give instructions with respect to the Allocated
Assets to the custodian of the Fund as to
deliveries of securities and other investments
and payments of cash for the account of the
Fund. Subject to applicable provisions of the
1940 Act, the investment program to be
provided hereunder may entail the investment of
all or substantially all of the assets of the Fund
in one or more investment companies. Western
Singapore will place orders pursuant to its
investment determinations for the Fund either
directly with the issuer or with any broker or
dealer, foreign currency dealer, futures
commission merchant or others selected by it. In
connection with the selection of such brokers or
dealers and the placing of such orders, subject to
applicable law, brokers or dealers may be
selected who also provide brokerage and
research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) to the
Fund and/or the other accounts over which
Western Singapore or its affiliates exercise
investment discretion. Western Singapore is
authorized to pay a broker or dealer who
provides such brokerage and research services a
commission for executing a portfolio transaction
for the Fund which is in excess of the amount of
commission another broker or dealer would have
charged for effecting that transaction if Western
Singapore determines in good faith that such
amount of commission is reasonable in relation
to the value of the brokerage and research
services provided by such broker or dealer. This
determination may be viewed in terms of either
that particular transaction or the overall
responsibilities which Western Singapore and its
affiliates have with respect to accounts over
which they exercise investment discretion. The
Board may adopt policies and procedures that
modify and restrict Western Singapore's
authority regarding the execution of the Fund's
portfolio transactions provided herein. Western
Singapore shall exercise voting rights, rights to
consent to corporate action and any other rights
pertaining to the Allocated Assets subject to
such direction as the Board may provide, and
shall perform such other functions of investment
management and supervision as may be directed
by the Board. Western Singapore may execute
on behalf of the Fund certain agreements,
instruments and documents in connection with
the services performed by it under this
Agreement. These may include, without
limitation, brokerage agreements, clearing
agreements, account documentation, futures and
options agreements, swap agreements, other
investment related agreements, and any other
agreements, documents or instruments Western
Singapore believes are appropriate or desirable
in performing its duties under this Agreement.
(b) The Fund hereby
authorizes any entity or person associated with
Western Singapore which is a member of a
national securities exchange to effect any
transaction on the exchange for the account of
the Fund which is permitted by Section 11(a) of
the Exchange Act and Rule 11a2-2(T)
thereunder, and the Fund hereby consents to the
retention of compensation for such transactions
in accordance with Rule 11a2-2(T)(a)(2)(iv).
Notwithstanding the foregoing, Western
Singapore agrees that it will not deal with itself,
or with members of the Board or any principal
underwriter of the Fund, as principals or agents
in making purchases or sales of securities or
other property for the account of the Fund, nor
will it purchase any securities from an
underwriting or selling group in which Western
Singapore or its affiliates is participating, or
arrange for purchases and sales of securities
between the Fund and another account advised
by Western Singapore or its affiliates, except in
each case as permitted by the 1940 Act and in
accordance with such policies and procedures as
may be adopted by the Fund from time to time,
and will comply with all other provisions of the
Governing Documents and the Fund's then-
current Prospectus and Statement of Additional
Information relative to Western Singapore and
its directors and officers.
4. Western Singapore may
delegate to any other one or more companies
that Western Singapore controls, is controlled
by, or is under common control with, or to
specified employees of any such companies,
certain of Western Singapore's duties under this
Agreement, provided in each case Western
Singapore will supervise the activities of each
such entity or employees thereof, that such
delegation will not relieve Western Singapore of
any of its duties or obligations under this
Agreement and provided further that any such
arrangements are entered into in accordance
with all applicable requirements of the 1940 Act.
5. Western Singapore agrees that it
will keep records relating to its services
hereunder in accordance with all applicable
laws, and in compliance with the requirements
of Rule 31a-3 under the 0000 Xxx, Xxxxxxx
Xxxxxxxxx hereby agrees that any records that 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. Western Singapore further agrees to
arrange for the preservation of the records
required to be maintained by Rule 31a-1 under
the 1940 Act for the periods prescribed by Rule
31a-2 under the 1940 Act.
6. (a) Western Singapore, at
its expense, shall supply the Board, the officers
of the Trust, Xxxx Xxxxx Partners Fund
Advisor, LLC and the Subadviser with all
information and reports reasonably required by
them and reasonably available to Western
Singapore relating to the services provided by
Western Singapore hereunder.
(b) Western Singapore shall
bear all expenses, and shall furnish all necessary
services, facilities and personnel, in connection
with its responsibilities under this Agreement.
Other than as herein specifically indicated,
Western Singapore shall not be responsible for
the Fund's expenses, including, without
limitation, advisory fees; distribution fees;
interest; taxes; governmental fees; voluntary
assessments and other expenses incurred in
connection with membership in investment
company organizations; organization costs of the
Fund; the cost (including brokerage
commissions, transaction fees or charges, if any)
in connection with the purchase or sale of the
Fund's securities and other investments and any
losses in connection therewith; fees and
expenses of custodians, transfer agents,
registrars, independent pricing vendors or other
agents; legal expenses; loan commitment fees;
expenses relating to share certificates; expenses
relating to the issuing and redemption or
repurchase of the Fund's shares and servicing
shareholder accounts; expenses of registering
and qualifying the Fund's shares for sale under
applicable federal and state law; expenses of
preparing, setting in print, printing and
distributing prospectuses and statements of
additional information and any supplements
thereto, reports, proxy statements, notices and
dividends to the Fund's shareholders; costs of
stationery; website costs; costs of meetings of
the Board or any committee thereof, meetings of
shareholders and other meetings of the Fund;
Board fees; audit fees; travel expenses of
officers, members of the Board and employees
of the Fund, if any; and the Fund's pro rata
portion of premiums on any fidelity bond and
other insurance covering the Fund and its
officers, Board members and employees;
litigation expenses and any non-recurring or
extraordinary expenses as may arise, including,
without limitation, those relating to actions, suits
or proceedings to which the Fund is a party and
the legal obligation which the Fund may have to
indemnify the Fund's Board members and
officers with respect thereto.
7. No member of the Board,
officer or employee of the Trust or Fund shall
receive from the Trust or Fund any salary or
other compensation as such member of the
Board, officer or employee while he is at the
same time a director, officer, or employee of
Western Singapore or any affiliated company of
Western Singapore, except as the Board may
decide. This paragraph shall not apply to Board
members, executive committee members,
consultants and other persons who are not
regular members of Western Singapore's or any
affiliated company's staff.
8. As compensation for the
services performed by Western Singapore,
including the services of any consultants
retained by Western Singapore, the Subadviser
shall pay Western Singapore out of the
subadvisory fee it receives with respect to the
Fund, and only to the extent thereof, as promptly
as possible after the last day of each month, a
fee, computed daily at an annual rate set forth on
Schedule A annexed hereto. The first payment
of the fee shall be made as promptly as possible
at the end of the month succeeding the effective
date of this Agreement, and shall constitute a
full payment of the fee due Western Singapore
for all services prior to that date. If this
Agreement is terminated as of any date not the
last day of a month, such fee shall be paid as
promptly as possible after such date of
termination, shall be based on the average daily
net assets of the Fund or, if less, the portion
thereof comprising the Allocated Assets in that
period from the beginning of such month to such
date of termination, and shall be that proportion
of such average daily net assets as the number of
business days in such period bears to the number
of business days in such month. The average
daily net assets of the Fund or the portion
thereof comprising the Allocated Assets shall in
all cases be based only on business days and be
computed as of the time of the regular close of
business of the New York Stock Exchange, or
such other time as may be determined by the
Board.
9. Western Singapore assumes no
responsibility under this Agreement other than
to render the services called for hereunder, in
good faith, and shall not be liable for any error
of judgment or mistake of law, or for any loss
arising out of any investment or for any act or
omission in the execution of securities
transactions for the Fund, provided that nothing
in this Agreement shall protect Western
Singapore against any liability to the Subadviser,
Xxxx Xxxxx Partners Fund Advisor, LLC or the
Fund to which Western Singapore would
otherwise be subject by reason of 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. As used in this Section 9, the term
"Western Singapore" shall include any affiliates
of Western Singapore performing services for
the Trust or the Fund contemplated hereby and
the partners, shareholders, directors, officers and
employees of Western Singapore and such
affiliates.
10. Nothing in this Agreement shall
limit or restrict the right of any director, officer,
or employee of Western Singapore who may
also be a Board member, officer, or employee of
the Trust or the Fund, to engage in any other
business or to devote his time and attention in
part to the management or other aspects of any
other business, whether of a similar nature or a
dissimilar nature, nor to limit or restrict the right
of Western Singapore to engage in any other
business or to render services of any kind,
including investment advisory and management
services, to any other fund, firm, individual or
association. If the purchase or sale of securities
consistent with the investment policies of the
Fund or one or more other accounts of Western
Singapore is considered at or about the same
time, transactions in such securities will be
allocated among the accounts in a manner
deemed equitable by Western Singapore. Such
transactions may be combined, in accordance
with applicable laws and regulations, and
consistent with Western Singapore's policies
and procedures as presented to the Board from
time to time.
11. For the purposes of this
Agreement, the Fund's "net assets" shall be
determined as provided in the Fund's then-
current Prospectus and Statement of Additional
Information 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 SEC by any rule, regulation or
order.
12. This Agreement will become
effective with respect to the Fund on the date set
forth opposite the Fund's name on Schedule A
annexed hereto, provided that it shall have been
approved by the Trust's Board and, if so
required by the 1940 Act, by the shareholders of
the Fund in accordance with the requirements of
the 1940 Act and, unless sooner terminated as
provided herein, will continue in effect until the
second anniversary of the date of effectiveness..
Thereafter, if not terminated, this Agreement
shall continue in effect with respect to the Fund,
so long as such continuance is specifically
approved at least annually (i) by the Board or (ii)
by a vote of a majority of the outstanding voting
securities of the Fund, provided that in either
event the continuance is also approved by a
majority of the Board members who are not
interested persons of any party to this
Agreement, by vote cast in person at a meeting
called for the purpose of voting on such
approval.
13. This Agreement is terminable
with respect to the Fund without penalty by the
Board or by vote of a majority of the outstanding
voting securities of the Fund, in each case on not
more than 60 days' nor less than 30 days'
written notice to Western Singapore, or by
Western Singapore upon not less than 90 days'
written notice to the Fund and the Subadviser,
and will be terminated upon the mutual written
consent of the Subadviser and Western
Singapore. This Agreement shall terminate
automatically in the event of its assignment by
Western Singapore and shall not be assignable
by the Subadviser without the consent of
Western Singapore.
14. Western Singapore agrees that
for any claim by it against the Fund in
connection with this Agreement or the services
rendered under the Agreement, it shall look only
to assets of the Fund for satisfaction and that it
shall have no claim against the assets of any
other portfolios of the Trust.
15. 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 the Agreement shall be effective
until approved, if so required by the 1940 Act,
by vote of the holders of a majority of the
Fund's outstanding voting securities.
16. This Agreement, and any
supplemental terms contained on Annex I
hereto, if applicable, embodies the entire
agreement and understanding between the
parties hereto, and supersedes all prior
agreements and understandings relating to the
subject matter hereof. 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 on and shall inure to the benefit of the
parties hereto and their respective successors.
17. This Agreement shall be
construed and the provisions thereof interpreted
under and in accordance with the laws of the
State of New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be
executed by their officers thereunto duly
authorized.
WESTERN ASSET MANAGEMENT COMPANY
By: /s/ Xxxxxxx X. Xxx Xxxxxxxxx
Name: Xxxxxxx X. Xxx Xxxxxxxxx
Title: Head of New York Operations/Client
Service/Marketing
WESTERN ASSET MANAGEMENT COMPANY
PTE. LTD.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Manager, International Legal and
Compliance
The foregoing is acknowledged:
The undersigned officer of the Trust has
executed this Agreement not individually but in
his/her capacity as an officer of the Trust. The
Trust does not hereby undertake, on behalf of
the Fund or otherwise, any obligation to Western
Asset Management Company Pte. Ltd.
XXXX XXXXX PARTNERS VARIABLE
INCOME TRUST
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: President and CEO
SCHEDULE A
Western Asset Core Plus VIT Portfolio
Date: April 15, 2015
Fee:
The sub-advisory fee will be the following
percentage of the Fund's Allocated Assets:
0.30%
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A/76654344.1
A/76654344.1
A/76654344.1
