INVESTMENT MANAGEMENT AGREEMENT
This INVESTMENT MANAGEMENT AGREEMENT made this 25th day of
May 2016,
by and among Western Asset Management Company (the "Advisor"), a
California corporation,
Western Asset Management Company Pte. Ltd. ("Subadviser"), a
corporation
organized under
the laws of Singapore, and Security Investors, LLC ("SI"), a
Kansas
limited liability company,
each of which is registered as an investment adviser under the
Investment
Advisers Act of 1940,
as amended.
WHEREAS, the Advisor and SI are each advisers of Western
Asset/Claymore Inflation-
Linked Opportunities & Income Fund (the "Trust"), a closed-end ,
management
investment
company registered under the Investment Company Act of 1940, as
amended (the
"1940 Act");
and
WHEREAS, the Advisor wishes to retain Subadviser to provide
certain
investment
advisory services in connection with the Advisor's management of
the Trust;
and
WHEREAS, Subadviser 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 Advisor hereby appoints Subadviser
as
investment manager
for the Trust with respect to those assets of the Trust as may be
designated
by the Advisor from
time to time for the period and on the terms set forth in this
Agreement.
Subadviser accepts such
appointment and agrees to furnish the services herein set forth
for the
compensation herein
provided.
2. Delivery of Documents. SI has furnished Subadviser
with copies
of each of the
following:
(a) The Trust's Agreement and Declaration of Trust and
all amendments
thereto (such
Declaration of Trust, as presently in effect and as it shall from
time to time be
amended, is herein
called the "Declaration");
(b) The Trust'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) Resol utions of the Trust's Board of Trustees (the
"Trustees")
authorizing
the appointment of SI and the Advisor as advisers and Subadviser as
investment
manager and
approving an Investment Advisory Agreement between SI and the Trust,
an
Investment
Management Agreement between the Adviser and SI with respect to the
Trust (the
"Western
Management Agreement") and this Agreement;
(d) The Trust's most recently filed Amendment
to its
Registration Statement
on Form N-2 under the Securities Act of 1933, as amended, and the
1940 Act,
including all
exhibits thereto, relating to common shares of beneficial interest
of the Trust,
no par value;
(e) The Trust's most recent prospectus (such prospectus,
as presently
in effect,
and all amendments and supplements thereto are herein called the
"Prospectus");
and
(f) The Trust'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").
SI will furnish Subadviser from time to time with copies of all
amendments of or
supplements to the foregoing.
3. Investment Advisory Services. (a) Subject to the
supervision of
the Trustees and
the Advisor, Subadviser shall as requested by the Advisor regularly
provide the
Trust with
investment research, advice, management and supervision and shall
furnish a
continuous
investment program for the Trust with respect to those assets of the
Trust as may be
designated
by the Advisor from time to time consistent with the Trust's investment
objectives,
policies, and
restrictions as stated in the Trust's current Prospectus and Statement
of Additional
Information.
Subadviser shall as requested by the Advisor determine from time to
time what
securities or
other property will be purchased, retained or sold by the Trust, and
shall implement
those
decisions, all subject to the provisions of the Trust's Declaration
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 objectives,
policies, and
restrictions of
the Trust, as each of the foregoing may be amended from time to time.
Subadviser will
as
requested by the Advisor place orders pursuant to its investment
determinations for the
Trust
either directly with the issuer or with any broker, dealer or futures
commission
merchant
(collectively, a "broker"). In the selection of brokers and the placing
of orders for
the purchase
and sale of portfolio investments for the Trust, Subadviser shall seek
to obtain for the
Trust the
most favorable price and execution available, except to the extent it
may be permitted
to pay
higher brokerage commissions for brokerage and research services as
described below.
In using
its best efforts to obtain for the Trust the most favorable price and
execution
available,
Subadviser, bearing in mind the Trust's best interests at all times
, shall consider all
factors it
deems relevant, including, by way of illustration, price, the size of
the transaction,
the nature of
the market for the security, the amount of the commission, the timing of
the transaction
taking
into consideration market prices and trends, the reputation, experience
and financial
stability of
the broker involved and the quality of service rendered by the broker
in other
transactions.
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Subject to such policies as the Trustees may determine and communicate
to Subadviser
in
writing, Subadviser shall not be deemed to have acted unlawfully or to
have breached
any duty
created by this Agreement or otherwise solely by reason of its having
caused the Trust
to pay a
broker that provides brokerage and research services to Subadviser or
any affiliated
person of
Subadviser an amount of commission for effecting a portfolio investment
transaction
in excess of
the amount of commission another broker would have charged for
effecting that
transaction, if
Subadviser determines in good faith that such amount of commission
was reasonable in
relation to
the value of the brokerage and research services provided by such
broker, viewed in
terms of
either that particular transaction or Subadviser's overall
responsibilities with respect
to the Trust
and to other clients of Subadviser and any affiliated person of
Subadviser as to which
Subadviser
or any affiliated person of Subadviser exercises investment discretion.
Subadviser
shall also
perform such other functions of management and supervision as may be
requested by the
Advisor and agreed to by Subadviser.
(b) Subadviser will as requested by the Advisor
oversee the
maintenance of
all books and records with respect to the investment transactions of
the Trust that it
implements
in accordance with all applicable federal and state laws and
regulations, and will
furnish the
Trustees with such periodic and special reports as the Trustees or the
Advisor reasonably
may
request.
(c) The Trust hereby agrees with the Subadviser and with
any investment
manager appointed pursuant to paragraph 3(d) below (a "Sub-Subadviser")
that any entity
or
person associated with Subadviser or Sub-Subadviser (or with any
affiliated person of
Subadviser or Sub-Subadviser) which is a member of a national
securities exchange is
authorized
to effect any transaction on such exchange for the account of the Trust
which is
permitted by
Section l l (a) of the Securities Exchange Act of 1934, as
amended, and Rule 1l a2-2(T)
thereunder, and the Trust hereby consents to the retention of
compensation for such
transactions
in accordance with Rule 1 l a2-2(T)(a)(2)(iv) or otherwise.
(d) Subadviser may enter into a contract (a
"Sub-Subadvisory Contract")
with
one or more investment managers in which Subadviser delegates to
such investment
managers
any or all duties specified in this Section 3. Such Sub-Subadvisory
Contract must
meet all
requirements of the 1940 Act and the rules and regulations thereunder.
4. Services Not Exclusive. Subadviser's services hereunder
are not deemed
to be
exclusive, and Subadviser shall be free to render similar services to
others. It is
understood that
persons employed by Subadviser 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 Subadviser or any affiliate of Subadviser to engage
in and devote
time and
attention to other businesses or to render services of whatever kind or
nature.
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5. Books and Records. In compliance with the requirements
of Rule 31a-3
under the
1940 Act, Subadviser hereby agrees that all books and records which it
maintains for the
Trust
are property of the Trust and further agrees to surrender promptly to
the Trust or its
agents any of
such records upon the Trust's request. Subadviser further agrees to
preserve for the
periods
prescribed by Rule 31a-2 under the 1940 Act any such records required to
be maintained
by Rule
31a-1 under the 1940 Act.
6. Expenses. During the term of this Agreement, Subadviser
will pay all
expenses
incurred by it in connection with its activities under this Agreement other
than the
cost of
securities and other property (including brokerage commissions, if any)
purchased for
the Trust.
7. Compensation. For the services which Subadviser will
render to the
Advisor and
the Trust under this Agreement, the Advisor shall pay Subadviser an annual
fee, payable
on a
monthly basis, at the annual rate of .27% of the Trust's average weekly
assets that
Subadviser
manages. "Average Weekly Assets" means the average weekly value of the total
assets of
the
Trust (including any assets attributable to leverage) minus accrued
liabilities (other
than
liabilities representing leverage). For purposes of calculating Average
Weekly Assets,
neither
the liquidation preference of any preferred shares of beneficial interest
outstanding
nor any
liabilities associated with any instruments or transactions to leverage
the Trust's
portfolio
(whether or not such instruments or transactions are "covered" within the
meaning of
the 1940
Act and the rules and regulations thereunder, giving effect to any
interpretations of
the Securities
and Exchange Commission and its staft) is considered a liability. In
addition, with
respect to
reverse repurchase or dollar roll transactions ("Repurchase Transactions")
entered into
by the
Trust, Average Weekly Assets includes (a) any proceeds from the sale of
an asset (the
"Underlying Asset") of the Trust to a counterparty in a Repurchase
Transaction and
(b) the value
of such Underlying Asset as of the relevant measuring date. Fees due
to Subadviser
hereunder
shall be paid promptly to Subadviser by the Advisor following its receipt
of fees
from SI. For
any period less than a month during which this Agreement is in effect,
the fee shall
be prorated
according to the proportion which such period bears to a full month of
28, 29, 30 or
31 days, as
the case may be. For purposes of this Agreement and except as
otherwise provided
herein, the
Average Weekly Assets of the Trust shall be calculated pursuant
to procedures
adopted by the
Trustees of the Trust for calculating the value of the Trust's
assets or delegating
such
calculations to third parties.
8. Limitation of Liability. In the absence of willful
misfeasance, bad
faith or gross
negligence on the part of Subadviser, or reckless disregard of its
obligations and
duties
hereunder, Subadviser shall not be subject to any liability to the
Advisor, the Trust
or any
shareholder of the Trust, for any act or omission in the course of, or
connected with,
rendering
services hereunder .
9. Definitions. As used in this Agreement, the terms
"assignment,"
"interested
person," "affiliated 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, issued or adopted by the Securities and Exchange Commission or
its staff by
any rule,
regulation, or order; the term "specifically approve at least annually"
shall be
construed in a
manner consistent with the 1940 Act and the rules and regulations thereunder;
and the
term
"brokerage and research services" shall have the meaning given in the
Securities
Exchange Act
of 1934, as amended, and the rules and regulations thereunder.
10. Term. This Agreement shall become effective upon its
execution, and
shall
remain in full force and effect continuously thereafter (unless
terminated
automatically as set
forth in Section 12) until terminated as follows:
(a) The Trust may at any time terminate this Agreement
by 60
days' written
notice delivered or mailed by registered mail, postage prepaid, to the
Advisor and
Subadviser, or
(b) If (i) the Trustees or the shareholders of the
Trust by vote
of a majority of
the outstanding voting securities of the Trust, and (ii) a majority of
the Trustees
who are not
interested persons of the Trust, the Advisor or Subadviser, by vote cast
in person
at a meeti ng
called for the purpose of voting on such approval , do not specifically
approve at
least annually
the continuance of this Agreement, then this Agreement shall automatically
terminate
on
December 31, 2016; provided, however, that if the continuance of this
Agreement is
submitted to
the shareholders of the Trust for their approval and such shareholders
fail to
approve such
continuance of this Agreement as provided herein, Subadviser may continue
to serve
hereunder
in a manner consistent with the 1940 Act and the rules and regulations
thereunder,
or
(c) Subadviser may at any time terminate this Agreement by
60 days
' written
notice delivered or mailed by registered mail, postage prepaid, to the
Advisor.
Action by the Trust under paragraph (a) of this Section 10 may be
taken either
(i) by vote
of a majority of the Trustees, or (ii) by the vote of a majority of the
outstanding
voting securities
of the Trust.
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. No Assignment: Amendments. This Agreement shall terminate
automatically in
the event of its assignment or in the event that the Western Management
Agreement
shall have
terminated for any reason. Any termination of this Agreement pursuant
to Section
10 shall be
without the payment of any penalty. This Agreement shall not be amended
unless such
amendment is approved by the vote of a majority of the outstanding voting
securities
of the Trust
(provided that such shareholder approval is required by the 1940 Act and
the rules
and
regulations thereunder, giving effect to any interpretations of the
Securities and
Exchange
Commission and its staff) and by the vote, cast in person at a meeting
called for the
purpose of
voting on such approval, of a majority of the Trustees who are not
interested persons
of the
Trust, the Advisor or Subadviser.
13. Non-Excl usive Right. Subadviser hereby grants to
the Trust the
nonexclusive
right and license to use the xxxx "Western Asset Management Company
Pte. Ltd."(the
"Licensed Xxxx") in the Trust's name and in connection with the formation,
issuance,
marketing,
promotion and operations of, or disclosure related to, the Trust.
Subadviser agrees
that it shall
receive no compensation for any such use by the Trust. Subadviser
hereby warrants and
represents that it has filed applications and/or owns rights in the
Licensed Xxxx
sufficient to
grant this license. No right, title, qr interest in the Licensed Xxxx,
except the
right to use the
Licensed Xxxx as provided in this Agreement, is or will be transferred
to the Trust
by this
Agreement. Should this Agreement be terminated, the Trust agrees that
it will take
reasonably
necessary steps to change its name to a name not including the word
"Western Asset."
14. 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.
15. Limitation of Liability. A copy of the Trust's Agreement
and
Declaration of
Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice
is hereby
given that this Agreement has been executed on behalf of the Trust by
an officer of
the Trust as
an officer and not individually and the obligations of or arising out
of this
Agreement are not
binding upon any of the Trustees, officers or shareholders of the Trust
individually
but are
binding only upon the assets and property of the Trust.
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Attest:
Attest:
Xxxxxxx X. Xxxxxxx
The foregoing is accepted by:
By:
Xxx X. Xxx
Senior Vice President & Secretary
Attest:
WE
STE
RN
ASS
ET/
CL
AY
MO
RE
INF
LAT
ION
-
XXX
XX
D
OPP
OR
TU
NIT
IES
&
lNC
OM
E
FU
ND
Xxxxxxx X. Xxxxxxx
By:
M
a
r
k
E
..
M
a
t
h
i
a
s
e
n
S
e
c
r
e
t
a
r
y
Attest:
Attest:
The foregoing is accepted by:
Attest:
WESTERN ASSET
MANAGEMENT COMPANY PTE.
LTD.
SECURITY INVESTORS, LLC
By:
Xxx X. Le
Senior Vicefudent & Secretary
WESTERN ASSET/CLAYMORE
INFLATION-LINKED
Ma X. Xxxxxxxxx Secretary
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