77Q - IMF
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made this 2nd day of
September, 2008, 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 Income Trust (the "Trust"), a Maryland
business 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/ W. Xxxxxxx Xxxxxxx,
Xx._______________________________
Name: W. Xxxxxxx Xxxxxxx,
Xx._______________________________
Title: Manager, US Legal and Corporate
Affairs
WESTERN ASSET MANAGEMENT COMPANY PTE.
LTD.
By: /s/ Xxxxxx X.
Giddings___________________________
____
Name: Xxxxxx X. Giddings___
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 INCOME TRUST
By: /s/ R. Jay
Gerken_______________________________
Name: R. Jay Gerken_____
Title: Chairman, President and
Chief Executive Officer
Xxxx Xxxxx Partners Inflation Management Fund Signature Page
SCHEDULE A
Xxxx Xxxxx Partners Inflation Management Fund Date: September 2, 2008
Fee:
The sub-advisory fee will be the following percentage of the Fund"s Allocated
Assets: 0.30%
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Agreement- FINAL IMF Western Asset (Singapore).DOC
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A/72617709.1
