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 Ltd ("Subadviser"), a
corporation
organized under the
laws of Japan, 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 Jnflation-
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 lo 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) Resolutions 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 Fonn N-2 under the Securities Act of 1933, as amended, and the
1940 Act,
including all
exhibits thereto, relating to common shares of beneficial interes
t 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
(t) The Trust's most recent statement of additional
infonnation
(such
statement of additional infonnation, as presently in effect, and
all
amendments and supplements
thereto are herein called the "Statement of Additional lnformation").
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 detenninations 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 pennitted 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, includi ng,
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.
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 11 Sub-Subadviser11
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 l
la2-2(T)
thereunder, and the Trust hereby consents to the retention of
compensation for
such transactions
in accordance with Rule l la2-2(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.
5. Books and Records. In compliance with the requirements
of Rule
3 Ia-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 3Ia-2 under the I 940 Act any such records required
to be
maintained by Rule
3Ia- I 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 representi ng 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 staff) 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
at the close
of business 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 IO 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-Exclusive Right. Subadviser hereby grants to
the Trust the
nonexclusive
right and license to use the xxxx "Western Asset Management Company
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
recei ve 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, or 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
bindi ng upon any of the Trustees, officers or shareholders of the
Trust
individually but are
binding only upon the assets and property of the Trust.
16. Japanese Law. Subadviser is regulated by the Japanese
Securities
and Exchange
Surveillance Commission, a commission established by the Japanese
Financial Services
Agency,
and is subject to applicable local laws and regulation.
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 .
Attest:
By: d
