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 Ltd., a corporation organized
under the laws of Japan (?Western Japan?).
WHEREAS, the Subadviser has been retained by ▇▇▇▇ ▇▇▇▇▇ Partners
Fund Advisor, LLC to provide investment advisory, management, and
administrative services to ▇▇▇▇ ▇▇▇▇▇ 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 Japan to provide
certain investment advisory services to the Fund, and Western Japan 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 ▇▇▇▇ ▇▇▇▇▇ Partners Fund Advisor, LLC with
respect to the Fund (the ?Subadvisory Agreement?), the Subadviser
hereby appoints Western Japan to act as a subadviser with respect to
the Fund for the period and on the terms set forth in this Agreement.
Western Japan accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. The Subadviser shall cause Western Japan 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 Japan with such other documents and information
with regard to the Fund?s affairs as Western Japan may from time to
time reasonably request.
3. (a) Subject to the supervision of the Trust?s Board of
Trustees (the ?Board?), ▇▇▇▇ ▇▇▇▇▇ Partners Fund Advisor, LLC and the
Subadviser, Western Japan shall regularly provide the Fund with
respect to such portion of the Fund?s assets as shall be allocated to
Western Japan 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 Japan 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 Japan. Western
Japan 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 Japan 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 Japan or its affiliates exercise investment
discretion. Western Japan 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 Japan 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
Japan 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 Japan?s authority
regarding the execution of the Fund?s portfolio transactions provided
herein. Western Japan 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 Japan 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 Japan believes are
appropriate or desirable in performing its duties under this
Agreement.
(b) The Fund hereby authorizes any entity or person
associated with Western Japan 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 Japan 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
Japan or its affiliates is participating, or arrange for purchases and
sales of securities between the Fund and another account advised by
Western Japan 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 Japan and its directors and officers.
4. Western Japan may delegate to any other one or more
companies that Western Japan controls, is controlled by, or is under
common control with, or to specified employees of any such companies,
certain of Western Japan?s duties under this Agreement, provided in
each case Western Japan will supervise the activities of each such
entity or employees thereof, that such delegation will not relieve
Western Japan 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 Japan 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 1940 Act,
Western Japan 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 Japan 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 Japan, at its expense, shall supply the Board,
the officers of the Trust, ▇▇▇▇ ▇▇▇▇▇ Partners Fund Advisor, LLC and
the Subadviser with all information and reports reasonably required by
them and reasonably available to Western Japan relating to the
services provided by Western Japan hereunder.
(b) Western Japan 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 Japan 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 Japan
or any affiliated company of Western Japan, 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 Japan?s or any affiliated company?s staff.
8. As compensation for the services performed by Western
Japan, including the services of any consultants retained by Western
Japan, the Subadviser shall pay Western Japan 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
Japan 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 Japan 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 Japan against any liability to the Subadviser, ▇▇▇▇ ▇▇▇▇▇
Partners Fund Advisor, LLC or the Fund to which Western Japan 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 Japan? shall include any affiliates
of Western Japan performing services for the Trust or the Fund
contemplated hereby and the partners, shareholders, directors,
officers and employees of Western Japan and such affiliates.
10. Nothing in this Agreement shall limit or restrict the right
of any director, officer, or employee of Western Japan 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 Japan 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 Japan 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 Japan. Such transactions may be combined,
in accordance with applicable laws and regulations, and consistent
with Western Japan?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 Japan,
or by Western Japan 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 Japan. This Agreement
shall terminate automatically in the event of its assignment by
Western Japan and shall not be assignable by the Subadviser without
the consent of Western Japan.
14. Western Japan 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. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇.______________________________
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇.__________
Title: Manager, US Legal and Corporate
Affairs
WESTERN ASSET MANAGEMENT COMPANY LTD.
By: /s/_Daniel E.
Giddings______________________________
Name: ▇▇▇▇▇▇ ▇. 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 Ltd.
▇▇▇▇ ▇▇▇▇▇ PARTNERS INCOME TRUST
By: /s/ R. Jay
Gerken_______________________________
Name: R. ▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and Chief
Executive Officer
▇▇▇▇ ▇▇▇▇▇ Partners Global Income Fund Signature Page
ANNEX I
This Annex I forms a part of the Subadvisory Agreement dated as of
September 2, 2008, by and between Western Asset Management Company, a
California corporation, and Western Asset Management Company Ltd.
(?Western Japan?), an entity authorized and regulated in Japan by the
Japanese Securities and Exchange Surveillance Commission (SESC).
1. Western Japan shall not offer any special benefit to the Subadviser
in connection with performance of this Agreement, and the Subadviser
shall not request any special benefit from Western Japan.
2. Section 9 of this Agreement shall not be deemed to limit Western
Japan's obligations under the Japanese Financial Instruments and
Exchange Law to perform its duties to its customers faithfully and
with the care of a prudent manager.
3. The Subadviser shall be liable for any damages or losses suffered
by Western Japan due to the Subadviser?s willful misconduct or gross
negligence or the Subadviser?s failure to perform its duties
hereunder.
SCHEDULE A
▇▇▇▇ ▇▇▇▇▇ Partners Global Income Fund Date: September 2, 2008
Fee:
The sub-advisory fee will be the following percentage of the Fund?s
Allocated Assets: 0.30%
- 7 -
A/72617685.1
N:\Legal\SLB Legal Compliance\Legal\Users\Current\▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ RMN)\ FINAL GIF Western Asset (Japan).DOC
SA 9.02.08 Open-end conformed Agreements\SA
FINAL GIF Western Asset (Japan).DOC
A/▇▇▇▇▇▇▇▇.1
A/72617685.1
