PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 25 day of November 2008, by and between
Western Asset Management Company (the "Manager"), a California
corporation, and Western Asset Management Company Pte. Limited
("WAML Singapore"), a corporation organized under the laws of
Singapore, each of which is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Manager is the manager of Western Asset
Premier Bond 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 Manager wishes to retain WAML Singapore to
provide certain investment advisory services in connection with
the Manager's management of the Trust; and
WHEREAS, WAML 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. Appointment. The Manager hereby appoints WAML
Singapore as portfolio manager for the Trust for the period and
on the terms set forth in this Agreement. WAML Singapore
accepts such appointment and agrees to furnish the services
herein set forth for the compensation herein provided.
2. Delivery of Documents. The Manager has furnished
WAML Singapore with copies of each of the following:
(a) The Trust?s 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 the Manager as the
manager and WAML Singapore as investment adviser and approving
the Investment Management Agreement between the Manager and the
Trust with respect to the Trust dated March 20, 2002 (the
"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").
The Manager will furnish WAML Singapore 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 Manager, WAML Singapore
shall as requested by the Manager regularly provide the Trust
with investment research, advice, management and supervision and
shall furnish a continuous investment program for the Trust
consistent with the Trust's investment objectives, policies, and
restrictions as stated in the Trust's current Prospectus and
Statement of Additional Information. WAML Singapore shall as
requested by the Manager 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. WAML Singapore will as requested by
the Manager 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, WAML Singapore 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, WAML Singapore,
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. Subject to such
policies as the Trustees may determine and communicate to WAML
Singapore in writing, WAML Singapore 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 WAML Singapore or any affiliated person of WAML
Singapore 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 WAML Singapore 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
WAML Singapore's overall responsibilities with respect to the
Trust and to other clients of WAML Singapore and any affiliated
person of WAML Singapore as to which WAML Singapore or any
affiliated person of WAML Singapore exercises investment
discretion. WAML Singapore shall also perform such other
functions of management and supervision as may be requested by
the Manager and agreed to by WAML Singapore.
(b) WAML Singapore will as requested by the Manager
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 Manager reasonably
may request.
(c) The Trust hereby agrees that any entity or person
associated with WAML Singapore (or with any affiliated person of
WAML Singapore) 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 11(a) of the Securities Exchange Act of 1934, as
amended, and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions
in accordance with Rule 11a2-2(T)(a)(2)(iv) or otherwise.
4. Services Not Exclusive. WAML Singapore's services
hereunder are not deemed to be exclusive, and WAML Singapore
shall be free to render similar services to others. It is
understood that persons employed by WAML Singapore 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 WAML Singapore or any
affiliate of WAML Singapore 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 31a-3 under the 1940 Act, WAML Singapore
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. WAML Singapore 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, WAML
Singapore 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 WAML Singapore
will render to the Manager and the Trust under this Agreement,
the Manager shall pay WAML Singapore a monthly fee in arrears at
an annual rate equal to 0.425% of the average weekly value of
the Trust?s Total Managed Assets that WAML Singapore manages.
"Total Managed Assets" means the total assets of the Trust
(including any such assets attributable to leverage) minus the
sum of accrued liabilities (other than liabilities representing
leverage). For purposes of this Agreement, the Total Managed
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. Fees due to WAML Singapore hereunder shall be paid
promptly to WAML Singapore by the Manager following its receipt
of fees from the Trust. 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.
8. Limitation of Liability. In the absence of willful
misfeasance, bad faith or gross negligence on the part of WAML
Singapore, or reckless disregard of its obligations and duties
hereunder, WAML Singapore shall not be subject to any liability
to the Manager, 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 and interpretations as may be granted, issued
or adopted by the Securities and Exchange Commission or its
staff by any rule, regulation, order or interpretive position;
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 not more than 60 days' written notice
delivered or mailed by registered mail, postage prepaid, to
the Manager and WAML Singapore, 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
Manager or WAML Singapore, by vote cast in person at a
meeting 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 the
second anniversary of its execution, or upon the expiration
of one year from the effective date of the last such
continuance, whichever is later; 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, WAML Singapore may continue
to serve hereunder in a manner consistent with the 1940 Act
and the rules and regulations thereunder, or
c. The Manager may at any time terminate this
Agreement by not less than 60 days' written notice
delivered or mailed by registered mail, postage prepaid, to
WAML Singapore, and WAML Singapore may at any time
terminate this Agreement by not less than 60 days' written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager.
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 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 Manager or WAML
Singapore.
13. 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.
14. Limitation of Liability. A copy of the Agreement and
Declaration of Trust of the Trust is on file with the Secretary
of State 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.
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: WESTERN ASSET MANAGEMENT COMPANY
By: _______________ By:
______________________________________
Name: _______________
Title: _______________
Attest: WESTERN ASSET MANAGEMENT COMPANY
PTE LIMITED
By: _______________ By:
______________________________________
Name: _______________
Title: _______________
The foregoing is accepted by:
Attest: WESTERN ASSET PREMIER BOND FUND
By: _______________ By:
______________________________________
Name: _______________
Title: _______________
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