SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made this1st day of
April, 2016, by and between Xxxx Xxxxx Partners Fund Advisor, LLC, a Delaware
limited liability company (the "Manager"), and Western Asset Management
Company, a California corporation (the "Subadviser").
WHEREAS, the Manager has been retained by Western Asset Corporate
Loan Fund Inc. (formerly known as LMP Corporate Loan Fund Inc., the "Fund"),
a registered 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 Fund; and
WHEREAS, the Manager wishes to engage the Subadviser to provide certain
investment advisory services to the Fund, and the 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. In accordance with and subject to the Management Agreement
between the Fund and the Manager (the "Management Agreement"), the Manager
hereby appoints the Subadviser to act as Subadviser with respect to the
Fund for the period and on the terms set forth in this Agreement. The
Subadviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. The Manager shall cause the Subadviser 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 Manager shall furnish the
Subadviser with such other documents and information with regard to the
Fund's affairs as the Subadviser may from time to time reasonably request.
3. (a) Subject to the supervision of the Fund's
Board of Directors (the "Board") and the Manager, the Subadviser shall
regularly provide the Fund with respect to such portion of the Fund's
assets as shall be allocated to the Subadviser by the Manager 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 Prospectus and Statement of Additional Information. The
Subadviser 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 Fund's Articles of Incorporation 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 the Subadviser. The Subadviser is authorized
as the agent of the Fund 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. The Subadviser will place orders pursuant to its
investment determinations for the Fund either directly with the issuer
or withany 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 the Subadviser
or its affiliates exercise investment discretion. The Subadviser 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 the Subadviser 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 the Subadviser
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 the Subadviser's authority regarding
the execution of the Fund's portfolio transactions provided herein.
The Subadviser 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. The Subadviser 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 the Subadviser believes are appropriate or desirable in
performing its duties under this Agreement.
(b) The Fund hereby authorizes any entity or person
associated with the Subadviser 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, the Subadviser 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 the Subadviser or its affiliates is participating, or arrange for
purchases and sales of securities between the Fund and another account
advised by the Subadviser 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 Prospectus and Statement of Additional Information relative to
the Subadviser and its directors and officers.
4. The Subadviser may delegate to any other one or more
companies that the Subadviser controls, is controlled by, or is under
common control with, or to specified employees of any such companies,
certain of the Subadviser's duties under this Agreement, provided in each
case the Subadviser will supervise the activities of each such entity or
employees thereof, that such delegation will not relieve the Subadviser
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. The Subadviser 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, the
Subadviser 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. The Subadviser
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) The Subadviser, at its expense, shall supply
the Board, the officers of the Fund, and the Manager with all information
and reports reasonably required by them and reasonably available to the
Subadviser relating to the services provided by the Subadviser hereunder.
(b) The Subadviser 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, the Subadviser 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 Fund
shall
receive from the 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 the Subadviser or any affiliated company of the Subadviser,
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 the Subadviser's or any affiliated company's
staff.
8. As compensation for the services performed by the
Subadviser,
including the services of any consultants retained by the Subadviser, the
Manager shall pay the Subadviser out of the management 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 the Subadviser 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 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 net assets as the number of business days in such period
bears to the number of business days in such month. The 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. The Subadviser 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 the Subadviser against any liability to the
Manager or the Fund to which the Subadviser 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
"Subadviser" shall include any affiliates of the Subadviser performing
services for the Fund contemplated hereby and the partners, shareholders,
directors, officers and employees of the Subadviser and such affiliates.
10. Nothing in this Agreement shall limit or restrict the
right of any director, officer, or employee of the Subadviser who may
also be a Board member, officer, or employee of 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
theSubadviser 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 the Subadviser is considered at or about the same
time, transactions in such securities will be allocated among the
accounts in a manner deemed equitable by the Subadviser. Such
transactions may be combined, in accordance with applicable laws and
regulations, and consistent with the Subadviser'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 mean the net assets plus assets attributable to the
liquidation value of any outstanding preferred stock plus proceeds
of any outstanding borrowings used for leverage 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 in accordance
with the requirements of the 1940 Act and, unless sooner terminated
as provided herein, will continue in effect through November 30, 2017.
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 in the manner required by the 1940 Act.
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 the Subadviser, or by the
Subadviser upon not less than 90 days' written notice to the Fund and
the Manager, and will be terminated upon the mutual written consent of
the Manager and the Subadviser. This Agreement shall terminate
automatically in the event of its assignment by the Subadviser and
shall not be assignable by the Manager without the consent of
the Subadviser.
14. The Subadviser agrees that for any claim by it against
the Fund in connection with this Agreement or the services rendered
under this 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 Fund.
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 in the manner required
by the 1940 Act.
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.
No provision of this Agreement is intended to conflict with any
applicable law. 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 and assigns.
17. This Agreement does not, and is not intended to, create
any third-party beneficiary or otherwise confer rights, privileges,
claims or remedies upon any shareholder or other person other than
the parties (including the Fund) and their respective successors
and permitted assigns.
18. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the
State of New York without regard to conflicts of laws principles.
Any legal suit, action or proceeding related to, arising out of or
concerning this Agreement shall be brought only in the U.S. District
Court for the Southern District of New York, or if such action may
not be brought in that court, then such action shall be brought in
the Supreme Court of the State of New York sitting in New York
County (including its appellate division) (the "Designated Courts").
Each party (a) consents to jurisdiction in the Designated Courts;
(b) waives any objection to venue in either Designated Court
and (c) waives any objection that either Designated Court is an
inconvenient forum. For any action commenced in the Supreme
Court of the State of New York, application shall be submitted
to the Commercial Division.
19. Subject to the proviso of the first sentence of Section
9 of
this Agreement, the Subadviser shall not be liable for any losses
caused directly or indirectly by circumstances beyond the
Subadviser's reasonable control, including, without limitation,
government restrictions, exchange or market rulings, suspensions
of trading, acts of civil or military authority, national emergencies,
riots, terrorism, war, or such other event of similar nature, labor
difficulties, non-performance by a third party not hired or otherwise
selected by the Subadviser to provide services in connection with
this Agreement, natural disaster, casualty, elements of nature, fires,
earthquakes, floods, or other catastrophes, acts of God, mechanical
breakdowns, or malfunctions, failure or disruption of utilities,
communications, computer or information technology (including, without
limitation, hardware or software), internet, firewalls, encryption
systems, security devices, or power supply.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers thereunto duly authorized.
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By:
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
WESTERN ASSET MANAGEMENT COMPANY
By:
Name: Xxxx Xxxxxx
Title: Manager, U.S. Legal Affairs
The foregoing is acknowledged:
The undersigned officer of the Fund has executed this Agreement not
individually but in his/her capacity as an officer of the Fund. The Fund
does not hereby undertake, on behalf of the Fund or otherwise, any
obligation to the Subadviser.
WESTERN ASSET CORPORATE LOAN FUND INC.
By:
Name: Xxxx X. Trust
Title: President and Chief Executive Officer
ANNEX I
Not applicable.
SCHEDULE A
Western Asset Corporate Loan Fund Inc.
Date:
April 1, 2016
Fee:
The sub-advisory fee will be 70% of the management fee paid to Xxxx Xxxxx
Partners Fund Advisor, LLC, net of expense waivers and reimbursements.
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