UNDERWRITING AGREEMENT
This UNDERWRITING AGREEMENT, made this 10th day of August, 1990, by and
between Western Asset Trust, Inc., a Maryland corporation ("Corporation") and
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, a Maryland corporation (the
"Distributor").
WHEREAS, the Corporation has filed a registration statement with the
Securities and Exchange Commission for the purpose of registering as a series
type open-end, diversified investment company under the Investment Company Act
of 1940, as amended (the "1940 Act"), and for the purpose of registering the
shares of common stock of the Corporation (the "Shares") for sale to the public
under the Securities Act of 1933 (the "1933 Act"); and will register the Shares
as may be required by the provisions of various state securities laws; and
WHEREAS, the Corporation intends to offer for public sale distinct
series of Shares ("Series"), each corresponding to a distinct portfolio; and
WHEREAS, the Corporation wishes to retain the Distributor as the
principal underwriter in connection with the offering and sale of the Shares and
to furnish certain other services to the Fund as specified in this Agreement;
and
WHEREAS, this Agreement has been approved by a vote of the
Corporation's Board of Directors and certain disinterested directors in
conformity with Section 15(c) of the 1940 Act; and
WHEREAS, the Distributor is willing to act as principal underwriter and
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. The Corporation hereby appoints the Distributor as principal
underwriter in connection with the offering and sale of the Series. The
Corporation authorizes the Distributor, as agent for the Corporation, upon the
commencement of operations of any Series and subject to applicable federal and
state law and the Articles of Incorporation and By-Laws of the Corporation and
to such terms and conditions as the Corporation may specify: (a) to promote the
Series; (b) to solicit orders for the purchase of the Shares of the Series; and
(c) to accept orders for the purchase of the Shares on behalf of the
Corporation. The Distributor shall comply with all applicable federal and state
laws and offer the Shares of each Series on an agency or "best efforts" basis
under which the Corporation shall issue only such Shares as are actually sold.
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2. The public offering price of the Shares of each Series shall be the
net asset value per share (as determined by the Corporation) of the outstanding
Shares of the Series. The Corporation shall furnish the Distributor with a
statement of each computation of net asset value and of the details entering
into such computation.
3. As used in this Agreement, the term "Registration Statement" shall
mean the registration statement most recently filed by the Corporation with the
Securities and Exchange Commission and effective under the 1940 Act and 1933
Act, as such Registration Statement is amended by any amendments thereto at the
time in effect, and the terms "Prospectus" and "Statement of Additional
Information" shall mean, respectively, the form of prospectus and statement of
additional information with respect to the Series filed by the Corporation as
part of the Registration Statement, as they may be amended from time to time.
4. In connection with sales and offers of sale of Shares, the
Distributor shall give only such information and make only such statements or
representations as are contained in the Prospectus, Statement of Additional
Information, or in information furnished in writing to the Distributor by the
Corporation, and the Corporation shall not be responsible in any way for any
other information, statements or representations given or made by the
Distributor or its representatives or
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agents. Except as specifically provided in this Agreement, the Corporation shall
bear none of the expenses of the Distributor in connection with its offer and
sale of the Shares.
5. The Corporation agrees at its own expense to register the Shares
with the Securities and Exchange Commission, state and other regulatory bodies
as required, and to prepare and file from time to time such Prospectuses,
Statements of Additional Information, amendments, reports and other documents as
may be necessary to maintain the Registration Statement. Each Series shall bear
all expenses related to preparing and typesetting such Prospectuses, Statements
of Additional Information, and other materials required by law and such other
expenses, including printing and mailing expenses, related to such Series'
communications with persons who are shareholders of the Series.
6. The Corporation agrees to indemnify, defend and hold the
Distributor, its several officers and directors, and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Distributor, its officers or directors, or any such controlling person may
incur, under the 1933 Act or under common law or otherwise, arising out of or
based upon any alleged untrue
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statement of a material fact contained in the Registration Statement or arising
out of or based upon any alleged omission to state a material fact required to
be stated or necessary to make the Registration Statement not misleading,
provided that in no event shall anything contained in this Agreement be
construed so as to protect the Distributor against any liability to the
Corporation or its shareholders to which the Distributor 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 under this Agreement.
7. The Distributor agrees to indemnify, defend and hold the
Corporation, its several officers and directors, and any person who controls the
Corporation within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Corporation, its officers or directors, or any such controlling person may
incur, under the 1933 Act or under common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Corporation for use
in the Registration Statement or arising out of or based upon any alleged
omission to state a material fact in connection with such
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information required to be stated in the Registration Statement or necessary to
make such information not misleading.
8. The Corporation reserves the right at any time to withdraw all
offerings of the Shares of any or all Series by written notice to the
Distributor at its principal office.
9. The Corporation shall not issue certificates representing Shares
unless requested by a shareholder. If such request is transmitted through the
Distributor, the Corporation will cause certificates evidencing the Shares owned
to be issued in such names and denominations as the Distributor shall from time
to time direct, provided that no certificates shall be issued for fractional
Shares.
10. The Distributor agrees to act as agent for the Corporation to
receive and transmit promptly to the Corporation's transfer agent shareholder
requests for redemption of Shares.
12. The Distributor is an independent contractor and shall be agent for
the Corporation only in respect to the sale and redemption of the Shares.
13. The services of the Distributor to the Corporation under this
Agreement are not to be deemed exclusive. The Distributor shall be free to
render similar services or other
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services to others so long as its services hereunder are not impaired thereby.
The Corporation shall be free, in its sole discretion, to distribute its own
shares to prospective investors, and to repurchase its shares from investors,
without utilizing or notifying the Distributor.
13. As used in this Agreement, the terms "securities" and "net assets"
shall have the meanings ascribed to them in the Articles of Incorporation of the
Corporation; and the terms "assignment", "interested persons", 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 Securities and Exchange Commission by any rule, regulation or order.
14. Subject to the provisions of paragraphs 15 and 16 below, this
Agreement will remain in effect for one year from the date of its execution and
from year to year thereafter.
15. This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any penalty
by the Corporation or by the Distributor on sixty (60) days' written notice to
the other party. The Corporation may effect such termination by a vote of (i) a
majority of the Corporation's Board of Directors, (ii) a majority of the
directors who are not interested persons of the
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Corporation and who have no direct or indirect financial interest in the
operation of this Agreement (the "Disinterested Directors"), or (iii) a majority
of the outstanding voting securities of the Corporation.
16. This Agreement shall be submitted for approval to the Corporation's
Board of Directors annually and shall continue in effect only so long as
specifically approved annually (i) by a majority vote of the Corporation's Board
of Directors, and (ii) by the vote of a majority of the Disinterested Directors,
cast in person at a meeting called for the purpose of voting on such approval.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: WESTERN ASSET TRUST, INC.
By: /s/ Xxxx X. Xxxxx By: /s/ W. Xxxxxx Xxxxxxxxxx
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Attest: XXXX XXXXX XXXX XXXXXX, INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx, Xx.
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