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 Limited ("Subadviser"),a corporation organized under English
laws, 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
Inflation 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 to 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:
I . 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
(d) (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;
(e) 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;
(f) The Trust's most recent prospectus (such prospectus,
as presently in effect, and all amendments and supplements thereto are herein
called the "Prospectus"); and
(g) 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").
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
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, Subadviser 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, Subadviser, beari ng 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 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
below (a "Sub-Subadviser") 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 11(a) of the Securities Exchange Act of 1934, as
amended, and Rule 1 1a2-2(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.
(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 3la-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 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, 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 representing 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 Acl of 1934,
as amended, and the rules and regulations thereunder.
l 0.. This Agreement shall become effective upon its execution,
and shall remain in full force and effect continuously thereafter
(unless tenninated 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 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 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 tenninate 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 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
Western Management Agreement shall have tenninated for any reason.
Any termination of this Agreement pursuant to Section I 0 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 I 940 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 Limited" (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 receive 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 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: A
Manager, U.S. Legal Affairs
Attest:
By: ..
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By:
Attest: SECURITY INVESTORS, LLC
By:
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By:
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The foregoing is accepted by:
Attest: WESTERN ASSET/CLAYMORE INFLATION-LINKED
OPPORTUNITIES & INCOME FUND
Xxxxxxx X. Xxxxxxx
Secretary
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
Attest: WESTERN ASSET MANAGEMENT
COMPANY LIMITED
Attest: SECURITY INVESTORS, LLC
By: --ic--
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By: Arny
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senior Vice
President &
Secretary
The foregoing is accepted by:
Attest: WESTERN ASSET/CLAYMORE INFLATION-LINKED
OPPORTUNITIES & INCOME FUND
By:
..
Megari
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