ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, made this 10th day of February, 1994, by and
between Western Asset Trust, Inc., a Maryland Corporation, ("Fund"), and Xxxx
Xxxxx Fund Adviser, Inc., a Maryland corporation (the "Administrator"), having
its principal place of business at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000.
WHEREAS, The Fund is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940 ("1940 Act") and has
registered its shares of common stock for sale to the public under the
Securities Act of 1933; and
WHEREAS, the Fund has established nine separate portfolios, two of
which are known as the Intermediate Duration Portfolio and the Short Duration
Portfolio (referred to herein as the "Portfolios"), and may establish additional
portfolio in the future; and
WHEREAS, the Fund wishes to retain the Administrator to provide
administrative services to the Fund on behalf of each Portfolio; and
WHEREAS, the Administrator 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. The Fund hereby appoints Xxxx Xxxxx Fund Adviser, Inc. as
Administrator of the Fund and each Portfolio for the period and on the terms set
forth in this Agreement. The Administrator accepts such appointment and agrees
to render the services herein set forth, for the compensation herein provided.
2. The Fund shall at all times keep the Administrator fully informed
with regard to the securities owned by it, its funds available, or to become
available, for investment, and generally as to the condition of its affairs. It
shall furnish the Administrator with such other documents and information with
regard to the affairs of each Portfolio as the Administrator may from time to
time reasonably request.
3. Services on a Continuing Basis.
(a) Subject always to the control of the Board of
Directors of the Fund (the "Board") and to such
policies as the Board may determine, the
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Administrator agrees, at its expense, (1) to furnish
the management and administrative services necessary
for the operation of the Fund and handling its
shareholder relations, including overseeing
bookkeeping and accounting services and the
calculation and publication of each Portfolio's net
asset value, providing office space, equipment and
facilities, data processing, internal auditing and
clerical services (excluding determination of net
asset value); preparing reports to the Fund's
shareholders and tax returns; reports to and filing
with governmental bodies; and conducting relations on
behalf of the Fund with custodians, depositories,
transfer agents, registrar and dividend disbursing
and reinvestment plan agents, accountants, attorneys,
underwriters, insurers and banks, (ii) to pay all
salaries, fees and expenses of officers and directors
of the Fund who are affiliated persons of the
Administrator (except to the extent such persons are
employees of the Corporation's investment adviser),
and (iii) to furnish all necessary management
facilities, including salaries of personnel, required
for it to execute its duties faithfully.
(b) The Administrator shall oversee the maintenance of
all books and records required by the Investment
Company Act of 1940 and the rules and regulations
thereunder, as well as all other applicable federal
and state laws and regulations. In compliance with
the requirements of Rule 31a-3 under the Investment
Company Act of 1940, the Administrator hereby agrees
that any records which 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 Administrator further
agrees to arrange for the preservation of the records
required to be maintained by Rule 31a-1 under the
Investment Company Act of 1940 for the periods
prescribed by Rule 31a-2 under said Act.
(c) In the performance of its duties under this Contract,
the Administrator will comply with the provisions of
the Articles of Incorporation and By-laws of the Fund
and the stated investment objectives, policies and
restrictions of each Portfolio, and will use its best
efforts to safeguard and promote the welfare of the
Fund, and to comply with other policies which the
Board may from time to time determine.
(d) The Administrator shall act as liaison with the
Fund's independent public accountants and shall
provide account analyses, fiscal year summaries, and
other audit related schedules. The Administrator
shall take all reasonable action in the performance
of its obligations under this Agreement to assure
that
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the necessary information is made available to such
accountants for the expression of their opinion, as
such may be required by the Fund from time to time.
4. (a) The Administrator, at its own expense, shall provide
a system whereby information is supplied to
shareholders concerning their accounts and the
operation of the Fund. The Administrator shall also
provide, at its own expense, a system whereby orders
for purchases and redemption of Fund shares which are
received by the Fund or its distributor, Xxxx Xxxxx
Xxxx Xxxxxx, Incorporated, are promptly processed and
transmitted to the Fund's transfer agent. The
Administrator may delegate some or all of the
functions specified in this subparagraph to Xxxx
Xxxxx Xxxx Xxxxxx, Incorporated or another
appropriate person. The Administrator shall not have
the right to use any list of shareholders of the Fund
or any other list of investors which it obtains in
connection with its provisions of services under this
Agreement, nor shall the Administrator sell or
knowingly provide such list or lists to any
unaffiliated person.
(b) Other than as specifically indicated in this
Agreement, the Administrator shall not be responsible
for the Fund's expenses. Specifically, the
Administrator will not be responsible, except to the
extent of the reasonable compensation of employees of
the Fund whose services may be used by the
Administrator hereunder, for any of the following
expenses of the Fund, which expenses shall be borne
by the Fund: organizational expenses; legal
expenses; interest; taxes; governmental fees; fees,
voluntary assessments and other expenses incurred in
connection with membership in investment company
organizations; the cost (including brokerage
commissions or charges, if any) of securities
purchased or sold by the Fund and any losses incurred
in connection therewith; distribution fees, if any;
fees of custodians, subcustodians, transfer agents,
registrars or other agents for all services to the
Fund; expenses relating to the redemption or
repurchase of the Fund's shares; expenses of
registering and qualifying Fund shares for sale under
applicable federal and state law and maintaining such
registrations and qualifications; expenses or
preparing, setting in print, printing and
distributing prospectuses, proxy statements, reports,
notices, stock certificates and dividends to Fund
shareholders; costs of stationery; costs of
stockholders' and other meetings of the Fund;
compensation of officers and directors who are not
affiliated persons of Fund Adviser; fees and expenses
of independent auditors; traveling expenses of
directors of the Fund, if any; expenses for fidelity
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bonds and other insurance covering the Fund and its
officers and directors; costs of indemnification; and
any extraordinary expenses.
(c) The Administrator shall authorize and permit any of
its directors, officers and employees, who may be
elected as directors or officers of the Fund, to
serve in the capacities in which they are elected,
and shall bear their salary or other compensation and
expenses, if any.
5. No director, officer or employee of the Fund shall receive
from the Fund any salary or other compensation as such
director, officer or employee while he is at the same time a
director, officer or employee of the Administrator or any
affiliated company of the Administrator.
6. As compensation for the services performed and the facilities
furnished and expenses assumed by the Administrator, including
the services of any consultants or agents retained by the
Administrator, The Fund shall pay the Administrator, as
promptly as possible after the last day of each month, a fee,
calculated daily, of 0.05% annually of the daily net assets of
each Portfolio.
In the event that the Administrator's right to such fee from a
Portfolio commences on a date other than the first day of the
month, the fee from such Portfolio for such month shall be
based on the average daily net assets of that Portfolio in
that period from the date of commencement to the last day of
the month. If this Agreement is terminated with respect to a
Portfolio as on any date not the last day of a month, the fee
shall be paid as promptly as possible after such date of
termination, and shall be based on the average daily net
assets of that Portfolio in that period from the beginning of
such month to such date of termination. The average daily net
assets of each Portfolio shall in all cases be computed as of
such time as may be determined by the Board of Directors of
the Fund. The manner of calculating each Portfolio's average
daily net assets for the purpose of this Agreement shall be
determined by the Fund's Board of Directors and shall be
binding on the parties.
7. The Administrator shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the
Fund in connection with performance of this Agreement, except
a loss resulting from 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.
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8. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Administrator who may also be a director,
officer, or employee of the Fund, to engage in 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, or limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind, including investment advisory and management
services, to any other corporation, firm, individual or association.
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9. The Fund acknowledges that the Administrator may make payments
from the fees paid to it under this Agreement, from past
profits or from any other source available to it to other
persons, including but not limited to Western Asset Management
Company and Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, for
shareholder, administrative, advisory, recordkeeping and
distribution services provided by such persons in connection
with the Fund's shares.
10. As used in this Agreement, 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
Securities and Exchange Commission by any rule, regulation or
order.
11. This Agreement will become effective on the date first set
forth above, provided that it shall have been approved by the
Fund's Board of Directors and, unless sooner terminated as
provided for herein, shall continue in effect for two years
from the date of its execution and for successive annual
periods, provided that its continuance is specifically
approved annually by the Fund's Board of Directors, including
a majority of the directors of the Fund who are not parties to
this Agreement or "interested" persons as defined by the 1940
Act, of any such party ("Disinterested Directors") cast in
person at a meeting called for the purpose of voting on such
Agreement.
This Agreement is terminable without penalty by Western Asset,
by vote of the Fund's Board of Directors, by vote of a
majority (as defined in the 0000 Xxx) of the outstanding
voting securities of the Fund or by the Administrator, on not
less than 60 days' notice to the other party and may be
terminated immediately upon the mutual written consent of the
Administrator and the Fund. This Agreement will automatically
and immediately terminate in the event of its assignment.
12. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in
writing signed by
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the party against which enforcement of the change, waiver,
discharge or termination is sought.
13. If any provision of this Agreement shall 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 upon and shall inure to the
benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
[SEAL] WESTERN ASSET TRUST, INC.
Attest:
By: /s/ Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
[SEAL] XXXX XXXXX FUND ADVISER, INC.
Attest:
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxxxx
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