Item 77Q1
Xxxx Xxxxx Partners Variable Diversified
Strategic Income Portfolio
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT (Agreement) is
made this 3rd day of November, 2008, by and
between Western Asset Management Company, a
corporation organized under the laws of
California (the Subadviser) and Western Asset
Management Company Pte. Ltd., a corporation
organized under the laws of Singapore (Western
Singapore).
WHEREAS, the Subadviser has been retained
by Xxxx Xxxxx Partners Fund Advisor, LLC to
provide investment advisory, management, and
administrative services to Xxxx Xxxxx Partners
Variable Income Trust (the Trust), a Maryland
business trust registered as a management
investment company under the Investment Company
Act of 1940, as amended (the 0000 Xxx) to
provide investment advisory, management, and
administrative services to the Trust with
respect to the series of the Trust designated in
Schedule A annexed hereto (the Fund); and
WHEREAS, the Subadviser wishes to engage
Western Singapore to provide certain investment
advisory services to the Fund, and Western
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. In accordance with and subject to the
Subadvisory Agreement between the Subadviser and
Xxxx Xxxxx Partners Fund Advisor, LLC with
respect to the Fund (the Subadvisory
Agreement), the Subadviser hereby appoints
Western Singapore to act as a subadviser with
respect to the Fund for the period and on the
terms set forth in this Agreement. Western
Singapore accepts such appointment and agrees to
render the services herein set forth, for the
compensation herein provided.
2. The Subadviser shall cause Western
Singapore 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 Funds affairs. The Subadviser shall furnish
Western Singapore with such other documents and
information with regard to the Funds affairs as
Western Singapore may from time to time
reasonably request.
3. (a) Subject to the supervision of the
Trusts Board of Trustees (the Board), Xxxx
Xxxxx Partners Fund Advisor, LLC and the
Subadviser, Western Singapore shall regularly
provide the Fund with respect to such portion of
the Funds assets as shall be allocated to
Western Singapore by the Subadviser 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
Funds investment objectives, policies and
restrictions, as stated in the Funds current
Prospectus and Statement of Additional
Information. Western Singapore 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 Trusts Declaration of Trust
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 Western Singapore. Western
Singapore is authorized as the agent of the
Trust 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.
Western Singapore will place orders pursuant to
its investment determinations for the Fund
either directly with the issuer or with any
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 Western Singapore or its affiliates
exercise investment discretion. Western
Singapore 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 Western Singapore 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 Western Singapore 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 Western Singapores authority regarding
the execution of the Funds portfolio
transactions provided herein. Western Singapore
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. Western Singapore 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 Western Singapore believes are
appropriate or desirable in performing its
duties under this Agreement.
(b) The Fund hereby authorizes any
entity or person associated with Western
Singapore 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, Western Singapore 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 Western Singapore or its affiliates is
participating, or arrange for purchases and
sales of securities between the Fund and another
account advised by Western Singapore 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 Funds then-current Prospectus and Statement
of Additional Information relative to Western
Singapore and its directors and officers.
4. Western Singapore may delegate to any
other one or more companies that Western
Singapore controls, is controlled by, or is
under common control with, or to specified
employees of any such companies, certain of
Western Singapores duties under this Agreement,
provided in each case Western Singapore will
supervise the activities of each such entity or
employees thereof, that such delegation will not
relieve Western Singapore 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. Western Singapore 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 0000 Xxx, Xxxxxxx Xxxxxxxxx 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 Funds request.
Western Singapore 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) Western Singapore, at its
expense, shall supply the Board, the officers of
the Trust, Xxxx Xxxxx Partners Fund Advisor, LLC
and the Subadviser with all information and
reports reasonably required by them and
reasonably available to Western Singapore
relating to the services provided by Western
Singapore hereunder.
(b) Western Singapore 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, Western Singapore shall not be
responsible for the Funds 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 Funds 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 Funds shares and servicing
shareholder accounts; expenses of registering
and qualifying the Funds 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 Funds 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 Funds 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 Funds Board members
and officers with respect thereto.
7. No member of the Board, officer or
employee of the Trust or Fund shall receive from
the Trust or 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 Western
Singapore or any affiliated company of Western
Singapore, 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
Western Singapores or any affiliated companys
staff.
8. As compensation for the services
performed by Western Singapore, including the
services of any consultants retained by Western
Singapore, the Subadviser shall pay Western
Singapore out of the subadvisory 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 Western Singapore 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 average daily 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 average daily net assets as the number of
business days in such period bears to the number
of business days in such month. The average
daily 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. Western Singapore 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 Western
Singapore against any liability to the
Subadviser, Xxxx Xxxxx Partners Fund Advisor,
LLC or the Fund to which Western Singapore 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 Western Singapore shall include any
affiliates of Western Singapore performing
services for the Trust or the Fund contemplated
hereby and the partners, shareholders,
directors, officers and employees of Western
Singapore and such affiliates.
10. Nothing in this Agreement shall limit
or restrict the right of any director, officer,
or employee of Western Singapore who may also be
a Board member, officer, or employee of the
Trust or 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 Western Singapore 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 Western Singapore is
considered at or about the same time,
transactions in such securities will be
allocated among the accounts in a manner deemed
equitable by Western Singapore. Such
transactions may be combined, in accordance with
applicable laws and regulations, and consistent
with Western Singapores policies and procedures
as presented to the Board from time to time.
11. For the purposes of this Agreement,
the Funds net assets shall be determined as
provided in the Funds then-current Prospectus
and Statement of Additional Information 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 Funds name on Schedule A annexed
hereto, provided that it shall have been
approved by the Trusts Board and, if so
required by the 1940 Act, by the shareholders of
the Fund in accordance with the requirements of
the 1940 Act and, unless sooner terminated as
provided herein, will continue in effect until
the second anniversary of the date of
effectiveness.. 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 (i)
by the Board or (ii) by a vote of a majority of
the outstanding voting securities of the Fund,
provided that in either event the continuance is
also approved by a majority of the Board members
who are not interested persons of any party to
this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such
approval.
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 Western Singapore, or by
Western Singapore upon not less than 90 days
written notice to the Fund and the Subadviser,
and will be terminated upon the mutual written
consent of the Subadviser and Western Singapore.
This Agreement shall terminate automatically in
the event of its assignment by Western Singapore
and shall not be assignable by the Subadviser
without the consent of Western Singapore.
14. Western Singapore agrees that for any
claim by it against the Fund in connection with
this Agreement or the services rendered under
the 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 Trust.
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, if
so required by the 1940 Act, by vote of the
holders of a majority of the Funds outstanding
voting securities.
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. 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.
17. This Agreement shall be construed and
the provisions thereof interpreted under and in
accordance with the laws of the State of New
York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed by their
officers thereunto duly authorized.
WESTERN ASSET
MANAGEMENT
COMPANY
By: /s/ W.
Xxxxxxx Xxxxxxx,
Xx.
Name: W.
Xxxxxxx Xxxxxxx,
Xx.
Title:
Manager, US Legal
and Corporate
Affairs
WESTERN ASSET
MANAGEMENT
COMPANY PTE.
LTD.
By: /s/ Xxxxxx
X. Xxxxxxxx
Name:
Xxxxxx X.
Giddings__
Title:
Manager,
International Legal
and Compliance
The foregoing is acknowledged:
The undersigned officer of the Trust has
executed this Agreement not individually but in
his/her capacity as an officer of the Trust. The
Trust does not hereby undertake, on behalf of
the Fund or otherwise, any obligation to Western
Asset Management Company Pte. Ltd.
XXXX XXXXX
PARTNERS
VARIABLE INCOME
TRUST
By: /s/ R. Xxx
Xxxxxx
Name: R.
Xxx Xxxxxx
Title:
Chairman, President
and Chief Executive
Officer
Xxxx Xxxxx Partners Variable Diversified Strategic Income Portfolio
Signature Page
SCHEDULE A
Xxxx Xxxxx Partners Variable Diversified
Strategic Income Portfolio Date: November
3, 2008
Fee:
The sub-advisory fee will be the following
percentage of the Funds Allocated Assets: 0.30%
