Letter of Intent Agreement

Transcription

1 PERMAL HEDGE STRATEGIES FUND II ( FUND ) Subscription IRA Distribution Agreement Request - Form Broker and Shares Letter of Intent Agreement This material must be preceded or accompanied by a prospectus. Investors should consider the Fund s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other information about the Fund, including information regarding purchases of shares of the Fund and repurchases of shares by the Fund. Please read the prospectus carefully before investing. For IRAs and Self-Directed Pension Plans, please note that the Custodian s name, address and Tax Identification Number must also be included below in the specific areas provided, and the Custodian must also sign this Application. For assistance in completing this Application, please call BNY Mellon Alternative Investment Services at , Monday through Friday, 8:30 am - 5:30 pm (EST). 1 INVESTOR INFORMATION Legal Name First Middle Last Additional Purchaser (Joint Tenant) First Middle Last Legal Domicile/Country of Residence Street Address City State Zip Code Telephone Number Fax Number Address Taxpayer Identification Number/Social Security Number Formation Date/Birth Date Joint Tenant Taxpayer Identification Number/Social Security Number Formation Date/Birth Date Nature of Business Tax Year-End of Investor Purchaser type: Bank Foundation Public Pension Plan IRA Charitable Trust Government Entity Taft Hartley/Labor Union Joint Tenant C Corporation Insurance Company Trust Joint Tenant in Common S Corporation Non-Profit Organization Individual Joint Tenant With Rights of Survivorship Limited Partnership Defined Benefit Plan Endowment Other: Limited Liability Company (If you checked this box, please indicate the U.S. federal income tax classification of the LLC below.) 1 1 If you are a single-member LLC that is regarded as an entity separate from its owner under Treasury regulations (section ) on the IRS form W-9, please check the appropriate box, in addition to LLC, to indicate your filing status (sole proprietor, corporation or partnership). TN PRML /15

2 2 INFORMATION FOR AUTHORIZED DISTRIBUTION OF STATEMENTS TO A THIRD PARTY Name of Third Party Street Address City State Zip Code Telephone Number Fax Number Address 3 FINANCIAL INTERMEDIARY INFORMATION, IF APPLICABLE Firm Name Branch Number Registered Representative s Name Registered Representative s Number Telephone Number Firm Street Address City, State Zip Code Registered Investment Advisor (If applicable) RIA Name RIA Number Branch Location (City, State) Branch Telephone Number 4 SUBSCRIPTION INFORMATION A minimum initial investment is required for the Fund. Broker Shares ($25,000 minimum initial investment)* NASDAQ Symbol PHSHX $ *Financial Intermediaries may impose separate minimum investments. Subscription Agreement 2 IRA Distribution Request Form

3 5 COST BASIS SELECTION Please review the list of available options and select your preferred reporting method. In general, you may change your cost basis method at any time. Please note, however, that if the Average Cost method is being used, you will only be permitted to revoke this method retroactively up to the point in time when the first covered shares subject to Average Cost are repurchased. Under the IRS regulations, any revocation of Average Cost after that time may only be applied prospectively for covered shares acquired in the future. For IRS reporting purposes, whatever method is used will only be applied to covered shares in your account. For any uncovered shares in your account, the Fund will continue to provide adjusted cost basis information to you on a voluntary basis using the Average Cost method, but this information will not be reported to the IRS. First In First Out ( FIFO ) This method enables you to sell oldest shares first. Last In First Out ( LIFO ) This method enables you to sell newest shares first. Highest In First Out ( HIFO ) This method enables you to sell shares purchased at the highest cost first. Lowest In First Out ( LOFO ) This method enables you to sell shares purchased at the lowest cost first. Specific Lot Identification ( SLID ) This method enables you to specify exactly which shares you are selling at the time of sale. Please check box below. If you do not select an option, the Fund s default method of Average Cost will be selected as your cost basis reporting method. Please check box below. If you do not select an option, the Fund s default method of Average Cost will be selected as your cost basis reporting method. ACST Average Cost LIFO Last in First Out LOFO Low Cost First Out FIFO First in First Out HIFO High Cost First Out SLID Specific Lot Identification* * If the option selected above is Specific Lot Identification (SLID) and you do not indicate the acquisition date and the specific shares to be repurchased or have insufficient funds in the lot specified, your repurchase will be processed using the First in First Out (FIFO) reporting method. 6 DIVIDEND OPTIONS Dividends: Reinvest Cash Capital Gains: Reinvest Cash *Unless you elect to receive distributions in cash (i.e., opt out), all dividends, including any capital gain dividends, on your Broker Shares will be automatically reinvested by The Bank of New York Mellon, as agent for the shareholders (the Plan Agent ), in additional Broker Shares under the Fund s Dividend Reinvestment Plan (the Plan ). You may elect not to participate in the Plan by contacting the Plan Agent. If you do not participate, you will receive all cash distributions paid by check mailed directly to you by The Bank of New York Mellon, as dividend paying agent. However, the Fund may elect to pay cash/share dividends and limit the aggregate amount of cash distributed to all of its shareholders, in which case shareholders electing to receive cash may nonetheless receive a portion of such distributions in Broker Shares of the Fund. In that event, such electing shareholders generally would be taxed on the full amount of any such distribution (including the portion payable in the Fund s Broker Shares). If you participate in the Plan, the number of Broker Shares you will receive will be determined by the current NAV of the Broker Shares. Broker Shares in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all Broker Shares you have received under the Plan. You may withdraw from the Plan (i.e., opt out) by notifying the Plan Agent in writing at BNY Investors Services c/o Permal Hedge Strategies Fund, 4400 Computer Drive, Westborough, MA or by calling the Plan Agent at Such withdrawal will be effective immediately if notice is received by the Plan Agent not less than ten business days prior to any dividend or distribution record date; otherwise such withdrawal will be effective as soon as practicable after the Plan Agent s investment of the most recently declared dividend or distribution on the Broker Shares. The Plan may be amended or supplemented by the Fund upon notice in writing mailed to shareholders at least 30 days prior to the record date for the payment of any dividend or distribution by the Fund for which the termination is to be effective. Automatically reinvesting dividends and distributions does not mean that you do not have to pay income taxes due upon receiving dividends and distributions. Investors will be subject to income tax on amounts reinvested under the Plan. The Fund reserves the right to amend or terminate the Plan if, in the judgment of the Board of Trustees, the change is warranted. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. Subscription Agreement 3 IRA Distribution Request Form

4 7 ELIGIBLE INVESTOR AND TAX-RELATED CERTIFICATION In order to purchase Fund shares, you must be an Eligible Investor as defined in the Fund s registration statement. If you are an authorized person/corporate officer making this certification on behalf of an investor, you must represent that the investor for whose account you are directly or indirectly acquiring Fund shares is an Eligible Investor. I hereby certify that the following categories describe me at the time I am applying to purchase shares of the Fund. Check all boxes that apply: A natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with my spouse in excess of $300,000 in each of those years and who has a reasonable expectation of reaching the same income level in the current year; A natural person who has a net worth or joint net worth with my spouse (excluding the value of my primary residence) at the time of purchase that exceeds $1,000,000 ( net worth for this purpose means total assets in excess of total liabilities); A trust with total assets in excess of $5,000,000 that was not formed for the purpose of investing in the Fund, and of which the person responsible for directing the investment of assets in the Fund has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment; An individual or entity having an account managed by an investment adviser registered under the Investment Advisers Act of 1940, as amended (the Advisers Act ) and the investment adviser is purchasing shares in a fiduciary capacity on behalf of the account; A trustee or executive officer of the Fund; An organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the Code ), a corporation, a Massachusetts or similar business trust, or partnership, that was not formed for the specific purpose of acquiring the shares, with total assets in excess of $5,000,000; An entity licensed, or subject to supervision, by U.S. federal or state examining authorities as a bank, or savings and loan association, (within the meaning of Regulation D under the Securities Act of 1933, as amended (the 1933 Act )) or an account for which a bank or savings and loan association is subscribing in a fiduciary capacity; A broker or dealer registered with the Securities and Exchange Commission pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; An investment company registered under the Investment Company Act of 1940, as amended ( 1940 Act ) or a business development company as defined in Section 2(a)(48) of the 1940 Act; A private business development company as defined in Section 202(a)(22) of the Advisers Act; An insurance company as defined in Section 2(13) of the 1933 Act; A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, as amended; A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, that has total assets in excess of $5,000,000; An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended ( ERISA ), if the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, the investment decisions are made solely by persons that meet one of the other criteria listed here; or An entity in which all of the equity owners are accredited investors under the 1933 Act. Subscription Agreement 4 IRA Distribution Request Form

5 IMPORTANT Tax Certification (Substitute W-9) Exemptions (see instructions) Exempt payee code (if any) Exemption from FATCA reporting code (if any) I understand that federal law requires financial institutions to obtain, verify and record information that identifies each person or entity that opens a new account. Account owners are asked to provide their names, addresses, dates of birth (if applicable) and other information, which may include driver s license numbers or other identification numbers, so that the institution can accurately verify their identity. If Legg Mason is unable to verify a client s identity within a reasonable time after the account opening, the firm may restrict or close the account. Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued and will provide the number to the fund as soon as it is issued), and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. person (including a U.S. resident alien). 4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. Certification Instructions: Strike through item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. If a real estate transaction, no requirement to complete item 2. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. If you are subject to backup withholding, check the box in front of the following statement. I have been notified by the IRS that I am subject to backup withholding. The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding. Primary Owner s/custodian s Signature Date Joint Owner s Signature (if applicable) If I am executing this Certificate on behalf of (i) an employee benefit plan within the meaning of Section 3(3) of ERISA or (ii) a plan that is described in and subject to the prohibited transaction rules under Section 4975 of the Code (each of the foregoing described in clauses (i) and (ii) being referred to as a Plan ), I represent and warrant that the fiduciary (within the meaning of Section 3(21) of ERISA and the regulations thereunder, or as defined under other applicable law) of such Plan has considered the following with respect to the Plan s investment in the Fund and has determined that, in review of such considerations, (a) the investment in the Fund is prudent for the Plan (taking into account any applicable liquidity and diversification requirements of ERISA); (b) the investment in the Fund is permitted under ERISA, the Code, other applicable law and the Plan s governing plan documents; (c) neither LMPFA, the Sub-Adviser nor any of their affiliates has acted as a fiduciary under ERISA or other applicable law with respect to such purchase; (d) no advice provided by LMPFA, the Sub-Adviser or any of their affiliates has formed a primary basis for any investment decision by such Plan interest holder in connection with such purchase; and (e) the purchase, holding and disposition of the interest in the Fund will not result in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or any materially similar provisions of other law for which an exemption is not available. I understand that the Fund may repurchase the investment at certain times and under certain conditions set forth in the Prospectus. I understand that all of the foregoing certifications, which are made under penalty of perjury, may be disclosed to the IRS by the Funds and that any false statement contained herein could be punished by fine and/or imprisonment. I understand that the Fund and its affiliates are relying on the certification and agreements made in determining my qualification and suitability as a shareholder in the Fund. I understand that an investment in the Fund is not appropriate for, and may not be acquired by, any person who cannot make this certification, and agree to indemnify Legg Mason Partners Fund Advisor, LLC and its affiliates (collectively Legg Mason ) and hold such persons harmless from any liability that the Fund and they may incur as a result of this certification being untrue in any respect. I attest to the accuracy of all documents required to be attached to this Application as set forth in the section Other Required Documents. I understand that it may be a violation of state and federal law for me to provide this certification if I know that it is not true. I Date Subscription Agreement 5 IRA Distribution Request Form

6 have read the Prospectus of the Fund, including the shareholder qualification and shareholder suitability provisions and the disclosure regarding potential conflicts of interest contained therein, and by purchasing Shares, I acknowledge and assent to the existence of such potential conflicts and the Fund s operation in the face thereof. I understand that an investment in the Fund involves a considerable amount of risk and that some or all of the investment may be lost. I understand that an investment in the Fund is suitable only for shareholders who can bear the risks associated with the limited liquidity of the investment and should be viewed as a long-term investment. Signature of Investor Date Name of Investor Signature of Joint Tenant (if applicable) Date Name of Joint Tenant (if applicable) 8 FINANCIAL INTERMEDIARY AUTHORIZED PERSON Authorized Person / Corporate Officer Executing on Behalf of an Investor Signature Date Name and Title Please check the appropriate box below: Corporate Officer Financial Advisor Registered Investment Advisor* *Registered Investment Advisors must establish an agreement with Legg Mason to offer the Fund. *Registered Investment Advisors must provide the Investment Management Agreement (IMA) with each submitted application. Subscription Agreement 6 IRA Distribution Request Form

7 Mailing instructions for Application Applications for investment at the next investment date must be received by the 8th day (or immediately preceding business day) of the month preceding the applicable investment date. Please forward the completed Application as follows: BNY Mellon 4400 Computer Drive Attn: Permal Hedge Strategies Fund Westborough, MA Fax instructions Please fax documents to BNY Mellon Alternative Investment Services at (508) All Applications and related subscription documents will be returned if not accepted. Funds supporting the applicable purchase of shares must be wired by the 3rd day (or immediately preceding business day) of the month preceding the applicable investment date. Please refer to the bank wire instructions below. Wiring instructions Bank wires should be sent to: The Bank of New York 1 Wall Street, New York ABA# Account Number: Account Name: Permal Hedge Strategies Fund Investors are reminded that FINRA offers BrokerCheck, a tool to help investors check the background of Investment Professionals and Firms. Investors can call the Broker/Check Hotline Number: or go online FINRA also offers an investor brochure which describes FINRA BrokerCheck Legg Mason Investor Services, LLC. Member FINRA, SIPC PRML /15 TN Subscription Agreement 7 IRA Distribution Request Form

8 AGREEMENT Ladies and Gentlemen: (a) We, Legg Mason Investor Services LLC (the Distributor ) serve as distributor to Permal Hedge Strategies Fund I, (the "Fund"). The Fund is registered as an investment company under the Investment Company Act of 1940, as amended (the 1940 Act ) and meets the requirements for use of Form N-2 under the Securities Act of 1933, as amended (the Securities Act ), the 1940 Act, and the rules and regulations of the Securities and Exchange Commission ( SEC ) under each such Act relating to Form N-2 (or of such successor form as the SEC may adopt). The Fund is a feeder Fund in a master-feeder structure and invests substantially all of its investable assets in Permal Hedge Strategies Portfolio, a Maryland statutory trust. The Fund has filed with the SEC a Registration Statement on Form N-2 pursuant to Section 8(b) of the 1940 Act and is duly registered as a closed-end management investment company. The Prospectus conforms, and any further amendments or supplements to the Registration Statement or Prospectus will conform, in all material respects with the Securities Act and 1940 Act and the rules and regulations thereunder. As used in this Agreement, (i) Registration Statement shall mean any registration statement under the 1940 Act and Securities Act on Form N-2 relating to Fund shares (the Shares ), including all exhibits thereto as of the Effective Date of the most recent post-effective amendment thereto; (ii) Effective Date shall mean the most recent date that the Registration Statement or any post-effective amendment thereto becomes effective; and (iii) Prospectus shall mean any prospectus (including any statement of additional information) relating to the Shares, filed with the SEC pursuant to Rule 497 under the Securities Act or, if no filing pursuant to Rule 497 is required, the form of final prospectus (including any statement of additional information) relating thereto included in any Registration Statement, in each case together with any amendments or supplements thereto. You,, are an investment adviser [(the Agent ) You are appointed as an agent of the Distributor for an indefinite period of time (the Offering Period ) for the purpose of finding acceptable subscribers ( Customers ) that You reasonably believe, based upon the information provided in the applicable subscription agreement or similar purchase agreement which shall be in a form supplied or approved in writing by the Distributor ( Subscription Agreement ), are eligible to subscribe for Shares. 1. In connection with any recommendation, you agree that you are solely responsible for evaluating and determining whether the investment the Fund is an appropriate investment for the customer based on Customer s objectives and risk profile. You may distribute the Registration Statement and the Prospectus, as well as all of the sales materials approved for use on behalf of the Fund ( Sales Materials ) relating to the Shares (the Registration Statement, the Prospectus and the Sales Materials, as the same may be amended or supplemented, are referred to herein collectively as the Offering Materials ) to potential investors, provided that You shall obtain representations from each customer as to its eligibility to invest in the Fund in connection with such Customer s subscription for Shares. You agree to only sell Fund Shares to Eligible Investors, as defined in the Fund s BUSDOCS/

9 Prospectus. You agree to have appropriate procedures to confirm that such representations are true and accurate at the time the representation is made. The Distributor will provide, or cause to be provided, all Offering Materials to be given by the Agent to such investors and Customers. 2. You will conduct your activities in accordance with (i) the terms and conditions set forth in the Offering Materials, in each case as may be amended from time to time, (ii) applicable law and regulation and (iii) the terms of this Agreement.. 3. You agree and warrant to disclose your compensation, if any, under this Agreement, together with any other compensation you receive in connection with your Customers investments in Fund Shares, to your Customers as required by applicable laws and regulations and to the extent necessary to ensure that your Customers fully understand all such compensation and any conflicts of interest related to your receipt of such compensation. You also agree and warrant that your Customers will authorize your compensation and that your compensation, together with all other compensation for your services, will not be excessive or unreasonable. 4. All purchases subject to this Agreement shall be made by your Customers and not by you as principal or agent on their behalf. In no transaction shall you have any authority to act as agent for the Funds, for us or for our affiliates. 5. You will comply with all applicable laws in marketing and selling the Shares. In addition, in connection with subscriptions for Shares, You agree that all Customers shall purchase Fund Shares only pursuant to a Subscription Agreement. All purchase orders received from your Customers must comply with any other requirements for such purchase, and are subject to acceptance and confirmation by us, the Fund, and the Fund s transfer agent. We, the Fund, or the Fund s transfer agent may in our or their sole discretion reject any purchase orders in whole or in part. Orders received from your Customers will be accepted only at the public offering price per share (i.e. the net asset value per share plus the applicable front-end sales charge, if any) applicable to each order, and all orders for redemption of any shares shall be executed at the net asset value per share less any contingent deferred sales charge and any other fee or charge, if any, in each case as set forth in the Prospectus. 6. You agree that you will not recommend the purchase of Shares by your Customers except under circumstances that will result in compliance with the applicable Federal and state securities laws, the applicable rules and regulations thereunder and the rules and regulations of applicable regulatory agencies or authorities. 7. We shall inform you as to the states or other jurisdictions in which the Fund Shares have been qualified for sale under, or are exempt from the requirements of, the respective securities laws of such states. You agree to recommend the purchase of Shares by your Customers only in the states and other jurisdictions in which we have indicated that offers and sales of Shares of such Series may be made. 8. We and the Fund reserve the right, without notice, to suspend sales or withdraw the offering of any Shares entirely. BUSDOCS/

10 9. We shall have full authority to take such action as we may deem advisable in respect of all matters pertaining to the offering of Shares. We shall be under no liability to you except for lack of good faith and for obligations expressly assumed by us herein. 10. You agree that it is your responsibility to provide proper instruction, training and supervision of appropriate personnel in order that shares of the Fund will be recommended only in accordance with the terms and conditions of this Agreement and with all applicable laws and will be consistent with the policies of the Fund as set forth in the Prospectus and the Fund s Subscription Agreement. You also agree that it is your responsibility to assure that your personnel are properly licensed, certified and familiar with the Funds. 11. You represent that you have policies, procedures and internal controls in place that are reasonably designed to comply with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 (the PATRIOT Act ), including a customer identification program, and the regulations administered by the U.S. Department of the Treasury s Office of Foreign Assets Control ( OFAC ). You will use reasonable efforts to cooperate with us, the Fund or their agents in assuring compliance with applicable anti-money laundering and anti-terrorism laws, rules and regulations, to the extent permitted by applicable law. 12. You represent that you are a corporation duly organized, validly existing and in good standing under the laws of the State of and that you are an investment adviser registered under the Investment Advisers Act of 1940, as amended (the Advisers Act ), or if exempt from such registration under the Advisers Act, are registered as an investment adviser under the laws of any state for which such registration is required. You further represent (a) that you are authorized and empowered to enter into this Agreement, that you are qualified and licensed as required (or is otherwise exempt) in all applicable jurisdictions to engage in the activities described herein and that you are not prohibited pursuant to the provisions of the Employee Retirement Income Security Act of 1974 from soliciting investors for the Funds or from receiving compensation in connection therewith and (b) that you will continue to be so licensed, qualified and authorized throughout the term of this Agreement. You additionally represent that you are either (i) exempt from registration as a broker dealer under applicable federal and state laws, or that you are (ii) registered as a broker dealer under applicable federal and state laws and a member in good standing of the Financial Industry Regulatory Authority, Inc. ("FINRA"), and are a member in good standing of the Securities Investor Protection Corporation ("SIPC"). You further represent and warrant that you are not subject to an SEC order issued under Section 203(f) of the Advisers Act; you have not been convicted within the previous ten years of any felony or misdemeanor involving conduct described in Section 203(c)(2)(A)-(D) of the Act; you have not been found by the SEC to have engaged, or have been convicted of engaging, in any of the conduct specified in paragraphs (1), (4) or (5) of Section 203(e) of the Act; and you are not subject to an order, judgment or decree described in Section 203(e)(3) of the Act. You agree to immediately advise us in writing if these representations are no longer accurate with respect to you or any of your officers, directors, employees or agents or if an inquiry or investigation is commenced that could lead to any such results, or if you are unable to comply with any of the representations specified herein at any time while this Agreement is in effect. 13. (a) You shall indemnify and hold harmless the Distributor, the Fund, and their directors, officers, agents, employees and affiliates (each an Indemnified Party ) from BUSDOCS/

11 and against any loss, claim, damage or liability, and any action in respect thereof, to which the Indemnified Party may become subject or otherwise, insofar as such loss, claim, damage, liability or action arises out of or results from any material breach by You of the representations, warranties or covenants contained in this Agreement save to the extent that any such loss, claim, damage, liability or action relates to or arises out of the Indemnified Parties own gross negligence, fraud, willful misfeasance, bad faith or breach of obligations and duties under this Agreement. (b) Promptly after receipt by Indemnified Party under this Section of notice of any claim or the commencement of any action, such Indemnified Party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section, notify such indemnifying party in writing of the claim or the commencement of that action provided that the failure to notify the indemnifying party will not relieve such indemnifying party from any liability which it may have to an Indemnified Party unless, and solely to the extent that, such failure materially affects such indemnifying party s case. If any such claim or action is brought against any Indemnified Party, and it shall notify an indemnifying party thereof, the indemnifying party shall be entitled to participate therein, and, to the extent that it wishes, jointly with any other similarly notified party, to assume the defense thereof, with counsel reasonably satisfactory to the Indemnified Party (which consent may not be unreasonably withheld or delayed). After notice from the indemnifying party to the Indemnified Party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the Indemnified Party under this Section for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation in connection with the defense. The Indemnified Party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such Indemnified Party unless (i) the employment of counsel by the Indemnified Party has been authorized in writing by the indemnifying party, (ii) a conflict or potential conflict exists (based on advice of counsel to the Indemnified Party) between the Indemnified Party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the Indemnified Party), or (iii) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. An indemnifying party will not be liable for any settlement of any action or claim effected without its written consent (which consent will not be unreasonably withheld or delayed). 14. Each party hereto has the right to terminate this Agreement upon notice to the other party on 60 days prior written notice. Notwithstanding the above, this Agreement will terminate automatically upon the termination of any Platform Agreement between the Distributor and a registered broker-dealer through with You place orders to purchase Fund shares. 15. This Agreement may be altered or amended only by written instrument executed and mutually agreed to by us and you. 16. All notices to either party shall be duly given if mailed, couriered, ed or telecopied to the address specified by both parties below: BUSDOCS/

12 You: Legg Mason Investor Services, LLC: c/o Attn: Phone: Fax: c/o Legg Mason Investor Services, LLC 100 First Stamford Place, 5 th Floor Stamford, CT Attn: Business Development Fax: You represent and warrant that you shall and shall ensure that its officers, employees, representatives and affiliates who are involved in the provision of services under, and performance of, this Agreement comply with all applicable anti-bribery and corruption laws, regulations, codes and guidelines. You acknowledges that the Distributor and/or its affiliates are subject to the United States Foreign Corrupt Practices Act 1977 and/or the UK Bribery Act 2010 (the Acts ) and accordingly agrees to ensure that the activities performed by it, its officers, employees, representatives, delegates and affiliates under this Agreement shall at all times (i) comply with the requirements of the Acts; and (ii) not directly or indirectly cause the Fund, the Distributor, or any of their affiliates to be in breach of the Acts. For avoidance of doubt, any breach of this Section by You will be considered a material breach of its obligations under this Agreement. 18. This Agreement shall be binding upon both parties hereto when signed by us and accepted by you in the space provided below; provided, however, that you shall not have any obligations hereunder other than in respect of the duties and agreements expressly undertaken and made by you herein. 21. This Agreement and the terms and conditions set forth herein shall be governed by, and construed in accordance with, the laws of the State of New York. For the purpose of referring to this Agreement, the date of this Agreement shall be the date of acceptance by Legg Mason Investor Services, LLC. BUSDOCS/

13 Accepted: Firm Name: Accepted By (signature): Name (print): Title: Date: Accepted: Legg Mason Investor Services, LLC Accepted By (signature): Name (print): Title: Date: BUSDOCS/

14 OFFICER S CERTIFICATE FOR USE WITH DISTRIBUTORS, OTHER INTERMEDIARIES AND SERVICE PROVIDERS OF LEGG MASON INVESTOR SERVICES, LLC As part of its general due diligence program, Legg Mason Investor Services, LLC periodically undertakes a due diligence review of its service providers that are used by the firm to distribute and administer its products. Please complete the following questionnaire, which is designed to obtain information about the compliance controls and procedures that your firm has in place. When complete, please fax a copy of the form along with relevant supporting documents (if any) to Legg Mason Investor Services, LLC If you have any questions, please contact Zenaida Moncayo at (203) NAME OF FIRM: Type or type(s) of business(e)s (please check all that apply): Third Party Administrator Broker-Dealer Bank Registered Investment Adviser Insurance Company Other Please list the 3 most senior people at firm. (e.g. CEO, President, Owner, COO, CFO) *** Please Print Clearly 1. Is the firm or any owner holding 10% or more of its equity, or any of its senior management officials (directors, executive officers or similar officials), or any of its affiliates, included on the Office of Foreign Assets Control s ( OFAC ) list of Specially Designated Nationals (SDN list) or country based sanctions programs ( Yes No 2. Has the firm established and implemented policies, procedures, and internal controls reasonably designed to achieve compliance with all applicable anti-money laundering laws and regulations, including the Bank Secrecy Act and the USA PATRIOT Act? Yes No If the answer to Question 2 is Yes, has your firm: (a) Implemented a customer identification program Yes No (b) Appointed an AML Compliance Officer Yes No (c) Implemented an employee AML training program Yes No (d) Established written AML procedures Yes No (e) Implemented an independent audit program to test the AML program Yes No (f) Implemented procedures to identify foreign financial institutions Yes No (g) Implemented procedures to identify and report suspicious activities Yes No 3. Does the firm have a process to check accounts against the U.S. Treasury Department s Office of Foreign Assets Control (OFAC) list of Specially Designated Nationals (SDNs) or country based sanctions programs? Yes No Version: June 28, 2010 Broker Dealer Page 1 of 4

15 4. Do you have controls in place to provide reasonable assurance that market timing of our mutual funds is detected? Yes No 5. Do you have a policy to block accounts of market timers that you identify/detect to prevent further market timing/frequent trading? Yes No 6. Are you able to block trading activity on accounts we identify as market timers? Yes No 7. Do you have controls in place to provide reasonable assurance that late trading is prevented? Yes No 8. Do you have in place adequate procedures to apply prospectus and/or SAI provisions (including the application of breakpoints, B share limits, and any required point of sale disclosures)? Yes No 9. Do you have procedures in place to assure that at the time of sale the investor receives a current prospectus (including any supplements) Yes No 10. Will any preferential treatment be provided by your firm relating to the sale of our mutual funds? Yes No a) If Yes, please describe the nature of the preferential treatment. 11. Has your firm been fined or sanctioned by any regulatory agency or involved in a court proceeding concerning your securities business in the last 3 years? Does your firm or any or its officers have pending litigation concerning your securities business? Yes No If Yes, please explain. (Note: If your firm is FINRA registered, only report regulatory offenses that are not listed on your current FINRA report): Version: June 28, 2010 Broker Dealer Page 2 of 4

16 Accordingly, your authorized signature below provides acknowledgement of compliance by your firm. Please explain negative responses to questions #2 through 9 below: By signing below, I certify that I am authorized to sign for my institution. Review completed by: Signature Date: Title/Function: Phone (Required) Note that the signatory above should be a Vice President (V. P.) level (or equivalent) or higher. Titles such as Supervisor, Assistant, Administrator (and equivalents) are not authorized signatories. Address: If you have any questions, please contact the Zenaida Moncayo (203) Version: June 28, 2010 Broker Dealer Page 3 of 4

17 FIRM NAME: CONTACT INFORMATION (for BD) Operations Contacts Primary Operations Contact/Back Office Secondary Operations/Back Office Contact Marketing Contacts Primary Marketing Contact Secondary Marketing Contact Name: Name: Title: Title: Telephone: Phone: Fax Fax: Address: Address: Compliance / Due Diligence Primary Compliance Contact Secondary Compliance Contact Gatekeeper Primary Gatekeeper Contact Name: Name: Title: Title: Telephone: Phone: Fax: Fax: Address: Address: Version: June 28, 2010 Broker Dealer Page 4 of 4