<PAGE>
Exhibit 23(g)(4)
----------------
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, MA 02171
Re: Western Asset Inflation Indexed Bond Portfolio
Ladies and Gentlemen:
This is to advise you that LM Institutional Fund Advisors I, Inc. (the
"Fund") has established a new series of shares to be known as Western Asset
Inflation Indexed Bond Portfolio (the "Portfolio"). In accordance with the
Additional Funds provision of Section 12 of the Custodian Contract dated as of
December 10, 1990, between the Fund and State Street Bank and Trust Company (the
"Contract"), the Fund hereby requests that you act as Custodian of the Portfolio
under the terms of the Contract. Attached as Annex I is a complete list as of
the date hereof of those Portfolios for which State Street will render services
as Custodian under the Contract.
Please indicate your acceptance of the foregoing by executing two copies of
this Letter Agreement, returning one to the Fund and retaining one copy for your
records.
LM INSTUTIONAL FUND
ADVISORS I, INC.
By:
----------------------------
Name: Marie K. Karpinski
Title: Vice President
Agreed to this 28th day of July, 2000
STATE STREET BANK AND TRUST COMPANY
By:
--------------------------------
Name:
Title:
<PAGE>
Annex I
Western Asset Government Money Market Portfolio
Western Asset Money Market Portfolio
Western Asset Intermediate Portfolio
Western Asset Intermediate Plus Portfolio
Western Asset Core Portfolio
Western Asset Core Plus Portfolio
Western Asset Inflation Indexed Bond Portfolio
Western Asset High Yield Portfolio
Western Asset Non-U.S. Fixed Income Portfolio
Western Asset Global Strategic Income Portfolio
Western Asset Enhanced Equity Portfolio
