INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 19th day of July, 2006, between
TEMPLETON GLOBAL INVESTMENT TRUST (hereinafter referred to as the "Trust"), on
behalf of Xxxxxxxxx Emerging Markets Small Cap Fund (the "Fund"), and XXXXXXXXX
ASSET MANAGEMENT LTD. (hereinafter referred to as the "Manager").
In consideration of the mutual agreements herein made, the Trust, on behalf
of the Fund, and the Manager understand and agree as follows:
(1) The Manager agrees, during the life of this Agreement, to manage
the investment and reinvestment of the Fund's assets consistent
with the provisions of the Trust Instrument of the Trust and the
investment policies adopted and declared by the Trust's Board of
Trustees. In pursuance of the foregoing, the Manager shall make
all determinations with respect to the investment of the Fund's
assets and the purchase and sale of its investment securities,
and shall take such steps as may be necessary to implement those
determinations. Such determinations and services shall include
determining the manner in which any voting rights, rights to
consent to corporate action and any other rights pertaining to
the Fund's investment securities shall be exercised, subject to
guidelines adopted by the Board of Trustees. It is understood
that all acts of the Manager in performing this Agreement are
performed by it outside the United States.
(2) The Manager is not required to furnish any personnel, overhead
items or facilities for the Fund, including trading desk
facilities or daily pricing of the Fund's portfolio.
(3) The Manager shall be responsible for selecting members of
securities exchanges, brokers and dealers (such members, brokers
and dealers being hereinafter referred to as "brokers") for the
execution of the Fund's portfolio transactions consistent with the
Trust's brokerage policies and, when applicable, the negotiation
of commissions in connection therewith.
All decisions and placements shall be made in accordance with the
following principles:
A. Purchase and sale orders will usually be placed with brokers which
are selected by the Manager as able to achieve "best execution"
of such orders. "Best execution" shall mean prompt and reliable
execution at the most favorable security price, taking into
account the other provisions hereinafter set forth. The
determination of what may constitute best execution and price in
the execution of a securities transaction by a broker involves a
number of considerations, including, without limitation, the
overall direct net economic result to the Fund (involving both
price paid or received and any commissions and other costs paid),
the efficiency with which the transaction is effected, the
ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute
possibly difficult transactions in the future, and the financial
strength and stability of the broker. Such considerations are
judgmental and are weighed by the Manager in determining the
overall reasonableness of brokerage commissions.
B. In selecting brokers for portfolio transactions, the Manager shall
take into account its past experience as to brokers qualified to
achieve "best execution," including brokers who specialize in any
foreign securities held by the Fund.
C. The Manager is authorized to allocate brokerage business to brokers
who have provided brokerage and research services, as such
services are defined in Section 28(e) of the Securities Exchange
Act of 1934 (the "1934 Act"), for the Fund and/or other accounts,
if any, for which the Manager exercises investment discretion (as
defined in Section 3(a)(35) of the 0000 Xxx) and, as to
transactions for which fixed minimum commission rates are not
applicable, to cause the Fund to pay a commission for effecting a
securities transaction in excess of the amount another broker
would have charged for effecting that transaction, if the Manager
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, viewed in terms of either that
particular transaction or the Manager's overall responsibilities
with respect to the Fund and the other accounts, if any, as to
which it exercises investment discretion. In reaching such
determination, the Manager will not be required to place or
attempt to place a specific dollar value on the research or
execution services of a broker or on the portion of any
commission reflecting either of said services. In demonstrating
that such determinations were made in good faith, the Manager
shall be prepared to show that all commissions were allocated and
paid for purposes contemplated by the Trust's brokerage policy;
that the research services provide lawful and appropriate
assistance to the Manager in the performance of its investment
decision-making responsibilities; and that the commissions paid
were within a reasonable range. Whether commissions were within a
reasonable range shall be based on any available information as
to the level of commission known to be charged by other brokers
on comparable transactions, but there shall be taken into account
the Trust's policies that (i) obtaining a low commission is
deemed secondary to obtaining a favorable securities price, since
it is recognized that usually it is more beneficial to the Fund
to obtain a favorable price than to pay the lowest commission;
and (ii) the quality, comprehensiveness and frequency of research
studies that are provided for the Manager are useful to the
Manager in performing its advisory services under this Agreement.
Research services provided by brokers to the Manager are
considered to be in addition to, and not in lieu of, services
required to be performed by the Manager under this Agreement.
Research furnished by brokers through which the Fund effects
securities transactions may be used by the Manager for any of its
accounts, and not all research may be used by the Manager for the
Fund. When execution of portfolio transactions is allocated to
brokers trading on exchanges with fixed brokerage commission
rates, account may be taken of various services provided by the
broker.
D. Purchases and sales of portfolio securities within the United
States other than on a securities exchange shall be executed with
primary market makers acting as principal, except where, in the
judgment of the Manager, better prices and execution may be
obtained on a commission basis or from other sources.
(4) The Fund agrees to pay to the Manager a monthly fee in dollars at
an annual rate of 1.25% of the first $1 billion of the daily net
assets of the Fund during the month preceding each payment,
reduced as follows: on such net assets in excess of $1 billion up
to and including $5 billion, a monthly fee equal on an annual
basis to 1.20%; on such net assets in excess of $5 billion up to
and including $10 billion, a monthly fee equal on an annual basis
to 1.15%; on such net assets in excess of $10 billion up to and
including $15 billion, a monthly fee equal on an annual basis to
1.10%; on such net assets in excess of $15 billion up to $20
billion, a monthly fee equal on an annual basis to 1.05%; on such
net assets in excess of $20 billion, a monthly fee equal on an
annual basis to 1.00%, payable at the end of each calendar month.
The Manager may waive all or a portion of its fees provided for
hereunder and such waiver shall be treated as a reduction in
purchase price of its services. The Manager shall be
contractually bound hereunder by the terms of any publicly
announced waiver of its fee, or any limitation of the Fund's
expenses, as if such waiver or limitation were fully set forth
herein.
Notwithstanding the foregoing, if the total expenses of the Fund
(including the fee to the Manager) in any fiscal year of the Trust
exceed any expense limitation imposed by applicable State law, the
Manager shall reimburse the Fund for such excess in the manner and to
the extent required by applicable State law. The term "total
expenses," as used in this paragraph, does not include interest,
taxes, litigation expenses, distribution expenses, brokerage
commissions or other costs of acquiring or disposing of any of the
Fund's portfolio securities or any costs or expenses incurred or
arising other than in the ordinary and necessary course of the Fund's
business. When the accrued amount of such expenses exceeds this limit,
the monthly payment of the Manager's fee will be reduced by the amount
of such excess, subject to adjustment month by month during the
balance of the Trust's fiscal year if accrued expenses thereafter fall
below the limit.
(5) This Agreement shall be effective as of the date first written
above and shall continue in effect until April 30, 2008. If not
sooner terminated, this Agreement shall continue in effect for
successive periods of 12 months each thereafter, provided that
each such continuance shall be specifically approved annually by
the vote of a majority of the Trust's Board of Trustees who are
not parties to this Agreement or "interested persons" (as defined
in the Investment Company Act of 1940 (the "1940 Act")) of any
such party, cast in person at a meeting called for the purpose of
voting on such approval and either the vote of (a) a majority of
the outstanding voting securities of the Fund, as defined in the
1940 Act, or (b) a majority of the Trust's Board of Trustees as a
whole.
(6) Notwithstanding the foregoing, this Agreement may be terminated by
either party at any time, without the payment of any penalty, on
sixty (60) days' written notice to the other party, provided that
termination by the Trust is approved by vote of a majority of the
Trust's Board of Trustees in office at the time or by vote of a
majority of the outstanding voting securities of the Fund (as
defined by the 1940 Act).
(7) This Agreement will terminate automatically and immediately in the
event of its assignment (as defined in the 1940 Act).
(8) In the event this Agreement is terminated and the Manager no
longer acts as Manager to the Fund, the Manager reserves the
right to withdraw from the Fund the use of the name "Xxxxxxxxx"
or any name misleadingly implying a continuing relationship
between the Fund and the Manager or any of its affiliates.
(9) Except as may otherwise be provided by the 1940 Act, neither the
Manager nor its officers, directors, employees or agents shall be
subject to any liability for any error of judgment, mistake of
law, or any loss arising out of any investment or other act or
omission in the performance by the Manager of its duties under
the Agreement or for any loss or damage resulting from the
imposition by any government of exchange control restrictions
which might affect the liquidity of the Fund's assets, or from
acts or omissions of custodians, or securities depositories, or
from any war or political act of any foreign government to which
such assets might be exposed, or for failure, on the part of the
custodian or otherwise, timely to collect payments, except for
any liability, loss or damage resulting from willful misfeasance,
bad faith or gross negligence on the Manager's part or by reason
of reckless disregard of the Manager's duties under this
Agreement. It is hereby understood and acknowledged by the Trust
that the value of the investments made for the Fund may increase
as well as decrease and are not guaranteed by the Manager. It is
further understood and acknowledged by the Trust that investment
decisions made on behalf of the Fund by the Manager are subject
to a variety of factors that may affect the values and income
generated by the Fund's portfolio securities, including general
economic conditions, market factors and currency exchange rates,
and that investment decisions made by the Manager will not always
be profitable or prove to have been correct.
(10) It is understood that the services of the Manager are not deemed
to be exclusive, and nothing in this Agreement shall prevent the
Manager, or any affiliate thereof, from providing similar
services to other investment companies and other clients,
including clients that may invest in the same types of securities
as the Fund, or, in providing such services, from using
information furnished by others. When the Manager determines to
buy or sell the same security for the Fund that the Manager or
one or more of its affiliates has selected for clients of the
Manager or its affiliates, the orders for all such security
transactions shall be placed for execution by methods determined
by the Manager, with approval by the Trust's Board of Trustees,
to be impartial and fair.
(11) Pursuant to Section 6.2 of the Code of Conduct for Persons
Registered with the Securities and Futures Commission (the
"SFC"), the following information is included in this Agreement:
UNDERTAKINGS. Each party undertakes to notify the other party in
the event of any material change to the information provided in
this Agreement.
CERTAIN INFORMATION ABOUT THE MANAGER.
(i) The Manager's full name and address is:
Xxxxxxxxx Asset Management Ltd.
0 Xxxxxxx Xxxxxxxxx
00-00 Xxxxxx Xxxxx Xxx
Xxxxxxxxx, 000000
(ii) The Manager's registration status with the SFC is active.
CERTAIN INFORMATION ABOUT THE TRUST. The Trust's full name
and verified address is:
Xxxxxxxxx Global Investment Trust
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000
(12) This Agreement shall be construed in accordance with the laws of
the State of Delaware, PROVIDED that nothing herein shall be
construed as being inconsistent with applicable Federal and State
securities laws and any rules, regulations and orders thereunder.
(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 and, to this extent,
the provisions of this Agreement shall be deemed to be severable.
(14) Nothing herein shall be construed as constituting the Manager an
agent of the Trust.
(15) It is understood and expressly stipulated that neither the
holders of shares of the Fund, nor any Trustee, officer, agent or
employee of the Trust shall be personally liable hereunder, nor
shall any resort be had to other private property for the
satisfaction of any claim or obligation hereunder, but the Trust
only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers as of the date
first written above.
TEMPLETON GLOBAL INVESTMENT TRUST
By:/s/XXXXX X. XXXX
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Name: Xxxxx X. Xxxx
Title: Vice President and Assistant Secretary
XXXXXXXXX ASSET MANAGEMENT LTD.
By:/s/XXXX XXXXXX
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Name: Xxxx Xxxxxx
Title: Managing Director
