SUBADVISORY AGREEMENT
TEMPLETON GLOBAL INVESTMENT TRUST
(on behalf of Templeton Income Fund)
THIS SUBADVISORY AGREEMENT made as of the 1st day of March, 2005 by and
between XXXXXXXXX GLOBAL ADVISORS LIMITED, a Bahamian corporation (hereinafter
called "TGAL"), and FRANKLIN ADVISERS, INC., a California corporation
(hereinafter called "FAI").
W I T N E S S E T H
WHEREAS, TGAL and FAI are each registered as an investment adviser
under the Investment Advisers Act of 1940 (the "Advisers Act"), and engaged in
the business of supplying investment advice, and investment management services,
as an independent contractor; and
WHEREAS, TGAL has been retained to render investment advisory services
to Templeton Income Fund (the "Fund"), a series of Templeton Global Investment
Trust (the "Trust"), an investment management company registered with the U.S.
Securities and Exchange Commission (the "SEC") pursuant to the Investment
Company Act of 1940 (the "1940 Act"); and
WHEREAS, TGAL desires to retain FAI to render investment advisory,
research and related services to the Fund pursuant to the terms and provisions
of this Agreement, and FAI is interested in furnishing said services.
NOW, THEREFORE, in consideration of the covenants and the mutual
promises hereinafter set forth, the parties hereto, intending to be legally
bound hereby, mutually agree as follows:
1. TGAL hereby retains FAI and FAI hereby accepts such
engagement, to furnish certain investment advisory services with respect to the
assets of the Fund, as more fully set forth herein.
(a) Subject to the overall policies, control, direction
and review of the Trust's Board of Trustees (the "Board") and to the
instructions and supervision of TGAL, FAI will provide a continuous investment
program for the Fund with respect to that portion of the Fund's assets
designated by TGAL, including allocation of the Fund's assets among the various
securities markets of the world and, investment research and advice with respect
to securities and investments and cash equivalents in the Fund. So long as the
Board and TGAL determine, on no less frequently than an annual basis, to grant
the necessary delegated authority to FAI, and subject to paragraph (b) below,
FAI will, with respect to the portion of the Fund's assets over which it has
been given responsibility, determine what securities and other investments will
be purchased, retained or sold by the Fund, and will place all purchase and sale
orders on behalf of the Fund.
(b) In performing these services, FAI shall adhere to
the Fund's investment objectives, policies and restrictions as contained in its
Prospectus and Statement of Additional Information, and in the Trust's
Declaration of Trust, and to the investment guidelines most recently established
by TGAL and shall comply with the provisions of the 1940 Act and the rules and
regulations of the SEC thereunder in all material respects and with the
provisions of the United States Internal Revenue Code of 1986, as amended, which
are applicable to regulated investment companies.
(c) Unless otherwise instructed by TGAL or the Board, and
subject to the provisions of this Agreement and to any guidelines or limitations
specified from time to time by TGAL or by the Board, FAI shall report daily all
transactions effected by FAI on behalf of the Fund to TGAL and to other entities
as reasonably directed by TGAL or the Board.
(d) FAI shall provide the Board at least quarterly, in
advance of the regular meetings of the Board, a report of its activities
hereunder on behalf of the Fund and its proposed strategy for the next quarter,
all in such form and detail as requested by the Board. FAI shall also make an
investment officer available to attend such meetings of the Board as the Board
may reasonably request.
(e) In carrying out its duties hereunder, FAI shall
comply with all reasonable instructions of the Fund or TGAL in connection
therewith. Such instructions may be given by letter, telex, telefax or telephone
confirmed by telex, by the Board or by any other person authorized by a
resolution of the Board, provided a certified copy of such resolution has been
supplied to FAI.
2. In performing the services described above, FAI shall use
its best efforts to obtain for the Fund the most favorable price and execution
available. Subject to prior authorization of appropriate policies and procedures
by the Board, FAI may, to the extent authorized by law and in accordance with
the terms of the Fund's Prospectus and Statement of Additional Information,
cause the Fund to pay a broker who provides brokerage and research services an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker would have charged for effecting that
transaction, in recognition of the brokerage and research services provided by
the broker. To the extent authorized by applicable law, FAI shall not be deemed
to have acted unlawfully or to have breached any duty created by this Agreement
or otherwise solely by reason of such action.
3. (a) FAI shall, unless otherwise expressly provided and authorized,
have no authority to act for or represent TGAL or the Fund in any way, or in
any way be deemed an agent for TGAL or the Fund.
(b) It is understood that the services provided by FAI are not to
be deemed exclusive. TGAL acknowledges that FAI may have investment
responsibilities, or render investment advice to, or perform other investment
advisory services, for individuals or entities, including other investment
companies registered pursuant to the 1940 Act, ("Clients") which may invest in
the same type of securities as the Fund. TGAL agrees that FAI may give advice or
exercise investment responsibility and take such other action with respect to
such Clients which may differ from advice given or the timing or nature of
action taken with respect to the Fund.
4. FAI agrees to use its best efforts in performing the
services to be provided by it pursuant to this Agreement.
5. TGAL has furnished or will furnish to FAI as soon as
available copies properly certified or authenticated of each of the following
documents:
(a) the Trust's Trust Instrument dated December 21,
1993, and any other organizational documents and all amendments thereto or
restatements thereof;
(b) resolutions of the Trust's Board of Trustees
authorizing the appointment of FAI and approving this Agreement;
(c) the Trust's original Notification of Registration
on Form N-8A under the 1940 Act as filed with the SEC and all amendments
thereto;
(d) the Trust's current Registration Statement on Form
N-1A under the Securities Act of 1933, as amended and under the 1940 Act as
filed with the SEC, and all amendments thereto, as it relates to the Fund;
(e) the Fund's most recent Prospectus and Statement of
Additional Information; and
(f) the Investment Advisory Agreement between the Fund
and TGAL.
TGAL will furnish FAI with copies of all amendments of or supplements to the
foregoing documents.
6. FAI will treat confidentially and as proprietary information
of the Fund all records and other information relative to the Fund and prior,
present or potential shareholders, and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by the
Fund, which approval shall not be unreasonably withheld and may not be withheld
where FAI may be exposed to civil or criminal contempt proceedings for failure
to comply when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund.
7. (a) TGAL shall pay a monthly fee in cash to FAI of
one-half (1/2)of the investment advisory fee paid to TGAL by the Fund, which fee
shall be payable on the first business day of each month in each year as
compensation for the services rendered and obligations assumed by FAI during the
preceding month. The advisory fee under this Agreement shall be payable on the
first business day of the first month following the effective date of this
Agreement, and shall be reduced by the amount of any advance payments made by
TGAL relating to the previous month.
(b) TGAL and FAI shall share equally in any voluntary
reduction or waiver by TGAL of the management fee due TGAL under the Investment
Advisory Agreement between TGAL and the Fund.
(c) If this Agreement is terminated prior to the end of
any month, the monthly fee shall be prorated for the portion of any month in
which this Agreement is in effect which is not a complete month according to the
proportion which the number of calendar days in the month during which the
Agreement is in effect bears to the total number of calendar days in the month,
and shall be payable within 10 days after the date of termination.
8. Nothing herein contained shall be deemed to relieve or
deprive the Board of its responsibility for and control of the conduct of the
affairs of the Fund.
9. (a) In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of its obligations or duties hereunder on the
part of FAI, neither FAI nor any of its directors, officers, employees or
affiliates shall be subject to liability to TGAL or the Fund or to any
shareholder of the Fund for any error of judgment or mistake of law or any other
act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security by the Fund.
(b) Notwithstanding paragraph 9(a), to the extent that
TGAL is found by a court of competent jurisdiction, or the SEC or any other
regulatory agency to be liable to the Fund or any shareholder (a "liability"),
for any acts undertaken by FAI pursuant to authority delegated as described in
Paragraph 1(a), FAI shall indemnify and save TGAL and each of its affiliates,
officers, directors and employees (each an "Indemnified Party") harmless from,
against, for and in respect of all losses, damages, costs and expenses incurred
by an Indemnified Party with respect to such liability, together with all legal
and other expenses reasonably incurred by any such Indemnified Party, in
connection with such liability.
(c) No provision of this Agreement shall be construed
to protect any director or officer of TGAL or FAI, from liability in violation
of Sections 17(h) or (i), respectively, of the 0000 Xxx.
10. During the term of this Agreement, FAI will pay all expenses
incurred by it in connection with its activities under this Agreement other than
the cost of securities (including brokerage commissions, if any) purchased for
the Fund. The Fund and TGAL will be responsible for all of their respective
expenses and liabilities.
11. This Agreement shall be effective as of the date given
above, and shall continue in effect for two years. It is renewable annually
thereafter for successive periods not to exceed one year each (i) by a vote of
the Board or by the vote of a majority of the outstanding voting securities of
the Fund, and (ii) by the vote of a majority of the Trustees of the Trust who
are not parties to this Agreement or interested persons thereof, cast in person
at a meeting called for the purpose of voting on such approval.
12. This Agreement may be terminated at any time, without
payment of any penalty, by the Board or by vote of a majority of the outstanding
voting securities of the Fund, upon sixty (60) days' written notice to TGAL and
FAI, and by TGAL or FAI upon sixty (60) days' written notice to the other party.
13. This Agreement shall terminate automatically in the event of
any transfer or assignment thereof, as defined in the 1940 Act, and in the event
of any act or event that terminates the Investment Advisory Agreement between
TGAL and the Fund.
14. In compliance with the requirements of Rule 31a-3 under the
1940 Act, FAI hereby agrees that all records which it maintains for the Fund are
the property of the Fund and further agrees to surrender promptly to the Fund,
or to any third party at the Fund's direction, any of such records upon the
Fund's request. FAI further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.
15. This Agreement may not be materially amended, transferred,
assigned, sold or in any manner hypothecated or pledged without the affirmative
vote or written consent of the holders of a majority of the outstanding voting
securities of the Fund and may not be amended without the written consent of
TGAL and FAI.
16. 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.
17. The terms "majority of the outstanding voting securities" of
the Fund and "interested persons" shall have the meanings as set forth in the
1940 Act.
18. This Agreement shall be interpreted in accordance with and
governed by the laws of the State of Florida of the United States of America.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers.
XXXXXXXXX GLOBAL ADVISORS LIMITED
By:/s/XXXXXXX X. XXXXXXX
------------------------
Xxxxxxx X. Xxxxxxx
Title: President
FRANKLIN ADVISERS, INC.
By:/s/XXXXXXXXXXX X. XXXXXXXX
----------------------------
Xxxxxxxxxxx X. Xxxxxxxx
Title: Executive Vice President
Templeton Income Fund hereby acknowledges and agrees to the provisions of
paragraphs 9(a) and 10 of this Agreement.
Templeton Global Investment Trust, on behalf of
Templeton Income Fund
By:/s/XXXXX X. XXXX
--------------------
Xxxxx X. Xxxx
Title: Vice President and Assistant Secretary
