INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 1st day of March, 2005,
between TEMPLETON GLOBAL INVESTMENT TRUST (hereinafter referred to as the
"Trust"), on behalf of Templeton Income Fund (the "Fund"), and XXXXXXXXX GLOBAL
ADVISORS LIMITED (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.
E. Sales of the Fund's shares (which shall be deemed to include
also shares of other registered investment companies which
have either the same adviser or an investment adviser
affiliated with the Manager) by a broker are one factor
among others to be taken into account in deciding to
allocate portfolio transactions (including agency
transactions, principal transactions, purchases in
underwritings or tenders in response to tender offers) for
the account of the Fund to that broker; provided that the
broker shall furnish "best execution," as defined in
subparagraph A above, and that such allocation shall be
within the scope of the Trust's policies as stated above;
provided further, that in every allocation made to a broker
in which the sale of Fund shares is taken into account,
there shall be no increase in the amount of the commissions
or other compensation paid to such broker beyond a
reasonable commission or other compensation determined, as
set forth in subparagraph C above, on the basis of best
execution alone or best execution plus research services,
without taking account of or placing any value upon such
sale of the Trust's shares.
(4) The Fund agrees to pay to the Manager a monthly fee in
dollars at an annual rate of 0.625% of the first $500
million of the daily net assets of the Fund during the month
preceding each payment, reduced as follows: on such net
assets in excess of $500 million up to and including $1
billion, a monthly fee equal on an annual basis to 0.525%;
on such net assets in excess of $1 billion up to $1.5
billion, a monthly fee equal on an annual basis to 0.475%;
on such net assets in excess of $1.5 billion up to and
including $6.5 billion, a monthly fee equal on an annual
basis to 0.425%; on such net assets in excess of $6.5
billion up to $11.5 billion, a monthly fee equal on an
annual basis to 0.400%; on such net assets in excess of
$11.5 billion up to and including $16.5 billion, a monthly
fee equal on an annual basis to 0.3775%; on such net assets
in excess of $16.5 billion up to $19 billion, a monthly fee
equal on an annual basis to 0.365%; on such net assets in
excess of $19 billion up to and including $21.5 billion, a
monthly fee equal on an annual basis to 0.355%; on such net
assets in excess of $21.5 billion, a monthly fee equal on an
annual basis to 0.345%, 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,
2006. 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 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 which 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 which 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 Global Advisors Limited
Box N-7759
Nassau, Bahamas
(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
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.
[Remainder of page left intentionally blank.]
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
-------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President and
Assistant Secretary
XXXXXXXXX GLOBAL ADVISORS LIMITED
By:/s/XXXXXXX X. XXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
