SUB-ADVISORY AGREEMENT
TEMPLETON GLOBAL OPPORTUNITIES TRUST
THIS AGREEMENT, made this 1st day of March, 2007, by and between
XXXXXXXXX INVESTMENT COUNSEL, LLC, a Delaware limited liability company
registered as an investment adviser under the Investment Advisers Act of 1940
("TIC, LLC") and FRANKLIN XXXXXXXXX INVESTMENTS (ASIA) LIMITED, a company
existing under the laws of Hong Kong registered as an Investment Adviser under
the Investment Advisers Act of 1940 (the "Sub-Adviser").
WHEREAS, TIC, LLC is the Investment Manager of Templeton Global
Opportunities Trust (the "Fund"), an open-end diversified management investment
company, registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, TIC, LLC and Sub-Adviser are affiliates and are under common
control and management; and
WHEREAS, TIC, LLC and Sub-Adviser are each registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and are engaged in the business of supplying investment management
services, each as an independent contractor;
WHEREAS Xxxxx Xxxx, lead portfolio manager for the Fund, is now residing
in Hong Kong and will be employed by Sub-Adviser, and TIC, LLC wishes to enter
into this agreement with Sub-Adviser to enable Xx. Xxxx to continue to perform
his responsibilities as lead portfolio manager of the Fund during his employment
with Sub-Adviser.
NOW, THEREFORE, in consideration of the premises and the terms and
conditions hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF SUB-ADVISER
In accordance with and subject to the Investment Management Agreement
(the "Investment Management Agreement") between the Fund and TIC, LLC dated as
of February 28, 2006, TIC, LLC hereby appoints the Sub-Adviser to perform
portfolio selection services described herein for investment and reinvestment of
the Fund's investment assets, subject to the control and direction of the Fund's
Board of Trustees, for the period and on the terms hereinafter set forth. The
Sub-Adviser accepts such appointment and agrees to furnish the services
hereinafter set forth for the compensation herein provided. The Sub-Adviser
shall for all purposes herein be deemed to be an independent contractor and
shall, except as expressly provided or authorized, have no authority to act for
or represent the Fund or TIC, LLC in any way or otherwise be deemed an agent of
the Fund or TIC, LLC.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE SUB-ADVISER
(a) The Sub-Adviser shall provide the following services and
assume the following obligations with respect to the Fund:
(1) The investment of the assets of the Fund shall at all times
be subject to the applicable provisions of the Agreement and
Declaration of Trust, the Bylaws, the Registration Statement,
the current Prospectus and the Statement of Additional
Information of the Fund and shall conform to the investment
objectives, policies and restrictions of the Fund as set forth
in such documents and as interpreted from time to time by the
Board of Trustees of the Fund and by TIC, LLC. Within the
framework of the investment objectives, policies and
restrictions of the Fund, and subject to the supervision of TIC,
LLC and the Fund's Board of Trustees, the Sub-Adviser shall have
the sole and exclusive responsibility for the making and
execution of all investment decisions for the Fund.
(2) In carrying out its obligations to manage the investments
and reinvestments of the assets of the Fund, the Sub-Adviser
shall: (1) obtain and evaluate pertinent economic, statistical,
financial and other information affecting the economy generally
and individual companies or industries the securities of which
are included in the Fund's investment portfolio or are under
consideration for inclusion therein; (2) formulate and implement
a continuous investment program for the Fund consistent with the
investment objective and related investment policies for the
Fund as set forth in the Fund's registration statement, as
amended; and (3) take such steps as are necessary to implement
the aforementioned investment program by purchase and sale of
securities including the placing, or directing the placement
through an affiliate of the Sub-Adviser, of orders for such
purchases and sales.
(3) In connection with the purchase and sale of securities of
the Fund, the Sub-Adviser shall arrange for the transmission to
TIC, LLC and the Custodian for the Fund on a daily basis such
confirmation, trade tickets and other documents as may be
necessary to enable them to perform their administrative
responsibilities with respect to the Fund's investment
portfolio. With respect to portfolio securities to be purchased
or sold through the Depository Trust Company, the Sub-Adviser
shall arrange for the automatic transmission of the I.D.
confirmation of the trade to the Custodian of the Fund. The
Sub-Adviser shall render such reports to TIC, LLC and/or to the
Fund's Board of Trustees concerning the investment activity and
portfolio composition of the Fund in such form and at such
intervals as TIC, LLC or the Board may from time to time
require.
(4) The Sub-Adviser shall, in the name of the Fund, place or
direct the placement of orders for the execution of portfolio
transactions in accordance with the policies with respect
thereto, as set forth in the Fund's Registration Statement, as
amended from time to time, and under the Securities Act of 1933
and the 1940 Act. In connection with the placement of orders for
the execution of the Fund's portfolio transactions, the
Sub-Adviser shall create and maintain all necessary brokerage
records of the Fund in accordance with all applicable laws,
rules and regulations, including but not limited to, records
required by Section 31(a) of the 1940 Act. All records shall be
the property of the Fund and shall be available for inspection
and use by the Securities and Exchange Commission, the Fund or
any person retained by the Fund. Where applicable, such records
shall be maintained by the Sub-Adviser for the period and in the
place required by Rule 31a-2 under the 1940 Act.
(5) In placing orders or directing the placement of orders for
the execution of portfolio transactions, the Sub-Adviser shall
select brokers and dealers for the execution of the Fund's
transactions. In selecting brokers or dealers to execute such
orders, the Sub-Adviser is expressly authorized to consider the
fact that a broker or dealer has furnished statistical, research
or other information or services which enhance the Sub-Adviser's
investment research and portfolio management capability
generally. It is further understood in accordance with Section
28(e) of the Securities Exchange Act of 1934, as amended, that
the Sub-Adviser may negotiate with and assign to a broker a
commission which may exceed the commission which another broker
would have charged for effecting the transaction if the
Sub-Adviser determines in good faith that the amount of
commission charged was reasonable in relation to the value of
brokerage and/or research services (as defined in Section 28(e))
provided by such broker, viewed in terms either of the Fund or
the Sub-Adviser's overall responsibilities to the Sub-Adviser's
discretionary accounts.
(b) The Sub-Adviser shall use the same skill and care in
providing services to the Fund as it uses in providing services
to fiduciary accounts for which it has investment
responsibility. The Sub-Adviser will conform with all applicable
rules and regulations of the U.S. Securities and Exchange
Commission.
3. EXPENSES
During the term of this Agreement, the Sub-Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement.
4. COMPENSATION
(a) In payment for the investment sub-advisory services to be
rendered by the Sub-Adviser in respect of the Fund hereunder, TIC, LLC shall pay
to the Sub-Adviser as full compensation for all services hereunder a fee equal
to nine-tenths of the advisory fee paid to TIC, LLC by the Fund, which fee shall
be payable in U.S. dollars on the first business day of each month as
compensation for the services to be rendered and obligations assumed by
Sub-Adviser 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 day of this Agreement and shall be reduced by the amount of any
advance payments made by TIC, LLC relating to the previous month.
(b) 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.
5. RENEWAL AND TERMINATION
This Agreement shall become effective as of the date first written above
and shall continue until April 30, 2008, and shall continue thereafter so long
as such continuance is specifically approved at least annually by (i) the Board
of Trustees of the Fund or (ii) a vote of a majority of the Fund's outstanding
voting securities, provided that in either event the continuance is also
approved by a vote of the majority of the Board of Trustees who are not
interested persons of any party to this Agreement, by a vote cast at a meeting
called for the purpose of voting on such approval. The annual approvals provided
for herein shall be effective to continue this Agreement from year to year if
given within a period beginning not more than ninety (90) days prior to April 30
of each applicable year, notwithstanding the fact that more than three hundred
sixty-five (365) days may have elapsed since the date on which such approval was
last given. This Agreement may be terminated at any time without payment of
penalty: (i) by the Fund's Board of Trustees or by a vote of a majority of the
outstanding voting securities of the Fund on sixty days' prior written notice,
or (ii) by either party hereto upon sixty days' prior written notice to the
other. This Agreement will terminate automatically upon any termination of the
Investment Management Agreement or in the event of its assignment. The terms
"interested person," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meanings set forth in the 1940 Act.
6. GENERAL PROVISIONS
(a) The Sub-Adviser may rely on information reasonably believed
by it to be accurate and reliable. Except as may otherwise be provided by the
1940 Act, neither the Sub-Adviser nor its officers, directors, employees or
agents shall be subject to any liability for any error of judgment or mistake of
law or for any loss arising out of any investment or other act or omission in
the performance by the Sub-Adviser of its duties under this Agreement or for any
loss or damage resulting from the imposition by any government or 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, provided that nothing herein shall be deemed to protect, or purport to
protect, the Sub-Adviser against any liability to the Fund or to its
shareholders to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of the Sub-Adviser's reckless disregard of its
obligations and duties hereunder.
(b) TIC, LLC and the Fund's Board of Trustees understand that
the value of investments made for the Fund may go up as well as down, is not
guaranteed and that investment decisions will not always be profitable. TIC, LLC
has not made and is not making any guarantees, including any guarantee as to any
specific level of performance of the Fund. TIC, LLC and the Fund's Board of
Trustees acknowledge that the Fund is designed for investors seeking
international diversification and is not intended as a complete investment
program. They also understand that investment decisions made on behalf of the
Fund by the Sub-Adviser are subject to various market and business risks, and
that investing in securities of companies in emerging countries involves special
risks which are not typically associated with investing in U.S. companies. Risks
include but are not limited to, foreign currency fluctuations, investment and
repatriation restrictions, and political and social instability. Although the
Sub-Adviser intends to invest in companies located in countries which the
Sub-Adviser considers to have relatively stable and friendly governments, the
Fund's Board of Trustees accepts the possibility that countries in which the
Sub-Adviser invests may expropriate or nationalize properties of foreigners, may
impose confiscatory taxation or exchange controls, including suspending currency
transfers from a given country, or may be subject to political or diplomatic
developments that could affect investments in those countries.
(c) This Agreement shall not be or become effective unless and
until it is or has been approved by the Board of Trustees of the Fund, including
a majority of the Trustees who are not "interested persons" to parties to this
Agreement, by a vote cast in person at a meeting called for the purpose of
voting upon such approval.
(d) TIC, LLC understands that the Sub-Adviser now acts, will
continue to act, or may act in the future, as investment adviser to fiduciary
and other managed accounts, including other investment companies, and TIC, LLC
has no objection to the Sub-Adviser so acting, provided that the Sub-Adviser
duly performs all obligations under this Agreement. TIC, LLC also understands
that the Sub-Adviser may give advice and take action with respect to any of its
other clients or for its own account which may differ from the timing or nature
of action taken by the Sub-Adviser with respect to the Fund. Nothing in this
Agreement shall impose upon the Sub-Adviser any obligation to purchase or sell
or to recommend for purchase or sale, with respect to the Fund, any security
which the Sub-Adviser or its shareholders, directors, officers, employees or
affiliates may purchase or sell for its or their own account(s) or for the
account of any other client.
(e) Except to the extent necessary to perform its obligations
hereunder, nothing herein shall be deemed to limit or restrict the right of the
Sub-Adviser, or the right of any of its officers, directors or employees who may
also be an officer, director or employee of the Fund, or person otherwise
affiliated with the Fund (within the meaning of the 0000 Xxx) to engage in any
other business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other trust, corporation, firm, individual or
association.
(f) Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof. This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of Florida. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(g) Any notice under this Agreement shall be in writing,
addressed and delivered or mailed postage pre-paid to the appropriate party at
the following address: TIC, LLC and the Fund at 000 Xxxx Xxxxxxx Xxxxxxxxx,
Xxxxx 0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, Attention: Secretary, and the
Sub-Adviser at 17th Floor, Chater House, 8 Connaught Road Central, Hong Kong.
(h) Sub-Adviser agrees to notify TIC, LLC of any change in
Sub-Adviser's officers and directors within a reasonable time after such change.
(i) TIC, LLC will vote the Fund's investment securities in
accordance with its proxy voting policy and procedures. Sub-Adviser shall not be
responsible for any such voting.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
XXXXXXXXX INVESTMENT COUNSEL, LLC
By: /s/XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
Title: President
FRANKLIN XXXXXXXXX INVESTMENTS (ASIA) LIMITED
By: /s/XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. XxXxxxx
Title: Director
