INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 28th day of February, 2006, between TEMPLETON
GLOBAL INVESTMENT TRUST (hereinafter referred to as the "Trust"), on behalf of
Xxxxxxxxx BRIC 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, 2007. 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
