SUBADVISORY AGREEMENT
FRANKLIN XXXXXXXXX GLOBAL TRUST (formerly known as Huntington Funds), on
behalf of its series, FRANKLIN XXXXXXXXX GLOBAL CURRENCY FUND and FRANKLIN
XXXXXXXXX HARD CURRENCY FUND.
THIS SUBADVISORY AGREEMENT is made as of the 1st day of January 2001, by
and between FRANKLIN ADVISERS, INC., a corporation organized and existing under
the laws of the State of California (hereinafter called "FAV"), and XXXXXXXXX
INVESTMENT COUNSEL, LLC, a Delaware limited liability company (hereinafter
called "TIC,LLC").
W I T N E S S E T H
WHEREAS, FAV is registered as an investment adviser under the Investment
Advisers Act of 1940 (the "Advisers Act"), and is engaged in the business of
supplying investment advice, and investment management services, as an
independent contractor; and
WHEREAS, FAV has been retained to render investment management services to
FRANKLIN XXXXXXXXX GLOBAL CURRENCY FUND and FRANKLIN XXXXXXXXX HARD CURRENCY
FUND, (the "Funds"), series of FRANKLIN XXXXXXXXX GLOBAL TRUST (the
"Trust")(formerly known as the Huntington Funds), an investment 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, FAV desires to retain TIC,LLC to render investment advisory,
research and related services to the Funds pursuant to the terms and provisions
of this Agreement, and TIC,LLC 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. FAV hereby retains TIC,LLC and TIC,LLC hereby accepts such engagement,
to furnish certain investment advisory services with respect to the assets of
the Funds, 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 FAV, TIC,LLC will provide a continuous investment program for the
Funds, including allocation of the Funds' 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 Funds. So long as the
Board and FAV determine, on no less frequently than an annual basis, to grant
the necessary delegated authority to TIC,LLC, and subject to paragraph (b)
below, TIC,LLC will determine what securities and other investments will be
purchased, retained or sold by the Funds, and will place all purchase and sale
orders on behalf of the Funds except that orders regarding U.S. domiciled
securities and money market instruments may also be placed on behalf of the
Funds by FAV.
(b) In performing these services, TIC,LLC shall adhere to the Funds'
investment objectives, policies and restrictions as contained in their
Prospectus and Statement of Additional Information, and in the Trust's
Declaration of Trust, and to the investment guidelines most recently established
by FAV 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 FAV or the Board, and subject to
the provisions of this Agreement and to any guidelines or limitations specified
from time to time by FAV or by the Board, TIC,LLC shall report daily all
transactions effected by TIC,LLC on behalf of the Funds to FAV and to other
entities as reasonably directed by FAV or the Board.
(d) TIC,LLC 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 Funds and its proposed strategy for the next quarter, all in such
form and detail as requested by the Board. TIC,LLC 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, TIC,LLC shall comply with
all reasonable instructions of the Funds or FAV 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
TIC,LLC.
2. In performing the services described above, TIC,LLC shall use its best
efforts to obtain for the Funds the most favorable price and execution
available. Subject to prior authorization of appropriate policies and procedures
by the Board, TIC,LLC may, to the extent authorized by law and in accordance
with the terms of the Funds' Prospectus and Statement of Additional Information,
cause the Funds 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, TIC,LLC 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) TIC,LLC shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent FAV or the Funds in any
way, or in any way be deemed an agent for FAV or the Funds.
(b) It is understood that the services provided by TIC,LLC are not to
be deemed exclusive. FAV acknowledges that TIC,LLC 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 Funds. FAV agrees that TIC,LLC 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 Funds.
4. TIC,LLC agrees to use its best efforts in performing the services
to be provided by it pursuant to this Agreement.
5. FAV has furnished or will furnish to TIC,LLC as soon as available
copies properly certified or authenticated of each of the following documents:
(a) the Trust's Declaration of Trust, as filed with the Secretary of
State of the State of Delaware on March 22, 1991, 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 TIC,LLC 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 if possessed
by or available to FAV;
(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 Funds;
(e) the Funds' most recent Prospectus and Statement of Additional
Information; and
(f) the Investment Management Agreement between the Funds and FAV.
FAV will furnish TIC,LLC with copies of all amendments of or supplements to the
foregoing documents.
6. TIC,LLC will treat confidentially and as proprietary information of the
Funds all records and other information relative to the Funds 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 Funds, which
approval shall not be unreasonably withheld and may not be withheld where
TIC,LLC 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 Funds.
7. FAV shall pay a monthly fee in cash to TIC,LLC based upon a percentage
of the value of each Fund's net assets, calculated as set forth below, on the
first business day of each month in each year as compensation for the services
rendered and obligations assumed by TIC,LLC 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 FAV relating to the
previous month.
(a) For purposes of calculating such fee, the value of the net assets
of each Fund shall be the average daily net assets of each Fund during each
month, determined in the same manner as the Funds use to compute the value of
their net assets in connection with the determination of the net asset value of
their shares, all as set forth more fully in the Funds' current Prospectus. The
rate of the monthly fee payable to TIC,LLC shall be based upon the following
annual rates:
0.25% of the value of the average daily net assets of each of
the Franklin Global Currency Fund and Franklin Xxxxxxxxx Hard
Currency Fund.
(b) FAV and TIC,LLC shall share equally in any voluntary reduction or
waiver by FAV of the management fee due FAV under the Management Agreement
between FAV and the Funds.
(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
Funds.
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
TIC,LLC, neither TIC,LLC nor any of its directors, officers, employees or
affiliates shall be subject to liability to FAV or the Funds or to any
shareholder of the Funds 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 Funds.
(b) Notwithstanding paragraph 9(a), to the extent that FAV is found
by a court of competent jurisdiction, or the SEC or any other regulatory agency
to be liable to the Funds or any shareholder (a "liability"), for any acts
undertaken by TIC,LLC pursuant to authority delegated as described in Paragraph
1(a), TIC,LLC shall indemnify and save FAV and each of its affiliates, officers,
directors and employees (each a "Franklin Indemnified Party") harmless from,
against, for and in respect of all losses, damages, costs and expenses incurred
by a Franklin Indemnified Party with respect to such liability, together with
all legal and other expenses reasonably incurred by any such Franklin
Indemnified Party, in connection with such liability.
(c) No provision of this Agreement shall be construed to protect any
director or officer of FAV or TIC,LLC, from liability in violation of Sections
17(h) or (i), respectively, of the 0000 Xxx.
(d) FAV will not be liable under this indemnification provision with
respect to any claim made against a Franklin Indemnified Party unless such
Franklin Indemnified Party shall have notified FAV in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such Franklin
Indemnified Party (or after such Franklin Indemnified Party shall have received
notice of such service on any designated agent). In case any such action is
brought against the Indemnified Parties, FAV will be entitled to participate, at
its own expense, in the defense thereof. FAV also will be entitled, at its own
expense, to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from FAV to such party of FAV's election to
assume the defense thereof and not withstanding paragraph (d) of this Section 9,
the Franklin Indemnified Party will bear the fees and expenses of any additional
counsel retained by it, and FAV will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof.
10. During the term of this Agreement, subject to the indemnity in Section
9(d) above, TIC,LLC 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 Funds. The Funds and FAV will
be responsible for all of their respective expenses and liabilities.
11. This Agreement shall be effective as of January 1, 2001, 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 Funds, 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 Funds, upon sixty (60) days' written notice to FAV and
TIC,LLC, and by FAV or TIC,LLC 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 Management Agreement between FAV and the
Funds.
14. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
TIC,LLC hereby agrees that all records which it maintains for the Funds are the
property of the Funds and further agrees to surrender promptly to a Fund, or to
any third party at the Fund's direction, any of such records upon the Fund's
request. TIC,LLC 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 Funds and may not be amended without the written consent of
FAV and TIC,LLC.
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 Funds
and "interested persons" shall have the meanings as indicated in the 1940 Act.
18. This Agreement shall be interpreted in accordance with and governed by
the laws of the State of California of the United States of America.
19. TIC,LLC acknowledges that it has received notice of and accepts the
limitations of the Trust's liability as set forth in Article VII of its
Agreement and Declaration of Trust. TIC,LLC agrees that the Trust's obligations
hereunder shall be limited to the assets of the Funds, and that TIC,LLC shall
not seek satisfaction of any such obligation from any shareholders of the Funds
nor from any trustee, officer, employee or agent of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers.
FRANKLIN ADVISERS, INC.
By: /s/Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President
XXXXXXXXX INVESTMENT COUNSEL, LLC
By: /s/Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Executive Vice President
FRANKLIN XXXXXXXXX GLOBAL CURRENCY FUND and FRANKLIN XXXXXXXXX HARD CURRENCY
FUND, hereby acknowledge and agree to the provisions of paragraphs 9(a) and 10
of this Agreement.
FRANKLIN XXXXXXXXX GLOBAL TRUST on behalf of FRANKLIN XXXXXXXXX GLOBAL
CURRENCY FUND AND FRANKLIN XXXXXXXXX HARD CURRENCY FUND
By: /s/Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Secretary
