SUBADVISORY AGREEMENT
HUNTINGTON FUNDS on behalf of
FRANKLIN/XXXXXXXXX GLOBAL CURRENCY FUND, FRANKLIN/XXXXXXXXX HIGH INCOME CURRENCY
FUND, FRANKLIN/XXXXXXXXX HARD CURRENCY FUND, U.S. CASH PORTFOLIO AND
FRANKLIN/XXXXXXXXX GERMAN GOVERNMENT BOND FUND
THIS SUBADVISORY AGREEMENT is made as of the 12th day of November, 1993, by
and between FRANKLIN ADVISERS, INC., a corporation organized and existing under
the laws of the State of California (hereinafter called "FAI"), and XXXXXXXXX
INVESTMENT COUNSEL, INC., a Florida corporation (hereinafter called "TICI").
W I T N E S S E T H
WHEREAS, FAI 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, FAI has been retained to render investment management services to
Templeton Global Currency Fund, Franklin/Xxxxxxxxx High Income Currency Fund,
Franklin/Xxxxxxxxx Hard Currency Fund and U.S. Cash Portfolio (the "Funds"),
series of Huntington Funds (the "Trust"), 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, FAI desires to retain TICI to render investment advisory, research
and related services to the Funds pursuant to the terms and provisions of this
Agreement, and TICI 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. FAI hereby retains TICI and TICI 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 FAI, TICI 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 FAI determine, on no less frequently than an annual
basis, to grant the necessary delegated authority to TICI, and subject to
paragraph (b) below, TICI 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 FAI.
(b) In performing these services, TICI 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 FAI 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 FAI or the Board, and subject to
the provisions of this Agreement and to any guidelines or limitations
specified from time to time by FAI or by the Board, TICI shall report daily
all transactions effected by TICI on behalf of the Funds to FAI and to
other entities as reasonably directed by FAI or the Board.
(d) TICI 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. TICI 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, TICI shall comply with all
reasonable instructions of the Funds or FAI 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 TICI.
2. In performing the services described above, TICI 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, TICI 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, TICI 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) TICI shall, unless otherwise expressly provided and authorized, have
no authority to act for or represent FAI or the Funds in any way, or in any way
be deemed an agent for FAI or the Funds.
(b) It is understood that the services provided by TICI are not to be
deemed exclusive. FAI acknowledges that TICI 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. FAI agrees that
TICI 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. TICI agrees to use its best efforts in performing the services to be
provided by it pursuant to this Agreement.
5. FAI has furnished or will furnish to TICI 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 TICI 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 FAI;
(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 FAI.
FAI will furnish TICI with copies of all amendments of or supplements to the
foregoing documents.
6. TICI 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 TICI
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. FAI shall pay a monthly fee in cash to TICI 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 TICI 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 FAI 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 TICI shall be based upon
the following annual rates:
0.25%of the value of the average daily net assets of each of
the Franklin/Xxxxxxxxx Global Currency Fund, Franklin/Xxxxxxxxx
High Income Currency Fund, Franklin/Xxxxxxxxx German Government
Bond Fund and the Franklin/Xxxxxxxxx Hard Currency Fund; and
20% of the value of the average daily net assets of the U.S.
Cash Portfolio.
(b) FAI and TICI shall share equally in any voluntary reduction or
waiver by FAI of the management fee due FAI under the Management Agreement
between FAI 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
TICI, neither TICI nor any of its directors, officers, employees or affiliates
shall be subject to liability to FAI 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 FAI 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 TICI pursuant to authority delegated as described in
Paragraph 1(a), TICI shall indemnify and save FAI 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 FAI or TICI, from liability in violation of Sections
17(h) or (i), respectively, of the 1940 Act.
(d) FAI 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 FAI 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, FAI will be
entitled to participate, at its own expense, in the defense thereof. FAI
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 FAI to such party of FAI'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 FAI 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, TICI 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 FAI will
be responsible for all of their respective expenses and liabilities.
11. This Agreement shall be effective as of November 12, 1993, 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 FAI and TICI,
and by FAI or TICI 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 FAI and the
Funds.
14. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
TICI 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. TICI 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
FAI and TICI.
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. TICI 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. TICI agrees that the Trust's obligations
hereunder shall be limited to the assets of the Funds, and that TICI 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/ Xxxxxx X. Xxxxxxx, Xx.
Title:
XXXXXXXXX INVESTMENT COUNSEL, INC.
By /s/ Xxxxxxx X. Xxxxxxx
Title:
FRANKLIN/XXXXXXXXX GLOBAL CURRENCY FUND, FRANKLIN/XXXXXXXXX HIGH INCOME CURRENCY
FUND, FRANKLIN/XXXXXXXXX HARD CURRENCY FUND, U.S. CASH PORTFOLIO AND
FRANKLIN/XXXXXXXXX GERMAN GOVERNMENT BOND FUND hereby acknowledge and agree to
the provisions of paragraphs 9(a) and 10 of this Agreement.
HUNTINGTON FUNDS on behalf of
FRANKLIN/XXXXXXXXX GLOBAL CURRENCY FUND, FRANKLIN/XXXXXXXXX HIGH INCOME CURRENCY
FUND, FRANKLIN/XXXXXXXXX HARD CURRENCY FUND, U.S. CASH PORTFOLIO AND
FRANKLIN/XXXXXXXXX GERMAN GOVERNMENT BOND FUND
By /s/ Xxxxxx X. Xxxxx
Title: President
