BUSINESS MANAGEMENT AGREEMENT BETWEEN
FRANKLIN VALUEMARK FUNDS
(TEMPLETON INTERNATIONAL SMALLER COMPANIES FUND)
AND
TEMPLETON GLOBAL INVESTORS, INC.
AGREEMENT dated as of _______________, 1996, between Franklin
Valuemark Funds, a Massachusetts business trust (the "Trust"), on behalf of
the Xxxxxxxxx International Smaller Companies Fund (the "Fund"), a separate
series of the Trust, and Templeton Global Investors, Inc. ("TGI").
In consideration of the mutual promises herein made, the parties
hereby agree as follows:
(1) TGI agrees, during the life of this Agreement, to be
responsible for:
(a) providing office space, telephone, office equipment and
supplies for the Fund;
(b) paying compensation of the Fund's officers for services
rendered as such;
(c) authorizing expenditures and approving bills for payment on
behalf of the Fund;
(d) supervising preparation of annual and semiannual reports to
Shareholders, notices of dividends, capital gains
distributions and tax credits, and attending to routine
correspondence and other communications with individual
Shareholders;
(e) daily pricing of the Fund's investment portfolio and
preparing and supervising publication of daily quotations
of the bid and asked prices of the Fund's Shares, earnings
reports and other financial data;
(f) monitoring relationships with organizations serving the
Fund, including custodians, transfer agents and printers;
(g) providing trading desk facilities for the Fund;
(h) supervising compliance by the Fund with
recordkeeping requirements under the Investment Company Act
of 1940 (the "1940 Act") and the rules and regulations
thereunder, supervising compliance with recordkeeping
requirements imposed by state laws or regulations, and
maintaining books and records for the Fund (other than
those maintained by the custodian and transfer agent);
(i) preparing and filing of tax reports including
the Fund's income tax returns, and monitoring the Fund's
compliance with subchapter M of the Internal Revenue Code,
provisions of the Code applicable to insurance company
separate accounts, and other applicable tax laws and
regulations;
(j) monitoring the Fund's compliance with: the 1940
Act and rules and regulations thereunder, state laws and
regulations applicable to the operation of investment
companies funding variable insurance products, the Fund's
investment objectives and policies, and Codes of Ethics and
other policies adopted by the Fund's Board of Trustees or
by the Adviser and applicable to the Fund; and
(k) providing executive, clerical and secretarial
personnel needed to carry out the above responsibilities.
(2) The Trust agrees, during the life of this Agreement, to pay
to TGI as compensation for the foregoing a monthly fee equal on an annual
basis to 0.15% of the first $200 million of the average daily net assets of
the Fund during the month preceding each payment, reduced as follows: on
such net assets in excess of $200 million up to $700 million, a monthly fee
equal on an annual basis to 0.135%; on such net assets in excess of $700
million up to $1.2 billion, a monthly fee equal on an annual basis to 0.10%;
and on such net assets in excess of $1.2 billion, a monthly fee equal on an
annual basis to 0.075%.
(3) This Agreement shall remain in full force and effect
through April 30, 1997 and thereafter from year to year to the extent
continuance is approved annually by the Board of Trustees of the Trust.
(4) This Agreement may be terminated by the Trust at any time
on sixty (60) days' written notice without payment of penalty, provided that
such termination by the Trust shall be directed or approved by the vote of a
majority of the Trustees of the Trust in office at the time or by the vote of
a majority of the outstanding voting securities of the Trust (as defined by
the 1940 Act); and shall automatically and immediately terminate in the event
of its assignment (as defined by the 1940 Act).
(5) In the absence of willful misfeasance, bad faith or gross
negligence on the part of TGI, or of reckless disregard of its duties and
obligations hereunder, TGI shall not be subject to liability for any act or
omission in the course of, or connected with, rendering services hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their duly authorized officers and their respective
corporate seals to be hereunto duly affixed and attested.
FRANKLIN VALUEMARK FUNDS
By:
XXXXXXXXX GLOBAL INVESTORS, INC.
By:
