FRANKLIN MUTUAL SERIES FUND INC.
00 Xxxx X. Xxxxxxx Xxxx Xxx
Xxxxx Xxxxx, Xxx Xxxxxx
Franklin/Xxxxxxxxx Distributors, Inc.
000 Xxxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
Re: Amendment of Distribution Agreement - Mutual Shares Fund
Gentlemen:
We (the "Fund") are a corporation or business trust operating as an open-end
management investment company or "mutual fund," which is registered under the
Investment Company Act of 1940, as amended (the "1940 Act") and whose shares
are registered under the Securities Act of 1933, as amended (the "1933
Act"). You have informed us that your company is registered as a
broker-dealer under the provisions of the Securities Exchange Act of 1934, as
amended (the "1934 Act") and that your company is a member of the National
Association of Securities Dealers, Inc.
This agreement is an amendment (the "Amendment") of the Distribution
Agreement (the "Agreement") currently in effect between you and us. As used
herein all capitalized terms herein have the meanings set forth in the
Agreement. We have been authorized to execute and deliver the Amendment to
you by a resolution of our Board passed at a meeting at which a majority of
Board members, including a majority who are not otherwise interested persons
of the Fund and who are not interested persons of our investment adviser, its
related organizations or of you or your related organizations, were present
and voted in favor of such resolution approving the Amendment.
To the extent that any provision of the Amendment conflicts with any
provision of the Agreement, the Amendment provision supersedes the Agreement
provision. The Agreement and the Amendment together constitute the entire
agreement between the parties hereto and supersede all prior oral or written
agreements between the parties hereto.
Section 4. entitled "Compensation" is amended by adding the following
sentences at the end of Subsection 4.B:
The compensation provided in the Class B Distribution Plan
applicable to Class B Shares (the "Class B Plan") is divided into
a distribution fee and a service fee, each of which fees is in
compensation for different services to be rendered to the Fund.
Subject to the termination provisions in the Class B Plan, the
distribution fee with respect to the sale of a Class B Share
shall be earned when such Class B Share is sold and shall be
payable from time to time as provided in the Class B Plan. The
distribution fee payable to you as provided in the Class B Plan
shall be payable without offset, defense or counterclaim (it
being understood by the parties hereto that nothing in this
sentence shall be deemed a waiver by the Fund of any claim the
Fund may have against you). You may direct the Fund to cause our
custodian to pay such distribution fee to Lightning Finance
Company Limited ("LFL") or other persons providing funds to you
to cover expenses referred to in Section 2(a) of the Class B Plan
and to cause our custodian to pay the service fee to you for
payment to dealers or others or directly to others to cover
expenses referred to in Section 2(b) of the Class B Plan.
We understand that you intend to assign your right to receive
certain distribution fees with respect to Class B Shares to LFL
in exchange for funds that you will use to cover expenses
referred to in Section 2(a) of the Class B Plan. In recognition
that we will benefit from your arrangement with LFL, we agree
that, in addition to the provisions of Section 7 (iii) of the
Class B Plan, we will not pay to any person or entity, other than
LFL, any such assigned distribution fees related to Class B
Shares sold by you prior to the termination of either the
Agreement or the Class B Plan. We agree that the preceding
sentence shall survive termination of the Agreement.
Section 4. entitled "Compensation" is amended by adding the following
Subsection 4.C. after Subsection 4.B.:
C. With respect to the sales commission on the redemption of
Shares of each series and class of the Fund as provided in
Subsection 4.A. above, we will cause our shareholder services
agent (the "Transfer Agent") to withhold from redemption proceeds
payable to holders of the Shares all contingent deferred sales
charges properly payable by such holders in accordance with the
terms of our then current prospectuses and statements of
additional information (each such sales charge, a "CDSC"). Upon
receipt of an order for redemption, the Transfer Agent shall
direct our custodian to transfer such redemption proceeds to a
general trust account. We shall then cause the Transfer Agent to
pay over to you or your assigns from the general trust account
such CDSCs properly payable by such holders as promptly as
possible after the settlement date for each such redemption of
Shares. CDSCs shall be payable without offset, defense or
counterclaim (it being understood that nothing in this sentence
shall be deemed a waiver by us of any claim we may have against
you.) You may direct that the CDSCs payable to you be paid to
any other person.
Section 11. entitled "Conduct of Business" is amended by replacing the
reference in the second paragraph to "Rules of Fair Practice" with a
reference to the "Conduct Rules".
Section 16. entitled "Miscellaneous" is amended in the first paragraph by
changing the first letter of each of the words in each of the terms in
quotations marks, except "Parent," to the lower case and giving to the term
"assignment" the meaning as set forth only in the 1940 Act and the Rules and
Regulations thereunder (and not as set forth in the 1933 Act and the Rules
and Regulations thereunder.)
If the foregoing meets with your approval, please acknowledge your acceptance
by signing each of the enclosed copies, whereupon this will become a binding
agreement as of the date set forth below.
Very truly yours,
FRANKLIN MUTUAL SERIES FUND INC.
By /s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Vice President & Secretary
Accepted:
Franklin/Xxxxxxxxx Distributors, Inc.
By /s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Executive Vice President
Dated: March 26, 1999
