FORM OF
DISTRIBUTION AGREEMENT
TEMPLETON INCOME TRUST
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000
Franklin Xxxxxxxxx Distributors, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000-0000
Re: Distribution Agreement
Gentlemen:
We are a [Delaware statutory trust] operating as an open-end management
investment company. As such, our company, Templeton Income Trust (referred to
herein as the "Company"), comprised of two series (Xxxxxxxxx International Bond
Fund and Xxxxxxxxx Global Bond Fund) and any additional series that may be
created in the future, is registered under the Investment Company Act of 1940,
(the "1940 Act"), and its shares are registered under the Securities Act of 1933
(the "1933 Act"). We desire to begin issuing our authorized but unissued shares
of common stock (the "Shares") to authorized persons in accordance with
applicable Federal and State securities laws. Shares will be made available for
the Funds (referred to herein as a "Fund" or collectively as the "Funds") formed
as a series of the Company.
You have informed us that your company is registered as a broker-dealer under
the provisions of the Securities Exchange Act of 1934 and that your company is a
member of the National Association of Securities Dealers, Inc. You have
indicated your desire to act as the exclusive selling agent and distributor for
the Shares. We have been authorized to execute and deliver this Agreement to you
by a resolution of our Board of Trustees passed at a meeting at which a majority
of our Trustees, including a majority who are not otherwise interested persons
of the Company and who are not interested persons of our investment adviser, its
related organizations or with you or your related organizations, were present
and voted in favor of the said resolution approving this Agreement.
1. APPOINTMENT OF UNDERWRITER. Upon the execution of this Agreement and
in consideration of the agreements on your part herein expressed and upon the
terms and conditions set forth herein, we hereby appoint you as the exclusive
sales agent for our Shares (except for sales made directly by the Funds without
sales charge) and agree that we will deliver such Shares as you may sell. You
agree to use your best efforts to promote the sale of Shares, but are not
obligated to sell any specific number of Shares.
2. INDEPENDENT CONTRACTOR. You will undertake and discharge your
obligations hereunder as an independent contractor and shall have no authority
or power to obligate or bind us by your actions, conduct or contracts except
that you are authorized to accept orders for the purchase or repurchase of
Shares as our agent. You may appoint sub-agents or distribute through dealers or
otherwise as you may determine from time to time, but this Agreement shall not
be construed as authorizing any dealer or other person to accept orders for sale
or repurchase on our behalf or otherwise act as our agent for any purpose. You
may allow such sub-agents or dealers such commissions or discounts not exceeding
the total sales commission as you shall deem advisable so long as any such
commissions or discounts are set forth in our current prospectus to the extent
required by the applicable Federal and State securities laws.
3. OFFERING PRICE. The Shares of the Funds shall be offered for sale at
a price equivalent to their respective net asset value (as specified in the
Fund's prospectus). On each business day on which the New York Stock Exchange is
open for business, we will furnish you with the net asset value of the Shares
which shall be determined in accordance with our then effective prospectus. All
Shares will be sold in the manner set forth in our then effective prospectus.
4. TERMS AND CONDITIONS OF SALES. Shares of the Funds shall be offered
for sale only in those jurisdictions where they have been properly registered or
are exempt from registration, and only to those groups of people which the Board
of Trustees may from time to time determine to be eligible to purchase such
shares.
5. PAYMENT OF SHARES. At or prior to the time of delivery of any of our
Shares you will pay or cause to be paid to our Custodian or its successor, for
our account, an amount in cash equal to the net asset value of such Shares. In
the event that you pay for Shares sold by you prior to your receipt of payment
from purchasers you are authorized to reimburse yourself for the net asset value
of such Shares when received by you.
6. PURCHASES FOR YOUR OWN ACCOUNT. You shall not purchase our Shares
for your own account for purposes of resale to the public, but you may purchase
Shares for your own investment account upon your written assurance that the
purchase is for investment purposes and that the Shares will not be resold
except through redemption by us.
7. ALLOCATION OF EXPENSES. We will pay the expenses:
(a) Of the preparation of the audited and certified
financial statements of our company to be included in
any Post-Effective Amendments ("Amendments") to our
Registration Statement under the 1933 Act or 1940
Act, including the prospectus and statement of
additional information included therein;
(b) Of the preparation, including legal fees, and of
printing all Amendments or supplements filed with the
Securities and Exchange Commission, including the
copies of the prospectuses included in the Amendments
and the first 10 copies of the definitive
prospectuses or supplements thereto, other than those
necessitated by your (including your "Parent's")
activities or Rules and Regulations related to your
activities where such Amendments or supplements
result in expenses which we would not otherwise have
incurred; and
(c) Of the preparation, printing and distribution of any
reports or communications which we send to our
existing shareholders.
(d) Of filing and other fees to Federal and State
securities regulatory authorities necessary to
continue offering our Shares of any of the Funds as
you may require in connection with your duties as
underwriter.
You will pay the expenses:
(a) Of printing the copies of the prospectuses and any
supplements thereto and statement of additional
information which are necessary to continue to offer
our Shares;
(b) Of the preparation, excluding legal fees, and
printing of all Amendments and supplements to our
prospectuses and statement of additional information
if the Amendment or supplement arises from your
(including your "Parent's") activities or Rules and
Regulations related to your activities and those
expenses would not otherwise have been incurred by
us;
(c) Of printing additional copies, for use by you as
sales literature, of reports or other communications
which we have prepared for distribution to our
existing shareholders; and
(d) Incurred by you in advertising, promoting and selling
our Shares.
8. FURNISHING OF INFORMATION. We will furnish to you such information
with respect to the Funds and their Shares, in such form and signed by such of
our officers as you may reasonably request, and we warrant that the statements
therein contained when so signed will be true and correct. We will also furnish
you with such information and will take such action as you may reasonably
request in order to qualify our Shares for sale to the public under the Blue Sky
Laws of jurisdictions in which you may wish to offer them. We will furnish you
with annual audited financial statements of our books and accounts certified by
independent public accountants, with semi-annual financial statements prepared
by us, and, from time to time, with such additional information regarding our
financial condition as you may reasonably request.
9. CONDUCT OF BUSINESS. Other than our currently effective prospectus,
you will not issue any sales material or statements except literature or
advertising which conforms to the requirements of Federal and State securities
laws and regulations and which have been filed, where necessary, with the
appropriate regulatory authorities. You will furnish us with copies of all such
materials prior to their use and no such material shall be published if we shall
reasonably and promptly object.
You shall comply with the applicable Federal and State laws
and regulations where our Shares are offered for sale and conduct your affairs
with us and with dealers, brokers or investors in accordance with the Rules of
Fair Practice of the National Association of Securities Dealers, Inc. and in
strict accordance with the applicable provisions of the Articles of
Incorporation and By-Laws of the Fund.
In the absence of willful misfeasance, bad faith or gross
negligence on your part, or of reckless disregard of your obligations hereunder,
you shall not be subject to liability for any act or omission in the course of,
or connected with, rendering services hereunder.
10. OTHER ACTIVITIES. Your services pursuant to this Agreement shall
not be deemed to be exclusive, and you may render similar services and act as an
underwriter, distributor or dealer for other investment companies in the
offering of their shares.
11. TERM OF AGREEMENT. This Agreement shall become effective on the
date of its execution, and shall remain in effect for a period of two (2) years.
The Agreement is renewable annually thereafter with respect to the Fund for
successive periods not to exceed one year (i) by a vote of a majority of the
outstanding voting securities of the Funds or by a vote of the Board of Trustees
of the Company, and (ii) by a vote of a majority of the Trustees of the Company
who are not parties to the Agreement or interested persons of any parties to the
Agreement (other than as Trustees of the Company), cast in person at a meeting
called for the purpose of voting on the Agreement.
This Agreement may at any time be terminated by the Funds
without the payment of any penalty, (i) either by vote of the Board of Trustees
of the Company or by vote of a majority of the outstanding voting securities of
the Funds, on 60 days' written notice to you; or (ii) by you on 60 days' written
notice to the Fund; and shall immediately terminate with respect to the Fund in
the event of its assignment.
12. SUSPENSION OF SALES. We reserve the right at all times to suspend
or limit the public offering of the Shares of the Funds upon two days' written
notice to you.
13. MISCELLANEOUS. This Agreement shall be subject to the laws of the State of
California and shall be interpreted and construed to further promote the
operation of the Company as an open-end investment company. As used herein the
terms "Net Asset Value", "Offering Price", "Investment Company", "Open-End
Investment Company", "Assignment", "Principal Underwriter", "Interested Person",
"Parents", "Affiliated Person", and "Majority of the Outstanding Voting
Securities" shall have the meanings set forth in the 1933 Act or the 1940 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,
TEMPLETON INCOME TRUST
By:
----------------------------------------
Xxxxx X. Xxxx
Vice President and Assistant Secretary
ACCEPTED:
FRANKLIN XXXXXXXXX DISTRIBUTORS, INC.
By:
---------------------------------------
Xxxxx X. Xxxxx
President
Dated as of July 18, 2007
