FRANKLIN FLOATING RATE TRUST
000 Xxxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, Xxxxxxxxxx 00000
Franklin/Xxxxxxxxx Distributors, Inc
000 Xxxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
Re: Amendment of Amended Distribution Agreement
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 Amended 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 FLOATING RATE TRUST
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: January 12, 1999
