SUBCONTRACT FOR FUND ADMINISTRATIVE SERVICES
This Subcontract for Fund Administrative Services ("Subcontract") is
made as of July 2, 2007 between FRANKLIN ADVISERS, INC., a California
corporation, hereinafter called the "Investment Manager," and FRANKLIN XXXXXXXXX
SERVICES, LLC (the "Administrator").
In consideration of the mutual agreements herein made, the
Administrator and the Investment Manager understand and agree as follows:
I. Prime Contract.
This Subcontract is made in order to assist the Investment Manager in fulfilling
certain of the Investment Manager's obligations under each investment management
and investment advisory agreement ("Agreement") between the Investment Manager
and each Investment Company listed on Exhibit A, ("Investment Company") for
itself or on behalf of each of its series listed on Exhibit A (each, a "Fund").
This Subcontract is subject to the terms of each Agreement, which is
incorporated herein by reference.
II. Subcontractual Provisions.
(1) The Administrator agrees, during the life of this Agreement, to
provide the following services to each Fund:
(a) providing office space, telephone, office equipment and supplies
for the Fund;
(b) providing trading desk facilities for the Fund, unless these
facilities are provided by the Fund's investment adviser;
(c) authorizing expenditures and approving bills for payment on
behalf of the Fund;
(d) supervising preparation of periodic reports to shareholders,
notices of dividends, capital gains distributions and tax credits; and attending
to routine correspondence and other communications with individual shareholders
when asked to do so by the Fund's shareholder servicing agent or other agents of
the Fund;
(e) coordinating the daily pricing of the Fund's investment
portfolio, including collecting quotations from pricing services engaged by the
Fund; providing fund accounting services, including preparing and supervising
publication of daily net asset value quotations, periodic earnings reports and
other financial data; and coordinating trade settlements;
(f) monitoring relationships with organizations serving the Fund,
including custodians, transfer agents, public accounting firms, law firms,
printers and other third party service providers;
(g) supervising compliance by the Fund with recordkeeping
requirements under the federal securities laws, including the 1940 Act and the
rules and regulations thereunder, and under other applicable state and federal
laws; and maintaining books and records for the Fund (other than those
maintained by the custodian and transfer agent);
(h) 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, as amended, and other applicable tax laws and
regulations;
(i) monitoring the Fund's compliance with: 1940 Act and other federal
securities laws, and rules and regulations thereunder; state and foreign laws
and regulations applicable to the operation of investment companies; the Fund's
investment objectives, policies and restrictions; and the Code of Ethics and
other policies adopted by the Investment Company's Board of Trustees or
Directors ("Board") or by the Fund's investment adviser and applicable to the
Fund;
(j) providing executive, clerical and secretarial personnel needed to
carry out the above responsibilities;
(k) preparing and filing regulatory reports, including without
limitation Forms N-1A and NSAR, proxy statements, information statements and
U.S. and foreign ownership reports; and
(l) providing support services incidental to carrying out these
duties.
Nothing in this Agreement shall obligate the Investment Company or any Fund to
pay any compensation to the officers of the Investment Company. Nothing in this
Agreement shall obligate the Administrator to pay for the services of third
parties, including attorneys, auditors, printers, pricing services or others,
engaged directly by the Fund to perform services on behalf of the Fund.
(2) The Investment Manager agrees to pay to the Administrator as
compensation for such services a monthly fee equal on an annual basis to 0.15%
of the first $200 million of the average daily net assets of each 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 0.1%; and on such net assets
in excess of $1.2 billion, a monthly fee equal on an annual basis to 0.075%.
From time to time, the Administrator may waive all or a portion of its fees
provided for hereunder and such waiver shall be treated as a reduction in the
purchase price of its services. The Administrator shall be contractually bound
hereunder by the terms of any publicly announced waiver of its fee, or any
limitation of each affected Fund's expenses, as if such waiver or limitation
were fully set forth herein.
(3) This Subcontract shall become effective on the date written above and
shall continue in effect as to each Investment Company and each Fund so long as
(1) the Agreement applicable to the Investment Company or Fund is in effect and
(2) this Subcontract is not terminated. This Subcontract will terminate as to
any Investment Company or Fund immediately upon the termination of the Agreement
applicable to the Investment Company or Fund, and may in addition be terminated
by either party at any time, without the payment of any penalty, on sixty (60)
days' written notice to the other party.
(4) In the absence of willful misfeasance, bad faith or gross negligence
on the part of the Administrator, or of reckless disregard of its duties and
obligations hereunder, the Administrator 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 Subcontract to be
executed by their duly authorized officers.
FRANKLIN ADVISERS, INC.
By: _____________________________
Xxxxxx X. Xxxxxxxx
President & Chief Investment Officer
FRANKLIN XXXXXXXXX SERVICES, LLC
By: _____________________________
Xxxxx X. Xxxxxxx
President
SUBCONTRACT FOR FUND ADMINISTRATIVE SERVICES
between
Franklin Advisers, Inc.
and
Franklin Xxxxxxxxx Services, LLC
EXHIBIT A
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INVESTMENT COMPANY SERIES---(if applicable)
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Franklin California Tax-Free Income Fund,
Inc.
Franklin California Tax-Free Trust Franklin California Insured Tax-Free
Income Fund
Franklin California Tax-Exempt Money
Fund
Franklin California Intermediate-Term
Tax-Free Income Fund
Franklin Capital Growth Fund
Franklin Custodian Funds, Inc. Franklin Dynatech Fund
Franklin Income Fund
Franklin Utilities Fund
Franklin U.S. Government Securities Fund
Franklin Federal Tax- Free Income Fund
Franklin Gold and Precious Metals Fund
Franklin High Income Trust Franklin High Income Fund
Franklin Investors Securities Trust Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Limited Maturity U.S. Gov. Securities Fund
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INVESTMENT COMPANY SERIES---(if applicable)
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Franklin Municipal Securities Trust Franklin California High Yield Municipal Fund
Franklin Tennessee Municipal Bond Fund
Franklin New York Tax-Free Trust Franklin New York Tax-Exempt Money Fund
Franklin New York Insured Tax-Free Income Fund
Franklin New York Intermediate-Term
Tax-Free Income Fund
Franklin New York Tax-Free Income Fund
Franklin Real Estate Securities Trust Franklin Real Estate Securities Fund
Franklin Strategic Mortgage Portfolio
Franklin Strategic Series Franklin Flex Cap Growth Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Natural Resources Fund
Franklin Small-Mid Cap Growth Fund
Franklin Strategic Income Fund
Franklin Tax-Exempt Money Fund
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INVESTMENT COMPANY SERIES---(if applicable)
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Franklin Tax-Free Trust Franklin Alabama Tax-Free Income Fund
Franklin Arizona Tax-Free Income Fund
Franklin Colorado Tax-Free Income Fund
Franklin Connecticut Tax-Free Income Fund
Franklin Double Tax-Free Income Fund
Franklin Federal Intermediate-Term Tax-Free
Income Fund
Franklin Florida Tax-Free Income Fund
Franklin Georgia Tax-Free Income Fund
Franklin High Yield Tax-Free Income
Fund Franklin Insured Tax-Free Income
Fund Franklin Kentucky Tax-Free
Income Fund Franklin Louisiana
Tax-Free Income Fund Franklin
Maryland Tax-Free Income Fund
Franklin Massachusetts Insured
Tax-Free Income Fund Franklin
Michigan Insured Tax-Free Income Fund
Franklin Minnesota Insured Tax-Free
Income Fund Franklin Missouri
Tax-Free Income Fund Franklin New
Jersey Tax-Free Income Fund Franklin
North Carolina Tax-Free Income Fund
Franklin Ohio Insured Tax-Free Income
Fund Franklin Oregon Tax-Free Income
Fund Franklin Pennsylvania Tax-Free
Income Fund Franklin Virginia
Tax-Free Income Fund
Franklin Xxxxxxxxx Global Trust Franklin Xxxxxxxxx Hard Currency Fund
Franklin Xxxxxxxxx International Trust Templeton Foreign Smaller Companies Fund
CLOSED END FUNDS:
Franklin Universal Trust
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