TEMPLETON INSTITUTIONAL FUNDS, INC.
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000
Franklin Xxxxxxxxx Distributors, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000-0000
Re: Form of Distribution Agreement
Gentlemen:
We are a Maryland corporation operating as an open-end management investment
company. As such, our company, Xxxxxxxxx Institutional Funds, Inc. (referred to
herein as the "Company"), comprised of four series (Emerging Markets Series,
Foreign Equity Series, Foreign Smaller Companies Series and Global Equity
Series) 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 Directors passed at a meeting at which a
majority of our Directors, 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
Directors 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
Directors of the Company, and (ii) by a vote of a majority of the Directors
of the Company who are not parties to the Agreement or interested persons
of any parties to the Agreement (other than as Directors 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 Directors
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 INSTITUTIONAL FUNDS, INC.
By:
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Xxxxx X. Xxxx
Vice President and Assistant Secretary
ACCEPTED:
FRANKLIN XXXXXXXXX DISTRIBUTORS, INC.
By:
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Xxxxx X. Xxxxx
President
Dated as of __________________