AMENDMENT TO MANAGEMENT AGREEMENT
This Amendment dated as of August 1, 1995, is to the Management Agreement
dated February 1, 1993, by and between FRANKLIN STRATEGIC MORTGAGE PORTFOLIO, a
Delaware business trust (the "Trust"), for itself and on behalf of any
subsequent series of the Trust subject to the Management Agreement (the
"Funds"), and FRANKLIN INSTITUTIONAL SERVICES CORPORATION, a California
corporation, (the "Manager"). The undersigned parties, intending to be legally
bound, hereby agree as follows:
(1) Paragraph 4 B. is amended to read:
B. The management fee payable by a Fund shall be reduced or
eliminated to the extent that Distributors has actually received cash payments
of tender offer solicitation fees less certain cost and expenses incurred in
connection therewith as set forth in paragraph 2.B.(c) of this Agreement. The
Manager may waive all or a portion of its fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of its services. The
Manager shall be contractually bound hereunder by the terms of any publicly
announced waiver of its fee, or any limitation of a Fund's expenses, as if such
waiver or limitation were full set forth herein.
(2) All other provisions of the Management Agreement dated February 1,
1993, remain in full force and effect.
IN WITNESS WHEREOF, we have signed this Amendment as of the date and year
first above written.
FRANKLIN STRATEGIC MORTGAGE PORTFOLIO
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ INSTITUTIONAL SERVICES CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary