BANK SELLING AGREEMENT
NOVEMBER 1, 2003
1. INTRODUCTION
The parties to this Agreement are the undersigned bank or trust company
("Bank") and Franklin ▇▇▇▇▇▇▇▇▇ Distributors, Inc. ("FTDI"). This Agreement sets
forth the terms and conditions under which FTDI will execute purchases and
redemptions of shares of the Franklin or Templeton investment companies or
series of such investment companies for which FTDI now or in the future serves
as principal underwriter (each, a "Fund"), at the request of Bank upon the order
and for the account of Bank's customers ("Customers"). In this Agreement,
"Customer" shall include the beneficial owners of an account and any agent or
attorney-in-fact duly authorized or appointed to act on the owner's behalf with
respect to the account; and "redemptions" shall include redemptions of shares of
Funds that are open-end management investment companies and repurchases of
shares of Funds that are closed-end investment companies by the Fund that is the
issuer of such shares. FTDI will notify Bank from time to time of the Funds that
are eligible for distribution and the terms of compensation under this
Agreement. This Agreement is not exclusive, and either party may enter into
similar agreements with third parties.
2. REPRESENTATIONS AND WARRANTIES OF BANK
Bank warrants and represents to FTDI and the Funds that:
a) Bank is a "bank" as defined in section 3(a)(6) of the Securities
Exchange Act of 1934, as amended (the "1934 Act");
b) Bank is authorized to enter into this Agreement as agent for
Customers, and Bank's performance of its obligations and receipt of
consideration under this Agreement will not violate any law,
regulation, charter, agreement or regulatory restriction to which Bank
is subject;
c) Bank has received all regulatory agency approvals and taken all legal
and other steps necessary for offering the services Bank will provide
to Customers and receiving any applicable compensation in connection
with this Agreement; and
d) Bank will comply with all applicable U.S. federal, state and local
laws and regulations in performing its obligations hereunder. Without
limiting the foregoing, Bank agrees that in recommending to a customer
the purchase, sale or exchange of any shares, or class of shares, of a
Fund, Bank shall have reasonable grounds for believing that the
recommendation is suitable for such customer. Bank also agrees that it
will comply with all policies and agreements concerning Site (as
defined in Paragraph 4(b)(4) below) usage, including, without
limitation, the Terms of Use Agreement(s) posted on the Sites ("Site
Terms") as may be revised and reposted on the Sites from time to time,
and those Site Terms (as in effect from time to time) are part of this
Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL UNDERWRITER
FTDI warrants and represents to Bank that:
a) FTDI is a broker/dealer registered under the 1934 Act; and
b) FTDI is the principal underwriter of the Funds.
4. COVENANTS OF BANK
a) For each purchase, redemption or exchange transaction under this
Agreement (each, a "Transaction"), Bank will:
1) be authorized to engage in the Transaction;
2) except as otherwise provided herein, act as agent for Customer,
unless Bank is the Customer;
3) act solely for the account of Customer, unless Bank is the
Customer;
4) not submit an order unless Bank has already received the order
from Customer, unless Bank is the Customer;
5) not withhold placing any Customer's order for the purpose of
profiting from the delay or place orders for Fund shares in
amounts just below the point at which sales charges are reduced
so as to benefit from a higher Fee (as defined in Paragraph 5(e)
below) applicable to a Transaction in an amount below the
breakpoint;
6) have no beneficial ownership of the securities in any purchase
Transaction (Customer will have the full beneficial ownership),
unless Bank is the Customer (in which case, Bank will not engage
in the Transaction unless the Transaction is legally permissible
for Bank);
7) not accept or withhold any Fee (as defined in Paragraph 5(e) of
this Agreement) otherwise allowed under Paragraphs 5(d) and (e)
of this Agreement, if prohibited by the Employee Retirement
Income Security Act of 1974, as amended, or trust or similar laws
to which Bank is subject, in the case of Transactions of Fund
shares involving retirement plans, trusts, or similar accounts;
8) maintain records of all Transactions of Fund shares made through
Bank and furnish FTDI with copies of such records upon request;
and
9) distribute Prospectuses, statements of additional information and
reports to Customers in compliance with applicable legal
requirements, except to the extent that FTDI expressly undertakes
to do so on behalf of Bank.
b) While this Agreement is in effect, Bank will:
1) not purchase any Fund shares from any person at a price lower
than the redemption or repurchase price, as applicable, next
determined by the applicable Fund;
2) repay FTDI the full Fee received by Bank under Paragraphs 5(d)
and (e) of this Agreement, and any payments FTDI or its
affiliates made to Bank from their own resources under Paragraph
5(e) of this Agreement ("FTDI Payments"), for any Fund shares
purchased under this Agreement which are redeemed or repurchased
by the Fund within seven (7) business days after the purchase; in
turn, FTDI shall pay to the Fund the amount repaid by Bank (other
than any portion of such repayment that is a repayment of FTDI
Payments) and will notify Bank of any such redemption within a
reasonable time (termination or suspension of this Agreement
shall not relieve Bank or FTDI from the requirements of this
subparagraph);
3) in connection with orders for the purchase of Fund shares on
behalf of an individual retirement account, self-employed
retirement plan or other retirement accounts, by mail, telephone,
wire or through the Sites, act as agent for the custodian or
trustee of such plans and shall not place such an order until
Bank has received from its Customer payment for such purchase
and, if such purchase represents the first contribution to such a
plan, the completed documents necessary to establish the plan and
enrollment in the plan (Bank agrees to indemnify FTDI and
Franklin ▇▇▇▇▇▇▇▇▇ Bank & Trust, F.S.B. and/or Fiduciary Trust
International of the South, as applicable, for any claim, loss,
or liability resulting from incorrect investment instructions
received from Bank which cause a tax liability or other tax
penalty);
4) obtain from its Customers any consents required by applicable
federal and/or state privacy laws to (a) permit FTDI, any of its
affiliates or the Funds to provide Bank with confirmations,
account statements and other information about Customers'
investments in the Funds, and (b) permit Bank and its registered
representatives, agents, independent contractors and/or employees
to transmit and receive confidential information concerning such
Customers to or from FTDI and through its websites at
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and such other URL(s)
through which FTDI may permit Bank to conduct business concerning
the Funds from time to time (referred to collectively as the
"Sites"); and
5) place orders for the purchase of Fund shares by Bank only for
Customers for whom Bank has appropriate identification as
required by applicable anti-money laundering laws or policies in
Bank's jurisdiction.
5. TERMS AND CONDITIONS FOR TRANSACTIONS
a) Price
Purchase orders for Fund shares received from Bank will be accepted
only at the public offering price and in compliance with procedures applicable
to each purchase order as set forth in the then current prospectus and statement
of additional information (hereinafter, collectively, "Prospectus") for the
applicable Fund. All purchase orders must be accompanied by payment in U.S.
Dollars. Orders payable by check must be drawn payable in U.S. Dollars on a U.S.
bank, for the full amount of the investment. All sales are made subject to
receipt of shares by FTDI from the Funds. FTDI reserves the right in its
discretion, without notice, to suspend the sale of shares or withdraw the
offering of shares entirely.
b) Orders and Confirmations
Except as otherwise provided, Bank shall not have any authority to act
as agent for the Funds, FTDI, or any other dealer in any respect, nor will Bank
represent to any third party that it has such authority or is acting in such
capacity. All orders are subject to acceptance or rejection by FTDI and by the
Fund or its transfer agent at their sole discretion, and become effective only
upon confirmation by one of them. Transaction orders shall be made using the
procedures and forms provided by FTDI from time to time. Orders will be effected
at the price(s) next computed on the day they are received if, as set forth in
the applicable Fund's current Prospectus, the orders are received by FTDI or an
agent appointed by FTDI or the Funds prior to the close of trading on the New
York Stock Exchange, generally 4:00 p.m. eastern time ("Close of Trading").
Orders received after that time will be effected at the price determined on the
next business day. No order will be accepted unless Bank or Customer shall have
provided FTDI with Customer's full name, address and other information normally
required by FTDI to open a customer account, and FTDI shall be entitled to rely
on the accuracy of the information provided by Bank. A written confirming
statement will be sent to the shareholder of record upon settlement of each
Transaction.
If Bank has entered into a FundSERV Agreement with FTDI to effect
Transactions in Fund shares through FundSERV, Bank is hereby authorized to act
on FTDI's behalf for the limited purpose of receiving purchase, exchange and
redemption orders for Fund shares executed through FundSERV. Bank represents and
warrants that all orders for the purchase, exchange or redemption of Fund shares
transmitted to FundSERV for processing on or as of a given business day (Day 1)
shall have been received by Bank prior to the Close of Trading on Day 1. Such
orders shall receive the share price next calculated following the Close of
Trading on Day 1. Bank represents and warrants that orders received by Bank
after the Close of Trading on Day 1 shall be treated by Bank and transmitted to
FundSERV as if received on the next business day (Day 2). Such orders shall
receive the share price next calculated following the Close of Trading on Day 2.
Bank represents that it has systems in place reasonably designed to prevent
orders received after the Close of Trading on Day 1 from being executed with
orders received before the Close of Trading on Day 1.
c) Multiple Class Guidelines
FTDI may from time to time provide to Bank written compliance
guidelines or standards relating to the sale or distribution of Funds offering
multiple classes of shares (each, a "Class") with different sales charges and
distribution-related operating expenses. Bank will comply with FTDI's written
compliance guidelines and standards, as well as with any applicable rules or
regulations of government agencies or self-regulatory organizations generally
affecting the sale or distribution of investment companies offering multiple
classes of shares, whether or not Bank deems itself otherwise subject to such
rules or regulations.
d) Payments by Bank for Purchases
On the settlement date for each purchase, Bank shall either (i) remit
the full purchase price by wire transfer to an account designated by FTDI, or
(ii) following FTDI's procedures, wire the purchase price less the Fee allowed
by Paragraph 5(e) of this Agreement. Twice monthly, FTDI will pay Bank Fees not
previously paid to or withheld by Bank. Each calendar month, FTDI, as
applicable, will prepare and mail an activity statement summarizing all
Transactions.
e) Fees and Payments
Where permitted by the Prospectus for a Fund, a charge, concession, or
fee (each of the foregoing forms of compensation, a "Fee") may be paid to Bank,
related to services provided by Bank in connection with Transactions in shares
of such Fund. The amount of the Fee, if any, is set by the relevant Prospectus.
Adjustments in the Fee are available for certain purchases, and Bank is solely
responsible for notifying FTDI when any purchase or redemption order is
qualified for such an adjustment. If Bank fails to notify FTDI of the
applicability of a reduction in the sales charge at the time the trade is
placed, neither FTDI nor any of the Funds will be liable for amounts necessary
to reimburse any Customer for the reduction which should have been effected.
In accordance with the Funds' Prospectuses, FTDI or its affiliates
may, but are not obligated to, make payments from their own resources to Bank as
compensation for certain sales that are made at net asset value ("Qualifying
Sales"). If Bank notifies FTDI of a Qualifying Sale, FTDI may make a contingent
advance payment up to the maximum amount available for payment on the sale. If
any of the shares purchased in a Qualifying Sale are redeemed or repurchased
within twelve (12) months of the month of purchase, FTDI shall be entitled to
recover any advance payment attributable to the redeemed or repurchased shares
by reducing any account payable or other monetary obligation FTDI may owe to
Bank or by making demand upon Bank for repayment in cash. FTDI reserves the
right to withhold any one or more advances, if for any reason FTDI believes that
FTDI may not be able to recover unearned advances. Termination or suspension of
this Agreement does not relieve Bank from the requirements of this paragraph.
Bank agrees to waive payment of any amounts of dealer concessions payable to
Bank by FTDI until such time as FTDI is in receipt of such dealer concessions.
f) Rule 12b-1 Plans
Bank is also invited to participate in all distribution plans (each, a
"Plan") adopted for a Class of a Fund or for a Fund that has only a single Class
(each, a "Plan Class") pursuant to Rule 12b-1 under the Investment Company Act
of 1940, as amended (the "1940 Act").
To the extent Bank provides administrative and other services,
including, but not limited to, furnishing personal and other services and
assistance to Customers who own shares of a Plan Class, answering routine
inquiries regarding a Fund or Class, assisting in changing account designations
and addresses, maintaining such accounts or such other services as a Fund may
require, to the extent permitted by applicable statutes, rules, or regulations,
FTDI shall pay Bank a Rule 12b-1 servicing fee. To the extent that Bank
participates in the distribution of Fund shares that are eligible for a Rule
12b-1 distribution fee, FTDI shall also pay Bank a Rule 12b-1 distribution fee.
All Rule 12b-1 servicing and distribution fees shall be based on the value of
shares attributable to Customers and eligible for such payment, and shall be
calculated on the basis and at the rates set forth in the compensation schedule
then in effect for the applicable Plan (the "Schedule"). Without prior approval
by a majority of the outstanding shares of a particular Class of a Fund, the
aggregate annual fees paid to Bank pursuant to such Plan shall not exceed the
amounts stated as the "annual maximums" in such Plan Class' Prospectus, which
amount shall be a specified percent of the value of such Plan Class' net assets
held in Customers' accounts which are eligible for payment pursuant to this
Agreement (determined in the same manner as such Plan Class uses to compute its
net assets, as set forth in its effective Prospectus).
Bank shall furnish FTDI and each Fund that has a Plan Class (each, a
"Plan Fund") with such information as shall reasonably be requested by the Board
of Directors, Trustees or Managing General Partners (hereinafter referred to as
"Directors") of such Plan Fund with respect to the fees paid to Bank pursuant to
the Schedule of such Plan Fund. FTDI shall furnish to the Directors of the Plan
Funds, for their review on a quarterly basis, a written report of the amounts
expended under the Plans and the purposes for which such expenditures were made.
Each Plan and the provisions of any agreement relating to such Plan
must be approved annually by a vote of the Directors of the Fund that has such
Plan, including such persons who are not interested persons of such Plan Fund
and who have no financial interest in such Plan or any related agreement ("Rule
12b-1 Directors"). Each Plan or the provisions of this Agreement relating to
such Plan may be terminated at any time by the vote of a majority of Rule 12b-1
Directors of the Fund that has such Plan, or by a vote of a majority of the
outstanding shares of the Class that has such Plan on sixty (60) days' written
notice, without payment of any penalty. A Plan or the provisions of this
Agreement may also be terminated by any act that terminates the underwriting
agreement between FTDI and the Fund that has such Plan, and/or the management or
administration agreement between Franklin Advisers, Inc. or ▇▇▇▇▇▇▇▇▇ Investment
Counsel, LLC or their affiliates and such Plan Fund. In the event of the
termination of a Plan for any reason, the provisions of this Agreement relating
to such Plan will also terminate.
Continuation of a Plan and the provisions of this Agreement relating
to such Plan are conditioned on Rule 12b-1 Directors being ultimately
responsible for selecting and nominating any new Rule 12b-1 Directors. Under
Rule 12b-1, Directors of any of the Plan Funds have a duty to request and
evaluate, and persons who are party to any agreement related to a Plan have a
duty to furnish, such information as may reasonably be necessary to an informed
determination of whether the Plan or any agreement should be implemented or
continued. Under Rule 12b-1, a Plan Fund is permitted to implement or continue a
Plan or the provisions of this Agreement relating to such Plan from year-to-year
only if, based on certain legal considerations, the Board of Directors of such
Plan Fund is able to conclude that the Plan will benefit the Plan Class. Absent
such yearly determination, a Plan and the provisions of this Agreement relating
to such Plan must be terminated as set forth above. In addition, any obligation
assumed by a Fund pursuant to this Agreement shall be limited in all cases to
the assets of such Fund and no person shall seek satisfaction thereof from
shareholders of a Fund. Bank agrees to waive payment of any amounts payable to
Bank by FTDI under a Fund's Plan until such time as FTDI is in receipt of such
fee from the Fund.
In the event of any inconsistency, the provisions of the Plans between
the Plan Funds and FTDI shall control over the provisions of this Agreement.
g) Other Distribution Services
From time to time, FTDI may offer telephone and other augmented
services in connection with Transactions under this Agreement. If Bank uses any
such service, Bank will be subject to the procedures applicable to the service,
whether or not Bank has executed any agreement required for the service.
h) Conditional Orders; Certificates
FTDI will not accept any conditional Transaction orders. Delivery of
certificates or confirmations for shares purchased shall be made by a Fund only
against constructive receipt of the purchase price, subject to deduction of any
Fee and FTDI's portion of the sales charge, if any, on such sale. No
certificates for shares of the Funds will be issued unless specifically
requested.
i) Cancellation of Orders
If payment for shares purchased is not received within the time
customary or the time required by law for such payment, the sale may be canceled
without notice or demand, and neither FTDI nor the Fund(s) shall have any
responsibility or liability for such a cancellation; alternatively, at FTDI's
option, the unpaid shares may be sold back to the Fund, and Bank shall be liable
for any resulting loss to FTDI or to the Fund(s). FTDI shall have no liability
for any check or other item returned unpaid to Bank after Bank has paid FTDI on
behalf of a purchaser. FTDI may refuse to liquidate the investment unless FTDI
receives the purchaser's signed authorization for the liquidation.
j) Order Corrections
Bank shall assume responsibility for any loss to a Fund(s) caused by a
correction made subsequent to the trade date, provided such correction was not
based on any error, omission or negligence on FTDI's part, and Bank will
immediately pay such loss to the Fund(s) upon notification.
k) Redemptions; Cancellation
Redemptions or repurchases of shares will be made at the net asset
value of such shares, less any applicable deferred sales or redemption charges,
in accordance with the applicable Fund Prospectuses. If Bank sells shares for
the account of the record owner to the Fund(s), Bank shall be deemed to
represent to FTDI that Bank is doing so as agent for Customer and that Bank is
authorized to do so in such capacity. Such sales to the Fund(s) shall be at the
redemption or repurchase price then currently in effect for such shares. If on a
redemption which Bank has ordered, instructions in proper form, including
outstanding certificates, are not received within the time customary or the time
required by law, the redemption may be canceled forthwith without any
responsibility or liability on the part of FTDI or any Fund, or at the option of
FTDI, FTDI may buy the shares redeemed on behalf of the Fund(s), in which latter
case, FTDI may hold Bank responsible for any loss to the Fund(s) or loss of
profit suffered by FTDI resulting from Bank's failure to settle the redemption.
l) Exchanges
Exchange orders will be effective only for uncertificated shares or
for which share certificates have been previously deposited and may be subject
to any fees or other restrictions set forth in the applicable Prospectuses.
Exchanges from a Fund sold with no sales charge to a Fund which carries a sales
charge, and exchanges from a Fund sold with a sales charge to a Fund which
carries a higher sales charge may be subject to a sales charge in accordance
with the terms of the applicable Fund's Prospectus. Bank will be obligated to
comply with any additional exchange policies described in the applicable Fund's
Prospectus, including without limitation any policy restricting or prohibiting
excessive and/or short term trading activity, the collection of redemption fees
associated with such trading activity and the prohibition of "market timing," as
defined in the Prospectus.
m) Qualification of Shares
Upon request, FTDI shall notify Bank of the states or other
jurisdictions in which each Fund's shares are currently noticed, registered or
qualified for offer or sale to the public. FTDI shall have no obligation to make
notice filings of, register or qualify, or to maintain notice filings of,
registration of or qualification of, Fund shares in any particular state or
other jurisdiction. FTDI shall have no responsibility, under the laws regulating
the sale of securities in any U.S. or foreign jurisdiction, for the
registration, qualification or licensed status of Bank or any of its agents or
sub-agents in connection with the purchase or sale of Fund shares or for the
manner of offering, sale or purchase of Fund shares. Except as stated in this
paragraph, FTDI shall not, in any event, be liable or responsible for the issue,
form, validity, enforceability and value of such shares or for any matter in
connection therewith, and no obligation not expressly assumed by FTDI in this
Agreement shall be implied. If it is necessary to file notice, register or
qualify shares of any Fund in any country, state or other jurisdiction having
authority over the purchase or sale of Fund shares that are purchased by a
Customer, it will be Bank's responsibility to arrange for and to pay the costs
of such notice filing, registration or qualification; prior to any such notice
filing, registration or qualification, Bank will notify FTDI of its intent and
of any limitations that might be imposed on the Funds, and Bank agrees not to
proceed with such notice filing, registration or qualification without the
written consent of the applicable Fund(s) and of FTDI. Nothing in this Agreement
shall be deemed to be a condition, stipulation, or provision binding any person
acquiring any security to waive compliance with any provision of the Securities
Act of 1933, as amended (the "1933 Act"), the 1934 Act, the 1940 Act, the rules
and regulations of the U.S. Securities and Exchange Commission ("SEC"), or any
applicable laws or regulations of any government or authorized agency in the
U.S. or any other country having jurisdiction over the offer or sale of shares
of the Funds, or to relieve the parties hereto from any liability arising under
such laws, rules or regulations.
n) Indemnification
Bank agrees to indemnify, and hold harmless FTDI, and the Funds, as
well as FTDI's and the Funds' respective officers, directors and employees
(collectively "Indemnitees"), from any and all actual or alleged losses, claims,
liabilities and expenses (including reasonable attorneys' fees and
expenses)(collectively, "Losses") arising from or as the result of (1) any
actual or alleged violation of any statute or regulation (including without
limitation U.S. and state securities laws and regulations and consumer
protection laws, as well as the laws of any foreign country where Bank offers or
sells shares of the Funds) and/or any actual and/or alleged violation of common
law (including without limitation all tort and/or contract claims), which in any
way relate to any offer, sale, redemption, transfer or exchange of shares of the
Funds (including any actual and/or alleged mishandling of the Transaction and/or
misappropriation of the proceeds in connection therewith) by Bank and/or by or
through any of Bank's registered representatives, agents, independent
contractors and/or employees; (2) the breach by Bank or any of Bank's registered
representatives, agents, independent contractors and/or employees of any of the
terms and conditions of this Agreement; and/or (3) any use of, including
unauthorized access obtained through Bank, of the Sites by Bank or Bank's
officers, directors, employees or agents; provided, however, that an Indemnitee
shall not be entitled to indemnification hereunder to the extent the actual and
proximate cause of any such Losses is attributed to such Indemnitee's own
negligence, willful misconduct or breach of this Agreement.
In addition, Bank agrees that in the event that Indemnitees are named
in any legal proceedings (including, but not limited to, lawsuits filed in court
and statements of claim filed in an arbitration forum) which involve claims
and/or liabilities that are the subject of this indemnification agreement, FTDI
and the Funds may, following notice to Bank, retain attorneys of FTDI's choice
to represent FTDI and/or the Funds in such legal proceedings at Bank's expense,
and Bank will promptly reimburse FTDI and/or the Funds for the attorneys' fees
and expenses incurred in connection with the defense of any such legal
proceedings. This Paragraph 5(n) shall survive the termination of this
Agreement.
o) Prospectus and Sales Materials; Limit on Advertising
No person is authorized to give any information or make any
representations concerning shares of any Fund except those contained in the
Fund's current Prospectus or in materials produced by FTDI as information
supplemental to such Prospectus. FTDI will supply Prospectuses, reasonable
quantities of supplemental sale literature, sales bulletins, and additional
information as issued. Bank agrees not to use other advertising or sales
material or other material or literature relating to the Funds except that which
(a) conforms to the requirements of any applicable laws or regulations of any
government or authorized agency in the U.S. or any other country having
jurisdiction over the offering or sale of shares of the Funds, and (b) is
approved in writing by FTDI in advance of such use. Such approval may be
withdrawn by FTDI in whole or in part upon notice to Bank, and Bank shall, upon
receipt of such notice, immediately discontinue the use of such sales
literature, sales material and advertising. Bank is not authorized to modify or
translate any such materials without the prior written consent of FTDI.
p) Customer Information
Each party to this Agreement agrees to limit the disclosure of
non-public personal information of shareholders and customers consistent with
its policies on privacy with respect to such information and Regulation S-P of
the SEC. Each party hereby agrees that it will comply with all applicable
requirements under the regulations implementing Title V of the
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and any other applicable federal and state consumer
privacy acts, rules and regulations. Each party further represents that it has
in place, and agrees that it will maintain, information security policies and
procedures for protecting nonpublic personal customer information adequate to
conform to applicable legal requirements.
q) Use of Site
Each of Bank's representatives, agents, independent contractors and
employees will have access to the Sites as provided herein, (a) upon
registration by such individual on a Site (including providing certain data and
codes identifying Bank), (b) if Bank causes an MOS Site Access Request Form (an
"Access Form") to be signed by Bank's authorized supervisory personnel and
submitted to FTDI, as a Schedule to, and legally a part of, this Agreement, or
(c) if Bank provides such individual with the necessary access codes or other
information necessary to access the Sites through any generic or firm-wide
authorization FTDI may grant Bank from time to time. Upon receipt by FTDI of a
completed registration submitted by an individual through the Sites or a signed
Access Form referencing such individual, FTDI shall be entitled to rely upon the
representations contained therein as if Bank had made them directly hereunder
and FTDI will issue a user identification, express number and/or password
(collectively, "Access Code"). Any person to whom FTDI issues an Access Code or
to whom Bank provides the necessary Access Codes or other information necessary
to access the Sites through any generic or firm-wide authorization FTDI may
grant Bank from time to time shall be an "Authorized User." FTDI shall be
entitled to assume that such person validly represents Bank and that all
instructions received from such person are authorized, in which case such person
will have access to the Site, including all services and information to which
Bank is authorized to access on the Site. All inquiries and Transactions
initiated by Bank (including Bank's Authorized Users) are Bank's responsibility,
are at Bank's risk and are subject to FTDI's review and approval (which could
cause a delay in processing). Bank agrees that FTDI does not have a duty to
question information or instructions Bank (including Authorized Users) gives to
FTDI under this Agreement, and that FTDI is entitled to treat as authorized, and
act upon, any such instructions and information Bank submits to FTDI. Bank
agrees to take all reasonable measures to prevent any individual other than an
Authorized User from obtaining access to the Site. Bank agrees to inform FTDI if
Bank wishes to restrict or revoke the access of any individual Access Code. If
Bank becomes aware of any loss or theft or unauthorized use of any Access Code,
Bank agrees to contact FTDI immediately. Bank also agrees to monitor its
(including Authorized Users') use of the Site to ensure the terms of this
Agreement are followed. Bank acknowledges that the Sites are transmitted over
the Internet on a reasonable efforts basis and FTDI does not warrant or
guarantee their accuracy, timeliness, completeness, reliability or
non-infringement. Moreover, Bank acknowledges that the Sites are provided for
informational purposes only, and are not intended to comply with any
requirements established by any regulatory or governmental agency.
6. CONTINUOUSLY OFFERED CLOSED-END FUNDS
This Paragraph 6 relates solely to shares of Funds that represent a
beneficial interest in shares that are issued by a Fund that is a closed-end
investment company registered under the 1940 Act that makes a continuous
offering of it shares, for which FTDI or an affiliate of FTDI serves as
principal underwriter and that periodically repurchases its shares (each, a
"Trust"). Shares of a Trust being offered to the public will be registered under
the 1933 Act and are expected to be offered during an offering period that may
continue indefinitely ("Continuous Offering Period"). There is no guarantee that
such a continuous offering will be maintained by the Trust. The Continuous
Offering Period, shares of a Trust and certain of the terms on which such shares
are being offered are more fully described in the Prospectus of the Trust.
As set forth in a Trust's then current Prospectus, FTDI shall provide Bank
with appropriate compensation for purchases of shares of the Trust made by Bank
for the account of Customers or by Customers. In addition, Bank may be entitled
to a fee for servicing Customers who are shareholders in a Trust, subject to
applicable law. Bank agrees that any repurchases of shares of a Trust that were
originally purchased as Qualifying Sales shall be subject to Paragraph 5(e)
hereof.
Bank expressly acknowledges and understands that, notwithstanding anything
to the contrary in this Agreement:
a) No Trust has a Rule 12b-1 Plan and in no event will a Trust pay, or
have any obligation to pay, any compensation directly or indirectly to
Bank.
b) Shares of a Trust will not be repurchased by either the Trust (other
than through repurchase offers by the Trust from time to time, if any)
or by FTDI and no secondary market for such shares exists currently,
or is expected to develop. Any representation as to a repurchase or
tender offer by the Trust, other than that set forth in the Trust's
then current Prospectus, notification letters, reports or other
related material provided by the Trust, is expressly prohibited.
c) An early withdrawal charge payable by shareholders of a Trust to FTDI
may be imposed on shares accepted for repurchase by the Trust that
have been held for less than a stated period, as set forth in the
Trust's then current Prospectus.
d) In the event a Customer cancels his or her order for shares of a Trust
after confirmation, such shares will not be repurchased, remarketed or
otherwise disposed of by or through FTDI.
7. GENERAL
a) Successors and Assignments
This Agreement shall extend to and be binding upon the parties hereto
and their respective successors and assigns; provided that this Agreement will
terminate automatically in the event of its assignment by FTDI. For purposes of
the preceding sentence, the word "assignment" shall have the meaning given to it
in the 1940 Act. Bank may not assign this Agreement without the advance written
consent of FTDI.
b) Paragraph Headings
The paragraph headings of this Agreement are for convenience only, and
shall not be deemed to define, limit, or describe the scope or intent of this
Agreement.
c) Severability
Should any provision of this Agreement be determined to be invalid or
unenforceable under any law, rule, or regulation, that determination shall not
affect the validity or enforceability of any other provision of this Agreement.
d) Waivers
There shall be no waiver of any provision of this Agreement except a
written waiver signed by Bank and FTDI. No written waiver shall be deemed a
continuing waiver or a waiver of any other provision, unless such written waiver
expresses such intention.
e) Sole Agreement
This Agreement is the entire agreement of Bank and FTDI and supersedes
all oral negotiations and prior writings, including any prior bank selling
agreements.
f) Governing Law
This Agreement shall be construed in accordance with the laws of the
State of California, not including any provision which would require the general
application of the law of another jurisdiction, and shall be binding upon the
parties hereto when signed by FTDI and accepted by Bank, either by Bank's
signature in the space provided below or by Bank's first trade entered after
receipt of this Agreement.
g) Setoff; Arbitration
Should Bank owe any sum of money to FTDI under or in relation to this
Agreement for the purchase, sale, redemption or repurchase of any Fund shares,
FTDI may offset and recover the amount owed by Bank to FTDI or the Funds from
any amount owed by FTDI to Bank or from any other account Bank has with FTDI,
without notice or demand to Bank. Either party may submit any dispute under this
Agreement to binding arbitration under the commercial arbitration rules of the
American Arbitration Association. Judgment upon any arbitration award may be
entered by any court having jurisdiction.
h) Amendments
FTDI may amend this Agreement at any time by depositing a written
notice of the amendment in the U.S. mail, first class postage pre-paid,
addressed to Bank's address given below (or such other address as specified in
writing by Bank). Bank's placement of any Transaction order for shares of a Fund
or acceptance of any payments after the effective date and receipt of notice of
any such amendment shall constitute Bank's acceptance of the amendment.
Notwithstanding the foregoing, the Site Terms may be separately amended as
provided therein and as so amended and in effect from time to time shall be a
part of this Agreement.
i) Term and Termination
This Agreement shall continue in effect until terminated and shall
terminate automatically in the event that Bank ceases to be a "bank" as set
forth in paragraph 2(a) of this Agreement. FTDI or Bank may terminate this
Agreement at any time by written notice to the other, but such termination shall
not affect the payment or repayment of Fees on Transactions prior to the
termination date. Termination also will not affect the indemnities given under
this Agreement.
j) Acceptance; Cumulative Effect
This Agreement is cumulative and supersedes any similar agreement
previously in effect. It shall be binding upon the parties hereto when signed by
FTDI and accepted by Bank. If Bank has a current selling agreement with FTDI,
Bank's first trade or acceptance of payments from FTDI after receipt of this
Agreement, as it may be amended pursuant to paragraph 7(h), above, shall
constitute Bank's acceptance of the terms of this Agreement.
Otherwise, Bank's signature below shall constitute Bank's acceptance of these
terms.
FRANKLIN ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.
By
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▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Legal Officer
(for legal notices only)
650/312-2000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ 727/299-8712
To the Bank or Trust Company: If you have NOT previously signed an agreement
with FTDI for the sale of mutual fund shares to your customers, please complete
and sign this section and return the original to us.
BANK OR TRUST COMPANY:
(Bank's name)
By
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(Signature)
Name:
Title:
Date: