Common use of Distribution Plan Clause in Contracts

Distribution Plan. A. The provisions set forth in this paragraph 16 (hereinafter referred to as the "Plan") have been adopted pursuant to Rule 12b-1 under the 1940 Act by the Fund, having been approved by a majority of the Managing General Partners who are not interested persons of the Fund and who have no direct or indirect financial interest in the operation of the Plan (the "non-interested Managing General Partners"), cast in person at a meeting called for the purpose of voting on such Plan. The Managing General Partners concluded that the compensation to be paid to the Manager of the Fund was fair and not excessive, and that due solely to the uncertainty that may exist from time to time with respect to whether payments to be made by the Fund or the Manager to other firms may be deemed to constitute distribution expenses, it was determined that adoption of the Plan would be prudent and in the best interests of the Fund and its shareholders. The Managing General Partners' approval included a determination that in the exercise of their reasonable business judgment and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit the Fund and its shareholders. The Plan has also been approved by a vote of at least a majority of the Fund's outstanding voting securities. B. No additional payments are to be made by the Fund as a result of the Plan other than the compensation the Fund is otherwise obligated to make (i) to the Manager pursuant to paragraph 4 of the Management Agreement between the Fund and Franklin Advisers, Inc. and (ii) to its Shareholder Servicing Agent pursuant to their respective Agreements as in effect at any time, including any reimbursement for costs the Fund is obligated to make under said agreements. Notwithstanding subparagraphs (i) and (ii) above, the Plan recognizes that the Fund may also make payments in the ordinary course of its business and to the extent any such payments by the Fund or to or by the Manager, the Fund's Shareholder Servicing Agent or other parties on behalf of the Fund, the Manager or the Shareholder Servicing Agent are deemed (e.g. by a court of law) to be payments for the financing of any activity primarily intended to result in the sale of Shares issued by the Fund within the context of Rule 12b-1 under the 1940 Act, then such payments shall be deemed to be made pursuant to the Plan as set forth herein. Such costs, the payment of which are intended to be within the scope of the Plan, but only to the extent they are deemed to be payments for an activity primarily intended to result in the sale of Shares issued by the Fund, may include, but not necessarily be limited to, the following: (a) the costs of the preparation, printing and mailing of all required reports and notices to shareholders; (b) the costs of the preparation, printing and mailing or other dissemination of all prospectuses (including statements of additional information); (c) the costs of the preparation, printing and mailing of any proxy statements and proxies; (d) all legal and accounting fees relating to the preparation of any such reports, prospectuses, statements of additional information, proxies and proxy statements; (e) all fees and expenses relating to the qualification of the Fund and/or its Shares under the securities or "Blue Sky" laws of any jurisdiction; (f) all fees under the 1933 Act and the 1940 Act, including fees in connection with any application for exemption relating to or directed toward the sale of the Shares of the Fund; (g) all fees and assessments of the Investment Company Institute or other trade or any successor organization, irrespective of whether some of its activities are designed to provide sales assistance; (h) all costs of the preparation and mailing of confirmations of Shares sold or redeemed, and reports of Share balances; (i) all costs of responding to telephone or mail inquiries of investors or prospective investors; and (j) payments to dealers, financial institutions, advisers, or other firms, any one of whom may receive monies in respect of the Shares of the Fund owned by shareholders for whom such firm is the dealer of record or holder of record in any capacity, or with whom such firm has a servicing, agency or distribution relationship. Servicing may include, among other things: (i) answering client inquiries regarding the Fund;

Distribution Plan. A. The provisions set forth in this paragraph 16 (hereinafter referred to as the "Plan") have been adopted pursuant to Rule 12b-1 under the 1940 Act by the Fund, having been approved by a majority of the Managing General Partners who are not interested persons of the Fund and who have no direct or indirect financial interest in the operation of the Plan (the "non-interested Managing General Partners"), cast in person at a meeting called for the purpose of voting on such Plan. The Managing General Partners concluded that the compensation to be paid to the Manager of the Fund was fair and not excessive, and that due solely to the uncertainty that may exist exist-from time to time with respect to whether payments to be made by the Fund or the Manager to other firms may be deemed to constitute distribution expenses, it was determined that adoption of the Plan would be prudent and in the best interests of the Fund and its shareholders. The Managing General Partners' approval included a determination that in the exercise of their reasonable business judgment and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit the Fund and its shareholders. The Plan has also been approved by a vote of at least a majority of the Fund's outstanding voting securities. B. No additional payments are to be made by the Fund as a result of the Plan other than the compensation the Fund is otherwise obligated to make (i) to the Manager pursuant to paragraph 4 of the Management Agreement between the Fund and Franklin Advisers, Inc. and (ii) to its Shareholder Servicing Agent pursuant to their respective Agreements as in effect at any time, including any reimbursement for costs the Fund is obligated to make under said agreements. Notwithstanding subparagraphs (i) and (ii) above, the Plan recognizes that the Fund may also make payments in the ordinary course of its business and to the extent any such payments by the Fund or to or by the Manager, the Fund's Shareholder Servicing Agent or other parties on behalf of the Fund, the Manager or the Shareholder Servicing Agent are deemed (e.g. by a court of law) to be payments for the financing of any activity primarily intended to result in the sale of Shares issued by the Fund within the context of Rule 12b-1 under the 1940 Act, then such payments shall be deemed to be made pursuant to the Plan as set forth herein. Such costs, the payment of which are intended to be within the scope of the Plan, but only to the extent they are deemed to be payments for an activity primarily intended to result in the sale of Shares issued by the Fund, may include, but not necessarily be limited to, the following: (a) the costs of the preparation, printing and mailing of all required reports and notices to shareholders; (b) the costs of the preparation, printing and mailing or other dissemination of all prospectuses (including statements of additional information); (c) the costs of the preparation, printing and mailing of any proxy statements and proxies; (d) all legal and accounting fees relating to the preparation of any such reports, prospectuses, statements of additional information, proxies and proxy statements; (e) all fees and expenses relating to the qualification of the Fund and/or its Shares under the securities or "Blue Sky" laws of any jurisdiction; (f) all fees under the 1933 Act and the 1940 Act, including fees in connection with any application for exemption relating to or directed toward the sale of the Shares of the Fund; (g) all fees and assessments of the Investment Company Institute or other trade or any successor organization, irrespective of whether some of its activities are designed to provide sales assistance; (h) all costs of the preparation and mailing of confirmations of Shares sold or redeemed, and reports of Share balances; (i) all costs of responding to telephone or mail inquiries of investors or prospective investors; and (j) payments to dealers, financial institutions, advisers, or other firms, any one of whom may receive monies in respect of the Shares of the Fund owned by shareholders for whom such firm is the dealer of record or holder of record in any capacity, or with whom such firm has a servicing, agency or distribution relationship. Servicing may include, among other things: (i) answering client inquiries regarding the Fund;