May 15, 1998

Re:   Amendment of Dealer Agreement - Notice Pursuant to Section 16

Dear Securities Dealer:

This letter constitutes notice of amendment of the current Dealer Agreement (the
"Agreement") between  Franklin/Templeton  Distributors,  Inc. ("we" or "us") and
you pursuant to Section 16 of the Agreement.  The Agreement is hereby amended as
follows:

         1.  Defined terms in this amendment have the meanings as stated
in the Agreement unless otherwise indicated.

         2.  Section 6 is modified to add a subsection 6(c), as follows:

                  (c)  The following limitations apply with respect to
shares of each Trust as described in Section 13 of this Agreement.

                 (1) Consistent with the NASD Conduct Rules, the total
compensation  to be  paid  to us and  selected  dealers  and  their  affiliates,
including you and your affiliates, in connection with the distribution of shares
of a Trust will not exceed the underwriting  compensation  limitation prescribed
by NASD Conduct Rule 2710. The total underwriting  compensation to be paid to us
and selected  dealers and their  affiliates,  including you and your affiliates,
may  include:  (i) at the time of purchase of shares a payment to you or another
securities  dealer of 1% of the  dollar  amount of the  purchased  shares by the
Distributor;  and (ii) a  quarterly  payment at an annual rate of .50% to you or
another  securities  dealer based on the value of such remaining  shares sold by
you or such  securities  dealer,  if after  twelve  (12) months from the date of
purchase, the shares sold by you or such securities dealer remain outstanding.

                           (2)  The maximum compensation shall be no more
than as disclosed in the section "Payments to Dealers" of the prospectus of the
applicable Trust.

Pursuant to Section 16 of the Agreement, your placement of an order or
acceptance of payments of any kind after the effective date and receipt of
notice of this amendment shall constitute your acceptance of this amendment.



FRANKLIN/TEMPLETON DISTRIBUTORS, INC.

By /s/GREG JOHNSON
         Greg Johnson, President

777 Mariners Island Blvd.
San Mateo, CA 94404

Attention: Chief Legal Officer (for legal notices only)
650/312-2000

100 Fountain Parkway
St. Petersburg, FL 33716
813/299-8712