Document Required to be Delivered

Date:

March 13, 2007

To:

Franklin Resources, Inc. (“Counterparty”)

Attention:

Shelly Painter

From:

Merrill Lynch International (“MLI”)

Merrill Lynch Financial Centre

2 King Edward Street

London EC1A 1HQ

Trade:

With respect to each Transaction, Counterparty, subject to the terms and conditions and in reliance upon the representations and warranties set forth herein, will purchase from MLI Shares in an amount equal to the Number of Shares (such Shares, the “Repurchase Shares”). On the Initial Settlement Date, (A) Counterparty will make an initial payment

for the Repurchase Shares by delivering an amount equal to the Initial Settlement Amount by wire transfer of immediately available funds to an account designated by MLI and (B) MLI will deliver the Repurchase Shares to Counterparty. The parties understand and agree that the delivery of the Repurchase Shares by or on behalf of MLI upon the payment of the Initial Settlement Amount by Counterparty is irrevocable and that as of the Initial Settlement Date Counterparty shall be the sole beneficial owner of the Repurchase Shares for all purposes. The parties further understand and agree that the terms and conditions of each Transaction will have the effect of increasing or decreasing the purchase price for the Repurchase Shares to an amount greater than or less than the Initial Settlement Amount.

Trade Date:

For each Transaction, as set forth in the corresponding Supplemental Confirmation.

Buyer:

MLI

Seller:

Counterparty

Shares:

Shares of common stock, par value USD $0.10 per share, of Counterparty (Symbol: BEN)

Number of Shares:

For each Transaction, as set forth in the Supplemental Confirmation.

Initial Share Price:

For each Transaction, as set forth in the Supplemental Confirmation, to be the Relevant Price as of the Trade Date.

Initial Settlement Amount:

The product of the Number of Shares and the Initial Share Price.

Initial Settlement Date:

The Exchange Business Day following the Trade Date.

Forward Price:

The Initial Share Price.

Exchange:

New York Stock Exchange

Related Exchange(s):

All Exchanges

Market Disruption Event:

The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by replacing the words “at any time during the one-hour period that ends at the relevant Valuation Time” in the third line thereof with the words “at any time on any Scheduled Trading Day during the Valuation Period or” after the word “material”.

Aggregate Adjustment Amount:

For each Transaction, as set forth in the Supplemental Confirmation.

Valuation:

Valuation Period:

For each Transaction, each Scheduled Trading Day from and including the Initial Settlement Date up to and including the Valuation Date; provided, that with respect to each Suspension Event (if any) affecting such Scheduled Trading Days, MLI may, by written notice to Counterparty (which notice shall not specify the reason for MLI’s election to suspend the Valuation Period), exclude the Scheduled Trading Day(s) on which such Suspension Event has occurred (such days, “Suspension Event Days”) and extend the last possible Valuation Date by the total number of such Suspension Event Days; provided, further, that notwithstanding anything to the contrary in the Equity Definitions, to the extent that any Scheduled Trading Days in the Valuation Period are Disrupted Days, the Calculation Agent may exclude such Disrupted Days and extend the last possible Valuation Date by the number of such Disrupted Days (in addition to any Suspension Event Days, without duplication).

Suspension Event:

Each and every one of the following events: (i) MLI concludes, in its sole discretion, that Counterparty will be engaged in a distribution of the Shares for purposes of Regulation M or that the “restricted period” in respect of such distribution has not yet been completed; (ii) MLI commercially reasonably concludes, that it is appropriate with respect to any legal, regulatory or self-regulatory requirements for it to refrain from purchasing Shares during any part of the Valuation Period; (iii) Counterparty is subject to a third-party tender offer; or (iv) a Potential Repurchase Day is elected.

Potential Repurchase Day:

A Scheduled Trading Day specified by the Counterparty by notice to MLI prior to 3 p.m. New York City time on the Trading Day immediately preceding such day; provided that Counterparty may not specify more than five Potential Repurchase Days during the Valuation Period. On a Potential Repurchase Day the Counterparty may purchase Shares in a manner consistent with the conditions of Rule 10b-18(b) of the Exchange Act.

Exclusion Mechanics:

With respect to each Suspension Event Day and Disrupted Day (each, an “Exclusion Day”), the Calculation Agent must determine whether (i) such Exclusion Day should be excluded in full, in which case such Exclusion Day shall not be included for purposes of determining the Settlement Price, or (ii) such Exclusion Day should only be partially excluded, in which case the VWAP Price for such Exclusion Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Exclusion Day effected during the portion of the Scheduled Trading Day unaffected by such event or events, and the weighting of the VWAP Prices for the relevant Scheduled Trading Days during the Valuation Period shall be adjusted by the Calculation Agent for purposes of determining the Settlement Price. If a Disrupted Day occurs during the Valuation Period, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent may either (i) determine the VWAP Price for such ninth Scheduled Trading Day and adjust the weighting of the VWAP Prices for the relevant Scheduled Trading Days during the Valuation Period as it deems appropriate for purposes of determining the Settlement Price based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares or (ii) disregard such day for purposes of determining the Settlement Price and further postpone the Valuation Date, in either case as it deems appropriate to determine the VWAP Price. In the event that there are Exclusion Days arising from a Suspension Event described in Clause (i) or (iv) under “Suspension Event” above, then MLI shall not purchase Shares in connection with the relevant transaction during each such Exclusion Day that is fully excluded and during each portion of a partially excluded Exclusion Day that is affected by such Suspension Event.

Valuation Date

For each Transaction, the earlier to occur of the date set forth in the Supplemental Confirmation (as the same may be postponed in accordance with the provisions hereof) (the “Scheduled Valuation Date”) and any Accelerated Valuation Date.

Accelerated Valuation Date:

For each Transaction, any date, occurring on or after the First Acceleration Date but prior to the Scheduled Valuation Date, designated by MLI to be the Valuation Date; MLI shall notify Counterparty of such designation prior to 3 p.m. New York City time on the Scheduled Trading Day immediately following such Accelerated Valuation Date. For the avoidance of doubt, MLI may only make one such notification with respect to each Transaction.

First Acceleration Date:

For each Transaction, as set forth in the Supplemental Confirmation.

Settlement Terms:

Settlement Currency:

USD

Settlement Method Election:

Applicable; provided that Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words

“Net Share” and deleting the word “Physical” in the last line thereof and replacing it with
the word “Cash”.

Electing Party

Counterparty

Settlement Method Election Date:

The 5th Scheduled Trading Day immediately preceding the relevant First Acceleration Date.

Default Settlement Method:

Cash Settlement, and for this purpose, the words “the settlement method shall be” in the 13^th line of Section 7.1 of the Equity Definitions shall be replaced by the words “such non-delivery shall (notwithstanding the first paragraph of “Other Share Deliveries in lieu of Cash Payment” pursuant to a Master Confirmation dated March 13, 2007 between MLI and the Counterparty), constitute an irrevocable election by the Electing Party that the settlement method shall be, and the Settlement Method shall be,”.

Cash Settlement Payment Date:

Three Currency Business Days following the Valuation Date

Forward Cash Settlement Amount:

Notwithstanding Section 8.5 of the Equity Definitions, an amount in the Settlement Currency equal to the sum of (a) the Number of Shares multiplied by an amount equal to (i) the Settlement Price minus (ii) the Forward Price plus (b) the Aggregate Adjustment Amount. This amount shall be paid as specified by Section 8.4(a) of the Equity Definitions.

Settlement Price:

The arithmetic mean of the VWAP Prices of the Shares for each Scheduled Trading Day in the Valuation Period minus the Settlement Price Adjustment Amount.

Settlement Price Adjustment Amount:

For each Transaction, as set forth in the Supplemental Confirmation.

VWAP Price:

For any Scheduled Trading Day that is not an Exclusion Day, the daily volume weighted average price per Share traded on the New York Stock Exchange under the BEN ticker for such Scheduled Trading Day as reported on Bloomberg Page “BEN.N <Equity> AQR SEC” (or any successor thereto) or, in the event such price is not so reported on such Scheduled Trading Day, as reasonably determined by MLI. For the purpose of calculating the VWAP Price, the Calculation Agent will include only those trades which are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and pursuant to the conditions of Rule 10b-18(b)(3) and (b)(4) under the Exchange Act.

Net Share Settlement:

Net Share Settlement Procedures:

Net Share Settlement shall be made in accordance with the procedures described below under “Details of Net Share Settlement”.

Net Share Settlement Price:

The Relevant Price on the Net Share Valuation Date.

Initial Net Share Settlement Shares:

Notwithstanding Section 9.5 of the Equity Definitions, a number of Shares equal to the Forward Cash Settlement Amount divided by the Net Share Settlement Price.

Valuation Time:

As provided in Section 6.1 of the Equity Definitions; provided that Section 6.1 of the Equity Definitions is hereby amended by inserting the words “Net Share Valuation Date,” before the words “Valuation Date” in the first and third lines thereof.

Net Share Valuation Date:

The Exchange Business Day immediately following the Valuation Date.

Net Share Settlement Date:

The fifth Exchange Business Day immediately following the Valuation Date.

Reserved Shares:

Initially, 4,000,000 Shares; the Reserved Shares may be increased or decreased in a Supplemental Confirmation.

Relevant Price:

As provided in Section 1.23(b) of the Equity Definitions; provided that Section 1.23(b) of the Equity Definitions is hereby amended by replacing each occurrence therein of “the Valuation Date or Averaging Date, as the case may be,” with the term “such day”.

Stock Settlement Deficiency:

With respect to each Transaction, the occurrence of each date, if any, on which MLI determines that there is a Stock Settlement Deficiency Amount.

Stock Settlement Deficiency Amount:

The amount by which the value of the Initial Net Share Settlement Shares and any other Shares delivered by Counterparty to MLI pursuant to “Details of Net Share Settlement” below is less than the Forward Cash Settlement Amount, as determined by MLI.

Share Adjustments:

Method of Adjustment:

Calculation Agent Adjustment; provided, however, that an Extraordinary Dividend occurring with respect to a Transaction shall not constitute a Potential Adjustment Event, but the occurrence of an Extraordinary Dividend shall be an Additional Termination Event under the Agreement with respect to such Transaction, with such Transaction being an Affected Transaction and Counterparty being the Affected Party.

Extraordinary Dividends:

Each dividend or distribution payment (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) or (B) of the Equity Definitions) having an ex-dividend date during the Valuation Period, other than the payment of the Ordinary Dividend Amount on each Scheduled Dividend Date. For the avoidance of doubt, the rescheduling of a Scheduled Dividend Date to an earlier date shall result in an Ordinary Dividend Amount payable on such rescheduled day becoming an Extraordinary Dividend.

Ordinary Dividend Amount:

For each Transaction, as set forth in the Supplemental Confirmation.

Scheduled Dividend Dates:

For each Transaction, as set forth in the Supplemental Confirmation.

Extraordinary Events:

Consequences of Merger Events:

Share-for-Share:

Modified Calculation Agent Adjustment

Share-for-Other:

Cancellation and Payment; for the avoidance of doubt, the value of any embedded optionality in the Transaction shall be taken into account in determining the Cancellation Amount.

Share-for-Combined:

Component Adjustment

Determining Party:

MLI

Consequences of Tender Offers:

Share-for-Share:

Modified Calculation Agent Adjustment

Share-for-Other:

Cancellation and Payment; for the avoidance of doubt, the value of any embedded optionality in the Transaction shall be taken into account in determining the Cancellation Amount.

Share-for-Combined:

Component Adjustment

Determining Party:

MLI

New Shares:

The definition of “New Shares” in Section 12.1 of the Equity Definitions shall be amended by inserting at the beginning of subsection (i) the following: “(i) where the Exchange is located in the United States, publicly quoted, traded or listed on the New York Stock Exchange, the American Stock Exchange or the NASDAQ Stock Market LLC (or their respective successors) or otherwise,”.

Announcement Event:

If an Announcement Event occurs, the Calculation Agent will determine in good faith and in a commercially reasonable manner the economic effect of the Announcement Event on the theoretical value of the Transaction (including without limitation any change in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or to the Transaction) from the Announcement Date to the Valuation Date. If such economic effect is material, the Calculation Agent will adjust the terms of the Transaction to reflect such economic effect. “Announcement Event” shall mean the occurrence of the Announcement Date of a Merger Event or Tender Offer.

Nationalization, Insolvency or Delisting:

Cancellation and Payment; provided, that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange or The NASDAQ National Market (or their respective successors); and if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.

Determining Party:

MLI

Additional Disruption Events:

Change in Law:

Applicable

Insolvency Filing:

Applicable

Increased Cost of Stock Borrow:

Applicable; provided, that Sections 12.9(a)(viii) of the Equity Definitions is amended by deleting the words “the Initial Stock Loan Rate” and replacing them with “35 basis points” and Section 12.9(b)(v) of the Equity Definitions is amended by deleting the words “at a rate equal to or less than the Initial Stock Loan Rate” and replacing them with “at a rate equal to or less than 35 basis points”.

Hedging Party:

MLI

Determining Party;

MLI

Non-Reliance/Agreements and Acknowledgements Regarding Hedging Activities/Additional Acknowledgements:

Applicable

Compliance with Securities Laws:

Each party represents and agrees that it has complied, and will comply, in connection with each Transaction and all related or contemporaneous sales and purchases of Shares, with the applicable provisions of the Securities Act, and the Exchange Act, and the rules and regulations each thereunder, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act; provided that each party shall be entitled to rely conclusively on any information communicated by the other party concerning such other party’s market activities.

Each party further represents and warrants that if such party (“X”) purchases any Shares from the other party pursuant to any Transaction, such purchase(s) will comply in all material respects with (i) all laws and regulations applicable to X and (ii) all contractual obligations of X.

Each party acknowledges that the offer and sale of each Transaction to it is intended to be exempt from registration under the Securities Act by virtue of Section 4(2) thereof and the provisions of Regulation D thereunder (“Regulation D”). Accordingly, each party represents and warrants to the other that (i) it has the financial ability to bear the economic risk of its investment in each Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined under Regulation D, (iii) it will purchase each Transaction for investment and not with a view to the distribution or resale thereof, and (iv) the disposition of each Transaction is restricted under this Confirmation, the Securities Act and state securities laws.

Counterparty represents and warrants as of the date hereof, each Trade Date, the next Scheduled Trading Day following a Potential Repurchase Day unless such day is also a Potential Repurchase Date and each date on which it makes an election in respect of Net Share Settlement or another optional Share delivery that:

(a) each of its filings under the Exchange Act that are required to be filed from and including the ending date of Counterparty’s most recent prior fiscal year have been filed, and that, as of the respective dates thereof and hereof, there is no misstatement of material fact contained therein or omission of a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made not misleading;

(b) Counterparty is not in possession of material non-public information regarding the Shares or the Counterparty;

(c) Counterparty is not entering into any Transaction to facilitate a distribution of the common stock or in connection with a future distribution of securities;

(d) Counterparty is not entering into any Transaction to create actual or apparent trading activity in the common stock (or any security convertible into or exchangeable for common stock) or to manipulate the price of the

common stock (or any security convertible into or exchangeable for common stock);

(e) Counterparty is entering into each Transaction in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”); it is the intent of the parties that each Transaction comply with the requirements of Rule l0b5-l(c)(1)(i)(A) and (B) and each Transaction shall be interpreted to comply with the requirements of Rule 10b5-l(c) (the “Plan”); Counterparty will not seek to control or influence MLI or MLPF&S to make “purchases or sales” (within the meaning of Rule 10b5-1(c)(l)(i)(B)(3)) under any Transaction, including, without limitation, any decision to enter into any hedging transactions; Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of each Transaction under Rule 10b5-1;

(f) Neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during the four full calendar weeks immediately preceding the applicable Trade Date;

(g) The purchase or writing of each Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act, and Counterparty is not entering into any Transaction in anticipation of, or in connection with, or to facilitate a self-tender offer or a third-party tender offer;

(h) Each Transaction is consistent with the publicly announced program of Counterparty to repurchase, from time to time, Shares (the “Repurchase Program”); and

(i) Counterparty has full power and authority to undertake the Repurchase Program, and the Repurchase Program has been duly authorized and remains valid.

MLI represents and warrants, at all times beginning on the date of this Master Confirmation through and including the Valuation Date, that:

(a) MLI is not entering into this Confirmation or any Transaction to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) in violation of Section 9(a) or Section 10 of the Exchange Act; and

(b) MLI has implemented reasonable policies and procedure, taking into consideration the nature of its business, to ensure that individuals making decisions to purchase Shares in connection with the Transactions would not violate laws prohibiting trading on the basis of material non-public information concerning Counterparty or the Shares at all relevant times.

Counterparty covenants and agrees that:

(a) during the term of each Transaction to promptly notify MLI telephonically (which oral communication shall be promptly confirmed by telecopy to MLI) if Counterparty determines that as a result of an acquisition or other business transaction or for any other reason Counterparty will be engaged in a distribution of Shares or other securities for which the Shares are a reference security for purposes of Rule 102 of Regulation M under the Exchange Act and to promptly notify MLI by

telecopy of the period commencing on the date that is one (1) business day before the commencement of such distribution and ending on the day on which Counterparty completes the distribution (the “Distribution Period”); for the purposes of this Confirmation, the “term” of a Transaction shall not be considered to have been completed until all Shares required to be transferred to party hereto have been duly transferred and all cash amounts required to be paid to a party hereto have been duly paid;

(b) without the prior written consent of MLI, neither Counterparty nor any “affiliated purchaser” (as such term is defined in Rule 10b-18 under the Exchange Act) will acquire Shares (or equivalent interests or securities exchangeable, convertible or exercisable into Shares) or be a party to any repurchase or similar agreements pursuant to which a valuation, averaging or hedging period or similar such period overlaps or potentially overlaps with the term of any Transaction, other than (i) any acquisition of Shares (or any security convertible into or exchangeable for Shares) by Counterparty from holders of awards granted under Counterparty’s stock incentive plans, in connection with vesting, exercise, settlement, expiration or termination of such awards (or Counterparty being a party to a repurchase or similar agreement for such purpose), (ii) any acquisition of Shares (or any securities convertible into or exchangeable for Shares) by any “affiliated purchaser” (as such term is defined in Rule 10b-18 under the Exchange Act) of Counterparty pursuant to awards granted under the Counterparty’s stock incentive plans or pursuant to the Counterparty’s share purchase or 401(k) plan(s), (iii) any acquisition of Shares (or any securities convertible into or exchangeable for Shares) by the Counterparty in a private transaction from any director or employee of the Counterparty, (iv) any acquisition of Shares by Counterparty as contemplated in the definition of Potential Repurchase Day and (v) in those transactions already disclosed in writing to MLI;

(c) Counterparty shall report each Transaction as required in any applicable report filed by the Counterparty pursuant to the Exchange Act in compliance with Regulation S-K and/or Regulation S-B under the Exchange Act, as applicable;

(d) If a Potential Repurchase Day is elected by the Counterparty, the Counterparty shall advise MLI by 8 p.m. New York City Time on each such Potential Repurchase Day if any purchase made by the Counterparty was a block purchase within the meaning of Rule 10b-18(b)(4); and

(e) If the Counterparty elects two or more consecutive Potential Repurchase Days, MLI may make adjustments to the terms of this Master Confirmation or the relevant Confirmation that will compensate MLI in its good faith and commercially reasonable judgment for the loss in the value of the applicable Transaction resulting from the election of consecutive Potential Repurchase Days.

Counterparty acknowledges and agrees that:

(a) Each Transaction is a derivatives transaction; MLI may purchase Shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of such Transaction; Counterparty also acknowledges that its purchase of Shares hereunder will not qualify as a Rule 10b-18 purchase, as defined in Rule 10b-18 under the Exchange Act, and that, in connection with each Transaction, in addition to purchases of Delivered Shares (as defined

below), MLI will be engaging in customary hedging activities in its sole discretion for its own account and that such activities may involve purchases that, as to time, price and amount, may not necessarily satisfy the conditions specified in Rule 10b-18; and

(b) Notwithstanding the generality of Section 13.1 of the Equity Definitions, MLI is not making any representations or warranties with respect to the treatment of any Transaction under FASB Statements 133 as amended or 150, EITF 00-19 (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

MLI covenants and agrees that:

(a) Notwithstanding anything in the foregoing to the contrary, any Shares delivered to the Counterparty or acquired to close out a stock borrow position related to the Repurchase Shares shall be purchased by MLI in a manner that would comply with the limitations set forth in clauses (b)(2), (b)(3), (b)(4) and (c) of Rule 10b-18 as if such purchases were made by the Counterparty (“Delivered Shares”); and

(b) If a Potential Repurchase Day is elected by the Counterparty, MLI will notify the Counterparty by 5 p.m. New York City time on the date of election of such Potential Repurchase Day whether MLI has made a block purchase within the meaning of Rule 10b-18(b)(4) in connection with the relevant Transaction for the week containing the designated Potential Repurchase Day.

Account Details:

Account for payments to Counterparty:

Bank of America

ABA#

A/C:

Account Name: Franklin Resources, Inc

Account for payment to MLI:

JP Morgan Chase Bank, New York

ABA#

FAO: MLI Equity Derivatives

A/C:

Bankruptcy Rights:

In the event of Counterparty’s bankruptcy, MLI’s rights in connection with any Transaction shall not exceed those rights held by common shareholders. For the avoidance of doubt, the parties acknowledge and agree that MLI’s rights with respect to any other claim arising from any Transaction prior to Counterparty’s bankruptcy shall remain in full force and effect and shall not be otherwise abridged or modified in connection herewith.

Set-Off:

The Set-off provisions in the Agreement shall apply to each Transaction, except in the event of Counterparty’s or MLI’s bankruptcy, in which case each of the parties waives any and all rights it may have to set-off, whether arising under any agreement, applicable law or otherwise.

Collateral:

None.

Transfer:

Counterparty may transfer any of its rights or delegate its obligations under any Transaction with the prior written consent of MLI. MLI may assign and delegate its rights and obligations under any Transaction (the “Transferred Obligations”) to any subsidiary of ML & Co. (the “Assignee”) by notice specifying the effective date of such transfer (“Effective Date”) and including an executed acceptance and assumption by the Assignee of the Transferred Obligations; provided that (i) the obligations of the Assignee shall be guaranteed by a guarantee of Merrill Lynch & Co. in the form attached as Exhibit B; (ii) Counterparty will not, as a result of such transfer, be required to pay to the Assignee an amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) of the Agreement (except in respect of interest under Section 2(e), 6(d)(ii), or 6(e)) greater than the amount in respect of which Counterparty would have been required to pay to MLI in the absence of such transfer; (iii) Such assignment or delegation will not result in any adverse regulatory consequences to Counterparty; and (iv) the Assignee will not, as a result of such

transfer, be required to withhold or deduct on account of a Tax under Section 2(d)(i) of the Agreement (except in respect of interest under Section 2(e), 6(d)(ii), or 6(e)) an amount in excess of that which MLI would have been required to withhold or deduct in the absence of such transfer, unless the Assignee would be required to make additional payments pursuant to Section 2(d)(i)(4) of the Agreement corresponding to such excess. On the Effective Date, (a) MLI shall be released from all obligations and liabilities arising under the Transferred Obligations; and (b) if MLI has not assigned and delegated its rights and obligations under the Agreement and all Transactions thereunder, the Transferred Obligations shall cease to be a Transaction under the Agreement and shall be deemed to be a Transaction under the master agreement, if any, between Assignee and Counterparty, provided that, if at such time Assignee and Counterparty have not entered into a master agreement, Assignee and Counterparty shall be deemed to have entered into an ISDA form of Master Agreement (Multicurrency-Cross Border) and Schedule substantially in the form of the Agreement but amended to reflect the name of the Assignee and the address for notices and any amended representations under Part 2 of the Agreement as may be specified in the notice of transfer.

Regulation:

MLI is regulated by The Securities and Futures Authority Limited and has entered into each Transaction as principal.

Indemnity:

Each party hereto (an “Indemnifying Party”) agrees to indemnify the other party, its Affiliates and their respective directors, officers, agents and controlling parties (each such person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities, joint and several, to which such Indemnified Party may become subject because of the untruth of any representation by the Indemnifying Party or a breach by the Indemnifying Party of any agreement or covenant under this Confirmation, in the Agreement, the Plan or any other agreement relating to the Agreement or any Transaction and will reimburse any Indemnified Party for all reasonable expenses (including reasonable legal fees and expenses) as they are incurred in connection with the investigation of, preparation for, or defense of, any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto.

Indemnifying Party will not be liable under this provision to the extent that any loss, claim, damage, liability or expense results from Indemnified Party’s gross negligence and/or willful misconduct.

(i) in relation to MLI, for the purposes of:

(ii)

not applicable

not applicable

not applicable

not applicable

not applicable

not applicable

not applicable

not applicable

(I)

For the purpose of Section 3(e) of the Agreement, each party represents to the other party that it is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii), or 6(e) of the Agreement) to be made by it to the other party under the Agreement. In making this representation, each party may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of the Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of the Agreement, and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the Agreement, and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of the Agreement; provided that it will not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or document under Section 4(a)(iii) of the Agreement by reason of material prejudice to its legal or commercial position.

(II)

For the purpose of Section 3(f) of the Agreement, each party makes the following representations to the other party:

(i)

MLI represents that it is a company organized under the laws of England and Wales.

(ii)

Counterparty represents that it is a corporation incorporated under the laws of the State of Delaware.

Party Required to Deliver Document

Document Required to be
Delivered

When Required

Covered by Section 3(d) Representation

Counterparty

Copy of the resolution of the Board of Directors or equivalent document authorizing the Repurchase Program

Upon or before execution and delivery of this Confirmation

Yes

Each party

Executed Supplemental Confirmation, substantially in the form of Exhibit A hereto, in respect of each Transaction

On or before the corresponding Trade Date

Yes

MLI

Guarantee of its Credit Support Provider, substantially in the form of Exhibit C attached hereto, together with evidence of the authority and true signatures of the signatories, if applicable

Upon or before execution and delivery of this Confirmation

Yes

Address:

Merrill Lynch International

Merrill Lynch Financial Centre

2 King Edward Street, London EC1A 1HQ

Attention: Manager, Fixed Income Settlements

Facsimile No.:

Telephone No.: +44 ###-###-####

Attention:

Kenneth A. Lewis, Senior Vice President - Chief Financial Officer and Treasurer

Facsimile No.:              Telephone No.: (650) 312-2230

Shelly Painter

Facsimile No.:              Telephone No.: (650 ###-###-####

Barry Forbes

Facsimile No.:              Telephone No.: (954) 527-7346

Craig S. Tyle, Executive Vice President and General Counsel

Facsimile No.:              Telephone No.: (650) 312-4161

Barbara J. Green, Vice President, Deputy General Counsel and Secretary

Facsimile No.:              Telephone No.: (650) 525-7188

Very truly yours,

MERRILL LYNCH INTERNATIONAL

By:

/s/ W. Morley

Name:

William Morley

Title:

Authorised Signatory

Confirmed as of the date first above written:

FRANKLIN RESOURCES, INC.

By:

/s/ Kenneth Lewis

Name:

Kenneth Lewis

Title:

S.V.P. / C.F.O.

Acknowledged and agreed as to matters relating to the Agent:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

solely in its capacity as Agent hereunder

By:

/s/ Angelina Lopes

Name:

Angelina Lopes

Title:

Date:

March 13, 2007

ML Ref: •

To:

Franklin Resources, Inc. (“Counterparty”)

Attention:

Shelly Painter

From:

Merrill Lynch International (“MLI”)

Merrill Lynch Financial Centre

2 King Edward Street

London EC1A 1HQ

Trade Date:

March 13, 2007

Initial Share Price:

USD $116.14

Valuation Date:

*******, 2007

First Acceleration Date:

*******, 2007

Number of Shares:

4,000,000

Aggregate Adjustment Amount:

*******

Ordinary Dividend Amount:

USD $*******

Scheduled Dividend Dates:

*********************

Settlement Price Adjustment Amount:

******* basis points multiplied by *******

Valuation Period:

Notwithstanding the definition of Valuation Period in the Master Confirmation dated March 13, 2007, the following definition shall apply to this Transaction: “For each Transaction, each Scheduled Trading Day from and including the third Business Day after the Trade Date to and including the Valuation Date; provided, that with respect to each Suspension Event (if any) affecting such Scheduled Trading Days, MLI may, by

written notice to Counterparty (which notice shall not specify the reason for MLI’s election to suspend the Valuation Period), exclude the Scheduled Trading Day(s) on which such Suspension Event has occurred (such days, “Suspension Event Days”) and extend the last possible Valuation Date by the total number of such Suspension Event Days; provided, further, that notwithstanding anything to the contrary in the Equity Definitions, to the extent that any Scheduled Trading Days in the Valuation Period are Disrupted Days, the Calculation Agent may exclude such Disrupted Days and extend the last possible Valuation Date by the number of such Disrupted Days (in addition to any Suspension Event Days, without duplication).

Very truly yours,

MERRILL LYNCH INTERNATIONAL

By:

/s/ W. Morley

Name:

William Morley

Title:

Authorised Signatory

Confirmed as of the date first above written:

FRANKLIN RESOURCES, INC.

By:

/s/ Kenneth Lewis

Name:

Kenneth Lewis

Title:

S.V.P. / C.F.O.

Acknowledged and agreed as to matters relating to the Agent:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

solely in its capacity as Agent hereunder

By:

/s/ Angelina Lopes

Name:

Angelina Lopes

Title: