ASSIGNMENT AND ASSUMPTION AGREEMENT
                       OF INVESTMENT MANAGEMENT AGREEMENT

     This Assignment and Assumption Agreement is made as of July 25, 2001 by and
between Templeton Investment Counsel, LLC ("TICL"), a Delaware limited liability
company, and Franklin Advisers, Inc. ("FAI"), a California corporation.

     WHEREAS, FAI is a registered  investment adviser pursuant to the Investment
Advisers Act of 1940, as amended;

     WHEREAS,  Templeton  Global  Bond  Managers  ("TGBM"),  a division of TICL,
provided the  management  services on behalf of TICL to Templeton  Institutional
Funds,  Inc. (the  "Company") on behalf of its series of shares called  Emerging
Fixed Income Markets  Series  pursuant to the  Investment  Management  Agreement
dated as of February 21, 1997 and amended January 1, 2001,  between TICL and the
Company (the "Agreement");

     WHEREAS, TGBM consolidated with and into FAI and, therefore, FAI intends to
assume TICL's obligations under the Agreement; and

     WHEREAS,  the  consolidation of TGBM with and into FAI does not result in a
change of control or management, and thus does not constitute an "assignment" of
the Agreement under the Investment Company Act of 1940, as amended.

     NOW, THEREFORE, the parties hereto agree as follows:

     1. The  Agreement  previously  in effect  between  the  Company and TICL is
hereby assumed in its entirety by FAI,  except that all references to TICL shall
be replaced with references to FAI.

     2. FAI agrees to perform and be bound by all of the terms of the  Agreement
and the obligations and duties of TICL thereunder.

     3. The  Agreement  shall  continue  in full  force and  effect as set forth
therein for the remainder of its term.

     IN WITNESS  WHEREOF,  the  undersigned  have executed this  Assignment  and
Assumption Agreement as of the date set forth above.



TEMPLETON INVESTMENT COUNSEL, LLC                  FRANKLIN ADVISERS, INC.

By:/s/ROBERT C. ROSSELOT                           By:/s/MARTIN L. FLANAGAN
   ------------------------------------               -------------------------
  Robert C. Rosselot                                  Martin L. Flanagan
  Vice President and Assistant Secretary              Executive Vice President



ACKNOWLEDGED:


TEMPLETON INSTITUTIONAL FUNDS, INC.

By:/s/BARBARA J. GREEN
   -------------------------------
   Barbara J. Green
   Vice President and Secretary