AMENDMENT TO
                         INVESTMENT MANAGEMENT AGREEMENT

     This  Amendment  dated as of May 1, 2004, is to the  Investment  Management
Agreement made as of the 15th day of June,  1995, and amended and restated as of
the 23rd day of November,  1995 (the "Agreement") by and between Templeton Asset
Management  Ltd.,  a  U.S.  registered  investment  adviser  and  a  corporation
organized under the laws of Singapore (the "Manager"),  and Templeton Russia and
East European Fund, Inc. (the "Fund").

                                 WITNESSETH:

     WHEREAS, both the  Manager and the Fund wish to amend Paragraph 4 of the
Agreement; and

     WHEREAS, the Board of Directors  of the Fund,  including a majority of the
Independent Directors  of the Fund present in person,  approved  the  following
Amendment at a meeting called for such purpose on April 20, 2004.

     NOW,  THEREFORE,  in consideration of the foregoing  premises,  the parties
hereto agree as follows:

     The Fund  agrees to pay to the  Manager a monthly fee in dollars,  at the
annual rate of the Fund's average weekly net assets, as listed below, payable at
the end of each calendar month:

     1.25%,  up to and including $1 billion
     1.20% over $1 billion, up to and including $5 billion
     1.15% over $5 billion,  up to and including $10 billion
     1.10% over $10 billion, up to and including  $15 billion
     1.05% over $15  billion,  up to and  including  $20 billion
     1.00% over $20 billion

     IN WITNESS  WHEREOF,  this  Amendment  has been  executed on behalf of each
party as of the date set forth above.


                        TEMPLETON ASSET MANAGEMENT LTD.

                          By:\s\GREGORY E. MCGOWAN
                             -------------------------------------------------
                             Gregory E. McGowan
                             Director


                         TEMPLETON RUSSIA AND EAST EUROPEAN FUND, INC.

                          By:\S\MURRAY L. SIMPSON
                             -------------------------------------------------
                             Murray L. Simpson
                             Vice President and Assistant Secretary