Exhibit 10.18
 
Form of Administrative Services Agreement
Franklin Templeton Services, LLC
[Name of Insurance Company]

THIS AGREEMENT, by and between Franklin Templeton Services, LLC (the “Fund
Administrator”), and [Name of Insurance Company] (the “Company”), concerning
certain administrative services with respect to each series (“Fund” or “Funds”)
of Franklin Templeton Variable Insurance Products Trust (the “Trust”), which
Funds are specified in the Participation Agreement, as may be amended from time
to time, among the Company, the Trust, and Franklin Templeton Distributors, Inc.
(the “Underwriter”), among others, dated [____________] (the “Participation
Agreement”).

1.    Administrative Services. Administrative services for the Company’s
Separate Accounts (the “Account” or “Accounts”) which invest in the Funds
pursuant to the Participation Agreement, and administrative services for
purchasers of variable life and annuity contracts (the “Contracts”) issued by
the Company through the Accounts, are and shall be the responsibility of the
Company. Administrative services with respect to the Funds in which the Accounts
invest, and for purchasers of shares of the Funds, are and shall be the
responsibility of the Fund Administrator or its affiliates. The Company has
agreed to assist the Fund Administrator, as the Fund Administrator may request
from time to time, with the provision of administrative services
(“Administrative Services”) to the Funds, on a sub-administration basis, as they
may relate to the investment in the Funds by the Accounts. It is anticipated
that the Administrative Services may include, but may not be limited to, the
services listed on Schedule A.

2.    Administrative Expense Payments. The Fund Administrator recognizes the
Company, on behalf of the Accounts, as the shareholder of shares of the Funds
purchased under the Participation Agreement on behalf of the Accounts. The Fund
Administrator further recognizes that it will derive a substantial
administrative convenience by virtue of having the Company be the shareholder of
record of shares of the Funds purchased under the Participation Agreement,
rather than multiple shareholders having record ownership of such shares. The
Fund Administrator recognizes that the Company will provide administrative
services necessary to facilitate investment in the Funds.

In consideration of the Administrative Services provided by the Company and the
administrative convenience resulting to the Fund Administrator described above,
the Fund Administrator agrees to pay the Company a fee as set forth in Schedule
B.

3.    Computation of Administrative Expense Payments. As soon as practicable
after the end of each quarter, the Company will send the Fund Administrator, at
the address indicated in this Paragraph 3 and in the manner set forth below, a
statement of the average daily net assets for the preceding quarter, of shares
of the Fund as to which the fee stated in Schedule B is to be calculated. The
Fund Administrator will calculate and pay the Company its fee within thirty (30)
days after the end of the three-month periods ending in January, April, July and
October. Such payment will be by wire transfer unless the amount thereof is less
than $500. Wire transfers will be sent to the bank account and in the manner
specified by the Company. Such wire transfer will be separate from wire
transfers of redemption proceeds and distributions. Amounts less than $500 shall
be paid by check or by another method acceptable to both parties.

For purposes of this Paragraph 3, the average daily net asset value of the
shares of a Fund will be based on the net assets reported by the Trust on behalf
of each Fund to the Company. No adjustments will be made to such net assets to
correct errors in the net asset value so reported for any day unless such error
is corrected and the corrected net asset value per share is reported to the
Company before 5:00 p.m. Eastern time on the first Business Day after the day to
which the error relates. “Business Day” will mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.

For purposes of this Paragraph 3, the address shall be Corporate Accounting,
Franklin Resources, One Franklin Parkway, San Mateo, California 94403;
Attention: [________________].

4.    Confidentiality of Payment Rate. The Company acknowledges that the rate
and amount of payments to be made to the Company under this Agreement are
proprietary and confidential information of the Fund Administrator and its
affiliates, and that disclosure of this information to third parties may cause
damage to Fund Administrator or its affiliates. The Company agrees to take any
and all reasonable actions to limit disclosure of this information to only those
of its employees, officers, consultants and agents who need the information in
order to perform their duties, and to notify such persons of the terms of this
paragraph. In the event any other party seeks to compel disclosure of
confidential information through judicial or

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administrative process, then the Company shall promptly give the Fund
Administrator written notice of such demand and, if requested by the Fund
Administrator, shall cooperate in the Fund Administrator’s efforts to challenge
or limit any such disclosure. Violation of the confidentiality provision shall
be grounds for immediate termination of the Agreement by the Fund Administrator
in its sole discretion. Nothing in this Agreement shall prevent the Company from
disclosing the existence of this Agreement in the Contracts’ prospectuses or
elsewhere.

5.    Nature of Payments. The parties to this Agreement recognize and agree that
the Fund Administrator’s payments to the Company relate to Administrative
Services only and do not constitute payment in any manner for investment
advisory services, for costs of distribution of Contracts or of shares of the
Fund, or for services that the Company is otherwise required to perform, and
that these payments are not otherwise related to investment advisory or
distribution services or expenses. The amount of the payments made by the Fund
Administrator to the Company under this Agreement shall not be deemed to be
conclusive with respect to actual administrative expenses incurred by the
Company or savings of the Fund Administrator.
6.    Notice. Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth in
Schedule C of this Agreement or at such other address as such party may from
time to time specify in writing to the other party. The quarterly statements
called for in Paragraph 3 above should be sent to the Fund Administrator at the
address specified in Paragraph 3.

7.    Termination. This Agreement may be terminated upon thirty (30) days’
written notice from one party to the other party.

8.    Representation. The Company represents and agrees that it will maintain
and preserve all records as required by law to be maintained and preserved in
connection with providing the Administrative Services, and will otherwise comply
with all laws, rules and regulations applicable to Administrative Services.

9.    Amendment. This Agreement may be amended only upon mutual agreement of the
parties hereto in writing.

10.    Assignment. This Agreement shall not be assigned by either party without
the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that such limitation shall
not apply should the Fund Administrator cease to be the fund administrator for
the Trust and the successor fund administrator for the Trust is willing to
assume Fund Administrator’s responsibilities hereunder.

11.    Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original but all of which will together constitute one
and the same instrument.

12.    Entire Agreement. This Agreement, together with the attached Schedules,
contains the entire agreement among the parties with respect to the matters
dealt with herein, and supersedes any prior or inconsistent agreements,
documents, understandings or arrangements among the parties with respect to the
subject matter of this Agreement.

13.    Indemnification. This Agreement will be subject to the indemnification
provisions of the Participation Agreement.

14.    Arbitration. In the event of a dispute concerning any provision of this
Agreement, either party may require the dispute to be submitted to binding
arbitration under the commercial arbitration rules of the American Arbitration
Association. Each party will pay its own costs and expenses. Judgment upon any
arbitration award may be entered by any court having jurisdiction. This
Agreement shall be interpreted in accordance with the laws of the state of
California and shall be subject to any applicable federal securities laws.
15.    Trust Not a Party. The parties to this Agreement acknowledge and agree
that the Trust is not directly or indirectly a party to this Agreement. If,
however, the Trust shall be so deemed, the parties to this Agreement acknowledge
and agree that any liabilities of the Trust arising, directly or indirectly,
under this Agreement will be satisfied out of the assets of the Trust and that
no trustee, officer, agent or holder of shares of beneficial interest of the
Trust or any Fund will be personally liable for such liabilities. No Fund of the
Trust will be liable for the obligations or liabilities of any other Fund.

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This Agreement is executed as of this ____ day of _______ 20___.

[Insurance Company]

By:___________________________________
Name:
Title:

Franklin Templeton Services, LLC

By:___________________________________
Name:
Title:

    

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Exhibit 10.18
Schedule A

Administrative Services

Maintenance of Books and Records

•
Assist as necessary to maintain book entry records on behalf of the Funds
regarding issuance to, transfer within (via net purchase orders) and redemption
by the Accounts of Fund shares.

•
Maintain general ledgers regarding the Accounts’ holdings of Fund shares,
coordinate and reconcile information, and coordinate maintenance of ledgers by
financial institutions and other contract owner service providers.

Communication with the Funds

•
Serve as the designee of the Funds for receipt of purchase and redemption orders
from the Account and to transmit such orders, and payment therefore, to the
Funds.

•
Coordinate with the Funds’ agents respecting daily valuation of the Funds’
shares and the Accounts’ units.

•
Purchase Orders

◦
Determine net amount available for investment in the Funds.

◦
Deposit receipts at the Funds’ custodians (generally by wire transfer).

◦
Notify the custodians of the estimated amount required to pay dividends or
distributions.

•
Redemption Orders

◦
Determine net amount required for redemptions by the Funds.

◦
Notify the custodian and Funds of cash required to meet payments.

•
Purchase and redeem shares of the Funds on behalf of the Accounts at the
then-current price in accordance with the terms of each Fund’s then current
prospectus.

•
Assistance in enforcing procedures adopted on behalf of the Trust to reduce,
discourage, or eliminate market timing transactions in a Fund’s shares in order
to reduce or eliminate adverse effects on a Fund or its shareholders.

Processing Distributions from the Funds

•
Process ordinary dividends and capital gains.

•
Reinvest the Funds’ distributions.

Reports

•
Periodic information reporting to the Funds, including, but not limited to,
furnishing registration statements, prospectuses or private offering memorandum,
statements of additional information, reports, solicitations for instructions,
disclosure statements, sales or promotional materials and any other filings with
the Securities and Exchange Commission with respect to the Accounts invested in
the Funds, if necessary.

•
Periodic information reporting about the Funds to contract owners, including
necessary delivery of the Funds’ prospectus and annual and semi-annual reports.

Fund-related Contract Owner Services

•
Maintain adequate fidelity bond or similar coverage for all Company officers,
employees, investment advisors and other individuals or entities controlled by
the Company who deal with the money and/or securities of the Funds.

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•
Provide general information with respect to Fund inquiries (not including
information about performance or related to sales).

•
Provide information regarding performance of the Funds.

•
Oversee and assist the solicitation, counting and voting of contract owner
pass-through voting interests in the Funds pursuant to Fund proxy statements.

Other Administrative Support

•
Provide other administrative and legal compliance support for the Funds as
mutually agreed upon by the Company and the Funds or the Fund Administrator.

•
Relieve the Funds of other usual or incidental administrative services provided
to individual contract owners.

    

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Exhibit 10.18
Schedule B

Administrative Expense Payments

The Fund Administrator agrees to pay the Company a fee, computed daily and paid
quarterly in arrears, equal to an annual rate as set forth below, applied to the
average daily net assets of the shares of the Funds held in the subaccounts of
the Accounts. The payment will be computed and paid in the manner described more
completely in the Agreement.

#
Company Name
Product Name/
Securities Act No.
Funds of the Trust
Fee
Rate
Date of beginning of period for computation of fee
1.
 
 
 
 
 
2.
 
 
 
 
 
3.
 
 
 
 
 

    

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Exhibit 10.18
Schedule C

Addresses for Notices

If to the Company:
[Insurance Company]
 
[address]
 
Attention: [name, title]
 
 
If to the Fund Administrator:
Franklin Templeton Services, LLC
 
One Franklin Parkway, Bldg. 920, 2nd Floor
 
San Mateo, California 94403
 
Attention: [_____________]
 
 
With a copy to:
Franklin Templeton Investments
 
One Franklin Parkway, Bldg. 920, 2nd Floor
 
San Mateo, California 94403
 
Attention: General Counsel

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