FUND ADMINISTRATION AGREEMENT BETWEEN
TEMPLETON VARIABLE PRODUCTS SERIES FUND
AND
FRANKLIN XXXXXXXXX SERVICES, INC.
AGREEMENT dated as of _______________ 1998, between Templeton
Variable Products Series Fund (the "Investment Company"), an investment
company registered under the Investment Company Act of 1940 ("1940 Act"), on
behalf of each of its series listed on SCHEDULE A (each, a "Fund"), and
Franklin Xxxxxxxxx Services, Inc. ("Administrator").
In consideration of the mutual promises herein made, the parties
hereby agree as follows:
(1) The Administrator agrees, during the life of this Agreement, to
provide the following services to each Fund:
(a) providing office space, telephone, office equipment and
supplies for the Fund;
(b) providing trading desk facilities for the Fund, unless these
facilities are provided by the Fund's investment adviser;
(c) authorizing expenditures and approving bills for payment on
behalf of the Fund;
(d) supervising preparation of periodic reports to
shareholders, notices of dividends, capital gains distributions and tax
credits; and attending to routine correspondence and other communications
with individual shareholders when asked to do so by the Fund's shareholder
servicing agent or other agents of the Fund;
(e) coordinating the daily pricing of the Fund's investment
portfolio, including collecting quotations from pricing services engaged by
the Fund; providing fund accounting services, including preparing and
supervising publication of daily net asset value quotations, periodic
earnings reports and other financial data; and coordinating trade settlements;
(f) monitoring relationships with organizations serving the
Fund, including custodians, transfer agents, public accounting firms, law
firms, printers and other third party service providers;
(g) supervising compliance by the Fund with recordkeeping
requirements under the federal securities laws, including the 1940 Act and
the rules and regulations thereunder, and under other applicable state and
federal laws; and maintaining books and records for the Fund (other than
those maintained by the custodian and transfer agent);
(h) preparing and filing of tax reports including the Fund's
income tax returns, annuity tax diversification testing and monitoring the
Fund's compliance with subchapter M of the Internal Revenue Code, as amended,
and other applicable tax laws and regulations;
(i) monitoring the Fund's compliance with: 1940 Act and other
federal securities laws, and rules and regulations thereunder; state and
foreign laws and regulations applicable to the operation of investment
companies; state insurance licensing of certain employees, and occasional
support of state insurance filings; the Fund's investment objectives,
policies and restrictions; and the Code of Ethics and other policies adopted
by the Investment Company's Board of Trustees or Directors ("Board") or by
the Fund's investment adviser and applicable to the Fund;
(j) preparing and filing regulatory reports, including without
limitation Forms N-1A and NSAR, proxy statements, information statements and
U.S. and foreign ownership reports;
(k) review insurance company marketing literature and
prospectuses pertaining to information about Investment Company or any Fund;
and
(l) providing executive, clerical and secretarial personnel
needed to carry out the duties described in this Agreement;
(m) negotiation and documentation of Fund Participation
Agreements among the Investment Company, its principal underwriter, and
insurance companies which invest in one or more Funds;
(n) customization of Investment Company prospectuses and
shareholder reports as requested by insurance company shareholders; and
(o) providing support services incidental to carrying out the
duties described in this Agreement.
Nothing in this Agreement shall obligate the Investment Company or any Fund
to pay any compensation to the officers of the Investment Company. Nothing
in this Agreement shall obligate the Administrator to pay for the services of
third parties, including attorneys, auditors, printers, pricing services or
others, engaged directly by the Fund to perform services on behalf of the
Fund.
(2) The Investment Company agrees, during the life of this Agreement,
to pay to the Administrator as compensation for the foregoing a monthly fee
equal on an annual basis to 0.15% of the first $200 million of the average
daily net assets of the Investment Company during the month preceding each
payment, reduced as follows: on such net assets in excess of $200 million up
to $700 million, a monthly fee equal on an annual basis to 0.135%; on such
net assets in excess of $700 million up to $1.2 billion, a monthly fee equal
on an annual basis to 0.10%; and on such net assets in excess of $1.2
billion, a monthly fee equal on an annual basis to 0.075%.
From time to time, the Administrator may waive all or a portion of its fees
provided for hereunder and such waiver shall be treated as a reduction in the
purchase price of its services. The Administrator shall be contractually
bound hereunder by the terms of any publicly announced waiver of its fee, or
any limitation of each affected Fund's expenses, as if such waiver or
limitation were fully set forth herein.
(3) This Agreement shall remain in full force and effect through for
one year after its execution and thereafter from year to year to the extent
continuance is approved annually by the Board of the Investment Company.
(4) This Agreement may be terminated by the Investment Company at any
time on sixty (60) days' written notice without payment of penalty, provided
that such termination by the Investment Company shall be directed or approved
by the vote of a majority of the Board of the Investment Company in office at
the time or by the vote of a majority of the outstanding voting securities of
the Investment Company (as defined by the 1940 Act); and shall automatically
and immediately terminate in the event of its assignment (as defined by the
1940 Act).
(5) In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Administrator, or of reckless disregard of its
duties and obligations hereunder, the Administrator shall not be subject to
liability for any act or omission in the course of, or connected with,
rendering services hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their duly authorized officers.
TEMPLETON VARIABLE PRODUCTS FRANKLIN XXXXXXXXX SERVICES, INC.
SERIES FUND
By: By:
Title: Title:
SCHEDULE A
Templeton Stock Fund
Templeton Asset Allocation Fund
Xxxxxxxxx International Fund
Templeton Bond Fund
Templeton Developing Markets Fund
Franklin Growth Investments Fund
Franklin Small Cap Investments Fund
Mutual Discovery Investments Fund
Mutual Shares Investments Fund
