EX-99.B.8.21
FORM OF ADMINISTRATIVE SERVICES AGREEMENT
FRANKLIN XXXXXXXXX SERVICES, LLC
[AETNA]
EX. 99.B.8.21
ADMINISTRATIVE SERVICES AGREEMENT
Franklin Xxxxxxxxx Services, LLC
[Aetna]
THIS AGREEMENT made as of July 1, 2001, by and between Franklin Xxxxxxxxx
Services, LLC (the "Fund Administrator"), and [Aetna] Insurance Company[, and
[?] Insurance Company (each of which is referred to as] (the "Company"),
concerning certain administrative services with respect to each series ("Fund"
or "Funds") of Franklin Xxxxxxxxx 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 Xxxxxxxxx
Distributors, Inc. (the "Underwriter"), among others, dated July 1, 2001 (the
"Participation Agreement").
1. Administrative Services. Administrative services for the Company's Separate
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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 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
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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
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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, 000 Xxxxxxxx Xxxxxx Xxxxxxxxx., Xxx Xxxxx, Xxxxxxxxxx
00000; Attention: Xxxx Xxxxxxxx, Manager.
4. Confidentiality of Payment Rate. The Company acknowledges that the rate and
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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 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
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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 or for costs of distribution of Contracts or of shares of the
Fund, 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. Term. This Agreement will remain in full force and effect from the date of
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this Agreement, for so long as any assets of the Funds are attributable to
amounts invested by the
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Account under the Participation Agreement, unless terminated in accordance with
Paragraph 8 of this Agreement. In accordance with the Participation Agreement,
the fee under this Agreement will continue to be due and payable with respect to
the shares attributable to Contracts existing and in effect on the date this
Agreement is terminated pursuant to Paragraph 8, below.
7. Notice. Any notice shall be sufficiently given when sent by registered or
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certified mail to the other party at the address of such party set
forth below 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.
If to the Company: [Aetna] Life Insurance Company
[address]
[address]
Attention: [name, title]
With a copy to: [ ] Life Insurance Company
[address]
[address]
Attention: [name, title]
If to the Fund Administrator: Franklin Xxxxxxxxx Services, LLC
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
With a copy to: Franklin Xxxxxxxxx Investments
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
General Counsel
8. Termination. This Agreement may be terminated upon either: (1) thirty (30)
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days' written notice from one party to the other; or (2) upon cessation of
investment by the Account in the Fund pursuant to the Participation Agreement.
9. Representation. The Company represents and agrees that it will maintain
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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.
10. Amendment. This Agreement may be amended only upon mutual agreement of the
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parties hereto in writing.
11. Assignment. This Agreement shall not be assigned by either party without the
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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
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be the fund administrator for the Trust and the successor fund administrator
for the Trust is willing to assume Fund Administrator's responsibilities
hereunder.
12. Counterparts. This Agreement may be executed in counterparts, each of
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which will be deemed an original but all of which will together constitute one
and the same instrument.
13. Entire Agreement. This Agreement, together with the attached Schedules,
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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.
14. Indemnification. This Agreement will be subject to the indemnification
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provisions of the Participation Agreement.
15. Arbitration. In the event of a dispute concerning any provision of this
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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.
16. Form of Agreement. This Agreement shall create a separate agreement for each
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Company as though each Company had separately executed an identical
Administrative Services Agreement with the Fund Administrator. No rights,
responsibilities or liabilities arising under the Agreement as it pertains to
one Company shall be enforceable by or against any party to the Agreement as it
pertains to another Company.
17. Trust Not a Party. The parties to this Agreement acknowledge and agree that
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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.
[Aetna] Insurance Company
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By:________________________________
Name:
Title:
Franklin Xxxxxxxxx Services, LLC
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By:________________________________
Name:
Title:
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SCHEDULE A
MAINTENANCE OF BOOKS AND RECORDS
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o 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.
o 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
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o Serve as the designee of the Funds for receipt of purchase and redemption
orders from the Account and to transmit such orders, and payment therefor,
to the Funds.
o Coordinate with the Funds' agents respecting daily valuation of the Funds'
shares and the Accounts' units.
o 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.
o Redemption Orders
- Determine net amount required for redemptions by the Funds.
- Notify the custodian and Funds of cash required to meet payments.
o 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.
o 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
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o Process ordinary dividends and capital gains.
o Reinvest the Funds' distributions.
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REPORTS
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o Periodic information reporting to the Funds, including, but not limited to,
furnishing registration statements, prospectuses, statements of additional
information, reports, solicitations for instructions, sales or promotional
materials and any other filings with the Securities and Exchange Commission
with respect to the Accounts invested in the Funds.
o 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
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o 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.
o Provide general information with respect to Fund inquiries (not including
information about performance or related to sales).
o Provide information regarding performance of the Funds and the subaccounts
of the Accounts.
o Oversee and assist the solicitation, counting and voting or contract owner
voting interests in the Funds pursuant to Fund proxy statements.
OTHER ADMINISTRATIVE SUPPORT
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o Provide other administrative and legal compliance support for the Funds as
mutually agreed upon by the Company and the Funds or the Fund Administrator.
o Relieve the Funds of other usual or incidental administrative services
provided to individual contract owners.
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SCHEDULE B
ADMINISTRATIVE EXPENSE PAYMENTS
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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.
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COMPANY PRODUCT FUNDS OF THE TRUST FEE EFFECTIVE
DATE
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