SUB-ADMINISTRATION AGREEMENT
AGREEMENT made this 16th day of October, 1998, BISYS Fund Services Ohio,
Inc. (the "Administrator"), an Ohio corporation having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and Key Asset Management
Inc. (the "Sub-Administrator"), a New York corporation having its principal
place of business at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000.
WHEREAS, the Administrator has entered into an Administration Agreement,
dated October 16, 1998 (the "Administration Agreement"), with The Victory
Variable Insurance Funds (the "Trust"), a Delaware business trust, concerning
the provision of certain administrative services for the investment portfolios
of the Trust identified on Schedule A hereto, as such Schedule shall be amended
from time to time (individually referred to herein as a "Fund" and collectively
as the "Funds"); and
WHEREAS, the Administrator desires to retain the Sub-Administrator to
assist it in performing administrative services with respect to each Fund and
the Sub-Administrator is willing to perform such services on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Sub-Administrator. As provided herein, the
Sub-Administrator will perform the following duties:
(a) assist the Trust in the supervision of all aspects of the
operations of the Funds except those performed by the
investment adviser for the Funds under its Investment Advisory
Agreement;
(b) maintain office facilities (which may be in the office of
Sub-Administrator or an affiliate);
(c) furnish statistical and research data, clerical and internal
compliance services relating to legal matters, except for
those services provided pursuant to the terms of the Fund
Accounting Agreement;
(d) assist the Administrator in the preparation of the periodic
reports to the Securities and Exchange Commission on Form
N-SAR or any replacement forms thereto;
(e) assist the Administrator in compiling data for (after review
by the Trust's auditors) the Funds' federal and state tax
returns and required tax filings other than those required to
be made by the Trust's Custodian and Transfer Agent;
(f) assist the Administrator in preparing and filing compliance
filings pursuant to state securities laws with the advice of
the Trust's counsel and coordinate with the transfer agent to
monitor the sale of the Funds' shares;
(g) assist the Trust in the preparation, mailing and filing of the
Trust's Annual and Semi-Annual Reports to Shareholders and its
Registration Statements;
(h) assist the Administrator in preparing and filing timely
Notices to the Securities and Exchange Commission required
pursuant to Rule 24f-2 under the Investment Company Act of
1940 (the "1940 Act")
(i) assist the Administrator in preparing and filing with the
Securities and Exchange Commission all Registration Statements
on Form N-1A and all amendments thereto with the advice of
Trust's counsel;
(j) assist the Administrator in preparing and filing with the
Securities and Exchange Commission Proxy Statements and
related documents with the advice of Trust's counsel and
coordinate the distribution of such documents; and
(k) provide Trustee Board meeting support, including assisting in
the preparation of documents related thereto.
The Sub-Administrator will keep and maintain all books and records
relating to its services in accordance with Rule 31a-1 under the 1940 Act.
2. Compensation; Expenses Assumed as Sub-Administrator. The Administrator
will pay the Sub-Administrator for the services provided under this Agreement a
fee with respect to each Fund calculated at the annual rate of up to five
one-hundredths of one percent (.05%) of such Fund's average daily net assets.
Except for the expenses that shall be borne by the Trust, as set forth in
Article II, Section 4 of the Administration Agreement, the Sub-Administrator
shall pay all expenses incurred by it in performing its services and duties as
Sub-Administrator, including the cost of providing office facilities, equipment
and personnel related to such services and duties. The fee payable hereunder
shall be calculated and paid on a monthly basis. The fee for the period from the
day of the month this Agreement is entered into until the end of that month
shall be prorated according to the proportion which such period bears the full
monthly period. Upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be prorated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
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For the purpose of determining fees payable to the Sub-Administrator, the
value of the net assets of a particular Fund shall be computed in the manner
described in the Trust's Agreement and Declaration of Trust or in the prospectus
or Statement of Additional Information respecting the Fund as from time to time
in effect for the computation of the value of such net assets in connection with
the determination of the liquidating value of the shares of such Fund.
3. Effective Date. This Agreement shall become effective with respect to a
Fund as of the date first written above (or, if a particular Fund is not in
existence on that date, on the date specified in the amendment to Schedule A to
this Agreement relating to such Fund or, if no date is specified, the date on
which such amendment is executed).
4. Term. This Agreement shall continue in effect with respect to a Fund,
unless earlier terminated by either party hereto as provided hereunder, until
September 30, 1999, and thereafter shall be renewed automatically for successive
one-year terms unless written notice not to renew is given by the non-renewing
party to the other party at least 60 days prior to the expiration of the
then-current term; provided, however, that after such termination for so long as
the Sub-Administrator, with the written consent of the Administrator, in fact
continues to perform any one or more of the services contemplated by this
Agreement or any schedule or exhibit hereto, the provisions of this Agreement,
including without limitation the provisions dealing with indemnification, shall
continue in full force and effect. This Agreement shall terminate automatically
upon termination of the Administration Agreement. In addition, either party to
this Agreement may terminate such Agreement prior to the expiration of the
initial term set forth above by providing the other party with written notice of
such termination at least 60 days prior to the date upon which such termination
shall become effective. Compensation due the Sub-Administrator and unpaid by the
Administrator upon such termination shall be immediately due and payable upon
and notwithstanding such termination. The Sub-Administrator shall be entitled to
collect from the Administrator, in addition to the compensation described under
paragraph 2 hereof, the amount of all the Sub-Administrator's cash disbursements
for services in connection with the Sub-Administrator's activities in effecting
such termination, including without limitation, the delivery to the
Administrator, the Trust, and/or their respective designees, of the Trust's
property, records, instruments and documents, or any copies thereof. Subsequent
to such termination for a reasonable fee to be paid by the Administrator, the
Sub-Administrator will provide the Administrator and/or the Trust with
reasonable access to any Trust documents or records remaining in its possession.
5. Standard of Care; Reliance on Records and Instructions;
Indemnification. The Sub- Administrator shall use reasonable efforts to ensure
the accuracy of all services performed under this Agreement, but shall not be
liable to the Administrator or the Trust for any action taken or omitted by the
Sub-Administrator in the absence of bad faith, willful misfeasance, negligence
or from reckless disregard by it of its obligations and duties. The
Administrator agrees to indemnify and hold harmless the Sub-Administrator, its
affiliates, employees, agents, directors, officers and nominees from and against
any and all claims, demands, actions and suits, whether groundless or otherwise,
and from and against any and all judgments, liabilities, losses, damages, costs,
charges, counsel fees and other reasonable expenses of every nature and
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character arising out of or in any way relating to the Sub-Administrator's
actions taken or nonactions with respect to the performance of services under
this Agreement with respect to a Fund or based, if applicable, upon reasonable
reliance on information, records, instructions or requests with respect to such
Fund given or made to the Sub-Administrator by the Administrator; provided that
this indemnification shall not apply to actions or omissions of the
Sub-Administrator in cases of its own bad faith, willful misfeasance, negligence
or from reckless disregard by it of its obligations and duties, and further
provided that prior to confessing any claim against it which may be the subject
of this indemnification, the Sub-Administrator shall give the Administrator
written notice of and reasonable opportunity to defend against said claim in its
own name or in the name of the Sub-Administrator.
The Sub-Administrator agrees to indemnify and hold harmless the
Administrator, its employees, agents, directors, officers and nominees from and
against any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other reasonable expenses of every
nature and character arising out of or in any way relating to the
Sub-Administrator's bad faith, willful misfeasance, negligence or from reckless
disregard by it of its obligations and duties, with respect to the performance
of services under this Agreement, provided that prior to confessing any claim
against it which may be the subject of this indemnification, the Administrator
shall give the Sub-Administrator written notice of and reasonable opportunity to
defend against said claim in its own name or in the name of the Administrator.
6. Record Retention and Confidentiality. The Sub-Administrator shall keep
and maintain on behalf of the Trust all books and records that the Trust and the
Sub-Administrator are, or may be, required to keep and maintain in connection
with the services to be provided hereunder pursuant to any applicable statutes,
rules and regulations, including without limitation Rules 31a-1 and 31a-2 under
the Investment Company Act of 1940, as amended. The Sub-Administrator further
agrees that all such books and records shall be the property of the Trust and to
make such books and records available for inspection by the Trust, by the
Administrator, or by the Securities and Exchange Commission at reasonable times.
7. Uncontrollable Events. The Sub-Administrator assumes no responsibility
hereunder, and shall not be liable, for any damage, loss of data, delay or any
other loss whatsoever caused by events beyond its reasonable control.
8. Rights of Ownership. All computer programs and procedures developed to
perform the services to be provided by the Sub-Administrator under this
Agreement are the property of the Sub-Administrator. All records and other data
except such computer programs and procedures are the exclusive property of the
Trust and all such other records and data will be furnished to the Administrator
and/or the Trust in appropriate form as soon as practicable after termination of
this Agreement for any reason.
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9. Return of Records. The Sub-Administrator may at its option at any time,
and shall promptly upon the demand of the Administrator and/or the Trust, turn
over to the Administrator and/or the Trust and cease to retain the
Sub-Administrator's files, records and documents created and maintained by the
Sub-Administrator pursuant to this Agreement which are no longer needed by the
Sub-Administrator in the performance of its services or for its legal
protection. If not so turned over to the Administrator and/or the Trust, such
documents and records will be retained by the Sub-Administrator for six years
from the year of creation. At the end of such six-year period, such records and
documents will be turned over to the Administrator and/or the Trust unless the
Trust authorizes in writing the destruction of such records and documents.
10. Notices. Any notice provided hereunder shall be sufficiently given
when sent by registered or certified mail to the address set forth above, or at
such other address as either party may from time to time specify in writing to
the other party pursuant to this Section.
11. Headings. Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
12. Assignment. This agreement and the rights and duties hereunder shall
not be assignable with respect to a Fund by either of the parties hereto except
by the specific written consent of the other party and with the specific written
consent of the Trust.
13. Governing Law. This Agreement shall be governed by and provisions
shall be construed in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
BISYS FUND SERVICES OHIO, INC. KEY ASSET MANAGEMENT INC.
By: /s/ J. Xxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
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Title: President Title: Senior Managing Director
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SCHEDULE A
TO THE
SUB-ADMINISTRATION AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND
KEY ASSET MANAGEMENT INC.
Funds
------
Investment Quality Bond Fund, Class A and Class B
Diversified Stock Fund, Class A and Class B
Small Company Opportunity Fund, Class A and Class B
BISYS FUND SERVICES OHIO, INC. KEY ASSET MANAGEMENT INC.
By: /s/ J. Xxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
---------------------------- ------------------------------
Title: President Title: Senior Managing Director
------------------------ ---------------------------
Date: December 11, 1998 Date: December 11, 1998
