THE VICTORY VARIABLE INSURANCE FUNDS
CONTRACT OWNER ADMINISTRATIVE SERVICES AGREEMENT
June 30, 1999
Nationwide Financial Services, Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
This letter sets forth the agreement between The Victory Variable Insurance
Funds (the "Trust"), on behalf of its series of portfolios (each a "Fund")
listed on Schedule B, as amended from time to time, and Nationwide Financial
Services, Inc. ("NFS") concerning certain administrative services to be
provided by you with respect to the Funds.
1. Introduction. The Trust is an open-end management investment company
organized under the laws of the State of Delaware. The Trust issues shares
of beneficial interest ("Shares") of the Funds. The Trust may offer its
Shares to life insurance companies (each, a "Life Company") to be held by
certain of their separate accounts ("Accounts") established for the
purpose of funding variable annuity contracts and variable life insurance
policies (collectively referred to herein as "Variable Contracts"). The
Shares of each Fund may be issued in multiple classes. In this agreement,
the beneficial owners of the Variable Contracts are referred to as the
"Contract Owners."
2. Administrative Services and Expenses. NFS or an entity appointed by NFS,
is responsible for providing administrative services to the Accounts that
invest in the Funds and for purchasers of Variable Contracts, pursuant to
a participation agreement between the Trust, NFS' subsidiaries, Nationwide
Life Insurance Company and Nationwide Life and Annuity Insurance Company,
(collectively "Nationwide") Key Asset Management Inc. and BISYS Fund
Services Limited Partnership (the "Participation Agreement"). The Trust is
responsible for providing administrative services to the Funds in which
the Accounts invest, and for purchasers of Shares.
NFS has agreed to assist the Trust, as the Trust may request from time to
time, with the provision of administrative services ("Administrative
Services") to the Funds, as may relate to the investment in the Funds by
the Accounts. Administrative Services include (but shall not be limited
to) those services listed on Schedule A, attached hereto, and made a part
hereof.
3. Administrative Expense Payments. In consideration of the anticipated
administrative expense savings resulting from the arrangements set forth
in this letter agreement, the Trust, on behalf of each Fund, individually
and not jointly, agrees to pay NFS on a quarterly basis an amount set
forth in Schedule B to this agreement.
For purposes of computing the payment to NFS under this Paragraph 3 for
each quarterly period, the total of the average daily net assets of each
Class of Shares in which the Accounts invest shall be multiplied by the
rate shown in Schedule B multiplied by the actual number of days in the
period divided by 365.
The Trust will calculate the expense payment contemplated by this
Paragraph 3 at the end of each quarter and will pay NFS within 30 days
thereafter on a pro-rata basis. Payment will be accompanied by a statement
showing the calculation of the quarterly amount payable by the Trust and
such other supporting data as NFS or Nationwide may reasonably request.
4. Nature of Payments. The Trust and NFS recognize and agree that payments
made by the Trust to you relate to Administrative Services only. The
amount of administrative expense payments made by the Trust to NFS
pursuant to Paragraph 3 of this agreement shall not be deemed to be
conclusive with respect to actual administrative expenses or savings of
the Trust.
5. Term. This agreement shall become effective as of the date first above
written, and shall continue automatically as to a particular Fund or Class
for successive one year terms unless terminated in accordance with
Paragraph 6 of this agreement, so long as the assets of the Funds are
attributable to amounts invested by the Accounts under the Participation
Agreement, and provided that a majority of the Trust's Trustees, including
a majority of the Trustees who are not "interested persons" (as defined in
the Investment Company Act of 1940, as amended) of the Trust (the
"Disinterested Trustees") specifically approve this agreement at least
annually.
6. Termination. Either the Trust or NFS may terminate this agreement; (a)
upon 60 days advance written notice; or (b) or immediately upon
termination of the Participation Agreement; (c) upon either party's
determination that the payments contemplated hereunder are in conflict
with applicable laws or upon mutual agreement in writing; or (d)upon the
vote of a majority of the outstanding Shares of the applicable Funds or by
a vote of a majority of the Disinterested Trustees.
7. Representations. NFS represents 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 the Administrative Services.
NFS also represents, warrants and agrees that: the Administrative Services
it provides under this agreement will in no event be primarily intended to
result in the sale of Shares of the Funds.
8. Subcontractors. NFS may, with the consent of the Trust, contract with or
establish relationships with other parties to provide the Administrative
Services or other activities required of NFS by this agreement, provided
that NFS shall be fully responsible for the acts and omissions of such
other parties.
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9. Authority. This agreement shall in no way limit the authority of the Trust
to take any action it may deem appropriate or advisable in connection with
all matters relating to the operations of the Trust and/or sale of its
Shares.
10. Indemnification. This letter agreement will be subject to the
indemnification provisions of the Fund Participation Agreement.
11. Miscellaneous. This agreement may be amended only in writing. This
agreement will terminate in the event of its "assignment" as defined in
the Investment Company Act of 1940. This agreement, including Schedule A
and Schedule B, constitutes the entire agreement between the Trust and NFS
with respect to the matters dealt with herein, and supersedes any previous
agreements and documents with respect to such matters. This agreement may
be executed in counterparts, each of which shall be deemed an original but
all of which shall together constitute one and the same instrument. NFS
agrees to notify the Trust promptly if for any reason it is unable to
perform fully and promptly any of its obligations under this agreement.
12. Notices. Any notices required to be sent hereunder shall be sent in
accordance with the Fund Participation Agreement.
13. Choice of Law. This letter agreement will be construed in accordance with
the laws of the State of Delaware.
14. Board Approval. This letter agreement has been approved by a vote of a
majority of the Board of Trustees of the Trust, including a majority of
the Disinterested Trustees.
15. Non-Exclusivity. The Trust and NFS may enter into other similar servicing
agreements with any other person or persons.
16. Organization; Limitation of Liability. The names "The Victory Variable
Insurance Funds" and the "Board of Trustees" refer respectively to the
Trust created, and the Trustees, as trustees but not individually or
personally, acting from time to time under, a Certificate of Trust filed
at the office of the Secretary of the State of Delaware on February 11,
1998, as amended as of October 5, 1998.
The obligations of "The Victory Variable Insurance Funds" entered into in
the name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually but in such capacities, and are not
binding upon any of the Trustees, Accounts or representatives of the Trust
personally, but bind only the "Trust Property" (as defined in the Trust
Instrument of the Trust), and all persons dealing with any class of Shares
of the Trust must look solely to the Trust Property belonging to such
class for the enforcement of any claims against the Trust.
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If this agreement reflects your understanding, please sign below and return a
signed copy to us.
Very truly yours,
THE VICTORY VARIABLE INSURANCE FUNDS,
on behalf of each Fund listed on
Schedule B, individually and not
jointly
/s/ J. Xxxxx Xxxxx
-----------------------------------
Name: J Xxxxx Xxxxx
Title: Vice President
Acknowledged and Agreed:
NATIONWIDE FINANCIAL SERVICES, INC.
/s/ Xxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President - Chief Compliance
Officer
Attachment: Schedule A
Schedule B
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SCHEDULE A
ADMINISTRATIVE SERVICES PROVIDED
WITH RESPECT TO
THE VICTORY VARIABLE INSURANCE FUNDS
Maintenance of Books and Records
o Assist as necessary to maintain book entry records on behalf of the Fund
regarding issuance to, transfer within (via net purchase orders) and
redemption by an Account of Fund Shares.
o Maintain general ledgers regarding each Account's holdings of Fund Shares,
coordinate and reconcile information, and coordinate maintenance of
ledgers by financial institutions and other contract owner service
provided.
Communication with the Fund
o Serve as the designee of the Fund for receipt of purchase and redemption
orders from each Account and to transmit such orders, and payment
therefor, to the Fund.
o Coordinate with the Fund's agents respecting daily valuation of the Fund's
Shares and an Account's units.
Purchase Orders
o Determine net amount available for investment in the Fund.
o Deposit receipts at the Fund's custodians (generally by wire transfer).
o Notify the custodians of the estimated amount required to pay dividend or
distribution.
Redemption Orders
o Determine net amount required for redemptions by the Fund.
o Notify the custodian and Fund of cash required to meet payments.
o Purchase and redeem Shares of the Portfolios on behalf of each Account at
the then-current price in accordance with the terms of the Fund's
then-current prospectus.
o Assist in rooting and revising sales and marketing materials in
incorporate or reflect the comments made on behalf of the Fund or its
underwriter.
o Assist in enforcing procedures adopted on behalf of the Fund to reduce,
discourage, or eliminate market timing transactions in the Fund's Shares
in order to reduce or eliminate adverse effects on the Fund or its
shareholders.
Processing Distributions from the Funds
o Process ordinary dividends and capital gains.
o Reinvest the Fund's distributions.
Reports
o Periodic information reporting to the Fund, including, but not limited to,
furnishing registration statements, prospectuses, statements of additional
information, reports, solicitations for voting instructions, sales or
promotional materials and any other SEC filings with respect to the
Accounts invested in the Fund, as not otherwise provided for.
o Periodic information reporting about the Fund, including any necessary
delivery of the Fund's prospectus and annual and semi-annual reports to
contract owners, as not otherwise provided for.
Fund-related Contract Owner Services
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 Fund and the subaccounts
of the Accounts.
o Oversee and assist the solicitation, counting and voting or contract owner
voting interests in the Fund pursuant to Fund proxy statements.
Other Administrative Support
o Provide other administrative and legal compliance support for the Fund as
mutually agreed upon by the Company and the Fund to the extent permitted
or required under applicable statutes.
o Relieve the Funds of other usual or incidental administrative services
provided to individual owners of Variable Insurance Products.
SCHEDULE B
THE VICTORY VARIABLE INSURANCE FUNDS
COMPENSATION UNDER THE
CONTRACT OWNER ADMINISTRATIVE SERVICES AGREEMENT
The Victory Variable Insurance Funds (the "Trust") agrees to pay the
following quarterly amounts calculated as a percentage of the average daily net
assets of the relevant Fund and Class thereof held in the Accounts:
Fund Class A
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Investment Quality Bond Fund 20%
Diversified Stock Fund 20%
Small Company Opportunity Fund 20%
Dated as of June 30, 1999
