THE VICTORY VARIABLE INSURANCE FUNDS
CONTRACT OWNER ADMINISTRATIVE SERVICES AGREEMENT
January 26, 2001
Hartford Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 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 Hartford Life
Insurance Company (the "Company") concerning certain administrative services
to be provided by the Company which will benefit 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. The Company is responsible for
providing administrative services to its accounts ("Accounts") that
invest in the Funds and for purchasers of Variable Contracts, pursuant
to a participation agreement among the Trust, the Company and others
(the "Participation Agreement"). The Trust is responsible for
providing administrative services to the Funds in which the Accounts
invest, and for purchasers of Shares.
Notwithstanding the foregoing, the Company has agreed to assist the
Trust, as the Trust may request from time to time, with the provision
of certain administrative services ("Administrative Services") to the
Funds, among those set forth in Schedule A hereto, as may relate to the
investment in the Funds by the Accounts.
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 the Company on a quarterly
basis an amount set forth in Schedule B to this agreement.
For purposes of computing the payment to the Company 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 the Company 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 the Company may reasonably
request.
4. Nature of Payments. The Trust and the Company recognize and agree that
payments made by the Trust to the Company relate to Administrative
Services only and do not constitute payment in any manner for
administrative services provided by the Company to the Accounts or to
the Variable Contracts, for investment advisory services or for costs
of distribution of Variable Contracts or of Shares of the Funds, and
that these payments are not otherwise related to the investment
advisory or distribution services or expenses. The amount of
administrative expense payments made by the Trust to the Company
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 in effect until terminated in accordance
with Paragraph 6 of this letter agreement; 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. This Agreement will terminate only upon written notice
following termination or assignment of the Participation Agreement by
and among the Company, the Trust, Key Asset Management Inc. and BISYS
Fund Services Limited Partnership. Notwithstanding the termination of
this agreement, the Trust will continue to pay the administrative
expense payments required under Section 3 hereof as long as net assets
of the Funds remain invested within the Accounts and the Company
continues to perform Administrative Services. This agreement may
terminate immediately upon either party's determination (with the
advice of counsel) that the payment of the expense payments are in
conflict with applicable law.
7. Representations. The Company represent 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.
The Company also represents, warrants and agrees that: (i) the fact
that it receives compensation in connection with the administrative
services provided with respect to the Accounts' assets in the Funds
will be disclosed to the Contract Owners; and (ii) 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.
2
The Trust represents and warrants that any payment pursuant to this
agreement made directly or indirectly to the Company constitutes
compensation for legitimate services required by the Trust related to
the Funds, consistent with the services rendered or the cost savings
resulting from the arrangement, and is not in any way intended to
compensate any party for the purchase of Fund Shares.
8. Subcontractors. The Company 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 the Company
by this agreement, provided that the Company shall be fully responsible
for the acts and omissions of such other parties.
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 Participation Agreement.
11. Miscellaneous. This agreement may be amended only upon mutual
agreement of the parties hereto in writing. This agreement may not be
assigned (as that term is defined in the Investment Company Act of
1940) by any party without the prior written approval of the other
party, which approval will not be unreasonably withheld. This
agreement, including Schedule A and Schedule B, constitutes the entire
agreement between the Trust and the Company 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. The
Company agrees to notify the Trust promptly if for any reason you are
unable to perform fully and promptly any of your obligations under this
agreement.
12. Notices. Any notices required to be sent hereunder shall be sent in
accordance with the 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 the Company 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.
3
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, agents 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.
If this agreement reflects the Company's understanding, please sign below and
return a signed copy to the Trust.
Very truly yours,
THE VICTORY VARIABLE INSURANCE FUNDS,
on behalf of each Fund listed on
Schedule B, individually and not
jointly
/s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary
Acknowledged and Agreed:
HARTFORD LIFE INSURANCE COMPANY
/s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: Counsel
Attachment: Schedule A
Schedule B
4
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
providers.
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 routing 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 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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Diversified Stock Fund 0.20%
Small Company Opportunity Fund 0.20%
