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Exhibit 99(m)(2)
THE VICTORY VARIABLE INSURANCE FUNDS
CONTRACT OWNER ADMINISTRATIVE SERVICES AGREEMENT
____________________, 199__
___________________________
___________________________
___________________________
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 you 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. You are 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, you 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.
You have agreed to assist us, as we 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 you on a quarterly basis an
amount set forth in Schedule B to this agreement.
For purposes of computing the payment to you under this Paragraph 3 for
each quarterly period, the total of the average daily net assets of
each Class of Shares in which the
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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 you 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 you may reasonably request.
4. NATURE OF PAYMENTS. The Trust and you 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 you
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, unless sooner terminated in accordance with Paragraph 6
of this letter agreement, shall continue until December 31, 2000.
Thereafter, if not terminated, this agreement shall continue
automatically as to a particular Fund or Class for successive one year
terms 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 you may terminate this agreement upon
60 days advance written notice or immediately upon termination of the
Participation Agreement, upon either party's determination (with the
advice of counsel) that the payments contemplated hereunder are in
conflict with applicable laws or upon mutual agreement in writing. In
addition, the Trust may terminate this agreement 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. You represent that you 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.
You also represent, warrant and agree that: (i) the fact that you receive
compensation in connection with the investment of the Accounts' assets
in the Funds will be disclosed to the Contract Owners; and (ii) the
Administrative Services you provide under this agreement will in no
event be primarily intended to result in the sale of Shares of the
Funds.
8. SUBCONTRACTORS. You may, with the consent of the Trust, contract with
or establish relationships with other parties to provide the
Administrative Services or other activities
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required of you by this agreement, provided that you 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 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 you 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. You agree 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 you 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
_________________________________
Name: ______________________
Title: _____________________
Acknowledged and Agreed:
_________________________________
_________________________________
Name: ______________________
Title: _____________________
Attachment: Schedule A
Schedule B
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SCHEDULE A
ADMINISTRATIVE SERVICES PROVIDED
WITH RESPECT TO
THE VICTORY VARIABLE INSURANCE FUNDS
I. TRUST-RELATED CONTRACT OWNERS SERVICES:
- Dissemination of the Trust's prospectus to existing Contract Owners,
as provided in the Participation Agreement.
- Dissemination of Trust proxies (including facilitating distribution of
proxy material to Contract Owners, tabulation and reporting).
- Telephonic support for Contract Owners with respect to inquiries about
the Trust (not including information related to sales).
- Communicating with Contract Owners regarding performance of the
Account and the Funds.
II. SUB-ACCOUNTING SERVICES INCLUDE:
- Aggregating purchase and redemption orders of the Account for sales of
Shares of the Funds.
- Recording issuance and transfers of Shares of the Funds held by the
Account.
- Processing and reinvesting dividends and distributions of the Funds
held by the Account.
III. OTHER ADMINISTRATIVE SUPPORT INCLUDES:
- Providing other administrative support to the Trust as mutually agreed
between the Trust and you.
Dated as of ____________ ___, 199__
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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 CLASS B
---- ------- -------
Investment Quality Bond Fund % %
Diversified Stock Fund % %
Small Company Opportunity Fund % %
Dated as of __________ ___, 199__