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Exhibit 99(h)(1)
FUND ACCOUNTING AGREEMENT
AGREEMENT made this 16th day of October, 1998 between THE VICTORY
VARIABLE INSURANCE FUNDS (the "Trust"), a Delaware business trust having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and
BISYS FUND SERVICES OHIO, INC. ("BISYS"), a corporation organized under the laws
of the State of Ohio and having its principal place of business at 0000 Xxxxxxx
Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust desires that BISYS perform certain fund accounting
services for each investment portfolio of the Trust identified on Schedule A
hereto (individually referred to herein as a "Fund" and collectively as the
"Funds"); and
WHEREAS, BISYS 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 FUND ACCOUNTANT. BISYS will keep and maintain the
following books and records of each Fund pursuant to Rule 31a-1 under the
Investment Company Act of 1940, as amended (the "Rule"):
a. Journals containing an itemized daily record in detail of
all purchases and sales of securities, all receipts and disbursements of cash
and all other debits and credits, as required by subsection (b)(1) of the Rule;
b. General and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense accounts, including interest
accrued and interest received, as required by subsection (b)(2)(i) of the Rule;
c. Separate ledger accounts required by subsection (b)(2)(ii)
and (iii) of the Rule; and
d. A monthly trial balanced of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of the Rule.
All such books and records shall be the property of the Trust, and BISYS agrees
to make such books and records available for inspection by the Trust or by the
Securities and Exchange commission at reasonable times and otherwise to keep
confidential all records and other information relative to the Trust; except
when requested to divulge such information by duly-constituted authorities or
court process, or when requested by the Trust.
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In addition to the maintenance of the books and records specified
above, BISYS shall perform the following account services daily for each Fund:
a. Calculate the net asset value per Share;
b. Calculate the dividend and capital gain distribution,
if any;
c. Calculate the yield;
d. Provide the following reports:
(i) a current security position report;
(ii) a summary report of transactions and pending
maturities (including the principal, cost,
and accrued interest on each portfolio
security in maturity date order); and
(iii) a current cash position report (including
cash available from portfolio sales and
maturities and sales of a Fund's Shares less
cash needed for redemptions and settlement
of portfolio purchases);
e. Such other similar services with respect to a Fund as
may be reasonable requested by the Trust.
2. COMPENSATION. See Schedule B attached.
3. EFFECTIVE DATE. This Agreement shall become effective with respect
to a Fund as of the date first written above (the "Effective Date").
4. TERM. This Agreement shall become effective on the Effective Date
and, unless earlier terminated as provided herein, shall continue as to a
particular Fund until September 30, 1999 and thereafter, if not terminated, this
Agreement shall continue automatically as to a particular Fund for successive
terms of one year; provided, that such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Trust's
Board of Trustees who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the vote of (i) the Trust's Board of Trustees or (ii)
a majority of the outstanding voting securities of such Fund. This Agreement is
terminable with respect to a Fund (a) if its continuance is not approved in the
manner described in this Section 4, (b) upon mutual agreement of the parties, or
(c) for "cause" (as defined below) by the party alleging cause upon the
provision of sixty days' notice. After such termination, for so long as BISYS,
with the written consent of the Trust, 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. Compensation due BISYS and unpaid by the Trust upon such termination
shall be immediately due and payable upon and
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notwithstanding such termination. BISYS shall be entitled to collect from the
Trust, in addition to the compensation described under Section 2 hereof, the
amount of all of BISYS' cash disbursements for services in connection with
BISYS' activities in effecting such termination, including without limitation,
the delivery to the Trust and/or its designees of the Trust's property, records,
instruments and documents, or any copies thereof. Subsequent to such termination
for a reasonable fee, BISYS will provide the Trust with reasonable access to any
Trust documents or records remaining in its possession.
For purposes of this Agreement, "cause" shall mean (a) a material
breach that has not been cured within thirty (30) days following written notice
of such breach from the non-breaching party; (b) a final, unappealable judicial,
regulatory or administrative ruling or order in which the party to be terminated
has been found guilty of criminal or unethical behavior in the conduct of its
business; (c) financial difficulties on the part of the party to be terminated
which are evidenced by the authorization or commencement of, or involvement by
way of pleading, answer, consent or acquiescence in, a voluntary or involuntary
case under Title 11 of the United States Code, as from time to time is in
effect, or any applicable law, other than said Title 11, of any jurisdiction
relating to the liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors; or (d) any circumstance which
substantially impairs the performance of the obligations and duties of the party
to be terminated, or the ability to perform those obligations and duties, as
contemplated herein.
The parties acknowledge that, in the event of a change of control (as
defined in the Investment Company Act of 1940, as amended) of BISYS or of Key
Asset Management Inc., the Trust's investment adviser, BISYS may be replaced as
fund accountant for the Trust prior to the expiration of the initial one-year
term or any subsequent one-year term. In that connection, the parties agree
that, notwithstanding the replacement of BISYS as referenced above, the Trust
shall remain responsible for the payment of fees to BISYS hereunder for the
remainder of the then-current contract term.
5. STANDARD OF CARE; INDEMNIFICATION. BISYS shall use its best efforts
to insure the accuracy of all services performed under this Agreement, but shall
not be liable to the Trust for any action taken or omitted by BISYS in the
absence of bad faith, willful misconduct or negligence. BISYS 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. A Fund agrees to indemnify and hold harmless BISYS, 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 expenses of every nature and character arising out of or
in any way relating to BISYS' actions taken or non-actions with respect to the
performance of services under this Agreement with respect to such Fund or based,
if applicable, upon information, instructions or requests with respect to such
Fund given or made to BISYS by an officer of the Trust thereunto duly
authorized; provided that this indemnification shall not apply to actions or
omissions of BISYS in cases of its own willful misconduct or negligence, and
further provided that prior to confessing any claim against it which may be the
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subject of this indemnification, BISYS shall give the Trust written notice of
and reasonable opportunity to defend against said claim in its own name or in
the name of BISYS.
6. HEADINGS. Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
7. 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.
8. GOVERNING LAW. This Agreement shall be governed by and provisions
shall be construed in accordance with the laws of the State of Ohio.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS. A copy of
the Trust's Certificate of Trust is on file with the Secretary of the State of
Delaware, and notice is hereby given that this instrument is executed on behalf
of the Trustees of the Trust as Trustees and not individually and that the
obligations of this instrument are not binding upon any of the Trustees or
Shareholders individually but are binding only upon the assets and property of
the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE VICTORY VARIABLE INSURANCE FUNDS
By: ______________________
Title:
BISYS FUND SERVICES OHIO, INC.
By: ____________________________
Title:
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AMENDED SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN THE VICTORY VARIABLE INSURANCE FUNDS
AND BISYS FUND SERVICES OHIO, INC.
DATED AS OF OCTOBER 16, 1998
NAME OF PORTFOLIO
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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
THE VICTORY VARIABLE INSURANCE FUNDS
By: ______________________
Title:
BISYS FUND SERVICES OHIO, INC.
By: ____________________________
Title:
Dated as of December 11, 1998
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SCHEDULE B
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN THE VICTORY VARIABLE INSURANCE FUNDS
AND BISYS FUND SERVICES OHIO, INC.
DATED AS OF OCTOBER 16, 1998
Fund accounting fees will be determined based on a combination of
asset-based charges (subject to minimums), transaction charges, and
out-of-pocket expenses. Asset-based fees are accrued daily upon average total
net assets of a Fund.
Asset charges per Fund - Annually
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Net Assets Amounts
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First $100 million .03%
Next $100 million .02%
Over $200 million .01%
Minimum Monthly Asset Charge
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The above charge will be subject to a minimum monthly amount of $2,500
per Fund.
Transaction Charges per Fund
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$5 per security transaction (including foreign exchanges, patents,
corporate actions, and margin payments).
Multiple Class Charges
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A $833 per month charge will be assessed for each class of shares after
the first class. This is separate from and in addition to other charges
and the minimum charge.
Out-of-Pocket Expenses
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Out-of-pocket expenses incurred on behalf of the Fund will be billed
monthly and include, but not be limited to:
- Payment to pricing or corporate actions vendors
- Costs in obtaining prices for non-exchange traded securities
- Postage and communication (wires, modem fees)
- Courier expenses
- Microfilming, archiving, etc.
