The Victory Portfolios
EX-99.B6(a)
Distribution Agreement between the Registrant and Victory Broker-Dealer
Services, Inc. dated March 31, 1995 with an amended Schedule I dated February 1,
1996.
DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of this 31st day of March, 1995
between THE VICTORY PORTFOLIOS, a Massachusetts business trust (herein called
the "Trust"), and VICTORY BROKERDEALER SERVICES, INC., a Delaware corporation
(herein called the "Distributor").
WHEREAS, the Trust is an open-end management investment company and is
so registered under the Investment Company Act of 1940; and
WHEREAS, the Trust desires to retain the Distributor as Distributor for
each of the Trust's separate portfolios set forth on Schedule I hereto, as such
Schedule may be revised from time to time (individually known as a "Fund" and
collectively as the "Funds") to provide for the sale and distribution of shares
of beneficial interest without par value of the Funds (herein collectively
called "Shares"), and the Distributor is willing to render such services;
NOW THEREFORE, in consideration of the premises and mutual convenants
set forth herein the parties hereto agree as follows:
I. DELIVERY OF DOCUMENTS
The Trust has delivered to the Distributor copies of each of the
following documents and will deliver to it all future amendments and supplements
thereto, if any:
(a) The Trust's Declaration of Trust and all amendments
thereto (such Declaration of Trust, as presently in effect and as it
shall from time to time be amended, herein called the "Trust's
Declaration");
(b) The By-Laws of the Trust (such By-Laws, as presently in
effect and as they shall from time to time be amended, herein called
the "By-Laws");
(c) Resolutions of the Board of Trustees of the Trust
authorizing the execution and delivery of this Agreement;
(d) The Trust's most recent Post-Effective Amendment to its
Registration Statement under the Securities Act of 1933, as amended
(the "1933 Act"), and under the Investment Company Act of 1940, as
amended (the "1940 Act"), on Form N-1A as filed with the Securities and
Exchange Commission (the "Commission") and all subsequent amendments
thereto (said Registration Statement, as presently in effect and as
amended or supplemented from time to time, is herein called the
"Registration Statement");
(e) Notification of Registration of the Trust under the
1940 Act on Form N-8A as filed with the Commission; and
(f) Prospectuses and Statements of Additional Information of
the Funds (such prospectuses and statements of additional information,
as presently filed with the Securities and Exchange Commission and as
they shall from time to time be amended and supplemented, herein called
individually the "Prospectus" and collectively the "Prospectuses").
II. DISTRIBUTION
1. APPOINTMENT OF DISTRIBUTOR. The Trust hereby appoints the
Distributor as Principal Distributor of the Fund's Shares and the
Distributor hereby accepts such appointment and agrees to render
the services and duties set forth in this Section II.
2. SERVICES AND DUTIES.
(a) The Trust agrees to sell through the Distributor, as
agent, from time to time during the term of this Agreement, Shares of
the Funds (whether authorized but unissued or treasury shares, in the
Trust's sole discretion) upon the terms and at the current offering
price as described in the applicable Prospectus. The Distributor will
act only in its own behalf as principal in making agreements with
selected dealers or others for the sale and redemption of Shares, and
shall sell Shares only at the offering price thereof as set forth in
the applicable Prospectus. The Distributor shall devote its best
efforts to effect sales of Shares of each of the Funds, but shall not
be obligated to sell any certain number of Shares. Each Fund reserves
the right to issue Shares in connection with any merger or
consolidation of the Trust or any Fund with any other investment
company or personal holding company or in connection with offers of
exchange exempted from Section 11(a) of the 1940 Act.
(b) In all matters relating to the sale and redemption of
Shares, the Distributor will act in conformity with the Trust's
Declaration, By-Laws, and Prospectuses and with the instructions and
directions of the Board of Trustees of the Trust and will conform to
and comply with the requirements of the 1933 Act, the 1940 Act, the
regulations of the National Association of Securities Dealers, Inc. and
all other applicable federal or state laws and regulations. In
connection with such sales, the Distributor acknowledges and agrees
that it is not authorized to provide any information or make any
representations other than as contained in the Trust's Registration
Statement and Prospectuses and any sales literature specifically
approved by the Trust. The Trust shall not be responsible in any way
for any information, statements or representations given or made by
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the Distributor or its representatives or agents other than such
information, statements or representations contained in the
Prospectuses or other financial statements of the Trust or in any sales
literature or advertisements specifically approved by the Trust.
(c) The Distributor will bear the cost of (i) printing and
distributing any Prospectus (including any supplement thereto) to
persons who are not either shareholders or counsel, independent
accountants or other persons providing similar services to the Trust,
and (ii) preparing, printing and distributing any literature,
advertisement or material which is primarily intended to result in the
sale of the Shares; provided, however, that the Distributor shall not
be obligated to bear the expenses incurred by the Trust in connection
with the preparation and printing of any amendment to any Registration
Statement or Prospectus necessary for the continued effective
registration of the Shares under the 1933 Act; and provided further,
that each Fund will bear the expenses incurred and other payments made
in accordance with the provisions of this Agreement and any plan now in
existence or hereafter adopted with respect to such Fund, or any class
or classes of shares of such Fund, pursuant to Rule 12b-1 under the
1940 Act (collectively, the "Plans").
(d) The Distributor agrees to be responsible for implementing
and/or operating the Plans in accordance with the terms thereof.
(e) All Shares of the Funds offered for sale by the
Distributor shall be offered for sale to the public at a price per
Share (the "offering price") equal to (i) their net asset value
(determined in the manner set forth in the Trust's Declaration and then
current Prospectuses) plus (ii) a sales charge (if any) which shall be
the percentage of the offering price of such Shares as set forth in the
Trust's then current Prospectuses. The offering price, if not an exact
multiple of one cent, shall be adjusted to the nearest cent. If a sales
charge is in effect, the Distributor shall have the right to pay a
portion of the sales charge to broker-dealers and other persons who
have sold Shares of the Funds. Concessions by the Distributor to
broker-dealers and other persons shall be set forth in either the
selling agreements between the Distributor and such broker-dealers and
persons or, if such concessions are described in the then current
Prospectuses, shall be as so set forth. No broker-dealer or other
person who enters into a selling agreement with the Distributor shall
be authorized to act as agent for the Trust in connection with the
offering or sale of its Shares to the public or otherwise.
(f) If any Shares sold by the Distributor under the
terms of this Agreement are redeemed or repurchased by the
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Trust or by the Distributor as agent or are tendered for redemption
within seven business days after the date of confirmation of the
original purchase of said Shares, the Distributor shall forfeit the
amount (if any) of the net asset value received by it in respect of
such Shares, provided that the portion, if any, of such amount (if any)
re-allowed by the Distributor to broker-dealers or other persons shall
be repayable to the Trust only to the extent recovered by the
Distributor from the broker-dealer or other person concerned. The
Distributor shall include in the forms of agreement with such
broker-dealers and other persons a corresponding provision for the
forfeiture by them of their concession with respect to Shares sold by
them or their principals and redeemed or repurchased by the Trust or by
the Distributor as agent (or tendered for redemption) within seven
business days after the date of confirmation of such initial purchases.
3. SALES AND REDEMPTIONS.
(a) The Trust shall pay all costs and expenses in connection
with the registration of the Shares under the 1933 Act, and all
expenses in connection with maintaining facilities for the issue and
transfer of the Shares and for supplying information, prices and other
data to be furnished by the Trust hereunder, and all expenses in
connection with preparing, printing and distributing the Prospectus
except as set forth in subsection 2(c) of Section II hereof.
(b) The Trust shall execute all documents, furnish all
information and otherwise take all actions which may be reasonably
necessary in the discretion of the Trust's officers in connection with
the qualification of the Shares for sale in such states as the
Distributor may designate to the Trust and the Trust may approve, and
the Trust shall pay all filing fees which may be incurred in connection
with such qualification. The Distributor shall pay all expenses
connected with its qualification as a dealer under state or federal
laws and, except as otherwise specifically provided in this Agreement,
all other expenses incurred by the Distributor in connection with the
sale of the Shares as contemplated in this Agreement. It is understood
that certain advertising, marketing, shareholder servicing,
administration and/or distribution expenses to be incurred in
connection with the Shares will be paid by the Funds as provided in
this Agreement and in the Plans relating thereto.
(c) The Trust shall have the right to suspend the sale of
Shares of any Fund at any time in response to conditions in the
securities markets or otherwise, and to suspend the redemption of
Shares of any Fund at any time permitted by the 1940 Act or the rules
of the Commission ("Rules").
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(d) The Trust reserves the right to reject any order
for Shares.
III. LIMITATION OF LIABILITY
The Distributor shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust or any Fund in connection
with the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations and duties under
this Agreement.
IV. CONFIDENTIALITY
The Distributor will treat confidentially and as proprietary
information of the Trust all records and other information relative to the
Trust, to the Trust's prior or present shareholders and to those persons or
entities who respond to the Distributor's inquiries concerning investment in the
Trust, and except as provided below, will not use such records and information
for any purpose other than the performance of its responsibilities and duties
hereunder or the performance of its responsibilities and duties with regard to
sales of the shares of any Fund which may be added to the Trust in the future.
Any other use by the Distributor of the information and records referred to
above may be made only after prior notification to and approval in writing by
the Trust. Such approval shall not be unreasonably withheld and may not be
withheld where (i) the Distributor may be exposed to civil or criminal contempt
proceedings for failure to divulge such information; (ii) the Distributor is
requested to divulge such information by duly constituted authorities; or (iii)
the Distributor is so requested by the Trust.
V. INDEMNIFICATION
1. TRUST REPRESENTATIONS. The Trust represents and warrants to the
Distributor that at all times the Registration Statement and Prospectuses will
in all material respects conform to the applicable requirements of the 1933 Act
and the Rules and will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation or warranty in this
subsection shall apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Trust by or on behalf of
and with respect to the Distributor expressly for use in the Registration
Statement or Prospectuses.
2. DISTRIBUTOR REPRESENTATIONS. The Distributor represents and warrants to
the Trust that it is duly organized as a Delaware corporation and is and at all
times will remain duly authorized and licensed to carry out its services as
contemplated herein.
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3. TRUST INDEMNIFICATION. The Trust will indemnify, defend and hold
harmless the Distributor, its several officers and directors, and any person who
controls the Distributor within the meaning of Section 15 of the 1933 Act, from
and against any losses, claims, damages or liabilities, joint or several, to
which any of them may become subject under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectuses or in any application or other document executed by
or on behalf of the Trust, or arise out of, or are based upon, information
furnished by or on behalf of the Trust filed in any state in order to qualify
the Shares under the securities or blue sky laws thereof ("Blue Sky
Application"), or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Distributor, its several officers and directors, and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act, for any legal or
other expenses reasonably incurred by any of them in investigating, defending,
or preparing to defend any such action, proceeding or claim; provided, however,
that the Trust shall not be liable in any case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, any untrue
statement, alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectuses, any Blue Sky Application or any
application or other document executed by or on behalf of the Trust in reliance
upon and in conformity with written information furnished to the Trust by or on
behalf of and with respect to the Distributor specifically for inclusion
therein.
The Trust shall not indemnify any person pursuant to this subsection 3
unless the court or other body before which the proceeding was brought has
rendered a final decision on the merits that such person was not liable by
reason of his willful misfeasance, bad faith or negligence in the performance of
his duties, or his reckless disregard of obligations and duties, under this
Agreement ("disabling conduct") or, in the absence of such a decision, a
reasonable determination (based upon a review of the facts) that such person was
not liable by reason of disabling conduct has been made by the vote of a
majority of a quorum of trustees of the Trust who are neither "interested
persons" of the Trust (as defined in the 0000 Xxx) nor parties to the
proceeding, or by an independent legal counsel in a written opinion.
Each Fund shall advance attorney's fees and other expenses incurred by
any person in defending any claim, demand, action or suit which is the subject
of a claim for indemnification pursuant to this subsection 3, so long as: (i)
such person shall undertake to repay all such advances unless it is ultimately
determined
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that he is entitled to indemnification hereunder; and (ii) such person shall
provide security for such undertaking, or the Fund shall be insured against
losses arising by reason of any lawful advances, or a majority of a quorum of
the disinterested, nonparty trustees of the Trust (or an independent legal
counsel in a written opinion) shall determine based on a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such person ultimately will be found entitled to indemnification
hereunder.
4. DISTRIBUTOR INDEMNIFICATION. The Distributor will indemnify, defend
and hold harmless the Trust, the Trust's several officers and trustees and any
person who controls the Trust within the meaning of Section 15 of the 1933 Act,
from and against any losses, claims, damages or liabilities, joint or several,
to which any of them may become subject under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect hereof) arise out of, or are based upon, any breach of its
representations and warranties in subsection 2 hereof or its agreements in
subsection 2 of Section II hereof, or which arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectuses, any Blue Sky Application or any
application or other document executed by or on behalf of the Trust, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, which
statement or omission or alleged statement or alleged omission was made in
reliance upon or in conformity with information furnished in writing to the
Trust or any of its several officers and trustees by or on behalf of and with
respect to the Distributor specifically for inclusion therein, and will
reimburse the Trust, the Trust's several officers and trustees, and any person
who controls the Trust within the meaning of Section 15 of the 1933 Act, for any
legal or other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim.
5. GENERAL INDEMNITY PROVISIONS. No indemnifying party shall be liable
under its indemnity agreement contained in subsection 3 or 4 hereof with respect
to any claim made against such indemnifying party unless the indemnified party
shall have notified the indemnifying party in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall not
relieve it from any liability which it may otherwise have to the indemnified
party. The indemnifying party will be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, and if the indemnifying party elects
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to assume the defense, such defense shall be conducted by counsel chosen by it
and reasonably satisfactory to the indemnified party. In the event the
indemnifying party elects to assume the defense of any such suit and retain such
counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by the indemnified party.
VI. DURATION AND TERMINATION
This Agreement shall become effective as of the date first above
written, and, unless sooner terminated as provided herein, shall continue until
June 5, 1997. Thereafter, if not terminated, this Agreement shall continue
automatically for successive terms of one year, provided that such continuance
is specifically approved at least annually (a) by a majority of those members of
the Board of Trustees of the Trust who are not parties to this Agreement or
"interested persons" of any such party (the "Disinterested Trustees"), pursuant
to a vote cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Board of Trustees of the Trust or by vote of a
"majority of the outstanding voting securities" of the Trust. Notwithstanding
anything to the contrary contained in this Section VI, this Agreement may be
terminated by the Trust at any time with respect to any Fund, without the
payment of any penalty, by vote of a majority of the Disinterested Trustees or
by vote of a "majority of the outstanding voting securities" of such Fund on 60
days' written notice to the Distributor, or by the Distributor at any time,
without the payment of any penalty, on 60 days' written notice to the Trust.
This Agreement will automatically terminate in the event of its "assignment."
(As used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
as such terms have in the 1940 Act.)
VII. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
an enforcement of the change, waiver, discharge or termination is sought.
VIII. NOTICES
Notices of any kind to be given to the Trust hereunder by the
Distributor shall be in writing and shall be duly given if mailed or delivered
to the Trust c/o Mutual Fund Products, KeyCorp Management Company, 000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000, with a copy to Kramer, Levin, Naftalis, Nessen,
Xxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx, Xxxx 00000, Attention: Xxxx
Xxxxxxxxxx, Esquire, or at such other address or to such individual as shall be
so specified by the Trust to the Distributor. Notices of any kind to be given to
the Distributor hereunder by the Trust shall be in writing and shall be duly
given if mailed or delivered to the Distributor at 125 W.
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00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx, Chief
Executive Officer, or at such other address or to such individual as shall be so
specified by the Distributor to the Trust.
IX. COMPENSATION
The Distributor shall not receive compensation with respect to the
provision of distribution services under this Agreement; provided, however, that
the Distributor shall be entitled to receive payments, if any, under the Plans
in accordance with the terms thereof. The Trust is entering into this Agreement
on behalf of the Funds listed on Schedule I severally and not jointly. The
responsibilities and benefits set forth in this Agreement shall refer to each
Fund severally and not jointly. No individual Fund shall have any responsibility
for any obligation, if any, with respect to any other Fund arising out of this
Agreement.
X. MISCELLANEOUS
1. CONSTRUCTION. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. Subject to the provisions of Section VI hereof, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and shall be governed by New York law; provided,
however, that nothing herein shall be construed in a manner inconsistent with
the Investment Company Act of 1940 or any rule or regulation of the Commission
thereunder.
2. NAMES. The names "The Victory Portfolios" and "Trustees of The
Victory Portfolios" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under an
Amended and Restated Declaration of Trust filed September 6, 1994,at the office
of the State Secretary of the Commonwealth of Massachusetts which is hereby
referred to and is also on file at the principal office of the Trust. The
obligations of The Victory Portfolios 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, shareholders or representatives of the Trust personally, but bind only
the Trust property, 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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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
THE VICTORY PORTFOLIOS
By: /s/ Xxxxx X. Xxxxxx
President
Attest: /s/ Xxxxx Xxxxxxxxx
Secretary
VICTORY BROKER-DEALER
SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Treasurer
Attest: /s/ Xxx X. Xxxxxxxx
Assistant Vice President
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SCHEDULE I
As Amended as of February 1, 1996
Name of Fund Class
------------ -----
1. The Victory Balanced Fund A/B
2. The Victory Diversified Stock Fund A/B
3. The Victory Government Mortgage Fund A
4. The Victory Growth Fund A
5. The Victory Intermediate Income Fund A
6. The Xxxxxxx Xxxxxxxxxxxxx Growth Fund A/B
7. The Victory Investment Quality Bond Fund A
8. The Victory Limited Term Income Fund A
9. The Victory Ohio Municipal Bond Fund A
10. The Victory Ohio Regional Stock Fund A/B
11. The Victory Prime Obligations Fund A
12. The Victory Special Growth Fund A
13. The Victory Special Value Fund A/B
14. The Victory Stock Index Fund A
15. The Victory Tax-Free Money Market Fund A
16. The Victory U.S. Government Obligations Fund A/B
17. The Victory Value Fund A
18. The Victory Financial Reserves Fund A
19. The Victory Fund for Income A
20. The Victory Government Bond Fund A/B
21. The Victory Institutional Money Market Fund A/Service
22. The Victory National Municipal Bond Fund A/B
23. The Victory New York Tax-Free Fund A/B
24. The Victory Ohio Municipal Money Market Fund A
25. The Victory Convertible Securities Fund A
26. The Victory Florida Tax-Free Bond Fund A
27. The Victory Municipal Bond Fund A
28. The Victory Short Term Government Income Fund A
