EXPENSE LIMITATION AGREEMENT
Between
THE VICTORY PORTFOLIOS
And
KEY ASSET MANAGEMENT INC.
EXPENSE LIMITATION AGREEMENT, effective as of February 27, 2001 by and
between The Victory Portfolios (the "Trust") and Key Asset Management Inc.
("KAM"), on behalf of each series of the Trust set forth in Schedule A attached
hereto (each a "Fund" and collectively, the "Funds.")
WHEREAS, the Trust is a business organized under the laws of the State
of Delaware, and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management company of the series type,
and each Fund is a series of the Trust; and
WHEREAS, the Trust and KAM have entered into an Investment Advisory
Agreement ("Advisory Agreement"), pursuant to which KAM provides investment
advisory services to each Fund listed in Schedule A, which may be amended from
time to time, for compensation based on the value of the average daily net
assets of each such Fund; and
WHEREAS, the Trust and KAM have determined that it is appropriate and
in the best interests of each Fund and its shareholders to maintain the expenses
of each Fund, and, therefore, have entered into this Expense Limitation
Agreement ("the "Agreement"), in order to maintain each Fund's expense ratios at
the levels specified in Schedule A attached hereto; and
NOW THEREFORE, the parties hereto agree that the Agreement provides as
follows:
1. Expense Limitation.
1.1 Applicable Expense Limit. To the extent that the aggregate expenses
incurred by a Fund in any fiscal year, including but not limited to investment
advisory fees of KAM (but excluding interest, taxes, brokerage commissions,
other expenditures that are capitalized in accordance with generally accepted
accounting principles, other extraordinary expenses not incurred in the ordinary
course of such Fund's business) ("Fund Operating Expenses"), exceed the
Operating Expense Limit, as defined in Section 1.2 below, such excess amount
(the "Excess Amount") shall be the liability of KAM.
1.2 Operating Expense Limit. The maximum Operating Expense Limit in any
year with respect to each Fund shall be the amount specified in Schedule A based
on a percentage of the average daily net assets of each Fund.
2. Term and Termination of Agreement.
2.1 This Agreement with respect to the Funds shall continue in effect
until the respective dates of termination set forth in the Attachment.
3. Miscellaneous.
3.1 Captions. The captions in this Agreement are included for
convenience of reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
3.2 Interpretation. Nothing herein contained shall be deemed to require
the Trust or the Funds to take any action contrary to the Trust's Trust
Instrument or by-laws, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the
Trust's Board of Trustees of its responsibility for and control of the conduct
of the affairs of the Trust or the Funds.
3.3 Definitions. Any question of interpretation of any term or
provision of this Agreement, including but not limited to the investment
advisory fee, the computations of net asset values, and the allocation of
expenses, having a counterpart in or otherwise derived from the terms and
provisions of the Advisory Agreement or the 1940 Act, shall have the same
meaning as and be resolved by reference to such Advisory Agreement or the 1940
Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
THE VICTORY PORTFOLIOS
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
Xxxxx Xxxxxxxx
KEY ASSET MANAGEMENT INC.
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxx
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SCHEDULE A
OPERATING EXPENSE LIMITS
This Agreement relates to the following as of February 27, 2001
Name of Fund and Class Maximum Operating Date of Termination
Expense Limit
Balanced - Class G 2.00% February 28, 2011*
Convertible Securities Fund - Class G 2.00% February 28, 2011*
Intermediate Income Fund - Class G 1.90% February 28, 2011*
Investment Quality Bond Fund Class G 1.90% February 28, 2011
LifeChoice Conservative Investor Fund 0.20% February 28, 2002
LifeChoice Growth Investor Fund 0.20 February 28, 2002
LifeChoice Moderate Investor Fund 0.20 February 28, 2002
Nasdaq 100 - Class A 0.60% February 28, 2002
Nasdaq 100 - Class G 0.80% February 28, 2002
National Municipal Bond Fund Class G 1.90% February 28, 2011
New York Tax-Free Fund Class G 1.90% February 28, 2011
Real Estate Investment Fund - Class G 2.00% February 28, 2011*
Special Value Fund - Class G 2.00% February 28, 2011
Value Fund - Class G 2.00% February 28, 2011*
* The Adviser intends to voluntarily limit expenses to lower levels so that Fund
expense levels will be competitive.
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