ADMINISTRATION AGREEMENT
This Administration Agreement is made as of this 1st day of October,
1997 between THE VICTORY PORTFOLIOS, a Delaware business trust (herein called
the "Trust"), and BISYS Fund Services Limited Partnership, an Ohio limited
partnership (herein called "BISYS").
WHEREAS, the Trust is an open-end, management investment company
registered under the Investment Company Act of 1940, as amended, and consisting
of the investment portfolios set forth on Schedule I hereto, as such Schedule
may be revised from time to time (individually, a "Fund" and collectively, the
"Funds");
WHEREAS, the Trust offers for sale shares of beneficial interest
without par value of the Funds (herein collectively called "Shares"); and
WHEREAS, the Trust desires to retain BISYS as its Administrator to
provide it with certain administrative services with respect to each of the
Funds and their respective Shares, and BISYS is willing to render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto agree as follows:
I. DELIVERY OF DOCUMENTS
The Trust has delivered to BISYS copies of each of the following
documents and will deliver to it all future amendments and supplements thereto,
if any:
(a) The Trust's Certificate of Trust and all amendments
thereto (such Certificate of Trust, as presently in effect and as it
shall from time to time be amended, herein called the "Trust's
Certificate");
(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(s) 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") relating to the Shares and any
further amendment thereto;
(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 Trust with respect to the Funds (such prospectuses and statements
of additional information, as presently in effect and as they shall
from time to time be amended and supplemented, herein called
individually the "Prospectus" and collectively the "Prospectuses").
II. ADMINISTRATION
1. APPOINTMENT OF ADMINISTRATOR. The Trust hereby appoints BISYS as its
Administrator for each of the Funds on the terms and for the period set forth in
this Agreement and BISYS hereby accepts such appointment and agrees to perform
the services and duties set forth in this Section II for the compensation
provided in this Section II. The Trust understands that BISYS now acts and will
continue to act as administrator of various investment companies, and the Trust
has no objection to BISYS' so acting. In addition, it is understood that the
persons employed by BISYS to assist in the performance of its duties hereunder,
will not devote their full time to such services and nothing herein contained
shall be deemed to limit or restrict the right of BISYS or any affiliate of
BISYS to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
2. SERVICES AND DUTIES.
(a) As Administrator, and subject to the supervision and
control of the Trust's Board of Trustees, BISYS will provide
facilities, equipment, statistical and research data, clerical
services, internal compliance services relating to legal matters, and
personnel to carry out all administrative services required for
operation of the business and affairs of the Trust, other than those
investment advisory functions which are to be performed by the Trust's
investment advisers, the services of BISYS as Distributor pursuant to
the Distribution Agreement, those services to be performed by the
Trust's custodian, transfer agent and fund accounting agent, and those
services normally performed by the Trust's counsel and auditors. BISYS'
responsibilities include without limitation the following services:
(1) Providing a facility to receive purchase and
redemption orders via toll-free IN-XXXXX telephone lines or
via electronic transmission;
(2) Providing for the preparing, supervising and
mailing of confirmations for wire, telephone and electronic
purchase and redemption orders;
(3) Providing and supervising the operation of an
automated data processing system to process purchase and
redemption orders received by BISYS (BISYS
2
assumes responsibility for the accuracy of the data
transmitted for processing or storage);
(4) Overseeing the performance of the Trust's
custodian and transfer agent;
(5) Making available information concerning each Fund
to its shareholders; distributing written communications to
each Fund's shareholders of record such as periodic listings
of each Fund's securities, annual and semi-annual reports, and
Prospectuses and supplements thereto; and handling shareholder
problems and calls relating to administrative matters; and
(6) Providing and supervising the services of
employees whose principal responsibility and function shall be
to preserve and strengthen each Fund's relationships with its
shareholders.
(b) BISYS shall assure that persons are available to transmit
wire, telephone or electronic redemption requests to the Trust's
transfer agent as promptly as practicable.
(c) BISYS shall assure that persons are available to transmit
wire, telephone or electronic orders accepted for the purchase of
Shares to the Trust's transfer agent as promptly as practicable.
(d) BISYS shall participate in the periodic updating of the
Prospectuses and shall coordinate (i) the filing, printing and
dissemination of reports to each Fund's shareholders and the
Commission, including but not limited to annual reports and semi-annual
reports on Form N-SAR and notices pursuant to Rule 24f-2, (ii) the
preparation, filing, printing and dissemination of proxy materials, and
(iii) the preparation and filing of post-effective amendments to the
Trust's Registration Statement on Form N-1A relating to the updating of
financial information and other routine matters.
(e) BISYS shall pay all costs and expenses of maintaining the
offices of the Trust, wherever located, and shall arrange for payment
by the Trust of all expenses payable by the Trust.
(f) BISYS, after consultation with legal counsel for the
Trust, shall determine the jurisdictions in which the Shares shall be
registered or qualified for sale and, in connection therewith, shall be
responsible for the maintenance of the registration or qualification of
the Shares for sale under the securities laws of any state. Payment of
share registration fees and any fees for qualifying or continuing the
qualification of the Funds shall be made by the Funds.
3
(g) BISYS shall provide the services of certain persons who
may be appointed as officers of the Trust by the Trust's Board of
Trustees.
(h) BISYS shall oversee the maintenance by the Trust's
custodian and transfer agent of the books and records required under
the 1940 Act in connection with the performance of the Trust's
agreements with such entities, and shall maintain, or provide for the
maintenance of, such other books and records (other than those required
to be maintained by the Trust's investment advisers and fund accounting
agent) as may be required by law or may be required for the proper
operation of the business and affairs of the Trust and each Fund. In
compliance with the requirements of Rule 31a-3 under the 1940 Act,
BISYS agrees that all such books and records which it maintains, or is
responsible for maintaining, for the Funds are the property of the
Trust and further agrees to surrender promptly to the Trust any of such
books and records upon the Trust's request. BISYS further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
said books and records required to be maintained by Rule 31a-1 under
said Act.
(i) BISYS shall coordinate the preparation of the Funds'
federal, state and local income tax returns.
(j) BISYS shall prepare such other reports relating to the
business and affairs of the Trust and each Fund (not otherwise
appropriately prepared by the Trust's investment adviser, transfer
agent, fund accounting agent or the Trust's counsel or auditors) as the
officers and Trustees of the Trust may from time to time reasonably
request in connection with the performance of their duties.
(k) In performing its duties as Administrator of the Trust,
BISYS will act in conformity with the Trust's Certificate, 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 1940 Act and all other applicable federal or state
laws and regulations.
3. SUBCONTRACTORS. It is understood that BISYS may from time to time
employ or associate with itself such person or persons reasonably acceptable to
the Trust as BISYS may believe to be particularly fitted to assist in the
performance of this Agreement; provided, however, that the compensation of such
persons shall be paid by BISYS and that BISYS shall be as fully responsible to
the Trust for the acts and omissions of any subcontractor as it is for its own
acts and omissions.
4. EXPENSES ASSUMED AS ADMINISTRATOR. Except as otherwise stated in
this subsection 4, BISYS shall pay all expenses incurred by it in performing its
services and duties as Administrator, including the cost of providing office
facilities, equipment and personnel related to such services and duties. Other
expenses incurred in the operation of the Trust (other than those borne by the
Trust's investment adviser) including taxes, interest, brokerage fees and
commissions, if any, fees of trustees who are not officers, directors, partners,
employees or holders of 5 percent or more of the
4
outstanding voting securities of the Trust's investment advisers or BISYS or any
of their affiliates, Securities and Exchange Commission fees and state blue sky
registration or qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, fund accounting agents' fees,
fidelity bond and trustees' and officers' errors and omissions insurance
premiums, outside auditing and legal expenses, costs of maintaining corporate
existence, costs attributable to shareholder services, including without
limitation telephone and personnel expenses, costs of preparing and printing
Prospectuses for regulatory purposes and for distribution to existing
shareholders, costs of shareholders' reports and Trust meetings and any
extraordinary expenses will be borne by the Trust.
5. COMPENSATION. For the services provided and the expenses assumed as
Administrator pursuant to this Article II, the Trust will pay BISYS a fee,
computed daily and payable monthly, at the annual rate set forth in Schedule II
hereto. Such fee as is attributable to each Fund shall be a separate (and not
joint or joint and several) obligation of each such Fund. No individual Fund
shall have any responsibility for any obligation, if any, with respect to any
other Fund arising out of this Agreement.
III. CONFIDENTIALITY
BISYS will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and the Funds and
their prior or present shareholders or those persons or entities who respond to
BISYS' inquiries concerning investment in the Trust, and except as provided
below, will not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, or the performance of
its responsibilities and duties with regard to any other investment portfolio
which may be added to the Trust in the future. Any other use by BISYS 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) BISYS may be exposed to
civil or criminal contempt proceedings for failure to divulge such information;
(ii) BISYS is requested to divulge such information by duly constituted
authorities; or (iii) BISYS is so requested by the Trust.
IV. LIMITATION OF LIABILITY
BISYS shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust 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 its
reckless disregard of its obligations and duties under this Agreement. Any
person, even though also an officer, director, partner, employee or agent of
BISYS, who may be or become an officer, trustee, employee or agent of the Trust,
shall be deemed, when rendering services to the Trust, or acting on any business
of the Trust (other than services or business in connection with BISYS' duties
hereunder) to be rendering such services to or acting solely for the Trust and
not as an officer,
5
director, partner, employee or agent or one under the control or direction of
BISYS even though paid by BISYS.
V. 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
September 30, 1999. Thereafter, if not terminated, this Agreement shall continue
automatically as to a particular Fund for successive terms of two years,
provided that such continuance is specifically approved (a) by a vote of 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, 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 such Fund. This Agreement may be terminated
without penalty (i) by provision of a notice of nonrenewal in the manner set
forth below, (ii) by mutual agreement of the parties or (iii) for "cause," as
defined below, upon the provision of 60 days advance written notice by the party
alleging cause. Written notice of nonrenewal must be provided at least 60 days
prior to the end of the then-current term.
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 0000 Xxx) of BISYS or of Key Asset Management Inc., BISYS may be
replaced as administrator for the Trust prior to the expiration of the initial
two-year term or any subsequent two-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.
Compensation due BISYS and unpaid by the Trust upon termination of this
Agreement shall be immediately due and payable upon and notwithstanding such
termination. BISYS shall be entitled to collect from the Trust in addition to
the compensation described in Schedule II hereto, the amount of all its cash
disbursements for services in connection with its activities in effecting such
6
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.
VI. AMENDMENT OF THIS AGREEMENT
No provisions of this Agreement may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the party against whom
an enforcement of the change, waiver, discharge or termination is sought.
VII. NOTICES
Notices of any kind to be given to the Trust hereunder by BISYS 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 & 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 BISYS.
Notices of any kind to be given to BISYS hereunder by the Trust shall be in
writing and shall be duly given if mailed or delivered to BISYS at 0000 Xxxxxxx
Xxxx, Xxxxxxxx, Xxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq., or at such
other address or to such individual as BISYS shall specify to the Trust.
VIII. 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 Article V 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 Ohio law; provided,
however, that nothing herein shall be construed in a manner inconsistent with
the 1940 Act 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 a
Certificate of Trust filed on December 21, 1995 at the office of the Secretary
of State of the State of Delaware 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
7
on behalf thereof by any of its 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.
3. ASSIGNMENT. This Agreement and the rights and duties hereunder shall
not be assignable by either party without the written consent of the other
party. This paragraph shall not limit or in any way affect BISYS' right to
appoint a Sub-Administrator pursuant to Article II, paragraph 3 hereof.
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/ J. Xxxxx Xxxxx
-------------------------------------
Attest: /s/ Xxxxxx X. Line
-----------------------
BISYS FUND SERVICES LIMITED
PARTNERSHIP, d/b/a
BISYS FUND SERVICES
By: BISYS FUND SERVICES, INC.
General Partner
Attest: /s/ Xxxxxx X. Line
-----------------------
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Senior Vice President
8
SCHEDULE I
Amended as of October 1, 1997
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 Investor/Select
17. The Victory Value Fund A
18. The Victory Financial Reserves Fund A
19. The Victory Fund for Income A
20. The Victory Institutional Money Market Fund Investor/Select
21. The Victory National Municipal Bond Fund A/B
22. The Victory New York Tax-Free Fund A/B
23. The Victory Ohio Municipal Money Market Fund A
24. The Victory Lakefront Fund A
25. The Victory Real Estate Investment Fund A
SCHEDULE I
Amended as of March 2, 1998
--------------------------------------------------------------------------------
1. Victory Balanced Fund 26. Victory Federal Money Market Fund
Class A Shares Investor Shares
Class B Shares Select Shares
Key Shares 27. Victory Convertible Securities Fund
2. Victory Diversified Stock Fund 28. Victory LifeChoice Conservative
Class A Shares Investor Fund
Class B Shares 29. Victory LifeChoice Growth
3. Victory Government Mortgage Fund Investor Fund
4. Victory Growth Fund 30. Victory LifeChoice Moderate
5. Victory Financial Reserves Fund Investor Fund
6. Victory Fund for Income
7. Victory Institutional Money Market Fund
Investor Shares
Select Shares
8. Victory Intermediate Income Fund
9. Xxxxxxx Xxxxxxxxxxxxx Growth Fund
Class A Shares
Class B Shares
10. Victory Investment Quality Bond Fund
11. Victory Lakefront Fund
12. Victory Limited Term Income Fund
13. Victory National Municipal Bond Fund
Class A Shares
Class B Shares
14. Victory New York Tax-Free Fund
Class A Shares
Class B Shares
15. Victory Ohio Municipal Bond Fund
16. Victory Ohio Municipal Money Market Fund
17. Victory Ohio Regional Stock Fund
Class A Shares
Class B Shares
18. Victory Prime Obligations Fund
19. Victory Real Estate Investment Fund
20. Victory Special Growth Fund
21. Victory Special Value Fund
Class A Shares
Class B Shares
22. Victory Stock Index Fund
23. Victory Tax-Free Money Market Fund
24. Victory U.S. Government Obligations Fund
Investor Shares
Select Shares
25. Victory Value Fund
--------------------------------------------------------------------------------
SCHEDULE I
Amended as of May 29, 1998
1. Victory Balanced Fund 26.Victory Federal Money Market Fund
Class A Shares Investor Shares
Class B Shares Select Shares
2. Victory Diversified Stock Fund 27.Victory Convertible Securities Fund
Class A Shares 28.Victory LifeChoice Conservative Investor Fund
Class B Shares 29.Victory LifeChoice Growth Investor Fund
3. Victory Government Mortgage Fund 30.Victory LifeChoice Moderate Investor Fund
4. Victory Growth Fund 31.Victory Maine Municipal Bond Fund (Intermediate)
5. Victory Financial Reserves Fund 32.Victory Maine Municipal Bond Fund (Short-Intermediate)
6. Victory Fund for Income 33.Victory Michigan Municipal Bond Fund
7. Victory Institutional Money Market Fund 34.Victory Equity Income Fund
Investor Shares 35.Victory National Municipal Bond Fund (Long)
Select Shares 36.Victory National Municipal Bond Fund
8. Victory Intermediate Income Fund (Short-Intermediate)
9. Xxxxxxx Xxxxxxxxxxxxx Growth Fund
Class A Shares
Class B Shares
10.Victory Investment Quality Bond Fund
11.Victory Lakefront Fund
12.Victory Limited Term Income Fund
13.Victory National Municipal Bond Fund
Class A Shares
Class B Shares
14.Victory New York Tax-Free Fund
Class A Shares
Class B Shares
15.Victory Ohio Municipal Bond Fund
16.Victory Ohio Municipal Money Market
Fund
17.Victory Ohio Regional Stock Fund
Class A Shares
Class B Shares
18.Victory Prime Obligations Fund
19.Victory Real Estate Investment Fund
20.Victory Special Growth Fund
21.Victory Special Value Fund
Class A Shares
Class B Shares
22.Victory Stock Index Fund
23.Victory Tax-Free Money Market Fund
24.Victory U.S. Government Obligations Fund
Investor Shares
Select Shares
25.Victory Value Fund
SCHEDULE II
FEES
Pursuant to ARTICLE II, Section 5 of the Agreement, BISYS shall be
entitled to receive a fee based upon the annual rate set forth below:
Average Daily Net
Assets of each Fund Fee Amount
First $300 million Fifteen one-hundredths of one percent
(.15%) of such Fund's average daily
net assets
Next $300 million Twelve one-hundredths of one percent
(.12%) of such Fund's average daily
net assets
All assets exceeding $600 million Ten one-hundredths of one percent
(.10%) of such Fund's average daily
net assets
SCHEDULE II-B
FEES
Amended as of March 2, 1998
Pursuant to ARTICLE II, Section 5 of the Agreement, BISYS shall be
entitled to receive a fee based upon the annual rate set forth below for the
LifeChoice Funds only:
Fee Amount
----------
One-hundredths of one-percent (.01%) of each Fund's average
daily net assets or $12,000 per Fund per year, whichever is greater.
Such fee as is attributable to each Fund shall be a separate
(and not joint or joint and several) obligation of each such Fund. No
individual shall have any responsibility for any obligation, if any,
with respect to any other Fund arising out of this Agreement.
