ADMINISTRATION AGREEMENT
This Administration Agreement is made as of this 1st day of October 1999
between The Victory Portfolios, a Delaware business trust (herein called the
"Trust"), on behalf of each Fund listed on Schedule I, individually and not
jointly, and BISYS Fund Services Ohio, Inc., an Ohio corporation (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 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
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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.
(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
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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 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
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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, 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, 2001. 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 non-renewal 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
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days advance written notice by the party alleging cause. Written notice of
non-renewal 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
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 Key
Asset Management, Investment Products Group 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000, with a copy to Kramer, Levin, Naftalis & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxxx,
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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: Xxxxxxx X. Xxxxx,
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 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. References to a Fund. Every reference to a Fund will be deemed a
reference solely to the particular Fund (as set forth in Schedule A, as may be
amended from time to time). Under no circumstances shall the rights, obligations
or remedies with respect to a particular Fund constitute a right, obligation or
remedy applicable to any other Fund. In particular, and without otherwise
limiting the scope of this paragraph, BISYS shall not have any right to set off
claims of a Fund by applying property of any other Fund.
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4. 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.
5. Year 2000. BISYS represents that it has performed comprehensive tests
on the systems it utilizes to provide services to the Funds to simulate the
actual turning of the century. These tests were intended to identify any
operational issues caused by the century change at midnight December 31, 1999.
BIYS agrees to use all commercially reasonable efforts to implement all
necessary updates and changes for such systems, if any, to accommodate the turn
of the century. BISYS agrees to provide quarterly updates to the Funds on the
status of its Year 2000 readiness project and to make its personnel reasonably
available to address any questions or concerns.
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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/ Xxxxxx X. Xxxxxxxx
Attest: /s/ Xxxxx Xxxxxx
BISYS Fund Services Ohio, Inc.
Attest: /s/ Xxxx Xxxxx
By: /s/ J. Xxxxx Xxxxx
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Schedule I
to the
Administration Agreement
between
The Victory Portfolios
and
BISYS Fund Services Ohio, Inc.
Dated as of October 1, 1999
Name of Portfolio
-----------------
1. Victory Balanced Fund 21. Victory Maine Municipal Bond Fund
2. Victory Convertible Securities Fund (Intermediate)
3. Victory Diversified Stock Fund 22. Victory Maine Municipal Bond Fund
4. Victory Established Value Fund (Short-Intermediate)
5. Victory Equity Income Fund 23. Victory Michigan Municipal Bond Fund
6. Victory Federal Money Market Fund 24. Victory National Municipal Bond Fund
7. Victory Financial Reserves Fund 25. Victory National Municipal Bond Fund (Long)
8. Victory Fund for Income 26. Victory National Municipal Bond Fund
9. Victory Government Mortgage Fund (Short-Intermediate)
10. Victory Gradison Government Reserved Fund 27. Victory New York Tax-Free Fund
11. Victory Growth Fund 28. Victory Ohio Municipal Money Market Fund
12. Victory Institutional Money Market Fund 29. Victory Ohio Municipal Bond Fund
13. Victory Intermediate Income Fund 30. Victory Ohio Regional Stock Fund
14. Xxxxxxx Xxxxxxxxxxxxx Growth Fund 31. Victory Prime Obligations Fund
15. Victory Investment Quality Bond Fund 32. Victory Real Estate Investment Fund
16. Victory Lakefront Fund 33. Victory Small Company Opportunity Fund
17. Victory LifeChoice Conservative Investor Fund 34. Victory Special Value Fund
18. Victory LifeChoice Growth Investor Fund 35. Victory Stock Index Fund
19. Victory LifeChoice Moderate Investor Fund 36. Victory Tax-Free Money Market Fund
20. Victory Limited Term Income Fund 37. Victory U.S. Government Obligations Fund
38. Victory Value Fund
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SCHEDULE II
to the
Administration Agreement
between
The Victory Portfolios
and
BISYS Fund Services Ohio, Inc.
Dated as of October 1, 1999
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
