AMENDMENT
AMENDMENT made as of April 1, 2001 to that certain Custody Agreement
dated as of October 14, 1999 between Key Trust Company of Ohio, National
Association, now, by merger KeyBank National Association ("KeyBank") and The
Bank of New York ("BNY") (such Custody Agreement hereinafter referred to as
the "Custody Agreement").
WHEREAS, KeyBank serves as custodian for the Victory Fund (the "Fund"),
an investment company registered under the Investment Company Act of 1940, as
amended (the "Act");
WHEREAS, BNY serves under the Custody Agreement as a subcustodian for
certain "foreign assets" (as defined in Rule 17f-5 under the Act) of the Fund;
WHEREAS, KeyBank desires, on the terms and conditions hereinafter
contained, to delegate to BNY as its agent the duties of a "Primary
Custodian" under Rule 17f-7 under the Act; and
WHEREAS, BNY is willing to act as such agent on such terms and
conditions;
NOW, THEREFORE, KeyBank and BNY hereby agree as follows:
1. The following new Article is hereby added to the Custody Agreement;
FOREIGN DEPOSITORIES
1. As used in this Article, the term "Foreign Depository" shall mean (a)
Euroclear, (b) Clearstream Banking, societe anonyme, (c) each Eligible
Securities Depositary as defined in Rule 17f-7 under the Investment Company
Act of 1940, as amended, identified to KeyBank from time to time, and (d) the
respective successors and nominees of the foregoing.
2. Notweighstanding any other provision in this Agreement, KeyBank
hereby represents and warrants to BNY that the Fund has represented and
warranted to KeyBank, with the understanding and intention that BNY as agent
would rely on such representations and warranties, and which representations
and warranties shall be continuing and shall be deemed to be reaffirmed by the
Fund upon any delivery of a Certificate, or any giving of Oral Instructions,
Instructions, or Written Instruction, as the case may be, by KeyBank to BNY,
that the Fund or its investment adviser has determined that the custody
arrangements of each Foreign Depository provide reasonable safeguards against
the custody risks associated with maintaining assets with such Foreign
Depository within the meaning of Rule 17f-7 under the Investment Company Act
of 1940, as amended.
3. With respect to each Foreign Depository, BNY shall exercise
reasonable care, prudence, and diligence (i) to provide KeyBank with an
analysis of the custody risks associated with maintaining assets with the
Foreign Depository, and (ii) to
monitor such custody risks on a continuing basis and promptly notify KeyBank
of any material change in such risks. KeyBank acknowledges and agrees and
represents and warrants that the Fund has acknowledged and agreed, that such
analysis and monitoring by BNY shall be made on the basis of, and limited by,
information gathered from Subcustodians, trade associations of which BNY is a
member, or through publicly available information otherwise obtained by BNY,
and shall not include any evaluation of Country Risks. Subject to the
foregoing, BNY shall endeavor, first, to consider among other things where
appropriate: the Foreign Depository's expertise and market reputation; the
quality of the Foreign Depository's services; the Foreign Depository's
financial strength; any insurance or indemnification arrangements maintained
by the Foreign Depository; the extent and quality of regulation and
independent examination of the Foreign Depository; the Foreign Depository's
standing in published ratings; the Foreign Depository's internal controls and
other procedures for safeguarding investments; and any legal protection
related to the Foreign Depository and the performance of its services, and,
second, to consider any other relevant factors. As used herein the term
"Country Risks" shall mean with respect to any Foreign Depository: (a) the
financial infrastructure of the country in which it is organized, (b) such
country's prevailing settlement practices, (c) nationalization, expropriation
or other governmental actions, (d) such country's regulation of the banking or
securities industry, (e) currency controls, restriction, devaluations or
fluctuations, and (f) market conditions which affect the order by execution of
securities transactions or affect the value of securities.
2. This Amendment may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts, shall,
together, constitute only one amendment.
IN WITNESS WHEREOF, KeyBank and BNY have caused this Amendment to be
executed by their respective officers, thereunto duly authorized, as of the
day and year first above written.
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: Vice President
Tax Identification No. 00-0000000
THE BANK OF NEW YORK
By: /s/ Xxxxx Xxxxx
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Title: Xxxxx Xxxxx
Vice President
