SUB-ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of the 1st day of April, 2002 by and between
BISYS FUND SERVICES OHIO, INC. ("BISYS"), an Ohio corporation having its
principal office at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx, and VICTORY CAPITAL
MANAGEMENT, INC. (the "Service Company"), a New York corporation having its
principal place of business at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000.
WHEREAS, BISYS has entered into Administration Agreements dated April 1,
2002 (collectively, the "Administration Agreement"), with each of The Victory
Portfolios and The Victory Variable Insurance Funds (on behalf of each of the
Portfolios (as defined below), individually and not jointly), each a Delaware
business trust (collectively, the "Company") registered with the Securities and
Exchange Commission (the "Commission") as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
concerning the provision of various administration services for the Company and
its investment portfolios (individually referred to herein as a "Portfolio" and
collectively as the "Portfolios");
WHEREAS, BISYS desires to retain the Service Company to assist it in
performing certain administration services for the Company and the Portfolios;
and
WHEREAS, the Service Company is willing to perform such services, and
BISYS is willing to retain the Service Company, on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, BISYS and the Service Company agree as follows:
1. Retention of the Service Company.
BISYS hereby appoints the Service Company, subject to the
supervision, direction and control of the Company's Board of Trustees, to
furnish the Company and its Portfolios with the services described in Schedule A
hereto (the "Services").
2. Allocation of Charges and Expenses.
(A) The Service Company. The Service Company shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
the Services. The Service Company shall also provide the items which it is
obligated to provide under this Agreement, and shall pay all compensation, if
any, of officers of the Company as well as all Trustees of the Company who are
affiliated persons of the Service Company or any affiliated company of the
Service Company.
(B) BISYS. BISYS acknowledges that it will continue to perform all
services required to be performed by it as the Administrator under the
Administration Agreement, except those
services as are required to be performed by the Service Company hereunder,
including the Services. The parties agree and acknowledge that pursuant to the
Administration Agreement, the Company has undertaken to pay or cause to be paid
all other expenses of the Company not otherwise allocated to BISYS as the
Administrator under the Administration Agreement, including, without limitation,
organization costs, taxes, expenses for legal and auditing services, the
expenses of preparing (including typesetting), printing and mailing reports,
prospectuses, statements of additional information, proxy solicitation material
and notices to existing shareholders, all expenses incurred in connection with
issuing and redeeming shares, the costs of custodial services, the cost of
initial and ongoing registration of the shares under Federal and state
securities laws, fees and out-of-pocket expenses of Trustees who are not
affiliated persons of BISYS or the investment adviser to the Company or any
affiliated corporation of BISYS or such investment adviser, insurance, interest,
brokerage costs, litigation and other extraordinary or nonrecurring expenses,
and all fees and charges of investment advisers to the Company.
3. Compensation of the Service Company.
BISYS shall pay the Service Company, for the services to be provided
by the Service Company under this Agreement, a fee calculated at the annual rate
of up to three one-hundredths of one percent (.03%) of the assets of the
Company. Such amounts shall be paid by BISYS from amounts it receives from the
Company pursuant to the Administration Agreement.
4. Limitation of Liability of the Service Company and BISYS.
The duties of the Service Company shall be confined to those
expressly set forth herein, and no implied duties are assumed by or may be
asserted against it hereunder. The Service Company shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable law which
cannot be waived or modified hereby. (As used in this Section 4, the term "the
Service Company" shall include directors, officers, employees and other agents
of the Service Company as well as the Service Company itself, to the extent such
persons' conduct relates to the performance of then Services hereunder.) Any
officer, director, employee or agent of the Service Company who is or who
becomes an officer, Trustee, employee or agent of the Company shall be deemed,
when engaged in rendering the Services hereunder in such capacity, to be
rendering services directly to or for the Company, and shall not be deemed to be
acting as an officer, director, employee or agent or one under the control or
direction of BISYS.
So long as the Service Company acts in good faith and with due
diligence and without negligence, BISYS shall indemnify Service Company and hold
it harmless from and against any and all actions, suits and claims, whether
groundless or otherwise, and from and against any and
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all losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of the Service Company's actions taken or
nonactions with respect to the performance of services hereunder; provided,
however, that BISYS's obligation under the foregoing indemnity and hold harmless
shall apply only to the extent that BISYS is in fact fully indemnified and held
harmless by the Company under the Administration Agreement for any and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
incurred by BISYS (including, without limitation, any indemnification amounts
payable to the Service Company), and shall be due only if, as and when such
amounts payable to the Service Company by BISYS under this paragraph are in fact
received by BISYS from the Company.
The Service Company shall indemnify BISYS and hold it harmless from
and against any and all actions, suits and claims, whether groundless or
otherwise, and from and against any and all losses, damages, costs, charges,
reasonable counsel fees and disbursements, payments, expenses and liabilities
(including reasonable investigation expenses) arising directly or indirectly out
of the Service Company's appointment as sub-administrator, and any actions and
omissions taken by thereunder involving its negligence, willful misfeasance or
reckless disregard of its obligations under this Agreement.
5. Activities of the Service Company.
The services of Service Company to be rendered hereunder are not to
be deemed to be exclusive. The Service Company is free to render such services
to others and to have other businesses and interests. It is understood that
Trustees, officers, employees and shareholders of the Company are or may be or
become interested in the Service Company, as officers, employees or otherwise
and that directors, officers and employees of the Service Company and its
counsel are or may be or become similarly interested in the Company, and that
the Service Company may be or become interested in the Company as a shareholder
or otherwise.
6. Duration of this Agreement.
This Agreement shall become effective upon the date first upon
written, and shall continue in effect during the term of the Administration
Agreement, including any renewals thereof. This Agreement shall terminate
automatically upon the termination of the Administration Agreement. The Service
Company expressly agrees and acknowledges that the exercise by BISYS of any
rights it may have under the Administration Agreement, including, in particular,
any rights BISYS may have from time to time to terminate the Administration
Agreement, shall not be restricted or limited in any manner by this Agreement
and shall not give rise to any claim by the Service Company hereunder.
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In addition to the foregoing, this Agreement may be terminated by
either party (a) for any reason by providing notice of such termination at least
sixty (60) days prior to the date upon which termination shall become effective
or (b) for "cause." For these purposes, "cause" shall mean (a) a material breach
of this Agreement that has not been remedied for 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 failure on
the part of the Company to pay an amount that is due and payable to BISYS or any
of its affiliates under any agreement to which the Company is a party within
sixty (60) days following the due date. For purposes of this definition of
"cause," a material breach shall include, but not be limited to, any failure on
the part of BISYS to pay the fees due and payable to the Service Company
pursuant to Section 3(A) hereunder within sixty (60) days following the due
date.
Upon termination of this Agreement, the Service Company shall
provide BISYS and/or the Company with reasonable access to any of the Company's
documents or records remaining in its possession.
7. Assignment.
This Agreement shall not be assignable by either party without the
written consent of the other party. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
8. Amendments.
No provision of this Agreement may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the parties hereto.
9. Certain Records.
The Service Company shall maintain customary records in connection
with its duties as specified in this Agreement. Any records required to be
maintained and preserved pursuant to Rules 31a-1 and 31a-2 under the Investment
Company Act of 1940, as amended (the "1940 Act") which are prepared or
maintained by the Service Company shall be the property of the Company and will
be made available to or surrendered promptly to BISYS upon its request or to the
Company upon its request.
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In case of any request or demand for the inspection of such records
by another party, the Service Company shall notify BISYS and follow BISYS's
instructions as to permitting or refusing such inspection; provided that the
Service Company may exhibit such records to any person in any case where it is
advised by counsel to the Company that the Company may be held liable for
failure of the Service Company to do so, or the Service Company could be held in
contempt for failure to do so.
10. Definitions of Certain Terms.
The terms "interested person" and "affiliated person," when used in
this Agreement, shall have the respective meanings specified in the 1940 Act and
the rules and regulations thereunder, subject to such exemptions as may be
granted by the Commission.
11. Notice.
Any notice required or permitted to be given by either party to the
other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
following address: if to BISYS, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000,
Attention: Xxxxxxx X. Xxxxx facsimile number (000) 000-0000; and if to the
Service Company, at the address set forth at the beginning of this Agreement; or
at such other address as such party may from time to time specify in writing to
the other party pursuant to this Section.
12. Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of Ohio, subject to any applicable provisions of the 1940 Act.
13. Multiple Originals.
This Agreement may be executed in two or more counterparts, each of
which when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
14. Confidentiality/Privacy.
The Service Company agrees on behalf of itself and its employees to
treat confidentially and as the proprietary information of the Company, all
records and other information relative to the Company and prior, present or
potential shareholders, and not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
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except, after prior notification to and approval in writing by BISYS or the
Company, which approval shall not be unreasonably withheld.
The Service Company acknowledges that nonpublic personal financial
information relating to consumers or customers of the Company provided by, or at
the direction of the Company to BISYS, or collected or retained by BISYS to
perform its duties as administrator of the Funds shall be considered
confidential information. Service Company shall not give, sell or in any way
transfer such confidential information to any person or entity, except at the
direction of BISYS or as required or permitted by law. Service Company shall
have in place and maintain physical, electronic and procedural safeguards
reasonably designed to protect the security, confidentiality and integrity of,
and to prevent unauthorized access to or use of records and information relating
to consumers or customers of the Company. The Service Company acknowledges and
agrees to comply with the Company's Statement of its privacy policies and
practices as required by Securities and Exchange Commission Regulation S-P.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
--------------------------
Title:
-----------------------
VICTORY CAPITAL MANAGEMENT, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Senior Managing Director
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SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND
VICTORY CAPITAL MANAGEMENT, INC.
SERVICES
The Service Company will perform the following duties:
(a) assist the Company in the supervision of all aspects of the operations
of the Portfolios except those performed by the investment adviser for the
Portfolios under its Investment Advisory Agreement;
(b) maintain office facilities (which may be in the office of the Service
Company or an affiliate);
(c) furnish statistical and research data, clerical and internal
compliance services relating to legal matters, except for those services
provided pursuant to the terms of the Fund Accounting Agreement;
(d) assist BISYS in the preparation of the periodic reports to the
Securities and Exchange Commission on Form N-SAR or any replacement forms
thereto;
(e) assist BISYS in compiling data for (after review by the Company's
auditors) the Portfolios' federal and state tax returns and required tax filings
other than those required to be made by the Company's Custodian and Transfer
Agent;
(f) assist BISYS in preparing and filing compliance filings pursuant to
state securities laws with the advise of the Company's counsel and coordinate
with the transfer agent to monitor the sale of the Portfolios' shares;
(g) assist BISYS in the preparation, mailing and filing of the Company's
Annual and Semi-Annual Reports to Shareholders and its Registration Statements;
(h) assist BISYS in preparing and filing timely Notices to the Securities
and Exchange Commission required pursuant to Rule 24f-2 under the Investment
Company Act
of 1940 (the "1940 Act");
(i) assist BISYS in preparing and filing with the Securities and Exchange
Commission all Registration Statements on Form N-1A and all amendments thereto
with the advice of the Company's counsel;
(j) assist BISYS in preparing and filing with the Securities and Exchange
Commission Proxy Statements and related documents with the advice of the
Company's counsel and coordinate the distribution of such documents; and
(k) provide Trustee Board meeting support, including assisting in the
preparation of documents related thereto.
The Service Company will keep and maintain all books and records relating
to its services in accordance with Rule 31a-1 under the 1940 Act.
