CASH MANAGEMENT AND RELATED SERVICES AGREEMENT
CASH MANAGEMENT AND RELATED SERVICES AGREEMENT, dated as of August 2, 2004
between The Victory Institutional Funds (the "Trust"), on behalf of each of its
series, individually and not jointly, listed on Schedule A hereto (as may be
amended from time to time) (each a "Fund", collectively the "Funds"), and The
Bank of New York (the "Bank").
W I T N E S S E T H :
That in consideration of the mutual agreements and covenants herein
contained, the Bank and each Fund hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, unless the context otherwise requires,
the following words shall have the meanings set forth below:
1. "Account" shall mean an account in the name of a Fund or such Fund's
transfer agent for receiving and disbursing money as provided in this Agreement.
2. "Account Available Balance" shall mean with respect to an Account for
any given day during a calendar month a positive or negative dollar amount equal
to (A) if such day is a Business Day, the Account Available Balance as of the
close of the last preceding Business Day plus a positive or negative dollar
amount equal to the difference, if any, between the Chargeable Credits with
respect to such day and such Account and the Chargeable Debits with respect to
such day and such Account, and (B) if such day is not a Business Day, the
Account Available Balance as of close of the last preceding Business Day, except
that both (A) and (B) shall be reduced by the United States Federal Reserve
reserve requirements then applicable to the Bank with respect to such Account.
The Account Available Balance of an Account shall be zero on the date
immediately preceding the first date on which an entry, consisting of either a
Chargeable Credit or Chargeable Debit, is first made to such Account hereunder.
3. "Authorized Person" shall mean either (A) any person duly authorized by
corporate resolutions of the board of directors or board of trustees of a Fund
(each, a "Board") to give Oral and/or Written Instructions on behalf of such
Fund, such persons to be designated in a certificate, substantially in the form
of Exhibit A, which contains a specimen signature of such person, or (B) any
person sending or transmitting any instruction or direction through an
Electronic Service.
4. "Business Day" shall mean any day on which the Federal Reserve Bank of
New York is open for business, except for any such day on which the Bank is
required by law or regulation to be closed, or elects to be closed.
5. "Calendar Month Earnings Credit" shall mean with respect to an Account
for any calendar month the dollar amount, whether positive or negative, equal to
the sum of the Gross Calendar Month Earnings Credit with respect to such Account
for such calendar month and the Monthly Overdraft Charges with respect to such
Account for such calendar month.
6. "Chargeable Credits" shall mean with respect to an Account for any
given day during a calendar month a positive amount of dollars equal to the sum,
if any, of (A) the aggregate dollar amount of Federal Funds credited to such
Account by the Bank in accordance with the then applicable availability schedule
of the Federal Reserve Bank of New York, and (B) the aggregate dollar amount of
Bank internal transfers of Federal Funds to such Account.
7. "Chargeable Debits" shall mean with respect to an Account for any given
day during a calendar month a negative dollar amount equal to the sum, if any,
of (A) the aggregate dollar amount of Federal Funds relating to such Account
charged against the Bank by the Federal Reserve Bank of New York on or as of
such day, and (B) the aggregate dollar amount of drafts drawn on such Account
which are deposited in the Bank by customers of the Bank on such day, or Bank
internal transfers from, or charges to, such Account.
8. "Daily Earnings" shall mean with respect to an Account for any day
during a calendar month a positive dollar amount equal to the product of (A) the
positive Account Available Balance, if any, of such Account for such day,
multiplied by (B) the Daily Earnings Rate for such day. The Daily Earnings with
respect to an Account for any day during a calendar month on which the Account
Available Balance of such Account is negative shall be zero.
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9. "Daily Earnings Rate" shall mean for any day during a calendar month
one three hundred and sixty-fifth of the 91 day U.S. Treasury Xxxx discount rate
of the Monday auction first preceding such day (whether or not such day is a
Monday, and whether or not such Monday auction was in the immediately prior
month), as such Monday auction 91 day U.S. Treasury Xxxx discount rate is
reported in The Wall Street Journal.
10. "Daily Overdraft Charges" shall mean with respect to an Account for
any day during any calendar month a negative dollar amount equal to the product,
if any, of (A) the negative Account Available Balances, if any, with respect to
such Account for such day during such calendar month, multiplied by (B) the
Overdraft Rate.
11. "Electronic Service" shall mean an electronic service and related
equipment as may be available to a Fund and constituted during the term of this
Agreement which, (A) disseminates electronically to A Fund information
concerning its Accounts and Omnibus Accounts hereunder, and/or (B) permits a
Fund to send to the Bank Written Instructions and in certain circumstances as
provided hereunder Oral Instructions to perform various banking activities,
including, without limitation, services marketed under the names The Bank of New
York Office Manager(R), CA$H-Register(R), Micro/CA$H-Register(TM), or
CA$H-Register Plus(R), as well as other services that the Bank may offer from
time to time.
12. "Federal Funds" shall mean immediately available same day funds.
13. "Gross Calendar Month Earnings Credit" shall mean with respect to an
Account for any calendar month a positive dollar amount equal to the aggregate
sum of the Daily Earnings of such Account for such calendar month.
14. "Monthly Overdraft Charges" shall mean with respect to an Account for
any calendar month a negative dollar amount equal to the aggregate sum of the
Daily Overdraft Charges with respect to such Account for such calendar month
which have not been previously paid to the Bank by the Fund to which such
Account relates.
15. "Omnibus Account" shall mean an account at the Bank for the benefit of
the Funds into which money (A) to be deposited into an Account is initially
credited pending its transfer to such Account pursuant to Article III hereof, or
(B) transferred from an Account pursuant to Article III is deposited pending its
disbursement pursuant to Article III.
16. "Oral Instructions" shall mean verbal instructions actually received
by the Bank from an Authorized Person or from a person reasonably believed by
the Bank to be an Authorized Person.
17. "Overdraft Rate" shall mean with respect to an Account for any
calendar day during any calendar month a rate equal to one three hundred and
sixtieth of the fed funds rate plus 1%.
18. "Shareholder" shall mean any record holder of any Shares, as
identified to the Bank from time to time pursuant to this Agreement.
19. "Shares" shall mean all or any part of each class of the shares of
capital stock, beneficial interest, or limited partnership interest of a Fund,
as the case may be, which are authorized and/or issued from time to time.
20. "Written Instructions" shall mean written instructions actually
received by the Bank from an Authorized Person or from a person reasonably
believed by the Bank to be an Authorized Person by letter, memorandum, telegram,
cable, telex, facsimile or through an Electronic Service.
ARTICLE II
APPOINTMENT OF BANK; REPRESENTATIONS AND WARRANTIES
1. Appointment; Establishment of Accounts. Each Fund hereby appoints the
Bank as its agent for the term of this Agreement to perform the cash management
services set forth herein and in Schedule I attached hereto and made a part
hereof (as such Schedule may be amended or supplemented from time to time by
mutual agreement) which are selected by the Funds from time to time. The Bank
hereby accepts appointment as such agent for each Fund and agrees to establish
and maintain one or more Accounts and/or Omnibus Accounts as the parties shall
determine are necessary to receive and disburse money as provided in this
Agreement.
2. Representations and Warranties. Each Fund hereby represents and
warrants only as to itself, and not jointly, to the Bank, which representations
and warranties shall be deemed to be continuing and to be reaffirmed upon
delivery to the Bank of any Oral or Written Instructions, that:
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(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and delivered by
the Fund in accordance with all requisite corporate action and constitutes a
valid and legally binding obligation of the Fund enforceable in accordance with
its terms, except to the extent such enforcement may be limited by general
equity principles or bankruptcy principles; and
(c) It is conducting its business in compliance with all applicable
laws and regulations, both state and federal, and has obtained all regulatory
licenses, approvals and consents necessary to carry on its business as now
conducted; there is no statute, regulation, rule, order or judgment binding on
it and no provision of its charter or by-laws, nor of any mortgage, indenture,
credit agreement or other contract binding on it or affecting its property which
would prohibit its execution or performance of this Agreement.
3. Board Resolutions. Each Fund shall provide the Bank with a certified
copy of a resolution of its Board appointing the Bank as its agent to act
hereunder and providing for the creation of such Fund's Account(s), the
utilization by such Fund of one or more Omnibus Accounts and the execution by
such Fund of this Agreement, it being understood that receipt of the same by the
Bank shall be a condition precedent to the Bank's establishing an Account for
such Fund or such Fund's utilization of an Omnibus Account.
ARTICLE III
CASH MANAGEMENT SERVICES
1. Receipt of Money. The Bank shall receive money for credit to an Account
only:
(i) by personal presentment of drafts by a Fund, but not by a
Shareholder of such Fund, at the branch or branches in Manhattan
identified from time to time by the Bank to such Fund, provided such
presentment is in accordance with the time frames specified by the
Bank to such Fund;
(ii) by mailing of drafts to a post office box designated by the Bank for
such purpose, provided such drafts are accompanied by a properly
completed investment stub;
(iii) by wire transfer to an account maintained at the Federal Reserve
Bank of New York as identified in writing by the Bank to a Fund;
(iv) by transfer to an account identified in writing by the Bank to a
Fund through the New York Automated Clearing House;
(v) by transfer from another Account maintained by such Fund with the
Bank under this Agreement;
(vi) by transfer from another account maintained by such Fund with the
Bank, including such Fund's custodian account under its Custody
Agreement with the Bank as Custodian; or
(vii) by transfer from any other account maintained with the Bank.
All money received by the Bank shall be credited upon receipt, but subject to
final payment and receipt by the Bank of immediately available funds, and
receipt by the Bank of such forms, documents and information as are required by
the Bank from time to time and received in the appropriate time frames. If an
Omnibus Account has been established for the Funds, such money shall be
initially credited to the Omnibus Account pending its allocation to, and deposit
in, an Account. The Bank shall be entitled to reverse any credits previously
made to a Fund's Account or an Omnibus Account where money is not finally
collected or where a credit to such account was in error.
2. Disbursement of Money. The Bank shall disburse money credited to an
Account only:
(i) pursuant to Written Instructions of such Fund transmitted through an
Electronic Service (except as otherwise provided in Article V,
Section 7 hereof), to transfer funds as directed by such Fund
(including transfers through the Federal Reserve Bank of New York
transfer wire and the New York Automated Clearing House);
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(ii) in payment of drafts drawn by an Authorized Person or Shareholder
(as appropriate for the particular Account), subject to the terms
hereof; or
(iii) in payment of charges to such Account representing amounts payable
to the Bank, and chargeable against such Account, as provided in
this Agreement.
The Bank shall be required to disburse money in accordance with the foregoing
only insofar as such money is immediately available and on deposit with the
Bank. If an Omnibus Account has been established for the Funds, such money shall
be credited to the Omnibus Account pending such disbursement. All instructions
directing the disbursement of money credited to an Account or Omnibus Account
under this Agreement (whether through an Electronic Service or by Oral
Instructions pursuant to Article V hereof) must identify an account to which
such money shall be transferred, and include all other information reasonably
required by the Bank from time to time. It is understood and agreed that with
respect to any such instructions, when instructed to credit or pay a party by
both name and a unique numeric or alpha-numeric identifier (e.g., ABA number or
account number), the Bank and any other financial institution participating in
the funds transfer may rely solely on the unique identifier, even if it
identifies a party different than the party named. Such reliance on a unique
identifier shall apply to beneficiaries named in such instructions as well as
any financial institution which is designated in such instruction to act as an
intermediary in a funds transfer.
3. Redemption Drafts; Shareholder Information. (a) Each Fund shall be
entitled to supply its Shareholders with redemption drafts, but only in a form
and substance agreed to by the Bank. The Bank agrees to give each Fund sixty
(60) days prior notice of any changes to the form or substance of redemption
drafts required by the Bank, provided that if such change is required by
applicable rules or procedures of the Federal Reserve or any clearinghouse
through which such drafts may be presented, the Bank may give less than sixty
(60) days prior notice of such change.
(b) Each Fund will promptly furnish to the Bank (i) the name, mailing
address and telephone number of each Shareholder of such Fund, and (ii) specimen
signatures for all individuals authorized to draw redemption drafts (whether on
their own behalf or on behalf of third parties). Each Fund will promptly advise
the Bank of individuals no longer authorized to draw redemption drafts, and
those individuals newly authorized. Such information shall be provided to the
Bank in a mutually agreed upon format.
4. Redemption Draft Returns. A Fund may give the Bank Oral or Written
Instructions from time to time to return unpaid redemption drafts of the Fund to
the presenting financial institution for any reason, and the Bank shall use
reasonable efforts to comply with such Oral or Written Instructions provided
that such compliance would not prejudice or impair any rights or privileges of
the Bank under prevailing draft return procedures and would not be contrary to
prevailing industry rules, procedures, customs or practices. Notwithstanding the
foregoing, or any other provision in this Agreement or Schedule I hereto, the
Bank (i) may return redemption drafts with unauthorized or missing signatures to
the presenting financial institution in accordance with prevailing banking
industry draft return procedures, and (ii) shall have no obligation to request
Oral or Written Instructions from a Fund with respect to any redemption drafts.
ARTICLE IV
ADVANCES, OVERDRAFTS OR INDEBTEDNESS
1. If the Bank in its sole discretion advances funds, or if there shall
arise for whatever reason an overdraft or other indebtedness in connection with
any Account or Omnibus Account, such advance, overdraft or indebtedness shall be
deemed a loan made by the Bank to the Fund to which the Account relates, or in
the case of an Omnibus Account, to which such advance, overdraft or indebtedness
relates, payable on demand and bearing interest from the date incurred at the
Overdraft Rate, such Overdraft Rate to be adjusted on the effective date of any
change in the fed funds rate constituting a part thereof. In the event of any
advance, overdraft or other indebtedness in connection with an Omnibus Account,
the Bank shall be furnished promptly (and in any event by 12:00 p.m. on the next
Business Day after such advance, overdraft or indebtedness) with Written
Instructions identifying each Fund to which such advance, overdraft or
indebtedness relates, and the amount allocable to such Fund(s).
2. Each Fund hereby agrees with respect to its Account(s), any Omnibus
Account(s) and any advances, overdrafts or other indebtedness that the Bank
shall have a continuing lien and security interest in and to any property at any
time held by it for the benefit of the Fund either hereunder or under such
Fund's Custody Agreement with the Bank, or in which the Fund may have an
interest which is then in the Bank's possession or control or in possession or
control of any third party acting in the Bank's behalf, including in its behalf
as Custodian under the Fund's Custody Agreement with the Bank. Each Fund
authorizes the Bank, in its sole discretion, at any time to charge any advance,
overdraft or indebtedness together with interest due thereon at the Overdraft
Rate against any balance of accounts standing to the Fund's credit on the books
of the Bank, including those books maintained by the Bank in its capacity as
Custodian for the Fund under its Custody Agreement with the Fund.
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3. Each Fund agrees that upon allocation of all advances, overdrafts or
indebtedness to its account pursuant to paragraph 1 above, its total borrowings
from all sources (including the Bank) shall be in conformity with the
requirements and limitations set forth in the Investment Company Act of 1940, as
amended, and the Fund's Prospectus. Each Fund shall promptly (and in any event
within one Business Day) notify the Bank in writing whenever it fails to comply
with any of the foregoing requirements.
ARTICLE V
ELECTRONIC SERVICE; CALL-BACK SECURITY PROCEDURE
1. Services Generally. Each Fund shall be permitted to utilize an
Electronic Service to obtain direct on-line access to its Accounts and Omnibus
Accounts. An Electronic Service shall permit each Fund at the times mutually
agreed upon by the Bank and such Fund to receive reports, make inquiries,
instruct the Bank to disburse money in accordance with Article III, and perform
such other functions as are more fully set forth in Schedule I hereto.
2. Permitted Use; Proprietary Information; Equipment. (a) Upon delivery to
a Fund of software enabling such Fund to utilize an Electronic Service (the
"Software"), the Bank grants to the Fund a personal, nontransferable and
nonexclusive license to use the Software solely for the purpose of transmitting
Written Instructions, receiving reports, making inquiries or otherwise
communicating with the Bank in connection with the Account(s) or the Omnibus
Account. Each Fund shall use the Software solely for its own internal and proper
business purposes and not in the operation of a service bureau. Except as set
forth herein, no license or right of any kind is granted to any Fund with
respect to the Software. Each Fund acknowledges that the Bank and its suppliers
retain and have title and exclusive proprietary rights to the Software,
including any trade secrets or other ideas, concepts, know-how, methodologies,
or information incorporated therein and the exclusive rights to any copyrights,
trademarks and patents (including registrations and applications for
registration of either), or other statutory or legal protections available in
respect thereof. Each Fund further acknowledges that all or a part of the
Software may be copyrighted or trademarked (or a registration or claim made
therefor) by the Bank or its suppliers. No Fund shall take any action with
respect to the Software inconsistent with the foregoing acknowledgments, nor
shall any Fund attempt to decompile, reverse engineer or modify the Software. No
Fund may copy, sell, lease or provide, directly or indirectly, any of the
Software or any portion thereof to any other person or entity without the Bank's
prior written consent. No Fund may remove any statutory copyright notice or
other notice included in the Software or on any media containing the Software.
Each Fund shall reproduce any such notice on any reproduction of the Software
and shall add any statutory copyright notice or other notice to the Software or
media upon the Bank's request.
(b) Each Fund acknowledges that all data bases made available as part of,
or through an Electronic Service, and any proprietary data, processes,
information and documentation (other than any such which are or become part of
the public domain or are legally required to be made available to the public)
(collectively, the "Information"), are the exclusive and confidential property
of the Bank. Each Fund shall keep the Information confidential by using the same
care and discretion that each Fund uses with respect to its own confidential
property and trade secrets, and shall neither make nor permit any disclosure
without the express prior written consent of the Bank.
(c) Each Fund shall obtain and maintain at its own cost and expense all
equipment and services, including but not limited to communications services,
necessary for it to utilize an Electronic Service and receive the services
thereby, and the Bank shall not be responsible for the reliability or
availability of any such equipment or any services used in connection with an
Electronic Service.
(d) Upon termination of this Agreement for any reason, each Fund shall
return to the Bank any and all copies of the Information which are in such
Fund's possession or under its control, or distributed to third parties. The
provisions of this Article shall not affect the copyright status of any of the
Information which may be copyrighted and shall apply to all Information whether
or not copyrighted.
3. Modifications. The Bank reserves the right to modify an Electronic
Service or the Software from time to time without notice to any Fund. Each Fund
agrees not to modify or attempt to modify an Electronic Service or the Software
without the Bank's prior written consent. Each Fund acknowledges that an
Electronic Service and the Software are the property of the Bank and,
accordingly, each Fund agrees that any modifications to an Electronic Service or
the Software, whether by such Fund or the Bank and whether with or without the
Bank's consent, shall become the property of the Bank.
4. No Representations or Warranties. The Bank and its manufacturers and
suppliers make no warranties or representations, express or implied, in fact or
in law, including but not limited to warranties of merchantability and fitness
for a particular purpose, in connection with any Fund's use of an Electronic
Service or the Software.
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5. Security; Reliance; Unauthorized Use. Each Fund will, and will cause
all persons utilizing an Electronic Service to, treat the user and authorization
codes, passwords and authentication keys applicable to an Electronic Service
with extreme care. The Bank is hereby irrevocably authorized to act in
accordance with and rely on Written Instructions received by it through an
Electronic Service. Each Fund acknowledges that it is its sole responsibility to
assure that only Authorized Persons use an Electronic Service and that the Bank
shall not be responsible nor liable for any unauthorized use thereof, and agrees
that the security procedures (if any) to be followed in connection with the
Fund's transmission of Written Instructions through an Electronic Service
provide to it a commercially reasonable degree of protection in light of its
particular needs and circumstances.
6. Limitations of Liability. (a) Except as otherwise specifically provided
in Section 6(b) below, the Bank shall have no liability for any losses, damages,
injuries, claims, costs or expenses of a Fund arising out of or in connection
with any failure, malfunction or other problem relating to any Fund's use of an
Electronic Service, except for money damages suffered as the direct result of
the negligence of the Bank in an amount not exceeding, in the aggregate for all
such losses, damages, injuries, claims, costs and expenses of a Fund arising
during any month, the total charges paid by such Fund to the Bank for an
Electronic Service and services hereunder which caused such loss, damage,
injury, claim, cost or expense during the 12 months preceding the month in
question, or such lesser number of months as a Fund has used an Electronic
Service if such Fund has not received 12 months use of an Electronic Service;
provided however, that the Bank shall have no liability under this Section 6(a)
if a Fund fails to comply with the provisions of Section 6(d).
(b) The Bank's liability for its negligence in executing or failing to
execute a Fund's Written Instructions received through an Electronic Service
shall be only with respect to a transfer, or failure to transfer, funds not in
accordance with such Written Instructions after such instructions have been duly
acknowledged by the Bank, and shall be contingent upon the Fund complying with
the provisions of Section 6(d) below, and shall be limited to (i) restoration of
the principal amount mistransferred, if and to the extent that the Bank would be
required to make such restoration under applicable law, and (ii) the lesser of
(A) a Fund's actual pecuniary loss incurred by reason of its loss of use of the
mistransferred funds or the funds which were not transferred, as the case may
be, or (B) compensation for the loss of the use of the mistransferred funds or
the funds which were not transferred, as the case may be, at a rate per annum
equal to the average Federal Funds rate as computed from the Federal Reserve
Bank of New York's daily determination of the effective rate for Federal Funds,
for the period during which a Fund has lost use of such funds. In no event shall
the Bank have any liability for failing to execute Written Instructions for the
transfer of funds which are received by it through an Electronic Service other
than through the applicable transfer module for the particular instructions.
(c) Without limiting the generality of the foregoing, it is hereby agreed
that in no event shall the Bank or any manufacturer or supplier of its computer
equipment, software or services be responsible for any special, indirect,
incidental or consequential damages which a Fund may incur arising out of or in
connection with an Electronic Service or the services provided thereby, even if
the Bank or such manufacturer or supplier has been advised of the possibility of
such damages and regardless of the form of action.
(d) Each Fund shall notify the Bank of any errors, omissions or
interruptions in, or delay or unavailability of, an Electronic Service as
promptly as practicable, and in any event within one Business Day after the
earliest of (i) discovery thereof, (ii) the date discovery should have occurred
through the exercise of reasonable care, and (iii) in the case of any error, the
date of the earliest notice to such Fund which reflects such error.
(e) The Bank shall acknowledge through an Electronic Service its receipt
of each Written Instruction communicated through an Electronic Service, and in
the absence of such acknowledgement the Bank shall not be liable for any failure
to act in accordance with such Written Instruction and the Funds may not claim
that such Written Instruction was received by the Bank.
7. Funds Transfer Back-Up Procedure. (a) In the event an Electronic
Service is inoperable and a Fund is unable to utilize an Electronic Service for
the transmission of Written Instructions to the Bank to transfer funds, the Fund
may give Oral Instructions regarding funds transfers, it being expressly
understood and agreed that the Bank's acting pursuant to such Oral Instructions
shall be contingent upon the Bank's verification of the authenticity thereof
pursuant to the Call-Back Security Procedure set forth on Schedule III hereto
(the "Procedure"). In this regard, each Fund shall deliver to the Bank a Funds
Transfer Telephone Instruction Authorization in the form of Schedule III-A
hereto, identifying the individuals authorized to deliver and/or confirm all
such Oral Instructions. Each Fund understands and agrees that the Procedure is
intended to determine whether Oral Instructions received pursuant to this
Section are authorized but is not intended to detect any errors contained in
such instructions. Each Fund hereby accepts the Procedure and confirms its
belief that the Procedure is commercially reasonable.
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(b) The Bank shall have no liability whatsoever for any funds transfer
executed in accordance with Oral Instructions delivered and confirmed pursuant
to this Section 7 and Schedule III hereto. The Bank's liability for its
negligence in executing or failing to execute any such Oral Instructions shall
be determined by reference to Section 6(b) of this Article.
(c) The Bank reserves the right to suspend acceptance of Oral Instructions
pursuant to this Section 7 if conditions exist which the Bank, in its sole
discretion, believes have created an unacceptable security risk.
8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. EACH FUND AGREES THAT IT WILL NOT UNDER ANY CIRCUMSTANCES RESELL,
DIVERT, TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM)
IN OR TO ANY OTHER COUNTRY. IF THE BANK DELIVERED THE SOFTWARE TO ANY FUND
OUTSIDE OF THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES
IN ACCORDANCE WITH THE EXPORT ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO
U.S. LAW IS PROHIBITED. Each Fund hereby authorizes the Bank to report its name
and address to government agencies to which the Bank is required to provide such
information by law.
9. ENCRYPTION. Each Fund acknowledges and agrees that encryption may not
be available for every communication through an Electronic Service, or for all
data. Each Fund further agrees that Bank may deactivate any encryption features
at any time, without notice or liability to Customer, for the purpose of
maintaining, repairing or troubleshooting an Electronic Service or the Software.
ARTICLE VI
CONCERNING THE BANK
1. Standard of Care; Presentment of Claims. Except as otherwise provided
herein, the Bank shall not be liable for any costs, expenses, damages,
liabilities or claims (including attorney's fees) incurred by a Fund, except
those costs, expenses, damages, liabilities or claims arising out of the Bank's
own gross negligence, bad faith or willful misconduct. Notwithstanding the
foregoing or anything contained in Schedule I hereto, the Bank shall not be
liable for any loss or damage, including attorney's fees, resulting from the
Bank paying any redemption draft containing a forged drawer signature, unless
such loss or damage arises out of the Bank's gross negligence, bad faith or
willful misconduct. All claims against the Bank hereunder shall be made by the
respective Fund as promptly as practicable, and in any event within 6 months
from the date of the action or inaction on which such claim is based, and shall
include reasonable documentation evidencing such claim and loss.
2. No Liability. The Bank shall have no obligation hereunder for costs,
expenses, damages, liabilities or claims, including attorney's fees, which are
sustained or incurred by reason of any action or inaction by the Federal Reserve
wire transfer system or the New York Automated Clearing House. Notwithstanding
any other provision elsewhere contained in this Agreement, in no event shall the
Bank be liable to any Fund or any third party for special, indirect or
consequential damages, or lost profits or loss of business, arising under or in
connection with this Agreement, even if previously informed of the possibility
of such damages and regardless of the form of action.
3. Indemnification. Each Fund shall indemnify and exonerate, save and hold
harmless the Bank from and against any and all costs, expenses, damages,
liabilities or claims, including reasonable attorney's fees and expenses, which
the Bank may sustain or incur or which may be asserted against the Bank by
reason of or as a result of any action taken or omitted by the Bank in
connection with its performance under this Agreement, except those costs,
expenses, damages, liabilities or claims arising out of the Bank's own
negligence, bad faith or willful misconduct. This indemnity shall be a
continuing obligation of each Fund notwithstanding the termination of this
Agreement, any Account or Omnibus Account with respect to a Fund.
4. No Obligation to Inquire. Without limiting the generality of the
foregoing, the Bank shall in no event be under any obligation to inquire into,
and shall not be liable for:
(a) the due authority of any Authorized Person acting on behalf of a Fund
in connection with this Agreement;
(b) the genuineness of any drawer signature on any draft deposited in any
Account or Omnibus Account, or whether such signature is a forgery, other than
the signature of the drawer of any draft drawn on the Bank;
(c) the existence or genuineness of any endorsement or any marking
purporting to be an endorsement on any draft deposited in any Account or Omnibus
Account, or whether such endorsement or marking is a forgery, it being expressly
understood
that all risks associated with the acceptance by the Bank of any draft payable
to a payee other than a Fund for deposit in any Account or Omnibus Account
pursuant to Oral or Written Instructions by the Fund shall be borne by such
Fund;
(d) any discrepancy between the pre-printed investment stub (other than a
substitute stub created by the Bank) and the payee either named on a draft or
written on the face thereof, provided the Bank has acted in accordance with the
investment stub;
(e) any discrepancy between the written amount for which any draft is
drawn and the Magnetic Incription Character Recognition ("MICR") code enscribed
thereon by any bank other than the Bank on any draft presented, provided the
Bank has acted in accordance with the MICR code;
(f) any disbursement directed by a Fund, regardless of the purpose
therefor;
(g) any determination of the Share balance of any Shareholder whose name
is signed on any redemption draft;
(h) any determination of length of time any Shares have been owned by any
Shareholder or the method of payment utilized to purchase such Shares by such
Shareholder;
(i) any claims, liens, attachments, stays or stop payment orders with
respect to any Shares, proceeds, or money, other than a stop payment order
placed by a Fund on a draft drawn by such Fund on its Account or an Omnibus
Account;
(j) the propriety and/or legality of any transaction in any Account or
Omnibus Account;
(k) the lack of authority of any person signing as a drawer of a draft,
provided such person and his specimen signature is specified in the certificate
of authorized signatures last received by the Bank; or
(l) whether any redemption draft equals or exceeds any minimum amount.
5. Reliance Upon Instructions. The Bank shall be entitled to rely upon any
Written or Oral Instructions received by the Bank. Each Fund agrees to forward
to the Bank Written Instructions confirming Oral Instructions in such manner so
that such Written Instructions are received by the Bank by the close of business
of the same day that such Oral Instructions are given to the Bank. Each Fund
agrees that the fact that such confirming Written Instructions are not timely
received or that contrary Written Instructions are received by the Bank shall in
no way affect the validity or enforceability of transactions previously
authorized.
6. Force Majeure. The Bank shall not be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
control, including acts of God; earthquakes; fires; floods; wars; civil or
military disturbances; sabotage; epidemics; riots; interruptions, loss or
malfunctions of utilities, computers (hardware or software), transportation, or
communications service; mechanical breakdowns; interruption or loss of an
Electronic Service (except as otherwise provided in Section 7 of Article V);
accidents; acts of civil or military authority; governmental actions; labor
disputes; or inability to obtain labor, material, equipment or transportation,
provided however, that the Bank shall take reasonable steps to mitigate any
damages arising out of or caused, directly or indirectly, by the circumstances
described in this Section 6.
7. No Implied Duties; Performance According To Applicable Law. The Bank
shall have no duties or responsibilities except such duties and responsibilities
as are specifically set forth in this Agreement and Schedule I hereto, and no
covenant or obligation shall be implied against the Bank. The Bank's duties and
responsibilities hereunder shall be performed in accordance with applicable
laws, regulations and rules, including but not limited to Federal Reserve
Regulation CC and the Operating Rules of the New York Automated Clearing House,
and the Bank shall have no obligation to take actions which in the reasonable
opinion of the Bank are either inconsistent with, or prejudice or impair the
Bank's rights under, any such laws, regulations and rules.
8. Requests for Instructions. At any time the Bank may apply to an officer
of a Fund for Oral or Written Instructions with respect to any matter arising in
connection with the Bank's duties and obligations hereunder, and the Bank shall
not be liable for any action taken or permitted by it in good faith in
accordance with such Oral or Written Instructions. Such application for Oral or
Written Instructions may, at the option of the Bank, set forth in writing any
action proposed to be taken or omitted by the Bank with respect to its duties or
obligations hereunder and the date on or after which such action shall be taken,
and the Bank shall not be liable for any action taken or omitted in accordance
with a proposal included in any such application on or after the date specified
therein (which shall be at least 5 days after the date of such Fund's receipt of
such application) unless, prior to taking or omitting any such action, the Bank
has received Oral or Written Instructions in response to such application
specifying the action to be taken or omitted.
-9-
The Bank may apply for and obtain the advice and opinion of counsel to the Fund
or of its own counsel, at the expense of the Fund, and shall be fully protected
with respect to anything done or omitted by it in good faith in conformity with
such advice or opinion.
9. Delegation of Duties. The Bank may delegate any of its duties and
obligations hereunder to any delegee and may employ agents or attorneys-in-fact;
provided however, that no such delegation or employment by the Bank shall
discharge the Bank from its obligations hereunder. The Bank shall have no
liability or responsibility whatsoever if any delegee, agent or attorney-in-fact
shall have been selected or approved by a Fund. Notwithstanding the foregoing,
nothing contained in this paragraph shall obligate the Bank to effect any
delegation or to employ any agent or attorney-in-fact.
10. Fees; Invoices. (a) For its services hereunder, each Fund agrees to
pay the Bank (i) its out-of-pocket expenses, (ii) the monthly fees and
compensation set forth on Schedule II attached hereto, and (iii) any negative
Calendar Month Earnings Credits, and such other amounts as may be mutually
agreed upon from time to time. The Bank shall provide each Fund with a monthly
activity analysis detailing service volumes, and including average Account
Available Balances and average ledger balances, and all fees owing for such
month.
(b) The Bank shall submit periodic invoices specifying the amount of all
out-of-pocket expenses, fees, compensation and negative Calendar Month Earnings
Credits then due hereunder. The Bank may, and is hereby authorized by each Fund,
to charge such amounts to an Omnibus Account or the appropriate Fund's
Account(s), but only if such amounts remain unpaid for fifteen (15) days after
the end of the period to which such amounts relate.
11. Application of Calendar Month Earnings Credits. (a) Any positive
Calendar Month Earnings Credit for a calendar month shall be applied only as
follows and only in the specified order:
(i) First, applied against such compensation, fees, but not
out-of-pocket expenses, payable by such Fund to the Bank under this
Agreement for such month; and
(ii) Second, applied against such compensation, fees, and negative
Calendar Month Earnings Credits, but not out-of-pocket expenses,
payable by such Fund to the Bank under this Agreement for any
subsequent month in the same calendar year.
(b) Except as provided above, in no event may any Calendar Month Earnings
Credit be applied to any month other than the month in which it was earned.
Calendar Month Earnings Credits may not be transferred to, or utilized by, any
other Fund, person or entity. The portion, if any, of any Calendar Month
Earnings Credit not used by a Fund may be carried, but only forward; provided,
however, that in no event may any Calendar Month Earnings Credit, including
those earned during the fourth calendar quarter, be carried beyond the end of
the calendar year in which earned.
ARTICLE VII
TERMINATION
1. Notice. This Agreement may be terminated by either the Bank giving to
any Fund, or any Fund giving to the Bank, a notice in writing specifying the
date of such termination, which date shall be not less than 90 days after the
date of the giving of such notice. Notwithstanding the foregoing, the Bank
reserves the right to terminate this Agreement (a) at any time upon 30 days
prior written notice if the condition precedent set forth in Article II,
paragraph 3 is unfulfilled, and (b) upon notice if a Fund either (i) fails to
comply with Article IV, Section 3, or (ii) borrows funds from the Bank in an
amount exceeding the Bank's legal lending limit.
2. Obligations Upon Termination. Upon termination, the Bank's sole
obligations, which shall arise only after, and not before, each Fund which is
the subject of such termination has paid to the Bank all out-of-pocket expenses,
fees, compensation, negative Calendar Month Earnings Credits and other amounts
owed by such Fund to the Bank, shall be (i) to deliver to the affected Fund(s)
such records, if any, as may be owned by such Fund(s), in the form and manner
kept by the Bank on such date of termination, and (ii) to pay to the affected
Fund(s) any monies held for their account hereunder.
ARTICLE VIII
MISCELLANEOUS
1. Certificates of Authorized Persons. Each Fund agrees to furnish to the
Bank a new certificate of Authorized Persons in the event that any present
Authorized Person of such Fund ceases to be an Authorized Person or in the event
that any other Authorized Persons are appointed and authorized. Until such new
certificate is received, the Bank shall be fully protected in acting
-10-
under the provisions of this Agreement upon Oral or Written Instructions or
signatures of the present Authorized Persons as set forth in the last delivered
certificate.
2. Notices. (a) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Bank, shall be sufficiently given
if addressed to the Bank and received by it at its offices at 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Division Manager - Mutual Funds, or at such
other place as the Bank may from time to time designate in writing.
(b) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to a Fund shall be sufficiently given if addressed to
a Fund and received by it at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention:
Xxxxxxx Xxx Xxxxxxx, or at such other place as such Fund may from time to time
designate in writing. The Bank shall also send a copy to Xxxxxx Xxxxx Xxxxxxxx &
Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
3. Cumulative Rights and No Waiver. Each and every right granted to the
Bank hereunder or under any other document delivered hereunder or in connection
herewith, or allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of the Bank to exercise, and
no delay in exercising, any right will operate as a waiver thereof, nor will any
single or partial exercise by the Bank of any right preclude any other or future
exercise thereof or the exercise of any other right.
4. Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or obligations
shall not in any way be affected or impaired thereby, and if any provision is
inapplicable to any person or circumstances, it shall nevertheless remain
applicable to all other persons and circumstances.
5. Amendments. This Agreement may not be amended or modified in any manner
except by a written agreement executed by the Bank and each Fund to be bound
thereby, and, except in the case of an amendment to Schedule I hereto,
authorized or approved by a resolution of each Fund's Board.
6. Headings. The headings in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any provisions
hereof.
7. Applicable Law; Consent to Jurisdiction; Jury Trial Waiver. This
Agreement shall be construed in accordance with the laws of the State of New
York without giving effect to conflict of laws principles thereof. Each party
hereby consents to the jurisdiction of a state or federal court situated in New
York City, New York in connection with any dispute arising hereunder and hereby
waives its right to trial by jury.
8. No Third Party Beneficiaries. The provisions of this Agreement are
intended to benefit only the Bank and each Fund and their respective permitted
successors and assigns, and no right shall be granted to any other person by
virtue of this Agreement.
9. Successors and Assigns. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by any Fund
without the written consent of the Bank and authorized or approved by a
resolution of such Fund's Board.
10. Counterparts. This Agreement 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 instrument.
11. Several Obligations. The parties acknowledge that the obligations of
the Funds are several and not joint, that no Fund shall be liable for any amount
owing by another Fund and that the Funds have executed one instrument for
convenience only.
12. About Victory. The name "The Victory Institutional Funds" refers to
the Trust created under a Certificate of Trust filed at the office of the State
Secretary of Delaware. The obligations of Trust entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually but in such capacities, and are not binding upon any of the
Trustees, shareholders, representatives or agents of the Trust personally, but
bind only the Trust Property (as defined in the Trust Instrument), 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. The Trust has entered into this Agreement with respect to some or all
of its Funds individually, and not jointly. The rights and obligations of the
Trust described in this Agreement apply to each individual Fund. No Fund shall
have any liability for any costs or expenses incurred by any other Fund. In
seeking to enforce a claim against any Fund, the Bank shall look to the assets
only of that Fund and not to the assets of any other Fund.
-11-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers, thereunto duly authorized, as
of the day and year first above written.
The Victory Institutional Funds
By:/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: Secretary
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. XxXxxx
-----------------------------------
Title: Vice President
SCHEDULE A
Name of Fund
Victory Institutional Liquid Reserves Fund
EXHIBIT A
I, of (the "Fund"), a
corporation do hereby certify that:
The following individuals have been duly authorized by the [Board of
Directors][Board of Trustees] of the Fund in conformity with the Fund's
[Articles of Incorporation][Declaration of Trust] and By-Laws to give Oral
Instructions and Written Instructions on behalf of the Fund for purposes of the
Fund's Cash Management and Related Services Agreement, and the signatures set
forth opposite their respective names are their true and correct signatures.
Name Signature
___________________________________ _____________________________________
___________________________________ _____________________________________
___________________________________ _____________________________________
___________________________________ _____________________________________
___________________________________ _____________________________________
___________________________________ _____________________________________
________________________________
[Title of Officer]
Exhibit A
I, Xxxxxxxx X. Xxxxxx, of the Victory Institutional Funds (the "Trust"), a
Delaware statutory trust do hereby certify that:
The following individuals, employees of the Trust's transfer agent, BISYS
Fund Services Ohio, Inc., have been duly authorized to give Oral Instructions
and Written Instructions on behalf of the Trust and its series for purposes of
the Cash Management and Related Services Agreement between the Trust and the
Bank, by the officer of BISYS Fund Services Ohio, Inc. whose signature appears
below, who has been duly authorized under the Custody Agreement with the Bank by
the Board of Trustees of the Trust, in conformity with the Trust's Trust
Instrument, By-Laws and resolutions adopted by the Board of Trustees, to
authorize such employees, and the signatures set forth opposite their respective
names are their true and correct signatures.
Authorized individuals from Transfer Agent, BISYS Fund Services Ohio, Inc.:
Name Signature
Xxxx Xxxxxxx ___________________________________
Xxxx Xxxxxxxx ___________________________________
Xxxxxx Xxxxxx ___________________________________
Xxxxx Xxxxx ___________________________________
Xxxx Xxxxxxx ___________________________________
Authorized individuals from BISYS Fund Services Ohio, Inc.:
Name Signature
Xxxxxxx X. Xxxxxxx ___________________________________
Xxxx Xxxx ___________________________________
Xxxxxx Xxxx ___________________________________
The undersigned certifies that the above-referenced individuals are BISYS
employees and are authorized to provide instructions as set forth in this
Agreement.
Effective Date: August 2, 2004
___________________________________
Xxxx Xxxx
Director, BISYS Fund Services Ohio, Inc.
Approved by Officer of Victory Institutional Funds:
___________________________________
Xxxxxxxx X. Xxxxxx
President
Schedule III
Funds Transfer Call Back Security Procedure
I. Initiating and Confirming Funds Transfers Instructions
o The Fund caller will state his or her name and confidential
identification number.
o BNY will determine whether the Fund caller is authorized to give
Funds Transfer instructions, by reference to Schedule III-A hereto.
o If the Fund caller is authorized, BNY will telephone a Fund
individual, who is listed on Schedule III-A as a person authorized,
to confirm instructions.
o BNY will ask for the person's code. If correct, BNY will confirm the
instructions.
o Once confirmed, instructions cannot be revoked or amended unless
received in subsequent confirmed instructions. BNY will attempt to
execute subsequent confirmed instructions, if practical under the
circumstances, but with no obligation to do so.
II. Instructions
o To avoid duplication, the Fund should not send written confirmations
of telephone instructions to BNY. If written instructions are
received, BNY will not be responsible for losses incurred as a
result of duplication.
o Changes or additions to Schedule III-A can only be made by written
instructions from a person believed by BNY to be an authorized
officer of the Fund.
o Deletions of any persons identified on Schedule III-A can be
telephoned into the manager of Funds Transfer. BNY will tape record
the conversion. The telephone call must be promptly confirmed in
writing by the Fund.
Schedule III
Funds Transfer Call Back Security Procedure
III. Responsibility
o BNY will change the authenticating codes periodically.
o New codes cannot be used until an Acknowledgement Form, signed by an
authorized officer of the Fund, is returned and received by BNY.
o The Fund is responsible to safeguard the confidentiality of the
assigned numbers and codes provided by BNY, and BNY shall not be
liable for any loss arising from any unauthorized use.
o BNY will request the assigned number, code and name. BNY will verify
the information given, however, BNY cannot verify the identity of
the caller, nor can BNY detect any errors contained in the
instructions.
Schedule III-A
Funds Transfer Telephone Instructions
Authorization - Call Back Service
TO: The Bank of New York
Funds Transfer Division
Xxxxx #0, Xxx 000
Xxxxxxx Xxxx
Xxxxxxxx, X.X. 00000
Attention: Manager Domestic Department
FROM: Company Name:________________________
Attn:________________________
Address:________________________
________________________
The following individuals are authorized to Initiate (I), Call Back (C),
Initiate "and" Confirm (B), or Initiate "or" Confirm (E) funds transfer
instructions by telephone. Dollar Amount Limits are also indicated, along with
each individual's "Primary" Telephone Number:
PRIMARY SECURITY LEVEL DOLLAR
NAME TEL. NO. (L) (C) (B) (E) LIMIT
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
_____________________________ _____________ ____ __________
"Contingency" Telephone Numbers are Listed Below:
_______________ ________________ ______________
_______________ ________________ ______________
_______________ ________________ ______________
_______________ ________________ ______________
_______________ ________________ ______________
_______________ ________________ ______________
_______________ ________________ ______________
THE BANK OF NEW YORK
"AUTHORIZED DEBIT ACCOUNTS"
FOR FUNDS TRANSFER TELEPHONE SERVICE
ACCOUNT NUMBER ACCOUNT NAME
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
NOTE:
Please Type. Strike through lines not used.
We hereby authorize The Bank of New York to accept, confirm, and execute Funds
Transfer instructions from the person(s) listed on the authorization form
pursuant to an in accordance with the terms and conditions attached. This
authorization replaces and supersedes all prior authorizations and will remain
in effect until revoked or amended in writing.
Dated: Corporate/Customer
Name: Name of Signer:
Effective when accepted and
implemented by
The Bank of New York
Funds Transfer Division
By:_________________________
Xxxxx #0, Xxx 000
Xxxxxxx Xxxx
Xxxxxxxx, XX 00000