EX-99.H(3) 8 kl12014_ex99h3.txt TRANSFER AGENCY AGREEMENT;. TRANSFER AGENCY AGREEMENT AGREEMENT made this 1st day of April, 2002, between THE VICTORY PORTFOLIOS (the "Trust"), a Delaware business trust having its principal place of business at 3435 Stelzer Road, Columbus, OH 43219, on behalf of each investment portfolio of the Trust listed on Schedule A, and such additional investment portfolios as are hereafter created (individually referred to herein as a "Fund" and collectively, as the "Funds"), individually and not jointly, and BISYS FUND SERVICES OHIO, INC. ("BISYS"), a Delaware corporation having its principal place of business at 3435 Stelzer Road, Columbus, Ohio 43219. WHEREAS, the Trust and BISYS entered into a Transfer Agency Agreement dated January 1, 2001 (the "2001 Agreement"), whereby BISYS agreed to perform transfer agency services for the Trust, which has continued in effect through the date hereof; WHEREAS, the Trust desires that BISYS continue to perform transfer agency services for the Trust and each Fund; WHEREAS, BISYS is willing to perform such services on the terms and conditions set forth in this Agreement; and WHEREAS, BISYS and Trust wish to enter into a new Agreement in order to set forth the terms under which BISYS will perform the transfer agency services set forth herein for the Trust. 1. Services. BISYS shall perform for the Trust the transfer agent services set forth in Schedule B hereto. BISYS also agrees to perform for the Trust such special services incidental to the performance of the services enumerated herein as agreed to by the parties from time to time. BISYS shall perform such additional services as are provided on an amendment to Schedule B hereof, in consideration of such fees as the parties hereto may agree. BISYS may, with prior notice to the Trust, appoint in writing other parties qualified to perform transfer agency services (individually, a "Sub-transfer Agent") acceptable to the Trust in writing to carry out some or all of its responsibilities as transfer agent under this Agreement with respect to a Fund; provided, however, that the Sub-transfer Agent shall be the agent of BISYS and not the agent of the Trust or such Fund, and that BISYS shall be fully responsible, to the extent provided in Section 6, for the acts of such Sub-transfer Agent and shall not be relieved of any of its responsibilities hereunder by the appointment of such Sub-transfer Agent. 2. Fees. The Trust shall pay BISYS for the services to be provided by BISYS under this Agreement in accordance with, and in the manner set forth in, Schedule C hereto. Fees for any additional services to be provided by BISYS pursuant to an amendment to Schedule B hereto shall be subject to mutual agreement at the time such amendment to Schedule B is proposed. 3. Reimbursement of Expenses and Miscellaneous Service Fees. (a) In addition to paying BISYS the fees set forth in the Fee Agreement, the Trust agrees to reimburse BISYS for BISYS' out-of-pocket expenses in providing services hereunder, including without limitation, the following: (i) All freight and other delivery and bonding charges incurred by BISYS in delivering materials to and from the Trust and in delivering all materials to shareholders; (ii) All direct telephone, telephone transmission and telecopy or other electronic transmission expenses incurred by BISYS in communication with the Trust, the Trust's investment adviser or custodian, dealers, shareholders or others as required for BISYS to perform the services to be provided hereunder; (iii) Sales taxes paid on behalf of the Trust; (iv) Expenses associated with the tracking of "as-of" trades; (v) The cost of microfilm or microfiche of records or other materials; (vi) Any expenses BISYS shall incur at the written direction of an officer of the Trust thereunto duly authorized; (vii) check processing fees; (viii) fulfillment costs; (ix) IRA Custody and related fees; and (x) NSCC and related fees. (b) In addition, BISYS shall be entitled to receive the following fees: (i) A fee for managing and overseeing the report, print and mail functions performed by BISYS using third-party vendors, and costs for postage, couriers, stock computer paper, statements, labels, 2 envelopes, checks, reports, letters, tax forms, proxies, notices or other forms of printed material (including the costs of preparing and printing all printed materials) which shall be required for the performance of the services to be provided hereunder; (ii) System development fees, billed at the rate of $150 per hour, as approved by the Trust, and all systems-related expenses, agreed in advance, associated with the provision of special reports and services pursuant to Item 8 of Schedule D attached hereto; (iii) Ad hoc reporting fees, billed at a mutually agreed upon rate; (iv) Expenses associated with the tracking of "as-of" trades, billed at the rate of $50 per hour, as approved by the Trust. 4. Effective Date. This Agreement shall become effective as of April 1, 2002 (the "Effective Date"). 5. Term. This Agreement shall continue in effect for a period of two (2) years from the Effective Date, until March 31, 2004 (the "Initial Term"). Thereafter, unless otherwise terminated as provided herein, this Agreement shall continue automatically as to a particular Fund for successive two (2) year periods ("Rollover Periods"); provided that such continuance is specifically approved 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, and by the vote of the Trust's Board of Trustees or a majority of the outstanding voting securities of such Fund. This Agreement may be terminated without further obligation (i) by provision of a notice of nonrenewal in the manner set forth below, (ii) by mutual agreement of the parties or (iii) for "cause," as defined below, upon the provision of sixty (60) days advance written notice by the party alleging cause. Written notice of nonrenewal must be provided at least sixty (60) days of the end of the Initial Term or any Rollover Period, as the case may be. For purposes of this Agreement, "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; or (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. 3 Notwithstanding the foregoing, following any such termination, in the event that BISYS in fact continues to perform any one or more of the services contemplated by this Agreement (or any Schedule or exhibit hereto) with the consent of the Trust, the provisions of this Agreement, including without limitation the provisions dealing with indemnification, shall continue in full force and effect. Fees and out-of-pocket expenses incurred by BISYS but unpaid by the Trust upon such termination shall be immediately due and payable upon and notwithstanding such termination. BISYS shall be entitled to collect from the Trust, in addition to the fees and disbursements provided by Sections 2 and 3 hereof, the amount of all of BISYS' reasonable cash disbursements and any cash disbursements approved by the Trust in connection with BISYS' activities in effecting such termination, including without limitation, the delivery to the Trust and/or its distributor or investment adviser and/or other parties, of the Trust's property, records, instruments and documents. If, for any reason other than (i) nonrenewal, (ii) mutual agreement of the parties or (iii) "cause," as defined above, BISYS's services are terminated hereunder, BISYS is replaced as transfer agent, or if a third party is added to perform all or a part of the services provided by BISYS under this Agreement (excluding any Sub-transfer Agent appointed as provided in Section 1 hereof), then the Trust shall make a one-time cash payment, in consideration of the fee structure and services to be provided under this Agreement, and not as a penalty, to BISYS equal to the balance that would be due BISYS for the remainder of the then-current term of this Agreement, and assuming for purposes of the calculation of the one-time payment that the fees that would be earned by BISYS for each month shall be based upon the average amount of the Trust's daily net assets, number of shareholder accounts and fees payable to BISYS monthly during the twelve (12) months prior to the date that services terminate, BISYS is replaced or a third party is added. In the event the Trust or any Fund is merged into another legal entity in part or in whole pursuant to any form of business reorganization or is liquidated in part or in whole prior to the expiration of the then-current term of this Agreement, the parties acknowledge and agree that the liquidated damages provision set forth above shall be applicable in those instances in which BISYS is not retained to provide transfer agency services consistent with this Agreement, including the number of accounts subject to such services. The one-time cash payment referenced above shall be due and payable on the day prior to the first day in which services are terminated, BISYS is replaced or a third party is added. The parties further acknowledge and agree that, in the event services are terminated, BISYS is replaced, or a third party is added, as set forth above, (i) a determination of actual damages incurred by BISYS would be extremely difficult, and (ii) the liquidated damages provision contained herein is intended to adequately compensate BISYS for damages incurred and is not intended to constitute any form of penalty. 6. Standard of Care; Uncontrollable Events; Limitation of Liability. BISYS shall use diligence to ensure the accuracy of all services performed under this Agreement, but shall not be liable to the Trust for any action taken or omitted by BISYS in 4 the absence of bad faith, willful misfeasance, negligence or reckless disregard by it of its obligations and duties. The duties of BISYS shall be confirmed to those expressly set forth herein, and no implied duties are assumed by or may be asserted against BISYS hereunder. BISYS shall maintain adequate and reliable computer and other equipment necessary or appropriate to carry out its obligations under this Agreement. Upon the Trust's reasonable request, BISYS shall provide supplemental information concerning the aspects of its disaster recovery and business continuity plan that are relevant to the services provided hereunder. Notwithstanding the foregoing or any other provision of this Agreement, BISYS assumes no responsibility hereunder, and shall not be liable for, any damage, loss of data, delay or any other loss caused by events beyond its reasonable control. BISYS shall provide the Trust, at such times as the Trust may reasonably require, copies of reports rendered by independent public accountants on the internal controls and procedures of BISYS relating to the services provided by BISYS under this Agreement. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL BISYS, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES. 7. Legal Advice. BISYS shall notify the Trust at any time BISYS believes that it is in need of the advice of counsel to the Trust with regard to BISYS' responsibilities and duties pursuant to this Agreement. The Trust shall authorize counsel to the Trust to give such advice to BISYS, however, this Agreement shall not obligate counsel to the Trust to give such advice. BISYS may rely upon the advice of counsel to the Trust, or any other counsel authorized by the Trust, and shall in no event be liable to the Trust or any Fund or any shareholder or beneficial owner of the Trust for any action reasonably taken pursuant to such advice. 8. Instructions. Whenever BISYS is requested or authorized to take action hereunder pursuant to instructions from a shareholder, or a properly authorized agent of a shareholder ("shareholder's agent"), concerning an account in a Fund, BISYS shall be entitled to rely upon any certificate, letter or other instrument or communication, reasonably believed by BISYS to be genuine and to have been properly made, signed or authorized by an officer or other authorized agent of the Trust or by the shareholder or shareholder's agent, as the case may be, and shall be entitled to receive as conclusive proof of any fact or matter required to be ascertained by it hereunder a certificate signed by an officer of the Trust or any other person authorized by the Trust's Board of Trustees (hereafter referred to as the "Trustees") or by the shareholder or shareholder's agent, as the case may be. 5 As to the services to be provided hereunder, BISYS may rely conclusively upon the terms of the Prospectuses and Statement of Additional Information of the Trust relating to the relevant Funds to the extent that such services are described therein unless BISYS receives written instructions to the contrary in a timely manner from the Trust. 9. Indemnification. The Trust agrees to indemnify and hold harmless BISYS, its employees, agents, directors, officers and nominees from and against any and all claims, demands, actions and suits, and from and against any and all judgments, liabilities, losses, damages, costs, charges, counsel fees and other expenses of every nature and character arising out of or in any way relating to BISYS' actions taken or omissions with respect to the performance of services under this Agreement or based, if applicable, upon reasonable reliance on information, records, instructions or requests given or made to BISYS by the Trust, the investment adviser, fund accountant, administrator, sub-administrator or custodian thereof; provided that this indemnification shall not apply to actions or omissions of BISYS in cases of its own bad faith, willful misfeasance, negligence or reckless disregard by it of its obligations and duties; and further provided that prior to confessing or settling any claim against it which may be the subject of this indemnification, BISYS shall give the Trust written notice of and reasonable opportunity to defend against said claim in its own name or in the name of BISYS. BISYS shall indemnify, defend, and hold the Trust harmless from and against any and all third party claims, actions and suits and all losses, damages, costs, charges, reasonable counsel fees and disbursements, payments, expenses and liabilities (including reasonable investigation expenses) resulting directly and proximately from BISYS's willful misfeasance, bad faith or negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder. The indemnification rights hereunder shall include the right to reasonable advances of defense expenses in the event of any pending or threatened litigation with respect to which indemnification hereunder may ultimately be merited. In order that the indemnification provisions contained herein shall apply, however, it is understood that if in any case a party may be asked to indemnify or hold the other party harmless, the indemnifying party shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnified party will use all reasonable care to identify and notify the indemnifying party promptly concerning any situation which presents or appears likely to present the probability of such a claim for indemnification against the indemnifying party, but failure to do so in good faith shall not affect the rights hereunder except to the extent the indemnifying party is materially prejudiced thereby. The indemnifying party shall be entitled to participate at its own expense or, if it so elects, to assume the defense of any suit brought to enforce any claims subject to this indemnity provision. If the indemnifying party elects to assume the defense of any such claim, the defense shall be conducted by counsel chosen by it and reasonably satisfactory to the indemnified party, whose approval shall not be unreasonably withheld. In the event that the 6 indemnifying party elects to assume the defense of any suit and retain counsel, the indemnified party shall bear the fees and expenses of any additional counsel retained by it. If the indemnifying party does not elect to assume the defense of suit, it will reimburse the indemnified party for the reasonable fees and expenses of any counsel retained by the indemnified party. The indemnity and defense provisions set forth herein shall indefinitely survive the termination of this Agreement. 10. Record Retention and Confidentiality. BISYS shall keep and maintain on behalf of the Trust all books and records which the Trust or BISYS is, or may be, required to keep and maintain pursuant to any applicable statutes, rules and regulations, including without limitation Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as amended (the "1940 Act"), relating to the maintenance of books and records in connection with the services to be provided hereunder. BISYS further agrees that all such books and records shall be the property of the Trust and to make such books and records available for inspection by the Trust or by the Securities and Exchange Commission (the "Commission") at reasonable times. BISYS shall otherwise keep confidential all books and records relating to the Trust and its shareholders, except when (i) disclosure is required by law, (ii) BISYS is advised by counsel that it may incur liability for failure to make a disclosure, (iii) BISYS is requested to divulge such information by duly-constituted authorities or court process, or (iv) BISYS is requested to make a disclosure by a shareholder or shareholder's agent with respect to information concerning an account as to which such shareholder has either a legal or beneficial interest or when requested by the Trust or the dealer of record as to such account. BISYS and the Trust will each treat as proprietary and confidential any facts, circumstances, information, plans, projects and technical or commercial knowledge gained about the other party through the relationship created by this Agreement, except that information in the public domain and technical, operational or commercial knowledge that was or is independently discovered or developed shall not be subject to any such restriction. Each party agrees that it will not disclose any such covered proprietary or confidential information gained in relation to the other party to any unaffiliated third parties, except (i) in the case of disclosure by BISYS, to a transfer Agent, or to any third party vendor used by BISYS, provided that further dissemination inconsistent with this provision would be prohibited, (ii) to financial or legal advisers (in either case in such manner as to ensure no further dissemination), (iii) with the written consent of the other party; (iv) as may be required by law, or (v) as necessary to gain or retain regulatory approvals. The parties further agree that a breach of this paragraph by either party would irreparably damage the other party, and accordingly agree that each party shall be entitled to an injunction or other equitable relief to prevent the breach or a further breach of this provision. 11. Reports. BISYS shall furnish to the Trust and to its properly-authorized auditors, investment advisers, examiners, distributors, dealers, underwriters, salesmen, insurance companies and others designated by the Trust in writing, such reports at such times as are prescribed in Schedule D attached hereto, or as subsequently agreed upon by the parties pursuant 7 to an amendment to Schedule D. The Trust agrees to examine each such report or copy promptly and will report or cause to be reported any errors or discrepancies therein. 12. Rights of Ownership. All computer programs and procedures developed to perform services required to be provided by BISYS under this Agreement are the property of BISYS. All records and other data except such computer programs and procedures are the exclusive property of the Trust and all such other records and data shall be furnished to the Trust in appropriate form as soon as practicable after termination of this Agreement for any reason. 13. Return of Records. BISYS may at its option at any time, and shall promptly upon the Trust's demand, turn over to the Trust and cease to retain BISYS' files, records and documents created and maintained by BISYS pursuant to this Agreement which are no longer needed by BISYS in the performance of its services or for its legal protection. If not so turned over to the Trust, such documents and records shall be retained by BISYS for six years from the year of creation. At the end of such six-year period, such records and documents shall be turned over to the Trust unless the Trust authorizes in writing the destruction of such records and documents. 14. Bank Accounts. The Trust and the Funds shall establish and maintain such bank accounts with such bank or banks as are selected by the Trust, as are necessary in order that BISYS may perform the services required to be performed hereunder. To the extent that the performance of such services shall require BISYS directly to disburse amounts for payment of dividends, redemption proceeds or other purposes, the Trust and Funds shall provide such bank or banks with all instructions and authorizations necessary for BISYS to effect such disbursements. 15. Representations and Warranties of the Trust. The Trust represents and warrants to BISYS that: (a) as of the close of business on the Effective Date, each Fund which is in existence as of the Effective Date has authorized unlimited shares, and (b) by virtue of its Declaration of Trust, shares of each Fund which are redeemed by the Trust may be sold by the Trust from its treasury, and (c) this Agreement has been duly authorized by the Trust and, when executed and delivered by the Trust, will constitute a legal, valid and binding obligation of the Trust, enforceable against the Trust in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties. 8 16. Representations and Warranties of BISYS. BISYS represents and warrants that: (a) BISYS has been in, and shall continue to be in, substantial compliance with all provisions of law, including Section 17A(c) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), required in connection with the performance of its duties under this Agreement; (b) the various procedures and systems which BISYS has implemented with regard to safekeeping from loss or damage attributable to fire, theft or any other cause of the blank checks, records, and other data of the Trust and BISYS' records, data, equipment, facilities and other property used in the performance of its obligations hereunder are adequate and that it will make such changes therein from time to time as are required for the secure performance of its obligations hereunder; and (c) this Agreement has been duly authorized by BISYS and, when executed and delivered by BISYS , will constitute a legal, valid and binding obligation of BISYS, enforceable against BISYS in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the right and remedies of creditors and secured parties. 17. Insurance. BISYS shall maintain a fidelity bond covering larceny and embezzlement and an insurance policy with respect to directors and officers errors and omissions coverage in amounts that are appropriate in light of its duties and responsibilities hereunder. Upon the request of the Trust, BISYS shall provide evidence that coverage is in place. BISYS shall notify the Trust should its insurance coverage with respect to professional liability or errors and omissions coverage be canceled. Such notification shall include the date of cancellation and the reasons therefor. BISYS shall notify the Trust of any material claims against it with respect to services performed under this Agreement, whether or not they may be covered by insurance, and shall notify the Trust from time to time as may be appropriate should the total outstanding claims made by BISYS under its insurance coverage materially impair, or threaten to materially impair, the adequacy of its coverage. 18. Information to be Furnished by the Trust and Funds. The Trust has furnished to BISYS the following, as amended and current as of the Effective Date (receipt of which is acknowledged): (a) Copies of the Declaration of Trust of the Trust and of any amendments thereto, certified by the proper official of the state in which such Declaration has been filed. (b) Copies of the following documents: (i) The Trust's Bylaws and any amendments thereto; (ii) Certified copies of resolutions of the Trustees covering the following matters: 9 A. Approval of this Agreement and authorization of a specified officer of the Trust to execute and deliver this Agreement and authorization for specified officers of the Trust to instruct BISYS hereunder; and B. Authorization of BISYS to act as Transfer Agent for the Trust. (c) A list of all officers of the Trust and any other persons (who may be associated with the Trust or its investment advisor), together with specimen signatures of those officers and other persons, who are authorized to instruct BISYS in all matters. (d) Two copies of the following (if such documents are employed by the Trust): (i) Prospectuses and Statement of Additional Information; (ii) Distribution Agreement; and (iii) All other forms commonly used by the Trust or its Distributor with regard to their relationships and transactions with shareholders of the Funds. (e) A certificate as to shares of beneficial interest of the Trust authorized, issued, and outstanding as of the Effective Date and as to receipt of full consideration by the Trust for all shares outstanding, such statement to be certified by the Treasurer of the Trust. 19. Information Furnished by BISYS. BISYS has furnished to the Trust evidence of the following: (a) Approval of this Agreement by BISYS, and authorization of a specified officer of BISYS to execute and deliver this Agreement; (b) Authorization of BISYS to act as Transfer Agent for the Trust. 20. Amendments to Documents. The Trust shall furnish BISYS written copies of any amendments to, or changes in, any of the items referred to in Section 18 hereof forthwith upon such amendments or changes becoming effective. In addition, the Trust agrees that no amendments will be made to the Prospectuses or Statement of Additional Information of the Trust which might have the effect of changing the procedures employed by BISYS in providing the services agreed to hereunder or which amendment might affect the duties of BISYS hereunder unless the Trust first obtains BISYS' approval of such amendments or changes, which approval shall not be withheld unreasonably. 10 21. Reliance on Amendments. BISYS may rely on any amendments to or changes in any of the documents and other items to be provided by the Trust pursuant to Sections 18 and 20 of this Agreement and the Trust hereby indemnifies and holds harmless BISYS from and against any and all claims, demands, actions, suits, judgments, liabilities, losses, damages, costs, charges, counsel fees and other expenses of every nature and character which may result from actions or omissions on the part of BISYS in reasonable reliance upon such amendments and/or changes. Although BISYS is authorized to rely on the above-mentioned amendments to and changes in the documents and other items to be provided pursuant to Sections 18 and 20 hereof, in the event the same relate to services provided by BISYS hereunder, BISYS shall have no liability for failure to comply with or take any action in conformity with such amendments or changes unless the Trust first obtains BISYS' written consent to and approval of such amendments or changes. 22. Compliance with Law. Except for the obligations of BISYS set forth in Section 10 hereof, the Trust assumes full responsibility for the preparation, contents, and distribution of each prospectus of the Trust as to compliance with all applicable requirements of the Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act, and any other laws, rules and regulations of governmental authorities having jurisdiction. BISYS shall have no obligation to take cognizance of any laws relating to the sale of the Trust's shares. The Trust represents and warrants that all shares of the Trust that are offered to the public are covered by an effective registration statement under the 1933 Act and the 1940 Act. 23. Notices. Any notice provided hereunder shall be sufficiently given when sent by registered or certified mail to the party required to be served with such notice at the following address: if to the Trust, to it at c/o Victory Capital Management Inc., Investment Products Group, 127 Public Square, Cleveland, OH 44114, Attn: Kathleen A. Dennis, President, with a copy to Kramer Levin Naftalis & Frankel LLP, 919 Third Avenue, New York, NY 10022, Attn: Jay G. Baris, Esquire; and if to BISYS, to it at 3435 Stelzer Road, Columbus, Ohio 43219, Attn: President, or at such other address as such party may from time to time specify in writing to the other party pursuant to this Section. 24. Assignment. This Agreement and the rights and duties hereunder shall not be assignable by either of the parties hereto except by the specific written consent of the other party. This Section 24 shall not limit or in any way affect BISYS' right to appoint a Sub-transfer Agent pursuant to Section 1 hereof. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns. 11 25. Governing Law and Matters Relating to the Trust as a Delaware Business Trust. This Agreement shall be governed by and provisions shall be construed in accordance with the laws of the State of Ohio and the applicable provisions of the 1940 Act. To the extent that the applicable laws of the State of Ohio, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control. It is expressly agreed that the obligations of the Trust hereunder shall not be binding upon any of the Trustees, shareholders, nominees, officers, agents or employees of the Trust personally, but shall bind only the trust property of the Trust. The execution and delivery of this Agreement have been authorized by the Trustees, and this Agreement has been signed and delivered by an authorized officer of the Trust, acting as such, and neither such authorization by the Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the trust property of the Trust as provided in the Trust's Declaration of Trust. 26. Privacy. Nonpublic personal financial information relating to consumers or customers of the Trust provided by, or at the direction of the Trust to BISYS, or collected or retained by BISYS in the course of performing its duties as transfer agent shall be considered confidential information. BISYS shall not give, sell or in any way transfer such confidential information to any person or entity, other than affiliates of BISYS except at the direction of the Trust or as required or permitted by law. BISYS represents, warrants and agrees that it has in place and will 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 Trust. The Trust represents to BISYS that it has adopted a Statement of its privacy policies and practices as required by Securities and Exchange Commission Regulation S-P and agrees to provide BISYS with a copy of that statement annually. 27. Activities of BISYS. The services of BISYS rendered to the Trust hereunder are not to be deemed to be exclusive. BISYS 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 Trust are or may be or become interested in BISYS, as officers, employees or otherwise and that partners, officers and employees of BISYS and its counsel are or may be or become similarly interested in the Trust, and that BISYS may be or become interested in the Trust as a shareholder or otherwise. 28. Miscellaneous. (a) Paragraph headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. (b) This Agreement constitutes the complete agreement of the parties hereto as to the subject matter covered by this Agreement, and supercedes all prior negotiations, understandings and agreements bearing upon the 12 subject matter covered herein, including, without limitation, the 1998 Agreement. (c) This Agreement may be executed in counterparts, each of which shall be an original but all of which, taken together, shall constitute one and the same agreement. (d) No amendment to this Agreement shall be valid unless made in writing and executed by both parties hereto. 13 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed all as of the day and year first above written. THE VICTORY PORTFOLIOS, on behalf of each Fund listed on Schedule A, individually and not jointly By: /s/ Kathleen A. Dennis ----------------------------------------- Title: President BISYS FUND SERVICES OHIO, INC. By: /s/ Frederick J. Naddaff ------------------------------------------- Title: --------------------------------------- 14 SCHEDULE A TO THE TRANSFER AGENCY AGREEMENT BETWEEN THE VICTORY PORTFOLIOS AND BISYS FUND SERVICES OHIO, INC. FUNDS Name of Portfolio ------------------
1.Victory Balanced Fund 19. Victory Federal Money Market Fund 2.Victory Diversified Stock Fund 20. Victory Convertible Fund 3.Victory Growth Fund 21. Victory LifeChoice Conservative Investor Fund 4.Victory Intermediate Income Fund 22. Victory LifeChoice Growth Investor Fund 5.Victory International Growth Fund 23. Victory LifeChoice Moderate Investor Fund 6.Victory Ohio Municipal Bond Fund 24. Victory Gradison Government Reserves Fund 7.Victory Prime Obligations Fund 25. Victory Small Company Opportunity Fund 8.Victory Real Estate Investment Fund 26. Victory Established Value Fund 9.Victory Special Value Fund 27. Victory Nasdaq 100 Index Fund 10.Victory Stock Index Fund 11.Victory Tax-Free Money Market Fund 12.Victory Value Fund 13.Victory Financial Reserves Fund 14.Victory Fund for Income 15.Victory Institutional Money Market Fund 16.Victory National Municipal Bond Fund 17.Victory New York Municipal Bond Fund 18.Victory Ohio Municipal Money Market Fund
A-1 Dated: April 1, 2002 SCHEDULE B TO THE TRANSFER AGENCY AGREEMENT BETWEEN THE VICTORY PORTFOLIOS AND BISYS FUND SERVICES OHIO, INC. TRANSFER AGENCY SERVICES 1. Shareholder Transactions a. Process shareholder purchase and redemption orders. b. Set up account information, including address, dividend option, taxpayer identification numbers and wire instructions. c. Issue confirmations in compliance with Rule 10b-10 under the Securities Exchange Act of 1934, as amended. d. Issue periodic statements for shareholders. e. Process transfers and exchanges. f. Process dividend payments, including the purchase of new shares, through dividend reimbursement. 2. Shareholder Information Services a. Make information available to shareholder servicing unit and other remote access units regarding trade date, share price, current holdings, yields, and dividend information. b. Produce detailed history of transactions through duplicate or special order statements upon request. c. Provide mailing labels for distribution of financial reports, prospectuses, proxy statements or marketing material to current shareholders. B-1 3. Compliance Reporting a. Provide reports to the Securities and Exchange Commission, the National Association of Securities Dealers, Inc. and the States in which the Fund is registered. b. Prepare and distribute appropriate Internal Revenue Service forms for corresponding Fund and shareholder income and capital gains. c. Issue tax withholding reports to the Internal Revenue Service. d. Prepare reports to the Board of Trustees summarizing issues relating to the provision of BISYS' services of which BISYS is aware and the Board of Trustees should be aware. 4. Dealer/Load Processing (if applicable) a. Provide reports for tracking rights of accumulation and purchases made under a Letter of Intent. b. Account for separation of shareholder investments from transaction sale charges for purchase of Fund shares. c. Calculate fees due under 12b-1 plans for distribution and marketing expenses. d. Track sales and commission statistics by dealer and provide for payment of commissions on direct shareholder purchases in a load Fund. 5. Shareholder Account Maintenance a. Maintain all shareholder records for each account in the Trust. b. Issue customer statements on scheduled cycle, providing duplicate second and third party copies if required. c. Record shareholder account information changes. d. Maintain account documentation files for each shareholder. B-2 Dated July 1, 2002 SCHEDULE C TO THE TRANSFER AGENCY AGREEMENT BETWEEN THE VICTORY PORTFOLIOS AND BISYS FUND SERVICES OHIO, INC. TRANSFER AGENT FEES The annual fee to be charged to each Fund will consist of the annual account-based fees for each shareholder account in the Fund, as well as the Fund's proportionate share of the complex fee, as set forth below. Annual Per Account Fee: Open Accounts $23.50 Closed Accounts $5.00 Complex Fee: The annual complex fee will be based on the total number of classes of shares of all Funds comprising the Victory Portfolios and Victory Variable Insurance Funds. The aggregate complex fee to be applied will be determined by applying the relevant dollar amount to the fund complex in the aggregate: Total Classes Aggregate Fee ------------------ ------------- 0 to 15 classes $150,000 16 to 35 classes $350,000 36 to 50 classes $475,000 51 to 65 classes $550,000 Over 65 classes $575,000 Additional Services: Additional services such as IRA processing, development of interface capabilities, servicing of 403(b) and 408(c) accounts, management of cash sweeps between DDAs and mutual fund accounts and coordination of the printing and distribution of prospectuses, annual reports and semi-annual reports are subject to additional fees which will be quoted upon request. Programming costs or database management fees for special reports or specialized processing will be quoted upon request. C-1 Multiple Classes of Shares: Classes of shares which have different net asset values or pay different daily dividends will be treated as separate classes, and the fee schedule above will be applied accordingly. The rates set forth above for the complex fees payable hereunder shall be subject to increase annually following the first year of the Initial Term to reflect any annual percentage increase in the Consumer Price Index published by the U.S. Department of Labor. C-2 Dated April 1, 2002 SCHEDULE D TO THE TRANSFER AGENCY AGREEMENT BETWEEN THE VICTORY PORTFOLIOS AND BISYS FUND SERVICES OHIO, INC. REPORTS 1. Daily Shareholder Activity Journal 2. Daily Fund Activity Summary Report a. Beginning Balance b. Dealer Transactions c. Shareholder Transactions d. Reinvested Dividends e. Exchanges f. Adjustments g. Ending Balance 3. Daily Wire and Check Registers 4. Monthly Dealer Processing Reports 5. Monthly Dividend Reports 6. Sales Data Reports for Blue Sky Registration 7. A copy of the most recent report by independent public accountants describing control structure policies and procedures relating to transfer agency operations pursuant to AICPA Statement on Auditing Standards Number 70. 8. Such special reports and additional information that the parties may agree upon, from time to time. 9. Sales reporting as created by Activate. D-1