EXHIBIT 8(c)
CUSTODY ADMINISTRATION AND AGENCY AGREEMENT
THIS AGREEMENT, dated as of the 15 day of August, 1997 made by and between
the Torray Fund, ("Torray"), a business trust operating as an open-end,
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"), duly organized and existing under the laws of the
Commonwealth of Massachusetts and FPS Services, Inc. ("FPS"), a corporation duly
organized under the laws of the State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, Torray is authorized by its Trust Instrument to issue separate
series of shares representing interests in separate investment portfolios which
are identified on Schedule "B" attached hereto, and which Schedule "B" may be
amended from time to time by mutual agreement of Torray and FPS; and
WHEREAS, the Parties desire to enter into an agreement whereby FPS will
provide certain custody administration services on behalf of Torray on the terms
and conditions set forth in this Agreement; and
WHEREAS, Torray desires that FPS act as its agent for the specific purpose
of taking receipt of, and making payment for, custody services performed on
Torray's behalf by UMB Bank, n.a. (the "Custodian") pursuant to an agreement
between the Custodian and Torray; and
WHEREAS, FPS is willing to serve in such capacity and perform such
functions upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for good and valuable consideration, the receipt and
sufficiency is hereby acknowledged, the Parties hereto, intending to be legally
bound, do hereby agree as follows:
Section 1. Torray hereby appoints FPS as its agent, and FPS hereby accepts
such appointment, for the limited purpose of: (i) accepting invoices charged to
Torray for custody services performed by the Custodian on Torray's behalf, and
(ii) remitting payment to the Custodian for such services performed in amounts
as set forth in Schedule "A" attached hereto.
Section 2. The services to be provided under this Agreement are as follows:
(bullet) Assign a Custody Administrator to accept, control and process
Torray's daily portfolio transactions through direct computer link
with the Custodian.
(bullet) Match and review DTC eligible ID's and trade information with
Torray's instructions for accuracy and coordinating with the
Custodian and Torray's accounting agent for recording and
affirmation processing with the depository.
(bullet) Systematically settle all depository eligible issues. Transactions
requiring physical delivery will be settled through the
Custodian's New York office.
(bullet) Assist Torray in placing cash management trades through the
Custodian, such as commercial paper, CDs and repurchase
agreements.
(bullet) Provide Torray's fund accounting agent and investment advisor with
daily custodian statements reflecting all prior day cash activity
on behalf of each portfolio by 8:30 a.m. Eastern time. Complete
descriptions of any posting, inclusive of Sedol/CUSIP numbers,
interest/dividend payment date, capital stock details, expense
authorizations, beginning/ending cash balances, etc., will be
provided by the Custodian's reports or system.
(bullet) Provide monthly activity statements combining both cash changes
and security trades, and a full portfolio listing.
(bullet) Communicate to Torray and Torray's fund accounting agent on any
corporate actions, capital changes and interest rate changes
supported by appropriate supplemental reports received from the
Custodian. Follow-up will be made with the Custodian to ensure all
necessary actions and/or paperwork is completed.
(bullet) Work with fund accounting and the Custodian on monthly asset
reconciliations.
(bullet) Coordinate and resolve unsettled dividends, interest, paydowns and
capital changes. Assist in resolution of failed transactions and
any settlement problems.
(bullet) Arrange for securities lending, lines of credit, and/or letters of
credit through the Custodian.
(bullet) Provide automated mortgage-backed processing through the
Custodian.
(bullet) Provide broker interface ensuring trade settlement with fail trade
follow up.
(bullet) Provide Torray's auditors with trade documentation to help
expedite Torray's audit.
(bullet) Cooperation and communications between Fund Accounting, Custodian
and Transfer Agent is facilitated smoothly when Custody
Administration is performed by FPS.
Section 3. Compensation. Torray agrees to pay FPS compensation for its
services, and to reimburse it for expenses, at the rates, times, manner and
amounts as set forth in Schedule "A" attached hereto and incorporated herein by
reference, and as will be set forth in any amendments to such Schedule "A"
agreed upon in writing by the Parties. Torray hereby authorizes FPS to
debit its custody account for payment of services invoiced therefore. In
addition, Torray agrees to reimburse FPS for any out-of-pocket expenses
paid by FPS on behalf of Torray within the ten (10) calendar days of
Torray's receipt of an invoice therefor.
For the purpose of determining fees payable to FPS, the value of Torray's
net assets will be computed at the times and in the manner specified in Torray's
controlling documents then in effect.
During the terms of this Agreement, should Torray seek services or
functions in addition to those outlined above, a written amendment to this
Agreement specifying the additional services and corresponding compensation will
be executed by the Parties.
Section 4. Duration and Termination.
(a) The initial term of this Agreement will be for the period of three (3)
years commencing on the date hereinabove first written (the "Effective Date")
and will continue thereafter subject to termination by either Party as set forth
in subsection (c) below.
(b) The fee schedules set forth in Schedule "A" attached hereto will be
fixed for two (2) years commencing on the Effective Date of this Agreement and
will continue thereafter subject to their review and any adjustment.
(c) After the initial term of this Agreement, a Party may give written
notice to the other (the day on which the notice is received by the Party
against which the notice is made shall be the "Notice Date") of a date on which
this Agreement shall be terminated ("Termination Date"). The Termination Date
shall be set on a day not be less than one hundred eighty (180) days after the
Notice Date. The period of time commencing on the Notice Date up to and
including the Termination Date shall be identified herein as the "Notice
Period." Any time up to, but not later than fifteen (15) days prior to the
Termination Date, Torray will pay to FPS such compensation as may be due as of
the Termination Date and will likewise reimburse FPS for any out-of-pocket
expenses and disbursements reasonably incurred or expected to by incurred by FPS
up to and including the Termination Date.
(d) In connection with the termination of this Agreement, if a successor to
any of FPS' duties or responsibilities under this Agreement is designated by
Torray by written notice to FPS, FPS will promptly, on the Termination Date and
upon receipt by FPS of any payments owed to it as set forth in (c) above, shall
transfer to the successor, at Torray's expense, all records which belong to
Torray and Torray will provide appropriate, reasonable and professional
cooperation in transferring such records to the named successor.
(e) Should Torray desire to move any of the services outlined in this
Agreement to a successor service provider prior to the Termination Date, FPS
shall make a good faith effort to facilitate the conversion on such prior date,
however, there can be no guarantee that FPS will be able to facilitate a
conversion of services prior to the end of the Notice Period. Should services be
converted to a successor service provider prior to the end of the Notice Period,
or if Torray is liquidated or its assets merged or purchased or the like with
another entity, payment of fees to FPS shall be accelerated to a date prior to
the conversion or termination of services and calculated as if the services had
remained at FPS until the expiration of the Notice Period and calculated at the
asset levels on the Notice Date.
(f) Notwithstanding the foregoing, this Agreement may be terminated at any
time by either party in the event of a material breach by the other party
involving gross negligence, willful misfeasance, bad faith or a reckless
disregard of its obligations and duties under this Agreement provided that such
breach shall not have been remedied for sixty (60) days or more after receipt of
written specification thereof.
Section 5. Indemnification.
(a) FPS, its directors, officers, employees, shareholders, and agents will
be liable for any loss suffered by Torray resulting from the willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
FPS in the performance of its obligations and duties under this Agreement.
(b) Any director, officer, employee, shareholder or agent of FPS, who may
be or become an officer, Trustee, employee or agent of Torray, will be deemed,
when rendering services to Torray, or acting on any business of Torray (other
than services or business in connection with FPS' duties hereunder), to be
rendering such services to or acting solely for Torray and not as a director,
officer, employee, shareholder or agent of, or under the control or direction of
FPS even though such person may be receiving compensation from FPS.
(c) Torray agrees to indemnify and hold FPS harmless, together with its
directors, officers, employees, shareholders and agents from and against any and
all claims, demands, expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which FPS may sustain of incur or which may
be asserted against FPS by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by FPS except claims, demands,
expenses and liabilities arising from willful misfeasance, bad faith, gross
negligence or reckless disregard on the part of FPS in the performance of its
obligations and duties under this Agreement; or
(ii) any action taken or omitted to be taken by FPS in reliance upon any
Certificate, instrument, order or stock certificate or other document reasonably
believed by FPS to be genuine and signed, countersigned or executed by any duly
authorized person, upon the Oral Instructions or Written Instructions of an
authorized person of Torray, or upon written opinion of legal counsel for Torray
or FPS.
If a claim is made against FPS as to which FPS may seek indemnity under
this Section, FPS will notify Torray promptly after any written assertion of
such claim threatening to institute an action or proceeding with respect thereto
and will notify Torray promptly of any action commenced against FPS within ten
(10) days after FPS has been served with a summons or other legal process,
giving information as to the nature and basis of the claim. Failure to notify
Torray will not, however, relieve Torray from any liability which it may have on
account of the indemnity under this Section so long as Torray has not been
prejudiced in any material respect by such failure.
Torray and FPS will cooperate in the control of the defense of any action,
suit or proceeding in which FPS is involved and for which indemnity is being
provided by Torray to FPS. Torray may negotiate the settlement of any action,
suit or proceeding subject to FPS' approval, which will not be unreasonably
withheld. FPS reserves the right, but not the obligation, to participate in the
defense or settlement of a claim, action or proceeding with its own counsel.
Costs or expenses incurred by FPS in connection with, or as a result of, such
participation will be borne solely by Torray if:
(i) FPS has received an opinion of counsel from counsel to Torray stating
that the use of counsel to Torray by FPS would present an impermissible conflict
of interest;
(ii) the defendants in, or targets of, any such action or proceeding
include both FPS and Torray, and legal counsel to FPS has reasonably concluded
that there are legal defenses available to it which are different from or
additional to those available to Torray or which may be adverse to or
inconsistent with defenses available to Torray (in which case Torray will not
have the right to direct the defense of such action on behalf of FPS); or
(iii) Torray authorizes FPS to employ separate counsel at the expense of
Torray.
(d) The terms of this Section will survive the termination of this
Agreement.
Section 6. Except as otherwise provided in this Agreement, any notice or
other communication required by or permitted to be given in connection with this
Agreement shall be in writing, and shall be delivered in person or sent by first
class mail, postage prepaid, to the respective parties as follows:
If to The Torray Fund If to FPS:
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The Torray Fund FPS Services, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000 0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000 King of Prussia, PA 19406-0903
Attn: Xxxxxxx Xxxx Attn: Xxxxxxx X. Xxxxx
Vice President President
Section 7. Torray represents and warrants to FPS that the execution and
delivery of this Agreement by the undersigned officers of Torray has been duly
and validly authorized by resolution of the Board of Trustees of Torray.
Section 8. This Agreement may be executed in two or more counterparts, each
of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 9. This Agreement shall extend to and shall be binding upon the
Parties and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by Torray without the written
consent of FPS or by FPS without the written consent of Torray, authorized
or approved by a resolution of their respective Board of Trustees.
Section 10. This Agreement shall be governed by the laws of the State of
Pennsylvania and the exclusive venue of any action arising under this Agreement
will be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
Section 11. No provision of this Agreement may be amended or modified, in
any manner except in writing, properly authorized and executed by FPS and
Torray.
Section 12. If any part, term or provision of this Agreement is held by any
court to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid provided that the basic Agreement is not thereby
substantially impaired.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement,
consisting in its entirety of six (6) typewritten pages, together with Schedule
"A" to be signed by their duly authorized officers, as of the day and year first
above written.
The Torray Fund FPS Services, Inc.
/s/ Xxxxxxx Xxxx /s/ Xxxxxxx X. Xxxxx
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By: Xxxxxxx Xxxx, Vice President By: Xxxxxxx X. Xxxxx, President
SCHEDULE "A"
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FEES ATTRIBUTABLE TO THE ADMINISTRATION OF THE CUSTODY
OF THE ASSETS OF TORRAY USING UMB BANK
I. Domestic Securities and ADRs: (1/12th payable monthly)
Subject to a minimum monthly fee of $250 for each separate series of
shares, Torray agrees to pay FPS monthly for services related to the
administration of the custody of the assets of Torray at the annual rate
of:
$.00010 on the first $100 million of average net assets
$.00008 on average net assets between $100 million and $300 million and
$.00006 on average net assets in excess of $300 million
II. Custody Domestic Securities Transactions Charge: (billed monthly)
Torray agrees to pay FPS monthly for each transaction as set forth below:
Book Entry DTC, Federal Book Entry, PTC $11.00
Physical Securities 24.00
Options and Futures 28.00
P & I Pay downs 5.50
Check Requests and Wires 8.00
A transaction includes buys, sells, maturities or free security
movements.
Cedel/Euroclear:
Safekeeping (annual charge) $0.0004
Transaction Charge 30.00
Note: Safekeeping charge is calculated upon month end market value.
III. When Issued, Securities Lending, Index Futures:
Separate segregated custody account monthly fee $250.00
IV. Custody Miscellaneous Fees
Administrative fees incurred in certain local markets will be passed onto
the customer with a detailed description of the fees. Fees include income
collection, corporate action handling, overdraft charges, funds transfer,
special local taxes, stamp duties, registration fees, messenger and
courier services and other out-of-pocket expenses.
V. Out of Pocket Expenses
Torray will reimburse FPS monthly for all reasonable out-of-pocket
expenses, including telephone, postage, telecommunications, special
reports, record retention, special transportation costs, copying and
sending materials to auditors and/or regulatory agencies as incurred and
approved.
SCHEDULE "B"
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IDENTIFICATION OF SEPARATE SERIES OF SHARES
Below are listed the separate funds to which services under this Agreement are
to be performed as of the Execution Date of this Agreement:
The Torray Fund
This Schedule "B" may be amended from time to time by agreement of the Parties.
