TRANSFER AGENT AGREEMENT
THIS
TRANSFER AGENT AGREEMENT is made and entered into as of the [29th]
day of
September, 2008, by and between PFM Funds, a Virginia business trust (the
"Trust") with respect to its Prime Series (“Prime Series”) and Government Series
(“Government Series”) and each of the classes of the Prime Series identified in
Schedule A of this Agreement (each, a "Fund" and collectively, the "Funds")
and
PFM Asset Management LLC, a Delaware limited liability company (hereinafter
referred to as the "Agent").
W
I T N E
S S E T H:
WHEREAS,
the Trust is an open-end, diversified, management investment company which
is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS,
the Agent is not required to register under the Securities Exchange Act of
1934,
as amended (the "1934 Act"), as a transfer agent;
NOW,
THEREFORE, the Trust, on behalf of the Funds, and the Agent do mutually promise
and agree as follows:
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1.
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Terms
of Appointment; Duties of the Agent
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Subject
to the terms and conditions set forth in this Agreement, the Trust hereby
employs and appoints the Agent to act as transfer agent, dividend disbursing
agent, and shareholder servicing agent for the Funds.
With
respect to each of the Funds, the Agent shall perform all of the customary
services of a transfer agent, dividend disbursing agent and shareholder
servicing agent, and as relevant, agent in connection with accumulation, open
account or similar plans (including without limitation any periodic investment
plan or periodic withdrawal program), including but not limited to the following
and as more fully described in Exhibit A and Addendum I:
A. Receive
orders for the purchase of shares, with prompt delivery, where appropriate,
of
payment and supporting documentation to the Funds' custodian;
B. Process
purchase orders and issue the appropriate number of uncertificated shares with
such uncertificated shares being held in the appropriate shareholder
account;
C. Process
redemption requests received in good order and, where relevant, deliver
appropriate documentation to the Funds' custodian;
D. Pay
moneys (upon receipt from the Funds' custodian, where relevant) in accordance
with the instructions of redeeming shareholders;
E. Process
transfers of shares in accordance with the shareowner's
instructions;
F. Process
exchanges between the Funds and any other funds within the same family of funds,
if applicable;
G. Prepare
and transmit payments for dividends and distributions declared by the
Funds;
H. Make
changes to shareholder records, including, but not limited to, address changes
in plans (i.e.,
systematic withdrawal, automatic investment, dividend reinvestment,
etc.);
I. Record
the issuance of shares of the Funds and maintain, pursuant to Rule 17Ad-10(e)
under the 1934 Act, a record of the total number of shares of the Funds which
are authorized, issued and outstanding and such other records as are required
to
be maintained by a transfer agent for open-end registered investment companies
by the rules adopted under the 1934 Act;
J. Prepare
shareholder meeting lists and, if applicable, mail, receive and tabulate
proxies;
K. Mail
shareholder reports and prospectuses to current shareholders;
L. Prepare
and file U.S. Treasury Department forms 1099 and other appropriate information
returns required with respect to dividends and distributions for all
shareholders;
M. Provide
shareholder account information upon request and prepare and mail confirmations
and statements of account to shareholders for all purchases, redemptions and
other confirmable transactions as agreed upon with the Trust, or in the
alternative, to deliver monthly statements by means of electronic mail, or
by
providing access to a password protected website, to those shareholders of
the
trust who consent to delivery of monthly statements in such manner;
and
N. Provide
a
Blue Sky System which will enable the Funds to monitor the total number of
shares sold in each state. In addition, the Trust, on behalf of the Funds,
shall
identify to the Agent in writing those transactions and assets to be treated
as
exempt from the Blue Sky reporting for each state. The responsibility of the
Agent for the Funds' Blue Sky state registration status is solely limited to
the
initial compliance by the Fund and the reporting of such transactions to the
Fund.
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2.
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Additional
Services
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With
respect to the SNAP® Fund Class and IllinoisPrimeSM
Class of
Prime Series, the Agent will:
A.
Assist
shareholders in compiling and maintaining information on the draw-down of
the
proceeds of tax-exempt bond issues invested in said classes;
B.
Maintain information as provided by the respective shareholders on any related
tax-exempt bond issues, the proceeds of which are invested in said
classes;
C.
Prepare periodic reports for shareholders to enable them to track their spending
as compared with the spend-down standards contained in the Internal Revenue
Code
of 1986, as amended (the “Code”) and applicable Regulations promulgated
thereunder; and
D.
Provided that a shareholder has furnished information on the related bond
issue,
prepare periodic interim estimates of the arbitrage rebate liabilities due
under
provision of the Code and Regulations for tax-exempt bond proceeds invested in said
classes.
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3.
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Compensation
and Expenses
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As
full
compensation for the services and facilities furnished to the Trust and the
expenses assumed by the Agent under this Agreement, the Trust shall pay to
the
Agent a fee with respect to each Fund, as calculated in accordance with Schedule
B hereto. The Agent shall bear all of the costs of providing services
hereunder.
The
Trust
agrees to pay all reimbursable expenses within thirty (30) days following
receipt of a notice for reimbursement of such expenses.
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4.
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Representations
of Agent
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The
Agent
represents and warrants to the Trust that:
A. It
is a
limited liability company duly organized, existing and in good standing under
the laws of the State of Delaware;
B. It
is
duly qualified to carry on its business and is not required to be registered
as
a transfer agent under the 1934 Act;
C. It
is
empowered under applicable laws and by its charter and bylaws to enter into
and
perform this Agreement;
D. All
requisite corporate proceedings have been taken to authorize it to enter and
perform this Agreement; and
E. It
has
and will continue to have access to the necessary facilities, equipment and
personnel to perform its duties and obligations under this
Agreement.
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5.
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Representations
of the Trust
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The
Trust
represents and warrants to the Agent that:
A. The
Trust
is registered under the 1940 Act as an open-ended, diversified management
investment company;
B. The
Trust
is a business trust organized, existing, and in good standing under the laws
of
the Commonwealth of Virginia;
C. The
Trust
is empowered under applicable laws and by its Declaration of Trust and other
governing documents to enter into and perform this Agreement;
D. All
necessary proceedings required to be taken by the Trust to authorize it to
enter
into and perform this Agreement have been taken;
E. The
Trust
will comply with all applicable requirements of the Securities Act of 1933,
as
amended (the “1933 Act”), and the 1940 Act, and all other laws, rules and
regulations of governmental authorities having jurisdiction; and
F. A
registration statement under the 1933 Act covering shares of the Funds is
currently effective and will remain effective. Appropriate state securities
law
filings have been made and will continue to be made, with respect to all shares
of the Funds being offered and sold.
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6.
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Covenants
of the Trust and the Agent
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The
Trust
shall furnish the Agent a certified copy of the resolution of the Board of
Trustees of the Trust authorizing the appointment of the Agent and the execution
of this Agreement. The Trust shall provide to the Agent a copy of its
Declaration of Trust and all amendments.
The
Agent
shall keep records relating to the services to be performed hereunder, in the
form and manner as it may deem advisable. To the extent required by Section
31
of the 1940 Act and the rules thereunder, the Agent agrees that all such records
prepared or maintained by the Agent relating to the services to be performed
by
the Agent hereunder are the property of the Trust and will be preserved,
maintained and made available in accordance with such section and rules and
will
be surrendered to the Trust on and in accordance with its request.
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7.
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Liability;
Indemnification
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The
Agent
agrees to use reasonable care and to act in good faith in performing its duties
hereunder and shall not be liable for any error in judgment or mistake of law
or
for any loss suffered by the Trust or any Fund in connection with the matters
to
which this Agreement relates, provided that the Agent has acted in accordance
with such standard and with the terms of this Agreement.
Notwithstanding
the foregoing, the Agent shall not be liable or responsible for delays or errors
occurring by reason of circumstances beyond its control, including acts of
civil
or military authority, national or state emergencies, fire, mechanical or
equipment failure, flood or catastrophe, acts of God, insurrection or war.
In
the event of a mechanical breakdown beyond its control, the Agent shall take
all
reasonable steps to minimize service interruptions for any period that such
interruption continues beyond the Agent's control. The Agent will make every
reasonable effort to restore any lost or damaged data, and the correction of
any
errors resulting from such a breakdown will be at the Agent's expense. The
Agent
agrees that it shall, at all times, have reasonable contingency plans with
appropriate parties, making reasonable provision for emergency use of electrical
data processing equipment to the extent appropriate equipment is
available.
The
Trust
will indemnify and hold the Agent harmless against any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses) ("Losses") resulting from any claim, demand, action or suit and
arising out of or in connection with the Agent's duties on behalf of the Trust
hereunder, except insofar as such Losses result from the willful misfeasance,
bad faith or gross negligence of the Agent in the performance of its duties
hereunder or from its reckless disregard of such duties.
In
performing services hereunder, Agent shall be entitled to rely and to act upon:
(i) telephone instructions relating to the exchange or redemption of shares
received by the Agent and reasonably believed by the Agent to have originated
from the record owner of the subject shares; (ii) any instructions executed
or
orally communicated by a duly authorized officer or employee of the Trust,
according to such lists of authorized officers and employees furnished to the
Agent and as amended from time to time in writing by a resolution of the Board
of Trustees of the Trust; and (iii) any genuine instrument signed, countersigned
or executed by any person or persons authorized to sign, countersign or execute
the same.
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8.
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Virginia
Law to Apply
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This
Agreement shall be deemed to have been executed in Virginia and shall be
construed and the provisions thereof interpreted under and in accordance with
the substantive laws of the Commonwealth of Virginia, without regard to the
conflicts of laws provisions of such state.
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9.
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Term,
Amendment, Assignment, Termination and
Notice
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A. This
Agreement shall become effective as of the date set forth above for an initial
term of two years and shall continue in effect from year to year thereafter
provided that each such continuance is approved annually by the Board of
Trustees of the Trust, including the vote of a majority of the Trustees who
are
not "interested persons" of the Trust, as defined by the 1940 Act and the rules
thereunder.
B. This
Agreement, including the Schedules and Exhibit hereto, may be amended by the
mutual written consent of the parties.
C. This
Agreement may be terminated upon ninety (90) days’ written notice given by one
party to the other.
D. This
Agreement and any right or obligation hereunder may not be assigned by either
party without the signed, written consent of the other party; provided, however,
that the Agent may assign this Agreement without such consent in a transaction
which does not constitute an "assignment" as defined by the 1940 Act and the
rules thereunder.
E. Any
notice required to be given by the parties to each other under the terms of
this
Agreement shall be in writing, addressed and delivered, or mailed to the
principal place of business of the other party.
F. In
the
event that the Trust gives to the Agent written notice of its intention to
terminate this Agreement and appoint a successor transfer agent, the Agent
agrees to cooperate in the transfer of its duties and responsibilities to the
successor, including the transfer of any and all relevant books, records and
other data established or maintained by the Agent under this
Agreement.
G. Should
the Trust exercise its right to terminate, all out-of-pocket expenses associated
with the movement of records and material will be paid by the
Trust.
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10.
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Nature
of the Trust
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A. Article
VII of the Declaration of Trust contains provisions limiting the liability
of
the Trustees, officers, employees and agents of the Trust. The obligations
of
the Trust created hereunder are not personally binding upon, nor shall resort
be
had to the property of, any of the Trustees, officers, employees or agents
of
the Trust or of the shareholders of the Funds, and only that portion of a Fund's
property necessary to satisfy the obligations of that Fund arising hereunder
shall be bound or affected by the operation of this Agreement.
B. Third
Parties. When dealing with third parties on behalf of the Trust or any Fund,
the
Agent shall include such recitals in written documents as may be reasonably
requested by the Trust regarding the limitation of liability of the Board of
Trustees, the Trust's shareholders, and the Trust's officers, employees and
agents to third parties.
C. Separate
Series. It is agreed that the Agent's responsibilities and obligations to each
Fund are separate from its responsibilities and obligations to each other Fund,
and that each Fund's responsibilities and obligations to the Agent are separate
from the responsibilities and obligations of each other Fund.
IN
WITNESS WHEREOF, the authorized representatives of the parties hereto have
executed this Agreement as of the date first written above.
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PFM
Funds
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PFM
Asset Management LLC
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By:__________________________________
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By:__________________________________
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Attest:________________________________
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Attest:_______________________________
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SCHEDULE
A
The
Agreement shall apply to the following Funds, and as full compensation for
the
services and facilities furnished to the Trust and the expenses assumed by
the
Agent under this Agreement, each Fund shall pay to the Agent monthly
compensation calculated daily at the following annual rates:
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Fund
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Applicable
Rate
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Prime
Series - SNAP® Fund Class
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.02
of 1% of average daily net assets
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Prime
Series - Institutional Class
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.09
of 1% of average daily net assets
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Prime
Series - Cash Management Class
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.20
of 1% of average daily net assets
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Prime
Series - IllinoisPrimeSM
Class
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.14
of 1% of average daily net assets
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Government
Series
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.10
of 1% of average daily net assets
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EXHIBIT
A
Duties
of
the Agent
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1.
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Shareholder
Information
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The
Agent
shall maintain a record of the number of shares held by each holder of record
which shall include their addresses and taxpayer identification
numbers.
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2.
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Shareholder
Services
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The
Agent
will investigate all shareholder inquiries relating to shareholder accounts,
and
will answer all correspondence from shareholders and others relating to its
duties hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Agent and the Trust. The Agent shall keep
records of shareholder correspondence and replies thereto, and of the lapse
of
time between the receipt of such correspondence and the mailing of such
replies.
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3.
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State
Registration Reports
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The
Agent
shall furnish the Trust on a state-by-state basis, sales reports, such periodic
and special reports as the Trust may reasonably request, and such other
information, including shareholder lists and statistical information concerning
accounts, as may be agreed upon from time to time between the Trust and the
Agent.
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4.
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Uncertificated
Shares
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With
respect to shares held in open accounts or uncertificated form (i.e.,
no
certificate being issued with respect thereto), the Agent shall maintain
comparable records of the recordholders thereof, including their names,
addresses, and taxpayer identification numbers.
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5.
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Mailing
Communications to Shareholders: Proxy
Materials
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At
the
expense of the Trust, the Agent will address and mail to shareholders of the
Funds, all reports to shareholders, dividend and distribution notices, and
proxy
material for meetings of shareholders. In connection with the meetings of
shareholders, the Agent will prepare shareholder lists, mail, and certify as
to
the mailing of proxy materials, process and tabulate returned proxy cards,
report on proxies voted prior to meetings (act as inspector of election at
meetings and certify shares voted at meetings).
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6.
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Sales
of Shares
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(a)
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Processing
of Investment Checks or Other
Investments
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Upon
receipt of any check or other instrument drawn or endorsed to it as agent for,
or identified as being for the account of a Fund, or drawn or endorsed to the
Distributor of the Funds' shares for the purchase of shares, the Agent shall
stamp the check with the date of receipt, shall forthwith transmit the same
to
the Fund's custodian for collection and, shall record the number of shares
sold,
the trade date and price per share, and the amount of money to be delivered
to
the custodian of the Funds for the sale of such shares.
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(b)
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Issuance
of Shares
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Upon
receipt of notification that the Funds' custodian has received the amount of
money specified in the immediately preceding paragraph, the Agent shall issue
to
and hold in the account of the purchaser/shareholder, or if no account is
specified therein, in a new account established in the name of the purchaser,
the number of shares such purchaser is entitled to receive, as determined in
accordance with applicable Federal law and regulations.
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(c)
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Confirmations
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The
Agent
shall send to purchasers of shares confirmations of their purchases and periodic
statements which will show the new share balance, the shares held under a
particular plan, if any, for withdrawing investments, the amount invested,
and
the price paid for the newly purchased shares, or will be in such other form
as
the Trust and the Agent may agree from time to time. Such confirmations and
statements will be sent at such times as may be required by applicable laws
and
regulations or as may otherwise be agreed to by the Trust and the Agent in
compliance with such laws and regulations.
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(d)
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Suspension
of Sale of Shares
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The
Agent
shall not be required to issue any shares of the Funds where it has received
a
written instruction from the Trust or written notice from any appropriate
Federal or state authority that the sale of the shares of that Fund has been
suspended or discontinued, and the Agent shall be entitled to rely upon such
written instructions or written notification.
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(e)
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Taxes
in Connection with Issuance of
Shares
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Upon
the
issuance of any shares in accordance with the foregoing provisions of this
Section, the Agent shall not be responsible for the payment of any original
issue or other taxes required to be paid in connection with such
issuance.
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(f)
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Returned
Checks
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In
the
event the Agent receives advice from the Fund's custodian that any check or
other order for the payment of money is returned unpaid for any reason, the
Agent will: (i) give prompt notice of such return to the Trust or its designee;
(ii) place a stop transfer order against all shares issued as a result of such
check or order; and (iii) take such actions as the Agent may from time to time
deem appropriate.
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7.
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Redemptions
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(a)
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Requirements
for Transfer or Redemption of
Shares
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The
Agent
shall process all requests from shareholders to transfer or redeem shares of
each Fund in accordance with the procedures set forth in the Prospectus for
the
Fund, including, but not limited to, all requests from shareholders to redeem
shares and all determinations of the number of shares required to be redeemed
to
fund designated monthly payments, automatic payments, or any other such
distribution or withdrawal plan.
The
Agent
will transfer or redeem shares upon receipt of written instructions, accompanied
by such documents as the Agent reasonably may deem necessary to evidence the
authority of the person making such transfer or redemption, and bearing
satisfactory evidence of the payment of stock transfer taxes, if
any.
The
Agent
reserves the right to refuse to transfer or redeem shares until it is satisfied
that the endorsement on the instructions is valid and genuine, and for that
purpose it may require a guarantee of signature by a member firm of a national
securities exchange, by any national bank or trust company, by any member bank
of the Federal Reserve system or by other eligible guarantor institution. The
Agent also reserves the right to refuse to transfer or redeem shares until
it is
satisfied that the requested transfer or redemption is legally authorized,
and
it shall incur no liability for the refusal, in good faith, to make transfers
or
redemptions which the Agent, in its judgment, deems improper or unauthorized,
or
until it is reasonably satisfied that there is no basis to any claims adverse
to
such transfer or redemption.
The
Agent
may, in effecting transactions, rely upon the provisions of the Uniform Act
for
the Simplification of Fiduciary Security Transfers or the provisions of Article
8 of the Uniform Commercial Code, as the same may be amended from time to time
in the Commonwealth of Virginia, which, in the opinion of legal counsel for
the
Trust or of its own legal counsel protect it in not requiring certain documents
in connection with the transfer or redemption of shares. The Trust may authorize
the Agent to waive the signature guarantee in certain cases by written
instructions.
For
the
purposes of the redemption of shares of the Funds which have been purchased
within 15 days of a redemption request, the Trust shall provide the Agent with
written instructions concerning the time within which such requests may be
honored.
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(b)
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Notice
to Custodian and Funds
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When
shares are redeemed, the Agent shall, upon receipt of the instructions and
documents in proper form, deliver to the Funds' custodian and the Trust a
notification setting forth the number of shares to be redeemed. Such redemptions
shall be reflected on appropriate accounts maintained by the Agent reflecting
outstanding shares of the Funds and shares attributed to individual accounts
and, if applicable, any individual withdrawal or distribution plan.
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(c)
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Payment
of Redemption Proceeds
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The
Agent
shall, upon receipt of requests for the redemption of shares, instruct the
Fund's custodian to pay to the shareholder, or his authorized agent or legal
representative, such moneys as are due to the shareholders, all in accordance
with the redemption procedures described in the applicable Prospectus; provided,
however, that the Agent shall instruct the Fund's custodian to pay the proceeds
of any redemption of shares purchased within a period of time agreed upon in
writing by the Agent and the Trust, only in accordance with procedures agreed
to
in writing by the Agent and the Trust, for determining that good funds have
been
collected for the purchase of such shares. The Trust shall indemnify the Agent
in respect of any instructions given by the Agent for any payment of redemption
proceeds or refusal to make such payment, if the payment or refusal to pay
is in
accordance with said written procedures.
The
Agent
shall not effect any redemptions of shares of a Fund pursuant to a plan of
distribution or redemption, or in accordance with any other shareholder request
upon the receipt by the Agent of notification of the suspension of the
determination of that Fund's net asset value.
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8.
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Dividends
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(a)
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Notice
to Agent and Custodian
|
Upon
the
declaration of each dividend and each capital gains distribution by the Board
of
Trustees of the Trust with respect to shares, the Trust shall furnish to the
Agent a copy of a resolution of its Board of Trustees, certified by the
Secretary of the Trust, setting forth the date of the declaration of such
dividend or distribution, the ex-dividend date, the date of payment thereof,
the
record date as of which shareholders entitled to payment shall be determined,
the amount payable per share to the shareholders of record as of that date,
the
total amount payable to the Agent on the payment date, and whether such dividend
or distribution is to be paid in shares of such class at net asset
value.
On
or
before the payment date specified in such resolution of the Board of Trustees,
the Agent will instruct the custodian of the Funds to make payment to the
shareholders of record as of such payment date.
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(b)
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Payment
of Dividends by the Agent
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The
Agent
will, on the designated payment date, automatically reinvest all dividends
required to be reinvested in additional shares at the net asset value of the
applicable Fund (determined on such date), and mail to shareholders statements
at such times as may be required by applicable law or agreed to by the Trust
and
the Agent showing the number of full and fractional shares (rounded to three
decimal places) then currently owned by the shareholders and the net asset
value
of the shares so credited to the shareholders' accounts.
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(c)
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Information
Returns
|
It
is
understood that the Agent shall file such appropriate information returns
concerning the payment of dividends, return of capital, and capital gain
distributions with the proper Federal, state, and local authorities as are
required by law to be filed and shall be responsible for the withholding of
taxes, if any, due on such dividends or distributions to shareholders when
required to withhold taxes under applicable law.
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9.
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Anti-Money
Laundering
|
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(a)
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Background
|
It
is
understood that the Trust is required by Section 352 of the USA Patriot Act
(the
"Act") and the Interim Final Rule (Section 103.130) adopted by the Department
of
the Treasury's Financial Crimes Enforcement Network (the "Rule") to develop
and
implement an anti-money laundering program and monitor the operation of the
program and assess the effectiveness thereof.
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(b)
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Procedures
|
The
Agent
will provide the Trust with written procedures describing various tools designed
to promote the detection and reporting of potential money laundering activity
by
monitoring certain aspects of shareholder activity as well as written procedures
for verifying a customer's identity (the "Procedures"), and the Trust will
delegate to the Agent the day-to-day operation of the Procedures on behalf
of
the Trust. It is contemplated that these Procedures will be amended from time
to
time by the parties as additional regulations are adopted and/or regulatory
guidance is provided relating to the Trust's anti-money laundering
responsibilities.
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(c)
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Reports
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The
Agent
agrees to provide to the Trust (a) prompt written notification of any
transaction or combination of transactions that the Agent believes, based on
the
Procedures, evidence money laundering activity in connection with the Trust
or
any shareholder of the Trust, (b) prompt written notification of any customer(s)
that the Agent reasonably believes, based upon the Procedures, to be engaged
in
money laundering activity, provided that the Trust agrees not to communicate
this information to the customer, (c) any reports received by the Agent from
any
government agency or applicable industry self-regulatory organization pertaining
to the Agent's anti-money laundering monitoring on behalf of the Trust as
provided in this Addendum, (d) prompt written notification of any action taken
in response to anti-money laundering violations as described in (a), (b) or
(c),
and (e) an annual report of its monitoring and customer identification
activities on behalf of the Trust. The Agent shall provide such other reports
on
the monitoring and customer identification activities conducted at the direction
of the Trust as may be agreed to from time to time by the Agent and the
Trust.
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(d)
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Inspection
|
The
Trust
directs, and the Agent acknowledges, that the Agent shall (a) permit federal
regulators access to such information and records maintained by the Agent and
relating to the Agent's implementation of the Procedures on behalf of the Trust,
as they may request, and (b) permit such federal regulators to inspect the
Agent's implementation of the Procedures on behalf of the Trust.
