ADMINISTRATION AGREEMENT
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AGREEMENT, made as of January 27, 2004 between COMMONWEALTH CASH RESERVE
FUND, INC., a Virginia corporation (the "Company") and PFM ASSET MANAGEMENT LLC,
a Delaware limited liability company (the "Administrator").
W - I - T - N - E - S - S - E - T - H:
WHEREAS, the Company is a registered open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS the Company desires to appoint the Administrator to perform certain
administrative services for the Company and for investment portfolios that may
be authorized by the Company's Board of Directors (the "Funds"); and
WHEREAS, the Company currently offers two separate investment portfolios,
Commonwealth Cash Reserve Fund ("Prime Portfolio") and CCRF Federal Portfolio
("Federal Portfolio) (collectively, the "Portfolios"); and
WHEREAS, the Company's Board of Directors has established for each of the
Portfolios an institutional series of shares ("Institutional Class") and an
investor series of shares ("Investor Class") each of which is designed to offer
different services to holders of the respective classes;
NOW THEREFORE, in consideration of the premises and the mutual convenants
herein contained, it is agreed between the parties hereto as follows:
1. DELIVERY OF DOCUMENTS. The Company has furnished the Administrator with
copies properly certified or authenticated of each of the following:
(a) The Company's Articles of Incorporation, as filed with the Clerk
of the State Corporation Commission of the Commonwealth of Virginia on
December 8, 1986, and all amendments thereto (such Articles of
Incorporation, as presently in effect and as it shall from time to time be
amended, is herein called the "Articles of Incorporation");
(b) The Company's By-laws, and amendments thereto (such By-laws, as
presently in effect and as they shall from time to time be amended, is
herein called the "By-laws");
(c) Resolutions of the Company's Board of Directors authorizing the
appointment of the Administrator and approving this Agreement;
(d) The Funds' Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission ("SEC") and
all amendments thereto;
(e) The Funds' Registration Statements on Form N-1A under the
Securities Act of 1933 as amended ("1933 Act") and under the 1940 Act as
filed with the SEC on and all amendments thereto; and
(f) The Funds' most recent Prospectuses and Statements of Additional
Information (such Prospectuses, and Statements of Additional Information as
presently in effect and all amendments and supplements thereto are herein
called the "Prospectuses').
The Company will furnish the Administrator, from time to time, executed
copies of all amendments and supplements to the foregoing.
In consideration of the mutual promises and agreements herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed by and between the parties hereto as follows:
2. IN GENERAL.
The Administrator agrees, all as more fully set forth herein, to perform,
at its own expense, the functions set forth herein for the Company.
3. DUTIES AND OBLIGATIONS OF THE ADMINISTRATOR WITH RESPECT TO THE COMPANY.
(a) Subject to the succeeding provisions of this section and subject to the
direction and control of the Board of Directors of the Company, the
Administrator shall provide all
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administrative services to the Company, other than those relating to the Funds'
investment portfolios and the maintenance of its accounting books and records.
As part of such duties, the Administrator shall:
(i) provide office space and equipment in connection with the
maintenance of the headquarters of the Company;
(ii) maintain the Company's books and records (other than accounting
books and records), oversee the insurance relationships of the Company, and
prepare (or assist counsel and auditors in the preparation of) for the
Company all required tax returns, proxy statements and reports to the
Company's shareholders and directors and, [AT THE ADMINISTRATOR'S EXPENSE
TO THE EXTENT THAT THEY ARE NOT PAID FOR DIRECTLY BY THE COMPANY], reports
to and other filings with the Securities and Exchange Commission and any
other governmental agency;
(iii) arrange for the preparation, on behalf of the Company [(AT
ADMINISTRATOR'S EXPENSE TO THE EXTENT THEY ARE NOT PAID FOR DIRECTLY BY THE
COMPANY)], of such application and reports as may be necessary to register
or maintain the registration of the Company, Funds and/or shares of the
Funds under the securities of "blue-sky" laws of the Commonwealth of
Virginia and such other states in which the shares of the Funds may be
offered for sale;
(iv) respond to all inquiries or other communications of shareholders
of the Company and broker-dealers, if any;
(v) oversee all relationships between the Funds and their respective
custodians, including such administrative matters as are applicable to the
issuance or redemption of the Funds' shares; and
(vi) liaison with the Company's independent public accountants;
(b) All activities performed by the Administrator under this Section shall
at all times conform to, and be in accordance with, any requirements imposed by:
(1) the provisions of the
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1940 Act and of any rules or regulations in force thereunder; and (2) any other
applicable provisions of law; and (3) the provisions of the Articles of
Incorporation and By-laws of the Company as amended from time to time; and (4)
any policies and determinations of the Board of Directors of the Company; and
(5) fundamental investment policies of each Fund, as reflected in the Funds'
registration statements under the 1940 Act, or as amended by the shareholders of
that Fund.
(c) Nothing in this Agreement shall prevent the Administrator or any
officer thereof from acting as investment adviser or manager for any person,
firm or corporation and this Agreement shall not in any way limit or restrict
the Administrator or any of its partners, officers, stockholders or employees
from buying, selling or trading any securities for its own or their own accounts
or for the accounts of others for whom it or they may be acting; provided,
however, that the Administrator expressly represents that it will undertake no
activities which, in its judgment will adversely affect the performance of its
obligations to the Company under this Agreement.
4. CONFIDENTIALITY.
Administrator will treat confidentially and as proprietary information of
the Company and the Funds all records and other information relative to the
Company and the Funds and prior, present or potential shareholders, and will not
use such records and information for any purpose other than performance of its
responsibilities and duties hereunder (except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld and will be deemed granted where the
Administrator may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Company).
5. SERVICES NOT EXCLUSIVE.
The services furnished by the Administrator hereunder are deemed not to be
exclusive, and the Administrator shall be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
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6. OFFICE SPACE AND FACILITIES.
The Administrator agrees that it will, at its own expense, provide office
space and facilities, equipment and personnel for the performance of its
functions hereunder.
7. COMPENSATION OF THE ADMINISTRATOR.
For the services rendered hereunder with respect to each Fund, the
Administrator shall be entitled to, and agrees to accept as full compensation
therefor, compensation in accordance with Schedule A hereto.
8. DURATION AND TERMINATION.
(a) This Agreement shall go into effect as of the effective date of the
Company's prospectus that reflects both the Institutional and Investor share
classes, anticipated to be January 30, 2004, and its implementation is
authorized by the Board of Directors of the Company, provided that all
regulatory requirements have been met, and shall, unless terminated as
hereinafter provided, continue in effect for a period of two years. Thereafter,
if not terminated, this Agreement shall continue in effect for successive annual
periods, but only so long as such continuance is specifically approved at least
annually by the Company's Board of Directors, including the vote of a majority
of the Directors who are not parties to this Agreement or "interested persons"
(as defined in the 0000 Xxx) of any such party cast in person at a meeting
called for the purpose of voting on such approval.
(b) This Agreement may be terminated by the Administrator at any time
without penalty upon giving the Company sixty (60) days' written notice (which
notice may be waived by the Company) and may be terminated by the Company at any
time without penalty upon giving the Administrator sixty (60) days' written
notice (which notice may be waived by the Administrator) provided that such
termination by the Company shall be directed or approved by the vote of a
majority of all of its Directors in office at the time, including a majority of
the Directors who are not interested persons (as defined in the 0000 Xxx) of the
Company.
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9. AMENDMENT OF THIS AGREEMENT. No provisions of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
10. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Virginia law. Unless otherwise expressly stated, all references
herein to the Services to be provided by the Administrator to the "Fund" or the
"Company" shall apply equally to all portfolios and share classes.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by their duly authorized officers and their seals to be hereunto
affixed.
COMMONWEALTH CASH RESERVE FUND, INC.
BY: ________________________________
PFM ASSET MANAGEMENT LLC
BY: _________________________________
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SCHEDULE A
For the services rendered hereunder, the Company will pay the Administrator from
assets belonging to the Company the following fees, subject to the limitation
that compensation shall be payable with respect to services only by the
particular Portfolio and share Class to which such services are provided.
PRIME PORTFOLIO
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PORTFOLIO AND SHARE CLASS ADMINISTRATIVE FEE - AN ANNUAL
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FEE, COMPUTED DAILY AND PAID
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MONTHLY AT AN ANNUAL RATE OF:
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Prime Portfolio - Institutional Class .05 of 1% of average daily net assets
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Prime Portfolio - Investor Class .15 of 1% of average daily net assets
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FEDERAL PORTFOLIO
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Federal Portfolio - Institutional Class .05 of 1% of average daily net assets
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Federal Portfolio - Investor Class .15 of 1% of average daily net assets
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