TRANSFER AGENCY AGREEMENT
THIS AGREEMENT made this 31st day of July, 2002 by and between COMMONWEALTH
CASH RESERVE FUND, INC., a Virginia corporation (the "Fund"), and PFM ASSET
MANAGEMENT LLC, a Delaware limited liability company ("PFM").
W - I - T - N - E - S - S - E - T - H:
WHEREAS, the Fund is a registered open-end, diversified, management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act").
WHEREAS the Fund desires to retain PFM to serve as the Fund's transfer
agent, registrar and dividend dispersing agent, and PFM is
willing to furnish such services;
NOW THEREFORE, in consideration of the premises and the mutual convenants
herein contained, it is agreed between the parties hereto as
follows:
1. Appointment. The Fund hereby appoints PFM to serve as transfer
agent, registrar and dividend disbursing agent for the Fund, for
the periods and times set forth in this Agreement. PFM accepts
such appointment and agrees to furnish the services herein set
forth in return for the compensation as provided for in section
16 of this Agreement.
2. Delivery of Documents. The Fund has furnished PFM with copies
properly certified or authenticated of each of the following:
(a) Resolutions of the Board of Directors of the Fund authorizing the
execution of this Agreement;
(b) Appendix A identifying and containing the signatures of the Fund's
officers and other persons authorized to sign Written Instruction
and give Oral Instructions, each as hereinafter defined, on behalf
of the Fund;
(c) A copy of the Fund's Articles of Incorporation filed with the
Secretary of the State Corporation Commission of the Commonwealth
of Virginia on December 8, 1986, as amended and presently in effect
(the "Articles");
(d) The Fund's By-laws and all amendments thereto (such By-Laws, as
presently in effect and as they shall from time to time be amended
are herein called the "By-laws");
(e) Resolutions of the Fund's Board of Directors approving the Advisory
Agreement between the Fund and PFM Asset Management LLC (the
"Adviser");
(f) Resolutions of the Fund's Board of Directors approving the Plan of
Distribution and also the Distribution Agreement between the Fund
and Commonwealth Financial Group, Inc. (the "Distributor");
(g) Resolutions of the Fund's Board of Directors approving the
Administration Agreement between the Fund and PFM Asset Management
LLC (the "Administrator");
(h) The Fund's Notification of Registration filed pursuant to Section
8(a) of the 1940 Act on Form N-8A as filed with the Securities and
Exchange Commission ("SEC") on December 11, 1986;
(i) The Fund's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended (the "1933 Act") (File No. 33-10754) and
under the 1940 Act as filed with the SEC on December 11, 1986
relating to the shares of the Fund, and all amendments thereto; and
(j) The Fund's most recent Prospectus and Statement of Additional
Information (such prospectus and statement of additional
information, as presently in effect and all amendments and
supplements thereto are herein called the "Prospectus").
The Fund will furnish PFM from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to
the foregoing, if any.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term "Authorized
Person" means an officer of the Fund or other person duly authorized
by the Board of Directors of the Fund to give Oral or Written
Instructions on behalf of the Fund and listed on the Certificate
annexed hereto as Appendix A or any amendment thereto as may be
received by PFM from time to time.
(b) "Oral Instructions". As used in this Agreement, the term "Oral
Instructions" means verbal instruction actually received by PFM
from an Authorized Person or from a person reasonably believed by
PFM to be an Authorized Person.
(c) "Shares". As used in this agreement, the term "Shares" means shares
of common stock, no par value, of the Commonwealth Cash Reserve Fund,
Inc.
(d) "Shareholder". As used in this Agreement, the term "Shareholder"
means a holder of Shares.
(e) "Written Instructions". As used in this Agreement the term "Written
Instructions" means written instructions delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device, and
received by PFM and signed by an Authorized Person unless the Board
of Directors of the Fund specifies otherwise pursuant to a resolution
furnished to PFM pursuant to Section 2(a) hereof.
4. Instructions Consistent with Articles, etc.
(a) Unless otherwise provided in this Agreement, PFM shall act only upon
Oral or Written Instructions. Although PFM may take cognizance of the
provisions of the Articles and By-laws of the Fund, PFM may assume that
Oral or Written Instructions received hereunder are not inconsistent
with any provisions of such Articles or By-laws or any vote, resolution
or proceeding of the Shareholders, of the Board of Directors, or any
committee thereof.
(b) PFM shall be entitled to rely upon Oral or Written Instructions
actually received by PFM pursuant to this Agreement. The Fund agrees
to forward to PFM Written Instructions confirming Oral Instructions in
such a manner that the Written Instructions are received by PFM,
whether by hand delivery, telex, facsimile sending device or otherwise,
as promptly as practicable after Oral Instructions are given to PFM.
The Fund agrees that the fact that such confirming Written Instructions
are not received by PFM shall in no way affect the validity of the
transactions authorized by the Fund by giving Oral Instructions. The
Fund agrees that PFM shall incur no liability to the Fund in acting
upon Oral Instructions given to PFM hereunder concerning such
transactions provided such instructions reasonably appear to have
been received from an Authorized Person.
5. Transactions Not Requiring Instructions.
(a) In the absence of contrary Written Instructions, PFM is authorized to
take the following actions:
(i) issuance, transfer and redemption of Shares in the manner described
in the Prospectus and in conformity with the rules and regulations of
the SEC and the laws of the Commonwealth of Virginia;
(ii) opening, maintenance, servicing and closing of accounts of
Shareholders or prospective Shareholders;
(iii) acting as agent of the Fund in connection with accounts, upon the
terms and subject to the conditions contained in the application
relating to the account;
(iv) causing the reinvestment in Shareholders' accounts of dividends and
distributions declared upon Shares;
(v) processing redemptions;
(vi) examining and approving legal transfers;
(vii) furnishing to Shareholders confirmations of transactions relating to
their Shares;
(viii) preparing and mailing to the Internal Revenue Service and all payees
all information returns and payee statements required under the
Internal Revenue Code in respect to the Fund's dividends and
distributions and taking all other necessary action in connection
with the dividend withholding requirements of that Code;
(ix) mailing to Shareholders, confirmations of purchases and redemptions,
monthly statements, annual and semiannual reports prepared on behalf
of the Fund, and, if so requested by the Fund, mailing new
Prospectuses upon their issue to Shareholders;
(x) preparation and sending such other information from the Fund's
records held by PFM as may be reasonably requested by the Fund;
(xi) maintaining such books and records relating to transactions effected
by PFM as are required by the 1940 Act, or by any other applicable
provision of law, to be maintained by the Fund or its transfer agent
with respect to such transactions, and preserving, or causing to be
preserved, any books and records for such periods as may be required
by any law, rule or regulation.
(b) PFM agrees to act as proxy agent in connection with the holding of
annual or special meetings or Shareholders, mailing to such
Shareholders notices, proxies, and proxy statements in connection
with the holding of such meetings (all of such writings to be
prepared by the Fund at the Fund's cost), receiving and tabulating
votes cast by proxy and communicating to the Fund the results of
such tabulation accompanied by appropriate certificates, and
preparing and furnishing to the Fund certified lists of Shareholders
as of such date, and in such form and containing such information as
may be required by the Fund to comply with any applicable provisions
of the law or the Articles and By-laws relating to such meetings.
(c) PFM agrees to furnish to the Fund such information and at such
intervals as is necessary for the Fund to comply with the
registration requirements and/or reporting requirements of the SEC,
Blue Sky Authorities or other regulatory agencies. PFM will, in
addition to the services herein itemized, perform and do all other
acts and services that are customarily performed and done by other
transfer agents, dividend disbursing agents, and shareholder
servicing agents of open-end mutual funds of the "money market
fund" type.
(d) PFM agrees to provide to the Fund upon request such information as
may reasonably be required to enable the Fund to reconcile the
number of outstanding Shares of the Fund between its records and
the account books of the Fund.
6. Authorized Shares. Shall be the number of shares authorized by
the Articles of Incorporation as may be amended from time to time.
7. Dividends and Distributions. The Fund shall furnish PFM with
appropriate evidence of action by the Fund's Board of Directors
authorizing the daily declaration of dividends and distributions
in respect of Shares as described in the Prospectus. After deducting
any amount required to be withheld by any applicable tax laws, rules
and regulations, PFM shall, as agent of each Shareholder and in
accordance with the instructions in proper form from a Shareholder
and the provisions of the Fund's Articles and the Prospectus, invest
such dividends and distributions in Shares in the manner described
in the Prospectus or if the Shareholder so elects and if the Fund
and PFM should agree to permit such option, pay them in cash. PFM
shall prepare, file with the Internal Revenue Service, and address
and mail to Shareholders such returns and information relating to
dividends and distributions paid by the Fund as are required to be
so prepared, filed and mailed by applicable laws, rules and
regulations, or such substitute form of notice as may from time
to time be permitted or required by the Internal Revenue Service.
On behalf of the Fund, PFM shall withhold and pay on a timely basis
to the appropriate federal authorities any taxes required by
applicable Federal tax laws to be withheld on dividends and
distributions paid by the Fund.
8. Communications with Shareholders.
(a) Communications to Shareholders. Upon request of the Fund PFM will
address and mail all communications by the Fund to its Shareholders,
including reports to Shareholders, dividend and distribution notices
and proxy material for the Fund's meetings of Shareholders. PFM
will receive and tabulate the proxy cards for the meetings of the
Fund's shareholders.
(b) Correspondence. PFM will answer such correspondence received by
it from Shareholders and others relating to its duties hereunder
and such other correspondence as may from time to time be mutually
agreed upon between PFM and the Fund.
9. Records. PFM shall keep the following records:
(a) accounts for each Shareholder showing the following information:
(i) name, address and United States Tax Identification or Social
Security Number;
(ii) number of Shares held for which certificates, if any, have been
issued, including certificate numbers and denominations;
(iii) historical information regarding the account of each Shareholder,
including dividends and distributions paid and the date and price
of all transactions on each Shareholder's account;
(iv) any stop or restraining order placed against a Shareholder's
account;
(v) any correspondence relating to the current maintenance of a
Shareholder's account;
(vi) any information required in order for PFM to perform any
calculations contemplated or required by this Agreement.
(b) Sub-Accounts for each Shareholder requesting such services in
connection with Shares held by such Shareholder for separate
accounts containing the same information for each sub-account
as required by sub-section (a) above.
(c) The books and records pertaining to the Fund which are in the
possession of PFM shall be the property of the Fund. Such books
and records shall be prepared and maintained as required by the
1940 Act and other applicable securities laws, rules and
regulations. The Fund, or the Fund's authorized representatives,
shall have access to such books and records at all times during
PFM's normal business hours. Upon the reasonable request of the
Fund, copies of any such books and records shall be provided by
PFM to the Fund or the Fund's authorized representatives at the
Fund's expense.
10. Reports. PFM shall furnish the Fund such periodic and special
reports and such other information, including Shareholder lists
and statistical information concerning accounts as may be agreed
upon from time to time between the Fund and PFM.
11. Cooperation with Accountants. PFM shall cooperate with the
Fund's independent public accountants and shall take all
reasonable action in the performance of its obligations under
this Agreement to assure that the necessary information is made
available to such accountants for the expression of their
unqualified opinion, including but not limited to the opinion
included in the Fund's annual report on form N-1R.
12. Confidentiality. PFM will treat confidentially and as
proprietary information of the Company all records and other
information relative to the Company 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 Adviser 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).
13. Services Not Exclusive. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and the Adviser shall
be free to furnish similar services to others so long as its
services under this Agreement are not impaired thereby.
14. Equipment Failures. In the event of equipment failures beyond
PFM's control, PFM shall, at no additional expense to the Fund,
take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto. The foregoing obligation
shall not extend to computer terminals located outside of the
premises maintained by PFM. PFM shall enter into and shall
maintain in effect one or more agreements with appropriate
parties making reasonable provision for emergency use of
electronic data processing equipment to the extent that
appropriate equipment is available.
15. Rights to Receive Advice.
(a) Advice of Fund. If PFM shall be in doubt as to any action to be
taken or omitted by it, it may request, and shall receive from
the Fund, directions or advice, including Oral or Written
Instructions where appropriate.
(b) Advice of Counsel. If PFM shall be in doubt as to any question
of law involved in any action to be taken or omitted by PFM, it
may request advice at its own cost from counsel of its own
choosing (who may be counsel for the Advisor, the Fund, the
Administrator, any custodian of the Fund, or the Distributor,
at the option of PFM).
(c) Conflicting Advice. In case of conflict between directions,
advice or Oral or Written Instructions received by PFM pursuant
to sub-section (a) of this section and advice received by PFM
pursuant to sub-section (b) of this section, PFM shall be entitled
to rely on and follow the advice received pursuant to sub-section
(b) of this section.
(d) Protection of PFM. PFM shall be protected in any action or
inaction which it takes in reliance on any directions, advice or
Oral or Written Instruction received pursuant to sub-sections (a)
or (b) of this section and which PFM, after receipt of any such
directions, advice or Oral or Written Instructions, believes in
good faith to be consistent with such directions, advice or Oral
or Written Instructions, as the case may be. However, nothing in
this sub-section shall be construed as imposing upon PFM any
obligation (i) to seek such directions, advice or Oral of Written
Instructions, or (ii) to act in accordance with such directions,
advice or Oral or Written Instructions when received, unless,
under the terms of another provision of this Agreement, the same
is a condition to PFM's properly taking or omitting to take such
action. Nothing in this sub-section shall excuse PFM when an
action or omission on the part of PFM constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard by
PFM of any duties, obligations or responsibilities not expressly
provided for in this Agreement or results from PFM's negligent
failure to perform its duties expressly provided for in this
Agreement or otherwise agreed to in writing by PFM.
16. Compliance with Governmental Rules and Regulations. The Fund
assumes full responsibility for insuring that the contents of
each Prospectus and Statement of Additional Information and
complies with all applicable requirements of the 1933 Act, the
1940 Act, and any laws, rules and regulations of governmental
authorities having jurisdiction.
17. Compensation. As compensation for the services rendered by PFM
during the term of this Agreement, PFM shall be entitled to receive
reimbursement for out-of-pocket expenses attributable to the
performance of its duties under this Agreement and such
compensation as the parties may from time to time agree in writing.
18. Indemnification. The Fund agrees to indemnify and hold harmless
PFM and its nominees from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities
under the 1933 Act, the Securities and Exchange Act of 1934, the
1940 Act, and any state and foreign blue sky laws, all as to be
amended from time to time) and expenses, including, without
limitation, attorney's fees and disbursements, arising directly
or indirectly from any action or thing which PFM takes or does or
omits to take or do (i) at the request or on the direction of or
in reliance on the advice of the Fund, or (ii) upon Oral or Written
Instructions, provided that neither PFM nor any of its nominees
shall be indemnified against any liability to the Fund or to its
Shareholders (or any expenses incident to such liability) arising
out of (x) PFM's or such nominee's willful misfeasance, bad faith
or gross negligence or reckless disregard of its duties in
connection with the performance of any duties, obligations or
responsibilities not expressly provided for in this Agreement, or
(y) PFM's or such nominee's own negligent failure to perform its
duties expressly provided for in this Agreement or otherwise
agreed to by PFM in writing.
19. Responsibility of PFM. PFM shall be under no duty to take any
action on behalf of the Fund except as specifically set forth
herein or as may be specifically agreed by PFM in writing. In
the performance of its duties hereunder, PFM shall be obligated
to exercise care and diligence and to act in good faith and to
use its best efforts within reasonable limits to insure the
accuracy and completeness of all services performed under this
Agreement. PFM shall be responsible for its own negligent failure
to perform its duties under this Agreement, but to the extent that
duties, obligations and responsibilities are not expressly set
forth in this Agreement, PFM shall not be liable to any act or
omission which does not constitute willful misfeasance, bad faith
or gross negligence on the part of PFM or reckless disregard of
such duties, obligations and responsibilities. Without limiting
the generality of the foregoing or of any other provision of this
Agreement, PFM, in connection with its duties under this Agreement
shall not be under any duty or obligation to inquire into and shall
not be liable for or in respect of (a) the validity or invalidity or
authority or lack or authority of any Oral or Written Instructions,
notice or other instrument which conforms to the applicable
requirements of this Agreement, if any, and which PFM reasonably
believes to be genuine, or (b) delays or errors or loss of data
occurring by reason or circumstances beyond PFM's control, including
acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in
section 13), flood or catastrophe, acts of God, insurrection, war,
riots or failure of the mails, transportation, communication or
power supply.
20. Release. PFM understands that the obligations of this Agreement
are not binding upon any Shareholder of the Fund personally, but
bind only the Fund's property.
21. Termination. This Agreement shall continue until termination by
the Fund on 60 days' written notice or by PFM on 90 days' written
notice.
22. Notices. All notices and other communications, including Written
Instructions (collectively referred to as "Notice" or Notices" in
this section), hereunder shall be in writing or by confirming
telegram, cable, telex or facsimile sending device, or reliable
courier. Notices shall be addressed (a) if to PFM at PFM's
address, (b) if to the Fund, at the address of the Fund; or (c)
if to neither of the foregoing, at such other address as shall
have been notified to the sender of any such Notice or other
communication. If the location of the sender of a Notice and
the address of the addressee thereof are, at the time of the
sending, more than 100 miles apart, the Notice may be sent by
first class mail, in which case it shall be deemed to have been
given 5 days after it is sent, or if sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to
have been given immediately, and if the location of the sender of
a Notice and the addressee are, at the time of sending, not more
than 100 miles apart, the Notice may be sent by first class mail,
in which case it shall be deemed to have been given three days
after it is sent, or if sent by messenger, it shall be deemed to
have been given on the day it is delivered, or if sent by
confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately. All postage,
cable, telegram, telex and facsimile sending charges arising from
the sending of a Notice hereunder shall be paid by the sender.
23. Further Actions. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate
the purposes hereof.
24. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party
against which enforcement of such change or waiver is sought.
25. Assignment. This Agreement and the performance hereunder may not
be assigned by PFM without the Fund's prior consent.
26. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supercedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties hereto may embody in one or more
separate documents their agreement, if any, with respect to Oral
Instructions. The captions in this Agreement are included for
convenience or reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect. This Agreement shall be deemed to be a
contract made in Virginia and governed by Virginia law. 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 be binding and shall inure to the benefit of
the parties and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers designated below on the day and
year first above written.
COMMONWEALTH CASH RESERVE FUND, INC.
BY: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
President
PFM ASSET MANAGEMENT LLC
BY: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
Managing Director
