TRANSFER AGENCY AGREEMENT
THIS AGREEMENT made this 21st day of November,
1995 by and between COMMONWEALTH CASH RESERVE FUND, INC.,
a Virginia corporation (the "Fund"), and PUBLIC FINANCIAL
MANAGEMENT, INC., a Pennsylvania corporation ("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") currently offering one class of shares; and
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 dispersing 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 Instruction, 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 Public Financials
Management, Inc. (the "Advisor");
(f) Resolutions of the Fund's Board of Directors approving
the Plan of Distribution and also the Distribution 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 Pub Fin Mgmt,
Inc. (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-1 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 share 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 Instruction 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 Instruction 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 ant 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 Instruction 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 annual, semiannual and quarterly
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 many 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. The Articles authorizer the Board of Directors
of the Fund to issue 500,000,000 Shares.
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 is 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 Services, 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 of 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 agrees on behalf of itself and its employees
to treat confidentially all records and other information acquired in
carrying out its duties under this Agreement, relative to the Fund and
its present or potential Shareholders and with regard to the Distributor
and its prior, present or potential customers, except, after prior
notification to and approval in writing by the Fund, which approval
shall not be unreasonably withheld and may not be withheld, and shall
be deemed granted, where PFM may be exposed to civil or criminal
liability or contempt proceedings for failure to comply, when requested
to divulge such information by duly constituted authorities, or when so
requested by the Fund.
13. 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.
14. 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 and obligations (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.
15. Compliance with Governmental Rules and Regulations. The Fund assumes
full responsibility for insuring that the contents of each Prospectus
complies with all applicable requirements of the 1933 Act, the 1940 Act,
and any laws, rules and regulations of governmental authorities having
jurisdiction.
16. 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.
17. 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 our 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.
18. 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 it's 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.
19. 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.
20. Termination. This Agreement shall continue until termination by the
Fund on 60 days' written notice or by PFM on 90 days' written notice.
21. 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 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 send 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, telex and facsimile sending
charges arising from the sending of a Notice hereunder shall be paid by
the sender.
22. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
23. Amendments. This Agreement of 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.
24. Assignment. This Agreement and the performance hereunder may not be
assigned by PFM without the Fund's prior consent.
25. 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 the Agreement ate included for 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.
/s/ COMMONWEALTH CASH RESERVE FUND, INC.
BY: ________________________________
/s/ PUBLIC FINANCIAL MANAGEMENT, INC.
BY: _________________________________
