TRANSFER AGENCY AGREEMENT
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THIS 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 ("Transfer Agent").
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 (the
"1940 Act").
WHEREAS, the Company desires to retain PFM to serve as the Transfer Agent,
registrar and dividend dispersing agent for investment portfolios that may be
authorized by the Company's Board of Directors (the "Funds"), and PFM is willing
to furnish such services; 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 serve
the needs of a different group of investors;
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. Company hereby appoints PFM to serve as the Transfer Agent,
registrar and dividend disbursing agent for the Funds 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 17 of this Agreement.
2. DELIVERY OF DOCUMENTS. The Company has furnished the Transfer Agent with
copies properly certified or authenticated of each of the following:
(a) Resolutions of the Board of Directors of the Company authorizing the
execution of this Agreement;
(b) Appendix A identifying and containing the signatures of the Company's
officers and other persons authorized to sign Written Instruction and
give Oral Instructions, each as hereinafter defined, on behalf of the
Company.
(c) A copy of the Company'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 Company'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 Company's Board of Directors approving the Advisory
Agreement between the Fund and PFM Asset Management LLC (the
"Adviser");
(f) Resolutions of the Company's Board of Directors approving the Plan of
Distribution and also the Distribution Agreement between the Company
and Commonwealth Financial Group, Inc. (the "Distributor");
(g) Resolutions of the Company's Board of Directors approving the
Administration Agreement between the Fund and PFM Asset Management LLC
(the "Administrator");
(h) The Funds' 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") and all amendments thereto;
(i) The Funds' Registration Statements on Form N-1A under the Securities
Act of 1933, as amended (the "1933 Act")and under the 1940 Act as
filed with the SEC, and all amendments thereto; and
(j) 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").
(k) The Funds' most recent Anti-Money Laundering Policy, including a
description of the Funds' Customer Identification Program.
The Company will furnish the Transfer Agent from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
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3. DEFINITIONS.
(a) "AUTHORIZED PERSON". As used in this Agreement, the term "Authorized
Person" means an officer of the Company or other person duly
authorized by the Board of Directors of the Company to give Oral or
Written Instructions on behalf of the Company and Funds and listed on
the Certificate annexed hereto as Appendix A or any amendment thereto
as may be received by the Transfer Agent from time to time.
(b) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral
Instructions" means verbal instruction actually received by the
Transfer Agent from an Authorized Person or from a person reasonably
believed by the Transfer Agent 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 Funds.
(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 the Transfer Agent and signed by an Authorized Person
unless the Board of Directors of the Company specifies otherwise
pursuant to a resolution furnished to the Transfer Agent pursuant to
Section 2(a) hereof.
4. INSTRUCTIONS CONSISTENT WITH ARTICLES, ETC.
(a) Unless otherwise provided in this Agreement, the Transfer Agent shall
act only upon Oral or Written Instructions. Although the Transfer
Agent may take cognizance of the provisions of the Articles and
By-laws of the Company, the Transfer Agent 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) The Transfer Agent shall be entitled to rely upon Oral or Written
Instructions actually received by the Transfer Agent pursuant to this
Agreement. The Company agrees to
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forward to the Transfer Agent Written Instructions confirming Oral
Instructions in such a manner that the Written Instructions are
received by the Transfer Agent, whether by hand delivery, telex,
facsimile sending device or otherwise, as promptly as practicable
after Oral Instructions are given to the Transfer Agent. The Company
agrees that the fact that such confirming Written Instructions are not
received by the Transfer Agent shall in no way affect the validity of
the transactions authorized by the Company by giving Oral
Instructions. The Company agrees that the Transfer Agent shall incur
no liability to the Company in acting upon Oral Instructions given to
the Transfer Agent 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, the Transfer Agent is
authorized to take the following actions:
(i) issuance, transfer and redemption of Shares in the manner
described in the Prospectus for each Fund 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 Company 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 in each Fund;
(v) processing redemptions;
(vi) examining and approving legal transfers;
(vii)furnishing to Shareholders confirmations of transactions
relating to their Shares in each Fund;
(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 each Funds'
dividends and distributions and taking all other necessary action
in connection with the dividend withholding requirements of that
Code;
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(ix) mailing to Shareholders, confirmations of purchases and
redemptions, monthly statements, annual and semiannual reports
prepared on behalf of the Company and Funds, and, if so requested
by the Company, mailing new Prospectuses upon their issue to
Shareholders;
(x) preparation and sending such other information from the Company
and Fund's records held by the Transfer Agent as may be
reasonably requested by the Company;
(xi) maintaining such books and records relating to transactions
effected by the Transfer Agent as are required by the 1940 Act,
or by any other applicable provision of law, to be maintained by
the Company 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) The Transfer Agent agrees to act as proxy agent in connection with the
holding of annual or special meetings of 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 Company at the Company's cost), receiving and tabulating votes
cast by proxy and communicating to the Company the results of such
tabulation accompanied by appropriate certificates, and preparing and
furnishing to the Company certified lists of Shareholders as of such
date, and in such form and containing such information as may be
required by the Company or the Funds to comply with any applicable
provisions of the law or the Articles and By-laws relating to such
meetings.
(c) The Transfer Agent agrees to furnish to the Company such information
and at such intervals as is necessary for the Company and the Funds to
comply with the registration requirements and/or reporting
requirements of the SEC, Blue Sky Authorities or other regulatory
agencies. The Transfer Agent will, in addition to the services herein
itemized, perform and do all other acts and services that are
customarily performed and done by
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other transfer agents, dividend disbursing agents, and shareholder
servicing agents of open-end mutual funds of the "money market fund"
type.
(d) The Transfer Agent agrees to provide to the Company upon request such
information as may reasonably be required to enable the Company to
reconcile the number of outstanding Shares of the Funds between its
records and the account books of the Funds.
6. AUTHORIZED SHARES. Shall be the number of shares authorized for each
Fund by the Articles of Incorporation as may be amended from time to time.
7. DIVIDENDS AND DISTRIBUTIONS. The Company shall furnish the Transfer
Agent with appropriate evidence of action by the Company's Board of Directors
authorizing the daily declaration of dividends and distributions in respect of
Shares in each Fund as described in the Prospectuses. After deducting any amount
required to be withheld by any applicable tax laws, rules and regulations, the
Transfer Agent shall, as agent of each Shareholder and in accordance with the
instructions in proper form from a Shareholder and the provisions of the
Company's Articles and the Prospectus, invest such dividends and distributions
in Shares in the manner described in the Prospectuses of each Fund or if the
Shareholder so elects and if the Company and the Transfer Agent should agree to
permit such option, pay them in cash. The Transfer Agent 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 each
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
Company, 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 Funds.
8. COMMUNICATIONS WITH SHAREHOLDERS.
(a) COMMUNICATIONS TO SHAREHOLDERS. Upon request of the Company the
Transfer Agent will address and mail all communications by the Company
to Fund Shareholders, including reports to Shareholders, dividend and
distribution notices and proxy material for the
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meetings of Shareholders. The Transfer Agent will receive and tabulate
the proxy cards for the meetings of the Funds' shareholders.
(b) CORRESPONDENCE. The Transfer Agent 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 the Transfer Agent and the Company.
9. RECORDS. The Transfer Agent shall keep the following records for each
Fund:
(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 the Transfer Agent 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 Company which are in the
possession of PFM shall be the property of the Company. Such books and
records shall be prepared and maintained as required by the 1940 Act
and other applicable securities laws, rules and regulations. The
Company, or the Company's authorized representatives, shall have
access to such books and records at all times during the Transfer
Agent's normal business hours. Upon the reasonable request of the
Company, copies of any such books and
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records shall be provided by the Transfer Agent to the Company or the
Company's authorized representatives at the Company's expense.
10. REPORTS. The Transfer Agent 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 Company and the Transfer Agent.
11. COOPERATION WITH ACCOUNTANTS. The Transfer Agent shall cooperate with
the Company and 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 Company's annual report to shareholders.
12. CONFIDENTIALITY. The Transfer Agent 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 Transfer
Agent 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 Transfer Agent 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 Transfer
Agent's control, the Transfer Agent shall, at no additional expense to the
Company, 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 the Transfer
Agent. The Transfer Agent 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.
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15. RIGHTS TO RECEIVE ADVICE.
(a) ADVICE OF FUND. If the Transfer Agent shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall receive
from the Company, directions or advice, including Oral or Written
Instructions where appropriate.
(b) ADVICE OF COUNSEL. If the Transfer Agent shall be in doubt as to any
question of law involved in any action to be taken or omitted by the
Transfer Agent, it may request advice at its own cost from counsel of
its own choosing (who may be counsel for the Transfer Agent, the
Company, the Funds, the Administrator, any custodian of the Funds, or
the Distributor, at the option of the Transfer Agent).
(c) CONFLICTING ADVICE. In case of conflict between directions, advice or
Oral or Written Instructions received by the Transfer Agent pursuant
to sub-section (a) of this section and advice received by the Transfer
Agent pursuant to sub-section (b) of this section, the Transfer Agent
shall be entitled to rely on and follow the advice received pursuant
to sub-section (b) of this section.
(d) PROTECTION OF THE TRANSFER AGENT. The Transfer Agent 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 the Transfer Agent,
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 the Transfer Agent any obligation (i) to seek such
directions, advice or Oral or 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 the Transfer
Agent's properly taking or omitting to take such action. Nothing in
this sub-section shall excuse the Transfer Agent when an action or
omission on the part of the Transfer Agent constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard by the
Transfer Agent of any duties, obligations or responsibilities not
expressly provided for in this Agreement or results from the Transfer
Agent's negligent failure to perform its duties expressly provided for
in this Agreement or otherwise agreed to in writing by the Transfer
Agent.
16. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The Company assumes
full responsibility for insuring that the contents of each Prospectus and
Statement of Additional Information
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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 the Transfer
Agent during the term of this Agreement, the Transfer Agent shall be entitled to
compensation in accordance with schedule A hereto.
18. INDEMNIFICATION.
(a). The Company agrees to indemnify and hold harmless the Transfer
Agent 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 the Transfer Agent 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 Company,
or (ii) upon Oral or Written Instructions, provided that neither the
Transfer Agent nor any of its nominees shall be indemnified against any
liability to the Company or to its Shareholders (or any expenses incident
to such liability) arising out of (x) the Transfer Agent 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) the
Transfer Agent 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.
(b). In the event that the Transfer Agent seeks indemnification under
this provision with respect to any action taken (or not taken) in
connection with the provision of services, the Transfer Agent agrees that
the Company will be obligated to satisfy any obligation that it may have
under such indemnification provision only out of the assets of the
portfolio with respect to which the action taken (or not taken) by the
Transfer Agent related.
19. RESPONSIBILITY OF THE TRANSFER AGENT. The Transfer Agent shall be under
no duty to take any action on behalf of the Company or the Funds except as
specifically set forth herein or as may be specifically agreed by the Transfer
Agent in writing. In the performance of its duties hereunder, the
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Transfer Agent 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. The
Transfer Agent 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, the Transfer
Agent shall not be liable for any act or omission which does not constitute
willful misfeasance, bad faith or gross negligence on the part of the Transfer
Agent or reckless disregard of such duties, obligations and responsibilities.
Without limiting the generality of the foregoing or of any other provision of
this Agreement, the Transfer Agent, 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 the Transfer Agent reasonably believes to be genuine, or (b)
delays or errors or loss of data occurring by reason or circumstances beyond the
Transfer Agent'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. ANTI-MONEY LAUNDERING. The Transfer Agent will annually certify to the
Company that it has implemented an anti-money laundering program and that, in
connection with such program, the Transfer Agent will perform the specific
requirements of the Company's Customer Identification Program.
21. RELEASE. The Transfer Agent understands that the obligations of this
Agreement are not binding upon any Shareholder of the Company personally, but
bind only the Company's property.
22. DURATION AND TERMINATION.
(a) This Agreement shall go into effect as of the effective date of the
prospectus relating to the two 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
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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 Transfer Agent at any time
without penalty upon giving the Company ninety (90) 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 Transfer agent sixty (60) days' written
notice (which notice may be waived by the Administrator).
23. 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 the Transfer Agent at the Transfer Agent's address, (b) if to the Company, at
the address of the Company; 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.
24. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
25. 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.
26. ASSIGNMENT. This Agreement and the performance hereunder may not be
assigned by the Transfer Agent without the Company's prior consent.
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27. 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: ________________________________
PFM ASSET MANAGEMENT LLC
BY: _________________________________
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SCHEDULE A
For the services rendered hereunder, the Transfer Agent will be entitled to
compensation as follows:
PRIME PORTFOLIO
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Portfolio and Share Class Compensation
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Prime Portfolio - Institutional Class
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Prime Portfolio - Investor Class
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FEDERAL PORTFOLIO
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Federal Portfolio - Institutional Class
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Federal Portfolio - Investor Class
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