TRANSFER AGENCY AGREEMENT
THIS AGREEMENT made as of July 29, 2004, between COMMONWEALTH CASH RESERVE
FUND, INC., a Virginia corporation (the "Company"), on behalf of the SNAPSM Fund
(the "Fund"), 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 the Transfer Agent to serve as the
transfer agent, registrar and dividend dispersing agent for the Fund, a series
of the Company, and the Transfer Agent is willing to furnish such services;
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 the Transfer Agent to serve as the
transfer agent, registrar and dividend disbursing agent for the Fund for the
periods and times set forth in this Agreement. The Transfer Agent 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
Distribution Agreement between the Company and PFMAM, 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 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") and all amendments thereto;
(i) The Fund's Registration Statement 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 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").
(k) The Fund's most recent Anti-Money Laundering Policy, including a
description of the Fund's 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.
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 Fund 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.
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(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 Fund.
(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 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.
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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 the 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 of the Fund;
(v) processing redemptions;
(vi) examining and approving legal transfers;
(vii) furnishing to Shareholders confirmations of transactions
relating to their Shares in the 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 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 Company and Fund, and, if so
requested by the Company, mailing new Prospectuses upon their
issue to Shareholders;
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(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 Fund 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 Fund
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 other transfer agents, dividend
disbursing agents, and shareholder servicing agents of open-end
mutual Fund 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 Fund between
its records and the account books of the Fund.
6. Authorized Shares. Shall be the number of shares authorized for the Fund
by the Articles of Incorporation as may be amended from time to time.
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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 the Fund as described in the Prospectus. 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 Prospectus of the 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
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 Company, the Transfer Agent 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 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
meetings of Shareholders. The Transfer Agent will receive and
tabulate the proxy cards for the meetings of the Fund's
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.
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9. Records. The Transfer Agent shall keep the following records for the 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 the Transfer Agent 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
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.
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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.
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 Fund, the
Administrator, any custodian of the Fund, or the Distributor, at the option of
the Transfer Agent).
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(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 the Prospectus and
Statement of Additional Information 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 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.
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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 the Transfer Agent 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 Fund 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 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.
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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 become effective as of the date first written
above, 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 ▇▇▇▇ ▇▇▇) 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 Transfer Agent).
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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.
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.
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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.,
on behalf of the SNAPSM Fund.
BY: ________________________________
PFM ASSET MANAGEMENT LLC
BY: _________________________________
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