EXHIBIT (h)(2)
SHAREHOLDER ACCOUNT SERVICES AGREEMENT
This Agreement is made and entered into as of the 16th day of May, 2001
by and between Great Hall Investment Funds, Inc., ("Great Hall"), a corporation
organized and existing under the laws of the State of Minnesota, on behalf of
each portfolio represented by a series of shares of common stock of Great Hall
that adopts this Agreement (the "Funds") (the Funds, together with the date each
Fund adopts this Agreement, are set forth in EXHIBIT A hereto, which shall be
updated from time to time to reflect additions, deletions or other changes
thereto), and Xxxx Xxxxxxxx Incorporated, a corporation organized and existing
under the laws of the State of Minnesota ("DRI"). This Agreement supersedes and
takes the place of the Shareholder Account Services Agreement dated as of
January 2, 1998 between Great Hall and DRI.
W I T N E S S E T H:
WHEREAS, Great Hall is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, DRI serves as the principal underwriter of each Fund's shares
of common stock; and
WHEREAS, DRI performs various dividend disbursing and shareholder
account services (as outlined below) for owners of Fund shares who maintain
evidence of their Fund shares with DRI in a master account (a separate master
account being maintained for each Fund) in the name of DRI as the record owner
of the Fund shares (the "Master Accounts"), each of which is comprised of
individual accounts (the "Individual Accounts") that, in turn, are comprised of
evidence of shares of the applicable Fund acquired by brokerage customers of DRI
(the "Customers"); and
WHEREAS, in consideration for DRI's agreement to perform the
aforementioned services, Great Hall agrees to compensate DRI and to reimburse
certain costs and expenses incurred by DRI in connection with the performance of
said services pursuant to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, Great Hall and DRI hereby agree as follows:
1. SCOPE OF APPOINTMENT; SERVICES.
(a) Subject to the conditions set forth in this Agreement, DRI
hereby undertakes and agrees to perform certain dividend disbursing and
shareholder account services as detailed below (collectively, the "Services")
with respect to the Customers and the Individual Accounts encompassed within
the Master Accounts.
(b) The Services shall include, but not be limited to, the
following:
(1) The maintenance of separate records for each Customer and
Individual Account, which records shall reflect shares purchased and
redeemed and share balances.
(2) The disbursement or crediting to Individual Accounts of
Customers of all proceeds of redemptions of Fund shares and all
dividends and other distributions not reinvested in Fund shares.
(3) The preparation and transmittal to Customers of periodic
account statements showing the total number of shares owned by each
Customer as of the statement closing date, purchases and redemptions of
Fund shares by the Customer during the period covered by the statement,
and the dividends and other distributions paid to the Customer during
the statement period (whether paid in cash or reinvested in Fund
shares).
(4) The preparation and proper transmittal of all required tax
reporting to the Internal Revenue Service, state taxing authorities and
the Customers and the accounting for, reporting and submitting of
withholding taxes, as required by applicable law, on all Individual
Accounts.
(5) The transmittal to Customers of proxy materials, reports,
and other information required to be sent to shareholders under
applicable federal and state securities and other laws, and, upon
request of Great Hall, the transmittal to Customers of material
communications necessary and proper for receipt by all beneficial
shareholders of the Funds.
(6) The transmittal to Great Hall and its transfer agent each
business day of the net purchase and redemption orders by and on behalf
of the Customers during such day.
(7) The transmittal to Great Hall or its designee of such
periodic reports or information as is necessary to enable Great Hall to
comply with state Blue Sky requirements.
(8) The performance of such additional dividend disbursing and
shareholder account services with respect to the Master Accounts, the
Individual Accounts and the Customers as Great Hall shall reasonably
request from time to time; PROVIDED, HOWEVER, that this Agreement does
not and shall not contemplate the provision of any services by the DRI:
(A) that would necessitate that DRI be registered as a transfer agent
pursuant to the federal securities laws; or (B) the payment for which
would be required to be made under a plan of distribution adopted by
Great Hall in accordance with Rule 12b-1 under the 1940 Act.
(c) DRI agrees to provide the necessary facilities, equipment and
personnel to perform its duties and obligations hereunder in accordance with
industry practice.
(d) Pending the effectiveness of the proposed merger of DRI and Interra
Clearing Services Inc. ("Clearing"), an affiliate of DRI, Great Hall authorizes
the delegation by DRI of responsibility for performing one or more of the
Services to Clearing. Notwithstanding any provision to the contrary herein, this
Agreement shall survive said merger, and the surviving entity of said merger (to
be named Xxxx Xxxxxxxx Incorporated) shall, immediately upon the completion and
effectiveness of said merger, succeed to all of the rights and obligations of
DRI hereunder.
2. RECORDS; MISCELLANEOUS COVENANTS.
(a) DRI represents and covenants that (1) during the term of this
Agreement, DRI will comply with all laws, rules and regulations applicable to
its provision of the Services hereunder and (2) DRI has, and during the term of
this Agreement will continue to have, full corporate power and authority
necessary to enter into and to perform the terms of this Agreement.
(b) DRI will maintain customary records in connection with the
provision of Services hereunder. Upon the request of Great Hall, DRI will
provide to Great Hall or its agents or representatives copies of such records as
may be necessary to enable Great Hall or its agents or representatives to
monitor and review the Services, or to comply with any request of a governmental
body or self-regulatory organization or a Fund shareholder. DRI agrees that it
will permit Great Hall or its representatives to
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have reasonable access to their personnel and records in order to facilitate the
monitoring of the performance and quality of the Services.
3. NOTICE OF NON-PERFORMANCE.
DRI hereby agrees to promptly notify Great Hall if for any reason DRI
is unable to perform fully and promptly any of its obligations under this
Agreement.
4. NO LIMIT ON OTHER ACTIONS BY GREAT HALL.
In no way shall the provisions of the Agreement limit the authority of
Great Hall to take such action as it may deem appropriate or advisable in
connection with all matters relating to the operations of Great Hall and the
sale of Fund shares.
5. COMPENSATION.
In consideration of the performance of the Services by DRI hereunder,
Great Hall agrees to cause each Fund to pay DRI a fee (and to reimburse DRI for
certain out-of-pocket expenses) in such amount, at such time and in such manner
as is set forth with respect to each Fund in EXHIBIT A hereto.
6. INDEMNIFICATION.
(a) Great Hall agrees to indemnify DRI and to hold DRI harmless from
and against any loss by or liability to any Fund or a third party (including
reasonable legal fees and other reasonable out-of-pocket costs of defending
against any related claim or suit), in connection with any claim or suit
assessing any such liability arising out of or attributable to actions taken by
DRI pursuant to this Agreement, unless DRI acted negligently or in bad faith.
(b) DRI will hold harmless and indemnify Great Hall and each Fund from
and against any loss or suit (including reasonable legal fees and other
reasonable out-of-pocket costs of defending any related claim or suit) arising
out of DRI's negligent or bad faith failure to comply with the terms of this
Agreement or breach of any representation, warranty or covenant contained
herein.
7. EFFECTIVE DATE; TERMINATION.
This Agreement shall be effective with respect to each Fund as of the
date set forth opposite such Fund's name on Exhibit A hereto. This Agreement may
be terminated without penalty at any time by either party upon 30 days' written
notice to the other party.
8. INTERPRETATION; GOVERNING LAW.
This Agreement shall be subject to and interpreted in accordance with
all applicable provisions of law, including, without limitation, the 1940 Act
and the rules and regulations promulgated thereunder. To the extent that the
provision herein contained conflict with any such applicable provisions of law,
the latter shall control. The laws of the State of Minnesota shall otherwise
govern the construction, validity and effect of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
GREAT HALL INVESTMENT FUNDS, INC. XXXX XXXXXXXX INCORPORATED
By By
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Name: Xxxx X. Xxxx Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer Title: Senior Vice President
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EXHIBIT A
TO
SHAREHOLDER ACCOUNT SERVICES AGREEMENT
FUND EFFECTIVE DATE MONTHLY FEE
---- -------------- -----------
Great Hall Prime Money May 16, 2001 1/12 of $21.00 per year per customer
Market Fund (Series A) account
Great Hall U.S. Government May 16, 2001 1/12 of $21.00 per year per customer
Money Market Fund (Series B) account
Great Hall Tax-Free Money May 16, 2001 1/12 of $21.00 per year per customer
Market Fund (Series C) account
Great Hall Institutional Prime May 16, 2001 1/12 of $21.00 per year per customer
Money Market Fund (Series F) account
Great Hall Institutional Tax-Free May 16, 2001 1/12 of $21.00 per year per customer
Money Market Fund (Series G) account
The monthly fee shall be paid within ten business days following the
end of the month covered by such payment. The Funds shall also reimburse DRI for
reasonable postage and statement printing expenses incurred by DRI in connection
with its provision of the Services.
