MEMORIAL FUNDS
SHAREHOLDER SERVICE AGREEMENT
AGREEMENT made this October 1, 2002, between Memorial Funds (the "Trust"),
a Delaware Trust with its principal place of business at 000 Xxxxx Xxxx, Xxxxx
0000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 and Parkway Advisors Group, Inc. d/b/a
Parkway Solutions ("Parkway"), a Nevada corporation organized under the laws of
the State of Nevada with its registered place of business at 0000 Xxxxxxxx'x
Xxxxxxx, Xxxxxxx, Xxxxx 00000.
WHEREAS, the Trust has adopted a shareholder Service Plan (the "Service
Plan") with respect to each series of the Trust (each a "Fund" and collectively
the Fund") that authorizes the Trust to pay and all amounts of such payments to
various persons; and
WHEREAS, Parkway, pursuant to a Shareholder Service Agreement, dated
October 1, 2002, receives fees from the Trust for maintaining and providing
services to shareholder accounts of each series of the Trust and is willing to
perform those services on the terms and conditions set forth in this Agreement.
SECTION 1. SERVICES
Parkway shall provide any of those services primarily intended for the
servicing and maintenance of shareholder accounts of each Fund ("service
activities") with respect to its various customers. Parkway shall not be
obligated to perform any specific service for its clients. Parkway's appointment
shall be nonexclusive and Parkway may enter into similar agreements with other
persons. Parkway may act as, and be compensated for acting as, a Processing
Organization pursuant to a separate agreement.
SECTION 2. COMPENSATION
(A) As compensation for Parkway's service activities with respect to each
Fund, Trust shall pay Parkway fees in the amount listed on Appendix A
to this Agreement (the "Payments"). The Payments shall be delivered by
Parkway to Parkway to an account of Parkway's choice or any other
source as Parkway may designate in writing.
(B) The payments shall be accrued daily and paid monthly or at such other
interval as the parties shall agree; provided, however, that in no
event will Parkway be required to make any payments for service
activities in an amount greater than that which are paid by the
respective Fund for such services.
(C) The Trust has adopted a shareholder services plan permitting the Trust
to compensate financial institutions for acting as shareholder
servicing agents for their customers. Under this plan, the Trust has
entered into an agreement with Parkway. Parkway performs certain
shareholder services not provided by the Transfer Agent and is paid
fees at an annual rate of 0.25 percent of the average daily net assets
of the share of the Fund owned by investors for which Parkway
maintains a servicing relationship.
Memorial Funds Form N-1A - Exhibit (h)(2) Page 1
(D) On behalf of each Fund, Parkway may spend such amounts and incur such
expenses as it deems appropriate or necessary on any service
activities. Parkway shall be solely liable for any expenses it incurs.
SECTION 3. SERVICE AND DISTRIBUTION ACTIVITIES
Expenses for service activities may include compensation to employees and
expenses, including overhead and telephone and other communication expenses of
Parkway. Service activities include (i) answering shareholder inquiries
regarding the manner in which purchases, exchanges and redemptions of shares of
the Trust may be effected and other matters pertaining to the Trust's services;
(ii) providing necessary personnel and facilities to establish and maintain
shareholder accounts and records; (iii) assisting shareholders in arranging
processing purchase, exchange and redemption transactions; (iv) arranging for
the wiring of funds; (v) guaranteeing shareholder signatures in connection with
redemption orders and transfers and changes in shareholder-designated accounts;
(vi) integrating periodic statements with other shareholder transactions; and
(vii) providing such other related services as the shareholder may request or
the Parkway may provide.
SECTION 4. REPRESENTATIONS OF PARKWAY
Parkway represents that:
(a) the compensation payable to it under this Agreement in connection with
the investment of its customers' assets in a fund (i) will be
disclosed by Parkway to its customers, (ii) will be authorized by its
customers, (iii) will not result in an excessive fee to Parkway, and
(iv) will not result in fees to Parkway in violation of applicable
federal and state laws and regulations;
(b) if it is a member of the NASD, it shall abide by the Rules of Fair
practice of the NASD;
(c) in connection with sales and offers to sell shares of a Fund, it will
furnish to or otherwise ensure that each person to whom any such sale
or offer is made, a copy of the Fund's then current prospectus;
(d) the performance of all its obligation hereunder will comply with all
applicable laws and regulations, including any applicable Federal
securities law and any requirements to deliver confirmations to its
customers, the provision of its customers, the provisions of it
charter documents and by laws and all material contractual obligations
binding upon Parkway; and
(e) after Parkway becomes so aware, it will promptly inform Parkway of any
change in applicable laws or regulations (or interpretations thereof)
or in its charter or by-laws or material contracts which would prevent
or impair full performance of any of its obligations hereunder.
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SECTION 5. TRUST LITERATURE
Parkway is not authorized to make any representations concerning shares of
any Fund except those contained in the current prospectus and statement of
additional information ("SAI") and printed information issued by the Trust as
information supplemental to the prospectus. Parkway will supply Parkway upon its
request with Prospectuses, SAIs, reasonable quantities of supplemental sales
literature and additional information. Parkway agrees not to use other
advertising or sales material relating to a Fund unless approved in writing by
Parkway in advance of such use. Any printed information furnished by Parkway
other than the then current prospectus and SAI, periodic reports and proxy
solicitation materials are Parkway's sole responsibility and are not the
responsibility of the Trust and the Trust shall have no liability or
responsibility to Parkway in these respects unless expressly assumed in
connection therewith. Parkway shall have no responsibility with regard to the
accuracy or completeness of any of the printed information furnished by Parkway
and shall be held harmless by Parkway from and against any cost or loss arising
therefrom.
SECTION 6. REPORTS
Parkway shall prepare and furnish to Parkway, at Parkway's reasonable
request, written reports setting forth all amounts expended by Parkway and
identifying the activities for which the expenditures were made.
SECTION 7. INDEMNIFICATION
Parkway agrees to indemnify and hold harmless Parkway from any claims,
expenses, or liabilities incurred by Parkway as a result of any act or omission
of Parkway.
SECTION 8. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective on the date hereof and upon its
effectiveness, shall supersede all previous agreements between the
parties covering the subject matter hereof.
(b) This Agreement shall continue in effect indefinitely.
(c) This Agreement may be terminated upon thirty (30) days' notice,
written notice, without payment of any penalty, by any party hereto.
SECTION 9. NOTICES
Any notice under this Agreement shall be in writing and shall be addressed
and delivered, or mailed, postage prepaid to the other party's principal place
of business, or to such other place as shall have been previously specified by
written notice given to the other party.
SECTION 10. AMENDMENTS
This Agreement may be amended by the parties at any time.
Memorial Funds Form N-1A - Exhibit (h)(2) Page 3
SECTION 11. USE OF THE TRUST'S NAME
Parkway shall not use the name of the Trust or a Fund on any checks, bank
drafts, Bank statements or forms for other than internal use in manner not
approved by the Trust prior thereto in writing; providing however, that the
approval of the Trust shall not be required for the use of the Trust's or Fund's
name which merely refers in accurate and factual terms to the Trust or Fund in
connection with Parkway's role hereunder or which is required by appropriate
regulatory, governmental or judicial authority; provided, further, that in no
event shall such approval be unreasonable withheld or delayed.
SECTION 12. MISCELLANEOUS
(a) This Agreement shall be construed in accordance with the laws of the
State of Texas.
(b) If any provision of this Agreement shall be held invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
(c) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof, whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed all as of the day and year first above written.
MEMORIAL FUNDS: PARKWAY ADVISORS GROUP, INC.
"PARKWAY SOLUTIONS"
BY: /S/ XXXX X. XXXXXXX BY: /S/ XXXX X. XXXXXXXX
------------------------------- -----------------------------
XXXX X. XXXXXXX, VICE PRESIDENT XXXX X. XXXXXXXX, PRESIDENT
Memorial Funds Form N-1A - Exhibit (h)(2) Page 4
APPENDIX "A"
Fees
The amount of fees associated with the services to be performed shall be
assessed at an annual rate of 0.25 percent of the average daily net assets of
the share of the Fund owned by investors for which Parkway Advisors Group, Inc.
maintains a servicing relationship with the Fund(s).
Memorial Funds Form N-1A - Exhibit (h)(2) Page 5
