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Exhibit 15(a)(i)
PARTICIPATING ORGANIZATION AGREEMENT
PARTICIPATING ORGANIZATION AGREEMENT made as of the 1st day of October, 1993,
by and between The Winsbury Company Limited Partnership d/b/a The Winsbury
Company, an Ohio Limited Partnership (the "Distributor"), and National
Financial Services Corporation, a corporation duly created under the laws of
its state of incorporation, (the "Participating Organization").
WHEREAS, the Distributor serves as the Distributor of The Parkstone Group of
Funds (the "Group"), a Massachusetts business trust, which has filed a
Registration Statement under the Investment Company Act of 1940 as amended (the
"1940 Act") and the Securities Act of 1933 (the "Securities Act", and, together
with the 1940 Act, the "Acts"); and
WHEREAS, the Group is comprised of several separate investment portfolios,
each of which is segregated by class;
WHEREAS, the holders of Investor A shares ("Investor A Shares" or "Shares")
of each of the investment portfolios of the Group that are identified in
Exhibit A attached hereto (individually, a "Fund," collectively the "Funds")
have adopted an Investor A Distribution and Shareholder Services Plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act;
WHEREAS, the Plan authorizes the Distributor to enter into agreements with
third parties to implement the Plan; and
WHEREAS, it is intended that the Participating Organization provide certain
distribution services in connection with the purchase of Investor A Shares of
the Group through certain accounts on behalf of customers ("Customers") of the
Participating Organization (the "Qualified Accounts") and the Participating
Organization has arrangements with First of America Brokerage Service, Inc.
(the "correspondent"), for the provision of brokerage clearing services by the
Participating Organization.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. REFERENCE TO PROSPECTUSES; DETERMINATION OF NET ASSET VALUE
1.1 Reference is hereby made to the prospectuses (individually a "Prospectus,"
collectively the "Prospectuses") for Investor A Shares of each Fund as
from time to time are effective under the Securities Act. Terms defined
therein and not otherwise defined herein are used herein with the meaning
so defined.
1.2 For purposes of determining the fees payable to the Participating
Organization under Section 3, the average daily net asset value of a
Fund's Shares will be computed in the manner specified in the Group's
registration statement (as the same is in effect from time to time) in
connection with the computation of the net asset value of such Fund's
Shares for purposes of purchases and redemptions.
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2. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 The Distributor hereby represents and warrants that it is the principal
underwriter of each portfolio of the Investor A Shares of each Fund, which
are identified in the Group's Registration Statement and that it is
authorized to enter into this Agreement pursuant to the Plan. The
Distributor has furnished the Participating Organization or its
correspondent with a list of the various states and other jurisdictions in
which the Investor A Shares of each Fund have been qualified for sale
under, or are exempt from the requirements of, the respective securities
laws of such states and jurisdictions, and will promptly notify the
Participating Organization or its correspondent of any changes in such
list.
2.2 Participating Organization hereby represents, warrants and covenants that
it is and will be at all times relevant to this Agreement registered as a
broker-dealer under applicable state or federal securities laws and is
otherwise qualified under all applicable federal, state and local laws to
engage in the business and transactions described in this Agreement. The
Participating Organization agrees to comply with the requirements of all
applicable laws, including any applicable federal and state securities
laws, the rules and regulations of the SEC, and the rules and regulations
issued by applicable federal bank regulatory agencies. The Participating
Organization further agrees that it will maintain all records required by
applicable law or otherwise reasonably requested by the Distributor in
relation to fund transactions that it has executed.
2.3 By written acceptance of this Agreement, the Participating Organization,
who pays the fees in full to the correspondent, agrees to and does waive
such portion of the fee payable under Section 3 as is necessary to assure
that the amount of such fee which is required to be accrued by the Funds
on any day with respect to such Funds' Shares does not exceed the income
to be accrued to the Shares on such Funds on that day. The amount of the
fee which must be waived by the Participating Organization under this
Section 2.4 will be determined by the Distributor and will be based on the
Participating Organization's pro rata portion of the fees payable under
the Funds' Plan (including those fees payable to the Distributor and other
organizations providing distribution assistance with respect to such
Funds' Shares and/or Shareholder services to the holders of such Funds'
Shares) that exceed the daily income to be accrued to the Shares of such
Funds.
2.4 By written acceptance of this Agreement, the Participating Organization
represents, warrants and agrees that: (i) the Participating Organization
or its correspondent will disclose to Customers the order execution that
they will perform pursuant to this agreement, other than those already
disclosed in the Prospectuses and in Fund applications, and a schedule of
any fees that the Participating Organization or its correspondent may
charge directly to Customers for services it performs in connection with
investments in the Group on the customer's behalf and (ii) any and all
compensation payable to the Participating Organization or its
correspondent by customers in connection with the investment of their
assets in the Group will be disclosed by the Participating Organization to
Customers. This shall not be construed to prohibit or require disclosure
to customers of compensation to the Participating Organization payable by
its correspondent for brokerage clearing services rendered.
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3. PURCHASE AUTHORIZATION; ORDER EXECUTION; OFFERING PRICE; DISTRIBUTION FEE
3.1 In all sales of Shares to Qualified Accounts, the Participating
Organization shall act as agent for its Customers and in no transaction
shall Participating Organization act as dealer for its own account. As
agent for its Customers, the Participating Organization is hereby
authorized to: (i) place orders directly with the Funds' transfer agent
for the purchase of Shares and (ii) tender Shares to the transfer agent
for redemption, in each case subject to the terms and conditions set forth
in the Prospectus and the operating procedures and policies established by
the Distributor. The minimum dollar purchase of Shares shall be the
applicable minimum amount set forth in the Prospectus, and no order for
less than such amount shall be accepted by the Participating Organization.
The procedures relating to the handling of orders will be subject to
instructions which the Distributor shall forward to the Participating
Organization from time to time. For purposes of this Agreement, the
Participating Organization will be deemed to be independent contractors,
and will have no authority to act as agent for the Distributor in any
matter or in any respect.
3.2 All orders are subject to acceptance or rejection by the Distributor in
its sole discretion. No person is authorized to make any representations
concerning the Distributor, the Group, or a Fund's Shares except such
representations contained in the relevant then- current Prospectuses and
Statement of Additional Information and in such printed information as the
Group or the Distributor may subsequently prepare. The Participating
Organization or its designee is specifically authorized to distribute the
Prospectuses and Statement of Additional Information and sales material
received by it from the Distributor. No person is authorized to
distribute any other sales material relating to a Fund without the prior
approval of the Distributor. The Participating Organization or its
designee agrees to deliver, upon the request of the Distributor, copies of
any relevant amended Prospectuses and Statement of Additional Information
to Shareholders of a Fund to whom Shares have been sold.
3.3 Participating Organization shall not withhold placing Customers' orders
for any Shares so as to profit themselves as a result of such withholding.
Distributor shall not purchase any Shares from the Funds except for the
purpose of covering purchase orders already received, and the
Participating Organization shall not purchase any Shares from the
Distributor except for the purpose of covering the purchase orders already
received.
3.4 If any Shares purchased by the Participating Organization are repurchased
by the Funds or by the Distributor for the account of the Funds, or are
tendered for redemption within seven (7) business days after confirmation
by the Distributor of the original purchase order for such Shares, (1) the
Participating Organization agrees forthwith to refund to the Distributor
the full concession allowed to the Participating Organization, if any, on
the original sale, such refund to be paid by the Distributor to the Fund
whose Shares have been so repurchased upon receipt and (2) the Distributor
shall forthwith pay to such Fund that part of the discount retained by the
Distributor on the original sale. Notice will be
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given to the Participating Organization of any such repurchase or
redemption within ten (10) days of the date which the repurchase or
redemption is requested.
3.5 Neither party to this Agreement shall, as agent, purchase any Shares from
a Qualified Account at a price lower than the net asset value next
computed by or for the issuer thereof. Nothing in this subparagraph shall
prevent the Participating Organization or its correspondent from selling
Shares for the account of a Qualified Account to the Distributor or the
issuer and charging the investor a fair commission for handling the
transaction.
3.6 The Distributor will furnish the Participating Organization, on request,
with offering prices for the Shares in accordance with the then- current
Prospectuses of the respective Funds of the Group, and the Participating
Organization agrees to quote such prices subject to the confirmation by
the Distributor on any Shares offered to the Participating Organization
for sale. The public offering price equals the net asset value per Share
of the prospective Fund plus a sales charge, if any, as disclosed in the
Prospectus of the individual Fund. The Distributor hereby may, at its
discretion, waive the front-end sales charges, if any, typically charged
for the purchase of Investor A Shares for purchases executed by the
Participating Organization on behalf of the Qualified Accounts. The
Participating Organization acknowledges the fact that each price is always
subject to confirmation, and will be the price next computed after receipt
of an order. The Participating Organization acknowledges that it is its
responsibility to transmit purchase orders promptly to the Distributor.
The Participating Organization further acknowledges that any failure to
promptly transmit such orders to the Distributor that causes a Qualified
Account to receive an improper price, based upon the requirements of Rule
22c-1 under the 1940 Act, shall be the responsibility of the Participating
Organization and shall not be the responsibility of the Distributor. The
Distributor reserves the right to cancel this Agreement at any time
without notice if any Share shall be offered for sale by the Participating
Organization at less than the then- current offering price determined by
or for the respective Fund.
3.7 Participating Organization shall be entitled to receive a distribution fee
("12b-1 Fee"), pursuant to the Plan, attached as Exhibit B, from
Distributor at a rate of 0.10% per annum of the net asset value of the
Group's Investor A Shares, as computed in the manner specified in the
Group's registration statement (as the same is in effect from time to
time), purchased by such Participating Organization as agent for its
Customers. Such fee shall be paid in full to the Participating
Organization's correspondent by the Participating Organization.
3.8 The Participating Organization and its employees will, upon request, be
available during normal business hours to consult with the Distributor or
its designees concerning the performance of the Participating
Organization's responsibilities under this Agreement. Any person
authorized to direct the disposition of monies paid or payable by the
Distributor pursuant to Section 3 of this Agreement will provide to the
Distributor the Group's Board of Trustees, and the Group's Trustees will
review at least quarterly, a written report of the amounts so expended and
the purposes for which such expenditures
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were made. In addition, the Participating Organization will furnish to the
Distributor, the Group or their designees such information as the
Distributor, the Group or their designees may reasonably request
(including, without limitation, periodic certifications confirming the
provision to Customers of the services described herein), and will
otherwise cooperate with the Distributor, the Group and their designees
(including, without limitation, any auditors designed by the Group), in the
preparation of reports to the Group's Board of Trustees concerning this
Agreement and the monies paid or payable by the Distributor pursuant
hereto, as well as any other reports or filings that may be required by
law.
4. EXCULPATION; INDEMNIFICATION
4.1 The Distributor shall not be liable to the Participating Organization and
the Participating Organization shall not be liable to the Distributor
except for acts or failures to act which constitute lack of good faith or
gross negligence and for obligations expressly assumed by either party
hereunder. Nothing contained in this Agreement is intended to operate as
a waiver by the Distributor or by the Participating Organization of
compliance with any provisions of the Securities Act, the Securities
Exchange Act of 1934, the 1940 Act, the rules and regulations promulgated
by the SEC, the NASD or any state securities administrator, or the
applicable rules and regulations promulgated by federal banking agencies.
4.2 The Participating Organization will indemnify the Distributor and hold it
harmless from any claims or assertions relating to the lawfulness of the
Participating Organization's participation in this Agreement and the
transactions contemplated hereby or relating to any activities of any
persons or entities affiliated with the Participating Organization which
are performed in connection with the discharge of the Participating
Organization's responsibilities under this Agreement. If such claims are
asserted, the Distributor shall have the right to manage its own defense,
including the selection and engagement of legal counsel, and all costs of
such defense shall be born by the Participating Organization.
4.3 The Distributor will indemnify the Participating Organization and will
hold the Participating Organization harmless from any claims or assertions
relating to the lawfulness of the Distributor's participation in this
Agreement and the transactions contemplated hereby or relating to any
activities or any persons or entities affiliated with the Distributor
which are performed in connection with the discharge of the Distributor's
responsibilities under this Agreement. If any such claims are asserted,
the Participating Organization shall have the right to manage its own
defense, including the selection and engagement of legal counsel, and all
costs of such defense shall be born by the Distributor.
5. GENERAL
5.1 This Agreement will become effective with respect to each Fund on the date
indicated on the first page of this Agreement. Unless sooner terminated
with respect to any Fund, this Agreement may also be terminated at any
time without penalty by the vote of a majority
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of the members of the Board of Trustees of the Group who are not
"interested persons" (as such term is defined in the 0000 Xxx) and who have
no direct or indirect interest in the Plan relating to such Fund or any
agreement relating to such Plan, including this Agreement, or (with respect
to a Fund) by a vote of the majority of the outstanding voting securities
of that Fund (as such term is defined in the Statement of Additional
Information), cast in person at a meeting called for the approval of voting
on such approval, on sixty (60) days' written notice.
5.2 This Agreement will automatically terminate in the event of its
assignment. This Agreement may be terminated by the Distributor or by the
Participating Organization, without penalty, upon sixty (60) days' prior
written notice to the other party. This Agreement may also be terminated
at any time without penalty by the vote of a majority of the members of
the Board of Trustees of the Group who are not "interested persons" (as
such term is defined in the 0000 Xxx) and who have no direct or indirect
interest in the Plan relating to such Fund or any agreement relating to
such Plan, including this Agreement, or (with respect to a Fund) by a vote
of the majority of the outstanding voting securities of that Fund (as such
term is defined in the Statement of Additional Information), cast in
person at a meeting called for the purpose of voting on such approval, on
sixty (60) days' written notice.
5.3 All communications to the Distributor shall be sent to the address set
forth in this Agreement or at such other address as the Distributor may
designate to the Participating Organization in writing. Any notice to
Participating Organization shall be duly given if mailed or telecopied to
Participating Organization at the address or addresses as the
Participating Organization may provide in writing to the Distributor.
5.4 This Agreement supersedes any other Agreement between the Distributor and
Participating Organization with respect to the offer and sales of Investor
A Shares of the Group to Qualified Accounts and relating to any other
matters discussed herein. All covenants, agreements, and representations
and warranties made herein shall be deemed to have been material and
relied on by each party, not withstanding any investigation by either
party or on behalf of either party, and shall survive the execution and
delivery of this Agreement. The invalidity or unenforceability of any
term or provision hereof shall not affect the validity or enforceability
of any other term or provision hereof. The headings in this Agreement are
for convenience of reference only and shall alter or otherwise affect the
meaning hereof. This Agreement may be executed in any number of
counterparts which together shall constitute one instrument and shall be
governed by a construed in accordance of the laws (other than the conflict
of laws rules) of the State of Ohio and shall bind and inure to the
benefit of the parties hereto and the respective successors and assigns.
5.5 This Agreement is a Related Agreement under the Plan.
5.6 The names "The Parkstone Group of Funds" and "Trustees of the Parkstone
Group of Funds" refer respectively to the trust created and the trustees,
as trustees but not
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individually or personally, acting from time to time under a Declaration of
Trust dated as of March 25, 1987, to which reference is hereby made and a
copy of which is on file at the Office of the Secretary of the Commonwealth
of Massachusetts and elsewhere as required by law, and to any and all
amendments thereto so filed or hereafter filed. The obligations of "The
Parkstone Group of Funds" entered into in the name of or on behalf thereof
by any of the trustees, representatives or agents are not made
individually, but in such capacities, and are not binding upon any of the
trustees, shareholders, or representatives of the Group personally, but
bind only the assets of the Group and all persons dealing with any series
of shares of the Group must look solely to the assets of the Group
belonging to such series for the enforcement of any claims against the
Group.
5.7 All communications to the Distributor shall be sent to the following
address:
The Winsbury Company
0000 Xxxx Xxxxxx-Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
THE WINSBURY COMPANY LIMITED
PARTNERSHIP
By: The Winsbury Corporation, General Partner
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
By: Xxxxxxx X. Xxxxxx
---------------------------
Title: Executive Vice President
General Manager
Fund Services Division
NATIONAL FINANCIAL SERVICES CORPORATION
/s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------
By: Xxxxxx X. Xxxxxxxxxx
---------------------------
Title: Vice President
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EXHIBIT A
The Parkstone Group of Funds
Investor A Shares
1. Parkstone U.S. Government Obligations Fund
2. Parkstone Tax-Free Fund
3. Parkstone Prime Obligations Fund
4. Parkstone Treasury Fund
5. Parkstone Municipal Investor Fund
6. Parkstone Equity Fund
7. Parkstone Small Capitalization Fund
8. Parkstone High Income Equity Fund
9. Parkstone International Discovery Fund
10. Parkstone Balanced Fund
11. Parkstone Bond Fund
12. Parkstone Limited Maturity Bond Fund
13. Parkstone Michigan Municipal Bond Fund
14. Parkstone Municipal Bond Fund
15. Parkstone U.S. Government Income Fund
16. Parkstone Intermediate Government Obligations Fund
THE WINSBURY COMPANY LIMITED
PARTNERSHIP
Dated: , 1994 By: The Winsbury Corporation,
---------- ---- General Partner
/s/ Xxxxxxx X. Xxxxxx By: Xxxxxxx X. Xxxxxx
-----------------------
Title: Executive Vice President
General Manager
Fund Services Division
NATIONAL FINANCIAL SERVICES CORPORATION
Dated: 5 10 , 1994 /s/ Xxxxxx X. Xxxxxxxxxx
------- ---- --------------------------
By: Xxxxxx X. Xxxxxxxxxx
-----------------------
Title: Vice President
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EXHIBIT B
Investor A Distribution and Shareholder Service Plan
This Plan (the "Investor A Plan") constitutes a distribution and shareholder
service plan of The Parkstone Group of Funds, a Massachusetts business trust
(the "Trust"), adopted pursuant Rule 12b-1 under the Investment Company Act of
1940, as amended, (the "1940 Act"). The Investor A Plan relates to the
Investor A Shares of those investment portfolios identified on Schedule B to
the Trust's Distribution Agreement and as amended form time to time (the
"Investor A Plan Funds").
Section 1. Each Investor A Plan Fund shall pay to The Winsbury Company
Limited Partnership, an Ohio limited partnership and the distributor (the
"Distributor") of the Trust's shares of beneficial interest of its Investor A
class (the "Investor A Shares"), a fee in an amount not to exceed on an annual
basis .25% of the average daily net asset value of the Investor A Shares of
such Fund (the "Investor A Plan Fee") for: (a) payments the Distributor makes
to banks and other institutions and broker/dealers (a "Participating
Organization") for distribution assistance and/or Shareholder service pursuant
to an agreement with the Participating Organization or for distribution
assistance and/or Shareholder service provided by the Distributor pursuant to
an agreement between the Distributor and the Trust; or (b) reimbursement of
expenses incurred by a Participating Organization pursuant to an agreement in
connection with distribution assistance and/or Shareholder service including,
but not limited to, the reimbursement of expenses relating to printing and
distributing prospectuses to persons other than Shareholders of an Investor A
Plan Fund, printing and distributing advertising and sales literature and
reports to Shareholders used in connection with the sale of Investor A Shares,
and personnel and communication equipment used in servicing Shareholder
accounts and prospective shareholder inquiries. For purposes of the Investor A
Plan, a Participating Organization may include the Distributor or any of its
affiliates or subsidiaries.
Section 2. The Investor A Plan Fee shall be paid by the Investor A Plan
Funds to the Distributor only to compensate or to reimburse the Distributor for
payments or expenses incurred pursuant to Section 1.
Section 3. The Investor A Plan shall not take effect with respect to an
Investor A Plan Fund until it has been approved by a vote of at least a
majority of the outstanding Investor A Shares of such Fund.
Section 4. The Investor A Plan shall not take effect until it has been
approved, together with any related agreements, by votes of the majority (or
whatever greater percentage may, from time to time, be required by Section
12(b) of the 1940 Act or the rules and regulations thereunder) of both (a) the
Trustees of the Trust, and (b) the Independent Trustees of the Trust cast in
person at a meeting called for the purpose of voting on the Investor A Plan or
such agreement.
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Section 5. The Investor A Plan shall continue in effect for a period of more
than one year after it takes effect only so long as such continuance is
specifically approved at least annually in the manner provided for approval of
the Investor A Plan in Section 4.
Section 6. Any person authorized to direct the disposition of monies paid or
payable by the Investor A Plan Funds pursuant to the Investor A Plan or any
related agreement shall provide to the Trustees of the Trust, and the Trustees
shall review, at least quarterly, a written report of the amounts so expended
and the purposes for which such expenditures were made.
Section 7. The Investor A Plan may be terminated at any time by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding Investor A Shares of an Investor A Plan Fund.
Section 8. All agreements with any person relating to implementation of the
Investor A Plan shall be in writing, and any agreement related to the Investor
A Plan shall provide:
(a) That such agreement may be terminated at any time, without payment of
any penalty, by vote of a majority of the Independent Trustees or by vote of
a majority of the outstanding Investor A Shares of the Investor A Plan Fund,
on not more than 60 days' written notice to any other party to the agreement;
and
(b) That such agreement shall terminate automatically in the event of its
assignment.
Section 9. The Investor A Plan may not be amended to increase materially the
amount of distribution expenses permitted pursuant to Section 1 hereof without
approval in the manner provided in Section 3 hereof, and all material
amendments to the Investor A Plan shall be approved in the manner provided for
approval of the Investor A Plan in Section 4.
Section 10. As used in the Investor A Plan, (a) the term "Independent
Trustees" shall mean those Trustees of the Trust who are not interested persons
of the Trust, and have no direct or indirect financial interest in the
operation of the Investor A Plan or any agreements related to it, and (b) the
terms "assignment", "interested person" and "majority of the outstanding voting
securities" shall have the respective meanings specified in the 1940 Act and
the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
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