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EXHIBIT 5(a)
THE PARKSTONE ADVANTAGE FUND
INVESTMENT ADVISORY AGREEMENT
PRIME OBLIGATIONS FUND, EQUITY FUND,
SMALL CAPITALIZATION FUND AND BOND FUND
AGREEMENT made as of August 18, 1993 between THE PARKSTONE ADVANTAGE
FUND, a Massachusetts business trust, located in Topeka, Kansas (the "Trust")
and FIRST OF AMERICA INVESTMENT CORPORATION, located in Kalamazoo, Michigan
(the "Adviser").
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser as investment
adviser to the Prime Obligations Fund, Equity Fund, Small Capitalization Fund
and Bond Fund, each being a series of the Trust (individually, a "Fund," and
collectively, the "Funds");
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Delivery of Documents. The Adviser acknowledges that it has
received copies of each of the following as certified by the Trust:
(a) The Trust's Agreement and Declaration of Trust,
as filed with the State Secretary of the Commonwealth of
Massachusetts on May 19, 1993 and all amendments thereto
(such Agreement and Declaration of Trust, as presently in
effect and as it shall from time to time be amended, is
herein called the "Declaration of Trust");
(b) The Trust's Code of Regulations and any
amendments thereto (such Code of Regulations, as presently
in effect and as it shall from time to time be amended, is
herein called the "Code of Regulations");
(c) Resolutions of the Trust's Board of Trustees
authorizing the appointment of the Adviser and approving
this Agreement;
(d) The Trust's Notification of Registration on
Form N-8A under the 1940 Act as filed with the Securities
and Exchange Commission ("SEC") on July 6, 1993 and all
amendments thereto;
(e) The Trust's Registration Statement on Form N-1A
under the Securities Act of 1933, as amended (the "1933
Act") (File No. 33-65690) and under the 1940 Act as filed
with the SEC on July 6, 1993 and all amendments thereto; and
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(f) The Trust's most recent prospectus and
statement of additional information with respect to the
Funds (such prospectus, as presently in effect and all
amendments and supplements thereto herein called the
"Prospectus").
The Trust will furnish the Adviser from time to time with executed
copies of all amendments of, or supplements to, the foregoing.
2. Services. The Trust hereby appoints the Adviser to act as
investment adviser to the Funds for the period and on the terms set forth in
this Agreement. Intending to be legally bound, the Adviser accepts such
appointment and agrees to furnish the services required herein to the Funds
for the compensation hereinafter provided.
Subject to the supervision of the Trust's Board of Trustees, the
Adviser will provide with respect to the Funds, a continuous investment
program for each Fund, including investment research and management with
respect to all securities and investments and cash equivalents in such Fund.
The adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund and will arrange
for the purchase and sale of securities and other investments of each Fund.
The Adviser will provide the services under this Agreement in accordance with
each Fund's investment objective, policies and restrictions as stated in the
Prospectus and resolutions of the Trust's Board of Trustees applicable to such
Fund.
3. Covenants by Adviser. The Adviser agrees with respect to the
services provided to each Fund that it:
(a) will conform with all Rules and Regulations of
the SEC applicable to it as investment adviser and will in
addition conduct its activities under this agreement in
accordance with those regulations of the Board of Governors
of the Federal Reserve System pertaining to the investment
advisory activities of bank holding companies which are
applicable to the Adviser;
(b) will use the same skill and care in providing
such services as it uses in providing services to other
investment companies;
(c) will place orders pursuant to its investment
determinations for the Funds either directly with the issuer
or with any broker or dealer. In placing orders with brokers
and dealers, the Adviser will attempt to obtain the best net
price and the most favorable execution of its orders.
Consistent with this obligation, when the execution and
price offered by two or more brokers or dealers are
comparable, the Adviser may, in its discretion, purchase and
sell portfolio securities from and to brokers and dealers
who provide the Trust with research advice and other
services. Except as permitted by the SEC, the portfolio
securities will not be purchased from or sold to the
Adviser, the Funds' distributor (the "Distributor"), or any
affiliated person of the Trust, the Adviser or the
Distributor, provided, however, that subject to the
provisions of this paragraph and to the extent permitted by
law, the Adviser may purchase or sell portfolio securities
through the Distributor or an affiliate of the Distributor
or the Adviser acting as broker;
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(d) will maintain all books and records with
respect to the securities transactions for the Funds, keep
the Trust's books of account with respect to the Funds and
furnish the Trust's Board of Trustees such periodic and
special reports as the Board may request with respect to the
Funds;
(e) will treat confidentially and as proprietary
information of the Trust all records and other information
relative to the Funds 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 Trust, which
approval shall not be unreasonably withheld and may not be
withheld and will be deemed granted where the Adviser 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 Trust).
4. Services Not Exclusive. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and nothing in this Agreement shall
(i) prevent the Adviser or any affiliated person (as defined in the 0000 Xxx)
of the Adviser from acting as investment adviser or manager for any other
person or persons, including other management investment companies with
investment objectives and policies the same as or similar to those of any Fund
or (ii) limit or restrict the Adviser or any such affiliated person from
buying, selling or trading any securities or other investments (including any
securities or other investments which any Fund is eligible to buy) for its or
their own accounts or for the accounts of others for whom it or they may be
acting; provided, however, that the Adviser agrees that it will not undertake
any activities which, in its judgment, will adversely affect the performance
of its obligations to the Funds under this Agreement.
5. Books and Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for the Funds are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
6. Expenses. During the term of this Agreement, the Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions,
if any) purchased for the Funds.
7. Compensation. For the services provided and the expenses assumed
with respect to the Prime Obligations Fund pursuant to this Agreement, the
Trust will pay the Adviser from the assets belonging to the Fund and the
Adviser will accept as full compensation therefor fees, computed daily and
paid monthly, at an annual rate of .40% of the net assets of the Fund.
For the services provided and the expenses assumed with respect to
the Equity Fund and Small Capitalization Fund pursuant to this Agreement, the
Trust will pay the Adviser from the assets belonging to the Fund involved and
the Adviser will accept as full compensation therefor
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fees, computed daily and paid monthly, at an annual rate of 1.00% of the net
assets of each Fund.
For the services provided and the expenses assumed with respect to
the Bond Fund pursuant to this Agreement, the Trust will pay the Adviser from
the assets belonging to the Fund and the Adviser will accept as full
compensation therefor fees, computed daily and paid monthly, at an annual rate
of .74% of the net assets of the Fund.
If in any fiscal year the aggregate expenses of any Fund (as defined
under the securities regulations of any state having jurisdiction over such
Fund) exceed the expense limitations of any such state, the Adviser will
reimburse the Trust for such excess expenses to the extent described in any
written undertaking provided by the Adviser to such state.
Except as permitted by applicable law, the Adviser shall not be
compensated on the basis of a share of capital gains upon or capital
appreciation of the Funds.
8. Limitation of Liability. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement.
9. Duration and Termination. This Agreement shall become effective
with respect to each Fund on the day such Fund first commences the public
offering of its shares and, unless sooner terminated, shall continue in effect
until December 31, 1995. Thereafter, if not terminated, this Agreement shall
continue in effect with respect to a particular Fund for successive twelve
month periods ending on December 31, provided such continuance is specifically
approved at least annually (a) by the vote of a majority of those members of
the Trust's Board of Trustees who are not parties to this Agreement, or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the Trust's Board of
Trustees or by the vote of a majority of the outstanding voting securities of
such Fund. Notwithstanding the foregoing, this Agreement may be terminated as
to any Fund at any time, without the payment of any penalty, by the Trust's
Board of Trustees or by vote of a majority of the outstanding voting
securities of such Fund, or by the Adviser, on 60 days' written notice (which
notice may be waived by the party entitled to receive the same). This
Agreement will immediately terminate in the event of its assignment. (As used
in this Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meaning as such
terms in the 1940 Act.)
10. Amendment of this Agreement. No provision of this Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. No amendment of this Agreement
shall be effective with respect to a particular Fund until approved by the
vote of a majority of the outstanding voting securities of that Fund.
11. Miscellaneous. The Adviser expressly agrees that notwithstanding
the termination of or failure to continue this Agreement with respect to a
particular Fund, the Adviser shall
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continue to be legally bound to provide the services required herein for the
other Funds for the period and on the terms set forth in this Agreement.
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. 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 not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and shall be governed by
the laws of the State of Michigan.
12. Names. The names "The Parkstone Advantage Fund" and "Trustees of
The Parkstone Advantage Fund" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under an Agreement and Declaration of Trust dated May 18, 1993 which is
hereby referred to and a copy of which is on file at the office of the State
Secretary of the Commonwealth of Massachusetts and the principal office of the
Trust. The obligations of "The Parkstone Advantage Fund" entered into in the
name or on behalf thereof by any of the Trustees, representatives or agents
are made not individually, but in such capacities, and are not binding upon
any of the Trustees, shareholders, or representatives of the Trust personally,
but bind only the property of the Trust, and all persons dealing with any
class of shares of the Trust must look solely to the property of the Trust
belonging to such class for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
THE PARKSTONE ADVANTAGE FUND
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Its: President
FIRST OF AMERICA INVESTMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Its: President
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