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Exhibit 15(a)(ii)
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 First of America
Bank Corporation, a Michigan corporation (the "Agent"), on behalf of its
wholly-owned subsidiaries (the "Participating Organizations").
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 each of the Participating Organizations 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 various Participating Organizations (the "Qualified
Accounts").
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
Organizations 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 Agent and the Participating Organizations
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
Organizations of any changes in such list.
2.2 Agent hereby represents, warrants and covenants that it has the authority
to enter into this Agreement on behalf of the Participating Organizations.
Notwithstanding the provisions of Section 4 of this Agreement, the Agent
agrees to indemnify the Distributor from any liability arising from a
finding, by a court or regulatory body, that Agent lacks such authority.
2.3 Agent hereby represents, warrants and covenants that the Participating
Organizations are and will be at all times relevant to this Agreement
banks chartered either under federal or state law, and Participating
Organizations are and will be at all times relevant to this Agreement
banks which are exempt from registration as broker-dealers under
applicable state or federal securities laws and are otherwise qualified
under all applicable federal, state and local laws to engage in the
business and transactions described in this Agreement. The Participating
Organizations agree 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
Organizations agree that they will not make Investor A Shares available
for purchase to persons in any jurisdiction in which such Shares are not
registered for sale or in which such Shares may not be lawfully sold. The
Participating Organizations further agree that they will maintain all
records required by applicable law or otherwise reasonably requested by
the Distributor in relation to fund transactions that it has executed.
2.4 By written acceptance of this Agreement, the Agent and the Participating
Organizations agree 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 Agent and the Participating Organizations 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.
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2.5 By written acceptance of this Agreement, the Agent and the Participating
Organizations represent, warrant and agree that: (i) the Participating
Organizations 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 Organizations may charge directly to
Customers for services they perform in connection with investments in the
Group on the customer's behalf and (ii) any and all compensation payable
to the Participating Organizations by customers in connection with the
investment of their assets in the Group will be disclosed by the
Participating Organizations to Customers.
2.6 By written acceptance of this Agreement, the Agent and the Participating
Organizations further represent, warrant, and agree that they possess the
legal authority to perform the services contemplated by this Agreement
without violation of applicable Federal banking laws (including the
Xxxxx-Xxxxxxxx Act) and regulations.
2.7 The Agent shall furnish to the Distributor a list of the Participating
Organizations which have agreed to be bound by the terms of this
Agreement. The Agent shall, at least quarterly, update this list to
indicate the addition or deletion of Participating Organizations that will
be bound by the terms of this Agreement.
3. PURCHASE AUTHORIZATION; ORDER EXECUTION; OFFERING PRICE; DISTRIBUTION FEE
3.1 In all sales of Shares to Qualified Accounts, the Participating
Organizations shall act as agent for their Customers and in no transaction
shall Participating Organizations act as dealer for their own account. As
agent for its Customers, the Participating Organizations are 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
Organizations. The procedures relating to the handling of orders will be
subject to instructions which the Distributor shall forward to the
Participating Organizations from time to time. For purposes of this
Agreement, the Agent and the Participating Organizations 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
Organizations are specifically authorized to distribute the Prospectuses
and Statement of Additional Information and sales material received by it
from the Distributor. No person
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is authorized to distribute any other sales material relating to a Fund
without the prior approval of the Distributor. The Participating
Organizations agree 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 Organizations 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 Organizations 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 Organizations 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 Organizations agree forthwith to refund to the Distributor
the full concession allowed to the Participating Organizations, 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 given to the
Participating Organizations 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 Organizations 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 Organizations, 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
Organizations agree to quote such prices subject to the confirmation by
the Distributor on any Shares offered to the Participating Organizations
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 agrees to waive
the front-end sales charges, if any, typically charged for the purchase of
Investor A Shares for purchases executed by the Participating
Organizations on behalf of the Qualified Accounts. The Participating
Organizations acknowledge the fact that each price is always subject to
confirmation, and will be the price next computed after receipt of an
order. The Participating Organizations acknowledge that it is their
responsibility to transmit purchase orders promptly to the Distributor.
The Participating Organizations further acknowledge 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
Organizations and shall not be the responsibility
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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 Organizations at less than the then-current offering
price determined by or for the respective Fund.
3.7 Participating Organizations 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 Organizations as agent for its
Customers. Pursuant to an arrangement between the Agent and the
Participating Organizations, all of the 12b-1 Fees payable to
Participating Organizations under this Agreement shall be made to Agent
for allocation to the various Participating Organizations.
3.8 The Participating Organizations and their employees will, upon request, be
available during normal business hours to consult with the Distributor or
its designees concerning the performance of each 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 were made. In addition, the
Participating Organizations 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 Organizations and
the Participating Organizations 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 Organizations 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 Agent and the Participating Organizations will indemnify the
Distributor and hold it harmless from any claims or assertions relating to
the lawfulness of the Agent's or the
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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 Organizations which
are performed in connection with the discharge of the Participating
Organizations'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 Agent or the Participating Organizations
involved. In addition, the Agent and the Participating Organizations agree
to indemnify and hold the Distributor harmless from any claims or
assertions relating to the lawfulness of the Participating Organizations'
participation in this Agreement under the Xxxxx-Xxxxxxxx Act. At this
time, the Agent, the Participating Organizations, and the Distributor are
not otherwise aware of any violations under the Xxxxx-Xxxxxxxx Act pursuant
to this Agreement.
4.3 The Distributor will indemnify the Agent and the Participating
Organizations and will hold the Participating Organizations 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 Organizations shall have the right
to manage their own defense, including the selection and engagement of
legal counsel, and all costs of such defense shall be born by the
Distributor.
4.4 The Agent hereby represents that it will notify the Participating
Organizations of their responsibilities under this Agreement and assist
the Distributor in its efforts to ensure compliance with the terms of this
Agreement. In the event that a Participating Organization fails to so
comply, Agent hereby represents that it will report any such failure, of
which it has become aware, to the Distributor, and will take whatever
action deemed reasonably necessary by the Distributor to bring the
Participating Organization in compliance with this Agreement.
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 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.
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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 Organizations, without penalty, upon sixty (60) days' prior
written notice to the other party, with respect to some or all of the
Participating Organizations. 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. For purposes of this Agreement, the merger of one
of the Participating Organizations with another Participating Organization
shall not be deemed an assignment.
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 Organizations in writing. Any notice to
Participating Organizations shall be duly given if mailed or telecopied to
Participating Organizations at the address or addresses as the Agent or
Participating Organizations may provide in writing to the Distributor.
5.4 This Agreement supersedes any other Agreement between the Distributor and
Participating Organizations (or with Agent on behalf of the Participating
Organizations) 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 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
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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
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Executive Vice President
FIRST OF AMERICA BANK CORPORATION
As Agent for the various Participating
Organizations
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Executive Vice President
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EXHIBIT A
The Parkstone Group of Funds
Investor A Share Fund
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
By: The Winsbury Corporation,
General Partner
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Executive Vice President
FIRST OF AMERICA BANK CORPORATION
As Agent for the various Participating
Organizations
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Executive 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
Organizations") for distribution assistance and/or Shareholder service pursuant
to an agreement with the Participating Organizations 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 Organizations 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 Organizations 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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