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Exhibit (d)(3)
PARKSTONE ADVANTAGE FUND
ADVISORY AGREEMENT
AGREEMENT made as of September 1, 1999 between PARKSTONE ADVANTAGE FUND, a
Massachusetts business trust, located in Oaks, Pennsylvania (the "Trust") and
NATIONAL CITY INVESTMENT MANAGEMENT COMPANY, located in Cleveland, Ohio (the
"Adviser").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser as investment adviser to
the Armada Advantage Equity Growth and Armada Advantage Balanced Allocation
Funds (individually, a "Fund" and collectively, the "Funds");
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. DELIVERY OF DOCUMENTS. The Adviser acknowledges that it has received
copies of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State
Secretary of the Commonwealth of Massachusetts on May 18, 1993
and all amendments thereto (such 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 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") and all amendments thereto;
(e) The Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended ("1933 Act") (File No.
33-65690) and under the 1940 Act as filed with the SEC and all
amendments thereto; and
(f) The Trust's most recent prospectuses and statements of additional
information with respect to the Funds (such prospectuses and
statements
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of additional information, as presently in effect and all
amendments and supplements thereto are herein called
individually, a "Prospectus", and collectively, the
"Prospectuses").
The Trust will furnish the Adviser from time to time with execution
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 a continuous investment program for each Fund,
including investment research and management with respect to all securities
and investments and cash equivalents in each Fund. The Adviser will
determine from time to time what securities and other investments will be
purchased, retained or sold by 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. SUBCONTRACTORS. It is understood that the Adviser may from time to time
employ or associate with itself such person or persons as the Adviser may
believe to be particularly fitted to assist in the performance of this
Agreement; provided, however, that the compensation of such person or
persons shall be paid by the Adviser and that the Adviser shall be as fully
responsible to the Trust for the acts and omissions of any subcontractor as
it is for its own acts and omissions. Without limiting the generality of
the foregoing, it is agreed that investment advisory service to any Fund
may be provided by a subcontractor agreeable to the Adviser and approved in
accordance with the provisions of the 1940 Act. Any such sub-advisers are
hereinafter referred to as the "Sub-Advisers." In the event that any
Sub-Adviser appointed hereunder is terminated, the Adviser may provide
investment advisory services pursuant to this Agreement to the Fund
involved without further shareholder approval. Notwithstanding the
employment of any Sub-Adviser, the Adviser shall in all events: (a)
establish and monitor general investment criteria and policies for each
Fund; (b)review investments in each Fund on a periodic basis for compliance
with its investment objective, policies and restrictions as stated in the
Prospectus; (c) review periodically any Sub-Adviser's policies with respect
to the placement of orders for the purchase and sale of portfolio
securities; (d) review, monitor, analyze and report to the Board of
Trustees on the performance of any Sub-Adviser; (e) furnish to the Board of
Trustees or any Sub-Adviser, reports, statistics and economic information
as may be reasonably requested; and (f) recommend, either in its sole
discretion or in conjunction with any Sub-Adviser, potential changes in
investment policy.
4. COVENANTS BY ADVISER. The Adviser agrees with respect to the services
provided to each Fund that it:
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(a) will comply with all applicable Rules and Regulations of the SEC
and will in addition conduct its activities under this Agreement
in accordance with other applicable law;
(b) will use the same skill and care in providing such services as it
uses in providing services to similar fiduciary accounts for
which it has investment responsibilities;
(c) will not make loans to any person to purchase or carry shares in
the Funds, or make interest-bearing loans to the Trust or the
Funds;
(d) will maintain a policy and practice of conducting its investment
management activities independently of the Commercial Departments
of all banking affiliates. In making investment recommendations
for the Funds, personnel will not inquire or take into
consideration whether the issuers (or related supporting
institutions) of securities proposed for purchase or sale for the
Funds' accounts are customers of the Commercial Department. In
dealing with commercial customers, the Commercial Department will
not inquire or take into consideration whether securities of
those customers are held by the Funds;
(e) will place orders pursuant to its investment determinations for
the Funds either directly with the issuer or with any broker or
dealer. In selecting brokers or dealers for executing portfolio
transactions, the Adviser will use its best efforts to seek on
behalf of the Trust and each Fund the best overall terms
available. In assessing the best overall terms available for any
transaction the Adviser shall consider all factors it deems
relevant, including the breadth of the market in the security,
the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms available,
and in selecting the broker or dealer to execute a particular
transaction, the Adviser may also consider the brokerage and
research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934, as amended) provided to any
Fund and/or other accounts over which the Adviser or any
affiliate of the Adviser exercises investment discretion. The
Adviser is authorized, subject to the prior approval of the
Board, to negotiate and pay to a broker or dealer who provides
such brokerage and research services a commission for executing a
portfolio transaction for any Fund which is in excess of the
amount of commission another broker or dealer would have charged
for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of that
particular transaction or in terms of the overall
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responsibilities of the Adviser with respect to the accounts as
to which it exercises investment discretion. In no instance will
fund securities be purchased from or sold to the Adviser, any
Sub-Adviser, SEI Investments Distribution Co. ("SEI") (or any
other principal underwriter to the Trust) or an affiliated person
of either the Trust, the Adviser, Sub-Adviser, or SEI (or such
other principal underwriter) unless permitted by an order of the
SEC or applicable rules. In executing portfolio transactions for
any Fund, the Adviser may, but shall not be obligated to, to the
extent permitted by applicable laws and regulations, aggregate
the securities to be sold or purchased with those of other Funds
and its other clients where such aggregation is not inconsistent
with the policies set forth in the Trust's registration
statement. In such event, the Adviser will allocate the
securities so purchased or sold, and the expenses incurred in the
transaction, in the manner it considers to be the most equitable
and consistent with its fiduciary obligations to the Funds and
such other clients;
(f) will maintain all books and records with respect to the
securities transactions for the Funds and furnish the Trust's
Board of Trustees such periodic and special reports as the Board
may request; and
(g) 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).
5. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and the Adviser shall be free to
furnish similar services to others so long as its services under this
Agreement are not impaired thereby.
6. 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 Trust 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.
7. 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.
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8. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Trust will pay the Adviser from the assets
belonging to the Funds and the Adviser will accept as full compensation
therefor fees, computed daily and paid monthly, at the following annual
rates: .75% of the average daily net assets of the Armada Advantage Equity
Growth Fund; and .75% of the average daily net assets of the Armada
Advantage Balanced Allocation Fund.
The fee attributable to each Fund shall be the several (and not joint
or joint and several) obligation of each Fund.
9. 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 in
connection with the performance of this Agreement, 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 by it of its obligations and duties under
this Agreement.
10. DURATION AND TERMINATION. This Agreement will become effective with
respect to each Fund upon approval of this Agreement by vote of a majority
of the outstanding voting securities of each such Fund, and, unless sooner
terminated as provided herein, shall continue in effect until September 30,
2000. Thereafter, if not terminated, this Agreement shall continue in
effect with respect to a particular Fund for successive twelve month
periods ending on September 30, 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 interested persons of any
party to this Agreement, 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
vote of a majority of the outstanding voting securities of the 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 (by the
Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the particular Fund), or by the Adviser on 60 days'
written notice. 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 of such terms in the 1940 Act.)
11. 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 Fund until approved by vote of a
majority of the outstanding voting securities of that Fund.
12. 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 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
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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 Delaware law.
13. NAMES. The names "PARKSTONE ADVANTAGE FUND" and "Trustees of 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 a 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 "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 Trust property, and all persons dealing with any class of
shares of the Trust must look solely to the Trust property belonging to
such class for the enforcement of any claims against the Trust.
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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.
PARKSTONE ADVANTAGE FUND
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President
NATIONAL CITY INVESTMENT
MANAGEMENT COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President
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