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EXHIBIT (5)
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INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This Agreement is made as of June 18, 1993, between The Cardinal Group, an
Ohio business trust (the "Group"), and Cardinal Management Corp., an Ohio
corporation (the "Manager").
WHEREAS, the Group is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Group desires to retain the Manager to furnish investment
advisory and administrative services to the newly created investment portfolios
of the Group and may retain the Manager to serve in such capacity to certain
additional investment portfolios of the Group, all as now or hereafter may be
identified in Schedule A hereto (such initial investment portfolios any such
additional investment portfolios together called the "Funds") and the Manager
represents that it is willing and possesses legal authority to so furnish such
services;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained in this Agreement, the parties hereto agree as follows:
Section 1. APPOINTMENT. The Group hereby appoints the Manager to (a) act as
investment adviser to the Funds and (b) furnish administrative facilities and
services to the Funds, for the period and on the terms and subject to the
conditions set forth in this Agreement. The Manager accepts such appointment
and agrees to furnish the services herein set forth for the compensation herein
provided. Additional investment portfolios may from time to time be added to
those covered by this Agreement by the parties executing a new Schedule A which
shall become effective upon its execution and shall supersede any Schedule A
having an earlier date.
Section 2. INVESTMENT ADVISORY SERVICES. Subject to the supervision of the
Group's Board of Trustees, the Manager shall provide a continuous investment
program for the Funds, including investment, research and management with
respect to all securities and investments and cash equivalents in the Funds.
The Manager shall determine from time to time what securities and other
investments will be purchased, retained or sold by the Group with respect to
the Funds. The Manager shall provide the services under this Agreement in
accordance with each of the Fund's investment objectives, policies, and
restrictions as stated in such Fund's most current Prospectus and Statement of
Additional Information, as presently in effect, and all amendments or
supplements thereto, and resolutions of the Group's Board of Trustees. The
Manager further agrees that it:
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(a) will use the same skill and care in providing such services as it uses
in providing services to any fiduciary accounts for which it has investment
responsibilities;
(b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission (the "Commission") and, in addition, will
conduct its activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to the investment
advisory activities of the Manager;
(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 Manager will attempt to obtain
and is hereby directed to obtain prompt execution of orders in an effective
manner at the most favorable price. Consistent with this obligation, when
the execution and price offered by two or more brokers or dealers are
comparable, the Manager may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the Manager with
research advice and other services. In no instance will portfolio securities
be purchased from or sold to The Ohio Company, the Manager, or any affiliated
person of the Group, The Ohio Company or the Manager unless otherwise
permitted by the 1940 Act, an exemption therefrom, or an order thereunder;
(d) will maintain all books and records with respect to the securities
transactions of the Funds and will furnish the Group's Board of Trustees such
periodic and special reports as the Board may request; and
(e) will advise and assist the officers of the Group in taking such
actions as may be necessary or appropriate to carry out the decisions of the
Group's Board of Trustees and of the appropriate committees of such Board
regarding the conduct of the business of the Funds; and
Section 3. ADMINISTRATIVE SERVICES. Subject to the supervision of the
Group's Board of Trustees, the Manager will provide the Group, with respect to
the operations of the Funds, overall management of the Funds' business affairs
except those performed by the custodians for the Funds under their custodian
agreements and the transfer agent and fund accountant for the Funds under their
transfer agency and fund accounting agreements.
The Manager shall maintain office facilities (which may be in the offices of
the Manager or of an affiliate but shall be in such location as the Group shall
reasonably determine); furnish statistical and research data, clerical and
certain bookkeeping services, personnel (including officers) and stationery and
office supplies; prepare the periodic reports to the Commission on Form N-SAR
or any
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replacement forms therefor; compile data for, prepare for execution by the
Funds and file all the Funds' federal and state tax returns and required tax
filings other than those required to be made by the Funds' custodian and
transfer agent; prepare compliance filings pursuant to state securities laws
with the advice of the Group's counsel; assist to the extent requested by the
Group with the Group's preparation of its Annual and Semi-Annual Reports to
Shareholders and its Registration Statements (on Form N-1A or any replacement
therefor); compile data for, prepare and file timely Notices to the Commission
required pursuant to Rule 24f-2 under the 1940 Act; keep and maintain the
financial accounts and records of the Funds, including calculation of daily
expense accruals; in the case of money market funds, determine the actual
variance from $1.00 of the Fund's net asset value per share; and generally
assist in all aspects of the operations of the Funds. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Manager hereby agrees that
all records which it maintains for the Group are the property of the Group and
further agrees to surrender promptly to the Group any such records upon the
Group's request. The Manager 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.
Section 4. EXPENSES. During the term of this Agreement, the Manager will
pay all expenses incurred by it in connection with its activities, duties and
obligations under this Agreement, other than the costs of securities (including
brokerage fees, if any) purchased for the Funds.
Section 5. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, each of the Funds will pay the Manager and the
Manager will accept as full compensation therefor a fee set forth on Schedule A
hereto. The obligations of the Funds to pay the above-described fee to the
Manager will begin as of the respective dates of the initial public sale of
shares in the Funds.
If in any fiscal year the aggregate expenses of any of the Funds (as defined
under the securities regulations of any state having jurisdiction over the
Group) exceed the expense limitations of any such state, the Manager will
reimburse such Fund for such excess expenses. The obligation of the Manager to
reimburse the Funds hereunder is limited in any fiscal year to the amount of
its fee hereunder for such fiscal year; provided, however, that notwithstanding
the foregoing, the Manager shall reimburse the Funds for such excess expenses
regardless of the amount of fees paid to it during such fiscal year to the
extent that the securities regulations of any state having jurisdiction over
the Group so require. Such expense reimbursement, if any, will be estimated
daily and reconciled and paid on a monthly basis.
Section 6. LIMITATION OF LIABILITY. The Manager shall not be liable for any
error of judgment or mistake of law or for any loss
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suffered by the Funds 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 Manager in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
Section 7. DURATION AND TERMINATION. This Agreement will become effective
as of the date first written above (or, if a particular Fund is not in
existence on that date, on the date a registration statement relating to that
Fund becomes effective with the Commission), provided that it shall have been
approved by vote of a majority of the outstanding voting securities of such
Fund, in accordance with the requirements, if any, under the 1940 Act, and,
unless sooner terminated as provided herein, shall continue in effect until
June 18, 1994.
Thereafter, if not terminated, this Agreement shall continue in effect as to
a particular Fund for successive periods of twelve months each ending on June
18 of each year, provided such continuance is specifically approved at least
annually (a) by the vote of a majority of those members of the Group's Board of
Trustees who are not parties to this Agreement or 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 vote of a majority of the Group's Board
of Trustees or by the vote of a majority of all votes attributable to the
outstanding Shares of such Fund. Notwithstanding the foregoing, this Agreement
may be terminated as to a particular Fund at any time on sixty days' written
notice, without the payment of any penalty, by the Group (by vote of the
Group's Board of Trustees or by vote of a majority of the outstanding voting
securities of such Fund) or by the Manager. 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 meanings as ascribed to such terms in the 1940
Act.)
Section 8. MANAGER'S REPRESENTATIONS. The Manager hereby represents and
warrants that it is willing and possesses all requisite legal authority to
provide the services contemplated by this Agreement without violation of
applicable laws and regulations.
Section 9. 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.
Section 10. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or
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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 Ohio.
The Cardinal Group is a business trust organized under Chapter 1746, Ohio
Revised Code and under a Declaration of Trust, to which reference is hereby
made and a copy of which is on file at the office of the Secretary of State of
Ohio as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of "The Cardinal Group" entered into in the
name or on behalf thereof by any of the Trustees, officers, employees or agents
are made not individually, but in such capacities, and are not binding upon any
of the Trustees, officers, employees, agents or shareholders of the Group
personally, but bind only the assets of the Group, as set forth in Section
1746.13(A), Ohio Revised Code, and all persons dealing with any of the Funds of
the Group must look solely to the assets of the Group belonging to such Fund
for the enforcement of any claims against the Group.
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 CARDINAL GROUP
By /s/ Xxxx X. Xxxxxxxx
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Name Xxxx X. Xxxxxxxx
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Title President
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CARDINAL MANAGEMENT CORP.
By /s/ H. Xxxxx Xxxxx
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Name H. Xxxxx Xxxxx
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Title Treasurer
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Dated January __, 1996
Schedule A
to the
Investment Advisory and Management Agreement
between The Cardinal Group and
Cardinal Management Corp.
dated as of June 18, 1993
Name of Fund Compensation*
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Cardinal Balanced Fund Annual rate of seventy five one-hundredths of one
percent (.75%) of the average daily net assets of
such Fund
Cardinal Aggressive Growth Fund Annual rate of seventy five one-hundredths of one
percent (.75%) of the average daily net assets of
such Fund
The Cardinal Fund Annual rate of sixty one-hundredths of one percent
(.60%) of the average daily net assets of such
Fund
Cardinal Government Obligations Fund Annual rate of fifty one-hundredths of one percent
(.50%) of the average daily net assets of such
Fund
Cardinal Government Securities Money Market Fund Annual rate of fifty one-hundredths of one percent
(.50%) of the average daily net assets of such
Fund
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Cardinal Tax Exempt Money Market Fund Annual rate of fifty one-hundredths of one percent
(.50%) of the average daily net assets of such
Fund
THE CARDINAL GROUP
By
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Name Xxxxx X. Xxxxxx
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Title President
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CARDINAL MANAGEMENT CORP.
By
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Name
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Title
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_____________________
* All fees are computed and paid monthly.
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