EXPENSE LIMITATION AND
REIMBURSEMENT AGREEMENT
This AGREEMENT is made this ___ day of __________ 2005, between CNI
Charter Funds, a Delaware statutory trust (the "Trust") and CCM Advisors, LLC, a
Delaware limited liability company (hereinafter called the "Adviser").
W I T N E S S E T H
WHEREAS, the Adviser has entered into an Investment Management
Agreement with the Trust, pursuant to which the Adviser agrees to provide, or
arrange for the provision of, investment advisory and management services to the
Trust; and
WHEREAS, the Trust and the Adviser believe that capping the total
expenses of shares of each series of the Trust listed in Appendix A to this
Agreement (a "Fund") is in the best interests of the Fund;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
1. Limit on Operating Expenses. The Adviser hereby agrees to limit each
Fund's Operating Expenses to the respective annual rate of total Operating
Expenses specified for that Fund in Appendix A of this Agreement (an "Expense
Cap").
2. Definition. For purposes of this Agreement, the term "Operating
Expenses" with respect to a Fund is defined to include all expenses necessary or
appropriate for the operation of the Fund, including the Adviser's investment
advisory or management fee as described in the Investment Management Agreement,
other expenses described in the Investment Management Agreement, existing
expense obligations of the series of AHA Investment Funds, Inc. (the "AHA
Funds") assumed by the Funds as of the date of the reorganization of the AHA
Funds into the Funds (the "Reorganization"), and expenses incurred in connection
with the Reorganization, but does not include any front-end or contingent
deferred loads, taxes, interest, brokerage commissions, or extraordinary
expenses such as litigation.
3. Reimbursement of Fees and Expenses. The Adviser, pursuant to the
Investment Management Agreement, retains its right to receive reimbursement of
reductions of its investment advisory fee and Operating Expenses paid by it that
are not its responsibility as described in the Investment Management Agreement.
4. Recoupment Balance. Any fee reduced by the Adviser, or Operating
Expenses paid by it (collectively, "subsidies"), pursuant to this Agreement may
be reimbursed by a Fund to the Adviser no later than the end of the third fiscal
year following the year to which the subsidy relates if the aggregate expenses
for that period do not exceed an Expense Cap or any more restrictive limitation
to which the Adviser has agreed (subsidies available for reimbursement to the
Adviser under this paragraph are collectively referred to as the "Recoupment
Balance") and the Board of Trustees approves the reimbursement. The Adviser
generally shall seek reimbursement on a rolling three-year basis whereby the
oldest subsidies are recouped first. The Adviser may not request or receive
reimbursement of the Recoupment Balance before payment of the Fund's operating
expenses for the current year and cannot cause the Fund to exceed an Expense Cap
or any other agreed upon expense limitation for that year in making such
reimbursement. The Adviser agrees not to request or seek reimbursement of
subsidized Operating Expenses that are no longer eligible for reimbursement.
5. Term. This Agreement shall become effective on the date specified
herein and shall remain in effect until _____________, 200_, unless sooner
terminated as provided in Paragraph 6 of this Agreement or unless renewed in
writing by the Adviser and the Board of Trustees.
6. Termination. This Agreement may be terminated at any time by the
Trust on behalf of any one or more of the Funds or by the Board of Trustees of
the Trust, upon sixty (60) days' written notice to the Adviser without payment
of any penalty and shall automatically terminate upon the termination of the
Investment Management Agreement.
7. Assignment. This Agreement and all rights and obligations hereunder
may not be assigned without the written consent of the other party.
8. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected thereby.
9. Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction of effect.
10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the Investment Company Act of 1940, as amended, and the
Investment Advisers Act of 1940, as amended, and any rules and regulations
promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
------------------------ -------------------------
By --------------------- By ----------------------
Name: Name:
Title: President Title:
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SCHEDULE A
The annualized expenses of each of the following Funds will be limited to the
following annual rate of average daily net assets shown below:
Fund Class A
---- -------
AHA Limited Maturity Fixed Income Fund 1.25%
AHA Full Maturity Fixed Income Fund 1.25%
AHA Balanced Fund 1.75%
AHA Diversified Equity Fund 1.50%
AHA Socially Responsible Equity Fund 1.50%
Fund Institutional Class
---- -------------------
AHA Limited Maturity Fixed Income Fund 1.00%
AHA Full Maturity Fixed Income Fund 1.00%
AHA Balanced Fund 1.50%
AHA Diversified Equity Fund 1.25%
AHA Socially Responsible Equity Fund 1.25%
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