CNI CHARTER FUNDS
INVESTMENT MANAGEMENT AGREEMENT
This INVESTMENT MANAGEMENT AGREEMENT made and effective as of
the _____ day of _____, ____, by and between CNI CHARTER FUNDS (formerly known
as "Berkeley Funds"), a Delaware statutory trust (hereinafter called the
"Trust"), on behalf of each series of the Trust listed in Appendix A hereto, as
such Appendix may be amended from time to time (each series hereinafter referred
to individually as a "Fund" and collectively as the "Funds") and CCM Advisors,
LLC (hereinafter called the "Adviser"), a limited liability company organized
under laws of the State of Delaware.
WITNESSETH:
WHEREAS, the Trust is an open-end management investment
company, registered as such under the Investment Company Act of 1940, as amended
(the "1940 Act"); and
WHEREAS, the Adviser is an investment adviser registered with
the Securities and Exchange Commission.
WHEREAS, the Trust desires to retain the Adviser to render
advice and services to the Funds pursuant to the terms and provisions of this
Agreement, and the Adviser is interested in furnishing said advice and service;
NOW, THEREFORE, in consideration of the covenants and the
mutual promises hereinafter set forth, the parties hereto, intending to be
legally bound hereby, mutually agree as follows:
1. Appointment of Adviser. The Trust hereby employs the
Adviser, and the Adviser hereby accepts such employment, to render investment
advice and management services with respect to the assets of the Funds for the
period and on the terms set forth in this Agreement, subject to the supervision
and direction of the Trust's Board of Trustees. Subject to prior approval of the
Board of Trustees, the Adviser shall retain one or more investment management
organizations ("Subadvisors") to make specific investment decisions and to
execute all portfolio transactions with respect to all or a portion of the
assets of a particular Fund. The Adviser may allocate portions of a Fund's
assets among such Subadvisor(s). The Adviser shall monitor the performance of
such Subadvisor(s), shall allocate and reallocate assets among Subadvisors of
Funds with multiple Subadvisors, and shall recommend the employment or
termination of a particular Subadvisor when deemed advisable. The Adviser will
compensate such Subadvisor(s) from its own resources, at no additional cost to
the Trust.
2. Duties of Adviser. The Adviser shall act as investment
manager to the Funds and shall supervise investments of the Funds on behalf of
the Funds in accordance with the investment objectives, programs and
restrictions of the Funds as provided in the Trust's governing documents,
including, without limitation, the Trust's Agreement and Declaration of
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Trust, By-Laws, Prospectus, and Statement of Additional Information, and such
other limitations as the Trustees may impose from time to time in writing to the
Adviser. Without limiting the generality of the foregoing, the Adviser shall:
(i) retain, recommend employment and termination of, and monitor the performance
of the Subadvisors pursuant to Section 1 of this Agreement, subject to the
ultimate supervision and direction of the Trust's Board of Trustees; (ii)
furnish the Funds with reports, statements and other data on securities,
economic conditions and other pertinent subjects which the Trust's Board of
Trustees may reasonably request; (iii) provide persons satisfactory to the
Trust's Board of Trustees to act as officers and employees of the Trust, but not
including personnel to provide administrative services to the Funds; and (iv)
render to the Trust's Board of Trustees such periodic and special reports with
respect to each Fund's investment activities as the Board may reasonably
request.
3. Best Efforts and Judgment. The Adviser shall use its
reasonably best judgment and efforts in rendering the advice and services to the
Funds as contemplated by this Agreement.
4. Independent Contractor. The Adviser shall, for all
purposes herein, be deemed to be an independent contractor, and shall, unless
otherwise expressly provided and authorized to do so, have no authority to act
for or represent the Trust or the Funds in any way, or in any way be deemed an
agent for the Trust or for the Funds. It is expressly understood and agreed that
the services to be rendered by the Adviser to the Funds under the provisions of
this Agreement are not to be deemed exclusive, and the Adviser shall be free to
render similar or different services to others so long as its ability to render
the services provided for in this Agreement shall not be materially impaired
thereby.
5. Adviser's Personnel. The Adviser shall, at its own
expense, maintain such staff and employ or retain such personnel and consult
with such other persons as it shall from time to time determine to be reasonably
necessary to the performance of its obligations under this Agreement. Without
limiting the generality of the foregoing, the staff and personnel of the Adviser
shall be deemed to include persons employed or retained by the Adviser to
furnish statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Adviser or the Trust's Board of Trustees may desire and reasonably request.
6. Reports by Funds to Adviser. Each Fund will furnish to the
Adviser detailed statements of its investments and assets as the Adviser may
reasonably request, and information as to its investment objective or objectives
and needs, and will make available to the Adviser such financial reports, proxy
statements, legal and other information relating to its investments as may be in
its possession or available to it, together with such other information as the
Adviser may reasonably request.
7. Expenses.
(a) With respect to the operation of each Fund,
the Adviser is responsible for (i) the compensation of any of the Trust's
Trustees, officers, and employees who are affiliates of the Adviser (but not the
compensation of employees performing services in
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connection with expenses which are the Fund's responsibility under Subparagraph
7(b) below) and (ii) providing office space and equipment reasonably necessary
for the operation of the Funds.
(b) Each Fund is responsible for and has assumed
the obligation for payment of all of its expenses, other than as stated in
Subparagraph 7(a) above, including but not limited to: fees and expenses
incurred in connection with the issuance, registration and transfer of its
shares; brokerage and commission expenses; all expenses of transfer, receipt,
safekeeping, servicing and accounting for the case, securities and other
property of the Trust for the benefit of the Fund including all fees and
expenses of its custodian, shareholder services agent and accounting services
agent; interest charges on any borrowings; costs and expenses of pricing and
calculating its daily net asset value and of maintaining its books of account
required under the 1940 Act; taxes, if any; expenditures in connection with
meetings of each Fund's shareholders and the Trust's Board of Trustees that are
properly payable by the Fund; salaries and expenses of officers and fees and
expenses of members of the Trust's Board of Trustees or members of any advisory
board or committee who are not members of, affiliated with or interested persons
of the Adviser; insurance premiums on property or personnel of each Fund which
inure to its benefit, including liability and fidelity bond insurance; the cost
of preparing and printing reports, proxy statements, propectuses and statements
of additional information of the fund or other communications for distribution
to existing shareholders; legal, auditing and accounting fees; trade association
dues; fees and expenses (including legal fees) of registering and maintaining
registration of its shares for sale under federal and applicable state and
foreign securities laws; all expenses of maintaining and servicing shareholder
accounts, including all charges for transfer, shareholder recordkeeping,
dividend disbursing, redemption, and other agents for the benefit of the Funds
(including, without limitation, fund accounting and administration agents), if
any; and all other charges and costs of its operation plus any extraordinary and
non-recurring expenses, except as herein otherwise prescribed.
(c) To the extent the Adviser incurs any costs by
assuming expenses which are an obligation of a Fund as set forth herein, such
Fund shall promptly reimburse the Adviser for such costs and expenses, except to
the extent the Adviser has otherwise agreed to bear such expenses. To the extent
the services for which a Fund is obligated to pay are performed by the Adviser,
the Adviser shall be entitled to recover from such Fund to the extent of the
Adviser's actual costs for providing such services.
8. Investment Advisory and Management Fee.
(a) Each Fund shall pay to the Adviser, and the
Adviser agrees to accept, as full compensation for all investment management and
advisory services furnished or provided to such Fund pursuant to this Agreement,
a management fee as set forth in the Fee Schedule attached hereto as Appendix B,
as may be amended in writing from time to time by the Trust and the Adviser.
(b) The management fee shall be accrued daily by
each Fund and paid to the Adviser monthly.
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(c) The initial fee under this Agreement shall be
payable monthly following the effective date of this Agreement and shall be
prorated as set forth below. If this Agreement is terminated prior to the end of
the month, the fee to the Adviser shall be prorated for the portion of any month
in which this Agreement is in effect which is not a complete month according to
the proportion which the number of calendar days in the month during which the
Agreement is in effect bears to the number of calendar days in the month, and
shall be payable within ten (10) days after the date of termination.
(d) The Adviser voluntarily may reduce any
portion of the compensation or reimbursement of expenses due to it pursuant to
this Agreement and may agree to make payments to limit the expenses which are
the responsibility of a Fund under this Agreement. Any such reduction or payment
shall be applicable only to such specific reduction or payment and shall not
constitute an agreement to reduce any future compensation or reimbursement due
to the Adviser hereunder or to continue future payments. Any such reduction will
be agreed upon prior to accrual of the related expense or fee and will be
estimated daily. Any fee withheld shall be voluntarily reduced and any Fund
expense paid by the Adviser voluntarily or pursuant to an agreed expense
limitation shall be reimbursed by the appropriate Fund to the Adviser in the
first, second, or third (or any combination thereof) fiscal year next succeeding
the fiscal year of the withholding, reduction, or payment to the extent
permitted by applicable law and only if such reimbursements by a Fund (i) are
requested by the Adviser, (ii) are approved by the Trust's Board of Trustees,
and (iii) can be achieved within a Fund's then current expense limits, if any,
for that succeeding first, second, or third fiscal year as the case may be;
provided that such reimbursements shall only be paid after a Fund's current
expenses of the fiscal year have been paid and if such reimbursements do not
require the Adviser to waive or reduce its fees hereunder or to pay current Fund
expenses.
(e) The Adviser may agree not to require payment
of any portion of the compensation or reimbursement of expenses otherwise due to
it pursuant to this Agreement prior to the time such compensation or
reimbursement has accrued as a liability of the Fund. Any such agreement shall
be applicable only with respect to the specific items covered thereby and shall
not constitute an agreement not to require payment of any future compensation or
reimbursement due to the Adviser hereunder.
9. Books and Records. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that any records which
it maintains for the Trust are the property of the Trust, and further agrees to
surrender promptly to the Trust or its agents any of such records upon the
Trust's request. The Adviser further agrees to arrange for the preservation of
the records required to be maintained by Rule 31a-1 under the 1940 Act for the
periods prescribed by Rule 31a-2 under the 1940 Act.
10. Fund Share Activities of Adviser's Officers and
Employees. The Adviser agrees that neither it nor any of its officers or
employees shall take any short position in the shares of the Funds. This
prohibition shall not prevent the purchase of such shares by any of the officers
or bona fide employees of the Adviser or any trust, pension, profit-sharing or
other benefit plan for such persons or affiliates thereof, at a price not less
than the net asset value thereof at the time of purchase, as allowed pursuant to
rules promulgated under the 0000 Xxx.
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11. Conflicts with Trust's Governing Documents and Applicable
Laws. Nothing herein contained shall be deemed to require the Trust or the Funds
to take any action contrary to the Trust's Agreement and Declaration of Trust,
By-Laws, or any applicable statute or regulation, or to relieve or deprive the
Board of Trustees of the Trust of its responsibility for and control of the
conduct of the affairs of the Trust and Funds.
12. Adviser's Liabilities.
(a) In the absence of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject to
liability to the Trust or the Funds or to any shareholder of the Funds for any
act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security or other asset or instrument by the Funds.
(b) Each Fund shall severally indemnify and hold
harmless the Adviser and the shareholders, members, officers and employees of
the Adviser (any such person, an "Indemnified Party") against any loss,
liability, claim, damage or expense (including the reasonable cost of
investigating and defending any alleged loss, liability, claim, damage or
expense and reasonable legal fees incurred in connection therewith) arising out
of the Indemnified Party's performance or non-performance of any duties under
this Agreement, provided, however, that nothing herein shall be deemed to
protect any Indemnified Party against any liability to which such Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or by reason of
reckless disregard of its obligations and duties under this Agreement.
(c) No provision of this Agreement shall be
construed to protect any Trustee or officer of the Trust, or officer of the
Adviser, from liability in violation of Sections 17(h) or (i) of the 1940 Act.
13. Non-Exclusivity. The Trust's employment of the Adviser is
not an exclusive arrangement, and the Trust may from time to time employ other
individuals or entities to furnish it with the services provided for herein. In
the event this Agreement is terminated with respect to any Fund, this Agreement
shall remain in full force and effect with respect to any and all other Funds
listed on Appendix A hereto, as the same may be amended.
14. Term. This Agreement shall become effective as of the
date set forth on the first page of this Agreement, and shall remain in effect
for a period of two (2) years, unless sooner terminated as hereinafter provided.
This Agreement shall continue in effect as to each Fund after such initial
two-year period for additional periods not exceeding one (1) year so long as
such continuation is approved with respect to such Fund at least annually by (i)
the Board of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of such Fund and (ii) the vote of a majority of
the Trustees of the Trust who are not parties to this Agreement nor interested
persons thereof, cast in person at a meeting called for the purpose of voting on
such approval.
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15. Termination. This Agreement may be terminated by the
Trust on behalf of any one or more of the Funds, without payment of any penalty,
by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of a Fund, upon sixty (60) days' prior written
notice to the Adviser, and by the Adviser upon sixty (60) days' prior written
notice to a Fund.
16. Termination by Assignment. This Agreement shall terminate
automatically in the event of any transfer or assignment thereof, as defined in
the 1940 Act.
17. Transfer Assignment. This Agreement may not be
transferred, assigned, sold, or in any manner hypothecated or pledged without
the affirmative vote or written consent of the holders of a majority of the
outstanding voting securities of each Fund.
18. Confidentiality. The Adviser agrees that it will not
disclose or use any records or information obtained pursuant to this Agreement
in any manner whatsoever except as authorized in this Agreement and that it will
keep confidential any information obtained pursuant to this agreement and
disclose such information only if the Trust has authorized such disclosure, or
if such disclosure is required by federal or state regulatory authorities.
19. 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.
20. Definitions. The terms "majority of the outstanding
voting securities" and "interested persons" shall have the meanings as set forth
in the 1940 Act.
21. Notice of Declaration of Trust. The Adviser agrees that
the Trust's obligations under this Agreement shall be limited to the Funds and
to their respective assets, and that the Adviser shall not seek satisfaction of
any such obligation from the shareholders of the Funds nor from any Trustee,
officer, employee or agent of the Trust or the Funds.
22. Names. The Trust and the Adviser acknowledge and agree
that (i) the name "CNI Charter Funds" is the property of City National Bank and
(ii) the name "AHA" is the property of the American Hospital Association.
23. 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 or effect.
24. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California 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 1940 Act and the Investment Advisers Act of
1940, as amended, and any rules and regulations promulgated thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested by their duly authorized officers,
all on the day and year first above written.
CNI CHARTER FUNDS CCM ADVISORS, LLC
By: By:
----------------- -----------------
Name: Name:
----------------- -----------------
Title: Title:
----------------- -----------------
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CNI CHARTER FUNDS
APPENDIX A
to the Investment Management Agreement
The provisions of the Investment Management Agreement between the Trust and the
Adviser apply to the following series of the Trust:
AHA Diversified Equity Fund
AHA Limited Maturity Fixed Income Fund
AHA Full Maturity Fixed Income Fund
AHA Balanced Fund
AHA Socially Responsible Equity Fund
Dated as of: ____________
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CNI CHARTER FUNDS
APPENDIX B
to the Investment Management Agreement
Each Fund shall pay to the Adviser, as full compensation for all investment
management and advisory services furnished or provided to such Fund pursuant to
the Investment Management Agreement, a management fee based upon each Fund's
average daily net assets at the following per annum rates:
AHA Diversified Equity Fund - 75 basis points
AHA Limited Maturity Fixed Income Fund - 50 basis points
AHA Full Maturity Fixed Income Fund - 50 basis points
AHA Balanced Fund - 75 basis points
AHA Socially Responsible Equity Fund - 75 basis points
Dated as of: __________
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