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EXHIBIT 23(h)(3)
FORM OF SHAREHOLDER SERVICES AGREEMENT
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CNI CHARTER FUNDS
SHAREHOLDER SERVICES AGREEMENT
THIS SHAREHOLDER SERVICES AGREEMENT (this "Agreement") is made as of the
1st day of April, 1999, by and between CNI CHARTER FUNDS, a business trust
organized under the laws of the State of Delaware (the "Trust"), and CITY
NATIONAL BANK (the "Service Provider").
WITNESSETH
WHEREAS, the Trust is registered as open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust, on behalf of certain series of the Trust listed on
EXHIBIT A hereto, as the same may be amended from time to time (each, a "Fund"),
wishes to retain the Service Provider to provide certain services to
shareholders of the Funds, and the Service Provider is willing to furnish those
services and to arrange for the provision of those services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust, on behalf of the Funds, hereby appoints the
Service Provider to provide the shareholder services specified in Section 2 to
those shareholders of the Funds who are customers or clients of the Service
Provider. The Service Provider accepts the appointment and agrees to furnish
those shareholder services in return for compensation as provided in Section 6
of this Agreement. The Service Provider agrees that the shareholder services
required to be furnished hereunder shall be furnished in compliance with all
relevant provisions of state and federal law, and in compliance with all
applicable rules and regulations of all relevant regulatory agencies, including,
without limitation, the 1940 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the applicable rules and regulations promulgated
thereunder, and the applicable Conduct Rules of the National Association of
Securities Dealers, Inc.
2. SERVICES AND RESPONSIBILITIES ON A CONTINUING BASIS. The Service
Provider will provide the following shareholder services on a regular basis
which shall be daily, weekly, or as otherwise appropriate, unless otherwise
specified by the Trust:
(a) responding to shareholder inquiries;
(b) processing purchases and redemptions of shares of the funds,
including reinvestment of dividends;
(c) assisting shareholders in changing dividend options, account
designations and addresses;
(d) transmitting proxy statements, annual reports, prospectuses, and
other correspondence from the Funds to shareholders (including,
upon request, copies, but not originals, of regular
correspondence, confirmations, or regular statements of account)
where such shareholders hold shares of the Funds registered in
the name of the Service Provider or its nominees; and
(e) providing such other information and assistance to shareholder as
may be reasonably requested by such shareholders.
The Service Provider is under no obligation to, and shall not, provide pursuant
to this Agreement any services with respect to the sale or distribution of
shares of the Funds.
3. STANDARD OF CARE. The Service Provider shall be under no duty to take
any action on behalf of the Funds except as specifically set forth herein or as
may be specifically agreed to by the Service Provider with the Trust in writing.
In the performance of the duties hereunder, the Service Provider shall be
obligated to exercise due care and diligence and to act in good faith and to use
its best efforts. Without limiting the generality of the foregoing or of any
other provision of this Agreement, the Service Provider shall not be liable for
delays or errors or losses of data that result from acts of war or terrorism,
national emergencies or catastrophes directly affecting the Service Provider,
but such relief from liability shall not extend to delays, errors, or losses of
data that result from power failures or other contingencies that typically are
addressed by contingency or emergency plans meeting industry standards.
4. CONFIDENTIALITY. The Service Provider agrees, on behalf of itself and
its employees, to treat confidentially all records and other information about
the Funds and the Trust and all prior, present, or potential shareholders of the
Funds. This confidential information may be disclosed only after prior
notification to, and approval of release of information in writing by, the
Trust, which approval shall not be unreasonably withheld, nor may it be withheld
where the Service Provider 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. INDEPENDENT CONTRACTOR. The Service Provider shall, for all purposes
herein, be deemed to be an independent contractor, and the Service Provider
shall, unless otherwise expressly provided and authorized to do so, have no
authority under this Agreement 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, except
to the limited extent expressly provided in this Agreement. It is expressly
understood and agreed that the services to be rendered by the Service Provider
under the provisions of this Agreement are not to be deemed exclusive, and the
Service Provider 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 impaired materially thereby.
6. COMPENSATION. As compensation for the services rendered by, and
responsibilities assumed by, the Service Provider during the term of this
Agreement, each Fund will pay to the Service Provider a service fee not to
exceed the per annum percentage of the average daily net asset value of such
Fund's shares set forth on EXHIBIT A held by clients or customers of the Service
Provider. The service fee shall be accrued daily by the Funds and paid to the
Service Provider on a monthly basis.
7. INDEMNIFICATION.
(a) The Service Provider agrees to indemnify and hold harmless the
Funds, the Trust and its officers and Trustees from all claims
and liabilities (including, without limitation, liabilities
arising under the Securities Act of 1933, the 1934 Act, the 1940
Act, and any state and foreign securities laws, all as amended
from time to time) and expenses, including (without limitation)
reasonable attorneys' fees and disbursements, arising directly or
indirectly from any action or thing which the Service Provider
takes or does or omits to take or do which is in violation of
this Agreement, not in accordance with written instructions given
by an officer of the Trust, in violation of written procedures
then in effect, or arising out of the Service Provider's own
willful misfeasance, bad faith, negligence or reckless disregard
of the duties and obligations under this Agreement.
(b) The Service Provider shall provide such security as is necessary
to prevent unauthorized use of any on-line computer facilities.
The Service Provider agrees to release, indemnify and hold
harmless the Trust and the Funds from any all direct or indirect
liabilities or losses resulting from requests, directions,
actions, or inactions of or by the Service Provider, its
officers, employees or agents regarding the redemption, transfer
or registration of the Fund's shares for accounts of shareholders
or the Service Provider, its clients and other shareholders.
Principals of the Service Provider will be available to consult
from time to time with officers of the Trust and the Trustees
concerning performance of the services contemplated by Section 2
of this Agreement.
8. FUNDS INFORMATION. No person is authorized to make any representations
concerning the Funds, or shares of the Funds or shareholder services that are
inconsistent with the terms of this Agreement. Neither the Service Provider, nor
any of its respective agents, will use or distribute, or authorize the use or
distribution of, any statements other than those contained in the Funds' current
Prospectuses or Statements of Additional Information or in such current
supplemental literature as may be authorized by the Funds.
9. DURATION AND TERMINATION. This Agreement shall continue until
terminated by the Trust or the Service Provider on 60 days' prior written notice
to the other. The Service Provider's indemnification obligations under Section
7(a) shall survive the termination of this Agreement. All notices and other
communications hereunder shall be writing.
10. AMENDMENTS. This Agreement or any part hereof may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of such charge or waiver is sought.
11. MISCELLANEOUS.
(a) This Agreement embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof.
(b) 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.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of California as applicable to
contracts between California residents entered into and to be
performed entirely within California.
(d) 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.
(e) The Service Provider acknowledges that it has received notice of
and accepts the limitations of the Funds' liability set forth in
the Trust's Agreement and Declaration of Trust. The Service
Provider agrees that each Fund's obligations under this Agreement
shall be limited to the Fund and to its assets, and that neither
the Service Provider shall seek satisfaction of any such
obligation from the shareholders of the Fund or from any trustee,
officer, employee or agent of the Trust or the Fund.
(f) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
(g) This Agreement may not be assigned without the prior mutual
written consent of all parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their officers designated below on the day and year first written above.
CNI CHARTER FUNDS CITY NATIONAL BANK
By: By:
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Name: Name:
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Title: Title:
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CNI Charter Funds CITY NATIONAL BANK
CNI CHARTER FUNDS
EXHIBIT A
FUNDS COVERED BY THE
SHAREHOLDER SERVICES AGREEMENT
Name of Fund Annual Service Fee Rate
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Prime Money Market Fund 0.25%
Government Money Market Fund 0.25%
California Tax-Exempt Money Market Fund 0.25%
Large Cap Growth Equity Fund 0.25%
Large Cap Value Equity Fund 0.25%
Corporate Bond Fund 0.25%
Government Bond Fund 0.25%
California Tax Exempt Bond Fund 0.25%
High Yield Bond Fund 0.25%
Technology Growth Fund 0.25%
Dated:
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