EXPENSE LIMITATION AND REIMBURSEMENT AGREEMENT
Exhibit
(d)(5)(i)
EXPENSE
LIMITATION AND
This
AGREEMENT is made this 28th day of January 2010, between CNI Charter Funds (the
“Trust”), a Delaware statutory trust, City National Asset Management, Inc.
(“CNAM”), a California corporation, and SKBA Capital Management, LLC (“SKBA”), a
Delaware limited liability company.
WHEREAS,
CNAM has entered into an Investment Management Agreement with the Trust pursuant
to which CNAM agrees to provide, or arrange for the provision of, investment
advisory and management services to certain series of the Trust, including the
Opportunistic Value Fund series of the Trust (the “Fund”); and
WHEREAS,
SKBA has entered into an Investment Manager Agreement with CNAM (the “SKBA
Agreement”) pursuant to which SKBA agrees to provide investment sub-advisory
services to the Fund; and
WHEREAS,
the Trust, CNAM and SKBA believe that limiting the total expenses of shares of
the Fund is in the best interests of the Fund;
NOW,
THEREFORE, the parties hereto do hereby agree as follows:
1. Limit on Operating Expenses.
CNAM and SKBA hereby agree to limit the Operating Expenses of each class of the
Fund to the respective annual rate of total Operating Expenses specified for
that class in Appendix A of this Agreement (each, an “Expense
Cap”). The Expense Caps may be implemented by waivers of investment
advisory fees and/or reimbursement of expenses, at the discretion of
SKBA. If SKBA chooses to implement the Expense Caps by waiver of
investment advisory fees, CNAM agrees to waive the investment advisory fees
payable to it by the Fund pursuant to the Investment Management Agreement in the
amounts necessary to achieve the Expense Caps, and SKBA agrees that the
investment sub-advisory fees payable to it by CNAM pursuant to the SKBA
Agreement shall be reduced by the same amounts. SKBA further agrees
that any reimbursement of expenses to limit Operating Expenses in accordance
with an Expense Cap shall be the responsibility of SKBA.
2. Definition. For
purposes of this Agreement, the term “Operating Expenses” with respect to the
Fund is defined to include all expenses necessary or appropriate for the
operation of the Fund, including CNAM’s investment advisory or management fee as
described in the Investment Management Agreement and other expenses described in
the Investment Management Agreement, but does not include any front-end or
contingent deferred loads, taxes, interest, brokerage commissions, acquired fund
fees and expenses, or extraordinary expenses such as litigation.
3. Reimbursement of Fees and
Expenses. SKBA, pursuant to the SKBA 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 Sub-Advisory Agreement.
4. Recoupment
Balance. Any fee reduced by SKBA, or Operating Expenses paid
by it (collectively, “subsidies”), pursuant to this Agreement may be reimbursed
by the Fund to
SKBA 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 in effect at the time the subsidies were incurred or any more
restrictive limitation to which SKBA has agreed (subsidies available for
reimbursement to SKBA under this paragraph are collectively referred to as the
“Recoupment Balance”) and if the Board of Trustees approves the
reimbursement. SKBA generally shall seek reimbursement on a rolling
three-year basis whereby the oldest subsidies are recouped
first. SKBA may not request or receive reimbursement of the
Recoupment Balance in any year before payment of the Fund’s operating expenses
for such year and may not cause the Fund to exceed an Expense Cap or any other
agreed upon expense limitation for that year in making such
reimbursement. SKBA agrees not to request or seek reimbursement of
subsidized Operating Expenses that are no longer eligible for
reimbursement.
5. Term. This
Agreement shall continue in effect until January 28, 2011 unless sooner
terminated in accordance with Section 6 herein.
6. Termination. This
Agreement may be terminated at any time by the Trust on behalf of the Fund or by
the Board of Trustees of the Trust upon sixty (60) days’ written notice to CNAM
and SKBA without payment of any penalty and shall automatically terminate upon
the termination of the Investment Management Agreement or SKBA
Agreement.
7. Assignment. This
Agreement and all rights and obligations hereunder may not be assigned without
the written consent of the other parties.
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 or 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.
***
Signature Page Follows***
2
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
|
By: /s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title: President
|
CITY
NATIONAL ASSET MANAGEMENT, INC.
By: /s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title: President
|
|
SKBA
CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxx X.
Xxxxx
Name:
Xxxxxx X. Xxxxx
Title: President
|
3
SCHEDULE
A
The
annualized expenses of each class of the Fund will be limited to the following
annual rate of average daily net assets shown below:
|
Class
|
Expense
Limitation
|
|
Class
E
|
0.75%
|
|
Institutional
Class
|
1.00%
|
|
Class
N
|
1.25%
|
4
