EXPENSE LIMITATION AND REIMBURSEMENT AGREEMENT
REIMBURSEMENT
AGREEMENT
This
AGREEMENT is made this 28th day of January 2009, between CNI Charter Funds (the
“Trust”), a Delaware statutory trust, City National Asset Management, Inc.
(“CNAM”), a California corporation, and Xxxx, Xxxxxx & Xxxxxxxx, LLC, a
Delaware limited liability company (“RCB”).
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;
and
WHEREAS,
RCB has entered into a Investment Sub-Advisory Agreement with CNAM pursuant to
which RCB agrees to provide investment advisory and management services to the
RCB Small Cap Value Fund series of the Trust (the “Fund”); and
WHEREAS,
the Trust, CNAM and RCB 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 RCB 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
RCB. If RCB 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 RCB agrees that the
investment sub-advisory fees payable to it by CNAM shall be proportionately
reduced. RCB further agrees that any reimbursement of expenses to
limit Operating Expenses in accordance with an Expense Cap shall be the
responsibility of RCB.
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. RCB, pursuant to the Investment Sub-Advisory
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 RCB, or Operating Expenses paid by
it (collectively, “subsidies”), pursuant to this Agreement may be reimbursed by
the Fund to RCB 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
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subsidies
were incurred or any more restrictive limitation to which RCB has agreed
(subsidies available for reimbursement to RCB under this paragraph are
collectively referred to as the “Recoupment Balance”) and if the Board of
Trustees approves the reimbursement. RCB generally shall seek
reimbursement on a rolling three-year basis whereby the oldest subsidies are
recouped first. RCB 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. RCB shall 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, 2010 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 RCB without payment of any penalty and shall automatically terminate upon
the termination of the Investment Management Agreement or Investment
Sub-Advisory 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 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.
***
Signature Page Follows ***
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
| CNI CHARTER FUNDS | CITY NATIONAL ASSET MANAGEMENT, INC. | ||
| By: |
____________________
|
By: |
____________________
|
| Name: | Xxxxxxx X. Xxxxx | Name: | Xxxxxxx X. Xxxxx |
| Title: | President | Title: | Chairman |
| XXXX, XXXXXX & XXXXXXXX, LLC | |||
| By: | ____________________ | ||
| Name: | Xxxxxxx Xxxxxxx | ||
| Title: | CCO | ||
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
|
|
|
Institutional
Class
|
1.24%
|
|
|
Class
N
|
1.49%
|
|
|
Class
R
|
1.49%
|
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