INVESTMENT MANAGER AGREEMENT
This AGREEMENT made as of ___________, 2008 by and between
City National Asset Management, Inc., a California corporation (the "Adviser")
and SKBA Capital Management, LLC, a Delaware limited liability company (the
"Investment Manager"), on behalf of the Opportunistic Value Fund (the "Fund"), a
series of CNI Charter Funds (the "Trust"):
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust issues shares (the "Shares") of the Fund registered
under the 1940 Act pursuant to a registration statement filed with the
Securities and Exchange Commission (the "SEC"), as amended from time to time
(the "Registration Statement");
WHEREAS, the Investment Manager is an investment adviser registered
under the Investment Advisers Act of 1940, as amended (the "Advisers Act") and
has filed notification filings under all applicable state securities laws;
WHEREAS, the Adviser is employed by the Trust to act as investment
adviser for and to manage, or arrange for the management of, the investment and
reinvestment of the assets of such portion of the assets of the Fund as the
Adviser shall from time to time designate (the "Account"), to the extent
requested by and subject to the supervision and control of, the Board of
Trustees of the Trust (the "Board");
WHEREAS, the Trust and the Adviser desire to retain the Investment
Manager to render investment advisory services to the Account; and
WHEREAS, the Investment Manager is willing to provide investment
advisory services to the Account, in the manner and on the terms and conditions
set forth below;
NOW, THEREFORE, in consideration of their mutual promises, the Adviser
and the Investment Manager agree as follows:
ARTICLE 1
Employment of Investment Manager
1.1 The Adviser hereby employs the Investment Manager to
manage the investment and reinvestment of the assets of the Account, to the
extent requested by and subject to the supervision and control of, the Adviser
and the Board for the period and upon the terms herein set forth.
1.2 The Investment Manager accepts such employment and agrees
during such period at its own expense to render such services, and to assume the
obligations herein set forth for the compensation herein provided.
1.3 The Investment Manager shall for all purposes be deemed to
be an independent contractor, and unless otherwise expressly provided or
authorized shall have no authority to act for or represent the Trust or the Fund
in any way or otherwise be deemed an agent of the Trust, the Fund or the
Adviser. Notwithstanding the foregoing, the Investment Manager shall, for the
purposes of this agreement, have authority to act as agent for the Fund, subject
to supervision by the Adviser and the Board.
1.4 The services of the Investment Manager herein provided are
not to be deemed exclusive and the Investment Manager shall be free to render
similar services or other services to others so long as its services hereunder
shall not be impaired thereby.
ARTICLE 2
Duties of Investment Manager
2.1 Investment Management Services.
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(a) Subject to the general supervision of the Board
and the Adviser, the Investment Manager shall
provide a continuous and discretionary investment program for the Account and
determine the composition of the assets of the Account, including determination
of the purchase, retention or sale of the securities, cash and other investments
for the Account. In performing these duties, the Investment Manager shall:
(i) perform research and obtain and evaluate
pertinent economic, statistical, and financial data relevant to the investment
policies of the Fund as set forth in the Registration Statement;
(ii) seek out and implement specific
investment opportunities, consistent with any investment
strategies approved by the Board;
(iii) take such steps as are necessary to
implement any overall investment strategies approved
by the Board for the Fund, including making and carrying out day-to-day
decisions to acquire or dispose of permissible investments, managing investments
and any other property of the Account, and providing or obtaining such services
as may be necessary in managing, acquiring or disposing of investments;
(iv) regularly report to the Board with
respect to the implementation of any approved overall
investment strategy and any other activities in connection with management of
the assets of the Account, including furnishing, within 60 days after the end of
each calendar quarter, a statement of all purchases and sales during the quarter
and a schedule of investments and other assets of the Account as of the end of
the quarter;
(v) maintain all required accounts, records,
memoranda, instructions or authorizations
relating to the acquisition or disposition of investments for the Account;
(vi) provide such information as is
reasonably requested to assist in the determination of the
net asset value of the shares of the Fund in accordance with applicable law; and
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(vii) not consult with any other sub-adviser
of any other portion of the Fund or any other
series of the Trust concerning transactions of the Fund or any other series of
the Trust in which (a) the Investment Manager of any of its affiliated persons
serves as principal underwriter, or (b) such other sub-adviser or any of its
affiliated persons serves as principal underwriter.
(b) The Investment Manager acknowledges that neither the
Adviser nor its employees shall be required to evaluate the merits of investment
selections or decisions made by the Investment Manager or be required to approve
the selections or decisions, or to confirm their compliance with applicable
investment policies and restrictions; these responsibilities being within the
duties of the Investment Manager.
(c) The Investment Manager's services shall be subject always
to the control and supervision of the Adviser and the Board, the restrictions of
the Agreement and Declaration of Trust (the "Declaration of Trust") and Bylaws
of the Trust, as amended from time to time, the provisions of the 1940 Act, the
statements relating to the Fund's investment objective or objectives, investment
policies and investment restrictions as set forth in the then-current
Registration Statement, and any applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"). The Adviser has furnished or will furnish
the Investment Manager with copies of the Registration Statement, Declaration of
Trust, and Bylaws as currently in effect and agrees during the continuance of
this agreement to furnish the Investment Manager with copies of any amendments
or supplements thereto before or at the time the amendments or supplements
become effective. The Investment Manager will be entitled to rely on all
documents furnished by the Adviser.
(d) The Investment Manager represents that it shall make every
effort to ensure that the Fund continuously qualifies as a Regulated Investment
Company under Subchapter M of the Code or any successor provision. Except as
instructed by the Board or the Adviser, the Investment Manager shall also make
decisions for the Account as to the manner in which voting rights, rights to
consent to corporate action and any other rights pertaining to the Account's
portfolio securities shall be exercised. Should the Board at any time make any
determination as to investment policy and notify the Investment Manager thereof,
the Investment Manager shall be bound by such determination for the period, if
any, specified in such notice or until similarly notified that such
determination has been revoked.
(e) In connection with the acquisition or disposition of
securities described in Section 2.1(a) (iii), the Investment Manager may place
orders for the purchase or sale of Account investments for the account of the
Fund with brokers or dealers selected by it and, to that end, the Investment
Manager is authorized as agents of the Fund to give instructions to the
custodian of the Fund as to deliveries of securities and payments of cash for
the account of the Fund. In connection with the selection of brokers or dealers
and the placing of purchase and sale orders with respect to assets of the
Account, the Investment Manager is directed at all times to seek to obtain the
best combination of net price and execution under the circumstances within the
policy guidelines as set forth in the current Registration Statement. Subject to
this requirement and the provisions of the Advisers Act, the 1940 Act, and other
applicable provisions of law, the Investment Manager may select brokers or
dealers with which it, the Adviser or the Fund is affiliated.
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(f) In addition to seeking the best combination of net price
and execution under the circumstances, the Investment Manager may also take into
consideration research and statistical information and wire and other quotation
services provided by brokers and dealers to the Adviser and Investment Manager.
The Investment Manager is also authorized to effect individual securities
transactions at commission rates in excess of the minimum commission rates
available, if the Investment Manager determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or Investment Manager's overall responsibilities
with respect to the Account. The policies with respect to brokerage allocation,
determined from time to time by the Board are those disclosed in the
Registration Statement. The execution of such transactions shall not be deemed
to represent an unlawful act or breach of any duty created by this agreement or
otherwise. The Investment Manager periodically will evaluate the statistical
data, research and other investment services provided to it by brokers and
dealers. Such services may be used by the Investment Manager in connection with
the performance of its obligations under this agreement or in connection with
other advisory or investment operations including using such information in
managing its own accounts.
(g) Nothing in this agreement shall preclude the aggregation
of orders for sale or purchase of securities or other investments by two or more
series of the Trust or by the Trust and other accounts (collectively, "Advisory
Clients") managed by the Adviser or the Investment Manager to the Fund, provided
that: (i) the Adviser or Investment Manager's actions with respect to the
aggregation of orders for multiple Advisory Clients, including the Fund, are
consistent with the then-current positions in this regard taken by the
Securities and Exchange Commission or its staff through releases, "no-action"
letters, or otherwise; and (ii) the Investment Manager's policies with respect
to the aggregation of orders for multiple Advisory Clients have been previously
submitted to the Adviser.
(h) The Investment Manager will advise the Adviser and, if
instructed by the Adviser, the Fund's custodian on a prompt basis each day by
electronic telecommunication or facsimile of each confirmed purchase and sale of
a portfolio security specifying the name of the issuer, the full description of
the security including its class, amount or number of shares of the security
purchased or sold, the market price, the commission, government charges and
gross or net price, trade date, settlement date and identity of the clearing
broker. Under no circumstances may the Trust, the Adviser, the Investment
Manager, SEI Investments Global Funds Services or any affiliates of such parties
act as principal in a securities transaction with the Fund or any other
investment company managed by the Adviser unless (i) permitted by an exemptive
provision, rule or order under the 1940 Act and (ii) upon obtaining prior
approval of the securities transaction from the Adviser. Any such transactions
shall be reported quarterly to the Board.
(i) The Investment Manager shall inform the Adviser and the
Board on a current basis of changes in investment strategy or tactics or key
personnel. It shall also be the duty of the Investment Manager to furnish to the
Board such information as may reasonably be necessary for the Board to evaluate
this agreement or any proposed amendments thereto for the purposes of casting a
vote pursuant to Section 7.
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(j) The Investment Manager represents and warrants that it is
in compliance with all applicable rules and regulations of the SEC pertaining to
its investment advisory activities and agrees that it will conform with all
applicable rules and regulations of the SEC pertaining to its investment
advisory activities.
(k) The Investment Manager acknowledges and agrees that (i)
the names "CNI Charter" and "CNI Charter Funds" are the property of City
National Bank, and (ii) the Investment Manager will publicly disseminate
information concerning the Fund and the Trust only if such information has been
approved in advance by the Trust.
ARTICLE 3
Allocation of Charges and Expenses
3.1 The Investment Manager will bear its own costs of
providing services hereunder. Other than as specifically indicated herein the
Investment Manager shall not be responsible for the Fund's or the Adviser's
expenses, including, without limitation: the day to day expenses related to the
operation and maintenance of office space, facilities and equipment; expenses
incurred in the organization of the Fund, including legal and accounting
expenses and certain costs of registering securities of the Fund under federal
securities law and qualifying for sale under state securities laws; any share
redemption expenses; expenses of portfolio transactions; shareholder servicing
costs; pricing costs; interest on borrowings by the Fund; charges of the
custodian and transfer agent, if any; cost of auditing services; all taxes and
fees; certain insurance premiums; investor services (including allocable
personnel and telephone expenses); the cost of paying dividends and capital
gains distributions and any extraordinary expenses, including litigation costs
in legal actions involving the Fund, or costs related to indemnification of
Trustees, officers and employees of the Trust.
3.2 The Fund shall be free to retain at its expense other
persons to furnish it with any services whatsoever, including, without
limitation, statistical, factual or technical information or advice.
ARTICLE 4
Compensation of the Investment Manager
4.1 For the services to be rendered as provided herein, the
Adviser shall pay to the Investment Manager for each month of the Fund's fiscal
year on the last day of each such month a fee based upon the average daily net
assets of the Account for such month, as determined pursuant to the Fund's
Registration Statement, at the following annual rate as a percentage of the
Account's average daily net assets:
45 basis points (0.45%)
4.2 For the month and year in which this agreement becomes
effective or terminates there shall be an appropriate proration on the basis of
the number of days that the agreement is in effect during the month and year
respectively.
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4.3 If the net asset value is not required to be determined on
any particular business day, then for the purpose of the foregoing computations,
the net asset value of a share as last determined shall be deemed to be the net
asset value of a share as of the close of business on that day.
4.4 In connection with purchases or sales of portfolio
securities for the account of the Fund, neither the Investment Manager nor any
officer, director, shareholder or other affiliate of the Investment Manager
shall: (i) act as agent and accept any compensation other than its compensation
provided for in this agreement, except in the course of such person's business
as an underwriter or broker; or (ii) act as broker and accept any commission,
fee, or other remuneration in excess of the limits prescribed in the 1940 Act
and the rules promulgated thereunder.
4.5 The Investment Manager agrees that in all matters relating
to the management of the investment of the assets of the Fund, it will act in
conformity with the Registration Statement, Declaration of Trust, and Bylaws of
the Trust then in effect as provided to the Investment Manager in accordance
with Section 2.1 (c).
ARTICLE 5
Limitations of Liability
5.1 The Investment Manager shall give the Fund the benefit of
the Investment Manager's best judgment and efforts in rendering services under
this agreement; provided, that the Investment Manager shall not be liable for
any error of judgment or import of law, or for any loss suffered by the Trust in
connection with the matters to which this agreement relates, except loss
resulting from: (i) willful misfeasance, bad faith or gross negligence on the
part of the Investment Manager in the performance of its obligations and duties
under this agreement; (ii) its reckless disregard of its obligations and duties
under this agreement; or (iii) a breach of Section 2.1(d) of this agreement. The
terms of this Section 5.1 shall survive termination of this agreement.
ARTICLE 6
Books and Records
6.1 In accordance with the requirements of Rule 31a-3 under
the 1940 Act, the Investment Manager shall maintain separate books and detailed
records pertaining to the Investment Manager's provision of investment
sub-advisory services to the Fund (the "Fund's Books and Records"), including
without limitation the records required by subparagraphs (b)(5), (6), (7), (9),
(10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Fund's
Books and Records shall be available by overnight delivery of copies or for
telecopying without delay to the Adviser during any day that the Fund is open
for business. The Investment Manager shall preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the Fund's Books and Records.
6.2 The Investment Manager agrees that the Fund's Books and
Records which it maintains for the Fund in accordance with Rule 31a-3 under the
1940 Act are the property of the Trust and further agrees to surrender promptly
to the Trust any such books, records or
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information upon the Trust's reasonable request; provided, however, that the
Investment Manager may maintain copies of such books and records. All such books
and records shall be made available, within five business days of a written
request, to the Trust's independent registered public accounting firm during
regular business hours at the Adviser's offices. The Trust or its authorized
representative shall have the right to copy any of the Fund's Books and Records
in the possession of the Investment Manager. Such books, records, information or
reports shall be made available to properly authorized government
representatives consistent with state and federal law and/or regulations. In the
event of the termination of this agreement, all such books, records or other
information shall be returned to the Trust free from any claim or assertion of
rights by the Investment Manager; provided, however, that the Investment Manager
may maintain copies of such records.
6.3 The Investment Manager further 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, if
such disclosure is required by federal or state regulatory authorities, or if
such information is already in the public domain.
ARTICLE 7
Duration and Termination of this Agreement
7.1 This agreement shall not become effective unless and until
the later of the time at which it is approved by the Board, including a majority
of Trustees who are not parties to this agreement or interested persons of any
such party to this agreement, or the time at which it is approved by a majority
of the Fund's outstanding voting securities as required by the 1940 Act. This
agreement shall come into full force and effect on the later of such two dates.
The agreement shall continue in effect for two years and shall thereafter
continue in effect from year to year so long as such continuance is specifically
approved at least annually by: (i) the Board, or by the vote of a majority of
the Fund's outstanding voting securities; and (ii) a majority of those Trustees
who are not parties to this agreement or interested persons of any such party
cast in person at a meeting called for the purpose of voting on such approval.
7.2 Termination.
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(a) This agreement may be terminated at any time,
without penalty, by vote of the Board or by vote of
the holders of a majority of such Fund's outstanding voting securities, or by
the Adviser or Investment Manager, on sixty (60) days' written notice to the
other party.
(b) This agreement may be terminated at any time
without the payment of any penalty by vote of the
Board in the event that it shall have been established by a court of competent
jurisdiction that the Investment Manager or any officer or director of the
Investment Manager has taken any action which results in a breach of the
covenants of the Investment Manager set forth herein.
(c) This agreement shall automatically terminate in
the event of its assignment.
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ARTICLE 8
Amendments to this Agreement
8.1 This agreement may be amended by the parties only if such
amendment is specifically approved by: (i) if required by law the vote of a
majority of the Fund's outstanding voting securities, and (ii) a majority of
those Trustees who are not parties to this agreement or interested persons of
any such party cast in person at a meeting called for the purpose of voting on
such approval.
8.2 Notwithstanding anything herein to the contrary, this
agreement may be amended by the parties without the vote or consent of
shareholders of the Fund to supply any omission, to cure, correct or supplement
any ambiguous, defective or inconsistent provision hereof, or if they deem
necessary to conform this Agreement to the requirements of applicable federal
laws or regulations, but neither the Adviser or Investment Manager shall be
liable for failing to do so.
ARTICLE 9
Notices
9.1 Any notice shall be sufficiently given when sent by
registered or certified mail to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.
If to the Adviser:
City National Asset Management, Inc.
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▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: [_______]
If to the Investment Manager:
SKBA Capital Management, LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: [_______]
ARTICLE 10
Miscellaneous Provisions
10.1 Other Relationships. It is understood that the officers,
Trustees, agents, shareholders and other affiliates of the Trust are or may be
interested in the Adviser or Investment Manager as officers, directors, agents,
shareholders, affiliates or otherwise, and that
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the officers, directors, shareholders, agents and other affiliates of the
Adviser or Investment Manager may be interested in the Trust otherwise than as
shareholders.
10.2 Definitions of Certain Terms. The terms "assignment,"
"affiliated person" and "interested person", when used in this agreement, shall
have the respective meanings specified in the 1940 Act. The term "majority of
the outstanding voting securities" means the lesser of: (a) 67% or more of the
votes attributable to Shares of the Fund or the Trust, as appropriate, present
at a meeting if the holders of more than 50% of such votes are present or
represented by proxy; or (b) more than 50% of the votes attributable to Shares
of the Fund or the Trust, as appropriate.
10.3 Applicable Law.
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(a) This agreement shall be construed and the
provisions hereof interpreted under and in accordance with the laws of Delaware
without regard to conflicts of law principles or
precedents.
(b) This agreement shall be subject to the provisions
of the Securities Act of 1933, as amended, the
1940 Act and the Securities Exchange Act of 1934, as amended, and the rules and
regulations and rulings thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant and the terms hereof shall
be interpreted and construed in accordance therewith.
10.4 Severability. 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.
10.5 Captions. The captions in this agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
10.6 Counterparts. This agreement may be executed
simultaneously in multiple counterparts, each of which taken together shall
constitute one and the same instrument.
10.7 Cooperation with Authorities. Each party hereto shall
cooperate with the other party and all appropriate governmental authorities
(including without limitation the SEC) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this agreement or the transactions contemplated hereby.
10.8 Cumulative Rights. The rights, remedies and obligations
contained in this agreement are cumulative and are in addition to any and all
rights, remedies and obligations, at law or in equity, which the parties hereto
are entitled to under state and federal laws.
10.9 Compensation of Officers, Trustees and Employees. No
Trustee, officer or employee of the Trust shall receive from the Trust any
salary or other compensation as a Trustee, officer or employee of the Fund while
at the same time holding a position as a director, officer, partner, member or
employee of the Investment Manager. This paragraph shall not apply to
consultants and other persons who are not regular members of the Investment
Manager's staff.
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10.10 Personal Liability. The names "CNI Charter Funds" and
"Trustees" refer respectively to the Trust and to the Trustees, as trustees but
not individually or personally. The obligations of "CNI Charter Funds" entered
into in the name or on behalf hereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are not binding
upon any of the Trustees, shareholders or representatives of the Trust
personally, but bind only the assets of the Trust and all persons dealing with
any series of shares of the Trust must look solely to the assets of the Trust
belonging to such series for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed in their names and on their behalf by their duly
authorized officers all on the day and year first above written.
CITY NATIONAL ASSET MANAGEMENT, INC.
(Adviser)
By: _________________________________
Title: _______________________________
SKBA CAPITAL MANAGEMENT, LLC
(Investment Manager)
By: __________________________________
Title: ________________________________