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Exhibit 23 (d)
Investment Management Agreement
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FORM OF
INVESTMENT MANAGEMENT AGREEMENT
This INVESTMENT MANAGEMENT AGREEMENT made and effective as of the ___
day of _____________, 1999, by and between CNI CHARTER FUNDS (formerly known as
"Berkeley Funds"), a Delaware business 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 CITY NATIONAL BANK
(hereinafter called the "Bank"), a federally chartered bank and a wholly-owned
subsidiary of CITY NATIONAL CORPORATION (hereinafter called the "Corporation"),
a bank holding 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 Bank is a banking institution whose holding company, the
Corporation, is a Delaware corporation; and
WHEREAS, the Trust desires to retain the Bank to render advice and
services to the Funds pursuant to the terms and provisions of this Agreement,
and the Bank 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 BANK. The Trust hereby employs the Bank, and the
Bank 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.
2. DUTIES OF BANK.
(a) GENERAL DUTIES. The Bank 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 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 Bank. Without limiting
the generality of the foregoing, the Bank shall: (i) furnish the Funds with
advice and recommendations with respect to the investment of each Fund's assets
and the purchase and sale of portfolio securities for the Funds, including the
taking of such other steps as may be necessary to implement such advice and
recommendations; (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)
manage the investments of the Funds, subject to the ultimate supervision and
direction of the Trust's Board of Trustee; (iv) provide persons satisfactory
to the Trust's board of Trustees to act as officers and employees of the
Trust (such officers and employees, as well as certain Trustees, may be
trustees, directors, officers, partners, or employees of the Bank or its
affiliates), but not including personnel to provide administrative services
to the Funds; and (v) 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.
(b) BROKERAGE. The Bank shall place orders for the purchase and
sale of securities either directly with the issuer or with a broker or dealer
selected by the Bank. In placing each Fund's securities trades, it is
recognized that the Bank will give primary consideration to securing the most
favorable price and efficient execution, in a reasonable effort to ensure that
each Fund's total cost or proceeds in each transaction will be the most
favorable under all the circumstances. Within the framework of this policy, the
Bank may consider the financial responsibility, research and investment
information, and other services provided by brokers or dealers who may effect or
be a party to any such transaction or other transactions to which other clients
of the Bank may be a party.
It is also understood that it is desirable for the Funds that the
Bank have access to investment and market research and securities and economic
analyses provided by brokers and others. It is also understood that brokers
providing such services may execute brokerage transactions at a higher cost to
the Funds than might result from the allocation of brokerage to other brokers on
the basis of seeking the most favorable price and efficient execution.
Therefore, the purchase and sale of securities for the Funds may be made with
brokers who provide such research and analysis, subject to review by the Trust's
Board of Trustees from time to time. It is understood by both parties that the
Bank may select broker-dealers for the execution of the Funds' portfolio
transactions who provide research and analysis which the Bank may lawfully and
appropriately use in its investment management and advisory capacities, whether
or not such research and analysis may also be useful to the Bank in connection
with its services to other clients.
On occasions when the Bank deems the purchase or sale of a
security to be in the best interest of one or more of the Funds as well as of
other clients, the Bank, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be so purchased or sold in order to
obtain the most favorable price or lower brokerage commissions and the most
efficient execution. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be made by
the Bank in the manner it considers to be the most equitable under the
circumstances and consistent with its fiduciary obligations to the Funds and to
such other clients.
3. BEST EFFORTS AND JUDGMENT. The Bank shall use its best judgment
and efforts in rendering the advice and services to the Funds as contemplated by
this Agreement.
4. INDEPENDENT CONTRACTOR. The Bank 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
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agreed that the services to be rendered by the Bank to the Funds under the
provisions of this Agreement are not to be deemed exclusive, and the Bank
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 be
materially impaired thereby.
5. BANK'S PERSONNEL. The Bank 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 necessary to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Bank shall be deemed
to include persons employed or retained by the Bank 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 Bank or
the Trust's Board of Trustees may desire and reasonably request.
6. REPORTS BY FUNDS TO BANK. Each Fund will from time to time
furnish to the Bank detailed statements of its investments and assets, and
information as to its investment objective or objectives and needs, and will
make available to the Bank 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 Bank may reasonably
request.
7. EXPENSES.
(a) With respect to the operation of each Fund, the Bank is
responsible for (i) the compensation of any of the Trust's Trustees, officers,
and employees who are affiliates of the Bank (but not the compensation of
employees performing services in 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 Bank; 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
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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 Bank incurs any costs by assuming expenses
which are an obligation of a Fund as set forth herein, such Fund shall promptly
reimburse the Bank for such costs and expenses, except to the extent the Bank
has otherwise agreed to bear such expenses. To the extent the services for
which a Fund is obligated to pay are performed by the Bank, the Bank shall be
entitled to recover from such Fund to the Extent of the Bank's actual costs for
providing such services.
8. INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a) Each Fund shall pay to the Bank, and the Bank 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 Bank.
(b) The management fee shall be accrued daily by each Fund and
paid to the Bank monthly.
(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 Bank 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 Bank 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 Bank 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 Bank voluntarily or pursuant to an agreed expense limitation
shall be reimbursed by the appropriate Fund to the Bank 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 Bank,
(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
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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 Bank to waive
or reduce its fees hereunder or to pay current Fund expenses.
(e) The Bank 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 Bank hereunder.
9. FUND SHARE ACTIVITIES OF BANK'S OFFICERS AND EMPLOYEES. The Bank
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
Bank 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 1940 Act.
10. 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.
11. BANK'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 Bank, the Bank 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
Bank and the shareholders, directors, officers and employees of the Bank (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 Bank, from liability in
violation of Sections 17(h) or (i) of the 1940 Act.
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12. NON-EXCLUSIVITY. The Trust's employment of the Bank 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.
13. 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.
14. 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
Bank, and by the Bank upon sixty (60) days' prior written notice to a Fund.
15. TERMINATION BY ASSIGNMENT. This Agreement shall terminate
automatically in the event of any transfer or assignment thereof, as defined in
the 1940 Act.
16. 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.
17. 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.
18. DEFINITIONS. The terms "majority of the outstanding voting
securities" and "interested persons" shall have the meanings as set forth in the
1940 Act.
19. NOTICE OF DECLARATION OF TRUST. The Bank agrees that the Trust's
obligations under this Agreement shall be limited to the Funds and to their
respective assets, and that the Bank 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.
20. 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.
21. 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
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inconsistent with, any federal law, regulation or rule, including the 1940
Act and the Investment Advisors Act of 1940, as amended, and any rules and
regulations promulgated thereunder.
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 CITY NATIONAL BANK
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
Bank apply to the following series of the Trust:
1. CNI Charter Money Market Fund.
Dated as of: ____________________.
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CNI CHARTER FUNDS
APPENDIX B
to the Investment Management Agreement
Each Fund shall pay to the Bank, 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:
1. CNI Charter Money Market Fund 0.25%
Dated as of: __________________.
