EXHIBIT (d)(1)
CORPORATE MANAGEMENT AGREEMENT
AGREEMENT made as of the 15th day of July, 1988 by and between AHA
Investment Funds, Inc., a corporation organized under the laws of the State of
Maryland (hereinafter called the "Fund") and Xxxxxx Associates, a partnership
organized under the laws of the State of Illinois (hereinafter called the
"Investment Consultant"):
WHEREAS, the Fund intends to engage in business as an open-end
diversified management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Investment Consultant is registered as an investment adviser
under the Investment Advisers Act of 1940 (the "Advisers Act") and as a part of
its business activities, assists clients in investment planning, including
asset allocation and investment manager selection; and
WHEREAS, the Investment Consultant proposes to enter into Asset
Management Services Agreements (the "Asset Management Agreements") with member
hospitals of the American Hospital Association ("AHA"), and their affiliated
organizations ("Member Organizations") pursuant to which the Investment
Consultant will provide investment consulting and other services to Member
Organizations and may enter into similar agreements with other organizations in
the future; and
WHEREAS, the Fund intends to make its shares available to organizations
which have entered into Asset Management Agreements with the Investment
Consultant; and
WHEREAS, the Fund desires to avail itself of the experience, advice,
assistance and facilities of the Investment Consultant and to have the
Investment Consultant provide various management and consultation services on
the terms and conditions hereinafter set forth; and
WHEREAS, the Investment Consultant is willing to furnish such services on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Consultant agree as follows:
ARTICLE I
APPOINTMENT OF INVESTMENT CONSULTANT;
ACCEPTANCE OF APPOINTMENT
SECTION 1.1. The Fund hereby appoints and retains the Investment
Consultant to supervise and manage the operations of the Fund and to administer
its affairs, subject to the supervision of the Board of Directors of the Fund,
upon the terms hereinafter set forth.
SECTION 1.2. The Investment Consultant hereby accepts such appointment
and agrees to provide the services described below to the Fund upon the terms
hereinafter set forth.
ARTICLE II
DUTIES OF THE PARTIES
SECTION 2.1. DUTIES OF THE INVESTMENT CONSULTANT. The Investment
Consultant shall: (a) develop suitable investment programs for the investment
portfolios ("Portfolios") of the Fund by determining the investment styles and
strategies among which assets of the Portfolios should be allocated; (b)
recommend to the Board of Directors of the Fund and, subject to the approval of
the directors, select investment managers for the Portfolios; (c) supervise,
evaluate, monitor and report on the services provided by the investment
managers, negotiate agreements on behalf of the Fund with the investment
managers, and allocate the assets of each Portfolio among the investment
managers and coordinate the activities of the investment managers as necessary
to assist in compliance with the investment policies and restrictions of the
Portfolios and with Subchapter M of the Internal Revenue Code; (d) be solely
responsible for the payment of the fees of investment managers of the
Portfolios in such amounts as may be agreed to among the Fund, the Investment
Consultant and the investment managers; (e) assist
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in the selection of and the negotiation of agreements with, and supervise the
services provided by, the Fund's custodian, transfer agent, and other
organizations which provide accounting, administrative, recordkeeping and
other services to the Fund (but the Fund shall pay the fees and expenses of its
custodian and transfer agent and such other organizations); (f) consult with
the Board of Directors of the Fund and provide at its request such advice and
recommendations as necessary to assist in managing the business and affairs of
the Fund; and (g) make available the services of its partners or employees to
serve as directors and officers of the Fund, subject to their due election and
appointment; and (h) provide such administrative services to the Fund and such
facilities as office space, equipment and personnel as may be necessary to
provide services hereunder. All services to be furnished by the Investment
Consultant under this Agreement may be furnished through such partners or
employees of the Investment Consultant as it deems appropriate.
SECTION 2.2. DUTIES OF THE FUND. In lieu of the payment of a fee to the
Investment Consultant pursuant to this Agreement, the Fund agrees that:
(a) it shall take all actions necessary to maintain its existence as a
corporation in good standing and to maintain all federal and state
registrations necessary for the offering of its shares in all jurisdictions
requested by the Investment Consultant so as to enable shares of the Fund to be
available for purchase by organizations which have entered into Asset
Management Agreements with the Investment Consultant.
(b) the Investment Consultant may impose upon and collect from
organizations which have entered into Asset Management Agreements such fees as
may be agreed to by the Investment Consultant and such organizations, and such
fees shall constitute the compensation of the Investment Consultant for the
services provided by the Investment Consultant hereunder (but which fees may
also include compensation for services provided directly to such organizations
under the Asset Management Agreements for consulting and other services).
ARTICLE III
INVESTMENT MANAGEMENT
SECTION 3.1. EXCLUSIVE APPOINTMENT. The Fund agrees that during the
term of this Agreement, the assets of the Fund shall be managed only by the
investment managers recommended by the Investment Consultant and approved by
the Board of
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Directors of the Fund, subject to the terms of the agreements with such
investment managers as approved by the Fund and to the terms of this Agreement
as to the supervision of the investment managers and the allocation of
assets to each of them by the Investment Consultant.
SECTION 3.2. Notwithstanding the duties of the Investment Consultant
hereunder to monitor and supervise the investment managers of the Portfolios,
neither the Investment Consultant nor any of its partners or employees shall be
required to evaluate the merits of investment selections or decisions by the
investment managers or be required to approve such selections or decisions or
to confirm their compliance with applicable investment policies and
restrictions; such responsibilities being within the duties of the investment
managers.
ARTICLE IV
EXPENSES
SECTION 4.1. EXPENSES OF THE INVESTMENT CONSULTANT. The Investment
Consultant shall bear the cost and expense of rendering all services required
to be provided by it under this Agreement, including the costs of telephone
service, heat, light, power and other utilities in connection therewith.
SECTION 4.2. EXPENSES OF THE FUND.
The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund, including without limitation; charges and expenses of the Fund's
registrar, custodian, transfer agent, dividend disbursing agent and shareholder
servicing agent; brokerage fees and commissions; taxes; engraving and printing
of share certificates; registration costs of the Fund and its shares under
federal and state securities laws and expenses associated with the preparation
and filing of required reports and the maintenance of the Fund's corporate
existence; the costs and expense of printing prospectuses, proxy statements and
reports, including typesetting, and of distributing these materials to
shareholders; expenses of shareholders' and directors' meetings; fees and
expenses of directors who are not partners or employees of the Investment
Consultant or AHA; expenses incident to any dividend, withdrawal or redemption
options; charges and
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expenses of outside services used in preparing and maintaining the books and
records (including accounting records) of the Fund or used in pricing shares of
the Portfolios or rendering administrative services; membership dues in
industry organizations; interest on borrowings; postage, insurance premiums on
property and personnel (including directors and officers); the fees and
expenses of the Fund's independent accountants and its legal counsel;
extraordinary expenses (including, but not limited to, legal claims and
liabilities, litigation costs and indemnification); and all other costs of the
Fund's operations.
SECTION 4.3. EXPENSE LIMITATIONS.
In the event the operating expenses of any Portfolio for any fiscal year
ending on a date on which this Agreement is in effect, exceed the expense
limitations applicable to such Portfolio imposed by state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, the Investment Consultant shall reimburse such Portfolio for the
amount of such excess; but in an amount not to exceed the fees of the
Investment Consultant for such year received by it and attributable to services
provided under this Agreement. The Fund agrees that it shall seek to obtain
waivers of the foregoing expense limitations as may be requested by the
Investment Consultant from time to time and that, upon the granting of such
waivers, the obligation of the Investment Consultant to reimburse expenses
shall be determined in accordance with applicable expense limitations as so
waived.
For purposes of this provision, should any applicable expense limitations
be based upon the gross income of the Fund, such gross income shall include,
but not be limited to, interest on debt securities in the Fund's Portfolios
accrued to and including the last day of the Fund's fiscal year, and dividends
declared on equity securities in the Fund's Portfolios, the record dates for
which fall on or prior to the last day of such fiscal year, but shall not
include gains from the sale of securities.
ARTICLE V
USE OF NAME AND LOGO
SECTION 5.1. The Parties hereto acknowledge that the names "AHA",
which comprises a component of the Fund's name, and "American Hospital
Association", and all logos, emblems and other symbols associated with the
foregoing, are
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property rights of AHA which the Investment Consultant has been granted the
non-exclusive right to use and the right to permit the Fund to use pursuant to
an agreement made as of March 1, 1988 by and between AHA and the Investment
Consultant (the "Licensing Agreement"). The Fund agrees that its right to use
the foregoing names and symbols shall be subject to the terms of the Licensing
Agreement, that it shall make use thereof only as authorized by the Investment
Consultant, and that, upon the request of the Investment Consultant, it shall
cease such uses thereof as may be requested by the Investment Consultant and
shall promptly take at the Fund's expense such steps as may be necessary to
eliminate the use of the term "AHA" in the name of the Fund.
ARTICLE VI
REPRESENTATIONS
SECTION 6.1. BY THE INVESTMENT CONSULTANT. The Investment Consultant
represents that:
(a) it is a partnership duly organized under the laws of the State of
Illinois;
(b) it has in effect all registrations, licenses, bonds and approvals
necessary for its entering into this Agreement and the performance of its
duties hereunder and is registered as an investment adviser under the Advisers
Act; and
(c) the persons signing this Agreement on its behalf have full power and
authority to do so.
SECTION 6.2. BY THE FUND. The Fund represents that:
(a) it is a corporation duly organized under the laws of the State of
Maryland;
(b) it has full power and authority to enter into this Agreement;
(c) it has in effect, or will obtain prior to the commencement of its
operations, all registrations, licenses, bonds and approvals necessary for its
entering into this Agreement and the performance of its duties hereunder and is
registered as an investment company under the Act; and
(d) the persons signing this Agreement on its behalf have full power and
authority to do so.
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ARTICLE VII
WARRANTIES
SECTION 7.2 BY THE INVESTMENT CONSULTANT. The Investment Consultant
warrants that:
(a) it shall perform its duties hereunder in full compliance with all
applicable laws and regulations, including, but not limited to, the Act and the
Advisers Act and all rules and regulations under such acts; and
(b) it shall maintain all registrations, licenses, bonds, and approvals
that may be necessary in the performance of its duties hereunder, including,
but not limited to, its registration as an investment adviser under the
Advisers Act.
SECTION 7.2. BY THE FUND. The Fund warrants that it shall maintain all
registrations, licenses, bonds and approvals that may be necessary, in the
performance of its duties hereunder.
ARTICLE VIII
TERM OF AGREEMENT
SECTION 8.1. DURATION AND TERMINATION. This Agreement shall become
effective on the date first set forth above, but shall be subject to approval
by the shareholders of each Portfolio of the Fund at the first special or
annual meeting held by the Fund after commencement of the public offering of
shares of the Fund. Unless such approvals are not obtained from shareholders or
this Agreement is terminated as herein provided, this Agreement shall remain in
effect until June 30, 1990 and shall continue in effect for successive periods
of one year thereafter provided such continuance is approved at least annually
by a majority shareholder vote, as defined in the Act, of each Portfolio or by
the Board of Directors of the Fund; PROVIDED THAT, in either case, such
continuance is also approved by the vote of a majority of the directors who are
not interested persons, as defined in the Act, of the Fund or the Investment
Consultant. This Agreement may be terminated as to any Portfolio at any time
and without the payment of any penalty, upon sixty days' written notice by the
Fund's Board of Directors, by the holders of the majority of the shares of a
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Portfolio or by Xxxxxx, and shall immediately terminate in the event of its
assignment (to the extent required by the Act and the rules thereunder) unless
such automatic termination shall be prevented by an exemptive order of the
Securities and Exchange Commission. In the event that the Fund or shareholders
of a Portfolio fail to approve or to continue this Agreement as may be
necessary for the continuation thereof, the obligations of the Investment
Consultant with respect to the Fund or such Portfolio (including the payment of
any fees to the investment managers of the Fund or such Portfolio) shall cease;
however, this Agreement shall remain in effect as to each Portfolio as to which
such approval or continuation has been obtained.
ARTICLE IX
INFORMATION AND DUTY RESPECTING FEES
SECTION 9.1. The Fund agrees to furnish or otherwise make available to
the Investment Consultant such reports, records and other information regarding
the Fund and its Portfolios and the operations thereof as may be necessary for
the Investment Consultant to perform the services required to be provided by it
under this Agreement.
SECTION 9.2. Upon the request of the Fund, the Investment Consultant
shall provide such documents, financial information, reports and other
information as may reasonably be necessary to permit the Fund's Board of
Directors to make an informed decision as to whether to continue this Agreement
and to evaluate the services and compensation of the Investment Consultant.
SECTION 9.3. The parties hereto agree that the provisions of Section
36(b) of the Act shall be applicable to compensation received by the Investment
Consultant and affiliated persons thereof which is paid by shareholders of the
Fund and attributable to services provided to the Fund. To effectuate the
foregoing, the Investment Consultant will provide information regarding fees it
charges to organizations which have entered into Asset Management Agreements
and information regarding fee reductions it has obtained from investment
managers.
ARTICLE X
OTHER INVESTMENT ACTIVITIES OF INVESTMENT CONSULTANT
SECTION 10.1. The Fund acknowledges that the Investment Consultant or
one or more of its affiliates may
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have responsibilities or render services to other individuals or entities. The
Fund agrees that the Investment Consultant or its affiliates may give advice or
exercise responsibility and take such other action with respect to other
individuals or entities which may differ from advice given or the timing or
nature of action taken with respect to the Fund, provided that the Investment
Consultant acts in good faith. Nothing in this Agreement shall limit or
restrict the Investment Consultant, its affiliates, or any of its or their
partners, officers, agents, or employees from buying, selling or otherwise
dealing with any securities or investments or other investment responsibility
or rendering investment advice for their own account or the account of others,
and they may at any time hold, acquire, increase, decrease, dispose of or
otherwise deal with positions in investments in which the Fund may have an
interest from time to time, whether in transactions which may involve the Fund
or otherwise, except that the Investment Consultant shall comply with the Code
of Conduct of the Fund and applicable law.
ARTICLE XI
LIABILITY
SECTION 11.1. The Investment Consultant assumes no responsibility under
this Agreement other than to render the services called for hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations hereunder, the Investment Consultant shall not be
liable to the Fund or any of its shareholders for any act or omission or for
any loss arising out of any investment.
ARTICLE XII
AMENDMENT
SECTION 12. 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 Fund nor the
Investment Consultant shall be liable for failing to do so.
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Article XIII
MISCELLANEOUS
SECTION 13.1. COMPENSATION OF OFFICERS, DIRECTORS AND EMPLOYEES. No
director, officer or employee of the Fund shall receive from the Fund any
salary or other compensation as such director, officer or employee while he is
at the same time a partner or employee of the Investment Consultant or AHA.
This paragraph shall not apply to consultants and other persons who are not
regular members of the Investment Consultant's staff.
SECTION 13.2. INTERPRETATION. This Agreement shall be interpreted and
construed in accordance with the laws of the State of Illinois. The titles of
the Articles and Sections in this Agreement have been inserted as a matter of
convenience only and shall not control or affect the meaning or construction of
any of the terms and provisions hereof.
SECTION 13.3. NOTICES. Any notice required or desired to be given under
this Agreement shall be in writing and shall be effective when received by the
party to be given such notice.
SECTION 13.4. PERSONAL LIABILITY. No partner of the Investment
Consultant shall have any personal liability for the payment of any sum due
hereunder or for observance or performance of the obligations contained herein,
and no other party will resort to the personal assets of the partners for
payment or performance of any such obligations to the extent
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such assets exceed a partner's holdings in the Investment Consultant.
IN WITNESS WHEREOF, the parties have executed the foregoing Agreement
effective as of the day and year above written.
XXXXXX ASSOCIATES:
By: /s/ Xxxxx X. Xxxxxxx
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Date: August 5, 1988
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AHA INVESTMENT FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Date: August 5, 1988
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