EXHIBIT (d)(1)
CORPORATE MANAGEMENT AGREEMENT
AGREEMENT made as of __________ by and between AHA Investment Funds,
Inc., a corporation organized under the laws of the state of Maryland (the
"Fund") and CCM Advisors, L.L.C., a limited liability company organized under
the laws of the state of Delaware (the "Investment Consultant"):
WHEREAS, the Fund is engaged 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 Fund's former investment consultant had entered into
Program Services Agreements (the "Services Agreements") with member hospitals of
the American Hospital Association ("AHA"), and their affiliated organizations
("Member Organizations") pursuant to which investment consulting and other
services are provided to Member Organizations, which agreements have been
assigned to the Investment Consultant by the former investment consultant, and
the Investment Consultant proposes to enter into similar Services Agreements
with other organizations in the future; and
WHEREAS, the Fund intends to make its shares available to organizations
that have entered into Services 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 these services
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein, 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 set forth herein.
Section 1.2 The Investment Consultant hereby accepts the appointment
and agrees to provide the services described below to the Fund upon the terms
set forth herein.
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 amounts as may be agreed to among the Fund, the Investment Consultant and the
investment managers; (e) assist 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 that 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 the other organizations);
(f) consult with the Board of Directors of the Fund and provide at its request
any advice and recommendations as necessary to assist in managing the business
and affairs of the Fund; and (g) make available the services of its members or
employees to serve as directors and officers of the Fund, subject to their due
election and appointment; and (h) provide administrative services to the Fund
and facilities such 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 those members or
employees of the Investment Consultant that 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 federal registration
and all state filings 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 that have entered into
Services Agreements with the Investment Consultant.
(b) the Investment Consultant may impose upon and collect
from organizations that have entered into Services Agreements those fees as may
be agreed to by the Investment Consultant and the organizations, and these fees
shall constitute the compensation of the Investment Consultant for the services
provided by the Investment Consultant hereunder (but these fees may also include
compensation for services provided directly to the organizations under the
Services Agreements for consulting and other services).
2
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 Directors of the Fund, subject to the terms of the agreements with the
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
to monitor and supervise the investment managers of the Portfolios, neither the
Investment Consultant nor any of its members or employees shall be required to
evaluate the merits of investment selections or decisions made by the investment
managers or be required to approve the selections or decisions or to confirm
their compliance with applicable investment policies and restrictions; these
responsibilities begin 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.
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 expenses of
printing prospectuses, proxy statements and reports, including type-setting, and
of distributing these materials to shareholders; expenses of shareholders' and
directors' meetings; fees and expenses of directors who are not members or
employees of the Investment Consultant or AHA; expenses incident to any
dividend, withdrawal or redemption options; charges and 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.
3
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 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 __ ________ 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 any uses thereof as may be requested by the
Investment Consultant and shall promptly take at the Fund's expense those 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 limited liability company duly organized under
the laws of the state of Delaware;
(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;
(c) it is not, and its associated persons are not, ineligible
to provide services to the Fund under Section 9 of the 1940 Act or Section 203
of the Advisers Act;
(d) it shall use its best efforts to assure compliance with
the conditions of Section 15(f) of the 1940 Act by the Fund; and
(e) 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 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
4
(d) the persons signing this Agreement on its behalf have
full power and authority to do so.
ARTICLE VII
WARRANTIES
Section 7.1 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 those 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 prior to the date of its
effectiveness at a special meeting to be held by the Fund on _________________.
Unless this Agreement is sooner terminated as herein provided, this Agreement
shall remain in effect until ___________________ and shall continue in effect
for successive periods of one year thereafter provided the 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, the 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 Portfolio or by the Investment Consultant, and shall
immediately terminate in the event of its assignment (to the extent required by
the Act and the rules thereunder) unless the automatic termination shall be
prevented by an exemptive order or rule 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 the Portfolio (including the payment of any fees to the investment managers
of the Fund or the Portfolio) shall cease; however, this Agreement shall remain
in effect as to each Portfolio as to which the approval or continuation has been
obtained.
5
ARTICLE IX
INFORMATION AND DUTY RESPECTING FEES
Section 9.1 The Fund agrees to furnish or otherwise make available
to the Investment Consultant all reports, records and other information
regarding the Fund and its Portfolios and their operations 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 all 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 its affiliated persons that 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 that have entered into Services 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 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 any other
action with respect to other individuals or entities that 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 members, officers, agents, or employees from buying, selling or other
wise 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 that may involve the
Fund or otherwise, except that the Investment Consultant shall comply with its
Code of Ethics, the Code of Conduct of the Fund (to the extent applicable) 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
6
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.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 PRIVACY. The Investment Consultant shall not disclose or
use nonpublic personal information (as defined in Rule 3(t) of Regulation S-P),
except as necessary to carry out the purpose for which the Fund disclosed the
information to the Investment Consultant, including information that is used in
accordance with Rules 14 and 15 of Regulation S-P in the ordinary course of
business to carry out those purposes.
Section 13.2 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 a director, 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 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 13.3 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 13.4 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 the notice.
Section 13.5 PERSONAL LIABILITY. No member 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 members for payment
or performance of any such obligations to the extent such assets exceed a
member's holdings in the Investment Consultant.
THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
7
IN WITNESS WHEREOF, the parties have executed the foregoing Agreement
effect as of the day and year above written.
CCM ADVISORS, L.L.C.
By:
-------------------------------------
Date:
-----------------------------------
AHA INVESTMENT FUNDS, INC.
By:
-------------------------------------
Date:
-----------------------------------
8
