Exhibit (e)(1)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this ___ day of December, 2004 (the
"EFFECTIVE DATE") between AHA Investment Funds, Inc. (the "COMPANY"), a Maryland
corporation and SEI Investments Distribution Co. (the "DISTRIBUTOR"), a
Pennsylvania corporation.
WHEREAS, the Company is registered as an investment company with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "1940 ACT"), and its shares are registered with the SEC
under the Securities Act of 1933, as amended (the "1933 ACT"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Company and Distributor hereby agree as follows:
ARTICLE 1. SALE OF SHARES. The Company grants to the Distributor the
right to sell shares (the "Shares") of the series (each, a "FUND" and
collectively, the "FUNDS") as agent and on behalf of the Company at the net
asset value per Share, plus any applicable sales charges in accordance with the
current prospectus, as agent and on behalf of the Company, during the term of
this Agreement and subject to the registration requirements of the 1933 Act, the
rules and regulations of the SEC and the laws governing the sale of securities
in the various states ("BLUE SKY LAWS"). The rights granted to the Distributor
pursuant to this Article 1 shall be non-exclusive, in that, the Company reserves
the right to sell Shares to investors on applications received and accepted by
the Company; provided, however, other than Company's rights herein, no other
entity shall be permitted to sell any such Shares other than Distributor. The
Company reserves the right to suspend sales in accordance with the Company's
Prospectus(es), if in the commercially reasonable judgment of the Company, the
Company determines it is in the best interests of the Company to do so.
Suspension will continue for such period as may be determined by the Company.
ARTICLE 2. SOLICITATION OF SALES. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable efforts
in connection with the distribution of Shares of the series of the Company;
provided, however, that the Distributor shall not be prevented from entering
into like arrangements with other issuers. The provisions of this paragraph do
not obligate the Distributor to register as a broker or dealer under the Blue
Sky Laws of any jurisdiction when it determines it would be uneconomical for it
to do so or to maintain its registration in any jurisdiction in which it is now
registered or obligate the Distributor to sell any particular number of Shares.
The Distributor shall be responsible for reviewing and filing any sales
literature or advertising material (including material disseminated through
radio, television or other electronic media) concerning Company shares with the
SEC and the National Association of Securities Dealers, Inc. ("NASD") to the
extent required by the Securities Exchange Act of 1934, as amended, and the 1940
Act and the rules and regulations thereunder, and by the rules of the NASD. All
such materials must be approved by the Distributor, in writing, prior to use.
ARTICLE 3. AUTHORIZED REPRESENTATIONS. The Distributor is not
authorized by the Company to give any information or to make any representations
other than those contained in the current registration statement and
prospectuses of the Company filed with the SEC or contained in shareholder
reports or other material that may be prepared by or on behalf of the Company
for the Distributor's use.
ARTICLE 4. REGISTRATION OF SHARES. The Company agrees that it will take
all action necessary to register the Shares under the federal and state
securities laws so that there will be available for sale the number of Shares
the Distributor may reasonably be expected to sell and to pay all fees
associated with said registration. The Company shall make available to the
Distributor such number of copies of its currently effective prospectus and
statement of additional information as the Distributor may reasonably request.
The Company shall furnish to the Distributor copies of all information,
financial statements and other papers related to the Company which the
Distributor may reasonably request for use in connection with the distribution
of the Shares of the series of the Company.
ARTICLE 5. COMPENSATION. As compensation for providing the services
under this Agreement:
(a) The Distributor shall receive from the Company to the extent
applicable:
(1) all distribution and service fees, as applicable, at the
rate and under the terms and conditions set forth in each
distribution and/or shareholder services plan applicable to
the appropriate class of shares of each Fund, as such plans
may be amended from time to time, and subject to any further
limitations on such fees as the Board of Directors of the
Company may impose;
(2) all front-end sales charges, if any, on purchases of
Shares of each Fund sold subject to such charges as described
in the Company's registration statement and current
prospectuses, as amended from time to time. The Distributor,
or brokers, dealers and other financial institutions and
intermediaries that have entered into sub-distribution
agreements with the Distributor, may collect the gross
proceeds derived from the sale of such Shares, remit the net
asset value thereof to the Company upon receipt of the
proceeds and retain the applicable sales charge; and
(3) all contingent deferred sales charges applied on
redemptions of the Shares, subject to such charges on the
terms and subject to such waivers as are described in the
Company's registration statement and current prospectuses, as
amended from time to time, or as otherwise required pursuant
to applicable law.
(b) The Distributor may re-allow any or all of the distribution or
service fees, front-end sales charges and contingent deferred sales
charges which it is paid by the Company to such brokers, dealers and
other financial institutions and intermediaries as the Distributor may
from time to time determine.
ARTICLE 6. ORDERS AND PAYMENT FOR SHARES. Distributor shall direct
selling dealers to deliver orders for the purchase of Shares of any series to
the Company's transfer agent. Furthermore, any order may be rejected by the
Company; provided, however, that the Company will not arbitrarily or without
reasonable cause refuse to accept or confirm orders for the purchase of Shares
from eligible investors. The Company specifically reserves the right to reject
orders in accordance with the Company Prospectus(es).
ARTICLE 7. INDEMNIFICATION OF DISTRIBUTOR. The Company agrees to
indemnify and hold harmless the Distributor and each of its directors and
officers and each person, if any, who controls the Distributor within the
meaning of Section 15 of the 1933 Act against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages, or expense and reasonable counsel
fees and disbursements incurred in connection therewith), arising by reason of
any person acquiring any Shares, based upon the ground that the registration
statement, prospectus, shareholder reports or other information filed or made
public by the Company (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements made not misleading.
However, the Company does not agree to indemnify the Distributor or hold it
harmless to the extent that the statements or omission was made in reliance
upon, and in conformity with, information furnished to the Company by or on
behalf of the Distributor.
In no case (i) is the indemnity of the Company to be deemed to protect
the Distributor against any liability to the Company or its shareholders to
which the Distributor or such person otherwise would be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement, or (ii) is the Company to be liable to the Distributor
under the indemnity agreement contained in this paragraph with respect to any
claim made against the Distributor or any person indemnified, unless the
Distributor or other person shall have notified the Company in writing of the
claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or such other person (or after the Distributor or
the person shall have received notice of service on any designated agent).
However, failure to notify the Company of any claim shall not relieve the
Company from liability which it may have to the Distributor or any person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph.
The Company shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Company elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Company and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Company
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Company does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Company agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its directors
or officers in connection with the issuance or sale of any of its Shares.
ARTICLE 8. INDEMNIFICATION OF THE COMPANY. The Distributor covenants
and agrees that it will indemnify and hold harmless the Company and each of its
directors and officers and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act, against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense and reasonable counsel
fees incurred in connection therewith) based upon the 1933 Act or any other
statute or common law and arising by reason of any person acquiring any Shares,
and alleging a wrongful act of the Distributor or any of its employees or
alleging that the registration statement, prospectus, shareholder reports or
other information filed or made public by the Company (as from time to time
amended) included an untrue statement of a material fact or omitted to state a
material fact required to be stated or necessary in order to make the statements
not misleading, insofar as the statement or omission was made in reliance upon
and in conformity with information furnished to the Company by or on behalf of
the Distributor.
In no case (i) is the indemnity of the Distributor in favor of the
Company or any other person indemnified to be deemed to protect the Company or
any other person against any liability to which the Company or such other person
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Company or any person
indemnified, unless the Company or person, as the case may be, shall have
notified the Distributor in writing of the claim within a reasonable time after
the summons or other first written notification giving information of the nature
of the claim shall have been served upon the Company or upon any person (or
after the Company or such person shall have received notice of service on any
designated agent). However, failure to notify the Distributor of any claim shall
not relieve the Distributor from any liability which it may have to the Company
or any person against whom the action is brought otherwise than on account of
its indemnity agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Company promptly of the
commencement of any litigation or proceedings against it or any of its officers
in connection with the issue and sale of any of the Shares.
ARTICLE 9. CONSEQUENTIAL DAMAGES. IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO ANYONE,
INCLUDING, WITHOUT LIMITATION, THE OTHER PARTY, FOR CONSEQUENTIAL DAMAGES FOR
ANY ACT OR FAILURE TO ACT UNDER ANY PROVISION OF THIS AGREEMENT.
ARTICLE 10. EFFECTIVE DATE. This Agreement shall be effective upon its
execution, and, unless terminated as provided, shall continue in force for two
(2) year(s) from the Effective Date and thereafter from year to year, provided
that such annual continuance is approved by (i) either the vote of a majority of
the Board of Directors of the Company, or the vote of a majority of the
outstanding voting securities of the Company, and (ii) the vote of a majority of
those members of the Board of Directors of the Company who are not parties to
this Agreement or the Company's distribution plan or interested persons of any
such party ("QUALIFIED DIRECTORS"), cast in person at a meeting called for the
purpose of voting on the approval. This Agreement shall automatically terminate
in the event of its assignment. As used in this paragraph the terms "VOTE OF A
MAJORITY OF THE OUTSTANDING VOTING SECURITIES," "ASSIGNMENT" and "INTERESTED
PERSON" shall have the respective meanings specified in the 1940 Act. In
addition, this Agreement may at any time be terminated without penalty by the
Distributor, by a vote of a majority of Qualified Directors or by vote of a
majority of the outstanding voting securities of the Company upon not less than
sixty (60) days prior written notice to the other party.
ARTICLE 11. NOTICES. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Company, at 000 X. XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx
Xxxxxxxx 00000, and if to the Distributor, Xxx Xxxxxxx Xxxxxx Xxxxx, Xxxx,
Xxxxxxxxxxxx 00000.
ARTICLE 12. USE OF COMPANY'S NAME. Neither the Distributor nor any of
its affiliates shall use the name of the Company in any publicly disseminated
materials (i) prepared by the Distributor and reviewed by the Company's
investment adviser or (ii) prepared by the Company's investment adviser in any
manner without the prior consent of the Company (which shall not be unreasonably
withheld or delayed); provided, however, that the Company hereby approves all
lawful uses of its name in any required regulatory filings of the Distributor
which merely refer in accurate terms to the appointment of the Distributor
hereunder, or which are required by the SEC, the NASD or any state securities
authority.
ARTICLE 13. INSURANCE. The Distributor has in full force and effect the
"SEI Corporate Insurance Program," which provides, INTER ALIA, (i) Errors &
Omissions Professional Liability Policy, which provides coverage for all of the
Distributor's business activities with an annual limit of liability of
$75,000,000 per occurrence and in the aggregate $75,000,000 and (ii) Financial
institution bonds Form No. 14 (brokers/dealers) and Form No. 24 (bankers blanket
bond) as promulgated by the Surety Association of America, which provide
insurance coverage for the Distributor's employees in an annual limit of
$50,000,000 per occurrence and $100,000,000 in the aggregate, and covering
without limitation, the following criminal activities: 1) forgery or alteration,
2) on premises, 3) in transit, 4) counterfeit currency, 5) computer systems
fraud, 6) securities, 7) voice initiated transfer fraud, 8) telefacsimile
transfer fraud, 9) computer virus, 10) trading loss, 11) toll fraud, 12) transit
cash, 13) unauthorized signatures, 14) uncollectible items of deposit, 15) stop
payment legal liability, 16) audit expense, and 17) claims expense. The
Distributor will maintain the insurance policies described in this Article 13,
or forms substantially similar thereto, at all times during the term of this
Agreement.
ARTICLE 14. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes
the entire agreement between the parties hereto and supersedes any prior
agreement, draft or agreement or proposal with respect to the subject matter
hereof. This Agreement or any part hereof may be changed or waived only by an
instrument in writing signed by the party against which enforcement of such
change or waiver is sought.
ARTICLE 15. ANTI-MONEY LAUNDERING. The Distributor agrees to maintain
an anti-money laundering program in compliance with Title III of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (the "USA PATRIOT ACT") and all applicable laws
and regulations promulgated thereunder. The Distributor confirms that, as soon
as commercially practicable, following the request from the Company, the
Distributor will supply the Company with copies of the Distributor's anti-money
laundering policy and procedures, and such other relevant certifications and
representations regarding such policy and procedures as the Company may
reasonably request from time to time.
ARTICLE 16. CONFIDENTIAL INFORMATION. The Distributor, its officers,
directors, employees and agents will treat confidentially and as proprietary
information all of the records and other information relating to the Company and
to prior or present shareholders or to those persons or entities who respond to
the Distributor's inquiries concerning investment in the Funds, and will not use
such records and information for any purposes other than in the performance of
its duties and responsibilities hereunder. If the Distributor is requested or
required by, but not limited to, depositions, interrogatories, requests for
information or documents, subpoena, civil investigation, demand or other action,
proceeding or process or as otherwise required by law, statute, regulation,
writ, decree or the like to disclose such information, the Distributor will
provide the Company with prompt written notice of any such request or
requirement so that the Company may seek an appropriate protective order or
other appropriate remedy and/or waive the Distributor's compliance with this
Article 16. If such order or other remedy is not sought, or obtained, or waiver
not received within a reasonable period of time following such notice, then the
Distributor may without any liability hereunder, disclose to the person, entity
or agency requesting or requiring the information, that portion of the
information that is legally required in the reasonable opinion of the
Distributor's counsel. Furthermore, the Company, its officers, directors and
employees will treat confidentially and as proprietary information all
information relating to the Distributor and will not use such information for
any purpose other than in the performance of its duties and responsibilities
hereunder.
ARTICLE 17 GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Delaware and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Delaware, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 18. MULTIPLE ORIGINALS. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 19. SEVERABILITY. If any part, term or provision of this
Agreement is held to be illegal, in conflict with any law or otherwise invalid,
the remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
IN WITNESS WHEREOF, the Company and Distributor have each duly executed
this Agreement, as of the day and year above written.
AHA INVESTMENT FUNDS, INC.
By:
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Attest:
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SEI INVESTMENTS DISTRIBUTION CO.
By:
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Attest:
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