AMENDED AND RESTATED SUB-ADVISORY AGREEMENT
AMENDED
AND RESTATED
This
Amended and Restated Sub-Advisory Agreement made as of the 14th day of May 2001,
amends and restates the Sub-Advisory Agreement initially made as of the 30th day
of June 1999, by and between New Covenant Trust Company, N.A., a limited purpose
national trust bank (the “Trust Company”) and Tattersall Advisory Group (the
“Sub-Adviser”), solely for the purpose of reflecting the assumption of certain
of the duties to perform the investment advisory services as described herein by
the Trust Company’s separately identifiable investment advisory department, the
NCF Investment Department (the “Adviser”).
WHEREAS,
pursuant to an agreement between them dated as of June 30th, 1999 (the “Advisory
Agreement”) as amended and restated on May 14, 2001, the Adviser serves as
investment adviser to New Covenant Funds, a Delaware business trust and an
open-end management investment company (the “Trust”), which has filed a
registration statement (the “Registration Statement”) under the Investment
Company Act of 1940, as amended (the “1940 Act”) and the Securities Act of 1933;
and
WHEREAS,
for purposes of complying with those provisions of the Xxxxx-Xxxxx-Xxxxxx Act
relating to banks that provide investment advisory services to registered
investment companies the Trust Company established the Adviser as a “separately
identifiable department or division” as such term is defined in Section
202(a)(26) of the Investment Advisers Act of 1940; and
WHEREAS,
the Adviser was declared effective as a registered investment adviser by the
Securities and Exchange Commission by order dated April 13, 2001, and the
Adviser is therefore duly qualified and able to provide investment advisory
services to the Trust; and
WHEREAS,
the Board of Trustees of the Trust at a meeting duly called and held on May 14,
2001, approved the Assumption Agreement (a copy of which is attached hereto and
made a part hereof) between the Trust, the Trust Company and the Adviser,
providing for the assumption by the Adviser of all of the Trust Company’s duties
and responsibilities for providing investment advisory services to the Trust;
and
WHEREAS,
the Trust is comprised of four separate investment portfolios, one of which is
New Covenant Income Fund (the “Fund”); and
WHEREAS,
the Adviser desires to avail itself of the services, information, advice,
assistance and facilities of an investment adviser experienced in the management
of a portfolio of securities to assist the Adviser in performing services for a
portion of the Fund; and
WHEREAS,
the Sub-Adviser represents that it has the legal power and authority to perform
the services contemplated hereunder without violation of applicable law
(including the Investment Advisers Act of 1940), and desires to provide such
services to the Trust and the Adviser.
NOW,
THEREFORE, in consideration of the terms and conditions hereinafter set forth,
it is agreed as follows:
Section
1. Appointment of the
Sub-Adviser. The Adviser hereby appoints the Sub-Adviser to provide a
continuous investment program for that portion of the Fund designated by the
Adviser as assigned to the Sub-Adviser (the “Segment” of the Fund), subject to
such written instructions and supervision as the Adviser may from time to time
furnish. The Sub-Adviser hereby accepts such appointment and agrees to render
the services and to assume the obligations herein set forth for the compensation
herein provided. The Sub-Adviser will provide the services under this Agreement
with respect to the Segment in accordance with the Fund’s investment objective,
policies and applicable restrictions as stated in the Fund’s most recent
Prospectus and Statement of Additional Information and as the same may, from
time to time, be supplemented or amended and in resolutions of the Trust’s Board
of Trustees. The Adviser agrees to furnish to the Sub-Adviser from time to time
copies of all Prospectuses and Statements of Additional Information and of all
amendments of, or supplements to, such Prospectuses and Statements of Additional
Information and of all resolutions of the Trust’s Board of Trustees applicable
to the Sub-Adviser’s services hereunder. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no authority to act
for or represent the Adviser, the Fund or the Trust in any way.
Section
2. Sub-Advisory
Services. Subject to such written instructions and supervision as the
Adviser may from time to time furnish, the Sub-Adviser will provide an
investment program for the Segment, including investment research and management
with respect to securities and investments, including cash and cash equivalents
in the Segment, and will determine from time to time what securities and other
investments will be purchased, retained or sold by and within the Segment. The
Sub-Adviser will implement such determinations through the placement, on behalf
of the Fund, of orders for the execution of portfolio transactions through such
brokers or dealers as it may select. The Adviser will instruct the Trust’s
Custodian to forward promptly to the Sub-Adviser proxy and other materials
relating to the exercise of such shareholder rights and, unless otherwise
instructed by the Adviser, the Sub-Adviser will determine from time to time the
manner in which voting rights, rights to consent to corporate action and other
rights pertaining to the Fund’s investments should be exercised.
In
fulfilling its responsibilities hereunder, the Sub-Adviser agrees that it
will:
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(a)
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use
the same skill and care in providing such services as it uses in providing
services to other fiduciary accounts for which it has investment
responsibilities;
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(b)
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conform
with all applicable rules and regulations of the United States Securities
and Exchange Commission (“SEC”) and in addition will conduct its
activities under this Agreement in accordance with any applicable
regulations of any government authority pertaining to the investment
advisory activities of the Sub-Adviser and shall furnish such written
reports or other documents substantiating such compliance as the Adviser
reasonably may request from time to
time;
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(c)
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not
make loans to any person to purchase or carry shares of beneficial
interest in the Trust or make loans to the
Trust;
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(d)
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place
orders pursuant to investment determinations for the Fund either directly
with the issuer or with an underwriter, market maker or broker or dealer.
In placing orders, the Sub-Adviser will use its reasonable best efforts to
obtain best execution of such orders. Consistent with this obligation, the
Sub-Adviser may, to the extent permitted by law, effect portfolio
securities transactions through brokers and dealers who provide brokerage
and research services (within the meaning of Section 28(c) of
the Securities Exchange Act of 1934) to or for the benefit of the Fund
and/or other accounts over which the Sub-Adviser exercises investment
discretion. Subject to the review of the Trust’s Board of Trustees from
time to time with respect to the extent and continuation of the policy,
the Sub-Adviser is authorized to cause the Fund to pay a broker or dealer
who provides such brokerage and research services a commission for
effecting a securities transaction for the Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if the Sub-Adviser determines in good faith
that such commission was 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 the overall
responsibilities of the Sub-Adviser with respect to the accounts as to
which it exercises investment discretion. The Trust or the Adviser may,
from time to time in writing, direct the Sub-Adviser to place orders
through one or more brokers or dealers and, thereafter, the Sub-Adviser
will have no responsibility for ensuring best execution with respect to
such orders. In no instance will portfolio securities be purchased from or
sold to the Sub-Adviser or any affiliated person of the Sub-Adviser as
principal except as may be permitted by the 1940 Act or an exemption
therefrom. If the Sub-Adviser determines in good faith that the
transaction is in the best interest of each client, securities may be
purchased on behalf of the Fund from, or sold on behalf of the Fund to,
another client of the Sub-Adviser in compliance with Rule 17a-7 under the
1940 Act;
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(e)
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maintain
all necessary or appropriate records with respect to the Fund’s securities
transactions for the Segment in accordance with all applicable laws, rules
and regulations, including but not limited to Section 31(a) of the 1940
Act, and will furnish the Trust’s Board of Trustees and the Adviser such
periodic and special reports as the Board and Adviser reasonably may
request;
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(f)
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treat
confidentially and as proprietary information of the Adviser and the Trust
all records and other information relative to the Adviser and the Trust
and prior, present, or potential shareholders, and will not use such
records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except that subject to prompt
notification to the Trust and the Adviser, the Sub-Adviser may divulge
such information to its independent auditors and regulatory authorities,
or when so requested by the Adviser and the Trust; provided, however, that
nothing contained herein shall prohibit the Sub-Adviser from
(1) advertising or soliciting the public generally with respect to
other products or services, regardless of whether such advertisement or
solicitation may include prior, present or potential shareholders of the
Fund or (2) including the Adviser and Trust on its general list of
disclosable clients.
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(g)
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maintain
its policy and practice of conducting its fiduciary functions
independently. In making investment decisions for the Fund, the
Sub-Adviser’s personnel will not inquire or take into consideration
whether the issuers of securities proposed for purchase or sale for the
Fund’s account are customers of the Adviser, other sub-advisers, the
Sub-Adviser or of their respective parents, subsidiaries or affiliates. In
dealing with such customers, the Sub-Adviser and its subsidiaries and
affiliates will not inquire or take into consideration whether securities
of those customers are held by the Trust;
and
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(h)
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render,
upon request of the Adviser or the Trust’s Board of Trustees, written
reports concerning the investment activities of the Sub-Adviser with
respect to the Sub-Adviser’s Segment of the
Fund.
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Section
3. Expense.
During the term of this Agreement, the Sub-Adviser will pay all expenses
incurred by it in performing its services under this Agreement. The Sub-Adviser
shall not be liable for any expenses of the Adviser or the Trust, including
without limitation (a) their interest and taxes, (b) brokerage
commissions and other costs in connection with the purchase or sale of
securities or other investment instruments with respect to the Fund and
(c) custodian fees and expenses.
Section
4. Records. In
compliance with the requirements of Rule 3la-3 under the 1940 Act, the
Sub-Adviser hereby agrees that all records, if any, which it maintains for the
Fund are the property of the Fund and further agrees to surrender promptly to
the Adviser or the Trust any such records upon the Adviser’s or the Trust’s
request and that such records shall be available for inspection by the SEC. The
Sub-Adviser further agrees to preserve for the periods and at the places
prescribed by Rule 3la-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
Section
5. Compensation of the
Sub-Adviser.
(a) In
consideration of services rendered pursuant to this Agreement, the Adviser will
pay the Sub-Adviser a fee, in arrears, equal to an annual rate in accordance
with Schedule A
hereto, paid quarterly.
(b) Such
fee for each calendar quarter shall be calculated based on the average of the
market value of the assets under management as of the end of each of the three
months in the quarter just ended, as provided by the Adviser.
(c) If
the Sub-Adviser should serve for less than the whole of any calendar quarter,
its compensation shall be determined as provided above on the basis of the
ending market value of the assets managed in the month in which the termination
occurs and shall be payable on a pro rata basis for the period of the calendar
quarter for which it has served as Sub-Adviser hereunder.
Section
6. Services Not
Exclusive. The services of the Sub-Adviser hereunder are not to be deemed
exclusive, and the Sub-Adviser shall be free to render similar services to
others and to engage in other activities, so long as the services rendered
hereunder are not impaired. It is understood that the action taken by the
Sub-Adviser under this Agreement may differ from the advice given or the timing
or nature of action taken with respect to other clients of the Sub-Adviser, and
that a transaction in a specific security may not be accomplished for all
clients of the Sub-Adviser at the same time or at the same price.
4
Section
7. Use of
Names. The Adviser shall not use the name, logo, trade or service xxxx or
derivative of the foregoing of the Sub-Adviser or any of the Sub-Adviser’s
affiliates in any prospectus, sales literature or other materials whether or not
relating to the Trust in any manner not approved prior thereto by the
Sub-Adviser; provided, however, that the Sub-Adviser shall approve all uses of
its or its affiliate’s name which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state securities
commission; and, provided further, that in no event shall such approval be
unreasonably withheld. The Sub-Adviser shall not use the name of the Trust, the
Fund or the Adviser in any materials relating to the Sub-Adviser in any manner
not approved prior thereto by the Adviser; provided, however, that the Adviser
shall approve all uses of its and the Fund’s or the Trust’s name which merely
refer in accurate terms to the appointment of the Sub-Adviser hereunder,
including placing the Trust’s or the Adviser’s name on the Sub-Adviser’s list of
representative clients, or which are required by the SEC or a state securities
commission, and, provided further, that in no event shall such approval be
unreasonably withheld.
Section
8. Liability of the
Sub-Adviser. Absent willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties hereunder on the part of the
Sub-Adviser, or loss resulting from breach of fiduciary duty, the Sub-Adviser
shall not be liable 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. Notwithstanding the
foregoing, neither the Adviser nor the Trust shall be deemed to have waived any
rights it may have against the Sub-Adviser under federal or state securities
laws.
The
Sub-Adviser shall indemnify and hold harmless the Trust and the Adviser (and its
affiliated companies and their respective officers, directors and employees)
from any and all claims, losses, liabilities or damages (including reasonable
attorney’s fees and other related expenses) arising out of or in connection with
the willful misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties including breach of fiduciary duty, hereunder of the
Sub-Adviser.
The
Adviser shall hold harmless and indemnify the Sub-Adviser for any loss,
liability, cost, damage or expense (including reasonable attorney’s fees and
costs) arising from any claim or demand by any person that is based upon
(i) the obligations of any other sub-adviser to the Fund, (ii) any
obligation of the Adviser under the Advisory Agreement that has not been
delegated to the Sub-Adviser under this Agreement or (iii) any matter for
which the Sub-Adviser does not have liability in accordance with the first
sentence of this Section 8.
Section
9. Limitation of
Trust’s Liability. The Sub-Adviser acknowledges that it has received
notice of and accepts the limitations upon the Trust’s and the Fund’s liability
set forth in its Trust Instrument and under Delaware law. The Sub-Adviser agrees
that any of the Trust’s obligations shall be limited to the assets of the Fund
and that the Sub-Adviser shall not seek satisfaction of any such obligation from
the shareholders of the Trust nor from any Trustee, officer, employee or agent
of the Trust.
The names
“New Covenant Funds” and “Trustees of New Covenant Funds” refer respectively to
the Trust created and the Trustees, as trustees but not individually or
personally, acting from time to time under the Trust Instrument dated as of
September 30, 1998, to which reference is hereby made and a copy of which is on
file at the office of the Secretary of State of the State of Delaware and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of “New Covenant Funds” entered into in the
name or on behalf thereof, or in the name or on behalf of any series or class of
shares of the Trust, 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 or class of
shares of the Trust must look solely to the assets of the Trust belonging to
such series or class for the enforcement of any claims against the
Trust.
5
Section
10. Duration Renewal
Termination and Amendment. This Agreement will become effective as of the
date first written above, provided that it shall have been approved by vote of a
majority of the outstanding voting securities of the Fund, in accordance with
the requirements under the 1940 Act, and, unless sooner terminated as provided
herein, shall continue in effect for an initial period of one (1)
year.
Thereafter,
if not terminated, this Agreement shall continue in effect with respect to the
Fund for successive one year periods provided such continuance is specifically
approved at least annually (a) by the vote of a majority of the
disinterested Trustees cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the vote of a majority of the Trust’s
Board of Trustees or by the vote of a majority of all votes attributable to the
outstanding Shares of the Fund. This Agreement may be terminated as to the Fund
at any time, without payment of any penalty, by the Trust’s Board of Trustees,
by the Adviser, or by a vote of a majority of the outstanding voting securities
of the Fund, upon 60 days’ prior written notice to the Sub-Adviser, or by the
Sub-Adviser upon 60 days’ prior written notice to the Adviser and the Trust’s
Board of Trustees, or upon such shorter notice as may be mutually agreed
upon.
This
Agreement shall terminate automatically and immediately upon termination of the
Advisory Agreement. This Agreement shall terminate automatically and immediately
in the event of its assignment. No assignment of this Agreement shall be made by
the Sub-Adviser without the consent of the Adviser and the Board of Trustees of
the Trust.
This
Agreement may be amended at any time by the Adviser and the Sub-Adviser, subject
to approval by the Trust’s Board of Trustees and, if required by the 1940 Act
and applicable SEC rules and regulations, a vote of a majority of the Fund’s
outstanding voting securities. Notwithstanding the foregoing, the Trust shall be
under no obligation to obtain shareholder approval to materially amend this
Agreement unless required to obtain such approval pursuant to any orders or
rules and regulations which may have been issued by the Securities and Exchange
Commission.
Section
11. Year 2000
Warranty. The Sub-Adviser represents and warrants that it is actively
pursuing a comprehensive and coordinated compliance strategy (including
remediation and testing) to ensure the readiness of its business systems and
applications for the Year 2000 and believes that all such systems critical to
the performance of Sub-Adviser’s responsibilities hereunder will be Year 2000
compliant prior to January 1, 2000. The Sub-Adviser will make appropriate
inquiries as to the readiness of its vendors, service providers, clients and
other third parties for the Year 2000; provided, however, that neither the
Sub-Adviser nor any of its officers, directors or employees (or affiliated
companies) make any representations or warranties regarding the Year 2000
readiness of such vendors, service providers, clients and other third
parties.
6
Section
12. Confidential
Relationship. Any information and advice furnished by either party to
this Agreement to the other shall be treated as confidential and shall not be
disclosed to third parties except as required by law or as required or permitted
by this Agreement.
Section
13. 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.
Section
14. Miscellaneous. This
Agreement constitutes the full and complete agreement of the parties hereto with
respect to the subject matter hereof and each party agrees to perform such
further actions and execute such further documents as are necessary to
effectuate the purposes hereof. To the extent not preempted by federal law, this
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of Indiana. The captions in this Agreement are
included for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in several counterparts, all of which together shall
for all purposes constitute one Agreement, binding on all parties.
Section
15. Notices.
All notices and other communications hereunder shall be in writing (including
telex or similar writing) and shall be deemed given if delivered in person or by
messenger, cable, telegram or telex or facsimile transmission or by a reputable
overnight delivery service which provides evidence of receipt to the parties at
the following addresses or telex or facsimile transmission numbers (or at such
other address or number for a party as shall be specified by like
notice):
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(a)
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if
to the Sub-Adviser, to:
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Tattersall
Advisory Group
Attn:
Xxxxx Xxxxx
0000
Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000-0000
Facsimile
(000) 000-0000
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(b)
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if
to the Adviser, to:
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The NCF
Investment Department of
New
Covenant Trust Company, N.A.
000 Xxxx
Xxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxxxxxxx,
XX 00000
Facsimile
transmission number: (000) 000-0000
Attention:
Xxxxxx X. Xxxxxx
Each such
notice or other communication shall be effective (i) if given by telex or
facsimile transmission, when such telex or facsimile is transmitted to the
number specified in this section and the appropriate answer back or confirmation
is received, and (ii) if given by any other means, when delivered at the address
specified in this section.
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IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
| THE NCF INVESTMENT DEPARTMENT OF | ||
| NEW COVENANT TRUST COMPANY, N.A. | ||
| By: /s/ Xxxxxx X. Xxxxxx | ||
| Name: Xxxxxx X. Xxxxxx | ||
| Title: Executive Vice President | ||
| TATTERSALL ADVISORY GROUP | ||
| By: /s/ Xxxxx X. Xxxxx | ||
| Name: Xxxxx X. Xxxxx | ||
| Title: Chief Operating Office |
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SCHEDULE
A
To the
Amended and Restated Sub-Advisory Agreement
between
The NCF
Investment Department of
New
Covenant Trust Company, N.A.
and
Tattersall
Advisory Group
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Name of
Fund
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Compensation
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Date
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New
Covenant Income Fund
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0.15%
of first $135 Million in Assets;
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May
14, 2001
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0.10%
of next $140 Million in Assets;
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0.08%
of Assets over $275 Million.
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| THE NCF INVESTMENT DEPARTMENT OF | ||
| NEW COVENANT TRUST COMPANY, N.A. | ||
| By: /s/ Xxxxxx X. Xxxxxx | ||
| Name: Xxxxxx X. Xxxxxx | ||
| Title: Executive Vice President | ||
| TATTERSALL ADVISORY GROUP | ||
| By: /s/ Xxxxx X. Xxxxx | ||
| Name: Xxxxx X. Xxxxx | ||
| Title: Chief Operating Officer |
9
