SUB-DISTRIBUTION AGREEMENT BY AND BETWEEN QUASAR DISTRIBUTORS, LLC AND New Covenant Funds Distributor, Inc.
BY
AND BETWEEN
QUASAR
DISTRIBUTORS, LLC
AND
New Covenant Funds
Distributor, Inc.
THIS AGREEMENT (“Agreement”) is made as
of this 12th day of April 2008, by and
between New Covenant
Funds Distributor, Inc. (the “Distributor”), on behalf of each of its series
listed on Schedule A, attached hereto, which may be amended from time to
time, and Quasar Distributors, LLC, a Delaware limited liability company (the
“Sub-Distributor”).
WHEREAS, the Distributor is the
principal underwriter and distributor for each open-end management investment
company and each respective series listed on Schedule B (each a “Fund”,
collectively the “Funds”) of this Agreement; and
WHEREAS, the Distributor desires that
its shares be permitted to be traded through Fund/SERV and participate in the
Networking System (“Networking”) and any other relevant programs or services
offered by the National Securities Clearing Corporation (“NSCC”) now and in the
future; and
WHEREAS, the Sub-Distributor is
currently a member of the NSCC and at the request of the Distributor, desires to
assist the Distributor with expediting its trading in Fund/SERV and its
participation in Networking.
NOW, THEREFORE, in consideration of the
mutual promises and agreements herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. Procedures
(a) The
Sub-Distributor agrees to permit the Distributor’s trading through Fund/SERV and
participation in Networking through the Sub-Distributor’s NSCC membership, and
such other programs and services as may be offered by NSCC as the parties may
mutually agree, subject to the terms and conditions herein. Except as noted
above, the Sub-Distributor is not responsible or liable for any distribution
activities on behalf of the Distributor.
(b) The
Sub-Distributor shall enter into a Fund Member Additional Member Agreement with
NSCC pursuant to which an additional number will be issued in conjunction with
the Sub-Distributor’s NSCC activities on behalf of each portfolio listed on
Schedule A hereto. The Sub-Distributor shall in no way be deemed to
act as a distributor or underwriter for the Funds through its sponsorship of the
Distributor. U.S. Bancorp Fund Services,
LLC, (“USBFS”) in its role as transfer agent for the Funds or NSCC
operational agent for Sub-Distributor, shall act as agent for the sole purposes
of mutual fund settlement and Networking pursuant to the terms of the Transfer
Agent Servicing Agreement by and between the Trust and USBFS. USBFS
shall only settle trades in U.S. Dollars. The Distributor or its
designee shall be responsible for any settlements with the NSCC transacted with
non-U.S. dollars.
(c) Upon
the request of the Distributor and in reliance on the terms hereof, and in order
to expedite the trading of the Distributor through NSCC and participation in
Networking and any other relevant programs and services offered by NSCC as
agreed to by the parties, the Sub-Distributor has agreed to guarantee the
payment to NSCC of any and all fees and charges imposed by NSCC from time to
time relating to the Distributor’s transactions with NSCC, and has assumed
responsibility with respect to NSCC for all transactions in and all obligations
and liabilities relating to the Distributor’s clearing number and participation
in Networking.
(d) This
Agreement shall be effective as of the date hereof and shall continue in effect
until terminated by either party upon 90 days written notice, with the exception
that Section 3(b) and Section 3(c) will survive indefinitely the termination of
the Sub-Distributor’s participation in NSCC on behalf of the
Distributor. It is understood that the Sub-Distributor may, in its
sole discretion, and at any time, terminate any or all of its participation in
NSCC on behalf of the Distributor. In the event the Sub-Distributor
elects to cease these services, it will provide prompt notice to the
Distributor. Sub-Distributor will provide prompt notice to Distributor upon
receipt of the Distributor’s NSCC membership number. Notice(s) shall
be sent to the respective address of each party listed below. It is
specifically agreed that the termination of this Agreement shall not affect the
obligations of USBFS under the Transfer Agent Servicing Agreement.
2. Duties
and Representations of the Distributor.
(a) The
Distributor represents that it is duly organized and in good standing under the
law of its jurisdiction of incorporation and registered as a
broker-dealer. The Distributor agrees that it will act in material
conformity with its Articles of Incorporation, By-Laws, and, or its Registration
Statement as may be amended from time to time and resolutions and other
instructions of its Board. The Distributor agrees to comply in all
material respects with the 1933 Act, the 1940 Act, and all other applicable
federal and state laws and regulations. The Distributor represents
and warrants that this Agreement has been duly authorized by all necessary
action by the Distributor under the 1940 Act, state law and the Distributor’s
Articles of Incorporation and By-Laws.
(b) The
Distributor shall take or cause to be taken all necessary action to register
shares of the Funds under the 1933 Act and to maintain an effective Registration
Statement for such shares in order to permit the sale of Shares as herein
contemplated.
(c) The
Distributor represents and agrees that all shares to be sold by it are validly
authorized and, when issued in accordance with the description in the
Prospectus, will be fully paid and nonassessable. The Distributor
further agrees that it shall have the right to suspend the sale of shares of the
Funds at any time in response to conditions in the securities markets or
otherwise, and to suspend the redemption of shares of the Funds at any time
permitted by the 1940 Act or the rules of the Securities and Exchange Commission
(“SEC”). The Distributor shall advise the Sub-Distributor promptly of
any such determination.
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(d) The
Distributor shall file such reports and other documents as may be required under
applicable federal and state laws and regulations.
(e) The
Distributor agrees to file from time to time such amendments to its Registration
Statement and Prospectus as may be necessary in order that its Registration
Statement and Prospectus will not knowingly contain any untrue statement of
material fact or knowingly omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(f) The
Distributor represents and warrants that its Registration Statement and any
advertisements and sales literature of the Distributor (excluding statements
relating to the Sub-Distributor and the services it provides that are based upon
written information furnished by the Sub-Distributor expressly for inclusion
therein) shall not contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(g) The
Distributor represents and warrants that it will submit a wire transfer to USBFS
relating to the transactions of the Distributor with the NSCC. The
wire transfer shall match the exact amount wired by Sub-Distributor to the NSCC
relating to transactions of the Distributor. In the event USBFS does
not receive a wire transfer of the exact amount of the settlement from the
Distributor at or prior to NSCC settlement, USBFS shall be entitled to receive
interest upon any unpaid sum at prime rate.
3. Payment of Charges,
Expenses, Obligations; Liability
(a) As
compensation for the services performed and the expenses assumed by
Sub-Distributor under this Agreement, Sub-Distributor shall be entitled to the
fees and expenses set forth in Schedule A to this Agreement which are payable
promptly after the last day of each month. Such fees shall be paid to
Sub-Distributor by the Distributor.
(b) The
Distributor shall indemnify, defend and hold harmless the Sub-Distributor and
its affiliates from and against any and all actions, suits, claims, demands,
losses, expenses, charges and liabilities whether with or without basis in fact
or law (including the costs of investigating or defending any alleged actions,
suits, claims, demands, losses, expenses, charges and liabilities) of any and
every nature which the Sub-Distributor or its affiliates may sustain or incur or
which may be asserted against the Sub-Distributor or its affiliates by any
person arising directly or indirectly out of, resulting from, or in conjunction
with the Sub-Distributor’s participation in Fund/SERV, Networking and any other
relevant programs or services offered by the NSCC, now and in the future, on
behalf of the Distributor; provided, however, that the Sub-Distributor shall not
be indemnified against any actions, suits, claims, demands, losses, expenses,
charges and liabilities to the extent arising out of the Sub-Distributor’s
willful misfeasance, negligence or reckless disregard of its duties and
obligations in participating in the foregoing on behalf of the
Distributor.
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(c) the
Sub-Distributor agrees to indemnify and hold harmless the Distributor and its
affiliates from and against any and all actions, suits, claims, demands, losses,
expenses, charges and liabilities resulting from any acts or failures to act
undertaken or omitted to be taken by the Sub-Distributor through its bad faith,
willful misconduct, negligence or reckless disregard by it of its obligations
with respect to the performance of services under this Agreement.
(d) The
Distributor shall take all such actions as may reasonably be requested by the
Sub-Distributor to implement the understandings described herein with respect to
the Sub-Distributor’s activities with NSCC on behalf of the
Distributor.
4. Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of
Wisconsin, without regard to conflicts of law principles. To the
extent that the applicable laws of the State of Wisconsin, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control, and nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or order of the SEC
thereunder
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5.
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Arbitration.
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Any
controversy or claim arising out of or relating to this Agreement, or any breach
thereof, shall be settled by arbitration in accordance with the then existing
FINRA Code of Arbitration Procedure. Any arbitration shall be
conducted in Milwaukee, Wisconsin, and each arbitrator shall be from the
securities industry. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction
thereof.
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6.
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Confidentiality.
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The
Sub-Distributor agrees on behalf of its employees to treat all records relative
to the Distributor and prior, present or potential shareholders of the
Distributor as confidential, and not to use such records for any purpose other
than performance of the Sub-Distributor’s responsibilities and duties under this
Agreement, except after notification and prior approval by the Distributor,
which approval shall not be unreasonably withheld, and may not be withheld where
the Sub-Distributor may be exposed to civil or criminal proceedings for failure
to comply, when requested to divulge such information by duly constituted
authorities, when subject to governmental or regulatory audit or investigation,
or when so requested by the Distributor. Records and information
which have become known to the public through no wrongful act of the
Sub-Distributor or any of its employees, agents or representatives shall not be
subject to this paragraph.
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7. Anti-Money Laundering
Program.
Distributor
represents and warrants that it has adopted an anti-money laundering program
(“AML Program”) that complies with the Bank Secrecy Act, as amended by the USA
PATRIOT Act, and any future amendments (the “PATRIOT Act,” and together with the
Bank Secrecy Act, the “Act”), the rules and regulations under the Act, and the
rules, regulations and regulatory guidance of the SEC, the FINRA or any other
applicable self-regulatory organization (collectively, “AML Rules and
Regulations”). Distributor further represents that its AML Program, at a
minimum, (1) designates a compliance officer to administer and oversee the AML
Program, (2) provides ongoing employee training, (3) includes an independent
audit function to test the effectiveness of the AML Program, (4) establishes
internal policies, procedures, and controls that are tailored to its particular
business, (5) will include a customer identification program consistent with the
rules under section 326 of the Act, (6) provides for the filing of all necessary
anti-money laundering reports including, but not limited to, currency
transaction reports and suspicious activity reports, (7) provides for screening
all new and existing customers against the Office of Foreign Asset Control
(“OFAC”) list and any other government list that is or becomes required under
the Act, and (8) allows for appropriate regulators to examine Distributor’s AML
books and records.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their officers designated as of the day and year first above
written
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Quasar
Distributors, LLC
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(the
“Sub-Distributor”)
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By:
/s/ Xxxxx
Xxxxxxxxx
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Xxxxx
Xxxxxxxxx, President
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000
Xxxx Xxxxxxxx Xxxxxx
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Xxxxxxxxx,
XX 00000
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New Covenant Funds Distributor,
Inc.
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(“Distributor”)
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By:
/s/Xxxxxx X. Xxxxxxxxx
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| Vice President | |
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Schedule
A
to
NSCC
Agreement
by
and between
Quasar
Distributors, LLC and
New Covenant Funds
Distributor, Inc.
NSCC
Sub-Distribution Annual Services
$[_____]
per month
Fees are billed
monthly
Plus
out-of-pocket expenses for all future proposals
Out-of-pocket
expenses include bank charges, wire charges, NSCC charges
Schedule
B
PORTFOLIOS
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Name of Series
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Date Added
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New
Covenant Growth Fund
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on
or about April 12, 2008
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New
Covenant Balanced Growth Fund
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on
or about April 12, 2008
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New
Covenant Income Fund
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on
or about April 12, 2008
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New
Covenant Balanced Income Fund
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on
or about April 12, 2008
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