SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 27th day of
February, 2009 between Menno Insurance Service, Inc. d/b/a MMA
Capital Management (the “Adviser”), and Evergreen Investment Management Company,
LLC (the “Sub-Adviser”)
WHEREAS, MMA Praxis Mutual
Funds (the “Trust”) is registered as an open-end, management investment company
under the Investment Company Act of 1940, as amended (the “1940 Act”);
and
WHEREAS, MMA Praxis
International Fund (the “Fund”) is a separate investment series of the Trust;
and
WHEREAS, the Adviser has been
appointed investment adviser to the Fund; and
WHEREAS, the Adviser desires
to retain the Sub-Adviser to assist it in the provision of a continuous
investment program for the Fund and the Sub-Adviser is willing to do so;
and
WHEREAS, the Adviser and the
Sub-Adviser are each duly registered with the Securities and Exchange Commission
(the “Commission”) as investment advisers and their respective registrations are
current and in good order; and
WHEREAS, the sub-investment
advisory agreement made the 20th day of
October, 2008 between the Adviser and the Sub-Adviser was terminated immediately
prior to the effective time of this Agreement; and
WHEREAS, the Board of Trustees
of the Trust (the “Board”) and the Fund’s shareholders have approved this
Agreement, and the Sub-Adviser is willing to furnish such services upon terms
and conditions herein set forth;
NOW, THEREFORE, in
consideration of the premises and mutual covenants herein contained, it is
agreed between the parties hereto as follows;
1. Appointment. The
Adviser hereby appoints the Sub-Adviser to act as sub-adviser to the Fund.
Intending to be legally bound, the Sub-Adviser accepts such appointment and
agrees to render the services herein set forth for the compensation herein
provided.
2. Sub-Advisory
Services. Subject to the supervision of the Board and the
Adviser, the Sub-Adviser shall assist the Adviser in providing a continuous
investment program with respect to the Fund’s portfolio, including investment
research and management with respect to all securities and investments and cash
equivalents in the Fund, except as otherwise provided in Section 6 herein. The
Sub-Adviser may determine the securities and investments to be purchased, sold
or retained by the Fund in accordance with the Adviser’s stewardship investing
guidelines. In cooperation with the Sub-Adviser, the Adviser will
provide guidance regarding individual securities and/or sectors that shall not
be purchased for the Fund and reserves the right to remove securities from the
Fund that do not meet the Adviser’s social screens. The Sub-Adviser may place
orders directly with the issuer or any broker or dealer for such securities and
investments. The Sub-Adviser will provide services under this Agreement in
accordance with the Fund’s investment objective, policies and restrictions as
stated in the Fund’s currently effective prospectus and statement of additional
information, the Trust’s Declaration of Trust and By-laws, each as amended from
time to time, and resolutions of the Board applicable to the Fund, each as
provided to the Sub-Adviser by the Adviser. The Sub-Adviser shall
have authority to enter into and execute agreements on behalf of the Fund
relating to the acquisition or disposition of investment assets and the
execution of portfolio transactions pursuant to the Sub-Adviser’s management of
the Fund under this Agreement. Such agreements may include foreign exchange
contracts and other transactional agreements. Nothing contained herein, however,
shall be deemed to authorize the Sub-Adviser to take or receive physical
possession of any cash or securities held in the Fund, it being intended that
sole responsibility for safekeeping thereof (in such investments as the
Sub-Adviser shall direct) and the consummation of all such purchases, sales,
deliveries, and investments made pursuant to the Sub-Adviser’s direction shall
rest upon the custodian for the Fund. The parties hereto also agree that the
Sub-Adviser shall not receive or vote proxies or other similar solicitations on
behalf of the Fund and that such proxies and other similar solicitations shall
be voted by the Adviser in accordance with its procedures. The Sub-Adviser
warrants that all actions taken in the exercise of the power herein granted to
the Sub-Adviser will be taken solely and exclusively for the benefit of the
Fund.
Without
limiting the generality of the foregoing, the Sub-Adviser further agrees that
it:
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(a)
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will
use the same skill and care in providing such services as it uses in
providing services to fiduciary accounts for which it has investment
responsibilities;
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(b)
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will
conform with all applicable Rules and Regulations of the Commission under
the 1940 Act and in addition will conduct its activities under this
Agreement in accordance with any applicable regulations of any
governmental authority pertaining to the investment advisory activities of
the Sub-Adviser;
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(c)
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will
place or cause to be placed orders for the Fund either directly with the
issuer or with any broker or dealer. In placing orders with brokers and
dealers, the Sub-Adviser will attempt to obtain prompt execution of orders
in an effective manner at the most favorable price. Consistent with this
obligation and to the extent permitted by the 1940 Act, when the execution
and price offered by two or more brokers or dealers are comparable, the
Sub-Adviser may, in its discretion, purchase and sell portfolio securities
to and from brokers and dealers who provide the Sub-Adviser with research
advice and other services. In no instance will portfolio securities be
purchased from or sold to the Trust’s principal underwriter, the Adviser,
the Sub-Adviser or any affiliated person of the Trust, the Trust’s
principal underwriter, the Sub-Adviser or the Adviser, except to the
extent permitted by the 1940 Act and the Commission. The Adviser shall
provide to the Sub-Adviser a list of each affiliate of the Adviser and the
Trust immediately upon entering into this Agreement and shall notify the
Sub-Adviser immediately in writing in the event of any changes to such
list. Any action taken for the purpose of this Agreement by the Adviser
and/or the Fund, at the discretion of either or both, with regard to the
placement of securities transactions shall be the Adviser’s and the Fund’s
sole liability and responsibility, including the performance of any
broker.
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The
Sub-Adviser may use one or more of its affiliated persons, or other
parties related to the Sub-Adviser, as brokers for effecting securities
transactions for the Fund, and pay, on behalf of the Fund, fair and
reasonable brokerage commissions therefor, but only in accordance with
procedures adopted by the Fund pursuant to Rule
17e-l;
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(d)
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will
maintain or cause to be maintained all books and records with respect to
the securities transactions of the Fund and will furnish the Board with
such periodic and special reports as the Board may request and allow for
inspection of said books and records upon reasonable
request;
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(e)
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will
treat confidentially and as proprietary information of the Trust all
records and other information relative to the Trust and the Fund and
prior, present, or potential shareholders, and will not use such records
and information for any purpose other than performance of its
responsibilities and duties hereunder, or as required by applicable law,
except after prior notification to and approval in writing by the Trust,
which approval shall not be unreasonably withheld and may not be withheld
where the Sub-Adviser may be exposed to civil and criminal contempt
proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the
Trust;
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(f)
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will
keep the Adviser informed of developments materially affecting the Fund
and will, on the Sub-Adviser’s own initiative and as reasonably requested
by the Adviser, furnish to the Adviser from time to time whatever
information the Adviser reasonably believes appropriate for this
purpose;
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(g)
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will
maintain and enforce adequate security procedures with respect to all
materials, records, documents and data relating to any of its
responsibilities pursuant to this Agreement including all means for the
effecting of securities
transactions;
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(h)
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will
immediately notify the Adviser and the Trust in the event that the
Sub-Adviser: (i) becomes subject to a statutory disqualification that
prevents the Sub-Adviser from serving as an investment adviser pursuant to
this Agreement; or (ii) is or expects to become the subject of an
administrative proceeding or enforcement action by the Commission or other
regulatory authority;
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(i)
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will
immediately forward to the Adviser, upon receipt, any correspondence from
the Commission or other regulatory authority that relates to the
Fund;
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(j)
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will
cause the Fund to comply with the requirements of (i) Section 85l(b)(2) of
the Internal Revenue Code of 1986, as amended (the “Code”) regarding
derivation of income from specified investment activities, and (ii)
Section 851(h)(4) of the Code regarding diversification of the Fund’s
assets;
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(k)
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will
be responsible for maintaining an appropriate compliance program to ensure
that the services provided by the Sub-Adviser under this Agreement are
performed in a manner consistent with the applicable laws and the terms of
this Agreement. The Sub-Adviser agrees to provide such reports and
certifications regarding its compliance program as the Adviser or the
Trust shall reasonably request from time to time;
and
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(l)
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will
maintain a written Code of Ethics that complies with the requirements of
Rule 17j-l under the 1940 Act. The Sub-Adviser certifies that it has
adopted procedures reasonably necessary to prevent its “access persons,”
as such term is defined in Rule 17j-l, from violating the Code of Ethics.
The Sub-Adviser shall notify the Board upon the adoption of any material
change to its Code of Ethics so that the Board, including a majority of
the Trustees who are not interested persons of the Trust, may approve such
change not later than six months after its adoption by the Sub-Adviser, as
required by Rule 17j-l. The Sub-Adviser also shall provide the Trust with
a copy of any amendments to its Code of Ethics that do not represent a
material change to such Code. Within 45 days of the end of each calendar
year while this Agreement is in effect (or more frequently if required by
Rule l7j-l or as the Trust may reasonably request), the Sub-Adviser shall
provide the Board with a written report that, as required by Rule 17j-1:
(i) describes any issue arising under the Sub-Adviser’s Code of Ethics or
related procedures since the last report to the Board, including, but not
limited to, information about material violations of the Code or related
procedures and sanctions imposed in response to material violations, and
(ii) certifies that the Sub-Adviser has adopted procedures reasonably
necessary to prevent its access persons from violating its Code of Ethics.
Upon the written request of the Trust, the Sub-Adviser shall permit the
Trust to examine the reports to be made by the Sub-Adviser under Rule
17j-l(d) and the records the Sub-Adviser maintains pursuant to Rule
l7j-1(f).
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3. Services Not
Exclusive. Except as provided herein, the services furnished
by the Sub-Adviser hereunder are deemed not to be exclusive, and the Sub-Adviser
shall be free to furnish similar services to others so long as it services under
this Agreement are not impaired thereby. The Sub-Adviser and its affiliates may
give advice and take action in the performance of their duties with respect to
any of their clients which may differ from advice given, or the timing or nature
of action taken, with respect to the Fund. Nothing in this Agreement shall be
deemed to impose upon the Sub-Adviser any obligation to purchase or sell or to
recommend for purchase or sale for the Fund any security or other property which
the Sub-Adviser or its affiliates may purchase or sell for their own account or
for the account of any other client, if in the Sub-Adviser’s sole discretion,
such action or such recommendation is undesirable or impractical for the Fund.
Nothing in this Agreement shall limit or restrict the Sub-Adviser or its
affiliates from trading for their own account. The Sub-Adviser and its
affiliates or other clients may have or trade in investments which are at the
same time being traded for the Fund. The Sub-Adviser shall have no obligation to
acquire for the Fund a position which the Sub-Adviser or its affiliates may
acquire for their own or the account of another client, so long as it continues
to be the policy and practice of the Sub-Adviser not to favor or disfavor any
client or class of clients in the allocation of investment
opportunities.
4. Books and
Records. In compliance with the
requirements of Rule 3la-3 under the l940 Act, the Sub-Adviser hereby agrees
that all records which it maintains for the Trust are the property of the Trust
and further agrees to surrender promptly to the Trust any of such records upon
the Trust’s request. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-l under the 1940 Act.
5. Expenses. During
the term of this Agreement, the Sub-Adviser will pay all expenses incurred by it
in connection with its activities under this Agreement other than the cost of
securities’ commodities and other investments (including brokerage commissions
and other transaction charges, if any) purchased for the Fund.
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6. Compensation. For
the services provided and the expenses assumed with respect to the Fund pursuant
to this Agreement, the Sub-Adviser will be entitled to a fee, computed daily and
payable monthly, calculated at the annual rate of 0.48% of the Fund’s average
daily net assets up to and including $100 million, and 0.45% of the Fund’s
average daily net assets over $100 million.
For
purposes of calculating the fee payable to the Sub-Adviser, “average daily net
assets” will exclude those corporate notes issued by MMA Community Development
Investments, Inc. (the “MMA-CDI Notes”) purchased by the Fund at the direction
of the Adviser from time to time, and any and all equity index futures purchased
by the Fund at the direction of the Adviser in consideration of the MMA-CDI
Notes (together, the “Excluded Assets”). The Sub-Adviser does not assume
responsibility or liability for managing the Excluded Assets.
7. Limitation of
Liability. The Sub-Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the performance of this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Sub-Adviser in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. The federal
and state securities laws impose liabilities under certain circumstances on
persons who act in good faith, and therefore nothing herein shall in any way
constitute waiver or limitation of any rights which the undersigned may have
under any federal and state securities laws.
8. Duration and
Termination. Unless sooner terminated, this Agreement shall
continue until December 31, 2009, and thereafter shall continue automatically
for successive annual periods, provided such continuance is specifically
approved at least annually by the Board or vote of the lesser of (a) 67% of the
shares of the Fund represented at a meeting if holders of more than 50% of the
outstanding shares of the Fund are present in person or by proxy or (b) more
than 50% of the outstanding shares of the Fund, provided that in either event
its continuance also is approved by a majority of the Trust’s Trustees who are
not “interested persons” (as defined in the 0000 Xxx) of any party to this
Agreement (the “Independent Trustees”), by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is terminable
without penalty, on 60 days’ notice by the Adviser or the
Sub-Adviser, or without penalty at any time by the Board or by vote
of the lesser of (a) 67% of the shares of the Fund represented at a meeting if
holders of more than 50% of the outstanding shares of the Fund are present in
person or by proxy or (b) more than 50% of the outstanding shares of the Fund.
This Agreement will terminate automatically in the event of its assignment (as
defined in the 0000 Xxx) or in the event of the termination of the management
agreement between the Adviser and the Trust (the “Management
Agreement”).
9. Sub-Adviser’s
Representations. The Sub-Adviser hereby represents and
warrants that it is willing and possesses all requisite legal authority to
provide the services contemplated by this Agreement without violation of
applicable law and regulations.
The
Sub-Adviser further represents and warrants that the Sub-Adviser has reviewed
the portion of (i) the registration statement filed with the Commission, as
amended from time to time for the Fund (the “Registration Statement”), in the
form received from the Adviser with respect to the disclosure about the
Sub-Adviser and the Fund of which the Sub-Adviser has knowledge, and except as
advised in writing to the Adviser such Registration Statement, including the
prospectus and any supplement contain, as of its date, no untrue statement of
any material fact of which the Sub-Adviser has knowledge and do not omit any
statement of a material fact of which the Sub-Adviser has knowledge which was
required to be stated therein or necessary to make the statements contained
therein not misleading. The Sub-Adviser further agrees to notify the Adviser of
any changes that would cause the Registration Statement, including the
prospectus for the Fund to contain any untrue statement of a material fact or to
omit to state a material fact which is required to be stated therein or is
necessary to make the statements contained therein not misleading, in each case
relating to Sub-Adviser and Fund information of which the Sub-Adviser has
knowledge.
The
Sub-Adviser also represents and warrants that for the entire time this Agreement
is in effect and for a period of two years thereafter, the Sub-Adviser will
maintain a claims made bond issued by a reputable fidelity insurance company
against larceny and embezzlement, covering each officer and employee of the
Sub-Adviser, at a minimum level of $3 million which provides coverage for acts
or alleged acts which occur during the period of this Agreement.
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10.
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Use of
Names.
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(a)
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The
Sub-Adviser acknowledges and agrees that the names MMA Praxis, MMA Capital
Management and MMA Praxis International Fund (whether used by themselves
or in combination with other words), and abbreviations or logos associated
with those names, are the valuable property of the Adviser and its
affiliates; that the Trust, the Adviser and their affiliates have the
right to use such names, abbreviations and logos; and that the Sub-Adviser
shall use the names MMA Praxis, MMA Capital Management and MMA Praxis
International Fund, and associated abbreviations and logos, only in
connection with the Sub-Adviser’s performance of its duties hereunder.
Further, in any written communication with the public and in any marketing
communications of any sort, the Sub-Adviser agrees to obtain prior written
approval from the Adviser before using or referring to MMA Praxis, MMA
Capital Management or MMA Praxis International Fund or any abbreviations
or logos associated with those names; provided that nothing herein shall
be deemed to prohibit the Sub-Adviser from referring to the performance of
the Fund in the Sub-Adviser’s marketing material as long as such marketing
material does not constitute “sales literature” or “advertising” for the
Fund, as those terms are used in the rules, regulations and guidelines of
the Commission and the National Association of Securities Dealers,
Inc.
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(b)
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The
Adviser acknowledges and agrees that in any written communication with the
public and in any marketing communications of any sort, the Adviser will
obtain prior written approval from the Sub-Adviser before referring to the
Sub-Adviser or any abbreviations or logos associated with the
Sub-Adviser.
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11.
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Indemnifications.
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(a)
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The
Sub-Adviser agrees to indemnify and hold harmless the Adviser and the
Trust against any losses, expenses, claims, damages or liabilities (or
actions or proceedings in respect thereof), to which the Adviser or the
Trust may become subject arising out of or based on the breach by the
Sub-Adviser of any provisions of this Agreement or any wrongful action by
the Sub-Adviser; provided, however, that the Sub-Adviser shall not be
liable under this paragraph in respect of any loss, expense, claim, damage
or liability to the extent that a court having jurisdiction shall have
determined by a final judgment, or independent counsel agreed upon by the
Sub-Adviser and the Adviser or the Trust, as the case may be, shall have
concluded in a written opinion, that such loss, expense, claim, damage or
liability resulted primarily from the Adviser’s or the Trust’s willful
misfeasance, bad faith or gross negligence or by reason of the reckless
disregard by the Adviser or the Trust of its duties. The foregoing
indemnification shall be in addition to any rights that the Adviser or the
Trust may have at common law or otherwise. The Sub-Adviser’s agreements in
this paragraph shall, upon the same terms and conditions, extend to and
inure to the benefit of each person who may be deemed to control the
Adviser or the Trust, be controlled by the Adviser or the Trust, or be
under common control with the Adviser or the Trust and their affiliates,
trustees, officers, employees and agents. The Sub-Adviser’s agreements in
this paragraph shall also extend to any of the Trust’s, Fund’s and
Adviser’s successors or the successors of the aforementioned affiliates,
trustees, officers, employees or
agents.
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(b)
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The
Adviser agrees to indemnify and hold harmless the Sub-Adviser against any
losses, expenses, claims, damages or liabilities (or actions or
proceedings in respect thereof), to which the Sub-Adviser may become
subject arising out of or based on the breach by the Adviser of any
provisions of this Agreement or the Management Agreement, or any wrongful
action by the Adviser or its affiliates in the distribution of the Fund’s
shares, or any wrongful action by the Trust other than wrongful action
that was caused by the breach by the Sub-Adviser of the provisions of this
Agreement; provided, however, that the Adviser shall not be liable under
this paragraph in respect of any loss, expense, claim, damage or liability
to the extent that a court having jurisdiction shall have determined by a
final judgment, or independent counsel agreed upon by the Adviser and the
Sub-Adviser shall have concluded in a written opinion, that such loss,
expense, claim, damage or liability resulted primarily from the
Sub-Adviser’s willful misfeasance, bad faith or gross negligence or by
reason of the reckless disregard by the Sub-Adviser of its duties. The
foregoing indemnification shall be in addition to any rights that the
Sub-Adviser may have at common law or otherwise. The Adviser’s agreements
in this paragraph shall, upon the same terms and conditions, extend to and
inure to the benefit of each person who may be deemed to control the
Sub-Adviser, be controlled by the Sub-Adviser or be under common control
with the Sub-Adviser and to each of the Sub-Adviser’s and to each such
person’s respective affiliates, trustees, officers, employees and agents.
The Adviser’s agreements in this paragraph shall also extend to any of the
Sub-Adviser’s successors or the successors of the aforementioned
affiliates, trustees, officers, employees or
agents.
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12. Amendment of this
Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
13. Governing
Law. This Agreement shall be governed by and its provisions
shall be construed in accordance with the laws of the State of
Delaware.
14. Notices. All
notices, instructions, or advice permitted or required under this Agreement
shall be deemed to have been properly given if sent (i) by registered U.S. mail,
first class postage prepaid, return receipt requested, (ii) or by overnight
courier, or (iii) by facsimile transmission, all addressed as
follows:
If to the
Fund:
Attention:
Xxxxx Xxxxxxxx
MMA
Capital Management
0000 X.
Xxxx Xxxxxx
Xxxxxx,
XX 00000
Fax
Number 000-000-0000
If to the
Sub-Adviser:
Attention: Xxxxxx
Xxxx
Evergreen
Investment Management Company, LLC
000 Xxxxx
Xxxxx Xxxxxx, Mail Code: NC 0969
Xxxxxxxxx,
XX 00000
Fax
Number 000-000-0000
15. The
Fund and the Adviser acknowledge receipt of the Sub-Adviser’s Form ADV, Part II,
at least 48 hours in advance of entering into this Agreement.
16. Any
term or provision of this Agreement that is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be effective to the extent of such
invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms or provisions of this Agreement in any other
jurisdiction.
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IN WITNESS WHEREOF, the
parties thereto have caused this instrument to be executed by their officers
designated below as of the day and year first above written.
MENNO
INSURANCE SERVICE, INC. d/b/a
MMA
CAPITAL MANAGEMENT
By:
__________________________
Name:
________________________
Title:
_________________________
EVERGREEN
INVESTMENT MANAGEMENT
COMPANY,
LLC
By:
__________________________
Name:
________________________
Title:
_________________________
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