INVESTMENT SUB-ADVISORY AGREEMENT
NEW COVENANT FUNDS
AGREEMENT made as of this 24 day of September,
2013 between SEI Investments Management Corporation
(the Adviser) and Brandywine Global (the Sub-
Adviser).
WHEREAS, New Covenant Funds, a Delaware
statutory trust (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, the Adviser has entered into an
Investment Advisory Agreement dated February 20,
2012, (the Advisory Agreement) with the Trust,
pursuant to which the Adviser acts as investment
adviser to each series of the Trust set forth on
Schedule A attached hereto (each a Fund, and
collectively, the Funds), as such Schedule may be
amended by mutual agreement of the parties hereto;
and
WHEREAS, the Adviser, with the approval of the
Trust, desires to retain the Sub-Adviser to provide
investment advisory services to the Adviser in
connection with the management of a Fund, and the
Sub-Adviser is willing to render such investment
advisory services; and
WHEREAS, it is intended that the Sub-Adviser
will make purchase or sale recommendations for the
Assets (as defined below), with those
recommendations executed as appropriate by the
Adviser or other another sub-adviser to the Fund
(the Adviser in such capacity and such other sub-
adviser are individually and collectively referred
to as the Overlay Manager).
NOW, THEREFORE, the parties hereto agree as
follows:
1. Duties of the Sub-Adviser. Subject to
supervision by the Adviser and the Trusts
Board of Trustees, the Sub-Adviser shall
manage all of the securities and other assets
of each Fund entrusted to it hereunder (the
Assets), by recommending the purchase,
retention and disposition of the Assets, in
accordance with the Funds investment
objectives, policies and restrictions as
stated in each Funds prospectus and statement
of additional information, as currently in
effect and as amended or supplemented from
time to time (referred to collectively as the
Prospectus), and subject to the following:
(a) The Sub-Adviser shall, in consultation
with and subject to the direction of the
Adviser, recommend from time to time
what Assets should be purchased,
retained or sold by the Fund.
(b) In the performance of its duties and
obligations under this Agreement, the
Sub-Adviser shall act in conformity with
the Trusts Certificate of Trust (as
defined herein) and the Prospectus,
Compliance Policies and Procedures and
with the instructions and directions of
the Adviser and of the Board of Trustees
of the Trust and will conform to and
comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986
(the Code), and all other applicable
federal and state laws and regulations,
as each is amended from time to time.
(c) To the extent applicable to its services
hereunder, the Sub-Adviser shall
maintain all books and records with
respect to transactions involving the
Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and
paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall keep
the books and records relating to the
Assets required to be maintained by the
Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all
information relating to the Sub-Advisers
services under this Agreement needed by
the Adviser to keep the other books and
records of a Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser
agrees that all records that it
maintains on behalf of a Fund are
property of the Fund and the Sub-Adviser
will surrender promptly to a Fund any of
such records upon the Funds request;
provided, however, that the Sub-Adviser
may retain a copy of such records. In
addition, for the duration of this
Agreement, the Sub-Adviser shall
preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such
records as are required to be maintained
by it pursuant to this Agreement, and
shall transfer said records to any
successor sub-adviser upon the
termination of this Agreement (or, if
there is no successor sub-adviser, to
the Adviser).
(d) The Assets of the Fund shall be held by
the Funds custodian. The Sub-adviser
shall at no time have custody or
physical control of the Assets. In
addition, the Sub-Adviser shall not be
liable for any act or omission of the
custodian.
(e) To the extent called for by the Trusts
Compliance Policies and Procedures, or as
reasonably requested by a Fund, the Sub-
Adviser shall provide the Fund with
information and advice regarding Assets
to assist the Fund in determining the
appropriate valuation of such Assets.
(f) The investment management services
provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive
and the Sub-Adviser shall be free to
render similar services to others, as
long as such services do not impair the
services rendered to the Adviser or the
Trust.
(g) The Sub-Adviser shall promptly notify
the Adviser of any financial condition
that is reasonably likely to impair the
Sub-Advisers ability to fulfill its
commitment under this Agreement.
(h) (i) Except under the circumstances set
forth in subsection (ii), the Sub-
Adviser shall not be responsible
for reviewing proxy solicitation
materials or voting and handling
proxies in relation to the
securities held as Assets in a
Fund. If the Sub-Adviser receives
a misdirected proxy, it shall
promptly forward such misdirected
proxy to the Adviser.
(ii) The Sub-Adviser hereby agrees that
upon 60 days written notice from
the Adviser, the Sub-Adviser shall
assume responsibility for
reviewing proxy solicitation
materials and voting proxies in
relation to the securities held as
Assets in a Fund, in accordance
with the Sub-Advisers policies and
procedures. As of the time the
Sub-Adviser shall assume such
responsibilities with respect to
proxies under this sub-section
(ii), the Adviser shall instruct
the custodian and other parties
providing services to a Fund to
promptly forward misdirected
proxies to the Sub-Adviser. If,
at any time, Adviser desires that
the Sub-Adviser vote proxies in
accordance with a custom or other
non-Sub-Adviser policy, Adviser
shall provide such instruction in
writing and shall reimburse the
Sub-Adviser for any associated
out-of-pocket costs and expenses.
Further, the Adviser acknowledges
that such costs and expenses may
be adjusted by third party vendors
from time-to-time.
(i) In performance of its duties and
obligations under this Agreement, the
Sub-Adviser shall not consult with any
other sub-adviser to a Fund or a sub-
adviser to a portfolio that is under
common control with a Fund concerning
the Assets, except as permitted by the
policies and procedures of a Fund. The
Sub-Adviser shall not provide investment
advice to any assets of a Fund other
than the Assets.
(j) The Sub-Adviser shall provide to the
Adviser or the Board of Trustees such
periodic and special reports, balance
sheets or financial information, and
such other information with regard to
its affairs as the Adviser or Board of
Trustees may reasonably request. The
Sub-Adviser shall also furnish to the
Adviser any other information relating
to the Assets that is required to be
filed by the Adviser or the Trust with
the SEC or sent to shareholders under
the 1940 Act (including the rules
adopted thereunder) or any exemptive or
other relief that the Adviser or the
Trust obtains from the SEC.
To the extent permitted by law, the services
to be furnished by the Sub-Adviser under this
Agreement may be furnished through the medium
of any of the Sub-Advisers partners, officers,
employees or control affiliates; provided,
however, that the use of such mediums does not
relieve the Sub-Adviser from any obligation or
duty under this Agreement.
2. Additional Duties of the Sub-Adviser. In
connection with its duty to recommend the
purchase, retention and disposition of the
Assets of the Fund, subject to the provisions
of Section 1 of this Agreement, the Sub-
Adviser shall also provide the following
investment advisory services with respect to
the Assets:
(a) provide such recommendations with
respect to the purchase, retention and
disposition of the Assets of the Fund to
the Overlay Manager in the form of a
model portfolio or otherwise as
appropriate (a Model Portfolio) at such
times and in such manner as the Adviser
requests. Sub-Adviser acknowledges that
Sub-Advisers investment recommendations
will be implemented by the Overlay
Manager with only limited authority to
vary from such recommendations.
(b) review the composition of the
Assets in the Model Portfolio developed
by the Sub-Adviser in light of the
Prospectus and any instructions or
directions given by the Adviser, and
promptly report to the Adviser in the
event that the investments in the Model
Portfolio do not fully comply with any
of the foregoing;
(c) while it is expected that the Overlay
Manager will execute all transactions
within the Fund, if the Overlay Manager
is unable to execute a purchase
transaction with respect to the Model
Portfolio, or is unable to execute a
sale transaction with respect to the
Model Portfolio, then at the Advisers
request, the Sub-Adviser will use best
efforts to assist the Overlay Manager in
executing such transaction in accordance
with the terms of this Agreement.
(d) with respect to the Assets, the Overlay
Manager will determine the timing and
the manner of executing transactions
within the Fund pursuant to the Sub-
Advisers Model Portfolio. The Sub-
Adviser shall not be responsible for the
timing or the manner of transactions
executed by the Overlay Manager. The
Sub-Adviser shall not be responsible for
compliance violations or variations from
the Prospectus or the Advisers
instructions or directions that result
from the manner in which the Overlay
Manager either executes or fails to
execute the Model Portfolio. The
Adviser shall provide to the Sub-Adviser
such reports or other information as the
Sub-Adviser reasonably requests to
assist the Sub-Adviser in providing the
Sub-Advisers advisory services specified
in this Agreement.
(e) Sub-Adviser shall have no
obligation to file with respect to the
Fund any required reports with the SEC
pursuant to Section 13(f) and Section
13(g) of the Securities Exchange Act of
1934 and the rules and regulations
thereunder. Such reports with respect
to the Fund shall be filed by the
Adviser or the Overlay Manager.
3. Duties of the Adviser. The Adviser shall
continue to have responsibility for all
services to be provided to each Fund pursuant
to the Advisory Agreement and shall oversee
and review the Sub-Advisers performance of its
duties under this Agreement; provided,
however, that in connection with its
recommendations regarding management of the
Assets, nothing herein shall be construed to
relieve the Sub-Adviser of responsibility for
compliance with the Trusts Certificate of
Trust (as defined herein), Prospectus,
Compliance Policies and Procedures, the
instructions and directions of the Board of
Trustees of the Trust, the requirements of the
1940 Act, the Code, and all other applicable
federal and state laws and regulations, as
each is amended from time to time. In the
performance of its duties and obligations
under this Agreement, the Adviser shall act in
conformity with the requirements of the 1940
Act, the Code, and all other applicable
federal and state laws and regulations, as
each is amended from time to time.
4. Delivery of Documents. The Adviser has
furnished the Sub-Adviser with copies of each
of the following documents:
(a) The Trusts Certificate of Trust, as
filed with the Secretary of the State of
Delaware (such Certificate of Trust, as in
effect on the date of this Agreement and as
amended from time to time, herein called the
Certificate of Trust);
(b) By-Laws of the Trust (such By-Laws, as
in effect on the date of this Agreement and as
amended from time to time, are herein called
the By-Laws); and
(c) Prospectus of each Fund.
The Sub-Adviser has delivered Part 2 of its
Form ADV to the Adviser.
5. Compensation to the Sub-Adviser. For the
services to be provided by the Sub-Adviser
pursuant to this Agreement, the Adviser will
pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation
therefore, a sub-advisory fee at the rate
specified in Schedule B which is attached
hereto and made part of this Agreement. The
fee will be calculated based on the average
daily value of the Assets, excluding cash with
respect to a Fund that is an equity fund,
under the Sub-Advisers management and will be
paid to the Sub-Adviser monthly. For the
avoidance of doubt, notwithstanding the fact
that the Agreement has not been terminated, no
fee will be accrued under this Agreement with
respect to any day that the value of the
Assets under the Sub-Advisers management
equals zero.
6. Indemnification. The Sub-Adviser shall
indemnify and hold harmless the Adviser from
and against any and all claims, losses,
liabilities or damages (including reasonable
attorneys fees and other related expenses)
howsoever arising from or in connection with
the performance of the Sub-Advisers
obligations under this Agreement; provided,
however, that the Sub-Advisers obligation
under this Paragraph 6 shall be reduced to the
extent that the claim against, or the loss,
liability or damage experienced by the
Adviser, is caused by or is otherwise directly
related to the Advisers own willful
misfeasance, bad faith or negligence, or to
the reckless disregard of its duties under
this Agreement.
The Adviser shall indemnify and hold harmless
the Sub-Adviser from and against any and all
claims, losses, liabilities or damages
(including reasonable attorneys fees and other
related expenses) howsoever arising from or in
connection with the performance of the
Advisers obligations under this Agreement;
provided, however, that the Advisers
obligation under this Paragraph 6 shall be
reduced to the extent that the claim against,
or the loss, liability or damage experienced
by the Sub-Adviser, is caused by or is
otherwise directly related to the Sub-Advisers
own willful misfeasance, bad faith or
negligence, or to the reckless disregard of
its duties under this Agreement.
7. Duration and Termination. This Agreement
shall become effective upon approval by the
Trusts Board of Trustees and its execution by
the parties hereto. Pursuant to the exemptive
relief obtained in the SEC Order dated April
29, 1996, Investment Company Act Release No.
21921, approval of the Agreement by a majority
of the outstanding voting securities of a Fund
is not required, and the Sub-Adviser
acknowledges that it and any other sub-adviser
so selected and approved shall be without the
protection (if any) accorded by shareholder
approval of an investment advisers receipt of
compensation under Section 36(b) of the 1940
Act.
This Agreement shall continue in effect for a
period of more than two years from the date
hereof only so long as continuance is
specifically approved at least annually in
conformance with the 1940 Act; provided,
however, that this Agreement may be terminated
with respect to a Fund (a) by the Fund at any
time, without the payment of any penalty, by
the vote of a majority of Trustees of the
Trust or by the vote of a majority of the
outstanding voting securities of the Fund, (b)
by the Adviser at any time, without the
payment of any penalty, on not more than 60
days nor less than 30 days written notice to
the Sub-Adviser, or (c) by the Sub-Adviser at
any time, without the payment of any penalty,
on 90 days written notice to the Adviser.
This Agreement shall terminate automatically
and immediately in the event of its
assignment, or in the event of a termination
of the Advisory Agreement with the Trust. As
used in this Paragraph 7, the terms assignment
and vote of a majority of the outstanding
voting securities shall have the respective
meanings set forth in the 1940 Act and the
rules and regulations thereunder, subject to
such exceptions as may be granted by the SEC
under the 1940 Act.
8. Compliance Program of the Sub-Adviser. The
Sub-Adviser hereby represents and warrants
that:
(a) in accordance with Rule 206(4)-7 under
the Advisers Act, the Sub-Adviser has
adopted and implemented and will
maintain written policies and procedures
reasonably designed to prevent violation
by the Sub-Adviser and its supervised
persons (as such term is defined in the
Advisers Act) of the Advisers Act and
the rules the SEC has adopted under the
Advisers Act; and
(b) to the extent that the Sub-Advisers
activities or services could affect a
Fund, the Sub-Adviser has adopted and
implemented and will maintain written
policies and procedures that are
reasonably designed to prevent violation
of the federal securities laws (as such
term is defined in Rule 38a-1 under the
0000 Xxx) by the Funds and the Sub-
Adviser (the policies and procedures
referred to in this Paragraph 7(b),
along with the policies and procedures
referred to in Paragraph 7(a), are
referred to herein as the Sub-Advisers
Compliance Program).
9. Reporting of Compliance Matters.
(a) The Sub-Adviser shall promptly provide
to the Trusts Chief Compliance Officer
(CCO) the following documents:
(i) access to all SEC examination
correspondences, including
correspondences regarding books
and records examinations and sweep
examinations, issued during the
term of this Agreement, in which
the SEC identified any concerns,
issues or matters (such
correspondences are commonly
referred to as deficiency letters)
relating to any aspect of the Sub-
Advisers investment advisory
business and the Sub-Advisers
responses thereto;
(ii) a report of any material
violations of the Sub-Advisers
Compliance Program or any material
compliance matters (as such term
is defined in Rule 38a-1 under the
0000 Xxx) that have occurred with
respect to the Sub-Advisers
Compliance Program;
(iii) a report of any material changes
to the policies and procedures
that compose the Sub-Advisers
Compliance Program;
(iv) a copy of the Sub-Advisers chief
compliance officers report (or
similar document(s) which serve
the same purpose) regarding his or
her annual review of the Sub-
Advisers Compliance Program, as
required by Rule 206(4)-7 under
the Advisers Act; and
(v) an annual (or more frequently as
the Trusts CCO may reasonably
request) representation regarding
the Sub-Advisers compliance with
Paragraphs 8 and 9 of this
Agreement.
(b) The Sub-Adviser shall also provide the
Trusts CCO with:
(i) reasonable access to the testing,
analyses, reports and other
documentation, or summaries
thereof, that the Sub-Advisers
chief compliance officer relies
upon to monitor the effectiveness
of the implementation of the Sub-
Advisers Compliance Program; and
(ii) reasonable access, during normal
business hours, and upon
reasonable notice, to the Sub-
Advisers facilities for the
purpose of conducting pre-arranged
on-site compliance related due
diligence meetings with personnel
of the Sub-Adviser.
10. Governing Law. This Agreement shall be
governed by the internal laws of the State of
Delaware, without regard to conflict of law
principles; provided, however, that nothing
herein shall be construed as being
inconsistent with the 1940 Act.
11. Severability. Should any part of this
Agreement be held invalid by a court decision,
statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and
their respective successors.
12. Notice. Any notice, advice or report to be
given pursuant to this Agreement shall be
deemed sufficient if delivered or mailed by
registered, certified or overnight mail,
postage prepaid addressed by the party giving
notice to the other party at the last address
furnished by the other party:
To the Adviser at:
SEI Investments Management
Corporation
Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxx, XX 00000
Attention: Legal Department
To the Trusts CCO at:
SEI Investments Management
Corporation
Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxx, XX 00000
Attention: Xxxx Xxxxx
To the Sub-Adviser at:
Brandywine Global
13. Noncompete Provisions.
(a) The Sub-Adviser hereby agrees that, the
Sub-Adviser will:
(i) waive enforcement of any
noncompete agreement or other
agreement or arrangement to which
it is currently a party that
restricts, limits, or otherwise
interferes with the ability of the
Adviser to employ or engage any
person or entity to provide
investment advisory or other
services and will transmit to any
person or entity notice of such
waiver as may be required to give
effect to this provision; and
(ii) not become a party to any
noncompete agreement or other
agreement or arrangement that
restricts, limits or otherwise
interferes with the ability of the
Adviser to employ or engage any
person or entity to provide
investment advisory or other
services.
(b) Notwithstanding any termination of this
Agreement, the Sub-Advisers obligations
under this Paragraph 13 shall survive.
14. Amendment of Agreement. This Agreement may be
amended only by written agreement of the
Adviser and the Sub-Adviser and only in
accordance with the provisions of the 1940 Act
and the rules and regulations promulgated
thereunder.
15. Entire Agreement. This Agreement embodies the
entire agreement and understanding between the
parties hereto, and supersedes all prior
agreements and understandings relating to this
Agreements subject matter. This Agreement may
be executed in any number of counterparts,
each of which shall be deemed to be an
original, but such counterparts shall,
together, constitute only one instrument.
In the event the terms of this Agreement are
applicable to more than one portfolio of the
Trust (for purposes of this Paragraph 15, each
a Fund), the Adviser is entering into this
Agreement with the Sub-Adviser on behalf of
the respective Funds severally and not
jointly, with the express intention that the
provisions contained in each numbered
paragraph hereof shall be understood as
applying separately with respect to each Fund
as if contained in separate agreements between
the Adviser and Sub-Adviser for each such
Fund. In the event that this Agreement is
made applicable to any additional Funds by way
of a Schedule executed subsequent to the date
first indicated above, provisions of such
Schedule shall be deemed to be incorporated
into this Agreement as it relates to such Fund
so that, for example, the execution date for
purposes of Paragraph 7 of this Agreement with
respect to such Fund shall be the execution
date of the relevant Schedule.
16. Miscellaneous. Where the effect of a
requirement of the 1940 Act or Advisers Act
reflected in any provision of this Agreement
is altered by a rule, regulation or order of
the SEC, whether of special or general
application, such provision shall be deemed to
incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed by their
officers designated below as of the day and year
first written above.
SEI Investments Management Corporation
Brandywine Global
By:
/s/ Xxxxxxx Bienhacker
By:
/s/ Xxxx X. Glasernan
Name:
____________________________________
Name:
____________________________________
Title: Vice President
Title: Chief Administrative Officer
Schedule A
to the
Sub-Advisory Agreement
between
SEI Investments Management Corporation
and
Brandywine Global
As of September 24, 2013
NEW COVENANT FUNDS
New Covenant Growth Fund
Schedule B
to the
Sub-Advisory Agreement
between
SEI Investments Management Corporation
and
Brandywine Global
As of September 24, 2013
Pursuant to Paragraph 5, the Adviser shall pay the
Sub-Adviser compensation at an annual rate as
follows:
New Covenant Funds
New Covenant Growth Fund [redacted]
Agreed and Accepted:
SEI Investments Management Corporation
Brandywine Global
By:
/s/ Xxxxxxx Bienhacker
By:
/s/ Xxxx X. Glasrnan
Name:
____________________________________
Name:
____________________________________
Title:
Vice President
Title:
Chief Administrative Officer
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