INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
AGREEMENT made as of the 13th day of December 2002, by
and between EVERGREEN INCOME ADVANTAGE FUND, a Delaware
statutory trust (the "Trust") and EVERGREEN INVESTMENT
MANAGEMENT COMPANY, LLC, a Delaware limited liability
company, (the "Adviser").
WHEREAS, the Trust and the Adviser wish to enter into
an Agreement setting forth the terms on which the Adviser
will perform certain services for the Trust.
THEREFORE, in consideration of the promises and the
mutual agreements hereinafter contained, the Trust and the
Adviser agree as follows:
1. The Trust hereby employs the Adviser to manage the
investment and reinvestment of the assets of the Trust in
conformity with the Trust's investment objectives and
restrictions as may be set forth in the Trust's prospectus
and statement of additional information, or as in effect
from time to time, all subject to the supervision of the
Board of Trustees of the Trust, for the period and on the
terms set forth in this Agreement. The Adviser hereby
accepts such appointment and agrees during such period, at
its own expense, to render the services and to assume the
obligations set forth herein, for the compensation provided
herein. The Adviser shall for all purposes herein be deemed
to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act
for or represent the Trust in any way or otherwise be deemed
an agent of the Trust.
2. The Adviser shall place all orders for the purchase
and sale of portfolio securities for the account of the
Trust with broker-dealers selected by the Adviser. In
executing portfolio transactions and selecting
broker-dealers, the Adviser will use its best efforts to
seek best execution on behalf of the Trust. In assessing the
best execution available for any transaction, the Adviser
shall consider all factors it deems relevant, including the
breadth of the market in the security, the price of the
security, the financial condition and execution capability
of the broker-dealer, and the reasonableness of the
commission, if any (all for the specific transaction and on
a continuing basis). In evaluating the best execution
available, and in selecting the broker-dealer to execute a
particular transaction, the Adviser may also consider the
brokerage and research services (as those terms are used in
Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act")) provided to the Trust and/or other accounts
over which the Adviser or an affiliate of the Adviser
exercises investment discretion. The Adviser is authorized
to pay a broker-dealer who provides such brokerage and
research services a commission for executing a portfolio
transaction for the Trust which is in excess of the amount
of commission another broker-dealer would have charged for
effecting that transaction if, but only if, the 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-dealer viewed in terms of
that particular transaction or in terms of all of the
accounts over which investment discretion is so exercised.
3. The Adviser, at its own expense, shall furnish to
the Trust office space in the offices of the Adviser or in
such other place as may be agreed upon by the parties from
time to time, all necessary office facilities, equipment and
personnel in connection with its services hereunder, and
shall arrange, if desired by the Trust, for members of the
Adviser's organization to serve without salaries from the
Trust as officers or, as may be agreed from time to time, as
agents of the Trust. The Adviser assumes and shall pay or
reimburse the Trust for:
(a) the compensation (if any) of the Trustees of the Trust who are
affiliated with the Adviser or with its affiliates, or with any
adviser retained by the Adviser, and of all officers of the Trust
as such; and
(b) all expenses of the Adviser incurred in
connection with its services hereunder.
The Trust assumes and shall pay all other expenses of the Trust, including,
without limitation:
(a) all charges and expenses of any custodian or depository appointed
by the Trust for the safekeeping of the cash, securities and
other property of the Trust;
(b) all charges and expenses for bookkeeping and auditors;
(c) all charges and expenses of any transfer agents and registrars
appointed by the Trust;
(d) all fees of all Trustees of the Trust who are not affiliated with
the Adviser or any of its affiliates, or with any adviser
retained by the Adviser;
(e) all brokers' fees, expenses, and commissions and issue and
transfer taxes chargeable to the Trust in connection with
transactions involving securities and other property to which the
Trust is a party;
(f) all stock exchange listing expenses;
(g) all taxes and trust fees payable by the Trust to Federal, state,
or other governmental agencies;
(h) all costs of certificates representing shares of the Trust;
(i) all fees and expenses involved in registering and maintaining
registrations of the Trust with the Securities and Exchange
Commission (the "Commission") and registering or qualifying the
Trust's shares under state or other securities laws, including,
without limitation, the preparation and printing of registration
statements, prospectuses, and statements of additional
information for filing with the Commission and other authorities;
(j) expenses of preparing, printing, and mailing prospectuses and
statements of additional information to shareholders of the
Trust;
(k) all expenses of shareholders' and Trustees' meetings and of
preparing, printing, and mailing notices, reports, and proxy
materials to shareholders of the Trust;
(l) all charges and expenses of legal counsel for the Trust and for
Trustees of the Trust in connection with legal matters relating
to the Trust, including, without limitation, legal services
rendered in connection with the Trust's existence, trust, and
financial structure and relations with its shareholders,
registrations and qualifications of securities under Federal,
state, and other laws, issues of securities, expenses which the
Trust have herein assumed, whether customary or not, and
extraordinary matters, including, without limitation, any
litigation involving the Trust, its Trustees, officers,
employees, or agents;
(m) all charges and expenses of filing annual and other reports with
the Commission and other authorities; and
(n) all extraordinary expenses and charges of the Trust .
In the event that the Adviser provides any of these services or pays
any of these expenses, the Trust will promptly reimburse the
Adviser therefor.
The services of the Adviser to the Trust hereunder are not to be
deemed exclusive, and the Adviser shall be free to render similar
services to others.
4. As compensation for the Adviser's services to the Trust during
the period of this Agreement, the Trust will pay to the Adviser a
fee at the annual rate of 0.60% of its total assets (defined as
net assets of the Trust plus borrowings or other leverage for
investment purposes to the extent excluded in calculating net
assets).
The Adviser's fee is computed as of the close of business on each
business day.
A pro rata portion of the Trust's fee shall be payable in arrears
at the end of each day or calendar month as the Adviser may from
time to time specify to the Trust. If and when this Agreement
terminates, any compensation payable hereunder for the period
ending with the date of such termination shall be payable upon
such termination. Amounts payable hereunder shall be promptly
paid when due.
5. The Adviser may enter into an agreement to retain, at its own
expense, a firm or firms ("SubAdviser") to provide the Trust all
of the services to be provided by the Adviser hereunder, if such
agreement is approved as required by law. Such agreement may
delegate to such SubAdviser all of Adviser's rights, obligations,
and duties hereunder.
6. The Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in
connection with the performance of this Agreement, except a loss
resulting from the Adviser's willful misfeasance, bad faith,
gross negligence, or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even
though also an officer, Director, partner, employee, or agent of
the Adviser, who may be or become an officer, Trustee, employee,
or agent of the Trust, shall be deemed, when rendering services
to the Trust or acting on any business of the Trust (other than
services or business in connection with the Adviser's duties
hereunder), to be rendering such services to or acting solely for
the Trust and not as an officer, Director, partner, employee, or
agent or one under the control or direction of the Adviser even
though paid by it.
7. The Trust shall cause the books and accounts to be audited at
least once each year by a reputable independent public accountant
or organization of public accountant or organization of public
accountants who shall render a report to the Trust.
8. Subject to and in accordance with the Declaration of Trust of the
Trust, the governing documents of the Adviser and the governing
documents of any SubAdviser, it is understood that Trustees,
Directors, officers, agents and shareholders of the Trust or any
Adviser are or may be interested in the Adviser (or any successor
thereof) as Directors and officers of the Adviser or its
affiliates, as stockholders of Wachovia Corporation or otherwise;
that Directors, officers and agents of the Adviser and its
affiliates or stockholders of Wachovia Corporation are or may be
interested in the Trust or any Adviser as Trustees, Directors,
officers, shareholders or otherwise; that the Adviser (or any
such successor) is or may be interested in the Trust or any
SubAdviser as shareholder, or otherwise; and that the effect of
any such adverse interests shall be governed by the Declaration
of Trust of the Trust, governing documents of the Adviser and
governing documents of any SubAdviser.
9. This Agreement shall continue in effect for two years from the
date set forth above and after such date (a) such continuance is
specifically approved at least annually by the Board of Trustees
of the Trust or by a vote of a majority of the outstanding voting
securities of the Trust, and (b) such renewal has been approved
by the vote of the majority of Trustees of the Trust who are not
interested persons, as that term is defined in the 1940 Act, of
the Adviser or of the Trust, cast in person at a meeting called
for the purpose of voting on such approval.
10. On sixty days' written notice to the Adviser, this Agreement may
be terminated at any time without the payment of any penalty by
the Board of Trustees of the Trust or by vote of the holders of a
majority of the outstanding voting securities of the Trust; and
on sixty days' written notice to the Trust, this Agreement may be
terminated at any time without the payment of any penalty by the
Adviser. This Agreement shall automatically terminate upon its
assignment (as that term is defined in the 1940 Act). Any notice
under this Agreement shall be given in writing, addressed and
delivered, or mailed postage prepaid, to the other party at the
main office of such party.
11. This Agreement may be amended at any time by an instrument in
writing executed by both parties hereto or their respective
successors, provided that with regard to amendments of substance
such execution by the Trust shall have been first approved by the
vote of the holders of a majority of the outstanding voting
securities of the Trust and by the vote of a majority of Trustees
of the Trust who are not interested persons (as that term is
defined in the 0000 Xxx) of the Adviser, any predecessor of the
Adviser, or of the Trust, cast in person at a meeting called for
the purpose of voting on such approval. A "majority of the
outstanding voting securities" of the Trust or the affected Funds
shall have, for all purposes of this Agreement, the meaning
provided therefor in the 1940 Act.
12. Any compensation payable to the Adviser hereunder for any period
other than a full year shall be proportionately adjusted.
13. The provisions of this Agreement shall be governed, construed,
and enforced in accordance with the laws of the State of
Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
EVERGREEN INCOME ADVANTAGE FUND
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
Title: Assistant Secretary
EVERGREEN INVESTMENT
MANAGEMENT COMPANY, LLC
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
