SUB-ADVISORY AGREEMENT
AGREEMENT made this 19th day of February 2001, by and between Mentor
Perpetual Advisors, LLC, (the "Adviser"), and Perpetual Portfolio Management
Limited (the "Sub-adviser").
WHEREAS, the Adviser serves as investment adviser of the Evergreen VA
Perpetual International Fund (the "Fund"), a series of Evergreen Variable
Annuity Trust (the "Trust"), a Delaware business trust which has filed a
registration statement under the Investment Company Act of 1940, as amended (the
"1940 Act") and the Securities Act of 1933 (the "Registration Statement"); and
WHEREAS, the Trust is comprised of several separate investment
portfolios, one of which is the Fund; and
WHEREAS, the Adviser desires to avail itself of the services, advice
and assistance of the Sub-adviser to assist the Adviser in providing investment
advisory services to the Fund; and
WHEREAS, the Sub-adviser is registered under the Investment Advisers
Act of 1940, as amended (the "Advisers Act"), is engaged in the business of
rendering investment advisory services to investment companies and other
institutional clients and desires to provide such services to the Adviser;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follow:
1. Employment of the Sub-adviser. The Adviser hereby employs the
Sub-adviser to manage the investment and reinvestment of the Fund's assets,
subject to the control and direction of the Trust's Board of Trustees, for the
period and on the terms hereinafter set forth. The Sub-adviser hereby accepts
such employment and agrees during such period to render the services and to
assume the obligations herein set forth for the compensation herein provided.
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. The Sub-adviser may execute Fund documentation,
agreements, contracts and other documents requested by brokers, dealers,
counterparties and other persons in connection with its providing advisory
services to the Fund.
2. Obligations of Services to be provided by the Sub-adviser. The
Sub-adviser undertakes to provide the following services and to assume the
following obligations:
a. The Sub-adviser shall manage the investment and
reinvestment of the portfolio assets of the Fund, all without prior
consultation with the Adviser, subject to and in accordance with (i)
the investment objective and policies of the Fund set forth in the
Fund's Prospectus and Statement of Additional Information as from time
to time in effect (the "Governing Documents"), (ii) the requirements
applicable to registered investment companies under applicable laws,
including without limitation the 1940 Act and Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") and (iii) any
written instructions which the Adviser or the Trust's Board of Trustees
may issue from time-to-time (the "Instructions"). The Sub-adviser also
agrees to conduct its activities hereunder in accordance with any
applicable procedures or policies adopted by the Trust's Board of
Trustees as from time to time in effect (the "Procedures"). As of the
date of this Agreement, the Adviser has provided to the Sub-adviser
copies of all Governing Documents, Instructions, if any, and Procedures
currently in effect. The Adviser agrees to provide any amendments or
supplements to the Governing Documents, Instructions and Procedures
within 30 days of their issuance and further agrees that the
Sub-adviser will not be bound by such amendments or supplements until
received by the Sub-adviser. Subject to and in pursuance of the
foregoing, the Sub-adviser shall make all determinations with respect
to the purchase and sale of portfolio securities and shall take such
action necessary to implement the same. The Sub-adviser shall render
such reports concerning the investment activities of the Fund to the
Trust's Board of Trustees and the Adviser as they may reasonably
request. Unless the Adviser gives the Sub-adviser written instructions
to the contrary, the Sub-adviser shall, in good faith and in a manner
which it reasonably believes best serves the interests of the Fund's
shareholders, direct the Fund's custodian as to how to vote such
proxies as may be necessary or advisable in connection with any matters
submitted to a vote of shareholders of securities held in the Fund.
b. Absent instructions of the Adviser to the contrary, the
Sub-adviser shall, in the name of the Fund, place orders for the
execution of portfolio transactions with or through such brokers,
dealers or other financial institutions as it may select. The
Sub-adviser shall use its best efforts to obtain "best execution" on
all portfolio transactions executed on behalf of the Fund, provided
that, so long as the Sub-adviser has complied with Section 28(e) of the
Securities Exchange Act of 1934, the Sub-adviser may cause the Fund to
pay a commission on a transaction in excess of the amount of commission
another broker-dealer would have charged.
c. In connection with the placement of orders for the
execution of the portfolio transactions of the Fund, the Sub-adviser
shall create and maintain all records pertaining to the purchase and
sale of securities by the Sub-adviser on behalf of the Fund required by
Rule 31a-1(b)(5) and (9) under the 1940 Act. All such records shall be
the property of the Trust and shall be available for inspection and use
by the Securities and Exchange Commission ("SEC"), the Trust, the
Adviser or any person retained by the Trust at all reasonable times.
Where applicable, such records shall be maintained by the Sub-adviser
for the periods and in the places required by Rule 31a-2 under the 0000
Xxx.
d. The Sub-adviser shall bear its expenses of providing
services pursuant to this Agreement.
3. Compensation of the Sub-adviser. In full consideration of the
services rendered pursuant to this Agreement, the Sub-adviser agrees to accept
as payment 85% of the portion of the fees received by Perpetual plc.
("Perpetual") under the Adviser's Operating Agreement dated June 21, 1995,
between Mentor Investment Group, LLC ("Mentor") and Perpetual, as amended from
time to time (the "Operating Agreement"). Under the Operating Agreement, Mentor
and Perpetual each receive 50% of the income earned by the Adviser after the
payment of all expenses charged to the Adviser.
4. Other Activities of the Sub-adviser. 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.
5. Use of Names. The Adviser shall not use the name of the Sub-adviser
or any of its affiliates in any prospectus, sales literature or other material
relating to the Trust or the Fund in any manner not approved prior thereto by
the Sub-adviser; provided, however, that the Adviser may use the name of the
Sub-adviser and its affiliates in any such material that merely refers in
accurate terms to the Sub-adviser's appointment hereunder. The Sub-adviser shall
not use the name of the Trust or the Adviser in any material relating to the
Sub-adviser in any manner not approved prior thereto by the Adviser; provided,
however, that the Sub-adviser may use the name of the Adviser or the Trust in
any material that merely refers in accurate terms to the appointment of the
Sub-adviser hereunder. Neither the Adviser nor the Trust shall use or refer in
any way to the name of the Sub-adviser following termination of this agreement
without the Sub-adviser's consent except as may be required by law.
6. 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, 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. Subject to the foregoing, nothing herein shall constitute a waiver of
any rights or remedies that the Trust may have under any federal or state
securities laws.
7. Limitation of Trust's Liability. The Sub-adviser acknowledges that
it has received notice of and accepts the limitations upon the Trust's liability
set forth in its Agreement and Declaration of Trust. 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 Trust officer, employee or agent of the
Trust.
8. Renewal, Termination and Amendment. This Agreement shall continue in
effect, unless sooner terminated as hereinafter provided, for a period of two
years from the date hereof and shall continue in full force and effect for
successive periods of one year thereafter, but only so long as each such
continuance is specifically approved at least annually by vote of the holders of
a majority of the outstanding voting securities of the Fund or by vote of a
majority of the Trustees who are not parties to this Agreement or interested
persons of any such party, cast in accordance with the provisions of the 1940
Act. This Agreement may be terminated at any time without payment of any
penalty, by the Trust's Board of Trustees, 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, or upon such shorter notice as may be mutually agreed upon. This
Agreement shall terminate automatically and immediately upon termination of the
Management Agreement between the Adviser and the Trust. This Agreement shall
terminate automatically and immediately in the event of its assignment. The
terms "assignment" and "vote of a majority of the outstanding voting securities"
shall have the meaning set forth for such terms in the 1940 Act. This Agreement
may be amended at any time by the Sub-adviser and the Adviser, subject to
approval by the Trust's Board of Trustees and, if required by applicable SEC
rules and regulations, a vote of a majority of the Fund's outstanding voting
securities.
9. 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 without the consent of the other party
hereto except as required by law, rule or regulation. The Adviser hereby
consents to the disclosure to third parties of investment results and other data
of the Fund in connection with providing composite investment results and
related information of the Sub-adviser.
10. 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.
11. Miscellaneous. Each party agrees to perform such further actions
and execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the Commonwealth of Massachusetts. 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 the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
MENTOR PERPETUAL ADVISORS, LLC
By: /s/Xxxxxxxxxxx Xxxxxx
Authorized Officer
PERPETUAL PORTFOLIO MANAGEMENT LIMITED
By: _______________________________
Authorized Officer
