INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
AGREEMENT made the 18th day of September 1997, by and between EVERGREEN
MUNICIPAL TRUST, a Delaware business trust (the "Trust") and FIRST UNION
NATIONAL BANK, a national banking association (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, its
series of shares as listed on Schedule 1 to this Agreement and each series of
shares subsequently issued by the Trust (each singly a "Fund" or collectively
the "Funds").
THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, the Trust and the Adviser agree as follows:
1. (a) The Trust hereby employs the Adviser to manage and administer the
operation of the Trust and each of its Funds, to supervise the provision of the
services to the Trust and each of its Funds by others, and to manage the
investment and reinvestment of the assets of each Fund of the Trust in
conformity with such Fund's investment objectives and restrictions as may be set
forth from time to time in the Fund's then current prospectus and statement of
additional information, if any, and other governing documents, 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 employment
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.
(b) In the event that the Trust establishes one or more Funds, in addition to
the Funds listed on Schedule 1, for which it wishes the Adviser to perform
services hereunder, it shall notify the Adviser in writing. If the Adviser is
willing to render such services, it shall notify the Trust in writing and such
Fund shall become a Fund hereunder and the compensation payable to the Adviser
by the new Fund will be as agreed in writing at the time.
2. The Adviser shall place all orders for the purchase and sale of portfolio
securities for the account of each Fund 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 each Fund.
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 a Fund 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 a Fund 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 and its Funds,
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 any of
its Funds; (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 a Fund in connection with transactions involving securities and
other property to which the Fund is a party; (f) all costs and expenses of
distribution of shares of its Funds incurred pursuant to Plans of Distribution
adopted under Rule 12b-1 under the Investment Company Act of 1940 (?1940 Act?);
(g) all taxes and trust fees payable by the Trust or its Funds to Federal,
state, or other governmental agencies; (h) all costs of certificates
representing shares of the Trust or its Funds;
(i) all fees and expenses involved in registering and maintaining registrations
of the Trust, its Funds and of their shares with the Securities and Exchange
Commission (the "Commission") and registering or qualifying the Funds' 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 each Fund 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 Funds; (l) all charges and expenses of legal counsel for the Trust and its
Funds and for Trustees of the Trust in connection with legal matters relating to
the Trust and its Funds, including, without limitation, legal services rendered
in connection with the Trust and its Funds' 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 and its Funds have herein assumed, whether customary or
not, and extraordinary matters, including, without limitation, any litigation
involving the Trust and its Funds, 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 and its Funds.
In the event that the Adviser provides any of these services or pays any of
these expenses, the Trust and any affected Fund will promptly reimburse the
Adviser therefor.
The services of the Adviser to the Trust and its Funds 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 with respect to each
Fund during the period of this Agreement, the Trust will pay to the Adviser a
fee at the annual rate set forth on Schedule 2 for such Fund.
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 with respect to a Fund 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 ("Sub-Adviser") to provide the Trust with respect to all or any of its
Funds 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
Sub-Adviser 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 or any of its Funds 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 any of its Funds or acting on
any business of the Trust or any of its Funds (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 or any of its Funds 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 of each of its Funds 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
Sub-Adviser, 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 First Union Corporation or otherwise; that
Directors, officers and agents of the Adviser and its affiliates or stockholders
of First Union 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 Sub-Adviser
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 Sub-Adviser.
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 any Fund with respect to that Fund; 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 with respect to a Fund. 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 affected Funds 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 MUNICIPAL TRUST
By: ___/s/ Xxxx X. Pileggi___
Name: Xxxx X. Xxxxxxx
Title: President
FIRST UNION NATIONAL BANK
By: ____/s/ T. Hal Clarke____
Name: T. Xxx Xxxxxx
Title: SVP
As of December 31, 1999
Schedule 1
Evergreen Florida High Income Municipal Bond Fund
Evergreen Florida Municipal Bond Fund
Evergreen Georgia Municipal Bond Fund
Evergreen Maryland Municipal Bond Fund
Evergreen New Jersey Municipal Bond Fund
Evergreen North Carolina Municipal Bond Fund
Evergreen South Carolina Municipal Bond Fund
Evergreen Virginia Municipal Bond Fund
Evergreen Connecticut Municipal Bond Fund
Evergreen High Grade Tax Free Fund
As of December 31, 1999
Schedule 2
As compensation for the Adviser's services to each Fund during the period of
this Agreement, each Fund will pay to the Adviser a fee at the annual rate of:
I. Evergreen Florida Municipal Bond Fund
Evergreen Georgia Municipal Bond Fund
Evergreen Maryland Municipal Bond Fund
Evergreen North Carolina Municipal Bond Fund
Evergreen South Carolina Municipal Bond Fund
Evergreen Virginia Municipal Bond Fund
Evergreen High Grade Tax Free Fund
0.50 of 1% of the Average Daily Net Assets of the Fund
II. Evergreen Florida High Income Municipal Bond Fund
0.60 of 1% of the Average Daily Net Assets of the Fund
III. Evergreen New Jersey Municipal Bond Fund
Aggregate Net Asset Value
Management Fee of Shares of the Fund
0.50 of 1% the first $ 500,000,000, plus
0.45 of 1% the next $ 500,000,000, plus
0.40 of 1% of amounts over 1,000,000,000, plus
0.35 of 1% of amounts over 1,500,000,000.
computed as of the close of business on each business day.
IV. Evergreen Connecticut Municipal Bond Fund
0.60% of Average Daily Net Assets of the Fund
