PORTFOLIO MANAGEMENT AGREEMENT
THIS PORTFOLIO MANAGEMENT AGREEMENT (the "Agreement") is dated and
effective as of March 24, 2003, among Evergreen Investment Management Company,
LLC, a Delaware limited liability company (the "Sub-Advisor"); Fremont
Investment Advisors, Inc., a Delaware corporation (the "Advisor"); and Fremont
Mutual Funds, Inc., a Maryland corporation (the "Fund").
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, diversified management
investment company and is authorized to issue separate series (the "Series"),
each of which may offer a separate class of shares of beneficial interest, each
Series having its own investment objective, policies and limitations; and
WHEREAS, the Fund offers shares of a particular series named the
Fremont California Intermediate Tax-Free Fund (the "California Intermediate
Tax-Free Series"); and
WHEREAS, the Fund has retained the Advisor to render investment
management and administrative services to the California Intermediate Tax-Free
Series; and
WHEREAS, the Advisor and the Fund desire to retain the Sub-Advisor to
furnish portfolio management services to the California Intermediate Tax-Free
Series in connection with Advisor's investment management activities on behalf
of the Series, and the Sub-Advisor is willing to furnish such services to the
Advisor and the California Intermediate Tax-Free Series;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Sub-Advisor, the Advisor and the Fund
as follows:
1. Appointment. The Advisor and the Fund hereby appoint Sub-Advisor to
provide portfolio management services to the Advisor and the Fund with respect
to certain assets of the California Intermediate Tax-Free Series for the periods
and on the terms set forth in this Agreement. The Sub-Advisor accepts such
appointment and agrees to furnish the services herein set forth, for the
compensation herein provided.
2. Sub-Advisor Duties. Subject to the supervision of the Advisor, the
Sub-Advisor shall have full discretionary authority as agent and
attorney-in-fact with respect to the portion of assets of the California
Intermediate Tax-Free Series' portfolio assigned to the Sub-Advisor (the
"Allocated Assets"), from time to time by the Advisor or the Board of Directors,
including authority to: (a) buy, sell, exchange, convert or otherwise trade in
any stocks and other marketable securities, in accordance with the investment
guidelines set forth in Appendix A and (b) place orders for the execution of
such securities transactions with or through such brokers, dealers, or issuers
as Sub-Advisor may select.
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The Sub-Advisor will provide the Services under this Agreement in accordance
with the California Intermediate Tax-Free Series' registratj0 statement filed
with the Securities and Exchange Commission ("SEC") as that registratj0
statement IS amended and supplemented from time to time. The Advisor will
provide the Sub-Advisor with a Copy of each registratj0 statement amendment and
Supplement promptly after it has been filed with the SEC. The parties
acknowledge that the Sub-Advisors performance objective of the Allocated Assets
is as set forth in Appendix A (as such may be revised from time to time at the
discretion of the Advisor); however, failure to satisfy such that: objective
shall not constitute a breach of this Agreement The Sub-Advisor further agrees
a. The Sub-Advisor will conform with all applicable rules and regulations
of the SEC and of all other federal and state regulatory agencies having
jurisdjct0 Over the Sub-Advisor in performance of its duties under this
Agreement As reasonably request by the Advisor or the Fund, the Sub-Advisor will
provide information request by the Advisor or the Fund to comply with the
Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated by the SEC
thereunder.
b. The Sub-Advisor will select broker-dealers or trading systems to
execute Portfolio transactions for the California Intermediate Tax-Free Series
and select the markets on or in which the transactions will be executed. In
Providing the California Intermediate Tax-Free Series with investment advisory
services it is recognized that the Sub-Advisor will give primary consideration
to Securing the most favorable price and efficient execution of orders so that
the Fund's total cost or proceeds in each transactions will be the most
favorable under the circumstances Within the framework of this Policy, the
Sub-Advisor may consider the financial condition of the broker-dealer or trading
system, the investment information, brokerage, research, analyses, trading
services and other products provided by the broker-dealer or trading system who
may effect or be a party to any such transaction or other transactions to which
the Sub-Advisor's other Clients may be a party.
c. It is understood that it is desirable for the Fund that the Sub-Advisor
and the Advisor have access to research, analyses and trading services provided
by broker-dealers and trading systems that may execute brokerage transactions at
a higher cost to the California Intermediate Tax-Free Series than might result
from the allocation of brokerage to other broker-dealers or trading Systems that
do not provide such Services Therefore, in compliance with Section 28(e) of the
Securities Exchange Act of 1934 (the "1934 Act"), the Sub-Advisor is authorized
to place orders for the purchase and sale of securities for the California
Intermediate Tax-Free Series with broker-dealers or trading systems that provide
research, analyses and trading services and may charge an amount of commission
for effecting securities transactions in excess of the amount of commission
another broker-dealer or trading system would have charged for effecting that
transaction, provided the Sub-Advisor (or in the case of research, analyses and
trading services provided to the Advisor, that the Advisor) determines in good
faith that
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such amount of commission was reasonable in relation to the value of the
research, analyses and trading services provided by such broker-dealers or
trading systems viewed in terms of either that particular transaction or the
overall responsibilities of the Sub- Advisor or the Advisor for this or other
advisory accounts, subject to review by the Fund's Board of Directors from time
to time with respect to the extent and continuation of this practice to
determine whether the Fund benefits, directly or indirectly, from such practice.
d. It is understood that the research, analyses and trading services
provided by such broker-dealers or trading systems may be useful to the
Sub-Advisor or the Advisor in connection with the other clients of the
Sub-Advisor or the Advisor. On occasions when the Sub-Advisor deems the purchase
or sale of a security to be in the best interest of the California Intermediate
Tax-Free Series as well as other clients of the Sub-Advisor or the Advisor, the
Sub-Advisor, to the extent permitted by applicable laws and regulations, may,
but shall be under no obligation to, aggregate the securities to be sold or
purchased in order to obtain the most favorable price of lower brokerage
commissions and efficient execution. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, shall
be made by the Sub-Advisor in the manner the Sub-Advisor considers to be the
most equitable and consistent with its fiduciary obligations to the California
Intermediate Tax-Free Series and to such other clients.
e. The Sub-Advisor agrees to use its best efforts to direct brokerage to
certain broker-dealers or trading systems as may be requested from time to time
by the Advisor; however, such directed brokerage decisions shall be made in the
discretion of the Sub- Advisor and shall be consistent with the Sub-Advisor's
obligation to use its best efforts to obtain best execution as required by the
policy discussed above in this section. Such directed brokerage may be used to
obtain research used by the Advisor or for other purposes determined by the
Advisor, such as offsetting the operating expenses of the Fund. The Sub-Advisor,
at the request of the Advisor, shall render reports to the Advisor in such form
and at such times as may be reasonably required, setting forth the amount of
total brokerage business which has been placed by it and the allocation thereof
among broker-dealers and trading systems and specifically indicating those
broker-dealers and trading systems which provided research, analyses and trading
services.
f. The Sub-Advisor will make available to the Advisor and the Fund's Board
of Directors promptly upon their request copies of all its investment records
and ledgers relating to the California Intermediate Tax-Free Series to assist
the Advisor and the Fund in their compliance with respect to the California
Intermediate Tax-Free Series' securities transactions as required by the 1940
Act and the Investment Advisers Act of 1940 (the "Advisers Act"), as well as
other applicable laws. The Sub-Advisor will furnish the Fund's Board of
Directors with respect to the California Intermediate Tax-Free Series such
periodic and special reports as the Advisor and the Directors may reasonably
request in writing.
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g. The Sub-Advisor will maintain detailed records of the Allocated Assets
as well as all investments, receipts, disbursements and other transactions made
with such assets. Such records shall be open to inspection and audit during
Sub-Advisor's normal business hours upon reasonable notice by any person
designated by the Advisor or the Fund. The Sub-Advisor shall provide to the
Advisor or the Fund and any other party designated by either the Advisor or the
Fund: (i) monthly statements of the activities with regard to the Allocated
Assets during the month and a list of such assets showing each asset at its cost
and, for each security listed on any national securities exchange, its value at
the last quoted sale price reported on the composite tape on the valuation date
or, in the cases of securities not so reported, by the principal exchange on
which the security traded or, if no trade was made on the valuation date or if
such security is not listed on any exchange, its value as determined by a
nationally recognized pricing service used by the Sub-Advisor specified by such
pricing service on the valuation date, and for any other security or asset in a
manner determined in good faith by the Sub-Advisor to reflect its then fair
market value; (ii) statements evidencing any purchases and sales as soon as
practicable after such transaction has taken place, and (iii) a quarterly review
of the Allocated Assets.
h. The Sub-Advisor shall use its best judgment and efforts in rendering
the advice and services to the Advisor as contemplated by this Agreement.
Proxy Voting. The Advisor hereby delegates to the Sub-Advisor, the
Advisor's discretionary authority to exercise voting rights with respect to the
securities and other investments in the Allocated Assets. The Sub-Advisor's
proxy voting policies shall comply with any rules or regulations promulgated by
the SEC. The Sub-Advisor shall maintain and preserve a record, in an
easily-accessible place for a period of not less than three (3) years (or
longer, if required by law), of the Sub-Advisor's voting procedures, of the
Sub-Advisor's actual votes, and such other information required for the Fund to
comply with any rules or regulations promulgated by the SEC. The Sub-Advisor
shall supply updates of this record to the Advisor or any authorized
representative of the Advisor, or to the Fund on a quarterly basis (or more
frequently, if required by law). The Sub-Advisor shall provide the Advisor and
the Fund with information regarding the policies and procedures that the
Sub-Advisor uses to determine how to vote proxies relating to the Allocated
Assets. The Fund may request that the Sub-Advisor vote proxies for the Allocated
Assets in accordance with the Fund's proxy voting policies.
Code of Ethics. The Sub-Advisor (i) has adopted a written code of
ethics pursuant to Rule 17j-l under the 1940 Act; (ii) has provided the Advisor
with a copy of evidence of the adoption of the code of ethics by the
Sub-Advisor; and (iii) will make such reports to the Advisor and the Fund as are
required by Rule 17j-l under the 1940 Act. The Sub-Advisor agrees to provide the
Advisor and the Fund with any information required to satisfy the code of ethics
reporting or disclosure requirements of the Xxxxxxxx-Xxxxx Act and any rules or
regulations promulgated by the SEC thereunder. To the extent the Sub-Advisor has
adopted a separate code of ethics or has amended its code of ethics to
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comply with such rules or regulations, the Sub-Advisor shall provide the Advisor
with a copy of such code of ethics and any amendments thereto.
3. Independent Contractor.
The Sub-Advisor shall, for all purposes herein, be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized to do so, have no authority to act for or represent the Company or
the Advisor in any way, or in any way be deemed an agent for the Advisor or the
Company.
4. Expenses and Compensation.
During the term of this Agreement, the Sub-Advisor will pay all expenses
incurred by it, its staff and their activities, in connection with its portfolio
management activities under this Agreement (except that brokerage costs shall be
paid by the Fund). The Sub-Advisor shall not be responsible for any expense
incurred by the Advisor or the Fund, except as provided in Section 6 below.
For the services provided to the California Intermediate Tax-Free Series, the
Advisor will pay the Sub-Advisor the fees as set forth in Appendix B hereto at
the times set forth in Appendix B hereto.
5. Representations and Warranties.
Advisor and Fund. The Advisor and the Fund each represents and warrants to the
Sub- Advisor that (i) the retention of the Sub-Advisor as contemplated by this
Agreement is authorized by the respective governing documents of the Fund and
the Advisor; (ii) the execution, delivery and performance of each of this
Agreement and the Advisory Agreement does not violate any obligation by which
the Fund or the Advisor or their respective property is bound, whether arising
by contract, operation of law or otherwise; and (iii) each of this Agreement and
the Advisory Agreement has been duly authorized by appropriate action of the
Fund and the Advisor and when executed and delivered by the Advisor will be the
legal, valid and binding obligation of the Fund and the Advisor, enforceable
against the Fund and Advisor in accordance with its terms hereof subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or law).
Sub-Advisor. The Sub-Advisor represents and warrants to the Advisor and the Fund
that (i) the retention of the Sub-Advisor as contemplated by this Agreement is
authorized by the Sub-Advisor's governing documents; (ii) the execution,
delivery and performance of this Agreement does not violate any obligation by
which the Sub-Advisor or its property is bound, whether arising by contract,
operation of law or otherwise; and (iii) this Agreement has been duly authorized
by appropriate action of the Sub-Advisor and when executed and delivered by the
Sub-Advisor will be the legal, valid and binding obligation
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of the Sub-Advisor, enforceable against the Sub-Advisor in accordance with its
terms hereof, subject, as to enforcement, to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or law).
6. Books and Records; Custody.
In compliance with the requirements of Rule 31 a-3 under the 1940 Act, the
Sub-Advisor hereby agrees that all records which it maintains for the California
Intermediate Tax-Free Series are the property of the Fund and further agrees to
surrender promptly to the Fund copies of any of such records upon the Fund's
request. The Sub-Advisor further agrees to preserve for the periods prescribed
by Rule 31 a-2 under the 1940 Act the records required to be maintained by Rule
31 a- 1 under the 1940 Act with respect to the California Intermediate Tax-Free
Series and to preserve the records required by Rule 204-2 under the Advisers Act
with respect to the California Intermediate Tax-Free Series for the period
specified in the Rule.
Title to all investments shall be made in the name of the Fund, provided that
for convenience in buying, selling, and exchanging securities (stocks, bonds,
commercial paper, etc.), title to such securities may be held in the name of the
Fund's custodian bank, or its nominee or as otherwise provided in the Fund's
custody agreement. The Fund shall notify the Sub-Advisor of the identity of its
custodian bank and shall give the Sub- Advisor fifteen (15) days' written notice
of any changes in such custody arrangements.
Neither the Sub-Advisor, nor any parent, subsidiary or related firm,
shall take possession of or handle any cash or securities, mortgages or deeds of
trust, or other indicia of ownership of the Fund's investments, or otherwise act
as custodian of such investments. All cash and the indicia of ownership of all
other investments shall be held by the Fund's custodian bank.
The Fund shall instruct its custodian bank to (a) carry out all
investment instructions as may be directed by the Sub-Advisor with respect
thereto (which may be orally given if confirmed in writing); and (b) provide the
Sub-Advisor with all operational information necessary for the Sub-Advisor to
trade on behalf of the Fund.
7. Indemnification. The Sub-Advisor agrees to indemnify and hold harmless
the Advisor, the Fund, any affiliated person within the meaning of Section
2(a)(3) of the 1940 Act ("affiliated person") of the Advisor or the Fund (other
than the Sub-Advisor) and each person, if any, who, within the meaning of
Section 15 of the Securities Act of 1933 (the "1933 Act"), controls
("controlling person") the Advisor or the Fund against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses) to which the Advisor, the Fund or such affiliated person or
controlling person may become subject under the 1933 Act, 1940 Act, the Advisers
Act, or under any other statute, at common law or otherwise, which (1) may be
based upon any wrongful act or omission by the Sub-Advisor, any of its employees
or representatives
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or any affiliate of or any person acting on behalf of the Sub-Advisor or (2)
maybe based upon any untrue statement or alleged untrue statement of a material
fact contained in a registration statement or prospectus covering the shares of
the Fund or any amendment thereof or any supplement thereto or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such a statement
or omission was made in reliance upon and accurately and completely reflects
information furnished to the Fund or any affiliated person of the Fund by the
Sub-Advisor or any affiliated person of the Sub-Advisor; provided, however, that
in no case is the Sub-Advisor's indemnity in favor of the Advisor or the Fund or
any affiliated person or controlling person of the Advisor or the Fund deemed to
protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith or negligence
in the performance of such person's duties or by reason of such person's
reckless disregard of the obligations and duties under this Agreement or by
reason of such person's violation of applicable law or regulations.
The Fund and the Advisor each agrees not to hold the Sub-Advisor or any
of its officers or employees liable for, and to indemnify and hold harmless, the
Sub-Advisor and its directors, officers, employees, affiliated persons and
controlling persons (the "Indemnified Parties"), any act or omission of any
other Sub-Advisor providing investment management services to the Fund, and
against any costs and liabilities the Indemnified Parties may incur as a result
of a claim against the Indemnified Parties regarding actions taken in good faith
exercise of their powers and responsibilities hereunder excepting matters as to
which the Indemnified Parties have been negligent, engaged in willful
misfeasance, bad faith, reckless disregard of the obligations and duties under
this Agreement or have been in violation of applicable law or regulations.
8. Other Investment Activities of Sub-Advisor. The Fund and Advisor
acknowledge that the Sub-Advisor, has investment responsibilities and renders]
investment advice to, and performs other investment advisory services for, other
individuals or entities ("Affiliated Accounts"). Subject to the provisions of
Section 2 hereof, the Fund agrees that the Sub-Advisor may give advice or
exercise investment responsibility and take other action with respect to other
Affiliated Accounts which may differ from advice given or the timing or nature
of action taken with respect to the California Intermediate Tax-Free Series;
provided that the Sub-Advisor acts in good faith, and provided further that it
is the Sub-Advisor's policy to allocate, within its reasonable discretion,
investment opportunities to the California Intermediate Tax-Free Series over a
period of time on a fair and equitable basis relative to the Affiliated
Accounts, taking into account the investment objectives and policies of the
California Intermediate Tax-Free Series and any specific investment restrictions
applicable thereto. The Fund acknowledges that one or more of the Affiliated
Accounts may at any time hold, acquire, increase, decrease, dispose of or
otherwise deal with positions in investments in which the California
Intermediate Tax-Free Series may have an interest from time to time, whether in
transactions which may involve the California Intermediate Tax-Free Series or
otherwise.
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The Sub-Advisor shall have no obligation to acquire for the California
Intermediate Tax- Free Series a position in any investment which any Affiliated
Account may acquire, and the Fund shall have no first refusal, co-investment or
other rights in respect of any such investment either for the California
Intermediate Tax-Free Series or otherwise.
9. Term. This Agreement shall become effective on the date hereof. Unless
terminated as herein provided, this Agreement shall remain in full force and
effective for a period of two years from the date of this Agreement, and shall
continue in full force and effect for periods of one year thereafter so long as
such continuance is approved at least annually (i) by either the Board of
Directors of the Fund or by a vote of a majority (as defined in the 0000 Xxx) of
the outstanding voting securities of the California Intermediate Tax-Free
Series, and (ii) by the Advisor, and (iii) by the vote of a majority of the
Board of Directors of the Fund who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of any such party, cast in
person at a meeting called for the purpose of voting on such approval.
Termination. This Agreement may be terminated at any time, without payment of
any penalty, by the Board of Directors of the Fund or by the vote of a majority
(as defined in the 0000 Xxx) of the outstanding voting securities of the
California Intermediate Tax-Free Series, or by the Advisor, on thirty (30) days'
written notice to the Sub-Advisor, or by the Sub-Advisor on like notice to the
Board of Directors of the Fund and to the Advisor. Payment of fees earned
through the date of termination shall not be construed as a penalty.
Automatic Termination. This Agreement shall automatically and immediately
terminate in the event of its transfer or assignment (within the meaning of the
1940 Act).
10. Amendments. No provision of this agreement may be changed or waived,
orally, but only by an instrument in writing signed by the party against which
enforcement of the change or waiver is sought and no amendment of this Agreement
shall be effective until approved by a vote of a majority of the outstanding
voting securities of the California Intermediate Tax-Free Series, if such
approval is required by applicable law.
11. Miscellaneous.
Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California, provided that nothing herein shall be
construed in a manner inconsistent with the 1940 Act, the Advisers Act, and any
rules, regulations, and orders promulgated thereunder.
Captions. The captions of this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
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Severability. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, or rule or shall be otherwise rendered invalid,
the remainder of this Agreement shall not be affected thereby and, to this
extent, the provisions of this Agreement shall be deemed to be severable.
Agency. Nothing herein shall be construed as constituting the Sub-Advisor as an
agent of the Fund or the Advisor.
Prior Agreement. This Agreement supersedes any prior agreement relating to the
subject matter hereof between the parties.
Counterparts. This Agreement may be executed in counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered, shall be deemed an original and all of which
counterparts shall constitute but one and the same agreement.
12. Notice of Articles of Incorporation. The Sub-Advisor acknowledges that
it has received notice of and accepts the limitations of the Company's liability
as set forth in its Articles of Incorporation. The Sub-Advisor agrees that the
Company's obligations under this Agreement shall be limited to California
Intermediate Tax-Free Series and to its assets, and that the Sub-Advisor shall
not seek satisfaction of any such obligation from the shareholders of the
California Intermediate Tax-Free Series nor from any director, officer, employee
or agent of the Fund.
13. Use of Name. It is understood that the name "Evergreen Investment
Management Company, LLC," or the name of any of its affiliates are the valuable
property of the Sub- Advisor and its affiliates and that the Fund, the Advisor
and the Fund's distributor have the right to use such name(s) in offering
materials and sales literature of the Fund [and/or the Advisor,] only upon
consent and approval by Sub-Advisor and so long as this Agreement is in effect.
Upon termination of the Agreement the Fund and the Advisor shall forthwith cease
to use such name(s). Other than as permitted above in this section, neither the
Fund nor the Advisor shall, without the prior written consent of the Sub-
Advisor, make any representations regarding or reference to the Sub-Advisor or
any affiliates in any disclosure document, advertisement, sales literature or
other promotional materials.
It is understood that the names of the Fund and the Advisor or the name of any
of their affiliates, or any derivative associated with those names, are the
valuable property of the Fund and the Advisor, respectively. The Sub-Advisor has
the right to use such name(s) or derivative(s) in offering materials and sales
literature of the Sub-Advisor so long as this Agreement is in effect. Upon
termination of the Agreement the Fund and the Advisor shall forthwith cease to
use such name(s) or derivative(s). Other than as permitted above in this
section, the Sub-Advisor shall not, without the prior written consent of the
Sub-Advisor, make any representations regarding or reference to the Fund, the
Advisor or any of their affiliates in any disclosure document, advertisement,
sales
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literature or other promotional materials.
14. Receipt of Brochure. The Advisor and the Fund have received from
Evergreen Investment Management Company, LLC the disclosure statement or
"brochure" required to be delivered pursuant to Rule 204-3 of the Advisers Act,
which disclosure statement or brochure was received by the Advisor and the Fund
more than 48 hours prior to entering into this Agreement.
15. Notices. Any notice under this Agreement shall be given in writing and
shall be deemed to have been duly given when delivered by hand, on the date
indicated as the date of receipt on a return receipt, or at the time of receipt
if sent to the other party at the principal office of such party by regular
mail, commercial courier service, telex, facsimile or telecopier.
16. Nonpublic Personal Information. Notwithstanding any provision herein to
the contrary, the Sub-Advisor hereto agrees on behalf of itself and its
directors, trustees, shareholders, officers, and employees (1) to treat
confidentially and as proprietary information of the Advisor (on behalf of
itself and the Fund) (a) all records and other information relative to the
Fund's prior, present, or potential shareholders (and clients of said
shareholders) and (b) any Nonpublic Personal Information, as defined under
Section 248.3(t) of Regulation S-P ("Regulation S-P"), promulgated under the
Xxxxx-Xxxxx-Xxxxxx Act (the "Privacy Act"), and (2) except after prior
notification to and approval in writing by the Advisor, not to use such records
and information for any purpose other than the performance of its
responsibilities and duties hereunder, or as otherwise permitted by Regulation
S-P or the Privacy Act, and if in compliance therewith, the privacy policies
adopted by the Advisor and the Fund and communicated in writing to the
Sub-Advisor. Such written approval shall not be unreasonably withheld by the
Advisor and may not be withheld where the Sub-Advisor may be exposed to civil or
criminal contempt or other proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities.
17. Anti-Money Laundering Compliance. The Sub-Advisor acknowledges that, in
compliance with the Bank Secrecy Act, as amended, and implementing regulations
("BSA"), the Fund has adopted an Anti-Money Laundering Policy. The Sub-Advisor
agrees to comply with the Fund's Anti-Money Laundering Policy and the BSA, as
the same may apply to the Sub-Advisor, now or in the future. The Sub-Advisor
further agrees to provide to the Fund and/or the Advisor such reports,
certifications and contractual assurances as may be requested by the Fund or the
Advisor. The Advisor may disclose information respecting the Sub-Advisor to
governmental and/or regulatory or self regulatory authorities to the extent
required by applicable law or regulation and may file reports with such
authorities as may be required by applicable law or regulation.
18. Confidentiality. Each party to this Agreement shall not, directly or
indirectly, permit its affiliates, directors, trustees, officers, members,
employees, or agents to, in any
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form or by any means, use, disclose, or furnish to any person or entity, records
or information concerning the business of any of the other parties except as
necessary for the performance of duties under this Agreement or as required by
law, without prior written notice to and approval of the relevant other parties,
which approval shall not be unreasonably withheld by such other parties.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
EVERGREEN INVESTMENT MANAGEMENT
COMPANY, LLC
By: /s/
-------------------------------
Title: Executive Manager Director
------------------------------
FREMONT INVESTMENT ADVISORS, INC.
By: /s/
-------------------------------
Title: President & CEO
------------------------------
FREMONT MUTUAL FUNDS, INC.
By: /s/
-------------------------------
Title: Vice President - Secretary
------------------------------
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APPENDIX A
TO PORTFOLIO MANAGEMENT AGREEMENT
Evergreen Investment Management Company, LLC
Sub-Advisor to the Fremont California Intermediate Tax-Free Fund
INVESTMENT OBJECTIVES AND GUIDELINES
Overall Investment Objective:
The objective of the Fremont California Intermediate Tax-Free Fund is
to seek to provide income that is free from both federal income taxes and
California state income taxes.
Normally, the Fund will invest at least 80% of its assets in
intermediate-term California municipal bonds that are free from both federal and
California state income taxes.
Policy and Guidelines for Sub-Advisor:
The Sub-Advisor will adhere to the Investment Objective and to policies
in the Fremont California Intermediate Tax-Free Fund prospectus and Statement of
Additional Information.
Performance Objective for Sub-Advisor:
The Sub-Advisor is expected to achieve a competitive rate of return
over a time horizon of three to five years and/or a complete market cycle,
relative to other California intermediate tax-free funds as compiled by Lipper
Analytical Services and/or Morningstar A competitive rate of return is defined
as Fund performance in the top one- third of such funds. Performance may be
compared to other investments or indices of comparable quality as outlined in
the Statement of Additional Information.
--------------------------------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, in the
event of a conflict between this Appendix A and the California Intermediate
Tax-Free Series' registration statement filed with the SEC, as that registration
statement is amended and supplemented from time to time (collectively, the
"Prospectus"), the term of the Prospectus shall govern.
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APPENDIX B
TO PORTFOLIO MANAGEMENT AGREEMENT
Evergreen Investment Management Company, LLC
Sub-Advisor to the Fremont California Intermediate Tax-Free Fund
SCHEDULE OF FEES
Fremont Investment Advisors, Inc. will pay to Evergreen Investments, on
an aggregate basis, an annual fee computed as a percentage of the average daily
assets of the California Intermediate Tax-Free Fund under management by
Evergreen Investments The management fees specified below shall be the fees
charged. The annual rate is determined as follows:
0.25% (25 basis points) on the first $25 million
0.20% (20 basis points) on the amount over $25 million
Fees will be billed after the end of each calendar month. Fees will be prorated
for any period less than one month and shall be due and payable within thirty
(30) days after an invoice has been delivered to the Advisor.
The Portfolio Management Agreement with the Sub-Advisor may be terminated by the
Advisor or the Investment Company upon 30 days' written notice. The Advisor has
day-to-day authority to increase or decrease the amount of the Fund's assets
under management by the Sub-Advisor.
2
