SUB-ADVISORY AGREEMENT
Agreement, dated as of the 30th day of April, 1997, by and between
Voyageur Asset Management LLC (the "Adviser"), a Minnesota corporation, and
Xxxxxx Xxxxxx & Xxxxxx, a Minnesota general partnership (the "Sub-Adviser").
WHEREAS, VAM Institutional Funds, Inc., a Minnesota corporation (the
"Company"), on behalf of Xxxxxx Xxxxxx & Xxxxxx Growth and Income Fund, a
separately managed series of the Company (the "Fund"), has appointed the Adviser
as the Fund's investment adviser pursuant to an Investment Advisory Agreement
dated as of April 30, 1997, as amended (the "Advisory Agreement");
WHEREAS, pursuant to the terms of the Advisory Agreement, the Adviser
desires to appoint the Sub-Adviser as its sub-adviser for the Fund, and the
Sub-Adviser is willing to act in such capacity upon the terms set forth herein;
and
WHEREAS, pursuant to the terms of the Advisory Agreement, the Company
has approved the appointment of the Sub-Adviser as the sub-adviser for the Fund.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Adviser and the Sub-Adviser agree as follows:
1. The Adviser hereby employs the Sub-Adviser to serve as sub-adviser
for, and to manage the investment of the assets of, the Fund as set forth
herein. The Sub-Adviser hereby accepts such employment and agrees, for the
compensation herein provided, to assume all obligations herein set forth and to
bear all expenses of its performance of such obligations (but no other
expenses). The Sub-Adviser shall not be required to pay expenses of the Fund,
including, but not limited to (a) brokerage and commission expenses; (b)
federal, state, local and foreign taxes, including issue and transfer taxes
incurred by or levied on the Fund; (c) interest charges on borrowings; (d) the
Fund's organizational and offering expenses, whether or not advanced by the
Adviser; (e) the cost of other personnel providing services to the Fund; (f)
fees and expenses of registering or otherwise qualifying the shares of the Fund
under applicable state securities laws; (g) expenses of printing and
distributing reports to shareholders; (h) costs of shareholders' meetings and
proxy solicitation; (i) charges and expenses of the Fund's custodian and
registrar, transfer agent and dividend disbursing agent; (j) compensation of the
Company's officers, directors and employees that are not Affiliated Persons or
Interested Persons (as defined in Section 2(a)(19) of the Investment Company Act
of 1940, as amended (the "1940 Act") and the rules, regulations and releases
relating thereto) of the Adviser; (k) legal and auditing expenses; (l) costs of
certificates representing common shares of the Fund; (m) costs of stationery and
supplies; (n) insurance expenses; (o) association membership dues; (p) the fees
and expenses of registering the Fund and its shares with the Securities and
Exchange Commission; (q) travel expenses of officers and employees of the
Sub-Adviser to the extent such expenses relate to the attendance of such persons
at meetings at the request of the Board of Directors of the Company; and (r) all
other charges and costs of the Fund's operation unless otherwise explicitly
provided herein. 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 on behalf of the
Fund in any way or otherwise be deemed an agent of the Fund.
2. The Sub-Adviser shall direct the Company's investments in accordance
with applicable law and the investment objectives, policies and restrictions set
forth in the Fund's then-effective Registration Statement under the Securities
Act of 1933, as amended, including the Prospectus and Statement of Additional
Information of the Fund contained therein, subject to the supervision of the
Company, its officers and directors, and the Adviser and in accordance with the
investment objectives, policies and restrictions from time to time prescribed by
the Board of Directors of the Company and communicated by the Adviser to the
Sub-Adviser and subject to such further limitations as the Adviser may from time
to time impose by written notice to the Sub-Adviser.
3. The Sub-Adviser shall formulate and implement a continuing program
for managing the investment of the Fund's assets, and shall amend and update
such program from time to time as financial and other economic conditions
warrant. The Sub-Adviser shall make all determinations with respect to managing
the investment of the Fund's assets and shall take such steps as may be
necessary to implement the same, including the placement of purchase and sale
orders on behalf of the Fund.
4. The Sub-Adviser shall furnish such reports to the Adviser as the
Adviser may reasonably request for the Adviser's use in discharging its
obligations under the Advisory Agreement, including any reports required
pursuant to Rule 17f-5 under the 1940 Act, which reports may be distributed by
the Adviser to the Company's Board of Directors at periodic meetings of the
Board of Directors and at such other times as may be reasonably requested by the
Board of Directors. Copies of all such reports shall be furnished to the Adviser
for examination and review within a reasonable time prior to the presentation of
such reports to the Company's Board of Directors.
5. The Sub-Adviser shall select the brokers and dealers that will
execute the purchases and sales of securities for the Fund and markets on or in
which such transactions will be executed and shall place, in the name of the
Fund or its nominee, all such orders.
(a) When placing such orders, the Sub-Adviser shall use its
best efforts to obtain the best available price and most favorable and
efficient execution for the Fund. Where best price and execution may be
obtained from more than one broker or dealer, the Sub-Adviser may, in
its discretion, purchase and sell securities through brokers or dealers
who provide research, statistical and other information to the
Sub-Adviser. It is understood that such services may be used by the
Sub-Adviser for all of its investment advisory accounts and
accordingly, not all such services may be used by the Sub-Adviser in
connection with the Fund.
It is understood that certain other clients of the Sub-
Adviser may have investment objectives and policies similar to those of
the Fund, and that the Sub-Adviser may, from time to time, make
recommendations that result in the purchase or sale of a particular
security by its other clients simultaneously with the Fund. If
transactions on behalf of more than one client during the same period
increase the demand for securities being purchased or the supply of
securities being sold, there may be an adverse effect on price or
quantity. In such event, the Sub-Adviser shall allocate advisory
recommendations and the placing of orders in a manner that is deemed
equitable by the Sub-Adviser to the accounts involved, including the
Fund. When two or more of the clients of the Sub-Adviser (including the
Fund) are purchasing or selling the same security on a given day from
the same broker or dealer, such transactions may be averaged as to
price.
(b) The Sub-Adviser agrees that it will not purchase or sell
securities for the Fund in any transaction in which it, the Adviser or
any "affiliated person" of the Company, the Adviser or Sub-Adviser or
any affiliated person of such "affiliated person" is acting as
principal; provided, however, that the Sub-Adviser may effect
transactions pursuant to Rule 17a-7 under the 1940 Act in compliance
with the Fund's then-effective policies concerning such transactions.
(c) The Sub-Adviser agrees that it will not execute any
portfolio transactions for the Fund with a broker or dealer or futures
commission-merchant which is an "affiliated person" of the Company, the
Adviser or the Sub-Adviser or an "affiliated person" of such an
"affiliated person" without the prior written consent of the Adviser.
In effecting any such transactions with the prior written consent of
the Adviser, the Sub-Adviser shall comply with Section 17(e)(1) of the
1940 Act, other applicable provisions of the 1940 Act, if any, the
then-effective Registration Statement of the Fund under the Securities
Act of 1933, as amended and the Fund's then-effective policies
concerning such transactions.
(d) The Sub-Adviser shall promptly communicate to the Adviser
and, if requested by the Adviser, to the Company's Board of Directors,
such information relating to portfolio transactions as the Adviser may
reasonably request. The parties understand that the Fund shall bear all
brokerage commissions in connection with the purchases and sales of
portfolio securities for the Fund and all ordinary and reasonable
transaction costs in connection with purchases of such securities in
private placements and subsequent sales thereof.
6. The Sub-Adviser may (at its cost except as contemplated by paragraph
5 of this Agreement) employ, retain or otherwise avail itself of the services
and facilities of persons and entities within its own organization or any other
organization for the purpose of providing the Sub-Adviser, the Adviser or the
Fund with such information, advice or assistance, including but not limited to
advice regarding economic factors and trends and advice as to transactions in
specific securities, as the Sub-Adviser may deem necessary, appropriate or
convenient for the discharge of its obligations hereunder or otherwise helpful
to the Adviser or the Fund, or in the discharge of the Sub-Adviser's overall
responsibilities with respect to the other accounts for which it serves as
investment manager or investment adviser.
7. The Sub-Adviser shall cooperate with and make available to the
Adviser, the Fund and any agents engaged by the Fund, the Sub-Adviser's
expertise relating to matters affecting the Fund.
8. For the services to be rendered under this Agreement, and the
facilities to be furnished for each fiscal year of the Fund, the Adviser shall
pay to the Sub-Adviser a monthly management fee at the annual rate of .75% of
the Fund's average daily net assets. This fee will be computed based on net
assets at the beginning of each day and will be paid to the Sub-Adviser monthly
on or before the fifteenth day of the month next succeeding the month for which
the fee is paid. The fee shall be prorated for any fraction of a fiscal year at
the commencement and termination of this Agreement.
Pursuant to the Advisory Agreement, the Adviser receives monthly from
the Company compensation at the annual rate of .75% of the Fund's average daily
net assets. If the Adviser has undertaken in the Company's Registration
Statement as filed under the 1940 Act or elsewhere to waive all or part of its
fee under the Advisory Agreement or to reduce such fee upon order of the Board
of Directors or the vote of a majority of the outstanding voting securities of
the Company, the Sub-Adviser's fee payable under this Agreement will be
proportionately waived in whole or part.
9. The Sub-Adviser represents, warrants and agrees that:
(a) The Sub-Adviser is registered as an "investment adviser"
under the Investment Advisers Act of 1940 (the "Advisers Act") and is
currently in compliance and shall at all times continue to comply with
the requirements imposed upon it by the Advisers Act and other
applicable laws and regulations. The Sub-Adviser agrees to (i) supply
the Adviser with such documents as the Adviser may reasonably request
to document compliance with such laws and regulations and (ii)
immediately notify the Adviser of the occurrence of any event which
would disqualify the Sub-Adviser from serving as an investment adviser
of an investment company pursuant to any applicable law or regulation.
(b) The Sub-Adviser will maintain, keep current and preserve
on behalf of the Company all records required or permitted by the 1940
Act in the manner provided by such Act. The Sub-Adviser agrees that
copies of such records are the property of the Company, and will be
surrendered to the Company promptly upon request.
(c) The Sub-Adviser will complete such reports concerning
purchases or sales of securities on behalf of the Sub-Adviser as the
Adviser may from time to time require to document compliance with the
1940 Act, the Advisers Act, the Internal Revenue Code, applicable state
securities laws and other applicable laws and regulations or regulatory
and taxing authorities in countries other than the United States.
(d) After filing with the Securities and Exchange Commission
any amendment to its Form ADV, the Sub-Adviser will promptly furnish a
copy of such amendment to the Adviser.
(e) The Sub-Adviser will immediately notify the Adviser of the
occurrence of any event which would disqualify the Sub-Adviser from
serving as an investment adviser of an investment company pursuant to
Section 9 of the 1940 Act or any other applicable statute or
regulation.
10. This Agreement shall become effective as of the date first set
forth above. Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities or shares of the Fund
shall mean the vote of 67% or more of such shares if the holders of more than
50% of such shares are present in person or by proxy or the vote of more than
50% of such shares, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect for a period of two years from the date of its execution, and
thereafter shall continue in effect only so long as such continuance is
specifically approved at least annually (a) by the Board of Directors of the
Company or by the vote of a majority of the outstanding voting securities of the
Fund, and (b) by the vote of a majority of the directors who are not parties to
this Agreement or Interested Persons of the Adviser, the Sub-Adviser or the
Company, cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time without the payment of any
penalty (a) by the vote of the Board of Directors of the Company or by the vote
of the holders of a majority of the outstanding voting securities of the Fund,
upon 60 days' written notice to the Adviser and the Sub-Adviser; (b) by the
Adviser, upon 60 days' written notice to the Sub-Adviser; or (c) by the
Sub-Adviser, upon 60 days' written notice to the Adviser. This Agreement shall
automatically terminate in the event of its assignment as defined in the 1940
Act and the rules thereunder; provided, however, that such automatic termination
shall be prevented in a particular case by an order of exemption from the
Securities and Exchange Commission or a no-action letter of the staff of the
Commission to the effect that such assignment does not require termination as a
statutory or regulatory matter. This Agreement shall automatically terminate
upon completion of the dissolution, liquidation or winding up of the Fund.
11. No amendment to or modification of this Agreement shall be
effective unless and until approved by the vote of a majority of the outstanding
shares of the Fund.
12. This Agreement shall be binding upon, and inure to the benefit of,
the Adviser and the Sub-Adviser, and their respective successors.
13. 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.
14. To the extent state law is not preempted by the provisions of any
law of the United States heretofore or hereafter enacted, as the same may be
amended from time to time, this Agreement shall be administered, construed and
enforced according to the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers thereunto duly authorized in multiple
counterparts, each of which shall be an original but all of which shall
constitute one of the same instrument.
VOYAGEUR ASSET MANAGEMENT LLC
By /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
XXXXXX XXXXXX & XXXXXX
By /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title:
