SUB-INVESTMENT ADVISORY AGREEMENT
This AGREEMENT, made as of the 30th day of April, 1997, by and between
Marquette Trust Company, a trust company organized and existing under the laws
of the State of Minnesota (the "Adviser"), and Voyageur Asset Management LLC, a
Minnesota limited liability company (the "Sub-Adviser").
WHEREAS, VAM Institutional Funds, Inc., a Minnesota corporation (the
"Company"), on behalf of VAM Financial Institutions Intermediate Duration
Portfolio and VAM Financial Institutions Core Portfolio, separately managed
series of the Company (each a "Fund" and, collectively, the "Funds"), has
appointed the Adviser as the Funds' investment adviser pursuant to an Investment
Advisory and Management Agreement dated as of April 30, 1997 (the "Advisory
Agreement");
WHEREAS, pursuant to the terms of the Advisory Agreement, the Adviser
desires to appoint the Sub-Adviser as sub-adviser to the Funds, 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
Funds.
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
with respect to the assets of the Funds and to perform the services hereinafter
set forth. 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 Funds,
including, but not limited to, fees of the directors who are not employees of
the investment adviser or subadviser of any series of the Company or of any
affiliate of any such investment adviser or sub-adviser, expenses of directors'
and shareholders' meetings, including the cost of printing and mailing proxies,
expenses of insurance premiums for fidelity and other coverage, expenses of
redemption of shares, expenses of the issue and sale of shares (to the extent
not borne by the principal underwriter of such Fund's shares (the "Underwriter")
under its agreement with such Fund), expenses of printing and mailing stock
certificates representing shares of such Fund, association membership dues,
charges of such Fund's custodian, and bookkeeping, auditing and legal expenses.
Each Fund will also pay the fees and bear the expense of registering and
maintaining the registration of such Fund and its shares with the Securities and
Exchange Commission and registering or qualifying its shares under state or
other securities laws and the expense of preparing and mailing prospectuses,
reports and statements to shareholders. 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 either Fund in any way or otherwise be deemed an agent of
either Fund.
2. The Sub-Adviser shall direct the investment of each Fund's assets in
accordance with applicable law and the investment objectives, policies and
restrictions set forth in the respective Fund's then effective Registration
Statement under the Investment Company Act of 1940, as amended (the "1940 Act")
and 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, 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 reasonable
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 the management of the Funds' assets and resources. The Sub-Adviser 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 the investment of the assets of the Funds 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 Funds.
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, which reports may be distributed by
the Adviser to the Company at periodic meetings of the Company's Board of
Directors and at such other times as may be reasonably requested by the
Company's 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 portfolio securities for the Funds and
markets on or in which such transactions will be executed and shall place, in
the name of the respective Funds or their nominees, 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 Funds. 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 Funds.
It is understood that certain other clients of the Sub-Adviser may have
investment objectives and policies similar to those of the respective Funds 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 a 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 applicable Fund. When two or
more of the clients of the Sub-Adviser (including either 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 either 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 for a Fund pursuant to Rule 17a-7 under the
1940 Act in compliance with such Fund's then-effective policies concerning such
transactions.
(c) The Sub-Adviser agrees that it will not execute any portfolio
transactions for either Fund with a broker or dealer 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 Funds under the Securities Act of 1933, as
amended, and the Funds' 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 respective Funds shall bear all brokerage
commissions in connection with purchases and sales of portfolio securities for
such 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
Funds 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 Funds, or in the discharge of the Sub-Adviser's overall
responsibilities with respect to the other accounts which it serves as
investment manager or investment adviser.
7. The Sub-Adviser shall cooperate with and make available to the
Adviser, each Fund and any agents engaged by either Fund, the Sub-Adviser's
expertise relating to matters affecting the respective Funds.
8. For the services to be rendered under this Agreement, and the
facilities to be furnished for each fiscal year of each Fund, the Adviser shall
pay to the Sub-Adviser a monthly management fee of 50% of the fee payable to the
Adviser pursuant to the Advisory Agreement with respect to such month.
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 ("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 such records are the property
of the Fund, 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 of 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(a) of the
Investment Company Act or any other applicable statute or regulation.
10. The Adviser represents, warrants and agrees that:
(a) it has been duly authorized by the Board of Directors of
the Company to delegate to the Sub-Adviser the provision of the
services contemplated hereby; and
(b) the Adviser and the Company are currently in compliance
and shall at all times continue to comply with the requirements imposed
upon the Adviser and the Company by applicable law and regulations.
11. The Sub-Adviser will not be liable for any error of judgment or
mistake of law or for any loss suffered by either Fund or its respective
shareholders in connection with the performance of its duties under this
Agreement, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its duties under this Agreement.
12. This Agreement shall become effective with respect to each Fund on
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 shares of a Fund
shall mean the lesser of (i) the vote of 67% or more of the voting shares of
such Fund present at a regular or special meeting of shareholders duly called,
if more than 50% of the Fund's outstanding voting shares are present or
represented by proxy, or (ii) the vote of more than 50% of the outstanding
voting shares of such Fund.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect with respect to each Fund 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 (i) by the Board of
Directors of the Company or by the vote of the holders of a majority of the
outstanding voting securities of the applicable Fund, and (ii) by the vote of a
majority of the directors of the Company who are not parties to this Agreement
or "interested persons", as defined in the Act, 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 with respect to either Fund 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 shares of the respective 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 and the Fund, or (c) by the Sub-Adviser, upon 60 days' written
notice to the Adviser and the Fund. Any such termination may be made effective
with respect to both the investment advisory and management services provided
for in this Agreement or with respect to either of such kinds of services. This
Agreement shall automatically terminate in the event of its assignment as
defined in the Investment Company Act of 1940 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 with respect to a Fund upon
completion of the dissolution, liquidation and winding up of such Fund.
13. No amendment to or modification of this Agreement shall be
effective with respect to a Fund unless and until approved by the vote of a
majority of the outstanding shares of such Fund.
14. This Agreement shall be binding upon, and inure to the benefit of,
the Adviser and the Sub-Adviser, and their respective successors.
15. 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.
16. To the extent that 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 on the date indicated 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.
MARQUETTE TRUST COMPANY
By /s/ Xxxx X. Xxxxxx
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Its President
VOYAGEUR ASSET MANAGEMENT LLC
By /s/ Xxxxxx X. Xxxxxx
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Its President
