INVESTMENT ADVISORY AGREEMENT
This Agreement, made as of the 30th day of April, 1997, by and between
VAM Institutional Funds, Inc., a Minnesota corporation (the "Company"), on
behalf of each Fund represented by a series of shares of common stock of the
Fund that adopts this Agreement (each a "Fund" and, collectively, the "Funds")
(the Funds, together with the date each Fund adopts this Agreement, are set
forth in Exhibit A hereto, which shall be updated from time to time to reflect
additions, deletions or other changes thereto), and Voyageur Asset Management
LLC, a Minnesota limited liability company ("VAM LLC"),
WITNESSETH:
1. Investment Advisory Services.
(a) The Company hereby engages VAM LLC on behalf of the Funds, and VAM
LLC hereby agrees to act, as investment adviser for, and to manage the
investment of the assets of, the Funds.
(b) The investment of the assets of each Fund shall at all times be
subject to the applicable provisions of the Articles of Incorporation, the
Bylaws, the Registration Statement, and the current Prospectus and the Statement
of Additional Information, if any, of the Company and each Fund and shall
conform to the policies and purposes of each Fund as set forth in such documents
and as interpreted from time to time by the Board of Directors of the Company.
Within the framework of the investment policies of each Fund, and except as
otherwise permitted by this Agreement, VAM LLC shall have the sole and exclusive
responsibility for the management of each Fund's investment portfolio and for
making and executing all investment decisions for each Fund; provided that VAM
LLC shall be authorized to retain a sub-adviser or sub-advisers to assist VAM
LLC in furnishing investment advice to the Funds, and provided further that VAM
LLC shall be responsible for monitoring compliance by the sub-adviser(s) with
the investment policies and restrictions of such Funds and with such other
limitations or directions as the Board of Directors of the Company may from time
to time prescribe. VAM LLC shall report to the Board of Directors of the Company
regularly at such times and in such detail as the Board may from time to time
determine to be appropriate, in order to permit the Board to determine the
adherence of VAM LLC to the investment policies of each Fund.
(c) VAM LLC shall, at its own expense, furnish all office facilities,
equipment and personnel necessary to discharge its responsibilities and duties
hereunder. VAM LLC shall arrange, if requested by the Company, for officers or
employees of VAM LLC to serve without compensation from any Fund as directors,
officers, or employees of the Company if duly elected to such positions by the
shareholders or directors of the Company (as required by law).
(d) VAM LLC hereby acknowledges that all records pertaining to each
Fund's investments are the property of the Company, and in the event that a
transfer of investment advisory services to someone other than VAM LLC should
ever occur, VAM LLC will promptly, and at its own cost, take all steps necessary
to segregate such records and deliver them to the Company.
2. Compensation for Services. In payment for the investment advisory
and management services to be rendered by VAM LLC hereunder, each Fund shall pay
to VAM LLC a monthly fee, which fee shall be paid to VAM LLC not later than the
fifth business day of the month following the month in which said services were
rendered. The monthly fee payable by each Fund shall be as set forth in Exhibit
A hereto, which may be updated from time to time to reflect amendments, if any,
to Exhibit A. The monthly fee payable by each Fund shall be based on the average
of the net asset values of all of the issued and outstanding shares of the Fund
as determined as of the close of each business day of the month pursuant to the
Articles of Incorporation, Bylaws, and currently effective Prospectus and
Statement of Additional Information of the Company and the Fund. For purposes of
calculating each Fund's average daily net assets, as such term is used in this
Agreement, each Fund's net assets shall equal its total assets minus (a) its
total liabilities and (b) its net orders receivable from dealers.
3. Allocation of Expenses.
(a) In addition to the fee described in Section 2 hereof, each Fund
shall pay all its costs and expenses which are not assumed by VAM LLC. These
Fund expenses include, by way of example, but not by way of limitation, all
expenses incurred in the operation of the Fund and any public offering of its
shares, including, among others, Rule 12b-1 plan of distribution fees (if any),
interest, taxes, brokerage fees and commissions, fees of the directors who are
not employees of VAM LLC or the principal underwriter of the Fund's shares (the
"Underwriter"), or any of their affiliates, 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 issue and sale of shares (to the extent not
borne by the Underwriter under its agreement with the Fund), expenses of
printing and mailing stock certificates representing shares of the Fund,
association membership dues, charges of custodians, transfer agents, dividend
disbursing agents, accounting services agents, investor servicing agents, and
bookkeeping, auditing, and legal expenses. Each Fund will also pay the fees and
bear the expense of registering and maintaining the registration of the 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 and reports to shareholders.
(b) The Underwriter shall bear all advertising and promotional expenses
in connection with the distribution of each Fund's shares, including paying for
prospectuses for new shareholders, except as provided in the following sentence.
No Fund shall use any of its assets to finance costs incurred in connection with
the distribution of its shares except pursuant to a Plan of Distribution, if
any, adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (as
amended, the "Act").
4. Freedom to Deal With Third Parties. VAM LLC shall be free to render
services to others similar to those rendered under this Agreement or of a
different nature except as such services may conflict with the services to be
rendered or the duties to be assumed hereunder.
5. Reports to Directors of the Fund. Appropriate officers of VAM LLC
shall provide the directors of the Company with such information as is required
by any plan of distribution adopted by the Company on behalf of any Fund
pursuant to Rule 12b-1 under the Act.
6. Effective Date, Duration and Termination of Agreement.
(a) The effective date of this Agreement with respect to each Fund
shall be the date set forth on Exhibit A hereto.
(b) Unless sooner terminated as hereinafter provided, this Agreement
shall continue in effect with respect to each Fund for a period more than two
years from the date of its execution but only as long as such continuance is
specifically approved at least annually by (i) the Board of Directors of the
Company or by the vote 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 VAM LLC or of the Company cast in person at a meeting
called for the purpose of voting on such approval.
(c) This Agreement may be terminated with respect to any Fund at any
time, without the payment of any penalty, by the Board of Directors of the
Company or by the vote of a majority of the outstanding voting securities of
such Fund, or by VAM LLC, upon 60 days' written notice to the other party.
(d) This agreement shall terminate automatically in the event of its
"assignment" (as defined in the Act).
(e) No amendment to this Agreement shall be effective with respect to
any Fund until approved by the vote of: (i) a majority of the directors of the
Company who are not parties to this Agreement or "interested persons" (as
defined in the Act) of VAM LLC or of the Company cast in person at a meeting
called for the purpose of voting on such approval; and (ii) a majority of the
outstanding voting securities of the applicable Fund.
(f) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities or shares of a Fund
shall mean the lesser of (i) the vote of 67% or more of the voting securities of
such Fund present at a regular or special meeting of shareholders duly called,
if more than 50% of the Fund's outstanding voting securities are present or
represented by proxy, or (ii) the vote of more than 50% of the outstanding
voting securities of such Fund.
7. Notices. Any notice under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Company and VAM LLC have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
VAM INSTITUTIONAL FUNDS, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Its President
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VOYAGEUR ASSET MANAGEMENT LLC
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its President
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Exhibit A
to
Investment Advisory Agreement
between
Voyageur Asset Management LLC
and
VAM Institutional Funds, Inc.
MONTHLY
ADVISORY FEE
(as % of average
FUND EFFECTIVE DATE daily net assets)
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Series H -- ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Growth April 30, 1997 .062500%
and Income Fund