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EXHIBIT E(1)
VOYAGEUR MUTUAL FUNDS
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of
November, 1999, by and between VOYAGEUR MUTUAL FUNDS, a Delaware business trust
(the "Trust"), for and on behalf of each series of the Trust (each series is
referred to hereinafter as a "Fund"), and Delaware Distributors, L.P., a
Delaware limited partnership (the "Underwriter"). This Agreement shall apply to
each class of shares offered by the following Funds:
Delaware Tax-Free Arizona Fund
Delaware Tax-Free California Fund
Delaware Tax-Free Iowa Fund
Delaware Tax-Free Idaho Fund
Delaware Minnesota High-Yield Municipal Bond Fund
Delaware Montana Municipal Bond Fund
Delaware National High-Yield Municipal Bond Fund
Delaware Tax-Free New York Fund
Delaware Tax-Free Wisconsin Fund
1. UNDERWRITING SERVICES
The Trust, on behalf of Delaware Tax-Free Arizona Fund, Delaware
Tax-Free California Fund, Delaware Tax-Free Iowa Fund, Delaware Tax-Free Idaho
Fund, Delaware Minnesota High-Yield Municipal Bond Fund, Delaware National
High-Yield Municipal Bond Fund, Delaware Tax-Free New York Fund, Delaware
Tax-Free Wisconsin Fund, previously engaged the Underwriter, and the Underwriter
agreed to act, a principal underwriter for each Fund in the sale and
distribution of the shares of each class of such Fund to the public, either
through dealers or otherwise. The Underwriter agreed to offer such shares for
sale at all times when such shares are available for sale and may lawfully be
offered for sale and sold.
The Trust, on behalf of each Fund, hereby desires to enter into a new
agreement with the Underwriter as of the date hereof, pursuant to which the
Underwriter hereby agrees to act, a principal underwriter for each Fund in the
sale and distribution of the shares of each class of such Fund to the public,
either through dealers or otherwise. The Underwriter agrees to offer such shares
for sale at all times when such shares are available for sale and may lawfully
be offered for sale and sold.
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2. SALE OF SHARES
The shares of each Fund are to be sold only on the following terms:
(a) All subscriptions, offers, or sales shall be subject to acceptance
or rejection by the Trust. Any offer for or sale of shares shall be conclusively
presumed to have been accepted by the Trust if the Trust shall fail to notify
the Underwriter of the rejection of such offer or sale prior to the computation
of the net asset value of such shares next following receipt by the Trust of
notice of such offer or sale.
(b) No share of a Fund shall be sold by the Underwriter (i) for any
consideration other than cash or, pursuant to any exchange privilege provided
for by the applicable currently effective Prospectus or Statement of Additional
Information (hereinafter referred to collectively as the "Prospectus"), shares
of any other investment company for which the Underwriter acts as an
underwriter, or (ii) except in instances otherwise provided for by the
applicable currently effective Prospectus, for any amount less than the public
offering price per share, which shall be determined in accordance with the
applicable currently effective Prospectus.
(c) In connection with certain sales of shares, a contingent deferred
sales charge will be imposed in the event of a redemption transaction occurring
within a certain period of time following such a purchase, as described in the
applicable currently effective Prospectus.
(d) The front-end sales charge, if any, for any class of shares of a
Fund may, at the discretion of the Trust and the Co-Underwriters, be reduced or
eliminated as permitted by the 1940 Act, and the rules and regulations
thereunder, as they may be amended from time to time, provided that such
reduction or elimination shall be set forth in the Prospectus for such class,
and provided that the Trust shall in no event receive for any shares sold an
amount less than the net asset value thereof. In addition, any contingent
deferred sales charge for any class of shares of a Fund may, at the discretion
of the Trust and the Co-Underwriters, be reduced or eliminated in accordance
with the terms of an exemptive order received from, or any applicable rule or
rules promulgated by, the Securities and Exchange Commission, provided that such
reduction or elimination shall be set forth in the Prospectus for such class of
shares.
(e) The Underwriter shall require any securities dealer entering into a
selected dealer agreement with the Underwriter to disclose to prospective
investors the existence of all available classes of shares of a Fund and to
determine the suitability of each available class as an investment for each such
prospective investor.
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3. QUALIFICATION OF SHARES
The Trust agrees to make prompt and reasonable efforts to effect and
keep in effect, at its expense, the registration or qualification of each Fund's
shares for sale in such jurisdictions as the Trust may designate.
4. INFORMATION TO BE FURNISHED TO THE UNDERWRITER
The Trust agrees that it will furnish the Underwriter with such
information with respect to the affairs and accounts of the Trust (and each Fund
or class thereof) as the Underwriter may from time to time reasonably require,
and further agrees that the Underwriter, at all time reasonable times, shall be
permitted to inspect the books and records of the Trust.
5. ALLOCATION OF EXPENSES
During the period of this Agreement, the Trust shall pay or cause to be
paid all expenses, costs and fees incurred by the Trust which are not assumed by
the Co-Underwriters. The Underwriter agrees to provide, and shall pay costs
which it incurs in connection with providing, administrative or accounting
services to shareholders of each Fund (such costs are referred to as
"Shareholder Servicing Costs"). Shareholder Servicing Costs include all expenses
of the Underwriter incurred in connection with providing administrative or
accounting services to shareholders of each Fund, including, but not limited to,
an allocation of the Underwriter's overhead and payments made to persons,
including employees of the Underwriter, who respond to inquiries of shareholders
regarding their ownership of Fund shares, or who provide other administrative or
accounting services not otherwise required to be provided by the applicable
Fund's investment adviser or transfer agent. The Underwriter has also agreed to
pay all costs of distributing the shares of each Fund ("Distribution Expenses").
DDLP may pay all or a portion of the Distribution Expenses as agreed to from
time to time by the Co-Underwriters. Distribution Expenses include, but are not
limited to, initial and ongoing sales compensation (in addition to sales loads)
paid to investment executives of the Co-Underwriters, and to other
broker-dealers and participating financial institutions; expenses incurred in
the printing of prospectuses, statements of additional information and reports
used for sales purposes; expenses of preparation and distribution of sales
literature; expenses of advertising of any type; an allocation of the
Co-Underwriters' overhead; payments to and expenses of persons who provide
support services in connection with the distribution of Fund shares; and other
distribution related expenses.
6. COMPENSATION TO THE UNDERWRITER
As compensation for all of its services provided and its costs assumed
under this Agreement, the Underwriter shall receive the following forms and
amounts of compensation;
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(a) The Underwriter shall, as agreed from time to time with DDLP and as
permitted by applicable law or regulation, be entitled to receive or retain any
front-end sales charge imposed in connection with sales of shares of each Fund,
as set forth in the applicable current Prospectus. Up to the entire amount of
such front-end sales charge may be reallowed by the Underwriter to
broker-dealers and participating financial institutions in connection with their
sale of Fund shares. The amount of the front-end sales charge (if any) may be
retained or deducted by the Underwriter from any sums received by it in payment
for shares so sold. If such amount is not deducted by the Underwriter from such
payments, such amount shall be paid to the Underwriter by the Trust not later
than five business days after the close of any calendar quarter during which any
such sales were made by the Underwriter and payment received by the Trust.
(b) The Underwriter shall, as agreed from time to time with DDLP and as
permitted by applicable law or regulation, be entitled to receive or retain any
contingent deferred sales charge imposed in connection with any redemption of
shares of each Fund, as set forth in the applicable current Prospectus.
(c) Pursuant to the Trust's Plan of Distribution adopted in accordance
with Rule 12b-1 under the 1940 Act (the "Plan"):
(i) Class A of each Fund is obligated to pay the Underwriter
and/or DDLP, as agreed from time to time by such parties and as
permitted by applicable law or regulation, a total fee in connection
with the servicing of shareholder accounts of such class and in
connection with distribution-related services provided in respect of
such class, calculated and payable quarterly, at the annual rate of
.25% of the value of the average daily net assets of such class. All or
any portion of such total fee may be payable as a Shareholder Servicing
Fee, and all or any portion of such total fee may be payable as a
Distribution Fee, as determined from time to time by the Trust's Board
of Trustees. Until further action by the Board of Trustees, all of such
fee shall be designated and payable as a Shareholder Servicing Fee.
(ii) Class B of each Fund offering shares of such Class is
obligated to pay the Underwriter and/or DDLP, as agreed from time to
time by such parties and as permitted by applicable law or regulation,
a total fee in connection with the servicing of shareholder accounts of
such Class and in connection with distribution-related services
provided in respect of such Class, calculated and payable quarterly, at
the annual rate of 1.00% of the value of the average daily net assets
of such Class. All or any portion of such total fee may be payable as a
Shareholder Servicing Fee, and all or any portion of such total fee may
be payable as a Distribution Fee, as determined from time to time by
the Trust's Board of Trustees. Until further action by the Board of
Trustees, a portion of such fee equal to .25% per annum of Class B's
average net assets shall be designated and payable as a Shareholder
Servicing Fee and the remainder of such fee shall be designated as a
Distribution Fee.
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(iii) Class C of each Fund is obligated to pay the Underwriter
and/or DDLP, as agreed from time to time by such parties and as
permitted by applicable law or regulation, a total fee in connection
with the servicing of shareholder accounts of such class and in
connection with distribution-related services provided in respect of
such class, calculated and payable quarterly, at the annual rate of
1.00% of the value of the average daily net assets of such class. All
or any portion of such total fee may be payable as a Shareholder
Servicing Fee, and all or any portion of such total fee may be payable
as a Distribution Fee, as determined from time to time by the Trust's
Board of Trustees. Until further action by the Board of Trustees, a
portion of such total fee equal to .25% per annum of the average daily
net assets of such class shall be designated and payable as a
Shareholder Servicing Fee and the remainder of such fee shall be
designated as a Distribution Fee.
Average daily net assets shall be computed in accordance with the
applicable currently effective Prospectus. Amounts payable under the Plan may
exceed or be less than actual Distribution Expenses and Shareholder Servicing
Costs. In the event such Distribution Expenses and Shareholder Servicing Costs
exceed amounts payable under the Plan, the Underwriter shall not be entitled to
reimbursement by the Trust.
(d) In each year during which this Agreement remains in effect, the
Underwriter and/or DDLP, as agreed from time to time with DDLP, will prepare and
furnish to the Board of Trustees of the Trust, and the Board will review, on a
quarterly basis, written reports complying with the requirements of Rule 12b-1
under the 1940 Act that set forth the amounts expended under this Agreement and
the Plan, on a class by class basis as applicable, and the purposes for which
those expenditures were made.
7. LIMITATION OF THE UNDERWRITER'S AUTHORITY
The Underwriter shall be deemed to be an independent contractor and,
except as specifically provided or authorized herein, shall have no authority to
act for or represent any Fund or the Trust.
8. SUBSCRIPTION FOR SHARES-REFUND FOR CANCELED ORDERS
The Underwriter shall subscribe for the shares of a Fund only for the
purpose of covering purchase orders already received by it or for the purpose of
investment for its own account. In the event that an order for the purchase of
shares of a Fund is placed with the Underwriter by a customer or dealer and
subsequently canceled, the Underwriter shall forthwith cancel the subscription
for such shares entered on the books of the Fund, and, if the Underwriter has
paid the Fund for such shares, shall be entitled to receive from the Fund in
refund of such payment the lesser of:
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(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation
by the Underwriter.
9. INDEMNIFICATION OF THE TRUST
The Underwriter agrees to indemnify each Fund and the Trust against any
and all litigation and other legal proceedings of any kind or nature and against
any liability, judgment, cost, or penalty imposed as a result of such litigation
or proceedings in any way arising out of or in connection with the sale or
distribution of the shares of such Fund by the Underwriter. In the event of the
threat or institution of any such litigation or legal proceedings against any
Fund, the Underwriter shall defend such action on behalf of the Fund or the
Trust at the Underwriter's own expense, and shall pay any such liability,
judgment, cost, or penalty resulting therefrom, whether imposed by legal
authority or agreed upon by way of compromise and settlement; provided, however,
the Underwriter shall not be required to pay or reimburse a Fund for any
liability, judgment, cost, or penalty incurred as a result of information
supplied by, or as the result of the omission to supply information by, the
Trust to the Underwriter, or to the Underwriter by a director, officer, or
employee of the Trust who is not an "interested person," as defined in the
provisions of the 1940 Act, of the Underwriter, unless the information so
supplied or omitted was available to the Underwriter without recourse to the
Fund or the Trust or any such person referred to above.
10. FREEDOM TO DEAL WITH THIRD PARTIES
The Underwriter shall be free to render to others services of a nature
either similar to or different from those rendered under this contract, except
such as may impair its performance of the services and duties to be rendered by
it hereunder.
11. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
(a) The effective date of this Agreement shall be November 1, 1999.
Unless sooner terminated as hereinafter provided, this Agreement shall continue
in effect for a period of one year after the date of its execution, and from
year to year thereafter, but only so long as such continuance is specifically
approved at least annually by a vote of the Board of Trustees of the Trust, and
of the Trustees who are not "interested persons" (as defined in the provisions
of the 0000 Xxx) of the Trust and have no direct or indirect financial interest
in the operation of the Plan or in any agreement related to the Plan (including,
without limitation, this Agreement), cast in person at a meeting called for the
purpose of voting on this Agreement.
(b) This Agreement may be terminated at any time with respect to any
Fund or class thereof, without the payment of any penalty, by the vote of a
majority of the members of
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the Board of Trustees of the Trust who are not "interested persons" (as defined
in the provisions of the 0000 Xxx) of the Trust and have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan (including, without limitation, this Agreement), or by the vote of a
majority of the outstanding voting securities of such Fund (or class thereof),
or by the Underwriter, upon 60 days' written notice to the other party.
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities of a Fund (or class
thereof) shall mean the lesser of (i) the vote of 67% or more of the voting
securities of such Fund (or class thereof) present at a regular or special
meeting of shareholders duly called, if more than 50% of the Fund's (or class's,
as applicable) 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 (or class thereof).
12. AMENDMENTS TO AGREEMENT
No material amendment to this Agreement shall be effective until
approved by the Underwriter and by vote of a majority of the Board of Trustees
of the Trust who are not interested persons of the Underwriter.
13. 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 Trust and the Underwriter have caused
this Agreement to be executed by their duly authorized officers as of the day
and year first above written.
VOYAGEUR MUTUAL FUNDS
By /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President
DELAWARE DISTRIBUTORS, L.P.
by its General Partner
DELAWARE DISTRIBUTORS, INC.
By /s/ J. Xxxxx Xxxxx
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Name:
Title:
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