INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This AGREEMENT, made as of this /s/20th day of /s/March, 1996, by and
between Voyageur Funds, Inc., a Minnesota corporation (the "Company"), and Cadre
Consulting Services, Inc., a Sub-Chapter "S" corporation organized under the
laws of the State of New York (the "Adviser").
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES. The Company hereby engages
the Adviser, and the Adviser hereby agrees to act as investment adviser for, and
to manage the affairs, business and the investment of the assets of the Voyageur
Financial Institutions ("VFI") Short Duration Portfolio series of the Company
(the "Fund").
The investment of the assets of the Fund shall at all times be subject to
the applicable provisions of the Articles of Incorporation and Bylaws of the
Company and the Registration Statement on Form N1-A of the Fund and any
representations contained in the Prospectus and Statement of Additional
Information of the Fund and shall conform to the policies and purposes of the
Fund as set forth in such Registration Statement, Prospectus and Statement of
Additional Information and (a) as interpreted from time to time by the Board of
Directors of the Company and (b) as may be amended or limited from time to time
by such Board of Directors and/or the shareholders of the Fund as permitted by
the Investment Company Act of 1940, as amended. Within the framework of the
investment policies of the Fund, and subject to such other limitations and
directions as the Board of Directors may from time to time prescribe, the
Adviser shall have the sole and exclusive responsibility for the management of
the Fund's assets and the making and execution of all investment decisions for
the Fund. The Adviser 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 the Adviser to the investment policies of the Fund.
The Adviser shall, at its own expense, furnish the Company with suitable
office space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. The Adviser shall arrange, if requested
by the Company, for officers, employees or other Affiliated Persons (as defined
in Section 2(a)(3) of the Investment Company Act of 1940, as amended and the
rules, regulations and releases relating thereto) of the Adviser to serve
without compensation from the Company as directors, officers or employees of the
Company if duly elected to such positions by Fund shareholders or directors of
the Company.
The Adviser hereby acknowledges that all records necessary in the operation
of the Fund, including records pertaining to its shareholders and investments,
are the property of the Company, and in the event that a transfer of management
or investment advisory services to someone other than the Adviser should ever
occur, the Adviser 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 all services, facilities,
equipment and personnel, and for other costs of the Adviser hereunder, the
Company shall pay to the Adviser, from the assets of the respective Fund, a
monthly investment advisory fee equivalent on an annual basis to .10% of the
average daily net assets of the Fund.
For purposes of the calculation of such fee, "average daily net assets" for
a particular period shall be determined on the basis of the Fund's net assets as
determined as of the close of each business day of the month pursuant to the
currently effective prospectus of the Fund. Such fee shall be payable on the
fifth day of each calendar month for services performed hereunder during the
preceding month. If the Fund commences operations after the beginning of a month
or this agreement terminates prior to the end of a month, such fee shall be
pro-rated according to the proportion which such portion of the month bears to
the full month.
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, the Fund shall
pay all its costs and expenses which are not assumed by the Adviser. These Fund
expenses include, by way of example, but not by way of limitation, fees of the
directors who are not employees of the investment adviser or sub-adviser 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 Voyageur Fund Distributors,
Inc. (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 the Fund's custodian, and bookkeeping,
auditing and legal expenses. The 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, reports and statements to shareholders.
(b) The Underwriter shall bear all advertising and promotional expenses in
connection with the distribution of the Fund's shares, including paying for
prospectuses for new shareholders, except that the Fund may use its assets to
finance costs incurred in connection with the distribution of its shares
pursuant to a Plan of Distribution adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (as amended, the "Act").
4. LIMIT ON EXPENSES. If the total expenses of the Fund for any fiscal year
(including the fees payable to the Adviser but excluding interest, taxes,
brokerage commissions or other costs of acquiring or disposing of any of the
Fund's portfolio securities, distribution fees, litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary course of
the Fund's business, all to the extent permitted by applicable state law and
regulation) exceed any expense limitation imposed by applicable state law, the
Adviser shall reimburse the Fund for such excess in the manner and to the extent
required by applicable state law; provided, however, that at no time shall the
Adviser be required to make reimbursements for any fiscal period in excess of
fees received pursuant to Section 2 hereof for that same period.
5. FREEDOM TO DEAL WITH THIRD PARTIES. The Adviser 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.
6. REPORTS TO DIRECTORS OF THE FUND. Appropriate officers of the Adviser
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 the Fund
pursuant to Rule 12b-1 under the Act.
7. EFFECTIVE DATE, DURATION AND TERMINATION OF Agreement. This Agreement
shall become effective with respect to the Fund on the effective date of the
post-effective amendment to the Company's Registration Statement on Form N1-A
first registering shares of the Fund. Wherever referred to in this Agreement,
the vote or approval of the holders of a majority of the outstanding shares of
the Fund shall mean the lesser of (i) the vote of 67% or more of the voting
shares of the 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 the Fund.
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 (i) by the Board of Directors of the
Company or by the vote of a majority of the outstanding voting securities of the
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 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, 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 Fund, or by the
Adviser, upon sixty (60) days written notice to the other party. 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 upon completion
of the dissolution, liquidation and winding up of the Fund.
8. LIMITATION OF LIABILITY. The Adviser will not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund or its
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.
9. AMENDMENTS TO AGREEMENT. No material amendment to this Agreement shall
be effective until approved by the vote of: (i) the 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 or of the Company cast in person at a meeting
called for the purpose of voting on such approval; and (ii) the holders of a
majority of the outstanding shares of the Fund.
10. 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 the Adviser have caused this Agreement
to be executed by their duly authorized officers as of the day and year
indicated below.
VOYAGEUR FUNDS, INC.
Date: By:
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Title:
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CADRE CONSULTING SERVICES, INC.
Date: By
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Title:
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