VOYAGEUR FUNDS, INC.
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day September 1994,
by and between Voyageur Funds, Inc., a Minnesota corporation (the "Company"),
for and on behalf of its sole series, Voyageur U.S. Government Securities Fund
(the "Fund"), and Voyageur Fund Distributors, Inc., a Minnesota corporation (the
"Underwriter"). This Agreement shall apply to the Class A, B, C and Y shares of
the Fund.
WITNESSETH:
1. UNDERWRITING SERVICES
The Company, on behalf of the Fund, hereby engages the Underwriter, and the
Underwriter hereby agrees to act, as principal underwriter for the Fund in the
sale and distribution of the shares of each class of the 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.
2. SALE OF SHARES
The shares of the 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 Company. Any offer for or sale of shares shall be
conclusively presumed to have been accepted by the Company if the
Company 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 Company of notice of such offer
or sale.
(b) No share of the 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 the
Fund may, at the discretion of the Company and the Underwriter, be
reduced or eliminated as permitted by the Investment Company Act of
1940, and the rules and regulations thereunder, as they may be amended
from time to time (the "1940 Act"), provided that such reduction or
elimination shall be set forth in the Prospectus for such class, and
provided that the Company 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 Company and the Underwriter, 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 the Fund and to determine the suitability of each available class
as an investment for each such prospective investor.
3. REGISTRATION OF SHARES
The Company agrees to make prompt and reasonable efforts to effect and keep
in effect, at its expense, the registration or qualification of the Fund's
shares for sale in such jurisdictions as the Company may designate.
4. INFORMATION TO BE FURNISHED TO THE UNDERWRITER
The Company agrees that it will furnish the Underwriter with such
information with respect to the affairs and accounts of the Company (and each
Fund or class thereof) as the Underwriter may from time to time reasonably
require, and further agrees that the Underwriter, at all reasonable times, shall
be permitted to inspect the books and records of the Company.
5. ALLOCATION OF EXPENSES
During the period of this Agreement, the Company shall pay or cause to be
paid all expenses, costs and fees incurred by the Company which are not assumed
by the Underwriter. The Underwriter agrees to provide, and shall pay costs which
it incurs in connection with providing, administrative or accounting services to
shareholders of the 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 the 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 Fund's investment adviser or transfer
agent. The Underwriter shall also pay all costs of distributing the shares of
the Fund ("Distribution Expenses"). Distribution Expenses include, but are not
limited to, initial and ongoing sales compensation (in addition to sales loads)
paid to investment executives of the Underwriter 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 Underwriter's 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:
(a) The Underwriter shall be entitled to receive or retain any front-end
sales charge imposed in connection with sales of shares of the 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 Company 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 Company.
(b) The Underwriter shall be entitled to receive or retain any contingent
deferred sales charge imposed in connection with any redemption of shares of the
Fund, as set forth in the applicable current Prospectus.
(c) Pursuant to the Company's Plan of Distribution adopted in accordance
with Rule 12b-1 under the 1940 Act (the "Plan"):
(i) Class A and Class Y of the Fund are each obligated to pay the
Underwriter 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 Company's Board of
Directors. Until further action by the Board of Directors, all of such fee
shall be designated and payable as a Shareholder Servicing Fee.
(ii) Class B and Class C of the Fund are each obligated to pay the
Underwriter 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 Company's Board of
Directors. Until further action by the Board of Directors, a portion of
such total fee equal to .25% per annum of the average daily net assets of
each 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 to the Underwriter
under the Plan may exceed or be less than the Underwriter's actual Distribution
Expenses and Shareholder Servicing Costs. In the event such Distribution
Expenses and Shareholder Servicing Costs exceed amounts payable to the
Underwriter under the Plan, the Underwriter shall not be entitled to
reimbursement by the Company.
(d) In each year during which this Agreement remains in effect, the
Underwriter will prepare and furnish to the Board of Directors of the Company,
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, 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 the Fund or the Company.
8. SUBSCRIPTION FOR SHARES--REFUND FOR CANCELLED ORDERS
The Underwriter shall subscribe for the shares of the 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 the Fund is placed with the Underwriter by a customer or dealer and
subsequently cancelled, 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:
(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 COMPANY
The Underwriter agrees to indemnify the Fund and the Company 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 the Fund by the Underwriter. In the event of the
threat or institution of any such litigation or legal proceedings against the
Fund, the Underwriter shall defend such action on behalf of the Fund or the
Company 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 the 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
Company to the Underwriter, or to the Underwriter by a director, officer, or
employee of the Company 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 or the Fund's investment
adviser without recourse to the Fund or the Company 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 is set forth in the first
paragraph of this Agreement. 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
Directors of the Company, and of the directors who are not "interested persons"
(as defined in the provisions of the 0000 Xxx) of the Company 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 the Fund
or any class thereof, without the payment of any penalty, by the vote of a
majority of the members of the Board of Directors of the Company who are not
"interested persons" (as defined in the provisions of the 0000 Xxx) of the
Company and who 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 the 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 the Fund (or class
thereof) shall mean the lesser of (i) the vote of 67% or more of the voting
securities of the 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
the 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 Directors of the
Company who are not "interested persons" (as defined in the provisions of the
0000 Xxx) 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 Company 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 FUNDS, INC.
By /s/ Xxx Xxxxxx
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Its /s/ Vice President
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VOYAGEUR FUND DISTRIBUTORS, INC.
By /s/Xxxxxxx X. Xxxxxx
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Its /s/ C.F.O.
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