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EXHIBIT 99.B6AI
VOYAGEUR MUTUAL FUNDS III, INC.
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this 30th day of
April, 1997, by and between VOYAGEUR MUTUAL FUNDS III, INC., a Minnesota
corporation (the "Company"), for and on behalf of each series of the Company
(each series is referred to hereinafter as a "Fund"), and Voyageur Fund
Distributors, Inc., a Minnesota corporation (the "Underwriter"). This Agreement
shall apply to each class of shares offered by the following Funds:
Voyageur Growth Stock Fund (currently offering shares of Classes A, B
and C) Voyageur Aggressive Growth Fund (currently offering shares of
Classes A, B and C) Voyageur Tax Efficient Equity Fund (currently
offering shares of Classes A, B and C)
WITNESSETH:
WHEREAS, the Company is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), and
WHEREAS, the Underwriter is engaged in the business of
promoting the distribution of the securities of investment companies, and
WHEREAS, the Company and the Underwriter were the parties to
an agreement dated as of September 1, 1995 (the "Prior Distribution Agreement")
under which the Underwriter acted as underwriter of each class of shares of the
Funds, and
WHEREAS, on the date of this Agreement, the indirect parent
company of the Underwriter completed a merger transaction which resulted in a
change of control of the Underwriter and an automatic termination of the Prior
Distribution Agreement, and
WHEREAS, the Board of Directors of the Company has determined
to enter into a new agreement with the Underwriter as of the date hereof,
pursuant to which the Underwriter shall continue to serve as a principal
underwriter, together with Delaware Distributors, L.P. ("DDLP"), which serves as
co-principal underwriter pursuant to a separate agreement with the Company, of
the shares of each class of the Funds, on the conditions set forth below. (The
Underwriter and DDLP may be referred to herein as the "Co-Underwriters.")
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
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1. UNDERWRITING SERVICES
The Company, on behalf of each Fund, hereby engages the Underwriter,
and the Underwriter hereby agrees to act, as 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.
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 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 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 Company 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 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 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.
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(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.
3. QUALIFICATION 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 each 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 time 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 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.
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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, 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 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, 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 Company'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 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 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
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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 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.
(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 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 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 Company.
(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 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 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 Company.
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
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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:
(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 each 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 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
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 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
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 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 shall be May 1, 1997. 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.
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(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 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 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 Directors
of the Company 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.
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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 MUTUAL FUNDS III, INC.
By /s/ Xxxxxx X. Xxxxxxxxxxx
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Its Senior Vice President
VOYAGEUR FUND DISTRIBUTORS, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
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Its Managing Director
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