INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between VOYAGEUR MUTUAL FUNDS, a Delaware business
trust (the "Trust") severally on behalf of each series of shares of beneficial
interest of the Trust that is listed on Exhibit A to this Agreement, as that
Exhibit may be amended from time to time (each such series of shares is
hereinafter referred to as a "Fund" and, together with other series of shares
listed on such Exhibit, the "Funds"), and DELAWARE MANAGEMENT COMPANY, a series
of Delaware Management Business Trust (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Trust has been organized and operates as an investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, each Fund engages in the business of investing and reinvesting its
assets in securities; and
WHEREAS, the Investment Manager is registered under the Investment Advisers
Act of 1940 as an investment adviser and engages in the business of providing
investment management services; and
WHEREAS, the Trust, severally on behalf of each Fund, and the Investment
Manager desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Trust hereby employs the Investment Manager to manage the investment
and reinvestment of each Fund's assets and to administer the Trust's affairs,
subject to the direction of the Trust's Board of Trustees and officers for the
period and on the terms hereinafter set forth. The Investment Manager hereby
accepts such employment and agrees during such period to render the services and
assume the obligations herein set forth for the compensation herein provided.
The Investment Manager shall for all purposes herein be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the Trust in any way, or
in any way be deemed an agent of the Trust. The Investment Manager shall
regularly make decisions as to what securities and other instruments to purchase
and sell on behalf of each Fund and shall effect the purchase and sale of such
investments in furtherance of each Fund's objectives and policies and shall
furnish the Board of Trustees of the Trust with such information and reports
regarding each Fund's investments as the Investment Manager deems appropriate or
as the Trustees of the Trust may reasonably request.
2. The Trust shall conduct its own business and affairs and shall bear the
expenses and salaries necessary and incidental thereto, including, but not in
limitation of the foregoing, the costs incurred in: the maintenance of its
corporate existence; the maintenance of its own books, records and procedures;
dealing with its own shareholders; the payment of dividends; transfer of shares,
including issuance, redemption and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders' and Trustees' meetings; miscellaneous office expenses; brokerage
commissions; custodian fees; legal and accounting fees; taxes; and federal and
state registration fees. Directors, trustees, officers and employees of the
Investment Manager may be directors, trustees, officers and employees of any of
the investment companies within the Delaware Investments family (including the
Trust). Directors, trustees, officers and employees of the Investment Manager
who are
directors, trustees, officers and/or employees of these investment companies
shall not receive any compensation from such companies for acting in such dual
capacity.
In the conduct of the respective businesses of the parties hereto and in
the performance of this Agreement, the Trust and Investment Manager may share
facilities common to each, which may include legal and accounting personnel,
with appropriate proration of expenses between them.
3. (a) Subject to the primary objective of obtaining the best execution,
the Investment Manager will place orders for the purchase and sale of portfolio
securities and other instruments with such broker/dealers selected who provide
statistical, factual and financial information and services to the Trust, to the
Investment Manager, to any sub-adviser (as defined in Paragraph 5 hereof, a
"Sub-Adviser") or to any other fund for which the Investment Manager or any
Sub-Adviser provides investment advisory services and/or with broker/dealers who
sell shares of the Trust or who sell shares of any other investment company (or
series thereof) for which the Investment Manager or any Sub-Adviser provides
investment advisory services. Broker/dealers who sell shares of any investment
companies or series thereof for which the Investment Manager or Sub-Adviser
provide investment advisory services shall only receive orders for the purchase
or sale of portfolio securities to the extent that the placing of such orders is
in compliance with the Rules of the Securities and Exchange Commission and NASD
Regulation, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and
subject to such policies and procedures as may be adopted by the Board of
Trustees and officers of the Trust, the Investment Manager may cause a Fund to
pay a member of an exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for effecting that
transaction, in such instances where the Investment Manager has determined in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the Investment
Manager's overall responsibilities with respect to the Trust on behalf of the
Funds and to other investment companies (or series thereof) and other advisory
accounts for which the Investment Manager or any Sub-Adviser exercises
investment discretion.
4. As compensation for the services to be rendered to a particular Fund by
the Investment Manager under the provisions of this Agreement, that Fund shall
pay monthly to the Investment Manager exclusively from that Fund's assets, a fee
based on the average daily net assets of that Fund during the month. Such fee
shall be calculated in accordance with the fee schedule applicable to that Fund
as set forth in Exhibit A hereto, which Exhibit may be amended from time to time
as provided in Paragraphs 10(b) and (c) of this Agreement.
If this Agreement is terminated prior to the end of any calendar month with
respect to a particular Fund, the management fee for such Fund shall be prorated
for the portion of any month in which this Agreement is in effect with respect
to such Fund according to the proportion which the number of calendar days
during which the Agreement is in effect bears to the number of calendar days in
the month, and shall be payable within 10 calendar days after the date of
termination.
5. The Investment Manager may, at its expense, select and contract with one
or more investment advisers registered under the Investment Advisers Act of 1940
("Sub-Advisers") to perform some or all of the services for a Fund for which it
is responsible under this Agreement. The Investment Manager will compensate any
Sub-Adviser for its services to the Fund. The Investment Manager may terminate
the services of any Sub-Adviser at any time in its sole discretion, and shall at
such time assume the responsibilities of such Sub-Adviser unless and until a
successor Sub-Adviser is selected and the
-2-
requisite approval of the Fund's shareholders is obtained. The Investment
Manager will continue to have responsibility for all advisory services furnished
by any Sub-Adviser.
6. The services to be rendered by the Investment Manager to the Trust on
behalf of each Fund under the provisions of this Agreement are not to be deemed
to be exclusive, and the Investment Manager shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
7. The Investment Manager, its directors, trustees, officers, employees,
agents and shareholders may engage in other businesses, may render investment
advisory services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to the
Trust or to any other investment company, corporation, association, firm or
individual.
8. It is understood and agreed that so long as the Investment Manager
and/or its advisory affiliates shall continue to serve as the investment adviser
to any of the Trust's Funds, other investment companies as may be sponsored or
advised by the Investment Manager or its affiliates shall have the right
permanently to adopt and to use the words "Delaware," "Delaware Investments" or
"Delaware Group" in their names and in the names of any series or class of
shares of such funds.
9. In the absence of willful misfeasance, bad faith, gross negligence, or a
reckless disregard of the performance of its duties as the Investment Manager to
the Trust on behalf of any Fund, the Investment Manager shall not be subject to
liability to the Trust or to any Fund or to any shareholder of the Trust for any
action or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security, or otherwise.
10. (a) This Agreement shall be executed and become effective as of the
date written below, and shall become effective with respect to a particular Fund
as of the effective date set forth in Exhibit A for that Fund, only if approved
by the vote of a majority of the outstanding voting securities of that Fund. It
shall continue in effect for an initial period of two years for each Fund and
may be renewed thereafter only so long as such renewal and continuance is
specifically approved at least annually by the Board of Trustees or by the vote
of a majority of the outstanding voting securities of that Fund and only if the
terms and the renewal hereof have been approved by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party ("Independent Trustees"), cast in person at a meeting called for the
purpose of voting on such approval.
(b) Except as provided in Paragraph 10(c) below, no amendment to this
Agreement (or to Exhibit A hereto) shall be effective with respect to any Fund
unless approved by: (i) a majority of the Trustees of the Trust, including a
majority of Independent Trustees; and (ii) a majority of the outstanding voting
securities of the particular Fund. Any such amendment that pertains to a Fund
will not change, or otherwise affect the applicability of, this Agreement with
respect to other Funds.
(c) The Agreement (and Exhibit A hereto) may be amended with respect
to a Fund without the approval of a majority of the outstanding voting
securities of that Fund if the amendment relates solely to a management fee
reduction or other change that is permitted or not prohibited under federal law,
rule, regulation or SEC staff interpretation thereof to be made without
shareholder approval. This Agreement may be amended from time to time to add or
remove one or more Funds, or to reflect changes in management fees, by an
amendment to Exhibit A hereto executed by the Trust and the Investment Manager.
Any such amendment that pertains to a Fund will not change, or otherwise affect
the applicability of, this Agreement with respect to other Funds.
-3-
(d) This Agreement may be terminated as to any Fund by the Trust at
any time, without the payment of a penalty, on sixty days' written notice to the
Investment Manager of the Trust's intention to do so, pursuant to action by the
Board of Trustees of the Trust or pursuant to the vote of a majority of the
outstanding voting securities of the affected Fund. The Investment Manager may
terminate this Agreement at any time, without the payment of a penalty, on sixty
days' written notice to the Fund of its intention to do so. Upon termination of
this Agreement, the obligations of all the parties hereunder shall cease and
terminate as of the date of such termination, except for any obligation to
respond for a breach of this Agreement committed prior to such termination, and
except for the obligation of the Trust on behalf of a Fund to pay to the
Investment Manager the fee provided in Paragraph 4 hereof, prorated to the date
of termination. This Agreement shall automatically terminate in the event of its
assignment.
11. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
12. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested persons"; and "assignment" shall
have the meaning defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers and duly attested as of the ____ day of
November, 1999.
DELAWARE MANAGEMENT COMPANY, VOYAGEUR MUTUAL FUNDS
a series of Delaware Management Business Trust on behalf of the Funds listed on Appendix A
By: _________________________________________ By: _________________________________________
Name: _______________________________________ Name: _______________________________________
Title: ______________________________________ Title: ______________________________________
Attest: _____________________________________ Attest: _____________________________________
Name: _______________________________________ Name: _______________________________________
Title: ______________________________________ Title: ______________________________________
-4-
EXHIBIT A
THIS EXHIBIT to the Investment Management Agreement between VOYAGEUR MUTUAL
FUNDS and DELAWARE MANAGEMENT COMPANY, a series of Delaware Management Business
Trust (the "Investment Manager") entered into as of the ____ day of November,
1999 (the "Agreement") lists the Funds for which the Investment Manager provides
investment management services pursuant to this Agreement, along with the
management fee rate schedule for each Fund and the date on which the Agreement
became effective for each Fund.
Management Fee Schedule
(as a percentage of
average daily net assets)
Fund Name Effective Date Annual Rate
--------- -------------- -------------------------
Delaware Tax-Free 0.55% on first $500 million
Arizona Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million
Delaware Tax-Free 0.55% on first $500 million
California Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million
Delaware Tax-Free 0.55% on first $500 million
Idaho Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million
Delaware Tax-Free 0.55% on first $500 million
Iowa Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million
Delaware Tax-Free 0.55% on first $500 million
Montana Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million
Delaware Minnesota 0.55% on first $500 million
High Yield Municipal Bond Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million
-5-
Management Fee Schedule
(as a percentage of
average daily net assets)
Fund Name Effective Date Annual Rate
--------- -------------- -------------------------
Delaware National High 0.55% on first $500 million
Yield Municipal Bond Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million
Delaware Tax-Free 0.55% on first $500 million
New York Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million
Delaware Tax-Free 0.55% on first $500 million
Wisconsin Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million
-6-
