EX-99.B5B
SUB-ADVISORY AGREEMENT
Agreement, dated as of April 30, 1997, by and between
Delaware Management Company, Inc. ("Adviser"), a Delaware corporation, and
Voyageur Asset Management LLC, a Delaware limited liability company
("Sub-Adviser").
WHEREAS, Voyageur Funds, Inc., a Minnesota
corporation (the "Company"), on behalf of the Voyageur U.S. Government
Securities Fund, a separately managed series of the Company (the "Fund"), has
appointed Adviser as the Fund's investment adviser pursuant to an Investment
Advisory Agreement dated as of April 30, 1997 (the "Advisory Agreement"); and
WHEREAS, pursuant to the terms of the Advisory
Agreement, Adviser desires to appoint Sub-Adviser as its sub-adviser for the
Fund, and Sub-Adviser is willing to act in such capacity upon the terms set
forth herein; and
WHEREAS, pursuant to the terms of the Advisory
Agreement, the Board of Directors and shareholders of the Company have approved
the appointment of Sub-Adviser as a sub-adviser for the Fund.
NOW, THEREFORE, in consideration of the mutual
agreements herein made, Adviser and Sub-Adviser agree as follows:
1. Adviser hereby employs Sub-Adviser to serve as
sub-adviser for, and to manage the investment of the assets of, the Fund as set
forth herein. Sub-Adviser hereby accepts such employment and agrees, for the
compensation herein provided, to assume all obligations herein set forth and to
bear all expenses of its performance of such obligations (but no other
expenses). Sub-Adviser shall not be required to pay expenses of the Fund,
including, but not limited to (a) brokerage and commission expenses; (b)
federal, state, local and foreign taxes, including issue and transfer taxes,
incurred by or levied on the Fund; (c) interest charges on Fund borrowings; (d)
the Fund's organizational and offering expenses, whether or not advanced by
Adviser; (e) the cost of other personnel providing services to the Fund; (f)
fees and expenses of registering or otherwise qualifying the shares of the Fund
under applicable state securities laws; (g) expenses of printing and
distributing reports to shareholders; (h) costs of shareholders' meetings and
proxy solicitation; (i) charges and expenses of the Fund's custodian and
registrar, transfer agent and dividend disbursing agent; (j) compensation of the
Company's officers, directors and employees that are not Affiliated Persons or
Interested Persons (as defined in Section 2(a)(19) of the Investment Company Act
of 1940, as amended (the "1940 Act"), and the rules, regulations and releases
relating thereto) of Adviser; (k) legal and auditing expenses of the Fund; (1)
costs of certificates representing common shares of the Fund; (m) costs of Fund
stationery and supplies; (n) insurance expenses of the Fund; (o) association
membership dues of the Fund; (p) the fees and expenses of registering the Fund
and its shares with the Securities and Exchange Commission; (q) travel expenses
of officers and employees of Sub-Adviser to the extent such expenses relate to
the attendance of such persons at meetings at the request of the Board of
Directors of the
Company; and (r) all other charges and costs of the Fund's operation unless
otherwise explicitly provided herein. Sub-Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise) have no authority to act
for or on behalf of the Fund in any way or otherwise be deemed an agent of the
Fund.
2. Sub-Adviser shall direct the Fund's investments in
accordance with applicable law, applicable provisions of the Articles of
Incorporation and Bylaws (which shall be provided to the Sub-Adviser on the date
hereof and any changes thereto shall be promptly provided to the Sub-Adviser
thereafter), and the investment objective, policies and restrictions set forth
in the Fund's then-effective Registration Statement under the Securities Act of
1933, as amended, including the Prospectus and Statement of Additional
Information of the Fund contained therein, subject to the supervision of the
Company, its officers and directors, and Adviser and in accordance with the
investment objectives, policies and restrictions from time to time prescribed by
the Board of Directors of the Company and communicated by Adviser to Sub-Adviser
and subject to such further limitations as Adviser may from time to time impose
by written notice to Sub-Adviser.
3. Sub-Adviser shall formulate and implement a
continuing program for managing the investment of the Fund's assets, and shall
amend and update such program from time to time as financial and other economic
conditions warrant. Sub-Adviser shall make all determinations with respect to
managing the investment of the Fund's assets and shall take such steps as may be
necessary to implement the same, including the placement of purchase and sale
orders on behalf of the Fund.
4. Sub-Adviser shall furnish such reports to Adviser
as Adviser may reasonably request for Adviser's use in discharging its
obligations under the Advisory Agreement, which reports may be distributed by
Adviser to the Company's Board of Directors at periodic meetings of the Board of
Directors and at such other times as may be reasonably requested by the Board of
Directors. Copies of all such reports shall be furnished to Adviser for
examination and review within a reasonable time prior to the presentation of
such reports to Company's Board of Directors.
5. Sub-Adviser shall select the brokers and dealers
that will execute the purchases and sales of securities for the Fund and markets
on or in which such transactions will be executed and shall place, in the name
of the Fund or its nominee, all such orders.
(a) Subject to the primary objective of obtaining the
best available prices and execution, Sub-Adviser will
place orders for the purchase and sale of portfolio
securities with such broker/dealers who provide
statistical, factual and financial information and
services to the Fund, to Adviser, to Sub-Adviser or
to any other fund for which Adviser or Sub Adviser
provides investment advisory services and/or with
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broker/dealers who sell shares of the Fund or who
sell shares of any other fund for which Adviser or
Sub-Adviser provides investment advisory services.
Broker/dealers who sell shares of the funds for which
Adviser or Sub-Adviser provides 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
the National Association of Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph
(a) above, and subject to such policies and
procedures as may be adopted by the Board of
Directors and officers of the Company, Sub-Adviser
may ask the Fund and the Fund may agree 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 Fund and Sub-Adviser have 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 Sub-Adviser's overall responsibilities
with respect to the Fund and to other funds and other
advisory accounts for which Adviser or Sub-Adviser
exercises investment discretion.
(c) It is understood that certain other clients of
Sub-Adviser may have investment objectives and
policies similar to those of the Fund, and that
Sub-Adviser may, from time to time, make
recommendations that result in the purchase or sale
of a particular security by its other clients
simultaneously with the Fund. If transactions on
behalf of more than one client during the same period
increase the demand for securities being purchased or
the supply of securities being sold, there may be an
adverse effect on price or quantity. In such event,
Sub-Adviser shall allocate advisory recommendations
and the placing of orders in a manner that is deemed
equitable by Sub-Adviser to the accounts involved,
including the Fund. When two or more of the clients
of Sub-Adviser (including the Fund) are purchasing or
selling the same security on a given day from the
same broker or dealer, such transactions may be
averaged as to price.
(d) Sub-Adviser agrees that it will not purchase or
sell securities for the Fund in any transaction in
which it, Adviser or any "affiliated person" of the
Company, Adviser or Sub-Adviser or any affiliated
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person of such "affiliated person" is acting as
principal; provided, however, that Sub-Adviser may
effect transactions pursuant to Rule 17a-7 under the
1940 Act in compliance with the Fund's then-effective
policies concerning such transactions.
(e) Sub-Adviser agrees that it will not execute any
portfolio transactions for the Fund with a broker or
dealer or futures commission-merchant which is an
"affiliated person" of the Company, Adviser or
Sub-Adviser or an "affiliated person" of such an
"affiliated person" without the prior written consent
of Adviser. In effecting any such transactions with
the prior written consent of Adviser, Sub-Adviser
shall comply with Section 17(e)(1) of the 1940 Act,
other applicable provisions of the 1940 Act, if any,
the then-effective Registration Statement of the Fund
under the Securities Act of 1933, as amended, and the
Fund's then-effective policies concerning such
transactions.
(f) Sub-Adviser shall promptly communicate to Adviser
and, if requested by Adviser, to the Company's Board
of Directors, such information relating to portfolio
transactions as Adviser may reasonably request. The
parties understand that the Fund shall bear all
brokerage commissions in connection with the
purchases and sales of portfolio securities for the
Fund and all ordinary and reasonable transaction
costs in connection with purchases of such securities
in private placements and subsequent sales thereof.
6. Sub-Adviser may (at its cost except as
contemplated by paragraph 5 of this Agreement) employ, retain or otherwise avail
itself of the services and facilities of persons and entities within its own
organization or any other organization for the purpose of providing Sub-Adviser,
Adviser or the Fund with such information, advice or assistance, including but
not limited to advice regarding economic factors and trends and advice as to
transactions in specific securities, as Sub-Adviser may deem necessary,
appropriate or convenient for the discharge of its obligations hereunder or
otherwise helpful to Adviser or the Fund, or in the discharge of Sub-Adviser's
overall responsibilities with respect to the other accounts for which it serves
as investment manager or investment adviser.
7. Sub-Adviser shall cooperate with and make
available to Adviser, the Fund and any agents engaged by the Fund, Sub-Adviser's
expertise relating to matters affecting the Fund.
8. For the services to be rendered under this
Agreement, and the facilities to be furnished for each fiscal year of the Fund,
Adviser shall pay to Sub-Adviser a monthly management fee at the annual rate of
0.25% of the Fund's average daily net assets. This fee will be computed based on
the average of the net assets of the Fund as of the close of
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each business day, calculated as set forth in the Advisory Agreement, and will
be paid to Sub-Adviser monthly on or before the fifteenth day of the month next
succeeding the month for which the fee is paid. The fee shall be prorated for
any fraction of a fiscal year at the commencement and termination of this
Agreement.
Pursuant to the Advisory Agreement, Adviser receives
monthly from the Fund compensation at the annual rate of 0.50% of the Fund's
average daily net assets. If Adviser or any affiliate of Adviser has undertaken
in the Fund's Registration Statement as filed under the 1940 Act or elsewhere to
waive all or part of its fee under the Advisory Agreement or any other agreement
with the Fund and/or to pay certain Fund expenses, or to reduce any such fee
upon order of the Board of Directors or the vote of a majority of the
outstanding voting securities of the Fund, Sub-Adviser's fee payable under this
Agreement will be proportionately waived or reduced, such that Sub-Adviser's fee
would be in an amount equal to one-half of the compensation actually received by
Adviser, after taking into account all such waivers or payments of Fund expenses
by Adviser or any of its affiliates.
9. Sub-Adviser represents, warrants and agrees that:
(a) Sub-Adviser is registered as an "investment
adviser" under the Investment Advisers Act of 1940
("Advisers Act") and is currently in compliance and
shall at all times continue to comply with the
requirements imposed upon it by Advisers Act and
other applicable laws and regulations. Sub-Adviser
agrees to (i) supply Adviser with such documents as
Adviser may reasonably request to document compliance
with such laws and regulations and (ii) immediately
notify Adviser of the occurrence of any event which
would disqualify Sub-Adviser from serving as an
investment adviser of an investment company pursuant
to any applicable law or regulation.
(b) Sub-Adviser will maintain, keep current and
preserve on behalf of the Company all records
required or permitted by the 1940 Act in the manner
provided by such Act. Sub-Adviser agrees that such
records are the property of the Company, and will be
surrendered to the Company promptly upon request.
(c) Sub-Adviser will complete such reports concerning
purchases or sales of securities on behalf of
Sub-Adviser as Adviser may from time to time require
to document compliance with the 1940 Act, Advisers
Act, the Internal Revenue Code, applicable state
securities laws and other applicable laws and
regulations or regulatory and taxing authorities in
countries other than the United States.
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(d) Sub-Adviser has furnished Adviser with a copy of
Sub-Adviser's currently effective Form ADV. After
filing with the Securities and Exchange Commission
any amendment to its Form ADV, Sub-Adviser will
promptly furnish a copy of such amendment to Adviser.
(e) Sub-Adviser will immediately notify Adviser of
the occurrence of any event which would disqualify
Sub-Adviser from serving as an investment adviser of
an investment company pursuant to Section 9 of the
1940 Act or any other applicable statute or
regulation.
10. Adviser represents, warrants and agrees that:
(a) It has been duly authorized by the Board
of Directors of the Company to delegate to
Sub-Adviser the provision of the services
contemplated hereby.
(b) Adviser and the Company are currently in
compliance and shall at all times continue
to comply with the requirements imposed upon
Adviser and the Company by applicable law
and regulations.
11. Sub-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.
12. This Agreement shall become effective on May 1,
1997. Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities or shares of the Fund
shall mean (a) the vote of 67% or more of the voting securities of such Fund
present at such meeting if the holders of more than 50% of the outstanding
voting securities of the Fund are present in person or by proxy, or (b) the vote
of more than 50% of the outstanding voting securities of the Fund, whichever is
less.
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 (a) by the Board of
Directors of the Company or by the vote of a majority of the outstanding voting
securities of the Fund, and (b) by the vote of a majority of the directors of
the Company who are not parties to this Agreement or Interested Persons of
Adviser, Sub-Adviser or the Company, cast in person at a meeting called for the
purpose of voting on such approval.
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This Agreement may be terminated at any time without
the payment of any penalty (a) by the vote of the Board of Directors of the
Company or by the vote of the holders of a majority of the outstanding voting
securities of the Fund, upon 60 days' written notice to Adviser and the
Sub-Adviser, or (b) by Adviser, upon 60 days' written notice to the Sub-Adviser;
or (c) by the Sub-Adviser, upon 60 days' written notice to Adviser. This
Agreement shall automatically terminate in the event of its assignment as
defined in the 1940 Act 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 or
winding up of the Fund. This Agreement shall automatically terminate upon the
termination of the Advisory Agreement.
13. No amendment to or modification of this Agreement
shall be effective unless and until approved by the vote of a majority of the
outstanding shares of the Fund.
14. This Agreement shall be binding upon, and inure
to the benefit of, Adviser and Sub-Adviser, and their respective successors.
15. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
16. To the extent that state law is not preempted by
the provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended
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from time to time, this Agreement shall be administered, construed and enforced
according to the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed by their officers thereunto duly authorized in
multiple counterparts, each of which shall be an original but all of which shall
constitute one of the same instrument.
DELAWARE MANAGEMENT COMPANY, INC.
By /s/ Xxxxxx X. Xxxxxxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxxxxxx, Xx.
Title: Senior Vice President
VOYAGEUR ASSET MANAGEMENT LLC
By /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Secretary
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