Exhibit No. EX-99.7.a.ii
THIRD AMENDED AND RESTATED
FINANCIAL INTERMEDIARY
DISTRIBUTION AGREEMENT
Third Amended and Restated Financial Intermediary Distribution Agreement
(the "Agreement") effective as of the 1st of January, 2007, by and between
DELAWARE DISTRIBUTORS, L.P. ("DDLP"), Delaware limited partnership, and LINCOLN
FINANCIAL DISTRIBUTORS, INC. ("LFD"), a Connecticut corporation.
WITNESSETH
WHEREAS, DDLP serves as the distributor of a number of investment companies
(individually a "Fund" and, collectively, the "Funds" as listed on Appendix A as
such Appendix may be amended from time to time) registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), pursuant to distribution
agreements between each Fund and DDLP;
WHEREAS, pursuant to the aforementioned distribution agreements, each Fund
has engaged DDLP to promote the distribution of its shares and, in connection
therewith and as agent for the Fund and not as principal, to advertise, promote,
offer and sell the Fund's shares to the public;
WHEREAS, DDLP has previously entered into a Financial Intermediary
Distribution Agreement with LFD, as amended (the "Intermediary Agreement"),
pursuant to which LFD: (i) promotes the sale of the Funds' shares through
broker/dealers, financial advisers and other financial intermediaries
(collectively "Financial Intermediaries"); (ii) creates messaging and packaging
for certain non-regulatory sales and marketing materials related to the Funds;
and (iii) produces such non-regulatory sales and marketing materials related to
the Funds; and
WHEREAS, DDLP and LFD desire to revise certain terms under the Intermediary
Agreement and intend that this Agreement shall amend and restate in its entirety
the Intermediary Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. DDLP hereby engages LFD to promote the sale of shares of each Fund and each
investment portfolio thereof listed in Appendix A hereto (as revised from
time to time) through Financial Intermediaries, and to create and produce
non-regulatory sales and marketing materials related to the Funds as set
forth herein.
2. LFD agrees to use its best efforts to promote the sale of the Funds' shares
designated by DDLP to retail investors through Financial Intermediaries
wherever their sale is legal, in such places and in such manner, not
inconsistent with the law and the provisions of this Agreement and the
Funds' Registration Statements under the Securities Act of 1933, including
the Prospectuses and Statements of Additional Information contained
therein.
3. LFD represents and warrants that it is, and shall remain at all times
during the effectiveness of this Agreement, a broker/dealer registered
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and qualified under applicable state securities laws in each jurisdiction
in which LFD may be required to be qualified to act as a broker/dealer in
securities, and a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD"). DDLP represents and warrants that it
is, and shall remain at all times during the effectiveness of this
Agreement, a broker/dealer registered under the Exchange Act and qualified
under applicable state securities laws in each jurisdiction in which DDLP
may be required
to be qualified to act as a broker/dealer in securities, and a member in
good standing of the NASD.
4. DDLP will provide LFD with:
(a) copies of the current Prospectuses and Statements of Additional
Information for each Fund, including all supplements thereto;
(b) copies of each Fund's periodic reports to shareholders as soon as
reasonably practicable after DDLP receives such reports from the
Fund;
(c) technical language, data, and product content, and determinations
concerning product positioning recommendations and sales ideas
with respect to the Funds;
(d) Fund-related materials prepared by DDLP and designated for
internal use only (subject to the terms and conditions
established from time to time by DDLP); and
(e) prompt notice of the issuance by the Securities and Exchange
Commission (the "SEC") of any stop order suspending the
effectiveness of the Registration Statement of any Fund, or the
initiation of any proceedings for that purpose.
5. LFD shall create and produce non-regulatory, non-shareholder materials for,
about, or related to, the Funds ("Advertising Materials"). DDLP shall
provide product information to LFD, including information related to
product descriptions, strategic positioning and product management. LFD
shall use such information when developing the creative messaging, look and
feel, layout and packaging of the advertising materials. LFD agrees to
submit to DDLP, prior to its use, the form of any Advertising Materials
prepared by LFD and proposed to be generally disseminated by or for LFD,
all Advertising Materials prepared by LFD and proposed to be used by LFD,
and all Advertising Materials prepared by or for LFD for such dissemination
or for use by others in connection with the sale of the Funds' shares. LFD
also agrees that LFD will file or submit such Advertising Materials to the
NASD, SEC or other regulatory agency as from time to time may be
appropriate, considering practices then current in the industry. LFD agrees
not to use or to permit others to use such Advertising Materials without
the prior written consent of DDLP if any regulatory agency expresses
objection thereto or if DDLP delivers to LFD a written objection thereto.
LFD shall not be responsible for or authorized to prepare materials
relating to the Funds for the purpose of satisfying regulatory
requirements, including, but not limited to, Prospectuses and Statements of
Additional Information and periodic shareholder reports. DDLP and LFD agree
to work together in good faith to resolve any disagreements between DDLP
and LFD about or objections by DDLP to Advertising Materials prepared by
LFD.
6. The responsibility of LFD hereunder shall be limited to the promotion of
sales of the Funds' shares through Financial Intermediaries, and the
creation and production of non-regulatory sales and marketing materials.
The parties hereto acknowledge that DDLP will also be responsible for
supporting due diligence activities as they relate to product placements on
platforms of Lincoln Financial Group's key accounts. LFD is not empowered
to approve orders for sales of the Funds' shares or to accept payment for
such orders. Sales of a Fund's shares shall be deemed to be made when and
where accepted by the Fund's transfer agent on behalf of the Fund.
7. In consideration for the services provided by LFD under this Agreement,
DDLP shall pay LFD the compensation set forth on Schedule A to this
Agreement.
8. With respect to the apportionment of costs between DDLP and LFD associated
with activities with which both are concerned, the following will apply:
(a) DDLP will pay the costs incurred in printing and mailing copies
of Fund Prospectuses and shareholder reports to prospective
investors;
(b) DDLP will pay the costs of any additional copies of Fund
financial and other reports and other Fund literature supplied to
DDLP by the Fund for sales promotion purposes;
2
(c) DDLP will bear the expense of the Advertising Materials that
relate exclusively to the Funds;
(d) DDLP and LFD will jointly bear the expense of advertising and
promotional activities and materials relating both to the Funds
and to the other products distributed by LFD, the apportionment
of such expenses to be agreed upon by DDLP and LFD from time to
time; and
(e) The parties will agree to apportion other costs and expenses
between DDLP and LFD as necessary and as mutually agreed from
time to time.
9. Both DDLP and LFD may engage in other business, provided such other
business does not interfere with the performance by DDLP and LFD of their
respective obligations under this Agreement.
10. DDLP agrees to indemnify, defend and hold LFD harmless from and against any
and all losses, damages, or liabilities to which LFD may become subject by
reason of DDLP's willful misfeasance, bad faith, or gross negligence in the
performance of its duties under this Agreement. LFD agrees to indemnify,
defend and hold DDLP harmless from and against any and all losses, damages,
or liabilities to which DDLP may become subject by reason of LFD's willful
misfeasance, bad faith, or gross negligence in the performance of its
duties under this Agreement.
11. Copies of financial reports, Registration Statements and Prospectuses, as
well as demands, notices, requests, consents, waivers, and other
communications in writing which it may be necessary or desirable for either
party to deliver or furnish to the other will be duly delivered or
furnished, if delivered to such party at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000, or at such other address as DDLP or LFD may
designate in writing and furnish to the other.
12. This Agreement shall not be assigned, as that term is defined in the 1940
Act, by LFD and shall terminate automatically in the event of its attempted
assignment by LFD. This Agreement will automatically terminate with respect
to a Fund upon the termination of the distribution agreement between DDLP
and the Fund. This Agreement will automatically terminate with respect to
all Funds in the event that LFD ceases to be a broker/dealer registered
under the Exchange Act or a member in good standing of the NASD. Except as
specifically provided in the indemnification provision contained in
Paragraph 10 herein, this Agreement and all conditions and provisions
hereof are for the sole and exclusive benefit of the parties hereto and
their legal successors and no express or implied provision of this
Agreement is intended or shall be construed to give any person other than
the parties hereto and their legal successors any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provisions
herein contained.
13. (a) This Agreement shall remain in force with respect to a Fund for a
period of two years from the date hereof and from year to year
thereafter, but only so long as such continuance is specifically
approved at least annually by the Board of Directors/Trustees of the
Fund or by vote of a majority of the outstanding voting securities of
the Fund and only if the terms and the renewal thereof have been
approved by the vote of a majority of the Directors/Trustees of the
Fund who are not parties hereto or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on
such approval.
3
(b) LFD may terminate this Agreement at any time by giving DDLP written
notice of its intention to terminate the Agreement at the expiration
of three months from the date of delivery of such written notice of
intention to DDLP.
(c) DDLP may terminate this Agreement at any time upon prior written
notice to LFD of its intention to so terminate at the expiration of
three months from the date of the delivery of such written notice to
LFD.
(d) The Board of Directors/Trustees of a Fund may terminate this Agreement
with respect to the Fund at any time upon prior written notice to DDLP
and/or LFD of its intention to so terminate at the expiration of three
months from the date of delivery of such written notice to DDLP and/or
LFD.
14. The validity, interpretation and construction of this Agreement, and of
each part hereof, will be governed by the laws of the Commonwealth of
Pennsylvania.
15. In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of the
Agreement, which shall continue to be in force.
DELAWARE DISTRIBUTORS, X.X. XXXXXXX FINANCIAL DISTRIBUTORS,
By: DELAWARE DISTRIBUTORS, INC., INC.
General Partner
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxxxxxx X. Xxxxxx
Name: Xxxxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
Title: President/Chief Executive Officer Title: President
4
SCHEDULE A
to
THIRD AMENDED AND RESTATED
FINANCIAL INTERMEDIARY DISTRIBUTION AGREEMENT
The fees payable by DDLP to LFD under this Schedule A shall be calculated and
paid monthly with respect to the sales of retail shares of the Funds listed on
Appendix A.
DDLP shall pay LFD for the actual expenses incurred by LFD in performing
its duties under this Agreement as determined by DDLP's monthly review of
information retrieved from Lincoln Financial Group's applicable expense
management system. Based on this review, DDLP may request that LFD provide
additional information describing its expenses in detail reasonably
acceptable to DDLP. Additionally, the parties shall agree from time to time
to a mechanism to monitor LFD's expenses.
For purposes of this Agreement, "detail reasonably acceptable to DDLP"
shall mean a level of detail that enables DDLP to determine, among other
things: (i) the direct wholesaling, sales, marketing and other expenses for
all distribution channels incurred by LFD on behalf of DDLP for the Funds;
and (ii) the actual overhead and other non-100% direct expenses that LFD
incurred that were allocated to DDLP based on direct sales of Funds
attributable to LFD, as well as the basis for the methodology used in
making such allocation.
If LFD fails to provide DDLP with information describing LFD's expenses in
detail reasonably acceptable to DDLP, DDLP shall have no obligation to pay
LFD any fees hereunder until such time as LFD provides such information in
detail reasonably acceptable to DDLP. No interest on LFD's expenses shall
be due to LFD for any period prior to DDLP's receipt of expense information
containing detail reasonably acceptable detail to XXXX.
0
XXXXXXXX X
to
THIRD AMENDED AND RESTATED
FINANCIAL INTERMEDIARY DISTRIBUTION AGREEMENT
Delaware Group Adviser Funds Delaware Group State Tax-Free Income Trust
Delaware Diversified Income Fund Delaware Tax-Free Pennsylvania Fund
Delaware U.S. Growth Fund
Delaware Group Tax-Free Fund
Delaware Group Cash Reserve Delaware Tax-Free USA Fund
Delaware Cash Reserve Fund Delaware Tax-Free USA Intermediate
Delaware Group Equity Funds I Delaware Group Tax-Free Money Fund
Delaware Balanced Fund Delaware Tax-Free Money Fund
Delaware Group Equity Funds II Delaware Group Global & International Funds
Delaware Large Cap Value Fund Delaware Emerging Markets Fund
Delaware Value Fund Delaware Global Value Fund
Delaware International Value Equity Fund
Delaware Group Equity Funds III
Delaware American Services Fund Delaware Pooled Trust
Delaware Small Cap Growth Fund The Real Estate Investment Trust Portfolio I
Delaware Trend Fund
Voyageur Insured Funds
Delaware Group Equity Funds IV Delaware Tax-Free Minnesota Insured Fund
Delaware Large Cap Growth Fund Delaware Tax-Free Arizona Fund
Delaware Growth Opportunities Fund
Delaware Investments Municipal Trust
Delaware Group Equity Funds V Delaware Tax-Free Florida Insured Fund
Delaware Dividend Income Fund
Delaware Small Cap Core Fund Voyageur Intermediate Tax-Free Funds
Delaware Small Cap Value Fund Delaware Tax-Free Minnesota Intermediate Fund
Delaware Group Foundation Funds Voyageur Mutual Funds
Delaware Aggressive Allocation Portfolio Delaware Minnesota High-Yield Municipal Bond Fund
Delaware Moderate Allocation Portfolio Delaware National High-Yield Municipal Bond Fund
Delaware Conservative Allocation Portfolio Delaware Tax-Free California Fund
Delaware Tax-Free Idaho Fund
Delaware Group Income Funds Delaware Tax-Free New York Fund
Delaware Corporate Bond Fund
Delaware Delchester Fund Voyageur Mutual Funds II
Delaware Extended Duration Bond Fund Delaware Tax-Free Colorado Fund
Delaware High-Yield Opportunities Fund
Voyageur Mutual Funds III
Delaware Group Government Fund Delaware Large Cap Core Fund
Delaware Core Plus Bond Fund Delaware Select Growth Fund
Delaware Inflation Protected Bond Fund
Voyageur Tax Free Funds
Delaware Group Limited-Term Government Funds Delaware Tax-Free Minnesota Fund
Delaware Limited-Term Government Fund
A-1
