FINANCIAL INTERMEDIARY AGREEMENT
Financial Intermediary Agreement (the "Agreement") made as of this 17th
day of July, 2003 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; and
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; and
WHEREAS, DDLP desires to enter into an agreement with LFD pursuant to
which LFD shall promote the sale of the Funds' shares through broker/dealers,
financial advisers and other financial intermediaries (collectively "Financial
Intermediaries").
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.
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. DDLP and LFD shall mutually agree as to the specific
responsibilities of each party hereunder from time to time.
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) marketing materials and advertising relating to the Funds produced by
DDLP;
(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. With respect to the apportionment of which party shall be primarily
responsible for preparing marketing materials and advertising relating to
the Funds as between DDLP and LFD, the parties shall mutually agree from
time to time. Notwithstanding which party has primary responsibility for
marketing materials and advertisements, LFD agrees to submit to DDLP,
prior to its use or as otherwise agreed, the form of any sales literature
and advertisements relating to the Funds prepared by LFD and proposed to
be generally disseminated by or for LFD, all sales literature and
advertisements relating to the Funds prepared by LFD and proposed to be
used by LFD, and all sales literature and advertisements 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 submit such sales
literature and advertisements 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 sales literature or advertisements without the prior written consent
of DDLP if any regulatory agency expresses objection thereto or if DDLP
delivers, on behalf of the Board of Directors/Trustees of the Funds, to
LFD a written objection thereto. DDLP and LFD agree to work together in
good faith to resolve any disagreements between DDLP and LFD about or
objections by DDLP to marketing materials and advertisements relating to
the Funds.
6. The responsibility of LFD hereunder shall be limited to the promotion of
sales of the Funds' shares through Financial Intermediaries. 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;
(c) LFD will bear the expense of its advertising and promotional
activities and materials, including value-added sales promotions, that
do not relate directly to the Funds; and
(d) The parties will apportion between DDLP and LFD the following expenses
as mutually agreed from time to time:
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(1) Advertising and promotional activities and materials that relate
exclusively to the Funds;
(2) Advertising and promotional activities and materials relating both
to the Funds and to the other products distributed by LFD.
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.
(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
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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: Will Bashan By: Xxxxxxx Xxxxx
---------------------------------- ----------------------------------
Name: Will Bashan Name: Xxxxxxx Xxxxx
Title: President/Chief Executive Officer Title: Chief Administrative Officer/
Chief Financial Officer
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SCHEDULE A
TO
FINANCIAL INTERMEDIARY AGREEMENT
The fees payable by DDLP to LFD under this Schedule A shall be calculated and
paid monthly.
I. Fees with respect to sales of shares of Funds
With respect to each sale through Financial Intermediaries on or after the
date of this Agreement, a non- recurring fee equal to the amount shown below
will be paid by DDLP to LFD.
Basis
points
On Sales
-----------
A, B, & C classes excluding money .20%
market funds, house accounts, and
market timers
All other classes, funds, accounts 0
and investors
The total amount of any fees paid by DDLP to LFD during any calendar year are
subject to a maximum limit of $1 million (the "Limit"). Any amounts due from
DDLP to LFD that would be greater than such Limit shall not be carried forward
to succeeding calendar years. The maximum amount due in calendar year 2003 shall
be equal to 1) the ratio of a) the number of days from September 1, 2003 to
December 31, 2003 to b) 365 days times 2) the Limit.
APPENDIX A
TO
FINANCIAL INTERMEDIARY AGREEMENT
OPTIMUM FUND TRUST
Optimum Large Cap Growth Fund
Optimum Large Cap Value Fund
Optimum Small Cap Growth Fund
Optimum Small Cap Value Fund
Optimum Fixed Income Fund
Optimum International Fund
