INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by
and between DELAWARE GROUP INCOME FUNDS,
a Delaware statutory trust
(the “Trust”), 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, a Delaware statutory trust (the “Investment Manager”).
WITNESSETH:
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;
WHEREAS, the
Investment Manager is registered under the Investment Advisers Act of 1940, as
amended (the “Advisers Act”), as an investment adviser and engages in the
business of providing investment management services; and
WHEREAS, the Trust,
on behalf of each Fund, and the Investment Manager desire to enter into this
Agreement so that the Investment Manager may provide investment management
services to each Fund.
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 its 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 or the Funds in any way, or in
any way be deemed an agent of the Trust or the Funds. 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 investment
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. Such decisions and services shall include exercising
discretion regarding any voting rights, rights to consent to corporate actions
and any other rights pertaining to each Fund’s investment
securities.
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,
auditing, fund accounting, and financial administration fees; taxes; federal and
state registration fees; and other costs and expenses approved by the Board of
Trustees. 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 of funds (including the Trust). 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.
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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 may place orders for the
purchase and sale of portfolio securities and other instruments with such
broker/dealers selected by the Investment Manager 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 or account 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
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 (the
“SEC”) and Financial Industry Regulatory Authority, Inc. (“FINRA”) and does not
take into account such broker/dealer’s promotion or sale of such
shares.
(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 and to other investment companies (or series thereof)
and other advisory accounts for which the Investment Manager exercises
investment discretion.
4. As compensation
for the investment services to be rendered to a particular Fund by the
Investment Manager under the provisions of this Agreement, the Trust 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.
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.
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5. The Investment
Manager may, at its expense, select and contract with one or more investment
advisers registered under the Advisers Act (“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 requisite approval of the Fund’s shareholders, if required, 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 under the provisions of this
Agreement are not to be deemed to be exclusive. The Investment Manager, its
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, so long as the Investment
Manager’s other activities do not impair its ability to render the services
provided for in this Agreement.
7. It is understood
and agreed that so long as the Investment Manager and/or its advisory affiliates
shall continue to serve as the Trust’s investment adviser, other investment
companies as may be sponsored or advised by the Investment Manager or its
affiliates may 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.
8. 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, the Investment
Manager shall not be subject to liability to the Trust 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.
9. (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) This Agreement
(and Exhibit A hereto) may be amended without the approval of a majority of the
outstanding voting securities of the Fund if the amendment relates solely to a
management fee reduction or other change that is permitted or not prohibited
under then current federal law, rule, regulation or SEC staff interpretation
thereof to be made without shareholder approval. This Agreement may be amended
from time to time pursuant to a written agreement executed by the Trust, on
behalf of the applicable Fund, and the Investment Manager.
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(c) 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
Trust 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 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.
10. This Agreement
shall extend to and bind the administrators, successors and permitted assigns of
the parties hereto.
11. For the purposes
of this Agreement, (i) the terms “vote of a majority of the outstanding voting
securities”; “interested persons”; and “assignment” shall have the meaning
ascribed to them in the 1940 Act, and (ii) references to the SEC and FINRA shall
be deemed to include any successor regulators.
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be signed by their duly
authorized officers as of the 4th day of January, 2010.
| DELAWARE MANAGEMENT | DELAWARE GROUP INCOME FUNDS | |||||||
| COMPANY, a series of Delaware | on behalf of the Funds listed on Exhibit A | |||||||
| Management Business Trust | ||||||||
| By | Xxxxx X. X’Xxxxxx | By | Xxxxxxx X. Xxxxx | |||||
| Name | Xxxxx X. X’Xxxxxx | Name | Xxxxxxx X. Xxxxx | |||||
| Title | Sr. Vice President | Title | President | |||||
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EXHIBIT A
THIS EXHIBIT to the
Investment Management Agreement between DELAWARE GROUP INCOME FUNDS and DELAWARE MANAGEMENT COMPANY, a series of Delaware Management Business Trust
(the “Investment Manager”), entered into as of the 4th day of January, 2010 (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 | ||
| Fund Name | Effective Date | percentage of average daily net assets) |
| Annual Rate | ||
| 0.50% on first $500 million | ||
| Delaware Core Bond Fund | January 4, 2010 | 0.475% on next $500 million |
| 0.45% on next $1.5 billion | ||
| 0.425% on assets in excess of $2.5 billion | ||
| 0.50% on first $500 million | ||
| Delaware Corporate Bond Fund | January 4, 2010 | 0.475% on next $500 million |
| 0.45% on next $1.5 billion | ||
| 0.425% on assets in excess of $2.5 billion | ||
| 0.65% on first $500 million | ||
| Delaware High-Yield Opportunities | 0.60% on next $500 million | |
| Fund | January 4, 2010 | 0.55% on next $1.5 billion |
| 0.50% on assets in excess of $2.5 billion |
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