EX-99.B6AI
VOYAGEUR FUNDS, INC.
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day March, 1997,
by and between Voyageur Funds, Inc., a Minnesota corporation (the "Company"),
for and on behalf of its sole series, Voyageur U.S. Government Securities Fund
(the "Fund"), and Delaware Distributors, L.P., a Delaware limited partnership
("DDLP"). This Agreement shall apply to the Class A, B, C and Y shares of the
Fund.
WITNESSETH:
WHEREAS, Voyageur Fund Distributors, Inc. ("VFD") currently serves as
the principal underwriter of the shares of the sole series of the Company and of
the shares of the other registered open-end investment companies within the
Voyageur mutual fund complex (the "Voyageur Funds"); and
WHEREAS, on January 15, 1997, the indirect owners of VFD entered into
an Agreement and Plan of Merger with Lincoln National Corporation ("LNC") which,
when consummated (the consummation of such agreement is referred to herein as
the "Merger"), will result in LNC's indirect ownership of, among others, VFD and
its parent company, Voyageur Fund Managers, Inc., the investment adviser and
administrator for the Voyageur Funds; and
WHEREAS, to facilitate additional sales of shares of the Fund in
anticipation of the Merger, the Board of Directors of the Company has determined
that the Company should enter into a distribution agreement with DDLP under
which DDLP will serve as co-underwriter of such shares along with VFD, which
currently serves as the sole principal underwriter of such shares (VFD and DDLP
may hereinafter be referred to as the "Co-Underwriters").
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. UNDERWRITING SERVICES
The Company, on behalf of the Fund, hereby engages DDLP, and DDLP
hereby agrees to act, as co-underwriter for the Fund in the sale and
distribution of the shares of each class of the Fund to the public, either
through dealers or otherwise. DDLP agrees to offer such shares for sale at all
times when such shares are available for sale and may lawfully be offered for
sale and sold.
2. SALE OF SHARES
The shares of the Fund are to be sold only on the following
terms:
(a) All subscriptions, offers, or sales shall be subject to acceptance
or rejection by the Company. Any offer for or sale of shares shall be
conclusively presumed to have been accepted by the Company if the Company shall
fail to notify DDLP of the rejection of such offer or sale prior to the
computation of the net asset value of such shares next following receipt by the
Company of notice of such offer or sale.
(b) No share of the Fund shall be sold by DDLP (i) for any
consideration other than cash or, pursuant to any exchange privilege provided
for by the applicable currently effective Prospectus or Statement of Additional
Information (hereinafter referred to collectively as the "Prospectus"), shares
of any other Voyageur Fund, or (ii)uexcept in instances otherwise provided for
by the applicable currently effective Prospectus, for any amount less than the
public offering price per share, which shall be determined in accordance with
the applicable currently effective Prospectus.
(c) In connection with certain sales of shares, a contingent deferred
sales charge will be imposed in the event of a redemption transaction occurring
within a certain period of time following such a purchase, as described in the
applicable currently effective Prospectus.
(d) The front-end sales charge, if any, for any class of shares of the
Fund may, at the discretion of the Company and the Co-Underwriters, be reduced
or eliminated as permitted by the Investment Company Act of 1940, and the rules
and regulations thereunder, as they may be amended from time to time (the "1940
Act"), provided that such reduction or elimination shall be set forth in the
Prospectus for such class, and provided that the Company shall in no event
receive for any shares sold an amount less than the net asset value thereof. In
addition, any contingent deferred sales charge for any class of shares of the
Fund may, at the discretion of the Company and the Co-Underwriters, be reduced
or eliminated in accordance with the terms of an exemptive order received from,
or any applicable rule or rules promulgated by, the Securities and Exchange
Commission, provided that such reduction or elimination shall be set forth in
the Prospectus for such class of shares.
(e) DDLP shall require any securities dealer entering into a selected
dealer agreement with DDLP to disclose to prospective investors the existence of
all available classes of shares of the Fund and to determine the suitability of
each available class as an investment for each such prospective investor.
3. QUALIFICATION OF SHARES
The Company agrees to make prompt and reasonable efforts to effect and
keep in effect, at its expense, the qualification of
the Fund's shares for sale in such jurisdictions as the Company may designate.
4. INFORMATION TO BE FURNISHED TO DDLP
The Company agrees that it will furnish DDLP with such information with
respect to the affairs and accounts of the Company (and each class of the Fund)
as DDLP may from time to time reasonably require, and further agrees that DDLP,
at all reasonable times, shall be permitted to inspect the books and records of
the Company.
5. ALLOCATION OF EXPENSES
During the period of this Agreement, the Company shall pay or cause to
be paid all expenses, costs and fees incurred by the Company which are not
assumed by DDLP and/or VFD. VFD has agreed to provide, and pay costs which it
incurs in connection with providing, administrative or accounting services to
shareholders of the Fund (such costs are referred to as "Shareholder Servicing
Costs"). DDLP may provide such services and pay Shareholder Servicing Costs
associated therewith to the extent agreed to from time to time by DDLP and VFD.
Shareholder Servicing Costs include all expenses of DDLP or VFD, as the case may
be, incurred in connection with providing administrative or accounting services
to shareholders of the Fund, including, but not limited to, an allocation of
overhead of DDLP or VFD and payments made to persons, including employees of
DDLP or VFD, who respond to inquiries of shareholders regarding their ownership
of Fund shares, or who provide other administrative or accounting services not
otherwise required to be provided by the Fund's investment adviser or transfer
agent. VFD has also agreed to pay all costs of distributing the shares of the
Fund ("Distribution Expenses"). DDLP may pay all or a portion of the
Distribution Expenses as agreed to from time to time by DDLP and VFD.
Distribution Expenses include, but are not limited to, initial and ongoing sales
compensation (in addition to sales loads) paid to investment executives of DDLP
or VFD, as the case may be, and to other broker-dealers and participating
financial institutions; expenses incurred in the printing of prospectuses,
statements of additional information and reports used for sales purposes;
expenses of preparation and distribution of sales literature; expenses of
advertising of any type; an allocation of the overhead of DDLP or VFD, as the
case may be; payments to and expenses of persons who provide support services in
connection with the distribution of Fund shares; and other distribution-related
expenses.
6. COMPENSATION TO DDLP
As compensation for all of its services provided and its costs assumed
under this Agreement, DDLP shall receive the following forms and amounts of
compensation:
(a) DDLP shall, as agreed to from time to time with VFD and as
permitted by applicable law or regulation, be entitled to receive or retain any
front-end sales charge imposed in connection with sales of shares of the Fund,
as set forth in the applicable current Prospectus. Up to the entire amount of
such front-end sales charge may be reallowed by DDLP to broker-dealers and
participating financial institutions in connection with their sale of Fund
shares. The amount of the front-end sales charge (if any) may be retained or
deducted by DDLP from any sums received by it in payment for shares so sold. If
such amount is not deducted by DDLP from such payments, such amount shall be
paid to DDLP by the Company not later than five business days after the close of
any calendar quarter during which any such sales were made by DDLP and payment
received by the Company.
(b) DDLP shall, as agreed to from time to time with VFD and as
permitted by applicable law or regulation, be entitled to receive or retain any
contingent deferred sales charge imposed in connection with any redemption of
shares of the Fund, as set forth in the applicable current Prospectus.
(c) Pursuant to the Company's Plan of Distribution adopted in
accordance with Rule 12b-1 under the 1940 Act (the "Plan"):
(i) Class A and Class Y of the Fund are each obligated to pay
DDLP and/or VFD, as agreed to from time to time by such parties and as
permitted by applicable law or regulation, a total fee in connection
with the servicing of shareholder accounts of such class and in
connection with distribution-related services provided in respect of
such class, calculated and payable quarterly, at the annual rate of
.25% of the value of the average daily net assets of such class. All or
any portion of such total fee may be payable as a Shareholder Servicing
Fee, and all or any portion of such total fee may be payable as a
Distribution Fee, as determined from time to time by the Company's
Board of Directors. Until further action by the Board of Directors, all
of such fee shall be designated and payable as a Shareholder Servicing
Fee.
(ii) Class B and Class C of the Fund are each obligated to pay
DDLP and/or VFD, as agreed to from time to time by such parties and as
permitted by applicable law or regulation, a total fee in connection
with the servicing of shareholder accounts of such class and in
connection with distribution-related services provided in respect of
such class, calculated and payable quarterly, at the annual rate of
1.00% of the value of the average daily net assets of such class. All
or any portion of such total fee may be payable as a Shareholder
Servicing Fee, and all or any portion of such total fee may be payable
as a Distribution Fee, as determined from time to time by the Company's
Board of Directors. With respect to each such class, until
further action by the Board of Directors, a portion of such total fee
equal to .25% per annum of the average daily net assets of such class
shall be designated and payable as a Shareholder Servicing Fee and the
remainder of such fee shall be designated as a Distribution Fee.
Average daily net assets shall be computed in accordance with the
applicable currently effective Prospectus. Amounts payable under the Plan may
exceed or be less than actual Distribution Expenses and Shareholder Servicing
Costs. In the event such Distribution Expenses and Shareholder Servicing Costs
exceed amounts payable under the Plan, DDLP shall not be entitled to
reimbursement by the Company.
(d) In each year during which this Agreement remains in effect, DDLP,
as agreed to from time to time with VFD, will prepare and furnish to the Board
of Directors of the Company, and the Board will review, on a quarterly basis,
written reports complying with the requirements of Rule 12b-1 under the 1940 Act
that set forth the amounts expended under this Agreement and the Plan, on a
class by class basis as applicable, and the purposes for which those
expenditures were made.
7. LIMITATION OF DDLP'S AUTHORITY
DDLP shall be deemed to be an independent contractor and, except as
specifically provided or authorized herein, shall have no authority to act for
or represent the Fund or the Company.
8. SUBSCRIPTION FOR SHARES--REFUND FOR CANCELLED ORDERS
DDLP shall subscribe for the shares of the Fund only for the purpose of
covering purchase orders already received by it or for the purpose of investment
for its own account. In the event that an order for the purchase of shares of
the Fund is placed with DDLP by a customer or dealer and subsequently cancelled,
DDLP shall forthwith cancel the subscription for such shares entered on the
books of the Fund, and, if DDLP has paid the Fund for such shares, shall be
entitled to receive from the Fund in refund of such payment the lesser of:
(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation by
DDLP.
9. INDEMNIFICATION OF THE COMPANY
DDLP agrees to indemnify the Fund and the Company against any and all
litigation and other legal proceedings of any kind or nature and against any
liability, judgment, cost, or penalty imposed as a result of such litigation or
proceedings in any way arising out of or in connection with the sale or
distribution of
the shares of the Fund by DDLP. In the event of the threat or institution of any
such litigation or legal proceedings against the Fund, DDLP shall defend such
action on behalf of the Fund or the Company at DDLP's own expense, and shall pay
any such liability, judgment, cost, or penalty resulting therefrom, whether
imposed by legal authority or agreed upon by way of compromise and settlement;
provided, however, DDLP shall not be required to pay or reimburse the Fund for
any liability, judgment, cost, or penalty incurred as a result of information
supplied by, or as the result of the omission to supply information by, the
Company to DDLP, or to DDLP by a director, officer, or employee of the Company
who is not an "interested person," as defined in the provisions of the 1940 Act,
of DDLP, unless the information so supplied or omitted was available to DDLP
without recourse to the Fund or the Company or any such person referred to
above.
10. FREEDOM TO DEAL WITH THIRD PARTIES
DDLP shall be free to render to others services of a nature either
similar to or different from those rendered under this contract, except such as
may impair its performance of the services and duties to be rendered by it
hereunder.
11. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
(a) The effective date of this Agreement is set forth in the first
paragraph of this Agreement. Unless sooner terminated as hereinafter provided,
this Agreement shall continue in effect for a period of one year after the date
of its execution, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Company, and of the directors who are not "interested persons"
(as defined in the provisions of the 0000 Xxx) of the Company and have no direct
or indirect financial interest in the operation of the Plan or in any agreement
related to the Plan (including, without limitation, this Agreement), cast in
person at a meeting called for the purpose of voting on this Agreement.
Notwithstanding the preceding sentence, this Agreement shall terminate at 11:59
p.m., Philadelphia time, on June 30, 1997, if the Merger has not been
consummated by such date, unless otherwise agreed by the parties.
(b) This Agreement may be terminated at any time with respect to the
Fund or any class thereof, without the payment of any penalty, by the vote of a
majority of the members of the Board of Directors of the Company who are not
"interested persons" (as defined in the provisions of the 0000 Xxx) of the
Company and have no direct or indirect financial interest in the operation of
the Plan or in any agreement related to the Plan (including, without limitation,
this Agreement), or by the vote of a majority of the outstanding voting
securities of the Fund (or such class), or by DDLP, upon 60 days' written notice
to the other party.
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities of the Fund (or a
class) shall mean the lesser of (i) the vote of 67% or more of the voting
securities of the Fund (or such class) present at a regular or special meeting
of shareholders duly called, if more than 50% of the Fund's (or class's, as
applicable) outstanding voting securities are present or represented by proxy,
or (ii) the vote of more than 50% of the outstanding voting securities of the
Fund (or such class).
12. AMENDMENTS TO AGREEMENT
No material amendment to this Agreement shall be effective until
approved by DDLP and by vote of a majority of the Board of Directors of the
Company who are not interested persons of the Company or DDLP.
13. NOTICES
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Company and DDLP have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
VOYAGEUR FUNDS, INC.
By /s/Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Its Secretary
DELAWARE DISTRIBUTORS, L.P.
By Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
Its Vice Chairman
