INVESTMENT ADVISORY AGREEMENT
This Agreement, made as of this 30th day of April, 1997, by
and between Voyageur Insured Funds, Inc., a Minnesota corporation (the
"Company"), on behalf of each Fund represented by a series of shares of common
stock of the Fund that adopts this Agreement (each a "Fund" and, collectively,
the "Funds") (the Funds, together with the date each Fund adopts this Agreement,
are set forth in Exhibit A hereto, which shall be updated from time to time to
reflect additions, deletions or other changes thereto), and Delaware Management
Company, Inc., a Delaware corporation ("Adviser").
WITNESSETH
WHEREAS, the Company has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, Adviser is an investment adviser registered under the
Investment Advisers Act of 1940, as amended, and engages in the business of
providing investment management services;
WHEREAS, a subsidiary of Adviser's indirect parent company completed as
of the date of this Agreement a merger transaction (the "Merger") with the
indirect parent company of the investment adviser to the Company, Voyageur Fund
Managers, Inc. ("VFM"), which resulted in a change of control of VFM and the
assignment (as defined under the 0000 Xxx) and automatic termination of the
investment advisory agreement that was in effect between VFM and the Company at
the time of the Merger; and
WHEREAS, the Board of Directors of the Company and the shareholders of
the Company have determined that the Company should enter into an investment
advisory agreement with Adviser to be effective upon consummation of the Merger;
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. INVESTMENT ADVISORY SERVICES.
(1) The Company hereby engages Adviser on
behalf of the Funds, and Adviser hereby agrees to
act, as investment adviser for, and to manage the
investment of the assets of, the Funds.
(2) The investment of the assets of each
Fund shall at all times be subject to the
applicable provisions of the Articles of
Incorporation, the Bylaws, the Registration
Statement, and the current Prospectus and the
Statement of Additional Information, if any, of
the Company and each Fund and shall conform to
the policies and purposes of each Fund as set
forth in such documents and as interpreted from
time to time by the Board of Directors of the
Company. Within the framework of the investment
policies of each Fund, and subject to such other
limitations and directions as the Board of
Directors may from time to time prescribe,
Adviser shall have the sole and exclusive
responsibility for the management of each Fund's
assets and the making and execution of all
investment decisions for each Fund, except as set
forth in the following paragraph. Adviser shall
report to the Board of Directors regularly at
such times and in such detail as the Board may
from time to time
determine appropriate, in order to permit the
Board to determine the adherence of Adviser to
the investment policies of the Funds.
(3) Adviser may, at its expense, select and
contract with one or more registered investment
advisers ("Sub-Adviser") for any of the Funds to
perform some or all of the services for such
Funds. Such Sub-Adviser shall be responsible for
executing orders for the purchase and sale of
portfolio securities. Adviser will compensate any
Sub-Adviser for its services to the Funds.
Adviser 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.
(4) Adviser shall, at its own expense,
furnish all office facilities, equipment and
personnel necessary to discharge its
responsibilities and duties hereunder. Adviser
shall arrange, if requested by the Company, for
officers or employees of Adviser to serve without
compensation from any Fund as directors,
officers, or employees of the Company if duly
elected to such positions by the shareholders or
directors of the Company (as required by law).
(5) Adviser hereby acknowledges that all
records pertaining to each Fund's investments are
the property of the Company, and in the event
that a transfer of investment advisory services
to someone other than Adviser should ever occur,
Adviser will promptly, and at its own cost, take
all steps necessary to segregate such records and
deliver them to the Company.
(6) Subject to the primary objective of
obtaining the best available prices and
execution, 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 Funds, Adviser or to any other fund for which
Adviser provides investment advisory services
and/or with broker/dealers who sell shares of the
Funds or who sell shares of any other fund for
which Adviser provides investment advisory
services. Broker/dealers who sell shares of the
funds of which Adviser is investment manager,
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.
(7) Notwithstanding the provisions of
subparagraph (f) above, and subject to such
policies and procedures as may be adopted by the
Board of Directors and officers of the Company,
Adviser may ask the Funds and the Funds 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,
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broker or dealer would have charged for effecting
that transaction, in such instances where it and
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 Adviser's overall responsibilities
with respect to the Funds and to other funds and
other advisory accounts for which Adviser
exercises investment discretion.
2. COMPENSATION FOR SERVICES.
In payment for the investment advisory and management services
to be rendered by Adviser hereunder, each Fund shall pay to Adviser a monthly
fee, which fee shall be paid to Adviser not later than the fifth business day of
the month following the month in which said services were rendered. The monthly
fee payable by each Fund shall be as set forth in Exhibit A hereto, which may be
updated from time to time to reflect amendments, if any, to Exhibit A. The
monthly fee payable by each Fund shall be based on the average of the net asset
values of all of the issued and outstanding shares of the Fund as determined as
of the close of each business day of the month pursuant to the Articles of
Incorporation, Bylaws, and currently effective Prospectus and Statement of
Additional Information of the Company and the Fund. For purposes of calculating
each Fund's average daily net assets, as such term is used in this Agreement,
each Fund's net assets shall equal its total assets minus (a) its total
liabilities and (b) its net orders receivable from dealers.
3. ALLOCATION OF EXPENSES.
(1) In addition to the fee described in Section
2 hereof, each Fund shall pay all its costs and
expenses which are not assumed by Adviser. These
Fund expenses include, by way of example, but not by
way of limitation, all expenses incurred in the
operation of the Fund and any public offering of its
shares, including, among others, fees (if any)
associated with a plan of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act ("Plan of
Distribution"), interest, taxes, brokerage fees and
commissions, fees of the directors who are not
employees of Adviser or the principal underwriter of
the Fund's shares (the "Underwriter"), or any of
their affiliates, expenses of directors' and
shareholders' meetings, including the cost of
printing and mailing proxies, expenses of insurance
premiums for fidelity and other coverage, expenses
of redemption of shares, expenses of issue and sale
of shares (to the extent not borne by the
Underwriter under its agreement with the Fund),
expenses of printing and mailing stock certificates
representing shares of the Fund, association
membership dues, charges of custodians, transfer
agents, dividend disbursing agents, accounting
services agents, investor servicing agents, and
bookkeeping, auditing, and legal expenses. Each Fund
will also pay the fees and bear the expense of
registering and maintaining the registration of the
Fund and its shares with the Securities and Exchange
Commission and registering or qualifying its shares
under state or other securities laws and the expense
of preparing and mailing
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prospectuses and reports to shareholders.
(2). The Underwriter shall bear all advertising
and promotional expenses in connection with the
distribution of each Fund's shares, including paying
for prospectuses for new shareholders, except as
provided in the following sentence. No Fund shall
use any of its assets to finance costs incurred in
connection with the distribution of its shares
except pursuant to a Plan of Distribution.
4. FREEDOM TO DEAL WITH THIRD PARTIES.
Adviser shall be free to render services to others similar to
those rendered under this Agreement or of a different nature except as such
services may conflict with the services to be rendered or the duties to be
assumed hereunder.
5. REPORTS TO DIRECTORS OF THE FUND.
Appropriate officers of Adviser shall provide the directors of
the Company with such information as is required by any Plan of Distribution
adopted by the Company on behalf of any Fund pursuant to Rule 12b-1 under the
1940 Act.
6. STANDARD OF CARE.
In the absence of willful misfeasance, bad faith, gross
negligence or a reckless disregard of the performance of duties of the Adviser
to the Funds, the Adviser shall not be subject to liabilities to the Funds or to
any shareholders of the Funds 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.
7. EFFECTIVE DATE, DURATION AND TERMINATION OF
AGREEMENT.
(1) The effective date of this Agreement with
respect to each Fund shall be the date set forth on
Exhibit A hereto.
(2) Unless sooner terminated as hereinafter
provided, this Agreement shall continue in effect
with respect to each Fund 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 by (i)
the Board of Directors of the Company or by the vote
of a majority of the outstanding voting securities
of the applicable Fund, and (ii) by the vote of a
majority of the directors of the Company who are not
parties to this Agreement or "interested persons,"
as defined in the 1940 Act, of Adviser or of the
Company cast in person at a meeting called for the
purpose of voting on such approval.
(3) This Agreement may be terminated with
respect to any Fund at
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any time, without the payment of any penalty, by the
Board of Directors of the Company or by the vote of
a majority of the outstanding voting securities of
such Fund, or by Adviser, upon 60 days' written
notice to the other party.
(4) This agreement shall terminate
automatically in the event of its "assignment" (as
defined in the 1940 Act).
(5) No amendment to this Agreement shall be
effective with respect to any Fund until approved by
the vote of: (i) a majority of the directors of the
Company who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of
Adviser or of the Company cast in person at a
meeting called for the purpose of voting on such
approval; and (ii) a majority of the outstanding
voting securities of the applicable Fund.
(6) Wherever referred to in this Agreement,
the vote or approval of the holders of a majority of
the outstanding voting securities or shares of a
Fund shall mean the lesser of (i) the vote of 67% or
more of the voting securities of such Fund present
at a regular or special meeting of shareholders duly
called, if more than 50% of the Fund's outstanding
voting securities are present or represented by
proxy, or (ii) the vote of more than 50% of the
outstanding voting securities of such Fund.
8. 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 Adviser have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
VOYAGEUR INSURED FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------
Its: Senior Vice President
-------------------------------
DELAWARE MANAGEMENT COMPANY, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------------------
Its: Chairman, President, Chief Executive Officer
--------------------------------------------
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Exhibit A
to
Investment Advisory Agreement
between
Delaware Management Company
and
Voyageur Insured Funds, Inc.
EQUIVALENT
MONTHLY ANNUAL
ADVISORY FEE ADVISORY FEE
(as % of average (as % of average
FUND EFFECTIVE DATE daily net assets) daily net assets)
---- -------------- ----------------- -----------------
Series E - Voyageur
Colorado Insured May 1, 1997 0.50%/12 0.50%
Tax Free Fund
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