EX-99.B5B
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
TAX-FREE NEW JERSEY FUND
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE GROUP STATE TAX-FREE INCOME
TRUST (the "Fund"), a Pennsylvania Business Trust, for its TAX-FREE NEW JERSEY
FUND series (the "Series"), and DELAWARE MANAGEMENT COMPANY, INC.
(the "Investment Manager"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 and engages in the
business of investing and reinvesting its assets in securities; and
WHEREAS, the Investment Manager is a registered Investment Adviser
under the Investment Advisers Act of 1940 and engages in the business of
providing investment management services and
WHEREAS, the Fund desires to retain the Investment Manager to serve
as the investment manager for the Series effective as of the date of this
Agreement.
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 Fund hereby employs the Investment Manager to manage the
investment and reinvestment of the Series' assets and to administer its
affairs, subject to the direction of the Board and officers of the Fund 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 Fund in
any way, or in any way be deemed an agent of the Fund. The Investment Manager
shall regularly make decisions as to what securities to purchase and sell on
behalf of the Series, and shall give written instructions to the Trading
Department maintained by
the Fund for implementation of such decisions, and shall furnish the Board of
Trustees of the Fund with such information and reports regarding the Series'
investments as the Investment Manager deems appropriate or as the Trustees of
the Fund may reasonably request.
2. The Fund 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
stock, including issuance, redemption and repurchase of shares; preparation of
share certificates; reports and notices to shareholders; calling and holding
of shareholders' meetings; miscellaneous office expenses; brokerage
commissions; custodian fees; legal and accounting fees; taxes; and federal and
state registration fees. The Series shall bear all of its own organizational
costs.
Directors, officers and employees of the Investment Manager
may be directors, officers and employees of the funds of which Delaware
Management Company, Inc. is Investment Manager. Directors, officers and
employees of the Investment Manager who are directors, officers and/or
employees of the funds shall not receive any compensation from the funds for
acting in such dual capacity.
In the conduct of the respective businesses of the parties
hereto and in the performance of this Agreement, the Fund and Investment
Manager may share facilities common to each, with appropriate proration of
expenses between them.
3. (a) The Fund shall place and execute its own orders for the
purchase and sale of portfolio securities with broker/dealers. Subject to the
primary objective of obtaining the best available prices and execution, the
Fund will place orders for the purchase and sale of portfolio securities with
such broker/dealers selected from among those designated from time to time by
the Investment Manager, who provide statistical, factual and financial
information and services to the Fund, to the Investment Manager, or to any
other fund for which the Investment Manager provides investment advisory
services and/or with broker/dealers who sell shares of the Fund or who sell
shares of any other fund for which the Investment Manager provides investment
advisory services. Broker/dealers who sell shares of the funds of which
Delaware Management Company, Inc. is investment manager, shall only receive
orders for the purchase or sale of
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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.
(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 Fund, the Investment Manager may ask the Fund,
and the Fund 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, broker or dealer would
have charged for effecting that transaction, in such instances where it, and
the Investment Manager, 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 the Investment Manager's overall
responsibilities with respect to the Fund and to other funds or other advisory
accounts for which the Investment Manager exercises investment discretion.
4. As compensation for the services to be rendered to the Fund by the
Investment Manager under the provisions of this Agreement, the Fund shall pay
to the Investment Manager monthly from the Series' assets a fee based on the
average daily net assets of the Series during the month. Such fee shall be
calculated in accordance with the following schedule.
Equivalent
Monthly Rate Annual Rate Average Daily Net Assets
------------ ----------- ------------------------
5.5/120 of 1% 0.55% on the first $500,000,000
5.25/120 of 1% 0.525% on the next $500,000,000
5.0/120 of 1% 0.50% on assets over $1,000,000,000
If this Agreement is terminated prior to the end of any
calendar month, the management fee shall be prorated for the portion of any
month in which this Agreement is in effect 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 days
after the date of termination.
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5. The services to be rendered by the Investment Manager to the Fund
under the provisions of this Agreement are not to be deemed to be exclusive,
and the Investment Manager shall be free to render similar or different
services to others so long as its ability to render the services provided for
in this Agreement shall not be impaired thereby.
6. The Investment Manager, its directors, 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
Fund or to any other investment company, corporation, association, firm or
individual.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of the
Investment Manager to the Fund, the Investment Manager shall not be subject to
liabilities to the Fund or to any shareholder of the Fund 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.
8. This Agreement shall be executed and become effective as of the
date written below. It shall continue in effect for a period of two years from
such date and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Series and only if the terms and the renewal hereof have
been approved by the vote of a majority of the 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. Notwithstanding
the foregoing, this Agreement may be terminated by the Fund at any time,
without the payment of a penalty, on sixty days' written notice to the
Investment Manager of the Fund's intention to do so, pursuant to action by the
Board of Trustees of the Fund or pursuant to vote of a majority of the
outstanding voting securities of the Series. The Investment Manager may
terminate this Agreement at any time, without the payment of penalty, on sixty
days' written notice to the Fund 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,
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and except for the obligation of the Fund 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.
9. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
10. For the purposes of this Agreement, the terms "vote of a majority
of the outstanding voting securities;" "interested persons;" and "assignment"
shall have the meanings defined in the Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by having it signed by their duly authorized officers as of the 2nd
day of September, 1997.
DELAWARE GROUP
STATE TAX-FREE INCOME TRUST
for the TAX-FREE NEW JERSEY FUND
ATTEST: /s/Xxxxxxx X. Xxxxx By: /s/Xxxxx X. Xxxxxx
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Title: Xxxxxxx X. Xxxxx Xxxxx X. Xxxxxx
Assistant Vice President/ Executive Vice President/Chief
Assistant Secretary Operating Officer/Chief Financial
Officer
DELAWARE MANAGEMENT COMPANY, INC.
ATTEST: /s/Xxxxx X. X'Xxxxxx By: /s/Xxxxx X. Xxxxx
----------------------- -----------------------------------
Xxxxx X. X'Xxxxxx Xxxxx X. Xxxxx
Title: Assistant Vice President Chairman/President/Chief Executive
Assistant Secretary Officer/Chief Investment Officer
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