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EXHIBIT 10.12
MASTER FUND ACCOUNTING SERVICES AGREEMENT
AGREEMENT made as of the 25th day of January, 1993 by Ivy Fund (the
"Trust") and Mackenzie Investment Management Inc. (herein called the "Agent").
WHEREAS, the Trust is an open-end investment company organized as a
Massachusetts business trust and consists of one or more separate investment
portfolios (the "Funds") as may be established and designated from time to time;
WHEREAS, the Trust desires certain accounting and pricing services of
the Agent with respect to such Funds as shall be designated in supplements to
this Agreement as further agreed between the Trust and the Agent; and
WHEREAS, the Agent has developed the capability to provide certain of
the accounting and pricing services required by the Funds.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
Section 1. DUTIES OF AGENT - GENERAL.
The Agent is authorized to act under the terms of this Agreement as the Trust's
agent, and as such will:
a. Maintain and preserve the Funds' accounts, books, records and
other documents as are required of the Trust under Section 31
of the Investment Company Act of 1940 and Rules 31a-1 and
31a-2 thereunder;
b. Record the current day's trading activity and such other
proper bookkeeping entries as are necessary for determining
that day's net asset value for the Funds;
c. Render statements or copies of records for the Funds from time
to time as requested by the Trust (see Exhibit A);
d. Facilitate audits of accounts by the Trust's auditors or by
any other auditors employed or engaged by the Trust or by any
regulatory body with jurisdiction over the Trust; and
e. Compute each Fund's net asset value per share and, if
applicable, its public offering price, total returns and
yields, and notify the Trust and such other persons as the
Trust may reasonably request of the net asset
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value per share, the public offering price and/or the total
return or yield.
Section 2. VALUATION OF SECURITIES.
Securities will be valued in accordance with the specific provisions of the
Funds' prospectuses. In general, consistent with a Fund's prospectus, (i) a
security listed or traded on a recognized stock exchange will be valued at its
last sale price prior to the time the valuation is made, or (ii) the Fund's
portfolio securities will be valued using the amortized cost method.
Section 3. COMPUTATION OF NET ASSET VALUE, PUBLIC OFFERING PRICE, TOTAL RETURNS
AND YIELDS
The Agent will compute each Fund's net asset value in a manner consistent with
the specific provisions of the Fund's prospectus. In general, such computation
will be made by dividing the value of the Fund's portfolio securities, cash and
any other assets, less its liabilities, by the number of shares of the Fund
outstanding, adjusted to the nearest cent. Such computation will be made as of
the close of regular trading on the New York Stock Exchange (normally 4:00 p.m.,
Eastern time) on each day that the New York Stock Exchange is open for trading.
If applicable, the Agent will also compute the public offering price by dividing
the net asset value per share by the appropriate factor as provided by the Fund;
the total return; and the yield.
Each Fund's liabilities are allocated between its classes. The total of such
liabilities allocated to a class plus that class' distribution fee and any other
expenses specially allocated to that class are then deducted from the class'
proportionate interest in the Fund's assets, and the resulting amount for each
class is divided by the number of shares of that class outstanding to produce
the "net asset value" per share.
Section 4. AGENT'S RELIANCE ON INSTRUCTIONS AND ADVICE.
In maintaining the Funds' books of account and making the necessary
computations, the Agent shall be entitled to receive, and may rely upon, (i)
information furnished by a pricing or other similar service pursuant to an
agreement between the Agent, on behalf of a Fund, and such service provider,
approved by the Trust's Board of Trustees, and (ii) information furnished it by
any authorized officer of the Trust relating to:
a. The manner and amount of accrual of expenses other than
management fees to be recorded on the books of the Funds;
b. If applicable, the source of quotations to be used for such
portfolio securities as may not be available through the
Agent's normal pricing services;
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c. If applicable, the value to be assigned to any portfolio
security or other asset for which no price quotations are
readily available;
d. If applicable, the manner of computation of the public
offering price and such other computations as may be
necessary; and
e. Notification of transactions in portfolio securities.
The Agent shall be entitled to rely upon any certificate, letter or other
instrument or telephone call reasonably believed by the Agent to be genuine and
to have been properly made or signed by an officer or other authorized agent of
the Trust, on behalf of a Fund, and shall be entitled to receive as conclusive
proof of any fact or matter required to be ascertained by it hereunder a
certificate signed by an officer of the Trust, on behalf of a Fund or any other
person authorized by the Trust's Board of Trustees.
The Agent shall be entitled to receive and act upon advice of Counsel (which may
be Counsel for the Trust) at the expense of the Trust and shall be without
liability for any action taken or thing done in good faith in reliance upon such
advice.
The Trust agrees to furnish the Agent with a copy of the Funds' Prospectuses as
in effect from time to time.
Section 5. DUTY OF CARE AND INDEMNIFICATION.
The Agent shall at all times use reasonable care and act in good faith in
performing its duties hereunder. The Agent shall incur no liability to the Trust
or a Fund in connection with its performance of services hereunder, except to
the extent that it does not comply with the foregoing standards.
The Trust agrees to indemnify and hold harmless the Agent and its employees,
agents and nominees from all taxes, charges, expenses, assessments, claims and
liabilities (including attorney's fees) incurred or assessed against them in
connection with the performance of this Agreement, except such as may arise from
their own negligent action, negligent failure to act or willful misconduct. The
foregoing notwithstanding, the Agent will in no event be liable for any loss
resulting from the acts, omissions, lack of financial responsibility, or failure
to perform the obligations of any person or organization designated by the Trust
to be the authorized agent of the Trust as a party to the transaction.
The Agent's responsibility for damage or loss arising from military power, war,
insurrection, or nuclear fission, fusion or radioactivity shall be limited to
the use of the Agent's best
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efforts to recover the Funds' records determined to be lost, missing or
destroyed.
Section 6. COMPENSATION AND AGENT'S EXPENSES.
The Agent shall be paid for its services pursuant to this Agreement such
compensation as may from time to time be agreed upon in writing between the two
parties. The Agent shall be entitled to recover its telephone, delivery and
other out-of-pocket expenses as incurred.
Each Fund shall pay the Agent a monthly fee based upon the rate(s) set forth in
a Fee Schedule attached to the Supplement to this Agreement with respect to such
Fund. A Fund shall be responsible for fees incurred in connection with a pricing
or other similar service furnishing information pursuant to Section 4 of this
Agreement.
If the fees payable to the Agent pursuant to this section begin to accrue before
the end of any month or if this Agreement terminates before the end of any
month, the fees for the period from that date to the end of that month or for
the period from the beginning of that month to the date of termination, as the
case may be, shall be prorated according to the proportion which the period
bears to the full month in which the effectiveness or termination occurs. For
purposes of calculating the monthly fees, the value of the net assets of a Fund
shall be computed in the manner specified in the Fund's Prospectus for the
computation of its net asset value.
Section 7. TERMINATION OF AGREEMENT.
This Agreement may be terminated with respect to a Fund, without the payment of
any penalty, by the Agent upon at least ninety (90) days' prior written notice
to that Fund, or by the Fund upon at least ninety (90) days' prior written
notice to the Agent; provided, that in the case of termination by the Fund, such
action shall have been authorized by the Trust's Board of Trustees, including
the vote or written consent of a majority of the Trust's Independent Trustees.
Any termination date is to be no earlier than four months from the effective
date hereof. Upon termination, the Agent will turn over to the Trust and cease
to retain in the Agent's files, records of the calculations of the net asset
value of the Fund and other records pertaining to its services hereunder.
Section 8. REPORTS AND MAINTENANCE OF RECORDS BY AGENT.
The Agent will furnish to the Trust and to properly authorized auditors,
examiners, distributors, dealers, underwriters, salesmen, insurance companies,
investors, and others designated by the Trust in writing, such books, records,
and reports at such times as are prescribed for each service in Exhibit A
attached hereto. The Trust shall examine or shall cause any other
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authorized recipient to examine promptly each such book, record, or report, or
copy thereof, and shall report or shall cause to be reported any errors or
discrepancies therein, but the Trust's failure to observe or report any such
error or discrepancy shall not relieve the Agent of its responsibilities or
liabilities as agreed to under the terms of this Agreement. The Agent may at its
option at any time and shall forthwith upon the Trust's demand turn over to the
Trust and cease to retain in the Agent's files, records and documents created
and maintained by the Agent pursuant to this Agreement that are no longer needed
by the Agent in the performance of its services or for its protection.
If not so turned over to the Trust, such documents and reports will be retained
by the Agent for six years from the year of creation, during the first two of
which the same will be in readily accessible form. At the end of six years, such
records and documents shall be turned over to the Trust by the Agent unless the
Trust authorizes their destruction.
Section 9. TERM.
The term of this Agreement shall begin as of the date specified above and unless
sooner terminated as hereinafter provided, this Agreement shall remain in effect
for a period of one year from that date. Thereafter, this Agreement shall
continue in effect with respect to a Fund from year to year, subject to the
termination provisions and all other terms and conditions hereof; provided, that
such continuance with respect to that Fund is approved at least annually by the
Trust's Board of Trustees, including the vote or written consent of a majority
of the Trust's trustees who are not interested persons of Ivy Management Inc.,
the Agent or the Trust (the "Independent Trustees"). The Agent shall furnish to
the Funds, promptly upon their request, such information (including the Agent's
costs of delivering the services provided to the Funds hereunder) as may
reasonably be necessary to enable the Trust's Board of Trustees to evaluate the
terms of this Agreement or any extension, renewal or amendment hereof. The Agent
shall permit the Trust and its accountants, counsel or other representatives to
review its books and records relating to the services provided hereunder at
reasonable intervals during normal business hours upon reasonable notice
requesting such review.
Section 10. INTERPRETATION AND DEFINITION OF TERMS.
Any question or interpretation of any term or provision of this Agreement having
a counterpart in or otherwise derived from a term or provision of the Investment
Company Act of 1940, as amended, (the "1940 Act") shall be resolved by reference
to such term or provision of the 1940 Act and to interpretation thereof, if any.
Specifically, the terms "interested persons," "affiliated person," and
"assignment," as used in this Agreement, shall have the meanings assigned to
them by Section 2(a) of the 1940 Act.
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Section 11. SOFTWARE AND RELATED MATERIALS.
All computer programs, written procedures, and similar items developed or
acquired and used by the Agent in performing its obligations under this
Agreement shall be the property of the Agent, and neither the Trust nor the
Funds will acquire any ownership interest therein or property rights with
respect thereto.
Section 12. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Agent or any affiliated
person of the Agent to render services of the types contemplated hereby to other
persons, firms or corporations, including but not limited to other investment
companies, or to engage in other business activities.
Section 13. MISCELLANEOUS.
This agreement shall be governed and construed in accordance with the laws of
the Commonwealth of Massachusetts.
This Agreement may not be assigned by the Agent without the consent of the Trust
as authorized or approved by resolution of its Board of Trustees.
The captions in this Agreement are included for convenience of reference only
and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
The Trust's Amended and Restated Declaration of Trust has been filed with the
Secretary of State of the Commonwealth of Massachusetts. The obligations of the
Trust or a Fund are not personally binding upon, nor shall resort be had to the
private property of, any of the trustees, shareholders, officers, employees or
agents of the Trust or the Fund, but only that Fund's property shall be bound.
In connection with the operation of this Agreement, the Trust and the Agent may
agree from time to time on such provisions interpretive of or in addition to the
provisions of this Agreement as in their joint opinions may be consistent with
the general tenor of this Agreement. Any such interpretive or additional
provisions are to be signed by both parties and annexed hereto, but no such
provision shall be deemed to be an amendment of this Agreement.
Nothing in this Agreement shall give or be construed to give any shareholder of
the Trust any rights against the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
written above.
IVY FUND
By: /s/ (ILLEGIBLE)
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MACKENZIE INVESTMENT MANAGEMENT INC.
By: /s/ (ILLEGIBLE)
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EXHIBIT A
Fund Accounting Services Agreement
STANDARD REPORTS AND AVAILABILITY
The following reports will be provided to the Fund on a regular basis with
availability as indicated:
A. Daily
1. Printed Trial Balance
2. Net Asset Value Worksheet
3. Cash Forecast
4. Yield Computation, if applicable
B. Weekly - Tax Lot Ledgers
C. Monthly
1. Tax Lot Ledgers as of month-end
2. Working Appraisal as of month-end
3. Purchase and Sale Journal for the month
4. Summary of Gains and Losses on Securities for the month
5. Dividend Ledger for the month (Receivable as of month-end
and earned)
6. Interest Income Analysis for the month (receivable as of
month-end and earned)
7. Trial Balance as of month-end
8. Net Asset Value Worksheet as of month-end
9. Open Trades (payable and receivable for unsettled securities
transactions)
D. Annually
1. Purchase and Sale Journal for the year
2. Summary of Gains and Losses on Securities for the year
3. Broker Allocation Report for the year
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