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EXHIBIT 10.11
MASTER BUSINESS MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of December, 1991, by Ivy Fund
(the "Fund") and Ivy Management Inc. (the "Manager")
WHEREAS, the Fund is an open-end investment company organized as
a Massachusetts business trust and consists of one or more separate investment
portfolios (the "Portfolios") as may be established and designated from time to
time;
WHEREAS, the Fund desires the services of the Manager as business
manager and investment adviser with respect to such Portfolios as shall be
designated in supplements to this Agreement as further agreed between the Fund
and the Manager; and
WHEREAS, the Fund engages in the business of investing and
reinvesting the assets of the Portfolios in the manner and in accordance with
the investment objectives and restrictions specified in the currently effective
prospectus and statement of additional information (the "Prospectus") relating
to the Portfolios included in the Fund's Registration Statement, as amended from
time to time, filed by the Fund under the Investment Company Act of 1940 (the
"1940 Act") and the Securities Act of 1933;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties agree as follows:
1. APPOINTMENT. The Fund hereby appoints the Manager to provide
the business management and investment advisory services specified in this
Agreement with regard to such Portfolios as shall be designated in supplements
to this Agreement, and the Manager hereby accepts such appointment.
2. INVESTMENT ADVISORY SERVICES.
(a) As investment adviser to the Portfolios, the Manager shall
make investments for the account of each Portfolio in accordance with the
Manager's best judgment and within the investment objectives and restrictions
set forth in the Prospectus applicable to the Portfolios, the 1940 Act and the
provisions of the Internal Revenue Code relating to regulated investment
companies, subject to policy decisions adopted by the Fund's Board of Trustees.
(b) The Manager will determine the securities to be purchased
or sold by each Portfolio and will place orders pursuant to its determinations
with any broker or dealer who deals in such securities. The Manager also shall
(i) comply with
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all reasonable requests of the Fund for information, including information
required in connection with the Fund's filing with the Securities and Exchange
Commission (the "SEC") and state securities commissions, and (ii) provide such
other services as the Manager shall from time to time determine to be necessary
or useful to the administration of the Portfolios.
(c) The Manager shall furnish to the Fund's Board of Trustees
periodic reports on the investment performance of each Portfolio and on the
performance of its obligations under this Agreement and shall supply such
additional reports and information as the Fund's officers or Board of Trustees
shall reasonably request.
(d) On occasions when the Manager deems the purchase or sale
of a security to be in the best interest of a Portfolio as well as other
customers, the Manager, to the extent permitted by applicable law, may aggregate
the securities to be so sold or purchased in order to obtain the best execution
or lower brokerage commissions, if any. The Manager also may purchase or sell a
particular security for one or more customers in different amounts. On either
occasion, and to the extent permitted by applicable law and regulations,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Manager in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Portfolio involved and to such other customers.
3. BUSINESS MANAGEMENT SERVICES.
(a) The Manager shall supervise the Portfolios' business
and affairs and shall provide such services reasonably necessary for the
operation of the Portfolios as are not provided by employees or other agents
engaged by the Portfolios; provided, that the Manager shall not have any
obligation to provide under this Agreement any direct or indirect services to
the Portfolios' shareholders, any services related to the distribution of the
Portfolios' shares, or any other services which are the subject of a separate
agreement or arrangement between the Portfolios and the Manager. Subject to the
foregoing, in providing business management services hereunder, the Manager
shall, at its expense, (1) coordinate with the Portfolios' Custodian and monitor
the services it provides to the Portfolios; (2) coordinate with and monitor any
other third parties furnishing services to the Portfolios; (3) provide the
Portfolios with the necessary office space, telephones and other communications
facilities as are adequate for the Portfolios' needs; (4) provide the services
of individuals competent to perform administrative and clerical functions which
are not performed by employees or other agents
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engaged by the Portfolios or by the Manager acting in some other capacity
pursuant to a separate agreement or arrangement with the Portfolios; (5)
maintain or supervise the maintenance by third parties of such books and records
of the Fund as may be required by applicable Federal or state law; (6) authorize
and permit the Manager's directors, officers and employees who may be elected or
appointed as trustees or officers of the Fund to serve in such capacities; and
(7) take such other action with respect to the Fund, after approval by the Fund,
as may be required by applicable law, including without limitation the rules and
regulations of the SEC and of state securities commissions and other regulatory
agencies.
(b) The Manager may retain third parties to provide these
services to the Fund, at the Manager's own cost and expense. The Manager shall
make periodic reports to the Fund's Board of Trustees on the performance of its
obligations under this Agreement, other than services provided to the Fund by
third parties retained in accordance with the previous sentence.
4. EXPENSES OF THE FUND. Except as provided in paragraph 3 or as
provided in any separate agreement between the Portfolios and the Manager, the
Fund shall be responsible for all of its expenses and liabilities, including:
(1) the fees and expenses of the Fund's Trustees who are not parties to this
Agreement or "interested persons" (as defined in the 0000 Xxx) of any such party
("Independent Trustees"); (2) the salaries and expenses of any of the Fund's
officers or employees who are not affiliated with the Manager; (3) interest
expenses; (4) taxes and governmental fees, including any original issue taxes or
transfer taxes applicable to the sale or delivery of shares or certificates
therefor; (5) brokerage commissions and other expenses incurred in acquiring or
disposing of portfolio securities; (6) the expenses of registering and
qualifying shares for sale with the SEC and with various state securities
commissions; (7) accounting and legal costs; (8) insurance premiums; (9) fees
and expenses of the Fund's Custodian and Transfer Agent and any related
services; (10) expenses of obtaining quotations of portfolio securities and of
pricing shares; (11) expenses of maintaining the Fund's legal existence and of
shareholders' meetings; (12) expenses of preparation and distribution to
existing shareholders of periodic reports, proxy materials and prospectuses; and
(13) fees and expenses of membership in industry organizations.
5. STANDARD OF CARE. The Manager shall give the Fund the benefit of the
Manager's best judgment and efforts in rendering business management and
investment advisory services pursuant to paragraphs 2 and 3 of this Agreement.
As an inducement to the Manager's undertaking to render these services, the
Fund agrees that the Manager shall not be liable under this Agreement for
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any mistake in judgment or in any other event whatsoever except for lack of
good faith, provided that nothing in this Agreement shall be deemed to protect
or purport to protect the Manager against any liability to the Fund or its
shareholders to which the Manager would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Manager's duties under this Agreement or by reason of the Manager's reckless
disregard of its obligations and duties hereunder.
6. FEES. In consideration of the services to be rendered by the Manager
pursuant to paragraphs 2 and 3 of this Agreement, each Portfolio shall pay the
Manager a monthly fee on the first business day of each month, based on the
average daily value (as determined on each business day at the time set forth in
the Prospectus of the Portfolio for determining net asset value per share) of
the net assets of the Portfolio during the preceding month at the annual rates
set forth in a supplement to this Agreement with respect to each Portfolio. If
the fees payable to the Manager pursuant to this paragraph 6 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
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 Portfolio shall
be computed in the manner specified in the Portfolio's Prospectus for the
computation of net asset value. For purposes of this Agreement, a "business day"
is any day on which the New York Stock Exchange is open for trading.
7. EXPENSE LIMITATION. If the aggregate expenses of every character
incurred by, or allocated to, a Portfolio in any fiscal year, other than
interest, taxes, distribution expenses, brokerage commissions and other
portfolio transaction expenses, other expenditures which are capitalized in
accordance with generally accepted accounting principles and any extraordinary
expense (including, without limitation, litigation and indemnification
expenses), but including the fees provided for in paragraph 6 ("includable
expenses"), shall exceed the expense limitations applicable to the Portfolio
imposed by state securities laws or regulations thereunder, as these limitations
may be raised or lowered from time to time, the Manager shall pay to the
Portfolio an amount equal to that excess. With respect to portions of a fiscal
year in which this Agreement shall be in effect, the foregoing limitations shall
be prorated according to the proportion which that portion of the fiscal year
bears to the full fiscal year. At the end of each month of the Fund's fiscal
year, the Manager will review the includable expenses accrued
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during that fiscal year to the end of the period and shall estimate the
contemplated includable expenses for the balance of that fiscal year. If, as a
result of that review and estimation, it appears likely that the includable
expenses will exceed the limitations referred to in this paragraph 7 for a
fiscal year with respect to a Portfolio, the Manager shall pay the Portfolio,
subject to a later reimbursement to reflect actual expenses, an amount equal to
a pro rata portion (prorated on the basis of remaining months of the fiscal
year, including the month just ended) of the amount by which the includable
expenses for the fiscal year (less an amount equal to the aggregate of actual
reductions made pursuant to this provision with respect to prior months of the
fiscal year) are expected to exceed the limitations provided in this paragraph
7. For the purposes of the foregoing, the value of the net assets of the
Portfolio shall be computed in the manner specified in paragraph 6, and any
payments required to be made by the Manager shall be made once a year promptly
after the end of the Fund's fiscal year.
8. OWNERSHIP OF RECORDS. All records required to be maintained
and preserved by the Portfolios pursuant to the provisions or rules or
regulations of the SEC under Section 31(a) of the 1940 Act and maintained and
preserved by the Manager on behalf of the Portfolios are the property of the
Portfolios and shall be surrendered by the Manager promptly on request by the
Portfolios; provided, that the Manager may at its own expense make and retain
copies of any such records.
9. DURATION AND TERMINATION.
(a) This Agreement shall become effective as of the closing of
the acquisition of the capital stock of the Manager by Mackenzie Investment
Management Inc. on December 31, l991, subject to prior shareholder approval
thereof as required by the 1940 Act, and shall continue in effect for a period
of two (2) years from that date, provided, that the Agreement will continue
in effect with respect to a Portfolio for more than two (2) years only so long
as the continuance is specifically approved at least annually (i) by the vote of
a majority of the outstanding voting securities of that Portfolio (as defined in
the 0000 Xxx) or by the Fund's entire Board of Trustees, and (ii) by the vote,
cast in person at a meeting called for that purpose, of a majority of the Fund's
Independent Trustees.
(b) This Agreement may be terminated with respect to a
Portfolio at any time, without the payment of any penalty, by a vote of a
majority of the outstanding voting securities of that Portfolio (as defined in
the 0000 Xxx) or by a vote of majority of the Fund's entire Board of Trustees on
sixty (60) days' written notice to the Manager or by the Manager on sixty
(60) days' written notice to the Fund. This Agreement shall
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terminate automatically in the event of its assignment (as defined in the 1940
Act).
10. RETENTION OF SUB-ADVISERS. Subject to a Portfolio's
obtaining any initial and periodic approvals that are required under Section 15
of the 1940 Act, the Manager may retain a sub-adviser with respect to that
Portfolio, at the Manager's own cost and expense.
11. SERVICES TO OTHER CLIENTS. Nothing herein contained shall
limit the freedom of the Manager or any affiliated person of the Manager to
render investment supervisory and administrative services to other investment
companies, to act as investment adviser or investment counselor to other
persons, firms or corporations, or to engage in other business activities.
12. MISCELLANEOUS.
(a) This Agreement shall be construed in accordance with
the laws of the State of Florida, provided that nothing herein shall be
construed in a manner inconsistent with the 1940 Act.
(b) 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.
(c) The Fund's Agreement and Declaration of Trust has been
filed with the Secretary of State of the Commonwealth of Massachusetts. The
obligations of the 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 Fund, but only the Fund's property shall be bound.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
IVY FUND
By:/s/ (ILLEGIBLE)
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TITLE: CHAIRMAN
IVY MANAGEMENT INC.
By: /s/ (ILLEGIBLE)
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TITLE: PRESIDENT
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