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                                                                   EXHIBIT 10.26

                              SUBADVISORY AGREEMENT

         AGREEMENT made as of the 1st day of February, 1999, between IVY
MANAGEMENT, INC., 700 South Federal Highway, Boca Raton, Florida 33432 U.S.A., a
Massachusetts corporation (hereinafter called the "Manager"), and HENDERSON
INVESTMENT MANAGEMENT LIMITED, 3 Finsbury Avenue, London, England EC2M 2PA, an
United Kingdom corporation (hereinafter called the "Subadviser").

         WHEREAS, Ivy Fund (the "Trust") is a Massachusetts business trust
organized with one or more series of shares, and is registered as an investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and

         WHEREAS, the Manager has entered into a Master Business Management and
Investment Advisory Agreement dated December 31, 1991, as amended (the "Advisory
Agreement"), with the Trust, pursuant to which the Manager acts as investment
adviser to a specified portion of the portfolio assets of certain series of the
Trust listed on Schedule A hereto, as amended from time to time (each a "Fund"
and, collectively, the "Funds"); and

         WHEREAS, the Manager desires to utilize the services of the Subadviser
as investment subadviser with respect to certain portfolio assets of each Fund;
and

         WHEREAS, the Subadviser is willing to perform such services on the
terms and conditions hereinafter set forth:

         NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:

         1.       DUTIES OF THE SUBADVISER. The Subadviser will serve the
                  Manager as investment subadviser with respect to certain
                  portfolio assets of each Fund, as set forth on the attached
                  Schedule A.

                  (a)      As investment subadviser to the Funds, the Subadviser
                           is hereby authorized and directed and hereby agrees,
                           in accordance with the Subadviser's best judgment and
                           subject to the stated investment objectives, policies
                           and restrictions of the Funds as set forth in the
                           current prospectuses and statements of additional
                           information of the Trust (including amendments) and
                           in accordance with the Trust's Declaration of Trust,
                           as amended, and By-laws governing the offering of its
                           shares (collectively, the "Trust Documents"), the
                           1940 Act and the provisions of the Internal Revenue
                           Code of 1986, as amended (the "Internal Revenue
                           Code"), relating to regulated investment companies,
                           and subject to such resolutions as from time to time
                           may be adopted by the Trust's Board of Trustees, and
                           provided that the Trust Documents are all furnished
                           to the Subadviser, to develop, recommend and
                           implement such investment program and strategy for
                           the Funds as may from time to time be most
                           appropriate to the achievement of the investment
                           objectives of the Funds as stated in the aforesaid
                           prospectuses, to provide research and analysis
                           relative to the investment program and investments of
                           the Funds, to determine what securities should be
                           purchased and sold and to monitor on a continuing
                           basis the performance of the portfolio securities of
                           the Funds.




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                  (b)      The Subadviser shall (i) comply with all reasonable
                           requests of the Trust for information, including
                           information required in connection with the Trust's
                           filings with the Securities and Exchange Commission
                           (the "SEC") and state securities commissions, and
                           (ii) provide such other services as the Subadviser
                           shall from time to time determine to be necessary or
                           useful to the administration of the Funds.

                  (c)      The Subadviser shall furnish to the Trust's Board of
                           Trustees periodic reports on the investment
                           performance of each Fund and on the performance of
                           its obligations under this Agreement and shall supply
                           such additional reports and information as the
                           Trust's officers or Board of Trustees shall
                           reasonably request.

                  (d)      On occasions when the Subadviser deems the purchase
                           or sale of a security to be in the best interest of a
                           Fund as well as other customers, the Subadviser, 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 Subadviser 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 Subadviser in
                           the manner it considers to be the most equitable and
                           consistent with its fiduciary obligations to the Fund
                           involved and to such other customers. In no instance,
                           however, will a Fund's assets be purchased from or
                           sold to the Manager, the Subadviser, the Trust's
                           principal underwriter, or any affiliated person of
                           either the Trust, the Manager, the Subadviser or the
                           principal underwriter, acting as principal in the
                           transaction, except to the extent permitted by the
                           SEC and the 1940 Act.

                  (e)      The Subadviser shall provide the Funds' custodian on
                           each business day with information relating to all
                           transactions concerning each Fund's assets and shall
                           provide the Manager with such information upon
                           request of the Manager.

                  (f)      The investment advisory services provided by the
                           Subadviser under this Agreement are not to be deemed
                           exclusive and the Subadviser shall be free to render
                           similar services to others, as long as such services
                           do not impair the services rendered to the Manager or
                           the Trust.

                  (g)      The Subadviser shall promptly notify the Manager of
                           any financial condition that is likely to impair the
                           Subadviser's ability to fulfill its commitment under
                           this Agreement.

                  (h)      The Subadviser shall review all proxy solicitation
                           materials and be responsible for voting and handling
                           all proxies in relation to the securities held in a
                           Fund's portfolio. The Manager shall instruct the
                           custodian and other parties providing services to the
                           Fund to promptly forward misdirected proxies to the
                           Subadviser.

         2.       DELIVERY OF DOCUMENTS TO THE MANAGER. The Subadviser has
                  furnished the Manager with copies of each of the following
                  documents:

                  (a)      The Subadviser's current Form ADV and any amendments
                           thereto;




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                  (b)      The Subadviser's most recent balance sheet;

                  (c)      Separate lists of persons whom the Subadviser wishes
                           to have authorized to give written and/or oral
                           instructions to the custodian and the fund accounting
                           agent of Trust assets for the Funds; and

                  (d)      The Code of Ethics of the Subadviser as currently in
                           effect.

                  The Subadviser will furnish the Manager from time to time with
                  copies, properly certified or otherwise authenticated, of all
                  material amendments of or supplements to the foregoing, if
                  any. Additionally, the Subadviser will provide to the Manager
                  such other documents relating to its services under this
                  Agreement as the Manager may reasonably request on a periodic
                  basis. Such amendments or supplements as to items (a) through
                  (d) above will be provided within 30 days of the time such
                  materials became available to the Subadviser.

         3.       EXPENSES. The Subadviser shall pay all of its expenses arising
                  from the performance of its obligations under Section 1.

         4.       COMPENSATION. The Manager shall pay to the Subadviser for its
                  services hereunder, and the Subadviser agrees to accept as
                  full compensation therefor, a fee with respect to each Fund as
                  set forth on Schedule B. Such fee shall be accrued daily on
                  the basis of the value of the portion of the average daily net
                  assets of the applicable Fund as are then being managed by the
                  Subadviser and shall be payable monthly. If the Subadviser
                  shall serve hereunder for less than the whole of any month,
                  the fee hereunder shall be prorated accordingly.

         5.       PURCHASE AND SALE OF SECURITIES. The Subadviser will determine
                  the securities to be purchased or sold with respect to the
                  portion of each Fund's portfolio assets being managed by it,
                  and shall purchase securities from or through and sell
                  securities to or through such persons, brokers or dealers as
                  the Subadviser shall deem appropriate in order to carry out
                  the policy with respect to allocation of portfolio
                  transactions as set forth in the prospectuses and statements
                  of additional information (including amendments) of the Funds
                  or as the Trust's Board of Trustees may direct from time to
                  time. In providing the Funds with investment management and
                  supervision, it is recognized that the Subadviser will seek
                  the most favorable price and execution, and, consistent with
                  such policy, may give consideration to the research services
                  furnished by brokers or dealers to the Subadviser for its use
                  and to such other considerations as the Trust's Board of
                  Trustees may direct or authorize from time to time.

                  Nothing in this Agreement shall be implied to prevent (i) the
                  Manager from engaging other subadvisers to provide investment
                  advice and other services in relation to series of the Trust,
                  or a portion of the portfolio assets of any such series, for
                  which the Subadviser does not provide such services, or to
                  prevent the Manager from providing such services itself in
                  relation to such series; or (ii) the Subadviser from providing
                  investment advice and other services to other funds or
                  clients.

                  In the performance of its duties hereunder, the Subadviser is
                  and shall be an independent contractor and except as expressly
                  provided herein or otherwise authorized in writing, shall have







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                  no authority to act for or represent the Trust, the Funds, any
                  other series of the Trust or the Manager in any way or
                  otherwise be deemed to be an agent of the Trust, the Funds,
                  any other series of the Trust or the Manager.

         6.       TERM OF AGREEMENT. This Agreement shall continue in full force
                  and effect until February 1, 2001, and from year to year
                  thereafter if such continuance is approved in the manner
                  required by the 1940 Act if the Subadviser shall not have
                  notified the Manager in writing at least 60 days prior to such
                  February 1 or prior to February 1 of any year thereafter that
                  it does not desire such continuance. This Agreement may be
                  terminated at any time, without payment of penalty by a Fund,
                  by vote of the Trust's Board of Trustees or a majority of the
                  outstanding voting securities of the applicable Fund (as
                  defined by the 1940 Act), or by the Manager or by the
                  Subadviser upon 60 days' written notice. This Agreement will
                  automatically terminate in the event of its assignment (as
                  defined by the 1940 Act) or upon the termination of the
                  Advisory Agreement or if (a) either party is unable to pay its
                  debts or an administrative or insolvency order is made in
                  respect of a party pursuant to its relevant governing and
                  applicable laws and regulations or (b) a party commits a
                  material breach of any of the terms or conditions of this
                  Agreement and such breach shall continue 30 days after notice
                  in writing, specifying the breach and requiring the same to be
                  remedied, has been given.

         7.       AMENDMENTS. This Agreement may be amended by consent of the
                  parties hereto provided that the consent of the applicable
                  Fund is obtained in accordance with the requirements of the
                  1940 Act.

         8.       CONFIDENTIAL TREATMENT. It is understood that any information
                  or recommendation supplied by the Subadviser in connection
                  with the performance of its obligations hereunder is to be
                  regarded as confidential and for use only by the Manager, the
                  Trust or such persons as the Manager may designate in
                  connection with the Funds. It is also understood that any
                  information supplied to the Subadviser in connection with the
                  performance of its obligations hereunder, particularly, but
                  not limited to, any list of securities which, on a temporary
                  basis, may not be bought or sold for the Funds, is to be
                  regarded as confidential and for use only by the Subadviser in
                  connection with its obligation to provide investment advice
                  and other services to the Funds.

         9.       REPRESENTATIONS AND WARRANTIES. The Subadviser hereby
                  represents and warrants as follows:

                  (a)      The Subadviser is registered with the SEC as an
                           investment adviser under the Investment Advisers Act
                           of 1940, as amended (the "Advisers Act"), and such
                           registration is current, complete and in full
                           compliance with all material applicable provisions of
                           the Advisers Act and the rules and regulations
                           thereunder;

                  (b)      The Subadviser has all requisite authority to enter
                           into, execute, deliver and perform the Subadviser's
                           obligations under this Agreement;

                  (c)      The Subadviser's performance of its obligations under
                           this Agreement does not conflict with any law,
                           regulation or order to which the Subadviser is
                           subject; and

                  (d)      The Subadviser has reviewed the portion of (i) the
                           registration statement filed with the SEC, as amended
                           from time to time, for the Funds ("Registration
                           Statement"), and (ii) each Fund's prospectuses and



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                           statements of additional information (including
                           amendments) thereto, in each case in the form
                           received from the Manager with respect to the
                           disclosure about the Subadviser and the Funds of
                           which the Subadviser has knowledge (the "Subadviser
                           and Fund Information") and except as advised in
                           writing to the Manager such Registration Statement,
                           prospectuses and statements of additional information
                           (including amendments) contain, as of their
                           respective dates, no untrue statement of any material
                           fact of which the Subadviser has knowledge and do not
                           omit any statement of a material fact of which the
                           Subadviser has knowledge which was required to be
                           stated therein or necessary to make the statements
                           contained therein not misleading.

         10.      COVENANTS. The Subadviser hereby covenants and agrees that, so
                  long as this Agreement shall remain in effect:

                  (a)      The Subadviser shall maintain the Subadviser's
                           registration as an investment adviser under the
                           Advisers Act, and such registration shall at all
                           times remain current, complete and in full compliance
                           with all material applicable provisions of the
                           Advisers Act and the rules and regulations
                           thereunder;

                  (b)      The Subadviser's performance of its obligations under
                           this Agreement shall not conflict with any law,
                           regulation or order to which the Subadviser is then
                           subject;

                  (c)      The Subadviser shall at all times comply with the
                           Advisers Act and the 1940 Act, and all rules and
                           regulations thereunder, and all other applicable laws
                           and regulations, and the Registration Statement,
                           prospectuses and statements of additional information
                           (including amendments) and with any applicable
                           procedures adopted by the Trust's Board of Trustees,
                           provided that such procedures are substantially
                           similar to those applicable to similar funds for
                           which the Trust's Board of Trustees is responsible
                           and that such procedures are identified in writing to
                           the Subadviser;

                  (d)      The Subadviser shall promptly notify Manager and the
                           Fund upon the occurrence of any event that might
                           disqualify or prevent the Subadviser from performing
                           its duties under this Agreement. The Subadviser shall
                           promptly notify the Manager and the Fund if there are
                           any changes to its organizational structure or the
                           Subadviser has become the subject of any adverse
                           regulatory action imposed by any regulatory body or
                           self-regulatory organization. The Subadviser further
                           agrees to notify Manager of any changes relating to
                           it or the provision of services by it that would
                           cause the Registration Statement, prospectuses or
                           statements of additional information (including
                           amendments) for the Funds to contain any untrue
                           statement of a material fact or to omit to state a
                           material fact which is required to be stated therein
                           or is necessary to make the statements contained
                           therein not misleading, in each case relating to
                           Subadviser and Fund Information; and

                  (e)      The Subadviser will manage the portion of each Fund's
                           portfolio assets for which it serves as subadviser
                           under this Agreement in a manner consistent with the
                           Fund's status as a regulated investment company under
                           Subchapter M of the Internal Revenue Code.

         11.      USE OF NAMES.





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                  (a)      The Subadviser acknowledges and agrees that the names
                           Ivy Fund and Ivy Management, Inc, and abbreviations
                           or logos associated with those names, are the
                           valuable property of Manager and its affiliates; that
                           the Funds, the Manager and their affiliates have the
                           right to use such names, abbreviations and logos; and
                           that the Subadviser shall use the names Ivy Fund and
                           Ivy Management, Inc., and associated abbreviations
                           and logos, only in connection with the Subadviser's
                           performance of its duties hereunder. Further, in any
                           communication with the public and in any marketing
                           communications of any sort, Subadviser agrees to
                           obtain prior written approval from Manager before
                           using or referring to Ivy Fund, and Ivy Management,
                           Inc, or the Funds or any abbreviations or logos
                           associated with those names; provided that nothing
                           herein shall be deemed to prohibit the Subadviser
                           from referring to the performance of the Funds in the
                           Subadviser's marketing material as long as such
                           marketing material does not constitute "sales
                           literature" or "advertising" for the Funds, as those
                           terms are used in the rules, regulations and
                           guidelines of the SEC and the National Association of
                           Securities Dealers, Inc.

                  (b)      The Manager acknowledges that "Henderson" and
                           "Henderson Investors" and abbreviations or logos
                           associated with those names are valuable proerty of
                           the AMP group of companies and are distinctive in
                           connection with investment advisory and related
                           services provided by the Subadviser, the "Henderson"
                           name is a property right of the Subadviser, and the
                           "Henderson" and "Henderson Investors" names are
                           understood to be used by each Fund upon the
                           conditions hereinafter set forth; provided that each
                           Fund may use such names only so long as the
                           Subadviser shall be retained as the investment
                           subadviser of the Fund pursuant to the terms of this
                           Agreement.

                  (c)      The Subadviser acknowledges that each Fund and its
                           agents may use the "Henderson" and "Henderson
                           Investors" names in connection with accurately
                           describing the activities of the Fund, including use
                           with marketing and other promotional and
                           informational material relating to the Fund with the
                           prior written approval always of the Subadviser. In
                           the event that the Subadviser shall cease to be the
                           investment subadviser of a Fund, then the Fund at its
                           own or the Manager's expense, upon the Subadviser's
                           written request: (i) shall cease to use the
                           Subadviser's name for any commercial purpose; and
                           (ii) shall use its best efforts to cause the Fund's
                           officers and trustees to take any and all actions
                           which may be necessary or desirable to effect the
                           foregoing and to reconvey to the Subadviser all
                           rights which a Fund may have to such name. Manager
                           agrees to take any and all reasonable actions as may
                           be necessary or desirable to effect the foregoing and
                           Subadviser agrees to allow the Funds and their agents
                           a reasonable time to effectuate the foregoing.

                  (d)      The Subadviser hereby agrees and consents to the use
                           of the Subadviser's name upon the foregoing terms and
                           conditions.

         12.      REPORTS BY THE SUBADVISER AND RECORDS OF THE FUNDS. The
                  Subadviser shall furnish the Manager monthly, quarterly and
                  annual reports concerning transactions and performance of the
                  Funds, including information required to be disclosed in the
                  Trust's Registration Statement, in such form as may be
                  mutually agreed, to review the Funds and to discuss the
                  management of them. The Subadviser shall permit the financial
                  statements, books and records with respect to the Funds to be
                  inspected and audited by the Trust, the Manager or their
                  agents at all reasonable times during normal business hours.
                  The Subadviser shall immediately notify and forward to both





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                  the Manager and legal counsel for the Trust any legal process
                  served upon it on behalf of the Manager or the Trust. The
                  Subadviser shall promptly notify the Manager of any changes in
                  any information concerning the Subadviser of which the
                  Subadviser becomes aware that would be required to be
                  disclosed in the Trust's Registration Statement.

                  In compliance with the requirements of Rule 31a-3 under the
                  1940 Act, the Subadviser agrees that all records it maintains
                  for the Trust are the property of the Trust and further agrees
                  to surrender promptly to the Trust or the Manager any such
                  records upon the Trust's or the Manager's request. The
                  Subadviser further agrees to maintain for the Trust the
                  records the Trust is required to maintain under Rule 31a-1(b)
                  insofar as such records relate to the investment affairs of
                  each Fund. The Subadviser further agrees to preserve for the
                  periods prescribed by Rule 31a-2 under the 1940 Act the
                  records it maintains for the Trust.

         13.      INDEMNIFICATION. The Subadviser agrees to indemnify and hold
                  harmless the Manager, any affiliated person within the meaning
                  of Section 2(a)(3) of the 1940 Act ("affiliated person") of
                  the Manager and each person, if any who, within the meaning of
                  Section 15 of the Securities Act of 1933, as amended (the
                  "1933 Act"), controls ("controlling person") the Manager,
                  against any and all losses, claims, damages, liabilities or
                  litigation (including reasonable legal and other expenses), to
                  which the Manager, the Trust or such affiliated person or
                  controlling person may become subject under the 1933 Act, the
                  1940 Act, the Advisers Act, under any other statute, at common
                  law or otherwise, arising out of Subadviser's responsibilities
                  as subadviser of the Funds (1) to the extent of and as a
                  result of the willful misconduct, bad faith, or gross
                  negligence of the Subadviser, any of the Subadviser's
                  employees or representatives or any affiliate of or any person
                  acting on behalf of the Subadviser, or (2) as a result of any
                  untrue statement or alleged untrue statement of a material
                  fact contained in the Registration Statement, prospectuses or
                  statements of additional information covering the Funds or the
                  Trust or any amendment thereof or any supplement thereto or
                  the omission or alleged omission to state therein a material
                  fact required to be stated therein or necessary to make the
                  statement therein not misleading, if such a statement or
                  omission was made in reliance upon written information
                  furnished by the Subadviser to the Manager, the Trust or any
                  affiliated person of the Manager or the Trust expressly for
                  use in the Trust's Registration Statement, or upon verbal
                  information confirmed by the Subadviser in writing expressly
                  for use in the Trust's Registration Statement or (3) to the
                  extent of, and as a result of, the failure of the Subadviser
                  to execute, or cause to be executed, portfolio transactions
                  according to the standards and requirements of the 1940 Act;
                  provided, however, that in no case is the Subadviser's
                  indemnity in favor of the Manager or any affiliated person or
                  controlling person of the Manager deemed to protect such
                  person against any liability to which any such person would
                  otherwise be subject by reason of willful misconduct, bad
                  faith or gross negligence in the performance of its duties or
                  by reason of its reckless disregard of its obligations and
                  duties under this Agreement.

                  The Manager agrees to indemnify and hold harmless the
                  Subadviser, any affiliated person within the meaning of
                  Section 2(a)(3) of the 1940 Act ("affiliated person") of the
                  Subadviser and each person, if any who, within the meaning of
                  Section 15 of the 1933 Act, controls ("controlling person")
                  the Subadviser, against any and all losses, claims, damages,
                  liabilities or litigation (including reasonable legal and
                  other expenses), to which the Subadviser or such affiliated
                  person or controlling person may become subject under the 1933
                  Act, the 1940 Act, the Advisers Act, under any other statute,







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                  at common law or otherwise, arising out of the Manager's
                  responsibilities as investment manager of the Funds (1) to the
                  extent of and as a result of the willful misconduct, bad
                  faith, or gross negligence by the Manager, any of the
                  Manager's employees or representatives or any affiliate of or
                  any person acting on behalf of the Manager, or (2) as a result
                  of any untrue statement or alleged untrue statement of a
                  material fact contained in the Registration Statement,
                  prospectuses or statements of additional information covering
                  the Funds or the Trust or any amendment thereof or any
                  supplement thereto or the omission or alleged omission to
                  state therein a material fact required to be stated therein or
                  necessary to make the statement therein not misleading, if
                  such a statement or omission was made by the Trust other than
                  in reliance upon written information furnished by the
                  Subadviser, or any affiliated person of the Subadviser,
                  expressly for use in the Trust's Registration Statement or
                  other than upon verbal information confirmed by the Subadviser
                  in writing expressly for use in the Trust's Registration
                  Statement; provided, however, that in no case is the Manager's
                  indemnity in favor of the Subadviser or any affiliated person
                  or controlling person of the Subadviser deemed to protect such
                  person against any liability to which any such person would
                  otherwise be subject by reason of willful misconduct, bad
                  faith or gross negligence in the performance of its duties or
                  by reason of its reckless disregard of its obligations and
                  duties under this Agreement.

         14.      JURISDICTION. The Subadviser irrevocably submits to the
                  jurisdiction of any state or U.S. federal court sitting in the
                  Commonwealth of Massachusetts over any suit, action or
                  proceeding arising out of or relating to this proposal and the
                  agreement contemplated herein. The Subadviser irrevocably
                  waives, to the fullest extent permitted by law, any objection
                  which it may have to the laying of the venue of any such suit,
                  action or proceeding brought in such a court and any claim
                  that any such suit, action or proceeding brought in such a
                  court has been brought in an inconvenient forum. The
                  Subadviser agrees that final judgment in any such suit, action
                  or proceeding brought in such a court shall be conclusive and
                  binding upon the Subadviser, and may be enforced to the extent
                  permitted by applicable law in any court of the jurisdiction
                  of which the Subadviser is subject by a suit upon such
                  judgment, provided that service of process is effected upon
                  the Subadviser in the manner specified in the following
                  paragraph or as otherwise permitted by law.

                  As long as the agreement contemplated herein remains in
                  effect, the Subadviser will at all times have an authorized
                  agent in the Commonwealth of Massachusetts upon whom process
                  may be served in any legal action or proceeding in a state or
                  U.S. federal court sitting in the Commonwealth of
                  Massachusetts over any suit, action or proceeding arising out
                  of or relating to this proposal or the agreement contemplated
                  herein. The Subadviser hereby appoints CT Corporation System
                  as its agent for such purpose, and covenants and agrees that
                  service of process in any such legal action or proceeding may
                  be made upon it at the office of such agent at 2 Oliver
                  Street, Boston, MA 02019 (or at such other address in the
                  Commonwealth of Massachusetts, as said agent may designate by
                  written notice to the Subadviser and the Manager). The
                  Subadviser hereby consents to the process being served in any
                  suit, action or proceeding of the nature referred to in the
                  preceding paragraph by service upon such agent together with
                  the mailing of a copy thereof by registered or certified mail,
                  postage prepaid, return receipt requested, to the address of
                  the Subadviser set forth in Section 15 below or to any other
                  address of which the Subadviser shall have given written
                  notice to the Manager. The Subadviser irrevocably waives, to
                  the fullest extent permitted by law, all claim of error by




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                  reason of any such service (but does not waive any right to
                  assert lack of subject matter jurisdiction) and agrees that
                  such service (i) shall be deemed in every respect effective
                  service of process upon the Subadviser in any suit, action or
                  proceeding and (ii) shall, to the fullest extent permitted by
                  law, be taken and held to be valid personal service upon and
                  personal delivery to the Subadviser.

                  Nothing in this Section 14 shall affect the right of the
                  Manager to serve process in any manner permitted by law or
                  limit the right of the Manager to bring proceedings against
                  the Subadviser in the courts of any jurisdiction or
                  jurisdictions.

15.               NOTICES. All notices or other communications required or
                  permitted to be given hereunder shall be in writing and shall
                  be delivered or sent by pre-paid first class letter post to
                  the following addresses or to such other address as the
                  relevant addressee shall hereafter notify for such purpose to
                  the others by notice in writing and shall be deemed to have
                  been given at the time of delivery.

                  If to the Manager:    IVY MANAGEMENT, INC.
                                        Via Mizner Financial Plaza
                                        700 South Federal Highway
                                        Boca Raton, FL 33432, U.S.A.
                                        Attention: C. William Ferris

                  If to the Trust:      IVY FUND
                                        Via Mizner Financial Plaza
                                        700 South Federal Highway
                                        Boca Raton, FL 33432, U.S.A.
                                        Attention: C. William Ferris

                  If to the Subadviser: HENDERSON INVESTMENT MANAGEMENT LIMITED
                                        3 Finsbury Avenue
                                        London EC2M 2PA
                                        United Kingdom
                                        Attention: Sean Dranfield and the
                                                   Company Secretary

         16.      LIMITATION OF LIABILITY OF THE TRUST, ITS TRUSTEES, AND
                  SHAREHOLDERS. It is understood and expressly stipulated that
                  none of the trustees, officers, agents, or shareholders of any
                  series of the Trust shall be personally liable hereunder. It
                  is understood and acknowledged that all persons dealing with
                  any series of the Trust must look solely to the property of
                  such series for the enforcement of any claims against that
                  series as neither the trustees, officers, agents or
                  shareholders assume any personal liability for obligations
                  entered into on behalf of any series of the Trust. No series
                  of the Trust shall be liable for the obligations or
                  liabilities of any other series of the Trust.

         17.      GOVERNING LAW. This Agreement shall be governed by and
                  construed in accordance with the laws of the Commonwealth of
                  Massachusetts. Anything herein to the contrary
                  notwithstanding, this Agreement shall not be construed to
                  require, or to impose any duty upon either of the parties, to
                  do anything in violation of any applicable laws or
                  regulations.

         18.      SEVERABILITY. Should any part of this Agreement be held
                  invalid by a court decision, statute, rule or otherwise, the
                  remainder of this Agreement shall not be affected thereby.
                  This Agreement shall be binding upon and inure to the benefit
                  of the parties hereto and their respective successors.




                                      -9-
<PAGE>   10


         19.      COUNTERPARTS. This Agreement may be executed in two or more
                  counterparts, each of which shall be deemed an original, and
                  all such counterparts shall constitute a single instrument.

         IN WITNESS WHEREOF, IVY MANAGEMENT, INC. AND HENDERSON INVESTMENT
MANAGEMENT LIMITED have each caused this instrument to be signed in duplicate on
its behalf by the officer designated below thereunto duly authorized.

                                    IVY MANAGEMENT, INC.


                                    By: /s/ C. WILLIAM FERRIS
                                       --------------------------------
                                        Title: Senior Vice President

                                    HENDERSON INVESTMENT MANAGEMENT
                                    LIMITED


                                    By: /s/ Sean Dranfield
                                       --------------------------------
                                        Title: Executive Director



                                      -10-
<PAGE>   11


                                   SCHEDULE A
                        TO SUBADVISORY AGREEMENT BETWEEN
        IVY MANAGEMENT, INC. AND HENDERSON INVESTMENT MANAGEMENT LIMITED

                             DATED FEBRUARY 1, 1999

                       -----------------------------------



Funds:

IVY INTERNATIONAL SMALL COMPANIES FUND - 50% of Fund's net assets


<PAGE>   12


                                   SCHEDULE B
                        TO SUBADVISORY AGREEMENT BETWEEN
        IVY MANAGEMENT, INC. AND HENDERSON INVESTMENT MANAGEMENT LIMITED
                             DATED FEBRUARY 1, 1999

                       ----------------------------------


Fee schedule:

IVY INTERNATIONAL SMALL COMPANIES FUND: payable monthly at an annual rate of
0.50% of the portion of the Fund's average daily net assets managed by the
Subadviser.