Exhibit 10.37


 


DISTRIBUTION
AGREEMENT


 


THIS AGREEMENT, made this
3rd day of September, 2003, by and between Ivy Funds (hereinafter the company”),
a Massachusetts business trust, and Ivy Funds Distributor, Inc.
(hereinafter “IFDI”), a Florida corporation;


 


I.                                              REPRESENTATIONS


 


A. The Company represents
that


 


1)           it is a registered
open-end management investment company (mutual fund), and


 


2)           the shares of each of
its classes of shares (“Fund”) and of each sub-class thereof (“Class”), if any,
are, as of the date of the effectiveness of this Agreement as to each such Fund
or Class, registered with the Securities and Exchange Commission (“SEC”) and
qualified or otherwise authorized for sale in all states of the United States
as may be agreed upon. (As to any Fund or Class not registered with the
SEC and qualified or otherwise authorized for sale in all states of the United
States as may be agreed upon, this Agreement shall become effective as to such
Fund or Class upon such registration and qualification or authorization.)


 


B. IFDI represents that


 


1)           it
is a broker-dealer registered with the SEC and is duly qualified to offer
shares of the Company in all states in which the shares are currently qualified
or otherwise authorized for offer for sale;


 


2)           it is a member of the
National Association of Securities Dealers, Inc. (“NASD”);


 


3)           it does not engage in
the retail sale of Company shares, but rather maintains agreements with other
registered broker-dealers, authorizing such broker-dealers to offer Company
shares to the public;


 


4)           it maintains and
enforces procedures reasonably designed to achieve compliance with applicable
securities laws, rules and regulations including the Rules of the
NASD, including those related to the review and approval of advertising and sales
literature used in solicitation of orders to buy Company shares, and it files,
when applicable, such advertising and sales literature with the NASD.


 


II.                                         APPOINTMENT
OF UNDERWRITER and OBLIGATIONS


 


The Company hereby, as
applicable, appoints IFDI or continues the appointment of IFDI, and IFDI, as
applicable, agrees to act or continues to act, as the Company’s principal
underwriter under the terms and provisions of this Agreement.


 


A.                         Company
agrees


 


1) to use its best
efforts to register from time to time under the Securities Act of 1933 (the “Securities
Act”) adequate amounts of its shares for sale to the public through
broker-dealers with which 


 


 

















 


IFDI contracts and to
qualify or to permit IFDI to qualify such shares for offering to the public in
such states as may from time to time be agreed upon;


 


2) to immediately advise
IFDI (i) when any post-effective amendment to its registration statement
or any further amendment or supplement thereto or any further registration
statement or amendment or supplement thereto becomes effective, (ii) of
any request by the SEC for amendments to the registration statement(s) or
any then effective prospectus or for additional information, (iii) of the
issuance by the SEC of any stop-order suspending the effectiveness of the
registration statement or the initiation of any proceedings for that purpose,
and (iv) of the happening of any event which makes untrue any material
statement made in the registration statement or any then effective prospectus
or which, in the opinion of counsel for the Company, requires the making of a
change in the registration statement or any then effective prospectus in order
to make the statements therein not misleading; in case of the happening at any
time of any event which materially affects the Company or its securities and
which should be set forth in a supplement to or an amendment of any then
effective prospectus in order to make the statements therein not misleading, to
prepare and furnish to IFDI such amendment or amendments to that prospectus as
will correct the prospectus so that as corrected it will not contain, or such
supplement or supplements to that prospectus which when read in conjunction
with that prospectus will make the combined information not contain any untrue
statement of a material fact or any omission to state any material fact
necessary in order to make the statements in that prospectus not misleading; if
any time the SEC shall issue any stop-order suspending the effectiveness of the
registration statement, to make every reasonable effort to obtain the prompt
lifting of such order; and, before “filing any amendment to the, registration
statement or to any then effective prospectus, to furnish IFDI with a copy of
the proposed amendment;


 


2)           to advise IFDI of the
net asset value of the shares of each of its Funds and Classes, as applicable,
as often as computed and to furnish to IFDI as soon as practical such
information as may be reasonably requested by IFDI in order that it may know
all of the facts necessary to provide for the sale of shares of the Company;


 


3)           to pay or cause to be
paid all expenses incident to the issuance, transfer, registration and delivery
of its shares, all taxes in connection therewith, costs and expenses incident
to preparing and filing any registration statements and prospectuses and any
amendments or supplements to a registration statement or a prospectus,
statutory fees incidental to the registration of additional shares with the
SEC, statutory fees and expenses incurred in connection with any Blue Sky law
qualifications undertaken by or at the request of IFDI, and the fees and
expenses of the Company’s counsel, accountants or any other experts used in
connection with the foregoing; and


 


4)           not without the consent
of IFDI to offer any of its shares for sale directly or to any persons or
corporations other than through IFDI, except only


 


a)            the reinvestment of
dividends and/or distributions or their declaration in shares of the Company,
in optional form or otherwise;


 


b)           the issuance of
additional shares to stock splits or stock dividends;


 


c)            sale of shares to
another investment or securities holding company in the process of purchasing
all or a portion of its assets;


 


 


2

















 


d)          in connection with an
exchange of shares of the Company for shares in another investment or
securities holding company;


 


e)            the sale of shares to
registered unit investment trusts; or


 


f) in
connection with the exchange of one Fund’s shares for shares of another Fund of
the Company.


 


B.                                      IFDI
agrees


 


1)           to
offer Company shares in such states as may be agreed upon through
broker-dealers which are members of the NASD on such terms as are not
inconsistent with this Agreement;


 


2)           in
offering shares through other broker-dealers to comply with the provisions of
the Declaration of Trust and Bylaws of the Company and with the provisions
stated in its applicable then current prospectus(es);


 


3)           timely
to inform the Company of any action or proceeding to terminate, revoke or
suspend IFDI’s registration as a broker-dealer with the SEC, membership in the
NASD, or authority with any state securities commission to offer Company
shares; and


 


4)           to
pay the cost of all sales literature, advertising and other materials which it
may at its discretion use in connection with the sale of Company shares,
including the cost of reports to the shareholders of the Company in excess of
the cost of reports to existing shareholders and the cost of printing the
prospectus(es) furnished to it by the Company.


 


III. TERMS FOR SALE OF SHARES


 


A.                                          It
is mutually agreed that


 


1)           IFDI shall act as
principal in all matters relating to promotion and sale of Company shares,
including the preparation and use of all advertising, sales literature and
other promotional materials, and shall make and enter into all other
arrangements, agreements and contracts as principal on its own account and not
as agent for the Company. Title to shares issued and sold by the Company
through IFDI shall pass directly from the Company to the broker-dealer or
investor; except provided, however, that IFDI may, if so agreed by IFDI and the
Company, act as agent of the Company without commission on repurchase of shares
of the Company;


 


2)                              certificates
for shares shall not be created or delivered by the Company in any case in
which the purchase is pursuant to any provisions of the Company described in
its applicable then current prospectus(es) under the terms of which
certificates are not to be issued to the shareholder. Shares sold through IFDI
shall be registered in such name or names and amounts as the selling
broker-dealer or instructor may request from time to time, and all shares when
so paid for and issued shall be fully paid and non-assessable; and


 


 

















 


3)                              the
offering price at which shares of the Company may be sold through IFDI shall
include such selling commission as may be applicable to that Class and as
may be fixed from time to time by IFDI but shall not be in excess of 8.5
percent of the offering price. IFDI shall retain any such sales commission and
may re-allow all or any part of the sales commission to selected brokers and
dealers who sell shares of the Company. IFDI may designate, reduce or eliminate
its selling commissions in certain sales or exchanges to the extent described
in the applicable then current prospectus(es) of the Company and in accordance
with Section 22(d) of the Investment Company Act of 1940 and any
rules, regulations or orders of the SEC thereunder.


 


IV. THE PLAN


 


 


A.          It
is mutually acknowledged that the Company has adopted a plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended (a “Plan”), which Plan is
applicable to certain shares that the Company may in the future adopt Plans
applicable to certain Funds-and Classes, respectively.


 


B.               With
respect to any Fund or Class as to which the Company has adopted a Plan,
pursuant to that Plan, each day the Company shall pay to IFDI a distribution
fee and/or a service fee at the maximum rates and under the terms and
conditions set forth in the applicable Plan, as amended from time to time, or
such lesser amount as the Company and IFDI may agree.


 


C.              The
Company shall, after excluding from the redemption proceeds that portion
represented by the reinvestment of dividends and distributions and the appreciation
of the value of Fund shares being redeemed, promptly pay IFDI an amount, if
any, equal to the percent of the amount invested as determined by IFDI and as
is then stated in the Company’s current prospectus applicable to the shares
redeemed (the “contingent deferred sales charge”). For purposes of determining
the applicable contingent deferred sales charge, if any: the redemptions shall
be deemed in order of investment made when more than one investment has been
made and when the shares being redeemed were acquired by exchange of shares of
another Fund or Class of the Company, or corresponding class of another
registered investment company for which IFDI or its affiliate serves as
principal underwriter, the investment shall be deemed as if it had been made
when the Company’s shares were first purchased, and the applicable contingent
deferred sales charges, if any, shall be with respect to the amount originally
invested in Company shares; and provided that any contingent deferred sales
charge shall be determined in accordance with and in the manner set forth in
the applicable then current prospectus and any applicable Order or Rule issued
by the SEC.


 


D.              It is contemplated
that IFDI may incur expenses substantially in advance of receiving the
distribution fee, if any, that may be applicable to the payment of such
commissions and expenses. IFDI recognizes that such payments are at its risk
and that this Agreement may be terminated or not continued as hereinafter
provided without the payment to it of any further distribution fees or service
fees whatsoever and without the payment of any penalty. The contingent deferred
sales charges, if any, shall, however, be payable to IFDI with respect to all
subject sales made prior to the termination of this Agreement.


 


E.                IFDI
shall at least quarterly provide to the Company’s board of directors a written
report with respect to each Fund or Class, as applicable, of the amounts of the
distribution and/or service fees expended and the purposes for which these
expenditures were made. IFDI shall in addition furnish to the


 


 

















 


board of directors
of the Company such information as may be requested or as may be necessary to
an informed determination by the directors of whether or not the directors
should continue the Company’s Plan(s) and continue this Agreement _ and to
determine whether there is reasonable likelihood that the Plan(s) and this
Agreement will benefit the Company and its shareholders affected by such
Plan(s).


 


V.                                      INDEMNIFICATION


 


A. The Company
agrees with IFDI for the benefit of IFDI and each person, if any, who controls
IFDI within the meaning of Section 15 of the Securities Act and each and
all and any of them, to indemnify and hold harmless IFDI and any such
controlling person from and against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, under any other statute, at common law or otherwise,
and to reimburse the underwriter and such controlling persons, if any, for any legal
or other expenses (including the cost of any investigation and preparation)
reasonably incurred by them or any of them in connection with any litigation
whether or not resulting in any liability, insofar as such losses, claims,
damages, liabilities or litigation arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or any prospectus or any amendment thereof or supplement
thereto or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
indemnity agreement shall not apply to amounts paid in settlement of any such
litgation if such settlement is effected without the consent of the Company or
to any such losses, claims, damages, liabilities or litigation arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any registration statement or prospectus or any amendment
thereof or supplement thereto, or arising out of or based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, which statement or
omission was made in reliance upon information furnished in writing to the
Company by IFDI for inclusion in any registration statement or any prospectus
or any amendment thereof or supplement thereto. IFDI and each such controlling
person shall promptly, after the complaint shall have been served upon IFDI or
such controlling person in any litigation against IFDI or such controlling
person in respect of which indemnity may be sought from the Company on account
of its agreement contained in this paragraph, notify the Company in writing of
the commencement thereof. The omission of IFDI or such controlling person so to
notify the Company of any such litigation shall relieve the Company from any
liability which it may have to IFDI or such controlling person on account of
the indemnity agreement contained in this paragraph but shall not relieve the
Company from any: liability which it may have to IFDI or controlling person
otherwise than on-account of the indemnity agreement contained in this
paragraph. In case any such litigation shall be brought against IFDI or any
such controlling person and the underwriter or such controlling person shall
notify the Company of the commencement thereof, the Company shall be entitled
to participate in (and, to the extent that it shall wish, to direct) the
defense thereof at its own expense but such defense shall be conducted by
counsel of good standing and satisfactory to IFDI or such controlling person or
persons, defendant or defendants in the litigation. The indemnity agreement of
the Company contained in this paragraph shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of IFDI
or any such controlling person and shall survive any delivery of shares of the
Company. The Company agrees to notify IFDI promptly of the commencement of any
litigation or proceeding against it or any of its officers or directors of
which it may be advised in connection with the issue and sale of its shares.


 


B.               Anything
herein to the contrary notwithstanding, the agreement in Section A of this
article, insofar as it constitutes a basis for reimbursement by the Company for
liabilities (other than payment by the


 


 


5

















 


Company of
expenses incurred or paid in the successful defense of any action, suit or
proceeding) arising under the Securities Act, shall not extend to the extent of
any interest therein of any person who is an underwriter or a partner or
controlling person of an underwriter within the meaning of Section 15 of
the Securities Act or who, at the date of this Agreement, is a director of the
Company, except to the extent that an interest of such character shall have
been determined by a court of appropriate jurisdiction the question of whether
or not such interest is against public policy as expressed in the Securities
Act.


 


C.              IFDI
agrees to indemnify and hold harmless the Company and its directors and such
officers as shall have signed any registration statement from and against any
and all losses, claims, damages or liabilities, joint or several, to which the
Company or such directors or officers may become subject under the Securities
Act, under any other statute, at common law or otherwise, and will reimburse
the Company or such directors or officers for any legal or other expenses
(including the cost of any investigation and preparation) reasonably incurred
by it or them or any of them in connection with any litigation, whether or not
resulting in any liability insofar as such losses, claims, damages, liabilities
or litigation arise out of, or are based upon, any untrue statement or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which statement or
omission was made in reliance upon information furnished in writing to the
Company by IFDI for inclusion in any registration statement or any prospectus,
or any amendment thereof or supplement thereto, or which statement was made in,
or the alleged omission was from, any advertising or sales literature
(including any reports to shareholders used as such) which relate to the
Company.


 


IFDI
shall not be liable for amounts paid in settlement of any such litigation if
such settlement was effected without its consent. The Company and its directors
and such officers, defendant or defendants, in any such litigation shall,
promptly after the complaint shall have been served upon the Company or any
such director or officer in any litigation against the Company or any such
director or officer in respect of which indemnity may be sought from IFDI on
account of its agreement contained in this paragraph, notify IFDI in writing of
the commencement thereof. The omission of the Company or such director or
officer so to notify the underwriter of any such litigation shall relieve IFDI
from any liability which it may have to the Company or such director or officer
on account of the indemnity agreement contained in this  paragraph, but shall not relieve
IFDI from any liability which it may have to the Company or such director or
officer otherwise than on account of the indenmity agreement contained in this
paragraph. In case any such litigation shall be brought against the Company or
any such officer or director and notice of the commencement thereof shall have
been so given to IFDI, IFDI shall be entitled to participate in (and, to the
extent that it shall wish, to direct) the defense thereof at its own expense,
but such defense shall be conducted by counsel of good standing and
satisfactory to the Company. The indemnity agreement of IFDI contained in this
paragraph shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company and shall survive any
delivery of shares of the Company. IFDI agrees to notify the Company promptly
of the commencement of any litigation or proceeding against it or any of its
officers or directors or against any such controlling person of which it maybe
advised, in connection with the issue and sale of the Company’s shares.


 


D.              Notwithstanding
any provision contained in this Agreement, no party hereto and no person or
persons in control of any party hereto shall be protected against any liability
to the Company or its security folders to which they would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of their duties or by reason of their reckless disregard of their
obligations and duties under this Agreement.


 


 

















 


VI. OTHER TERMS


 


A.              This
Agreement shall not be deemed to limit IFDI from acting as underwriter, broker
and/or dealer for any other mutual fund, from engaging in any other aspects of
the securities business, whether or not such may be deemed in competition with
the sale of shares of the Company, and to carry on any other lawful business
whatsoever.


 


B.               Except
as expressly provided in Article V and hereinabove, the agreements herein
set forth have been made and are made solely for the benefit of the Company and
IFDI, and the persons expressly provided for in Article V, their
respective heirs and successors, personal representatives and assigns, and
except as so provided, nothing expressed or mentioned herein is intended or
shall be construed to give any person, firm or corporation other than the
Company, IFDI-and the
persons expressly provided for in Article V any legal or equitable right,
remedy or claim under or in respect of this Agreement or any representation,
warranty or agreement herein contained. Except as so provided, the term “heirs,
successors, personal representatives and assigns” shall not include any
purchaser of shares merely because of such purchase.


 


C.              This
Agreement shall continue in effect, unless terminated as hereinafter provided,
for a period of one (1) year and thereafter only if such continuance is
specifically approved at least annually by the Board of Directors, including
the vote of a majority of the directors who are not parties to the Agreement or
interested persons” (as defined in the Investment Company Act of 1940) or any
such party and who have no direct or indirect financial interest in the
operation of any Plan or any agreement relating to that Plan (hereafter the “Plan
directors”), cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated by IFDI at any time without
penalty upon giving the Company sixty (60) days’ written notice (which notice
may be waived by the Company) and may be terminated by the Company at any time
without penalty upon giving IFDI sixty (60) days’ written notice (which notice
may be waived by IFDI), provided that such termination by the Company shall be
directed or approved by the vote of a majority of the Plan directors, or by the
vote of a majority (as defined in the Investment Company Act of 1940) of the
outstanding voting securities of a Fund with respect to that Fund. This
Agreement shall automatically terminate in the event of its assignment, the
term “assignment” for this purpose having the meaning defined in Section 2(a)(4) of
the Investment Company Act of 1940 and applicable Rules thereunder.


 


D. This Agreement shall be governed and construed in
accordance with the laws of Kansas.


 


 


[this space
intentionally left blank]


 


 


7

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their respective
duly authorized officers and their corporate seals to be affixed as of the day
and year first above written.


 


	
   

  	
  Ivy Funds

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kristen A.
  Richards

  	
   

  
	
   

  	
   

  	
  Kristen A. Richards,
  Vice President

  
	
   

  	
   

  	
  and Secretary

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Daniel C. Schulte

  	
   

  
	
   

  	
  Daniel C. Schulte,
  Assistant Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
  IVY FUNDS DISTRIBUTOR,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas W.
  Butch

  	
   

  
	
   

  	
   

  	
  Thomas W. Butch,
  President

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Daniel C. Schulte

  	
   

  
	
   

  	
  Daniel C. Schulte, Secretary