Exhibit 10.16


 


 


ACCOUNTING AND ADMINISTRATIVE SERVICES AGREEMENT


 


AGREEMENT
is made as of the 25th day of August, 2004, by and between Ivy Funds (the “Trust”),
a Massachusetts Business Trust, and Waddell & Reed Services Company (“WRSCO”),
a Missouri corporation,


 


WITNESSETH:


 


WHEREAS,
the Trust wishes to appoint WRSCO to be its Accounting Services Agent and to
perform certain administrative services with respect to each of its series
listed in Appendix A (each, a “Fund”) upon and subject to the terms and provisions
of this Agreement;


 


NOW
THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties agree as follows:


 


A.                                 Appointment of WRSCO as Accounting Services
Agent and Administrator for the Trust; Acceptance.


 


(1) 
The Trust hereby appoints WRSCO to act as Accounting Services Agent and
Administrator for the Funds upon and subject to the terms and provisions of
this Agreement.


 


(2) 
WRSCO hereby accepts the appointment as Accounting Services Agent and
Administrator for the Funds and agrees to act as such, upon and subject to the
terms and provisions of this Agreement.


 


B.                                  Duties of WRSCO.


 


WRSCO
shall perform such duties as set forth in this Paragraph B as agent for and on
behalf of the Trust.


 


(1) 
WRSCO shall at its expense provide bookkeeping and accounting services and
assistance, including, in particular, the following services as are required by
the Funds:


 


a)            maintaining the registration or qualification
of the Funds and their shares under state “Blue Sky” or securities laws and
regulations, provided that the Funds shall pay all related filing fees and
registration or qualification fees;


b)           record the current days’ trading activity and
such other proper bookkeeping entries as are necessary for determining that day’s
net asset value for the Funds, including pricing daily the value of the shares
of the Funds;


c)            assisting the Funds and third party
solicitors (if any) in connection with soliciting and gathering shareholder
proxies;


d)           preparing the Funds’ U.S. Federal, state and
local income tax returns, provided that the Funds shall pay all charges for
services and expenses of the Funds’ independent auditors in reviewing such
returns;


e)            preparing the financial information for the
Funds’ prospectuses, statements of additional information and periodic reports
to shareholders, provided that the Funds shall pay all charges for services and
expenses of the Funds’ independent auditors;


 


 

















 


f)               preparing Form N-SAR, Form N-CSR, Form N-PX
and Form N-Q, or such other forms as the Securities and Exchange
Commission (the “SEC”) from time to time may prescribe under the Investment
Company Act of 1940, as amended (the “1940 Act”);


g)            in coordination with the Funds’ legal
counsel, preparing and filing with the SEC of the Funds’ registration statement
(including prospectuses and statements of additional information), and any
amendments or supplements that may be made from time to time, and preparing and
filing with the SEC of notices and proxy materials for meetings of
shareholders, provided that the Funds shall pay all charges for services and
expenses of the Funds’ outside legal counsel;


h)            assisting in the printing of the Funds’
prospectuses, periodic reports to shareholders and proxy materials;


i)                rendering statements or copies of records for
the Funds from time to time as requested by the Trust (see Appendix B);


j)               facilitating audits of accounts by the Trust’s
independent auditors or by any other auditors employed or engaged by the Trust
or by any regulatory body with jurisdiction over the Trust;


k)           computing each Fund’s net asset value per
share, and, if applicable, its public offering price, total returns and yields,
and notifying the Trust and such other persons as the Trust may reasonably
request of the net asset value per share, the public offering price and/or the
total return yield; and


l)                providing executive, clerical and secretarial
personnel competent to carry out the above responsibilities.


 


(2) 
WRSCO shall maintain and keep current the accounts, books, records, and other
documents relating to the Funds’ financial and portfolio transactions as may be
required by rules and regulations of the SEC adopted under Sections 31(a) of
the 1940 Act.


 


(3) 
WRSCO shall cause the subject records of the Funds to be maintained and
preserved pursuant to the requirements under the 1940 Act.


 


(4) 
In pricing daily the value of shares of the Funds, WRSCO may make arrangements
with, and obtain the value of portfolio securities from, pricing services or
quotation services that are compensated by the Funds directly or indirectly
through the placement of portfolio transactions with broker-dealers who provide
such valuation or quotation services to WRSCO.


 


(5) 
WRSCO shall maintain duplicate copies, or information from which copies of the
records necessary to the preparation of the Funds’ financial statements and
valuations of its assets may be reconstructed. 
Such duplicate copies or information shall be maintained at a location
other than where WRSCO performs its normal duties hereunder so that in the event
the records established and maintained pursuant to the foregoing provisions of
this Section B are damaged or destroyed, WRSCO shall be able to provide
the services and assistance specified in this Section B.


 


(6) 
WRSCO will compute each Fund’s net asset value in a manner consistent with the
specific provisions of the Funds’ prospectuses. 
In general, such computation will be made by dividing the value of a
Fund’s portfolio securities, cash and any other assets, less its 


 


 


2

















 


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, WRSCO 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.


 


(7)   In the event any of WRSCO’s facilities or
equipment necessary for the performance of its duties hereunder is damaged,
destroyed or rendered inoperable by reason of fire, vandalism, riot, natural
disaster or otherwise, WRSCO will use its best efforts to restore all services
hereunder to the Funds and will not seek from the Funds additional compensation
to repair or replace damaged or destroyed facilities or equipment.  WRSCO shall also make and maintain
arrangements for emergency use of alternative facilities for use in the event
of the aforesaid destruction of or damage to its facilities.


 


C.                                 Compensation of WRSCO.


 


Each
Fund agrees to pay to WRSCO for its services under this Agreement, an amount
payable on the first day of the month as shown on the following table pertinent
to the average daily net assets of the Fund during the prior month:


 


	
  Fund’s
  Average Daily Net Assets for the Month

  	
   

  	
  Monthly Fee

  
	
   

  	
   

  	
   

  
	
  $    0 - $  10 million

  	
   

  	
  $

  	
  0

  	
   

  
	
  $  10 - $  25 million

  	
   

  	
  $

  	
  958

  	
   

  
	
  $  25 - $  50 million

  	
   

  	
  $

  	
  1,925

  	
   

  
	
  $  50 - $100 million

  	
   

  	
  $

  	
  2,958

  	
   

  
	
  $100 - $200 million

  	
   

  	
  $

  	
  4,033

  	
   

  
	
  $200
  - $350 million

  	
   

  	
  $

  	
  5,267

  	
   

  
	
  $350
  - $550 million

  	
   

  	
  $

  	
  6,875

  	
   

  
	
  $550
  - $750 million

  	
   

  	
  $

  	
  8,025

  	
   

  
	
  $750
  - $  1.0 billion

  	
   

  	
  $

  	
  10,133

  	
   

  
	
  $1.0
  billion and over

  	
   

  	
  $

  	
  12,375

  	
   

  



 


In
addition, for each class of shares in excess of one, the Fund pays WRSCO a
monthly per-class fee equal to 2.5% of the monthly base fee.


 


Each
Fund also pays monthly a fee paid at the annual rate of 0.01% or one basis
point for the first $1 billion of net assets with no fee charged for net assets
in excess of $1 billion.  This fee may be
voluntarily waived until Fund assets are at least $10 million.


 


 


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D.                                 Right of the Trust to Inspect; Ownership of
Records.


 


The
Trust will have the right under this Agreement to perform on-site inspection of
records and accounts, and audits directly pertaining to the Funds’ accounting
and portfolio records maintained by WRSCO hereunder at WRSCO’s facilities.  WRSCO will cooperate with the Trust’s
independent auditors or representatives of appropriate regulatory agencies and
furnish all reasonably requested records and data.  WRSCO acknowledges that these records are the
property of the Trust, and that it will surrender to the Trust all such records
promptly on request.


 


E.                                   Standard of Care; Indemnification.


 


WRSCO
will at all times exercise reasonable care and good faith in performing its
duties hereunder.  WRSCO shall incur no
liability to the Trust or the Fund in connection with its performance of
services hereunder, except to the extent that is does not comply with the
foregoing standards.  WRSCO will make
every reasonable effort and take all reasonably available measures to assure
the adequacy of its personnel, facilities and equipment as well as the accurate
performance of all services to be performed by it hereunder within, at a
minimum, the time requirements of any applicable statutes, rules or
regulations made in the Trust’s current registration statement as filed with
the SEC.


 


WRSCO
shall not be responsible for, and the Trust agrees to indemnify WRSCO for, any
losses, damages or expenses (including reasonable counsel fees and expenses) (i) resulting
from any claim, demand, action or suit not resulting from WRSCO’s failure to
exercise good faith or reasonable care and arising out of or in connection with
WRSCO’s duties on behalf of the Funds hereunder; (ii) for any delay, error
or omission by reason of circumstances beyond its control, including acts of
civil or military authority, national emergencies, labor difficulties (except
with respect to WRSCO’s employees), fire, mechanical breakdown beyond its
control, flood catastrophe, acts of God, insurrection, war, riots or failure
beyond its control of transportation, communication or power supply; or (iii) for
any action taken or omitted to be taken by WRSCO in good faith in reliance on
the accuracy of any information provided to it by the Trust or its trustees or
in reliance on any advice of counsel who may be internally employed counsel or
outside counsel for the Trust or advice of any independent accountant or expert
employed by the Trust with respect to the preparation and filing of any
document with a governmental agency or authority.


 


In
order for the rights to indemnification to apply, it is understood that if in
any case the Trust may be asked to indemnify or hold WRSCO harmless, the Trust shall
be advised of all pertinent facts concerning the situation in question, and it
is further understood that WRSCO will use reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present a claim for indemnification against the Trust.  The Trust shall have the option to defend
WRSCO against any claim which may be the subject of this indemnification and,
in the event that the Trust so elects, it will so notify WRSCO, and thereupon
the Trust shall take over complete defense of the claim, and WRSCO shall
sustain no further legal or other expenses in such situation for which WRSCO
shall seek indemnification under this paragraph.  WRSCO will in no case confess any claim or
make any compromise in any case in which the Trust will be asked to indemnify
WRSCO except with the Trust’s prior written consent.


 


 


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F.                                   Term of the Agreement; Taking Effect;
Amendments.


 


This
Agreement shall become effective at the start of business on the date hereof
and shall continue, unless terminated as hereinafter provided, for a period of
one (1) year and from year-to-year thereafter, provided that such
continuance shall be specifically approved as provided below.


 


This
Agreement shall go into effect, or may be continued, or may be amended, or a
new agreement covering the same topics between the Trust and WRSCO may be
entered into only if the terms of this Agreement, such continuance, the terms
of such amendment or the terms of such new agreement have been approved by the
Board of Trustees of the Trust, including the vote of a majority of the
trustees who are not “interested persons,” as defined in the 1940 Act, of
either party to this Agreement, the agreement to be continued, amendment or new
agreement, cast in person at a meeting called for the purpose of voting on such
approval.  Such a vote is hereinafter
referred to as a “disinterested trustee vote.”


 


Any
disinterested trustee’s vote shall, in favor of continuance, amendment or
execution of a new agreement, include a determination that:  (i) the Agreement, amendment, new
agreement or continuance in question is in the best interests of the Trust and
its shareholders; (ii) the services to be performed under the Agreement,
the Agreement as amended, new agreement or agreement to be continued, are
services required for the operation of the Fund; (iii) WRSCO can provide
services, the nature and quality of which are at least equal to those provided
by others offering the same or similar services; and (iv) the fees for
such services are fair and reasonable in the light of the usual and customary
charges made by others for services of the same nature and quality.


 


Nothing
herein contained shall prevent any disinterested trustee vote from being
conditioned on the favorable vote of the holders of a majority (as defined in
or under the 1940 Act) of the outstanding shares of the Funds.


 


G.                                 Termination.


 


(1) 
This Agreement may be terminated by WRSCO at any time without penalty upon
giving the Trust at least one hundred twenty (120) days’ written notice (which
notice may be waived by the Fund) and may be terminated by the Trust at any
time without penalty upon giving WRSCO at least sixty (60) days’ written notice
(which notice may be waived by WRSCO), provided that such termination by the
Trust shall be directed or approved by the vote of a majority of the Board of
Trustees of the Trust in office at the time or by the vote of the holders of a
majority (as defined in or under the 1940 Act) of the outstanding shares of the
Funds.


 


(2) 
On termination, WRSCO will deliver to the Trust or its designee all files,
documents and records of the Trust used, kept or maintained by WRSCO in the
performance of its services hereunder, including such of the Trust’s records in
machine readable form as may be maintained by WRSCO, as well as such summary
and/or control data relating thereto used by or available to WRSCO.


 


(3) 
In addition, on such termination or in preparation therefore at the request of
the Trust and at the Trust’s expense, WRSCO shall provide, to the extent that
its capabilities then 


 


 


5

















 


permit,
such documentation, personnel and equipment as may be reasonably necessary in
order for a new agent or the Trust to fully assume and commence to perform the
agency functions described in this Agreement with a minimum disruption to the
Funds’ activities.


 


(4) 
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 Act and the rules and regulations thereunder of the SEC.


 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the date and year first above written.


 


	
   

  	
   

  	
   IVY
  FUNDS

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Henry J. Herrmann

  	
   

  
	
   

  	
   

  	
   Henry
  J. Herrmann, President

  



 


 


	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Kristen
  A. Richards

  	
   

  	
   

  
	
   

  	
   Kristen
  A. Richards, Secretary

  	
   

  
				



 


 


	
   

  	
   

  	
   WADDELL & REED SERVICES COMPANY

  
	
   

  	
  By:

  	
  /s/ Michael D. Strohm

  	
   

  
	
   

  	
   

  	
   Michael D. Strohm, President

  



 


 


	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Daniel
  C. Schulte

  	
   

  	
   

  
	
   

  	
   Daniel
  C. Schulte, Secretary

  	
   

  
				



 


 


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Appendix A


 


Series of Ivy Funds


 


 


Effective
August 25, 2004 with respect to:


 


Ivy
Balanced Fund


Ivy
Bond Fund


Ivy
Cundill Global Value Fund


Ivy
Dividend Income Fund


Ivy
European Opportunities Fund


Ivy
Global Natural Resources Fund


Ivy
International Growth Fund


Ivy
International Balanced Fund


Ivy
International Core Equity Fund


Ivy
Mortgage Securities Fund


Ivy
Pacific Opportunities Fund


Ivy
Real Estate Securities Fund


Ivy
Small Cap Value Fund


Ivy
Value Fund


 


 


Effective
February 13, 2008 with respect to:


 


Ivy
Global Strategic Income Fund.


 


 


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Appendix B


 


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 on 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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