UNDERWRITING AGREEMENT
THIS AGREEMENT is made on ___________, 1998, by and between
IPS FUNDS, an Ohio business trust (the "Trust"), and SECURITIES
SERVICE NETWORK, INC., a Tennessee corporation ("Underwriter").
WHEREAS, the Trust is an investment company registered under
the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Underwriter is a broker-dealer registered with the
Securities and Exchange Commission and a member of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust and Underwriter are desirous of entering
into an agreement providing for the distribution by Underwriter
of shares of beneficial interest (the "Shares") of the following
series of shares of the Trust (the "Series"): IPS New Frontier
Fund;
NOW, THEREFORE, in consideration of the promises and
agreements of the parties contained herein, the parties agree as
follows:
1. APPOINTMENT. The Trust hereby appoints Underwriter as
its exclusive agent for the distribution of the Shares, and
Underwriter hereby accepts such appointment under the terms of
this Agreement. While this Agreement is in force, the Trust
shall not sell any Shares except on the terms set forth in this
Agreement. Notwithstanding any other provision hereof, the Trust
may terminate, suspend or withdraw the offering of Shares of any
Series whenever, in its sole discretion, it deems such action to
be desirable.
2. SALE AND REPURCHASE OF SHARES.
(a) Underwriter will have the right, as agent for the
Trust, to sell Shares at their net asset value to the public
against orders therefor.
(b) Underwriter will also have the right, as agent for
the Trust, to enter into dealer agreements with responsible
investment dealers, and to sell Shares to such investment dealers
against orders therefor at their net asset value (as defined in
subparagraph 2(d) hereof). Upon receipt of an order to purchase
Shares from a dealer with whom Underwriter has a dealer
agreement, Underwriter will promptly cause such order to be
filled by the Trust.
(c) Underwriter will also have the right to take, as
agent for the Trust, all actions which, in Underwriter's
judgment, are necessary to carry into effect the distribution of
the Shares.
(d) The net asset value of the Shares of each Series
shall be determined in the manner provided in the Trust's
effective Registration Statement on Form N-1A under the
Securities Act of 1933, as amended, including the then current
prospectus and statement of additional information (the
"Registration Statement"), and when determined shall be
applicable to transactions as provided for in the Registration
Statement. The net asset value of the Shares of each Series
shall be calculated by the Trust or by another entity on behalf
of the Trust. Underwriter shall have no duty to inquire into or
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liability for the accuracy of the net asset value per share as
calculated.
(e) On every sale, the Trust shall receive the
applicable net asset value of the Shares promptly, but in no
event later than the tenth business day following the date on
which Underwriter shall have received an order for the purchase
of the Shares.
(f) Upon receipt of purchase instructions, Underwriter
will transmit such instructions to the Trust or its transfer
agent for registration of the Shares purchased.
(g) Nothing in this Agreement shall prevent
Underwriter or any affiliated person (as defined in the Act) of
Underwriter from acting as underwriter or distributor for any
other person, firm or corporation (including other investment
companies) or in any way limit or restrict Underwriter or any
such affiliated person from buying, selling or trading any
securities for its or their own account or for the accounts of
others for whom it or they may be acting; provided, however, that
Underwriter expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
(h) Underwriter, as agent of and for the account of
the Trust, may repurchase the Shares at such prices and upon such
terms and conditions as shall be specified in the Registration
Statement.
3. SALES OF SHARES BY THE TRUST. The Trust reserves the
right to issue any Shares at any time directly to the holders of
Shares ("Shareholders"), to sell Shares to its Shareholders or to
other persons approved by Underwriter at not less than net asset
value and to issue Shares in exchange for substantially all the
assets of any corporation or trust or for the shares of any
corporation or trust.
4. BASIS OF SALE OF SHARES. Underwriter does not agree to
sell any specific number of Shares. Underwriter, as agent for
the Trust, undertakes to sell Shares on a best efforts basis only
against orders therefor.
5. COMPLIANCE WITH NASD AND GOVERNMENT RULES.
(a) Underwriter will conform to the Rules of Fair
Practice of the NASD and the securities laws of any jurisdiction
in which it sells, directly or indirectly, any Shares.
(b) Underwriter, at its own expense, will pay the
costs incurred in establishing and maintaining its relationship
with the dealers selling the Shares. Underwriter will require
each dealer with whom Underwriter has a dealer agreement to
conform to the applicable provisions hereof and the Registration
Statement, and neither Underwriter nor any such dealers shall
withhold the placing of purchase orders so as to make a profit
thereby.
(c) Underwriter agrees to furnish to the Trust
sufficient copies of any agreements, plans or other materials it
intends to use in connection with any sales of Shares in adequate
time for the Trust to file and clear them with the proper
authorities before they are put in use, and not to use them until
so filed and cleared.
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(d) Underwriter, at its own expense, will qualify as
dealer or broker, or otherwise, under all applicable State or
federal laws required in order that Shares may be sold in such
States as may be mutually agreed upon by the parties.
(e) Underwriter shall not make, or permit any
representative, broker or dealer to make, in connection with any
sale or solicitation of a sale of the Shares, any representations
concerning the Shares except those contained in the then current
prospectus and statement of additional information covering the
Shares and in printed information approved by the Trust as
information supplemental to such prospectus and statement of
additional information. Copies of the then effective prospectus
and statement of additional information and any such printed
supplemental information will be supplied by the Trust to
Underwriter in reasonable quantities upon request.
6. RECORDS TO BE SUPPLIED BY TRUST. The Trust shall
furnish to Underwriter copies of all information, financial
statements and other papers which Underwriter may reasonably
request for use in connection with the distribution of the
Shares, and this shall include, but shall not be limited to, one
certified copy, upon request by Underwriter, of all financial
statements prepared for the Trust by independent public
accountants.
7. EXPENSES TO BE BORNE BY TRUST. The Trust will bear the
following expenses:
(a) preparation, setting in type, printing of
sufficient copies of the prospectus and statement of additional
information for distribution to shareholders, and the
distribution to shareholders of the prospectus and statement of
additional information;
(b) preparation, printing and distribution of reports
and other communications to shareholders;
(c) registration of the Shares under the federal
securities law;
(d) qualification of the Shares for sale in the
jurisdictions designated by Undewriter;
(e) qualification of the Trust as a dealer or broker
under the laws of jurisdictions designated by Underwriter as well
as qualification of the Trust to do business in any jurisdiction,
if Underwriter determines that such qualification is necessary or
desirable for the purpose of facilitating sales of the Shares;
(f) maintaining facilities for the issue and transfer
of the Shares;
(g) supplying information, prices and other data to be
furnished by the Trust under this Agreement; and
(h) any original issue taxes or transfer taxes
applicable to the sale or delivery of the Shares of certificates
therefor.
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8. SERVICES TO AND ACTIONS FOR TRUST, NOT UNDERWRITER.
Any person, even though also a director, officer, employee,
shareholder or agent of Underwriter, who may be or become an
officer, trustee, employee or agent of the Trust, shall be
deemed, when rendering services to the Trust or acting on any
business of the Trust (other than services or business in
connection with Underwriter's duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a
director, officer, employee, shareholder or agent, or one under
the control or direction of Underwriter, even though paid by it.
9. LIMITATION OF LIABILITY. Underwriter may rely on
information reasonably believed by it to be accurate and
reliable. Except as may otherwise be required by the Act or the
rules thereunder, neither Underwriter nor its shareholders,
officers, directors, employees, agents, control persons or
affiliates of any thereof (collectively, the "Underwriter's
Employees") shall be subject to any liability for, or any
damages, expenses or losses incurred by the Trust in connection
with, any error of judgment, mistake of law, any act or omission
in connection with or arising out of any services rendered under
or payments made pursuant to this Agreement or any other matter
to which this Agreement relates, except by reason of willful
misfeasance, bad faith or gross negligence on the part of any
such persons in the performance of the duties of Underwriter
under this Agreement or by reason of reckless disregard by any of
such persons of the obligations and duties of Underwriter under
this Agreement.
10. INDEMNIFICATION OF UNDERWRITER. Subject to and except
as otherwise provided in the Securities Act of 1933, as amended,
and the Act, the Trust shall indemnify each of Underwriter and
Underwriter's Employees (hereinafter referred to as a "Covered
Person") against all liabilities, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person
may be or may have been involved as a party or otherwise or with
which such person may be or may have been threatened, while the
underwriter for the Trust or one of Underwriter's Employees for
at least six years thereafter, by reason of being or having been
the underwriter for the Trust or one of Underwriter's Employees,
including but not limited to liabilities arising due to any
misrepresentation or misstatement in the Trust's prospectus,
other regulatory filings, and amendments thereto, or in other
documents originating from the Trust. In no case shall a Covered
Person be indemnified against any liability to which such Covered
Person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties of such Covered Person.
11. ADVANCES OF EXPENSES. The Trust shall advance
attorneys' fees or other expenses incurred by a Covered Person in
defending a proceeding to the full extent permitted by the
Securities Act of 1933, as amended, and the Act.
12. MAINTENANCE OF INSURANCE COVERAGE. If the Trust
obtains Errors & Omissions insurance, Underwriter shall be a
named insured party on the Trust's Errors & Omissions policies,
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which shall include coverage of Underwriter's officers and
employees. Underwriter shall pay its allocable share of the cost
of such policies in accordance with the provisions of the Act.
The scope of coverage, other than the amount of the deductible,
and amount of insurance limits applicable to the Trust on such
policies shall also be made applicable to Underwriter.
13. TERMINATION AND AMENDMENT OF THIS AGREEMENT. This
Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment. This Agreement may
be amended only if such amendment is approved (i) by Underwriter,
(ii) either by action of the Board of Trustees of the Trust or at
a meeting of the Shareholders of the Trust by the affirmative
vote of a majority of the outstanding Shares, and (iii) by a
majority of the Trustees of the Trust who are not interested
persons of the Trust or of Underwriter, by vote cast in person at
a meeting called for the purpose of voting on such approval.
Either the Trust or Underwriter may at any time
terminate this Agreement on sixty (60) days' written notice
delivered or mailed by registered mail, postage prepaid, to the
other party, or earlier by mutual written consent. Mutual
consent of early termination will not be unreasonably withheld,
provided a satisfactory, qualified substitute or successor trust
or underwriter is ready, willing and able to take over all
responsibilities, duties and continuing liabilities of the party
requesting termination of this Agreement.
14. EFFECTIVE PERIOD OF THIS AGREEMENT. This Agreement
shall take effect upon its execution and shall remain in full
force and effect for a period of two years from the date of its
execution (unless terminated automatically as set forth in
Section 12, and from year to year thereafter, subject to annual
approval (i) by Underwriter, (ii) by the Board of Trustees of the
Trust or a vote of a majority of the outstanding Shares, and
(iii) by a majority of the Trustees of the Trust who are not
interested persons of the Trust or of Underwriter, by vote cast
in person at a meeting called for the purpose of voting on such
approval.
15. LIMITATION OF TRUST'S LIABILITY. The term "IPS Funds"
means and refers to the Trustees from time to time serving under
the Trust's Declaration of Trust as the same may subsequently
thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, Shareholders,
nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Trust, as provided in the
Declaration of Trust of the Trust. The execution and delivery of
this Agreement have been authorized by the Trustees and
Shareholders of the Trust and signed by the officers of the
Trust, acting as such, and neither such authorization by such
Trustees and Shareholders nor such execution and delivery by such
officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust
as provided in its Declaration of Trust. A copy of the Agreement
and Declaration of Trust of the Trust is on file with the
Secretary of State of Ohio.
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16. NEW SERIES. The terms and provisions of this Agreement
shall become automatically applicable to any additional series of
the Trust established during the initial or renewal term of this
Agreement.
17. SUCCESSOR INVESTMENT COMPANY. Unless this Agreement
has been terminated in accordance with Paragraph 11, the terms
and provisions of this Agreement shall become automatically
applicable to any investment company which is a successor to the
Trust as a result of a reorganization, recapitalization or change
of domicile.
18. SEVERABILITY. In the event any provision of this
Agreement is determined to be void or unenforceable, such
determination shall not affect the remainder of this Agreement,
which shall continue to be in force.
19. QUESTIONS OF INTERPRETATION.
(a) This Agreement shall be governed by the laws of
the State of Ohio.
(b) Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the Act shall be resolved by
reference to such term or provision of the Act and to
interpretation thereof, if any, by the United States courts or in
the absence of any controlling decision of any such court, by
rules, regulations or orders of the Securities and Exchange
Commission issued pursuant to said Act. In addition, where the
effect of a requirement of the Act, reflected in any provision of
this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or
order.
20. NOTICES. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the
other party at such address as such other party may designate for
the receipt of such notice. Until further notice to the other
party, it is agreed that for this purpose the address of the
Trust shall be Suite 630, 000 Xxxxx Xxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000 and of the Underwriter shall be 0000 Xxxxxxxxx
Xxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000.
21. COUNTERPARTS. This Agreement may be in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
22. BINDING EFFECT. Each of the undersigned expressly
warrants and represents that he has the full power and authority
to sign this Agreement on behalf of the party indicated, and that
his signature will operate to bind the party indicated to the
foregoing terms.
23. FORCE MAJEURE. If Underwriter shall be delayed in its
performance of services or prevented entirely or in part from
performing services due to causes or events beyond its control,
including and without limitation, acts of God, interruption of
power or other utility, transportation or communication services,
acts of civil or military authority, sabotages, national
emergencies, explosion, flood, accident, earthquake or other
catastrophe, fire, strike or other labor problems, legal action,
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present or future law, governmental order, rule or regulation, or
shortages of suitable parts, materials, labor or transportation,
such delay or non-performance shall be excused and a reasonable
time for performance in connection with this Agreement shall be
extended to include the period of such delay or non-performance.
IN WITNESS WHEREOF, the Trust and Underwriter have each
caused this Agreement to be signed on its behalf, all as of the
day and year first above written.
ATTEST: IPS FUNDS
_______________________ By:____________________________
XXXXXX XXXXX, Secretary XXXXXXX X'XXXXX, President
ATTEST: SECURITIES SERVICE NETWORK,
INC.
____________________________ By:_____________________________
XXXXX X. XXXXXX, Senior Vice XXXXXX XXXXXX, President
President
