MANAGEMENT AGREEMENT
TO: IPS ADVISORY, INC.
000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Dear Sirs:
IPS Funds (the "Trust") herewith confirms our agreement with
you.
The Trust has been organized to engage in the business of an
investment company. The Trust currently offers three series of
shares to investors, one of which is the IPS New Frontier Fund
(the "Fund").
Notwithstanding the Management Agreement by and between IPS
Advisory, Inc. ("IPS") and IPS Funds dated November 1, 1994,
which provides, among other things, that IPS shall act as the
sole investment adviser and provide operating services to the
Trust for every series of the Trust, the parties hereby agree to
enter into this Management Agreement regarding the provision by
IPS of investment advisory and certain other services to the Fund
as more fully set forth below. Accordingly, the Trust agrees with
you as follows upon the date of the execution of this Agreement.
1. ADVISORY SERVICES
You will regularly provide the Fund with such
investment advice as you in your discretion deem advisable and
will furnish a continuous investment program for each of the
Trust's series consistent with the respective series' investment
objectives and policies. You will determine the securities to be
purchased for the portfolio securities to be held or sold and the
portion of assets to be held uninvested by the Fund, subject
always to the Fund's investment objectives, policies and
restrictions, as each of the same shall be from time to time in
effect, and subject further to such policies and instructions as
the Trust's Board of Trustees (the "Board") may from time to time
establish. You will advise and assist the officers of the Trust
in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the
Board regarding the conduct of the business of the Trust.
2. ALLOCATION OF CHARGES AND EXPENSES
Except as provided below, you will pay all operating
expenses of the Fund, including the compensation and expenses of
any trustees, officers and employees of the Fund and of any other
persons rendering any services to the Trust; clerical and
shareholder service staff salaries; office space and other office
expenses; fees and expenses incurred by the Fund in connection
with membership in investment company organizations; legal,
auditing and accounting expenses; non-organizational expenses of
registering shares under federal and state securities laws;
insurance expenses; fees and expenses of the custodian, transfer
agent, dividend disbursing agent, shareholder service agent, plan
agent, administrator, accounting and pricing services agent and
underwriter of the Trust; expenses, including clerical expenses,
of issue, sale, redemption or repurchase of shares of the Trust;
the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and
statements of additional information for delivery to the Trust's
current and prospective shareholders; the cost of printing or
preparing stock certificates or any other documents, statements
or reports to shareholders; expenses of shareholders' meetings
and proxy solicitations; advertising, promotion and other
expenses incurred directly or indirectly in connection with the
sale or distribution of the Fund's shares; and all other
operating expenses not specifically assumed by the Fund.
Notwithstanding the foregoing, you will not be
responsible for any fees incurred by the Fund if the Fund enters
into an Agreement for Use of Brokerage Commissions with Fidelity
Capital Markets, a division of National Financial Services
Corporation or a similar agreement with any other party to pay
fees charged by Fidelity Funds Network, Schwab OneSource,
Waterhouse Investors Fund Family Network or similar one-stop
mutual fund share brokerage services (the "Service Fees") paid by
the Fund through brokerage/services arrangements, or any other
operating expenses that the Fund notifies you in writing are paid
by the Fund through brokerage/services arrangements (the
"Brokerage/Services Arrangements").
The Fund will pay all brokerage fees and commissions,
taxes, interest, expenses incurred by the Fund in connection with
the organization and initial registration of shares of the Fund
series of the Trust, and such extraordinary or non-recurring
expenses as may arise, including litigation to which the Fund may
be a party and indemnification of the Fund's trustees and
officers with respect thereto. You may obtain reimbursement from
the Fund, at such time or times as you may determine in your sole
discretion, for any of the expenses advanced by you, which the
Fund is obligated to pay, and such reimbursement shall not be
considered to be part of your compensation pursuant to this
Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to
be made as provided in this Agreement, the Fund will pay you, as
of the last business day of each month, a fee at the annual rate
of 1.40% of the average value of the daily net assets of the Fund
to and including $100,000,000, 1.15% of such assets from
$100,000,000 to and including $250,000,000, and .90% of such
assets in excess of $250,000,000.
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The average value of the daily net assets of the Fund
shall be determined pursuant to the applicable provisions of the
Declaration of Trust of the Trust or a resolution of the Board,
if required. If, pursuant to such provisions, the determination
of net asset value of the Fund is suspended for any particular
business day, then for the purposes of this paragraph, the value
of the net assets of the series as last determined shall be
deemed to be the value of the net assets as of the close of the
business day, or as of such other time as the value of the Fund's
net assets may lawfully be determined, on that day. If the
determination of the net asset value of the Fund has been
suspended for a period including such month, your compensation
payable at the end of such month shall be computed on the basis
of the value of the net assets of the Fund as last determined
(whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio
securities for the Fund, it is understood that you will arrange
for the placing of all orders for the purchase and sale of
portfolio securities for the account with brokers or dealers
selected by you, subject to review of this selection by the Board
from time to time. You will be responsible for the negotiation
and the allocation of principal business and portfolio brokerage.
In the selection of such brokers or dealers and the placing of
such orders, you are directed at all times to seek for the series
the best qualitative execution, taking into account such factors
as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and
responsiveness of the broker or dealer and the brokerage and
research services provided by the broker or dealer.
You should generally seek favorable prices and
commission rates that are reasonable in relation to the benefits
received. In seeking best qualitative execution, you are
authorized to select brokers or dealers who also provide
brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) to the
Trust and/or the other accounts over which you exercise
investment discretion. You are authorized to pay a broker or
dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund
which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if you
determine in good faith that the amount of the commission is
reasonable in relation to the value of the brokerage and research
services provided by the executing broker or dealer.
Except as provided below, you are also authorized to
engage in the Brokerage/Services Arrangements on behalf of the
Fund, subject to the best qualitative execution requirements set
forth above. Notwithstanding the foregoing, any payments through
the Brokerage/Services Arrangements must be approved by the
Trust's Board of Trustees and be the product of arms-length
negotiation, must directly and exclusively benefit the Fund and
may only be for any one or a combination of the following: the
Service Fees, administrative fees, accounting fees, consulting
fees, printing fees, independent trustee expenses, proxy
solicitation expenses, association membership fees, insurance
premiums, interest expenses and taxes.
Brokerage determinations may be viewed in terms of
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either a particular transaction or your overall responsibilities
with respect to the Fund and to accounts over which you exercise
investment discretion. The parties understand and acknowledge
that, although the information may be useful to the parties, it
is not possible to place a dollar value on such information. The
Board shall periodically review the commissions paid by the Fund
to determine if the commissions paid over representative periods
of time were reasonable in relation to the benefits to the Fund.
Consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., and subject to
seeking best qualitative execution as described above, you may
give consideration to sales of shares of the Fund as a factor in
the selection of brokers and dealers to execute Fund portfolio
transactions.
Subject to the provisions of the Investment Company Act
of 1940, as amended, and other applicable law, you or any of your
affiliates may retain compensation in connection with effecting
the Fund's portfolio transactions, including transactions
effected through others. If any occasion should arise in which
you give any advice to clients of yours concerning the shares of
the Fund, you will act solely as investment counsel for such
client and not in any way on behalf of the Fund. Your services
to the Fund pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment
advice, management and other services to others, including other
registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you
to be accurate and reliable. Except as may otherwise be required
by the Investment Company Act of 1940 or the rules thereunder,
neither you nor your shareholders, officers, directors,
employees, agents, control persons or affiliates of any thereof
shall be subject to any liability for, or any damages, expenses
or losses incurred by the Trust or the Fund in connection with,
any error of judgment, mistake of law, any act or omission
connected 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 your duties under this
Agreement, or by reason of reckless disregard by any of such
persons of your obligations and duties under this Agreement.
Any person, even though also a director, officer,
employee, shareholder or agent of you, who may be or become an
officer, director, trustee, employee or agent of the Trust or the
Fund, shall be deemed, when rendering services to the Trust or
the Fund or acting on any business of the Trust or the Fund
(other than services or business in connection with your duties
hereunder), to be rendering such services to or acting solely for
the Trust or the Fund and not as a director, officer, employee,
shareholder or agent of you, or one under your control or
direction, even though paid by you.
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6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its
execution and shall remain in force for a period of two (2) years
from the date of its execution, and from year to year thereafter,
subject to annual approval by (i) the Board or (ii) a vote of a
majority (as defined in the Investment Company Act of 1940) of
the outstanding voting securities of the Fund, provided that in
either event continuance is also approved by a majority of the
trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, of you or the Trust, by a vote
cast in person at a meeting called for the purpose of voting such
approval.
If the shareholders fail to approve the Agreement in
the manner set forth above, upon request of the Board, you will
continue to serve or act in such capacity for the Fund for the
period of time pending required approval of a new agreement with
you or a different adviser or other definitive action; provided
that the compensation to be paid by the Trust to you for your
services to and payments on behalf of the Fund will be equal to
the lesser of your actual costs incurred in furnishing such
services and payments or the amount you would have received under
this Agreement for furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated without the payment of any penalty by the Board, by a
vote of a majority of the outstanding voting securities of the
Fund or by you. This Agreement shall automatically terminate in
the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the
names "IPS" and "New Frontier" belong to you, and that the Trust
is being granted a limited license to use such words in the name
of the Trust and the Fund. In the event you cease to be the
adviser to the Fund, the Trust's right to the use of the names
"IPS" and "New Frontier" shall automatically cease on the
thirtieth day following the termination of this Agreement. The
right to the name may also be withdrawn by you during the term of
this Agreement upon thirty (30) days' written notice by you to
the Trust. Nothing contained herein shall impair or diminish in
any respect, your right to use the names "IPS" and "New Frontier"
in the name of, or in connection with, any other business
enterprises with which you are or may become associated. There
is no charge to the Trust for the right to use these names.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this
Agreement shall be effective until approved by the Board,
including a majority of the trustees who are not interested
persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if
required under current interpretations of the Act by the
Securities and Exchange Commission) by vote of the holders of a
majority of the outstanding voting securities of the Fund.
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9. LIMITATION OF LIABILITY TO TRUST PROPERTY
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 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 the State of Ohio.
10. 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.
11. 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 Investment Company Act of
1940, as amended (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.
12. 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 the address of the Trust and your address for this
purpose shall be 000 X. Xxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxx 00000.
13. COUNTERPARTS
This Agreement may be executed 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.
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14. 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.
15. CAPTIONS
The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction
or effect.
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If you are in agreement with the foregoing, please sign
the form of acceptance on the accompanying counterpart of this
letter and return such counterpart to the Trust, whereupon this
letter shall become a binding contract upon the date thereof.
Yours very truly,
ATTEST: IPS FUNDS
___________________________ By:_______________________________
Xxxxxx Xxxxx, Secretary Xxxxxxx X'Xxxxx, President
Dated:______________, 1998
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: IPS ADVISORY, INC.
____________________________ By:_______________________________
Xxxxxx Xxxxx, Secretary Xxxxxxx X'Xxxxx, President
Dated:______________, 1998
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