Ipex, Inc.: investment adviser

long-term investment strategy, which considers the selection of a target asset allocation the critical issue in an investment program. When we are working with a client to structure an investment program, IPEX usually will prepare an asset allocation study. We will prepare the study after we have helped the client define their investment objectives. The asset allocation study is our primary method of analysis in formulating investment advice on asset allocation. The asset allocation study incorporates the IPEX model for domestic equity, international equity and fixed income. These models are designed to be style neutral and reflect the broad investment market for each asset class. IPEX uses historical numbers as the basis for the inputs for the asset allocation study – expected return, standard deviation and covariance. The asset allocation study provides the client with an analysis of multiple target asset allocations for consideration. The analysis contains a range of returns for each target allocation as well as the probability of the allocation generating various target returns. All of the target allocations address the risk of loss by showing the negative returns that each target allocation may produce at various levels of probability. The IPEX summary of the analysis typically stresses the potential loss associated with each target allocation over different time periods. After the client selects a target allocation, IPEX works with the client to implement the target allocation. IPEX normally will encourage the client to consider using indexed or passive strategies for at least some portion of the portfolio, as we feel that indexing is a legitimate investment strategy. IPEX analyzes various investment products as part of this process. The analysis is based on historical data about each investment product and is both quantitative and qualitative. IPEX addresses a broad range of issues such as return, risk and style, when we analyze an investment product. Investment products are analyzed in comparison to relevant indices and peer groups, as well as in comparison to other portfolio holdings. When analyzing this data, IPEX carefully considers the losses that the investment products have experienced in down markets. The written analysis that IPEX prepares on each product has a specific section that addresses risk variables. Although the goal of all investment recommendations or decisions made by IPEX is to increase investment performance and reduce risk, no guarantees can be made. Regardless of how detailed the asset allocation and investment product analysis may be, all investors should be aware that past performance is no guarantee of future results. It is important for clients to understand that investing in securities involves risk of loss that they should be prepared to bear.

B. For each significant investment strategy or method of analysis you use, explain the material risks involved. If the method of analysis or strategy involves significant or unusual risks, discuss these risks in detail. If your primary strategy involves frequent trading of securities, explain how frequent trading can affect investment performance, particularly through increased brokerage and other transaction costs and taxes. The asset allocation studies that IPEX prepares are based upon a computer model that uses mean variance optimization. While this approach is generally accepted in the investment community, like any model, the inputs are critical. Different inputs will produce different results. The selection of the specific inputs for each of the variables is subjective and constitutes a risk. In addition, while these types of models generate expected rates of return, these rates of return are not predictions. There is tremendous uncertainty associated with expected rates of return, especially over short time periods; the shorter the time period, the greater the uncertainty. In order to mitigate these risks, IPEX encourages clients to focus on the range of returns that each target allocation can be expected to produce, rather than a specific expected rate of return. Furthermore, while various asset classes may have had low correlations and provided good diversification in the past, that is no guarantee that they will continue to do so in the future. It is important for clients to understand that an apparently well diversified portfolio is no guarantee against significant loss in the case of a sharp market downturn. C. If you recommend primarily a particular type of security, explain the material risks involved. If the type of security involves significant or unusual risks, discuss these risks in detail. IPEX does not recommend a particular type of security or investment product but rather a broad spectrum of investment products based upon the individual client’s needs. IPEX explains to all clients the risks associated with whichever type of security or investment product that IPEX recommends.

DISCIPLINARY INFORMATION

Describe any relationship or arrangement that is material to your advisory business or to your clients that you or any of your management persons have with any related person listed below. Identify the related person and if the relationship or arrangement creates a material conflict of interest with clients, describe the nature of the conflict and how you address it. 1. broker-dealer, municipal securities dealer or government securities dealer 2. investment company or other pooled investment product 3. other investment adviser or financial planner 4. futures commission merchant, commodity pool operator or trading advisor 5. banking or thrift institution 6. accountant or accounting firm 7. lawyer or law firm 8. insurance company or agency 9. pension consultant 10. real estate broker or dealer

11. sponsor or syndicator of limited partnerships With respect to number one above, IPEX treats Schwab Advisor Services as its preferred custodian to maintain custody of client assets and to process trades for client accounts. IPEX recommends Schwab Advisor Services to clients when we feel that their services are appropriate. Schwab Advisor Services is a division of Charles Schwab & Co Inc., a registered broker-dealer, member SIPC. No IPEX client is obligated to use Schwab Advisor Services as its custodian or to process trades through Schwab Advisor Services. IPEX clients use a number of different custodians. With respect to numbers two through 11 above, neither IPEX nor any of its management personnel have any relationship or arrangement with any such entities. d. If you recommend or select other investment advisers for your clients and you receive compensation directly or indirectly from those advisers that creates a material conflict of interest, or if you have other business relationships with those advisers that create a material conflict of interest, describe these practices and discuss the material conflicts of interest these practices create and how you address them. While IPEX recommends other investment advisors to our clients, IPEX does not receive compensation, directly or indirectly, from those advisers.

CODE OF ETHICS

In addition, IPEX will provide clients with a copy upon request. New IPEX clients are typically provided with a copy of our Code of Ethics at the inception of the consulting relationship, when they sign the IPEX Services Agreement. In addition, some new clients were already provided with the IPEX Code of Ethics at the time that they received a proposal from IPEX.

B. If you or a related person recommends to clients or buys or sells for client accounts, securities in which you or a related person has a material financial interest, describe your practice and discuss the conflicts of interest it presents. Describe how you address conflicts that arise. C. If you or a related person invests in the same securities (or related securities e.g., warrants, options) that you or a related person recommends to clients, describe your practice and discuss the conflicts of interest this presents and how you address the conflicts that arise in connection with personal trading. D. If you or a related person recommends securities to clients or buys or sell securities for client accounts, at or about the same time that you or a related person buys or sells the same securities for your own account, describe your practice and discuss the conflicts of interest it presents. IPEX personnel typically invest in mutual funds or utilize outside managers who have discretion. IPEX personnel do not directly invest in individual securities, other than Exchange Traded Funds. With regard to Item 11(B, C and D), IPEX has the potential for a conflict of interest only when buying or selling ETF securities for our client accounts. IPEX and its related persons avoid any potential conflicts of interest with ETF trades for client accounts by adhering to the policy set forth below. While IPEX does have discretion over a number of client accounts, the trading for the various accounts is done through multiple custodians and seldom on the same day. Typically, IPEX initiates discretionary trades to rebalance an account, replace a security (normally a mutual fund or ETF) or provide for a client withdrawal. The multi-custodians and varied trade dates make the possibility of front-running personal trades ahead of client trades unlikely. Nevertheless, IPEX has developed the following policy with regard to personal trading: 1. All IPEX employees provide a listing of all security holdings, excluding employee 401(k) plan accounts, to the CCO each quarter, within 15 days of quarter end. 2. The CCO reviews the security listings within 30 days of quarter end.

IPEX has adopted a Code of Ethics and a Personal Trading Policy expressing the firm’s commitment to ethical conduct. The IPEX Code of Ethics and Personal Trading Policy describe the firm’s fiduciary duties and responsibilities to clients and set forth the IPEX practice of monitoring the personal securities transactions of supervised persons with access to client information. IPEX personnel, and related persons, may buy or sell securities for their personal accounts that are identical to or different than the securities recommended to clients. However, no person employed by IPEX shall prefer his or her own interests to that of an IPEX client or make personal investment decisions based on the investment decisions of IPEX clients.

To supervise compliance with its Code of Ethics and Personal Trading Policy, IPEX requires that anyone associated with our firm report to the Chief Compliance Officer for review all holdings and transactions of reportable personal securities as required by securities laws. In addition, all IPEX personnel must obtain approval from the Chief Compliance Officer before directly or indirectly obtaining beneficial ownership in any security in an initial public offering or in a limited offering. IPEX requires that all individuals act in accordance with all applicable Federal and State regulations governing registered investment advisory practices. The IPEX Code of Ethics, Personal Trading Policy and Privacy Policy also include the firm’s policy prohibiting the use of material non-public information. Any individual who does not observe these provisions may be subject to discipline. There may be times when the interests of IPEX personnel correspond with the interests of our clients, and in such cases IPEX personnel may invest in the same securities that we recommend to our clients.

BROKERAGE PRACTICES

As IPEX does not typically trade individual securities, IPEX does not select or recommend broker-dealers for individual security transactions. If a client account or portion of a client’s account is managed by an individual money manager, then that money manager is usually responsible for selecting the broker dealer(s) for all of that manager’s security transactions. IPEX recommendations for broker-dealers usually address this issue along with the selection of a custodian, rather than as an independent issue. When asked to recommend a broker-dealer / custodian, IPEX will assess the client’s particular needs and recommend the broker-dealer /

custodian that we feel will best serve the client’s interests. In particular, IPEX seeks to recommend a broker-dealer / custodian that will hold client assets and execute transactions on terms that are, overall, most advantageous when compared to other available providers and their services. IPEX considers a wide range of factors, including:

Combination of transaction execution services and asset custody services Capability to execute, clear and settle trades Capability to facilitate transfers and payments to and from account Breadth of available investment products Reputation, financial strength and stability Whether the client needs an institutional trustee Whether the client needs to account for income and principal separately Whether the broker-dealer / custodian offers online accessibility to both the client and IPEX Whether the client expressed a preference for a particular custodian / broker-dealer Whether the fees assessed by the custodian / broker-dealer are reasonable and competitive, given the size of the account and the nature of the investment products in the account, as well as the willingness of the custodian / broker-dealer to negotiate their prices

IPEX considers the reasonableness of a custodian’s / broker-dealer’s compensation by comparing one firm’s transaction costs, ticket charges and cents per share commissions to the comparable charges assessed by other firms for similar sized accounts. IPEX recommends that our clients use Charles Schwab, a registered broker-dealer, member SIPC, as their qualified custodian, when we feel that their services are appropriate. Specifically, IPEX utilizes RIA services via Schwab Advisor Services, a division of Charles Schwab & Co Inc., a registered broker-dealer, member SIPC. IPEX is independently owned and operated and we are not affiliated with Schwab. If clients select Schwab as their custodian, Schwab will hold the assets in a brokerage account and buy and sell securities when the client, IPEX or a designated money manager, instruct them to. While IPEX may recommend that clients use Schwab as their custodian/broker, clients will instruct whether to do so and will open their account with Schwab by entering into an account agreement directly with Schwab. IPEX does not open the account for clients, although we may assist a client in doing so. No IPEX client is under any obligation to utilize Schwab Advisor Services as its custodian or to process trades for their account through Schwab Advisor Services. For IPEX client accounts maintained in Schwab’s custody, no separate custody charge is applied. Schwab receives its compensation, in part, through commissions or other transaction related fees for securities trades that are executed through Schwab or that settle into Schwab accounts.

1. Research and Other Soft Dollar Benefits. If you receive research or other products or services other than execution from a broker-dealer in connection with client securities transactions, disclose your practices and discuss the conflicts of interest they cause. Schwab Advisor Services is Schwab’s institutional division that serves independent investment advisory firms like IPEX. They provide IPEX and our clients with access to their institutional brokerage – trading, custody, reporting and related services – many of which are not typically available to Schwab retail customers. Schwab also makes available various support services. Some of those services help IPEX manage or administer our clients’ accounts, while others help IPEX manage our business. Schwab’s support services generally are available on an unsolicited basis and at no charge to IPEX as long as our clients collectively maintain a total of at least $10 million of their assets in accounts at Schwab. If IPEX clients collectively have less than $10 million in assets at Schwab, Schwab may charge quarterly service fees of $1,200. As long as IPEX clients collectively custody at least $10 million in assets at Schwab, whether or not future clients elect to custody their account at Schwab would not impact the IPEX relationship with Schwab. Following is a more detailed description of Schwab’s support services.

Services That Benefit You, Our Clients: Schwab’s institutional brokerage services include access to a broad range of investment products, execution of securities transactions and custody of client assets. The investment products available through Schwab include some to which IPEX might not otherwise have access or that would require a significantly higher minimum initial investment by our clients. The Schwab services described in this paragraph generally benefit clients and their account.

Services that May Not Directly Benefit you, Our Clients Schwab also makes available to IPEX other products and services that benefit IPEX but may not directly benefit you or your account. These products and services assist IPEX in managing and administering our clients’ accounts. They include investment research, both Schwab’s own and that of third parties. IPEX may use this research to service all or a substantial number of our clients’ accounts, including accounts not maintained at Schwab. In addition to investment research, Schwab also makes available software and other technology that:     

Provides access to client account data Facilitates trade execution Provides pricing and other market data Facilitates payment of our fees for our clients’ accounts Assists with back office functions, recordkeeping and client reporting

Services that Generally Benefit Only IPEX: Schwab also offers other services intended to help IPEX manage and further develop our business enterprise. These services include:   

Educational conferences and events Consulting on technology, compliance, legal and business needs Publications and conferences on practice management and business success

Schwab may provide some of these services itself. In other cases, it will arrange for third party vendors to provide the services to IPEX. Schwab may also discount or waive its fees for some of these services or pay all or a part of a third party’s fees. Schwab may also provide IPEX with other benefits, such as occasional business entertainment of IPEX personnel. No IPEX client is under any obligation to utilize Schwab Advisor Services as its custodian or to process trades for their account through Schwab Advisor Services. IPEX clients are free to use the broker and custodian of their choice. IPEX clients use a number of different brokers and custodians. 1. Brokerage for Client Referrals. If you consider, in selecting or recommending brokerdealers, whether you or a related person receives client referrals from a broker-dealer or third party, disclose this practice and discuss the conflicts of interest it creates. IPEX does not utilize any broker-dealer client referral programs. 2. Directed Brokerage IPEX does not require that a client direct brokerage transactions through a specified brokerdealer. IPEX clients are free to use the broker of their choice. As a result, IPEX clients use a number of different brokers. In many cases IPEX clients select a money manager, who is then responsible for selecting the broker. Some clients may decide to maintain directed brokerage relationships. IPEX does not negotiate commission rates with these brokers. Clients may pay higher commissions if they use directed brokerage relationships. IPEX does not participate in fee sharing arrangements with any broker dealer in connection with preferred brokerage arrangements. A. Discuss whether and under what conditions you aggregate the purchase or sale of securities for various client accounts. If you do not aggregate orders when you have the opportunity to do so, explain your practice and describe the costs to clients of not aggregating.

IPEX does not trade individual securities for client accounts, with the exception of ETFs. The majority of discretionary trades executed by IPEX involves mutual funds. IPEX does not aggregate mutual fund trades. Aggregating mutual fund trades is not necessary as all clients receive the same price at the end of each business day. IPEX does not aggregate ETF transactions, as ETF trades are not initiated by IPEX as part of a model portfolio rebalancing or restructuring. ETF trades are usually the result of client contributions or requests for distributions. The timing of these transactions usually does not overlap to enable IPEX to aggregate the trades.

REVIEW OF ACCOUNTS

In addition to the quarterly reviews, IPEX performs two more comprehensive annual reviews. Annually, IPEX personnel conduct an investment review of all client accounts. IPEX personnel prepare an account allocation analysis that compares all of our client accounts to each other in terms of performance and allocation. In addition, IPEX personnel discuss the performance of individual investment products as part of the product review. Any significant items that require attention are assigned to the appropriate individual with a specific timetable for action. Annually, IPEX personnel conduct an administrative review of all client accounts. This review focuses on administrative issues including custody, fees and cash flows. Any significant items that require attention are assigned to the appropriate individual with a specific timetable for action. B. If you review client accounts on other than a periodic basis, describe the factors that trigger a review.

Other factors that trigger a client account review are: Client inquiries Client meetings Significant deposits or withdrawals Significant changes in market conditions C. Describe the content and indicate the frequency of regular reports you provide to clients regarding their accounts. State whether these reports are written. IPEX monitors client accounts by providing regular written reports. These reports are a vital component of our consulting services. IPEX provides comprehensive, written reports to our clients quarterly. The reports address a broad range of issues regarding performance, allocation, risk, style, cash flow and market value. When it is appropriate, benchmarks and peer groups are used for comparison purposes. The targets and parameters contained in the investment policy statement are also typically listed in the reports.

CLIENT REFERRALS AND OTHER COMPENSATION

Shale Lapping, President of IPEX, Inc., serves in the following roles for three IPEX clients wherein IPEX is the investment advisor for the respective client’s trust accounts. Due to the policies and overall structure of the relationships described below, IPEX does not believe that Shale’s roles pose a conflict or prevent IPEX from discharging its responsibilities in the best interest of the trusts in its role as investment advisor. 1. Co-Trustee: Shale serves as one of three co-trustees for a client’s revocable trust and irrevocable trust. This appointment was made at the request of the client. Shale is

compensated for his role as a co-trustee. Shale is not a signatory to any of the custodian accounts that hold these assets and therefore IPEX does not have custody of any of the account assets. IPEX serves as a non-discretionary, investment advisor on these trusts with another consulting / brokerage firm. The IPEX relationship with the client pre-dates Shale’s role as a co-trustee. The role of IPEX with respect to these trusts, as well as the IPEX compensation arrangements, are the same as they were before Shale became a cotrustee. 2. Board of Directors, Member: Shale serves on the Board of Directors of a client with trust accounts managed by IPEX. This appointment was made at the request of the client. Shale receives compensation as a member of the Board of Directors. IPEX, Inc. serves as the investment advisor for several of the client’s trust accounts that are held with two separate custodians that also serve as trustees for the accounts. The IPEX relationship with the client pre-dates Shale’s role as a Board member. The Board’s primary function is to oversee the administration and operation of the client’s underlying business. In the event that a trust-related investment issue would arise at the Board level, Shale would recuse himself from that portion of the decision-making process. 3. Shareholder: IPEX manages a trust account for a client that is wholly owned by a corporation of which Shale Lapping, President of IPEX, Inc., is a shareholder. Shale receives passive income as a result of this ownership. IPEX serves as a non-discretionary, investment advisor on this trust. All investment decisions for the trust account are made by the client’s Board of Directors of which Shale is not a member. The role of IPEX with respect to this trust, as well as the IPEX compensation arrangement, are not impacted by Shale’s status as a shareholder.

CUSTODY

(However, under government regulations, IPEX is deemed to have custody of your assets if, for example, you authorize IPEX to instruct your custodian to deduct our advisory fees directly from your account.) Your custodian(s) maintains actual custody of your assets. You will receive account statements directly from your custodian at least quarterly. The statements will be sent to the address of record you provided to the custodian. IPEX has directed each client to compare their IPEX reports to their custodian statements. Specifically, IPEX has directed each client to rely solely upon the data contained in their custodian statements for dividends, interest, realized and unrealized capital gains and/or capital losses, cash flows, etc. If you discover any discrepancies, we urge you to bring the matter to the attention of IPEX personnel immediately.

INVESTMENT DISCRETION

As a substantial portion of IPEX revenues are fixed fees, unrelated to the capital markets, IPEX does not believe that there are any financial conditions that are reasonably likely to impact our ability to meet our contractual commitments to our clients. C. If you have been the subject of a bankruptcy petition at any time during the past ten years, disclose this fact, the date the petition was first brought and the current status. IPEX has never been the subject of a bankruptcy petition.