Separation Agreement

This Separation Agreement (this "Agreement") is made and entered into as of the
29th day of February, 2008, by and between Integrity Mutual Funds, Inc., a North
Dakota corporation (the "Company") and Mark R. Anderson, an individual residing
at Minot, North Dakota ("Employee").  

Witnesseth:

Whereas, Employee has elected to resign from his employment with the Company on
February 29, 2008;  

Whereas, in accordance with the exhibits accompanying this Agreement, Employee
hereby resigns as Director, Chief Executive Officer, and President of the
Company and from all positions held in any subsidiaries of the Company and any
entities related to the Company (including any positions with the Integrity
Family of Mutual Funds); and  

Whereas, the Company and Employee desire, pursuant to this Agreement, to set
forth their respective obligations to one another and to settle all matters or
claims relating to Employee's employment with and separation from the Company
which Employee may have against the Company and its subsidiaries and affiliates,
including, without limitation, all matters or claims relating to salary, wages,
bonuses, accrued vacation pay, employee benefits, fringe benefits, separation
and expense reimbursement;  

Now, Therefore, in consideration of the mutual covenants and premises set forth
herein and the Separation Payment (hereinafter defined), and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, the parties hereto hereby agree as follows:  

            1.         Separation Payment.  (a) The Company agrees to pay
Employee, and Employee agrees to accept, Fifty-Nine Thousand Dollars ($59,000)
(the "Separation Payment") in full and final settlement and satisfaction of any
Claims (hereinafter defined) which Employee may have against Employee Releasees
(hereinafter defined).  The Separation Payment (less required withholding
deductions including federal and state taxes and FICA) shall be paid by the
Company to Employee on March 14, 2008 (the "Termination Date"). 

            (b)        The Company shall pay to the Employee the Employee's
vested balance in the Company's Employee Stock Ownership Plan on the Termination
Date, or as soon as practicable thereafter. 

            2.         Benefits.  (a)  The Company shall provide to Employee
from the date of this Agreement to and including the Termination Date coverage
of group health, dental and vision insurance afforded to other employees of the
Company.  If Employee secures full-time employment elsewhere or becomes
self-employed and obtains insurance coverage, Employee shall immediately notify
the Company in which event such insurance coverage by the Company shall
terminate to the extent permitted under applicable law.

            (b)        Employee shall be entitled to participate in the
Company's 401(k) Plan and to any applicable Company matching contributions
thereunder prior to the Termination Date.

            (c)        The Company shall pay to the Employee within thirty (30)
days of this Agreement compensation for any accrued vacation unused by the
Employee prior to the date of this Agreement.

            3.         General Release.  (a)  Employee, on behalf of himself and
his spouse, dependents, agents, heirs, executors, administrators, personal
representatives and assigns, and to the fullest extent permitted by applicable
law, hereby releases and forever discharges the Company, its subsidiaries and
affiliates and their respective shareholders, their past and present officers,
directors, agents and employees (hereinafter referred to collectively as the
"Employee Releasees") from any and all claims, demands, liabilities,
obligations, damages, debts, causes of action, suits and disputes of any nature
whatsoever, whether known or unknown, suspected or unsuspected, fixed or
contingent (hereinafter referred to collectively as the "Claims"), which, as of
the date hereof or any time prior thereto, Employee has had or may have had
against any of the Employee Releasees with respect to any and all matters
whatsoever, including, without limitation, any and all Claims related to (i)
salary, wages, bonuses, accrued vacation pay, employee benefits, separation or
other compensation of any nature whatsoever or (ii) Employee's employment with
the Company, or the termination thereof, or arising under or based upon,
directly or indirectly, in whole or in part, Title VII of the Civil Rights Act
of 1964 as amended, the Civil Rights Act of 1991 as amended, the Americans with
Disabilities Act of 1990 as amended, the Family and Medical Leave Act of 1993 as
amended, the Human Rights Act as amended, the Age Discrimination in Employment
Act of 1967, as modified by the Older Workers Benefit Protection Act of 1990 as
amended, Section 1981 of the Civil Rights Act of 1870 as amended, the Fair Labor
Standards Act of 1938 as amended, the Equal Pay Act of 1963 as amended, the
North Dakota Equal Pay Act as amended, the Employee Retirement Income Security
Act of 1974 as amended, the Rehabilitation Act of 1973 as amended, the Equal
Employment Opportunity Act of 1972 as amended and any state or local equal
employment opportunity or age discrimination law, wage payment law or workers'
compensation law, or any other federal, state or local law, statute, ordinance,
decision, order, policy or regulation establishing or relating to claims or
rights of employees, including, without limitation, any and all claims alleging
interference with the attainment of any rights under any insurance, pension,
profit sharing or other employee benefit plan, any and all claims in tort or
contract and any and all claims alleging breach of an express or implied, or
oral or written, contract, policy manual or employee handbook, or alleging
misrepresentation, defamation, interference with contract, duress, intentional
or negligent infliction of emotional distress, negligence or wrongful discharge,
provided, however, that Employee is not releasing any Employee Releasees in
respect of Claims for breach of this Separation Agreement or any Claims relating
to any outstanding options previously granted to Employee, or Claims under any
Company's 401(k) Plan, Employee Stock Ownership Plan, or any other plan of the
Company, all of which are fully preserved. 

            (b)        The Company on its own behalf and behalf of its
subsidiaries, joint venturers, directors, officers, employees, agents,
shareholders, representatives, successors and assigns ("Company Releasees"), and
to the fullest extent permitted by applicable law, hereby releases and forever
discharges Employee, his spouse, dependents, agents, heirs, executors,
administrators, personal representatives and assigns from any and all Claims,
which, as of the date hereof or any time prior thereto, any Company Releasee has
had or may have had against Employee with respect to any and all matters
whatsoever, including, without limitation, any and all Claims related to
Employee's employment with the Company. 

            (c)        Covenant Not to Sue.  Employee and the Company each
covenant and agree not to file, institute, participate or aid in any legal suit,
arbitration or administrative proceeding (or execute, seek to impose, collect or
recover upon, or otherwise enforce or accept any judgment, decision, award,
warrant or attachment) against any of the Employee Releasees and Company
Releasees, as applicable, upon any Claim released by Employee or the Company
under this Agreement, except as required by applicable law. 

            (d)        No Limitation of Scope.  Employee understands and agrees
that this Agreement constitutes a general release of all Claims of every kind
and nature against the Employee Releasees, whether or not they are specifically
referred to herein, and that no reference herein to a specific Claim, statute or
law is intended to limit the scope of the general agreement contained herein;
provided, however, that this Agreement does not relate to any rights or claims
arising after the date hereof. 

            4.         Indemnification/Director and Officer Insurance.  (a) The
Company shall indemnify Employee against any claims, losses or damages
regardless of when such claims are asserted which relate to events or
circumstances occurring during the period of Employee's employment with the
Company, in accordance with the Company's Bylaws. 

            (b)        Employee shall be covered by a director/officer liability
insurance policy, if any, maintained by the Company to the fullest extent
permitted by such director/officer insurance policy to and including the
Termination Date. 

            5.         Cooperation in Litigation, Claims, Etc.  Employee agrees
to cooperate with and assist and make himself available to the Company or its
subsidiaries and affiliates without further consideration, except reimbursement
for out-of-pocket expenditures incurred at the request of the Company, in the
defense and prosecution of any litigation, claims, proceedings or controversies
involving the Company arising from matters occurring in or involving the period
during which he was an employee of the Company. 

            6.         No Pending Claims, Etc. Employee represents and affirms
that at no time prior to the execution of this Agreement has he filed,
instituted or maintained, and at no time subsequent thereto will he file,
institute or maintain, or cause or knowingly permit the filing, institution or
maintenance, in any state, federal or foreign court, or before any local, state,
federal or foreign arbitration or administrative agency, or any other tribunal,
any Claim, and he hereby irrevocably grants to the Company his power of
attorney, which he hereby acknowledges and agrees is coupled with an interest,
with full right, power and authority to take all actions necessary to dismiss or
discharge with prejudice any such Claim. 

            7.         Confidential Information.  Employee reaffirms and agrees
that he will not at any time use, divulge, furnish or make accessible to any
person outside of the Company any information of a secret or confidential
nature.  For purposes of this paragraph 7, the term "information of a secret or
confidential nature" shall mean information of any nature and in any form which
at the time or times concerned is not generally known to those persons engaged
in a business similar to that conducted or contemplated by the Company and its
subsidiaries and affiliates, and which relates to any one or more of the aspects
of the present or past business of the Company and its subsidiaries and
affiliates, including, without limitation, lists of customers, technical data,
studies, policies, processes, formulas, techniques, know-how and other
knowledge, data, databases, computer designs, information, trade secrets, trade
practices and/or facts relating to devices, computer programs (whether embodied
in source or object code), sales, advertising, promotions, financial matters,
suppliers, and other trade secrets relating to the business of the Company and
its subsidiaries and affiliates.  Employee represents and warrants that Employee
has returned to the Company (i) all records, documents, files, writings,
materials and other data pertaining to such secret or confidential information,
regardless by whomsuch records, documents, files, writings, materials and other
data were prepared including without limitation, documents, papers, records,
financial information, customer lists, business plans, entertainment contact
lists, and all other such materials and all copies thereof relating to the
business of the Company; and (ii) all keys, keycards, credit cards, and all
other items which are the property of the Company.  Employee agrees to use his
best efforts to keep the terms of this Agreement (except for such terms which
are publicly disclosed) and the circumstances surrounding this Agreement
strictly confidential.  Employee may disclose the terms of this Agreement to his
spouse, accountant, attorney and taxing authorities only as may be necessary for
his financial affairs as required by law. 

            8.         Non-Solicitation of Employees and Agents.  During the
period commencing on the date hereof and ending on the Termination Date,
Employee shall not directly or indirectly induce or attempt to induce any of the
employees or representatives of the Company, its subsidiaries or affiliates to
leave the employ of or association with the Company, its subsidiaries or
affiliates, or solicit the business of any client or customer of the Company,
its subsidiaries or affiliates. 

            9.         Non-Disparagement.  After the date of this Agreement,
Employee and Company shall each refrain from making any oral or written
statements to any person or entity that disparage or place the other or any of
their affiliates in a false or negative light, except to the extent required by
applicable law. 

            10.       Non-Admission.  Nothing in this Agreement constitutes or
shall be interpreted as any admission of liability or wrongdoing on the part of
either party. 

            11.       Voluntary Action/Right to Revoke.  Employee acknowledges
and agrees that he is entering into this Agreement knowingly and voluntarily,
without coercion or duress of any nature whatsoever and has entered into this
Agreement with full knowledge of its significance.  Employee further
acknowledges that he has been advised of his right to seek advice and counsel
from others, including an attorney, before executing this Agreement and he
waives the twenty-one (21) day period to consider this Agreement.  Employee
further acknowledges that he has not relied upon any representation or statement
made by the Company, or its attorneys or accountants with respect to the subject
matter, basis or effect of this Agreement.  Employee reserves the right to
revoke this Agreement until March 7, 2008 after which time this Agreement may
not be revoked by the Company or Employee, subject to applicable law. 

            12.       Non-Conditional Separation.  The Company hereby recognizes
that, except as set forth in this Agreement, the Separation Payment and each of
the payments referred to in Section 1 of this Agreement shall not be contingent
on any ongoing duties or responsibilities of Employee to the Company, including,
but not limited to, any executive, employee, consultant, administrative,
committee, directorship, sales or other similar relationship.

            13.       Amendment/Waiver/Termination.  No modification,
termination or amendment of, or waiver under, this Agreement shall be valid
unless in writing and signed by Employee and a duly authorized officer of the
Company. 

            14.       Governing Law.  This Agreement shall be construed,
interpreted, governed and enforced in accordance with the substantive laws of
the State of North Dakota and the Federal laws of the United States applicable
to North Dakota, without regard to the conflict of law rules. 

            15.       Successors.  This Agreement shall be binding upon Employee
and his heirs, executors, administrators, personal representatives and assigns,
and shall inure to the benefit of each of the Employee Releasees and their
respective heirs, executors, administrators, personal representatives,
successors and assigns.  This Agreement shall be binding upon the Company and
its successors and assigns and shall inure to the benefit of each of the Company
Releasees and their respective heirs, executors, administrators, personal
representatives, successors and assigns. 

            16.       Attorneys' Fees.  The parties agree that in the event of
any litigation respecting a breach of this Agreement, each party shall pay its
own court costs and attorneys' fees relating to such litigation. 

            17.       Complete Agreement.  Other than as set forth herein,
Employee warrants that no promise or inducement has been offered for this
Agreement.  The parties agree that this Agreement sets forth the entire
agreement between them and supersedes any other written or oral understandings. 
No other promises or agreements shall be binding unless reduced to writing and
signed by the parties.  The parties further agree that if any provision of this
Agreement is held invalid for any reason by a court or other tribunal of
competent jurisdiction, the remaining provisions shall continue to be in full
force and effect.

 

In Witness Whereof, the parties hereto have executed this Agreement as of the
day and year first above written. 

Company:

Integrity Mutual Funds, Inc.                                    Employee:

By:

 /s/ Vance A. Castleman

 

/s/ Mark R. Anderson

Its

Chairman, Compensation Committee

 

     Mark Anderson

Exhibit A
Resignation as Director, Chief Executive Officer and President
of Integrity Mutual Funds, Inc. 

February 29, 2008 

Integrity Mutual Funds, Inc.
1 Main Street North
Minot, North Dakota 58703 

Board of Directors: 

The undersigned hereby resigns as Director, Chief Executive Officer and
President of Integrity Mutual Funds, Inc., effective February 29, 2008, pursuant
to the terms and conditions of that certain Separation Agreement by and between
Integrity Mutual Funds, Inc. and the undersigned dated as of February 29,
2008.  

Very truly yours, 

By:

/s/ Mark R. Anderson

 

Mark R. Anderson

 

Director, Chief Executive Officer and President

 

Exhibit B
Resignation as Director, President and Treasurer
of Integrity Money Management, Inc. 

February 29, 2008 

Integrity Money Management, Inc.
1 Main Street North
Minot, North Dakota 58703 

Board of Directors: 

The undersigned hereby resigns as Director, President and Treasurer of Integrity
Money Management, Inc., effective February 29, 2008, pursuant to the terms and
conditions of that certain Separation Agreement by and between Integrity Mutual
Funds, Inc. and the undersigned dated as of February 29, 2008.  

Very truly yours,  

By:

/s/ Mark R. Anderson

 

Mark R. Anderson

 

Director, President and Treasurer

 

Exhibit C
Resignation as Director, President and Treasurer
of Integrity Fund Services, Inc. 

February 29, 2008 

Integrity Fund Services, Inc.
1 Main Street North
Minot, North Dakota 58703 

Board of Directors: 

The undersigned hereby resigns as Director, President and Treasurer of Integrity
Fund Services, Inc., effective February 29, 2008, pursuant to the terms and
conditions of that certain Separation Agreement by and between Integrity Mutual
Funds, Inc. and the undersigned dated as of February 29, 2008.  

Very truly yours,  

By:

 /s/ Mark R. Anderson

 

 Mark R. Anderson

 

 Director, President and Treasurer

 

Exhibit D
Resignation as Director and President
of Integrity Funds Distributor, Inc. 

February 29, 2008

Integrity Fund Services, Inc.
1 Main Street North
Minot, North Dakota 58703 

Board of Directors: 

The undersigned hereby resigns as Director and President of Integrity Funds
Distributor, Inc., effective February 29, 2008, pursuant to the terms and
conditions of that certain Separation Agreement by and between Integrity Mutual
Funds, Inc. and the undersigned dated as of February 29, 2008.

Very truly yours,  

By:

 /s/ Mark R. Anderson

 

 Mark R. Anderson

 

 Director, President and Treasurer

 

Exhibit E
Resignation as President
of the Integrity Family of Mutual Funds 

February 29, 2008 

Integrity Family of Mutual Funds
1 Main Street North
Minot, North Dakota 58703 

Board of Directors: 

The undersigned hereby resigns as President of the Integrity Family of Mutual
Funds, effective February 29, 2008, pursuant to the terms and conditions of that
certain Separation Agreement by and between Integrity Mutual Funds, Inc. and the
undersigned dated as of February 29, 2008.  

Very truly yours,  

By:

 /s/ Mark R. Anderson

 

 Mark R. Anderson

 

 Director, President and Treasurer