INVESTMENT SUBADVISORY AGREEMENT
BETWEEN
CASH MANAGEMENT SYSTEMS, INC.
AND
MILESTONE CAPITAL MANAGEMENT, L.P.
AGREEMENT made as of the 1st day of September, 1999, by and between
Cash Management Systems, Inc., a Nevada corporation (the "Adviser") and
Milestone Capital Management, L.P., a limited partnership organized under the
laws of the State of New York (the "Sub-Adviser").
WHEREAS, the Adviser provides investment advisory services to The Cash
Fund (the "Fund"), a series of AmeriPrime Funds, an Ohio business trust (the
"Trust"), which is registered as an open-end, management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), pursuant
to a Management Agreement dated (the Management Agreement"); and
WHEREAS, the Sub-Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment subadvisory services in connection with the Fund and the Sub-Adviser
represents that it is willing and possesses legal authority to so furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to act as
investment subadviser to the Fund for the period and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Adviser has delivered to the Sub-Adviser
copies of each of the following documents along with all amendments thereto
through the date hereof, and will promptly deliver to it all future amendments
and supplements thereto, if any:
(a) the Trust's Declaration of Trust ;
(b) the By-Laws of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing the
execution and delivery of the Advisory Agreement and this Agreement;
(d) the most recent Post-Effective Amendment to the Trust's Registration
Statement under the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act, on Form N-1A as filed with the Securities and
Exchange Commission (the "Commission");
(e) Notification of Registration of the Trust under the 1940 Act on Form
N-8A as filed with the Commission; and
(f) the currently effective Prospectus and Statement of Additional
Information of the Fund.
3. INVESTMENT ADVISORY SERVICES.
(a) MANAGEMENT OF THE FUND. The Sub-Adviser hereby undertakes to act as
investment subadviser to the Fund. The Sub-Adviser shall regularly
provide investment advice to the Fund and continuously supervise the
investment and reinvestment of cash, securities and other property
composing the assets of the Fund and, in furtherance thereof, shall:
(i) obtain and evaluate pertinent economic, statistical and financial
data, as well as other significant events and developments, which
affect the economy generally, the Fund's investment program, and
the issuers of securities included in the Fund's portfolio and
the industries in which they engage, or which may relate to
securities or other investments which the Sub-Adviser may deem
desirable for inclusion in the Fund's portfolio;
(ii) determine which issuers and securities shall be included in the
portfolio of the Fund;
(iii) furnish a continuous investment program for the Fund;
(iv) in its discretion, and without prior consultation, buy, sell,
lend and otherwise trade any securities and investment
instruments on behalf of the Fund; and
(v) take, on behalf of the Fund, all actions the Sub-Adviser may deem
necessary in order to carry into effect such investment program
and the Sub-Adviser's functions as provided above, including the
making of appropriate periodic reports to the Adviser and the
Trust's Board of Trustees.
(b) COVENANTS. The Sub-Adviser shall carry out its investment subadvisory
responsibilities in a manner consistent with the investment
objectives, policies, and restrictions provided in: (i) the Fund's
Prospectus and Statement of Additional Information as revised and in
effect from time to time; (ii) the Trust's Declaration of Trust,
By-Laws or other governing instruments, as amended from time to time;
(iii) the 1940 Act; (iv) other applicable laws; and (v) such other
investment policies, procedures and/or limitations as may be adopted
by the Trust or the Adviser with respect to the Fund and provided to
the Sub-Adviser in writing. The management of the Fund by the
Sub-Adviser shall at all times be subject to the oversight and
supervision of the Adviser and the Trust's Board of Trustees.
(c) RESEARCH AND CREDIT SERVICES. The Sub-Adviser may obtain at its own
expense,supplemental research and credit services from others in
connection with its provision of services to the Fund under this
Agreement.
(d) BOOKS AND RECORDS. Pursuant to applicable law, the Sub-Adviser shall
keep the Fund's books and records required to be maintained by, or on
behalf of, the Fund with respect to subadvisory services rendered
hereunder. The Sub-Adviser agrees that all records which it maintains
for the Fund are the property of the Fund and it will promptly
surrender any of such records to the Fund upon the Fund's or the
Adviser's request. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any such records
of the Fund required to be preserved by Rule 31a-1 under the 1940 Act.
(e) REPORTS, EVALUATIONS AND OTHER SERVICES. The Sub-Adviser shall furnish
reports, evaluations, information or analyses to the Adviser and the
Trust with respect to the Fund and in connection with the
Sub-Adviser's services hereunder as the Adviser and/or the Trust's
Board of Trustees may request from time to time or as the Sub-Adviser
may otherwise deem to be desirable. The Sub-Adviser shall make
recommendations to the Adviser and the Trust's Board of Trustees with
respect to the Fund's policies, and shall carry out such policies as
are adopted by the Board of Trustees. The Sub-Adviser may, subject to
review by the Adviser, furnish such other services as the Sub-Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Agreement.
(f) BROKERAGE. In placing orders with brokers and/or dealers, the
Sub-Adviser is directed at all times to seek best price and execution
for purchases and sales on behalf of the Fund, 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. Sub-Adviser should
generally seek favorable prices and commission rates that are
reasonable in relation to the benefits received. Subject to such
conditions as may be imposed by the Trust's Board of Trustees, the
Sub-Adviser may pay commissions to brokers and/or dealers that are
higher than might be charged by another qualified broker to obtain
brokerage and/or research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) considered by the Sub-Adviser to be useful or
desirable in the performance of the Sub-Adviser's duties hereunder, if
the Sub-Adviser determines 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. The
determination may be viewed in terms of either a particular
transaction or Sub-Adviser's overall responsibilities with respect to
the Fund and to accounts over which Sub-Adviser exercises investment
discretion. The Sub-Adviser understands and acknowledges that,
although the information may be useful to the Fund and the
Sub-Adviser, 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. Subject to the foregoing and to such conditions as may be
imposed by the Adviser or the Trust's Board of Trustees and the
provisions of the 1940 Act, Exchange Act and other applicable law,
nothing herein shall prohibit the Sub-Adviser from selecting brokers
and/or dealers who are "affiliated persons" of the Sub-Adviser, the
Adviser or the Trust.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, and subject to seeking best qualitative
execution as described above, the Sub-Adviser 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.
(g) AGGREGATION OF SECURITIES TRANSACTIONS. In executing portfolio
transactions for the Fund, the Sub-Adviser may, to the extent
permitted by applicable laws and regulations, but shall not be
obligated to, aggregate the securities to be sold or purchased with
those of other funds or its other clients if, in the Sub-Adviser's
reasonable judgment, such aggregation (i) will result in an overall
economic benefit to the Fund, taking into consideration the
advantageous selling or purchase price, brokerage commission and other
expenses, and trading requirements, and (ii) is not inconsistent with
the policies set forth in the Trust's registration statement and the
Fund's Prospectus and Statement of Additional Information. In such
event, the Sub-Adviser will allocate the securities so purchased or
sold, and the expenses incurred in the transaction, in an equitable
manner, consistent with its fiduciary obligations to the Fund and such
other clients.
4. REPRESENTATIONS AND WARRANTIES.
(a) The Sub-Adviser hereby represents and warrants to the Adviser as
follows:
(i) The Sub-Adviser is a Limited Partnership duly organized and in
good standing under the laws of the State of New York and is
fully authorized to enter into this Agreement and carry out its
duties and obligations hereunder.
(ii) The Sub-Adviser is registered as an investment adviser with the
Commission under the Advisers Act. The Sub-Adviser shall maintain
such registration in effect at all times during the term of this
Agreement.
(iii) The Sub-Adviser at all times shall provide its best judgment and
effort to the Adviser in carrying out the Sub-Adviser's
obligations hereunder.
(iv) The Sub-Adviser shall promptly notify the Adviser and the Trust
of any changes in general partner(s).
(b) The Adviser hereby represents and warrants to the Sub-Adviser as
follows:
(i) The Adviser is a corporation duly organized and in good standing
under the laws of the State of Nevada and is fully authorized to
enter into this Agreement and carry out its duties and
obligations hereunder.
(ii) The Trust has been duly organized as a business trust under the
laws of the State of Ohio.
(iii) The Trust is registered as an investment company with the
Commission under the 1940 Act, and shares of the Fund are
registered for offer and sale to the public under the 1933 Act
and all applicable state securities laws where currently sold.
Such registrations will be kept in effect during the term of this
Agreement. (iv)The Adviser will not include in the Prospectus and
Statement of Additional Information of the Fund or in
supplemental materials to investors information on the
Sub-Adviser that has not been provided or reviewed by the
Sub-Adviser.
5. COMPENSATION. As compensation for the services which the Sub-Adviser is to
provide or cause to be provided pursuant to Paragraph 3, with respect to
the Fund, the Adviser shall pay to the Sub-Adviser (or cause to be paid by
the Trust directly to the Sub-Adviser) a fee, which shall be accrued daily
and paid promptly in arrears after the last business day of each month, at
an annual rate of 0.08% of the average daily net assets of the Fund during
the preceding month (computed in the manner set forth in the Fund's most
recent Prospectus and Statement of Additional Information). In the event
that the Adviser waives a portion of the Advisory fee paid to it by the
Fund, the Sub-Adviser shall not be required to similarly waive a portion of
its sub-advisory fee. Average daily net assets shall be based upon
determinations of net assets made as of the close of business on each
business day throughout such month. The fee for any partial month shall be
calculated on a proportionate basis, based upon average daily net assets
for such partial month.
6. EXPENSES. The Sub-Adviser will pay all expenses incurred by it in
connection with its activities under this Agreement other than the cost of
securities (including brokerage commissions) purchased for or sold by the
Fund.
7. NON-EXCLUSIVE SERVICES; LIMITATION OF SUB-ADVISER'S LIABILITY. The services
of the Sub-Adviser hereunder are not to be deemed exclusive, and the
Sub-Adviser may render similar services to others and engage in other
activities. The Sub-Adviser and its affiliates may enter into other
agreements with the Fund, the Trust or the Adviser for providing additional
services to the Fund, the Trust or the Adviser which are not covered by
this Agreement, and to receive additional compensation for such services.
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Sub-Adviser, or a breach of fiduciary duty with respect to receipt of
compensation, neither the Sub-Adviser nor any of its partners, officers,
agents or employees shall be liable or responsible to the Adviser, the
Trust, the Fund or to any shareholder of the Fund for any error of judgment
or mistake of law or for any act or omission in the course of, or connected
with, rendering services hereunder or for any loss suffered by the Adviser,
the Trust, the Fund, or any shareholder of the Fund in connection with the
performance of this Agreement.
8. EFFECTIVE DATE; MODIFICATIONS; TERMINATION. This Agreement shall become
effective on the date hereof (the "Effective Date") provided that it shall
have been approved by a majority of the outstanding voting securities of
the Fund, in accordance with the requirements of the 1940 Act, or such
later date as may be agreed by the parties following such shareholder
approval.
(a) This Agreement shall continue in force for two years from the
Effective Date and shall continue in effect from year to year
thereafter for successive annual periods, provided such continuance is
specifically approved at least annually (i) by a vote of the majority
of the Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by a vote
of the Board of Trustees of the Trust or a majority of the outstanding
voting securities of the Fund.
(b) The modification of any of the non-material terms of this Agreement
may be approved by a vote of a majority of those Trustees of the Trust
who are not interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 8, either
party hereto may terminate this Agreement at any time on sixty (60)
days' prior written notice to the other, without payment of any
penalty. A termination of the Sub-Adviser may be effected by the
Adviser, by a vote of the Trust's Board of Trustees, or by vote of a
majority of the outstanding voting securities of the Fund. This
Agreement shall terminate automatically in the event of its
assignment.
9. CERTAIN DEFINITIONS. The terms "vote of a majority of the outstanding
voting securities," "assignment," "control," and "interested persons," when
used herein, shall have the respective meanings specified in the 1940 Act.
References in this Agreement to the 1940 Act and the Advisers Act shall be
construed as references to such laws as now in effect or as hereafter
amended, and shall be understood as inclusive of any applicable rules,
interpretations and/or orders adopted or issued thereunder by the
Commission.
10. INDEPENDENT CONTRACTOR. The Sub-Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of Trustees of the
Trust from time to time, have no authority to act for or represent the Fund
or the Adviser in any way or otherwise be deemed an agent of the Fund or
the Adviser.
11. GOVERNING LAW. This Agreement shall be governed by the laws of the State of
Ohio provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or the Advisers Act.
12. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby and, to this extent, the
provisions of this Agreement shall be deemed to be severable.
13. NOTICES. Notices of any kind to be given to the Adviser hereunder by the
Sub-Adviser shall be in writing and shall be duly given if mailed or
delivered to the Adviser at 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, XX 00000 or at
such other address or to such individual as shall be so specified by the
Adviser to the Sub-Adviser. Notices of any kind to be given to the
Sub-Adviser hereunder by the Adviser shall be in writing and shall be duly
given if mailed or delivered to the Sub-Adviser at Xxx Xxxxxxxxx Xxxxxxxxx,
Xxxxxxx, Xxx Xxxx 00000 or at such other address or to such individual as
shall be so specified by the Sub-Adviser to the Adviser. Notices shall be
effective upon delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
written above.
CASH MANAGEMENT SYSTEMS, INC. MILESTONE CAPITAL MANAGEMENT, L.P.
By: __/s/_________________________ By:__/s/__________________
Name: Xxxxx Xxxxxxx Name: Xxxxx Xxxxxx
Title: President Title: President/CEO
9882 10/1/99 2:19 PM
