AMERIPRIME FUNDS
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT, dated as of November 26, 2002, between Aegis Asset
Management, a Texas corporation (the "Adviser"), and Arcadia Investment
Management Corporation (the "Sub-Adviser").
WHEREAS, the Adviser acts as an investment Adviser to several series of
AmeriPrime Funds, an Ohio business trust (the "Trust"), pursuant to a Management
Agreement dated as of May 24, 2002, 2002 (the "Management Agreement");
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render investment
advisory services to the Xxxxxxxx Large-Cap Growth Fund (the "Fund"), a series
of shares of beneficial interest of the Trust, and the Sub-Adviser is willing to
render such services.
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, the parties hereto agree as follows:
Section 1. Appointment and Status of Sub-Adviser. The Adviser hereby appoints
the Sub-Adviser to provide investment advisory services to the Fund for the
period and on the terms set forth in this Agreement. The Sub-Adviser accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided. The Sub-Adviser shall for all purposes herein be
deemed to be an independent contractor of the Adviser and the Trust and shall,
unless otherwise expressly provided herein or authorized by the Adviser or the
Board of Trustees of the Trust from time to time, have no authority to act for
or represent the Adviser or the Trust in any way or otherwise be deemed an agent
of the Adviser or the Trust.
Section 2. Sub-Adviser's Duties. Subject to the general supervision of the
Trust's Board of Trustees (the "Board") and the Adviser, the Sub-Adviser shall,
employing its discretion, manage the investment operations of the Fund and the
composition of the portfolio of securities and investments (including cash)
belonging to the Fund, including the purchase, retention and disposition thereof
and the execution of agreements relating thereto, in accordance with the Fund's
investment objective, policies and restrictions as stated in the Fund's
then-current Prospectus and Statement of Additional Information (together, the
"Prospectus") and subject to the following understandings:
(a) The Sub-Adviser shall furnish a continuous investment program for the Fund
and determine from time to time what investments or securities will be
purchased, retained or sold by the Fund and what portion of the assets belonging
to the Fund will be invested or held uninvested as cash;
(b) The Sub-Adviser shall use its best judgment in the performance of its
duties under this Agreement;
(c) The Sub-Adviser, in the performance of its duties and obligations under this
Agreement for the Fund, shall act in conformity with the Trust's Declaration of
Trust, its By-Laws and the Fund's Prospectus and with the instructions and
directions of the Trust's Board of Trustees and the Adviser and will conform to
and comply with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations;
(d) The Sub-Adviser shall determine the securities to be purchased or sold by
the Fund and will effect portfolio transactions pursuant to its determinations
either directly with the issuer or with any broker and/or dealer in such
securities, subject to Section 3 below;
(e) The Sub-Adviser shall maintain books and records with respect to the
securities transactions of the Fund and shall render to the Adviser and the
Trust's Board of Trustees such periodic and special reports as the Adviser or
the Board may request; and
(f) The Sub-Adviser shall provide the Trust's custodian with such information
relating to the Trust as may be required under the terms of the then-current
custody agreement between the Trust and the custodian.
Section 3. Execution of Purchase and Sale Orders. In connection with purchases
or sales of portfolio securities for the account of the Fund, the Sub-Adviser
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 the
Sub-Adviser, subject to review of this selection by the Board from time to time.
The Sub-Adviser 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, the Sub-Adviser will at all times seek
for the Fund 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.
The Sub-Adviser should generally seek favorable prices and commission rates
that are reasonable in relation to the benefits received. In seeking best
qualitative execution, the Sub-Adviser is authorized to select brokers or
dealers who also provide brokerage and research services to the Fund and/or the
other accounts over which it exercises investment discretion. The Sub-Adviser is
authorized to pay a broker or dealer who provides such brokerage and research
services a commission for executing a Fund portfolio transaction that is in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction 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 the
Sub-Adviser's overall responsibilities with respect to the Fund and to accounts
over which the Sub-Adviser exercises investment discretion. The Fund and the
Sub-Adviser understand and acknowledge 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.
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, 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.
Subject to the provisions of the 1940 Act, and other applicable law, the
Sub-Adviser, any of its affiliates or any affiliates of its 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 the Sub-Adviser gives any advice to clients of the
Sub-Adviser concerning the shares of the Fund, the Sub-Adviser will act solely
as investment counsel for such client and not in any way on behalf of the Fund.
The Sub-Adviser's services to the Fund pursuant to this Agreement are not to be
deemed to be exclusive and it is understood that the Sub-Adviser may render
investment advice, management and other services to others, including other
registered investment companies.
Section 4. Books and Records. The Sub-Adviser shall keep the Trust's books and
records required to be maintained by it pursuant to Section 2(e) of this
Agreement. The Sub-Adviser agrees that all records that it maintains for the
Trust are the property of the Trust and it will promptly surrender any of such
records to the Trust upon the Trust's request. The Sub-Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such
records as are required to be maintained by the Sub-Adviser with respect to the
Trust by Rule 31a-1 under the 1940 Act.
Section 5. Expenses of the Sub-Adviser. During the term of this Agreement, the
Sub-Adviser will pay all expenses (including without limitation the compensation
of all trustees or officers of the Trust who are "interested person" of the
Sub-Adviser, as defined in the 0000 Xxx) incurred by it in connection with its
activities under this Agreement other than the cost of securities and
investments purchased for the Fund (including taxes and brokerage commissions,
if any).
Section 6. Compensation of the Sub-Adviser. For the services provided and the
expenses borne pursuant to this Agreement, the Adviser will pay to the
Sub-Adviser as full compensation therefor a fee at the annual rate of 0.50% of
the Fund's average daily net assets. This fee for each month will be paid to the
Sub-Adviser during the succeeding month. For purposes of determining the fee
payable hereunder, the net asset value of the Fund shall be calculated in the
manner specified in the Fund's Prospectus.
Section 7. Use of Name. The Adviser and Sub-Adviser acknowledge that all rights
to the name "Xxxxxxxx" belong to the Adviser, and that the Trust is being
granted a limited license to use such words in its Fund name or in any class
name. In the event the Adviser ceases to be the Adviser, the Trust's right to
the use of the name "Xxxxxxxx" shall automatically cease on the ninetieth day
following the termination of this Agreement. The right to the name may also be
withdrawn by the Adviser during the term of the Management Agreement upon ninety
(90) days' written notice by the Adviser to the Trust. Nothing contained herein
shall impair or diminish in any respect the Adviser's right to use the name
"Xxxxxxxx" in the name of, or in connection with, any other business enterprises
with which the Adviser is or may become associated. There is no charge to the
Trust for the right to use this name.
Section 8. Liability of the Sub-Adviser. Neither the Sub-Adviser nor its
shareholders, members, officers, directors, employees, agents, control persons
or affiliates of any thereof, shall be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 0000 Xxx) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
Any person, even though also a director, officer, employee, shareholder,
member or agent of the Sub-Adviser, who may be or become an officer, director,
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 the Sub-Adviser's duties hereunder), to
be rendering such services to or acting solely for the Trust and not as a
director, officer, employee, shareholder, member or agent of the Sub-Adviser, or
one under the Sub-Adviser's control or direction, even though paid by the
Sub-Adviser.
Section 9. Duration and Termination. The term of this Agreement shall begin on
the date of this Agreement and shall continue in effect for a period of two
years from the date of this Agreement. This Agreement shall continue in effect
from year to year thereafter, subject to termination as hereinafter provided, if
such continuance is approved at least annually (a) by a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of such Fund or by
vote of the Trust's Board of Trustees, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement may be terminated by the Adviser or the Trust with respect to the Fund
at any time, without the payment of any penalty, by the Adviser with the consent
of the Trust's Board of Trustees, by the Trust's Board of Trustees, or by vote
of a majority of the outstanding voting securities (as defined in the 0000 Xxx)
of such Fund, in any such case on 30 days' written notice to the Sub-Adviser, or
by the Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the Adviser. This Agreement will automatically and immediately
terminate in the event of its assignment (as defined in the 1940 Act).
Section 10. Amendment. This Agreement may be amended by mutual consent of the
Adviser and the Sub-Adviser, provided the Trust approves the amendment (a) by
vote of a majority of those Trustees of the Trustee who are not parties to this
Agreement or "interested persons" (as defined in the 0000 Xxx) of any such
party, cast in person at a meeting called for the purpose of voting on such
amendment, and (b) if required under then current interpretations of the 1940
Act by the Securities and Exchange Commission, by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of each Fund affected
by such amendment.
Section 11. Notices. Notices of any kind to be given in writing and shall be
duly given if mailed or delivered to the Sub-Adviser at 000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, and to the Adviser at 000
Xxxxxxxx, Xxxxx 0, Xxxxxxx, Xxxxx 00000, or at such other address or to such
other individual as shall be specified by the party to be given notice.
Section 12. Governing Law. (a) This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio, without regard to the
conflicts of laws principles thereof, and (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 1940 Act, shall be resolved by reference
to such term or provision of the 1940 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 1940 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.
Section 13. 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.
Section 14. 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.
Section 15. 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.
Section 16. Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereto or otherwise affect their construction or effect.
Section 17. Change of Control. The Sub-Adviser shall notify Adviser and the
Trust in writing sufficiently in advance of any change of control, as defined in
Section 2(a)(9) of the 1940 Act, as will enable the Trust to consider whether an
assignment, as defined in Section 2(a)(4) of the 1940 Act, would occur.
Section 18. Other Business. Except as set forth above, nothing in this Agreement
shall limit or restrict the right of any of the Sub-Adviser's directors,
officers or employees who may also be a trustee, officer, partner or employee of
the Trust to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any business, whether of
a similar or a dissimilar nature, nor limit or restrict the Sub-Adviser's right
to engage in any other business or to render services of any kind to any other
corporation, firm, individual or association.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the date and year first above
written.
Aegis Asset Management, Inc. Arcadia Investment Management Corporation
By /s/ By /s/
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Name Xxxx X. Xxxxxxx Name L. Xxxxxx Xxxx
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Title President Title Vice President
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