INTERIM MANAGEMENT AGREEMENT
THIS INTERIM MANAGEMENT AGREEMENT (this "Agreement") is executed as of
January 28, 2002 between AmeriPrime Funds (the "Trust") and CommonWealth
Advisors, Inc. (the "Adviser").
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, one
of which is the Florida Street Growth Fund (the "Fund").
Pursuant to a Management Agreement dated as of January 28, 2000 (the
"Management Agreement"), the Adviser was selected by the Trust to act as
investment adviser to the Fund. The Management Agreement terminated pursuant to
its terms on January 27, 2002. The Trust and the Adviser desire to enter into
this Agreement pursuant to the terms of Rule 15a-4 under the Investment Company
Act of 1940, as amended, (the "1940 Act"). The Board of Directors of the Fund
(the "Board") approved this Agreement within ten business days after the
termination.
Therefore, in consideration of the mutual covenants herein contained,
it is agreed as follows:
1. ADVISORY SERVICES
The Adviser will regularly provide the Fund with such
investment advice as the Adviser in its discretion deems advisable and will
furnish a continuous investment program for the Fund consistent with the Fund's
investment objective and policies. The Adviser will determine the securities to
be purchased for the Fund, the portfolio securities to be held or sold by the
Fund and the portion of the Fund's assets to be held uninvested, subject always
to the Fund's investment objective, 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 Board may from time to time establish. The Adviser 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
Fund.
2. ALLOCATION OF CHARGES AND EXPENSES
The Adviser will pay all operating expenses of the Fund,
including the compensation and expenses of any employees of the Fund and of any
other persons rendering any services to the Fund; 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; expenses of
registering shares under federal and state securities laws, including expenses
incurred by the Fund in connection with the organization and initial
registration of shares of the Fund; 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 Fund; expenses, including clerical expenses, of issue, sale, redemption
or repurchase of shares of the Fund; 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 Fund'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 (excluding expenses which the Fund
is authorized to pay pursuant to Rule 12b-1 under the Investment Company Act of
1940 as amended (the "1940 Act")); and all other operating expenses not
specifically assumed by the Fund.
The Fund will pay all of its brokerage fees and commissions,
taxes, borrowing costs (such as (a) interest and (b) dividend expenses on
securities sold short), fees and expenses of the non-interested person trustees
and such extraordinary or non-recurring expenses as may arise, including
organizational expenses, and litigation to which the Fund may be a party and
indemnification of the Trust's trustees and officers with respect thereto. The
Fund will also pay expenses which it is authorized to pay pursuant to Rule 12b-1
under the 1940 Act. The Adviser may obtain reimbursement from the Fund, at such
time or times as the Adviser may determine in the Adviser's sole discretion, for
any of the expenses advanced by the Adviser, which the Fund is obligated to pay,
and such reimbursement shall not be considered to be part of the Adviser's
compensation pursuant to this Agreement.
Notwithstanding anything herein to the contrary, the Fund will
only be liable for organizational expenses when the Fund reaches $10,000,000 in
assets or when the Fund has been in existence for at least one year, and until
such time, the Adviser is liable for such expenses. The Adviser will cause such
expenses to be advanced on behalf of the Fund and may obtain reimbursement from
the Fund after the Fund becomes liable.
3. COMPENSATION OF COMMONWEALTH
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last business day of each month, the
Florida Street Growth Fund will pay the Adviser a fee at the annual rate of
1.35% of the average value of its daily net assets.
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 Fund 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, the Adviser's 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 account of the Fund, it is understood that the 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 Adviser, subject to review
of this selection by the Board from time to time. The 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 Adviser is directed at all times to 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 Adviser should generally seek favorable prices and
commission rates that are reasonable in relation to the benefits received. In
seeking best qualitative execution, the Adviser is 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 Fund
and/or the other accounts over which the Adviser exercises investment
discretion. The Adviser is authorized to pay a broker or dealer who provides
such brokerage and research services a commission for executing a Fund portfolio
transaction which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the 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 Adviser's overall responsibilities with respect to
the Fund and to account over which the Adviser exercises investment discretion.
The Fund and the Adviser understand and acknowledge that, although the
information may be useful to the Fund and the 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 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 Investment Company Act of
1940, as amended, and other applicable law, the Adviser, any of the Adviser's
affiliates or any affiliates of the Adviser's 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
Adviser gives any advice to its clients concerning the shares of the Fund, the
Adviser will act solely as investment counsel for such client and not in any way
on behalf of the Fund. The Adviser's services to the Fund pursuant to this
Agreement are not to be deemed to be exclusive and it is understood that the
Adviser may render investment advice, management and other services to others,
including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
The Adviser may rely on information reasonably believed by the
Adviser to be accurate and reliable. Except as may otherwise be required by the
Investment Company Act of 1940 or the rules thereunder, neither the Adviser nor
its 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 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 the Adviser's duties under this Agreement, or by reason of
reckless disregard by any of such persons of the Adviser's obligations and
duties under this Agreement.
Any person, even though also a director, officer, employee,
shareholder or agent of the 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 Adviser's duties hereunder), to be
rendering such services to or acting solely for the Trust and not as a director,
officer, employee, shareholder or agent of the Adviser, or one under the
Adviser's control or direction, even though paid by the Adviser.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution
and shall remain in force until June 26, 2002.
This Agreement may, on ten days written notice, be terminated
with respect to the Fund, at any time without the payment of any penalty, by the
Board or, by a vote of a majority of the outstanding voting securities of the
Fund. This Agreement shall automatically terminate in the event of its
assignment.
7. USE OF NAME
The Trust and the Adviser acknowledge that all rights to the
name "Florida Street" 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 name of any class
of Fund. In the event the Adviser ceases to be the adviser to the Fund, the
Trust's right to the use of the name "Florida Street" with respect to the Fund
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 this 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 "Florida Street" 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 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 the Adviser 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 series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "AmeriPrime Funds" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. 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 is
0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx 00000, and the Adviser's
address for this purpose shall be 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx, XX 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.
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.
IN WITNESS WHEREOF, the parties have caused this instrument to be
signed by their officers designated below, all as of the day and year first
written above.
AMERIPRIME FUNDS
By:______/S/_______________________
Xxxxxxx X. Xxxxxxxxxxxx, President
COMMONWEALTH ADVISORS, INC.
By:________/S/______________________
Name: Xxxxxx X. Xxxxxxx
Title: President
377444
