AMERIPRIME FUND
INVESTMENT SUB-ADVISORY AGREEMENT
This INVESTMENT SUB-ADVISORY AGREEMENT is effective as of January 20, 2000,
between Shepherd Advisory Services, Inc., a Tennessee corporation (the
"Adviser") and Cornerstone Capital Management, Inc., a Colorado corporation (the
"Sub-Adviser").
W I T N E S E T H:
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WHEREAS, the Adviser acts as the investment adviser to the Shepherd
Values Market Neutral Fund (the "Fund"), a series of AmeriPrime Fund, an Ohio
business trust (the "Trust"), pursuant to a Management Agreement for the Fund
effective as of January 20, 2000 (the "Advisory 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 sub-advisory services to the Fund, 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 act as its agent to provide investment advisory
service 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. Although the
Sub-Adviser shall be an agent of the Adviser, 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 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 objectives, 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;
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(c) The Sub-Adviser, in the performance of its duties and obligations
under this Agreement, 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 as agent for the Trust 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. 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 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 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. On occasions when the Sub-Adviser
deems the purchase or sale of a security to be in the best interests of the
Trust as well as other customers, the Sub-Adviser may, to the extent permitted
by applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased in order to obtain the best execution and
lower brokerage commissions, if any. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Sub-Adviser in the manner it considers to be the most equitable
and consistent with its fiduciary obligations to the Trust and, if applicable,
to such other customers.
If any occasion should arise in which the Sub-Adviser gives any advice
to clients of Sub-Adviser concerning the shares of the Fund, Sub-Adviser will
act solely as investment counsel for such client and not in any way on behalf of
the Fund. Sub-Adviser's services to the Fund pursuant to this Agreement are not
to be deemed to be exclusive and it is understood that 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 which 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
persons" 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 computed and accrued daily and
paid monthly at an annual rate equal to .75% of the average daily net assets of
the Fund. The 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 Trust, Adviser and Sub-Adviser acknowledge
that all rights to the name "Shepherd Values" 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 "Shepherd Values" 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 "Shepherd Values" 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.
SECTION 8. LIABILITY OF THE SUB-ADVISER. Neither 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 any 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 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 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 Sub-Adviser, or one
under Sub-Adviser's control or direction, even though paid by Sub-Adviser.
SECTION 9. DURATION AND TERMINATION. The term of this Agreement shall
begin on the effective date of this Agreement and shall continue in effect for a
period of two years. 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 by (a) a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the 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 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 the 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, the Sub-Adviser and the Trust, but the consent of the Trust must
be approved (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 the 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 Xxxxx
Xxxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, XX 00000, and to the Adviser at 0000 00xx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 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/she has the full power and authority to sign this Agreement
on behalf of the party indicated, and that his/her 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 for otherwise affect their construction or effect.
SECTION 17. CHANGE OF CONTROL. Sub-Adviser undertakes to 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
partners, 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 duly authorized officers designated below as of the date and
year first above written.
Shepherd Advisory Services, Inc. Cornerstone Capital Management, Inc.
By: ___/s/____________________________ By: ___/s/___________________________
Name: Xxxxxxx X. Xxxx Name: Xxxxx X. Xxxxxxx
Title: President Title: President
