AMERIPRIME FUNDS
INTERIM INVESTMENT ADVISORY AGREEMENT
THIS INTERIM INVESTMENT ADVISORY AGREEMENT, dated as of April 1,
2002, is between Aegis Asset Management, Inc., a Texas corporation (the
"Adviser"), and [OAM Institutional, Inc./OFI Private Investments, Inc.]
("[OAM/OFI]" or the "Sub-Adviser").
WHEREAS, the Adviser acts as the investment manager to the Xxxxxxxx
Large-Cap Value Fund (the "Fund"), a series of the AmeriPrime Funds, an Ohio
business trust (the "Trust"), pursuant to a Management Agreement dated as of
December 20, 2001 (the "Management Agreement"); and
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 retained Gulf Investment Management, LLP ("Gulf")
to render investment advisory services to the Fund, pursuant to an Investment
Advisory Agreement dated December 20, 2001 (the "Investment Advisory
Agreement"); and
WHEREAS, pursuant to an Asset Purchase Agreement, [OAM/OFI] has agreed
to purchase from Gulf substantially all of the assets of Gulf, including without
limitation, Gulf's rights and responsibilities under the Investment Advisory
Agreement (the "Acquisition"); and
WHEREAS, the Trust and [OAM/OFI] desire to enter into this Interim
Investment Advisory Agreement (this "Agreement") pursuant to the terms of Rule
15a-4 of the 1940 Act pending approval of a final investment advisory agreement
by a majority of the Fund's outstanding voting securities designating [OAM/OFI]
as the sub-adviser of the Fund.
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 which 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 any 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 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
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.
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. 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
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
Sub-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).
The compensation earned under this Agreement will beheld in an interest
bearing escrow account with the Fund's custodian or a bank mutually agreed upon
by the Trust and the Sub-Adviser. If a majority of the Fund's outstanding voting
securities approve a final investment advisory agreement with the Sub-Adviser by
the end of the 150-day period following the closing of the Acquisition, the
amount in the escrow account (including interest earned) will be paid to the
Sub-Adviser.
If a majority of the Fund's outstanding voting securities do not
approve a final investment advisory agreement with the Sub-Adviser, the
Sub-Adviser will be paid, out of the escrow account, the lesser of (1) any costs
incurred by the Sub-Adviser in performing services under this Agreement (plus
interest earned on that amount while in escrow), or (2) the total amount in the
escrow account (plus interested earned).
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 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. This Agreement shall take effect
on the date of the closing of the Acquisition and shall remain in force for a
period not to exceed 150 days thereafter. This Agreement may, upon ten days
written notice, be terminated 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 the Fund, in any
such case on 10 days' written notice to the Sub-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 1940 Act).
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 Three Memorial
City Plaza, 840 Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000 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 for otherwise affect their construction or effect.
Section 17. Change of Control. 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
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 officers designated below on the date and year first above
written.
Aegis Asset Management, Inc. [OAM Institutional, Inc./OFI Private Investments,
Inc.]
By:__/s/________________________________ By: ___/s/_______________________
Name: Xxxx Xxxxxxx Name: ___William Jaume_____________________
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Title: President Title: __Senior Vice President_______________________
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