AMERIPRIME FUNDS
485BPOS, 2000-04-14
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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549
                                    FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                    /  /
                                                                            --


         Pre-Effective Amendment No.                                       /  /
                                      -------                               --
         Post-Effective Amendment No.    42                                /X/
                                      ------                               ---

                                                           and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940         / /
                                                                       ---


         Amendment No.   41                                              /X /
                       ------                                             --
                        (Check appropriate box or boxes.)


               AmeriPrime Funds - File Nos. 33-96826 and 811-9096
             1793 Kingswood Drive, Suite 200, Southlake, Texas 76092

                (Address of Principal Executive Offices) Zip Code

Registrant's Telephone Number, including Area Code:   (817) 431-2197
                                                      --------------
Kenneth Trumpfheller, 1793 Kingswood Dr., Suite 200, Southlake, TX  76092
- -------------------------------------------------------------------------
                  (Name and Address of Agent for Service)

                                  With copy to:
            Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
                    3500 Carew Tower, Cincinnati, Ohio 45202

Approximate Date of Proposed Public Offering:

It is proposed that this filing will become effective:


         /X/ immediately upon filing pursuant to paragraph (b)

        / / on ___________ pursuant to paragraph (b)

       / / 60 days after filing pursuant to paragraph (a)(1)

       / / on (date) pursuant to paragraph (a)(1)

       / / 75 days after filing pursuant to paragraph (a)(2)

       / / on (date) pursuant to paragraph (a)(2) of Rule 485


If appropriate, check the following box:

         / / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

7982


<PAGE>

                              FLORIDA STREET FUNDS

                                   PROSPECTUS


                                 APRIL 14, 2000


FLORIDA STREET BOND FUND
FLORIDA STREET GROWTH FUND

272 Florida Street
Baton Rouge, LA  70801

(800) 890-5344



















THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

10023


<PAGE>


                                TABLE OF CONTENTS

                                                                            PAGE


RISK/RETURN SUMMARY

         FLORIDA STREET BOND FUND                                              1

         FLORIDA STREET GROWTH FUND                                            3

FEES AND EXPENSES OF INVESTING IN THE FUNDS                                    6

HOW TO BUY SHARES                                                              7

HOW TO REDEEM SHARES                                                           9

DETERMINATION OF NET ASSET VALUE                                              10

DIVIDENDS, DISTRIBUTIONS AND TAXES                                            10

MANAGEMENT OF THE FUNDS                                                       11


3


INVESTMENT POLICIES AND RISKS                                                 11

FINANCIAL HIGHLIGHTS                                                          13

FOR MORE INFORMATION                                                  BACK COVER



<PAGE>


                                        5


<PAGE>



                               RISK/RETURN SUMMARY

FLORIDA STREET BOND FUND


INVESTMENT OBJECTIVE

      The investment objective of the Florida Street Bond Fund is to provide
total return to its shareholders over the long term.

PRINCIPAL STRATEGIES

         The Fund's advisor seeks to achieve the investment objective by
investing primarily in high yield, non-investment grade bonds, commonly known as
"junk bonds." The Fund generally invests in securities which are rated BBB or
lower by S&P or Baa or lower by Moody's (or, if unrated, of comparable quality
in the opinion of the advisor) and often owns bonds with the lowest possible
rating. The S&P's lowest ratings for bonds are C, which is reserved for income
bonds on which no interest is being paid, and D, which is reserved for debt in
default and in respect of which payment of interest or repayment of principal is
in arrears. Moody's lowest rating is C, which is applied to bonds which have
extremely poor prospects for ever attaining any real investment standing.


         Under normal circumstances, the Fund has a significant proportion
(typically 30%-50%) of its portfolio invested in bonds (either rated or unrated)
of B or lower quality. Of these bonds, a significant proportion (typically
15%-25% of the Fund's portfolio) consists of bonds of C or lower quality,
including "distressed securities." The term distressed securities typically
refers to bonds issued by corporations that are either bankrupt or whose
financial condition indicates that restructuring or bankruptcy is likely. The
Fund will typically invest up to 25% of its portfolio in distressed securities.

         Under normal circumstances, the Fund will invest at least 65% of its
total assets in bonds and other debt securities, and thus the advisor believes
that the Fund will generate current income. However, the advisor will also
consider the potential for capital appreciation in making investments for the
Fund's portfolio. The Fund often buys bonds trading at a discount, which may
result in capital appreciation if the credit quality of the issuer improves. The
Fund may also invest in convertible preferred stock, convertible bonds and other
securities (including equity securities) without regard to yield
characteristics, which may result in capital appreciation if the underlying
common stock appreciates. There is no guarantee that this capital appreciation
will occur.


         When selecting debt instruments, the advisor stresses:

(1) Strong investor protection in the form of covenants contained in loan
agreements and other contracts that establish the terms of the debt instrument;
and
(2) Appraisals of the business' financial position and operating outlook, as
well as the advisor's appraisal of values that might be realized in a
reorganization or upon the sale of assets or the liquidation of the issuer.

         The advisor will use its best judgment as to the most favorable range
of maturities, and expects the average maturity of the Fund's portfolio to range
from 7-10 years.

         The Fund may, from time to time, purchase defaulted debt securities if,
in the opinion of the advisor, the issuer may resume interest payments in the
near future or if the advisor believes that the value of the assets available to
bond holders exceeds the purchase price of the bonds. There is no restriction on
the percentage of the Fund's assets that may be invested in bonds of a
particular rating, however the Fund will not invest more than 15% of its total
assets (at the time of purchase) in defaulted debt securities that are illiquid.
The Fund is a non-diversified Fund, which means that the Fund may take a larger
position in a small number of companies than a diversified fund.


<PAGE>


PRINCIPAL RISKS OF INVESTING IN THE FUND

o    MANAGEMENT RISK. The Fund's success at achieving its investment objective
     is dependent upon the Fund's advisor correctly forecasting future changes
     in interest rates and correctly accessing the risks of the junk bonds in
     which the Fund invests. There is no assurance that the advisor will be
     successful and, if its forecasts are wrong, the Fund may suffer a loss of
     principal or fail to fully participate in capital appreciation and the Fund
     may not have a yield as high as it might have otherwise.

o    JUNK BOND RISK. Because the Fund invests in junk bonds, the Fund may be
     subject to greater levels of interest rate, credit and liquidity risk than
     funds that do not invest in such securities. Junk bonds are considered
     predominately speculative with respect to the issuer's continuing ability
     to make principal and interest payments. An economic downturn or period of
     rising interest rates could adversely affect the market for junk bonds,
     reducing the Fund's ability to sell its junk bonds (liquidity risk) and
     reducing the Fund's share price. Because the Fund invests a significant
     proportion of its portfolio in lower quality junk bonds (including
     distressed securities), the Fund's exposure to these risks is greater than
     some other junk bond funds and the value of the Fund's shares could be more
     negatively affected.

o    INTEREST RATE RISK. The value of your investment may decrease when interest
     rates rise. The Fund's exposure to interest rate risk (and the
     corresponding effect on the Fund's share price) may be greater because the
     Fund invests a significant proportion of its portfolio in lower quality
     junk bonds.

o    DURATION RISK. Prices of fixed income securities with longer effective
     maturities are more sensitive to interest rate changes than those with
     shorter effective maturities.

o    CREDIT RISK. The issuer of the bond may not be able to make interest and
     principal payments when due. Generally, the lower the credit rating of a
     security, the greater the risk that the issuer will default on its
     obligation. Because it invests in junk bonds, the Fund is subject to
     substantial credit risk.

o    NON-DIVERSIFICATION RISK. As a non-diversified fund, the Fund's portfolio
     may at times focus on a limited number of companies and will be subject to
     substantially more investment risk and potential for volatility than a
     diversified fund. The Fund's share price could fall if the Fund is heavily
     invested in a particular bond and the price of that bond falls.


o    TURNOVER RISK. The Fund may at times have a portfolio turnover rate that is
     higher than other bond funds. Higher portfolio turnover would result in
     correspondingly greater trading costs (in the form of spreads), which will
     lower the Fund's total return, and may result in the distribution to
     shareholders of additional capital gains for tax purposes.


o    An investment in the Fund is not a deposit of any bank and is not insured
     or guaranteed by the Federal Deposit Insurance Corporation or any other
     government agency.

o    The Fund is not a complete investment program.

o    As with any mutual fund investment, the Fund's returns will vary and you
     could lose money.

IS THE FUND RIGHT FOR YOU?

The Fund may be a suitable investment for:


o    investors seeking to diversify their holdings with bonds and other fixed
     income securities

o    investors seeking higher potential returns than a more conservative bond
     fund

o    investors willing to accept the significantly greater risks associated with
     lower quality "junk bonds"

o    investors who can tolerate the increased risks and price fluctuations
     associated with a non-diversified fund



<PAGE>


HOW THE FUND HAS PERFORMED


         The bar chart and performance table below show the variability of the
Fund's returns, which is one indicator of the risks of investing in the Fund.
The bar chart shows changes in the Fund's returns since the Fund's inception.
The performance table shows how the Fund's average annual total returns compare
over time to those of a broad-based securities market index. Of course, the
Fund's past performance is not necessarily an indication of its future
performance.

[Bar Chart with the following numbers in the Prospectus]

         1998      -0.84%
         1999       5.75%


      During the period shown, the highest return for a quarter was 3.64% (Q1,
1999); and the lowest return was -3.90% (Q3, 1998).


*The Fund's year-to-date return as of March 31, 2000 was -1.35%.


AVERAGE ANNUAL TOTAL RETURNS:

                                           One Year        Since Inception


FLORIDA STREET BOND FUND                    -1.45%            -0.11%**
Merrill Lynch High Yield Bond Index          5.62%             4.04%
7-10 Year Treasury Index                    -4.14%             5.82%

**       August 4, 1997

FLORIDA STREET GROWTH FUND


INVESTMENT OBJECTIVE

         The investment objective of the Florida Street Growth Fund is to
provide long term growth of capital.

PRINCIPAL STRATEGIES

         The Fund invests primarily in common stocks of small to medium
capitalization U.S. companies (those with a market capitalization between $1 and
$5 billion). The advisor has established several criteria for selecting
investments:

(1) A strong financial position, as measured not only by balance sheet data, but
also by off-balance sheet liabilities and contingencies (as disclosed in
footnotes to financial statements and as determined through research of public
information).

(2) Responsible management and control groups, as gauged by managerial
competence as operators and investors as well as by an apparent absence of
intent to profit at the expense of stockholders.

(3) Availability of comprehensive and meaningful financial and related
information. The availability of financial statements and information which
provide the advisor with reliable benchmarks to aid in understanding the
business, its values and its dynamics.

(4) Availability of the security at a
market price which the advisor believes is a substantial discount to the
advisor's estimate of what the issue is worth, based on the application of the
advisor's valuation techniques. These include such measures as price to
earnings, price to sales, earnings growth momentum and earnings estimate trends.

         The Fund may sell a stock if

1) the advisor loses confidence in the company's management team, or

2) the advisor's forecast of the company's outlook for revenue and earnings
growth has deteriorated from the advisor's original forecast, or

3) the stock has appreciated to a degree that it is believed to offer a lower
potential return than other candidates for purchase, or

4) the stock exhibits unexplained poor price performance compared with the broad
market indices, which can be a sign of pending negative news.

         The Fund is a non-diversified fund, which means that the Fund may take
a larger position in a small number of companies than a diversified fund.

PRINCIPAL RISKS OF INVESTING IN THE FUND

o    MANAGEMENT RISK. The strategy used by the Fund's advisor may fail to
     produce the intended results.

o    SMALLER COMPANY RISK. The risks associated with investing in smaller
     companies include:

o    The earnings and prospects of smaller companies are more volatile than
     larger companies.

o    Smaller companies may experience higher failure rates than do larger
     companies.

o    The trading volume of securities of smaller companies is normally less than
     that of larger companies and, therefore, may disproportionately affect
     their market price, tending to make them fall more in response to selling
     pressure than is the case with larger companies

o    Smaller companies may have limited markets, product lines or financial
     resources and may lack management experience.

o    COMPANY RISK. The value of the Fund may decrease in response to the
     activities and financial prospects of an individual company in the Fund's
     portfolio. The value of an individual company can be more volatile than the
     market as a whole.

o    MARKET RISK. Overall stock market risks may also affect the value of the
     Fund. Factors such as domestic economic growth and market conditions,
     interest rate levels, and political events affect the securities markets
     and could cause the Fund's share price to fall.

o    NON-DIVERSIFICATION RISK: As a non-diversified fund, the Fund's portfolio
     may at times focus on a limited number of companies and will be subject to
     substantially more investment risk and potential for volatility than a
     diversified fund. The Fund's share price may fall if the Fund is heavily
     invested in a stock and the price of that stock falls.


o    SECTOR RISK. As of the date of this Prospectus, a significant portion of
     the Fund's assets are invested in the technology sector, including
     telecommunications. A weakness in this sector could result in significant
     losses to the Fund. Technology companies may be significantly affected by
     falling prices and profits, and intense competition. In addition, the rate
     of technological change is generally higher than other companies, often
     requiring extensive and sustained investment in research and development,
     and exposing such companies to the risk of rapid product obsolescence.
     Telecommunications companies are also subject to changing government
     regulations that may limit profits and restrict services offered. Changes
     in governmental policies, such as telephone and cable regulations and
     anti-trust enforcement, may have a material effect on the products and
     services of these companies. It is likely that some of today's technology
     companies will not exist in the future. The price of many technology stocks
     has risen based on projections of future earnings and company growth. If a
     company does not perform as expected, the price of the stock could decline
     significantly. Many technology companies are currently operating at a loss
     and may never be profitable.

o    TURNOVER RISK. The Fund may at times have a portfolio turnover rate that is
     higher than other stock funds. Higher portfolio turnover would result in
     correspondingly greater brokerage commission expenses (which will lower the
     Fund's total return) and may result in the distribution to shareholders of
     additional capital gains for tax purposes.


o    An investment in the Fund is not a deposit of any bank and is not insured
     or guaranteed by the Federal Deposit Insurance Corporation or any other
     government agency.

o    The Fund is not a complete investment program. As with any mutual fund
     investment, the Fund's returns will vary and you could lose money.

IS THE FUND RIGHT FOR YOU?

The Fund may be suitable for:

o    Long-term investors seeking a fund with a capital appreciation investment
     strategy

o    Investors who can tolerate the increased risks and price fluctuations
     associated with a non-diversified fund

o    Investors willing to accept the greater market price fluctuations
     associated with common stock of smaller companies

HOW THE FUND HAS PERFORMED


         The bar chart and performance table below show the variability of the
Fund's returns, which is one indicator of the risks of investing in the Fund.
The bar chart shows changes in the Fund's returns since the Fund's inception.
The performance table shows how the Fund's average annual total returns compare
over time to those of a broad-based securities market index. Of course, the
Fund's past performance is not necessarily an indication of its future
performance.


[Bar Chart with the following numbers in the Prospectus]

         1998       2.85%
         1999      39.15%

      During the period shown, the highest return for a quarter was 35.86% (Q4,
1999); and the lowest return was -19.40% (Q3, 1998).


*The Fund's year-to-date return as of March 31, 2000 was 29.74%.


AVERAGE ANNUAL TOTAL RETURNS:

                                         One Year           Since Inception


FLORIDA STREET GROWTH FUND                  20.06%             4.53%**
S&P Mid Cap Index                           21.06%            11.91%
S&P Small Cap Index                         12.02%             1.80%


**    August 6, 1997


<PAGE>



                   FEES AND EXPENSES OF INVESTING IN THE FUNDS

The tables describe the fees and expenses that you may pay if you buy and hold
shares of a Fund.
<TABLE>
<S>                                                                             <C>                      <C>
SHAREHOLDER FEES

(fees paid directly from your investment)                                       Institutional Class       Class C
                                                                                -------------------       -------

FLORIDA STREET BOND FUND                                                        NONE                      NONE
FLORIDA STREET GROWTH FUND                                                      NONE                      NONE

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)


FLORIDA STREET BOND FUND                                                          Institutional Class     Class C
                                                                                  -------------------     -------
Management Fee1                                                                   1.10%                   1.10%
Distribution and/or Service (12b-1) Fees                                          NONE                    1.00%
Other Expenses1 ,2                                                                0.07%                   0.07%
Total Annual Fund Operating Expenses1                                             1.17%                   2.17%


FLORIDA STREET GROWTH FUND


Management Fee                                                                    1.35%                   1.35%
Distribution and/or Service (12b-1) Fees                                          NONE                    1.00%
Other Expenses1,2                                                                 0.03%                   0.03%
Total Annual Fund Operating Expenses1                                             1.38%                   2.38%

         1  Information has been restated to reflect current fees and expenses.
         2 "Other Expenses" for Class C shares are based on estimated amounts
for the current fiscal year.

</TABLE>

Example:

         The example below is intended to help you compare the cost of investing
in a Fund with the cost of investing in other mutual funds. The example uses the
same assumptions as other mutual fund prospectuses: a $10,000 initial investment
for the time periods indicated, reinvestment of dividends and distributions, 5%
annual total return, constant operating expenses, and sale of all shares at the
end of each time period. Although your actual expenses may be different, based
on these assumptions your costs will be:
<TABLE>
<S>                                         <C>               <C>              <C>               <C>

FLORIDA STREET BOND FUND                    1 year            3 years          5 years           10 years
                                            ------            --------         -------           --------


Institutional Class                         $120              $374               $647              $1427
Class C                                     $222              $686              $1176              $2524



FLORIDA STREET GROWTH FUND                  1 year            3 years         5 years           10 years
                                            ------            --------        -------           --------


Institutional Class                         $141              $440             $760              $1666
Class C                                     $244              $751             $1284             $2741

</TABLE>


<PAGE>


                                HOW TO BUY SHARES

         The minimum initial investment in each Fund is $1,000 and minimum
subsequent investments are $100. The advisor may waive these minimums for
accounts participating in an automatic investment program. If your investment is
aggregated into an omnibus account established by an investment advisor, broker
or other intermediary, the account minimums apply to the omnibus account, not to
your individual investment. If you purchase or redeem shares through a
broker/dealer or another intermediary, you may be charged a fee by that
intermediary.

INITIAL PURCHASE

         BY MAIL- To be in proper form, your initial purchase request must
include: o a completed and signed investment application form (which accompanies
this Prospectus); and o a check (subject to the minimum amounts) made payable to
the Fund.

Mail application and check to:

U.S. Mail:                                 Overnight:
       Florida Street Funds                      Florida Street Funds
       c/o Unified Fund Services, Inc.           c/o Unified Fund Services, Inc.
       P.O. Box 6110                             431 North Pennsylvania Street
       Indianapolis, Indiana  46206-6110         Indianapolis, Indiana  46204

         BY WIRE- You may also purchase shares of a Fund by wiring federal funds
from your bank, which may charge you a fee for doing so. To wire money, you must
call Unified Fund Services, Inc. the Funds' transfer agent at (800) 890-5344 to
set up your account and obtain an account number. You should be prepared at that
time to provide the information on the application. Then, provide your bank with
the following information for purposes of wiring your investment:


         UMB Bank, N.A.
         ABA [#101000695]

         Attn: Florida Street Funds


         Account Name _________________(write in shareholder name) For the
         Account # ______________(write in account number)
         D.D.A.# 9870983834

         You must mail a signed application to Unified Fund Services, Inc., the
Funds' transfer agent, at the above address in order to complete your initial
wire purchase. Wire orders will be accepted only on a day on which the Funds,
custodian and transfer agent are open for business. A wire purchase will not be
considered made until the wired money is received and the purchase is accepted
by the Funds. Any delays which may occur in wiring money, including delays which
may occur in processing by the banks, are not the responsibility of the Funds or
the transfer agent. There is presently no fee for the receipt of wired funds,
but the Funds may charge shareholders for this service in the future.


ADDITIONAL INVESTMENTS

         You may purchase additional shares of either Fund at any time (subject
to minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain:

         -your name                         -the name of your account(s)
         -your account number(s)            -the name of the Fund
         -a check made payable to Florida Street Funds

Checks should be sent to the Florida Street Funds at the address listed above. A
bank wire should be sent as outlined above.


<PAGE>


AUTOMATIC INVESTMENT PLAN

         You may make regular investments in a Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.

DESCRIPTION OF CLASSES

         Each Fund currently offers two classes of shares: "Institutional Class"
shares and "Class C" shares. The classes differ as follows: 1) Class C shares
pay 12b-1 expenses of 1.00%, and 2) each class may bear differing amounts of
certain class specific expenses.

         When purchasing shares, specify which Class you are purchasing. All
purchase orders that fail to specify a Class will automatically be invested in
Class C shares. The differing expenses applicable to the different classes of a
Fund's shares may affect the performance of those classes. Broker/dealers and
others entitled to receive compensation for selling or servicing Fund shares may
receive more with respect to one class than another.

DISTRIBUTION PLANS

         Each Fund has adopted plans under Rule 12b-1 that allow Class C of the
Fund to pay distribution fees for the sale and distribution of its shares and
allows the class to pay for services provided to shareholders. Class C shares
pay annual 12b-1 expenses of 1.00% (of which 0.75% is an asset based sales
charge and 0.25% is a service fee). Because these fees are paid out of each
Fund's assets on an on-going basis, over time these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges.

TAX SHELTERED RETIREMENT PLANS

         Since the Funds are oriented to longer-term investments, the Funds may
be an appropriate investment medium for tax-sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit-sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Funds' transfer agent for the procedure
to open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Please consult with an attorney or tax advisor
regarding these plans. You must pay custodial fees for your IRA by redemption of
sufficient shares of the Fund from the IRA unless you pay the fees directly to
the IRA custodian. Call the Funds' transfer agent about the IRA custodial fees.

OTHER PURCHASE INFORMATION

         The Funds may limit the amount of purchases and refuse to sell to any
person. If your check or wire does not clear, you will be responsible for any
loss incurred by the Funds. If you are already a shareholder, the Funds can
redeem shares from any identically registered account in the Fund as
reimbursement for any loss incurred. You may be prohibited or restricted from
making future purchases in the Fund.


         The Funds have authorized certain broker-dealers and other financial
institutions (including their designated intermediaries) to accept on their
behalf purchase and sell orders. A Fund is deemed to have received an order when
the authorized person or designee accepts the order, and the order is processed
at the net asset value next calculated thereafter. It is the responsibility of
the broker-dealer or other financial institution to transmit orders promptly to
the Funds' transfer agent.



<PAGE>



                              HOW TO REDEEM SHARES

         You may receive redemption payments by check or federal wire transfer.
The proceeds may be more or less than the purchase price of your shares,
depending on the market value of the Fund's securities at the time of your
redemption. Presently there is no charge for wire redemptions; however, the
Funds may charge for this service in the future. Any charges for wire
redemptions will be deducted from your Fund account by redemption of shares. If
you redeem your shares through a broker/dealer or other institution, you may be
charged a fee by that institution.

         BY MAIL - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:

                             Florida Street Funds
                             c/o Unified Fund Services, Inc.
                             P.O. Box 6110
                             Indianapolis, Indiana  46206-6110

         Requests to sell shares are processed at the net asset value next
calculated after we receive your order in proper form. To be in proper form,
your request for a redemption must include your letter of instruction, including
the Fund name, account number, account name(s), the address, and the dollar
amount or number of shares you wish to redeem. This request must be signed by
all registered share owner(s) in the exact name(s) and any special capacity in
which they are registered. The Funds may require that signatures be guaranteed
by a bank or member firm of a national securities exchange. Signature guarantees
are for the protection of shareholders. At the discretion of the Funds or the
Funds' transfer agent, a shareholder, prior to redemption, may be required to
furnish additional legal documents to insure proper authorization.

         BY TELEPHONE - You may redeem any part of your account in a Fund by
calling the Funds'transfer agent at (800) 890-5344. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Funds, the transfer agent and the custodian are
not liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.

         The Funds or the transfer agent may terminate the telephone redemption
procedures at any time. During periods of extreme market activity, it is
possible that shareholders may encounter some difficulty in telephoning the
Funds, although neither the Funds nor the transfer agent has ever experienced
difficulties in receiving and in a timely fashion responding to telephone
requests for redemptions or exchanges. If you are unable to reach the Funds by
telephone, you may request a redemption or exchange by mail.

         BY SYSTEMATIC WITHDRAWAL PLAN - As another convenience, the Funds offer
a Systematic Withdrawal Program whereby you may request that a check drawn in a
predetermined amount be sent each month or calendar quarter. Your account must
have Fund shares with a value of at least $10,000 in order to start a Systematic
Withdrawal Program, and the minimum amount that may be withdrawn each month or
quarter under the Systematic Withdrawal program is $100. You, or the Funds, may
terminate this program at any time without charge or penalty. Termination will
become effective five business days following receipt of your instructions.
Shares will be sold within three business days before month-end. A withdrawal
under the Systematic Withdrawal Program involves a redemption of shares, and may
result in a gain or loss for federal income tax purposes. In addition, if the
amount withdrawn exceeds the dividends credited to your account, the account
ultimately may be depleted.


<PAGE>


         ADDITIONAL INFORMATION - If you are not certain of the requirements for
a redemption please call the Funds' transfer agent at (800) 890-5344.
Redemptions specifying a certain date or share price cannot be accepted and will
be returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen calendar days. Also, when the New York Stock
Exchange is closed (or when trading is restricted) for any reason other than its
customary weekend or holiday closing, or under any emergency circumstances (as
determined by the Securities and Exchange Commission) the Funds may suspend
redemptions or postpone payment dates.

         Because the Funds incur certain fixed costs in maintaining shareholder
accounts, the Funds may require you to redeem all of your shares in a Fund on 30
days' written notice if the value of your shares in the Fund is less than $1,000
due to redemption, or such other minimum amount as the Funds may determine from
time to time. An involuntary redemption constitutes a sale. You should consult
your tax advisor concerning the tax consequences of involuntary redemptions. You
may increase the value of your shares in a Fund to the minimum amount within the
30-day period. Your shares are subject to redemption at any time if the Board of
Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Funds.

                        DETERMINATION OF NET ASSET VALUE

         The price you pay for your shares is based on the Fund's net asset
value per share (NAV). The NAV is calculated at the close of trading (normally
4:00 p.m. Eastern time) on each day the New York Stock Exchange is open for
business (the Stock Exchange is closed on weekends, Federal holidays and Good
Friday). The NAV is calculated by dividing the value of the Fund's total assets
(including interest and dividends accrued but not yet received) minus
liabilities (including accrued expenses) by the total number of shares
outstanding.


         The Fund's assets are generally valued at their market value. If market
prices are not available, or if an event occurs after the close of the trading
market that materially affects the values, assets may be valued by the Fund's
advisor at their fair value, according to procedures approved by the Fund's
board of trustees. When determining fair value, factors considered include the
type of security, the nature of restrictions on disposition of the security,
cost at date of purchase, information as to any transactions or offers with
respect to the security, existence of merger proposals or tender offers
affecting the security, price and extent of public trading in similar securities
of the issuer or comparable companies, and other relevant matters.

         Requests to purchase and sell shares are processed at the NAV next
calculated after we receive your order in proper form.


                       DIVIDENDS, DISTRIBUTIONS AND TAXES

         DIVIDENDS AND DISTRIBUTIONS. The Florida Street Growth Fund typically
distributes substantially all of its net investment income in the form of
dividends to its shareholders on an annual basis. The Florida Street Bond Fund
intends to declare substantially all of its net investment income as dividends
to its shareholders on a daily basis and to pay such dividends monthly. These
distributions are automatically reinvested in the Fund unless you request cash
distributions on your application or through a written request. The Bond Fund
expects that its distributions will consist primarily of income. The Growth Fund
expects that its distributions will consist primarily of capital gains.

         TAXES. In general, selling shares of a Fund and receiving distributions
(whether reinvested or taken in cash) are taxable events. Depending on the
purchase price and the sale price, you may have a gain or a loss on any shares
sold. Any tax liabilities generated by your transactions or by receiving
distributions are your responsibility. You may want to avoid making a
substantial investment when a Fund is about to make a capital gains distribution
because you would be responsible for any taxes on the distribution regardless of
how long you have owned your shares.

         Early each year, the Funds will mail to you a statement setting forth
the federal income tax information for all distributions made during the
previous year. If you do not provide your taxpayer identification number, your
account will be subject to backup withholding.

         The tax considerations described in this section do not apply to
tax-deferred accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult with your tax advisor about your
investment.


                             MANAGEMENT OF THE FUNDS


     CommonWealth Advisors, Inc., 247 Florida Street, Baton Rouge, LA 70801,
serves as investment advisor to the Funds. CommonWealth Advisors, Inc., is an
independent investment advisory firm that has provided investment supervisory
services and financial planning to individuals, financial institutions,
corporations, trusts, estates, charitable organizations, and retirement plans
since 1991.


         For the fiscal year ended October 31, 1999 the Florida Street Bond Fund
paid the advisor a fee equal to an annual average rate of 0.75% of its average
daily net assets. For the fiscal year ended October 31, 1999 the Florida Street
Growth Fund paid the advisor a fee equal to an annual average rate of 1.35% of
its average daily net assets.


     Walter A. Morales has been responsible for the day-to-day management of the
Florida Street Bond Fund since its inception. Mr. Morales began privately
managing individual common stocks in 1984, and has served as the advisor's
president and chief investment manager since its founding in 1991. Mr. Morales
has a Masters in Business Administration and a B.S. degree in Chemistry from
Louisiana State University. He previously worked as a Vice President and Senior
Trust Investment Officer for Baton Rouge Bank and Trust, and as an Investment
Broker for A.G. Edwards and Sons, Inc.

     Richard L. Chauvin, Jr. has been responsible for the day-to-day management
of the Florida Street Growth Fund since its inception. Mr. Chauvin is Senior
Vice President and Fund Manager of the advisor. Prior to joining the Fund's
advisor in 1997, he served for one year as Regional Director of Portfolio
Management at Bank One Investment Advisors ("BOIA"). From 1986 to 1996, he
served as a Vice President, portfolio manager and fund manager for Premier
Investment Advisors which merged into BOIA in 1996. His duties included managing
a $100 million equity mutual fund and numerous accounts for individuals and
foundations. Mr. Chauvin received a B.S. and M.S. in Finance from Louisiana
State University in 1976 and 1978, respectively.

         The Fund's advisor pays all of the operating expenses of the Funds
except brokerage, taxes, borrowing costs (such as (a) interest and (b) dividend
expenses on securities sold short), Rule 12b-1 expenses, fees and expenses of
non-interested person trustees and extraordinary expenses. In this regard, it
should be noted that most investment companies pay their own operating expenses
directly, while the Funds' expenses, except those specified above, are paid by
the advisor. The advisor (not the Funds) may pay certain financial institutions
(which may include banks, brokers, securities dealers and other industry
professionals) a fee for providing distribution-related services and/or for
performing certain administrative servicing functions for Fund shareholders to
the extent these institutions are allowed to do so by applicable statute, rule
or regulation.

                          INVESTMENT POLICIES AND RISKS

         This section contains general information about various types of
securities and investment techniques that a Fund may purchase or employ.

GENERAL

      The investment objective of each Fund may be changed without shareholder
approval.

      From time to time, the Funds may take temporary defensive positions which
are inconsistent with the Funds' principal investment strategies, in attempting
to respond to adverse market, economic, political, or other conditions. For
example, either Fund may hold all or a portion of its assets in money market
instruments, securities of other no-load mutual funds or repurchase agreements.
If a Fund invests in shares of another mutual fund, the shareholders of the Fund
generally will be subject to duplicative management fees. As a result of
engaging in these temporary measures, a Fund may not achieve its investment
objective. Either Fund may also invest in such instruments at any time to
maintain liquidity or pending selection of investments in accordance with its
policies.

DEBT SECURITIES. The Bond Fund may buy debt securities of all types and
qualities. Bonds and other debt instruments are used by issuers to borrow money
from investors. The issuer pays the investor a fixed or variable rate of
interest, and must repay the amount borrowed at maturity. Some debt securities,
such as zero coupon bonds, do not pay current interest, but are purchased at a
discount from their face values. Debt securities, loans, and other direct debt
have varying degrees of quality and varying levels of sensitivity to changes in
interest rates. Longer-term bonds are generally more sensitive to interest rate
changes than short-term bonds.

RISKS OF INVESTING IN HIGH YIELD SECURITIES ("JUNK BONDS"). Lower-rated
long-term securities, including securities rated from BB to D by S&P or Ba to C
by Moody's or, if unrated, of comparable quality in the opinion of the Advisor,
will usually offer higher yields than higher-rated securities. However, there is
more risk associated with these investments. This is because of the reduced
creditworthiness and increased risk of default that these securities carry. Junk
bonds generally tend to reflect short-term corporate and market developments to
a greater extent than higher-rated securities that react primarily to
fluctuations in the general level of interest rates. Junk bonds also have
greater sensitivity to significant increases in interest rates. Short-term
corporate and market developments affecting the prices and liquidity of junk
bonds could include adverse news impacting major issues or underwriters or
dealers in junk bonds or unrated securities. In addition, since there are fewer
investors in junk bonds, it may be harder to sell securities at an optimum time.

         An economic downturn may adversely affect the value of some junk bonds.
Such a downturn may especially affect highly leveraged companies or companies in
cyclically sensitive industries, where deterioration in a company's cash flow
may impair its ability to meet its obligation to pay principal and interest to
bondholders in a timely fashion. From time to time, as a result of changing
conditions, issuers of junk bonds may seek or may be required to restructure the
terms and conditions of the securities they have issued. As a result of these
restructurings, holders of junk bonds may receive less principal and interest
than originally expected at the time such bonds were purchased. In the event of
a restructuring, the Bond Fund may bear additional legal or administrative
expenses in order to maximize recovery from an issuer. The secondary trading
market for junk bonds is generally less liquid than the secondary trading market
for higher-rated bonds.

         The risk of loss due to default by the issuer is significantly greater
for the holders of junk bonds because such securities are generally unsecured
and are often subordinated to other obligations of the issuer. During an
economic downturn or a sustained period of rising interest rates, highly
leveraged issuers of junk bonds may experience financial stress and may not have
sufficient revenues to meet their interest payment obligations. An issuer's
ability to service its debt obligations may also be adversely affected by
specific corporate developments, its inability to meet specific projected
business forecasts, or the unavailability of additional financing.

         Factors adversely affecting the market value of junk bonds and other
Fund securities will adversely affect the Fund's net asset value. In addition,
the Bond Fund may incur additional expenses to the extent it is required to seek
recovery upon a default in the payment of principal or interest on its Fund
holdings.

CONVERTIBLE SECURITIES. Each Fund may invest in convertible securities. A
convertible security is a bond or preferred stock which may be converted at a
stated price within a specific period of time into a specified number of shares
of common stock of the same or different issuer. Convertible securities are
senior to common stock in a corporation's capital structure, but usually are
subordinated to non-convertible debt securities. While providing a fixed income
stream generally higher in yield than the income derived from a common stock,
but lower than that afforded by a non-convertible debt security, a convertible
security also affords an investor the opportunity, through its conversion
feature, to participate in the capital appreciation of the common stock into
which it is convertible.

         In general, the market value of a convertible security is the higher of
its investment value (its value as a fixed income security) or its conversion
value (the value of the underlying shares of common stock if the security is
converted). As a fixed income security, the market value of a convertible
security generally increases when interest rates decline and generally decreases
when interest rates rise; however, the price of a convertible security generally
increases as the market value of the underlying stock increases, and generally
decreases as the market value of the underlying stock declines.

                              FINANCIAL HIGHLIGHTS

         The following condensed supplementary financial information for the
periods ended October 31, 1997, 1998 and 1999 is derived from the audited
financial statements of each Fund. The financial statements of each Fund have
been audited by McCurdy & Associates CPA's, Inc., independent public
accountants, and are included in the Funds' Annual Report. The Annual Report
contains additional performance information and is available upon request and
without charge.
<TABLE>
<S>                                                         <C>                    <C>                <C>


FLORIDA STREET BOND FUND                                          YEAR                 YEAR               PERIOD
                                                                 ENDED                ENDED                ENDED
                                                              OCTOBER 31,          OCTOBER 31,          OCTOBER 31,
                                                                  1999                 1998              1997 (A)

                                                             ---------------      ---------------      --------------

SELECTED PER SHARE DATA

Net asset value, beginning of period                             $    9.16         $       9.95         $     10.00

                                                             ---------------      ---------------      --------------

Income from investment operations
  Net investment income                                                1.51                 0.85                0.21
  Net realized and unrealized gain(loss)                             (1.60)               (0.79)              (0.12)

                                                             ---------------      ---------------      --------------

Total from investment operations                                     (0.09)                 0.06                0.09

                                                             ---------------      ---------------      --------------

Less Distributions

  From net investment income                                         (1.51)               (0.85)              (0.02)
  From net realized gain(loss)                                       (0.03)                    -              (0.12)

                                                             ---------------      ---------------      --------------

Total distributions                                                  (1.54)               (0.85)              (0.14)

                                                             ---------------      ---------------      --------------
                                                             ---------------      ---------------      --------------

Net asset value, end of period                                    $    7.53            $    9.16           $    9.95

                                                             ===============      ===============      ==============


TOTAL RETURN (b)                                                    (1.45)%                0.33%               0.90%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000)                                     $18,294              $19,929              $7,289
Ratio of expenses to average net assets                               0.75%                0.75%               0.53% (c)
Ratio of expenses to average net assets
    before reimbursement                                              1.17%                1.10%               1.10% (c)
Ratio of net investment income to                                    17.77%                8.73%               3.95% (c)
   average net assets
Ratio of net investment income to
   average net assets before reimbursement                           17.35%                8.38%               3.38% (c)
Portfolio turnover rate                                             129.38%               10.45%              60.55% (c)

(a)  For the period August 4, 1997 (commencement of operations) to October 31, 1997
(b)  For periods of less than a full year, total returns are not annualized.
(c)  Annualized

FLORIDA STREET GROWTH FUND

                                                                           YEAR                  YEAR                PERIOD
                                                                           ENDED                ENDED                 ENDED
                                                                        OCTOBER 31,          OCTOBER 31,           OCTOBER 31,
                                                                           1999                  1998               1997 (A)

                                                                       --------------       ---------------       --------------

SELECTED PER SHARE DATA

Net asset value, beginning of period                                   $                    $       10.19         $
                                                                       9.16                                       10.00

                                                                       --------------       ---------------       --------------

Income from investment operations Net investment income (loss) Net realized and
  unrealized gain (loss)

                                                                                1.88        (1.01)                0.16

                                                                       --------------       ---------------       --------------

Total from investment operations

                                                                       --------------       ---------------       --------------

Less Distributions
  From net investment income
  From net realized gain (loss)
                                                                       -                    (0.03)                -

                                                                       --------------       ---------------       --------------

Total Distributions


                                                                       --------------       ---------------       --------------

Net asset value, end of period                                         $                    $                     $
                                                                       10.98                9.16                  10.19

                                                                       ==============       ===============       ==============


TOTAL RETURN (b)                                                              20.06%               (9.73)%                1.90%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000)                                               $3,603                $3,320               $2,117
Ratio of expenses to average net assets                                        1.35%                 1.25%                1.35% (c)
Ratio of expenses to average net assets
   before reimbursement                                                        1.38%                 1.35%                1.35% (c)
Ratio of net investment income (loss) to                                     (0.40)%                 0.21%                1.14% (c)
   average net assets
Ratio of net investment income (loss) to
   average net assets before reimbursement                                   (0.43)%                 0.12%                1.14% (c)
Portfolio turnover rate                                                      111.97%                63.10%                0.87% (c)

(a) August 6, 1997 (commencement of operations) to October 31, 1997
(b) For periods of less than a full year, total returns are not annualized.
(c) Annualized


</TABLE>





<PAGE>





                              FOR MORE INFORMATION


      Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this prospectus by
reference, contains detailed information on Fund policies and operations. Annual
and semi-annual reports contain management's discussion of market conditions,
investment strategies and performance results as of the Funds' latest
semi-annual or annual fiscal year end.


         Call the Funds at 800-890-5344 to request free copies of the SAI and
the Funds' annual and semi-annual reports, to request other information about
the Funds and to make shareholder inquiries.

         You may review and copy information about the Funds (including the SAI
and other reports) at the Securities and Exchange Commission (SEC) Public
Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours
and operation. You may also obtain reports and other information about the Funds
on the EDGAR Database on the SEC's Internet site at http.//www.sec.gov, and
copies of this information may be obtained, after paying a duplicating fee, by
electronic request at the following e-mail address: [email protected], or by
writing the SEC's Public Reference Section of the SEC, Washington, D.C.
20549-0102.

Investment Company Act #811-9096



<PAGE>



                              FLORIDA STREET FUNDS

                       STATEMENT OF ADDITIONAL INFORMATION


                                 April 14, 2000



         This Statement of Additional Information ("SAI") is not a Prospectus.
It should be read in conjunction with the Prospectus of Florida Street Funds
dated April 14, 2000. This SAI incorporates by reference the Trust's Annual
Report to Shareholders for the fiscal year ended October 31, 1999 ("Annual
Report"). A free copy of the Prospectus or Annual Report can be obtained by
writing the Transfer Agent at Unified Fund Services, Inc., 431 North
Pennsylvania Street, Indianapolis, Indiana 46204 or by calling 1-800-890-5344.


TABLE OF CONTENTS

                                                                            PAGE

DESCRIPTION OF THE TRUST AND FUND..............................................2

ADDITIONAL INFORMATION ABOUT FUND
INVESTMENTS AND RISK CONSIDERATIONS............................................2

INVESTMENT LIMITATIONS........................................................19

THE INVESTMENT ADVISOR........................................................21

TRUSTEES AND OFFICERS.........................................................21


PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................22


DETERMINATION OF SHARE PRICE..................................................23

INVESTMENT PERFORMANCE........................................................23

CUSTODIAN.....................................................................24

TRANSFER AGENT................................................................25

ACCOUNTANTS...................................................................25

DISTRIBUTOR...................................................................25

ADMINISTRATOR.................................................................25

FINANCIAL STATEMENTS..........................................................25








2817 04/13/2000 12:50 PM



<PAGE>


DESCRIPTION OF THE AND FUNDS

     .........Florida Street Bond Fund and Florida Street Growth Fund (each a
"Fund" or collectively the "Funds") were organized as non-diversified series of
AmeriPrime Funds (the "Trust"). The Trust is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. Each Fund is one of a series of funds
currently authorized by the Trustees, and are referred to, and may conduct
business as, the "Florida Street Funds." The Funds were organized on June 10,
1997, and commenced operations on June 10, 1997.

     .........The Fund does not issue share certificates. All shares are held in
non-certificate form registered on the books of the Fund and the Transfer Agent
for the account of the Shareholder. Each share of a series represents an equal
proportionate interest in the assets and liabilities belonging to that series
with each other share of that series and is entitled to such dividends and
distributions out of income belonging to the series as are declared by the
Trustees. The shares do not have cumulative voting rights or any preemptive or
conversion rights, and the Trustees have the authority from time to time to
divide or combine the shares of any series into a greater or lesser number of
shares of that series so long as the proportionate beneficial interest in the
assets belonging to that series and the rights of shares of any other series are
in no way affected. In case of any liquidation of a series, the holders of
shares of the series being liquidated will be entitled to receive as a class a
distribution out of the assets, net of the liabilities, belonging to that
series. Expenses attributable to any series are borne by that series. Any
general expenses of the Trust not readily identifiable as belonging to a
particular series are allocated by or under the direction of the Trustees in
such manner as the Trustees determine to be fair and equitable. No shareholder
is liable to further calls or to assessment by the Trust without his or her
express consent.

     .........Any Trustee of the Trust may be removed by vote of the
shareholders holding not less than two-thirds of the outstanding shares of the
Trust. The Trust does not hold an annual meeting of shareholders. When matters
are submitted to shareholders for a vote, each shareholder is entitled to one
vote for each whole share he owns and fractional votes for fractional shares he
owns. All shares of each Fund have equal voting rights and liquidations rights.
The Declaration of Trust can be amended by the Trustees, except that any
amendment that adversely effects the rights of shareholders must be approved by
the shareholders affected. Each share of each Fund is subject to redemption at
any time if the Board of Trustees determines in its sole discretion that failure
to do so redeem may have materially adverse consequences to all or any of the
Fund's shareholders.


     .........As of April 12, 2000, the following persons may be deemed to
beneficially own five percent (5%) or more of the Florida Street Bond Fund:
Charles Schwab & Co., Inc., ("Schwab"), 101 Montgomery Street, San Francisco, CA
94104 - 97.98%.

     .........As of April 12, 2000, the following persons may be deemed to
beneficially own five percent (5%) of more of the Florida Street Growth Fund:
Charles Schwab & Co., Inc., ("Schwab"), 101 Montgomery Street, San Francisco, CA
94104 - 96.02%.

     .........As of April 12, 2000, the officers and trustees as a group own
less than one percent (1%) of each Fund.

     .........For information concerning the purchase and redemption of shares
of the Funds, see "How to Buy Shares" and "How to Redeem Shares" in the Funds'
Prospectus. For a description of the methods used to determine the share price
and value of each Fund's assets, see "Determination of Net Asset Value" in the
Funds' Prospectus.


                        ADDITIONAL INFORMATION ABOUT FUND
                       INVESTMENTS AND RISK CONSIDERATIONS

         This section contains a discussion of some of the investments each Fund
may make and some of the techniques the Funds may use

 .
         A. EQUITY SECURITIES. Each Fund may invest in equity securities, which
include common stock, preferred stock, trust or limited partnership interests,
rights and warrants to subscribe to or purchase such securities, sponsored or
unsponsored American Depository Receipts ("ADRs"), European Depository Receipts
("EDR"), Global Depository Receipts ("GDRs"), and convertible securities
consisting of debt securities or preferred stock that may be converted into
common stock or that carry the right to purchase common stock. Common stocks,
the most familiar type, represent an equity (ownership) interest in a
corporation.

         Warrants are instruments that entitle the holder to buy underlying
equity securities at a specific price for a specific period of time. A warrant
tends to be more volatile than its underlying securities and ceases to have
value if it is not exercised prior to its expiration date. In addition, changes
in the value of a warrant do not necessarily correspond to changes in the value
of its underlying securities.

         ADRs, GDRs and EDRs are certificates evidencing ownership of shares of
a foreign-based issuer held in trust by a bank or similar financial institution.
Designed for use in U.S. and European securities markets, respectively, ADRs,
GDRs and EDRs are alternatives to the purchase of the underlying securities in
their national markets and currencies. ADRs, GDRs and EDRs are subject to the
same risks as the foreign securities to which they relate. See "Risks of
Investing in Foreign Securities" herein.

         Preferred stock has a preference in liquidation (and, generally
dividends) over common stock but is subordinated in liquidation to debt. As a
general rule the market value of preferred stocks with fixed dividend rates and
no conversion rights varies inversely with interest rates and perceived credit
risk, with the price determined by the dividend rate. Some preferred stocks are
convertible into other securities, (for example, common stock) at a fixed price
and ratio or upon the occurrence of certain events. The market price of
convertible preferred stocks generally reflects an element of conversion value.
Because many preferred stocks lack a fixed maturity date, these securities
generally fluctuate substantially in value when interest rates change; such
fluctuations often exceed those of long-term bonds of the same issuer. Some
preferred stocks pay an adjustable dividend that may be based on an index,
formula, auction procedure or other dividend rate reset mechanism. In the
absence of credit deterioration, adjustable rate preferred stocks tend to have
more stable market values than fixed rate preferred stocks. All preferred stocks
are also subject to the same types of credit risks of the issuer as corporate
bonds. In addition, because preferred stock is junior to debt securities and
other obligations of an issuer, deterioration in the credit rating of the issuer
will cause greater changes in the value of a preferred stock than in a more
senior debt security with similar yield characteristics. Preferred stocks may be
rated by S&P and Moody's although there is no minimum rating which a preferred
stock must have (and a preferred stock may not be rated) to be an eligible
investment for a Fund. The Advisor expects, however, that generally the
preferred stocks in which a Fund invests will be rated at least CCC by S&P or
Caa by Moody's or, if unrated, of comparable quality in the opinion of the
Advisor. Preferred stocks rated CCC by S&P are regarded as predominantly
speculative with respect to the issuer's capacity to pay preferred stock
obligations and represent the highest degree of speculation among securities
rated between BB and CCC; preferred stocks rated Caa by Moody's are likely to be
in arrears on dividend payments. Moody's rating with respect to preferred stocks
does not purport to indicate the future status of payments of dividends.

         In addition to investing directly in common stocks, each Fund may
invest in S&P Depositary Receipts ("SPDRs") and similar instruments. SPDRs are
shares of a publicly traded unit investment trust which owns the stocks included
in the applicable S&P Index such as the S&P 500 Index or the S&P Mid Cap 400
Index. Changes in the price of SPDRs track the movement of the associated Index
relatively closely.

         B. INVESTMENT COMPANIES. The Funds may invest without limitation in
other registered investment companies. With respect to certain countries in
which capital markets are either less developed or not easily accessed,
investments by each Fund may be made through investment in other registered
investment companies that in turn are authorized to invest in the securities of
such countries. Investment in other investment companies is limited in amount by
the Investment Company Act of 1940, as amended (the "1940 Act"), will involve
the indirect payment of a portion of the expenses, including advisory fees, of
such other investment companies and may result in a duplication of fees and
expenses.

         C. INVESTMENT IN RELATIVELY NEW ISSUES. Each Fund may invest in the
common stock and debt securities of selected new issuers (i.e., those having
continuous operating histories of less than three years). If a Fund invests in
debt securities of new issuers, it will only be in those issues where the
Advisor believes there are strong contractual protections for the holder. If
issuers meet the investment criteria discussed above, the Funds may invest in
securities without respect to the age of the issuer. Investments in new issuers
may carry special risks and may be more speculative because such companies are
relatively unseasoned. Such companies may also lack sufficient resources, may be
unable to generate internally the funds necessary for growth and may find
external financing to be unavailable on favorable terms or even totally
unavailable. Those companies will often be involved in the development or
marketing of a new product with no established market, which could lead to
significant losses.

     D. U.S. GOVERNMENT SECURITIES. U.S. Government Securities are high-quality
debt securities issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. government. Not all U.S. government securities are
backed by the full faith and credit of the United States. For example,
securities issued by the Farm Credit Banks or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money from
the U.S. Treasury under certain circumstances. However, securities issued by
other agencies or instrumentalities are supported only by the credit of the
entity that issued them.

         E. ZERO COUPON SECURITIES. The Bond Fund may invest in zero coupon
securities which are debt securities issued or sold at a discount from their
face value which do not entitle the holder to any periodic payment of interest
prior to maturity or a specified redemption date (or cash payment date). These
involve risks that are similar to those of other debt securities, although they
may be more volatile, and certain zero coupon securities move in the same
direction as interest rates. The amount of the discount varies depending on the
time remaining until maturity or cash payment date, prevailing interest rates,
liquidity of the security and perceived credit quality of the issuer. Zero
coupon securities also may take the form of debt securities that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. The market prices of zero coupon securities generally
are more volatile than the market prices of interest-bearing securities and are
likely to respond to a greater degree to changes in interest rates than
interest-bearing securities having similar maturities and credit qualities.

         F. WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Bond Fund may
purchase securities on a when-issued or delayed delivery basis. Delivery of and
payment for these securities may take place as long as a month or more after the
date of the purchase commitment. The value of these securities is subject to
market fluctuation during this period and no income accrues to the Fund until
settlement takes place. The Fund maintains with the Custodian a segregated
account containing high grade liquid securities in an amount at least equal to
these commitments.

         G. LOWER QUALITY DEBT SECURITIES. The Bond Fund may purchase lower
quality debt securities, or unrated debt securities, that have poor protection
of payment of principal and interest. These securities often are considered to
be speculative and involve greater risk of default and of price changes due to
changes in the issuer's creditworthiness. Market prices of these securities may
fluctuate more than higher quality debt securities and may decline significantly
in periods of general economic difficulty which may follow periods of rising
rates. While the market for high yield corporate debt securities has been in
existence for many years and has weathered previous economic downturns, the
market in recent years has experienced a dramatic increase in the large-scale
use of such securities to fund highly leveraged corporate acquisitions and
restructurings. Accordingly, past experience may not provide an accurate
indication of future performance of the high yield bond market, especially
during periods of economic recession. A Fund may invest in securities which are
of lower quality or are unrated if the Advisor determines that the securities
provide the opportunity of meeting a Fund's objective without presenting
excessive risk. The Advisor will consider all factors which it deems
appropriate, including ratings, in making investment decisions for a Fund and
will attempt to minimize investment risks through diversification, investment
analysis and monitoring of general economic conditions and trends. To the extend
a Fund invests in lower quality securities, achievement of its investment
objective may be more dependent on the Advisor's credit analyses than is the
case for higher quality bonds. While the Advisor may refer to ratings, it does
not rely exclusively on ratings, but makes its own independent and ongoing
review of credit quality.

         The market for lower quality securities may be thinner and less active
than that for higher quality securities, which can adversely affect the prices
at which these securities can be sold. If there is not established retail
secondary market and market quotations are not available, these securities are
valued in accordance with procedures established by the Board of Trustees,
including the use of outside pricing services. Judgment plays a greater role in
valuing high yield corporate debt securities than is the case for securities for
which external sources for quotations and last-sale information are available.
Adverse publicity and changing investor perceptions may affect the ability of
outside pricing services used by a Fund to value as Fund securities, and a
Fund's ability to dispose of these lower quality debt securities.

         Lower quality securities present risks based on payment expectations.
For example, high yield bonds may contain redemption or call provisions. If an
issuer exercises the provisions in a declining interest rate market, a Fund
would have to replace the security with a lower yielding security, resulting in
a decreased return for investors. Conversely, a high yield bond's value will
decrease in a rising interest rate market, as will the value of a Fund's assets.
If a Fund experiences unexpected net redemptions, this may force it to sell its
high yield bonds, without regard to their investment merits, thereby decreasing
the asset base upon which the Fund's expenses can be spread and possibly
reducing the Fund's rate of return.

         Since the risk of default is higher for lower quality securities and
sometimes increases with the age of these securities, the Advisor's research and
credit analysis are an integral part of managing any securities of this type
held by a Fund. In considering investments for a Fund, the Advisor attempts to
identify those issuers of high-yielding securities whose financial condition is
adequate to meet future obligations, has improved or is expected to improve in
the future. The Advisor's analysis focuses on relative values based on such
factors as interest or dividend coverage, asset coverage, earning prospects, and
the experience and managerial strength of the issuer.

     H. BRADY BONDS. The Bond Fund may invest in "Brady bonds," which have been
issued by the governments of Argentina, Brazil, Costa Rica, Mexico, Nigeria,
Philippines, Uruguay and Venezuela. Most Brady bonds are currently rated below
BBB by S&P or Baa by Moody's.

         The Brady Plan was conceived by the U.S. Treasury in the 1980's in an
attempt to produce a debt restructuring program which would enable a debt
country to (i) reduce the absolute level of debt of its creditor banks, and (ii)
reschedule its external debt repayments, based upon its ability to service such
debts by persuading its creditor banks to accept a debt write-off by offering
them a selection of options, each of which represented an attractive substitute
for the nonperforming debt. Although it was envisaged that each debtor country
would agree to a unique package of options with its creditor banks, the plan was
that these options would be based upon the following:(i) a discount bond
carrying a market rate of interest (whether fixed or floating), with principal
collateralized by the debtor country with cash or securities in an amount equal
to at least one year of rolling interest; (ii) a par bond carrying a low rate of
interest (whether fixed or floating), collateralized in the same way as in (i)
above; and (iii) retention of existing debt (thereby avoiding a debt write-off)
coupled with an advance of new money or subscription of new bonds.

         Each Fund may invest in either collateralized or uncollateralized Brady
bonds. U.S. dollar-denominated, collateralized Brady bonds, which may be fixed
rate par bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time and is adjusted at regular intervals
thereafter.

     I. MUNICIPAL BONDS. Municipal bonds generally fund longer-term capital
needs than municipal notes and have maturities exceeding one year when issued.
Municipal bonds include:

         GENERAL OBLIGATION BONDS. Issuers of general obligation bonds include
states, counties, cities, towns and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects, including
construction or improvement of schools, highways and roads, and water and sewer
systems. The basic security behind general obligation bonds is the issuer's
pledge of its full faith and credit and taxing power for the payment of
principal and interest. The taxes that can be levied for the payment of debt
service may be limited or unlimited as to the rate or amount of special
assessments.

         REVENUE BONDS. The principal security for a revenue bond is generally
the net revenues derived from a particular facility, group of facilities or, in
some cases, the proceeds of a special excise tax or other specific revenue
source. Revenue bonds are issued to finance a wide variety of capital projects,
including electric, gas, water and sewer systems; highways, bridges, and
tunnels; port and airport facilities; colleges and universities; and hospitals.
Although the principal security behind these bonds may vary, many provide
additional security in the form of a debt service reserve fund that may be used
to make principal and interest payments on the issuer's obligations. Housing
finance authorities have a wide range of security, including partially or fully
insured mortgages, rent subsidized and/or collateralized mortgages, certificates
of deposit and/or the net revenues from housing or other public projects. Some
authorities provide further security in the form of a state's ability (without
obligation) to make up deficiencies in the debt service reserve fund.

         PRIVATE ACTIVITY BONDS. Private activity bonds, which are considered
municipal obligations if the interest paid thereon is excluded from gross income
for Federal income tax purposes but is a specific tax preference item for
Federal individual and corporate alternative minimum tax purposes, are issued by
or on behalf of public authorities to raise money to finance various
privately-operated facilities such as manufacturing facilities, certain hospital
and university facilities and housing projects. These bonds are also used to
finance public facilities such as airports, mass transit systems and ports. The
payment of the principal and interest on these bonds is dependent solely on the
ability of the facility's user to meet its financial obligations and generally
the pledge, if any, of real and personal property so financed as security for
payment.

     MUNICIPAL NOTES. Municipal notes generally fund short-term capital needs.
Each Fund may invest in municipal notes, which include:

         TAX ANTICIPATION NOTES. Tax anticipation notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of various seasonal tax revenue, such as income, sales, use and
business taxes, and are payable from these specific future taxes.

         REVENUE ANTICIPATION NOTES. Revenue anticipation notes are issued in
expectation of receipt of other types of revenue, such as Federal revenues
available under Federal revenue sharing programs.

         BOND ANTICIPATION NOTES. Bond anticipation notes are issued to provide
interim financing until long-term financing can be arranged. In most cases, the
long-term bonds provide funds for the repayment of these notes.

         MISCELLANEOUS, TEMPORARY AND ANTICIPATORY INSTRUMENTS. These
instruments may include notes issued to obtain interim financing pending
entering into alternate financial arrangements, such as receipt of anticipated
Federal, state or other grants or aid, passage of increased legislative
authority to issue longer-term instruments or obtaining other refinancing.

         CONSTRUCTION LOAN NOTES. Construction loan notes are sold to provide
construction financing. Permanent financing, the proceeds of which are applied
to the payment of construction loan notes, is sometimes provided by a commitment
of the Government National Mortgage Association (`GNMA") to purchase the loan,
accompanied by a commitment by the Federal Housing Administration to insure
mortgage advances thereunder. In other instances, permanent financing is
provided by commitments of banks to purchase the loan. Each Fund will only
purchase construction loan notes that are subject to permanent GNMA or bank
purchase commitments.

         TAX EXEMPT COMMERCIAL PAPER. Each Fund may invest in tax-exempt
commercial paper. Tax-exempt commercial paper is a short-term obligation with a
stated maturity of 365 days or less. It is issued by agencies of state and local
governments to finance seasonal working capital needs or as short-term financing
in anticipation of longer-term financing.

         STANDBY COMMITMENTS. Each Fund may acquire standby commitments or
"puts" solely to facilitate Fund liquidity; the Fund intends to exercise its
rights thereunder for trading purposes. The maturity of a municipal obligation
is not to be considered shortened by any standby commitment to which the
obligation is subject. Thus, standby commitments do not affect the
dollar-weighted average maturity of the Fund.

         When municipal obligations are subject to puts separate from the
underlying securities, no value is assigned to the put. Because of the
difficulty of evaluating the likelihood of exercise or the potential benefit of
a put, the Board of Trustees has determined that puts shall have a fair market
value of zero, regardless of whether any direct or indirect consideration was
paid.

         Since the value of the put is partly dependent on the ability of the
put writer to meet its obligation to repurchase, the Fund's policy is to enter
into put transactions only with put writers who are approved by Advisor. It is
the Fund's general policy to enter into put transactions only with those put
writers which are determined to present minimal credit risks. In connection with
this determination, the Board of Trustees will review regularly Advisor's list
of approved put writers, taking into consideration, among other things, the
ratings, if available, of their equity and debt securities, their reputation in
the municipal securities markets, their net worth, their efficiency in
consummating transactions and any collateral arrangements, such as letters of
credit securing the puts written by them. Commercial banks normally will be
members of the Federal Reserve System, and other dealers will be members of the
National Association of Securities Dealers, Inc. or members of a national
securities exchange. Other put writers will have outstanding debt rated Aa or
better by Moody's Investors Services, Inc. (`Moody's") or AA or better by
Standard & Poor's Ratings Group (`S&P"), or will be of comparable quality in
Advisor's opinion, or such put writers' obligations will be collateralized and
of comparable quality in Advisor's opinion. The Board of Trustees has directed
Advisor not to enter into put transactions with any put writer that, in the
judgment of Advisor using the above-described criteria, is or becomes a
recognizable credit risk. The Trust is unable to predict whether all or any
portion of any loss sustained could subsequently be recovered from a put writer
in the event that a put writer should default on its obligation to repurchase an
underlying security.

         J. STRIPS. The Federal Reserve creates STRIPS (Separate Trading of
Registered Interest and Principal of Securities) by separating the coupon
payments and the principal payment from an outstanding Treasury security and
selling them as individual securities. To the extent a Fund purchases the
principal portion of the STRIP, the Fund will not receive regular interest
payments. Instead they are sold at a deep discount from their face value. A Fund
will accrue income on such STRIPS for tax and accounting purposes, in accordance
with applicable law, which income is distributable to shareholders. Because no
cash is received at the time such income is accrued, a Fund may be required to
liquidate other Fund securities to satisfy its distribution obligations. Because
the principal portion of the STRIP does not pay current income, its price can be
very volatile when interest rates change. In calculating its dividend, a Fund
takes into account as income a portion of the difference between the principal
portion of the STRIP's purchase price and its face value.

         K. ZERO COUPON BONDS. Zero coupon bonds do not make regular interest
payments. Instead they are sold at a deep discount from their face value. Each
Fund will accrue income on such bonds for tax and accounting purposes, in
accordance with applicable law. This income will be distributed to shareholders.
Because no cash is received at the time such income is accrued, the Fund may be
required to liquidate other portfolio securities to satisfy its distribution
obligations. Because a zero coupon bond does not pay current income, its price
can be very volatile when interest rates change. In calculating its dividend,
the Funds take into account as income a portion of the difference between a zero
coupon bond's purchase price and its face value. Certain types of CMOs pay no
interest for a period of time and therefore present risks similar to zero coupon
bonds.

     L. FINANCIAL SERVICES INDUSTRY OBLIGATIONS. Each Fund may invest up to 5%
of its net assets in each of the following obligations of the financial services
industry:

                  (1) CERTIFICATE OF DEPOSIT. Certificates of deposit are
         negotiable certificates evidencing the indebtedness of a commercial
         bank or a savings and loan association to repay funds deposited with it
         for a definite period of time (usually from fourteen days to one year)
         at a stated or variable interest rate.

               (2) TIME DEPOSITS. Time deposits are non-negotiable deposits
          maintained in a banking institution or a savings and loan association
          for a specified period of time at a stated interest rate.

                  (3) BANKERS' ACCEPTANCES. Bankers' acceptances are credit
         instruments evidencing the obligation of a bank to pay a draft which
         has been drawn on it by a customer, which instruments reflect the
         obligation both of the bank and of the drawer to pay the face amount of
         the instrument upon maturity.

         M. REPURCHASE AGREEMENTS. A repurchase agreement is a short-term
investment in which the purchaser (i.e., a Fund) acquires ownership of a U.S.
Government obligation (which may be of any maturity) and the seller agrees to
repurchase the obligation at a future time at a set price, thereby determining
the yield during the purchaser's holding period (usually not more than seven
days from the date of purchase). Any repurchase transaction in which a Fund
engages will require full collateralization of the seller's obligation during
the entire term of the repurchase agreement. In the event of a bankruptcy or
other default of the seller, a Fund could experience both delays in liquidating
the underlying security and losses in value. However, each Fund intends to enter
into repurchase agreements only with the Custodian, other banks with assets of
$1 billion or more and registered securities dealers determined by the Advisor
(subject to review by the Board of Trustees) to be creditworthy. The Advisor
monitors the creditworthiness of the banks and securities dealers with which a
Fund engages in repurchase transactions.

         N. MORTGAGE-BACKED SECURITIES. The Bond Fund may invest in
mortgage-backed securities. These securities represent participation interests
in pools of one-to-four family residential mortgage loans originated by private
mortgage originators. Traditionally, residential mortgage-backed securities have
been issued by governmental agencies such as Fannie Mae, Freddie Mac and Ginnie
Mae. Non-governmental entities that have issued or sponsored residential
mortgage-backed securities offerings include savings and loan associations,
mortgage banks, insurance companies, investment banks and special purpose
subsidiaries of the foregoing.

         While residential loans do not typically have prepayment penalties or
restrictions, they are often structured so that subordinated classes may be
locked out of prepayments for a period of time. However, in a period of
extremely rapid prepayments, during which senior classes may be retired faster
than expected, the subordinated classes may receive unscheduled payments of
principal and would have average lives that, while longer than the average lives
of the senior classes, would be shorter than originally expected. The types of
residential mortgage-backed securities which the Fund may invest in may include
the following:

         GUARANTEED MORTGAGE PASS-THROUGH SECURITIES. Each Fund may invest in
mortgage pass-through securities representing participation interests in pools
of residential mortgage loans originated by the U.S. government and guaranteed,
to the extent provided in such securities, by the U.S. government or one of its
agencies or instrumentalities. Such securities, which are ownership interests in
the underlying mortgage loans, differ from conventional debt securities, which
provide for periodic payment of interest in fixed amounts (usually
semi-annually) and principal payments at maturity or on specified call dates.
Mortgage pass-through securities provide for monthly payments that are a
"pass-through" of the monthly interest and principal payments (including any
prepayments) made by the individual borrowers on the pooled mortgage loans, net
of any fees paid to the guarantor of such securities and the servicer of the
underlying mortgage loans. The guaranteed mortgage pass-through securities in
which the Fund will invest are those issued or guaranteed by Ginnie Mae, Fannie
Mae and Freddie Mac.

         GINNIE MAE CERTIFICATES. Ginnie Mae is a wholly-owned corporate
instrumentality of the United States Government within the Department of Housing
and Urban Development. The National Housing Act of 1934, as amended (the
"Housing Act"), authorizes Ginnie Mae to guarantee the timely payment of the
principal of and interest on certificates that are based on and backed by a pool
of mortgage loans insured by the Federal Housing Administration under the
Housing Act, or Title V of the Housing Act of 1949 ("FHA Loans"), or guaranteed
by the Veterans' Administration under the Servicemen's Readjustment Act of 1944,
as amended ("VA Loans"), or by pools of other eligible mortgage loans. The
Housing Act provides that the full faith and credit of the U.S. government is
pledged to the payment of all amounts that may be required to be paid under any
guarantee. In order to meet its obligations under such guarantee, Ginnie Mae is
authorized to borrow from the U.S. Treasury with no limitations as to amount.

         The Ginnie Mae Certificates will represent a pro rata interest in one
or more pools of the following types of mortgage loans: (i) fixed rate level
payment mortgage loans; (ii) fixed rate graduated payment mortgage loans; (iii)
fixed rate growing equity mortgage loans; (iv) fixed rate mortgage loans secured
by manufactured (mobile) homes; (v) mortgage loans on multifamily residential
properties under construction; (vi) mortgage loans on completed multifamily
projects; (vii) fixed rate mortgage loans as to which escrowed funds are used to
reduce the borrower's monthly payments during the early years of the mortgage
loans ("buydown" mortgage loans); (viii) mortgage loans that provide for
adjustments in payments based on periodic changes in interest rates or in other
payment terms of the mortgage loans; and (ix) mortgage-backed serial notes. All
of these mortgage loans will be FHA Loans or VA Loans and, except as otherwise
specified above, will be fully-amortizing loans secured by first liens on
one-to-four family housing units.

         FANNIE MAE CERTIFICATES. Fannie Mae is a federally chartered and
privately owned corporation organized and existing under the Federal National
Mortgage Association Charter Act. Fannie Mae was originally established in 1938
as a U.S. government agency to provide supplemental liquidity to the mortgage
market and was transformed into a stockholder owned and privately managed
corporation by legislation enacted in 1968. Fannie Mae provides funds to the
mortgage market primarily by purchasing home mortgage loans from local lenders,
thereby replenishing their funds for additional lending. Fannie Mae acquires
funds to purchase home mortgage loans from many capital market investors that
may not ordinarily invest in mortgage loans directly, thereby expanding the
total amount of funds available for housing.

         Each Fannie Mae Certificate entitles the registered holder thereof to
receive amounts representing such holder's pro rata interest in scheduled
principal payments and interest payments (at such Fannie Mae Certificate's
pass-through rate, which is net of any servicing and guarantee fees on the
underlying mortgage loans), and any principal prepayments on the mortgage loans
in the pool represented by such Fannie Mae Certificate and such holder's
proportionate interest in the full principal amount of any foreclosed or
otherwise finally liquidated mortgage loan. The full and timely payment of
principal of and interest on each Fannie Mae Certificate will be guaranteed by
Fannie Mae, which guarantee is not backed by the full faith and credit of the
U.S. government.

         Each Fannie Mae Certificate will represent a pro rata interest in one
or more pools of FHA Loans, VA Loans or conventional mortgage loans (i.e.,
Mortgage Loans that are not insured or guaranteed by any governmental agency) of
the following types; (i) fixed rate level payment mortgage loans; (ii) fixed
rate growing equity mortgage loans; (iii) fixed rate graduated payment mortgage
loans; (iv) variable rate California mortgage loans; (v) other adjustable rate
mortgage loans; and (vi) fixed rate mortgage loans secured by multifamily
projects.


<PAGE>


         FREDDIE MAC CERTIFICATES. Freddie Mac is a corporate instrumentality of
the United States Government created pursuant to the Emergency Home Finance Act
of 1970, as amended (the "FHLMC Act"). Freddie Mac was established primarily for
the purpose of increasing the availability of mortgage credit for the financing
of needed housing. The principal activity of Freddie Mac currently consists of
the purchase of first lien, conventional, residential mortgage loans and
participation interests in such mortgage loans and the resale of the mortgage
loans so purchased in the form of mortgage securities, primarily Freddie Mac
Certificates.

         Freddie Mac guarantees to each registered holder of a Freddie Mac
Certificate the timely payment of interest at the rate provided for by such
Freddie Mac Certificate, whether or not received. Freddie Mac also guarantees to
each registered holder of a Freddie Mac Certificate ultimate collection of all
principal of the related mortgage loans, without any offset or deduction, but
does not generally guarantee the timely payment of scheduled principal. Freddie
Mac may remit the amount due on account of its guarantee of collection of
principal at any time after default on an underlying mortgage loan, but not
later than 30 days following (i) foreclosure sale, (ii) payment of a claim by
any mortgage insurer, or (iii) the expiration of any right of redemption,
whichever occurs later, but in any event no later than one year after demand has
been made upon the mortgagor for acceleration of payment of principal. The
obligations of Freddie Mac under its guarantee are obligations solely of Freddie
Mac and are not backed by the full faith and credit of the U.S. government.

         Freddie Mac Certificates represent a pro rata interest in a group of
mortgage loans (a "Freddie Mac Certificate group") purchased by Freddie Mac. The
mortgage loans underlying the Freddie Mac Certificates will consist of fixed
rate or adjustable rate mortgage loans with original terms to maturity of
between ten and thirty years, substantially all of which are secured by first
liens on one-to-four family residential properties or multifamily projects. Each
mortgage loan must meet the applicable standards set forth in the FHLMC Act. A
Freddie Mac Certificate group may include whole loans, participation interests
in whole loans and undivided interests in whole loans and participations
comprising another Freddie Mac Certificate group.

         PRIVATE MORTGAGE PASS-THROUGH SECURITIES. Private mortgage pass-through
securities ("Private Pass-Throughs") are structured similarly to the Ginnie Mae,
Fannie Mae and Freddie Mac mortgage pass-through securities described above and
are issued by originators of and investors in mortgage loans, including savings
and loan associations, mortgage banks, commercial banks, investment banks and
special purpose subsidiaries of the foregoing. Private Pass-Throughs are usually
backed by a pool of conventional fixed rate or adjustable rate mortgage loans.

         Since Private Pass-Throughs typically are not guaranteed by an entity
having the credit status of Ginnie Mae, Fannie Mae or Freddie Mac, such
securities generally are structured with one or more types of credit
enhancement.

         COLLATERALIZED MORTGAGE OBLIGATIONS. Collateralized mortgage
obligations or "CMOs" are debt obligations collateralized by mortgage loans or
mortgage pass-through securities. Typically, CMOs are collateralized by Ginnie
Mae, Fannie Mae or Freddie Mac Certificates, but also may be collateralized by
whole loans or Private Pass-Throughs (such collateral collectively hereinafter
referred to as "Mortgage Assets").

         STRIPPED MORTGAGE-BACKED SECURITIES. Multi-class pass-through
securities are equity interests in a fund composed of Mortgage Assets. Unless
the context indicates otherwise, all references herein to CMOs include
multi-class pass-through securities. Payments of principal of and interest on
the Mortgage Assets, and any reinvestment income thereon, provide the funds to
pay debt service on the CMOs or make scheduled distributions on the multi-class
pass-through securities. CMOs may be sponsored by agencies or instrumentalities
of the U.S. Government, or by private originators of, or investors in, mortgage
loans, including savings and loan associations, mortgage banks, commercial
banks, investment banks and special purpose subsidiaries of the foregoing. Under
current law, every newly created CMO issuer must elect to be treated for federal
income tax purposes as a Real Estate Mortgage Investment Conduit (a "REMIC").

         In a CMO, a series of bonds or certificates is issued in multiple
classes. Each class of CMOs, often referred to as a "tranche", is issued at a
specific fixed or floating coupon rate and has a stated maturity or final
distribution date. Principal prepayments on the Mortgage Assets may cause the
CMOs to be retired substantially earlier than their stated maturities or final
distribution dates. Interest is paid or accrues on all classes of the CMOs on a
monthly, quarterly or semi-annual basis. The principal of and interest on the
Mortgage Assets may be allocated among the several classes of a series of a CMO
in innumerable ways. In one structure, payments of principal, including any
principal prepayments, on the Mortgage Assets are applied to the classes of a
CMO in the order of their respective stated maturities or final distribution
dates, so that no payment of principal will be made on any class of CMOs until
all other classes having an earlier stated maturity or final distribution date
have been paid in full.

         The Fund may also invest in, among others, parallel pay CMOs and
Planned Amortization Class CMOs ("PAC Bonds"). Parallel pay CMOs are structured
to provide payments of principal on each payment date to more than one class.
These simultaneous payments are taken into account in calculating the stated
maturity date or final distribution date of each class, which, as with other CMO
structures, must be retired by its payments of a specified amount of principal
on each payment date.

         O. ASSET-BACKED SECURITIES. The Bond Fund may invest in asset-backed
securities. These securities are undivided fractional interests in pools of
consumer loans (unrelated to mortgage loans) held in a trust. Payments of
principal and interest are passed through to certificate holders and are
typically supported by some form of credit enhancement, such as a letter of
credit, surety bond, limited guaranty or senior/subordination. The degree of
credit enhancement varies, but generally amounts to only a fraction of the
asset-backed security's par value until exhausted. If the credit enhancement is
exhausted, certificateholders may experience losses or delays in payment if the
required payments of principal and interest are not made to the trust with
respect to the underlying loans. The value of these securities also may change
because of changes in the market's perception of the creditworthiness of the
servicing agent for the loan pool, the originator of the loans or the financial
institution providing the credit enhancement. Assest-backed securities are
ultimately dependent upon payment of consumer loans by individuals, and the
certificateholder generally has no recourse against the entity that originated
the loans. The underlying loans are subject to prepayments which shorten the
securities' weighted average life and may lower their return. As prepayments
flow through at par, total returns would be affected by the prepayments: if a
security were trading at a premium, its total return would be lowered by
prepayments, and if a security were trading a discount, its total return would
be increased by prepayments.

         P. MULTI-CLASS PASS-THROUGH SECURITIES. The Bond Fund may invest in
stripped mortgage-backed securities ("SMBS"). SMBS may be issued by agencies or
instrumentalities of the U.S. Government, or by private originators of, or
investors in, mortgage loans, including savings and loan associations, mortgage
banks, commercial banks, investment banks and special purpose subsidiaries of
the foregoing. SMBS issued by parties other than agencies or instrumentalities
of the U.S. Government are considered, under current guidelines of the staff of
the Securities and Exchange Commission, to be illiquid securities. The Fund will
only invest in stripped mortgage-backed securities of the U.S. Government and
certain of its agencies and instrumentalities.

         SMBS are structured with two or more classes of securities that receive
different proportions of the interest and principal distributions on a pool of
Mortgage Assets. A common type of SMBS will have at least one class receiving
none or only a small portion of the interest and all or a larger portion of the
principal from the Mortgage Assets, while the other classes will receive
primarily or entirely interest and only a small portion of the principal.

         Q. RTC SECURITIES. The Bond Fund may invest in RTC securities. The
Resolution Trust Corporation ("RTC") was organized by the U.S. Government in
connection with the savings and loan crisis. RTC holds assets of failed savings
and loans either as conservator or receiver for such institutions or acquires
such assets in its corporate capacity. These assets include, among other things,
single family and multifamily mortgage loans as well as commercial mortgage
loans. In order to dispose of such assets in an orderly manner, RTC has
established a vehicle registered with the Securities and Exchange Commission
("SEC") through which it sells credit-enhanced Mortgage-Backed Securities ("RTC
Securities"). These securities represent pro rata interests in pools of single
family and multifamily mortgage loans which RTC holds or has acquired as
described above. It is expected that commercial mortgage loans may also be
included in discrete pools in the near future. Credit enhancement of RTC
Securities is obtained from external sources (including pool insurance policies,
letters of credit and surety guarantees), internal sources (including
subordination and spread accounts) and independent sources (including reserve
funds and cash collateral accounts).

         R. FLOATING RATE, INVERSE FLOATING RATE AND INDEX OBLIGATIONS. The Bond
Fund may invest without limitation in debt securities with interest payments or
maturity values that are not fixed, but float in conjunction with (or inversely
to) an underlying index or price. These floating rate, inverse floating rate and
index obligations are considered to be instruments which are commonly known as
derivatives. They may be backed by U.S. Government or corporate issuers, or by
collateral such as mortgages. In certain cases, a change in the underlying index
or price may have a leveraging effect on the periodic coupon payments, creating
larger possible swings in the prices of such securities than would be expected
when taking into account their maturities alone. The indices and prices upon
which such securities can be based include interest rates, currency rates and
commodities prices. The Fund may invest in instruments whose value is computed
based on a multiple of the change in price or value of an asset (or of an index
of or relating to assets), provided the relevant asset or assets are eligible
for investment by the Fund. To the extent a Fund invests in instruments whose
value is computed based on such a multiple, a leverage factor is involved, which
can result in high volatility and significant losses. See "Derivatives."

         Floating rate securities pay interest according to a coupon which is
reset periodically. The reset mechanism may be formula based, or reflect the
passing through of floating interest payments on an underlying collateral pool.
The coupon is usually reset daily, weekly, monthly, quarterly or semi-annually,
but other schedules are possible. Floating rate obligations generally exhibit a
low price volatility for a given stated maturity or average life because their
coupons adjust with changes in interest rates. If their underlying index is not
an interest rate, or the reset mechanism lags the movement of rates in the
current market, greater price volatility may be experienced.

         Inverse floating rate securities are similar to floating rate
securities except that their coupon payments vary inversely with an underlying
index by use of a formula. Inverse floating rate securities tend to exhibit
greater price volatility than other floating rate securities. Because the
changes in the coupon are usually negatively correlated with changes in overall
interest rates, interest rate risk and price volatility on inverse floating rate
obligations can be high, especially if leverage is used in the formula. Index
securities pay a fixed rate of interest, but have a maturity value that varies
by formula, so that when the obligation matures, a gain or loss is realized. The
risk of index obligations depends on the volatility of the underlying index, the
coupon payment and the maturity of the obligation.

         S. LOAN PARTICIPATIONS AND ASSIGNMENTS. The Bond Fund may invest in
fixed and floating rate loans arranged through private negotiations between a
borrower and one or more lending institutions. The majority of the Funds'
investments in loans in emerging markets is expected to be in the form of
participations in loans ("Participations") and assignments of portions of loans
from third parties ("Assignments"). The Funds may also invest in loans,
Participations or Assignments of loans to borrowers located in the
industrialized world. Participations typically will result in a Fund having a
contractual relationship only with the lender, not the borrower. The Fund will
have the right to receive payments of principal, interest and any fees to which
it is entitled only from the lender selling the Participation and only upon
receipt by the lender of the payments from the borrower. In connection with
purchasing Participations, the Fund generally will have no right to enforce
compliance by the borrower with the terms of the loan agreement relating to the
loan, nor any rights of set-off against the borrower, and the Fund may not
directly benefit from any collateral supporting the loan in which it has
purchased the Participation. As a result, the Fund will assume the credit risk
of both the borrower and the lender that is selling the Participation. In the
event of the insolvency of the lender selling the Participation, the Fund may be
treated as a general creditor of the lender and may not benefit from any set-off
between the lender and the borrower. The Funds will acquire Participations only
if the lender interpositioned between the Fund and the borrower is determined by
the Advisor to be creditworthy. When a Fund purchases Assignments from lenders,
the Fund will acquire direct rights against the borrower on the loan; however,
since Assignments are arranged through private negotiations between the
potential assignees and assignors, the rights and obligations acquired by the
Fund as the purchaser of an Assignment may differ from, and be more limited
than, those held by the assigning lender.

         A Fund may have difficulty disposing of Assignments and Participations.
The liquidity of such securities is limited and the Funds anticipate that such
securities could only be sold to a limited number of institutional investors.
The lack of a liquid secondary market could have an adverse impact on the value
of such securities and on the Funds' ability to dispose of particular
Assignments or Participations when necessary to meet liquidity needs or in
response to a specific economic event, such as a deterioration in the
creditworthiness of the borrower. The lack of a liquid secondary market for
Assignments and Participations also may make it more difficult in valuing the
Funds and, therefore, calculating the net asset value per share of the Funds.
All Assignments and Participations shall be considered to be illiquid securities
by the Funds. The investment by a Fund in illiquid securities, including
Assignments and Participations, is limited to a total of 15% of its net assets.

     T. FOREIGN SECURITIES. The Bond Fund may invest in foreign fixed income
securities. Foreign fixed income securities include corporate debt obligations
issued by foreign companies and debt obligations of foreign governments or
international organizations. This category may include floating rate
obligations, variable rate obligations, Yankee dollar obligations (U.S. dollar
denominated obligations issued by foreign companies and traded on U.S. markets)
and Eurodollar obligations (U.S. dollar denominated obligations issued by
foreign companies and traded on foreign markets).

         Foreign government obligations generally consist of debt securities
supported by national, state or provincial governments or similar political
units or governmental agencies. Such obligations may or may not be backed by the
national government's full faith and credit and general taxing powers.
Investments in foreign securities also include obligations issued by
international organizations. International organizations include entities
designated or supported by governmental entities to promote economic
reconstruction or development as well as international banking institutions and
related government agencies. Examples are the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the InterAmerican Development Bank. In
addition, investments in foreign securities may include debt securities
denominated in multinational currency units of an issuer (including
international issuers). An example of a multinational currency unit is the
European Currency Unit. A European Currency Unit represents specified amounts of
the currencies of certain member states of the European Economic Community, more
commonly known as the Common Market.

         Purchases of foreign securities are usually made in foreign currencies
and, as a result, a Fund may incur currency conversion costs and may be affected
favorably or unfavorably by changes in the value of foreign currencies against
the U.S. dollar. In addition, there may be less information publicly available
about a foreign company then about a U.S. company, and foreign companies are not
generally subject to accounting, auditing and financial reporting standards and
practices comparable to those in the U.S. Other risks associated with
investments in foreign securities include changes in restrictions on foreign
currency transactions and rates of exchanges, changes in the administrations or
economic and monetary policies of foreign governments, the imposition of
exchange control regulations, the possibility of expropriation decrees and other
adverse foreign governmental action, the imposition of foreign taxes, less
liquid markets, less government supervision of exchanges, brokers and issuers,
difficulty in enforcing contractual obligations, delays in settlement of
securities transactions and greater price volatility. In addition, investing in
foreign securities will generally result in higher commissions than investing in
similar domestic securities.

         The world's industrialized markets generally include but are not
limited to the following: Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Hong Kong, Ireland, Italy, Japan, Luxembourg, the Netherlands,
New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, the United Kingdom,
and the United States. The world's emerging markets generally include but are
not limited to the following: Argentina, Bolivia, Brazil, Bulgaria, Chile,
China, Colombia, Costa Rica, the Czech Republic, Ecuador, Egypt, Greece,
Hungary, India, Indonesia, Israel, the Ivory Coast, Jordan, Malaysia, Mexico,
Morocco, Nicaragua, Nigeria, Pakistan, Peru, the Philippines, Poland, Portugal,
Romania, Russia, Slovakia, Slovenia, South Africa, South Korea, Sri Lanka,
Taiwan, Thailand, Turkey, Uruguay, Venezuela, Vietnam and Zimbabwe.

         Investment in securities of issuers based in underdeveloped emerging
markets entails all of the risks of investing in securities of foreign issuers
outlined in this section to a heightened degree. These heightened risks include:
(i) greater risks of expropriation, confiscatory taxation, nationalization, and
less social, political and economic stability; (ii) the smaller size of the
market for such securities and a low or nonexistent volume of trading, resulting
in lack of liquidity and in price volatility; (iii) certain national policies
which may restrict a Fund's investment opportunities including restrictions on
investing in issuers or industries deemed sensitive to relevant national
interests; and (iv) in the case of Eastern Europe and in China and other Asian
countries, the absence of developed capital markets and legal structures
governing private or foreign investment and private property and the possibility
that recent favorable economic and political developments could be slowed or
reversed by unanticipated events. So long as the Communist Party continues to
exercise a significant or, in some countries, dominant role in Eastern European
countries or in China and other Asian countries, investments in such countries
will involve risks of nationalization, expropriation and confiscatory taxation.
The Communist governments of a number of Eastern European countries expropriated
large amounts of private property in the past, in many cases without adequate
compensation. There may be no assurance that such expropriation will not occur
in the future in either the Eastern European countries or other countries. In
the event of such expropriation, a Fund could lose a substantial portion of any
investments it has made in the affected countries. Further, no accounting
standards exist in Eastern European countries. Finally, even though certain
Eastern European currencies may be convertible into U.S. dollars, the conversion
rates may be artificial to the actual market values and may be adverse to Fund
shareholders.

         In addition to brokerage commissions, custodial services and other
costs relating to investment in emerging markets are generally more expensive
than in the United States. Such markets have been unable to keep pace with the
volume of securities transactions, making it difficult to conduct such
transactions. The inability of a Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of a security due to settlement problems
could result either in losses to the Fund due to subsequent declines in the
value of the security or, if the Fund has entered into a contract to sell the
security, could result in possible liability to the purchaser.]

         FOREIGN CURRENCY EXCHANGE TRANSACTIONS. The Bond Fund may enter into
foreign currency exchange transactions to convert to and from different foreign
currencies and to convert foreign currencies to and from the U.S. dollar. A Fund
either enters into these transactions on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market or uses forward
contracts to purchase or sell foreign currencies. A forward foreign currency
exchange contract is an obligation by a Fund to purchase or to sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract. Forward foreign currency exchange contracts establish an
exchange rate at a future date. These contracts are transferable in the
interbank market conducted directly between currency traders (usually large
commercial banks) and their customers. A forward foreign currency exchange
contract generally has no deposit requirement and is traded at a net price
without commission. Neither spot transactions nor forward foreign currency
exchange contracts eliminate fluctuations in the prices of a Fund's securities
or in foreign exchange rates, or prevent loss if the prices of these securities
should decline.

         A Fund may enter into foreign currency hedging transactions in an
attempt to protect against changes in foreign currency exchange rates between
the trade and settlement dates of specific securities transactions or changes in
foreign currency exchange rates that would adversely affect a Fund position or
an anticipated investment position. Although these transactions tend to minimize
the risk of loss due to a decline in the value of the hedged currency, at the
same time they tend to limit any potential gain that might be realized should
the value of the hedged currency increase. The precise matching of the forward
contract amounts and the value of the securities involved will not generally be
possible because the future value of such securities in foreign currencies will
change as a consequence of market movements in the value of such securities
between the date the forward contract is entered into and the date it matures.
The projection of currency market movements is extremely difficult, and the
successful execution of a hedging strategy is highly uncertain.

         OPTIONS ON FOREIGN CURRENCIES. The Bond Fund may write covered put and
call options and purchase put and call options on foreign currencies for the
purpose of protecting against declines in the U.S. dollar value of Fund
securities and against increases in the U.S. dollar cost of securities to be
acquired. A Fund may use options on foreign currency to cross-hedge, which
involves writing or purchasing options on one currency to hedge against changes
in exchange rates for a different, but related currency. As with other types of
options, however, the writing of an option on a foreign currency will constitute
only a partial hedge up to the amount of the premium received, and a Fund could
be required to purchase or sell a foreign currency at disadvantageous exchange
rates, thereby incurring losses. The purchase of an option on foreign currency
may be used to hedge against fluctuations in exchange rates although, in the
event of exchange rate movements adverse to a Fund's position, it may forfeit
the entire amount of the premium plus related transaction costs. In addition, a
Fund may purchase call options on a foreign currency when the investment Advisor
anticipates that the currency will appreciate in value.

         There is no assurance that a liquid secondary market will exist for any
particular option, or at any particular time. If a Fund is unable to effect a
closing purchase transaction with respect to covered options it has written, the
Fund will not be able to sell the underlying currency or dispose of assets held
in a segregated account until it closes out the options or the options expire or
are exercised. Similarly, if the Fund is unable to close out options it has
purchased, it would have to exercise the options in order to realize any profit
and will incur transaction costs. The Funds pay brokerage commissions or spreads
in connection with options transactions.

         As in the case of forward contracts, certain options on foreign
currencies are traded over-the-counter and involve liquidity and credit risks
which may not be present in the case of exchange-traded currency options. The
Funds' ability to terminate over-the-counter options ("OTC Options") will be
more limited than with exchange-traded options. It is also possible that
broker-dealers participating in OTC Options transactions will not fulfill their
obligations. Until such time as the staff of the SEC changes its position, the
Funds will treat purchased OTC Options and assets used to cover written OTC
Options as illiquid securities. With respect to options written with primary
dealers in U.S. government securities pursuant to an agreement requiring a
closing purchase transaction at a formula price, the amount of illiquid
securities may be calculated with reference to the repurchase formula.

     V. OPTIONS ON SECURITIES. Each Fund may write (sell) call and put options
to a limited extent on its Fund securities in an attempt to increase income.
However, the Fund may forgo the benefits of appreciation on securities sold or
may pay more than the market price on securities acquired pursuant to call and
put options written by the Fund.

         When a Fund writes a call option, it gives the purchaser of the option
the right to buy the underlying security at the price specified in the option
(the "exercise price") by exercising the option at any time during the option
period. If the option expires unexercised, the Fund will realize income in an
amount equal to the premium received for writing the option. If the option is
exercised, a decision over which the Fund has no control, the Fund must sell the
underlying security to the option holder at the exercise price. By writing a
call option, the Fund forgoes, in exchange for the premium less the commission
("net premium"), the opportunity to profit during the option period from an
increase in the market value of the underlying security above the exercise
price.

         When a Fund writes a put option, it gives the purchaser of the option
the right to sell the underlying security to the Fund at the specified exercise
price at any time during the option period. If the option expires unexercised,
the Fund will realize income in the amount of the premium received for writing
the option. If the put option is exercised, a decision over which the Fund has
no control, the Fund must purchase the underlying security from the option
holder at the exercise price. By writing a put option, the Fund, in exchange for
the net premium received, accepts the risk of a decline in the market value of
the underlying security below the exercise price.

         A Fund may terminate its obligation as the writer of a call or put
option by purchasing an option with the same exercise price and expiration date
as the option previously written. This transaction is called a "closing purchase
transaction." The Fund will realize a profit or loss for a closing purchase
transaction if the amount paid to purchase an option is less or more, as the
case may be, than the amount received from the sale thereof. To close out a
position as a purchaser of an option, the Fund, may make a `closing sale
transaction" which involves liquidating the Fund's position by selling the
option previously purchased. Where the Fund cannot effect a closing purchase
transaction, it may be forced to incur brokerage commissions or dealer spreads
in selling securities it receives or it may be forced to hold underlying
securities until an option is exercised or expires.

         When a Fund writes an option, an amount equal to the net premium
received by the Fund is included in the liability section of the Fund's
Statement of Assets and Liabilities as a deferred credit. The amount of the
deferred credit will be subsequently marked to market to reflect the current
market value of the option written. The current market value of a traded option
is the last sale price or, in the absence of a sale, the mean between the
closing bid and asked price. If an option expires on its stipulated expiration
date or if the Fund enters into a closing purchase transaction, the Fund will
realize a gain (or loss if the cost of a closing purchase transaction exceeds
the premium received when the option was sold), and the deferred credit related
to such option will be eliminated. If a call option is exercised, the Fund will
realize a gain or loss from the sale of the underlying security and the proceeds
of the sale will be increased by the premium originally received. The writing of
covered call options may be deemed to involve the pledge of the securities
against which the option is being written. Securities against which call options
are written will be segregated on the books of the Custodian for the Fund.

         A Fund may purchase call and put options on any securities in which it
may invest. The Fund would normally purchase a call option in anticipation of an
increase in the market value of such securities. The purchase of a call option
would entitle the Fund, in exchange for the premium paid, to purchase a security
at a specified price during the option period. The Fund would ordinarily have a
gain if the value of the securities increased above the exercise price
sufficiently to cover the premium and would have a loss if the value of the
securities remained at or below the exercise price during the option period.

         A Fund would normally purchase put options in anticipation of a decline
in the market value of securities in its Fund ("protective puts") or securities
of the type in which it is permitted to invest. The purchase of a put option
would entitle the Fund, in exchange for the premium paid, to sell a security,
which may or may not be held in the Fund's holdings, at a specified price during
the option period. The purchase of protective puts is designed merely to offset
or hedge against a decline in the market value of the Fund's holdings. Put
options also may be purchased by the Fund for the purpose of affirmatively
benefiting from a decline in the price of securities which the Fund does not
own. The Fund would ordinarily recognize a gain if the value of the securities
decreased below the exercise price sufficiently to cover the premium and would
recognize a loss if the value of the securities remained at or above the
exercise price. Gains and losses on the purchase of protective put options would
tend to be offset by countervailing changes in the value of underlying Fund
securities.

         The hours of trading for options on securities may not conform to the
hours during which the underlying securities are traded. To the extent that the
option markets close before the markets for the underlying securities,
significant price and rate movements can take place in the underlying securities
markets that cannot be reflected in the option markets. It is impossible to
predict the volume of trading that may exist in such options, and there can be
no assurance that viable exchange markets will develop or continue.


<PAGE>


         A Fund may engage in over-the-counter options transactions with
broker-dealers who make markets in these options. At present, approximately ten
broker-dealers, including several of the largest primary dealers in U.S.
government securities, make these markets. The ability to terminate
over-the-counter option positions is more limited than with exchange-traded
option positions because the predominant market is the issuing broker rather
than an exchange, and may involve the risk that broker-dealers participating in
such transactions will not fulfill their obligations. To reduce this risk, the
Fund will purchase such options only from broker-dealers who are primary
government securities dealers recognized by the Federal Reserve Bank of New York
and who agree to (and are expected to be capable of) entering into closing
transactions, although there can be no guarantee that any such option will be
liquidated at a favorable price prior to expiration. The Advisor will monitor
the creditworthiness of dealers with whom the Fund enters into such options
transactions under the general supervision of the Funds' Board of Trustees.

         V. OPTIONS ON SECURITIES INDICES. In addition to options on securities,
each Fund may also purchase and write (sell) call and put options on securities
indices. Such options give the holder the right to receive a cash settlement
during the term of the option based upon the difference between the exercise
price and the value of the index. Such options will be used for the purposes
described above under "Options on Securities."

         Options on securities indices entail risks in addition to the risks of
options on securities. The absence of a liquid secondary market to close out
options positions on securities indices is more likely to occur, although the
Fund generally will only purchase or write such an option if the Advisor
believes the option can be closed out.

         Use of options on securities indices also entails the risk that trading
in such options may be interrupted if trading in certain securities included in
the index is interrupted. The Fund will not purchase such options unless the
Advisor believes the market is sufficiently developed such that the risk of
trading in such options is no greater than the risk of trading in options on
securities.

         Price movements in a Fund's holdings may not correlate precisely with
movements in the level of an index and, therefore, the use of options on indices
cannot serve as a complete hedge. Because options on securities indices require
settlement in cash, the Advisor may be forced to liquidate Fund securities to
meet settlement obligations.

         W. FUTURE CONTRACTS AND OPTIONS ON FUTURE CONTRACTS. The successful use
of such instruments draws upon the Advisor's skill and experience with respect
to such instruments and usually depends on the Advisor's ability to forecast
interest rate and currency exchange rate movements correctly. Should interest or
exchange rates move in an unexpected manner, a Fund may not achieve the
anticipated benefits of futures contracts or options on futures contracts or may
realize losses and thus will be in a worse position than if such strategies had
not been used. In addition, the correlation between movements in the price of
futures contracts or options on futures contracts and movements in the price of
the securities and currencies hedged or used for cover will not be perfect and
could produce unanticipated losses.

         FUTURES CONTRACTS. The Bond Fund may enter into contracts for the
purchase or sale for future delivery of fixed-income securities, foreign
currencies, or contracts based on financial indices including any index of U.S.
government securities, foreign government securities or corporate debt
securities. U.S. futures contracts have been designed by exchanges which have
been designated "contracts markets" by the Commodity Futures Trading Commission
("CFTC"), and must be executed through a futures commission merchant, or
brokerage firm, which is a member of the relevant contract market. Futures
contracts trade on a number of exchange markets, and, through their clearing
corporations, the exchanges guarantee performance of the contracts as between
the clearing members of the exchange. A Fund may enter into futures contracts
which are based on debt securities that are backed by the full faith and credit
of the U.S. Government, such as long-term U.S. Treasury Bonds, Treasury Notes,
Government National Mortgage Association (`GNMA") modified pass-through
mortgage-backed securities and three-month U.S. Treasury Bills. A Fund may also
enter into futures contracts which are based on bonds issued by entities other
than the U.S. government. At the same time a futures contract is purchased or
sold, the Fund must allocate cash or securities as a deposit payment ("initial
deposit"). It is expected that the initial deposit would be approximately 1 1/2%
to 5% of a contract's face value. Daily thereafter, the futures contract is
valued and the payment of "variation margin" may be required, since each day the
Fund would provide or receive cash that reflects any decline or increase in the
contract's value. At the time of delivery of securities pursuant to such a
contract, adjustments are made to recognize differences in value arising from
the delivery of securities with a different interest rate from that specified in
the contract. In some (but not many) cases, securities called for by a futures
contract may not have been issued when the contract was written.

         Although futures contracts by their terms call for the actual delivery
or acquisition of securities, in most cases the contractual obligation is
fulfilled before the date of the contract without having to make or take
delivery of the securities. The offsetting of a contractual obligation is
accomplished by buying (or selling, as the case may be) on a commodities
exchange an identical futures contract calling for delivery in the same month.
Such a transaction, which is effected through a member of an exchange, cancels
the obligation to make or take delivery of the securities. Since all
transactions in the futures market are made, offset or fulfilled through a
clearinghouse associated with the exchange on which the contracts are traded,
the Fund will incur brokerage fees when it purchases or sells futures contracts.

         The purpose of the acquisition or sale of a futures contract, in the
case of a Fund which holds or intends to acquire fixed-income securities, is to
attempt to protect the Fund from fluctuations in interest or foreign exchange
rates without actually buying or selling fixed-income securities or foreign
currencies. For example, if interest rates were expected to increase, the Fund
might enter into futures contracts for the sale of debt securities. Such a sale
would have much the same effect as selling an equivalent value of the debt
securities owned by the Fund. If interest rates did increase, the value of the
debt security in the Fund would decline, but the value of the futures contracts
to the Fund would increase at approximately the same rate, thereby keeping the
net asset value of the Fund from declining as much as it otherwise would have.
The Fund could accomplish similar results by selling debt securities and
investing in bonds with short maturities when interest rates are expected to
increase. However, since the futures market is more liquid than the cash market,
the use of futures contracts as an investment technique allows the Fund to
maintain a defensive position without having to sell its Fund securities.

         Similarly, when it is expected that interest rates may decline, futures
contracts may be purchased to attempt to hedge against anticipated purchases of
debt securities at higher prices. Since the fluctuations in the value of futures
contracts should be similar to those of debt securities, a Fund could take
advantage of the anticipated rise in the value of debt securities without
actually buying them until the market had stabilized. At that time, the futures
contracts could be liquidated and the Fund could then buy debt securities on the
cash market. To the extent a Fund enters into futures contracts for this
purpose, the assets in the segregated asset account maintained to cover the
Fund's obligations with respect to such futures contracts will consist of cash,
cash equivalents or high quality liquid debt securities from its Fund in an
amount equal to the difference between the fluctuating market value of such
futures contracts and the aggregate value of the initial and variation margin
payments made by the Fund with respect to such futures contracts.

         The ordinary spreads between prices in the cash and futures market, due
to differences in the nature of those markets, are subject to distortions.
First, all participants in the futures market are subject to initial deposit and
variation requirements. Rather than meeting additional variation margin
requirements, investors may close futures contracts through offsetting
transactions which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced, thus producing distortion. Third, from
the point of view of speculators, the margin deposit requirements in the futures
market are less onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures market may
cause temporary price distortions. Due to the possibility of distortion, a
correct forecast of general interest rate trends by the Advisor may still not
result in a successful transaction.

         In addition, futures contracts entail risks. Although the Advisor
believes that use of such contracts will benefit the Funds, if the Advisor's
investment judgment about the general direction of interest rates is incorrect,
a Fund's overall performance would be poorer than if it had not entered into any
such contract. For example, if a Fund has hedged against the possibility of an
increase in interest rates which would adversely affect the price of debt
securities held in its Fund and interest rates decrease instead, the Fund will
lose part or all of the benefit of the increased value of its debt securities
which it has hedged because it will have offsetting losses in its futures
positions. In addition, in such situations, if a Fund has insufficient cash, it
may have to sell debt securities from its Fund to meet daily variation margin
requirements. Such sales of bonds may be, but will not necessarily be, at
increased prices which reflect the rising market. A Fund may have to sell
securities at a time when it may be disadvantageous to do so.

         OPTIONS ON FUTURES CONTRACTS. The Bond Fund may purchase and write
options on futures contracts for hedging purposes. The purchase of a call option
on a futures contract is similar in some respects to the purchase of a call
option on an individual security. Depending on the pricing of the option
compared to either the price of the futures contract upon which it is based or
the price of the underlying debt securities, it may or may not be less risky
than ownership of the futures contract or underlying debt securities. As with
the purchase of futures contracts, when a Fund is not fully invested it may
purchase a call option on a futures contract to hedge against a market advance
due to declining interest rates.

         The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the security or foreign currency which
is deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is below the exercise price, a Fund will retain the
full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Fund's holdings. The writing of a put
option on a futures contract constitutes a partial hedge against increasing
prices of the security or foreign currency which is deliverable upon exercise of
the futures contract. If the futures price at expiration of the option is higher
than the exercise price, the Fund will retain the full amount of the option
premium which provides a partial hedge against any increase in the price of
securities which the Fund intends to purchase. If a put or call option the Fund
has written is exercised, the Fund will incur a loss which will be reduced by
the amount of the premium it receives. Depending on the degree of correlation
between changes in the value of its Fund securities and changes in the value of
its futures positions, the Fund's losses from existing options on futures may to
some extent be reduced or increased by changes in the value of Fund securities.

         The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on Fund securities. For
example, a Fund may purchase a put option on a futures contract to hedge against
the risk of rising interest rates.

         The amount of risk a Fund assumes when it purchases an option on a
futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the option purchased.

         The Board of Trustees of each Fund has adopted a further restriction
that the Fund will not enter into any futures contracts or options on futures
contracts if immediately thereafter the amount of margin deposits on all the
futures contracts of the Fund and premiums paid on outstanding options on
futures contracts owned by the Fund (other than those entered into for bona fide
hedging purposes) would exceed 5% of the market value of the total assets of the
Fund.

                  ADDITIONAL RISKS OF OPTIONS ON FUTURES CONTRACTS AND FORWARD
CONTRACTS. Unlike transactions entered into by a Fund in futures contracts,
options on forward contracts are not traded on contract markets regulated by the
CFTC or by the SEC. To the contrary, such instruments are traded through
financial institutions acting as market-makers, subject to SEC regulation. In an
over-the-counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there are no daily
price fluctuation limits, and adverse market movements could therefore continue
to an unlimited extent over a period of time. Although the purchaser of an
option cannot lose more than the amount of the premium plus related transaction
costs, this entire amount could be lost. Moreover, the option writer and a
trader of forward contracts could lose amounts substantially in excess of their
initial investments, due to the margin and collateral requirements associated
with such positions.

         In addition, futures contracts, options on futures contracts and
forward contracts may be traded on foreign exchanges. Such transactions are
subject to the risk of governmental actions affecting trading in or the prices
of securities. The value of such positions also could be adversely affected by:
(i) other complex foreign political and economic factors; (ii) lesser
availability than in the United States of data on which to make trading
decisions; (iii) delays in the Fund's ability to act upon economic events
occurring in foreign markets during nonbusiness hours in the United States; (iv)
the imposition of different exercise and settlement terms and procedures and
margin requirements than in the United States; and (v) lesser trading volume.

         X. ILLIQUID SECURITIES Each Fund may contain illiquid securities.
Illiquid securities generally include securities which cannot be disposed of
promptly and in the ordinary course of business without taking a reduced price.
Securities may be illiquid due to contractual or legal restrictions on resale or
lack of a ready market. The following securities are considered to be illiquid:
repurchase agreements maturing in more than seven days, nonpublicly offered
securities and restricted securities. Neither Fund will invest more than 15% of
its net assets in illiquid securities.

         Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (the "1933 Act"),
securities which are otherwise not readily marketable and repurchase agreements
having a remaining maturity of longer than seven days. Securities which have not
been registered under the 1933 Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of Fund securities and a mutual fund might
be unable to dispose of restricted or other illiquid securities promptly or at
reasonable prices and might thereby experience difficulty satisfying redemptions
within seven days. A mutual fund might also have to register such restricted
securities in order to dispose of them resulting in additional expense and
delay. Adverse market conditions could impede such a public offering of
securities.

         In recent years, however, a large institutional market has developed
for certain securities that are not registered under the 1933 Act, including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale of such investments to the
general public or to certain institutions may not be indicative of their
liquidity.

         The Securities and Exchange Commission the (the "SEC") has adopted Rule
144A, which allows a broader institutional trading market for securities
otherwise subject to restriction on their resale to the general public. Rule
144A establishes a "safe harbor" from the registration requirements of the 1933
Act of resales of certain securities to qualified institutional buyers. The
Advisor anticipates that the market for certain restricted securities such as
institutional commercial paper will expand further as a result of this
regulation and the development of automated systems for the trading, clearance
and settlement of unregistered securities of domestic and foreign issuers, such
as the PORTAL System sponsored by the National Association of Securities
Dealers, Inc.

         The Advisor will monitor the liquidity of Rule 144A securities in each
Fund's holdings under the supervision of the Fund's Board of Trustees. In
reaching liquidity decisions, the Advisor will consider, among other things, the
following factors: (1) the frequency of trades and quotes for the security; (2)
the number of dealers and other potential purchasers or sellers of the security;
(3) dealer undertakings to make a market in the security and (4) the nature of
the security and of the marketplace trades (e.g., the time needed to dispose of
the security, the method of soliciting offers and the mechanics of the
transfer).

         TRADE CLAIMS. The Bond Fund may invest in trade claims and options on
trade claims. Trade claims are interests in amounts owed to suppliers of goods
or services and are purchased from creditors of companies in financial
difficulty. For purchasers such as the Fund, trade claims offer the potential
for profits since they are often purchased at a significant discount from face
value and, consequently, may generate capital appreciation in the event that the
market value of the claim increases as the debtor's financial position improves
or the claim is paid.

         An investment in trade claims is speculative and carries a high degree
of risk. Trade claims are illiquid securities which generally do not pay
interest and there can be no guarantee that the debtor will ever be able to
satisfy the obligation on the trade claim. The markets in trade claims are not
regulated by federal securities laws or the SEC. Because trade claims are
unsecured, holders of trade claims may have a lower priority in terms of payment
than certain other creditors in a bankruptcy proceeding.

         Y. RESTRICTED SECURITIES. Restricted securities generally can be sold
in privately negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering. Where the
registration is required, a Fund holding restricted securities may be obligated
to pay all or part of the registration expense and a considerable period may
elapse between the time it decides to seek registration and the time the Fund
may be permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop, the Fund
might obtain a less favorable price than prevailed when it decided to seek
registration of the security.

         Each Fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as security holder to seek to
protect the interests of security holders if it determines this to be in the
best interests of the Fund shareholders.

         Z. SHORT SALES. Each Fund may sell a security short in anticipation of
a decline in the market value of the security. When a Fund engages in a short
sale, it sells a security which it does not own. To complete the transaction,
the Fund must borrow the security in order to deliver it to the buyer. The Fund
must replace the borrowed security by purchasing it at the market price at the
time of replacement, which may be more or less than the price at which the Fund
sold the security. The Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale and the
date on which the Fund replaces the borrowed security. The Fund will realize a
profit if the security declines in price between those dates.

         In connection with its short sales, a Fund will be required to maintain
a segregated account with its Custodian of cash or high grade liquid debt assets
equal to the market value of the securities sold less any collateral deposited
with its broker. However, the segregated account and deposits will not
necessarily limit the Fund's potential loss on a short sale, which is unlimited.

         AA. SECURITIES LENDING. Each Fund may lend securities to parties such
as broker-dealers, banks, or institutional investors. Securities lending allows
a Fund to retain ownership of the securities loaned and, at the same time, to
earn additional income. Since there may be delays in the recovery of loaned
securities, or even a loss of rights in collateral supplied, should the borrower
fail financially, loans will be made only to parties whose creditworthiness has
been reviewed and deemed satisfactory by the Advisor. Furthermore, they will
only be made if, in the judgment of the Advisor, the consideration to be earned
from such loans would justify the risk.

         The Advisor understands that it is the current view of the staff of the
Securities and Exchange Commission ("SEC") that a Fund may engage in loan
transactions only under the following conditions: (1) a Fund must receive 100%
collateral in the form of cash, cash equivalents (e.g., U.S. Treasury bills or
notes) or other high grade liquid debt instruments from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of the
collateral; (3) after giving notice, the Fund must be able to terminate the loan
at any time; (4) the Fund must receive reasonable interest on the loan or a flat
fee from the borrower, as well as amounts equivalent to any dividends, interest,
or other distributions on the securities loaned and to any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection with
the loan; and (6) the Board of Trustees must be able to vote proxies on the
securities loaned, either by terminating the loan or by entering into an
alternative arrangement with the borrower.

         Cash received through loan transactions may be invested in any security
in which the Fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).

         BB. LEVERAGING. Leveraging a Fund creates an opportunity for increased
net income but, at the same time, creates special risk considerations. For
example, leveraging may exaggerate changes in the net asset value of Fund shares
and in the yield on a Fund's Fund. Although the principal of such borrowings
will be fixed, a Fund's assets may change in value during the time the borrowing
is outstanding. Leveraging will create interest expenses for the Fund which can
exceed the income from the assets retained. To the extent the income derived
from securities purchased with borrowed funds exceeds the interest the Fund will
have to pay, the Fund's net income will be greater than if leveraging were not
used. Conversely, if the income from the assets retained with borrowed funds is
not sufficient to cover the cost of leveraging, the net income of the Fund will
be less than if leveraging were not used, and therefore the amount available for
distribution to shareholders will be reduced.

                             INVESTMENT LIMITATIONS

         FUNDAMENTAL. The investment limitations described below have been
adopted by the Trust with respect to each Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").

         1. BORROWING MONEY. The Funds will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.

         2. SENIOR SECURITIES. The Funds will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and the Statement
of Additional Information.

     3. UNDERWRITING. The Funds will not act as underwriter of securities issued
by other persons. This limitation is not applicable to the extent that, in
connection with the disposition of Fund securities (including restricted
securities), a Fund may be deemed an underwriter under certain federal
securities laws.



         4. REAL ESTATE. The Funds will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude a Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).

         5. COMMODITIES. The Funds will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude a Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.

         6. LOANS. The Funds will not make loans to other persons, except (a) by
loaning Fund securities, (b) by engaging in repurchase agreements, or (c) by
purchasing nonpublicly offered debt securities. For purposes of this limitation,
the term "loans" shall not include the purchase of a portion of an issue of
publicly distributed bonds, debentures or other securities.

     7. CONCENTRATION. Each Fund will not invest 25% or more of its total assets
in a particular industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.



         With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.

         Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.

         NON-FUNDAMENTAL. The following limitations have been adopted by the
Trust with respect to each Fund and are Non-Fundamental (see "Investment
Restrictions" above).

         i. PLEDGING. The Funds will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of a Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.

     ii. BORROWING. Each Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding.



         iii. MARGIN PURCHASES. The Funds will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by a Fund for the clearance of purchases and sales or
redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.

     iv. ILLIQUID SECURITIES. Neither Fund will invest more than 15% of its net
assets in illiquid securities.


                             THE INVESTMENT ADVISOR

     The Funds' investment advisor is CommonWealth Advisors, Inc., 247 Florida
Street, Baton Rouge, LA 70801 (the "Advisor"). Walter A. Morales may be deemed
to be a controlling person of the Advisor due to his ownership of the shares of
the Advisor.


         Under the terms of the management agreement (the "Agreement"), the
Advisor manages each Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of each Fund except brokerage, taxes,
borrowing costs (such as (a) interest and (b) dividend expenses on securities
sold short), 12b-1 expenses, fees and expenses of the non-interested person
trustees and extraordinary expenses. As compensation for its management services
and agreement to pay the Funds' expenses, the Funds are obligated to pay the
Advisor a fee computed and accrued daily and paid monthly at an annual rate of
1.10% of the average daily net assets of the Florida Street Bond Fund, and 1.35%
of the average daily net assets of the Florida Street Growth Fund. The Advisor
may waive all or part of its fee, at any time, and at its sole discretion, but
such action shall not obligate the Advisor to waive any fees in the future. For
the period August 4, 1997 (commencement of operations) through October 31, 1997,
and for the fiscal years ended October 31, 1998 and 1999, the Florida Street
Bond Fund paid advisory fees of $14,080, $153,078 and $330,591, respectively.
For the period August 6, 1997 (commencement of operations) through October 31,
1997 and for the fiscal years ended October 31, 1998 and 1999, the Florida
Street Growth Fund paid advisory fees of $6,339, $37,385 and $50,958,
respectively.


         The Advisor retains the right to use the name "Florida Street" in
connection with another investment company or business enterprise with which the
Advisor is or may become associated. The Trust's right to use the name "Florida
Street" automatically ceases ninety days after termination of the Agreement and
may be withdrawn by the Advisor on ninety days written notice.

         The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. If a bank
or other financial institution were prohibited from continuing to perform all or
a part of such services, management of the Fund believes that there would be no
material impact on the Fund or its shareholders. Banks and other financial
institutions may charge their customers fees for offering these services to the
extent permitted by applicable regulatory authorities, and the overall return to
those shareholders availing themselves of the bank services will be lower than
to those shareholders who do not. The Fund may from time to time purchase
securities issued by banks and other financial institutions which provide such
services; however, in selecting investments for the Fund, no preference will be
shown for such securities.


         The Trust and the Advisor have each adopted a Code of Ethics under Rule
17j-1 of the Investment Company Act of 1940. The Code significantly restricts
the personal investing activities of all employees of the Advisor. The Code
requires that all employees of the Advisor preclear any personal securities
investment. The preclearance requirement and associated procedures are designed
to identify any substantive prohibition or limitation applicable to the proposed
investment. In addition, no employee may purchase or sell any security which at
the time is being purchased or sold, or to the knowledge of the employee is
being considered for purchase or sale, by the Fund. The substantive restrictions
also include a ban on acquiring any securities in an initial public offering and
provides for trading "blackout periods" which prohibit trading by portfolio
managers of the Fund within periods of trading by the Fund in the same (or
equivalent) security. The restrictions and prohibitions apply to most securities
transactions by employees of the Advisor, with limited exceptions for some
securities (such as securities that have a market capitalization and average
daily trading volume above certain minimums).



<PAGE>




                              TRUSTEES AND OFFICERS

         The Board of Trustees supervises the business activities of the Trust.
The names of the Trustees and executive officers of the Trust are shown below.
Each Trustee who is an "interested person" of the Trust, as defined in the
Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<S>                            <C>                    <C>
============================== ====================== ====================================================
  NAME, AGE AND ADDRESS             POSITION                  PRINCIPAL OCCUPATIONS DURING

                                                                      PAST 5 YEARS

- ------------------------------ ---------------------- ----------------------------------------------------

Kenneth D. Trumpfheller                  President,        President, Treasurer , and Secretary of AmeriPrime
1793 Kingswood Drive                     Secretary,        Financial Services, Inc., the Fund's administrator, and
Suite 200                                Treasurer,        AmeriPrime Financial Securities, Inc., the Fund's
Southlake, TX  76092                     and Trustee       distributor, since 1994;  President, Secretary, Treasurer and
                                                           Trustee of AmeriPrime Funds and  AmeriPrime Insurance
                                                           Trust; prior to December, 1994 a senior client executive
Year of Birth:  1958                                       with SEI Financial Services.

- ---------------------------------------------------------------------------------------------------------------------------------

Steve L. Cobb                            Trustee           President of Chandler Engineering Company, L.L.C.,
2001 N. Indianwood Avenue                                  oil and gas services company; various positions with
Broken Arrow, OK  74012                                    Carbo Ceramics, Inc., oil field manufacturing/ supply
                                                           company, from 1984 to 1997, most recently Vice President
Year of Birth:  1657                                       of Marketing

- ---------------------------------------------------------------------------------------------------------------------------------

Gary E. Hippenstiel                      Trustee           Director, Vice President and Chief Investment Officer
600 Jefferson Street                                       of Legacy Trust Company since 1992; President
Suite 350                                                  and Director of Heritage Trust Company from 1994-1996;
Houston, TX  77002                                         Vice President and Manager of Investments of Kanaly Trust
                                                           Company from 1988 to 1992.
Year of Birth:  1947

- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>



         Trustee fees are Trust expenses and each series of the Trust pays a
portion of the Trustee fees. The compensation paid to the Trustees of the Trust
for the Funds' fiscal year ended October 31, 1999 is set forth in the following
table:
<TABLE>
<S>                                   <C>                   <C>

===================================== ===================== ==================================
               NAME                         AGGREGATE               TOTAL COMPENSATION
                                          COMPENSATION           FROM TRUST (THE TRUST IS

                                           FROM TRUST             NOT IN A FUND COMPLEX)
- ------------------------------------- --------------------- ----------------------------------
Kenneth D. Trumpfheller                         0                            0
- ------------------------------------- --------------------- ----------------------------------
Steve L. Cobb                                $_____                       $_____
- ------------------------------------- --------------------- ----------------------------------
Gary E. Hippenstiel                          $_____                       $_____
===================================== ===================== ==================================
</TABLE>


<PAGE>



                         FUND TRANSACTIONS AND BROKERAGE


         Subject to policies established by the Board of Trustees of the Trust,
the Advisor is responsible for each Fund's portfolio decisions and the placing
of each Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for each 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. The Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received. Consistent with
the Rules of Fair Practices of the National Association of Securities Dealers,
Inc., and subject to its obligation seeking best qualitative execution, the
Advisor may give consideration to sales of shares of a Fund as a factor in the
selection of brokers and dealers to execute portfolio transactions.


         The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Funds and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.

         Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom a Fund effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Funds. Although research services and other information are useful to the Funds
and the Advisor, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information will not
reduce the overall cost to the Advisor of performing its duties to the Funds
under the Agreement. Due to research services provided by brokers, the Florida
Street Bond Fund and the Florida Street Growth Fund directed to brokers
$________ and $______ (on which commissions were $_____ and $_____),
respectively, during the fiscal year ended October 31, 1999.

         Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.

         When a Fund and another of the Advisor's clients seek to purchase or
sell the same security at or about the same time, the Advisor may execute the
transaction on a combined ("blocked") basis. Blocked transactions can produce
better execution for the Funds because of the increased volume of the
transaction. If the entire blocked order is not filled, the Fund may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Fund may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. In the event that the entire blocked order
is not filled, the purchase or sale will normally be allocated on a pro rata
basis. The allocation may be adjusted by the Advisor, taking into account such
factors as the size of the individual orders and transaction costs, when the
Advisor believes an adjustment is reasonable. For the period August 4, 1997
(commencement of operations) through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999, the Florida Street Bond Fund paid brokerage
commissions of $480, $9,337 and $21,245, respectively. For the period August 6,
1997 (commencement of operations) through October 31, 1997 and for the fiscal
years ended October 31, 1998 and 1999, the Florida Street Growth Fund paid
brokerage commissions of $3,897, $8,780 and $18,432, respectively.

                          DETERMINATION OF SHARE PRICE


         The price (net asset value) of the shares of each Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in each Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Determination of Net
Asset Value" in the Prospectus.



<PAGE>


                             INVESTMENT PERFORMANCE

         Each Fund may periodically advertise "average annual total return".
"Average annual total return," as defined by the Securities and Exchange
Commission, is computed by finding the average annual compounded rates of return
for the period indicated that would equate the initial amount invested to the
ending redeemable value, according to the following formula:

                          P(1+T)n=ERV

Where:            P        =        a hypothetical $1,000 initial investment
                  T        =        average annual total return
                  n        =        number of years
                  ERV      =        ending redeemable value at the end of the
                                    applicable period of the hypothetical $1,000
                                    investment made at the beginning of the
                                    applicable period.

         The computation assumes that all dividends and distributions are
reinvested at the net asset value on the reinvestment dates and that a complete
redemption occurs at the end of the applicable period.

         A Fund's "yield" is determined in accordance with the method defined by
the Securities and Exchange Commission. A yield quotation is based on a 30 day
(or one month) period and is computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:

                        Yield = 2[(a-b/cd+1)6-1]
         Where:

          a    = dividends and interest earned during the period

          b    = expenses accrued for the period (net of reimbursements)

          c    = the average daily number of shares outstanding during the
               period that were entitled to receive dividends

          d    = the maximum offering price per share on the last day of the
               period

         Solely for the purpose of computing yield, dividend income recognized
by accruing 1/360 of the stated dividend rate of the security each day that the
Fund owns the security. Generally, interest earned (for the purpose of "a"
above) on debt obligations is computed by reference to the yield to maturity of
each obligation held based on the market value of the obligation (including
actual accrued interest) at the close of business on the last business day prior
to the start of the 30-day (or one month) period for which yield is being
calculated, or, with respect to obligations purchased during the month, the
purchase price (plus actual accrued interest). With respect to the treatment of
discount and premium on mortgage or other receivable-backed obligations which
are expected to be subject to monthly paydowns of principal and interest, gain
or loss attributable to actual monthly paydowns is accounted for as an increase
or decrease to interest income during the period and discount or premium on the
remaining security is not amortized. The Florida Street Bond Fund's yield for
the 30-day period ended December 30, 1999 was 21.70%.

         Each Fund's investment performance will vary depending upon market
conditions, the composition of each Fund's Fund and operating expenses of each
Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing a Fund's performance to those of other investment companies or
investment vehicles. The risks associated with each Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the period August 4,
1997 (commencement of operations) through October 31, 1999 and for the fiscal
year ended October 31, 1999, the Florida Street Bond Fund's average annual total
return was ___% and -0.70%, respectively. For the period August 6, 1997
(commencement of operations) through October 31, 1999 and for the fiscal year
ended October 31, 1999, the Florida Street Growth Fund's average annual total
return was ___% and 20.06%, respectively.


         From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of each Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the market in general.


         In addition, the performance of each Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.

                                    CUSTODIAN


     UMB Bank, N.A., 928 Grand Blvd., 10th floor, Kansas City, Missouri 64106,
is custodian of each Funds investments. The custodian acts as each Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at a Fund's request and maintains
records in connection with its duties.


                                 TRANSFER AGENT


         Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as each Fund's transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of each Fund's shares, acts as dividend and distribution disbursing
agent and performs other transfer agent and shareholder service functions. For
its services as transfer agent, Unified receives a monthly fee from the Advisor
of $1.20 per shareholder (subject to a minimum monthly fee of $750). In
addition, Unified provides each Fund with fund accounting services, which
includes certain monthly reports, record-keeping and other management-related
services. For its services as fund accountant, Unified receives an annual fee
from the Advisor equal to 0.0275% of each Fund's assets up to $100 million,
0.0250% of each Fund's assets from $100 million to $300 million, and 0.0200% of
each Fund's assets over $300 million (subject to various monthly minimum fees,
the maximum being $2,000 per month for assets of $20 to $100 million). Unified
began providing fund accounting services to the Funds on November 1, 1998. For
the fiscal year ended October 31, 1999, Unified received $23,714 from the
Advisor (not the Fund) for these fund accounting services provided to the
Florida Street Bond Fund. For the fiscal year ended October 31, 1999, Unified
received $9,744 from the Advisor (not the Fund) for these fund accounting
services provided to the Florida Street Growth Fund.


                                   ACCOUNTANTS

         The firm of McCurdy & Associates CPA's, Inc., 27955 Clemens Road,
Westlake, Ohio 44145, has been selected as independent public accountants for
the Funds for the fiscal year ending October 31, 2000. McCurdy & Associates
performs an annual audit of each Fund's financial statements and provides
financial, tax and accounting consulting services as requested.

                                   DISTRIBUTOR

         AmeriPrime Financial Securities, Inc. (the "Distributor"), 1793
Kingswood Drive, Suite 200, Southlake, Texas 76092, is the exclusive agent for
distribution of shares of each Fund. Kenneth D. Trumpfheller, a Trustee and
officer of the Trust, is an affiliate of the Distributor. The Distributor is
obligated to sell the shares of each Fund on a best efforts basis only against
purchase orders for the shares. Shares of each Fund are offered to the public on
a continuous basis.

                                  ADMINISTRATOR

         The Funds retain AmeriPrime Financial Services, Inc., 1793 Kingswood
Drive, Suite 200, Southlake, TX 76092, (the"Administrator") to manage the Funds'
business affairs and provide the Funds with administrative services, including
all regulatory reporting and necessary office equipment, personnel and
facilities. The Administrator receives a monthly fee from the Advisor equal to
an annual rate of 0.10% to each Fund's assets under $50 million, 0.075% to each
Fund's assets from $50 million to $100 million, and 0.050% to each Fund's assets
over $100 million (subject to a minimum fee of $2,500 per month). The
Administrator, the Distributor, and Unified (the Fund's transfer agent) are
controlled by Unified Financial Services, Inc. For the period August 4, 1997
(commencement of operations) through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999, the Administrator received $10,417, $25,000 and
$23,280, respectively, from the Advisor (not the Fund) for these services
provided to the Florida Street Bond Fund. For the period August 6, 1997
(commencement of operations) through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999, the Administrator received $10,417, $25,000 and
$19,783, respectively, from the Advisor (not the Fund) for these services
provided to the Florida Street Growth Fund.

                              FINANCIAL STATEMENTS

         The financial statements and independent auditor's report required to
be included in the Statement of Additional Information are incorporated herein
by reference to the Funds' Annual Report Shareholders for the period ended
October 31, 1999. The Trust will provide the Annual Report without charge by
calling the Fund at 1-800-890-5344.


<PAGE>



                                    APPENDIX


                      DESCRIPTION OF CORPORATE BOND RATINGS

                       STANDARD & POOR'S RATINGS SERVICES

         The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform any audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information or for other circumstances.

         The ratings are based, in varying degrees, on the following
considerations:

I.   Likelihood of  default-capacity  and  willingness  of the obliger as to the
timely  payment of interest and repayment of principal in  accordance  with the
terms of the obligation.

II.  Nature and provisions of the obligation.

III. Protection afforded by, and relative position of the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.

     AAA - Debt rated "AAA" has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.

     AA - Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

     A - Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.

     BBB - Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

     BB, B, CCC, CC, C - Debt rated "BB", "B", "CCC", "CC", and "C" is regarded,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation.
"BB" indicates the lowest degree of speculation and "C" the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

     BB - Debt rate "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB" rating.

     B - Debt rated "B" has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"BB" or "BB-" rating.

     CCC - Debt rated "CCC" has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The "CCC" rating category
is also used for debt subordinated to senior debt that is assigned an actual or
implied "B" or "B-" rating.

     CC - The rating "CC" is typically applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC" rating.

     C - The rating "C" is typically applied to debt subordinated to senior debt
which is assigned an actual or implied "CCC-" debt rating. The "C" rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.

     C1 - The rating "C1" is reserved for income bonds on which no interest is
being paid.

     D - Debt rated "D" is in payment default. The "D" rating category is used
when interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition if debt
service payments are jeopardized.

     Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
categories.

                         MOODY'S INVESTORS SERVICE, INC.

     Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

     Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there may be other elements present
which make the long-term risk appear somewhat greater than the Aaa securities.

     A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment some time in the future.

     Baa - Bonds which are rated Baa are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

     Ba - Bonds which are rated Ba are judged to have speculative elements:
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

     B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

     Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

     Ca - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

     C - Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Moody's applies numerical modifiers: 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category, the modifier 2 indicates a mid-range ranking, and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.


<PAGE>


AMERIPRIME FUNDS

PART C.  OTHER INFORMATION
         -----------------

Item 23. Exhibits

(a)  Articles of Incorporation.

(i) Copy of Registrant's Declaration of Trust, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.

(ii) Copy of Amendment No. 1 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby
incorporated by reference.

(iii) Copy of Amendment No. 2 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 1, is hereby
incorporated by reference.

(iv) Copy of Amendment No. 3 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is hereby
incorporated by reference.

(v) Copy of Amendment No. 4 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is hereby
incorporated by reference.

(vi) Copy of Amendment No. 5 and Amendment No. 6 to Registrant's Declaration of
Trust, which were filed as an Exhibit to Registrant's Post-Effective Amendment
No. 8, are hereby incorporated by reference.

(viii) Copy of Amendment No. 7 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby
incorporated by reference.

(ix) Copy of Amendment No. 8 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby
incorporated by reference.

(x) Copy of Amendment No. 9 to Registrant's Declaration of Trust which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 15, is hereby
incorporated by reference.

(xi) Copy of Amendment No. 10 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 16, is hereby
incorporated by reference.

(xii) Copy of Amendment No. 11 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby
incorporated by reference.

(xiii) Copy of Amendment No. 12 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby
incorporated by reference.

(xiv) Copy of Amendment No. 13 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby
incorporated by reference.

(xv) Copy of Amendments No. 14-17 to Registrant's Declaration of Trust, which
were filed as Exhibits to Registrant's Post-Effective Amendment No. 27, are
hereby incorporated by reference.

(xvi) Copy of Amendments No. 18-19 to Registrant's Declaration of Trust, which
were filed as Exhibits to Registrant's Post-Effective Amendment No. 30, are
hereby incorporated by reference.

(xvii) Copy of Amendment No. 20 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 40, is hereby
incorporated by reference.

(b) By-Laws. Copy of Registrant's By-Laws, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.

(c) Instruments Defining Rights of Security Holders. - None other than in the
Declaration of Trust, as amended, and By-Laws of the Registrant.

(d)  Investment Advisory Contracts.

(i) Copy of Registrant's Management Agreement with Carl Domino Associates, L.P.,
Adviser to Carl Domino Equity Income Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11, is hereby incorporated by
reference.

(ii) Copy of Registrant's Management Agreement with Jenswold, King & Associates,
Adviser to Fountainhead Special Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 8, is hereby incorporated by
reference.

(iii) Copy of Registrant's Management Agreement with GLOBALT, Inc., Adviser to
GLOBALT Growth Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 11, is hereby incorporated by reference.

(iv) Copy of Registrant's Management Agreement with IMS Capital Management,
Inc., Adviser to the IMS Capital Value Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 2, is hereby incorporated by
reference.

(v) Copy of Registrant's Management Agreement with Commonwealth Advisors, Inc.,
Adviser to Florida Street Bond Fund and Florida Street Growth Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 8, is hereby
incorporated by reference.

(vi) Copy of Registrant's Management Agreement with Corbin & Company, Adviser to
Corbin Small-Cap Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 8, is hereby incorporated by reference.

(vii) Copy of Registrant's Management Agreement with Spectrum Advisory Services,
Inc., Advisor to the Marathon Value Portfolio, is filed herewith.

(viii) Copy of Registrant's Management Agreement with The Jumper Group, Inc.,
Adviser to the Jumper Strategic Advantage Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.

(ix) Copy of Registrant's Management Agreement with Appalachian Asset
Management, Inc., Advisor to the AAM Equity Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 17, is hereby incorporated by
reference.

(x) Copy of Registrant's Management Agreement with Martin Capital Advisors,
L.L.P., Advisor to the Austin Opportunity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.

(xi) Copy of Registrant's proposed Management Agreement with Paul B. Martin, Jr.
d/b/a Martin Capital Advisors, Advisor to the Texas Opportunity Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 17, is hereby
incorporated by reference.

(xii) Copy of Registrant's Management Agreement with Martin Capital Advisors
L.L.P., Advisor to the U.S. Opportunity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 29, is hereby incorporated by
reference.

(xiii) Copy of Registrant's Management Agreement with Gamble, Jones, Morphy &
Bent, Advisor to the GJMB Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.

(xiv) Copy of Registrant's Management Agreement with Cornerstone Investment
Management, Advisor to the Cornerstone MVP Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by
reference.

(xv) Copy of Registrant's Management Agreement with Carl Domino Associates,
L.P., Advisor to the Carl Domino Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 23, is hereby incorporated by
reference.

(xvi) Copy of Registrant's Management Agreement with Carl Domino Associates,
L.P., Advisor to the Carl Domino Global Equity Income Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 23, is hereby
incorporated by reference.

(xvii) Copy of Registrant's Management Agreement with Dobson Capital Management,
Inc,. Advisor to the Dobson Covered Call Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 25, is hereby incorporated by
reference.

(xviii) Registrant's Management Agreement with Auxier Asset Management, LLC,
Advisor to the Auxier Focus Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 31, is hereby incorporated by reference.


(xix) Copy of Registrant's Management Agreement with Shepherd Advisory Services,
Inc., Advisor to the Shepherd Values Market Neutral Fund, is filed herewith.

(xx) Copy of Registrant's Management Agreement with Shepherd Advisory Services,
Inc., Advisor to the Shepherd Values Growth Fund, is filed herewith.


(xxi) Copy of Registrant's Management Agreement with Columbia Partners, L.L.C.,
Investment Management, Advisor to the Columbia Partners Equity Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.

(xxii) Registrant's Management Agreement with Cash Management Systems , Inc.
("CMS"), Adviser to The Cash Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 31, is hereby incorporated by reference.

(xxiii) Copy of Sub-Advisory Agreement between Cash Management Systems, Inc. and
Milestone Capital Management, L.P., Sub-Advisor to The Cash Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 30, is hereby
incorporated by reference.

(xxiv) Copy of Registrant's Management Agreement with Ariston Capital Management
Corporation, Advisor to the Ariston Convertible Securities Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 27, is hereby
incorporated by reference.

(xxv) Copy of Registrant's Management Agreement with Leader Capital Corp.,
Advisor to the Leader Converted Mutual Bank Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 29, is hereby incorporated by
reference.

(xxvi) Registrant's Management Agreement with Shepherd Advisory Services, Inc.,
Advisor to the Shepherd Values VIF Equity Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.

(xxvii) Registrant's Management Agreement with Shepherd Advisory Services, Inc.,
Advisor to the Shepherd Values Small-Cap Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.

(xxviii) Registrant's Management Agreement with Shepherd Advisory Services,
Inc., Advisor to the Shepherd Values International Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 31, is hereby
incorporated by reference.

(xxix) Registrant's Management Agreement with Shepherd Advisory Services, Inc.,
Advisor to the Shepherd Values Fixed Income Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 31, is hereby incorporated by
reference.

(xxx) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Cornerstone Capital Management, Inc., Sub-Advisor to the Shepherd Values VIF
Equity Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 34, is hereby incorporated by reference.

(xxxi) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Templeton Portfolio Advisory, Sub-Advisor to the Shepherd Values International
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
34, is hereby incorporated by reference.

(xxxii) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Nicholas-Applegate Capital Management, Sub-Advisor to the Shepherd Values
Small-Cap Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 34, is hereby incorporated by reference.

(xxxiii) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Potomac Asset Management Company, Inc., Sub-Advisor to the Shepherd Values Fixed
Income Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 34, is hereby incorporated by reference.


(xxxiv) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Cornerstone Capital Management, Inc., Sub-Advisor to the Shepherd Values Market
Neutral Fund, is filed herewith.

(xxxv) Sub-Advisory Agreement between Shepherd Advisory Services, Inc. and
Cornerstone Capital Management, Inc., Sub-Advisor to the Shepherd Values Growth
Fund, is filed herewith.

(xxxvi) Copy of Registrant's Management Agreement with Aegis Asset Management,
Inc., Advisor to the Westcott Nothing But Net Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 39, is hereby incorporated
by reference.

(xxxvii) Copy of Registrant's Management Agreement with Aegis Asset Management,
Inc., Advisor to the Westcott Large-Cap Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 39, is hereby incorporated by
reference.

(xxxviii) Copy of Registrant's Management Agreement with Aegis Asset Management,
Inc., Advisor to the Westcott Fixed Income Fund, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 39, is hereby incorporated by
reference.

(xxxix) Copy of Registrant's Management Agreement with Jenswold, King &
Associates, Adviser to the Fountainhead Kaleidoscope Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 38, is hereby
incorporated by reference.

(xxxx) Copy of Registrant's Proposed Management Agreement with Ariston Capital
Management Corporation, Adviser to the Ariston Internet Convertible Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 41, is
hereby incorporated by reference.


(e)      Underwriting Contracts.

(i) Copy of Registrant's Amended and Restated Underwriting Agreement with
AmeriPrime Financial Securities, Inc., which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 8, is hereby incorporated by
reference.

(ii) Copy of Registrant's Exhibit A to the Amended and Restated Underwriting
Agreement, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 40, is hereby incorporated by reference.

(f)  Bonus or  Profit Sharing Contracts.- None.

(g)   Custodian Agreements.

(i) Copy of Registrant's Agreement with the Custodian, Firstar Bank, N.A.
(formerly Star Bank), which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 11, is hereby incorporated by reference.

(ii) Copy of Registrant's Appendix B to the Agreement with the Custodian,
Firstar Bank, N.A., which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 40, is hereby incorporated by reference.

(iii) Copy of Registrant's Agreement with UMB Bank, N.A., Custodian to the
Dobson Covered Call Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 28, is hereby incorporated by reference.

(h) Other Material Contracts. Copy of Registrant's Agreement with the
Administrator, AmeriPrime Financial Services, Inc., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 11, is hereby incorporated
by reference.

(i)      Legal Opinion.

(i) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 9, is hereby incorporated by
reference.

(ii) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 29, is hereby incorporated
by reference.


(iii) Opinion of Brown, Cummins & Brown Co., L.P.A., which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 41, is hereby incorporated
by reference.


Consent of Brown, Cummins & Brown Co., L.P.A is filed herewith.

(j)      Other Opinions.

(i)      Consent of McCurdy & Associates CPA's, Inc. is filed herewith.

(k)  Omitted Financial Statements.- None.

(l) Initial Capital Agreements. Copy of Letter of Initial Stockholders, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 11, is
hereby incorporated by reference.

(m)   Rule 12b-1 Plan.

(i) Form of Registrant's Rule 12b-1 Service Agreement, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 1, is hereby incorporated
by reference.

(ii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Austin
Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 17, is hereby incorporated by reference.

(iii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Texas
Opportunity Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 17, is hereby incorporated by reference.

(iv) Copy of Registrant's Rule 12b-1 Distribution Plan for the U.S. Opportunity
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
17, is hereby incorporated by reference.

(v) Copy of Registrant's Rule 12b-1 Distribution Plan for the Jumper Strategic
Advantage Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 24, is hereby incorporated by reference.

(vi) Copy of Registrant's Rule 12b-1 Distribution Plan for the Dobson Covered
Call Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 24, is hereby incorporated by reference.

(vii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Ariston
Convertible Securities Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 27, is hereby incorporated by reference.

(viii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Leader
Converted Mutual Bank Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 27, is hereby incorporated by reference.

(ix) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Nothing
But Net Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 28, is hereby incorporated by reference.

(x) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Large-Cap
Fund, which was filed as an Exhibit to Registrant's Post-Effective Amendment No.
28, is hereby incorporated by reference.

(xi) Copy of Registrant's Rule 12b-1 Distribution Plan for the Westcott Fixed
Income Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 28, is hereby incorporated by reference.


(xii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Ariston Internet
Convertible Fund which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 41, is hereby incorporated by reference.

(xiii) Copy of Registrant's Rule 12b-1 Distribution Plan for the Florida Street
Growth Fund is filed herewith.

(xiv) Copy of Registrant's Rule 12b-1 Distribution Plan for the Florida Street
Bond Fund is filed herewith.

(xv) Copy of Registrant's Shareholder Servicing Plan for the Florida Street
Growth Fund is filed herewith.

(xvi) Copy of Registrant's Shareholder Servicing Plan for the Florida Street
Bond Fund is filed herewith.


(n)   Rule 18f-3 Plan.

(i) Rule 18f-3 Plan for the Carl Domino Equity Income Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 16, is hereby
incorporated by reference.

(ii) Rule 18f-3 Plan for the Jumper Strategic Advantage Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 21, is hereby
incorporated by reference.

(iii) Rule 18f-3 Plan for the Westcott Funds, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 28, is hereby incorporated by
reference.


Rule     18f-3 Plan for the Ariston Internet Convertible Fund, which was filed
         as an Exhibit to Registrant's Post-Effective Amendment No. 41, is
         hereby incorporated by reference.

(vi)     Rule 18f-3 Plan for the Florida Street Bond Fund is filed herewith.

(vii) Rule 18f-3 Plan for the Florida Street Growth Fund is filed herewith.

(viii)


(o) Reserved.

(p) Codes of Ethics.

(i) Copy of Registrant's Code of Ethics, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 40, is hereby incorporated by
reference.

(ii) Copy of Registrant's Code of Ethics Type J, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 40, is hereby incorporated by
reference.

(iii) Copy of Registrant's Code of Ethics Type D, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 40, is hereby incorporated by
reference.

(q) Powers of Attorney

(i) Power of Attorney for Registrant and Certificate with respect thereto, which
were filed as an Exhibit to Registrant's Post-Effective Amendment No. 5, are
hereby incorporated by reference.

(ii) Powers of Attorney for Trustees of the Trust, which were filed as an
Exhibit to Registrant's Post-Effective Amendment No. 5, are hereby incorporated
by reference.

(iii) Power of Attorney for the Treasurer and President (and a Trustee) of the
Trust, which was filed as an Exhibit to Registrant's Post-Effective Amendment
No. 35, is hereby incorporated by reference.


Item 24. Persons Controlled by or Under Common Control with the Registrant (As
of March 31, 2000)

(a)  Carl Domino may be deemed to control the Carl Domino Equity Income Fund as
     a result of his beneficial ownership of the Fund (28.15%). Each of Carl
     Domino and Carl Domino Associates, L.P., may be deemed to control the
     Domino Global Equity Income Fund as a result of their respective beneficial
     ownership of the Fund (62.1% and 37.9% respectively). Carl Domino may be
     deemed to control the Domino Growth Fund as a result of his beneficial
     ownership of the Fund (66.36%). Carl Domino controls Carl Domino
     Associates, L. P. (a Florida limited partnership) because he controls the
     general partner. As a result, Carl Domino Associates, L.P., the Domino
     Equity Income Fund, the Domino Growth Fund and the Domino Global Equity
     Income Fund may be deemed to be under the common control of Carl Domino.


Charles L. Dobson, may be deemed to control the Dobson Covered Call Fund as a
result of his beneficial ownership of the Fund (58.54%). Charles L. Dobson
controls Dobson Capital Management, Inc. (a California corporation) because he
owns 100% of its shares. As a result, Dobson Capital Management, Inc. and the
Fund may be deemed to be under the common control of Charles L. Dobson.


J. Jeffrey Auxier may be deemed to control the Auxier Focus Fund as a result of
his beneficial ownership of the Fund (57.44%). J. Jeffrey Auxier controls Auxier
Asset Management, LLC (an Oregon limited liability company) because he owns a
majority of its shares. As a result, Auxier Asset Management, LLC and the Fund
may be deemed to be under the common control of J. Jeffrey Auxier.

(d)  Roger E. King may be deemed to control the Fountainhead Kaleidoscope Fund
     as a result of his beneficial ownership of the Fund (40.45%). Roger E. King
     controls King Investment Advisors, Inc. (a Texas corporation) because he
     owns a majority of its shares. As a result, King Investment Advisors, Inc.
     and the Fund may be deemed to be under the common control of Roger E. King.

(e)  T. Layng Guerriero may be deemed to control the Westcott Nothing But Net
     Fund as a result of his beneficial ownership of the Fund (45.83%). T. Layng
     Guerriero controls Aegis Asset Management, Inc. (a Texas Corporation)
     because he owns a majority of its shares. As a result, Aegis Asset
     Management, Inc. and the Fund may be deemed to be under the common control
     of T. Layng Guerriero.


Item 25. Indemnification

(a)  Article VI of the Registrant's Declaration of Trust provides for
     indemnification of officers and Trustees as follows:

         Section 6.4 Indemnification of Trustees, Officers, etc. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.

         Section 6.5 Advances of Expenses. The Trust shall advance attorneys'
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws,
and not Ohio Revised Code Section 1701.13(E), shall govern.

         Section 6.6 Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.

         The Registrant may not pay for insurance which protects the Trustees
and officers against liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their offices.

(b) The Registrant may maintain a standard mutual fund and investment advisory
professional and directors and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant, its Trustees and officers,
and could cover its Advisers, among others. Coverage under the policy would
include losses by reason of any act, error, omission, misstatement, misleading
statement, neglect or breach of duty.

(c) Pursuant to the Underwriting Agreement, the Trust shall indemnify
Underwriter and each of Underwriter's Employees (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited to amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while serving as the underwriter for the Trust or as
one of Underwriter's Employees, or thereafter, by reason of being or having been
the underwriter for the Trust or one of Underwriter's Employees, including but
not limited to liabilities arising due to any misrepresentation or misstatement
in the Trust's prospectus, other regulatory filings, and amendments thereto, or
in other documents originating from the Trust. In no case shall a Covered Person
be indemnified against any liability to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties of such Covered Person.

(d) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of the Registrant, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Trust in the successful defense of any action, suit or proceeding)
is asserted by such trustee, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.

Item 26. Business and Other Connections of Investment Adviser

A.   Carl Domino Associates, L.P., 580 Village Boulevard, Suite 225, West Palm
     Beach, Florida 33409, ("CDA"), adviser to the Carl Domino Equity Income
     Fund, the Carl Domino Growth Fund and the Carl Domino International Global
     Equity Income Fund, is a registered investment adviser.

(1)      CDA has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
partners and officers of CDA during the past two years.

(a)  Lawrence Katz, a partner in CDA, is an orthopedic surgeon in private
     practice.

(b)  Saltzman Partners, a partner in CDA, is a limited partnership that invests
     in companies and businesses.

(c)  Cango Inversiones, SA, a partner in CDA, is a foreign business entity that
     invests in U.S. companies and businesses.

B.   King Investment Advisors Inc., 1980 Post Oak Boulevard, Suite 2400,
     Houston, Texas 77056-3898 ("King King"), adviser to the Fountainhead
     Special Value Fund and the Fountainhead Kaleidoscope Fund, is a registered
     investment adviser.

(1)  King has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of King during the past two years.

(a)  John Servis, a director of JKA King, is a licensed real estate broker.

C.   GLOBALT, Inc., 3060 Peachtree Road, N.W., One Buckhead Plaza, Suite 225,
     Atlanta, Georgia 30305 ("GLOBALT"), adviser to GLOBALT Growth Fund, is a
     registered investment adviser.

(1)  GLOBALT has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
officers and directors of GLOBALT during the past two years.

(a)  Gregory S. Paulette, an officer of GLOBALT, is the president of GLOBALT
     Capital Management, a division of GLOBALT.

D.   IMS Capital Management, Inc., 10159 S.E. Sunnyside Road, Suite 330,
     Portland, Oregon 97015, ("IMS"), Adviser to the IMS Capital Value Fund, is
     a registered investment adviser.

(1)      IMS has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of IMS during the past two years - None.

E. CommonWealth Advisors, Inc., 929 Government Street, Baton Rouge, Louisiana
70802, ("CommonWealth"), Adviser to the Florida Street Bond Fund and the Florida
Street Growth Fund, is a registered investment adviser.

(1) CommonWealth has engaged in no other business during the past two fiscal
years.

(2) The following list sets forth other substantial business activities of the
directors and officers of CommonWealth during the past two years.

(a) Walter A. Morales, President/Chief Investment Officer of CommonWealth was
the Director of an insurance/broadcasting corporation, Guaranty Corporation, 929
Government Street, Baton Rouge, Louisiana 70802 from August 1994 to February
1996. From September 1994 through the present, a registered representative of a
Broker/Dealer company, Securities Service Network, 2225 Peters Road, Knoxville,
Tennessee 37923. Beginning August 1995 through the present, an instructor at the
University of Southwestern Louisiana in Lafayette, Louisiana.

F. Corbin & Company, 1320 S. University Drive, Suite 406, Fort Worth, Texas
76107, ("Corbin"), Adviser to the Corbin Small-Cap Value Fund, is a registered
investment adviser.

(1) Corbin has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of Corbin during the past two years - None.

G. Spectrum Advisory Services, Inc. ("Spectrum"), 1050 Crown Pointe Parkway,
Suite 950, Atlanta, Georgia 30338, Adviser to the Marathon Value Portfolio, is a
registered investment adviser.

(1) Spectrum has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of Spectrum during the past two years - None.

H. The Jumper Group, Inc., 1 Union Square, Suite 505, Chattanooga, Tennessee
37402, ("Jumper"), Advisor to the Jumper Strategic Advantage Fund, is a
registered investment advisor.

(1) Jumper has engaged in no other business during the past two fiscal years.

(2) The following list set forth other substantial business activities of the
directors and officers of Jumper during the past two years - None.

I. Appalachian Asset Management, Inc., 1018 Kanawha Blvd., East, Suite 209,
Charleston, WV 25301 ("AAM"), advisor to AAM Equity Fund, is a registered
investment advisor.

(1)      AAM has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of AAM during the past two years - None.


J. Martin Capital Advisors, L.L.P. ("Martin"), 816 Congress Avenue, Suite 1540,
Austin, TX 78701 ("Martin"), advisor to Austin Opportunity Fund, Texas
Opportunity Fund, and U.S. Opportunity Fund, is a registered investment advisor.


(1) Martin has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of GJMB during the past two years - None.

K. Gamble, Jones, Morphy & Bent, Inc., 301 East Colorado Boulevard, Suite 802,
Pasadena, California 91101 ("GJMB"), Advisor to the GJMB Fund, is a registered
investment advisor.

(1) GJMB has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of GJMB during the past two years - None.

L. Cornerstone Investment Management, L.L.C. 132 West Main Street, Aspen,
Colorado 81611 ("Cornerstone"), Advisor to the Cornerstone MVP Fund, is a
registered investment advisor.

(1) Cornerstone has engaged in no other business during the past two fiscal
years.

(2) The following list sets forth other substantial business activities of the
directors and officers of Cornerstone during the past two years:

Christopher Shawn Ryan, managing member of Cornerstone, was Vice
President-Portfolio Manager at NationsBank in Dallas, Texas from January 1994 to
October 1997.

M. Dobson Capital Management, Inc., 1422 Van Ness Street., Santa Ana, CA 92707
("Dobson"), Advisor to the Dobson Covered Call Fund, is a registered investment
advisor.

(1) Dobson has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of Dobson during the past two years: Charles L. Dobson,
President of Dobson, was the Director of Trading with Analytic/TSA Global Asset
Management, 700 S. Flower Street, Suite 2400, Los Angeles CA, from 1996 to 1998.

N. Auxier Asset Management, LLC, 8050 S.W. Warm Springs, Suite 130, Tualatin, OR
97062 ("Auxier"), Advisor to the Auxier Focus Fund, is registered investment
advisor.

(1) Auxier has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of Auxier during the past two years: Jeffrey Auxier,
Managing Member of Auxier, was a Senior Portfolio Management Director with Smith
Barney, Inc. until 1998.


O. Shepherd Advisory Services, Inc., 2505 21st Avenue, Suite 204, Nashville,
Tennessee 37212 ("Shepherd"), Adviser to the Shepherd Values Funds, is a
registered investment advisor.

(1) Shepherd has engaged in no other business during the past two fiscal years.

(2) Information with respect to each officer and director of Shepherd is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisors Act (File No. 801-56708).


P. Columbia Partners, L.L.C., Investment Management, 1775 Pennsylvania Avenue,
N.W., Washington, DC 20006 ("Columbia"), Advisor to the Columbia Partners Equity
Fund, is a registered investment advisor.

(1) Columbia has engaged in no other business during the past two fiscal years.

(2) The following list sets forth other substantial business activities of the
directors and officers of Columbia during the past two years:

Rhys H. Williams, a principal of Columbia, has been a portfolio manager at
Columbia since late 1997. Prior to that time, Mr. Williams was the Senior Vice
President at Prudential Securities in Philadelphia, PA since 1987.

Q. Legacy Investment Group, LLC, d/b/a Cash Management Systems, 290 Turnpike
Road, #338, Westborogh, Massachusetts ("CMS), Advisor to The Cash Fund, is a
registered investment advisor.

1. CMS has engaged in no other business during the past two years.

2. The following list sets forth other substantial business activities of the
directors and officers of CMS during the past two years:

David W. Reavill, Member of CMS, was a Vice President with Fixed Income Discount
Advisory Corp., Shrewsbury, MA, a money market firm, from 1997 to 1998 and a
Vice President of Reich & Tang, LLC, Westlake Village, CA, a money market firm,
from 1996 to 1997.

R. Ariston Capital Management Corporation, 40 Lake Bellevue Drive, Suite 220,
Bellevue, Washington 98005 ("Ariston"), Advisor to the Ariston Convertible
Securities Fund and the Ariston Internet Convertible Fund, is a
registered investment advisor.

1. Ariston has engaged in no other business during the past two years.

2. The following list sets forth other substantial business activities of the
directors and officers of Ariston during the past two years: None.

S. Leader Capital Corp., 121 S.W. Morrison St., Ste. 450, Portland, OR 97204
("Leader"), Adviser to the Leader Converted Mutual Bank Fund, is a registered
investment advisor.

1. Leader has engaged in no other business during the past two fiscal years.

2. The following list sets forth other substantial business activities of the
directors and officers of Leader during the past two years:

(a) John Lekas, President of Leader, was a registered representative with Smith
Barney from July 1993 to November 1997.

(b) Jason McMillen, Vice President of Leader, was a research assistant with
Smith Barney from December 1996 to December 1997.

(c) Carey Guenther, Secretary of Leader, was a customer account representative
with Columbia Funds from July 1997 to January, 1998.

T. Aegis Asset Management, Inc. ("Aegis"), 230 Westcott, Suite 1, Houston, Texas
77007, Adviser to Westcott Nothing But Net Fund, Westcott Large-Cap Fund and
Westcott Fixed Income Fund, is a registered investment adviser.

1. Aegis has engaged in no other business during the past two fiscal years.

2. The following list sets forth other substantial business activities of the
directors and officers of Aegis during the past two years:

(a) Thomas Layng Guerriero, President of Aegis, has been the President of
Westcott Securities, L.L.C., a broker/dealer, from April 1998 to the present.


Item 27. Principal Underwriters

A. AmeriPrime Financial Securities, Inc., is the Registrant's principal
underwriter. Kenneth D. Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary and Treasurer of the
underwriter and the President, Treasurer and Secretary and a Trustee of the
Registrant. It is also the underwriter for the AmeriPrime Insurance Trust, the
Kenwood Funds, the Rockland Funds Trust and the TANAKA Funds, Inc. B.
Information with respect to each director and officer of AmeriPrime Financial
Securities, Inc. is incorporated by reference to Schedule A of Form BD filed by
it under the Securities Exchange Act of 1934 (File No. 8-48143). C. Not
applicable.

Item 28. Location of Accounts and Records

         Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder will be maintained by the Registrant at 1793 Kingswood Drive, Suite
200, Southlake, Texas 76092 and/or by the Registrant's Custodians, Firstar Bank,
N.A., 425 Walnut Street, Cincinnati, Ohio 45202, Bank of New York, 1 Wall
Street, New York, NY 10286, and UMB Bank, N.A., Securities Administration Dept.,
928 Grand Blvd., 10th Floor, Kansas City, MO 64106, and/or transfer and
shareholder service agents, American Data Services, Inc., Hauppauge Corporate
Center, 150 Motor Parkway, Hauppauge, New York 11760 and Unified Fund Services,
Inc., 431 Pennsylvania Street, Indianapolis, IN 46204.

Item 29. Management Services Not Discussed in Parts A or B
- -------- -------------------------------------------------

         None.

Item 30. Undertakings

         None.
                                   SIGNATURES


         Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement under Rule
485(b) under the Securities Act and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, duly authorized, in the City of
Cincinnati, State of Ohio, on the 14th day of April, 2000.


                                   AmeriPrime Funds

                                        /s/
                          By: ___________________________________
                                   Donald S. Mendelsohn,
                                   Attorney-in-Fact

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

Kenneth D. Trumpfheller,*
President, Treasurer and Trustee
                                                     /s/
                                     *By: __________________________________
                                                     Donald S. Mendelsohn,
Gary E. Hippensteil,* Trustee                        Attorney-in-Fact


Steve L. Cobb,* Trustee                              April 14, 2000


<PAGE>


                                  EXHIBIT INDEX

1.   Management Agreement for Marathon Value Portfolio..............EX-99.23.d.1
2.   Management Agreement for Shepherd Values Market Neutral Fund...............
     ...............................................................EX-99.23.d.2
3.   Management Agreement for Shepherd Values Growth Fund...........EX-99.23.d.3
4.   Sub-Advisory Agreement for Shepherd Values Market Neutral Fund.............
     ...............................................................EX-99.23.d.4
5.   Sub-Advisory Agreement for Shepherd Values Growth Fund.........EX-99.23.d.5
6.   Consent of Counsel...............................................EX-99.23.i
7.   Consent of Auditors..............................................EX-99.23.j
8.   Rule 12b-1 Distribution Plan for Florida Street Growth Fund....EX-99.23.m.1
9.   Rule 12b-1 Distribution Plan for Florida Street Bond Fund......EX-99.23.m.2
10.  Shareholder Servicing Plan for Florida Street Growth Fund......EX-99.23.m.3
11.  Shareholder Servicing Plan for Florida Street Bond Fund........EX-99.23.m.4
12.  Rule 18f-3 Plan for the Florida Street Bond Fund...............EX-99.23.n.1
13.  Rule 18f-3 Plan for the Florida Street Growth Fund.............EX-99.23.n.2




                              MANAGEMENT AGREEMENT

TO:      Spectrum Advisory Services, Inc.
         1050 Crown Pointe Parkway
         Atlanta, GA 30338

Dear Sirs:

         AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.

         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 Marathon Value Portfolio (the "Fund").

         You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.

         1.       ADVISORY SERVICES

                  You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You 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
objectives, 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. You 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

                  You 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.


<PAGE>


                  The Fund will pay all brokerage fees and commissions, taxes,
borrowing costs (such as divided expense on securities sold short and interest),
fees and expenses of the non-interested person trustees and such extraordinary
or non-recurring expenses as may arise, including 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 ("12b-1 Expenses"). You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.

         3.       COMPENSATION OF THE ADVISER

                  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
Fund will pay you a fee at the annual rate of 1.25% 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, your 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 you 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 you, subject to review of this
selection by the Board from time to time. You 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, you are
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.

                  You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are 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 you determine 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 your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, 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, you 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, you, any of your affiliates or any affiliates of your 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 you give any advice to clients of yours concerning the
shares of the Fund, you will act solely as investment counsel for such client
and not in any way on behalf of the Fund. Your services to the Fund pursuant to
this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.

         5.       LIMITATION OF LIABILITY OF ADVISER

                  You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, 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 your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.

                  Any person, even though also a director, officer, employee,
member, shareholder or agent of you, 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 your duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a director, officer,
employee, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.

         6.       DURATION AND TERMINATION OF THIS AGREEMENT

                  This Agreement shall take effect on the date of its execution,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.

                  If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.

                  This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.

         7.       USE OF NAME

                  The Trust and you acknowledge that all rights to the name
["Spectrum"] or any variation thereof belong to you, 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 you cease to be the adviser to the Fund, the Trust's right to
the use of the name ["Spectrum"] shall automatically cease on the ninetieth day
following the termination of this Agreement. The right to the name may also be
withdrawn by you during the term of this Agreement upon ninety (90) days'
written notice by you to the Trust. Nothing contained herein shall impair or
diminish in any respect, your right to use the name ["Spectrum"] in the name of,
or in connection with, any other business enterprises with which you are or may
become associated. There is no charge to the Trust for the right to use this
name.

         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 you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.


<PAGE>


         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 Stat
of Ohio.

                  (b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.

                  (c) 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 the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.

         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
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 1050 Crown Pointe Parkway, Atlanta, GA 30338.


<PAGE>


         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.

                  If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.

                                           Yours very truly,
ATTEST:

                                           AmeriPrime Funds

By: ___/s/____________________             By: ___/s/_______________________

Name/Title: Monta B. Henry                 Kenneth D. Trumpfheller, President


Dated: March 27, 2000

                                   ACCEPTANCE

         The foregoing Agreement is hereby accepted.

ATTEST:

                                           Spectrum Advisory Services, Inc.

By: ____/s/______________________          By: _/s/________________________

Name/Title: Brenda Dorrien             Name/Title: Marc S. Heilweil, President


Dated: March 22, 2000







11311 02/28/2000 10:02 AM




                              MANAGEMENT AGREEMENT

TO:      Shepherd Advisory Services. Inc.
         2505 21st Avenue South, Suite 204
         Nashville, Tennessee 37212

Dear Sirs:

         AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.

         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 Shepherd Values Market Neutral Fund (the "Fund").

         You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.

         1.       ADVISORY SERVICES

                  You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You 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
objectives, 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. You 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 as it relates to your responsibilities
otherwise provided for in this agreement. You may delegate any or all of the
responsibilities, rights or duties described in this paragraph 1 to one or more
sub-advisers who shall enter into agreements with you, which agreements shall be
approved and ratified by the Board including a majority of the trustees who are
not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the Fund.

         2.       ALLOCATION OF CHARGES AND EXPENSES

                  You 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 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 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. You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.

         3.       COMPENSATION OF THE ADVISER

                  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
Fund will pay you a fee at the annual rate of 2.25% 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, your 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 you 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 you, subject to review of this
selection by the Board from time to time. You 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, you are
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.

                  You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are 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 you determine 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 your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, 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, you 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, you, any of your affiliates or any affiliates of your 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 you give any advice to clients of yours concerning the
shares of the Fund, you will act solely as investment counsel for such client
and not in any way on behalf of the Fund. Your services to the Fund pursuant to
this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.

         5.       LIMITATION OF LIABILITY OF ADVISER

                  You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, 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 your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.

                  Any person, even though also a director, officer, employee,
member, shareholder or agent of you, 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 your duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a director, officer,
employee, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.

         6.       DURATION AND TERMINATION OF THIS AGREEMENT

                  This Agreement shall take effect on the date of its execution,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.

                  If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.

                  This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.

         7.       USE OF NAME

                  The Trust and you acknowledge that all rights to the name
"Shepherd Values" or any variation thereof belong to you, 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 you cease to be the adviser to the Fund, 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 you during the term of this Agreement upon ninety (90)
days' written notice by you to the Trust. Nothing contained herein shall impair
or diminish in any respect, your right to use the name "Shepherd Values" in the
name of, or in connection with, any other business enterprises with which you
are or may become associated. There is no charge to the Trust for the right to
use this name.

         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 you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.


<PAGE>


         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) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.

                  (c) 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 the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.

         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
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 2505 21st Avenue South, Suite 204, Nashville, Tennessee
37212.


<PAGE>


         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.

                  If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.

                                               Yours very truly,
ATTEST:

                                                 AmeriPrime Funds

By:      __/s/________________________     By:      ___/s/______________________


Name/Title:  Monta B. Henry                  Kenneth D. Trumpfheller, President

Dated: January 20, 2000

                                   ACCEPTANCE

         The foregoing Agreement is hereby accepted.

ATTEST:

                                              Shepherd Advisory Services, Inc.

By:      ____________________________   By:      ___/s/______________________


Name/Title:  ________________________  Name/Title:  Stephen R. Bolt, President

Dated: January 20, 2000

6704


                              MANAGEMENT AGREEMENT

TO:      Shepherd Advisory Services, Inc.
         2505 21st Avenue South, Suite 204
         Nashville, Tennessee 37212

Dear Sirs:

         AmeriPrime Funds (the "Trust") herewith confirms our agreement with
you.

         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 "Shepherd Values Growth Fund" (the "Fund").

         You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.

         1.       ADVISORY SERVICES

                  You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You 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
objectives, 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. You 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

                  You 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 brokerage fees and commissions, taxes,
borrowing costs (such as (a) interest and (b) dividend expense on securities
sold short), fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including 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. You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.

         3.       COMPENSATION OF THE ADVISER

                  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
Fund will pay you a fee at the annual rate of 1.75% 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, your 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 you 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 you, subject to review of this
selection by the Board from time to time. You 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, you are
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.

                  You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are 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 you determine 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 your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, 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, you 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, you, any of your affiliates or any affiliates of your 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 you give any advice to clients of yours concerning the
shares of the Fund, you will act solely as investment counsel for such client
and not in any way on behalf of the Fund. Your services to the Fund pursuant to
this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.

         5.       LIMITATION OF LIABILITY OF ADVISER

                  You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, 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 your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.

                  Any person, even though also a director, officer, employee,
member, shareholder or agent of you, 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 your duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a director, officer,
employee, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.

         6.       DURATION AND TERMINATION OF THIS AGREEMENT

                  This Agreement shall take effect on the date of its execution,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.

                  If the shareholders of the Fund fail to approve the Agreement
in the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.

                  This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.

         7.       USE OF NAME

                  The Trust and you acknowledge that all rights to the name
"Shepherd Values" or any variation thereof belong to you, 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 you cease to be the adviser to the Fund, 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 you during the term of this Agreement upon ninety (90)
days' written notice by you to the Trust. Nothing contained herein shall impair
or diminish in any respect, your right to use the name "Shepherd Values" in the
name of, or in connection with, any other business enterprises with which you
are or may become associated. There is no charge to the Trust for the right to
use this name.

         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 you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) 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) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.

                  (c) 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 the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.

         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
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092, and your address for
this purpose shall be 2505 21st Avenue South, Suite 204, Nashville, Tennessee
37212.

         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.

                  If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.

                                               Yours very truly,
ATTEST:

                                                AmeriPrime Funds

By:      _____/s/____________________   By:      _____/s/____________________
Name/Title:  Monta B. Henry             Name/Title:  Kenneth D. Trumpfheller
                                                   President

Dated: January 20, 2000
                                   ACCEPTANCE

         The foregoing Agreement is hereby accepted.

ATTEST:

                                             Shepherd Advisory Services, Inc.

By:      ___________________________          By:__/s/__________________
Name/Title:       __________________          Stephen R. Bolt
                  _____________________       President

Dated:  January 20, 2000

6707


                                 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:
                               - - - - - - - - -

         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;

9919 10/6/99  4:07 PM


<PAGE>


         (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 1940 Act) 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 1940 Act) 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 1940 Act) 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
1940 Act) 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 1940 Act) 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 1940
Act) 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) 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 102 South
Tejon, Suite 430, Colorado Springs, CO 80903, and to the Adviser at 2505 21st
Avenue South, Suite 204, Nashville, Tennessee 37212, 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: Stephen R. Bolt                     Name: Jason D. Huntley

Title: President                         Title: President




                                 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:

         WHEREAS, the Adviser acts as the investment adviser to the Shepherd
Values Growth 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;

9914 10/6/99  3:24 PM


<PAGE>


         (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 1940 Act) 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 .50% 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 1940 Act) 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 1940 Act) 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
1940 Act) 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 1940 Act) 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 1940
Act) 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) 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 102 South
Tejon, Suite 430, Colorado Springs, CO 80903, and to the Adviser at 2505 21st
Avenue South, Suite 204, Nashville, Tennessee 37212, 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: Stephen R. Bolt                          Name: Jason D. Huntley

Title: President and CEO                       Title: President







J. W. BROWN (1911-1995)   BROWN, CUMMINS & BROWN CO., L.P.A.  JOANN M. STRASSER
JAMES R. CUMMINS           ATTORNEYS AND COUNSELORS AT LAW  AARON A. VANDERLAAN
ROBERT S BROWN                     3500 CAREW TOWER
DONALD S. MENDELSOHN               441 VINE STREET                OF COUNSEL
LYNNE SKILKEN                  CINCINNATI, OHIO 45202          GILBERT BETTMAN
AMY G. APPLEGATE              TELEPHONE (513) 381-2121            (1917 - 2000)
KATHRYN KNUE PRZYWARA         TELECOPIER (513) 381-2125
MELANIE S. CORWIN






                                                      April 14, 2000


AmeriPrime Funds
1793 Kingswood Drive, Suite 200
Southlake, Texas  76092

         RE: AMERIPRIME FUNDS, FILE NOS. 33-96826 AND 811-9096

Gentlemen:

         Legal opinions that we prepared were filed with Post-Effective
Amendment No. 9 and Post-Effective Amendment No. 29 (the "Legal Opinions") to
the Registration Statement. We hereby give you our consent to incorporate by
reference the Legal Opinions into Post-Effective Amendment No. 42 to your
Registration Statement (the "Amendment"), and consent to all references to us in
the Amendment.

                                                     Very truly yours,


                                               /s/

                                          BROWN, CUMMINS & BROWN CO., L.P.A.

cc. Keith Gregory






                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated November 21, 1999 for the Florida Street Bond Fund and the Florida Street
Growth Fund and to all references to our firm included in or made a part of this
Post-Effective Amendment No. 42 to AmeriPrime Fund's Registration Statement on
Form N-1A (file No. 33-96826), including the references to our firm under the
heading "Financial Highlights" in the Prospectus and heading "Accountants" in
the Statement of Additional Information.

/s/
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
April 14, 2000




                           FLORIDA STREET GROWTH FUND

                              PLAN OF DISTRIBUTION

                             PURSUANT TO RULE 12B-1

         WHEREAS, AmeriPrime Funds, an Ohio business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and

         WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which may be divided
into one or more series of Shares ("Series"); and

         WHEREAS, the Trust currently offers several Series, one of which is the
Florida Street Growth Fund (the "Fund"); and

         WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Disinterested Trustees"), having determined, in
the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Section 36(a) and (b) of the 1940 Act, that
there is a reasonable likelihood that this Plan will benefit the Fund and its
shareholders, have approved this Plan, with respect to certain classes of shares
("Classes") of the Fund set forth in exhibits hereto, by votes cast in person at
a meeting called for the purpose of voting hereon and on any agreements related
hereto;

      NOW THEREFORE, the Trust hereby adopts this Plan for the Fund, in
accordance with Rule 12b-1 under the 1940 Act, on the following terms and
conditions:

     1.   Distribution Activities. Subject to the supervision of the Trustees of
          the Trust, the Trust may, directly or indirectly, engage in any
          activities related to the distribution of the Shares of the Fund,
          which activities may include, but are not limited to, the following:
          (a) payments, including incentive compensation, to securities dealers
          or other financial intermediaries, financial institutions, investment
          advisors and others that are engaged in the sale of Fund Shares, or
          that may be advising shareholders of the Fund regarding the purchase,
          sale or retention of Shares; (b) expenses of maintaining personnel
          (including personnel of organizations with which the Trust has entered
          into agreements related to this Plan) who engage in or support
          distribution of Fund Shares; (c) costs of preparing, printing and
          distributing prospectuses and statements of additional information and
          reports of the Fund for recipients other than existing shareholders of
          the Fund; (d) costs of formulating and implementing marketing and
          promotional activities, including, but not limited to, sales seminars,
          direct mail promotions and television, radio, newspaper, magazine and
          other mass media advertising; (e) costs of preparing, printing and
          distributing sales literature; (f) costs of obtaining such
          information, analyses and reports with respect to marketing and
          promotional activities as the Trust may, from time to time, deem
          advisable; and (g) costs of implementing and operating this Plan. The
          Trust is authorized to engage in the activities listed above, and in
          any other activities related to the distribution of Fund Shares,
          either directly or through other persons with which the Trust has
          entered into agreements related to this Plan.

     2.   Annual Fee. The Fund will pay the Fund's investment adviser ("the
          Adviser") an annual fee for the Adviser's services in connection with
          the sales and promotion of the Fund, including its expenses in
          connection therewith (collectively, "Distribution Expenses"). The
          annual fee paid to the Adviser under this Plan will be calculated
          daily and paid monthly by the Fund on the first day of each month at
          an annual rate of 0.75% of the average daily net assets of the Fund.
          Payments received by the Adviser pursuant to this Plan are in addition
          to fees paid by the Fund pursuant to the Management Agreement.

     3.   Term and Termination. a. This Plan shall become effective (i) after
          approval by majority votes of: (a) the Trust's Board of Trustees; and
          (b) the Disinterested Trustees, cast in person at a meeting called for
          the purpose of voting on the Plan; and (ii) upon execution of an
          exhibit adopting this Plan.

                  b. This Plan shall remain in effect with respect to each Class
                  presently set forth on an exhibit and any subsequent Classes
                  added pursuant to an exhibit during the initial year of this
                  Plan for the period of one year from the date determined
                  pursuant to paragraph 3(a) above and may be continued
                  thereafter if this Plan is approved with respect to each Class
                  at least annually by a majority of the Trust's Board of
                  Trustees and a majority of the Disinterested Trustees, cast in
                  person at a meeting called for the purpose of voting on such
                  Plan. If this Plan is adopted with respect to a Class after
                  the first annual approval by the Trustees as described above,
                  this Plan will be effective as to that Class upon execution of
                  the applicable exhibit pursuant to the provisions of paragraph
                  3(a) above and will continue in effect until the next annual
                  approval of this Plan by the Trustees and thereafter for
                  successive periods of one year subject to approval as
                  described above.

                  c. This Plan may be terminated at any time as to any Class by
                  the vote of a majority of the Disinterested Trustees or by
                  vote of a majority of the outstanding voting securities (as
                  defined in the 1940 Act) of the Fund. If this Plan is
                  terminated, the Fund will not be required to make any payments
                  for expenses incurred after the date of termination.

      4.          Amendments. All material amendments to this Plan must be
                  approved in the manner provided for annual renewal of this
                  Plan in Section 3(b) hereof. In addition, this Plan may not be
                  amended to increase materially the amount of expenditures
                  provided for in Section 2 hereof unless such amendment is
                  approved by a vote of the majority of the outstanding voting
                  securities of the Fund (as defined in the 1940 Act).

          5.   Selection and Nomination of Trustees. While this Plan is in
               effect, the selection and nomination of Trustees who are not
               interested persons (as defined in the 1940 Act) of the Trust
               shall be committed to the discretion of the Trustees who are not
               interested persons of the Trust.

          6.   Quarterly Reports. The Treasurer of the Trust shall provide to
               the Trustees and the Trustees shall review, at least quarterly, a
               written report of the amounts expended pursuant to this Plan and
               any related agreement and the purposes for which such
               expenditures were made.

      7.          Recordkeeping. The Trust shall preserve copies of this Plan
                  and any related agreement and all reports made pursuant to
                  Section 6 hereof, for a period of not less than six years from
                  the date of this Plan, the agreements or such reports, as the
                  case may be, the first two years in an easily accessible
                  place.

       8.        Limitation of Liability. A copy of the Agreement and
                 Declaration of Trust of the Trust is on file with the Secretary
                 of the State of Ohio and notice is hereby given that this Plan
                 is executed on behalf of the Trustees of the Trust as trustees
                 and not individually and that the obligations of this
                 instrument are not binding upon the Trustees, the shareholders
                 of the Trust individually or the assets or property of any
                 other series of the Trust, but are binding only upon the assets
                 and property of the Fund.

9759 03/10/2000 10:52 AM


<PAGE>


                                   Exhibit to

                           FLORIDA STREET GROWTH FUND

                              PLAN OF DISTRIBUTION

                             PURSUANT TO RULE 12B-1

The Plan has been adopted with respect to the following Classes:

                                     Class C Shares

                                AmeriPrime Funds

Dated: January 28, 2000                 By: ___/s/___________________
                                         Kenneth Trumpfheller, President





                            FLORIDA STREET BOND FUND

                              PLAN OF DISTRIBUTION

                             PURSUANT TO RULE 12B-1

         WHEREAS, AmeriPrime Funds, an Ohio business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and

         WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which may be divided
into one or more series of Shares ("Series"); and

         WHEREAS, the Trust currently offers several Series, one of which is the
Florida Street Bond Fund (the "Fund"); and

         WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Disinterested Trustees"), having determined, in
the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Section 36(a) and (b) of the 1940 Act, that
there is a reasonable likelihood that this Plan will benefit the Fund and its
shareholders, have approved this Plan, with respect to certain classes of shares
("Classes") of the Fund set forth in exhibits hereto, by votes cast in person at
a meeting called for the purpose of voting hereon and on any agreements related
hereto;

      NOW THEREFORE, the Trust hereby adopts this Plan for the Fund, in
accordance with Rule 12b-1 under the 1940 Act, on the following terms and
conditions:

          1.   Distribution Activities. Subject to the supervision of the
               Trustees of the Trust, the Trust may, directly or indirectly,
               engage in any activities related to the distribution of the
               Shares of the Fund, which activities may include, but are not
               limited to, the following: (a) payments, including incentive
               compensation, to securities dealers or other financial
               intermediaries, financial institutions, investment advisors and
               others that are engaged in the sale of Fund Shares, or that may
               be advising shareholders of the Fund regarding the purchase, sale
               or retention of Shares; (b) expenses of maintaining personnel
               (including personnel of organizations with which the Trust has
               entered into agreements related to this Plan) who engage in or
               support distribution of Fund Shares; (c) costs of preparing,
               printing and distributing prospectuses and statements of
               additional information and reports of the Fund for recipients
               other than existing shareholders of the Fund; (d) costs of
               formulating and implementing marketing and promotional
               activities, including, but not limited to, sales seminars, direct
               mail promotions and television, radio, newspaper, magazine and
               other mass media advertising; (e) costs of preparing, printing
               and distributing sales literature; (f) costs of obtaining such
               information, analyses and reports with respect to marketing and
               promotional activities as the Trust may, from time to time, deem
               advisable; and (g) costs of implementing and operating this Plan.
               The Trust is authorized to engage in the activities listed above,
               and in any other activities related to the distribution of Fund
               Shares, either directly or through other persons with which the
               Trust has entered into agreements related to this Plan.

      2.          Annual Fee. The Fund will pay the Fund's investment adviser
                  ("the Adviser") an annual fee for the Adviser's services in
                  connection with the sales and promotion of the Fund, including
                  its expenses in connection therewith (collectively,
                  "Distribution Expenses"). The annual fee paid to the Adviser
                  under this Plan will be calculated daily and paid monthly by
                  the Fund on the first day of each month at an annual rate of
                  0.75% of the average daily net assets of the Fund. Payments
                  received by the Adviser pursuant to this Plan are in addition
                  to fees paid by the Fund pursuant to the Management Agreement.

          4.   Term and Termination. a. This Plan shall become effective (i)
               after approval by majority votes of: (a) the Trust's Board of
               Trustees; and (b) the Disinterested Trustees, cast in person at a
               meeting called for the purpose of voting on the Plan; and (ii)
               upon execution of an exhibit adopting this Plan.

                  b. This Plan shall remain in effect with respect to each Class
                  presently set forth on an exhibit and any subsequent Classes
                  added pursuant to an exhibit during the initial year of this
                  Plan for the period of one year from the date determined
                  pursuant to paragraph 3(a) above and may be continued
                  thereafter if this Plan is approved with respect to each Class
                  at least annually by a majority of the Trust's Board of
                  Trustees and a majority of the Disinterested Trustees, cast in
                  person at a meeting called for the purpose of voting on such
                  Plan. If this Plan is adopted with respect to a Class after
                  the first annual approval by the Trustees as described above,
                  this Plan will be effective as to that Class upon execution of
                  the applicable exhibit pursuant to the provisions of paragraph
                  3(a) above and will continue in effect until the next annual
                  approval of this Plan by the Trustees and thereafter for
                  successive periods of one year subject to approval as
                  described above.

                  c. This Plan may be terminated at any time as to any Class by
                  the vote of a majority of the Disinterested Trustees or by
                  vote of a majority of the outstanding voting securities (as
                  defined in the 1940 Act) of the Fund. If this Plan is
                  terminated, the Fund will not be required to make any payments
                  for expenses incurred after the date of termination.

      4.          Amendments. All material amendments to this Plan must be
                  approved in the manner provided for annual renewal of this
                  Plan in Section 3(b) hereof. In addition, this Plan may not be
                  amended to increase materially the amount of expenditures
                  provided for in Section 2 hereof unless such amendment is
                  approved by a vote of the majority of the outstanding voting
                  securities of the Fund (as defined in the 1940 Act).

          5.   Selection and Nomination of Trustees. While this Plan is in
               effect, the selection and nomination of Trustees who are not
               interested persons (as defined in the 1940 Act) of the Trust
               shall be committed to the discretion of the Trustees who are not
               interested persons of the Trust.

          6.   Quarterly Reports. The Treasurer of the Trust shall provide to
               the Trustees and the Trustees shall review, at least quarterly, a
               written report of the amounts expended pursuant to this Plan and
               any related agreement and the purposes for which such
               expenditures were made.

      7.          Recordkeeping. The Trust shall preserve copies of this Plan
                  and any related agreement and all reports made pursuant to
                  Section 6 hereof, for a period of not less than six years from
                  the date of this Plan, the agreements or such reports, as the
                  case may be, the first two years in an easily accessible
                  place.

       8.        Limitation of Liability. A copy of the Agreement and
                 Declaration of Trust of the Trust is on file with the Secretary
                 of the State of Ohio and notice is hereby given that this Plan
                 is executed on behalf of the Trustees of the Trust as trustees
                 and not individually and that the obligations of this
                 instrument are not binding upon the Trustees, the shareholders
                 of the Trust individually or the assets or property of any
                 other series of the Trust, but are binding only upon the assets
                 and property of the Fund.

9759 03/10/2000 10:52 AM


<PAGE>


                                   Exhibit to

                            FLORIDA STREET BOND FUND

                              PLAN OF DISTRIBUTION

                             PURSUANT TO RULE 12B-1

The Plan has been adopted with respect to the following Classes:

                                     Class C Shares

                                AmeriPrime Funds

Dated: January 28, 2000               By: _____/s/________________
                                      Kenneth Trumpfheller, President


                           FLORIDA STREET GROWTH FUND

                           SHAREHOLDER SERVICING PLAN

         WHEREAS, AmeriPrime Funds, an Ohio business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and

         WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which may be divided
into one or more series of Shares ("Series"); and

         WHEREAS, the Trust currently offers several Series, one of which is the
Florida Street Growth Fund (the "Fund"); and

         WHEREAS, the Trustees of the Trust have approved this Plan, with
respect to certain classes of shares ("Classes") of the Fund set forth in
exhibits hereto, in order that the Fund may make payments to obtain certain
personal services for shareholders and/or the maintenance of shareholder
accounts;

      NOW THEREFORE, the Trust hereby adopts this Plan for the Fund, on the
following terms and conditions:

1.   Shareholder Servicing. Subject to the supervision of the Trustees of the
     Trust, the Fund may incur expenses for payments made to securities dealers
     or other financial intermediaries, financial institutions, investment
     advisors and others ("Providers") that (a) hold Shares of the Fund for
     shareholders in omnibus accounts or as shareholders of record or provide
     shareholder support or administrative services to the Fund and its
     shareholders or (b) render shareholder support services, including, but not
     limited to, allocated overhead, office space and equipment, telephone
     facilities and expenses, answering routine inquiries regarding the Trust,
     processing shareholder transactions, and providing such other shareholder
     services as the Trust may reasonably request. The fees for the above
     described services are intended to be "service fees" for purposes of
     Section 26(d) of the Rules of Fair Practice of the NASD. If the NASD (or
     any successor to such rule) adopts a definition of "service fees" that
     differs from the definition of service fees hereunder, the definition of
     service fees hereunder shall be automatically amended, without further
     action of the parties, to conform to such NASD definition.

2.   Payments. The Fund shall pay the Fund's adviser (the "Adviser") a monthly
     fee computed at an annual rate not to exceed 0.25% of the average daily net
     asset value of the Fund for payments made to Providers. Payments received
     by the Adviser pursuant to this Plan are in addition to fees paid by the
     Fund pursuant to the Management Agreement. Any payments made by the Adviser
     to a Provider pursuant to this Plan will be made in accordance with a
     "Shareholder Services Agreement" entered into by the Provider and the Trust
     on behalf of the Fund.

3.       Term and Termination.

(a)  This Plan shall become effective (i) after approval by majority votes of:
     (a) the Trust's Board of Trustees; and (b) the members of the Board of the
     Trust who are not interested persons of the Trust and have no direct or
     indirect financial interest in the operation of the Plan or in any related
     documents to the Plan ("Disinterested Trustees"), cast in person at a
     meeting called for the purpose of voting on the Plan; and (ii) upon
     execution of an exhibit adopting this Plan.

(b)  This Plan shall remain in effect with respect to each Class presently set
     forth on an exhibit and any subsequent Classes added pursuant to an exhibit
     during the initial year of this Plan for the period of one year from the
     date determined pursuant to paragraph 3(a) above and may be continued
     thereafter if this Plan is approved with respect to each Class at least
     annually by a majority of the Trust's Board of Trustees and a majority of
     the Disinterested Trustees, cast in person at a meeting called for the
     purpose of voting on such Plan. If this Plan is adopted with respect to a
     Class after the first annual approval by the Trustees as described above,
     this Plan will be effective as to that Class upon execution of the
     applicable exhibit pursuant to the provisions of paragraph 3(a) above and
     will continue in effect until the next annual approval of this Plan by the
     Trustees and thereafter for successive periods of one year subject to
     approval as described above.

(c)  This Plan may be terminated at any time as to any Class by the vote of a
     majority of the Disinterested Trustees or by vote of a majority of the
     outstanding voting securities (as defined in the 1940 Act) of the Class. If
     this Plan is terminated, the Fund will not be required to make any payments
     for expenses incurred after the date of termination.

4.   Amendments. All material amendments to this Plan must be approved in the
     manner provided for annual renewal of this Plan in Section 3(b) hereof.

5.   Selection and Nomination of Trustees. While this Plan is in effect, the
     selection and nomination of Trustees who are not interested persons (as
     defined in the 1940 Act) of the Trust shall be committed to the discretion
     of the Trustees who are not interested persons of the Trust.

6.   Quarterly Reports. The Treasurer of the Trust shall provide to the Trustees
     and the Trustees shall review, at least quarterly, a written report of the
     amounts expended pursuant to this Plan and any related agreement and the
     purposes for which such expenditures were made.

7.   Recordkeeping. The Trust shall preserve copies of this Plan and any related
     agreement and all reports made pursuant to Section 6 hereof, for a period
     of not less than six years from the date of this Plan, the agreements or
     such reports, as the case may be, the first two years in an easily
     accessible place.

8.   Limitation of Liability. A copy of the Agreement and Declaration of Trust
     of the Trust is on file with the Secretary of the State of Ohio and notice
     is hereby given that this Plan is executed on behalf of the Trustees of the
     Trust as trustees and not individually and that the obligations of this
     instrument are not binding upon the Trustees, the shareholders of the Trust
     individually or the assets or property of any other series of the Trust,
     but are binding only upon the assets and property of the Fund.


<PAGE>


                                   Exhibit to

                           FLORIDA STREET GROWTH FUND

                           SHAREHOLDER SERVICING PLAN

The Plan has been adopted with respect to the following Classes:

                                     Class C Shares

                                           AmeriPrime Funds

Dated: January 28, 2000                    By:      /s/
                                                         --------
                                          Kenneth Trumpfheller, President






                            FLORIDA STREET BOND FUND

                           SHAREHOLDER SERVICING PLAN

         WHEREAS, AmeriPrime Funds, an Ohio business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and

         WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which may be divided
into one or more series of Shares ("Series"); and

         WHEREAS, the Trust currently offers several Series, one of which is the
Florida Street Bond Fund (the "Fund"); and

         WHEREAS, the Trustees of the Trust have approved this Plan, with
respect to certain classes of shares ("Classes") of the Fund set forth in
exhibits hereto, in order that the Fund may make payments to obtain certain
personal services for shareholders and/or the maintenance of shareholder
accounts;

      NOW THEREFORE, the Trust hereby adopts this Plan for the Fund, on the
following terms and conditions:

4.   Shareholder Servicing. Subject to the supervision of the Trustees of the
     Trust, the Fund may incur expenses for payments made to securities dealers
     or other financial intermediaries, financial institutions, investment
     advisors and others ("Providers") that (a) hold Shares of the Fund for
     shareholders in omnibus accounts or as shareholders of record or provide
     shareholder support or administrative services to the Fund and its
     shareholders or (b) render shareholder support services, including, but not
     limited to, allocated overhead, office space and equipment, telephone
     facilities and expenses, answering routine inquiries regarding the Trust,
     processing shareholder transactions, and providing such other shareholder
     services as the Trust may reasonably request. The fees for the above
     described services are intended to be "service fees" for purposes of
     Section 26(d) of the Rules of Fair Practice of the NASD. If the NASD (or
     any successor to such rule) adopts a definition of "service fees" that
     differs from the definition of service fees hereunder, the definition of
     service fees hereunder shall be automatically amended, without further
     action of the parties, to conform to such NASD definition.

5.   Payments. The Fund shall pay the Fund's adviser (the "Adviser") a monthly
     fee computed at an annual rate not to exceed 0.25% of the average daily net
     asset value of the Fund for payments made to Providers. Payments received
     by the Adviser pursuant to this Plan are in addition to fees paid by the
     Fund pursuant to the Management Agreement. Any payments made by the Adviser
     to a Provider pursuant to this Plan will be made in accordance with a
     "Shareholder Services Agreement" entered into by the Provider and the Trust
     on behalf of the Fund.

6.       Term and Termination.

                  (a) This Plan shall become effective (i) after approval by
                  majority votes of: (a) the Trust's Board of Trustees; and (b)
                  the members of the Board of the Trust who are not interested
                  persons of the Trust and have no direct or indirect financial
                  interest in the operation of the Plan or in any related
                  documents to the Plan ("Disinterested Trustees"), cast in
                  person at a meeting called for the purpose of voting on the
                  Plan; and (ii) upon execution of an exhibit adopting this
                  Plan.

                  (b) This Plan shall remain in effect with respect to each
                  Class presently set forth on an exhibit and any subsequent
                  Classes added pursuant to an exhibit during the initial year
                  of this Plan for the period of one year from the date
                  determined pursuant to paragraph 3(a) above and may be
                  continued thereafter if this Plan is approved with respect to
                  each Class at least annually by a majority of the Trust's
                  Board of Trustees and a majority of the Disinterested
                  Trustees, cast in person at a meeting called for the purpose
                  of voting on such Plan. If this Plan is adopted with respect
                  to a Class after the first annual approval by the Trustees as
                  described above, this Plan will be effective as to that Class
                  upon execution of the applicable exhibit pursuant to the
                  provisions of paragraph 3(a) above and will continue in effect
                  until the next annual approval of this Plan by the Trustees
                  and thereafter for successive periods of one year subject to
                  approval as described above.

                  (c) This Plan may be terminated at any time as to any Class by
                  the vote of a majority of the Disinterested Trustees or by
                  vote of a majority of the outstanding voting securities (as
                  defined in the 1940 Act) of the Class. If this Plan is
                  terminated, the Fund will not be required to make any payments
                  for expenses incurred after the date of termination.

4.   Amendments. All material amendments to this Plan must be approved in the
     manner provided for annual renewal of this Plan in Section 3(b) hereof.

5.   Selection and Nomination of Trustees. While this Plan is in effect, the
     selection and nomination of Trustees who are not interested persons (as
     defined in the 1940 Act) of the Trust shall be committed to the discretion
     of the Trustees who are not interested persons of the Trust.

6.   Quarterly Reports. The Treasurer of the Trust shall provide to the Trustees
     and the Trustees shall review, at least quarterly, a written report of the
     amounts expended pursuant to this Plan and any related agreement and the
     purposes for which such expenditures were made.

7.   Recordkeeping. The Trust shall preserve copies of this Plan and any related
     agreement and all reports made pursuant to Section 6 hereof, for a period
     of not less than six years from the date of this Plan, the agreements or
     such reports, as the case may be, the first two years in an easily
     accessible place.

8.   Limitation of Liability. A copy of the Agreement and Declaration of Trust
     of the Trust is on file with the Secretary of the State of Ohio and notice
     is hereby given that this Plan is executed on behalf of the Trustees of the
     Trust as trustees and not individually and that the obligations of this
     instrument are not binding upon the Trustees, the shareholders of the Trust
     individually or the assets or property of any other series of the Trust,
     but are binding only upon the assets and property of the Fund.


<PAGE>


                                   Exhibit to

                            FLORIDA STREET BOND FUND

                           SHAREHOLDER SERVICING PLAN

The Plan has been adopted with respect to the following Classes:

                                     Class C Shares

                                            AmeriPrime Funds

Dated: January 28, 2000                    By:      /s/
                                                 --------
                                             Kenneth Trumpfheller, President

9760 03/10/2000 10:51 AM




                                AMERIPRIME FUNDS

                   MULTIPLE CLASS PLAN PURSUANT TO RULE 18F-3

                        FOR THE FLORIDA STREET BOND FUND

         This Multiple Class Plan (the "Plan") is adopted in accordance with
Rule 18f-3 (the "Rule") under the Investment Company Act of 1940, as amended
(the "Act") by the AmeriPrime Funds (the "Trust") on behalf of Florida Street
Bond Fund (the "Fund"), a series of the Trust. A majority of the Trustees,
including a majority of the Trustees who are not interested persons of the Trust
(as defined in the Act), having determined that the Plan is in the best
interests of each class of the Fund individually, the Fund and the Trust as a
whole, have approved the Plan.

         The provisions of the Plan are:

1.   General Description Of Classes. Each class of shares of the Fund shall
     represent interests in the same portfolio of investments of the Fund. There
     currently are two classes designated: Class C and Institutional Class.

                  a.       Class C shares of the Fund are offered and sold at
                           net asset value without an initial sales charge or
                           contingent deferred sales charge. Class C shares are
                           subject to a (i) 12b-1 fee at a maximum annual rate
                           of 0.75% of Class C assets, and (ii) a service fee at
                           a maximum annual rate of 0.25% of Class C assets.

                  b.       Institutional Class shares are offered and sold at
                           net asset value without an initial sales charge or
                           contingent deferred sales charge. Institutional Class
                           shares are not subject to a 12b-1 fee.

2.   Expense Allocations To Each Class.

     a.   Certain expenses may be attributable to a particular class of shares
          of the Fund ("Class Expenses"). Class Expenses are charged directly to
          net assets of the class to which the expense is attributed and are
          borne on a pro rata basis by the outstanding shares of that class.
          Class Expenses may include:

          (i)  expenses incurred in connection with a meeting of shareholders;

          (ii) litigation expenses;

          (iii) printing and postage expenses of shareholders reports,
               prospectuses and proxies to current shareholders of a specific
               class;

          (iv) expenses of administrative personnel and services required to
               support the shareholders of a specific class;

          (v)  transfer agent fees and shareholder servicing expenses; and

          (vi) such other expenses incurred by or attributable to a specific
               class.


                  b.       All other expenses of the Fund are allocated to each
                           class on the basis of the net asset value of that
                           class in relation to the net asset value of the Fund.
                           Notwithstanding the foregoing, the distributor or
                           adviser of the Fund may waive or reimburse the
                           expenses of a specific class or classes to the extent
                           permitted under the Rule.

3.   Class Designation. Subject to the approval by the Trustees of the Trust,
     the Fund may alter the nomenclature for the designations of one or more of
     its classes of shares.

4.   Additional Information. This plan is qualified by and subject to the terms
     of the then current Prospectus for the applicable class of shares;
     provided, however, that none of the terms set forth in any such Prospectus
     shall be inconsistent with the terms of this Plan. The Prospectus for each
     class contains additional information about the class and the Fund's
     multiple class structure.

5.   Effective Date. This Plan shall become effective the day before the first
     issuance of Class C Shares. This Plan may be terminated or amended at any
     time by a majority of the Trustees, including a majority of the Trustees
     who are not interested persons of the Trust (as defined in the Act).








                                AMERIPRIME FUNDS

                   MULTIPLE CLASS PLAN PURSUANT TO RULE 18F-3

                       FOR THE FLORIDA STREET GROWTH FUND

         This Multiple Class Plan (the "Plan") is adopted in accordance with
Rule 18f-3 (the "Rule") under the Investment Company Act of 1940, as amended
(the "Act") by the AmeriPrime Funds (the "Trust") on behalf of Florida Street
Growth Fund (the "Fund"), a series of the Trust. A majority of the Trustees,
including a majority of the Trustees who are not interested persons of the Trust
(as defined in the Act), having determined that the Plan is in the best
interests of each class of the Fund individually, the Fund and the Trust as a
whole, have approved the Plan.

         The provisions of the Plan are:

     1.   General Description Of Classes. Each class of shares of the Fund shall
          represent interests in the same portfolio of investments of the Fund.
          There currently are two classes designated: Class C and Institutional
          Class.

                  a.       Class C shares of the Fund are offered and sold at
                           net asset value without an initial sales charge or
                           contingent deferred sales charge. Class C shares are
                           subject to a (i) 12b-1 fee at a maximum annual rate
                           of 0.75% of Class C assets, and (ii) a service fee at
                           a maximum annual rate of 0.25% of Class C assets.

                  b.       Institutional Class shares are offered and sold at
                           net asset value without an initial sales charge or
                           contingent deferred sales charge. Institutional Class
                           shares are not subject to a 12b-1 fee.

         2.       Expense Allocations To Each Class.

                  a.       Certain expenses may be attributable to a particular
                           class of shares of the Fund ("Class Expenses"). Class
                           Expenses are charged directly to net assets of the
                           class to which the expense is attributed and are
                           borne on a pro rata basis by the outstanding shares
                           of that class. Class Expenses may include:

                    (i)  expenses incurred in connection with a meeting of
                         shareholders;

                    (ii) litigation expenses;

                    (iii) printing and postage expenses of shareholders reports,
                         prospectuses and proxies to current shareholders of a
                         specific class;

                    (iv) expenses of administrative personnel and services
                         required to support the shareholders
                                    of a specific class;

                    (v)  transfer agent fees and shareholder servicing expenses;
                         and

                    (vi) such other expenses incurred by or attributable to a
                         specific class.


                  b.       All other expenses of the Fund are allocated to each
                           class on the basis of the net asset value of that
                           class in relation to the net asset value of the Fund.
                           Notwithstanding the foregoing, the distributor or
                           adviser of the Fund may waive or reimburse the
                           expenses of a specific class or classes to the extent
                           permitted under the Rule.

          3.   Class Designation. Subject to the approval by the Trustees of the
               Trust, the Fund may alter the nomenclature for the designations
               of one or more of its classes of shares.

          4.   Additional Information. This plan is qualified by and subject to
               the terms of the then current Prospectus for the applicable class
               of shares; provided, however, that none of the terms set forth in
               any such Prospectus shall be inconsistent with the terms of this
               Plan. The Prospectus for each class contains additional
               information about the class and the Fund's multiple class
               structure.

          6.   Effective Date. This Plan shall become effective the day before
               the first issuance of Class C Shares. This Plan may be terminated
               or amended at any time by a majority of the Trustees, including a
               majority of the Trustees who are not interested persons of the
               Trust (as defined in the Act).



9761 9/17/99




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