TRANSFER AGENCY AGREEMENT
THIS TRANSFER AGENCY AGREEMENT is made as of the 13th day of August, 2001,
by and between Professionally Managed Portfolios, a Massachusetts business trust
(the "Trust"), and Sunstone Financial Group, Inc., a Wisconsin corporation, its
successors and assigns ("Sunstone").
R E C I T A L S:
WHEREAS, the Trust is registered under the 1940 Act as an open-end
management investment company; and
WHEREAS, the Trust desires to retain Sunstone to render certain transfer
agency and dividend disbursement services, and Sunstone is willing to render
such services, all in accordance with the terms of this Agreement.
A G R E E M E N T S:
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
ARTICLE I
DEFINITIONS
In addition to any terms defined in the body of this Agreement, the
following capitalized terms shall have the meanings set forth hereinafter
whenever they appear in this Agreement:
1.01 1940 Act shall mean the Investment Company Act of 1940, as amended
from time to time.
1.02 Authorized Person shall mean any individual who is authorized to
provide Sunstone with Instructions and requests on behalf of the Trust, whose
name shall be certified to Sunstone from time to time pursuant to Section 7.01
of this Agreement.
1.03 Board of Trustees shall mean the Board of Trustees of the Trust.
1.04 Custodian shall mean the financial institution appointed as custodian
under the terms and conditions of the custody agreement between the financial
institution and the Trust, or its successor.
1.05 Declaration of Trust shall mean the Declaration of Trust or other
similar operational document of the Trust, as the case may be, as the same may
be amended from time to time.
1.06 Exchange Act shall mean the Securities Exchange Act of 1934, as
amended from time to time.
1.07 Fund shall mean each separate series of Shares offered by the Trust
representing interests in a separate portfolio of securities and other assets
for which the Trust has appointed Sunstone as transfer agent and dividend
disbursing agent under this Agreement.
1.08 Fund Business Day shall mean each day on which the New York Stock
Exchange, Inc. is open for trading.
1.09 Instructions shall mean an oral communication from an Authorized
Person or a written communication signed by an Authorized Person and actually
received by Sunstone. Instructions shall include manually executed originals,
telefacsimile transmissions of manually executed originals or electronic
communications.
1.10 Prospectus shall mean the current Prospectus and Statement of
Additional Information with respect to a Fund (including any applicable
supplement) actually received by Sunstone from the Trust with respect to which
the Trust has indicated a registration statement has become effective under the
Securities Act and the 1940 Act.
1.11 Securities Act shall mean the Securities Act of 1933, as amended from
time to time.
1.12 Shares shall mean such shares of beneficial interest, or class
thereof, of each respective Fund of the Trust as may be issued from time to
time.
1.13 Shareholder shall mean a record owner of Shares of each respective
Fund of the Trust.
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
2.01 Appointment. The Trust hereby appoints Sunstone as transfer agent and
dividend disbursing agent of all the Shares of the Trust during the term of this
Agreement with respect to each Fund listed on Schedule A hereto, and any
additional Fund the Trust and Sunstone may agree to include on any amended
Schedule A. Sunstone hereby accepts such appointment as transfer agent and
dividend disbursing agent and agrees to perform the duties thereof as
hereinafter set forth.
2.02 Duties.
A. Sunstone shall perform the transfer agent and dividend disbursement
services described on Schedule B hereto and such additional services as may
be agreed to by the parties from time to time and set forth in an amendment
to Schedule B (collectively, the "Services"). Sunstone shall have no duties
or responsibilities other than those specifically set forth in this
Agreement, and no covenant or obligation to carry out any other duties or
responsibilities shall be implied in this Agreement against Sunstone. In
the event Sunstone is asked to correct any action taken or omission of any
prior service provider, then Sunstone shall provide such services and be
entitled to such compensation as the parties may mutually agree
B. Sunstone may, in its discretion, appoint other parties to carry out
some or all of its responsibilities under this Agreement; provided,
however, that unless the Trust shall enter into a written agreement with
any such party, the party shall be the agent of Sunstone and not the agent
of the Trust. In such event, Sunstone shall be fully responsible for the
acts or omissions of such party and shall not be relieved of any of its
responsibilities hereunder by the appointment of such party.
2.03 Deliveries.
A. In connection with Sunstone's appointment as transfer agent and
dividend disbursing agent, the Trust shall deliver or cause the following
documents to be delivered to Sunstone:
(1) A copy of the Declaration of Trust and By-laws of the Trust
and all amendments thereto, certified by the Secretary of the Trust;
(2) A certificate signed by the President and Secretary of the
Trust specifying the number of authorized Shares and the number of
such authorized Shares issued and currently outstanding, if any;
(3) A certified copy of the resolutions of the Board of Trustees
of the Trust appointing Sunstone as transfer agent and dividend
disbursing agent and authorizing the execution of this Transfer Agency
Agreement on behalf of the Trust;
(4) Copies of the Trust's Registration Statement, as amended to
date, and the most recently filed Post-Effective Amendment thereto,
filed by the Trust with the Securities and Exchange Commission under
the Securities Act and the 1940 Act, together with any applications
filed in connection therewith;
(5) A certificate of an officer of the Trust with respect to the
Trust's organization and existence under the laws of its state of
organization, the validity of the authorized and outstanding Shares,
whether such Shares are fully paid and non-assessable and the status
of such Shares under the Securities Act and any other applicable
federal law or regulation (i.e., if subject to registration, that they
have been registered and that the Registration Statement has become
effective, or if exempt, the specific grounds therefor); and
(6) The certificate required by Section 7.01 of this Agreement,
signed by an officer of the Trust and designating the names of the
Trust's initial Authorized Persons.
B. The Trust agrees to deliver or to cause to be delivered to Sunstone
in Milwaukee, Wisconsin, at the Trust's expense, all of its Shareholder
account records in a format acceptable to Sunstone, as well as all other
documents, records and information that Sunstone may reasonably request in
order for Sunstone to perform the Services hereunder.
ARTICLE III
COMPENSATION & EXPENSES
3.01 Compensation. As compensation for the performance of the Services, the
Trust agrees to pay Sunstone the fees set forth on Schedule C attached hereto.
The prices for the Services set forth on Schedule C shall be fixed through the
end of the Initial Term of the Agreement, as hereinafter defined. The parties
may amend Schedule C to include fees for any additional services requested by
the Trust, enhancements to current Services, or to add Funds for which Sunstone
has been retained. The Trust agrees to pay Sunstone's then current rate for any
Services added to, or any enhancements to existing Services set forth on,
Schedule C after the execution of this Agreement. Sunstone shall present the
Trust with a revised Schedule C reflecting Sunstone's fees for the upcoming term
at least one hundred fifty (150) days prior to the end of the Initial Term and
each subsequent term of the Agreement.
3.02 Expenses. The Trust also agrees to promptly reimburse Sunstone for all
out-of-pocket expenses or disbursements incurred by Sunstone in connection with
the performance of Services under this Agreement. Out-of-pocket expense shall
include, but not be limited to, those items specified on Schedule C hereto. If
requested by Sunstone, out-of-pocket expenses are payable in advance. Payment of
postage expenses, if prepayment is requested, is due at least seven days prior
to the anticipated mail date. In the event Sunstone requests advance payment,
Sunstone shall not be obligated to incur such expenses or perform the related
Service(s) until payment is received.
3.03 Payment Procedures.
A. The Trust agrees to pay all amounts due hereunder within fifteen
days of the date reflected on the statement for such Services (the "Due
Date"). Sunstone shall xxxx Service fees monthly, and out-of-pocket
expenses as incurred (unless prepayment is requested by Sunstone). Sunstone
may, at its option, arrange to have various service providers submit
invoices directly to the Trust for payment of reimbursable out-of-pocket
expenses.
B. The Trust is aware that its failure to remit to Sunstone all
amounts due on or before the Due Date will cause Sunstone to incur costs
not contemplated by this Agreement, including, but not limited to carrying,
processing and accounting charges. Accordingly, in the event that Sunstone
does not receive any amounts due hereunder by the Due Date, the Trust
agrees to pay a late charge on the overdue amount equal to one and one-half
percent (1.5%) per month or the maximum amount permitted by law, whichever
is less. In addition, the Trust shall pay Sunstone's reasonable attorney's
fees and court costs if any amounts due Sunstone are collected by or
through an attorney. The parties hereby agree that such late charge
represents a fair and reasonable computation of the costs incurred by
reason of the Trust's late payment. Acceptance of such late charge shall in
no event constitute a waiver by Sunstone of the Trust's default or prevent
Sunstone from exercising any other rights and remedies available to it.
3.04 Allocation of Risk. The Trust acknowledges that the fees charged by
Sunstone under this Agreement reflect the allocation of risk between the
parties, including the exclusion of remedies and limitations on liability in
Article VIII. Modifying the allocation of risk from what is stated herein would
affect the fees that Sunstone charges. Accordingly, in consideration of those
fees, the Trust agrees to the stated allocation of risk.
ARTICLE IV
PROCESSING AND PROCEDURES
4.01 Issuance, Redemption and Transfer of Shares
A. Sunstone agrees to accept purchase orders and redemption requests
with respect to the Shares of each Fund via postal mail, telephone or
personal delivery on each Fund Business Day in accordance with such Fund's
Prospectus; provided, however, that Sunstone shall only accept purchase
orders from states in which the Shares are qualified for sale, as indicated
from time to time by the Trust. Sunstone shall, as of the time at which the
net asset value of each Fund is computed on each Fund Business Day, issue
to and redeem from the accounts specified in a purchase order or redemption
request in proper form and accepted by the Fund the appropriate number of
full and fractional Shares based on the net asset value per Share of the
respective Fund specified in an advice received on such Fund Business Day
from or on behalf of the Fund. Sunstone shall not be responsible for the
payment of any original issue or other taxes required to be paid by the
Trust in connection with the issuance of any Shares in accordance with this
Agreement. Sunstone shall not be required to issue any Shares after it has
received from an Authorized Person or from an appropriate federal or state
authority written notification that the sale of Shares has been suspended
or discontinued, and Sunstone shall be entitled to rely upon such written
notification. Payment for Shares shall be in the form of a check, wire
transfer, Automated Clearing House transfer or such other methods to which
the parties shall mutually agree.
B. Upon receipt of a redemption request and monies paid to it by the
Custodian in connection with a redemption of Shares, Sunstone shall cancel
the redeemed Shares and after making appropriate deduction for any
withholding of taxes required of it by applicable federal law, make payment
in accordance with the Fund's redemption and payment procedures described
in the Prospectus.
C. Except as otherwise provided in this paragraph, Sunstone will
transfer or redeem Shares upon presentation to Sunstone of instructions
endorsed for exchange, transfer or redemption, accompanied by such
documents as Sunstone deems necessary to evidence the authority of the
person making such transfer or redemption. Sunstone reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the
endorsement or instructions are valid and genuine. For that purpose, it
will require, unless otherwise instructed by an Authorized Person or except
as otherwise provided in this paragraph, a guarantee of signature by an
"Eligible Guarantor Institution" as that term is defined by SEC Rule
17Ad-15. Sunstone also reserves the right to refuse to transfer or redeem
Shares until it is satisfied that the requested transfer or redemption is
legally authorized, and it shall incur no liability for the refusal, in
good faith, to make transfers or redemptions which Sunstone, in its
judgment, deems improper or unauthorized, or until it is satisfied that
there is no reasonable basis to any claims adverse to such transfer or
redemption. Sunstone may, in effecting transfers and redemptions of Shares,
rely upon those provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers (or such other statutes which protect it and
the Trust in not requiring complete fiduciary documentation) and shall not
be responsible for any act done or omitted by it in good faith in reliance
upon such laws. Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, Sunstone shall be fully
protected by each Fund in not requiring any instruments, documents,
assurances, endorsements or guarantees, including, without limitation, any
signature guarantees, in connection with a redemption, exchange or transfer
of Shares whenever Sunstone reasonably believes that requiring the same
would be inconsistent with the transfer and redemption procedures described
in the Prospectus.
D. Notwithstanding any provision contained in this Agreement to the
contrary, Sunstone shall not be required or expected to require, as a
condition to any transfer or redemption of any Shares pursuant to a
computer tape or electronic data transmission, any documents to evidence
the authority of the person requesting the transfer or redemption and/or
the payment of any stock transfer taxes, and shall be fully protected in
acting in accordance with the applicable provisions of this Article.
E. In connection with each purchase and each redemption of Shares,
Sunstone shall send such statements as are provided in Schedule B hereto.
It is understood that certificates for Shares have not been and will not be
offered by the Trust or available to investors.
F. Sunstone and the Trust shall establish procedures for effecting
purchase, redemption or transfer transactions accepted from investors by
telephone or other methods consistent with the terms of the Prospectus.
Sunstone may establish such additional procedures, rules and regulations
governing the purchase, redemption or transfer of Shares, as it may deem
advisable and consistent with the Prospectus and industry practice.
Sunstone shall not be liable, and shall be held harmless by the Trust, for
its actions or omissions which are consistent with the foregoing
procedures.
G. The Trust agrees to provide Sunstone with prior notice of any
increase or decrease in the total number of Shares authorized to be issued,
or the issuance of any additional Shares of a Fund pursuant to stock
dividends, stock splits, recapitalizations, capital adjustments or similar
transactions, and to deliver to Sunstone such documents, certificates,
reports and legal opinions as Sunstone may reasonably request.
4.02 Dividends and Distributions.
A. The Trust shall give or cause to be given to Sunstone a copy of a
resolution of its Board of Trustees, that either:
(i) sets forth the date of the declaration of a dividend or
distribution, the date of accrual or payment, as the case may be,
thereof, the record date as of which Shareholders entitled to payment
or accrual, as the case may be, shall be determined, the amount per
Share of such dividend or distribution, the payment date on which all
previously accrued and unpaid dividends are to be paid, and the total
amount, if any, payable to Sunstone on such payment date, or
(ii) authorizes the declaration of dividends and distributions on
a daily or other periodic basis and further authorizes Sunstone to
rely on a certificate of an Authorized Person setting forth the
information described in subsection (i) of this paragraph.
B. In connection with a reinvestment of a dividend or distribution of
Shares of a Fund, Sunstone shall as of each Fund Business Day, as specified
in a certificate or resolution described in paragraph A, issue Shares of
the Fund based on the net asset value per Share of such Fund specified in
an advice received from or on behalf of the Fund on such Fund Business Day.
C. Upon the mail date specified in such certificate or resolution, as
the case may be, the Trust shall, in the case of a cash dividend or
distribution, cause the Custodian to deposit in an account in the name of
Sunstone on behalf of a Fund, an amount of cash sufficient for Sunstone to
make the payment, as of the mail date specified in such certificate or
resolution, as the case may be, to the Shareholders who were of record on
the record date. Sunstone will, upon receipt of any such cash, make payment
of such cash dividends or distributions to the Shareholders as of the
record date. Sunstone shall not be liable for any improper payments made in
accordance with a certificate or resolution described in the preceding
paragraph. If Sunstone shall not receive from the Custodian sufficient cash
to make payments of any cash dividend or distribution to all Shareholders
of a Fund as of the record date, Sunstone shall, upon notifying the Trust,
withhold payment to such Shareholders until sufficient cash is provided to
Sunstone.
D. It is understood that Sunstone in its capacity as transfer agent
and dividend disbursing agent shall in no way be responsible for the
determination of the rate or form of dividends or capital gain
distributions due to the Shareholders pursuant to the terms of this
Agreement. It is further understood that Sunstone shall file with the
Internal Revenue Service and Shareholders such appropriate federal tax
forms concerning the payment of dividend and capital gain distributions but
shall in no way be responsible for the collection or withholding of taxes
due on such dividends or distributions due to shareholders, except and only
to the extent, required by applicable federal law.
4.03 Records.
A. Sunstone shall keep those records specified in Schedule D hereto in
the form and manner, and for such period, as it may deem advisable but not
inconsistent with the rules and regulations of appropriate government
authorities, in particular Rules 31a-2 and 31a-3 under the 1940 Act.
Sunstone may deliver to the Trust from time to time at Sunstone's
discretion, for safekeeping or disposition by the Trust in accordance with
law, such records, papers and documents accumulated in the execution of its
duties as transfer agent, as Sunstone may deem expedient, other than those
which Sunstone is itself required to maintain pursuant to applicable laws
and regulations. The Trust shall assume all responsibility for any failure
thereafter to produce any record, paper, or other document so returned, if
and when required. To the extent required by Section 31 of the 1940 Act and
the rules and regulations thereunder, the records specified in Schedule D
hereto maintained by Sunstone, which have not been previously delivered to
the Trust pursuant to the foregoing provisions of this paragraph, shall be
considered to be the property of the Trust, shall be made available upon
request for inspection by the officers, employees, and auditors of the
Trust, and shall be delivered to the Trust promptly upon request and in any
event upon the date of termination of this Agreement, in the form and
manner kept by Sunstone on such date of termination or such earlier date as
may be requested by the Trust. Notwithstanding anything contained herein to
the contrary, Sunstone shall be permitted to maintain copies of any such
records, papers and documents to the extent necessary to comply with the
recordkeeping requirements of federal and state securities laws, tax laws
and other applicable laws.
B. Sunstone agrees to keep all records and other information relative
to the Trust's Shareholders confidential, except when requested to divulge
such information by duly-constituted authorities or court process, or when
requested by a Shareholder or Shareholder's agent with respect to
information concerning an account as to which such Shareholder has either a
legal or beneficial interest, or when requested by the Trust, the
Shareholder, the Shareholder's agent or the dealer of record with respect
to such account. In case of any requests or demands for the inspection of
the Shareholder records of the Trust, Sunstone will endeavor to notify the
Trust promptly and to secure instructions from an Authorized Person as to
such inspection. Sunstone reserves the right, however, to exhibit the
Shareholder records to any person whenever it believes there is a
reasonable likelihood that Sunstone will be held liable for the failure to
exhibit the Shareholder records to such person; provided, however, that in
connection with any such disclosure Sunstone shall promptly notify the
Trust that such disclosure has been made or is to be made. Sunstone is also
hereby authorized to disclose shareholder information to the Trust's
investment adviser(s), principal underwriter and administrator. Records and
information which have become known to the public through no wrongful act
of Sunstone or any of its employees, agents or representatives, and
information which was already in the possession of Sunstone prior to
receipt thereof, shall not be subject to this paragraph.
ARTICLE V
REPRESENTATION AND WARRANTIES
5.01 Representations of Trust. The Trust represents and warrants to
Sunstone that:
A. It is a business trust duly organized and existing under the laws
of the State of Massachusetts; it is empowered under applicable laws and by
its Declaration of Trust and By-laws to enter into and perform this
Agreement; and all requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
B. Any officer of the Trust has the authority to appoint additional
Authorized Persons, to limit or revoke the authority of any previously
designated Authorized Person, and to certify to Sunstone the names of such
Authorized Persons.
C. It is duly registered as an investment company under the 1940 Act.
D. A registration statement under the Securities Act is currently
effective and will remain effective, and appropriate state securities laws
filings have been made and will continue to be made, with respect to Shares
of the Trust being offered for sale.
E. All outstanding Shares are validly issued, fully paid and
non-assessable and when Shares are hereafter issued in accordance with the
terms of the Trust's Declaration of Trust and its Prospectus with respect
to each Fund, such Shares shall be validly issued, fully paid and
non-assessable.
5.02 Representations of Sunstone. Sunstone represents and warrants to the
Trust that:
A. It is a corporation duly organized and existing under the laws of
the State of Wisconsin; it is empowered under applicable law and by its
Articles of Incorporation and By-laws to enter into and perform this
Agreement; and all requisite proceedings have been taken to authorize it to
enter into and perform this Agreement.
B. It is duly registered as a transfer agent under Section 17A of the
1934 Act to the extent required.
C. It has received a copy of each Fund's Prospectus which describes
how sales and redemptions of Shares shall be made.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
6.01 Information Updates. During the term of this Agreement the Trust shall
have the ongoing obligation to provide Sunstone with the following documents as
soon as they become effective: (i) certified copies of all amendments to its
Declaration of Trust and By-laws made after the date of this Agreement; and (ii)
a copy of each Fund's currently effective Prospectus. For purposes of this
Agreement, Sunstone shall not be deemed to have notice of any information
contained in any such Prospectus until a reasonable time after it is actually
received by Sunstone.
6.02 Share Qualification. The Trust agrees to take or cause to be taken all
requisite steps to qualify the Shares for sale in all states in which the Shares
shall at the time be offered for sale and require qualification. If the Trust
receives notice of any stop order or other proceeding in any such state
affecting such qualification or the sale of Shares, or of any stop order or
other proceeding under the federal securities laws affecting the sale of Shares,
the Trust will give prompt notice thereof to Sunstone.
6.03 Compliance with Laws. The Trust will comply with all applicable
requirements of the Securities Act, the Exchange Act, the 1940 Act, blue sky
laws, and any other applicable laws, rules and regulations. Sunstone shall
provide its services hereunder in compliance with all applicable requirements of
the Securities Act, the Exchange Act, the 1940 Act and any and all laws, rules
and regulations of governmental authorities having jurisdiction with respect to
the duties to be performed by Sunstone hereunder.
6.04 Additional Duties. The Trust agrees that it shall advise Sunstone at
least 30 days prior to effecting any change in the Prospectus which would
increase or alter the duties and obligations of Sunstone hereunder, and shall
proceed with such change only if it shall have received the written consent of
Sunstone thereto.
6.05 Transfer Agent System. Sunstone shall retain all right, title and
interest in and any and all computer programs, screen formats, report formats,
procedures, data bases, interactive design techniques, derivative works,
inventions, discoveries, patentable or copyrightable matters, concepts,
expertise, trade secrets, trademarks and other related legal rights provided,
developed or utilized by Sunstone in connection with the Services provided by
Sunstone to the Trust hereunder.
ARTICLE VII
TRUST INSTRUCTIONS
7.01 Authorized Persons. Upon the execution of this Agreement, the Trust
shall provide Sunstone with a certificate containing the names of the initial
Authorized Persons in a form acceptable to Sunstone. Any officer of the Trust
has the authority to appoint additional Authorized Persons, to limit or revoke
the authority of any previously designated Authorized Person, and to certify to
Sunstone the names of the Authorized Persons from time to time. The Trust shall
provide Sunstone with an updated certificate evidencing the appointment, removal
or change of authority of any Authorized Person, it being understood Sunstone
shall not be held to have notice of any change in the authority of any
Authorized Person until receipt of written notice thereof from the Trust.
7.02 Acceptance of Instructions. Sunstone, its officers, agents or
employees shall accept Instructions given to them by any person representing or
acting on behalf of the Trust only if such representative is an Authorized
Person. The Trust agrees that when oral Instructions are given, it shall, upon
the request of Sunstone, confirm such Instructions in writing.
7.03 Request for Instructions. At any time, Sunstone may request
Instructions from the Trust with respect to any matter arising in connection
with this Agreement. If such Instructions are not received within a reasonable
time, then Sunstone may seek advice from legal counsel for the Trust, or its own
legal counsel at the expense of the Trust, and it shall not be liable for any
action taken or not taken by it in good faith in accordance with such
Instructions or in accordance with advice of counsel.
7.04 Reliance on Instructions. Sunstone shall not be liable for acting upon
any written Instructions reasonably believed by it to be genuine and to have
been signed or made by an Authorized Person or oral Instructions which the
individual receiving the instructions on behalf of Sunstone reasonably believes
to have been given by an Authorized Person.
ARTICLE VIII
LIMITATION OF LIABILITY; INDEMNIFICATION
8.01 Limitation of Liability. Sunstone shall exercise care and diligence in
the performance of its duties hereunder and shall act in good faith in
performing services provided for in this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, Sunstone shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Trust or
the Funds in connection with the matters to which this Agreement relates, except
for a loss resulting from Sunstone's willful misfeasance, bad faith or
negligence in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. Furthermore, notwithstanding
anything contained in this Agreement to the contrary, Sunstone shall not be
liable for any action taken or omitted to be taken in accordance with
instructions received by it from an officer or representative of the Trust.
8.02 Trust Indemnification. The Trust agrees to indemnify and hold harmless
Sunstone from and against any and all claims, demands, actions and suits, and
from and against any and all judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses (collectively "Losses") of
every nature and character which may be asserted against Sunstone or for which
Sunstone may be held liable (a "Claim") arising out of or in any way relating to
any of the following:
(a) any action of Sunstone required to be taken, or omitted to be
taken, pursuant to the Agreement, unless a Claim resulted from Sunstone's
willful misfeasance, bad faith, or negligence in the performance of its
duties or from reckless disregard by it of its obligations and duties
hereunder;
(b) Sunstone's reliance on, or use of information, data, records and
documents received by Sunstone from the Trust, or any third party acting on
behalf of the Trust, in the performance of Sunstone's duties and
obligations hereunder;
(c) the reliance on, or the implementation of, any Instructions or any
other requests of the Trust on behalf of the applicable Fund;
(d) Sunstone's acting upon telephone or electronic instructions
relating to the purchase, exchange or redemption of Shares received by
Sunstone in accordance with procedures established by Sunstone and the
Trust;
(e) any action taken by or omission of any prior service provider;
(f) the offer or sale of Shares in violation of any requirement under
the securities laws or regulations of any state that such Shares be
qualified for sale in such state or in violation of any stop order or
determination or ruling by any state with respect to the offer or sale of
such Shares in such state; or
(g) the Trust's refusal or failure to comply with the terms of the
Agreement, or any Claim that arises out of the Trust's negligence or
misconduct or breach of any representation or warranty of the Trust made
herein.
As used in this Section 8.02, the term "Sunstone" shall include past and present
members, officers, employees, representatives, authorized agents, and assigns of
Sunstone as well as Sunstone and its affiliates themselves.
8.03 Sunstone Indemnification. Sunstone agrees to indemnify and hold
harmless the Trust, its employees, officers and trustees from and against any
and all Losses which may be asserted against the Trust arising solely out of
Sunstone's willful misfeasance, bad faith, or negligence in the performance of
its duties or from reckless disregard by it of its obligations and duties
hereunder.
8.04 Indemnification Procedures. The Indemnified Party will notify the
Indemnifying Party promptly after identifying any situation which it believes
presents or appears likely to present a claim for which the Trust may be
required to indemnify or hold the Indemnified Party harmless hereunder. In such
event, the Indemnifying Party shall have the option to defend the Indemnified
Party against any claim, and, in the event that the Indemnifying Party so
elects, such defense shall be conducted by counsel chosen by the Indemnifying
Party and approved by the Indemnified Party in its reasonable discretion. The
Indemnified Party shall not confess any claim or make any compromise in any case
in which the Indemnifying Party will be asked to provide indemnification, except
with the Indemnifying Party's prior written consent. The obligations of the
parties under the Sections 8.02 and 8.03 shall survive the termination of this
Agreement.
8.05 Force Majeure. Sunstone assumes no responsibility hereunder, and shall
not be liable, for any damage, loss of data, errors, delay or any other loss
whatsoever caused by events beyond its reasonable control. Sunstone will,
however, take all reasonable steps to minimize service interruptions for any
period that such interruption continues beyond Sunstone's control.
8.06 Consequential Damages. In no event and under no circumstances shall
Sunstone, its affiliates or any of its or their officers, directors, agents or
employees be liable to anyone, including, without limitation, the other party,
under any theory of tort, contract, strict liability or other legal or equitable
theory for lost profits, exemplary, punitive, special, indirect or consequential
damages for any act or failure to act under any provision of this Agreement
regardless of whether such damages were foreseeable and even if advised of the
possibility thereof.
8.07 Additional Limitations and Exclusions. Notwithstanding any other
provision of this Agreement, Sunstone shall have no duty or obligation under
this Agreement to inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares, the sufficiency
of the amount to be received therefor, or the authority of the Trust, as
the case may be, to request such sale or issuance;
(b) The legality of a transfer of Shares or of a purchase or
redemption of any Shares, the propriety of the amount to be paid therefor,
or the authority of the Trust, as the case may be, to request such transfer
or redemption;
(c) The legality of the declaration of any dividend by the Trust, or
the legality of the issue of any Shares in payment of any stock dividend;
or
(d) The legality of any recapitalization or readjustment of Shares.
ARTICLE IX
TERM AND TERMINATION
9.01 Term. This Agreement shall remain in full force and effect until
August 31, 2003 (the "Initial Term") and thereafter shall automatically extend
for additional, successive twelve (12) month terms unless earlier terminated as
provided below.
9.02 Termination. Either party may terminate this Agreement at the end of
the Initial Term or at the end of any successive annual term by giving the other
party a written notice not less than one hundred twenty (120) days prior to the
end of the respective term. In the event a termination notice is given by the
Trust pursuant to Section 9.02 or 9.04, it shall be accompanied by a copy of a
resolution of the Board of Trustees of the Trust, certified by the Secretary or
any Assistant Secretary, electing to terminate this Agreement and designating
the successor transfer agent or transfer agents. In the event such notice is
given by Sunstone, the Trust shall on or before the termination date, deliver to
Sunstone a copy of a resolution of its Board of Trustees certified by the
Secretary or any Assistant Secretary designating a successor transfer agent or
transfer agents. In the absence of such designation by the Trust, the Trust
shall be deemed to be its own transfer agent as of the termination date and
Sunstone shall thereby be relieved of all duties and responsibilities pursuant
to this Agreement. Fees and out-of-pocket expenses incurred by Sunstone, but
unpaid by the Trust upon such termination, shall be immediately due and payable
upon and notwithstanding such termination.
9.03 Effect of Termination. Upon the termination of the Agreement as
provided herein, Sunstone, upon the written request of the Trust, shall deliver
the records of the Trust to the Trust or its successor transfer agent in the
form maintained by Sunstone (to the extent permitted by applicable license
agreements) at the expense of the Trust. In addition to any amounts payable
pursuant to Section 9.04 hereof, the Trust shall be responsible to Sunstone for
all costs and expenses associated with the preparation and delivery of such
media, including, but not limited to: (a) out-of-pocket expenses; (b) any custom
programming requested by the Trust in connection with the preparation of such
media and agreed upon by Sunstone; (c) transportation of forms and other
materials used in connection with the processing of Trust transactions by
Sunstone; and (d) transportation of records and files in the possession of
Sunstone. In addition, Sunstone shall be entitled to such compensation as the
parties may mutually agree for any services other than the preparation and
delivery of such media requested by the Trust and agreed to by Sunstone in
connection with the termination of this Agreement or the liquidation or merger
of the Trust. Sunstone shall not reduce the level of service provided to the
Trust prior to termination following notice of termination by the Trust.
9.04 Early Termination. Notwithstanding anything herein to the contrary,
and in accordance with the terms of this Section 9.04, either Sunstone or the
Trust may terminate the Agreement as of a date other than the end of a term by
giving the other party a written notice specifying the date of such termination
which shall be not less than one hundred twenty (120) days after the date notice
is deemed given in accordance with Section 10.01. If the Trust replaces Sunstone
as the transfer agent for the Funds for any reason other than upon the
expiration of the Initial Term or any successive twelve-month term, or if a
third party is added to perform all or part of the Services provided by Sunstone
under this Agreement (excluding any sub-transfer agent appointed by Sunstone as
provided in Section 2.02 hereof), then the Trust shall pay to Sunstone as
liquidated damages an amount equal to the balance of account fees, transaction
fees and servicing fees that would otherwise have been due Sunstone for the
remainder of the term of this Agreement, had it not been terminated. For
purposes of calculating the payment of account and servicing fees, the parties
shall assume that the number of Shareholder accounts will remain constant for
the balance of the contract term. For purposes of calculating the payment of
transaction fees, the parties shall assume usage per month for the remaining
months in the contract term based on an average of the prior twelve months'
usage. This liquidated damages provision shall also apply in the event the Trust
is merged into another legal entity in part or in whole pursuant to any form of
business reorganization or is liquidated in part or in whole prior to the
expiration of the Initial Term or any subsequent term of this Agreement, and
Sunstone is not retained to provide transfer agency services. The parties
acknowledge and agree that, in the event Sunstone ceases to be retained as set
forth above, (i) determination of actual damages incurred by Sunstone would be
extremely difficult, and (ii) the liquidated damages provision contained herein
is intended to adequately compensate Sunstone for damages incurred and is not
intended to constitute any form of penalty. Any such payment shall be due and
payable on or before the day the Agreement terminates, a third party is added,
or Trust is merged or liquidated, as applicable.
ARTICLE X
MISCELLANEOUS
10.01 Notices. Any notice required or permitted to be given by either party
to the other under this Agreement shall be in writing and shall be deemed to
have been given when sent by either an overnight delivery service or by
registered or certified mail, postage prepaid, return receipt requested, to the
addresses listed below, or to such other location as either party may from time
to time designate in writing:
If to Sunstone: Sunstone Financial Group, Inc.
--------------
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: President
If to the Trust: Professionally Managed Portfolios
---------------- c/o The Xxxxxxxxx Group
0000 X. Xxxxxxxxx Xxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: President
10.02 Amendments/Assignments.
A. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the formality of this
Agreement.
B. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns. This Agreement
shall not be assignable by either party without the written consent of the
other party, except that Sunstone may assign this Agreement to an affiliate
with advance written notice to the Trust.
10.03 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin, without regard to
its conflict of law provisions.
10.04 Severability. If any part, term or provision of this Agreement is
determined by the courts or any regulatory authority having jurisdiction over
the issue to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid.
10.05 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
10.06 Non-Exclusivity; Other Agreements. The services of Sunstone hereunder
are not deemed exclusive and Sunstone shall be free to render similar and other
services to others. Except as specifically provided herein, this Agreement does
not in any way affect any other agreements entered into among the parties hereto
and any actions taken or omitted by any party hereunder shall not affect any
rights or obligations of any other party hereunder.
10.07 Captions. The captions in the Agreement are included for convenience
of reference only, and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
10.08 Trust Limitations. This Agreement is executed by the Trust with
respect to each of the Funds and the obligations hereunder are not binding upon
any of the trustees, officers or shareholders of the Trust individually but are
binding only upon the Fund to which such obligations pertain and the assets and
property of such Fund. All obligations of the Trust under this Agreement shall
apply only on a Fund-by-Fund basis, and the assets of one Fund shall not be
liable for the obligations of another Fund. The Fund's Declaration of Trust is
on file with the Secretary of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SUNSTONE FINANCIAL GROUP, INC. PROFESSIONALLY MANAGED PORTFOLIOS
By: ------------------------------ By: ------------------------------
(Signature) (Signature)
------------------------------ ------------------------------
(Name) (Name)
------------------------------ ------------------------------
(Title) (Title)
------------------------------ ------------------------------
(Date Signed) (Date Signed)
