PROFESSIONALLY MANAGED PORTFOLIOS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 16th day of August, 1993 by and among PROFESSIONALLY
MANAGED PORTFOLIOS (the "Trust"), a Massachusetts business trust, SOUTHAMPTON
INVESTMENT MANAGEMENT COMPANY, INC. (the "Manager"), a Delaware corporation and
OSTERWEIS CAPITAL MANAGEMENT, INC. (the "Advisor"), a California corporation.
WITNESSETH:
WHEREAS, a new series of the Trust having separate assets and liabilities
has been created entitled THE OSTERWEIS FUND (the "Fund"); and
WHEREAS, it is therefore desirable to have an investment advisory agreement
(i.e., this Agreement) relating to the Fund, which agreement will apply only to
this Fund;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed by and among the parties hereto as
follows:
1. In General
The Advisor agrees, all as more fully set forth herein, to act as
investment adviser to the Trust with respect to the investment of the assets of
the Fund and to supervise and arrange the purchase and sale of securities held
in the portfolio of the Fund.
2. Duties and Obligations of the Advisor with Respect to Investment of
Assets of the Fund
(a) Subject to the succeeding provisions of this section and subject to the
direction and control of the Board of Trustees of the Trust, the Advisor shall:
(i) Decide what securities shall be purchased or sold by the Trust with
respect to the Fund and when; and
(ii) Arrange for the purchase and the sale of securities held in the
portfolio of the Fund by placing purchase and sale orders for the Trust with
respect to the Fund.
(b) Any investment purchases or sales made by the Advisor shall at all
times conform to, and be in accordance with, any requirements imposed by: (1)
the provisions of the 1940 Act and of any rules or regulations in force
thereunder; (2) any other applicable provisions of law; (3) the provisions of
the Declaration of Trust and By -Laws of the Trust as amended from time to time;
(4) any policies and determinations of the Board of Trustees of the Trust; and
(5) the fundamental policies of the Trust relating to the Fund, as reflected in
the Trust's registration statement under the 1940 Act, or as amended by the
shareholders of the Fund.
(c) The Advisor shall give the Trust the benefit of its best judgment and
effort in rendering services hereunder, but the Advisor shall not be liable for
any loss sustained by reason of the purchase, sale or retention of any security
whether or not such purchase, sale or retention shall have been based on its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, if such purchase, sale or retention shall have
been made and such other individual, firm or corporation shall have been
selected in good faith. Nothing herein contained shall, however, be construed to
protect the Advisor against any liability to the Trust or its security holders
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of its reckless disregard of obligations
and duties under this Agreement.
(d) Nothing in this Agreement shall prevent the Advisor or any affiliated
person (as defined in the 0000 Xxx) of the Advisor from acting as investment
adviser or manager and/or principal underwriter for any other person, firm or
corporation and shall not in any way limit or restrict the Advisor or any such
affiliated person from buying, selling or trading any securities for its or
their own accounts or the accounts of others for whom it or they may be acting,
provided, however, that the Advisor expressly represents that it will undertake
no activities which, in its judgment, will adversely affect the performance of
its obligations to the Trust under this Agreement.
(e) It is agreed that the Advisor shall have no responsibility or liability
for the accuracy or completeness of the Trust's Registration Statement under the
1940 Act or the Securities Act of 1933 except for information supplied by the
Advisor for inclusion therein. The Trust may indemnify the Advisor to the full
extent permitted by the Trust's Declaration of Trust.
(f) The Fund may use the name "The Osterweis Fund" or any name derived from
or using the name "Osterweis" only for so long as this Agreement or any
extension, renewal or amendment hereof remains in effect. At such time as such
an agreement shall no longer be in effect, the Fund shall cease to use such a
name or any other name connected with the Advisor.
3. Broker-Dealer Relationships
The Advisor is responsible for decisions to buy and sell securities for the
Fund, broker-dealer selection, and negotiation of brokerage commission rates.
The Advisor's primary consideration in effecting a securities transaction will
be execution at the most favorable price. In selecting a broker-dealer to
execute each particular transaction, the Advisor will take the following into
consideration: the best net price available; the reliability, integrity and
financial condition of the broker-dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Fund on a continuing basis.
Accordingly, the price to the Fund in any transaction may be less favorable than
that available from another broker-dealer if the difference is reasonably
justified by other aspects of the portfolio execution services offered. Subject
to such policies as the Board of Trustees of the Trust may determine, the
Advisor shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage or research
services to the Advisor an amount of commission for effecting a portfolio
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Advisor determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Advisor's overall
responsibilities with respect to the Trust. The Advisor is further authorized to
allocate the orders placed by it on behalf of the Fund to such brokers or
dealers who also provide research or statistical material, or other services, to
the Trust, the Advisor, or any affiliate of either. Such allocation shall be in
such amounts and proportions as the Advisor shall determine, and the Advisor
shall report on such allocations regularly to the Trust, indicating the
broker-dealers to whom such allocations have been made and the basis therefor.
The Advisor is also authorized to consider sales of shares as a factor in the
selection of brokers or dealers to execute portfolio transactions, subject to
the requirements of best execution, i.e., that such brokers or dealers are able
to execute the order promptly and at the best obtainable securities price.
4. Allocation of Expenses
The Advisor agrees that it will furnish the Trust, at the Advisor's
expense, with office space and facilities, equipment and clerical personnel
necessary for carrying out its duties under this Agreement The Advisor will also
pay all compensation of any Trustees, officers and employees of the Trust who
are affiliated persons of the Advisor. All operating costs and expenses relating
to the Fund not expressly assumed by the Advisor under this Agreement shall be
paid by the Trust from the assets of the Fund, including, but not limited to (i)
interest and taxes; (ii) brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses of the Trust's Trustees other than those affiliated
with the Advisor or the Manager; (v) legal and audit expenses; (vi) fees and
expenses of the Trust's custodian, shareholder servicing or transfer agent and
accounting services agent; (vii) expenses incident to the issuance of the Fund's
shares, including issuance on the payment of, or reinvestment of, dividends;
(viii) fees and expenses incident to the registration under Federal or state
securities laws of the Trust or the shares of the Fund; (ix) expenses of
preparing, printing and mailing reports and notices and proxy material to
shareholders of the Trust; (x) all other expenses incidental to holding meetings
of the Trust's shareholders; (xi) dues or assessments of or contributions to the
Investment company Institute or any successor; (xii) such non-recurring expenses
as may arise, including litigation affecting the Trust and the legal obligations
which the Trust may have to indemnify its officers and Trustees with respect
thereto; and (xiii) all expenses which the Trust or the Fund agrees to bear in
any distribution agreement or in any plan adopted by the Trust and/or a Fund
pursuant to Rule l2b-l under the Act.
5. Compensation of the Advisor
(a) The Trust agrees to pay the Advisor and the Advisor agrees to accept as
full compensation for all services rendered by the Advisor hereunder, an annual
management fee, payable monthly and computed on the value of the net assets of
the Fund as of the close of business each business day at the annual rate of
1.00% of such net asset value.
(b) In the event the expenses of the Fund (including the fees of the
Advisor and the Manager and amortization of organization expenses but excluding
interest, taxes, brokerage commissions, extraordinary expenses and sales charges
and any distribution fees) for any fiscal year exceed the limits set by
applicable regulations of state securities commissions where the Fund is
registered or qualified for sale, the Advisor and the Manager will reduce their
fees by the amount of such excess. Any such reductions are subject to
readjustment during the year and are subject to agreements between the Advisor
and the Manager as to the allocation of such reductions between them. The
payment of the advisory fee at the end of any month will be reduced or postponed
or, if necessary, a refund will be made to the Fund so that at no time will
there be any accrued but unpaid liability under this expense limitation.
The Advisor may reduce any portion of the compensation or reimbursement of
expenses due to it under this agreement, or may agree to make payments to limit
the expenses which are the responsibility of the Fund. Any such reduction or
payment shall be applicable only to such specific reduction or payment and shall
not constitute an agreement to reduce any future compensation or reimbursement
due to the Advisor hereunder or to continue future payments. Any fee withheld
from the Advisor under this paragraph shall be reimbursed by the Fund to the
Advisor in the first fiscal year or the second fiscal year next succeeding the
fiscal year of the withholding to the extent permitted by the applicable state
law if the aggregate expenses for the next succeeding fiscal year or second
succeeding fiscal year do not exceed the applicable state limitation or any more
restrictive limitation to which the Advisor has agreed.
6. Duration and Termination
(a) This Agreement shall go into effect on the effective date of the
Post-Effective Amendment of the Registration Statement of the Trust covering the
shares of the Fund and shall, unless terminated as hereinafter provided,
continue in effect until August 16, 1995, and thereafter from year to year, but
only so long as such continuance is specifically approved at least annually by
the Trust's Board of Trustees, including the vote of a majority of the Trustees
who are not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of any such party cast in person at a meeting called for the purpose
of voting on such approval, or by the vote of the holders of a "majority" (as so
defined) of the outstanding voting securities of the Fund and by such a vote of
the Trustees.
(b) This Agreement may be terminated by the Advisor at any time without
penalty upon giving the Trust sixty (60) days' written notice (which notice may
be waived by the Trust) and may be terminated by the Trust at any time without
penalty upon giving the Advisor sixty (60) days' written notice (which notice
may be waived by the Advisor), provided that such termination by the Trust shall
be directed or approved by the vote of a majority of all of its Trustees in
office at the time or by the vote of the holders of a majority (as defined in
the 0000 Xxx) of the voting securities of the Trust at the time outstanding and
entitled to vote. This Agreement shall automatically terminate in the event of
its assignment (as so defined).
7. Agreement Binding Only on Fund Property
The Advisor understands that the obligations of this Agreement are not
binding upon any shareholder of the Trust personally, but bind only the Trust's
property; the Advisor represents that it has notice of the provisions of the
Trust's Declaration of Trust disclaiming shareholder liability for acts or
obligations of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by duly authorized persons and their seals to be hereunto
affixed, all as of the day and year first above written.
PROFESSIONALLY MANAGED PORTFOLIOS
By: /s/Xxxxx Xxxxxx
ATTEST: /s/ Xxxxxxx X. Xxxx
SOUTHAMPTON INVESTMENT MANAGEMENT, INC.
By: /s/Xxxxxx X. Paagioli
ATTEST: /s/ Xxxxxxx X. Xxxx
OSTERWEIS CAPITAL MANAGEMENT, INC.
By: /s/Xxxx X. Xxxxxxxxx
ATTEST: /s/ Xxxxxxx X. Xxxx
SCHEDULE A
Series or Fund of Professionally Managed Portfolios Annual Fee Rate
-------------------------------------------------- -------------------
The Osterweis Strategic Income Fund 1.00% of average net assets
