PROFESSIONALLY MANAGED PORTFOLIOS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 30th day of September, 1998 by and between
PROFESSIONALLY MANAGED PORTFOLIOS (the "Trust"), A Massachusetts business trust
and Xxxxxx Capital Management, L.L.C., A Texas limited liability corporation
(the "Advisor").
WITNESSETH
WHEREAS, a series of the Trust having separate assets and liabilities has
been created entitled to Avondale Xxxxxx Total Return 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 advisor 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 by 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 Investment Company Act of 1940 (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 (including by reference the Statement of Additional
Information) as such registration statement is amended from time to
time, or as amended by the shareholders of the Fund.
(c) The Advisor shall give the Trust the benefit of its best judgement 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 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 advisor 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 judgement, 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.
The Fund may use the name Avondale Xxxxxx Total Return Fund or any
name derived from or using the name Avondale Xxxxxx Total Return Fund
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 Relationship
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 create 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 determined in good faith that
such amount of commission was reasonable in relations 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 provides 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
broker0dealers to whom such allocations have been made and the basis therefore.
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 for any Trustees, officers and employees for 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; (ix) dues or
assessments of or contributions to the Investment Company Institute or any
successor and (xii) such non-recurring expenses as may arise, including
litigation affecting the Trust and the legal obligations which the Trust may
have to indemnify it s officers and Trustees with respect thereto;
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 he net assets of the Fund as of the close of business
each business day at the annual rate of 0.70% on the first $200
million of net assets, 0.60% on the next $300 million of net assets;
and 0.50% on the net assets exceeding $500 million.
(b) 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 ant future compensation or reimbursement due to
the Advisor hereunder or to continue future payments. Any fee withheld
or voluntarily reduced and any Fund expense absorbed by the Advisor
voluntarily or pursuant to an agreed upon expense limit shall be
reimbursed by the Fund to the Advisor, if so requested by the Advisor,
in the first, second or third (or any combination thereof) fiscal year
next succeeding the fiscal year of the withholding, reduction or
absorption if the aggregate amount actually paid by the Fund toward
the operating expenses for such fiscal year (taking into account the
reimbursement) do not exceed the applicable limitation on Fund
expenses.
6. Duration and Termination
(a) This Agreement shall go into effect on the date set forth hereon and
shall, unless terminated as hereinafter provided, continue in effect
for a period of two years from that date, and thereafter from year to
year, but only do 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 sizty (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 of obligation of the Trust. This agreement had been
executed by or with reference to any Trustee in such person's capacity as a
Trustee, and the Trustees shall not be personally liable hereon.
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
/s/ Xxxxxx X. Xxxxxxxx
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By: Xxxxxx X. Xxxxxxxx
Title: President
/s Xxxxxx Xxxxxx
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ATTEST: Xxxxxx Xxxxxx
/s/ Xxx Xxxxx Xxxxxx
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By: Xxx Xxxxx Xxxxxx
Title: President
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ATTEST:
