PROFESSIONALLY MANAGED PORTFOLIOS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 15th day of December, 1992 by and among PROFESSIONALLY
MANAGED PORTFOLIOS (the "Trust"), a Massachusetts business trust, SOUTHAMPTON
INVESTMENT MANAGEMENT COMPANY, INC.(the "Manager"), a Delaware corporation and
XXXXXXX CAPITAL MANAGEMENT, INC. (the "Advisor"), a Minnesota corporation.
WITNESSETH:
WHEREAS, a new series of the Trust having separate assets and liabilities
has been created entitled the XXXXXXX OPPORTUNITY 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.
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.
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 December 15, 1994, 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/ Xxxxxx X. Xxxxxxxx
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ATTEST:
/s/ Xxxxxxx X. Xxxx
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SOUTHAMPTON INVESTMENT MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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ATTEST:
/s/ Xxxxxxx X. Xxxx
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XXXXXXX CAPITAL MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Vice President
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ATTEST:
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