FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 2nd day of July, 2001, by and between
Professionally Managed Portfolios, a Massachusetts business trust (the "Trust"),
and Sunstone Financial Group, Inc., a Wisconsin corporation ("Sunstone").
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act") and is authorized to
issue shares of beneficial interests (the "Shares") in separate series with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Trust and Sunstone desire to enter into an agreement pursuant
to which Sunstone shall provide fund accounting services to such investment
portfolios of the Trust as are listed on Schedule A hereto and any additional
investment portfolios the Trust and Sunstone may agree upon and include on
Schedule A as such Schedule may be amended from time to time (such investment
portfolios and any additional investment portfolios are individually referred to
as a "Fund" and collectively the "Funds").
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, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Appointment
The Trust hereby appoints Sunstone as fund accountant of the Funds for the
period and on the terms set forth in this Agreement. Sunstone accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Services as Fund Accountant
(a) Subject to the direction and control of the Trust's Board of Trustees
and utilizing information provided by the Trust and its agents, Sunstone will:
(1) calculate daily net asset values of each Fund in accordance with the
procedures in the Funds' prospectus; (2) maintain all general ledger accounts
and related subledgers needed as a basis for the calculation of each Fund's net
asset value; (3) perform security valuations based on information provided by
the Trust, its Board, the Trust's investment adviser, and pricing service(s), as
provided herein; and (4) communicate at an agreed upon time the net asset values
for each Fund to parties as agreed upon from time to time. The duties of
Sunstone shall be confined to those expressly set forth herein, and no implied
duties are assumed by or may be asserted against Sunstone hereunder. In the
event Sunstone is asked to correct any action taken or inaction by any prior
service provider then Sunstone shall provide such services and be entitled to
such compensation as the parties may mutually agree.
(b) It is understood that in determining security valuations, Sunstone
employs one or more pricing services to determine valuations of portfolio
securities for purposes of calculating net asset values of the Funds. Sunstone
shall identify to the Trust and the Board of Trustees any such pricing
service(s) utilized on behalf of the Trust. Sunstone shall price the securities
and other holdings of the Funds for which market quotations are available by the
use of such services. For those securities where market quotations are not
readily available, the Trust's Board shall approve, in good faith, the method
for determining the fair value for such securities and representatives of the
Trust shall deliver to Sunstone the prices determined in accordance with the
procedures established by the Board. It is understood that a Fund's investment
adviser or other authorized representative of a Fund may provide prices for use
in determining valuations, and Sunstone is authorized to rely on the prices
provided by the foregoing pricing service(s) or by the Funds' investment adviser
or other authorized representative of the Funds, and Sunstone shall not be
liable for losses to the Trust or its shareholders or otherwise as a result of
its reliance on the valuations provided by pricing service(s) or representatives
of the Trust.
(c) The Trustees of the Trust shall cause the officers, investment adviser,
legal counsel, independent accountants, transfer agent, custodian and other
service providers for the Funds to cooperate with Sunstone and to provide
Sunstone with such information, documents and advice relating to the Funds and
the Trust as requested by Sunstone, in order to enable Sunstone to perform its
duties hereunder. In connection with its duties hereunder, the Sunstone shall be
entitled to rely, and shall be held harmless by the Trust when acting in
reliance (without investigation or verification), upon the instruction, advice,
information or any documents relating to the Funds or the Trust provided to
Sunstone by an officer or representative of the Funds or by any of the
aforementioned persons. Sunstone shall be entitled to rely on any document that
it reasonably believes to be genuine and to have been signed or presented by the
proper party. Fees charged by such persons shall be an expense of the Trust.
Sunstone shall not be held to have notice of any change of authority of any
officer, agent, representative or employee of the Trust until receipt of written
notice thereof from the Trust.
(d) To the extent required by Rule 31a-3 under the 1940 Act, Sunstone
hereby agrees that all records which it maintains for the Trust pursuant to its
duties hereunder are the property of the Trust and further agrees to surrender
promptly to the Trust any of such records upon the Trust's request. Subject to
the terms of Section 6, and where applicable, Sunstone further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
which are maintained by Sunstone for the Trust.
(e) The Trust's Board of Trustees and the Funds' investment adviser have
and retain primary responsibility for all compliance matters relating to the
Funds including but not limited to compliance with the 1940 Act, the Internal
Revenue Code of 1986, as amended, and the policies and limitations of each Fund
relating to the portfolio investments as set forth in the Prospectus and
Statement of Additional Information. Sunstone's functions hereunder shall not
relieve the Board and the investment adviser of their primary day-to-day
responsibility for assuring such compliance.
3. Fees; Delegation; Expenses
(a) In consideration of the services rendered pursuant to this Agreement,
the Trust will pay Sunstone a fee, computed daily and payable monthly, plus
out-of-pocket and related expenses, each as provided in Schedule B hereto. Fees
shall be paid by each Fund at a rate that would aggregate at least the
applicable minimum fee for each Fund. Except as otherwise indicated on Schedule
B, the prices for the services to be provided hereunder shall be fixed through
the end of the Initial Term of the Agreement, as hereinafter defined. The
parties may amend this Agreement 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 additional services provided, or for enhancements to existing
services currently provided, after the execution of this Agreement. Sunstone
shall present the Trust with a revised Schedule B 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.
(b) For the purpose of determining fees payable to the Sunstone, net asset
value shall be computed in accordance with the Trust's Prospectuses and
resolutions of the Trust's Board of Trustees. The fee for the period from the
day of the month this Agreement is entered into until the end of that month
shall be pro-rated according to the proportion that such period bears to the
full monthly period. Upon any termination of this Agreement before the end of
any month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. Should the Trust be
liquidated, merged with or acquired by another fund or investment company, any
accrued fees shall be immediately payable.
4. Proprietary and Confidential Information
Sunstone agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records relative
to the Funds' shareholders, and not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the Sunstone
may be exposed to civil or criminal proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, when
subject to governmental or regulatory audit or investigation, or when so
requested by the Trust. 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.
5. Limitation of Liability
(a) 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 herein to the contrary, Sunstone
shall not be responsible or liable for any error of judgment or mistake of law
or for any loss suffered by 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 herein to the contrary, Sunstone shall not
be liable for (i) any action taken or omitted to be taken in accordance with
written or oral instructions received by the Sunstone from an officer or
representative of the Trust, (ii) any action taken or omission by any prior
service provider, (iii) Sunstone's reliance on, or use of information, data,
records and documents received by Sunstone from any party referenced in Section
2 hereof or other representative of the Trust.
(b) Sunstone assumes no responsibility hereunder, and shall not be liable,
for any default, 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 its control.
(c)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 of every nature and character (collectively
"Losses") 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 (i) Sunstone's
actions or omissions except to the extent 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; (ii)
Sunstone's reliance on, or use of information, data, records and documents
received by Sunstone from any party referenced in Section 2 hereof or other
representative of the Trust, or (iii) the reliance on, or the implementation of,
any instructions, directions or any other requests of the Trust. As used in this
Section 5, 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.
(d) 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.
(e) In no event and under no circumstances shall Sunstone, its affiliates
or any of its or their officers, directors, members, 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.
6. Term
(a) This Agreement shall become effective with respect to each Fund listed
on Schedule A hereof as of the date hereof and, with respect to each Fund not in
existence on that date, on the date an amendment to Schedule A to this Agreement
relating to that Fund is executed. This Agreement shall continue in effect with
respect to each Fund until August 31, 2003 (the "Initial Term"). Thereafter, if
not terminated as provided herein, this Agreement shall continue automatically
in effect as to each Fund for successive annual periods.
(b) Either party may terminate this Agreement at the end of the Initial
Term or at the end of any successive annual term (the "Termination Date") by
giving the other party a written notice not less than one hundred twenty (120)
days prior to the end of the respective term. The terms of this Agreement shall
not be waived, altered, modified, amended or supplemented in any manner
whatsoever except by a written instrument signed by Sunstone and the Trust.
(c) Notwithstanding anything herein to the contrary, upon the termination
of this Agreement or the liquidation of a Fund or the Trust, Sunstone shall
deliver the records of the Fund(s) and/or Trust as the case may be, in the form
maintained by Sunstone (to the extent permitted by applicable license
agreements), to the Trust or person(s) designated by the Trust at the Trust's
cost and expense, and thereafter the Trust or its designee shall be solely
responsible for preserving the records for the periods required by all
applicable laws, rules and regulations. In addition, in the event of termination
of this Agreement, or the proposed liquidation or merger of the Trust or a
Fund(s), and the Trust requests Sunstone to provide services in connection
therewith, Sunstone shall provide such services and be entitled to such
compensation as the parties may mutually agree.
(d) Notwithstanding anything herein to the contrary, and in accordance with
the terms of this Section 6(d), 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 ("Early Termination
Date") which shall be not less than one hundred twenty (120) days after the date
notice is deemed given in accordance with Section 9. If the Trust replaces
Sunstone as the fund accounting service provider 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, then the Trust shall pay to
Sunstone as liquidated damages an amount equal to the balance of the 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 such fees, the parties shall assume that the Funds' assets will remain
constant for the balance of the contract term. 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
fund accounting 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.
7. Non-Exclusivity
The services of Sunstone rendered to the Trust are not deemed to be
exclusive. Sunstone may render such services and any other services to others,
including other investment companies. The Trust recognizes that from time to
time directors, officers and employees of Sunstone may serve as trustees,
directors, officers and employees of other entities (including other investment
companies), and that Sunstone or its affiliates may enter into other agreements
with such other entities.
8. Governing Law; Invalidity
This Agreement shall be governed by Wisconsin law, excluding the laws on
conflicts of laws. To the extent that the applicable laws of the State of
Wisconsin, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control, and nothing herein shall
be construed in a manner inconsistent with the 1940 Act or any rule or order of
the Commission thereunder. Any provision of this Agreement which may be
determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent of the parties.
9. Notices
Any notice required or permitted to be given by either party to the other
shall be in writing and shall be deemed to have been given when sent by
registered or certified mail, postage prepaid, return receipt requested, as
follows: Notice to the Sunstone shall be sent to Sunstone Financial Group, Inc.,
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, Xxxxxxxxx, 00000, Attention:
Xxxxxx X. Xxxxxxx, with a copy to General Counsel, and notice to the Trust shall
be sent to Professionally Managed Portfolios, c/o The Xxxxxxxxx Group, 0000 X.
Xxxxxxxxx Xxx, Xxxxx 000, Xxxxxxxx, XX 00000, Attention: President.
10. Entire Agreement
This Agreement constitutes the entire Agreement of the parties hereto.
11. 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.
12. Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original agreement but such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the day and year first above
written.
PROFESSIONALLY MANAGED PORTFOLIOS
By:____________________________________________
Authorized Officer
SUNSTONE FINANCIAL GROUP, INC.
By:____________________________________________
Authorized Officer
