PROFESSIONALLY MANAGED PORTFOLIOS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this day of , 1998 by and between PROFESSIONALLY
MANAGED PORTFOLIOS (the "Trust"), a Massachusetts business trust and ▇▇▇▇▇▇
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 the Avondale ▇▇▇▇▇▇ 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:
l. 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: (l) 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 (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
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 ▇▇▇▇ ▇▇▇) 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.
The Fund may use the name Avondale ▇▇▇▇▇▇ Total Return Fund or any name
derived from or using the name Avondale ▇▇▇▇▇▇ 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 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; 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 its 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 the net assets of the Fund as of the close of
business each business day according to the following schedule:
0.70% on the first $200 million of net assets; 0.60% on the next
$300 million of net assets; and 0.50% on net assets exceeding $500
million.
(b) In the event the expenses of the Fund (including the fees
of the Advisor 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 will reduce its fees by the amount of such
excess. Any such reductions are subject to readjustment during the
year. 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 to the extent
permitted by the applicable state law if the aggregate expenses for
the next 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 for a period of two years from
that date, 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 ▇▇▇▇ ▇▇▇) 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 ▇▇▇▇ ▇▇▇) 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. This
agreement has 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
_______________________________________
By:
Title:
ATTEST:
▇▇▇▇▇▇ CAPITAL MANAGEMENT, LLC
________________________________________
By:
Title:
ATTEST: