PROFESSIONALLY MANAGED PORTFOLIOS
OPERATING EXPENSES AGREEMENT
THIS OPERATING EXPENSES AGREEMENT (the "Agreement") is effective as of June
28, 1999, by and between PROFESSIONALLY MANAGED PORTFOLIOS, a Delaware business
trust (the "Trust"), on behalf of Portfolio 21, a series of the Trust and the
Advisor of such Fund, Progressive Investment Management.
WITNESSETH:
WHEREAS, the Advisor renders advice and services to the Fund pursuant to
the terms and provisions of an Investment Management Agreement between the Trust
and the Advisor dated May 18, 1999 (the "Investment Management Agreement"); and
WHEREAS, the Fund is responsible for, and has assumed the obligation for,
payment of certain expenses pursuant to the Investment Management Agreement that
have not been assumed by the Advisor; and
WHEREAS, the Advisor desires to limit the Fund's respective Operating
Expenses (as that term is defined in Paragraph 2 of this Agreement) pursuant to
the terms and provisions of this Agreement, and the Trust (on behalf of the
Fund) desires to allow the Advisor to implement those limits;
NOW THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties, intending to be legally bound hereby,
mutually agree as follows:
1. Limit on Operating Expenses. The Advisor hereby agrees to limit the
Fund's current Operating Expenses to an annual rate, expressed as a percentage
of the Fund's average annual net assets, as listed in Appendix A (the "Annual
Limits"). In the event that the Fund's current Operating Expenses, as accrued
each month, exceed its Annual Limit, the Advisor will pay to the Fund, on a
monthly basis, the excess expense within 30 days of being notified that an
excess expense payment is due.
2. Definition. For purposes of this Agreement, the term "Operating
Expenses" with respect to the Fund is defined to include all expenses necessary
or appropriate for the operation of the Fund including the Advisor's investment
advisory or management fee detailed in the Investment Management Agreement and
other expenses described in the Investment Management Agreement, but does not
include any front--end or contingent deferred loads, taxes, interest, brokerage
commissions, expenses incurred in connection with any merger or reorganization
or extraordinary expenses such as litigation.
3. Reimbursement of Fees and Expenses. The Advisor retains its right to
receive reimbursement of any excess expense payments paid by it pursuant to this
Agreement under the same terms and conditions as it is permitted to receive
reimbursement of reductions of its investment management fee under the
Investment Management Agreement.
4. Term. This Agreement shall become effective on the date specified herein
and shall remain in effect indefinitely unless sooner terminated as provided in
Paragraph 5 of this Agreement.
S. Termination. This Agreement may be terminated at any time, and without
payment of any penalty, by the Board of Trustees of the Trust, on behalf of the
Fund, upon sixty (60) days' written notice to the Advisor. This Agreement will
automatically terminate, with respect to the Fund listed in Appendix A, if the
Investment Management Agreement for the Fund is terminated, with such
termination effective upon the effective date of the Investment Management
Agreement's termination for that Fund.
6. Assignment. This Agreement and all rights and obligations hereunder may
not be assigned without the written consent of the other party.
7. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute or rule, or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected thereby.
8. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Arizona without giving effect to the
conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the Investment Company Act of 1940, as amended and the
Investment Advisers Act of 1940, as amended and any rules and regulations
promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all on the day and
year first above written.
PROFESSIONALLY MANAGED PROGRESSIVE INVESTMENT
PORTFOLIOS MANAGEMENT
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇: Treasurer Title: President
Appendix A
Fund Operating Expense Limit
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Portfolio 21 1.50%