PROFESSIONALLY MANAGED PORTFOLIOS
OPERATING EXPENSES LIMITATION AGREEMENT
THIS OPERATING EXPENSES LIMITATION AGREEMENT (the "Agreement") is effective
as of the 11th day of June, 2003, by and between Professionally Managed
Portfolios, a Massachusetts business trust (the "Trust"), on behalf of The
Technical Chart Fund (the "Fund"), a series of the Trust, and the Advisor of the
Fund, Xxxxxx Management, LLC (the "Advisor").
WITNESSETH:
WHEREAS, the Advisor renders advice and related services to the Fund
pursuant to the terms and provisions of an Investment Advisory Agreement between
the Trust and the Advisor dated as of the 11th day of June 2003, (the
"Investment Advisory Agreement"); and
WHEREAS, the Fund is responsible for, and has assumed the obligation for,
payment of certain expenses pursuant to the Investment Advisory Agreement that
have not been assumed by the Advisor; and
WHEREAS, the Advisor desires to limit the Fund's 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 in any fiscal year to an annual rate,
expressed as a percentage of the Fund's average daily net assets to the amount
listed in Appendix A (the "Annual Limit"). In the event that the current
Operating Expenses of the Fund, as accrued each month, exceed its Annual Limit,
the Advisor will pay the Fund on a monthly basis, after offset of any investment
management fees that were waived or reduced by the Advisor, 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
management fee detailed in the Investment Advisory Agreement, any Rule 12b-1
fees and other expenses described in the Investment Advisory Agreement, but does
not include any front-end or contingent deferred loads, taxes, leverage
interest, brokerage commissions, expenses incurred in connection with any merger
or reorganization, extraordinary expenses such as litigation and
indemnification, or other expenses not incurred in the ordinary course of the
Fund's business.
3. REIMBURSEMENT OF FEES AND EXPENSES. If during any month during which
this Agreement is in effect, the estimated annualized Operating Expenses of a
Fund for that month are less than the Annual Limit, the Advisor shall be
entitled to recoup from the Fund any investment management fees waived or
reduced and any other payments remitted by the Advisor to the Fund pursuant to
Section 1 of this Agreement during any of the previous thirty-six (36) months
(the "Recoupment Amount"), to the extent that the Fund's annualized Operating
Expenses plus the amount so recouped equals, for such month, the Annual Limit
provided in Schedule A, provided that such amount paid to the Advisor will in no
event exceed the total Recoupment Amount and will not include any amounts
previously recouped. The Fund will pay any Recoupment Amount pursuant to this
Section within 30 days of the end of the month with respect to which such
Recoupment Amount relates.
4. YEAR-END ADJUSTMENT. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that (i) the amount of investment management fees
waived or reduced and any other payments remitted by the Advisor to the Fund
pursuant to Section 1 of this Agreement with respect to the prior fiscal year
shall equal the amount that exceeds the Annual Limit; and (ii) the actual
Operating Expenses of the Fund for the prior fiscal year (including any
recoupment payments with respect to such fiscal year pursuant to Section 3 of
this Agreement) do not exceed the Annual Limit.
5. TERM. This Agreement shall become effective on the date specified herein
and shall remain in effect indefinitely and for a period of not less than one
year, unless sooner terminated as provided in Section 6 of this Agreement.
6. 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 may
not be terminated by the Advisor without the consent of the Board of Trustees of
the Trust, which consent will not be unreasonably withheld. This Agreement will
automatically terminate if the Investment Advisory Agreement is terminated, with
such termination effective upon the effective date of the Investment Advisory
Agreement's termination.
7. NOTICE. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, addressed and
delivered, or mailed postpaid to the other party at the principal place of
business of such party.
8. AMENDMENTS. This Agreement may be amended only by a written agreement
signed by each of the parties.
9. ASSIGNMENT. This Agreement and all rights and obligations hereunder may
not be assigned without the written consent of the other party.
10. 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.
11. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California 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, and the Investment Advisers
Act of 1940, 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 PORTFOLIOS
on behalf of The Technical Chart Fund
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
XXXXXX MANAGEMENT, LLC
By: /s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
Title: Managing Member
Appendix A
Fund Operating Expense Limit
The Technical Chart Fund 2.00%
