OPERATING EXPENSES AGREEMENT
THIS OPERATING EXPENSES AGREEMENT (the "Agreement") is effective as of the
1st day of September 1999, by and between THE PURISIMA FUNDS, a Delaware
business trust (hereinafter called the "Trust"), on behalf of The Purisima Total
Return Fund (hereinafter referred to as the "Fund"), and XXXXXX INVESTMENTS,
INC., a corporation organized and existing under the laws of the State of
California (hereinafter called the "Manager").
WITNESSETH:
WHEREAS, the Manager renders advice and services to the Fund pursuant to
the terms and provisions of an Investment Management Agreement between the Trust
and the Manager dated October 28, 1996, and amended April 16, 1998 (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 Manager; and
WHEREAS, the Manager 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 Manager to implement those limits;
NOW THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties hereto, intending to be legally bound hereby,
mutually agree as follows:
1. LIMIT ON OPERATING EXPENSES. The Manager hereby agrees to limit each
Fund's Operating Expenses to an annual rate of 1.50%.
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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 Manager's investment
advisory or management fee under the Investment Management Agreement, and other
expenses described in the Investment Management Agreement, and Rule 12b-1 fees,
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 Manager, under Subparagraph 8(d)
of the Investment Management Agreement, retains its right to receive
reimbursement of reductions of its investment management fee and Operating
Expenses paid by it that are not its responsibility under the Investment
Management Agreement.
4. TERM. This Agreement shall become effective on the date specified herein
and shall remain in effect for a rolling ten (10) year period, unless sooner
terminated as provided in Paragraph 5 of this Agreement. On an annual basis,
this Agreement shall be extended for one (1) additional year for purposes of
maintaining the term of the Agreement at a ten (10) year period so long as such
extension is approved for each Fund by the Board of Trustees of the Trust (and
separately by the disinterested Trustees of the Trust).
5. TERMINATION. This Agreement may be terminated by the Trust on behalf of
the Fund at any time without payment of any penalty or by the Board of Trustees
of the Trust, upon sixty (60) days' written notice to the Manager. The Manager
may decline to renew this Agreement by written notice to the Trust at least
thirty (30) days before its annual expiration date.
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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. CAPTIONS. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
9. 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, 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.
THE PURISIMA FUNDS, XXXXXX INVESTMENTS, INC.
on behalf of The Purisima
Total Return Fund
By: By:
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Title: Title:
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