COMPREHENSIVE MANAGEMENT AGREEMENT
THIS COMPREHENSIVE MANAGEMENT AGREEMENT is made as of the 29th day of
September, 1998, by and between THE PURISIMA FUNDS, a Delaware business trust
(hereinafter called the "Trust"), on behalf of each series of the Trust listed
in APPENDIX A hereto, as such may be amended from time to time (each series
hereinafter referred to individually as a "Fund" and collectively as the
"Funds") and XXXXXX INVESTMENTS, INC., a California corporation (hereinafter
called the "Manager").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company,
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
supplying investment advice and investment management services, as an
independent contractor; and
WHEREAS, the Trust desires to retain the Manager to render investment
advice and investment management services to the Funds pursuant to the terms and
provisions of this Agreement, and the Manager is interested in furnishing said
advice and services;
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. APPOINTMENT OF MANAGER. The Trust hereby employs the Manager, and
the Manager hereby accepts such employment, to render investment advice and
investment management services with respect to the assets of the Funds for the
period and on the terms set forth in this Agreement, subject to the supervision
and direction of the Trust's Board of Trustees.
2. DUTIES OF MANAGER.
(a) GENERAL DUTIES. The Manager shall, except as otherwise
provided for herein, render or make available all services needed for the
management of the Funds and shall, as part of its duties hereunder, (i) furnish
the Funds with advice and recommendations with respect to the investment of each
Fund's assets and the purchase and sale of portfolio securities for the Funds,
including the taking of such other steps as may be necessary to implement such
advice and recommendations; (ii) furnish the Funds with reports, statements and
other data on securities, economic conditions and other pertinent subjects which
the Trust's Board of Trustees may reasonably request; (iii) manage the
investments of the Funds, subject to the ultimate supervision and direction of
the Trust's Board of Trustees; (iv) prepare and coordinate reports and other
materials with respect to the Funds to be supplied to the Board of Trustees of
the Trust,
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including, without limitation, such periodic and special reports with respect to
each Fund's investment activities as the Board may reasonably request; (v)
provide personnel, office space, facilities and equipment as may be needed by
the Funds in their day-to-day operations; (vi) provide persons satisfactory to
the Trust's Board of Trustees to act as officers and employees of the Trust and
the Funds (such officers and employees, as well as certain Trustees, may be
trustees, directors, officers, or employees of the Manager or its affiliates);
and (vii) provide the Funds with Fund accounting, including without limitation
furnishing assistance and personnel necessary to price the portfolio securities
of each Fund, calculate each Fund's net asset value for purposes of reporting to
the public and other purposes, and prepare and maintain the books and records
with respect to the Fund's investment portfolio as required by applicable laws.
(b) BROKERAGE. The Manager shall place orders for the purchase
and sale of securities either directly with the issuer or with a broker or
dealer selected by the Manager. In placing each Fund's securities trades, it is
recognized that the Manager will give primary consideration to securing the most
favorable price and efficient execution, in a reasonable effort to ensure that
each Fund's total cost or proceeds in each transaction will be the most
favorable under all the circumstances. Within the framework of this policy, the
Manager may consider the financial responsibility, research and investment
information, and other services provided by brokers or dealers who may effect or
be a party to any such transaction or other transactions to which other clients
of the Manager may be a party.
It is also understood that it is desirable for the Funds that the
Manager have access to investment and market research and securities and
economic analyses provided by brokers and others. It is also understood that
brokers providing such services may execute brokerage transactions at a higher
cost to the Funds than might result from the allocation of brokerage to other
brokers on the basis of seeking the most favorable price and efficient
execution. Therefore, the purchase and sale of securities for the Funds may be
made with brokers who provide such research and analysis, subject to review by
the Trust's Board of Trustees from time to time. It is understood by both
parties that the Manager may select broker-dealers for the execution of the
Funds' portfolio transactions who provide research and analysis which the
Manager may lawfully and appropriately use in its investment management and
advisory capacities, whether or not such research and analysis may also be
useful to the Manager in connection with its services to other clients.
On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of one or more of the Funds as well as of other
clients, the Manager, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be so purchased or sold in order to
obtain the most favorable price or lower brokerage commissions and the most
efficient execution. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made by the
Manager in the manner it considers to
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be the most equitable under the circumstances and consistent with its fiduciary
obligations to the Funds and to such other clients.
3. BEST EFFORTS AND JUDGMENT. The Manager shall use its best judgment
and efforts in rendering the advice and services to the Funds as contemplated by
this Agreement.
4. INDEPENDENT CONTRACTOR. The Manager shall, for all purposes herein,
be deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized to do so, have no authority to act for or represent the
Trust or the Funds in any way, or in any way be deemed an agent for the Trust or
for the Funds. It is expressly understood and agreed that the services to be
rendered by the Manager to the Funds under the provisions of this Agreement are
not to be deemed exclusive, and the Manager shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be materially impaired thereby.
5. MANAGER'S PERSONNEL. The Manager shall, at its own expense, maintain
such staff and employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Manager shall be
deemed to include persons employed or retained by the Manager to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Manager or the Trust's Board of Trustees may desire and reasonably request.
6. REPORTS BY FUNDS TO MANAGER. Each Fund will from time to time
furnish to the Manager detailed statements of its investments and assets, and
information as to its investment objective or objectives and needs, and will
make available to the Manager such financial reports, proxy statements, legal
and other information relating to its investments as may be in its possession or
available to it, together with such other information as the Manager may
reasonably request.
7. EXPENSES.
(a) With respect to the operation of each Fund, the Manager is
responsible for (i) the compensation of any of the Trust's Trustees, officers,
and employees who are affiliates of the Manager (but not the compensation of
employees performing services in connection with expenses which are the Fund's
responsibility under Subparagraph 7(b) below), (ii) providing office space and
equipment reasonably necessary for the operation of the Funds, (iii) costs and
expenses of pricing and calculating its net asset value and of maintaining its
books of account required under the 1940 Act, including the pricing of each
Fund's portfolio securities and the calculation of its daily net asset value,
(iv) expenditures in connection with meetings of each Fund's Shareholders and
the Trust's Board of Trustees (other than compensation to the disinterested
Trustees described below); (v) charges and expenses of each Fund's
administration, transfer agency, custody, legal, accounting and auditing
services; (vi) the cost of preparing and printing reports, proxy statements,
prospectuses and statement of additional information of the
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Funds or other communications for distribution to existing shareholders; (viii)
fees and expenses (including legal fees) of registering and maintaining
registration of the Funds' shares for sale under federal and applicable state
and foreign securities laws; and (ix) all expenses of maintaining and servicing
shareholder accounts, including all charges for transfer, shareholder record
keeping, dividend disbursing, redemption, and other agents for the benefit of
the Funds (including, without limitation, fund accounting and administration
agents), if any.
(b) Each Fund is responsible for and has assumed the
obligation for payment of all of its expenses, other than as stated in
Subparagraph 7(a) above, including but not limited to: (i) brokerage and
commission expenses; (ii) federal, state, local or foreign taxes, including
issue and transfer taxes, incurred by or levied on each Fund; (iii) interest
charges on any borrowings; (iv) the compensation of the Trust's Trustees who are
not affiliated with the Manager; (v) payment of all investment advisory and
management fees (including the fees payable to the Manager under this
Agreement); (vi) insurance premiums on property or personnel of each Fund which
inure to its benefit, including liability and fidelity bond insurance; and (vii)
all other charges and costs of its operation and any extraordinary and
non-recurring expenses approved by a majority of the Fund's disinterested
Trustees, except as herein otherwise prescribed.
(c) To the extent the Manager incurs any costs by assuming
expenses which are an obligation of a Fund as set forth herein, such Fund shall
promptly reimburse the Manager for such costs and expenses, except to the extent
the Manager has otherwise agreed to bear such expenses. To the extent the
services for which a Fund is obligated to pay are performed by the Manager, the
Manager shall be entitled to recover from such Fund to the extent of the
Manager's actual costs for providing such services.
8. INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a) Each Fund shall pay to the Manager, and the Manager agrees
to accept, as full compensation for all investment management and advisory
services furnished or provided to such Fund pursuant to this Agreement, a
management fee as set forth in the Fee Schedule attached hereto as APPENDIX B,
as may be amended in writing from time to time by the Trust and the Manager.
(b) The management fee shall be accrued daily by each Fund and
paid to the Manager monthly.
(c) The initial fee under this Agreement shall be payable
monthly following the effective date of this Agreement and shall be prorated as
set forth below. If this Agreement is terminated prior to the end of any month,
the fee to the Manager shall be prorated for the portion of any month in which
this Agreement is in effect which is not a complete month according to the
proportion which the number of calendar days in the month during which the
Agreement is in effect bears to the number of calendar days in the month, and
shall be payable within ten (10) days after the date of termination.
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(d) The Manager voluntarily may reduce any portion of the
compensation or reimbursement of expenses due to it pursuant to this Agreement
and may agree to make payments to limit the expenses that are the responsibility
of a Fund under this Agreement. 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
Manager hereunder or to continue future payments. Any such reduction will be
agreed upon before accrual of the related expense or fee and will be estimated
daily. Any fee withheld or voluntarily reduced and Fund expense paid by the
Manager voluntarily or pursuant to an agreed upon expense cap shall, to the
extent approved by the Trust's disinterested Trustees, be reimbursed by the
appropriate Fund to the Manager in the first, second or third (or any
combination thereof) fiscal year next succeeding the fiscal year of the
withholding, reduction or payment to the extent permitted by applicable law if
the aggregate expenses for the next succeeding fiscal year, second succeeding
fiscal year or third succeeding fiscal year do not exceed the expense limitation
to which the Manager has agreed.
(e) The Manager may agree not to require payment of any
portion of the compensation or reimbursement of expenses otherwise due to it
pursuant to this Agreement prior to the time such compensation or reimbursement
has accrued as a liability of the Fund. Any such agreement shall be applicable
only with respect to the specific items covered thereby and shall not constitute
an agreement not to require payment of any future compensation or reimbursement
due to the Manager hereunder.
9. FUND SHARE ACTIVITIES OF MANAGER'S OFFICERS AND EMPLOYEES. The
Manager agrees that neither it nor any of its officers or employees shall take
any short position in the shares of the Funds. This prohibition shall not
prevent the purchase of such shares by any of the officers or bona fide
employees of the Manager or any trust, pension, profit-sharing or other benefit
plan for such persons or affiliates thereof, at a price not less than the net
asset value thereof at the time of purchase, as allowed pursuant to rules
promulgated under the 1940 Act.
10. CONFLICTS WITH TRUST'S GOVERNING DOCUMENTS AND APPLICABLE LAWS.
Nothing herein contained shall be deemed to require the Trust or the Funds to
take any action contrary to the Trust's Agreement and Declaration of Trust,
By-Laws, or any applicable statute or regulation, or to relieve or deprive the
Board of Trustees of the Trust of its responsibility for and control of the
conduct of the affairs of the Trust and Funds.
11. MANAGER'S LIABILITIES.
(a) In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties hereunder on the
part of the Manager, the Manager shall not be subject to liability to the Trust
or the Funds or to any shareholder of the Funds for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
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that may be sustained in the purchase, holding or sale of any security or other
asset or instrument by the Funds.
(b) The Funds shall indemnify and hold harmless the Manager
and the shareholders, directors, officers and employees of the Manager (any such
person, an "Indemnified Party") against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expense and reasonable legal fees
incurred in connection therewith) arising out of the Indemnified Party's
performance or non-performance of any duties under this Agreement, provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder or by reason of reckless disregard of its
obligations and duties under this Agreement.
(c) No provision of this Agreement shall be construed to
protect any Trustee or officer of the Trust, or officer of the Manager, from
liability in violation of Sections 17(h) and (i) of the 1940 Act.
12. NON-EXCLUSIVITY. The Trust's employment of the Manager is not an
exclusive arrangement, and the Trust may from time to time employ other
individuals or entities to furnish it with the services provided for herein. In
the event this Agreement is terminated with respect to any Fund, this Agreement
shall remain in full force and effect with respect to any and all other Funds
listed on APPENDIX A hereto, as the same may be amended.
13. TERM. This Agreement shall become effective at the time the Trust's
initial Registration Statement under the Securities Act of 1933 with respect to
the shares of the Trust is declared effective by the Securities and Exchange
Commission and shall remain in effect for a period of two (2) years, unless
sooner terminated as hereinafter provided. This Agreement shall continue in
effect as to each Fund after such initial two-year period for additional periods
not exceeding one (l) year so long as such continuation is approved with respect
to such Fund at least annually by (i) the Board of Trustees of the Trust or by
the vote of a majority of the outstanding voting securities of such Fund and
(ii) the vote of a majority of the Trustees of the Trust who are not parties to
this Agreement nor interested persons thereof, cast in person at a meeting
called for the purpose of voting on such approval.
14. TERMINATION. This Agreement may be terminated by the Trust on
behalf of any one or more of the Funds, without payment of any penalty, by the
Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities of a Fund, upon sixty (60) days' prior written notice to the
Manager, and by the Manager upon sixty (60) days' prior written notice to a
Fund.
15. TERMINATION BY ASSIGNMENT. This Agreement shall terminate
automatically in the event of any transfer or assignment thereof, as defined in
the 1940 Act.
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16. TRANSFER, ASSIGNMENT. This Agreement may not be transferred,
assigned, sold or in any manner hypothecated or pledged without the affirmative
vote or written consent of the holders of a majority of the outstanding voting
securities of each Fund.
17. 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.
18. DEFINITIONS. The terms "majority of the outstanding voting
securities" and "interested persons" shall have the meanings as set forth in the
1940 Act.
19. NOTICE OF DECLARATION OF TRUST. The Manager agrees that the Trust's
obligations under this Agreement shall be limited to the Funds and to their
respective assets, and that the Manager shall not seek satisfaction of any such
obligation from the shareholders of the Funds nor from any Trustee, officer,
employee or agent of the Trust or the Funds.
20. 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.
21. 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 1940 Act and the Investment Advisors Act of 1940 and any
rules and regulations promulgated thereunder.
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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.
By: _______________________ By: _______________________
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: President Title: President
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THE PURISIMA FUNDS
APPENDIX A
to the Investment Management Agreement
The provisions of the Comprehensive Management Agreement between the Trust and
the Manager apply to the following series of the Trust:
Fund Effective Date
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1. The Purisima Pure American Fund September 29, 1998
2. The Purisima Pure Foreign Fund September 29, 1998
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THE PURISIMA FUNDS
APPENDIX B
to the Investment Management Agreement
Each Fund shall pay to the Manager, as full compensation for all investment
management, advisory and administrative services furnished or provided to such
Fund pursuant to the Comprehensive Management Agreement, a management fee based
upon each Fund's average daily net assets at the following per annum rates:
Fund Fee
---- ---
1. The Purisima Pure American Fund 1.50%
2. The Purisima Pure Foreign Fund 1.50%
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