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/ Robert M. Slotky                  By: /s/ Leslie Christian
    --------------------                      --------------------
    Robert M. Slotky                          Leslie Christian

Title:  Treasurer                         Title: President



                                   Appendix A

Fund                                                     Operating Expense Limit
----                                                     -----------------------

Portfolio 21                                                     1.50%