1
Exhibit 9(b)-2
FORM OF
SUB-ADMINISTRATION AGREEMENT
May 1, 1997
First Data Investor Services Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Sierra Fund Administration Corporation ("Sierra
Administration"), a corporation organized under the laws of the State of
California hereby confirms its agreement with First Data Investor Services
Group, Inc. ("First Data"), a corporation organized under the laws of the
Commonwealth of Massachusetts, regarding sub-administration services to be
provided by First Data in connection with each of the investment funds offered
from time to time by Sierra Trust Funds (individually, a "Fund," and together,
the "Funds"). First Data agrees to provide services upon the following terms and
conditions:
1. Investment Description; Appointment
Sierra Trust Funds, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (the "Trust"), desires to employ
the Trust's capital by investing and reinvesting (a) investments of the kind and
in accordance with the limitations specified in (i) the Trust's Master Trust
Agreement dated February 22, 1989, as amended from time to time (the "Trust
Agreement"), and (ii) the prospectus(es) (the "Prospectus") and Statement of
Additional Information relating to the Funds contained in the Trust's
Registration Statement on Form N-1A filed with the Securities and Exchange
Commission (the "Registration Statement") and (b) in such manner and to such
extent as may from time to time be approved by the Trust's Board of Trustees.
Copies of the Prospectus, the Statement of Additional Information and the Trust
Agreement have been submitted to Sierra Administration and First Data. The Trust
has agreed with Sierra Administration to provide copies of all amendments to the
Prospectus, the Statement of Additional Information and the Trust Agreement to
Sierra Administration and the sub-administrator on an on-going basis. Sierra
Administration as the administrator, desires to employ and hereby appoints First
Data to act as the Funds' sub-administrator. First Data accepts this appointment
and agrees to furnish the services described herein for the compensation set
forth below.
2
2. Services as Sub-Administrator
Subject to the supervision and direction of Sierra Administration, the
Trust's administrator, First Data will, at the direction of and to the extent
specifically delegated to it from time to time by Sierra Administration, (a)
supply the Trust with office facilities (which may be in First Data's own
offices), statistical and research data, data processing services, clerical,
accounting and bookkeeping services (including, but not limited to, the
calculation of (i) the net asset value of shares of each Fund, (ii) applicable
sales charges and (iii) distribution fees), internal auditing and legal
services, internal executive and administrative services, and stationery and
office supplies; (b) prepare reports to the Trust's shareholders and materials
for the Board of Trustees of the Trust; (c) prepare tax returns and reports to
and filings with the Securities and Exchange Commission and state regulatory
authorities; and (d) assist in other aspects of the administration of the Trust.
3. Compensation
(a) Sierra Administration will compensate First Data for its
services rendered under this Agreement in accordance with the fees set forth in
Schedule A attached hereto.
(b) The parties hereto will agree upon the compensation for
acting as sub-administrator for any Fund hereafter established and designated,
and at the time that First Data commences serving as such for said Fund, such
agreement shall be reflected in a revised Schedule A hereto, dated and signed by
an officer of each party hereto.
4. Expenses
First Data will bear all expenses in connection with the performance of
its services under this Agreement. The Trust will bear certain other expenses to
be incurred in its operation, including: organizational expenses; taxes,
interest, brokerage fees and commissions, if any; fees of trustees of the Trust
who are not officers, directors or employees of each Fund's advisor,
sub-advisor, administrator or sub-administrator or any of their affiliates;
Securities and Exchange Commission fees and state Blue Sky qualification fees;
out-of-pocket expenses of custodians, transfer and dividend disbursing agents
and First Data and transaction charges of custodians; insurance premiums;
outside auditing and legal expenses; costs of maintenance of the Trust's
existence; costs attributable to investor services, including, without
limitation, telephone and personnel expenses; costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders; costs of shareholders' reports
and meetings of the shareholders of the Trust and of the officers or Board of
Trustees of the Trust; and any extraordinary expenses. In addition, each Fund
pays a distribution fee pursuant to the terms of a Distribution Plan adopted
under Rule 12b-1 of the Investment Company Act of 1940, as amended (the "1940
Act").
2
3
5. Standard of Care
First Data shall exercise its best judgment in rendering the services
listed in Paragraph 2 above. First Data shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except (a) a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services (in which case any award of damages shall be limited to the period and
the amount set forth in Section 36(b)(3) of the ▇▇▇▇ ▇▇▇) or (b) a loss
resulting from willful misfeasance, bad faith or negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement (each such breach, act or omission described in
(a) or (b) shall be referred to as "Disqualifying Conduct").
6. Term of Agreement
This Agreement shall become effective as of the date of this Agreement,
as indicated above, and shall continue for an initial two year term and shall
continue automatically from year-to-year thereafter unless terminated in
accordance with the following sentence. This Agreement is terminable at any
time, without penalty, on 60 days' written notice, by the Board of Trustees of
the Trust or Sierra Administration or upon 90 days' written notice, by First
Data.
7. Service to Other Companies or Accounts
Sierra Administration understands that First Data now acts, will
continue to act and may act in the future as administrator and/or
sub-administrator to other investment companies or series of investment
companies, and the Trust has no objection to First Data's so acting. Sierra
Administration understands that the persons employed by First Data to assist in
the performance of First Data's duties under this Agreement may not devote their
full time to such service and nothing contained in this Agreement shall be
deemed to limit or restrict the right of First Data or any affiliate of First
Data to engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
8. Representations of the Trust
The Trust has represented to Sierra Administration that (i) a copy of
the Trust Agreement is on file in the office of the Secretary of the
Commonwealth of Massachusetts, (ii) the appointment of First Data has been duly
authorized and (iii) it has acted and will continue to act in conformity with
the requirements of the 1940 Act and other applicable laws.
3
4
9. Indemnification
Sierra Administration shall indemnify and hold harmless First Data from
and against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses), howsoever arising from
or in connection with this Agreement or the performance by First Data of its
duties hereunder; provided, however, that nothing contained herein shall require
that First Data be indemnified for Disqualifying Conduct.
10. Limitation of Liability
This Agreement has been executed on behalf of Sierra Administration by
the undersigned officer of Sierra Administration in his capacity as an officer.
The obligations of this Agreement with respect to each Fund shall be binding
only upon the assets and property of each such Fund and not upon the assets and
property of any other investment fund (i.e., Fund) of the Trust and shall not be
binding upon any Trustee, officer or shareholder of the Trust and/or the Trust
individually.
11. Assignment and Subcontracting
This Agreement, its benefits and obligations shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned or otherwise transferred
by either party hereto, without the prior written consent of the other party,
which consent shall not be unreasonably withheld; provided, however, that First
Data may, in its sole discretion, assign all its right, title and interest in
this Agreement to an affiliate, parent or subsidiary, or to the purchaser of
substantially all of its business. First Data may, in its sole discretion,
engage subcontractors to perform any of the obligations contained in this
Agreement to be performed by First Data.
12. Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto.
13. Governing Law
This Agreement shall be governed in accordance with the laws of the
Commonwealth of Massachusetts.
4
5
If the foregoing accurately sets forth our agreement, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
SIERRA FUND
ADMINISTRATION CORPORATION
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer, Treasurer and
Secretary
Accepted:
FIRST DATA INVESTOR SERVICES GROUP, INC.
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President, Division Manager
5
6
SCHEDULE A
FUNDS
Global Money Fund
U.S. Government Money Fund
California Money Fund
Short Term High Quality Bond Fund
Short Term Global Government Fund
U.S. Government Fund
Corporate Income Fund
California Municipal Fund
Florida Insured Municipal Fund
California Insured Intermediate Municipal Fund
National Municipal Fund
Growth and Income Fund
Growth Fund
Emerging Growth Fund
International Growth Fund
Target Maturity 2002 Fund
FEE SCHEDULE*
AVERAGE DAILY NET ASSET GROSS BASIS POINTS MAXIMUM NET BASIS
ASSET INCREMENT LEVEL (INCREMENTAL ASSETS) WAIVER (1) POINTS
----------------- ----- -------------------- ---------- ---------
$1.6B $1,710,000 $200,000 $1,510,000
Next $1.3B $2.9B 4.52 BP $300,000 3.75 BP
Next $1.7B $4.6B 4.29 BP $400,000 3.70 BP
Next $3.1B $7.7B 3.62 BP $800,000 2.33 BP
* All fees are per annum.
(1) First Data will participate with Sierra Administration and Sierra
Investment Advisors Corporation ("Sierra Advisors") in waiving fees as
specified below and will reduce the waivers in conjunction with Sierra
Administration and Sierra Advisors reducing their waivers as measured
by the residual revenue to Sierra Administration and Sierra Advisors as
defined below.
6
7
SCHEDULE A
(CONTINUED)
POST WAIVER
ASSET MEASUREMENT NET
LEVEL POINTS (2) WAIVER
----- ---------- ------
$1.6B <.20% of ▇▇▇* $200,000
>.20% of ▇▇▇ $100,000
>.25% of ▇▇▇ $ 0
$2.9B <.20% of ▇▇▇ $300,000
>.20% of ▇▇▇ $150,000
>.25% of ▇▇▇ $ 0
$4.6B <.20% of ▇▇▇ $400,000
>.20% of ▇▇▇ $200,000
>.25% of ▇▇▇ $ 0
$7.7B <.20% of ▇▇▇ $800,000
>.20% of ▇▇▇ $400,000
>.25% of ▇▇▇ $ 0
(2) Advisory Fee and Administrative Fee, net of amounts paid to
subadvisors, subadministrator and amounts waived to the Fund
* ▇▇▇ = Average Net Assets
7
