EXHIBIT 99.6(a)-14.1
(Sierra Trust Funds -
Short Term High
Quality Bond Fund)
INVESTMENT MANAGEMENT AGREEMENT
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INVESTMENT MANAGEMENT AGREEMENT (this "Agreement"), dated _______________,
1997, between Sierra Trust Funds, a Massachusetts business trust, (the "Trust"),
on behalf of its series Short Term High Quality Bond Fund (the "Fund") and
Composite Research & Management Co., a Washington corporation (the "Manager").
W I T N E S S E T H
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WHEREAS, the Trust is a diversified, open-end series management investment
company, registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund, a separate series of the Trust, desires to retain the
Manager to render investment management services to the Fund, and the Manager is
willing to render such services;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
Appointment. The Fund hereby appoints the Manager to act as investment
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manager to the Fund for the period and on the terms set forth in this Agreement.
The Manager accepts such appointment and agrees to render the services herein
described, for the compensation herein provided.
Management. Subject to the supervision of the Board of Trustees of the
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Trust, the Manager shall manage the investment operations of the Fund and the
composition of the Fund's portfolio, including the purchase, retention and
disposition of securities therefor, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus and Statement
of Additional Information (as such terms are hereinafter defined) and
resolutions of the Trust's Board of Trustees and subject to the following
understandings:
The Manager shall provide supervision of the Fund's investments,
furnish a continuous investment program for the Fund's portfolio and
determine from time to time what securities will be purchased, retained, or
sold by the Fund, and what portion of the assets will be invested or held
as cash.
The Manager shall use reasonable care and judgment in the management of the
Fund's portfolio.
The Manager, in the performance of its duties and obligations under this
Agreement, shall act in conformity with the Declaration of Trust (as hereinafter
defined) of the Trust and the investment policies of the Fund as determined by
the Board of Trustees of the Trust and set forth in the Prospectus and Statement
of Additional Information.
The Manager shall determine the securities to be purchased or sold by the
Fund and shall place orders for the purchase and sale of portfolio securities
pursuant to its determinations with brokers or dealers selected by the Manager.
In executing portfolio transactions and selecting brokers or dealers, the
Manager shall use its best efforts to seek on behalf of the Fund the best
overall terms available. In assessing the best overall terms available for any
transaction, the Manager may consider all factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In evaluating the best overall terms available, and in
selecting the broker or dealer to execute a particular transaction, the Manager
also may consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934, as amended)
provided to the Fund and/or other accounts over which the Manager exercises
investment discretion. The Manager is authorized to pay to a broker or dealer
who provides such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting the
transaction if the Manager determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of that particular
transaction or in terms of the overall responsibilities of the Manager to the
Fund and/or other accounts over which the Manager exercises investment
discretion.
On occasions when the Manager deems the purchase or sale of a security to
be in the best interest of the Fund as well as other fiduciary accounts for
which it has investment responsibility, the Manager, to the extent permitted by
applicable laws and regulations, may aggregate the securities to be so sold or
purchased in
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order to obtain the best execution, most favorable net price or lower
brokerage commissions.
Monitor and evaluate the services provided by the Fund's investment
sub-advisor, if any, under its investment sub-advisory agreement,
including, without limitation, the sub-advisor's adherence to the Fund's
investment objective(s) and policies and the Fund's investment performance.
Services Not Exclusive. The investment management services rendered by the
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Manager hereunder to the Fund are not to be deemed exclusive, and the Manager
shall have the right to render similar services to others, including, without
limitation, other investment companies.
Expenses. During the term of this Agreement, the Manager shall pay all
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expenses incurred by it in connection with its activities under this Agreement
including the salaries and expenses of any of the officers or employees of the
Manager who act as officers, Trustees or employees of the Fund or the Trust but
excluding the cost of securities purchased for the Fund and the amount of any
brokerage fees and commissions incurred in executing portfolio transactions for
the Fund, and provide the Fund with suitable office space. Other expenses to be
incurred in the operation of the Fund (other than those borne by any third
party), including without limitation, taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers, directors, employees
or holders of 5% or more of the outstanding voting securities of the Manager or
the Fund's administrator or any of their affiliates, Securities and Exchange
Commission fees and state Blue Sky qualification fees, administration fees,
bookkeeping, charges of custodians, transfer and dividend disbursing agents'
fees, certain insurance premiums, industry association fees, outside auditing
and legal expenses, costs of maintaining the Fund's or the Trust's existence,
costs of independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
preparing, printing and distributing prospectuses, costs of stockholders'
reports and meetings of shareholders, officers and Trustees of the Fund or the
Trust, as applicable, costs of implementing and operating the Fund's service
plan, and any extraordinary expenses will be borne by the Fund.
Compensation. For the services provided pursuant to this Agreement, the
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Fund shall pay to the Manager as full compensation therefor a monthly fee
computed on the average daily net assets of the Fund equal to (i) .50% per annum
of such assets up to $500 million and (ii) .40% per annum of such assets in
excess of $500 million. The Fund acknowledges that the Manager, as agent for
the Fund, will allocate a portion of the fee equal to the sub-advisory fee
payable to the sub-advisor, if any, under its sub-advisory agreement to the sub-
advisor for sub-advisory services. The Fund acknowledges that the Manager, as
agent for the Fund, will allocate a portion of the fee equal to .15% of such
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assets to Xxxxxxx Xxxxx Securities Services, Inc. for administrative services,
portfolio accounting and regulatory compliance systems and a portion of the fee
equal to .125% of such assets to Composite Funds Distributor, Inc. for
facilitating distribution of the Fund.
Limitation of Liability. The Manager shall not be liable for any error of
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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 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) of the 0000 Xxx) or a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
Delivery of Documents. The Fund has heretofore delivered to the Manager
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true and complete copies of each of the following documents and shall promptly
deliver to it all future amendments and supplements thereto, if any:
Agreement and Declaration of Trust of the Trust (such Agreement and
Declaration as presently in effect and as amended from time to time, the
"Declaration of Trust");
Bylaws of the Trust;
Resolutions of the Board of Trustees of the Trust authorizing the
appointment of the Manager and approving the form of this Agreement;
Registration Statement under the Securities Act of 1933 and under the
1940 Act of the Trust on Form N-1A, and all amendments thereto, as filed
with the Securities and Exchange Commission (the "Registration Statement")
relating to the Fund and the shares of the Fund;
Notification of Registration of the Trust under the 1940 Act on Form
N-8A;
Prospectus of the Fund (such prospectus as presently in effect and/or
as amended or supplemented from time to time, the "Prospectus"); and
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Statement of Additional Information of the Fund (such statement as
presently in effect and/or as amended or supplemented from time to time,
the "Statement of Additional Information").
Duration and Termination. This Agreement shall become effective as of the
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date first above-written for an initial period of two years and shall continue
thereafter so long as such continuance is specifically approved at least
annually (a) by the vote of the Board of Trustees including a majority of those
members of the Trust's Board of Trustees who are not parties to this Agreement
or "interested persons" of any such party, cast in person at a meeting called
for that purpose, or by vote of a majority of the outstanding voting securities
of the Fund. Notwithstanding the foregoing, (a) this Agreement may be
terminated at any time, without the payment of any penalty, by either the Fund
(by vote of the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund) or the Manager, on sixty (60) days
prior written notice to the other and (b) shall automatically terminate in the
event of its assignment. As used in this Agreement, the terms "majority of the
outstanding voting securities, "interested persons" and "assignment" shall have
the meanings assigned to such terms in the 1940 Act.
Amendments. No provision of this Agreement may be amended, modified,
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waived or supplemented except by a written instrument signed by the party
against which enforcement is sought. No amendment of this Agreement shall be
effective until approved in accordance with the provisions of the 1940 Act.
Use of Name and Logo. The Fund agrees that it shall furnish to the
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Manager, prior to any use or distribution thereof, copies of all prospectuses,
statements of additional information, proxy statements, reports to stockholders,
sales literature, advertisements, and other material prepared for distribution
to stockholders of the Fund or to the public, which in any way refer to or
describe the Manager or which include any trade names, trademarks or logos of
the Manager or of any affiliate of the Manager. The Fund further agrees that it
shall not use or distribute any such material if the Manager reasonably objects
in writing to such use or distribution within five (5) business days after the
date such material is furnished to the Manager.
The Manager and/or its affiliates own the names "Sierra", "Composite" and
any other names that they may from time to time develop for use in connection
with the Fund, which names may be used by the Fund or the Trust only with the
consent of the Manager and/or its affiliates. The Manager, on behalf of itself
and/or its affiliates, consents to the use by the Trust and by the Fund of such
names or any other names embodying such names, but only on condition and so long
as (i) this Agreement shall remain in full force, (ii) the Fund and the Trust
shall fully perform, fulfill and comply with all provisions of this Agreement
expressed herein to be performed, fulfilled or complied with by it, and (iii)
the Manager is the manager of the Fund and the Trust. No such name shall be
used by the Fund or the Trust at any time or in any place or for any purposes or
under any
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conditions except as provided in this section. The foregoing authorization by
the Manager, on behalf of itself and/or its affiliates, to the Fund and the
Trust to use such names as part of a business or name is not exclusive of the
right of the Manager and/or its affiliates themselves to use, or to authorize
others to use, the same; the Fund and the Trust acknowledge and agree that as
between the Manager and/or its affiliates and the Fund or the Trust, the Manager
and/or its affiliates have the exclusive right so to use, or authorize others to
use, such names, and the Fund and the Trust agree to take such action as may
reasonably be requested by the Manager, on behalf of itself and/or its
affiliates, to give full effect to the provisions of this section (including,
without limitation, consenting to such use of such names). Without limiting the
generality of the foregoing, the Fund and the Trust agree that, upon (i) any
violation of the provisions of this Agreement by the Fund or the Trust or (ii)
any termination of this Agreement, by either party or otherwise, the Fund and
the Trust will, at the request of the Manager, on behalf of itself and/or its
affiliates, made within six months after such violation or termination, use its
best efforts to change the name of the Fund and the Trust so as to eliminate all
reference, if any, to such names and will not thereafter transact any business
in a name containing such names in any form or combination whatsoever, or
designate itself as the same entity as or successor to an entity of such names,
or otherwise use such names or any other reference to the Manager and/or its
affiliates. Such covenants on the part of the Fund and the Trust shall be
binding upon it, its Trustees, officers, stockholders, creditors and all other
persons claiming under or through it.
The provisions of this section shall survive termination of this Agreement.
Notices. Any notice or other communication required to be given pursuant
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to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, if to the Fund: 000 X. Xxxx Xxx., Xxxxx 000,
Xxxxxxx, Xxxxxxxxxx 00000; or if to the Manager: 0000 Xxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxxxx 00000; or to either party at such other address as
such party shall designate to the other by a notice given in accordance with the
provisions of this section.
Miscellaneous.
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Except as otherwise expressly provided herein or authorized by the
Board of Trustees of the Trust from time to time, the Manager for all
purposes herein shall be deemed to be an independent contractor and shall
have no authority to act for or represent the Fund in any way or otherwise
be deemed an agent of the Fund.
The Fund shall furnish or otherwise make available to the Manager
such information relating to the business affairs of the Fund as the
Manager at any time or from time to time reasonably requests in order to
discharge its obligations
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hereunder.
This Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts and shall inure to the
benefit of the parties hereto and their respective successors.
If any provision of this Agreement shall be held or made invalid or by
any court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
Declaration of Trust and Limitation of Liability. A copy of the
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Declaration of Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts, and notice is hereby given that this Agreement is
executed by an officer of the Trust on behalf of the Trustees of the Trust, as
trustees and not individually, on further behalf of the Fund, and that the
obligations of this Agreement shall be binding upon the assets and properties of
the Fund only and shall not be binding upon the assets and properties of any
other series of the Trust or upon any of the Trustees, officers, employees,
agents or shareholders of the Fund or the Trust individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first above-written.
SIERRA TRUST FUNDS, on behalf of its
series SHORT TERM HIGH QUALITY BOND FUND
By:
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Name:
Title:
Attest:
By:
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Name:
Title:
COMPOSITE RESEARCH &
MANAGEMENT CO.
By:
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Xxxxxxx X. Xxxxxx
President
Attest:
By:
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Xxxxxx X. Xxxxxxx
Secretary
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