AMENDMENT NO. 5
to the
SUB-ADMINISTRATION AGREEMENT
This is an amendment to the Sub-Administration dated as of February 15,
1999, between E*TRADE Funds ("Fund") and Investors Bank & Trust Company ("IBT"),
as amended by the Amendment Agreement dated as of December 26, 2000, by and
among the Fund, E*TRADE Asset Management, Inc. ("ETAM") and IBT and such other
amendments as have been adopted from to time ("Sub-Administration Agreement").
WHEREAS, the Fund has entered into a Third Amended and Restated
Administrative Services Agreement with ETAM pursuant to which each series of the
Fund, rather than ETAM, is responsible for its own expenses including
compensation paid to all third-party service providers such as IBT;
WHEREAS, the Board of Trustees of the Trust ("Board") has approved the
liquidation of the E*TRADE Extended Market Index Fund ("Extended Market Fund")
and the E*TRADE Global Titans Index Fund ("Global Titans Fund") effective upon
the liquidation date as indicated in the Plan of Liquidation adopted by the
Board ("Liquidation Date");
WHEREAS, the Board has approved the merger of the E*TRADE E-Commerce Index
Fund ("E-Commerce Fund") with and into the E*TRADE Technology Index Fund
("Technology Fund"), subject to the approval of shareholders, and such
reorganization is expected to take place prior to December 31, 2001;
WHEREAS, the Board has approved the conversion of the E*TRADE Bond Index
Fund ("Bond Fund") to an actively managed fund, subject to the approval of
shareholders, and such conversion is expected to take place prior to December
31, 2001;
WHEREAS, the Fund, ETAM and IBT desire to amend the Sub-Administration
Agreement as set forth below;
WHEREAS, the Fund, ETAM and IBT agree that ETAM shall be removed as a party
to the Sub-Administration Agreement and the Fund, on behalf of each series of
the Fund, shall be responsible for the duties set forth in the
Sub-Administration Agreement as amended hereby;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:
1. Amendment effective upon the Liquidation Date:
(a) The Sub-Administration Agreement is hereby amended by deleting
the first three lead-in paragraphs thereof in their entirety and
inserting in lieu thereof the following:
"AGREEMENT made as of February 15, 1999, by and between E*TRADE
Funds, a business trust organized under the laws of the State of
Delaware ("Fund") and Investors Bank & Trust Company, a
Massachusetts trust company ("Bank").
WHEREAS, the Fund, a registered investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of the separate portfolios listed on Appendix A
hereto, as amended from time to time, desires to retain the Bank
to render certain administrative services to the Fund with
respect to the Portfolios designated by the Fund as
Sub-Administrator and the Bank is willing to render such
services."
(b) The last sentence of the first sub-paragraph of Paragraph 3 of
the Sub-Administration Agreement is hereby amended by deleting
such sentence in its entirety and inserting in lieu thereof the
following:
"At such time, the fee schedules included in Appendix B-1 and
Appendix B-2 hereto shall be appropriately amended."
(c) Paragraph 5 of the Sub-Administration Agreement is hereby amended
by deleting such Paragraph 5 in its entirety and inserting in
lieu thereof the following:
"(a) For the services rendered and the facilities to be furnished
by the Bank, as provided for in this Agreement, the Fund
will compensate the Bank in accordance with the fee
schedules attached as Appendix B-1 and Appendix B-2 hereto;
provided, however, that the fees with respect to each
Portfolio will be payable only out of the assets of that
Portfolio. Such fees do not include out-of-pocket
disbursements (as delineated on the fee schedule or other
expenses with the prior approval of the Fund's management)
of the Bank for which the Bank shall be entitled to xxxx the
Fund separately and for which the Fund shall reimburse the
Bank.
(b) The Bank shall not be required to pay any expense incurred
by the Fund."
(d) In the second sentence of Paragraph 6(a), the phrase "The
Administrator and Fund" is deleted and replaced with the phrase
"The Fund."
(e) Paragraph 6(c) of the Sub-Administration Agreement is hereby
amended by deleting such Paragraph 6(c) in its entirety and
inserting in lieu thereof the following:
"(c) The Bank may apply to the Fund at any time for instructions
and may consult counsel for the Fund, or its own counsel,
and with accountants and other experts with respect to any
matter arising in connection with its duties hereunder, and
the Bank shall not be liable or accountable for any action
reasonably taken or omitted by it in good faith in
accordance with such instruction, or with the opinion of
such counsel, accountants, or other experts. The Bank shall
not be liable for any act or omission taken or not taken in
reliance upon any document, certificate or instrument which
it reasonably believes to be genuine and to be signed or
presented by the proper person or persons. The Bank shall
not be held to have notice of any change of authority of any
officers, employees, or agents of the Fund until receipt of
written notice thereof has been received by the Bank from
the Fund."
(f) In the recitation of addresses in Paragraph 8(a) of the
Sub-Administration Agreement, the reference to the
"Administrator" and its attendant address are hereby deleted.
2. Effective upon the Liquidation Date, the E*TRADE Extended Market Index
Fund is hereby removed from Appendix A and Appendix B-1.
3. Effective upon the Liquidation Date, the E*TRADE Global Titans Index
Fund is hereby removed from Appendix A and Appendix B-2.
4. The E-Commerce Fund is hereby removed from Appendix A and Appendix B-2
effective upon the earlier of either (a) the reorganization of
E-Commerce Fund with and into the Technology Fund, if such
reorganization is approved by shareholders of the E-Commerce Fund; or
(b) if the reorganization is not approved by shareholders, upon the
liquidation of the E-Commerce Fund, which is expected to occur prior
to December 31, 2001.
5. Upon the effective date of the reorganization or the liquidation of
the E-Commerce Fund, which is expected to occur before December 31,
2001, Appendix A is hereby amended and substituted with the attached
Appendix A.
6. Upon the effective date of the conversion of the Bond Fund to an
actively managed fund, if such conversion is approved by shareholders,
the Bond Fund is hereby removed from under the heading "Feeders" in
Appendix A and is hereby inserted under the heading "Stand-Alone" in
Appendix A and the name of the fund in Appendix A is changed to the
"E*TRADE Bond Fund." If the conversion of the Bond Fund to an actively
managed fund is not approved by shareholders, upon the effective date
of the liquidation of the Bond Fund, Appendix A is hereby modified and
amended to remove that fund from Appendix A.
7. The compensation paid to IBT for services provided to the E-Commerce
Fund shall be paid by ETAM until the earlier of either the
reorganization or the liquidation of the E-Commerce Fund as indicated
in paragraph 4 above.
8. The compensation paid to IBT for services provided to the Bond Fund
shall be paid by ETAM until the earlier of either the conversion or
the liquidation of the Bond Fund as indicated in paragraph 6 above.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 5 to
the Sub-Administration Agreement to be executed by their respective officers
thereunto duly authorized as of ___________, 2001.
E*TRADE FUNDS E*TRADE ASSET MANAGEMENT, INC.
By: By:
---------------------------- --------------------------------
Name: Name:
Title: Title:
INVESTORS BANK & TRUST COMPANY
By:
-----------------------------
Name:
Title:
APPENDIX A
to the
SUB-ADMINISTRATION AGREEMENT
Feeders
-------
E*TRADE Bond Index Fund*
E*TRADE International Index Fund
E*TRADE Premier Money Market Fund
E*TRADE Xxxxxxx 2000 Index Fund
E*TRADE S&P 500 Index Fund
Stand-Alone
-----------
E*TRADE Asset Allocation Fund
E*TRADE Financial Sector Index Fund
E*TRADE Technology Index Fund
* The name of this fund will be changed to the "E*TRADE Bond Fund," and the
fund will be removed from the "Feeder" list and be added to the
"Stand-Alone" list, if the conversion of the fund to an actively managed
fund is approved by shareholders.
