1838 INVESTMENT ADVISORS FUNDS
1838 INVESTMENT ADVISORS, LP
MBIA MUNICIPAL INVESTORS SERVICES CORPORATION
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of the 1st day of
November, 2004, by and among 1838 Investment Advisors Funds, a Delaware business
trust (the "Trust"), 1838 Investment Advisors, LP ("1838 Advisors"), a Delaware
limited partnership, and MBIA Municipal Investors Services Corporation
("MBIA-MISC"), a Delaware corporation.
WHEREAS, the Trust is registered under the Investment Company
Act of 1940, as amended ("1940 Act"), as an open-end management investment
company and offers for public sale distinct series of shares of beneficial
interest ("Series"), par value $0.001 per share, each corresponding to a
distinct portfolio;
WHEREAS, each share of a Series represents an undivided
interest in the assets, subject to the liabilities, allocated to that Series and
each Series has a separate investment objective and policies;
WHEREAS, at the present time, the Trust has established two
Series: 1838 International Equity Fund and 1838 Fixed Income Fund;
WHEREAS, 1838 Advisors is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
acts as the investment adviser and manager of the Trust and its Series;
WHEREAS, the Trust and 1838 Advisors desire to employ
MBIA-MISC to provide certain administrative services;
WHEREAS, MBIA-MISC is willing to furnish such services to the
Trust with respect to each Series listed on Schedule A to this Agreement (each a
"Portfolio," and together the "Portfolios") on the terms and conditions
hereinafter set forth;
WHEREAS, to the extent that the fee payable by each Portfolio
to MBIA-MISC under this Agreement exceeds the expense limitations set forth in
the current prospectus for each Portfolio, 1838 Advisors is willing to pay the
fee set forth under Schedule A of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained in this Agreement, the Trust, 1838 Advisors and MBIA-MISC
agree as follows:
1. APPOINTMENT. The Trust hereby appoints and employs MBIA-MISC as agent to
perform those services described in this Agreement for the Trust, such
appointment to take effect at the close of business on the date first written
above. MBIA-MISC shall act under such appointment and perform the obligations
thereof upon the terms and conditions hereinafter set forth and in accordance
with the principles of principal and agent enunciated by the common law.
2. DOCUMENTS. The Trust has furnished MBIA-MISC with copies
properly certified or authenticated of each of the following:
a. The Trust's Declaration of Trust filed with the Secretary of
the State of Delaware on December 9, 1994 and all amendments
thereto and restatements thereof;
b. The Trust's By-laws and all amendments thereto and
restatements thereof (such By-laws, as presently in effect
and as they shall from time to time be amended or restated,
are herein called "By-laws");
c. Resolutions of the Trust's Board of Trustees authorizing the
appointment of MBIA-MISC to provide certain administrative
services to the Trust and approving this Agreement;
d. The Trust's Notification of Registration filed pursuant to
Section 8(a) of the 1940 Act as filed with the Securities
and Exchange Commission ("SEC") on December 13, 1994;
e. The Trust's most recent Registration Statement on Form N-1A
under the Securities Act of 1933 (the "1933 Act") (File No.
33-87298) and under the Investment Company Act (File No.
811-8902) as filed with the SEC relating to shares of
beneficial interest in the Trust, and all amendments
thereto;
f. The Trust's most current Prospectuses and Statements of
Additional Information relating to the Portfolio(s); and
g. If required, a copy of either (i) a filed notice of
eligibility to claim the exclusion from the definition of
"commodity pool operator" contained in Section 2(a)(1)(A) of
the Commodity Exchange Act ("CEA") that is provided in Rule
4.5 under the CEA, together with all supplements as are
required by the Commodity Futures Trading Commission
("CFTC"); (ii) a letter which has been granted to the Trust
by the CFTC which states that the Trust will not be treated
as a "pool" as defined in Section 4.10(d) of the CFTC's
General Regulations; or (iii) a letter which has been
granted to the Trust by the CFTC which states that the CFTC
will not take any enforcement action if the Trust does not
register as a "commodity pool operator."
The Trust will furnish MBIA-MISC from time to time with
copies, properly certified or authenticated, of all additions, amendments or
supplements to the foregoing, if any.
3. PORTFOLIO ADMINISTRATION. Subject to the direction and
control of the Board of Trustees of the Trust and to the extent not otherwise
the responsibility of, or provided by, the Trust or other supply agents of the
Trust, MBIA-MISC shall provide the following administrative services:
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a. Supply:
(1) office facilities (which may be in MBIA-MISC's or its
affiliates' own offices);
(2) non-investment related statistical and research data;
(3) executive and administrative services;
(4) stationery and office supplies at the Trust's expense;
(5) corporate secretarial services, such as the preparation
and distribution of materials at the Trust's expense
for meetings of the Board of Trustees or shareholders;
and
(6) Trustees' and Officers' questionnaires.
b. Prepare and file, if necessary, reports to shareholders of
the Trust and reports with the SEC, state securities
commissions and Blue Sky authorities including preliminary
and definitive proxy materials, post-effective amendments to
the Trust's registration statement, Rule 24f-2 Notices, Form
N-SAR and N-CSR filings; Form N-PX filings and prospectus
supplements;
c. Monitor the Trust's compliance with the investment
restrictions and limitations imposed by the 1940 Act, and
state Blue Sky laws and applicable regulations thereunder,
the fundamental and non-fundamental investment policies and
limitations set forth in the Prospectus and SAI, and the
investment restrictions and limitations necessary for each
Portfolio of the Trust to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code") or any successor statute;
d. Monitor sales of the Trust's shares and ensure that such
shares are properly registered as required by the SEC and
applicable state authorities;
e. Prepare and distribute to appropriate parties notices
announcing the declaration of dividends and other
distributions to shareholders;
f. Prepare financial statements and footnotes and other
financial information with such frequency and in such format
as required to be included in reports to shareholders and
the SEC;
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g. Review sales literature and file such with regulatory
authorities, as necessary;
h. Provide information regarding material developments in state
securities regulation; and
i. Provide personnel to serve as officers of the Trust if so
elected by the Board of Trustees.
4. EXPENSES OF THE TRUST. The Trust agrees that it will pay
all its expenses other than those expressly stated to be payable by MBIA-MISC
hereunder. The Trust agrees that it will reimburse MBIA-MISC for MBIA-MISC's
out-of-pocket expenses incurred in connection with the provision of
administrative services under this Agreement.
5. RECORDKEEPING AND OTHER INFORMATION. MBIA-MISC shall create
and maintain all necessary records in accordance with all applicable laws, rules
and regulations, including, but not limited to, records required by Section
31(a) of the 1940 Act and the rules thereunder, as the same may be amended from
time to time, pertaining to the various functions (described above) performed by
it and not otherwise created and maintained by another party pursuant to
contract with the Trust. All records shall be the property of the Trust at all
times and shall be available for inspection and use by the Trust. Where
applicable, such records shall be maintained by MBIA-MISC for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
6. AUDIT, INSPECTION AND VISITATION. MBIA-MISC shall make
available during regular business hours all records and other data created and
maintained pursuant to the foregoing provisions of this Agreement for reasonable
audit and inspection by the Trust, any person retained by the Trust or any
regulatory agency having authority over the Trust.
7. APPOINTMENT OF AGENTS. MBIA-MISC may at any time or times
in its discretion appoint (and may at any time remove) other parties as its
agent to carry out such of the provisions of this Agreement as MBIA-MISC may
from time to time direct; provided, however, that the appointment of any such
agent shall not relieve MBIA-MISC of any of its responsibilities or liabilities
hereunder.
8. RIGHT TO RECEIVE ADVICE.
a. ADVICE OF TRUST. If MBIA-MISC shall be in doubt as to
any action to be taken or omitted by it, it may
request, and shall receive, from the Trust directions
or advice, including oral or written instructions where
appropriate.
b. ADVICE OF COUNSEL. If MBIA-MISC shall be in doubt as to
any question of law involved in any action to be taken
or omitted by MBIA-MISC, it may request advice at 1838
Advisor's and/or the Trust's expense from counsel of
its own choosing (who may be the regularly retained
counsel for the Trust or MBIA-MISC or the in-house
counsel for MBIA-MISC, at the option of MBIA).
c. CONFLICTING ADVICE. In case of conflict between
directions, advice or oral or written instructions
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received by MBIA-MISC pursuant to subsection a of this
Section and advice received by MBIA-MISC pursuant to
subsection b of this Section, MBIA-MISC shall be
entitled to rely on and follow the advice received
pursuant to the latter provision alone.
d. PROTECTION OF MBIA-MISC. MBIA-MISC shall be protected
in any action or inaction which it takes in reliance on
any directions, advice or oral or written Instructions
received pursuant to subsections a or b of this Section
which MBIA-MISC, after receipt of any such directions,
advice or oral or written Instructions, in good faith
believes to be consistent with such directions, advice
or oral or written Instructions, as the case may be.
Nothing in this subsection shall excuse MBIA-MISC when
an action or omission on the part of MBIA-MISC
constitutes willful misfeasance, bad faith, negligence
or reckless disregard by MBIA-MISC of its duties under
this Agreement.
9. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except
as otherwise provided herein, the Trust assumes full responsibility for ensuring
that the Trust complies with all applicable requirements of the Securities Act
of 1933 (the "1933 Act"), the Securities Exchange Act of 1934 (the "1934 Act"),
the 1940 Act, the CEA and any laws, rules and regulations of governmental
authorities having jurisdiction.
10. COMPENSATION. For the performance of its obligations under
this Agreement, the Trust and/or 1838 Advisors shall pay MBIA-MISC an
administrative fee with respect to each Portfolio in accordance with the fee
arrangements described in Schedule A attached hereto, as such schedule may be
amended from time to time.
11. LIABILITY OF MBIA-MISC OR AFFILIATES. MBIA-MISC and its
affiliates shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Trust in connection with the matters to which this
Agreement relates, except to the extent of a loss resulting from willful
misfeasance, bad faith, negligence or reckless disregard of their obligations
and duties under this Agreement. Any person, even though also an officer,
director, employee or agent of MBIA-MISC or any of its affiliates who may be or
become an officer or director of the Trust, shall be deemed, when rendering
services to the Trust as such officer or acting on any business of the Trust in
such capacity (other than services or business in connection with MBIA-MISC's
duties under this Agreement), to be rendering such services to or acting solely
for the Trust and not as an officer, director, employee or agent or one under
the control or direction of MBIA-MISC or any of its affiliates, even though paid
by one of those entities. MBIA-MISC shall not be liable or responsible for any
acts or omissions of any predecessor administrator or any other persons having
responsibility for matters to which this Agreement relates nor shall MBIA-MISC
be responsible for reviewing any such act or omissions. MBIA-MISC shall,
however, be liable for its own acts and omissions subsequent to assuming
responsibility under this Agreement as herein provided.
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12. INDEMNIFICATION.
a. The Trust agrees to indemnify and hold harmless
MBIA-MISC, its directors, officers, employees, agents
and representatives from all taxes, charges, expenses,
assessments, claims and liabilities including, without
limitation, liabilities arising under the 1933 Act, the
1934 Act and the 1940 Act, and any applicable state and
foreign laws, and amendments thereto (the "Securities
Laws"), and expenses, including without limitation
reasonable: attorneys' fees and disbursements arising
directly or indirectly from any action or omission to
act which MBIA-MISC takes (i) at the request of or on
the direction of or in reliance on the advice of the
Trust or (ii) upon oral or written instructions.
Neither MBIA-MISC nor any of its nominees shall be
indemnified against any liability (or any expenses
incident to such liability) arising out of MBIA-MISC's
or its directors', officers', employees', agents' and
representatives' own willful misfeasance, bad faith,
negligence or reckless disregard of its duties and
obligations under this Agreement.
b. MBIA-MISC agrees to indemnify and hold harmless the
Trust from all taxes, charges, expenses, assessments,
claims and liabilities arising from MBIA-MISC
obligations pursuant to this Agreement (including,
without limitation, liabilities arising under the
Securities Laws, and any state and foreign securities
and blue sky laws, and amendments thereto) and
expenses, including (without limitation) reasonable
attorneys' fees and disbursements arising directly or
indirectly out of MBIA-MISC's or its directors',
officers', employees', agents' and representatives' own
willful misfeasance, bad faith, negligence or reckless
disregard of its duties and obligations under this
Agreement.
c. In order that the indemnification provisions contained
in this Section 12 shall apply, upon the assertion of a
claim for which either party may be required to
indemnify the other, the party seeking indemnification
shall promptly notify the other party of such
assertion, and shall keep the other party advised with
respect to all developments concerning such claim. The
party who may be required to indemnify shall have the
option to participate with the party seeking
indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any
claim or make any compromise in any case in which the
other party may be required to indemnify it except with
the other party's prior written consent.
13. RESPONSIBILITY OF MBIA-MISC. MBIA-MISC shall be under no
duty to take any action on behalf of the Trust except as specifically set herein
or as may be specifically agreed to by MBIA-MISC in writing. In the performance
of its duties hereunder, MBIA-MISC shall be obligated to exercise care and
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diligence and to act in good faith and to use its best efforts within reasonable
limits in performing services provided for under this Agreement. MBIA-MISC shall
be responsible for its own negligent failure to perform its duties under this
Agreement, but to the extent that duties, obligations and responsibilities are
not expressly set forth in this Agreement, MBIA-MISC shall not be liable for any
act or omission which does not constitute willful misfeasance, bad faith or
negligence on the part of MBIA-MISC or reckless disregard by MBIA-MISC of such
duties, obligations and responsibilities. Without limiting the generality of the
foregoing or of any other provision of this Agreement, MBIA-MISC in connection
with its duties under this Agreement shall not be under any duty or obligation
to inquire into and shall not be liable for or in respect of (i) the validity or
invalidity or authority or lack thereof of any oral or written instruction,
notice or other instrument which conforms to the applicable requirements of this
Agreement, and which MBIA-MISC reasonably believes to be genuine; or (ii) delays
or errors or loss of data occurring by reason of circumstances beyond
MBIA-MISC's control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdown, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply, under which circumstances shall
take maximum actions to minimize loss of data therefore.
14. DURATION, TERMINATION, ETC. This Agreement shall become
effective as of the date first written above, and unless terminated as provided,
shall continue in force until October 31, 2005. Thereafter, the Agreement will
continue from year-to-year unless otherwise terminated pursuant to the terms of
this Agreement. This Agreement may at any time be terminated on sixty (60) days'
written notice given to MBIA-MISC or by MBIA-MISC by six (6) months' written
notice given to the Trust; provided, however, that the foregoing provisions of
this Agreement may be terminated immediately at any time for cause either by the
Trust or by MBIA-MISC in the event that such cause shall have remained
unremedied for sixty (60) days or more after receipt of written specification of
such cause. Any such termination shall not affect the rights and obligations of
the parties under Section 13 hereof.
Upon the termination of this Agreement, the Trust shall pay to
MBIA-MISC such compensation as may be payable for the period prior to the
effective date of such termination, including reimbursement for any
out-of-pocket expenses reasonably incurred by MBIA-MISC to such date. In the
event that the Trust designates a successor to any of MBIA-MISC's obligations
hereunder, MBIA-MISC shall, at the expense and direction of the Trust, transfer
to such successor all relevant books, records and other data established or
maintained by MBIA-MISC under the foregoing provisions.
15. INSURANCE. Upon request MBIA-MISC shall provide the Trust
with details regarding its insurance coverage, and MBIA-MISC shall notify the
Trust should any of its insurance coverage be materially changed. Such
notification shall include the date of change and the reason or reasons
therefore. MBIA-MISC shall notify the Trust of any material claims against it,
whether or not they may be covered by insurance and shall notify the Trust from
time to time as may be appropriate of the total outstanding claims made by
MBIA-MISC under its insurance coverage.
16. AMENDMENTS. The provisions of this Agreement may not be
changed, waived, discharged or terminated orally, but only by written instrument
that shall make specific reference to this Agreement and that shall be signed by
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the party against which enforcement of such change, waiver, discharge or
termination is sought.
MBIA-MISC and the Trust shall regularly consult with each
other regarding MBIA-MISC's performance of its obligations and its compensation
under the foregoing provisions. In connection therewith, the Trust shall submit
to MBIA-MISC at a reasonable time in advance of filing with the SEC copies of
any amended or supplemented registration statement of the Trust (including
exhibits) under the 1933 Act, and the 1940 Act, and, a reasonable time in
advance of their proposed use, copies of any amended or supplemented forms
relating to any plan, program or service offered by the Trust. Any change in
such materials that would require any change in MBIA-MISC's obligations under
the foregoing provisions shall be subject to the burdened party's approval,
which shall not be unreasonably withheld. In the event that a change in such
documents or in the procedures contained therein increases the cost to MBIA-MISC
of performing its obligations hereunder by more than an insubstantial amount,
MBIA-MISC shall be entitled to receive reasonable compensation therefor.
17. NOTICE. Any notice under this Agreement shall be given in
writing addressed and delivered or mailed, postage prepaid, to the other party
to this Agreement at its principal place of business.
18. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
19. FURTHER ACTIONS. Each Party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
20. GOVERNING LAW. To the extent that state law has not been
preempted by the provisions of any law of the United States heretofore or
hereafter enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of the State
of Delaware.
21. SHAREHOLDER LIABILITY. MBIA-MISC acknowledges that it has
received notice of and accepts the limitations of liability set forth in the
Trust's Declaration of Trust. MBIA-MISC agrees that the Trust's obligations
hereunder shall be limited to the Trust, and that MBIA-MISC shall have recourse
solely against the assets of the Portfolio with respect to which the Trust's
obligations hereunder relate and shall have no recourse against the assets of
any other Portfolio or against any shareholder, Trustee, officer, employee, or
agent of the Trust.
22. MISCELLANEOUS. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed in
three counterparts, each of which taken together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
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1838 INVESTMENT ADVISORS FUNDS
By: /s/ X. Xxxxxxx Xxxxx
------------------------------
X. Xxxxxxx Xxxxx, President
1838 INVESTMENT ADVISORS, LP
By: 1838 Investment Advisors, LLC
its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Manager
MBIA MUNICIPAL INVESTORS SERVICES CORPORATION
By: /s/ Xxxxxxx X. Xxxx
------------------------------
Xxxxxxx X. Xxxx
Vice President
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ADMINISTRATION AGREEMENT
SCHEDULE A
1838 INVESTMENT ADVISORS FUNDS
PORTFOLIO LISTING AND FEE SCHEDULE
For the services MBIA-MISC provides under the foregoing
Administration Services Agreement, 1838 Investment Advisors Funds (the "Trust")
on behalf of and with respect to the Portfolios listed below, and 1838
Investment Advisors, LP ("1838 Advisors") agree to pay MBIA-MISC an
administration fee subject to a minimum fee of $60,000 per annum for each year
calculated on each Portfolio's total net assets according to the Fee Schedule
below:
Listing of Portfolios:
---------------------
1838 International Equity Fund
1838 Fixed Income Fund
Fee Schedule:
------------
0.06% of each Portfolio's total net assets
This administration fee shall be payable monthly as soon as
practicable after the last day of each month based on the average of the daily
net assets of the total Trust, as determined at the close of business on each
day throughout the month.
Out-of-pocket expenses shall be reimbursed by the Trust and/or
1838 Advisors to MBIA-MISC or paid directly by the Trust and/or 1838 Advisors.
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