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SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934 (Amendment No. )
<TABLE>
<CAPTION>
Check the appropriate box:
<S> <C>
[X] Preliminary information statement [ ] Confidential for use of the Commission
only (as permitted by Rule 14c-5(d)(2))
[ ] Definitive information statement
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Access Capital Strategies Community
Investment Fund, Inc.: Bank Portfolio
Access Capital Strategies Community
Investment Fund, Inc.: Institutional Investor Portfolio
124 Mt. Auburn Street
Suite 200 N
Cambridge, MA 02138
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
<TABLE>
<S> <C> <C>
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
</TABLE>
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
<TABLE>
<S> <C> <C>
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
</TABLE>
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ACCESS CAPITAL STRATEGIES COMMUNITY
INVESTMENT FUND, INC.: BANK PORTFOLIO
ACCESS CAPITAL STRATEGIES COMMUNITY INVESTMENT
FUND, INC.: INSTITUTIONAL INVESTOR PORTFOLIO
Notice of Special Meeting of Sole Shareholder
to be held January 31, 1997
A special meeting of the sole shareholder of Access Capital
Strategies Community Investment Fund, Inc.: Bank Portfolio (the "Bank
Portfolio") and Access Capital Strategies Community Investment Fund, Inc.:
Institutional Investor Portfolio ("Institutional Investor Portfolio")
(collectively, the "Funds"), will be held at 10:00 a.m. at the offices of
Mellon Bank, N.A., One Mellon Bank Center, Pittsburgh, Pennsylvania on January
31, 1997, for the following purposes:
1. Agreements With The Investment Adviser.
To consider new Management Agreements because the pending sale
of Access Capital Strategies Corporation ("Access"), an indirect wholly owned
subsidiary of Mellon Bank Corporation, to Mr. David F. Sand will cause
termination of the existing Management Agreements between the Funds and Access
as a matter of law. There will be no change in the Funds' investment
objectives or investment policies or in the duties of Access as a result of the
approval of the new Management Agreements. There will be no change in the fees
payable by the Funds to Access as a result of approval of the new Management
Agreements. The new Management Agreements are contingent upon and will be
effective upon the consummation of the sale described above.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
By Order of the Directors
Kevin Mawe
Secretary
January 27, 1997
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ACCESS CAPITAL STRATEGIES COMMUNITY
INVESTMENT FUND, INC.: BANK PORTFOLIO
ACCESS CAPITAL STRATEGIES COMMUNITY INVESTMENT
FUND, INC.: INSTITUTIONAL INVESTOR PORTFOLIO
124 MT. AUBURN STREET
SUITE 200 N
CAMBRIDGE, MA 02138
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY,
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The enclosed information statement of each of the Access Capital
Strategies Community Investment Fund, Inc.: Bank Portfolio ("Bank Portfolio")
and Access Capital Strategies Community Investment Fund, Inc.: Institutional
Investor Portfolio ("Institutional Investor Portfolio") (each a "Fund" and,
collectively, the "Funds") is being sent in connection with the Special Meeting
of the Shareholders of the Funds to be held on January 31, 1997 (the "Special
Meeting") at 10:00 a.m. at the offices of Mellon Bank, N.A., One Mellon Bank
Center, Pittsburgh, Pennsylvania.
On December 31, 1996 the Bank Portfolio had outstanding 249 shares of
beneficial interest ("Shares") and the Institutional Investor Portfolio had
outstanding one Share, each Share being entitled to one vote. As of December
31, 1996, Mellon Bank, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258,
was the shareholder of record of all the Shares of the Bank Portfolio and the
one Share of the Institutional Investor Portfolio. As a result, Mellon Bank
may be deemed to be a "controlling person" of each of the Funds under the
Investment Company Act of 1940, as amended, (the "1940 Act"). As the sole
shareholder of each Fund, Mellon Bank is entitled to vote at the Special
Meeting.
As of December 31, 1996, the Bank Portfolio had assets in the amount
of approximately $24,741,495 and the Institutional Investor Portfolio has
assets in the amount of approximately $96,835.
This information statement and the enclosed notice of meeting are
first being delivered on or about January 27, 1997.
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SUMMARY OF PROPOSALS
This Special Meeting is being called for the following purposes: (1)
to approve or disapprove new investment advisory agreements between the Bank
Portfolio and Access Capital Strategies Corporation ("Access") and the
Institutional Investor Portfolio and Access (each a "New Management
Agreement"). Each New Management Agreement will be effective upon the later of
(i) approval of each New Management Agreement by the sole shareholder of the
Bank Portfolio and the Institutional Investor Portfolio Fund and the Directors
of the respective Fund or (ii) the consummation of the sale of Access; and (2)
to transact such other business as may properly come before the meeting or any
adjournment thereof.
Approval of Proposal (1) with respect to each Fund requires the
affirmative vote of: (a) 67% or more of the Shares of such Fund present at the
Special Meeting, if the holders of more than 50% of the outstanding Shares are
present or represented by proxy, or (b) more than 50% of the outstanding Shares
of such Fund, whichever is less.
PROPOSAL (1)
APPROVAL OR DISAPPROVAL OF THE
NEW MANAGEMENT AGREEMENTS
THE NEW MANAGEMENT AGREEMENTS
Access, 124 Mt. Auburn St., Suite 200 N., Cambridge, MA 02138,
currently serves as investment adviser to each Fund pursuant to investment
advisory agreements dated as of November 27, 1995 (the "Present Management
Agreements").
Consideration of the New Management Agreements is being requested
because of the pending sale of Access, an indirect wholly owned subsidiary of
Mellon Bank Corporation, to Mr. David F. Sand. Mr. Sand is a Director and
Chief Executive Officer of the Bank Portfolio, Institutional Investor
Portfolio, and of the investment adviser, Access. The New Management
Agreements between each Fund and Access would take effect upon the later of (i)
approval of each New Management Agreement by the sole shareholder of the Bank
Portfolio and the Institutional Investor Portfolio and the Directors of the
respective Fund or (ii) the consummation of the sale of Access.
Here are some of the factors you should consider in determining
whether to approve the New Management Agreements:
There will be no change in each Fund's investment objectives
or investment policies or in the duties of Access as a result
of approval of the New Management Agreements;
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There will be no change in the fees payable by each Fund to
Access for advisory services as a result of approval of the
New Management Agreements; and
Mr. David F. Sand, the person currently responsible for
providing investment advice to the Fund, will continue to
provide investment advice following the consummation of the
sale of Access.
Consummation of the sale of Access will not alter the
relationship between Access and the Funds, and Access will remain the entity
responsible for providing investment advisory services to each Fund following
the sale of Access. However, given that the sale of Access will result in a
change in ownership of Access, the Present Management Agreements will
automatically terminate in accordance with their terms as required by the 1940
Act. Thus, approval of the New Management Agreements by the sole shareholder
of each Fund is being sought in order to avoid any interruption in the
provision of advisory services to the Funds.
The Directors of each Fund, including a majority of the
Directors of each Fund who are not interested persons of the Funds or Access,
as defined in the 1940 Act, initially recommended that the sole shareholder of
each Fund approve the respective New Management Agreement with Access, pursuant
to which Access will continue to act as each Fund's investment adviser, pending
approval by each Board of the respective new Management Agreement. THE TERMS
OF THE NEW MANAGEMENT AGREEMENTS ARE IDENTICAL TO THOSE OF THE PRESENT
MANAGEMENT AGREEMENTS WITH RESPECT TO DUTIES, FEES, AND THE STANDARD OF CARE.
The effective date of the New Management Agreements will be the later of (i)
approval by the sole shareholder of each New Management Agreement and approval
of the Directors of each Fund of the Management Agreement or (ii) the date of
the consummation of the sale of Access (the "Closing Date"). The Board of
Directors of each Fund are expected to vote on the approval of the respective
New Management Agreement on January 31, 1997. It is currently expected that
the Closing Date will occur on or about February 1, 1997. Access will retain
its current address.
Copies of each Present Management Agreement and each New
Management Agreement appear as Exhibits A -- B and C -- D, respectively, to
this proxy statement.
The initial form of each Present Management Agreement naming
Access as investment adviser was approved by the respective Board of Directors
of each Fund, including a majority of the Directors of each Fund who are not
interested persons of the Funds or Access, as defined in the 1940 Act, on
November 21, 1995. As required by the 1940 Act, shareholder approval for each
Present Management Agreement was obtained on November 27, 1995.
The terms of the New Management Agreements (which are
substantially unchanged from the Present Management Agreements) provide that
Access, subject to the direction of the Board of Directors, will provide a
continuous investment program for each Fund, including investment research and
management with respect to all securities and investments and cash
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<PAGE> 6
equivalents in said Funds. Access will determine from time to time what
securities and other investments will be purchased, retained, or sold by each
Fund.
For its services under the Present Management Agreements,
Access is entitled to receive an annual fee from each Fund, paid quarterly in
arrears, of seventy-five one hundredths of one percent (.75%) of each Fund's
average gross monthly assets, less accrued liabilities other than indebtedness
for borrowings. These fees are identical in amount to the fees to which each
of the Funds will be contractually subject under the New Management Agreements.
During the fiscal year ended October 31, 1996, Access earned
investment advisory fees of $170,817 with respect to the Bank Portfolio and
fees were waived with respect to the Institutional Investor Portfolio.
During the fiscal year ended October 31, 1996, Mellon Bank
earned investment sub-advisory fees paid by Access, in the amount of $27,043
with respect to the Bank Portfolio and fees were waived with respect to the
Institutional Investor Portfolio. During the fiscal year ended October 31,
1996, Boston Safe Deposit Trust Company, an indirect wholly owned subsidiary of
Mellon Bank Corporation, ("Boston Safe") earned custodian fees in the amount of
$21,450 with respect to the Bank Portfolio and $6,690 with respect to the
Institutional Investor Portfolio. Following the Closing Date, it is expected
that Mellon Bank and Boston Safe will no longer provide services to the Funds.
If approved by the sole shareholder of each Fund at the
Special Meeting, each new Management Agreement will continue in effect until
January 31, 1999 unless terminated, and may be renewed from year to year
thereafter by the Board of Directors. The continuation of each new Management
Agreement must be approved at least annually by the Board of Directors or a
majority of the outstanding voting securities of the Fund, and by a majority of
the Directors who are not parties to the Management Agreement or interested
persons of such parties. Each Management Agreement is terminable by vote of
the Board of Directors or by the holders of a majority of the voting securities
of the Fund, at any time without penalty, on 60 days' written notice to the
Manager. Each Management Agreement may also be terminated by the Manager on 60
days' written notice to the Fund and will be terminated automatically upon its
assignment, as defined in the 1940 Act.
As does the Present Management Agreements, each new Management
Agreement provides that Access will not be liable for any error in judgment or
mistake of law or for any loss suffered by the Fund in connection with the
Management Agreement, except a loss resulting from willful misfeasance, bad
faith, or gross negligence on the part of the Manager in the performance of its
duties or from reckless disregard of its duties and obligations under the
Management Agreement.
If the New Management Agreements are approved by the sole
shareholder of the respective Fund and by the Board of Directors of the
respective Fund and the sale of Access is
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thereafter consummated, the New Management Agreements should be executed and
become effective on the closing date of the sale. In the event the sale of
Access is not consummated, the Present Management Agreements will continue in
accordance with their terms. In the event the sale of Access is consummated
and the New Management Agreements are not approved, the Board of Directors of
each Fund will consider what further actions should be taken.
PROPOSED SALE OF ACCESS
The sale of Access, a wholly owned subsidiary of Mellon Bank,
to Mr. David F. Sand will be accomplished pursuant to an agreement whereby, for
nominal consideration, Mellon Bank will transfer the investment advisory
contracts and other assets of Access to Mr. Sand in exchange for Mr. Sand's
assumption of substantially all of the liabilities of Access.
Mr. Sand is currently Director, Chairman, CEO, and Chief
Investment Officer of each Fund and currently also Director, CEO, and Chief
Investment Officer of Access. He will retain his positions with the Fund and
Access following the transfer of the assets and liabilities of Access. The
transaction will occur as soon as practicable after obtaining the required
approvals, which the parties anticipate will be on or after February 1, 1997.
As a consequence of the transaction, Mr. Sand will be deemed to control Access
for purposes of the 1940 Act. Upon consummation of the sale, it is anticipated
that the current Directors of each Fund, except for Mr. Sand, will resign.
Access was formed in 1994 as a registered investment
adviser to focus exclusively upon managing the assets of institutional
investors interested in community investing. Access currently serves as the
investment adviser to the Bank Portfolio and the Institutional Investor
Portfolio. Access is presently an indirect wholly owned subsidiary of Mellon
Bank Corporation.
As a Vice President at Shearson and later as First Vice
President of Drexel Burnham Lambert, Mr. Sand worked to combine market returns
and economic results for institutional clients. He also served as Director and
Portfolio Manager for Franklin Research and Development. Mr. Sand received his
undergraduate degree from Princeton and his Masters in Public Administration
from Harvard University.
As Chief Investment Officer, Mr. Sand has and will continue to
have primary responsibility for each Fund's investment program. Mr. Sand will
continue to have responsibility for the formulation of recommendations to the
Board of Directors of each Fund regarding policy issues, including the
establishment of each Fund's investment criteria and any proposed changes to
the Fund's investment policies and restrictions, review of the Fund's
investment portfolio, and reports thereon to the Board.
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DIRECTORS' RECOMMENDATIONS AND OTHER INFORMATION
The Board of Directors of each Fund, including a majority of
the Directors of each Fund who are not interested persons of each Fund as
defined in the 1940 Act, pursuant to written consent of directors in lieu of a
meeting, initially recommended that the sole shareholder of the respective Fund
approve the new Management Agreement pending the Board's approval at a meeting
to be held on January 31, 1997.
In making these recommendations, the Directors of each Fund
have considered information relating to the status of Access following the
completion of the sale of Access, including present capabilities and expertise
in serving as investment adviser to each Fund. They have been informed of the
terms of each New Management Agreement, including the fact that no effective
change to each Fund's investment advisory fees is being proposed. The
Directors of each Fund have also considered the fact that Access would continue
to be familiar with each Fund. The Directors were also advised that Mr. Sand,
the person currently responsible for providing investment advice to each Fund,
will continue to provide investment advice following consummation of the sale
of Access.
In regard to the New Management Agreements, the 1940 Act
provides that, in connection with the sale of any interest in an investment
adviser which results in the "assignment" of an investment advisory contract,
an investment adviser of a registered investment company, or an affiliated
person of such investment adviser, may receive any amount or benefit if (i) for
a period of three years after the sale, at least 75% of the members of the
Board of Trustees of the investment company are not interested persons of the
investment adviser or the predecessor adviser, and (ii) there is no "unfair
burden" imposed on the investment company as a result of such sale or any
express or implied terms, conditions or understanding applicable thereto. For
this purpose, "unfair burden" is defined to include any arrangement during the
two-year period after the transaction, whereby the investment adviser or its
predecessor or successor investment advisers, or any interested persons of any
such adviser, receives or is entitled to receive any compensation directly or
indirectly (i) from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of the investment company
other than bona fide ordinary compensation as principal underwriter for such
company, or (ii) from the investment company or its security holders for other
than bona fide investment advisory or other services. This provision of the
1940 Act was enacted by Congress in 1975 to make it clear that an investment
adviser (or an affiliated person of the adviser) can realize a profit on the
sale of the adviser's business subject to the two safeguards described above.
The majority of the members of the Board of Directors of each Fund is not and
will not be comprised of interested persons of the Funds or Access.
Additionally, the Board of Directors of the Funds has received assurance from
Access that no "unfair burden" will be imposed on the Funds as a result of the
proposed transaction.
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AFFILIATED BROKER TRANSACTIONS
In the fiscal year ended October 31, 1996, no brokerage
commissions were paid to affiliated brokers of the Funds or of Access on
account of trading for the Funds.
January 27, 1997
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EXHIBIT A
MANAGEMENT AGREEMENT
Management Agreement ("Agreement") made as of November 27,
1995 between Access Capital Strategies Community Investment Fund, Inc.: Bank
Portfolio ("Fund"), a Maryland corporation, and Access Capital Strategies
Corporation ("Access"), a Massachusetts corporation. Access is sometimes
referred to herein as the "Manager."
WHEREAS the Fund is a newly organized, non-diversified
closed-end management investment company that has elected status as a business
development company ("BDC") under the Investment Company Act of 1940 ("1940
Act"); and
WHEREAS the Manager is an investment adviser registered as
such under the Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS the Fund desires to retain the Manager to furnish
certain investment advisory, portfolio management, and administrative services
to the Fund and the Manager is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Access as Manager
for the period and on the terms set forth in this Agreement. Access accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Investment Duties. Subject to the supervision of the
Fund's Board of Directors ("Board"), the Manager will provide a continuous
investment program for the Fund and will determine from time to time what
securities and other investments will be purchased, retained, or sold by the
Fund. Subject to investment policies and guidelines established by the Board,
the Manager will identify, evaluate, and structure the investments to be made
by the Fund, arrange debt financing for the Fund, provide portfolio management
and servicing of securities held in the Fund's portfolio, and administer the
Fund's day-to-day affairs.
3. Administrative Duties. The Manager will administer the
affairs of the Fund subject to the supervision of the Board and the following
understandings:
(a) The Manager will supervise all aspects of the operations
of the Fund, including oversight of transfer agency, custodial, and accounting
services; provided, however, that nothing herein contained shall be deemed to
relieve or deprive the Board of its responsibility for and control of the
conduct of the affairs of the Fund.
<PAGE> 11
(b) The Manager will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as required) of the Fund's
registration statement under the Securities Exchange Act of 1934 ("1934 Act"),
proxy material, tax returns, and required reports to the Fund's shareholders
and the Securities and Exchange Commission ("SEC") and other appropriate
federal or state regulatory authorities.
(c) The Manager will maintain or oversee the maintenance of
all books and records with respect to the Fund, and will furnish the Board with
such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the Manager
hereby agrees that all records which it maintains for the Fund are the property
of the Fund, agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records which it maintains for the Fund and which are required
to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Fund any records which it maintains for the Fund upon
request by the Fund.
(d) All cash, securities, and other assets of the Fund will
be maintained in the custody of one or more banks in accordance with the
provisions of Section 17(f) of the 1940 Act and the rules thereunder; the
authority of the Manager to instruct the Fund's custodian(s) to deliver and
receive such cash, securities, and other assets on behalf of the Fund will be
governed by a custodian agreement between the Fund and each such custodian, and
by resolution of the Board.
4. Use of Sub-Investment Adviser. The Manager may, subject
to the approvals required under the 1940 Act, employ a sub-investment adviser
to assist the Manager in the performance of its duties under this Agreement.
Such use does not relieve the Manager of any duty or liability it would
otherwise have under this Agreement. Compensation of any such sub-investment
adviser for services provided and expenses assumed under any agreement between
the Manager and such sub-investment adviser permitted under this paragraph is
the sole responsibility of the Manager.
5. Further Duties. In all matters relating to the
performance of this Agreement, the Manager will act in conformity with the
Articles of Incorporation and By-Laws of the Fund and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
6. Services Not Exclusive. The services furnished by the
Manager hereunder are not to be deemed exclusive and the Manager shall be free
to furnish similar services to others so long as its services under this
Agreement are not impaired thereby. Nothing in this Agreement shall limit or
restrict the right of any director, officer, or employee of the Manager, who
may also be a director, officer, or employee of the Fund, to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar nature
or dissimilar nature.
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7. Expenses.
(a) The Fund will pay all expenses (including without
limitation accounting, legal, printing, clerical, filing, and other expenses)
incurred by the Fund, the Manager or its affiliates on behalf of the Fund in
connection with the organization of the Fund and the initial offering of its
shares. Except as otherwise expressly provided for in Section 7(b) of this
Agreement, during the term of this Agreement the Fund will bear all of its
expenses incurred in its operations including but not limited to the following:
(i) brokerage and commission expense and other transaction costs incident to
the acquisition and dispositions of investments, (ii) federal, state, and local
taxes and fees, including transfer taxes and filing fees, incurred by or levied
upon the Fund, (iii) interest charges and other fees in connection with
borrowings, (iv) SEC fees and expenses and any fees and expenses of state
securities regulatory authorities, (v) expenses of printing and distributing
reports and notices to shareholders, (vi) costs of proxy solicitation, (vii)
costs of meetings of shareholders and the Board, (viii) charges and expenses of
the Fund's custodian, transfer and dividend disbursing agent, and fund
accountant, (ix) compensation and expenses of the Fund's directors who are not
interested persons of the Fund or the Manager, and of any of the Fund's
officers who are not interested persons of the Manager, and expenses of all
directors in attending board or shareholder meetings, (x) legal and auditing
expenses, including expenses incident to the documentation for, and
consummation of, transactions, (xi) costs of any certificates representing the
Shares, (xii) costs of stationery and supplies, (xiii) the costs of membership
by the Fund in any trade organizations, (xiv) expenses associated with
litigation and other extraordinary or non-recurring expenses and (xv) any
insurance premiums.
(b) The expenses to be borne by the Manager are limited to
the following: (i) all costs and fees incident to the selection and
investigation of prospective Fund investments, including associated due
diligence expenses such as travel expenses and professional fees (but excluding
legal and accounting fees and other costs incident to the closing,
documentation, or consummation of such transactions), (ii) the cost of adequate
office space for the Fund and all necessary office equipment and services,
including telephone service, heat, utilities, and similar items, (iii) the
costs of providing the Fund with such corporate, administrative, and clerical
personnel (including officers and directors of the Fund who are interested
persons of the Manager and are acting in their respective capacities as
officers and directors) as the Board reasonably deems necessary or advisable to
perform the services required to be performed by the Manager under this
Agreement, and (iv) the costs of providing significant managerial assistance
offered to an accepted by the recipient of Fund investments.
(c) The Fund may pay directly any expenses incurred by it in
its normal operations and, if any such payment is consented to by the Manager
and acknowledged as otherwise payable by the Manager pursuant to this
Agreement, the Fund may reduce the fee payable to the Manager pursuant to
Paragraph 8 thereof by such amount. To the extent that such deductions exceed
the fee payable to the Manager on any quarterly payment date, such excess shall
be carried forward and deducted in the same manner from the fee payable on
succeeding quarterly payment dates.
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(d) The payment or assumption by the Manager of any expense
of the Fund that the Manager is not required by this Agreement to pay or assume
shall not obligate the Manager to pay or assume the same or any similar expense
of the Fund on any subsequent occasion.
8. Compensation.
(a) For the services provided and the expenses assumed
pursuant to this Agreement, the Fund will pay to the Manager a fee ("Management
Fee"), paid quarterly, at an annual rate of .75% of the Fund's average gross
monthly assets, less accrued liabilities other than indebtedness for
borrowings.
(b) If this Agreement becomes effective or terminates before
the end of any fiscal quarter, the Management Fee for the period from the
effective day to the end of the fiscal quarter or from the beginning of such
quarter to the date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full fiscal quarter
in which such effectiveness or termination occurs.
(c) If (i) the Manager, (ii) an officer, director, or
employee of the Manager, (iii) a company controlling, controlled by, or under
common control with a Manager, or (iv) an officer, director, or employee of any
such company receives any compensation from a company whose securities are held
in the Fund's portfolio in connection with the provision to that company of
significant managerial assistance, the compensation due to the Manager
hereunder shall be reduced by the amount of such fee. If such amounts have not
been fully offset at the time of termination of this Agreement, the Manager
shall pay such excess amounts to the Fund upon termination.
9. Limitation of Liability of Manager. The Manager 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 loss resulting from willful misfeasance, bad faith, or gross
negligence on their part in the performance of their duties or from reckless
disregard by them of their obligations and duties under this Agreement. Any
person, even though also an officer, director, employee, or agent of the
Manager, who may be or become an officer, director, employee, or agent of the
Fund shall be deemed, when rendering services to the Fund or acting with
respect to any business of the Fund, to be rendering such service to or acting
solely for the Fund and not as an officer, director, employee, or agent or one
under the control or direction of the Manager even though paid by it.
10. Duration and Termination.
(a) This Agreement shall become effective upon the date
hereabove written provided that this Agreement shall not take effect unless it
has first been approved (i) by a vote of a majority of those directors of the
Fund who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
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approval, and (ii) by vote of a majority of the Fund's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this
Agreement shall continue in effect for two years from the above written date.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive periods of twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of those
directors of the Fund who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on such approval, and (ii) by the Board or by vote of a majority of
the outstanding voting securities of the Fund.
(c) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by vote of the
Board or by a vote of a majority of the outstanding voting securities of the
Fund on sixty days' written notice to the Manager or by the Manager at any
time, without the payment of any penalty, on sixty days' written notice to the
Fund. This Agreement will automatically terminate in the event of its
assignment.
(d) Notwithstanding the foregoing, if a subsequent Closing
with respect to the Fund does not occur within three years from the date of the
First Closing, Access will submit to the Board an offer of resignation as
Manager. The terms "First Closing" and "Closing" have the meanings ascribed to
them in the Private Offering Memorandum.
11. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged, or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge, or termination is sought, and no amendment of this
Agreement shall be effective until approved by vote of a majority of the Fund's
outstanding voting securities.
12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Maryland, without giving effect to the
conflicts of laws principles thereof, and in accordance with the 1940 Act. To
the extent that the applicable laws of the State of Maryland conflict with the
applicable provisions of the 1940 Act, the latter shall control.
13. Miscellaneous. 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. 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. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors. As used
in this Agreement, the terms "majority of the outstanding voting securities",
"affiliated person", "interested person", "assignment", "broker", "investment
adviser", "national securities exchange", "net assets", "security", and
"significant managerial assistance" shall have the same meaning as such terms
have in the 1940 Act, subject to such exemption as may be granted by the SEC by
any rule, regulation, or order. Where the effect of a requirement of the 1940
Act reflected in any provision of this Agreement is relaxed by
-5-
<PAGE> 15
a rule, regulation, or order of the SEC, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation, or order.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated as of the day and year
first above written.
ACCESS CAPITAL STRATEGIES COMMUNITY
INVESTMENT FUND, INC.: BANK PORTFOLIO
By:/s/ Milton J. Sumption
----------------------
Name: Milton J. Sumption
Title: Vice President
11/27/95
ACCESS CAPITAL STRATEGIES CORPORATION
By:/s/ David F. Sand
-----------------
Name: David F. Sand
Title: CEO
11/27/95
-6-
<PAGE> 16
EXHIBIT B
MANAGEMENT AGREEMENT
Management Agreement ("Agreement") made as of November 27,
1995 between Access Capital Strategies Community Investment Fund, Inc.:
Institutional Investor Portfolio ("Fund"), a Maryland corporation, and Access
Capital Strategies Corporation ("Access"), a Massachusetts corporation. Access
is sometimes referred to herein as the "Manager."
WHEREAS the Fund is a newly organized, non-diversified
closed-end management investment company that has elected status as a business
development company ("BDC") under the Investment Company Act of 1940 ("1940
Act"); and
WHEREAS the Manager is an investment adviser registered as
such under the Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS the Fund desires to retain the Manager to furnish
certain investment advisory, portfolio management, and administrative services
to the Fund and the Manager is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Access as
Manager for the period and on the terms set forth in this Agreement. Access
accepts such appointment and agrees to render the services herein set forth,
for the compensation herein provided.
2. Investment Duties. Subject to the supervision of the
Fund's Board of Directors ("Board"), the Manager will provide a continuous
investment program for the Fund and will determine from time to time what
securities and other investments will be purchased, retained, or sold by the
Fund. Subject to investment policies and guidelines established by the Board,
the Manager will identify, evaluate, and structure the investments to be made
by the Fund, arrange debt financing for the Fund, provide portfolio management
and servicing of securities held in the Fund's portfolio, and administer the
Fund's day-to-day affairs.
3. Administrative Duties. The Manager will administer the
affairs of the Fund subject to the supervision of the Board and the following
understandings:
(a) The Manager will supervise all aspects of the
operations of the Fund, including oversight of transfer agency, custodial, and
accounting services; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for and control of
the conduct of the affairs of the Fund.
<PAGE> 17
(b) The Manager will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as required) of the Fund's
registration statement under the Securities Exchange Act of 1934 ("1934 Act"),
proxy material, tax returns, and required reports to the Fund's shareholders
and the Securities and Exchange Commission ("SEC") and other appropriate
federal or state regulatory authorities.
(c) The Manager will maintain or oversee the maintenance of
all books and records with respect to the Fund, and will furnish the Board with
such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the Manager
hereby agrees that all records which it maintains for the Fund are the property
of the Fund, agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records which it maintains for the Fund and which are required
to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Fund any records which it maintains for the Fund upon
request by the Fund.
(d) All cash, securities, and other assets of the Fund will
be maintained in the custody of one or more banks in accordance with the
provisions of Section 17(f) of the 1940 Act and the rules thereunder; the
authority of the Manager to instruct the Fund's custodian(s) to deliver and
receive such cash, securities, and other assets on behalf of the Fund will be
governed by a custodian agreement between the Fund and each such custodian, and
by resolution of the Board.
4. Use of Sub-Investment Adviser. The Manager may,
subject to the approvals required under the 1940 Act, employ a sub-investment
adviser to assist the Manager in the performance of its duties under this
Agreement. Such use does not relieve the Manager of any duty or liability it
would otherwise have under this Agreement. Compensation of any such
sub-investment adviser for services provided and expenses assumed under any
agreement between the Manager and such sub-investment adviser permitted under
this paragraph is the sole responsibility of the Manager.
5. Further Duties. In all matters relating to the
performance of this Agreement, the Manager will act in conformity with the
Articles of Incorporation and By-Laws of the Fund and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
6. Services Not Exclusive. The services furnished by the
Manager hereunder are not to be deemed exclusive and the Manager shall be free
to furnish similar services to others so long as its services under this
Agreement are not impaired thereby. Nothing in this Agreement shall limit or
restrict the right of any director, officer, or employee of the Manager, who
may also be a director, officer, or employee of the Fund, to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar nature
or dissimilar nature.
-2-
<PAGE> 18
7. Expenses.
(a) The Fund will pay all expenses (including without
limitation accounting, legal, printing, clerical, filing, and other expenses)
incurred by the Fund, the Manager or its affiliates on behalf of the Fund in
connection with the organization of the Fund and the initial offering of its
shares. Except as otherwise expressly provided for in Section 7(b) of this
Agreement, during the term of this Agreement the Fund will bear all of its
expenses incurred in its operations including but not limited to the following:
(i) brokerage and commission expense and other transaction costs incident to
the acquisition and dispositions of investments, (ii) federal, state, and local
taxes and fees, including transfer taxes and filing fees, incurred by or levied
upon the Fund, (iii) interest charges and other fees in connection with
borrowings, (iv) SEC fees and expenses and any fees and expenses of state
securities regulatory authorities, (v) expenses of printing and distributing
reports and notices to shareholders, (vi) costs of proxy solicitation, (vii)
costs of meetings of shareholders and the Board, (viii) charges and expenses of
the Fund's custodian, transfer and dividend disbursing agent, and fund
accountant, (ix) compensation and expenses of the Fund's directors who are not
interested persons of the Fund or the Manager, and of any of the Fund's
officers who are not interested persons of the Manager, and expenses of all
directors in attending board or shareholder meetings, (x) legal and auditing
expenses, including expenses incident to the documentation for, and
consummation of, transactions, (xi) costs of any certificates representing the
Shares, (xii) costs of stationery and supplies, (xiii) the costs of membership
by the Fund in any trade organizations, (xiv) expenses associated with
litigation and other extraordinary or non-recurring expenses and (xv) any
insurance premiums.
(b) The expenses to be borne by the Manager are limited to
the following: (i) all costs and fees incident to the selection and
investigation of prospective Fund investments, including associated due
diligence expenses such as travel expenses and professional fees (but excluding
legal and accounting fees and other costs incident to the closing,
documentation, or consummation of such transactions), (ii) the cost of adequate
office space for the Fund and all necessary office equipment and services,
including telephone service, heat, utilities, and similar items, (iii) the
costs of providing the Fund with such corporate, administrative, and clerical
personnel (including officers and directors of the Fund who are interested
persons of the Manager and are acting in their respective capacities as
officers and directors) as the Board reasonably deems necessary or advisable to
perform the services required to be performed by the Manager under this
Agreement, and (iv) the costs of providing significant managerial assistance
offered to an accepted by the recipient of Fund investments.
(c) The Fund may pay directly any expenses incurred by it
in its normal operations and, if any such payment is consented to by the
Manager and acknowledged as otherwise payable by the Manager pursuant to this
Agreement, the Fund may reduce the fee payable to the Manager pursuant to
Paragraph 8 thereof by such amount. To the extent that such deductions exceed
the fee payable to the Manager on any quarterly payment date, such excess shall
be carried forward and deducted in the same manner from the fee payable on
succeeding quarterly payment dates.
-3-
<PAGE> 19
(d) The payment or assumption by the Manager of any expense
of the Fund that the Manager is not required by this Agreement to pay or assume
shall not obligate the Manager to pay or assume the same or any similar expense
of the Fund on any subsequent occasion.
8. Compensation.
(a) For the services provided and the expenses assumed
pursuant to this Agreement, the Fund will pay to the Manager a fee ("Management
Fee"), paid quarterly, at an annual rate of .75% of the Fund's average gross
monthly assets, less accrued liabilities other than indebtedness for
borrowings.
(b) If this Agreement becomes effective or terminates
before the end of any fiscal quarter, the Management Fee for the period from
the effective day to the end of the fiscal quarter or from the beginning of
such quarter to the date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full fiscal quarter
in which such effectiveness or termination occurs.
(c) If (i) the Manager, (ii) an officer, director, or
employee of the Manager, (iii) a company controlling, controlled by, or under
common control with a Manager, or (iv) an officer, director, or employee of any
such company receives any compensation from a company whose securities are held
in the Fund's portfolio in connection with the provision to that company of
significant managerial assistance, the compensation due to the Manager
hereunder shall be reduced by the amount of such fee. If such amounts have not
been fully offset at the time of termination of this Agreement, the Manager
shall pay such excess amounts to the Fund upon termination.
9. Limitation of Liability of Manager. The Manager 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 loss resulting from willful misfeasance, bad faith, or gross
negligence on their part in the performance of their duties or from reckless
disregard by them of their obligations and duties under this Agreement. Any
person, even though also an officer, director, employee, or agent of the
Manager, who may be or become an officer, director, employee, or agent of the
Fund shall be deemed, when rendering services to the Fund or acting with
respect to any business of the Fund, to be rendering such service to or acting
solely for the Fund and not as an officer, director, employee, or agent or one
under the control or direction of the Manager even though paid by it.
10. Duration and Termination.
(a) This Agreement shall become effective upon the date
hereabove written provided that this Agreement shall not take effect unless it
has first been approved (i) by a vote of a majority of those directors of the
Fund who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
-4-
<PAGE> 20
approval, and (ii) by vote of a majority of the Fund's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this
Agreement shall continue in effect for two years from the above written date.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive periods of twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of those
directors of the Fund who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on such approval, and (ii) by the Board or by vote of a majority of
the outstanding voting securities of the Fund.
(c) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by vote of the
Board or by a vote of a majority of the outstanding voting securities of the
Fund on sixty days' written notice to the Manager or by the Manager at any
time, without the payment of any penalty, on sixty days' written notice to the
Fund. This Agreement will automatically terminate in the event of its
assignment.
(d) Notwithstanding the foregoing, if a subsequent Closing
with respect to the Fund does not occur within three years from the date of the
First Closing, Access will submit to the Board an offer of resignation as
Manager. The terms "First Closing" and "Closing" have the meanings ascribed to
them in the Private Offering Memorandum.
11. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged, or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge, or termination is sought, and no amendment of this
Agreement shall be effective until approved by vote of a majority of the Fund's
outstanding voting securities.
12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Maryland, without giving effect to the
conflicts of laws principles thereof, and in accordance with the 1940 Act. To
the extent that the applicable laws of the State of Maryland conflict with the
applicable provisions of the 1940 Act, the latter shall control.
13. Miscellaneous. 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. 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. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors. As used
in this Agreement, the terms "majority of the outstanding voting securities",
"affiliated person", "interested person", "assignment", "broker", "investment
adviser", "national securities exchange", "net assets", "security", and
"significant managerial assistance" shall have the same meaning as such terms
have in the 1940 Act, subject to such exemption as may be granted by the SEC by
any rule, regulation, or order. Where the effect of a requirement of the 1940
Act reflected in any provision of this Agreement is relaxed by
-5-
<PAGE> 21
a rule, regulation, or order of the SEC, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation, or order.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated as of the day and year
first above written.
ACCESS CAPITAL STRATEGIES COMMUNITY
INVESTMENT FUND, INC.: INSTITUTIONAL INVESTOR
PORTFOLIO
By: /s/ Milton J. Sumption
----------------------
Name: Milton J. Sumption
Title: Vice President
11/27/95
ACCESS CAPITAL STRATEGIES CORPORATION
By: /s/ David F. Sand
-----------------
Name: David F. Sand
Title: CEO
11/27/95
-6-
<PAGE> 22
EXHIBIT C
MANAGEMENT AGREEMENT
Management Agreement ("Agreement") made as of January 31, 1997
between Access Capital Strategies Community Investment Fund, Inc.: Bank
Portfolio ("Fund"), a Maryland corporation, and Access Capital Strategies
Corporation ("Access"), a Massachusetts corporation. Access is sometimes
referred to herein as the "Manager."
WHEREAS the Fund is a newly organized, non-diversified closed-end
management investment company that has elected status as a business development
company ("BDC") under the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS the Manager is an investment adviser registered as such under
the Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS the Fund desires to retain the Manager to furnish certain
investment advisory, portfolio management, and administrative services to the
Fund and the Manager is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Access as Manager for
the period and on the terms set forth in this Agreement. Access accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Investment Duties. Subject to the supervision of the Fund's
Board of Directors ("Board"), the Manager will provide a continuous investment
program for the Fund and will determine from time to time what securities and
other investments will be purchased, retained, or sold by the Fund. Subject to
investment policies and guidelines established by the Board, the Manager will
identify, evaluate, and structure the investments to be made by the Fund,
arrange debt financing for the Fund, provide portfolio management and servicing
of securities held in the Fund's portfolio, and administer the Fund's
day-to-day affairs.
3. Administrative Duties. The Manager will administer the
affairs of the Fund subject to the supervision of the Board and the following
understandings:
(a) The Manager will supervise all aspects of the operations of
the Fund, including oversight of transfer agency, custodial, and accounting
services; provided, however, that nothing herein contained shall be deemed to
relieve or deprive the Board of its responsibility for and control of the
conduct of the affairs of the Fund.
<PAGE> 23
(b) The Manager will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as required) of the Fund's
registration statement under the Securities Exchange Act of 1934 ("1934 Act"),
proxy material, tax returns, and required reports to the Fund's shareholders
and the Securities and Exchange Commission ("SEC") and other appropriate
federal or state regulatory authorities.
(c) The Manager will maintain or oversee the maintenance of all
books and records with respect to the Fund, and will furnish the Board with
such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the Manager
hereby agrees that all records which it maintains for the Fund are the property
of the Fund, agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records which it maintains for the Fund and which are required
to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Fund any records which it maintains for the Fund upon
request by the Fund.
(d) All cash, securities, and other assets of the Fund will be
maintained in the custody of one or more banks in accordance with the
provisions of Section 17(f) of the 1940 Act and the rules thereunder; the
authority of the Manager to instruct the Fund's custodian(s) to deliver and
receive such cash, securities, and other assets on behalf of the Fund will be
governed by a custodian agreement between the Fund and each such custodian, and
by resolution of the Board.
4. Use of Sub-Investment Adviser. The Manager may, subject to
the approvals required under the 1940 Act, employ a sub-investment adviser to
assist the Manager in the performance of its duties under this Agreement. Such
use does not relieve the Manager of any duty or liability it would otherwise
have under this Agreement. Compensation of any such sub-investment adviser for
services provided and expenses assumed under any agreement between the Manager
and such sub-investment adviser permitted under this paragraph is the sole
responsibility of the Manager.
5. Further Duties. In all matters relating to the performance of
this Agreement, the Manager will act in conformity with the Articles of
Incorporation and By-Laws of the Fund and with the instructions and directions
of the Board and will comply with the requirements of the 1940 Act, the rules
thereunder, and all other applicable federal and state laws and regulations.
6. Services Not Exclusive. The services furnished by the Manager
hereunder are not to be deemed exclusive and the Manager shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. Nothing in this Agreement shall limit or restrict
the right of any director, officer, or employee of the Manager, who may also be
a director, officer, or employee of the Fund, to engage in any other business
or to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or dissimilar
nature.
-2-
<PAGE> 24
7. Expenses.
(a) The Fund will pay all expenses (including without limitation
accounting, legal, printing, clerical, filing, and other expenses) incurred by
the Fund, the Manager or its affiliates on behalf of the Fund in connection
with the organization of the Fund and the initial offering of its shares.
Except as otherwise expressly provided for in Section 7(b) of this Agreement,
during the term of this Agreement the Fund will bear all of its expenses
incurred in its operations including but not limited to the following: (i)
brokerage and commission expense and other transaction costs incident to the
acquisition and dispositions of investments, (ii) federal, state, and local
taxes and fees, including transfer taxes and filing fees, incurred by or levied
upon the Fund, (iii) interest charges and other fees in connection with
borrowings, (iv) SEC fees and expenses and any fees and expenses of state
securities regulatory authorities, (v) expenses of printing and distributing
reports and notices to shareholders, (vi) costs of proxy solicitation, (vii)
costs of meetings of shareholders and the Board, (viii) charges and expenses of
the Fund's custodian, transfer and dividend disbursing agent, and fund
accountant, (ix) compensation and expenses of the Fund's directors who are not
interested persons of the Fund or the Manager, and of any of the Fund's
officers who are not interested persons of the Manager, and expenses of all
directors in attending board or shareholder meetings, (x) legal and auditing
expenses, including expenses incident to the documentation for, and
consummation of, transactions, (xi) costs of any certificates representing the
Shares, (xii) costs of stationery and supplies, (xiii) the costs of membership
by the Fund in any trade organizations, (xiv) expenses associated with
litigation and other extraordinary or non-recurring expenses and (xv) any
insurance premiums.
(b) The expenses to be borne by the Manager are limited to the
following: (i) all costs and fees incident to the selection and investigation
of prospective Fund investments, including associated due diligence expenses
such as travel expenses and professional fees (but excluding legal and
accounting fees and other costs incident to the closing, documentation, or
consummation of such transactions), (ii) the cost of adequate office space for
the Fund and all necessary office equipment and services, including telephone
service, heat, utilities, and similar items, (iii) the costs of providing the
Fund with such corporate, administrative, and clerical personnel (including
officers and directors of the Fund who are interested persons of the Manager
and are acting in their respective capacities as officers and directors) as the
Board reasonably deems necessary or advisable to perform the services required
to be performed by the Manager under this Agreement, and (iv) the costs of
providing significant managerial assistance offered to and accepted by the
recipient of Fund investments.
(c) The Fund may pay directly any expenses incurred by it in its
normal operations and, if any such payment is consented to by the Manager and
acknowledged as otherwise payable by the Manager pursuant to this Agreement,
the Fund may reduce the fee payable to the Manager pursuant to Paragraph 8
thereof by such amount. To the extent that such deductions exceed the fee
payable to the Manager on any quarterly payment date, such excess shall be
carried forward and deducted in the same manner from the fee payable on
succeeding quarterly payment dates.
-3-
<PAGE> 25
(d) The payment or assumption by the Manager of any expense of the
Fund that the Manager is not required by this Agreement to pay or assume shall
not obligate the Manager to pay or assume the same or any similar expense of
the Fund on any subsequent occasion.
8. Compensation.
(a) For the services provided and the expenses assumed pursuant to
this Agreement, the Fund will pay to the Manager a fee ("Management Fee"), paid
quarterly, at an annual rate of .75% of the Fund's average gross monthly
assets, less accrued liabilities other than indebtedness for borrowings.
(b) If this Agreement becomes effective or terminates before the
end of any fiscal quarter, the Management Fee for the period from the effective
day to the end of the fiscal quarter or from the beginning of such quarter to
the date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full fiscal quarter in which such
effectiveness or termination occurs.
(c) If (i) the Manager, (ii) an officer, director, or employee of
the Manager, (iii) a company controlling, controlled by, or under common
control with a Manager, or (iv) an officer, director, or employee of any such
company receives any compensation from a company whose securities are held in
the Fund's portfolio in connection with the provision to that company of
significant managerial assistance, the compensation due to the Manager
hereunder shall be reduced by the amount of such fee. If such amounts have not
been fully offset at the time of termination of this Agreement, the Manager
shall pay such excess amounts to the Fund upon termination.
9. Limitation of Liability of Manager. The Manager 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 loss resulting from willful misfeasance, bad faith, or gross negligence on
their part in the performance of their duties or from reckless disregard by
them of their obligations and duties under this Agreement. Any person, even
though also an officer, director, employee, or agent of the Manager, who may be
or become an officer, director, employee, or agent of the Fund shall be deemed,
when rendering services to the Fund or acting with respect to any business of
the Fund, to be rendering such service to or acting solely for the Fund and not
as an officer, director, employee, or agent or one under the control or
direction of the Manager even though paid by it.
10. Duration and Termination.
(a) This Agreement shall become effective upon the date hereabove
written provided that this Agreement shall not take effect unless it has first
been approved (i) by a vote of a majority of those directors of the Fund who
are not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such
-4-
<PAGE> 26
approval, and (ii) by vote of a majority of the Fund's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Agreement
shall continue in effect for two years from the above written date.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive periods of twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of those
directors of the Fund who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on such approval, and (ii) by the Board or by vote of a majority of
the outstanding voting securities of the Fund.
(c) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by vote of the
Board or by a vote of a majority of the outstanding voting securities of the
Fund on sixty days' written notice to the Manager or by the Manager at any
time, without the payment of any penalty, on sixty days' written notice to the
Fund. This Agreement will automatically terminate in the event of its
assignment.
11. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge, or termination is sought, and no amendment of this
Agreement shall be effective until approved by vote of a majority of the Fund's
outstanding voting securities.
12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Maryland, without giving effect to the
conflicts of laws principles thereof, and in accordance with the 1940 Act. To
the extent that the applicable laws of the State of Maryland conflict with the
applicable provisions of the 1940 Act, the latter shall control.
13. Miscellaneous. 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. 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities",
"affiliated person", "interested person", "assignment", "broker", "investment
adviser", "national securities exchange", "net assets", "security", and
"significant managerial assistance" shall have the same meaning as such terms
have in the 1940 Act, subject to such exemption as may be granted by the SEC by
any rule, regulation, or order. Where the effect of a requirement of the 1940
Act reflected in any provision of this Agreement is relaxed by a rule,
regulation, or order of the SEC, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation, or order.
-5-
<PAGE> 27
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
ACCESS CAPITAL STRATEGIES COMMUNITY
INVESTMENT FUND, INC.: BANK PORTFOLIO
By:
------------------
Name:
Title:
ACCESS CAPITAL STRATEGIES CORPORATION
By:
------------------
Name:
Title:
-6-
<PAGE> 28
EXHIBIT D
MANAGEMENT AGREEMENT
Management Agreement ("Agreement") made as of January 31, 1997
between Access Capital Strategies Community Investment Fund, Inc.:
Institutional Investor Portfolio ("Fund"), a Maryland corporation, and Access
Capital Strategies Corporation ("Access"), a Massachusetts corporation. Access
is sometimes referred to herein as the "Manager."
WHEREAS the Fund is a non-diversified closed-end management investment
company that has elected status as a business development company ("BDC") under
the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS the Manager is an investment adviser registered as such under
the Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS the Fund desires to retain the Manager to furnish certain
investment advisory, portfolio management, and administrative services to the
Fund and the Manager is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Access as Manager for
the period and on the terms set forth in this Agreement. Access accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Investment Duties. Subject to the supervision of the Fund's
Board of Directors ("Board"), the Manager will provide a continuous investment
program for the Fund and will determine from time to time what securities and
other investments will be purchased, retained, or sold by the Fund. Subject to
investment policies and guidelines established by the Board, the Manager will
identify, evaluate, and structure the investments to be made by the Fund,
arrange debt financing for the Fund, provide portfolio management and servicing
of securities held in the Fund's portfolio, and administer the Fund's
day-to-day affairs.
3. Administrative Duties. The Manager will administer the
affairs of the Fund subject to the supervision of the Board and the following
understandings:
(a) The Manager will supervise all aspects of the operations of
the Fund, including oversight of transfer agency, custodial, and accounting
services; provided, however, that nothing herein contained shall be deemed to
relieve or deprive the Board of its responsibility for and control of the
conduct of the affairs of the Fund.
<PAGE> 29
(b) The Manager will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as required) of the Fund's
registration statement under the Securities Exchange Act of 1934 ("1934 Act"),
proxy material, tax returns, and required reports to the Fund's shareholders
and the Securities and Exchange Commission ("SEC") and other appropriate
federal or state regulatory authorities.
(c) The Manager will maintain or oversee the maintenance of all
books and records with respect to the Fund, and will furnish the Board with
such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the Manager
hereby agrees that all records which it maintains for the Fund are the property
of the Fund, agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records which it maintains for the Fund and which are required
to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Fund any records which it maintains for the Fund upon
request by the Fund.
(d) All cash, securities, and other assets of the Fund will be
maintained in the custody of one or more banks in accordance with the
provisions of Section 17(f) of the 1940 Act and the rules thereunder; the
authority of the Manager to instruct the Fund's custodian(s) to deliver and
receive such cash, securities, and other assets on behalf of the Fund will be
governed by a custodian agreement between the Fund and each such custodian, and
by resolution of the Board.
4. Use of Sub-Investment Adviser. The Manager may, subject to
the approvals required under the 1940 Act, employ a sub-investment adviser to
assist the Manager in the performance of its duties under this Agreement. Such
use does not relieve the Manager of any duty or liability it would otherwise
have under this Agreement. Compensation of any such sub-investment adviser for
services provided and expenses assumed under any agreement between the Manager
and such sub-investment adviser permitted under this paragraph is the sole
responsibility of the Manager.
5. Further Duties. In all matters relating to the performance of
this Agreement, the Manager will act in conformity with the Articles of
Incorporation and By-Laws of the Fund and with the instructions and directions
of the Board and will comply with the requirements of the 1940 Act, the rules
thereunder, and all other applicable federal and state laws and regulations.
6. Services Not Exclusive. The services furnished by the Manager
hereunder are not to be deemed exclusive and the Manager shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. Nothing in this Agreement shall limit or restrict
the right of any director, officer, or employee of the Manager, who may also be
a director, officer, or employee of the Fund, to engage in any other business
or to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or dissimilar
nature.
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<PAGE> 30
7. Expenses.
(a) The Fund will pay all expenses (including without limitation
accounting, legal, printing, clerical, filing, and other expenses) incurred by
the Fund, the Manager or its affiliates on behalf of the Fund in connection
with the organization of the Fund and the initial offering of its shares.
Except as otherwise expressly provided for in Section 7(b) of this Agreement,
during the term of this Agreement the Fund will bear all of its expenses
incurred in its operations including but not limited to the following: (i)
brokerage and commission expense and other transaction costs incident to the
acquisition and dispositions of investments, (ii) federal, state, and local
taxes and fees, including transfer taxes and filing fees, incurred by or levied
upon the Fund, (iii) interest charges and other fees in connection with
borrowings, (iv) SEC fees and expenses and any fees and expenses of state
securities regulatory authorities, (v) expenses of printing and distributing
reports and notices to shareholders, (vi) costs of proxy solicitation, (vii)
costs of meetings of shareholders and the Board, (viii) charges and expenses of
the Fund's custodian, transfer and dividend disbursing agent, and fund
accountant, (ix) compensation and expenses of the Fund's directors who are not
interested persons of the Fund or the Manager, and of any of the Fund's
officers who are not interested persons of the Manager, and expenses of all
directors in attending board or shareholder meetings, (x) legal and auditing
expenses, including expenses incident to the documentation for, and
consummation of, transactions, (xi) costs of any certificates representing the
Shares, (xii) costs of stationery and supplies, (xiii) the costs of membership
by the Fund in any trade organizations, (xiv) expenses associated with
litigation and other extraordinary or non-recurring expenses and (xv) any
insurance premiums.
(b) The expenses to be borne by the Manager are limited to the
following: (i) all costs and fees incident to the selection and investigation
of prospective Fund investments, including associated due diligence expenses
such as travel expenses and professional fees (but excluding legal and
accounting fees and other costs incident to the closing, documentation, or
consummation of such transactions), (ii) the cost of adequate office space for
the Fund and all necessary office equipment and services, including telephone
service, heat, utilities, and similar items, (iii) the costs of providing the
Fund with such corporate, administrative, and clerical personnel (including
officers and directors of the Fund who are interested persons of the Manager
and are acting in their respective capacities as officers and directors) as the
Board reasonably deems necessary or advisable to perform the services required
to be performed by the Manager under this Agreement, and (iv) the costs of
providing significant managerial assistance offered to and accepted by the
recipient of Fund investments.
(c) The Fund may pay directly any expenses incurred by it in its
normal operations and, if any such payment is consented to by the Manager and
acknowledged as otherwise payable by the Manager pursuant to this Agreement,
the Fund may reduce the fee payable to the Manager pursuant to Paragraph 8
thereof by such amount. To the extent that such deductions exceed the fee
payable to the Manager on any quarterly payment date, such excess shall be
carried forward and deducted in the same manner from the fee payable on
succeeding quarterly payment dates.
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<PAGE> 31
(d) The payment or assumption by the Manager of any expense of the
Fund that the Manager is not required by this Agreement to pay or assume shall
not obligate the Manager to pay or assume the same or any similar expense of
the Fund on any subsequent occasion.
8. Compensation.
(a) For the services provided and the expenses assumed pursuant to
this Agreement, the Fund will pay to the Manager a fee ("Management Fee"), paid
quarterly, at an annual rate of .75% of the Fund's average gross monthly
assets, less accrued liabilities other than indebtedness for borrowings.
(b) If this Agreement becomes effective or terminates before the
end of any fiscal quarter, the Management Fee for the period from the effective
day to the end of the fiscal quarter or from the beginning of such quarter to
the date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full fiscal quarter in which such
effectiveness or termination occurs.
(c) If (i) the Manager, (ii) an officer, director, or employee of
the Manager, (iii) a company controlling, controlled by, or under common
control with a Manager, or (iv) an officer, director, or employee of any such
company receives any compensation from a company whose securities are held in
the Fund's portfolio in connection with the provision to that company of
significant managerial assistance, the compensation due to the Manager
hereunder shall be reduced by the amount of such fee. If such amounts have not
been fully offset at the time of termination of this Agreement, the Manager
shall pay such excess amounts to the Fund upon termination.
9. Limitation of Liability of Manager. The Manager 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 loss resulting from willful misfeasance, bad faith, or gross negligence on
their part in the performance of their duties or from reckless disregard by
them of their obligations and duties under this Agreement. Any person, even
though also an officer, director, employee, or agent of the Manager, who may be
or become an officer, director, employee, or agent of the Fund shall be deemed,
when rendering services to the Fund or acting with respect to any business of
the Fund, to be rendering such service to or acting solely for the Fund and not
as an officer, director, employee, or agent or one under the control or
direction of the Manager even though paid by it.
10. Duration and Termination.
(a) This Agreement shall become effective upon the date hereabove
written provided that this Agreement shall not take effect unless it has first
been approved (i) by a vote of a majority of those directors of the Fund who
are not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such
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<PAGE> 32
approval, and (ii) by vote of a majority of the Fund's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Agreement
shall continue in effect for two years from the above written date.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive periods of twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of those
directors of the Fund who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on such approval, and (ii) by the Board or by vote of a majority of
the outstanding voting securities of the Fund.
(c) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by vote of the
Board or by a vote of a majority of the outstanding voting securities of the
Fund on sixty days' written notice to the Manager or by the Manager at any
time, without the payment of any penalty, on sixty days' written notice to the
Fund. This Agreement will automatically terminate in the event of its
assignment.
11. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge, or termination is sought, and no amendment of this
Agreement shall be effective until approved by vote of a majority of the Fund's
outstanding voting securities.
12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Maryland, without giving effect to the
conflicts of laws principles thereof, and in accordance with the 1940 Act. To
the extent that the applicable laws of the State of Maryland conflict with the
applicable provisions of the 1940 Act, the latter shall control.
13. Miscellaneous. 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. 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities",
"affiliated person", "interested person", "assignment", "broker", "investment
adviser", "national securities exchange", "net assets", "security", and
"significant managerial assistance" shall have the same meaning as such terms
have in the 1940 Act, subject to such exemption as may be granted by the SEC by
any rule, regulation, or order. Where the effect of a requirement of the 1940
Act reflected in any provision of this Agreement is relaxed by a rule,
regulation, or order of the SEC, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation, or order.
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<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
ACCESS CAPITAL STRATEGIES COMMUNITY
INVESTMENT FUND, INC.: INSTITUTIONAL INVESTOR
PORTFOLIO
By:
------------------
Name:
Title:
ACCESS CAPITAL STRATEGIES CORPORATION
By:
------------------
Name:
Title:
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