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EXHIBIT (10)(i)
FORM OF MANAGEMENT AGREEMENT
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FORM OF MANAGEMENT AGREEMENT
Management Agreement ("Agreement") made as of __________, 1997
between Access Capital Strategies Community Investment Fund, Inc. ("Fund"), a
Maryland corporation, and Access Capital Strategies LLC ("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.
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(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(a)
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
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forward and deducted in the same manner from the fee payable on succeeding
quarterly payment dates.
(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 .50% of the Fund's average gross monthly
assets, less accrued liabilities other than indebtedness for borrowings.
(b) Upon the structuring and effecting of a transaction for the
Fund, the Fund will pay the Manager an investment structuring fee of 1.00% of
the Fund's net assets.
(c) 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.
(d) 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.
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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 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
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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.
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.
By:
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Name:
Title:
ACCESS CAPITAL STRATEGIES LLC
By:
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Name:
Title:
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