INVESTMENT SUB-ADVISORY AGREEMENT
Exhibit (g)(iv)
AGREEMENT made as of this 31st day of August, 2006 by and between Access Capital Strategies,
LLC, a Delaware limited liability corporation and a federally registered investment adviser
(“Manager”), and Voyageur Asset Management Inc., a Minnesota corporation and a federally registered
investment adviser (“Sub-Adviser”).
WHEREAS, Manager serves as the investment manager for the Access Capital Strategies Community
Investment Fund, Inc. (the “Fund”), a closed-end management investment company registered under the
Investment Company Act of 1940, as amended (the “1940 Act”) pursuant to an Investment Management
Agreement between Manager and the Fund (as such agreement may be modified from time to time, the
“Management Agreement”); and
WHEREAS, Manager desires to retain Sub-Adviser to furnish investment advisory services for a
certain designated portion of the Fund’s investment portfolio, upon the terms and conditions
hereafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto
agree as follows:
1. Appointment. Manager hereby appoints Sub-Adviser to provide certain sub-investment
advisory services to the Fund for the period and on the terms set forth in this Agreement.
Sub-Adviser accepts such appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. Services to be Performed. Subject always to the supervision of Fund’s Board of Trustees
and the Manager, Sub-Adviser will furnish an investment program in respect of, have discretionary
authority to make investment decisions for, and place all orders for the purchase and sale of
securities for the Fund’s investment portfolio, all on behalf of the Fund and as described in the
Fund’s initial registration statement on Form N-2 as declared effective by the Securities and
Exchange Commission, consistent with the investment objectives and restrictions of the Fund
described therein and as they may subsequently be changed by the Fund’s Board of Trustees and
publicly described and as the Sub-Adviser is notified of such changes. In the performance of its
duties, Sub-Adviser will satisfy its fiduciary duties to the Fund, will monitor the Fund’s
investments in securities selected for the Fund by the Sub-Adviser hereunder, and will comply with
the provisions of the Fund’s Declaration of Trust and By-laws, as amended from time to time, and
the investment objectives, policies and restrictions of the Fund, to the extent the Sub-Adviser has
been notified of such objectives, policies and restrictions. Manager will provide Sub-Adviser with
current copies of the Fund’s Declaration of Trust, By-laws, prospectus and any amendments thereto,
and any written objectives, policies, procedures or limitations not appearing therein as they may
be relevant to Sub-Adviser’s performance under this Agreement. Sub-Adviser and Manager will each
make its officers and employees available to the other from time to time at reasonable times to
review investment policies of the Fund and to consult with each other regarding the
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investment affairs of the Fund. Sub-Adviser will report to the Board of Trustees and to Manager
with respect to the implementation of such program.
The Sub-Adviser will not be responsible for voting proxies relating to securities in which assets
of the Fund’s investment portfolio are invested, or for maintaining any records detailing such
votes. The Sub-Adviser shall not be responsible for any other corporate actions relating to the
Account, including administrative filings, such as proofs or claims in class actions.
Sub-Adviser is authorized to select the brokers or dealers that will execute the purchases and
sales of portfolio securities for the Fund, and is directed to use its commercially reasonable
efforts to obtain best execution, which includes most favorable net results and execution of the
Fund’s orders, taking into account all appropriate factors, including price, dealer spread or
commission, size and difficulty of the transaction and research or other services provided. It is
understood that the Sub-Adviser will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund, or be in breach of any obligation owing to the Fund under this
Agreement, or otherwise, solely by reason of its having caused the Fund to pay a member of a
securities exchange, a broker or a dealer a commission for effecting a securities transaction for
the Fund in excess of the amount of commission another member of an exchange, broker or dealer
would have charged if the Sub-Adviser determined in good faith that the commission paid was
reasonable in relation to the brokerage or research services provided by such member, broker or
dealer, viewed in terms of that particular transaction or the Sub-Adviser’s overall
responsibilities with respect to its accounts, including the Fund, as to which it exercises
investment discretion. In addition, if in the judgment of the Sub-Adviser, the Fund would be
benefited by supplemental services, the Sub-Adviser is authorized to pay spreads or commissions to
brokers or dealers furnishing such services in excess of spreads or commissions that another broker
or dealer may charge for the same transaction, provided that the Sub-Adviser determined in good
faith that the commission or spread paid was reasonable in relation to the services provided. The
Sub-Adviser will properly communicate to the officers and trustees of the Fund such information
relating to transactions for the Fund as they may reasonably request. In no instance will
portfolio securities be purchased from or sold to the Manager, Sub-Adviser or any affiliated person
of the Fund, Manager, or Sub-Adviser, except as may be permitted under the 1940 Act. The Advisor
shall not be responsible for any loss caused by any act or omission of any broker/dealer; provided,
however, that with respect to those broker/dealers that have been selected by the Advisor, the
Advisor has acted prudently in the selection of such broker/dealers.
Sub-Adviser further agrees that it:
a) will use the same degree of skill and care in providing such services as it uses in
providing services to fiduciary accounts for which it has investment responsibilities;
b) will conform to all applicable Rules and Regulations of the Securities and Exchange
Commission in all material respects and in addition will conduct its activities
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under this Agreement in accordance with any applicable regulations of any governmental
authority pertaining to its investment advisory activities;
c) will report regularly to Manager and to the Board of Trustees of the Fund and will make
appropriate persons available for the purpose of reviewing with representatives of Manager and the
Board of Trustees on a regular basis at reasonable times the management of the Fund, including,
without limitation, review of the general investment strategies of the Fund with respect to the
portion of the Fund’s portfolio allocated to the Sub-Adviser, the performance of the Fund’s
investment portfolio allocated to the Sub-Adviser in relation to standard industry indices and
general conditions affecting the marketplace and will provide various other reports from time to
time as reasonably requested by Manager;
d) will monitor the pricing of portfolio securities, and events relating to the issuers of
those securities and the markets in which the securities trade in the ordinary course of managing
the portfolio securities of the Fund, and will use its best efforts to notify Manager promptly of
any issuer-specific or market events or other situations that occur (particularly those that may
occur after the close of a foreign market in which the securities may primarily trade but before
the time at which the Fund’s securities are priced on a given day), of which the Sub-Adviser
becomes aware, that may materially impact the pricing of one or more securities in Sub-Adviser’s
portion of the portfolio. In addition, Sub-Adviser will assist Manager in evaluating the impact
that such an event may have on the net asset value of the Fund and in determining a recommended
fair value of the affected security or securities; and
e) will prepare such books and records with respect to the Fund’s securities transactions for
the portion of the Fund’s investment portfolio allocated to the Sub-Adviser as reasonably requested
by the Manager and will furnish Manager and Fund’s Board of Trustees such periodic and special
reports as the Board or Manager may reasonably request.
3. Representations of Manager. Manager hereby represents that it:
a) is registered as an investment adviser under the Advisers Act and will continue to be so
registered for so long as this Agreement remains in effect;
b) is not prohibited by the 1940 Act or the Advisers Act from performing investment advisory
services to the Fund;
c) has met, and will continue to meet for so long as this Agreement remains in effect, any
applicable federal or state requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency, or the applicable licensing requirements for the use of any
trademarks necessary to be met in order to perform investment advisory services for the Fund; and
d) will immediately notify the Sub-Adviser of the occurrence of any event that would
disqualify the Manager from serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
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4. Representations of Sub-Adviser. Sub-Adviser hereby represents that it:
a) is registered as an investment adviser under the Advisers Act and will continue to be so
registered for so long as this Agreement remains in effect;
b) is not prohibited by the 1940 Act or the Advisers Act from performing investment advisory
services to the Fund;
c) has met, and will continue to meet for so long as this Agreement remains in effect, any
applicable federal or state requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency necessary to be met in order to perform investment advisory
services for the Fund; and
d) will immediately notify the Manager of the occurrence of any event that would disqualify
the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section
9(a) of the 1940 Act or otherwise.
5. Expenses. During the term of this Agreement, Sub-Adviser will pay all expenses incurred
by it in connection with its activities under this Agreement other than the cost of securities
(including brokerage commissions and other related expenses) purchased for the Fund.
6. Compensation. For the services provided and the expenses assumed pursuant to this
Agreement, Manager will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full
compensation therefore, an annual portfolio management fee of 0.15% calculated based on the market
value of the Fund gross assets (including principal and accrued income).
The portfolio management fee shall accrue on each calendar day, and shall be payable monthly on the
first business day of the next succeeding calendar month. The daily fee accrual shall be computed
by multiplying the fraction of one divided by the number of days in the calendar year by the
applicable annual rate of fee, and multiplying this product by the net assets of the Fund ,
determined in the manner established by the Fund’s Board of Trustees, as of the close of business
on the last preceding business day on which the Fund’s net asset value was determined.
For the month and year in which this Agreement becomes effective or terminates, there shall be an
appropriate proration on the basis of the number of days that the Agreement is in effect during the
month and year, respectively.
Manager shall not agree to amend the financial terms of the Management Agreement to the detriment
of the Sub-Adviser by operation of this Section 6 without the express written consent of the
Sub-Adviser.
7. Services to Others. Manager understands, and has advised Fund’s Board of Trustees, that
Sub-Adviser now acts, or may in the future act, as an investment adviser to other investment
portfolios including investment companies, provided that whenever the Fund and one or more other
investment advisory clients of Sub-Adviser have available
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funds for investment, investments suitable and appropriate for each will be allocated in a manner
believed by Sub-Adviser to be equitable to each. Manager recognizes, and has advised Fund’s Board
of Trustees, that in some cases this procedure may adversely affect the size of the position that
the Fund may obtain in a particular security. It is further agreed that, on occasions when the
Sub-Adviser deems the purchase or sale of a security to be in the best interests of the Fund as
well as other accounts, it may, to the extent permitted by applicable law, but will not be
obligated to, aggregate the securities to be so sold or purchased for the Fund with those to be
sold or purchased for other accounts in order to obtain favorable execution and lower brokerage
commissions. In addition, Manager understands, and has advised Fund’s Board of Trustees, that the
persons employed by Sub-Adviser to assist in Sub-Adviser’s duties under this Agreement will not
devote their full such efforts and service to the Fund. It is also agreed that the Sub-Adviser may
use any supplemental research obtained for the benefit of the Fund in providing investment advice
to its other investment advisory accounts or for managing its own accounts.
8. Limitation of Liability. The Sub-Adviser shall not be liable for, and Manager will not
take any action against the Sub-Adviser to hold Sub-Adviser liable for, any error of judgment or
mistake of law or for any loss suffered by the Fund (including, without limitation, by reason of
the purchase, sale or retention of any security) in connection with the performance of the
Sub-Adviser’s duties under this Agreement, except for a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Sub-Adviser in the performance of its duties under
this Agreement, or by reason of its reckless disregard of its obligations and duties under this
Agreement.
9. Term; Termination; Amendment. This Agreement shall become effective with respect to the
Fund on the same date that it is approved by a vote of a majority of the outstanding voting
securities of the Fund in accordance with the requirements of the 1940 Act, and shall remain in
full force until September 30, 2007, unless sooner terminated as hereinafter provided. This
Agreement shall continue in force from year to year thereafter with respect to the Fund, but only
as long as such continuance is specifically approved for the Fund at least annually in the manner
required by the 1940 Act and the rules and regulations thereunder; provided, however, that if the
continuation of this Agreement is not approved for the Fund, the Sub-Adviser may continue to serve
in such capacity for the Fund in the manner and to the extent permitted by the 1940 Act and the
rules and regulations thereunder.
This Agreement shall automatically terminate in the event of its assignment and may be terminated
at any time without the payment of any penalty by the Manager on no less than sixty (60) days’
written notice to the Sub-Adviser. This Agreement may be terminated at any time without the
payment of any penalty by the Sub-Adviser on no less than sixty (60) days’ written notice to the
Manager. This Agreement may also be terminated by the Fund with respect to the Fund by action of
the Board of Trustees or by a vote of a majority of the outstanding voting securities of such Fund
on no less than sixty (60) days’ written notice to the Sub-Adviser by the Fund.
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This Agreement may be terminated with respect to the Fund at any time without the payment of any
penalty by the Manager, the Board of Trustees or by vote of a majority of the outstanding voting
securities of the Fund in the event that it shall have been established by a court of competent
jurisdiction that the Sub-Adviser or any officer or director of the Sub-Adviser has taken any
action that results in a breach of the representations of the Sub-Adviser set forth herein.
The terms “assignment” and “vote of a majority of the outstanding voting securities” shall have the
meanings set forth in the 1940 Act and the rules and regulations thereunder.
Termination of this Agreement shall not affect the right of the Sub-Adviser to receive payments on
any unpaid balance of the compensation described in Section 6 earned prior to the effective date of
such termination. This Agreement shall automatically terminate in the event the Management
Agreement between the Manager and the Fund is terminated, assigned or not renewed.
10. Notice. Any notice under this Agreement shall be in writing, addressed and delivered
or mailed, postage prepaid, to the other party
If to the Manager:
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If to the Sub-Adviser: | |
Access Capital Strategies, LLC
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Voyageur Asset Management Inc. | |
000 Xxxxxxxx Xxxxxx, Xxxxx 000
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100 South Fifth Street, Suite 2300 | |
Xxxxxx, Xxxxxxxxxxxxx 00000
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Xxxxxxxxxxx, Xxxxxxxxx 00000 | |
Attn: Xxxxx X. Sand, President
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Attn: Chief Operating Officer | |
| cc: Xxxxx X. Xxxxxxx, Managing Director |
or such address as each such party may designate for the receipt of such notice.
11. Limitations on Liability. All parties hereto are expressly put on notice of the Fund’s
Agreement and Declaration of Trust and all amendments thereto, a copy of which is on file with the
State of Maryland, and the limitation of shareholder and trustee liability contained therein. The
obligations of the Fund entered in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually but only in such capacities and are not binding
upon any of the Trustees, officers, or shareholders of the Fund individually but are binding upon
only the assets and property of the Fund, and persons dealing with the Fund must look solely to the
assets of the Fund and those assets belonging to the subject Fund, for the enforcement of any
claims.
12. 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 is held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of the parties hereto
and their respective successors.
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13. Applicable Law. This Agreement shall be construed in accordance with applicable
federal law and the laws of the State of Minnesota.
IN WITNESS WHEREOF, the Manager and the Sub-Adviser have caused this Agreement to be executed as of
the day and year first above written.
By:
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/s/ Xxxxx X. Sand
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By: | /s/ Xxxx X. Xxxxx
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Title:
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President | Title: | Chief Operating Officer |
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VOYAGEUR ASSET MANAGEMENT INC
Fifth Street Towers
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
Fifth Street Towers
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
October 3, 2006
| Access Capital Strategies, LLC | Via Facsimile | |
| 000 Xxxxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxxx, XX 00000 |
Re: Investment Sub-Advisory Services to Access Capital Strategies Community
Investment Fund, Inc.
To Whom it May Concern:
We are writing to confirm our understanding that our investment sub-advisory responsibilities with
respect to the Fund commenced effective October 2, 2006.
We axe further writing to confirm that pending the U.S. Securities & Exchange Commission’s
declaring effective the Fund’s registration statement on Form N-2/A, we are to rely on the
disclosure concerning the Fund’s investment objectives and restrictions currently on file with the
Commission in providing such services.
Please indicate your agreement with the above by signing below where indicated.
| Sincerely, | ||||
| /s/ Xxxx X. Xxxxx | ||||
| Chief Operating Officer |
Agreed to by:
/s/ Xxxxx X. Sand 10/30/06
|
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