Exhibit 10.1
ADMINISTRATION AGREEMENT
This Administration Agreement (this “Agreement”)
is made as of April 1, 2018, by and between CĪON INVESTMENT CORPORATION, a Maryland corporation (hereinafter referred to as
the “Company”), and CION Investment Management, LLC, a Delaware limited liability company, (hereinafter referred to
as the “Administrator”).
WITNESSETH:
WHEREAS, the Company is a non-diversified
closed-end management investment company that has elected to be treated as a business development company under the Investment
Company Act of 1940 (together with the rules promulgated thereunder, the “1940 Act”);
WHEREAS, the Company desires to retain
the Administrator to provide administrative services to the Company in the manner and on the terms and conditions hereinafter set
forth; and
WHEREAS, the Administrator is willing
to provide administrative services to the Company in the manner and on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration
of the premises and the covenants hereinafter contained and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Company and the Administrator hereby agree as follows:
| 1. | Duties of the Administrator |
(a) Engagement
of Administrator. The Company hereby engages and retains the Administrator to furnish, or arrange for others to furnish, the
administrative services, personnel and facilities described below for the period and on the terms and conditions set forth in this
Agreement. The Administrator hereby accepts such engagement and retention and agrees during such period to render, or arrange for
the rendering of, such services and to assume the obligations herein set forth, subject to the reimbursement of costs and expenses
provided for below. The Administrator, and any others with whom the Administrator subcontracts to provide the services set forth
herein, shall for all purposes herein be deemed to be independent contractors of the Company and shall, unless otherwise expressly
provided or authorized herein, have no authority to act for or represent the Company in any way or otherwise be deemed agents of
the Company.
(b) Services.
The Administrator shall perform (or oversee, or arrange for, the performance of) the administrative services necessary for the
operation of the Company. Without limiting the generality of the foregoing, the Administrator shall:
(i) provide the Company with clerical, bookkeeping,
accounting and recordkeeping services, legal services, and shall provide all such other services, except investment advisory services,
as the Administrator and the Company shall from time to time determine to be necessary or useful to perform its obligations under
this Agreement;
(ii) on behalf of the Company, enter into
agreements and/or conduct relations with custodians, depositories, transfer agents, distribution payment agents, the dividend reinvestment
plan administrator, stockholder servicing agents, accountants, auditors, tax consultants, advisers and experts, investment advisers,
compliance officers, escrow agents, attorneys, underwriters, managing dealer, brokers and dealers, investor custody and share transaction
clearing platforms, marketing, sales and advertising materials contractors, public relations firms, investor communication agents,
printers, insurers, banks, independent valuation firms, and such other persons in any such other capacity deemed to be necessary
or desirable by the Administrator and the Company;
(iii) enter into, and the Administrator
is hereby authorized to enter into, one or more sub-administration agreements with other service providers (each a “Sub-Administrator”)
pursuant to which the Administrator may obtain the services of the service providers in fulfilling its responsibilities hereunder.
Any such sub-administration agreement shall contain a provision requiring the Sub-Administrator to comply with Sections 2 and 3
below as if it were the Administrator;
(iv) make reports to the Board of Directors
of the Company (the “Board”) of the performance of its obligations hereunder;
(v) furnish advice and recommendations with
respect to such other aspects of the business and affairs of the Company as the Administrator reasonably shall determine to be
desirable; provided, that nothing herein shall be construed to require the Administrator to, and the Administrator shall not pursuant
to this Agreement, provide any advice or recommendation relating to the securities or other assets that the Company should purchase,
retain or sell or any other investment advisory services to the Company;
(vi) assist the Company in the preparation
of the financial and other records that the Company is required to maintain and the preparation, printing and dissemination of
reports that the Company is required to furnish to stockholders, and reports and other materials filed with the Securities and
Exchange Commission (the “SEC”), and states and jurisdictions where any offering of the Company’s shares is registered
and there is a duty to file information with one or more states on an ongoing basis;
(vii) assist the Company in determining
and publishing the Company’s net asset value, oversee the preparation and filing of the Company’s tax returns, and
generally oversee and monitor the payment of the Company’s expenses and ensure that fees and expenses are within any applicable
limitations set forth in the Company’s articles of incorporation, as amended from time to time (the “Articles of Incorporation”);
(viii) oversee the performance of sub-administrative
and other professional services rendered to the Company by others; and
(ix) offer managerial assistance to the
Company’s portfolio companies, which managerial assistance may include monitoring the operations of the portfolio companies,
participating in board and management meetings, consulting with and advising officers of the portfolio companies and providing
other organizational and financial guidance.
The Administrator shall maintain and keep all books, accounts
and other records of the Company that relate to activities performed by the Administrator hereunder as required under the 1940
Act. The Administrator agrees that all records that it maintains and preserves for the Company shall at all times remain the property
of the Company, shall be readily accessible during normal business hours, and shall be promptly surrendered to the Company upon
the termination of the Agreement or otherwise on written request by the Company. The Administrator further agrees that the records
which it maintains for the Company will be preserved in the manner and for the periods prescribed by the 1940 Act, unless any such
records are earlier surrendered as provided above. The Administrator shall have the right to retain copies of such records for
an indefinite period, subject to observance of its confidentiality obligations under this Agreement. The Administrator shall maintain
records of the locations where any books, accounts and records of the Company are maintained by third parties providing services
directly or indirectly to the Company.
The parties hereto agree that each shall treat confidentially
all information provided by each party to the other regarding its business and operations. All confidential information provided
by a party hereto, including all “nonpublic personal information,” as defined under the Gramm-Leach-Bliley Act of 1999
(Public law 106-102, 113 Stat. 1138), shall be used by the other party hereto solely for the purpose of rendering services pursuant
to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party, without
the prior consent of such providing party, except that such confidential information may be disclosed to an affiliate or agent
of the disclosing party to be used for the sole purpose of providing the services set forth herein. The foregoing shall not be
applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through
a breach of this Agreement, or that is required to be disclosed to any regulatory authority, by judicial or administrative process
or otherwise by applicable law or regulation.
| 4. | Allocation
of Costs and Expenses. |
The Company shall bear all costs and expenses for the administration
of its business and shall reimburse the Administrator for any such costs and expenses that have been paid by the Administrator
on behalf of the Company on the terms and conditions set forth in Section 5. These costs and expenses shall include, but not be
limited to:
(a) corporate and organizational expenses
relating to offerings of the Company’s common stock, subject to limitations included in the investment advisory agreement
entered into between the Company and CĪON Investment Management, LLC, dated June 19, 2012;
(b) the cost of calculating the Company’s
net asset value, including the related fees and cost of any third-party valuation services;
(c) the cost of effecting sales and repurchases
of shares of the Company’s common stock and other securities;
(d) fees payable to third parties relating
to, or associated with, making investments, and valuing investments, including fees and expenses associated with performing due
diligence reviews of prospective investments;
(e) interest payable on debt, if any, incurred
to finance the Company’s investments;
(f) federal and state registration fees;
(g) transfer agent and custodial fees;
(h) fees and expenses associated with marketing
efforts;
(i) federal, state and local taxes;
(j) independent directors’ fees and
expenses;
(k) costs of proxy statements, stockholders’
reports and notices;
(l) costs of fidelity bond, directors and
officers/errors and omissions liability insurance and other insurance premiums;
(m) direct costs, including those relating
to printing, mailing, long distance telephone and staff;
(n) fees and expenses associated with independent
audits and outside legal costs, including compliance with the Sarbanes-Oxley Act of 2002, the 1940 Act and applicable federal and
state securities laws;
(o) brokerage commissions for the Company’s
investments;
(p) all other expenses incurred by the Company
or the Administrator in connection with administering the Company’s business, including expenses incurred by the Administrator
in performing its obligations; and
(q) the reimbursement of the compensation
of the Company’s chief financial officer and chief compliance officer, whose salaries are paid by the Administrator, to the
extent that each such reimbursement amount is subject to the limitations included in this Agreement.
The following provisions in this Section 4 shall
apply for only so long as the shares of the Company’s common stock are not listed on a national securities exchange.
The Administrator acknowledges that it shall be responsible
to ensure that (i) any reimbursement to the Company’s investment advisers and/or sub-advisers, or any other person for deferred
Organization and Offering Expenses (as defined in the Articles of Incorporation), including any interest thereon, if any, shall
not exceed the 18% limitation on Front End Fees (as defined in the Articles of Incorporation), regardless of the source of payment,
and (ii) the percentage of gross proceeds of any offering committed to investment shall be at least eighty-two percent (82%). All
items of compensation to underwriters or dealers, including, but not limited to, selling commissions, expenses, rights of first
refusal, consulting fees, finders’ fees and all other items of compensation of any kind or description paid by the Company,
directly or indirectly, shall be taken into consideration in computing the amount of allowable Front End Fees.
| 5. | No
Fee; Reimbursement of Expenses; Limitations on Reimbursement of Expenses. |
(a) Fees and Expenses. In full
consideration for the provisions of the services provided by the Administrator under this Agreement, the parties acknowledge that
there shall be no separate fee paid in connection with the services provided, notwithstanding that the Company shall reimburse
the Administrator, at the end of each fiscal quarter, for all expenses of the Company incurred by the Administrator as well as
the actual cost of goods and services used for the Company and obtained by the Administrator from entities not Affiliated with
the Company. The Administrator may be reimbursed for the administrative services necessary for the prudent operation of the Company
performed by it on behalf of the Company; provided, however, the reimbursement shall be an amount equal
to the lower of the Administrator’s actual cost or the amount the Company would be required to pay third parties for the
provision of comparable administrative services in the same geographic location; and provided, further, that such costs are reasonably
allocated to the Company on the basis of assets, revenues, time records or other method conforming with generally accepted accounting
principles. The Company may also agree to reimburse the Administrator, under this Agreement whereby the Administrator shall provide
certain administrative services for the Company, for the salaries, rent and travel expenses of executive officers of the Administrator
also serving in the capacity of chief financial officer or chief compliance officer of the Company provided such reimbursement
is approved annually by the Independent Directors. The Administrator shall prepare a statement documenting the expenses of the
Company and the calculation of the reimbursement and shall deliver such statement to the Company prior to full reimbursement.
The following provisions in this Section 5 shall
apply for only so long as the shares of the Company’s common stock are not listed on a national securities exchange.
(b) Previous Reimbursement Reports.
The Administrator shall prepare or shall cause to be prepared a report, prepared in accordance with the American Institute of Certified
Public Accountants United States Auditing Standards relating to special reports, and distributed to stockholders not less than
annually, containing an itemized list of the costs reimbursed to the Administrator pursuant to Section 5(a) for the previous fiscal
year. The special report shall at a minimum provide:
(i) a review of the time records of individual
employees, the costs of whose services were reimbursed; and
(ii) a review of the specific nature of
the work performed by each such employee.
(c) Proposed Reimbursement Reports.
The Administrator shall prepare or shall cause to be prepared a report containing an itemized estimate of all proposed expenses
for which it shall receive reimbursements pursuant to Section 5(a) of this Agreement for the next fiscal year, together with a
breakdown by year of such expenses reimbursed in each of the last five public programs formed by the Administrator, if any.
For purposes of this Agreement, “Affiliate” or “Affiliated”
or any derivation thereof means with respect to any individual, corporation, partnership, trust, joint venture, limited liability
company or other entity or association (“Person”): (a) any Person directly or indirectly owning, controlling, or holding,
with the power to vote, 10% or more of the outstanding voting securities of such other Person; (b) any Person 10% or more of whose
outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person;
(c) any Person directly or indirectly controlling, controlled by or under common control with such other Person; or (d) any executive
officer, director, trustee or general partner of such other Person.
| 7. | Limitation
of Liability of the Administrator; Indemnification. |
(a) Indemnification
of the Administrator. Subject to Section 8, the Administrator and its officers, directors, stockholders or members (and their
stockholders or members, including the owners of their stockholders or members), agents, employees, controlling persons (as determined
under the 1940 Act (“Controlling Persons”)) and any other person or entity Affiliated with, or acting on behalf of,
the Administrator (each an “Indemnified Party” and, collectively, the “Indemnified Parties”) shall not
be liable to the Company for any action taken or omitted to be taken by the Administrator in connection with the performance of
any of its duties or obligations under this Agreement or otherwise as an administrator of the Company, and the Company shall indemnify,
defend and protect the Indemnified Parties (each of whom shall be deemed a third party beneficiary hereof) and hold them harmless
from and against all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably
paid in settlement) (“Losses”) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed
action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security
holders) arising out of or otherwise based upon the performance of any of the Indemnified Parties’ duties or obligations
as administrator for the Company to the extent such Losses are not fully reimbursed by insurance and otherwise to the fullest extent
such indemnification would not be inconsistent with the Articles of Incorporation, the 1940 Act, the laws of the State of Maryland
or the provisions of Section II.G of the Omnibus Guidelines published by the North American Securities Administrators Association
on March 29, 1992, as it may be amended from time to time.
(b) Advancement
of Funds. The Company shall be permitted to advance funds to the Indemnified Parties for legal expenses and other costs incurred
as a result of any legal action for which indemnification is being sought only if all of the following conditions are met:
(i) the legal action relates to acts or
omissions with respect to the performance of duties or services on behalf of the Company;
(ii) the Indemnified Party provides the
Company with written affirmation of the Indemnified Party’s good faith belief that the Indemnified Party has met the standard
of conduct necessary for indemnification by the Company;
(iii) the legal action is initiated by a
third party who is not a Company stockholder, or the legal action is initiated by a Company stockholder and a court of competent
jurisdiction specifically approves such advancement; and
(iv) the Indemnified Party provides the
Company with a written agreement to repay the advanced funds to the Company, allocated as advanced, together with the applicable
legal rate of interest thereon, in cases in which the Indemnified Party is not found to be entitled to indemnification pursuant
to a final, non-appealable decision of a court of competent jurisdiction.
(c) Indemnification
of the Company. The Administrator shall indemnify the Company, and its Affiliates and Controlling Persons, for any Losses that
the Company or its Affiliates and Controlling Persons may sustain as a result of the Administrator’s willful misfeasance,
bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation,
the federal and state securities laws.
| 8. | Limitation
on Indemnification. |
Notwithstanding Section 7(a) to the contrary, the Company shall
not provide for indemnification of the Indemnified Parties for any liability or loss suffered by the Indemnified Parties, nor shall
the Company provide that any of the Indemnified Parties be held harmless for any loss or liability suffered by the Company, unless
all of the following conditions are met:
(i) the
Indemnified Party has determined, in good faith, that the course of conduct which caused the loss or liability was in the
best interests of the Company;
(ii) the
Indemnified Party was acting on behalf of or performing services for the Company;
(iii) such
liability or loss was not the result of willful misfeasance, bad faith or gross negligence by the Indemnified Party; and
(iv) such
indemnification or agreement to hold harmless is recoverable only out of the Company’s net assets and not from
stockholders.
Furthermore, the Indemnified Party shall not be indemnified
for any losses, liabilities or expenses arising from or out of an alleged violation of federal or state securities laws, unless
one or more of the following conditions are met:
(i) there
has been a successful adjudication on the merits of each count involving alleged material securities law violations;
(ii) such
claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or
(iii) a
court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that
indemnification of the settlement and related costs should be made, and the court of law considering the request for
indemnification has been advised of the position of the SEC and the published position of any state securities regulatory
authority in which securities of the Company were offered or sold as to indemnification for violations of securities
laws.
| 9. | Activities
of the Administrator. |
The services provided by the Administrator to the Company are
not exclusive, and the Administrator may engage in any other business or render similar or different services to others, including,
without limitation, the direct or indirect sponsorship or management of other investment based accounts or commingled pools of
capital, however structured, whether having investment objectives similar to or different from those of the Company, so long as
its services to the Company hereunder are not impaired thereby and nothing in this Agreement shall limit or restrict the right
of any officer, director, stockholder (and their stockholders or members, including the owners of their stockholders or members),
officer or employee of the Administrator to engage in any other business or to devote his or her time and attention in part to
any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including
fees for serving as a director of, or providing consulting services to, one or more of the Company’s portfolio companies,
subject to applicable law). The Administrator assumes no responsibility under this Agreement other than to render the services
set forth herein.
| 10. | Duration
and Termination of this Agreement. |
(a) Term and
Effectiveness. This Agreement shall become effective as of the date first written above. Once effective, this Agreement shall
continue automatically for successive one-year periods, provided that such continuance is specifically approved at least annually
by: (i) the vote of the Board, or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote
of a majority of the Company’s directors who are not parties to this Agreement or “interested persons” (as such
term is defined in Section 2(a)(19) of the 1940 Act, or any successor provision thereto) (the “Independent Directors”)
of any such party, in accordance with the requirements of the 1940 Act.
(b) Termination.
This Agreement may be terminated at any time, without the payment of any penalty: (i) by the Company upon sixty (60) days’
written notice to the Administrator: (A) upon the vote of a majority of the outstanding voting securities of the Company (as “majority”
is defined in Section 2(a)(42) of the 1940 Act) or (B) by the vote of the Independent Directors; or (ii) by the Administrator upon
not less than sixty (60) days’ written notice to the Company. This Agreement and the rights and duties of a party hereunder
may not be assigned, including by operation of law, by a party without the prior written consent of the other party and this Agreement
automatically shall terminate in such event. The provisions of Section 7 of this Agreement shall remain in full force and effect,
and the Administrator shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement.
After the termination of this Agreement, the Administrator shall
not be entitled to compensation for further services provided hereunder, except that it shall be entitled to receive from the Company
within thirty (30) days after the effective date of such termination all unpaid reimbursements due and payable to the Administrator
prior to termination of this Agreement.
Any notice under this Agreement shall be given in writing, addressed
and delivered or mailed, postage prepaid, to the other party at the address listed below or at such other address for a party as
shall be specified in a notice given in accordance with this Section 11.
CĪON Investment Corporation
Attention: Co-Chief Executive
Officer
3 Park Avenue, 36th Floor
New York, New York 10016
CION Investment Management, LLC
Attention: Co-Chief Executive
Officer
3 Park Avenue, 36th Floor
New York, New York 10016
| 12. | Amendments
of this Agreement. |
This Agreement may be amended by mutual written consent of the
parties, subject to the provisions of the 1940 Act. This Agreement automatically shall terminate upon the dissolution of the Company.
This Agreement may be executed in counterparts, each of which
shall be deemed to be an original copy and all of which together shall constitute one and the same instrument binding on all parties
hereto, notwithstanding that all parties shall not have signed the same counterpart.
This Agreement shall be construed in accordance with laws of
the State of Maryland and the applicable provisions of the 1940 Act, if any. To the extent that the applicable laws of the State
of Maryland or any of the provisions herein conflict with the applicable provisions of the 1940 Act, if any, the latter shall control.
This Agreement contains the entire agreement of the parties
and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof.
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blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the date first written above.
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CION INVESTMENT CORPORATION |
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By: |
/s/ Michael A. Reisner |
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Name: |
Michael
A. Reisner |
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Title: |
Co-Chief Executive Officer |
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CION
INVESTMENT MANAGEMENT, LLC |
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Board of Directors: |
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/s/ Michael A. Reisner |
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Michael A. Reisner |
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/s/ Mark Gatto |
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Mark Gatto |
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/s/ Howard Widra |
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Howard Widra |
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