Exhibit 10.1

 

SECOND AMENDED AND RESTATED EXPENSE SUPPORT AND CONDITIONAL REIMBURSEMENT
AGREEMENT

 

THIS SECOND AMENDED AND RESTATED EXPENSE SUPPORT AND CONDITIONAL REIMBURSEMENT
AGREEMENT (the “Agreement”) is made the 20th day of December, 2019, by and
between CION Investment Corporation, a Maryland corporation (the “Company”) and
CION Investment Management, LLC, a Delaware limited liability company (the
“Adviser”).

 

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, as amended (the “1940 Act”);

 

WHEREAS, the Adviser is the Company’s investment adviser and an affiliate of the
Company;

 

WHEREAS, in connection with the joint venture between Apollo Investment
Management, L.P., a Delaware limited partnership (“AIM”) and CION Investment
Group, LLC, a Delaware limited liability company (“CIG” and with AIM, the
“Members”) the Members entered into the Fourth Amended and Restated Limited
Liability Company Agreement of the Adviser, dated as of December 4, 2017;

 

WHEREAS, the Company and the Adviser previously entered into an Amended Expense
Support and Conditional Reimbursement Agreement, dated as of December 26, 2018;

 

WHEREAS, in connection with the ongoing relationship between the Members, the
Adviser has determined that it is appropriate and in the best interest of the
Company and the Adviser to continue to make available expense support to the
Company;

 

WHEREAS, the Company and the Adviser have determined that it is appropriate and
in the best interests of the Company to reduce the Company’s operating expenses
to ensure that it bears a reasonable level of expense in relation to its
investment income (the “Operating Expense Objective”);

 

WHEREAS, the Company and the Adviser have determined that it is appropriate and
in the best interests of the Company to endeavor to ensure that no portion of
distributions made to the Company’s shareholders will be paid from the Company’s
offering proceeds or borrowings (the “Distribution Objective”); and

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the parties hereby agree as follows:

 

1.Adviser Expense Payments to the Company.

 

1.1 Commencing with the quarter starting January 1, 2020 and on a quarterly
basis thereafter, the Adviser hereby agrees to reimburse to the Company all
operating expenses in an amount sufficient to meet the Operating Expense
Objective and/or the Distribution Objective. Any payments required to be made by
the Adviser pursuant to this paragraph shall be referred to herein as an
“Expense Payment.”

 

1.2 The Adviser’s obligation to make an Expense Payment shall automatically
become a liability of the Adviser and the right to such Expense Payment shall be
an asset of the Company no later than the last business day of the applicable
calendar quarter. The Expense Payment for any calendar quarter shall, as
promptly as possible, be: (i) paid by the Adviser to the Company in any
combination of cash or other immediately available funds, and/or (ii) offset
against amounts due from the Company to the Adviser.

 

 

 

 

1.3 For purposes of this Agreement, “Available Operating Funds” means the sum of
(i) the Company’s net investment company taxable income (including net
short-term capital gains reduced by net long-term capital losses), (ii) the
Company’s net capital gains (including the excess of net long-term capital gains
over net short-term capital losses), and (iii) dividends and other distributions
paid to or otherwise earned by the Company on account of investments in
portfolio companies (to the extent such amounts listed in clause (iii) are not
included under clauses (i) and (ii) above.)

 

1.4 For purposes of this Agreement, “Reimbursable Expenses” means all costs and
expenses paid or incurred by the Company, as determined under generally accepted
accounting principles, that are: (i) reimbursable pursuant to the Investment
Advisory Agreement dated as of June 19, 2012 between the Adviser and the Company
(the “Advisory Agreement”), (ii) reimbursable pursuant to the Administration
Agreement dated as of April 1, 2018 between the Company and the Adviser, or
(iii) paid or accrued by the Adviser on behalf of the Company and not otherwise
reimbursable pursuant to Section 1.4(i) or Section 1.4(ii) above.

 

2. Reimbursement of Expense Payments by the Company.

 

2.1 Following any calendar quarter in which Available Operating Funds exceed the
cumulative distributions declared to the Company’s shareholders in respect of
such calendar quarter and such excess is intended to be used to pay expenses
qualifying as a Reimbursable Expense (the amount of such excess being
hereinafter referred to as “Excess Operating Funds”), the Company shall pay such
Excess Operating Funds, or a portion thereof in accordance with Section 2.2, to
the Adviser or accrue such Excess Operating Funds as a liability until such time
as all Expense Payments made by the Adviser to the Company within three (3)
years prior to the last business day of such calendar quarter have been
reimbursed or waived. Any payments required to be made by the Company pursuant
to this Section 2.1 shall be referred to herein as a “Reimbursement Payment.”

 

2.2 The amount of the Reimbursement Payment for any calendar quarter shall equal
the lesser of (i) the Excess Operating Funds in such calendar quarter, or (ii)
the aggregate amount of all Expense Payments made by the Adviser to the Company
(or otherwise accrued by the Adviser with respect to the Company) within three
(3) years prior to the last business day of such calendar quarter that have not
been previously reimbursed by the Company to the Adviser.

 

2.3 The Company’s obligation to make a Reimbursement Payment shall automatically
become a liability of the Company and the proportionate right to such share of
the Reimbursement Payment shall be an asset of the Adviser no later than the
last business day of the applicable calendar quarter. The Reimbursement Payment
for any calendar quarter shall, as promptly as possible, be paid by the Company
to the Adviser in any combination of cash or other immediately available funds.
Any Reimbursement Payments shall be deemed to have reimbursed the Adviser for
Expense Payments in chronological order beginning with the oldest Expense
Payment eligible for reimbursement under this Section 2.

 

3. Effective Date; Termination; Survival.

 

3.1 Effective Date. This Agreement shall become effective as of the date first
set forth above.

 

 

 

 

3.2 Termination.

 

(i) Unless otherwise agreed by the parties, this Agreement shall terminate on
December 31, 2020.

 

(ii) This Agreement may be terminated at any time, without the payment of any
penalty, by the Company or the Adviser, upon written notice to the Company.

 

(iii) This Agreement shall automatically terminate in the event of (a) the
termination by the Company of the Advisory Agreement, or (b) the board of
directors of the Company makes a determination to dissolve or liquidate the
Company.

 

(iv) Notwithstanding anything contrary set forth in this Agreement, if this
Agreement terminates automatically pursuant to Section 3.2(iii) above, or,
following a termination of this Agreement pursuant to Section 3.2(ii), an event
described in Section 3.2(iii) occurs, the Company agrees to pay the Adviser an
amount equal to all Expense Payments paid to the Company within three (3) years
prior to the date of such termination pursuant to Section 3.2(iii) or the
occurrence of such event, as applicable, and that have not been previously
reimbursed by the Company to the Adviser. Such repayment shall be made no later
than thirty (30) days after such date of termination or the date of such event,
as applicable.

 

3.3 Survival. Sections 3 and 4 of this Agreement shall survive any termination
of this Agreement. Notwithstanding anything to the contrary, Section 2 of this
Agreement shall survive any termination of this Agreement with respect to any
Expense Payments that have not been reimbursed by the Company to the Adviser.

 

4. Miscellaneous.

 

4.1 Captions. The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.

 

4.2 Entire Agreement. This Agreement contains the entire agreement of the
parties and supersedes all prior agreements, understandings and arrangements
with respect to the subject matter hereof.

 

4.3 Interpretation. Notwithstanding the place where this Agreement may be
executed by any of the parties hereto, this Agreement shall be construed in
accordance with the laws of the State of Delaware. For so long as the Company is
regulated as a business development company under the 1940 Act, this Agreement
shall also be construed in accordance with the applicable provisions of the 1940
Act. In such case, to the extent the applicable laws of the State of Delaware,
or any provisions herein, conflict with the provisions of the 1940 Act, the
latter shall control. Further, nothing in this Agreement shall be deemed to
require the Company to take any action contrary to the Company’s Second Articles
of Amendment and Restatement of the Articles of Incorporation and/or the Amended
and Restated By-Laws, as each may amended or restated, or to relieve or deprive
the board of directors of the Company of its responsibility for and control of
the conduct of the affairs of the Company.

 

4.4 Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.

 

4.5 Amendments and Counterparts. This Agreement may be amended in writing by
mutual consent of the parties. This Agreement may be executed by the parties on
any number of counterparts, delivery of which may occur by facsimile or as an
attachment to an electronic communication, each of which shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

 

 

 

 

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.

 

  CION INVESTMENT CORPORATION       By: /s/ Michael A. Reisner            Name:
Michael A. Reisner       Title:  Co-Chief Executive Officer

 

 

  CION INVESTMENT MANAGEMENT, LLC       Board of Directors:       /s/ Michael A.
Reisner     Michael A. Reisner           /s/ Mark Gatto     Mark Gatto          
/s/ Howard Widra     Howard Widra           SERIES C MEMBER:       APOLLO
INVESTMENT MANAGEMENT, L.P.       By: ACC Management, LLC, its General Partner  
    By: /s/ Howard Widra         Name: Howard Widra       Title: Authorized
Signatory