Document:

EXECUTION
VERSION

 

INVESTMENT
ADVISORY AND MANAGEMENT AGREEMENT

BETWEEN

RAND CAPITAL CORPORATION

AND

RAND CAPITAL MANAGEMENT LLC

 

Agreement
made this 8th day of November, 2019 (the “Effective Date”), by and between RAND CAPITAL CORPORATION, a New York corporation
(the “Corporation”), and RAND CAPITAL MANAGEMENT LLC, a Delaware limited liability company (the “Adviser”).

 

WHEREAS,
the Corporation is a closed-end investment company that has elected to be treated as a business development company under the
Investment Company Act of 1940, as amended (the “Investment Company Act”);

 

WHEREAS,
the Adviser is an investment adviser that has registered under the Investment Advisers Act of 1940, as amended (the “Advisers
Act”); and

 

WHEREAS,
the Adviser will provide investment advisory services to the Corporation.

 

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

 

1.
Duties of the Adviser.

 

(a)
The Corporation hereby employs the Adviser to act as the investment adviser to the Corporation and to manage the investment and
reinvestment of the assets of the Corporation during the term of this Agreement, subject to the supervision of the Board of Directors
of the Corporation (the “Board”), for the period and upon the terms herein set forth,

 

(i)
in accordance with the investment objectives, policies and restrictions that are determined by the Corporation’s Board of
Directors from time to time and disclosed to the Adviser, including those as set forth in the reports and registration statements
that the Corporation files with the Securities and Exchange Commission (the “SEC”),

 

(ii)
in accordance with any requirements imposed by the provisions of the Investment Company Act and of any rules or regulations in
force thereunder, subject to the terms of any exemptive order applicable to the Corporation, and

 

(iii)
in accordance with all other applicable federal and state laws, rules and regulations, and the Corporation’s certificate
of incorporation and by-laws.

 

(b)
Without limiting the generality of the foregoing, the Adviser shall, during the term and subject to the provisions of this Agreement,

 

(i)
determine the composition of the portfolio of the Corporation, the nature and timing of the changes therein and the manner of
implementing such changes,

 

    	 	 	 

    	 

    

 

(ii)
identify, evaluate and negotiate the structure of the investments made by the Corporation,

 

(iii)
execute, close, service and monitor the Corporation’s investments,

 

(iv)
determine the securities and other assets that the Corporation will purchase, retain, or sell,

 

(v)
perform due diligence on prospective portfolio companies or investments, and

 

(vi)
provide the Corporation with such other investment advisory, research and related services as the Corporation may, from time to
time, reasonably require for the investment of its funds.

 

The
Adviser shall have the power and authority on behalf of the Corporation to effectuate its investment decisions for the Corporation,
including the execution and delivery of all documents relating to the Corporation’s investments and the placing of orders
for other purchase or sale transactions on behalf of the Corporation. In the event that the Corporation determines to incur debt
financing, the Adviser will arrange for such financing on the Corporation’s behalf, subject to the oversight and approval
of the Board. If it is necessary for the Adviser to make investments on behalf of the Corporation through a special purpose vehicle,
the Adviser shall have authority to create or arrange for the creation of such special purpose vehicle and to make such investments
through such special purpose vehicle in accordance with the Investment Company Act.

 

(c)
The Adviser hereby accepts such employment and agrees during the term hereof to render the services described herein for the compensation
provided herein.

 

(d)
Subject to the requirements of the Investment Company Act, the Adviser is hereby authorized to enter into one or more sub-advisory
agreements with other investment advisers (each, a “Sub-Adviser”) pursuant to which the Adviser may obtain the services
of the Sub-Adviser(s) to assist the Adviser in providing the investment advisory services required to be provided by the Adviser
under Sections 1(a) and 1(b) of this Agreement. Specifically, the Adviser may retain a Sub-Adviser to recommend specific securities
or other investments based upon the Corporation’s investment objectives and policies, and work, along with the Adviser,
in structuring, negotiating, arranging or effecting the acquisition or disposition of such investments and monitoring investments
on behalf of the Corporation, subject to the oversight of the Adviser and the Corporation. The Adviser, and not the Corporation,
shall be responsible for any compensation payable to any Sub-Adviser. Any sub-advisory agreement entered into by the Adviser shall
be in accordance with the requirements of the Investment Company Act and other applicable federal and state law. Nothing in this
subsection (d) will obligate the Adviser to pay any expenses that are the expenses of the Corporation under Section 2.

 

(e)
The Adviser, and any Sub-Adviser, shall for all purposes herein provided each be deemed to be an independent contractor and, except
as expressly provided or authorized herein, shall have no authority to act for or represent the Corporation in any way or otherwise
be deemed an agent of the Corporation.

 

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(f)
The Adviser shall keep and preserve for the period required by the Investment Company Act any books and records relevant to the
provision of its investment advisory services to the Corporation and shall specifically maintain all books and records with respect
to the Corporation’s portfolio transactions and shall render to the Board such periodic and special reports as the Board
may reasonably request. The Adviser agrees that all records that it maintains for the Corporation are the property of the Corporation
and will surrender promptly to the Corporation any such records upon the Corporation’s request, provided that the Adviser
may retain a copy of such records.

 

(g)
The Adviser shall provide to the Board such periodic and special reports as it may request.

 

2.
Corporation’s Responsibilities and Expenses Payable by the Corporation. All investment professionals of the Adviser
and its staff, when and to the extent engaged in providing investment advisory services required to be provided by the Adviser
under Sections 1(a) and 1(b), and the compensation of such personnel and the general office and facilities and overhead expenses
incurred by the Adviser in maintaining its place of business allocable to such services, will be provided and paid for by the
Adviser and not by the Corporation. The Corporation will bear all other costs and expenses of its operations and transactions,
including those relating to:

 

(a)
organization;

 

(b)
calculating the Corporation’s net asset value (including the cost and expenses of any independent valuation firm);

 

(c)
expenses incurred by the Adviser payable to third parties, including agents, consultants or other advisors, in monitoring financial
and legal affairs for the Corporation and in monitoring the Corporation’s investments and performing due diligence on its
prospective portfolio companies;

 

(d)
interest payable on debt, if any, incurred to finance the Corporation’s investments;

 

(e)
offerings of the Corporation’s common stock and other securities;

 

(f)
investment advisory and management fees payable under this Agreement, which fees shall not include fees (if any) payable to a
Sub-Adviser retained by the Adviser pursuant to Section 1(d);

 

(g)
administration fees, if any, payable under the Administration Agreement (the “Administration Agreement”) between the
Corporation and the Adviser or any successor thereto as the Corporation’s administrator;

 

(h)
transfer agent and custodial fees;

 

(i)
federal and state registration fees;

 

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(j)
all costs of registration and listing the Corporation’s shares on any securities exchange;

 

(k)
federal, state and local taxes;

 

(l)
independent directors’ fees and expenses;

 

(m)
costs of preparing and filing reports or other documents required by governmental bodies (including the SEC);

 

(n)
costs of any reports, proxy statements or other notices to stockholders, including printing costs;

 

(o)
the Corporation’s allocable portion of the fidelity bond, directors and officers/errors and omissions liability insurance,
and any other insurance premiums;

 

(p)
direct costs and expenses of administration, including independent auditors and outside legal costs; and

 

(q)
all other expenses incurred by the Corporation or the Advisor in connection with administering the Corporation’s business
(including payments under the Administration Agreement based upon the Corporation’s allocable portion of the Advisor’s
overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost
of the Corporation’s chief financial officer and chief compliance officer and their respective staffs (including travel
expenses)).

 

3.
Compensation of the Adviser. The Corporation agrees to pay, and the Adviser agrees to accept, as compensation for the services
provided by the Adviser hereunder, a base management fee (“Base Management Fee”) and an incentive fee (“Incentive
Fee”) as hereinafter set forth. The Corporation shall make any payments due hereunder to the Adviser or to the Adviser’s
designee as the Adviser may otherwise direct. To the extent permitted by applicable law, the Adviser may elect, or the Corporation
may adopt a deferred compensation plan pursuant to which the Adviser may elect, to defer all or a portion of its fees hereunder
for a specified period of time.

 

(a)
The Base Management Fee shall be 1.50% per annum of the Corporation’s total assets (other than cash or cash equivalents
but including assets purchased with borrowed funds), determined according to procedures duly adopted by the Board. For services
rendered during the period commencing from the Effective Date, through and including the end of the first calendar quarter of
the Corporation’s operations after the Effective Date, the Base Management Fee will be payable monthly in arrears. Until
the first calendar quarter of the Corporation’s operations after the Effective Date, the Base Management Fee will be calculated
based on the initial value of the Corporation’s total assets (other than cash or cash equivalents but including assets purchased
with borrowed funds) after giving effect to the contribution of the loan portfolio as contemplated by the Stock Purchase Agreement,
dated as of January 24, 2019 by and among the Corporation, East Asset Management, LLC and, solely for purposes of being bound
by Sections 7.10 and 10.9(a) and (b) thereof, the Adviser. Subsequently, the Base Management Fee will be calculated based on the
average value of the Corporation’s total assets (other than cash or cash equivalents but including assets purchased with
borrowed funds) at the end of the two most recently completed calendar quarters. Base Management Fees for any partial month or
quarter will be appropriately pro-rated.

 

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(b)
The Incentive Fee shall consist of two parts, as follows:

 

(i)
One part (the “Income Based Fee”) will be calculated and payable quarterly in arrears based on the Pre-Incentive Fee
net investment income for the immediately preceding calendar quarter and shall be payable promptly following the filing of the
Corporation’s financial statements for such quarter. “Pre-Incentive Fee net investment income” means interest
income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance),
such as commitment, origination, structuring, diligence and consulting fees or other fees that the Corporation receives from portfolio
companies) accrued by the Corporation during the relevant calendar quarter, minus the Corporation’s operating expenses for
such calendar quarter (including the Base Management Fee, expenses payable under the Administration Agreement, and any interest
expense and dividends paid on any issued and outstanding preferred stock, but excluding any portion of Incentive Fee).

 

Pre-Incentive
Fee net investment income includes any accretion of original issue discount, market discount, payment-in-kind interest, payment-in-kind
dividends or other types of deferred or accrued income, including in connection with zero coupon securities, that the Corporation
and its consolidated subsidiaries have recognized in accordance with U.S. Generally Accepted Accounting Principles, but have not
yet received in cash (collectively, “Accrued Unpaid Income”). Pre-Incentive Fee net investment income does not include
any realized capital gains, realized and unrealized capital losses or unrealized capital appreciation or depreciation.

 

Pre-Incentive
Fee net investment income, expressed as a rate of return on the value of the Corporation’s net assets (defined as total
assets less indebtedness) at the end of the immediately preceding calendar quarter, will be compared to a “hurdle rate”,
expressed as a rate of return on the value of the Corporation’s net assets at the end of the most recently completed calendar
quarter, of 1.75% per quarter (7% annualized). The Corporation will pay the Adviser an Incentive Fee with respect to the Corporation’s
Pre-Incentive Fee net investment income in each calendar quarter as follows:

 

(A)
no Income Based Fee in any calendar quarter in which the Corporation’s Pre-Incentive Fee net investment income does not
exceed the hurdle rate;

 

(B)
100.0% of the Corporation’s Pre-Incentive Fee net investment income for any calendar quarter with respect to that portion
of such Pre-Incentive Fee net investment income for such calendar quarter, if any, that exceeds the hurdle rate but is less than
2.1875% (8.75% annualized); and

 

(C)
20.0% of the amount of the Corporation’s Pre-Incentive Fee net investment income for any calendar quarter with respect to
that portion of such Pre-Incentive Fee Net Investment Income for such calendar quarter, if any, that exceeds 2.1875% (8.75% annualized).

 

These
calculations will be appropriately pro-rated for any period of less than three months.

 

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Notwithstanding
the foregoing, the Income Based Fee paid to the Adviser for any calendar quarter that begins more than two years and three months
after the Effective Date shall not be in excess of the Incentive Fee Cap. The Incentive Fee Cap for any calendar quarter is an
amount equal to (1) 20.0% of the Cumulative Net Return (as defined below) during the Income Based Fee Calculation Period (as defined
below) minus (2) if applicable, the aggregate Income Based Fee that was paid in respect of the calendar quarters prior to such
quarter included in the relevant Income Based Fee Calculation Period.

 

“Income
Based Fee Calculation Period” means, with reference to a calendar quarter, the period of time consisting of such calendar
quarter and the additional quarters that comprise the lesser of (1) the number of quarters immediately preceding such calendar
quarter that began more than two years after the Effective Date or (2) the eleven calendar quarters immediately preceding such
calendar quarter.

 

“Cumulative
Net Return” means (1) the aggregate net investment income in respect of the relevant Income Based Fee Calculation Period
minus (2) any Net Capital Loss, if any, in respect of the relevant Income Based Fee Calculation Period. If, in any quarter, the
Incentive Fee Cap is zero or a negative value, the Corporation pays no Income Based Fee to the Adviser for such quarter. If, in
any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the Income Based Fee that is payable
to the Adviser for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Corporation
pays an Income Based Fee to the Adviser equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee
Cap for such quarter is equal to or greater than the Income Based Fee that is payable to the Adviser for such quarter (before
giving effect to the Incentive Fee Cap) calculated as described above, the Corporation pays an Income Based Fee to the Adviser
equal to the Income Based Fee calculated as described above for such quarter without regard to the Incentive Fee Cap.

 

“Net
Capital Loss” in respect of a particular period means the difference, if positive, between (1) aggregate capital losses,
whether realized or unrealized, in such period and (2) aggregate capital gains, whether realized or unrealized, in such period.

 

Any
Income Based Fee otherwise payable under this Section 3(b)(i) with respect to Accrued Unpaid Income (collectively, the “Accrued
Unpaid Income Based Fees”) shall be deferred, on a security by security basis, and shall become payable only if, as, when
and to the extent cash is received by the Corporation or its consolidated subsidiaries in respect thereof. Any Accrued Unpaid
Income that is subsequently reversed in connection with a write-down, write-off, impairment or similar treatment of the investment
giving rise to such Accrued Unpaid Income will, in the applicable period of reversal, (1) reduce Pre-Incentive Fee net investment
income and (2) reduce the amount of Accrued Unpaid Income Incentive Fees deferred under this paragraph. Subsequent payments of
Accrued Unpaid Income Incentive Fees deferred pursuant to this paragraph shall not reduce the amounts otherwise payable for any
quarter pursuant to this Section 3(b)(i).

 

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(ii)
The second part of the Incentive Fee (the “Capital Gains Fee”) will be determined and payable in arrears as of the
end of each calendar year (or upon termination of this Agreement as set forth below), commencing with the calendar year ending
on December 31, 2019, and is calculated at the end of each applicable year by subtracting (1) the sum of the Corporation’s
cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) the Corporation’s cumulative
aggregate realized capital gains, in each case calculated from the Effective Date. If such amount is positive at the end of such
year, then the Capital Gains Fee for such year is equal to 20.0% of such amount, less the cumulative aggregate amount of Capital
Gains Fees paid in all prior years. If such amount is negative, then there is no Capital Gains Fee payable for such year. If this
Agreement is terminated as of a date that is not a calendar year end, the termination date shall be treated as though it were
a calendar year end for purposes of calculating and paying a Capital Gains Fee.

 

For
purposes of this Section 3(b)(ii):

 

The
cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the
net sales price of each investment in the Corporation’s portfolio when sold and (b) the accreted or amortized cost basis
of such investment.

 

The
cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price
of each investment in the Corporation’s portfolio when sold is less than (b) the accreted or amortized cost basis of such
investment.

 

The
aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation
of each investment in the Corporation’s portfolio as of the applicable Capital Gains Fee calculation date and (b) the accreted
or amortized cost basis of such investment.

 

The
accreted or amortized cost basis of an investment shall mean, with respect to an investment owned by the Corporation as of the
Effective Date, the fair value of such investment as set forth in the Corporation’s most recently filed Quarterly Report
on Form 10-Q or Annual Report on Form 10-K, as applicable, as filed with the SEC and, with respect to an investment acquired by
the Corporation subsequent to the Effective Date, the accreted or amortized cost basis of such investment as reflected in the
Corporation’s financial statements.

 

4.
Covenants of the Adviser. The Adviser covenants that it will remain registered as an investment adviser under the Advisers
Act. The Adviser agrees that its activities will at all times be in compliance in all material respects with all applicable federal
and state laws governing its operations and investments.

 

5.
Excess Brokerage Commissions. The Adviser is hereby authorized, to the fullest extent now or hereafter permitted by law,
to cause the Corporation to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged
for effecting that transaction, if the Adviser determines in good faith, taking into account such factors as price (including
the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the
firm and the firm’s risk and skill in positioning blocks of securities, that such amount of commission is reasonable in
relation to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of
either that particular transaction or its overall responsibilities with respect to the Corporation’s portfolio, and constitutes
the best net results for the Corporation.

 

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6.
Limitations on the Employment of the Adviser. The services of the Adviser to the Corporation are not exclusive, and the
Adviser 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,
having investment objectives similar to those of the Corporation, so long as its services to the Corporation hereunder are not
materially impaired thereby, and nothing in this Agreement shall limit or restrict the right of any member, manager, partner,
officer or employee of the Adviser 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 Corporation’s portfolio companies,
subject to applicable law). So long as this Agreement or any extension, renewal or amendment remains in effect, the Adviser shall
be the only investment adviser for the Corporation, subject to the Adviser’s right to enter into sub-advisory agreements.
The Adviser assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood
that directors, officers, employees and stockholders of the Corporation are or may become interested in the Adviser and its affiliates,
as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that the Adviser and directors,
officers, employees, partners, stockholders, members and managers of the Adviser and its affiliates are or may become similarly
interested in the Corporation as stockholders or otherwise.

 

7.
Responsibility of Dual Directors, Officers and/or Employees. If any person who is a member, manager, partner, officer or
employee of the Adviser is or becomes a director, officer and/or employee of the Corporation and acts as such in any business
of the Corporation, then such member, manager, partner, officer and/or employee of the Adviser shall be deemed to be acting in
such capacity solely for the Corporation, and not as a member, manager, partner, officer or employee of the Adviser under the
control or direction of the Adviser, even if paid by the Adviser.

 

8.
Limitation of Liability of the Adviser; Indemnification. The Adviser, its members and their respective officers, managers,
partners, agents, employees, controlling persons, members and any other person affiliated with any of them (collectively, the
“Indemnified Parties”), shall not be liable to the Corporation for any action taken or omitted to be taken by the
Adviser in connection with the performance of any of its duties or obligations under this Agreement or otherwise as an investment
adviser of the Corporation, except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting
from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt of compensation
for services. The Corporation 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 damages, liabilities, costs and expenses (including reasonable
attorneys’ fees and amounts reasonably paid in settlement) 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
Corporation or its security holders) arising out of or otherwise based upon the performance of any of the Adviser’s duties
or obligations under this Agreement or as an investment adviser of the Corporation. Notwithstanding the foregoing provisions of
this Section 8 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against
or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Corporation
or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of any Indemnified Party’s duties or by reason of the reckless disregard of the Adviser’s
duties and obligations under this Agreement (as the same shall be determined in accordance with the Investment Company Act and
any interpretations or guidance by the SEC or its staff thereunder).

 

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9.
Confidentiality. 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 or available to the recipient when provided or thereafter becomes publicly available or available to the recipient other
than through a breach of this Agreement, or that is requested by or required to be disclosed to any governmental or regulatory
authority, including in connection with any required regulatory filings or examinations, by judicial or administrative process
or otherwise by applicable law or regulation. Notwithstanding the foregoing, the Corporation hereby consents and authorizes the
Adviser and its affiliates to use and disclose confidential information relating to the Corporation in connection with the preparation
of performance information relating to the Corporation.

 

10.
Effectiveness, Duration and Termination of Agreement. This Agreement shall become effective as of the first date above
written. This Agreement shall remain in effect for two years after such date, and thereafter shall continue automatically for
successive annual periods, provided that such continuance is specifically approved at least annually by

 

(a)
the vote of the Board, or by the vote of stockholders holding a majority of the outstanding voting securities of the Corporation,
and

 

(b)
the vote of a majority of the Corporation’s Directors who are not parties to this Agreement or “interested persons”
(as such term is defined in Section 2(a)(19) of the Investment Company Act) of any party to this Agreement, in accordance with
the requirements of the Investment Company Act.

 

This
Agreement may be terminated at any time, without the payment of any penalty, upon 60 days’ written notice, by the vote of
stockholders holding a majority of the outstanding voting securities of the Corporation, or by the vote of the Corporation’s
Directors or by the Adviser.

 

This
Agreement will automatically terminate in the event of its “assignment” (as such term is defined for purposes of Section
15(a)(4) of the Investment Company Act). The provisions of Section 8 of this Agreement shall remain in full force and effect,
and the Adviser shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement. Further, notwithstanding
the termination or expiration of this Agreement as aforesaid, (i) the Adviser shall be entitled to any amounts owed under Section
3 through the date of termination or expiration, and (ii) the obligations set forth in Sections 8 and 9 shall survive the termination
of this Agreement.

 

    	 	9	 

    	 

    

 

11.
Amendments of this Agreement. This Agreement may not be amended or modified except by an instrument in writing signed by
all parties hereto, but the consent of the Corporation must be obtained in conformity with the requirements of the Investment
Company Act.

 

12.
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York,
including without limitation Sections 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil Practice Law
and Rules, Rule 327(b), and the applicable provisions of the Investment Company Act, if any. To the extent that the applicable
laws of the State of New York, or any of the provisions herein, conflict with the applicable provisions of the Investment Company
Act, if any, the latter shall control. The parties unconditionally and irrevocably consent to the exclusive jurisdiction of the
courts located in the State of New York and waive any objection with respect thereto, for the purpose of any action, suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.

 

13.
No Waiver. The failure of either party to enforce at any time for any period the provisions of or any rights deriving from
this Agreement shall not be construed to be a waiver of such provisions or rights or the right of such party thereafter to enforce
such provisions, and no waiver shall be binding unless executed in writing by all parties hereto.

 

14.
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any
law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long
as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to
any party.

 

15.
Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.

 

16.
Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to
be an original instrument and all of which taken together shall constitute one and the same agreement.

 

17.
Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given
or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service
(with signature required), by facsimile, or by registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at their respective principal executive office addresses.

 

18.
Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof
and supersedes all prior agreements and undertakings, both written and oral, between the parties with respect to such subject
matter.

 

19.
Certain Matters of Construction.

 

(a)
The words “hereof”, “herein”, “hereunder” and words of similar import shall refer to this
Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section of
this Agreement shall include all subsections thereof.

 

(b)
Definitions shall be equally applicable to both the singular and plural forms of the terms defined, and references to the masculine,
feminine or neuter gender shall include each other gender.

 

(c)
The word “including” shall mean including without limitation.

 

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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date above written.

 

	 	RAND
    CAPITAL CORPORATION
	 	 	 
	 	By:	/s/
    Allen F. Grum
	 	Name:	Allen
    F. Grum
	 	Title:	President
    and Chief Executive Officer
	 	 	 
	 	RAND
    CAPITAL MANAGEMENT LLC
	 	 	 
	 	By:	CB
    Advisor LLC, its Managing Member
	 	 	 
	 	By:	/s/
    Brian Collins
	 	Name:	Brian
    Collins
	 	Title:	Sole
    Member

 

[Signature
Page to Investment Management Agreement]

 

    	 	11EXECUTION VERSION

 

ADMINISTRATION
AGREEMENT

 

AGREEMENT
(this “Agreement”) made as of November 8, 2019 (the “Effective Date”) by and between Rand
Capital Corporation, a New York corporation (hereinafter referred to as the “Corporation”), and Rand Capital
Management LLC, a Delaware limited liability company (hereinafter referred to as the “Administrator”).

 

WITNESSETH:

 

WHEREAS,
the Corporation is a closed-end investment company that has elected to be treated as a business development company under the
Investment Company Act of 1940, as amended (hereinafter referred to as the “Investment Company Act”);

 

WHEREAS,
the Corporation desires to retain the Administrator to provide administrative services to the Corporation in the manner and on
the terms hereinafter set forth; and

 

WHEREAS,
the Administrator is willing to provide administrative services to the Corporation on the terms and conditions hereafter 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 is hereby acknowledged, the Corporation and the Administrator hereby agree as follows:

 

1.
Duties of the Administrator.

 

(a)
Employment of Administrator. The Corporation hereby employs the Administrator to act as administrator of the Corporation,
and to furnish, or arrange for others to furnish, the administrative services, personnel and facilities described below, subject
to review by and the overall control of the Board of Directors of the Corporation, for the period and on the terms and conditions
set forth in this Agreement. The Administrator hereby accepts such employment 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
as provided for below. The Administrator and any such other persons providing services arranged for by the Administrator shall
for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized herein,
have no authority to act for or represent the Corporation in any way or otherwise be deemed agents of the Corporation.

 

    	 	 	 

    	 

    

 

(b)
Services. The Administrator shall perform (or oversee, or arrange for, the performance of) the administrative services
necessary for the operation of the Corporation. Without limiting the generality of the foregoing, the Administrator shall provide
the Corporation with office facilities, equipment, clerical, bookkeeping, finance, accounting, compliance and record keeping services
at such office facilities and such other services as the Administrator, subject to review by the Board of Directors of the Corporation,
shall from time to time determine to be necessary or useful to perform its obligations under this Agreement. The Administrator
shall also, on behalf of the Corporation, arrange for the services of, and oversee, custodians, depositories, transfer agents,
dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. The Administrator
shall make reports to the Corporation’s Board of Directors of its performance of its obligations hereunder and furnish advice
and recommendations with respect to such other aspects of the business and affairs of the Corporation as it shall determine to
be desirable; provided that nothing herein shall be construed to require the Administrator to, and the Administrator shall
not, in its capacity as Administrator, provide any advice or recommendation relating to the securities and other assets that the
Corporation should purchase, retain or sell or any other investment advisory services to the Corporation. The Administrator shall
be responsible for the financial and other records that the Corporation is required to maintain and shall prepare all reports
and other materials required to be filed with the Securities and Exchange Commission (the “SEC”) or any other
regulatory authority, including reports to stockholders. The Administrator will provide on the Corporation’s behalf significant
managerial assistance to those portfolio companies to which the Corporation is required to provide such assistance. In addition,
the Administrator will assist the Corporation in determining and publishing the Corporation’s net asset value, overseeing
the preparation and filing of the Corporation’s tax returns, and the printing and dissemination of reports to stockholders
of the Corporation, and generally overseeing the payment of the Corporation’s expenses and the performance of administrative
and professional services rendered to the Corporation by others.

 

2.
Records. The Administrator agrees to maintain and keep all books, accounts and other records of the Corporation that relate
to activities performed by the Administrator hereunder and, if required by the Investment Company Act, will maintain and keep
such books, accounts and records in accordance with that act. In compliance with the requirements of Rule 31a-3 under the Investment
Company Act, the Administrator agrees that all records that it maintains for the Corporation shall at all times remain the property
of the Corporation, shall be readily accessible during normal business hours, and shall be promptly surrendered upon the termination
of this Agreement or otherwise on written request. The Administrator further agrees that all records which it maintains for the
Corporation pursuant to Rule 31a-1 under the Investment Company Act will be preserved for the periods prescribed by Rule 31a-2
under the Investment Company Act unless any such records are earlier surrendered as provided above. Records shall be surrendered
in usable machine-readable form. The Administrator shall have the right to retain copies of such records subject to observance
of its confidentiality obligations under this Agreement.

 

3.
Confidentiality. 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 nonpublic
personal information pursuant to Regulation S-P of the SEC, shall be used by any 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. 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 by any regulatory authority, any authority or legal counsel of the parties hereto, or by judicial
or administrative process or otherwise by applicable law or regulation.

 

    	 	2	 

    	 

    

 

4.
Compensation; Allocation of Costs and Expenses.

 

(a)
In full consideration of the provision of the services of the Administrator, the Corporation shall reimburse the Administrator
for the costs and expenses incurred by the Administrator in performing its obligations and providing personnel and facilities
hereunder.

 

(b)
The Corporation will bear all costs and expenses that are incurred in its operation and transactions and not specifically assumed
by the Administrator, in its capacity as the Corporation’s investment adviser, pursuant to the Investment Advisory and Management
Agreement, dated as of November 8, 2019, between the Corporation and the Administrator (the “Advisory Agreement”).
Costs and expenses to be borne by the Corporation include, but are not limited to, those relating to: organization; calculating
the Corporation’s net asset value (including the cost and expenses of any independent valuation firm); expenses incurred
by the Administrator payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal
affairs for the Corporation and in monitoring the Corporation’s investments and performing due diligence on its prospective
portfolio companies; interest payable on debt, if any, incurred to finance the Corporation’s investments; offerings of the
Corporation’s common stock and other securities; investment advisory and management fees (other than fees (if any) payable
to a sub-advisor retained by the Administrator under the Advisory Agreement); administration fees, if any, payable under this
Agreement; transfer agent and custodial fees; federal and state registration fees; all costs of registration and listing the Corporation’s
shares on any securities exchange; federal, state, local and other taxes; independent directors’ fees and expenses; costs
of preparing and filing reports or other documents required by governmental bodies (including the SEC); costs of any reports,
proxy statements or other notices to stockholders, including printing costs; the Corporation’s allocable portion of the
fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; direct costs
and expenses of administration, including independent auditors and outside legal costs; and all other expenses incurred by the
Corporation or the Administrator in connection with administering the Corporation’s business, including payments under this
Agreement based upon the Corporation’s allocable portion of the Administrator’s overhead in performing its obligations
under this Agreement, including rent (if office space is provided by the Administrator) and the allocable portion of the cost
of the Corporation’s chief financial officer and chief compliance officer and their respective staffs (including travel
expenses).

 

5. Limitation
of Liability of the Administrator; Indemnification. The Administrator, its members and their respective officers,
managers, partners, agents, employees, controlling persons, members, and any other person or entity affiliated with any of
them (collectively, the “Indemnified Parties”), shall not be liable to the Corporation 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 administrator for the Corporation, and the Corporation 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 damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably
paid in settlement) 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 Corporation or its security holders)
arising out of or otherwise based upon the performance of any of the Administrator’s duties or obligations under this
Agreement or otherwise as administrator for the Corporation. Notwithstanding the preceding sentence of this Paragraph 5 to
the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be
deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Corporation or its security
holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or negligence
in the performance of any Indemnified Party’s duties or by reason of the reckless disregard of the
Administrator’s duties and obligations under this Agreement (to the extent applicable, as the same shall be determined
in accordance with the Investment Company Act and any interpretations or guidance by the SEC or its
staff thereunder).

 

    	 	3	 

    	 

    

 

6.
Activities of the Administrator. The services of the Administrator to the Corporation are not exclusive, and the Administrator
and each other person providing services as arranged by the Administrator is free to render services to others. It is understood
that directors, officers, employees and stockholders of the Corporation are or may become interested in the Administrator and
its affiliates, as directors, officers, members, managers, employees, partners, stockholders or otherwise, and that the Administrator
and directors, officers, members, managers, employees, partners and stockholders of the Administrator and its affiliates are or
may become similarly interested in the Corporation as stockholders or otherwise.

 

7.
Duration and Termination of this Agreement.

 

(a)
This Agreement shall become effective as of the Effective Date, and shall remain in force with respect to the Corporation for
two years from the Effective Date and thereafter continue from year to year, but only so long as such continuance is specifically
approved at least annually by (i) the Board of Directors of the Corporation and (ii) a majority of those members of the Corporation’s
Board of Directors who are not parties to this Agreement or “interested persons” (as defined in the Investment Company
Act) of any such party.

 

(b)
This Agreement may be terminated at any time, without the payment of any penalty, by vote of the Corporation’s Board of
Directors, or by the Administrator, upon 60 days’ advance written notice to the other party. This Agreement may not be assigned
by a party without the consent of the other party.

 

8.
Amendments of this Agreement. This Agreement may not be amended or modified except by an instrument in writing signed by
all parties hereto.

 

9.
Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Neither party may assign, delegate or otherwise transfer this Agreement or any of its rights or obligations
hereunder without the prior written consent of the other party. No assignment by either party permitted hereunder shall relieve
the applicable party of its obligations under this Agreement. Any assignment by either party in accordance with the terms of this
Agreement shall be pursuant to a written assignment agreement in which the assignee expressly assumes the assigning party’s
rights and obligations hereunder.

 

    	 	4	 

    	 

    

 

10.
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York,
including without limitation Sections 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil Practice Law
and Rules, Rule 327(b), and the applicable provisions of the Investment Company Act, if any. To the extent that the applicable
laws of the State of New York, or any of the provisions herein, conflict with the applicable provisions of the Investment Company
Act, if any, the latter shall control. The parties unconditionally and irrevocably consent to the exclusive jurisdiction of the
courts located in the State of New York and waive any objection with respect thereto, for the purpose of any action, suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.

 

11.
No Waiver. The failure of either party to enforce at any time for any period the
provisions of or any rights deriving from this Agreement shall not be construed to be a waiver of such provisions or rights or
the right of such party thereafter to enforce such provisions or rights, and no waiver shall be binding unless executed in writing
by all parties hereto.

 

12.
Severability. If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated
as originally contemplated to the greatest extent possible.

 

13.
Headings. The descriptive headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

14.
Counterparts. This Agreement may be executed in one or more counterparts (including
by facsimile or pdf transmission), each of which when executed shall be deemed to be an original instrument and all of which taken
together shall constitute one and the same agreement.

 

15.
Notices. All notices, requests, claims, demands and other communications hereunder
shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by overnight courier service (with signature required), by facsimile, or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at their respective principal executive office addresses.

 

16.
Entire Agreement. This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and undertakings, both written
and oral, between the parties with respect to such subject matter.

 

    	 	5	 

    	 

    

 

17.
Certain Matters of Construction.

 

(a)
The words “hereof”, “herein”, “hereunder” and words of similar import shall refer to this
Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section of
this Agreement shall include all subsections thereof.

 

(b)
Definitions shall be equally applicable to both the singular and plural forms of the terms defined, and references to the masculine,
feminine or neuter gender shall include each other gender.

 

(c)
The word “including” shall mean including without limitation.

 

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IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.

 

	 	CORPORATION:
	 	 	 
	 	RAND
    CAPITAL CORPORATION
	 	 	 
	 	By:	/s/
    Allen F. Grum 
	 	Name:	Allen F. Grum
	 	Title:	President
    and Chief Executive Officer

 

	 	ADMINISTRATOR:
	 	 	 
	 	Rand
    Capital Management LLC
	 	 	 
	 	By:	CB Advisor LLC, its Managing Member
	 	 	 
	 	By:	/s/
    Brian Collins         
	 	Name:	Brian Collins
	 	Title:	Sole Member

 

[Signature Page
to Administration Agreement]

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