ADMINISTRATION AGREEMENT
Exhibit
k.1
This
Agreement (“Agreement”)
is made as of July 14, 2010 by and between FULL CIRCLE CAPITAL CORPORATION. a
Maryland corporation (the “Company”),
and FULL CIRCLE SERVICE COMPANY, LLC, a Delaware limited liability company (the
“Administrator”).
W
I T N E S S E T H:
WHEREAS,
the Company is a closed-end management investment fund that intends to elect to
be treated as a business development company (“BDC”)
under the Investment Company Act of 1940 (the “Investment
Company Act”);
WHEREAS,
the Company desires to retain the Administrator to provide administrative
services to the Company in the manner and on the terms hereinafter set forth;
and
WHEREAS,
the Administrator is willing to provide administrative services to the
Company 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 Company and the Administrator
hereby agree as follows:
|
1.
|
Duties of the
Administrator
|
(a) Employment of
Administrator. The Company hereby employs the Administrator to
act as administrator of the Company, 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
Company (the “Board”),
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
provided for below. The Administrator and such others 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 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 provide the
Company with office facilities, equipment, clerical, bookkeeping and
record keeping services at such facilities and such other services as the
Administrator, subject to review by the Board, 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 Company, conduct relations with
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 Board of its performance of obligations
hereunder and furnish advice and recommendations with respect to such other
aspects of the business and affairs of the Company as it shall determine to be
desirable; provided that nothing herein shall be construed to require the
Administrator to, and the Administrator shall not, provide any advice or
recommendation relating to the securities and other assets that the Company
should purchase, retain or sell or any other investment advisory services to the
Company. The Administrator shall be responsible for the financial and
other records that the Company is required to maintain and shall prepare, print
and disseminate reports to stockholders, and reports and other materials filed
with the Securities and Exchange Commission (the “SEC”). The
Administrator will provide on the Company’s behalf significant managerial
assistance to those portfolio companies to which the Company is required to
provide such assistance. In addition, the Administrator will assist the Company
in determining and publishing the Company’s net asset value, overseeing the
preparation and filing of the Company’s tax returns, and generally overseeing
the payment of the Company’s expenses and the performance of administrative and
professional services rendered to the Company by others.
|
2.
|
Records
|
The
Administrator agrees to maintain and keep all books, accounts and other records
of the Company that relate to activities performed by the Administrator
hereunder and will maintain and keep such books, accounts and records in
accordance with the Investment Company Act. In compliance with the
requirements of Rule 31a-3 under the Investment Company Act, the Administrator
agrees that all records which it maintains 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 upon the termination of the
Agreement or otherwise on written request. The Administrator further agrees that
all records which it maintains for the Company 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 the terms and
conditions of this Agreement and 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 (regulated
pursuant to Regulation S-P), 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, by judicial or administrative
process or otherwise by applicable law or regulation.
|
4.
|
Compensation;
Allocation of Costs and
Expenses
|
2
In full
consideration of the provision of the services of the Administrator, the
Company shall reimburse the Administrator for the costs and expenses
incurred by the Administrator in performing its obligations and providing
personnel and facilities hereunder, including the costs and expenses charged by
any sub-administrator that may be retained by the Administrator to provide
services to the Company or on the Administrator’s behalf. The Company will bear
all costs and expenses that are incurred in its operation, administration and
transactions and not specifically assumed by Full Circle Advisors, LLC (the
“Adviser”),
pursuant to that certain Investment Advisory Agreement, dated as of July 13,
2010 by and between the Company and the Adviser. The Company will bear all other
costs and expenses of its operations, administration and transactions, including
(without limitation) those relating to: the cost of calculating its net asset
value, including the cost of any third-party valuation services; the cost of
effecting sales and repurchases of its shares and other securities; fees payable
to third parties relating to, or associated with, making investments, including
fees and expenses associated with performing due diligence reviews of
prospective investments and advisory fees; transfer agent and custodial fees;
fees and expenses associated with marketing efforts; federal and state
registration fees, any stock exchange listing fees; federal, state and local
taxes; independent directors’ fees and expenses; brokerage commissions; fidelity
bond, directors and officers/errors and omissions liability insurance and other
insurance premiums; direct costs such as printing, mailing, long distance
telephone and staff; fees and expenses associated with independent audits and
outside legal costs; costs associated with our reporting and compliance
obligations under the Investment Company Act and applicable federal and state
securities laws; and all other expenses incurred by either the Administrator or
the Company in connection with administering the Company’s business, including
payments under this Agreement that will be based upon the Company’s allocable
portion of overhead and other expenses incurred by the Administrator in
performing its obligations under this Agreement, including rent, the fees and
expenses associated with performing compliance functions, and the Company’s
allocable portion of the costs of compensation and related expenses of its chief
financial officer and chief compliance officer and any administrative support
staff.
|
5.
|
Limitation of
Liability of the Administrator;
Indemnification
|
The
Administrator (and its officers, managers, partners, agents, employees,
controlling persons, members, and any other person or entity affiliated with the
Administrator, including without limitation its members) 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 administrator for the Company, and the Company shall
indemnify, defend and protect the Administrator (and its officers, managers,
partners, agents, employees, controlling persons, members, and any other person
or entity affiliated with the Administrator, including without limitation the
Adviser, each of whom shall be deemed a third party beneficiary hereof)
(collectively, the “Indemnified
Parties”) 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 Company
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 Company. Notwithstanding the
preceding sentence of this Section 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 Company 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 the Administrator’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 Company are not to be deemed to be
exclusive, and the Administrator and each affiliate is free to render services
to others. It is understood that directors, officers, employees and stockholders
of the Company 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 Company as
stockholders or otherwise.
|
7.
|
Duration and
Termination of this
Agreement
|
(a) This
Agreement shall continue in effect for two years from the date hereof, and
thereafter shall continue automatically for successive annual 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 Investment Company Act) of any such party, in accordance with the
requirements of the Investment Company Act.
(b) The
Agreement may be terminated at any time, without the payment of any penalty,
upon not more than 60 days’ written notice, by the vote of a majority of the
outstanding voting securities of the Company, or by the vote of the Board or by
the Administrator.
(c) This
Agreement may not be assigned by a party without the consent of the other
party. The provisions of Section 5 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.
|
8.
|
Amendments of this
Agreement
|
This
Agreement may be amended pursuant to a written instrument by mutual consent of
the parties.
4
|
9.
|
Governing
Law
|
This
Agreement shall be construed in accordance with the laws of the State of New
York and the applicable provisions of the Investment Company Act, if any. In
such case, to the extent the applicable laws of the State of New York, or any of
the provisions herein, conflict with the provisions of the Investment Company
Act, the latter shall control.
|
10.
|
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.
|
11.
|
Notices
|
Any
notice under this Agreement shall be given in writing, addressed and delivered
or mailed, postage prepaid, to the other party at its principal
office.
[Remainder
of Page Intentionally Left Blank]
5
IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date first above written.
|
FULL
CIRCLE CAPITAL CORPORATION
|
|||
|
By:
|
/s/ Xxxx X. Xxxxxx | ||
|
Name:
Xxxx X. Xxxxxx
|
|||
|
Title:
President and Chief Executive
Officer
|
|||
|
FULL
CIRCLE SERVICE COMPANY, LLC
|
|||
|
By:
|
/s/ Xxxx X. Xxxxxx | ||
|
Name:
Xxxx X. Xxxxxx
|
|||
|
Title:
Managing Member
|
|||
6
