AMENDED AND RESTATED EXPENSE
SUPPORT AND CONDITIONAL
REIMBURSEMENT AGREEMENT
THIS AMENDED AND RESTATED
EXPENSE SUPPORT AND CONDITIONAL
REIMBURSEMENT AGREEMENT (the "Agreement")
is made the 11th day of July, 2017 between CION Ares
Diversified Credit Fund, a Delaware statutory trust (the
"Company"), and CION Ares Management, LLC, a
Delaware limited liability company ("CAM").
WHEREAS, the Company is a diversified,
closed-end management investment company that has
elected to operate as an interval fund under the
Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, CAM is the Company's investment
adviser;
WHEREAS, the Company and the CAM 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
WHEREAS, the Company and CAM had
previously entered into an Expense Support and
Conditional Reimbursement Agreement dated as of
December 6, 2016 (the "Original Agreement"); and
WHEREAS, the Company and CAM desire to
amend and restate the Original Agreement to reflect that
the Fund will offer multiple classes of its common
shares of beneficial interest (each such class, a "Class").
NOW, THEREFORE, in consideration of the
premises and for other good and valuable consideration,
the parties hereby agree as follows:
1. CAM Expense Payments to the
Company
1.1 CAM shall reimburse the
Company's initial organizational and offering expenses
and, commencing with the first quarter end following the
Effective Date (as defined below) and continuing
through the end of the last quarter to fall in whole or in
part during the term of this Agreement, CAM shall also
reimburse each Class' operating expenses to the extent
that aggregate distributions made to the shareholders of
such Class during the applicable quarter (or the portion
thereof that falls within the term of this Agreement)
exceed Available Operating Funds (as defined below).
Additionally, during the term of this Agreement, CAM
may reimburse the Company's and/or any Class'
operating expenses to the extent that it otherwise deems
appropriate in order to ensure that the Company or a
Class bears an appropriate level of expenses. Any
payments to be made by CAM pursuant to this Section
1.1 shall be referred to herein as an "Expense
Payment."
1.2 For purposes of this Agreement,
"Available Operating Funds" means the sum
attributable to the applicable Class 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.)
1.3 CAM's obligation to make an
Expense Payment shall automatically become a liability
of CAM 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 CAM to the Company in any
combination of cash or other immediately available
funds, and/or (ii) offset against amounts due from the
Company to CAM.
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 a Class' shareholders in respect
of such calendar quarter (the amount of such excess
being hereinafter referred to as "Excess Operating
Funds"), the Company shall pay as an expense of the
applicable Class such Excess Operating Funds, or a
portion thereof, in accordance with Section 2.2, to CAM
or accrue such Excess Operating Funds as a liability of
the applicable Class until such time as all Expense
Payments made by CAM to such Class 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 Notwithstanding anything contained
in Section 2.1 of this Agreement, in no event shall a
Reimbursement Payment be payable by the Company
with respect to any Class for any quarter unless and to
the extent that such Reimbursement Payment (together
with any other Reimbursement Payments made during
the fiscal year) does not cause Other Fund Operating
Expenses attributable to such Class (as defined below)
(on an annualized basis and net of any Expense
Payments received by Company with respect to such
Class during such fiscal year) during the applicable
quarter to exceed the percentage of the Class' average
net assets attributable to common shares represented by
Other Fund Operating Expenses (on an annualized basis)
during the quarter in which such expense support
payment from CAM was made.
2.3 Notwithstanding anything to the
contrary in this Agreement, no Reimbursement Payment
shall be made if the Effective Rate of Distributions Per
Share declared by the Company for the applicable Class
at the time of such Reimbursement Payment is less than
the Effective Rate of Distributions Per Share for such
Class at the time the Expense Payment was made to
which such Reimbursement Payment relates. For
purposes of the Agreement, "Effective Rate of
Distributions Per Share" means the actual declared
distribution rate per share exclusive of return of capital
and distribution rate reduction due to distribution and
shareholder fees, if any.
2.4 The Company's obligation to make a
Reimbursement Payment shall automatically become a
liability of the applicable Class and the right to such
Reimbursement Payment shall be an asset of CAM 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 CAM in any combination of cash or other
immediately available funds. Any Reimbursement
Payments shall be deemed to have reimbursed CAM for
Expense Payments in chronological order beginning
with the oldest Expense Payment eligible for
reimbursement under this Section 2.
2.5 For the purposes of this Agreement,
"Other Fund Operating Expenses" means the
Company's total Operating Expenses allocable to the
applicable Class (as defined below), excluding the
Management and Incentive fees, offering expenses,
financing fees and costs, interest expense and
extraordinary expenses. "Operating Expenses" means
all operating costs and expenses incurred by the
Company, as determined in accordance with generally
accepted accounting principles for investment
companies.
3. Effective Date; Termination; Survival
3.1 Effective Date. This Agreement
shall become effective as of the date first written above
(the "Effective Date").
3.2 Termination.
(i) This Agreement will remain
in effect for one year from the Effective Date (the
"Effective Period"), unless earlier terminated by the
Company's board of trustees upon written notice to
CAM. This Agreement may be renewed by the mutual
agreement of CAM and the Company for successive
terms (each, an "Additional Term"). Unless so
renewed, this Agreement will terminate automatically at
the end of the Effective Period or Additional Term, as
applicable.
(ii) This Agreement shall
automatically terminate in the event of (a) the
termination by the Company of the Advisory
Agreement, or (b) the board of trustees of the Company
making a determination to dissolve, merge, or liquidate
the Company.
(iii) Notwithstanding anything
contrary set forth in this Agreement, if this Agreement
terminates automatically pursuant to Section 3.2(ii)
above, or, following a termination of this Agreement
pursuant to Section 3.2(i), an event described in Section
3.2(ii) occurs, the Company agrees to pay CAM an
amount equal to all Expense Payments paid by CAM to
the Company within three (3) years prior to the date of
such termination pursuant to Section 3.2(ii) or the
occurrence of such event, as applicable, and that have
not been previously reimbursed by the Company
to CAM. Such repayment shall be made to CAM no
later than thirty (30) days after such date of termination
or the date of such event, as applicable.
3.3 Survival. Sections 1, 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 CAM.
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 registered
management investment company under the 1940 Act,
this Agreement shall also be construed in accordance
with the 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 Amended and
Restated Declaration of Trust and/or the its By-Laws, as
each may amended or restated, or to relieve or deprive
the board of trustees 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.
[Remainder of page intentionally left 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.
CION ARES DIVERSIFIED CREDIT FUND
By: _________________________________________
Name:
Title:
CION ARES MANAGEMENT, LLC
By: ________________________________________
Name:
Title:
Information Classification: Limited Access
Information Classification: Limited Access
22717007.5
