Item 1.01. Entry into Material Definitive Agreement.
On December 31, 2020, Rand Capital Corporation (the "Company") entered into a
new investment advisory and management agreement (the "New Advisory Agreement")
between the Company and Rand Capital Management, LLC (the "Adviser"), in
connection with the acquisition by Callodine Group, LLC ("Callodine") of the
controlling interest in the Adviser from East Asset Management, LLC (the
"Adviser Change in Control"). The New Advisory Agreement replaces the prior
investment advisory and management agreement entered into with the Adviser on
November 8, 2019 (the "Prior Investment Advisory Agreement"). Pursuant to the
terms of the New Advisory Agreement, the Adviser will remain the external
investment adviser to the Company. All terms of the New Advisory Agreement
remain unchanged from the terms of the Prior Investment Advisory Agreement. The
New Advisory Agreement is further described in the Company's Proxy Statement as
filed with the Securities and Exchange Commission on November 13, 2020.
The Company's board of directors (the "Board"), including all of the
"non-interested" (i.e., independent) directors, unanimously approved the New
Advisory Agreement at a meeting of the Board held on October 29, 2020. The
Company's shareholders approved the Company's entry into the New Advisory
Agreement at a special meeting of the shareholders held on December 16, 2020.
In addition, upon the consummation of the Adviser Change in Control, the Company
entered into a new administration agreement (the "New Administration Agreement")
between the Company and the Adviser. The New Administration Agreement replaces
the prior administration agreement entered into with the Adviser on November 8,
2019 (the "Prior Administration Agreement"). Pursuant to the terms of the New
Advisory Agreement, the Adviser will remain the administrator to the Company.
All the terms of the New Administration Agreement remain unchanged from the
terms of the Prior Administration Agreement.
In connection with the Adviser Change in Control, the investment committee of
the Adviser was expanded to add James Morrow, Chief Executive Officer of
Callodine. The Adviser's investment committee now includes Mr. Morrow, Brian
Collins, Scott Barfield, Adam Gusky, Allen F. Grum and Daniel P. Penberthy. The
approval of any investment decision for the Company (including, for the
avoidance of doubt, any follow-on investment, amendment, waiver or sale of such
investment) requires majority approval of all members then-serving on the
investment committee of the Adviser.
The foregoing descriptions of the New Advisory Agreement and the New
Administration Agreement are qualified in their entirety by the terms of the New
Advisory Agreement, dated December 31, 2020, attached hereto as Exhibit 10.1 and
the terms of the New Administration Agreement, dated December 31, 2020, attached
hereto as Exhibit 10.2.
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth under Item 1.01 above is incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1 Investment Advisory and Management Agreement, dated as of December 31,
2020, between Rand Capital Corporation and Rand Capital Management
LLC.
10.2 Administration Agreement, dated as of December 31, 2020, between Rand
Capital Corporation and Rand Capital Management LLC.
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