Item 1.01
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Entry into a Material Definitive Agreement.
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In connection with the Internalization, on July 6, 2021, the Company entered into a Registration Rights Agreement with the Contributors (the
“Registration Rights Agreement”). David J. Schulte serves as Chairman of the Board and Chief Executive Officer of the Company, and Rebecca M. Sandring also serves as an executive officer of the Company. Contributors Rick Kreul, Sean DeGon, and Jeff
Teeven are current officers of the Company, and Contributor Richard C. Green is a former director and executive officer of the Company and Contributor Jeffery E. Fulmer is a former executive officer of the Company.
The Registration Rights Agreement, subject to the terms thereof, provides for certain demand and piggyback registration rights in favor of
the Contributors, subject to customary underwriter cutbacks, to require the Company to file a shelf registration statement covering the resale of listed Company securities they acquired in the Internalization and may ultimately acquire upon
conversion of new securities issued pursuant to the Internalization (as further described below). The Company has agreed to pay certain fees and expenses relating to registrations under the Registration Rights Agreement.
The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of the
Registration Rights Agreement, a copy of which is filed as Exhibits 10.1, to this Current Report on Form 8-K and is incorporated in this Item 1.01 by reference.
Item 1.02
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Termination of Material Definitive Agreement.
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Termination of Management Agreement
In connection with the closing of the Internalization, the Management Agreement effective as of May 1, 2015 between the Company and
Corridor, as amended (the “Management Agreement”) was terminated effective July 6, 2021.
As previously disclosed in the Company’s periodic reports filed with the SEC, prior to termination of the Management Agreement, Corridor (i)
presented the Company with suitable acquisition opportunities consistent with its investment policies and its objectives, (ii) was responsible for the Company’s day-to-day operations and (iii) performed such services and activities relating to the
Company’s assets and operations as may be appropriate. As historically in effect, the terms of the Management Agreement included a quarterly management fee equal to 0.25 percent (1.00 percent annualized) of the value of the Company’s Managed Assets
as of the end of each quarter. For purposes of the Management Agreement, "Managed Assets" meant the Company’s total assets (including any
securities receivables, other personal property or real property purchased with or attributable to any borrowed funds) minus (A) the initial invested value of
all non-controlling interests, (B) the value of any hedged derivative assets, (C) any prepaid expenses and (D) all of the accrued liabilities other than (1) deferred taxes and (2) debt entered into for the purpose of leverage. For purposes of the
definition of Managed Assets, the Company’s securities portfolio was valued at then-current market value. For purposes of the definition of Managed Assets, other personal property and real property assets included real and other personal property
owned and the Company’s assets invested, directly or indirectly, in equity interests in or loans secured by real estate or personal property (including acquisition-related costs and acquisition costs that may be allocated to intangibles or are
unallocated), valued at the aggregate historical cost, before reserves for depreciation, amortization, impairment charges or bad debts or other similar noncash reserves.
The Management Agreement also required a quarterly incentive fee of 10 percent of the increase in distributions paid over a threshold
distribution equal to $0.625 per share per quarter. During 2020, the Company either waived or did not earn the incentive fee that would otherwise be payable under the provisions of the Management Agreement with respect to dividends paid on the
Company's common stock. Accordingly, Corridor did not receive any incentive fees during 2020.
The information regarding the termination of the Management Agreement and the Internalization under the heading “Closing of Internalization”
in Item 8.01 of this Current Report on Form 8-K is incorporated herein by reference.
Termination of Administration Agreement
In connection with the closing of the Internalization, the Administrative Agreement dated December 1, 2011, as amended, between the Company
and Corridor (the “Administrative Agreement”) was terminated effective July 6, 2021.
As previously disclosed in the Company’s periodic reports filed with the SEC, prior to termination of Administrative Agreement, Corridor, as
administrator, performed (or oversaw or arranged for the performance of) the administrative services necessary for the Company’s operation, including without limitation providing it with equipment, clerical, bookkeeping and record keeping services.
For these services the Company paid the administrator an annual fee equal to 0.04 percent of the value of the Company's Managed Assets as of the end of each quarter, with a minimum annual fee of $30 thousand.
Pursuant to the Management and Administrative Agreement, Corridor furnished the Company with office facilities and clerical and
administrative services necessary for its operation (other than services provided by its custodian, accounting agent, dividend and interest-paying agents and other service providers).
The information regarding the termination of the Administrative Agreement and the Internalization under the heading “Closing of
Internalization” in Item 8.01 of this Current Report on Form 8-K is incorporated herein by reference.