As filed with the Securities and Exchange Commission on October 9, 2015
Securities Act File No. 333-204239
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 1
to
Form N-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FS INVESTMENT CORPORATION IV
(Exact name of registrant as specified in charter)
201 Rouse Boulevard
Philadelphia, PA 19112
(215) 495-1150
(Address and telephone number, including area code, of principal executive offices)
Michael C. Forman
FS Investment Corporation IV
201 Rouse Boulevard
Philadelphia, PA 19112
(Name and address of agent for service)
COPIES TO:
|
James A. Lebovitz, Esq. David J. Harris, Esq. Dechert LLP Cira Centre 2929 Arch Street Philadelphia, PA 19104 Tel: (215) 994-4000 Fax: (215) 994-2222 |
Rosemarie A. Thurston, Esq. Martin H. Dozier, Esq. Alston & Bird LLP 1201 West Peachtree Street Atlanta, GA 30309-3424 Tel: (404) 881-7000 Fax: (404) 253-8447 |
Approximate date of proposed public offering: As soon as practicable after the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, as amended, other than securities offered in connection with a distribution reinvestment plan, check the following box. x
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-204239) of FS Investment Corporation IV (as amended, supplemented or modified, the “Registration Statement”) is being filed pursuant to Rule 462(d) under the Securities Act of 1933, as amended (the “Securities Act”), solely for the purpose of filing Exhibits (k)(1) and (k)(2) to the Registration Statement. No changes have been made to Part A, Part B or Part C of the Registration Statement, other than Item 25(2) of Part C as set forth below. Accordingly, this Post-Effective Amendment No. 1 consists only of the facing page, this explanatory note and Item 25(2) of the Registration Statement setting forth the exhibits to the Registration Statement. Pursuant to Rule 462(d) under the Securities Act, this Post-Effective Amendment No. 1 shall become effective immediately upon filing with the U.S. Securities and Exchange Commission. The contents of the Registration Statement are hereby incorporated by reference.
PART C
Other Information
Item 25. Financial Statements and Exhibits
(2) Exhibits
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(a)(1) |
Articles of Incorporation of the Registrant (Incorporated by reference to Exhibit (a)(1) to Pre-Effective Amendment No. 2 to the Registrant’s registration statement on Form N-2 (File No. 333-204239) filed on September 14, 2015) . | |
|
(a)(2) |
Articles of Amendment and Restatement of the Registrant (Incorporated by reference to Exhibit (a)(2) to Pre-Effective Amendment No. 4 to the Registrant’s registration statement on Form N-2 (File No. 333-20423 9) filed on September 24, 2015) . | |
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(b) |
Bylaws of the Registrant (Incorporated by reference to Exhibit ( b ) to Pre-Effective Amendment No. 2 to the Registrant’s registration statement on Form N-2 (File No. 333-204239) filed on September 14, 2015) . | |
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(d) |
Form of Subscription Agreement (Incorporated by reference to Appendix A filed with the Registrant’s final prospectus filed on October 9, 2015 with the Securities and Exchange Commission pursuant to Rule 497 of the Securities Act of 1933, as amended) . |
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|
(e) |
Distribution Reinvestment Plan of the Registrant (Incorporated by reference to Exhibit (e) to Pre-Effective Amendment No. 4 to the Registrant’s registration statement on Form N-2 (File No. 333-20423 9) filed on September 24, 2015) . | |
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(g)(1) |
Investment Advisory and Administrative Services Agreement, dated as of September 21, 2015, by and between the Registrant and FSIC IV Advisor, LLC (Incorporated by reference to Exhibit (g)(1) to Pre-Effective Amendment No. 4 to the Registrant’s registration statement on Form N-2 (File No. 333-20423 9) filed on September 24, 2015) . | |
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(g)(2) |
Investment Sub-Advisory Agreement, dated as of September 21, 2015, by and between FSIC IV Advisor, LLC and GSO / Blackstone Debt Funds Management LLC (Incorporated by reference to Exhibit (g)(2) to Pre-Effective Amendment No. 4 to the Registrant’s registration statement on Form N-2 (File No. 333-20423 9) filed on September 24, 2015) . | |
|
(h)(1) |
Dealer Manager Agreement, dated as of September 21, 2015, by and among the Registrant, FSIC IV Advisor, LLC and FS 2 Capital Partners, LLC (Incorporated by reference to Exhibit (h)(1) to Pre-Effective Amendment No. 4 to the Registrant’s registration statement on Form N-2 (File No. 333-20423 9) filed on September 24, 2015) . | |
|
(h)(2) |
Form of Selected Dealer Agreement (Incorporated by reference to Exhibit (h)(2) to Pre-Effective Amendment No. 4 to the Registrant’s registration statement on Form N-2 (File No. 333-20423 9) filed on September 24, 2015) . | |
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(j) |
Custodian Agreement, dated as of September 21, 2015, by and between the Registrant and State Street Bank and Trust Company (Incorporated by reference to Exhibit (j) to Pre-Effective Amendment No. 4 to the Registrant’s registration statement on Form N-2 (File No. 333-20423 9) filed on September 24, 2015) . | |
|
(k)(1) |
Amended and Restated Escrow Agreement, dated as of October 9, 2015, by and among the Registrant, UMB Bank, N.A. and FS 2 Capital Partners, LLC.* | |
|
(k)(2) |
Amended and Restated Expense Support and Conditional Reimbursement Agreement, dated as of October 9, 2015, by and between the Registrant and Franklin Square Holdings, L.P.* | |
C-1
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(k)(3) |
Form of Distribution Plan (Incorporated by reference to Exhibit ( k)(3 ) to Pre-Effective Amendment No. 2 to the Registrant’s registration statement on Form N-2 (File No. 333-204239) filed on September 14, 2015) . | |
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(k)(4) |
Class Shares Plan (Incorporated by reference to Exhibit (h)(2) to Pre-Effective Amendment No. 4 to the Registrant’s registration statement on Form N-2 (File No. 333-20423 9) filed on September 24, 2015) . | |
|
(l) |
Opinion of Miles & Stockbridge P.C. (Incorporated by reference to Exhibit (l) to Pre-Effective Amendment No. 4 to the Registrant’s registration statement on Form N-2 (File No. 333-20423 9) filed on September 24, 2015) . | |
|
(n)(1) |
Consent of Miles & Stockbridge P.C. (Incorporated by reference to Exhibit (1) hereto). | |
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(n)(2) |
Consent of McGladrey LLP (Incorporated by reference to Exhibit (n)(2) to Pre-Effective Amendment No. 3 to the Registrant’s registration statement on Form N-2 (File No. 333-204239) filed on September 22, 2015) . | |
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(r)(1) |
Code of Ethics of the Registrant (Incorporated by reference to Exhibit ( r)(1 ) to Pre-Effective Amendment No. 2 to the Registrant’s registration statement on Form N-2 (File No. 333-204239) filed on September 14, 2015) . | |
|
(r)(2) |
Code of Ethics of FSIC IV Advisor, LLC (Incorporated by reference to Exhibit ( r)(2 ) to Pre-Effective Amendment No. 2 to the Registrant’s registration statement on Form N-2 (File No. 333-204239) filed on September 14, 2015) . | |
| * | Filed herewith. |
C-2
Signatures
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Post-Effective Amendment No. 1 to the Registration Statement on Form N-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania, on the 9 th day of October, 2015.
| FS Investment Corporation IV | ||
| By: |
/s/ Michael C. Forman |
|
| Name: Michael C. Forman | ||
| Title: President and Chief Executive Officer | ||
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 1 to the Registration Statement on Form N-2 has been signed below by the following persons in the capacities and on the dates indicated:
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Signature |
Title |
Date |
||
|
/s/ Michael C. Forman Michael C. Forman |
President and Chief Executive Officer and Director
|
October 9, 2015 | ||
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/s/ Edward T. Gallivan, Jr. Edward T. Gallivan, Jr. |
Chief Financial Officer (Principal financial and accounting officer) |
October 9, 2015 | ||
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* David J. Adelman |
Director |
October 9, 2015 | ||
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* Thomas J. Gravina |
Director |
October 9, 2015 | ||
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* M. Walter D’Alessio |
Director |
October 9, 2015 | ||
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* Barbara J. Fouss |
Director |
October 9, 2015 | ||
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* Marc Lederman |
Director |
October 9, 2015 | ||
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* Gregory S. Rost |
Director |
October 9, 2015 | ||
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* Judah C. Sommer |
Director |
October 9, 2015 | ||
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* John E. Stuart |
Director |
October 9, 2015 | ||
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*By: |
/ S / MICHAEL C. FORMAN | |
| Attorney-in-Fact | ||
Exhibit (k)(1)
AMENDED AND RESTATED ESCROW AGREEMENT
This Amended and Restated Escrow Agreement (this “ Agreement ”) is made and entered into as of this 9th day of October, 2015 by and among FS Investment Corporation IV, a Maryland corporation (the “ Company ”), UMB Bank, N.A., as escrow agent, a national banking association organized and existing under the laws of the United States of America (the “ Escrow Agent ”), and FS 2 Capital Partners, LLC, a Delaware limited liability company (the “ Dealer Manager ”), for itself and for and on behalf of its selected dealers (the “ Selected Dealers ”).
RECITALS
WHEREAS, the Company proposes to offer and sell Class A, Class D, Class T and Class I shares of common stock, par value $0.001 per share, of the Company (“ Common Stock ”) to investors, including in a public offering of such Common Stock;
WHEREAS, as of the date of this Agreement, the Company will only offer and sell Class T Common Stock;
WHEREAS, pursuant to the Company’s public offering of Common Stock (the “ Offering ”), it is seeking gross offering proceeds from persons not affiliated with the Company or its investment adviser of at least $1.0 million (the “ Minimum Offering Requirement ”) and up to 250,000,000 shares of Common Stock, at an initial purchase price (1) of $10.60 per Class T share and (2) to be disclosed by a supplement or amendment to the Offering Document (as defined below) at such time Class A shares, Class D shares and Class I shares will be offered and sold by the Company, pursuant to the Company’s registration statement on Form N-2 (File No. 333-204239), as supplemented or amended from time to time (the “ Offering Document ”);
WHEREAS, the Dealer Manager and the Selected Dealers will sell shares of Common Stock in the Offering on behalf of the Company on a “best efforts” basis;
WHEREAS, the Company has agreed that the subscription price paid by subscribers for shares of Common Stock will be refunded to such subscribers if the Minimum Offering Requirement has not been met on or prior to the date that is one year from the date of the final prospectus filed prior to the commencement of the Offering (such one-year anniversary being referred to herein as the “ Closing Date ”);
WHEREAS, the Company and the Dealer Manager desire to establish an escrow account (the “ Escrow Account ”) as further described herein in which funds received from subscribers will be deposited and the Company and the Dealer Manager desire that UMB Bank, N.A. act as escrow agent to the Escrow Account and the Escrow Agent is willing to act in such capacity; and
WHEREAS, in order to subscribe for shares of Common Stock, a subscriber must deliver the full amount of its subscription: (i) by check in U.S. dollars or (ii) by wire transfer of immediately available funds in U.S. dollars.
WHEREAS, the Company, the Escrow Agent and the Dealer Manager are parties to that certain Escrow Agreement, dated as of September 21, 2015 (the “ Original Agreement ”), and wish to amend and restate the Original Agreement in its entirety, as set forth herein.
AGREEMENT
NOW, THEREFORE, the Company, the Dealer Manager and the Escrow Agent agree to the terms of this Agreement as follows:
| 1. | Establishment of Escrow Account ; Escrow Period . |
| (a) | On or prior to the commencement of the Offering, the parties shall establish the Escrow Account with the Escrow Agent, which shall be entitled “UMB Bank as Agent for FS Investment Corporation IV — Escrow Account.” Prior to meeting the Minimum Offering Requirement, the Dealer Manager and Selected Dealers will instruct subscribers to make checks for subscriptions payable to the order of “UMB Bank, N.A., as escrow agent for FS Investment Corporation IV.” |
| (b) | This Agreement shall be effective on the date on which the Offering Document is declared effective by the Securities and Exchange Commission. The escrow period shall commence upon the effectiveness of this Agreement and shall continue until the earlier of (i) the date upon which the Escrow Agent receives confirmation from the Company or the Dealer Manager that the Company has met the Minimum Offering Requirement, (ii) the Closing Date, or (iii) the termination of the Offering by the Company prior to meeting the Minimum Offering Requirement (the “ Escrow Period ”). |
| 2. | Operation of the Escrow . |
| (a) |
Deposits in the Escrow Account . During the Escrow Period, the Dealer Manager will promptly deliver, but in no event later than (i) noon of the next business day following receipt of any monies received from subscribers for the payment of Common Stock to the Escrow Agent for deposit in the Escrow Account (the “ Subscription Payments ”) by the Dealer Manager, if the internal supervisory review is conducted at the same location at which the subscription payments are received, pursuant to Section 13.2 of the Dealer Manager Agreement dated September 21, 2015, by and between the Company, FSIC IV Advisor, LLC and the Dealer Manager (the “ Dealer Manager Agreement ”), or (ii) noon of the second business day following receipt of the Subscription Payments by the Dealer Manager, if the internal supervisory review is conducted at a different location, pursuant to Section 13.3 of the Dealer Manager Agreement, and the Escrow Agent shall deposit and hold in the Escrow Account any monies received directly from subscribers for the payment of shares of Common Stock (collectively, the “ Escrowed Funds ”). All monies deposited into the Escrow Account shall be held in the Escrow Account until such funds are disbursed in accordance with this Section 2. Prior to disbursement of the funds deposited in the Escrow Account, such funds shall not be subject to claims by creditors of the Company or any of its affiliates. If any of the instruments of payment are returned to the Escrow Agent for nonpayment prior to receipt of the Break Escrow Affidavit (as described below), the Escrow Agent shall promptly notify the Company in writing via mail, e-mail or facsimile of such nonpayment, and is authorized to debit the Escrow |
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| Account, as applicable in the amount of such returned payment as well as any interest earned on the amount of such payment. The Company will, or will cause its transfer agent, DST Systems, Inc. (the “ Transfer Agent ”), to maintain a written account of each sale, which account shall set forth, among other things, the following information: (i) the subscriber’s name and address; (ii) the number of shares of each class of Common Stock purchased by such subscriber; and (iii) the amount paid by such subscriber for such shares of Common Stock. During the Escrow Period, neither the Company nor the Dealer Manager will be entitled to any principal funds deposited into the Escrow Account. |
| (b) | Distribution of the Escrowed Funds . If at any time on or prior to the Closing Date the Minimum Offering Requirement has been met, then upon the happening of such event, the principal amount of the Escrowed Funds shall remain in the Escrow Account until the Escrow Agent receives written direction provided by the Company or the Dealer Manager instructing the Escrow Agent to deliver the principal amount, or a portion thereof, of such Escrowed Funds as the Company or the Dealer Manager, as the case may be, shall direct in writing. An affidavit or certification from an officer of the Company or the Dealer Manager to the Escrow Agent stating that the Minimum Offering Requirement has been timely met, shall constitute sufficient evidence for the purpose of this Agreement that such event has occurred (the “ Break Escrow Affidavit ”). The Break Escrow Affidavit shall indicate: (i) the date on which the Minimum Offering Requirement has been met (the “ Break Escrow Date ”); (ii) the actual total number of shares of each class of Common Stock sold as of the Break Escrow Date; and (iii) if not all, that portion of the Escrowed Funds to be transferred. Upon the receipt by the Escrow Agent of the Break Escrow Affidavit, the Escrow Agent will deliver to State Street Bank and Trust Company (the “ Custodian ”), as directed by the Company, on the date of the first weekly closing following the receipt of the Break Escrow Affidavit, the principal and interest earned on such Escrowed Funds to be transferred and the Escrow Agent shall from that point forward, transfer on the 1st business day following each subsequent closing all principal and interest earned on the Escrowed Funds that have cleared normal banking channels for the prior subscription period to the Custodian, as directed by the Company. Additionally, the Company hereby directs the Escrow Agent to provide the Transfer Agent with all electronic files and information needed by the Transfer Agent to perform its duties as record keeper under its agreement with the Company. |
If the Escrow Agent has not received a Break Escrow Affidavit on or prior to the Closing Date, the Escrow Agent shall promptly return the Escrowed Funds, including interest, if any, thereon, to the subscribers, per the name, address and in the amounts provided by the Company, the Dealer Manager or the Transfer Agent to the Escrow Agent without deduction, penalty or expense, and the Escrow Agent shall notify the Company and the Dealer Manager in writing of its distribution of the funds, provided that the Escrow Agent shall not return such subscribers funds unless it has received a fully complete Form W-9, or an appropriate substitution thereto, executed by the subscriber. The subscription payments returned to each subscriber shall be free and clear of any and all claims
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of the Company or any of its creditors. The parties hereto hereby agree that, for purposes of this Section 2(b), the term “promptly return” shall mean that the Escrow Agent shall return the Escrowed Funds to subscribers, upon the terms and subject to the conditions set forth in this Section 2(b), by noon of the business day following the Closing Date, in compliance with Rules 10b-9 and 15c2-4 promulgated under the Securities Exchange Act of 1934, as amended.
| 3. | Escrowed Funds . Upon receipt of the Escrowed Funds, the Escrow Agent shall hold the Escrowed Funds in escrow pursuant to the terms of this Agreement. Until such time as the Escrowed Funds shall be distributed by the Escrow Agent as provided herein, the Escrowed Funds shall be invested by the Escrow Agent in UMB Bank Money Market Special, an interest bearing account, |
The Escrow Agent shall be entitled to sell or redeem any investment of the Escrowed Funds as necessary to make any distributions required under this Agreement and shall not be liable or responsible for any loss resulting from any such sale or redemption.
Interest, if any, resulting from any investment of the Escrowed Funds shall be retained by the Escrow Agent, and shall be distributed according to this Agreement.
| 4. | Duties of the Escrow Agent . The Escrow Agent shall have no duties or responsibilities other than those expressly set forth in this Agreement, and no implied duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent is not a party to, or bound by, any other agreement among the other parties hereto, and the Escrow Agent’s duties shall be determined solely by reference to this Agreement. The Escrow Agent shall have no duty to enforce any obligation of any person, other than as provided herein. The Escrow Agent shall be under no liability to anyone by reason of any failure on the part of any other party hereto or any maker, endorser or other signatory of any document or any other person to perform such person’s obligations under any such document. |
| 5. | Liability of the Escrow Agent ; Indemnification . The Escrow Agent acts hereunder as a depository only. The Escrow Agent is not responsible or liable in any manner for the sufficiency, correctness, genuineness or validity of this Agreement or with respect to the form of execution of the same. The Escrow Agent shall not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith, and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is reasonably believed by the Escrow Agent to be genuine and to be signed or presented by the proper person(s). The Escrow Agent shall not be held liable for any error in judgment made in good faith by an officer or employee of the Escrow Agent unless it shall be proved that the Escrow Agent was grossly negligent or reckless or acted intentionally in bad faith or with willful misconduct. The Escrow Agent shall not be bound by any notice of demand, or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall give its prior written consent thereto. |
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The Escrow Agent may consult legal counsel and shall exercise reasonable care in the selection of such counsel, in the event of any dispute or question as to the construction of any provisions hereof or its duties hereunder, and it shall incur no liability and shall be fully protected in acting in accordance with the reasonable opinion or instructions of such counsel.
The Escrow Agent shall not be responsible, may conclusively rely upon and shall be protected, indemnified and held harmless by the Company, for the sufficiency or accuracy of the form of, or the execution, validity, value or genuineness of any document or property received, held or delivered by it hereunder, or of the signature or endorsement thereon, or for any description therein; nor shall the Escrow Agent be responsible or liable in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any document, property or this Agreement.
In the event that the Escrow Agent shall become involved in any arbitration or litigation relating to the Escrowed Funds, the Escrow Agent is authorized to comply with any final, binding and non-appealable decision reached through such arbitration or litigation.
The Company, hereby agrees to indemnify the Escrow Agent for, and to hold it harmless against any loss, liability or expense incurred in connection herewith without gross negligence, recklessness, bad faith or willful misconduct on the part of the Escrow Agent, including, without limitation, reasonable legal or other fees arising out of or in connection with its entering into this Agreement and carrying out its duties hereunder, including, without limitation, the costs and expenses of defending itself against any claim of liability in the premises or any action for interpleader. The Escrow Agent shall be under no obligation to institute or defend any action, suit, or legal proceeding in connection herewith, unless first indemnified and held harmless to its satisfaction in accordance with the foregoing, except that the Escrow Agent shall not be indemnified against any loss, liability or expense arising out of its own gross negligence, recklessness, bad faith or willful misconduct. Such indemnity shall survive the termination or discharge of this Agreement or resignation of the Escrow Agent.
| 6. | The Escrow Agent’s Fee . The Escrow Agent shall be entitled to fees and expenses for its regular services as the Escrow Agent as set forth in Exhibit A . Additionally, the Escrow Agent is entitled to reasonable fees for extraordinary services and reimbursement of any reasonable documented out-of-pocket and extraordinary costs and expenses related to its obligations as the Escrow Agent under this Agreement, including, but not limited to, reasonable attorneys’ fees. All of the Escrow Agent’s compensation, costs and expenses shall be paid by the Company. |
| 7. | Security Interests . No party to this Agreement shall grant a security interest in any monies or other property deposited with the Escrow Agent under this Agreement, or otherwise create a lien, encumbrance or other claim against such monies or borrow against the same. |
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| 8. | Dispute . In the event of any disagreement between the undersigned or the person or persons named in the instructions contained in this Agreement, or any other person, resulting in adverse claims and demands being made in connection with or for any papers, money or property involved herein, or affected hereby, the Escrow Agent shall be entitled to refuse to comply with any demand or claim, as long as such disagreement shall continue, and in so refusing to make any delivery or other disposition of any money, papers or property involved or affected hereby, the Escrow Agent shall not be or become liable to the undersigned or to any person named in such instructions for its refusal to comply with such conflicting or adverse demands, and the Escrow Agent shall be entitled to refuse and refrain to act until: (a) the rights of the adverse claimants shall have been fully and finally adjudicated in a court assuming and having jurisdiction of the parties and money, papers and property involved herein or affected hereby; or (b) all differences shall have been adjusted by agreement and the Escrow Agent shall have been notified thereof in writing, signed by all the interested parties. |
| 9. | Resignation of the Escrow Agent . The Escrow Agent may resign or be removed, at any time, for any reason, by written notice of its resignation or removal to the proper parties at their respective addresses as set forth herein, at least 60 days before the date specified for such resignation or removal to take effect. Upon the effective date of such resignation or removal: |
| (a) | all cash and other payments and all other property then held by the Escrow Agent hereunder shall be delivered by it to such successor escrow agent as may be designated in writing by the Company, whereupon the Escrow Agent’s obligations hereunder shall cease and terminate; |
| (b) | if no such successor escrow agent has been designated by such date, all obligations of the Escrow Agent hereunder shall, nevertheless, cease and terminate, and the Escrow Agent’s sole responsibility thereafter shall be to keep all property then held by it and to deliver the same to a person designated in writing by the Company or in accordance with the directions of a final order or judgment of a court of competent jurisdiction; and |
| (c) | if no such successor escrow agent has been designated by such date, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor agent; further the Escrow Agent may pay into court all monies and property deposited with the Escrow Agent under this Agreement. |
| 10. | Notices . All notices, demands and requests required or permitted to be given under the provisions hereof must be in writing and shall be deemed to have been sufficiently given, upon receipt, if (i) personally delivered, (ii) sent by telecopy and confirmed by phone, (iii) sent by electronic mail and confirmed by electronic mail confirmation of receipt or by telephone, or (iv) mailed by registered or certified mail, with return receipt requested, delivered as follows: |
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| (1) | If to the Company: |
FS Investment Corporation IV 201 Rouse Boulevard Philadelphia, PA 19112 Telephone: (215) 495-1150 Facsimile: (215) 222-4649 Attn: Stephen S. Sypherd |
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| (2) |
If to the Escrow Agent: |
UMB Bank, N.A. 1010 Grand Blvd., 4th Floor Mail Stop: 1020409 Kansas City, Missouri 64106 Attention: Lara Stevens, Corporate Trust & Escrow Services Telephone: (816) 860-3017 Facsimile: (816) 860-3029 |
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| (3) | If to Dealer Manager: |
FS 2 Capital Partners, LLC 201 Rouse Boulevard Philadelphia, PA 19112 Telephone: (215) 495-1150 Facsimile: (215) 222-4649 Attn: Chief Compliance Officer |
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| 11. | Governing Law . This Agreement shall be construed and enforced in accordance with the laws of the State of Missouri without regard to the principles of conflicts of law. |
| 12. | Binding Effect; Benefit . This Agreement shall be binding upon and inure to the benefit of the permitted successors and assigns of the parties hereto. |
| 13. | Modification . This Agreement may be amended, modified or terminated at any time by a writing executed by the Company and the Escrow Agent. |
| 14. | Assignability . This Agreement shall not be assigned by the Escrow Agent without the Company’s prior written consent. |
| 15. | Counterparts . This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. |
| 16. | Headings . The section headings contained in this Agreement are inserted for convenience only, and shall not affect in any way, the meaning or interpretation of this Agreement. |
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| 17. | Severability . This Agreement constitutes the entire agreement among the parties and supersedes all prior and contemporaneous agreements and undertakings of the parties in connection herewith. No failure or delay of either party in exercising any right, power or remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any right, power or remedy preclude any other or further exercise of any right, power or remedy. In the event that any one or more of the provisions contained in this Agreement, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement. |
| 18. | Earnings Allocation ; Tax Matters; Patriot Act Compliance . The EscrowAgent shall be responsible for all tax reporting under this Agreement. The Company shall provide to the Escrow Agent upon the execution of this Agreement any documentation requested and any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of 2001, as amended from time to time. |
| 19. | Miscellaneous . This Agreement shall not be construed against the party preparing it, and shall be construed without regard to the identity of the person who drafted it or the party who caused it to be drafted and shall be construed as if all parties had jointly prepared this Agreement and it shall be deemed their joint work product, and each and every provision of this Agreement shall be construed as though all of the parties hereto participated equally in the drafting hereof; and any uncertainty or ambiguity shall not be interpreted against any one party. As a result of the foregoing, any rule of construction that a document is to be construed against the drafting party shall not be applicable. |
| 20. | Termination of the Escrow Agreement . This Agreement, except for Sections 5 and 9 hereof, which shall continue in effect, shall terminate upon written notice from the Company to the Escrow Agent. |
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF , the undersigned have caused this Agreement to be executed by their duly authorized representatives as of the date first written hereinabove.
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COMPANY:
FS Investment Corporation IV |
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| By: | /s/ Stephen Sypherd | |
| Name: | Stephen Sypherd | |
| Title: | Vice President, Treasurer and Secretary | |
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DEALER MANAGER:
FS 2 Capital Partners, LLC |
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| By: | /s/ Mike Vessels | |
| Name: | Mike Vessels | |
| Title: | President | |
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ESCROW AGENT:
UMB Bank, N.A. |
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| By: | /s/ Lara L. Stevens | |
| Name: | Lara L. Stevens | |
| Title: | Vice President | |
[Signature Page to Escrow Agreement]
EXHIBIT A
ESCROW FEES AND EXPENSES
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Acceptance Fee |
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Review documents, establish account, and Set up recon file/feeds with Transfer Agent |
$3,250 | |
|
Annual Fee |
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|
Annual Escrow Agent |
$2,500 | |
|
Transactional Fees |
||
|
Outgoing Wire Transfer |
$15 each | |
|
BAI File to DST |
$2.50 per business day | |
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Wire Ripping to DST |
$10 per business day | |
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Expense Reimbursement |
6% of Total Fee billed | |
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Online Access |
$60 per month | |
Acceptance fee will be payable at the initiation of the escrow. Thereafter, the Annual Fee and Transactional Fees will be billed quarterly in arrears.
Fees specified are for the regular, routine services contemplated by the Agreement, and any additional or extraordinary services, including, but not limited to disbursements involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence, will be charged based upon time required at the then standard hourly rate. In addition to the specified fees, all reasonable expenses related to the administration of the Agreement (other than normal overhead expenses of the regular staff) such as, but not limited to, travel, telephone, facsimile, supplies, legal fees, accounting fees, etc., will be reimbursable.
Exhibit (k)(2)
AMENDED AND RESTATED EXPENSE SUPPORT AND CONDITIONAL
REIMBURSEMENT AGREEMENT
This Amended and Restated Expense Support and Conditional Reimbursement Agreement (the “ Agreement ”) is made this 9th day of October, 2015, by and between FS INVESTMENT CORPORATION IV, a Maryland corporation (the “ Company ”), and FRANKLIN SQUARE HOLDINGS, L.P., a Pennsylvania limited partnership (“ FSH ”).
WHEREAS, the Company is a newly organized, non-diversified, closed-end management investment company that intends to elect to be regulated as a business development company under the Investment Company Act of 1940, as amended (the “ Investment Company Act ”);
WHEREAS, FSIC IV Advisor, LLC (“ FSIC IV Advisor ”) is the Company’s investment adviser and is a subsidiary of FSH; and
WHEREAS, the Company and FSH have determined that it is appropriate and in the best interests of the Company to ensure that no portion of distributions made to the Company’s stockholders will be paid from the Company’s offering proceeds or borrowings.
WHEREAS, the Company and FSH are parties to that certain Expense Support and Conditional Reimbursement Agreement, dated as of September 21, 2015 (the “ Original Agreement ”), and wish to amend and restate the Original Agreement in its entirety, as set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:
| 1. | FSH Expense Payments to the Company |
(a) On a quarterly basis, FSH shall reimburse the Company in an amount equal to the difference between the Company’s cumulative distributions paid to the Company’s stockholders in each calendar quarter less Available Operating Funds (defined below) received by the Company on account of its investment portfolio during such calendar quarter. Any payments required to be made by FSH pursuant to the preceding sentence shall be referred to herein as an “ Expense Payment .”
(b) FSH’s obligation to make an Expense Payment shall automatically become a liability of FSH and the right to such Expense Payment shall be an asset of the Company on the last business day of the applicable calendar quarter. The Expense Payment for any calendar quarter shall be paid by FSH to the Company in any combination of cash or other immediately available funds, and/or offset against amounts due from the Company to FSH or FSIC IV Advisor, no later than the earlier of (i) the date on which the Company closes its books for such calendar quarter and (ii) forty-five days after the end of such calendar quarter.
(c) For purposes of this Agreement, “ Available Operating Funds ” means the sum 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 the Company on account of preferred and common equity investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above).
| 2. | Reimbursement of Expense Payments by the Company |
(a) Following any calendar quarter in which Available Operating Funds exceed the cumulative distributions paid to the Company’s stockholders in such calendar quarter (the amount of such excess being hereinafter referred to as “ Excess Operating Funds ”), the Company shall pay such Excess Operating Funds, or a portion thereof in accordance with Sections 2(b), 2(c) and 2(d), as applicable, to FSH until such time as all Expense Payments made by FSH to the Company within three years prior to the last business day of such calendar quarter have been reimbursed. Any payments required to be made by the Company pursuant to this Section 2(a) shall be referred to herein as a “ Reimbursement Payment .”
(b) Subject to Sections 2(c) and 2(d), as applicable, the amount of the Reimbursement Payment for any calendar quarter shall equal the lesser of (i) the Excess Operating Funds in such quarter and (ii) the aggregate amount of all Expense Payments made by FSH to the Company within three years prior to the last business day of such calendar quarter that have not been previously reimbursed by the Company to FSH.
(c) Notwithstanding anything to the contrary in this Agreement, the amount of the Reimbursement Payment for any calendar quarter shall be reduced to the extent that such Reimbursement Payment, together with all other Reimbursement Payments paid during that fiscal year, would cause Other Operating Expenses (as defined below) (on an annualized basis and net of any Expense Payments received by the Company during such fiscal year) to exceed the lesser of (i) 1.75% of the Company’s average net assets attributable to shares of the Company’s common stock for the fiscal year-to-date period after taking such Expense Payments into account and (ii) the percentage of the Company’s average net assets attributable to shares of the Company’s common stock represented by Other Operating Expenses during the fiscal year in which such Expense Payment was made (provided, however, that this clause (ii) shall not apply to any Reimbursement Payment which relates to an Expense Payment made during the same fiscal year). For purposes of this Agreement, “ Other Operating Expenses ” means the Company’s total Operating Expenses (as defined below), excluding base management fees, incentive fees, distribution fees, organization and offering costs, financing fees and costs, interest expense, brokerage commissions and extraordinary expenses. “ Operating Expenses ” means all operating costs and expenses incurred, as determined in accordance with generally accepted accounting principles for investment companies. The calculation of average net assets shall be consistent with such periodic calculations of average net assets in the Company’s financial statements.
(d) Notwithstanding anything to the contrary in this Agreement, no Reimbursement Payment for any calendar quarter shall be made if the annualized rate of regular cash distributions declared by the Company at the time of such Reimbursement Payment is less than the annualized rate of regular cash distributions declared by the Company at the time the Expense Payment was made to which such Reimbursement Payment relates.
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(e) The Company’s obligation to make a Reimbursement Payment shall automatically become a liability of the Company and the right to such Reimbursement Payment shall be an asset of FSH on the last business day of the applicable calendar quarter. The Reimbursement Payment for any calendar quarter shall be paid by the Company to FSH in any combination of cash or other immediately available funds as promptly as possible following such calendar quarter and in no event later than forty-five days after the end of such calendar quarter. Any Reimbursement Payments shall be deemed to have reimbursed FSH for Expense Payments in chronological order beginning with the oldest Expense Payment eligible for reimbursement under this Section 2.
(f) All Reimbursement Payments hereunder shall be deemed to relate to the earliest unreimbursed Expense Payments made by FSH to the Company within three years prior to the last business day of the calendar quarter in which such Reimbursement Payment obligation is accrued.
| 3. | Termination and Survival |
(a) This Agreement shall become effective as of the date of this Agreement.
(b) This Agreement may be terminated at any time, without the payment of any penalty, by the Company or FSH at any time, with or without notice.
(c) This Agreement shall automatically terminate in the event of (i) the termination by the Company of the Investment Advisory and Administrative Services Agreement, dated September 21, 2015, between the Company and FSIC IV Advisor; (ii) the board of directors of the Company makes a determination to dissolve or liquidate the Company; or (iii) upon a liquidity event of the Company, including but not limited to (1) a listing of the Company’s common stock on a national securities exchange, (2) the sale of all or substantially all of the Company’s assets either on a complete portfolio basis or individually followed by a liquidation or (3) a merger or another transaction approved by the board of directors in which stockholders receive cash or shares of a publicly-traded company.
(d) Sections 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 FSH.
| 4. | Miscellaneous |
(a) 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.
(b) This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof.
(c) 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
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Delaware. For so long as the Company is regulated as a business development company under the Investment Company Act, this Agreement shall also be construed in accordance with the applicable provisions of the Investment Company Act. In such case, to the extent the applicable laws of the State of Delaware or any of the provisions herein conflict with the provisions of the Investment Company 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 Articles of Amendment and Restatement or Bylaws, as each may be amended or restated, or to relieve or deprive the board of directors of the Company of its responsibility for and control of the conduct of the affairs of the Company.
(d) 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.
(e) The Company shall not assign this Agreement or any right, interest or benefit under this Agreement without the prior written consent of FSH.
(f) 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.]
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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.
| FS INVESTMENT CORPORATION IV | ||
| By: | /s/ Michael C. Forman | |
| Name: | Michael C. Forman | |
| Title: | President and Chief Executive Officer | |
| FRANKLIN SQUARE HOLDINGS, L.P. | ||
| By: |
Franklin Square Holdings, G.P., LLC, its
general partner |
|
| By: | /s/ Michael C. Forman | |
| Name: | Michael C. Forman | |
| Title: | Managing Member | |
[Signature Page to Expense Support and Conditional Reimbursement Agreement]