Exhibit 10.2

 

Expense Limitation Agreement

 

This Expense Limitation Agreement (the “Agreement”) is entered into this 31st
day of March, 2019, by and between TP Flexible Income Fund, Inc. (the “Fund”)
and Prospect Flexible Income Management, LLC (the “Adviser”).

 

WHEREAS, the Fund is an externally managed, non-diversified, closed-end
management investment company that has elected to be treated as a business
development company under the Investment Company Act of 1940, as amended (the
“1940 Act”);

 

WHEREAS, the Adviser serves as the Fund’s investment advisor pursuant to that
certain Investment Advisory Agreement, dated as of March 31, 2019 (the
“Investment Advisory Agreement”);

 

WHEREAS, the Adviser may waive a portion or all of the investment advisory fees
that it is entitled to receive pursuant to the Investment Advisory Agreement in
order to limit the Fund’s Operating Expenses (as defined below) to an annual
rate, expressed as a percentage of the Fund’s average quarterly net assets,
equal to 8.00% (the “Annual Limit”); and

 

WHEREAS, the Fund and the Adviser have determined that it is appropriate and in
the best interest of the Fund for the Fund to reimburse the Adviser for any
previously waived investment advisory fees in accordance with the terms of this
Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:

 

In the event that the current Operating Expenses of the Fund, as accrued each
quarter, exceed the Annual Limit (the amount of such excess, the “Excess
Amount”), the Advisor may, at its option and in its sole discretion on a
quarterly basis, waive the investment advisory fees to which it is entitled
pursuant to the Investment Advisory Agreement (an “Excess Amount Waiver”), in
any amount up to the Excess Amount.

 

For purposes of this Agreement, the term “Operating Expenses” with respect to
the Fund, is defined to include all expenses necessary or appropriate for the
operation of the Fund, including but not limited to the Advisor’s base
management fees detailed in Section 3(a) the Investment Advisory Agreement, any
and all costs and expenses that qualify as line item “operating” expenses in the
financial statements of the Fund as the same are filed with the U.S. Securities
and Exchange Commission and other expenses described in the Investment Advisory
Agreement, but does not include any portfolio transaction or other
investment-related costs (including brokerage commissions, dealer and
underwriter spreads, prime broker fees and expenses and dividend expenses
related to short sales), interest expenses and other financing costs,
extraordinary expenses and acquired fund fees and expenses. Upfront shareholder
transaction expenses (such as sales commissions, dealer manager fees, and
similar items) are not Operating Expenses.

 

Any Excess Amount Waiver made by the Adviser is subject to repayment (a
“Reimbursement”) by the Fund within the three years following the end of the
quarter in which the Excess Amount Waiver was made by the Adviser. If this
Agreement is terminated or expires pursuant to its terms, the Adviser shall
maintain its right to repayment for any Excess Amount Waiver it has made under
this Agreement.

 

 

 

 

 

Any Reimbursement shall be made solely in the event that that the Fund has
sufficient excess cash on hand at the time of any proposed Reimbursement and
shall be limited to the lesser of (i) the excess of the Annual Limit applicable
to such quarter over the Fund’s actual Operating Expenses for such quarter and
(ii) the amount of Reimbursement which, when added to the Fund’s expenses for
such quarter, permits the Fund to pay the then-current aggregate quarterly
distribution to its shareholders, at a minimum annualized rate of at least 6.00%
(based on the gross offering prices of Fund shares) (the “Distribution”) from
the sum of (x) the Fund’s net investment income (loss) for such quarter plus (y)
the Fund’s net realized gains (losses) for such quarter (collectively, the
“Repayment Limitations”). For the purposes of the calculations pursuant to (i)
and (ii) of the preceding sentence, any Reimbursement will be treated as an
expense of the Fund for such quarter, without regard to the GAAP treatment of
such expense. In the event that the Fund is unable to make a full payment of any
Reimbursements due for any applicable quarter because the Fund does not have
sufficient excess cash on hand, any such unpaid amount shall become a payable of
the Fund for accounting purposes and shall be paid when the Fund has sufficient
excess cash on hand (subject to the Repayment Limitations); provided, that in
the case of any Reimbursements, such payment shall be made no later than the
date that is three years following the end of the quarter in which the
applicable Excess Amount Waiver was made by the Adviser.

 

This Agreement shall be effective as of the date hereof, and continue until the
first month end following the one-year anniversary thereof (the “Initial Term”).
Following the Initial Term of this Agreement, the Adviser may elect, in its sole
and absolute discretion, to offer to continue this Agreement for successive
annual periods. Any such continuance must be approved by a majority of the Board
of Directors of the Fund (the “Board”), including a majority of the directors
that are not “interested persons” of the Fund, as such term is defined under the
1940 Act.

 

This Agreement may be terminated at any time, without the payment of any penalty
and without notice, by the Fund. This Agreement may be terminated by the Adviser
upon written notice to the Fund. This Agreement will automatically terminate if
(i) the Fund provides the Adviser with notice of the Fund’s intent to terminate
the Investment Advisory Agreement, and such termination of this Agreement will
be effective upon the date that the Adviser receives such notice or (ii) the
Investment Advisory Agreement is terminated for any reason (each event, an “IAA
Termination”). After any termination of this Agreement pursuant to an IAA
Termination, the Fund shall pay to the Adviser any unpaid Excess Amount Waiver
no later than the date that is 30 days following the date of such IAA
Termination.

 

Miscellaneous

 

(a)                This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without reference to its
conflicts of laws provisions) and the applicable provisions of the 1940 Act and
the Investment Advisers Act of 1940, as amended (the “Advisers Act”). To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act or
the Advisers Act, the latter two, as applicable, shall control. Further, nothing
herein contained shall be deemed to require the Fund to take any action contrary
to the Fund’s Articles of Incorporation or Bylaws, as each may be amended or
restated from time to time, or to relieve or deprive the Board of its
responsibility for and control of the conduct of the affairs of the Fund.

 

(b)               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.

 

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(c)               The Fund shall not assign this Agreement or any right,
interest or benefit under this Agreement without the prior written consent of
the Adviser.

 

(d)               This Agreement may only be amended in writing, and 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.

 

[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

 

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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.

 

  TP FLEXIBLE INCOME FUND, INC.         By: /s/ M. Grier Eliasek   Name: M.
Grier Eliasek   Title: Chief Executive Officer and President         PROSPECT
FLEXIBLE INCOME MANAGEMENT, LLC         By: /s/ Kristin Van Dask   Name: Kristin
Van Dask   Title: Chief Financial Officer, Chief Compliance Officer, Secretary
and Treasurer

 

 [Signature Page to Expense Limitation Agreement]