Exhibit 10.2


 


INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT


 


This Agreement (“Agreement”)
is made as of December 5, 2018 by and between Monroe Capital Income Plus Corporation, a Maryland corporation (the “Company”),
and Monroe Capital BDC Advisors, LLC, a Delaware limited liability company (the “Advisor”).


 


WITNESSETH:


 


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


 


WHEREAS, the Advisor is an investment adviser
that has registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”); and


 


WHEREAS, the Company desires to retain
the Advisor to furnish investment advisory services to the Company, and the Advisor wishes to be retained to provide such services,
on the terms and conditions hereinafter set forth.


 


NOW, THEREFORE, in consideration of the
premises and the covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company and the Advisor hereby agree as follows:


 


1. Duties of Advisor.


 


(a) Employment of Advisor.
The Company hereby employs the Advisor to act as the investment adviser to the Company and to manage the investment and reinvestment
of the assets of the Company, subject to the supervision of the Board of Directors of the Company (the “Board”),
during the term hereof and upon the terms and conditions herein set forth, in accordance with:


 


(i) the investment objectives,
policies and restrictions that are determined by the Board from time to time and disclosed to the Advisor, which objectives, policies
and restrictions are those initially set forth in the Company’s Registration Statement on Form 10 (Registration No. 000-55941),
initially filed with the Securities and Exchange Commission (the “SEC”) on June 1, 2018, as amended from time
to time;


 


(ii) the Investment Company Act
and the Advisers Act, subject to the terms of any exemptive order applicable to the Company; and


 


(iii) all other applicable federal
and state laws, rules and regulations, and the Company’s charter and bylaws.


 


The Advisor hereby accepts such
employment and agrees during the term hereof to render such services, subject to the payment of compensation provided for herein.


 


(b) Certain Services.
Without limiting the generality of Section 1(a), the Advisor shall:


 


(i) determine the composition of
the portfolio of the Company, the nature and timing of the changes thereto and the manner of implementing such changes;


 


(ii) determine
the securities that the Company will purchase, retain, or sell;


 


(iii) identify, evaluate and negotiate
the structure of the investments made by the Company (including performing due diligence on the Company’s prospective portfolio
companies);


 


(iv) execute,
close, service and monitor the Company’s investments; and


 


(v) provide the Company with such
other investment advisory, management, research and related services as the Company may, from time to time, reasonably require
for the investment of its funds.


 




     


     


    

 


The Advisor shall have the power
and authority on behalf of the Company to effectuate its investment decisions for the Company, including the execution and delivery
of all documents relating to the Company’s investments and the placing of orders for other purchase or sale transactions
on behalf of the Company. In the event that the Company determines to incur debt financing, the Advisor shall arrange for such
financing on the Company’s behalf, subject to the oversight and any required approval of the Board. If it is necessary for
the Advisor to make investments on behalf of the Company through a special purpose vehicle, the Advisor shall have authority to
create or arrange for the creation of such special purpose vehicle and to make such investments through such special purpose vehicle
in accordance with the Investment Company Act.


 


(c) Sub-Advisers. Subject
to the requirements of the Investment Company Act (including any approval by the vote of holders of a majority of outstanding voting
securities of the Company required under Section 15(a) of the Investment Company Act), the Advisor is hereby authorized (but
not required) to enter into one or more sub-advisory agreements with other investment advisers (each, a “Sub-Adviser”)
pursuant to which the Advisor may obtain the services of the Sub-Adviser(s) to assist the Advisor in providing the investment advisory
services required to be provided by the Advisor under this Agreement. Specifically, the Advisor may retain a Sub-Adviser to recommend
specific securities or other investments based upon the Company’s investment objectives, policies and restrictions, and work,
along with the Advisor, in structuring, negotiating, arranging or effecting the acquisition or disposition of such investments
and monitoring investments on behalf of the Company, subject in all cases to the oversight of the Advisor and the Board. Any sub-advisory
agreement entered into by the Advisor shall be in accordance with the requirements of the Investment Company Act and other applicable
federal and state law. The Advisor, and not the Company, shall be responsible for any compensation payable to any Sub-Adviser.
Nothing in this subsection (c) will obligate the Advisor to pay any expenses that are the expenses of the Company under Section 2.


 


(d) Independent Contractors.
The Advisor, and any Sub-Adviser, shall for all purposes herein each be deemed to be an independent contractor and, except as expressly
provided or authorized herein, shall have no authority to act for or represent the Company in any way or otherwise be deemed an
agent of the Company.


 


(e) Books and Records.
The Advisor shall keep and preserve for the period required by the Investment Company Act any books and records relevant to the
provision of its investment advisory services to the Company and shall specifically maintain all books and records with respect
to the Company’s portfolio transactions and shall render to the Board such periodic and special reports as the Board may
reasonably request. The Advisor agrees that all records that it maintains for the Company are the property of the Company and shall
surrender promptly to the Company any such records upon the Company’s request; provided that the Advisor may retain a copy
of such records.


 


2. Allocation of Costs and Expenses.


 


(a) Expenses Payable by Advisor.
All investment professionals of the Advisor and/or its affiliates, when and to the extent engaged in providing investment advisory
services required to be provided by the Advisor under this Agreement, and the compensation and routine overhead expenses of such
personnel allocable to such services, shall be provided and paid for by the Advisor and/or its affiliates and not by the Company.


 


(b) Expenses Payable by the
Company. Other than those expenses specifically assumed by the Advisor pursuant to Section 2(a), the Company shall bear
all costs and expenses that are incurred in its operation, administration and transactions, including (without duplication) those
relating to:


 


(i) organization
and offering of the Company;


 


(ii) calculating the Company’s
net asset value (including the cost and expenses of any independent valuation firm);


 


(iii) fees and expenses incurred
by the Advisor payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs
for the Company and in conducting research and due diligence on prospective investments and equity sponsors, analyzing investment
opportunities, structuring the Company’s investments and monitoring its portfolio companies on an ongoing basis;


 




     


     


    

 


(iv) any and all fees, costs and
expenses incurred in connection with the incurrence of leverage and indebtedness of the Company, including borrowings, dollar rolls,
reverse purchase agreements, credit facilities, securitizations, margin financing and derivatives and swaps, and including any
principal or interest on the Company’s borrowings and indebtedness (including, without limitation, any fees, costs, and expenses
incurred in obtaining lines of credit, loan commitments, and letters of credit for the account of the Company and in making, carrying,
funding and/or otherwise resolving investment guarantees);


 


(v) offerings
of the Company’s common stock and other securities;


 


(vi) investment
advisory fees;


 


(vii) administration fees and expenses,
if any, payable under the administration agreement (the “Administration Agreement”) between the Company and
the Advisor, as administrator based upon the Company’s allocable portion of the Advisor’s overhead in performing its
obligations under the Administration Agreement, including rent and the allocable portion of the cost of the Company’s chief
financial officer and chief compliance officer, if any, and their respective staffs;


 


(viii) any and all fees, costs
and expenses incurred in implementing or maintaining third-party or proprietary software tools, programs or other technology for
the benefit of the Company (including, without limitation, any and all fees, costs and expenses of any investment, books and records,
portfolio compliance and reporting systems such as “Wall Street Office,” “Everest” (Black Mountain), “Mariana,”
general ledger or portfolio accounting systems and similar systems and services, including, without limitation, consultant, software
licensing, data management and recovery services fees and expenses);


 


(ix) transfer
agent, dividend agent and custodial fees and expenses;


 


(x) federal
and state registration fees;


 


(xi) all
costs of registration and listing of the Company’s shares on any securities exchange;


 


(xii) federal,
state and local taxes;


 


(xiii) independent
directors’ fees and expenses;


 


(xiv) costs of preparing and filing
reports or other documents required by the SEC or other regulators;


 


(xv) costs of any reports, proxy
statements or other notices to stockholders, including printing costs;


 


(xvi) fidelity bond, directors
and officers/errors and omissions liability insurance, and any other insurance premiums;


 


(xvii) direct costs and expenses
of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors
and outside legal costs;


 


(xviii) proxy
voting expenses; and


 


(xix) all other expenses incurred
by the Company or the Advisor in connection with administering the Company’s business.


 


3. Compensation of Advisor. The
Company agrees to pay, and the Advisor agrees to accept, as compensation for the services provided by the Advisor hereunder, a
base management fee (the “Base Management Fee”) and an incentive fee consisting of two parts (collectively,
the “Incentive Fee”) as hereinafter set forth. The Company shall make any payments due hereunder to the Advisor
or to the Advisor’s designee as the Advisor may otherwise direct. To the extent permitted by applicable law, the Advisor
may elect, or the Company may adopt a deferred compensation plan pursuant to which the Advisor may elect, to defer all or a portion
of its fees hereunder for a specified period of time.


 


(a) Base Management Fee.
The Base Management Fee is payable quarterly in arrears. Prior to any future quotation or listing of the Company’s securities
on a national securities exchange (an “Exchange Listing”) or any future quotation or listing of its securities
on any other public trading market, the base management fee shall be calculated at an annual rate of 1.50% of average total
assets (which includes assets financed using leverage). Following an Exchange Listing, the Base Management Fee shall be calculated at an annual rate of 1.75%
of average invested assets (calculated as total assets excluding cash).


 




     


     


    

 


(b) Incentive Fee.
The Incentive Fee shall consist of two parts, as follows:


 


(i) The first part of the Incentive
Fee (the “Income Based Fee”) shall be calculated and payable quarterly in arrears based on the Company’s
pre-incentive fee net investment income for the calendar quarter. For purposes of this Agreement, pre-incentive fee net investment
income for any given calendar quarter is calculated as (A) the sum of interest income, dividend income and any other income (including
any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives
from portfolio companies, but excluding fees for providing managerial assistance) accrued by the Company during the calendar quarter,
minus (B) the Company’s operating expenses for such quarter (including the Base Management Fee, any expenses payable under
the Administration Agreement and any interest expense and dividends paid on any outstanding preferred stock, but excluding the
Incentive Fee). Pre-incentive fee net investment income shall include, in the case of investments with a deferred interest feature
(such as market discount, debt instruments with payment in kind interest, preferred stock with payment in kind dividends and zero-coupon
securities), accrued income that the Company has not yet received in cash. The Advisor is not under any obligation to reimburse
the Company for any part of the incentive fee it received that was based on accrued interest that the Company never actually receives.


 


Pre-incentive fee net investment
income shall not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.


 


In calculating the Income Based
Fee for any given calendar quarter, the Company’s pre-incentive fee net investment income, expressed as a rate of return
on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any incentive
fees payable during the period) at the end of the immediately preceding calendar quarter (the “Rate of Return”),
shall be compared to a hurdle rate of 1.50% per quarter (the “Hurdle Rate”).


 


The Company shall pay the Advisor
an Income Based Fee with respect to the Company’s pre-incentive fee net investment income in each calendar quarter as follows:


 


		(A)	no incentive fee in any calendar quarter in which the pre-incentive fee net investment income does
not exceed the Hurdle Rate of 1.50% (6% annually);



 


		(B)	100% of the Company’s pre-incentive fee net investment income with respect to that portion
of such pre-incentive fee net investment income, if any, that exceeds the Hurdle Rate but is less than 1.76% in any calendar quarter
prior to an Exchange Listing or less than 1.88% in any calendar quarter following an Exchange Listing; and



 


		(C)	prior to an Exchange Listing, 15% of the amount of pre-incentive fee net investment income, if
any, that exceeds 1.76% in any calendar quarter, or following an Exchange Listing, 20% of the amount of pre-incentive fee net investment
income, if any, that exceeds 1.88% in any calendar quarter.



 


(ii) The second part of the Incentive
Fee (the “Capital Gains Fee”) shall be calculated and payable in arrears at the end of each fiscal year (or, upon termination
of this Agreement pursuant to Section 10, as of the termination date) based on the Company’s net capital gains. For purposes
of this Agreement, net capital gains are calculated by subtracting (A) the sum of the Company’s cumulative aggregate realized
capital losses and aggregate unrealized capital depreciation from (B) the Company’s cumulative aggregate realized capital
gains. If such amount is positive at the end of the relevant calendar year, then the Capital Gains Fee for such year shall be equal
to 15% of such amount, less the aggregate amount of Capital Gains Fees paid in all prior years. If such amount is negative, then
there shall be no Capital Gains Fee for such year. If this Agreement shall terminate as of a date that is not a calendar-year end,
the termination date shall be treated as though it were a calendar-year end for purposes of calculating and paying a Capital Gains
Fee. Any Capital Gains Fee for any partial year shall be prorated based on the number of days in such year.


 




     


     


    

 


For purposes of this Agreement:


 


(A) cumulative aggregate realized capital gains are
calculated as the sum of the differences, if positive, between (1) the net sales price of each investment in the Company’s
portfolio when sold and (2) the original cost of such investment;


 


(B) cumulative aggregate realized capital losses are
calculated as the absolute value of the sum of the differences, if negative, between (1) the net sales price of each investment
in the Company’s portfolio when sold and (2) the original cost of such investment; and


 


(C) aggregate unrealized capital depreciation is calculated
as the absolute value of the sum of the differences, if negative, between (1) the valuation of each investment in the Company’s
portfolio as of the end of the applicable calculation date and (2) the original cost of such investment.


 


4. Representations, Warranties and Covenants
of Advisor. The Advisor represents and warrants that it is registered as an investment adviser under the Advisers Act. The
Advisor agrees that its activities shall at all times be in compliance in all material respects with all applicable federal and
state laws governing its operations and investments, including the Investment Company Act and the Advisers Act.


 


5. Excess Brokerage Commissions.
The Advisor is hereby authorized, to the fullest extent now or hereafter permitted by law, to cause the Company to pay a member
of a national securities exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of
the amount of commission another member of such exchange, broker or dealer would have charged for effecting that transaction, if
the Advisor determines in good faith, taking into account such factors as price (including the applicable brokerage commission
or dealer spread), size of order, difficulty of execution, operational facilities of the firm and the firm’s risk and skill
in positioning blocks of securities, that such amount of commission is reasonable in relation to the value of the brokerage and/or
research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or its overall
responsibilities with respect to the Company’s portfolio, and constitutes the best net results for the Company.


 


6. Proxy Voting. The Advisor shall
be responsible for voting any proxies solicited by an issuer of securities held by the Company in the best interest of the Company
and in accordance with the Advisor’s proxy voting policies and procedures, as any such proxy voting policies and procedures
may be amended from time to time. The Company has been provided with a copy of the Advisor’s proxy voting policies and procedures
and has been informed as to how it can obtain further information from the Advisor regarding proxy voting activities undertaken
on behalf of the Company. 


 


7. Activities of Advisor. The services
of the Advisor to the Company are not exclusive, and the Advisor and/or any of its affiliates may engage in any other business
or render similar or different services to others, including, without limitation, the direct or indirect sponsorship or management
of other investment-based accounts or commingled pools of capital, however structured, having investment objectives similar to
those of the Company, so long as its services to the Company hereunder are not impaired thereby, and nothing in this Agreement
shall limit or restrict the right of any member, manager, partner, officer or employee of the Advisor or any such affiliate to
engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or
dissimilar nature, or to receive any fees or compensation in connection therewith (including fees for serving as a director of,
or providing consulting services to, one or more of the Company’s portfolio companies, subject to applicable law). So long
as this Agreement or any extension, renewal or amendment remains in effect, the Advisor shall be the only investment adviser for
the Company, subject to the Advisor’s right to enter into sub-advisory agreements. The Advisor assumes no responsibility
under this Agreement other than to render the services called for hereunder. It is understood that directors, officers, employees
and stockholders of the Company are or may become interested in the Advisor and its affiliates, as members, directors, managers,
partners, officers, employees or otherwise, and that the Advisor and directors, officers, employees, partners, stockholders, members
and managers of the Advisor and its affiliates are or may become similarly interested in the Company as stockholders or otherwise.


 




     


     


    

 


8. Responsibility of Dual Directors,
Officers and/or Employees. If any person who is a member, manager, partner, officer or employee of the Advisor or the Administrator
is or becomes a director, officer and/or employee of the Company and acts as such in any business of the Company, then such member,
manager, partner, officer and/or employee of the Advisor or the Administrator shall be deemed to be acting in such capacity solely
for the Company, and not as a member, manager, partner, officer or employee of the Advisor or the Administrator or under the control
or direction of the Advisor or the Administrator, even if paid by the Advisor or the Administrator.


 


9. Limitation of Liability of Advisor;
Indemnification. The Advisor and its affiliates and its and its affiliates’ respective directors, officers, employees,
members, managers, partners and stockholders (each of whom shall be deemed a third party beneficiary hereof) (collectively, the
 “Indemnified Parties”) shall not be liable to the Company or its subsidiaries or its and its subsidiaries’
respective directors, officers, employees, members, managers, partners or stockholders for any action taken or omitted to be taken
by the Advisor in connection with the performance of any of its duties or obligations under this Agreement or otherwise as an investment
adviser of the Company, except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting
from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt of compensation
for services. The Company shall indemnify, defend and protect the Indemnified Parties and hold them harmless from and against all
claims or liabilities (including reasonable attorneys’ fees) and other expenses reasonably incurred by the Indemnified Parties
in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or
suit by or in the right of the Company or its security holders) arising out of or in connection with the performance of any of
the Advisor’s duties or obligations under this Agreement or otherwise as an investment adviser of the Company. Notwithstanding
the foregoing provisions of this Section 9 to the contrary, nothing contained herein shall protect or be deemed to protect
the Indemnified Parties against, or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any
liability to the Company or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful
misconduct, bad faith or gross negligence in the performance of the Advisor’s duties and obligations under this Agreement
or by reason of the reckless disregard of the Advisor’s duties and obligations under this Agreement (as the same shall be
determined in accordance with the Investment Company Act and any interpretations or guidance by the SEC or its staff thereunder).


 


10. Effectiveness, Duration and Termination.


 


(a) This Agreement shall become
effective as of the Closing Date. This Agreement shall remain in effect for two years after such date, and thereafter shall continue
automatically for successive annual periods; provided that such continuance is specifically approved at least annually by:


 


(i) the vote of the Board, or by
the vote of holders of a majority of the outstanding voting securities of the Company; and


 


(ii) the vote of a majority of
the Company’s directors who are not “interested persons” (as such term is defined in Section 2(a)(19) of
the Investment Company Act) of any party hereto, in accordance with the requirements of the Investment Company Act.


 


(b) This Agreement may be terminated
at any time, without the payment of any penalty, upon 60 days’ written notice, by (i) the vote of holders of a majority
of the outstanding voting securities of the Company, (ii) the vote of the Board, or (iii) the Advisor.


 


(c) This Agreement shall automatically
terminate in the event of its “assignment” (as such term is defined for purposes of Section 15(a)(4) of the Investment
Company Act); provided that nothing herein shall cause this Agreement to terminate upon or otherwise restrict a transaction that
does not result in a change of actual control or management of the Advisor.


 


(d) The provisions of Section 9
of this Agreement shall remain in full force and effect, and the Advisor shall remain entitled to the benefits thereof, notwithstanding
any termination or expiration of this Agreement. Further, notwithstanding the termination or expiration of this Agreement as aforesaid,
the Advisor shall be entitled to any amounts owed under Section 3 through the date of termination or expiration and Section 9
shall continue in force and effect and apply to the Advisor and its representatives as and to the extent applicable.


 


11. Third Party Beneficiaries. Nothing
in this Agreement, either express or implied, is intended to or shall confer upon any person other than the parties hereto and
the Indemnified Parties any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.


 




     


     


    

 


12. Amendments of this Agreement.
This Agreement may not be amended or modified except by an instrument in writing signed by both parties hereto, and upon the consent
of stockholders of the Company in conformity with the requirements of the Investment Company Act.


 


13. Governing Law. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of New York, and the applicable provisions of the
Investment Company Act, if any. 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 Investment Company Act, if any, the latter shall control. The parties hereto unconditionally
and irrevocably consent to the exclusive jurisdiction of the federal and state courts located in the State of New York and waive
any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby.


 


14. No Waiver. The failure of either
party hereto to enforce at any time for any period the provisions of or any rights deriving from this Agreement shall not be construed
to be a waiver of such provisions or rights or the right of such party thereafter to enforce such provisions, and no waiver shall
be binding unless executed in writing by all parties hereto.


 


15. Severability. If any term or
other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms
and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any manner materially adverse to either party hereto. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner
in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.


 


16. Headings. The descriptive headings
contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.


 


17. Counterparts. This Agreement
may be executed in one or more counterparts, each of which when executed shall be deemed to be an original instrument and all of
which taken together shall constitute one and the same agreement.


 


18. Notices. All notices, requests,
claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have
been duly given or made upon receipt) by delivery in person, by overnight courier service (with signature required), by facsimile,
or by registered or certified mail (postage prepaid, return receipt requested) to the parties hereto at their respective principal
executive office addresses.


 


19. Entire Agreement. This Agreement
constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements
and undertakings, both written and oral, between the parties hereto with respect to such subject matter.


 


20. Certain Matters of Construction.


 


(a) The words “hereof,”
 “herein,” “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any
particular Section or provision of this Agreement, and reference to a particular Section of this Agreement shall include all subsections
thereof.


 


(b) Definitions shall be equally
applicable to both the singular and plural forms of the terms defined, and references to the masculine, feminine or neuter gender
shall include each other gender.


 


(c) The word “including”
shall mean including without limitation.


 


[Remainder of Page Intentionally Blank]


 




     


     


    

 


IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed as of the date first written above.


 




	 	MONROE CAPITAL INCOME PLUS CORPORATION
	 	 	 
	 	By:	/s/ Theodore L. Koenig
	 	 	Name: 	Theodore L. Koenig
	 	 	Title:  	President and Chief Executive Officer
	 	 	 
	 	MONROE CAPITAL BDC ADVISORS, LLC
	 	 	 
	 	By:	/s/ Theodore L. Koenig
	 	 	Name:   	Theodore L. Koenig
	 	 	Title:   	President and Chief Executive Officer