Document:

FS Investment Corporation IV 8-K

 

Exhibit 10.3

 

 

SPECIAL CUSTODY AND PLEDGE AGREEMENT

  

AGREEMENT (hereinafter “Agreement”),
dated as of March 1, 2017, among State Street Bank and Trust Company, a Massachusetts trust company, in its capacity as
custodian hereunder (“Custodian”), Broomall Funding LLC (the “Fund”), and BNP Paribas Prime Brokerage
International, Ltd. (the “Counterparty”).

 

WHEREAS, the Fund provides Collateral
(as defined herein) to Counterparty to secure obligations owing by the Fund to the Counterparty under the Committed Facility Agreement,
dated as of date hereof (the “Committed Facility Agreement”), and the account agreement included in the U.S. PB Agreement,
dated as of the date hereof, with the Counterparty (the “Account Agreement” and, together with the Committed Facility
Agreement, the “40 Act Financing Agreements”); and

 

WHEREAS, Counterparty is required
to comply with applicable laws and regulations pertaining to extensions of credit and borrowing of securities, including the margin
regulations of the Board of Governors of the Federal Reserve System and of any relevant securities exchanges and other self-regulatory
organizations (collectively, the “Margin Rules”) and Counterparty’s internal policies; and

 

WHEREAS, to facilitate extensions
of credit and the borrowing of securities from the Counterparty, the Fund and Counterparty desire to establish and evidence procedures
for compliance with the Margin Rules; and

 

WHEREAS, Custodian acts as custodian
of certain assets of the Fund pursuant to a custodian agreement by and among the Custodian, the Fund and certain other wholly-owned
subsidiaries of FS Investment Corporation IV (the “Custody Agreement”).

 

NOW, THEREFORE, in consideration
of the mutual covenants contained herein and for other good and valuable consideration, it is agreed as follows:

 

(1)          As
used herein, capitalized terms have the following meanings unless otherwise defined herein:

 

“Adequate Performance Assurance”
shall mean such Collateral placed in the Special Custody Account (as such term is hereinafter defined) as is adequate under the
terms of the Committed Facility Agreement and, to the extent such Committed Facility Agreement (i) has been terminated or the commitment
therein has expired or (ii) is otherwise inapplicable to any portion of the Collateral, the Account Agreement.

 

“Advice from Counterparty” means
a notice or entitlement order (as defined in Section 8-102 of the UCC (as defined herein)) delivered by an Authorized Representative
of Counterparty to the Fund or Custodian, as applicable, hereunder, communicated: (i) in writing; (ii) by a facsimile-sending device;
or (iii) in cases of calls for additional Collateral (as such term is hereinafter defined) or notices referred to in paragraph
8 hereof, by telephone to a person designated by the Fund or Custodian in writing as authorized to receive such advice or, in the
event that no such person is available, to any officer of the Fund or Custodian and confirmed in writing promptly thereafter. A
duly-authorized officer of Counterparty will certify to Custodian, on Appendix A attached, the names and signatures of those employees
of Counterparty who are authorized to sign Advices from Counterparty (each, an “Authorized Representative of Counterparty”),
which certification may be amended from time to time.

 

    

     

    

 

“Business Day” means a day on
which Custodian, the Fund and the Counterparty are open for business.

 

“Collateral” means U.S. cash,
U.S. Government securities, or other U.S. margin-eligible securities acceptable to the Counterparty and Custodian which are pledged
to the Counterparty as provided herein.

 

“Foreign Securities” means any
investments (including foreign currencies) for which the primary market is outside the United States, and any cash and cash equivalents
that are reasonably necessary to effect the Fund’s transactions in those investments.

 

“Insolvency” means that: (i)
an order, judgment or decree has been entered under the bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law (herein called the “Bankruptcy Law”) of any jurisdiction adjudicating
the Fund insolvent; (ii) the Fund has petitioned or applied to any tribunal for, or consented to the appointment of, or taking
possession by, a trustee, receiver, liquidator or similar official, of the Fund, or commenced a voluntary case under the Bankruptcy
Law of the United States or any proceedings relating to the Fund under the Bankruptcy Law of any other jurisdiction, whether now
or hereinafter in effect; or (iii) any such petition or application has been filed, or any such proceedings commenced, against
the Fund and the Fund by any act has indicated its approval thereof, consent thereto or acquiescence therein, or an order for relief
has been entered in an involuntary case under the Bankruptcy Law of the United States or any other jurisdiction, as now or hereinafter
constituted, or an order, judgment or decree has been entered appointing any such trustee, receiver, liquidator or similar official,
or approving the petition in any such proceedings.

 

“Instructions from Fund” means
a request, direction or certification in writing signed in the name of the Fund by a person authorized by the Fund, on Appendix
B attached (as may be amended from time to time), and delivered to Custodian or transmitted to it by a facsimile-sending device,
except that instructions to pledge initial or additional Collateral may be given by telephone and thereafter confirmed in writing
signed in the name of the Fund by a person authorized in writing by the Fund.

 

(2)           (a)          Upon Instructions from
Fund, Custodian, in its capacity as a Securities Intermediary as defined in Revised Article 8 of the Uniform Commercial Code as
in effect from time to time in the State of New York (the “UCC”), to the extent the same may be applicable, or in
applicable federal law or regulations, shall segregate Collateral on its books and records as an account for Counterparty entitled
“BNP Paribas Prime Brokerage International, Ltd., Pledgee of Broomall Funding LLC” (the “Special Custody Account”)
and shall hold therein for the Counterparty as pledgee upon the terms of this Agreement all Collateral. The Custodian hereby agrees
that any Collateral except U.S. cash held in the Special Custody Account shall be treated as a financial asset for purposes of
the UCC to the extent the same may be applicable, and Custodian shall elect to hold such Collateral that is U.S. cash as a deposit
in its capacity as a “bank” as such term is defined in Section 9-102(a)(8) of the UCC, which deposit account shall
constitute part of, and be maintained in the same manner as, the Special Custody Account. The Fund agrees to instruct Custodian
through Instructions from Fund as to the cash and specific securities which Custodian is to identify on its books and records
as pledged to the Counterparty as Collateral in the Special Custody Account. The Custodian may in its discretion decline to follow
such Instructions if following the Instructions would in Custodian’s sole judgment result in any remaining assets in the
custody account being inadequate to cover any obligations of the Fund to the Custodian. Fund agrees that, if as a result of Custodian’s
declining to follow such Instructions, the Collateral in the Special Custody Account is not equal to or greater than Adequate
Performance Assurance and as a result a Fund Default has occurred, Counterparty may exercise its right and remedies provided hereunder
(including, without limitation, the rights and remedies specified in Section 8 hereof).

 

    

     

    

 

(b)         Provided
that the Letter Agreement regarding Lending Operational Procedures has been agreed to by the Custodian, the Fund and Counterparty,
upon receipt of an Advice from Counterparty, Custodian shall release Collateral identified by Counterparty from the Special Custody
Account to the Fund’s custody account established pursuant to the terms of the Custody Agreement (the “Released Collateral”)
for purposes of delivering such Released Collateral to Counterparty pursuant to the Letter Agreement regarding Lending Operational
Procedures by and among the Custodian, the Fund and Counterparty. The Fund hereby directs and authorizes Custodian to make such
release, and any such Advice from Counterparty shall be “Proper Instructions” in accordance with the Custody Agreement.
In the event that there is inadequate Collateral in the Special Custody Account to satisfy such Advice from Counterparty, Custodian
shall notify Counterparty and Fund of the shortfall amount, and other than issuing such notice, Custodian shall have no responsibility
hereunder with respect to such Advice from Counterparty.

 

(c)         The
Fund agrees to provide and at all times maintain Adequate Performance Assurance in the Special Custody Account pursuant to the
terms and conditions of this Agreement. Such Collateral (i) may be released only in accordance with the terms of this Agreement;
and (ii) except as required to be released hereunder to the Counterparty, shall not be made available to the Counterparty or to
any other person claiming through the Counterparty, including creditors of the Counterparty. Custodian will maintain accounts and
records for the Collateral in the Special Custody Account separate from the accounts and records of any other property of the Fund
which may be held by Custodian, subject to the interest therein of the Counterparty as the pledgee thereof in accordance with the
terms of this Agreement. Such security interest in any item of Collateral will terminate at such time as such item of Collateral
is released to the Fund as provided in paragraph 4 hereof.

 

Unless otherwise instructed in writing by
the Fund, all distributions on Collateral received by the Custodian and any proceeds of transfer or other payments with respect
to Collateral in the Special Custody Account, including, but not limited to, interest and dividends, shall not constitute Collateral
and shall be delivered to the Fund’s custody account. As between the Fund and the Counterparty, the Fund agrees to instruct
the Custodian to credit any distribution on Collateral from a corporate action, redemption or issuer call received by the Custodian
to the Special Custody Account as additional Collateral and shall be held in the Special Custody Account as Collateral until released
therefrom or withdrawn in accordance with this Agreement.

 

(d)         The
Fund, the Counterparty and Custodian agree that Collateral will be held for the Counterparty in the Special Custody Account by
Custodian under the terms and conditions of this Agreement and that the Custodian will take such actions with respect to any Collateral
in the Special Custody Account (including, without limitation, the delivery thereof in accordance with paragraph 8) as the Counterparty
shall direct in an Advice from Counterparty, without further consent of the Fund.

 

    

     

    

 

(e)         The
Fund hereby grants a continuing security interest to the Counterparty in the Special Custody Account and all Collateral and other
financial assets credited thereto, from time to time to secure the Fund’s obligations to the Counterparty under the Account
Agreement. Custodian shall have no responsibility for the validity or enforceability of such security interest. For the avoidance
of doubt, assets of the Fund held by Custodian that are not Collateral or are not credited to the Special Custody Account shall
not be subject to the foregoing security interest.

 

(f)          The
Fund hereby represents and warrants that it will not instruct Custodian to sell or deliver out a Foreign Security which has been
segregated as Collateral under this Agreement unless it has first done the following: (i) obtained written consent for the security’s
release from the Counterparty, (ii) forwarded such consent to Custodian, (iii) instructed Custodian in writing to desegregate (or
unpledge) such security, and (iv) instructed Custodian in writing to segregate substitute Collateral. As between the Fund and Custodian,
the Fund agrees that any buy-ins, fees, or penalties assessed in a non-U.S. market in connection with the sale, segregation, or
substitution of Foreign Securities covered by this Agreement shall be solely the responsibility of the Fund, which agrees to indemnify
and hold harmless Custodian from liability or responsibility for such buy-ins, fees, or penalties. The Fund hereby acknowledges
that its instruction to Custodian to segregate any Foreign Security as Collateral signifies the Fund’s acceptance of Country
Risk (as defined in the Custody Agreement) with regard to holding or transacting in such Foreign Security or in segregating such
Foreign Security.

 

The Counterparty hereby acknowledges that
with respect to any Foreign Securities that may be held by (i) Custodian (or its nominee), (ii) a sub-custodian (or its nominee)
within Custodian’s network of sub-custodians (each a “Sub-Custodian”), or (iii) a depository or book-entry system
for the central handling of securities in which Custodian or the Sub-Custodian are participants, there is a risk that local law,
rule, regulation or market practice or the rules of any such Sub-Custodian or depository/book-entry system may be inconsistent
with the application of New York law and the performance of Custodian’s obligations under the UCC. To the extent any such
inconsistency inhibits Custodian’s performance of such obligations, the Counterparty hereby waives such performance. The
parties hereby further acknowledge that Custodian gives no assurance that a security entitlement is created under the UCC at the
Euroclear or Cedelbank level with respect to the Fund’s assets held in Euroclear or Clearstream or their successors.

 

(3)          Custodian
will confirm in writing to the Counterparty and the Fund, within one Business Day, all pledges, releases or substitutions of Collateral
and will supply the Counterparty and the Fund with a monthly statement of Collateral in the Special Custody Account and transactions
in the Special Custody Account during the preceding month. Custodian will also advise the Counterparty and the Fund upon reasonable
request, of the kind and amount of Collateral pledged to each of the Counterparty and the Fund.

 

(4)          Custodian
agrees to release Collateral from the Special Custody Account only upon receipt of an Advice from Counterparty (including for whatever
uses are permissible under the Committed Facility Agreement and Account Agreement, though Custodian shall at no time have responsibility
for determining whether Counterparty is in compliance with those permissible uses). Counterparty agrees, upon request of the Fund,
to provide such an Advice from Counterparty to Custodian with respect to Collateral selected by the Fund directing the release
of such Collateral to the Fund: (i) if said Collateral represents an excess in value of the Collateral necessary to constitute
Adequate Performance Assurance at that time; (ii) against receipt in the Special Custody Account of substitute Collateral having
a value at least equal (with any remaining Collateral) to Adequate Performance Assurance; or (iii) upon termination of the Fund’s
accounts with Counterparty and settlement in full of all transactions therein and any amounts owed to the Counterparty with respect
thereto. It is understood that the Counterparty will be responsible for valuing Collateral; Custodian at no time has any responsibility
for determining whether the value of Collateral is equal in value to Adequate Performance Assurance.

 

    

     

    

 

(5)          The
Fund represents and warrants to the Counterparty that securities pledged to the Counterparty shall be in good deliverable form
(or Custodian shall have the unrestricted power to put such securities into good deliverable form), and that Collateral in the
Special Custody Account will not be subject to any liens or encumbrances (including, to the best of its knowledge, those permitted
by Rule 17f-5 promulgated under the Investment Company Act of 1940, as amended) other than the lien in favor of the Counterparty
contemplated hereby. The Fund shall promptly notify the Counterparty in the event that Collateral in the Special Custody Account
is subject to any levy, lien, charge, claim, court order or other process purporting to affect the Collateral other than in favor
of the Counterparty as contemplated hereby.

 

(6)          Collateral
in the Special Custody Account shall at all times remain the property of the Fund subject only to the extent of the interest and
rights therein of the Counterparty as the pledgee and secured party thereof. Other than liens for safe custody or administration
of Foreign Securities granted to (x) any entity that is incorporated or organized under the laws of a country other than the United
States, (y) a majority-owned direct or indirect subsidiary of a regulated and permitted U.S. bank or bank-holding company (other
than Custodian or its affiliates) or (z) any creditors of any entity referenced in (x) or (y) above (other than Custodian or its
affiliates), (a) Custodian represents that Collateral in the Special Custody Account is not subject to any other lien, charge,
security interest or other right or claim of the Custodian or any person claiming through Custodian, and (b) Custodian hereby waives
any right, charge, security interest, lien or right of set off of any kind which it may have or acquire with respect to the Collateral
in the Special Custody Account. Except for the claims and interests of the Counterparty and the Fund, the Custodian has not, to
the best of its knowledge, received written notice of any claim to, or interest in, the Special Custody Account, any financial
asset credited thereto or any security entitlement in respect thereof. Custodian shall use reasonable efforts to notify the Counterparty
and the Fund as soon as practicable under the circumstances if the office of the general counsel of Custodian, or any senior vice
president or more senior management member of the U.S. Investor Services division of Custodian receives any written notice of levy,
lien, court order or other legal process purporting to affect the Collateral; provided, however, that the Custodian’s failure
to do so shall not give rise to any liability hereunder.

 

(7)          The
Counterparty shall, on each Business Day, compute the aggregate net credit or debit balance under the Account Agreement, and advise
the Fund by 11:00 A.M. New York time of the amount of the net debit or credit, as the case may be. If a net debit balance exists
on such day, the Fund will cause, by the close of business on such day, an amount of Collateral to be deposited in the Special
Custody Account to provide Adequate Performance Assurance related to such net debit balance; provided that, in the event that Counterparty
advises the Fund of such net debit balance after 11:00 A.M., then such amount of Collateral shall be deposited in the Special Custody
Account by the close of business on the following Business Day. Counterparty will charge interest on debit balances in accordance
with Counterparty’s policies as set forth in the Committed Facility Agreement (and to the extent such Committed Facility
Agreement has been terminated or the commitment therein has expired, the Account Agreement) and Counterparty will not pay interest
on credit balances. Balances will be appropriately adjusted when extensions of credit are closed out.

 

    

     

    

 

(8)          The
occurrence of any of the following constitutes a default by the Fund hereunder (a “Fund Default”): (a) a Default (as
defined in the Committed Facility Agreement), (b) an Event of Default (as defined in the Account Agreement), or (c) Fund’s
Insolvency. Upon Counterparty’s determination that a Fund Default has occurred, if Counterparty wishes to declare such default,
Counterparty shall notify the Fund in an Advice from Counterparty of such Fund Default. After transmittal by Counterparty of such
Advice from Counterparty, if such Fund Default is then continuing, Counterparty may thereupon take Default Action or any other
action permitted pursuant to the 40 Act Financing Agreements, including without limitation, the conversion of any convertible securities
or exercise of Fund’s rights in warrants (if any) held in the Account and the Special Custody Account, the buy-in of any
securities of which the Account may be short, and the sale of any or all property or securities in the Account and the Special
Custody Account to the extent necessary to satisfy Fund’s obligations to Counterparty (in which event such Collateral shall
be delivered to Counterparty as directed in an Advice from Counterparty). Any sale of Collateral made hereunder shall be made in
accordance with the provisions of the New York Uniform Commercial Code (including, without limitation section 9-610(b) of the New
York Uniform Commercial Code). Fund shall be liable to Counterparty for any deficiency which may exist after the exercise by Counterparty
of its rights and remedies as aforesaid. Any surplus resulting from the sale of Collateral shall be transmitted to Custodian. Counterparty
shall notify Fund of any deficiency remaining thereafter in an Advice from Counterparty. Any such sale of Collateral held in the
Special Custody Account shall be made only after such Collateral has been withdrawn from the Special Custody Account by Counterparty.

 

(9)          The
Counterparty hereby covenants, for the benefit of the Fund, that the Counterparty will not instruct Custodian pursuant to an Advice
from Counterparty to deliver Collateral free of payment with respect to any sale of Collateral pursuant to paragraph 8 until after
the occurrence of the events set forth in paragraph 8. The foregoing covenant is for the benefit of the Fund only and shall in
no way be deemed to constitute a limitation on Custodian’s obligation to act upon instructions pursuant to an Advice from
Counterparty and Custodian’s obligation to act upon such instructions, which instructions, for the avoidance of doubt, may
include directions to deliver Collateral to Counterparty other than pursuant to paragraph 8 (including for other permissible uses
under the Committed Facility Agreement and Account Agreement). Custodian shall not be required to make any determination as to
whether such delivery is made in accordance with any provisions of this Agreement or any other agreement between the Counterparty
and the Fund.

  

(10)        Reserved.

 

    

     

    

 

(11)        Custodian’s
duties and responsibilities are set forth in this Agreement. Custodian shall act only upon receipt of an Advice from Counterparty
regarding release of Collateral, except as required by applicable law. Custodian shall not be liable or responsible for anything
done, or omitted to be done by it in good faith and in the absence of negligence and may rely and shall be protected in acting
upon any Advice from Counterparty which it reasonably believes to be genuine and authorized. As between the Fund and Custodian,
the terms of the Custody Agreement shall apply with respect to any losses or liabilities of such parties arising out of matters
covered by this Agreement; for the avoidance of doubt, each Advice from Counterparty shall be considered a “Proper Instruction”
under the Custody Agreement and as such is subject to the terms of the Custody Agreement and, in particular, the Fund’s indemnity
of the Custodian thereunder. As between Custodian and Counterparty, Counterparty shall indemnify and hold Custodian harmless from
and against any losses or liabilities (including reasonable legal fees) imposed on or incurred by Custodian subsequent to the taking
of any action, or arising out of any omission, of Custodian in compliance with any Advice from Counterparty, except to the extent
that any such loss or liability (i) results from Custodian’s negligence, fraud, recklessness, willful misconduct or bad faith;
or (ii) represents special, consequential, punitive, exemplary or incidental damages. In matters concerning or relating to this
Agreement, Custodian shall not be liable for the acts or omissions of any of the other parties to this Agreement. In matters concerning
or relating to this Agreement, Custodian shall not be responsible for compliance with any statute or regulation regarding the establishment
or maintenance of margin credit, including but not limited to Regulations T or X of the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency or the U.S. Securities and Exchange Commission. Custodian shall have no duty
to require any cash or securities to be delivered to it or to determine that the amount and form of assets deposited in the Special
Custody Account comply with any applicable requirements. Custodian may hold the securities in the Special Custody Account in bearer,
nominee, book-entry, or other form and in any depository or clearing corporation (including omnibus accounts), with or without
indicating that the securities are held hereunder; provided, however, that all securities held in the Special Custody Account shall
be identified on Custodian’s records as subject to this Agreement and shall be in a form that permits transfer at the direction
of Counterparty without additional authorization or consent of the Fund.

 

Neither Counterparty nor Custodian shall be responsible or liable
for any losses resulting from nationalization, expropriation, devaluation, seizure, or similar action by any governmental authority,
de facto or de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority of currency restrictions,
exchange controls, levies or other charges affecting the property in the Special Custody Account; acts of war, terrorism, insurrection
or revolution; or acts of God; or any other similar event beyond the control of such party or its agents (any such event, a “Force
Majeure Event”); provided, that, as between the Fund and Counterparty, should any Force Majeure Event occur with respect
to Custodian and such event (a) prevents or would prevent Custodian from releasing the Collateral to Counterparty upon an Advice
from Counterparty directing such release or (b) would inhibit Counterparty’s ability to monitor the amount of Collateral
in the Special Custody Account (each of (a) and (b), a “Custodian Failure Event”), then during the period from the
day on which the Force Majeure Event begins (the “Force Majeure Event Day”) up to the day on which the relevant Custodian
Failure Event is no longer occurring, for purposes of determining whether Fund has met its obligation to provide and maintain Adequate
Performance Assurance under this Agreement or to meet the Collateral Requirements (as defined in the Committed Facility Agreement),
Counterparty shall take account only of the Collateral that was in the Special Custody Account on the Business Day immediately
prior to the Force Majeure Event Day. In no event shall any party to this Agreement be liable for indirect, special, or consequential
damages even if advised of the possibility or likelihood thereof. This paragraph shall survive the termination of this Agreement.

 

(12)        The
Fund hereby agrees to pay and reimburse Custodian for any advances, costs, expenses (including, without limitation, reasonable
attorney’s fees and costs) and disbursements that may be paid or incurred by Custodian in connection with performing its
duties or responsibilities under this Agreement or arrangements contemplated hereby, but only to the extent that the Fund has not
paid and will not pay the Custodian for such advances, costs, expenses (including, without limitation, reasonable attorney’s
fees and costs) and disbursements pursuant to the Custody Agreement.

 

    

     

    

 

(13)         The
Counterparty shall not be liable for any losses, costs, damages, liabilities or expenses suffered or incurred by the Fund as a
result of any transaction executed hereunder, or any other action taken or not taken by the Counterparty hereunder for the Fund’s
account at Fund’s direction or otherwise, except to the extent that such loss, cost, damage, liability or expense is the
result of the Counterparty’s gross negligence, willful misconduct or fraud.

 

(14)         No
amendment of this Agreement shall be effective unless in writing and signed by an authorized officer of each of the Counterparty,
the Fund and Custodian.

 

(15)         Written
communications hereunder, other than an Advice from Counterparty,

 

shall be sent by facsimile-sending device or telegraphed when
required herein, hand delivered or mailed first class postage prepaid, except that written notice of termination shall be sent
by certified mail, in any such case addressed:

 

	 	(a)	if to Custodian, to:	State Street Bank and Trust
Company

100
Summer Street, Floor 5

Boston, MA 02206

Attention: James Meagher, Managing Director

Facsimile No.: 212-651-2393

Telephone No.: 617-662-7310
	 	 	 	 
	 	(b)	if to the Fund, to:	Broomall Funding LLC

c/o FS Investment Corporation IV

201 Rouse Boulevard

Philadelphia, PA 19112

Attn: Chief Financial Officer

Facsimile No.: (215) 222-4649

Telephone No.: (215) 495-1150
	 	 	 	 
	 	(c)	if to the Counterparty, to: 	BNP Paribas Prime Brokerage International, Ltd.

787 Seventh Avenue

New York, NY 10019

Attention:       Alex Bergelson

Fax No.:           201-850-4601 

Phone No.:      212-471-6533
	 	 	 	 
	 	 	 	BNP Paribas

525 Washington Boulevard

Jersey City, NJ  07310

Attn: David Koppel

Tel:  201-850-5391

Fax: 201-850-4618
	 	 	 	 
	 	 	Copies of Custodian’s confirmations,
statements and advices issued pursuant to paragraph 3 should be sent to:
	 	 	 	 
	 	 	 	State Street Bank and Trust Company

801 Pennsylvania Avenue

Kansas City, MO 64105

Attn: Vice President, Mutual Funds

Facsimile No.: 816-871-9451

Telephone No.: 816-871-4000

 

  

    

     

    

 

(16)        Any
of the parties hereto may terminate this Agreement by thirty (30) days’ prior written notice to the other parties hereto;
provided, however, that the status of any Collateral pledged to the Counterparty at the time of such notice shall not be affected
by such termination until the release of such pledge pursuant to the terms of the Account Agreement and any applicable Margin Rules.
Upon termination of this Agreement or the Custody Agreement, (a) all assets of the Fund held in the Special Custody Account shall
be transferred to a successor custodian specified by the Fund and reasonably acceptable to Counterparty in its good faith discretion.

 

(17)        Nothing
in this Agreement prohibits the Counterparty, the Fund or Custodian from entering into similar agreements with others in order
to facilitate options or other derivatives transactions and as contemplated by the Committed Facility Agreement and Account Agreement.

 

(18)        Custodian
has not entered into, and until the termination of this Agreement will not enter into, any agreement with any person (other than
the Counterparty) relating to the Special Custody Account and/or any financial asset credited thereto pursuant to which it has
agreed, or will agree, to comply with entitlement orders of such person.

 

(19)        If
any provision or condition of this Agreement shall be held to be invalid or unenforceable by any court, or regulatory or self-regulatory
agency or body, such invalidity or unenforceability shall attach only to such provision or condition. The validity of the remaining
provisions and conditions shall not be affected thereby and this Agreement shall be carried out as if any such invalid or unenforceable
provision or condition were not contained herein.

 

(20)        All
references herein to times of day shall mean the time in New York, New York, U.S.A.

 

(21)        This
Agreement and its enforcement (including, without limitation, the establishment and maintenance of the Special Custody Account
and all interests, duties and obligations related thereto) shall be governed by the laws of the State of New York without regard
to its conflicts of law rules other than Title 14 of Article 5 of the New York General Obligations Law. This Agreement shall be
binding on the parties and any successor organizations thereof irrespective of any change or changes in personnel thereof. Any
litigation between any of the parties to this Agreement or involving their respective property must be instituted in the United
States District Court for the Southern District of New York or the Supreme Court of the State of New York for the County of New
York. Each party hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection, including any objection
to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such courts. Each party hereby agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Any right to trial by jury with respect to any claim,
action, proceeding or counterclaim or other legal action is hereby waived by all parties to this agreement.

 

    

     

    

 

(22)        This
Agreement may be signed in counterparts, all of which shall constitute but one and the same instrument.

 

(23)        For
the avoidance of doubt, the Fund and Custodian agree that, except for the rights of control in favor of Counterparty agreed to
herein, nothing herein shall amend the terms of the Custody Agreement.

 

(24)        Counterparty
may, upon notice to the Fund and Custodian, assign its rights or any interest under this agreement to any affiliate of Counterparty
(including, without limitation, BNP Paribas Prime Brokerage, Inc.).

 

[Remainder of Page
Intentionally Left Blank]

 

    

     

    

 

IN WITNESS WHEREOF, the duly authorized
representatives of the parties have executed this Agreement as of the date and year first written above.

 

Broomall
funding llc

 

	By: 	/s/ Gerald F. Stahlecker	 
	Name:  Gerald F. Stahlecker	 
	Title:    Executive Vice President	 

  

BNP Paribas Prime
Brokerage INTERNATIONAL, LTD.

 

	By: 	/s/ JP Muir	 
	Name:  JP Muir	 
	Title:    Managing Director	 

 

	By: 	/s/ Jeffrey Lowe	 
	Name:  Jeffery Lowe	 
	Title:    Managing Director	 

   

State Street Bank
and Trust Company

 

	By: 	/s/ James F. Smith	 
	Name:  James F. Smith	 
	Title:    Managing DirectorFS Investment Corporation IV 8-K

 

Exhibit 10.4

 

 

 

 

BROOMALL funding LLC,

as Company

 

and

 

FS INVESTMENT CORPORATION IV,

as Investment Manager

 

INVESTMENT MANAGEMENT AGREEMENT

 

Dated as of March 1, 2017

 

 

 

     

     

    

 

INVESTMENT MANAGEMENT AGREEMENT,
dated as of March 1, 2017 (this “Agreement”), between BROOMALL FUNDING
LLC, a Delaware limited liability company (the “Company”), and FS INVESTMENT CORPORATION IV, a Maryland
corporation, as investment manager (in such capacity, the “Investment Manager”).

 

WHEREAS, the Company desires
to engage the Investment Manager to provide the services described herein, and the Investment Manager desires to provide such services;
and

 

WHEREAS, capitalized terms used
herein that are not otherwise defined herein shall have the respective meanings ascribed thereto in the Committed Facility Agreement
dated as of the date hereof (the “Committed Facility Agreement”), between the Company and BNP Paribas Prime
Brokerage International, Ltd. (“BNPP”) on behalf of itself and as agent for the BNPP Entities (as defined in
Exhibit A of the U.S. PB Agreement).

 

NOW, THEREFORE, in consideration
of the mutual covenants and agreements herein, the parties hereto hereby agree as follows:

 

1.       
Management Services.

 

The Investment Manager will provide
the Company with the following services (in accordance with and subject to the applicable requirements of, and the restrictions
and limitations set forth in the 40 Act Financing Agreements and the Company’s limited liability company agreement):

 

(a) determining the specific investments or other assets to be purchased (or otherwise acquired) or sold by the Company;

 

(b) effecting the purchase (or other acquisition) and sale of investments and all other assets of the Company;

 

(c) subject to the limitations set forth in the 40 Act Financing Agreements, negotiating with underlying obligors of the Company’s
investments (the “Underlying Obligors”) as to proposed amendments and modifications (including, but not limited
to, extensions or releases of collateral) of the documentation evidencing and governing the Company’s investments;

 

(d) making determinations with respect to the Company’s exercise (including but not limited to any waiver) of any rights
(including but not limited to voting rights and rights arising in connection with the bankruptcy or insolvency of an Underlying
Obligor or the consensual or non-judicial restructuring of the debt or equity of an Underlying Obligor) or remedies in connection
with the Company’s investments and participating in the committees (official or otherwise) or other groups formed by creditors
of an Underlying Obligor;

 

(e) monitoring the ratings of the Company’s investments;

 

(f) determining whether each of the Company’s investment is an Eligible Security;

 

     

     

    

 

(g) monitoring the Company’s investments on an ongoing basis and providing to BNPP and the Company or to any other person
designated by the Company all information and data which is generated by, or reasonably accessible to, the Investment Manager and
which is required under the 40 Act Financing Agreements or requested by the Company in connection with the preparation of all reports,
certificates, schedules and other data which the Company is required to prepare and deliver under the 40 Act Financing Agreements,
in the form and containing all information required by the 40 Act Financing Agreements, in sufficient time for the Company, or
the person designated by the Company, to review such data and prepare and deliver to the parties entitled thereto all such reports,
certificates, schedules and other data required by the 40 Act Financing Agreements;

 

(h) managing the Company’s investments within the parameters set forth in the 40 Act Financing Agreements;

 

(i) complying with such other duties and responsibilities as may be expressly required of the Investment Manager by the 40 Act
Financing Agreements; and

 

(j) delivering Borrowing Requests and payment instructions to BNPP and making prepayment specifications referred to in Section
4 of the Committed Facility Agreement.

 

The Company agrees for the benefit
of the Investment Manager and BNPP to follow the lawful instructions and directions of the Investment Manager in connection with
the Investment Manager’s services hereunder.

 

The Investment Manager shall
use reasonable care in rendering its services hereunder, using a degree of skill and attention no less than that which the Investment
Manager exercises with respect to comparable assets that it manages for itself and for others in accordance with its existing practices
and procedures which the Investment Manager reasonably believes to be consistent with those followed by institutional managers
of national standing relating to assets of the nature and character of the Company’s investments, except as expressly provided
otherwise in this Agreement or the 40 Act Financing Agreements. The Investment Manager shall comply with and perform all the duties
and functions that have been specifically delegated to it under this Agreement and the 40 Act Financing Agreements. The Investment
Manager shall not be bound to follow any amendment to the 40 Act Financing Agreements, however, until it has received a copy of
the amendment from the Company or BNPP and, in addition, the Investment Manager shall not be bound by any amendment to the 40 Act
Financing Agreements which adversely affects in any material respects the obligations of the Investment Manager unless the Investment
Manager shall have consented thereto in writing. The Company agrees that it will not permit any amendment to the 40 Act Financing
Agreements that adversely affects in any material respects the duties or liabilities of the Investment Manager to become effective
unless the Investment Manager has been given prior written notice of such amendment and consented thereto in writing. The Investment
Manager shall cause any purchase or sale of any investments or other asset of the Company to be conducted on an arm’s length
basis or on terms that would be obtained in an arm’s length transaction in compliance with Section 2 and Section 8 hereof.

 

To the extent necessary or appropriate
to perform all of the duties to be performed by it hereunder, the Investment Manager shall have the power to negotiate, execute
and deliver all necessary documents and instruments on behalf of the Company with respect to any investment or other asset of the
Company.

 

    2 

     

    

 

The Investment Manager shall
have no obligation to perform any duties other than those specified herein or in the 40 Act Financing Agreements.

 

2.        Brokerage.

 

The Investment Manager shall
use commercially reasonable efforts to obtain the best prices and execution for all orders placed with respect to the investments,
and other assets of the Company, considering all reasonable circumstances. Subject to the objective of obtaining best prices and
execution, the Investment Manager may take into consideration research and other brokerage services furnished to the Investment
Manager or its Affiliates by brokers and dealers which are not Affiliates of the Investment Manager. Such services may be used
by the Investment Manager or its Affiliates in connection with its other advisory activities or investment operations. The Investment
Manager may aggregate sales and purchase orders placed with respect to the investments, and other assets of the Company with similar
orders being made simultaneously for other accounts managed by the Investment Manager or with accounts of the Affiliates of the
Investment Manager, if in the Investment Manager’s sole judgment such aggregation shall result in an overall economic benefit
to the Company taking into consideration the selling or purchase price, brokerage commission and other expenses. In accounting
for such aggregated order price, commission and other expenses shall be averaged on a per position basis.

 

The Company acknowledges that
the determination of any such economic benefit by the Investment Manager is subjective and represents the Investment Manager’s
evaluation at the time that the Company will be benefited by better purchase or sales prices, lower commission expenses and beneficial
timing of transactions or a combination of these and other factors. When any aggregate sales or purchase orders occur, the objective
of the Investment Manager (and any of its Affiliates involved in such transactions) shall be to allocate the executions among the
accounts in an equitable manner.

 

Subject to the Investment Manager’s
execution obligations described herein, the Investment Manager is hereby authorized to effect client cross-transactions where the
Investment Manager causes a transaction to be effected between the Company and another account advised by it or any of its Affiliates;
provided that, if and to the extent required by the Investment Advisers Act of 1940, as amended (the “Advisers
Act”), such authorization is terminable at the Company’s option without penalty, effective upon receipt by the
Investment Manager of written notice from the Company. In addition, the Company hereby consents to, and authorizes the Investment
Manager to enter into agency cross-transactions where it or any of its Affiliates acts as broker for the Company and for the other
party to the transaction, to the extent permitted under applicable law, in which case the Investment Manager or any such Affiliate
will receive commissions from, and have a potentially conflicting division of loyalties and responsibilities regarding, both parties
to the transaction; provided that the Company shall the right to revoke such consent at any time by written notice to the
Investment Manager. With the prior authorization of the Company and in accordance with Section 11(a) of the Securities Exchange
Act of 1934, as amended, and rule 11a2-2(T) thereunder (or any similar rule that may be adopted in the future), the Investment
Manager is authorized to effect transactions for the Company on a national securities exchange of which any of its Affiliates is
a member and retain commissions in connection therewith, and the Investment Manager will use commercially reasonable efforts to
provide the Company with information annually disclosing commissions, if any, retained by the Investment Manager’s Affiliates
in connection with such transactions for the Company’s account.

 

    3 

     

    

 

All purchases and sales of investments,
and other assets of the Company by the Investment Manager on behalf of the Company shall be in accordance with reasonable and customary
business practices and in compliance with applicable laws.

 

3.        The
Representations and Warranties of the Company.

 

The Company represents and warrants
to the Investment Manager that:

 

(a) the Company has been duly organized and is validly existing under the laws of the State of Delaware, has the full power
and authority to own its assets and the assets proposed to be owned by it and to transact the business in which it is presently
engaged and is duly qualified under the laws of each jurisdiction where its ownership or lease of property or the conduct of its
business requires, or the performance of its obligations under this Agreement and the 40 Act Financing Agreements would require,
such qualification, except for failures to be so qualified, authorized or licensed that would not in the aggregate have a material
adverse effect on the business, operations, assets or financial condition of the Company;

 

(b) the Company has full power and authority to execute, deliver and perform this Agreement, the 40 Act Financing Agreements
and all obligations required hereunder and under the 40 Act Financing Agreements, and the performance of all obligations imposed
upon it hereunder and thereunder;

 

(c) this Agreement has been duly authorized, executed and delivered by it and constitutes its valid and binding obligation,
enforceable in accordance with its terms except that the enforceability thereof may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship or other similar laws now or hereafter in effect relating to creditors’ rights
and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);

 

(d) no consent, approval, authorization or order of or declaration or filing with any government, governmental instrumentality
or court or other person is required for the performance by the Company of its duties hereunder, except such as have been duly
made or obtained;

 

(e) neither the execution and delivery of this Agreement nor the fulfillment of the terms hereof conflicts with or results in
a material breach or violation of any of the material terms or provisions of or constitutes a material default under (i) the Company’s
certificate of formation, limited liability company agreement or other constituent documents, (ii) the terms of any material indenture,
contract, lease, mortgage, deed of trust, note, agreement or other evidence of indebtedness or other material agreement, obligation,
condition, covenant or instrument to which the Company is a party or is bound, (iii) any statute applicable to the Company or (iv)
any law, decree, order, rule or regulation applicable to the Company of any court or regulatory, administrative or governmental
agency, body or authority or arbitrator having proper jurisdiction over the Company or its properties, and which would have a material
adverse effect upon the performance by the Company of its duties under this Agreement;

 

    4 

     

    

 

(f) neither the Company nor any of its Affiliates are in violation of any U.S. federal or state securities law or regulation
promulgated thereunder;

 

(g) the Company has not engaged in any transaction that would result in the violation of, or require registration as an “investment
company” under, the Investment Company Act of 1940, as amended (the “Investment Company Act”);

 

(h) the Company is not required to register as an “investment company” under the Investment Company Act; and

 

(i) there is no charge, investigation, action, suit or proceeding before or by any court pending or, to the best knowledge of
the Company, threatened, that, if determined adversely to the Company, would have a material adverse effect upon the performance
by the Company of its duties under, or on the validity or enforceability of, this Agreement or the provisions of the 40 Act Financing
Agreements applicable to the Company thereunder.

 

4.        Representations
and Warranties of the Investment Manager.

 

The Investment Manager represents
and warrants to the Company that:

 

(a) the Investment Manager is duly organized and validly existing under the laws of the State of Delaware and has the full power
and authority to transact the business in which it is presently engaged and is duly qualified under the laws of each jurisdiction
where the conduct of its business requires, or the performance of its obligations under this Agreement and the provisions of the
40 Act Financing Agreements applicable to the Investment Manager would require, such qualification, except for failures to be so
qualified, authorized or licensed which would not in the aggregate have a material adverse effect on the business, operations,
assets or financial condition of the Investment Manager, or on the ability of the Investment Manager to perform its obligations
under, or on the validity or enforceability of, this Agreement and the applicable provisions of the 40 Act Financing Agreements;

 

(b) the Investment Manager has full power and authority to execute and deliver this Agreement and to perform all of its obligations
hereunder and under the 40 Act Financing Agreements applicable to the Investment Manager;

 

(c) this Agreement has been duly authorized, executed and delivered by the Investment Manager and constitutes a valid and binding
agreement of the Investment Manager, enforceable against it in accordance with its terms, except that the enforceability thereof
may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating
to creditors’ rights and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law);

 

(d) neither the Investment Manager nor any of its Affiliates are in violation of any federal or state securities law or regulation
promulgated thereunder or any material listing requirements of any exchange on which it is listed and there is no charge, investigation,
action, suit or proceeding before or by any court, exchange or regulatory agency pending or, to the best knowledge of the Investment
Manager, threatened, that in either case would have a material adverse effect upon the performance by the Investment Manager of
its duties under this Agreement;

 

    5 

     

    

 

(e) neither the execution and delivery of this Agreement, nor the performance of the terms hereof or the provisions of the 40
Act Financing Agreements applicable to the Investment Manager, conflicts with or results in a material breach or violation of any
of the material terms or provisions of, or constitutes a material default under, (i) its articles of incorporation, bylaws or other
constituent document, (ii) the terms of any material indenture, contract, lease, mortgage, deed of trust, note agreement or other
evidence of indebtedness or other material agreement, obligation, condition, covenant or instrument to which the Investment Manager
is a party or is bound, (iii) any statute applicable to the Investment Manager or (iv) any law, decree, order, rule or regulation
applicable to the Investment Manager of any court or regulatory, administrative or governmental agency, body or authority or arbitrator
having proper jurisdiction over the Investment Manager or its properties, and which would have, in the case of any of clauses (ii)
through (iv) of this paragraph (e), a material adverse effect upon the performance by the Investment Manager of its duties under
this Agreement or the provisions of the 40 Act Financing Agreements applicable to the Investment Manager; and

 

(f) no consent, approval, authorization or order of or declaration or filing with any government, governmental instrumentality
or court or other person is required for the performance by it of its duties hereunder, except such as have been duly made or obtained.

 

5.        Expenses.

 

The Investment Manager shall
pay all expenses and costs (including salaries, rent and other overhead) incurred by it in connection with its services under this
Agreement; provided that the Investment Manager shall not be liable for and the Company shall be responsible for the payment
of (i) actual and reasonable expenses and costs of legal advisers (including actual and reasonable expenses and costs associated
with the use of internal legal counsel of the Investment Manager), consultants and other professionals retained by the Company
or by the Investment Manager, on behalf of the Company, in connection with the services provided by the Investment Manager pursuant
to this Agreement and the 40 Act Financing Agreements and (ii) the reasonable cost of asset pricing and asset rating services,
and accounting, programming and data entry services that are retained in connection with services of the Investment Manager under
this Agreement. To the extent that such expenses are incurred in connection with obligations that are also held by the Investment
Manager, the Investment Manager shall allocate the expenses among the accounts in a fair and equitable manner. Any amounts payable
pursuant to this Section 5 shall be reimbursed by the Company to the extent funds are available therefor in accordance with and
subject to the limitations contained in the 40 Act Financing Agreements.

 

6.        Fees.

 

(a) The Company shall pay to the Investment Manager, for services rendered and performance of its obligations under this Agreement
fees which are payable monthly in arrears (each, a “Payment Date”) in an amount equal to 0.35% per annum of
the aggregate market value of all of the Company’s investments, measured as of the determination date immediately preceding
such Payment Date (the “Management Fees”). The Management Fees will be calculated on the basis of a calendar
year consisting of 360 days and the actual number of days elapsed.

 

    6 

     

    

 

(b) The Investment Manager may, in its sole discretion, defer all or any portion of the Management Fees. Such deferred amounts
will become payable on the next Payment Date in the same manner and priority as their original characterization would have required
unless deferred again.

 

(c) If this Agreement is terminated pursuant to Section 11 hereof or otherwise, the Management Fees calculated as provided
in Section 6(a) hereof shall be prorated for any partial periods between Payment Dates during which this Agreement was in
effect and shall be due and payable, along with any deferred Management Fees, on the first Payment Date following the effective
date of such termination.

 

(d) The Investment Manager hereby agrees not to cause the filing of a petition in bankruptcy against the Company for any reason
whatsoever.

 

7.        Non-Exclusivity.

 

The services of the Investment
Manager to the Company are not to be deemed exclusive, and the Investment Manager shall be free to render asset management or management
services to other persons (including Affiliates, investment companies and clients having objectives similar to those of the Company).
It is understood and agreed that the officers and directors of the Investment Manager may engage in any other business activity
or render services to any other person or serve as partners, officers or directors of any other firm or corporation. Notwithstanding
the foregoing, it is understood and agreed that the Investment Manager will at no time render any services to, or in any way participate
in the organization or operation of, any investment company or other entity if such actions would require the Company to register
as an “investment company” under the Investment Company Act. Subject to Sections 2 and 9 hereof, it is understood and
agreed that information or advice received by the Investment Manager and officers or directors of the Investment Manager hereunder
shall be used by such organization or such persons to the extent permitted by applicable law.

 

8.        Conflicts
of Interest.

 

The Investment Manager may, subject
to applicable legal requirements and any restrictions or limitations contained in the 40 Act Financing Agreements, direct the Company
(i) to acquire any investments for the Company from the Investment Manager or any of its Affiliates as principal or (ii) to sell
any investments for the Company to the Investment Manager or any of its Affiliates as principal; provided that each such acquisition or sale is conducted on terms no less favorable to the Company than would be obtained in an arm’s
length transaction with a non-affiliate.

 

    7 

     

    

 

Notwithstanding the provisions
of the preceding paragraph, various potential and actual conflicts of interest may arise from the overall investment activity of
the Investment Manager and its Affiliates. The Investment Manager, its Affiliates and their respective clients may invest in obligations
that would be appropriate for inclusion in the Company’s assets. Such investments may be different from those made on behalf
of the Company. The Investment Manager, its Affiliates and the clients of the Investment Manager or its Affiliates may invest in
obligations that are senior to, or have interests different from or adverse to, the assets of the Company. The Investment Manager
may serve as investment manager for, invest in, or be affiliated with, other entities organized to issue collateralized debt obligations
secured by loans, high-yield debt securities or other debt obligations. The Investment Manager may at certain times be simultaneously
seeking to purchase or sell investments for the Company and any similar entity for which it serves as investment manager in the
future, or for its clients and Affiliates. Furthermore, the Investment Manager and/or its Affiliates may make an investment on
their behalf or on behalf of any account that they manage or advise without offering the investment opportunity or making an investment
on behalf of the Company.

 

The Company hereby acknowledges
the various potential and actual conflicts of interest that may exist with respect to the Investment Manager; provided that nothing in this Section 8 shall be construed as altering the duties of the Investment Manager as set forth in this Agreement,
the 40 Act Financing Agreements or the requirements of any law, rule, or regulation applicable to the Investment Manager.

 

9.        Records;
Confidentiality.

 

The Investment Manager shall
maintain appropriate books of account and records relating to services performed hereunder, and such books of account and records
shall be accessible for inspection by a representative of the Company and independent accountants appointed by the Company at a
mutually agreed time during normal business hours and upon not less than three (3) Business Days’ prior notice.

 

The Investment Manager shall,
and shall cause its Affiliates to, keep confidential any and all information obtained in connection with the services rendered
hereunder and shall not disclose any such information to non affiliated third parties except (i) with the prior written consent
of the Company, (ii) as required by law, regulation, court order or the rules or regulations of any self regulating organization,
body or official having jurisdiction over the Investment Manager, (iii) to its professional advisors, (iv) such information as
shall have been publicly disclosed other than in violation of this Agreement, (v) the identification of the Company as a client
of the Investment Manager, (vi) information related to the performance of the Investment Manager, (vii) information furnished
in connection with any successor investment manager or assignee, or any agent that has been assigned duties in accordance with
this Agreement or (viii) such information that was or is obtained by the Investment Manager on a non-confidential basis; provided that the Investment Manager does not know or have reason to know, after due inquiry, of any breach by such source of any confidentiality
obligations with respect thereto. For purposes of this Section 9, BNPP shall in no event be considered a “non affiliated
third party,” and the Investment Manager may disclose any of the aforementioned information to BNPP insofar as such information
relates to the Company’s investments under the 40 Act Financing Agreements.

 

10.       Term.

 

This Agreement shall become effective
on the date hereof and shall continue unless terminated as hereinafter provided.

 

    8 

     

    

 

11.       Termination.

 

(a) This
Agreement may be terminated, and the Investment Manager may be removed, without payment to the Investment Manager of any penalty,
for cause upon prior written notice by the Company; provided that such
notice may be waived by the Investment Manager. For this purpose, “cause” will mean the occurrence of any of the following
events or circumstances:

 

(i)       the
Investment Manager’s breach, in any respect, of any provision of this Agreement or the 40 Act Financing Agreements applicable
to it (except for any breach that has not had, and could not reasonably be expected to have, a material adverse effect on the Company)
and the Investment Manager’s failure to cure such breach within 30 days of its becoming aware of, or receiving notice of,
the occurrence of such breach;

 

(ii)       the
Investment Manager’s intentional breach of (a) any provision of this Agreement or the 40 Act Financing Agreements applicable
to it relating to the Investment Manager’s or the Company’s obligation to cause the Company’s investments to
comply with the conditions for sale of an investment by the Company or (b) any other material provision of this Agreement or the
40 Act Financing Agreements applicable to it, and the Investment Manager’s failure to cure such breach within 15 days of
the occurrence of such breach;

 

(iii)       the
failure of any representation, warranty, certification or statement made or delivered by the Investment Manager in or pursuant
to this Agreement or the 40 Act Financing Agreements to be correct in any material respect when made which failure (a) could reasonably
be expected to have a material adverse effect on BNPP and (b) is not corrected by the Investment Manager within 15 days of its
receipt of notice from the Company or BNPP of such failure;

 

(iv)       the
Investment Manager (a) is dissolved (other than pursuant to a consolidation, amalgamation or merger), (b) files, or consents by
answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law
of any jurisdiction, (c) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally
to pay its debts as they become due, (d) makes a general assignment, arrangement or composition with or for the benefit of its
creditors, (e) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property or (f) is adjudicated as insolvent or bankrupt, or a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the Investment Manager, or appointing a receiver, liquidator,
assignee, or sequestrator (or other similar official) of the Investment Manager or of any substantial part of its property, and
the continuance of any such decree or order unstayed and in effect for a period of 15 consecutive days;

 

    9 

     

    

 

(v)       the
occurrence of an Event of Default under the 40 Act Financing Agreements that results from any breach by the Investment Manager
of its duties under the 40 Act Financing Agreements or this Agreement; or

 

(vi)       the
occurrence of an act by the Investment Manager that constitutes fraud or criminal activity in the performance of its obligations
under this Agreement, or the Investment Manager being indicted for a criminal offense materially related to its business of providing
asset management services.

 

(b) The
Investment Manager shall have the right to terminate this Agreement only upon 90 days prior written notice to the Company and this
Agreement shall terminate automatically in the event of its assignment by the Investment Manager.

 

(c) This
Agreement shall be automatically terminated in the event that the Company determines in good faith that the Company or the Company’s
asset portfolio has become required to be registered under the provisions of the Investment Company Act.

 

(d) Within
30 days of the resignation or removal of the Investment Manager, the Company may appoint a successor investment manager that is
(i) an Affiliate of Investment Manager or (ii) reasonably acceptable to BNPP. No such resignation or removal will be effective
until the date as of which a successor investment manager has assumed in writing the Investment Manager’s duties and obligations
as specified herein.

 

12.       Action
Upon Termination.

 

(a) Upon the effective termination of this Agreement, the Investment Manager shall as soon as practicable:

 

(i)       deliver
to the Company all property and documents of the Company or otherwise relating to the Company’s assets then in the custody
of the Investment Manager; and

 

(ii)       deliver
an account with respect to the books and records to the successor investment manager appointed pursuant to Section 11(d).

 

Notwithstanding such termination,
the Investment Manager shall remain liable to the extent set forth herein (but subject to Section 13 hereof) for its acts or omissions
hereunder arising prior to termination and for any expenses, losses, damages, liabilities, demands, charges and claims (including
reasonable attorney’s fees) in respect of or arising out of a breach of the representations and warranties made by the Investment
Manager in Section 4 hereof or from any failure of the Investment Manager to comply with the provisions of this Section 12.

 

(b) The Investment Manager agrees that, notwithstanding any termination, it shall reasonably cooperate in any suit, action or
proceeding relating to this Agreement (each, a “Proceeding”) arising in connection with this Agreement, the
40 Act Financing Agreements or any of the Company’s assets (excluding any such Proceeding in which claims are asserted against
the Investment Manager or any Affiliate of the Investment Manager) so long as the Investment Manager shall have been offered reasonable
security, indemnity or other provisions against the cost, expenses and liabilities that might be incurred in connection therewith
and a reasonable per diem fee.

 

    10 

     

    

 

13.       Liability
of Investment Manager; Delegation.

 

(a) The
Investment Manager assumes no responsibility under this Agreement other than to render the services called for hereunder and
under the terms of the 40 Act Financing Agreements made applicable to it pursuant to the terms of this Agreement. The
Investment Manager shall not be responsible for any action of the Company in declining to follow any advice, recommendation
or direction of the Investment Manager. Unless otherwise agreed in writing, the Investment Manager shall have no liability to
BNPP or other Company’s creditors for any error of judgment, mistake of law, or for any loss arising out of any
investment, or for any other act or omission in the performance of its obligations to the Company except for liability to
which it would be subject by reason of willful misfeasance, bad faith, gross negligence in performance, or reckless
disregard, of its obligations hereunder. The Investment Manager may delegate to an agent selected with reasonable care, which
shall include any person that is party to a sub-advisory agreement with the Investment Manager as of the date hereof, any or
all duties (other than its asset selection or trade execution duties) assigned to the Investment Manager hereunder; provided that no such delegation by the Investment Manager of any of its duties hereunder shall relieve the Investment Manager of
any of its duties hereunder nor relieve the Investment Manager of any liability with respect to the performance of such
duties. For the avoidance of doubt, asset selection and trade execution duties shall include the services described in
Section 1(a) hereof.

 

Notwithstanding the above and
Section 17, the Investment Manager shall be permitted to assign any or all of its rights and delegate any or all of its obligations
to (i) an Affiliate or (ii) any other entity reasonably acceptable to BNPP that (x) will professionally and competently perform
duties similar to those imposed upon the Investment Manager under this Agreement and (y) is legally qualified and has the capacity
to act as the Investment Manager under this Agreement. The Investment Manager shall not be liable for any consequential damages
hereunder.

 

(b) The Company shall reimburse, indemnify and hold harmless the directors, trustees, officers and employees of the Investment
Manager and any of its Affiliates from any and all actual and reasonable out-of-pocket expenses, losses, damages, liabilities,
demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees and expenses), as are incurred
in investigating, preparing, pursuing or defending any claim, action, proceeding or investigation with respect to any pending or
threatened litigation caused by, or arising out of or in connection with, any acts or omissions of the Investment Manager, its
directors, trustees, officers, stockholders, agents and employees made in good faith and in the performance of the Investment Manager’s
duties under this Agreement or the 40 Act Financing Agreements except to the extent resulting from such person’s bad faith,
willful misfeasance, gross negligence or reckless disregard of its duties hereunder or thereunder. The Investment Manager, its
directors, trustees, officers, stockholders, agents and employees may consult with counsel and accountants with respect to the
affairs of the Company and shall be fully protected and justified, to the extent allowed by law, in acting, or failing to act,
if such action or failure to act is taken or made in good faith and is in accordance with the advice or opinion of such counsel
or accountants. Notwithstanding anything contained herein to the contrary, the obligations of the Company under this Section 13(b)
shall be payable from the Company’s assets as part of the Management Fees and are subject to the availability of funds and
to any conditions set forth in the 40 Act Financing Agreements.

 

    11 

     

    

 

(c) The Investment Manager shall reimburse, indemnify and hold harmless the Company, its members, manager, officers, agents
and employees from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including
reasonable attorneys’ fees and expenses), as are incurred in investigating, preparing, pursuing or defending any claim, action,
proceeding or investigation with respect o any pending or threatened litigation caused by, or arising out of or in connection with,
(i) any acts or omissions of the Investment Manager constituting bad faith, willful misconduct, gross negligence or reckless disregard
of its duties under this Agreement or under the 40 Act Financing Agreements and (ii) any breach of the representations and warranties
made by the Investment Manger in Section 4 hereof.

 

14.       Obligations
of Investment Manager.

 

Unless otherwise required by
any provision of the 40 Act Financing Agreements, this Agreement or by applicable law, the Investment Manager shall not intentionally
take any action, which it knows or should know would (a) materially adversely affect the Company for purposes of United States
federal or state law or any other law known to the Investment Manager to be applicable to the Company, (b) require registration
of the Company or the Company’s assets as an “investment company” under the Investment Company Act, (c) not be
permitted under the Company’s operating agreement or certificate of formation, (d) cause the Company to violate the terms
of the 40 Act Financing Agreements, (e) subject the Company to federal, state or other income taxation or (f) adversely affect
the interests of BNPP in any material respect (other than as permitted or required hereunder or under the 40 Act Financing Agreements,
including, without limitation, as may result from the performance of any investment), it being understood that in connection with
the foregoing, the Investment Manager will not be required to make any independent investigation of any facts or laws not otherwise
known to it in connection with its obligations under this Agreement and the 40 Act Financing Agreements or the conduct of its business
generally. The Investment Manager covenants that it shall comply in all material respects with all laws and regulations applicable
to it in connection with the performance of its duties under this Agreement and the 40 Act Financing Agreements. Notwithstanding
anything in this Agreement, the Investment Manager shall not take any discretionary action that would reasonably be expected to
cause an Event of Default under the 40 Act Financing Agreements. The Investment Manager covenants that it shall (i) not hold out
the investments as its assets, (ii) take all action to ensure that the investments are held in the name of the Company or, if held
by an agent of the Company, clearly designate such agent as being the Company’s agent, and (iii) not fail to correct any
known misunderstandings regarding the separate identity of the Company and shall not identify itself as a division or department
of the Company.

 

15.       No
Partnership or Joint Venture.

 

The Company and the Investment
Manager are not partners or joint venturers with each other and nothing herein shall be construed to make them such partners or
joint venturers or impose any liability as such on either of them. The Investment Manager’s relation to the Company shall
be deemed to be that of an independent contractor.

 

    12 

     

    

 

16.       Notices.

 

Any notice under this Agreement
shall be in writing and sent by facsimile or e-mail (in either case, confirmed by telephonic communication), or addressed and delivered
or mailed postage paid to the other party at such address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Company for this purpose shall be:

 

Broomall Funding LLC 

c/o FS Investment Corporation
IV 

201 Rouse Boulevard 

Philadelphia, Pennsylvania 19112 

Attention: Chief Financial Officer 

Telephone: (215) 495-1150 

Facsimile: (215) 222-4649 

Electronic Mail: ted.gallivan@fsinvestments.com

 

The address of the Investment Manager for this
purpose shall be:

 

FS Investment Corporation
IV

201 Rouse Boulevard

Philadelphia, Pennsylvania 19112

Attention: Chief Financial Officer

Telephone: (215) 495-1150

Facsimile: (215) 222-4649

Electronic Mail: ted.gallivan@fsinvestments.com

 

All notices are to be effective in accordance with
Section 12 of Exhibit A of the U.S. PB Agreement.

 

17.       Succession/Assignment.

 

This Agreement shall inure to
the benefit of and be binding upon the successors to the parties hereto. No assignment of this Agreement by the Investment Manager
(including, without limitation, a change in control or management of the Investment Manager which would be deemed an “assignment”
under the Advisers Act) shall be made without the consent of the Company and BNPP.

 

18.       Conflicts
with the 40 Act Financing Agreements

 

Subject to the provisions of
Section 1 hereof pertaining to the binding effect of certain amendments to the 40 Act Financing Agreements on the Investment Manager,
in the event that this Agreement requires any action to be taken with respect to any matter and the 40 Act Financing Agreements
require that a different action be taken with respect of such matter, and such actions are mutually exclusive, the provisions of
the 40 Act Financing Agreements in respect thereof shall control.

 

    13 

     

    

 

19.       Miscellaneous.

 

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to
conflicts of laws principles. With respect to any Proceeding, each party irrevocably (i) submits to the non-exclusive jurisdiction
of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City
and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court,
waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with
respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes
either party from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions
preclude the bringing of Proceedings in any other jurisdiction.

 

(b) THE PARTIES HERETO IRREVOCABLY CONSENT TO THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING
OR DELIVERY OF COPIES OF SUCH PROCESS TO EACH SUCH PARTY AT THE ADDRESS SPECIFIED IN SECTION 16 HEREOF. THE PARTIES HERETO AGREE
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

(c) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(d) No failure on the part of either party hereto to exercise and no delay in exercising, and no course of dealing with respect
to, any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial
exercise of any right, remedy, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall
be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

(e) The captions in 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.

 

(f) In the event any provision of this Agreement shall be held invalid or unenforceable, by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provisions hereof.

 

(g) This Agreement may not be amended or modified or any provision thereof waived except by an instrument in writing signed
by the parties hereto.

 

(h) This Agreement and the 40 Act Financing Agreements contain the entire understanding and agreement between the parties and
supersede all other prior understandings and agreements, whether written or oral, between the parties concerning this subject matter.
The express terms of this Agreement control and supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.

 

    14 

     

    

 

(i)  The Investment Manager consents to, and agrees to perform, the provisions of the 40 Act Financing Agreements applicable
to the Investment Manager.

 

(j)  This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original, but
all such counterparts shall together constitute but one and the same instrument. This Agreement shall become binding when one or
more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the
signatories.

 

(k) Each representation and warranty made or deemed to be made herein or pursuant hereto, and each indemnity provided for hereby,
shall survive the execution and delivery and any termination or assignment of this Agreement or resignation or removal of the Investment
Manager.

 

(l)  The Company hereby acknowledges and accepts all actions that were taken by the Investment Manager and/or recommended to
the Company by the Investment Manager prior to the effective date of this Agreement, including all actions and recommendations
that were related to the anticipated purchase of assets by the Company or that were otherwise consistent with the services to be
provided by the Investment Manager to the Company pursuant to Section 1 of this Agreement prior to the effective date of this Agreement,
in each case, as if this Agreement had been in effect at the time that such actions were taken or such recommendations were made.

 

20.       No
Recourse.

 

The Investment Manager hereby
acknowledges and agrees that the Company’s obligations hereunder will be solely the corporate obligations of the Company,
and the Investment Manager will not have any recourse to any of the directors, trustees, officers, employees, holders of the membership
interest of Company with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with
any transactions contemplated hereby. Recourse in respect of any obligations of the Company hereunder will
be limited to the Company’s assets and on the exhaustion thereof all claims against the Company arising from this
Agreement or any transactions contemplated hereby shall be extinguished. The provisions of this Section 20 shall survive the termination
of this Agreement for any reason whatsoever.

 

[Signature page follows]

 

    15 

     

    

 

IN WITNESS WHEREOF, the parties
hereto have caused this INVESTMENT MANAGEMENT AGREEMENT to be executed by their respective authorized representatives on the date
first above written.

	 	 	 	 
	 	BROOMALL FUNDING LLC	 
	 	 	 	 
	 	By:	/s/ Gerald
    F. Stahlecker	 
	 	Name:
                    Gerald F. Stahlecker 

Title:
Executive Vice President

	 
	 	 	 	 
	 	FS INVESTMENT CORPORATION IV	 
	 	 	 	 
	 	By:	/s/ Gerald
    F. Stahlecker	 
	 	Name:
                    Gerald F. Stahlecker

Title:
Executive Vice President

	 

 

[Signature Page to Investment Management Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}]]