The Company paid $1,793 and $1,215 in subordinated incentive fees on incomeadministrative services expenses to FSFS/EIG Advisor, or FS/EIG Advisor. During the year ended December 31, 2018, the Company did not pay any amounts in subordinated incentive fees on income to FS Advisor or FS/EIG Advisor. During the year ended December 31, 2017, $10,499 in subordinated incentive fees on income were applied to offset the liability of FS Investments under the expense reimbursement agreement.
(3)Duringits affiliates, during the six months ended June 30, 2020 and 2019, respectively. During the years ended December 31, 2019 and 2018, $1,423$2,914 and $1,307,$3,173, respectively, of the accrued administrative services expenses related to the allocation of costs of administrative personnel for services rendered to the Company by FS Advisor andand/or FS/EIG Advisor and the remainder related to other reimbursable expenses. The Company paid $1,215$3,662 and $1,236 in administrative services expenses to FS Advisor and FS/EIG Advisor during the six months ended June 30, 2019 and 2018, respectively. During the years ended December 31, 2018 and 2017, $3,173 and $2,638, respectively, of the accrued administrative services expenses related to the allocation of costs of administrative personnel for services rendered to the Company by FS Advisor and the remainder related to other reimbursable expenses. The Company paid $3,580, and $3,945,
respectively, in administrative services expenses to FS Advisor andand/or FS/EIG Advisor, or its affiliates, during the years ended December 31, 20182019 and 2017.
(4)During the year ended December 31, 2017, the Company accrued $2,858 for expense recoupments payable to FS Advisor under the expense reimbursement agreement. During the year ended December 31, 2017, $2,858 of expense recoupments were paid to FS Advisor.
2018.As a BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price is the only negotiated term. In an order dated June 4, 2013 (the
"Order"“Order”), the SEC granted exemptive relief permitting the Company, subject to the satisfaction of certain conditions, to co-invest in certain privately negotiated investment transactions with certain affiliates of FS Advisor, including FS KKR
CaptialCapital Corp.
, FS Investment Corporation II, FS Investment Corporation III, and FS
Investment Corporation IV.KKR Capital Corp. II, or collectively the Company’s co-investment affiliates. Effective April 9, 2018 (the
"JV“JV Effective
Date"Date”), and in connection with the transition of advisory services to a joint advisory relationship with EIG, the
Company'sCompany’s board of trustees has authorized and directed that the Company (i) withdraw from the Order, except with respect to any transaction in which the Company participated in reliance on the Order prior to the JV Effective Date, and (ii) rely on an exemptive relief order dated April 10, 2018, granted to certain other funds and accounts managed or previously managed by EIG or its affiliates which
would permitpermits the Company to participate in co-investment transactions with certain other EIG advised funds
or accounts (the
"EIG Order"“EIG Order”).
The Company believes that the ability to participate in co-investment transactions with other funds managed by EIG may permit it to allocate a higher percentage of the Company's portfolio to secured, directly negotiated investments that span the upstream, midstream, power/renewables, and infrastructure sectors.Pursuant to an expense support and conditional reimbursement agreement, amended and restated as of May 16, 2013, or, the expense reimbursement agreement, FS Investments agreed to reimburse the Company for expenses in an amount that is sufficient to ensure that no portion of the
Company'sCompany’s distributions to shareholders will be paid from its offering proceeds or borrowings.
Under the expense reimbursement agreement, FS Investments agreed to reimburse the Company quarterly for expenses in an amount equal to the difference between the
Company'sCompany’s cumulative distributions paid to its shareholders in each quarter, less the sum of the
Company'sCompany’s net investment company taxable income, net capital gains and dividends and other distributions paid to the Company on account of preferred and common equity investments in portfolio companies (to the extent such amounts are not included in net investment company taxable income or net capital gains) in each quarter.
Pursuant to the expense reimbursement agreement, the Company has a conditional obligation to reimburse FS Investments for any amounts funded by FS Investments under such agreement if (and only to the extent that), during any fiscal quarter occurring within three years of the date on which FS Investments funded such amount, the sum of the
Company'sCompany’s net investment company taxable income, net capital gains and the amount of any dividends and other distributions paid to the Company on account of preferred and common equity investments in portfolio companies (to the extent not included in net investment company taxable income or net capital gains) exceeds the distributions paid by the Company to its shareholders; provided, however, that (i) the Company will only reimburse FS Investments for expense support payments made by FS Investments with respect to any calendar quarter beginning on or after July 1, 2013 to the extent that the payment of such reimbursement (together with any other reimbursement paid during such fiscal year) does not cause
"other“other operating
expenses"expenses” (as defined below) (on an annualized basis and net of any expense support payments received by the Company during such fiscal year) to exceed the lesser of
(A) 1.75% of the Company'sCompany’s average net assets attributable to its common shares for the fiscal year-to-date period after taking such payments into account and (B) the percentage of the Company'sCompany’s average net assets attributable to its common shares represented by "other“other operating expenses"expenses” during the fiscal year in which such expense support payment from FS Investments was made (provided, however, that this clause (B) shall not apply to any reimbursement payment which relates to an expense support payment from FS Investments made during the same fiscal year) and (ii) the Company will not reimburse FS Investments for expense support payments made by FS Investments if the aggregate amount of distributions per share declared by the Company in such
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