Exhibit 10.2

  

AMENDMENT NO. 2 TO THE CUSTODY AGREEMENT

 

This Amendment No. 2 (this “Amendment”) to the Custody Agreement, dated as of
August 13, 2012, is made and entered into as of July 24, 2015 by and among
Business Development Corporation of America, a Maryland corporation (the
“Company”) and U.S. Bank National Association, as custodian, a national banking
association organized and existing under the laws of the United States of
America (the “Custodian”).

 

RECITALS

 

WHEREAS, the Company and the Custodian are parties to the Custody Agreement,
dated as of August 13, 2012 (the “Original Agreement”), as amended by the
Amendment No. 1 to the Custody Agreement dated as of July __, 2015 (the
“Amendment No. 1” and together with the Original Agreement, the “Agreement”);
and

 

WHEREAS, the Company desires that the Custodian hold certain foreign assets and
has requested that the Custodian agree to amend the Agreement as set forth in
greater detail below.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which hereby are acknowledged, the Company and the Custodian for themselves
and their respective successors and permitted assigns, hereby agree as follows:

 

1. Amended Definitions. The following definitions in Section 1 are hereby
amended and replaced in their entirety with the following:

  

(i)““Business Day” means a day on which the Custodian or the relevant
sub-custodian, including a Foreign Sub-custodian, is open for business in the
market or country in which a transaction is to take place.”

  

(ii)““Loan” means any commercial loan, or participation therein, made by a bank
or other financial institution that by its terms provides for payments of
principal and/or interest, including discount obligations and payment- in-kind
obligations, acquired by the Company from time to time.”

  

 

2. New Definitions. The following definitions are hereby added to the Agreement
in its respective alphabetical order:

 

(i)““Foreign Intermediary” means a Foreign Sub-custodian and Eligible Securities
Depository.”

 

(ii)““Foreign Sub-custodian” means and includes (i) any branch of a “U.S. Bank,”
as that term is defined in Rule 17f-5 under the 1940 Act, (ii) any “Eligible
Foreign Custodian,” as that term is defined in Rule 17f-5 under the 1940 Act,
having a contract with the Custodian in accordance with Section 6.6, which the
Custodian has determined will provide reasonable care of assets of the Company
based on the standards specified in Section 6.7 below.”

 

 

 

 

(iii)““Foreign Securities” means Securities for which the primary market is
outside the United States.”

  

3.Section 3.5. Section 3.5 of the Agreement is hereby amended by deleting the
provision in its entirety and replacing it with the following:

  

“3.5 Registration of Securities. Securities held by the Custodian, its agents or
its sub-custodian (other than bearer securities, securities held in a Securities
System or Securities that are Noteless Loans or Participations) shall be
registered in the name of the Company or its nominee; or, at the option of the
Custodian, in the name of the Custodian or in the name of any nominee of the
Custodian, or in the name of its agents or its sub-custodian or their nominees;
or if directed by the Company by Proper Instruction, may be maintained in Street
Name. The Custodian, its agents and its sub-custodian shall not be obligated to
accept Securities on behalf of the Company under the terms of this Agreement
unless such Securities are in Street Name or other good deliverable form and in
U.S. denomination. For avoidance of doubt, the Custodian shall not be obligated
to hold any Securities delivered to it that the Custodian deems (in its sole
discretion) is required to be held by a Foreign Subcustodian or Foreign
Intermediary.”

 

4.Section 3.7. Section 3.7 of the Agreement is hereby amended by deleting the
provision in its entirety and replacing it with the following:

 

“3.7 Foreign Exchange

  

(a)Upon the receipt of Proper Instructions, the Custodian, its agents or its
sub-custodian may (but shall not be obligated to) enter into all types of
contracts for foreign exchange on behalf of the Company, upon terms acceptable
to the Custodian and the Company (in each case at the Company’s expense),
including transactions entered into with the Custodian, its sub-custodian or any
affiliates of the Custodian or the sub-custodian. The Custodian shall have no
liability for any losses incurred in or resulting from the rates obtained in
such foreign exchange transactions; and absent specific Proper Instructions, the
Custodian shall not be deemed to have any duty to carry out any foreign exchange
on behalf of the Company. The Custodian shall be entitled at all times to comply
with any legal or regulatory requirements applicable to currency or foreign
exchange transactions.

  

(b)The Company acknowledges that the Custodian, any sub-custodian or any
affiliates of the Custodian or any sub-custodian, involved in any such foreign
exchange transactions may make a margin or generate banking income from foreign
exchange transactions entered into pursuant to this Section for which they shall
not be required to account to the Company.”

 

5.Section 3.10. Section 3.10 of the Agreement is hereby amended by deleting the
provision in its entirety and replacing it with the following:

 

“3.10 Proxies. The Custodian will, with respect to the Securities or Foreign
Securities held hereunder, use reasonable efforts to cause to be promptly
executed by the registered holder of such Securities proxies received by the
Custodian from its agents or its sub-custodian or from issuers of the Securities
or Foreign Securities being held for the Company, without indication of the
manner in which such proxies are to be voted, and upon receipt of Proper
Instructions shall promptly deliver such proxies, proxy soliciting materials and
notices relating to such Securities or Foreign Securities. In the absence of
such Proper Instructions, or in the event that such Proper Instructions are not
received in a timely fashion, the Custodian shall be under no duty to act with
regard to such proxies.”

 

 

 

 

6.Section 3.11. Section 3.11 of the Agreement is hereby amended by deleting the
provision in its entirety and replacing it with following:

 

“3.11 Communications Relating to Securities and Foreign Securities. The
Custodian shall transmit promptly to the Company all written information
(including pendency of calls and maturities of Securities and expirations of
rights in connection therewith) received by the Custodian, from its agents or
its sub-custodian or from issuers of the Securities or Foreign Securities being
held for the Company. The Custodian shall have no obligation or duty to exercise
any right or power, or otherwise to preserve rights, in or under any Securities
or Foreign Securities unless and except to the extent it has received a timely
Proper Instruction from the Company in accordance with the next sentence. The
Custodian will not be liable for any untimely exercise of any right or power in
connection with Securities or Foreign Securities at any time held by the
Custodian, its agents or sub-custodian unless:

 

(i) the Custodian has received Proper Instructions with regard to the exercise
of any such right or power; and

 

(ii) the Custodian, or its agents or sub-custodian are in actual possession of
such Securities or Foreign Securities,

 

in each case, at least three (3) Business Days prior to the date on which such
right or power is to be exercised. It will be the responsibility of the Company
to notify the Custodian of the Person to whom such communications must be
forwarded under this Section.”

  

 

7.Section 6. Section 6 of the Agreement is hereby amended by deleting the
section in its entirety and replacing it with the following:

 

“6. SECURITIES HELD OUTSIDE OF THE UNITED STATES

 

6.1 Appointment of Foreign Sub-custodian. The Company hereby authorizes and
instructs the Custodian in its sole discretion to employ one or more Foreign
Sub-custodians to act as Eligible Securities Depositories or as sub-custodian to
hold the Securities and other assets of the Company maintained outside the
United States, subject to the Company’s approval in accordance with this
Section. If the Custodian wishes to appoint a Foreign Sub-custodian to hold
property of the Company subject to this Agreement, it will so notify the Company
and provide it with information reasonably necessary to determine any such new
Foreign Sub-custodian’s eligibility under Rule 17f-5 under the 1940 Act,
including a copy of the proposed agreement with such Foreign Sub-custodian. The
Company shall at the meeting of its board of directors next following receipt of
such notice and information give a written approval or disapproval of the
proposed action.

 

 

 

 

6.2 Assets to be Held. The Custodian shall limit the Securities and other assets
maintained in the custody of the Foreign Sub-custodian to: (a) Foreign
Securities and (b) cash and cash equivalents in such amounts as the Company
(through Proper Instructions) may determine to be reasonably necessary to effect
the Company’s transactions in such investments.

 

6.3 Omnibus Accounts. The Custodian may hold Foreign Securities and related
Proceeds with one or more Foreign Sub-custodians or Eligible Securities
Depositories in each case in a single account with such Sub-custodian or
Securities Depository that is identified as belonging to the Custodian for the
benefit of its customers; provided however, that the records of the Custodian
with respect to Securities and related Proceeds which are property of the
Company maintained in such account(s) shall identify by book-entry those
Securities and other property as belonging to the Company

 

6.4 Reports Concerning Foreign Sub-custodian. The Custodian will supply to the
Company, upon request from time to time, statements in respect of the Securities
held by Foreign Sub-custodians or Eligible Securities Depositories, including an
identification of the Foreign Sub-custodians and Eligible Securities
Depositories having physical possession of the Foreign Securities.

 

6.5 Transactions in Foreign Custody Account. Notwithstanding any provision of
this Agreement to the contrary, settlement and payment for Securities received
by a Foreign Intermediary for the account of the Company may be effected in
accordance with the customary established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including delivering securities to the purchaser thereof or
to a dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such securities from
such purchaser or dealer.

 

6.6 Foreign Sub-custodian. Each contract or agreement pursuant to which the
Custodian employs a Foreign Sub-custodian shall include provisions that provide:
(i) for indemnification or insurance arrangements (or any combination of the
foregoing) such that the Company will be adequately protected against the risk
of loss of assets held in accordance with such contract; (ii) that the Company’s
assets will not be subject to any right, charge, security interest, lien or
claim of any kind in favor of the Sub-custodian or its creditors (except a claim
of payment for their safe custody or administration) or, in the case of cash
deposits, liens or rights in favor of creditors of the Sub-custodian arising
under bankruptcy, insolvency, or similar laws; (iii) that beneficial ownership
for the Company’s assets will be freely transferable without the payment of
money or value other than for safe custody or administration; (iv) that adequate
records will be maintained identifying the assets as belonging to the Company or
as being held by a third party for the benefit of the Company; (v) that the
Company’s independent public accountants will be given access to those records
or confirmation of the contents of those records; and (vi) that the Company will
receive periodic reports with respect to the safekeeping of the Company’s
assets, including notification of any transfer to or from a Company’s account or
a third party account containing assets held for the benefit of the Company.
Such contract may contain, in lieu of any or all of the provisions specified
above, such other provisions that the Custodian determines will provide, in
their entirety, the same or a greater level of care and protection for Company
assets as the specified provisions, in their entirety.

 

 

 

 

6.7 Custodian’s Responsibility for Foreign Sub-custodian.

 

(a) With respect to its responsibilities under this Section 6, the Custodian
agrees to exercise reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of property of the Company would
exercise. The Custodian further agrees that the Foreign Securities will be
subject to reasonable care, based on the standards applicable to Custodian in
the relevant market, if maintained with each Foreign Sub-custodian, after
considering all factors relevant to the safekeeping of such assets, including:
(i) the Foreign Sub-custodian’s practices, procedures, and internal controls,
including the physical protections available for certificated securities (if
applicable), the method of keeping custodial records, and the security and data
protection practices; (ii) whether the Foreign Sub-custodian has the requisite
financial strength to provide reasonable care for Company assets; (iii) the
Foreign Sub-custodian’s general reputation and standing and, in the case of
Eligible Securities Depository, the Eligible Securities Depository’s operating
history and number of participants; and (iv) whether the Company will have
jurisdiction over and be able to enforce judgments against the Foreign
Sub-custodian, such as by virtue of the existence of any offices of the Foreign
Sub-custodian in the United States or the Sub-custodian’s consent to service of
process in the United States.

 

(b) At the end of each calendar quarter or at such other times as the Company’s
board of directors deems reasonable and appropriate based on the circumstances
of the Company’s foreign custody arrangements, the Custodian shall provide
written reports notifying the board of directors of the Company as to of the
placement of the Foreign Securities and cash of the Company with a particular
Foreign Sub-custodian and of any material changes in the Company’s foreign
custody arrangements. The Custodian shall promptly take such steps as may be
required to withdraw assets of the Company from any Foreign Sub-custodian that
has ceased to meet the requirements of Rule 17f-5 under the 1940 Act.

 

(c) The Custodian has established a system to monitor the appropriateness of
maintaining the Company’s assets with a particular Foreign Sub-custodian and the
performance of the contract governing the Company’s arrangements with such
Foreign Sub-custodian. To the extent the Custodian holds Foreign Securities and
related Proceeds with one or more Eligible Securities Depositories, the
Custodian shall provide the Company with an analysis of the custody risks
associated with maintaining assets with such Eligible Securities Depository and
shall monitor such custody risks on a continuing basis and promptly notify the
Company of any material change in these risks. The Custodian agrees to exercise
reasonable care, prudence and diligence in performing its obligations under this
clause (c).

 

 

 

 

(d) The Custodian’s responsibility with respect to the selection or appointment
of a Foreign Sub-custodian shall be limited to a duty to exercise reasonable
care in the selection or retention of such Foreign Intermediaries in light of
prevailing settlement and securities handling practices, procedures and controls
in the relevant market. With respect to any costs, expenses, damages,
liabilities, or claims (including attorneys’ and accountants’ fees) incurred as
a result of the acts or the failure to act by any Foreign Sub-custodian, the
Custodian shall take reasonable action to recover such costs, expenses, damages,
liabilities, or claims from such Foreign Sub-custodian; provided that the
Custodian’s sole liability in that regard shall be limited to amounts actually
received by it from such Foreign Intermediaries (exclusive of related costs and
expenses incurred by the Custodian). The Custodian shall have no responsibility
for any act or omission (or the insolvency of) any Securities System (including
an Eligible Securities Depository). In the event the Company incurs a loss due
to the negligence, willful misconduct, or insolvency of a Securities System
(including an Eligible Securities Depository), the Custodian shall make
reasonable endeavors, in its discretion, to seek recovery from the Eligible
Securities Depository.”

 

8.Section 9.4(a). Section 9.4(a) of the Agreement is hereby amended by deleting
the provision in its entirety and replacing it with the following:

 

“(a) The Company shall and does hereby indemnify and hold harmless each of the
Custodian, and any Foreign Sub-custodian appointed pursuant to Section 6.1
above, for and from any and all costs and expenses (including reasonable and
documented out-of-pocket attorney’s fees and expenses), and any and all losses,
damages, claims and liabilities, that may arise, be brought against or incurred
by the Custodian, and any advances or disbursements made by the Custodian
(including in respect of any Account overdraft, returned deposit item,
chargeback, provisional credit, settlement or assumed settlement, reclaimed
payment, claw-back or the like), as a result of, relating to, or arising out of
this Agreement, or the administration or performance of the Custodian’s duties
hereunder, or the relationship between the Company and the Custodian created
hereby, other than such liabilities, losses, damages, claims, costs and expenses
as are directly caused by the Custodian’s own actions constituting gross
negligence or willful misconduct.”

 

9.Governing Law. This Amendment shall be construed, and the provisions thereof
interpreted under and in accordance with and governed by the laws of The
Commonwealth of Massachusetts for all purposes (without regard to its choice of
law provisions); except to the extent such laws are inconsistent with federal
securities laws, including the 1940 Act, in which case such federal securities
laws shall govern.

 

10.Counterparts. This Amendment may be executed (including by facsimile
transmission with counterpart pages) in one or more counterparts, each of which
shall be deemed an original and all of which shall, taken together, be
considered one and the same agreement, it being understood that both Parties
need not sign the same counterpart.

 

[Signature page follows]

 

 

 

 

IN WITNESS WHEREOF, this Amendment has been duly executed by the parties hereto
as of the date first above written. 

 

 

 

  COMPANY:             Business Development Corporation of America              
  By: /s/ Peter M. Budko     Name: Peter M. Budko     Title: Chairman and Chief
Executive Officer             CUSTODIAN:             U.S. Bank National
Association                 By: /s/ Jeffrey B. Stone     Name: Jeffrey B. Stone
    Title: Vice President