Exhibit 10.6

 

EXECUTION COPY

 

COLLATERAL MANAGEMENT AGREEMENT

 

This Collateral Management Agreement (this "Agreement") is made as of April 7,
2015, by and between BDCA Helvetica Funding, Ltd., an exempted company
incorporated with limited liability under the laws of the Cayman Islands (the
"Issuer") and Business Development Corporation of America, a corporation
incorporated under the laws of the State of Maryland (together with is
successors and assigns in such capacity, the "Collateral Manager").

 

RECITALS:

 

The Issuer intends to issue certain Class A Notes (the "Class A Notes") pursuant
to an Indenture, dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the "Indenture"), between the Issuer and
U.S. Bank National Association, a limited purpose national banking association
with trust powers organized under the laws of the United States, as trustee
(together with its permitted successor and assigns in the trusts thereunder, the
"Trustee");

 

Pursuant to the Indenture, the Issuer has pledged the Collateral to the Trustee
as security for the Class A Notes;

 

The Issuer wishes to enter into this Agreement, pursuant to which the Collateral
Manager agrees to perform, on behalf of the Issuer, certain duties with respect
to the Collateral securing the Class A Notes in the manner and on the terms set
forth herein and to provide such additional services as are consistent with the
terms of this Agreement, the Collateral Administration Agreement and the
Indenture; and

 

The Collateral Manager has the capacity to provide the services required hereby
and is prepared to perform such services upon the terms and conditions set forth
herein.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

 

1.          Definitions

 

Capitalized terms used but not defined herein (including in the recitals) shall
have the respective meanings given to such terms in the Indenture. In the event
of any conflict or inconsistency between any term defined herein and any term
defined in the Indenture, the defined term as set forth herein shall govern.

 

"Accepted Servicing Practices": The meaning specified in Section 7.

 

"Advance Restructuring Notice": The meaning specified in Section 2(o).

 

"Advisers Act": The meaning specified in Section 6(e).

 

"BDCA Counterparty Repo": The TBMA/ISMA Global Master Repurchase Agreement (2000
Version) dated as of March 31, 2015 (together with the related annex and
confirmation (each as amended, supplemented or otherwise modified from time to
time) between the Seller and UBS.

 

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"Collateral Manager Advances": All Collateral Manager Expenses paid by the
Collateral Manager from its own funds in connection with its obligations under
this Agreement.

 

"Collateral Manager Expenses": Any and all customary and reasonable
out-of-pocket expenses paid or incurred by the Collateral Manager in connection
with, and as permitted by, its collateral management activities and obligations
under this Agreement.

 

"Collateral Manager Fee": On any Payment Date, a fee equal to 0.50% (50 basis
points) per annum times the aggregate average value of the Managed Assets for
the Monthly Period ending on the last Business Day of the month immediately
before the Payment Date, calculated on the basis of a 360-day year of twelve
30-day months prorated for the related Monthly Period.

 

"Default Valuation Date": The earlier of:

 

(a)          the date on which one or more Firm Bids have been obtained by the
Collateral Manager for all of the Portfolio Assets (other than the Zero-Value
Portfolio Assets, as defined in the BDCA Counterparty Repo, it being understood
that those Zero-Value Portfolio Assets for which one or more Firm Bids have been
obtained on or prior to the Default Valuation Date shall be included in the
calculation of the Final Price) pursuant to Section 2(p) of this Agreement; and

 

(b)          the date that is three calendar months immediately following the
day on which the UBS Termination Event occurs.

 

"Final Price": With respect to the Notes shall be an amount in USD equal to the
sum of:

 

(a)          the sum, with respect to each Portfolio Asset (including, without
limitation, any Zero-Value Portfolio Asset) for which the Collateral Manager is
able to obtain at least three Firm Bids or combination of Firm Bids for such
Portfolio Asset at or prior to the Portfolio Asset Sale Cut-Off Time, of the
highest such Firm Bid or weighted average of combined Firm Bids obtained by the
Collateral Manager in accordance with Section 2(p); plus

 

(b)          the sum, with respect to each Portfolio Asset (including, without
limitation, any Zero-Value Portfolio Asset) for which the Collateral Manager is
unable to obtain at least three Firm Bids or combination of Firm Bids for such
Portfolio Asset at or prior to the Portfolio Asset Sale Cut-Off Time, of the
fair market value of such Portfolio Asset at the Portfolio Asset Sale Cut-Off
Time, as shall be determined by the Collateral Manager in a commercially
reasonable manner, having regard to such pricing sources and methods (which may
include, without limitation, available prices for securities with similar
maturities, terms, and credit characteristics as such Portfolio Asset) as the
Collateral Manager considers reasonably appropriate; plus

 

(c)          the aggregate amount of all cash held by the Issuer on the Default
Valuation Date; plus

 

(d)          the aggregate cost of purchase of all Eligible Investments held by
the Issuer on the Default Valuation Date.

 

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"Firm Bid": The meaning specified in Section 2(p)(i).

 

"Full Payment Date": The day next following the payment in full or redemption in
whole of the Notes and the termination of the Indenture in accordance with its
terms.

 

"Indemnified Person": The meaning specified in Section 8(a).

 

"Insolvency Laws": (a) the United States Bankruptcy Reform Act of 1978 (11
U.S.C. § 101, et seq.), as amended from time to time, and (b) all other
applicable liquidation, conservatorship, examinership, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor
relief laws of any applicable jurisdiction from time to time in effect affecting
the rights of creditors generally.

 

"Managed Assets": The meaning specified in Section 2(f).

 

"Portfolio Asset Sale Cut-Off Time": 3:00 p.m. (New York time) on the date that
is three calendar months immediately following the day on which the UBS
Termination Event occurs.

 

"Other Investment Vehicles": The meaning specified in Section 6(b).

 

"Responsible Officer": Any officer, or director or employee of the Issuer or the
Collateral Manager, as the case may be, involved in or responsible for the
administration, supervision or management of this Agreement.

 

"Restructuring Notices": The meaning specified in Section 2(o).

 

“Seller”: Business Development Corporation of America, a corporation
incorporated under the laws of the State of Maryland, acting in its capacity as
seller of Class A Notes under the BDCA Counterparty Repo, together with its
successors in such capacity.

 

"UBS Termination Event": The meaning specified in Section 2(p).

 

2.          General Duties of the Collateral Manager

 

Subject to and in accordance with the terms of the Indenture and this Agreement,
the Collateral Manager shall provide those services pertaining to the Portfolio
Assets and the other Collateral that, applying Accepted Servicing Practices, are
required to be performed by the Collateral Manager, which services include the
following:

 

(a)          The Collateral Manager agrees to supervise and direct the
investment and reinvestment of the Collateral, and shall perform on behalf of
the Issuer the duties that have been expressly delegated to the Collateral
Manager in this Agreement and in the Indenture (and the Collateral Manager shall
have no obligation to perform any other duties under the Indenture or otherwise)
and, to the extent necessary or appropriate to perform such duties, the
Collateral Manager shall have the power to execute and deliver all necessary and
appropriate documents and instruments on behalf of the Issuer with respect
thereto. In addition, in performing its obligations under this Agreement, the
Collateral Manager shall, except as otherwise provided in and subject to the
terms of this Agreement, have full power and authority to (i) take any and all
actions in connection with its collateral management obligations hereunder that
it deems necessary or appropriate (in each case, subject to Accepted Servicing
Practices), and (ii) execute and deliver all necessary and appropriate documents
and instruments on behalf of the Issuer with respect thereto. The Issuer hereby
agrees to cooperate with the Collateral Manager by either executing and
delivering to the Collateral Manager from time to time (x) powers of attorney
evidencing the Collateral Manager’s authority and power under this Agreement, or
(y) such documents or instruments deemed necessary or appropriate by the
Collateral Manager to enable the Collateral Manager to carry out its collateral
management obligations under this Agreement.

 

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(b)          The Collateral Manager shall (i) select all Portfolio Assets which
shall be acquired or sold by the Issuer and pledged to the Trustee pursuant to
the Indenture and (ii) facilitate the acquisition, disposition and settlement of
Portfolio Assets by the Issuer in accordance with the Indenture, including the
delivery of Collateral in accordance with the Indenture.

 

(c)          The Collateral Manager shall monitor the Collateral, on behalf of
the Issuer, on an ongoing basis and, except to the extent such obligation is
delegated to the Collateral Administrator under the Collateral Administration
Agreement, shall use commercially reasonable efforts to provide to the Issuer
all reports, schedules and other data which the Issuer is required to prepare,
deliver or furnish under the Indenture or the Collateral Administration
Agreement, in the form and containing all information required thereby and on or
before the date required under the Indenture and to deliver them to the parties
entitled thereto under the Indenture. The Collateral Manager shall, on behalf of
the Issuer, use commercially reasonable efforts to obtain, to the extent
practicable, any information concerning whether a Portfolio Asset has become a
Defaulted Obligation.

 

(d)          [Reserved].

 

(e)          The Collateral Manager shall use commercially reasonable efforts to
furnish Issuer Orders, Issuer Requests and officer's certificates as may be
required under the Indenture, including providing any certifications, and the
Collateral Manager shall have the power to execute and deliver all necessary and
appropriate documents and Instruments on behalf of the Issuer with respect
thereto.

 

(f)          The Collateral Manager may, in its sole discretion, subject to and
in accordance with the provisions of the Indenture and this Agreement including,
but not limited to, Section 2(o), direct the Trustee in writing to take the
following actions with respect to any Portfolio Asset, Defaulted Obligation, and
any other assets and property included in the Collateral (collectively, the
"Managed Assets"), as applicable:

 

(i)          retain such Managed Asset;

 

(ii)         sell or otherwise dispose of such Managed Asset in the open market
or otherwise (including to itself on arm’s length terms);

 

(iii)        acquire, as security for the Class A Notes in substitution for or
in addition to any one or more Managed Assets included in the Collateral, one or
more additional Managed Assets;

 

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(iv)        if applicable, tender such Managed Asset pursuant to an Offer;

 

(v)         if applicable, consent to any proposed amendment, modification,
extension or waiver pursuant to an Offer;

 

(vi)        retain or dispose of any securities or other property (other than
Cash) received pursuant to an Offer;

 

(vii)       waive any default with respect to any Defaulted Obligation;

 

(viii)      vote to accelerate the maturity of any Defaulted Obligation;

 

(ix)         amend, waive, consent, modify, extend or vote with respect to any
Managed Asset;

 

(x)          exercise any other rights or remedies with respect to any Managed
Asset and as provided in the related Underlying Instrument including without
limitation the negotiation of any workout or restructuring and the acceptance of
any security or other consideration issued in a plan of reorganization,
bankruptcy or other proceeding involving any thereof, or take any other action
consistent with the terms of the Indenture which, in accordance with Accepted
Servicing Practices, the Collateral Manager reasonably believes to be in the
best interests of the Holders; and

 

(xi)         exercise any other rights or remedies with respect to such Managed
Asset.

 

(g)          Except as expressly otherwise permitted in Section 6, the
Collateral Manager shall cause any purchase or sale of any Managed Asset to be
effected for cash and otherwise on arm's length terms.

 

(h)          In connection with taking or omitting any action under the
Indenture or this Agreement, the Collateral Manager may, in accordance with
Accepted Servicing Practices, consult with counsel and may rely in good faith on
the advice of such counsel or any opinion of counsel selected in good faith with
reasonable care.

 

(i)          The Collateral Manager is hereby granted, and shall have, full
power to take all actions and execute and deliver all necessary and appropriate
documents and instruments on behalf of the Issuer in accordance with this
Agreement. The Collateral Manager hereby accepts and agrees to perform all of
the duties delegated to it under this Agreement in accordance with Accepted
Servicing Practices.

 

(j)          From and after the occurrence and continuance of an Event of
Default, the Collateral Manager shall continue to perform and be bound by the
provisions of this Agreement. The Trustee shall be entitled to rely and be
protected in relying upon all actions and omissions to act of the Collateral
Manager thereafter as fully as if no Event of Default had occurred.

 

(k)          Notwithstanding anything to the contrary contained herein, the
standard of care applicable to the Collateral Manager’s performance of its
services under this Agreement shall be the servicing standards applicable
pursuant to Accepted Servicing Practices.

 

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(l)          The Collateral Manager may enter into subservicing agreements for
the servicing and administration of all or a part of the Portfolio Assets and
the other Collateral; provided that entering into such a subservicing agreement
shall not constitute an assignment of rights or delegation of performance
obligations of the Collateral Manager, which obligations shall remain the
primary obligations of the Collateral Manager.

 

(m)          In performing its duties hereunder, the Collateral Manager shall
not take any action which is prohibited pursuant to the terms of the Indenture
or any of the other Transaction Documents and shall take all actions within its
reasonable power and control which are necessary or appropriate to cause the
Issuer to comply with the terms and conditions of the Indenture and the other
Transaction Documents (including, without limitation, timely preparation and
delivery of all statements, notices and other reports required pursuant to the
Transaction Documents to the extent such preparation and delivery has not been
delegated to another party under the Transaction Documents) and to cause any
newly acquired Portfolio Assets to comply with the statements and criteria set
forth in Section 12.2 of the Indenture; provided, that in no event shall the
Collateral Manager have any obligation pursuant to this clause to cause the
Issuer to comply with any monetary obligation set forth in any Transaction
Document (including, without limitation, the payment of principal, interest,
fees, expenses, indemnity obligations or other amounts).

 

(n)          [Reserved].

 

(o)          Notwithstanding any other term of this Agreement (A)(x) the
Collateral Manager shall, on behalf of the Issuer, deliver written notice to the
Liquidation Agent in the event that it receives a request to take, agree or
consent to any of the following actions with respect to any Portfolio Asset
within two (2) Business Days of receipt of such request (any such notice, an
“Advance Restructuring Notice”) and (y) the Collateral Manager shall provide
written notice to the Liquidation Agent no less than one Business Day (or such
lesser period as may be necessary in order to take, agree or consent to the
relevant action prior to the applicable deadline therefor) prior to taking,
agreeing or consenting to any of the following actions with respect to any
Portfolio Asset (such notice, together with any Advance Restructuring Notice,
the “Restructuring Notices”) and (B) unless the relevant action will result in
the Portfolio Asset being treated as a Defaulted Obligation for all purposes of
the Indenture, the BDCA Counterparty Repo and this Agreement by all parties
thereto, the Collateral Manager shall not be permitted to take, agree or consent
to any of the actions specified in (i), (ii), (iii) or (iv) below with respect
to any Portfolio Asset without the prior written consent of the Liquidation
Agent (provided that, without limiting the Liquidation Agent’s discretion with
respect to the nature of its response, the Liquidation Agent shall respond
promptly to any request of the Collateral Manager asking whether or not the
Liquidation Agent is willing to provide any such consent):

 

(i)          any foreclosure, deed in lieu, or comparable transfer of title to
any collateral securing a Portfolio Asset or any taking back of control or
acquiescence in the transfer of control from a Portfolio Asset Obligor with
respect to any such collateral;

 

(ii)         any modification, extension, amendment or waiver of a monetary term
(including the timing of payments) or any material non-monetary term of an
Underlying Instrument;

 

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(iii)        any acceptance of a discounted payoff of a Portfolio Asset;

 

(iv)        any release of any collateral securing a Portfolio Asset or any
release of a Portfolio Asset Obligor or acceptance of any assumption agreement
(other than in accordance with the express and explicit terms of, or
satisfaction of, such Portfolio Asset or in circumstances where paragraph
2(o)(v) applies);

 

(v)         any acceptance of additional collateral or substitute collateral for
a Portfolio Asset (other than in accordance with the express and explicit terms
of such Portfolio Asset) which, in the case of substitute collateral has, in the
Collateral Manager’s reasonable commercial judgment, a fair market value that is
greater than or equal to the value of the collateral it is replacing; or

 

(vi)        (A) permitting to arise any subordinate lien on any collateral
securing a Portfolio Asset (other than a subordinate lien already existing on
the trade date when such Portfolio Asset is acquired by the Issuer) or (B)
waiving any term relating to any subordinate lien on any collateral securing a
Portfolio Asset, in each case other than in accordance with the express and
explicit terms of such Portfolio Asset (in which case no notification will be
required).

 

The Liquidation Agent shall be an express third party beneficiary of the
provisions set forth in this Section 2(o) to the extent that it is entitled to
receive notifications or exercise consent rights under this Section.

 

(p)          If the "Repurchase Date" (as defined in the BDCA Counterparty Repo)
has been accelerated by the Seller as provided in the BDCA Counterparty Repo as
a result of an “Event of Default” with respect to the Buyer as Defaulting Party
(as each of those terms are so defined or used in the BDCA Counterparty Repo)
(such event, a "UBS Termination Event"), the Collateral Manager will use its
commercially reasonable efforts to sell or otherwise dispose of all Portfolio
Assets in accordance with Section 12.1 of the Indenture, provided that each such
sale shall be conducted in compliance with the following requirements:

 

(i)          the Collateral Manager shall, commencing on the day on which the
UBS Termination Event occurs, seek to obtain firm, actionable bids for the
entire Principal Balance of each Portfolio Asset (each such bid, a "Firm Bid")
from at least three leading dealers in the relevant market, one of which may be
the Collateral Manager or its designee, at or prior to the Portfolio Asset Sale
Cut-Off Time (as defined below); provided that if there is more than one
Portfolio Asset at any time, the Collateral Manager may in its sole discretion
obtain Firm Bids with respect to each separate Portfolio Asset or any one or
more groups of Portfolio Assets;

 

(ii)         if the Collateral Manager obtains one Firm Bid or a combination of
Firm Bids for the entire Principal Balance of any Portfolio Asset (or group of
Portfolio Assets) prior to the Portfolio Asset Sale Cut-Off Time in accordance
with the foregoing clause (i), the Collateral Manager will cause the sale of
such Portfolio Asset (or group of Portfolio Assets) for an amount equal to the
highest such Firm Bid or weighted average of combined Firm Bids;

 

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(iii)        any Holder that owns 25% or more of the Aggregate Outstanding
Amount of Notes shall be entitled to participate in such bidding process with
respect to one or more of the Portfolio Assets by submitting Firm Bid(s)
therefor;

 

(iv)        the Collateral Manager shall notify the Trustee on (or as soon as
reasonably practicable following) the date on which the UBS Termination Event
occurs that it is selling or otherwise disposing of all of the Portfolio Assets
in accordance with Section 12.1 of the Indenture and this Section 2(p), and
direct the Trustee to deliver a notice to all Holders on (or as soon as
reasonably practicable following) the date on which the UBS Termination Event
occurs that (A) notifies the Holders of such sale, (B) notifies the Holders that
any Holder that owns 25% or more of the Aggregate Outstanding Amount of Notes
shall be entitled to participate in such bidding process with respect to one or
more of the Portfolio Assets by submitting Firm Bid(s) therefor, and (C)
provides instructions so that any Holder that owns 25% or more of the Aggregate
Outstanding Amount of Notes may notify the Collateral Manager that it will
participate in the bidding process with respect to one or more of the Portfolio
Assets; and

 

(v)         the Collateral Manager shall use commercially reasonable efforts to
sell or otherwise dispose of all Portfolio Assets and Eligible Investments no
later than the Portfolio Asset Sale Cut-Off Time.

 

(q)          Immediately upon becoming aware that any Portfolio Asset, at any
time after the acquisition thereof by the Issuer on any date of determination by
the Calculation Agent, has become a Defaulted Obligation, the Collateral Manager
shall deliver a notice of such event to (i) the Issuer and (ii) UBS (which shall
constitute a third party beneficiary of this Agreement for purposes of such
obligation).

 

3.          No Joint Venture

 

Nothing in this Agreement shall be deemed to create a joint venture or
partnership between the parties with respect to the arrangements set forth in
this Agreement. For all purposes herein, the Collateral Manager shall be deemed
to be an independent contractor and, unless otherwise provided herein or
specifically authorized by the Issuer, from time to time, shall have no
authority to act for or represent the Issuer.

 

4.          Brokerage

 

The Collateral Manager shall effect all purchases and sales of securities in a
manner consistent with Accepted Servicing Practices, taking into account net
price (including commissions) and execution capability and other services which
the broker may provide.

 

5.          Collateral Manager’s Compensation and Expenses

 

As consideration for managing and/or servicing each Portfolio Asset, the
Collateral Manager shall be entitled to the Collateral Manager Fee, to be paid
in accordance with the Priority of Payments, for so long as such Portfolio Asset
remains subject to this Agreement during any calendar month or part thereof.
Collateral Manager Fees shall be paid monthly in arrears on each Payment Date.

 

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The Collateral Manager shall have no obligation to advance its own funds for the
payment of any Collateral Manager Expenses if the Collateral Manager determines
that any such Collateral Manager Advances are or will be, or that any
outstanding Collateral Manager Advances are, non-recoverable. If the Collateral
Manager determines that any such Collateral Manager Advances are or will be
non-recoverable, the Collateral Manager shall promptly provide the Issuer with a
certificate evidencing such determination and stating the reasons for such
determination, which reasons shall take into account expected sources of
reimbursement of such Collateral Manager Advances available to the Issuer
pursuant to the Indenture. In any case, the Collateral Manager may, at its
option, make Collateral Manager Advances from its own funds with respect to the
payment of Collateral Manager Expenses, in which event the Collateral Manager
shall be reimbursed for such advances on each Payment Date without interest. The
making of a Collateral Manager Advance by the Collateral Manager under any
particular set of circumstances will not obligate the Collateral Manager to make
any additional or other Collateral Manager Advance under equivalent, similar or
any other circumstances.

 

6.          Services to Other Companies or Accounts; Conflicts of Interest

 

(a)          The shareholders, Affiliates and associates of the Collateral
Manager are in no way prohibited from, and intend to, spend substantial business
time in connection with other businesses or activities, including, but not
limited to, managing investments, advising or managing entities other than the
Issuer, whose investment objectives are the same as or overlap with those of the
Issuer, participating in actual or potential investments of the Issuer providing
consulting, merger and acquisition, structuring or financial advisory services,
including with respect to actual, contemplated or potential investments of the
Issuer, or acting as a director, officer or creditors' committee member of,
adviser to, or participant in, any corporation, partnership, trust or other
business entity. Such Affiliates or associates may, and expect to, receive fees
or other compensation from third parties for any of these activities, which fees
will be for the benefit of their own account and not the Issuer. These fees can
relate to actual, contemplated or potential investments of the Issuer and may be
payable by entities in which the Issuer directly or indirectly, has invested or
contemplates investing.

 

(b)          In addition, the shareholders, Affiliates and associates of the
Collateral Manager may manage Affiliates of the Issuer (including, but not
limited to, other funds, investment vehicles, accounts or advisory clients of
the Collateral Manager or any of its Affiliates, collectively the "Other
Investment Vehicles"). The investment policies, fee arrangements and
circumstances of the Issuer may differ from such Other Investment Vehicles. For
example, the Issuer may desire to retain an asset at the same time that one or
more Other Investment Vehicles desire to sell it. Similarly, the Other
Investment Vehicles which are in a liquidation phase may take priority as to
sales of investments in which the Issuer is also an investor. These procedures
could in certain circumstances affect adversely the price paid or received by
the Issuer or the size of the position purchased or sold by the Issuer.

 

(c)          Although the Issuer intends to operate so that the Portfolio Assets
are not "plan assets" under ERISA, some of the Other Investment Vehicles may
hold or will hold "plan assets" subject to ERISA. For those plan assets, certain
shareholders, Affiliates and/or associates of the Collateral Manager are
classified as "fiduciaries" under ERISA. ERISA imposes certain general and
specific responsibilities and restrictions on fiduciaries with respect to plan
assets. As a result, the Collateral Manager may adopt certain procedures to
address other conflicts in order to satisfy ERISA requirements, if applicable.
The foregoing procedures could in certain circumstances affect adversely the
price paid or received by the Issuer or the size of the position purchased or
sold by the Issuer (including prohibiting the Issuer from purchasing a position)
or may limit the rights that the Issuer may exercise with respect to an
investment.

 

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(d)          Members, Affiliates and associates of the Collateral Manager may
have the ability, under certain circumstances, to take certain actions that
would be inconsistent with the objectives of the Issuer. In such circumstances,
the Collateral Manager and its shareholders, Affiliates and associates will act
in good faith and in a manner believed by them to be equitable; provided that,
the Collateral Manager and its shareholders, Affiliates and associates may adopt
certain procedures to address other conflicts in order to satisfy ERISA
requirements, if applicable. The foregoing procedures could in certain
circumstances affect adversely the price paid or received by the Issuer or the
size of the position purchased or sold by the Issuer (including prohibiting the
Issuer from purchasing a position) or may limit the rights that the Issuer may
exercise with respect to an investment.

 

(e)          The Collateral Manager shall not direct the Trustee to purchase any
Portfolio Asset for inclusion in the Collateral directly from the Collateral
Manager or any of its Affiliates as principal or any account or portfolio for
which Collateral Manager or any of its Affiliates serve as investment advisor,
or direct the Trustee to sell directly any Portfolio Asset to the Collateral
Manager or any of its Affiliates as principal or any account or portfolio for
which the Collateral Manager or any of its Affiliates serve as investment
advisor, unless the Collateral Manager shall have certified to the Issuer and
the Trustee (a copy of which shall be provided by the Trustee to the Liquidation
Agent) with respect to each such transaction that (i) such transaction will be
consummated on terms prevailing in the market, (ii) the terms of such
transaction are substantially as advantageous to the Issuer as the terms the
Issuer would obtain in a comparable arm's length transaction with a
non-Affiliate, and (iii) such transaction complies with the Investment Advisers
Act of 1940, as amended (the "Advisers Act"), to the extent applicable. In
accordance with the foregoing, the Collateral Manager may, in one or more
transactions, effect client cross-transactions where the Collateral Manager
causes a transaction to be effected between the Issuer and another
collateralized debt obligation vehicle, collateralized loan obligation vehicle,
fund or another investment vehicle or account managed or advised by it or one or
more of its Affiliates, but neither it nor the Affiliate will receive any
commission or similar fee in connection with such cross-transaction. If consent
of the Issuer to any such transaction is required under the Advisers Act, the
Collateral Manager will obtain the prior written, informed consent of the
Issuer's Sole Shareholder. In addition, with the prior authorization of the
Issuer, which may be revoked at any time, the Collateral Manager may enter into
agency cross-transactions where it or any of its Affiliates acts as broker for
the Issuer and for the other party to the transaction, to the extent permitted
under applicable law.

 

(f)          The Collateral Manager shall not direct the Trustee to purchase any
Portfolio Asset for inclusion in the Collateral if the obligor on such Portfolio
Asset is the Collateral Manager or any of its Affiliates or any other fund or
account managed by the Collateral Manager or its Affiliates.

 

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7.          Standard of Care

 

The Collateral Manager shall comply with all the terms and conditions of the
Indenture specifically made applicable to the Collateral Manager as specified
therein affecting the duties and functions that have been delegated to it
thereunder and hereunder and, subject to Section 8 of this Agreement, shall
perform its collateral management services under this Agreement with reasonable
care, using a degree of skill and attention no less than that which the
Collateral Manager exercises with respect to comparable assets that it manages
for itself and others having similar investment objectives and restrictions. The
servicing standards described in this Section 7 are herein referred to as
"Accepted Servicing Practices".

 

8.          Limitation of Liability

 

(a)          Without prejudice to the obligations of the Sole Shareholder under
the Equity Contribution Agreement, the Subscription Agreement, the Liquidation
Agent Appointment Letter and the BDCA Counterparty Repo, none of the Collateral
Manager (solely in its capacity as Collateral Manager hereunder), its Affiliates
(excluding the Issuer), any officer, director, partner, member, employee, or
stockholder of any of such Persons or any other Person that serves or provides
advisory services and resources at the request of the Collateral Manager on
behalf of the Issuer as an officer, director, partner, member, employee or agent
of any other entity (each, an "Indemnified Person") shall be liable to the
Trustee, any Holder, UBS or the Issuer, or any Affiliate of the foregoing, for
damages arising from any action taken or omitted to be taken by such Person or
for damages arising from any action taken or omitted to be taken by the Trustee,
any Holder or other Person with respect to the Issuer, unless such damages are
the result of acts or omissions constituting bad faith, gross negligence,
willful misconduct or fraud by such Indemnified Person. Each Indemnified Person
may rely conclusively in good faith on any document of any kind that, prima
facie, is properly executed and submitted by any appropriate Person respecting
any matters arising under this Agreement. The Collateral Manager shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing delivered to the Collateral Manager under or in connection with this
Agreement and believed by it to be genuine and to have been signed or sent by
the proper Person. The Collateral Manager may consult with legal counsel,
Independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN, IN NO EVENT SHALL THE LIABILITY OF THE COLLATERAL
MANAGER FOR ANY CLAIMS HEREUNDER BY ANY OTHER PERSON (INCLUDING, WITHOUT
LIMITATION, INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT) EXCEED, IN THE
AGGREGATE, A DOLLAR AMOUNT EQUAL TO THE AMOUNT OF COLLATERAL MANAGER FEES PAID
TO THE COLLATERAL MANAGER HEREUNDER.

 

(b)          No claim may be made by any party hereto against any other party
thereto or any officer, agent, stockholder, partner, member, director or
employee of any such party for any special, indirect, consequential or punitive
damages (including lost profits) in respect of any claim for breach of contract
or any other theory of liability arising out of or relating to this Agreement or
the transactions contemplated hereby or any act, omission or event occurring in
connection therewith, and to the fullest extent permitted by applicable law,
each party hereto hereby waives, releases and agrees not to sue upon any claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in such party’s favor.

 

Page 11

 

 

9.          Indemnification

 

(a)          To the fullest extent permitted by law, the Issuer shall indemnify,
defend and hold harmless each Indemnified Person, against all losses, claims,
damages or liabilities, whether or not matured or unmatured or whether or not
asserted or brought due to contractual or other restrictions (including legal or
other expenses reasonably incurred in investigating or defending against any
such loss, claim, damage or liability), joint or several (collectively,
"Losses"), to which an Indemnified Person may become subject by reason of any
acts or omissions or any alleged acts or omissions arising out of such
Indemnified Person's or any other Indemnified Person's activities in connection
with the conduct of the business or affairs of the Issuer and/or a Portfolio
Asset (including in connection with or relating to this Agreement), or caused by
or arising out of or relating to or in connection with this Agreement, any of
the Transaction Documents or any of the transactions contemplated thereby
(including, without limitation, the issuance of the Class A Notes), unless such
Loss results from (i) the gross negligence, willful misconduct or fraud of such
Person, or (ii) a breach of the representation and warranty of the Collateral
Manager in Section 12 hereof. Notwithstanding the exception set forth in the
preceding sentence, if the Collateral Manager sustains any loss, liability or
expense by reason of such exception and which results from any overcharges to a
Portfolio Asset Obligor under a Portfolio Asset, then the Issuer shall, to the
extent that such overcharges were collected by the Collateral Manager and
remitted to the Issuer, promptly remit such overcharge to such Portfolio Asset
Obligor after the applicable Issuer’s receipt of written notice from the
Collateral Manager regarding such overcharge.

 

Notwithstanding anything contained herein to the contrary, the obligations of
the Issuer under this Section 9(a) are limited recourse obligations of the
Issuer payable as Administrative Expenses solely out of the amounts credited to
the Expense Account in accordance with Sections 10.3(c) and 11.1 of the
Indenture. Any indemnification rights provided for in this Section 9(a) shall be
retained by any resigned or replaced Collateral Manager and by all former
Indemnified Persons.

 

(b)          Expenses incurred by an Indemnified Person in defense or settlement
of any claim that may be subject to a right of indemnification hereunder may be
advanced by the Issuer prior to the final disposition thereof upon receipt of a
written undertaking by or on behalf of the Indemnified Person to repay such
amount to the extent that it shall be determined ultimately that such
Indemnified Person is not entitled to be indemnified hereunder. The right of any
Indemnified Person to the indemnification provided herein shall be cumulative
of, and in addition to, any and all rights to which such Indemnified Person may
otherwise be entitled by contract or as a matter of law or equity and shall
extend to such Indemnified Person's successors, assigns and legal
representatives.

 

(c)          The indemnification rights provided for in this Section 9 shall
survive the termination of this Agreement. Notwithstanding anything else herein,
nothing contained in this Section or elsewhere in this Agreement shall be
construed as relieving any person for any liability (including liability under
applicable U.S. federal securities laws which, under certain circumstances,
impose liability even on persons that act in good faith), to the extent that
such liability may not be waived under, or such indemnification would be in
violation of, applicable law.

 

Page 12

 

 

10.         Term of Agreement; Survival of Certain Terms

 

(a)          This Agreement shall become effective on the date hereof. This
Agreement shall continue in force until the first of the following occurs (i)
the payment in full or redemption in whole of the Notes and the termination of
the Indenture in accordance with its terms; (ii) the liquidation of the
Portfolio Assets and the final distribution of proceeds of such liquidation to
the Holders; or (iii) termination of this Agreement in accordance with
subsection (b) or subsection (c) of this Section 10. Sections 8, 9, 11, 16 and
18 shall survive any termination of this Agreement. Any such termination shall
also be without prejudice to any rights of the Collateral Manager relating to
the reimbursement of its Collateral Manager Expenses and Collateral Manager
Advances or the payment of its Collateral Manager Fees (together with interest
thereon) through and including the date of such termination. Upon any such
termination, any Collateral Manager Fees, Collateral Manager Expenses and
Collateral Manager Advances that remain unpaid or unreimbursed shall be remitted
by the Issuer to Collateral Manager on the next Payment Date after the Issuer’s
receipt of an itemized invoice therefor (provided such invoice is received no
less than five Business Days prior to such Payment Date).

 

(b)          This Agreement may be terminated, and the Collateral Manager may be
removed for cause, on the thirtieth day after the date on which the Issuer or
the Trustee, at the direction of the Majority Holders (or, in the case of clause
(x), the Majority Holders or the Liquidation Agent), delivers written notice,
setting forth the cause of such removal, to the Collateral Manager (or, in the
case of clause (x), immediately upon delivery of such written notice). For
purposes of determining "cause" with respect to termination of this Agreement
pursuant to this Section 10(b), such term shall mean the occurrence of any one
of the following events:

 

(i)          any failure by the Collateral Manager to comply with its
obligations set forth in Section 2 hereof, and such failure results in the
occurrence of an Event of Default (as defined in the Indenture, but after giving
effect to any related notice requirement or cure period) that is directly
attributable to the actions or inactions of Collateral Manager constituting such
breach of Section 2 hereof;

 

(ii)         the Collateral Manager breaches any provision of this Agreement,
the Indenture or any other Transaction Document to which it is a party (other
than as covered in Section 10(b)(i)) which violation or breach (1) has a
material adverse effect on the Holders of any Class A Notes and (2) if capable
of being cured, is not cured within 10 days after the date on which written
notice of such breach has been given to the Collateral Manager by the Issuer,
the Trustee, the Majority Holders or the Liquidation Agent, or, if such
violation or breach is not capable of being cured within 10 days but is capable
of being cured in a longer period, the Collateral Manager fails to cure such
violation or breach within the period in which a reasonably diligent person
could cure such violation or breach, but in no event greater than 30 days;

 

(iii)        any representation, warranty or certification made by the
Collateral Manager in this Agreement or in any certificate delivered pursuant to
this Agreement shall prove to have been untrue or incorrect when made, and such
breach has a material adverse effect on the Holders of any Class A Notes;

 

Page 13

 

 

(iv)        the filing of a decree or order for relief by a court having
jurisdiction over the Collateral Manager or any substantial part of its property
in an involuntary case under any applicable Insolvency Law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Collateral Manager or for any
substantial part of its property, or ordering the winding up or liquidation of
the Collateral Manager’s affairs, and such decree or order shall remain unstayed
and in effect for a period of thirty (30) consecutive days;

 

(v)         the commencement by the Collateral Manager of a voluntary case under
any applicable Insolvency Law now or hereafter in effect, or the consent by the
Collateral Manager to the entry of an order for relief in an involuntary case
under any such law;

 

(vi)        the consent by the Collateral Manager to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Collateral Manager or for any
substantial part of its property, or the making by the Collateral Manager of any
general assignment for the benefit of creditors;

 

(vii)       the failure by the Collateral Manager generally to pay its debts as
such debts become due, or the taking of action by the Collateral Manager in
furtherance of the actions described in the immediately preceding clauses (iv),
(v) or (vi);

 

(viii)      the occurrence of any Event of Default under the Indenture;

 

(ix)         the Collateral Manager or any officer of the Collateral Manager who
has direct responsibility for the investment activities of the Issuer is
indicted for any act constituting fraud or criminal negligence in respect of
investment activity; or

 

(x)           an "Event of Default" has occurred under the BDCA Counterparty
Repo with respect to which the Seller is the "Defaulting Party" (as each such
term is defined therein) and the "Repurchase Date" (as defined in the BDCA
Counterparty Repo) has been accelerated as a result thereof.

 

If any of the events specified in this sub-clause (b) of this Section 10 shall
occur, the Collateral Manager shall give prompt written notice thereof to the
Issuer and the Trustee (who shall forward to the Holders) upon a Responsible
Officer of the Collateral Manager becoming aware of the occurrence of such
event.

 

(c)          This Agreement may also be terminated by the Collateral Manager on
the thirtieth day after the date on which the Collateral Manager delivers
written notice, setting forth the cause of such termination, to the Issuer (with
a copy to the Trustee). For purposes of determining "cause" with respect to
termination of this Agreement pursuant to this Section 10(c), such term shall
mean the occurrence of any one of the following events:

 

(i)          any failure by the Trustee to disburse any amount due to the
Collateral Manager hereunder (including, without limitation, the Collateral
Manager Fee, the Collateral Management Expenses and Collateral Manager Advances)
when funds are available therefor pursuant to Section 11.1(a) of the Indenture,
which failure, continues unremedied for a period of five (5) Business Days after
the date on which written notice of such failure shall have been given to the
Issuer by the Collateral Manager; or

 

Page 14

 

 

(ii)         the Issuer breaches any provision of this Agreement (other than as
covered in Section 10(c)(i)) which violation or breach (1) has a material
adverse effect on the Collateral Manager and (2) if capable of being cured, is
not cured within 30 days after the date on which written notice of such breach
has been given to the Issuer, or, if such violation or breach is not capable of
being cured within 30 days but is capable of being cured in a longer period, the
Issuer fails to cure such violation or breach within the period in which a
reasonably diligent person could cure such violation or breach, but in no event
greater than 60 days.

 

11.         Action Upon Termination

 

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

 

(i)          deliver to the Issuer, or to the successor collateral manager if so
directed by the Issuer, all property and documents of the Trustee or the Issuer
or otherwise relating to the Portfolio Assets then in the custody of the
Collateral Manager; and

 

(ii)         deliver to the Trustee an accounting with respect to the books and
records delivered to the Trustee or the successor collateral manager.

 

Notwithstanding such termination, (x) the Collateral Manager shall remain liable
to the extent set forth herein (but subject to Section 8 hereof) for its acts or
omissions hereunder arising prior to termination, and for any expenses, losses,
damages, liabilities, demands, charges and claims (including reasonable
attorneys' fees) in respect of or arising out of a material breach of the
representations and warranties made by the Collateral Manager in Section 12
hereof or from any material failure of the Collateral Manager to comply with the
provisions of this Section 11, and (y) the Issuer shall remain liable to the
extent set forth herein for the reimbursement of the Collateral Manager’s
Collateral Manager Expenses and Collateral Manager Advances and the payment of
the Collateral Manager Fee through and including the date of such termination.

 

(b)          The Collateral Manager agrees that, notwithstanding any
termination, it shall reasonably cooperate in any Proceeding arising in
connection with this Agreement, the Indenture, or any of the Portfolio Assets
(excluding any such Proceeding in which claims are asserted against the
Collateral Manager or any Affiliate of the Collateral Manager) upon receipt of
appropriate indemnification and expense reimbursement satisfactory to the
Collateral Manager.

 

(c)          If the Notes remain outstanding, the Trustee (at the direction of
the Majority Holders) or, otherwise, the Issuer shall appoint a successor upon
the termination of this Agreement; provided that, in the case of Section
10(b)(viii) or 10(b)(x), the Liquidation Agent shall have the right to appoint a
successor collateral manager. No termination of this Agreement or any removal or
resignation of the Collateral Manager shall be effective until the date as of
which a successor collateral manager shall have agreed in writing to assume all
of the Collateral Manager's duties and obligations pursuant to this Agreement.
Upon the acceptance by a successor collateral manager of such appointment, all
rights and obligations of the Collateral Manager under this Agreement shall
terminate, except as provided in Sections 5, 8, 9, 11 and 16.

 

Page 15

 

 

12.         Representations and Warranties

 

The Collateral Manager hereby represents and warrants to the Issuer as follows
as of the date hereof:

 

(a)          The Collateral Manager is a corporation incorporated under the laws
of the State of Maryland and has full power and authority to own its assets and
to transact the business in which it is currently engaged and is duly qualified
and in good standing under the laws of each jurisdiction where its ownership or
lease of property or the conduct of its business requires, or the performance of
this Agreement would require such qualification, except for those jurisdictions
in which the failure to be so qualified, authorized or licensed would not have a
material adverse effect on the business, operations, assets or financial
condition of the Collateral Manager or on the ability of the Collateral Manager
to perform its obligations under, or on the validity or enforceability of, this
Agreement and the provisions of the Indenture applicable to the Collateral
Manager.

 

(b)          The Collateral Manager has full power and authority to execute,
deliver and perform this Agreement and all obligations required hereunder and
under the provisions of the Indenture applicable to the Collateral Manager, and
has taken all necessary action to authorize this Agreement on the terms and
conditions hereof and the execution, delivery and performance of this Agreement
and all obligations required hereunder and under the terms of the Indenture
applicable to the Collateral Manager. No consent of any other Person, including,
without limitation, any partners or creditors of the Collateral Manager, and no
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required by the Collateral Manager in connection with this Agreement or the
Collateral Administration Agreement, or the execution, delivery, performance,
validity or enforceability of this Agreement, the Collateral Administration
Agreement or the obligations required hereunder, under the Collateral
Administration Agreement or under the terms of the Indenture applicable to the
Collateral Manager. This Agreement has been, and each instrument and document
required hereunder or under the terms of the Indenture shall be, executed and
delivered by a duly authorized officer of the Collateral Manager, and this
Agreement constitutes, and each instrument and document required hereunder or
under the terms of the Indenture when executed and delivered by the Collateral
Manager hereunder or under the terms of the Indenture shall constitute, the
valid and legally binding obligations of the Collateral Manager enforceable
against the Collateral Manager in accordance with their terms, subject to (A)
the effect of bankruptcy, insolvency or similar laws affecting generally the
enforcement of creditors' rights and (B) general equitable principles.

 

(c)          The execution, delivery and performance of this Agreement and the
performance by the Collateral Manager of the terms of the Indenture applicable
to it will not violate any provision of any existing law or regulation binding
the Collateral Manager, or any order, judgment, award or decree of any court,
arbitrator or governmental authority binding on the Collateral Manager, or the
organizational documents of, or any securities issued by, the Collateral Manager
or constitute, with or without giving notice or lapse of time or both, a default
under or result in a breach of any of the terms or provisions of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking to
which the Collateral Manager is a party or by which the Collateral Manager or
any of its assets may be bound, the violation of which would have a material
adverse effect on the ability of the Collateral Manager to perform its
obligations under or the validity or enforceability of this Agreement or
provisions of the Indenture and Collateral Administration Agreement applicable
to the Collateral Manager, and will not result in or require the creation or
imposition of any lien on any of its property, assets or revenues pursuant to
the provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.

 

Page 16

 

 

(d)          There is no charge, investigation, action, suit or proceeding
before or by any court pending or, to the knowledge of the Collateral Manager,
threatened that, if determined adversely to the Collateral Manager, would have a
material adverse effect upon the performance by the Collateral Manager of its
duties under, or on the validity or enforceability of, this Agreement and the
provisions of the Indenture applicable to the Collateral Manager hereunder.

 

(e)          The Collateral Manager is not in violation of its Constitutive
Documents or in breach or violation of or in default under any contract or
agreement to which it is a party or by which it or any of its property may be
bound, or any applicable statute or any rule, regulation or order of any court,
government agency or body having jurisdiction over the Collateral Manager or its
properties, the breach or violation of which or default under which would have a
material adverse effect on the validity or enforceability of this Agreement or
the provisions of the Indenture applicable to the Collateral Manager, or the
performance by the Collateral Manager of its duties hereunder or thereunder.

 

The Collateral Manager's representations and warranties in Sections 12(c) are
given on the assumptions that there shall be no misrepresentations or breach of
covenants by transferees or purchasers of the Notes and do not address the
consequences of such misrepresentations or breach, and that none of the assets
of the Issuer are or will be (or are or will be deemed for purposes of ERISA or
Section 4975 of the Code, or any substantially similar applicable federal,
state, local or non-US law, to be) "plan assets" subject to ERISA or Section
4975 of the Code (or any substantially similar law).

 

13.         Amendment

 

This Agreement may not be modified or amended without the prior written consent
of the Trustee and the Majority Holders and in writing executed by the parties
hereto; provided that any modification or amendment that may adversely affect
the rights of the Liquidation Agent under Section 10 or Section 11 shall require
the prior written consent of the Liquidation Agent. Failure on the part of
either party to insist upon strict compliance by the other with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition.

 

14.         Assignment

 

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors. Any assignment of the Collateral
Manager's obligations under this Agreement (other than to an Affiliate of the
Collateral Manager including, without limitation, the Collateral Manager and any
direct or indirect subsidiary of the Collateral Manager) shall require the
consent of the Issuer and, until the Full Payment Date, the Trustee and the
Majority Holders. Any assignment of the Issuer’s rights, remedies, and
obligations under this Agreement shall require the consent of the Collateral
Manager. Any assignment consented to pursuant to this Section 14 shall bind the
assignee hereunder in the same manner as the assignor is bound. Upon the
execution and delivery of such a counterpart by the assignee, the assignor shall
be released from further obligations pursuant to this Agreement, except with
respect to its obligations arising under Sections 8, 9, 11, 16 and 18 hereof.

 

Page 17

 

 

The Collateral Manager hereby acknowledges that, pursuant to Article 15 of the
Indenture, the Issuer is assigning all of its right, title and interest in, to
and under this Agreement to the Trustee as representative of the Holders and the
Collateral Manager agrees that all of the representations, covenants and
agreements made by the Collateral Manager in this Agreement are also for the
benefit of the Trustee.

 

15.         Entire Agreement; Severability; Headings; Counterparts

 

(a)          This Agreement contains the entire agreement between the parties
relating to the subject matter hereof.

 

(b)          If any term, provision, covenant or condition of this Agreement, or
the application thereof to any party hereto or any circumstance, is held to be
unenforceable, invalid or illegal (in whole or in part) for any reason (in any
relevant jurisdiction), the remaining terms, provisions, covenants and
conditions of this Agreement, modified by the deletion of the unenforceable,
invalid or illegal portion (in any relevant jurisdiction), will continue in full
force and effect, and such unenforceability, invalidity, or illegality will not
otherwise affect the enforceability, validity or legality of the remaining
terms, provisions, covenants and conditions of this Agreement, so long as this
Agreement, as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the
deletion of such portion of this Agreement will not substantially impair the
respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the
parties.

 

(c)          Descriptive headings are for convenience only and shall not control
or affect the meaning or construction of any provision of this Agreement.

 

(d)          This Agreement (and each amendment, modification and waiver in
respect of this Agreement) may be executed and delivered in counterparts
(including by e-mail (PDF) or facsimile transmission), each of which will be
deemed an original, and all of which together constitute one and the same
instrument. Delivery of an executed counterpart signature page of this Agreement
by e-mail (PDF) or facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

Page 18

 

 

16.         Non-Petition; Limited Recourse

 

(a)          Notwithstanding any other provision of this Agreement, the
Collateral Manager agrees not to cause the filing of a petition in bankruptcy or
to institute any reorganization, arrangement, insolvency, moratorium or
liquidation proceedings against the Issuer for the nonpayment of the fees or
other amounts payable by the Issuer to the Collateral Manager under this
Agreement until the payment in full of all Notes issued under the Indenture (and
any other debt obligations of the Issuer that have been rated upon issuance by
any rating agency at the request of the Issuer) and the expiration of a period
equal to one year and a day or, if longer, the applicable preference period then
in effect and one day, following such payment in full. Nothing in this Section
16(a) shall preclude, or be deemed to stop, the Collateral Manager from taking
any action prior to the expiration of the aforementioned period in (A) any case
or proceeding voluntarily filed or commenced by the Issuer or (B) any
involuntary insolvency proceeding filed or commenced by a Person other than the
Collateral Manager. This Section 16(a) shall survive the termination of this
Agreement.

 

(b)          The Collateral Manager agrees that the payment of all amounts to
which it is entitled pursuant to this Agreement shall be subject to the
provisions of Sections 10.3(c) and 11.1 of the Indenture, and the Collateral
Manager agrees to be bound by the provisions of Sections 10.3(c) and 11.1 of the
Indenture as if it were a party thereto. Notwithstanding any other provision of
this Agreement, all of the payment obligations of the Issuer under this
Agreement are limited recourse obligations of the Issuer payable solely as
Administrative Expenses from amounts credited to the Expense Account pursuant to
Section 10.3(c) and 11.1 of the Indenture. The Collateral Manager further agrees
that, except as so contemplated by Section 10.3(c) and 11.1 of the Indenture, it
will not have any recourse against any other asset of the Issuer or against any
Officer, director, employee, partner, member, shareholder or incorporator of the
Issuer or its Affiliates, successors or assigns for the payment of any amounts
payable under this Agreement. It is understood that this Section 16(b) shall not
(i) prevent recourse to the Collateral for the sums due or to become due under
any security, instrument or agreement which is part of the Collateral; or (ii)
constitute a waiver, release or discharge of any indebtedness or obligation
evidenced by the Notes or secured by the Indenture until such Collateral has
been realized and the proceeds thereof applied in accordance with the provisions
of the Indenture, whereupon all obligations of and all claims against the Issuer
hereunder or arising in connection therewith shall be extinguished and shall not
thereafter revive. It is further understood that this Section 16(b) shall not
limit the right of any Person to name the Issuer as a party defendant in any
Proceeding or in the exercise of any other remedy under the Notes or the
Indenture, so long as no judgment in the nature of a deficiency judgment or
seeking personal liability shall be asked for or (if obtained) enforced against
any such Person. The Collateral Manager consents to the assignment of this
Agreement as provided in the Grant of the Indenture. This Section 16(b) shall
survive the termination of this Agreement.

 

17.         Notices

 

Any request, demand, authorization, direction, instruction, order, notice,
consent, waiver or other documents provided or permitted by this Agreement to be
made upon, given, delivered, e-mailed or furnished to, or filed with:

 

(a)          the Issuer shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed, first class
postage prepaid, hand delivered, sent by overnight courier service or by
facsimile in legible form, to the Issuer addressed to it at 405 Park Avenue,
Floor 3, New York, NY 10022, Attention: Bryan Cole/Christopher Masterson,
telephone no. 212.415.6500, facsimile no. 212.421.5799, or at any other address
previously furnished in writing to the other parties hereto by the Issuer, as
the case may be, with a copy to the Collateral Manager at its address below; and

 

Page 19

 

 

(b)          the Collateral Manager shall be sufficient for every purpose
hereunder if in writing and mailed, first class postage prepaid, hand delivered,
sent by overnight courier service or by facsimile in legible form, to the
Collateral Manager addressed to it at 405 Park Avenue, Floor 3, New York, NY
10022, Attention: Shiloh Bates, telephone no. 212.415.6500, facsimile no.
212.421.5799, or at any other address previously furnished in writing to the
parties hereto.

 

To the extent that any demand, notice or communication hereunder is given to the
Collateral Manager by a Responsible Officer of the Issuer, such Responsible
Officer shall be deemed to have the requisite power and authority to bind the
Issuer with respect to such communication, and the Collateral Manager may
conclusively rely upon and shall be protected in acting or refraining from
acting upon any such communication. To the extent that any demand, notice or
communication hereunder is given to the Issuer by a Responsible Officer of the
Collateral Manager, such Responsible Officer shall be deemed to have the
requisite power and authority to bind the Collateral Manager with respect to
such communication, and the Issuer may conclusively rely upon and shall be
protected in acting or refraining from acting upon any such communication.

 

18.         Governing Law; Jurisdiction; Waiver of Jury Trial

 

(a)          This Agreement shall be construed in accordance with, and this
Agreement and any matters arising out of or relating in any way whatsoever to
this Agreement (whether in contract, tort or otherwise), shall be governed by,
the law of the State of New York.

 

(b)          With respect to any suit, action or proceedings relating to this
Agreement or any matter between the parties arising under or in connection with
this Agreement ("Proceedings"), each party irrevocably: (i) submits to the
non-exclusive jurisdiction of the Supreme Court of the State of New York sitting
in the Borough of Manhattan and the United States District Court for the
Southern District of New York, and any appellate court from any thereof; 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 any of the
parties 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. Each party irrevocably consents to the
service of process in any Proceeding by the mailing or delivery of copies of
such process as set forth in Section 17 hereof.

 

(c)          EACH OF THE ISSUER AND THE COLLATERAL MANAGER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY PROCEEDINGS. Each party hereby (i) certifies that no
representative, agent or attorney of the other has represented, expressly or
otherwise, that the other would not, in the event of a Proceeding, seek to
enforce the foregoing waiver and (ii) acknowledges that it has been induced to
enter into this Agreement by, among other things, the mutual waivers and
certifications in this paragraph.

 

Page 20

 

 

19.         Third Party Beneficiaries

 

Nothing in this Agreement, expressed or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, any benefit or any legal
or equitable right, remedy or claim under this Agreement except, with respect to
the Trustee and the Holders, as otherwise expressly provided in this Agreement;
provided that the Liquidation Agent shall be an express third party beneficiary
of Sections 6(e), 10(b), 11(c), 13 and this Section 19.

 

20.         Written Disclosure Statement

 

The Issuer shall provide, if reasonably available to it, and the Issuer shall
use its reasonable efforts to cause each of the Holders (and holders of
beneficial interests in the Notes) and the Trustee to provide, to the Collateral
Manager all information reasonably requested by the Collateral Manager in
connection with regulatory matters, including without limitation any information
that is necessary or advisable in order for the Collateral Manager (or its
parent or Affiliates) to complete its Form ADV, Form PF, any other form required
by the Securities and Exchange Commission, or to comply with any requirement of
the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended from
time to time, and any other laws or regulations applicable to the Collateral
Manager from time to time. The Issuer acknowledges receipt of Part II of the
Collateral Manager's Form ADV more than 48 hours prior to the date of execution
of this Agreement.

 

Page 21

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Management
Agreement to be executed effective as of the day and year first written above.

 

  BDCA HELVETICA FUNDING, LTD.,   as Issuer         By:   /s/ Robert K.
Grunewald   Name: Robert K. Grunewald   Title: Director

  

COLLATERAL MANAGEMENT AGREEMENT

 

 

 

 

  BUSINESS DEVELOPMENT CORPORATION   OF AMERICA,   as Collateral Manager        
By:   /s/ Robert K. Grunewald   Name: Robert K. Grunewald   Title: President and
Chief Investment Officer

 

COLLATERAL MANAGEMENT AGREEMENT