Exhibit 10.23

 

EXECUTION VERSION

 

SALE AND CONTRIBUTION AGREEMENT

 

between

 

BUSINESS DEVELOPMENT CORPORATION OF AMERICA,

 

as Seller

 

and

 

BDCA 2L FUNDING I, LLC,

 

as Purchaser

 

Dated as of February 21, 2014

 

 

 

 

TABLE OF CONTENTS

 

    Page       ARTICLE I      DEFINITIONS 1       SECTION 1.1 Definitions 1
SECTION 1.2 Other Terms 3 SECTION 1.3 Computation of Time Periods 3      
ARTICLE II    CONVEYANCES OF TRANSFERRED ASSETS 3       SECTION 2.1 Conveyances
3 SECTION 2.2 Indemnification 6 SECTION 2.3 Assignment of Beneficial Interest
with Irrevocable Power of Attorney Coupled with an Interest 6       ARTICLE
III  CONSIDERATION AND PAYMENT; REPORTING 6       SECTION 3.1 Purchase Price 6
SECTION 3.2 Payment of Purchase Price 6       ARTICLE IV  REPRESENTATIONS AND
WARRANTIES 7       SECTION 4.1 Seller’s Representations and Warranties 7 SECTION
4.2 Reaffirmation of Representations and Warranties by the Seller; Notice of
Breach 12       ARTICLE V     COVENANTS OF THE SELLER 12       SECTION 5.1
Covenants of the Seller 12       ARTICLE VI   WARRANTY LOANS 15       SECTION
6.1 Warranty Collateral Obligations 15 SECTION 6.2 Dilutions, Etc. 15      
ARTICLE VII   CONDITIONS PRECEDENT 15       SECTION 7.1 Conditions Precedent 15
      ARTICLE VIII  MISCELLANEOUS PROVISIONS 16       SECTION 8.1 Amendments,
Etc. 16

 

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SECTION 8.2 Governing Law: Submission to Jurisdiction 16 SECTION 8.3 Notices 17
SECTION 8.4 Severability of Provisions 17 SECTION 8.5 Assignment 18 SECTION 8.6
Further Assurances 18 SECTION 8.7 No Waiver; Cumulative Remedies 18 SECTION 8.8
Counterparts 18 SECTION 8.9 Binding Effect; Third-Party Beneficiaries 19 SECTION
8.10 Merger and Integration 19 SECTION 8.11 Headings 19

 

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This SALE AND CONTRIBUTION AGREEMENT, dated as of February 21, 2014 (as amended,
supplemented or otherwise modified and in effect from time to time, this
“Agreement”), between BUSINESS DEVELOPMENT CORPORATION OF AMERICA, a Maryland
corporation, as seller (in such capacity, the “Seller”) and BDCA 2L FUNDING I,
LLC, a Delaware limited liability company, as purchaser (in such capacity, the
“Purchaser”).

 

WITNESSETH:

 

WHEREAS, the Purchaser desires to purchase certain loans and related assets
existing on the Effective Date and from time to time thereafter;

 

WHEREAS, the Seller may also wish to contribute certain loans, assets and
related contracts to the capital of the Purchaser on the Effective Date and from
time to time on each Purchase Date;

 

WHEREAS, the Seller desires to sell, assign and contribute such loans, assets
and related contracts to the Purchaser upon the terms and conditions hereinafter
set forth;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, it is hereby agreed by and between the
Purchaser and the Seller as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1 Definitions. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined). All capitalized terms used
herein but not defined herein shall have the respective meanings specified in,
or incorporated by reference into, the Loan Financing and Servicing Agreement,
dated as of the date hereof (as amended, supplemented or otherwise modified and
in effect from time to time, the “Loan Agreement”), by and among the Purchaser,
as borrower, Business Development Corporation of America, as servicer and as
equityholder, Deutsche Bank AG, New York Branch, as administrative agent, U.S.
Bank National Association, as collateral agent and collateral custodian, and the
agents and lenders party from time to time thereto.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Convey” means to sell, transfer, assign, contribute or otherwise convey assets
hereunder.

 

“Conveyance” means, as the context may require, the Initial Conveyance or a
Subsequent Conveyance.

 

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“Indorsement” has the meaning specified in Section 8 102(a)(11) of the UCC, and
“Indorsed” has a corresponding meaning.

 

“Initial Conveyance” means either the Initial Conveyance of Collateral
Obligations or the Initial Conveyance of Beneficial Interest in Reference
Assets, as applicable.

 

“Initial Conveyance of Beneficial Interest in Reference Assets” has the meaning
set forth in Section 2.1(c).

 

“Initial Conveyance of Collateral Obligations” has the meaning set forth in
Section 2.1(a).

 

“Payment Date” means each Subsequent Conveyance Date and the date of the Initial
Conveyance.

 

“Power of Attorney” has the meaning set forth in Section 2.3.

 

“Purchase Date” has the meaning set forth in Section 2.1(b).

 

“Purchase Notice” has the meaning set forth in Section 2.1(b).

 

“Purchase Price” has the meaning set forth in Section 3.1.

 

“Purchaser” has the meaning set forth in the preamble hereto.

 

“Schedule of Collateral Obligations” has the meaning set forth in Section
2.1(a).

 

“Seller” has the meaning set forth in the preamble hereto.

 

“Subsequent Conveyance” means either the Subsequent Conveyance of Collateral
Obligations or the Subsequent Conveyance of Beneficial Interest in Reference
Assets, as applicable.

 

“Subsequent Conveyance of Beneficial Interest in Reference Assets” has the
meaning set forth in Section 2.1(d).

 

“Subsequent Conveyance Date of Beneficial Interest in Reference Assets” has the
meaning set forth in Section 2.1(d).

 

“Subsequent Conveyance Date” means either the Subsequent Conveyance Date of
Collateral Obligations or the Subsequent Conveyance Date of Beneficial Interest
in Reference Assets, as applicable.

 

“Subsequent Conveyance of Collateral Obligations” has the meaning set forth in
Section 2.1(b).

 

“Subsequent Conveyance Date of Collateral Obligation” has the meaning set forth
in Section 2.1(b).

 

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“Transferred Assets” means, collectively, the Transferred Collateral Obligations
and Related Security and Transferred Beneficial Interests that are Conveyed by
the Seller to the Purchaser hereunder.

 

“Transferred Beneficial Interests” means the Seller’s beneficial interest in
each Reference Asset, including, but not limited to, any and all Reference Asset
Collections with respect to each such Reference Asset, but expressly excluding
legal title of each such Reference Asset (which legal title shall remain with
Seller).

 

“Transferred Collateral Obligations” means each Collateral Obligation that is
Conveyed from the Seller to the Purchaser pursuant to the terms of this
Agreement.

 

“Warranty Collateral Obligations” has the meaning set forth in Section 6.1.

 

SECTION 1.2 Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles.
All terms used in Article 9 of the UCC, and not specifically defined herein, are
used herein as defined in such Article 9. The term “including” when used in this
Agreement means “including without limitation.”

 

SECTION 1.3 Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word “from” means “from and including” and the words
“to” and “until” each means “to but excluding.”

 

ARTICLE II

 

CONVEYANCES OF TRANSFERRED ASSETS

 

SECTION 2.1 Conveyances.

 

(a)          On the terms and subject to the conditions set forth in this
Agreement, the Seller agrees to (i) Convey to the Purchaser on the Effective
Date, and the Purchaser agrees to purchase from the Seller on the Effective Date
(the “Initial Conveyance of Collateral Obligations”), all of the Seller’s right,
title and interest in and to each Collateral Obligation listed on Schedule A to
this Agreement (as such schedule may be amended, supplemented, updated or
otherwise modified from time to time, the “Schedule of Collateral Obligations”)
(the Schedule of Collateral Obligations, as amended, supplemented, updated or
otherwise modified shall become part of the Schedule of Collateral Obligations
attached to the Loan Agreement), together with all other Related Security and
all proceeds of the foregoing but excluding the Retained Interests (if any) for
such Collateral Obligation.

 

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(b)          In the event the Purchaser agrees, from time to time after the
Effective Date, to acquire additional Collateral Obligations (including Related
Security) from the Seller, the Purchaser shall deliver written notice thereof to
the Administrative Agent substantially in the form set forth in Schedule C
hereto (each, a “Purchase Notice”), designating the date (each, a “Purchase
Date”) of the proposed Conveyance (a “Subsequent Conveyance Date of Collateral
Obligations”) and attaching a supplement to the Schedule of Collateral
Obligations identifying the additional Collateral Obligations and Related
Security proposed to be Conveyed. On the terms and subject to the conditions set
forth in this Agreement and the Loan Agreement, the Seller shall Convey to the
Purchaser, and the Purchaser shall purchase, on the applicable Subsequent
Conveyance Date of Collateral Obligations (each such purchase and sale being
herein called a “Subsequent Conveyance of Collateral Obligations”), all of the
Seller’s right, title and interest in and to each Collateral Obligation then
reported by the Seller on the Schedule of Collateral Obligations attached to the
related Purchase Notice, together with all other Related Security and all
proceeds of the foregoing.

 

(c)          On the terms and subject to the conditions set forth in this
Agreement, the Seller agrees to (i) Convey to the Purchaser on the Effective
Date, and the Purchaser agrees to purchase from the Seller on the Effective Date
(the “Initial Conveyance of Beneficial Interest in Reference Assets”), the
Transferred Beneficial Interests with respect to each Reference Asset listed on
Schedule B to this Agreement (as such schedule may be amended, supplemented,
updated or otherwise modified from time to time, the “Schedule of Reference
Assets”). The Schedule of Reference Assets, as amended, supplemented, updated or
otherwise modified shall become part of “Schedule 5: Reference Assets” attached
to the Loan Agreement.

 

(d)          In the event the Purchaser agrees, from time to time after the
Effective Date, to acquire from the Seller the beneficial interest in any
additional Reference Assets, the Purchaser shall deliver a Purchase Notice
designating the date of the proposed Conveyance (a “Subsequent Conveyance Date
of Beneficial Interest in Reference Assets”), and attaching a supplement to the
Schedule of Reference Assets identifying the additional Transferred Beneficial
Interests proposed to be Conveyed. On the terms and subject to the conditions
set forth in this Agreement and the Loan Agreement, the Seller shall Convey to
the Purchaser, and the Purchaser shall purchase, on the applicable Subsequent
Conveyance Date of Beneficial Interest in Reference Assets (each such purchase
and sale being herein called a “Subsequent Conveyance of Beneficial Interest in
Reference Assets”), the additional Transferred Beneficial Interests with respect
to each Reference Asset then reported by the Seller on the Schedule of Reference
Assets attached to the related Purchase Notice.

 

(e)          It is the express intent of the Seller and the Purchaser that each
Conveyance of Transferred Assets by the Seller to the Purchaser pursuant to this
Agreement be construed as an absolute sale and/or contribution of such
Transferred Assets by the Seller to the Purchaser; provided, however, the Seller
and the Purchaser acknowledge and agree that legal title of all Reference Assets
shall remain with the Seller. Further, it is not the intention of the Seller and
the Purchaser that any purchase be deemed a grant of a security interest in the
Transferred Assets by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. However, in the event that, notwithstanding the intent
of the parties, the Conveyances hereunder shall be characterized as loans and
not as sales and/or contributions, then (i) this Agreement also shall be deemed
to be, and hereby is, a security agreement within the meaning of the UCC and
other applicable law and (ii) the Conveyances by the Seller provided for in this
Agreement shall be deemed to be, and the Seller hereby grants to the Purchaser,
a security interest in, to and under all of the Seller’s right, title and
interest in, to and under, whether now owned or hereafter acquired, such
Transferred Assets and all proceeds of the foregoing. The Purchaser and its
assignees shall have, with respect to such Transferred Assets and other related
rights, in addition to all the other rights and remedies available to the
Purchaser and its assignees and under the other Transaction Documents, all the
rights and remedies of a secured party under any applicable UCC.

 

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The Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Transferred Assets to
secure a debt or other obligation, such security interest would be deemed to be
a perfected security interest in favor of the Purchaser under applicable law and
will be maintained as such throughout the term of this Agreement. The Seller
represents and warrants that the Transferred Assets are being transferred with
the intention of removing them from the Seller’s estate pursuant to Section 541
of the Bankruptcy Code.

 

(f)           In connection with the Initial Conveyance, the Seller agrees to
file on or prior to the Effective Date, at its own expense, a financing
statement or statements with respect to the Transferred Assets that are Conveyed
by the Seller hereunder from time to time meeting the requirements of applicable
state law in the jurisdiction of the Seller’s organization to perfect and
protect the interests of the Purchaser created hereby under the UCC against all
creditors of, and purchasers from, the Seller, and to deliver a file-stamped
copy of such financing statements or other evidence of such filings to the
Purchaser as soon as reasonably practicable after its receipt thereof.

 

(g)          The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents and take all actions
as may be reasonably necessary or as the Purchaser may reasonably request, in
order to perfect or protect the interest of the Purchaser in the Transferred
Assets purchased hereunder or to enable the Purchaser to exercise or enforce any
of its rights hereunder. Without limiting the foregoing, the Seller will, in
order to accurately reflect the Conveyances contemplated by this Agreement,
execute and file such financing or continuation statements or amendments thereto
or assignments thereof (as permitted pursuant hereto) or other documents or
instruments as may be reasonably requested by the Purchaser and mark its master
computer records (or related sub-ledger) noting the purchase by the Purchaser of
the Transferred Assets and the Lien of the Collateral Agent pursuant to the Loan
Agreement. The Seller hereby authorizes the Purchaser to file and, to the
fullest extent permitted by applicable law the Purchaser shall be permitted to
sign (if necessary) and file, initial financing statements, continuation
statements and amendments thereto and assignments thereof without the Seller’s
signature; provided that the description of collateral contained in such
financing statements shall be limited to only Transferred Assets. Carbon,
photographic or other reproduction of this Agreement or any financing statement
shall be sufficient as a financing statement.

 

(h)          Each of the Seller and the Purchaser agree that prior to any
Conveyance of any Transferred Asset hereunder, the Purchaser has no rights to or
claim of benefit from any such Transferred Asset.

 

(i)           Each Conveyance under this Agreement shall be without recourse
except as otherwise expressly provided in this Agreement.

 

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SECTION 2.2 Indemnification. Without limiting any other rights which any such
Person may have hereunder or under applicable law, the Seller agrees to
indemnify on an after-tax basis the Purchaser and its successors, transferees,
and assigns (including each Secured Party) and all officers, directors,
shareholders, controlling persons, employees and agents of any of the foregoing
(each of the foregoing Persons being individually called an “Indemnified
Party”), forthwith on demand, from and against any and all damages, losses,
claims, liabilities and related costs and expenses, including reasonable
attorneys’ fees and disbursements (all of the foregoing being collectively
called “Indemnified Amounts”) awarded against or incurred by any of them arising
out of any acts or omissions of the Seller and relating to this Agreement and
the transactions contemplated hereby, excluding, however, (a) Indemnified
Amounts in respect of any Transferred Asset due to creditworthiness of the
related Obligor, (b) Indemnified Amounts payable to an Indemnified Party to the
extent determined by a court of competent jurisdiction to have resulted from
gross negligence, bad faith or willful misconduct on the part of any Indemnified
Party or its agent or subcontractor, (c) except as otherwise specifically
provided herein, non-payment by any Obligor of an amount due and payable with
respect to a Transferred Asset or (d) any Excluded Taxes.

 

SECTION 2.3 Assignment of Beneficial Interest with Irrevocable Power of Attorney
Coupled with an Interest. To further document and effectuate the Initial
Conveyance of Beneficial Interest in Reference Assets and each Subsequent
Conveyance of Beneficial Interest in Reference Assets as provided in Sections
2.1(c) and 2.1(d) of this Agreement, concurrent with each such Conveyance, the
Seller shall execute and deliver to the Purchaser an Assignment of Beneficial
Interest With Irrevocable Power of Attorney Coupled with an Interest in the form
attached hereto as Schedule D (each, a “Power of Attorney”).

 

ARTICLE III

 

CONSIDERATION AND PAYMENT; REPORTING

 

SECTION 3.1 Purchase Price. The purchase price (the “Purchase Price”) for the
Transferred Assets Conveyed on each Purchase Date shall be a dollar amount equal
to the fair market value (as agreed upon between the Seller and the Purchaser at
the time of such Conveyance) of such Transferred Assets as of such date.

 

SECTION 3.2 Payment of Purchase Price. The Purchase Price shall be paid on the
related Purchase Date (a) by payment in cash in immediately available funds in
an amount not greater than the sum of (i) the proceeds of Advances made to the
Purchaser with respect to such Transferred Assets to be Conveyed on such
Purchase Date and (ii) amounts constituting Principal Collections in the
Collections Account utilized for a Reinvestment pursuant to Section 8.3(b) of
the Loan Agreement and (b) by the Seller making a capital contribution to the
Purchaser in an amount equal to the remaining portion of the Purchase Price not
paid in cash pursuant to clause (a) above.

 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.1 Seller’s Representations and Warranties. The Seller represents and
warrants to the Purchaser as of the Effective Date and as of each Purchase Date:

 

(a)          Organization and Good Standing. The Seller has been duly organized
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of organization, with power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is currently conducted. The Seller is duly qualified to do business as a
Maryland corporation in good standing and has obtained all necessary licenses
and approvals in all jurisdictions except where the failure to not do so would
not reasonably be expected to have a Material Adverse Effect.

 

(b)          Power and Authority. The Seller has the power, authority and legal
right to own, pledge, mortgage, operate and convey the Transferred Assets, to
conduct its business as now, or proposed to be, conducted and to execute and
deliver this Agreement and the Transaction Documents to which it is a party (in
any capacity) and to perform its obligations hereunder and thereunder.

 

(c)          Authorization; Contravention. The execution, delivery and
performance of this Agreement and the Transaction Documents to which it is a
party (in any capacity) have been duly authorized by the Seller by all necessary
corporate action. The execution, delivery and performance of this Agreement and
the Transaction Documents to which it is a party (in any capacity), the
consummation of the transactions contemplated thereby and the fulfillment of the
terms thereof do not (A) conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of time) a
default under, its organizational documents, or any material indenture,
agreement, mortgage, deed of trust or other instrument to which it is a party or
by which it or its properties are bound, (B) result in the creation or
imposition of any Adverse Claim upon any of its properties pursuant to the terms
of any such material indenture, agreement, mortgage, deed of trust or other
instrument (except as may be created pursuant to this Agreement or any other
Transaction Document), or (C) violate in any material respect any Applicable Law
except, in the case of this subclause (C), to the extent that such conflict or
violation would not reasonably be expected to have a Material Adverse Effect.

 

(d)          Execution and Delivery. This Agreement and the Transaction
Documents to which it is a party (in any capacity) have been duly executed and
delivered by the Seller.

 

(e)          Governmental Authorization. No consent, license, approval,
authorization or order of, or registration, declaration or filing with, any
Official Body having jurisdiction over the Seller or any of its properties is
required to be made in connection with the execution, delivery or performance of
this Agreement and the Transaction Documents to which it is a party (in any
capacity) or the consummation of the transactions contemplated thereby, in each
case other than (A) consents, licenses, approvals, authorizations, orders,
registrations, declarations or filings which have been obtained or made and
continuation statements and renewals in respect thereof and (B) where the lack
of such consents, licenses, approvals, authorizations, orders, registrations,
declarations or filings would not have a Material Adverse Effect.

 

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(f)           Legality; Validity; Enforceability. Assuming due authorization,
execution and delivery by each other party hereto and thereto, this Agreement
and the Transaction Documents to which the Seller is a party (in any capacity)
constitute its legal, valid and binding obligations enforceable against it in
accordance with their respective terms, except as such enforceability may be
limited by (A) bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors’ rights generally, (B) equitable
limitations on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law and (C) implied
covenants of good faith and fair dealing.

 

(g)          No Litigation. There are no proceedings or investigations pending
or, to the best of the Seller’s knowledge, threatened against it, before any
Official Body having jurisdiction over it or its properties (A) asserting the
invalidity of any of the Transaction Documents, (B) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by the Transaction Documents, (C) seeking any determination or
ruling that would reasonably be expected to have a Material Adverse Effect or
(D) seeking to impose any excise, franchise, transfer or similar tax upon the
conveyance of the Transferred Assets hereunder.

 

(h)          Legal Compliance. The Seller has complied and will comply in all
material respects with all Applicable Laws, judgments, agreements with
governmental authorities, decrees and orders with respect to its business and
properties and the Transferred Assets.

 

(i)           Tax Status. The Seller has timely filed all federal and other
material tax returns (foreign, federal, state, local and otherwise) required to
be filed by it and has paid all federal and other material taxes due and payable
by it or any assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by any
governmental authority (other than any amount the validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
Seller). It is not liable for taxes payable by any other Person. No tax lien or
similar Adverse Claim has been filed, and no claim has been filed or is being
asserted, with respect to any such tax, fee, assessment or other governmental
charge. Any taxes, fees and other governmental charges payable by the Seller in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents and the execution and delivery of this Agreement and the
Transaction Documents have been paid or shall have been paid if and when due at
or prior to the Effective Date or the Purchase Date, as applicable.

 

(j)           Place of Business. The principal place of business and chief
executive office of the Seller, and the offices where the Seller keeps all its
Records, are located at its address specified in Section 8.3, or such other
locations notified to the Purchaser in accordance with this Agreement in
jurisdictions where all action required by the terms of this Agreement has been
taken and completed. There are currently no, and during the past four months (or
such shorter time as the Seller has been in existence) there have not been, any
other locations where the Seller is located (as that term is used in the UCC of
the jurisdiction where such principal place of business is located).

 

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(k)          Backup Security Interest. In the event that, notwithstanding the
intent of the parties, the Conveyances hereunder shall be characterized as loans
and not as sales and/or contributions, then this Agreement creates a valid and
continuing Lien on the Transferred Assets in favor of the Purchaser and the
Collateral Agent, as assignee, for the benefit of the Secured Parties, which
security interest is validly perfected under Article 9 of the UCC, and is
enforceable as such against creditors of and purchasers from the Borrower; the
Transferred Assets are comprised of Instruments, Security Entitlements, General
Intangibles, Certificated Securities, Uncertificated Securities, Securities
Accounts, Investment Property and Proceeds and such other categories of
collateral under the applicable UCC as to which the Seller has complied with its
obligations as set forth herein; with respect to Transferred Assets that
constitute Security Entitlements, (A) all of such Security Entitlements have
been credited to the Collection Account or Reference Asset Account, as
applicable, and the Securities Intermediary has agreed to treat all assets
credited to the Collection Account or Reference Asset Account, as applicable, as
Financial Assets, (B) all steps necessary to enable the Collateral Agent to
obtain Control with respect to the Collection Account or Reference Asset
Account, as applicable, have been taken and (C) the Collection Account or
Reference Asset Account, as applicable, is not in the name of any Person other
than the Purchaser, subject to the Lien of the Collateral Agent for the benefit
of the Secured Parties; the Purchaser has not instructed the Securities
Intermediary to comply with the entitlement order of any Person other than the
Collateral Agent; provided that, until the Collateral Agent delivers a Notice of
Exclusive Control (as defined in the Account Control Agreement), the Purchaser
(or the Servicer on its behalf) may cause cash in the Collection Account or
Reference Asset Account, as applicable, to be invested in Permitted Investments,
and the proceeds thereof to be paid and distributed in accordance with the Loan
Agreement; all Accounts constitute Securities Accounts; the Seller owns and has
good and marketable title to the Transferred Assets purchased by the Purchaser
on the applicable Purchase Date, free and clear of any Lien (other than
Permitted Liens); the Seller has received all consents and approvals required by
the terms of any Collateral Obligation to the sale and granting of a security
interest in the Collateral Obligations hereunder to the Purchaser and the
Collateral Agent, as assignee on behalf of the Secured Parties; the Seller has
taken all necessary steps to file or authorize the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under Applicable Law in order to perfect the security interest in
that portion of the Transferred Assets in which a security interest may be
perfected by filing pursuant to Article 9 of the UCC as in effect in Maryland;
all original executed copies of each underlying promissory note constituting or
evidencing any Transferred Asset have been or, subject to the delivery
requirements contained in the Loan Agreement, will be delivered to the
Collateral Custodian; the Seller has received, or subject to the delivery
requirements contained the Loan Agreement will receive, a written acknowledgment
from the Collateral Agent that the Collateral Agent or its bailee is holding
each underlying promissory note evidencing a Collateral Obligation solely on
behalf of the Collateral Agent for the benefit of the Secured Parties; none of
the underlying promissory notes that constitute or evidence the Collateral
Obligations has any marks or notations indicating that they have been pledged,
assigned or otherwise conveyed to any Person other than the Purchaser and the
Collateral Agent, as assignee on behalf of the Secured Parties; with respect to
a Transferred Asset that constitutes a Certificated Security, such certificated
security has been delivered to the Collateral Agent, as assignee of the
Purchaser on behalf of the Secured Parties and, if in registered form, has been
specially Indorsed (within the meaning of the UCC) to the Collateral Agent or in
blank by an effective Indorsement or has been registered in the name of the
Collateral Agent upon original issue or registration of transfer by the Seller
of such Certificated Security; and in the case of an Uncertificated Security, by
(A) causing the Collateral Agent to become the registered owner of such
uncertificated security and (B) causing such registration to remain effective.

 

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(l)          Fair Consideration; No Avoidance for Collateral Obligation
Payments. With respect to each Transferred Collateral Obligation sold hereunder,
the Seller sold such Transferred Collateral Obligation to the Purchaser in
exchange for payment, made in accordance with the provisions of this Agreement,
in an amount which constitutes fair consideration and reasonably equivalent
value. Each such Conveyance referred to in the preceding sentence shall not have
been made for or on account of an antecedent debt owed by the Seller to the
Purchaser and, accordingly, no such sale is or may be voidable or subject to
avoidance under Title 11 of the Bankruptcy Code and the rules and regulations
thereunder. In addition, no such Conveyance shall have been made with the intent
to hinder or delay payment to or defraud any creditor of the Seller.

 

(m)         Eligibility of Transferred Collateral Obligations. Each Transferred
Collateral Obligation that is Conveyed hereunder is, at the time of such
Conveyance, an Eligible Collateral Obligation. At the time of such Conveyance,
no event has occurred and is continuing which could reasonably be expected to
affect the collectibility of such Transferred Collateral Obligation or cause it
not to be paid in full. As of each Purchase Date, the Schedule of Collateral
Obligations provide an accurate and complete listing of all the Transferred
Collateral Obligations as of such Purchase Date and the information contained
therein with respect to the identity of the Obligor of such Transferred
Collateral Obligations and the amounts owing with respect thereto is true and
correct in all material respects.

 

(n)         Solvency. The Seller is not the subject of any Insolvency Event. The
transactions under this Agreement and any other Transaction Document to which
the Seller is a party do not and will not render the Seller not Solvent.

 

(o)         Reserved.

 

(p)         Information True and Correct. All information heretofore or
hereafter furnished by or on behalf of the Seller in writing to any Lender, the
Collateral Agent or the Administrative Agent in connection with this Agreement
or any transaction contemplated hereby is and will be (when taken as a whole)
true and correct in all material respects and does not and will not omit to
state a material fact necessary to make the statements contained therein not
misleading.

 

(q)         Selection Procedures. In selecting the Collateral Obligations
hereunder and for Affiliates of the Borrower, no selection procedures (taking
into account the type of assets included in the Collateral Obligations) were
employed which are intended to be adverse to the interests of any Agent or
Lender.

 

-10-

 

 

(r)          Investment Company Status. The Seller is a “business development
company” within the meaning of the 1940 Act.

 

(s)          Payment in Full. The Seller has no knowledge of any fact which
leads it or should have led a reasonable person to expect that any payments on
any Transferred Asset at the time of Conveyance will not be paid in full when
due or to expect any other material adverse effect on (A) the performance by the
Seller of its obligations under this Agreement or any of the Transaction
Documents, (B) the validity or enforceability of this Agreement or any of the
Transaction Documents, or (C) the Transferred Assets or the interests of the
Seller therein.

 

(t)          Representations and Warranties True and Correct. Each of the
representations and warranties of the Seller contained in the Transaction
Documents (other than this Agreement) is true and correct in all material
respects and the Seller hereby makes each such representation and warranty to,
and for the benefit of, the Borrower, the Lenders and the Administrative Agent,
as if the same were set forth in full in this Agreement.

 

(u)         No Unmatured Servicer Default; Servicer Default; Unmatured Facility
Termination Event; Facility Termination Event. No Unmatured Servicer Default,
Servicer Default, Unmatured Facility Termination Event or Facility Termination
Event has occurred and is continuing.

 

(v)         Credit and Collection Policy. All of the Transferred Collateral
Obligations have been originated and are being serviced in accordance with the
Credit and Collection Policy.

 

(w)         No Brokers or Finders. No broker or finder acting on behalf of the
Seller was employed or utilized in connection with this Agreement or the other
Transaction Documents or the transactions contemplated hereby or thereby and the
Seller has no obligation to any Person in respect of any finder’s or brokerage
fees in connection therewith.

 

(x)          Restricted Payments. The Seller shall not cause or permit the
Purchaser to make any payments or distributions which would violate Section
10.16 of the Loan Agreement.

 

(y)         Special Purpose Entity. The Purchaser is an entity with assets and
liabilities separate and distinct from those of the Seller and any Affiliates
thereof, and the Seller hereby acknowledges that the Administrative Agent, the
Lenders and the other Secured Parties are entering into the transactions
contemplated by the Loan Agreement in reliance upon the Purchaser’s identity as
a legal entity that is separate from the Seller and from each other Affiliate of
the Seller. Therefore, from and after the date of execution and delivery of this
Agreement, the Seller shall take all reasonable steps, including all steps that
the Purchaser or the Administrative Agent may from time to time reasonably
request, to maintain the Purchaser’s identity as a legal entity that is separate
from the Seller and from each other Affiliate of the Seller, and to make it
manifest to third parties that the Purchaser is an entity with assets and
liabilities distinct from those of the Seller and each other Affiliate thereof
and not just a division of the Seller or any such other Affiliate.

 

(z)          Reserved.

 

-11-

 

 

(aa)        Set–Off, etc. No Transferred Assets have been compromised, adjusted,
extended, satisfied, subordinated, rescinded, set–off or modified by the Seller
or by the Obligor thereof, and no Transferred Assets are subject to compromise,
adjustment, extension, satisfaction, subordination, rescission, set–off,
counterclaim, defense, abatement, suspension, deferment, deduction, reduction,
termination or modification, whether arising out of transactions concerning the
Transferred Assets or otherwise, by the Seller or by the Obligor with respect
thereto, except, in each case, for amendments, extensions and modifications, if
any, to such Transferred Assets otherwise permitted under the Transaction
Documents and in accordance with the Servicing Standard.

 

(bb)      No Fraud. Each Transferred Collateral Obligation was originated
without any fraud or material misrepresentation by the Seller or, to the
Seller’s knowledge, on the part of the related Obligor.

 

(cc)       Ownership and Price of Collateral Obligations. Each Transferred
Collateral Obligation was acquired by the Seller for its own account not less
than two Business Days prior to the time of conveyance of such Collateral
Obligation hereunder. The Purchase Price for each such Transferred Collateral
Obligation represents the fair market value of such Transferred Collateral
Obligation as of the time of conveyance hereunder.

 

SECTION 4.2 Reaffirmation of Representations and Warranties by the Seller;
.Notice of Breach. The representations and warranties set forth in Section 4.1
shall survive (i) the Conveyance of the Transferred Assets to the Purchaser,
(ii) the termination of the rights and obligations of the Purchaser and the
Seller under this Agreement and (iii) the termination of the rights and
obligations of the Purchaser under the Loan Agreement. Upon discovery by a
Responsible Officer of the Purchaser or the Seller of a breach of any of the
foregoing representations and warranties in any material respect, the party
discovering such breach shall give prompt written notice to the other and to the
Administrative Agent.

 

ARTICLE V

 

COVENANTS OF THE SELLER

 

SECTION 5.1 Covenants of the Seller. The Seller hereby covenants and agrees with
the Purchaser that, from the date hereof, and until all amounts owed by the
Seller pursuant to this Agreement have been paid in full (other than as
expressly survive the termination of this Agreement), unless the Purchaser
otherwise consents in writing:

 

(a)          Compliance with Agreements and Applicable Laws. The Seller shall
perform each of its obligations under this Agreement and the other Transaction
Documents and comply with all Applicable Laws, including those applicable to the
Transferred Collateral Obligations and all proceeds thereof, except to the
extent that the failure to so comply would not reasonably be expected to have a
Material Adverse Effect.

 

-12-

 

 

(b)          Maintenance of Existence and Conduct of Business. The Seller shall:
(i) do or cause to be done all things necessary to (A) preserve and keep in full
force and effect its existence as a corporation and its rights and franchises in
the jurisdiction of its formation and (B) qualify and remain qualified as a
foreign corporation in good standing and preserve its rights and franchises in
each jurisdiction in which the failure to so qualify and remain qualified and
preserve its rights and franchises would reasonably be expected to have a
Material Adverse Effect; (ii) continue to conduct its business substantially as
now conducted or as otherwise permitted hereunder or under its organizational
documents; and (iii) at all times maintain, preserve and protect all of its
licenses, permits, charters and registrations except where the failure to
maintain, preserve and protect such licenses, permits, charters and
registrations would not reasonably be expected to have a Material Adverse
Effect.

 

(c)          Cash Management Systems: Deposit of Collections. To the extent the
Seller (in its capacity as such) receives any Collections or Reference Asset
Collections with respect to the Transferred Assets, the Seller shall transfer,
or cause to be transferred, all such Collections to the Collection Account and
all such Reference Asset Collections to the Reference Asset Account by the close
of business on the second Business Day following the date such Collections are
received and identified.

 

(d)          Books and Records. The Seller shall keep proper books of record and
account in which full and correct entries shall be made of all financial
transactions and the assets and business of the Seller in accordance with GAAP,
maintain and implement administrative and operating procedures, and keep and
maintain all documents, books, records and other information necessary or
reasonably advisable and relating to the Transferred Assets prior to their
Conveyance hereunder for the collection of all Transferred Assets.

 

(e)          Accounting of Purchases. Other than for tax and consolidated
accounting purposes, the Seller will not account for or treat the transactions
contemplated hereby in any manner other than as a sale or contribution of the
Transferred Assets by the Seller to the Purchaser; provided that for federal
income tax reporting purposes, the Purchaser is treated as a “disregarded
entity” and, therefore, the transfer of Transferred Assets by the Seller to the
Purchaser hereunder will not be recognized.

 

(f)           Payment, Performance and Discharge of Obligations. The Seller
shall pay, perform and discharge or cause to be paid, performed and discharged
promptly all Charges payable by it except where the failure to so pay, discharge
or otherwise satisfy such obligation would not, individually or in the
aggregate, be expected to have a Material Adverse Effect.

 

(g)          Taxes. The Seller will file on a timely basis all federal and other
material Tax returns (including foreign, state, local and otherwise) required to
be filed and will pay all taxes due and payable by it or any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Official Body (other than any amount
the validity of which is contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP are provided on the books
of the Seller).

 

(h)          ERISA. The Seller shall not, and shall not cause or permit any of
its Affiliates to, cause or permit to occur an event that results in the
imposition of a Lien on any Transferred Asset under Section 412 of the IRC or
Section 303(K) or 4068 of ERISA.

 

-13-

 

 

(i)           Compliance with Collateral Obligations and Servicing Standard. The
Seller, to the extent it is Servicer and in its capacity as such, shall, at its
expense, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under any Collateral
Obligations and shall comply with the Credit and Collection Policy and the
Servicing Standard with respect to all Collateral Obligations.

 

(j)           Liens. The Seller shall not create, incur, assume or permit to
exist any Lien on or with respect to any of its rights under any of the
Transaction Documents or with respect to the Transferred Assets other than
Permitted Liens. For the avoidance of doubt, this Section 5.1(j) shall not apply
to any property retained by the Seller and not Conveyed or purported to be
Conveyed hereunder.

 

(k)          Change of Name. Etc. The Seller shall not change its name, identity
or corporate structure in any manner that would make any financing statement or
continuation statement filed by the Seller (or by the Administrative Agent on
behalf of the Seller) in accordance with Section 2.1(f) seriously misleading or
change its jurisdiction of organization, unless the Seller shall have given the
Purchaser at least 30 days prior written notice thereof, and shall promptly file
appropriate amendments to all previously filed financing statements and
continuation statements.

 

(l)           Sale Characterization. The Seller shall not make statements or
disclosures, or treat the transactions contemplated by this Agreement (other
than for tax or accounting purposes) in any manner other than as a true sale,
contribution or absolute assignment of the title to and sole record and
beneficial ownership interest of the Transferred Collateral Obligations;
provided that the Seller may consolidate the Purchaser and/or its properties and
other assets for accounting purposes in accordance with GAAP and shall, in any
such consolidated financial statement of the Seller, disclose appropriately in a
footnote that such Transferred Collateral Obligations are held by the Purchaser.

 

(m)         Commingling. The Seller shall not, and shall not permit any of its
Affiliates to, deposit or permit the deposit of any funds that do not constitute
Collections (or other proceeds of any Collateral Obligations) or Reference Asset
Collections into the Collection Account or Reference Asset Account, as
applicable.

 

(n)          Separate Identity. The Seller acknowledges that the Administrative
Agent, the Lenders and the other Secured Parties are entering into the
transactions contemplated by this Agreement and the Loan Agreement in reliance
upon the Purchaser’s identity as a legal entity that is separate from the Seller
and each other Affiliate of the Seller. Accordingly, from and after the date of
execution and delivery of this Agreement, the Seller will take all reasonable
steps to maintain the Purchaser’s identity as a legal entity that is separate
from the Seller and each other Affiliate of the Seller and to make it manifest
to third parties that the Purchaser is an entity with assets and liabilities
distinct from those of the Seller and each other Affiliate thereof and not just
a division of the Seller or any such other Affiliate. Without limiting the
generality of the foregoing and in addition to the other covenants set forth
herein, the Seller will take all other actions necessary on its part to ensure
that the Purchaser is at all times in compliance with Section 10.5 of the Loan
Agreement.

 

-14-

 

 

(o)          Irrevocable Instructions as to Reference Asset Collections. Within
four (4) Business Days of the Initial Conveyance of Beneficial Interest of
Reference Assets and each Subsequent Conveyance of Beneficial Interest in
Reference Assets, the Seller shall deliver (i) to the related Obligor (or paying
agent, as applicable) irrevocable instructions to make all future payments of
Reference Asset Collections thereon to the Reference Asset Account and (ii) to
the Purchaser evidence reasonably satisfactory to the Purchaser that such
irrevocable payment instruction have been so delivered.

 

ARTICLE VI

 

WARRANTY LOANS

 

SECTION 6.1 Warranty Collateral Obligations. The Seller agrees that, with
respect to any Transferred Collateral Obligation, in the event of a breach of
any representation or warranty or covenant applicable to a Transferred Asset set
forth in Article IV or Article V (each such Transferred Collateral Obligation,
an “Warranty Collateral Obligation”), no later than 30 days after the earlier of
(x) knowledge of such breach on the part of the Seller and (y) receipt by the
Seller of written notice thereof given by the Purchaser, the Administrative
Agent or any other Secured Party, the Seller shall either (a) pay to the
Collection Account in immediately available funds the Repurchase Amount with
respect to the Warranty Collateral Obligation(s) to which such breach relates or
(b) substitute for such Warranty Collateral Obligation(s) one or more Eligible
Collateral Obligation with an aggregate Collateral Obligation Amount at least
equal to the Repurchase Amount of the Warranty Collateral Obligation(s) being
replaced; provided, that no such repayment or substitution shall be required to
be made with respect to any Warranty Collateral Obligation (and such Collateral
Obligation shall cease to be a Warranty Collateral Obligation) if, on or before
the expiration of such 30 day period, the representations and warranties in
Article IV and the covenants in Article V with respect to such Warranty
Collateral Obligation shall be made true and correct in all material respects
with respect to such Warranty Collateral Obligation as if such Warranty
Collateral Obligation had been Conveyed to the Purchaser on such day.

 

SECTION 6.2 Dilutions, Etc. The Seller agrees that if, on any day following the
Revolving Period, the Principal Balance of a Transferred Collateral Obligation
that has been sold by the Seller hereunder is either reduced or adjusted as a
result of any setoff by the Obligor against the Seller, the Seller shall be
deemed to have received on such day a Collection of such Transferred Collateral
Obligation in the amount of such setoff and shall, within two (2) Business Days,
pay to the Collection Account in immediately available funds an amount equal to
such setoff.

 

ARTICLE VII

 

CONDITIONS PRECEDENT

 

SECTION 7.1 Conditions Precedent. The obligations of the Purchaser to pay the
Purchase Price for the Transferred Assets sold on the Effective Date and any
Purchase Date shall be subject to the satisfaction of the following conditions:

 

-15-

 

 

(a)          All representations and warranties of the Seller contained in this
Agreement shall be true and correct in all material respects on such Purchase
Date;

 

(b)          All information concerning the Transferred Assets provided to the
Purchaser and the Administrative Agent shall be true and correct, when taken as
a whole, in all material respects as of such Purchase Date;

 

(c)          The Seller shall have performed in all material respects all other
obligations required to be performed by the provisions of this Agreement and the
other Transaction Documents to which it is a party;

 

(d)          The Seller shall have either filed or caused to be filed the
financing statement(s) required to be filed pursuant to Section 2.1(f);

 

(e)          The Seller shall have delivered a Power of Attorney to the
Purchaser with respect to each Conveyance of Transferred Beneficial Interests;
and

 

(f)           All corporate and legal proceedings, and all instruments in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents shall be reasonably satisfactory in form and substance to
the Purchaser, and the Purchaser shall have received from the Seller copies of
all documents (including records of corporate proceedings) relevant to the
transactions herein contemplated as the Purchaser may reasonably have requested.

 

ARTICLE VIII

 

MISCELLANEOUS PROVISIONS

 

SECTION 8.1 Amendments, Etc. This Agreement and the rights and obligations of
the parties hereunder may not be amended, supplemented, waived or otherwise
modified except in an instrument in writing signed by the Purchaser and the
Seller and consented to in writing by the Administrative Agent. Any reconveyance
executed in accordance with the provisions hereof shall not be considered an
amendment or modification to this Agreement.

 

SECTION 8.2 Governing Law: Submission to Jurisdiction.

 

(a)          THIS AGREEMENT AND THE NOTES SHALL, IN ACCORDANCE WITH SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT AND THE NOTES OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREUNDER.

 

-16-

 

 

(b)          Each party hereto hereby irrevocably submits to the non-exclusive
jurisdiction of any New York State or Federal court sitting in New York City in
any action or proceeding arising out of or relating to the Transaction
Documents, and each party hereto hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such Federal court. The
parties hereto hereby irrevocably waive, to the fullest extent they may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The parties hereto agree that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

 

SECTION 8.3 Notices. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by certified mail,
electronic mail, postage prepaid, or by facsimile, to the intended party at the
address or facsimile number of such party set forth below:

 

(a)          in the case of the Purchaser:

 

450 Park Avenue, 12th Floor

New York, NY 10022

Attention: General Counsel

Facsimile No.: (646) 861-7804

Confirmation No.: (212) 415-6500

Email: igalloway@arclarp.com

 

(b)          in the case of the Seller:

 

Business Development Corporation of America

450 Park Avenue, 12th Floor

New York, NY 10022

Attention: General Counsel

Telephone: (646) 861-7804

Facsimile: (212) 415-6500

Email: igalloway@arclarp.com

 

(in each case, with a copy to the Administrative Agent at the address for notice
provided under the Loan Agreement)

 

All such notices and communications shall be effective, (a) if personally
delivered, when received, (b) if sent by certified mail, three Business Days
after having been deposited in the mail, postage prepaid, (c) if sent by two-day
mail, two Business Days after having been deposited in the mail, postage
prepaid, (d) if sent by overnight courier, one Business Day after having been
given to such courier, and (e) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.

 

SECTION 8.4 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.

 

-17-

 

 

SECTION 8.5 Assignment. The Purchaser and the Seller each agree that at any time
and from time to time, at its expense and upon reasonable request of the
Administrative Agent or the Collateral Agent, it shall promptly execute and
deliver all further instruments and documents, and take all reasonable further
action, that is necessary or desirable to perfect and protect the Conveyances
and security interests granted or purported to be granted by this Agreement or
to enable the Collateral Agent or any of the Secured Parties to exercise and
enforce its rights and remedies under this Agreement with respect to any
Collateral. Without limiting the generality of the foregoing, the Seller
authorizes the filing of such financing or continuation statements, or
amendments thereto, and such other instruments or notices as may be necessary or
desirable or that the Purchaser or the Collateral Agent (acting solely at the
Administrative Agent’s request) as the assignee of the Purchaser may reasonably
request to protect and preserve the Conveyances and security interests granted
by this Agreement.

 

SECTION 8.6 Further Assurances.

 

(a)          The Purchaser and the Seller agree to do and perform, from time to
time, any and all acts and to execute any and all further instruments reasonably
requested by the other party more fully to effect the purposes of this Agreement
and the other Transaction Documents, including the execution of any financing
statements or continuation statements or equivalent documents relating to the
Transferred Collateral Obligations for filing under the provisions of the UCC or
other laws of any applicable jurisdiction.

 

(b)          The Purchaser and the Seller hereby severally authorize the
Collateral Agent, upon receipt of written direction from the Administrative
Agent, to file one or more financing or continuation statements, and amendments
thereto, relating to all or any part of the Transferred Assets.

 

(c)          The Seller shall furnish to the Collateral Agent and the
Administrative Agent from time to time such statements and schedules further
identifying and describing the Related Security and such other reports in
connection with the Transferred Assets as the Collateral Agent (acting solely at
the Administrative Agent’s request) or the Administrative Agent may reasonably
request, all in reasonable detail.

 

SECTION 8.7 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Purchaser, the Seller or the Administrative
Agent, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privilege provided by law.

 

SECTION 8.8 Counterparts. This Agreement may be executed in two or more
counterparts including telecopy transmission thereof (and by different parties
on separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.

 

-18-

 

 

SECTION 8.9 Binding Effect; Third-Party Beneficiaries. This Agreement and the
other Transaction Documents will inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. The
Collateral Agent, for the benefit of the Secured Parties, is intended by the
parties hereto to be a third-party beneficiary of this Agreement.

 

SECTION 8.10 Merger and Integration. Except as specifically stated otherwise
herein, this Agreement and the other Transaction Documents set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
other Transaction Documents.

 

SECTION 8.11 Headings. The headings herein are for purposes of reference only
and shall not otherwise affect the meaning or interpretation of any provision
hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

-19-

 

 

IN WITNESS WHEREOF, the Purchaser and the Seller each have caused this Sale and
Contribution Agreement to be duly executed by their respective officers as of
the day and year first above written.

 

  BUSINESS DEVELOPMENT     CORPORATION OF AMERICA, as Seller         By: /s/
Robert K. Grunewald   Name: Robert K. Grunewald   Title: CIO

 

Signature Page to Sale and Contribution Agreement 

 

 

 

  

  BDCA 2L FUNDING I, LLC, as Purchaser         By: /s/ Robert K. Grunewald    
Name: Robert K. Grunewald     Title: CIO

  

Signature Page to Sale and Contribution Agreement 

 

 

 

 

Schedule A

 

SCHEDULE OF COLLATERAL OBLIGATIONS

 

None

 

 

 

 

Schedule B

 

SCHEDULE OF REFERENCE ASSETS

 

Investment  Desciption  Loan
Type  Maturity  Cost %   Cost   Par
Amount   Junior
OC Test
–
Current
or NAV
of Loan
Fund  Catamaran     CLO                        2013-1 CLO  CLO  Equity 
1/27/2025   92.00%  $10,000,000   $10,000,000    105.78%       CLO              
         Apidos XVI  CLO  Equity  1/19/2025   91.00%  $13,650,000  
$15,000,000    108.65%       CLO                        MidOcean CLO II  CLO 
Equity  1/29/2025   90.58%  $34,058,080   $37,600,000    107.53%       CLO    
                   OFSBS 2014  CLO  Equity  3/20/2025   91.75%  $34,865,000  
$38,000,000    106.23% Pennant Park Credit Opportunity  Private Credit  Loan    
                   Fund  Fund  Fund  NA   100.00%  $10,000,000   $10,000,000  
 105.50%    Tennenbaum                              Waterman Loan  Loan         
              Tennenbaum  Fund  Fund  12/20/2022   100.00%  $8,890,703  
$8,890,703    108.10% THL Credit  Greenway II /  Loan                       
Greenway  TCRD BDC Sidecar  Fund  1/1/2020   100.00%  $11,630,000  
$11,630,000    100.56%

 

 

 

 

Schedule C

 

FORM OF PURCHASE NOTICE

 

[Date]

 

To:Deutsche Bank AG, New York Branch

60 Wall Street

New York, New York 10005

Attention: Asset Finance Department

 

Re:Purchase Notice for Conveyance

Date of                            , 20   

 

Ladies and Gentlemen:

 

This Purchase Notice is delivered to you pursuant to [Section 2.1(b)] [Section
2.1(d)] of the Sale and Contribution Agreement, dated as of February 21, 2014
(together with all amendments, if any, from time to time made thereto, the “Sale
Agreement”), between BDCA 2L Funding I, LLC, as purchaser (the “Purchaser”), and
Business Development Corporation of America, as seller. Unless otherwise defined
herein or the context otherwise requires, capitalized terms used herein have the
meanings provided in the Sale Agreement.

 

In accordance with [Section 2.1(b)] [Section 2.1(d)] of the Sale Agreement, the
Seller hereby offers to Convey to the Purchaser on the above-referenced Purchase
Date pursuant to the terms and conditions of the Sale Agreement the [Collateral
Obligations] [beneficial interest in the Reference Assets] listed on Schedule I
hereto, together with the Related Security and all proceeds of the foregoing.

 

Please wire the Purchase Price (or portion thereof) to be paid in cash to the
Seller pursuant to the wiring instructions included at the end of this letter.

 

The Seller represents that the conditions described in Section 7.1 of the Sale
Agreement have been satisfied with respect to such Conveyance.

 

The Seller agrees that if prior to the Purchase Date any matter certified to
herein by it will not be true and correct at such time as if then made, it will
immediately so notify the Purchaser. Except to the extent, if any, that prior to
the Purchase Date the Purchaser shall receive written notice to the contrary
from the Seller, each matter certified to herein shall be deemed once again to
be certified as true and correct at the Purchase Date as if then made.

 

The Seller has caused this Purchase Notice to be executed and delivered, and the
certification and warranties contained herein to be made, by its duly authorized
officer this        day of                 , 20    .

 

 

 

 

  Very truly yours,      

BUSINESS DEVELOPMENT

CORPORATION OF AMERICA

        By:      Name:     Title:  

 

AS ACKNOWLEDGED AND AGREED:   BDCA 2L FUNDING 1, LLC

 

  By: Business Development     Corporation of America, its sole member

 

By:     Name:     Title:    

 

 

 

 

Wire Instructions

Bank: ABA:

Account Name:

Account Number:

For further credit to account:

 

 

 

 

Schedule of [Collateral Obligations] [Reference Assets]

 

 

 

 

Schedule D

 

FORM OF POWER OF ATTORNEY

 

[Date]

 

To:       BDCA 2L Funding I, LLC

450 Park Avenue, 12th Floor

New York, New York 10022

Attention: General Counsel

Email: igalloway@arclarp.com

 

This Power of Attorney is executed and delivered by Business Development
Corporation of America, as the seller (the “Seller”) under the Sale and
Contribution Agreement referred to below, to BDCA 2L Funding I, LLC, as the
purchaser under the Sale and Contribution Agreement (in such capacity, the
“Attorney”), pursuant to Section 2.3 of that certain Sale and Contribution
Agreement, dated as of February 21, 2014 (as amended, modified, supplemented or
restated from time to time, the “Sale and Contribution Agreement”), between the
Seller and the Attorney. Capitalized terms used but not defined herein shall
have the meanings provided in the Sale and Contribution Agreement.

 

No person to whom this Power of Attorney is presented, as authority for the
Attorney to take any action or actions contemplated hereby, shall inquire into
or seek confirmation from Seller as to the authority of the Attorney to take any
action described below, or as to the existence of or fulfillment of any
condition to this Power of Attorney, which is intended to grant to the Attorney
unconditionally the authority to take and perform the actions contemplated
herein, and Seller irrevocably waives any right to commence any suit or action,
in law or equity, against any person or entity that acts in reliance upon or
acknowledges the authority granted under this Power of Attorney. The Power of
Attorney granted hereby is coupled with an interest and may not be revoked or
canceled by Seller until all Obligations of the Attorney under the Transaction
Documents have been paid in full, the Commitments have been reduced to zero, and
the Attorney has provided its written consent thereto.

 

The Seller hereby irrevocably appoints the BDCA 2L Funding I, LLC its true and
lawful attorney (with full power of substitution, which power, it acknowledges,
the Attorney has agreed to transfer to the Collateral Agent upon the occurrence
of a Facility Termination Event) in its name, place and stead and at is expense,
in connection with the Transferred Beneficial Interests, including without
limitation the power to cause the Seller to exercise any and all rights
(including, without limitation, voting rights) with respect to any Reference
Asset.

 

  BUSINESS DEVELOPMENT     CORPORATION OF AMERICA         By:       Name:    
Title: