Exhibit 10.24

 

EXECUTION VERSION

 

 

 

February 21, 2014

 

BDCA 2L FUNDING I, LLC,

as Pledgor

 

U.S. BANK NATIONAL ASSOCIATION,

as Secured Party

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

as Securities Intermediary

 

SECURITIES ACCOUNT CONTROL AGREEMENT

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page       ARTICLE I INTERPRETATION 1       ARTICLE II APPOINTMENT OF
SECURITIES INTERMEDIARY 2       ARTICLE III THE SECURED ACCOUNTS 2       ARTICLE
IV THE SECURITIES INTERMEDIARY 5       ARTICLE V INDEMNITY; LIMITATION ON
DAMAGES; EXPENSES; FEES 9       ARTICLE VI REPRESENTATIONS AND AGREEMENTS 10    
  ARTICLE VII ADVERSE CLAIMS 11       ARTICLE VIII TRANSFER 11       ARTICLE IX
TERMINATION 11       ARTICLE X MISCELLANEOUS 12       ARTICLE XI NOTICES 13    
  ARTICLE XII GOVERNING LAW AND JURISDICTION 13       ARTICLE XIII DEFINITIONS
14       ARTICLE XIV LIMITED RECOURSE; NO BANKRUPTCY PETITION 15

 

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SECURITIES ACCOUNT CONTROL AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”), dated as of February
21, 2014, among BDCA 2L FUNDING I, LLC (the “Pledgor”), and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent on behalf of the Secured Parties (each as
defined in the Loan Agreement referred to below) (the “Secured Party”) and as
securities intermediary (in such capacity, the “Securities Intermediary”).

 

In consideration of the mutual agreements hereinafter contained and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

INTERPRETATION

 

Section 1.          (a)          Definitions. The terms defined in Section 13
will have the meanings therein specified for the purpose of this Agreement. In
addition, all terms used herein which are defined in the Loan Financing and
Servicing Agreement (as amended, restated, supplemented or otherwise modified
from time to time, the “Loan Agreement”), dated as of the date hereof, among the
Pledgor, as borrower, the agents and lenders party thereto from time to time,
Business Development Corporation of America, as equityholder and as servicer,
U.S. Bank National Association, as collateral agent and collateral custodian,
and Deutsche Bank AG, New York Branch, as administrative agent or in Article 8
or Article 9 of the UCC and which are not otherwise defined herein are used
herein as so defined.

 

(b)          Rules of Construction. Unless the context otherwise clearly
requires: (i) the definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined, (ii) whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms, (iii) the words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”, (iv) the word “will”
shall be construed to have the same meaning and effect as the word “shall”, (v)
any definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (vi) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (vii) the words “herein,” “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, and
(viii) all references herein to Sections and Schedules shall be construed to
refer to Sections of, and Schedules to, this Agreement.

 

 

 

 

ARTICLE II

 

APPOINTMENT OF SECURITIES INTERMEDIARY

 

Section 2.          Each of the Pledgor and the Secured Party hereby appoints
the Securities Intermediary as securities intermediary hereunder. The Securities
Intermediary hereby accepts such appointment.

 

ARTICLE III

 

THE SECURED ACCOUNTS

 

Section 3.          (a)          Establishment of Secured Accounts.   The
Securities Intermediary acknowledges and agrees that, at the direction and on
behalf of the Secured Party, it has established and is maintaining on its books
and records, in the name of the Pledgor, (i) the securities account designated
as the “Interest Collection Account” with account number 171758-201, (ii) the
securities account designated as the “Principal Collection Account” with account
number 171758-202, (iii) the securities account designated as the “Reference
Asset Account” with account number 171758-700 and (iv) the securities account
designated as the “Unfunded Exposure Account” with account number 171758-701
(such accounts, together with any sub-accounts, replacements thereof or
substitutions therefor, the “Secured Accounts”).

 

(b)          Status of Secured Accounts; Treatment of Property as Financial
Assets; Relationship of Parties. The Securities Intermediary hereby agrees with
the Pledgor and Secured Party that: (i) each Secured Account is a “securities
account” (within the meaning of Section 8-501(a) of the UCC) in respect of which
the Securities Intermediary is a “securities intermediary” (within the meaning
of Section 8-102(a)(14) of the UCC), (ii) each item of property (whether cash, a
security, an instrument or any other property) credited to any Secured Account
shall be treated as a “financial asset” (within the meaning of Section
8-102(a)(9) of the UCC), provided that nothing herein shall require the
Securities Intermediary to credit to the Secured Accounts or to treat as a
financial asset (within the meaning of Section 8-102(a)(9) of the UCC) or other
asset in the nature of a general intangible (as defined in Section 9-102(a)(42)
of the UCC) or to “maintain” a sufficient quantity thereof (within the meaning
of Section 8-504 of the UCC), and (iii) each Secured Account and any rights or
proceeds derived therefrom are subject to a security interest in favor of the
Secured Party arising under the Loan Agreement. The Pledgor and Secured Party
hereby direct the Securities Intermediary, subject to the terms of this
Agreement, to identify the Secured Party on its books and records as the
“entitlement holder” (as defined in Section 8-102(a)(7) of the UCC) with respect
to each Secured Account and the property held therein and the Securities
Intermediary agrees to do the same. Notwithstanding any term hereof or elsewhere
to the contrary, it is hereby expressly acknowledged that (a) interests in bank
loans or participations (collectively “Loan Assets”) may be acquired and
delivered by the Pledgor to the Securities Intermediary from time to time which
are not evidenced by, or accompanied by delivery of, a security (as that term is
defined in UCC Section 8-102) or an instrument (as that term is defined in
Section 9-102(a)(4a) of the UCC), and may be evidenced solely by delivery to the
Securities Intermediary of a facsimile copy of an assignment agreement (“Loan
Assignment Agreement”) in favor of the Pledgor as assignee, (b) any such Loan
Assignment Agreement (and the registration of the related Loan Assets on the
books and records of the applicable obligor or bank agent) shall be registered
in the name of the Pledgor, and (c) any duty on the part of the Securities
Intermediary with respect to such Loan Asset (including in respect of any duty
it might otherwise have to maintain a sufficient quantity of such Loan Asset for
purposes UCC Section 8-504) shall be limited to the exercise of reasonable care
by the Securities Intermediary in the physical custody of any such Loan
Assignment Agreement that may be delivered to it. It is acknowledged and agreed
that the Securities Intermediary is not under a duty to examine the underlying
credit agreements or loan documents to determine the validity or sufficiency of
any Loan Assignment Agreement (and shall have no responsibility for the
genuineness or completeness thereof), or for the Pledgor’s title to any related
Loan Asset.

 

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(c)          The Securities Intermediary will, by book-entry notation, promptly
credit to the applicable Secured Account all property to be credited thereto
pursuant to the Loan Agreement.

 

(d)          Form of Securities, Instruments, etc. All securities and other
financial assets credited to any Secured Account that are in registered form or
that are payable to or to the order of shall be (i) registered in the name of,
or payable to or to the order of, the Securities Intermediary, (ii) indorsed to
or to the order of the Securities Intermediary or in blank, or (iii) credited to
another securities account maintained in the name of the Securities
Intermediary; and in no case will any financial asset credited to any Secured
Account be registered in the name of, or payable to or to the order of, the
Pledgor or any other person or indorsed to or to the order of the Pledgor or any
other person, except to the extent the foregoing have been specially indorsed to
or to the order of the Securities Intermediary or in blank.

 

(e)          Securities Intermediary’s Jurisdiction. The Securities Intermediary
agrees that, for the purposes of the UCC, its “securities intermediary’s
jurisdiction” (within the meaning of Section 8-110(e) of the UCC) shall be the
State of New York.

 

(f)           Conflicts with other Agreements. The Securities Intermediary
agrees that, if there is any conflict between this Agreement (or any portion
thereof) and any other agreement (whether now existing or hereafter entered
into) relating to any Secured Account, the provisions of this Agreement shall
prevail.

 

(g)          No Other Agreements. The Securities Intermediary hereby confirms
and agrees that:

 

(i)           other than the Loan Agreement and this Agreement, there are no
other agreements entered into between the Securities Intermediary and the
Pledgor with respect to any Secured Account or any financial asset or security
entitlement credited thereto;

 

(ii)         other than the Loan Agreement and this Agreement, it has not
entered into, and until the termination of this Agreement will not enter into,
any other agreement with any other Person (including the Pledgor) relating to
any Secured Account and/or any financial asset or security entitlement thereto
(A) pursuant to which it has agreed or will agree to comply with entitlement
orders (as defined in Section 8-102(a)(8) of the UCC) of such other Person, or
(B) with respect to the creation or perfection of any other security interest in
any Secured Account or any financial asset or security entitlement credited
thereto; and

 

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(iii)        it has not entered into, and until the termination of this
Agreement will not enter into, any agreement with the Pledgor or the Secured
Party purporting to limit or condition the obligation of the Securities
Intermediary to comply with entitlement orders as set forth in Section 3(h).

 

(h)          Transfer Orders, Standing Instructions.

 

(i)          The Pledgor, the Secured Party and the Securities Intermediary each
agree that if at any time a Responsible Officer of the Securities Intermediary
shall receive an “entitlement order” (within the meaning of Section 8-102(a)(8)
of the New York UCC) or any other order relating to any Secured Account or any
financial assets or security entitlements credited thereto (collectively, a
“Transfer Order”) originated by the Secured Party, the Securities Intermediary
shall comply with such Transfer Order without further consent by the Pledgor or
any other Person.

 

(ii)         At any time prior to the delivery to and receipt by the Securities
Intermediary of a Notice of Exclusive Control or a Reference Account Control
Notice, as applicable, the Securities Intermediary shall comply with each
Transfer Order it receives from the Pledgor or on its behalf without the further
consent of the Secured Party or any other Person; provided, in the event the
Securities Intermediary receives conflicting instructions from the Secured Party
and the Pledgor, the Securities Intermediary shall follow the instructions
received from the Secured Party and not the instructions received from the
Pledgor.

 

(iii)        Upon receipt of a Notice of Exclusive Control by the Securities
Intermediary in accordance with the notice requirements hereunder, and until
such Notice of Exclusive Control is withdrawn or rescinded by the Secured Party
in writing, the Securities Intermediary shall not comply with any Transfer Order
it receives from the Pledgor with respect to the Secured Accounts (other than
the Reference Asset Account) and shall act solely upon Transfer Orders received
from the Secured Party.

 

(iv)        Upon receipt of a Reference Account Control Notice by the Securities
Intermediary in accordance with the notice requirements hereunder, and until
such Reference Account Control Notice is withdrawn or rescinded by the Secured
Party in writing, the Securities Intermediary shall not comply with any Transfer
Order it receives from the Pledgor with respect to the Reference Asset Account
and shall act solely upon Transfer Orders received from the Secured Party.

 

(v)         The Secured Party hereby agrees with the Pledgor that it shall not
deliver (A) a Notice of Exclusive Control, except after the occurrence of a
Facility Termination Event or (B) a Reference Account Control Notice except
after the occurrence of a Reference Asset Control Event.

 

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ARTICLE IV

 

THE SECURITIES INTERMEDIARY

 

Section 4.          (a)          Performance of Duties. The Securities
Intermediary may execute any of the powers hereunder or perform any of its
duties hereunder directly or by or through agents, attorneys or employees, and
the Securities Intermediary shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care.
The Securities Intermediary shall be entitled to consult with counsel with a
national reputation in the applicable matter selected with due care and to act
in reliance upon the advice or written opinion of such counsel concerning
matters pertaining to its duties hereunder, and shall not be liable for any
action taken or omitted to be taken by it in good faith in reliance upon and in
accordance with the advice or opinion of such counsel. Except as expressly
provided herein, the Securities Intermediary shall not be under any obligation
to exercise any of the rights or powers vested in it by this Agreement at the
request or direction of the Secured Party.

 

(b)          No Change to Secured Accounts. Without the prior written consent of
the Pledgor and, so long as any Obligations remain unpaid, the Secured Party,
the Securities Intermediary will not change the account number or designation of
any Secured Account.

 

(c)          Certain Information. The Securities Intermediary shall promptly
notify the Pledgor and the Secured Party if a Responsible Officer of the
Securities Intermediary with direct responsibility for administration of this
Agreement has actual knowledge of or receives written notice that any Person
asserts or seeks to assert a lien, encumbrance or adverse claim against any
portion or all of the property credited to any Secured Account. The Securities
Intermediary will send copies of all statements, confirmations and other
correspondence relating to each Secured Account (and/or any financial assets
credited thereto) simultaneously to the Pledgor and the Secured Party. The
Securities Intermediary will furnish to the Secured Party and the Pledgor, upon
written request, an account statement with respect to each Secured Account.

 

(d)           Subordination. In the event that the Securities Intermediary has
or subsequently obtains by agreement, by operation of law or otherwise a
security interest in any of the Secured Accounts, or any financial asset
credited thereto, the Securities Intermediary hereby subordinates any such
security interest therein to the security interest of the Secured Party in the
Secured Accounts, in all property credited thereto and in all security
entitlements with respect to such property. Without limitation of the foregoing,
the Securities Intermediary hereby subordinates to such security interest of the
Secured Party any and all statutory, regulatory, contractual or other rights now
or hereafter existing in favor of the Securities Intermediary over or with
respect to any Secured Account, all property credited thereto and all security
entitlements to such property (including (i) any and all contractual rights of
set-off, lien or compensation, (ii) any and all statutory or regulatory rights
of pledge, lien, set-off or compensation, (iii) any and all statutory,
regulatory, contractual or other rights to put on hold, block transfers from or
fail to honor instructions of the Pledgor with respect to any Secured Account,
or (iv) any and all statutory or other rights to prohibit or otherwise limit the
pledge, assignment, collateral assignment or granting of any type of security
interest in any Secured Account), except the Securities Intermediary may set off
(i) the face amount of any checks that have been credited to any Secured Account
but are subsequently returned unpaid because of uncollected or insufficient
funds and (ii) reversals or cancellations of payment orders and other electronic
fund transfers.

 

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(e)          Limitation on Liability. The Securities Intermediary shall not have
any duties or obligations except those expressly set forth herein and shall
satisfy those duties expressly set forth herein. Without limiting the generality
of the foregoing, the Securities Intermediary shall not be subject to any
fiduciary or other implied duties, and the Securities Intermediary shall not
have any duty to take any discretionary action or exercise any discretionary
powers. None of the Securities Intermediary, any Affiliate of the Securities
Intermediary, or any officer, agent, stockholder, partner, member, director or
employee of the Securities Intermediary or any Affiliate of the Securities
Intermediary shall have any liability, whether direct or indirect and whether in
contract, tort or otherwise (i) for any action taken or omitted to be taken by
any of them hereunder or in connection herewith unless such act or omission
constituted gross negligence, willful misconduct or bad faith, or (ii) for any
action taken or omitted to be taken by the Securities Intermediary in accordance
with the terms hereof at the express direction of the Secured Party. In
addition, the Securities Intermediary shall have no liability for making any
investment or reinvestment of any cash balance in any Secured Account, or
holding amounts uninvested in such accounts, pursuant to the terms of this
Agreement. The liabilities of the Securities Intermediary shall be limited to
those expressly set forth in this Agreement (which shall not be construed to
limit U.S. Bank National Association’s liability in any of its other capacities
under the Transaction Documents). The Securities Intermediary shall not be
liable for any action a Responsible Officer of the Securities Intermediary takes
or omits to take in good faith that it reasonably believes to be authorized or
within its rights or powers hereunder. The Securities Intermediary shall not be
deemed to have notice or knowledge of any Facility Termination Event unless a
Responsible Officer of the Securities Intermediary has actual knowledge thereof
or unless written notice thereof is received by a Responsible Officer of the
Securities Intermediary. For the avoidance of doubt, to the extent permitted by
applicable law, the Securities Intermediary shall not be responsible for
complying with Section 8-505(a) of the UCC. With the exception of this Agreement
(and relevant terms used herein and expressly defined in the Loan Agreement),
the Securities Intermediary (but, for the avoidance of doubt, not U.S. Bank
National Association in any of its other capacities) is not responsible for or
chargeable with knowledge of any terms or conditions contained in any agreement
referred to herein, including, but not limited to, the Loan Agreement. The
Securities Intermediary shall in no event be liable for the application or
misapplication of funds by any other person, or for the acts or omissions of any
other person (including, without limitation, those of the Pledgor).

 

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(f)           Reliance. The Securities Intermediary shall be entitled to
conclusively rely upon, and shall not incur any liability for relying upon, any
notice, request, opinion, report, certificate, consent, statement, instrument,
document or other writing including, but not limited to, an electronic mail
communication delivered to the Securities Intermediary under or in connection
with this Agreement and in good faith believed by it to be genuine and to have
been signed or sent by the proper Person. The Securities Intermediary may
consult with legal counsel, independent accountants and other experts with a
national reputation in the applicable matter selected by it with due care, and
shall not be liable for any action taken or not taken by the Securities
Intermediary in good faith and in accordance with the advice of any such
counsel, accountants or experts. If at any time the Securities Intermediary
requests instruction with respect to any action or omission in connection with
this Agreement, the Securities Intermediary shall be entitled (without incurring
any liability therefor to any person) to refrain from taking such action and
continue to refrain from acting unless and until the Securities Intermediary
shall have received written instruction from the party from whom instruction was
requested. The reliances, protections, indemnities and immunities afforded to
the Collateral Custodian in the Loan Agreement shall be afforded to the
Securities Intermediary as though fully set forth herein.

 

(g)          Court Orders, etc. If at any time the Securities Intermediary is
served with any judicial or administrative order, judgment, decree, writ or
other form of judicial or administrative process which in any way affects any
Secured Account (including, but not limited to, orders of attachment or
garnishment or other forms of levies or injunctions or stays relating to the
transfer of any Secured Account or any financial asset in any Secured Account),
the Securities Intermediary is authorized to take such action as legal counsel
of its own choosing with a national reputation in the applicable matter advises
appropriate to comply therewith; and if the Securities Intermediary complies
with any such judicial or administrative order, judgment, decree, writ or other
form of judicial or administrative process, the Securities Intermediary will not
be liable to any of the parties hereto or to any other person or entity even
though such order, judgment, decree, writ or process may be subsequently
modified or vacated or otherwise determined to have been without legal force or
effect.

 

(h)          Successor Securities Intermediary.

 

(i)           Merger.         Any Person into whom the Securities Intermediary
may be converted or merged, or with whom it may be consolidated, or to whom it
may sell or transfer its trust or other business and assets as a whole or
substantially as a whole, or any Person resulting from any such conversion,
sale, merger, consolidation or transfer to which the Securities Intermediary is
a party, shall (provided that it is otherwise qualified to serve as the
Securities Intermediary hereunder) be and become a successor Securities
Intermediary hereunder and be vested with all of the powers, immunities,
privileges and other matters as was its predecessor without the execution or
filing of any instrument or any further act, deed or conveyance on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

 

(ii)         Resignation. The Securities Intermediary and any successor thereto
may at any time resign by giving forty-five (45) days’ written notice by
registered, certified or express mail to the Secured Party and the Pledgor;
provided that such resignation shall take effect only upon the date which is the
later of the effective date of the appointment of a successor Securities
Intermediary acceptable to the Secured Party and the Pledgor, as evidenced by
their written consent and the acceptance in writing by such successor Securities
Intermediary of such appointment and of its obligation to perform its duties
hereunder in accordance with the provisions hereof. Subject to the preceding
sentence, if on the 45th day after written notice of resignation is delivered by
a resigning party as described above no successor party or temporary successor
Securities Intermediary has been appointed in accordance herewith, the resigning
party may petition a court of competent jurisdiction in New York City for the
appointment of a successor.

 

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(i)           Compensation and Reimbursement. The Pledgor agrees: (i) to pay to
the Securities Intermediary its fees for all services rendered by it hereunder;
and (ii) to reimburse the Securities Intermediary upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Securities Intermediary in accordance with any provision of, or carrying out its
duties and obligations under, this Agreement (including the reasonable
compensation and fees and the expenses and disbursements of its legal counsel).

 

(j)           Securities Intermediary and their Affiliates. U.S. Bank National
Association and any of its Affiliates providing services in connection with the
transactions contemplated in the Transaction Documents shall have only the
duties and responsibilities expressly provided in its various capacities and
shall not, by virtue of it or any Affiliate acting in any other capacity be
deemed to have duties or responsibilities other than as expressly provided with
respect to each such capacity. U.S. Bank National Association (or its
Affiliates), in its various capacities in connection with the transactions
contemplated in the Transaction Documents, including as Securities Intermediary,
may enter into business transactions, including the acquisition of investment
securities as contemplated by the Transaction Documents, from which it and/or
such Affiliates may derive revenues and profits in addition to the fees stated
in the various Transaction Documents, without any duty to account therefor.

 

(k)          Force Majeure.  In no event shall the Securities Intermediary be
responsible or liable for any failure or delay in the performance of its
obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services, it being understood that the Securities Intermediary shall use
reasonable best efforts which are consistent with accepted practices in the
banking industry to maintain performance and, if necessary, resume performance
as soon as practicable under the circumstances

 

(l)           Perfection. The Securities Intermediary shall have no
responsibility or liability for (i) preparing, recording, filing, re-recording
or refiling any financing statement, continuation statement, document,
instrument or other notice in any public office at any time or times, (ii) the
correctness of any such financing statement, continuation statement, document or
instrument or other such notice, (iii) taking any action to perfect or maintain
the perfection of any security interest granted to the Secured Party or
otherwise, or (iv) the validity or perfection of any such lien or security
interest.

 

(m)           Facsimile and Electronic Transmissions.   The Securities
Intermediary agrees to accept and act upon instructions or directions pursuant
to this Agreement sent by unsecured e-mail, facsimile transmission or other
similar unsecured electronic methods, provided that any person providing such
instructions or directions shall provide to the Securities Intermediary an
incumbency certificate listing such designated persons, which such incumbency
certificate shall be amended and replaced whenever a person is to be added or
deleted from the listing. If the Pledgor elects to give the Securities
Intermediary e-mail or facsimile instructions (or instructions by a similar
electronic method), the Securities Intermediary’s understanding of such
instructions shall be deemed controlling. The Securities Intermediary shall not
be liable for any losses, costs or expenses arising directly or indirectly from
the Securities Intermediary’s reliance upon and compliance with such
instructions notwithstanding such instructions conflict or are inconsistent with
a subsequent written instruction. The Pledgor agrees to assume all risks arising
out of the use of such electronic methods to submit instructions and directions
to the Securities Intermediary, including without limitation the risk of the
Securities Intermediary acting on unauthorized instructions, and the risk of
interception and misuse by third parties.

 

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ARTICLE V

 

INDEMNITY; LIMITATION ON DAMAGES; EXPENSES; FEES

 

Section 5.          (a)          Indemnity.          (i) Subject to Section
5(a)(ii), the Pledgor hereby indemnifies and holds harmless the Securities
Intermediary, its Affiliates and their respective officers, directors,
employees, representatives and agents (collectively referred to for the purposes
of this Section 5(a) as the Securities Intermediary), against any loss, claim,
damage, expense or liability (including the reasonable costs and expenses of
defending against any claim of liability), or any action in respect thereof, to
which the Securities Intermediary may become subject, whether commenced or
threatened, insofar as such loss, claim, damage, expense, liability or action
arises out of or is based upon the execution, delivery or performance of this
Agreement, but excluding any such loss, claim, damage, expense, liability or
action arising out of the bad faith, gross negligence or willful misconduct of
the Securities Intermediary, and shall reimburse the Securities Intermediary
promptly upon demand for any reasonable and documented out-of-pocket legal or
other expenses reasonably incurred by the Securities Intermediary in connection
with investigating or preparing to defend or defending against or appearing as a
third party witness in connection with any such loss, claim, damage, expense,
liability or action as such expenses are incurred. No provision of this
Agreement shall require the Securities Intermediary to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. The obligations of the Pledgor under this clause (a) are referred to as the
“Securities Intermediary Indemnity”. The provisions of this section will survive
the termination of this Agreement and the resignation or removal of the
Securities Intermediary.

 

(ii)         The obligation of the Pledgor to pay any amounts in respect of the
Securities Intermediary Indemnity shall be subject to the priority of payments
set forth in the Loan Agreement and shall survive the termination of this
Agreement and the resignation or removal of the Securities Intermediary and the
Securities Intermediary shall be considered the Collateral Custodian for such
purposes.

 

(b)          Expenses and Fees. The Pledgor shall be responsible for, and hereby
agrees to pay, all reasonable and documented out-of-pocket costs and expenses
incurred by the Securities Intermediary in connection with the establishment and
maintenance of each Secured Account, including the Securities Intermediary’s
fees and expenses, any reasonable and documented out-of-pocket costs or expenses
incurred by the Securities Intermediary as a result of conflicting claims or
notices involving the parties hereto, including the reasonable fees and expenses
of its external legal counsel, and all other reasonable costs and expenses
incurred in connection with the execution, administration or enforcement of this
Agreement including reasonable attorneys’ fees and costs, whether or not such
enforcement includes the filing of a lawsuit. Notwithstanding anything to the
contrary provided herein, all amounts payable by the Pledgor to the Securities
Intermediary under this Agreement shall be payable only in accordance with, and
subject to, Section 8.3 of the Loan Agreement and the Securities Intermediary
shall be considered the Collateral Custodian for such purposes.

 

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(c)          No Consequential Damages. Notwithstanding anything in this
Agreement to the contrary, in no event shall the Securities Intermediary be
liable for special, punitive, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the
Securities Intermediary has been advised of the likelihood of such loss or
damage and regardless of the form of action.

 

ARTICLE VI

 

REPRESENTATIONS AND AGREEMENTS

 

Section 6.          The Securities Intermediary represents to and agrees with
the Pledgor and the Secured Party that:

 

(a)          Status. It is duly organized and validly existing under the laws of
the jurisdiction of its organization or incorporation and, if relevant under
such laws, in good standing.

 

(b)          Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver this
Agreement and any other documentation relating to this Agreement that it is
required by this Agreement to deliver and to perform its obligations under this
Agreement and has taken all necessary action to authorize such execution,
delivery and performance; and this Agreement has been, and each other such
document will be, duly executed and delivered by it.

 

(c)          Obligations Binding. Its obligations under this Agreement
constitute its legal, valid and binding obligations, enforceable in accordance
with their respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors’ rights generally and
subject, as to enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in equity or at
law)).

 

(d)          Waiver of Setoffs. The Securities Intermediary hereby expressly
waives any and all rights of setoff that such party may otherwise at any time
have under Applicable Law with respect to any Secured Account except as set
forth in Section 4(d).

 

(e)          Ordinary Course. The Securities Intermediary, in the ordinary
course of its business, maintains securities accounts for others and is acting
in such capacity in respect of any Secured Account.

 

(f)           Comply with Duties. The Securities Intermediary will comply at all
times with the duties of a “securities intermediary” under Article 8 of the UCC.

 

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(g)          Participant of the Federal Reserve Bank of New York. The Securities
Intermediary is a member of the Federal Reserve System.

 

(h)          Consents. All governmental and other consents that are required to
have been obtained by the Securities Intermediary with respect to the execution,
delivery and performance by the Securities Intermediary of this Agreement have
been obtained and are in full force and effect and all conditions of any such
consents have been complied with.

 

ARTICLE VII

 

ADVERSE CLAIMS

 

Section 7.          Except for the claims and interest set forth in this
Agreement, no Responsible Officer of the Securities Intermediary actually knows
of any claim to, or interest in, any Secured Account or in any “financial asset”
(as defined in Section 8-102(a)(9) of the UCC) credited thereto.   If a
Responsible Officer of the Securities Intermediary with direct responsibility
for administration of this Agreement has actual knowledge of or receives written
notice that any governmental authority asserts or seeks to assert a Lien
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against any Secured Account or in any financial asset carried
therein, the Securities Intermediary will promptly notify the Pledgor thereof
(and the Pledgor shall promptly notify the Secured Party thereof).

 

ARTICLE VIII

 

TRANSFER

 

Section 8.          Except as provided in Section 4(h), neither this Agreement
nor any interest or obligation in or under this Agreement may be transferred
(whether by way of security or otherwise) by any party without the prior written
consent of each other party. Any purported transfer that is not in compliance
with this Section 8 will be void.

 

ARTICLE IX

 

TERMINATION

 

Section 9.          The rights and powers granted herein to the Secured Party
have been granted in order to perfect its security interest in each Secured
Account and the financial assets credited thereto, are powers coupled with an
interest and will be affected neither by the bankruptcy of the Pledgor nor by
the lapse of time.   The obligations of the Securities Intermediary hereunder
shall continue in effect until the earlier of (a) that date upon which the
security interest of the Secured Party in each Secured Account has been
terminated, and (b) that date on which the Secured Party releases or terminates
its security interest in each Secured Account.

 

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ARTICLE X

 

MISCELLANEOUS

 

Section 10.          (a)          Entire Agreement.     This Agreement and the
Loan Agreement constitutes the entire agreement and understanding of the parties
with respect to its subject matter and supersedes all oral communication and
prior writings with respect thereto.

 

(b)          Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission), executed by each of the parties hereto.

 

(c)          Survival. All representations and warranties made in this Agreement
or in any certificate or other document delivered pursuant to or in connection
with this Agreement shall survive the execution and delivery of this Agreement
or such certificate or other document (as the case may be) or any deemed
repetition of any such representation or warranty. In addition, the rights of
the Securities Intermediary under Sections 4 and 5, and the obligations of the
Pledgor under Section 5, shall survive the termination of this Agreement.

 

(d)          Benefit of Agreement.  Subject to Section 8, this Agreement shall
be binding upon and inure to the benefit of the Pledgor, the Secured Party and
the Securities Intermediary and their respective successors and permitted
assigns. The Securities Intermediary acknowledges and consents to the assignment
of this Agreement by the Pledgor to the Secured Party for the benefit of the
Secured Parties under the Loan Agreement.

 

(e)          Counterparts. This Agreement (and each amendment, modification and
waiver in respect of it) may be executed and delivered in counterparts
(including by facsimile transmission and e-mail correspondence), each of which
will be deemed an original.

 

(f)           No Waiver of Rights. A failure or delay in exercising any right,
power or privilege in respect of this Agreement will not be presumed to operate
as a waiver, and a single or partial exercise of any right, power or privilege
will not be presumed to preclude any subsequent or further exercise, of that
right, power or privilege or the exercise of any other right, power or
privilege.

 

(g)          Headings. The headings used in this Agreement are for convenience
of reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

 

(h)          Severability.   If any provision of this Agreement, or the
application thereof to any party or any circumstance, is held to be
unenforceable, invalid or illegal (in whole or in part) for any reason (in any
jurisdiction), the remaining terms 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 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 of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.

 

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(i)           No Agency.    Notwithstanding anything that may be construed to
the contrary, it is understood and agreed that the Securities Intermediary is
not, nor shall it be considered to be, an agent, of the Secured Party. In
addition, the Securities Intermediary shall not act or represent itself,
directly or by implication, as an agent of the Secured Party or in any manner
assume or create any obligation whatsoever on behalf of, or in the name of, the
Secured Party.

 

(j)           Payments by Pledgor. Any amounts required to be paid pursuant to
this Agreement by the Pledgor shall be paid or caused to be paid by the Pledgor
to the applicable Person on the Distribution Date following such Person’s demand
therefor in accordance with Section 8.3 of the Loan Agreement, provided that
such demand is made no later than two (2) Business Days prior to the
Determination Date for the applicable Distribution Date, and the Securities
Intermediary shall be considered the Collateral Custodian for such purposes.

 

ARTICLE XI

 

NOTICES

 

Section 11.          (a)          Effectiveness.     Any notice or other
communication in respect of this Agreement may be given in any manner set forth
in Section 17.3 of the Loan Agreement.

 

(b)          Change of Addresses. Any party hereto may by written notice to each
other party hereto, change the address, electronic mail address or facsimile
number at which notices or other communications are to be given to it hereunder.

 

ARTICLE XII

 

GOVERNING LAW AND JURISDICTION

 

Section 12.          (a)          Governing Law.     THIS AGREEMENT 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 OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREUNDER.

 

(b)          Jurisdiction. 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.

 

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(c)           Waiver of Jury Trial Right. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING. Each party hereby (i)
certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that any other party 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 (d).

 

ARTICLE XIII

 

DEFINITIONS

 

Section 13.          As used in this Agreement:

 

“Affiliate” means any Person that directly or indirectly Controls, is Controlled
by or is under common Control with such Person (excluding any trustee under, or
any committee with responsibility for administering, any employee benefit plan).
For the purposes of this definition, “Control” shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and the terms “Controlling” and
“Controlled” shall have meanings correlative thereto.

 

“Agreement” has the meaning specified in the Recitals.

 

“consent” includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.

 

“law” includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
“lawful” and “unlawful” will be construed accordingly.

 

“Loan Agreement” has the meaning specified in Section 1(a).

 

“Notice of Exclusive Control” means a notice delivered to and received by the
Securities Intermediary by the Secured Party in accordance with Section
3(h)(iii) stating that the Secured Party is exercising exclusive control over
the Secured Accounts (other than the Reference Asset Account).

 

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“Person” means any natural person or legal entity, including without limitation
any corporation, partnership, limited liability company, statutory or common law
trust, or governmental entity or unit.

 

“Pledgor” has the meaning specified in the Recitals.

 

“Reference Account Control Event” means any of (a) the occurrence of any
Unmatured Facility Termination Event or Facility Termination Event, (b) the
occurrence of an Insolvency Event with respect to the Equityholder, (c) the
failure of the Equityholder to cause all Reference Asset Collections to be
deposited into the Reference Asset Account by the applicable Obligor within the
time frame required by the Loan Agreement and (d) any breach of Section 7.5(q)
of the Loan Agreement, whether or not such breach gives rise to a Facility
Termination Event.

 

“Reference Account Control Notice” means a notice delivered to and received by
the Securities Intermediary by the Secured Party in accordance with Section
3(h)(iv) stating that the Secured Party is exercising exclusive control over the
Reference Asset Account.

 

“Responsible Officer” means any officer within the corporate trust office of the
Securities Intermediary, including any director, vice president, assistant vice
president or associate, having direct responsibility for the administration of
this Agreement, who at the time shall be such officers, respectively, or to whom
any matter is referred because of his or her knowledge of and familiarity with
the particular subject.

 

“Secured Accounts” has the meaning specified in Section 3(a).

 

“Secured Party” has the meaning specified in the Recitals.

 

“Securities Intermediary” has the meaning specified in the Recitals.

 

“Securities Intermediary Indemnity” has the meaning specified in Section 5(a).

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

 

ARTICLE XIV

 

LIMITED RECOURSE; NO BANKRUPTCY PETITION

 

Section 14.        The obligations of the Pledgor are solely corporate
obligations of the Pledgor and no action shall be taken against the members or
officers of the Pledgor in connection with such obligations. The parties hereto
agree that they shall not institute against, or join any other Person in
instituting against the Pledgor, any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings or other proceedings under
U.S. federal or state bankruptcy laws or any similar laws until at least two
years and one day after payment in full of the Advances. This Section 14 shall
survive the expiration or termination of this Agreement.

 

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IN WITNESS WHEREOF the parties have executed this Agreement on the date first
set forth above with effect from such date.

 

  Pledgor:       BDCA 2L FUNDING I, LLC, as Borrower         By: BUSINESS
DEVELOPMENT
CORPORATION OF AMERICA, its sole
member         By: /s/ Robert K. Grunewald     Name: Robert K. Grunewald    
Title: CIO

 

Signature Page to Securities Account Control Agreement

 

 

 

 

  Secured Party:       U.S. BANK NATIONAL ASSOCIATION, as
Secured Party         By: /s/ Jeffrey B Stone   Name:  Jeffrey B Stone   Title:
  Vice President

 

Signature Page to Securities Account Control Agreement

 

 

 

 

  Securities Intermediary:       U.S. BANK NATIONAL ASSOCIATION, as
Securities Intermediary         By: /s/ Jeffrey B Stone   Name:  Jeffrey B Stone
  Title:   Vice President

 

Signature Page to Securities Account Control Agreement