Exhibit 10.4
 

 
EXPENSE SUPPORT AGREEMENT
 
This EXPENSE SUPPORT AGREEMENT (this “Agreement”), is made as of November 9,
2011 by and between Business Development Corporation of America (the “Company”)
and BDCA Adviser, LLC (the “Advisor”).
 
WHEREAS, the Company maintains on file with the U.S. Securities and Exchange
Commission an effective registration statement on Form N-2 (File No. 333-166636)
covering the continuous offering and sale of the Company’s common stock pursuant
to the Securities Act of 1933 (the “Registration Statement”);
 
WHEREAS, the Company and the Advisor have entered into an Amended and Restated
Investment Advisory and Management Services Agreement dated as of June 23, 2011
(the “Advisory Agreement”); and
 
WHEREAS, the Company and the Advisor have determined that it is appropriate and
in the best interests of the Company to reduce the Company’s offering and
operating expenses until the Company has achieved economies of scale sufficient
to ensure that it bears a reasonable level of expense in relation to its
investment income.
 
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties hereto agree as
follows:
 
1.
EXPENSE SUPPORT PAYMENTS.

 
During the period beginning at the time that the Company’s Registration
Statement is declared effective by the U.S. Securities and Exchange Commission
and continuing monthly thereafter until such time as the Company, the Advisor
and the Company’s board of directors (the “Board”) mutually agree otherwise (the
“Expense Support Payment Period”), the Advisor hereby agrees to pay to the
Company, at its sole discretion and in consultation with the Company, up to 100%
of all Offering and Operating Expenses (as defined herein) for each month during
the Expense Support Payment Period. Any payment made by the Advisor pursuant to
the preceding sentence shall be referred to herein as an “Expense Support
Payment.” Upon determination by the Advisor of the Expense Support Payment for
each month, the Advisor shall promptly notify the Company of such Expense
Support Payment. The Advisor’s obligation to make Expense Support Payments for
any month during the Expense Support Payment Period shall automatically become a
liability of the Advisor and the right to such Expense Support Payment shall be
an asset of the Company immediately upon the Company’s receipt of such notice
from the Advisor. The Expense Support Payment for any month shall be paid by the
Advisor to the Company in any combination of cash or other immediately available
funds, and/or offsets against amounts due from the Company to the Advisor, no
later than thirty (30) business days after the end of such month.
 
For purposes of this Agreement, (a) “Operating Expenses” for any period means
all costs and expenses paid or incurred by the Company, as determined under
generally accepted accounting principles, including, without limitation,
advisory fees payable pursuant to the Advisory Agreement and interest on
indebtedness for such period, if any; and (b) “Offering and Operating Expenses”
for any period means all Operating Expenses paid or incurred by the Company, as
determined under generally accepted accounting principles, including without
limitation, expenses incurred in connection with our ongoing offering of common
stock, which are recorded as a component of equity.
 
2.
CONDITIONAL REIMBURSEMENT.

 
The Company hereby agrees to reimburse the Advisor in an amount, in the
aggregate, equal to the aggregate Expense Support Payments, the repayment of
each Expense Support Payment to be made within a period not to exceed three
years from the end of the fiscal year in which such Expense Support Payment is
made by the Advisor. Reimbursement shall be made as promptly as possible, but
only to the extent it does not cause the Company’s Other Operating Expenses to
exceed 1.5% of net assets attributable to common shares (as such term is used in
the Registration Statement) after taking such payment into account.
 
 
 

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For purposes of this Agreement, “Other Operating Expenses” shall mean all
Operating Expenses, excluding organization and offering expenses, advisor fees
and advisor incentive fees, financing fees and interest, and brokerage
commissions and extraordinary expenses.
 
3.
TERM AND TERMINATION OF AGREEMENT.

 
3.1.           TERM OF AGREEMENT. This Agreement shall become effective
immediately upon the date hereof. Notwithstanding the foregoing, the parties
hereto acknowledge and agree that the Adviser, at its sole discretion and in
consultation with the Company, may elect to pay for any Offering and Operating
Expenses incurred by the Company as of the time that the Registration Statement
was declared effective by the U.S. Securities and Exchange. Once effective, this
Agreement shall remain in effect unless otherwise terminated pursuant to
Section 3.2 hereof. If an Expense Support Payment has not been reimbursed prior
to the end of the third fiscal year following the date such Expense Support
Payment was made, the Company’s obligation to pay such Expense Support Payment
shall automatically terminate, and be of no further effect.
 
3.2.           TERMINATION OF AGREEMENT. This Agreement may be terminated by the
Advisor upon written notice to the Company, except that once effective, the
Advisor may not terminate its obligations under Section 1 hereof. This Agreement
shall automatically terminate in the event of (a) the termination by the Company
of the Advisory Agreement or (b) the dissolution or liquidation of the Company.
Notwithstanding any provision to the contrary, if this Agreement terminates
automatically pursuant to clause (a) of this Section 3.2, the Company agrees to
make a repayment to the Advisor in an amount equal to all Expense Support
Payments not previously reimbursed. Such repayment shall be made to the Advisor
not later than 30 days after the termination of this Agreement.
 
4.
MISCELLANEOUS.

 
4.1.           HEADINGS. The captions of this Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
 
4.2.           INTERPRETATION. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without reference to its
conflicts of laws provisions) and the applicable provisions of the 1940 Act and
the Investment Advisers Act of 1940, as amended (the “Advisers Act”). To the
extent that the applicable laws of the State of New York or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act or
the Advisers Act, the latter shall control. Further, nothing herein contained
shall be deemed to require the Company to take any action contrary to the
Company’s Amended and Restated Articles of Incorporation or By-Laws, as each may
be amended or restated, or to relieve or deprive the Board of its responsibility
for and control of the conduct of the affairs of the Company.
 
4.3.           SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby and, to this extent, the provisions
of this Agreement shall be deemed to be severable.
 
4.4.           AMENDMENTS and COUNTERPARTS. This Agreement may only be amended
by mutual written consent of the parties. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
such counterparts shall, together, constitute only one instrument.
 
[remainder of page blank; signatures follow]
 
 
 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
respective officers thereunto duly authorized, as of the day and year first
above written.
 
BUSINESS DEVELOPMENT CORPORATION OF AMERICA

By:        /s/ Nicholas S. Schorsch              
Name:   Nicholas S. Schorsch
Title:     Chairman and Chief Executive Officer

BDCA ADVISER, LLC

By:        /s/ William M. Kahane                 
Name:   William M. Kahane
Title:     President

 
 

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