FORM OF INDEMNIFICATION AGREEMENT

 

 

THIS INDEMNIFICATION AGREEMENT (“Agreement”)is made and entered into as of the _____ day of _______________, 2014, by and between Business Development Corporation of America,a Maryland corporation (the “Company”), and _________________________ (“Indemnitee”).1

 

WHEREAS, at the request of the Company,Indemnitee currently serves as an Independent Director or officer of the Company and may, therefore, be subjected to claims, suitsor proceedings arising as a result of his or her service; and

 

WHEREAS, as an inducement to Indemniteeto continue to serve as such Independent Director or officer, the Company has agreed to indemnify and to advance expenses and costsincurred by Indemnitee in connection with any such claims, suits or proceedings; and

 

WHEREAS, the parties by this Agreement desireto set forth their agreement regarding indemnification and advance of expenses;

 

NOW, THEREFORE, in consideration of thepremises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1.	Definitions. For purposesof this Agreement:

 

(a)	“1940 Act” means the InvestmentCompany Act of 1940, as amended, and rules thereunder.

 

(b)	“Applicable Legal Rate”means a fixed rate of interest equal to the applicable federal rate for mid-term debt instruments as of the day that it is determinedthat Indemnitee must repay any advanced expenses.

 

(c)	“Change in Control” meansa change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in responseto Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgatedunder the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subjectto such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurredif, after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the ExchangeAct) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,of securities of the Company representing 15% or more of the combined voting power of all of the Company’s then-outstandingsecurities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the membersof the Board of Directors in office immediately prior to such person’s attaining such percentage interest; (ii) theCompany is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at leasttwo-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directorsin office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter;or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were directors as ofthe Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s stockholderswas approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the EffectiveDate or whose election for nomination for election was previously so approved.

 

 

*1**Insert names of directors or officers.*

 

 

(d)	“Corporate Status” meansthe status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer,partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limitedliability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacityat the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving atthe request of the Company, service by Indemnitee shall be deemed to be at the request of the Company if Indemnitee serves or servedas a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership,limited liability company, joint venture, trust, employee benefit plan or other enterprise (i) of which a majority of the votingpower or equity interest is owned directly or indirectly by the Company or (ii) the management of which is controlled directlyor indirectly by the Company.

 

(e)	“Disinterested Director”means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advanceof Expenses is sought by Indemnitee.

 

(f)	“Effective Date” meansthe date set forth in the first paragraph of this Agreement.

 

(g)	“Expenses” means any andall reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witnessfees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal,state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement,ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparingto prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expensesshall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation,the premium for, security for and other costs relating to any cost bond supersedeas bond or other appeal bond or its equivalent.

 

(h)	“Independent Counsel” meansa law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five yearshas been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than withrespect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements),or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advanceof Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who,under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing eitherthe Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

 

(i)	“Independent Director”means a director that is not an “interested person,” as such term is defined in the 1940 Act, of the Company.

 

(j)	“Proceeding” means anythreatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrativehearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (includingintentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including anyappeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writingby the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institutionof a Proceeding, such situation shall also be considered a Proceeding.

 

Section 2.	Services by Indemnitee.Indemnitee will serve as an Independent Director or officer of the Company. However, this Agreement shall not impose any independentobligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemedan employment contract between the Company (or any other entity) and Indemnitee.

 

Section 3.	General. Subject tothe limitations in Section 5, the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreementand (b) as otherwise permitted by the 1940 Act, including Section 17 (h) therein, Maryland law in effect on the EffectiveDate and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing thebenefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitationsin Section 5, the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in theother sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland GeneralCorporation Law (the “MGCL”).

 

Section 4.	Standard for Indemnification.Subject to the limitations in Section 5, if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatenedto be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amountspaid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connectionwith any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemniteewas material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result ofactive and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or servicesor (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

 

Section 5.	Certain Limits on Indemnification.Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to:

 

 

	(a)	indemnification for any lossor liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that the course of conductthat caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting on behalf of or performingservices for the Company; (iii) such loss or liability was not the result of negligence or misconduct; and (iv) such indemnificationis recoverable only out of the Company’s net assets and not from the Company’s stockholders;

 

	(b)	indemnification for any lossor liability arising from an alleged violation of federal or state securities laws unless one or more of the following conditionsare met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violationsas to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as toIndemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee and finds that indemnificationof the settlement and the related costs should be made, and the court considering the request for indemnification has been advisedof the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authorityin which securities of the Company were offered or sold as to indemnification for violations of securities laws;

 

(c)	indemnification hereunder if theProceeding was one by or in the right of the Company and Indemnitee is adjudged to be liable to the Company;

 

(d)	indemnification hereunder if Indemniteeis adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging improper personalbenefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or

 

(e)	indemnification or advance of Expenseshereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification underthis Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’scharter or Bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board ofDirectors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.

 

Section 6.	Court-Ordered Indemnification.Subject to the limitations in Sections 3, 5(a) and (b), a court of appropriate jurisdiction, upon application of Indemnitee andsuch notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:

 

(a)	if such determines that Indemniteeis entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemniteeshall be entitled to recover the Expenses of securing such reimbursement; or

 

(b)	if such court determines that Indemniteeis fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) hasmet the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of animproper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deemproper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall havebeen adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.

 

 

Section 7.	Indemnification for Expensesof an Indemnitee Who is Wholly or Partly Successful. Subject to the limitations in Section 5, to the extent that Indemniteewas or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding andis successful, on the merits or otherwise, in the defense of such Proceeding, Indemnitee shall be indemnified for all Expensesactually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not whollysuccessful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issuesor matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonablyincurred by Indemnitee or on Indemnitee’s behalf in connection with each such claim, issue or matter, allocated on a reasonableand proportionate basis. For purposes of this Section 7, and without limitation, the termination of any claim, issue or matterin such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issueor matter.

 

Section 8.	Advance of Expenses foran Indemnitee. Subject to the limitations described in Section 3 herein, if, by reason of Indemnitee’s CorporateStatus, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall, without requiring a preliminarydetermination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurredby or on behalf of Indemnitee in connection with (a) such Proceeding which is initiated by a third party who is not a stockholderof the Company, or (b) such Proceeding which is initiated by a stockholder of the Company acting in his or her capacity as suchand for which a court of competent jurisdiction specifically approves such advancement, and which relates to acts or omissionswith respect to the performance of duties or services on behalf of the Company, within ten days after the receipt by the Companyof a statement or statements requesting such advance or advances from time to time, whether prior to or after final dispositionof such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall includeor be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standardof conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertakingby or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be requiredunder applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee,together with the Applicable Legal Rate of interest thereon, relating to claims, issues or matters in the Proceeding as to whichit shall ultimately be established, by clear and convincing evidence, that the standard of conduct has not been met by Indemniteeand which have not been successfully resolved as described in Section 7 of this Agreement. To the extent that Expenses advancedto Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonableand proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf ofIndemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses andwithout any requirement to post security therefor.

 

 

Section 9.	Indemnification and Advanceof Expenses as a Witness or Other Participant. Subject to the limitations in Section 5, to the extent that Indemnitee is ormay be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whetherinstituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall be advanced all reasonableExpenses and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf inconnection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advanceor indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statementsshall reasonably evidence the Expenses incurred by Indemnitee.

 

Section 10.	Procedure for Determinationof Entitlement to Indemnification.

 

(a)	To obtain indemnification under thisAgreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and informationas is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitledto indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriatein Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly uponreceipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

 

(b)	Upon written request by Indemniteefor indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to Indemnitee’sentitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by IndependentCounsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counselshall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL,which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Boardof Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, thenby a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors,(B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL andapproved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to theBoard of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of the members of theBoard of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification,payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, personsor entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to suchperson, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwiseprotected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in thediscretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expensesincurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company(irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify andhold Indemnitee harmless therefrom.

 

 

(c)	The Company shall pay the reasonablefees and expenses of Independent Counsel, if one is appointed.

 

Section 11.	Presumptions and Effectof Certain Proceedings.

 

(a)	In making any determination with respectto entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemniteeis entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance withSection 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connectionwith the making of any determination contrary to that presumption.

 

(b)	The termination of any Proceeding orof any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolocontendereor its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meetthe requisite standard of conduct described herein for indemnification.

 

(c)	The knowledge and/or actions, or failureto act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager,managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company,joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determiningany other right to indemnification under this Agreement.

 

Section 12.	Remedies of Indemnitee.

 

(a)	If (i) a determination is made pursuantto Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance ofExpenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of entitlement to indemnificationshall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request forindemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten daysafter receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to any other sectionof this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination has been made thatIndemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in theState of Maryland, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification oradvance of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conductedby a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commencea proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first hasthe right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall notapply to a proceeding brought by Indemnitee to enforce his or her rights under Section 7 of this Agreement. Except as set forthherein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. TheCompany shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

 

(b)	In any judicial proceeding or arbitrationcommenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses,as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnificationor advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12,Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a finaldetermination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal havebeen exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicialproceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement arenot valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is boundby all of the provisions of this Agreement.

 

(c)	If a determination shall have beenmade pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be boundby such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement byIndemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materiallymisleading, in connection with the request for indemnification.

 

(d)	In the event that Indemnitee is successfulin seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rightsunder, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shallbe indemnified by the Company for, any and all Expenses actually and reasonably incurred by him or her in such judicial adjudicationor arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive partbut not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicialadjudication or arbitration shall be appropriately prorated.

 

(e)	Interest shall be paid by the Companyto Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of theAnnotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with eitherthe tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of thisAgreement or the 60th day after the date on which the Company was requested to make the determination of entitlementto indemnification under Section 10(b) of this Agreement, as applicable, and (ii) and ending on the date such payment is made toIndemnitee by the Company.

 

 

Section 13.	Defense of the UnderlyingProceeding.

 

(a)	Indemnitee shall notify the Companypromptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relatingto any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include withsuch notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure togive any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee,to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceedingor to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent theCompany is thereby actually so prejudiced.

 

(b)	Subject to the provisions of the lastsentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in anyProceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of anysuch decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above.The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consentto the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admissionof fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liabilityin respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee, or (iii) wouldimpose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceedingbrought by Indemnitee under Section 12 of this Agreement.

 

(c)	Notwithstanding the provisions of Section13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemniteereasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld,that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent withother defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by theCompany, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflictof interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceedingin a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subjectto the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company. In addition,if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other persontakes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemniteethe benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’schoice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of theCompany (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter.

 

 

Section 14.	Non-Exclusivity; Survivalof Rights; Subrogation.

 

(a)	The rights of indemnification and advanceof Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any timebe entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitledto vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing by Indemnitee,no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemniteeunder this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to suchamendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequentto such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right orremedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or nowor hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall notprohibit the concurrent assertion or employment of any other right or remedy.

 

(b)	In the event of any payment under thisAgreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shallexecute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessaryto enable the Company to bring suit to enforce such rights.

 

Section 15.	Insurance. The Companywill use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriateby the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee by reason of hisor her Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemniteefor any claims made against Indemnitee by reason of his or her Corporate Status. Without in any way limiting any other obligationunder this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductibleor retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurredby Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. The purchase,establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Companyor Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by theCompany and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies.If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (asa witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt noticeof such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.

 

Section 16.	Coordination of Payments.The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursableas Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy,contract, agreement or otherwise.

 

 

Section 17.	Reports to Stockholders.To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnificationof, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company withthe notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification oradvance of Expenses or prior to such meeting.

 

Section 18.	Duration of Agreement;Binding Effect.

 

(a)	This Agreement shall continue untiland terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agentof the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any otherforeign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employeebenefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) thedate that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and anyProceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).

 

(b)	The indemnification and advance ofExpenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto andtheir respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwiseto all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to bea director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary,employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employeebenefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inureto the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legalrepresentatives.

 

(c)	The Company shall require and causeany successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantialpart, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expresslyto assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to performif no such succession had taken place.

 

(d)	The Company and Indemnitee agree thata monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, andfurther agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee mayenforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actualdamage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precludedfrom seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specificperformance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, withoutthe necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence ofa waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement ofsuch a bond or undertaking.

 

 

Section 19.	Severability. If anyprovision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) thevalidity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portionof any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceablethat is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceableto the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessaryto conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extentpossible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence ofthis Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegalor unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 20.	Identical Counterparts.This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original butall of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceabilityis sought shall be sufficient to evidence the existence of this Agreement.

 

Section 21.	Headings. The headingsof the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreementor to affect the construction thereof.

 

Section 22.	Modification and Waiver.No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof(whether or not similar) nor shall such waiver constitute a continuing waiver.

 

Section 23.	Notices. All notices,requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) deliveredby hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of suchdelivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date onwhich it is so mailed:

 

(a)	If to Indemnitee, to the address setforth on the signature page hereto.

 

 

(b)	If to the Company, to:

 

[                             	         ]

[	                                      ]

[	                                      ]

[	                                      ]

[Attn: General Counsel]

 

or to such other address as may have been furnished in writingto Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

Section 24.	Governing Law. ThisAgreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regardto its conflicts of laws rules.

 

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the parties hereto haveexecuted this Agreement as of the day and year first above written.

 

BUSINESS DEVELOPMENT CORPORATION OF AMERICA

 

 

By: ________________________________

Name:

Title:

 

 

INDEMNITEE

 

 

____________________________________

Name:

Address:

 

 

EXHIBIT A

 

AFFIRMATIONAND UNDERTAKING TO REPAY EXPENSES ADVANCED

 

To: The Board of Directors of _________________________

 

Re: Affirmation and Undertaking

 

Ladies and Gentlemen:

 

This Affirmation and Undertaking is beingprovided pursuant to that certain Indemnification Agreement, dated the _____ day of _______________, 2010, by and between _________________________,a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”),pursuant to which I am entitled to advance of Expenses in connection with **[Description of Proceeding]** (the “Proceeding”).

 

Terms used herein and not otherwise definedshall have the meanings specified in the Indemnification Agreement.

 

I am subject to the Proceeding by reasonof my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith beliefthat at all times, insofar as I was involved as an Independent Director of the Company, in any of the facts or events giving riseto the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improperpersonal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause tobelieve that any act or omission by me was unlawful.

 

In consideration of the advance of Expensesby the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the“Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) suchAdvanced Expenses are subject to the limitations and disqualifications described in the Indemnification Agreement or (2) an actor omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) wasthe result of active and deliberate dishonesty or (3) I actually received an improper personal benefit in money, propertyor services or (4) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission wasunlawful, then I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal Rate of interestthereon, relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.

 

IN WITNESS WHEREOF, I have executed thisAffirmation and Undertaking on this _____ day of _______________, 20____.

 

 

 

_____________________________

Name: