Document:

Exhibit 10.3

EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into this 4TH day of April, 2016, by and between DNB First, N.A. (the "Company"), and Jerry Cotlov ("Employee") setting forth the terms of Employee's prospective employment with the Company.

 

W I T N E S S E T H

 

WHEREAS, DNB Financial Corporation ("DNB"), the parent of the Company, and East River Bank ("ERB") are parties to an Agreement and Plan of Merger, dated as of the date of this Agreement, pursuant to which ERB shall be merged with and into the Company as of the Effective Time (the "Merger"), as defined in such Agreement and Plan of Merger (the "Merger Agreement");

 

WHEREAS, Employee is currently employed by ERB;

 

WHEREAS, in connection with the Merger, the Company and Employee have agreed that Employee will be retained and employed by the Company commencing as of the Effective Time of the Merger (the "Start Date"), subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and (a) the mutual promises set forth herein, (b) the provision of a specified term of employment, (c) the access the Company is and will be providing Employee to certain trade secrets, and confidential and proprietary information related to the business of the Company now and in the future, (d) the compensation and benefits provided for in this Agreement, and (e) other good and valuable consideration, and intending to be legally bound, the Company and Employee covenant and agree as set forth below.

 

1.            Employment.  Upon the terms and conditions set forth herein, the Company hereby agrees to employ Employee as Senior Vice President/Assistant Chief Commercial Lending Officer (Philadelphia Region) of the Company commencing on the Start Date, and Employee hereby accepts such employment, but only if (a) the Employee remains employed by ERB from the date hereof until the Effective Time of the Merger; and (b) the Employee does not engage in conduct constituting Cause (as defined below) with respect to his employment with ERB from the date hereof until the Effective Time of the Merger.  If either of these conditions is not satisfied, this Agreement shall be null and void and of no effect whatsoever.

 

2.            Duties.  Employee agrees to perform such duties and responsibilities consistent with his position and other such duties for the Company that are consistent with Employee's background, training and experience and as shall from time to time be assigned to or required of him by the Company.  Employee's duties shall include, but not be limited to, managing one of the Company's Commercial Lending Teams, including origination, underwriting, approvals and disbursement administration and ensuring the quality of all commercial mortgage, lines of credit, equipment loans and term loans granted by the Company in accordance with policies and procedures of the Company and providing support to the Chief Lending Officer, as appropriate, in development and implementation of the Commercial Lending Strategic Plan and the Company's loan goals.  Employee shall report directly to the Chief Lending Officer of the Company.  Employee shall devote his best efforts and substantially all of his working time, energy and skill, in performing his duties hereunder in a manner which will faithfully and diligently further the business and interests of the Company.  While an employee of the Company, Employee will not accept any outside employment or assume any other business affiliations except with the prior written consent of the Company; provided, however, that nothing herein shall be construed as precluding him from devoting a reasonable amount of time to civic, charitable, trade association, political and similar activities as long as such activities do not materially interfere with Employee's duties hereunder.

 

3.            Term.  Employee's employment with the Company is for a term commencing on the Start Date and ending on the one-year anniversary thereof (the "Term").  Employment following the Term, if any, will be on an at-will basis.

 

 

 

 

4.            Compensation.

 

(a)            Initial Base Salary.  Employee will be paid an annual base salary of $168,000 (the "Base Salary").  The Base Salary will be paid in accordance with the Company's regular payroll practices, subject to such payroll withholdings and deductions as may be required by law.

 

(b)            Bonus Eligibility.  Employee will participate in the Company's Commercial Lending Incentive Program and be eligible to receive bonuses in accordance with the terms and conditions of such Program as administered by the Board of Directors of the Company.  For the calendar year that includes the Start Date, Employee shall be entitled to a pro-rated bonus, if any, under such Program based on the number of days of his employment by the Company during that calendar year.

 

5.            Benefits.  Employee shall be entitled to participate in all employee related benefit programs which are provided to similarly situated employees of the Company.  The Company reserves the right from time to time, to amend in any respect and/or to terminate any and all benefits and benefit plans.

 

6.            Car Allowance.  Employee shall be entitled to a monthly car allowance of $900.

 

7.            Expense Reimbursement. The Company will reimburse Employee for all necessary and reasonable expenses incurred by Employee in connection with the performance of his duties hereunder and in accordance with the Company's regular reimbursement procedures and practices in effect from time to time.

 

8.            Termination of the Agreement by the Company for Cause.

 

(a)            The Company may terminate Employee's employment under this Agreement for Cause.  "Cause" shall mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, conviction of a felony, suspension or removal from office or prohibition from participation in the conduct of ERB's, DNB's or the Company's affairs pursuant to a notice or other action by any bank regulatory agency having jurisdiction over ERB, DNB or the Company, or willful violation of any law, rule or regulation or final cease-and-desist order which in the reasonable judgment of the Board of Directors of the Company will probably cause substantial economic damages to the Company, willful or intentional breach or neglect by Employee of his duties, or material breach of any material provision of this Agreement.  For the avoidance of doubt, Cause shall include any occurrence described in the preceding sentence which occurred in the course of Employee's employment by ERB prior to the Merger which is discovered after the Merger.  For purposes of this paragraph, no act, or failure to act on Employee's part shall be considered "willful" unless done, or omitted to be done, by him without good faith and without reasonable belief that this action or omission was in the best interest of ERB or the Company, as the case may be; provided that any act or omission to act by Employee in reliance upon an approving opinion of counsel to ERB or the Company, as the case may be, or counsel to the Employee shall not be deemed to be willful.  The terms "incompetence" and "misconduct" shall be defined with reference to standards generally prevailing in the banking industry.  In determining incompetence and misconduct, the Company shall have the burden of proof with regard to the acts or omission of Employee and the standards prevailing in the banking industry.

 

(b)            In the event that the Company terminates Employee's employment under this Agreement for Cause, the Company shall not have any further obligation or liability under this Agreement, except that the Company will pay to Employee the portion, if any, of Employee's Base Salary for the period up to the date of termination which is due and owing but remains unpaid, along with unreimbursed expenses, and the Company shall have no further obligation or liability to Employee under this Agreement.

 

		9.	Termination of the Agreement Upon Death or Permanent Incapacitation or by the Employee without Good Reason.

 

(a)            Employee's employment under this Agreement shall automatically terminate upon Employee's death.  The Company may terminate Employee's employment under this Agreement in the event Employee becomes permanently incapacitated as defined below in this subsection, upon at least 30 days' written notice to Employee.  For the purposes of this subsection 9(a), Employee shall be deemed permanently incapacitated if (i) he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, as determined by a physician selected by the Company or its insurer and reasonably acceptable to Employee or his legal representative, or (ii) he is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.

 

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(b)            Employee may resign or otherwise terminate his employment under this Agreement, without Good Reason (as defined below in section 10), upon at least 30 days' written notice to the Company.

 

(c)            Upon termination of the Agreement pursuant to this section 9, the Company will pay to Employee (or in the event that this Agreement terminates as a result of Employee's death, then to his estate or designated beneficiaries) the portion, if any, of Employee's Base Salary for the period up to the date of termination which is due and owing but remains unpaid, any restricted stock awards to which Employee is entitled under the terms of the documents governing any such restricted stock, along with unreimbursed expenses, and the Company shall have no further obligation or liability to Employee under this Agreement.

 

(d)            In the event of a termination of the Agreement pursuant to this section 9 as a result of the Employee's death or permanent incapacitation, the Company shall continue to provide Employee and his dependents with medical and dental insurance coverage as described in section 10(c)(i)(B), (ii) and (iii) below for the remainder of the Term.

 

	 	
10.

	
Termination of the Agreement (a) by the Company for a Reason other than Cause, Death or Permanent Incapacitation, or (b) by Employee for Good Reason.

 

(a)            The Company shall have the right to terminate Employee's employment under this Agreement, at any time for a reason other than Cause, death or permanent incapacitation so long as the Company pays Employee in accordance with section 10(c).

 

(b)            Employee shall have the right to terminate his employment for Good Reason as defined below; provided, however, that prior to any termination of employment for Good Reason, Employee must first provide written notice to the President and Chief Executive Officer of the Company within 90 days of the initial existence of the condition, describing the existence of such condition, and the Company shall thereafter have the right to remedy the condition within 30 days of the date the Company received the written notice from Employee.  If the Company remedies the condition within such 30 day cure period, then no Good Reason shall be deemed to exist with respect to such condition.  If the Company does not remedy the condition within such 30 day cure period, then Employee may deliver a written notice of termination for Good Reason at any time within 60 days following the expiration of such cure period.  "Good Reason" shall mean one or more of the following events (a "Triggering Event"):  (i) the assignment to Employee of any duties inconsistent with Employee's positions, duties, responsibilities, titles or offices with the Company as in effect as of the Start Date, (ii) any removal of Employee from any of such positions, except in connection with a termination or suspension of employment for Cause, permanent incapacitation or death, (iii) a reduction by the Company of Employee's Base Salary, bonus opportunities and/or benefits as in effect as of the Start Date or as the same may be increased from time to time thereafter, or the failure to grant periodic increases in the Employee's base annual salary on a basis at least substantially comparable to the lowest periodic increase granted to other officers of the Company having the title of Senior Vice President or above, (iv) any purported termination of Employee's employment with the Company when Cause for such termination does not exist, (v) a relocation of Employee's workplace to a location more than 30 miles outside of Chester County, Pennsylvania, or (vi) a change in the officer to whom the Employee reports to an officer at a level lower than the Chief Lending Officer.

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(c)            (i)  In the event that, prior to the expiration of the Term, the Company terminates Employee's employment for a reason other than Cause, death or permanent incapacitation, or the Employee terminates his employment for Good Reason during the Term, in each case upon at least 30 days' written notice to the other party, then the Company agrees to (A) pay Employee, as cash severance, the Base Salary the Employee would have earned for the remainder of the Term and (B) continue to provide Employee and his dependents with medical and dental insurance coverage as described below for the remainder of the Term.  Expiration of the Term shall not constitute termination for a reason other than Cause.  The cash severance payments described above in this section 10(c) will be made on the Company's regular paydays and in accordance with the Company's regular payroll practices.  The Company's obligation to pay severance under this subsection is expressly conditioned upon Employee executing a general release provided to him following Employee's termination of employment, which would release any and all claims, charges and complaints against the Company, its affiliates or assigns, Board members or employees through the date of Employee's termination from employment, with such general release to be substantially similar to the form attached hereto as Exhibit A.  The Company will begin to make any severance payment required under this section 10(c) herein within thirty (30) days after Employee's execution of the general release (on the condition that Employee does not earlier revoke acceptance of the general release pursuant to its terms), unless a deferral of payment for six months beyond the date of termination of employment is required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), in which case the first payment following such deferral shall consist of all payments which would have been made prior thereto but for such deferral and provided further that if either (X) the time period for making any cash payment under this section 10(c) commences in one calendar year and ends in the succeeding calendar year or (Y) the time period that Employee has to consider the terms of the general release (including any revocation period under such release) commences in one calendar year and ends in the succeeding calendar year, then the payments shall not commence until the succeeding calendar year.

 

(ii)            In the event that Employee's continued participation in any medical or dental plan, program or arrangement as provided in this section 10(c) is barred or during such period any such plan, program or arrangement is discontinued or the benefits thereunder are materially reduced, then the Company shall arrange to provide Employee and his dependents with benefits substantially similar to those which Employee was entitled to receive under such plans, programs and arrangements immediately prior to the date of termination.

 

(iii)            (A) Any insurance premiums payable by the Company or any successors pursuant to this section 10(c) shall be payable at such times and in such amounts as if Employee was still an employee of the Company, subject to any increases in such amounts imposed by the insurance company or COBRA, with Employee paying any employee portion of the premiums that Employee would have been required to pay if he was still an employee of the Company, and (B) the amount of insurance premiums required to be paid by the Company in any taxable year shall not affect the amount of insurance premiums required to be paid by the Company in any other taxable year.

 

(iv)            Irrespective of whether the Employee signs the general release and is entitled to severance as described above, the Company will pay to Employee the portion, if any, of Employee's Base Salary for the period up to the date of termination which is due and owing but remains unpaid, along with unreimbursed expenses.  Thereafter, the Company shall have no further obligation or liability to Employee under this Agreement.

 

(v)            In the event that Employee does not execute the general release, Employee shall not be entitled to any severance payment or contined insurance benefits described above in section 10(c)(i) and the Company shall have no further obligation or liability under this Agreement except as provided for in section 10(c)(iv).

 

(vi)            In the event that Employee breaches sections 12, 13, or 14 of this Agreement as determined by a court of competent jurisdiction, in addition to the Company's other remedies under this Agreement, the Company's obligation to make the severance payments under section 10(c)(i) will immediately cease, and Employee will be required to repay the Company any monies paid to Employee pursuant to section 10(c)(i) and, in which case, Employee agrees that the release shall remain valid and binding.  In the event that Employee dies during the pay-out period of the severance provided in this section, such remaining severance payments will be made to Employee's estate, or designated beneficiaries, subject to the provisions of this Agreement.

 

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(vii)            The provisions of this section 10(c) shall be Employee's exclusive remedy for the termination of Employee's employment pursuant to sections 10(a) or 10(b) of this Agreement.

 

(d)            Employee shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise.  The severance payments provided for in this Agreement shall not be reduced by any compensation or other payments received by Employee after the date of termination of Employee's employment from any source.

 

11.            Company Clients.  Employee agrees that all clients for whom Employee or others at the Company perform services while at the Company shall be considered clients of the Company, and shall not be considered clients of Employee.  All prospective clients with whom Employee has business dealings during Employee's employment with the Company shall be considered prospective clients of the Company, and shall not be considered prospective clients of Employee.  In the event that Employee's employment with the Company is terminated for any reason (whether voluntarily or involuntarily), Employee shall have no rights in or to any clients or prospective clients of the Company.

 

12.            Non-Disclosure of the Company's Confidential Information.  The Company, in the course of performing its business activities, (a) acquires and develops trade secrets and confidential and proprietary information which is not generally known in the industry, and (b) acquires trade secrets and confidential and proprietary information which is not generally known to the public of or about the Company and its affiliates, clients, prospective clients, vendors, business partners, licensors, suppliers and other companies, persons or entities with which the Company maintains or has maintained a business relationship (hereinafter collectively, "Company Business Relationships").

 

Employee recognizes that the knowledge and information acquired by Employee concerning the following information of the Company and of the Company Business Relationships:  corporate information, including, but not limited to, business plans and methods, trade secrets, products, services, financial affairs, formulae, technology, know-how, contracts, pricing lists, costs, policies, sales methods, financial information, profits, expenses, operations, operating methods and procedures, blueprints, drawings, processes, statistics, suppliers, marketing data, strategic information, sales and plans for future developments, methods, reports, plans, strategies and efforts, lists of clients and/or prospective clients, client and prospective client requirements, information and files, proposals and communications with clients and prospective clients, fees, information regarding meeting attendees, employee lists and information, financial and other record systems, records, applications, computers, computer programs, system documentation, hardware, software and information contained therein, marketing and expansion plans, technologies, development, projects, forms and other trade secrets, inventions designs, know-how, any facts concerning the systems, methods, procedures or plans developed or used by the Company or Company Business Relationships or other private, confidential or proprietary information of or about the Company or Company Business Relationships which is not already available to the public (collectively, "Confidential Information") are valuable, special and unique aspects of the business of the Company and the Company Business Relationships.  Employee recognizes that such Confidential Information would not be provided to Employee by the Company in the absence of this signed Agreement because of the risks that valuable Confidential Information might otherwise be divulged and thereby damage the Company's competitive position in the marketplace, damage the Company's relationship with Company Business Relationships, or otherwise cause damage to Company Business Relationships.

 

Employee agrees that he will not, during or after Employee's relationship with the Company, (i) disclose, in whole or in part, any Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever unless authorized in writing to do so by the Company, or (ii) use any Confidential Information for Employee's own purpose or for the benefit of any person, firm, corporation, association or other entity other than the Company, except in the proper performance of Employee's duties as instructed by the Company.  Notwithstanding the foregoing, Employee may disclose information regarding the business activities of the Company to a bank regulator having regulatory jurisdiction over the activities of the Company provided such disclosure is pursuant to a formal regulator request.  Upon the cessation of Employee's employment with the Company, the restrictions set forth in this section will not apply to Confidential Information which is then in the public domain (unless Employee is responsible, directly or indirectly, for such Confidential Information entering the public domain without the Company's consent).

 

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13.            Intellectual Property.  All patent, trademark, copyright, trade secret and other intellectual property rights (the "Intellectual Property") which Employee (either alone or in conjunction with others) conceived, made, obtained or developed during the term of his employment with the Company or conceives, makes or obtains during the term of his employment with the Company (whether during or outside of working hours), and relate in any way to the Company's business ("Company Intellectual Property"), is the sole property of the Company and shall be considered a work made for hire.  The Intellectual Property belongs to the Company whether or not patent, trademark, copyright and/or other intellectual property right applications are or can be filed thereon.

 

Employee will make full and prompt disclosure to the Company of all Company Intellectual Property and, at the Company's request and expense, will at any time and from time to time during and after Employee's employment with the Company execute and deliver to the Company such applications, assignments and other papers and take such other actions (including, but not limited to, testifying in any legal proceedings) as the Company, in its sole discretion, considers necessary to vest, perfect, defend or maintain the Company's rights in and to such Company Intellectual Property.  To the extent Employee is no longer employed by the Company at the time of such request, Employee shall receive reasonable compensation for his time and reimbursement for reasonable expenses incurred in complying with this provision.  Employee has attached to this Agreement a complete list of Intellectual Property, if any, conceived, made, obtained or developed by Employee outside the scope of his employment by the Company and such Intellectual Property is excluded from the undertakings in this Agreement.

 

14.            Return of the Company's Documents and Other Information.  Upon the cessation of Employee's employment with the Company or at any other time upon request of the Company, Employee shall deliver to the Company any and all Company property (including, but not limited to, keys and credit cards), documents (including, but not limited to, the Company information and documents stored on Employee's computer, including any documents, files, reports or other information received or made by Employee in connection with Employee's employment with the Company, regardless of whether or not such information is Company Confidential Information) and equipment (including, but not limited to, cell phones and computer equipment).

 

15.            Subsequent Employment and Enforcement.

 

(a)            Employee's Ability to Earn Livelihood.  Employee acknowledges that, in the event of a cessation of Employee's employment with the Company, for any reason and at any time, Employee may be able to earn a livelihood without violating the provisions of sections 12 through 14 of this Agreement.  Employee's ability to earn a livelihood without violating sections 12 through 14 of this Agreement is a material condition of Employee's employment with the Company.  Employee and the Company acknowledge that Employee's rights have been limited by this Agreement only to the extent reasonable necessary to protect the legitimate interests of the Company.

 

(b)            Enforcement.   Employee agrees that if Employee violates the covenants and agreements set forth above (including sections 12 through 14), the Company would suffer irreparable harm, and that such harm to the Company may be impossible to measure in monetary damages.  Accordingly, in addition to any other remedies which the Company may have at law or in equity, the Company shall have the right to have all obligations, undertakings, agreements, covenants and other provisions of this Agreement specifically performed by Employee, and the Company shall have the right to obtain preliminary and permanent injunctive relief to secure specific performance, and to prevent a breach or contemplated breach, of this Agreement, provided that prior to seeking such relief, the Company shall first provide written notice to Employee setting forth the facts and circumstances underlying the alleged breach and giving Employee at least 10 business days to cure the alleged breach.  In such event, the Company shall be entitled to an accounting and repayment of all profits, compensation, remunerations or benefits which Employee, directly or indirectly, has realized or may reasonably be expected to realize as a result of, growing out of, or in conjunction with any violation.  Such remedies shall be in addition to and not in limitation of any injunctive relief or other rights or remedies to which the Company is or may be entitled at law or in equity under this Agreement. Notwithstanding anything to the contrary herein, in the event either party pursues court proceedings to enforce an alleged violation of the provisions of this Agreement and fails to prevail in such proceeding, the non-prevailing party shall reimburse the other party for all reasonable legal fees, costs and expenses incurred thereby in such proceeding.

 

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(c)            Employee understands and agrees that the covenants, undertakings and agreements in sections 12 through 14 herein will survive the termination of this Agreement or the cessation of Employee's employment with the Company for any reason.  The existence of any claim or cause of action that Employee may have against the Company or any other person, including but not limited to, any claim under this Agreement, will not constitute a defense or bar to the enforcement of any of the covenants and undertakings contained in sections 12 through 14 (or any of them) herein.

 

(d)            Employee recognizes and acknowledges that the restrictions set forth in sections 12 through 14 above:  (i) are necessary to preserve the Company's legitimate business interests and information and goodwill; (ii) are appropriately limited in time and scope; and (iii) will not prevent Employee from earning a livelihood.

 

(e)            Employee expressly acknowledges that the restrictions and covenants set forth in sections 12 through 14 are a material part of the consideration bargained for by the Company and, without Employee's agreement to be bound by such provisions, the Company would not have agreed to enter into this Agreement.

 

(f)            If any court of competent jurisdiction construes any of the restrictions or covenants set forth in sections 12 through 14 above, or any part thereof, to be invalid or unenforceable because of the duration, scope or geographic area covered thereby, such court will have the power to reduce the duration, scope or geographic area of such provision and, in its reduced form, such provision will then be valid and enforceable and will be enforced.

 

16.            Payment Obligations Absolute.  Provided that the preconditions for payment set forth in this Agreement are fully satisfied, the Company's obligation to pay Employee the severance payments provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off counter claim, recoupment, defense or other right which the Company may have against Employee.  All amounts payable by the Company hereunder shall be paid without notice or demand.

 

17.            Assignability.  This Agreement shall be binding and inure to the benefit of the parties hereto, and to the Company's successors or assigns, entities with which the Company may merge or consolidate, entities to which the Company may sell or transfer all or substantially all of its assets or the assets of the Company, entities which by any corporate transaction or reorganization operate and control the Company's business, or to any other entities which operate as a successor to the Company by operation of law or otherwise.  Since Employee's duties and covenants under this Agreement are personal, this Agreement shall not be assignable by Employee.  Employee expressly consents and agrees to such assignment and enforcement of such rights and obligations by the assignee.

 

18.            Notice.  Any termination of Employee's employment by the Company or by Employee shall be communicated by a dated written notice, signed by the party giving the notice, which shall (a) indicate the specific termination provision in this Agreement relied upon; (b) set forth in reasonable detail the facts and circumstances claimed to provide the basis for termination of Employee's employment under the provision so indicated, and (c) specify the effective date of termination. Any notices required or permitted under this Agreement shall be deemed sufficient and effective if (i) in writing and (ii) either (A) when delivered in person or by facsimile, telecopier, telegraph or other electronic means capable of being embodied in written form or (B) three business days after deposit thereof in the U.S. mails by certified or registered mail, return receipt requested, postage prepaid, addressed to, in the case of the Employee, at the last address the Employee has on file with the Company (unless such address is changed by written notice hereunder) or, in the case of Company, to its main office to the attention of the Company's Chief Executive Officer.

 

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19.            Miscellaneous.

 

(a)            Headings.   The headings contained in this Agreement are inserted for convenience of reference only, and shall not be deemed to be a part of this Agreement for any purposes, and shall not in any way define or affect the meaning, construction or scope of any of the provisions of this Agreement.

 

(b)            Choice of Law/Forum Selection.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania (without regard to its conflicts of laws principles).  The parties irrevocably consent to the exclusive jurisdiction and venue of the federal and state courts located in the Commonwealth of Pennsylvania in all matters arising out of or relating to this Agreement or otherwise arising between the parties and the parties waive any objection based on forum non conveniens and any objection to venue in connection therewith.

 

(c)            Entire Agreement.   This Agreement represents the entire understanding and agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior negotiations, agreements, discussions and proposals, both oral and written, between Employee and the Company.  This Agreement may not be amended or modified, and no waiver hereunder shall be valid or binding, unless set forth in writing, duly executed by the party against whom enforcement of the amendment, modification or waiver is sought.

 

(d)            Construction and Severability.  If any section, paragraph, term or provision of this Agreement, or the application thereof, is determined by a competent court or tribunal to be invalid or unenforceable, then the other parts of such section, paragraph, term or provision shall not be affected thereby and shall be given full force and effect without regard to the invalid or unenforceable portions, and the section, paragraph, term or provision of this Agreement will be deemed modified to the extent necessary to render it valid and enforceable.

 

(e)            Waiver.  Neither the failure nor delay of either party to exercise any right or remedy under this Agreement shall operate or be construed as a waiver of any such right or remedy or constitute an excuse for any subsequent breach of this Agreement.

 

(f)            Acknowledgement.  Employee acknowledges that he has carefully read and considered the provisions of this Agreement, has had an opportunity to consult with an independent legal counsel of his choosing, and accepts employment on the terms set forth in this Agreement.

 

(g)            Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which shall constitute one and the same instrument.  Faxed and electronic signatures are authorized.

 

	 	
DNB FIRST, N.A.

	 	 
	 	 
	 	
By: /s/ William J. Hieb

	 	
Name: William J. Hieb

	 	
Title: President

	 	 
	 	 
	 	/s/ Jerry Cotlov 
	 	
Jerry Cotlov

	 	 

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GENERAL RELEASE

 

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, ______________________________, an individual with an address of ______________________ ("Executive"), on behalf of himself, his agents, successors, heirs and assigns (collectively, the "Releasors"), does hereby release, remise and forever discharge DNB FIRST, N.A. (the "Company") and DNB FINANCIAL CORPORATION ("DNB Financial"), each of their parents, subsidiaries, affiliates, related entities, predecessors, successors, assigns, and each of their current and former agents, shareholders, employees, officers, directors, executives, members, trustees, representatives, attorneys, investors and insurers and each of their heirs, successors, executors and administrators and all persons acting by, through, under and/or in concert with any of them (hereinafter the "Releasees") of and from any and all claims, demands, causes of action, actions, rights, damages, judgments, costs, compensation, suits, debts, dues, accounts, bonds, covenants, agreements, expenses, attorneys' fees, penalties, punitive damages and liability of any nature whatsoever, in law or in equity or otherwise, which Releasors have had, now have, shall or may have, whether known or unknown, foreseen or unforeseen, suspected or unsuspected, by reason of any cause, matter or thing whatsoever, from the beginning of time to the effective date of this General Release, relating to or arising out of Executive's employment or affiliation with the Company, the terms and conditions of such employment or affiliation, and the termination of that employment or affiliation.

By this General Release, Executive acknowledges that he is giving up all claims relating to or arising out of his employment or affiliation with the Company, the terms and conditions of such employment or affiliation, and the termination of that employment or affiliation, including but not limited to, claims for breach of contract or implied contract, wrongful, retaliatory or constructive discharge, negligence, misrepresentation, fraud, detrimental reliance, promissory estoppel, defamation, invasion of privacy, impairment of economic opportunity, tortious interference with contract or business relationships, intentional or negligent inflection of emotional distress, any and all other torts, and claims for attorney's fees, as well as the following statutory claims described below.

 

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Executive further acknowledges that various local, state and federal laws prohibit discrimination based on age, gender, sexual orientation, race, color, national origin, religion, disability, and handicap or veterans status. These include Title VII of the Civil Rights Act of 1964, the Civil Rights Acts of 1866 and 1871, and the Civil Rights Act of 1991 (relating to gender, national origin, religion, race and certain other kinds of job discrimination); the Pregnancy Discrimination Act; the Age Discrimination in Employment Act (the "ADEA") and the Older Workers Benefit Protection Act (relating to age discrimination in employment), the Rehabilitation Act of 1973 and the Americans with Disabilities Act (relating to disability discrimination in employment), and the Pennsylvania Human Relations Act (prohibiting all of the above forms of employment discrimination). Executive also understands and acknowledges that there are various federal and state laws governing benefit issues, wage and hour issues, and other employment issues, including, but not limited to, the Employee Retirement Income Security Act (excluding claims for vested benefits), the Sarbanes-Oxley Act of 2002, the National Labor Relations Act, the Fair Labor Standards Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, the Pennsylvania Wage Payment and Collection Law, wage and hour laws, whistleblower laws and other laws. Executive acknowledges that he is giving up any claims he may have under any of these statutes and under any other federal, state or municipal statute, ordinance, executive order or regulation relating to discrimination in employment, wage and hour issues, or in any way pertaining to employment relationships. He also understands and acknowledges that he is giving up any and all claims for benefits including, but not limited to, life insurance, accidental death & disability insurance, sick leave or other employer-provided plan or program; claims for distributions of income or profit; claims for reimbursement; claims for wages; claims for vacation or other leave time; claims relating to retirement, pension and/or profit sharing plans (excluding claims for vested benefits); claims for group health insurance coverage (excluding claims for COBRA continuation coverage); or any other claims. Executive understands and acknowledges that this General Release applies to all such employment-related claims that he now has or may have had to the effective date of this General Release.

Executive further agrees that neither Executive, nor anyone on Executive's behalf shall or may seek, or be entitled to recover reasonable attorneys' fees and costs pursuant to any of the aforementioned federal, state or municipal statutes, or any other such laws. Executive understands and acknowledges that this General Release applies to all claims and causes of action relating to or arising out of Executive's employment or affiliation with the Company, the terms and conditions of such employment or affiliation, and the termination of that employment or affiliation which he now has or may have had to the date of this General Release.

 

-10-

Notwithstanding any provision of this General Release to the contrary, nothing contained herein shall be deemed to modify, waive, release, terminate or amend any of the following: (a) any claims for breach of the payment and benefit obligations of Sections 9(d) or 10(c) of Executive's Employment Agreement with the Company dated _____________, (b) any claims that cannot be released as a matter of law, including claims for worker's compensation, unemployment benefits claims, or vested retirement benefits, (c) any vested right that Executive may possess under any benefit plan sponsored by the Company or DNB Financial, (d) any vested right that Executive may have under any outstanding stock options or restricted stock awards with respect to the common stock of DNB Financial, (e) any rights or claims that Executive may have under the ADEA which arise after the date Executive signs this General Release, (f) any right to indemnification, contribution or insurance coverage arising under any applicable directors and officers insurance policy of the Company, DNB Financial or their predecessors or successors, applicable law, the terms of the Agreement and Plan of Merger by and between DNB Financial and East River Bank dated as of April __, 2016, or the organizational documents of the Company, DNB Financial or their predecessors or successors, and (g) any right to elect and receive continuation coverage under Section 4980B of the Internal Revenue Code or any successor section. This General Release does not prevent Executive from filing a charge or complaint, including a challenge to the validity of this General Release, with the U.S. Equal Employment Opportunity Commission ("EEOC"). Likewise, this General Release does not prevent Executive from participating in any investigation or proceeding conducted by the EEOC or other government agency, or to otherwise engage in protected activity. However, this General Release does waive Executive's right to any monetary or other relief of any nature whatsoever in connection with any such charge, investigation or proceeding. Notwithstanding any other provision in this General Release, Executive waives any right he may have to bring or participate in any collective action or class action against the Company.

Executive represents that: (i) he has not filed any civil actions, lawsuits, complaints, charges or claims for relief or benefits against or involving the Company with any local, state or federal court, regulatory body, or administrative agency, that are currently outstanding; (ii) he has not transferred or assigned any claim described by this General Release; (iii) he has received all leave (paid or unpaid), compensation, wages, overtime if applicable, vacation pay, expense reimbursements, and/or benefits to which he may be entitled and that no other amounts and/or benefits are due except as expressly provided in Section 9(d) or 10(c) of Executive's Employment Agreement; and (iv) he has not complained of and is not aware of any fraudulent activity or any act(s) which would form the basis of a claim of fraudulent or illegal activity by or against the Company.

 

-11-

Executive acknowledges that he has been advised by the Company to consult with an attorney prior to signing this General Release to explain the terms of this General Release including, without limitation, the terms relating to Executive's release of claims arising under the Age Discrimination in Employment Act. Executive has been given at least twenty-one (21) days to consider the terms of this General Release and consult with his attorney, and for a period of seven (7) days following his acceptance and signing hereof, Executive has the option to revoke his acceptance of this General Release by a signed writing to the Company and received by _____________, with an address of ______________ before the revocation period expires. The revocation period starts the day after Executive signs this General Release. The revocation period expires at 5:00 p.m. on the last day of the revocation period, but if the last day is not a business day, the revocation period continues to run until 5:00 p.m. on the next business day. This General Release shall not become effective or enforceable until the revocation period has expired. If Executive revokes this General Release, then he will not be entitled to any of the payments, benefits, or other consideration offered by the Company in exchange for this General Release. This General Release may be assigned by the Company and shall inure to the benefit of, and may be enforced by the Company, its successors and their respective assigns. This General Release is personal to Executive and may not be assigned by Executive.

Accepted and Agreed to on this

____ day of _____________, 20__,

and intending to be legally bound.

 

By:                                                                      

-12-Exhibit 10.1

 

THIRD AMENDED AND RESTATED INVESTMENT
ADVISORY AND MANAGEMENT SERVICES AGREEMENT

 

This Third Amended
and Restated Investment Advisory and Management Services Agreement (the “Agreement”) is made as of the
23rd day of June, 2016, by and between BUSINESS DEVELOPMENT CORPORATION OF AMERICA, a Maryland corporation (the “Company”),
and BDCA ADVISER, LLC, a Delaware limited liability company (the “Adviser”).

 

WHEREAS, on
October 28, 2010, the Company and the Adviser entered into that certain Investment Advisory and Management Services Agreement (the
“Original Agreement”) wherein the Company and the Adviser agreed that the Adviser would furnish investment
advisory services to the Company and provide certain administrative services necessary for the operation of the Company on the
terms and conditions set forth therein;

 

WHEREAS, on
June 23, 2011, the Company and the Adviser amended and restated the Original Agreement in its entirety and entered into an Amended
and Restated Investment Advisory and Management Services Agreement (the “Amended Agreement”) in order
to reduce the Base Management Fee (as defined in Section 3(a) hereof) from two percent (2%) of the Company’s gross
assets to one and one half percent (1.5%) of the Company’s gross assets;

 

WHEREAS, on
June 5, 2013, the Company and the Adviser amended and restated the Amended Agreement (the “Second Amended Agreement”)
in order to remove the third part of the incentive fee, referred to as the “Subordinated Liquidation Incentive Fee,”
which was equal to 20.0% of the net proceeds from the liquidation of the Company remaining after investors have received distributions
of net proceeds from liquidation of the Company equal to Adjusted Capital (as defined in Section 3(b) hereof) as calculated immediately
prior to liquidation; and

 

WHEREAS, the
Company and the Adviser now desire to amend and restate the Second Amended Agreement in its entirety.

 

NOW, THEREFORE,
in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:

 

1.                 
Duties of the Adviser.

 

(a)               
Retention of Adviser. The Company hereby employs the Adviser to act as the investment adviser to the Company and
to manage the investment and reinvestment of the assets of the Company, subject to the supervision of the Board of Directors of
the Company (the “Board”), for the period and upon the terms herein set forth:

 

(i)           
in accordance with the investment objectives, policies and restrictions that are set forth in the Company's Registration
Statement on Form N-2 filed with the Securities and Exchange Commission (the “SEC”), as amended from
time to time (the “Registration Statement”), if any, and/or the Company’s periodic reports filed
with the SEC from time to time; and

 

     

     

    

 

(ii)           during
the term of this Agreement in accordance with all other applicable federal and state laws, rules and regulations, and the Company's
charter and bylaws, in each case as amended from time to time,

 

(b)              
Responsibilities of Adviser. Without limiting the generality of the foregoing, the Adviser shall, during the term
and subject to the provisions of this Agreement:

 

(i)            determine
the composition and allocation of the portfolio of the Company, the nature and timing of the changes therein and the manner of
implementing such changes;

 

(ii)           
identify, evaluate and negotiate the structure of the investments made by the Company;

 

(iii)          
execute, monitor and service the Company's investments;

 

(iv)         
determine the securities and other assets that the Company shall purchase, retain, or sell;

 

(v)           
perform due diligence on prospective portfolio companies; and

 

(vi)           provide
the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably
require for the investment of its funds.

 

(c)               
Power and Authority. To facilitate the Adviser's performance of these undertakings, but subject to the restrictions
contained herein, the Company hereby delegates to the Adviser, and the Adviser hereby accepts, the power and authority on behalf
of the Company to effectuate its investment decisions for the Company, including the execution and delivery of all documents relating
to the Company's investments and the placing of orders for other purchase or sale transactions on behalf of the Company. In the
event that the Company determines to acquire debt financing, the Adviser shall arrange for such financing on the Company's behalf,
subject to the oversight and approval of the Board.

 

(d)              
Acceptance of Employment. The Adviser hereby accepts such employment and agrees during the term hereof to render
the services described herein for the compensation provided herein, subject to the limitations contained herein.

 

(e)               
Sub-Advisers. The Adviser is hereby authorized to enter into one or more sub-advisory agreements with other investment
advisers (each, a “Sub-Adviser”) pursuant to which the Adviser may obtain the services of the Sub-Adviser(s)
to assist the Adviser in fulfilling its responsibilities hereunder. Specifically, the Adviser may retain a Sub-Adviser to recommend
specific securities or other investments based upon the Company's investment objectives, policies and restrictions, and work, along
with the Adviser, in sourcing, structuring, negotiating, arranging or effecting the acquisition or disposition of such investments
and monitoring investments on behalf of the Company, subject to the oversight of the Adviser and the Company.

 

     - 1 -

     

    

 

(i)           
The Adviser and not the Company shall be responsible for any compensation payable to any Sub-Adviser.

 

(ii)           
Any sub-advisory agreement entered into by the Adviser shall be in accordance with the requirements of the Investment Company
Act, including without limitation the requirements relating to Board and Company stockholder approval thereunder, and other applicable
federal and state law.

 

(iii)         
Any Sub-Adviser shall be subject to the same fiduciary duties imposed on the Adviser pursuant to this Agreement, the Investment
Company Act and the Advisers Act, as well as other applicable federal and state law.

 

(f)               
Independent Contractor Status. The Adviser shall, for all purposes herein provided, be deemed to be an independent
contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Company
in any way or otherwise be deemed an agent of the Company.

 

(g)              
Record Retention. Subject to review by and the overall control of the Board, the Adviser shall keep and preserve
for the period required by the Investment Company Act any books and records relevant to the provision of its investment advisory
services to the Company and shall specifically maintain all books and records with respect to the Company's portfolio transactions
and shall render to the Board such periodic and special reports as the Board may reasonably request or as may be required under
applicable federal and state law, and shall make such records available for inspection by the Board and its authorized agents,
at any time and from time to time during normal business hours. The Adviser agrees that all records that it maintains for the Company
are the property of the Company and shall surrender promptly to the Company any such records upon the Company's request and upon
termination of this Agreement pursuant to Section 9, provided that the Adviser may retain a copy of such records.

 

The following provisions
in this Section 1 shall apply for only so long as the shares of the Company are not listed on a national securities exchange.

 

(h)              
Administrator. The Adviser shall, upon request by an official or agency administering the securities laws of a state,
province, or commonwealth (an “State Administrator”), submit to such State Administrator the reports
and statements required to be distributed to Company stockholders pursuant to this Agreement, the Registration Statement and applicable
federal and state law.

 

(i)                
Fiduciary Duty: It is acknowledged that the Adviser shall have a fiduciary responsibility for the safekeeping and
use of all funds and assets of the Company, whether or not in the Adviser's immediate possession or control. The Adviser shall
not employ, or permit another to employ, such funds or assets in any manner except for the exclusive benefit of the Company. The
Adviser shall not, by entry into an agreement with any stockholder of the Company or otherwise, contract away the fiduciary obligation
owed to the Company and the Company stockholders under common law.

 

     - 2 -

     

    

 

2.                 
Company's Responsibilities and Expenses Payable by the Company.

 

(a)               
Costs. Subject to the limitations on reimbursement of the Adviser as set forth in Section 2(b) below, the
Company, either directly or through reimbursement to the Adviser, shall bear all other costs and expenses of its operations and
transactions, including (without limitation) fees and expenses relating to: expenses deemed to be “organization and offering
expenses” of the Company for purposes of Conduct Rule 2310(a)(12) of the Financial Industry Regulatory Authority (for purposes
of this Agreement, such expenses, exclusive of commissions, the dealer manager fee and any discounts, are hereinafter referred
to as “Organization and Offering Expenses”); amounts paid to third parties for administrative services; the investigation
and monitoring of the Company's investments; the cost of calculating the Company's net asset value; the cost of effecting sales
and repurchases of shares of the Company's common stock and other securities; management and incentive fees payable pursuant to
the investment advisory agreement; fees payable to third parties relating to, or associated with, making investments and valuing
investments (including third-party valuation firms), transfer agent and custodial fees, fees and expenses associated with marketing
efforts (including attendance at investment conferences and similar events); federal and state registration fees; any exchange
listing fees; federal, state and local taxes; independent directors' fees and expenses; brokerage commissions; costs of proxy statements;
stockholders' reports and notices; costs of preparing government filings, including periodic and current reports with the SEC;
fidelity bond, liability insurance and other insurance premiums; and printing, mailing, independent accountants and outside legal
costs.

 

Notwithstanding
the foregoing, the Company shall not be liable for Organization and Offering Expenses to the extent that Organization and Offering
Expenses, together with all prior Organization Offering Expenses, exceeds the greater of $125,000 and 1.5% of the aggregate gross
proceeds from the offering of the Company's securities (the “Offering Proceeds”). More specifically,
the Company shall be obligated to reimburse the Adviser for all current and past Organization and Offering Expenses paid by the
Adviser and not already reimbursed by the Company (the “Reimbursable O&O Expenses”) as follows:

 

(i)           
if the Offering Proceeds are $8,333,333.33 or less, the Company shall reimburse the Adviser for such Reimbursable O&O Expenses
to the extent that the Reimbursable O&O Expenses, together with all past Organization and Offering Expenses for which the
Adviser has received reimbursement, does not exceed $125,000; or

 

(ii)           
if the Offering Proceeds exceed $8,333,333.33, the Company shall reimburse the Adviser for such Reimbursable O&O Expenses
to the extent that the Reimbursable O&O Expenses, together with all past Organization and Offering Expenses for which the
Adviser has received reimbursement, does not exceed an amount equal to 1.5% of the Offering Proceeds or a maximum reimbursement
of $22,500,000, assuming the maximum offering size is $1,500,000,000.

 

     - 3 -

     

    

 

The following provisions
in this Section 2(b) shall apply for only so long as the shares of the Company are not listed on a national securities exchange.

 

(b)              
Limitations on Reimbursement of Expenses. In addition to the compensation paid to the Adviser pursuant to Section
3, the Company shall reimburse the Adviser for all expenses of the Company incurred by the Adviser as well as the actual cost
of goods and services used for or by the Company and obtained from entities not affiliated with the Adviser. The Adviser may be
reimbursed for the administrative services performed by it on behalf of the Company; provided, however, the reimbursement shall
be an amount equal to the lower of the Adviser's actual cost or the amount the Company would be required to pay third parties for
the provision of comparable administrative services in the same geographic location; and provided, further, that such costs are
reasonably allocated to the Company on the basis of assets, revenues, time records or other method conforming with generally accepted
accounting principles. No reimbursement shall be permitted for services for which the Adviser is entitled to compensation by way
of a separate fee. Excluded from the allowable reimbursement shall be:

 

(i)           
rent or depreciation, utilities, capital equipment, and other administrative items of the Adviser; and

 

(ii)           
salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any executive officer
or board member of the Adviser (or any individual performing such services) or a holder of 10% or greater equity interest in the
Adviser (or any person having the power to direct or cause the direction of the Adviser, whether by ownership of voting securities,
by contract or otherwise).

 

(c)               
Periodic Reimbursement. Expenses incurred by the Adviser on behalf of the Company and payable pursuant to this Section
2 shall be reimbursed no less than monthly to the Adviser. The Adviser shall prepare a statement documenting the expenses of
the Company and the calculation of the reimbursement and shall deliver such statement to the Company prior to full reimbursement.

 

3.                 
Compensation of the Adviser. The Company agrees to pay, and the Adviser agrees to accept, as compensation
for the services provided by the Adviser hereunder, a base management fee (“Base Management Fee”) and
an incentive fee (“Incentive Fee”) as hereinafter set forth. The Adviser may agree to temporarily or
permanently waive, in whole or in part, the Base Management Fee and/or the Incentive Fee.

 

(a)               
Base Management Fee.  The Base Management Fee shall be calculated at an annual rate of one and one half
percent (1.5%) of the Company’s average gross assets. The Base Management Fee shall be payable quarterly in arrears, and
shall be calculated based on the average value of the Company’s gross assets at the end of the two most recently completed
calendar quarters. All or any part of the Base Management Fee not taken as to any quarter shall be deferred without interest and
may be taken in such other quarter as the Adviser shall determine. The Base Management Fee for any partial month or quarter shall
be appropriately pro rated.

 

     - 4 -

     

    

 

(b)              
Incentive Fee.  The Incentive Fee shall consist of two parts, as follows:

 

(i)           
The first part, referred to as the “Incentive Fee on Income,” shall be calculated and payable quarterly in arrears
based on the Company’s “Pre-Incentive Fee Net Investment Income” for the immediately preceding quarter. The payment
of the Incentive Fee on Income shall be subject to payment of a preferred return to investors each quarter, expressed as a quarterly
rate of return on the value of the Company’s net assets at the end of the most recently completed calendar quarter, of 1.75%
(7.00% annualized), subject to a “catch up” feature (as described below). The calculation of the Incentive Fee on Income
for each quarter is as follows:

 

(A)            
No Incentive Fee on Income shall be payable to the Adviser in any calendar quarter in which the Company’s Pre-Incentive
Fee Net Investment Income does not exceed the preferred return rate of 1.75% or 7.00% annualized (the “Preferred Return”)
on net assets;

 

(B)             
100% of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the preferred return but is less
than or equal to 2.1875% in any calendar quarter (8.75% annualized) shall be payable to the Adviser. This portion of the company’s
Incentive Fee on Income is referred to as the “catch up” and is intended to provide the Adviser with an incentive fee
of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income when the Company’s Pre-Incentive Fee Net Investment
Income reaches 2.1875% (8.75% annualized) in any calendar quarter; and

 

(C)             
For any quarter in which the Company’s Pre-Incentive Fee Net Investment Income exceeds 2.1875% (8.75% annualized),
the Incentive Fee on Income shall equal 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, as the
Preferred Return and catch-up will have been achieved.

 

(ii)           
The second part of the incentive fee, referred to as the “Incentive Fee on Capital Gains During Operations,”
shall be an incentive fee on capital gains earned on liquidated investments from the portfolio during operations prior to the liquidation
of the Company and shall be determined and payable in arrears as of the end of each calendar year (or upon termination of the investment
advisory agreement). This fee shall equal 20.0% of the Company’s incentive fee capital gains, which shall equal the Company’s
realized capital gains on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all
realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously
paid capital gain incentive fees.

 

(iii)           
For purposes of Section 3(b),“Pre-Incentive Fee Net Investment Income” means interest income,
dividend income and any other income (including any other fees, other than fees for providing managerial assistance, such as commitment,
origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued
during the calendar quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses
payable under the administration agreement and any interest expense and dividends paid on any issued and outstanding preferred
stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred
interest feature (such as original issue discount debt instruments with payment-in-kind interest and zero coupon securities), accrued
income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital
gains, realized capital losses or unrealized capital appreciation or depreciation.

 

     - 5 -

     

    

 

(iv)           
Notwithstanding the foregoing, in no event will the Adviser’s compensation on the basis of a share of capital gains
exceed 20% of the realized capital gains upon the funds of the Company over the life of the Company, computed net of all realized
capital losses and unrealized capital depreciation.

 

4.                 
Covenants of the Adviser.

 

(a)               
Adviser Status. The Adviser covenants that it will register as an investment adviser under the Advisers Act and will
maintain such registration. The Adviser agrees that its activities will at all times be in compliance in all material respects
with all applicable federal and state laws governing its operations and investments.

 

The following provisions
in this Section 4 shall apply for only so long as the shares of the Company are not listed on a national securities exchange.

 

(b)              
Reports to Stockholders. The Adviser shall prepare or shall cause to be prepared and distributed to stockholders
during each year the following reports of the Company (either included in a periodic report filed with the SEC or distributed in
a separate report):

 

(i)           
Quarterly Reports. Within 60 days of the end of each quarter, a report containing the same financial information
contained in the Company's Quarterly Report on Form 10-Q filed by the Company under the Securities Exchange Act of 1934, as amended.

 

(ii)           
Annual Report. Within 120 days after the end of the Company's fiscal year, an annual report containing:

 

(A)            
A balance sheet as of the end of each fiscal year and statements of income, equity, and cash flow, for the year then ended,
all of which shall be prepared in accordance with generally accepted accounting principles and accompanied by an auditor's report
containing an opinion of an independent certified public accountant;

 

(B)             
A report of the activities of the Company during the period covered by the report;

 

     - 6 -

     

    

 

(C)             
Where forecasts have been provided to the Company's stockholders, a table comparing the forecasts previously provided with
the actual results during the period covered by the report;

 

(D)            
A report setting forth distributions by the Company for the period covered thereby and separately identifying distributions
from (i) cash flow from operations during the period; (ii) cash flow from operations during a prior period which have been held
as reserves; and (iii) proceeds from disposition of Company assets.

 

(iii)           
Previous Reimbursement Reports. The Adviser shall prepare or shall cause to be prepared a report, prepared in accordance
with the American Institute of Certified Public Accountants United States Auditing Standards relating to special reports, and distributed
to stockholders not less than annually, containing an itemized list of the costs reimbursed to the Adviser pursuant to Section
2(b) for the previous fiscal year. The special report shall at a minimum provide:

 

(A)            
A review of the time records of individual employees, the costs of whose services were reimbursed; and

 

(B)             
A review of the specific nature of the work performed by each such employee.

 

(iv)          
Proposed Reimbursement Reports. The Adviser shall prepare or shall cause to be prepared a report containing an itemized
estimate of all proposed expenses for which it shall receive reimbursements pursuant to Section 2(b) of this Agreement for the
next fiscal year, together with a breakdown by year of such expenses reimbursed in each of the last five public programs formed
by the Adviser.

 

(v)          
Proposed Federal Income Tax Returns. Within 75 days after the end of the Company's fiscal year, all information necessary for
Stockholders' to prepare their federal income tax returns.

 

(c)               
Reports to State Administrators. The Adviser shall, upon written request of any State Administrator, submit any of
the reports and statements to be prepared and distributed by it pursuant to this Section 4 to such State Administrator.

 

(d)              
Reserves. In performing its duties hereunder, the Adviser shall cause the Company to provide for adequate reserves
for normal replacements and contingencies (but not for payment of fees payable to the Adviser hereunder) by causing the Company
to retain a reasonable percentage of proceeds from offerings and revenues.

 

(e)               
Recommendations Regarding Reviews. From time to time and not less than quarterly, the Adviser must review the Company's
accounts to determine whether cash distributions are appropriate. The Company may, subject to authorization by the Board of Directors,
distribute pro rata to the stockholders funds received by the Company which the Adviser deems unnecessary to retain in the Company.

 

     - 7 -

     

    

 

(f)               
Temporary Investments. The Adviser shall, in its sole discretion, temporarily place proceeds from offerings by the
Company into short term, highly liquid investments which, in its reasonable judgment, afford appropriate safety of principal during
such time as it is determining the composition and allocation of the portfolio of the Company and the nature, timing and implementation
of any changes thereto pursuant to Section 1(b); provided however, that the Adviser shall be under no fiduciary obligation
to select any such short-term, highly liquid investment based solely on any yield or return of such investment. The Adviser shall
cause any proceeds of the offering of Company securities not committed for investment within the later of two years from the date
of effectiveness of the Registration Statement or one year from termination of the offering, unless a longer period is permitted
by the applicable Administrator, to be paid as a distribution to the stockholders of the Company as a return of capital without
deduction of Front End Fees (as defined below).

 

5.                 
Brokerage Commissions. Limitations on Front End Fees; Period of Offering; Assessments

 

(a)               
Brokerage Commissions. The Adviser is hereby authorized, to the fullest extent now or hereafter permitted by law,
to cause the Company to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged
for effecting that transaction, if the Adviser determines in good faith, taking into account such factors as price (including the
applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm
and the firm's risk and skill in positioning blocks of securities, that such amount of commission is reasonable in relation to
the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of either that particular
transaction or its overall responsibilities with respect to the Company's portfolio, and constitutes the best net results for the
Company.

 

The following provisions
in this Section 5 shall apply for only so long as the shares of the Company are not listed on a national securities exchange.

 

(b)              
Limitations. Notwithstanding anything herein to the contrary:

 

(i)           
All fees and expenses paid by any party for any services rendered to organize the Company and to acquire assets for the Company
(“Front End Fees”) shall be reasonable and shall not exceed 18% of the gross offering proceeds, regardless of the
source of payment. Any reimbursement to the Adviser or any other person for deferred organizational and offering expenses, including
any interest thereon, if any, will be included within this 18% limitation.

 

(ii)          
The Adviser shall commit at least eighty-two percent (82%) of the gross offering proceeds towards the investment or reinvestment
of assets and reserves as set forth in Section 4(d) above on behalf of the Company. The remaining proceeds may be used to pay Front
End Fees.

 

     - 8 -

     

    

 

6.                 
Other Activities of the Adviser. The services of the Adviser to the Company are not exclusive,
and the Adviser may engage in any other business or render similar or different services to others including, without limitation,
the direct or indirect sponsorship or management of other investment based accounts or commingled pools of capital, however structured,
having investment objectives similar to those of the Company, so long as its services to the Company hereunder are not impaired
thereby, and nothing in this Agreement shall limit or restrict the right of any manager, partner, member (including its members
and the owners of its members), officer or employee of the Adviser to engage in any other business or to devote his or her time
and attention in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation
in connection therewith (including fees for serving as a director of, or providing consulting services to, one or more of the Company's
portfolio companies, subject to applicable law). The Adviser assumes no responsibility under this Agreement other than to render
the services called for hereunder. It is understood that directors, officers, employees and stockholders of the Company are or
may become interested in the Adviser and its affiliates, as directors, officers, employees, partners, stockholders, members, managers
or otherwise, and that the Adviser and directors, officers, employees, partners, stockholders, members and managers of the Adviser
and its affiliates are or may become similarly interested in the Company as stockholders or otherwise.

 

7.                 
Responsibility of Dual Directors, Officers and/or Employees. If any person who is a manager, partner,
member, officer or employee of the Adviser is or becomes a director, officer and/or employee of the Company and acts as such in
any business of the Company, then such manager, partner, member, officer and/or employee of the Adviser shall be deemed to be acting
in such capacity solely for the Company, and not as a manager, partner, member, officer or employee of the Adviser or under the
control or direction of the Adviser, even if paid by the Adviser.

 

8.                 
Indemnification.

 

(a)               
Indemnification. The Adviser (and its officers, managers, partners, members (and their members, including the owners
of their members), agents, employees, controlling persons and any other person or entity affiliated with the Adviser) shall not
be liable to the Company for any action taken or omitted to be taken by the Adviser in connection with the performance of any of
its duties or obligations under this Agreement or otherwise as an investment advisor of the Company (except to the extent specified
in Section 36(b) of the Investment Company Act concerning loss resulting from a breach of fiduciary duty (as the same is
finally determined by judicial proceedings) with respect to the receipt of compensation for services, and the Company shall indemnify,
defend and protect the Adviser (and its officers, managers, partners, members (and their members, including the owners of their
members), agents, employees, controlling persons and any other person or entity affiliated with the Adviser, each of whom shall
be deemed a third party beneficiary hereof) (collectively, the “Indemnified Parties”) and hold them harmless
from and against all damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid
in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation
or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of or otherwise
based upon the performance of any of the Adviser's duties or obligations under this Agreement or otherwise as an investment adviser
of the Company, to the extent such damages, liabilities, costs and expenses are not fully reimbursed by insurance, and to the extent
that such indemnification would not be inconsistent with the laws of the State of Maryland, the charter of the Company or the provisions
of Section II.G of the Omnibus Guidelines published by the North American Securities Administrators Association on March
29, 1992, as it may be amended from time to time.

 

     - 9 -

     

    

 

The following provisions
in this Section 8 shall apply for only so long as the shares of the Company are not listed on a national securities exchange.

 

(b)              
Limitations on Indemnification. Notwithstanding Section 8(a) to the contrary, the Company shall not provide
for indemnification of the Indemnified Parties for any liability or loss suffered by the Indemnified Parties, nor shall the Company
provide that any of the Indemnified Parties be held harmless for any loss or liability suffered by the Company, unless all of the
following conditions are met:

 

(i)           
the Indemnified Party has determined, in good faith, that the course of conduct which caused the loss or liability was
in the best interests of the Company;

 

(ii)           
the Indemnified Party was acting on behalf of or performing services for the Company;

 

(iii)          
such liability or loss was not the result of negligence or misconduct by the Indemnified Party; and

 

(iv)         
such indemnification or agreement to hold harmless is recoverable only out of the Company's net assets and not from stockholders.

 

Furthermore, the Indemnified
Party shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of federal or
state securities laws unless one or more of the following conditions are met:

 

(i)           
there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular
indemnitee;

 

(ii)          
such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee;
or

 

(iii)          
a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification
of the settlement and related costs should be made, and the court of law considering the request for indemnification has been
advised of the position of the SEC and the published position of any state securities regulatory authority in which securities
of the Company were offered or sold as to indemnification for violations of securities laws.

 

(c)               
Advancement of Funds. The Company shall be permitted to advance funds to the Indemnified Party for legal expenses
and other costs incurred as a result of any legal action for which indemnification is being sought only if all of the following
conditions are met:

 

     - 10 -

     

    

 

(i)           
The legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company;

 

(ii)          
The legal action is initiated by a third party who is not a Company stockholder, or the legal action is initiated by a Company
stockholder and a court of competent jurisdiction specifically approves such advancement; and

 

(iii)         
The Indemnified Party undertakes to repay the advanced funds to the Company, together with the applicable legal rate of
interest thereon, in cases in which the Indemnified Party is not found to be entitled to indemnification.

 

9.                 
Effectiveness, Duration and Termination of Agreement.

 

(a)               
Term and Effectiveness. This Agreement shall become effective as of the date that the Company meets the minimum offering
requirement, as such term is defined in the prospectus contained in the Company's registration statement on Form N-2 as declared
effective by the SEC. This Agreement shall remain in effect for two years, and thereafter shall continue automatically for successive
annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board, or by the
vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company's directors
who are not parties to this Agreement or “interested persons” (as such term is defined in Section 2(a)(19) of
the Investment Company Act) of any such party, in accordance with the requirements of the Investment Company Act.

 

(b)              
Termination. This Agreement may be terminated at any time, without the payment of any penalty, (a) by the Company
upon 60 days' written notice to the Adviser, (i) upon the vote of a majority of the outstanding voting securities of the Company,
or (ii) by the vote of the Company's independent directors, or (b) by the Adviser upon 120 days' written notice to the Company.
This Agreement shall automatically terminate in the event of its “assignment” (as such term is defined for purposes
of Section 15(a)(4) of the Investment Company Act). The provisions of Section 8 of this Agreement shall remain in
full force and effect, and the Adviser shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement.

 

(c)               
Payments to and Duties of Adviser Upon Termination.

 

(i)           
After the termination of this Agreement, the Adviser shall not be entitled to compensation for further services provided
hereunder except that it shall be entitled to receive from the Company within 30 days after the effective date of such termination
all unpaid reimbursements and all earned but unpaid fees payable to the Adviser prior to termination of this Agreement. If the
Company and the Adviser cannot agree on the amount of such reimbursements and fees, the parties will submit to binding arbitration.

 

     - 11 -

     

    

 

(ii)           
The Adviser shall promptly upon termination:

 

(A)            
Deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all
money held by it, covering the period following the date of the last accounting furnished to the Board;

 

(B)             
Deliver to the Board all assets and documents of the Company then in custody of the Adviser; and

 

(C)             
Cooperate with the Company to provide an orderly management transition.

 

The following provisions
in this Section 9 shall apply for only so long as the shares of the Company are not listed on a national securities exchange.

 

(d)              
Other Matters. Without the approval of holders of a majority of the shares entitled to vote on the matter, the Adviser
shall not: (i) amend the investment advisory agreement except for amendments that do not adversely affect the interests of the
stockholders; (ii) voluntarily withdraw as the Adviser unless such withdrawal would not affect the tax status of the Company and
would not materially adversely affect the stockholders; (iii) appoint a new Adviser; (iv) sell all or substantially all of the
Company's assets other than in the ordinary course of the Company's business; or (v) cause the merger or other reorganization of
the Company. In the event that the Adviser should withdraw pursuant to (ii) above, the withdrawing Adviser shall pay all expenses
incurred as a result of its withdrawal. The Company may terminate the Adviser's interest in the Company's revenues, expenses, income,
losses, distributions and capital by payment of an amount equal to the then present fair market value of the terminated Adviser's
interest, determined by agreement of the terminated Adviser and the Company. If the Company and the Adviser cannot agree upon such
amount, then such amount will be determined in accordance with the then current rules of the American Arbitration Association.
The expenses of such arbitration shall be borne equally by the terminated Adviser and the Company. The method of payment to the
terminated Adviser must be fair and must protect the solvency and liquidity of the Company.

 

(e)               
With respect to any shares owned by the Adviser, the Adviser may not vote or consent on matters submitted to the Stockholders
regarding the removal of the Adviser or regarding any transaction between the Company and the Adviser.  In determining
the existence of the requisite percentage of shares necessary to approve a matter on which the Adviser may not vote or consent,
any shares owned by the Adviser shall not be included.

 

10.             
Conflicts of Interests and Prohibited Activities. The following provisions in this Section 10
shall apply for only so long as the shares of the Company are not listed on a national securities exchange.

 

     - 12 -

     

    

 

(a)               
No Exclusive Agreement. The Adviser is not hereby granted or entitled to an exclusive right to sell or exclusive
employment to sell assets for the Company.

 

(b)              
Rebates, Kickbacks and Reciprocal Arrangements.

 

(i)           
The Adviser agrees that it shall not (A) receive or accept any rebate, give-up or similar arrangement that is prohibited
under applicable federal or state securities laws, (B) participate in any reciprocal business arrangement that would circumvent
provisions of applicable federal or state securities laws governing conflicts of interest or investment restrictions, or (C) enter
into any agreement, arrangement or understanding that would circumvent the restrictions against dealing with affiliates or promoters
under applicable federal or state securities laws.

 

(ii)           
The Adviser agrees that it shall not directly or indirectly pay or award any fees or commissions or other compensation to any
person or entity engaged to sell the Company's stock or give investment advice to a potential stockholder; provided, however,
that this subsection shall not prohibit the payment of a registered broker-dealer or other properly licensed agent from sales
commissions for selling or distributing the Company's common stock.

 

(c)               
Commingling. The Adviser covenants that it shall not permit or cause to be permitted the Company's funds from being
commingled with the funds of any other entity. Nothing in this Subsection 10(c) shall prohibit the Adviser from establishing
a master fiduciary account pursuant to which separate sub-trust accounts are established for the benefit of affiliated programs,
provided that the Company's funds are protected from the claims of other programs and creditors of such programs.

 

11.             
Notices. Any notice under this Agreement shall be given in writing, addressed and delivered or
mailed, postage prepaid, to the other party at its principal office.

 

12.             
Amendments. This Agreement may be amended by mutual consent.

 

13.             
Entire Agreement; Governing Law. This Agreement contains the entire agreement of the parties and
supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. Notwithstanding the
place where this Agreement may be executed by any of the parties hereto, this Agreement shall be construed in accordance with the
laws of the State of New York. For so long as the Company is regulated as a BDC under the Investment Company Act, this Agreement
shall also be construed in accordance with the applicable provisions of the Investment Company Act. In such case, to the extent
the applicable laws of the State of New York, or any of the provisions herein, conflict with the provisions of the Investment Company
Act, the latter shall control.

 

     - 13 -

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Third Amended and Restated Investment Advisory and Management Services Agreement to be duly
executed on the date above written.

 

	 	BUSINESS DEVELOPMENT CORPORATION OF AMERICA
	 	 
	 	 
	 	By:    /s/ Corinne D. Pankovcin                                                    
	 	          Name: Corinne D. Pankovcin
	 	          Title:   Chief Financial Officer, Treasurer and Secretary
	 	 
	 	 
	 	 
	 	BDCA ADVISER, LLC 
	 	 
	 	 
	 	By:    /s/ Peter M. Budko                                                                
	 	          Name: Peter M. Budko
	 	          Title:   Chief Executive Officer and President

 

 

     - 14 -

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