Exhibit 10.19
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT
(“ Agreement ”) is made and entered into this 20
th day
of March, 2007 (the “ Effective Date ”), by and
between GSC Investment LLC, a Maryland limited liability company
(the “ Company ”), and Robert F. Cummings, Jr.
(“ Indemnitee ”).
WHEREAS, the Company is a newly
organized limited liability company that expects to merge (the
“ Merger Transaction ”) with and into GSC
Investment Corp., a Maryland corporation (the “
Corporation ”) that in turn expects to file an
election to be treated as a business development company under the
Investment Company Act of 1940, as amended (the “
Investment Company Act ”) and to elect to be taxable
as a regulated investment company commencing with its taxable year
ending December 31, 2007. Unless the context otherwise
requires, references to the “Company” included herein
shall mean both GSC Investment LLC prior to the closing of the
Merger Transaction and GSC Investment Corp. on or after such
closing.
WHEREAS, GSCP (NJ), L.P., a Delaware
limited partnership (the “ Adviser ”), currently
provides investment advisory services to the Company pursuant to an
Investment Advisory and Management Agreement between the Company
and the Adviser (the “ Advisory Agreement ”);
and
WHEREAS, Indemnitee currently serves
as an investment committee member of the Adviser and may,
therefore, be subjected to claims, suits or proceedings arising as
a result of his service; and
WHEREAS, as an inducement to the
Adviser to continue to serve as the Company’s investment
adviser and to Indemnitee to continue to serve as an investment
committee member of the Adviser, the Company has agreed to
indemnify and to advance expenses and costs incurred by Indemnitee
in connection with any such claims, suits or proceedings, to the
fullest extent permitted by law; and
WHEREAS, the parties by this
Agreement desire to set forth their agreement regarding
indemnification and advance of expenses.
NOW, THEREFORE, in consideration of
the premises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
Section 1 .
Definitions. For purposes of this Agreement:
(a) “ Change
in Control ” means a change in control of the Company
occurring after the Effective Date of a nature that would be
required to be
reported
in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange
Act of 1934, as amended (the “ Act ”), whether
or not the Company is then subject to such reporting requirement;
provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if after the Effective
Date (i) any “ person ” (as such term is
used in Sections 13(d) and 14(d) of the Act) is or becomes the
“ beneficial owner ” (as defined in
Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 15% or more of the combined
voting power of the Company’s then outstanding securities
without the prior approval of at least two-thirds of the members of
the Board of Directors of the Company in office immediately prior
to such person attaining such percentage interest; (ii) there
occurs a proxy contest, or the Company is a party to a merger,
consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least two-thirds of the members
of the Board of Directors of the Company then in office, as a
consequence of which members of the Board of Directors of the
Company in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors of the
Company thereafter; or (iii) during any period of two
consecutive years, other than as a result of an event described in
clause (a)(ii) of this Section 1, individuals who at the
beginning of such period constituted the Board of Directors of the
Company (including for this purpose any new director whose election
or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the Board
of Directors of the Company.
(b) “
Corporate Status ” means the status of a person who
provides or provided investment advisory services to the Company
pursuant to the Advisory Agreement in his capacity as an investment
committee member of the Adviser.
(c) “
Disinterested Director ” means a director of the
Company who is not and was not a party to the Proceeding in respect
of which indemnification is sought by Indemnitee.
(d) “
Effective Date ” has the meaning set forth in the
first paragraph of this Agreement.
(e) “
Expenses ” shall include all reasonable and
out-of-pocket attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a
Proceeding.
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(f) “
Independent Counsel ” means a 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 years has been, retained to
represent: (i) the Company or Indemnitee in any matter
material to either such party, or (ii) any other party to or
witness in the Proceeding giving rise to a claim for
indemnification 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
either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. If a Change of
Control has not occurred, Independent Counsel shall be selected by
the Board of Directors of the Company, with the approval of
Indemnitee, which approval will not be unreasonably withheld. If a
Change of Control has occurred, Independent Counsel shall be
selected by Indemnitee, with the approval of the Board of Directors
of the Company, which approval will not be unreasonably
withheld.
(g) “
Proceeding ” includes any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or
investigative (including on appeal), except one pending or
completed on or before the Effective Date, unless otherwise
specifically agreed in writing by the Company and Indemnitee.
Section 2 . Services
by Indemnitee. Indemnitee will provide investment advisory
services to the Company pursuant to the Advisory Agreement in his
capacity as an investment committee member of the Adviser. However,
this Agreement shall not impose any obligation on Indemnitee or the
Company or the Adviser to continue Indemnitee’s service to
the Company or the Adviser beyond any period otherwise required by
law or by other agreements or commitments of the parties, if
any.
Section 3 .
Indemnification—General. The Company shall indemnify, and
advance Expenses to, Indemnitee as provided in this
Agreement.
Section 4 .
Proceedings Other Than Proceedings By Or In The Right Of The
Company. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 4 if, by reason of
his Corporate Status, he is, or is threatened to be, made a party
to or a witness in any threatened, pending, or completed
Proceeding, other than a Proceeding by or in the right of the
Company. Pursuant to this Section 4, Indemnitee shall be
indemnified against all judgments, penalties, fines and amounts
paid in settlement and all Expenses actually and reasonably
incurred by him or on his behalf in connection with a Proceeding by
reason of his Corporate Status unless it is established that
(i) the act or omission of Indemnitee was material to the
matter giving rise to the Proceeding and (a) was committed in
bad faith or (b) was the result of active and deliberate
dishonesty,
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(ii) Indemnitee actually received an improper personal benefit
in money, property or services, or (iii) in the case of any
criminal Proceeding, Indemnitee had reasonable cause to believe
that his conduct was unlawful.
Section 5 .
Proceedings by or in the Right of the Company. Indemnitee shall
be entitled to the rights of indemnification provided in this
Section 5 if, by reason of his Corporate Status, he is, or is
threatened to be, made a party to or a witness in any threatened,
pending or completed Proceeding brought by or in the right of the
Company to procure a judgment in its favor. Pursuant to this
Section 5, Indemnitee shall be indemnified against all amounts
paid in settlement and all Expenses actually and reasonably
incurred by him or on his behalf in connection with such Proceeding
unless it is established that (i) the act or omission of
Indemnitee was material to the matter giving rise to such a
Proceeding and (a) was committed in bad faith or (b) was
the result of active and deliberate dishonesty or
(ii) Indemnitee actually received an improper personal benefit
in money, property or services.
Section 6 .
Court-Ordered Indemnification. Notwithstanding any other
provision of this Agreement, a court of appropriate jurisdiction,
upon application of Indemnitee and such notice as the court shall
require, may order indemnification in the following
circumstances:
(a) if it determines
Indemnitee is entitled to reimbursement under Section 2-418(d)(1)
of the Maryland General Corporation Law (the “ MGCL
”), the court shall order indemnification, in which case
Indemnitee shall be entitled to recover the expenses of securing
such reimbursement; or
(b) if it determines
that Indemnitee is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether
or not Indemnitee (i) has met the standards of conduct set
forth in Section 2-418(b) of the MGCL or (ii) has been
adjudged liable for receipt of an improper personal benefit under
Section 2-418(c) of the MGCL, the court may order such
indemnification as the court shall deem proper. However,
indemnification with respect to any Proceeding by or in the right
of the Company or in which liability shall have been adjudged in
the circumstances described in Section 2-418(c) of the MGCL
shall be limited to Expenses actually and reasonably incurred by
him or on his behalf in connection with a Proceeding.
Section 7 .
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this
Agreement, and without limiting any such provision, to the extent
that Indemnitee is, by reason of his Corporate Status, made a party
to and is successful, on the merits or otherwise, in the defense of
any Proceeding, he shall be indemnified for all Expenses actually
and reasonably incurred by him or on his behalf in connection
therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the
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merits
or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company shall indemnify Indemnitee
under this Section 7 for all Expenses actually and reasonably
incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter, allocated on a
reasonable and proportionate basis. For purposes of this Section
and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
Section 8 . Advance
of Expenses. The Company shall advance all reasonable Expenses
actually and reasonably incurred by or on behalf of Indemnitee in
connection with any Proceeding (other than a Proceeding brought to
enforce indemnification under (i) this Agreement, (ii)
applicable law, (iii) the organizational documents of the
Company, (iv) any agreement or (v) a resolution of
(A) the stockholders entitled to vote generally in the
election of directors or (B) the Board of Directors) of the Company
to which Indemnitee, by reason of his Corporate Status, is, or is
threatened to be, made a party or a witness, within ten days after
the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses
incurred by Indemnitee and shall include or be preceded or
accompanied by a written affirmation by Indemnitee of
Indemnitee’s good faith belief that the standard of conduct
necessary for indemnification by the Company as authorized by law
and by this Agreement has been met and a written undertaking by or
on behalf of Indemnitee, in substantially the form attached hereto
as Exhibit A or in such form as may be required under
applicable law as in effect at the time of the execution thereof,
to reimburse the portion of any Expenses advanced to Indemnitee
relating to claims, issues or matters in the Proceeding as to which
it shall ultimately be established that the standard of conduct has
not been met and which have not been successfully resolved as
described in Section 7. For so long as the Company is subject
to the Investment Company Act, any advancement of Expenses shall be
subject to at least one of the following as a condition of the
advancement: (a) Indemnitee shall provide a security for his
or her undertaking, (b) the Company shall be insured against
losses arising by reason of any lawful advances or (c) a
majority of a quorum of the Disinterested Directors, or Independent
Counsel, in a written opinion, shall determine, based on a review
of readily available facts (as opposed to a full-trial-type
inquiry), that there is no reason to believe that Indemnitee
ultimately will be found to not be entitled to indemnification. To
the extent that Expenses advanced to Indemnitee do not relate to a
specific claim, issue or matter in the Proceeding, such Expenses
shall be allocated on a reasonable and proportionate basis. The
undertaking required by this Section 8 shall be an unlimited
general obligation by or on behalf of Indemnitee and shall be
accepted without reference to
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Indemnitee’s financial ability to repay such advanced
Expenses and without any
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