INDEMNIFICATION
AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (“ Agreement ”) is
made and entered into this 15th day of October, 2008 (the “
Effective Date ”), by and between GSC Investment
Corp., a Maryland Corporation (the “ Company ”),
and Seth M. Katzenstein (“ Indemnitee
”).
WHEREAS,
Indemnitee currently serves as a director of the Company;
and
WHEREAS,
Indemnitee may be subjected to claims, suits or proceedings arising
as a result of his service as a director of the Company;
and
WHEREAS, as an
inducement to Indemnitee to continue to serve as a director of the
Company, 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 is
or was a director, trustee, officer, employee or agent of the
Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise for which such
person is or was serving at the request of the Company.
(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.
(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,
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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 serve as a director of the Company. However, this Agreement
shall not impose any obligation on Indemnitee or the Company, to
continue Indemnitee’s service to the Company, 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
(a) as provided in this Agreement and (b) otherwise to
the fullest extent permitted by Maryland law in effect on the date
hereof and as amended from time to time; provided, however, that no
change in Maryland law shall have the effect of reducing the
benefits available to Indemnitee hereunder based on Maryland law as
in effect on the date hereof. The rights of Indemnitee provided in
this Section 3 shall include, without limitation, the rights
set forth in the other sections of this Agreement, including any
additional indemnification permitted by Section 2-418(g) of
the Maryland General Corporation Law (“ MGCL
”).
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, (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
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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 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
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
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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 Indemnitee’s financial ability
to repay such advanced Expenses and without any requirement to post
security therefor.
Section 9 . Procedure for Determination of
Entitlement to Indemnification.
(a) To obtain
indemnification under this Agreement, Indemnitee shall submit to
the Company a written request, including therein or therewith such
documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnite
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