Exhibit 10.4

 

FORM OF INDEMNIFICATION AGREEMENT FOR

[Director Name]

 

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into this
__ day of ___, by and between Pharos Capital BDC, Inc., a Maryland corporation
(the “Company”), and the undersigned (“Indemnitee”).

 

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

 

WHEREAS, as an inducement to Indemnitee to continue to serve as such director or
officer, 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, except as otherwise expressly provided
for herein; 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, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1. Definitions. For purposes of this Agreement:

 

(a) “Change of Control” shall mean the occurrence of any of the following events
after the Effective Date of this Agreement:

 

(i) the sale or other disposition of all or substantially all of the Company’s
assets; or

 

(ii) the acquisition, whether directly, indirectly, beneficially (within the
meaning of rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) or of record, as a result of a merger, consolidation or
otherwise, of securities of the Company representing twenty percent (20%) or
more of the aggregate voting power of the Company’s then-outstanding common
stock by any “person” (within the meaning of Sections 13(d) and 14(d) of the
Exchange Act), including, but not limited to, any corporation or group of
persons acting in concert, other than (i) the Company or its subsidiaries and/or
(ii) any employee pension benefit plan (within the meaning of Section 3(2) of
the Employee Retirement Income Security Act of 1974) of the Company or its
subsidiaries, including a trust established pursuant to any such plan; or

 

 

 

 

(iii) the individuals who were members of the Company’s Board of Directors (the
“Board”) as of the Effective Date (the “Incumbent Board”) cease to constitute at
least two-thirds (2/3) of the Board; provided, however, that any director
appointed by at least two-thirds (2/3) of the then Incumbent Board or nominated
by at least two-thirds (2/3) of the Nominating and Corporate Governance
Committee of the Board (a majority of the members of the Nominating and
Corporate Governance Committee shall be members of the then Incumbent Board or
appointees thereof), other than any director appointed or nominated in
connection with, or as a result of, a threatened or actual proxy or control
contest, shall be deemed to constitute a member of the Incumbent Board.

 

(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” means the date set forth in the first paragraph of this
Agreement.

 

(e) “Expenses” shall include all reasonable 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 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,
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, which approval will not
be unreasonably withheld.

 

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(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 (i) initiated
by an Indemnitee pursuant to Section 11 of this Agreement to enforce his or her
rights under this Agreement or (ii) 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 and/or an
officer of the Company, as applicable. 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 (i) as provided in this Agreement; and (ii) 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”). Notwithstanding anything to the contrary in this
Section 3 or any other section of this Agreement, for so long as the Company is
subject to the Investment Company Act of 1940, as amended, and the regulations
promulgated thereunder (the “1940 Act”), the Company shall not indemnify or
advance Expenses to Indemnitee to the extent such indemnification or advance
would violate the 1940 Act.

 

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 or her Corporate Status, he or she 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 her or on his or her behalf in
connection with a Proceeding by reason of his or her 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 or her conduct was unlawful.

 

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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 or her Corporate Status, he or she 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
her or on his or her 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. In addition to any other
indemnification that may be provided under this Agreement, and 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, regardless of whether
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.

 

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
or her Corporate Status, made a party to and is successful, on the merits or
otherwise, in the defense of any Proceeding, he or she shall be indemnified for
all Expenses actually and reasonably incurred by him or her or on his or her
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 her or on his or her behalf in connection with
each successfully resolved claim, issue or matter, allocated on a reasonable and
proportionate basis. For purposes of this Section 7 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.

 

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Section 8. Advance of Expenses. The Company shall advance all reasonable
Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding to which Indemnitee 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 the1940 Act, any advancement of Expenses shall
be subject to at least one of the following as a condition of the advancement:
(i) Indemnitee shall provide a security for his or her undertaking, (ii) the
Company shall be insured against losses arising by reason of any lawful advances
or (iii) a majority of a quorum of the Disinterested Directors of the Company,
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 reason to believe that Indemnitee ultimately will be found 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 Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of
such a request for indemnification, advise the Board in writing that Indemnitee
has requested indemnification.

 

(b) Upon written request by Indemnitee for indemnification pursuant to the first
sentence of Section 9(a) hereof, a determination, if required by applicable law,
with respect to Indemnitee’s entitlement thereto shall promptly be made in the
specific case: (i) if a Change of Control shall have occurred, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the
Board (or a duly authorized committee thereof) by a majority vote of a quorum
consisting of Disinterested Directors, or (B) if a quorum of the Board
consisting of Disinterested Directors is not obtainable or, even if obtainable,
such quorum of Disinterested Directors so directs, by Independent Counsel in a
written opinion to the Board, a copy of which shall be delivered to Indemnitee,
or (C) if so directed by a majority of the members of the Board, by the
stockholders of the Company; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten days
after such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses incurred by Indemnitee in so cooperating with the person,
persons or entity making such determination shall be borne by the Company
(irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company shall indemnify and hold Indemnitee harmless
therefrom.

 

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Section 10. Presumptions and Effect of Certain Proceedings.

 

(a) In making a determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with
Section 9(a) of this Agreement, and the Company shall have the burden of proof
to overcome that presumption in connection with the making of any determination
contrary to that presumption.

 

(b) The termination of any Proceeding by judgment, order, settlement,
conviction, a plea of nolo contendere or its equivalent, or an entry of an order
of probation prior to judgment, does not create a presumption that Indemnitee
did not meet the requisite standard of conduct described herein for
indemnification.

 

Section 11. Remedies of Indemnitee.

 

(a) If (i) a determination is made pursuant to Section 9 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advance
of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no
determination of entitlement to indemnification shall have been made pursuant to
Section 9(b) of this Agreement within 30 days after receipt by the Company of
the request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 7 of this Agreement within ten days after receipt by the
Company of a written request therefor, or (v) payment of indemnification is not
made within ten days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Maryland, or in any other court of
competent jurisdiction, of his or her entitlement to such indemnification or
advance of Expenses. Alternatively, Indemnitee, at his or her option, may seek
an award in arbitration to be conducted by a single arbitrator pursuant to the
commercial Arbitration Rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 11(a); provided,
however, that the foregoing clause shall not apply to a proceeding brought by
Indemnitee to enforce his or her rights under Section 7 of this Agreement.

 

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(b) In any judicial proceeding or arbitration commenced pursuant to this Section
11 the Company shall have the burden of proving that Indemnitee is not entitled
to indemnification or advance of Expenses, as the case may be.

 

(c) If a determination shall have been made pursuant to Section 9(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 11, absent a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s statement
not materially misleading, in connection with the request for indemnification.

 

(d) In the event that Indemnitee, pursuant to this Section 11, seeks a judicial
adjudication of or an award in arbitration to enforce his or her rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
for, any and all Expenses actually and reasonably incurred by him or her in such
judicial adjudication or arbitration. If it shall be determined in such judicial
adjudication or arbitration that Indemnitee is entitled to receive part but not
all of the indemnification or advance of Expenses sought, the Expenses incurred
by Indemnitee in connection with such judicial adjudication or arbitration shall
be appropriately prorated.

 

Section 12. Defense of the Underlying Proceeding.

 

(a) Indemnitee shall notify the Company promptly upon being served with or
receiving any summons, citation, subpoena, complaint, indictment, information,
notice, request or other document relating to any Proceeding which may result in
the right to indemnification or the advance of Expenses hereunder; provided,
however, that the failure to give any such notice shall not disqualify
Indemnitee from the right, or otherwise affect in any manner any right of
Indemnitee, to indemnification or the advance of Expenses under this Agreement
unless the Company’s ability to defend in such Proceeding or to obtain proceeds
under any insurance policy is materially and adversely prejudiced thereby, and
then only to the extent the Company is thereby actually so prejudiced.

 

(b) Subject to the provisions of the last sentence of this Section 12(b) and of
Section 12(c) below, the Company shall have the right to defend Indemnitee in
any Proceeding which may give rise to indemnification hereunder; provided,
however, that the Company shall notify Indemnitee of any such decision to defend
within 15 calendar days following receipt of notice of any such Proceeding under
Section 12(a) above. The Company shall not, without the prior written consent of
Indemnitee, which shall not be unreasonably withheld or delayed, consent to the
entry of any judgment against Indemnitee or enter into any settlement or
compromise which (i) includes an admission of fault of Indemnitee or (ii) does
not include, as an unconditional term thereof, the full release of Indemnitee
from all liability in respect of such Proceeding, which release shall be in form
and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall
not apply to a Proceeding brought by Indemnitee under Section 11 above or
Section 18 below.

 

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(c) Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to
which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i)
Indemnitee reasonably concludes, based upon an opinion of counsel approved by
the Company, which approval shall not be unreasonably withheld, that he or she
may have separate defenses or counterclaims to assert with respect to any issue
which may not be consistent with other defendants in such Proceeding, (ii)
Indemnitee reasonably concludes, based upon an opinion of counsel approved by
the Company, which approval shall not be unreasonably withheld, that an actual
or apparent conflict of interest or potential conflict of interest exists
between Indemnitee and the Company, or (iii) if the Company fails to assume the
defense of such Proceeding in a timely manner, Indemnitee shall be entitled to
be represented by separate legal counsel of Indemnitee’s choice, subject to the
prior approval of the Company, which shall not be unreasonably withheld, at the
expense of the Company. In addition, if the Company fails to comply with any of
its obligations under this Agreement or in the event that the Company or any
other person takes any action to declare this Agreement void or unenforceable,
or institutes any Proceeding to deny or to recover from Indemnitee the benefits
intended to be provided to Indemnitee hereunder, Indemnitee shall have the right
to retain counsel of Indemnitee’s choice, subject to the prior approval of the
Company, which shall not be unreasonably withheld, at the expense of the Company
(subject to Section 11(d)), to represent Indemnitee in connection with any such
matter.

 

Section 13. Non-Exclusivity; Survival of Rights; Subrogation; Insurance; 1940
Act.

 

(a) The rights of indemnification and advance of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Articles of Amendment and
Restatement of the Company (as amended from time to time, the “Charter”) or the
Bylaws of the Company (as amended from time to time, the “Bylaws”), any
agreement or a resolution of the stockholders entitled to vote generally in the
election of directors or of the Board, or otherwise. No amendment, alteration or
repeal of this Agreement or of any provision hereof shall limit or restrict any
right of Indemnitee under this Agreement in respect of any action taken or
omitted by such Indemnitee in his or her Corporate Status prior to such
amendment, alteration or repeal.

 

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

 

(c) The Company shall not be liable under this Agreement to make any payment of
amounts otherwise indemnifiable or payable or reimbursable as expenses hereunder
if and to the extent that (i) Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise, or (ii)
for so long as the Company is subject to the 1940 Act, indemnification or
payment or reimbursement of expenses would not be permissible under the 1940
Act.

 

Section 14. Insurance. The Company will use its reasonable best efforts to
acquire directors and officers liability insurance, on terms and conditions
deemed appropriate by the Board of the Company, with the advice of counsel,
covering Indemnitee or any claim made against Indemnitee for service as a
director or officer of the Company and covering the Company for any
indemnification or advance of Expenses made by the Company to Indemnitee for any
claims made against Indemnitee for service as a director or officer of the
Company. Without in any way limiting any other obligation under this Agreement,
the Company shall indemnify Indemnitee for any payment by Indemnitee arising out
of the amount of any deductible or retention and the amount of any excess of the
aggregate of all judgments, penalties, fines, settlements and reasonable
Expenses incurred by Indemnitee in connection with a Proceeding over the
coverage of any insurance referred to in the previous sentence.

 

Section 15. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
or her Corporate Status, a witness in any Proceeding, whether instituted by the
Company or any other party, and to which Indemnitee is not a party, he or she
shall be advanced all reasonable Expenses and indemnified against all Expenses
actually and reasonably incurred by him or her or on his or her behalf in
connection therewith.

 

Section 16. Duration of Agreement; Binding Effect.

 

(a) This Agreement shall continue until and terminate ten years after the date
that Indemnitee’s Corporate Status shall have ceased; provided, that the rights
of Indemnitee hereunder shall continue until the final termination of any
Proceeding then pending in respect of which Indemnitee is granted rights of
indemnification or advance of Expenses hereunder and of any proceeding commenced
by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

 

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(b) The indemnification and advance of Expenses provided by, or granted pursuant
to, this Agreement shall be binding upon and be enforceable by the parties
hereto and their respective successors and assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), shall continue as
to an Indemnitee who has ceased to be 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 which such person is or was
serving at the written request of the Company, and shall inure to the benefit of
Indemnitee and his or her spouse, assigns, heirs, devisees, executors and
administrators and other legal representatives.

 

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

 

Section 17. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever: (i)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable that is not itself invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
thereby.

 

Section 18. Exception to Right of Indemnification or Advance of Expenses.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advance of Expenses under this Agreement with
respect to any Proceeding brought by Indemnitee, unless (i) the Proceeding is
brought to enforce indemnification under this Agreement or otherwise or (ii) the
Company’s Bylaws, the Charter, a resolution of the stockholders entitled to vote
generally in the election of directors or of the Board or an agreement approved
by the Board to which the Company is a party expressly provide otherwise. In
addition, notwithstanding any other provision of this Agreement, Indemnitee
shall not be entitled to indemnification or advance of Expenses under this
Agreement to the extent such indemnification or advance of Expenses would
conflict with any provision of the Company’s Bylaws or the Charter, in each case
without giving effect to any non-exclusivity provision set forth in the Charter;
provided, that the foregoing restriction not apply and shall be of no force or
effect if and to the extent the Company’s common stock is qualified as a
“covered security,” as such term is defined in Section 18 of the Securities Act
of 1933, as amended.

 

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Section 19. Identical Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
One such counterpart signed by the party against whom enforceability is sought
shall be sufficient to evidence the existence of this Agreement.

 

Section 20. Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

 

Section 21. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

 

Section 22. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:

 

(a) If to Indemnitee, to: the address set forth on the signature page hereto.

 

(b) If to the Company, to:

 

Pharos Capital BDC, Inc.

3889 Maple Avenue, Suite 400

Dallas, TX 75219

 

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

 

Section 23. Governing Law. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with (i) the laws of the
State of Maryland applicable to contracts formed and to be performed entirely
within the State of Maryland, without regard to its conflicts of laws rules, to
the extent such rules would require or permit the application of the laws of
another jurisdiction, and (ii) the 1940 Act. To the extent the applicable laws
of the State of Maryland or any applicable provision of this Agreement shall
conflict with the applicable provisions of the 1940 Act, the latter shall
control.

 

Section 24. Miscellaneous. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.

 

ATTEST:     PHAROS CAPITAL BDC, INC.                                     By:
               (SEAL)         Name:  Kneeland Youngblood       Title: President
and Chief Executive Officer               WITNESS:     INDEMNITEE              
                    Name:  [   ]       Title: Director                  
Address: 3889 Maple Avenue, Suite
400, Dallas, TX 75219

 

 

 

 

 

 

 

[Director Indemnification Agreement]

 

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EXHIBIT A

 

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED

 

The Board of Directors of Pharos Capital BDC, Inc.

 

Re: Undertaking to Repay Expenses Advanced

 

Ladies and Gentlemen:

 

This undertaking is being provided pursuant to that certain Indemnification
Agreement (the “Indemnification Agreement”) dated the ___day of _______________,
20___, by and between Pharos Capital BDC, Inc. (the “Company”) and the
undersigned Indemnitee (“Indemnitee”), pursuant to which I am entitled to
advance of expenses in connection with [Description of Proceeding] (the
“Proceeding”).

 

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

 

I am subject to the Proceeding by reason of my Corporate Status or by reason of
alleged actions or omissions by me in such capacity. I hereby affirm that at all
times, insofar as I was involved as an officer or director of the Company, in
any of the facts or events giving rise to the Proceeding, I (1) acted in good
faith and honestly, (2) did not receive any improper personal benefit in money,
property or services and (3) in the case of any criminal proceeding, had no
reasonable cause to believe that any act or omission by me was unlawful.

 

In consideration of the advance of Expenses by the Company for reasonable
attorneys’ fees and related expenses incurred by me in connection with the
Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with
the Proceeding, it is established that (1) an act or omission by me 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 or (2) I actually
received an improper personal benefit in money, property or services or (3) in
the case of any criminal proceeding, I had reasonable cause to believe that the
act or omission was unlawful, then I shall promptly reimburse the portion of the
Advanced Expenses relating to the claims, issues or matters in the Proceeding as
to which the foregoing findings have been established and which have not been
successfully resolved as described in Section 7 of the Indemnification
Agreement. To the extent that Advanced Expenses do not relate to a specific
claim, issue or matter in the Proceeding, I agree that such Expenses shall be
allocated on a reasonable and proportionate basis.

 

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this
___day of ______________, 20___.

 

WITNESS:                          (SEAL)  

 

 

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