Document:

EX-10.2

 

Exhibit 10.2

CUSTODIAN AGREEMENT

By and between

GSC INVESTMENT LLC,

and

U.S. BANK NATIONAL ASSOCIATION

Dated as of March 21, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	1.	 	DEFINITIONS
	 	 	1	 
	2.	 	APPOINTMENT OF CUSTODIAN AND DESIGNATION OF ACCOUNTS
	 	 	4	 
	3.	 	DUTIES OF THE CUSTODIAN
	 	 	5	 
	4.	 	REPORTING
	 	 	12	 
	5.	 	COMPENSATION OF CUSTODIAN
	 	 	13	 
	6.	 	APPOINTMENT OF AGENTS
	 	 	13	 
	7.	 	DEPOSIT IN U.S. SECURITIES SYSTEMS
	 	 	13	 
	8.	 	SECURITIES HELD OUTSIDE OF THE UNITED STATES
	 	 	14	 
	9.	 	RESPONSIBILITY OF CUSTODIAN
	 	 	17	 
	10.	 	SECURITY CODES
	 	 	21	 
	11.	 	TAX LAW
	 	 	21	 
	12.	 	EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
	 	 	22	 
	13.	 	REPRESENTATIONS AND WARRANTIES
	 	 	23	 
	14.	 	PARTIES IN INTEREST; NO THIRD PARTY BENEFIT
	 	 	23	 
	15.	 	NOTICES
	 	 	24	 
	16.	 	CHOICE OF LAW AND JURISDICTION
	 	 	24	 
	17.	 	ENTIRE AGREEMENT AND COUNTERPARTS
	 	 	24	 
	18.	 	AMENDMENT; WAIVER
	 	 	24	 
	19.	 	SUCCESSOR AND ASSIGNS
	 	 	25	 
	20.	 	SEVERABILITY
	 	 	25	 
	21.	 	INSTRUMENT UNDER SEAL; HEADINGS
	 	 	25	 
	22.	 	REQUEST FOR INSTRUCTIONS
	 	 	26	 
	23.	 	OTHER BUSINESS
	 	 	26	 
	24.	 	REPRODUCTION OF DOCUMENTS
	 	 	26	 
	25.	 	SHAREHOLDER COMMUNICATIONS
	 	 	26	 

 

 

     THIS CUSTODIAN AGREEMENT (this “Agreement”) is dated as of March 20, 2007 and is entered
into by and among GSC INVESTMENT LLC, a Maryland limited liability company (the “Company”), having
a business address at 12 East 49th Street, Suite 3200, New York, NY 10017, and U.S. BANK
NATIONAL ASSOCIATION, a national banking association (the “Custodian”), having a place of business
at 214 N. Tryon Street, 12th Floor, Charlotte, NC 28202.

     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, the Company desires to engage the Custodian to act as custodian for the Company with
respect to the Company’s acquisition of certain investments to be made by the Company, subject to
the terms of this Agreement; and

     WHEREAS, the Custodian is willing to act in such capacity as custodian under and subject to
the terms of this Agreement;

     NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:

1. DEFINITIONS

     1.1 The following words have these meanings as used in this Agreement:

“Account” or “Accounts” shall mean, collectively the Cash Account and the Securities Account.

“Authorized Person” shall have the meaning assigned in Section 3.10(a).

“Business Day” means a day on which the Custodian or the relevant sub-custodian, including a
Foreign Sub-custodian, is open for business in the market or country in which a transaction is
to take place.

“Cash Account” shall have the meaning set forth in Section 2.2(b).

“Company” shall mean both GSC Investment LLC, prior to the closing of the merger transaction
with and into GSC Investment Corp., and GSC Investment Corp., on and after such closing.

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“Delivery Date” means such date or dates on which Securities may be delivered to the Custodian
(including the relevant sub-custodian) from time to time pursuant to the terms of this
Agreement (it being hereby expressly acknowledged that there will be more than one Delivery
Date).

“Eligible Investments” means any investment that at the time of its acquisition is one or more
of the following:

	 	(a)	 	United States government and agency obligations;
	 
	 	(b)	 	commercial paper having a rating assigned to such commercial paper by
Standard & Poor’s Rating Services or Moody’s Investor Service, Inc. (or, if neither
such organization shall rate such commercial paper at such time, by any nationally
recognized rating organization in the United States of America) equal to one of the
two highest ratings assigned by such organization, it being understood that as of the
date hereof such ratings by Standard & Poor’s Rating Services are “AAAm” and “Aam”
and such ratings by Moody’s Investor Service, Inc. are “Aaa” and “Aa”;
	 
	 	(c)	 	interest bearing deposits in United States dollars in United States or
Canadian banks with an unrestricted surplus of at least U.S. $250,000,000, maturing
within one year; and
	 
	 	(d)	 	money market funds (including funds of the Custodian or its affiliates) or
United States government securities funds designed to maintain a fixed share price
and high liquidity.

“Eligible Securities Depository” has the meaning set forth in Section (b)(1) of Rule 17f-7
under the Investment Company Act.

“Federal Reserve Bank Book-Entry System” means a depository and securities transfer system
operated by the Federal Reserve Bank of the United States on which are eligible to be held all
United States Government direct obligation bills, notes and bonds.

“Foreign Intermediary” means a Foreign Sub-custodian and Eligible Securities Depository.

“Foreign Sub-custodian” means and includes (i) any branch of a “U.S. Bank,” as that term is
defined in Rule 17f-5 under the Investment Company Act, (ii) any “Eligible Foreign Custodian,”
as that term is defined in Rule 17f-5 under the Investment Company Act, having a contract with
the Custodian which the Custodian has determined will provide reasonable care of assets of the
Company based on the standards specified in Section 8.7 below.

“Foreign Securities” means Securities for which the primary market is outside the United
States.

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“Investment Company Act” means the Investment Company Act of 1940, as amended.

“Person” means any individual, corporation, partnership, limited liability company, joint
venture, association, joint stock company, trust (including any beneficiary thereof)
unincorporated organization, or any government or agency or political subdivision thereof.

“Proceeds” means, collectively, (i) all distributions, earnings, dividends and other payments
paid on the Securities by or on behalf of the issuer or obligor thereof, or applicable paying
agent, and received by the Custodian during the term hereof, and (ii) the net proceeds of the
sale or other disposition of the Securities pursuant to the terms of this Agreement and
received by the Custodian during the term hereof (and any Reinvestment Earnings from investment
of the foregoing, as defined in Section 3.4(b) hereof).

“Proper Instructions” means instructions received by the Custodian from an Authorized Person
acting on behalf of the Company, including, but not limited to, the Company’s investment
adviser, GSCP (NJ), L.P. (the “Manager”), in any of the following forms acceptable to the
Custodian:

	 	(a)	 	in writing signed by the Authorized Person; or
	 
	 	(b)	 	in a communication utilizing access codes effected between
electro-mechanical or electronic devices; or
	 
	 	(c)	 	such other means as may be agreed upon from time to time by the Custodian
and the party giving such instructions, including oral instructions.

“Securities” means, collectively, the (i) investments acquired by the Company and delivered to
the Custodian by the Company from time to time during the term of, and pursuant to the terms
of, this Agreement, and (ii) all dividends in kind (e.g., non-cash dividends) from the
investments described in clause (i).

“Securities Account” shall have the meaning set forth in Section 2.2(a).

“Securities System” means the Federal Reserve Book Entry System, a clearing agency which acts
as a securities depository, or another book entry system for the central handling of securities
(including an Eligible Securities Depository).

“Street Delivery Custom” means a custom of the United States securities market to deliver
securities which are being sold to the buying broker for examination to determine that the
securities are in proper form.

“Street Name” means the form of registration in which the securities are held by a broker who
is delivering the securities to another broker for the purposes of sale, it being an accepted
custom in the United States securities industry that a security in Street Name is in

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proper form for delivery to a buyer and that a security may be reregistered by a buyer in the ordinary
course.

	 	1.2	 	In this Agreement unless the contrary intention appears:

	 	(a)	 	a reference to this Agreement or another instrument refers to such
agreement or instrument as the same may be amended, modified or otherwise rewritten
from time to time;
	 
	 	(b)	 	a reference to a statute, ordinance, code or other law includes regulations
and other instruments under it and consolidations, amendments, re-enactments or
replacements of any of them;
	 
	 	(c)	 	the singular includes the plural and vice versa;
	 
	 	(d)	 	a reference to a Person includes a reference to the Person’s executors,
administrators, successors and permitted assigns;
	 
	 	(e)	 	an agreement, representation or warranty in favor of two or more Persons is
for the benefit of them jointly and severally;
	 
	 	(f)	 	an agreement, representation or warranty on the part of two or more Persons
binds them jointly and severally;
	 
	 	(g)	 	a reference to any accounting term is to be interpreted in accordance with
generally accepted principles and practices in the United States, consistently
applied, unless otherwise instructed by the Company or the Manager; and
	 
	 	(h)	 	the term “include” or “including” shall mean without limitation by reason
of enumeration.

	 	1.3	 	Headings are inserted for convenience and do not affect the interpretation of this
Agreement.

2. APPOINTMENT OF CUSTODIAN AND DESIGNATION OF ACCOUNTS

	 	2.1	 	Appointment of Custodian

	 	(a)	 	The Company hereby appoints the Custodian as the custodian of the
Securities and Proceeds received by it pursuant to this Agreement, and in such
capacity appoints the Custodian to act as custodial agent on behalf of the Company
with respect thereto. All Securities and Proceeds delivered to the Custodian, its
agents or its sub-custodians shall be held and dealt with in accordance with this
Agreement. The Custodian shall not be responsible for any property held or received
by the Company, the Manager or any other Person and not delivered to the Custodian
(its

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	 	 	 	agents or its sub-custodians) pursuant to the terms of this Agreement. At the
time of each delivery of Securities to the Custodian (or any sub-custodian) by or on
behalf of the Company, the Company agrees that it shall, or it shall direct the
Manager to, expressly identify the same to the Custodian as Securities being
delivered under this Agreement.
	 
	 	(b)	 	The Custodian accepts its appointment as custodian hereunder, and agrees to
receive and hold, as custodian for the Company pursuant to the terms of this
Agreement, the Securities delivered and identified to it by the Company on each
Delivery Date and any Proceeds received from time to time therefrom.

	 	2.2	 	Establishment of Accounts

	 	(a)	 	There shall be established at the Custodian a securities account to which
the Custodian shall deposit and hold the Securities received by it (and any Proceeds
received by it from time to time in the form of dividends in kind) pursuant to this
Agreement, which account shall be designated the “GSC Investment Securities Custody
Account” (the “Securities Account”).
	 
	 	(b)	 	There shall be established at the Custodian a deposit account to which the
Custodian shall deposit and hold any cash Proceeds received by it from time to time
from or with respect to the Securities, which deposit account shall be designated the
“GSC Investment Cash Proceeds Account” (the “Cash Account”).
	 
	 	(c)	 	Securities held in the Securities Account may be withdrawn by the Company
from time to time pursuant to Section 3.2 below. Amounts held in the Cash Account
from time to time may be withdrawn by the Company or the Manager on the Company’s
behalf, upon receipt of Proper Instructions therefor, and may be invested upon and
pursuant to specific direction of the Company, acting through the Manager, in the
form of Proper Instruction, pursuant to Section 3.5 below.

3. DUTIES OF THE CUSTODIAN

	 	3.1	 	Holding Securities

     The Custodian shall hold and segregate, or direct its agents or its sub-custodians to hold and
segregate, for the account of the Company all Securities received by it pursuant to this Agreement
other than Securities which are held in a Securities System, or which are maintained in one or more
omnibus accounts at the Custodian, its agents or sub-custodians, and shall properly account for all
Securities held in a Securities System or maintained through one or more omnibus accounts and
identify the same on its books and records as held for the account of the Company.

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	 	3.2	 	Delivery of Securities

	 	(a)	 	Delivery of Securities to the Custodian shall be in Street Name or other
good delivery form.
	 
	 	(b)	 	The Custodian shall release and deliver, or direct its agents or
sub-custodians to release and deliver, as the case may be, Securities of the Company
held by the Custodian, its agents or its sub-custodians from time to time upon
receipt of Proper Instructions (which shall, among other things specify the
Securities to be released,
with such delivery and other information as may be necessary to enable the Custodian
to perform), which may be standing instructions (in form acceptable to the Custodian)
in the following cases:

	 	(i)	 	upon sale of such Securities by or on behalf of the Company and,
unless otherwise directed by Proper Instructions:

	 	(A)	 	in accordance with the customary or established
practices and procedures in the jurisdiction or market where the
transactions occur, including delivery to the purchaser thereof or to a
dealer therefor (or an agent of such purchaser or dealer) against
expectation of receiving later payment; or
	 
	 	(B)	 	in the case of a sale effected through a
Securities System, in accordance with the rules governing the
operations of the securities System;

	 	(ii)	 	upon the receipt of payment in connection with any repurchase
agreement related to such securities;
	 
	 	(iii)	 	to the depositary agent in connection with tender or other similar
offers for securities;
	 
	 	(iv)	 	to the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable (unless otherwise directed by
Proper Instructions, the cash or other consideration is to be delivered to the
Custodian, its agents or its sub-custodians);
	 
	 	(v)	 	to an issuer thereof, or its agent, for transfer into the name of
the Custodian or of any nominee of the Custodian or into the name of any of its
agents or sub-custodians or their nominees or for exchange for a different number
of bonds, certificates or other evidence representing the same aggregate face
amount or number of units;
	 
	 	(vi)	 	to brokers clearing banks or other clearing agents for examination
in accordance with the Street Delivery Custom;

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	 	(vii)	 	for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the securities
of the issuer of such securities, or pursuant to any deposit agreement (unless
otherwise directed by Proper Instructions, the new securities and cash, if any,
are to be delivered to the Custodian, its agents or its sub-custodians);
	 
	 	(viii)	 	in the case of warrants, rights or similar securities, the surrender thereof in
the exercise of such warrants, rights or similar securities or the surrender of
interim receipts or temporary securities for definitive securities (unless
otherwise directed by Proper Instructions, the new securities and cash, if
any, are to be delivered to the Custodian, its agents or its
sub-custodians); and/or
	 
	 	(ix)	 	for any other purpose, but only upon receipt of Proper Instructions
specifying the Securities to be delivered and naming the Person or Persons to
whom delivery of such Securities shall be made.

	 	3.3	 	Registration of Securities

     Securities held by the Custodian, its agents or its sub-custodians (other than bearer
securities or securities held in a Securities System) shall be registered in the name of the
Company or its nominee; or, at the option of the Custodian, in the name of the Custodian or in the
name of any nominee of the Custodian, or in the name of its agents or its sub-custodians or their
nominees; or if directed by the Company by Proper Instruction, may be maintained in Street Name.
The Custodian, its agents and its sub-custodians shall not be obliged to accept securities on
behalf of the Company under the terms of this Agreement unless such Securities are in Street Name
or other good deliverable form.

	 	3.4	 	Bank Accounts, and Management of Cash

	 	(a)	 	Cash Proceeds from the Securities received by the Custodian from time to
time shall be credited to the Cash Account. All amounts credited to the Cash Account
shall be subject to clearance and receipt of final payment by the Custodian.
	 
	 	(b)	 	Amounts held in the Cash Account from time to time may be invested in
Eligible Investments pursuant to specific written Proper Instructions (which may be
standing instructions) received by the Custodian from an Authorized Person acting on
behalf of the Company. Such investments shall be subject to availability and the
Custodian’s then applicable transaction charges (which shall be at the Company’s
expense). The Custodian shall have no liability for any loss incurred on any such
investment. Absent receipt of such written instruction from the Company, the
Custodian shall have no obligation to invest (or otherwise pay interest on) amounts
on deposit in the Cash Account. In no instance will the Custodian have any obligation
to provide investment advice to the Company. Any earnings from such

7

 

	 	 	 	investment of
amounts held in the Cash Account from time to time (collectively, “Reinvestment
Earnings”) shall be redeposited in the Cash Account (and may be reinvested at the
written direction of the Company or the Manager).
	 
	 	(c)	 	In the event that the Company shall at any time request a withdrawal of
amounts from the Cash Account, the Custodian shall be entitled to liquidate, and
shall have no liability for any loss incurred as a result of the liquidation of, any
investment of the funds credited to such account as needed to provide necessary
liquidity. Investment instructions may be in the form of standing instructions (in
form Proper Instructions in form acceptable to Custodian).
	 
	 	(d)	 	The Company acknowledges that cash deposited or invested with any bank
(including the bank acting as Custodian) may generate a margin or banking income for
which such bank shall not be required to account to the Company.

	 	3.5	 	Foreign Exchange

	 	(a)	 	Upon the receipt of Proper Instructions, the Custodian, its agents or its
sub-custodians may (but shall not be obligated to) enter into all types of contracts
for foreign exchange on behalf of the Company, upon terms acceptable to the Custodian
and the Company (in each case at the Company’s expense), including transactions
entered into with the Custodian, its sub-custodians or any affiliates of the
Custodian or the sub-custodian. The Custodian shall have no liability for any losses
incurred in or resulting from the rates obtained in such foreign exchange
transactions; and absent specific and acceptable Proper Instructions, the Custodian
shall not be deemed to have any duty to carry out any foreign exchange on behalf of
the Company. The Custodian shall be entitled at all times to comply with any legal or
regulatory requirements applicable to currency or foreign exchange transactions.
	 
	 	(b)	 	The Company acknowledges that the Custodian, any sub-custodian or any
affiliates of the Custodian or any sub-custodian, involved in any such foreign
exchange transactions may make a margin or banking income from foreign exchange
transactions entered into pursuant to this section for which they shall not be
required to account to the Company.

	 	3.6	 	Collection of Income

     The Custodian, its agents or its sub-custodians shall use reasonable efforts to collect on a
timely basis all income and other payments with respect to the Securities held hereunder to which
the Company shall be entitled, to the extent consistent with usual custom in the securities
custodian business in the United States. Such efforts shall include collection of interest income,
dividends and other payments with respect to registered domestic securities if on the record date
with respect to the date of payment by the issuer the Security is registered in the name of the

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Custodian or its nominee (or in the name of its agent or sub-custodian, or their nominee); and
interest income, dividends and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer such securities are held by the Custodian or its sub-custodian or
agent; provided, however, that in the case of Securities held in Street Name, the Custodian shall
use commercially reasonable efforts only to timely collect income. In no event shall the
Custodian’s agreement herein to collect income be construed to obligate the Custodian to commence,
undertake or prosecute any legal proceedings.

	 	3.7	 	Payment of Moneys

	 	(a)	 	Upon receipt of Proper Instructions, which may be standing instructions,
the Custodian shall pay out from the Cash Account (or remit to its agents or its sub-
custodians, and direct them to pay out) moneys of the Company on deposit therein in
the following cases:

	 	(i)	 	upon the purchase of Securities for the Company pursuant to such
Proper Instruction; and such purchase may, unless and except to the extent
otherwise directed by Proper Instructions, be carried out by the Custodian;

	 	(A)	 	in accordance with the customary or established
practices and procedures in the jurisdiction or market where the
transactions occur, including delivering money to the seller thereof or
to a dealer therefor (or any agent for such seller or dealer) against
expectation of receiving later delivery of such securities; or
	 
	 	(B)	 	in the case of a purchase effected through a
Securities System, in accordance with the rules governing the operation
of such Securities System;

	 	(ii)	 	for the purchase or sale of foreign exchange or foreign exchange
agreements for the accounts of the Company, including transactions executed with
or through the Custodian, its agents or its sub-custodians, as contemplated by
Section 3.6 above; and
	 
	 	(iii)	 	for any other purpose directed by the Company, but only upon
receipt of Proper Instructions specifying the amount of such payment, and naming
the Person or Persons to whom such payment is to be made.

	 	(b)	 	At any time or times, the Custodian shall be entitled to pay (i) itself
from the Cash Account, whether or not in receipt of express direction or instruction
from the Company, any amounts due and payable to it pursuant to Section 5 hereof, and
(ii) as otherwise permitted by Section 3.11, 9.4 or Section 9.7 below, provided,
however, that in each case all such payments shall be accounted for to the Company.

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	 	3.8	 	Proxies

     The Custodian will, with respect to the Securities held hereunder, use reasonable efforts to
cause to be promptly executed by the registered holder of such Securities proxies received by the
Custodian from its agents or its sub-custodians or from issuers of the Securities being held for
the Company, without indication of the manner in which such proxies are to be voted, and upon
receipt of Proper Instructions shall promptly deliver such proxies, proxy soliciting materials and
notices relating to such Securities. In the absence of such Proper Instructions, or in the event
that such Proper Instructions are not received in a timely fashion, the Custodian shall be under no
duty to act with regard to such proxies.

	 	3.9	 	Communications Relating to Securities

     The Custodian shall transmit promptly to the Manager all written information (including
pendency of calls and maturities of Securities and expirations of rights in connection therewith)
received by the Custodian, from its agents or its sub-custodians or from issuers of the Securities
being held for the Company. The Custodian shall have no obligation or duty to exercise any right or
power, or otherwise to preserve rights, in or under any Securities unless and except to the extent
it has received timely Proper Instruction from the Manager in accordance with the next sentence.
The Custodian will not be liable for any untimely exercise of any right or power in connection with
Securities at any time held by the Custodian, its agents or sub-custodians unless

	 	(i)	 	the Custodian has received Proper Instructions with regard to the
exercise of any such right or power; and
	 
	 	(ii)	 	the Custodian, or its agents or sub-custodians are in actual
possession of such Securities,

in each case, at least three (3) Business Days prior to the date on which such right or power is to
be exercised. It will be the responsibility of the Manager to notify the Custodian of the Person to
whom such communications must be forwarded under this Section.

	 	3.10	 	Proper Instructions

	 	(a)	 	The Company will give a notice to the Custodian, in the form acceptable to
it, specifying the names and specimen signatures of Persons authorized to give Proper
Instructions (collectively, “Authorized Persons”) which notice shall be initially
signed by Richard T. Allorto, Jr. and subsequently signed by any Authorized Person
previously certified to the Custodian. The Custodian shall be entitled to rely upon
the identity and authority of such persons until it receives written notice from the
Company to the contrary.
	 
	 	(b)	 	The Custodian shall have no responsibility or liability to the Company (or
any other person or entity), and shall be indemnified and held harmless by the
Company in the event that a subsequent written confirmation of an oral instruction
fails to

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	 	 	 	conform to the oral instructions received by the Custodian. The Custodian
shall have no obligation to act in accordance with purported instructions to the
extent that they conflict with applicable law or regulations, local market practice
or the Custodian’s operating policies and practices. The Custodian shall not be
liable for any loss resulting from a delay while it obtains clarification of any
Proper Instructions.

	 	3.11	 	Actions Permitted without Express Authority

     The Custodian may, at its discretion, without express authority from the Company:

	 	(a)	 	make payments to itself as described in or pursuant to Section 3.7(b), or
to make payments to itself or others for minor expenses of handling securities or
other similar items relating to its duties under this agreement, provided that all
such payments shall be accounted for to the Company;
	 
	 	(b)	 	surrender Securities in temporary form for Securities in definitive form;
	 
	 	(c)	 	endorse for collection cheques, drafts and other negotiable instruments;
and
	 
	 	(d)	 	in general attend to all nondiscretionary details in connection with the
sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Company.

	 	3.12	 	Evidence of Authority

     The Custodian shall be protected in acting upon any instructions, notice, request, consent,
certificate instrument or paper reasonably believed by it to be genuine and to have been properly
executed or otherwise given by or on behalf of the Company by an Authorized Person. The Custodian
may receive and accept a certificate signed by any Authorized Person as conclusive evidence of:

	 	(a)	 	the authority of any person to act in accordance with such certificate; or
	 
	 	(b)	 	any determination or of any action by the Company as described in such
certificate,

     and such certificate may be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary from an Authorized Person of the Company.

	 	3.13	 	Receipt of Communications

     Any communication received by the Custodian on a day which is not a Business Day or after 2:00
p.m. (or such other time as is agreed by the Company and the Custodian from time to time) on a
Business Day will be deemed to have been received on the next Business Day (but in the case of
communications so received after 2:00 p.m. on a Business Day, the Custodian will

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use commercially
reasonable efforts to process such communications as soon as possible after receipt).

	 	3.14	 	Records

     The Custodian shall create and maintain complete and accurate records relating to its
activities under this Agreement with respect to the Securities, cash or other property held for the
Company, with particular attention to Section 31 of the Investment Company Act, and Rules 31a-1 and
32a-2 thereunder. To the extent that the Custodian, in its sole opinion, is able to do so, the
Custodian shall provide assistance to the Company (at the Company’s reasonable request made from
time to time) by providing sub-certifications regarding certain of its services performed hereunder
to the Company in connection with the Company’s Sarbanes-Oxley Act of 2002 certification
requirements. All such records shall be the property of the Company and shall
at all times during the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Company and employees and agents of the Securities
and Exchange Commission, upon reasonable request and prior notice. The Custodian shall, at the
Company’s request, supply the Company with a listing of securities owned by the Company and held by
the Custodian and shall, when requested to do so by the Company and for such compensation as shall
be agreed upon between the Company and the Custodian, include the certificate numbers in such
listings, to the extent such information is available to the Custodian.

4. REPORTING

	 	(a)	 	If requested by the Company or the Manager, the Custodian shall render to
the Manager a monthly report of (i) all deposits to and withdrawals from the Cash
Account during the month, and the outstanding balance (as of the last day of the
preceding monthly report and as of the last day of the subject month) and (ii) an
itemized statement of the Securities held in the Securities Account as of the end of
each month, as well as a list of all Securities transactions that remain unsettled at
that time, and (iii) such other matters as the parties may agree from time to time.
	 
	 	(b)	 	For each Business Day, the Custodian shall make available to the Manager a
daily report of (i) all deposits to and withdrawals from the Cash Account for such
Business Day and the outstanding balance as of the end of such Business Day, and (ii)
a report of settled trades of Securities for such Business Day.
	 
	 	(c)	 	The Custodian shall have no duty or obligation to undertake any market
valuation of the Securities under any circumstance.
	 
	 	(d)	 	The Custodian shall provide the Company with such reports as are reasonably
available to it and as the Company may reasonably request from time to time, on the
internal accounting controls and procedures for safeguarding securities, which are
employed by the Custodian or Foreign Sub-custodian appointed pursuant to Section 8.1.

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5. COMPENSATION OF CUSTODIAN

	 	(a)	 	The Custodian shall be entitled to compensation for its services in
accordance with the terms set forth in the separate fee letter between the Custodian
and the Company.
	 
	 	(b)	 	The Company agrees to pay or reimburse to the Custodian upon its request
from time to time for all costs, disbursements, advances and expenses (including
reasonable fees and expenses of legal counsel) incurred, and any disbursements and
advances made (including any account overdraft resulting from any settlement or
assumed settlement, provisional credit, reclaimed payment or claw-back, or the like),
in connection with the preparation or execution of this Agreement, or in connection
with the transactions contemplated hereby or the administration of this Agreement or
performance by the Custodian of its duties and services under this
Agreement, from time to time (including costs and expenses of any action deemed
necessary by the Custodian to collect any amounts owing to it under this Agreement).

6. APPOINTMENT OF AGENTS

     The Custodian may, at any time or times in its discretion, appoint (and may at any time
remove) any other bank, trust company or other Person to act as an agent or sub-custodian,
including a Foreign Sub-custodian in accordance with the provisions of Section 8, to carry out such
of the provisions of this Agreement as the Custodian may from time to time direct; provided,
however, that the appointment of any agent or sub-custodian shall not relieve the Custodian of its
responsibilities or liabilities hereunder (except to the extent otherwise provided in Sections 7, 8
or 9 below).

7. DEPOSIT IN U.S. SECURITIES SYSTEMS

     The Custodian may deposit and/or maintain Securities in a Securities System within the United
States in accordance with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, including Rule 17f-4 under the Investment Company Act, and subject to the
following provisions:

	 	(a)	 	The Custodian may keep domestic Securities in a U.S. Securities System
provided that such Securities are represented in an account of the Custodian in the
U.S. Securities System which shall not include any assets of the Custodian other than
assets held by it as a fiduciary, custodian or otherwise for customers;
	 
	 	(b)	 	The records of the Custodian with respect to Securities which are
maintained in a U.S. Securities System shall identify by book-entry those securities
belonging to the Company;

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	 	(c)	 	If requested by the Company or Manager, the Custodian shall provide to the
Company or Manager, as the case may be, copies of all notices received from the U.S.
Securities System of transfers of Securities for the account of the Company; and
	 
	 	(d)	 	Anything to the contrary in this Agreement notwithstanding, the Custodian
shall not be liable to the Company or Manager for any direct loss, damage, cost,
expense, liability or claim to the Company resulting from use of any Securities
System (other than to the extent resulting from the negligence, misfeasance or
misconduct of the Custodian itself, or from failure of the Custodian to enforce
effectively such rights as it may have against the U.S. Securities System).

8. SECURITIES HELD OUTSIDE OF THE UNITED STATES

	 	8.1	 	Appointment of Foreign Sub-custodians

     The Company hereby authorizes and instructs the Custodian to employ one or more Foreign
Sub-custodians to act as Eligible Securities Depositories or as sub-custodians to hold the
Securities and other assets of the Company maintained outside the United States. If, after the
initial approval of Foreign Sub-custodians by the board of directors of the Company in connection
with this Agreement, the Custodian wishes to appoint other Foreign Sub-custodians to hold property
of the Company subject to this Agreement, it will so notify the Company and provide it with
information reasonably necessary to determine any such new Foreign Sub-custodian’s eligibility
under Rule 17f-5 under the Investment Company Act, including a copy of the proposed agreement with
such Foreign Sub-custodian. The Company shall at the meeting of its board of directors next
following receipt of such notice and information give a written approval or disapproval of the
proposed action.

	 	8.2	 	Assets to be Held

     The Custodian shall limit the Securities and other assets maintained in the custody of the
Foreign Sub-custodians to: (a) Foreign Securities and (b) cash and cash equivalents in such amounts
as the Custodian (or the Company, through Proper Instructions) may determine to be reasonably
necessary to effect the Company’s transactions in such investments.

	 	8.3	 	Omnibus Accounts

     The Custodian may hold Foreign Securities and related Proceeds with one or more Foreign
Sub-custodians or Eligible Securities Depositories in each case in a single account with such
Custodian or Depository that is identified as belonging to the Custodian for the benefit of its
customers, provided however, that the records of the Custodian with respect to Securities and
related Proceeds which are property of the Company maintained in such account(s) shall identify by
book-entry those Securities and other property as belonging to the Company.

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	 	8.4	 	Reports Concerning Foreign Sub-Custodians

     The Custodian will supply to the Company, upon request from time to time, statements in
respect of the Securities held by Foreign Sub-custodians or Eligible Securities Depositories,
including an identification of the Foreign Sub-custodians and Depositories having physical
possession of the Foreign Securities.

	 	8.5	 	Transactions in Foreign Custody Account

     Notwithstanding any provision of this Agreement to the contrary, settlement and payment for
Securities received by a Foreign Intermediary for the account of the Company may be effected in
accordance with the customary established securities trading or securities processing practices and
procedures in the jurisdiction or market in which the transaction occurs, including delivering
securities to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving later payment for
such securities from such purchaser or dealer.

	 	8.6	 	Foreign Sub-custodians

     Each contract or agreement pursuant to which the Custodian employs a Foreign Sub-custodian
shall include provisions that provide: (i) for indemnification or insurance arrangements (or any
combination of the foregoing) such that the Company will be adequately protected against the risk
of loss of assets held in accordance with such contract; (ii) that the Company’s assets will not be
subject to any right, charge, security interest, lien or claim of any kind in favor of the
Sub-custodian or its creditors except a claim of payment for their safe custody or administration,
in the case of cash deposits, liens or rights in favor of creditors of the Sub-custodian arising
under bankruptcy, insolvency, or similar laws; (iii) that beneficial ownership for the Company’s
assets will be freely transferable without the payment of money or value other than for safe
custody or administration; (iv) that adequate records will be maintained identifying the assets as
belonging to the Company or as being held by a third party for the benefit of the Company; (v) that
the Company’s independent public accountants will be given access to those records or confirmation
of the contents of those records; and (vi) that the Company will receive periodic reports with
respect to the safekeeping of the Company’s assets, including, but not limited to, notification of
any transfer to or from a Company’s account or a third party account containing assets held for the
benefit of the Company. Such contract may contain, in lieu of any or all of the provisions
specified above, such other provisions that the Custodian determines will provide, in their
entirety, the same or a greater level of care and protection for Company assets as the specified
provisions, in their entirety.

	 	8.7	 	Custodian’s Responsibility for Foreign Sub-custodians

	 	(a)	 	With respect to its responsibilities under this Section 8, the Custodian
agrees to exercise reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of property of the Company. The Custodian

15

 

	 	 	 	further agrees that the Foreign Securities will be subject to reasonable care, based on the
standards applicable to custodians in the relevant market, if maintained with each
Foreign Sub-custodian, after considering all factors relevant to the safekeeping of
such assets, including, without limitation: (i) the Foreign Sub-custodian’s
practices, procedures, and internal controls, for certificated securities (if
applicable), the method of keeping custodial records, and the security and data
protection practices; (ii) whether the Foreign Sub-custodian has the requisite
financial strength to provide reasonable care for Company assets; (iii) the Foreign
Sub-custodian’s general reputation and standing and, in the case of Eligible
Securities Depository, the Eligible Securities Depository’s operating history and
number of participants; and (iv) whether the Company will have jurisdiction over and
be able to enforce judgments against the Foreign Sub-custodian, such as by virtue of
the existence of any offices of the Foreign Sub-custodian in the United States or the
Sub-custodian’s consent to service of process in the United States.
	 
	 	(b)	 	At the end of each calendar quarter, the Custodian shall provide written
reports notifying the board of directors of the Company as to of the placement of the
Foreign Securities and cash of the Company with a particular Foreign Sub-custodian
and of any material changes in the Company’s arrangements. The Custodian shall
promptly take such steps as may be required to withdraw assets of the Company from
any Foreign Sub-custodian that has ceased to meet the requirements of Rule 17f-5
under the Investment Company Act.
	 
	 	(c)	 	The Custodian shall establish a system to monitor the appropriateness of
maintaining the Company’s assets with a particular Foreign Sub-custodian and the
contract governing the Company’s arrangements with such Foreign Sub-custodian.
	 
	 	(d)	 	The Custodian’s responsibility with respect to the selection or appointment
of Foreign Sub-custodians shall be limited to a duty to exercise reasonable care in
the selection or retention of such Foreign Intermediaries in light of prevailing
settlement and securities handling practices, procedures and controls in the relevant
market. With respect to any costs, expenses, damages, liabilities, or claims
(including attorneys’ and accountants’ fees) incurred as a result of the acts or the
failure to act by any Foreign Sub-custodians, the Custodian shall take reasonable
action to recover such costs, expenses, damages, liabilities, or claims from such
Foreign Sub-custodians, provided that the Custodian’s sole liability in that regard
shall be limited to amounts actually received by it from such Foreign Intermediaries
(exclusive of related costs and expenses incurred by the Custodian). The Custodian
shall have no responsibility for any act or omission in respect of (or the insolvency
of) any Securities System (including an Eligible Securities Depository). In the event
the Company incurs a loss due to the negligence, willful misconduct, or insolvency of
a Securities System (including an Eligible Securities Depository), the Custodian
shall make reasonable endeavors, in its discretion, to seek recovery from the
Eligible Securities Depository.

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9. RESPONSIBILITY OF CUSTODIAN

	 	9.1	 	General Duties

     The Custodian shall have no duties, obligations or responsibilities under this Agreement or
with respect to the Securities or the Proceeds except for such duties as are expressly and
specifically set forth in this Agreement as duties on its part to be performed or observed, and the
duties and obligations of the Custodian shall be determined solely by the express provisions of
this Agreement. No implied duties, obligations or responsibilities shall be read into this
Agreement against, or on the part of, the Custodian.

	 	9.2	 	Instructions

	 	(a)	 	The Custodian shall be entitled to refrain from taking any action unless it
has such instruction (in the form of Proper Instructions) from the Company as the
Custodian deems necessary, and shall be entitled to require that instructions to it
be in writing. The Custodian shall have no liability for any action (or forbearance from action)
taken pursuant to the instruction of the Company.
	 
	 	(b)	 	Whenever the Custodian is entitled or required to receive or obtain any
report, opinion, notice of other information pursuant to or as contemplated by this
Agreement, it shall be entitled to receive the same in writing, in form, content and
medium reasonably acceptable to it; and whenever any report or other information is
required to be produced or distributed by the Custodian shall be in form, content and
medium reasonably acceptable to it.

	 	9.3	 	General Standards of Care

     Notwithstanding any terms herein contained to the contrary, the acceptance by the Custodian of
its appointment hereunder is expressly subject to the following terms, which shall govern and apply
to each of the terms and provisions of this Agreement (whether or not so stated therein):

	 	(a)	 	The Custodian shall not be responsible for the title, validity or
genuineness, including good deliverable form of any property or evidence of title
thereto received by it or delivered by it pursuant to this Agreement.
	 
	 	(b)	 	The Custodian may rely on and shall be protected in acting or refraining
from acting upon any written notice, instruction, statement, certificate, request,
waiver, consent, opinion, report, receipt or other paper or document furnished to it
(including any of the foregoing provided to it by telecopier or electronic means),
not only as to its due execution and validity, but also as to the truth and accuracy
of any information therein contained, which it in good faith believes to be genuine
and signed or presented by the proper person; and the Custodian shall be entitled to
presume the genuineness and due authority of any signature appearing thereon. The
Custodian shall not be bound to make any independent investigation into the facts

17

 

	 	 	 	 or matters stated in any such notice, instruction, statement, certificate, statement,
request, waiver, consent, opinion, report, receipt or other paper or document,
provided, however, that if the form thereof is specifically prescribed by the terms
of this Agreement, the Custodian shall examine the same to determine whether it
substantially conforms on its face to such requirements hereof.
	 
	 	(c)	 	Neither the Custodian nor any of its directors, officers or employees shall
be liable to anyone for any error of judgment, or for any act done or step taken or
omitted to be taken by it (or any of its directors, officers of employees), or for
any mistake of fact or law, or for anything which it may do or refrain from doing in
connection herewith, unless such action constitutes negligence, willful misconduct or
bad faith on its part and in breach of the terms of this Agreement. The Custodian
shall not be liable for any action taken by it in good faith and reasonably believed
by it to be within powers conferred upon it, or taken by it pursuant to any direction
or instruction by which it is governed hereunder, or omitted to be taken by it by
reason of the lack of direction or instruction required hereby for such action. The
Custodian shall not be under any obligation at any time to ascertain whether the
Company is in compliance with the Investment Company Act, the regulations thereunder,
or the Company’s investment objectives and policies then in effect.
	 
	 	(d)	 	In no event shall the Custodian be liable for any indirect, special or
consequential damages (including lost profits) whether or not it has been advised of
the likelihood of such damages.
	 
	 	(e)	 	The Custodian may consult with, and obtain advice from, legal counsel with
respect to any question as to any of the provisions hereof or its duties hereunder,
or any matter relating hereto, and the opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered or
omitted by the Custodian in good faith in accordance with the opinion and directions
of such counsel; the cost of such services shall be reimbursed pursuant to paragraph
6 hereinabove.
	 
	 	(f)	 	The Custodian shall not be deemed to have notice of any fact, claim or
demand with respect hereto unless actually known by an officer working in its
Corporate Trust Division and charged with responsibility for administering this
Agreement or unless (and then only to the extent received) in writing by the
Custodian at its Corporate Trust Division and specifically referencing this
Agreement.
	 
	 	(g)	 	No provision of this Agreement shall require the Custodian to expend or
risk its own funds, or to take any action (or forbear from action) hereunder which
might in its judgment involve any expense or any financial or other liability unless
it shall be furnished with acceptable indemnification. Nothing herein shall be
construed to obligate the Custodian to commence, prosecute or defend legal
proceedings in any instance, whether on behalf of the Company on its own behalf or
otherwise, with

18

 

	 	 	 	respect to any matter arising hereunder or relating to this Agreement
or the services contemplated hereby.
	 
	 	(h)	 	The permissive right of the Custodian to take any action hereunder shall
not be construed as duty.
	 
	 	(i)	 	Custodian may act or exercise its duties or powers hereunder through agents
or attorneys, and the Custodian shall not be liable or responsible for the actions or
omissions of any such agent or attorney appointed and maintained with reasonable due
care.
	 
	 	(j)	 	All indemnifications contained in this Agreement in favor of the Custodian
shall survive the termination of this Agreement.
	 
	 	(k)	 	All costs and risks of shipment shall be borne exclusively by the Company.

	 	9.4	 	Indemnification; Custodian’s Lien

	 	(a)	 	The Company shall and does hereby indemnify and hold harmless the
Custodian, and any Foreign Sub-custodian appointed pursuant to Section 8.1 above, for
and from any and all costs and expenses (including reasonable attorney’s fees and
expenses), and any and all losses, damages, claims and liabilities, that may arise,
be brought against or incurred by the Custodian as a result of, relating to, or
arising out of this Agreement, or the administration or performance of the
Custodian’s duties hereunder, or the relationship between the Company and the
Custodian created hereby, other than such liabilities, losses, damages, claims, costs
and expenses as are directly caused by the Custodian’s own actions taken in bad faith
or constituting negligence or willful misconduct.
	 
	 	(b)	 	The Custodian shall have and is hereby granted a continuing lien upon and
security interest in, and right of set-off against, any property and assets it may
hold from time to time under this Agreement to secure the payment when due of all
amounts owing to it from time to time hereunder.

	 	9.5	 	Force Majeure

     Without prejudice to the generality of the foregoing, the Custodian shall be without liability
to the Company for any damage or loss resulting from or caused, directly or indirectly, by:

	 	(a)	 	events or circumstances beyond the Custodian’s reasonable control,
including nationalization, expropriation, currency restrictions, the interruption,
disruption or suspension of the normal procedures and practices of any securities
market, power, mechanical, communications or other technological failures or
interruptions, computer viruses or the like, fires, floods, earthquakes or other
natural disasters, civil or military disturbances, acts of war or terrorism, riots,
revolution, acts of

19

 

	 	 	 	God, work stoppages, strikes, national disasters of any kind, or
other similar events or acts;
	 
	 	(b)	 	errors by the Company (including any Authorized Person) in its instructions
to the Custodian;
	 
	 	(c)	 	failure by the Company to adhere to the Custodian’s operational policies
and procedures;
	 
	 	(d)	 	acts, omissions or insolvency of any Securities System;
	 
	 	(e)	 	any delay or failure of any broker, agent or intermediary, central bank or
other commercially prevalent payment or clearing system to deliver to the Custodian’s
sub-custodian or agent securities purchased or in the remittance of payment made in
connection with Securities sold;
	 
	 	(f)	 	any delay or failure of any company, corporation, or other body in charge
of registering or transferring securities in the name of the Custodian, the Company,
the Custodian’s sub-custodians, nominees or agents or any consequential losses
arising out of such delay or failure to transfer such securities including
non-receipt of bonus, dividends and rights and other accretions or benefits; or
	 
	 	(g)	 	changes in applicable law, regulation or orders.

	 	9.6	 	Disputes

     If any dispute or conflicting claim is made by any person with respect to securities or other
property held for the Company, the Custodian shall be entitled to refuse to act until either:

	 	(a)	 	such dispute or conflicting claim has been finally determined by a court of
competent jurisdiction or settled by agreement between conflicting parties, and the
Custodian has received written evidence satisfactory to it of such determination or
agreement; or
	 
	 	(b)	 	the Custodian has received an indemnity, security or both satisfactory to
it and sufficient to hold it harmless from and against any and all loss, liability
and expense which the Custodian may incur as a result of its actions.

	 	9.7	 	Advances

     Under no circumstances shall the Custodian have any responsibility, duty or obligation to
advance its own funds to or for the benefit of the Company. Notwithstanding the foregoing, if the
Custodian (or its affiliates, subsidiaries or agents) at any time or times, pursuant to this
Agreement: (i) advances cash or securities for any purpose, including advances or overdrafts
relating to or resulting from securities settlements, foreign exchange contracts, assumed

20

 

settlements, provisional credit or payment items, or reclaimed payments or adjustments or
claw-backs, or (ii) incurs any liability to pay taxes, interest, charges, expenses, assessments, or
other moneys in connection with the performance of this Agreement, except such as may arise from
its own negligent acts or negligent omissions, then, any property or assets at any time held for
the account of the Company shall be security therefor and shall be subject to a right of set-off
thereon in favor of the Custodian for the repayment of such advances and liabilities. If the
Company shall fail to promptly reimburse the Custodian in respect of the advances or liabilities
described above, the Custodian may utilize available cash and dispose of Securities of the Company,
in a manner, at a time and at a price which the Custodian deems proper, to the extent necessary to
obtain reimbursement and make itself whole.

10. SECURITY CODES

     If the Custodian issues to the Company security codes, passwords or test keys in order that
the Custodian may verify that certain transmissions of information, including Proper Instructions,
have been originated by the Company, the Company shall safeguard any security codes, passwords,
test keys or other security devices which the Custodian shall make available.

11. TAX LAW

	 	11.1	 	Domestic Tax Law

     The Custodian shall have no responsibility or liability for any obligations now or hereafter
imposed on the Company or the Custodian as custodian of the Securities or the Proceeds, by the tax
law of the United States or any state or political subdivision thereof. The Custodian shall be kept
indemnified by and be without liability to the Company for such obligations including taxes (but
excluding any income taxes assessable in respect of compensation paid to the Custodian pursuant to
this agreement), withholding, certification and reporting requirements, claims for exemption or
refund, additions for late payment interest, penalties and other expenses (including legal
expenses) that may be assessed against the Company, or the Custodian as custodian of the Securities
or Proceeds.

	 	11.2	 	Foreign Tax Law

     It shall be the responsibility of the Company to notify the Custodian of the obligations
imposed on the Company, or the Custodian as custodian of any foreign Securities or related
Proceeds, by the tax law of foreign (e.g., non-U. S.) jurisdictions, including responsibility for
withholding and other taxes, assessments or other government charges, certifications and government
reporting. The sole responsibility of the Custodian with regard to such tax law shall be to use
reasonable efforts to cooperate with the Company with respect to any claims for exemption or refund
under the tax law of the jurisdictions for which the Company has provided such information.

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12. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT

	 	(a)	 	This Agreement shall become effective as of its due execution and delivery
by each of the parties. This Agreement shall continue in full force and effect until
terminated as hereinafter provided. This Agreement may be terminated by the Custodian
or the Company pursuant to Section 12(b).
	 
	 	(b)	 	This Agreement shall terminate upon the earliest of (a) the occurrence of
the effective date of termination specified in any written notice of termination
given by either party to the other not later than 45 days prior to the effective date
of termination specified therein, provided that all Securities and Proceeds shall
have been delivered to the Company or as it otherwise instructs (subject to Section
12(d) below), or (b) such other date of termination as may be mutually agreed upon by
the parties in writing.
	 
	 	(c)	 	The Custodian may at any time resign under this Agreement by giving not
less than 45 days advance written notice thereof to the Company.
	 
	 	(d)	 	Prior to the effective date of termination of this Agreement, or the
effective date of the resignation (or removal of the Custodian), as the case may be,
the Company shall give Proper Instruction to the Custodian to cause the Securities
and Proceeds
then held by the Custodian hereunder to be delivered to the Company, or its designee,
or a successor custodian hereunder; and if the Company shall fail or be unable to do
so on a timely basis, the Custodian shall be entitled (but not obligated) to petition
a court of competent jurisdiction (at the Company’s expense) for such instruction.
	 
	 	(e)	 	Upon termination of this Agreement or resignation (or removal) of the
Custodian,

	 	(i)	 	the company shall pay to the Custodian prior to the delivery by the
Custodian to the Company (or as it may otherwise direct) the Securities and
Proceeds held hereunder, such compensation as may be due as of the date of such
termination or resignation (or removal) and shall likewise reimburse the
Custodian for its costs, expenses and disbursements. All indemnifications in
favor of the Custodian under this Agreement shall survive the termination of this
Agreement, or any resignation or removal of the Custodian.
	 
	 	(ii)	 	if Securities, Proceeds or any other property remain in the
possession of the Custodian, its agents or its sub-custodians after the date of
termination hereof or the date of resignation (or removal) of the Custodian, as
the case may be, owing to failure of the Company to give Proper Instructions to
the Custodian for delivery thereof, as referred to in Section 12(d), the
Custodian shall be entitled to fair compensation for its services during

22

 

	 	 	 	such period as the Custodian retains possession of such Securities, funds and other
property and the provisions of this Agreement relating to the duties and
obligations of the Custodian shall remain in full force and effect during such
period.

13. REPRESENTATIONS AND WARRANTIES

	 	(a)	 	The Company represents and warrants to the Custodian that:

	 	(i)	 	it has the power and authority to enter into and perform its
obligations under this Agreement, and it has duly authorized and executed this
Agreement so as to constitute its valid and binding obligation; and
	 
	 	(ii)	 	in giving any instructions which purport to be “Proper
Instructions” under this Agreement, the Company will act in accordance with the
provisions of its bylaws and articles of amendment and restatement and any
applicable laws and regulations.

	 	(b)	 	The Custodian hereby represents and warrants to the Company that it has the
qualification to act as custodian prescribed in Section 26(a)(1) of the Investment
Company Act and the power and authority to enter into and perform its obligations
under this Agreement, and it has duly authorized and executed this Agreement so as to
constitute its valid and binding obligations.
	 
	 	(c)	 	The Company hereby represents and warrants to the Custodian that the
Company shall not, without the prior written consent of the Custodian, permit the
assets of the Account to be deemed assets of an employee benefit plan which is
subject to the Employment Retirement Income Security Act of 1974, as amended
(“ERISA”). The Company acknowledges and agrees that the Custodian shall not grant its
consent in the foregoing circumstance unless and until the Company has entered into
such amendments to this Agreement and has provided such assurances and indemnities to
the Custodian, as the Custodian reasonably may require to be assured that it will not
be subject to ERISA liability. If for any reason the Company breaches or otherwise
fails to comply with the provisions of this Section, this Agreement may be terminated
immediately by the Custodian.

14. PARTIES IN INTEREST; NO THIRD PARTY BENEFIT

     This Agreement shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto. This Agreement is not intended for, and shall not be construed to be
intended for, the benefit of any third parties and may not be relied upon or enforced by any third
parties.

23

 

15. NOTICES

     All notices, approvals and other communications hereunder shall be sufficient if made in
writing (unless and except where and to the extent otherwise expressly provided by the terms of
this Agreement) and given to the parties at the following address (or such other address as either
of them may subsequently designate by notice to the other), given by (i) certified or registered
mail, postage prepaid, (ii) recognized courier or delivery service, or (iii) confirmed telecopier
or telex, with a duplicate sent on the same day by first class mail, postage prepaid:

	 	(a)	 	if to the Company, c/o GSC Group, 300 Campus Drive, Suite 110, Florham
Park, NJ 07932 (Fax: 973-593-5454), Attention: Richard T. Allorto, Jr., Chief
Financial Officer; or
	 
	 	(b)	 	if to the Custodian, to U.S. Bank National Association, Corporate Trust
Services Structured Finance Services, 214 N. Tryon Street, 26th Floor,
Charlotte, NC 28202 (Fax: 704-335-4178), Attention: CDO Trust Services – GSC
Investment LLC.

16. CHOICE OF LAW AND JURISDICTION

     This Agreement shall be construed, and the provisions thereof interpreted under and in
accordance with and governed by the laws of New York for all purposes (without regard to its choice
of law provisions). The parties to this Agreement hereby submit to the exclusive jurisdiction of
the courts of New York, including any appellate courts thereof.

17. ENTIRE AGREEMENT AND COUNTERPARTS

	 	(a)	 	This Agreement constitutes the complete and exclusive agreement of the
parties with regard to the matters addressed herein and supersedes and terminates as
of the date hereof, all prior agreements, agreements or understandings, oral or
written between the parties to this Agreement relating to such matters.
	 
	 	(b)	 	This Agreement may be executed in any number of counterparts and all
counterparts taken together shall constitute one instrument.

18. AMENDMENT; WAIVER

	 	(a)	 	This Agreement may not be amended except by an express written instrument
duly executed by each of the Company and the Custodian.
	 
	 	(b)	 	In no instance shall any delay or failure to act be deemed to be or
effective as a waiver of any right, power or term hereunder, unless and except to the
extent such waiver is set forth in an expressly written instrument signed by the
party against whom it is to be charged.

24

 

19. SUCCESSOR AND ASSIGNS

	 	(a)	 	The covenants and agreements set forth herein shall be binding upon and
inure to the benefit of each of the parties and their respective successors and
permitted assigns. Neither party shall be permitted to assign their rights under this
Agreement without the written consent of the other party (provided, however, that
this shall not limit the ability of the Custodian to delegate certain duties or
services to or perform them through agents or attorneys appointed with due care as
expressly provided in this Agreement).
	 
	 	(b)	 	Any corporation or association into which the Custodian may be merged or
converted or with which it may be consolidated, or any corporation or association
resulting from any merger, conversion or consolidation to which the Custodian shall
be a party, or any corporation or association to which the Custodian transfers all or
substantially all of its corporate trust business, shall be the successor of the
Custodian hereunder, and shall succeed to all of the rights, powers and duties of the
Custodian hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
	 
	 	(c)	 	Any corporation or association into which the Company may be merged or
converted shall be the successor of the Company hereunder and shall succeed to all of
the rights, powers and duties of the Company hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
	 
	 	(d)	 	In connection with the Merger Transaction, (i) the Company shall cause the
Corporation to become a party to this Agreement and (ii) the Custodian
acknowledges and agrees that the Corporation shall be the successor of the Company
hereunder and shall succeed to all of the rights, powers and duties of the Company
hereunder, without the execution or filing of any paper or any further act on the part
of any of the parties hereto.

20. SEVERABILITY

     The terms of this Agreement are hereby declared to be severable, such that if any term hereof
is determined to be invalid or unenforceable, such determination shall not affect the remaining
terms.

21. INSTRUMENT UNDER SEAL; HEADINGS

     This Agreement is intended to take effect as, and shall be deemed to be, an instrument under
seal.

25

 

22. REQUEST FOR INSTRUCTIONS

     If, in performing its duties under this Agreement, the Custodian is required to decide between
alternative courses of action, the Custodian may (but shall not be obliged to) request written
instructions from the Company as to the course of action desired by it. If the Custodian does not
receive such instructions within two (2) days after it has requested them, the Custodian may, but
shall be under no duty to, take or refrain from taking any such courses of action. The Custodian
shall act in accordance with instructions received from the Company in response to such request
after such two-day period except to the extent it has already taken, or committed itself to take,
action inconsistent with such instructions.

23. OTHER BUSINESS

     Nothing herein shall prevent the Custodian or any of its affiliates from engaging in other
business, or from entering into any other transaction or financial or other relationship with, or
receiving fees from or from rendering services of any kind to the Company or any other Person.
Nothing contained in this Agreement shall constitute the Company and/or the Custodian (and/or any
other Person) as members of any partnership, joint venture, association, syndicate, unincorporated
business or similar assignment as a result of or by virtue of the engagement or relationship
established by this Agreement.

24. REPRODUCTION OF DOCUMENTS

     This Agreement and all schedules, exhibits, attachments and amendment hereto may be reproduced
by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar
process. The parties hereto each agree that any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding, whether or not the original is
in existence and whether or not such reproduction was made by a party in the regular course of
business, and that any enlargement, facsimile or further production shall likewise be admissible in
evidence.

25. SHAREHOLDER COMMUNICATIONS

     Securities and Exchange Commission Rule 14b-2 requires banks which hold securities for the
account of customers to respond to requests by issuers of securities for the names, addresses and
holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial
owner has expressly objected to disclosure of this information. In order to comply with the rule,
the Custodian needs the Company to indicate whether it authorizes the Custodian to provide the
Company’s name, address and share position to requesting companies whose securities are held in the
Company. If the Company tells the Custodian “no”, the Custodian will not provide this information
to requesting companies. If the Company tells the Custodian “yes” or does not check either “yes” or
“no” below, the Custodian is required by the rule to treat the Company as consenting to disclosure
of this information for all securities owned by the Company or any funds or accounts established by
the Company. For the Company’s protection,

26

 

the Rule prohibits the requesting company from using the
Company’s name and address for any purpose other than corporate communications. Please indicate
below whether the Company consents or objects by checking one of the alternatives below.

     YES o The Custodian is authorized to release the Company’s name, address, and share positions.

     NO þ The Custodian is not authorized to release the Company’s name, address, and share
positions.

[Remainder of Page Intentionally Left Blank]

27

 

     IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed and delivered
by a duly authorized officer, intending the same to take effect as of the day and year first
written above.

	 	 	 	 	 
	 	GSC INVESTMENT LLC

 	 
	 	By:  	/s/ David L. Goret
 	 
	 	 	Name:  	David L. Goret 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	U.S. BANK NATIONAL 
   ASSOCIATION, as Custodian

 	 
	 	By:  	/s/ C. Brand Hosford
 	 
	 	Name:  C. Brand Hosford	 
	 	Title:  Vice PresidentEX-10.3

 

Exhibit 10.3

ADMINISTRATION AGREEMENT

     AGREEMENT (this “Agreement”) made as of March 21, 2007 by and between GSC Investment Corp., a
Maryland corporation (the “Company”), and GSCP (NJ), L.P., a Delaware limited partnership (the
“Administrator”).

     WHEREAS, the Company is a newly organized Maryland corporation that 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.

     WHEREAS, the Company and GSCP (NJ), L.P. are parties to an Investment Advisory and Management
Agreement dated March 21, 2007 (the “Investment Advisory and Management Agreement”);

     WHEREAS, the Company desires to retain the Administrator to provide administrative services to
the Company in the manner and on the terms hereinafter set forth; and

     WHEREAS, the Administrator is willing to provide administrative services to the Company on the
terms and conditions hereafter set forth.

     NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and
for other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Company and the Administrator hereby agree as follows:

     1. Duties of the Administrator.

     (a) Employment of Administrator. The Company hereby employs the Administrator to act
as administrator of the Company, and to furnish, or arrange for others to furnish, the
administrative services, personnel and facilities described below, subject to review by
and the overall control of the board of directors of the Company, for the period and on
the terms and conditions set forth in this Agreement. The Administrator hereby accepts
such employment and agrees during such period to render, or arrange for the rendering of,
such services and to assume the obligations herein set forth subject to the reimbursement
of costs and expenses as provided for below. The Administrator and any such other persons
providing services arranged for by the Administrator shall for all purposes herein be
deemed to be independent contractors and shall, unless otherwise expressly provided or
authorized herein, have no authority to act for or represent the Company in any way or
otherwise be deemed agents of the Company. The Administrator agrees to notify

 

 

the Company
of any admission or removal of a general partner of the Administrator within a reasonable amount of time after such admission or removal.

     (b) Services. The Administrator shall perform (or oversee, or arrange for, the
performance of) the administrative services necessary for the operation of the Company.
Without limiting the generality of the foregoing, the Administrator shall provide the
Company with office facilities, equipment, clerical, bookkeeping and record keeping
services at such office facilities and such other services as the Administrator, subject
to review by the board of directors of the Company, shall from time to time determine to
be necessary or useful to perform its obligations under this Agreement. The Administrator
shall also, on behalf of the Company, arrange for the services of, and oversee,
custodians, depositories, transfer agents, dividend disbursing agents, other shareholder
servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity deemed to
be necessary or desirable. The Administrator shall make reports to the Company’s board of
directors of its performance of obligations hereunder and furnish advice and
recommendations with respect to such other aspects of the business and affairs of the
Company as it shall determine to be desirable; provided that nothing herein shall be
construed to require the Administrator to, and the Administrator shall not, provide any
advice or recommendation relating to the securities and other assets that the Company
should purchase, retain or sell or any other investment advisory services to the Company.
The Administrator shall be responsible for the financial and other records that the
Company is required to maintain and shall prepare all reports and other materials required
to be filed with the Securities and Exchange Commission (the “SEC”) or any other
regulatory authority, including reports to shareholders. The Administrator will provide
on the Company’s behalf significant managerial assistance to those portfolio companies to
which the Company is required to provide such assistance. In addition, the Administrator
will assist the Company in determining and publishing the Company’s net asset value,
overseeing the preparation and filing of the Company’s tax returns, and the printing and
dissemination of reports to shareholders, and generally overseeing the payment of the
Company’s expenses and the performance of administrative and professional services
rendered to the Company by others.

     2. Records. The Administrator agrees to maintain and keep all books, accounts and other
records of the Company that relate to activities performed by the Administrator hereunder and, if
required by the Investment Company Act, will maintain and keep such books, accounts and records in
accordance with that act. In compliance with the requirements of Rule 31a-3 under the Investment

2

 

Company Act, the Administrator agrees that all records that it maintains for the Company shall at
all times remain the property of the Company, shall be readily accessible during normal business hours, and shall be promptly surrendered upon the
termination of this Agreement or otherwise on written request. The Administrator further agrees
that all records which it maintains for the Company pursuant to Rule 31a-1 under the Investment
Company Act will be preserved for the periods prescribed by Rule 31a-2 under the Investment Company
Act unless any such records are earlier surrendered as provided above. Records shall be
surrendered in usable machine-readable form. The Administrator shall have the right to retain
copies of such records subject to observance of its confidentiality obligations under this
Agreement.

     3. Confidentiality. The parties hereto agree that each shall treat confidentially all
information provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto, including nonpublic personal information
pursuant to Regulation S-P of the SEC, shall be used by any other party hereto solely for the
purpose of rendering services pursuant to this Agreement and, except as may be required in carrying
out this Agreement, shall not be disclosed to any third party, without the prior consent of such
providing party. The foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than through a breach of
this Agreement, or that is required to be disclosed by any regulatory authority, any authority or
legal counsel of the parties hereto, by judicial or administrative process or otherwise by
applicable law or regulation.

     4. Compensation; Allocation of Costs and Expenses. (a) In full consideration of the provision
of the services of the Administrator, the Company shall reimburse the Administrator for the costs
and expenses incurred by the Administrator in performing its obligations and providing personnel
and facilities hereunder based upon the Company’s allocable portion of the Administrator’s overhead
in performing its obligations under this Agreement, including rent and the allocable portion of the
cost of the Company’s officers and their respective staffs (including travel expenses). The
Company’s allocable portion of such costs and expenses may be determined based on the proportion of
the Company’s total assets to the aggregate total assets administered by the Administrator or
sub-division thereof; provided that the Administrator may determine that certain services
shall be allocated on the basis of the time allocated by certain personnel of the Administrator in
providing such services to the Company.

     (b) The Company will bear all costs and expenses that are incurred in its operation and
transactions and not specifically assumed by (i) the Company’s investment adviser, pursuant to the
Investment Advisory and Management Agreement or (ii) the Administrator hereunder, including
payments under this Agreement.

3

 

     (c) The reimbursements required to be made to the Administrator by the Company as set forth
above shall be capped such that the amounts payable to the Administrator by the Company, together
with all of the Company’s other
operating expenses, will not exceed an amount representing 1.5% per annum of the Company’s net
assets attributable to the Company’s common stock.

     5. Limitation of Liability of the Administrator; Indemnification. The Administrator, its
members and their respective officers, managers, partners, agents, employees, controlling persons,
members, and any other person or entity affiliated with any of them (collectively, the “Indemnified
Parties”), shall not be liable to the Company for any action taken or omitted to be taken by the
Administrator in connection with the performance of any of its duties or obligations under this
Agreement or otherwise as administrator for the Company, and the Company shall indemnify, defend
and protect the Administrator (and its officers, managers, partners, agents, employees, controlling
persons, members, and any other person or entity affiliated with the Administrator, including
without limitation the Indemnified Parties (each of whom shall be deemed a third party beneficiary
hereof) 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
Administrator’s duties or obligations under this Agreement or otherwise as administrator for the
Company. Notwithstanding the preceding sentence of this Paragraph 5 to the contrary, nothing
contained herein shall protect or be deemed to protect the Indemnified Parties against, or entitle
or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to
the Company or its shareholders to which the Indemnified Parties would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance of the
Administrator’s duties or by reason of the reckless disregard of the Administrator’s duties and
obligations under this Agreement (to the extent applicable, as the same shall be determined in
accordance with the Investment Company Act and any interpretations or guidance by the SEC or its
staff thereunder).

     6. Activities of the Administrator. The services of the Administrator to the Company are not
to be deemed to be exclusive, and the Administrator and each other person providing services as
arranged by the Administrator is free to render services to others. It is understood that
directors, officers, members, managers, employees and shareholders of the Company are or may become
interested in the Administrator and its affiliates, as directors, officers, members, managers,
employees, partners, stockholders or otherwise, and that the Administrator and directors, officers,
members, managers, employees, partners

4

 

and stockholders of the Administrator and its affiliates are
or may become similarly interested in the Company as shareholders.

     7. Duration and Termination of this Agreement.

     (a) This Agreement shall become effective as of the date hereof, and shall remain in
force with respect to the Company for two years thereafter, and thereafter continue from
year to year, but only so long as such continuance is specifically approved at least
annually by (i) the board of directors of the Company or by the vote of shareholders
holding a majority of outstanding voting securities of the Company and (ii) a majority of
those members of the Company’s board of directors who are not parties to this Agreement or
“interested persons” (as defined in the Investment Company Act) of any such party.

     (b) This Agreement may be terminated at any time, without the payment of any penalty,
by vote of the Company’s board of directors, or by the Administrator, upon 60 days’
written notice to the other party.

     8. Amendments of this Agreement. This Agreement may not be amended or modified except by an
instrument in writing signed by all parties hereto.

     9. Assignment. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither party may assign, delegate
or otherwise transfer this Agreement or any of its rights or obligations hereunder without the
prior written consent of the other party; provided, however, that the Administrator may assign its
obligations under this Agreement to an affiliate of the Administrator without obtaining consent.
No assignment by either party permitted hereunder shall relieve the applicable party of its
obligations under this Agreement. Any assignment by either party in accordance with the terms of
this Agreement shall be pursuant to a written assignment agreement in which the assignee expressly
assumes the assigning party’s rights and obligations hereunder.

     10. Governing Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, including without limitation Sections 5-1401 and 5-1402 of the New
York General Obligations Law and New York Civil Practice Laws and Rules 327(b), and the applicable
provisions of the Investment Company Act, if any. To the extent that the applicable laws of the
State of New York, or any of the provisions herein, conflict with the applicable provisions of the
Investment Company Act, if any, the latter shall control. The parties unconditionally and
irrevocably consent to the exclusive jurisdiction of the courts located in the State of New York
and waive any objection with respect thereto, for the purpose of any action, suit or

5

 

proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

     11. No Waiver. The failure of either party to enforce at any time for any period the
provisions of or any rights deriving from this Agreement shall not be construed to be a waiver of
such provisions or rights or the right of such party
thereafter to enforce such provisions, and no waiver shall be binding unless executed in
writing by all parties hereto.

     12. Severability. If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

     13. Headings. The descriptive headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of this Agreement.

     14. Counterparts. This Agreement may be executed in one or more counterparts, each of which
when executed shall be deemed to be an original instrument and all of which taken together shall
constitute one and the same agreement.

     15. Notices. All notices, requests, claims, demands and other communications hereunder shall
be in writing and shall be given or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service (with signature required), by
facsimile, or by registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at their respective principal executive office addresses.

     16. Entire Agreement. This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior agreements and undertakings, both
written and oral, between the parties with respect to such subject matter.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

6

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date hereof.

	 	 	 	 	 
	 	GSC INVESTMENT CORP.

 	 
	 	By:  	/s/ Thomas V. Inglesby
 	 
	 	 	Name:  	Thomas V. Inglesby 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	GSCP (NJ), L.P.

By: GSCP (NJ), Inc.,

       its general partner

 	 
	 	By:  	/s/ David L. Goret
 	 
	 	 	Name:  	David L. Goret 	 
	 	 	Title:  	Senior Managing Director

and Secretary 	 
	 

7

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