Document:

EX-4.1

 

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

DATED AS OF MARCH 27, 2007

AMONG

GSC INVESTMENT LLC,

GSC CDO III L.L.C.,

GSCP (NJ), L.P.,

AND

THE OTHER INVESTORS PARTY HERETO

     This REGISTRATION RIGHTS AGREEMENT (the “Agreement”) dated as of March [ ], 2007 by and among
GSC Investments LLC, a Maryland limited liability company (the “Company”), GSC CDO III, L.L.C., a
Delaware limited liability company (the “Class A Investor”) and the persons identified below
(collectively, the “Class B Investors,” together with the Class A Investor, the “Investors”) and
GSCP (NJ), L.P., a Delaware limited partnership (the “Manager,” together with the Company and the
Investors, the “Parties”).

     WHEREAS the Parties entered into the Contribution and Exchange Agreement dated October 17,
2006 (as amended on March 26, 2007, the “Contribution Agreement”) with respect to the contribution
(the “Contribution”) to the Company (i) of certain general partner and limited partner interests in
GSC Partners CDO GP III, L.P., a Cayman Islands exempted limited partnership ( “CDO III GP”), by
the Investors and the Manager, and (ii) of the rights and obligations of the Manager under the
Collateral Management Agreement dated as of November 5, 2001 (the “Collateral Management
Agreement”) in exchange for common shares of the Company (“Common Shares”);

     WHEREAS, in order to induce the Investors to effect the Contribution pursuant to the
Contribution Agreement, the Parties hereby agree that this Agreement shall govern the rights of the
Investors to cause the Company to register the Common Shares issued to them.

 

 

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth,
all parties hereto agree as follows:

ARTICLE 1

Certain Definition

     As used in this Agreement, the following terms shall have the following respective meanings:

     “Commission” means the Securities and Exchange Commission or any other Federal agency at the
time administering the Securities Act.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar Federal
rule or statute and the rules and regulations of the Commission thereunder, all as the same shall
be in effect from time to time.

     “Holder” means any Investor holding Registrable Securities, or any person holding Registrable
Securities to whom the rights under this Agreement have been transferred in accordance with Section
5.10 hereof.

     “Initiating Holders” means any Holder or Holders who, in the aggregate, hold not less than 50%
of the Registrable Securities outstanding.

     “Registrable Securities” means the Common Shares issued or issuable in respect of any of the
foregoing upon any conversion, stock split, stock dividend, recapitalization, or similar event;
provided, however, that securities shall only be treated as Registrable Securities if and so long
as (i) they have not been registered or sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction and (ii) the registration rights with
respect to such securities have not terminated pursuant to Section 5.11.

     The terms “register,” “registered” and “registration” refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.

     “Registration Expenses” shall mean all expenses, except as otherwise stated below, incurred by
the Company in complying with Sections 5.01, 5.02 and 5.03 hereof, including without limitation,
all registration, qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the expense of any special
audits incident to or required by any such registration (but excluding the compensation of regular

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employees of the Company which shall be paid in any event by the Company). Registration Expenses
shall also include the fees and disbursements for one special counsel to the selling stockholders,
not to exceed $___ per registration.

     “Restricted Securities” shall mean the securities of the Company required to bear the legends
set forth in Article 3 hereof.

     “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar Federal
rule or statute and the rules and regulations of the Commission thereunder, all as the same shall
be in effect from time to time.

     “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock
transfer taxes applicable to the securities registered by the Holders and, except as set forth in
Registration Expenses, all fees and disbursements of counsel for any Holder.

ARTICLE 2

Restrictions On Transferability

     The Common Shares, and any other securities of the Company issued in respect of such stock
upon any stock split, stock dividend, recapitalization, merger, or similar event, shall not be
sold, assigned, transferred or pledged except upon the conditions specified in this Agreement,
which conditions are intended to ensure compliance with the provisions of the Securities Act.

ARTICLE 3

Restrictive Legend

     Each certificate representing the Common Shares, or any other securities of the Company issued
in respect of such stock upon any stock split, stock dividend, recapitalization, merger, or similar
event, shall be stamped or otherwise imprinted with legends in substantially the following form (in
addition to any legends required by agreement or by applicable state securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. SUCH SHARES GENERALLY MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
EXEMPT FROM

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THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

ARTICLE 4

Notice Of Proposed Transfers

     Prior to any proposed sale, assignment, transfer or pledge of any of the Company’s Common
Shares, unless there is in effect a registration statement
under the Securities Act covering the proposed transfer, the holder thereof shall give written
notice to the Company of such holder’s intention to effect such transfer, sale, assignment or
pledge. Each such notice shall describe the manner and circumstances of the proposed transfer,
sale, assignment or pledge in sufficient detail, and, if requested by the Company, the holder shall
also provide, at such holder’s expense, either (i) a written opinion addressed to the Company of
legal counsel who shall be, and whose legal opinion shall be, reasonably satisfactory to the
Company, to the effect that the proposed transfer of the Common Shares may be effected without
registration under the Securities Act, or (ii) a “no action” letter from the Commission to the
effect that the transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect thereto, whereupon
the holder of such Common Shares shall be entitled to transfer such Common Shares in accordance
with the terms of the notice delivered by the holder to the Company; provided, however, that the
Company shall not request an opinion of counsel or “no action” letter with respect to (i) a
transfer not involving a change in beneficial ownership, (ii) a transaction involving the
distribution without consideration of Common Shares by the holder to its constituent partners or
members in proportion to their ownership interests in the holder, or (iii) a transaction involving
the transfer without consideration of Common Shares by an individual holder during such holder’s
lifetime by way gift or on death by will or intestacy.

ARTICLE 5

Registration

     Section 5.01. Requested Registration.

     (a) Request for Registration. In case the Company shall receive from Initiating Holders a
written request that the Company effect any registration with respect to shares of Registrable
Securities, the Company will:

     (i) promptly give written notice of the proposed registration to all other Holders;
and

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     (ii) as soon as practicable, use its best efforts to effect such registration
(including, without limitation, appropriate qualification under applicable state
securities laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations), as part of a firm
commitment underwritten public offering with underwriters reasonably acceptable to the
Initiating Holders and the Company, as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Registrable Securities
as are specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request by delivering a written notice
to such effect to the Company within 20 days after the date of such written notice from the Company.

     Notwithstanding the foregoing, the Company shall not be obligated to take any action to effect
or complete any such registration pursuant to this Section 5.01:

     (A) Prior to the date six months after the effective date of the Company’s
first registered public offering of its Common Shares;

     (B) Unless the aggregate offering price of all Registrable Securities sought
to be registered by all Holders, net of underwriting discounts and commissions,
would exceed $___;

     (C) During the period starting with the date ninety (90) days prior to the
Company’s estimated date of filing of, and ending on the date six (6) months
immediately following the effective date of, any registration statement
pertaining to securities of the Company (other than a registration of securities
in a Rule 145 transaction or with respect to an employee benefit plan), provided
that the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective; and provided, further,
that if the Company’s registration is for an offering that does not include any
equity securities or securities convertible into equity securities, then the
Company shall not be obligated to take any action to effect or complete any
requested registration under this Section 5.01 during the period starting sixty
(60) days prior to the Company’s estimated date of filing of, and ending on the
date three (3) months immediately after the effective date of such registration
statement.

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     (D) After the Company has effected one registration pursuant to this
subparagraph 5.01(a); or

     (E) If the Company shall furnish to the Initiating Holders a certificate
signed by the President of the Company stating that in the good faith judgment of
the Board of Directors it would be seriously detrimental to the Company for a
registration statement to be filed in the near future, in which case, the
Company’s obligation to use its best efforts to register, qualify or comply under
this Section 5.01(a) shall be deferred for a period not to exceed 180 days from
the date of receipt of the written request from the Initiating Holders, provided
that the Company may not exercise this deferral right more than once in any
twelve month period.

     Subject to the foregoing clauses (A) through (E), the Company shall file a registration
statement covering the Registrable Securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Initiating Holders.

          (b) Underwriting. In the event of a registration pursuant to Section 5.01, the Company shall
advise the Holders as part of the notice given pursuant to Section 5.01(a)(i) that the right of any
Holder to registration pursuant to Section 5.01 shall be conditioned upon such Holder’s
participation in the underwriting arrangements required by this Section 5.01, and the inclusion of
such Holder’s Registrable Securities in the underwriting to the extent requested shall be limited
to the extent provided herein.

     The Company shall, together with all Holders proposing to distribute their securities through
such underwriting, enter into an underwriting agreement in customary form with the managing
underwriter reasonably acceptable to the Company and a majority in interest of the Initiating
Holders. Notwithstanding any other provision of this Section 5.01, if the managing underwriter
advises the Company in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Company shall so advise all Holders requesting to be included in the
registration and underwriting and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among all Holders requesting to be
included in the registration and underwriting in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by them at the time of filing the registration
statement; provided that in the event of such limitation on the number of shares to be
underwritten, then no shares of stock to be registered for sale by the Company shall be included
unless all shares of Registrable Securities requested by the Investors to be included in such
underwriting are so included. No Registrable Securities excluded from the underwriting by reason
of the

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underwriter’s marketing limitation shall be included in such registration. To facilitate
the allocation of shares in accordance with the above provisions, the Company or the underwriters
may round the number of shares allocated to any Holder to the nearest 100 shares. If any Holder of
Registrable Securities disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Company.

     Section 5.02. Company Registration.

     (a) Notice of Registration. If at any time or from time to time the Company shall determine
to register any of its equity securities, either for its own account or the account of a Holder
(other than pursuant to this Agreement) or other holders, other than (i) a registration relating
solely to employee benefit plans, (ii) a registration relating solely to a Rule 145 transaction, or
(iii) a registration in which the only equity security being registered is common stock issuable
upon conversion of convertible debt securities which are also being registered, the Company will:

     (i) promptly give to each Holder written notice thereof; and

     (ii) include in such registration (and any related qualifications including
compliance with Blue Sky laws), and in any underwriting involved therein, all the
Registrable Securities specified in a written request or requests, made within 20 days
after the date of such written notice from the Company, by any Holder.

     (b) Underwriting. If the registration of which the Company gives notice is for a registered
public offering involving an underwriting, the Company shall so advise the Holders as a part of the
written notice given pursuant to Section 5.02(a)(i). In such event, the right of any Holder to
registration pursuant to Section 5.02 shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of Registrable Securities in the underwriting shall be limited to
the extent provided herein.

     All Holders proposing to distribute their securities through such underwriting shall (together
with the Company and the other holders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the managing underwriter selected for
such underwriting by the Company. Notwithstanding any other provision of this Section 5.02, if the
managing underwriter determines that marketing factors require a limitation of the number of shares
to be underwritten, the managing underwriter may limit the Registrable Securities to be included in
such registration (i) in the case of the Company’s initial public offering, to zero, and (ii) in
the case of any other offering, to an amount no less than 25% of all shares to be included in such
offering. The Company shall so advise all Holders requesting to be included in

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the registration
and underwriting and the number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all the Holders requesting to be included in
the registration and underwriting in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities held by them at the time of filing the registration statement.
To facilitate the allocation of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder to the nearest 100 shares. If
any Holder disapproves of the terms of any such underwriting, such person may elect to withdraw
therefrom by written notice to the Company.

     (c) Right to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 5.02 prior to the effectiveness of
such registration whether or not any Holder has elected to include securities in such registration.

     Section 5.03. Subsequent Registration Rights.

     (a) Without the consent of any holder of Registrable Securities hereunder, the Company may
grant to any holder of securities of the Company registration rights inferior to or pari passu with
those granted hereunder.

     (b) The Company shall not enter into any agreement granting any holder or prospective holder
of any securities of the Company registration rights superior to the rights granted the Investors
hereunder without the written consent of the holders of at least a majority of the Registrable
Securities.

     Section 5.04. Expenses Of Registration. All Registration Expenses shall be borne by the
Company. Notwithstanding the foregoing, in the event that Holders cause the Company to begin a
registration pursuant to Section 5.01, and the request for such registration is subsequently
withdrawn by such Holders or such registration is not completed due to failure to meet the net
proceeds requirement set forth in such section or is otherwise not successfully completed due to no
fault of the Company, all Holders shall be deemed to have forfeited their right to one registration
under Section 5.01 for a period of six (6) months, as applicable, unless (a) the Holders requesting
such registration pay for, or reimburse the Company for, the Registration Expenses incurred in
connection with such withdrawn or incomplete registration or (b) the withdrawal, failure to meet
the net proceeds requirement or other failure to be completed is based upon material adverse
information concerning the Company known to the Company at the time of the initial request for such
registration by the Holders of which the Holders initiating the registration request were not aware
of at the time of such request. All Selling Expenses relating to securities registered on behalf
of the Holders and all other registration expenses shall be borne by the Holders of such

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securities
pro rata on the basis of the number of shares so registered or proposed to be so registered.

     Section 5.05. Registration Procedures. In the case of each registration effected by the
Company pursuant to this Agreement, the Company will keep each Holder advised in writing as to the
initiation of such registration and as to the completion thereof. The Company will:

     (a) Prepare and file with the Commission a registration statement and such amendments and
supplements as may be necessary and use its best efforts to cause such registration statement to
become and remain effective for at least 180 days or until the distribution described in the
registration statement has been completed, whichever first occurs;

     (b) Furnish to the Holders participating in such registration and to the underwriters of the
securities being registered such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such securities.

     (c) Use its reasonable best efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by the Holders; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.

     (d) Notify each Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing.

     (e) Use its best efforts to furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold through underwriters, (i)
an opinion, dated as of such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and (ii) a letter dated as of such date,
from the independent certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters.

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     Section 5.06. Indemnification and Contribution.

     (a) The Company will indemnify each Holder, each of its officers, directors, partners and
former partners, and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration has been effected pursuant to this Agreement,
against all expenses, claims, losses, damages or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular, issuer free writing
prospectus, or other document, or any amendment or supplement thereto, incident to any such
registration, or based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation by the Company of the
Securities Act, the Exchange Act, state securities laws or any rule or regulation promulgated under
such laws applicable to the Company in connection with any such registration, and the Company will
reimburse each such Holder, each of its officers, directors, partners and former partners and each
person controlling such Holder within the meaning of Section 15 of the Securities Act, for any
legal and any other expenses reasonably incurred, as such expenses are incurred, in connection with
investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any such case to
the extent that any such claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in such Registration
Statement, prospectus, offering circular, issuer free writing prospectus, or other document in
reliance upon and in conformity with written information furnished to the Company by an instrument
duly executed by such Holder or controlling person, and stated to be specifically for use therein.

     (b) Each Holder will, if Registrable Securities held by such Holder are included in the
securities as to which such registration is being effected, indemnify the Company, each of its
directors and officers, each person who controls the Company within the meaning of Section 15 of
the Securities Act, and each other holder of the Company’s securities covered by such registration
statement, each of such other holder’s, officers, directors, partners and former partners and each
person controlling such other holder within the meaning of Section 15 of the Securities Act,
against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material fact contained in any
such registration statement, prospectus, offering circular, issuer free writing prospectus or other
document, or any omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or any violation by the
Holder of the Securities Act, the Exchange

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Act, state securities laws or any rule or regulation
promulgated under such laws applicable to the Holder, and will reimburse the Company, such other
holders, such directors, officers, partners or control persons for any legal or any other expenses
reasonably incurred, as such expenses are incurred, in connection with investigating or defending
any such claim, loss, damage, liability or action, but only to the extent that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular, issuer free writing prospectus or other
document in reliance upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of each Holder under this Section 5.06(b) shall be
limited to an amount equal to the amount by which the aggregate proceeds from the offering received
by such Holder exceeds the amount paid (including underwriters discounts and commission, if any) by
such Holder in connection with such registration.

     (c) Each party entitled to indemnification under this Section 5.06 (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be approved
by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party’s expense, and provided further that the
failure of any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement except to the extent the failure to give
such notice is materially prejudicial to an Indemnifying Party’s ability to defend such action and
provided further, that the Indemnifying Party shall not assume the defense for matters as to which
there is a conflict of interest or there are separate and different defenses. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party (whose consent shall not be unreasonably withheld), consent to entry of any
judgment or enter into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation.

     (d) If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such

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proportion as is appropriate to reflect the relative benefits received by the Company from the
offering of the Restricted Securities, on the one hand, and by the Holders from receiving
Restricted Securities registered under the Securities Act, on the other hand, or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Company on the one hand and the Holders on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative fault of the Company on the one hand and
the Holders on the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Holders and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission.

     (e) The Company and the Holders agree that it would not be just and equitable if contribution
pursuant to this Section 5.06 were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in connection with any such
action or claim. Notwithstanding
the provisions of this Section 5.06, in no event shall a Holder be required to contribute any
amount in excess of the amount by which the total price at which the Restricted Securities sold by
such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders’ obligations to contribute pursuant to this Section 5.06 are
several and not joint.

     (f) The remedies provided for in this Section 5.06 are not exclusive and shall not limit any
rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

     Section 5.07. Information By Holder. The Holders of Registrable Securities included in any
registration shall furnish to the Company such information regarding such Holders, the Registrable
Securities held by them and the distribution proposed by such Holders as the Company may request in
writing

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and as shall be required in connection with any registration referred to in this Agreement.

     Section 5.08. Rule 144 Reporting. With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit the sale of the Restricted
Securities to the public without registration, after such time as a public market exists for the
Common Shares of the Company, the Company agrees to use all reasonable efforts to:

     (a) Make and keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act, at all times after the date that the Company becomes subject to
the reporting requirements of the Securities Act or the Exchange Act;

     (b) File with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements); and

     (c) So long as a Holder owns any Restricted Securities, to furnish to the Holder forthwith
upon request a written statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company for an offering of its securities to the general
public), a copy of the most recent annual or quarterly report of the Company, and such other
reports and documents of the Company and other information in the possession of or reasonably
obtainable by the Company as the Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing the Holder to sell any such securities without registration.

     Section 5.09. Transfer Of Registration Rights. The rights granted Holders under this Article
5 may be assigned to a transferee or assignee, not a competitor of the Company, in connection with
any transfer or assignment of Registrable Securities by the Holder provided that: (i) such transfer
is otherwise effected in accordance with applicable securities laws and the terms of this
Agreement, (ii) such assignee or transferee acquires at least ___shares (as adjusted for stock
splits, stock dividends, stock combinations and the like) of Registrable Securities from the
transferor, (iii) written notice is promptly given to the Company and (iv) such assignee or
transferee agrees to be bound by the provisions of this Agreement. Notwithstanding the foregoing,
the rights to cause the Company to register securities may be assigned without compliance with item
(ii) above to (x) any constituent partner or member of a Holder which is a partnership or limited
liability company, or an affiliate (as such term is defined in Rule 405 of the Securities Act) of a
Holder, or (y) a family member or trust for the benefit of a Holder who is an individual, or a
trust for the benefit of a family member of such a Holder.

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     Section 5.10. Termination Of Registration Rights. The rights granted pursuant to Sections
5.01, 5.02 and 5.03 of this Agreement shall terminate as to any Holder upon the earlier of (i) the
date five years after the effective date of the Company’s initial public offering and (ii) provided
that the Company’s shares are traded on a national stock exchange, such time as the Registrable
Securities held by the Holder represent less than 1% of the outstanding capital stock of the
Company and such Holder may sell all of such Registrable Securities in any single three-month
period under Rule 144.

ARTICLE 6

Aggregation Of Shares

     All shares of the Company’s stock held by affiliated entities or persons shall be aggregated
together for purposes of determining the availability of any rights under this Agreement.

ARTICLE 7

Amendment

     Except as otherwise provided above, additional parties may be added to this Agreement, any
provision of this Agreement may be amended or the observance thereof may be waived (either
generally or in a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of a majority of the Registrable Securities then
outstanding. Notwithstanding the foregoing, no amendment shall be made to this Agreement which by
its terms adversely affects, or which was motivated primarily by an intent to adversely affect, a
particular class of Holders in a
manner differently from the other Holders without the written consent of a majority of the
Registrable Securities held by the Holders in such adversely affected class. Any amendment or
waiver effected in accordance with Section 5.03 or Article 8, as applicable, shall be binding upon
each Investor or Holder of Registrable Securities at the time outstanding, each future holder of
any of such securities, and the Company.

ARTICLE 8

Governing Law

     This Agreement shall be governed in all respects by the internal laws of the State of New York
without regard to conflict of laws provisions.

14

 

ARTICLE 9

Entire Agreement

     This Agreement constitutes the full and entire understanding and Agreement among the parties
regarding the matters set forth herein. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon the successors, assigns,
heirs, executors and administrators of the parties hereto.

ARTICLE 10

Notices, Etc.

     All notices, requests and other communications to any party hereunder shall be in writing and
shall be deemed duly given if (a) delivered personally, (b) mailed, certified or registered mail
with postage prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, and in each case, addressed to such party at the address set forth below:

     If to GSC Investment LLC:

GSC Investment LLC

12 E. 49th Street, Suite 3200

New York, NY 10017

     If to GSC CDO III, L.L.C.:

GSC CDO III, L.L.C.

c/o GSC Group

12 E. 49th Street, Suite 3200

New York, NY 10017

     If to GSCP (NJ), L.P.:

GSCP (NJ), L.P.

500 Campus Drive, Suite 220

Florham Park, NJ 07932

     If to the Class B Investors:

c/o GSC Group

12 E. 49th Street, Suite 3200

New York, NY 10017

15

 

ARTICLE 11

Counterparts

     This Agreement may be executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one instrument.

     [Remainder of Page Intentionally Left Blank]

16

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set
forth above.

	 	 	 	 	 
	 	GSC INVESTMENT LLC

 	 
	 	By:  	/s/ Richard T. Allorto
 	 
	 	 	Name:  	Richard T. Allorto 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	

GSC CDO III L.L.C.

By: GSCP (NJ) Holdings, L.P. as its sole
      member

By: GSCP (NJ), Inc., as its General

     Partner

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

Secretary 	 
	 
	 	GSCP (NJ), L.P.

By: GSCP (NJ), Inc., as its General

     Partner

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

Secretary 	 
	 
	 	

Class B Investors:

 	 
	 	
/s/ Thomas J. Libassi
 	 
	 	Thomas J. Libassi 	 
	 	 	 	 
	 
	 	 	 
	 	/s/ Richard M. Hayden
 	 
	 	Richard M. Hayden 	 
	 	 	 	 

17

 

	 	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	/s/ Thomas V. Inglesby
 	 
	 	Thomas V. Inglesby 	 
	 	 	 	 
	 
	 	 	 
	 	/s/ Robert A. Hamwee
 	 
	 	Robert A. Hamwee 	 
	 	 	 	 
	 
	 	 	 
	 	/s/ Keith W. Abell
 	 
	 	Keith W. Abell 	 
	 	 	 	 
	 
	 	HANNA FRANK INVESTMENTS LLC

 	 
	 	By:  	/s/ Peter Frank
 	 
	 	 	Name:  	Peter Frank 	 
	 	 	Title:  	Managing Member 	 
	 
	 	GREENWICH STREET CAPITAL 
PARTNERS II, L.P.

By: Greenwich Street Investments II,

     L.L.C., as its General Partner

 	 
	 	By:  	
/s/ Thomas V. Inglesby
 	 
	 	 	Name:  	Thomas V. Inglesby
 	 
	 	 	Title:  	Managing Member 	 
	 

18EX-10.1

 

Exhibit 10.1

INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT

BETWEEN

GSC INVESTMENT LLC

AND

GSCP (NJ), L.P.

     Agreement made this 21st day of March 2007, by and between GSC Investment LLC, a Maryland
limited liability company (the “Company”), and GSCP (NJ), L.P., a Delaware limited partnership (the
“Investment Adviser”).

     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 (“RIC”) 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 Investment Adviser is an investment adviser that has registered under the
Investment Advisers Act of 1940, as amended (the “Advisers Act”), and, with certain of its
affiliates, does business as GSC Group; and

     WHEREAS, the Company desires to retain the Investment Adviser to furnish investment advisory
services to the Company on the terms and conditions hereinafter set forth, and the Investment
Adviser wishes to be retained to provide such services.

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

     1. Duties of the Investment Adviser.

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

     (i) in accordance with the investment objectives, policies and restrictions
that are determined by the Board from time to time and disclosed to the
Investment Adviser, which objectives, policies and restrictions shall initially
be those set forth

 

 

in the Company’s preliminary Prospectus dated March 8, 2007,
as may be amended, supplemented or modified by the final
Prospectus, relating to its initial public offering of its common stock,

     (ii) in accordance with the Investment Company Act,

     (iii) during the term of this Agreement in accordance with all other
applicable federal and state laws, rules and regulations, and the Company’s
operating agreement, or charter and by-laws, as applicable, and

     (iv) following the Merger Transaction, in accordance with the RIC rules
(within the meaning of Section 851(a) of the Internal Revenue Code of 1986, as
amended).

     Without limiting the generality of the foregoing, the Investment Adviser shall, during the
term and subject to the provisions of this Agreement,

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

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

     (iii) close and monitor the Company’s investments;

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

     (v) perform due diligence on prospective portfolio companies;

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

     (vii) notify the Company of any admission or removal of a general partner
of the Investment Adviser within a reasonable amount of time after such
admission or removal.

     The Investment Adviser shall have the power and authority on behalf of the Company to
effectuate investment decisions for the Company, including the execution and delivery of all
documents relating to the Company’s investments

2

 

and the placing of orders for other purchase or
sale transactions on behalf of the Company. In the event that the Company determines to incur debt
financing, the Investment Adviser will arrange for such financing on the Company’s behalf, subject
to the oversight and approval of the Board. If it is necessary for the
Investment Adviser to make investments on behalf of the Company through a special purpose
vehicle, the Investment Adviser shall have authority to create or arrange for the creation of such
special purpose vehicle and to make such investments through such special purpose vehicle in
accordance with the Investment Company Act.

     (b) The Investment Adviser hereby accepts such engagement and agrees during the term
hereof to render the services described herein for the compensation provided herein.

     (c) Subject to the requirements of the Investment Company Act, the Investment Adviser
is hereby authorized to enter into one or more sub-advisory agreements with other
investment advisers (each, a “Sub-Adviser”) pursuant to which the Investment Adviser may
obtain the services of the Sub-Adviser(s) to assist the Investment Adviser in providing
the investment advisory services required to be provided by the Investment Adviser under
Section 1(a) of this Agreement. Specifically, the Investment Adviser may retain a
Sub-Adviser to recommend specific securities or other investments based upon the Company’s
investment objectives and policies, and work, along with the Investment Adviser, in
structuring, negotiating, arranging or effecting the acquisition or disposition of such
investments and monitoring investments on behalf of the Company, subject to the oversight
of the Investment Adviser and the Company. The Investment Adviser, and not the Company,
shall be responsible for any compensation payable to any Sub-Adviser. Any sub-advisory
agreement entered into by the Investment Adviser shall be in accordance with the
requirements of the Investment Company Act and other applicable federal and state law.
Nothing in this subsection (c) will obligate the Investment Adviser to pay any expenses
that are the expenses of the Company under Section 2.

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

     (e) The Investment Adviser shall keep and preserve for the period required by the
Investment Company Act any books and records relevant to the provision of its investment
advisory services to the Company and shall specifically maintain all books and records
with

3

 

respect to the Company’s portfolio transactions and shall render to the Board such
periodic and special reports as the Board may reasonably request. The Investment Adviser
agrees that all records that it maintains for the Company are the property of the Company
and will surrender promptly to the Company any such records upon the Company’s request,
provided that the Investment Adviser may retain a copy of such records.

     2. Company’s Responsibilities and Expenses Payable by the Company. All investment
professionals of the Investment Adviser and its staff, when and to the extent engaged in providing
investment advisory services required to be provided by the Investment Adviser under Section 1(a),
and the compensation and routine overhead expenses of such personnel allocable to such services,
will be provided and paid for by the Investment Adviser and not by the Company. The Company will
bear all costs and expenses of its operations and transactions, including those relating to:

	 	•	 	the Company’s organization;
	 
	 	•	 	calculating the Company’s net asset value (including the cost and expenses of any
independent valuation firm);
	 
	 	•	 	expenses incurred by the Investment Adviser payable to third parties, including
agents, consultants or other advisors, in monitoring financial and legal affairs for
the Company and in monitoring the Company’s investments and performing due diligence
on its prospective portfolio companies;
	 
	 	•	 	interest payable on debt, if any, incurred to finance the Company’s investments;
	 
	 	•	 	offerings of the Company’s common shares and other securities;
	 
	 	•	 	investment advisory and management fees;
	 
	 	•	 	fees payable to third parties, including agents, consultants or other advisors,
relating to, or associated with, evaluating and making investments;
	 
	 	•	 	transfer agent and custodial fees;
	 
	 	•	 	federal and state registration fees;
	 
	 	•	 	all costs of registration and listing the Company’s common shares on any
securities exchange;

4

 

	 	•	 	federal, state and local taxes;
	 
	 	•	 	independent directors’ fees and expenses;
	 
	 	•	 	costs of preparing and filing reports or other documents required by governmental
bodies (including the Securities and Exchange Commission (the “SEC”));
	 
	 	•	 	costs of any reports, proxy statements or other notices to common shareholders
including printing costs;
	 
	 	•	 	the Company’s allocable portion of the fidelity bond, directors and
officers/errors and omissions liability insurance, and any other insurance premiums;
	 
	 	•	 	direct costs and expenses of administration, including printing, mailing, long
distance telephone, copying, secretarial and other staff, independent auditors and
outside legal costs; and
	 
	 	•	 	administration fees and all other expenses incurred by the Company or, if
applicable, the Administrator in connection with administering the Company’s business
(including payments under the administration agreement to be entered into by the
Company and the Investment Adviser (the “Administration Agreement”) based upon the
Company’s allocable portion of the Administrator’s overhead in performing its
obligations under the Administration Agreement, including rent and the allocable
portion of the cost of the Company’s officers and their respective staffs (including
travel expenses)).

     3. Compensation of the Investment Adviser. The Company agrees to pay, and the Investment
Adviser agrees to accept, as compensation for the services provided by the Investment Adviser
hereunder, a base management fee (“Base Management Fee”) and an incentive fee (“Incentive Fee”) as
hereinafter set forth. The Company shall make any payments due hereunder to the Investment Adviser
or to the Investment Adviser’s designee as the Investment Adviser may otherwise direct. To the
extent permitted by applicable law and provided the Company is permitted to deduct any accrued but
unpaid fees, the Investment Adviser may elect, or the Company may adopt a deferred compensation
plan pursuant to which the Investment Adviser may elect, to defer all or a portion of its fees
hereunder for a specified period of time.

     (a) The Base Management Fee shall be 1.75% per annum of the Company’s total assets
(other than cash or cash equivalents but including assets purchased with borrowed funds).
For services rendered

5

 

during the period commencing from March 28, 2007 (the “Commencement
Date”), through and including June 30, 2007, the Base Management Fee will be payable on
June 30, 2007. For services rendered after such time, the Base Management Fee will be
payable quarterly in arrears. Until the Company has completed its first full calendar
quarter of operations, the Base Management Fee will be calculated based on the initial
value of the Company’s total assets after giving effect to the purchase of the portfolio
assets (the “Portfolio”) as contemplated by the Portfolio Acquisition Agreement, dated as
of March 23, 2007, by and between the Company and GSC Partners CDO Fund III, Limited
(other
than cash or cash equivalents but including assets purchased with borrowed funds).
Subsequently, the Base Management Fee will be calculated at the end of each calendar
quarter based on the average value of the Company’s total assets (other than cash or cash
equivalents but including assets purchased with borrowed funds) as of the end of such
calendar quarter and the end of the immediate prior calendar quarter. Base Management
Fees for any partial month or quarter will be appropriately pro rated.

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

     (i) One part will be calculated and payable quarterly in arrears based on
the Pre-Incentive Fee net investment income for the quarter. “Pre-Incentive Fee
net investment income” means interest income, dividend income and any other
income (including any other fees, such as commitment, origination, structuring,
diligence, managerial and consulting fees or other fees that the Company
receives from portfolio companies) accrued by the Company during the calendar
quarter, minus the Company’s operating expenses for the quarter (including the
Base Management Fee, expenses payable under the Administration Agreement, and
any interest expense and dividends paid on any issued and outstanding preferred
stock, but excluding the Incentive Fee).

     Pre-Incentive Fee net investment income includes, in the case of investments with a deferred
interest feature (such as market discount, debt instruments with payment-in-kind interest,
preferred stock with payment-in-kind dividends and zero coupon securities), accrued income that has
not yet been received in cash. Pre-Incentive Fee net investment income does not include any
realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

     Pre-Incentive Fee net investment income, expressed as a rate of return on the value of the
Company’s net assets (defined as total assets less liabilities) at the

6

 

end of the immediately
preceding calendar quarter, will be compared to a “hurdle rate” of 1.875% per quarter (7.5%
annualized). The Company will pay the Investment Adviser an Incentive Fee with respect to the
Company’s pre-Incentive Fee net investment income in each calendar quarter as follows:

     (A) no Incentive Fee in any calendar quarter in which the
Company’s pre-Incentive Fee net investment income does not exceed the
hurdle rate; and

     (B) 20% of the amount of the Company’s pre-Incentive Fee net
investment income, if any, that
exceeds 1.875% in any calendar quarter (7.5% annualized).

     These calculations will be appropriately pro rated for any period of less than three months.

     (ii) The second part of the Incentive Fee (the “Capital Gains Fee”) will be
determined and payable as of the end of each calendar year (or upon termination
of this Agreement as set forth below), commencing with the calendar year ending
on December 31, 2007, and is calculated at the end of each applicable year by
subtracting (1) the sum of the Company’s cumulative aggregate realized capital
losses and cumulative aggregate unrealized capital depreciation from (2) the
Company’s cumulative aggregate realized capital gains, in each case calculated
from the Commencement Date. If such amount is positive at the end of such year,
then the Capital Gains Fee for such year is equal to 20.0% of such amount, less
the cumulative aggregate amount of Capital Gains Fees paid in all prior years.
If such amount is negative, then there is no Capital Gains Fee for such year.
If this Agreement shall terminate as of a date that is not a calendar year end,
the termination date shall be treated as though it were a calendar year end for
purposes of calculating and paying a Capital Gains Fee.

For purposes of this Section 3(b)(ii):

The cumulative aggregate realized capital gains are calculated as the sum
of the differences, if positive, between (a) the net sales price of each
investment in the Company’s portfolio when sold and (b) the accreted or
amortized cost basis of such investment.

The cumulative aggregate realized capital losses are calculated as the sum
of the differences, if negative, between (a) the net sales

7

 

price of each investment in the Company’s portfolio when sold and (b) the accreted or
amortized cost basis of such investment.

The aggregate unrealized capital depreciation is calculated as the sum of
the differences, if negative, between (a) the valuation of each investment in
the Company’s portfolio as of the applicable Capital Gains Fee calculation date
and (b) the accreted or amortized cost basis of such investment.

     (iii) Payment of any Incentive Fee otherwise earned by the Investment
Adviser shall be deferred (“Deferred Incentive Fees”) if, during the most recent
four full calendar quarter period ending on or prior to the date such payment is
to be made, the sum
of (a) the Company’s aggregate distributions to its shareholders and (b)
the change in the Company’s net assets (before taking into account any Incentive
Fees payable during that period) is less than 7.5% of the Company’s net assets
at the beginning of such period. These calculations will be appropriately pro
rated for the first three calendar quarters after the date of this Agreement and
adjusted for any share issuances or repurchases during the relevant period.
Such Deferred Incentive Fees shall become payable on the next date on which such
test has been satisfied for the most recent four full calendar quarters.

     4. Covenants of the Investment Adviser. The Investment Adviser represents that it is
registered as an investment adviser under the Advisers Act and agrees that its activities will at
all times be in compliance in all material respects with all applicable federal and state laws
governing its operations and investments.

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

8

 

     6. Limitations on the Employment of the Investment Adviser. The services of the Investment
Adviser to the Company are not exclusive, and the Investment Adviser may engage in any other
business or render similar or different services to others including, without limitation, the
direct or indirect sponsorship or management of other investment based accounts or commingled pools
of capital, however structured, having investment objectives similar to those of the Company, and
nothing in this Agreement shall limit or restrict the right of any member, manager, partner,
officer or employee of the Investment Adviser to engage in any other business or to devote his or
her time and attention in part to any other business, whether of a similar or dissimilar nature, or
to receive any fees or compensation in connection therewith (including fees for serving as a
director of, or providing consulting services to, one or more of the Company’s portfolio companies,
subject to applicable law). So long as this Agreement or any extension, renewal or amendment
remains in effect, the Investment Adviser shall be the only investment adviser for the Company,
subject to the Investment
Adviser’s right to enter into sub-advisory agreements. The Investment Adviser assumes no
responsibility under this Agreement other than to render the services called for hereunder. It is
understood that directors, officers, employees or shareholders of the Company are or may become
interested in the Investment Adviser and its affiliates, as directors, officers, employees,
partners, stockholders, members, managers or otherwise, and that the Investment Adviser and
directors, officers, employees, partners, stockholders, members and managers of the Investment
Adviser and its affiliates are or may become similarly interested in the Company as shareholders or
otherwise.

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

     8. Limitation of Liability of the Investment Adviser; Indemnification. The Investment
Adviser, its partners and their respective officers, managers, partners, agents, employees,
controlling persons, members and any other person 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 Investment Adviser in connection with the performance of any of its duties or
obligations under this Agreement or otherwise as an investment adviser of the Company, except to
the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting from
a breach of fiduciary duty (as the

9

 

same is finally determined by judicial proceedings) with respect
to the receipt of compensation for services and except to the extent such action or omission
constitutes gross negligence, willful misfeasance, bad faith or reckless disregard of its duties
and obligations under this Agreement. The Company shall indemnify, defend and protect 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 Investment Adviser’s duties or
obligations under this Agreement or otherwise as an investment adviser of the Company.
Notwithstanding the foregoing provisions of this Section 8 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 security holders to which the Indemnified Parties would
otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of any Indemnified Party’s duties or by reason of the reckless disregard of the
Investment Adviser’s duties and obligations under this Agreement (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). For the avoidance of doubt, none of the Indemnified Parties will be liable for
trade errors, such as errors in the investment decision-making process (e.g., a transaction was
effected in violation of the Company’s investment guidelines) or in the trade process (e.g., a buy
order was entered instead of a sell order, or the wrong security was purchased or sold, or a
security was purchased or sold in an amount or at a price other than the correct amount or price),
other than those trade errors resulting from an Indemnified Party’s gross negligence, willful
misfeasance, bad faith or reckless disregard of its duties and obligations under this Agreement.

     9. Effectiveness, Duration and Termination of Agreement.

     (a) This Agreement shall become effective as of the first date above written. This
Agreement shall remain in effect for two years after such date, and thereafter shall
continue automatically for successive annual periods, provided that such continuance is
specifically approved at least annually by

     (i) the vote of the Board, or by the vote of shareholders holding a
majority of the outstanding voting securities of the Company, and

10

 

     (ii) the vote of a majority of the Company’s Directors who are not parties
to this Agreement or “interested persons” (as such term is defined in Section
2(a)(19) of the Investment Company Act) of any party to this Agreement, in
accordance with the requirements of the Investment Company Act.

     (b) This Agreement may be terminated at any time, without the payment of any penalty,
upon 60 days’ written notice, by the vote of shareholders holding a majority of the
outstanding voting securities of the Company, or by the vote of the Company’s Directors or
by the Investment Adviser.

     (c) This Agreement will automatically terminate in the event of its “assignment” (as
such term is defined for purposes of Section 15(a)(4) of the Investment Company Act);
provided that the parties hereto acknowledge and agree that this Agreement will not
terminate when, in connection with the closing of the Merger Transaction, the Corporation
automatically becomes a party to this Agreement and assumes the obligations of the Company
hereunder.

     (d) The provisions of Section 8 of this Agreement shall remain in full force and
effect, and the Investment Adviser and the other Indemnified Parties shall remain entitled
to the benefits thereof, notwithstanding any termination of this Agreement. Further,
notwithstanding the termination or expiration of this Agreement as aforesaid, the
Investment Adviser shall be entitled to any amounts owed under Section 3 through the date
of termination or expiration.

     10. Assignment. The rights and obligations of the Investment Adviser under this Agreement
shall not be assigned by the Investment Adviser without (i) the prior written consent of the
Company and (ii) the prior written consent of the majority of the outstanding voting securities of
the Company; provided, however, that the Investment Adviser may assign its obligations under this
Agreement to an affiliate of the Investment Adviser without obtaining the consents specified in the
preceding clauses (i) and (ii), so long as such assignment does not constitute an “assignment”
under the Investment Company Act or the Advisers Act. Upon any such assignment, the assignee shall
execute and deliver to the Company a counterpart of this Agreement naming such assignee as
Investment Adviser. Upon the execution and delivery of such a counterpart by the assignee, the
Investment Adviser shall be released from further obligation pursuant to this Agreement, except
with respect to its obligations arising under this Agreement prior to surviving such a termination.
The Investment Adviser acknowledges and agrees that upon the closing of the Merger Transaction,
the Corporation shall automatically become a party to this Agreement and assume the rights and
obligations of the Company hereunder.

11

 

     11. Amendments of this Agreement. This Agreement may not be amended or modified except by an
instrument in writing signed by all parties hereto, but the consent of the Company must be obtained
in conformity with the requirements of the Investment Company Act.

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

     13. 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.

     14. 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.

     15. 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.

     16. 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.

     17. 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

12

 

respective parties at their respective principal executive office addresses, c/o Chief Financial
Officer.

     18. 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.

     19. Certain Matters of Construction.

     (a) The words “hereof”, “herein”, “hereunder” and words of similar import shall refer
to this Agreement as a whole and not to any particular Section or provision of this
Agreement, and reference to a particular Section of this Agreement shall include all
subsections thereof.

     (b) Definitions shall be equally applicable to both the singular and plural forms of
the terms defined, and references to the masculine, feminine or neuter gender shall
include each other gender.

     (c) The word “including” shall mean including without limitation.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the
date above written.

	 	 	 	 	 
	 	GSC INVESTMENT LLC

 	 
	 	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 	 
	 

14

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