Document:

Employment Agreement

EXHIBIT 10.1

EXECUTIVE SERVICES AGREEMENT

AGREEMENT dated as of April 30, 2010 (the “Effective Date”) by and between TV Goods Holding Corporation, a Florida corporation (“Employer” or the “Company”), and Harrington Business Development, Inc., a Florida company (“HBD”) f/s/o Kevin Harrington (“KH”).

RECITALS:

WHEREAS The Company seeks to hire KH, via HBD, as the Chairman of the Board of the Company and its Senior Executive Officer-Product Acquisition & Marketing;

WHEREAS the Company and KH desire to delineate the terms and conditions on which (i) the Company shall employ KH, (ii) KH shall render services to the Company, and (iii) the Company shall compensate KH for such services; and

WHEREAS in connection with the employment of KH by the Company, the Company desires to restrict KH's rights to compete with the business of the Company and/or any of its affiliates or joint venture partners;

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and KH agree as follows:

1.

EMPLOYMENT.

The Company hereby employs KH and KH hereby accepts employment with the Company upon the terms and conditions hereinafter set forth.

2.

TERM.

2.1.

The term of this Agreement (the "Term") shall be for a three (3) year period commencing on the Effective Date of this Agreement as set forth above, subject, however, to termination as provided herein in Sections 7 and 8 below of this Agreement.  

2.2.

KH shall formally assume the role of the Chairman of the Company and Senior Executive Officer-Product Acquisition & Marketing of the Company on the Effective Date.

Page 1 of 11

2.3.

Notwithstanding anything to the contrary contained herein, this Agreement may not be terminated by the Company during the initial eighteen (18) months following its execution and approval by the Board of Directors of the Company..

3.

POSITION, DUTIES AND RESPONSIBILITIES.

3.1.

During the Term, KH shall serve as the Chairman of the Board and Senior Executive Officer-Product Acquisition & Marketing of the Company.  KH shall report solely and directly to the Company’s  Board of Directors (the “Board”). During the Term, KH shall have such responsibilities, duties and authorities as commensurate with persons in similar capacities in similarly sized and situated companies and such other duties and responsibilities as the Board shall designate.  

3.2. 

In the performance of all of his responsibilities hereunder, KH shall be subject to all of the Company's policies, rules, and regulations.  In performing such duties, KH will be subject to and abide by all policies and procedures developed by the Board, any employee committee of the Board, or senior management of the Company.

3.3.

During the Term unless otherwise agreed by the Board, KH shall devote his full attention and expend his best efforts, energies, and skills on a full-time basis, to the business of the Company and any corporation controlled by the Company (each, a "Subsidiary").  The Company acknowledges that KH may from time to time be engaged in other business activities separate from and outside the scope of the business of the Company.  The Company agrees that the devotion of reasonable amounts of time to such other business activities will not violate the terms of this Agreement on the conditions that (i) such activities are not corporate opportunities of the Company; and (ii) such activities do not materially interfere with the performance of KH's duties hereunder.  For purposes of this Agreement, the term the "Company" shall mean the Company and all Subsidiaries.  Without violating this Agreement, KH may (i) serve in any capacity with any professional, community, industry, civic, educational or charitable organization, (ii) serve as a member of corporate boards of directors on which KH currently serves and, with the consent of the Board (which consent shall not be unreasonably withheld or delayed), other corporate boards of directors and (iii) manage his and his family's personal investments and legal affairs so long as such activities do not materially interfere with the discharge of KH's duties, constitute a corporate opportunity of the Company or create a potential business conflict or the appearance thereof.  If at any time service on any board of directors or advisory board would, in the good faith judgment of the Board, conflict with KH’s fiduciary duty to the Company or create any appearance thereof, KH shall, as soon as reasonably practicable considering any fiduciary duty to the other entity, resign from such other board of directors or advisory board after written notice of the conflict is received from the Board. Service on the boards of directors or advisory boards disclosed by KH to the Company on which he is serving as of the Effective Date are hereby approved. 

Page 2 of 11

3.5.

KH agrees to provide the services provided to the company herein, without additional compensation to any of the Company’s subsidiaries, affiliates, and joint venture entities and agrees that any amounts received from such corporation may be offset against the amounts due under this Agreement.

4.

BASE SALARY AND OTHER COMPENSATION OPPORTUNITIES.

4.1.

For all services rendered by KH under this Agreement, the Company shall pay or cause one or more of its subsidiaries to pay KH during the Term a base salary at an annual rate of not less than Twenty-Five Thousand U.S. Dollars (US$25,000.00) per month (the “Base Salary”); provided however, that upon The effectiveness of a registration statement, (which will include a certain amount of shares held by HBD), KH’s his base salary shall be reduced to ($17,500) during months 1-6 and ($20,000) in months 7-12.  The Company shall pay the Base Salary to KH in accordance with the standard practice it develops for payment of compensation to its employees but not less frequently than monthly.  KH’s Base Salary shall be subject to annual or other review by the Board (or a committee thereof) and may be increased, but not decreased, from time to time by the Board.

4.2.

At the end of the each year of employment or other date designated by the Board, provided that KH is employed by the Company at the time, KH shall have the opportunity to earn an annual cash bonus for that year to be determined by the Board, in its sole discretion based on, inter alia, its review of the Company’s and KH’s performance that year, including but not limited to the achievement of the Company’s and KH’s objectives the applicable year.  

4.3.

The performance targets, standards and other criteria will be structured after KH joins the Company and after the Board, the Chairman, KH and others have had the opportunity to determine appropriate performance factors related to the Company and KH based on a strategic review of Company priorities and other material issues. 

5.

BENEFITS

5.1.

KH shall be entitled to participate in all employee and employee benefit plans of the Company that the Company has adopted or may adopt, maintain or contribute to for the benefit of its executive employees and other employees at a level commensurate with his position subject to satisfying the applicable eligibility requirements.

5.2.

Under the employee benefit plans to be developed for the Company’s executive employees and other employees, as approved by the Board, the parties hereto anticipate that KH shall be entitled to employee benefits, including but not limited to, those pertaining to 401k, comprehensive health, major medical, and dental insurance, disability insurance, life insurance, annual comprehensive physical 

Page 3 of 11

examinations, and other paid employee benefits commensurate with persons in similar capacities in similarly sized and situated companies.

5.3.

The Company shall provide to KH all perquisites which other senior employees of the Company are generally entitled to receive and which will be subsequently and mutually agreed to by the Company and KH, in accordance with Company policy set by the Board from time to time.  

5.4.

KH shall be entitled to annual paid vacation in accordance with the Company’s policy applicable to senior employees, but in no event less than four (4) weeks per calendar year (as prorated for partial years), which vacation may be taken at such times as KH elects with due regard to the needs of the Company.  Any paid vacation time that KH does not use during a calendar year shall accrue to the next year.

5.5.

Upon submission of appropriate documentation in accordance with its policies in effect from time to time, the Company shall pay or reimburse KH for all business expenses which KH incurs in performing his duties under this Agreement, including, but not limited to, travel, entertainment, professional dues and subscriptions, and all dues, fees, and expenses associated with membership in various professional, business, and civic associations and societies in which KH participates in accordance with the Company's approval and policies in effect from time to time.

6.

RESTRICTIVE COVENANTS.

6.1.

KH acknowledges that (i) he has a major responsibility for the operation, administration, development and growth of the Company's business, (ii) the Company's business is international in scope, (iii) his work for the Company has brought him and will continue to bring him into close contact with confidential information of the Company and its customers, and (iv) the agreements and covenants contained in this Section 6 are essential to protect the business interests of the Company and that the Company will not enter into this Agreement but for such agreements and covenants.  Accordingly, KH covenants and agrees as follows:

6.1.1.

KH agrees that he shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of KH’s employment and for the benefit of the Company, either during the period of KH’s employment or at any time thereafter, any nonpublic, proprietary or confidential information, knowledge or data relating to the Company, any of its subsidiaries, affiliated companies or businesses, which shall have been obtained by KH during KH’s employment by the Company.  Included, without limitation, among such protected proprietary or confidential information are trade secrets, trade "know-how", inventions, customer lists, business plans, operational methods, pricing policies, marketing plans, sales plans, identity of suppliers or customers, sales, profits or other financial information, all of which is confidential to the Company and not generally known in the relevant trade or industry.  This subsection 6.1.1 shall not apply to information that (i) was known to the public prior to its disclosure to KH; (ii) becomes known to the public 

Page 4 of 11

subsequent to disclosure to KH through no wrongful act of KH or any representative of KH; or (iii) KH is required to disclose by applicable law, regulation or legal process (provided that KH provides the Company with prior notice of the contemplated disclosure and reasonably cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information). Notwithstanding clauses (i) and (ii) of the preceding sentence, KH’s obligation to maintain such disclosed information in confidence shall not terminate where only portions of the information are in the public domain. 

 

6.1.2 .

During KH’s employment with the Company and for the two (2) year period thereafter, KH agrees that he will not, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, knowingly solicit, aid or induce (i) any managerial level employee of the Company or any of its subsidiaries or affiliates to leave such employment in order to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company or knowingly take any action to materially assist or aid any other person, firm, corporation or other entity in identifying or hiring any such employee, or (ii) any customer of the Company or any of its subsidiaries or affiliates to purchase goods or services then sold by the Company or any of its subsidiaries or affiliates from another person, firm, corporation or other entity or assist or aid any other persons or entity in identifying or soliciting any such customer (provided, that the foregoing shall not apply to any product or service which is not covered by the noncompetition provision set forth in subsection 6.1.3 below). 

 

6.1.3.

KH acknowledges that he performs services of a unique nature for the Company that are irreplaceable, and that his performance of such services to a competing business will result in irreparable harm to the Company. Accordingly, during KH’s employment hereunder and for the two (2) year  period thereafter, KH agrees that KH will not, directly or indirectly, (i) compete with respect to any services or products of the Company which are either being offered or are being developed by the Company as of the date of termination; or (ii)  own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to any person, firm, corporation or other entity, in whatever form, engaged in any business of the same type as any business in which the Company or any of its subsidiaries or affiliates is engaged on the date of termination or in which they have proposed, on or prior to such date, to be engaged in on or after such date and in which KH has been involved to any extent at any time during the two (2) year period ending after the date of termination, in any locale of any country in which the Company conducts business. This subsection 6.1.3 shall not prevent KH from owning not more than one percent (1%) of the total shares of all classes of stock outstanding of any publicly held entity engaged in such business, nor will it restrict KH from rendering services to charitable organizations, as such term is defined in Section 501(c) of the United States Internal Revenue Code. Notwithstanding anything to the contrary contained herein, if the Company, without Cause, does not renew this Agreement at the end of any then current Term then the two (2) year period specified in Sections 6.1.2 and 6.1.3. shall be reduced 

Page 5 of 11

to six (6) months. In both cases, the Company shall continue to compensate KH at his then current levels applicable to Sections 4 & 5 durin this six month period.

 

6.1.4.

KH and the Company agrees that during the Term and for two (2) years thereafter not to make any public statements that disparage the other party, or in the case of the Company, its respective affiliates, employees, officers, directors, products or services. Notwithstanding the foregoing, statements made in the course of sworn testimony in administrative, judicial or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) shall not be subject to this subsection 6.1.4. 

 

6.1.5.

The Parties acknowledge and agree that the other party’s remedies at law for a breach or threatened breach of any of the provisions of Section 6 of the Agreement and, in recognition of this fact, the parties agree that, in the event of such a breach or threatened breach, in addition to, and not in lieu of any other rights and remedies available to the Company at law or equity, the other party, without posting any bond and without the necessity of proving damages, shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunctive or mandatory relief or any other equitable remedy which may then be available, without prejudice to any other rights and remedies which may be available at law or in equity.

 

6.1.6.

If it is determined by a court of competent jurisdiction in any state or custody that any restriction in Section 6 of this Agreement is excessive in duration or scope or is unreasonable or invalid or unenforceable under the laws of that state, it is the intention of the parties that such restriction shall not affect the remainder of the covenant or covenants which shall be given full effect, without regard to the invalid or unenforceable portions, and that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state, province, or country.

6.1.7.

The parties hereto intend to and hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts of any jurisdiction within the geographical scope of such Restrictive Covenants.  In the event that the courts of any one or more of such jurisdictions shall hold such Restrictive Covenants wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company's right of the relief provided above in the courts of any other jurisdictions within the geographical scope of such Restrictive Covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each jurisdiction being, for this purpose, severable into diverse and independent covenants

6.1.8.

The obligations contained in Section 6 of this Agreement shall survive the termination or expiration of KH’s employment with the Company and shall be fully enforceable thereafter. 

Page 6 of 11

7.

TERMINATION.

7.1.

The basic three-year term of this Agreement shall automatically be renewed on each third-year anniversary date of this Agreement, unless the Company or KH elects to terminate the Agreement on written notice 90 days prior to the expiration of the then current Term.  

7.2.

In the event that the Company terminates KH’s employment for Cause (as defined in subsection 7.3 below), as a result of KH’s death or Disability (as defined in subsection 7.5 below) or as a result of KH’s voluntary resignation (as defined in subsection 7.4 below), KH (or in the event of KH’s death, KH’s spouse, heirs or estate) shall not be entitled to any compensation after the date of termination.

7.3.

For purposes of subsection 7.2 of this Agreement, "Cause" shall exist for such termination if KH (i) is convicted  of a felony involving moral turpitude by a court of competent jurisdiction, (ii) commits any act of fraud or intentional misrepresentation intended to harm the Company, (iii) has engaged in serious misconduct, which conduct has, or would, if generally known, materially adversely affect the good will or reputation of the Company and which conduct KH has not cured or altered or begun to substantially cure or alter within thirty (30) days following written notice by the Board to KH regarding such conduct, (iv) is in material breach under this Agreement, (v) KH materially fails to perform the duties and responsibilities of his employment as set forth in Section 3 of this Agreement or as may be assigned or delegated to him from time to time by the Company, the Board, or KH Committee of the Board, or (vi) willfully or intentionally fails to materially comply with a specific, written direction of the Board, or employee Committee of the Board that is consistent with normal business practice and not inconsistent with this Agreement and KH’s responsibilities hereunder, and, with regard to grounds (iv), (v) and (vi) the Board has given KH thirty (30) days written notice of the grounds for the termination and the conduct required by KH to cure such failure, with such conduct outlined with reasonable specificity, and KH has not cured such failure, within the thirty (30) day period provided in the written notice to KH.

7.4.

For purposes of subsection 7.2 of this Agreement, a voluntary termination does not include termination initiated by KH in such circumstances as an unfavorable change in his duties and responsibilities or reporting responsibilities or a reduction in base salary proposed by the Board.  A termination of the nature described in the preceding sentence shall be considered a termination by the Board without “Cause” for purposes of this Agreement.

7.5.

For purposes of subsection 7.2 of this Agreement, “Disability” shall be defined as the inability of KH to have performed his material duties hereunder due to a physical or mental injury, infirmity or incapacity for 120 days (including weekends and holidays) in any 365-day period.  The existence or nonexistence of a physical or mental injury, infirmity or incapacity shall be determined by an independent 

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physician mutually agreed to by the Company and KH (provided that neither party shall unreasonable withhold their agreement).  

7.6.

If Company terminates KH’s employment for a reason other than for Cause, Disability, Voluntary Resignation, or Death during the Term of this Agreement, KH will be entitled to twelve months of severance pay from the termination date consisting only of KH’s base salary plus medical, health and other non-salary/non-equity benefits under the Company’s KH benefit policies for that year, payable upon termination.

8.

ASSIGNMENTS.

8.1.

The Company shall have the right to assign this Agreement to any 

successor of substantially all of its business or assets, and any such successor and KH shall be bound by all of the provisions hereof.  KH and HBD may not assign this agreement without the prior written approval of the Company. 

9.

NOTICES.

9.1.

For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered by hand, (ii) on the date of transmission, if delivered by confirmed facsimile, (iii) on the first business day following the date of deposit if delivered by guaranteed overnight delivery service, or (iv) on the fourth business day following the date delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 

 

If to KH: 

Harrington Business Development

ATTN: Kevin Harrington, CEO

(insert address)

If to the Company: 

TV Goods Holding Corporation

ATTN: Steve Rogai, CEO

14044 Icot Blvd

Clearwater, FL 33760

Fax: (727) 330-7843

With a copy to:

ATTN: Brian Pearlman, Esq

(insert address)

Page 8 of 11

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 

10.

SECTION HEADINGS.  The section headings used in this Agreement 

are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.  

11.

ENTIRE AGREEMENT.  This Agreement supersedes any and all Agreements, whether oral or written, between the parties hereto, with respect to the employment of KH by the Company and contains all of the covenants and Agreements between the parties with respect to the rendering of such services in any manner whatsoever.  Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement or promise with respect to such employment not contained in this Agreement shall be valid or binding.  Any modification of this Agreement will be effective only if it is writing and signed by the parties hereto.

12. 

SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity of unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 

13.

GOVERNING LAW.  This Agreement shall be governed by and construed pursuant to the laws of the State of Florida, without giving effect to conflicts of laws principles.

14.

BINDING NATURE.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective representatives, heirs, successors and assigns.  

15.

COUNTERPARTS.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instruments. One or more counterparts of this Agreement may be delivered by facsimile, with the intention that delivery by such means shall have the same effect as delivery of an original counterpart thereof. 

16.

ARBITRATION.  Any dispute, controversy, or claim arising out of or in connection with this Agreement, including any questions regarding its existence, validity or termination, shall be finally resolved by arbitration by the American Arbitration Association or JAMS/Endispute except as otherwise provided hereafter.  Any such dispute, controversy or claim shall be submitted to a board of arbitrators composed of three competent disinterested persons, one to be chosen by Employer, one by Employee and the third to be selected by the two arbitrators so chosen.  Such arbitration shall be conducted in English and all hearings in connection with such arbitration will take place 

Page 9 of 11

in Broward County, Florida.  The prevailing party shall be entitled to reimbursement of any and all fees of the arbitration proceedings.

The arbitrators may not award non-monetary or equitable relief of any sort.  They shall have no power to award punitive damages or any other damages not measured by the prevailing party’s actual damages, and the parties expressly waive their right to obtain such damages in arbitration or in any other forum.  In no event, even if any other portion of these provisions is held to be invalid or unenforceable, shall the arbitrators have power to make an award or impose a remedy that could not be made or imposed by a court deciding the matter in the same jurisdiction.

No discovery will be permitted in connection with the arbitration unless it is expressly authorized by the arbitration panel upon a showing of substantial need by the party seeking discovery.

All aspects of the arbitration shall be treated as confidential.  Neither the parties nor the arbitrators may disclose the existence, content or results of the arbitration, except as necessary to comply with legal or regulatory requirements.  Before making any such disclosure, a party shall give written notice to all other parties and shall afford such parties a reasonable opportunity to protect their interests.

The result of the arbitration will be binding on the parties, and judgment on the arbitrators’ award may be entered in any court having jurisdiction.

17.

INDEMNIFICATION.  The Company hereby agrees to indemnify KH  and HBD and hold them harmless to the fullest extent permitted by applicable law against and in respect to any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable attorney’s fees), losses, and damages resulting from KH’s good faith performance of his duties and obligations with the Company during the Term hereof. In connection with the litigation or other matters subject to this section 17, KH shall have the right to choose his own counsel, whose reasonable fees and expenses in connection with such litigation shall be paid by the Company. This provision is in addition to any other rights of indemnification KH may have.The Company will use its best efforts to have D&O insurance in place within 30 days after the execution of this Agreement, which shall, by its terms, include coverage for KH for the servicesprovided hereunder.

18.

LIABILITY INSURANCE.  The Company shall cover KH under directors and officers liability insurance both during and, while potential liability exists, after the term of this Agreement in the same amount and to the same extent as the Company covers its other officers and directors. 

19.

WAIVER.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by KH and such officer or director as may be designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or 

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compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 

20.

REPRESENTATIONS. 

 

20.1.

The Company represents and warrants to KH that the 

execution of this Agreement and the provision of all benefits and grants provided herein have been duly authorized by the Company, including action of the Board and Compensation Committee and, upon the execution and delivery of this Agreement by KH, this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). 

 

20.2.

KH represents and warrants to the Company that he has the 

legal right to enter into this Agreement and to perform all of the obligations on his part to be performed hereunder in accordance with its terms and that he is not a party to any agreement or understanding, written or oral, which could prevent him from entering into this Agreement or performing all of his obligations hereunder. 

THE UNDERSIGNEDS HAVE READ THE FOREGOING AGREEMENT, HAVE HAD THE OPPORTUNITY TO SEEK INDEPENDENT LEGAL COUNSEL, FULLY UNDERSTAND IT, AND, HAVE VOLUNTARILY EXECUTED IT ON THE DATE AND YEAR FIRST ABOVE WRITTEN.

						
	TV Goods Holding Corporation

	 
	 
	     

	 
	 

	BY:

	/s/ Steve Rogai

	 
	Dated:

	April 30, 2010

	 
	Steve Rogai, CEO

	 
	 
	 

	 
	 
	 
	 
	 

	Harrington Business Development, Inc

	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	BY:

	/s/ Kevin Harrington

	 
	Dated:

	April 30, 2010

	 
	Kevin Harrington, CEO

	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Kevin Harrington

	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	BY:

	April 30, 2010

	 
	Dated:

	April 30, 2010

	 
	/s/ Kevin Harrington

	 
	 
	 

Page 11 of 11Exhibit 10.1

      

      

      

      

      

      

      

      

      

      

      

      STOCK
PURCHASE AGREEMENT

      

      

      

      by and
among

      

      

      GSC
INVESTMENT CORP.,

      

      

      SARATOGA
INVESTMENT ADVISORS, LLC

      

      

      and

      

      

      CLO
PARTNERS LLC

      

      

      dated as
of

      

      

      April 14,
2010

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      TABLE
OF CONTENTS

      
        
          

        

      

       

      PAGE

      

      ARTICLE
1

      DEFINITIONS

       

      
        	
                Section
      1.01. Certain Defined
      Terms

              	
                2

              
	
                Section
      1.02. Index of Other
      Defined Terms

              	
                9

              
	
                Section
      1.03. Other Definitional
      and Interpretative Provisions

              	
                10

              
	 
      	 
      
	
                ARTICLE
      2

              
	
                AGREEMENT TO PURCHASE AND SELL STOCK AND TAKE OTHER ACTIONS

              
	 
      	 
      
	
                Section
      2.01. Agreement to
      Purchase and Sell

              	
                11

              
	
                Section
      2.02. Replacement
      Financing and Other Actions

              	
                11

              
	
                Section
      2.03. Repayment of
      Indebtedness

              	
                12

              
	 
      	 
      
	
                ARTICLE
      3

              
	
                RESTRICTIONS ON TRANSFER

              
	 
      	 
      
	
                Section
      3.01. General
      Restrictions on Transfer

              	
                12

              
	
                Section
      3.02. Permitted
      Transferees

              	
                12

              
	
                Section
      3.03. Restrictions on
      Transfers by the Investors

              	
                12

              
	
                Section
      3.04. Notice of
      Transfers

              	
                13

              
	 
      	 
      
	
                ARTICLE
      4

              
	
                CLOSING; DELIVERY

              
	 
      	 
      
	
                Section
      4.01. The
      Closing

              	
                13

              
	
                Section
      4.02. Delivery and Other
      Actions

              	
                13

              
	 
      	 
      
	
                ARTICLE
      5

              
	
                REPRESENTATIONS AND WARRANTIES OF THE COMPANY

              
	 
      	 
      
	
                Section
      5.01. Corporate
      Existence and Power

              	
                13

              
	
                Section
      5.02. Corporate
      Authorization

              	
                14

              
	
                Section
      5.03. Governmental
      Authorization

              	
                14

              
	
                Section
      5.04.
      Non-contravention

              	
                15

              
	
                Section
      5.05.
      Capitalization

              	
                15

              
	
                Section
      5.06.
      Subsidiaries

              	
                16

              
	
                Section
      5.07. SEC Filings and
      the Sarbanes-Oxley Act

              	
                16

              
	
                Section
      5.08. Financial
      Statements

              	
                18

              
	
                Section
      5.09. Disclosure
      Documents

              	
                18

              
	
                Section
      5.10. Absence of Certain
      Changes

              	
                18

              

      

      

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

       

      
        	
                Section
      5.11. No Undisclosed
      Material Liabilities

              	
                19

              
	
                Section
      5.12. Compliance With
      Laws and Court Orders

              	
                19

              
	
                Section
      5.13.
      Litigation

              	
                20

              
	
                Section
      5.14. Material
      Contracts

              	
                20

              
	
                Section
      5.15. Intellectual
      Property

              	
                21

              
	
                Section
      5.16.
      Taxes

              	
                21

              
	
                Section
      5.17. Related Party
      Transactions

              	
                24

              
	
                Section
      5.18. Registered
      Investment Company Status

              	
                24

              
	
                Section
      5.19. Anti-money
      Laundering

              	
                25

              
	
                Section
      5.20. Finders’
      Fees

              	
                25

              
	
                Section
      5.21. Opinion of
      Financial Advisor

              	
                25

              
	
                Section
      5.22. Rights Agreement;
      Takeover Statutes

              	
                25

              
	
                Section
      5.23. Environmental
      Matters

              	
                25

              
	
                Section
      5.24.
      Insurance

              	
                26

              
	
                Section
      5.25. Investment
      Securities

              	
                26

              
	
                Section
      5.26. CDO and CLO
      Activities

              	
                26

              
	
                Section
      5.27. No Additional
      Representations

              	
                29

              
	 
      	 
      
	
                ARTICLE
      6

              
	
                REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

              
	 
      	 
      
	
                Section
      6.01. Corporate
      Existence; Power and Authority; Enforceability

              	
                30

              
	
                Section
      6.02. Governmental
      Authorization

              	
                30

              
	
                Section
      6.03.
      Non-contravention

              	
                30

              
	
                Section
      6.04. Compliance with
      Laws and Court Orders

              	
                31

              
	
                Section
      6.05. Financing

              	
                31

              
	
                Section
      6.06.
      Litigation

              	
                31

              
	
                Section
      6.07. Purchase for Own
      Account

              	
                32

              
	
                Section
      6.08. Accredited
      Investor

              	
                32

              
	
                Section
      6.09. Exempt from
      Registration; Restricted Securities

              	
                32

              
	
                Section
      6.10. Restrictive
      Legends

              	
                32

              
	
                Section
      6.11. Removal of
      Restrictive Legend

              	
                33

              
	
                Section
      6.12. Money Laundering
      Laws

              	
                33

              
	
                Section
      6.13. Disclosure
      Documents

              	
                33

              
	
                Section
      6.14. Investment Adviser
      and Administrator

              	
                33

              
	
                Section
      6.15. Finders’
      Fees

              	
                34

              
	
                Section
      6.16. No Additional
      Representations

              	
                34

              
	 
      	 
      
	
                ARTICLE
      7

              
	
                COVENANTS OF THE COMPANY

              
	 
      	 
      
	
                Section
      7.01. Conduct of the
      Company

              	
                34

              
	
                Section
      7.02. Company
      Stockholder Meeting

              	
                36

              
	
                Section
      7.03. No Solicitation;
      Other Offers

              	
                36

              
	
                Section
      7.04. Tax
      Matters

              	
                38

              

      

      

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

       

      
        	
                Section
      7.05. Stock Split and
      Ticker Symbol Change

              	
                39

              
	 
      	 
      
	
                ARTICLE
      8

              
	
                COVENANTS OF THE INVESTORS

              
	 
      	 
      
	
                Section
      8.01. Voting of
      Shares

              	
                39

              
	
                Section
      8.02. Amendment of
      Saratoga Commitment Letter

              	
                39

              
	
                Section
      8.03. Transfer of Shares
      to Permitted Transferees

              	
                39

              
	 
      	 
      
	
                ARTICLE
      9

              
	
                COVENANTS OF THE INVESTORS AND THE COMPANY

              
	 
      	 
      
	
                Section
      9.01. Reasonable Best
      Efforts

              	
                40

              
	
                Section
      9.02. Proxy
      Statement

              	
                40

              
	
                Section
      9.03. Public
      Announcements

              	
                41

              
	
                Section
      9.04. Access to
      Information

              	
                42

              
	
                Section
      9.05. Notices of Certain
      Events

              	
                42

              
	
                Section
      9.06. Director and
      Officer Liability

              	
                43

              
	
                Section
      9.07.
      Confidentiality

              	
                43

              
	
                Section
      9.08. Takeover
      Statutes

              	
                44

              
	 
      	 
      
	
                ARTICLE
      10

              
	
                CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

              
	 
      	 
      
	
                Section
      10.01. Conditions to the
      Obligations of Each Party

              	
                44

              
	
                Section
      10.02. Conditions to the
      Obligations of the Investors

              	
                45

              
	
                Section
      10.03. Conditions to the
      Obligations of the Company

              	
                46

              
	 
      	 
      
	
                ARTICLE
      11

              
	
                TERMINATION

              
	 
      	 
      
	
                Section
      11.01.
      Termination

              	
                47

              
	
                Section
      11.02. Effect of
      Termination

              	
                48

              
	
                Section
      11.03. Termination Fees
      and Expense Reimbursement

              	
                49

              
	 
      	 
      
	
                ARTICLE
      12

              
	
                MISCELLANEOUS

              
	 
      	 
      
	
                Section
      12.01.
      Notices

              	
                51

              
	
                Section
      12.02. Survival of
      Representations and Warranties

              	
                52

              
	
                Section
      12.03. Amendments and
      Waivers

              	
                52

              
	
                Section
      12.04.
      Expenses

              	
                52

              
	
                Section
      12.05. Disclosure
      Schedule and SEC Document References

              	
                52

              
	
                Section
      12.06. Binding Effect;
      Benefit; Assignment

              	
                53

              
	
                Section
      12.07. Governing
      Law

              	
                53

              
	
                Section
      12.08. Submission to
      Jurisdiction; Selection of Forum

              	
                53

              

      

      

      
        
           

        

        
          iii

          
            

          

        

        
           

        

         

      

      
        
          	
                  Section
      12.09. Waiver of Jury
      Trial

                	
                  54

                
	
                  Section
      12.10. Counterparts;
      Effectiveness

                	
                  54

                
	
                  Section
      12.11. Entire
      Agreement

                	
                  54

                
	
                  Section
      12.12.
      Severability

                	
                  54

                
	
                  Section
      12.13. Specific
      Performance

                	
                  54

                

        

      

      

      EXHIBITS & SCHEDULES

      

      
        	
                Exhibit
      A

              	
                Termination
      and Release Agreement

              
	
                Exhibit
      B

                Exhibit
      C

                Exhibit
      D

              	
                Replacement
      Advisory Agreement

                Replacement
      Administration Agreement

                Assignment,
      Assumption and Novation Agreement; Commitment Letter; and
      Replacement Facility

              
	
                Exhibit
      E

                Exhibit
      F

              	
                Voting
      and Support Agreement

                Registration
      Rights Agreement

              
	
                Exhibit
      G

                Exhibit
      H

                Exhibit
      I

              	
                Joinder
      Agreement

                Saratoga
      Commitment Letter

                License
      Agreement

              

      

      

      Schedule
I    Schedule of Certain Permitted Transferees

      

      
        
           

        

        
          iv

          
            

          

        

        
           

        

      

       

      STOCK
PURCHASE AGREEMENT

      

      This
Stock Purchase Agreement (the “Agreement”) is entered into as
of April 14, 2010 by and among GSC INVESTMENT CORP., a Maryland corporation (the
“Company”), SARATOGA
INVESTMENT ADVISORS, LLC, a Delaware limited liability company (“Saratoga”), and CLO Partners
LLC, a Delaware limited liability company (“CLO Partners” and, together
with Saratoga, each an “Investor” and collectively,
the “Investors”).

      

      WHEREAS,
the Board of Directors of the Company (the “Board”) has approved this
Agreement and recommended that the stockholders of the Company approve (i) the
issuance and sale by the Company to the Investors, in a private transaction that
is exempt from registration under Section 4(2) of the 1933 Act (as defined
herein) and Regulation D thereunder, of up to $15,000,000 in aggregate purchase
price of the Company’s common stock on the terms and subject to the conditions
set forth in this Agreement and (ii) the other transactions contemplated
hereby;

      

      WHEREAS,
as a condition to the consummation of the Investment (as defined herein) and
subject to the terms and conditions herein, GSCP (NJ), L.P., a Delaware limited
partnership (the “Company
Adviser”), desires to withdraw, effective as of the Closing (as defined
herein), as the Company’s investment adviser and administrator pursuant to the
Termination and Release Agreement in the form attached hereto as Exhibit A and the
Company desires to retain Saratoga to be the Company’s new investment adviser
and administrator;

      

      WHEREAS,
the Board has approved the termination of the Company Management Agreements (as
defined herein) and approved the investment advisory and management agreement
between the Company and Saratoga in the form attached hereto as Exhibit B (the “Replacement Advisory
Agreement”) and the administration agreement between the Company and
Saratoga Administrator LLC in the form attached hereto as Exhibit C (the “
Replacement Administration Agreement” and,
collectively with the Replacement Advisory Agreement, the “Replacement Management
Agreements”) and the Board has recommended that the stockholders of the
Company approve the Replacement Advisory Agreement;

      

      WHEREAS,
the Company desires to sell to the Investors, and the Investors desire to
purchase from the Company, all of the Shares (as defined herein), and the
parties desire to make certain representations, warranties, covenants and
agreements in connection with this Agreement and the transactions contemplated
hereby, and to prescribe certain conditions with respect to the consummation of
the Investment and the other transactions contemplated by this
Agreement;

      

      WHEREAS,
(i) contemporaneously herewith, the Company is entering into an assignment,
assumption and novation agreement, in the form attached hereto as Exhibit D-1 (the
“Assignment Agreement”),
with the Replacement Lender (as defined herein) and an Affiliate (as defined
herein) of Saratoga, pursuant to which the Affiliate of Saratoga is assigning
the commitment letter agreement and fee letter agreement, each of which is dated
as of April 14, 2010 and issued and executed by the Replacement Lender and
attached hereto as part of Exhibit D-2 (collectively,
the “Commitment
Letter”), to the Company and the Company is assuming all

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      of the
rights and obligations of the Affiliate of Saratoga under the Commitment Letter,
except as expressly provided in the Assignment Agreement, (ii) as of the
Closing, the Company or a Subsidiary of the Company shall, subject to the
satisfaction of the conditions to the Closing set forth herein and the closing
set forth therein, enter into the Replacement Facility (as defined herein) with
the Replacement Lender substantially in the form attached hereto as Exhibit D-3, and
(iii) as of, and as a condition to, the Closing hereunder the proceeds of the
Investment and a portion of the funds available under the Replacement Facility
will be used by the Company to repay all amounts outstanding under the Company
Securitization Documents (as defined herein); and

      

      WHEREAS,
contemporaneously herewith, an Affiliate of Saratoga is entering into a voting
and support agreement with GSCP (NJ), L.P., its Affiliates and their senior
employees and each of the members of the Board, substantially in the form
attached hereto as Exhibit E and
pursuant to which GSCP (NJ), L.P., its Affiliates and their senior employees and
each of the members of the Board, are agreeing to vote any shares of Common
Stock (as defined herein) held by them in favor of the Company Stockholder
Proposals (as defined herein) at the Company Stockholder Meeting (as defined
herein).

      

      NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants, conditions and agreements contained herein, the parties
hereto agree as follows:

      

      

      ARTICLE
1

      DEFINITIONS

      

      Section
1.01. Certain Defined
Terms. As used in this Agreement, the following terms shall have the
following respective meanings:

      

      “Acquisition Proposal” means,
other than the transactions contemplated by this Agreement, any Third Party
offer, proposal or inquiry relating to, or any Third Party indication of
interest in, (i) any acquisition or purchase, direct or indirect, of 10% or more
of the consolidated assets of the Company or 10% or more of any class of equity
or voting securities of the Company, (ii) any tender offer or exchange offer
that, if consummated, would result in such Third Party beneficially owning 10%
or more of any class of equity or voting securities of the Company, (iii) a
merger, consolidation, share exchange, business combination, sale of all or
substantially all of the assets, reorganization, recapitalization, liquidation,
dissolution or other similar transaction involving the Company or (iv) any other
transaction (including without limitation a refinancing of the amounts
outstanding under the Company Securitization Documents) the consummation of
which could reasonably be expected to impede, interfere with, prevent or
materially delay the Investment or that could reasonably be expected to dilute
materially the benefits to the Investors of the transactions contemplated
hereby.

      

      “Advisers Act” means the
Investment Advisers Act of 1940.

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      “Affiliate” means, with respect
to any Person, any other Person directly or indirectly controlling, controlled
by, or under common control with such Person.

      

      “Applicable Law” means, with
respect to any Person, any federal, state or local law (statutory, common or
otherwise), constitution, treaty, convention, ordinance, code, rule, regulation,
order, injunction, judgment, decree, ruling or other similar requirement
enacted, adopted, promulgated or applied by a Governmental Authority that is
binding upon or applicable to such Person, as amended unless expressly specified
otherwise.

      

      “Business Day” means a day,
other than Saturday, Sunday or other day on which commercial banks in New York,
New York are authorized or required by Applicable Law to close.

      

      “CLO Agreements” means,
collectively, each contract relating to the operation of the Funds to which the
Company, its Subsidiary, any Affiliate of the Company or any Fund is a party,
including without limitation any Collateral Management Agreement, indenture,
subordinated note paying agency agreement, preferred share paying agency
agreement, warehouse agreement, indemnity agreement, collateral administration
agreement or collateral acquisition agreement in effect on the date of this
Agreement.

      

      “Code” means the Internal
Revenue Code of 1986.

      

      “Collateral Management
Agreements” means, collectively, the collateral management, investment
advisory, limited partnership, limited liability or similar agreement pursuant
to which the Company or any Subsidiary acts as collateral manager (or the
equivalent thereof) to any Fund.

      

      “Common Stock” shall mean the
Company’s common stock, par value $0.0001 per share.

      

      “Company Balance Sheet” means
the consolidated balance sheet of the Company as of November 30, 2009 and the
notes thereto set forth in the Company 10-Q.

      

      “Company Balance Sheet Date”
means November 30, 2009.

      

      “Company Disclosure Schedule”
means the disclosure schedule dated as of the date hereof regarding this
Agreement that has been provided by the Company to the Investors and delivered
contemporaneously herewith.

      

      “Company Management Agreements”
means the Investment Advisory and Management Agreement dated as of March 21,
2007 between GSCP (NJ), L.P. and the Company and the Administration Agreement
dated as of March 21, 2007 between GSCP (NJ), L.P. and the Company.

      

      “Company Securitization
Documents” means the Credit Agreement dated as of April 11, 2007 among
the Company, GSC Sub, GSCP (NJ), L.P., the financial institutions from time to
time party thereto, the commercial paper lenders from time to time party thereto
and Lender,

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      together
with the following agreements and arrangements entered into in connection
therewith: (i) Amendment No. 1 to Credit Agreement, dated as of May 1, 2007,
entered into by and among the Company, GSC Sub and Lender, (ii) Amendment No. 2
to Credit Agreement, dated as of October 3, 2007, entered into by and among the
Company, GSC Sub and Lender, (iii) Amendment No. 3 to Credit Agreement, dated as
of August 8, 2008, entered into by and among the Company, GSC Sub and Lender,
(iv) Amendment No. 4 to Credit Agreement, dated as of September 8, 2008, entered
into by and among the Company, GSC Sub and Lender and (v) Amendment No. 5 to
Credit Agreement, dated as of March 23, 2009, entered into by and among the
Company, GSC Sub, GSCP (NJ), L.P., Lender and U.S. Bank National Association, as
Trustee and Backup Servicer.

      

      “Company 10-K” means the
Company’s annual report on Form 10-K, as amended by Form 10-K/A filed with the
SEC on July 9, 2009, for the fiscal year ended February 28, 2009.

      

      “Company 10-Q” means the
Company’s quarterly report on Form 10-Q filed on January 14, 2010, for the
fiscal quarter ended November 30, 2009.

      

      “Confidentiality Agreement”
means the confidentiality agreement dated December 11, 2009 between the Company
and an Affiliate of Saratoga.

      

      “Contract” means all contracts,
agreements, arrangements, understandings, guarantees, mortgages, indentures,
leases or licenses.

      

      “Funds” means, collectively,
GSC CLO and any other investment vehicle for which the Company or an Subsidiary
acts as collateral manager, collateral administrator, asset manager, investment
adviser or in any similar capacity.

      

      “GAAP” means generally accepted
accounting principles in the United States.

      

      “Governmental Authority” means
any transnational, domestic or foreign federal, state or local governmental,
regulatory (including stock exchanges), self-regulatory or administrative
authority, department, court, commission, arbitral authority, agency, official,
or any other governmental body, including any political subdivision
thereof.

      

      “Governmental Authorization”
means any approval, consent, license, permit, waiver, or other authorization
issued, granted, given, or otherwise made available by or under the authority of
any Governmental Authority or pursuant to any Applicable Law.

      

      “GSC CLO” means GSC Investment
Corp. CLO 2007, Ltd., a Cayman Islands exempted company.

      

      “GSCIC Collateral Management
Agreement” means that certain Collateral Management Agreement dated as of
January 22, 2008 by and between GSC CLO and the Company.

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      “Intellectual Property” means
(i) trademarks, trade names, service marks, brand names, certification marks,
trade dress, domain names and other indications of origin, the goodwill
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application, (ii)
inventions and discoveries, whether patentable or not, in any jurisdiction,
patents, applications for patents (including divisions, continuations,
continuations in part and renewal applications), and any renewals, extensions or
reissues thereof, in any jurisdiction, (iii) Trade Secrets, (iv) writings and
other works, whether copyrightable or not, in any jurisdiction, and any and all
copyright rights, whether registered or not, and registrations or applications
for registration of copyrights in any jurisdiction, and any renewals or
extensions thereof, (v) moral rights, database rights, design rights, industrial
property rights, publicity rights and privacy rights, (vi) licenses and
approvals, and (vii) any similar intellectual property or proprietary
rights.

      

      “Investment Company Act” means
the Investment Company Act of 1940.

      

      “IT Assets” means computers,
computer software, firmware, middleware, servers, workstations, routers, hubs,
switches, data communications lines and all other information technology
equipment, and all associated documentation owned by any Person or licensed or
leased by any Person or its Subsidiaries pursuant to written agreement
(excluding any public networks).

      

      “knowledge” of any Person that
is not an individual means the knowledge of such Person’s officers and directors
and the officers and directors of such Person’s investment adviser, in each case
including the knowledge that would have been gained after reasonable
inquiry.

      

      “Lender” means Deutsche Bank
AG, New York Branch.

      

      “Lien” means, with respect to
any property or asset, any mortgage, lien, pledge, charge, security interest,
encumbrance, option, right of first refusal, right of first offer, license or
other adverse claim of any kind in respect of such property or asset. For
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any property or asset that it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such property or asset.

      

      “Maryland Law” means the
Maryland General Corporation Law.

      

      “Material Adverse Effect” means
(a) with respect to any Person, a material adverse effect on the condition
(financial or otherwise), business, assets, liabilities or results of operations
of such Person and its Subsidiaries, taken as a whole, excluding any effect
resulting from (i) changes in the financial or securities markets or general
economic or political conditions in the United States not having a materially
disproportionate effect on such Person and its Subsidiaries, taken as a whole,
relative to other participants in the industry in which such Person and its
Subsidiaries operate, (ii) changes (including changes of Applicable Law) or
conditions generally affecting the industry in which such Person and its
Subsidiaries operate and not

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      specifically
relating to or having a materially disproportionate effect on such Person and
its Subsidiaries, taken as a whole, (iii) any current, ongoing or future events
of default under the Company Securitization Documents resulting from any
downgrades, defaults, further deterioration of the Company’s investment
portfolio or other events (it being understood, however, that this clause (iii)
shall not prevent a party from asserting that the events underlying such events
of default (including any payment default on collateral pledged under the
Company Securitization Documents, downgrade, further deterioration of the
Company’s investment portfolio or other event) independently constitutes or
contributes to a Material Adverse Effect) and, subject in all cases to clause
(b) below, the actions taken by the Lender with respect to such events of
default, (iv) acts of war, sabotage or terrorism or natural disasters involving
the United States of America not having a materially disproportionate effect on
such Person and its Subsidiaries, taken as a whole, relative to other
participants in the industry in which such Person and its Subsidiaries operate,
(v) the announcement or consummation of the transactions contemplated by this
Agreement or the taking of any actions required to be taken under this Agreement
relating to the consummation thereof, or (vi) any failure by such Person and its
Subsidiaries to meet any internal or published budgets, projections, forecasts
or predictions of financial performance for any period (it being understood that
this clause (vi) shall not prevent a party from asserting that any fact, change,
event, occurrence or effect that may have contributed to such failure
independently constitutes or contributes to a Material Adverse Effect), and (b)
with respect to the Company, in addition to the matters set forth in the
foregoing clause (a), (i) the Lender foreclosing upon, taking possession of,
selling, taking over servicing rights or otherwise exercising any material
remedy of a similar nature and effect under the Company Securitization Documents
with respect to the collateral securing the Company’s and its Subsidiary’s
obligations under the Company Securitization Documents, or (ii) the occurrence
of any event constituting “Cause” under the GSCIC Collateral Management
Agreement or any notice delivered under Section 12(c) of the GSCIC Collateral
Management Agreement with respect to the removal of the Company as Collateral
Manager thereunder.

      

      “Noteholders” means,
collectively, any holder of a note or other debt instrument issued by a
Fund.

      

      “NYSE” means the New York Stock
Exchange, Inc.

      

      “Organizational Documents”
means, with respect to a Person other than a natural person, (i) the charter,
articles or certificate of incorporation and the bylaws of a corporation; (ii)
the certificate of formation and operating agreement of a limited liability
company, (iii) the partnership agreement and any statement of partnership of a
general partnership; (iv) the limited partnership agreement and the certificate
of limited partnership of a limited partnership; (v) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of any other Person; and (vi) any amendment to any of the
foregoing.

      

      “Preferred Shareholders” means,
collectively, any holder of a preferred share or other equity interest issued by
a Fund.

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      “Permitted Liens” means Liens
(i) for Taxes or other governmental charges not yet due and payable; (ii)
carriers, warehousemen, mechanics, laborers or other similar Liens created by
statute and incurred in the ordinary course of business for sums not yet due;
and (iii) Liens involving restrictions on transfer arising under federal or
state securities laws.

      

      “Permitted Transferee”
means

      

      (a) any
Affiliate, including those Persons listed on Schedule I hereto;
provided that a
Transfer to, and the subsequent ownership of the Shares by, such Affiliate is in
compliance with the requirements of the Investment Company Act;

      

      (b) in the
case of any Permitted Transferee that is a natural person, (i) any other
Permitted Transferee that is a natural person, (ii) a Person to whom Shares are
Transferred from such Permitted Transferee (A) by will or the laws of descent
and distribution or (B) by gift without consideration of any kind; provided that, in the case of
clause (B), such transferee is the spouse or the lineal descendant, sibling,
parent, heir, executor, administrator, testamentary trustee, legatee or
beneficiary of such Permitted Transferee, or (iii) a trust that is for the
exclusive benefit of such Permitted Transferee or its Permitted Transferees
under (ii) above; and

      

      (c) any other
Person with respect to which the Board shall have adopted a resolution (which
shall have been approved by a majority of the independent directors of the
Board) stating that the Board has no objection if a Transfer of Shares is made
to such Person.

      

      “Person” means an individual,
corporation, partnership, limited liability company, association, trust, sole
proprietorship, unincorporated organization, other entity, organization, group
(as defined in Section 13(d) of the 1934 Act), or any other business entity or
any Governmental Authority, including a government or political subdivision or
an agency or instrumentality thereof.

      

      “Proceeding” means any action,
arbitration, audit, hearing, investigation, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental
Authority or arbitrator.

      

      “Sarbanes-Oxley Act” means the
Sarbanes-Oxley Act of 2002.

      

      “SEC” means the Securities and
Exchange Commission.

      

      “Subsidiary” means, with
respect to any Person, any corporation, partnership, limited liability company,
joint venture or other entity in which such Person (a) owns, directly or
indirectly, more than fifty percent (50%) of the outstanding voting power,
equity securities, profits interest or capital interest, (b) is entitled to
elect at least a majority of the board of directors, the board of trustees, the
board of managers or other persons performing similar

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      functions
or (c) in the case of a limited partnership, limited liability company or joint
venture, is a general partner, managing member or joint venturer,
respectively.

      

      “Superior Proposal ” means a
bona fide, unsolicited
written Acquisition Proposal that (a) relates to (i) any acquisition or
purchase, direct or indirect, of 35% or more of the consolidated assets of the
Company or 35% or more of any class of equity or voting securities of the
Company, (ii) any
tender offer or exchange offer that, if consummated, would result in such Third
Party beneficially owning 35% or more of any class of equity or voting
securities of the Company, or (iii) a merger,
consolidation, share exchange, business combination, sale of all or
substantially all of the assets, reorganization, recapitalization, liquidation,
dissolution or other similar transaction involving the Company, (b) is legally
binding on the Third Party but not on the Company; (c) is fully financed,
includes an obligation to pay in full all amounts outstanding under the Company
Securitization Documents and contains no financing contingency or obligation to
obtain consent from a lender or equity source (other than any consents of the
Lender required in connection with the Company Securitization Documents); (d)
contains no condition to closing materially more burdensome on the Company, or,
in the reasonable and good faith judgment of the Board, by a majority vote
(after consultation with a financial advisor of nationally recognized reputation
and outside legal counsel), making it less likely that the conditions to the
closing of such transaction would be satisfied than, the conditions to Closing
set forth herein (with, for the avoidance of doubt, a condition for a vote of
the Third Party’s equityholders on any matter being materially more burdensome
and making it materially less likely that all conditions to such Acquisition
Proposal will be satisfied); (e) which is otherwise on terms which the Board
determines in its reasonable good faith judgment (after consultation with its
financial advisor of nationally recognized reputation and outside legal
counsel), taking into account, among other things, all legal, financial,
regulatory and other aspects of the Acquisition Proposal and the Third Party
making the Acquisition Proposal, as well as any termination fees, expense
reimbursement provisions, limitations on tax benefits, conditions to
consummation and related matters, that the Acquisition Proposal, (A) if
consummated would result in a transaction that is more favorable, from a
financial point of view, to the Company and its stockholders than the
transactions contemplated hereby and (B) is reasonably certain of being
completed.

      

      “Third Party” means any Person,
including as defined in Section 13(d) of the 1934 Act, other than any Investor,
the Company or any of their respective Affiliates (including, for the avoidance
of doubt, GSC Group and any Affiliates thereof).

      

      “Trade Secrets” means trade
secrets and confidential information and rights in any jurisdiction to limit the
use or disclosure thereof by any Person.

      

      “Transfer” means, with respect
to any Shares, (i) when used as a verb, to sell, assign, dispose of, exchange,
pledge, encumber, hypothecate or otherwise transfer such Shares or any economic
participation or interest therein, whether directly or indirectly, or agree or
commit to do any of the foregoing and (ii) when used as a noun, a direct or
indirect sale, assignment, disposition, exchange, pledge, encumbrance,
hypothecation or other transfer of such Shares or any participation or interest
therein or any agreement or commitment to do any of the foregoing.

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      “1933 Act” means the Securities
Act of 1933.

      

      “1934 Act” means the Securities
Exchange Act of 1934.

      

      Section
1.02. Index of Other Defined
Terms. In addition to the terms defined above, the following terms shall
have the respective meanings given thereto in the sections indicated
below:

       

      
        
          	
                  
                    Defined
      Term

                  

                	 	
                  
                    Section

                  

                
	
                  “Adverse
      Recommendation
      Change”                                                                                           

                	 	
                  7.03(a)

                
	
                  “Agreement”                                                                                           

                	 	
                  Preamble

                
	
                  “Assignment
      Agreement”                                                                                           

                	 	
                  Recitals

                
	
                  “BDC
      Election”                                                                                           

                	 	
                  5.18(b)

                
	
                  “Board”                                                                                           

                	 	
                  Recitals

                
	
                  “Change
      of Recommendation
      Notice”                                                                                           

                	 	
                  7.03(c)

                
	
                  “Chosen
      Courts”                                                                                           

                	 	
                  12.08(a)

                
	
                  “CLO
      Partners”                                                                                           

                	 	
                  Preamble

                
	
                  “Closing”                                                                                           

                	 	
                  4.01

                
	
                  “Commitment
      Letter”                                                                                           

                	 	
                  Recitals

                
	
                  “Company”                                                                                           

                	 	
                  Preamble

                
	
                  “Company
      Adviser”                                                                                           

                	 	
                  Recitals

                
	
                  “Company
      Board
      Recommendation”                                                                                           

                	 	
                  5.02(b)

                
	
                  “Company
      Financial
      Advisor”                                                                                           

                	 	
                  5.20

                
	
                  “Company
      SEC
      Documents”                                                                                           

                	 	
                  5.07(a)

                
	
                  “Company
      Securities”                                                                                           

                	 	
                  5.05(b)

                
	
                  “Company
      Stockholder
      Approvals”                                                                                           

                	 	
                  7.02

                
	
                  “Company
      Stockholder
      Meeting”                                                                                           

                	 	
                  7.02

                
	
                  “Company
      Stockholder
      Proposals”                                                                                           

                	 	
                  7.02

                
	
                  “Definitive
      Proxy
      Statement”                                                                                           

                	 	
                  9.02(a)

                
	
                  “End
      Date”                                                                                           

                	 	
                  11.01(b)

                
	
                  “Entity”                                                                                           

                	 	
                  6.07

                
	
                  “Expense
      Reimbursement”                                                                                           

                	 	
                  11.03(c)

                
	
                  “Fee-Sharing
      Arrangements”                                                                                           

                	 	
                  5.26(e)

                
	
                  “GSC
      Sub”                                                                                           

                	 	
                  5.06

                
	
                  “Indemnified
      Person”                                                                                           

                	 	
                  9.06

                
	
                  “Investment”                                                                                           

                	 	
                  2.01

                
	
                  “Investor”                                                                                           

                	 	
                  Preamble

                
	
                  “License
      Agreement”                                                                                           

                	 	
                  2.02

                
	
                  “Loan
      Repayment”                                                                                           

                	 	
                  2.03

                

           

          
            
               

            

            
              9

              
                

              

            

            
               

            

             

          

          
            	Defined
      Term	 	
                    Section

                  
	
                    “Make-Whole
      Payment”                                                                                           

                  	 	
                    11.03(d)

                  
	
                    “Money
      Laundering
      Laws”                                                                                           

                  	 	
                    6.12

                  
	
                    “No
      Vote Expense
      Reimbursement”                                                                                           

                  	 	
                    11.03(b)

                  
	
                    “NYSE
      Rules”                                                                                           

                  	 	
                    5.07(i)

                  
	
                    “Preliminary
      Proxy
      Statement”                                                                                           

                  	 	
                    9.02(a)

                  
	
                    “Proxy
      Statement”                                                                                           

                  	 	
                    5.09

                  
	
                    “Registration
      Rights
      Agreement”                                                                                           

                  	 	
                    2.02

                  
	
                    “Replacement
      Administration
      Agreement”                                                                                           

                  	 	
                    Recitals

                  
	
                    “Replacement
      Advisory
      Agreement”                                                                                           

                  	 	
                    Recitals

                  
	
                    “Replacement
      Facility”                                                                                           

                  	 	
                    2.02

                  
	
                    “Replacement
      Lender”                                                                                           

                  	 	
                    2.02

                  
	
                    “Replacement
      Management
      Agreements”                                                                                           

                  	 	
                    Recitals

                  
	
                    “Representatives”                                                                                           

                  	 	
                    7.03(a)

                  
	
                    “Saratoga”                                                                                           

                  	 	
                    Preamble

                  
	
                    “Saratoga
      Commitment
      Letter”                                                                                           

                  	 	
                    6.05(b)

                  
	
                    “Saratoga
      Directors”                                                                                           

                  	 	
                    2.02

                  
	
                    “SDAT”                                                                                           

                  	 	
                    5.01

                  
	
                    “Shares”                                                                                           

                  	 	
                    2.01

                  
	
                    “Takeover
      Statute”                                                                                           

                  	 	
                    5.22(a)

                  
	
                    “Tax”                                                                                           

                  	 	
                    5.16(o)

                  
	
                    “Tax
      Return”                                                                                           

                  	 	
                    5.16(o)

                  
	
                    “Tax
      Sharing
      Agreement”                                                                                           

                  	 	
                    5.16(o)

                  
	
                    “Tax
      Authority”                                                                                           

                  	 	
                    5.16(o)

                  
	
                    “Transfer
      Restrictions”                                                                                           

                  	 	
                    3.03

                  
	
                    “Termination
      Fee”                                                                                           

                  	 	
                    11.03(a)

                  
	
                    “Underlying
      Beneficial
      Owner”                                                                                           

                  	 	
                    6.07

                  

          

        

         

      

      Section
1.03. Other Definitional and
Interpretative Provisions. The words “hereof”, “herein” and “hereunder”
and words of like import used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement. The captions
herein are included for convenience of reference only and shall be ignored in
the construction or interpretation hereof. References to Articles, Sections,
Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this
Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto
or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in any
Exhibit or Schedule but not otherwise defined therein, shall have the meaning as
defined in this Agreement. Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      

      singular.
The neuter pronoun, as used herein, includes the masculine, feminine and neuter
gender. Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation”, whether or not they are in fact followed by those words or words of
like import. “Writing”, “written” and comparable terms refer to printing, typing
and other means of reproducing words (including electronic media) in a visible
form. References to any statute shall be deemed to refer to such statute as
amended from time to time and to any rules or regulations promulgated
thereunder. References to any agreement or contract are to that agreement or
contract as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof; provided that with respect to
any agreement or contract included in this Agreement or listed on any schedules
hereto, all such amendments, modifications or supplements must also be included
in this Agreement and listed in the appropriate schedule, respectively.
References to any Person include the successors and permitted assigns of that
Person. References from or through any date mean, unless otherwise specified,
from and including or through and including, respectively. References to “law”,
“laws” or to a particular statute or law shall be deemed also to include any
Applicable Law.

      

      

      ARTICLE
2

      AGREEMENT TO PURCHASE AND SELL STOCK AND TAKE OTHER ACTIONS

      

      Section
2.01. Agreement to Purchase
and Sell. Subject to the terms and conditions hereof, at the Closing, the
Company will sell to the Investors, and the Investors shall purchase from the
Company, 9,868,422 shares of Common Stock (the “Shares”) at a price of $1.52
per share for an aggregate purchase price of $15,000,001.44 (the “Investment”). The purchase
price for the Shares shall be paid by wire transfer of funds to a designated
account of the Company, provided that wire transfer
instructions are delivered to Saratoga at least one Business Day prior to the Closing.
Simultaneously with the Closing, the Investors shall Transfer, or cause to be
Transferred, to each of the Permitted Transferees set forth on Schedule I hereto the
number of Shares set forth therein.

      

      Section
2.02. Replacement Financing
and Other Actions. Concurrently with the Closing, the Company, either
directly or through a Subsidiary of the Company, shall (i) enter into a $40
million senior secured revolving credit facility (the “Replacement Facility”) with
Madison Capital Funding LLC (the “Replacement Lender”)
substantially in the form attached hereto as Exhibit D -3; (ii)
change its name from “GSC Investment Corp.” to “Saratoga Investment Corp.”; (iii) enter
into the Replacement Management Agreements; (iv) enter into a trademark license
agreement (the “License
Agreement”) with Saratoga or one of its Affiliates substantially in the
form attached hereto as Exhibit I; (v) have
procured the resignations, to be effective as of the date of Closing, of Robert
F. Cummings, Jr. and Richard M. Hayden as members of the Board; (vi) have
elected, effective as of the date of Closing, Christian L. Oberbeck and Richard
A. Petrocelli as members of the Board (the “Saratoga Directors”); and
(vii) enter into a registration rights agreement with the Investors (the “Registration Rights
Agreement”) substantially in the form attached hereto as Exhibit
F.

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      Section
2.03. Repayment of
Indebtedness. At the Closing, and as a condition to the occurrence
thereof, and contemporaneously with the Investment and the Company’s or a
Subsidiary of the Company’s entry into the Replacement Facility with the
Replacement Lender, the Company shall use the monies received by it in
connection with the Investment and the required portion of the funds available
to it under the Replacement Facility to (i) pay the full amount of principal and
accrued interest, including default interest (as such term is defined in the
Company Securitization Documents) outstanding under the Company Securitization
Documents as of the Closing date, and (ii) pay any and all of the fees, costs,
expenses, penalties and other amounts due and payable as of the date of Closing
under the Company Securitization Documents (collectively, the “Loan Repayment”). The Loan
Repayment shall occur in the manner reasonably required by Lender and other
parties to whom any portion of the Loan Repayment is owed, and the Company
agrees to cooperate with, and take all such actions reasonably requested by,
Lender and such other parties in connection therewith.

      

      

      ARTICLE
3

      RESTRICTIONS ON TRANSFER

      

      Section
3.01. General Restrictions on
Transfer. (a) Each Investor agrees that it shall not Transfer any Shares
(or solicit any offers in respect of any Transfer of any Shares), except in
compliance with the 1933 Act, any other applicable securities or “blue sky”
laws, and the terms and conditions of this Agreement.

      

      (b) Any
attempt to Transfer any Shares not in compliance with this Agreement shall be
null and void, and the Company shall not, and shall cause any transfer agent not
to, give any effect in the Company’s stock records to such attempted
Transfer.

      

      Section
3.02. Permitted
Transferees. Notwithstanding anything in this Agreement to the contrary,
each Investor may at any time Transfer any or all of its Shares to one or more
of its Permitted Transferees without the consent of the Company so long as (a)
such Permitted Transferee shall have agreed in writing to be bound by the terms
of this Agreement by executing a Joinder Agreement substantially in the form of
Exhibit G
attached hereto, and (b) the Transfer to such Permitted Transferee is in
compliance with the 1933 Act and any other applicable securities or “blue sky”
laws.

      

      Section
3.03. Restrictions on
Transfers by the Investors. From and after the Closing,

      

      (a) each
Investor hereby agrees that it shall not Transfer 33.33% of the Shares it
acquires as part of the Investment until the first anniversary of the Closing
(the “Transfer Restrictions”); provided that each Investor shall
be permitted to Transfer such Shares to one or more of its Permitted
Transferees in accordance with Section 3.02; and

      

      (b) each
Investor hereby acknowledges that the remaining 66.67% of the Shares it acquires
as part of the Investment shall not be subject to the Transfer Restrictions and
are generally transferable;

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      provided, however, that, in each case,
each Investor acknowledges that the Shares are restricted securities within the
meaning of Rule 144 under the 1933 Act and may not be Transferred except in
compliance with the 1933 Act and any other applicable securities or “blue sky”
laws.

      

      Section
3.04. Notice of
Transfers. Each Investor shall give the Company prompt written notice of
any transactions relating to the Shares in reliance on Section 3.02 or
3.03.

      

      

      ARTICLE
4

      CLOSING; DELIVERY

      

      Section
4.01. The Closing.
Subject to the provisions of Article 10, the consummation of the purchase by the
Investors of the Shares, and, simultaneous with the Closing, the Transfer of the
Shares to each of the Permitted Transferees set forth on Schedule I hereto in
the amounts set forth therein, as contemplated herein (the “Closing”) shall take place in
New York City at the offices of Davis Polk & Wardwell LLP, 450 Lexington
Avenue, New York, New York 10017 as soon as reasonably practicable, but in any
event no later than 2 Business Days after the date the conditions set forth in
Article 10 (other than conditions that by their nature are to be satisfied at
the Closing, but subject to the satisfaction or, to the extent permissible,
waiver of those conditions at Closing) have been satisfied or, to the extent
permissible, waiver of those conditions by the party or parties entitled to the
benefit of such conditions, or at such other place, at such other time or on
such other date as the Investors and the Company may mutually agree in
writing.

      

      Section
4.02. Delivery and Other
Actions. At the Closing, the Company will deliver to the Investors
certificates representing the Shares to be purchased by the Investors hereunder
and to be simultaneously Transferred to each of the Permitted Transferees set
forth on Schedule
I hereto in the amounts set forth therein, against payment of the full
purchase price therefor by wire transfer and the parties shall cause the other
actions discussed in Article 2 to occur.

      

      

      ARTICLE
5

      REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      

      Subject
to Section 12.05, except as disclosed in any Company SEC Document filed after
January 14, 2010 and before the date of this Agreement or as set forth in the
Company Disclosure Schedule, the Company represents and warrants to the
Investors as follows:

      

      Section
5.01. Corporate Existence and
Power. The Company is a corporation duly incorporated and validly
existing under the laws of the State of Maryland and is in good standing with
the Maryland State Department of Assessments and Taxation (the “SDAT”). The Company has the
requisite corporate power and authority to own or lease all of its properties
and assets and to carry on its business as it is now being conducted, and is
duly licensed or qualified to do business in each jurisdiction in which the
nature of the business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

      qualification
necessary, except where the failure to be so licensed or so qualified would not,
individually or in the aggregate, be material to the Company. The Company has
heretofore made available to the Investors true, complete and correct copies of
the charter and bylaws of the Company as currently in effect.

      

      Section
5.02. Corporate
Authorization. (a) The execution, delivery and performance by the Company
of this Agreement and the consummation by the Company of the transactions
contemplated hereby are within the Company’s corporate powers and have been duly
authorized by all necessary corporate action on the part of the Company and,
except for the Company Stockholder Approvals, no other corporate proceedings on
the part of the Company are necessary. The Company Stockholder Approvals (none
of which require the affirmative vote of shares of Common Stock representing
more than a majority of the issued and outstanding Common Stock) are the only
votes or consents of the holders of any class or series of the Company’s stock
necessary to approve the Investment and to consummate the other transactions
contemplated hereby. This Agreement constitutes a valid and binding agreement of
the Company enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditors’ rights generally
and general principles of equity). The Shares, when issued in compliance with
the provisions of this Agreement, will be validly issued and will be fully paid
and nonassessable, free of any Liens, and will not be subject to any preemptive
rights, whether arising under Maryland Law or the charter or bylaws of the
Company, as amended or restated, or any Contract, other than this Agreement or
any other Contracts to be executed in connection herewith, to which or by which
the Company or any of its Subsidiaries is a party or otherwise subject or bound
or to which or by which any property, business, operation or right of the
Company or any of its Subsidiaries is subject or bound.

      

      (b) At a
meeting duly called and held, the Board has (i) unanimously determined that this
Agreement, the Investment, Replacement Advisory Agreement and the other
transactions contemplated hereby are in the best interests of the Company, (ii)
unanimously approved this Agreement, the Investment, the Replacement Advisory
Agreement and the other transactions contemplated hereby and (iii) subject to
Section 7.03, unanimously recommended approval of the Company Stockholder
Proposals (such recommendation, the “Company Board Recommendation”) and has
adopted a resolution to the foregoing effect.

      

      (c) As of the
date hereof, and subject in all cases to Section 7.03 hereafter, the Company
Board Recommendation has not been rescinded or modified in any
respect.

      

      Section
5.03. Governmental
Authorization. The execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
Governmental Authority other than (i) the filing with the SEC of a proxy
statement relating to the meeting of the Company’s stockholders to be held in
connection with the Investment and other transactions contemplated by this
Agreement, (ii) compliance with any applicable requirements of the 1933 Act, the
1934 Act, the Investment Company Act and any other applicable state or
federal

      

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

      securities
laws and (iii) any actions or filings the absence of which would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.

      

      Section
5.04.
Non-contravention. The execution, delivery and performance by the Company
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) contravene, conflict with, or result in any violation or
breach of any provision of the charter or bylaws of the Company, as amended or
restated, (ii) assuming compliance with the matters referred to in Section 5.03
and receipt of the Company Stockholder Approvals, contravene, conflict with or
result in a material violation or material breach of any provision of any
Applicable Law, (iii) other than any consents required under the Company
Securitization Documents, require any consent or other action by any Person
under, constitute a default, or an event that, with or without notice or lapse
of time or both, would constitute a default, under, or cause or permit the
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which the Company is entitled under any
provision of any Contract or other instrument binding upon the Company or any
license, franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of the Company or
(iv) result in the creation or imposition of any Lien, other than a Permitted
Lien, on any asset of the Company, with only such exceptions, in the case of
each of clauses (iii) and (iv), as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

      

      Section
5.05. Capitalization.
(a) The authorized stock of the Company consists of 100,000,000 shares of Common
Stock. As of April 14, 2010, there were 16,940,109 shares of Common Stock
outstanding. All outstanding shares of stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and are free of
preemptive rights, whether arising under Maryland Law or the charter or bylaws
of the Company, as amended or restated, or any Contract to which or by which the
Company or any of its Subsidiaries is a party or otherwise subject or bound or
to which or by which any property, business, operation or right of the Company
or any of its Subsidiaries is subject or bound.

      

      (b)
Except as set forth on Section 5.05(b) of the Company Disclosure Schedule, (i)
there are no outstanding bonds, debentures, notes or other indebtedness for
borrowed money of the Company, and (ii) there are no issued, reserved for
issuance or outstanding (A) shares of stock or other voting securities of or
ownership interests in the Company other than the Common Stock, (B) securities
of the Company convertible into or exchangeable for shares of stock or other
voting securities of or ownership interests in the Company, (C) warrants, calls,
options or other rights to acquire from the Company, or other obligation of the
Company to issue, any stock, voting securities or securities convertible into or
exchangeable for stock or voting securities of the Company or (D) restricted
shares, stock appreciation rights, performance units, contingent value rights,
“phantom” stock or similar securities or rights that are derivative of, or
provide economic benefits based, directly or indirectly, on the value or price
of, any stock of or voting securities of the Company (the items in the foregoing
clauses (i) and (ii), together with the Common Stock, being referred to
collectively as the “Company
Securities”). There are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any of the

      

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

       

      Company
Securities. The Company is not a party to any voting agreement with respect to
the voting of any Company Securities.

      

      (c) Except as
set forth in Section 5.05(c) of the Company Disclosure Schedule, all of the
issued and outstanding member interests in GSC Investment Funding, LLC (“GSC Sub”) are owned by the
Company, free and clear of any Liens (excluding any Liens or other such
restrictions relating to the Company Securitization Documents), and all of such
member interests are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. GSC Sub is not bound by any
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any member interests or any
other equity security of GSC Sub or any securities representing the right to
purchase or otherwise receive any member interests or any other equity security
of GSC Sub.

      

      (d) Section
5.05(d) of the Company Disclosure Schedule contains, as of the date hereof, a
detailed calculation of the total amount of the Loan Repayment that would be due
if the Loan Repayment were to be made on the date of this
Agreement.

      

      Section
5.06. Subsidiaries. The
Company has no Subsidiaries other than GSC Sub. GSC Sub is duly formed and
validly existing and in good standing under the laws of the State of Delaware,
has the requisite limited liability company power and authority to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or so
qualified would not, individually or in the aggregate, be material to the
Company. The certificate of formation and operating agreement of GSC Sub, copies
of which have previously been made available to the Investors, are true,
complete and correct copies of such documents as currently in
effect.

      

      Section
5.07. SEC Filings and the
Sarbanes-Oxley Act.

      

      (a) The
Company has filed with or furnished to the SEC, and made available to Saratoga,
all final reports, schedules, forms, statements, prospectuses, registration
statements and other documents required to be filed or furnished by the Company
since October 18, 2006 (collectively, together with any exhibits and schedules
thereto and other information incorporated therein, the “Company SEC
Documents”).

      

      (b) As of its
filing date (and as of the date of any amendment), each Company SEC Document
complied, and each Company SEC Document filed subsequent to the date hereof will
comply, as to form in all material respects with the applicable requirements of
the 1933 Act, the 1934 Act and the Investment Company Act, as the case may
be.

      

      (c) As of its
filing date (or, if amended or superseded by a filing prior to the date hereof,
on the date of such filing), each Company SEC Document filed pursuant to the
1934 Act did not, and each Company SEC Document filed subsequent to the date
hereof will not, contain

      

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

       

      any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.

      

      (d) Each
Company SEC Document that is a registration statement, as amended or
supplemented, if applicable, filed pursuant to the 1933 Act, as of the date such
registration statement or amendment became effective, did not, and each Company
SEC Document that is a registration statement filed subsequent to the date
hereof will not, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading.

      

      (e) The
Company has established and maintains disclosure controls and procedures (as
defined in Rule 13a-15 under the 1934 Act). Such disclosure controls and
procedures are designed to ensure that material information relating to the
Company is made known to the Company’s principal executive officer and its
principal financial officer by others within the Company, particularly during
the periods in which the periodic reports required under the 1934 Act are being
prepared. Such disclosure controls and procedures are effective in timely
alerting the Company’s principal executive officer and principal financial
officer to material information required to be included in the Company’s
periodic and current reports required under the 1934 Act. For purposes of this
Agreement, “principal executive officer” and “principal financial officer” shall
have the meanings given to such terms in the Sarbanes-Oxley Act.

      

      (f) The
Company has established and maintains a system of internal control over
financial reporting (as defined in Rule 13a-15 under the 1934 Act) sufficient to
provide reasonable assurance regarding the reliability of the Company’s
financial reporting and the preparation of the Company financial statements for
external purposes in accordance with GAAP applied on a consistent basis. The
Company has disclosed, based on its most recent evaluation of internal control
over financial reporting prior to the date hereof, to the Company’s auditors and
audit committee (i) any significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information and (ii) any
fraud, whether or not material, that involves management or other employees who
have a significant role in internal control over financial reporting. The
Company has made available to Investor a summary of any such disclosure made by
management to the Company’s auditors and audit committee since October 18,
2006.

      

      (g) There are
no outstanding loans or other extensions of credit made by the Company or any of
its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the
1934 Act) or director of the Company. The Company has not, since the enactment
of the Sarbanes-Oxley Act, taken any action prohibited by Section 402 of the
Sarbanes-Oxley Act.

      

      (h) No
attorney representing the Company, whether or not employed by the Company, has
reported to the Company’s chief legal counsel or chief executive officer
evidence of a material violation of securities laws, breach of fiduciary duty or
similar violation by the

      

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

       

      Company
or any of its officers, directors, employees or agents pursuant to Section 307
of the Sarbanes-Oxley Act.

      

      (i) Since
March 23, 2007, except as set forth in Section 5.07(i) of the Company Disclosure
Schedule, the Company has complied in all material respects with the applicable
listing and corporate governance rules and regulations of the NYSE (the “NYSE Rules”).

      

      (j) Each of
the principal executive officer and principal financial officer of the Company
(or each former principal executive officer and principal financial officer of
the Company, as applicable) have made all certifications required by Rule 13a-14
under the 1934 Act and Sections 302 and 906 of the Sarbanes-Oxley Act and any
related rules and regulations promulgated by the SEC and the NYSE, and the
statements contained in any such certifications are complete and correct as of
the date of this Agreement as though made as of the date of this
Agreement.

      

      Section
5.08. Financial
Statements. The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company included or
incorporated by reference in the Company SEC Documents (including the related
notes, where applicable) have been prepared from, and are in accordance with,
the books and records of Company, fairly present in all material respects, in
conformity with GAAP applied on a consistent basis (except as may be indicated
in the notes thereto), the consolidated financial position of the Company as of
the dates thereof and the consolidated results of operations and cash flows for
the periods then ended (subject to, in the case of any unaudited interim
financial statements, year-end audit adjustments that are normal in nature and
amount).

      

      Section
5.09. Disclosure
Documents. The information supplied by the Company for inclusion in the
proxy statement, or any amendment or supplement thereto, to be sent to the
Company stockholders in connection with the Investment and the other
transactions contemplated by this Agreement (the “Proxy Statement”) shall not,
on the date the Proxy Statement, and any amendments thereto, is first mailed to
the stockholders of the Company or at the time of the Company Stockholder
Approvals, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

      

      Section
5.10. Absence of Certain
Changes. (a) Since the Company Balance Sheet Date,

      

      (i)
except as it relates to the Company Securitization Documents and any ongoing or
future events of default thereunder, the business of the Company has been
conducted in the ordinary course of business in a manner that is consistent with
past practice and (ii) there has not been any event, occurrence, development or
state of circumstances or facts that has had or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

      

      (b) Since
June 1, 2009, each confidentiality agreement that the Company has entered into
relating to its exploration and evaluation of strategic opportunities and
alternatives contains a standstill provision, and neither the Company nor any of
its Affiliates or Representatives have granted any waiver or release under, or
failed to enforce any material term of, any such

      

      
        
           

        

        
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      confidentiality,
standstill or similar agreements or arrangements with respect to any class of
equity securities or assets of the Company.

      

      (c) From
the Company Balance Sheet Date until the date hereof, there has not been any
action taken by the Company that, if taken during the period from the date of
this Agreement through the Closing without Saratoga’s consent, would constitute
a breach of Section 7.01.

      

      Section
5.11. No Undisclosed Material
Liabilities. There are no material liabilities or obligations of the
Company of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, other than: (i) liabilities or
obligations disclosed and provided for in the Company Balance Sheet or in the
notes thereto; or (ii) liabilities or obligations incurred in the ordinary
course of business in a manner that is consistent with past practice since the
Company Balance Sheet Date.

      

      Section
5.12. Compliance With Laws and
Court Orders. (a) The Company is in compliance with, and to the knowledge
of the Company is not under investigation with respect to and has not been
threatened to be charged with or given notice of any violation of, any
Applicable Law, except for failures to comply or violations that have not
resulted in, and would not reasonably be expected to result in, a material
liability of the Company or materially impede the business of the Company. There
is no judgment, decree, injunction, rule or order of any arbitrator or
Governmental Authority outstanding against the Company that has resulted in, or
would reasonably be expected to result in, a material liability of the Company
or that would materially impede the business of the Company or that in any
manner seeks to prevent, enjoin, alter or materially delay the Investment or any
of the other transactions contemplated hereby. Neither the Company nor its
Subsidiary has any knowledge as of the date hereof of any investigations,
charges or proceedings that has resulted in, or would reasonably be expected to
result in, a material liability of the Company or that would materially impede
the business of the Company or that in any manner seeks to prevent, enjoin,
alter or materially delay the Investment or any of the other transactions
contemplated hereby.

      

      (b)
Section 5.12(b) of the Company Disclosure Schedule contains a complete and
accurate list of each Governmental Authorization that is held by the Company or
any Subsidiary or that otherwise relates to the business of, or to any of the
assets owned or used by, any the Company or any Subsidiary. Each Governmental
Authorization listed or required to be listed in Section 5.12(b) of the Company
Disclosure Schedule is valid and in full force and effect. Except as set forth
in Section 5.12(b) of the Company Disclosure Schedule:

      

      (i) the
Company or the relevant Subsidiary is, and at all times has been, in compliance
in all material respects with the terms and requirements of each Governmental
Authorization identified or required to be identified in Section 5.12(b) of the
Company Disclosure Schedule;

      

      (ii) no event
has occurred or circumstance exists that may (with or without notice or lapse of
time) (A) constitute or result directly or indirectly in a violation of or a
failure to comply with any term or requirement of any Governmental Authorization
listed

      

      
        
           

        

        
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          or
required to be listed in Section 5.12(b) of the Company Disclosure Schedule, or
(B) result directly or indirectly in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification to, any Governmental
Authorization listed or required to be listed in Section 5.12(b) of the Company
Disclosure Schedule;

          

          (iii) neither
the Company nor any Subsidiary has received, at any time since December 31,
2006, any notice or other communication (whether oral or written) from any
Governmental Authority or any other Person regarding (A) any actual, alleged,
possible, or potential violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (B) any actual, proposed,
possible, or potential revocation, withdrawal, suspension, cancellation,
termination of, or modification to any Governmental Authorization;
and

          

          (iv) all
applications required to have been filed for the renewal of the Governmental
Authorizations listed or required to be listed in Section 5.12(b) of the Company
Disclosure Schedule have been duly filed on a timely basis with the appropriate
governmental bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Authorities.

          

          The
Governmental Authorizations listed in Section 5.12(b) of the Company Disclosure
Schedule collectively constitute all of the Governmental Authorizations
necessary to permit the Company and its Subsidiary to lawfully conduct and
operate their businesses in the manner they currently conduct and operate such
businesses and to permit the Company and its Subsidiaries to own and use their
assets in the manner in which they currently own and use such assets, except for
such Governmental Authorizations that the failure to list on Section 5.12(b) of
the Company Disclosure Schedule would not, individually or in the aggregate, be
material to the Company.

          

          Section
5.13. Litigation.
Except as set forth on Section 5.13 of the Company Disclosure Schedule, there is
no action, suit, investigation or proceeding pending against, or, to the
knowledge of the Company, threatened against or affecting, the Company, any
present or former officer, director or employee of the Company or any Person for
whom the Company may be liable or any of their respective properties before (or,
in the case of threatened actions, suits, investigations or proceedings, would
be before) or by any Governmental Authority or arbitrator, that, if determined
or resolved adversely in accordance with the plaintiff’s demands, would
reasonably be expected to result in, individually or in the aggregate, a
material liability of the Company. To the Company’s knowledge as of the date
hereof, there is no basis for any action, suit, investigation or proceeding that
is reasonably likely to result in a material liability of the
Company.

          

          Section
5.14. Material
Contracts. (a) All Contracts, including amendments thereto, required to
be filed as an exhibit to any report of the Company filed pursuant to the 1934
Act have been filed, and no such Contract has been amended or modified, except
as set forth in Section 5.14(a) of the Company Disclosure Schedule, as of the
date hereof. All such filed

           

          
            
               

            

            
              20

              
                

              

            

            
               

            

          

          

          Contracts
(excluding any redacted portions thereof) shall be deemed to have been made
available to Saratoga.

          

          (b) Each
such Contract is a valid and binding agreement of all parties thereto, and is in
full force and effect, and neither the Company nor, to the knowledge of the
Company, any other party thereto is in default or breach in any respect under
the terms of any such agreement, contract, plan, lease, arrangement or
commitment, except as set forth in Section 5.14(b) of the Company Disclosure
Schedule, as of the date hereof, or for such default or breach as would not,
individually or in the aggregate, reasonably be expected to result in a material
liability of the Company.

          

          Section
5.15. Intellectual
Property. Section 5.15 of the Company Disclosure Schedule sets forth, as
of the date hereof, a complete and correct list of all Intellectual Property
used in, and material to, the operations of the Company and all material
registrations and applications for registration of any Intellectual Property
owned by the Company. Except as would not reasonably be expected to be,
individually or in the aggregate, material to the Company: (a) the Company owns,
or is licensed to use (in each case, free and clear of any Liens), all
Intellectual Property used in, and material to, the conduct of its business as
currently conducted; (b) the Company has not infringed, misappropriated or
otherwise violated the Intellectual Property rights of any Person; (c) no Person
has challenged or, to the knowledge of the Company, infringed, misappropriated
or otherwise violated any Intellectual Property right owned by and/or licensed
to the Company; (d) the Company has not received any written notice or otherwise
has knowledge of any pending claim, action, suit, order or proceeding with
respect to any Intellectual Property used by the Company or alleging that any
services provided, processes used or products manufactured, used, imported,
offered for sale or sold by the Company infringes, misappropriates or otherwise
violates any Intellectual Property rights of any Person; (e) the Company has
taken reasonable steps in accordance with normal industry practice to maintain
the confidentiality of all Trade Secrets owned, used or held for use by the
Company and no such Trade Secrets have been disclosed other than to employees,
Representatives and agents of the Company, all of whom are bound by written
confidentiality agreements; (f) the IT Assets operate and perform in a manner
that permits the Company to conduct its business as currently conducted and to
the knowledge of the Company, no Person has gained unauthorized access to the IT
Assets; and (g) the Company has implemented reasonable backup and disaster
recovery technology consistent with industry practices. Except for the use of
the name or mark of “GSC”, no Subsidiary of the Company owns or uses
Intellectual Property, and the ownership or use of Intellectual Property is not
necessary for the conduct of such Subsidiary’s business as currently
conducted.

          

          Section
5.16. Taxes. Except as
set forth in Section 5.16 of the Company Disclosure Schedule as of the date
hereof:

          

          (a) All
material Tax Returns required by Applicable Law to be filed with any Taxing
Authority by, or on behalf of, the Company or any Subsidiary have been filed
when due in accordance with all Applicable Law, and all such material Tax
Returns were, or shall be at the time of filing, true and complete in all
material respects.

           

          
            
               

            

            
              21

              
                

              

            

            
               

            

          

          

          (b) The
Company has paid or has withheld and remitted to the appropriate Taxing
Authority all Taxes due and payable, or, where payment is not yet due, has
established in accordance with GAAP an adequate accrual for all material Taxes
through the end of the last period for which the Company ordinarily records
items on its books.

          

          (c) There is
no claim, audit, action, suit, proceeding or investigation now pending or, to
the Company’s knowledge, threatened against or with respect to the Company in
respect of any Tax or Tax asset.

          

          (d) During
the five-year period ending on the date hereof (or otherwise as part of a “plan
(or series of related transactions)” within the meaning of Section 355(e) of the
Code), the Company was not (i) a distributing corporation or a controlled
corporation in a transaction intended to be governed by Section 355 of the Code
or (ii) a party to a tax-free reorganization under the Code.

          

          (e) Neither
the Company nor any Subsidiary has any liability for Taxes of any Person other
than the Company or its Subsidiaries (i) under Section 1.1502-6 of the Treasury
regulations (or any similar provision of state, local or foreign law), (ii) as a
transferee or successor, or (iii) or pursuant to any Tax Sharing
Agreement.

          

          (f) Effective
as of November 15, 2008, the Company made a valid election under Subchapter M of
Chapter 1 of the Code to be treated as a regulated investment company. The
Company has qualified as, and been eligible to be treated as, a “regulated
investment company” under Subchapter M of the Code for each taxable year
beginning on or after March 23, 2007, and expects to qualify as, and to be
eligible to be treated as, such for its current taxable year. The Company has
satisfied the distribution requirements imposed on a regulated investment
company under Section 852 of the Code for each of the taxable years ended
February 29, 2008 and February 28, 2009, respectively.

          

          (g) For any
taxable year during which the Company was not a regulated investment company,
the Company has no liability for Taxes for which it does not have reserves
adequate under GAAP. The Company has no “earnings and profits” accumulated in
any taxable year in which the Company was not treated as a regulated investment
company under Subchapter M of Chapter 1 of the Code.

          

          (h) Neither
the Company nor any of its Subsidiaries owns any “converted property” (as that
term is defined in Treasury Regulation Section 1.337(d)-7(a)(1)) that is subject
to the rules of Section 1374 of the Code as a consequence of the application of
Section 337(d)(1) of the Code and the Treasury Regulations
thereunder.

          

          (i) There are
no limitations on the utilization of the built-in-losses, capital losses or
other similar items of the Company or its Subsidiaries under Section 382, 384 or
269 of the Code (or any similar state, local or foreign law). For the avoidance
of doubt, this representation does not address limitations arising from an
ownership change that occurs as a result of the consummation of the purchase of
the Shares pursuant to this Agreement.

          

          
            
               

            

            
              22

              
                

              

            

            
               

            

          

           

          (j) There are
no Liens for Taxes upon the assets of the Company or any Subsidiary (other than
Liens for Taxes not due and owing).

          

          (k) Neither
the Company nor any Subsidiary is or has been required to make any disclosure to
the IRS pursuant to Section 6011 of the Code or Section 1.6011-4 of the Treasury
regulations promulgated thereunder.

          

          (l) Neither
the Company nor any Subsidiary has granted any waiver, extension, or comparable
consent regarding the application of the statute of limitations with respect to
any Taxes or Tax Return that is outstanding, nor any request for such waiver or
consent has been made.

          

          (m) Each of
GSC Sub and GSC CLO is classified (and at all times during its existence, has
been classified) as a disregarded entity for federal tax purposes under Section
301.7701-3 of the Treasury regulations.)

          

          (n) The
Company is not a partner or member of any entity classified as a partnership or
disregarded entity for federal tax purposes other than GSC Sub, GSC CLO and GSC
Partners CDO GP III, LP.

           

          (o) For the
purposes of this Agreement,

          

          (i) “Tax” means any tax,
governmental fee or other like assessment or charge of any kind whatsoever
(including, without limitation, all federal, state, local, and foreign income,
excise, gross receipts, gross income, ad valorem, profits, gains, property,
capital, sales, transfer, use, payroll, employment, severance, withholding,
duties, intangibles, franchise, backup withholding, value added and other taxes,
charges, levies or like assessments together with all penalties and additions to
tax and interest thereon), together with any interest, penalty, addition to tax
or additional amount imposed by any Governmental Authority (a “Taxing Authority”) responsible
for the imposition of any such tax (domestic or foreign);

          

          (ii) “Tax Return” means any report,
return, document, declaration or other information or filing supplied or
required to be supplied to any Taxing Authority with respect to Taxes, including
information returns, any documents with respect to or accompanying payments of
estimated Taxes, or with respect to or accompanying requests for the extension
of time in which to file any such report, return, document, declaration or other
information; and

          

          (iii) “Tax Sharing Agreements” means
all existing agreements or arrangements (whether or not written) binding the
Company, Investor, or any of their Subsidiaries that provide for the allocation,
apportionment, sharing or assignment of any Tax liability or benefit, or the
transfer or assignment of income, revenues, receipts, or gains for the purpose
of determining any Person’s Tax liability, but does not include any
indemnification agreement or arrangement pertaining to the sale of assets or
subsidiaries).

          

          
            
               

            

            
              23

              
                

              

            

            
               

            

          

           

          Section
5.17. Related Party
Transactions. Except as set forth in the Company SEC Documents, there are
no transactions, agreements, arrangements or understandings between the Company,
on the one hand, and any Affiliate (including any director or officer) thereof,
on the other hand, that would be required to be disclosed pursuant to Item 404
of Regulation S-K of the SEC in the Company’s Form 10-K or proxy statement
pertaining to an annual meeting of stockholders. No transaction that would
violate Section 57 of the Investment Company Act or the rules and regulations
promulgated thereunder has occurred between the Company and the Persons
described in such section.

          

          Section
5.18. Registered Investment
Company Status. (a) Pursuant to Section 6(f) of the Investment Company
Act, the Company is not, and at all times since inception has not been required
to register with the SEC as a closed-end management investment company under the
Investment Company Act.

          

          (b) The
Company has elected to be regulated as a business development company under the
Investment Company Act and has filed with the SEC, pursuant to Section 54(a) of
the Investment Company Act, a duly completed and executed Form N-54A (the “BDC Election”); the Company
has not filed with the SEC any notice of withdrawal of the BDC Election pursuant
to Section 54(c) of the Investment Company Act; the Company’s BDC Election
remains in full force and effect, and no order of suspension or revocation of
such election under the Investment Company Act has been issued or, to the
Company’s knowledge, proceedings therefore initiated or threatened by the SEC.
The operations of the Company are in compliance in all material respects with
the provisions of the Investment Company Act, in each case, and the rules and
regulations of the SEC thereunder, including the provisions applicable to
business development companies.

          

          (c) The Board
has been established and operated and is currently operating in conformity with
the requirements and restrictions of Sections 10 and 16 of the Investment
Company Act and satisfies the fund governance standards as defined in Rule
0-1(a)(7) (except for clauses (i) and(iv) thereof) under the Investment Company
Act.

          

          (d) The
Company (i) has duly adopted written policies and procedures required by Rule
38a-1 under the Investment Company Act, (ii) designated and approved an
appropriate chief compliance officer in accordance with such Rule and (iii) has
duly adopted a written code of ethics as required by Rule 17j-1 under the
Investment Company Act. All such policies and procedures (including the code of
ethics) comply in all material respects with Applicable Law and there have been
no material violations or allegations of material violations of such policies
and procedures.

          

          (e) Since
March 21, 2007, the Company has complied in all material respects with the
capital structure requirements as set forth in Section 61 of the Investment
Company Act.

          

          (f) Section
5.18(f) of the Company Disclosure Schedule identifies, as of the date hereof,
all exemptive, no action or similar relief received by the Company from any
Governmental Authority. Such exemptive, no action or similar relief is in full
force and effect,

          

          
            
               

            

            
              24

              
                

              

            

            
               

            

          

           

          and is
being fully complied with in all material respects by the Company. No requests
for exemptive, no action or similar relief are currently
pending.

          

          Section
5.19. Anti-money
Laundering. Since inception, the Company has operated and is currently
operating in compliance in all material respects with its anti-money laundering
program and all Applicable Law relating thereto, including but not limited to
obtaining appropriate identification information of each client and investor in
the Company and maintaining records of such identification information for a
period of not less than 5 years after the closure of the account. The Company
will make such client and investor identification records available to Saratoga
promptly upon request.

          

          Section
5.20. Finders’ Fees.
Except for Stifel Nicolaus & Co., Inc. (the “Company Financial Advisor”), a true,
correct and complete copy of whose engagement agreement has been provided to
Investor, there is no investment banker, broker, finder or other intermediary
that has been retained by or is authorized to act on behalf of the Company or
any of its Subsidiaries who might be entitled to any fee or commission from the
Company or any of its Subsidiaries in connection with the transactions
contemplated by this Agreement.

          

          Section
5.21. Opinion of Financial
Advisor. The Board of Directors of the Company has received the opinion
of the Company Financial Advisor to the effect that, as of the date of this
Agreement, the financial terms and conditions of the Investment are fair to the
Company from a financial point of view.

          

          Section
5.22. Rights Agreement;
Takeover Statutes. (a) The Company does not have in effect any plan,
scheme, device or arrangement, commonly or colloquially known as a “rights
plan,” “rights agreement” or “poison pill.” The Board has taken all actions so
that the restrictions contained in Title 3, Subtitles 6 or 7 of Maryland Law
applicable to a “business combination” with “interested stockholders” or any
acquisition of “control shares”, or any other similar Maryland Law or other
Applicable Law (each a “Takeover Statute”), will not
apply to Investor in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement.

          

          (b) No
anti-takeover provision contained in the Company’s charter or bylaws, as amended
or restated, would prohibit the transactions contemplated by this Agreement and
no anti-takeover provision, whether in an Applicable Law, agreement or
otherwise, would prohibit the execution and delivery of this Agreement or the
consummation of the transactions contemplated by this
Agreement.

          

          Section
5.23. Environmental
Matters. Except as would not reasonably be expected to result,
individually or in the aggregate, in a material liability to the Company, there
are no legal, administrative, arbitral or other proceedings, claims, actions,
causes of action or notices with respect to any environmental, health or safety
matters or any private or governmental environmental, health or safety
investigations or remediation activities of any nature with respect to any real
property owned by the Company or its Subsidiary seeking to impose, or that are
reasonably likely to result in, any liability or obligation of the Company or
its Subsidiary arising

          

          
            
               

            

            
              25

              
                

              

            

            
               

            

          

           

          under any
local, state or federal environmental, health or safety statute, regulation,
ordinance, or other requirement of any Governmental Entity, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, and any similar state laws pending or threatened against the Company or
any of its Subsidiaries. Neither the Company nor its Subsidiary is subject to
any agreement, order, judgment, decree, letter or memorandum by or with any
Governmental Entity or third party imposing any liability or obligation with
respect to any of the foregoing. Except as would not reasonably be expected to
result, individually or in the aggregate, in a material liability to the
Company, there is no basis for any of the foregoing.

          

          Section
5.24. Insurance. The
Company maintains policies of insurance in such amounts and against such risks
as are customary in the industries in which the Company operates. All material
insurance policies are in full force and effect and will not in any way be
affected by, or terminate or lapse by reason of, the execution (but not the
performance) of this Agreement.

          

          Section
5.25. Investment
Securities. Each of the Company and its Subsidiary has good title to all
securities (including any evidence of indebtedness) owned by it, free and clear
of any Liens, except (a) for Permitted Liens, (b) restrictions arising under the
Organizational Documents of the issuers of such securities, (c) to the extent
such securities are pledged in connection with the Company Securitization
Documents or (d) for Liens or restrictions which would not individually or in
the aggregate be material with respect to the value, ownership or
transferability of such securities. Such securities are valued on the books of
the Company in accordance with GAAP and the Investment Company Act in all
material respects.

          

          Section
5.26. CDO and CLO
Activities. (a) The Company has delivered or made available to the
Investors true and correct copies of all reports that have been distributed by
the Company or any of its Affiliates to Noteholders and/or Preferred
Shareholders in any of the Funds since December 31, 2006.

          

          (b) Section
5.26(b) of the Company Disclosure Schedule lists each Collateral Management
Agreement and each other CLO Agreement. The Company and its Subsidiary are in
compliance in all material respects with the terms of each Collateral Management
Agreement or other CLO Agreement to which it is a party or pursuant to which it
acts as collateral manager (or in any similar capacity) or performs other
services on behalf of a Fund. No breach by the Company of any Collateral
Management Agreement or other CLO Agreement exists or has occurred since
December 31, 2005, nor has the Company or any Affiliate received any written
notice since December 31, 2005 that any such breach has occurred or is
imminent.

          

          (c) No
exemptive orders, “no-action” letters or similar exemptions or regulatory relief
have been obtained by (or on behalf of) the Company or any of its Affiliates,
nor are any requests by (or on behalf of) the Company or any of its Affiliates,
pending therefor, by or with respect to the Funds or otherwise in connection
with the operation of the Funds, or with respect to any officer, director or
employee of the Company or its Affiliates in connection with the operation of
the Funds.

          

          
            
               

            

            
              26

              
                

              

            

            
               

            

          

           

          (d) The
Company, its Affiliates and the Funds, have complied in all material respects
with all Applicable Laws regarding the privacy of clients and other Persons and,
to the extent required by Applicable Laws, have established compliance policies
and procedures and internal controls in manner consistent with Applicable
Laws.

          

          (e) Section
5.26(e) of the Company Disclosure Schedule sets forth all fee-sharing or other
similar arrangements with respect to any management fees (the “Fee-Sharing Arrangements”) payable by any
Fund to the Company or its Affiliates. Neither the Company nor any Affiliate is
subject to any other priority or other undertakings with respect to the
distribution of any management fees of any Fund other than as set forth in the
applicable Collateral Management Agreement or indenture.

          

          (f) Each Fund
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization (where any such jurisdiction recognizes the concept
of “good standing”), and has the full power and authority to conduct its
business as now conducted by it.

          

          (g) The
operation and transfer of any “warehouse” assets to each Fund was at all times
in compliance in all material respects with all Applicable Laws and the CLO
Agreements and Organizational Documents of such Fund.

          

          (h) There is
no action, suit, investigation or proceeding pending by or before any
Governmental Authority (i) to which a Fund is a party or a target or subject or
(ii) with which a Fund has been threatened in writing, and, to the knowledge of
the Company, there are no facts or circumstances which would reasonably be
expected to give rise to any such action, suit, investigation or
proceeding.

          

          (i) The
acquisition, disposition, management, investment and reinvestment of each of the
Fund’s assets by the Company or its Affiliates (i) have been made in accordance
with the Fund’s indenture (including but not limited to the applicable
Collateral Quality Tests) in effect at the time the investments were made and
(ii) such assets have been held in accordance with all applicable investment
policies and restrictions in effect at the time such investments were held,
except in the case of each of the foregoing (i) and (ii) to the extent the
failure to comply would not, individually or in the aggregate, have a material
impact on the Funds, the Noteholders, or the Preferred
Shareholders.

          

          (j) The
Company has made available to the Investors true, correct and complete copies of
the procedure reports received by the Company from independent accountants
engaged by each Fund with respect to periods from and including December 31,
2007 with respect to specified agreed upon procedures conducted by such
accountants to the extent such reports are required under the applicable
Collateral Management Agreements, indentures or other governing documents of
each Fund. There are no audited financial statements for any
Fund.

          

          (k) None of
the Company or its Affiliates is liable in connection with, on behalf of, or
for, any obligation of any of the Funds.

           

          
            
               

            

            
              27

              
                

              

            

            
               

            

          

          

          (l) No Fund
is the subject of any priority or exclusivity arrangements with respect to the
allocation of investment opportunities that would restrict the ability to
allocate investment opportunities among such Funds.

          

          (m) No Fund
is currently, or has ever been, engaged in the conduct of a trade or business
within the United States for United States federal income tax purposes. No Tax
Authority has asserted in writing to the Company or any Fund, that any Fund is,
or has ever been, engaged in the conduct of a trade or business within the
United States for United States federal income tax purposes, and no Fund has
ever filed a United States Tax Return on that basis. The Company, on behalf of
each of the Funds, has, in all material respects, complied with (A) any and all
tax-related investment guidelines set forth in the Collateral Management
Agreements and (B) any and
all representations, warranties and covenants provided in each of the indentures
and Collateral Management Agreements relating to such Fund not being engaged, or
deemed to be engaged, in a trade or business within the United States for United
States federal, state or local income tax purposes or otherwise subject to
United States federal income tax on a net income tax basis (whether imposed by
withholding or otherwise).

          

          (n) None of
the payments received by the Funds are currently, or have ever been, subject to
any U.S. withholding tax.

          

          
            (o) Except as
disclosed on Section 5.26(o) of the Company Disclosure
Schedule:

          

          

          (i) Each Fund
has timely filed (taking into account all extensions of due dates) all Tax
Returns that it was required to file, and has paid all Taxes due and payable by
it;

          

          (ii) No Tax
Authority is now asserting in writing against any Fund any deficiency or claim
for additional Taxes;

          

          (iii) No Fund
has been notified in writing by any Tax Authority that any audit of a Tax Return
filed by such Fund is contemplated or pending. No Fund has waived any statute of
limitations or agreed to any extension of any applicable statute of limitations
with respect to a Tax assessment or deficiency;

          

          (iv) For each
Fund, no claim has ever been made by a Tax Authority in a jurisdiction where
such Fund does not file reports and returns that such Fund is or may be subject
to taxation by that jurisdiction;

          

          (v) No Fund
has ever entered into a closing agreement pursuant to Section 7121 of the
Code;

          

          (vi) No assets
of any Funds are subject to any claim for Taxes (other than for Taxes not yet
due and payable);

          

          
            (vii) No Fund
is a party to any Tax allocation or sharing agreement;

          

          

          
            
               

            

            
              28

              
                

              

            

            
               

            

          

           

          (viii) All
information returns and other written statements and materials provided by the
Company or the Funds (or any of their respective agents or Affiliates) to the
Preferred Shareholders and Noteholders of each Fund, to the extent relating to
Tax matters (including without limitation the Tax character of income of such
Fund (e.g., capital gains versus ordinary income)), were correct and complete in
all material respects and in compliance with (and otherwise consistent with)
such Fund’s Indenture and other Constituent Documents in all material respects.
Neither The Company nor any of its Affiliates has filed any Tax Return, or
otherwise taken any position, that is inconsistent with such information returns
and other written statements and materials (including without limitation the Tax
character of income of the Funds as reported in such information
returns);

          

          (ix) Each Fund
is, and has at all times during its existence been, treated as a disregarded
entity for U.S. federal, state and local Tax purposes;

          

          (x) No Fund
has engaged in any transaction that is a “reportable transaction” under Section
6011 of the Code and the Treasury Regulations promulgated
thereunder;

          

          (xi) All Taxes
required to be withheld, collected or deposited by each Fund have been timely
withheld, collected or deposited as the case may be, and, to the extent
required, have been paid to the relevant Tax Authority; and

          

          (xii) No
portion of the underlying assets of any Fund constitutes the assets of any (i)
employee benefit plan that is subject to Title I of ERISA, (ii) any plan,
individual retirement account or other arrangement that is subject to Section
4975 of the Code or any other laws or regulations that are similar to the
fiduciary responsibility or prohibited transaction provisions of Title I of
ERISA or Section 4975 of the Code or (iii) any entity whose underlying assets
are considered to include “plan assets” of any of the foregoing plans, accounts
or arrangements pursuant to 29 C.F.R. Section 2510.3-101 (as modified by Section
3(42) of ERISA), or otherwise.

          

          (p) (i) No
consent (negative or affirmative), approval of, or confirmation by, any Fund,
Noteholder, Subordinated Noteholder, Preferred Shareholder, rating agency or any
other Person, in each case under the CLO Agreements, will be required in
connection with the transactions contemplated hereby, (ii) no “key person” or
similar event will occur as a result of the transactions contemplated hereby,
and (iii) immediately following the Closing, without any further action on the
part of the Company, any Affiliate of the Company or Saratoga, the GSCIC
Collateral Management Agreement and each other CLO Agreement to which the
Company is a party will be in full force and effect in accordance with its
terms.

          

          Section
5.27. No Additional
Representations. Except for the representations and warranties made by
the Company in this Article 5 or in any certificate delivered pursuant to this
Agreement, neither the Company nor any other Person makes any express or implied
representation or warranty with respect to the Company or its business,
operations, assets, liabilities, conditions (financial or otherwise) or
prospects, and the Company hereby disclaims

          

          
            
               

            

            
              29

              
                

              

            

            
               

            

          

           

          any such
other representations or warranties. In particular, without limiting the
foregoing disclaimer, neither the Company nor any other Person makes or has made
any representation or warranty to the Investors or any of their respective
Affiliates or Representatives with respect to (i) any financial projection,
forecast, estimate or budget relating to the Company or its business or (ii)
except for the representations and warranties made by the Company in this
Article 5 or in any certificate delivered pursuant to this Agreement, any oral
or written information presented to the Investors or any of their respective
Affiliates or Representatives in the course of their due diligence investigation
of the Company, the negotiation of this Agreement or in the course of the
transactions contemplated hereby.

          

          

          ARTICLE
6

          REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

          

          Each
Investor, severally and not jointly, represents and warrants to the Company as
to the following matters:

          

          Section
6.01. Corporate Existence;
Power and Authority; Enforceability. Each Investor is duly formed,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all corporate or entity powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted. The execution, delivery and performance by each
such Investor of this Agreement and the consummation by such Investor of the
transactions contemplated hereby are within the corporate or entity powers of
such Investor and have been duly authorized by all necessary corporate or entity
action. This Agreement constitutes a valid and binding agreement of each such
Investor, enforceable against such Investor in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditors’ rights generally
and general principles of equity).

          

          Section
6.02. Governmental
Authorization. The execution, delivery and performance by each Investor
of this Agreement and the consummation by each Investor of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
Governmental Authority, other than (i) required filings with the SEC in
connection with the Investment and other transactions contemplated by this
Agreement, (ii) compliance with any applicable requirements of the 1933 Act, the
1934 Act, the Investment Company Act, the Advisers Act and any other state or
federal securities laws, and (iii) other filings with state regulatory agencies
that are necessary or convenient and do not require approval of the agency in
connection therewith.

          

          Section
6.03. Non-
contravention. The execution, delivery and performance by each Investor
of this Agreement and the consummation by each Investor of the transactions
contemplated hereby do not and will not (i) contravene, conflict with, or result
in any violation or breach of any provision of the Organizational Documents of
such Investor, (ii) assuming compliance with the matters referred to in Section
6.02, contravene, conflict with or result in a material violation or material
breach of any provision of any Applicable Law, (iii) require any consent or
other action by any Person under, constitute a default, or an event that, with
or

          

          
            
               

            

            
              30

              
                

              

            

            
               

            

          

           

          without
notice or lapse of time or both, would constitute a default, under, or cause or
permit the termination, cancellation, acceleration or other change of any right
or obligation or the loss of any benefit to which such Investor or any of its
Subsidiaries is entitled under any provision of any Contract, agreement or other
instrument binding upon such Investor or any of its Subsidiaries or any license,
franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of such Investor
and its Subsidiaries or (iv) result in the creation or imposition of any Lien on
any asset of such Investor or any of its Subsidiaries, with only such
exceptions, in the case of each of clauses (iii) and (iv), as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

          

          Section
6.04. Compliance with Laws and
Court Orders. Each Investor is in compliance with, and to its knowledge
is not under investigation with respect to and has not been threatened to be
charged with or given notice of any violation of, any Applicable Law, except for
violations that would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. There is no judgment, decree, injunction,
rule or order of any arbitrator or Governmental Authority outstanding against
any Investor that has had or would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect or that in any manner seeks to
prevent, enjoin, alter or materially delay the Investment or any of the other
transactions contemplated hereby. Each such Investor has no knowledge as of the
date hereof of any investigations or charges that has had or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or
that in any manner seeks to prevent, enjoin, alter or materially delay the
Investment or any of the other transactions contemplated
hereby.

          

          Section
6.05. Financing. (a)
Each Investor has, or will have prior to Closing, sufficient cash, available
lines of credit or other sources of immediately available funds to enable it to
make its respective payment of the purchase price of the Investment and any
other amounts expressly required to be paid by such Investor
hereunder.

          

          (b)
Saratoga has received a Commitment Letter from an Affiliate of Saratoga, dated
as of April 14, 2010 and attached hereto as Exhibit H (the “Saratoga Commitment Letter”),
pursuant to which the Affiliate of Saratoga has agreed, subject to the
satisfaction of the conditions to Closing set forth herein (including the
satisfaction of the conditions to the obligation of the Replacement Lender to
fund amounts under the Replacement Facility), that in the event that the
Investors shall not have satisfied the obligation to purchase the Shares as
contemplated by this Agreement (unless the obligation to acquire the Shares has
been assumed and satisfied by the Persons listed on Schedule I), the
Affiliate of Saratoga shall loan to Saratoga an amount in cash equal to
$12,800,000 in order to allow the Investors to purchase the Shares and, when
added to funds available to CLO Partners as indicated in Section 6.05(a), to
consummate the transactions contemplated by this Agreement.

          

          Section
6.06. Litigation. As of
the date hereof, there is no action, suit, investigation or proceeding pending
against, or, to its knowledge, threatened against or affecting, any Investor,
any present or former officer, director or employee of such Investor or any
other Person for whom such Investor may be liable or any of their respective
properties before (or, in the case of threatened actions, suits, investigations
or proceedings, would be before) or by any

          

          
            
               

            

            
              31

              
                

              

            

            
               

            

          

           

          Governmental
Authority or arbitrator that, if determined or resolved adversely in accordance
with the plaintiff’s demands, would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.

          

          Section
6.07. Purchase for Own
Account. The Shares will be acquired by each Investor for its own
account, not as a nominee or agent, and not with a view to or in connection with
the public sale or public distribution of any part thereof (except for the
Transfer of Shares at Closing to the Permitted Transferees as set forth on Schedule I hereto and
as contemplated by this Agreement), without prejudice, however, to such
Investor’s right at all times to sell or otherwise dispose of all or any part of
the Shares pursuant to an effective registration statement under the 1933 Act
and applicable state securities laws, or under an exemption from such
registration available under the 1933 Act and other applicable state securities
laws. Each Investor is not acting as an agent, representative, intermediary,
nominee, derivative counterparty or in a similar capacity for any other Person,
nominee account or beneficial owner, whether a natural person or Entity (each
such natural person or Entity, an “Underlying Beneficial Owner”),
and no Underlying Beneficial Owner will have a beneficial or economic interest
in the Shares being purchased by such Investor (whether directly or indirectly,
including through any option, swap, forward or any other hedging or derivative
transaction). For purposes of this Agreement, “Entity” means any entity,
including a fund-of-funds, trust, pension plan or other entity that is not a
natural person.

          

          Section
6.08. Accredited
Investor. Each Investor is an “Accredited Investor” as defined in Rule
501(a) of Regulation D promulgated under the 1933 Act.

          

          Section
6.09. Exempt from
Registration; Restricted Securities. Each Investor understands that the
Shares being purchased hereunder are restricted securities within the meaning of
Rule 144 under the 1933 Act; and that the Shares are not registered and must be
held indefinitely unless they are subsequently registered or an exemption from
such registration is available.

          

          

          Section
6.10. Restrictive
Legends. Each Investor understands that each certificate representing the
Shares shall be stamped or otherwise imprinted with a legend substantially in
the following form:

          

          THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER THE ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO AN EFFECTIVE REGISTRATION
OR AN EXEMPTION FROM REGISTRATION WHICH, IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY, IS AVAILABLE.

          

          
            
               

            

            
              32

              
                

              

            

            
               

            

          

           

          INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THIS SECURITY IS ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK PURCHASE AGREEMENT
DATED AS OF APRIL 14, 2010, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM
GSC INVESTMENT CORP. OR ANY SUCCESSOR THERETO.

          

          Section
6.11. Removal of Restrictive
Legend. The legend set forth above shall be removed by the Company from
any certificate evidencing Shares upon delivery to the Company of an opinion by
counsel, reasonably satisfactory to the Company, that a registration statement
under the 1933 Act is at that time in effect with respect to the legend security
or that such security can be freely transferred in a public sale without such a
registration statement being in effect and that such transfer will not
jeopardize the exemption or exemptions from registration pursuant to which the
Company issued the Shares.

          

          Section
6.12. Money Laundering
Laws. The operations of each Investor is and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Investors or any of their respective Affiliates with respect to the Money
Laundering Laws is pending or, to the knowledge of the Investors,
threatened.

          

          Section
6.13. Disclosure
Documents. The information supplied by the Investors for inclusion in the
Proxy Statement, or any amendment or supplement thereto, to be sent to the
Company stockholders in connection with the Investment and the other
transactions contemplated by this Agreement shall not, on the date the Proxy
Statement, and any amendments thereto, is first mailed to the stockholders of
the Company or at the time of the Company Stockholder Approvals, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading.

          

          Section
6.14. Investment Adviser and
Administrator. (a) Saratoga has the limited liability company power and
authority to execute, deliver and perform the Replacement Management
Agreements.

          

          (b) There
is no pending nor, to the best knowledge of Saratoga, threatened action, suit,
proceeding, or investigation before or by any court, arbiter, governmental,
regulatory, self-regulatory or exchange body or agency to which Saratoga or any
of its principals is a party which would reasonably be expected to result in any
material adverse change in the ability of Saratoga or its principals to perform
their obligations under the Replacement Management
Agreements.

          

          
            
               

            

            
              33

              
                

              

            

            
               

            

          

           

          (c) Neither
Saratoga nor any of its employees or Affiliates has engaged in any of the
activities specified in the Sections 203(e)(1) through 203(e)(8) of the Advisers
Act, and no condition described in any such Section is applicable to Saratoga or
any such employee or Affiliate.

          

          (d) Neither
Saratoga nor any respective “affiliated person” (as defined under the Investment
Company Act) thereof is subject to disqualification as an investment adviser or
subject to disqualification to serve in any other capacity contemplated by the
Investment Company Act for any investment company under Sections 9(a) and 9(b)
of the Investment Company Act. There is no proceeding or investigation pending
or, to the best knowledge of Saratoga, threatened that would reasonably be
expected to become the basis for any such disqualification.

          

          (e) Saratoga
is an investment adviser that has been registered with the SEC pursuant to
Section 203 of the Advisers Act. Saratoga has delivered to the Company all
information required by Form ADV Part I and Form ADV Part II with respect to
Saratoga as an investment adviser in connection with its registration pursuant
to Section 203 of the Advisers Act, and the information contained therein does
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.

          

          (f) The
Replacement Lender is not an “affiliated person” (as such term is defined in
Section 2(a)(3) of the Investment Company Act) of Saratoga.

          

          Section
6.15. Finders’ Fees.
There is no investment banker, broker, finder or other intermediary that has
been retained by or is authorized to act on behalf of the Investors who might be
entitled to any fee or commission from the Company or any of its Affiliates upon
consummation of the Investment or the other transactions contemplated by this
Agreement.

          

          Section
6.16. No Additional
Representations. Except for the representations and warranties made by
each Investor in this Article 6 or in any certificate delivered pursuant to this
Agreement, none of the Investors nor any other Person makes any express or
implied representation or warranty with respect to such Investor or its
business, operations, assets, liabilities, conditions (financial or otherwise)
or prospects, and each such Investor hereby disclaims any such other
representations or warranties.

          

          

          ARTICLE
7

          COVENANTS OF THE COMPANY

          

          Section
7.01. Conduct of the
Company. From the date hereof until Closing, the Company shall conduct
its business in the ordinary course in a manner that is consistent with past
practice and use its reasonable best efforts to (i) preserve intact its present
business organization, (ii) maintain in effect all of its foreign, federal,
state and local licenses, permits, consents, franchises, approvals and
authorizations, (iii) keep available the services of its
directors

          
            
               

            

            
              34

              
                

              

            

            
               

            

          

          

          and
officers and (iv) maintain satisfactory relationships with its Lender and others
having material business relationships with it. Without limiting the generality
of the foregoing, except as expressly contemplated by this Agreement, the
Company shall not:

          

          
            (a) amend its
charter or bylaws (whether by merger, consolidation or
otherwise);

          

          

          (b) (i)
split, combine or reclassify any shares of its stock, (ii) declare, set aside or
pay any dividend or other distribution (whether in cash, stock or property or
any combination thereof) in respect of its stock, except as necessary to
maintain the Company’s qualification for treatment as a regulated investment
company under Subchapter M of the Code and/or to avoid corporate-level Tax, or
(iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or
otherwise acquire any Company Securities;

          

          (c) (i)
issue, deliver or sell, or authorize the issuance, delivery or sale of, any
Company Securities or (ii) amend any term of any Company Security (in each case,
whether by merger, consolidation or otherwise);

          

          
            (d) incur any
material capital expenditures or any obligations or liabilities in respect
thereof;

          

          

          (e) acquire
(by merger, consolidation, acquisition of stock or assets or otherwise),
directly or indirectly, any assets, securities, properties, interests or
businesses, other than in the ordinary course of business of the Company in a
manner that is consistent with past practice;

          

          (f) sell,
lease, license or otherwise transfer, or create or incur any Lien on, any of the
Company’s assets, securities, properties, interests or businesses, other than
sales in the ordinary course of business of the Company in a manner that is
consistent with past practice;

          

          (g) other
than in connection with actions permitted by Section 7.01(e), make any loans,
advances or capital contributions to, or investments in, any other Person, other
than in the ordinary course of business of the Company in a manner that is
consistent with past practice;

          

          (h) create,
incur, assume, suffer to exist or otherwise be liable with respect to any
indebtedness for borrowed money or guarantees thereof, other than under the
Company Securitization Documents and other than in the ordinary course of
business of the Company in a manner that is consistent with past
practice;

          

          (i) enter
into, modify, amend or terminate any material Contract or waive, release or
assign any rights or claims thereunder, which if so entered into, modified,
amended, terminated, waived, released or assigned would be reasonably likely to
(i) impair the ability of the Company to perform its obligations under this
Agreement in any material respect or (ii) prevent or materially delay the
consummation of the transactions contemplated hereby; or take any other action
intended to or that would reasonably be expected to, individually or in the
aggregate, impede, interfere with, prevent, or materially delay the consummation
of the transactions contemplated by this Agreement;

          

          
            
               

            

            
              35

              
                

              

            

            
               

            

          

           

          (j) adopt a
plan of complete or partial liquidation or resolutions providing for a complete
or partial liquidation, dissolution, or recapitalization of the shares of the
Company;

          

          (k) change
the Company’s methods of accounting, except as required by concurrent changes in
GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent
public accountants;

          

          (l) settle,
or offer or propose to settle, (i) any material litigation, investigation,
arbitration, proceeding or other claim involving or against the Company, (ii)
any stockholder litigation or dispute against the Company or any of its officers
or directors or (iii) any litigation, arbitration, proceeding or dispute that
primarily relates to the transactions contemplated hereby;

          

          (m) take any
action that would make any representation or warranty of the Company hereunder,
or omit to take any action necessary to prevent any representation or warranty
of the Company hereunder from being, inaccurate in any material respect at, or
as of any time before, the Closing; or

          

          
            (n) agree,
resolve or commit to do any of the foregoing.

          

          

          Section
7.02. Company Stockholder
Meeting. The Company shall cause a meeting of its stockholders (the
“Company Stockholder
Meeting”) to be duly called and held as soon as reasonably practicable
(but in no event later than 45 days after the date of the first mailing of the
Proxy Statement) for the purpose of considering and voting on proposals to (i)
approve the issuance of Shares to the Investors pursuant to this Agreement in
accordance with the NYSE Rules and the issuance of Shares to the Investors at a
price per share below the then-current net asset value in accordance with the
requirements of Section 23(b) of the Investment Company Act, and (ii) approve
the Replacement Advisory Agreement in accordance with Section 15 of the
Investment Company Act (the proposals referenced above, collectively, the “Company Stockholder Proposals”, and
the approval thereof by the Company’s stockholders, collectively referred to as the
“Company Stockholder
Approvals”). The Company shall engage a proxy soliciting firm reasonably
acceptable to Saratoga to assist in the solicitation of proxies with respect to
the Company Stockholder Proposals at the Company Stockholder
Meeting.

          

          Section
7.03. No Solicitation; Other
Offers. (a) General Prohibitions.
Subject to Section 7.03(b), the Company shall not, and shall not authorize or
permit any of its officers, directors, employees, investment bankers, attorneys,
accountants, consultants or other agents or advisors (“Representatives”) to, directly
or indirectly, (i) solicit, initiate or take any action to facilitate or
encourage the submission of any Acquisition Proposal, (ii) enter into or
participate in any discussions or negotiations with, furnish any information
relating to the Company or any of its Subsidiaries or afford access to the
business, properties, assets, books or records of the Company to, otherwise
cooperate in any way with, or knowingly assist, participate in, facilitate or
encourage any effort by any Third Party that is seeking to make, or has made, an
Acquisition Proposal, (iii) withdraw, fail to make, or modify in a manner
adverse to the Investors the Company Board Recommendation (or recommend an
Acquisition Proposal or take any action or make any statement inconsistent with
the Company Board Recommendation) (any of the

          

          
            
               

            

            
              36

              
                

              

            

            
               

            

          

           

          foregoing
in this clause (iii), an “Adverse Recommendation
Change”), (iv) grant any waiver or release under, or fail to enforce the
terms of, any confidentiality, standstill or similar agreements or arrangements
with respect to any class of equity securities or assets of the Company, or (v)
enter into any agreement in principle, letter of intent, term sheet, merger
agreement, acquisition agreement, option agreement or other similar instrument
relating to an Acquisition Proposal.

          

          (b) Exceptions.
Notwithstanding Section 7.03(a), but subject at all times to satisfaction of the
conditions in Section 7.03(c), at any time prior to receipt of the Company
Stockholder Approvals:

          

          (i) the
Company, directly or indirectly through advisors, agents or other
intermediaries, may (A) engage in negotiations or discussions with any Third
Party and its Representatives or financing sources that, subject to the
Company’s compliance with Section 7.03(a), has made after the date of this
Agreement a bona fide,
written Acquisition Proposal that the Board reasonably believes will lead to a
Superior Proposal and (B) furnish to such Third Party or its Representatives or
financing sources non-public information relating to the Company pursuant to a
confidentiality agreement (a copy of which shall be provided for informational
purposes only to Saratoga) with such Third Party with terms no less favorable to
the Company than those contained in the Confidentiality Agreement; provided that all such
information (to the extent that such information has not been previously
provided or made available to Saratoga) is provided or made available to
Saratoga, as the case may be, prior to or substantially concurrently with the
time it is provided or made available to such Third Party) and (C) take any
nonappealable, final action that any court of competent jurisdiction orders the
Company to take; and

          

          
            (ii) the Board
may make an Adverse Recommendation Change;

          

          

          in each
case referred to in the foregoing clauses (i) and (ii) only if (A) such
Acquisition Proposal was not solicited in violation of Section 7.03(a), (B) the
Acquisition Proposal was from a Third Party that is financially and legally
qualified to make such proposal, (C) such Acquisition Proposal was not made by
the Third Party in violation of any confidentiality, standstill or similar
agreement or arrangement between the Company and such Third Party (or their
respective Representatives and Affiliates) or to which, to the best knowledge of
the Company (based on a written certification from such Third Party), such Third
Party is a party or is otherwise bound, (D) the Board determines in good faith,
after consultation with outside legal counsel, that the failure to take such
action would be inconsistent with the duties of the Board under Maryland Law,
and (E)
simultaneous with the delivery of such Acquisition Proposal intended by such
Third Party to be binding on such Third Party and to constitute a Superior
Proposal, and the Board is prepared to recognize such Acquisition Proposal as a
Superior Proposal, the Third Party deposits with the Company a cash deposit in
an amount equal to the Termination Fee.

          

          In
addition, nothing contained herein shall prevent the Board from complying with
Rule 14e-2(a) under the 1934 Act with regard to an Acquisition Proposal so long
as any action taken or statement made to so comply is consistent with this
Section 7.03; provided
that any such

           

          
            
               

            

            
              37

              
                

              

            

            
               

            

          

          

          action
taken or statement made that relates to an Acquisition Proposal shall be deemed
to be an Adverse Recommendation Change unless the Board reaffirms the Company
Board Recommendation in such statement or in connection with such
action.

          

          (c) Required Notices. The
Board shall not take any of the actions referred to in Section
7.03(b)(i) unless the Company shall have delivered to Saratoga a prior written
notice advising Saratoga that it intends to take such action and the Company
shall notify Saratoga promptly (but in no event later than 48 hours) after
receipt by the Company (or any of its Representatives) of any Acquisition
Proposal, and the Company shall not take any action referred to in Section
7.03(b)(ii) unless the Acquisition Proposal was made in accordance with Section
7.03(b), the Company has not breached in any material respect any provision of
this Agreement, and Investors have received from the Company a notice (a “Change of Recommendation Notice”) at
least 5 Business Days prior to such proposed Adverse Recommendation Change,
which notice shall (i) expressly state that the Company has received an
Acquisition Proposal which the Board has determined is a Superior Proposal and
that the Company intends to effect an Adverse Recommendation Chance and the
manner in which it intends to do so, and (ii) includes a copy and summary of the
material terms of such Acquisition Proposal; provided that any material
amendment to the terms of such Acquisition Proposal shall require a Change of
Recommendation Notice at least 3 Business Days prior to a new Adverse
Recommendation Change. During any such notice period, the Company and its
advisors shall negotiate in good faith with Investors to make adjustments to the
terms and conditions of this Agreement such that the Acquisition Proposal in
question would no longer constitute a Superior Proposal.

          

          (d) Obligation to Terminate
Existing Discussions. The Company shall, and shall cause its Subsidiary
and their respective Representatives to, cease immediately and cause to be
terminated any and all existing activities, discussions or negotiations, if any,
with any Third Party and its Representatives and its financing sources conducted
prior to the date hereof with respect to any Acquisition Proposal and shall take
all actions as may be reasonably necessary to enforce the terms of any existing
confidentiality, standstill or similar arrangement with any Third
Party.

          

          Section
7.04. Tax Matters. (a)
From the date hereof until the Closing, the Company shall not, without the prior
written consent of Saratoga: (i) make or change any material Tax election, (ii)
change any annual tax accounting period, (iii) adopt or change any method of tax
accounting or (iv) take or omit to take any other action, other than in the
ordinary course of business, if any such action or omission would have the
effect of increasing the taxable income or reducing any Tax asset of the
Company.

          

          (b) From
the date hereof until the Closing, the Company shall not, without the prior
written consent of Saratoga: (i) file any material amended Tax Return or claim
for any material Tax refund, (ii) enter into any material closing agreement,
(iii) settle any material Tax liability, (iv) surrender or compromise any
material Tax claim, audit or assessment, (v) surrender or compromise any right
to claim a material Tax refund, offset or other reduction in Tax liability,
or

          

          
            
               

            

            
              38

              
                

              

            

            
               

            

          

          (vi)
consent to any extension or waiver of the limitations period applicable to any
Tax claim or assessment.

          

          (c) The
Company shall establish or cause to be established in accordance with GAAP on or
before the Closing an adequate accrual for all material Taxes due with respect
to any period or portion thereof ending prior to or as of the
Closing.

          

          (d) The
Company shall prepare and duly and timely file all Tax Returns of the Company
that are required to be filed on or before the Closing with any Taxing
Authority, subject to any extension permitted by Applicable Law; provided that, the Company
notifies Saratoga that it is availing itself of any such extension, and provided, further, that any such
extension does not adversely affect the Company’s regulated investment company
status. All such Tax Returns shall be prepared on a basis consistent with the
most recent Tax Returns of the Company unless the Company determines that there
is no reasonable basis for such position, and shall be true, correct and
complete in all material respects. The Company shall provide Saratoga with a
copy of such Tax Return within a reasonable period of time.

          

          Section
7.05. Stock Split and Ticker
Symbol Change. (a) Immediately following the Closing, the Board shall
amend the Company’s charter, if necessary and without action of the Company’s
stockholders, or take such other required action to effect a reverse stock split
that results in a combination of shares of Common Stock at a ratio of 10 shares
of Common Stock into one share of Common Stock.

          

          (b) As
soon as reasonably practicable following the Closing, and subject to obtaining
the requisite approval of the NYSE, the Company shall change the stock or ticker
symbol for its Common Stock from “GNV” to a stock or ticker symbol that is
reasonably acceptable to Saratoga.

          

          

          ARTICLE
8

          COVENANTS OF THE INVESTORS

          

          Section
8.01. Voting of Shares.
Each Investor agrees that it shall vote all shares of Common Stock, if any,
beneficially owned by it or any of its Subsidiaries in favor of the Company
Stockholder Proposals at the Company Stockholder Meeting.

          

          Section
8.02. Amendment of Saratoga
Commitment Letter. Saratoga shall not, without the written consent of the
Company, amend or modify the terms of the Saratoga Commitment Letter in a manner
detrimental, in the reasonable opinion of the Company, to the consummation of
the transactions contemplated by this Agreement or, except as provided in the
Saratoga Commitment Letter, otherwise release the Affiliate of Saratoga from any
of its obligations under the Saratoga Commitment Letter.

          

          Section
8.03. Transfer of Shares to
Permitted Transferees. (a) Prior to or at the Closing, the Investors
shall cause each Permitted Transferee set forth on Schedule I hereto, or
such other

          

          
            
               

            

            
              39

              
                

              

            

            
               

            

          

          

          

            Person as
described in Section 8.03(b)(ii) below, to agree in writing to be bound the
terms of this Agreement by executing a Joinder Agreement in substantially the
form attached hereto as Exhibit G and shall
deliver a copy of each such Joinder Agreement to the Company prior to or at the
Closing.

            

            (b)
Simultaneously with the Closing, the Investors will Transfer, or cause to be
Transferred, the Shares to (i) the Persons set forth on Schedule I hereto and
in the amounts indicated therein or (ii) any other Person with respect to which
the Board shall have adopted a resolution (which shall have been unanimously
approved by the independent directors of the Board) stating that the Board has
no objection if a Transfer of Shares is made to such Person; provided that the Investors
shall provide the Board with reasonable advance notice (in no event shall such notice be
received by the Board less than 10 Business Days prior to Closing) of an
intention to Transfer any Shares to a Person other than those Permitted
Transferees set forth on Schedule I
hereto.

            

            

            ARTICLE
9

            COVENANTS OF THE INVESTORS AND THE COMPANY

            

            The
parties hereto agree that:

            

            Section
9.01. Reasonable Best
Efforts. (a) Subject to the terms and conditions of this Agreement, the
Company and each Investor shall use their reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable hereunder and under Applicable Law to consummate
the transactions contemplated by this Agreement, including without limitation
(i) preparing and filing as promptly as practicable with any Governmental
Authority or other third party all documentation to effect all necessary
filings, notices, petitions, statements, registrations, submissions of
information, applications and other documents and (ii) obtaining and maintaining
all approvals, consents, registrations, permits, authorizations and other
confirmations required to be obtained from any Governmental Authority or other
third party that are necessary, proper or advisable to consummate the
transactions contemplated by this Agreement; provided that the parties
hereto understand and agree that the reasonable best efforts of any party hereto
shall not be deemed to include entering into any settlement, undertaking,
consent decree, stipulation or agreement with any Governmental Authority in
connection with the transactions contemplated hereby.

            

            (b)
Subject to the terms and conditions of this Agreement, the Company and the
Investors shall use their reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate the transactions contemplated by the Replacement
Facility.

            

            Section
9.02. Proxy Statement.
(a) As promptly as practicable and in no event later than 30 days after the date
hereof, the Company shall file a preliminary proxy statement on Schedule 14A
with the SEC (the “Preliminary
Proxy Statement”) and, subsequent to receiving clearance from the SEC, a
definitive proxy statement on Schedule 14A (the “Definitive
Proxy

            

             

            
              
                 

              

              
                40

                
                  

                

              

              
                 

              

            

            

            Statement”). Subject to
Section 7.03, the Proxy Statement shall include the Company Board Recommendation in favor
of each of the Company Stockholder Proposals. The Company shall use its
reasonable best efforts to cause the Definitive Proxy Statement to be mailed to
its stockholders as promptly as practicable after the SEC clears any and all
outstanding comments to the Proxy Statement. The Company shall promptly provide
copies, consult with Saratoga and prepare written responses with respect to any
written comments received from the SEC with respect to the Proxy Statement and
shall notify Investor of any oral comments received from the SEC. The Company
shall use its reasonable best efforts to ensure that the Proxy Statement
complies in all material respects with the rules and regulations promulgated by
the SEC under the 1934 Act (including Section 14 thereof), and the Proxy
Statement will be complete in all material respects and will not contain (at the
time such materials or information are distributed, filed or provided, as the
case may be and at the time of the applicable shareholder vote or action,
including any supplement thereto) any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading or necessary to correct any statement or any earlier communication
with respect to the solicitation of a proxy for the same meeting or subject
matter which has become false or misleading.

            

            (b) Saratoga
(acting on behalf of, and with respect to, the Investors) shall use its
reasonable best efforts to ensure that the information it supplies to the
Company for inclusion in the Proxy Statement will be complete in all material
respects and will not contain (at the time such materials or information are
distributed, filed or provided, as the case may be and at the time of the
applicable stockholder vote or action, including any supplement thereto) any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading or necessary to correct any statement
or any earlier communication with respect to the solicitation of a proxy for the
same meeting or subject matter which has become false or
misleading.

            

            (c) The
Company will advise Saratoga promptly after it receives notice thereof of the
time when the Proxy Statement has been cleared by the SEC or any request by the
SEC for amendment of the Proxy Statement or comments thereon and responses
thereto or requests by the SEC for additional information. No amendment to the
Proxy Statement shall be filed without the approval of Saratoga, which approval
shall not be unreasonably withheld or delayed. If, at any time prior to the
Closing, any information relating to the Company, or any of its respective
Affiliates, officers or directors should be discovered by the Company or
Saratoga that should be set forth in an amendment to the Proxy Statement so that
such documents would not include any misstatement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, the party hereto
that discovers such information shall promptly notify the other parties hereto
and an appropriate amendment describing such information shall be promptly filed
with the SEC and, to the extent required by law, disseminated to the
stockholders of the Company.

            

            Section
9.03. Public
Announcements. Saratoga (acting on behalf of the Investors) and the
Company shall consult with each other before issuing any press release, having
any

            

             

            
              
                 

              

              
                41

                
                  

                

              

              
                 

              

            

            

            communication
with the press (whether or not for attribution), making any other public
statement or scheduling any press conference or conference call with investors
or analysts with respect to this Agreement or the transactions contemplated
hereby and, except in respect of any public statement or press release as may be
required by Applicable Law or any listing agreement with or rule of any national
securities exchange or association, shall not issue any such press release or
make any such other public statement or schedule any such press conference or
conference call without the consent of the other party.

            

            Section
9.04. Access to
Information. From the date hereof until the Closing and subject to
Applicable Law and the Confidentiality Agreement, the Company and Saratoga shall
(i) give to the other party, its counsel, financial advisors, auditors and other
authorized representatives reasonable access to the offices, properties, books
and records of such party, (ii) furnish to the other party, its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information as such Persons may reasonably request
and (iii) instruct its employees, counsel, financial advisors, auditors and
other authorized representatives to cooperate with the other party in its
investigation. Any investigation pursuant to this Section 9.04 shall be
conducted in such manner as not to interfere unreasonably with the conduct of
the business of the other party. No information or knowledge obtained in any
investigation pursuant to this Section 9.04 shall be deemed to modify any
representation or warranty made by any party hereunder.

            

            Section
9.05. Notices of Certain
Events. Each of the Company and Saratoga (acting on behalf of the
Investors) shall promptly notify the other of:

            

            (a) any
notice or other communication from any Person alleging that the consent of such
Person is or may be required in connection with the transactions contemplated by
this Agreement;

            

            
              (b)  any
discussions/negotiations with, or communications received from or provided to,
the
Lender;

            

            

            
              (c)  any
notice or other communication from any Governmental Authority in connection
with the transactions contemplated by this Agreement;

            

            

            (d) any
actions, suits, claims, investigations or proceedings commenced or, to its
knowledge, threatened against, relating to or involving or otherwise affecting
the Company and its Subsidiary or any Investor and any of their respective
Subsidiaries, as the case may be, that, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to any
Section of this Agreement or that relate to the consummation of the transactions
contemplated by this Agreement;

            

            (e) any
inaccuracy of any representation or warranty contained in this Agreement at any
time during the term hereof that could reasonably be expected to cause the
conditions set forth in Article 10 not to be satisfied; and

            

            
              
                 

              

              
                42

                
                  

                

              

              
                 

              

            

            

            

            (f) any
failure of that party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder;

            

            provided that the delivery of
any notice pursuant to this Section 9.05 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.

            

            Section
9.06. Director and Officer
Liability. (a) For six years after the Closing, the Company shall, and
Saratoga shall not take any action, including any action with respect to the
voting of its shares, that will prevent or otherwise impair the Company’s
ability to do so, indemnify and hold harmless the present and former officers
and directors of the Company or a member of the Company’s investment committee
or disclosure committee (each, an “Indemnified Person”) in
respect of acts or omissions occurring at or prior to the Closing to the fullest
extent permitted by Maryland Law or any other Applicable Law or provided under
the Company’s charter and bylaws in effect on the date hereof; provided that such
indemnification shall be subject to any mandatory limitation imposed from time
to time under Applicable Law.

            

            (b) For six
years after the Closing, Saratoga shall not take any action, including any
action with respect to the voting of its shares, that would prevent the Company
from maintaining in effect, or would otherwise materially modify, change or
alter, the provisions in the Company’s charter and bylaws (or in such documents
of any successor to the business of the Company) regarding elimination of
liability of directors, indemnification of officers, directors and employees and
advancement of expenses that are no less advantageous to the intended
beneficiaries than the corresponding provisions in existence on the date of this
Agreement.

            

            (c) For six
years after the Closing, Saratoga shall not take any action, including any
action with respect to the voting of its shares and the abstention from voting
on such matters by the Saratoga Directors (except as otherwise required by
applicable statutory or fiduciary duties under Maryland Law), that would (i)
prevent the Company from maintaining in effect, or (ii) otherwise materially
modify, change or alter the terms, conditions, retentions and limits of
liability in manner that is less favorable than as currently provided in the
Company’s existing policies as of the date hereof, the provisions in the
Company’s existing directors’ and officers’ insurance policies at coverage
levels equal to or greater than $20 million in the
aggregate.

            

            (d) These
rights shall survive consummation of the Investment and the other transactions
contemplated hereby and are intended to benefit, and shall be enforceable by,
each Indemnified Person.

            

            Section
9.07. Confidentiality.
Prior to the Closing and after any termination of this Agreement, each Investor
and the Company shall hold, and shall use its best efforts to cause its
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to hold, in confidence, unless compelled to disclose by Applicable Law,
all confidential documents and information concerning the other party furnished
to it or its Affiliates in connection with the transactions contemplated by this
Agreement, except to the extent that such information can be shown to have been
(a) previously known on a nonconfidential basis by such party, (b) in the public
domain through no fault of such party or (c) later lawfully acquired by such
party from

            

             

            
              
                 

              

              
                43

                
                  

                

              

              
                 

              

            

            

            sources
other than the other party; provided that each Investor
and the Company may disclose such information to its officers, directors,
employees, accountants, counsel, consultants, advisors and agents in connection
with the transactions contemplated by this Agreement so long as such party
informs such Persons of the confidential nature of such information and directs
them to treat it confidentially. Each Investor and the Company shall satisfy its
obligation to hold any such information in confidence if it exercises the same
care with respect to such information as it would take to preserve the
confidentiality of its own similar information. If this Agreement is terminated,
each Investor and the Company shall, and shall use its best efforts to cause its
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to, destroy or deliver to the other party, upon request, all documents
and other materials, and all copies thereof, that it or its Affiliates obtained,
or that were obtained on their behalf, from the other party in connection with
this Agreement and that are subject to such confidence; provided, however, that each of
Saratoga and the Company (i) may retain one set of such confidential information to the
extent required by law or their respective document retention policies and (ii)
are not required to destroy any computer records or files containing such
confidential information that have been created pursuant to automatic archiving
and back-up procedures and that cannot be reasonably deleted. Any confidential
information so retained by Saratoga or the Company pursuant to the foregoing
sentence shall continue to be held in strict confidence in accordance with the
terms and conditions of this Agreement.

            

            Section
9.08. Takeover
Statutes. If any Takeover Statute shall become applicable to the
Investment or the other transactions contemplated hereby, each of the Company
and Saratoga and the respective members of their boards of directors shall, to
the extent permitted by Applicable Law, use reasonable best efforts to grant
such approvals and take such actions as are necessary so that the transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated herein and otherwise act to eliminate or minimize the
effects of such Takeover Statute on the transactions contemplated
hereby.

            

            

            ARTICLE
10

            CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

            

            Section
10.01. Conditions to the
Obligations of Each Party. The obligations of the Company and the
Investors to consummate the Investment and the other transactions contemplated
hereby are subject to the satisfaction of the following
conditions:

            

            (a) the
Company Stockholder Approvals shall have been obtained in accordance with the
Investment Advisers Act, the Investment Company Act, the NYSE Rules and, if
required by Maryland Law, Maryland Law;

            

            (b) no
Applicable Law shall prohibit the consummation of the Investment and the other
transactions contemplated hereby;

            

            (c) (i) there
shall not have been instituted or pending any action or proceeding by any
Governmental Authority challenging or seeking to make illegal, to delay
materially or otherwise

            

             

            
              
                 

              

              
                44

                
                  

                

              

              
                 

              

            

             

            
 

            directly
or indirectly to restrain or prohibit the consummation of the Investment,
seeking to obtain material damages or otherwise directly or indirectly relating
to the transactions in connection with the Investment or the other transactions
contemplated by this Agreement, and (ii) there shall not have been any action
taken, or any Applicable Law enacted, enforced, promulgated, issued or deemed
applicable to the Investment, by any Governmental Authority, that, in the
reasonable judgment of Saratoga and the Company, is likely, directly or
indirectly, to result in any of the consequences referred to in clause (i)
above;

            

            (d) the
Company or a Subsidiary of the Company shall have entered into the Replacement
Facility with the Replacement Lender, effective as of the Closing, all
conditions to borrowing under the Replacement Facility shall have been
satisfied, and the Company or a Subsidiary of the Company shall have the right,
at or immediately following the Closing, to immediately draw down under the
Replacement Facility an amount of cash at least equal to (i) the remaining
portion of the Loan Repayment after applying the aggregate proceeds received in
connection with the Investment, plus (ii) all fees and expenses accrued or
payable by the Company as of the Closing or immediately thereafter with respect
to the transactions contemplated by this Agreement and the Replacement Facility
(in accordance with the terms set forth in such document), and all commercially
reasonable steps required to make the Loan Repayment shall have been taken;
and

            

            (e) all
actions by or in respect of, or filings with, any Governmental Authority,
required to permit the consummation of the Investment and the other transactions
contemplated hereby, shall have been taken, made or
obtained.

            

            Section
10.02. Conditions to the
Obligations of the Investors. The obligations of the Investors to
consummate the Investment and the other transactions contemplated hereby are
subject to the satisfaction of the following further
conditions:

            

            (a) (i)
the Company shall have performed in all material respects all of its obligations
hereunder required to be performed by it at or prior to the Closing, (ii) (A)
the representations and warranties contained in Section 5.02(a), 5.02(b),
5.10(a), 5.10(b), 5.16(f) and 5.26(p) shall be true and correct in all respects
as of the date hereof and as of the Closing as if made at and as of such time;
(B) the representations and warranties of the Company contained in Section 5.01,
5.05, 5.06, 5.20, 5.21 and 5.25 (disregarding all materiality and Material
Adverse Effect qualifications contained therein) shall be true and correct in
all material respects as of the date hereof and at and as of the Closing as if
made at and as of such time (other than such representations and warranties that
by their terms address matters only as of another specified time, which shall be
true in all material respects only as of such time); and (C) the other
representations and warranties of the Company contained in this Agreement or in
any certificate or other writing delivered by the Company pursuant hereto
(disregarding all materiality and Material Adverse Effect qualifications
contained therein) shall be true as of the date hereof and at and as of the
Closing as if made at and as of such time (other than representations and
warranties that by their terms address matters only as of another specified
time, which shall be true only as of such time), with, in the case of this
clause (C) only, only such exceptions as have not had and would not reasonably
be expected to have, individually or in the aggregate, a

            

            

            
              
                 

              

              
                45

                
                  

                

              

              
                 

              

            

            

             

            Material
Adverse Effect; and (iii) Saratoga shall have received a certificate signed by
an executive officer of the Company to the foregoing effect;

            

            (b) the
Lender shall have delivered a payoff letter in a form reasonably satisfactory to
the Company pursuant to which the Lender shall have agreed to terminate the
Company Securitization Documents and release any and all Liens on the assets
pledged under the Company Securitization Documents promptly following receipt of
the amounts set forth in such payoff letter;

            

            (c) the
Company shall have received the written resignations of Robert F. Cummings, Jr.
and Richard M. Hayden, to be effective as of the date of Closing, as members of
the Board;

            

            (d) the Board
shall have approved the election of, effective as of the date of Closing, the
Saratoga Directors as members of the Board;

            

            (e) the
Company shall have entered into the Replacement Management Agreements, effective
as of the date of Closing;

            

            (f) the
Company shall have entered into the License Agreement, effective as of the date
of Closing;

            

            (g) the
Company shall have entered into the Registration Rights Agreement, effective as
of the date of Closing;

            

            (h) the
Company shall have approved and prepared an amendment to its charter with the
SDAT changing its name from “GSC Investment Corp.” to “Saratoga Investment
Corp.” or a derivation thereof that is acceptable to Saratoga, and shall have
taken all actions (including those specified in paragraph 3 of the Termination
and Release Agreement) to effect the name change of the Company’s Subsidiary and
its Affiliates (including, without limitation, GSC Partners CDO GP III, L.P.,
GSC Investment Corp. CLO 2007, Ltd. and GSC Investment Corp. CLO 2007, Inc.), in
each case to be filed or to become effective, as applicable, immediately
following the Closing; and

            

            (i) the
Company’s BDC Election shall be in full force in effect, the Company shall not
have filed with the SEC any notice of withdrawal of the BDC Election, and no
order of suspension or revocation of such election shall have been issued or, to
the Company’s knowledge, proceedings therefor been initiated or threatened by
the SEC.

            

            Section
10.03. Conditions to the
Obligations of the Company. The obligations of the Company to consummate
the Investment and the other transactions contemplated hereby are subject to the
satisfaction of the following further condition:

            

            (a) (i)
The Investors shall have performed in all material respects all of their
respective obligations hereunder required to be performed by it at or prior to
the Closing, (ii) (A) the representations and warranties of the Investors
contained in Sections 6.01, 6.07 and 6.08 (disregarding all materiality and
Material Adverse Effect qualifications contained therein)
shall

            

            

            
              
                 

              

              
                46

                
                  

                

              

              
                 

              

            

            

            be true
in all material respects as of the date hereof and at and as of the Closing as
if made at and as of such time (other than such representations and warranties
that by their terms address matters only as of another specified time, which
shall be true in all material respects only as of such time) and (B) the other
representations and warranties of the Investors contained in this Agreement or
in any certificate or other writing delivered by the Investors pursuant hereto
(disregarding all materiality and Material Adverse Effect qualifications
contained therein) shall be true as of the date hereof and at and as of the
Closing as if made at and as of such time (other than representations and
warranties that by their terms address matters only as of another specified
time, which shall be true only as of such time), with, in the case of this
clause (B) only, only such exceptions as have not had and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect; and (iii) the Company shall have received a certificate signed by an
executive officer of Saratoga to the foregoing effect;

            

            (b) The
Investors shall have obtained executed Joinder Agreements substantially in the
form attached hereto as Exhibit G from each
of the Permitted Transferees set forth on Schedule I hereto,
each of which to be effective as of the Closing, and the Investors shall have
delivered a copy of each such Joinder Agreement to the Company prior to or at
the Closing; and

            

            (c) Saratoga
shall be in compliance in all material respects with its obligations under the
Advisers Act as of the date of Closing.

            

            

            ARTICLE
11

            TERMINATION

            

            Section
11.01. Termination.
This Agreement may be terminated and the Investment may be abandoned at any time
prior to the Closing (notwithstanding any approval of the Investment and the
other transactions contemplated hereby by the stockholders of the
Company):

            

            
              (a)  by mutual
written agreement of the Company and Saratoga (acting on behalf of the
Investors);

            

            

            
              (b)  by either
the Company or Saratoga (acting on behalf of the Investors),
if:

               

              (i) the
Investment has not been consummated on or before September 30, 2010 (the “End Date”); provided that the right to
terminate this Agreement pursuant to this Section 11.01(b)(i) shall not be
available to any party whose breach of any provision of this Agreement results
in the failure of the Investment to be consummated by such time; provided, further, that in the event
the Company desires to terminate this Agreement pursuant to this Section
11.01(b)(i) and Saratoga (acting on behalf of the Investors) desires to
terminate this Agreement pursuant to Section 11.01(c)(iv), then the termination
right of Saratoga under Section 11.01(c)(iv) shall prevail;
or

            

            

            (ii) there
shall be any Applicable Law that (1) makes consummation of the transactions
contemplated by this Agreement illegal or otherwise prohibited or
(2)

            

            

            
              
                 

              

              
                47

                
                  

                

              

              
                 

              

            

            

            enjoins
the Company or Saratoga from consummating the transactions contemplated by this
Agreement and such injunction shall have become final and nonappealable;
or

            

            (iii) at the
Company Stockholder Meeting (including any adjournment or postponement thereof),
the Company Stockholder Approvals shall not have been obtained;
or

            

            
              (c)  by
Saratoga (acting on behalf of the Investors), if:

            

            

            (i) an
Adverse Recommendation Change shall have occurred, or at any time after receipt
or public announcement of an Acquisition Proposal, the Board shall have failed
to reaffirm the Company Board Recommendation as promptly as practicable (but in
any event within 5 Business Days) after receipt of any written request to do so
from Saratoga;

            

            (ii) a breach
of any representation or warranty or failure to perform any covenant or
agreement on the part of the Company set forth in this Agreement shall have
occurred that would cause the condition set forth in Section 10.02(a) not to be
satisfied, and such condition is incapable of being satisfied by the End Date;
or

            

            (iii) there
shall have been a material breach by the Company or its Representatives of
Section 7.02 or Section 7.03; or

            

            (iv) the
Company Stockholder Meeting (including any adjournment or postponement thereof)
has not been held prior to the End Date; provided, however, that
Saratoga must not be in material breach of this Agreement on the date of such
termination and must, if requested by the Company, extend the End Date for a
period of 30  calendar
days to permit the Company to hold the Company Stockholder Meeting;
or

            

            
              (d)  by the
Company, if:

            

            

            (i) prior to
the Company Stockholder Meeting, the Board shall have made an Adverse
Recommendation Change in compliance with the terms of this Agreement; provided, however, that such
termination will not take effect until the Company has paid Saratoga the full
amount of the Termination Fee as set forth in Section 11.03(a);
or

            

            (ii) a breach
of any representation or warranty or failure to perform any covenant or
agreement on the part of any Investor set forth in this Agreement shall have
occurred that would cause the condition set forth in Section 10.03(a) not to be
satisfied, and such condition is incapable of being satisfied by the End
Date.

            

            The party
desiring to terminate this Agreement pursuant to this Section 11.01 (other than
pursuant to Section 11.01(a)) shall give notice of such termination to the other
party.

            

            Section
11.02. Effect of
Termination. If this Agreement is terminated pursuant to Section 11.01,
except as otherwise specifically provided elsewhere in this Agreement
(including

            

             

            
              
                 

              

              
                48

                
                  

                

              

              
                 

              

            

            

             

            without
limitation Section 11.03), this Agreement shall become void and of no effect
without liability of any party (or any stockholder, director, officer, employee,
agent, consultant or representative of such party) to the other party hereto;
provided that, if such
termination shall result from the intentional (i) failure of either party to
fulfill a condition to the performance of the obligations of the other party or
(ii) failure of either party to perform a covenant hereof, such party shall be
fully liable for any and all liabilities and damages incurred or suffered by the
other party as a result of such failure. The provisions of this Section 11.02,
Section 11.03, Section 9.07 and Article 12 shall survive any termination hereof
pursuant to Section 11.01.

            

            Section
11.03. Termination Fees and
Expense Reimbursement. (a) In the event that this Agreement is terminated
pursuant to Section 11.01(c)(i), Section 11.01(c)(iii) or Section 11.01(d)(i),
the Company will pay to Saratoga an amount in immediately available funds equal
to $1,250,000 (the “Termination
Fee”) as liquidated damages.

            

            (b) In the
event that this Agreement is terminated (i) by Saratoga pursuant to Section
11.01(c)(ii) or (ii) by the Company pursuant to Section 11.01(b)(i) (provided that, in such case,
at the time of the Company’s termination (A) Saratoga was willing to continue
engaging in good faith negotiations to reasonably resolve any unsatisfied
conditions or other such remaining issues impeding the Closing and was willing
to agree to a one-time extension of the End Date (provided that the conditions
to Closing not yet satisfied on the End Date are reasonably capable of being
satisfied prior to the End Date, as so extended) for an additional 30 calendar
days expressly for that purpose, (B) Saratoga was not otherwise in breach of
this Agreement, and (C) the Company was unwilling to agree to such extension),
the Company will pay to Saratoga an amount in immediately available funds equal
to the aggregate amount of all documented, out-of-pocket costs and expenses,
including the reasonable fees and expenses of lawyers and accountants, incurred
by Saratoga and/or its Affiliates in connection with the entering into of this
Agreement and the carrying out of any and all acts contemplated hereunder (up to
an amount not to exceed $500,000 in the aggregate) (the “Expense
Reimbursement”).

            

            (c) In the
event that this Agreement is terminated pursuant to Section 11.01(b)(iii) or
Section 11.01(c)(iv), the Company will pay to Saratoga an amount in immediately
available funds equal to the aggregate amount of all documented, out-of-pocket
costs and expenses, including the reasonable fees and expenses of lawyers and
accountants, incurred by Saratoga and/or its Affiliates in connection with the
entering into of this Agreement and the carrying out of any and all acts
contemplated hereunder (up to an amount not to exceed $350,000 in the aggregate)
(the “No Vote Expense
Reimbursement”).

            

            (d) In the
event that this Agreement is terminated (i) by Saratoga pursuant to Section
11.01(c)(ii) or Section 11.01(c)(iv), (ii) by the Company pursuant to Section
11.01(b)(i) (provided
that, in such case, at the time of the Company’s termination (A) Saratoga was
willing to continue engaging in good faith negotiations to reasonably resolve
any unsatisfied conditions or other such remaining issues impeding the Closing
and was willing to agree to a one-time extension of the End Date (provided that the conditions
to Closing not yet satisfied on the End Date are reasonably capable of being
satisfied prior to the End Date, as so extended) for an additional 30 calendar
days expressly for that purpose, (B) Saratoga was not otherwise in
breach

            

             

            
              
                 

              

              
                49

                
                  

                

              

              
                 

              

            

            

            

            of this
Agreement, and (C) the Company was unwilling to agree to such extension), or
(iii) by either party pursuant to Section 11.01(b)(iii), and if at any time
within the 9-month period immediately following the date of such termination,
the Company shall have entered into a definitive agreement with respect to,
recommended to its stockholders or consummated any Acquisition Proposal (provided that each reference
to “10%” in the definition of Acquisition Proposal shall be deemed to be a
reference to “35%”; and provided, further, that the definition
of Acquisition Proposal shall not apply to the Company’s efforts and
undertakings to refinance any and all amounts outstanding under the Company
Securitization Documents for its own benefit, so long as there is no involvement
of a Third Party other than the potential lender or similar such financial
institution and no issuance of equity or other securities of the Company in
connection with such refinancing), then the Company shall pay to Saratoga an
amount in immediately available funds equal to (x) the Termination Fee, minus (y) the Expense
Reimbursement or the No Vote Expense Reimbursement, as the case may be (such
payment, the “Make-Whole
Payment”).

            

            (e) Payments
of any amount under the foregoing provisions of this Section 11.03 shall be due
and payable by wire transfer of immediately available funds as follows: (i) the
Termination Fee payable in the event the Company terminates this Agreement
pursuant to Section 11.01(d)(i) shall be due and payable prior to the time the
Board makes the relevant Adverse Recommendation Change, (ii) the Termination Fee
payable in the event Saratoga terminates this Agreement pursuant to Section
11.01(c)(i) or Section 11.01(c)(iii) shall be payable no later than 2 Business
Days after the date of such termination, (iii) an Expense Reimbursement or No
Vote Expense Reimbursement shall be payable no later than 2 Business Days after
the termination giving rise to such payment occurs, and (iv) the Make-Whole
Payment shall be due and payable within 2 Business Days after entry into a
definitive agreement with respect to, or recommendation or consummation of, the
Acquisition Proposal, as determined in accordance with Section 11.03(d)
above.

            

            (f) The
parties acknowledge that the agreements contained in Section 11.03 are an
integral part of the transaction contemplated by this Agreement, and that,
without these agreements, the parties would not enter into this Agreement.
Accordingly, if the Company fails to promptly pay the Termination Fee pursuant
to the applicable provisions of Section 11.03(a), the Expense Reimbursement
pursuant to Section 11.03(b), the No Vote Expense Reimbursement pursuant to
Section 11.03(c), or the Make-Whole Payment pursuant to Section 11.03(d), and,
in order to obtain such payment, such party commences a suit that results in a
final adjudication on the merits against the Company, such party shall be
entitled to interest on the amounts payable pursuant to this Section 11.03,
through the date of actual payment at a prime rate of Bank of America National
Association in effect on the date such payment is made and shall be indemnified
for the reasonable attorneys’ fees of enforcing this
Agreement.

            

            

            

            
              
                 

              

              
                50

                
                  

                

              

              
                 

              

            

            

             

            ARTICLE
12

            MISCELLANEOUS

            

            Section
12.01. Notices. All
notices, requests and other communications to any party hereunder shall be in
writing (including facsimile transmission and electronic mail (“e-mail”) transmission, so long
as a receipt of such e-mail is requested and received) and shall be
given,

            

            if to the
Investors, to:

            

            Saratoga
Investment Advisors, LLC 

            535
Madison Avenue

            New York,
NY 10022

            Attention:
Richard A. Petrocelli, Managing Director 

            Facsimile
No.: (212) 750-3343

            E-mail:
rich@saratogapartners.com

            

            with a
copy to:

            

            Sutherland
Asbill & Brennan LLP 

            275
Pennsylvania Avenue, N.W. 

            Washington,
DC 20004 

            Attention:
Steven B. Boehm 

            Facsimile
No.: (202) 637-3593

            E-mail:
steven.boehm@sutherland.com

            

            if to the
Company, to:

            

            GSC
Investment Corp.

            500
Campus Drive, Suite 220 

            Florham
Park, NJ 07932

            Attention:
Seth M. Katzenstein, President & CEO 

            Facsimile
No.: (973) 437-1037

            E-mail:
skatzenstein@gsc.com

            

            with a
copy to each of:

            

            GSC
Group

            300
Campus Drive, Suite 110

            Florham
Park, NJ 07932

            Attention:
General Counsel

            

            and:

            

            Davis
Polk & Wardwell LLP 

            450
Lexington Avenue

            New York,
New York 10017

            

            
              
                 

              

              
                51

                
                  

                

              

              
                 

              

            

             

             

            Attention:
John J. McCarthy, Jr.

            Facsimile
No.: (212) 450-3800

            E-mail:
john.mccarthy@davispolk.com

            

            or to
such other address or facsimile number as such party may hereafter specify for
the purpose by notice to the other parties hereto. All such notices, requests
and other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5:00 p.m. on a Business Day in the place
of receipt. Otherwise, any such notice, request or communication shall be deemed
to have been received on the next succeeding Business Day in the place of
receipt.

            

            Section
12.02. Survival of
Representations and Warranties. Except as set forth in the following
sentence, the representations, warranties, covenants and agreements contained
herein and in any certificate or other writing delivered pursuant hereto shall
not survive the Closing. Notwithstanding the foregoing, (a) the agreements set
forth in Section 9.06 shall survive for the time period(s) set forth therein,
and (b) the representations and warranties contained in Section 5.16, 5.26(m),
5.26(n), 5.26(o) and 5.26(p), and the right to bring an action with respect to
any breach thereof, shall survive the Closing until the first anniversary of the
Closing Date.

            

            Section
12.03. Amendments and
Waivers. (a) Any provision of this Agreement may be amended or waived
prior to the Closing if, but only if, such amendment or waiver is in writing and
is signed, in the case of an amendment, by each party to this Agreement or, in
the case of a waiver, by each party against whom the waiver is to be effective;
provided that after the
Company Stockholder Approvals have been obtained there shall be no amendment or
waiver that would require the further approval of the stockholders of the
Company under Maryland Law or the Investment Company Act without such approval
having first been obtained.

            

            (b) No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
Applicable Law.

            

            Section
12.04. Expenses. Except
as otherwise provided herein, all costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
Notwithstanding the foregoing, solely in the case whereupon the parties have
successfully consummated the Closing of the transactions contemplated by this
Agreement, the Company shall pay to Saratoga the aggregate amount of all
documented, out-of-pocket costs and expenses, including the reasonable fees and
expenses of lawyers and accountants, incurred by Saratoga prior to and as of the
Closing in connection with the entering into of this Agreement and the carrying
out of any and all acts contemplated hereunder up to and as of the
Closing.

            

            Section
12.05. Disclosure Schedule and
SEC Document References. (a) The parties hereto agree that any reference
in a particular Section of the Company Disclosure Schedule shall only be deemed
to be an exception to (or, as applicable, a disclosure for purposes of) (i)
the

            

             

            
              
                 

              

              
                52

                
                  

                

              

              
                 

              

            

            

            

            representations
and warranties (or covenants, as applicable) of the Company that are contained
in the corresponding Section of this Agreement and (ii) any other
representations and warranties of the Company that are contained in this
Agreement, but only if the relevance of that reference as an exception to (or a
disclosure for purposes of) such representations and warranties would be readily
apparent to a reasonable person who has read that reference and such
representations and warranties, without any independent knowledge on the part of
the reader regarding the matter(s) so disclosed.

            

            (b) The
parties hereto agree that any information contained in any part of any Company
SEC Document filed after January 14, 2010 but prior to the date hereof shall
only be deemed to be an exception to (or a disclosure for purposes of) the
Company’s representations and warranties if the relevance of that information as
an exception to (or a disclosure for purposes of) such representations and
warranties would be reasonably apparent to a person who has read that
information concurrently with such representations and warranties, without any
independent knowledge on the part of the reader regarding the matter(s) so
disclosed; provided
that in no event shall any information contained in any part of any Company SEC
Document entitled “Risk Factors” or containing a description or explanation of
“Forward-Looking Statements” be deemed to be an exception to (or a disclosure
for purposes of) any representations and warranties of the Company contained in
this Agreement.

            

            Section
12.06. Binding Effect;
Benefit; Assignment. (a) The provisions of this Agreement shall be
binding upon and, except as provided in Section 9.06, shall inure to the benefit
of the parties hereto and their respective successors and assigns. Except as
provided in Section 9.06, no provision of this Agreement is intended to confer
any rights, benefits, remedies, obligations or liabilities hereunder upon any
Person other than the parties hereto and their respective successors and
assigns.

            

            (b) No
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of each other party hereto,
except that Investor may transfer or assign its rights and obligations under
this Agreement, in whole or from time to time in part, to (i) one or more of
their Affiliates at any time and (ii) after the Closing, to any Person; provided that such transfer
or assignment shall not relieve Investor of its obligations hereunder or enlarge, alter or
change any obligation of any other party hereto or due to
Investor.

            

            Section
12.07. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflicts of law rules of such
state.

            

            Section
12.08. Submission to
Jurisdiction; Selection of Forum. Each party hereto agrees that it shall
bring any action or proceeding in respect of any claim arising out of or related
to this Agreement or the Investment exclusively in the United States District
Court for the Southern District of New York or, if such court does not have
jurisdiction, the Commercial Division of the New York Supreme Court, New York
County (the “Chosen
Courts”), and solely in connection with claims arising under this
Agreement or the Investment that are the subject of this Agreement (a)
irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (b)
waives

            

             

            
              
                 

              

              
                53

                
                  

                

              

              
                 

              

            

            

            

            any
objection to laying venue in any such action or proceeding in the Chosen Courts,
(c) waives any objection that the Chosen Courts are an inconvenient forum or do
not have jurisdiction over any party hereto and (d) agrees that service of
process upon such party in any such action or proceeding shall be effective if
notice is given in accordance with Section 12.01 of this
Agreement.

            

            Section
12.09. Waiver of Jury
Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

            

            Section
12.10. Counterparts;
Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by all of the other parties hereto. Until and unless each party
has received a counterpart hereof signed by the other party hereto, this
Agreement shall have no effect and no party shall have any right or obligation
hereunder (whether by virtue of any other oral or written agreement or other
communication).

            

            Section
12.11. Entire
Agreement. This Agreement, the Confidentiality Agreement, and the
Exclusivity Agreement dated as of January 29, 2010 (as amended from time to
time) by and between the Company and Saratoga Management Company LLC, the
Assignment Agreement, the Voting and Support Agreement, the Replacement
Management Agreements, the License Agreement and the Registration Rights
Agreement and those documents expressly referred to herein or therein constitute
the entire agreement between the parties with respect to the subject matter of
this Agreement and supersedes all prior agreements and understandings, both oral
and written, between the parties with respect to the subject matter of this
Agreement.

            

            Section
12.12. Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other Governmental Authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated 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 a determination, the parties 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 be consummated as originally
contemplated to the fullest extent possible.

            

            Section
12.13. Specific
Performance. The parties hereto agree that irreparable damage would occur
if any provision of this Agreement were not performed in accordance with the
terms hereof and that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically the
performance of the terms and provisions hereof in any Chosen Court, in addition
to any other remedy to which they are entitled at law or in
equity.

            

            

            
              
                 

              

              
                54

                
                  

                

              

              
                 

              

            

            

            

            

            [Signature pages
follow.]

            

            

            

            

            
              
                 

              

              
                55

                
                  

                

              

              
                 

              

            

            

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

            

            

            
              	 
      	 
      	 
      	 
      	 
      
	 
      	
                      GSC
      INVESTMENT CORP.

                    	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      By:

                    	
                       /s/
      Seth M. Katzenstein

                    	 
      
	 
      	 
      	
                      Name:

                    	
                      Seth
      M. Katzenstein

                    	 
      
	 
      	 
      	
                      Title:

                    	
                      Chief
      Executive Officer

                    	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      SARATOGA
      INVESTMENT

                    	 
      
	 
      	
                      ADVISORS,
      LLC

                    	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/
      Richard A. Petrocelli

                    	 
      
	 
      	 
      	
                      Name:

                    	
                       Richard
      A. Petrocelli

                    	 
      
	 
      	 
      	
                      Title:

                    	
                      Managing
      Director

                    	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      CLO
      PARTNERS LLC

                    	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/
      Christian L. Oberbeck

                    	 
      
	 
      	 
      	
                      Name:

                    	
                      Christian
      L. Oberbeck

                    	 
      
	 
      	 
      	
                      Title:

                    	
                      Managing
      Member

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