Document:

Exhibit 10.3

 

AMENDED AND RESTATED

 

REGISTRATION RIGHTS AGREEMENT

 

This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of November 4, 2016, is entered into by and among Great Elm Capital Corp., a Maryland corporation (including its successors, the “Company”) and the persons listed on the signature pages hereto under the heading “Holders” (“Holders”), and hereby amends and restates the Registration Rights Agreement, dated as of November 3, 2016 (the “Initial Agreement”), entered into by and among the Company and the Holders, in accordance with Section 3.8 of the Initial Agreement.

 

ARTICLE 1
  DEFINITIONS

 

1.1.                            Definitions.  The following terms shall have the meanings set forth in this Section 1.1:

 

“Affiliate” of any specified Person means any other Person directly or indirectly “controlling,” “controlled by” or “under common control with” (within the meaning of Rule 405 under the Securities Act), such specified Person; provided, however, the determination of whether a Person is an Affiliate of another Person shall be made assuming that no Holder is an Affiliate of the Company solely by virtue of the ownership of Common Stock.

 

“Common Stock” shall mean the Company’s common stock, par value $0.01 per share.

 

“Equity Interests” mean, with respect to the Company, any and all shares of capital stock in the Company or securities convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations promulgated by the SEC thereunder.

 

“Excluded Registration” means a registration under the Securities Act of (i) securities pursuant to one or more Demand Registrations pursuant to Section 2.1 hereof, (ii) securities registered on Form S-8 or any similar successor form, and (iii) securities registered to effect the acquisition of, or combination with, another Person.

 

“Investment Company Act” means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated by the SEC thereunder.

 

“Person” or “person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof.

 

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

 

“Registrable Securities” means the shares of the Company’s Common Stock owned at any time by the Holders. As to any particular Registrable Securities, such Common Stock shall cease to be Registrable Securities when: (a) a registration statement with respect to the sale of such Common Stock

 

 

shall have become effective under the Securities Act and such Common Stock shall have been disposed of in accordance with such registration statement; (b) such Common Stock shall have been sold to the public pursuant to Rule 144 under the Securities Act (or any successor provision); (c) the first day on which such Registrable Securities may be sold by the Holders without restriction pursuant to Rule 144 promulgated under the Securities Act and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) or (d) such Common Stock shall have ceased to be outstanding.

 

“Requesting Holders” shall mean any Holder(s) requesting to have its (their) Registrable Securities included in any Demand Registration or Shelf Registration.

 

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

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations promulgated by the SEC thereunder.

 

1.2.                            Other Terms.  For purposes of this Agreement, the following terms have the meanings set forth in the section or agreement indicated.

 

	
Term
    	
 
    	
Section
    
	
Advice
    	
 
    	
Section 2.7
    
	
Agreement
    	
 
    	
Introductory Paragraph
    
	
Blackout Period
    	
 
    	
Section 2.2.6
    
	
Company
    	
 
    	
Introductory Paragraph
    
	
Demand Registration
    	
 
    	
Section 2.2.1(i)
    
	
Demand Request
    	
 
    	
Section 2.2.1(i)
    
	
FINRA
    	
 
    	
Section 2.8.1
    
	
Holder
    	
 
    	
Introductory Paragraph
    
	
Inspectors
    	
 
    	
Section 2.6(xiii)
    
	
Lock-Up Period
    	
 
    	
Section 2.13
    
	
New York Courts
    	
 
    	
Section 3.3.2
    
	
Piggyback Registration
    	
 
    	
Section 2.3.1
    
	
Required Filing Date
    	
 
    	
Section 2.2.1(ii)
    
	
Shelf Registration
    	
 
    	
Section 2.4
    
	
Suspension Notice
    	
 
    	
Section 2.7
    
	
Suspension Period
    	
 
    	
Section 2.7
    

 

1.3.                            Rules of Construction.  Unless the context otherwise requires

 

(1)                                 a term has the meaning assigned to it;

 

(2)                                 words in the singular include the plural, and words in the plural include the singular; and

 

(3)                                 “herein,” “hereof” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision.

 

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ARTICLE 2
  REGISTRATION RIGHTS

 

2.1.                            Mandatory Registration.

 

2.1.1                     Automatic Filing.  The Company shall file a registration statement on Form N-2 or any similar or successor form under the Securities Act providing for a public offering of all of the Registrable Securities held by the Holders (the “Mandatory Registration”), which shall be a “shelf” registration statement pursuant to Rule 415 under the Securities Act if the Company is eligible to do so.  The filing shall be made as soon as practicable following the date hereof, but in no event later than 60 days following the date hereof.  Each Holder may opt out of the Mandatory Registration, by delivering to the Company written notice specifying the number of each such Requesting Holder’s Registrable Securities to be excluded from such registration.  Unless the Company consents (which consent may be withheld in its sole discretion), the methods of distribution covered by the Mandatory Registration shall not include an underwritten offering.  Each Holder may exercise its respective rights under this Section 2.1.1 in such Holder’s sole discretion.

 

2.1.2                     Priority in the Mandatory Registrations.  Unless the Holders consent (which consent may be withheld or conditioned in their sole discretion) the Mandatory Registration will not include any securities (including securities offered by the Company) other than securities offered by the Holders.

 

2.1.3                     Representations, Warranties and Indemnification.  No Holder may participate in any registration pursuant to Section 2.1 unless such Holder (x) agrees to sell such Holder’s Registrable Securities on the basis provided in the underwriting arrangements (if any) with respect to such offering and (y) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements (if applicable) and other documents and delivers all opinions, each in customary form, reasonably required under the terms of any such underwriting arrangements; provided, however, that no such Holder shall be required to make any representations or warranties in connection with any such registration other than representations and warranties as to (i) such Holder’s ownership of his or its Registrable Securities to be sold or transferred free and clear of all encumbrances, (ii) such Holder’s power and authority to effect such transfer, and (iii) such matters pertaining to compliance with securities laws as may be reasonably requested; provided, further, however, that the obligation of such Holder to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several, among any of the other parties to such underwriting arrangements, and the liability of each such Holder will be in proportion thereto, and provided, further, that under the terms of any such agreement such liability will be limited to the net amount received by such Holder from the sale of his or its Registrable Securities pursuant to such registration; and provided, further, that any such indemnification provided by a Holder selling Registrable Securities shall be limited under the terms of any such agreement to indemnification for information provided by such Holder relating to such Holder specifically for inclusion in the registration statement.

 

2.1.4                     Effective Period.  The Company shall maintain the registration statement and related prospectus for the Mandatory Registration effective for a period not less than one year subject to the Company’s right to impose Suspension Periods pursuant to Section 2.7.

 

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2.2.                            Demand Registration.

 

2.2.1                     Request for Registration.

 

(i)                                     Commencing on the first anniversary of the filing of the registration statement for the Mandatory Registration, a majority of Holders shall have the right to require the Company to file a registration statement on Form N-2 or any similar or successor to such form under the Securities Act for a public offering of all or part of the Registrable Securities held by such Holder (a “Demand Registration”), by delivering to the Company written notice on or after such first anniversary stating that such right is being exercised by the Requesting Holder, specifying the number of each such Requesting Holder’s Registrable Securities to be included in such registration and, subject to Section 2.2.3 hereof, describing the intended method of distribution thereof (a “Demand Request”). Each Holder may exercise its respective rights under this Section 2.2 in such Holder’s sole discretion.

 

(ii)                                  Each Demand Request shall specify the aggregate number of Registrable Securities proposed to be sold. Subject to Section 2.2.6, the Company shall file the registration statement in respect of a Demand Registration within 45 days after receiving a Demand Request (the “Required Filing Date”) and shall use reasonable best efforts to cause the same to be declared effective by the SEC as promptly as practicable after such filing; provided, however, that:

 

the Company shall not be obligated to cause a registration statement with respect to a Demand Registration to be declared effective pursuant to this Section 2.2.1 (A) within 90 days after the effective date of a previous Demand Registration, other than a Shelf Registration pursuant to this Article 2, or (B) during the Lock-Up Period for such Requesting Holder;

 

(b)                                 the Company shall not be obligated to cause a registration statement with respect to a Demand Registration to be declared effective pursuant to Section 2.2.1(ii) unless the Demand Request is for a number of Registrable Securities with a market value that is equal to at least $10 million as of the date of such Demand Request; provided, however, that this Section 2.2.1(ii)(b) shall not apply if the applicable Demand Request is for all of the Registrable Securities held by the Holders as of the date of such Demand Request;

 

(c)                                  the Company shall not be obligated to cause to be declared effective pursuant to this Section 2.2.1 more than two registration statements with respect to Demand Registrations; and

 

(d)                                 the Holder shall have the right to withdraw a Demand Request at any time prior to the relevant registration statement being declared effective by the SEC in which event such registration statement shall not count as a Demand Request under this Section 2.2.

 

2.2.2                     Rights of Nonrequesting Holders.  The Company shall no later than 7 days after the receipt of any Demand Request give written notice delivered by hand or nationally recognized overnight delivery service (with postage prepaid) of such proposed Demand Registration to all other Holders, who shall have the right, exercisable by written notice to the Company within 7 days of the delivery of the Company’s notice, to elect to include in such Demand Registration such portion of their Registrable Securities as they may request. All Holders requesting to have their Registrable Securities included in a Demand Registration in accordance with the preceding sentence shall be deemed to be “Requesting Holders” for purposes of this Section 2.2.

 

2.2.3                     Priority on Demand Registrations.  The Company shall include in a Demand Registration only the Registrable Securities requested by Requesting Holders to be included therein.

 

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2.2.4                     Selection of Underwriters.  The holders of a majority of the Registrable Securities of the Requesting Holders to be included in such Demand Registration (i) may request that the offering of Registrable Securities pursuant to a Demand Registration be in the form of a “firm commitment” underwritten offering and (ii) may select the investment banking firm or firms to manage the underwritten offering.

 

2.2.5                     Representations, Warranties and Indemnification.  No Holder may participate in any registration pursuant to Section 2.2 unless such Holder (x) agrees to sell such Holder’s Registrable Securities on the basis provided in the underwriting arrangements with respect to such offering and (y) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents and delivers all opinions, each in customary form, reasonably required under the terms of such underwriting arrangements; provided, however, that no such Holder shall be required to make any representations or warranties in connection with any such registration other than representations and warranties as to (i) such Holder’s ownership of his or its Registrable Securities to be sold or transferred free and clear of all encumbrances, (ii) such Holder’s power and authority to effect such transfer, and (iii) such matters pertaining to compliance with securities laws as may be reasonably requested; provided, further, however, that the obligation of such Holder to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several, among any of the other parties to such underwriting arrangements, and the liability of each such Holder will be in proportion thereto, and provided, further, that under the terms of any such agreement such liability will be limited to the net amount received by such Holder from the sale of his or its Registrable Securities pursuant to such registration; and provided, further, that any such indemnification provided by a Holder selling Registrable Securities shall be limited under the terms of any such agreement to indemnification for information provided by such Holder relating to such Holder specifically for inclusion in the registration statement.

 

2.2.6                     Deferral of Filing.  During any calendar year, the Company may defer the filing (but not the preparation) of a registration statement required by this Section 2.2 to after the Required Filing Date if at the time the Company receives the Demand Request, the Company or any of its Subsidiaries are engaged in confidential negotiations or other confidential business activities, disclosure of which would be required in such registration statement (but would not be required if such registration statement were not filed), and the Board of Directors of the Company or a committee of the Board of Directors of the Company reasonably determines in good faith that such disclosure would have a material adverse effect on the Company or its security holders (any such period during which such filing is deferred pursuant to this Section 2.2.6, a “Blackout Period”). The Company may only exercise its right to defer a registration statement pursuant to this Section 2.2.6 twice in any calendar year and for no more than 90 calendar days in the aggregate during such calendar year. A deferral of the filing of a registration statement pursuant to Section 2.2.6 shall be lifted, and the requested registration statement shall be filed forthwith, if the negotiations or other activities are disclosed or terminated. In order to defer the filing of a registration statement pursuant to this Section 2.2.6, the Company shall within 10 days, upon determining to seek such deferral, deliver to each Requesting Holder a certificate signed by an executive officer of the Company stating that the Company is deferring such filing pursuant to this Section 2.2.6 (subject to execution of a confidentiality agreement if required by law or contract) and a general statement of the reason for such deferral and an approximation of the anticipated delay. Within 20 days after receiving such certificate, the Requesting Holder may withdraw such Demand Request by giving notice to the Company; if withdrawn, the Demand Request shall be deemed not to have been made for all purposes of this Agreement.

 

2.3.                            Piggyback Registrations.

 

2.3.1                     Right to Piggyback.  Each time the Company proposes to register any of its equity securities (other than pursuant to an Excluded Registration) under the Securities Act for sale to the

 

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public (whether for the account of the Company or the account of any other security holder of the Company (not a Holder)) (a “Piggyback Registration”), the Company shall give prompt written notice to each Holder (which notice shall be given not less than 20 days prior to the anticipated printing of any preliminary prospectus), which notice shall offer each such Holder the opportunity to include any or all of its Registrable Securities in such registration statement, subject to the limitations contained in Section 2.3.2 hereof. Each Holder that desires to have its Registrable Securities included in such registration statement shall so advise the Company in writing (stating the number of shares desired to be registered) within 7 days after the date of such notice from the Company. Any Holder shall have the right to withdraw such Holder’s request for inclusion of such Holder’s Registrable Securities in any registration statement pursuant to this Section 2.3.1 by giving written notice to the Company of such withdrawal. The Company shall include in such registration statement all such Registrable Securities so requested to be included therein; provided, however, that the Company may at any time withdraw or cease proceeding with any such registration if it shall at the same time withdraw or cease proceeding with the registration of all other equity securities originally proposed to be registered.

 

2.3.2                     Priority on Piggyback Registrations.

 

(i)                                     If a Piggyback Registration relates to an underwritten offering and was initiated by the Company, the Company shall include in such registration statement (a) first, the securities the Company proposes to sell, (b) second, if and to the extent the managing underwriter or underwriters advise the Company that the inclusion thereof will not prevent the sale of the securities described in clause (a) in an orderly manner at a price acceptable to the Company, the Registrable Securities requested to be included in such registration pursuant to Section 2.3.1 (any required cut-back under this clause (b) to be applied pro rata based on the number of Registrable Securities that each Holder has requested be included), and (c) third, if and to the extent the managing underwriter or underwriters advise the Company that the inclusion thereof will not prevent the sale of the securities described in clause (a) in an orderly manner at a price acceptable to the Company, any other securities.

 

(ii)                                  If a Piggyback Registration relates to an underwritten offering and was initiated by a security holder of the Company other than a Holder, the Company shall include in such registration statement (a) first, the securities requested to be included therein by the security holders requesting such registration, and (b) second, if and to the extent the managing underwriter or underwriters advise the Company that the inclusion thereof will not prevent the sale of the securities described in clause (a) in an orderly manner at a price acceptable to the holders of those securities, any Registrable Securities requested to be included in such registration pursuant to Section 2.3.1 (any required cut-back under this clause (b) to be applied pro rata based on the number of Registrable Securities that each Holder has requested be included).

 

(iii)                               No Holder may participate in any Piggyback Registration hereunder unless such Holder (x) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Company and (y) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents and delivers all opinions, each in customary form, reasonably required under the terms of such underwriting arrangements; provided, however, that no such Holder shall be required to make any representations or warranties in connection with any such registration other than representations and warranties as to (a) such Holder’s ownership of his or its Registrable Securities to be sold or transferred free and clear of all encumbrances, (b) such Holder’s power and authority to effect such transfer, and (c) such matters pertaining to compliance with securities laws as may be reasonably requested; provided, further, however, that the obligation of such Holder to indemnify pursuant  to any such underwriting arrangements shall be several, not joint and several, among any of the other parties to such underwriting arrangements, and the liability of each such Holder will be in proportion thereto, and provided, further, that under the terms of any such

 

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agreement such liability will be limited to the net amount received by such Holder from the sale of his or its Registrable Securities pursuant to such registration; and provided, further, that any such indemnification provided by a Holder selling Registrable Securities shall be limited under the terms of any such agreement to indemnification for information provided by such Holder relating to such Holder specifically for inclusion in the registration statement.

 

2.3.3                     Selection of Underwriters.  In respect of any Piggyback Registration, the Company may select the investment banking firm or firms that will manage the offering and that will participate in any underwriting syndicate.

 

2.4.                            Shelf Registration.  The Company shall use commercially reasonable efforts to become eligible to use a “shelf” registration statement on Form N-2 pursuant to Rule 415 under the Securities Act (or any successor form, “Form N-2 Shelf”) and, after becoming eligible to use a Form N-2 Shelf, shall use commercially reasonable efforts to remain so eligible. Once the Company becomes eligible to use a Form N-2 Shelf (or any successor form), then the Holders owning a majority of the Registrable Securities may require the Company to cause Demand Registrations to be filed on a Form N-2 Shelf (a “Shelf Registration”). If the Company is not then eligible under the Securities Act to use a Form N-2 Shelf, Demand Registrations shall be filed on the form for which the Company then qualifies.

 

2.5.                            Holdback Agreements.

 

(i)                                     The Company shall not and shall use its reasonable best efforts to cause its officers and directors not to effect any public sale or distribution of the equity securities of the Company, or any securities convertible into or exchangeable or exercisable for such securities (other than any public sale or distribution pursuant to a plan that complies with Rule 10b5-1 under the Exchange Act), during the 90-day period beginning on the effective date of any registration statement in connection with a Demand Registration (other than a Shelf Registration), a Piggyback Registration or any registered underwritten public offering of the equity securities of the Company in which the Holders participate, except pursuant to registrations on Form S-4, Form N-14 or Form S-8 or any successor form or unless the underwriters managing any such public offering otherwise agree; provided, however, that if (1) during the last 17 days of any such 90-day period, the Company releases earnings results or material news or a material event relating to the Company occurs or (2) prior to the expiration of any such 10 day or 90-day period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of such 10 day or 90-day period, then, in each case, such 10 day or 90-day period will be extended until the expiration of the 18-day period beginning on the date of release of the earnings results or the occurrence of the material news or material event, as applicable, unless the underwriters managing any such public offering waives, in writing, such extension.

 

(ii)                                  If any Holder of Registrable Securities notifies the Company in writing that it intends to effect an underwritten sale of Registrable Securities registered pursuant to a Shelf Registration pursuant to Article 2 and specifies the date of the intended sale (the “Sale Date”) the Company shall not and shall use its reasonable best efforts to cause its officers and directors not to effect any public sale or distribution of the equity securities of the Company, or any securities convertible into or exchangeable or exercisable for its equity securities, during the 90-day period beginning on the Sale Date unless the underwriters managing any such public offering otherwise agree; provided, however, that if (1) during the last 17 days of any such 90-day period, the Company releases earnings results or material news or a material event relating to the Company occurs or (2) prior to the expiration of any such 90-day period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of such 90-day period, then, in each case, such 90-day period will be extended until the expiration of the 18-day period beginning on the date of release of the earnings results or the occurrence

 

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of the material news or material event, as applicable, unless the underwriters managing any such public offering waives, in writing, such extension.

 

2.6.                            Registration Procedures.  Whenever any Holder has requested that any Registrable Securities be registered pursuant to this Agreement, the Company will use its reasonable best efforts to complete the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof within the time periods set forth in this Agreement, and pursuant thereto the Company will as promptly as practicable:

 

(i)                                     prepare and file with the SEC with respect to the Mandatory Registration or any Demand Registration, a registration statement on any appropriate form under the Securities Act with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective, provided that as far in advance as practicable before filing such registration statement or any amendment thereto, the Company will furnish to the selling Holders copies of reasonably complete drafts of all such documents prepared to be filed (including exhibits), and any such Holder shall have the opportunity to object to any information contained therein and the Company will make corrections reasonably requested by such Holder with respect to such information prior to filing any such registration statement or amendment;

 

(ii)                                  except in the case of a Shelf Registration, prepare and file with the SEC such amendments, post-effective amendments, and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than 180 days (or such lesser period as is necessary for the underwriters in an underwritten offering to sell unsold allotments) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;

 

(iii)                               in the case of a Shelf Registration, prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement continuously effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities subject thereto for a period ending on the date on which all the Registrable Securities subject thereto have been sold pursuant to such registration statement;

 

(iv)                              furnish to each seller of Registrable Securities and the underwriters of the securities being registered such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus), any issuer free writing prospectus, any documents incorporated by reference therein and such other documents as such seller or underwriters may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller or the sale of such securities by such underwriters (it being understood that, subject to Section 2.7 and the requirements of the Securities Act and applicable state securities laws, the Company consents to the use of the prospectus, any amendment or supplement thereto and any issuer free writing prospectus by each seller and the underwriters in connection with the offering and sale of the Registrable Securities covered by the registration statement of which such prospectus, amendment or supplement is a part);

 

(v)                                 use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or “blue sky” laws of such jurisdictions as the managing underwriter reasonably requests (or, in the event the registration statement does not relate to an underwritten offering, as the holders of a majority of such Registrable Securities may reasonably request);

 

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use its reasonable best efforts to keep each such registration or qualification (or exemption therefrom) effective during the period in which such registration statement is required to be kept effective; and do any and all other acts and things which may be reasonably necessary or advisable to enable each seller to consummate the disposition of the Registrable Securities owned by such seller in such jurisdictions (provided, however, that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph or (B) consent to general service of process in any such jurisdiction);

 

(vi)                              promptly notify each seller and each underwriter and (if requested by any such Person) confirm such notice in writing (A) when any such registration statement or any issuer free writing prospectus used in connection therewith, or any related prospectus or any prospectus supplement or post-effective amendment has been filed and, with respect to any such registration statement or any post-effective amendment, when the same has become effective, (B) of the issuance by any state securities or other regulatory authority of any order suspending the qualification or exemption from qualification of any of the Registrable Securities under state securities or “blue sky” laws or the initiation of any proceedings for that purpose, and (C) of the happening of any event which makes any statement made in any such registration statement or related prospectus or issuer free writing prospectus untrue or which requires the making of any changes in such registration statement, prospectus, issuer free writing prospectus or documents so that they 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, and, as promptly as practicable thereafter, prepare and file with the SEC and furnish a supplement or amendment to such prospectus or additional issuer free writing prospectus so that, as thereafter deliverable to the purchasers of such Registrable Securities, such prospectus will not contain any untrue statement of a material fact or omit a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(vii)                           permit any selling Holder, which in such Holder’s sole and exclusive judgment, might reasonably be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such registration or comparable statement and to require the insertion therein of material, furnished to the Company in writing, which in the reasonable judgment of such Holder and its counsel should be included;

 

(viii)                        make reasonably available members of management of the Company, as selected by the Holders of a majority of the Registrable Securities included in such registration, for assistance in the selling effort relating to the Registrable Securities covered by such registration, including, but not limited to, the participation of such members of the Company’s management in live or recorded road show presentations;

 

(ix)                              otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, including the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder, and make generally available to the Company’s security holders an earnings statement satisfying the provisions of Section 11(a) of the Securities Act no later than 90 days after the end of the 12 month period beginning with the first day of the Company’s first fiscal quarter commencing after the effective date of a registration statement, which earnings statement shall cover said 12 month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-Q, 10-K and 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act;

 

(x)                                 if requested by the managing underwriter or any seller promptly incorporate in a prospectus supplement or post-effective amendment or prepare an issuer free writing prospectus including such information as the managing underwriter or any seller reasonably requests to be

 

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included therein, including, without limitation, with respect to the Registrable Securities being sold by such seller, the purchase price being paid therefor by the underwriters and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering, and promptly make all required filings of such prospectus supplement or post-effective amendment or issuer free writing prospectus;

 

(xi)                              as promptly as practicable after filing with the SEC of any document which is incorporated by reference into a registration statement (in the form in which it was incorporated), deliver a copy of each such document to each seller unless available on the SEC’s Electronic Data Gathering and Retrieval System (EDGAR) or any successor system;

 

(xii)                           cooperate with the sellers and the managing underwriter to facilitate the timely preparation and delivery of certificates (which shall not bear any restrictive legends unless required under applicable law) representing securities sold under any registration statement, and enable such securities to be in such denominations and registered in such names as the managing underwriter or such sellers may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such registration statement a supply of such certificates;

 

(xiii)                        promptly make available for inspection by any seller, any underwriter participating in any disposition pursuant to any registration statement, and any attorney, accountant or other agent or representative retained by any such seller or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company, as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information requested by any such Inspector in connection with such registration statement;

 

(xiv)                       furnish to each seller and underwriter a signed counterpart of (A) an opinion or opinions of counsel to the Company, and (B) a comfort letter or comfort letters from the Company’s independent registered public accountants, each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the sellers or managing underwriter reasonably requests (each such opinion and comfort letter to be addressed to both the seller and underwriter, if reasonably possible);

 

(xv)                          use its reasonable best efforts to cause the Registrable Securities included in any registration statement to be listed on each securities exchange, if any, on which similar securities issued by the Company are then listed;

 

(xvi)                       provide a transfer agent and registrar for all Registrable Securities registered hereunder;

 

(xvii)                    cooperate with each seller and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Authority;

 

(xviii)                 during the period when the prospectus is required to be delivered under the Securities Act, promptly file all documents required to be filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act;

 

(xix)                       notify each seller of Registrable Securities promptly of any request by the SEC for the amending or supplementing of such registration statement or prospectus or for additional information;

 

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(xx)                          enter into such agreements (including underwriting agreements in the managing underwriter’s customary form) as are customary in connection with an underwritten registration;

 

(xxi)                       advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued; and

 

(xxii)                    use its best efforts to take all other steps necessary to effect the registration of the Registrable Securities covered by the registration statement.

 

2.7.                            Suspension of Dispositions.  Each Holder agrees by acquisition of any Registrable Securities that, upon receipt of any notice (a “Suspension Notice”) from the Company of the happening of any event of the kind described in Section 2.6(vi)(C), such Holder will forthwith discontinue disposition of Registrable Securities until such Holder’s receipt of the copies of the supplemented or amended prospectus, or until it is advised in writing (the “Advice”) by the Company that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference in the prospectus, and, if so directed by the Company, such Holder will deliver to the Company all copies, other than permanent file copies then in such Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice (any such period during which disposition of Registrable Securities is suspended, a “Suspension Period”). In the event the Company shall give any such notice, the time period referred to in Section 2.6(ii) shall be extended by the number of days during the period from and including the date of the giving of the Suspension Notice to and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus or the Advice. The Company shall use its reasonable best efforts and take such actions as are reasonably necessary to render the Advice as promptly as practicable.

 

2.8.                            Registration Expenses.

 

2.8.1                     Mandatory Registration and Demand Registrations.  All reasonable, out-of-pocket fees and expenses incident to the Mandatory Registration or any Demand Registration including, without limitation, the Company’s performance of or compliance with this Article 2, all registration and filing fees, all fees and expenses associated with filings required to be made with the Financial Industry Regulatory Authority (“FINRA”), as may be required by the rules and regulations of the FINRA, fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the Registrable Securities), rating agency fees, printing expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with the Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by a Holder of Registrable Securities), messenger and delivery expenses, the fees and expenses incurred in connection with any listing or quotation of the Registrable Securities, fees and expenses of counsel for the Company and its independent certified public accountants (including the expenses of any special audit or “cold comfort” letters required by or incident to such performance), the fees and expenses of any special experts retained by the Company in connection with such registration and any underwriting discounts, commissions or fees attributable to the sale of the Registrable Securities will be borne by the Holders participating in the Mandatory Registration or such Demand Registration pro rata on the basis of the number of shares sought to be sold by each such Holder.

 

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2.8.2                     Piggyback Registrations.  All fees and expenses incident to any Piggyback Registration including, without limitation, the Company’s performance of or compliance with this Article 2, all registration and filing fees, all fees and expenses associated with filings required to be made with the FINRA, as may be required by the rules and regulations of the FINRA, fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the Registrable Securities), rating agency fees, printing expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with the Depository Trust Company and of printing prospectuses), messenger and delivery expenses, the fees and expenses incurred in connection with any listing or quotation of the Registrable Securities, fees and expenses of counsel for the Company and its independent certified public accountants (including the expenses of any special audit or “cold comfort” letters required by or incident to such performance), the fees and expenses of any special experts retained by the Company in connection with such registration, and any underwriting discounts, commissions or fees attributable to the sale of the Registrable Securities will be borne by the Holders participating in the Piggyback Registration pro rata on the basis of the number of shares sought to be sold.

 

2.9.                            Indemnification.

 

2.9.1                     The Company will indemnify and hold harmless each seller of Registrable Securities and, in the case of an underwritten offering, each underwriter, their respective partners, members, directors, officers, affiliates and each person, if any, who controls such seller or underwriter, as applicable, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities, joint or several, to which such seller may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement, prospectus, preliminary prospectus or any issuer free writing prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and will reimburse such seller for any legal or other expenses reasonably incurred by such seller in connection with investigating or defending any loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such seller is a party thereto), whether threatened or commenced, and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by any such seller relating to such seller specifically for use therein; provided, the liability of each such seller of Registrable Securities will be in proportion to, and will be limited to, the net amount received by such seller from the sale of Registrable Securities pursuant to such registration statement; provided, however, that such seller of Registrable Securities shall not be liable in any such case to the extent that prior to the filing of any such registration statement or prospectus or amendment thereof or supplement thereto, such seller has furnished in writing to the Company information expressly for use in such registration statement or prospectus or any amendment thereof or supplement thereto which corrected or made not misleading information previously furnished to the Company.  Any indemnification by the Company pursuant to this Agreement shall be subject to the requirements and limitations of Section 17(i) of the Investment Company Act.

 

2.9.2                     Each seller of Registrable Securities will severally and not jointly indemnify and hold harmless the Company, each of its directors and each of its officers who signs a Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to

 

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which such indemnified party may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement, prospectus, preliminary prospectus or any issuer free writing prospectus or arise out of or are based upon the omission or the alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such seller relating to such seller specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against any such loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such indemnified party is a party thereto), whether threatened or commenced, based upon any such untrue statement or omission, or any such alleged untrue statement or omission as such expenses are incurred.

 

2.9.3                     Promptly after receipt by an indemnified party under this Section 2.9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under Section 2.9.1 or Section 2.9.2, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under Section 2.9.1 or Section 2.9.2 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under Section 2.9.1 or Section 2.9.2. In case any such action is brought against any indemnified party and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 2.9 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.

 

2.9.4                     If the indemnification provided for in this Section 2.9 is unavailable or insufficient to hold harmless an indemnified party under Section 2.9.1 or Section 2.9.2 although applicable in accordance with its terms, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in Section 2.9.1 or Section 2.9.2 (i) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative faults referred to in clause (i) above but also the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other as well as any other relevant equitable considerations. In connection with any registration statement filed with the SEC by the Company, the relative fault shall be determined by reference to, among other things,

 

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whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The relative benefits received by the indemnifying party on the one hand and the indemnified party on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of securities registered thereunder (before deducting expenses) received by the indemnifying party bear to the aggregate public offering price of the securities registered thereunder. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this Section 2.9.4 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this Section 2.9.4. Notwithstanding the provisions of this Section 2.9.4, no Holder shall be required to contribute an amount greater than the dollar amount by which the net proceeds received by such Holder with respect to the sale of any Registrable Securities exceeds the amount of damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations in this Section 2.9.4 to contribute shall be several in proportion to the amount of Registrable Securities registered by them and not joint.

 

If indemnification is available under this Section 2.9, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Section 2.9.1 and Section 2.9.2 without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Section 2.9.4 subject, in the case of the Holders, to the limited dollar amounts set forth in Section 2.9.2.

 

2.9.5                     The indemnification and contribution provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, or controlling Person of such indemnified party and will survive the transfer of securities.

 

2.10.                     Transfer of Registration Rights.  Any of the rights of any Holder under this Agreement may be assigned, in the discretion of any such Holder, without the consent of the Company, to any Person who is a transferee of Registrable Securities from the Holder; and agrees in writing to be subject to and bound by all the terms and conditions of this Agreement but no such assignment will relieve the assigning Holder of liability based on any action or occurrence prior to the assignment.

 

2.11.                     Rule 144.  The Company will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such reports, will, upon the request of the Holders, make publicly available other information) and will take such further action as the Holders may reasonably request, all to the extent required from time to time to enable the Holders to sell the Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such rule may be amended from time to time or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the reasonable request of any Holder, the Company will deliver to such parties a written statement as to whether it has complied with such requirements and will, at its expense, forthwith upon the request of any such Holder, deliver to such Holder a certificate, signed by the Company’s principal financial officer, stating (a) the Company’s name, address and telephone number (including area code), (b) the Company’s Internal Revenue Service identification number, (c) the Company’s SEC file number, (d) the number of shares of each class of capital stock outstanding as shown by the most recent report or statement published by the Company, and (e) whether the Company has filed

 

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the reports required to be filed under the Exchange Act for a period of at least 90 days prior to the date of such certificate and in addition has filed the most recent annual report required to be filed thereunder.

 

2.12.                     Preservation of Rights.  The Company will not (i) grant any registration rights to third parties which are more favorable than or inconsistent with the rights granted hereunder or (ii) enter into any agreement, take any action, or permit any change to occur, with respect to its securities that violates or subordinates the rights expressly granted to the Holders in this Agreement.

 

2.13.                     Lock-Up Provision.  Without the prior written consent of the Company, including the directors of the Company that are not “interested persons” of the Company as defined in the Investment Company Act of 1940, Great Elm Capital Group, Inc. will refrain, during the period commencing on the date of this Agreement and ending on the date that is on the one year anniversary of the date of this Agreement (each, a “Lock-Up Period”), from:

 

(a)                                 offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option, right or warrant for the sale of, lending or otherwise disposing of or transferring, directly or indirectly, any Registrable Securities, or

 

(b)                                 entering into any swap or other arrangement that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of Registrable Securities, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Registrable Securities or other securities, in cash or otherwise.

 

Notwithstanding the foregoing, subject to applicable securities laws and the restrictions contained in the Company’s organizational documents, Great Elm Capital Group, Inc. may transfer any Registrable Securities during the Lock-Up Period as follows: (A) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth in this Section 2.13; (B) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth in this Section 2.13; (C) as a distribution to stockholders, partners, members or affiliates of Great Elm Capital Group, Inc., provided that such stockholders, partners, members or affiliates agree to be bound in writing by the restrictions set forth in this Section 2.13; or (D) as collateral for any loan, provided that the lender agrees in writing to be bound by the restrictions set forth in this Section 2.13. For purposes of this Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.

 

ARTICLE 3
  MISCELLANEOUS

 

3.1.                            Notices.  Any notice, instruction, direction or demand required under the terms of this Agreement shall be in writing and shall be duly given upon delivery, if delivered by hand, or internationally recognized overnight courier (with postage prepaid), to the following addresses:

 

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If to the Company, to:

 

Great Elm Capital Corp.
 c/o MAST Capital Management LLC
 200 Clarendon Street, 51st Floor
 Boston, MA 02116
 Attention: General Counsel

 

With a copy to (which shall not constitute notice):

 

Skadden, Arps, Slate, Meagher & Flom LLP
 Four Times Square
 New York, NY 10036
 Attention: Michael K. Hoffman; and to

 

Schulte Roth & Zabel LLP
 1152 Fifteenth Street, NW, Suite 850
 Washington, DC 20005
 Attention: John J. Mahon

 

or to such other addresses or telecopy numbers as may be specified by like notice to the other parties.

 

If to any other Holder, the address indicated for such Holder in the Company’s stock transfer records with copies to each of the persons named above.

 

Any notice or communication hereunder shall be deemed to have been given or made as of the date so delivered if personally delivered; when answered back, if telexed; when receipt is acknowledged, if telecopied; and five calendar days after mailing if sent by registered or certified mail (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee).

 

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

 

3.2.                            Authority.  Each of the parties hereto represents on behalf of itself as follows: (i) it has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby, (ii) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms hereof.

 

3.3.                            Governing Law.

 

3.3.1                     This Agreement is to be construed in accordance with and governed by the internal laws of the State of New York without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of New York to the rights and duties of the parties.

 

3.3.2                     Each party hereby irrevocably and unconditionally consents to submit to the sole and exclusive jurisdiction of the United States District Court for the Southern District of New York or, if

 

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such court does not have jurisdiction, the Supreme Court of the State of New York sitting in New York County (the “New York Courts”) for any legal action or other legal proceeding arising out of or relating to this Agreement, or the negotiation, validity or performance of this Agreement, or the transactions contemplated thereby (and agrees not to commence any legal action or other legal proceeding relating thereto except in such courts), including to enforce any settlement, order or award. Each party hereto:

 

(i)                                     consents to service of process in any such proceeding in any manner permitted by the laws of the State of New York, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 3.1 is reasonably calculated to give actual notice;

 

(ii)                                  agrees that the New York Courts shall be deemed to be a convenient forum; and

 

(iii)                               waives and agrees not to assert (by way of motion, as a defense or otherwise), in any such legal proceeding commenced in the New York Courts that such party is not subject personally to the jurisdiction of such court, that such legal proceeding has been brought in an inconvenient forum, that the venue of such proceeding is improper or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court.

 

3.3.3                     In the event of any action or other proceeding relating to this Agreement or the enforcement of any provision of this Agreement, the prevailing party (as determined by the court) shall be entitled to payment by the non-prevailing party of all costs and expenses (including reasonable attorneys’ fees) incurred by the prevailing party, including any costs and expenses incurred in connection with any challenge to the jurisdiction or the convenience or propriety of venue of proceedings before the New York Courts.

 

3.3.4                     Each of the parties hereto hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any legal action or other legal proceeding directly or indirectly arising out of, under or in connection with this Agreement or the transactions contemplated hereby. Each of the parties hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement and the transactions contemplated by this Agreement, as applicable, by, among other things, the mutual waivers set forth in this Section 3.3.4.

 

3.4.                            Remedies.  Each Holder, in addition to being entitled to exercise all rights provided to it herein or granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at law would be adequate.

 

3.5.                            Successors and Assigns.  Except as otherwise expressly provided herein, this Agreement shall be binding upon and benefit the Company, each Holder, and their respective successors and assigns.

 

3.6.                            Severability.  Any term or provision hereof that is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the invalid, void or unenforceable term or provision in any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction or other authority declares any term

 

17

 

or provision hereof invalid, void or unenforceable, the court or other authority making such determination will have the power to and will, subject to the discretion of such body, reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.

 

3.7.                            Waivers.  A provision of this Agreement may be waived only by a writing signed by the party or parties intended to be bound by the waiver. A Holder may waive a provision of this Agreement that relates exclusively to their rights, remedies or conditions under this Agreement that does not affect, directly or indirectly, the rights of other Holders. The Holders of at least 80% of the then outstanding Registrable Securities may waive any provision of this Agreement so long as any Holder that does not approve of such waiver is not affected by such waiver in a manner materially worse than the approving Holders. A party is not prevented from enforcing any right, remedy or condition in the party’s favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a party’s rights and remedies in this Agreement is not intended to be exclusive, and a party’s rights and remedies are intended to be cumulative to the extent permitted by law and include any rights and remedies authorized in law or in equity.

 

3.8.                            Amendment.  This Agreement may not be amended or modified in any respect except by a written agreement signed by the Company and the Holders of at least 80% of the then outstanding Registrable Securities.

 

3.9.                            Entire Agreement.  This Agreement contains the entire agreement of the parties and supersedes all prior and contemporaneous agreements, negotiations, arrangements, representations and understandings, written, oral or otherwise, between the parties with respect to the subject matter hereof.

 

3.10.                     Counterparts.  This Agreement may be executed in one or more counterparts (whether delivered by electronic copy or otherwise), each of which will be considered one and the same agreement and will become effective when counterparts have been signed by each of the parties and delivered to the other party.  Each party need not sign the same counterpart.

 

3.11.                     Construction and Interpretation.  When a reference is made in this Agreement to a section or article, such reference will be to a section or article of this Agreement, unless otherwise clearly indicated to the contrary.  Whenever the words “include,” “includes” or “including” are used in this Agreement they will be deemed to be followed by the words “without limitation”.  The words “hereof,” “herein” and “herewith” and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article and section references are references to the articles and sections of this Agreement, unless otherwise specified.  The plural of any defined term will have a meaning correlative to such defined term and words denoting any gender will include all genders and the neuter.  Where a word or phrase is defined herein, each of its other grammatical forms will have a corresponding meaning.  A reference to any legislation or to any provision of any legislation will include any modification, amendment, re-enactment thereof, any legislative provision substituted therefore and all rules, regulations and statutory instruments issued or related to such legislation.  If any ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.  No prior draft of this Agreement will be used in the interpretation or construction of this Agreement.  The parties intend that each provision of this Agreement will be given full separate and independent effect.  Although the

 

18

 

same or similar subject matters may be addressed in different provisions of this Agreement, the parties intend that, except as expressly provided herein, each such provision will be read separately, be given independent significance and not be construed as limiting any other provision of this Agreement (whether or not more general or more specific in scope, substance or content).  Headings are used for convenience only and will not in any way affect the construction or interpretation of this Agreement.  References to documents includes electronic communications.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

19

 

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

 

	
GREAT ELM CAPITAL CORP.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Peter A. Reed
    	
 
    	
 
    	
 
    
	
Name:
    	
Peter A. Reed
    	
 
    	
 
    	
 
    
	
Title:
    	
Chief Executive Officer
    	
 
    	
 
    	
 
    

 

 

	
HOLDERS
    	
 
    
	
 
    	
 
    
	
GREAT ELM CAPITAL GROUP, INC.
    	
MAST CREDIT OPPORTUNITIES I MASTER FUND LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Richard S. Chernicoff
    	
 
    	
By:
    	
/s/ Adam Kleinman
    
	
Name:
    	
Richard S. Chernicoff
    	
 
    	
Name:
    	
Adam Kleinman
    
	
Title:
    	
Chief Executive Officer
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
MAST SELECT OPPORTUNITIES MASTER FUND LP
    	
MAST ADMIRAL MASTER FUND LP
    
	
 
    	
 
    
	
By:     MAST SELECT OPPORTUNITIES GP,  LLC, its General Partner
    	
 
    	
By:
    	
MAST ADMIRAL GP, LLC,

its General Partner
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Adam Kleinman
    	
 
    	
By:
    	
/s/ Adam Kleinman
    
	
Name:
    	
Adam Kleinman
    	
 
    	
Name:
    	
Adam Kleinman
    
	
Title:
    	
Authorized Signatory
    	
 
    	
Title:
    	
Authorized Signatory
    

 

Signature page to the Amended and Restated Registration Rights Agreement

 

20Exhibit 10.4

 

EXECUTION VERSION

 

INDEMNIFICATION AGREEMENT

 

INDEMNIFICATION AGREEMENT (this “Agreement”), dated as of [·] (the “Effective Date”), by and between [·] (“Indemnitee”) and Great Elm Capital Corp., a Maryland corporation (the “Company”).

 

RECITALS

 

It is essential to the Company to retain and attract as directors and officers the most capable persons available;

 

Indemnitee has agreed (i) to serve as a director of the Company and (ii) to be named by the Company in a registration statement filed by the Company with the Securities and Exchange Commission on Form N-14 (the “Registration Statement”) as a person that has agreed to serve as a director and may, in connection with either or both of the foregoing activities, be subjected to claims, suits or proceedings;

 

The Company’s governing documents (the “Organizational Documents”) currently provide for the indemnification of the Company’s directors and officers in respect of various claims, liabilities, losses and expenses to which they may become subject as a result of serving as an officer and/or director of the Company; the Company wishes to confirm the manner in which such indemnification will be made available to Indemnitee, and the Company also wishes to confirm its agreement that the indemnification to be provided to the Indemnitee by the Company will extend to any and all claims, liabilities, losses and expenses to which the Indemnitee may become subject as a result of being named in the Registration Statement as a person that has agreed to serve as a director of the Company;

 

The Organizational Documents permit the Company to advance expenses to its directors and officers in connection with defending any action with respect to which indemnification might be sought pursuant to the Organizational Documents and the Indemnitee has agreed to serve as a director of the Company in part in reliance on the Organizational Documents and on the additional undertakings of the Company provided for herein;

 

As an inducement to Indemnitee (i) to consent to be named in the Registration Statement as a person that has agreed to serve as a director and (ii) to serve thereafter in such capacity and in such other capacities as may be requested from time to time and to provide Indemnitee with contractual assurance that advancement of expenses will be available to Indemnitee, the Company has agreed to advance expenses that may be incurred by Indemnitee in connection with any matter in respect of which indemnification might be sought pursuant to the Organizational Documents or this Agreement, in each case to the maximum extent permitted by law as hereinafter provided; and

 

The parties by this Agreement desire to set forth their agreement regarding indemnification and advancement of expenses.

 

AGREEMENT

 

In consideration of the foregoing and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

1.                                      DEFINITIONS.  For purposes of this Agreement:

 

1.1                               “Corporate Status” means the status of a person as a future, present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, 

 

 

limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company: (i) if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust or other enterprise (x) of which a majority of the voting power or equity interest is owned directly or indirectly by the Company or (y) the management of which is controlled directly or indirectly by the Company, or (ii) if, as a result of Indemnitee’s service to the Company or any of its affiliated entities, Indemnitee is subject to duties by, or required to perform services for, an employee benefit plan or its participants or beneficiaries, including as a deemed fiduciary thereof. Corporate Status includes the status of a person named in a registration statement filed under the Securities Act of 1933 as a person that has agreed to serve as a director of the Company.

 

1.2                               “Directors” and “Board of Directors” shall mean the persons duly elected or appointed to the Board of Directors of the Company from time to time, so long as they shall continue in office, and all other persons who at the time in question have been duly elected or appointed and have qualified as directors in accordance with the provisions of the Organizational Documents and the Bylaws of the Company and are then in office.

 

1.3                               “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium for, security for and other costs relating to any cost bond, supersedes bond or other appeal bond or its equivalent.

 

1.4                               “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or its investment adviser, or any affiliate of either of them, or Indemnitee, in any matter material to any such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

1.5                               “Independent Director” means a Director that is not an “interested person” as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”).

 

1.6                               “Independent Disinterested Director” means an Independent Director who is not, and was not, a party to the Proceeding in respect of which indemnification and/or advancement of Expenses is sought by Indemnitee.

 

 

1.7                               “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or result in the institution of a Proceeding, such situation shall also be considered a Proceeding.

 

2.                                      INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.

 

2.1                               Indemnification Obligation.  Subject to the limitations set forth in Section 2.3, the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) as otherwise permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits that are available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitations set forth in Section 2.3, the rights of Indemnitee provided in this Section 2.1 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”).

 

2.2                               Standards. Subject to the limitations set forth in Section 2.3, if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, damages, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, or (b) Indemnitee actually received an improper personal benefit in money, property or services in the matter giving rise to the Proceeding or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

 

2.3                               Limitations.  Notwithstanding any other provision of this Agreement (other than Section 2.4), Indemnitee shall not be entitled to:

 

(a)                                 indemnification hereunder in respect of a Proceeding if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged in that Proceeding to be liable to the Company;

 

(b)                                 indemnification hereunder in respect of any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in Indemnitee’s Corporate Status, if Indemnitee is adjudged in that Proceeding to be liable on the basis that personal benefit was improperly received; or

 

(c)                                  indemnification or advancement of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by this Agreement, or (ii) the Company’s Organizational Documents, a resolution of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.

 

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2.4                               Court Ordered Indemnification. A court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:

 

(a)                                 if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL and the court shall order indemnification, in which case Indemnitee shall be entitled in addition to recover the Expenses of securing such reimbursement; or

 

(b)                                 if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper; provided, however, that indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.

 

2.5                               Expenses. Subject to the limitations set forth in Section 2.3, to the extent that Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense or prosecution of such Proceeding, Indemnitee shall be indemnified for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 2.5 for all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with such Proceeding except only for any such Expenses that would not have been incurred if the only claims, issues or matters addressed in the Proceeding had been those as to which Indemnitee was successful. For purposes of this Section 2.5, and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

2.6                               Expense Advances. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all Expenses incurred by or on behalf of Indemnitee in connection with such Proceeding. Such advance or advances shall be made within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding and may be in the form of, in the reasonable discretion of Indemnitee (but without duplication), (a) payment of such Expenses directly to third parties on behalf of Indemnitee, (b) advancement to Indemnitee of funds in an amount sufficient to pay such Expenses or (c) reimbursement to Indemnitee for Indemnitee’s payment of such Expenses. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee to reimburse the portion of any Expenses advanced to Indemnitee, relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence, that the standard of conduct has not 

 

 

been met by Indemnitee and which have not been successfully resolved as described in Section 2.5. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 2.6 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.

 

2.7                               Payment of Expenses. Subject to the limitations set forth in Section 2.3, to the extent that Indemnitee is or may be, by reason of his or her Corporate Status, made a witness or otherwise asked by the Company or legally required to participate in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, he or she shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee.

 

3.                                      PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.

 

3.1                               Claim. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in his or her sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

 

3.2                               Consideration of Claim.  Upon written request by Indemnitee for indemnification pursuant to Section 3.1, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) by the Board of Directors by a majority vote of a quorum consisting of Independent Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Independent Disinterested Directors, (ii) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (iii) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. Notwithstanding the foregoing, if Indemnitee so requests, the determination provided for in this Section 3.2 shall be made by Independent Counsel. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the person or persons making such determination pursuant to this Section 3.2. Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) 

 

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and the Company shall indemnify and hold Indemnitee harmless therefrom.

 

3.3                               Independent Counsel. The Company shall pay the fees and expenses of Independent Counsel, if one is appointed.

 

4.                                      PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.

 

4.1                               Presumption. In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 3.1, and unless at such time Indemnitee is an “interested person” of the Company (as defined in the 1940 Act), the Company shall have the burden of proof to overcome that presumption with clear and convincing evidence in connection with the making of any determination contrary to that presumption.

 

4.2                               Termination The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, creates a rebuttable presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification but Indemnitee may rebut that presumption with an affidavit attesting to Indemnitee’s good faith belief that Indemnitee is entitled to indemnification or in any other reasonably appropriate manner.

 

4.3                               Knowledge. The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.

 

5.                                      REMEDIES OF INDEMNITEE.

 

5.1                               Appeal. If a determination is made pursuant to Section 3 that Indemnitee is not entitled to indemnification or advancement of expenses under this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Maryland or in any other court of competent jurisdiction of Indemnitee’s entitlement to such indemnification or advancement of expenses.

 

5.2                               Binding Effect. If a determination shall have been made pursuant to Section 3 that Indemnitee is entitled to indemnification or advancement of expenses, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to Section 3, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification or advancement of expenses.

 

6.                                      NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; SUBROGATION.

 

6.1                               Non-Exclusivity. The rights to indemnification and advancement of expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law or the Organizational Documents. No amendment, alteration 

 

 

or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s corporate status prior to such amendment, alteration or repeal. No amendment, modification or alteration to the Organizational Documents or the Bylaws of the Company shall, nor shall any action taken by Company shareholders, operate to alter, modify, amend or repeal Indemnitee’s right to indemnification or advancement of expenses under this Agreement; the rights and obligations of the parties hereunder may only be altered, amended, modified or repealed pursuant to Section 13.

 

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

 

6.3                               No Duplication. The Company shall not be liable under this Agreement to make any payment of amounts otherwise reimbursable as expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

 

6.4                               Savings Clause. The Company shall not be liable under this Agreement to make any payment of amounts otherwise reimbursable as expenses hereunder where the making of such payment would violate applicable law (including, for the avoidance of doubt, the 1940 Act).

 

7.                                      CONTRIBUTION.  If the indemnification provided in this Agreement is unavailable in whole or in part and may not be paid to Indemnitee for any reason, other than for failure to satisfy the standard of conduct set forth in Section 2.2 or due to the provisions of Section 2.3, then, with respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), to the fullest extent permissible under applicable law, the Company, in lieu of indemnifying and holding harmless Indemnitee, shall pay, in the first instance, the entire amount ot the liability incurred by Indemnitee, whether for Expenses, judgments, penalties, and/or amounts paid or to be paid in settlement, in connection with such Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.

 

8.                                      REPORTS TO STOCKHOLDERS.  To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.

 

9.                                      BINDING EFFECT.

 

9.1                               Successors. The indemnification and advancement of expenses granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue in effect whether or not Indemnitee becomes a Director and after Indemnitee has ceased to be a Director, and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.

 

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9.2                               Assumption by Operation of Law.  Any successor of the Company (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, shall be automatically deemed to have assumed and agreed to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place, provided that no such assumption shall relieve the Company of its obligations hereunder.

 

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

 

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

 

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

 

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

 

14.                               NOTICES.  Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is accepted by the party to whom it is given, and shall be given by being delivered at the following addresses to the parties hereto:

 

If to Indemnitee, to:  The address set forth on the signature page hereto.

 

	
If to the   Company to:
    	
Great Elm   Capital Corp.
    
	
 
    	
200   Clarendon Street, 51st Floor
    
	
 
    	
Boston, MA   02116
    
	
 
    	
Attention:   General Counsel
    

 

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

 

15.                               GOVERNING LAW.  The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

 

16.                               ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.

 

 

The parties hereto have executed this Agreement as of the day and year first above written.

 

GREAT ELM CAPITAL CORP.

 

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Indemnitee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Address:
    	
 
    

 

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