**EXHIBIT10.19**

** **

**EXECUTIONCOPY**

** **

AMENDMENT NO. 2TOCREDIT AGREEMENT

 

THIS AMENDMENT NO. 2 TOCREDIT AGREEMENT (this “Amendment”) dated as of February 6, 2004, isentered into among GLADSTONE BUSINESS LOAN, LLC, as the Borrower, CONCORDMINUTEMEN CAPITAL COMPANY, LLC and PUBLIC SQUARE FUNDING LLC, as CP Lenders(collectively, the “CP Lenders”), CANADIAN IMPERIAL BANK OF COMMERCE (“CIBC”)and KEYBANK, NATIONAL ASSOCIATION (“KeyBank”), as Committed Lenders(collectively, the “Committed Lenders”), CIBC and KeyBank as ManagingAgents (in such capacity, collectively the “Managing Agents”) and CIBCas Administrative Agent (in such capacity, the “Administrative Agent”).  Capitalized terms used herein withoutdefinition shall have the meanings ascribed thereto in the “Credit Agreement”referred to below.

 

PRELIMINARY STATEMENTS

 

A.            Reference is made to that certain Credit Agreement datedas of May 19, 2003 among the Borrower, Gladstone Advisers, Inc., as Servicer,the CP Lenders, the Committed Lenders, the Managing Agents and theAdministrative Agent (as amended, restated, supplemented or modified from timeto time, the “Credit Agreement”).

 

B.            The parties hereto have agreed to amend certainprovisions of the Credit Agreement upon the terms and conditions set forth herein.

 

## SECTION 1.  Amendment.  Subject to the satisfaction of theconditions precedent set forth in Section 3 hereof, the parties heretohereby agree:

##  

#### (i)            to delete clause (viii) of thedefinition of “Eligible Loan” and substitute the following therefor:

####  

(viii)        the Loan bears interest, which is dueand payable no less frequently than quarterly, except for (i) Loans which bearinterest which is due and payable no less frequently than semi-annually, providedthat the aggregate Outstanding Loan Balances of such Loans do not exceed 15% ofthe Aggregate Outstanding Loan Balance and (ii) PIK Loans,

 

#### (ii)           to amend the definition of “ExcessConcentration Amount” to delete clause (e) thereof in its entirety andsubstitute the following therefor:

####  

(e) the aggregate amount bywhich the Outstanding Loan Balances of all Eligible Loans included as part ofthe

 

----

 

Collateral which are PIKLoans exceeds 40% of the Aggregate Outstanding Loan Balance, and (f) theaggregate amount by which the Outstanding Loan Balances of all Eligible Loansincluded as part of the Collateral which are PIK Loans having a PIK accrualcomponent greater than 3.0% exceeds 25% of the Aggregate Outstanding LoanBalance.

 

#### (iii)          to delete in its entirety thedefinition of “Purchased Loan Balance” and substitute the followingtherefor:

####  

Purchased Loan Balance:  As of any date of determination and any Transferred Loan, thelesser of (i) the Outstanding Loan Balance of such Loan as of such date, (ii)the Fair Market Value of such Loan, and (iii) the Outstanding Loan Balance ofsuch Loan as of the Purchase Date for such Loan.

 

## SECTION 2.  Representationsand Warranties.  The Borrower herebyrepresents and warrants to each of the other parties hereto, that:

##  

### (a)           this Amendment constitutes its legal,valid and binding obligation, enforceable against it in accordance with itsterms; and

###  

### (b)           on the date hereof, before and aftergiving effect to this Amendment, other than as amended or waived pursuant tothis Amendment, no Early Termination Event or Unmatured Termination Event hasoccurred and is continuing.

###  

## SECTION 3.  ConditionsPrecedent.  This Amendment shallbecome effective on the first Business Day (the “Effective Date”) onwhich the Administrative Agent or its counsel has received counterpartsignature pages of this Amendment, executed by each of the parties hereto.

##  

## SECTION 4.  Referenceto and Effect on the Transaction Documents.

##  

### (a)           Upon the effectiveness of thisAmendment, (i) each reference in the Credit Agreement to “this CreditAgreement”, “this Agreement”, “hereunder”, “hereof”, “herein” or words of likeimport shall mean and be a reference to the Credit Agreement as amended orotherwise modified hereby, and (ii) each reference to the Credit Agreement inany other Transaction Document or any other document, instrument or agreementexecuted and/or delivered in connection therewith, shall mean and be areference to the Credit Agreement as amended or otherwise modified hereby.

###  

### (b)           Except as specifically amended,terminated or otherwise modified above, the terms and conditions of the CreditAgreement, of all other Transaction Documents and any other documents,instruments and agreements executed and/or delivered in connection therewith,shall remain in full force and effect and are hereby ratified and confirmed.

 

2

----

 

### (c)           The execution, delivery andeffectiveness of this Amendment shall not operate as a waiver of any right,power or remedy of the Administrative Agent, any Managing Agent or any Lenderunder the Credit Agreement or any other Transaction Document or any otherdocument, instrument or agreement executed in connection therewith, norconstitute a waiver of any provision contained therein, in each case except asspecifically set forth herein.

###  

## SECTION 5.  Executionin Counterparts.  This Amendment maybe executed in any number of counterparts and by different parties hereto inseparate counterparts, each of which when so executed and delivered shall bedeemed to be an original and all of which taken together shall constitute butone and the same instrument.  Deliveryof an executed counterpart of a signature page to this Amendment by telecopiershall be effective as delivery of a manually executed counterpart of thisAmendment.

##  

## SECTION 6.  GoverningLaw.  This Amendment shall begoverned by and construed in accordance with the laws of the State of New York.

##  

## SECTION 7.  Headings.  Section headings in this Amendment areincluded herein for convenience of reference only and shall not constitute apart of this Amendment for any other purpose.

##  

## SECTION 8.  Feesand Expenses.   Seller herebyconfirms its agreement to pay on demand all reasonable costs and expenses ofthe Administrative Agent, Managing Agents or Lenders in connection with thepreparation, execution and delivery of this Amendment and any of the otherinstruments, documents and agreements to be executed and/or delivered inconnection herewith, including, without limitation, the reasonable fees andout-of-pocket expenses of counsel to the Administrative Agent, Managing Agentsor Lenders with respect thereto.

##  

[Remainder of Page Deliberately Left Blank]

 

3

----

 

INWITNESS WHEREOF, the parties hereto have caused this Amendment to be dulyexecuted by their respective officers as of the date first above written.

 

 
|   | GLADSTONE  BUSINESS LOAN, LLC |
|--------|-------------------------------|
|   |                          |   |
|   |                          |   |
|   | By:                           | /s/David Gladstone |   |
|   |                          |   |   |
|   |                          | Name: | David Gladstone |
|   |                          | Title: | Chairman |
|        |                               |  |  |  |

 

----

 
|   | CONCORD  MINUTEMEN CAPITAL COMPANY, LLC                                                               |
|--------|-------------------------------------------------------------------------------------------------------|
|   |                                                                                                  |   |
|   |                                                                                                  |   |
|   | By:                                                                                                   | /s/ Thomas J. Irvin |   |
|   |                                                                                                  | Name:  | Thomas J. Irvin |
|   |                                                                                                  | Title: | Manager |
|   |                                                                                                  |   |   |
|   |                                                                                                  |   |   |
|   | CANADIAN  IMPERIAL BANK OF COMMERCE, as a  Committed Lender, Managing Agent and Administrative  Agent |
|   |                                                                                                  |   |   |
|   |                                                                                                  |   |   |
|   | By:                                                                                                   | /s/  James  Lees |   |
|   |                                                                                                  | Name: | James Lees |
|   |                                                                                                  | Title: | Authorized Signatory |
|   |                                                                                                  |   |   |
|   |                                                                                                  |   |   |
|   | By:                                                                                                   |   /s/  Jeff Bazoian |   |
|   |                                                                                                  | Name: | Jeff Bazoian |
|   |                                                                                                  | Title: | Authorized Signatory |
|        |                                                                                                       |  |  |  |  |  |

 

----

 
|   | PUBLIC  SQUARE FUNDING LLC                                               |
|--------|--------------------------------------------------------------------------|
|   |                                                                     |   |   |
|   |                                                                     |   |   |
|   | By:                                                                      | /s/ Douglas K. Johnson |   |
|   |                                                                     | Name: | Douglas K. Johnson |
|   |                                                                     | Title: | President |
|   |                                                                     |   |   |
|   |                                                                     |   |   |
|   | KEYBANK, NATIONAL ASSOCIATION, as a  Committed Lender and Managing Agent |
|   |                                                                     |   |   |
|   |                                                                     |   |   |
|   | By:                                                                      | /s/   Anthony Bulic |   |
|   |                                                                     | Name: | Anthony Bulic |
|   |                                                                     | Title: | Vice-President |
|        |                                                                          |  |  |  |  |

 

----