Exhibit 10.30


 


AMENDMENT NO. 5, CONSENT AND
WAIVER

TO

CREDIT AGREEMENT


 


THIS AMENDMENT NO. 5, CONSENT
AND WAIVER TO CREDIT AGREEMENT (this “Amendment”) dated as of May 27,
2005, is entered into among GLADSTONE BUSINESS LOAN, LLC, as the Borrower,
TAHOE FUNDING CORP., LLC and PUBLIC SQUARE FUNDING LLC, as CP Lenders
(collectively, the “CP Lenders”), DEUTSCHE BANK AG, NEW YORK BRANCH (“Deutsche
Bank”) and KEYBANK, NATIONAL ASSOCIATION (“KeyBank”), as Committed
Lenders (collectively, the “Committed Lenders”), Deutsche Bank and
KeyBank as Managing Agents (in such capacity, collectively the “Managing
Agents”) and Deutsche Bank as Administrative Agent (in such capacity, the “Administrative
Agent”).  Capitalized terms used
herein without definition shall have the meanings ascribed thereto in the “Credit
Agreement” referred to below.


 


PRELIMINARY STATEMENTS


 


A.            Reference is
made to that certain Credit Agreement dated as of May 19, 2003 among the
Borrower, Gladstone Advisers, Inc., as Servicer, the CP Lenders, the Committed
Lenders, the Managing Agents and the Administrative Agent (as amended, modified
or supplemented from time to time, including, without limitation, by that
certain Resignation, Appointment and Consent dated as of September 28, 2004,
and as further amended, restated, supplemented or modified from time to time,
the “Credit Agreement”).


 


B.            The parties
hereto have agreed to (i) amend certain provisions of the Credit Agreement upon
the terms and conditions set forth herein and (ii) consent to the modification
by the Borrower and the Servicer of the Credit and Collection Policy.


 


SECTION 1.  Amendment.  Subject to the satisfaction of the conditions
precedent set forth in Section 4 hereof, the parties hereto hereby
agree:


 


(i)            to amend
Section 1.1 by adding the following new definitions in alphabetical order, as
follows:


 


Post-Termination
Revolver Loan Fundings: means an advance by the Committed Lenders,
made on or following the Revolver Loan Funding Date, which may be used for the
sole purpose of funding advances requested by Obligors under the Revolver Loans.


 


Revolver
Loan:  means each Loan with respect
to which the Borrower has a revolving credit commitment to advance amounts to
the applicable Obligor during a specified term.


 


Revolver
Loan Funding:  has the
meaning given to such term in Section 2.14.


 





















 


Revolver
Loan Funding Account: has the meaning given to such term in Section
2.14.


 


Revolver
Loan Funding Account Shortfall: means, on any date, the
amount, if any, by which the Revolver Loan Funding Amount at such time exceeds
the aggregate amount on deposit in the Revolver Loan Funding Accounts.


 


Revolver
Loan Funding Account Surplus:  means, on any date, the amount, if any, by
which the amount on deposit in the Revolver Loan Funding Accounts exceeds the Revolver
Loan Funding Amount at such time.


 


Revolver
Loan Funding Amount: has the meaning given to such term in Section
2.14.


 


Revolver
Loan Funding Date:  means the
Termination Date, if Revolver Loans are outstanding on such date.


 


Servicing
Fee Limit Amount:  means, for
each Payment Date, an amount equal to 50% of the Servicing Fee for the related
Settlement Period.


 


(ii)           to delete the
definition of “Commitment Termination Date” in its entirety, and
substitute the following therefor:


 


Commitment
Termination Date: means May 26, 2006, or such later date to which
the Commitment Termination Date may be extended (if extended) in the sole
discretion of the Lenders in accordance with the terms of Section 2.1(b).


 


(iii)          to amend the
definition of “Credit and Collection Policy” to delete the reference to “Section
7.8(g)” set forth therein and substitute a reference to “Section 7.9(g)”
therefor.


 


(iv)          to delete
clause (viii) of the definition of “Eligible Loan” and substitute the following
therefor:


 


(viii)        the Loan bears
interest, which is due and payable no less frequently than quarterly, except
for (i) Loans which bear interest which is due and payable no less frequently
than semi-annually, provided that the aggregate Outstanding Loan Balances of
such Loans do not exceed 10% of the Aggregate Outstanding Loan Balance and (ii)
PIK Loans,


 


(v)           to add the
following clauses (xxii) and (xxiii) to the definition of “Eligible Loan”
in appropriate numeric order therein:


 


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(xxii)        if such Loan is
a Revolver Loan, it shall be secured by a first priority, perfected security
interest on certain assets of the Obligor which shall include, without
limitation, accounts receivable and inventory; and


 


(xxiii)       if such Loan is a Revolver Loan, the
revolving credit commitment of the Borrower to the applicable Obligor
thereunder (A) is between $500,000 and $5,000,000, (B) shall have a term to
maturity of one year or less and (C) shall permit borrowings thereunder not
more frequently than once per week.


 


(vi)          to delete the
definition of “Excess Concentration Amount” and substitute the following
therefor:


 


Excess Concentration Amount:  On any date of
determination, the sum of, without duplication, (a) the aggregate amount by
which the Outstanding Loan Balances of Eligible Loans included as part of the
Collateral, the Obligors of which are residents of any one state, exceeds 40%
of the Aggregate Outstanding Loan Balance, (b) the aggregate amount by which
the Outstanding Loan Balances of Eligible Loans included as part of the
Collateral, the Obligors of which are in the same Industry, exceeds 25% of the
Aggregate Outstanding Loan Balance, (c) the aggregate amount by which the
Outstanding Loan Balance of each Eligible Loan included as part of the Collateral
exceeds the Large Loan Limit applicable to such Eligible Loan, (d) the
aggregate amount by which the Outstanding Loan Balances of all Eligible Loans
included as part of the Collateral whose interest payments are due and payable
less frequently than monthly exceeds 66 2/3% of the Aggregate Outstanding Loan
Balance, (e) the aggregate amount by which the
Outstanding Loan Balances of all Eligible Loans included as part of the
Collateral which are PIK Loans exceeds 40% of
the Aggregate Outstanding Loan Balance, (f) the aggregate amount by which the
Outstanding Loan Balances of all Eligible Loans included as part of the
Collateral which are PIK Loans having a PIK
accrual component greater than 3.0% exceeds 25% of the Aggregate Outstanding
Loan Balance, (g) the aggregate amount by which the Outstanding Loan Balances
of all Eligible Loans that have original terms to maturity greater than 84
months exceeds 10% of the Aggregate Outstanding Loan Balance, (h) the
aggregate amount by which the Outstanding Loan Balances of Qualifying
Syndicated Loans included as part of the Collateral, for which no Subsequent
Delivery Trust Receipt 


 


3





















 


(as
defined in the Custody Agreement) has been received exceeds $30,000,000, (i) the
aggregate Outstanding Loan Balances of all Loans which (A) do not have a
long-term credit rating from either S&P or Moody’s and (B) are not priced
by Standard & Poor’s Securities Evaluations, Inc. on a quarterly basis and
have not been so priced by Standard & Poor’s Securities Evaluations, Inc.
for a period in excess of (x) with respect to the Loans described in Annex III to
that certain Amendment No. 4 hereto dated as of September 28, 2004, 45 days
from September 28, 2004 or (y) otherwise, 135 days from the date such Loan
becomes a Transferred Loan, provided, however, that the requirements of
this clause (i) shall not apply to the Marcal RE Loan, (j) the aggregate
amount by which the Outstanding Loan Balances of all Eligible Loans included as
part of the Collateral which are Revolver Loans exceeds $20,000,000 and (k) the
aggregate amount by which the Outstanding Loan Balances of all Eligible Loans
that are unsecured exceeds 10% of the Aggregate Outstanding Loan Balance.


 


(vii)         to delete the
definition of “Payment Date” in its entirety, and substitute the
following therefor:


 


Payment
Date: means the seventh (7th) day of each calendar month or, if such day is
not a Business Day, the next succeeding Business Day; provided that for
purposes of distributions required pursuant to Section 2.8(a)(vii) only,
“Payment Date” shall mean any Business Day.


 


(viii)        to amend
Section 2.1(a) to delete the sentences “Such Funding Request shall be delivered
not later than 5:00 p.m. (New York City time) on the date which is four (4)
Business Days prior to the requested Funding Date.  Following receipt by the Administrative Agent
of a Funding Request, the Administrative Agent shall forward such Funding
Request to each Managing Agent not later than 12:00 p.m. (New York City time)
on the date which is three (3) Business Days prior to the requested Funding
Date.” and substitute the following therefor:


 


Such
Funding Request shall be delivered not later than 10:00 a.m. (New York City
time) on the date which is one (1) Business Day prior to the requested Funding
Date.  Following receipt by the
Administrative Agent of a Funding Request, the Administrative Agent shall
forward such Funding Request to each Managing Agent not later than 11:00 a.m.
(New York City time) that day.


 


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(ix)           to amend
Section 2.2(c) to insert the phrase, “provided that the requirements of
this Section 2.2(c) shall apply only with respect to the first Advance
to be made with respect to a Revolver Loan” at the end of the first sentence
thereof;


 


(x)            to amend
Section 2.2(e) to delete the phrase “at least $3,000,000” and substitute the
phrase “at least $3,000,000, or, if such Advance is to be made with respect to
a Revolver Loan, at least $100,000” therefor;


 


(xi)           to amend
Section 2.3(b) to delete the phrase “at least three (3) Business Days prior to
the proposed Funding Date (or such shorter period of time or later date as may
be agreed to by the Required Committed Lenders)” and substitute the phrase “at
least one (1) Business Day prior to the date of such repayment” therefor


 


(xii)          to further
amend Section 2.3(b) to delete the phrase “$1,000,000 with integral multiples
of $100,000 above such amount” and substitute the phrase “$1,000,000 with
integral multiples of $100,000 above such amount, or, with respect to any
partial prepayment made in connection with payments received in respect of a Revolver
Loan, $100,000 with integral multiples of $100,000 above such amount” therefor;


 


(xiii)         to delete “Section
2.8   Settlement Procedures” in its
entirety and substitute the section set forth in Annex I therefor;


 


(xiv)        to amend
Article II to add the following Section 2.14 in numeric order therein:


 


Section 2.14         Revolver Loan Funding.  (a)  Upon the occurrence of a Revolver Loan Funding
Date (i) each CP Lender shall make an assignment to its related Committed
Lenders of its Advances Outstanding in respect of Revolver Loans at such time
and (ii) each Committed Lender shall make an advance (each, a “Revolver Loan
Funding”) in an amount equal to such Committed Lender’s ratable share of
the aggregate outstanding unfunded commitments under the Revolver Loans (collectively,
the “Revolver Loan Funding Amount”). 
Upon receipt of the proceeds of such Revolver Loan Funding, the
Administrative Agent shall deposit such funds into segregated accounts (each, a
“Revolver Loan Funding Account”), in its name, referencing the name of
such Committed Lender, and maintained at a Qualified Institution.  Each Committed Lender hereby grants to the
Administrative Agent full power and authority, on its behalf, to withdraw funds
from the applicable Revolver Loan Funding Account at the time of, and in
connection with, the funding of any Post-Termination Revolver Loan Fundings to 


 


5





















 


be
made by the Borrower, and to deposit to the related Revolver Loan Funding
Account any funds received in respect of each relevant Committed Lender’s
ratable share of principal payments under Section 2.8 hereof, all in
accordance with the terms of and for the purposes set forth in this
Agreement.  The deposit of monies in such
Revolver Loan Funding Account by any Committed Lender shall not constitute an
Advance (and such Committed Lender shall not be entitled to interest on such
monies except as provided in clause (d) below) unless and until (and then only
to the extent that) such monies are used to make Post-Termination Revolver Loan
Fundings pursuant to the first sentence of clause (b) below).  On each Payment Date, the Borrower shall pay
the Administrative Agent, for the benefit of the Committed Lenders, a fee (the “Revolver
Loan Funding Fee”) equal to 0.30%, multiplied by the weighted average
amount on deposit in the Revolver Loan Funding Accounts during the applicable
Settlement Period, calculated on the basis of a year of 360 days for the actual
number of days elapsed.


 


(b)           From and after
the establishment of a Revolver Loan Funding Account with respect to any Committed
Lender, and until the earlier of (i) the reduction to zero of all outstanding
commitments in respect of Revolver Loans and (ii) one year following the Revolver
Loan Funding Date, all Post-Termination Revolver Loan Fundings to be made by
such Committed Lender hereunder shall be made by withdrawing funds from the
applicable Revolver Loan Funding Account. 
On each Business Day during such time, the Administrative Agent shall,
(i) if a Revolver Loan Funding Account Shortfall exists, deposit the lesser of
(A) the amount allocable to the repayment of principal to the Committed Lenders
and (B) the Revolver Loan Funding Account Shortfall and (ii) if a Revolver Loan
Funding Account Surplus exists, pay to the applicable Managing Agent, on behalf
of each Committed Lender, such Committed Lender’s ratable share of the Revolver
Loan Funding Account Surplus.  Until the
earlier of (i) the reduction to zero of all outstanding commitments in respect
of Revolver Loans and (ii) one year following the Revolver Loan Funding Date,
all remaining funds then held in such Revolver Loan Funding Account (after
giving effect to any Post-Termination Revolver Loan Fundings to be made on such
date) shall be paid by the Administrative Agent to the applicable Managing
Agent, on behalf of such Committed Lender, and thereafter all payments made in
respect of the 


 


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Loans
(whether or not originally funded from such Committed Lender’s Revolver Loan
Funding Account) shall be paid directly to the applicable Managing Agent, on
behalf of such Committed Lender, in accordance with the terms of Section 2.8.


 


(c)           The Program
Agent may, its sole discretion, advance funds withdrawn from the Revolver Loan
Funding Accounts to (i) the Borrower or (ii) the applicable Obligor directly,
on behalf of the Borrower, and in either case, such funds shall be used solely
for the purpose of funding advances requested by an Obligor under a Revolver
Loan.


 


(d)           Proceeds in a Revolver
Loan Funding Account shall be invested, at the written direction of the
applicable Committed Lender (or the applicable Managing Agent on its behalf) to
the applicable Revolver Loan Funding Account bank, only in investments which
constitute Permitted Investments.  The
investment earnings with respect to a Revolver Loan Funding Account shall
accrue as the Committed Lender and Revolver Loan Funding Account bank shall
agree.  The Administrative Agent shall
direct the Revolver Loan Funding Account bank to pay all such investment
earnings from the relevant account directly to the applicable Managing Agent,
for the account of the applicable Committed Lender.


 


(e)           Notwithstanding
anything herein to the contrary, none of the Administrative Agent, the other
Managing Agents, the other Purchasers nor the Revolver Loan Funding Account
bank shall have any liability for any loss arising from any investment or
reinvestment made by it with respect to a Revolver Loan Funding Account in
accordance with, and pursuant to, the provisions hereof.


 


(xv)         to delete “Section
5.2   Hedging Agreement” in its entirety
and substitute the section set forth in Annex II therefor;


 


(xvi)        to amend “Section
12.1 Amendments and Waivers” to delete the following language in its entirety:


 


(x)
 written notice to Concord delivered two
(2) Business Days prior to effectiveness, which notice requirement may be waived
in Concord’s sole discretion and (y)


 


7





















 


(xvii)       to delete the form of Monthly Report set
forth on Exhibit E to the Credit Agreement in its entirety, and substitute the
form of Monthly Report set forth on Exhibit A hereto therefor.


 


SECTION 2.  Waiver.  Each of the Managing Agents and the
Administrative Agent hereby agrees to waive any Early Termination Event arising
solely as a result of the Borrower’s failure to comply with the requirements
under Section 5.2 of the Credit Agreement prior to its amendment hereunder.


 


SECTION 3.  Consent.  Each of the Managing Agents and the
Administrative Agent hereby waives the notice and timing requirements set forth
in Sections 5.1(r) and 7.9(g) of the Credit Agreement and consents to the
amendment to the Credit and Collection Policy, as set forth on Exhibit B
hereto.


 


SECTION 4.  Representations
and Warranties.  The Borrower hereby
represents 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 its terms; and


 


(b)           on the date
hereof, before and after giving effect to this Amendment, other than as amended
or waived pursuant to this Amendment, no Early Termination Event or Unmatured
Termination Event has occurred and is continuing.


 


SECTION 5.  Conditions
Precedent.  This Amendment shall
become effective on the first Business Day (the “Effective Date”) on
which the Administrative Agent or its counsel has received counterpart
signature pages of this Amendment, executed by each of the parties hereto.


 


SECTION 6.  Reference
to and Effect on the Transaction Documents.


 


(a)           Upon the
effectiveness of this Amendment, (i) each reference in the Credit Agreement to “this
Credit Agreement”, “this Agreement”, “hereunder”, “hereof”, “herein” or words
of like import shall mean and be a reference to the Credit Agreement as amended
or otherwise modified hereby, and (ii) each reference to the Credit Agreement
in any other Transaction Document or any other document, instrument or
agreement executed and/or delivered in connection therewith, shall mean and be
a reference 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 Credit Agreement, 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.


 


(c)           The execution,
delivery and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy of the Administrative Agent, any Managing Agent or
any Lender under the Credit Agreement or any other Transaction Document or any
other document, instrument or agreement executed in connection 


 


8





















 


therewith, nor constitute a
waiver of any provision contained therein, in each case except as specifically
set forth herein.


 


SECTION 7.  Execution
in Counterparts.  This Amendment may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument.  Delivery of
an executed counterpart of a signature page to this Amendment by telecopier
shall be effective as delivery of a manually executed counterpart of this Amendment.


 


SECTION 8.  Governing
Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of New York.


 


SECTION 9.  Headings.  Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.


 


SECTION 10.  Fees
and Expenses.   Seller hereby
confirms its agreement to pay on demand all reasonable costs and expenses of
the Administrative Agent, Managing Agents or Lenders in connection with the
preparation, execution and delivery of this Amendment and any of the other
instruments, documents and agreements to be executed and/or delivered in
connection herewith, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel to the Administrative Agent, Managing Agents
or Lenders with respect thereto.


 


[Remainder of Page
Deliberately Left Blank]


 


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IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed by their respective officers as of the date
first above written.


 


	
   

  	
  GLADSTONE BUSINESS LOAN,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Stelljes, III

  	
   

  
	
   

  	
   

  	
  Name: George Stelljes, III

  
	
   

  	
   

  	
  Title: President and Chief Investment 

  Officer

  



 


 


Signature Page to
Amendment No.5


 





















 


	
   

  	
  TAHOE FUNDING CORP., LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Andrew L. Stidd

  	
   

  
	
   

  	
   

  	
  Name: Andrew L. Stidd

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG, NEW YORK BRANCH, as a

  Committed Lender, Managing Agent and Administrative

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Mark D. O’Keefe

  	
   

  
	
   

  	
   

  	
  Name: Mark D. O’Keefe

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Tina Gu

  	
   

  
	
   

  	
   

  	
  Name: Tina Gu

  
	
   

  	
   

  	
  Title: Vice President

  
						



 


 


Signature Page to
Amendment No.5


 





















 


	
   

  	
  PUBLIC SQUARE FUNDING LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Evelyn Echevarria

  	
   

  
	
   

  	
   

  	
  Name: Evelyn Echevarria

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KEYBANK,
  NATIONAL ASSOCIATION, as a

  Committed Lender and Managing Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Paul E. Henson

  	
   

  
	
   

  	
   

  	
  Name: Paul E. Henson

  
	
   

  	
   

  	
  Title: Executive Vice President

  
					



 


 


Signature Page to
Amendment No.5


 





















 


Annex I


 


Section
2.8      Settlement
Procedures.


 


On each Payment Date, the
Servicer on behalf of the Borrower shall pay for receipt by the applicable
Lender no later than 11:00 a.m. (New York City time) to the following Persons,
from (i) the Collection Account, to the extent of available funds, (ii)
Servicer Advances, and (iii) amounts received in respect of any Hedge Agreement
during such Settlement Period (the sum of such amounts described in clauses
(i), (ii) and (iii), minus any amounts required to be deposited to the Revolver
Loan Funding Accounts in accordance with Section 2.14 below being the “Available Collections”)
the following amounts in the following order of priority


 


(i)            FIRST, to each Hedge Counterparty, any amounts owing that
Hedge Counterparty under its respective Hedging Agreement in respect of any
Hedge Transaction(s), for the payment thereof, but excluding, to the extent the
Hedge Counterparty is not the same Person as the Administrative Agent, any Swap
Breakage and Indemnity Amounts;


 


(ii)           SECOND, to the Servicer, in an amount equal to any
Unreimbursed Servicer Advances, for the payment thereof;


 


(iii)          THIRD, to the extent not paid by the Servicer, to the
Backup Servicer and any Successor Servicer, as applicable, in amount equal to
any accrued and unpaid Backup Servicing Fee and, if any, accrued and unpaid
Transition Costs, Backup Servicer Expenses and Market Servicing Fee
Differential, each for the payment thereof;


 


(iv)          FOURTH, to the extent not paid by the Servicer, to
the Collateral Custodian in an amount equal to any accrued and unpaid
Collateral Custodian Fee and Collateral Custodian Expenses, if any, for the
payment thereof;


 


(v)           FIFTH, to the Servicer, in an amount equal to (A) if the
Servicer is Gladstone Advisers, Inc. or any of its Affiliates, its accrued and
unpaid Servicing Fees to the end of the preceding Settlement Period, up to the
Servicing Fee Limit Amount for such Settlement Period, for the payment thereof
and (B) otherwise, its accrued and unpaid Servicing Fees to the end of the
preceding Settlement Period for the payment thereof;


 


(vi)          SIXTH, to the Administrative Agent for payment to each
Managing Agent, on behalf of the related Lenders, in an amount equal to any
accrued and unpaid Interest, Program Fee and Liquidity Commitment Fee for such
Payment Date;


 


(vii)         SEVENTH, to the
Administrative Agent for payment to each Managing Agent, on behalf of the
related Lenders, an amount equal to the excess, if any, of Advances Outstanding
over the lesser of (i) the Borrowing Base or (ii) the Facility Amount, together
with the amount of Breakage Costs incurred by the 


 





















 


applicable Lenders in
connection with any such payment (as such Breakage Costs are notified to the
Borrower by the applicable Lender(s));


 


(viii)        EIGHTH, following the
occurrence of the Termination Date resulting from an Early Termination Event,
to the Administrative Agent for ratable payment to each Managing Agent, on
behalf of the related Lenders, in an amount to reduce Advances Outstanding to
zero and to pay any other Obligations in full;


 


(ix)           NINTH, to each Hedge
Counterparty, any Swap Breakage and Indemnity Amounts owing that Hedge
Counterparty.


 


(x)            TENTH, to the
Administrative Agent for payment to each Managing Agent, on behalf of the
related Lenders, in the amount of unpaid Breakage Costs (other than Breakage
Costs covered in clause (vii) above) with respect to any prepayments made on
such Payment Date, Increased Costs and/or Taxes (if any);


 


(xi)           ELEVENTH, to the Administrative Agent, all other
amounts then due under this Agreement to the Administrative Agent, the Lenders,
the Affected Parties or Indemnified Parties, each for the payment thereof;


 


(xii)          TWELFTH, to the Servicer, in an
amount equal to (A) if the Servicer is Gladstone Advisers, Inc. or any of its
Affiliates, its accrued and unpaid Servicing Fees to the end of the preceding
Settlement Period not otherwise paid pursuant to priority FIFTH above; and


 


(xiii)         THIRTEENTH, all remaining amounts to the Borrower.


 





















 


Annex II


 


Section 5.2                                      Hedging
Agreement.


 


 


(a)           The Borrower shall, on or before the
initial Advance hereunder, enter into a Hedge Transaction with a Hedge
Counterparty, which shall: (i) be in the form of interest rate caps or swaps
having a notional amount equal to (A) on the Closing Date, the Required
Notional Amount and (B) thereafter, an amount reflecting amortization at a rate
to be determined by the Managing Agents upon consultation with the Borrower and
(ii) shall provide for payments to the Borrower to the extent that the LIBO
Rate shall exceed a rate agreed upon between the Managing Agents and the
Borrower.  From and after May 27, 2005,
prior to acquiring a fixed-rate Loan, the Borrower will consult with the
Managing Agents to determine whether an additional cap or swap will be required
in respect of such Loan to maintain compliance with the requirements set forth
in the preceding sentence.


 


(b)           As additional security hereunder, the
Borrower hereby assigns to the Administrative Agent, as agent for the Secured
Parties, all right, title and interest of the Borrower in each Hedging
Agreement, each Hedge Transaction, and all present and future amounts payable
by a Hedge Counterparty to the Borrower under or in connection with the
respective Hedging Agreement and Hedge Transaction(s) with that Hedge
Counterparty (“Hedge
Collateral”),
and grants a security interest to the Administrative Agent, as agent for the
Secured Parties, in the Hedge Collateral. 
The Borrower acknowledges that, as a result of that assignment, the
Borrower may not, without the prior written consent of the Administrative
Agent, exercise any rights under any Hedging Agreement or Hedge Transaction,
except for the Borrower’s right under any Hedging Agreement to enter into Hedge
Transactions in order to meet the Borrower’s obligations under Section 5.2(a) hereof. 
Nothing herein shall have the effect of releasing the Borrower from any
of its obligations under any Hedging Agreement or any Hedge Transaction, nor be
construed as requiring the consent of the Administrative Agent or any Secured
Party for the performance by the Borrower of any such obligations.


 





















 


Exhibit A


 


Form of Monthly Report


 


Please see attached.


 





















 


Exhibit B


 


Credit and Collection Policy


 


On file with Agent.