EXHIBIT
10.19


 


EXECUTION
COPY


 


AMENDMENT NO. 2

TO

CREDIT AGREEMENT


 


THIS AMENDMENT NO. 2 TO
CREDIT AGREEMENT (this “Amendment”) dated as of February 6, 2004, is
entered into among GLADSTONE BUSINESS LOAN, LLC, as the Borrower, CONCORD
MINUTEMEN 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 Managing
Agents (in such capacity, collectively the “Managing Agents”) and CIBC
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, restated, supplemented or modified from time
to time, the “Credit Agreement”).


 


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


 


SECTION 1.  Amendment.  Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the parties hereto
hereby agree:


 


(i)            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 15% of
the Aggregate Outstanding Loan Balance and (ii) PIK Loans,


 


(ii)           to amend the definition of “Excess
Concentration Amount” to delete clause (e) thereof in its entirety and
substitute the following therefor:


 


(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, and (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.


 


(iii)          to delete in its entirety the
definition of “Purchased Loan Balance” and substitute the following
therefor:


 


Purchased Loan Balance:  As of any date of determination and any Transferred Loan, the
lesser 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 of
such Loan as of the Purchase Date for such Loan.


 


SECTION 2.  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 3.  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 4.  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.


 


2

















 


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


 


SECTION 5.  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 6.  Governing
Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of New York.


 


SECTION 7.  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 8.  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/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