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