EXHIBIT 10.9
INVESTMENT ADVISORY AND ADMINISTRATIVE AGREEMENT
THIS INVESTMENT ADVISORY AND ADMINISTRATIVE AGREEMENT (this "Agreement") is
entered into as of the 2nd day of July 2004 by and between Gladstone Capital
Corporation, a Maryland corporation and its wholly-owned subsidiary (the
"Company") and Gladstone Management Corporation, a Delaware corporation
("Adviser").
W I T N E S S E T H:
WHEREAS, the Company is a non-diversified closed-end management investment
company that has elected to be regulated as a business development company
pursuant to the provisions of the Investment Company Act of 1940, as amended,
and the rules and regulations promulgated thereunder (the "Investment Company
Act"); and
WHEREAS, Adviser is a registered investment adviser pursuant to the Investment
Advisers Act of 1940, as amended, and the rules and regulations promulgated
there under (the "Advisers Act"); and
WHEREAS, the Company desires to retain Adviser to serve as its investment
adviser and, in connection therewith, to perform certain administrative and
investment advisory services on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
set forth, the parties agree as follows:
1.
APPOINTMENT OF ADVISER
(A)
THE COMPANY HEREBY APPOINTS ADVISER TO SERVE AS ITS INVESTMENT
ADVISER AND ADMINISTRATOR FOR THE PERIOD AND ON THE TERMS AND SUBJECT TO THE
CONDITIONS AS SET FORTH IN THIS AGREEMENT.
(B)
ADVISER HEREBY ACCEPTS APPOINTMENT AS INVESTMENT ADVISER AND
ADMINISTRATOR TO THE COMPANY AND AGREES TO RENDER THE SERVICES AND DISCHARGE THE
DUTIES SET FORTH IN THIS AGREEMENT IN COMPLIANCE WITH (I) THE TERMS AND
CONDITIONS OF THIS AGREEMENT, (II) THE ARTICLES OF INCORPORATION AND BYLAWS OF
THE COMPANY, EACH AS AMENDED FROM TIME TO TIME, (III) THE COMPANY'S STATED
INVESTMENT OBJECTIVES, POLICIES AND LIMITATIONS, (IV) APPLICABLE LAWS AND
REGULATIONS, AND SUBJECT TO THE SUPERVISION OF THE COMPANY'S BOARD OF DIRECTORS
(THE "BOARD").
2.
SERVICES AND DUTIES OF ADVISER
(A)
ADVISER SHALL:
(I)
(A) MANAGE THE INVESTMENT AND REINVESTMENT OF THE COMPANY'S
ASSETS, INCLUDING IDENTIFYING, EVALUATING, AND STRUCTURING SUCH INVESTMENTS;
(B) CONTINUOUSLY REVIEW, SUPERVISE AND ADMINISTER THE COMPANY'S INVESTMENT
PROGRAM TO DETERMINE IN ITS DISCRETION THE SECURITIES TO BE PURCHASED OR SOLD
AND THE PORTION OF THE COMPANY'S ASSETS TO BE HELD UN-INVESTED; (C) OFFER TO
PROVIDE SIGNIFICANT MANAGERIAL ASSISTANCE TO THE ISSUERS OF SECURITIES IN WHICH
THE COMPANY IS INVESTED AS REQUIRED BY THE INVESTMENT COMPANY ACT; (D) ARRANGE
DEBT FINANCING FOR THE COMPANY; (E) PROVIDE THE COMPANY WITH ALL REQUIRED
RECORDS CONCERNING ADVISER'S EFFORTS ON BEHALF OF THE COMPANY; AND (F) PROVIDE
REGULAR REPORTS TO THE COMPANY'S BOARD CONCERNING ADVISER'S ACTIVITIES ON BEHALF
OF THE COMPANY; AND
(II)
MANAGE THE COMPANY'S DAY-TO-DAY OPERATIONS AND ADMINISTRATION,
RECORD KEEPING AND REGULATORY COMPLIANCE FUNCTIONS.
WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, ADVISER SPECIFICALLY SHALL BE RESPONSIBLE FOR (A)
PREPARING PERIODIC FINANCIAL STATEMENTS; (B) PREPARING FINANCIAL AND ACCOUNTING
REPORTS FOR PRESENTATION TO THE COMPANY'S BOARD AND FOR STOCKHOLDERS AND
GOVERNMENTAL AGENCIES; (C) CALCULATING AND PUBLISHING THE COMPANY'S NET ASSET
VALUE PER SHARE; (D) OVERSEEING THE PREPARATION AND FILING OF THE