Exhibit 10.12

 

INCREASE AGREEMENT

 

THIS INCREASE AGREEMENT dated as of December 27, 2019 (this “Agreement”), is
among STELLUS CAPITAL INVESTMENT CORPORATION, a Maryland corporation (the
“Borrower”), the LENDERS party hereto, and ZIONS BANCORPORATION, N.A. dba AMEGY
BANK, as Administrative Agent. Capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in Article I of this
Agreement.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to
that certain Senior Secured Revolving Credit Agreement, dated as of October 10,
2017 (as amended by that certain First Amendment to Senior Secured Revolving
Credit Agreement and Commitment Increase dated as of August 2, 2018, that
certain Second Amendment to Senior Secured Revolving Credit Agreement and
Commitment Increase dated as of September 13, 2019, and as the same may be
further amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”);

 

WHEREAS, the Borrower requests that the total Commitments be increased from
$200,000,000 to $220,000,000; and

 

WHEREAS, each Increasing Lender named in Article III hereof is willing on the
terms and subject to the conditions hereinafter set forth, to increase their
respective Commitment, subject to the terms and conditions of this Agreement.

 

NOW, THEREFORE, the parties hereto hereby covenant and agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Certain Definitions. The following terms when used in this Agreement
shall have the following meanings (such meanings to be equally applicable to the
singular and plural forms thereof):

 

“Agreement” is defined in the preamble.

 

“Borrower” is defined in the preamble.

 

“Credit Agreement” is defined in the first recital.

 

“Effective Date” is defined in Article V.

 

Section 1.2 Other Definitions. Capitalized terms used in this Agreement but not
defined herein, shall have the meanings given such terms in the Credit
Agreement.

 

ARTICLE II

COMMITMENT INCREASE REQUEST

 

On or before December 19, 2019, the Borrower irrevocably requested that the
Commitments be increased from $200,000,000 to $220,000,000 in the aggregate (the
“Commitment Increase”) pursuant to Section 2.08(e) of the Credit Agreement.

 

 

 

 

ARTICLE III

AGREEMENT TO INCREASE COMMITMENTS

 

Subject to the occurrence of the Effective Date (as hereinafter defined), the
Commitments are increased on the Effective Date as follows:

 

Section 3.1       Increasing Lenders. Zions Bancorporation, N.A. dba Amegy Bank
hereby agrees to increase its Dollar Commitment from $30,000,000 to $35,000,000.
Hancock Whitney Bank hereby agrees to increase its Dollar Commitment from
$20,000,000 to $30,000,000. Frost Bank hereby agrees to increase its Dollar
Commitment from $30,000,000 to $35,000,000. The foregoing Lenders in this
Section 4.1 are referred to herein collectively, as “Increasing Lenders.”

 

Section 3.2       Commitment Increase. On the Effective Date, adjustments of
Borrowings will be made in accordance with Section 2.08(e)(iv) of the Credit
Agreement that will result in, after giving effect to all such deemed
prepayments and borrowings, such Loans and participations in Letters of Credit,
Swingline Loans and Multicurrency Loans being held by the Lenders ratably in
accordance with their Commitments, after giving effect to the Commitment
Increase herein, as described on Schedule 1.01(b) attached hereto.

 

ARTICLE IV

BORROWER COMMITMENT INCREASE CERTIFICATIONS

 

Pursuant to Section 2.08(e)(i) of the Credit Agreement, the Borrower hereby
certifies as of the date hereof that:

 

Section 4.1       No Default. No Default or Event of Default has occurred and is
continuing.

 

Section 4.2       Representations and Warranties. The representations and
warranties contained in the Credit Agreement are be true and correct in all
material respects (or, in the case of any portion of the representations and
warranties already subject to a materiality qualifier, true and correct in all
respects) on and as of the date hereof as if made on and as of the date hereof
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date).

 

ARTICLE V

CONDITIONS TO EFFECTIVENESS

 

Section 5.1 Effective Date. This Agreement shall become effective on the date
(the “Effective Date”) when the Administrative Agent shall have received:

 

(a)counterparts of this Agreement duly executed and delivered on behalf of the
Borrower and each of the Increasing Lenders, together with the Subsidiary
Guarantors’ Consent and Agreement executed by each Subsidiary Guarantor;

 

(b)a replacement Revolving Credit Note in the maximum principal amount of
$35,000,000 executed by Borrower and made payable to Zions Bancorporation, N.A.
dba Amegy Bank;

 

(c)a replacement Revolving Credit Note in the maximum principal amount of
$35,000,000 executed by Borrower and made payable to Frost Bank;

 

(d)a replacement Revolving Credit Note in the maximum principal amount of
$30,000,000 executed by Borrower and made payable to Hancock Whitney Bank;

 

  (e) a certificate of a duly authorized officer of the Borrower stating that
each of the applicable conditions set forth in Section 2.8(e)(i) of the Credit
Agreement have been satisfied; and

 

  (f) payment by the Borrower of all fees payable pursuant to the Increase
Agreement Fee Letter dated as of the date hereof between the Borrower and Amegy
Bank.

 

2

 

 

ARTICLE VI

MISCELLANEOUS

 

Section 6.1 Representations. The Borrower hereby represents and warrants that
(i) this Agreement constitutes a legal, valid and binding obligation of it,
enforceable against it in accordance with its terms, (ii) upon the effectiveness
of this Agreement, no Event of Default shall exist and (iii) its representations
and warranties as set forth in the Loan Documents, as applicable, are true and
correct in all material respects (except those representations and warranties
qualified by materiality or by reference to a material adverse effect, which are
true and correct in all respects) on and as of the date hereof as though made on
and as of the date hereof (unless such representations and warranties
specifically refer to a specific date, in which case, they shall be complete and
correct in all material respects (or, with respect to such representations or
warranties qualified by materiality or by reference to a material adverse
effect, complete and correct in all respects) on and as of such specific date).

 

Section 6.2       Cross-References. References in this Agreement to any Article
or Section are, unless otherwise specified, to such Article or Section of this
Agreement.

 

Section 6.3       Loan Document Pursuant to Credit Agreement. This Agreement is
a Loan Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated therein) be construed, administered and applied in
accordance with all of the terms and provisions of the Credit Agreement, as
amended hereby, including Article IX thereof.

 

Section 6.4       Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.

 

Section 6.5      Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy electronically (e.g. pdf) shall be effective as delivery
of a manually executed counterpart of this Agreement.

 

Section 6.6       Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

 

Section 6.7      Full Force and Effect. All of the representations, warranties,
terms, covenants, conditions and other provisions of the Credit Agreement and
the other Loan Documents shall remain unchanged and shall continue to be, and
shall remain, in full force and effect in accordance with their respective
terms. Upon and after the execution of this Agreement by each of the parties
hereto, each reference in the Credit Agreement to “this Agreement”, “hereunder”,
“hereof” or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to “the Credit Agreement”, “thereunder”,
“thereof” or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as modified hereby.

 

[Signatures on Following Pages.]

 

3

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.

 

BORROWER:   STELLUS CAPITAL INVESTMENT CORPORATION             By: /s/ W. Todd
Huskinson     W. Todd Huskinson     Chief Financial Officer, Chief Compliance
Officer, Treasurer, and Secretary

 

Signature Page to Increase Agreement – Stellus

 

 

 

 

LENDERS:   ZIONS BANCORPORATION, N.A. DBA AMEGY BANK
as Administrative Agent, Swingline Lender,
Issuing Bank and as a Lender             By: /s/ Lauren Page     Lauren Page    
Vice President

 

Signature Page to Increase Agreement – Stellus

 

 

 

 

  FROST BANK, as a Lender       By: /s/ Jake Fitzpatrick   Name:    Jake
Fitzpatrick   Title: Vice President    

 

Signature Page to Increase Agreement – Stellus

 

 

 

 

 

  HANCOCK WHITNEY BANK, as a Lender       By: /s/ Eric Luttrell   Name:    Eric
Luttrell   Title: Senior Vice President

 

Signature Page to Increase Agreement – Stellus

 

 

 

 

SUBSIDIARY GUARANTORS’ CONSENT AND AGREEMENT TO INCREASE AGREEMENT

 

As an inducement to Administrative Agent and Lenders party thereto to execute,
and in consideration of Administrative Agent’s and such Lenders’ execution of,
the Increase Agreement dated as of December 27, 2019 (the “Agreement”)
(capitalized terms used herein and not otherwise defined shall have the meanings
given to such terms in Article I of the Agreement), among Stellus Capital
Investment Corporation, a Maryland corporation, the Lenders party thereto, and
Zions Bancorporation, N.A. dba Amegy Bank, as Administrative Agent, each of the
undersigned Subsidiary Guarantors hereby consents to the Agreement, and agrees
that the Agreement shall in no way release, diminish, impair, reduce or
otherwise adversely affect the obligations and liabilities of the undersigned
under any Guarantee and Security Agreement executed by the undersigned in
connection with the Credit Agreement, or under any Loan Documents, agreements,
documents or instruments executed by the undersigned to create liens, security
interests or charges to secure any of the Guaranteed Obligations (as defined in
the Guarantee and Security Agreement), all of which are in full force and
effect. Each of the undersigned further represents and warrants to
Administrative Agent and the Lenders that, after giving effect to the Agreement,
(a) the representations and warranties in each Loan Document to which the
undersigned is a party are true and correct in all material respects (or, in the
case of any portion of the representations and warranties already subject to a
materiality qualifier, true and correct in all respects) on and as of the date
of the Agreement as if made on and as of the date of the Agreement (or, if any
such representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date), and (b) no Default or Event of Default
has occurred and is continuing. Each undersigned Subsidiary Guarantor agrees to
be bound by the terms, conditions, covenants and agreements in the Agreement.
This Consent and Agreement is executed as of the date of the Agreement and shall
be binding upon each of the undersigned, and their respective successors and
assigns, and shall inure to the benefit of Administrative Agent, Lenders, and
their successors and assigns.

 

[Signatures on Following Pages.]

 

 

 

 

SUBSIDIARY GUARANTORS:            

SCIC – ERC BLOCKER 1, INC.,

a Delaware corporation  

 

SCIC – CC BLOCKER 1, INC.,

a Delaware corporationt    

      By: /s/ W. Todd Huskinson   By: /s/ W. Todd Huskinson Name: W. Todd
Huskinson   Name: W. Todd Huskinson Title: Authorized Signatory   Title:
Authorized Signatory      

SCIC – SKP BLOCKER 1, INC.,

a Delaware corporation  

 

SCIC – HOLLANDER BLOCKER 1, INC.,

a Delaware corporation    

      By: /s/ W. Todd Huskinson   By: /s/ W. Todd Huskinson Name: W. Todd
Huskinson   Name: W. Todd Huskinson Title: Authorized Signatory   Title:
Authorized Signatory      

SCIC – APE BLOCKER 1, INC.,

a Delaware corporation  

 

SCIC – ICD BLOCKER 1, INC.

a Delaware corporation    

      By: /s/ W. Todd Huskinson   By: /s/ W. Todd Huskinson Name: W. Todd
Huskinson   Name: W. Todd Huskinson Title: Authorized Signatory   Title:
Authorized Signatory      

SCIC – CONSOLIDATED BLOCKER, INC.

a Delaware corporation      

 

SCIC – FBO BLOCKER 1, INC.

a Delaware corporation  

      By: /s/ W. Todd Huskinson   By: /s/ W. Todd Huskinson Name: W. Todd
Huskinson   Name: W. Todd Huskinson Title: Authorized Signatory   Title:
Authorized Signatory       SCIC – INVINCIBLE BLOCKER 1, INC.     a Delaware
corporation           By: /s/ W. Todd Huskinson     Name: W. Todd Huskinson    
Title: Authorized Signatory    

 

 

 

 

SCHEDULE 1.01(b)

 

Commitments

 

Lender Total Commitment Applicable Percentage Zions Bancorporation, N.A. dba
Amegy Bank (Administrative Agent) $35,000,000 15.9090909091% Frost Bank
(Documentation Agent) $35,000,000 15.9090909091% Cadence Bank, N.A.
(Co-Syndication Agent) $30,000,000 13.6363636364% Hancock Whitney Bank
(Co-Syndication Agent) $30,000,000 13.6363636364% City National Bank $25,000,000
11.3636363636% CommunityBank of Texas, N.A. $20,000,000 9.0909090909% Woodforest
National Bank $20,000,000 9.0909090909% Stifel Bank and Trust $15,000,000
6.8181818182% Texas Capital Bank, National Association $10,000,000 4.5454545454%
  USD $220,000,000.00 100.0000000000%

 

 

Schedule 1.01(b) To Increase A Greement – Stellus