Exhibit 10.1

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of
August 16, 2013, by and between HMS INCOME FUND, INC., a Maryland corporation
(successor-by-merger to HMS INCOME LLC, the “Borrower”) and CAPITAL ONE,
NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”).

 

RECITALS:

 

WHEREAS, the Borrower, the lenders named therein (the “Lenders”), and the
Administrative Agent entered into that certain Credit Agreement dated as of May
24, 2012 (as amended, modified, restated, or supplemented from time to time, the
“Credit Agreement”);

 

WHEREAS, following the execution and delivery of the Credit Agreement, the
Borrower consummated the Permitted Merger (as defined in the Credit Agreement);
and

 

WHEREAS, the Borrower, the Administrative Agent and the Lenders desire to amend
the Credit Agreement to, among other things, increase the Revolver Commitments
and include additional covenants to protect the Lenders’ security interests in
the Collateral (as defined in the Credit Agreement) following the Permitted
Merger.

 

NOW THEREFORE, in consideration of the premises herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1. Definitions. Except as otherwise provided below, unless the context hereof
indicates otherwise, all capitalized terms used herein shall have the same
meaning as such capitalized terms are defined in the Credit Agreement.

 

2. Amendment to the Credit Agreement. Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the Credit Agreement is
hereby amended as follows:

 

(a) The following definitions in Section 1.01 of the Credit Agreement are hereby
deleted in their entirety and the following are substituted in place thereof:

 

““Revolver Commitment” means, with respect to each Lender, (i) the amount set
forth opposite the name of such Lender on Schedule B, as the same may be amended
or modified from time to time pursuant to the terms hereof, or (ii) as to any
Lender which enters into an Assignment and Assumption (whether as transferor
Lender or as assignee thereunder), the amount of such Lender’s Revolver
Commitment after giving effect to such Assignment and Assumption, in each case
as such amount may be reduced from time to time pursuant to Section 2.08 or
terminated pursuant to Section 2.09.”

 

(b) The following shall be inserted as new definitions in Section 1.01 of the
Credit Agreement in alphabetical order:

 

““Adviser Event” means the occurrence of any one or more of the following
events: (a) any failure by the Adviser to make any payment, transfer or deposit
required to be made by the Borrower into an account established and maintained
by the Collateral Custodian in the name of the Borrower (and any sub-accounts
related thereto) which is subject to a Custodial Agreement, which failure
continues unremedied for a period of two Business Days; or (b) the occurrence of
any of the events listed in Sections 9(b)(i)-9(b)(v) of the Advisory Agreement.

 

First Amendment to Credit Agreement – Page 1

 

 

 

 

“Adviser Termination Notice” has the meaning set forth in Section 5.43.

 

“Control Agreement” means the Control Agreement dated as of May 24, 2012 by and
among the Administrative Agent, the Borrower and Amegy Bank, National
Association, as the same may from time to time be amended, restated,
supplemented or otherwise modified.”

 

(c) Section 5.01(d) of the Credit Agreement shall be deleted in its entirety and
the following shall be substituted in place thereof:

 

“(d) as soon as available and in any event within 30 days after the end of each
calendar month, a monthly summary from the Collateral Custodian with respect to
the Collateral subject to the Custodial Agreements with the Collateral
Custodian, such summary to be in form and substance acceptable to the
Administrative Agent;”

 

(d) Section 5.02 of the Credit Agreement shall be deleted in its entirety and
the following shall be substituted in place thereof:

 

“SECTION 5.02 Inspection of Property, Books and Records.

 

(a) The Borrower will (i) keep, and will cause each of its Subsidiaries to keep,
its books and records in conformity with GAAP for all dealings and transactions
in relation to its business and activities; (ii) permit, will cause each
Subsidiary of the Borrower and each Loan Party to permit, and will direct the
Adviser to permit, at reasonable times with at least five (5) Domestic Business
Days’ prior notice (or such lesser time period agreed upon by the Administrative
Agent and the Borrower), which notice shall not be required in the case of an
emergency, the Administrative Agent or its designee, at the expense of the
Borrower and Loan Parties, to perform periodic field audits and investigations
of the Borrower, the Loan Parties and the Collateral, from time to time; and
(iii) permit, and will cause each Subsidiary to permit, with at least five (5)
Domestic Business Days’ prior notice (or such lesser time period agreed upon by
the Administrative Agent and the Borrower), the Administrative Agent or its
designee, at the expense of the Borrower and the Loan Parties, to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants; provided that the Borrower shall only be
required to reimburse the Administrative Agent for only one such inspection each
Fiscal Quarter unless a Default shall have occurred and be continuing. The Loan
Parties agree, and the Borrower shall direct the Adviser, to cooperate and
assist in such visits and inspections, in each case at such reasonable times and
as often as may reasonably be desired.

 

(b) In connection herewith, the Borrower shall cause the Adviser to not change
its name, move the location of its principal place of business and chief
executive office, change the offices where it keeps records concerning the
Collateral, or change the jurisdiction of its formation, unless the Borrower or
the Adviser shall have provided the Administrative Agent with 30 days’ written
notice of such move and other documents and instruments as the Administrative
Agent may reasonably request in connection therewith and shall have taken all
actions required under the UCC of each relevant jurisdiction in order to
continue the first priority perfected security interest of the Administrative
Agent, for the benefit of the Secured Parties, in the Collateral.”

 

 

First Amendment to Credit Agreement – Page 2

 

 

 

(e) Section 5.41 of the Credit Agreement shall be deleted in its entirety and
the following shall be substituted in place thereof:

 

“SECTION 5.41 Custody Agreements. The Borrower shall not permit any Loan Party,
and the Borrower shall not permit the Adviser, on behalf of the Borrower, to
enter into any custody agreement or equivalent arrangement with any person to
hold securities, cash or other assets of any Loan Party unless the Person acting
as custodian shall have delivered a Custodial Agreement and, if requested by the
Administrative Agent, a control agreement, to the Administrative Agent (in each
case in form and substance satisfactory to the Administrative Agent).”

 

(f) The following new sections shall be added immediately following Section 5.41
of the Credit Agreement:

 

“SECTION 5.42. Adviser Information Reports. The Borrower shall deliver to the
Administrative Agent any and all periodic and special reports required by
Sections 4(b)(i) and 4(b)(ii) of the Advisory Agreement, immediately upon
receipt of such reports from Adviser, to the extent such reports are not
publicly filed.

 

SECTION 5.43. Notice of Adviser Events and Certain Breaches.

 

(a) The Borrower will, upon receipt of notice or discovery thereof, promptly
send to the Administrative Agent written notice of (i) any material breach of
any representation, warranty, agreement or covenant under the Advisory Agreement
or any occurrence of an event for which the Adviser may terminate the Advisory
Agreement for cause, (ii) any material breach of any representation, warranty,
agreement or covenant under the Sub-Advisory Agreement or any occurrence of an
event for which the Sub-Adviser may terminate the Sub-Advisory Agreement for
cause, (iii) any event or occurrence that, upon notice, or upon the passage of
time or both, would constitute such a material breach or event described in
clauses (i) and (ii), in each case, promptly upon learning thereof, and (iv) the
occurrence of each Adviser Event. In addition, no later than five Business Days
following the Borrower’s discovery or notice of the occurrence of any of the
events described in clauses (i)-(iii), the Borrower will provide to the
Administrative Agent a written statement of the chief financial officer,
controller, or chief executive officer of the Borrower setting forth the details
of such event and the action that the Borrower proposes to take with respect
thereto.

 

(b) Upon Borrower’s discovery or receipt of notice that the Advisory Agreement
may be terminated, the Borrower shall give immediate notice of such potential
termination to the Administrative Agent (“Adviser Termination Notice”). If the
Borrower elects to terminate the Advisory Agreement, the Borrower shall, subject
to the approval of the Borrower’s board of directors and stockholders and the
consent of the Administrative Agent, such consent not to be unreasonably
withheld, conditioned or delayed, (i) identify a successor Adviser, and (ii)
engage such successor Adviser in accordance with applicable Law and the
Borrower’s Organizational Documents to perform obligations similar to those
performed by the Adviser under the Advisory Agreement.

 

SECTION 5.44 Custodial Agreements. Borrower (a) shall promptly provide to
Adviser true and correct copies of each Custodial Agreement, including any
amendments, modifications, supplements or replacements thereof, and (b) shall
cause Adviser to comply with all terms and conditions of the Control Agreement
and any other Custodial Agreement.

 

SECTION 5.45 Amendments, Waivers, and Termination of the Advisory Agreement and
Sub-Advisory Agreement. Borrower shall not make any material amendment, waiver
or other modification of any provision of the Advisory Agreement without the
written agreement of the Administrative Agent.”

 

First Amendment to Credit Agreement – Page 3

 

 

 

(g) Section 6.01(b) of the Credit Agreement shall be deleted in its entirety and
the following shall be substituted in place thereof:

 

“(b) any Loan Party shall fail to observe or perform any covenant contained in
Section 5.01(e) and (i), 5.02 (ii) and (iii), 5.03, 5.04, 5.05, 5.06, 5.07,
5.08, 5.09, 5.10, 5.12, 5.13, 5.14, 5.16, 5.17, 5.18, 5.29, 5.31, 5.33, 5.34,
5.41 and 5.44; or ”

 

(h) The attached Schedule B shall be added as a new schedule to the Credit
Agreement immediately following Schedule A thereof.

 

3. Conditions Precedent to Effectiveness of Amendment. This Amendment shall
become effective when, and only when, the Administrative Agent shall have
received:

 

(a) counterparts of this Amendment duly executed by the Borrower, the
Administrative Agent and the Lenders;

 

(b) the Revolver Note in the aggregate principal amount of Twenty-Five Million
and no/100 Dollars ($25,000,000.00) executed by the Borrower in favor of the
Administrative Agent (reflecting the $10,000,000.00 increase to its Revolver
Commitment);

 

(c) an officer’s certificate from the Borrower with appropriate certifications
and attachments, including (i) resolutions of the board of directors (or other
governing body) of the Borrower certified by the Secretary (or other custodian
of records) of the Borrower which authorize the execution, delivery, and
performance by the Borrower of this Amendment and the other Loan Documents to
which it is a party, (ii) certificates of incumbency certified by an authorized
officer or representative certifying the names of the individuals or other
Persons authorized to sign this Amendment and the other Loan Documents to which
the Borrower is or is to be a party, together with specimen signatures of such
Persons, (iii) updated Operating Documents of the Borrower, (iv) updated
certified copies of the Borrower’s Organizational Documents, and (v) a
certificate of the Secretary of State of the Borrower’s state of organization as
to the good standing and legal existence of the Borrower;

 

(d) all fees and other amounts due and payable, including, to the extent
invoiced, reimbursement or payment of all legal fees and expenses of the
Administrative Agent’s counsel, and all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder; and

 

(e) such other documents or items as the Administrative Agent, the Lenders or
their counsel may reasonably request in connection with this Amendment.

 

4. Representations and Warranties of the Borrower. The Borrower represents and
warrants as follows:

 

(a) It is duly authorized and empowered to execute, deliver and perform this
Amendment and all other instruments referred to or mentioned herein to which it
is a party, and all action on its part requisite for the due execution, delivery
and the performance of this Amendment has been duly and effectively taken.

 

(b) After giving effect to this Amendment, the representations and warranties
contained in the Credit Agreement, as amended hereby, and any other Loan
Documents executed in connection herewith or therewith are true in all material
respects on and as of the date hereof as though made on and as of the date
hereof, except to the extent that such representation or warranty was made as of
a specific date, in which case such representation or warranty was true in all
material respects when made.

 

First Amendment to Credit Agreement – Page 4

 

 

 

(c) After giving effect to this Amendment, no event has occurred and is
continuing which constitutes a Default.

 

(d) When duly executed and delivered, each of this Amendment and the Credit
Agreement will be legal and binding obligations of it, enforceable in accordance
with their respective terms, except as limited by bankruptcy, insolvency or
similar laws of general application relating to the enforcement of creditors’
rights and by equitable principles of general application.

 

5. Reference to and Effect on the Loan Documents.

 

(a) Upon the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Amendment”, “hereunder”, “hereof”, “herein” or words of like
import, and each reference in the Loan Documents shall mean and be a reference
to the Credit Agreement as amended hereby.

 

(b) Except as specifically amended above, the Credit Agreement, the Notes, and
all other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.

 

(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of the Administrative Agent, nor constitute a waiver of any provision of
any of the Loan Documents.

 

6. Costs and Expenses. The Borrower agrees to pay on demand all out of pocket
costs and expenses of the Administrative Agent in connection with the
preparation, reproduction, execution and delivery of this Amendment and the
other instruments and documents to be delivered hereunder, including reasonable
legal fees and expenses for counsel for the Administrative Agent.

 

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.

 

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

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK –

SIGNATURE PAGE FOLLOWS]

 

First Amendment to Credit Agreement – Page 5

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed in multiple counterparts, each of which is an original instrument for
all purposes, all as of the day and year first above written.

 

 

 

 

  BORROWER:       HMS INCOME FUND, INC., a Maryland corporation
(successor-by-merger to HMS Income LLC)       By:  /s/ Ryan T. Sims   Name: Ryan
T. Sims   Title: Chief Financial Officer and Secretary

 

First Amendment to Credit Agreement – Signature Page

 

 

 

 

 

  ADMINISTRATIVE AGENT AND LENDER:      

CAPITAL ONE, NATIONAL ASSOCIATION,

as Administrative Agent and as a Lender

      By: /s/ Bobby Hamilton     Bobby Hamilton, Vice President            

 

 

 

First Amendment to Credit Agreement – Signature Page

 

 

 

SCHEDULE B

 

REVOLVER COMMITMENT

 

 

Lender

Revolver Commitment

 

Capital One, National Association $25,000,000.00

 

 

 

 

First Amendment to Credit Agreement – Schedule B