Exhibit 10.1


 


 


INCREMENTAL ASSUMPTION AGREEMENT


 


dated as of August 19, 2015,


 


relating to the


 


SENIOR SECURED REVOLVING CREDIT AGREEMENT


 


dated as of October 17, 2014,


 


among


 


CAPITALA
FINANCE CORP.,

as Borrower,


 


the Lenders from time to time party thereto,


 


and


 


ING CAPITAL LLC,

as Administrative Agent,

Arranger and Bookrunner 


 


 




     


     


    

 


INCREMENTAL ASSUMPTION
AGREEMENT, dated as of August 19, 2015 (this “Assumption Agreement”), by and among CAPITALA
FINANCE CORP. (the “Borrower”), ING CAPITAL LLC, in its capacity as Administrative Agent (the “Administrative
Agent”), and each lender set forth on Schedule 1 hereto as an “Assuming Lender” (the “Assuming Lenders”
and each an “Assuming Lender”), relating to the SENIOR SECURED REVOLVING CREDIT AGREEMENT, dated as of October 17,
2014 (as amended by Amendment No. 1 to Senior Secured Revolving Credit Agreement, dated as of May 22, 2015, and as further amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower,
the Administrative Agent and the several lenders from time to time party to the Credit Agreement.


 


A.           The
Borrower has requested that each Assuming Lender provide an additional Commitment in an aggregate amount equal to the amount set
forth opposite such Assuming Lender’s name on Schedule 1 hereto (each an “Incremental Commitment”), in
each case pursuant to Section 2.06(f) of the Credit Agreement.


 


B.           Each
Assuming Lender is willing to make such an Incremental Commitment to the Borrower on the terms and subject to the conditions set
forth herein and in the Credit Agreement.


 


Accordingly, in consideration
of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto agree as follows:


 


SECTION 1. Defined
Terms; Interpretation; Etc. Capitalized terms used and not defined herein shall have the meanings assigned to such terms
in the Credit Agreement. The rules of construction set forth in Section 1.03 of the Credit Agreement shall apply equally to
this Assumption Agreement. This Assumption Agreement shall be a “Loan Document” for all purposes of the Credit Agreement
and the other Loan Documents.


 


SECTION 2. Incremental
Commitment. (a) Pursuant to Section 2.06(f) of the Credit Agreement and subject to the terms and conditions hereof, each Assuming
Lender hereby agrees to make the applicable Incremental Commitment to the Borrower effective on and as of the Increase Effective
Date (as defined below). The Incremental Commitment shall constitute an additional “Commitment” and a “Commitment
Increase” for all purposes of the Credit Agreement and the other Loan Documents, and the Increase Effective Date shall be
the “Commitment Increase Date” of the Incremental Commitment for purposes of Section 2.06(f) of the Credit Agreement.


 


(b)          The
terms of the Incremental Commitment shall be the same as the other Commitments made under the Credit Agreement.


 


(c)          On
the Increase Effective Date, in connection with the adjustments to any outstanding Loans and participation interests contemplated
by Section 2.06(f)(iv) of the Credit Agreement, each Assuming Lender shall make a payment to the Administrative Agent, for account
of the other Lenders, in an amount calculated by the Administrative Agent in accordance with such section, so that after giving
effect to such payment and to the distribution thereof to the other Lenders in accordance with such section, the Loans are held
ratably by the Lenders in accordance with the respective Commitments of such Lenders (after giving effect to the Incremental Commitment
and any other Commitment Increases, if any, occurring on the date hereof).


 




     


     


    

 


(d)          As
of the Increase Effective Date, each Assuming Lender shall become a Lender under the Credit Agreement and shall have all rights
and obligations of a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto.


 


SECTION 3. Conditions
Precedent to Incremental Commitment. This Assumption Agreement, and the obligations of each Assuming Lender to make its Incremental
Commitment, shall become effective on and as of the Business Day (the “Increase Effective Date”) occurring on
or before August 19, 2015, on which the following conditions precedent have been satisfied:


 


(a)          the
Administrative Agent shall have received counterparts of this Assumption Agreement that, when taken together, bear the signatures
of the Borrower, the Administrative Agent and the Assuming Lenders;


 


(b)          on
the date hereof, each of the conditions set forth or referred to in Section 2.06(f)(i) of the Credit Agreement shall be satisfied,
and pursuant to Section 2.06(f)(ii)(x) of the Credit Agreement the Administrative Agent shall have received a certificate of a
duly authorized officer of the Borrower dated the date hereof certifying as to the foregoing;


 


(c)          the
Administrative Agent shall have received for the account of the Lenders the amounts, if any, payable under Section 2.13 of the
Credit Agreement as a result of the adjustments of Borrowings pursuant to Section 2(c) of this Assumption Agreement; and


 


(d)          each
Assuming Lender and the Administrative Agent shall have received all documented fees and expenses related to this Assumption Agreement
and any fee letter owing on the date hereof, including any upfront fees due to such Assuming Lender on the date hereof.


 


SECTION 4. Representations
and Warranties of the Borrower. To induce the other parties hereto to enter into this Assumption Agreement, the Borrower represents
and warrants to the Administrative Agent and each Assuming Lender that, as of the date hereof:


 


(a)          This
Assumption Agreement has been duly authorized, executed and delivered by the Borrower, and constitutes a legal, valid and binding
obligation of the Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).


 




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(b)          Each
of the representations and warranties made by the Borrower in or pursuant to the Loan Documents are true and correct in all material
respects as if made on such date (except to the extent they relate specifically to an earlier date, in which case they are true
and correct in all material respects as of such earlier date, and unless a representation or warranty is already qualified by materiality
or by Material Adverse Effect, in which case it is true and correct in all respects).


 


(c)          No
Default has occurred and is continuing on the date hereof or shall result from the Incremental Commitment.


 


SECTION 5. Representations,
Warranties and Covenants of the Assuming Lenders. Each Assuming Lender (a) represents and warrants that (i) from and after
the Increase Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of the Incremental Commitment, shall have the obligations of a Lender thereunder, and (ii) it has received a copy of the Credit
Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assumption Agreement and to make the Incremental Commitment on the basis of which it has made such
analysis and decision independently and without reliance on the Administrative Agent or any other Lender; and (b) agrees that (i)
it will, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, make its own credit decisions in taking or not taking action under the Loan Documents,
and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required
to be performed by it as a Lender.


 


SECTION 6. Consent
and Reaffirmation. (a)  each of the Obligors agrees that, notwithstanding the effectiveness of this Assumption Agreement,
the Guarantee and Security Agreement and each of the other Security Documents continue to be in full force and effect, (b) each
of the Obligors acknowledges that the terms “Revolving Credit Agreement Obligations,” “Guaranteed Obligations”
and “Secured Obligations” (each as defined in the Guarantee and Security Agreement) include any and all Loans made
now or in the future by the Assuming Lenders in respect of the Incremental Commitments and all interest and other amounts owing
in respect thereof under the Loan Documents (including all interest and expenses accrued or incurred subsequent to the commencement
of any bankruptcy or insolvency proceeding with respect to any Obligor, whether or not such interest or expenses are allowed as
a claim in such proceeding), and (c) each of the Obligors confirms its grant of a security interest in its assets as Collateral
for the Secured Obligations, all as provided in the Loan Documents as originally executed (and amended prior to the date hereof
and supplemented hereby).


 


SECTION 7. Notices.
All notices hereunder shall be given in accordance with the provisions of Section 9.01 of the Credit Agreement.


 


SECTION 8. Expenses.
The Borrower agrees to pay all reasonable out-of-pocket expenses incurred by the Administrative Agent in connection with this Assumption
Agreement in accordance with the Credit Agreement, including the reasonable and documented fees, charges and disbursements of one
outside counsel for the Administrative Agent.


 




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SECTION 9. Counterparts.
This Assumption Agreement 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 an original, but all such counterparts together shall constitute but
one and the same contract. Delivery of an executed counterpart of a signature page of this Assumption Agreement by facsimile or
electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.


 


SECTION 10. Applicable
Law; Jurisdiction; Consent to Service of Process; Other. THIS ASSUMPTION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK. THE PROVISIONS OF SECTION 9.09 OF THE CREDIT AGREEMENT (AND ALL OTHER APPLICABLE PROVISIONS OF ARTICLE IX OF THE CREDIT
AGREEMENT) ARE HEREBY INCORPORATED BY REFERENCE.


 


SECTION 11. Headings.
The headings of this Assumption Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning
hereof.


 


SECTION 12. No Third
Party Beneficiaries. This Assumption Agreement is intended to be solely for the benefit of the parties hereto and is not intended
to confer any benefits upon, or create any rights in favor of, any other person or entity. No person or entity other than the parties
hereto shall have any rights under or be entitled to rely upon this Assumption Agreement.


 


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IN WITNESS WHEREOF, the
parties hereto have caused this Assumption Agreement to be duly executed and delivered by their proper and duly authorized representatives
as of the day and year first above written.


 


	 	CAPITALA FINANCE CORP.,
	 	as Borrower
	 	 	 
	 	By:	/s/ Steven A. Arnall
	 	Name: Steven A. Arnall
	 	Title: Chief Financial Officer


 


[Signature Page to Incremental Assumption
Agreement]


 



     


     


    

 





	 	ING CAPITAL LLC,
	 	as Administrative Agent
	 	 	 
	 	By:	/s/ Patrick Frisch
	 	 	Name: Patrick Frisch
	 	 	Title: Managing Director
	 	 	 
	 	By:	/s/ Kunduck Moon
	 	 	Name: Kunduck Moon
	 	 	Title: Managing Director


 


[Signature Page to Incremental Assumption
Agreement]


 



     


     


    

 





	 	FIFTH THIRD BANK,
	 	as Assuming Lender
	 	 	 
	 	By:	 /s/ Fred H. Bumgardner, Jr.
	 	Name: Fred H. Bumgardner, Jr.
	 	Title: Vice President


 


[Signature Page to Incremental Assumption
Agreement]


 



     


     


    

 





	 	COMMUNITYONE BANK, N.A.,
	 	as Assuming Lender
	 	 	 
	 	By:	/s/ Scott Barrier
	 	Name: Scott Barrier
	 	Title: Scott Barrier


 


[Signature Page to Incremental Assumption
Agreement]


 



     


     


    

 





	 	FIRST BANK,
	 	as Assuming Lender
	 	 	 
	 	By:	/s/ Michael R. Wollinger
	 	Name: Michael R. Wollinger
	 	Title: Corporate Banker, Senior Vice President


 


[Signature Page to Incremental Assumption
Agreement]


 



     


     


    

 





SCHEDULE 1


 


Assuming Lenders


 


	Lender	 	Incremental Commitment	 
	Fifth Third Bank	 	$	18,000,000	 
	CommunityOne Bank, N.A.	 	$	12,000,000	 
	First Bank	 	$	10,000,000