Exhibit 10.1


 





AMENDMENT NO. 4 TO SENIOR


SECURED REVOLVING CREDIT AGREEMENT


 


This AMENDMENT NO. 4 TO SENIOR SECURED REVOLVING
CREDIT AGREEMENT (this “Amendment”) dated as of February 22, 2019 (the “Effective Date”),
is made with respect to the Senior Secured Revolving Credit Agreement, dated as of October 17, 2014 (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among CAPITALA FINANCE CORP., a Maryland corporation
(the “Borrower”), the several banks and other financial institutions or entities from time to time party to
the Credit Agreement as lenders (the “Lenders”) and ING CAPITAL LLC, as administrative agent for the Lenders
under the Credit Agreement (in such capacity, together with its successors in such capacity, the “Administrative Agent”).
Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement (as amended hereby).


 


WITNESSETH:


 


WHEREAS, pursuant to the Credit Agreement,
the Lenders have made certain loans and other extensions of credit to the Borrower; and


 


WHEREAS, the Borrower has requested that
the Lenders and the Administrative Agent amend certain provisions of the Credit Agreement, and the Lenders signatory hereto and
the Administrative Agent have agreed to do so on the terms and subject to the conditions contained in this Amendment.


 


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


 


SECTION I AMENDMENT TO CREDIT AGREEMENT


 


Effective as of the Effective Date, and
subject to the terms and conditions set forth below, the Credit Agreement is hereby amended as follows:


 


(a) Section 6.07(a) of the Credit Agreement
is hereby amended by deleting “$195,000,000” in clause (ii)(x) thereof and replacing it with “$150,000,000.”


 


(b) Section 6.07(b) of the Credit Agreement
is hereby deleted in its entirety and replaced with the following:


 


“(b)Asset Coverage
Ratio. The Borrower will not permit the Asset Coverage Ratio to be less than 2.00 to 1 at any time.”


 






     


     


    

 


SECTION II FEES


 


2.1       Fees. The
Borrower agrees to pay to the Administrative Agent for account of each Lender executing this Amendment an amendment fee equal to
0.075% of such Lender’s Revolving Credit Exposure and unused Commitments as of the Effective Date.  Such fee shall be
fully earned, due and payable on the Effective Date.  The Borrower agrees that, once paid, the fees or any part thereof payable
hereunder shall not be refundable under any circumstances, regardless of whether the transactions contemplated by this Amendment
are consummated, shall not be creditable against any other fee or amount payable to the Administrative Agent or any Lender, and
shall not be subject to counterclaim or setoff for, or be otherwise affected by, any claim or dispute the Borrower may have.


 


SECTION III MISCELLANEOUS


 


3.1.       Conditions
to Effectiveness of Amendment. Each of the following shall be a condition precedent (unless a condition shall have been waived
in accordance with Section 9.02 of the Credit Agreement) to the effectiveness of this Amendment:


 


(a) Documents. The Administrative
Agent shall have received each of the following documents, each of which shall be reasonably satisfactory to the Administrative
Agent (and to the extent specified below to each Lender) in form and substance:


 


(1) Executed Counterparts. From each of the Lenders,
the Administrative Agent and the Borrower, either (1) a counterpart of this Amendment signed on behalf of such party or (2) written
evidence satisfactory to the Administrative Agent (which may include telecopy transmission or electronic mail of a signed signature
page to this Amendment) that such party has signed a counterpart of this Amendment.


 


(2) Officer’s Certificate. A certificate,
dated the Effective Date and signed by a Financial Officer of the Borrower, confirming compliance with the conditions set forth
in Sections 3.1(b) through (e) of this Amendment.


 


(b) Default. After giving effect
to the amendments in Section 1 of this Amendment, no Default or Event of Default shall have occurred and be continuing under the
Credit Agreement or this Amendment, nor any default or event of default that permits acceleration of any Material Indebtedness,
immediately before or after giving effect to this Amendment, any incurrence of Indebtedness hereunder or thereunder and the use
of proceeds hereof or thereof on a pro forma basis.


 


(c) Financial Covenants. The Borrower
is in pro forma compliance with each of the covenants set forth in Sections 6.07 of the Credit Agreement (as amended hereby) at
the time of the Effective Date.


 


(d) Consents. The Borrower shall
have obtained and delivered to the Administrative Agent certified copies of all consents, approvals, authorizations, registrations
or filings (other than any filing required under the Exchange Act or the rules or regulations promulgated thereunder, including,
without limitation, any filing required on Form 8-K) required to be made or obtained by the Borrower and all guarantors in connection
with this Amendment, and any other evidence reasonably requested by and reasonably satisfactory to the Administrative Agent as
to compliance with all material legal and regulatory requirements applicable to the Borrower, and such consents, approvals, authorizations,
registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired and no
investigation or inquiry by any Governmental Authority regarding this Amendment or any transaction being financed with the proceeds
of the Loans shall be ongoing.


 






     


     


    

 


(e) No Litigation. There shall not
exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments pending or, to the knowledge
of the Borrower, threatened in any court or before any arbitrator or Governmental Authority that relates to this Amendment or that
could reasonably be expected to have a Material Adverse Effect.


 


(f) Fees and Expenses. The Borrower
shall have paid in full, to the extent not paid pursuant to Section 2.09 of the Credit Agreement, to the Administrative Agent and
the Lenders all fees and expenses (including reasonable legal fees to the extent invoiced) related to this Amendment or the Credit
Agreement owing on or prior to the Effective Date (including without limitation the fees and expenses contemplated by Sections
2 and 3.5 of this Amendment).


 


(g) Other Documents. The Administrative
Agent shall have received such other documents, instruments, certificates, opinions and information as the Administrative Agent
may reasonably request in form and substance satisfactory to the Administrative Agent.


 


3.2.       Post-Closing
Covenant. The Borrower shall, no later than April 1, 2019 (or such later date as agreed to by the Administrative Agent in its
reasonable discretion), cause CapitalSouth Partners Fund II Limited Partnership to (x) repay and terminate in full all of its outstanding
SBA Indebtedness and any Permitted SBIC Guarantee provided in respect thereof and (y) become a Subsidiary Guarantor (and, thereby,
an “Obligor”) under the Guarantee and Security Agreement pursuant to a Guarantee Assumption Agreement in accordance
with Section 5.08(a) of the Credit Agreement and to deliver such proof of corporate or other action, incumbency of officers, opinions
of counsel and other documents as the Administrative Agent shall have reasonably requested.


 


3.3.       Representations
and Warranties. To induce the other parties hereto to enter into this Amendment, the Borrower represents and warrants to the
Administrative Agent and each of the Lenders that, as of the Effective Date and after giving effect to this Amendment:


 


(a) This Amendment has been duly authorized,
executed and delivered by the Borrower, and constitutes a legal, valid and binding obligation of the Borrower enforceable in accordance
with its terms. The Credit Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms.


 


(b) After giving effect to the amendments
in Section 1 of this Amendment, the representations and warranties set forth in Article 3 of the Credit Agreement as amended by
this Amendment and the representations and warranties in each other Loan Document (in each case, as amended hereby) are true and
correct in all material respects (other than any representation or warranty already qualified by materiality or Material Adverse
Effect, which shall be true and correct in all respects) on and as of the Effective Date or as to any such representations and
warranties that refer to a specific date, as of such specific date, with the same effect as though made on and as of the Effective
Date.


 






     


     


    

 


(c) After giving effect to the amendments
in Section 1 of this Amendment, no Default or Event of Default has occurred or is continuing under the Credit Agreement.


 


3.4.       Counterparts.
This Amendment 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. This Amendment constitutes the
entire contract between and among the parties relating to the subject matter hereof and supersedes any and all previous agreements
and understandings, oral or written, relating to the subject matter hereof. This Amendment shall become effective as provided in
Section 3.1, and thereafter shall be binding upon and inure to the benefit of the parties thereto and the respective successors
and assigns as permitted under the Credit Agreement. Delivery of an executed counterpart of this Amendment by telecopy or electronic
mail shall be effective as delivery of a manually executed counterpart of this Amendment.


 


3.5.       Payment of
Expenses. The Borrower agrees to pay and reimburse the Administrative Agent for all of its reasonable and documented out-of-pocket
costs and expenses incurred in connection with this Amendment, including, without limitation, the reasonable fees, charges and
disbursements of legal counsel to the Administrative Agent (but excluding, for the avoidance of doubt, the allocated costs of internal
counsel).


 


3.6.       GOVERNING LAW.
THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.


 


3.7.       WAIVER OF JURY
TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUALWAIVERS AND CERTIFICATIONS IN THIS SECTION.


 


3.8.       Incorporation
of Certain Provisions. The provisions of Sections 9.01, 9.07, 9.09 and 9.12 of the Credit Agreement are hereby incorporated
by reference mutatis mutandis as if fully set forth herein.


 






     


     


    

 


3.9.       Effect of Amendment.
Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of,
or otherwise affect the rights and remedies of the Lenders, the Administrative Agent, the Collateral Agent or the Borrower


under the Credit Agreement or any other Loan Document, and,
except as expressly set forth herein, shall not alter, modify, amend or in any way affect any of the other terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in
all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any Person to a consent to,
or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained
in the Credit Agreement or any other Loan Document in similar or different circumstances. This Amendment shall apply and be effective
only with respect to the provisions amended herein of the Credit Agreement. Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or
words of similar import shall mean and be a reference to the Credit Agreement as amended by this Amendment and each reference in
any other Loan Document shall mean the Credit Agreement as amended hereby. This Amendment shall constitute a Loan Document.


 


3.10.       Consent and
Affirmation. Without limiting the generality of the foregoing, by its execution hereof, the Borrower hereby, as of the Effective
Date, (i) consents to this Amendment and the transactions contemplated hereby, (ii) agrees that the Guarantee and Security Agreement
and each of the other Security Documents is in full force and effect, (iii) affirms its obligations under the Guarantee and Security
Agreement and confirms its grant of a security interest in its assets as Collateral for the Secured Obligations (as defined in
the Guarantee and Security Agreement), and (iv) acknowledges and affirms that such grant is in full force and effect in respect
of, and to secure, the Secured Obligations (as defined in the Guarantee and Security Agreement).


 


3.11.       Release.
The Borrower hereby acknowledges and agrees that: (a) neither it nor any of its Affiliates has any claim or cause of action against
the Administrative Agent, the Collateral Agent or any Lender (or any of their respective Affiliates, officers, directors, employees,
attorneys, consultants or agents) under the Credit Agreement and the other Loan Documents (and each other document entered into
in connection therewith) and the transactions contemplated thereby, and (b) the Administrative Agent, the Collateral Agent and
each Lender has heretofore properly performed and satisfied in a timely manner all of its obligations to the Obligors and their
Affiliates under the Credit Agreement and the other Loan Documents (and each other document entered into in connection therewith)
that are required to have been performed on or prior to the date hereof. Accordingly, for and in consideration of the agreements
contained in this Amendment and other good and valuable consideration, the Borrower (for itself and its Affiliates and the successors,
assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully,
finally, unconditionally and irrevocably release and forever discharge the Administrative Agent, the Collateral Agent, each Lender
and each of their respective Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively, the “Released
Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities,
actions, proceedings and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and
of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor
has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing
whatsoever done or omitted to be done on or prior to the date hereof directly arising out of, connected with or related to this
Amendment, the Credit Agreement or any other Loan Document (or any other document entered into in connection therewith), or any
act, event or transaction related or attendant thereto, or the agreements of the Administrative Agent, the Collateral Agent or
any Lender contained therein, or the possession, use, operation or control of any of the assets of the Borrower, or the making
of any Loans or other advances, or the management of such Loans or advances or the Collateral.


 


[Signature pages follow]


 




     


     


    

 


IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.


 


 


	 	CAPITALA FINANCE CORP.
	 	 	 
	 	 	 
	 	By:	/s/ Stephen A. Arnall
	 	 	Stephen A. Arnall  
	 	 	Chief Financial Officer


  




     


     


    

 


	 	ING CAPITAL LLC,
	 	as Administrative Agent and a Lender
	 	 	 
	 	 	 
	 	By:	/s/ Patrick Frisch
	 	 	Patrick Frisch  
	 	 	Managing Director
	 	 	 
	 	By:	/s/ Grace Fu
	 	 	Grace Fu  
	 	 	Director


 


 




     


     


    

 


	 	capital bank, a division of FIRST TENNESSEE BANK NATIONAL ASSOCIATION
	 	as a Lender
	 	 	 
	 	 	 
	 	By	/s/ Michael Privette
	 	 	Michael Privette
	 	 	Vice President


 




     


     


    


 


	 	first bank,
	 	as a Lender
	 	 	 
	 	 	 
	 	By	/s/ Michael R. Wollinger
	 	 	Michael R. Wollinger
	 	 	Senior Vice President


 




     


     


    


 


	 	FIRST NATIONAL BANK OF PENNSYLVANIA,
	 	as a Lender
	 	 	 
	 	 	 
	 	By	/s/ Charles W. Jones
	 	 	Charles W. Jones
	 	 	Senior Vice President


  




     


     


    


 


	 	PINNACLE BANK,
	 	as a Lender
	 	 	 
	 	 	 
	 	By	/s/ Mark D. Crum
	 	 	Mark D. Crum
	 	 	Senior Vice President


  




     


     


    


 


	 	South state bank,
	 	as a Lender
	 	 	 
	 	 	 
	 	By	/s/ Stephen C. Lyon
	 	 	Stephen C. Lyon
	 	 	Senior Vice President