Document:

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 – StellusExhibit

EXHIBIT 4.2

DESCRIPTION OF SECURITIES REGISTERED UNDER 
SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

The following description of our common stock, par value $0.00001 per share (the “common stock”), of Conformis, Inc. (“us,” “our,” “we” or the “Company”), which is the only security of the Company registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), summarizes certain information regarding the common stock in our restated certificate of incorporation, as amended, our amended and restated bylaws and applicable provisions of Delaware corporate law, and is qualified by reference to our restated certificate of incorporation, articles of amendment to restated certificate of incorporation and amended and restated bylaws, which are incorporated by reference as Exhibit 3.1 and, Exhibit 3.2 and Exhibit 3.3, respectively, to the Annual Report on Form 10-K.

Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.00001 per share, and 5,000,000 shares of preferred stock, par value $0.00001 per share. 
Common Stock
Annual Meeting. Annual meetings of our stockholders are held on the date designated in accordance with our bylaws. Written notice must be mailed to each stockholder entitled to vote not less than ten nor more than 60 days before the date of the meeting. The presence in person or by proxy of the holders of record of a majority of our issued and outstanding shares entitled to vote at such meeting constitutes a quorum for the transaction of business at meetings of the stockholders. Special meetings of the stockholders may be called for any purpose by the board of directors, the chairman of the board, or the chief executive officer. Except as may be otherwise provided by applicable law, our certificate of incorporation or our bylaws, all elections shall be decided by a plurality, and all other questions shall be decided by a majority, of the votes cast by stockholders entitled to vote thereon at a duly held meeting of stockholders at which a quorum is present.

Voting Rights. Each holder of common stock is entitled to one vote for each share held on all matters to be voted upon by stockholders.

Dividends. The holders of common stock, after any preferences of holders of any preferred stock, are entitled to receive dividends when and if declared by the board of directors out of legally available funds.

Liquidation and Dissolution. If we are liquidated or dissolved, the holders of the common stock will be entitled to share in our assets available for distribution to stockholders in proportion to the amount of common stock they own. The amount available for common stockholders is calculated after payment of liabilities. Holders of any preferred stock will receive a preferential share of our assets before the holders of the common stock receive any assets.

Other Rights. Holders of the common stock have no right to convert the stock into any other security, have the stock redeemed or purchase additional stock or to maintain their proportionate ownership interest. The common stock does not have cumulative voting rights. Holders of shares of the common stock are not required to make additional capital contributions.

Anti-takeover Effects of our Certificate of Incorporation and Bylaws and Delaware Law 
Our certificate of incorporation and bylaws include a number of provisions that may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include the items described below.

Board Composition and Filling Vacancies. In accordance with our certificate of incorporation, our board is divided into three classes serving three-year terms, with one class being elected each year. Our certificate of incorporation also provides that directors may be removed only for cause and then only by the affirmative vote of the holders of 75% or more of the shares then entitled to vote at an election of directors. Furthermore, any vacancy on our board of directors, however occurring, including a vacancy resulting from an increase in the size of our board, may only be filled by the affirmative vote of a majority of our directors then in office, even if less than a quorum.

No Written Consent of Stockholders. Our bylaws provide that all stockholder actions are required to be taken by a vote of the stockholders at an annual or special meeting, and that stockholders may not take any action by written consent in lieu of a meeting.

Meetings of Stockholders. Our bylaws provide that only a majority of the members of our board of directors then in office, the chairman of the board, or the chief executive officer may call special meetings of stockholders and only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders. Our bylaws limit the business that may be conducted at an annual meeting of stockholders to those matters properly brought before the meeting.

Advance Notice Requirements. Our bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain certain information specified in the bylaws. These provisions may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed. These provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company.

Amendment to Certificate of Incorporation and Bylaws. As required by the Delaware General Corporation Law, any amendment of our certificate of incorporation must first be approved by a majority of our board of directors and, if required by law or our certificate of incorporation, thereafter be approved by a majority of the outstanding shares entitled to vote on the amendment, and a majority of the outstanding shares of each class entitled to vote thereon as a class, except that the amendment of the provisions relating to stockholder action, directors, limitation of liability, exclusive jurisdiction of Delaware Courts and the amendment of our bylaws and certificate of incorporation must be approved by not less than 75% of the outstanding shares entitled to vote on the amendment, and not less than 75% of the outstanding shares of each class entitled to vote thereon as a class. Our bylaws may be amended by the affirmative vote of a majority of the directors then in office, subject to any limitations set forth in the bylaws; and may also be amended by the affirmative vote of at least 75% of the outstanding shares entitled to vote on the amendment, or, if the board of directors recommends that the stockholders approve the amendment, by the affirmative vote of the majority of the outstanding shares entitled to vote on the amendment, in each case voting together as a single class.

Preferred Stock. Our certificate of incorporation provides for 5,000,000 authorized shares of preferred stock. The existence of authorized but unissued shares of preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not in the best interests of us or our stockholders, our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder or stockholder group. In this regard, our certificate of incorporation grants our board of directors broad power to establish the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring or preventing a change in control of us.

Section 203 of the Delaware General Corporation Law. We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. A "business combination" includes, among other things, a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. An "interested stockholder" is a person who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation's voting stock. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

	
		
	 
	 

	 
	before the stockholder became interested, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

	 
	 

	 
	upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances; or

	 
	 

	 
	at or after the time the stockholder became interested, the business combination was approved by the board of directors of the corporation and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

A Delaware corporation may "opt out" of these provisions with an express provision in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from a stockholders' amendment approved by at least a majority of the outstanding voting shares. We have not opted out of these provisions. As a result, mergers or other takeover or change in control attempts of us may be discouraged or prevented.

Exclusive Jurisdiction of Certain Actions. Our certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware, unless we otherwise consent. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.

ActiveUS 178557798v.3

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