Item 1.01. Entry into a Material Definitive Agreement.
Letter of Credit Facility Agreement
On
Each letter of credit issued by SMBC under the SMBC LC Facility will expire at or prior to the earlier to occur of the twelfth month after the date of each issuance and the final maturity date of the SMBC LC Facility, provided that the Company may elect to renew a letter of credit with a one-year term for additional one-year periods, subject to the terms and conditions set forth in the SMBC LC Facility.
Extensions of credit under the SMBC LC Facility are subject to compliance with a
borrowing base and an aggregate portfolio balance. Letters of credit that are
drawn and funded may remain outstanding until the maturity date and shall bear
interest at the following rates: for (i) any letter of credit disbursement for
which the Company elects the base rate option, (A) if the borrowing base is
equal to or greater than the product of 1.60 and the letter of credit exposure,
the "alternate base rate" (which is the greater of (x) zero and (y) the highest
of (a) the prime rate as published in the print edition of
The Company will be required to pay (i) letter of credit commitment fees at a rate per annum equal to 0.350% on the average daily unused amount of the then-current commitment of SMBC as the issuing bank and (ii) letter of credit fees at a rate per annum equal to (a) 1.10%, if the borrowing base is greater than or equal to the product of 1.60 and the letter of credit exposure, or (b) 1.225%, if the borrowing base is less than the product of 1.60 and the letter of credit exposure, on the average daily amount of the letter of credit exposure (excluding any portion thereof attributable to outstanding and unreimbursed letter of credit disbursements).
In connection with the SMBC LC Facility, the Company has made certain representations and warranties, and must comply with certain affirmative and negative covenants, including, but not limited to, (i) maintaining minimum shareholders' equity, measured as of each fiscal quarter end, (ii) maintaining a minimum asset coverage ratio of 150% at all times and (iii) maintaining the Company's status as a regulated investment company under the Internal Revenue Code of 1986, as amended, and as a business development company under the Investment Company Act of 1940, as amended. The SMBC LC Facility also permits SMBC to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of the borrowing base. In connection with the SMBC LC Facility, the Company also entered into new collateral documents.
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The SMBC LC Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default and cross-acceleration to other indebtedness and bankruptcy. Upon the occurrence of an event of default, SMBC, as issuing bank, may terminate its commitment under the SMBC LC Facility and declare the outstanding letter of credit disbursements and all other obligations of the Company under the SMBC LC Facility immediately due and payable. In the event that the letter of credit disbursements are declared due and payable, then, upon notice from SMBC demanding the deposit of cash collateral, the Company is required to immediately deposit into a letter of credit collateral account cash an amount equal to the then-current letter of credit exposure (excluding any portion thereof attributable to outstanding and unreimbursed letter of credit disbursements) as of such date plus any accrued and unpaid interest on such letter of credit exposure (excluding any portion thereof attributable to outstanding and unreimbursed letter of credit disbursements).
The above description is only a summary of the material provisions of the SMBC
LC Facility and is qualified in its entirety by reference to the SMBC LC
Facility, a copy of which will be filed with the Company's Annual Report on Form
10-K for the year ended
First Omnibus Amendment to Revolving Credit Agreement and Guarantee and Security Agreement
On
The above description is only a summary of the material provisions of the SMBC
RCF First Omnibus Amendment and is qualified in its entirety by reference to the
SMBC RCF First Omnibus Amendment, a copy of which will be filed with the
Company's Annual Report on Form 10-K for the year ended
Third Amendment to Loan and Security Agreement
On
The MUFG Third Amendment amends certain provisions of the MUFG Loan Agreement
to, among other things, (i) reduce the maximum revolver amount from
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The above description is only a summary of the material provisions of the MUFG
Third Amendment and is qualified in its entirety by reference to the MUFG Third
Amendment, a copy of which will be filed with the Company's Annual Report on
Form 10-K for the year ended
In connection with the MUFG Third Amendment, HFIV also entered into the First
Amendment to Sale and Servicing Agreement (the "MUFG First Amendment to Sale and
Servicing Agreement"), with the Company, as originator and servicer, HFIV, as
borrower, and
The above description is only a summary of the material provisions of the MUFG
First Amendment to Sale and Servicing Agreement and is qualified in its entirety
by reference to the MUFG First Amendment to Sale and Servicing Agreement, a copy
of which will be filed with the Company's Annual Report on Form 10-K for the
year ended
Item 2.03. Creation of a direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
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