Item 1.01 Entry into a Material Definitive Agreement
On June 26, 2020, Horizon Technology Finance Corporation (the "Company"), a
leading specialty finance company that provides capital in the form of secured
loans to venture capital backed companies in the technology, life science,
healthcare information and services, and sustainability industries, issued a
press release today announcing an amendment and extension its $100 million
senior secured credit facility with a large U.S. based insurance company. A copy
of the press release is furnished herewith as Exhibit 99.1.
The amendments became effective upon DBRS, Inc.'s assigning a rating to those
certain notes (the "Notes") previously issued pursuant to that certain indenture
by and between Horizon Funding I, LLC, a Delaware limited liability company and
indirect wholly owned subsidiary of the Company (the "Issuer"), and U.S. Bank
National Association, dated as of June 1, 2018 (the "Indenture"). Pursuant to
that certain Sale and Servicing Agreement by and among the Issuer, the Company
as servicer, Horizon Secured Loan Fund I LLC, as originator and as seller
("HSLFI"), and U.S. Bank National Association, dated June 1, 2018 (the "Sale and
Servicing Agreement"), as amended by that certain Amendment No. 1 to the Sale
and Servicing Agreement, dated June 19, 2019 (the "Amendment No. 1"), the Issuer
can obtain Advances (as defined therein) according to the required terms.
On June 5, 2020, the Issuer executed a supplemental indenture (the "Supplemental
Indenture") to extend the Legal Final Payment Date to June 2027. Concurrently,
the Issuer entered into the Amended and Restated Note Funding Agreement with the
Initial Purchasers, as defined therein, (the "Note Funding Agreement"). In
addition, the Company entered into that certain Amendment No. 2 to the Sale and
Servicing Agreement by and among the Issuer, the Company, HSLFI, and U.S. Bank
National Association (the "Amendment No. 2"). The Amendment No. 2, among other
things, (1) amended the interest rate to adjust based on the rating assigned by
DBRS, Inc. at the time of an Advance, (2) amended the excess concentration
amounts, (3) extended the term of the Investment Period Termination Date from
June 1, 2020, or June 1, 2021 upon the mutual agreement of the Fund and the
Noteholders (as defined therein) to June 5, 2022, or June 5, 2023 upon the
mutual agreement of the Fund and the Noteholders, (4) extended the Ramp-Up
Period to end on the earlier of (i) nine months from the amendment date and (ii)
the date upon which $50,000,000 loans are subject to the facility, (4) extended
the Portfolio Profile Milestone Test Date from June 2019 and June 2020 to June
2021 and June 2022, and (5) extended the Legal Final Payment Date from June
2025, or if the Investment Period Termination Date was extended June 2026, to
June 2027, or if the Investment Period Termination Date is extended June 2028.
Any obligation to make additional Advances was conditioned on the occurrence of
certain actions (the "Commencement Event"). The Commencement Event has now
occurred.
The description of the documentation related to the Amendment No. 2, the
Supplemental Indenture and the Amended and Restated Note Funding Agreement
contained in this Current Report on Form 8-K is only a summary of the material
terms of the Amendment No. 2, the Supplemental Indenture and the Amended and
Restated Note Funding Agreement and are qualified in their entirety by the terms
of the Amendment No. 2, the Supplemental Indenture and the Amended and Restated
Note Funding Agreement filed as exhibits hereto, which is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit
No. Description
10.1 Sale and Servicing Agreement, dated as of June 1, 2018, by and among
Horizon Funding I, LLC, the issuer, Horizon Secured Lending Fund I LLC,
as originator and seller, Horizon Technology Finance Corporation, the
servicer, and U.S. Bank National Association.
10.2 Amendment No. 1 to Sale and Servicing Agreement, dated as of June 19,
2019, by and among Horizon Funding I, LLC, the issuer, Horizon Secured
Lending Fund I LLC, as originator and seller, Horizon Technology
Finance Corporation, the servicer, and U.S. Bank National
Association.
10.3 Amendment No. 2 to Sale and Servicing Agreement, dated as of June 5,
2020, by and among Horizon Funding I, LLC, the issuer, Horizon Secured
Lending Fund I LLC, as originator and seller, Horizon Technology
Finance Corporation, the servicer, and U.S. Bank National
Association.
10.4 Amended and Restated Note Funding Agreement, dated as of June 5,
2020, between Horizon Funding I, LLC, the issuer, and the Initial
Purchasers (as defined therein).
10.5 Indenture, dated as of June 1, 2018, by and between Horizon Funding
I, LLC, the issuer, and U.S. Bank National Association.
10.6 Supplemental Indenture, dated as of June 5, 2020, by and between
Horizon Funding I, LLC, the issuer, and U.S. Bank National
Association.
99.1 Press release date June 26, 2020 (furnished herewith)
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