AMENDMENT NO. 1 TO LOAN AND SERVICING AGREEMENT, dated as
Exhibit 10.14
EXECUTION VERSION
AMENDMENT NO. 1 TO LOAN AND SERVICING AGREEMENT, dated as
of September 8, 2023 (this “Amendment”), among MSD BDC SPV II, LLC, a Delaware limited liability company, as borrower (the “Borrower”), MSD Investment Corp., a Maryland corporation, as collateral manager (the “Collateral Manager”) and as equityholder (the “Equityholder”), Citizens Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), as a required lender (in such capacity, a “Required Lender”) and as a lender (in such capacity, a “Lender”), EverBank, N.A., as a Lender, Texas Capital Bank, as a Lender, and Western Alliance Bank, as a Lender.
WHEREAS, the Borrower, the Equityholder, the Collateral Manager, MSD Investment Corp., as the seller, U.S. Bank Trust Company, National Association, as the collateral agent, U.S. Bank National Association, as the account bank and the collateral custodian, the Administrative Agent, Citizens Bank, N.A. as the swingline lender, and each Lender party thereto are party to the Loan and Servicing Agreement, dated as of August 15, 2023 (as amended, supplemented, amended and restated and otherwise modified from time to time, the “Loan Agreement”);
WHEREAS, the Borrower, the Collateral Manager, the Equityholder, the Administrative Agent, the Required Lender and the Lenders have agreed to amend the Loan Agreement in accordance with Section 11.01 of the Loan Agreement and subject to the terms and conditions set forth herein; and
NOW THEREFORE, in consideration of the foregoing premises 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, intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Defined Terms. Terms used but not defined herein have the respective meanings given to such terms in the Loan Agreement.
ARTICLE II
Amendments
SECTION 2.1. Amendments to the Loan Agreement. The Loan Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the bold and double-underlined text (indicated textually in the same manner as the following example: bold and double underlined text) as set forth on the pages of the Loan Agreement attached as Exhibit A hereto.
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ARTICLE III
Conditions to Effectiveness
SECTION 3.1. This Amendment shall become effective as of the date first written above upon the satisfaction of the following conditions:
ARTICLE IV
Representations and Warranties
SECTION 4.1. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that, as of the date first written above, (i) no Event of Default, Unmatured Event of Default, Collateral Manager Default or Unmatured Collateral Manager Default has occurred and is continuing and (ii) the representations and warranties of the Borrower contained in the Loan Agreement are true and correct in all material respects on and as of such day (other than any representation and warranty that is made as of a specific date).
ARTICLE V
Miscellaneous
SECTION 5.1. Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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SECTION 5.2. Severability Clause. In case any provision in this Amendment shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 5.3. Ratification. Except as expressly amended and waived hereby, the Loan Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.
SECTION 5.4. Counterparts; Electronic Execution. The parties hereto may sign one or more copies of this Amendment in counterparts, all of which together shall constitute one and the same agreement. Delivery of an executed signature page of this Amendment by email transmission shall be effective as delivery of a manually executed counterpart hereof. The parties agree that this Amendment may be executed and delivered by electronic signatures and that the electronic signatures appearing on this Amendment are the same as handwritten signatures for the purposes of validity, enforceability and admissibility.
SECTION 5.5. Headings. The headings of the Articles and Sections in this Amendment are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.
MSD BDC SPV II, LLC, as Borrower
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer & Treasurer
[Signature Page to Amendment No. 1 to Loan and Servicing Agreement]
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MSD INVESTMENT CORP., as Equityholder and as Collateral Manager
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer & Treasurer
[Signature Page to Amendment No. 1 to Loan and Servicing Agreement]
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CITIZENS BANK, N.A., as Administrative Agent
By: /s/ Xxxxx X Xxxxxx
Name: Xxxxx X Xxxxxx
Title: Managing Director
[Signature Page to Amendment No. 1 to Loan and Servicing Agreement]
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CITIZENS BANK, N.A., as a Required Lender and as a Lender
By: /s/ Xxxxx X Xxxxxx
Name: Xxxxx X Xxxxxx
Title: Managing Director
[Signature Page to Amendment No. 1 to Loan and Servicing Agreement]
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EVERBANK, N.A., as a Lender
By: /s/ Xxxxxx X'Xxxxx
Name: Xxxxxx X'Xxxxx
Title: Director
[Signature Page to Amendment No. 1 to Loan and Servicing Agreement]
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TEXAS CAPITAL BANK, as a Lender
By: /s/ Xxx Xxxx
Name: Xxx Xxxx
Title: Vice-President, Relationship Manager
[Signature Page to Amendment No. 1 to Loan and Servicing Agreement]
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WESTERN ALLIANCE BANK, as a Lender
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
[Signature Page to Amendment No. 1 to Loan and Servicing Agreement]
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Exhibit A
CONFORMED LOAN AND SERVICING AGREEMENT
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EXECUTION VERSION
Conformed through Amendment No. 1 dated September 8, 2023
LOAN AND SERVICING AGREEMENT
Dated as of August 15, 2023 among
MSD BDC SPV II, LLC,
as the Borrower
as the Collateral Manager
as the Equityholder
as the Seller
CITIZENS BANK, N.A.,
as the Swingline Lender
CITIZENS BANK, N.A.,
as the Administrative Agent
EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO,
as the Lenders
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as the Collateral Agent and
U.S. BANK NATIONAL ASSOCIATION,
as the Account Bank and the Collateral Custodian
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“Commitment” means, with respect to each Lender, (a) prior to the end of the Reinvestment Period or for purposes of Advances made pursuant to Section 2.02(g), the dollar amount set forth opposite such Xxxxxx’s name on Annex A hereto (as such amount may be reduced pursuant to Section 2.18 or increased pursuant to Section 2.21 or otherwise revised from time to time in accordance with the terms hereof) or the amount set forth as such Lender’s “Commitment” on Schedule I to the Joinder Supplement relating to such Lender, as applicable;
(b) on or after the end of the Reinvestment Period (other than for purposes of Advances made pursuant to Section 2.02(g)), such Xxxxxx’s Pro Rata Share of the aggregate Advances Outstanding; and (c) on or after the Termination Date, zero.
“Concentration Limitations” means the concentration limitations, calculated as of any date of determination with respect to each Eligible Collateral Obligation included in the Collateral Portfolio (after giving effect to all Eligible Collateral Obligations to be purchased or sold by the Borrower on such date), the amounts thereof in excess of which shall be aggregated (without duplication) for purposes of calculating the Excess Concentration Amount pursuant to the definition thereof, equal to:
(i) the largest Obligor in excess of 7.5% of the Excess Concentration Measure, (ii) each of the second and third-largest Obligors in excess of 6.5% of the Excess Concentration Measure, and (iii) each of the fourth and fifth-largest Obligors in excess of 6.0% of the Excess Concentration Measure; provided that, for purposes of this clause (d), all Collateral Obligations included or expected to be included as part of the Collateral
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all Eligible Collateral Obligations to be purchased or sold by the Borrower on such date; provided that, notwithstanding anything to the contrary in this Agreement, after the end of the Reinvestment Period, the Excess Concentration Amount shall be the Excess Concentration Amount as of the last day of the Reinvestment Period.
“Excess Concentration Measure” means, (a) during the Ramp Period, the Minimum Target Amount and (b) thereafter, the Aggregate Adjusted Balance.
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Excluded Amounts” means (a) any amount received in the Collection Account with respect to any Collateral Obligation included as part of the Collateral Portfolio, which amount is attributable to the payment of any Tax, fee or other charge imposed by any Governmental Authority on such Collateral Obligation or on any Underlying Collateral and (b) any interest or fees (including origination, agency, structuring, management or other up-front fees) that are for the account of the Seller or any other Person from whom the Borrower purchased such Collateral Obligation (including, without limitation, interest accruing prior to the date such Collateral Obligation is purchased by the Borrower), (c) any reimbursement of insurance premiums that were paid from amounts other than Collections, (d) any escrows relating to Taxes, insurance and other amounts in connection with Collateral Obligations which are held in an escrow account for the benefit of the Obligor and the secured party pursuant to escrow arrangements under any Underlying Instrument, (e) any amount received in the Collection Account with respect to any Collateral Obligation sold or transferred by the Borrower pursuant to Section 2.07 to the extent such amount is attributable to a time after the effective date of such sale, (f) any interest accruing on a Collateral Obligation prior to the related Cut-Off Date that was not purchased by the Borrower and is for the account of the Person from whom the Borrower purchased such Collateral Obligation, and (g) any amounts deposited into the Collection Account in manifest error.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) by the jurisdiction (or any political subdivision thereof) under the laws of which such Recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b) in the case of any Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender pursuant to a law in effect on the date on which (i) such Lender becomes a party hereto or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.11, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.11(g), and (d) any Taxes imposed under FATCA.
“Facility Amount” means $370,000,000445,000,000, as such amounts may vary from time to time in accordance with the terms of this Agreement (including in connection with
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reorganization, arrangement, insolvency, moratorium or liquidation proceedings, (b) is secured by a pledge of specified collateral, which security interest is validly perfected and first priority under Applicable Law (subject to liens permitted under the related Underlying Instrument and liens accorded priority by law in favor of any governmental body) and (c) the Collateral Manager determines in good faith that the value of the Underlying Collateral and/or the Enterprise Value of the related Obligor as of the Cut-Off Date equals or exceeds the Outstanding Balance of such Loan plus the aggregate outstanding balances of all other loans of equal or higher seniority secured by the same collateral.
“First Undrawn Amount” means, as of any date of determination, the lesser of (i) the Undrawn Amount and (ii) an amount equal to 50.0% of the Facility Amount.
“Fitch” means Fitch Ratings, Inc. or any successor thereto.
“Fixed Rate Obligation” means any Eligible Collateral Obligation other than a Floating Rate Obligation.
“Floating Rate Obligation” means any Eligible Collateral Obligation that bears a floating rate of interest.
“Floor” means, with respect to any applicable Benchmark or any applicable Base Rate, a rate of interest equal to 0.0%.
“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to the Swingline Lender, such Defaulting Lender’s Pro Rata Share of Swingline Advances (other than Swingline Advances as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders, repaid by the Borrower or for which cash collateral or other credit support acceptable to the Swingline Lender shall have been provided in accordance with the terms hereof).
“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is a resident for tax purposes.
“Fundamental Amendment” means any amendment, modification, waiver or supplement of or to this Agreement that would have a material adverse effect on any Lender (as reasonably determined by such Lender) and (a) increase or extend the term of the Commitments (other than an increase in the Commitment of another Lender or the addition of a new Lender) or extend the Termination Date or any component thereof or definition related thereto; (b) extend the date fixed for the payment of any amounts in respect of any Advance or any Fees hereunder, in each case, owing to any such Lender; (c) reduce any Advances Outstanding or the amount of any payment of principal or interest thereon or any Fee or other amounts hereunder owing to any such Lender; (d) reduce the rate at which interest or any Fee is payable hereunder to any Lender (excluding, in each case, any such reduction as a result of a full or partial waiver of interest or Fees accruing at a default rate imposed during an Event of Default or as a result of a waiver of any Event of Default); (e) release any material portion of the Collateral Portfolio, except in connection with dispositions expressly permitted or required hereunder; (f) alter the terms of
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“Relevant Governmental Body” means the Federal Reserve Board or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board or the Federal Reserve Bank of New York, or any successor thereto.
“Relevant Test Period” means, with respect to any Collateral Obligation, the relevant test period for the calculation of Total Net Leverage Ratio, Senior Net Leverage Ratio, Effective LTV, Facility Attachment Ratio, Gross Debt-to-Recurring-Revenue Ratio, Cash Interest Coverage Ratio or EBITDA or any other term of similar import, as applicable, for such Collateral Obligation in the related Underlying Instrument or, if no such period is provided for therein, for Obligors delivering monthly financial statements, each period of the last 12 consecutive reported calendar months, and for Obligors delivering quarterly financial statements, each period of the last four consecutive reported fiscal quarters of the principal Obligor on such Collateral Obligation; provided that with respect to any Collateral Obligation for which the relevant test period is not provided for in the related Underlying Instrument, if an Obligor is a newly-formed entity as to which 12 consecutive calendar months have not yet elapsed, “Relevant Test Period” shall initially include the period from the date of formation of such Obligor to the end of the twelfth calendar month or fourth fiscal quarter (as the case may be) from the date of formation, and shall subsequently include each period of the last 12 consecutive reported calendar months or four consecutive reported fiscal quarters (as the case may be) of such Obligor.
“Remittance Period” means, (i) as to the initial Payment Date, the period beginning on the Closing Date and ending on, and including, the Determination Date immediately preceding such Payment Date and (ii) as to any subsequent Payment Date, the period beginning on the first day after the most recently ended Remittance Period and ending on, and including, the Determination Date immediately preceding such Payment Date, or, with respect to the final Remittance Period, the Collection Date.
“Replaced Collateral Obligation” has the meaning assigned to that term in Section
2.07(c).
“Replacement Collateral Manager” has the meaning assigned to that term in
Section 6.01(c).
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than an event for which the 30 day notice period has been waived.
“Reporting Date” means the 15th day of each calendar month, or if such day is not a Business Day, the next succeeding Business Day, commencing in September 2023.
“Required Lenders” means, at any time, (a) CBNA, for so long as it (x) is a Lender hereunder and (y) represents at least 20% of the aggregate Commitments (or, if the Commitments have been terminated, the Advances Outstanding); and (b) the Lenders (including CBNA, for so long as it is a Lender hereunder) representing in the aggregate more than 50% of the aggregate Commitments (or, if the Commitments have been terminated, Advances Outstanding); provided that, (i) if at any time there is more than one non-Defaulting Lender
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Section 2.11, such assignment, delegation or termination will result in a reduction in such compensation or payments thereafter; and
(c) such assignment, delegation or termination does not conflict with Applicable Law;
provided that, notwithstanding anything herein to the contrary, no Lender shall be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment or delegation, as applicable, cease to apply.
Section 2.25 Benchmark Replacement Setting.
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available such proceeds to any subsidiary, joint venture partner, or other Person (i) to fund any activities or business of or with a Sanctioned Person, or (ii) in any manner that would be prohibited by Sanctions or would otherwise cause any Lender to be in breach of, or penalized or targeted under, any Sanctions. Each Person shall comply with all applicable Sanctions in all material respects, and shall maintain policies and procedures reasonably designed to ensure compliance with Sanctions. The Borrower will notify each Lender and the Administrative Agent in writing not more than one (1) Business Day after becoming aware of any breach of this provision.
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understood that any such account to which the Obligors may be instructed to make payments shall be subject to an account control agreement which provides the Collateral Agent with a first priority perfected security interest in such account, as evidenced by an Opinion of Counsel reasonably acceptable to the Administrative Agent).
Section 5.03 Affirmative Covenants of the Collateral Manager. From the Closing Date until the Collection Date:
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direction of the Administrative Agent and/or the Required Lenders, including without limitation under any applicable power of attorney) will facilitate the transition of the performance of such activities to a successor Collateral Manager pursuant to this Agreement, (ii) remain subject to the Collateral Management Standard, (iii) take all necessary or appropriate actions to facilitate the transfer of all relevant information and documents to any such successor Collateral Manager and cooperate therewith to effect such transfer in an expeditious manner and (iv) exercise its commercially reasonable efforts to assist the successor Collateral Manager in assuming such obligations, in each case, until such time as a successor Collateral Manager shall assume each and all of the Collateral Manager’s obligations hereunder and under any other Transaction Document or other instrument authorized or required thereby and agree to manage, service and administer the Collateral Portfolio on the terms and subject to the conditions set forth herein.
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then, in each case, the Administrative Agent may (so long as CBNA or an Affiliate thereof is the Administrative Agent)(x) if it is a Required Lender pursuant to clause (a) of the definition
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thereof, may, or (y) otherwise, or shall (if CBNA or an Affiliate thereof is not the
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Administrative Agent), at the direction of the Required Lenders, by notice to the Borrower (with a copy to the Collateral Manager and the Equityholder), declare the “Termination Date” to have occurred; provided that, in the case of any Event of Default described in the proviso to Section 7.01(b) or in Section 7.01(c) above, the “Termination Date” shall be deemed to have occurred automatically upon the occurrence of such event (unless otherwise agreed in writing by the Administrative Agent and the Required Lenders). Upon any such declaration or automatic occurrence, (i) the Borrower shall cease purchasing, originating or otherwise acquiring Collateral Obligations, (ii) the Administrative Agent may (so long as CBNA or an Affiliate thereof is the Administrative Agent), or shall (if CBNA or an Affiliate thereof is not the Administrative Agent) upon the direction or with the consent of the Required Lenders, declare the Obligations to be immediately due and payable in full (without presentment, demand, protest or notice of any kind all of which are hereby waived by the Borrower) and (iii) all proceeds and distributions in respect of the Collateral Portfolio shall be distributed by the Collateral Agent (at the direction of the Administrative Agent) as described in Section 2.04(c); provided that, the Borrower shall in any event remain liable to pay such Advances Outstanding and all such amounts and Obligations immediately in accordance with Section 2.04(e). In addition, upon any such declaration or upon any such automatic occurrence, the Collateral Agent, on behalf of the Secured Parties and at the direction of the Administrative Agent, shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under the UCC of the applicable jurisdiction and other Applicable Law, which rights shall be cumulative. Without limiting any obligation of the Collateral Manager hereunder, the Borrower confirms and agrees that the Collateral Agent, on behalf of the Secured Parties and at the direction of the Administrative Agent, (or any designee thereof, including, without limitation, the Collateral Manager), upon any such automatic occurrence (unless waived in writing by the Administrative Agent with the consent of the Required Lenders) or upon the declaration of the Termination Date during the continuation of an Event of Default, shall, at its option, have the sole right to enforce the Borrower’s rights and remedies under each Assigned Document, but without any obligation on the part of the Administrative Agent, any Lender or any of their respective Affiliates to perform any of the obligations of the Borrower under any such Assigned Document.
Section 7.02 Additional Remedies of the Administrative Agent.
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|
ANNEX A |
|
Lender |
Commitment |
|
Citizens Bank, N.A. |
$250,000,000 |
|
EverBank, N.A. |
$100,000,000 |
|
Texas Capital Bank |
$20,000,000 |
|
Western Alliance Bank |
$75,000,000 |
|
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Annex A-1
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