SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 10.1
Execution Version
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO THE LOAN AND SECURITY AGREEMENT (this “Amendment”), is made as of July 2, 2020, by and among OAKTREE STRATEGIC INCOME II, INC., as the collateral manager (in such capacity, the “Collateral Manager”), OSI 2 SENIOR LENDING SPV, LLC, as the borrower (the “Borrower”), Citibank, N.A., as administrative agent (the “Administrative Agent”) and Citibank, N.A., as the sole committed lender (the “Lender”).
R E C I T A L S
WHEREAS, the Collateral Manager, Oaktree Strategic Income II, Inc., as the seller (in such capacity, the “Seller”), the Borrower, the Administrative Agent, the Lender and Deutsche Bank Trust Company Americas, as Collateral Agent, are parties to that certain Loan and Security Agreement, dated as of July 26, 2019 (as the same has been previously amended and may be amended, modified, waived, supplemented, restated or replaced from time to time, the “Loan and Security Agreement”);
WHEREAS, pursuant to Section 13.1 of the Loan and Security Agreement, the Collateral Manager and the Borrower desire to, and have requested that the Administrative Agent agree to, amend certain provisions of the Loan and Security Agreement as provided herein;
WHEREAS, subject to the terms and conditions of this Amendment, the Administrative Agent and Lenders constituting at least the Required Lenders are willing to agree to such amendments to the Loan and Security Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings ascribed thereto in the Loan and Security Agreement.
2. Amendments. The Loan and Security Agreement is hereby amended, modified and supplemented as follows:
(A) The defined term
“Advance Rate” in Section 1.1 is hereby amended by deleting such term in its entirety and replacing it with the following
(underlined language shows the changes for convenience of reference and language that is struck through shall not be included in the amendment and restatement of the definition):
“Advance Rate”: As of any date of determination, with respect to each Eligible Loan that is (a) a First-Lien Broadly Syndicated Loan, 75%, (b) a First Lien Large Middle Market Loan, (1) if the related Advance Date is prior to the Upsize Date, 70% or (2) if the related Advance Date is on or after the Upsize Date, 65%, (c) a First Lien Traditional Middle Market Loan, (1) if the related Advance Date is prior to the Upsize Date, 67.5% or (2) if the related Advance Date is on or after the Upsize Date, 60%, (d) a First Lien Lower Middle-Market Loan, (1) if the related Advance Date is prior to the Upsize Date, 65%, or (2) if the related Advance Date is on or after the Upsize Date, 60% or (e) a Second-Lien Broadly Syndicated Loan, (1) if the related Advance Date is prior to the Upsize Date 45%, or (2) if the related Advance Date is on or after the Upsize Date. 40%, or (f) a Second- Lien Middle-Market Loan, 40%; provided, that: (i) the portion of any Loan that otherwise qualifies as a First Lien Loan and is not a Broadly Syndicated Loan in a principal amount that would result in the related Obligor having a Net Senior Leverage Ratio at any time greater than 4.50 to 1:00, then such portion of such Loan shall be treated as a Second-Lien Middle Market
Loan for Advance Rate purposes; and (ii) (x) the portion of any Loan that otherwise qualifies as a First Lien Loan and is not a Broadly Syndicated Loan in a principal amount that would result in the related Obligor having a Senior Debt/EBITDA Ratio at any time greater than 7.00 to 1:00, then such portion of such Loan shall be treated as having an Advance Rate of zero (0) or (y) the portion of any Loan that otherwise qualifies as a Unitranche Loan or a Second Lien Loan that, in each case, is not a Broadly Syndicated Loan in a principal amount that would result in the related Obligor having a Total Debt/EBIDTA Ratio at any time greater than 7.00 to 1.00, then such portion of any such Loan shall have an Advance Rate of zero (0). Notwithstanding the foregoing, if after giving effect to the inclusion of any Loan at its otherwise applicable Advance Rate, the weighted average of the Advance Rates on all Loans included in the Collateral would exceed 71.25%, the otherwise applicable Advance Rate for such Loan shall be reduced to the extent necessary to eliminate such excess. For the avoidance of doubt, the Advance Rate for any Eligible Loan as of any day shall be the Advance Rate applicable to such Eligible Loan as determined in accordance with this definition as of such day.
(B) The defined term “Assigned Value Adjustment Event” in
Section 1.1 is hereby amended by deleting clause (b) in its entirety and replacing it with the following (underlined language shows the changes for convenience of reference and language that is struck through shall not be included in the amendment and restatement of the definition):
“(b) with respect to any Loan that is not a Broadly Syndicated Loan, the Net Senior Leverage Ratio for any Relevant Test
Period of the related Obligor with respect to such Loan is both (i) greater than 4.25x and (ii)
greater than 0.50x higher than the Original Net Senior Leverage Ratio;
(C) The defined term “Concentration Limits” in
Section 1.1 is hereby amended by deleting clause (c)(iv), clause (c)(vi) and clause (e) in their entirety and replacing them with the following
(underlined language shows the changes for convenience of reference and language that is struck through shall not be included in the amendment and restatement of the definition):
“[(c)](iv) the sum of Outstanding Balances of all Cov-Lite Loans that are
Eligible Loans shall not exceed 12.510% of the Concentration Test Amount;”
* * *
“[(c)](vi) the sum of Outstanding Balances of all Unitranche Loans that are Eligible Loans for which the
Total Debt/EBITDA Ratio of the related Obligor is equal to or greater than 4.25:1.00 shall not exceed 1525% of the Concentration Test Amount; provided that this limit shall be deemed to be met at any time the Eligible Loans that
are Unitranche Loans otherwise subject to this limit consist solely of the Loans identified on Schedule VII and any other Loans approved by the Administrative Agent in its sole discretion; provided further, only those Eligible Loans that are
Unitranche Loans that are not identified on Schedule VII, not approved by the Administrative Agent or in the future become subject to this limit shall constitute the Excess Concentration Amount for this clause (vi);
* * *
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“(e) the sum of Outstanding Balances of all Second Lien Loans that are
Eligible Loans shall not exceed 2010% of the Concentration Test Amount;”
(D) Section 1.1 is hereby amended by adding the following defined terms in the appropriate alphabetical order:
“Upsize Amount” means $50,000,000.
“Upsize Date” means July 2, 2020.
(E) Annex B (Commitments) is hereby amended by deleting the reference to $100,000,000 and replacing it with $150,000,000.
3. Conditions to Effectiveness. This Amendment shall become effective as of the date first written above upon the satisfaction of each of the following conditions:
(A) the execution and delivery of this Amendment by each party hereto;
(B) the Borrower has delivered legal opinions of Milbank LLP, each dated the Upsize Date, covering the same matters as the legal opinions provided by Milbank LLP on the Closing Date;
(C) the Administrative Agent’s receipt of a good standing certificate for the Borrower and the Collateral Manager issued by the applicable office body of its jurisdiction of organization and a certified copy of the resolutions of the board of managers or directors (or similar items) of the Borrower and the Collateral Manager approving this Amendment and the transactions contemplated hereby, certified by its secretary or other authorized officer; and
(D) payment of all fees due on or prior to the date of this Amendment.
4. Representations and Warranties. The Borrower hereby represents and warrants that, as of the date first written above, (i) no Event of Default or Default has occurred and is continuing and (ii) the representations and warranties of the Borrower contained in the Loan and Security 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).
5. Reaffirmation. Except to the extent expressly amended by this Amendment, the terms and conditions of the Loan and Security Agreement and other Transaction Documents shall remain in full force and effect. Each of the Transaction Documents, including the Loan and Security Agreement, and any and all other agreements, documents or instruments now or hereafter executed and/or delivered pursuant to the terms hereof or pursuant to the terms of the Loan and Security Agreement as amended hereby, are hereby amended so that any reference in such Transaction Documents to the Loan and Security Agreement, whether direct or indirect, shall mean a reference to the Loan and Security Agreement as amended hereby. This Amendment shall constitute a Transaction Document under the Loan and Security Agreement.
6. Miscellaneous. This Amendment may be executed in counterparts, each of which shall be and all of which, when taken together, shall constitute one binding agreement. The Article and/or Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 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 LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized representatives, all as of the day, month and year first above written.
| BORROWER | ||||
| OSI 2 Senior Lending SPV, LLC | ||||
| By: Oaktree Strategic Income II, Inc. | ||||
| Its: Designated Manager | ||||
| By: Oaktree Fund Advisors, LLC | ||||
| Its: Investment Advisor | ||||
| By: | /s/ Xxxx Xxxxxxxx |
|||
| Name: Xxxx Xxxxxxxx | ||||
| Title: Senior Vice President | ||||
| By: | /s/ Xxxxxxx Xxxxxxx |
|||
| Name: Xxxxxxx Xxxxxxx | ||||
| Title: Senior Vice President | ||||
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
Signature Page to Amendment
| COLLATERAL MANAGER: | ||||
| OAKTREE STRATEGIC INCOME II, INC. | ||||
| By: Oaktree Fund Advisors, LLC | ||||
| Its: Investment Advisor | ||||
| By: | /s/ Xxxx Xxxxxxxx |
|||
| Name: Xxxx Xxxxxxxx | ||||
| Title: Senior Vice President | ||||
| By: | /s/ Xxxxxxx Xxxxxxx |
|||
| Name: Xxxxxxx Xxxxxxx | ||||
| Title: Senior Vice President | ||||
Signature Page to Amendment
| THE ADMINISTRATIVE AGENT: | ||||||
| CITIBANK, N.A., in its capacity as | ||||||
| By: | /s/ Xxxxxxx Xxxxxxxx |
|||||
| Name: | Xxxxxxx Xxxxxxxx | |||||
| Title: | Vice President | |||||
| LENDER: | ||||||
| CITIBANK, N.A., | ||||||
| By: | /s/ Xxxxxxx Xxxxxxxx |
|||||
| Name: | Xxxxxxx Xxxxxxxx | |||||
| Title: | Vice President | |||||
