Exhibit 10.17
Execution Version
Dated November 15, 2023
COLLATERAL MANAGEMENT AGREEMENT
between
MSD BDC CLO I, LLC
as Issuer
and
MSD PARTNERS, L.P.
as Collateral Manager
TABLE OF CONTENTS
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Section 1. | Definitions. | 1 |
Section 2. | Duties of the Collateral Manager | 3 |
Section 3. | Purchase and Sale Transactions; Brokerage | 7 |
Section 4. | Conflicts of Interest and Issuer Acknowledgment of Conflicts of Interest | 9 |
Section 5. | Obligations of Collateral Manager | 10 |
Section 6. | Compensation | 10 |
Section 7. | Expenses | 11 |
Section 8. | Services to Other Issuers; Certain Affiliated Activities | 12 |
Section 9. | Limits of Collateral Manager Responsibility; Reliance; Indemnification | 15 |
Section 10. | Records | 17 |
Section 11. | Benefit of the Agreement | 17 |
Section 12. | No Partnership or Joint Venture | 17 |
Section 13. | Representations and Warranties | 18 |
Section 14. | [reserved] | 21 |
Section 15. | Term; Termination | 21 |
Section 16. | Termination for Cause | 23 |
Section 17. | Action Upon Termination | 24 |
Section 18. | Use of Name; Reference to Collateral Manager | 24 |
Section 19. | Assignments | 25 |
Section 20. | Notices | 26 |
Section 21. | Binding Nature of Agreement; Successors and Assigns. | 27 |
Section 22. | Entire Agreement | 27 |
Section 23. | Amendment | 27 |
Section 24. | Conflict with the Indenture | 28 |
Section 25. | Subordination and Assignment | 28 |
Section 26. | Governing Law; Submission to Jurisdiction; Venue, etc | 28 |
Section 27. | Indulgences Not Waivers | 28 |
Section 28. | Titles Not to Affect Interpretation | 28 |
Section 29. | Execution in Counterparts. | 29 |
Section 30. | Provisions Separable | 29 |
Section 31. | Number and Gender | 29 |
Section 32. | Written Disclosure Statement | 29 |
Section 33. | Non Recourse | 29 |
Section 34. | Attorney-in-Fact | 29 |
Section 35. | Confidential Information | 30 |
Section 36. | Intellectual Property | 31 |
(i)
COLLATERAL MANAGEMENT AGREEMENT
This COLLATERAL MANAGEMENT AGREEMENT, dated as of November 15, 2023 (the “Agreement”), is entered into by and between MSD BDC CLO I, LLC, a Delaware limited liability company (together with successors and assigns permitted hereunder, the “Issuer”), and MSD PARTNERS, L.P. a Delaware limited partnership, as collateral manager (together with its successors and assigns, the “Collateral Manager”).
W I T N E S S E T H:
WHEREAS, the Issuer intends to issue the Notes (as defined in the Indenture) pursuant to an indenture to be dated as of the date hereof (as the same may be supplemented or otherwise modified from time to time, the “Indenture”), among the Issuer and U.S. Bank Trust Company, National Association, as Trustee (as defined therein);
WHEREAS, pursuant to the Indenture, the Issuer intends to grant to the Trustee, for the benefit of the Secured Parties, all of its right, title and interest in and under the Assets (as defined in the Indenture), including certain Collateral Obligations, Eligible Investments and any Equity Securities acquired or received in connection with the Collateral Obligations, together with certain other contract rights, amounts on deposit in certain accounts, certain other assets and the proceeds thereof;
WHEREAS, the Issuer is authorized to enter into this Agreement, pursuant to which the Collateral Manager agrees to perform, on behalf of the Issuer, certain duties with respect to the Assets in the manner and on the terms set forth herein and to provide such additional duties as are consistent with the terms of this Agreement and the Indenture as the Issuer may from time to time request; and
WHEREAS, the Issuer desires to engage the Collateral Manager to provide the services described herein and the Collateral Manager has the capacity to provide such services, is prepared to perform such services upon the terms and conditions set forth herein and desires to accept such appointment.
NOW, THEREFORE, in consideration of the mutual agreements herein set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties to this Agreement, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein but not otherwise defined shall have the meanings set forth in the Indenture.
“Advisers Act” shall mean the United States Investment Advisers Act of 1940, as amended.
“Affiliate Transaction” shall mean each transaction in which the Collateral Manager or its Affiliate acts as principal (within the meaning of the Advisers Act) buys or sells a Collateral Obligation from the Issuer for its own account.
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“Agreement” shall mean this Collateral Management Agreement, as amended from time to time in accordance with the terms hereof.
“Base Management Fee” shall mean, a fee, payable in arrears on each Payment Date, in an amount equal to (A) if MIC holds no Preferred Shares, 0.15% per annum (calculated on the basis of a 360-day year consisting of twelve 30-day months) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date and (B) if MIC holds any Preferred Shares, $0.
“Client” shall mean any advisory client of the Collateral Manager other than the Issuer, including private funds, pooled investment vehicles and single investor funds, separately managed accounts or any other account and an investment vehicle that has elected to be regulated as a business development company under the 1940 Act.
“Collateral Management Fees” shall mean, collectively, the Senior Management Fee, the Subordinated Management Fee and the Incentive Management Fee, each as defined in the Indenture.
“Collateral Manager Breach” shall mean (A) a material breach of this Agreement by the Collateral Manager by reason of acts or omissions which constitute bad faith, willful misconduct or gross negligence in the performance of, or reckless disregard with respect to, its obligations hereunder, or (B) the incurrence of a Loss that arises out of or is based upon any untrue statement or omission of a material fact in the Collateral Manager Information contained in the Offering Circular.
“Collateral Manager Information” shall mean the information about the Firm provided by the Collateral Manager for use in the Offering Circular under the headings entitled "Summary of Terms—Collateral Manager", “Risk Factors—Relating to the Collateral Manager and the Retention Holder,” “Risk Factors—Relating to Certain Conflicts of Interest—The Issuer will be subject to various conflicts of interest involving the Collateral Manager, MIC, MSD SPV I, their respective Affiliates and certain investors”, “The Collateral Manager” and “The Retention Holder and its Affiliates.”
“Cross Transactions” shall mean Transactions for the Issuer’s account in which a security or other property is sold to or purchased from another Client or other investment advisory client or brokerage customer of the Firm.
“Firm” shall mean, collectively, the Collateral Manager and its Affiliates.
“Incentive Management Fee” shall mean, a fee, which is payable only on a Payment Date on or after the date that the Incentive Management Fee Threshold has been met, will be payable in accordance with the Priority of Payments and will equal to, if MIC holds any Preferred Shares, 0% and, if MIC holds no Preferred Shares, 20%, in each case, of the Interest Proceeds and Principal Proceeds available for distribution under Section 11.1(a)(i)(M), Section 11.1(a)(ii)(K) and Section 11.1(a)(iv)(J) of the Indenture on such Payment Date.
“Indemnified Party” shall mean, with respect to Section 9 hereof, each of the Firm and their respective Personnel.
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“Indemnifying Party” shall mean, with respect to Section 9 hereof, the Issuer.
“Indenture” shall have the meaning specified in the recitals.
“Issuer” shall have the meaning specified in the recitals.
“Losses” shall mean, with respect to any Person, any and all expenses, losses, damages, liabilities, demands, charges or claims of any nature whatsoever (including reasonable attorneys’ fees and expenses) incurred by such Person.
“Notes” shall have the meaning specified in the recitals.
“Personnel” shall mean, collectively, principals, partners, members, stockholders, directors, managers, managing directors, officers, employees and agents.
“Subordinated Management Fee” shall mean, a fee, payable in arrears on each Payment Date, in an amount equal to (A) if MIC holds no Preferred Shares, 0.10% per annum (calculated on the basis of a 360-day year consisting of twelve 30-day months) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date and (B) if MIC holds any Preferred Shares, $0.
“Supermajority” shall mean, with respect to any Class or Classes of Notes, the holders of at least 66-2/3% of the Aggregate Outstanding Amount of the Notes of such Class or Classes.
“Transaction” shall mean any action taken by the Collateral Manager on behalf of the Issuer in accordance with the terms of this Agreement, including, without limitation, (i) selecting and acquiring Collateral Obligations and Eligible Investments, (ii) supervising, investing and reinvesting the Assets, and (iii) instructing the Trustee with respect to any disposition or tender of a Collateral Obligation, Equity Security or Eligible Investment by the Issuer.
Section 2. Duties of the Collateral Manager. The Collateral Manager shall provide services to the Issuer as follows:
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Section 3. Purchase and Sale Transactions; Brokerage
In selecting brokers or dealers, the Collateral Manager generally will consider various factors, including: the reputation, experience and financial stability of the broker-dealer; the ability to maintain the Issuer’s anonymity; the ability to provide competitive pricing; the size and timing of the transaction; the ability and willingness to commit capital and provide prompt and accurate execution and settlement; whether the broker-dealer makes a market in a security and/or finds sources of liquidity; the nature of the market for the security and the difficulty of execution; the broker-dealer’s trading expertise, including its ability to minimize total trading costs and to trade without unduly impacting the market; the belief that the broker-dealer charges a fair and reasonable fee for each trade, and that the Issuer has been treated fairly and honestly in prior
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trades; and the quality of execution, quality of the broker-dealer relationship, quality of service rendered by the broker-dealer in prior transactions, the broker-dealers experience and speed of execution, as well as any “research” services provided to the Collateral Manager, which may include research reports, trade seminars and access to certain professionals available to the Collateral Manager in connection with effecting transactions.
Section 28(e) of Exchange Act provides a “safe harbor” to investment managers who use soft dollars generated by their advised accounts to obtain investment research and brokerage services that provide lawful and appropriate assistance to investment managers in the performance of their investment decision-making responsibilities. Although the Collateral Manager has the discretion to use soft dollars to obtain services and products that would not be within the safe harbor afforded by Section 28(e) of the Exchange Act and for which it would otherwise be required to pay in cash, it has no plans to do so, and to the extent the Collateral Manager uses soft dollars on behalf of the Clients, it intends to seek to do so within the safe harbor. Consistent with Section 28(e) of the Exchange Act, research products or services obtained by brokers for execution of transactions in connection with one or more Clients could be used by the Collateral Manager to service one or more other Clients, including Clients that could not have paid for the benefits. .
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Section 4. Conflicts of Interest and Issuer Acknowledgment of Conflicts of Interest. In certain circumstances, the interests of the Issuer and/or the Holders with respect to matters as to which the Collateral Manager is advising the Issuer may conflict with the interests of the Collateral Manager. In addition to those described in Section 3 above, the Issuer hereby acknowledges that various potential and actual conflicts of interest may exist with respect to the Collateral Manager as described in this Agreement, the Indenture, the Offering Circular (including the Collateral Manager Information) provided by the Issuer for the Notes or the Form ADV of the Collateral Manager; provided that nothing in this Section 4 shall be construed as expanding the duties of the Collateral Manager as set forth herein or under applicable law.
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Section 5. Obligations of Collateral Manager. Subject to the terms of the Indenture and to Section 9 hereof, the Collateral Manager shall use all commercially reasonable efforts to ensure that no action is taken by it, and shall not intentionally take any action, which it knows would (a) materially adversely affect the status of the Issuer for purposes of U.S. federal or state law or any other law which, in the Collateral Manager’s good faith judgment is applicable to the Issuer, (b) be in violation of the Issuer’s organizational documents, (c) violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer, including, without limitation, actions which would violate any U.S. federal, state or other applicable securities law the violation of which would have a material adverse effect on the business, operations, assets or financial condition of the Issuer, or the ability of the Collateral Manager to perform its obligations hereunder, (d) require registration of the Issuer or the pool of Assets as an “investment company” under the 1940 Act, or (e) result in the Issuer violating any material term of the Indenture.
It is understood that (x) the Firm and their respective Personnel shall not be liable to the Issuer, the Trustee, any Secured Party or any other Person except as provided in Section 9 and (y) in connection with the foregoing the Collateral Manager shall not be required to make any independent investigation of any facts or laws not otherwise known to it in connection with its obligations under this Agreement and the Indenture or the conduct of its business generally. The Collateral Manager need not take any action unless arrangements satisfactory to it are made to insure or indemnify the Collateral Manager from any liability it may incur as a result of such action.
Section 6. Compensation. (a) Notwithstanding anything in this Agreement or the Indenture, for so long as MIC holds any Preferred Shares, the Collateral Manager shall not be entitled to any Collateral Management Fees under this Agreement and this Agreement shall not be deemed to be an investment advisory agreement for purposes of Section 15 of the 1940 Act
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Section 7. Expenses.
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Section 8. Services to Other Issuers; Certain Affiliated Activities
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Without prejudice to the generality of the foregoing, the Firm or any of the Firm’s Personnel, may, subject to the provisions of this Agreement, among other things:
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The Issuer acknowledges that certain Personnel may possess information relating to particular obligors who have issued Collateral Obligations, Eligible Investments or Equity Securities, which information is not known to Personnel of the Collateral Manager who are responsible for monitoring the Collateral Obligations, Eligible Investments or Equity Securities and performing the other obligations of the Collateral Manager under this Agreement, and the Issuer agrees that the Firm shall have no obligation to share any such information, opportunity or idea with such Personnel or the Issuer.
Section 9. Limits of Collateral Manager Responsibility; Reliance; Indemnification.
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The foregoing provisions, however, shall not be construed to relieve any person of any liability to the extent that such liability may not be waived, modified or limited under applicable law.
Section 10. Records. The Collateral Manager shall maintain appropriate books of account and records relating to services performed hereunder, and such books of account and records shall be accessible for inspection by a representative of the Issuer and the accountants appointed pursuant to the Indenture at a mutually agreed time during the Collateral Manager’s normal business hours and upon not less than five Business Days’ prior notice; provided that the Collateral Manager shall not be obligated to provide access to any nonpublic information if it determines in good faith that the disclosure of such information would violate any applicable law, regulation or contractual arrangement.
Section 11. Benefit of the Agreement. The Collateral Manager agrees that its obligations under this Agreement shall be enforceable by the Issuer and, following an Enforcement Event, the Trustee on behalf of the Secured Parties.
Section 12. No Partnership or Joint Venture. For all purposes of this Agreement, the Collateral Manager shall be deemed to be an independent contractor and, unless otherwise expressly provided herein or with the prior written authorization of the Issuer, as applicable, the Collateral Manager shall have no authority to act for, represent, bind or obligate the Issuer, its affiliates, officers, members, directors, managers or employees in any way and shall not otherwise be deemed to be an agent of the Issuer. Except as shall be specifically provided otherwise in this Agreement, nothing contained herein shall create or constitute the Collateral Manager or the Issuer as members of any partnership, joint venture, association, syndicate, unincorporated business, or other separate entity, nor shall be deemed to confer on either of them any express, implied, or apparent authority to incur any obligation or liability on behalf of any other.
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Section 13. Representations and Warranties. (a) Representations and Warranties of the Issuer. The Issuer hereby represents and warrants to the Collateral Manager as follows:
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Section 14. [reserved].
Section 15. Term; Termination. (a) Automatic Termination. This Agreement shall continue in force until the first of the following occurs: (i) the payment in full of the Notes and the redemption in whole of the Preferred Shares and the termination of the Indenture in accordance with its terms; (ii) the liquidation of the Assets and the final distribution of the proceeds of such liquidation to the Holders of the Notes; or (iii) the effective date of the resignation of the Collateral Manager or the removal of the Collateral Manager for “cause” as described below.
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Section 16. Termination for Cause. This Agreement may be terminated, and the Collateral Manager may be removed by the Issuer or the Trustee for cause, upon 30 days’ prior written notice to the Collateral Manager at the direction of a Supermajority of the Controlling Class. Notice of such removal for cause shall be delivered by or on behalf of the Issuer to the Holders of each Class of Notes. For purposes of determining “cause” with respect to termination of this Agreement pursuant to this Section 16, such term shall mean only any one of the following events:
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For the avoidance of doubt, the Trustee and the Collateral Administrator shall have no responsibility to monitor or determine “cause”.
Section 17. Action Upon Termination. (a) From and after the effective date of termination of this Agreement, the Collateral Manager shall not be entitled to compensation for further services hereunder, but shall be entitled to receive any amounts owing under Sections 6, 7 and 9. Upon such termination, the Collateral Manager shall as soon as practicable deliver to the Issuer all property and documents of the Trustee or the Issuer or otherwise relating to the Assets then in the custody of the Collateral Manager; provided that the Collateral Manager may keep copies of any documents required to be retained in compliance with the record keeping requirements of the Advisers Act.
The Collateral Manager agrees that, notwithstanding any termination, it shall reasonably cooperate in any Proceeding arising in connection with this Agreement, the Indenture or any of the Assets (excluding any such Proceeding in which claims are asserted against the Collateral Manager) upon receipt of appropriate indemnifications and expense reimbursement.
Section 18. Use of Name; Reference to Collateral Manager.
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Section 19. Assignments. (a) Assignment by the Collateral Manager with Consent. Subject to Section 2(h) and except as provided in Section 19(b), (c) and (d), the Collateral Manager may not assign any of its rights or responsibilities under this Agreement without obtaining (x) satisfaction of the S&P Rating Condition and (y) the written consent of the Issuer. No delegation or assignment shall be effective unless such delegation or assignment does not cause the Issuer to be treated as a publicly traded partnership taxable as a corporation for
U.S. federal income tax purposes or otherwise cause the Issuer to be subject to U.S. federal, state or local income tax on a net basis (including any tax imposed under Section 1446 of the Code).
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Section 20. Notices. Unless expressly provided otherwise herein, all notices, requests, demands and other communications required or permitted under this Agreement shall be in writing (including by telecopy or by e-mail) and shall be deemed to have been duly given, made and received when delivered against receipt or upon actual receipt of registered or certified mail, postage prepaid, return receipt requested, or, in the case of notice by facsimile or electronic mail, when received in legible form (as evidenced by the sender’s written record of a telephone call to the recipient in which the recipient acknowledged receipt of such facsimile or electronic mail message), in each case addressed as set forth below:
BDT & MSD Partners
1 Vanderbilt Ave, 26th Floor
New York, NY 10017-5407
Telephone: +1 212-303-1650
Email: bsimonds@bdtmsd.com
Attention: Bob Simonds, Partner & General Counsel
BDT & MSD Partners
1 Vanderbilt Ave, 26th Floor
New York, NY 10017-5407
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Telephone: +1 212-303-1650
Email: bsimonds@bdtmsd.com
Attention: Bob Simonds, Partner & General Counsel
Any party may alter the address, telecopy number or email address to which communications or copies are to be sent by giving notice to the other parties of such change in conformity with the provisions of this Section 20 or the Indenture, as applicable, for the giving of notice.
Section 21. Binding Nature of Agreement; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns as provided herein.
Section 22. Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.
Section 23. Amendment. This Agreement may be modified or amended only by an agreement in writing by the parties hereto and upon receipt of (x) satisfaction of the S&P Rating Condition and (y) the prior written consent of a Majority of each Class of Notes materially and adversely affected thereby (such determination to be made in the same manner as determining whether an amendment to the Indenture materially and adversely affects the Notes of a Class). Notwithstanding the foregoing, the parties hereto, without the consent of any Holders, but with prior written notice to the Rating Agency, may amend or modify any provision of this agreement to (i) reflect a change that is of an inconsequential nature, (ii) correct inconsistencies, typographical or other errors, defects or ambiguities, (iii) conform this Agreement to the Offering Circular or the Indenture (as it may be amended from time to time) or (iv) reflect a change that is necessary or desirable to conform to the Collateral Manager’s policies described in its Form ADV from time to time or to satisfy or conform to any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation (including, without limitation, ERISA, the Code, the Advisers Act, the Securities Act, the Exchange Act and the 1940 Act) of any U.S. federal or state agency or contained in any U.S. federal or state statute, including to better enable compliance with any risk retention regulations.
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Section 24. Conflict with the Indenture. In the event that this Agreement requires any action to be taken by the Issuer with respect to any matter and the Indenture requires that a different action be taken by the Issuer with respect to such matter, and such actions are mutually exclusive, the provisions of the Indenture in respect thereof shall control.
Section 25. Subordination and Assignment. The Collateral Manager agrees that the payment of all amounts to which it is entitled pursuant to this Agreement shall be subordinated to the extent set forth in, and the Collateral Manager agrees to be bound by the provisions of, Article XI of the Indenture and each of the Collateral Manager and Issuer hereby consents to the assignment of this Agreement as provided in Section 15.1 of the Indenture.
Section 26. Governing Law; Submission to Jurisdiction; Venue, etc. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
With respect to Proceedings relating to this Agreement, each party irrevocably (i) submits to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.
THE PARTIES HERETO IRREVOCABLY CONSENT TO THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING OR DELIVERY OF COPIES OF SUCH PROCESS TO EACH SUCH PARTY AT THE ADDRESS SPECIFIED IN SECTION 20 (INCLUDING BY REFERENCE TO THE INDENTURE) OF THIS AGREEMENT. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
Section 27. Indulgences Not Waivers. Neither the failure nor any delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
Section 28. Titles Not to Affect Interpretation. The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.
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Section 29. Execution in Counterparts. This Agreement may be executed in any number of counterparts by scanned signature, facsimile or other written form of communication, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Any signature to this Agreement may be delivered by facsimile, electronic mail (including pdf) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the fullest extent permitted by applicable law. Each of the parties represents and warrants to the other parties that it has the corporate or other capacity and authority to execute this Agreement through electronic means and there are no restrictions for doing so in that party's constitutive documents.
Section 30. Provisions Separable. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. If any provision of this Agreement, or the application of any provision to any person or circumstance, shall be held to be inconsistent with any present or future law, ruling, rule, or regulation of any court or governmental or regulatory authority having jurisdiction over the subject matter hereof, such provision shall be deemed to be rescinded or modified in accordance with such law, ruling, rule, or regulation, and the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it shall be held inconsistent, shall not be affected thereby.
Section 31. Number and Gender. Words used herein, regardless of the number and gender specifically used, will be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.
Section 32. Written Disclosure Statement. The Issuer acknowledges receipt of Part 2 of the Collateral Manager’s Form ADV filed with the Securities and Exchange Commission, as required by Rule 204-3 under the Advisers Act, more than 48 hours’ prior to the date of execution of this Agreement.
Section 33. Non Recourse. Notwithstanding any other provision of this Agreement to the contrary, no recourse shall be had for the payment of any amount owing in respect of this Agreement against any officer, director, employee, stockholder or incorporator of the Issuer. All obligations of the Issuer under this Agreement shall constitute limited recourse obligations of the Issuer. Recourse in respect of any obligations of the Issuer hereunder shall be limited to the Assets distributed in accordance with the Priority of Payments. Upon the exhaustion of the Assets, all remaining claims against the Issuer arising from this Agreement or any transaction contemplated hereby shall be extinguished and shall not thereafter revive.
Section 34. Attorney-in-Fact. To the extent necessary or appropriate to perform its duties hereunder, the Collateral Manager shall have the power to execute and deliver all necessary and appropriate documents and instruments in the name and on behalf of the Issuer with respect thereto. The Issuer hereby delegates to the Collateral Manager all powers, duties and
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responsibilities with regard to the management and administrative services to be provided to the Issuer as contemplated by Sections 2 and 3. In furtherance of the foregoing, the Issuer hereby makes, constitutes and appoints the Collateral Manager, with full power of substitution (any person in favor of which such power of substitution shall be exercised being referred to as a “Subattorney”), as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead (a) to sign, execute, certify, swear to, acknowledge, deliver, file, receive and record any and all documents (including tax documents and documents in connection with compliance with any applicable implementing legislation in any relevant jurisdiction), and to make any payment, which the Collateral Manager reasonably deems necessary or appropriate in connection with its duties under this Agreement and (b) to (1) vote in its discretion any Assets, (2) execute proxies, waivers, consents and other instruments with respect to such Assets, (3) endorse, transfer or deliver such investments, (4) participate in or consent (or decline to consent) to any modification, work-out, restructuring, bankruptcy proceeding, winding-up, class action, plan or reorganization, merger, combination, consolidation, liquidation or similar plan or transaction with regard to such investments and (5) exercise the rights and remedies of the Issuer under the hedge agreements, if any. This grant of power of attorney is coupled with an interest and, to the extent permitted by applicable law, irrevocable, and it shall survive and not be affected by the subsequent dissolution or bankruptcy of the Issuer; provided, however, that this grant of power of attorney shall expire, and the Collateral Manager and any Subattorney shall cease to have any power to act as the Issuer’s agent or attorney-in-fact, upon termination of this Agreement or, in the case of a Collateral Manager that has resigned or that has been removed, as applicable, under the terms hereunder, upon the effectiveness of such resignation or removal. Each of the Collateral Manager and the Issuer shall take such other actions, and furnish such certificates, opinions and other documents, as may be reasonably requested by the other party hereto in order to effectuate the purposes of this Agreement and to facilitate compliance with applicable laws and regulations and the terms of this Agreement.
Section 35. Confidential Information. The Collateral Manager and the Issuer shall each keep confidential any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information to non-affiliated third parties except (i) with the prior written consent of the Issuer or the Collateral Manager (as applicable), (ii) as required by law, regulation, court order, request by a governmental or self-regulatory agency with jurisdiction over the Collateral Manager or the Issuer, as applicable, or the rules or regulations of any self-regulating organization, body or official having jurisdiction over the Collateral Manager, or the Issuer, as applicable, (iii) to its members, partners, principals, directors, officers, agents, employees, managers, accountants, attorneys and other professional advisers, and to any third party that it may from time to time employ or to which it may from time to time delegate some of its obligations hereunder, and to the Collateral Administrator, (iv) as required under the terms of the Indenture, (v) such information as a Rating Agency shall reasonably request in connection with the rating of any of the Notes, for so long as such Class of Notes is outstanding and is rated by such Rating Agency, (vi) to potential buyers in connection with the sale of Notes or (vii) such information as shall have been publicly disclosed other than in violation of this Agreement or the Indenture or shall have been obtained by the Collateral Manager or the Issuer, as applicable, on a non-confidential basis. Notwithstanding the foregoing, it is agreed that the Collateral Manager may disclose (1) that it is serving as collateral manager of the Issuer, (2) the aggregate principal amount of the Issuer’s assets, (3) the internal rate of return generated with respect to the Issuer’s assets and (4) such other information about the Issuer, the Assets and the Notes as is customarily
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disclosed by managers of similarly situated collateralized loan obligation funds. For purposes of this Section 35, none of the Holders shall in any event be considered “non-affiliated third parties”.
Section 36. Intellectual Property. The Issuer agrees that all work product resulting from the services performed by the Collateral Manager related to the services provided to the Issuer hereunder, which the Collateral Manager or its employees, consultants or other Personnel made, make, conceived or conceive (either solely or jointly with others) in connection with and during the term of this Agreement (collectively, “New Materials”) shall be deemed to be created and prepared as, and shall therefore constitute, a “work made for hire” by the Collateral Manager as the “author” and owner to the extent permitted by United States copyright law. To the extent (if any) that any New Materials may be deemed not to constitute a “work made for hire,” the Issuer hereby agrees that this Agreement shall automatically constitute an irrevocable assignment from the Issuer to the Collateral Manager for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, of all rights, title and interest to such New Materials. The Collateral Manager shall exclusively own, and is perpetually and irrevocably entitled to, all right, title and interest now or hereafter provided by law in and to the New Materials throughout the universe in perpetuity in any and all media whether now known or hereafter developed (including, without limitation, any and all registrations, applications, copyright rights, renewals, extensions, restorations and reversions, patent rights, trade secret rights, trademark rights and all other proprietary and intellectual property rights in or relating to the New Materials), as well as the right to collect all royalties and income generated therefrom and the right to sue, counterclaim and recover for all past, present and future violations thereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
MSD PARTNERS, L.P. | ||
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| as Collateral Manager |
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|
|
By |
| MSD PARTNERS (GP), LLC |
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| its General Partner |
|
|
|
|
|
|
By: |
| \s\ Marcello Liguori |
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| Name: Marcello Liguori |
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| Title: Vice President |
[Signature Page to Collateral Management Agreement]
MSD BDC CLO I, LLC | ||
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| as Issuer |
|
|
|
By |
| MSD INVESTMENT CORP. |
|
| its sole Member |
|
|
|
|
|
|
By: |
| \s\ Marcello Liguori |
|
| Name: Marcello Liguori |
|
| Title: Authorized Signatory |
[Signature Page to Collateral Management Agreement]
LIST OF DEFINED TERMS INDEX
Advisers Act | 1 |
| Indemnified Party | 2 |
Affiliate Transaction | 1 |
| Indemnifying Party | 3 |
Agreement | 2 |
| Indenture | 1, 3 |
Base Management Fee | 2 |
| Issuer | 1, 3 |
Client | 2 |
| Losses | 3 |
Collateral Management Fees | 2 |
| New Materials | 31 |
Collateral Manager | 1 |
| Notes | 3 |
Collateral Manager Breach | 2 |
| Personnel | 3 |
Collateral Manager Information | 2 |
| Subattorney | 30 |
Cross Transactions | 2 |
| Subordinated Management Fee | 3 |
Firm | 2 |
| Supermajority | 3 |
Incentive Management Fee | 2 |
| Transaction | 3 |