MDC PARTNERS INC. (NASDAQ:MDCA) Files An 8-K Entry into a Material Definitive Agreement

MDC PARTNERS INC. (NASDAQ:MDCA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry Into a Material Definitive Agreement.

Amendment to Credit Agreement

On May 29, 2020 (the “Effective Date”), MDC Partners Inc. (the “Company”), Maxxcom Inc., a subsidiary of the Company (“Maxxcom”), and each of their subsidiaries party thereto entered into an amendment (the “Second Amendment”) to the existing senior secured revolving credit facility, dated as of May 3, 2016 (as amended by that certain Consent and First Amendment dated as of March 12, 2019, the “Credit Agreement”), among the Company, Maxxcom, each of their subsidiaries party thereto, Wells Fargo Capital Finance, LLC, as agent (“Wells Fargo”), and the lenders from time to time party thereto. Capitalized terms used herein and not otherwise defined have the meanings set forth in the Second Amendment (including the Credit Agreement attached to the Second Amendment as Annex A), which is filed as Exhibit 10.1 to this Form 8-K.

The Second Amendment extends the maturity date of the Credit Agreement from May 3, 2021 to February 3, 2022 and expands the eligibility criteria for certain of the Company’s receivables to be included in the borrowing base. In connection with the Second Amendment, each of Wells Fargo, JPMorgan Chase Bank, N.A. and Citizens Bank, National Association maintained their respective commitment levels while total commitments under the facility were reduced from $250,000,000 to $211,500,000 as two smaller lenders exited the group. As a result of the expanded borrowing base definition, the Second Amendment may have the effect of increasing availability from time to time.

As of the Effective Date, the Company’s cash on hand exceeded its borrowings under the facility.

As amended by the Second Amendment, the Non-Prime Rate Margin and Prime Rate Margin applicable to Advances under the Credit Agreement will be based on a total leverage ratio grid and re-determined as of the first day of each quarter. The applicable margin will range from 2.50% to 3.00% for Non-Prime Rate Loans and from 1.75% to 2.25% for Prime Rate Loans. As of the date hereof, the Non-Prime Rate Margin and the Prime Rate Margin are 2.75% and 2.00%, respectively. The Second Amendment also contains a one percent (1.00%) floor on the LIBOR Rate and a mechanism for replacement of the LIBOR Rate.

As amended by the Second Amendment, the Credit Agreement requires that the Company achieve a minimum EBITDA (as defined), measured on a quarter-end basis, of at least $120,000,000 for the 12-month period ending on the last day of each calendar quarter. In addition, from and after the Effective Date, the Second Amendment limits the Company’s ability to make certain restricted junior payments.

The foregoing summary description of the Second Amendment to the Credit Agreement is qualified in its entirety by reference to the full text of the amendment. The Second Amendment (including Annex A thereto) is filed as Exhibit 10.1 hereto and incorporated by reference herein.

Item 8.01 Other Events

On June 1, 2020, the Company issued a press release announcing its entry into the Second Amendment to the Credit Agreement. A copy of that press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

10.1 Second Amendment, dated as of May 29, 2020, to the Second Amended and Restated Credit Agreement, dated as of May 3, 2016, among the Company, Maxxcom Inc., each of their subsidiaries party thereto, Wells Fargo Capital Finance, LLC, as agent and the lenders from time to time party thereto.

99.1 Press release dated June 1, 2020.


MDC PARTNERS INC Exhibit
EX-10.1 2 tm2021409d1_ex10-1.htm EXHIBIT 10.1   Exhibit 10.1   SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT   THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment"),…
To view the full exhibit click here

Story continues below

About MDC PARTNERS INC. (NASDAQ:MDCA)

MDC Partners Inc. is a provider of marketing, advertising, activation, communications and strategic consulting solutions. The Company’s segment is Advertising and Communications. It operates through a network of Partner Firms. The Advertising and Communications segment consists of integrated marketing consulting services to Partner Firms that offers advertising, marketing, media, communications solutions, and specialized consumer insights and analytics, including global advertising and marketing services; media buying, planning and optimization; interactive and mobile marketing; direct marketing; public relations; corporate communications; market research; corporate identity and branding services; sales promotion; the design, development, research and implementation of consumer services, and direct marketing services. In addition, certain firms also provide consumer activation services, investor relation services and/or general public insights.

An ad to help with our costs