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EXHIBIT 10.2
AMENDMENT NO. 1 TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment No. 1") is made this 24th day of September, 1999, by and among
MARKETING SPECIALISTS CORPORATION ("Borrower"); the Lenders under the Credit
Agreement described below, and FIRST UNION NATIONAL BANK, as Agent ("Agent")
for the Lenders.
W I T N E S S E T H:
WHEREAS, Borrower is party to that certain Amended and Restated Credit
Agreement dated December 18, 1998, as amended and restated August 18, 1999 (as
amended from time to time, the "Credit Agreement") with the lenders identified
therein ("Lenders") and Agent; and
WHEREAS, Borrower and Lenders desire to amend certain financial
covenants and related provisions of the Credit Agreement, as set forth herein,
subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereto hereby
agree as follows:
1. Definitions.
a. General Rule. Unless otherwise defined herein, terms used
herein which are defined in the Credit Agreement shall have the meanings
assigned to them in the Credit Agreement.
b. Additional Definition. The following definition is hereby
added to Section 1 of the Credit Agreement to read in its entirety as follows:
"Amendment No. 1" means Amendment No. 1 to Amended and
Restated Credit Agreement, by and among Borrower, Lenders and Agent.
c. Amended Definition. The following definition set forth in
Section 1 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
"Adjusted Rolling Period" means (i) as of March 31, 1999, the
one (1) fiscal quarter then ended; (ii) as of June 30, 1999, the two
(2) fiscal quarters then ended; (iii) as of September 30, 1999, the
three (3)
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fiscal quarters then ended; and (iv) thereafter, the most recent
Rolling Period.
2. Amendment to Paragraph 5.4 (Compliance Certificate). The
following sentence is hereby added to the end of Paragraph 5.4 of the Credit
Agreement:
At the time of delivery of financial statements pursuant to Paragraph
5.2(a), deliver to Lenders a certificate in the form of Exhibit 1 to
Amendment No. 1 executed by the chief financial officer of Borrower or
other Authorized Officer approved by Agent, showing the calculation of
the covenant set forth in Paragraph 5.16(b).
3. Amendment to Paragraph 5.16 (Minimum EBITDA). Paragraph 5.16
of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:
5.16. Minimum EBITDA.
(a) Maintain as of the last day of each fiscal quarter during
the period set forth in the left-hand column below EBITDA of Borrower
and its consolidated Subsidiaries for the periods specified of not
less than the amount set forth in the right-hand column below:
Period Amount
(in thousands)
--------------
9/30/99, for the most recent Rolling Period $45,000
12/31/99, for the most recent Rolling Period 41,100
3/31/00, for the most recent Rolling Period 41,100
6/30/00, for the most recent Rolling Period 41,100
9/30/00, for the most recent Rolling Period 41,100
12/31/00, for the most recent Rolling Period 41,100
3/31/01, for the most recent Rolling Period 41,100
6/30/01, for the most recent Rolling Period 41,100
9/30/01, for the most recent Rolling Period 41,100
12/31/01 and thereafter, for the most
recent Rolling Period 41,100
(b) Maintain as of the last day of each month set forth in
the left-hand column below EBITDA of Borrower and its consolidated
Subsidiaries for the periods specified of not less than the amount set
forth in the right-hand column below:
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Period Amount
(in thousands)
--------------
10/31/99, for the most recent one month $ 2,000
11/30/99, for the most recent two months 4,000
12/31/99, for the most recent three months 10,500
1/31/00, for the most recent one month 2,000
2/29/00, for the most recent two months 5,000
3/31/00 and each month end thereafter, for
the most recent three months 10,500
(c) In connection with any acquisition which may be approved
by Lenders pursuant to Paragraph 6.8, the minimum amounts of EBITDA
required pursuant to this Paragraph 5.16 shall be increased by amounts
reasonably determined by Required Lenders based on the EBITDA of the
acquired business (including as adjusted for any pro forma adjustments
approved by Required Lenders).
4. Amendment to Paragraph 5.17 (Minimum Debt Service Coverage
Ratio). Paragraph 5.17 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
5.17 Minimum Debt Service Coverage Ratio. Maintain as of the
last day of each fiscal quarter set forth in the left-hand column
below a ratio of Adjusted EBITDA to Debt Service for Borrower and its
consolidated Subsidiaries for the most recent Adjusted Rolling Period
of not less than the ratio set forth in the right hand column below:
Period Ended Ratio
------------ -----
9/30/99 0.80 to 1
12/31/99 0.90 to 1
3/31/00 and each fiscal quarter thereafter 2.00 to 1
5. Amendment to Paragraph 5.18 (Minimum Fixed Charge Coverage
Ratio). Paragraph 5.18 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
5.18 Minimum Fixed Charge Coverage Ratio. Maintain as of the
last day of each fiscal quarter set forth in the left-hand column
below a ratio of Adjusted EBITDA to Fixed Charges for Borrower and its
consolidated Subsidiaries for the most recent Adjusted Rolling Period
of not less than the ratio set forth in the right hand column below:
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Period Ended Ratio
------------ -----
9/30/99 0.80 to 1
12/31/99 0.80 to 1
3/31/00 and each fiscal quarter thereafter 1.10 to 1
6. Representations. Borrower hereby represents and warrants to
Agent and the Lenders that:
a. The representations and warranties set forth in the Credit
Agreement and each of the other Loan Documents are true and correct in all
material respects as of the date hereof, and there is no Event of Default or
Default under the Credit Agreement.
b. Borrower has the power and authority under the law of the
jurisdiction of its formation and under its organizational documents to enter
into and perform this Amendment No. 1 and the other documents and agreements
required hereunder (collectively, the "Amendment Documents"); all actions
(corporate or otherwise) necessary or appropriate for the execution and
performance by Borrower of the Amendment Documents have been taken; and the
Amendment Documents, the Credit Agreement as amended, and the Collateral
Security Documents each constitute the valid and binding obligations of
Borrower and each Guarantor, to the extent it is a party thereto, enforceable
in accordance with their respective terms.
c. The making and performance of the Amendment Documents by
Borrower will not violate any provisions of any law or regulation, federal,
state or local, or the organizational documents of Borrower, or result in any
breach or violation of, or constitute a default or require the obtaining of any
consent under, any agreement or instrument by which Borrower, or its or their
property, may be bound.
7. Effectiveness This Amendment No. 1 shall be effective upon
receipt by Agent of the following documents, in form and substance satisfactory
to Agent:
a. This Amendment No. 1, duly executed by Borrower and
Required Lenders and acknowledged and agreed to by the Guarantors.
b. Such other documents as Agent may reasonably require.
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8. Miscellaneous.
a. Borrower agrees to pay or reimburse Agent for all
reasonable and necessary fees and expenses (including without limitation
reasonable fees and expenses of counsel) incurred by Agent in connection with
the preparation, execution and delivery of this Amendment No. 1.
b. This Amendment No. 1 shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
c. All terms and provisions of this Amendment No. 1 shall be
for the benefit of and be binding upon and enforceable by the respective
successors and assigns of the parties hereto.
d. This Amendment No. 1 may be executed in any number of
counterparts with the same effect as if all the signatures on such counterparts
appeared on one document and each such counterpart shall be deemed an original.
e. Except as expressly set forth herein, the execution,
delivery and performance of this Amendment No. 1 shall not operate as a waiver
of any right, power or remedy of Agent or Lenders under the Credit Agreement
and the agreements and documents executed in connection therewith or constitute
a waiver of any provision thereof. Without limiting the foregoing, Borrower
expressly confirms that the Credit Agreement, as amended, and the Collateral
Security Documents each remain in full force and effect, and the Collateral
Security Documents continue to secure all obligations under the Credit
Agreement, as amended.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1
the day and year first above written.
Attest: MARKETING SPECIALISTS CORPORATION
By: /s/ XXXXXXX X. GOLD By: /s/ XXXXXX X. XXXXX
------------------------------ ---------------------------------
Name: Name:
Title: Title:
FIRST UNION NATIONAL BANK, as Lender
and as Agent
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name:
Title:
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The undersigned Guarantors hereby acknowledge and agree to the
foregoing Amendment No. 1 and confirm that the Guaranty and the other Loan
Documents to which they are a party remain in full force and effect and
continue to secure all obligations under the Credit Agreement, as amended.
Attest: XXXXXXX AMERICAN CO., INC.
By: /s/ XXXXXXX X. GOLD By: /s/ XXXXXX X. XXXXX
--------------------------- --------------------------------
Name: Name:
Title: Title:
Attest: BUCKEYE SALES & MARKETING, INC.
By: /s/ XXXXXXX X. GOLD By: /s/ XXXXXX X. XXXXX
--------------------------- --------------------------------
Name: Name:
Title: Title:
Attest: UNITED BROKERAGE COMPANY
By: /s/ XXXXXXX X. GOLD By: /s/ XXXXXX X. XXXXX
--------------------------- --------------------------------
Name: Name:
Title: Title:
Attest: MARKETING SPECIALISTS SALES COMPANY
By: By: /s/ XXXX XXXXXX
--------------------------- --------------------------------
Name: Name:
Title: Title:
Attest: ATLAS MARKETING COMPANY, INC.
By: By: /s/ XXXX XXXXXX
--------------------------- --------------------------------
Name: Name:
Title: Title:
[EXECUTIONS CONTINUED]
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Attest: BROMAR, INC.
By: By: /s/ XXXX XXXXXX
--------------------------- --------------------------------
Name: Name:
Title: Title:
Attest: BROKERAGE SERVICES, INC.
By: By:
--------------------------- --------------------------------
Name: Name:
Title: Title:
Attest: MEATMASTER BROKERAGE, INC.
By: By:
--------------------------- --------------------------------
Name: Name:
Title: Title:
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EXHIBIT 1
FORM OF MONTHLY COMPLIANCE CERTIFICATE (MINIMUM EBITDA)
In accordance with the Credit Agreement dated December 18, 1998, as
amended and restated August 18, 1999 (as amended and as may be further amended
from time to time, the "Credit Agreement"), by and among MARKETING SPECIALISTS
CORPORATION ("Borrower"), the Lenders described therein, and FIRST UNION
NATIONAL BANK, as Agent for Lenders, the undersigned hereby certifies as
follows:
1. Enclosed herewith are the financial statements for Borrower and its
consolidated Subsidiaries as required pursuant to Paragraph 5.2(a) of the
Credit Agreement for the month ended ____________, ____, which financial
statements were prepared in accordance with GAAP (except that interim
statements do not contain footnotes and are subject to year-end adjustments)
consistently applied and fairly present in all material respects the financial
condition and results of operations of Borrower and its consolidated
Subsidiaries as of the date and for the period covered.
2. There exists no Event of Default or Default under the Credit
Agreement, except as described in Item 3 below.
3. The following event or circumstance, is, or with the passage of
time or giving of notice will be, a Default or an Event of Default under the
Credit Agreement:
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4. The following actions are being taken with respect to the matter(s)
identified in Item 3 above:
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5. Attached hereto as Schedule 1 are the undersigned's calculations of
the covenant set forth in Paragraph 5.16(b) of the Credit Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement.
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IN WITNESS WHEREOF, the undersigned has executed this certificate this
__ day of ____________, ____.
MARKETING SPECIALISTS CORPORATION
By:
--------------------------------------
Name:
Title: Chief Financial Officer(1)
--------
(1) May be signed by an Authorized Officer other than the Chief
Financial Officer with the approval of Agent.
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SCHEDULE 1
EBITDA to be calculated for one, two or three months, as provided in Paragraph
5,16(b).
Month Month Month
Ended Ended Ended TOTAL
______, ___ _______, ___ _______,__ ----------
Net Income: $ $ $ $
----------- ----------- ----------- ----------
Less extra-
ordinary gains: $ $ $ $
----------- ----------- ----------- ----------
Plus
Interest
Expense: $ $ $ $
----------- ----------- ----------- ----------
Taxes: $ $ $ $
----------- ----------- ----------- ----------
Depreciation
and
Amortization: $ $ $ $
----------- ----------- ----------- ----------
Non-cash charges
to income: $ $ $ $
----------- ----------- ----------- ----------
Equals
EBITDA: $ $ $ $
----------- ----------- ----------- ----------
Covenant: As of the month-end set forth in the left-hand column below, EBITDA
for the specified period must be greater than or equal to the amount
set forth in the right-hand column below:
Period Amount
------ ------
(in thousands)
--------------
10/31/99, for the most recent one month $ 2,500
11/30/99, for the most recent two months 6,000
12/31/99, for the most recent three months 10,500
1/31/00, for the most recent one month 2,500
2/29/00, for the most recent two months 6,000
3/31/00 and each month end thereafter, for
the most recent three months 10,500
Compliance: YES NO
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