MDC Partners Inc. 11% Senior Notes due 2016 unconditionally guaranteed as to the payment of principal, premium, if any, and interest by the Guarantors listed in Schedule IV hereto
Exhibit
1.1
EXECUTION
COPY
11%
Senior Notes due 2016
unconditionally
guaranteed as to the payment of principal, premium,
if
any, and interest by
the
Guarantors listed in Schedule IV hereto
October
20, 2009
Xxxxxxx,
Xxxxx & Co.,
As
representative of the several Purchasers
named in
Schedule I hereto,
c/x
Xxxxxxx, Xxxxx & Co.,
00 Xxxxx
Xxxxxx,
New York,
New York 10004.
Ladies
and Gentlemen:
MDC
Partners Inc., a corporation continued under the laws of Canada (the “Company”),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the “Purchasers”), for whom you
are acting as representative, an aggregate of $225,000,000 principal amount of
its 11% Senior Notes due 2016 (the “Notes”). The Notes will be
unconditionally guaranteed as to the payment of principal, premium, if any, and
interest (the “Guarantees”) by the guarantors listed in Schedule IV hereto (the
“Guarantors”). The Notes and the Guarantees are hereinafter
collectively called the “Securities”. The Securities are to be issued
pursuant to an indenture to be dated as of October 23, 2009 (the “Indenture”)
among the Company, the Guarantors and The Bank of New York Mellon, as Trustee
(the “Trustee”).
1. Each
of the Company and the Guarantors, jointly and severally, represents and
warrants as of the Applicable Time and the Time of Delivery (each as defined
below) to, and agrees with, each of the Purchasers that:
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(a)
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A
preliminary offering circular, dated October 19, 2009 (the “Preliminary
Offering Circular”) and an offering circular,
dated October 20, 2009 (the “Offering Circular”), have been prepared in
connection with the offering of the Securities. The Preliminary Offering Circular,
as amended and supplemented immediately prior to the Applicable Time (as
defined in Section 1(b)) is hereinafter referred to the “Pricing
Circular”. Any reference to the Preliminary Offering Circular,
the Pricing Circular or the Offering Circular
shall be deemed to refer to and include the Company’s Annual Report on
Form 10-K for the year ended December 31, 2008, the Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2009 and June 30, 2009, the
definitive Proxy Statement on Schedule 14A, filed with the United States
Securities and Exchange Commission (the “Commission”) on April 28, 2009,
and all other subsequent documents filed with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act
of 1934, as amended (the “Exchange Act”) on or prior to the date of the
Preliminary Offering Circular, the Pricing Circular or the Offering
Circular, as the case may be, and any reference to the Preliminary
Offering Circular, the Pricing Circular or the Offering Circular, as the
case may be, as amended or supplemented, as of any specified date, shall
be deemed to include (i) any documents filed with the Commission pursuant
to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the
Preliminary Offering Circular or the Offering Circular, as the case may
be, and prior to such specified date and (ii) any Additional Issuer
Information (as defined in Section 5(f)) furnished by the Company prior to
the completion of the distribution of the Securities; and all documents
filed under the Exchange Act and so deemed to be included in the
Preliminary Offering Circular, the Pricing Circular or the Offering
Circular, as the case may be, or any amendment or supplement thereto are
hereinafter called the “Exchange Act Reports”. The Exchange Act
Reports, when they were or are filed with the Commission, conformed or
will conform in all material respects to the applicable requirements of
the Exchange Act and the applicable rules and regulations of the
Commission thereunder; and no such documents were filed with the
Commission since the Commission’s close of business on the business day
immediately prior to the date of this Agreement and prior to the execution
of this Agreement, except as set forth on Schedule II(a) hereof. The
Preliminary Offering Circular or the Offering Circular
and any amendments or supplements thereto and the Exchange Act Reports did
not and will not, as of their respective dates, contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by a Purchaser through Xxxxxxx, Xxxxx & Co.
expressly for use therein;
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(b)
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For
the purposes of this Agreement, the “Applicable Time” is 1:45 pm (Eastern
time) on the date of this Agreement; the Pricing Circular as supplemented
by the information set forth in Schedule III hereto, taken together
(collectively, the “Pricing Disclosure Package”) as of the Applicable
Time, did not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and each Company Supplemental Disclosure Document (as defined
in Section 6(a)(i)) listed on Schedule II(b) hereto does not conflict
with the information contained in the Pricing Circular or the Offering
Circular and each such Company Supplemental Disclosure Document, as
supplemented by and taken together with the Pricing Disclosure Package as
of the Applicable Time, did not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that
this representation and warranty shall not apply to statements or
omissions made in a Company Supplemental Disclosure Document in reliance
upon and in conformity with information furnished in writing to the
Company by a Purchaser through Xxxxxxx, Xxxxx & Co. expressly for use
therein;
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(c)
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None
of the Company, the Guarantors or any of their respective subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Pricing Circular and the
Offering Circular any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Pricing Circular and the Offering Circular; and, since the respective
dates as of which information is given in the Pricing Circular and the
Offering Circular, there has not been any change in the capital stock
(other than issuances of capital stock pursuant to existing employment
agreements, stock option, restricted stock grant agreements, restricted
stock unit agreements and stock appreciation rights and other employee
benefit plans in the ordinary course of business or pursuant to earn-outs
or upon conversions of convertible securities, as disclosed in the Pricing
Circular and the Offering Circular) or long-term debt
of the Company, the Guarantors or any of their respective subsidiaries, or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders’ equity or results of operations of the
Company, the Guarantors and their respective subsidiaries, otherwise than
as set forth or contemplated in the Pricing Circular and the Offering
Circular;
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(d)
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The
Company, the Guarantors and their respective subsidiaries have good and
marketable title in fee simple to all real property (if any) and good and
marketable title to all personal property owned by them, in each case free
and clear of all liens, encumbrances and defects except such as are
described in the Pricing Circular and the Offering Circular, or such
liens, encumbrances and defects which would not reasonably be expected to
have a material adverse effect on the current or future condition
(financial or otherwise), business or results of operations of the Company
and its subsidiaries, taken as a whole (“Material Adverse Effect”); and
any real property, equipment and buildings held under lease by, the
Guarantors and their respective subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions which would not
reasonably be expected to have a Material Adverse Effect and do not
interfere with the use made and proposed to be made of such property,
equipment and buildings by them;
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(e)
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The
Company has been continued and is validly existing as a corporation in
good standing under the laws of Canada, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Pricing Circular and the Offering Circular, and has been
duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification, except where the failure to be so qualified or be in
good standing would not reasonably be expected to have a Material Adverse
Effect; and each of the Company’s subsidiaries has been duly incorporated
or duly formed, as the case may be, and is validly existing as a
corporation or a limited liability company, as the case may be, in good
standing under the laws of its jurisdiction of incorporation or formation,
as the case may be, and has been duly qualified for the transaction of
business and is in good standing (where applicable) under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where the failure to
be so qualified or be in good standing would not reasonably be expected to
have a Material Adverse Effect;
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(f)
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Each
of the Guarantors has been duly incorporated or duly formed, as the case
may be, and is validly existing as a corporation or a limited liability
company, as the case may be, in good standing (where applicable) under the
laws of the jurisdiction of its incorporation or formation, as the case
may be, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Pricing Circular
and the Offering Circular, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing (where
applicable) under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified or be in good
standing would not reasonably be expected to have a Material Adverse
Effect;
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(g)
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The
Company had an authorized capitalization as set forth in the Pricing
Circular and the Offering Circular, and all of the issued shares of
capital stock of the Company and each of the Guarantors have been duly and
validly authorized and issued and are fully paid and non-assessable; and
all of the issued shares of capital stock of each subsidiary of the
Company and (except as otherwise set forth in the Pricing Circular and the
Offering Circular) are owned directly or indirectly by the Company or such
Guarantor, as the case may be, free and clear of all liens, encumbrances,
equities or claims other than such liens, encumbrances and claims which
would not reasonably be expected to have a Material Adverse
Effect;
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(h)
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The
Notes have been duly authorized and at the Time of Delivery, will have
been duly executed, authenticated, issued and delivered by the Company
and, when executed and authenticated by the Trustee in accordance with the
provisions of the Indenture and delivered to and paid for by the
Purchasers, will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture (subject, as to
the enforcement of remedies, to the effects of (x) bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or other
laws affecting creditors’ rights generally from time to time in effect,
(y) general principles of equity (whether considered in a proceeding in
equity or at law) and (z) an implied covenant of good faith and fair
dealing (collectively, the “Enforceability Limitations”)); the Guarantees
have been duly authorized and, pursuant to the terms of this Agreement at
the Time of Delivery, will have been duly executed, authenticated, issued
and delivered by each Guarantor and will constitute valid and legally
binding obligations of the Guarantors entitled to the benefits of the
Indenture (subject to the Enforceability Limitations); the Notes and the
Guarantees will rank equal in right of payment with all of the Company’s
and the Guarantors’ other unsecured and unsubordinated indebtedness; the
Indenture has been duly authorized and, when executed and delivered by the
Company, the Guarantors and the Trustee, the Indenture will constitute a
valid and legally binding instrument, enforceable in accordance with its
terms, (subject to the Enforceability Limitations) and the Securities and
the Indenture will conform in all material respects to the descriptions
thereof in the Pricing Disclosure Package and the Offering Circular
and will be in substantially the form previously delivered to
you;
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(i)
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The
Exchange and Registration Rights Agreement to be dated as of October 23,
2009 (the “Registration Rights Agreement”), which will be substantially in
the form previously delivered to you, has been duly authorized, and as of
the Time of Delivery, will have been duly executed and delivered by the
Company and the Guarantors, and will constitute a valid and legally
binding instrument enforceable in accordance with its terms (subject to
the Enforceability Limitations); and the Registration Rights Agreement
will conform in all material respects to the descriptions thereof in the
Pricing Disclosure Package and the Offering
Circular;
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(j)
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None
of the transactions contemplated by this Agreement (including, without
limitation, the use of the proceeds from the sale of the Securities by the
Company as described in the Pricing Disclosure Package and the Offering
Circular) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations T, U, and X of the Board of Governors of the
Federal Reserve System as the same is in effect at the Time of
Delivery;
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(k)
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Prior
to the date hereof, neither the Company nor any Guarantor, nor any of
their respective affiliates, has taken any action which is designed to or
which has constituted or which would have been expected to cause or result
in stabilization or manipulation of the price of any security of the
Company or any Guarantor in connection with the offering of the
Securities;
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(l)
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The
issue and sale of the Securities and the compliance by the Company and the
Guarantors with all of the provisions of the Securities, the Indenture,
the Registration Rights Agreement and this Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with
or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, (i) any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company, the
Guarantors or any of their respective subsidiaries is a party or by which
the Company, the Guarantors or any of their respective subsidiaries is
bound or to which any of the property or assets of the Company, the
Guarantors or any of their respective subsidiaries is subject, nor will
such action result in (ii) any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or the constitutive
documents of any Guarantor or (iii) any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company, the Guarantors or any of their respective subsidiaries
or any of their properties, except in the case of (i) or (iii) for any
default, breach, violation or conflict which would not reasonably be
expected to have a Material Adverse Effect, or would not have a material
adverse effect on the performance by the Company and the Guarantors of
their obligations under the Securities; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company or any Guarantor of the
transactions contemplated by this Agreement, the Indenture or the
Registration Rights Agreement, except for the filing of a registration
statement by the Company and the Guarantors with the Commission pursuant
to the United States Securities Act of 1933, as amended (the “Act”)
pursuant to the Registration Rights Agreement and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Purchasers or as shall
have been obtained or made prior to the Time of
Delivery;
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(m)
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None
of the Company, the Guarantors or any of their respective subsidiaries is
in violation of (i) its Certificate of Incorporation, charter or by-laws
or other equivalent constitutive documents or (ii) in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound, except in clause
(ii) for any such defaults that would not reasonably be expected to have a
Material Adverse Effect or would not have a material adverse effect on the
performance by the Company and the Guarantors of their obligations under
the Securities;
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(n)
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The
statements set forth in the Pricing Circular and the Offering Circular
under the caption “Description of the Notes”, insofar as they
purport to constitute a summary of the terms of the Securities and under the caption
“Certain Canadian and United States Tax Considerations”, insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair in all material
respects;
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(o)
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Other
than as set forth in the Pricing Circular and the Offering Circular, there
are no legal or governmental proceedings pending to which the Company, the
Guarantors or any of their respective subsidiaries is a party or of which
any property of the Company, the Guarantors or any of their respective
subsidiaries is the subject which, if determined adversely to the Company,
the Guarantors or any of their respective subsidiaries, would individually
or in the aggregate have a Material Adverse Effect, or would not have a
material adverse effect on the performance by the Company and the
Guarantors of their obligations under the Securities; and, to the
Company’s and the Guarantors’ knowledge, no such proceedings are
threatened by governmental authorities or
others;
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(p)
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Except
as described in the Pricing Circular and the Offering Circular, each of
the Company, the Guarantors and their respective subsidiaries possesses
such licenses, certificates, authorizations, approvals, franchises,
permits or other rights and all authorizations from all federal, state or
other governmental entities or agencies which have, or may at any time
have, jurisdiction over the activities of the Company, the Guarantors and
their respective subsidiaries or any successor to such authority, as are
currently necessary (i) to own its property and conduct in all material
respects the business now operated by it, (ii) for the Company and the
Guarantors to execute, deliver and perform this Agreement, the Indenture
and the Registration Rights Agreement and (iii) to consummate the
transactions contemplated hereby and thereby; except as described in the
Pricing Circular and the Offering Circular and except for the failure to
have any such permits or authorizations which would not reasonably be
expected to have a Material Adverse Effect, neither the Company, the
Guarantors nor any of their respective subsidiaries has received any
notice of proceedings or has knowledge that any proceedings are pending or
threatened, relating to the revocation or modification of any such
license, certificate, authorization, approval, franchise, permit or other
right which would reasonably be expected to have a Material Adverse
Effect, or would not have a material adverse effect on the performance by
the Company and the Guarantors of their obligations under the
Securities;
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(q)
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The
Company, the Guarantors and their respective subsidiaries own, or have
valid, binding and enforceable licenses or other rights to use, free and
clear of all liens, charges, claims, encumbrances, pledges, security
interests, defects and other like restrictions, all Intellectual Property
(as defined below) necessary to conduct the business of the Company, the
Guarantors and their respective subsidiaries in the manner presently
conducted, without any conflict with the rights of others, except for any
liens, charges or other restrictions which would not reasonably be
expected to have a Material Adverse Effect; “Intellectual Property” means
all patents, patent applications, trademarks, trademark applications,
trade names, service marks, service names, copyrights, trade secrets, know
how (including all unpatented or unpatentable proprietary or confidential
information, systems or procedures), technology, inventions, designs,
processes, methods, technical data and information or other intangible
intellectual property asset or other proprietary intellectual
property;
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(r)
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All
income tax returns of the Company, the Guarantors and their respective
subsidiaries required by law to be filed have been filed and all taxes
shown on such returns or otherwise assessed which are due and payable have
been paid, except tax assessments against which appeals have been or will
be promptly taken and as to which adequate reserves have been provided,
except insofar as the failure to file such returns or pay such taxes would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and the charges, accruals and reserves on the
books of the Company, the Guarantors and their respective subsidiaries in
respect of any income, sales and corporation tax liability for any years
not finally determined are adequate to meet any assessments or
re-assessments for additional tax for any years not finally determined,
except to the extent that any inadequacy would not have reasonably be
expected to have a Material Adverse Effect on the Company, the Guarantors
and their respective subsidiaries taken as a
whole;
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(s)
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When
the Securities are issued and delivered pursuant to this Agreement and the
Indenture, the Securities will not be of the
same class (within the meaning of Rule 144A under the Act) as securities
which are listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a
U.S. automated inter-dealer quotation
system;
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(t)
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The
Company is subject to and in compliance with the requirements of Section
13 or 15(d) of the Exchange Act; and the Company is a reporting issuer not
in default for purposes of the Securities Act (Ontario), the Securities
Act (Quebec) and the corresponding provisions of the other Canadian
securities laws in Canadian jurisdictions that recognize the concept of
reporting issuer status;
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(u)
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Neither
the Company nor any Guarantor is, nor after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
contemplated by the Pricing Circular and the Offering Circular will be, an
“investment company”, as such term is defined in the United States
Investment Company Act of 1940, as amended (the “Investment Company
Act”);
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(v)
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Assuming
the accuracy of the representations and warranties of the Purchasers
contained in Section 2, none of the Company, the Guarantors, or any
affiliate of the Company or the Guarantors, nor any person acting on its
or their behalf, has offered or sold the Securities by means of any
general solicitation or general advertising within the meaning of Rule
502(c) under the Act or, with respect to Securities sold outside the
United States to non-U.S. persons (as defined in Rule 902 under the Act),
by means of any directed selling efforts within the meaning of Rule 902
under the Act; and the Company, the Guarantors, each affiliate of the
Company and the Guarantors, and any person acting on its or their behalf
has complied with and will implement the “offering restriction” within the
meaning of such Rule 902;
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(w)
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It
is not necessary in connection with the offer, sale and delivery of the
Securities to the Purchasers in the manner contemplated by this Agreement
to register the Securities under the Act or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended, except pursuant to the
requirements of the Registration Rights
Agreement;
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(x)
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Within
the preceding six months, neither the Company, the Guarantors nor any
other person acting on behalf of the Company or the Guarantors has offered
or sold to any person any Securities, or any securities of the same or a
similar class as the Securities, other than Securities offered or sold to
the Purchasers hereunder. The Company and the Guarantors will
take reasonable precautions designed to insure that any offer or sale,
direct or indirect, in the United States or to any U.S. person (as defined
in Rule 902 under the Act) of any Securities or any substantially similar
security issued by the Company or the Guarantors, within six months
subsequent to the date on which the distribution of the Securities has
been completed (as notified to the Company by Xxxxxxx, Xxxxx & Co.),
is made under restrictions and other circumstances reasonably designed not
to affect the status of the offer and sale of the Securities in the United
States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the
Act;
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(y)
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The
Company maintains a system of internal control over financial reporting
(as such term is defined in Rule 13a-15(f) of the Exchange Act) that
complies with the requirements of the Exchange Act and has been designed
by the Company’s principal executive officer
and principal financial officer, or under their supervision, to provide reasonable
assurance regarding the reliability of
financial reporting and the preparation of financial statements
for external purposes in accordance with generally
accepted accounting principles. The Company’s internal control over financial
reporting as of December 31, 2008, the last date as of which such control
was evaluated, was effective, and the Company is not aware of any material
weaknesses in its internal control over financial reporting as of the date
hereof;
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(z)
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Since
the date of the latest audited financial statements included or
incorporated by reference in the Pricing Circular, there has been (i) no
material weakness in the Company’s internal control over financial
reporting (whether or not remediated) and (ii) no change in the Company’s
internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, the Company’s internal control
over financial
reporting;
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(aa)
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The Company,
the Guarantors and their respective subsidiaries maintain a system of
“disclosure controls and procedures” (as such term is defined in Rule
13a-15(e) of the Exchange Act) that complies with the requirements of the
Exchange Act; such disclosure controls and procedures have been designed
to ensure that material information relating to the Company, the
Guarantors and their respective subsidiaries is made known to the
Company’s principal executive officer and principal financial officer by
others within those entities; the Company and its subsidiaries have
carried out evaluations of the effectiveness of their disclosure controls
and procedures as of the end of the Company’s last completed fiscal
quarter; and, as of such date, such disclosure controls and procedures
were effective;
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(bb)
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There
is and has been no material failure on the part of the Company and any of
the Company’s subsidiaries, and any of the Company’s directors or
officers, in their capacities as such, to comply with any provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in
connection therewith;
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(cc)
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BDO
Xxxxxxx, LLP, which has audited certain financial statements of the
Company and its subsidiaries, is an independent registered public
accounting firm as required by the Act and the rules and regulations of
the Commission thereunder;
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(dd)
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None
of the Company, the Guarantors or any their respective subsidiaries or
affiliates, nor, any director, officer, or employee, nor, to the Company’s
or any Guarantor’s knowledge, any agent or representative of the Company,
the Guarantors nor any their respective subsidiaries or affiliates, has
taken or will take any action in furtherance of an offer, payment, promise
to pay, or authorization or approval of the payment or giving of money,
property, gifts or anything else of value, directly or indirectly, to any
“government official” (including any officer or employee of a government
or government-owned or controlled entity or of a public international
organization, or any person acting in an official capacity for or on
behalf of any of the foregoing, or any political party or party official
or candidate for political office) to influence official action or secure
an improper advantage; and the Company, the Guarantors, their respective
subsidiaries and affiliates have conducted their businesses in compliance
with applicable anti-corruption laws and have instituted and maintain and
will continue to maintain policies and procedures designed to promote and
achieve compliance with such laws and with the representation and warranty
contained herein;
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(ee)
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The
operations of the Company, the Guarantors and their respective
subsidiaries are and have been conducted at all times in material
compliance with all applicable financial recordkeeping and reporting
requirements, including those of the Bank Secrecy Act, as amended by Title
III of the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA
PATRIOT Act”), and the applicable anti-money laundering statutes of
jurisdictions where the Company and its subsidiaries conduct business, the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Anti-Money Laundering Laws”), and
no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company, the
Guarantors or any of their respective subsidiaries with respect to the
Anti-Money Laundering Laws is pending or, to the knowledge of the Company
or any Guarantor, threatened;
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(ff)
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(i)
Neither the Company, the Guarantors nor any of their subsidiaries
(collectively, the “Entity”) is an individual or entity (“Person”) that
is, or is owned or controlled by a Person that is (A) the subject of any
sanctions administered or enforced by the U.S. Department of Treasury’s
Office of Foreign Assets Control (“OFAC”), nor (B) located, organized or
resident in a country or territory that is the subject of Sanctions
(including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea,
Sudan and Syria); and (ii) the Entity represents and covenants that it
will not, directly or indirectly, use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person with the express purpose
of: (A) funding or facilitating any activities or business of
or with any Person or in any country or territory that, at the time of
such funding or facilitation, is the subject of Sanctions; or (B) acting
in any other manner that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise); and (iii) the Entity
represents and covenants that it has not knowingly engaged in, is not now
knowingly engaged in, and will not knowingly engage prior to the
completion of the offering in, any dealings or transactions with any
Person, or in any country or territory, in violation of Sanctions;
and
|
|
|
(gg)
|
The
minute books and corporate records of the Company, the Guarantors and
their subsidiaries that have been made available to counsel for the
Purchasers in connection with diligence investigations for this offering
are the original minute books and records of the Company, the Guarantors
and their subsidiaries and contain copies of all proceedings of the
shareholders, board of directors and all committees of the board of
directors of the Company and such subsidiaries, and there have been no
other meetings, resolutions or proceedings to the date hereof not
reflected in such minute books and other corporate
records.
|
|
2.
|
Subject
to the terms and conditions herein set forth, the Company and the
Guarantors agree to issue and the Company agrees to sell to each of the
Purchasers, and each of the Purchasers agrees, severally and not jointly,
to purchase from the Company, at a purchase price of 92.836% of the
principal amount thereof, plus accrued interest, if any, from October 23,
2009 to the Time of Delivery hereunder, the principal amount of Securities
set forth opposite the name of such Purchaser in Schedule I
hereto.
|
9
|
3.
|
Upon
the authorization by you of the release of the Securities, the several
Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company
that:
|
|
(a)
|
It
will offer and sell the Securities only to (i) persons who it
reasonably believes are “qualified institutional buyers” (“QIBs”) within
the meaning of Rule 144A under the Act in transactions meeting the
requirements of Rule 144A or, (ii) upon the terms and conditions set forth
in Annex I to this Agreement;
|
|
(b)
|
It
is an Institutional Accredited Investor;
and
|
|
(c)
|
It
will not offer or sell the Securities by any form of general solicitation
or general advertising, including but not limited to the methods described
in Rule 502(c) under the Act.
|
| 4. |
(a)
|
The
Securities to be purchased by each Purchaser hereunder will be represented
by one or more definitive global Securities in book-entry form which will
be deposited by or on behalf of the Company with The Depository Trust
Company (“DTC”) or its designated custodian. The Company will
deliver the Securities to Xxxxxxx, Xxxxx & Co., for the account of
each Purchaser, against payment by or on behalf of such Purchaser of the
purchase price therefor by wire transfer in federal (same day) funds, by
causing DTC to credit the Securities to the account of Xxxxxxx, Xxxxx
& Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Xxxxxxx, Xxxxx &
Co. for checking at least twenty-four hours prior to the Time of Delivery
at the office of Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, New York, New
York (the
“Closing Location”). The time and date
of such delivery and payment shall be 9:30 a.m., New York City time, on
October 23, 2009 or such other time and date as Xxxxxxx, Xxxxx & Co.
and the Company may agree upon in writing. Such time and date
are herein called the “Time of
Delivery”.
|
|
(b)
|
The
documents to be delivered at the Time of Delivery by or on behalf of the
parties hereto pursuant to Section 8 hereof, including the cross-receipt
for the Securities and any additional documents requested by the
Purchasers pursuant to Section 8 hereof, will be
delivered at such time and date at the Closing Location, and the
Securities will be delivered to DTC or its designated custodian, all at
the Time of Delivery. A meeting will be held at the Closing
Location at 5:00 p.m., New York City time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of
this Section 4, “New York Business Day” shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
|
|
5.
|
Each
of the Company and the Guarantors, jointly and severally, agrees with each
of the Purchasers:
|
|
(a)
|
To
prepare the Preliminary Offering Circular, the Pricing Circular and the
Offering Circular in a form approved by you; to make no amendment or any
supplement to any of the foregoing which shall be reasonably disapproved
by you promptly after reasonable notice thereof; and to furnish you with
copies thereof;
|
10
|
(b)
|
Promptly
from time to time to take such action as you may reasonably request to
qualify the Securities for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Securities, provided that in connection therewith neither the
Company nor any Guarantor shall be required to qualify as a foreign
corporation, to file a general consent to service of process in any
jurisdiction or to subject itself to taxation in any jurisdiction where it
is not then subject;
|
|
(c)
|
To
furnish the Purchasers with written and
electronic copies of the Preliminary Offering Circular, the Pricing
Circular and the Offering Circular in such quantities as you may from time
to time reasonably request, and if, at any time prior to the expiration of
nine months after the date of the Offering Circular, any event shall have
occurred as a result of which the Offering Circular as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Offering Circular is delivered, not misleading, or, if for any other
reason it shall be necessary or desirable during such same period to amend
or supplement the Offering Circular, to notify you and upon your request
to prepare and furnish without charge to each Purchaser and to any dealer
in securities as many written and
electronic copies as you may from time to time reasonably request of an
amended Offering Circular or a supplement to the Offering Circular which
will correct such statement or omission or effect such
compliance;
|
|
(d)
|
During
the period beginning from the date hereof and continuing until the date 90
days after the Time of Delivery, not to offer, sell, contract to sell,
pledge or otherwise dispose of, or file (or participate in the filing of)
a registration statement with the Commission with respect to, except as
provided hereunder, any Securities, any securities of the Company or any
Guarantor that are substantially similar to the Notes or Guarantees, or
any securities convertible, exchangeable or exercisable for Notes or
Guarantees, without your prior written
consent;
|
|
(e)
|
Not
to be or become, at any time prior to the expiration of two years after
the Time of Delivery, an open-end investment company, unit investment
trust, closed-end investment company or face-amount certificate company
that is or is required to be registered under Section 8 of the Investment
Company Act;
|
|
(f)
|
The
Company or any Guarantor will, unless they are subject to Section 13 or
15(d) of the Exchange Act or file the periodic reports contemplated by
such provisions, for the benefit of holders from time to time of
Securities, to furnish at its expense, upon request, to holders of
Securities and prospective purchasers of securities information (the
“Additional Issuer Information”) satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the Act (it being acknowledged and agreed
that prior to the first date on which information is required to be
provided under the Indenture, the information contained in the Offering
Circular is sufficient for this
purpose);
|
|
(g)
|
Except
for such documents that are publicly available on XXXXX, to (i) furnish to
the holders of the Securities as soon as practicable after the end of each
fiscal year an annual report (including a balance sheet and statements of
income, shareholders’ equity and cash flows of the Company, the Guarantors
and their consolidated subsidiaries certified by independent public
accountants) and (ii) as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date of the Offering Circular), to make available
to the holders of the Securities its unaudited consolidated summary
financial information of the Company, the Guarantors and their
subsidiaries for such quarter in reasonable
detail;
|
11
|
(h)
|
During
the period of two years after the Time of Delivery, neither the Company
nor any Guarantor will, and will not permit any of its respective
“affiliates” (as defined in Rule 144 under the Act), resell any of the
Securities which constitute
“restricted securities” under Rule 144 that have been reacquired by any of
them; and
|
|
(i)
|
To
use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Pricing Circular
under the caption “Use of
Proceeds”.
|
6.
|
(a)
|
(i) Each
of the Company and the Guarantors, jointly and severally, represents and
agrees that, without the prior consent of Xxxxxxx, Xxxxx & Co., it has
not made and will not make any offer relating to the Securities that, if
the offering of the Securities contemplated by this Agreement were
conducted as a public offering pursuant to a registration statement filed
under the Act with the Commission, would constitute an “issuer free
writing prospectus,” as defined in Rule 433 under the Act (any such offer
is hereinafter referred to as a “Company Supplemental Disclosure
Document”);
|
|
|
(ii) each
Purchaser represents and agrees that, without the prior consent of the
Company and Xxxxxxx, Xxxxx & Co., other than one or more term sheets
relating to the Securities containing customary information and conveyed
to purchasers of securities, it has not made and will not make any offer
relating to the Securities that, if the offering of the Securities
contemplated by this Agreement were conducted as a public offering
pursuant to a registration statement filed under the Act with the
Commission, would constitute a “free writing prospectus,” as defined in
Rule 405 under the Act (any such offer (other than any such term sheets),
is hereinafter referred to as a “Purchaser Supplemental Disclosure
Document”); and
|
|
|
(iii)
any Company Supplemental Disclosure Document or Purchaser Supplemental
Disclosure Document the use of which has been consented to by the Company
and Xxxxxxx, Xxxxx & Co. is listed on Schedule II(b)
hereto;
|
|
7.
|
Each
of the Company and the Guarantors, jointly and severally, covenants and
agrees with the several Purchasers that the Company will pay or cause to
be paid the following: (i) the fees, disbursements and expenses of their
counsel and accountants in connection with the issuance of the Securities
and all other expenses in connection with the preparation, printing,
reproduction and filing of the Preliminary Offering Circular and the
Offering Circular and any amendments and supplements thereto and the
mailing and delivering of copies thereof to the Purchasers and dealers;
(ii) the cost of printing or producing any Agreement among Purchasers,
this Agreement, the Indenture, the Registration Rights Agreement, the Blue
Sky Memorandum, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and
delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and
sale under state securities laws as provided in Section 5(b) hereof,
including the reasonable fees and disbursements of counsel for the
Purchasers in connection with such qualification and in connection with
the Blue Sky and legal investment surveys; (iv) any fees charged by
securities rating services for rating the Securities; (v) all costs and
expenses incident to any electronic or physical road show taking place
between October 6, 2009 and the date of this Agreement; (vii) the fees and
expenses of the Trustee and any agent of the Trustee and the reasonable
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; and (viii) all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and
Sections 9 and 12 hereof, that each Purchaser will pay all of its own
costs and expenses, including the fees of its counsel, transfer taxes on
resale of any of the Securities by it, and any
advertising expenses connected with any offers it may
make.
|
12
|
8.
|
The
obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and
other statements of the Company and the Guarantors herein are, at and as
of the Time of Delivery, true and correct, the condition that the Company
and the Guarantors shall have performed all of their respective
obligations hereunder, and the following additional
conditions:
|
|
(a)
|
Xxxxxx
Xxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, each dated the Time of
Delivery, with respect to such matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such
matters;
|
|
(b)
|
Xxxxxxxx
Xxxxxxx LLP, Canadian counsel for the Company and each Guarantor, shall
have furnished to you their written opinion, dated the Time of Delivery,
in form and substance satisfactory to you, to the effect
that:
|
|
(i)
|
The
Company and each of the Guarantors incorporated under the laws of Ontario
(the “Non-U.S. Guarantors”) has been duly incorporated or formed and is
validly existing as a corporation or limited liability company, as the
case may be, in good standing (where applicable) under the laws of the
jurisdiction of incorporation or
formation.
|
|
(ii)
|
Insofar
as such matters are governed by Ontario or Canadian law, this Agreement
has been duly authorized, executed and delivered by the Company and the
Non-U.S. Guarantors.
|
|
(iii)
|
Insofar
as such matters are governed by Ontario or Canadian law, the Notes have
been duly authorized, executed, authenticated and delivered, the
Guarantees have been duly authorized, executed, endorsed and
delivered.
|
|
(iv)
|
Insofar
as such matters are governed by Ontario or Canadian law, the Indenture has
been duly authorized, executed and delivered by the parties
thereto.
|
|
(v)
|
Insofar
as such matters are governed by Ontario or Canadian law, the Registration
Rights Agreement has been duly authorized, executed and delivered by the
parties thereto;
|
|
(vi)
|
The
issue and sale of the Securities and the compliance by the Company and the
Guarantors with all of the provisions of the Securities, the Indenture,
the Registration Rights Agreement and this Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with
or result in a breach or violation of any of the terms or provisions of
the Certificate of Incorporation or By-laws of the Company or of the
constitutive documents of any Non-U.S. Guarantor, or any statute or any
order, rule or regulation of any Ontario or Canadian court or governmental
agency or body having jurisdiction over the Company or the Non-U.S.
Guarantors; and
|
13
|
(vii)
|
No
consent, approval, authorization, order, registration or qualification of
or with any such Ontario or Canadian court or governmental agency or body
is required for the issue and sale of the Securities or the consummation
by the Company or any Non-U.S. Guarantor of the transactions contemplated
by this Agreement, the Indenture or the Registration Rights
Agreement.
|
|
(c)
|
Xxxxxxxx
Xxxxxx, Esq., General Counsel of the Company, shall have furnished to you
a written opinion, dated the Time of Delivery, in form and substance
reasonably satisfactory to you, to the effect that set forth in Xxxxx XXX
hereto.
|
|
(d)
|
Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP, counsel for the Company, shall have furnished
to you their written opinion and negative assurance letter dated the Time
of Delivery, in form and substance reasonably satisfactory to you, to the
effect set forth in Annex IV and V
hereto.
|
|
(e)
|
On
the date of the Offering Circular prior to the execution of this Agreement
and also at the Time of Delivery, BDO Xxxxxxx, LLP shall have furnished to
you a letter or letters, dated the respective dates of delivery thereof,
in form and substance reasonably satisfactory to you, to the effect set
forth in Annex II hereto;
|
|
(f)
|
At
the Time of Delivery, the Chief Financial Officer of the Company shall
have furnished to you a certificate, dated the date of delivery thereof,
in form and substance reasonably satisfactory to you, as to the accuracy
of specified financial and statistical
information;
|
|
(g)
|
(i)
None of the Company, the Guarantors or any of their respective
subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the Pricing
Circular and the Offering Circular any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Pricing Circular and the Offering Circular, and (ii) since the
respective dates as of which information is given in the Pricing Circular
and the Offering Circular there shall not have been any material change in
the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders’ equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Pricing Circular and the Offering Circular, the effect of which, in any
such case described in clause (i) or (ii), is in the judgment of Xxxxxxx,
Xxxxx & Co. so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities
on the terms and in the manner contemplated in this Agreement, in the
Pricing Circular and in the Offering
Circular;
|
|
(h)
|
On
or after the Applicable Time (i) no downgrading shall have occurred in the
rating accorded the Company’s or any Guarantor’s debt securities by any
“nationally recognized statistical rating organization”, as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company’s or any Guarantor’s debt
securities;
|
14
|
(i)
|
On
or after the Applicable Time there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on NASDAQ; (ii) a
suspension or material limitation in trading in the Company’s securities
on NASDAQ; (iii) a general moratorium on commercial banking activities
declared by any of federal, New York State, Ontario Province or Canadian
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States or Canada; (iv) the
outbreak or escalation of hostilities involving the United States or
Canada or the declaration by the United States or Canada of a national
emergency or war or (v) the occurrence of any other calamity or crisis or
any change in financial, political or economic conditions in the United
States or elsewhere, if the effect of any such event specified in clause
(iv) or (v) in your judgment makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities on the terms
and in the manner contemplated in the Offering Circular; (vi) the
imposition of the proposal of exchange controls by any governmental
authority in Canada;
|
|
(j)
|
At
the Time of Delivery, the Company, the Guarantors and the Purchasers shall
have entered into the Registration Rights Agreement and the Purchasers
shall have received counterparts
thereof;
|
|
(k)
|
The
Company and the Guarantors shall have furnished or caused to be furnished
to you at the Time of Delivery certificates of officers of the Company and
the Guarantors satisfactory to you as to the accuracy of the
representations and warranties of the Company and the Guarantors herein at
and as of such Time of Delivery, as to the performance by the Company and
the Guarantors of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set
forth in subsection (g) of this Section and as to such other matters as
you may reasonably request.
|
| 9. |
(a)
|
The
Company and each of the Guarantors, jointly and severally, will indemnify
and hold harmless each Purchaser against any losses, claims, damages or
liabilities, joint or several, to which such Purchaser may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
solely upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Offering Circular, the Pricing
Circular, the Offering Circular, the Pricing Disclosure Package, or any
amendment or supplement thereto, any Company Supplemental Disclosure
Document, any road show in connection with the offering, and any other
written information that the Company has authorized to be used by or on
behalf of the Company and the Guarantors in connection with the offer or
sale of the Securities, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading, and will reimburse each Purchaser for any
legal or other expenses reasonably incurred by such Purchaser in
connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that neither
the Company nor any Guarantor shall be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Offering Circular, the Pricing
Circular, the Offering Circular, the Pricing Disclosure Package, or any
such amendment or supplement, or any Company Supplemental Disclosure
Document or any road show in connection with the offering, in reliance
upon and in conformity with written information furnished to the Company
by any Purchaser through Xxxxxxx, Xxxxx & Co. expressly for use
therein.
|
15
|
(b)
|
Each
Purchaser, severally and not jointly, will indemnify and hold harmless the
Company and the Guarantors against any losses, claims, damages or
liabilities to which the Company or any Guarantor may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
solely upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Offering Circular, the Pricing Circular,
the Offering Circular, the Pricing Disclosure Package, or any amendment or
supplement thereto, or any Company Supplemental Disclosure Document, or
any road show in connection with the offering, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any
Preliminary Offering Circular, the Pricing Circular, the Offering
Circular, the Pricing Disclosure Package, or any such amendment or
supplement, or any Company Supplemental Disclosure Document or any road
show in connection with the offering in reliance upon and in conformity
with written information furnished to the Company by such Purchaser
through Xxxxxxx, Xxxxx & Co. expressly for use therein; and will
reimburse the Company and the Guarantors for any legal or other expenses
reasonably incurred by the Company or such Guarantor in connection with
investigating or defending any such action or claim as such expenses are
incurred.
|
|
(c)
|
Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against an indemnifying party
under such subsection, notify such indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection. In case
any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection for
any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of
investigation. Notwithstanding the indemnifying party’s
election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate
counsel, and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to
those available to the indemnifying party; (iii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after
notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. No indemnifying party shall,
without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on
behalf of any indemnified party.
|
16
|
(d)
|
If
the indemnification provided for in this Section 9 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Guarantors
on the one hand and the Purchasers on the other from the offering of the
Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under subsection
(c) above, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Guarantors on the one hand and the
Purchasers on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions
in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company
and the Guarantors on the one hand and the Purchasers on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the
Guarantors bear to the total underwriting discounts and commissions
received by the Purchasers therefrom, in each case as set forth in the
Offering Circular. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the
Guarantors on the one hand or the Purchasers on the other and the parties’
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the
Guarantors and the Purchasers agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined
by pro rata allocation (even if the Purchasers were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this
subsection (d), no Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to investors were offered to investors
exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The Purchasers’ obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not
joint.
|
17
|
(e)
|
The
obligations of the Company and the Guarantors under this Section 9 shall
be in addition to any liability which the Company or the Guarantors may
otherwise have and shall extend, upon the same terms and conditions, to
any affiliate of each Purchaser and each person, if any, who controls any
Purchaser or any such affiliate within the meaning of the Act; and the
obligations of the Purchasers under this Section 9 shall be in addition to
any liability which the respective Purchasers may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director
of the Company or the Guarantors and to each person, if any, who controls
the Company or such Guarantor within the meaning of the
Act.
|
| 10. |
(a)
|
If
any Purchaser shall default in its obligation to purchase the Securities
which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such
Securities on the terms contained herein. If within thirty-six
hours after such default by any Purchaser you do not arrange for the
purchase of such Securities, then the Company shall be entitled to a
further period of thirty-six hours within which to procure another party
or other parties reasonably satisfactory to you to purchase such
Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so
arranged for the purchase of such Securities or the Company notifies you
that it has so arranged for the purchase of such Securities, you or the
Company shall have the right to postpone the Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Offering Circular, or in any other
documents or arrangements, and the Company agrees to prepare promptly any
amendments to the Offering Circular which in your reasonable opinion may
thereby be made necessary. The term “Purchaser” as used in this
Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this
Agreement with respect to such
Securities.
|
|
(b)
|
If,
after giving effect to any arrangements for the purchase of the Securities
of a defaulting Purchaser or Purchasers by you and the Company as provided
in subsection (a) above, the aggregate principal amount of such Securities
which remains unpurchased does not exceed one-tenth of the aggregate
principal amount of all the Securities, then the Company shall have the
right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder
and, in addition, to require each non-defaulting Purchaser to purchase its
pro rata share (based on the principal amount of
Securities which such Purchaser agreed to purchase hereunder)
of the Securities of such defaulting Purchaser or Purchasers for which
such arrangements have not been made; but nothing herein shall relieve a
defaulting Purchaser from liability for its
default.
|
|
(c)
|
If,
after giving effect to any arrangements for the purchase of the Securities
of a defaulting Purchaser or Purchasers by you and the Company as provided
in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-tenth of the aggregate principal
amount of all the Securities or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting
Purchasers to purchase Securities of a defaulting Purchaser or Purchasers,
then this Agreement shall thereupon terminate, without liability on the
part of any non-defaulting Purchaser, the Company or the Guarantors,
except for the expenses to be borne by the Company, the Guarantors and the
Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 9 hereof; but nothing herein shall
relieve a defaulting Purchaser from liability for its
default.
|
18
|
11.
|
The
respective indemnities, agreements, representations, warranties and other
statements of the Company, the Guarantors and the several Purchasers, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Purchaser or any controlling person
of any Purchaser, or the Company or the Guarantor, or any officer or
director or controlling person of the Company or the Guarantor, and shall
survive delivery of and payment for the
Securities.
|
|
12.
|
If
this Agreement shall be terminated pursuant to Section 10 hereof, neither
the Company nor the Guarantors shall then be under any liability to any
Purchaser except as provided in Sections 7 and 9 hereof; but, if for any
other reason, the Securities are not delivered by or on behalf of the
Company as provided herein, the Company and the Guarantors, jointly and
severally, will reimburse the Purchasers through you for all of their
documented out-of-pocket expenses, including reasonable fees and
disbursements of counsel, reasonably incurred by the Purchasers in making
preparations for the purchase, sale and delivery of the Securities, but
neither the Company nor the Guarantors shall then be under any further
liability to any Purchaser except as provided in Sections 7 and 9
hereof.
|
|
13.
|
In
all dealings hereunder, you shall act on behalf of each of the Purchasers,
and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or
given by you jointly or by
Xxxxxxx, Xxxxx & Co. on behalf of you as the
representative.
|
All
statements, requests, notices and agreements hereunder shall be in writing, and
if to the Purchasers shall be delivered or sent by mail, telex or facsimile
transmission to you on their behalf in care of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and if to the Company
or any Guarantor shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Offering Circular,
Attention: General Counsel; provided, however, that any notice to a
Purchaser pursuant to Section 10(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers’ Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company and the Guarantor by you upon
request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
In
accordance with the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)), the Purchasers are required to
obtain, verify and record information that identifies their respective clients,
including the Company, which information may include the name and address of
their respective clients, as well as other information that will allow the
Purchasers to properly identify their respective clients.
|
14.
|
This
Agreement shall be binding upon, and inure solely to the benefit of, the
Purchasers, the Company, the Guarantors and, to the extent provided in
Sections 9 and 11 hereof, the officers and directors of the Company or the
Guarantors and each person who controls the Company, the Guarantors or any
Purchaser, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser
shall be deemed a successor or assign by reason merely of such
purchase.
|
19
|
15.
|
Time
shall be of the essence of this
Agreement.
|
|
16.
|
The
Company and the Guarantors acknowledge and agree that (i) the purchase and
sale of the Securities pursuant to this Agreement is an arm’s-length
commercial transaction between the Company and the Guarantors, on the one
hand, and the several Purchasers, on the other, (ii) in connection
therewith and with the process leading to such transaction each Purchaser
is acting solely as a principal and not the agent or fiduciary of the
Company or any Guarantor, (iii) no Purchaser has assumed an advisory or
fiduciary responsibility in favor of the Company with respect to the
offering contemplated hereby or the process leading thereto (irrespective
of whether such Purchaser has advised or is currently advising the Company
or any Guarantor on other matters) or any other obligation to the Company
or any Guarantor except the obligations expressly set forth in this
Agreement and (iv) each of the Company and the Guarantors has consulted
its own legal and financial advisors to the extent it deemed
appropriate. Each of the Company and the Guarantors agree that
it will not claim that the Purchaser, or any of them, has rendered
advisory services of any nature or respect, or owes a fiduciary or similar
duty to the Company or the Guarantors, in connection with such transaction
or the process leading thereto.
|
|
17.
|
This
Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company, the Guarantors and the Purchasers,
or any of them, with respect to the subject matter
hereof.
|
|
18.
|
THIS AGREEMENT AND ANY MATTERS
RELATED TO THIS TRANSACTION SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
|
|
19.
|
The
Company, the Guarantors and each of the Purchasers hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or relating
to this Agreement or the transactions contemplated
hereby.
|
|
20.
|
To
the fullest extent permitted by applicable law, each of the parties hereto
(i) agrees that any legal suit, action or proceeding against the Company
or any Guarantor brought by any Purchaser or by any person who controls
any Purchaser arising out of or based upon this Agreement or the
transactions contemplated thereby may be instituted exclusively in the
U.S. District Court for the Southern District of New York, or if that
court does not have subject matter jurisdiction, any New York state court
located in the Borough of Manhattan in the City of New York (a “New York
Court”), (ii) waives, to the fullest extent it may effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
such proceeding and (iii) submits to the non-exclusive jurisdiction of
such courts in any such suit, action or proceeding. The Company
and each of the Guarantors has appointed the Company’s New York office,
currently located at 000 Xxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, XX 00000, as its authorized agent (the “Authorized
Agent”) upon whom process may be served in any such action arising out of
or based on this Agreement or the transactions contemplated hereby which
may be instituted in any New York Court by any Purchaser or any person who
controls any Purchaser, expressly consents to the jurisdiction of any such
court in respect of any such action, and waives any other requirements of
or objections to personal jurisdiction with respect
thereto. Such appointment shall not be revoked without your
prior written consent. The Company and each of the Guarantors
represents and warrants that its Authorized Agent has agreed to act as
such an agent for service of process and agrees to take any and all
action, including the filing of any and all documents and instruments, as
may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company shall be deemed, in every
respect, effective service of process upon the Company and such
Guarantors.
|
20
|
21.
|
In
respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the “judgment
currency”) other than U.S. dollars, the Company and the Guarantors,
jointly and severally, will indemnify each Purchaser against any loss
incurred by such Purchaser as a result of any variation as between (i) the
rate of exchange at which the U.S. dollar amount is converted into the
judgment currency for the purpose of such judgment or order and (ii) the
rate of exchange at which a Purchaser is able to purchase U.S. dollars
with the amount of the judgment currency actually received by such
Purchaser. The foregoing indemnity shall constitute a separate
and independent obligation of the Company and the Guarantors and shall
continue in full force and effect notwithstanding any such judgment or
order as aforesaid. If the United States dollars so purchased
are greater than the sum originally due to such Purchaser hereunder, such
purchaser agrees to pay to the Company an amount equal to the excess of
the dollars so purchased over the sum originally due to such Purchaser
hereunder. The term “rate of exchange” shall include any
premiums and costs of exchange payable in connection with the purchaser of
or conversion into U.S. dollars.
|
|
22.
|
This
Agreement may be executed by any one or more of the parties hereto in any
number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the
same instrument.
|
|
23.
|
Notwithstanding
anything herein to the contrary, the Company and the Guarantors (and their
respective employees, representatives, and other agents) are authorized to
disclose to any and all persons, the tax treatment and tax structure of
the potential transaction and all materials of any kind (including tax
opinions and other tax analyses) provided to the Company and the
Guarantors relating to that treatment and structure, without the
Purchasers’ imposing any limitation of any kind. However, any information
relating to the tax treatment and tax structure shall remain confidential
(and the foregoing sentence shall not apply) to the extent necessary to
enable any person to comply with securities laws. For this purpose, “tax
treatment” means US federal and state income tax treatment, and “tax
structure” is limited to any facts that may be relevant to that
treatment.
|
[Remainder
of page intentionally left blank]
21
If the
foregoing is in accordance with your understanding, please sign and return to us
four counterparts hereof, and upon the acceptance hereof by you, on behalf of
each of the Purchasers, this letter and such acceptance hereof shall constitute
a binding agreement between each of the Purchasers, the Company and the
Guarantors. It is understood that your acceptance of this letter on
behalf of each of the Purchasers is pursuant to the authority set forth in a
form of Agreement among Purchasers, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
|
Very
truly yours,
|
|
|
MDC
Partners, Inc.
|
|
|
By:
|
/s/ Xxxxxx Xxxxxxx
|
|
Name:
Xxxxxx
Xxxxxxx
|
|
|
Title:
Authorized
Signatory
|
|
Guarantors:
|
Accent Marketing Services, LLC
|
Xxxxxx Xxxxxx Canada Inc.
|
||||
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
By:
|
/s/ Xxxxxx Xxxxxxx
|
||
|
Name: Xxxxxxx Xxxxxxxx
|
Name: Xxxxxx Xxxxxxx
|
||||
|
Title: Authorized Signatory
|
Title: Authorized Signatory
|
||||
|
Computer Composition of Canada Inc.
|
CPB Acquisition Inc.
|
||||
|
By:
|
/s/ Xxxxxx Xxxxxxx
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
||
|
Name: Xxxxxx Xxxxxxx
|
Name: Xxxxxxx Xxxxxxxx
|
||||
|
Title: Authorized Signatory
|
Title: Authorized Signatory
|
||||
|
Xxxxxxx Xxxxxx & Bogusky LLC
|
Dotglu LLC
|
||||
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
||
|
Name: Xxxxxxx Xxxxxxxx
|
Name: Xxxxxxx Xxxxxxxx
|
||||
|
Title: Authorized Signatory
|
Title: Authorized Signatory
|
||||
|
Hello Acquisition Inc.
|
KBP Holdings LLC
|
||||
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
||
|
Name: Xxxxxxx Xxxxxxxx
|
Name: Xxxxxxx Xxxxxxxx
|
||||
|
Title: Authorized Signatory
|
Title: Authorized Signatory
|
||||
22
|
Xxxxxxxxxxx
Bond & Partners LLC
|
Maxxcom
(USA) Holdings Inc.
|
||||
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
||
|
Name:
Xxxxxxx Xxxxxxxx
|
Name:
Xxxxxxx Xxxxxxxx
|
||||
|
Title: Authorized
Signatory
|
Title: Authorized
Signatory
|
||||
|
Maxxcom
Inc. (ON)
|
Maxxcom
Inc. (US)
|
||||
|
By:
|
/s/ Xxxxxx Xxxxxxx
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
||
|
Name: Xxxxxx
Xxxxxxx
|
Name:
Xxxxxxx Xxxxxxxx
|
||||
|
Title: Authorized
Signatory
|
Title: Authorized
Signatory
|
||||
|
MDC
Acquisition Inc.
|
MDC
Corporate (US) Inc.
|
||||
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
||
|
Name:
Xxxxxxx Xxxxxxxx
|
Name:
Xxxxxxx Xxxxxxxx
|
||||
|
Title: Authorized
Signatory
|
Title: Authorized
Signatory
|
||||
|
MDC/KBP
Acquisition Inc.
|
TargetCom
LLC
|
||||
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
||
|
Name:
Xxxxxxx Xxxxxxxx
|
Name:
Xxxxxxx Xxxxxxxx
|
||||
|
Title: Authorized
Signatory
|
Title: Authorized
Signatory
|
||||
|
TC
Acquisition Inc.
|
Yamamoto
Xxxx Xxxxxxxxx, Inc.
|
||||
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
||
|
Name:
Xxxxxxx Xxxxxxxx
|
Name:
Xxxxxxx Xxxxxxxx
|
||||
|
Title: Authorized
Signatory
|
Title: Authorized
Signatory
|
||||
|
ZG
Acquisition Inc.
|
|||||
|
By:
|
/s/ Xxxxxxx Xxxxxxxx
|
||||
|
Name:
Xxxxxxx Xxxxxxxx
|
|||||
|
Title: Authorized
Signatory
|
|||||
23
|
Accepted
as of the date hereof:
|
|
|
Xxxxxxx,
Xxxxx & Co.
|
|
|
/s/
Xxxxxxx, Xxxxx & Co.
|
|
|
(Xxxxxxx,
Xxxxx & Co.)
|
|
|
On
behalf of each of the
Purchasers
|
|
24
SCHEDULE
I
|
Principal
|
||||
|
Amount of
|
||||
|
Securities
|
||||
|
to be
|
||||
|
Purchaser
|
Purchased
|
|||
|
Xxxxxxx,
Xxxxx & Co.
|
$ | 123,750,000 | ||
|
X.
X. Xxxxxx Securities Inc.
|
45,000,000 | |||
|
Xxxxxxxxx
& Company, Inc.
|
22,500,000 | |||
|
Xxxxxxx
Xxxxx & Company, L.L.C.
|
9,000,000 | |||
|
BMO
Capital Markets Corp.
|
9,000,000 | |||
|
RBC
Capital Markets Corporation
|
5,625,000 | |||
|
UBS
Securities LLC
|
5,625,000 | |||
|
Scotia
Capital (USA) Inc.
|
4,500,000 | |||
|
Total
|
$ | 225,000,000 | ||
I - 1
SCHEDULE
II
(a) Additional
Documents Incorporated by Reference:
(b) Approved
Supplemental Disclosure Documents:
|
1.
|
Final
Term Sheet attached as Schedule III
hereto
|
|
2.
|
Any
electronic road show used in connection with the offering (including any
“non-deal” road show used prior to the launch of the offering) to the
extent it is a “written communication” within the meaning of Rule
433(d)(8)(i) under the Act
|
II -
1
SCHEDULE
III
[Final
Pricing Term Sheet begins on following page]
III -
1
Pricing
Term Sheet
This
term sheet should be read in conjunction with and is qualified in its entirety
by reference to the Preliminary Offering Circular dated October 19, 2009 of MDC
Partners Inc. (the “Company”). The information in this Pricing Term
Sheet supplements the Preliminary Offering Circular and supersedes the
information in the Preliminary Offering Circular to the extent inconsistent with
the information in the Preliminary Offering Circular. Defined terms
used and not defined herein have the meaning ascribed to them in the Preliminary
Offering Circular.
|
Issuer:
|
MDC
Partners Inc., a corporation continued under the laws of
Canada.
|
|
Note
Guarantors:
|
Accent
Marketing Services, LLC, Xxxxxx Xxxxxx Canada Inc., Computer Composition
of Canada Inc., CPB Acquisition Inc., Xxxxxxx Xxxxxx & Bogusky LLC,
Dotglu LLC, Hello Acquisition Inc., KBP Holdings LLC, Xxxxxxxxxxx Bond
& Partners LLC, Maxxcom (USA) Holdings Inc., Maxxcom Inc. (ON),
Maxxcom Inc. (US), MDC Acquisition Inc., MDC Corporate (US) Inc., MDC/KBP
Acquisition Inc., TargetCom LLC, TC Acquisition Inc., Yamamoto Xxxx
Xxxxxxxxx, Inc. and ZG Acquisition Inc.
|
|
Placement:
|
144A/
Reg S (with
requirement to remove
restricted securities legend within five business days after the date that
is one year from the issue date, or to file registration
statement)
|
|
Trustee:
|
The
Bank of New York Mellon
|
|
Issue:
|
11%
Senior Notes due 2016
|
|
Aggregate
Principal Amount Offered:
|
$225,000,000
(increased from $200,000,000
indicated in the Preliminary Offering Circular)
|
|
Net
Proceeds
|
The
net proceeds from the offering, after deducting estimated expenses
(including discounts and commissions payable to the initial purchasers)
will be approximately $206 million.
|
|
Maturity
Date:
|
November
1, 2016
|
|
Ratings:
|
B2
/ B+ (Xxxxx’x/S&P)
|
|
Issue
Price:
|
95.336%
|
|
Coupon:
|
11.0%
|
|
Yield:
|
12.0%
|
|
Spread
to Treasury:
|
+902
basis points
|
|
Reference
Treasury:
|
4.625%
UST due November 2016
|
|
Interest
Payment Dates:
|
May
1 and November 1 of each year, commencing on May 1, 2010
|
|
Record
Dates:
|
April
15 and October 15 of each year
|
|
Sole
Bookrunner:
|
Xxxxxxx,
Xxxxx & Co.
|
|
Co-Managers:
|
Xxxxxxx
Xxxxx & Company, L.L.C., BMO Capital Markets Corp., X. X. Xxxxxx
Securities Inc., Xxxxxxxxx & Company, Inc., RBC Capital Markets
Corporation, Scotia Capital (USA) Inc. and UBS Securities
LLC.
|
III
- 2
|
Optional
Redemption:
|
The
Company may redeem the Notes, at its option, in whole at any time or in
part from time to time, on and after November 1, 2013 at the following
redemption prices, expressed as percentages of the principal amount
thereof, if redeemed during the twelve-month period commencing on November
1 of any year set forth below:
Year Percentage
2013 105.500%
2014 102.750%
2015
and
thereafter 100.000%
|
|
Make-Whole
Call:
|
At
any time prior to November 1, 2013, the Company may, at its option, redeem
all or part of the Notes upon not less than 30 nor more than 60 days’
prior notice at a redemption price equal to the sum of (i) 100% of the
principal amount thereof, plus (ii) the
Applicable Premium as of the date of redemption, plus (iii) accrued and
unpaid interest and any Additional Interest, if any, to the date of
redemption.
“Applicable Premium”
means, with respect to a Note at any date of redemption, the greater of
(i) 1.0% of the principal amount of such Note and (ii) the excess, if any,
of (A) the present value at such date of redemption of (1) the redemption
price of such Note on November 1, 2013 (such redemption price being
described under “Optional Redemption”) plus (2) all remaining required
interest payments due on such Note through November 1, 2013 (excluding
accrued but unpaid interest to the date of redemption), computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over
(B) the then-outstanding principal amount of such Note.
“Treasury Rate” means,
as of any redemption date, the yield to maturity as of such redemption
date of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical
Release H.15 (519) that has become publicly available at least two
business days prior to the redemption date (or, if such Statistical
Release is no longer published, any publicly available source of similar
market data)) most nearly equal to the period from the redemption date to
November 1, 2013; provided, however, that if the
period from the redemption date to November 1, 2013 is less than one year,
the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be
used.
|
|
Equity
Clawback:
|
At
any time, or from time to time, on or prior to November 1, 2012, the
Company may, at its option, use the net cash proceeds of one or more
Equity Offerings to redeem in the aggregate up to 35% of the aggregate
principal amount of the Notes issued under the Indenture at a redemption
price equal to 111% of the principal amount thereof.
|
|
Trade
Date:
|
October
20, 2009
|
|
Closing
Date:
|
October
23, 2009 (T+3)
|
|
CUSIP:
|
144A:
552697
AD6
|
|
Reg
S: C5429X
AA4
|
|
|
ISIN:
|
144A:
US552697AD60
|
|
Reg
S: USC5429XAA49
|
III
- 3
Additional
Information
|
Change
in Co-Managers:
|
Xxxxx
Fargo Foothill, LLC, will not act as an initial purchaser with respect to
the offering of the Notes.
|
|
Changes
to Description of Notes:
|
|
|
Change to “Limitation on
Restricted Payments” Covenant:
Change to Definition of
“Permitted Investments”:
|
On
page 91 of the Preliminary Offering Circular, clause (3)(C) of the first
paragraph under “Certain Covenants—Limitation on Restricted Payments” is
modified by deleting “$5.0 million” and inserting “$2.5 million” in place
thereof.
On
page 127 of the Preliminary Offering Circular, clause (13) of the
definition of “Permitted Investments” is modified by deleting “$7.5
million” and inserting “$4.0 million” in place thereof.
|
|
Restricted
Subsidiaries that are not Note Guarantors as of the Issue
Date:
|
The
following are Restricted Subsidiaries of the Company that are not Note
Guarantors as of the Issue Date:
Maxxcom (Nova Scotia) Corp.,
Maxxcom (USA) Finance Company, MDC Travel, Inc., 1208075 Ontario Limited,
2037542 Ontario Inc., 939 GP Inc., Secured Products (Cayman) Inc., Accent
St. Lucia Holding Corp., Xxxxx Xxx Holdings Ltd., Colle & XxXxx, Inc.,
Company C Communications Inc., HW Acquisition LLC, Northstar Research
Holdings Canada Inc., Northstar Research GP LLC, Northstar Research
Holdings USA LP, 656712 Ontario Limited, Accent Marketing Jamaica Limited,
Accumark Communications Inc., Adrenalina LLC, Xxxxxx Xxxxxxx
Communications Inc., Attention Partners LLC, Xxxxx Xxx Design Inc., Xxxxx
Xxx Design (USA) LLC, Xxxxx Xxxxx Iradesso Corp., Colle & XxXxx LLC,
Company C Communications LLC, Xxxxxxx Xxxxxx & Bogusky Europe AB,
Xxxxxxxx Xxxxxx LLC, Xxxxxxxxx Bas Partnership, HL Group Partners LLC,
LifeMed Media, Inc., Mono Advertising LLC, Northsar Research
Partners (USA) LLC, Northstar Research Partners Inc., Northstar Research
Partners (UK) Limited, Redscout LLC, Rush NYC LLC, Skinny NYC LLC, Source
Marketing LLC, Studio Pica Inc., Track 21 LLC, Traffic Generators, LLC,
Tree City Inc., Trend Core, LLC, Veritas Communications Inc., Viking
Studio Inc., VitroRobertson LLC, Zig Inc., Zig (USA) LLC, XConnections
Inc., XML Simplicity Inc., Zyman Group, LLC, Bratskeir & Company,
Inc., Xxxxxxxx / Bratskeir Public Relations LLC, Xxxxxxx Xxxxxx + Bogusky
(Nova Scotia) Co., FMA Acquisition Co., Xxxxxxxxxxx Bond & Partners
West LLC, Margeotes Xxxxxxxx Xxxxxx LLC, Maxxcom (Barbados) Inc., MF+P
Acquisition Co. (Delaware), Sable Advertising Systems, Inc., SMI
Acquisition Co. (Delaware), Studiotype Inc. and Zyman Group
Limited.
|
III
- 4
Capitalization
|
As
of June 30, 2009
|
||||||||
|
Historical
|
As
Adjusted
|
|||||||
|
(in
thousands of dollars)
|
||||||||
|
Cash
and cash
equivalents
|
$ | 57,934 | $ | 81,531 | ||||
|
Debt:
Revolving
credit facility
(1)
|
$ | 11,860 | $ | —— | ||||
|
Term
loans
(1)
|
$ | 130,000 | $ | —— | ||||
|
Facility
(2)
|
$ | —— | $ | —— | ||||
|
Notes
offered hereby
(3)
|
$ | —— | $ | 225,000 | ||||
|
8%
convertible
debentures
|
$ | 38,693 | $ | —— | ||||
|
Notes
payable and other bank
loans
|
$ | 2,401 | $ | 2,401 | ||||
|
Obligations
under capital
leases
|
$ | 1,856 | $ | 1,856 | ||||
|
Total
debt
|
$ | 184,810 | $ | 229,257 | ||||
|
Total
equity
(4)
|
$ | 96,420 | $ | 96,420 | ||||
|
Total
capitalization
|
$ | 281,230 | $ | 325,677 | ||||
——————————
(1) The
amounts listed under Revolving credit facility and Term loans comprise the total
amount outstanding under the Financing Agreement as of June 30,
2009.
(2) Concurrently,
with this offering, we expect to enter into a $75.0 million senior secured
revolving credit facility with a term of five years, which includes a borrowing
capacity for letters of credit in an aggregate amount not to exceed $20.0
million. We also have the option to increase commitments under the senior
secured revolving credit facility in an aggregate amount of up to $25.0 million.
See ‘‘Description of Other Indebtedness.”
(3) Does
not include any original issue discount.
(4) Does
not include adjustment for prepayment penalties and write off of deferred
financing costs relating to (1) above, net of tax.
This
communication is intended for the sole use of the person to whom it is provided
by the sender.
This
material is confidential and is for your information only and is not intended to
be used by anyone other than you. This information does not purport
to be a complete description of these securities or the offering.
This
communication is for informational purposes only and does not constitute an
offer to sell, or a solicitation of an offer to buy any security. No
offer to buy securities described herein can be accepted, and no part of the
purchase price thereof can be received, unless the person making such investment
decision has received and reviewed the information contained in the relevant
offering circular in making their investment decisions. This
communication is not intended to be a confirmation as required under Rule 10b-10
of the Securities Exchange Act of 1934, as amended. A formal
confirmation will be delivered to you separately. This notice shall
not constitute an offer to sell or solicitation to buy nor shall there be any
sale of the Notes in any state or jurisdiction in which such offer, solicitation
or sale would be unlawful. The Notes will be offered and sold to
qualified institutional buyers in the United States in reliance on Rule 144A
under the Securities Act of 1933, as amended (the “Securities Act”), and to
persons in offshore transactions in reliance on Regulation S under the
Securities Act. The Notes have not been registered under the
Securities Act or any state securities laws, and may not be offered or sold in
the United States or to, or for the account or benefit of, U.S. persons absent
registration or an applicable exemption from the registration
requirement.
ANY
DISCLAIMER OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS
COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER
NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING
SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
III -
5
SCHEDULE
IV
List of Guarantors and
Jurisdictions of Formation
|
Subsidiary
|
Jurisdiction of Formation
|
||
|
1.
|
Accent
Marketing Services, LLC
|
Delaware
|
|
|
2.
|
Xxxxxx
Xxxxxx Canada Inc.
|
Ontario
|
|
|
3.
|
Computer
Composition of Canada Inc.
|
Ontario
|
|
|
4.
|
CPB
Acquisition Inc.
|
Delaware
|
|
|
5.
|
Xxxxxxx
Xxxxxx & Bogusky LLC
|
Delaware
|
|
|
6.
|
Dotglu
LLC
|
Delaware
|
|
|
7.
|
Hello
Acquisition Inc.
|
Delaware
|
|
|
8.
|
KBP
Holdings LLC
|
Delaware
|
|
|
9.
|
Xxxxxxxxxxx
Bond & Partners LLC
|
Delaware
|
|
|
10.
|
Maxxcom
(USA) Holdings Inc.
|
Delaware
|
|
|
11.
|
Maxxcom
Inc. (ON)
|
Ontario
|
|
|
12.
|
Maxxcom
Inc. (US)
|
Delaware
|
|
|
13.
|
MDC
Acquisition Inc.
|
Delaware
|
|
|
14.
|
MDC
Corporate (US) Inc.
|
Delaware
|
|
|
15.
|
MDC/KBP
Acquisition Inc.
|
Delaware
|
|
|
16.
|
TargetCom
LLC
|
Delaware
|
|
|
17.
|
TC
Acquisition Inc.
|
Delaware
|
|
|
18.
|
Yamamoto
Xxxx Xxxxxxxxx, Inc.
|
Delaware
|
|
|
19.
|
ZG
Acquisition Inc.
|
Delaware
|
IV -
1
ANNEX
I
|
(1)
|
The
Securities have not been and will not be registered under the Act and may
not be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of
the Act. Each Purchaser represents that it has offered and sold
the Securities, and will offer and sell the Securities (i) as part of
their distribution at any time and (ii) otherwise until 40 days after the
later of the commencement of the offering and the Time of Delivery, only
in accordance with Rule 903 of Regulation S or Rule 144A under the
Act. Accordingly, each Purchaser agrees that neither it, its
affiliates nor any persons acting on its or their behalf has engaged or
will engage in any directed selling efforts with respect to the
Securities, and it and they have complied and will comply with the
offering restrictions requirement of Regulation S. Each
Purchaser agrees that, at or prior to confirmation of sale of Securities
(other than a sale pursuant to Rule 144A), it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the restricted
period a confirmation or notice to substantially the following
effect:
|
“The
Securities covered hereby have not been registered under the U.S. Securities Act
of 1933 (the “Securities Act”) and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons (i) as part of
their distribution at any time or (ii) otherwise until 40 days after the later
of the commencement of the offering and the closing date, except in either case
in accordance with Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meaning given to them by Regulation
S.”
Terms
used in this paragraph have the meanings given to them by Regulation
S.
Each
Purchaser further agrees that it has not entered and will not enter into any
contractual arrangement with any distributor (within the meaning of Regulation
S) with respect to the distribution or delivery of the Securities, except with
its affiliates or with the prior written consent of the Company.
|
(2)
|
Notwithstanding
the foregoing, Securities in registered form may be offered, sold and
delivered by the Purchasers in the United States and to U.S. persons
pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1)
above.
|
|
(3)
|
Each
Purchaser agrees that it will not offer, sell or deliver any of the
Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws
thereof, and that it will take at its own expense whatever action is
required to permit its purchase and resale of the Securities in such
jurisdictions. Each Purchaser understands that no action has
been taken to permit a public offering in any jurisdiction outside the
United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement
of the Securities to be published in any newspaper or periodical or posted
in any public place and not to issue any circular relating to the
Securities, except in any such case with Xxxxxxx, Xxxxx & Co.’s
express written consent and then only at its own risk and
expense.
|
A-I-1
ANNEX
II
Pursuant
to Section 8(d) of the Purchase Agreement, the accountants shall furnish letters
to the
Purchasers
to the effect that:
|
(i)
|
They
are an independent registered public accounting firm with respect to the
Company and its subsidiaries within the meaning of the Securities Exchange
Act of 1934 (the “Exchange Act”) and the applicable published rules and
regulations thereunder adopted by the Securities and Exchange Commission
and the Public Accounting Oversight Board (United States) under rule 101
of the American Institute of Certified Public Accountants’ Code of
Professional Conduct, and its interpretations and
rulings;
|
|
(ii)
|
In
our opinion, the consolidated financial statements and financial statement
schedules audited by us and included in the Offering Circular comply as to
form in all material respects with the applicable requirements of the
Exchange Act and the related published rules and
regulations;
|
|
(iii)
|
The
unaudited selected financial information with respect to the consolidated
results of operations and financial position of the Company for the three
most recent fiscal years included in the Offering Circular agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such three fiscal
years;
|
|
(iv)
|
On
the basis of limited procedures not constituting an audit in accordance
with generally accepted auditing standards, consisting of a reading of the
unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the
Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited
financial statements included in the Offering Circular, inquiries of
officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
|
|
(A)
|
the
unaudited consolidated statements of operations, consolidated balance
sheets and consolidated statements of cash flows included in the Offering
Circular are not in conformity with generally accepted accounting
principles applied on the basis substantially consistent with the basis
for the unaudited condensed consolidated statements of operations,
consolidated balance sheets and consolidated statements of cash flows
included in the Offering Circular;
|
|
(B)
|
any
other unaudited income statement data and balance sheet items included in
the Offering Circular do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included in the
Offering Circular;
|
|
(C)
|
the
unaudited financial statements which were not included in the Offering
Circular but from which were derived any unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement
data and balance sheet items included in the Offering Circular and
referred to in clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included in the Offering
Circular;
|
A-II-1
|
(D)
|
as
of a specified date not more than five days prior to the date of such
letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock pursuant to existing employment
agreements, stock options, restricted stock agreements, restricted stock
unit agreements and stock appreciation rights and other employee benefit
plans in the ordinary course of business or pursuant to earn-outs or upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest financial statements included in the Offering
Circular) or any increase in the consolidated long-term debt of the
Company and its subsidiaries, or any decreases in consolidated net current
assets or shareholders’ equity including redeemable non-controlling
interests or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet included in the
Offering Circular except in each case for changes, increases or decreases
which the Offering Circular discloses have occurred or may occur or which
are described in such letter; and
|
|
(E)
|
for
the period from the date of the latest financial statements included in
the Offering Circular to the specified date referred to in clause (D)
there were any decreases in consolidated net revenues or operating income
or any increases in the total of consolidated net loss or other items
specified by the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for decreases
or increases which the Offering Circular discloses have occurred or may
occur or which are described in such letter;
and
|
|
(v)
|
In
addition to the examination referred to in their report(s) included in the
Offering Circular and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii) and (iv)
above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company, the Guarantors and its
subsidiaries, which appear in the Offering Circular, and have compared
certain of such amounts, percentages and financial information with the
accounting records of the Company, the Guarantors and its subsidiaries and
have found them to be in agreement.
|
A-II-2
ANNEX IV
[FORM OF STB
OPINION]
A-IV-1
ANNEX V
[FORM OF NEGATIVE
ASSURANCE STATEMENT]
A-V-1
ANNEX VI
[FORM OF CHIEF FINANCIAL
OFFICER'S CERTIFICATE]
A-VI-1
