LIMITED PARTNERSHIP UNIT PURCHASE AGREEMENT (13%)
Exhibit
10.18.2
LIMITED PARTNERSHIP UNIT PURCHASE
AGREEMENT (this “Agreement”) dated as of
November 30, 2010, by and among MDC PARTNERS INC., a Canadian
corporation (the “Purchaser”), 2265178 Ontario Limited
(“Capital C Holdco”),
and XXXX XXXXXXX, XXXXXXXX
XXXXXXXXX, XXXXXXX XXXXX and XXX XXXXX (collectively, the “Capital C Principals” and
each, a “Capital C
Principal”).
WITNESSETH:
WHEREAS, Newport Holdco
Partners Holding LP (“Newport”) and the Capital C
Principals formed Capital C
Partners LP ("Capital C
LP") for the purpose of demerging the businesses of Capital C
Communications LP ("Communications Holdco"), which
consisted of the Capital C business (the "Capital C Business") and the
Kenna business (see reorganization chart attached as Exhibit A to the Newport
Purchase Agreement (the "Reorganization");
AND WHEREAS immediately prior
to the execution and delivery of this Agreement, Newport, Communications Holdco,
the Capital C Principals and the Kenna Principals consummated the transactions
contemplated by the Reorganization. In connection with such
Reorganization, Newport and the Capital C Principals caused Communications
Holdco to transfer all of the assets utilized as the Capital C Business and
certain disclosed liabilities and obligations and the Capital C Business to
Capital C LP, pursuant to an Assignment and Assumption Agreement (the "Conveyance
Documents");
AND WHEREAS, immediately
following the Reorganization, Newport held 67.13% of the partnership units of
Capital C LP (the “67%
Purchased Units”), and Purchaser purchased such 67% Purchased Units from
Newport pursuant to a Limited Partnership Purchase Agreement dated the date
hereof (the “Newport Purchase
Agreement”), such that after giving effect to such purchase, Purchaser
owned 67.13% of Capital C LP, Capital C Holdco owned 20% of Capital C LP and
2265179 Ontario Limited, a wholly owned subsidiary of Capital C Holdco (“2265179”) owned 12.86% of the
partnership units of Capital C LP (the “13% Units”);
AND WHEREAS, the issued
capital of 2265179 consists of 101 common shares (the “Purchased Shares”), all of
which are legally and beneficially owned by Capital C Holdco;
AND WHEREAS, Capital C Holdco
now desires to sell, and Purchaser desires to purchase, the Purchased Shares,
such that after giving effect to such purchase, Purchaser will own 67.13% of
Capital C LP directly and 12.87% of Capital C LP through ownership of 2265179
which owns the 13% Units, beneficially and of record, aggregating a 80.0%
ownership interest in Capital C LP and Capital C Holdco will own 20% of Capital
C LP;
AND WHEREAS simultaneous with
the execution and delivery of this Agreement, the Purchaser, Capital C Holdco,
the Capital C Principals and Capital C LP are executing and delivering an
amended and restated limited partnership agreement in respect of Capital C LP
(the “Capital C LP
Agreement”);
NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
ARTICLE I
SALE OF THE PURCHASED
SHARES
Section 1.1 Sale of
the Purchased Shares. Subject to the terms and conditions
herein stated, Capital C Holdco agrees to sell, assign, transfer and deliver to
the Purchaser on the Closing Date (as defined in Section 2.2), and the
Purchaser agrees to purchase from Capital C Holdco on the Closing Date,
the Purchased Shares.
ARTICLE II
PURCHASE PRICE AND
CLOSING
Section 2.1 Purchase
Price; Contingent Payments. In full consideration for the
purchase by the Purchaser of the 13% Purchased Units, the purchase price (the
"Purchase Price") shall
be calculated and paid by the Purchaser to Capital C Holdco, as set forth in
this Section 2.1 below.
(a) First Contingent
Payment. Subject to clauses (h), (i) and (j) below, within five business
days after the Annual Determination for calendar year 2010 and any adjustments
thereto shall have become binding on the parties in accordance with the Capital
C LP Agreement, the Purchaser shall pay to Capital C Holdco the First Contingent
Payment ("FAP"),
calculated as follows:
FAP = 36% x 2010 PBT
; provided, however, that for
purposes of calculating the FAP, “2010 PBT” shall be calculated for the period
commencing on the Closing Date and ending on December 31, 2010.
(b) Second Contingent
Payment. Subject to clauses (h), (i) and (j) below, within five business
days after the Annual Determination for calendar year 2011 and any adjustments
thereto shall have become binding on the parties in accordance with the Capital
C LP Agreement, the Purchaser shall pay to Capital C Holdco the Second
Contingent Payment ("SAP"), calculated as
follows:
SAP =
Applicable Percentage x 36% x 2011 PBT
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; provided, however, in the event
that 2011 PBT were less than $3,400,000, then SAP shall equal (A) the excess, if
any, of (i) 2011 PBT over (ii) $2,040,000, multiplied by (B) 90%, multiplied by
(C) the Applicable Percentage;
provided further, however, in the event
that 2011 PBT were greater than $4,000,000 (such excess, the “2011 Excess”),
then the Purchaser shall pay to Capital C Holdco an additional payment
calculated as follows: the Applicable Multiplier (as defined below) multiplied
by the 2011 Excess (the “2011 Top-Up”).
(c) Third Contingent
Payment. Subject to clauses (h), (i) and (j) below, within five business
days after the Annual Determination for calendar year 2012 and any adjustments
thereto shall have become binding on the parties in accordance with the Capital
C LP Agreement, the Purchaser shall pay to Capital C Holdco the Third Contingent
Payment ("TAP"),
calculated as follows:
TAP =
Applicable Percentage x 36% x 2012 PBT
; provided, however, in the event
that 2012 PBT were less than $3,400,000, then TAP shall equal (A) the excess, if
any, of (i) 2012 PBT over (ii) 2,040,000, multiplied by (B) 90%, multiplied by
(C) the Applicable Percentage;
provided further, however, in the event
that (x) 2011 PBT minus (y) (i) SAP divided by the Applicable Percentage
applicable to SAP divided by (ii) 90%, were less than $2,040,000, then for
purposes of the calculations of TAP above, 2012 PBT shall be reduced by the
amount of such shortfall;
provided further, however, in the event
that (x) 2011 PBT minus (y) (i) SAP divided by the Applicable Percentage
applicable to SAP divided by (ii) 90%, were greater than $2,040,000, and 2012
PBT were greater than $4,000,000 (such excess, the “2012 Excess”), then the
Purchaser shall pay to Capital C Holdco an additional payment calculated as
follows: the Applicable Multiplier multiplied by the 2012 Excess (the “2012
Top-Up”).
(d) Fourth Contingent
Payment. Subject to clauses (h), (i) and (j) below, within five business
days after the Annual Determination for calendar year 2013 and any adjustments
thereto shall have become binding on the parties in accordance with the Capital
C LP Agreement, the Purchaser shall pay to Capital C Holdco the Fourth
Contingent Payment ("FOAP"), calculated as
follows:
FOAP =
Applicable Percentage x 36% x 2013 PBT
; provided, however, in the event
that 2013 PBT were less than $3,400,000, then FOAP shall equal (A) the excess,
if any, of (i) 2013 PBT over (ii) 2,040,000, multiplied by (B) 90%, multiplied
by (C) the Applicable Percentage;
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provided further, however, in the event
that (x) the sum of 2011 PBT and 2012 PBT minus (y) (i) the sum of (A) SAP
divided by the Applicable Percentage applicable to SAP and (B) TAP divided by
the Applicable Percentage applicable to TAP divided by (ii) 90%, were less than
$4,080,000, then for purposes of the calculations of FOAP above, 2013 PBT shall
be reduced by the amount of such shortfall;
provided further, however, in the event
that (x) the sum of 2011 PBT and 2012 PBT minus (y) (i) the sum of (A) SAP
divided by the Applicable Percentage applicable to SAP and (B) TAP divided by
the Applicable Percentage applicable to TAP divided by (ii) 90%, were greater
than $4,080,000, and 2013 PBT were greater than $4,000,000 (such excess, the
“2013 Excess”), then the Purchaser shall pay to Capital C Holdco an additional
payment calculated as follows: the Applicable Multiplier multiplied by the 2013
Excess (the “2013 Top-Up”).
(e) Fifth Contingent
Payment. Subject to clauses (h), (i) and (j) below, within
five business days after the Annual Determination for calendar year 2014 and any
adjustments thereto shall have become binding on the parties in accordance with
the Capital C LP Agreement, the Purchaser shall pay to Capital C Holdco the
Fifth Contingent Payment ("FIAP"), calculated as
follows:
FIAP =
Applicable Percentage x 36% x 2014 PBT
; provided, however, in the event
that 2014 PBT were less than 3,400,000, then FIAP shall equal (A) the excess, if
any, of (i) 2014 PBT over (ii) $2,040,000, multiplied by (B) 90%, multiplied by
(C) the Applicable Percentage;
; provided further, however, in the event
that (x) the sum of 2011 PBT, 2012 PBT and 2013 PBT minus (y) (i) the sum of (A)
SAP divided by the Applicable Percentage applicable to SAP, (B) TAP divided by
the Applicable Percentage applicable to TAP and (C) FOAP divided by the
Applicable Percentage applicable to FOAP divided by (ii) 90%, were less than
$6,120,000, then for purposes of the calculations of FIAP above, 2014 PBT shall
be reduced by the amount of such shortfall;
provided further, however, in the event
that (x) the sum of 2011 PBT, 2012 PBT and 2013 PBT minus (y) (i) the sum of (A)
SAP divided by the Applicable Percentage applicable to SAP, (B) TAP divided by
the Applicable Percentage applicable to TAP and (C) FOAP divided by the
Applicable Percentage applicable to FOAP divided by (ii) 90%, were greater than
$6,120,000, and 2014 PBT were greater than $4,000,000 (such excess, the “2014
Excess”), then the Purchaser shall pay to Capital C Holdco an additional payment
calculated as follows: the Applicable Multiplier multiplied by the 2014 Excess
(the “2014 Top-Up”).
(f) Last Contingent
Payment. Subject to clauses (h), (i) and (j) below, within
five business days after the Annual Determination for calendar year 2015 and any
adjustments thereto shall have become binding on the parties in accordance with
the Capital C LP Agreement, the Purchaser shall pay to Capital C Holdco the Last
Contingent Payment ("LAP"), calculated as
follows:
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LAP =
Applicable Percentage x 36% x 2015 PBT
; provided, however, in the event
that 2015 PBT were less than $3,400,000, then LAP shall equal (A) the excess, if
any, of (i) 2015 PBT over (ii) $2,040,000, multiplied by (B) 90%, multiplied by
(C) the Applicable Percentage;
; provided further, however, in the event
that (x) the sum of 2011 PBT, 2012 PBT, 2013 PBT and 2014 PBT minus (y) (i) the
sum of (A) SAP divided by the Applicable Percentage applicable to SAP, (B) TAP
divided by the Applicable Percentage applicable to TAP, (C) FOAP divided by the
Applicable Percentage applicable to FOAP and (D) FIAP divided by the Applicable
Percentage applicable to FIAP, divided by (ii) 90%, were less than $8,160,000,
then for purposes of the calculations of LAP above, 2015 PBT shall be reduced by
the amount of such shortfall;
provided further, however, in the event
that (x) the sum of 2011 PBT, 2012 PBT, 2013 PBT and 2014 PBT minus (y) (i) the
sum of (A) SAP divided by the Applicable Percentage applicable to SAP, (B) TAP
divided by the Applicable Percentage applicable to TAP, (C) FOAP divided by the
Applicable Percentage applicable to FOAP and (D) FIAP divided by the Applicable
Percentage applicable to FIAP, divided by (ii) 90%, were greater than
$8,160,000, and 2015 PBT were greater than $4,000,000 (such excess, the “2015
Excess”), then the Purchaser shall pay to Capital C Holdco an additional payment
calculated as follows: the Applicable Multiplier multiplied by the 2015 Excess
(the “2015 Top-Up”).
(g) No Negative
Payments. In the event that the calculation of FAP, SAP, TAP,
FOAP, FIAP or LAP, as the case may be, results in an amount which is less than
zero, such Purchase Price component shall be deemed to be zero.
(h) Additional Top-Up
Payments. Capital C Holdco and/or management (to the extent management
has either purchased or received from Capital C Holdco its equity interests)
shall be eligible to receive the 2011 Top-Up, 2012 Top-Up, 2013 Top-Up, 2014
Top-Up or 2015 Top-Up (collectively, the “Top-Up Payments”) within
thirty (30) days after the Annual Determination (as defined below) has been
determined for each calendar year commencing in 2011 and continuing only during
the period of time in which Capital C Holdco and/or management (to the extent
management has either purchased or received from Capital C Holdco its equity
interests) continues to own equity interests in Capital C LP. For the
purposes of calculating any Top-Up Payment, the “Applicable Multiplier” shall
mean 10%; provided, however, that if at any time Capital C Holdco and/or
management (to the extent management has either purchased or received from
Capital C Holdco its equity interests) owns less than 20% of the limited
partnership interests in Capital C LP, then the Applicable Multiplier shall be
reduced on a pro rata basis to reflect such reduced equity
holdings.
(i) Payment of the Purchase
Price; Limitations and Conditions Precedent to Contingent Payments and Top-Up
Payments. Payment of each
component of the Purchase Price and any Contingent Payment or Top-Up Payments
that is required to be made under this Section 2.1 shall be
made in Canadian dollars by the Purchaser by direct wire transfer to the account
of Capital C Holdco, as set forth on Schedule 2.1 (or to such other
account as Capital C Holdco may notify the Purchaser in
writing). Notwithstanding the foregoing provisions in this Section
2.1, the Purchaser shall not be obligated to pay any Contingent Payments or
Top-Up Payments to Capital C Holdco unless and until (i) Capital C LP has
Working Capital of at least the Working Capital Target for a continuous period
of at least 6 months, (ii) Capital C LP has paid Capital C Holdco the
Pre-Closing Undistributed Profit Amount in accordance with the Capital C LP
Agreement and (iii) Capital C LP has sufficient cash on-hand to pay
distributions due in accordance with the Capital C LP
Agreement.
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(j) Termination of Contingent
Payments. Upon the exercise and closing of a Call option or
the consummation of a sale to a Prospective Purchaser (as such terms are defined
in the Capital C LP Agreement) pursuant to the Capital C LP Agreement
(collectively, a "Sale
Event"), Capital C Holdco’s right to receive any Contingent Payments
based upon PBT for the calendar year in which the applicable Sale Event occurred
or for any calendar year(s) thereafter, shall cease, and the obligation of the
Purchaser to pay to Capital C Holdco any such Contingent Payments shall
terminate, contemporaneously with the applicable Sale Event.
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2.2
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Definitions.
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(i)
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"Contingent Payments"
shall mean the aggregate amount of the payments made in Sections 2.1(a)
through (f).
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(ii)
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“Annual Determination”
shall have the meaning ascribed to such term in the Capital C LP
Agreement.
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(iii)
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"Applicable Percentage"
shall mean, with respect to any Contingent Payment, a percentage equal to
the result of (A) the quotient of (x) the average number of LP Units of
Capital C LP owned by Capital C Holdco during the calendar year for which
PBT is used to calculate such Contingent Payment (such average being
determined as the quotient of (1) the sum of the products of the varying
numbers of LP Units so owned by Capital C Holdco by the number of days in
such year each such number was owned by Capital C Holdco, and (2) 365 or
366 days, as applicable for such year), divided by (y) the average total
number of outstanding Class A Units and LP Units for such year (calculated
on the same basis as provided in the parenthetical under (A)(x) above),
divided by (B) 20%.
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(iv)
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"GAAP" shall mean United
States generally accepted accounting principles consistently
applied.
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(v)
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“Pre-Closing Undistributed
Profit Amount” shall mean the amount of undistributed profits owed
to the Capital C Principals from Communications Holdco immediately prior
to the consummation of the Reorganization, which amount shall be
determined as of the Closing Date in accordance with the Capital C LP
Agreement and which amount is estimated at Closing to be equal to
$627,000.
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(vi)
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"PBT" with respect to any
year, shall mean the consolidated net income (loss) of Capital C LP before
provision for any income taxes for such year, determined in accordance
with GAAP; provided, however, that for purposes of calculating PBT for
2010, PBT shall be deemed to include the PBT of the Capital C Business for
the period from the Closing Date through December 31,
2010.
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(vii)
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“Working Capital” shall
mean current assets minus current liabilities as determined in accordance
with GAAP.
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(viii)
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“Working Capital Target”
shall mean the sum of (x) $1,250,000 plus (b) the Pre-Closing
Undistributed Profit Amount (to the extent not yet distributed in
accordance with the Capital C LP
Agreement).
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Section 2.3 Closing. The
closing of the transactions contemplated by this Agreement (the "Closing") shall take place
simultaneously with the execution and delivery of this Agreement on the date
hereof, at the offices of MDC Partners Inc., 00 Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0, or by the exchange of documents and instruments by mail,
courier, telecopy and wire transfer to the extent mutually acceptable to the
parties hereto (such date is herein referred to as the "Closing Date").
ARTICLE III
REPRESENTATIONS OF CAPITAL C
HOLDCO AND THE CAPITAL C PRINCIPALS
Capital
C Holdco and the Capital C Principals, jointly and severally, represent and
warrant to and with the Purchaser, as follows:
Section 3.1 Execution
and Validity of Agreements.
3.1.1 Execution and
Validity. Capital C Holdco has the full legal right and
capacity to enter into this Agreement and to perform its obligations
hereunder. This Agreement has been duly and validly executed and
delivered by Capital C Holdco and, assuming due authorization, execution and
delivery by the Purchaser, constitutes a legal, valid and binding obligation of
Capital C Holdco, enforceable against Capital C Holdco in accordance with its
terms.
3.1.2 No
Restrictions. There is no suit, action, claim, investigation
or inquiry by any court, tribunal, arbitrator, authority, agency, commission,
official or other instrumentality of Canada, any foreign country or any domestic
or foreign state, county, city or other political subdivision ("Governmental or Regulatory
Authority"), and no legal, administrative or arbitration proceeding is
pending or, to the Capital C Principals' knowledge, threatened against Capital C
Holdco with respect to the execution, delivery and performance of this Agreement
or the transactions contemplated hereby or any other agreement entered into by
Capital C Holdco in connection with the transactions contemplated
hereby.
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3.1.3 Non-Contravention; Approvals
and Consents. The execution, delivery and performance by the
Capital C Principals and Capital C Holdco of their respective obligations under
this Agreement and the Conveyance Documents and the consummation of the
transactions contemplated hereby and thereby, will not (a) violate, conflict
with or result in the breach of any provision of the declaration and limited
partnership agreement (or other comparable documents) of Capital C LP or Capital
C Holdco; (b) result in the violation by Capital C LP or Capital C Holdco of any
Laws or Orders of any Governmental or Regulatory Authority, or (c) conflict
with, result in a violation or breach of, constitute (with or without notice or
lapse of time or both) a default under, or require Capital C LP or Capital C
Holdco to obtain any consent, approval or action of, make any filing with or
give any notice to, or result in or give to any Person any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Lien upon any of their respective
assets or properties, or under any of the terms, conditions or provisions of any
Contract to which Capital C LP or Capital C Holdco is a party or by which
Capital C LP or Capital C Holdco or any of their respective assets or properties
are or were bound. Except as set forth in Schedule 3.2.10, no
consent, approval or action of, filing with or notice to any Governmental or
Regulatory Authority or other Person is necessary or required under any of the
terms, conditions or provisions of any Law or Order of any Governmental or
Regulatory Authority or any contract to which Capital C LP or Capital C Holdco
is a party, or by which their respective assets or properties were or are bound,
for the execution and delivery of this Agreement or the Conveyance Documents,
the performance by Capital C LP or Capital C Holdco of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby.
3.2 Proceeds
of Purchase Price. Capital
C Holdco has not agreed or made any written or verbal commitment to give any
employee of Capital C LP (or any family member or any affiliate of the employee
of Capital C LP) any portion or share of the Purchase Price in the form of a
bonus, gift, award, or any similar type of remuneration. The Capital
C Principals agree that, from and after the date hereof, no portion or proceeds
of the Purchase Price shall be used to compensate or give to any employee of
Capital C LP (or any family member of any employee of Capital C LP) a bonus,
gift, award, or any similar type of remuneration.
3.3 Limited
Partnership Units and Purchased Shares Free and Clear of All Liens; No Options
or Restrictions; Subsidiaries and Investments. Immediately prior
to the consummation of the transactions contemplated by this Agreement, (a)
Capital C Holdco owns of record and beneficially has valid title to the
Purchased Shares, and (b) 2265179 owns of record and beneficially has valid
title to the 13% Units of Capital C LP, and such ownership, in each case, is
free and clear or all Liens. There are no outstanding subscriptions,
options, warrants, rights (including "phantom stock rights"), calls,
commitments, understandings, conversion rights, rights of exchange, plans or
other agreements of any kind providing for the purchase, issuance or sale of any
equity or ownership or proprietary interest of 2265179 or the 13% Units, or
which grants any Person (other than 2265179 or the Capital C Principals) the
right to share in the earnings of Capital C LP. 2265179 does not,
directly or indirectly, own any equity interest in or have any voting rights
with respect to any Person other than the 13% Units. There are no
outstanding subscriptions, options, rights, warrants, calls, commitments or
arrangements of any kind to acquire any of the Purchased Shares or 13% Units and
there are no agreements or understandings with respect to the sale or transfer
of any of the Purchase Shares or 13% Units other than this Agreement. There is
no suit, action, claim, investigation or inquiry by any Governmental or
Regulatory Authority, and no legal, administrative or arbitration proceeding
pending or, to the knowledge of Capital C Holdco or the Capital C Principals,
threatened, against 2265179, Capital C Holdco or Capital C LP or any of the
Purchased Shares or any of the 13% Units, with respect to the execution,
delivery and performance of this Agreement or the Conveyance Documents or the
transactions contemplated hereby or thereby or any other agreement entered into
by Capital C Holdco in connection with the transactions contemplated hereby or
thereby.
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Section
3.4 Brokers. No
broker, finder, agent or similar intermediary has acted on behalf of Capital C
Holdco in connection with this Agreement or the transactions contemplated
hereby, and no brokerage commissions, finder's fees or similar fees or
commissions are payable by the Capital C Holdco or the Capital C Principals in
connection therewith based on any agreement, arrangement or understanding with
either of them.
Section 3.5 Reaffirmation
of Representations and Warranties. Capital C Holdco and the
Capital C Principals hereby reaffirm and restate, to Purchaser, each of their
respective representations and warranties set forth in Article III.C. of the
Newport Purchase Agreement, which representations and warranties shall be true
and correct as of the Closing Date.
ARTICLE IV
REPRESENTATIONS OF THE
PURCHASER
The Purchaser represents, warrants and
agrees to and with Capital C Holdco as follows:
Section 4.1 Existence
and Good Standing. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the Province
of Ontario with full corporate power and authority to own its property and to
carry on its business all as and in the places where such properties are now
owned or operated or such business is now being conducted.
Section 4.2 Execution
and Validity of Agreement. The Purchaser has
the full corporate power and authority to make, execute, deliver and perform
this Agreement and the transactions contemplated hereby. The
execution and delivery of this Agreement by the Purchaser and the consummation
of the transactions contemplated hereby have been duly authorized by all
required corporate action on behalf of the Purchaser. This Agreement
has been duly and validly executed and delivered by the Purchaser and, assuming
due authorization, execution and delivery by Capital C Holdco and the Capital C
Principals, constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against it in accordance with its terms.
Section 4.3 Litigation. There
is no action, suit, proceeding at law or in equity by any Person, or any
arbitration or any administrative or other proceeding by or before (or to the
knowledge of the Purchaser, any investigation by), any Governmental or
Regulatory Authority pending or, to the knowledge of the Purchaser, threatened
against the Purchaser or any of their respective properties or rights with
respect to this Agreement. The Purchaser is not subject to any Order
entered in any lawsuit or proceeding with respect to this Agreement or the
transactions contemplated hereby.
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Section 4.4 Non-Contravention;
Approvals and Consents. The execution, delivery and
performance by the Purchaser of its obligations hereunder and the consummation
of the transactions contemplated hereby will not (a) violate, conflict with or
result in the breach of any provision of the certificate of incorporation and
bylaws of the Purchaser, (b) result in the violation by the Purchaser of any
Laws or Orders of any Governmental or Regulatory Authority applicable to the
Purchaser or any of its assets or properties, or (c) result in a violation or
breach of, constitute (with or without notice or lapse of time or both) a
default under, or require the Purchaser to obtain any consent, approval or
action of, make any filing with or give any notice to, or result in or give to
any Person any right of payment or reimbursement, termination, cancellation,
modification or acceleration of, or, except for such Liens as may be created in
connection with an MDC Financing (as defined in Section 6.1 hereof),
result in the creation or imposition of any Lien upon any of the respective
assets or properties of the Purchaser, under any of the terms, conditions or
provisions of any Contract to which the Purchaser is a party or by which the
Purchaser or any of its assets or properties are bound. No consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority or
other Person is necessary or required under any of the terms, conditions or
provisions of any Law or Order of any Governmental or Regulatory Authority or
any Contract to which the Purchaser is a party or by which the Purchaser or any
of its assets or properties are bound for the execution and delivery of this
Agreement by the Purchaser, the performance by the Purchaser of its obligations
hereunder or the consummation by the Purchaser of the transactions contemplated
hereby
Section 4.5 Brokers. No
broker, finder, agent or similar intermediary has acted on behalf of the
Purchaser in connection with this Agreement or the transactions contemplated
hereby, and no brokerage commissions, finder's fees or similar fees or
commissions are payable by the Purchaser in connection therewith based on any
agreement, arrangement or understanding with either of them.
ARTICLE V
ACTIONS AT
CLOSING
Simultaneously
herewith:
Section 5.1 Tax
Restructuring Proceedings. All proceedings to be taken in connection with
the transactions contemplated by this Agreement, including, without limitation,
the pre-closing transactions constituting the Reorganization, the Conveyance
Documents and all documents incident thereto must be reasonably satisfactory in
form and substance to the Purchaser and its counsel, and the Purchaser shall
have received copies of all such documents and other evidences as it or its
counsel reasonably requested in order to establish the consummation of such
transactions and the taking of all proceedings in connection
therewith.
Section 5.
2 Certified
Resolutions. Capital C Holdco shall have delivered to the
Purchaser a copy of the resolutions of authorizing the execution, delivery and
performance of this Agreement and the Conveyance Documents and the transactions
contemplated hereby and thereby, certified by one of its officers.
Section 5.3 Limited
Partnership Agreement. The
Capital C Principals and the Purchaser shall have entered into the Amended and
Restated Capital C LP Agreement.
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ARTICLE VI
OTHER
AGREEMENTS
Section 6.1 MDC
Financing. Notwithstanding
anything to the contrary contained in this Agreement, in consideration for the
payment of the Purchase Price under Section 2.1 hereof
and for other good and valuable consideration, the parties hereto hereby (i)
agree that MDC Partners and/or one or more of its affiliates, in connection with
its or any of its affiliates' current or future credit facilities, debt
offerings (including, without limitation, senior, subordinated or mezzanine debt
issued in a public offering or a Regulation S or Rule 144A private placement) or
any other debt agreements, shall be entitled to: (w) pledge or grant a security
interest in or otherwise have a lien placed upon the Purchaser's Limited
Partnership Units; (x) pledge or grant a security interest in or to otherwise
have a lien placed upon the assets and properties of Capital C LP, and/or their
respective subsidiaries; (y) assign all of its rights, benefit, title and
interest in Capital C LP and distributions therefrom, including, without
limitation, all rights and claims pursuant to and under the Call and/or Sale
Request (as such terms are defined in the applicable Limited Partnership
Agreement) to or to an agent or representative on behalf of, its bank or lender
or group of banks or group of lenders from time to time (as applicable and
collectively, the "Lender"); and (z) have Capital
C LP provide guarantees and such other ancillary security and related
documentation as reasonably required by the Lender from time to time (the items
in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii)
consent unconditionally to (x) the granting of all security and the execution of
all documents required in connection with an MDC Financing and the enforcement
thereof, where applicable, by the Lender; and (y) any transaction by which the
Lender becomes the absolute legal and beneficial owner of any limited
partnership Units which have been pledged or assigned to it.
Section
6.2 Equity Securities of Capital
C Holdco.
(a) As
long as Capital C Holdco beneficially owns any equity interests in Capital C LP,
no Capital C Principals shall sell or in any other way transfer, assign,
distribute, pledge, encumber or otherwise dispose of any of the equity
securities of Capital C Holdco or permit Capital C Holdco to issue any
additional equity securities, other than (i) transfers among the Capital C
Principals, (ii) transfers to Capital C employees or (iii) the issuance of
shares to Capital C LP employees, in each case only with the prior written
consent of MDC Partners.
(b) From
and after the Closing, Capital C Holdco covenants and agrees that it shall not,
directly or indirectly (i) authorize, create, issue, amend or modify any equity
interests (whether common or preferred), subscriptions, options, warrants,
rights (including "phantom equity rights"), calls, commitments, understandings,
conversion rights, rights of exchange, plans or other agreements of any kind,
providing for the purchase, issuance or sale of any membership interests,
profits interests, capital interests or equity interests of any kind in Capital
C Holdco; or (ii) provide compensation to any employee of Capital C LP or any
subsidiary, if any, except to the extent such employee was entitled or eligible
to receive such compensation at the time of, and as a result of, the
Closing. Capital C Holdco further covenants and agrees that it shall
not, directly or indirectly modify or amend Capital C Holdco's Articles of
Incorporation (as amended through the Closing Date), a copy of each of which is
attached hereto, without the prior written consent of MDC
Partners.
11
ARTICLE VII
SURVIVAL;
INDEMNITY
Section 7.1 Survival. Notwithstanding
any right of any party hereto fully to investigate the affairs of any other
party, and notwithstanding any knowledge of facts determined or determinable
pursuant to such investigation or right of investigation, each party hereto
shall have the right to rely fully upon the representations, warranties,
covenants and agreements of the other parties contained in this Agreement and
the Schedules, if any, furnished by any other party pursuant to this Agreement,
or in any certificate or document delivered at the Closing by any other
party. Subject to the limitations set forth in Section 7.6, the
respective representations, warranties, covenants and agreements of Capital C
Holdco, the Capital C Principals and the Purchaser contained in this Agreement
shall survive the Closing.
Section 7.2 Obligation
of Capital C Holdco and the Capital C Principals to
Indemnify.
7.2.1 General
Indemnity. Subject to the limitations contained in Sections 7.6.1 and
7.6.2, Capital
C Holdco and the Capital C Principals hereby agree, jointly and severally, to
indemnify the Purchaser and its affiliates, stockholders, officers, directors,
employees, agents, representatives and successors, permitted assignees of the
Purchaser and their affiliates (individually, a "Purchaser Indemnified Party"
and collectively, the "Purchaser Indemnified
Parties") against, and to protect, save and keep harmless the Purchaser
Indemnified Parties from, and to pay on behalf of or reimburse the Purchaser
Indemnified Parties as and when incurred for, any and all liabilities (including
liabilities for Taxes), obligations, losses, damages, penalties, demands,
claims, actions, suits, judgments, settlements, penalties, interest,
out-of-pocket costs, expenses and disbursements (including reasonable costs of
investigation, and reasonable attorneys', accountants' and expert witnesses'
fees) of whatever kind and nature (collectively, "Losses"), that may be imposed
on or incurred by any Purchaser Indemnified Party as a consequence of, in
connection with, incident to, resulting from or arising out of or in any way
related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of
any warranty or representation contained in Article III hereof or in any
certificate delivered by Capital C Holdco or the Capital C Principals at the
Closing or otherwise in connection herewith; (b) any action, demand, proceeding,
investigation or claim by any third party (including any Governmental or
Regulatory Authority) against or affecting any Purchaser Indemnified Party which
may give rise to or evidence the existence of or relate to a misrepresentation
or breach of any of the representations and warranties of Capital C Holdco or
the applicable Capital C Principals contained in Article III hereof or in any
certificate delivered by Capital C Holdco or the applicable Capital C Principals
at the Closing or otherwise in connection herewith; (c) any breach or failure by
Capital C Holdco or the applicable Capital C Principals to comply with, perform
or discharge any obligation, agreement or covenant by Capital C Holdco or the
Capital C Principals contained in this Agreement; or (d) any liability or
obligation or any assertion against any Purchaser Indemnified Party, arising out
of or relating, directly or indirectly, to any Excluded Asset or any Retained
Liability (as such terms are defined in the Conveyance Documents) or other
liability arising, in whole or in part, out of the conduct of the business of
Communications Holdco or any of its subsidiaries or successors, if any, prior to
the Closing except for the Assumed Liabilities (as such term is defined in the
Conveyance Documents).
12
7.2.2 Losses. The
term "Losses" as used in
this Article VII is not limited to matters asserted by third parties against any
Purchaser Indemnified Party but includes Losses incurred or sustained by a
Purchaser Indemnified Party in the absence of Third Party Claims (as defined in
Section 7.4.2
hereof).
Section 7.3 Obligation
of the Purchaser to Indemnify. Subject to the limitations set
forth in Section
7.6.3 hereof, the Purchaser hereby agrees to indemnify Capital C Holdco,
Capital C and the Capital C Principals (individually a "Company Indemnified Party" and
collectively, the "Company
Indemnified Parties") against, and to protect,
save and keep harmless the Company Indemnified Parties from, and to pay on
behalf of or reimburse the Company Indemnified Parties as and when incurred for,
any and all Losses that may be imposed on or incurred by the Company Indemnified
Parties as a consequence of, in connection with, incident to, resulting from or
arising out of or in any way related to or by virtue of: (a) any
misrepresentation, inaccuracy or breach of any warranty or representation of the
Purchaser contained in Article IV hereof or in any certificate delivered by the
Purchaser at the Closing; or (b) any action, demand, proceeding, investigation
or claim by any third party (including any Governmental or Regulatory Authority)
against or affecting any Company Indemnified Party which may give rise to or
evidence the existence of or relate to a misrepresentation or breach of any of
the representations and warranties of the Purchaser contained in Article IV
hereof or in any certificate delivered by the Purchaser at the Closing; or (c)
any breach or failure by the Purchaser to comply with, perform or discharge any
obligation, agreement or covenant by the Purchaser contained in this
Agreement.
Section
7.4 Indemnification
Procedures.
7.4.1 Non-Third Party
Claims.
(a) In
the event that any Person entitled to indemnification under this Agreement (an
"Indemnified Party")
asserts a claim for indemnification which does not involve a Third Party Claim
(as defined in Section
7.4.2) (a "Non-Third
Party Claim"), against which a Person is required to provide
indemnification under this Agreement (an "Indemnifying Party"), the
Indemnified Party shall give written notice to the Indemnifying Party (the
"Non-Third Party Claim
Notice"), which Non-Third Party Claim Notice shall (i) describe the claim
in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and
to the extent feasible) of the Losses that have been or may be suffered by the
Indemnified Party.
13
(b) The
Indemnifying Party may acknowledge and agree by written notice (the "Non-Third Party Acknowledgement of
Liability") to the Indemnified Party to satisfy the Non-Third Party Claim
within 30 days of receipt of the Non-Third Party Claim Notice. In the
event that the Indemnifying Party disputes the Non-Third Party Claim, the
Indemnifying Party shall provide written notice of such dispute (the "Non-Third Party Dispute
Notice") to the Indemnified Party within 30 days of receipt of the
Non-Third Party Claim Notice (the "Non-Third Party Dispute
Period"), setting forth a reasonable basis of such dispute. In
the event that the Indemnifying Party shall fail to deliver the Non-Third Party
Acknowledgement of Liability or Non-Third Party Dispute Notice within the
Non-Third Party Dispute Period, the Indemnifying Party shall be deemed to have
acknowledged and agreed to pay the Non-Third Party Claim in full and to have
waived any right to dispute the Non-Third Party Claim. Once the
Indemnifying Party has acknowledged and agreed to pay any Non-Third Party Claim
pursuant to this Section 7.4.1, or
once any dispute under this Section 7.4.1 has
been finally resolved in favor of indemnification by a court or other tribunal
of competent jurisdiction, subject to the provisions of Section 7.6.1, the
Indemnifying Party shall pay the amount of such Non-Third Party Claim to the
Indemnified Party within 10 days of the date of acknowledgement or resolution,
as the case may be, to such account and in such manner as is designated in
writing by the Indemnified Party.
7.4.2 Third-Party
Claims.
(a) In
the event that any Indemnified Party asserts a claim for indemnification or
receives notice of the assertion of any claim or of the commencement of any
action or proceeding by any Person who is not a party to this Agreement or an
affiliate of a party to this Agreement in respect of which such Indemnified
Party is entitled to indemnification by an Indemnifying Party under this
Agreement (a "Third Party
Claim"), the Indemnified Party shall give written notice to the
Indemnifying Party (the "Third
Party Claims Notice") within 20 days after asserting or learning of such
Third Party Claim (or within such shorter time as may be necessary to give the
Indemnifying Party a reasonable opportunity to respond to such claim), together
with a statement specifying the basis of such Third Party Claim. The
Third Party Claim Notice shall (i) describe the claim in reasonable detail, and
(ii) indicate the amount (estimated, if necessary, and to the extent feasible)
of the Losses that have been or may be suffered by the Indemnified Party. The
Indemnifying Party must provide written notice to the Indemnified Party that it
is either (i) assuming responsibility for the Third Party Claim or (ii)
disputing the claim for indemnification against it (the "Indemnification
Notice") The Indemnification Notice must be provided by the
Indemnifying Party to the Indemnified Party within 15 days after receipt of the
Third Party Claims Notice or within such shorter time as may be necessary to
give the Indemnified Party a reasonable opportunity to respond to such Third
Party Claim (the "Indemnification Notice
Period").
(b) If
the Indemnifying Party provides an Indemnification Notice to the Indemnified
Party within the Indemnification Notice Period that it assumes responsibility
for the Third Party Claim (the "Defense Notice"), the
Indemnifying Party shall conduct at its expense the defense against such Third
Party Claim in its own name, or if necessary in the name of the Indemnified
Party. The Defense Notice shall specify the counsel the Indemnifying
Party will appoint to defend such claim ("Defense Counsel"); provided, however, that the
Indemnified Party shall have the right to approve the Defense Counsel, which
approval shall not be unreasonably withheld or delayed, except that such
approval may be withheld if the defense is to be in the name of the Indemnified
Party. In the event that the Indemnifying Party fails to give the
Indemnification Notice within the Indemnification Notice Period, the Indemnified
Party shall have the right to conduct the defense and to compromise and settle
such Third Party Claim without the prior consent of the Indemnifying Party and
subject to the provisions of Section 7.6.1, the
Indemnifying Party will be liable for all costs, expenses, settlement amounts or
other Losses paid or incurred in connection therewith.
14
(c) In
the event that the Indemnifying Party provides in the Indemnification Notice
that it disputes the claim for indemnification against it, the Indemnified Party
shall have the right to conduct the defense and to compromise and settle such
Third Party Claim, without the prior consent of the Indemnifying Party. Once
such dispute has been finally resolved in favor of indemnification by a court or
other tribunal of competent jurisdiction or by mutual agreement of the
Indemnified Party and Indemnifying Party, subject to the provisions of Section 7.6.1, the
Indemnifying Party shall within 10 days of the date of such resolution or
agreement, pay to the Indemnified Party all Losses paid or incurred by the
Indemnified Party in connection therewith.
(d) In
the event that the Indemnifying Party delivers an Indemnification Notice
pursuant to which it elects to conduct the defense of the Third Party Claim, the
Indemnifying Party shall be entitled to have the exclusive control over the
defense of the Third Party Claim and the Indemnified Party will cooperate in
good faith with and make available to the Indemnifying Party such assistance and
materials as it may reasonably request, all at the expense of the Indemnifying
Party. The Indemnified Party shall have the right at its expense to
participate in the defense assisted by counsel of its own
choosing. The Indemnifying Party will not settle the Third Party
Claim or cease to defend against any Third Party Claim as to which it has
delivered an Indemnification Notice (as to which it has assumed responsibility
for the Third Party Claim), without the prior written consent of the Indemnified
Party, which consent will not be unreasonably withheld or delayed; provided, however, such consent
may be withheld if, among other reasons, as a result of such settlement or
cessation of defense, (i) injunctive relief or specific performance would be
imposed against the Indemnified Party, or (ii) such settlement or cessation
would lead to liability or create any financial or other obligation on the part
of the Indemnified Party for which the Indemnified Party is not entitled to
indemnification hereunder.
(e) If
an Indemnified Party refuses to consent to a bona fide offer of settlement which
the Indemnifying Party wishes to accept, which provides for a full release of
the Indemnified Party and its affiliates relating to the Third Party Claims
underlying the offer of settlement and solely for a monetary payment, the
Indemnified Party may continue to pursue such matter, free of any participation
by the Indemnifying Party, at the sole expense of the Indemnified Party. In such
an event, the obligation of the Indemnifying Party shall be limited to the
amount of the offer of settlement which the Indemnified Party refused to accept
plus the reasonable costs and expenses of the Indemnified Party incurred prior
to the date the Indemnifying Party notified the Indemnified Party of the offer
of settlement.
(f) Notwithstanding
clause (d) above, the Indemnifying Party shall not be entitled to control, but
may participate in, and the Indemnified Party shall be entitled to have sole
control over, the defense or settlement of (x) that part of any Third Party
Claim that (i) seeks a temporary restraining order, a preliminary or permanent
injunction or specific performance against the Indemnified Party, (ii) involves
criminal allegations against the Indemnified Party or (iii) may lead to
liability or create any financial or other obligation on the part of the
Indemnified Party for which the Indemnified Party is not entitled to
indemnification hereunder and (y) the entire Third Party Claim if such Third
Party Claim would impose liability on the part of the Indemnified Party in an
amount which is greater than the amount as to which the Indemnified Party is
entitled to indemnification under this Agreement.
15
(g) A
failure by an Indemnified Party to give timely, complete or accurate notice as
provided in this Section 7.4 will not
affect the rights or obligations of any party hereunder except and only to the
extent that, as a result of such failure, any party entitled to receive such
notice was deprived of its right to recover any payment under its applicable
insurance coverage or was otherwise directly and materially damaged as a result
of such failure to give timely notice.
Section 7.5 Right of
Offset. Without limiting any other rights or remedies
available to it, the Purchaser shall be entitled to offset any claim for
indemnity made pursuant to Section 7.2 and in
accordance with Section 7.4, against
any Contingent Payment or Top-Up Payment due to Capital C Holdco, subject to an
aggregate limit of $2,750,000; provided, however, the
Purchaser may only exercise such right of offset in respect of claims relating
to Losses actually incurred by a Purchaser Indemnified Party (in which case the
amount of such offset shall be the amount of such actual Loss) or claims
actually asserted by a third party (in which case the amount of the offset shall
not exceed the Purchaser's good faith estimate of the amount of indemnifiable
Losses that will ultimately be payable to a Purchaser Indemnified Party in
respect of such claims).
Section
7.6 Limitations On and Other
Matters Regarding Indemnification
7.6.1 Indemnity Cushion and
Cap. Subject to Section 7.6.5,
neither Capital C Holdco nor the Principals shall have any liability to any
Purchaser Indemnified Party with respect to Losses arising out of any of the
matters referred to in Section 7.2 until
such time as the amount of such liability shall exceed $100,000 in the aggregate
(in which case Capital C Holdco and the Capital C Principals shall be liable for
all Losses). Notwithstanding anything to the contrary herein, subject
to Section
7.6.5 below, the maximum aggregate liability of Capital C Holdco and the
Capital C Principals for indemnity payments under Section 7.2.1 shall
be an aggregate amount equal to the sum of (A) $750,000 plus (B) $2,750,000 of
the Contingent Payments and the Top-Up Payments paid or payable pursuant to this
Agreement.
7.6.2 Termination of
Indemnification Obligations of Capital C Holdco and the Capital C
Principals. Subject to Section 7.6.5, the
obligation of Capital C Holdco and the Capital C Principals to indemnify under
Section 7.2
hereof shall terminate on March 31, 2012, except as to matters as to which the
Purchaser Indemnified Party has made a claim for indemnification on or prior to
such date, in which case the right to indemnification with respect thereto shall
survive the expiration of such period until such claim for indemnification is
finally resolved and any obligations with respect thereto are fully
satisfied.
7.6.3 Termination of
Indemnification Obligations of the Purchaser; Purchaser Indemnity
Cap. The obligation of the Purchaser to indemnify under Section 7.3 hereof
shall terminate on March 31, 2012, except as to matters as to which Capital C
Holdco or the Capital C Principals have made a claim for indemnification on or
prior to such date, in which case the right to indemnification with respect
thereto for such party shall survive the expiration of such period until such
claim for indemnification is finally resolved and any obligations with respect
thereto are fully satisfied. Notwithstanding anything to the contrary
herein, the maximum aggregate liability of the Purchaser for indemnity payments
under this Agreement to the Company Indemnified Parties shall be an aggregate
amount equal to $2,750,000.
16
7.6.4 Treatment. Any
indemnity payments by an Indemnifying Party to an Indemnified Party under this
Article VIII shall be treated by the parties as an adjustment to the Purchase
Price.
7.6.5 Exceptions. Each
of the limitations set forth above in this Section 7.6 shall in
no event (a) apply to any Losses incurred by a Purchaser Indemnified Party which
relate, directly or indirectly, to (i) any fraudulent acts committed by Capital
C Holdco or the Principals; (ii) any breach of a representation or warranty
contained in Sections
3.1 or 3.3 or any other provision hereof relating to Taxes, (iii) any
indemnification obligation under Sections 7.2.1(c) or
7.2.1(d) and
(iv) the obligations of Capital C Holdco and the Capital C Principals set forth
in Section 8.1
to pay certain expenses; or (b) apply to any Losses incurred by a Company
Indemnified Party which relate, directly or indirectly, to (i) any fraudulent
acts committed by the Purchaser; (ii) any indemnification obligation under Section 7.3(c); and
(iii) the Purchaser's obligations set forth in Section 8.1 to pay
certain expenses.
7.6.6 Control by MDC
Partners. All decisions and determinations to be made by the Purchaser
and/or a Purchaser Indemnified Party under this Article VII shall be made by MDC
Partners in the name of and on behalf of the Purchaser and/or such other
Purchaser Indemnified Party.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Expenses. Except
as otherwise provided in this Agreement, the Purchaser, on the one hand, and the
Capital C Principals, Capital C Holdco and Communications Holdco, on the other
hand, shall pay its or his own expenses relating to the transactions
contemplated by this Agreement, including, without limitation, the fees and
expenses of their respective counsel, financial advisors and
accountants.
Section 8.2 Governing
Law; Service of Process and Consent to Jurisdiction. The interpretation and
construction of this Agreement, and all matters relating hereto (including,
without limitation, the validity or enforcement of this Agreement), shall be
governed by the laws of the Province of Ontario and the laws of Canada
applicable therein.
Section 8.3 "Person"
Defined. "Person" shall mean and include
an individual, a company, a joint venture, a corporation (including any
non-profit corporation), an estate, an association, a trust, a general or
limited partnership, a limited liability company, a limited liability
partnership, an unincorporated organization and a government or other department
or agency thereof.
17
Section 8.4 "Knowledge"
Defined. Where any representation and warranty contained in
this Agreement is expressly specified by reference to the knowledge of Capital C
Holdco or any Capital C Principals, such term shall be limited to the actual
knowledge of the executive officers of Capital C Holdco, Capital C and the
Capital C Principals (if not an individual), and unless otherwise stated, such
knowledge that would have been discovered by the executive officers of Capital C
Holdco, Capital C or the applicable Capital C Principals after reasonable
inquiry. Where any representation and warranty contained in this
Agreement is expressly specified by reference to the knowledge of the Purchaser,
as the case may be, such term shall be limited to the actual knowledge of the
executive officers of such entity and unless otherwise stated, such knowledge
that would have been discovered by such executive officers after reasonable
inquiry.
Section 8.5 "Affiliate"
Defined. As used in this Agreement, an "affiliate" of any Person,
shall mean any Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with
such Person.
Section 8.6 Captions. The
Article and Section captions used herein are for reference purposes only, and
shall not in any way affect the meaning or interpretation of this
Agreement.
Section 8.7 Publicity. Subject to the
provisions of the next sentence, no party to this Agreement shall, and Capital C
Holdco and the Capital C Principals shall use their reasonable efforts to ensure
that no representative of either of them shall, issue any press release or other
public document or make any public statement relating to this Agreement or the
matters contained herein without obtaining the prior approval of the
Purchaser. Notwithstanding the foregoing, the foregoing provision
shall not apply to the extent that MDC Partners is required to make any
announcement relating to or arising out of this Agreement by virtue of the
securities laws of the United States or Canada or the rules and regulations
promulgated thereunder or other rules of the NASDAQ Stock Market, Toronto Stock
Exchange or the United States Securities and Exchange Commission or any
announcement by any party or the Company pursuant to applicable law or
regulations.
Section 8.8 Notices. Unless
otherwise provided herein, any notice, request, instruction or other document to
be given hereunder by any party to any other party shall be in writing and shall
be deemed to have been given (a) upon personal delivery, if delivered by hand or
courier, (b) three days after the date of deposit in the mails, postage prepaid,
or (c) the next business day if sent by a prepaid overnight courier service, and
in each case at the respective addresses set forth below or such other address
as such party may have fixed by notice:
If to the Purchaser, addressed
to:
c/o MDC
Partners Inc.
00
Xxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx
Xxxxxx
X0X 0X0
Attention: Xxxxx
Xxxxxxxxx
with a copy
to:
c/o MDC
Partners Inc.
000 Xxxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: General
Counsel
18
If to Capital C Holdco,
to:
000 Xxxx
Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxx
Xxxxxxx
Facsimile: (416)
777-006
with
a copy to (which shall not constitute notice):
Hughes,
Dorsch, Garland, Coles LLP
000 Xxx
Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxxxx
X. Xxxxxxx
Facsimile:
(000) 000-0000
If to the Capital C Principals,
to:
Xxxxxxxx
Xxxxxxxxx
00000
Xxxxxxxx Xxxxxx, X.X. #0
Xxxxxxxxx,
Xxxxxxx X0X 0X0
and
Xxxx
Xxxxxxx
000
Xxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
with
a copy to (which shall not constitute notice):
Hughes,
Dorsch, Garland, Coles LLP
000 Xxx
Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxxxx
X. Xxxxxxx
Facsimile:
(000) 000-0000
Any party
may change the address to which notices are to be sent by giving notice of such
change of address to the other parties in the manner herein provided for giving
notice.
Section 8.9 Parties
in Interest. This Agreement
may not be transferred, assigned, pledged or hypothecated by any party hereto,
other than by operation of law. Any purported such transfer,
assignment, pledge, or hypothecation (other than by operation of law) shall be
void and ineffective. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and permitted assigns.
19
Section 8.10 Severability. In
the event any provision of this Agreement is found to be void and unenforceable
by a court of competent jurisdiction, the remaining provisions of this Agreement
shall nevertheless be binding upon the parties with the same effect as though
the void or unenforceable part had been severed and deleted.
Section 8.11 Counterparts. This
Agreement may be executed in two or more counterparts or by facsimile
transmission, all of which taken together shall constitute one
instrument.
Section 8.12 Entire
Agreement. This Agreement, together with the Schedules and
Exhibits hereto, constitutes the sole, exclusive and only agreements of the
parties hereto pertaining to the subject matter hereof, contains all of the
covenants, conditions and agreements between the parties, express or implied,
whether by statute or otherwise, and sets forth the respective rights, duties
and obligations of each party to the other party as of the date hereof. No oral
understandings, oral statements, oral promises or oral inducements
exist.
Section 8.13 Amendments. This
Agreement may not be amended, supplemented or modified orally, but only by an
agreement in writing signed by each of the parties hereto.
Section 8.14 Third
Party Beneficiaries. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person other than the parties hereto and their respective
successors and assigns as permitted under Section 8.9, except
the Purchaser Indemnified Parties as provided in Article VII hereof and with
respect to the provisions of Section 7.6.6, MDC
Partners.
Section 8.15 Use of
Terms. Whenever the
context so requires or permits, all references to the masculine herein shall
include the feminine and neuter, all references to the neuter herein shall
include the masculine and feminine, all references to the plural shall include
the singular and all references to the singular shall include the
plural. Whenever used in this Agreement, the terms "Dollars" and "$"
shall mean Canadian Dollars.
Section 8.16 "Liens"
Defined. With respect to any asset, a "Lien" shall mean (a) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (other than an operating lease) (or any financial lease having
substantially the same economic effect as any of the foregoing) relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.
Section 8.17 No Strict
Construction; Representation by Counsel. The language used in
this Agreement will be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of law or contract interpretation that
provides that in the case of ambiguity or uncertainty a provision should be
construed against the draftsman will be applied against any party
hereto. The provisions of this Agreement shall be construed according
to their fair meaning and neither for nor against any party hereto irrespective
of which party caused such provisions to be drafted. Each of the
parties acknowledges that it has been represented by an attorney in connection
with the preparation and execution of this Agreement.
* * * *
20
IN WITNESS WHEREOF, the
parties hereto have executed this Limited Partnership Unit Purchase Agreement,
on the day and year first above written.
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By:
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/s/ Xxxxxxxx Xxxxxx
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Name:
Xxxxxxxx Xxxxxx
|
|||
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Title:
General Counsel
|
|||
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2265178
ONTARIO LIMITED
|
|||
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By:
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/s/ Xxxx Xxxxxxx
|
||
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Name:
Xxxx Xxxxxxx
|
|||
|
Title:
Authorized Officer
|
|||
|
/s/
|
/s/ Xxxx Xxxxxxx
|
||
|
Witness
|
Xxxx
Xxxxxxx
|
||
|
/s/
|
/s/ Xxxxxxxx Xxxxxxxxx
|
||
|
Witness
|
Xxxxxxxx
Xxxxxxxxx
|
||
|
/s/
|
/s/ Xxxxxxx Xxxxx
|
||
|
Witness
|
Xxxxxxx
Xxxxx
|
||
|
/s/
|
/s/ Xxx Xxxxx
|
||
|
Witness
|
Xxx
Xxxxx
|
||
21
