Attached files
| file | filename |
|---|---|
| EX-12 - Stagwell Inc | v212032_ex12.htm |
| EX-32.1 - Stagwell Inc | v212032_ex32-1.htm |
| EX-31.2 - Stagwell Inc | v212032_ex31-2.htm |
| EX-23 - Stagwell Inc | v212032_ex23.htm |
| EX-21 - Stagwell Inc | v212032_ex21.htm |
| EX-32.2 - Stagwell Inc | v212032_ex32-2.htm |
| EX-10.18.2 - Stagwell Inc | v212032_ex10-18x2.htm |
| EX-10.2.4 - Stagwell Inc | v212032_ex10-2x4.htm |
| EX-10.2.3 - Stagwell Inc | v212032_ex10-2x3.htm |
| EX-10.12.10 - Stagwell Inc | v212032_ex10-12x10.htm |
| EX-10.17.1 - Stagwell Inc | v212032_ex10-17x1.htm |
| EX-10.12.9 - Stagwell Inc | v212032_ex10-12x9.htm |
| EX-10.18.1 - Stagwell Inc | v212032_ex10-18x1.htm |
| 10-K - Stagwell Inc | v212032_10k.htm |
| EX-31.1 - Stagwell Inc | v212032_ex31-1.htm |
Exhibit
10.17.2
LIMITED PARTNERSHIP UNIT
PURCHASE AGREEMENT (13%)
LIMITED PARTNERSHIP UNIT PURCHASE
AGREEMENT (this “Agreement”) dated as of
November 30, 2010, by and among MDC PARTNERS INC., a Canadian
corporation (the “Purchaser”), 2265174 Ontario
Limited (“Kenna
Holdco”), GLENN CHILTON and PAUL QUIGLEY (collectively, the “Kenna Principals” and each, a
"Kenna
Principal").
WITNESSETH:
WHEREAS, Newport Holdco
Partners Holding LP (“Newport”) and the Kenna
Principals formed Kenna
Communications LP
("Kenna LP") for the
purpose of demerging the businesses of Capital C Communications LP ("Cap C LP"), which consisted of
the Kenna business (the "Kenna
Business") and the Cap C 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, Cap C LP, the Kenna
Principals and the Cap C principals consummated the transactions contemplated by
the Reorganization. In connection with such Reorganization, Newport
and the Kenna Principals caused Cap C LP to transfer all of the assets utilized
as the Kenna Business and certain disclosed liabilities and obligations and the
Kenna Business to Kenna 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
Kenna 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 Kenna LP, Kenna Holdco owned 20% of Kenna LP and 2265176 Ontario
Limited, a wholly owned subsidiary of Kenna Holdco (“2265176”) owned 12.86% of the
partnership units of Kenna LP (the “13% Units”);
AND WHEREAS, the issued
capital of 2265176 consists of 101 common shares (the “Purchased Shares”), all of
which are legally and beneficially owned by Kenna Holdco;
AND WHEREAS, Kenna 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 Kenna LP
directly, 12.87% of Kenna LP through ownership of 2265176 which owns the 13%
Units, beneficially and of record, aggregating a 80.0% ownership interest in
Kenna LP and Kenna Holdco will own 20% of Kenna LP;
AND WHEREAS simultaneous with
the execution and delivery of this Agreement, the Purchaser, Kenna Holdco, the
Kenna Principals and Kenna LP are executing and delivering an amended and
restated limited partnership agreement in respect of Kenna LP (the “Kenna 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, Kenna 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 Kenna 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 Purchased Shares, the purchase price (the
"Purchase Price") shall
be calculated and paid by the Purchaser to Kenna Holdco, as set forth in this
Section 2.1 below.
(a) First Contingent
Payment. Subject to clauses (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 Kenna LP
Agreement, the Purchaser shall pay to Kenna 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 (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 Kenna LP
Agreement, the Purchaser shall pay to Kenna Holdco the Second Contingent Payment
("SAP"), calculated as
follows:
SAP =
Applicable Percentage x 36% x 2011 PBT
; provided, however, in the event
that 2011 PBT were less than $4,000,000, then SAP shall equal (A) the excess, if
any, of (i) 2011 PBT over (ii) $2,400,000, multiplied by (B) 90%, multiplied by
(C) the Applicable Percentage.
2
(c) Third Contingent
Payment. Subject to clauses (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 Kenna LP
Agreement, the Purchaser shall pay to Kenna 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 the sum of (i) $4,000,000 plus (ii) 33% of the
aggregate Top-Up Payments made as of such determination, then TAP shall equal
(A) the excess, if any, of (i) 2012 PBT over (ii) 2,400,000 plus (20% of
aggregate Top-Up Payments), 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 $2,400,000 plus (20% of
aggregate Top-Up Payments), then for purposes of the calculations of TAP above,
2012 PBT shall be reduced by the amount of such shortfall;
(d) Fourth Contingent
Payment. Subject to clauses (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 Kenna LP
Agreement, the Purchaser shall pay to Kenna 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 the sum of (i) $4,000,000 plus (ii) 33% of the
aggregate Top-Up Payments made as of such determination, then FOAP shall equal
(A) the excess, if any, of (i) 2013 PBT over (ii) 2,400,000 plus (20% of
aggregate Top-Up Payments), multiplied by (B) 90%, multiplied by (C) the
Applicable Percentage;
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
$4,800,000 plus (20% of aggregate Top-Up Payments), then for purposes of the
calculations of FOAP above, 2013 PBT shall be reduced by the amount of such
shortfall;
(e) Fifth Contingent
Payment. Subject to clauses (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 Kenna LP Agreement, the Purchaser shall pay to Kenna Holdco the Fifth
Contingent Payment ("FIAP"), calculated as
follows:
FIAP =
Applicable Percentage x 36% x 2014 PBT
3
; provided, however, in the event
that 2014 PBT were less than the sum of (i) 4,000,000 plus (ii) 33% of the
aggregate Top-Up Payments made as of such determination, then FIAP shall equal
(A) the excess, if any, of (i) 2014 PBT over (ii) $2,400,000 plus (20% of
aggregate Top-Up Payments), 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
$7,200,000 plus (20% of aggregate Top-Up Payments), then for purposes of the
calculations of FIAP above, 2014 PBT shall be reduced by the amount of such
shortfall.
(f) Last Contingent
Payment. Subject to clauses (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 Kenna LP Agreement, the Purchaser shall pay to Kenna Holdco the Last
Contingent Payment ("LAP"), calculated as
follows:
LAP =
Applicable Percentage x 36% x 2015 PBT
; provided, however, in the event
that 2015 PBT were less than the sum of (i) $4,000,000 plus (ii) 33% of the
aggregate Top-Up Payments made as of such determination, then LAP shall equal
(A) the excess, if any, of (i) 2015 PBT over (ii) $2,400,000 plus (20% of
aggregate Top-Up Payments), 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 $9,600,000
plus (20% of aggregate Top-Up Payments), then for purposes of the calculations
of LAP above, 2015 PBT shall be reduced by the amount of such
shortfall.
(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. Kenna shall also be eligible to receive the following potential
top-up payments (the “Top-Up
Payments”):
(i)
Within
thirty (30) days after the Annual Determination (as defined below) has been
determined for each 12-month calendar year 2010 and 2011, Kenna Holdco will be
eligible to receive a “First
Top-Up Payment” (if any) equal to the highest amount calculated under
clauses (1), (2), (3) and (4) below:
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1.
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If average
PBT for calendar years 2010 and 2011 is greater than $4,500,000 but less
than $5,000,001, then the Company will be eligible to receive a First
Top-Up Payment equal to
$1,250,000;
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2.
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If average
PBT for calendar years 2010 and 2011 is equal to or greater than
$5,000,001 but less than $5,500,000, then the Company will be eligible to
receive a First Top-Up Payment equal to
$1,500,000;
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3.
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If average
PBT for calendar years 2010 and 2011 is equal to or greater than
$5,500,001 but less than $5,800,000, then the Company will be eligible to
receive a First Top-Up Payment equal to $2,000,000;
or
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4.
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If
average PBT for calendar years 2010 and 2011 is equal to or greater than
$5,800,000, then the Company will be eligible to receive a First Top-Up
Payment equal to $2,500,000.
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(ii)
Within
thirty (30) days after the Annual Determination (as defined below) has been
determined for each 12-month calendar year 2010, 2011 and 2012, Kenna Holdco
will be eligible to receive a “Second Top-Up Payment” (if
any) equal to the highest amount calculated under clauses (1), (2), (3) and (4)
below:
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1.
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If average
PBT for calendar years 2010, 2011 and 2012 is greater than $4,500,000 but
less than $5,000,001, then the Company will be eligible to receive a
Second Top-Up Payment equal to $2,500,000 minus the amount of the First
Top-Up Payment;
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2.
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If average
PBT for calendar years 2010, 2011 and 2012 is equal to or greater than
$5,000,001 but less than $5,500,000, then the Company will be eligible to
receive a Second Top-Up Payment equal to $3,000,000 minus the amount of
the First Top-Up Payment;
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3.
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If average
PBT for calendar years 2010, 2011 and 2012 is equal to or greater than
$5,500,001 but less than $5,800,000, then the Company will be eligible to
receive a Second Top-Up Payment equal to $4,000,000 minus the amount of
the First Top-Up Payment; or
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4.
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If average
PBT for calendar years 2010, 2011 and 2012 is equal to or greater than
$5,800,000, then the Company will be eligible to receive a Second Top-Up
Payment equal to $5,000,000 minus the amount of the First Top-Up
Payment.
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(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 Payment
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 Kenna Holdco, as set forth on Schedule 2.1 (or to such other
account as Kenna 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 Kenna Holdco unless and until (i) Kenna LP has Working
Capital of at least the Working Capital Target for a continuous period of at
least 6 months, (ii) Kenna LP has paid Kenna Holdco the Pre-Closing
Undistributed Profit Amount in accordance with the Kenna LP Agreement and (iii)
Kenna LP has sufficient cash on-hand to pay distributions due in accordance with
the Kenna LP Agreement.
(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 Kenna LP Agreement) pursuant to the Kenna LP Agreement (collectively, a
"Sale Event"), Kenna
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
Kenna 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 Kenna 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
Kenna LP owned by Kenna 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 Kenna Holdco by the number of days in such year each
such number was owned by Kenna 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 Kenna Principals from Cap C LP immediately prior to the
consummation of the Reorganization, which amount shall be determined as of
the Closing Date in accordance with the Kenna LP Agreement and which
amount is estimated at Closing to be equal to
$648,000.
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(vi)
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"PBT" with respect to any
year, shall mean the consolidated net income (loss) of Kenna 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 Kenna Business for the
period from January 1, 2010 until the Closing Date, plus the PBT of Kenna
LP 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) $1,500,000 plus (b) the Pre-Closing
Undistributed Profit Amount (to the extent not yet distributed in
accordance with the Kenna 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., 45 Hazelton Avenue, Toronto,
Ontario, M5R 2E3, 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 KENNA
HOLDCO AND THE KENNA PRINCIPALS
Kenna
Holdco and the Kenna 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. Kenna 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 Kenna Holdco and, assuming due authorization, execution and
delivery by the Purchaser, constitutes a legal, valid and binding obligation of
Kenna Holdco, enforceable against Kenna 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 Kenna Principal's knowledge, threatened against Kenna Holdco
with respect to the execution, delivery and performance of this Agreement or the
transactions contemplated hereby or any other agreement entered into by Kenna
Holdco in connection with the transactions contemplated hereby.
7
3.1.3 Non-Contravention; Approvals
and Consents. The execution, delivery and performance by the
Kenna Principals and Kenna 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 Kenna LP or Kenna Holdco; (b)
result in the violation by Kenna LP or Kenna 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 Kenna LP or Kenna 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 Kenna LP or Kenna Holdco is a party or by which Kenna LP or Kenna
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 Kenna LP or Kenna 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 Kenna
LP or Kenna Holdco of their respective obligations hereunder or thereunder or
the consummation of the transactions contemplated hereby or
thereby.
3.2 Proceeds
of Purchase Price. Kenna
Holdco has not agreed or made any written or verbal commitment to give any
employee of Kenna LP (or any family member or any affiliate of the employee of
Kenna LP) any portion or share of the Purchase Price in the form of a bonus,
gift, award, or any similar type of remuneration. The Kenna
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 Kenna
LP (or any family member of any employee of Kenna 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)
Kenna Holdco owns of record and beneficially has valid title to the Purchased
Shares, and (b) 2265176 owns of record and beneficially has valid title to 13%
Units of Kenna 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 2265176 or the 13% Units , or which grants any Person
(other than 2265176 or the Kenna Principals) the right to share in the earnings
of Kenna LP. 2265176 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 Purchased 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 Kenna
Holdco or the Kenna Principals, threatened, against Kenna Holdco, 2265176 or
Kenna 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 Kenna Holdco in connection with the transactions
contemplated hereby or thereby.
8
Section
3.4 Brokers. No
broker, finder, agent or similar intermediary has acted on behalf of Kenna
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 Kenna Holdco or the Kenna Principals in
connection therewith based on any agreement, arrangement or understanding with
either of them.
Section 3.5 Reaffirmation
of Representations and Warranties. Kenna Holdco and the Kenna
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 Kenna 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 Kenna Holdco and the Kenna
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.
9
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. Kenna
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
Kenna Principals, Kenna Holdco and the Purchaser shall have entered into the
Amended and Restated Kenna LP Agreement.
10
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 Kenna LP, and/or their
respective subsidiaries; (y) assign all of its rights, benefit, title and
interest in Kenna 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 Kenna
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 Kenna
Holdco.
(a) As
long as Kenna Holdco beneficially owns any equity interests in Kenna LP, no
Kenna Principal shall sell or in any other way transfer, assign, distribute,
pledge, encumber or otherwise dispose of any of the equity securities of Kenna
Holdco or permit Kenna Holdco to issue any additional equity
securities.
(b) From
and after the Closing, Kenna 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 Kenna
Holdco; or (ii) provide compensation to any employee of Kenna 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. Kenna Holdco further covenants and agrees that it shall not,
directly or indirectly modify or amend Kenna 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 Kenna
Holdco, the Kenna Principals and the Purchaser contained in this Agreement shall
survive the Closing.
Section 7.2 Obligation
of Kenna Holdco and the Kenna Principals to Indemnify.
7.2.1 General
Indemnity. Subject to the limitations contained in Sections 7.6.1 and
7.6.2, Kenna
Holdco and the Kenna 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 Kenna Holdco or the Kenna 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 Kenna Holdco or the
applicable Kenna Principals contained in Article III hereof or in any
certificate delivered by Kenna Holdco or the applicable Kenna Principals at the
Closing or otherwise in connection herewith; (c) any breach or failure by Kenna
Holdco or the applicable Kenna Principals to comply with, perform or discharge
any obligation, agreement or covenant by Kenna Holdco or the Kenna 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 Cap C LP 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 Kenna Holdco,
Kenna and the Kenna 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 Kenna Holdco, subject to an
aggregate limit of $3,000,000; 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 Kenna Holdco nor any of the Kenna 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 Kenna Holdco and the Kenna 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 Kenna Holdco and the Kenna Principals
for indemnity payments under Section 7.2.1 shall
be an aggregate amount equal to the sum of (A) $750,000 plus (B) $3,000,000 of
the Contingent Payments and the Top-Up Payments paid or payable pursuant to this
Agreement.
7.6.2 Termination of
Indemnification Obligations of Kenna Holdco and the Kenna
Principals. Subject to Section 7.6.5, the
obligation of Kenna Holdco and the Kenna 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 Kenna Holdco
or the Kenna 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 $3,000,000.
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 Kenna
Holdco or the Principal; (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 Kenna Holdco and the Kenna 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
Kenna Principals and Cap C LP, 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.
Section 8.4 "Knowledge"
Defined. Where any representation and warranty contained in
this Agreement is expressly specified by reference to the knowledge of Kenna
Holdco or any Kenna Principal, such term shall be limited to the actual
knowledge of the executive officers of Kenna Holdco, Kenna and the Kenna
Principals (if not an individual), and unless otherwise stated, such knowledge
that would have been discovered by the executive officers of Kenna Holdco, Kenna
or the applicable Kenna Principal 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.
17
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 Kenna
Holdco and the Kenna 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.
45
Hazelton Avenue
Toronto,
Ontario
Canada
M5R 2E3
Attention: Gavin
Swartzman
with a copy
to:
c/o MDC
Partners Inc.
950 Third
Avenue
New York,
New York 10022
Attention: General
Counsel
18
If to Kenna Holdco, to:
c/o Paul
Quigley
898
Wildrush Place
Newmarket,
Ontario L3X 1L7
Attention: Paul
Quigley
with
a copy to (which shall not constitute notice):
Lipman,
Zener & Waxman LLP
1220
Eglinton Avenue West
Toronto,
Ontario M6C 2E3
Attention: Bradley
J. Miller
Facsimile: (416)
789-9015
If to the Kenna Principals,
to:
Paul
Quigley
898
Wildrush Place
Newmarket,
Ontario L3X 1L7
and
Glenn
Chilton
161
Coldstream Avenue
Toronto,
Ontario M5N 1X7
with
a copy to (which shall not constitute notice):
Lipman,
Zener & Waxman LLP
1220
Eglinton Avenue West
Toronto,
Ontario M6C 2E3
Attention: Bradley
J. Miller
Facsimile: (416)
789-9015
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.
* * * *
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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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MDC
PARTNERS INC.
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By:
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/s/ Mitchell Gendel
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Name:
Mitchell Gendel
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Title: General
Counsel
|
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2265174
ONTARIO LIMITED
|
|||
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By:
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/s/ Glenn Chilton
|
||
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Name:
Glenn Chilton
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Title:
Authorized Officer
|
|||
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/s/
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/s/ Glenn Chilton
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||
|
Witness
|
Glenn
Chilton
|
||
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/s/
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/s/ Paul Quigley
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||
|
Witness
|
Paul
Quigley
|
||
21