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| MDCA > SEC Filings for MDCA > Form 8-K on 26-Oct-2009 | All Recent SEC Filings |
26-Oct-2009
Entry into a Material Definitive Agreement, Termination of a Material Definitive
On October 20, 2009, MDC Partners Inc. ("MDC") and its wholly-owned subsidiaries, as guarantors (the "Guarantors"), entered into a Purchase Agreement (the "Purchase Agreement") with certain initial purchasers named in Schedule 1 therein (the "Initial Purchasers"), relating to the issuance and sale by MDC of $225 million aggregate principal amount of its 11% Senior Notes due 2016 (the "Notes"), jointly, severally and unconditionally guaranteed on a senior unsecured basis by the Guarantors. The Notes were sold in a private placement in reliance on exemptions from registration under the Securities Act of 1933, as amended (the "Securities Act").
The Company used net proceeds of this offering to repay the outstanding balance under and terminate its prior senior secured credit facility, and the Company will redeem its outstanding 8% C$45 million convertible debentures due June 2010.
The Purchase Agreement includes customary representations, warranties and covenants by MDC. Under the terms of the Purchase Agreement, MDC is required to indemnify the Initial Purchasers against certain liabilities. Certain of the Initial Purchasers and their affiliates have, from time to time, performed various financial advisory and investment banking services for MDC and its affiliates, for which they received or will receive customary fees and expenses.
Indenture
On October 23, 2009, MDC entered into an indenture (the "Indenture") among MDC, the Guarantors and The Bank of New York Mellon, as trustee, relating to issuance by MDC of the Notes. The Notes bear interest at a rate of 11% per annum, accruing from October 23, 2009. Interest is payable semiannually in arrears in cash on May 1 and November 1 of each year, beginning on May 1, 2010. The Notes will mature on November 1, 2016, unless earlier redeemed or repurchased.
The Notes are guaranteed on a senior unsecured basis by all of MDC's existing and future wholly-owned subsidiaries. The Notes are unsecured and unsubordinated obligations of MDC and rank (i) equally in right of payment with all of MDC's or any Guarantor's existing and future senior indebtedness, (ii) senior in right of payment to MDC's or any Guarantor's existing and future subordinated indebtedness, (iii) effectively subordinated to all of MDC's or any Guarantor's existing and future secured indebtedness to the extent of the collateral securing such indebtedness and (iv) structurally subordinated to all existing and future liabilities of MDC's subsidiaries that are not Guarantors.
MDC may, at its option, redeem the Notes in whole at any time or in part from time to time, on and after November 1, 2013 at a redemption price of 105.500% of the principal amount thereof if redeemed during the twelve-month period beginning on November 1, 2013, at a redemption price of 102.750% of the principal amount thereof if redeemed during the twelve-month period beginning on November 1, 2014 and at a redemption price of 100% of the principal amount thereof if redeemed during the twelve-month period beginning on November 1, 2015.
Prior to November 1, 2013, MDC may, at its option, redeem some or all of the Notes at a price equal to 100% of the principal amount of the Notes plus a "make whole" premium and accrued and unpaid interest. MDC may also redeem, at its option, prior to November 1, 2012, up to 35% of the Notes with the proceeds from one or more equity offerings at a redemption price of 111% of the principal amount thereof.
The Indenture includes covenants that, among other things, restrict MDC's ability and the ability of its restricted subsidiaries (as defined in the Indenture) to incur or guarantee additional indebtedness; pay dividends on or redeem or repurchase the capital stock of MDC; make certain types of investments; impose limitations on dividends or other amounts from MDC's restricted subsidiaries; incur certain liens; sell or otherwise dispose of certain assets; enter into transactions with affiliates; enter into sale and . . .
On October 23, 2009, in connection with the issuance of the Notes, MDC repaid in full all outstanding loans, together with interest and all other amounts due under the Fortress Facility, and terminated the Fortress Facility.
The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.
Each of the Indenture and the Credit Agreement contains a covenant that, among other things, restricts the Company's ability to pay dividends or distributions or redeem or repurchase capital stock.
On October 20, 2009, MDC issued a press release announcing the pricing of its offering, in a private placement, of the Notes. A copy of the Company's press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
On October 23, 2009, MDC issued a press release announcing the completion of its offering, in a private placement, of the Notes and its entry into a new $75 million revolving credit facility. A copy of the Company's press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
(d) Exhibits.
1.1 Purchase Agreement, dated as of October 20, 2009, among the Company, the Note Guarantors and Goldman, Sachs & Co., as representative of the initial purchasers named in Schedule 1 therein.
4.1 Indenture, dated as of October 23, 2009, among the Company, the Note Guarantors and The Bank of New York Mellon, as trustee, including the form of 11% Senior Notes due 2016.
10.1 Exchange and Registration Rights Agreement, dated as of October 23, 2009, among the Company, the Note Guarantors and Goldman, Sachs & Co., as representative of the initial purchasers named in Schedule 1 therein.
10.2 Credit Agreement, dated as of October 23, 2009, among the Company, Maxxcom Inc., a Delaware corporation, each of their subsidiaries party thereto, Wells Fargo Foothill, LLC, as agent, and the lenders from time to time party thereto.
99.1 Text of press release issued by the Company on October 20, 2009, regarding the pricing of the Notes.
99.2 Text of press release issued by the Company on October 23, 2009, regarding the completion of the offering of Notes and the entering into of a new $75 million revolving credit facility.
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