MDC Partners Inc.
08/04/2021 | Press release | Distributed by Public on 08/04/2021 15:55
Goldman Agreements (Form 8-K)
Goldman Agreements
As previously disclosed, Midas OpCo Holdings LLC ('OpCo') entered into letter agreements on December 21, 2020 and April 21, 2021, as amended on July 8, 2021 (collectively, the 'Goldman Letter Agreements'), by and among OpCo, Broad Street Principal Investment, L.L.C. ('BSPI'), Stonebridge 2017, L.P. ('Stonebridge') and Stonebridge 2017 Offshore L.P. ('Stonebridge Offshore', together with BSPI and Stonebridge, the 'Holders').
On August 4, 2021, pursuant to the terms of the Goldman Letter Agreements and following the consummation of the business combination (the 'Transaction') between OpCo and certain subsidiaries of Stagwell Media LP ('Stagwell'), Stagwell Inc. (the 'Company'), as the successor to and assignee of OpCo, entered into additional agreements, including:
| · | an amendment to that certain Securities Purchase Agreement ('Goldman SPA Amendment') by and between the Company and BSPI, pursuant to which the Securities Purchase Agreement, dated as of February 14, 2017, by and among OpCo and BSPI (and any Affiliate or Related Fund, each as defined therein, that becomes a party thereto) was amended (i) to provide the Holders the right to nominate one director to the Company's board of directors so long as Holders remains the beneficial owner of at least fifty percent (50%) of the Company's Series 8 Preferred Shares (the 'Minimum Ownership Threshold'), (ii) to provide the right to participate, pro rata, in any proposed issuance of common or preferred units of OpCo until the Holders cease to meet the Minimum Ownership Threshold, and (iii) to provide that the Company agrees not to become party to certain change in control transactions until the Holder ceases to hold Series 8 Preferred Shares representing at least two percent (2%) of the aggregate voting power of the outstanding Class A Shares. |
| · | an OpCo Letter Agreement ('OpCo Letter Agreement') among OpCo, the Company and the Holders, pursuant to which the Company agrees to (i) enforce its rights against OpCo in the event OpCo does not comply with Section 3.7 of the amended and restated OpCo LLC Agreement (the 'A&R OpCo LLCA'), (ii) not permit Section 3.7 of the A&R OpCo LLCA to be waived, modified or amended in any manner which adversely affects the rights, preferences or privileges of any of the Holders without the prior consent of the Holders and (iii) in the event the Company withdraws as a member of OpCo or a new Manager of OpCo is appointed, cause the new Manager to execute the OpCo Letter Agreement to the Holders. |
Stagwell Agreement
As previously disclosed, OpCo entered into a letter agreement on December 21, 2020, as amended on July 8, 2021 (the 'Stagwell Letter Agreement'), by and among OpCo and Stagwell Agency Holdings LLC ('Stagwell Agency'). On August 4, 2021, pursuant to the terms of the Stagwell Letter Agreement and following the consummation of the Transaction, the Company entered into an amendment to that certain Securities Purchase Agreement (the 'Stagwell SPA Amendment') by and between the Company and Stagwell Agency, pursuant to which the Securities Purchase Agreement, dated as of March 14, 2019 (the 'SPA'), by and among OpCo, Stagwell Agency and any Purchaser Affiliate or Purchaser Related Fund, each as defined therein, that becomes a party thereto was amended to reflect certain additional definitions, including the Series 6 Preferred Shares.
Each of the foregoing descriptions does not purport to be complete and is qualified in its entirety by reference to each of the Goldman SPA Amendment, the OpCo Letter Agreement and the Stagwell SPA Amendment, copies of which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively and each of which is incorporated by reference into this Item 1.01.
| Unregistered Sales of Equity Securities |
The information set forth in Item 1.01 of this Current Report is incorporated by reference into this Item 3.02. Pursuant to the Goldman Letter Agreements, on August 4, 2021, the Company issued 61,411 shares of the Company's Series 8 Convertible Preferred Stock, par value $0.001 per share (the 'Series 8 Preferred Shares') to BSPI, 9,183 Series 8 Preferred Shares to Stonebridge and 3,255 Series 8 Preferred Shares to Stonebridge Offshore. The Series 8 Preferred Shares were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the 'Securities Act'). The Series 8 Preferred Shares may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from the registration requirements.
| Material Modifications to Rights of Security Holders |
The information set forth in Items 1.01 and 5.03 of this Current Report is incorporated by reference into this Item 3.03.
| Amendments to Articles of Incorporation or Bylaws. |
On August 4, 2021, the Company filed a Certificate of Amendment to the Certificate of Designation of the Company's Series 6 Convertible Preferred Stock (the 'Certificate of Amendment') providing, among other things, that the Company's Series 6 Convertible Preferred Stock, par value $0.001 per share, will have an accretion rate on the base liquidation preference of zero percent per annum from the date hereof until the one year anniversary thereof. The Certificate of Amendment is attached hereto as Exhibit 3.1 and incorporated herein by reference.
The foregoing description of the Certificate of Amendment is not complete and is qualified in its entirety by reference to the Certificate of Amendment.
| Financial Statements and Exhibits. |
(d) Exhibits.