Mood Media Acquires Muzak For US$345M

On May 6, 2011, Mood Media Corporation (“Corporation”) completed its acquisition of Muzak Holdings LLC (“Muzak”) for US$345 million including net debt repaid on closing (the “Muzak Acquisition”).

The Corporation satisfied the US$345 million purchase price through the following: (i) approximately US$305 million in cash, (ii) by the issue of US$5 million 10 per cent convertible unsecured subordinated debentures having an exercise price of US$2.43 per common share and maturing on October 31, 2015, and (iii) as to remainder, by the grant of warrants to purchase 4,407,543 common shares of the Corporation, at an exercise price of US$3.50 and expiring five years from the date of issuance.

Further consideration of up to a maximum of US$30 million in cash may be paid over the three years following closing in the event the Corporation achieves certain minimum EBITDA targets during such period.

The Corporation also entered into new credit facilities with Credit Suisse Securities AG, as agent, comprising a US$20 million 5-year revolving credit facility, a US$355 million 7-year first lien term loan and a US$100 million 7.5-year second lien term loan. On closing, the Corporation repaid all of the outstanding indebtedness under its previous senior credit facility with the Bank of Montreal and mezzanine credit facility with West Face Capital.

Also in connection with the closing of the Muzak Acquisition, the Corporation completed a private placement of 5,396,015 common shares at a subscription price of $2.51 per common share for gross proceeds of $13,543,997.65.

Stikeman Elliott LLP represented the Corporation with a team that consisted of Jeffrey Singer, Rob Nicholls and Greg Herget (corporate/securities); Craig Mitchell, Mairi MacGillivray and Matthew Hunt (banking) and John Lorito and Francesco Gucciardo (tax).

Cleary Gottlieb Steen & Hamilton LLP represented Silver Point Capital, L.P. and Muzak with a team that consisted of Christopher Austin, Filip Moerman, Paul Tiger, Abdallah Simaika and Nathan Nagy (M&A); Arthur Kohn, Catharine Slack and Laura Bagarella (employee benefits); Leonard Jacoby and Mario Mendolaro (intellectual property); Jason Factor and David Stewart Fisher (tax) and George Cary, Steven Kaiser and Kenneth Reinker (antitrust).

Latham & Watkins LLP represented Credit Suisse with a team led by John Mendez and David Sajous. Davies Ward Phillips & Vineberg LLP acted as Canadian counsel to Credit Suisse with a team constisting of Derek Vesey and William Buchner