Exhibit 10.2


 


EXECUTION COPY


 


AMENDED AND RESTATED


 


LIMITED LIABILITY COMPANY AGREEMENT


 


OF


 


ZYMAN GROUP, LLC


 


 


Dated April 1,
2005


 





















 


AMENDED AND RESTATED


 


LIMITED LIABILITY COMPANY AGREEMENT


 


OF


 


ZYMAN GROUP, LLC


 


 


THIS AMENDED AND RESTATED OPERATING AGREEMENT
(this “Agreement”) dated April 1, 2005,
is made and entered into by and among ZG
ACQUISITION INC., a Delaware
corporation (“MDC”), ZYMAN COMPANY, INC., a Delaware corporation (“Zyman”); the management unitholders
signatory hereto (together with any management unitholders who are admitted as
members following the date hereof pursuant to Section 2.4, the “Management Unitholders” (which term, for
the avoidance of any doubt, shall not include Sergio Zyman (“SZ”)); the Management Unitholders together
with Zyman and MDC collectively referred to as the “Members”
and individually a “Member”), MDC PARTNERS INC., a corporation organized
under the federal laws of Canada (“MDC Partners”),
and ZYMAN GROUP,  LLC, a Delaware limited liability company
(the “Company”).  Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in Article XIII.


 


WHEREAS, Zyman and
the Management Unitholders are parties to a Limited Liability Company Agreement
(the “Original Operating Agreement”);


 


WHEREAS, pursuant to
the Membership Unit Purchase Agreement dated April 1, 2005 (the “Purchase Agreement”), Zyman and certain Management
Unitholders sold, transferred, conveyed and delivered to MDC 30,794,384 Class B
Units, which units were, effective upon such transfer, automatically converted
into Class A Units of the Company pursuant to the terms of the Original
Operating Agreement (the “Purchase Transaction”),
such that immediately after giving effect to such transfer, the issued and
outstanding Units of the Company were as set forth on Schedule 2.1; and


 


WHEREAS, in
connection with the Closing of the Purchase Transaction, the Members now desire
to admit MDC as a member, and to amend and restate the Original Operating
Agreement in the form hereof;


 


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 Members and the other parties hereto do hereby agree as
follows:


 





















 


ARTICLE I


 


FORMATION
OF LIMITED LIABILITY COMPANY


 


Section 1.1   Formation.  The Company was formed as a limited liability
company under the laws of the State of Delaware by the filing with the
Secretary of State of Delaware of the Certificate of Formation (as may be
amended from time to time, the “Certificate”). 


 


Section 1.2   Purpose.  The Company may engage in any lawful business
of every kind and character for which a limited liability company may be
organized under the Delaware Limited Liability Company Act (as amended from
time to time, the “Act”) or any
successor statute.  The Company shall
have all of the powers provided for a limited liability company under the Act.


 


Section 1.3   Offices;
Registered Agent. 
The principal place of business of the Company shall be 950 East Paces
Ferry Road, N.E., Suite 3300, Atlanta, Georgia 30326, or such other
principal place of business as the Managers (as defined in Section 11.5)
may from time to time determine.  The
Company may have, in addition to such office, such other offices and places of
business at such locations, both within and without the State of Delaware, as
the Managers may from time to time determine or the business and affairs of the
Company may require.  The registered agent
of the Company in the State of Delaware shall be the initial registered agent
named in the Certificate or such other Person (as defined in Section 13.1)
as the Managers may designate from time to time in the manner provided by law.


 


Section 1.4   Filings and
Foreign Qualification.  Upon the request of the Managers, the Members
shall promptly execute and deliver all such certificates and other instruments
conforming hereto as shall be necessary for the Managers to accomplish all
filing, recording, publishing and other acts appropriate to comply with all
requirements for the formation and operation of a limited liability company
under the laws of the State of Delaware and for the qualification and operation
of a limited liability company in all other jurisdictions where the Company
shall propose to conduct business.


 


Section 1.5   Term.  The Company commenced on the date the Company
initially filed its Certificate with the Secretary of State of Delaware and
shall continue in existence, unless sooner terminated in accordance with the
provisions of this Agreement.


 


ARTICLE II


 


MEMBERS;
MEMBERSHIP INTERESTS; UNITS


 


Section 2.1   Members and
Membership Units. 
The Company is authorized to issue 31,500,000 Class A Units and
25,000,000 Class B Units and the issued Class A Units and Class B
Units are allocated among the Members as set forth on Schedule 2.1.  Except as the Board of Managers may otherwise
determine, all Units acquired by the Company from any Member pursuant to Article X
hereof or otherwise shall not be cancelled but shall constitute authorized but
unissued Units.  Upon any change in the
Members or Units, including by reason of the


 


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issuance of additional Units, Schedule 2.1
shall be deemed to be updated to reflect such changes and the
Members agree to complete a revised Schedule 2.1
hereof, which shall be deemed incorporated into this Agreement as part of this Section 2.1.


 


Section 2.2   Classes of
Units. 


 


(a)                                  Class A
Units.  The Class A Units shall
have the following characteristics: (i) an initial Unit Capital Account
(as defined in Section 7.2(e) hereof), (ii) provisions relating
to transfer as provided in Article X hereof, (iii) entitlement to a
share of Profits and Losses as set forth in Section 3.3, (iv) entitlement
to distributions as provided in Sections 3.4 and 9.2, (v) entitlement to
allocations of PBT as provided in Section 3.5 and (vi) voting rights
equal to one vote per Unit.


 


(b)                                 Class B
Units. The Class B Units shall have the following characteristics: (i) an
initial Unit Capital Account (as defined in Section 7.2(e) hereof), (ii) provisions
relating to transfer as provided in Article X hereof, (iii) entitlement
to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement
to distributions as provided in Sections 3.4 and 9.2, (v) entitlement to
allocations of PBT as provided in Section 3.5 and (vi) voting rights
equal to one vote per Unit.


 


Section 2.3   Transfer of
Units.  In
the event a Member transfers all or a portion of its Membership Interests in
accordance with Article X hereof, then effective as of the date of the
sale and subject to compliance with Section 10.1 hereof, such Member shall
automatically cease to be a Member in the Company as to such sold Unit.  Except as otherwise expressly provided
herein, upon a transfer of Units permitted by this Agreement, the transferee
shall have all of the rights, powers and duties of the transferor hereunder
with respect to the transferred Units and shall be admitted as a Member, the
transferee shall sign a counterpart to this Agreement and Schedule 2.1 shall be amended as set
forth in Section 2.1.


 


Section 2.4   Additional
Members and Membership Interests.  Subject to Section 2.3, additional
Persons may be admitted to the Company as Members and Membership Interests may
be created and issued to such Persons on such terms and conditions as the Board
of Managers shall approve, subject to Section 4.1 hereof.  The terms of admission or issuance may
specify the creation of different classes or groups of Members having different
rights, powers and duties.  The creation
of any new class or group of Members shall be indicated in an amendment to this
Agreement in accordance with Section 14.4 hereof and such amendment shall
indicate the different rights, powers and duties of the classes or groups of
Members.  Upon admission of a new Member,
such Person shall sign a counterpart to this Agreement and Schedule 2.1 shall be amended as set
forth in Section 2.1.


 


Section 2.5   Liability of
Member. 
Except as expressly provided under the Act, no Member shall be liable
for the debts, liabilities, contracts or other obligations of the Company, and
no Member shall be required to make any loans to the Company.  Subject to the limitations and conditions
provided for in Article XI hereof and the Act, the Company shall indemnify
and hold harmless a Member in the event a Member becomes liable,
notwithstanding the preceding sentence, for any debt, liability, contract or
other obligation of the Company except to the extent expressly provided in the
preceding sentence.


 


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Section 2.6   Limitations
on Members. 
Other than as specifically provided for in this Agreement, the Purchase
Agreement, an Employment Agreement entered into pursuant to the Purchase
Agreement, or the Act, no Member shall: (a) be permitted to take part in
the business or control of the business or affairs of the Company; (b) have
any voice in the management or operation of any Company property; or (c) have
the authority or power to act as agent for or on behalf of the Company or any
other Member, to do any act which would be binding on the Company or any other
Member, or to incur any expenditures, debts, liabilities or obligations on
behalf of or with respect to the Company.


 


Section 2.7   Certification
of Units. Unless a majority of the Members of each
class of Units otherwise agree, the Company shall issue certificates to the
Members representing the Units held by such Members. The following provisions
shall apply:


 


(a)                                  Certificates attesting to the
ownership of Units in the Company shall be in such form as shall be approved by
the Managers and shall state that the Company is a limited liability company
formed under the laws of the State of Delaware, the name of the Member to whom
such certificate is issued and that the certificate represents limited
liability company interests within the meaning of the Act.  Each such certificate shall be signed by such
officers of the Company as are approved by the Managers and shall bear a legend
in substantially the following form:


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
PURSUANT TO AN EXEMPTION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  IN ADDITION, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER AND OTHER RESTRICTIONS SET
FORTH IN THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING
AGREEMENT, DATED APRIL 1, 2005, AMONG ZYMAN GROUP, LLC AND ITS MEMBERS
(THE “AGREEMENT”) AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH
SUCH TRANSFER RESTRICTIONS.  COPIES OF
THE AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE LIMITED LIABILITY COMPANY
AND ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST THEREFOR. THE HOLDER OF
THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL
OF THE PROVISIONS OF THE AFORESAID AGREEMENT AND THE APPLICABLE RESTRICTIONS
UNDER THE ACT.


 


(b)                                 The transfer register or
transfer book and blank certificates shall be kept by the secretary of the
Company or by any transfer agent or registrar approved by the Managers for that
purpose. The certificates shall be numbered and registered in the share or unit
register or


 


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transfer books of the Company as they are
issued. Except to the extent that the Company shall have received written
notice of an assignment of any Unit in the Company, the Company shall be
entitled to treat the Person in whose name any certificates issued by the
Company stand on the books of the Company as the absolute owner thereof, and
shall not be bound to recognize any equitable or other claim to, or interest
in, such Unit on the part of any other Person.


 


(c)                                  Subject to all provisions herein
relating to transfers of Units, if the Company shall issue certificates in
accordance with the provisions of this Section 2.7, transfers of Units
shall be made on the register or transfer books of the Company upon surrender
of the certificate therefor, endorsed by the Person named in the certificate or
by an attorney lawfully constituted in writing.


 


(d)                                 The holder of any certificates
issued by the Company shall immediately notify the Company of any loss,
destruction or mutilation of such certificates, and the Managers may cause a
new certificate or certificates to be issued to such holder, in case of
mutilation of the certificate, upon the surrender of the mutilated certificate
or, in case of loss or destruction of the certificate, upon satisfactory proof
of such loss or destruction and, if the Managers shall so determine, the
granting of an indemnity as is approved by the Managers.


 


ARTICLE III


 


CAPITAL
CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS


 


Section 3.1   Capital
Account; Capital Contributions.  The Capital Accounts of each Member shall be
computed in accordance with Section 7.2. 
Notwithstanding the foregoing, the initial Capital Accounts of the
Members shall be set forth as on Schedule 3.1 and adjusted on the same
basis as the initial Capital Accounts were determined to reflect (grossed-up)
any additional payments made by MDC for its interest pursuant to the Purchase
Agreement.


 


Section 3.2   Withdrawal
and Return of Capital Contribution.  No Member shall have the right to receive or
withdraw its Capital Contribution except to the extent, if any, that any
distribution made pursuant to the express terms of this Agreement may be
considered as such by law or as expressly provided for in this Agreement.


 


Section 3.3   Allocation of
Profits and Losses.


 


(a)                                  Except as otherwise provided in
this Section 3.3, all Profits and Losses of the Company (as such terms are
defined in Section 13.1 hereof) for any calendar year shall be allocated
and charged to the Members for income tax purposes (including without
limitation the capital account maintenance regulations under Section 704(b) of
the Code) as follows:


 


(i)                                     Profits
shall be allocated as follows:


 


(A)                              First,
pro rata to those Members to whom PBT (as such term is defined in Section 13.1)
for such calendar year and each prior calendar year since the Effective Time
has been allocated under Section 3.5 until the excess of the allocation to
each such Member


 


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of Profits under this Section 3.3(a)(i)(A) over
any allocation to each such Member of Losses under Section 3.3(a)(ii)(B) for
such calendar years equals the amount of PBT so allocated to each such Member
during such calendar years; and


 


(B)                                Thereafter,
to the Members in accordance with the number of Units owned by each.


 


(ii)                                  Losses
shall be allocated as follows:


 


(A)                              First,
to the extent that Profits allocated under Section 3.3(a)(i)(B) over
Losses previously allocated under this Section 3.3(a)(ii)(A) exceed
distributions made in accordance with the number of Units owned by each Member
under Section 3.4(a)(iv), to the Members in the proportion in which such
excess was allocated;


 


(B)                                Second,
to the extent that Profits allocated under Section 3.3(a)(i)(A) over
Losses previously allocated under this Section 3.3(a)(ii)(B) exceed
distributions under Sections 3.4(a)(i), (ii) or (iii), as applicable, to
the Members in the proportion in which such excess was allocated;


 


(C)                                Third,
to the Members in accordance with the number of Units owned by each. 


 


(b)                                 Special Allocations and
Limitations


 


(1)                                  In
the event a Member unexpectedly receives in any taxable year any adjustments,
allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4),
(5), or (6) which cause or increase an Adjusted Capital Account Deficit
(as defined in Section 13.1) of such Member, items of Company income and
gain shall be specially allocated to such Member in such taxable year (and, if
necessary in subsequent taxable years), in an amount and manner sufficient to
eliminate, to the extent required by the Treasury Regulations, the Adjusted
Capital Account Deficit of such Member as quickly as possible, provided that an
allocation pursuant to this Section 3.3(b)(1) shall be made only if
and to the extent that the Members would have an Adjusted Capital Account Deficit
after all the allocations provided for in this Section 3 have been
tentatively made as if this Section 3.3(b)(1) were not in the
Agreement.


 


(2)                                  In
the event any Member has an Adjusted Capital Account Deficit at the end of any
taxable year which is in excess of the sum of (i) the amount such Member
is obligated to restore pursuant to any provision of this Agreement and (ii) the
amount such Member is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5),
the Member shall be specially allocated items of the Company income and gain in
the amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 3.3(b)(2) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit in
excess of such sum


 


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after all other allocations provided for in this Article III have
been tentatively made as if Section 3.3(b)(1) hereof and this Section 3.3(b)(2) were
not in the Agreement.


 


(3)                                  Notwithstanding
the provisions of Section 3.3(a), in no event shall Losses of the Company
be allocated to a Member if such allocation would result in such Member’s
having an Adjusted Capital Account Deficit at the end of any taxable year.  All Losses in excess of the limitation set
forth in this Section 3.3(b)(3) shall be allocated to the Members
with positive balances in their Capital Accounts, as a class pro rata in
proportion to such positive balances.


 


(4)                                  To
the extent an adjustment to the adjusted tax basis of any Company asset,
pursuant to Section 734(b) or Section 743(b) of the Code is
required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as the result of a distribution to a Member in
complete liquidation of such Member’s interest in the Company, the amount of
such adjustment to Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specifically allocated to
the Members in accordance with their interests in the Company in the event
Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to
whom such distribution was made in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.


 


(5)                                  The
allocations set forth in Sections 3.3(b)(1), (2), (3) and (4) (the “Regulatory Allocations”) are intended to
comply with certain requirements of Treasury Regulations promulgated under Section 704
of the Code.  The Regulatory Allocations
shall be taken into account in allocating other Profits, Losses, and items of
income, gain, loss, and deduction to each Member so that, to the extent
possible, and to the extent permitted by Treasury Regulations, the net amount
of such allocations of other Profits, Losses, and other items and the
Regulatory Allocations to each Member shall be equal to the net amount that
would have been allocated to each Member if the Regulatory Allocations had not
been made.


 


(6)                                  The
respective interests of the Members in the Profits, Losses, or items thereof
shall remain as set forth above unless changed by amendment to this Agreement
or by an assignment of a Unit authorized by the terms of this Agreement.  Except as otherwise provided herein, for tax
purposes, all items of income, gain, loss, deduction, or credit shall be allocated
to the Members in the same manner as are Profits and Losses; provided, however,
that with respect to property contributed to the Company by a Member, such
items shall be shared among the Members so as to take into account the
variation between the basis of such property and its fair market value at the
time of contribution in accordance with Section 704(c) of the Code.


 


(7)                                  The
Capital Accounts of all Members shall be adjusted pursuant to the rules of
Treasury Regulation Section 1.704-1(b)(2)(iv)(f) upon the
circumstances set forth in Treasury Regulation Section 1.704-1(b)(2)(iv)(f)(5).  Corresponding adjustments shall be made as
provided for under Treasury Regulation 1.704-1(b)(2), including Section 1.704-1(b)(2)(iv)(g).


 


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(c)                                  Other Special Allocations.  The following special allocations shall be
made in the following order:


 


(1)                                  Except
as otherwise provided in Section 1.704-2(f) of the Treasury
Regulations, notwithstanding any other provision of this Section 3, if
there is a net decrease in Company Minimum Gain (as defined in Section 13.1)
during any fiscal year, each Member shall be specially allocated items of
Company income and gain for such fiscal year (and, if necessary, subsequent
fiscal years) in an amount equal to such Member’s share of the net decrease in
Company Minimum Gain, determined in accordance with Section 1.704-2(g) of
the Treasury Regulations.  Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto.  The items to be so allocated shall be
determined in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of
the Treasury Regulations.  This Section 3.3(c)(1) is
intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of
the Treasury Regulations and shall be interpreted consistently therewith.


 


(2)                                  Except
as otherwise provided in Section 1.704-2(i)(4) of the Treasury
Regulations, notwithstanding any other provision of this Section 3, if
there is a net decrease in Member Nonrecourse Debt Minimum Gain (as defined in Section 13.1)
attributable to a Member Nonrecourse Debt (as defined in Section 13.1)
during any fiscal year, each Member who has a share of the Member Nonrecourse
Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Section 1.704-2(i)(5) of the Treasury
Regulations, shall be specially allocated items of Company income and gain for
such fiscal year (and, if necessary, subsequent fiscal years) in an amount
equal to such Member’s share of the net decrease in Member Nonrecourse Debt
Minimum Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Section 1.704-2(i)(4) of the Treasury
Regulations.  Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto.  The items to be so allocated shall be
determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of
the Treasury Regulations.  This Section 3.3(c)(2) is
intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4) of
the Treasury Regulations and shall be interpreted consistently therewith. 


 


(3)                                  Nonrecourse
Deductions (as defined in Section 13.1) for any fiscal year shall be
specially allocated among the Members in proportion to their allocable Profits.


 


(4)                                  Any
Member Nonrecourse Deductions (as defined in Section 13.1) for any fiscal
year shall be specially allocated to the Member who bears the economic risk of
loss with respect to the Member Nonrecourse Debt to which such Member
Nonrecourse Deductions are attributable in accordance with Section 1.704-2(i)(1) of
the Treasury Regulations.


 


(5)                                  Solely
for purposes of determining a Member’s proportionate share of the “excess
nonrecourse liabilities” of the Company within the meaning of Section 1.752-3(a)(3) of
the Treasury Regulations, the Members’ interests in Company profits are in proportion to their allocable Profits, and, for
purposes of allocating Nonrecourse Liabilities (as defined in Section 13.1)
of the Company among the Members pursuant to Treasury Regulation


 


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Section 1.752-3(a)(3),
the parties agree that each Member’s interest in Company profits shall be in
proportion to their allocable Profits.


 


(6)                                  To
the extent permitted by Section 1.704-2(h)(3) of the Treasury
Regulations, the Members shall endeavor to treat distributions of funds as
having been made from the proceeds of a Nonrecourse Liability (as defined in Section 13.1)
or a Member Nonrecourse Debt (as defined in Section 13.1) only to the
extent that such distributions would otherwise cause or increase an Adjusted
Capital Account Deficit for any Member.


 


(7)                                  For
purposes of determining the character (as ordinary income or capital gain) of
any Profits allocated to the Members pursuant to this Section 3.3, such
portion of Profits that is treated as ordinary income attributable to the
recapture of depreciation shall, to the extent possible, be allocated among the
Members in the proportion which (i) the amount of depreciation previously
allocated to each Member bears to (ii) the total of such depreciation
allocated to all Members.  This Section 3.3(c)(7) shall
not alter the amount of allocations among the Members pursuant to this Section 3.3,
but merely the character of income so allocated.


 


(d)                                 The Members are aware of the
income tax consequences of the allocations described, and hereby agree to be
bound by the provisions of Section 3.3 in reporting their respective
shares of Company income and loss for income tax purposes.


 


(e)                                  It is the intention of the
Company and its Members that the Company be taxed as a partnership for all
purposes of the Code and similar income tax laws.


 


(f)                                    All matters concerning the
valuation of securities, the allocation of profits, gains and losses among the
Members, including the taxes on those profits, gains and losses, and accounting
procedures, not specifically and expressly provided for by the terms of this Agreement,
shall be determined in good faith by the Managers with regard to their
fiduciary duty to the Members, whose determination in accordance with the terms
hereof shall be final, binding and conclusive upon all of the Members.


 


(g)                                 In connection with the exercise
of a Put or a Call with respect to Class B Units pursuant to Article X
hereof, any Profits attributable to such Class B Units arising after the
date of exercise of the applicable Put or Call shall be allocated to the
transferee of such Class B Units so long as the closing of such transfer
occurs.


 


Section 3.4   Distributions.


 


(a)                                  Subject to the making of the Tax
Distributions (as defined in clause (d) below) and Accrued Distributions
(as defined in clause (e) below), if any, to the extent permitted by the
Act, the Company shall make distributions as follows:


 


(i)                                     first,
100% to the holders of the Class A Units in an amount equal to the sum of (a) the
allocation to such holders of PBT under Section 3.5(a)(i) for such
calendar year plus (b) the Class A Distribution Shortfall Amount (as
defined in Section 13.1) for such year; 


 


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(ii)                                  second,
following the distribution pursuant to clause (i) above, 100% to the
holders of the Class B Units in an amount equal to the sum of (a) the
allocation to such holders of PBT under Section 3.5(a)(ii) for such
calendar year plus (b) the Class B Distribution Shortfall Amount (as
defined in Section 13.1) for such year; 


 


(iii)                               third,
following the distributions pursuant to clauses (i) and (ii) above,
100% to the Members in accordance with any other amounts which have been
allocated pursuant to either or both of Section 3.5(a) and Section 3.5(b) and
which have not previously been distributed, with any distributions under this
clause (iii) first being applied to the allocation of PBT for the earliest
year or period for which PBT has been allocated but has not been fully
distributed (using a first in-first out approach); and


 


(iv)                              fourth,
following distributions pursuant to clauses (i), (ii) and (iii) above,
100% to the members pro rata in accordance with the number of Units owned by
each.


 


It is the
intention of the Members that, subject to clause (b) below, the Company
shall generally make Distributions as described in 3.4(a)(i), (ii) and (iii) above
on a quarterly basis, generally in arrears of no more than 90 days, based upon
the financial statements and the then-current forecasts prepared in good faith
by the officers of the Company and its subsidiaries and taking into account the
ongoing capital requirements of the Company. 
Determinations as to the amount of such distributions shall be made by
MDC in good faith after consultation with Zyman.  Furthermore, in the event that MDC reasonably
anticipates that, based on the financial statements and then-current forecasts
of the Company and its subsidiaries, the Company will be able to make
distributions in an amount equal to the amount set forth in Section 3.4(a)(i) above
during a given calendar year, MDC will in good faith cause the Company to make
distributions to the holders of the Class B Units towards the amount set
forth in Section 3.4(a)(ii) prior to the end of such calendar year,
at such times and in such amounts as MDC may in good faith determine.


 


(b)                                 Any distribution of funds prior
to the end of the fiscal year in which such funds came into possession of the
Company (including any Tax Distribution, but excluding any Accrued
Distribution) shall be treated as a non-interest-bearing loan (a “draw”) from the Company to each Member
receiving such draw and shall be deemed repaid by reducing the amount of each
subsequent distribution to the Member receiving such draw pursuant to this Section 3.4(b) by
the lesser of (i) the entire amount otherwise distributable to the Member
receiving such draw, and (ii) the entire amount of any unrepaid draws
pursuant to this Section 3.4(b). 
For purposes of this clause, a Selling Member (as defined below) and any
transferee of such Selling Member shall be treated as a single Member with
respect to the Units transferred by such Selling Member to such transferee.


 


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(c)                                  All amounts withheld pursuant to
the Code and Tax Regulations or any provision of any state or local tax law
with respect to any payment, distribution, or allocation to the Company or the
Members shall be treated as amounts distributed to the Members pursuant to this
Section 3.4 for all purposes under this Agreement.  The Managers are authorized to withhold from
distributions, or with respect to allocations, to the Members and to pay over
to any Federal, state, or local government any amounts required to be so
withheld pursuant to the Code and Tax Regulations or any provisions of any
other Federal, state, or local law, and shall allocate any such amounts to the
Members with respect to which such amount was withheld.  Notwithstanding any other provision in this
Agreement, prior to the making any such distribution, the Managers in their
sole discretion may require the delivery to the Managers from each or any
potential distributee such evidence as the Managers may reasonably request
evidencing the absence of any third-party claims with respect to such potential
distribution.


 


(d)                                 Notwithstanding anything in this
Agreement to the contrary, in preference to any other distributions pursuant to
this Section 3.4, the Members shall cause the Company to distribute cash
of the Company to its Members on a quarterly (or other reasonable) basis equal
to the product of (i) each Member’s distributive share of the Company’s
taxable income (determined without regard to the election made under Section 754
of the Code) for the current year and (ii) the maximum individual tax
rates for federal taxpayers and Georgia taxpayers (the “Tax Distributions”); provided,
that, no Member will receive a Tax Distribution unless such Member’s allocation
of the Company’s taxable income exceeds all prior cumulative allocations of the
Company’s taxable losses and provided further that if a Member receives a Tax
Distribution for a particular year that is greater than any distribution to
which that Member is entitled under Section 3.4(a), that Member will
contribute to the Company an amount equal to the portion of the aggregate
amount of any Tax Distribution(s) received by such Member which exceed the
amount of tax which is calculated as provided above and is attributable to such
Member’s allocable share of the Company’s taxable income for such year.  For purposes of Section 3.4(a) hereof, a Tax
Distribution shall be deemed to be a distribution at the time of such Tax
Distribution and shall reduce the amount of each subsequent distribution to any
Member receiving such Tax Distribution by the amount of any such Tax
Distribution.


 


(e)                                  Exhibit 3.4(e) hereto
sets forth the portion of “5% Equity” (as set forth on the Closing Balance
Sheet (as defined in the Purchase Agreement)) allocated to each of the Persons
set forth on such exhibit (such exhibit, the “Pre-Closing Member Schedule”).  No later than 5 days after the finalization
of the Closing Balance Sheet pursuant to Section 5.11 of the Purchase
Agreement, the Company shall update the Pre-Closing Member Schedule to set
forth the final amount of 5% Equity and Dividends Payable (as each such term is
defined in the Purchase Agreement) on the Company’s Closing Balance Sheet and
the portion of each such amount allocated to each of the Persons listed on such
schedule.  Notwithstanding anything to
the contrary in this Agreement, prior to any distribution pursuant to Section 3.4(a) but
in accordance with the last paragraph of Section 3.4(a), the Company shall
distribute cash to the Persons set forth on the Pre-Closing Member Schedule in
the amounts set forth opposite each such Person’s name (collectively, the “Accrued Distributions”).  Such amounts shall be distributed first, in
satisfaction of the 5% Equity amounts and second in satisfaction of the
Dividends Payable amounts allocated to each such Person.


 


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(f)                                    Notwithstanding anything in this
Agreement to the contrary, any PBT which has been allocated to the transferred
Units of a Selling Member pursuant to Section 3.5(c) shall, subject
to Section 3.4(b), be distributed to such Selling Member in accordance
with Section 3.4(a) as if such Selling Member owned Units.


 


Section 3.5   Allocation of
PBT.  


 


(a)                                  PBT for purposes of this
Agreement shall be allocated for each Distribution Period Calendar Year as
follows:


 


(i)                                     first,
100% to the holders of the Class A Units until the holders of Class A
Units have been allocated the Preferred Return Amount and any Class A PBT
Shortfall Amount with respect to such Distribution Period Calendar Year;


 


(ii)                                  second,
100% of any remaining PBT after giving effect to the allocations outlined in
clause (i) above to the holders of Class B Units until the holders of
Class B Units have been allocated an amount equal to the Class B
Catch-Up Amount;


 


(iii)                               third,
(x) in the event that the PBT Margin for such Distribution Period Calendar Year
is at least 30%, 100% of any remaining PBT after giving effect to the
allocations outlined in clauses (i) and (ii) above to the Members pro
rata in accordance with the number of Units owned by each Member until the
Members have been allocated an amount equal to the product of 30% and the
Revenues for such Distribution Period Calendar Year and any remainder in
accordance with clause (iv) below and (y) in the event that the PBT Margin
for such Distribution Period Calendar Year is less than 30%, 100% of any
remaining PBT after giving effect to the allocations outlined in clauses (i) and
(ii) above to the Members pro rata in accordance with the number of Units
owned by each Member; and


 


(iv)                              fourth,
(x) for the first two Distribution Period Calendar Years and the portion of the
third Distribution Period Calendar Year ending on the second anniversary of the
Effective Time (such date, the “Second
Anniversary”) 100% of any remaining PBT after giving effect to the
allocations outlined in clauses (i), (ii) and (iii) above to the
Members, allocated 25% to the holders of the Class A Units and 75% to the
holders of the Class B Units and (y) for the remaining Distribution Period
Calendar Years (including the portion of the third Distribution Period Calendar
Year following the Second Anniversary), 100% of any remaining PBT after giving
effect to the allocations outlined in clauses (i), (ii) and (iii) above
to the Members, allocated 30% to the holders of the Class A Units and 70%
to the holders of the Class B Units, in each case pro rata


 


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in accordance
with the number of Units of such class owned by each Member. 


 


(b)                                 PBT for purposes of this
Agreement shall be allocated for any Post Distribution Period Calendar Year to
the Members pro rata in accordance with the number of Units owned by each
Member.


 


(c)                                  Notwithstanding anything in this
Agreement to the contrary, in the event that a Member transfers any Units (such
Member, a “Selling Member”),
then, with respect to the calendar year in which such transfer occurred, the
Company shall allocate PBT to such Selling Member’s transferred Units in
accordance with Sections 3.5(a) and 3.5(b) above pro rata based on
the number of days elapsed in such calendar year from the first day of such
calendar year through the date of such transfer relative to a 365-day
year and pro rata to the transferee based on the remainder of the number of
days in such calendar year subsequent to the date of transfer.


 


ARTICLE IV


 


MANAGEMENT


 


Section 4.1   Management of
the Company.


 


(a)                                  Except to the extent otherwise
provided for herein, the powers of the Company shall be exercised by and under
the authority of, and the business and affairs of the Company shall be managed
under, the direction of the Managers of the Company. Notwithstanding the
foregoing or any other provisions hereof to the contrary, for as long as Zyman
and the Management Unitholders own Class B Units representing at least 20%
of the outstanding Units, the taking of any of the actions listed in clauses (i) through
(xi) below shall require the consent of holders of a majority of the Class B
Units. 


 


(i)                                     a
sale, lease or other disposition of all or substantially all of the assets or
business of the Company, except in connection with (x) a sale, lease or other
disposition of all or substantially all of the assets or business or stock of
MDC or MDC Partners, including pursuant to merger, consolidation, amalgamation
or similar transaction, (an “MDC Sale”)
or (y) an MDC Financing (as defined in Section 4.1(f) hereof) or the
exercise of a default remedy under any agreement entered into in connection
with an MDC Financing;


 


(ii)                                  a
merger, consolidation or amalgamation of the Company or any of its subsidiaries
with and into another Person or of another Person with and into the Company or
any of its subsidiaries;


 


(iii)                               the
authorization or issuance of additional Class A Units, Class B Units
or other equity ownership interests in, or the granting of any other rights to
participate in the proceeds of the sale of assets of the Company which are
dilutive to the Class B Unitholders; or the incurring of debt for borrowed
money in excess of the amount provided for in the approved annual operating
budget or capital expenditure budget, except in connection with borrowings
under the terms and conditions of the MDC


 


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Cash
Management Program (and in compliance with Section 4.1(d) below);
provided, that the agreement of MDC and holders of a majority of the Class B
Units shall not be required in connection with issuances of Units to employees
of the Company and its subsidiaries from time to time so long as such issuances
represent in the aggregate no more than 10% of the fully-diluted Units
outstanding; and provided, further, that no approval shall be required in
connection with issuances of Units contemplated by this Agreement and the
Purchase Agreement;


 


(iv)                              a
material acquisition by the Company or any of its subsidiaries of the stock,
assets or business of another Person or any investment by the Company of funds
or other assets in another Person (other than money market investments or their
equivalent); 


 


(v)                                 except
as permitted under Section 14.4 hereof, an amendment or modification to
the Certificate or this Agreement; 


 


(vi)                              the
payment by the Company or any of its subsidiaries of any management fee to any
Member or one of such Member’s Affiliates;


 


(vii)                           a
relocation of the Company’s primary offices outside of the Atlanta metropolitan
area;


 


(viii)                        entering
into any business other than, or any transaction outside of, the normal
business activities of the Company and any of its subsidiaries and related
activities other than in connection with a transfer by MDC or any of its
Affiliates of their respective interests in the Company to another wholly-owned
subsidiary of MDC Partners;


 


(ix)                                the
making of any loan to any employee of the Company or any of its subsidiaries
other than reasonable travel and business expense advances in the ordinary
course and consistent with past practices exceeding $10,000, in the aggregate,
at any one time outstanding, other than any loans contemplated by Article X
hereof;


 


(x)                                   any
change in the name of the Company; and


 


(xi)                                the
delegation to any Manager or to any committee of the Board of Managers of the
Company or any subsidiary or to any officer of the Company or any subsidiary
the power to take any of the actions referred to in the foregoing clauses
before obtaining the authorization required by this Section;


 


provided that, notwithstanding anything in the foregoing to the
contrary, nothing in this clause (a) shall require the consent of the
holders of the Class B Units in connection with or related to a purchase
of Units by the Company or MDC pursuant to Article X hereof (including,
without limitation, any incurrence of indebtedness in connection therewith) or
any subsequent sale or issuance of an equal number of Units, options to
purchase an equal number of Units or other equity-based awards with respect to
an equal number of Units by MDC or the Company to any employee, director or
consultant of the Company.


 


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(b)                                 As long as this Agreement is in
full force and effect, the Company shall keep on file at its principal office a
copy of this Agreement. The Company shall make such copy available to any
Member during normal business hours and upon reasonable advance written notice.


 


(c)                                  As long as this Agreement is in
full force and effect, the Company and the Members agree that they shall cause
any and all subsidiaries of the Company to comply with the provisions of this Section 4.1
to the extent such provisions are applicable to such subsidiary.


 


(d)                                 The parties hereto further agree
that the operations of the Company and its subsidiaries shall be conducted (i) to
participate in the overall cash management and banking program of MDC Partners
as set forth on Schedule 4.1(d) hereto (the “MDC Cash Management Program”), and (ii) to
comply on a timely basis with the financial reporting and budgeting procedures,
as well as internal controls over financial reporting, of MDC Partners as from
time to time in effect, which procedures require the approval of an annual
operating budget, capital expenditure budget and cash flow projections and
require management of operating companies to seek approval prior to material
deviations from such budgets.  If any
Affiliate of MDC Partners (other than the Company or any of its subsidiaries)
fails to meet its obligations under the MDC Cash Management Program, then MDC
Partners shall satisfy such obligations to the extent that such Affiliate
failed to do so. 


 


(e)                                  The parties hereto further agree
that the Company shall hereby adopt, and shall take appropriate steps to cause
the employees of the Company to comply with, the Code of Conduct of MDC Partners,
as the same may be amended from time to time.


 


(f)                                    Notwithstanding anything to the
contrary contained in this Agreement, in consideration for the payment of the
Purchase Price under Section 2.1 of the Purchase Agreement and for other
good and valuable consideration, the parties hereto hereby (i) agree that
MDC Partners and/or any 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 MDC’s Membership Interests; (x) pledge
or grant a security interest in or otherwise have a lien placed upon the assets
and properties of the Company and/or its subsidiaries; (y) assign all of its
rights, benefit, title and interest in the Company and distributions therefrom,
including, without limitation, all rights and claims pursuant to and under any
Put or Call to, or to an agent or representative on behalf of, its bank or
lender or group of banks or group of lenders or holders of its other senior
debt (as applicable and collectively, the “Lender”); and (z) have the Company and/or its subsidiaries 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 Membership Interests which have been pledged
or assigned by it.  


 


15





















 


(g)                                 MDC Partners shall cause
sufficient working capital to be made available to the Company as shall be
determined by the Board of Managers to be reasonably necessary to execute upon
its approved annual operating and capital expenditure budgets, but in no event
shall MDC Partners or any of its Affiliates be required to fund losses of the
Company or any of its subsidiaries.  Such
working capital shall be provided to the Company on terms consistent with the
MDC Cash Management Program and accordingly, neither MDC nor any of its
Affiliates shall be required to provide working capital in the event that the
consolidated cash balance of the Company in the MDC Cash Management Program is
negative.


 


(h)                                 The Company shall comply with
all applicable federal, state and local laws and the Company shall provide
reasonable assistance to MDC and its Affiliates in their compliance with all
applicable federal, state and local laws, including without limitation, the
provisions of the Sarbanes-Oxley Act of 2002, as amended from time to
time.  The Company shall use its
reasonable best efforts to undertake the actions recommended in the 404 Report
(as defined in the Purchase Agreement).


 


Section 4.2   Authority of
Managers. 
Except as set forth below, unless specifically authorized by a
resolution duly adopted by the Managers, no Manager, solely in his capacity as
a Manager, shall have the authority or power to act as agent for or on behalf
of the Company or any other Manager, to do any act which would be binding on
the Company or any other Manager, to incur any expenditures on behalf of or for
the Company, or to execute, deliver and perform any agreements, acts,
transactions or other matters on behalf of the Company.  


 


Section 4.3   Number and
Qualifications of Managers.  As long as Sergio Zyman is the Chief
Executive Officer of the Company, there shall be seven Managers of the Company
of which MDC shall be entitled to appoint four Managers and Zyman shall be
entitled to appoint three Managers, one of whom shall be Sergio Zyman (each
Manager appointed by Zyman must be a full-time employee of the Company or one
of its subsidiaries) and, in the event that Sergio Zyman is no longer the Chief
Executive Officer of the Company, and for so long as the Management Unitholders
own at least 5% of the outstanding Units, the Management Unitholders shall be
entitled to appoint one Manager (who must be a full-time employee of the
Company) and MDC shall be entitled to appoint two additional Managers or, at
MDC’s election, the number of Managers shall be reduced to five.  Thereafter, the Managers shall be elected in
accordance with Section 4.4.  No
decrease in the number of Managers shall have the effect of shortening the term
of any incumbent Manager.  None of the
Managers need be Members of the Company or residents of the State of
Delaware.  The initial designees of MDC
are Miles Nadal, Graham Rosenberg, Steven Berns and Mitchell Gendel.  The initial designees of Zyman are Sergio Zyman, Lee White and Craig
Binkley.


 


Section 4.4   Election and
Term of Service. 
At each annual meeting of Members held in accordance with this
Agreement, the Members may elect Managers to serve until the next succeeding
annual meeting.  Subject to Section 4.3,
the individuals receiving the greatest number of votes (determined by number of
Units cast in favor) shall be the Managers. 
Cumulative voting for the election of Managers shall not be
permitted.  Each Manager elected shall
serve as Manager for the term for which he is elected and until his successor
shall have been elected by the Members and qualified or until his earlier death,
resignation, retirement, disqualification or removal in accordance with this
Agreement.


 


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Section 4.5   Removal;
Filling of Vacancies.  As long as Sergio Zyman is the Chief
Executive Officer or the Management Unitholders own at least 5% of the
outstanding Units, only MDC can remove and replace its appointed Managers and
only Zyman or the Management Unitholders, as the case may be, can remove and
replace its or their respective appointed Managers.  Following such time as SZ ceases to be Chief
Executive Officer of the Company and the Management Unitholders cease to own at
least 5% of the outstanding Units, the Members by the required vote as set
forth in Section 5.5 shall be entitled to remove any Manager and to elect
for the unexpired term of such Manager so removed another individual.  Upon the resignation, retirement or death of
any of the Managers of the Company, subject to Section 4.3, the Members by
the required vote as set forth in Section 5.5, shall be entitled to elect
another Person for the unexpired term of such Manager.


 


Section 4.6   Place of
Meetings. 
Meetings of the Managers, annual, regular or special, may be held either
in Atlanta, Georgia or Toronto, Ontario, unless otherwise agreed to by the
Managers (including, for as long as Sergio Zyman is the Chief Executive Officer
of the Company, at least one Manager appointed by MDC and one Manager appointed
by Zyman).


 


Section 4.7   Annual
Meetings. 
Annual meetings of the Managers, of which no notice shall be required,
shall be held at the discretion of the Managers immediately following the
annual meeting of Members for the purpose of designating officers of the
Company and the transaction of any other business.  


 


Section 4.8   Regular
Meetings. 
The Managers shall notify each of the Members of regular meetings of the
Managers, which meetings shall be held no less frequently than quarterly on the
last business day of each fiscal quarter or at such times and places as may be
fixed from time to time by resolution adopted by the Managers.  Except as otherwise provided by statute, any
and all business may be transacted at any regular meeting.  The Managers shall be given reasonable notice
of the date, time and place of any scheduled regular meeting. 


 


Section 4.9   Special
Meetings. 
Special meetings of the Managers may be called by any Manager on not
less than forty-eight hours’ notice to each Manager, either personally or by
mail (overnight service), email, telephone, facsimile or similar communication.  Only business within the purpose or purposes
described in the notice of special meeting of Managers may be conducted at the
meeting.


 


Section 4.10   Quorum of
and Action by Managers.  At all meetings of the Managers the presence
of a majority of the number of Managers fixed by or in the manner provided by
this Agreement shall be necessary and sufficient to constitute a quorum for the
transaction of business.  Unless
otherwise specifically required by law or this Agreement, the act of a majority
of Managers present at a meeting at which a quorum is present shall be the act
of the Managers; provided that such majority includes the affirmative vote of
one MDC Manager.  If a quorum shall not
be present at any meeting of the Managers, the Managers present may adjourn the
meeting to another time by giving reasonable notice of the date, time and place
of the adjourned meeting to all Managers. At any such adjourned meeting at
which a quorum is present, any business may be transacted that might have been
transacted at the meeting as originally convened.


 


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Section 4.11   Approval or
Ratification of Acts or Contracts by Members.  The Managers, in their discretion, may submit
any act or contract for approval or certification at any annual meeting of the
Members, or at any special meeting of the Members called for the purpose of
considering any such act or contract, and subject to the provisions of Section 4.1(a),
any act or contract that shall be approved or ratified by the holders of a
majority of the Units entitled to vote thereon or such greater percentage as
may be provided by any other applicable provision of this Agreement shall be as
valid and binding upon the Company and upon all the Members as if it shall have
been approved or ratified by every Member of the Company.


 


Section 4.12   Action
Without a Meeting. 
Subject to Section 4.1(a), any action required or permitted to be
taken at any meeting of the Managers may be taken without a meeting, with prior
notice of such contemplated action to each of the Managers (with no requirement
to provide copies to any additional persons described in Section 14.1 or
otherwise), and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the minimum number of Managers
that would have been required to approve such action at a meeting and the
writing or writings are filed with the minutes of proceedings of the
Managers.  A telegram, telex, cablegram,
an email or similar transmission by a Manager, or a photographic, photostatic,
facsimile or similar reproduction of a writing signed by a Manager, shall be
regarded as signed by the Manager for purposes of this Section 4.12.


 


Section 4.13   Telephone
Meetings. 
Any Manager may participate in any meeting of Managers by using
conference telephone or similar communications equipment by means of which all
individuals participating in the meeting can hear each other, and participation
in a meeting pursuant to this Section shall constitute presence in person
at such meeting.


 


Section 4.14   Interested
Managers and Officers.  No contract or transaction between the
Company and one or more of its Managers or between the Company and any other
Person in which one or more of its Members, Managers or officers are
shareholders, partners, members, directors, managers or officers, or have a
financial or equity interest, shall be void or voidable solely for this reason,
or solely because the Manager is present at or participates in the meeting of
the Managers which authorizes the contract or transaction, or solely because
his or their votes are counted for such purpose, if: (i) all material
facts as to the relationship or interest and as to the contract or transaction
are disclosed or are known to the Managers, and the Managers in good faith
authorize the contract or transaction by the affirmative vote of a majority of
the disinterested Managers, even though the disinterested Managers be less than
a quorum; (ii) the material facts as to the relationship or interest and
as to the contract or transaction are disclosed or are known to the Members
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of a majority of the disinterested holders of
Units entitled to vote thereon or such greater percentage as may be provided by
any other applicable provision of this Agreement; or (iii) the contract or
transaction is fair as to the Company as of the time it is authorized, approved
or ratified by the Managers or the Members. 



 


Section 4.15   Manager’s
Compensation. 
No Manager shall be entitled to receive any compensation for attendance
at meetings of the Managers or otherwise serving as a Manager. Nothing in this
Agreement shall be construed to preclude any Manager from serving the Company
in any other capacity and receiving proper compensation therefor.


 


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Section 4.16   Time Devoted
to Company. 
The Managers shall devote such time to Company business as they deem necessary
to manage and supervise the business and affairs of the Company in an efficient
manner; but nothing in this Agreement shall preclude the employment of any
agent, third party or Affiliate to manage or provide other services with
respect to the Company’s assets or business as the Managers shall determine.


 


Section 4.17   Liability of
Managers. 
Except as expressly provided under the Act, no Manager shall be liable
for the debts, liabilities, contracts or other obligations of the Company;
provided, however, that each Manager shall be liable for any debts,
liabilities, contracts or other obligations of the Company incurred or agreed
to by such Manager without authorization and in violation of Section 4.2
of this Agreement.


 


Section 4.18   2005 Budget.  During calendar year 2005, the Company shall
operate in accordance with the budget attached hereto as Exhibit 4.18.


 


ARTICLE V


 


MEETINGS
OF MEMBERS


 


Section 5.1   Annual
Meetings. 
An annual meeting of the Members shall be held on such date, at such
time and at such place as shall be determined by the Managers and stated in the
notice of the meeting.  At such meeting,
the Members shall elect the Managers (subject to Section 4.3 above) and
transact such other business as may properly be brought before the meeting.


 


Section 5.2   Special
Meetings. 
Special meetings of the Members, for any purpose or purposes, unless
otherwise prescribed by statute, the Certificate or this Agreement, may be
called by holders of at least a majority of any class of Units.  Only business within the purpose or purposes
described in the notice of special meeting of Members may be conducted at the
meeting.


 


Section 5.3   Place of
Meetings. 
Meetings of Members shall be held at such places, within or without the
State of Delaware, as may from time to time be fixed by the Managers or as
shall be specified or fixed in the respective notices or waivers of notice
thereof; provided, however, the Members agree that such meetings of Members
shall be held in Atlanta or Toronto, unless otherwise agreed upon by the
Members.


 


Section 5.4   Notice of
Meetings. 
Written or printed notice (which may be given by email) stating the
place, day and hour of each meeting of the Members and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than five nor more than fifty days before the date of the
meeting, either personally, by mail or by email, by or at the direction of any
Manager or individual calling the meeting, to each Member entitled to vote at
the meeting; provided, however, that notice of any meeting shall not be
required if all Members not receiving notice waive any and all requirements for
giving notice of such meeting of the Members.


 


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Section 5.5   Quorum of and
Action by Members. 
With respect to any matter, the holders of at least a majority of the
Units entitled to vote on that matter, present in person or represented by
proxy shall constitute a quorum of each meeting of Members for the transaction
of business with respect to that matter. 
Unless otherwise provided in this Agreement, the Members represented in
person or by proxy at a meeting of Members at which a quorum is not present may
adjourn the meeting until such time and place as may be determined by a vote of
the holders of a majority of the Units represented in person or by proxy at
that meeting.  At any such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted that might have been transacted at the meeting as originally
convened.  Except as otherwise
specifically provided in this Agreement (including without limitation, the
provisions of Section 4.1(a) hereof) or under applicable law, with
respect to any matter the affirmative vote or consent of the holders of a
majority of the Units (voting together as one class) entitled to vote on that
matter and represented in person or by proxy at a meeting of Members at which a
quorum is present shall be the act of the Members.  Unless otherwise provided in this Agreement,
once a quorum is present at a meeting of Members, the Members represented in
person or by proxy may conduct such business as may be properly brought before
the meeting until it is adjourned, and the subsequent withdrawal from the
meeting of any Member or the refusal of any Member represented in person or by
proxy to vote shall not affect the presence of a quorum at the meeting.


 


Section 5.6   Action
Without a Meeting. 
Any action required by the Act to be taken at any annual or special
meeting of Members, or any action which may be taken at any annual or special
meeting of Members, may be taken without a meeting, with prior notice of such
contemplated action to each of the Members thereof (with no requirement to
provide copies to any additional persons described in Section 14.1 or
otherwise), and subject to Section 4.1(a), without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
Members holding a majority of all of the Units (or if a higher percentage of
Units is required to take action, such higher percentage).  A telegram, telex, cablegram, an email or
similar transmission by a Member, or a photographic, photostatic, facsimile or
similar reproduction of a writing signed by a Member, shall be regarded as
signed by the Member for purposes of this Section 5.6.


 


Section 5.7   Telephone
Meetings. 
Subject to the provisions of applicable law and this Agreement regarding
notice of meetings, a Member may participate in any meeting by using conference
telephone or similar communications equipment by means of which all individuals
participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section 5.7 shall constitute presence in person
at such meeting, except when a Person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting was not lawfully called or convened.


 


ARTICLE VI


 


OFFICERS


 


Section 6.1   Officers.  The Managers may designate one or more
individuals (who may or may not be Managers) to serve as officers of the
Company.  The Company shall have such


 


20





















 


officers as the Managers may from time to time determine.  Any two or more offices may be held by the
same individual.  An officer of the
Company shall have the duties and responsibilities consistent with his position
and shall perform such duties and responsibilities as shall from time to time
be prescribed or delegated to him by the Managers, subject to the terms of any
employment agreement with the Company or one of its subsidiaries to which such
officer may be a party. The parties hereto hereby initially designate the
following persons as officers of the Company: Sergio Zyman, Chairman and Chief
Executive Officer; Jeff Pruett, Vice President, Finance, Lee White, Vice
President and Chief Operations Officer, Craig Binkley, Vice President and Chief
Consulting Officer, Graham Rosenberg, Vice President, and Mitchell Gendel,
Secretary.  The Managers agree that the
officers shall be authorized to take the actions set forth on Exhibit 6.1 hereto without further
approval of the Managers. 


 


ARTICLE VII


 


ACCOUNTING
AND TAX MATTERS; REPORTS; BANKING


 


Section 7.1   Books and
Records.  At
all times during the continuance of the Company, the Company shall maintain and
cause each of its subsidiaries, if any, to maintain, at their respective
principal place of business, separate books of account that shall show a true
and accurate record of all costs and expenses incurred, all charges made, all
credits made and received and all income derived in connection with the
operation of their respective businesses in accordance with United States
generally accepted accounting principles, consistently applied from year to
year (“GAAP”). 
Such books of account, together with a copy of this Agreement and of the
Certificate, shall at all times be maintained at the principal place of
business of the Company, shall be open to inspection and examination at
reasonable times by each Member and its duly authorized representative for any
purpose reasonably related to such Member’s interest as a Member of the
Company.


 


Section 7.2   Capital
Accounts. 
Each Member’s initial individual capital account (the “Capital Account”) shall be as set forth on Schedule 3.1
and adjusted pursuant to Section 3.1. 
Each Capital Account shall be maintained by the Company for each Member
as provided below: 


 


(a)                                  Each Member’s Capital
Contributions when made shall be credited to such Member’s Capital
Account.  The Capital Account of each
Member shall, except as otherwise provided in this Agreement, be (i) credited
with the amount of cash and the fair market value of any property contributed
to the Company by such Member or its predecessor in interest (net of
liabilities secured by such contributed property that the Company is considered
to assume or take subject to under Section 752 of the Code), (ii) credited
with the amount of any Profits or items of income allocated to such member
under Section 3.3 or its predecessor in interest for federal income tax
purposes, (iii) debited by the amount of any Loss or items of deductions
allocated to such member under Section 3.3 or its predecessor in interest
for federal income tax purposes, and (iv) debited by the amount of cash or
the fair market value of any property distributed to such Member its
predecessor in interest (net of liabilities secured by such distributed
property that such Member is considered to assume or take subject to under Section 752
of the Code).  Immediately prior to any
distribution of property by the Company, the Members’ Capital Accounts shall be
adjusted, as required by Treasury Regulation Section 1.704-1(b)(2).


 


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(b)                                 Any adjustments of basis of
Company property provided for under Sections 734 and 743 of the Code and
comparable provisions of state law (resulting from an election under Section 754
of the Code or comparable provisions of state law) shall not affect the Capital
Accounts of the Members except to the extent required by Treasury Regulation § 1.704-1(b)(2)(iv)(m),
and the Members’ Capital Accounts shall be debited or credited pursuant to the
terms of this Section 7.2 as if no such election had been made.


 


(c)                                  It is the intention of the
parties that the Capital Account of each Member be kept in the manner required
under Treasury Regulation § 1.704-1(b)(2)(iv).


 


(d)                                 Capital Accounts shall be
adjusted, in a manner consistent with this Section 7.2, to reflect any adjustments
in items of Company Profits, Losses, income, gain or deduction that result from
amended returns filed by the Company or pursuant to an agreement by the Company
with the Internal Revenue Service or a final court decision.


 


(e)                                  The “Unit Capital Account” of any Unit owned by a Member shall be
equal to the Capital Account of such Member divided by the number of Units
owned by such Member.  Upon a transfer of
Class B Units pursuant to Article X hereof, an allocable portion of
the Class B Member’s Capital Account with respect to such Class B
Units shall be transferred to the purchaser of such Units.  


 


Section 7.3   Tax Matters
Partner. 
The Managers shall appoint one of the Members as the tax matters partner
(“TMP”) under Section 6231 of the
Code, and until the Managers shall appoint another Member, such TMP shall be
MDC.  The TMP shall inform each other
Member of all significant tax matters that may come to its attention
(including, without limitation, any tax audits of the Company) and shall
forward to each other Member copies of all written communications it may
receive in that capacity.  The TMP will
permit each Member to participate in any conferences or meetings with any
taxing authority relating to any tax audit of the Company and any subsequent
administrative or judicial proceedings. 
Nothing in this Section 7.3 shall limit the ability of any Member
to take any action in its individual capacity with respect to tax audit matters
that is left to the determination of an individual Member under Sections 6221
through 6233 of the Code or under any similar state or local provision.  The TMP shall be entitled to the
indemnification provided by the Company as set forth in Article XI.


 


Section 7.4   Tax Elections.  The TMP shall make the following elections on
behalf of the Company:  


 


(a)                                  To elect the fiscal year ending December 31
as the Company’s fiscal year; 


 


(b)                                 To elect the accrual method of
accounting and partnership tax treatment; 



 


(c)                                  To elect, in accordance with
Sections 195 and 709 of the Code and applicable Treasury Regulations and
comparable state law provisions, to treat all organization costs of the Company
as deferred expenses amortizable over 180 months; 


 


(d)                                 To elect under Section 754
of the Code to adjust the basis of the Company’s assets pursuant to Sections
734 and 743 of the Code; and


 


22





















 


(e)                                  To elect with respect to such
other federal, state and local tax matters as the Managers shall determine from
time to time. 


 


Section 7.5   Bank Accounts;
Investment of Company Funds.  The Managers shall cause one or more accounts
to be maintained in the name of the Company in one or more banks, which
accounts shall be used for the payment of expenditures incurred in connection
with the business of the Company and in which shall be deposited any and all
receipts of the Company.  All amounts
shall be and remain the property of the Company and shall be received, held and
disbursed for the purposes specified in this Agreement.  There shall not be deposited in any of such
accounts any funds other than funds belonging to the Company, and no other
funds shall in any way be commingled with such funds.  The Managers may invest or cause to be
invested the Company funds in any manner which the Managers deem appropriate,
in their discretion, and is consistent with prudent business practices.  Notwithstanding anything in this Section 7.5
to the contrary, the Company and/or its subsidiaries shall maintain such
accounts and deposit the funds of the Company and its subsidiaries in such
manner as may be required or advisable in connection with (i) the MDC Cash
Management Program during the Company’s participation in the program or (ii) an
MDC Financing.


 


Section 7.6   Signature of
Negotiable Instruments.  All bills, notes, checks or other instruments
for the payment of money shall be signed or countersigned by such officer,
officers, agent or agents, and in such manner, as are permitted by this
Agreement and as from time to time may be prescribed by resolution (whether
general or special) of the Managers.


 


ARTICLE VIII


 


COVENANTS
OF THE MEMBERS


 


Section 8.1   Independent
Accountants. 
Notwithstanding anything to the contrary in this Agreement, MDC shall be
entitled to appoint the independent public accountants of the Company to audit
the Company’s financial statements.


 


ARTICLE IX


 


DISSOLUTION,
LIQUIDATION AND TERMINATION


 


Section 9.1   Dissolution.  The Company shall be dissolved upon the first
to occur of either of the approval of the Members or the entry of a decree of
judicial dissolution under the Act.  As
promptly as possible following the occurrence of either of the foregoing events
effecting the dissolution of the Company, a Manager of the Company shall
execute a statement of intent to dissolve, in such form as shall be prescribed
by the Secretary of State of Delaware.


 


Section 9.2   Liquidation.  Upon dissolution of the Company, the Members
shall appoint a Manager as liquidating trustee, who shall immediately commence
to wind up the Company’s affairs; provided, however, that a reasonable time
shall be allowed for the orderly liquidation of the assets of the Company and
the satisfaction of liabilities to creditors so as to enable the


 


23





















 


Members to minimize the normal losses attendant upon a
liquidation.  After making payment or
provision for all debts and liabilities of the Company, if determined to be
necessary under the circumstances by the Managers, the Members’ Capital
Accounts shall be adjusted by debiting or crediting each Member’s Capital
Account with its respective share of the hypothetical gains or losses resulting
from the assumed sale of all remaining assets of the Company for cash at their
respective fair market values as of the date of dissolution of the Company in
the same manner as gains and losses on actual sales of such properties are
allocated under Section 3.3 hereof. 
Any distribution to the Members in liquidation of the Company shall be
made by the later of the end of the taxable year in which the liquidation
occurs or 90 days after the date of such liquidation.  Notwithstanding any provisions in this
Agreement to the contrary, no Member shall be obligated to restore a deficit
balance in its Capital Account at any time. 
The proceeds of liquidation shall be distributed, as realized, in the
manner provided in the Act, pursuant to Section 3.4.  Subject to the immediately following
sentence, the Members shall continue to share Profits and Losses during
liquidation in the same proportions, as specified in Section 3.3 hereof,
as before liquidation.  Notwithstanding
anything to the contrary herein, the Managers shall in their good faith
discretion (and in a manner which reflects the economic interests of the
Members consistent with the intent of the transactions set forth in this
Agreement and the Purchase Agreement) allocate items of income, gain,
deduction, and loss for the year of liquidation (and for earlier years if
necessary to the extent then possible) so as to give Members positive Capital
Account balances, immediately before the distributions provided for in the
second preceding sentence, equal to the amount (if any) that would be
distributed to Members if distributions were made in accordance with Section 3.4(a) hereof.  In the event that such Manager is unable to
perform in his capacity as liquidating trustee due to bankruptcy, dissolution,
death, adjudicated incompetency or any other termination of such Manager as an
entity, the liquidating trustee shall be a Person approved by the unanimous
vote of the Membership Interests.  With
respect to this provision, the term “liquidation” shall have the same meaning
as set forth in Treasury Regulation §1.704-1(b)(2)(ii) as in effect
at such time, provided that the events specified in Section 10 shall not
be deemed a “liquidation”.


 


Section 9.3   Termination.  The Company shall terminate when all of the
assets of the Company have been distributed in the manner provided for in this Article IX,
and the Certificate shall have been canceled in the manner required by the Act.


 


Section 9.4   Claims of the
Members. 
Members and former Members shall look solely to the Company’s assets for
the return of their Capital Contributions, and if the assets of the Company
remaining after payment of or due provision for all debts, liabilities and
obligations of the Company are insufficient to return such Capital
Contributions, the Members and former Members shall have no recourse against
the Company or any other Member.


 


24





















 


ARTICLE X


 


RESTRICTIONS
ON TRANSFERS; LIQUIDITY RIGHTS


 


Section 10.1   Transfer by
the Members. 



 


(a)                                  Except as provided in the next
sentence, no holder of Class B Units shall directly or indirectly sell,
transfer, assign, pledge, encumber, hypothecate, distribute, dividend or
similarly dispose of, either voluntarily or involuntarily, or enter into any
contract, option or other arrangement or understanding with respect to the
sale, transfer, assignment, pledge, encumbrance, hypothecation, distribution,
dividend or similar disposition of (collectively, “transfer”) any Class B Unit without the consent of MDC (which
shall not be unreasonably withheld in connection with a transfer to any trust
for the benefit of a holder of Class B Units or his or her immediate
family for estate planning purposes), except in a transaction pursuant to this Article X.  Class A Units and any Class B units
held by MDC or its transferees shall be freely transferable, directly or
indirectly, without restriction.


 


(b)                                 Notwithstanding anything in the
foregoing to the contrary, a Management Unitholder may offer to sell any or all
of its Class B Units (for purposes of this Section 10.1, the “Subject Units”) to the following Persons in
accordance with the following procedures:


 


(i)                                     such
Management Unitholder shall first offer to sell such Subject Units to the
Company and the Company shall have the exclusive right to purchase such Subject
Units for a period of 30 days following the later of (x) the receipt of the
notice referred to in Section 10.1(c) and (y) the day that is six
months and one day after such Subject Units were acquired by the Management
Unitholder; and


 


(ii)                                  in
the event that not all of the Subject Units are purchased pursuant to clause (i) above
by the end of the period specified therein, such Management Unitholder shall
offer to sell such unsold Subject Units to MDC and MDC shall have the exclusive
right to purchase such Subject Units for a period of 30 days following the
termination of the period set forth in clause (i) above.  For purposes of this Section 10.1, the
Persons described in clauses (i) and (ii) are known collectively as
the “Purchasers”. 


 


(c)                                  In order for a Management
Unitholder to exercise its right to sell its Class B Units pursuant to Section 10.1(b),
such Management Unitholder shall deliver a written notice to the Company of its
intention to sell its Units pursuant to this Section 10.1, which notice
shall set forth the number of Subject Units being offered for sale and the FMV
(as defined in Section 10.10) per Unit (which may be the most recent
determination made by the Board of Managers).   
Each Purchaser may exercise its rights under this Section 10.1 by
delivering a written notice to the selling Management Unitholder.  The purchase and sale of the Units upon the
exercise of an offer to sell pursuant to Section 10.1(b) shall be
made in accordance with the applicable provisions of Section 10.10.


 


Section 10.2   Five Year
Call; Five Year Put; Eight Year Call.


 


(a)                                  Subject to Section 10.2(d),
at any time during the period commencing on the fifth anniversary of the
Effective Time and ending, solely in the case of the Management Unitholders, on
the day prior to the eighth anniversary of the Effective Time (such period
being referred to herein as the “Fifth Anniversary Call Period”) (it being understood
that with respect to Zyman, the right of MDC to call the Special Zyman Units
shall continue indefinitely), MDC shall have the right (but not the
obligation), exercisable no more than once in any twelve-month period (but
which may be exercised for all or a portion of such Units upon each such
exercise)


 


25





















 


with respect to each of Zyman and each
Management Unitholder, to require Zyman and each Management Unitholder to sell
to it (such right, the “Call”), in
the case of Zyman, up to an aggregate of 2,750,000 Units (such number of Units,
the “Special Zyman Units”)
from time to time, and in the case of each Management Unitholder, up to an
aggregate of such Management Unitholder’s Pro Rata Portion (as defined in Section 13.1)
of 3,250,000 Units during the Fifth Anniversary Call Period (such Call, the “Five Year Call”); provided that MDC shall not
be entitled to Call any Units from a Member until the day that is six months
and one day after the date on which such Units were acquired by such
Member.  MDC may exercise the Five Year
Call by delivering written notice of exercise (a “Call Exercise Notice” (which term shall apply to any notice of
exercise of a Call pursuant to this Article X)) to Zyman at any time on or
after the fifth anniversary of the Effective Time and to the Management
Unitholders during the Fifth Anniversary Call Period.  The purchase and sale of Units upon the
exercise of a Five Year Call shall be made in accordance with the applicable
provisions set forth in Section 10.10. 
Any Call Exercise Notice delivered pursuant to this section or any
other relevant section of this Article X shall set forth the number
of Units subject to the Call.  The
Special Zyman Units subject to the Five Year Call at any time shall be reduced
by any Special Zyman Units purchased by MDC pursuant to Section 10.2(b).


 


(b)                                 Subject to Section 10.2(d),
at any time commencing on the fifth anniversary of the Effective Time and so
long as, prior to such date, SZ has not been terminated under any of the
circumstances described in Section 10.4(a) (it being understood that
the right of Zyman to put the Special Zyman Units described herein shall
continue indefinitely; provided that, if SZ’s employment is terminated as
described in Section 10.4(a), Zyman’s rights under this Section 10.2(b) shall
automatically terminate), Zyman shall have the right (but not the obligation),
exercisable not more than once in any twelve-month period (but which may be
exercised for all or a portion of such Units upon each such exercise), to
require MDC to purchase from it (such right, the “Put” (which term shall apply to any similar right held by
Zyman or a Management Unitholder under this Article X)), the Special Zyman
Units (such Put, the “Five Year Put”);
provided that Zyman shall not be entitled to Put any Units until the day that
is six months and one day after the date on which such Units were acquired by
Zyman.  Zyman may exercise the Five Year
Put by delivering written notice of exercise (a “Put Exercise Notice” (which term shall apply to any notice of
exercise of a Put pursuant to this Article X) and together with a Call
Exercise Notice, an “Exercise Notice”)
to MDC after the fifth anniversary of the Effective Time.  The purchase and sale of the Special Zyman
Units upon the exercise of a Five Year Put shall be made in accordance with the
applicable provisions set forth in Section 10.10.  Any Put Exercise Notice delivered pursuant to
this section or any other relevant section of this Article X
shall set forth the number of Special Zyman Units subject to the Put.  The Special Zyman Units subject to the Five
Year Put at any time shall be reduced by any Special Zyman Units purchased by
MDC pursuant to Section 10.2(a).


 


(c)                                  At any time on or after the
eighth anniversary of the Effective Time (the “Eighth Anniversary Call Period”), MDC shall have the right
(but not the obligation) to Call any and all Units then owned by Zyman (such
right, the “Eight Year Call”);
provided that MDC shall not be entitled to Call any Units from Zyman until the
day that is six months and one day after the date on which such Units were
acquired by Zyman.  MDC may exercise the
Eight Year Call by delivering a Call Exercise Notice to Zyman during the Eighth
Anniversary Call Period.


 


26





















 


The purchase and sale of the Units upon the
exercise of a Call shall be made in accordance with the applicable provisions
set forth in Section 10.10.  


 


(d)                                 Notwithstanding the foregoing,
if the Revenues for the twelve months ending on the date of an Exercise Notice
(such date, the “Exercise Date”)
are less than the average Revenues for the two consecutive twelve month periods
immediately preceding the month of the Exercise Date, then neither MDC nor
Zyman may exercise the Five Year Call or the Five Year Put, as applicable, in
such year.


 


Section 10.3  
Put and Call of Zyman
Units upon SZ Involuntary Termination of Employment.


 


(a)                                  Notwithstanding the Put and Call
Periods described in Section 10.2(a) and Section 10.2(b) above,
in the event that during the period commencing on the Effective Time and ending
on the eighth anniversary of the Effective Time (such period, the “Zyman Involuntary Termination
Period”) SZ
shall no longer be an employee of the Company or any of its subsidiaries by
reason of SZ’s death, Disability (as defined in SZ’s employment agreement with
the Company), a termination by the Company without Cause (including, without
limitation, if the Company gives written notice of its intention not to renew
the term of SZ’s employment pursuant to the terms of SZ’s employment agreement)
or a termination by SZ for Good Reason, then 


 


(i)                                     Zyman
shall be entitled to Put all or a portion of its Units to the Company (the “Zyman Termination Put”) pursuant to and in accordance with
the applicable provisions of Section 10.10; provided, that Zyman shall not
be entitled to Put any Units that it has held for a period of six months or
less.  Zyman may exercise the Zyman
Termination Put by delivering a Put Exercise Notice to the Company anytime
during the Zyman Involuntary Termination Period.  The Company shall be entitled to assign its
obligation to purchase all or a portion of such Units Put by Zyman to MDC; and 


 


(ii)                                  the
Company shall be entitled to Call (the “Company  Termination Call”) all or a portion of Zyman’s Units
pursuant to and in accordance with the applicable provisions of Section 10.10
and, to the extent that the Company has not exercised the Company Termination
Call, MDC shall be entitled to Call any remaining Units; provided, that neither
the Company nor MDC shall be entitled to Call any Units which have not been
held by Zyman for at least six months. 
Each of the Company and MDC may exercise the Company Termination Call by
delivering a Call Exercise Notice to Zyman anytime during the Zyman Involuntary
Termination Period.


 


(b)                                 Any Units which have not been
purchased pursuant to this Section 10.3 during the Zyman Involuntary
Termination Period shall become subject to the Eight Year Call.


 


Section 10.4   Call for
Zyman Units upon SZ Resignation Prior to Fifth Anniversary of Effective Time;
Termination for Cause.


 


(a)                                  Notwithstanding the Call Periods
described in Section 10.2(a) above, in the event that SZ voluntarily
terminates his employment with the Company at any time prior to the fifth
anniversary of the Effective Time (other than for Good Reason) or in the event
that SZ’s


 


27





















 


employment is terminated by the Company for
Cause at any time, then the Company shall have the right to Call all or a
portion of Zyman’s Units pursuant to and in accordance with the applicable
provisions of Section 10.10 and, to the extent that the Company has not
exercised the Call, MDC shall be entitled to Call any remaining Units; provided
that neither the Company nor MDC shall be entitled to Call any Units which
Zyman has not held for a period of at least six months.  Each of the Company and MDC may exercise the
Call by delivering a Call Exercise Notice to Zyman.  Upon the occurrence of a termination of
employment described in this Section 10.4, Zyman shall no longer be
entitled to exercise the Five Year Put. 


 


(b)                                 Any Units which have not been
purchased pursuant to this Section 10.4 on or before the eighth
anniversary of the Effective Time shall become subject to the Eight Year Call.


 


Section 10.5   Call for
Zyman Units upon SZ Resignation On or Following the Fifth Anniversary of
Effective Time and Prior to the Eighth Anniversary of the Effective Time.


 


(a)                                  Notwithstanding the Call Periods
described in Section 10.2(a) above, in the event that SZ voluntarily
terminates his employment with the Company at any time on or following the
fifth anniversary of the Effective Time and prior to the eighth anniversary of
the Effective Time (including, without limitation, if SZ gives written notice
of his intention not to renew the term of SZ’s employment pursuant to the terms
of his employment agreement), then the Company shall have the right to Call all
or a portion of Zyman’s Units pursuant to and in accordance with the applicable
provisions of Section 10.10 and, to the extent that the Company has not
exercised the Call, MDC shall be entitled to Call any remaining Units; provided
that neither the Company nor MDC shall be entitled to Call any Units which
Zyman has not held for a period of at least six months.  Each of the Company and MDC may exercise the
Call by delivering a Call Exercise Notice to Zyman.


 


(b)                                 Any Units which have not been
purchased pursuant to this Section 10.5 on or before the eighth
anniversary of the Effective Time shall become subject to the Eight Year Call.


 


Section 10.6   Put and Call
for Management Unitholders’ Units upon Termination of Employment.  In the event that a Management Unitholder
shall no longer be an employee of the Company or any of its subsidiaries by
reason of such Management Unitholder’s death, Disability, a termination by the
Company without Cause or a termination by such Management Unitholder for Good
Reason, then: 


 


(a) such Management
Unitholder shall be entitled to Put any such Units to the Company at a price
per Unit equal to the FMV by delivering a Put Exercise Notice to the Company (“Manager Termination Put”); provided that
such Management Unitholder shall not be entitled to Put any Units which have
not been held by such Management Unitholder for a period of at least six
months.  The Company shall be entitled to
assign its obligation to purchase all or a portion of such Units to MDC; and 


 


(b) the Company
shall be entitled to Call (the “Manager
Termination Call”) all or a portion of such Management Unitholder’s
Units pursuant to and in accordance with the


 


28





















 


applicable
provisions of Section 10.10 and, to the extent that the Company has not
exercised the Manager Termination Call, MDC shall be entitled to Call any
remaining Units; provided that neither the Company nor MDC shall be entitled to
Call any Units which have not been held by such Management Unitholder for a
period of at least six months.  Each of
the Company and MDC may exercise the Manager Termination Call by delivering a
Call Exercise Notice to the Management Unitholder.


 


Section 10.7   Call for
Management Unitholders’ Units Upon Resignation of a Management Member;
Termination for Cause.  Notwithstanding the Call Periods described in
Section 10.2(a) above, in the event that a Management Unitholder
voluntarily terminates his employment with the Company (other than a
termination for Good Reason) or in the event that such Management Unitholder’s
employment is terminated by the Company for Cause at any time, then the Company
shall have the right to Call any or all of such Management Unitholder’s Units
pursuant to and in accordance with the applicable provisions of Section 10.10
and, to the extent that the Company has not exercised the Call, MDC shall be
entitled to Call any remaining Units; provided that neither the Company nor MDC
shall be entitled to Call any Units which have not been held by such Management
Unitholder for a period of at least six months. 
Each of the Company and MDC may exercise the Call by delivering a Call
Exercise Notice to the Management Unitholder.


 


Section 10.8  
Sale of Units by Zyman to
the Company.


 


(a)                                  The Company has established the
restricted Unit purchase plan set forth as Exhibit 10.8 (the “Plan”), pursuant to which it will
offer to sell up to 4,379,374 Units to employees of the Company, from time to
time.  Such Units shall be offered for
sale to such employees designated by the Chief Executive Officer of the Company
and approved by MDC from time to time (the “Employee Offerees”), in accordance with the
following schedule:  


 


(i)                                     2,360,000
Units will be offered to the Employee Offerees on or as soon as reasonably
practicable after the Closing Date (as defined in the Purchase Agreement) for a
period of 60 days; 


 


(ii)                                  1,000,000
Units plus any Units not sold pursuant to clause (i) above will be offered
to the Employee Offerees on or before the first anniversary of the Closing Date
for a period of 60 days;


 


(iii)                               1,000,000
Units plus any Units not sold pursuant to clauses (i) and (ii) above
will be offered to the Employee Offerees on or before the second anniversary of
the Closing Date for a period of 60 days; and


 


(iv)                              any
Units not purchased pursuant to clauses (i), (ii) and (iii) will be
offered to the Employee Offerees on or before the third anniversary of the
Closing Date for a period of 60 days; 


 


provided, that in the event
that SZ shall no longer be an employee of the Company or any of its
subsidiaries by reason of his death or Disability (as defined in SZ’s employment
agreement with the Company), the Company shall immediately offer to sell to the
applicable Employee Offerees any of the 4,379,374 Units which have not
previously been


 


29





















 


offered pursuant to this Section 10.8(a) and,
provided further, that Zyman shall be required to hold (and may not Put
pursuant to Section 10.3) a number of Units equal to such Units until the
60th day following the date of SZ’s death or the date on which SZ’s employment
is terminated due to Disability, as the case may be and shall be required to
hold until the closing of the purchase any Units subscribed for pursuant to the
offering.  


 


(b)                                 Such Units shall be offered to
the Employee Offerees pursuant to clause (a) for FMV (as determined based
on the most recent valuation prior to the date of each offer) and the
consideration in respect of such Units shall be in the form of cash and/or
notes payable by the Employee Offerees to the Company substantially in the form
of Exhibit 10.8
(each a “Purchase Note”) or, at the election of the
relevant Buyer (as defined below), cash.


 


(c)                                  In the event that all of the
4,379,374 Units have not been subscribed for by the Employee Offerees pursuant
to clause (a) by the 61st day after the date on which Units are
offered pursuant to clause (a)(iv) above and purchased by such Employee
Offerees within the time period set forth in Section 10.10(d) to the
extent such Units have been subscribed for, the Company shall create a plan
pursuant to which it shall offer to the Employee Offerees the option to
purchase any such unsold Units beginning no later than the 90th day
after the third anniversary of the Effective Time, which option may be
exercised on or before the fifth anniversary of the Effective Time (such period, the “Option Period”) at a price equal to the FMV
per Unit as of the date of such offer (such option, the “Employee Option”).  The consideration paid by an Employee Offeree
upon the exercise of such Employee Option shall be cash in an amount equal to
no less than $0.50 per purchased Unit (or
such lesser cash amount as determined by the Board of Managers, in its sole
discretion) and a Purchase Note for the remaining consideration.  Notwithstanding anything in this Agreement to
the contrary (including Sections 10.3 and 10.4), during the Option Period,
Zyman shall be required to hold a number of Units at least equal to the number
of Units subject to the Employee Option (as such number may be reduced from
time to time).


 


(d)                                 For each Unit sold by the
Company pursuant to this Section 10.8 Zyman shall sell and the Company
shall purchase or redeem one Unit from Zyman and in consideration therefor the
Company shall pay and assign to Zyman the cash and/or Purchase Notes paid to
the Company by any holder in respect of such Units; provided that the Company
shall not purchase or redeem any Units which have not been held by Zyman for a
period of at least six months.


 


Section 10.9   Binding
Obligations Upon Exercise of a Put, a Call or an Offer to Sell.  Upon the proper delivery of an Exercise
Notice in respect of the exercise of a Put by a Seller or a Call by a Buyer or
a notice of an Offer to Sell by the Management Unitholders or the Company, any
such Seller shall be obligated to sell the Units subject to the Call or the Offer
to Sell or which it has agreed to sell pursuant to a Put as set forth in the
applicable notice and any such Buyer shall be obligated to buy the Units
subject to the Put or which it has agreed to purchase pursuant to an Offer to
Sell or a Call as set forth in the applicable notice, in each case, in
accordance with the applicable provisions of Section 10.10.


 


30





















 


Section 10.10   Put/Call
Purchase Price. 


 


(a)                                  Calculation/Payment of the
Put/Call Purchase Price.


 


(i)  In connection with the exercise of
any Put pursuant to Section 10.2(b) or Section 10.3(a) or
any Call pursuant to Section 10.2(a), Section 10.3(a) or Section 10.5,
or Call of the Special Zyman Units pursuant to the Eight Year Call, each Buyer
shall calculate and pay to Zyman or the Management Unitholders, as applicable,
the following amounts (collectively, the “Put/Call
Purchase Price”):


 


(x)                                   within 5 Business Days following
the determination of PBT for YP-1, but in no event earlier than the Article X
Closing Date (as defined in Section 10.10(d) hereof), an amount (the “First Payment”) equal to:


 


	
  AP ×

  	
  {

  	
  (PBT for YP-1)

  	
  × 4.75

  	
  }

  
	
  3

  



 


(y)                                 within 5 Business Days following
the determination of PBT for YP,  but in
no event earlier than the Article X Closing Date), an amount (the “Second Payment”) equal to:


 


	
  {

  	
  AP ×

  	
  (((PBT for YP-1) +
  (PBT for YP)) × 4.75)

  	
  }

  	
  – {First Payment}

  
	
  3

  



 


(z)                                   within 5 Business Days following
the determination of PBT for YP+1, but in no event earlier than the Article X
Closing Date), an amount (the “Final Payment”)
equal to:


 


	
  {

  	
  AP ×

  	
  (

  	
  ((PBT for YP-1) +
  (PBT for YP)
 + (PBT for YP+1))

  	
  × AM

  	
  )

  	
  }

  	
   – {First Payment + Second
  Payment}

  
	
  3

  



 


(ii)                                  In
connection with the exercise of the Eight Year Call (except to the extent such
Eight Year Call relates to the Special Zyman Units to which clause (i) above
shall apply) and a Call pursuant to Section 10.4(a), the Buyer shall
calculate and pay to Zyman the product of 50% multiplied by the Put/Call
Purchase Price; provided that in connection with a Call pursuant to Section 10.4(a) because
SZ voluntarily terminates his employment with the Company, the price paid for
any Zyman Special Units shall be the Put/Call Purchase Price.


 


(iii)                               In
connection with the exercise of a Call pursuant to Section 10.7 or an
option pursuant to Section 10.8(c) or a Put pursuant to Section 10.6,
the Buyer shall pay to the applicable seller the product of the number of Units
being purchased and the FMV per Unit.


 


31





















 


(b)                                 Other Definitions.


 


(i)                                     “AM” shall mean the multiple based on applicable PBT Margin
and CRGR, as set forth below:


 


	
   

  	
   

  	
  Multiple Range

  	
   

  
	
  PBT Margin

  	
   

  	
  CRGR <=10%

  	
   

  	
  CRGR >=25%

  	
   

  
	
  < 30%

  	
   

  	
  4.0

  	
   

  	
  4.0

  	
   

  
	
  >= 30% &
  < 35%

  	
   

  	
  4.0

  	
   

  	
  4.5

  	
   

  
	
  >= 35% &
  < 40%

  	
   

  	
  4.5

  	
   

  	
  5.0

  	
   

  
	
  >= 40%

  	
   

  	
  5.0

  	
   

  	
  5.5

  	
   

  



 


To the extent that CRGR and/or PBT Margin are
within the ranges noted above, the applicable multiple shall be prorated
accordingly.


 


(ii)                                  “Applicable Percentage” or “AP”
shall mean the percentage that the Class B Units being sold and purchased
pursuant to a Put or Call represents out of the total number of issued and
outstanding Units, regardless of class.


 


(iii)                               “Cumulative Revenue Growth Rate” or “CRGR”
shall mean the cumulative annual percentage growth rate in Revenues for the
three-year period ending December 31 of YP+1 (based on the applicable Base
Revenues).  CRGR shall be calculated as
follows:


 


	
  CRGR =

  	
  [(

  	
  Revenues for YP + 1

  	
  )

  	
  1/3

  	
  – 1

  	
  ]

  	
  × 100%

  
	
  Base Revenues

  



 


For purposes
of calculating CRGR, the base revenues (“Base Revenues”)
shall be the Revenues for YP-2.


 


(iv)                              “FMV” shall mean, with respect to any Units,
the price that would be paid for such Units, assuming a willing seller and a
willing buyer, as determined in good faith by the Board of Managers of the
Company from time to time (and no less frequently than annually) with the
advice of an independent appraiser selected by the Board of Managers of the
Company. 


 


(v)                                 “Market Value” with respect to the First
Payment, Second Payment and Final Payment, as the case may be, shall be the
average of the closing prices per share of MDC Stock in United States dollars
reported on the NASDAQ Stock Market for the 20 consecutive trading days ending
three trading days immediately prior to the date the First Payment, Second
Payment, Final Payment, as the case may be, are required to be paid pursuant to
Sections 10.10(a)(i)(x), (y), and (z), respectively.  The closing price for each day shall be the
closing price on the NASDAQ Stock Market.


 


32





















 


(vi)                              “Measuring Period” shall mean, as
applicable, (x) the calendar year or years included in the applicable Put/Call
Purchase Price calculation under Section 10.10(a) above or (y) any
Distribution Period Calendar Year.


 


(vii)                           “PBT Margin” for the Measuring Period shall equal the
percentage equivalent of the quotient determined by dividing (a) the total
PBT for the Measuring Period, by (b) the total Revenues for the Measuring
Period.  For purposes of this Agreement,
the PBT Margin shall be rounded up or down, as the case may be, to the nearest
one-tenth of one percent.


 


(viii)                        “Revenues” during each relevant calendar year or other
period, as applicable, shall mean consolidated revenues of the Company and its
subsidiaries determined in accordance with GAAP, consistently applied with the
accounting principles and procedures historically utilized by the Company.  


 


(ix)                                “YP” shall mean the calendar year in which
the respective Put or Call was exercised by proper delivery of an Exercise
Notice. 


 


(x)                                   “YP+1” shall mean the calendar year
immediately following YP.


 


(xi)                                “YP+2” shall mean the calendar year
immediately following YP+1.


 


(xii)                             “YP-1” shall mean the calendar year
immediately preceding YP.


 


(xiii)                          “YP-2” shall mean the calendar year immediately preceding
YP-1. 


 


(c)                                  Accounting Procedures.


 


(i)                                     Upon
the exercise of (x) a Put pursuant to Section 10.2(b) or Section 10.3(a) or
(y) a Call pursuant to Section 10.2(a), Section 10.2(c), Section 10.4(a) or
Section 10.5(a) involving the sale of Units representing at least 2%
of the outstanding Units, MDC shall, and upon the exercise of any Put or Call
pursuant to any of the foregoing sections involving the sale of Units
representing less than 2% of the outstanding Units, MDC may at its option,
cause KPMG LLP, or another independent national accounting firm chosen by MDC
(the “Accountants”), as soon as
practicable after the end of years YP, YP+1 and YP+2, to prepare in accordance
with GAAP, a report containing an audited consolidated balance sheet of the
Company and its subsidiaries, if any, as of the close of business on the
anniversary of the Effective Time of each such period, and a related audited
consolidated statement of income of the Company and its subsidiaries, if any,
for the relevant year then ended, in each case together with a statement of the
Accountants based upon such report which (x) states that it was prepared in
accordance with this Agreement and (y) sets forth for the period under
examination the applicable calculation of PBT, Revenues, PBT Margin and AM, and
(z) sets forth all adjustments required to be made to such audited financial
statements in order to make the calculations required under this Section 10.10
(the “Annual Determination”).  MDC shall instruct the Accountants to deliver
a copy of each such Annual Determination to Zyman as soon as possible after the
completion of each year and shall use commercially


 


33





















 


reasonable
efforts to have each such Annual Determination delivered not later than 90 days
after the end of the period to which such Annual Determination relates. 


 


(ii)                                  If
Zyman does not agree that any Annual Determination correctly states the
applicable calculations of PBT, Revenues, PBT Margin or AM for the period under
examination, Zyman shall promptly (but not later than 30 days after the
delivery of such Annual Determination to Zyman) give written notice to MDC of
any exceptions thereto (in reasonable detail describing the nature of the
disagreement asserted).  If Zyman and MDC
reconcile their differences, the Annual Determination shall be adjusted
accordingly and shall thereupon become binding, final and conclusive upon all
of the parties hereto and enforceable in a court of law.  If Zyman and MDC are unable to reconcile
their differences in writing within 20 days after written notice of exceptions
is delivered to Zyman (the “Reconciliation Period”),
the items in dispute shall be submitted to a mutually acceptable accounting
firm (other than the Accountants) (the “Independent Auditors”)
for final determination, and the Annual Determination shall be deemed adjusted
in accordance with the determination of the Independent Auditors and shall
become binding, final and conclusive upon all of the parties hereto and
enforceable in a court of law.  The
Independent Auditors shall consider only the items in dispute and shall be
instructed to act within 20 days (or such longer period as Zyman and MDC may
agree) to resolve all items in dispute. 
If Zyman does not give written notice of any exception within 30 days
after the delivery of an Annual Determination or if Zyman gives written
notification of its acceptance of an Annual Determination prior to the end of
such 30 day period, such Annual Determination shall thereupon become binding,
final and conclusive upon all the parties hereto and enforceable in a court of
law.


 


(iii)                               In
the event the Independent Auditors are for any reason unable or unwilling to
perform the services required of it under this Section 10.10, then Zyman
and MDC agree to select another mutually acceptable accounting firm to perform
the services to be performed under this Section 10.10 by the Independent
Auditors.  If Zyman and MDC fail to
select the Independent Auditors as required by clause (i) above within
seven days after the expiration of the Reconciliation Period or fail to select
another accounting firm within seven days after it is determined that the
Independent Auditors will not perform the services required, either Zyman or
MDC may request the American Arbitration Association in Atlanta (the “AAA”) to appoint an independent firm of certified public
accountants to perform the services required under this Section 10.10 by
the Independent Auditors.  MDC, on the
one hand, and Zyman, on the other hand, shall share the fees of the AAA
equally.  For purposes of this Section 10.10(c) the
term “Independent Auditors” shall include
such other accounting firm chosen in accordance with this clause (iii).


 


(iv)                              The
Independent Auditors shall determine the party (i.e., Zyman or MDC) whose
asserted position as to the calculation of PBT, Revenues, PBT Margin, or AM for
the period under examination before the Independent Auditors is furthest from
the determination of PBT, Revenues, PBT Margin, or AM, as the case may be, by
the Independent Auditors, which non-prevailing party shall pay the fees and
expenses of the Independent Auditors and shall reimburse the prevailing party
for the portion of the fees of the AAA previously paid by it.


 


34





















 


(v)                                 The
books and records of the Company and its subsidiaries shall be made available
during normal business hours upon reasonable advance notice at the principal
office of the Company, to the parties hereto and their representatives, the
Accountants and the Independent Auditors to the extent required to determine
the calculations required under Section 10.10.  Zyman, on the one hand, and MDC, on the other
hand, shall make available to the other party and their representatives
(including auditors) any back-up materials generated by or for them to support
a position that is contrary to the position taken by the other party. 


 


(d)                                 Closing.  The closing for each purchase and sale of
Units (an “Article X Closing”)
pursuant to this Article X shall be held at the offices of the Company
within 30 days after the later of (i) the delivery of an Exercise Notice, (ii) in
the case of Offers to Sell, 30 days after the receipt of an acceptance of an
Offer to Sell and (iii) the day that is six months and one day after such
Units were first acquired by the Seller. 
The date on which the respective Article X Closing takes place is
referred to in this Agreement as its “Article X
Closing Date”.  At each Article X
Closing, the parties shall execute an Assignment of Unit Agreement in form and
substance reasonably acceptable to the purchaser and the seller in such
transaction and an amendment to this Agreement in accordance with Section 14.4
reflecting such transfer and the reallocated Units (including the related
portion of the Capital Account).  The
transfer of any Units pursuant to this Section 10.10 shall be free and
clear of all claims, liens and encumbrances other than as created by the
provisions of this Agreement.  Prior to
any Article X Closing, the applicable purchaser and seller shall use their
best efforts to obtain any required governmental or regulatory approval or
approvals.  MDC shall have the right to
postpone any scheduled Article X Closing until any such governmental or
regulatory approval is obtained.  In
connection with a sale pursuant to this Article X, the transferor shall be
entitled to distributions pursuant to Section 3.4 as and when declared by
the Board of Managers in respect of any amounts which have been allocated to
the transferred Units as of the day prior to the effective date of any Put or
Call or, in the case of an Offer to Sell, the applicable Article X Closing
Date, and the transferee shall be entitled to distributions pursuant to Section 3.4
in respect of any amounts which are allocated to the transferred Units on and
after the effective date or the Article X Closing Date, as the case may
be.


 


(e)                                  Put/Call Purchase Price Payment.  


 


(i) If MDC is purchasing Units from
Zyman pursuant to Section 10.2, Section 10.3, Section 10.4 or Section 10.5,
payment of each component of the Put/Call Purchase Price shall be made by MDC
(x) at least 80% in cash (any amount in excess of 80% will be determined by MDC
in its sole discretion) by direct wire transfer to the account of Zyman
designated in writing to MDC pursuant to this Agreement and (y) up to 20% of
each component of the Put/Call Purchase Price may be made in Class A
Shares (subordinate voting shares), of MDC Partners (“MDC Stock”) (rounded up or down to the
nearest whole share) having an aggregate Market Value (as defined above) equal
to up to 20% of such component of the Put/Call Purchase Price and, if the
Company is purchasing Units pursuant to Section 10.2, Section 10.3, Section 10.4
or Section 10.5, the purchase price shall be paid in cash.  Each of the First Payment, Second Payment and
Final Payment shall be deemed to include imputed interest, to the extent
required by the Code.  Prior to MDC’s
delivery to Zyman of each Put/Call Purchase Price payment in


 


35





















 


shares of MDC Stock, Zyman shall be required to deliver an Investment
Representation Certificate in the form of Exhibit 10.10(e) hereto.  The shares of MDC Stock shall be eligible for
sale in accordance the applicable securities laws of the U.S. and Canada, and
the terms of the Investment Representation Certificate to be delivered by the
receipt of such shares of MDC Stock. 


 


(ii)                                  Any
purchase of Units pursuant to Section 10.1 shall be made in cash; provided
that if the Seller is the obligor on any Purchase Note(s) at the time of sale,
the Buyer may elect to assume a portion of the amounts outstanding under any
such Purchase Note(s) (equal in proportion to the number of Units being
purchased by such Buyer relative to the number of Units owned by such Seller
immediately prior to the relevant Article X Closing) and the amount of
cash payable shall be reduced by the value of the portion of the Purchase
Note(s) assumed by such Buyer.


 


(iii)                               Any purchase of Units
pursuant to Section 10.6, Section 10.7 or Section 10.8 shall be
made in cash and/or Purchase Notes, or some combination thereof in accordance
with the terms set forth in such sections (to the extent provided); provided
that if the Seller is the obligor on any Purchase Note(s) at the time of sale,
the Buyer may elect to assume a portion of the amounts outstanding under any
such Purchase Note(s) (equal in proportion to the number of Units being
purchased by such Buyer relative to the number of Units owned by such Seller
immediately prior to the relevant Article X Closing) and the amount of
cash and/or Purchase Notes payable shall be reduced by the value of the portion
of the Purchase Note(s) assumed by such Buyer.


 


(f)                                    Effect of Events During Period Class B
Units Are Issued.  The parties hereto understand and agree that
under the terms of each Management Unitholder’s employment agreement with the
Company, if any, such Management Unitholder may be terminated for Cause or
without Cause.  Accordingly, each of the
parties hereto agrees that if (a) any Management Unitholder ceases to be
an employee of the Company, regardless of the reason therefor, or (b) there
are changes in the composition of the Board of Managers of the Company or any
subsidiary of the Company, no party to this Agreement or any Person deriving rights
through any such party shall have the right to make a claim that such cessation
of employment or change in the composition of the Board of Managers of the
Company or any subsidiary of the Company (x) constitutes a breach by MDC or any
of its Affiliates of this Agreement, (y) resulted in an adverse effect on any
Put/Call Purchase Price payment under this Agreement forming the basis for a
claim against MDC or any of its Affiliates, or (z) constitutes an event forming
the basis for such party to dispute any calculation required to be made
pursuant to the accounting procedures set forth in Section 10.10(c) hereof.  In the event a Management Unitholder ceases
to be employed by the Company, regardless of the reason therefor, such event
shall not affect the right of any Unitholder to receive any Put/Call Purchase
Price payment under this Agreement.


 


36





















 


ARTICLE XI


 


INDEMNIFICATION


 


Section 11.1   Indemnification
of Managers and Members.  The Company shall indemnify and advance
expenses to a Person who was or is threatened to be made a named defendant or
respondent in a proceeding because the individual is or was a Manager or Member
to the fullest extent permitted or authorized by the laws of the State of
Delaware as if the Company was a corporation organized under the laws of
Delaware.  This indemnification provision
shall inure to each of the Managers and Members of the Company, and other
Persons serving at the request of the Company (as provided in this Article), and
in the event of his death shall extend to his legal representatives; but such
rights shall not be exclusive of any other rights to which he may be entitled.


 


Section 11.2   Others.  The Company may indemnify and advance
expenses to an officer, employee or agent of the Company to the same extent
that it is required to indemnify and advance expenses to Managers or Members
under this Agreement or by statute.  The
Company may indemnify and advance expenses to Persons who are not or were not
officers, employees or agents of the Company but who are or were “serving at
the request of the Company” (as defined in Section 11.5(d)) as a director,
officer, partner, manager, member, venturer, proprietor, trustee, employee,
agent or similar functionary of another limited liability company, corporation,
partnership, employee benefit plan, or other enterprise or entity
(individually, an “Other Entity”)
to the same extent that the Company is required to indemnify and advance
expenses to Managers or Members under this Article or by statute.


 


Section 11.3   Insurance
and Other Arrangements.  The Company may purchase and maintain
insurance or establish and maintain another arrangement on behalf of any
individual who is or was a Manager, officer, employee, Member or agent of the
Company or who is or was serving at the request of the Company as a director,
officer, partner, manager, member, venturer, proprietor, trustee, employee,
agent or similar functionary of an Other Entity, against or in respect of any
liability asserted against him and incurred by him in such a capacity or
arising out of his status as such an individual, whether or not the Company
would have the power to indemnify him against that liability under this
Agreement or by statute.  If the
insurance or other arrangement is with a Person or entity that is not regularly
engaged in the business of providing insurance coverage, the insurance or other
arrangement may provide for payment of a liability with respect to which the
Company would not have the power to indemnify the Person only if including
coverage for the additional liability has been approved by the Members of the
Company.  Without limiting the power of
the Company to purchase, procure, establish or maintain any kind of insurance
or other arrangement, the Company may, for the benefit of persons indemnified
by the Company, (a) create a trust fund; (b) establish any form of
self-insurance; (c) secure its indemnity obligation by grant of a security
interest or other lien on the assets of the Company; or (d) establish a
letter of credit, guaranty or surety arrangement.  The insurance or other arrangement may be
purchased, procured, maintained or established within the Company or with any
insurer or other Person deemed appropriate by the Managers regardless of whether
all or part of the stock or other securities of the insurer or other Person are
owned in whole or part by the Company. 
In the absence of fraud, the judgment of the Managers as to the terms
and conditions of the insurance or other arrangement and the identity of the
insurer or 


 


37





















 


other Person participating in an arrangement shall be conclusive and
the insurance or arrangement shall not be voidable and shall not subject the
Managers approving the insurance or arrangement to liability, on any ground,
regardless of whether Managers participating in the approval are beneficiaries
of the insurance or arrangement. 


 


Section 11.4   Report to
Members. 
Any indemnification of or advance of expenses to a Manager or Member in
accordance with this Article or the provisions of any statute shall be
reported in writing to the Members with or before the notice or waiver of
notice of the next Members’ meeting or with or before the next submission to
the Members of a consent to action without a meeting and, in any case, within
the 12-month period immediately following the date of the indemnification
or advance.


 


Section 11.5   Definitions.  For purposes of this Article XI:


 


(a)                                  The term “expenses” includes court costs and attorneys’
fees and disbursements;


 


(b)                                 The term “proceeding” means any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, any appeal in such an action,
suit or proceeding, and any inquiry or investigation that could lead to such an
action, suit or proceeding;


 


(c)                                  The term “Manager” means any Person who is or was a
Manager of the Company and any Person who, while a Manager of the Company, is
or was serving at the request of the Company as a director, officer, partner,
manager, member, venturer, proprietor, trustee, employee, agent or similar
functionary of an Other Entity;


 


(d)                                 The term “serving at the request of the Company” as
used above shall include any service as a manager, director, officer, employee
or agent of the Company or where any such Person performs duties on or
otherwise involves services with respect to an employee benefit plan, or the
participants or beneficiaries of the employee benefit plan sponsored by the Company.  Excise taxes assessed on a Manager with
respect to an employee benefit plan pursuant to applicable law are deemed
fines.  Action taken or omitted to be
taken by a Manager with respect to an employee benefit plan in the performance
of his duties for a purpose reasonably believed by him to be in the interest of
the participants and beneficiaries of the plan is deemed to be for a purpose
which is not opposed to the best interests of the Company.


 


Section 11.6   Severability.  The provisions of this Article are
intended to comply with the Act.  To the
extent that any provision of this Article authorizes or requires
indemnification or the advancement of expenses contrary to such statute or the
Certificate, the Company’s power to indemnify or advance expenses under such
provision shall be limited to that permitted by such statute and the
Certificate and any limitation required by such statute or the Certificate
shall not affect the validity of any other provision of this Article XI.


 


Section 11.7   Nonexclusivity
of Rights. 
The right to indemnification and the advancement and payment of expenses
conferred in this Article XI shall not be exclusive of any other right
that a Manager or other Person indemnified pursuant hereto may have or hereafter


 


38





















 


acquire under any law (common or statutory), provision of the
Certificate or this Agreement or otherwise.


 


ARTICLE XII


 


ADDITIONAL
AGREEMENTS


 


Section 12.1   “Zyman” Name.  The Members hereby agree that (a) all
right, title and interest in the trade name “Zyman Group” or any variation
thereof belong to the Company and (b) so long as the Company is an
Affiliate of MDC Partners, the Company, the Members and SZ shall endeavor to
have any materials, documents or other items that reference the name “Zyman
Group” or any variations thereof to be followed by the words “an MDC Partners
Company”.


 


Section 12.2   2005 Option
Plan.  For
each Unit issued to a participant in the Company’s 2005 Unit Option Plan (the “Plan”) pursuant
to the exercise of any option granted under such plan, Zyman shall sell and the
Company shall purchase or redeem one Unit from Zyman and, in consideration
therefor, the Company shall pay and assign the consideration paid to the
Company by such participant upon the exercise of such option.  Zyman agrees that, until the expiration of
such options, Zyman will hold a number of Units equal to the number of Units
issued under the Plan and such Units shall not be subject to any of the Puts or
Calls hereunder.


 


ARTICLE XIII


 


OTHER
DEFINITIONS


 


Section 13.1   Other
Definitions. 
When used herein, the following terms shall have the following meanings:


 


“Additional Payment” shall
have the meaning given thereto in the Purchase Agreement.


 


“Adjusted Capital Account Deficit” with
respect to any Member means the deficit balance, if any, in such Member’s
Capital Account as of the end of the relevant fiscal year, after giving effect
to the following adjustments:


 


(i)                                     Credit
to such Capital Account any amounts which such Member is obligated to restore
pursuant to any provision of this Agreement or is otherwise treated as being
obligated to restore under Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or
is deemed to be obligated to restore pursuant to the penultimate sentence of
Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5);
and


 


(ii)                                  Debit
to such Capital Account the items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4),
(5), and (6).


 


The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.


 


39





















 


“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.


 


“Business Day” shall mean any day on
which commercial banks are not authorized or required to close in Atlanta,
Georgia and Toronto, Ontario.


 


“Buyer” shall mean the purchaser of
Units in any transaction described in Article X.


 


“Capital Contribution”
shall mean the contribution of a Member and any subsequent contributions of
capital made by that Member to the Company as set forth in Article III.


 


“Cause” means, with
respect to SZ, “Cause” as defined in SZ’s employment agreement with the Company
and, with respect to any other employee of the Company and its subsidiaries, “Cause”
means (A) such employee’s willful failure to perform his or her duties in
any material respect (other than as a result of total or partial incapacity due
to physical illness), (B) commission of (x) a felony (other than
traffic-related) under the laws of the United States or any state thereof or
any similar criminal act in a jurisdiction outside the United States or (y) a
crime involving moral turpitude, (C) such employee’s willful malfeasance
or willful misconduct which is injurious to the Company, (D) any act of
fraud by such employee or (E) such employee’s material breach of the
Company’s code of conduct.


 


“Class A Distribution Shortfall Amount”
with respect to any Distribution Period Calendar Year and any Post-Distribution
Period Calendar Year, shall mean the cumulative amount by which distributions
under Section 3.4(a)(i) to holders of Class A Units for all
preceding years since the Effective Time fell short of the cumulative
allocations to holders of Class A Units of PBT under Section 3.5(a)(i) for
such prior years (for this purpose treating any negative PBT for any calendar
year as $0).


 


“Class A  PBT Shortfall Amount” shall mean, with respect to any
calendar year other than the first Distribution Period Calendar Year, the
amount by which the actual allocation of PBT to holders of Class A Units
under Section 3.5(a)(i) for all previous Distribution Period Calendar
Year(s) is less than the aggregate Preferred Return Amount(s) with respect to
such Distribution Period Calendar Year(s).


 


“Class B Catch-Up Amount”
shall mean, with respect to any Distribution Period Calendar Year, the lesser
of (i) the difference between (A) the product of the amounts
allocated to the holders of Class A Units pursuant to Section 3.5(a)(i) for
the current and all previous Distribution Period Calendar Year(s) and the
fraction (expressed as a percentage) in which the numerator is the number of
outstanding Class B Units and the denominator is the number of outstanding
Class A Units and (B) the amounts allocated to the holders of Class B
Units pursuant to Section 3.5(a)(ii) for all previous Distribution
Period Calendar Year(s) and (ii) the positive difference (if any) of PBT
for such Distribution Period Calendar Year less the Preferred Return Amount and
less the Class A PBT Shortfall Amount, if any.


 


“Class B Distribution Shortfall Amount”
with respect to any Distribution Period Calendar Year and any Post-Distribution
Period Calendar Year, shall mean the cumulative amount by which distributions
under Section 3.4(a)(ii) to holders of Class B Units for all
preceding calendar years since the Effective Time fell short of the cumulative
allocations to


 


40





















 


holders of Class B Units of PBT under Section 3.5(a)(ii) for
such prior years (for this purpose treating any negative PBT for any calendar
year as $0). 


 


“Code” shall mean the Internal Revenue
Code of 1986, as amended from time to time, and any successor statute or
statutes.


 


“Company Credit Facility”
shall mean the revolving credit facility dated as of November 8, 2005 by
and between the Company and Wachovia Bank, National Association, as amended,
modified or supplemented from time to time.


 


“Company Minimum Gain” shall have the
meaning for “Partnership Minimum Gain”
set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the
Treasury Regulations.


 


“Depreciation” shall mean for each
fiscal year, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such fiscal year,
except that if the Gross Asset Value of an asset differs from its adjusted
basis for Federal income tax purposes at the beginning of such fiscal year,
Depreciation shall be an amount which bears the same ratio to such beginning
Gross Asset Value as the Federal income tax depreciation, amortization, or
other cost recovery deduction for such fiscal year bears to such beginning
adjusted tax basis; provided, however, that if the adjusted basis for Federal
income tax purposes of an asset at the beginning of such fiscal year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the TMP.  


 


“Disability” means, with
respect to SZ, “Disability” as defined in SZ’s employment agreement with the
Company and, with respect to any other employee of the Company and its
subsidiaries, “Disability” means the inability of an employee to perform the
essential functions of the employee’s job, with or without reasonable
accommodation, by reason of a physical or mental infirmity, for a continuous
period of six months or for an aggregate of nine months in a twenty-four month
period.


 


“Distribution Period”
shall mean the period from the Effective Time until the earlier of the
termination of the Company or the date that is the fifth anniversary of the
Effective Time.


 


“Distribution Period Calendar Year”
shall mean any of (i) the period from the Effective Time until December 31,
2005, (ii) the period from January 1st through December 31st
of each of 2006, 2007, 2008 and 2009 and (iii) the period from January 1,
2010 until the date that is the fifth anniversary of the Effective Time;
provided that if the Company is terminated prior to the fifth anniversary of
the Effective Time, the last calendar year shall be the period from January 1st
of the year in which the Company is terminated until that date on which the
Company is terminated.


 


“Effective Time” shall mean the date of
the closing of the Purchase Transaction.


 


“Good Reason” shall mean,
with respect to SZ, “Good Reason” as defined in SZ’s employment agreement with
the Company and, with respect to any other employee of the Company and its
subsidiaries, “Good Reason” means a failure by the Company to pay such


 


41





















 


employee’s compensation when due, which
failure remains uncured for a period of 20 days after written notice of such
breach from the employee to the Company.


 


“Gross Asset Value”, with respect to any
asset, the asset’s adjusted basis for Federal income tax purposes, except as
follows:


 


(i)                                     Subject
to the final sentence of this definition and consistent with the capital
accounts as described in Section 3.1, the initial Gross Asset Value of any
asset contributed by a Member to the Company shall be the gross fair market
value of such asset, as determined by the Board of Managers;


 


(ii)                                  The
Gross Asset Value of all Company assets shall be adjusted to equal their
respective gross fair market values as of the following times: (a) the
acquisition of additional Units by any new or existing Member in exchange for a
Capital Contribution; (b) the distribution by the Company to a Member of
property as consideration for a Unit; and (c) the liquidation of the
Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g);
provided, however, that adjustments pursuant to clauses (a) and (b) above
shall be made only if the Managers reasonably determine that such adjustments
are necessary or appropriate to reflect the relative economic interests of the
Members in the Company; and


 


(iii)                               The
Gross Asset Value of any Company asset distributed to any Member shall be
adjusted to equal the gross fair market value of such asset on the date of
distribution.


 


If the Gross Asset Value of an asset has been determined or adjusted
pursuant to clauses (i) or (ii), hereof, such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.


 


“MDC Credit Facility”
shall mean the Credit
Agreement, dated as of September 22,
2004, among MDC Partners, Maxxcom Inc., an Ontario corporation, Maxxcom Inc., a
Delaware corporation, the lending institutions identified in the Credit
Agreement, JPMorgan Chase Bank, Toronto Branch, as Canadian Administrative
Agent and JPMorgan Chase Bank as Administrative Agent and as Collateral Agent.


 


“Member Nonrecourse Debt” shall have the
meaning for “Partner Nonrecourse Debt”
set forth in Section 1.704-2(b)(4) of the Treasury Regulations.


 


“Member Nonrecourse Debt Minimum Gain”
shall mean an amount, with respect to each Member Nonrecourse Debt, equal to
the Company Minimum Gain that would result if such Member Nonrecourse Debt were
treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of
the Treasury Regulations.


 


“Member Nonrecourse Deductions” shall
have the meaning set forth in Section 1.704-2(i)(2) of the
Treasury Regulations.


 


42





















 


“Membership Interest” of any Member
shall mean such Member’s interest in the Company under this Agreement (including,
without limitation, such Member’s interest in Profits and Losses,
distributions, voting, and management, all as specified in this Agreement).


 


“Nonrecourse Deductions” shall have the
meaning set forth in Section 1.704-2(b)(1) of the Treasury
Regulations.


 


“Nonrecourse Liability” shall have the
meaning set forth in Section 1.704-2(b)(3) of the Treasury
Regulations.


 


“Offer to Sell” shall mean
an offer to sell Units pursuant to Section 10.1 or Section 10.8.


 


“Original Unitholders”
shall mean, those Members who owned Membership Units immediately prior to the
consummation of the transactions contemplated by the Purchase Agreement.


 


“PBT” for any
relevant period shall mean the consolidated net income (loss) of the Company
and its subsidiaries but before provision for all federal, state and local
income taxes for such period, determined in accordance with United States
generally accepted accounting principles consistently applied (“GAAP”); provided, that the following
amounts shall be excluded:


 


(1)                                  any
expenses for non-cash equity-based compensation which accrues prior to, on or
after Closing and is attributable to transactions contemplated by the Purchase
Agreement.


 


(2)                                  any
amortization or depreciation expense attributable to the increase in the book
value of any assets (whether tangible or intangible) of the Company resulting
from the merger into the Company of the Nevada limited liability company
predecessor of the Company, any amortization or depreciation expense
attributable to the increase in the book value of any assets (whether tangible
or intangible) of the Company resulting from any acquisition of any Units by
MDC pursuant to the Purchase Agreement, and interest payable by or for the
Company on indebtedness related to any such acquisition;


 


(3)                                  neither
the proceeds from nor any dividends or refunds with respect to, nor any
increases in the cash surrender value of, any life insurance policy under which
the Company, or any subsidiary thereof, is the named beneficiary or otherwise
entitled to recovery shall be included as income, nor shall the premiums
payable with respect to any such life insurance policy be considered an expense
for a period to the extent a death covered by such life insurance policy occurs
in any such period;


 


(4)                                  any
intercompany management fees and overhead allocations charged by MDC or any
Affiliate of MDC, to the Company or any of its subsidiaries;


 


(5)                                  any
interest arising from loans to finance the payment of any of the Purchase Price
payments and from any indebtedness allocated to the Company by MDC as a result
of MDC’s acquisition of Membership Interests of the Company; provided, however,
that any interest or fees (other than fees incurred in connection with
terminating the Company Credit


 


43





















 


Facility)
arising under the Company Credit Facility (or any interest or fees allocable to
the Company under the MDC Credit Facility, if such facility is used to
refinance the Company Credit Facility) and any working capital loans provided
by MDC to the Company from time to time shall be included in determining PBT; 


 


(6)                                  any
interest charges incurred by the Company or any subsidiary resulting from any
MDC Financing (as defined in the Purchase Agreement); 


 


and, solely for the purposes of calculating any Puts or Calls or Offers
to Sell exercised by Zyman,


 


(7)                                  any
extraordinary or unusual gains or losses and any gains or losses from the sale
of any capital assets used by the Company or any subsidiary thereof in its
operations (as opposed to assets acquired in the ordinary course of the
business of the Company and its subsidiaries for resale or other disposition);


 


(8)                                  severance
expense arising from a termination of SZ by the Company or by SZ with Good
Reason; and


 


(9)                                  premiums
of up to $75,000 payable with respect to any life insurance policy under which
the Company, or any subsidiary thereof, is the named beneficiary or otherwise
entitled to recovery to the extent not already excluded pursuant to (3) above.


 


“Person” shall mean an individual,
partnership, limited partnership, limited liability company, trust, estate,
corporation, custodian, trustee, executor, administrator, nominee or entity in
a representative capacity.


 


“Post Distribution Period Calendar
Year” shall mean (i) the period from the fifth anniversary of
the Effective Time until December 31, 2010 and (ii) thereafter, each
calendar year ending December 31; provided that if the Company is
terminated prior to December 31 in any calendar year, the last calendar
year shall be the period from January 1 of the year in which the Company
is terminated until the date on which the Company is terminated.


 


“Preferred Return Amount”
shall mean, with respect to any Distribution Period Calendar Year, the sum of (i) $13,000,000
(provided, that with respect to the first and last Distribution Period Calendar
Years, the amount in this clause (i) shall be equal to the product of
$13,000,000 and the fraction (expressed as a percentage) in which the numerator
is the number of days elapsed in such Distribution Period Calendar Year and the
denominator is 365) and (ii) in the event that an Additional Payment (as
defined in Section 13.1) is made, from the date on which such Additional
Payment is made, an amount equal to the product of 20% multiplied by the amount
of such Additional Payment (the “Additional
Payment Amount”) (provided, that with respect to the first and last
Distribution Period Calendar Years, the amount in this clause (ii) shall
be equal to the product of the Additional Payment Amount and the fraction (expressed
as a percentage) in which the numerator is the number of days elapsed in such
Distribution Period Calendar Year and the denominator is 365).


 


“Profits and Losses”, shall mean, for
each fiscal year, an amount equal to the Company’s taxable income or loss for
such fiscal year, determined in accordance with


 


44





















 


Section 703(a) of the Code (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be
included in taxable income or loss), with the following adjustments:


 


(i)                                     Any
income of the Company that is exempt from Federal income tax and not otherwise
taken into account in computing Profits or Losses pursuant to this definition
shall be added to such taxable income or loss;


 


(ii)                                  Any
expenditures of the Company described in Section 705(a)(2)(B) of the
Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations, and
not otherwise taken into account in computing Profits or Losses pursuant to
this definition, shall be subtracted from such taxable income or loss;


 


(iii)                               In
the event the Gross Asset Value of any Company asset is adjusted pursuant to
clauses (ii) or (iii) of the definition of “Gross Asset Value”
herein, the amount of such adjustment shall be taken into account as gain or
loss from the disposition of such asset for purposes of computing Profits or
Losses;


 


(iv)                              Gain
or loss resulting from any disposition of property with respect to which gain
or loss is recognized for Federal income tax purposes shall be computed by
reference to the Gross Asset Value of the property disposed of, notwithstanding
that the adjusted tax basis of such property differs from its Gross Asset
Value;


 


(v)                                 In
lieu of the depreciation, amortization, and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be
taken into account depreciation for such fiscal year or other period, computed
in accordance with the definition thereof;


 


(vi)                              To
the extent an adjustment to the adjusted tax basis of any Company asset
pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to
be taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Member’s Units, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of the asset and shall be taken into account for
the purposes of computing Profits or Losses; and


 


(vii)                           Notwithstanding
any other provisions of this definition, any items which are specially
allocated pursuant to Section 3.3(b) and (c) shall not be taken
into account in computing Profits or Losses.


 


“Pro Rata Portion” shall
mean, with respect to any Management Unitholder at any given time, the number
of Units held by such Management Unitholder relative to the number of Units
held by all of the Management Unitholders.


 


“Seller” shall mean the seller of Units
in any transaction described in Article X.


 


45





















 


“Treasury Regulations” shall mean final
regulations issued by the Department of the Treasury interpreting the Code.


 


“Units” shall mean Class A Units or
Class B Units, as applicable.


 


ARTICLE XIV


 


MISCELLANEOUS


 


Section 14.1   Manner of
Giving Notice. 
Whenever under the provisions of the Act, the Certificate or this
Agreement, notice is required to be given to the Company, any Member or Manager
of the Company, and no provision is made as to how such notice shall be given,
any such notice to be given hereunder 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 facsimile transmission
(if transmission is electronically confirmed) or by a prepaid overnight courier
service, and in each case at the respective addresses or numbers set forth
below or such other address or number as such party may have fixed by notice:


 


If to MDC or MDC Partners, to:


 


MDC Partners

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:  Graham Rosenberg

Fax:  (416) 960-9555


Attention:
Mitch Gendel


Fax:  (212) 463-3274


 


with a copy to:


 


Simpson
Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Marni Lerner, Esq. 

Fax:  (212) 455-2502


 


If to Zyman, to:


 


Zyman Company, Inc.

100 South Point Drive


Apartment
2905/06


Miami Beach,
Florida 33139-7373


Attention:
Sergio Zyman

Fax: (305) 674-3806


 


46





















 


with a copy to:


 


Zyman Group
LLC


950 East Paces
Ferry Road, N.E.


Suite 3300


Atlanta,
Georgia 30326

Attention: Chief Financial Officer

Fax:


 


with a copy to:


 


Jones Day


1420 Peachtree
Street, N.E.


Suite 800


Atlanta,
Georgia 30309-3053

Attention: Milford B. Hatcher

Fax:  (404) 581-8330


 


If to the Company, to:


 


c/o MDC
Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:  Graham Rosenberg

Fax:  (416) 960-9555


Attention:
Mitch Gendel


Fax:  (212) 463-3274


 


with a copy to:


 


Simpson
Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Marni Lerner, Esq. 

Fax: (212) 455-2502


 


If to any Management Unitholder, to such person at the address set
forth on the signature pages hereto.


 


or to such other address or fax as hereafter shall be designated in
writing by the applicable party sent in accordance herewith or in the records
of the Company.


 


Section 14.2   Waiver of
Notice. 
Whenever any notice is required to be given to any Member or Manager of
the Company under the provisions of the Act, the Certificate or this Agreement,
a waiver thereof in writing signed by the Person or Persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.


 


47





















 


Section 14.3   No Company
Seal.  The
Company shall not have a Company seal, and no agreement, instrument or other
document executed on behalf of the Company that would otherwise be valid and
binding on the Company shall be invalid or not binding on the Company solely
because no Company seal is affixed thereto.


 


Section 14.4   Amendment or
Modification. 
The power to adopt, alter, amend or repeal this Agreement is vested
solely in the Members. Except for the amendments contemplated by Sections 2.1, Section 2.3,
and Section 2.4 hereof and subject to the provisions of Section 4.1,
this Agreement may be altered or amended only by the vote or written consent of
MDC and holders of a majority of the outstanding Class B Units; provided
that, in the event that an amendment does not affect the interests of any
holder of Class B Units other than Zyman, then such amendment may only be
effected with the vote or written consent of MDC and Zyman (it being understood
that the consent of any other holders of Class B Units shall not be
required to effect such amendment).


 


Section 14.5   Binding
Effect; Assignment.  Subject to the restrictions on transfer and
assignment set forth in Article X of this Agreement, this Agreement is
binding on and inures to the benefit of the Members and their respective
successors and assigns, including without limitation, any Lender who exercises
a default remedy under any agreement entered into in connection with an MDC
Financing.  Except as expressly provided
herein, none of the Company, Zyman nor any Management Unitholder shall be
entitled to assign any of its rights or obligations under this Agreement.  Except as expressly provided herein, the
rights and obligations of MDC under this Agreement shall be freely assignable;
provided that, except in connection with a transfer by MDC of its Units (in
which case MDC shall have no further obligations hereunder), MDC shall continue
to remain liable for any of its obligations under this Agreement in the event
that MDC assigns its rights hereunder.


 


Section 14.6   Governing
Law; Severability. 
This Agreement is governed by and shall be construed in accordance with
the law of the State of Delaware without regard to the principles of conflict
of laws thereof.  In the event of a
direct conflict between the provisions of this Agreement and any provision in
the Certificate or any mandatory provision of the Act, the applicable
provisions of the Certificate or the Act shall control.  If any provision of this Agreement or the
application thereof to any Person or circumstance is held invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of that provision to other Persons or circumstances is not affected
thereby and that provision shall be enforced to the greatest extent permitted
by law.


 


Section 14.7   Counterparts.  This Agreement may be executed by the parties
hereto in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement.


 


Section 14.8   Entire
Agreement. 
This Agreement, including the other documents referred to herein and the
Exhibits and Schedules hereto that form a part hereof, contains the entire
understanding of the parties hereto with respect to the subject matter
contained herein and therein.  This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter, including without limitation, the
Original Operating Agreement.


 


48





















 


IN WITNESS WHEREOF,
the undersigned have executed this Amended and Restated Limited Liability
Company Agreement as of the day and year first above written.


 


 


	
   

  	
  MDC PARTNERS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  GRAHAM ROSENBERG

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Graham Rosenberg

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  MITCHELL GENDEL

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitchell
  Gendel

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ZG ACQUISITION INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  GRAHAM ROSENBERG

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Graham
  Rosenberg

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  MITCHELL GENDEL

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitchell
  Gendel

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ZYMAN COMPANY INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  SERGIO ZYMAN

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Sergio Zyman

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ZYMAN GROUP LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  SERGIO ZYMAN

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Sergio Zyman

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Ricardo
  Alvarez

  	
   

  
	
   

  	
  Printed Name:

  	
  Ricardo
  Alvarez

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Arthur
  Ash

  	
   

  
	
   

  	
  Printed Name:

  	
  Arthur Ash

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Craig
  Lee Binkley

  	
   

  
	
   

  	
  Printed Name:

  	
  Craig Lee
  Binkley

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Jeffrey
  M. Herbert

  	
   

  
	
   

  	
  Printed Name:

  	
  Jeffrey M.
  Herbert

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Patricia
  L. Klingbiel

  	
   

  
	
   

  	
  Printed Name:

  	
  Patricia L.
  Klingbiel

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Michael
  F. McEnany

  	
   

  
	
   

  	
  Printed Name:

  	
  Michael F.
  McEnany

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Ted
  Richardson

  	
   

  
	
   

  	
  Printed Name:

  	
  Ted
  Richardson

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Michael
  J. Sinclair

  	
   

  
	
   

  	
  Printed Name:

  	
  Michael J.
  Sinclair

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ David A.
  Singleton

  	
   

  
	
   

  	
  Printed Name:

  	
  David A.
  Singleton

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Jon
  Stewart

  	
   

  
	
   

  	
  Printed Name:

  	
  Jon Stewart

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 





















 


[Signature page to Amended and Restated Limited Liability Company
Agreement of Zyman Group, LLC]


 


	
   

  	
  MANAGEMENT
  UNITHOLDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ N. Lee
  White

  	
   

  
	
   

  	
  Printed Name:

  	
  N. Lee White

  
	
   

  	
  Address: