Document:

The
      security represented by this certificate was originally issued on May 2, 2007,
      and has not been registered under the Securities Act of 1933, as amended. The
      transfer of such security is subject to the conditions specified herein, and
      the
      Company reserves the right to refuse the transfer of such security until such
      conditions have been fulfilled with respect to such transfer. Upon written
      request, a copy of such conditions shall be furnished by the Company to the
      holder hereof without charge.

     

    NEXCEN
      BRANDS, INC.

     

    STOCK
      PURCHASE WARRANT

     

    
      	
              Date
                of Issuance: May 2, 2007 

            	
              Certificate
                No. W-00000175

            
	 	 

    

     

    FOR
      VALUE
      RECEIVED, NexCen Brands, Inc., a Delaware corporation (the “Company”),
      hereby grants to Ellery
      Homestyles, LLC
      or its
      registered assigns (the “Holder”)
      the
      right to purchase from the Company 50,000 shares of the Company’s Common Stock
(the
      “Warrant
      Shares”)
      at
      a
      price per share of $12.43 (as adjusted from time to time in accordance herewith,
      the “Exercise
      Price”).
      Certain capitalized terms used herein are defined in Section
      5
      hereof.
      The amount and kind of securities obtainable pursuant to the rights granted
      hereunder and the purchase price for such securities are subject to adjustment
      pursuant to the provisions contained in this Warrant.

     

    1. Exercise
      of Warrant.

     

    1.1. Exercise
      Period.
      The
      Holder may exercise, in whole or in part the purchase rights represented by
      this
      Warrant at any time and from time to time after the Date of Issuance to and
      including May 2, 2017 (the “Exercise
      Period”).

     

    1.2.
      Exercise.
      

     

    (a) The
      Warrant may be exercised in full by the Holder hereof by delivery of an original
      or facsimile copy of the form of subscription attached as Exhibit A hereto
      (the
“Subscription
      Form”)
      duly
      executed by such Holder and surrender of the original Warrant within four (4)
      days of exercise, to the Company at its principal office, accompanied by
      payment, in cash, wire transfer of immediately available funds or by certified
      or official bank check payable to the order of the Company, in the amount
      obtained by multiplying the number of shares of Common Stock for which this
      Warrant is then exercisable by the Exercise Price then in effect.

     

    (b) This
      Warrant shall be deemed to have been exercised and such certificate or
      certificates shall be deemed to have been issued, and the Holder or any other
      person so designated to be named therein shall be deemed to have become the
      Holder of record of such shares for all purposes, as of the date the Warrant
      has
      been exercised by payment to the Company of the Exercise Price and all taxes
      required to be paid by the Holder, if any, prior to the issuance of such shares,
      have been paid, notwithstanding that the stock transfer books of the Company
      shall then be closed or that certificates representing such Warrant Shares
      shall
      not then be physically delivered to the Holder. No deduction shall be made
      from
      the amount paid by the Holder for any commissions, discounts or other expenses
      incurred by the Company for any underwriting of the issue or otherwise in
      connection therewith

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) The
      Company shall pay all documentary stamp taxes attributable to the issuance
      of
      Warrant Shares underlying this Warrant upon the exercise as provided herein;
      provided, however, that the Company shall not be required to pay any tax which
      may be payable in respect of any transfer involved in the registration of any
      certificate for Warrant Shares underlying this Warrant in a name other that
      of
      the Holder. The Holder is responsible for all other tax liability that may
      arise
      as a result of holding or transferring this Warrant or receiving shares of
      Common Stock underlying this Warrant upon exercise hereof.

     

    1.3. Partial
      Exercise.
      The
      Warrant may be exercised in part (but not for a fractional share) by surrender
      of this Warrant in the manner and at the place provided in subsection 1.2 except
      that the amount payable by the Holder on such partial exercise shall be the
      amount obtained by multiplying (a) the number of whole Warrant Shares designated
      by the Holder in the Subscription Form by (b) the Exercise Price then in effect.
      On any such partial exercise, the Company, at its expense, will forthwith issue
      and deliver to or on the order of the Holder hereof a new Warrant of like tenor,
      in the name of the Holder hereof or as such Holder (upon payment by such Holder
      of any applicable transfer taxes) may request, the whole number of Warrant
      Shares for which such Warrant may still be exercised.

     

    1.4. Fair
      Market Value.
“Fair
      Market Value” of a Warrant Share as of a particular date (the “Determination
      Date”)
      shall
      mean:

     

    (a) If
      the
      Company’s Common Stock is traded on an exchange, then the closing or last sale
      price, respectively, reported for the last Business Day immediately preceding
      the Determination Date;

     

    (b) If
      the
      Company’s Common Stock is not traded on an exchange as set forth in clause (a)
      above, but is traded on the over-the-counter market, then the average of the
      closing bid and ask prices reported for the last Business Day immediately
      preceding the Determination Date;

     

    (c) Except
      as
      provided in clause (d) below, if the Company’s Common Stock is not publicly
      traded, then as the Holder and the Company agree, or in the absence of such
      an
      agreement, by arbitration in accordance with the rules then in effect of the
      American Arbitration Association, before a single arbitrator to be chosen
      mutually by the Holder and the Company from a panel of persons qualified by
      education and training to pass on the matter to be decided; or

     

    (d) If
      the
      Determination Date is the date of a liquidation, dissolution or winding up,
      or
      any event deemed to be a liquidation, dissolution or winding up pursuant to
      the
      Company’s charter, then all amounts to be payable per share to holders of the
      Common Stock pursuant to the charter in the event of such liquidation,
      dissolution or winding up, plus all other amounts to be payable per share in
      respect of the Common Stock in liquidation under the charter, assuming for
      the
      purposes of this clause (d) that all of the Warrant Shares then issuable upon
      exercise of all of the Warrants are outstanding at the Determination
      Date.

     

    1.5 Delivery
      of Stock Certificates, etc. on Exercise.
      The
      Company agrees that the Warrant Shares purchased upon exercise of this Warrant
      shall be deemed to be issued to the Holder hereof as the record owner of such
      shares as of the close of business on the date on which this Warrant shall
      have
      been surrendered and payment made for such shares as aforesaid. As soon as
      practicable after the exercise of the Warrant in full or in part, and in any
      event within ten (10) Business
      Days
      thereafter, the Company at its expense (including the payment by it of any
      applicable issue taxes) will cause to be issued in the name of and delivered
      to
      the Holder hereof, or as such Holder (upon payment by such Holder of any
      applicable transfer taxes) may direct in compliance with applicable securities
      laws, a certificate or certificates for the number of duly and validly issued,
      fully paid and nonassessable Warrant Shares (or Other Securities) to which
      such
      Holder shall be entitled on such exercise, plus, in lieu of any fractional
      share
      to which such Holder would otherwise be entitled, cash equal to such fraction
      multiplied by the then Fair Market Value of one full Warrant Share, together
      with any other stock or other securities and property (including cash, where
      applicable) to which such Holder is entitled upon such exercise pursuant to
      Section 1 or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.6 Cashless
      Exercise.
      The
      Warrant may also be exercised in whole or in part by means of a “cashless
      exercise” by tendering this Warrant to the Company to receive a number of
      Warrant Shares equal in Fair Market Value to the difference between the Fair
      Market Value of the Warrant Shares issuable upon such exercise of the Warrant
      and the total cash Exercise Price of that part of the Warrant being exercised.
      Certificates for shares purchased hereunder shall be delivered to the Holder
      hereof within ten (10) Business Days after the date on which this Warrant shall
      have been exercised as aforesaid. 

     

    2. Adjustment
      of Exercise Price and Number of Warrant Shares.
      The
      Exercise Price in effect and the number and kind of securities purchasable
      upon
      the exercise of this Warrant shall be subject to adjustment from time to time
      upon the happening of certain events as provided in this Section 2.

     

    2.1. Reorganization,
      Consolidation, Merger, etc.
      In case
      at any time or from time to time, the Company shall (a) effect a reorganization,
      (b) consolidate with or merge into any other person or (c) transfer all or
      substantially all of its properties or assets to any other person under any
      plan
      or arrangement contemplating the dissolution of the Company, then, in each
      such
      case, as a condition to the consummation of such a transaction, proper and
      adequate provision shall be made by the Company whereby the Holder of this
      Warrant, on the exercise hereof as provided in Section 1, at any time after
      the
      consummation of such reorganization, consolidation or merger or the effective
      date of such dissolution, as the case may be, shall receive, in lieu of the
      Warrant Shares (or Other Securities) issuable on such exercise prior to such
      consummation or such effective date, the stock and other securities and property
      (including cash) to which such Holder would have been entitled upon such
      consummation or in connection with such dissolution, as the case may be, if
      such
      Holder had so exercised this Warrant, immediately prior thereto, all subject
      to
      further adjustment thereafter as provided in this Section 2.

     

    2.2 Dividends,
      Splits, Reclassifications Etc.
      In
      the
event
      of
      changes in the outstanding Common Stock of the Company by reason of share
dividends,
      splits, recapitalizations, reclassifications, combinations or exchanges of
      shares, reorganizations,
      liquidations, or the like, the number and class of the Warrant Shares available
      under the
      Warrant in the aggregate and the Exercise Price shall be correspondingly
      adjusted to give the Holder
      of
      the Warrant, on exercise for the same aggregate Exercise Price, the total
      number, class, and
      kind
      of shares as
      the
      Holder would have owned had the Warrant been exercised prior to the event
      and
      had the Holder continued to hold such shares until after the event requiring
      adjustment. The
      form
      of this Warrant need not be changed because of any adjustment in the number
      of
the
      Warrant Shares subject to this Warrant.

     

    2.3. Continuation
      of Terms.
      Upon
      any reorganization, consolidation, merger or transfer referred to in this
      Section 2, this Warrant shall continue in full force and effect and the terms
      hereof shall be applicable to the Other Securities and property receivable
      on
      the exercise of this Warrant after the consummation of such reorganization,
      consolidation or merger, as the case may be, and shall be binding upon the
      issuer of any Other Securities, including, in the case of any such transfer,
      the
      person acquiring all or substantially all of the properties or assets of the
      Company, whether or not such person shall have expressly assumed the terms
      of
      this Warrant as provided herein. In the event this Warrant does not continue
      in
      full force and effect after the consummation of the transaction described in
      this Section 2, then the Holder of the Warrants shall be entitled to exercise
      this Warrant at such time pursuant to Sections 1.2, 1.3 or 1.6.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Certificate
      as to Adjustments.
      In each
      case of any adjustment or readjustment in the Warrant Shares (or Other
      Securities) issuable on the exercise of the Warrants, the Company will cause
      its
      Chief Financial Officer or other appropriate designee to compute such adjustment
      or readjustment in accordance with the terms of the Warrant and prepare a
      certificate setting forth such adjustment or readjustment and showing in detail
      the facts upon which such adjustment or readjustment is based, including the
      number of Warrant Shares to be received upon exercise of this Warrant, in effect
      immediately prior to such adjustment or readjustment and as adjusted or
      readjusted as provided in this Warrant. The Company will mail a copy of each
      such certificate to the Holder of the Warrant and
      to
      the Company’s stock transfer agent, if any.

     

    4. Reservation
      of Stock, etc. Issuable on Exercise of Warrant.
      The
      Company will at all times reserve and keep available, solely for issuance and
      delivery on the exercise of the Warrants, a sufficient number of shares of
      Common Stock (or Other Securities) from time to time issuable on the exercise
      of
      the Warrant.

     

    5. Definitions.
      As used
      herein, capitalized terms, in addition to the terms defined elsewhere herein
      and
      unless the context otherwise requires, have the following respective
      meanings:

     

    (a) “Business
      Day”
means
      a
      day other than a Saturday, Sunday or other day on which commercial banks in
      the
      State of New York are authorized or required by law to close.

     

    (b) “Company”
means
      NexCen Brands, Inc. and any corporation which shall succeed or assume the
      obligations of NexCen Brands, Inc. hereunder.

     

    (c)  “Commission”
shall
      mean the United States Securities and Exchange Commission or any other federal
      agency at the time administering the Securities Act.

     

    (d) “Common
      Stock”
means
      (i) the Company’s common stock, $0.01 par value per share, and (ii) any other
      securities into which or for which any of the securities described in clause
      (i)
      may be converted or exchanged pursuant to a plan of recapitalization,
      reorganization, merger, sale of assets or otherwise.

     

    (e) “Other
      Securities”
refers
      to any stock (other than Common Stock) and other securities of the Company
      or
      any other person (corporate or otherwise) which the Holder of the Warrant at
      any
      time shall be entitled to receive, or shall have received, on the exercise
      of
      the Warrant, in lieu of or in addition to Common Stock, or which at any time
      shall be issuable or shall have been issued in exchange for or in replacement
      of
      Common Stock or Other Securities pursuant to Section 2 or
      otherwise.

     

    (f) “Securities
      Act”
shall
      mean the U.S. Securities Act of 1933, as amended, or any similar federal statute
      and the rules and regulations of the Commission promulgated thereunder, all
      as
      the same shall be in effect from time to time.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6. Assignment;
      Exchange of Warrant.
      Subject
      to compliance with all applicable securities laws, this Warrant, and all rights
      hereunder are transferable or assignable upon (i) the sale
      or
      disposition of all or any substantial part of the Holder’s assets, (ii) the
      Holder’s merger or consolidation with or into another entity or
      business,
      or
      (iii) otherwise with the prior written consent of the Company. In
      the
      event the Company consents to such assignment, on
      the
      surrender for exchange of this Warrant, with endorsement of the Holder of this
      Warrant proposing to effect the assignment (a “Transferor”)
      in the
      form of Exhibit
      B
      attached
      hereto (the “Transferor
      Endorsement Form”)
      and
      together with an opinion of counsel reasonably satisfactory to the Company
      that
      the transfer of this Warrant will be in compliance with all applicable
      securities laws, the Company at its expense (once only), but with payment by
      the
      Transferor of any applicable transfer taxes, will issue and deliver to or on
      the
      order of the Transferor thereof a new Warrant or Warrants of like tenor, in
      the
      name of the Transferor and/or the transferee(s) specified in such Transferor
      Endorsement Form (each, a “Transferee”),
      calling in the aggregate on the face or faces thereof for the number of shares
      of Common Stock called for on the face or faces of the Warrant so surrendered
      by
      the Transferor. No such transfers shall result in a public distribution of
      the
      Warrant.

     

    7. Replacement
      of Warrant.
      On
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of any such loss,
      theft or destruction of this Warrant, on delivery of an indemnity agreement
      or
      security reasonably satisfactory in form and amount to the Company or, in the
      case of any such mutilation, on surrender and cancellation of this Warrant,
      the
      Company at its expense (once only) will execute and deliver, in lieu thereof,
      a
      new Warrant of like tenor.

     

    8. No
      Shareholder Rights.
      This
      Warrant shall not entitle the Holder hereof to any voting rights or other rights
      as a stockholder of the Company.

     

    9. Registration
      Rights. If
      the
      Company proposes to register any of Common Stock under the Securities Act and
      the registration form to be used may be used for the registration of the Warrant
      Shares, the Company shall give prompt written notice to the Holder of its
      intention to effect such a registration and shall include in such registration
      all Warrant Shares with respect to which the Company has received a written
      request for inclusion therein within 15 days after the receipt of the Company’s
      notice. If the foregoing registration statement is
      an
      underwritten primary registration on behalf of the Company, and the managing
      underwriters advise the Company in writing that in their opinion the number
      of
      securities requested to be included in such registration exceeds the number
      that
      can be sold in such offering without adversely affecting the marketability
      of
      the offering, the number of Warrant Shares included in such registration shall
      be reduced as necessary to give priority to the Common Stock the Company
      proposes to sell.

     

    10. Transfer
      on the Company’s Books.
      Until
      this Warrant is transferred on the books of the Company, the Company may treat
      the Holder hereof as the absolute owner hereof for all purposes, notwithstanding
      any notice to the contrary.

     

    11. Representations
      and Covenants of Holder.
      The
      Holder represents and
      warrants that it is acquiring the Warrant and the Warrant Shares solely for
      its
      account for investment
      and not with a view to or for sale or distribution of said Warrant or Warrant
      Shares or any part thereof. The Holder also represents that the entire legal
      and
      beneficial interests of the Warrant and Warrant Shares the Holder is acquiring
      are being acquired for, and will be held for, the
      Holder’s account only. The Holder further represents and warrants as
      follows:

     

    (a) Securities
      Are Not Registered.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i) The
      Holder acknowledges and understands that the Warrant and the Warrant Shares
      have
      not been registered under the Securities Act, on the basis that no distribution
      or public offering of the shares of the Company is to be effected. The Holder
      realizes that the basis for the exemption may not be present if, notwithstanding
      its representations, the Holder has a present intention of acquiring the
      securities for a fixed or determinable period in the future, selling (in
      connection with a distribution or otherwise), granting any participation in,
      or
      otherwise distributing the securities. The Holder has no such present
      intention.

     

    (ii) The
      Holder of this Warrant recognizes that the Warrant and the Warrant Shares must
      be held indefinitely, and that no sale, transfer, assignment, hypothecation
      or
      other disposition of this Warrant or the Warrant Shares shall be made in the
      absence of (A) an effective registration statement under the Securities Act
      as
      to this Warrant or the Warrant Shares and the registration or qualification
      of
      this Warrant or the Warrant Shares under any applicable state securities laws
      is
      then in effect or (B) an opinion of counsel satisfactory to the Company to
      the
      effect that such registration or qualification is not required in reliance
      on an
      exemption therefrom.

     

    (iii) The
      Holder is aware that neither the Warrant nor the Warrant Shares
      may be sold pursuant to Rule 144 adopted under the Securities Act unless certain
      conditions are
      met,
      including, among other things, the existence of a public market for the Warrant
      or the Warrant Shares, the availability of certain current public information
      about the Company, the resale following the required
      holding period under Rule 144 and the number of Warrant Shares being sold during
      any
      three
month
      period not exceeding specified limitations. So
      long
      as the Holder owns any Warrant Shares, the Company agrees to furnish such Holder
      forthwith upon request: a written statement by the Company as to its compliance
      with Rule 144, a copy of the most recent annual or quarterly report of the
      Company filed with the Commission, and such other reports and documents as
      a
      Holder may reasonably request in availing itself of any rule or regulation
      of
      the Commission allowing it to sell any such securities without
      registration.

     

    (b) Legended
      Shares.
      The
      Holder understands and agrees that all certificates or other instruments
      evidencing the Common Stock to be issued in connection with the exercise of
      this
      Warrant will bear legends as provided herein, one of which shall be
      substantially in the form set forth below:

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
      SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES
      ONLY AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
      HEREOF. THESE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED
      EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ALL OTHER APPLICABLE STATE
      SECURITIES LAWS.”

     

    (c) Accredited
      Investor Status.
      The
      Holder is an “accredited investor” as defined in Regulation D promulgated under
      the Securities Act.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    12. Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a Business
      Day during normal business hours where such notice is to be received), or the
      first Business Day following such delivery (if delivered other than on a
      Business Day during normal business hours where such notice is to be received)
      or (b) on the second Business Day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) if to the Company to: 1330
      Avenue of the Americas, 40th
      Floor,
      New
      York, NY 10019, Attn. Craig J. Hoffman, facsimile: (212) 277-1160, and (ii)
      if
      to the Holder, to the address and facsimile number listed on the first paragraph
      of this Warrant.

     

    13. Descriptive
      Headings.
      The
      description headings of the several sections and paragraphs of this Warrant
      are
      inserted for convenience only, do not constitute a part of this Warrant, and
      shall not limit or otherwise affect any of the terms hereof.

     

    14. Governing
      Law; Dispute Resolution.
      This
      Warrant shall be construed and enforced in accordance with, and the rights
      of
      the parties shall be governed by, the laws of the State of New York, without
      regard to its conflicts of law principles. The
      Company and the Holder hereby agree that any dispute arising out of or relating
      to this Warrant, or any action for recognition or enforcement of any judgment,
      shall be adjudicated by any New York State court or federal court of the United
      States sitting in New York City, and any appellate court from any
      thereof.

     

    15. Miscellaneous.
      This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. The invalidity
      or
      unenforceability of any provision hereof shall in no way affect the validity
      or
      enforceability of any other provision.

     

    *    *    *    * *

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above.

     

    
      	 	 	 
	 	NEXCEN
              BRANDS, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Robert
              W.
              D’Loren
	 	
              

              Name: Robert
                W. D’Loren

              Title: President
                and Chief Executive Officer

            
	 	 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

     

    FORM
      OF
      SUBSCRIPTION

    (to
      be
      signed only on exercise of Warrant)

     

    TO:
      NEXCEN BRANDS, INC.

     

    (1)  ̈ Payment. 
      The
      undersigned, pursuant to the provisions set forth in the attached Warrant (No.
      ____), hereby irrevocably elects to purchase _________
      shares
      of Common
      Stock of NexCen Brands, Inc. (the
      “Company”)
      covered by such Warrant,
      and
      tenders herewith
      payment of the
      full
      exercise price for such shares at the price provided for, and subject to the
      adjustment as provided in, such Warrant, together with all applicable transfer
      taxes, if any. Such payment of the full exercise price in the amount of $_______
      is in lawful money of the United States.

     

     ̈ Cashless
      Exercise.
      The
      undersigned hereby elects to purchase __________ shares of Common Stock of
      the
      Company pursuant
      to the terms of the cashless exercise provisions set forth in Section
      1.6 of the attached Warrant,
      and shall tender payment of all applicable transfer taxes, if any.

     

    (2) The
      undersigned requests that the certificates for said shares of Common Stock
      be
      issued in the name of, and delivered to
      ____________________________________________________ whose address is
      _______________________________________________________________

     

     

      
        

      

    

     

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable upon exercise of the within Warrant shall be made
      pursuant to registration of the Common Stock under the Securities Act of 1933,
      as amended (the “Securities
      Act”),
      or
      pursuant to an exemption from registration under the Securities
      Act.

     

    
      	
              Dated:___________________

            	
               

                

              

              
                

                
(Signature
                must conform to name of holder as specified on the face of the
                Warrant)

               

              
                

                

                

                

                

                

                

              

               

              (Address)

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

     

    FORM
      OF
      TRANSFEROR ENDORSEMENT

    (To
      be
      signed only on transfer of Warrant)

     

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto the
      person(s) named below under the heading “Transferees” the right represented by
      the within Warrant to purchase the percentage and number of shares of Common
      Stock of NEXCEN BRANDS, INC. to which the within Warrant relates specified
      under
      the headings “Percentage Transferred” and “Number Transferred,” respectively,
      opposite the name(s) of such person(s) and appoints each such person Attorney
      to
      transfer its respective right on the books of NEXCEN BRANDS, INC. with full
      power of substitution in the premises.

     

    
      	
              Transferees

            	
              Percentage
                Transferred

            	
              Number
                Transferred

            
	 	 	 
	 	 	 
	 	 	 

    

    

     

    
      	
              Dated:
                ______________, ___________

               

               

               

              Signed
                in the presence of:

               

              
                

              

              (Name)

               

               

              ACCEPTED
                AND AGREED:

              [TRANSFEREE]

               

               

              
                

              

              (Name)

            	
              
                

                

              

              
                

              

              (Signature
                must conform to name of holder as specified on the face of the
                warrant)

               

               

              
                

                

              

              
                

              

              
                

                

              

              
                

              

              (address)

               

              
                

                

                

              

              
                

                

              

              
                

              

              (address)Execution
      Copy

    

    MANAGEMENT
      SERVICES AGREEMENT

     

    AGREEMENT
      (this
“Agreement”)
      dated
      as of April 27, 2007 (the “Effective
      Date”)
      by and
      between MDC
      PARTNERS INC. (formerly
      MDC Communications Corporation), a corporation existing under the laws of Canada
      (the “Company”),
      NADAL
      MANAGEMENT, INC. (formerly
      Stallion Investments Limited) a corporation in which Miles Nadal is the sole
      shareholder (“NMI”),
      and
      MILES NADAL (the
      “Executive”).
      

    

    WITNESSETH:

    

    WHEREAS,
      MDC
      Communications Corporation, Nadal Financial Corporation and the Executive are
      parties to a Management Services Agreement dated November 1, 1997 (the
“Prior
      Agreement”),
      pursuant to which Executive serves as the Chairman and Chief Executive Officer
      of the Company; 

    

    WHEREAS,
      the
      Company wishes to assure itself of the services of NMI and the Executive, and
      NMI and the Executive desire to provide such services on the terms and
      conditions set forth below; and

    

    WHEREAS,
      the
      parties now wish to terminate the Prior Agreement on the Effective Date and
      enter into this Agreement on the terms and conditions hereinafter set forth.
      

    

    NOW,
      THEREFORE,
      in
      consideration of the premises and other good and valuable consideration, the
      receipt of which is hereby acknowledged, the parties hereto agree as
      follows:

    

    1. Term
      of Agreement

    

    Subject
      to the termination provisions of Sections 7 and 8 hereof, the term of this
      Agreement shall commence on the Effective Date and shall expire on the third
      anniversary thereof; provided, however, the term of this Agreement shall
      continue for additional one-year periods thereafter unless and until either
      the
      Company or NMI shall give to the other 60 days advance written notice prior
      to
      any expiration date of its intention not to renew the term. The initial term
      plus any renewal period thereafter, as may be earlier terminated as provided
      herein, is collectively referred to herein as the “Term.”
The
      date on which this Agreement terminates, regardless of the reason therefor,
      is
      referred to in this Agreement as the “Date
      of Termination.”

    

    2. Retention
      of NMI

    

    The
      Company hereby agrees to retain NMI as a consultant to render management
      services to the Company, subject to and in accordance with the terms and
      provisions hereof. NMI agrees to provide the Company with the services of the
      Executive upon the terms and conditions hereinafter set forth. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3. Services
      of Executive Provided by NMI

    

    (a) Position
      and Authority.
      During
      the Term, NMI shall provide the services of the Executive, who shall have the
      position of Chief Executive Officer of the Company and, if elected by the Board
      of Directors of the Company (the “Board”),
      Chairman of the Board. The Executive shall report directly to the Board. The
      Executive shall have all the powers, authority, duties and responsibilities
      incident to the position and office of Chief Executive Officer of the Company,
      including effective supervision and control over, and responsibility for, the
      day-to-day leadership and management of the business and affairs of the
      Company.

    

    (b) Responsibilities
      of Executive.
      The
      Executive agrees to devote his business time, attention, skills and efforts
      to
      promote with his best efforts the interests of the Company and to the due
      performance of his duties and responsibilities under this Agreement, consistent
      with Section 3(a) hereof. Notwithstanding the foregoing, the Executive shall
      be
      permitted, upon prior written consent of the Board, to serve on the board of
      directors of up to three companies or income trusts unaffiliated with the
      Company, provided that any such company does not engage in a Competing Business
      (as defined in Section 9(a) hereof) and does not transact business for which
      it
      is paid by the Company, except as may be approved in advance upon the prior
      written consent of the Board. In addition, the Executive shall be permitted
      to
      engage in charitable and civic activities and manage his personal passive
      investments, provided that such passive investments are not in a Competing
      Business and are not in a company that transacts business for which it is paid
      by the Company (except for an interest in a publicly held corporation of less
      than 2% of its outstanding shares); provided, however, that for the avoidance
      of
      doubt, the Company has determined that the current activities of the Executive
      with respect to his investments (listed on Exhibit A) are permitted hereunder,
      subject to periodic review and approval by the Board, in the event of any
      material change in the role or time commitment of Executive with such companies
      and provided that such activities do not in the reasonable judgment of the
      Board
      conflict with a full-time commitment as Chief Executive Officer of the Company.
      The Executive’s participation in activities outside of his duties to the Company
      as described above are further subject to the requirement that such activities
      do not interfere with the performance of his duties or responsibilities to
      the
      Company under this Agreement in a substantial manner taking into account all
      of
      the circumstances. 

    

    4. Retainer
      Fee and Other Payments

    

    (a)  Annual
      Retainer Fee.
      As
      compensation for the services hereunder provided by NMI during the Term, the
      Company shall pay to NMI, on a monthly basis in arrears, an annual retainer
      fee
      (the “Annual
      Retainer Fee”)
      as
      follows: (i) for the first 12 months of the Term, at the rate of $950,000 per
      annum; (ii) for the second 12 months of the Term, at the rate of $975,000 per
      annum; (iii) for the third 12 months of the Term, at the rate of $1,000,000
      per
      annum; and (iv) for any continuing period of the Term thereafter, at a rate
      of
      not less than $1,000,000 per annum or such greater amount as may be approved
      by
      the Human Resources & Compensation Committee of the Board any (the
“Compensation
      Committee”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (b)  Annual
      Bonus.
      During
      the Term, in respect of all calendar years beginning January 1, 2007, NMI shall
      be eligible to receive an annual fee as a bonus from the Company (the
“Annual
      Bonus”).
      The
      targeted range of payment under the Annual Bonus shall be up to 250% (assuming
      maximum performance) of the then current Annual Retainer Fee, based upon
      criteria determined by the Compensation Committee, following discussion with
      the
      Executive. Such criteria shall include the Executive’s performance, the overall
      financial performance of the Company and such other factors as the Compensation
      Committee shall deem reasonable and appropriate. Payment of the Annual Bonus
      (if
      any) shall be made at such time and in accordance with such procedures and
      forms
      of payment as may be approved by the Compensation Committee. Notwithstanding
      the
      foregoing, in respect of the Annual Bonus for calendar year 2007 (and not for
      any future years), the Company shall pay to NMI following each calendar quarter,
      assuming that the Compensation Committee determines in its discretion that
      the
      performance targets and other criteria for the Annual Bonus are being met based
      on then-current projections, quarterly installment amounts of
      $296,875 each
      (which in the aggregate represents one-half of the Annual Bonus at the maximum
      performance level for 2007), to be paid in accordance with past practice for
      installment bonus payment procedures.

    

    (c) Non-Renewal
      Payment.
      The
      Company has provided written notice to NMI and the Executive of non-renewal
      of
      the Prior Agreement. In order to settle their respective rights and obligations
      under the Prior Agreement, including with respect to the payment for termination
      and non-renewal pursuant to Section 3 thereof, and as an amendment for NMI
      and
      the Executive to enter into this Agreement, the parties hereto have agreed
      that
      the Company shall pay to NMI a lump-sum cash amount of $3,500,000 (the
“Non-Renewal Payment), payable as soon as practicable after the Effective Date,
      taking into account the Company’s cash needs and any restrictions or financial
      covenants under the Company’s credit facilities or other agreements.
 

    

    (d) Outstanding
      Loans.
      The
      Company has made loans to the Executive pursuant to Promissory Notes dated
      September 22, 1999, March 22, 2000 and September 30, 2004, and has made a loan
      to Nadal Financial Corporation under the Prior Agreement (the "Loans").  
      The terms of these Loans shall remain in effect in accordance with their terms
      (and without any modification or amendment of the original terms and conditions
      of such Loans), and the promissor shall continue to be obligated to make
      repayment of the Loans as required thereby.  In addition, NMI and the
      Executive shall cause the prepayments of outstanding principal balances under
      the Loans in respect of certain payments made under this Agreement, as follows:
      (i) in respect of the amount of any Annual Bonus paid pursuant to Section 4(b)
      hereof, prepayments of $100,000 (Cdn) per annum; (ii) in respect of the
      Non-Renewal Payment pursuant to Section 4(c) hereof, prepayment of $3 million
      (Cdn); (iii) in respect of any proceeds or income realized upon the exercise,
      vesting or payment (in cash or in shares) of Equity Incentives (as defined
      in
      Section 5 hereof), including awards granted prior to the Effective Date,
      prepayments of one-third of the “after-tax amount” of such proceeds or income
      (which may be satisfied by payment in Company stock); and (iv) in respect of
      any
      Termination Payment made pursuant to Section 8(b) hereof, prepayment of
      one-third of the “after-tax amount” of such payment. For purposes hereof, the
“after-tax amount” shall be deemed to be 80% of the proceeds, income or
      payments, as applicable, except to the extent that NMI demonstrates to the
      Company’s reasonable satisfaction that a lower percentage should apply to
      reflect a higher effective tax rate applicable to such payments. Any Loan
      prepayments made in accordance with this Section 4(d) shall first be made
      against the principal of the individual Loan that has the earliest maturity
      date
      at the time of the required prepayment, and shall be made promptly following
      the
      receipt of such payment made under this Agreement. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (e) Goods
      and Services Tax.
      To the
      extent that the services to be provided hereunder are rendered in Canada, the
      Company shall pay to NMI goods and services tax in connection with all payments
      received by NMI hereunder for such services and shall be responsible for the
      payment to the applicable taxing authority in Canada, any tax imposed on an
      employer to the extent of such services. In the event that the Company is
      required to pay to NMI taxes other than goods and services tax pursuant to
      this
      Section 4(e), NMI shall indemnify the Company for the amount of such other
      taxes
      to the extent that the Company would not be obliged to pay such other taxes
      if
      the services provided by NMI pursuant to this Agreement were provided to the
      Company by an employee of the Company who is paid a salary equal to the relevant
      amounts paid to NMI hereunder and to the extent that the Company is not entitled
      to an input tax credit arising therefrom. 

    

    5. Equity
      Incentives 

    

    NMI
      shall
      be eligible to receive awards of stock options, stock appreciation rights,
      restricted stock, stock units and/or other awards of equity incentives with
      respect to shares of the Company’s common stock, as determined by the
      Compensation Committee, pursuant to the terms of the Company’s equity incentive
      plans as in effect from time to time (“Equity
      Incentives”).
      For
      each calendar year during the Term, NMI may receive an annual grant of Equity
      Incentives with a targeted grant-date value of up to 300% of the then-current
      Annual Retainer Fee, in the discretion of the Compensation Committee. The
      determination of the grant-date value for this purposes shall be based upon
      such
      reasonable valuation assumptions adopted by the Compensation Committee
      consistent with the then-applicable standards utilized by the Company under
      FAS
      123, or any successor accounting standard for stock-based compensation. The
      particular types of Equity Incentives to be awarded and the terms and conditions
      thereof shall be determined by the Compensation Committee in its discretion.
      In
      general, it is intended that the Equity Incentive would become vested and/or
      exercisable based approximately one-third (1/3) on the continued service of
      NMI
      and the Executive, and approximately two-thirds (2/3) on the continued service
      of NMI and the Executive and the achievement of corporate performance goals
      to
      be established by the Compensation Committee.

    

    6. Benefits
      and Expenses 

    

    (a) Benefit
      Payments.
      For
      each calendar year during the Term, the Company shall pay to NMI the amount
      of
      $500,000 in
      respect of all employee benefits and perquisites to be provided by NMI to the
      Executive, which amount represents the costs of the Company in respect of
      pension benefits, welfare benefits (including medical, life and disability
      insurance) and other fringe benefits and perquisites (including automobile
      allowance and club memberships) which shall be provided to the Executive by
      NMI.
      Such amount shall be paid by the Company on a quarterly basis in arrears, and
      shall be prorated for any partial calendar year period during the Term. The
      Executive shall not be entitled to participation or coverage under any employee
      pension, welfare or fringe benefit plan or insurance benefit provided by the
      Company to its employees and all such coverage shall be provided to the
      Executive by NMI.  

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (b) Business
      Expenses.
      The
      Company agrees to pay or to reimburse NMI for all reasonable, ordinary,
      necessary and documented business expenses incurred during the Term in the
      performance of its services hereunder in accordance with the policy of the
      Company as from time to time in effect. NMI shall provide to the Company any
      and
      all statements, bills or receipts evidencing the travel or out-of-pocket
      expenses for which it seeks payment or reimbursement, and any other information
      or materials, as the Company may from time to time reasonably require. Such
      reimbursement shall be made within 30 days after submission of such information.
      

     

    7. Termination

    

    (a) Termination
      for Cause.
      The
      Company, by direction of the Board, shall be entitled to terminate the services
      of NMI and the Executive hereunder and the Term hereof for “Cause” upon the
      giving of written notice to NMI and the Executive. For purposes of this
      Agreement, the term “Cause”
shall
      mean:

    

    (i) the
      material failure by NMI to cause the services of the Executive to be provided
      in
      accordance with Section 2 hereof; 

    

    (ii) the
      Executive's willful failure or refusal to materially perform his duties and
      responsibilities to the Company as set forth in Section 3 hereof (other than
      as
      a result of a Disability pursuant to Section 7(d) hereof),
      or to abide by the reasonable directives of the Board, in each case if such
      failure or refusal is not cured (if curable) within 15 days after written notice
      thereof by the Company;

    

    (iii) the
      willful fraud or material dishonesty of the Executive in connection with his
      position or the performance of duties to the Company (including any
      misappropriation of the funds or property of the Company), or the willful
      misconduct of the Executive in connection with his position or the performance
      his performance of duties to the Company;

    

    (iv) the
      conviction of Executive in a court of law of, or entering by the Executive
      of a
      plea of guilty or no contest to, any felony or any crime involving material
      dishonesty or theft;

    

    (v)
      willful failure by the Executive to cooperate as directed by the Board with
      a
      bona fide Company internal investigation or an investigation of the Company
      by
      governmental, regulatory or law enforcement authorities, if such breach is
      not
      cured (if curable) within 15 days after written notice thereof to the Executive
      by the Company; 

    

    (vi)
      the
      resignation or other termination of the Executive as the Chief Executive Officer
      of the Company if at the request or instruction of any governmental, regulatory
      or law enforcement authority; and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (vii) any
      material breach by NMI or the Executive of Section 9 hereof, if such breach
      is
      not cured (if curable) within 15 days after written notice thereof to the
      Executive by the Company.

    

    Any
      notice required to be given by the Company pursuant to this Section 7(a) shall
      specify the nature of the circumstance alleged to constitute Cause and the
      provisions of this Agreement relied upon, and shall specify the Date of
      Termination, which shall not be less than 30 days following the date of such
      notice. Any termination for Cause shall be effected by a resolution of the
      2/3
      of the members of the Board, excluding Executive. Prior to the effectiveness
      of
      any such termination, Executive shall be afforded an opportunity to meet with
      the Board, upon reasonable notice under the circumstances, and explain and
      defend any action or omission alleged to constitute grounds for a termination
      for Cause; provided that, the Board may suspend Executive from his duties
      hereunder prior to such opportunity and such suspension shall not constitute
      a
      breach of this Agreement by the Company or otherwise form the basis for a
      termination for Good Reason. 

    

    (b) Termination
      for Good Reason.
      Provided that a Cause event has not occurred, NMI shall be entitled to terminate
      the services of NMI and the Executive hereunder and the Term hereof for “Good
      Reason” effective upon the giving of written notice to the Company within 180
      days following the occurrence of the event constituting Good Reason. For
      purposes of this Agreement, “Good
      Reason”
shall
      mean the occurrence of one of the following, without the prior written consent
      of the Executive:

    

    (i)
      a
      material diminution of the Executive’s position or authority as set forth in
      Section 3 hereof, which breach remains uncured (if curable) for a period of
      15
      days after written notice of such breach to the Company;

    

    (ii)
      the
      Company’s material breach of the compensation and benefits provisions of
      Sections 4, 5 or 6 hereof, which breach remains uncured (if curable) for a
      period of 15 days after written notice of such breach to the
      Company;

    

    (iii)
      a
      notice of non-renewal of this Agreement given by the Company pursuant to Section
      1 hereof; and 

    

    (iv)
      following a Change in Control (as defined below), the Executive not holding
      the
      position of chief executive officer of the ultimate parent corporation or other
      controlling entity resulting from the Change in Control transaction.

    

    Any
      notice required to be given by the Executive pursuant to this Section 7(b)
      shall
      specify the nature of the circumstance alleged to constitute Good Reason and
      the
      provisions of this Agreement relied upon, and shall specify the Date of
      Termination, which shall not be less than 30 days following the date of such
      notice.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    For
      the
      purposes of this Agreement, a “Change
      of Control”
shall
      have the meaning provided in Section 2(b) of the Company’s 2005 Stock Incentive
      Plan, as in effect on the Effective Date. 

    

    (c) Termination
      by Company without Cause.
      The
      Company, by direction of the Board, shall have the right at any time during
      the
      Term to terminate the services of NMI and the Executive hereunder and the Term
      hereof without Cause by giving 60-days advance written notice to NMI and the
      Executive, subject to the provisions of Section 8 hereof. 

    

    (d) Termination
      by NMI without Good Reason.
      NMI
      shall have the right at any time during the Term to terminate the services
      of
      NMI and the Executive hereunder and the Term hereof without Good Reason by
      giving 60-days advance written notice to the Company.

    

    (e) Termination
      for Death or Disability.
      The
      services of NMI and the Executive hereunder and the Term hereof shall
      automatically terminate in the event of the Executive's death of “Disability.”
For purposes hereof, the term “Disability”
shall
      mean that the Executive shall be unable to perform his duties hereunder by
      virtue of illness or physical or mental incapacity or disability (from any
      cause
      or causes whatsoever) for periods aggregating 180 days, whether or not
      continuous, in any continuous period of 360 days. The Company shall have the
      right to terminate the Agreement hereunder as at the end of any calendar month
      during the continuance of such Disability upon at least 30 days' prior written
      notice to NMI and the Executive.

    

    8. Termination
      Payments and Benefits 

    

    (a) Termination
      for Cause; without Good Reason; Death or Disability.
      In the
      event of the termination of the Term hereof (1) by the Company for Cause
      pursuant to Section 7(a) hereof; (2) by NMI without Good Reason pursuant to
      Section 7(d) hereof; or (3) by reason of death or Disability of the Executive
      pursuant to Section 7(e) hereof, then NMI shall be entitled to the following
      (together, the “Accrued
      Rights”):

    

    (i) unpaid
      Annual Retainer Fee through the Date of Termination, and any unpaid reimbursable
      expenses outstanding as of, the Date of Termination; and

    

    (ii)  all
      Equity Incentives in accordance with the terms of the applicable plans and
      award
      agreements to which the awards are subject.

    

    In
      the
      event of termination of the Agreement in the circumstances described in this
      Section 8(a), except as expressly provided in this Section, the Company shall
      have no further liability to NMI, the Executive or the Executive's heirs,
      beneficiaries or estate for damages, compensation, benefits, severance or other
      amounts of whatever nature, directly or indirectly, arising out of or otherwise
      related to this Agreement, other than any indemnification obligations under
      the
      Company’s by-laws. 

    

    (b) Termination
      without Cause; for Good Reason.
      In the
      event of a termination of the Term hereof (1) by the Company without Cause
      pursuant to Section 7(c) hereof; or (2) by NMI for Good Reason pursuant to
      Section 7(b) hereof, then NMI shall be entitled to the following payments and
      benefits:

    

    
      	(i)  	
              the
                Accrued Rights as provided in Section 8(a) hereof;
                

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(ii)  	
              the
                Annual Bonus with respect to any completed calendar year prior to
                the Date
                of Termination, when otherwise payable to the Company’s senior executives
                generally, but only to the extent earned in accordance with the terms
                of
                the Annual Bonus and approved by the Compensation Committee but not
                already paid (the “Accrued
                Bonus”);
                

            

    

    

    
      	(iii)  	
              a
                pro-rata portion of the Annual Bonus with respect to the calendar
                year in
                which the Date of Termination occurs, with such pro-rata amount to
                be
                equal to the product of (A) the average of the Annual Bonus amounts
                paid
                to the Executive for the three (3) calendar years ending immediately
                preceding the Date of Termination (the “Average
                Bonus Amount”),
                times (B) a fraction, (x) the numerator of which is the number of
                calendar
                days from January 1 until the Date of Termination, and (y) the denominator
                of which is 365; 

            

    

    

    
      	(iv)  	
              a
                severance payment in an amount equal to the product of 3.0 multiplied
                by
                the sum of (A) the amount of then-current Annual Retainer Fee, plus
                (B)
                the Average Bonus Amount (the “Termination
                Payment”).
                The Termination Payment (less applicable withholding taxes), shall
                be paid
                to NMI in a cash lump-sum not later than 15 business days following
                the
                Date of Termination, subject to the requirements of Section 8(c)
                hereof;

            

    

    

    
      	(v)  	
              an
                additional lump-sum cash payment of $1,500,000, which represents
                the
                product of 3.0 multiplied by the benefit payment amount under Section
                6(a)
                hereof; and

            

    

    

    
      	(vi)  	
              any
                Equity Incentives granted to NMI on or following the Effective Date
                shall
                continue to vest and become exercisable and payable (as applicable)
                until
                the third anniversary of the Date of Termination on the same basis
                as if
                the Term of this Agreement had remained in effect until such anniversary
                date, notwithstanding the cessation of the Executive’s service with the
                Company, including any requirements for performance-based vesting
                relating
                to Company business or financial performance (but not individual
                performance following the Effective
                Date).

            

    

    

    In
      the
      event of termination of this Agreement in the circumstances described in this
      Section 8(b), except as expressly provided in this Section, the Company shall
      have no further liability to NMI, the Executive or the Executive’s heirs,
      beneficiaries or estate for damages, compensation, benefits, severance or other
      amounts of whatever nature, directly or indirectly, arising out of or otherwise
      related to this Agreement, other than any indemnification obligations under
      the
      Company’s by-laws. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (c) Termination
      by Reason of Death or Disability.
      In the
      event of a termination of the Term hereof by reason of death or Disability
      pursuant to Section 7(e) hereof, then (i) NMI shall be entitled to payment
      of
      the Accrued Rights and the Accrued Bonus, and (ii) the Executive shall be
      entitled to any insurance benefits pursuant to the life and disability insurance
      coverages provided by NMI pursuant to Section 6(a) hereof.

    

    (d) Conditions
      to Payments; No Mitigation.
      The
      termination payments and benefits provided under this Section 8(b) shall be
      conditioned upon NMI and the Executive signing and not revoking the mutual
      waiver and release substantially in the form attached hereto as Exhibit B,
      subject to the Company signing such mutual waiver and release.
       In
      the
      event of a breach by the Executive or NMI of the restrictive covenants of
      Section 9 of this Agreement, in addition to any other remedies at law or in
      equity available to it, the Company may cease making any further payments and
      providing the other benefits provided for in Section 8(b) hereof, without
      affecting its rights under this Agreement. NMI and the Executive shall be under
      no duty to mitigate any termination payments or benefits provided under this
      Section 8(b). 

    

    9. Restrictive
      Covenants

    

    (a) General. The
      parties hereto agree that the covenants given in this Section 9 are being given
      incident to the agreements and transactions described herein, and that such
      covenants are being given for the benefit of the Company. During the Term,
      the
      Executive has and will continue to develop a personal relationship with the
      clients of the Company and a knowledge of those clients' affairs and
      requirements, and the relationship of the Company with its established clientele
      will therefore be placed in the Executive's hands in confidence and trust.
      The
      Executive consequently agrees that it is a legitimate interest of the Company,
      and reasonable and necessary for the protection of the Confidential Information,
      goodwill and business of the Company, which is valuable to the Company, the
      Executive makes the covenants contained herein and that the Company would not
      have entered into this Agreement unless the covenants set forth in this Section
      9 were contained in this Agreement. As used in this Section 9, the term
      "Company" shall include any subsidiaries, affiliates, and agencies of the
      Company, and the term "client" shall mean anyone who is a present client of
      the
      Company, or an identified prospective client with whom the Company has taken
      substantial steps to establish a relationship, as of the Date of Termination
      or
      at any time during the one year period immediately preceding the Date of
      Termination. As used in this Section 9, the term “Executive” shall refer to the
      Executive and NMI, collectively. 

    

    (b) Non-Competition.
      The
      Executive agrees that, during the Term and continuing for two (2) years after
      the Date of Termination pursuant to a termination of the Term for any reason
      (the “Restricted
      Period”),
      the
      Executive shall not, directly or indirectly, as an individual, employee,
      officer, consultant, independent contractor, or partner, in association with
      any
      other person, business or enterprise, except on behalf of the Company, directly
      or indirectly, engage in or participate in any business that is competitive
      with
      any business that the Company is substantially engaged in during the Term while
      employing NMI and the Executive, relating to advertising, public relations,
      or
      any other marketing communications or marketing consulting services, unless
      as
      of the Date of Termination the Company has disposed of or has ceased to be
      actively engaged in any such business (together, a “Competing
      Business”),
      nor
      shall the Executive make any investments in any Competing Business (except
      for
      interests in a publicly held corporation of less than 2% of its outstanding
      shares). Notwithstanding the foregoing, the Executive shall not be prohibited
      from engaging in any business in a separate division or subsidiary that is
      affiliated with a Competing Business, provided that Executive has no
      responsibilities with respect thereto. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Non-Solicitation
      of Employees and Clients.
      The
      Executive agrees that, during the Restricted Period, the Executive shall not,
      as
      an individual, employee, officer consultant, independent contractor, partner,
      shareholder, or in association with any other person, business or enterprise,
      except on behalf of the Company, directly or indirectly, and regardless of
      the
      reason for the cessation of the Term: (i) attempt in any manner to persuade
      any
      client to cease to do business or to reduce the amount of business which any
      such client has customarily done or is reasonably expected to do with the
      Company, whether or not the relationship between the Company and such client
      was
      originally established in whole or in part through the Executive’s efforts; or
      (ii) employ as an employee or retain as a consultant any person, firm or entity
      who is then or at any time during the preceding twelve months was an employee
      of
      or exclusive consultant to the Company, or persuade or attempt to persuade
      any
      employee of or exclusive consultant to the Company to leave the employ of the
      Company or to become employed as an employee or retained as a consultant by
      any
      person, firm or entity other than the Company, other than his personal assistant
      or secretary.

    

    (d) Confidential
      Information.
      During
      the Term, the Executive will acquire and have access to confidential or
      proprietary information about the Company and/or its clients, including but
      not
      limited to, trade secrets, methods, models, passwords, access to computer files,
      financial information and records, computer software programs, agreements and/or
      contracts between the Company and its clients, client contacts, client
      preferences, creative policies and ideas, advertising campaigns, creative and
      media materials, graphic design materials, sales promotions and campaigns,
      sales
      presentation materials, budgets, practices, concepts, strategies, methods of
      operation, financial or business projections of the Company and information
      about or received from clients and other companies with which the Company does
      business. The foregoing shall be collectively referred to as "Confidential
      Information".
      The
      Executive is aware that the Confidential Information is not readily available
      to
      the public and accordingly, the Executive also agrees that he will not at any
      time (whether during the Term or after termination of this Agreement), disclose
      to anyone (other than counsel in the course of a dispute arising from the
      alleged disclosure of Confidential Information or as required by law) any
      Confidential Information, or utilize such Confidential Information for
      Executive’s own benefit, or for the benefit of third parties. The term
      "Confidential Information" does not include information which (i) is or becomes
      generally available to the public other than by breach of this provision or
      (ii)
      the Executive learns from a third party who is not under an obligation of
      confidence to the Company or a client of the Company. In the event that the
      Executive becomes legally required to disclose any Confidential Information,
      the
      Executive will use reasonable efforts to provide the Company with prompt notice
      thereof so that the Company may seek a protective order or other appropriate
      remedy and/or waive compliance with the provisions of this Section 9(c) to
      permit a particular disclosure. The Executive further agrees that all memoranda,
      disks, files, notes, records or other documents, whether in electronic form
      or
      hard copy (collectively, the "Material")
      compiled by or made available to Executive during the Term (whether or not
      the
      Material constitutes or contains Confidential Information), and in connection
      with the performance of Executive’s duties hereunder, shall be the property of
      the Company and shall be delivered to the Company on the termination of the
      Agreement or at any other time upon request. Except in connection with
      Executive’s obligations under the Agreement, the Executive agrees not to make or
      retain copies or excerpts of any such Material. Anything to the contrary
      notwithstanding, nothing in this Section 9(c) shall prevent the Executive from
      retaining a home computer and security system, papers and other materials of
      a
      personal nature, including personal diaries, calendars and Rolodexes,
      information relating to the Executive’s compensation or relating to
      reimbursement of expenses, information that the Executive reasonably believe
      may
      be needed for tax purposes, and copies of plans, programs and agreements
      relating to the Executive’s employment.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (e) Intellectual
      Property.
      During
      the Term, the Executive will disclose to the Company all ideas, inventions
      and
      business plans developed by him during such period which relate directly or
      indirectly to the business of the Company, including without limitation, any
      design, logo, slogan, advertising campaign or any process, operation, product
      or
      improvement which may be patentable or copyrightable. The Executive agrees
      that
      all patents, licenses, copyrights, tradenames, trademarks, service marks,
      planning, marketing and/or creative policies and ideas, advertising campaigns,
      promotional campaigns, media campaigns, budgets, practices, concepts,
      strategies, methods of operation, financial or business projections, designs,
      logos, slogans and business plans developed or created by the Executive during
      the Term, either individually or in collaboration with others, will be deemed
      works for hire and the sole and absolute property of the Company. The Executive
      agrees, that at the Company's request and expense, the Executive will take
      all
      steps necessary to secure the rights thereto to the Company by patent, copyright
      or otherwise. 

    

    (f) Remedies.
      If the
      Executive commits a breach of any of the provisions of this Sections 9, the
      Company shall have the right to have the provisions of this Agreement
      specifically enforced by any court having jurisdiction without being required
      to
      post bond or other security and without having to prove the inadequacy of the
      available remedies at law, it being acknowledged and agreed that any such breach
      or threatened breach will cause irreparable injury to the Company and that
      money
      damages will not provide an adequate remedy to the Company. In addition, the
      Company may take all such other actions and remedies available to it under
      law
      or in equity and shall be entitled to such actual damages as it can show it
      has
      sustained by reason of such breach.

    

    (g) Acknowledgements.
      The
      parties acknowledge that the type and periods of restriction imposed in the
      provisions of this Section 9 are fair and reasonable and are reasonably required
      in order to protect and maintain the proprietary interests of the Company
      described above, other legitimate business interests and the goodwill associated
      with the business of the Company. If any of the covenants contained in this
      Section 9, or any part thereof, is held to be unenforceable by reason of it
      extending for too great a period of time or over too great a geographic area
      or
      by reason of it being too extensive in any other respect, the parties agree
      (x)
      such covenant shall be interpreted to extend only over the maximum period of
      time for which it may be enforceable and/or over the maximum geographic areas as
      to which it may be enforceable and/or over the maximum extent in all other
      respects as to which it may be enforceable, all as determined by the court
      or
      arbitration panel making such determination and (y) in its reduced form, such
      covenant shall then be enforceable, but such reduced form of covenant shall
      only
      apply with respect to the operation of such covenant in the particular
      jurisdiction in or for which such adjudication is made. Each of the covenants
      and agreements contained in this Section 9 (collectively, the "Restrictive
      Covenants")
      is
      separate, distinct and severable. The existence of any claim, demand, action
      or
      cause of action of the Executive against the Company, whether predicated on
      this
      Agreement or otherwise, shall not constitute a defense to the enforcement by
      the
      Company of each Restrictive Covenant. The unenforceability of any Restrictive
      Covenant shall not affect the validity or enforceability of any other
      Restrictive Covenant or any other provision or provisions of this Agreement.
      The
      temporal duration of the Restrictive Covenants set forth in this Agreement
      shall
      not expire, and shall be tolled, during any period in which the Executive is
      in
      violation of any of the Restrictive Covenants set forth herein, and all
      restrictions shall automatically be extended by the period of the Executive's
      violation of any such restrictions. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    10. Enforceability

    

    The
      failure of any party at any time to require performance by another party of
      any
      provision hereunder shall in no way affect the right of that party thereafter
      to
      enforce the same, nor shall it affect any other party's right to enforce the
      same, or to enforce any of the other provisions in this Agreement; nor shall
      the
      waiver by any party of the breach of any provision hereof be taken or held
      to be
      a waiver of any subsequent breach of such provision or as a waiver of the
      provision itself.

    

    11. Assignment

    

    The
      Company, NMI and the Executive agree that the Company shall have the right
      to
      assign this Agreement in connection with any asset assignment of all or
      substantially all of the Company’s assets, stock sale, merger, consolidation or
      other corporate reorganization involving the Company and, accordingly, this
      Agreement shall inure to the benefit of, be binding upon and may be enforced
      by,
      any and all successors and such assigns of the Company. The Company, NMI and
      Executive agree that NMI shall have the right to delegate all or a portion
      of
      its right and obligation to provide Executive’s services to the Company
      hereunder to another company controlled by Executive, with the prior consent
      of
      the Company (which consent shall not be unreasonably withheld), provided that
      the Executive continues to provide the services required under Section 3 hereof,
      and provided further that the Executive shall not have the right to assign
      or
      otherwise transfer his rights or obligations under this Agreement, and any
      purported assignment or transfer shall be void and ineffective. The rights
      and
      obligations of the Company and of NMI hereunder shall be binding upon and run
      in
      favor of the successors and permitted assigns of the Company and NMI,
      respectively. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12. Modification

    

    This
      Agreement may not be orally canceled, changed, modified or amended, and no
      cancellation, change, modification or amendment shall be effective or binding,
      unless in writing and signed by the parties to this Agreement, and approved
      in
      writing by the Board. 

    

    13. Severability;
      Survival

    

    In
      the
      event any provision or portion of this Agreement is determined to be invalid
      or
      unenforceable for any reason, in whole or in part, the remaining provisions
      of
      this Agreement shall nevertheless be binding upon the parties with the same
      effect as though the invalid or unenforceable part had been severed and deleted
      or reformed to be enforceable. The respective rights and obligations of the
      parties hereunder shall survive the termination of this Agreement to the extent
      necessary to the intended preservation of such rights and obligations,
      specifically Sections 8 through 25 hereof.

     

    14. Notice

    

    Any
      notice, request, instruction or other document to be given hereunder by any
      party hereto to another party shall be in writing and shall be deemed effective
      (a) upon personal delivery, if delivered by hand, or (b) three days after the
      date of deposit in the mails, postage prepaid if mailed by certified or
      registered mail, or (c) on the next business day, if sent by prepaid overnight
      courier service or facsimile transmission (if electronically confirmed), and
      in
      each case, addressed as follows:

    

    If
      to
      NMI:

     

    c/o
      Aird
& Berlis

    181
      Bay
      Street, Suite 1800

    Toronto,
      ON M5J2T9

    Canada

    (attn:
      Jack Bernstein)

    

    If
      to
      the Executive:

    Miles
      S.
      Nadal

    PO
      Box
      N-1991, Paradise Island

    Nassau,
      Bahamas

     

    If
      to
      the Company:

     

    c/o
      MDC
      Partners Inc.

    950
      Third
      Avenue

    New
      York,
      NY 10022

    Attention:
      General Counsel 

    Fax:
      (212) 937-4365

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Any
      party
      may change the address to which notices are to be sent by giving notice of
      such
      change of address to the other party in the manner herein provided for giving
      notice.

    

    15. Applicable
      Law

    

    This
      Agreement shall be governed by, enforced under, and construed in accordance
      with
      the laws of the state of New York and the federal laws of the United States
      applicable therein. 

    

    16. No
      Conflict

    

    NMI
      and
      the Executive represents and warrants that neither is subject to any agreement,
      instrument, order, judgment or decree of any kind, or any other restrictive
      agreement of any character, which would prevent either such party from entering
      into this Agreement or which would be breached by either such party upon the
      performance of their duties pursuant to this Agreement.

    

    17. Entire
      Agreement

    

    This
      Agreement represents the entire agreement between the Company, NMI and the
      Executive with respect to the provision of services of NMI and the Executive
      to
      the Company, and all prior agreements with respect thereto, including, without
      limitation, the Prior Agreement, shall be nullified and superseded hereby except
      to the extent provided for herein. 

    

    18. Arbitration

    

    Any
      controversy, dispute, or claim arising out of, in connection with, or in
      relation to, the interpretation, performance or breach of this Agreement,
      including, without limitation, the validity, scope, and enforceability of this
      section, may at the election of any party, be solely and finally settled by
      arbitration conducted in the City of New York, New York, by and in accordance
      with the with the Expedited Procedures of the Commercial Arbitration Rules
      of
      the American Arbitration Association, or any successor organization, then in
      effect (collectively, the "Rules").
      Each
      of the parties hereto agrees that such arbitration shall be conducted by a
      single arbitrator selected in accordance with the Rules; provided that such
      arbitrator shall be experienced in deciding cases concerning the matter which
      is
      the subject of the dispute. Any of the parties may demand arbitration by written
      notice to the other and to the Arbitrator set forth in this Section 19(b)
      ("Demand
      for Arbitration").
      Each
      of the parties agrees that if possible, the award shall be made in writing
      no
      more than 30 days following the end of the proceeding. Any award rendered by
      the
      arbitrator(s) shall be final and binding and judgment may be entered on it
      in
      any court of competent jurisdiction. Each of the parties hereto agrees to treat
      as confidential the results of any arbitration (including, without limitation,
      any findings of fact and/or law made by the arbitrator) and not to disclose
      such
      results to any unauthorized person. The parties intend that this agreement
      to
      arbitrate be valid, enforceable and irrevocable. In the event of any arbitration
      with regard to this Agreement, each party shall pay its own legal fees and
      expenses, provided, however, that the parties agree to share the cost of the
      Arbitrator’s fees. If NMI or the Executive substantially prevails in any such
      arbitration, then the Company shall pay all legal fees incurred by NMI and
      the
      Executive to arbitrate the dispute, and all arbitration fees. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    19. Headings

    

    The
      headings contained in this Agreement are for reference purposes only, and shall
      not affect the meaning or interpretation of this Agreement.

     

    20. Tax
      Withholding and Reporting; Currency

    

    With
      respect to any rights, payments or benefits to or on behalf of NMI of the
      Executive under this Agreement, the Company shall comply with applicable tax
      reporting and tax withholding obligations as it deems appropriate, and shall
      have the right to withhold or deduct from any such amounts hereunder such
      federal, state or local taxes as it shall determine are required to be withheld
      pursuant to any applicable law or regulation, including the laws of the United
      States and Canada and their respective subdivisions. Except as otherwise
      provided herein, all dollar amounts referred to in this Agreement are
      denominated in United States currency. 

    

    21. 409A
      Compliance

    

    This
      Agreement is intended to comply, to the extent applicable, with Section 409A
      of
      the Internal Revenue Code of 1986, as amended (the “Code”)
      and
      will be so interpreted. Notwithstanding anything herein to the contrary, (i)
      if
      on the Termination Date Executive is a “specified employee” as defined in
      Section 409A of the Code, and the deferral of the commencement of any payments
      or benefits otherwise payable hereunder as a result of such termination the
      Agreement is necessary in order to prevent the imposition of any accelerated
      or
      additional tax under Section 409A of the Code, then the Company will (A) defer
      the commencement of the payment of any such payments or benefits hereunder
      (without any reduction in such payments or benefits ultimately paid or provided
      to Executive) until the date that is six months following the Termination Date
      (or the earliest date as is permitted under Section 409A of the Code), and
      (B)
      add to such payment or benefit an interest payment for the six-month period
      calculated using the short-term Applicable Federal Rate (monthly compounded)
      as
      in effect on the date of termination under Section 1274(d) of the Internal
      Revenue Code and (ii) if any other payments of money or other benefits due
      to
      NMI or the Executive hereunder could cause the application of an accelerated
      or
      additional tax under Section 409A of the Code, the parties agree to restructure
      the payments or benefits to comply with Section 409A of the Code in a manner
      which does not diminish the value of such payments and benefits to NMI or the
      Executive.

    

    22. Section
      280G Provision.
      NMI and
      the Executive shall be entitled to the rights provided under Exhibit C of this
      Agreement.

    

    23. Counterparts

    

    This
      Agreement may be executed in two counterparts or by facsimile transmission,
      both
      of which taken together shall constitute one instrument.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    24. No
      Strict Construction

    

    The
      language used in this Agreement will be deemed to be the language chosen by
      the
      Company, NMI and the Executive to express their mutual intent, and no rule
      of
      law or contract interpretation that provides that in the case of ambiguity
      or
      uncertainty a provision should be construed against the draftsman will be
      applied against any party hereto.

    

    25. Company
      Artwork.
      Not
      later than the first anniversary of the Effective Date, the Executive shall
      have
      arranged for the purchase and/or transfer of collectible artwork shared by
      the
      Company and the Executive based upon appraised fair market values which the
      Company, NMI and the Executive have mutually agreed upon (net of the amount
      mutually agreed upon as representing the commission that would otherwise be
      payable upon sale of the artwork). The Company shall prepare the necessary
      documents of title transfer and receipts to effect such transfer and settlement.
      All necessary parties shall use their reasonable efforts to execute any
      documents reasonably necessary to effectuate the foregoing. 

     

    *  *  *  *  *

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Management Services Agreement as of the day and
      year
      first above written.

    
      	 	 	 
	 	
              MDC
                Partners Inc.

            
	 
 	 
 	 
 
	
            	By:	
            
	 	
              

              Name:

              Title:

            

      	 	 	 
	 	 	 
	 	
              Nadal
                Management, Inc.

            
	 
 	 
 	 
 
	
            	By:	
            
	 	
              

              Name:

            
	 	Title:

      	 	 	 
	 	 	 
	 	
              Miles
                Nadal

            
	 
 	 
 	 
 
	
            	
            	
            
	 	
              

              Miles
                Nadal

            

    

    
      	 	 	 
	 	 	 
	 	
              Nadal
                Financial Corporation

              
                (solely
                  for purposes of Sections 4(d) and 17 hereof)

              

            
	 
 	 
 	 
 
	
            	By:	
            
	 	
              
Name:
	 	Title:

    

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Exhibit
      A to Management Services Agreement

     

    LIST
      OF COMPANIES 

    

    The
      Companies for which Executive currently is an investor in, as of the Effective
      Date, are as follows:

    

    Peerage
      Capital Fund - Founder - limited partner

    Peerage
      Capital Group - Founder - general partner

    Trapeze
      -
      Media Inc. - founding investor and shareholder

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

    Exhibit
      B to Management Services Agreement

    

    MUTUAL
      RELEASE OF CLAIMS AND COVENANT NOT TO SUE

    

    This
      MUTUAL RELEASE OF CLAIMS AND COVENANT NOT TO SUE is executed and delivered
      (A)
      by MILES NADAL (“Executive”)
      and
NADAL
      MANAGEMENT, INC.
      (“NMI”)
      to
MDC
      PARTNERS INC. (the
      “Company”),
      and
      (B) by the COMPANY to EXECUTIVE and NMI.

     

    In
      consideration of mutual payments, rights and benefits provided under the
      Management Services Agreement between Executive, NMI and the Company, dated
      April 30, 2007 (the “Management
      Services Agreement”),
      Executive, NMI and the Company hereby agree as follows:

    

    Section
      1. Severance
      Benefit.
      Executive and NMI specifically acknowledge and agrees that all payments and
      benefits pursuant to Section 8 of the Management Services Agreement are in
      full satisfaction of all amounts due to Executive and NMI as severance pay
      or
      benefits from the Company or its affiliates. Without limiting the generality
      of
Section 2
      below,
      Executive and NMI voluntarily release and waive any and all rights that
      Executive or NMI may have or may have had under the Management Services
      Agreement or to any other severance pay or benefits from the Company or any
      of
      its affiliates.

    

    Section
      2. Release
      and Covenant by the Executive and NMI.
      NMI and
      Executive each voluntarily release and forever discharges the Company and its
      affiliates, their respective officers, employees, agents, stockholders,
      successors and assigns (both individually and in their official capacities
      with
      the Company and its affiliates) (together, “Releasees”)
      from,
      and covenants not to sue or proceed against any of the foregoing on the basis
      of, any and all past or present causes of action, suits, agreements or other
      claims which Executive, NMI, and their respective dependents, relatives, heirs,
      executors, administrators, successors and assigns has or have against Releasees
      on their behalf upon or by reason of any matter arising out of the Management
      Services Agreement, and including, but not limited to, any alleged violation
      of
      the Civil Rights Acts of 1964 and 1991, the Equal Pay Act of 1963, the Age
      Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the
      Older Workers Benefit Protection Act of 1990, the Americans with Disabilities
      Act of 1990, the Family and Medical Leave Act of 1993, and any other federal
      or
      state law, regulation or ordinance, or public policy, contract or tort law,
      having any bearing whatsoever on the terms and conditions or cessation of the
      Management Services Agreement. Except as expressly stated herein, this release
      shall not, however, constitute a waiver of any of NMI’s rights under the
      Management Services Agreement (including without limitation, any right to
      indemnification).

    

    Section
      3. Release
      and Covenant by the Company.
      In
      exchange for NMI and Executive’s promises in this Mutual Release, Company agrees
      to make the all payments and benefits pursuant to Section 8 of the
      Management Services Agreement on the terms and conditions described therein.
      In
      consideration of NMI and Executive's agreements and covenants in this Mutual
      Release, the Company, on behalf of the Releasees, forever releases and waives
      any and all claims, counts, causes of action and demands of any kind or nature
      for money or anything else, whether such claims are known or unknown, against
      NMI and Executive, that arose prior to NMI and Executive’s signing of this
      Mutual Release or that relate in any way to the Management Services Agreement
      or
      the Executive’s performance thereunder, except for claims, demands, actions or
      causes of actions arising out of or relating to (i) the Loans (as defined in
      the
      Management Service Agreement) or any other debt or credit obligations of NMI
      or
      the Executive or their respective affiliates to the Releasees, (ii) acts or
      omissions that only become known to the Company after the date of this Mutual
      Release and that involve intentional gross misconduct with respect to the
      Company, (iii) any claims arising out of actions taken by NMI or the Executive
      after the date of this Mutual Release or (iv) any of the Company’s rights under
      the Management Services Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Section
      4. Due
      Care.
      NMI and
      Executive acknowledge that NMI and Executive have received a copy of this Mutual
      Release prior to its execution and has been advised hereby of their opportunity
      to review and consider this Release for [21
      or 45 days - as applicable under ADEA]
      prior to
      its execution. NMI and Executive are hereby advised and acknowledges that they
      have been advised to consult with an attorney prior to executing this Mutual
      Release. NMI and Executive enter into this Mutual Release having freely and
      knowingly elected, after due consideration, to execute this Release and to
      fulfill the promises set forth herein. This Mutual Release shall be revocable
      by
      NMI and Executive during the 7-day period following its execution, and shall
      not
      become effective or enforceable until the expiration of such 7-day
      period.

    

    Section
      5. Reliance
      by Executive, NMI and Company.
      NMI and
      Executive acknowledge that, in NMI and Executive’s decision to enter into this
      Mutual Release, NMI and Executive have not relied on any representations,
      promises or agreements of any kind, including oral statements by representatives
      of the Company, except as set forth in this Mutual Release. The Company
      acknowledges that, in its decision to enter into this Mutual Release, the
      Company had not relied on any representations, promises or agreements of any
      kind, including oral statements by the Executive, except as set forth in this
      Mutual Release.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This
      MUTUAL RELEASE OF CLAIMS AND COVENANT NOT TO SUE is executed by Executive,
      NMI
      and the Company on _________________.

    
      	 	 	 
	 	
              MDC
                Partners Inc.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

            
	 	Title:

    

    
      	 	 	 
	 	 	 
	 	
              Nadal
                Management, Inc.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name:
	 	Title:

      	 	 	 
	 	 	 
	 	
              Nadal
                Financial Corporation

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name:
	 	Title:

    

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Exhibit
      C to Management Services Agreement

     

    EXCISE
      TAX GROSS UP

    

    A. Anything
      in this Agreement to the contrary notwithstanding and except as set forth below,
      in the event it shall be determined that any Payment would be subject to the
      Excise Tax, then NMI shall be entitled to receive an additional payment (the
      “Gross-Up Payment”) in an amount such that, after payment by NMI of all taxes
      (and any interest or penalties imposed with respect to such taxes), including,
      without limitation, any income taxes (and any interest and penalties imposed
      with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, NMI
      retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
      the Payments. Notwithstanding the foregoing provisions of this Section A of
      Exhibit C, if it shall be determined that NMI is entitled to the Gross-Up
      Payment, but that the Parachute Value of all Payments does not exceed 110%
      of
      the Safe Harbor Amount, then no Gross-Up Payment shall be made to NMI and the
      amounts payable under this Agreement shall be reduced so that the Parachute
      Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The
      reduction of the amounts payable hereunder, if applicable, shall be made by
      first reducing the payments under Section 8(b), unless an alternative method
      of
      reduction is elected by NMI, and in any event shall be made in such a manner
      as
      to maximize the Value of all Payments actually made to NMI. For purposes of
      reducing the Payments to the Safe Harbor Amount, only amounts payable under
      this
      Agreement (and no other Payments) shall be reduced. If the reduction of the
      amount payable under this Agreement would not result in a reduction of the
      Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable
      under the Agreement shall be reduced pursuant to this Section A of Exhibit
      C.

    

    B. Subject
      to the provisions of Section C of Exhibit C, all determinations required to
      be
      made under this Exhibit C, including whether and when a Gross-Up Payment is
      required, the amount of such Gross-Up Payment and the assumptions to be utilized
      in arriving at such determination, shall be made by a nationally recognized
      certified public accounting firm to be designated jointly by the Company and
      NMI
      (the “Accounting Firm”). The Accounting Firm shall provide detailed supporting
      calculations to the Company and NMI within 15 business days of the receipt
      of
      notice from NMI that there has been a Payment or such earlier time as is
      requested by the Company. All fees and expenses of the Accounting Firm shall
      be
      borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
      this Exhibit C, shall be paid by the Company to NMI within 5 days of the receipt
      of the Accounting Firm’s determination. Any determination by the Accounting Firm
      shall be binding upon the Company, NMI and the Executive. As a result of the
      uncertainty in the application of Section 4999 of the Code at the time of the
      initial determination by the Accounting Firm hereunder, it is possible that
      Gross-Up Payments that will not have been made by the Company should have been
      made (the “Underpayment”), consistent with the calculations required to be made
      hereunder. In the event the Company exhausts its remedies pursuant to Section
      C
      of Exhibit C and NMI thereafter is required to make a payment of any Excise
      Tax,
      the Accounting Firm shall determine the amount of the Underpayment that has
      occurred and any such Underpayment shall be promptly paid by the Company to
      or
      for the benefit of NMI .

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    C. NMI
      shall
      notify the Company in writing of any claim by the Internal Revenue Service
      that,
      if successful, would require the payment by the Company of the Gross-Up Payment.
      Such notification shall be given as soon as practicable, but no later than
      10
      business days after NMI is informed in writing of such claim. NMI shall apprise
      the Company of the nature of such claim and the date on which such claim is
      requested to be paid. NMI shall not pay such claim prior to the expiration
      of
      the 30-day period following the date on which NMI gives such notice to the
      Company (or such shorter period ending on the date that any payment of taxes
      with respect to such claim is due). If the Company notifies NMI in writing
      prior
      to the expiration of such period that the Company desires to contest such claim,
      NMI shall:

    

    a. give
      the
      Company any information reasonably requested by the Company relating to such
      claim,

    

    b. take
      such
      action in connection with contesting such claim as the Company shall reasonably
      request in writing from time to time, including, without limitation, accepting
      legal representation with respect to such claim by an attorney reasonably
      selected by the Company,

    

    c. cooperate
      with the Company in good faith in order effectively to contest such claim,
      and

    

    d. permit
      the Company to participate in any proceedings relating to such
      claim;

    

    provided,
      however, that the Company shall bear and pay directly all costs and expenses
      (including additional interest and penalties) incurred in connection with such
      contest, and shall indemnify and hold NMI harmless, on an after-tax basis,
      for
      any Excise Tax or income tax (including interest and penalties) imposed as
      a
      result of such representation and payment of costs and expenses. Without
      limitation on the foregoing provisions of this Section C of Exhibit C, the
      Company shall control all proceedings taken in connection with such contest,
      and, at its sole discretion, may pursue or forgo any and all administrative
      appeals, proceedings, hearings and conferences with the applicable taxing
      authority in respect of such claim and may, at its sole discretion, either
      pay
      the tax claimed to the appropriate taxing authority on behalf of NMI and direct
      NMI to sue for a refund or contest the claim in any permissible manner, and
      NMI
      agrees to prosecute such contest to a determination before any administrative
      tribunal, in a court of initial jurisdiction and in one or more appellate
      courts, as the Company shall determine; provided, however, that, if the Company
      pays such claim and directs NMI to sue for a refund, the Company shall indemnify
      and hold NMI harmless, on an after-tax basis, from any Excise Tax or income
      tax
      (including interest or penalties) imposed with respect to such payment or with
      respect to any imputed income in connection with such payment; and provided,
      further, that any extension of the statute of limitations relating to payment
      of
      taxes for the taxable year of NMI with respect to which such contested amount
      is
      claimed to be due is limited solely to such contested amount. Furthermore,
      the
      Company’s control of the contest shall be limited to issues with respect to
      which the Gross-Up Payment would be payable hereunder, and NMI shall be entitled
      to settle or contest, as the case may be, any other issue raised by the Internal
      Revenue Service or any other taxing authority.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    D. If,
      after
      the receipt by NMI of a Gross-Up Payment or payment by the Company of an amount
      on NMI’s behalf pursuant to Section C of Exhibit C, NMI becomes entitled to
      receive any refund with respect to the Excise Tax to which such Gross-Up Payment
      relates or with respect to such claim, NMI shall (subject to the Company’s
      complying with the requirements of Section C of Exhibit C, if applicable)
      promptly pay to the Company the amount of such refund (together with any
      interest paid or credited thereon after taxes applicable thereto). If, after
      payment by the Company of an amount on NMI’s behalf pursuant to Section C of
      Exhibit C, a determination is made that NMI shall not be entitled to any refund
      with respect to such claim and the Company does not notify NMI in writing of
      its
      intent to contest such denial of refund prior to the expiration of 30 days
      after
      such determination, then the amount of such payment shall offset, to the extent
      thereof, the amount of Gross-Up Payment required to be paid.

    

    E. Notwithstanding
      any other provision of this Exhibit C, the Company may, in its sole discretion,
      withhold and pay over to the Internal Revenue Service or any other applicable
      taxing authority, for the benefit of NMI, all or any portion of any Gross-Up
      Payment, and NMI hereby consents to such withholding.

    

    F. Definitions.
      The following terms shall have the following meanings for purposes of this
      Exhibit C.

    

    (i) “Excise
      Tax” shall mean the excise tax imposed by Section 4999 of the Code, together
      with any interest or penalties imposed with respect to such excise
      tax.

    

    (ii) “Parachute
      Value” of a Payment shall mean the present value as of the date of the change of
      control for purposes of Section 280G of the Code of the portion of such Payment
      that constitutes a “parachute payment” under Section 280G(b)(2), as determined
      by the Accounting Firm for purposes of determining whether and to what extent
      the Excise Tax will apply to such Payment.

    

    (iii) A
      “Payment” shall mean any payment or distribution in the nature of compensation
      (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit
      of
      NMI, whether paid or payable pursuant to this Agreement or
      otherwise.

    

    (iv) The
“Safe
      Harbor Amount” means 2.99 times the “base amount,” within the meaning of Section
      280G(b)(3) of the Code.

     

    (v) “Value”
      of a Payment shall mean the economic present value of a Payment as of the date
      of the change of control for purposes of Section 280G of the Code, as determined
      by the Accounting Firm using the discount rate required by Section 280G(d)(4)
      of
      the Code.

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