10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2010
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission file number: 001-13178

MDC Partners Inc.

(Exact name of registrant as specified in its charter)

Canada	98-0364441
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

45 Hazelton Avenue Toronto, Ontario, Canada	M5R 2E3
(Address of principal executive offices)	(Zip Code)

(416) 960-9000

Registrant’s telephone number, including area code:

950 Third Avenue, New York, New York 10022

(646) 429-1809

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12(b)-2 of the Exchange Act (check one)

Large Accelerated Filer  o	Accelerated Filer  x
Non-Accelerated Filer   o   (Do not check if a smaller reporting company.)	Smaller reporting company  o

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 Yes  o No  x

The numbers of shares outstanding as of April 30, 2010 were: 28,803,791 Class A subordinate voting shares and 2,503 Class B multiple voting shares.

Website Access to Company Reports

MDC Partners Inc.’s internet website address is www.mdc-partners.com. The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act, will be made available free of charge through the Company’s website as soon as reasonably practical after those reports are electronically filed with, or furnished to, the Securities and Exchange Commission.  The information found on, or otherwise accessible through, the Company’s website is not incorporated into, and does not form a part of, this quarterly report or Form 10-Q.

MDC PARTNERS INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2010 and 2009	2
	Condensed Consolidated Balance Sheets as of March 31, 2010 (unaudited) and December 31, 2009	3
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2010 and 2009	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4.	Controls and Procedures	39
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Reserved	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
Signatures		40

Item 1. Financial Statements

MDC PARTNERS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(thousands of United States dollars, except share and per share amounts)

	Three Months Ended March 31,
	2010			2009
Revenue:
Services	$	136,182		$	126,738
Operating Expenses:
Cost of services sold		96,969			85,879
Office and general expenses		34,625			31,152
Depreciation and amortization		5,833			7,593
		137,427			124,624
Operating profit (Loss)		(1,245	)		2,114
Other Income (Expenses):
Other income (expense), net		(613	)		2,629
Interest expense		(7,028	)		(3,761	)
Interest income		21			203
		(7,620	)		(929	)
Income (loss) from continuing operations before income taxes, equity in affiliates		(8,865	)		1,185
Income tax expense		249			615
Income (loss) from continuing operations before equity in affiliates		(9,114	)		570
Equity in earnings (loss) of non-consolidated affiliates		(104	)		93
Income (loss) from continuing operations		(9,218	)		663
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes		—			(252	)
Net income (loss)		(9,218	)		411
Net income attributable to the noncontrolling interests		(968	)		(382	)
Net income (loss) attributable to MDC Partners Inc.	$	(10,186	)	$	29
Income (loss) Per Common Share:
Basic and Diluted:
Income (loss) from continuing operations attributable to MDC Partners Inc. common shareholders	$	(0.37	)	$	0.01
Discontinued operations attributable to MDC Partners Inc. common shareholders		—			(0.01	)
Net income (loss) attributable to MDC Partners Inc. common shareholders	$	(0.37	)	$	0.00
Weighted Average Number of Common Shares Outstanding:
Basic		27,631,903			27,115,751
Diluted		27,631,903			27,115,751
Non cash stock-based compensation expense is included in the following line items above:
Cost of services sold	$	681		$	211
Office and general expenses		2,787			1,686
Total	$	3,468		$	1,897

See notes to the unaudited condensed consolidated financial statements.

2

MDC PARTNERS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(thousands of United States dollars)

	March 31, 2010			December 31, 2009
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	21,247		$	51,926
Accounts receivable, less allowance for doubtful accounts of $2,409 and $2,034		131,944			118,211
Expenditures billable to clients		23,226			24,003
Other current assets		10,706			8,105
Total Current Assets		187,123			202,245
Fixed assets, at cost, less accumulated depreciation of $86,712 and $82,752		36,327			35,375
Investment in affiliates		1,473			1,547
Goodwill		338,142			301,632
Other intangibles assets, net		39,765			34,715
Deferred tax asset		12,625			12,542
Other assets		17,611			16,463
Total Assets	$	633,066		$	604,519
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND EQUITY
Current Liabilities:
Accounts payable	$	69,967		$	77,450
Accruals and other liabilities		65,694			66,967
Advance billings		80,907			65,879
Current portion of long-term debt		1,308			1,456
Current portion of deferred acquisition consideration		21,258			30,645
Total Current Liabilities		239,134			242,397
Revolving credit facility		10,278			—
Long-term debt		216,928			216,490
Long-term portion of deferred acquisition consideration		16,690			—
Other liabilities		8,617			8,707
Deferred tax liabilities		9,005			9,051
Total Liabilities		500,652			476,645
Redeemable Noncontrolling Interests (Note 2)		29,868			33,728
Commitments, contingencies and guarantees (Note 13)
Shareholders’ Equity:
Preferred shares, unlimited authorized, none issued					—
Class A Shares, no par value, unlimited authorized, 27,779,879 and 27,566,815 shares issued in 2010 and 2009		219,992			218,532
Class B Shares, no par value, unlimited authorized, 2,503 shares issued in 2010 and 2009, each convertible into one Class A share		1			1
Additional paid-in capital		7,668			9,174
Accumulated deficit		(141,348	)		(131,160	)
Stock subscription receivable		(217	)		(341	)
Accumulated other comprehensive loss		(4,462	)		(5,880	)
MDC Partners Inc. Shareholders’ Equity		81,634			90,326
Noncontrolling Interests		20,912			3,820
Total Equity		102,546			94,146
Total Liabilities, Redeemable Noncontrolling Interests and Equity	$	633,066		$	604,519

See notes to the unaudited condensed consolidated financial statements.

3

MDC PARTNERS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(thousands of United States dollars)

	Three Months Ended March 31,
	2010			2009
Cash flows from operating activities:
Net income (loss)	$	(9,218	)	$	411
Net income (loss) attributable to the noncontrolling interests		(968	)		(382	)
Net income (loss) attributable to MDC Partners Inc.		(10,186	)		29
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes		—			(252	)
Income (loss) attributable to MDC Partners Inc. from continuing operations		(10,186	)		281
Adjustments to reconcile net income (loss) attributable to MDC Partners Inc. from continuing operations to cash provided by (used in) operating activities
Depreciation		3,695			4,017
Amortization of primarily intangibles		2,138			3,576
Non-cash stock-based compensation		2,911			1,686
Amortization of deferred finance charges and debt discount		651			318
Adjustment to deferred acquisition consideration		334			—
(Gain) loss on disposition of assets		(69	)		11
Deferred income taxes		—			490
Loss (earnings) of non-consolidated affiliates		104			(93	)
Other non-current assets and liabilities		(1,065	)		2,115
Foreign exchange		554			(1,999	)
Changes in working capital:
Accounts receivable		(5,301	)		(9,259	)
Expenditures billable to clients		824			(1,431	)
Prepaid expenses and other current assets		(2,076	)		(256	)
Accounts payable, accruals and other liabilities		(14,660	)		(5,138	)
Advance billings		10,928			6,610
Cash flows used in continuing operating activities		(11,218	)		928
Discontinued operations		—			(368	)
Net cash provided by (used in) operating activities		(11,218	)		560
Cash flows from investing activities:
Capital expenditures		(2,762	)		(830	)
Acquisitions, net of cash acquired		(23,428	)		(3,352	)
Proceeds from sale of assets		44			2
Other investments		(4	)		59
Profit distributions from affiliates		7			—
Cash Flows from continuing investing activities		(26,143	)		(4,121	)
Discontinued operations		—			—
Net cash used in investing activities		(26,143	)		(4,121	)
Cash flows from financing activities:
Proceeds from revolving credit facility		10,278			9,866
Repayment of long-term debt		(222	)		(635	)
Proceeds from stock subscription receivable		124			13
Purchase of treasury shares		(611	)		(320	)
Payment of dividends		(2,781	)		—
Net cash provided by continuing financing activities		6,788			8,924
Discontinued operations		—			—
Net cash provided by financing activities		6,788			8,924
Effect of exchange rate changes on cash and cash equivalents		(106	)		(447	)
Net increase (decrease) in cash and cash equivalents		(30,679	)		4,916
Cash and cash equivalents at beginning of period		51,926			41,331
Cash and cash equivalents at end of period	$	21,247		$	46,247
Supplemental disclosures:
Cash paid to noncontrolling partners	$	2,889		$	3,119
Cash income taxes paid (refund received)	$	645		$	(66	)
Cash interest paid	$	120		$	2,738
Dividends payable	$	208		$	—
Non-cash transactions:
Capital leases	$	148		$	187

See notes to the unaudited condensed consolidated financial statements.

4

MDC PARTNERS INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(thousands of United States dollars, unless otherwise stated)

1.      Basis of Presentation

MDC Partners Inc. (the “Company”) has prepared the unaudited condensed consolidated interim financial statements included herein pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States of America (“US GAAP”) have been condensed or omitted pursuant to these rules.

The accompanying financial statements reflect all adjustments, consisting of normally recurring accruals, which in the opinion of management are necessary for a fair presentation, in all material respects, of the information contained therein. Results of operations for interim periods are not necessarily indicative of annual results.

These statements should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 2009.

2.             Significant Accounting Policies

The Company’s significant accounting policies are summarized as follows:

Principles of Consolidation . The accompanying condensed consolidated financial statements include the accounts of MDC Partners Inc. and its domestic and international controlled subsidiaries that are not considered variable interest entities, and variable interest entities for which the Company is the primary beneficiary. Intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities including goodwill, intangible assets, valuation allowances for receivables and deferred tax assets, and the reported amounts of revenue and expenses during the reporting period. The estimates are evaluated on an ongoing basis and estimates are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Concentration of Credit Risk .. The Company provides marketing communications services to clients who operate in most industry sectors. Credit is granted to qualified clients in the ordinary course of business. Due to the diversified nature of the Company’s client base, the Company does not believe that it is exposed to a concentration of credit risk; however, one client accounted for 12% of the Company’s consolidated accounts receivable at March 31, 2010, and no client accounted for more than 10% of the Company’s consolidated accounts receivable at December 31, 2009. Another client accounted for 11% and 19% of revenue for the three months ended March 31, 2010 and March 31, 2009, respectively.

Cash and Cash Equivalents. The Company’s cash equivalents are primarily comprised of investments in overnight interest-bearing deposits, commercial paper and money market instruments and other short-term investments with original maturity dates of three months or less at the time of purchase. The Company has a concentration risk in that there are cash deposits in excess of federally insured amounts. Included in cash and cash equivalents at March 31, 2010 and December 31, 2009, is approximately $51 and $67, respectively, of cash restricted as to withdrawal pursuant to a collateral agreement and a customer’s contractual requirements.

Business Combinations.   Valuation of acquired companies are based on a number of factors, including specialized know-how, reputation, competitive position and service offerings. Our acquisition strategy has been focused on acquiring the expertise of an assembled workforce in order to continue to build upon the core

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TABLE OF CONTENTS

MDC PARTNERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Thousands of United States Dollars, Unless Otherwise Stated Except Share and per Share Amounts)

2. Significant Accounting Policies  – (continued)

capabilities of our various strategic business platforms to better serve our clients. Consistent with our acquisition strategy and past practice of acquiring a majority ownership position, most acquisitions completed in 2010 and 2009 included an initial payment at the time of closing and provide for future additional contingent purchase price payments. Contingent payments for these transactions, as well as certain acquisitions completed in prior years, are derived using the performance of the acquired entity and are based on pre-determined formulas. Contingent purchase price obligations for acquisitions completed prior to January 1, 2009 are accrued when the contingency is resolved and payment is certain. Contingent purchase price obligations related to acquisitions completed subsequent to December 31, 2008 are recorded as liabilities at estimated value and are remeasured at each reporting period and changes in estimated value are recorded in results of operations. For the three months ended March 31, 2010 and 2009, $334 and nil, respectively, related to changes in estimated value, have been charged to operations. In addition, certain acquisitions also include put/call obligations for additional equity ownership interests. The estimated value of these interests are recorded as Redeemable Noncontrolling Interests. As of January 1, 2009, the Company expenses acquisition related costs in accordance with the Accounting Standard’s Codification’s new guidance on acquisition accounting. For the three months ended March 31, 2010 and 2009, $399 and nil, respectively, of acquisition related costs have been charged to operations.

For each of our acquisitions, we undertake a detailed review to identify other intangible assets and a valuation is performed for all such identified assets. We use several market participant measurements to determine estimated value. This approach includes consideration of similar and recent transactions, as well as utilizing discounted expected cash flow methodologies. Like most service businesses, a substantial portion of the intangible asset value that we acquire is the specialized know-how of the workforce, which is treated as part of goodwill and is not required to be valued separately. The majority of the value of the identifiable intangible assets that we acquire is derived from customer relationships, including the related customer contracts, as well as trade names. In executing our acquisition strategy, one of the primary drivers in identifying and executing a specific transaction is the existence of, or the ability to, expand our existing client relationships. The expected benefits of our acquisitions are typically shared across multiple agencies and regions.

Redeemable Noncontrolling Interest .  The minority interest shareholders of certain subsidiaries have the right to require the Company to acquire their ownership interest under certain circumstances pursuant to a contractual arrangement and the Company has similar call options under the same contractual terms. The amount of consideration under the put and call rights is not a fixed amount, but rather is dependent upon various valuation formulas and on future events, such as the average earnings of the relevant subsidiary through the date of exercise, the growth rate of the earnings of the relevant subsidiary through the date of exercise, etc. as described in Note 13.

The Company has recorded its put options as mezzanine equity at their current estimated redemption amounts. The Company accounts for the put options with a charge to noncontrolling interests to reflect the excess, if any, of the estimated exercise price over the estimated fair value of the noncontrolling interest shares at the date of the option being exercised. Changes in the estimated redemption amounts of the put options are adjusted at each reporting period with a corresponding adjustment to equity. These adjustments will not impact the calculation of earnings per share. 

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TABLE OF CONTENTS

MDC PARTNERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Thousands of United States Dollars, Unless Otherwise Stated Except Share and per Share Amounts)

2. Significant Accounting Policies  – (continued)

The following table presents changes in Redeemable Noncontrolling Interests.

	Three Months Ended March 31, 2010
Beginning Balance as of January 1,	$	33,728
Reclassification related to Redeemable Noncontrolling Interests		—
Redemptions		(1,285	)
Granted		1,276
Changes in redemption value		(4,233	)
Other		—
Currency Translation Adjustments		382
Ending Balance as of March 31,	$	29,868

Revenue Recognition

The Company’s revenue recognition policies are as required by the Revenue Recognition topics of the FASB Accounting Standards Codification, and accordingly, revenue is generally recognized as services are provided or upon delivery of the products when ownership and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the resulting receivable is reasonably assured. The Company follows the Revenue Arrangements with Multiple Deliverables topic of the FASB Accounting Standards Codification issued. This topic addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities and how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting. The Company recognizes revenue based on the contracted value of each multiple deliverable when delivered. The Company also follows the topic of the FASB Accounting Standards Codification Reporting Revenue Gross as a Principal versus Net as an Agent. This Issue summarized the EITF’s views on when revenue should be recorded at the gross amount billed because it has earned revenue from the sale of goods or services, or the net amount retained because it has earned a fee or commission. The Company also follows Income Statement Characterization of Reimbursements Received for Out-of-Pocket Expenses Incurred, for reimbursements received for out-of-pocket expenses. This issue summarized the EITF’s views that reimbursements received for out-of-pocket expenses incurred should be characterized in the income statement as revenue. Accordingly, the Company has included in revenue such reimbursed expenses.

The Company earns revenue from agency arrangements in the form of retainer fees or commissions; from short-term project arrangements in the form of fixed fees or per diem fees for services; and from incentives or bonuses.

Non refundable retainer fees are generally recognized on a straight line basis over the term of the specific customer contract. Commission revenue is earned and recognized upon the placement of advertisements in various media when the Company has no further performance obligations. Fixed fees for services are recognized upon completion of the earnings process and acceptance by the client. Per diem fees are recognized upon the performance of the Company’s services. In addition, for certain service transactions, which require delivery of a number of service acts, the Company uses the Proportional Performance model, which generally results in revenue being recognized based on the straight-line method due to the acts being non-similar and there being insufficient evidence of fair value for each service provided.

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TABLE OF CONTENTS

MDC PARTNERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Thousands of United States Dollars, Unless Otherwise Stated Except Share and per Share Amounts)

2. Significant Accounting Policies  – (continued)

Fees billed to clients in excess of fees recognized as revenue are classified as Advanced Billings.

A small portion of the Company’s contractual arrangements with customers includes performance incentive provisions, which allows the Company to earn additional revenues as a result of its performance relative to both quantitative and qualitative goals. The Company recognizes the incentive portion of revenue under these arrangements when specific quantitative goals are achieved, or when the company’s clients determine performance against qualitative goals has been achieved. In all circumstances, revenue is only recognized when collection is reasonably assured. The Company records revenue net of sales and other taxes due to be collected and remitted to governmental authorities.

Interest Expense.  Interest expense primarily consists of the cost of borrowing on the revolving credit facility and the 11% Senior Notes. The Company uses the effective interest method to amortize the original issue discount on the 11% Senior Notes. At March 31, 2010 and December 31, 2009, $261 and $204 was amortized, respectively. The Company amortizes deferred financing costs straight line over the life of the revolving credit facility and the 11% Senior Notes. The total net deferred financing costs, included in Other Assets on the balance sheet, as of March 31, 2010 and December 31, 2009 were $9,405 and $9,790, net of accumulated amortization of $591 and $295, respectively.

Stock-Based Compensation.   Under the fair value method, compensation cost is measured at fair value at the date of grant and is expensed over the service period, that is the award’s vesting period. When awards are exercised, share capital is credited by the sum of the consideration paid together with the related portion previously credited to additional paid-in capital when compensation costs were charged against income or acquisition consideration.

The Company uses its historical volatility derived over the expected term of the award, to determine the volatility factor used in determining the fair value of the award. The Company uses the “simplified” method to determine the term of the award due to the fact that historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term.

Stock-based awards that are settled in cash or may be settled in cash at the option of employees are recorded as liabilities. The measurement of the liability and compensation cost for these awards is based on the fair value of the award, and is recorded into operating income over the service period, that is the vesting period of the award. Changes in the Company’s payment obligation prior to the settlement date are recorded as compensation cost in operating profit in the period of the change. The final payment amount for such awards is established on the date of the exercise of the award by the employee.

Stock-based awards that are settled in cash or equity at the option of the Company are recorded at fair value on the date of grant and recorded as additional paid-in capital. The fair value measurement of the compensation cost for these awards is based on using the Black-Scholes option pricing-model and is recorded in operating income over the service period, that is the vesting period of the award.

8

It is the Company’s policy for issuing shares upon the exercise of an equity incentive award to verify the amount of shares to be issued, as well as the amount of proceeds to be collected (if any) and delivery of new shares to the exercising party.

The Company has adopted the straight-line attribution method for determining the compensation cost to be recorded during each accounting period. However, awards based on performance conditions are recorded as compensation expense when the performance conditions are expected to be met.

The Company treats benefits paid by shareholders to employees as a stock based compensation charge with a corresponding credit to additional paid-in-capital.

During the three months ended March 31, 2010, the Company issued 912,815 restricted stock units and restricted stock shares  (“RSUs”) to its employees and directors.  The RSUs have an aggregate grant date fair value of $8,070 and generally vest on the third anniversary date with certain awards subjected to accelerated vesting based on the financial performance of the Company.

For the three months ended March 31, 2010, the Company has recorded a $470 charge relating to these equity incentive grants.

A total of 1,023,912 Class A shares of restricted stock, granted to employees as equity incentive awards, are included in the Company’s calculation of Class A shares outstanding as of March 31, 2010.

9

3 .            Income (loss) Per Common Share

The following table sets forth the computation of basic and diluted loss per common share from continuing operations.

	Three Months Ended March 31,
	2010			2009
Numerator
Numerator for basic income (loss) per common share – income (loss) from continuing operations	$	(9,218	)	$	663
Net income attributable to the noncontrolling interests		(968	)		(382	)
Income (loss) attributable to MDC Partners Inc. common shareholders from continuing operations		(10,186	)		281
Effect of dilutive securities		—			—
Numerator for diluted income (loss) per common share – income (loss) attributable to MDC Partners Inc. common shareholders from continuing operations	$	(10,186	)	$	281
Denominator
Denominator for basic income (loss) per common share - weighted average common shares		27,631,903			27,115,751
Effect of dilutive securities		—			—
Denominator for diluted income (loss) per common share - adjusted weighted shares		27,631,903			27,115,751
Basic income (loss) per common share from continuing operations	$	(0.37	)	$	0.01
Diluted income (loss) per common share from continuing operations	$	(0.37	)	$	0.01

During the three months ended March 31, 2010, options and other rights to purchase 5,845,769 shares of common stock, which includes 1,023,912 shares of non-vested restricted stock, were outstanding but were not included in the computation of diluted loss per common share because their effect would be antidilutive.

During the three months ended March 31, 2009, the 8% convertible debentures, options and other rights to purchase 9,067,422 shares of common stock, which includes 616,632 shares of non-vested restricted stock, were outstanding but were not included in the computation of diluted income per common share because their effect would be antidilutive.

4.      Acquisitions

First Quarter 2010 Acquisitions

Effective March 1, 2010, the Company, through a wholly-owned subsidiary, purchased 60% of the total outstanding membership interests in Team Holdings LLC (“Team”), which expands the Company’s experiential marketing capabilities.  At closing, the Company paid cash of $11,000 plus additional deferred acquisition consideration, with a current estimated present value of $12,656, and the Company paid a working capital true-up estimated at an additional $253 at March 31, 2010.  An initial estimated allocation of the excess purchase consideration of this acquisition to the fair value of the net assets acquired resulted in identifiable intangibles of $5,220 (consisting of primarily customer lists and a covenant not to compete) and goodwill of $32,514 representing the value of the assembled workforce.  The fair value of the noncontrolling interest not acquired at the acquisition date was $15,771 based in the Company’s evaluation of the Company being acquired and the purchase price paid by the Company.  The identified intangibles will be amortized up to a five-year period in a manner represented by the pattern in which the economic benefits of the customer contracts/relationships are realized.  The intangibles and goodwill are tax deductible.

The actual adjustments that the Company will ultimately make in finalizing the allocation of the purchase price of Team to the fair value of the net assets acquired at March 1, 2010 will depend on a number of factors, including additional information available at such time, changes in market values and changes in Team’s operating results between the date of these unaudited consolidated financial statements and the effective date of the acquisition.

During the three months ended March 31, 2010, the Company completed a number of acquisitions and step-ups in ownership. The Company purchased a 75% equity interest in Communifx Partners LLC (“Communifx”), substantially all of the assets of Plaid Inc. (“Plaid”), an additional 15% equity interest in Fletcher Martin, LLC (“Fletcher Martin”), an additional 49% equity interest in Trend Core, LLC (“Trend Core”), and an additional 1% equity interest in HL Group Partners, LLC (“HL Group”). Communifx builds and manages large-scale customer database solutions to enable the planning, execution, and measurement of multi-channel marketing and advertising programs.  Plaid is a marketing services business with a concentration in the digital communication and social media arena.  The Company purchased the additional equity interests in Fletcher Martin and HL Group pursuant to the exercise of outstanding puts. The purchase price paid for these acquisitions and step-ups consisted of aggregate cash payments of $4,821 plus additional contingent payments of $580 that are based on actual results from 2010 to 2015 with final payments due in 2016. An allocation of the excess purchase consideration of these acquisitions to the fair value of the net assets acquired resulted in identifiable intangibles of $1,851 consisting primarily of customer lists and a covenant not to compete, and goodwill of $2,426 representing the value of the assembled workforce.  The identified intangibles will be amortized up to a five-year period in a manner represented by the pattern in which the economic benefits of the customer contracts/relationships are realized.  In addition, the Company has recorded $710, the present value of redeemable noncontrolling interests in relation to Communifx.  The Communifx acquisition has put/call rights that could increase the Company’s ownership to 100% in 2013.   In relation to the step up acquisitions, the Company recorded an entry to reduce Redeemable Noncontrolling Interests by $1,116.  The amount paid to the employee over fair value, $608, was recorded as a stock-based compensation charge.  The Company recorded a reduction of additional paid-in capital of $1,029 representing the difference between the fair value of the shares and the value of the Redeemable Noncontrolling Interests.  The amounts paid and to be paid will be tax deductible.

10

2009 Acquisitions

In December 2009, the Company paid an additional $38,974 pursuant to the CPB purchase agreement originally entered into in November 2008 with the founders of Crispin Porter & Bogusky LLC (“CPB”). In connection with this transaction, the Company recorded $14,067 as deferred acquisition consideration, $1,450 was paid in January 2010, $433 was reversed as an adjustment and the balance was paid in April 2010. This purchase price payment was pursuant to an accelerated exercise of a call option that was exercised by the Company in November 2008 (the Company increased its ownership from 77% to 94%). Because CPB was originally consolidated as a Variable Interest Entity, the Company reduced Redeemable Noncontrolling Interests by $17,809. The Company recorded additional goodwill of $31,253 and identifiable intangible backlog of $3,979. The amount recorded related to the 17% step up from November 2008. The backlog was amortized over one month. In addition, the Company recorded a stock-based charge of $3,074 for amounts paid by the former shareholder to CPB employees. The goodwill will be tax deductible.

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MDC PARTNERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Thousands of United States Dollars, Unless Otherwise Stated Except Share and per Share Amounts)

4. Acquisitions  – (continued)

On December 31, 2009, the Company acquired an additional 3% interest in VitroRobertson increasing its holdings from 79% to 82%. The purchase price totaled $845 and was paid in cash. The Company recorded an entry to reduce Redeemable Noncontrolling Interests by $266. The amount paid to the employee over fair value, $370, was recorded as a stock-based compensation charge. The Company recorded a reduction of additional paid-in capital of $209 representing the difference between the fair value of the shares and the value of the Redeemable Noncontrolling Interests. As this purchase was pursuant to the exercise of an existing put/call option, no additional intangibles have been recorded. The goodwill will be tax deductible.

On December 1, 2009, the Company agreed to make an early payment to KBP Management Partners LLC originally due in March 2010 pursuant to the purchase agreement entered into in November 2007. The additional payment totaled $14,870, of which $10,140 was paid in cash in December 2009, $4,215 was paid in March 2010 with the balance due in March 2011, recorded as deferred acquisition consideration. This additional payment was accounted for as additional goodwill. In addition, pursuant to an existing phantom stock arrangement, a stock-based compensation charge of $3,028 has been recorded for amounts paid by KBP Management Partners to phantom equity holders. The goodwill will be tax deductible.

On October 5, 2009, the Company purchased the remaining 6% outstanding interest in CPB for an estimated fixed and contingent purchase price. The estimated purchase price of $9,818 is included in deferred acquisition consideration and includes $518 of fixed payments to be paid in 2013. The Company recorded a reduction of $8,596 to Redeemable Noncontrolling Interests and $704 to additional paid in capital. The fixed payments of $518 are allocated to identifiable intangibles and will be amortized over three years.

On August 31, 2009, the Company, through HL Group, acquired a 51% interest in Attention Partners LLC (“Attention”), a social media agency that further expands HL Group’s business capabilities. At closing, the HL Group paid $1,000 and made a capital contribution of $400 to Attention. In addition, HL Group recorded estimated contingent payments totaling $1,313, of which $1,022 was paid in cash in March 2010 with the balance due in 2010 as deferred acquisition consideration. The allocation of the excess purchase consideration of this acquisition to the fair value of the net assets acquired resulted in identifiable intangibles of $544 (consisting primarily of customer lists and a covenant not to compete) and goodwill of $3,057 representing the value of the assembled workforce. The fair value of the noncontrolling interests not acquired at the acquisition date was $2,431 based on the Company’s evaluation of the Company being acquired, the purchase paid by the Company. The identified intangibles will be amortized up to a three-year period in a manner represented by the pattern in which the economic benefits of the customer contracts/relationships are realized. The intangibles and goodwill are tax deductible.

On July 1, 2009, the Company, through Crispin Porter & Bogusky LLC (“CPB”), acquired 100% of the preferred shares and 52% of the common shares of Crispin Porter & Bogusky Europe AB (formerly known as “daddy”), a digital agency based in Sweden that has created a foothold in Europe for CPB. At closing, CPB paid $3,052 plus an additional $50 deferred payment. Also in December 2009, CPB called an additional 24% and made a payment of 80% of the purchase price of $188. An additional amount of $50 is recorded as deferred acquisition consideration. The Company has additional calls and the noncontrolling owners have reciprocal puts on the remaining 24% of the common shares, which are exercisable beginning January 2012. The current estimated cost of these puts and calls is approximately $6,600 and has been recorded as Redeemable Noncontrolling Interests. The allocation of the excess purchase consideration of this acquisition to the fair value of the net assets acquired resulted in identifiable intangibles of $650 (consisting primarily of customer lists and a covenant not to compete) and goodwill of $8,533 representing the value of the assembled workforce. The identified intangibles will be amortized up to a three-year period in a manner represented by the pattern in which the economic benefits of the customer contracts/relationships are realized. The intangibles and goodwill are not tax deductible. Accordingly, CPB recorded a deferred tax liability of $221 representing the future tax benefits relating to the amortization of the identified intangibles.

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MDC PARTNERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Thousands of United States Dollars, Unless Otherwise Stated Except Share and per Share Amounts)

4. Acquisitions  – (continued)

Effective January 22, 2009, the Company acquired an additional 8.9% of equity interests in HL Group, thereby increasing MDC’s ownership to 64.9%. The purchase price totaled $1,100 and was paid in cash at closing. The Company recorded an entry to reduce Redeemable Noncontrolling Interests, as this purchase was pursuant to the early exercise of an existing put/call option. Accordingly, no additional intangibles have been recorded. However, the amount of the purchase price will be tax deductible.

Pro forma Information

The following unaudited pro forma results of operations of the Company for the three months ended March 31, 2010 and 2009 assume that the acquisition of the operating assets of Team acquired as of the beginning of each year. These unaudited pro forma results are not necessarily indicative of either the actual results of operations that would have been achieved had the companies been combined during these periods, or are they necessarily indicative of future results of operations.

	Three Months Ended March 31,
	2010			2009
Revenues	$	142,818		$	137,009
Net loss attributable to MDC Partners Inc.	$	(10,653	)	$	(125	)
Loss per common share:
Basic – net loss attributable to MDC Partners Inc.	$	(0.39	)	$	(0.00	)
Diluted – net loss attributable to MDC Partners Inc.	$	(0.39	)	$	(0.00	)

Net Income Attributable to MDC Partners Inc. and

Transfers (to) from the Noncontrolling Interest

	For the Three Months Ended March 31, 2010
Net Loss attributable to MDC Partners Inc.	$	(10,186	)
Transfers (to) from the noncontrolling interest
Decrease in MDC Partners Inc. paid-in capital for purchase of equity interests in excess of Redeemable Noncontrolling Interests		(1,639	)
Decrease in MDC Partners Inc. paid-in-capital from issuance of profits interests		(160	)
Net transfers (to) from noncontrolling interest		(1,799	)
Change from net income attributable to MDC Partners Inc. and transfers (to) from noncontrolling interest	$	(11,985	)

5.       Accrued and Other Liabilities

At March 31, 2010 and December 31, 2009, accrued and other liabilities included amounts due to noncontrolling interest holders, for their share of profits, which will be distributed within the next twelve months of $3,355 and $4,058, respectively.

6.       Discontinued Operations

In December 2008, the Company entered into negotiations to sell certain remaining assets in Bratskeir to management.  This transaction was completed in April 2009.  As a result of this transaction, the Company has classified this entity’s results as discontinued operations.  Bratskeir’s results of operations, net of income tax benefits, for the three months ended March 31, 2009 was a loss of $252.

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Included in discontinued operations in the Company’s consolidated statements of operations for the three months ended March 31, were the following:

	Three Months Ended March 31,
	2009
Revenue	$	481
Operating loss	$	383
Other expense	$	—
Net loss from discontinued operations attributable to MDC Partners Inc., net of taxes	$	252

7.       Comprehensive Loss

Total comprehensive loss and its components were:

	Three Months Ended March 31,
	2010			2009
Net income (loss) for the period	$	(9,218	)	$	411
Other comprehensive income, net of tax:
Foreign currency cumulative translation adjustment		1,416			(1,834	)
Comprehensive loss		(7,802	)		(1,423	)
Comprehensive income (loss) attributable to the noncontrolling interest		(966	)		(376	)
Comprehensive loss attributable to MDC Partners Inc.	$	(8,768	)	$	(1,799	)

8.       Short-Term Debt, Long-Term Debt and Convertible Debentures

Debt consists of:

	March 31, 2010			December 31, 2009
Revolving credit facility	$	10,278		$	—
11% senior notes due 2016		225,000			225,000
Original issue discount		(10,030	)		(10,291	)
Notes payable and other bank loans		1,800			1,800
		227,048			216,509
Obligations under capital leases		1,466			1,437
		228,514			217,946
Less:
Current portions		1,308			1,456
Long term portion	$	227,206		$	216,490

MDC Financing Agreement and Senior Notes

Issuance of 11% Senior Notes

On October 23, 2009, the Company and its wholly-owned subsidiaries, as guarantors, issued and sold $225,000 aggregate principal amount of 11% Senior Notes due 2016 (the “11% Notes”). The 11% Notes bear interest at a rate of 11% per annum, accruing from October 23, 2009. Interest is payable semiannually in arrears in cash on May 1 and November 1 of each year, beginning on May 1, 2010. The 11% Notes will mature on November 1, 2016, unless earlier redeemed or repurchased. The Company received net proceeds before expenses of $208,881, which included an original issue discount of approximately 4.7% or $10,494, and underwriter fees of $5,624. The 11% Notes were sold in a private placement in reliance on exemptions from registration under the Securities Act of 1933, as amended. The Company used the net proceeds of this offering to repay the outstanding balance and terminate its prior Fortress Financing Agreement, and redeemed its outstanding 8% C$45,000 convertible debentures on November 26, 2009.

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The Company may, at its option, redeem the 11% Notes in whole at any time or in part, on and after November 1, 2013 at a redemption price of 105.500% of the principal amount thereof. If redeemed during the twelve-month period beginning on November 1, 2014, at a redemption price of 102.750% of the principal amount thereof or if redeemed during the twelve-month period beginning on or after November 1, 2015 at a redemption price of 100% of the principal amount thereof. (Prior to November 1, 2013, the Company may, at its option, redeem some or all of the 11% Notes at a price equal to 100% of the principal amount of the Notes plus a “make whole” premium and accrued and unpaid interest. The Company may also redeem, at its option, prior to November 1, 2012, up to 35% of the 11% Notes with the proceeds from one or more equity offerings at a redemption price of 11% of the principal amount thereof. If the Company experiences certain kinds of changes of control (as defined in the Indenture), holders of the 11% Notes may require the Company to repurchase any 11% Notes held by them at a price equal to 101% of the principal amount of the 11% Notes plus accrued and unpaid interest.  The indenture governing the 11% Notes contains certain events of default and restrictive covenants which are customary with respect to non-investment grade debt securities, including limitations on the incurrence of additional indebtedness, dividends, sales of assets and transactions with affiliates.

In connection with these transactions, the Company wrote-off $323 of deferred financing costs relating to its prior convertible debentures in December 2009.

The fair value for the 11% Senior Notes was $245,250 as of March 31, 2010.

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MDC PARTNERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Thousands of United States Dollars, Unless Otherwise Stated Except Share and per Share Amounts)

8. Bank Debt, Long-Term Debt and Convertible Notes  – (continued)

New Credit Facility

On October 23, 2009, the Company and its subsidiaries entered into a new $75,000 five year senior secured revolving credit facility (the “WF Credit Agreement”) with Wells Fargo Foothill, LLC, as agent, and the lenders from time to time party thereto. The WF Credit Agreement replaced the Company’s existing $185,000 senior secured financing agreement with Fortress Credit Corp., as collateral agent, and Wells Fargo Foothill, Inc., as administrative agent. Advances under the WF Credit Agreement bear interest as follows: (a)(i) LIBOR Rate Loans bear interest at the LIBOR Rate and (ii) Base Rate Loans bear interest at the Base Rate, plus (b) an applicable margin. The initial applicable margin for borrowing is 3.00% in the case of Base Rate Loans and 3.25% in the case of LIBOR Rate Loans. The applicable margin may be reduced subject to the Company achieving certain trailing twelve month earning levels, as defined. In addition to paying interest on outstanding principal under the WF Credit Agreement, the Company is required to pay an unused revolver fee to the lender under the WF Credit Agreement in respect of unused commitments thereunder.

The WF Credit Agreement is guaranteed by all of the Company’s present and future subsidiaries, other than immaterial subsidiaries (as defined) and is secured by all of the assets of the Company. The WF Credit Agreement includes covenants that, among other things, restrict the Company’s ability and the ability of its subsidiaries to incur or guarantee additional indebtedness; pay dividends on or redeem or repurchase the capital stock of MDC; make certain types of investments; impose limitations on dividends or other amounts from the Company’s subsidiaries; incur certain liens, sell or otherwise dispose of certain assets; enter into transactions with affiliates; enter into sale and leaseback transactions; and consolidate or merge with or into, or sell substantially all of the Company’s assets to, another person. These covenants are subject to a number of important limitations and exceptions. The WF Credit Agreement also contains financial covenants, including a senior leverage ratio, a fixed charge coverage ratio and a minimum earnings level, as defined.

In connection with these transactions, the Company incurred a termination fee of $1,850 and wrote-off $2,240 of deferred financing costs relating to its prior Fortress Financing Agreement in December 2009.

The Company is currently in compliance with all of the terms and conditions of its WF Credit Agreement, and management believes, based on its current financial projections, that the Company will be in compliance with the covenants over the next twelve months.  At March 31, 2010, the weighted average interest rate was 6.3%.

Prior Financing Agreement

The Prior Fortress Financing Agreement consisted of a $55,000 revolving credit facility, a $60,000 term loan and a $70,000 delayed draw term loan. Interest payable under the Financing Agreement was as follows: (a) LIBOR Rate Loans bear interest at applicable interbank rates and Reference Rate Loans bear interest at the rate of interest publicly announced by the Reference Bank in New York, New York, plus (b) a percentage spread ranging from 0% to a maximum of 4.75% depending on the type of loan and the Company’s Senior Leverage Ratio.

Effective October 23, 2009, the Company repaid all outstanding amounts under the Fortress Financing Agreement.

8% Convertible Unsecured Subordinated Debentures

On June 28, 2005, the Company completed an offering in Canada of convertible unsecured subordinated debentures amounting to $36,723 (C$45,000) (the “Debentures”). The Debentures bore interest at an annual rate of 8.00% payable semi-annually, in arrears, on June 30 and December 31 of each year.

The Company repaid the Debentures on November 26, 2009.

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9. Total Equity  

During the three months ended March 31, 2010, Class A share capital increased by $1,460, as the Company issued 241,866 shares related to vested restricted stock, and 31,965 shares related to the exercise of outstanding stock appreciation rights.  During the three months ended March 31, 2010, “Additional paid-in capital” decreased by $2,070 related to the vested restricted stock and stock appreciation rights, and $1,824 related to changes in ownership not resulting in change of control, offset by $2,787 related to an increase from stock-based compensation that was expensed during the same period, and by $2,586 related to changes in put options (Note 2 and Note 13).

In March 2010, the Company purchased and retired 60,767 Class A shares for $611 from employees in connection with the required tax withholding resulting from the vesting of shares of restricted stock and stock appreciation rights.

Total equity increased $8,400, which is comprised of a $17,090 increase in noncontrolling interests related to acquisitions, changes in put options of $2,586, a decrease in accumulated other comprehensive loss of $1,418, and an increase in stock-based compensation of $2,787, offset in part by a reduction of subscriptions receivable of $124, a net loss attributable to MDC Partners of $10,186, dividends accrued and paid of $2,989, $1,824 related to changes in ownership not resulting in change of control, and $611 of treasury stock purchases.

10. Fair Value Measurements

Effective January 1, 2008, the Company adopted guidance regarding accounting for Fair Value Measurements, for financial assets and liabilities. This guidance defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. The statement indicates, among other things, that a fair value measurement assumes a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.

In order to increase consistency and comparability in fair value measurements, the guidance establishes a hierarchy for observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

• Level 1:   Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

• Level 2:   Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

• Level 3:   Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

On a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. Measurements based on undiscounted cash flows are considered to be level 3 inputs. During the fourth quarter of each year, the Company evaluates goodwill and indefinite-lived intangibles for impairment at the reporting unit level. For each acquisition, the Company performed a detailed review to identify intangible assets and a valuation is performed for all such identified assets. The Company used several market participant measurements to determine estimated value. This approach includes consideration of similar and recent transactions, as well as utilizing discounted expected cash flow methodologies. The amounts allocated to assets acquired and liabilities assumed in the acquisitions were determined using level 3 inputs. Fair value for property and equipment was based on other observable transactions for similar property and equipment. Accounts receivable represents the best estimate of balances that will ultimately be collected, which is based in part on allowance for doubtful accounts reserve criteria and an evaluation of the specific receivable balances.

11. Other Income (Expense)         

	Three Months Ended March 31,
	2010			2009
Other income (expense)	$	(6	)	$	33
Foreign currency transaction gain (loss)		(676	)		2,607
Gain (loss) on sale of assets		69			(11	)
	$	(613	)	$	2,629

12. Segmented Information

As a result of changing client demand and the Company’s focus on driving return on marketing investment, the Company changed its segment reporting to conform it more closely with how the Chief Operating Decision Maker (“CODM”) and management are building and managing the Company’s business segments. This will simplify the Company’s financial reporting and make its results more consistent with the current manner of how the CODM and the Board of Directors view the business. The Company is focused on expanding its capabilities in database marketing and data analytics in order to position the Company for future business development efforts and revenue growth.

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TABLE OF CONTENTS

MDC PARTNERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Thousands of United States Dollars, Unless Otherwise Stated Except Share and per Share Amounts)

12. Segmented Information

 – (continued)

In order to position this strategic focus along the lines of how the CODM and management will base their business decisions, the Company has now reorganized its segment reporting. Decisions regarding allocation of resources are made and will be made based not only on the individual operating results of the subsidiaries but also on the overall performance of the reportable segments. These reportable segments are the aggregation of various reporting segments. The Company changed to the current presentation during the fourth quarter of 2009 and all prior periods have been recast.

The Company reports in two segments plus corporate. The segments are as follows:

• The Strategic Marketing Services segment includes Crispin Porter & Bogusky and kirshenbaum bond senecal + partners among others. This segment consists of integrated marketing consulting services firms that offer a full complement of marketing consulting services including advertising and media, marketing communications including direct marketing, public relations, corporate communications, market research, corporate identity and branding, interactive marketing and sales promotion. Each of the entities within the Strategic Marketing Services Group share similar economic characteristics, specifically related to the nature of their respective services, the manner in which the services are provided and the similarity of their respective customers. Due to the similarities in these businesses, they exhibit similar long term financial performance and have been aggregated together.

• The Performance Marketing Services segment includes our firms that provide consumer insights to satisfy the growing need for targetable, measurable solutions or cost effective means of driving return on marketing investment. These services interface directly with the consumer of a client’s product or service. Such services include the design, development, research and implementation of consumer service and direct marketing initiatives. Each of the entities within the Performance Marketing Services Group share similar economic characteristics specifically related to the nature of their respective services, the manner in which the services are provided, and the similarity of their respective customers. Due to the similarities in these businesses, the services provided to the customer exhibit similar long term financial performance and have been aggregated together.

The significant accounting polices of these segments are the same as those described in the summary of significant accounting policies included in the notes to the consolidated financial statements. The Company continues to evaluate its Corporate Group and the services provided by the Corporate Group to the operating segments. The Company has determined that additional amounts should be allocated to the operating segments based on additional services provided. The Company will continue to evaluate the services and amount of time spent directly on the operating segments business operations, and adjust accordingly.

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The significant accounting policies of these segments are the same as those described in the summary of significant accounting policies included in the notes to the consolidated financial statements.

Summary financial information concerning the Company’s operating segments is shown in the following tables:

Three Months Ended March 31, 2010

(thousands of United States dollars)

	Strategic Marketing Services			Performance Marketing Services			Corporate			Total
Revenue	$	91,525		$	44,657		$	—		$	136,182
Cost of services sold		61,613			35,356			—			96,969
Office and general expenses		20,328			9,514			4,783			34,625
Depreciation and amortization		3,301			2,439			93			5,833
Operating Profit/(Loss)		6,283			(2,652	)		(4,876	)		(1,245	)
Other Income (Expense):
Other expense, net											(613	)
Interest expense, net											(7,007	)
Loss from continuing operations before income taxes, equity in affiliates											(8,865	)
Income tax expense											249
Loss from continuing operations before equity in affiliates											(9,114	)
Equity in loss of non-consolidated affiliates											(104	)
Loss from continuing operations											(9,218	)
Net income attributable to the noncontrolling interests		(927	)		(41	)		—			(968	)
Net loss attributable to MDC Partners Inc.										$	(10,186	)
Non cash stock based compensation	$	1,753		$	366		$	1,349		$	3,468
Supplemental Segment Information:
Capital expenditures	$	1,605		$	1,034		$	123		$	2,762
Goodwill and intangibles	$	278,055		$	99,852		$	—		$	377,907
Total assets	$	430,731		$	166,342		$	35,993		$	633,066

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Three Months Ended March 31, 2009

(thousands of United States dollars)

	Strategic Marketing Services			Performance Marketing Services			Corporate			Total
Revenue	$	84,463		$	42,275		$	—		$	126,738
Cost of services sold		52,680			33,199			—			85,879
Office and general expenses		19,612			7,628			3,912			31,152
Depreciation and amortization		5,372			2,127			94			7,593
Operating Profit/(Loss)		6,799			(679	)		(4,006	)		2,114
Other Income (Expense):
Other income, net											2,629
Interest expense, net											(3,558	)
Income from continuing operations before income taxes, equity in affiliates											1,185
Income tax expense											615
Income from continuing operations before equity in affiliates											570
Equity in earnings of non-consolidated affiliates											93
Income from continuing operations											663
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes											(252	)
Net Income											411
Net income attributable to the noncontrolling interests		(676	)		294			—			(382	)
Net income attributable to MDC Partners Inc.										$	29
Non cash stock based compensation	$	433		$	190		$	1,274		$	1,897
Supplemental Segment Information:
Capital expenditures	$	772		$	39		$	19		$	830
Goodwill and intangibles	$	223,022		$	57,505		$	—		$	280,527
Total assets	$	377,113		$	120,526		$	38,446		$	536,085

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A summary of the Company’s revenue by geographic area, based on the location in which the services originated, is set forth in the following table:

	United States		Canada		Other		Total
Revenue
Three Months Ended March 31,
2010	$	112,149	$	20,045	$	3,988	$	136,182
2009	$	108,042	$	17,565	$	1,131	$	126,738

13. Commitments, Contingencies and Guarantees

Deferred Acquisition Consideration. In addition to the consideration paid by the Company in respect of certain of its acquisitions at closing, additional consideration may be payable, or may be potentially payable based on the achievement of certain threshold levels of earnings. See Note 2 and Note 4.

Put Options. Owners of interests in certain subsidiaries have the right in certain circumstances to require the Company to acquire the remaining ownership interests held by them. The owners’ ability to exercise any such “put option” right is subject to the satisfaction of certain conditions, including conditions requiring notice in advance of exercise. In addition, these rights cannot be exercised prior to specified staggered exercise dates. The exercise of these rights at their earliest contractual date would result in obligations of the Company to fund the related amounts during the period 2010 to 2018. It is not determinable, at this time, if or when the owners of these rights will exercise all or a portion of these rights.

The amount payable by the Company in the event such rights are exercised is dependent on various valuation formulas and on future events, such as the average earnings of the relevant subsidiary through the date of exercise, the growth rate of the earnings of the relevant subsidiary during that period, and, in some cases, the currency exchange rate at the date of payment.

Management estimates, assuming that the subsidiaries owned by the Company at March 31, 2010, perform over the relevant future periods at their trailing twelve-months earnings levels, that these rights, if all exercised, could require the Company, in future periods, to pay an aggregate amount of approximately $19,080 to the owners of such rights to acquire such ownership interests in the relevant subsidiaries. Of this amount, the Company is entitled, at its option, to fund approximately $2,033 by the issuance of share capital. In addition, the Company is obligated under similar put option rights to pay an aggregate amount of approximately $6,068 only upon termination of such owner’s employment with the applicable subsidiary. The ultimate amount payable relating to these transactions will vary because it is dependent on the future results of operations of the subject businesses and the timing of when these rights are exercised.

Natural Disasters. Certain of the Company’s operations are located in regions of the United States and Caribbean which typically are subject to hurricanes. During the three months ended March 31, 2010 and 2009, these operations did not incur any costs related to damages resulting from hurricanes.

Guarantees. In connection with certain dispositions of assets and/or businesses in 2001 and 2003, the Company has provided customary representations and warranties whose terms range in duration and may not be explicitly defined. The Company has also retained certain liabilities for events occurring prior to sale, relating to tax, environmental, litigation and other matters. Generally, the Company has indemnified the purchasers in the event that a third party asserts a claim against the purchaser that relates to a liability retained by the Company. These types of indemnification guarantees typically extend for a number of years.

In connection with the 2003 sale of the Company’s investment in CDI, the amounts of indemnification guarantees were limited to the total sale price of approximately $84,000. For the remainder, the Company’s potential liability for these indemnifications are not subject to a limit as the underlying agreements do not always specify a maximum amount and the amounts are dependent upon the outcome of future contingent events.

Historically, the Company has not made any significant indemnification payments under such agreements and no amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification guarantees. The Company continues to monitor the conditions that are subject to guarantees and indemnifications to identify whether it is probable that a loss has occurred, and would recognize any such losses under any guarantees or indemnifications in the period when those losses are probable and estimable.

For guarantees and indemnifications entered into after January 1, 2003, in connection with the sale of the Company’s investment in CDI, the Company has estimated the fair value of its liability, which was insignificant.

Legal Proceedings.   The Company’s operating entities are involved in legal proceedings of various types. While any litigation contains an element of uncertainty, the Company has no reason to believe that the outcome of such proceedings or claims will have a material adverse effect on the financial condition or results of operations of the Company.

21

Commitments.   The Company has two commitments to fund $1,412 of investments. At March 31, 2010, the Company had issued $5,029 of undrawn outstanding letters of credit.

14. New Accounting Pronouncements

In April 2010, the FASB issued ASU 2010-13, "Compensation - Stock Compensation  Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades." ASU 2010-13 provides amendments to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in ASU 2010-13 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The adoption of this standard will not have an effect on our results of operation or our financial position.

In February 2010, The FASB issued an additional Accounting Standards Update on Subsequent Events to clarify the updated guidance issued in May 2009.  This Guidance clarifies that SEC filers must evaluate subsequent events through the date the financial statements are issued. However, an SEC filer is not required to disclose the date through which subsequent events have been evaluated.  The amendment is effective June 15, 2010.  The adoption will not have an impact on our financial statements.

In January 2010, the FASB issued amended guidance to enhance disclosure requirements related to fair value measurements. The amended guidance for Level 1 and Level 2 fair value measurements is effective January 1, 2010. The amended guidance for Level 3 fair value measurements will be effective for January 1, 2011. The guidance requires disclosures of amounts and reasons for transfers in and out of Level 1 and Level 2 recurring fair value measurements as well as additional information related to activities in the reconciliation of Level 3 fair value measurements. The guidance expanded the disclosures related to the level of disaggregation of assets and liabilities and information about inputs and valuation techniques. The adoption of the guidance for Level 1 and Level 2 fair value measurements did not have a material impact on our unaudited Consolidated Financial Statements.  The adoption of the guidance related to Level 3 fair value measurements will not have a significant impact on our Consolidated Financial Statements.

In January 2010, the FASB issued an Accounts Standards Update on Consolidation — Accounting and Reporting for Decreases in Ownership of a Subsidiary — A Scope Clarification. This Guidance clarifies the scope of the decrease in ownership provisions and expands the disclosure requirements about deconsolidation of a subsidiary or de-recognition of a group of assets. It is effective beginning in the first interim annual reporting period ending on or after December 15, 2009. The adoption did not have an impact on our financial statements.

In January 2010, the FASB issued Fair Value Measurements and Disclosures — Improving Disclosures about Fair Value Measurements. This Guidance requires new disclosures and clarifies certain existing disclosure requirements about fair value measurements. It requires a reporting entity to disclose significant transfers in and out of Level 1 and Level 2 fair value measurements, to describe the reasons for the transfers and to present separately information about purchases, sales, issuances and settlements for fair value measurements using significant unobservable inputs. This Guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements, which is effective for interim and annual reporting periods beginning after December 15, 2010; early adoption is permitted. The adoption did not have a material effect on our financial statements.

In October 2009, the FASB issued revised guidance on the topic of Multiple — Deliverable Revenue Arrangements. The revised guidance amends certain accounting for revenue with multiple deliverables. In particular when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, the revised guidance allows use of a best estimate of the selling price to allocate the arrangement consideration among them. This guidance is effective for the first quarter of 2011, with early adoption permitted. We do not expect that the adoption will have a material impact on our financial statements.

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15. Subsequent Events

On May 6, 2010, the Company acquired a 75% equity interest in Integrated Media Solutions Partners LLC, a Delaware limited liability company, the successor-in-interest to the business formerly owned by Integrated Media Solutions, LLC, a New York limited liability company (“IMS”).  The remaining 25% of the outstanding equity interests in IMS were retained by Robert Ingram, Desiree Dumont and Ron Corvino, the existing principals of IMS.  IMS is a direct response media planning, reporting, analysis and optimization company for offline and online media. The purchase price paid by the Company consisted of $20,000 in cash paid at closing, plus additional equal non-contingent payments to the seller totaling $12,670 to be paid annually for three years, $10,000 of which bears interest at 6% per annum. The purchase price is subject to customary working capital adjustments.  In addition, the Company will make contingent payments based on IMS’ financial performance from the date of closing through December 31, 2014. In connection with the IMS acquisition, a wholly-owned subsidiary of the Company and each of the other equity holders of IMS entered into an operating agreement that specifies the parties’ respective economic, governance and liquidity rights, including the Company’s right to priority distributions from IMS for the period through 2014. IMS also entered into new employment agreements with the existing principals.  The Company has call rights with respect to the remaining 25% of the equity interests in IMS that could increase the Company’s ownership to 100% in 2015.

In addition, since April 1, 2010, the Company completed the following additional acquisitions:  (i) acquired a 70% equity interest in Sloane & Company LLC, a strategic communications firm specializing in financial communications, public affairs, and crisis communications for multinational organizations; (ii) acquired a 51% equity interest in Allison & Partners LLC, a public relations firm which specializes in consumer marketing, corporate communications, social impact, technology, public affairs and healthcare; and (iii) acquired substantially all of the operating assets of CCS-ADPLUS, LLC (d.b.a. Infolure), which specializes in data management and marketing applications.  The aggregate purchase price paid for these three acquisitions consisted of aggregate cash payments of $17,000 at closing, deferred payments present valued at $4,325, plus additional contingent payments the current estimated present of value of which is $11,284 that are based on actual results from 2010 to 2014 with final payments due in 2015.  The Company has call rights with respect to the equity interests not held by the Company in each of these entities that could increase the Company’s ownership to 100% over the next several years. The other equity holders of Sloane & Company LLC have mandatory put obligations to the Company which are currently estimated at $7,225.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless otherwise indicated, references to the “Company” mean MDC Partners Inc. and its subsidiaries, and references to a fiscal year means the Company’s year commencing on January 1 of that year and ending December 31 of that year (e.g., fiscal 2009 means the period beginning January 1, 2009, and ending December 31, 2009).

The Company reports its financial results in accordance with generally accepted accounting principles (“GAAP”) of the United States of America (“US GAAP”). However, the Company has included certain non-US GAAP financial measures and ratios, which it believes, provide useful information to both management and readers of this report in measuring the financial performance and financial condition of the Company. One such term is “organic revenue” which means growth in revenues from sources other than acquisitions or foreign exchange impacts. These measures do not have a standardized meaning prescribed by US GAAP and, therefore, may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to other titled measures determined in accordance with US GAAP.

The following discussion focuses on the operating performance of the Company for the three months ended March 31, 2010 and 2009, and the financial condition of the Company as of March 31, 2010. This analysis should be read in conjunction with the interim condensed consolidated financial statements presented in this interim report and the annual audited consolidated financial statements and Management’s Discussion and Analysis presented in the Annual Report to Shareholders for the year ended December 31, 2009 as reported on Form 10-K. All amounts are in U.S. dollars unless otherwise stated.

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Executive Summary

The Company’s objective is to create shareholder value by building market-leading subsidiaries and affiliates that deliver innovative, value-added marketing communications and strategic consulting services to their clients. Management believes that shareholder value is maximized with an operating philosophy of “Perpetual Partnership” with proven committed industry leaders in marketing communications.

MDC manage the business by monitoring several financial and non-financial performance indicators. The key indicators that we review focus on the areas of revenues and operating expenses and capital expenditures. Revenue growth is analyzed by reviewing the components and mix of the growth, including: growth by major geographic location; existing growth by major reportable segment (organic); growth from currency changes; and growth from acquisitions.

MDC conducts its businesses through the Marketing Communications Group. Within the Marketing Communications Group, there are two reportable operating segments: Strategic Marketing Services and Performance Marking Services. In addition, MDC has a “Corporate Group” which provides certain administrative, accounting, financial and legal functions. Through our operating “partners”, MDC provides advertising, consulting, customer relationship management, and specialized communication services to clients throughout the United States, Canada, Europe, and Jamaica.

The operating companies earn revenue from agency arrangements in the form of retainer fees or commissions; from short-term project arrangements in the form of fixed fees or per diem fees for services; and from incentives or bonuses. Additional information about revenue recognition appears in Note 2 of the Notes to the Condensed Consolidated Financial Statements.

MDC measures operating expenses in two distinct cost categories: cost of services sold, and office and general expenses. Cost of services sold is primarily comprised of employee compensation related costs and direct costs related primarily to providing services. Office and general expenses are primarily comprised of rent and occupancy costs and administrative service costs including related employee compensation costs. Also included in operating expenses is depreciation and amortization.

Because we are a service business, we monitor these costs on a percentage of revenue basis. Cost of services sold tends to fluctuate in conjunction with changes in revenues, whereas office and general expenses and depreciation and amortization, which are not directly related to servicing clients, tend to decrease as a percentage of revenue as revenues increase because a significant portion of these expenses are relatively fixed in nature.

We measure capital expenses as either maintenance or investment related.  Maintenance capital expenses are primarily composed of general upkeep of our office facilities and equipment that are required to continue to operate our businesses.  Investment capital expenses include expansion costs, the build out of new capabilities, technology or call centers, or other growth initiatives not related to the day to day upkeep of the existing operations.  Growth capital expenses are measured and approved based on the expected return of the invested capital.

Certain Factors Affecting Our Business

Acquisitions and Dispositions ..  Our strategy includes acquiring ownership stakes in well-managed businesses with strong reputations in the industry. We engaged in a number of acquisition and disposal transactions during the 2009 to 2010 period, which affected revenues, expenses, operating income and net income. Additional information regarding material acquisitions is provided in Note 4 “Acquisitions” and information on dispositions is provided in Note 6 “Discontinued Operations” in the notes to the Condensed Consolidated Financial Statements.

Foreign Exchange Fluctuations ..  Our financial results and competitive position are affected by fluctuations in the exchange rate between the US dollar and non-US dollars, primarily the Canadian dollar. See also “Quantitative and Qualitative Disclosures About Market Risk — Foreign Exchange.”

Seasonality ..  Historically, with some exceptions, we generate the highest quarterly revenues during the fourth quarter in each year. The fourth quarter has historically been the period in the year in which the highest volumes of media placements and retail related consumer marketing occur.

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Results of Operations:

For the Three Months Ended March 31, 2010

(thousands of United States dollars)

	Strategic Marketing Services			Performance Marketing Services			Corporate			Total
Revenue	$	91,525		$	44,657		$	—		$	136,182
Cost of services sold		61,613			35,356			—			96,969
Office and general expenses		20,328			9,514			4,783			34,625
Depreciation and amortization		3,301			2,439			93			5,833
Operating Profit/(Loss)		6,283			(2,652	)		(4,876	)		(1,245	)
Other Income (Expense):
Other expense, net											(613	)
Interest expense, net											(7,007	)
Loss from continuing operations before income taxes, equity in affiliates											(8,865	)
Income tax expense											249
Loss from continuing operations before equity in affiliates											(9,114	)
Equity in loss of non-consolidated affiliates											(104	)
Loss from continuing operations											(9,218	)
Net income attributable to the noncontrolling interests		(927	)		(41	)		—			(968	)
Net loss attributable to MDC Partners Inc.										$	(10,186	)
Non cash stock based compensation.	$	1,753		$	366		$	1,349		$	3,468

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Results of Operations:

For the Three Months Ended March 31, 2009

(thousands of United States dollars)

	Strategic Marketing Services			Performance Marketing Services			Corporate			Total
Revenue	$	84,463		$	42,275		$	—		$	126,738
Cost of services sold		52,680			33,199			—			85,879
Office and general expenses		19,612			7,628			3,912			31,152
Depreciation and amortization		5,372			2,127			94			7,593
Operating Profit/(Loss)		6,799			(679	)		(4,006	)		2,114
Other Income (Expense):
Other income, net											2,629
Interest expense, net											(3,558	)
Income from continuing operations before income taxes, equity in affiliates											1,185
Income tax expense											615
Income from continuing operations before equity in affiliates											570
Equity in earnings of non-consolidated affiliates											93
Income from continuing operations											663
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes											(252	)
Net income											411
Net income (loss) attributable to the noncontrolling interests		(676	)		294			—			(382	)
Net income attributable to MDC Partners Inc.										$	29
Non cash stock based compensation.	$	433		$	190		$	1,274		$	1,897

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Three Months Ended March 31, 2010, Compared to Three Months Ended March 31, 2009

Revenue was $136.2 million for the quarter ended March 31, 2010, representing an increase of $9.5 million, or 7.5%, compared to revenue of $126.7 million for the quarter ended March 31, 2009. This revenue increase related primarily to acquisition growth of $6.2 million. In addition, a weakening of the US Dollar, primarily versus the Canadian dollar during the quarter ended March 31, 2010, resulted in increased revenues of $3.6 million.

The operating loss for 2010 was $1.2 million, compared to operating profit of $2.1 million for 2009. The decrease in operating profit was primarily the result of a decrease in operating profit of $2.0 million in the Performance Marketing Services segment and a decrease of $0.5 million within the Strategic Marketing Services segment. In addition, Corporate operating expenses increased by $0.9 million.

The loss from continuing operations attributable to MDC Partners Inc. for the first quarter of 2010 was $10.2 million, compared to income of $0.3 million in 2009. This decrease in income of $10.5 million was primarily the result of a decrease in operating profits of $3.4 million, and an increase in interest expense, net of $3.4 million, and an increase in net income attributable to noncontrolling interests of $0.6 million, a decrease in other income, net of $3.2 million.  These amounts were offset by a decrease in income tax expense of $0.4 million.

Marketing Communications Group

Revenues in 2010 attributable to the Marketing Communications Group, which consists of two reportable segments — Strategic Marketing Services and Performance Marketing Services, were $136.2 million compared to $126.7 million in 2009, representing a year-over-year increase of 7.5%.

The components of the increase in revenue in 2010 are shown in the following table:

	Revenue
	$000’s			%
Quarter ended March 31, 2009	$	126,738			—
Organic		(391	)		(0.2	)%
Acquisitions		6,238			4.9	%
Foreign exchange impact		3,597			2.8	%
Quarter ended March 31, 2010	$	136,182			7.5	%

The geographic mix in revenues was consistent between 2010 and 2009 and is demonstrated in the following table:

	2010			2009
US		82	%		85	%
Canada		15	%		14	%
Other		3	%		1	%

The operating profit of the Marketing Communications Group decreased by approximately 40.7% to $3.6 million from $6.1 million. Operating margins decreased by 2.1% and were 2.7% for 2010 compared to 4.8% for 2009. The decrease in operating profit and operating margin was primarily attributable to an increase in direct costs (excluding staff costs) as a percentage of revenues from 12.7% in 2009 to 17.2% in 2010. Total staff costs increased $4.7 million; however,  as a percentage of revenue decreased from 64.0% in 2009 to 63.0% in 2010. General and administrative costs increased as a percentage of revenue from 21.5% in 2009 to 21.9% in 2010.

Strategic Marketing Services (“SMS”)

Revenues attributable to Strategic Marketing Services in the first quarter of 2010 were $91.5 million, compared to $84.5 million in 2009. The year-over-year increase of $7.1 million or 8.4% was attributable primarily to organic growth of $4.9 million as a result of net new business wins. A weakening of the US dollar versus the Canadian dollar in 2010 compared to 2009 resulted in a $2.2 million increase in revenues from the division’s Canadian-based operations.

The operating profit of Strategic Marketing Services decreased by approximately 7.6% to $6.3 million in 2010 from $6.8 million in 2009. Operating margins decreased to 6.9% in 2010 from 8.0% in 2009. Operating profit and margin decreased due primarily to increased direct costs (excluding staff costs) as a percentage of revenue from 10.9% in 2009 to 13.4% in 2010.  In addition, total staff costs as percentages of revenue increased from 60.6% in 2009 to 62.3% in 2010. The increase in staff costs represented the Company’s investment in talent. General and administrative costs decreased as a percentage of revenue from 23.2% in 2009 to 22.2% in 2010, due to the relatively fixed nature of these costs. Depreciation and amortization decreased $2.1 million, due to certain intangibles being fully amortized by the end of 2009.

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Performance Marketing Services

The Performance Marketing Services segment generated revenues of $44.7 million for 2010, an increase of $2.4 million, or 5.6% higher than revenues of $42.3 million in 2009. The year over year increase was attributed primarily to growth from acquisitions of $6.3 million. In addition, a weakening of the US dollar verses the Canadian dollar in 2010 compared to 2009 resulted in a $1.4 million increase in revenues from the division’s Canadian-based operations. These increases were offset by reduced revenue of $5.3 million as a result of the reduction and delays of client spending.

The operating loss of Performance Marketing Services increased by $2.0 million in 2010 from a loss of $0.7 million in 2009 to a loss of $2.7 million in 2010.  Operating loss margins increased to 5.9% in 2010 from 1.6% in 2009.  Operating margins decreased as direct costs (excluding staff costs) increased as a percentage of revenue from 16.3% in 2009 to 25.1% in 2010.  Total staff costs as a percentage of revenue decreased from 70.8% in 2009 to 64.4% in 2010, as the Company reduced costs in connection with the reduction in organic revenues.  General and administrative costs increased as a percentage of revenue from 18.0% in 2009 to 21.3% in 2010.  This increase as a percentage of revenue was due to the decrease of organic revenue on relatively fixed costs.  Depreciation and amortization increased by $0.3 million due to the amortization of intangibles in connection with the 2010 acquisitions.

Corporate

Operating costs related to the Company’s Corporate operations totaled $4.9 million in 2010 compared to $4.0 million in 2009. This increase of $0.9 million was primarily related to increased compensation and related costs of $0.2 million, travel, promotional and related costs of $0.3 million, professional costs of $0.2 million, and the timing of donations of $0.2 million.

Other Income, Net

Other income (expense) decreased to an expense of $0.6 million in 2010 compared to $2.6 million of income in 2009. The 2010 expense was primarily comprised of a foreign exchange loss of $0.7 million, compared to a gain of $2.6 million recorded in 2009.  Specifically, this unrealized loss was due primarily to the weakening in the US dollar during 2010 and 2009 compared to the Canadian dollar primarily on its US dollar denominated intercompany balances with its Canadian subsidiaries compared to December 31, 2009. At March 31, 2010, the exchange rate was 1.02 Canadian dollars to one US dollar, compared to 1.05 at the end of 2009.

Net Interest Expense

Net interest expense for 2010 was $7.0 million, an increase of $3.4 million over the $3.6 million of net interest expense incurred during 2009. Interest expense increased in 2010 due to higher average outstanding debt in 2010, relating to the 11% senior notes issued in October 2009. Interest income was $0.2 million for 2009 and nominal in 2010.

Income Taxes

Income tax expense was $0.6 million in 2009 compared to income tax expense of $0.2 million for 2010. The Company’s effective tax rate in 2010 and 2009 was substantially higher than the statutory rate in 2009 due to noncontrolling interest charges, offset by non-deductible stock based compensation.  In addition, the 2010 effective tax rate was higher due to losses in certain tax jurisdictions where the benefits are not expected to be realized.

The Company’s US operating units are generally structured as limited liability companies, which are treated as partnerships for tax purposes. The Company is only taxed on its share of profits, while noncontrolling holders are responsible for taxes on their share of the profits.

Equity in Affiliates

Equity in affiliates represents the income (losses) attributable to equity-accounted affiliate operations. For 2010 a loss of $0.1 million compared to 2009 income of $0.1 million was recorded.

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Noncontrolling Interests

Net income attributable to the noncontrolling interests was $1.0 million for 2010, an increase of $0.6 million from the $0.4 million of noncontrolling interest expense incurred during 2009, primarily due to increased profitability of certain entities within the Strategic Marketing Services Segment which are not wholly owned.

Discontinued Operations Attributable to MDC Partners Inc.

The loss, net of an income tax benefit of $0.3 million from discontinued operations in 2009, resulted from the operating results of Clifford/Bratskeir Public Relations LLC (“Bratskeir”), which was discontinued in 2008 with the completion of the sale of Bratskeir’s remaining assets in April 2009.

As a result, the Company has classified these operations as discontinued.

Net Income (loss) attributable to MDC Partners Inc .

As a result of the foregoing, the net loss attributable to MDC Partners Inc. recorded for 2010 was $10.2 million or a loss of $0.37 per diluted share, compared to a nominal net income attributable to MDC Partners Inc. or $0.00 per diluted share reported for 2009.

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Liquidity and Capital Resources:

Liquidity

The following table provides summary information about the Company’s liquidity position:

	As of and for the three months ended March 31, 2010			As of and for the three months ended March 31, 2009			As of and for the year ended December 31, 2009
		(000’s)			(000’s)			(000’s)
Cash and cash equivalents	$	21,247		$	46,247		$	51,926
Working capital (deficit)	$	(52,011	)	$	4,703		$	(40,152	)
Cash from operations	$	(11,218	)	$	560		$	59,903
Cash from investing	$	(26,143	)	$	(4,121	)	$	(66,199	)
Cash from financing	$	6,788		$	8,924		$	20,037
Long-term debt to total equity ratio		2.23			2.10			2.31
Fixed charge coverage ratio		N/A			1.22			N/A
Fixed charge deficiency	$	8,858			N/A		$	3,350

As of March 31, 2010, and December 31, 2009, $9.6 million and $14.1 million, respectively, of the consolidated cash position was held by subsidiaries, which, although available for the subsidiaries’ use, does not represent cash that is distributable as earnings to MDC Partners for use to reduce its indebtedness. It is the Company’s intent through its cash management system to reduce outstanding borrowings under the WF Credit Agreement by using available cash.

Working Capital

At March 31, 2010, the Company had a working capital deficit of $52.0 million compared to a deficit of $40.2 million at December 31, 2009. The decrease in working capital was primarily due to seasonal shifts in the amounts collected from clients, and paid to suppliers, primarily media outlets and improvements made in the Company’s billing and collecting practices. The Company includes amounts due to noncontrolling interest holders, for their share of profits, in accrued and other liabilities. At March 31, 2010, $3.4 million remained outstanding to be distributed to noncontrolling interest holders over the next twelve months.

The Company intends to maintain sufficient availability of funds under its Financing Agreement at any particular time to adequately fund such working capital deficits should there be a need to do so from time to time.

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Cash Flows

Operating Activities

Cash flow used in continuing operations, including changes in non-cash working capital, for the three months ended March 31, 2010 was $11.2 million. This was attributable primarily to a net operating loss from continuing operations attributable to MDC Partners of $10.2 million, payments of accounts payable and accrued liabilities, which resulted in cash use from operations of $14.7 million, an increase in accounts receivable of $5.3 million and an increase in prepaid expenses and other current assets of $2.1 million. This use of cash was partially offset by depreciation and amortization and non-cash stock compensation of $9.4 million, an increase of advance billings to clients of $10.9 million, and a decrease in expenditures billable to clients of $0.8 million.

Cash flow provided by continuing operations, including changes in non-cash working capital, for the three months ended March 31, 2009 was $0.9 million. This was attributable primarily to income from continuing operations attributable to MDC Partners of $0.3 million, depreciation and amortization and non-cash stock compensation of $9.6 million, and an increase of advance billings to clients of $6.6 million. This cash provided by continuing operations was partially offset by payments of accounts payable and accrued liabilities, which resulted in a cash use in operations of $5.1 million, an increase in accounts receivable of $9.3 million and an increase in expenditures billable to clients of $1.4 million. Discontinued operations attributable to MDC Partners used cash of $0.4 million in the three months ended March 31, 2009.

Investing Activities

Cash flows used in investing activities were $26.1 million for the three months ended March 31, 2010, compared with $4.1 million in the three months ended March 31, 2009.

In the three months ended March 31, 2010, capital expenditures totaled $2.8 million, of which $1.6 million was incurred by the Strategic Marketing Services segment and $1.0 million was incurred by the Performance Marketing Services segment.  These expenditures consisted primarily of computer equipment and furniture and fixtures. Expenditures for capital assets in the three months ended March 31, 2009 were $0.8 million. Of this amount, $0.8 million was incurred by the Strategic Marketing Services segment. These expenditures consisted primarily of computer equipment and leasehold improvements.

In the three months ended March 31, 2010, cash flow used for acquisitions was $23.4 million of which $14.1 million was paid in the acquisition of equity interests in Team, Communifx and Plaid, and $7.1 million was paid related to the settlement of deferred acquisition consideration. Cash flow used in acquisitions was $3.4 million in the three months ended March 31, 2009.

Discontinued operations used cash of $0.4 million in 2009.

Financing Activities

During the three months ended March 31, 2010, cash flows provided by financing activities amounted to $6.8 million, and consisted primarily of borrowings under the Revolving Credit Facility of $10.3 million, payment of dividends of $2.8, repayments of long-term debt of $0.2 million and the purchase of treasury shares for income tax withholding requirements of $0.6 million. During the three months ended March 31, 2009, cash flows provided by financing activities amounted to $8.9 million, and primarily consisted of borrowings under the old Financing Agreement of $9.9 million, repayments of long-term debt of $0.6 million and the purchase of treasury shares for income tax withholding requirements of $0.3 million. 

Total Debt

11% Senior Notes Due 2016

On October 23, 2009, the Company and its wholly-owned subsidiaries, as guarantors, issued and sold $225 million aggregate principal amount of 11% Senior Notes due 2016 (the “11% Notes”). The 11% Notes bear interest at a rate of 11% per annum, accruing from October 23, 2009. Interest is payable semiannually in arrears in cash on May 1 and November 1 of each year, beginning on May 1, 2010. The 11% Notes will mature on November 1, 2016, unless earlier redeemed or repurchased. The Company received net proceeds before expenses of $209 million which included an original issue discount of approximately 4.7% or $10.5 million and underwriter fees of $5.6 million. The 11% Notes were sold in a private placement in reliance on exemptions from registration under the Securities Act of 1933, as amended. The Company used the net proceeds of this offering to repay the outstanding balance and terminate its prior Fortress Financing Agreement consisting of repayments of $130 million of term loans, a $70 million delayed draw term loan, and $9.7 million outstanding on the $55 million revolving credit facility. The Company also used the net proceeds to redeem its outstanding 8% C$45 million convertible debentures.

The Company may, at its option, redeem the 11% Notes in whole at any time or in part from time to time, on and after November 1, 2013 at a redemption price of 105.5% of the principal amount thereof. If redeemed during the twelve-month period beginning on November 1, 2014, the Company must pay a redemption price of 102.75% of the principal amount thereof. If redeemed during the twelve-month period beginning on November 1, 2015, the Company must pay a redemption price of 100% of the principal amount thereof. Prior to November 1, 2013, the Company may, at its option, redeem some or all of the 11% Notes at a price equal to 100% of the principal amount of the Notes plus a “make whole” premium and accrued and unpaid interest. The Company may also redeem, at its option, prior to November 1, 2012, up to 35% of the 11% Notes with the proceeds from one or more equity offerings at a redemption price of 111% of the principal amount thereof. If the Company experiences certain kinds of changes of control (as defined in the Indenture), holders of the 11% Notes may require the Company to repurchase any 11% Notes held by them at a price equal to 101% of the principal amount of the 11% Notes plus accrued and unpaid interest. The indenture governing the 11% Notes contains various covenants restricting our operations in certain respects.

New Credit Agreement

On October 23, 2009, the Company and its subsidiaries entered into a new $75 million five year senior secured revolving credit facility (the “WF Credit Agreement”) with Wells Fargo Foothill, LLC, as agent, and the lenders from time to time party thereto. The WF Credit Agreement replaced the Company’s existing $185 million senior secured financing agreement with Fortress Credit Corp., as collateral agent, Wells Fargo Foothill, Inc., as administrative agent. Advances under the WF Credit Agreement bear interest as follows: (a)(i) LIBOR Rate and Loans bear interest at the LIBOR Rate and (ii) Base Rate Loans bear interest at the Base Rate, plus (b) an applicable margin. The initial applicable margin for borrowings is 3.00% in the case of Base Rate Loans and 3.25% in the case of LIBOR Rate Loans. The applicable margin may be reduced subject to the Company achieving certain trailing twelve month earning levels, as defined. In addition to paying interest on outstanding principal under the WF Credit Agreement, the Company is required to pay an unused revolver fee to the lenders under the WF Credit Agreement in respect of unused commitments thereunder.

The WF Credit Agreement is guaranteed by all of the Company’s present and future subsidiaries, other than immaterial subsidiaries as defined and is secured by all the assets of the Company. The WF Credit Agreement includes covenants that, among other things, restrict the Company’s ability and the ability of its subsidiaries to incur or guarantee additional indebtedness; pay dividends on or redeem or repurchase the capital stock of MDC; make certain types of investments; impose limitations on dividends or other amounts from the Company’s subsidiaries; incur certain liens, sell or otherwise dispose of certain assets; enter into transactions with affiliates; enter into sale and leaseback transactions; and consolidate or merge with or into, or sell substantially all of the Company’s assets to, another person. These covenants are subject to a number of important limitations and exceptions. The WF Credit Agreement also contains financial covenants, including a senior leverage ratio, a fixed charge coverage ratio and a minimum earnings level, as defined.

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Debt as of March 31, 2010 was $228.5 million, an increase of $10.6 million compared with the $217.9 million outstanding at December 31, 2009, primarily as a result of borrowings under the revolving credit facility to fund seasonal working capital requirements. At March 31, 2010, $59.7 million was available under the WF Credit Agreement.

The Company is currently in compliance with all of the terms and conditions of the WF Credit Agreement, and management believes, based on its current financial projections, that the Company will be in compliance with its covenants over the next twelve months.

If the Company loses all or a substantial portion of its lines of credit under the WF Credit Agreement, it will be required to seek other sources of liquidity. If the Company were unable to find these sources of liquidity, for example through an equity offering or access to the capital markets, the Company’s ability to fund its working capital needs and any contingent obligations with respect to put options would be adversely affected.

Pursuant to the WF Credit Agreement, the Company must comply with certain financial covenants including, among other things, covenants for (i) total debt ratio, (ii) fixed charges ratio, and (iii) minimum earnings before interest, taxes and depreciation and amortization, in each case as such term is specifically defined in the Credit Facility. For the period ended March 31, 2010, the Company’s calculation of each of these covenants, and the specific requirements under the Credit Facility, respectively, were as follows:

	March 31, 2010
Total Senior Leverage Ratio		0.05
Maximum per covenant		2.0
Fixed Charges Ratio		4.33
Minimum per covenant		1.25
Earnings before interest, taxes, depreciation and amortization	$	69.7 million
Minimum per covenant	$	56.1 million

These ratios are not based on generally accepted accounting principles and are not presented as alternative measures of operating performance or liquidity. They are presented here to demonstrate compliance with the covenants in the Company’s Credit Facility, as non-compliance with such covenants could have a material adverse effect on the Company.

Deferred Acquisition Consideration (Earnouts)

Acquisitions of businesses by the Company may include commitments to contingent deferred purchase consideration payable to the seller. These contingent purchase obligations are generally payable within a one to six-year period following the acquisition date, and are based on achievement of certain thresholds of future earnings and, in certain cases, also based on the rate of growth of those earnings. The contingent consideration is recorded as an obligation of the Company when the contingency is resolved and the amount is reasonably determinable, for acquisitions prior to January 1, 2009. Based on various assumptions, all deferred consideration estimates based on future operating results of the relevant entities are recorded on the Company’s balance sheet at March 31, 2010. The actual amount that the Company pays in connection with the obligations may differ materially from this estimate. The Accounting Standards Codification’s revised guidance on business combinations now requires that contingent purchase obligations are recorded as a liability and included in the original acquisition accounting. At March 31, 2010, there was $37.9 million of deferred consideration included in the Company’s balance sheet.

Other-Balance Sheet Commitments

Put Rights of Subsidiaries’ Noncontrolling Shareholders

Owners of interests in certain of the Marketing Communications Group subsidiaries have the right in certain circumstances to require the Company to acquire the remaining ownership interests held by them. The owners’ ability to exercise any such “put option” right is subject to the satisfaction of certain conditions, including conditions requiring notice in advance of exercise. In addition, these rights cannot be exercised prior to specified staggered exercise dates. The exercise of these rights at their earliest contractual date would result in obligations of the Company to fund the related amounts during the period of 2010 to 2018. It is not determinable, at this time, if or when the owners of these put option rights will exercise all or a portion of these rights.

The amount payable by the Company in the event such put option rights are exercised is dependent on various valuation formulas and on future events, such as the average earnings of the relevant subsidiary through that date of exercise, the growth rate of the earnings of the relevant subsidiary during that period, and, in some cases, the currency exchange rate at the date of payment.

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Management estimates, assuming that the subsidiaries owned by the Company at March 31, 2010, perform over the relevant future periods at their trailing twelve-month earnings level, that these rights, if all exercised, could require the Company, in future periods, to pay an aggregate amount of approximately $19.1 million to the owners of such rights to acquire such ownership interests in the relevant subsidiaries. Of this amount, the Company is entitled, at its option, to fund approximately $2.0 million by the issuance of the Company’s Class A subordinate voting shares. In addition, the Company is obligated under similar put option rights to pay an aggregate amount of approximately $6.1 million only upon termination of such owner’s employment with such applicable subsidiary. The Company intends to finance the cash portion of these contingent payment obligations using available cash from operations, borrowings under its Financing Agreement (and refinancings thereof) and, if necessary, through incurrence of additional debt. The ultimate amount payable and the incremental operating income in the future relating to these transactions will vary because it is dependent on the future results of operations of the subject businesses and the timing of when these rights are exercised. Approximately $6.2 million of the estimated $19.1 million that the Company would be required to pay subsidiaries noncontrolling shareholders upon the exercise of outstanding put option rights, relates to rights exercisable within the next twelve months. Upon the settlement of the total amount of such put options, the Company estimates that it would receive incremental operating income before depreciation and amortization of $4.9 million.

 The following table summarizes the potential timing of the consideration and incremental operating income before depreciation and amortization based on assumptions as described above.  

Consideration (4)	2010		2011		2012		2013		2014 & Thereafter		Total
	($ Millions)
Cash	$	6.1	$	1.6	$	2.5	$	3.0	$	3.9	$	17.1
Shares		0.1		0.4		0.4		0.7		0.4		2.0
	$	6.2	$	2.0	$	2.9	$	3.7	$	4.3	$	19.1	(1)
Operating income before depreciation and amortization to be received(2)	$	1.6	$	0.7	$	1.6	$	0.5	$	0.5	$	4.9
Cumulative operating income before depreciation and amortization(3)	$	1.6	$	2.3	$	3.9	$	4.4		4.9	$		(5)

(1) This amount has been recognized in Redeemable Noncontrolling Interests on the Company’s balance sheet.

(2) This financial measure is presented because it is the basis of the calculation used in the underlying agreements relating to the put rights and is based on actual 2009 and first quarter 2010 operating results. This amount represents amounts to be received commencing in the year the put is exercised.

(3) Cumulative operating income before depreciation and amortization represents the cumulative amounts to be received by the company.

(4) The timing of consideration to be paid varies by contract and does not necessarily correspond to the date of the exercise of the put.

(5) Amounts are not presented as they would not be meaningful due to multiple periods included.

Critical Accounting Policies

The following summary of accounting policies has been prepared to assist in better understanding the Company’s consolidated financial statements and the related management’s discussion and analysis. Readers are encouraged to consider this information together with the Company’s consolidated financial statements and the related notes to the consolidated financial statements as included in the Company’s annual report on Form 10-K for a more complete understanding of accounting policies discussed below.

Estimates .   The preparation of the Company’s financial statements in conformity with generally accepted accounting principles in the United States of America, or “US GAAP”, requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities including goodwill, intangible assets, valuation allowances for receivables and deferred income tax assets, stock-based compensation, and the reporting of variable interest entities at the date of the financial statements. The statements are evaluated on an ongoing basis and estimates are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances. Actual results can differ from those estimates, and it is possible that the differences could be material.

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Revenue Recognition

The Company’s revenue recognition policies are as required by the Revenue Recognition topics of the FASB Accounting Standards Codification, and accordingly, revenue is generally recognized when services are provided or upon delivery of the products when ownership and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the resulting receivable is reasonably assured.

The Company earns revenue from agency arrangements in the form of retainer fees or commissions; from short-term project arrangements in the form of fixed fees or per diem fees for services; and from incentives or bonuses.

Non-refundable retainer fees are generally recognized on a straight-line basis over the term of the specific customer contract. Commission revenue is earned and recognized upon the placement of advertisements in various media when the Company has no further performance obligations. Fixed fees for services are recognized upon completion of the earnings process and acceptance by the client. Per diem fees are recognized upon the performance of the Company’s services. In addition, for certain service transactions, which require delivery of a number of service acts, the Company uses the Proportional Performance model, which generally results in revenue being recognized based on the straight-line method due to the acts being non-similar and there being insufficient evidence of fair value for each service provided.

Fees billed to clients in excess of fees recognized as revenue are classified as advance billings.

A small portion of the Company’s contractual arrangements with clients includes performance incentive provisions, which allow the Company to earn additional revenues as a result of its performance relative to both quantitative and qualitative goals. The Company recognizes the incentive portion of revenue under these arrangements when specific quantitative goals are achieved, or when the Company’s clients determine performance against qualitative goals has been achieved. In all circumstances, revenue is only recognized when collection is reasonably assured.

The Company follows Reporting Revenue Gross as a Principal versus Net as an Agent topic of the FASB Accounting Standards Codification. This topic provides a summary on when revenue should be recorded at the gross amount billed because revenue has been earned from the sale of goods or services, or the net amount retained because a fee or commission has been earned. The Company’s business at times acts as an agent and records revenue equal to the net amount retained, when the fee or commission is earned. The Company also follows the reimbursements received for out-of-pocket expenses. This topic of the FASB Accounting Standards Codification requires that reimbursements received for out-of-pocket expenses incurred should be characterized in the income statement as revenue. Accordingly, the Company has included in revenue such reimbursed expenses.

Acquisitions, Goodwill and Other Intangibles.  A fair value approach is used in testing goodwill for impairment to determine if an other than temporary impairment has occurred. One approach utilized to determine fair values is a discounted cash flow methodology. When available and as appropriate, comparative market multiples are used. Numerous estimates and assumptions necessarily have to be made when completing a discounted cash flow valuation, including estimates and assumptions regarding interest rates, appropriate discount rates and capital structure. Additionally, estimates must be made regarding revenue growth, operating margins, tax rates, working capital requirements and capital expenditures. Estimates and assumptions also need to be made when determining the appropriate comparative market multiples to be used. Actual results of operations, cash flows and other factors used in a discounted cash flow valuation will likely differ from the estimates used and it is possible that differences and changes could be material.

The Company has historically made and expects to continue to make selective acquisitions of marketing communications businesses. In making acquisitions, the price paid is determined by various factors, including service offerings, competitive position, reputation and geographic coverage, as well as prior experience and judgment. Due to the nature of advertising, marketing and corporate communications services companies; the companies acquired frequently have significant identifiable intangible assets, which primarily consist of customer relationships. The Company has determined that certain intangibles (trademarks) have an indefinite life, as there are no legal, regulatory, contractual, or economic factors that limit the useful life.

Business Combinations.  Valuation of acquired companies are based on a number of factors, including specialized know-how, reputation, competitive position and service offerings. Our acquisition strategy has been to focus on acquiring the expertise of an assembled workforce in order to continue building upon the core capabilities of our various strategic business platforms to better serve our clients. Consistent with our acquisition strategy and past practice of acquiring a majority ownership position, most acquisitions completed in 2009 include an initial payment at the time of closing and provide for future additional contingent purchase price payments. Contingent payments for these transactions, as well as certain acquisitions completed in prior years, are derived using the performance of the acquired entity and are based on pre-determined formulas. Contingent purchase price obligations for acquisitions completed prior to January 1, 2009 are accrued when the contingency is resolved and payment is certain. Contingent purchase price obligations related to acquisitions completed subsequent to December 31, 2008 are recorded as liabilities at estimated value and are remeasured at each reporting period. Changes in estimated value are recorded in results of operations. There were no adjustments for remeasurement for the year ended December 31, 2009. In addition, certain acquisitions also include put/call obligations for additional equity ownership interests. The estimated value of these interests are recorded as Redeemable Noncontrolling Interests. As of January 1, 2009, the Company expenses acquisition related costs in accordance with the Accounting Standard’s Codification’s new guidance on acquisition accounting. For the three years months ended March 31, 2010 and 2009, $399 and nil, respectively, of acquisition related costs have been changed to operations.

For each of our acquisitions, we undertake a detailed review to identify other intangible assets and a valuation is performed for all such identified assets. We use several market participant measurements to determine estimated value. This approach includes consideration of similar and recent transactions, as well as utilizing discounted expected cash flow methodologies. Like most service businesses, a substantial portion of the intangible asset value that we acquire is the specialized know-how of the workforce, which is treated as part of goodwill and is not required to be valued separately. The majority of the value of the identifiable intangible assets that we acquire is derived from customer relationships, including the related customer contracts, as well as trade names. In executing our acquisition strategy, one of the primary drivers in identifying and executing a specific transaction is the existence of, or the ability to, expand our existing client relationships. The expected benefits of our acquisitions are typically shared across multiple agencies and regions.

Allowance for Doubtful Accounts.  Trade receivables are stated less allowance for doubtful accounts. The allowance represents estimated uncollectible receivables usually due to customers’ potential insolvency. The allowance includes amounts for certain customers where risk of default has been specifically identified.

Income Tax Valuation Allowance.  The Company records a valuation allowance against deferred income tax assets when management believes it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Management considers factors such as the reversal of deferred income tax liabilities, projected future taxable income, the character of the income tax asset, tax planning strategies, changes in tax laws and other factors. A change to any of these factors could impact the estimated valuation allowance and income tax expense.

Stock-based Compensation.  The fair value method is applied to all awards granted, modified or settled. Under the fair value method, compensation cost is measured at fair value at the date of grant and is expensed over the service period, that is the award’s vesting period. When awards are exercised, share capital is credited by the sum of the consideration paid together with the related portion previously credited to additional paid-in capital when compensation costs were charged against income or acquisition consideration. Stock-based awards that are settled in cash or may be settled in cash at the option of employees are recorded as liabilities. The measurement of the liability and compensation cost for these awards is based on the fair value of the award, and is recorded into operating income over the service period, that is the vesting period of the award. Changes in the Company’s payment obligation are revalued each period and recorded as compensation cost over the service period in operating income.

The Company treats benefits paid by shareholders to employees as a stock based compensation charge with a corresponding credit to additional paid-in capital.

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New Accounting Pronouncements

In April 2010, the FASB issued ASU 2010-13, "Compensation - Stock Compensation  Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades." ASU 2010-13 provides amendments to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in ASU 2010-13 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The adoption of this standard will not have an effect on our results of operation or our financial position.

In February 2010, the FASB issued an additional Accounting Standards Update on Subsequent Events to clarify the updated guidance issued in May 2009.  This Guidance clarifies that SEC filers must evaluate subsequent events through the date the financial statements are issued. However, an SEC filer is not required to disclose the date through which subsequent events have been evaluated.  The amendment is effective June 15, 2010.  The adoption will not have an impact on our financial statements.

In January 2010, the FASB issued amended guidance to enhance disclosure requirements related to fair value measurements. The amended guidance for Level 1 and Level 2 fair value measurements is effective January 1, 2010. The amended guidance for Level 3 fair value measurements will be effective for January 1, 2011. The guidance requires disclosures of amounts and reasons for transfers in and out of Level 1 and Level 2 recurring fair value measurements as well as additional information related to activities in the reconciliation of Level 3 fair value measurements. The guidance expanded the disclosures related to the level of disaggregation of assets and liabilities and information about inputs and valuation techniques. The adoption of the guidance for Level 1 and Level 2 fair value measurements did not have a material impact on our unaudited Consolidated Financial Statements.  The adoption of the guidance related to Level 3 fair value measurements will not have a significant impact on our Consolidated Financial Statements.

In January 2010, the FASB issued an Accounts Standards Update on Consolidation — Accounting and Reporting for Decreases in Ownership of a Subsidiary — A Scope Clarification. This Guidance clarifies the scope of the decrease in ownership provisions and expands the disclosure requirements about deconsolidation of a subsidiary or de-recognition of a group of assets. It is effective beginning in the first interim of annual reporting period ending on or after December 15, 2009. The adoption did not have an impact on our financial statements.

In January 2010, the FASB issued Fair Value Measurements and Disclosures — Improving Disclosures about Fair Value Measurements. This Guidance requires new disclosures and clarifies certain existing disclosure requirements about fair value measurements. It requires a reporting entity to disclose significant transfers in and out of Level 1 and Level 2 fair value measurements, to describe the reasons for the transfers and to present separately information about purchases, sales, issuances and settlements for fair value measurements using significant unobservable inputs. This Guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements, which is effective for interim and annual reporting periods beginning after December 15, 2010; early adoption is permitted. The adoption will not have a material effect on our financial statements.

In October 2009, the FASB issued revised guidance on the topic of Multiple — Deliverable Revenue Arrangements. The revised guidance amends certain accounting for revenue with multiple deliverables. In particular when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, the revised guidance allows use of a best estimate of the selling price to allocate the arrangement consideration among them. This guidance is effective for the first quarter of 2011, with early adoption permitted.  The adoption did not have a material impact on our financial statements.

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In March 2008, the FASB issued guidance relating to “Disclosures about Derivative Instruments and Hedging Activities (previously in SFAS No. 161 and currently included in ACS 815-10-65),” which requires enhanced disclosures for derivative and hedging activities. The additional disclosures became effective beginning with our first quarter of 2009. Early adoption is permitted. The adoption of this statement did not have a material effect on our financial statements.

In November 2008, the EITF issued guidance on Equity Method Investment Accounting Considerations, which is effective for the Company on January 1, 2009. This standard addresses the impact that revised Guidance on Business Combinations and Noncontrolling Interests might have on the accounting for equity method investments, including how the initial carrying value of an equity method investment should be determined, how an impairment assessment of an underlying indefinite lived intangible asset of an equity method investment should be performed and how to account for a change in an investment from the equity method to the cost method. The adoption of this guidance did not have an impact on our financial statements.

In April 2008, the FASB issued revised guidance on the topic of Determination of the Useful Life of Intangible Assets. The revised guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible. The intent of this revision is to improve the consistency between the useful life of a recognized intangible asset under previous guidance, and the period of expected cash flows used to measure the fair value of the asset. These changes were effective for fiscal years beginning after December 15, 2008 and are to be applied prospectively to intangible assets acquired subsequent to its effective date. Accordingly, we adopted these provisions on January 1, 2009. The impact that this adoption may have on our financial position and results of operations will depend on the nature and extent of any intangible assets acquired subsequent to its effective date.

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Risks and Uncertainties

This document contains forward-looking statements. The Company’s representatives may also make forward-looking statements orally from time to time. Statements in this document that are not historical facts, including statements about the Company’s beliefs and expectations, recent business and economic trends, potential acquisitions, estimates of amounts for deferred acquisition consideration and “put” option rights, constitute forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.

Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:

• risks associated with severe effects of national and regional economic downturn;

• the Company’s ability to attract new clients and retain existing clients;

• the financial success of the Company’s clients;

• the Company’s ability to retain and attract key employees;

• the Company’s ability to remain in compliance with its debt agreements and the Company’s ability to finance its contingent payment obligations when due and payable, including but not limited to those relating to “put” option rights and deferred acquisition consideration;

• the successful completion and integration of acquisitions which complement and expand the Company’s business capabilities; and

• foreign currency fluctuations.

The Company’s business strategy includes ongoing efforts to engage in material acquisitions of ownership interests in entities in the marketing communications services industry. The Company intends to finance these acquisitions by using available cash from operations, from borrowings under its current Financing Agreement and through incurrence of bridge or other debt financing, either of which may increase the Company’s leverage ratios, or by issuing equity, which may have a dilutive impact on existing shareholders proportionate ownership. At any given time, the Company may be engaged in a number of discussions that may result in one or more material acquisitions. These opportunities require confidentiality and may involve negotiations that require quick responses by the Company. Although there is uncertainty that any of these discussions will result in definitive agreements or the completion of any transactions, the announcement of any such transaction may lead to increased volatility in the trading price of the Company’s securities.

Investors should carefully consider these risk factors, and the risk factors outlined in more detail in the Company’s 2009 Annual Report on Form 10-K under the caption “Risk Factors”, and in the Company’s other SEC filings.

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Item 3.   Quantitative and Qualitative Disclosures about Market Risk  

The Company is exposed to market risk related to interest rates and foreign currencies.

Debt Instruments:   At March 31, 2010, the Company’s debt obligations consisted of amounts outstanding under its WF Credit Agreement and Senior Notes.  The Senior Notes bear a fixed 11% interest rate. The WF Credit Agreement bears interest at variable rates based upon the Eurodollar rate; US bank prime rate and, US base rate, at the Company’s option. The Company’s ability to obtain the required bank syndication commitments depends in part on conditions in the bank market at the time of syndication. Given the existing level of debt of $10.3 million, as of March 31, 2010, a 1.0% increase or decrease in the weighted average interest rate, which was 6.25% at March 31, 2010, would have an interest impact of approximately $0.1 million annually.

Foreign Exchange:   The Company conducts business in four currencies, the US dollar, the Canadian dollar, Jamaican dollar and the British Pound. Our results of operations are subject to risk from the translation to the US dollar of the revenue and expenses of our non-US operations. The effects of currency exchange rate fluctuations on the translation of our results of operations are discussed in the “Management’s Discussion and Analysis of Financial Condition and Result of Operations”. For the most part, our revenues and expenses incurred related to our non-US operations are denominated in their functional currency. This minimizes the impact that fluctuations in exchange rates will have on profit margins. The Company does not enter into foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.

The Company is exposed to foreign currency fluctuations relating to its intercompany balances between the US and Canada.  For every one cent change in the foreign exchange rate between the US and Canada, the Company will not incur a material impact to its financial statements.

Item 4.   Controls and Procedures  

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be included in our SEC reports is recorded, processed, summarized and reported within the applicable time periods specified by the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), who is our principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. However, the Company’s disclosure controls and procedures are designed to provide reasonable assurances of achieving the Company’s control objectives.

We conducted an evaluation, under the supervision and with the participation of our management, including our CEO, our CFO and our management Disclosure Committee, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) of the Exchange Act. Based on that evaluation, the Company has concluded that its disclosure controls and procedures were effective as of March 31, 2010.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the foregoing evaluation that occurred during the first quarter of 2010 that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION  

Item 1.     Legal Proceedings  

The Company’s operating entities are involved in legal proceedings of various types. While any litigation contains an element of uncertainty, the Company has no reason to believe that the outcome of such proceedings or claims will have a material adverse effect on the financial condition or results of operations of the Company.

Item 1A.   Risk Factors  

There are no material changes in the risk factors set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds    

None

Item 3.   Defaults Upon Senior Securities

None

Item 4.   Reserved

Item 5 . Other Information

None

Item 6.  Exhibits

The exhibits required by this item are listed on the Exhibit Table.

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SIGNATURES  

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MDC PARTNERS INC.

/s/ Michael Sabatino

Michael Sabatino

Senior Vice President, Chief Accounting Officer

May 7, 2010

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EXHIBIT INDEX

Exhibit No.	Description
10.1.1	First Amendment, dated March 19, 2010, to Credit Agreement, dated as of October 23, 2009 by and among the Company, Maxxcom Inc., a Delaware corporation, each of their subsidiaries party thereto, Wells Fargo Foothill, LLC (now Wells Fargo Capital Finance, LLC), as agent, and the lenders party thereto.*
10.1.2	Consent and Second Amendment, dated May 6, 2010, to Credit Agreement, dated as of October 23, 2009 by and among the Company, Maxxcom Inc., a Delaware corporation, each of their subsidiaries party thereto, Wells Fargo Foothill, LLC (now Wells Fargo Capital Finance, LLC), as agent, and the lenders party thereto.*
10.2.1	Membership Interest Purchase Agreement by and among MDC Acquisition Inc., WWG, LLC, a Florida limited liability company, Todd Graham, Kevin Berg, Vincent Parinello, Daniel K. Gregory, Stephen Groth, and Sean M. O’Toole, dated as of March 1, 2010.*
10.2.2	Amended and Restated Limited Liability Company Agreement of The Arsenal LLC (f/k/a Team Holdings LLC) by and among MDC Acquisition Inc., WWG, LLC, and WWG2, LLC, dated as of March 1, 2010.*
10.3.1	Membership Unit Purchase Agreement by and among MF+P Acquisition Co., Integrated Media Solutions, LLC, a New York limited liability company, Robert Ingram, Desiree Du Mont and Ron Corvino, dated as of April 30, 2010.*
10.3.2	Amended and Restated Limited Liability Company Agreement of Integrated Media Solutions Partners LLC by and among MF+P Acquisition Co. and Integrated Media Solutions, LLC, dated as of April 30, 2010.*
12	Statement of computation of ratio of earnings to fixed charges.*
31.1	Certification by Chief Executive Officer pursuant to Rules 13a - 14(a) and 15d - 14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification by Chief Financial Officer pursuant to Rules 13a - 14(a) and 15d - 14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification by Chief Executive Officer pursuant to 18 USC. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification by Chief Financial Officer pursuant to 18 USC. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
99.1	Schedule of ownership by operating subsidiary.*

* Filed electronically herewith.

EX-10.1.1

Exhibit 10.1.1

FIRST AMENDMENT

TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of March 19, 2010, by and among the Lenders party hereto, WELLS FARGO CAPITAL FINANCE, LLC, formerly known as Wells Fargo Foothill, LLC, a Delaware limited liability company, as the agent for the Lenders (in such capacity, "Agent"), MDC PARTNERS INC., a Canadian corporation ("Parent"), MAXXCOM INC., a Delaware corporation ("Borrower"), and each of the Subsidiaries of Parent identified on the signature pages hereof (together with Parent and Borrower, the "Loan Parties").

WHEREAS, Parent, Borrower, the other Loan Parties, Agent, and Lenders are parties to that certain Credit Agreement dated as of October 23, 2009 (as amended, modified or supplemented from time to time, the "Credit Agreement");

WHEREAS, Borrower, Agent and Lenders have agreed to amend the Credit Agreement in certain respects, subject to the terms and conditions contained herein.

NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties hereto agree as follows:

1.           Defined Terms.  Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Credit Agreement.

2.           Amendments to Credit Agreement.  Subject to the satisfaction of the conditions set forth in Section 4 below and in reliance upon the representations and warranties of Borrower set forth in Section 5 below, the Credit Agreement is amended as follows:

(A)        Clause (ii) of Section 2.4(e) of the Credit Agreement is hereby amended and restated in its entirety as follows:

"(ii)       In the event any Loan Party desires to make any payment in respect of Earn-outs and (x) a Default or Event of Default then exists or would otherwise arise as a result thereof or (y) after giving effect to such Restricted Junior Payment, Excess Availability would be less than $15,000,000, Borrower agrees to prepay the Obligations in full and terminate the Revolver Commitments prior to making such payment."

(B)         Section 5.17(k) of the Credit Agreement is hereby amended and restated in its entirety as follows:

"(k)       In the event any Loan Party desires to make any payment, or series of payments in a fiscal quarter, in respect of Earn-outs that exceeds $5,000,000, Borrower shall provide at least 15 days prior written notice thereof to Agent."

(C)         Clause (e) of Section 6.9 of the Credit Agreement is hereby amended and restated in its entirety as follows:

"(e)       any Loan Party may make payments in respect of Earn-outs, and"

(D)        Clause (b) of the defined term "Permitted Acquisition" in Schedule 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

"(b)       no Indebtedness will be incurred, assumed, or would exist with respect to Parent or any Subsidiary of Parent as a result of such Acquisition (other than (i) Earn-outs pursuant to the terms of the definitive documentation for such Acquisition and (ii) Acquired Indebtedness), and no Liens will be incurred, assumed, or would exist with respect to the assets of Parent or any Subsidiary of Parent as a result of such Acquisition other than Permitted Liens,"

(E)         Clause (j) of the defined term "Permitted Disposition" in Schedule 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

"(j)        (i) the sale or issuance of Stock (other than Prohibited Stock) of Parent or (ii) the sale or issuance of Stock (other than Prohibited Stock) of any other Loan Party to current or former employees, officers, and directors of Parent or any of its Subsidiaries, their respective estates, spouses or former spouses; provided, that the aggregate value of Stock sold or issued pursuant to this clause (ii) shall not exceed $1,000,000 in any fiscal year,"

3.           Ratification; Other Agreements.  This Amendment, subject to satisfaction of the conditions provided below, shall constitute an amendment to the Credit Agreement and all of the Loan Documents as appropriate to express the agreements contained herein.  In all other respects, the Credit Agreement and the Loan Documents shall remain unchanged and in full force and effect in accordance with their original terms.

4.           Conditions to Effectiveness.  This Amendment shall become effective as of the date hereof and upon the satisfaction of the following conditions precedent:

(a)         Agent shall have received a fully executed copy of this Amendment; and

(b)         No Default or Event of Default shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment.

5.           Representations and Warranties.  In order to induce Agent and Lenders to enter into this Amendment, each Loan Party hereby represents and warrants to Agent and Lenders, after giving effect to this Amendment:

(a)         All representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct on and as of the date of this Amendment, in each case as if then made, other than representations and warranties that expressly relate solely to an earlier date (in which case such representations and warranties were true and correct on and as of such earlier date);

(b)         No Default or Event of Default has occurred and is continuing; and

(c)         the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of such Loan Party.

6.           Miscellaneous.

(a)          Expenses.  Borrower agrees to pay on demand all costs and expenses of Agent (including the reasonable fees and expenses of outside counsel for Agent) in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith.  All obligations provided herein shall survive any termination of this Amendment and the Credit Agreement as amended hereby.

(b)         Governing Law.  This Amendment shall be a contract made under and governed by the internal laws of the State of New York.

(c)         Counterparts.  This Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment.

7.           Release.

(a)          In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and Lenders, and their successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other Persons being hereinafter referred to collectively as the "Releasees" and individually as a "Releasee"), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a "Claim" and collectively, "Claims") of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which such Loan Party or any of its respective successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, for or on account of, or in relation to, or in any way in connection with any of the Credit Agreement, or any of the other Loan Documents or transactions thereunder or related thereto.

(b)         Each Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

(c)         Each Loan Party agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized and delivered as of the date first above written.

MDC PARTNERS INC., a federal company
organized under the laws of Canada
By:	/s/
Name: Robert E. Dickson
Title:   Managing Director
By:	/s/
Name: Glenn Gibson
Title:   Senior Vice President

MAXXCOM INC.,
a Delaware corporation
By:	/s/

Name:	David B. Doft
Title:	Authorized Signatory

By: /s/

Name:	Mitchell Gendel
Title:	Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

ACCENT MARKETING SERVICES, L.L.C.,

a Delaware limited liability company

ADRENALINA LLC,

a Delaware limited liability company

ATTENTION PARTNERS LLC,

a Delaware limited liability company

BRUCE MAU DESIGN (USA) LLC,

a Delaware limited liability company

COLLE & MCVOY LLC,

a Delaware limited liability company

COLLE & MCVOY, INC.,

a Minnesota corporation

COMPANY C COMMUNICATIONS, INC.,

a Delaware corporation

COMPANY C COMMUNCATIONS LLC,

a Delaware limited liability company

CPB ACQUISITION INC.,

a Delaware corporation

CRISPIN PORTER & BOGUSKY LLC,

a Delaware limited liability company

DOTGLU LLC,

a Delaware limited liability company

FLETCHER MARTIN LLC,

a Delaware limited liability company

HELLO ACQUISITION INC.,

a Delaware corporation

HL GROUP PARTNERS LLC,

a Delaware limited liability company

HW ACQUISITION LLC,

a Delaware limited liability company

Signature Pages to First Amendment to Credit Agreement

KBP HOLDINGS LLC,

a Delaware limited liability company

KIRSHENBAUM BOND & PARTNERS LLC,

a Delaware limited liability company

KIRSHENBAUM BOND & PARTNERS WEST LLC,

a Delaware limited liability company

MARGEOTES FERTITTA POWELL LLC,

a Delaware limited liability company

MAXXCOM (USA) FINANCE COMPANY,

a Delaware corporation

MAXXCOM (USA) HOLDINGS INC.,

a Delaware corporation

MDC ACQUISITION INC.,

a Delaware Corporation

MDC CORPORATE (US) INC.,

a Delaware corporation

MDC TRAVEL, INC.,

a Delaware corporation

MDC/KBP ACQUISITION INC.,

a Delaware corporation

MF+P ACQUISITION CO.,

a Delaware corporation

MONO ADVERTISING, LLC,

a Delaware limited liability company

NORTHSTAR RESEARCH GP LLC,

a Delaware limited liability company

NORTHSTAR RESEARCH HOLDINGS USA LP,

a Delaware limited partnership

NORTHSTAR RESEARCH PARTNERS (USA) LLC,

a Delaware limited liability company

REDSCOUT LLC,

a Delaware limited liability company

Signature Pages to First Amendment to Credit Agreement

SKINNY NYC LLC,

a Delaware limited liability company

SOURCE MARKETING LLC,

a New York limited liability company

TARGETCOM LLC,

a Delaware limited liability company

TC ACQUISITION INC.,

a Delaware corporation

TRACK 21 LLC,

a Delaware limited liability company

TRAFFIC GENERATORS, LLC,

a Georgia limited liability company

TREND CORE, LLC,

a Delaware limited liability company

VITROROBERTSON LLC,

a Delaware limited liability company

YAMAMOTO MOSS MACKENZIE, INC.,

a Delaware corporation

ZG ACQUISITION INC.,

a Delaware corporation

ZIG (USA) LLC,

a Delaware limited liability company

ZYMAN GROUP, LLC,

a Delaware limited liability company

By: /s/

Name:	David B. Doft
Title:	Authorized Signatory

By: /s/

Name:	Mitchell Gendel
Title:	Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

HELLO DESIGN, LLC,
a California limited liability company
By:	/s/

Name:	Mitchell Gendel
Title:	Authorized Signatory

By: /s/

Name:	David Lai
Title:	Authorized Signatory

ASHTON POTTER CANADA INC.,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

MAXXCOM INC.,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

HENDERSON BAS, an Ontario general partnership, by the members of its management committee
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

COMPUTER COMPOSITION OF CANADA INC.,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

BRUCE MAU DESIGN INC.,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

BRUCE MAU HOLDINGS LTD.,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:    Authorized Signatory

ALLARD JOHNSON COMMUNICATIONS INC.,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

TREE CITY INC.,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

VERITAS COMMUNICATIONS INC.,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

656712 ONTARIO LIMITED,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

NORTHSTAR RESEARCH HOLDINGS CANADA INC., an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

NORTHSTAR RESEARCH PARTNERS INC.,
an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

X CONNECTIONS INC., an Ontario corporation
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

STUDIO PICA INC., a federal company organized under the laws of Canada
By:	/s/
Name: Mitchell Gendel
Title:   Authorized Signatory
By:	/s/
Name: David B. Doft
Title:   Authorized Signatory

ZIG INC., an Ontario corporation
By:	/s/

Name:	Mitchell Gendel
Title:	Authorized Signatory

By: /s/

Name:	David B. Doft
Title:	Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

ACCUMARK COMMUNICATIONS INC.,
an Ontario corporation
By:	/s/

Name:	Mitchell Gendel
Title:	Authorized Signatory

By: /s/

Name:	David B. Doft
Title:	Authorized Signatory

MAXXCOM (NOVA SCOTIA) CORP.,
a Nova Scotia corporation
By:	/s/

Name:	Mitchell Gendel
Title:	Authorized Signatory

By: /s/

Name:	David B. Doft
Title:	Authorized Signatory

BRYAN MILLS IRADESSO CORP.,
an Ontario corporation
By:	/s/

Name:	Mitchell Gendel
Title:	Authorized Signatory

By: /s/

Name:	David B. Doft
Title:	Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

COMMUNIFX PARTNERS LLC,
a Delaware limited liability company
By:	/s/
Name:	David B. Doft
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

TEAM HOLDINGS LLC,
a Delaware limited liability company
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory
NEW TEAM LLC,
a Delaware limited liability company
By:	/s/
Name:	David B. Doft
Title:	Authorized Signatory
OUTERACTIVE, LLC,
a Delaware limited liability company
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory
PULSE MARKETING, LLC,
a Delaware limited liability company
By:	/s/
Name:	David B. Doft
Title:	Authorized Signatory

Signature Pages to First Amendment to Credit Agreement

WELLS FARGO CAPITAL FINANCE, LLC, formerly known as Wells Fargo Foothill, LLC,
a Delaware limited liability company, as Agent and as a Lender
By:	/s/
Title:	Senior Vice President

Signature Pages to First Amendment to Credit Agreement

EX-10.1.2

Exhibit 10.1.2

CONSENT AND SECOND AMENDMENT

TO CREDIT AGREEMENT

THIS CONSENT AND SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of May 6, 2010, by and among the Lenders party hereto, WELLS FARGO CAPITAL FINANCE, LLC, formerly known as Wells Fargo Foothill, LLC, a Delaware limited liability company, as the agent for the Lenders (in such capacity, "Agent"), MDC PARTNERS INC., a Canadian corporation ("Parent"), MAXXCOM INC., a Delaware corporation ("Borrower"), and each of the Subsidiaries of Parent identified on the signature pages hereof (together with Parent and Borrower, the "Loan Parties").

WHEREAS, Parent, Borrower, the other Loan Parties, Agent, and Lenders are parties to that certain Credit Agreement dated as of October 23, 2009 (as amended, modified or supplemented from time to time, the "Credit Agreement");

WHEREAS, Borrower hereby acknowledges that Agent currently has the right, pursuant to the terms of the Credit Agreement, to deliver to Borrower a written notice, pursuant to which Borrowing Base II goes into effect (a "Borrowing Base Trigger Notice"); and

WHEREAS, Borrower has requested that Agent and the Lenders agree to (a) forego delivery of a Borrowing Base Trigger Notice during the period set forth herein notwithstanding the right of Agent to deliver such notice during such period and (b) amend and modify the Credit Agreement as provided herein, in each case subject to the terms and provisions hereof.

NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties hereto agree as follows:

1.           Defined Terms.  Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Credit Agreement.

2.           Consent.  Notwithstanding any provision in the Credit Agreement or any other Loan Document to the contrary and subject to the satisfaction of the conditions set forth in Section 5 below, and in reliance on the representations and warranties contained in Section 6 below, Agent and the Lenders hereby agree to forego delivery of a Borrowing Base Trigger Notice during the period commencing on the date hereof and ending on the earlier of (i) May 28, 2010 and (ii) the receipt by Parent, Borrower or any other Loan Party of proceeds from an incurrence of Indebtedness that is permitted pursuant to the terms of the Credit Agreement (it being understood that after the expiration of such period, Agent shall not deliver a Borrowing Base Trigger Notice until such time that Excess Availability is less than the Applicable Excess Availability Amount); provided, that Borrower agrees that notwithstanding the limitations set forth in the Fee Letter, Borrower will reimburse Agent for the first four financial audits of Parent or any of its Subsidiaries performed by Agent in the fiscal year ending on December 31, 2010.  Except as expressly set forth in this Amendment, the foregoing consent shall not constitute (1) a modification or alteration of the terms, conditions or covenants of the Credit Agreement or any other Loan Document, or (2) a waiver, release or limitation upon the exercise by Agent or any Lender of any of its rights, legal or equitable, thereunder.

3.           Amendments to Credit Agreement.  Subject to the satisfaction of the conditions set forth in Section 5 below and in reliance upon the representations and warranties of Borrower set forth in Section 6 below, the Credit Agreement is amended as follows:

(a)          Section 1.1 of the Credit Agreement is hereby amended to add the following defined term in appropriate alphabetical order as follows:

"Second Amendment Effective Date" means May 6, 2010."

(b)         The defined term "Maximum Revolver Usage" set forth in Schedule 1.1of the Credit Agreement is hereby amended and restated in its entirety as follows:

""Maximum Revolver Usage" means, as of any date of determination, the amount by which the lesser of (a) the Maximum Revolver Amount and (b) Borrowing Base I, exceeds the Applicable Excess Availability Amount; provided, that, notwithstanding the foregoing, during the period commencing on the Second Amendment Effective Date and ending on the earlier of (a) May 28, 2010 and (b) the receipt by Parent, Borrower or any other Loan Party of proceeds from an incurrence of Indebtedness that is permitted pursuant to the terms of this Agreement, Maximum Revolver Usage means $65,000,000."

4.           Ratification; Other Agreements.  This Amendment, subject to satisfaction of the conditions provided below, shall constitute an amendment to the Credit Agreement and all of the Loan Documents as appropriate to express the agreements contained herein.  In all other respects, the Credit Agreement and the Loan Documents shall remain unchanged and in full force and effect in accordance with their original terms.

5.           Conditions to Effectiveness.  This Amendment shall become effective as of the date hereof and upon the satisfaction of the following conditions precedent:

(a)         Agent shall have received a fully executed copy of this Amendment; and

(b)         No Default or Event of Default shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment.

6.           Representations and Warranties.  In order to induce Agent and Lenders to enter into this Amendment, each Loan Party hereby represents and warrants to Agent and Lenders, after giving effect to this Amendment:

(a)         All representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct on and as of the date of this Amendment, in each case as if then made, other than representations and warranties that expressly relate solely to an earlier date (in which case such representations and warranties were true and correct on and as of such earlier date);

(b)         No Default or Event of Default has occurred and is continuing; and

(c)         the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of such Loan Party.

2

7.           Miscellaneous.

(a)         Expenses.  Borrower agrees to pay on demand all costs and expenses of Agent (including the reasonable fees and expenses of outside counsel for Agent) in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith.  All obligations provided herein shall survive any termination of this Amendment and the Credit Agreement as amended hereby.

(b)         Governing Law.  This Amendment shall be a contract made under and governed by the internal laws of the State of New York.

(c)         Counterparts.  This Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment.

8.           Release.

(a)         In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and Lenders, and their successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other Persons being hereinafter referred to collectively as the "Releasees" and individually as a "Releasee"), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a "Claim" and collectively, "Claims") of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which such Loan Party or any of its respective successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, for or on account of, or in relation to, or in any way in connection with any of the Credit Agreement, or any of the other Loan Documents or transactions thereunder or related thereto.

(b)         Each Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

(c)         Each Loan Party agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

[Signature Page Follows]

3

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized and delivered as of the date first above written.

MDC PARTNERS INC., a federal company organized under the laws of Canada
By:	/s/
Name:	Robert E. Dickson
Title:	Managing Director
By:	/s/
Name:	Glenn Gibson
Title:	Senior Vice President

MAXXCOM INC., a Delaware corporation
By:	/s/
Name:	Michael Sabatino
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

Signature Pages to Consent and Second Amendment to Credit Agreement

ACCENT MARKETING SERVICES, L.L.C.,

a Delaware limited liability company

ADRENALINA LLC,

a Delaware limited liability company

ATTENTION PARTNERS LLC,

a Delaware limited liability company

BRUCE MAU DESIGN (USA) LLC,

a Delaware limited liability company

COLLE & MCVOY LLC,

a Delaware limited liability company

COLLE & MCVOY, INC.,

a Minnesota corporation

COMMUNIFX PARTNERS LLC,

a Delaware limited liability company

COMPANY C COMMUNICATIONS, INC.,

a Delaware corporation

COMPANY C COMMUNCATIONS LLC,

a Delaware limited liability company

CRISPIN PORTER & BOGUSKY LLC,

a Delaware limited liability company

DOTGLU LLC,

a Delaware limited liability company

EXPECTING PRODUCTS, LLC,

a California limited liability company

FLETCHER MARTIN LLC,

a Delaware limited liability company

HELLO ACQUISITION INC.,

a Delaware corporation

HL GROUP PARTNERS LLC,

a Delaware limited liability company

HW ACQUISITION LLC,

a Delaware limited liability company

Signature Pages to Consent and Second Amendment to Credit Agreement

KBP HOLDINGS LLC,

a Delaware limited liability company

KIRSHENBAUM BOND SENECAL & PARTNERS LLC

(formerly known as Kirshenbaum Bond & Partners LLC),

a Delaware limited liability company

KIRSHENBAUM BOND & PARTNERS WEST LLC,

a Delaware limited liability company

MARGEOTES FERTITTA POWELL LLC,

a Delaware limited liability company

MAXXCOM (USA) FINANCE COMPANY,

a Delaware corporation

MAXXCOM (USA) HOLDINGS INC.,

a Delaware corporation

MDC ACQUISITION INC.,

a Delaware Corporation

MDC CORPORATE (US) INC.,

a Delaware corporation

MDC TRAVEL, INC.,

a Delaware corporation

MDC/CPB HOLDINGS INC.

(formerly known as CPB Acquisition Inc.),

a Delaware corporation

MDC/KBP ACQUISITION INC.,

a Delaware corporation

MF+P ACQUISITION CO.,

a Delaware corporation

MONO ADVERTISING, LLC,

a Delaware limited liability company

NEW TEAM LLC,

a Delaware limited liability company

NORTHSTAR RESEARCH GP LLC,

a Delaware limited liability company

Signature Pages to Consent and Second Amendment to Credit Agreement

NORTHSTAR RESEARCH HOLDINGS USA LP,

a Delaware limited partnership

NORTHSTAR RESEARCH PARTNERS (USA) LLC,

a Delaware limited liability company

OUTERACTIVE, LLC,

a Delaware limited liability company

PULSE MARKETING, LLC,

a Delaware limited liability company

REDSCOUT LLC,

a Delaware limited liability company

SHOUT MEDIA LLC,

a California limited liability company

SKINNY NYC LLC,

a Delaware limited liability company

SLOANE & COMPANY LLC,

a Delaware limited liability company

SOURCE MARKETING LLC,

a New York limited liability company

TARGETCOM LLC,

a Delaware limited liability company

TC ACQUISITION INC.,

a Delaware corporation

THE ARSENAL LLC

(formerly known as Team Holdings LLC),

a Delaware limited liability company

TRACK 21 LLC,

a Delaware limited liability company

TRAFFIC GENERATORS, LLC,

a Georgia limited liability company

VITROROBERTSON LLC,

a Delaware limited liability company

YAMAMOTO MOSS MACKENZIE, INC.,

a Delaware corporation

Signature Pages to Consent and Second Amendment to Credit Agreement

ZG ACQUISITION INC.,

a Delaware corporation

ZIG (USA) LLC,

a Delaware limited liability company

ZYMAN GROUP, LLC,

a Delaware limited liability company

By:	/s/
Name:	Michael Sabatino
Title:	Authorized Signatory

By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory
HELLO DESIGN, LLC, a California limited liability company
By:	/s/
Name:	David Lai
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

ASHTON POTTER CANADA INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Glenn Gibson
Title:	Director

Signature Pages to Consent and Second Amendment to Credit Agreement

MAXXCOM INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Glenn Gibson
Title:	Executive Vice-President

HENDERSON BAS, an Ontario general partnership, by the members of its management committee
By:	/s/
Name:	Robert E. Dickson
Title:	Member
By:	/s/
Name:	Glenn Gibson
Title:	Member

COMPUTER COMPOSITION OF CANADA INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Glenn Gibson
Title:	Director

Signature Pages to Consent and Second Amendment to Credit Agreement

BRUCE MAU DESIGN INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Glenn Gibson
Title:	Director

BRUCE MAU HOLDINGS LTD., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Glenn Gibson
Title:	Treasurer

ALLARD JOHNSON COMMUNICATIONS INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Richard Brott
Title:	Director

Signature Pages to Consent and Second Amendment to Credit Agreement

TREE CITY INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Glenn Gibson
Title:	Director

VERITAS COMMUNICATIONS INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Glenn Gibson
Title:	Director

656712 ONTARIO LIMITED, an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Glenn Gibson
Title:	Director

Signature Pages to Consent and Second Amendment to Credit Agreement

NORTHSTAR RESEARCH HOLDINGS CANADA INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Gavin Swartzman
Title:	Director

NORTHSTAR RESEARCH PARTNERS INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Gavin Swartzman
Title:	Director

X CONNECTIONS INC., an Ontario corporation
By:	/s/
Name:	Robert E. Dickson
Title:	Director
By:	/s/
Name:	Glenn Gibson
Title:	Director

Signature Pages to Consent and Second Amendment to Credit Agreement

STUDIO PICA INC., a federal company organized under the laws of Canada
By:	/s/
Name:	Richard Brott
Title:	Director
By:	/s/
Name:	Terry M. Johnson
Title:	Director

ZIG INC., an Ontario corporation
By:	/s/
Name:	Michael Sabatino
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

6 DEGREES INTEGRATED COMMUNICATIONS INC. (formerly known as Accumark Communications Inc.), an Ontario corporation
By:	/s/
Name:	Michael Sabatino
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

Signature Pages to Consent and Second Amendment to Credit Agreement

MAXXCOM (NOVA SCOTIA) CORP., a Nova Scotia corporation
By:	/s/
Name:	Michael Sabatino
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

BRYAN MILLS IRADESSO CORP., an Ontario corporation
By:	/s/
Name:	Michael Sabatino
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

Signature Pages to Consent and Second Amendment to Credit Agreement

SHOUT MEDIA LLC, a California limited liability company
By:	/s/
Name:	Michael Sabatino
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

EXPECTING PRODUCTIONS, LLC, a California limited liability company     by: Shout Media LLC, its sole member
By:	/s/
Name:	Michael Sabatino
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

SLOANE & COMPANY LLC, a Delaware limited liability company
By:	/s/
Name:	Michael Sabatino
Title:	Authorized Signatory
By:	/s/
Name:	Mitchell Gendel
Title:	Authorized Signatory

Signature Pages to Consent and Second Amendment to Credit Agreement

WELLS FARGO CAPITAL FINANCE, LLC, formerly known as Wells Fargo Foothill, LLC, a Delaware limited liability company, as Agent and as a Lender
By:	/s/
Title:	Senior Vice President

Signature Pages to Consent and Second Amendment to Credit Agreement

EX-10.2.1 4 v183284_ex10-2x1.htm

Exhibit 10.2.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT

by and among

MDC ACQUISITION INC.,

WWG, LLC,

TODD GRAHAM,

KEVIN BERG,

VINCENT PARINELLO,

DANIEL K. GREGORY,

STEPHEN GROTH

and

SEAN M. O'TOOLE

Dated as of March 1, 2010

MEMBERSHIP INTEREST PURCHASE AGREEMENT

MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") dated as of March 1, 2010, by and among MDC ACQUISITION INC., a Delaware corporation (the "Purchaser"), WWG, LLC, a Florida limited liability company ("WWG"), TODD GRAHAM ("Graham"), KEVIN BERG ("Berg"), VINCENT PARINELLO ("Parinello"), DANIEL K. GREGORY ("Gregory"), STEPHEN GROTH ("Groth"), and SEAN M. O'TOOLE ("O'Toole"; and together with Graham, Berg, Parinello, Gregory and Groth, collectively, the "Principals", and individually a "Principal") and solely for purposes of Sections 7.6.6 and 8.19, MDC Partners Inc., a corporation existing under the laws of Canada ("MDC").

WITNESSETH:

WHEREAS, WWG was (x) the sole shareholder of TEAM Enterprises Inc. a Massachusetts corporation ("TEAM") and (y) the sole member of (A) OuterActive, LLC, a Delaware limited liability company ("O-A") and (B) Pulse Marketing, LLC, a Delaware limited liability company ("Pulse");

WHEREAS, WWG formed NEW TEAM LLC, a Delaware limited liability company ("NT"), as its sole member;

WHEREAS, WWG caused TEAM to contribute substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business, to NT pursuant to a Contribution Agreement (General Assignment, Bill of Sale and Assumption Agreement) (the "NT Conveyance Document");

WHEREAS, WWG and WWG2, LLC, a Florida limited liability company ("WWG2") formed (the "Formation") TEAM HOLDINGS LLC, a Delaware limited liability company (the "Company"), with WWG owning 99% of the issued and outstanding membership interests in the Company and WWG2 owning 1% of the issued and outstanding membership interests in the Company (the membership interests of the Company collectively referred to as the "Membership Interests");

WHEREAS, simultaneously with the Formation, WWG and WWG2 executed and delivered a Limited Liability Company Agreement of the Company (the "Original Operating Agreement"), pursuant to which WWG transferred 100% of its equity ownership in (x) NT, (y) O-A and (z) Pulse to the Company, such that following such transfer, the Company was the sole member of each of NT, O-A and Pulse (NT, O-A and Pulse hereinafter referred to collectively as the "Subsidiaries", and individually as a "Subsidiary");

WHEREAS, WWG desires to sell, and the Purchaser desires to purchase, 60% of the Membership Interests (the "Purchased Interests"), pursuant to the provisions of this Agreement such that after giving effect to such purchase, the Membership Interests will be owned as follows: the Purchaser – 60%; WWG – 39%; and WWG2 – 1%;

WHEREAS, simultaneously with the execution and delivery of this Agreement, the Purchaser, WWG, WWG2 and the Company are executing and delivering an Amended and Restated Limited Liability Company Agreement of the Company (the "Operating Agreement") attached hereto as Exhibit A (pursuant to which the Purchased Interests shall be redesignated as "Class A Units" and the Membership Interests owned by WWG and WWG2 shall be redesignated as "Class B Units" and/or "Class C Units");

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE I

SALE OF THE PURCHASED INTERESTS

Section 1.1      Sale of the Purchased Interests.   Subject to the terms and conditions herein stated, WWG agrees to sell, assign, transfer and deliver to the Purchaser on the Closing Date (as defined in Section 2.2), and the Purchaser agrees to purchase from WWG on the Closing Date, the Purchased Interests.

ARTICLE II

PURCHASE PRICE AND CLOSING

Section 2.1      Purchase Price; Working Capital Adjustment.

2.1.1        Purchase Price.  In full consideration for the purchase by the Purchaser of the Purchased Interests, the purchase price (the "Purchase Price"), shall be calculated and paid by the Purchaser to WWG, as set forth below (capitalized terms used in this Article II and not otherwise defined, shall have the meaning ascribed to such terms in Sections 2.1.2 or 2.1.3 below):

(a)       Closing Payment.  At the Closing, the Purchaser shall pay to WWG an amount equal to $11,000,000 ("CP").

(b)      Working Capital Payment.  If the Closing Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.4, is less than the Target Working Capital (such difference being referred to herein as the "Working Capital Shortfall"), then within five business days after the Special Determination (as defined in Section 2.1.4(i) below) and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.4, (A) WWG shall pay to the Purchaser 60% of the Working Capital Shortfall and (B) immediately thereafter, WWG, WWG2 and the Purchaser shall contribute to the capital of the Company as a contribution to capital, 39% by WWG, 1% by WWG2 and 60% by the Purchaser, respectively, of the Working Capital Shortfall.  If WWG fails to make the payment referred to in (A) above or if WWG or WWG2 fails to make the contribution referred to in (B) above, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset such amount against any future Purchase Price payments to WWG.  If the Closing Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.4, is greater than Target Working Capital, within five days after the Special Determination and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.4, the Company shall make a distribution to WWG in the amount of the difference between Target Working Capital and the Closing Date Working Capital. Any amount paid pursuant to this Section 2.1.1(b) shall be referred to as the "Working Capital Payment."

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(c)       First Interim Payment. Provided that WWG shall not have validly made a FIP Prepayment Election (as defined in Section 2.1.1(h) below), within five business days after the Annual Determination for calendar year 2010 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall pay to WWG the First Interim Payment ("FIP"), calculated as follows:

FIP shall equal the lesser of:

(A)     $5,000,000

and

(B)      {60% x [5.0 x (2009 PBT + 2010 PBT)]} – {CP}

                                                      2

(d)      First Additional Payment. Within five business days after the Annual Determination for calendar year 2010 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall pay to WWG the First Additional Payment ("FAP"), calculated as follows:

FAP = 90% x (2010 Adjusted Profits x 40%)

; provided, however, in the event that 2010 Adjusted Profits is less than the result of (x) $1,833,333 divided by (y) 60%, then FAP shall equal (A) the excess, if any, of (i) 2010 Adjusted Profits over (ii) $1,833,333, multiplied by (B) 90%.

(e)       Final Interim Payment. Provided that WWG shall not have validly made a FIIP Prepayment Election (as defined in Section 2.1.1(h) below), within five business days after the Annual Determination for calendar year 2011 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall, subject to Section 2.1.1(i) below, pay to WWG the Final Interim Payment ("FIIP"), calculated as follows:

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(A)     In the event both:

(x) (2009 PBT + 2010 PBT) is equal to or greater than $6,333,333

                                    2

and

(y) 2011 PBT is equal to or greater than {90% x (2009 PBT + 2010 PBT)},

                       2

then:

FIIP = {$19,000,000} – {CP + FIP}

or

(B)      In the event

(x) (2009 PBT + 2010 PBT) is less than $6,333,333

                        2

or

(y) 2011 PBT is less than {90% x (2009 PBT + 2010 PBT)},

          2

then:

FIIP = {60% x [4.5 x (2009 PBT + 2010 PBT + 2011 PBT)]} – {CP + FIP}

                                     3

(f)       Second Additional Payment. Within five business days after the Annual Determination for calendar year 2011 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall pay to WWG the Second Additional Payment ("SAP"), calculated as follows:

SAP = 90% x (2011 Adjusted Profits x 40%)

; provided, however, in the event that 2011 Adjusted Profits is less than the result of (x) the sum of (i) $2,200,000 plus (ii) (FIP times 20%), divided by (y) 60%, then SAP shall equal (A) the excess, if any, of (i) 2011 Adjusted Profits over (ii) the sum of (X) $2,200,000 plus (Y) (FIP times 20%), multiplied by (B) 90%;

; provided further, however, in the event that 2010 Adjusted Profits were less than $1,833,333, then for purposes of the calculations of SAP above, 2011 Adjusted Profits shall be reduced by the amount of such shortfall.

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(g)      Final Additional Payment.  Within five business days after the Annual Determination for calendar year 2012 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall pay to WWG the Final Additional Payment ("FIAP"), calculated as follows:

FIAP = 90% x (2012 Adjusted Profits x 40%)

; provided, however, in the event that 2012 Adjusted Profits is less than the result of (x) the sum of (i) $2,200,000 plus (ii) (FIP times 20%), plus (iii) (FIIP times 20%), divided by (y) 60%, then FIAP shall equal (A) the excess, if any, of (i) 2012 Adjusted Profits over (ii) the sum of (X) $2,200,000, plus (Y) (FIP times 20%) plus (Z) (FIIP times 20%), multiplied by (B) 90%;

; provided further, however, in the event that the sum of 2010 Adjusted Profits and 2011 Adjusted Profits were less than the sum of (I) $4,033,333 plus (II) (FIP times 20%), then for purposes of the calculations of FIAP above, 2012 Adjusted Profits shall be reduced by the amount of such shortfall.

(h)      Prepayment Elections.  In the event that changes in United States long-term capital gains tax rates are established which result in either an (x) increase in 2011 long-term capital gains rates from 2010 rates (a "2011 Rate Increase") or (y) an increase in 2012 long-term capital gains rates from 2010 rates or 2011 rates (a "2012 Rate Increase"), WWG shall have the option to elect to receive a prepayment of the FIP (a "FIP Prepayment Election"), in the case of a 2011 Rate Increase, or to receive a prepayment of the FIIP (a "FIIP Prepayment Election"; the FIP Prepayment Election and the FIIP Prepayment Election are sometimes referred to herein as a "Prepayment Election"),  in the case of a 2012 Rate Increase, as follows:

(A)       To exercise a Prepayment Election, (i) WWG shall deliver notice to the Purchaser on or prior to December 10, 2010, in the case of a FIP Prepayment Election, or on or prior to December 10, 2011, in the case of a FIIP Prepayment Election and (ii) WWG shall have timely and fully delivered the 2010 Financial Information or the 2011 Financial Information, as the case may be.

(B)       If a FIP Prepayment Election is validly exercised, then on or prior to December 31, 2010, the Purchaser shall pay to WWG an amount (the "FIP Prepayment") equal to the result of (x) the Estimated FIP divided by (y) the sum of (i) one plus (ii) the MDC Cost of Funds Rate (as defined in Section 2.1.3(vii) below) divided by 4.  Within five business days after the Annual Determination for 2010 and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.4 below, (i) if FIP (as calculated pursuant to Section 2.1.1(c) above using actual 2010 PBT) is greater than Estimated FIP, then the Purchaser shall pay WWG such excess, or (ii) if Estimated FIP is greater than FIP (as calculated pursuant to Section 2.1.1(c) above using actual 2010 PBT), then WWG shall pay the Purchaser such excess.  If WWG fails to pay any amount required to be paid by it to the Purchaser, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset such amount against any future Purchase Price payments to WWG.

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(C)       If a FIIP Prepayment Election is validly exercised, then on or prior to December 31, 2011, the Purchaser shall pay to WWG an amount (the "FIIP Prepayment") equal to the result of (x) the Estimated FIIP divided by (y) the sum of (i) one plus (ii) the MDC Cost of Funds Rate divided by 4.  Within five business days after the Annual Determination for 2011 and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.4 below, (i) if FIIP (as calculated pursuant to Section 2.1.1(e) above using actual 2011 PBT) is greater than Estimated FIIP, then the Purchaser shall, subject to Section 2.1.1(i), pay WWG such excess, or (ii) if Estimated FIIP is greater than FIIP (as calculated pursuant to Section 2.1.1(e) above using actual 2011 PBT), then WWG shall pay the Purchaser such excess.  If WWG fails to pay any amount required to be paid by it to the Purchaser, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset such amount against any future Purchase Price payments to WWG.

(D)       In the event that a Prepayment Election is made, (i) FIP as ultimately determined pursuant to clause (B) above shall be the value for "FIP" and (ii) FIIP as ultimately determined pursuant to clause (C) shall be the value for "FIIP" for purposes of making other calculations of Purchase Price that rely on FIP or FIIP, as the case may be.

(i)       Purchase Price Cap. Notwithstanding the foregoing, in no event shall the sum of the CP, FIP (inclusive of any Estimated FIP) and FIIP (inclusive of any Estimated FIIP) be greater than $19,000,000.

(j)       No Negative Payments. In the event that the calculation of FIP, FAP, FIIP, SAP or FIAP, as the case may be, results in an amount which is less than zero, such Purchase Price component shall be deemed to be zero and accordingly, the amount of FIP, FAP, FIIP, SAP or FIAP, as the case may be, included in any Purchase Price calculation, shall be zero

(k)      Payment of the Purchase Price.Payment of each component of the Purchase Price and any payment that is required to be made under Section 2.1 above shall be made in United States Dollars by the Purchaser by direct wire transfer to the account of WWG, as set forth on Schedule 2.1.1 (or to such other account as WWG may notify the Purchaser in writing).  Each of the FIP, FAP, FIIP, SAP or FIAP (including amounts payable pursuant to the Prepayment Election provisions of Section 2.1.1(h) above), as the case may be, shall be deemed to include imputed interest, to the extent required by the Internal Revenue Code of 1986, as amended (the "Code").

2.1.2       PBT.   The term "PBT" for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries, if any, before provision for all federal, state and local income and franchise taxes for such period, determined in accordance with United States generally accepted accounting principles consistently applied ("GAAP"); provided, however, for calendar year 2010, 2010 PBT shall mean the sum of (x) the consolidated PBT of WWG, TEAM, O-A and Pulse from January 1, 2010 through and including the Closing Date (the "Pre-Closing Period") and (y) the consolidated PBT of the Company and its subsidiaries, if any, after the Closing Date through and including December 31, 2010 (the "Post-Closing Period"); and provided that in making such determinations:

6

(i)             neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or TEAM, O-A or Pulse for the Pre-Closing Period), is the named beneficiary or otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

(ii)            for any service rendered or provided to the Company or any Subsidiary thereof by MDC or any of its affiliates (as defined in Section 9.5) (it being understood that except as provided below, no such service shall be rendered or provided without the consent of the Representative (as defined in Section 8.18) while he is still in the full-time employ of the Company or any Subsidiary, and in the event the Representative is not so employed, one of the other Principals, provided that such Principal is then in the full-time employ of the Company or any Subsidiary, or in the event no Principals are so employed, a then senior member of management of the Company or a Subsidiary (in any such case, each such individual being referred to as the "Authorized Officer")), the Company or its subsidiary, as the case may be, shall be charged at the rates agreed to by MDC or one of its affiliates, as the case may be, and the Authorized Officer; and all charges permitted by this clause (ii) shall be treated as an expense;

(iii)           any Losses (as defined in Section 7.2) of a Purchaser Indemnified Party (as defined in Section 7.2) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 and which are fully assumed by WWG and the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(iv)           any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3) shall not be treated as an expense;

(v)            there shall be no charge against income for the payment or accrual of any component of the Purchase Price;

(vi)           the fees and disbursements of WWG's attorneys, accountants and financial advisors incurred prior to or after the Closing in connection with the formation and organization of the Company and the Subsidiaries and the negotiation, preparation and execution of this Agreement and the other documents to be delivered at the Closing hereunder that have either (x) been expensed and paid prior to the Closing or (y) accrued for on the Closing Balance Sheet (as defined in Section 2.1.4(i) hereof), shall not be treated as an expense;

(vii)          the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company's direct or indirect ownership in such subsidiary;

7

(viii)         any extraordinary or non-recurring gains or losses and any gains or losses from the sale of any capital assets, and any gains and losses recognized by the Company or any of its subsidiaries, if any, in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries, if any, shall be excluded from income;

(ix)           the fees and expenses of (1) the Accountants (as defined in Section 2.1.4(i) hereof) in preparing the Special Determination or any Annual Determination or (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder, in excess of $50,000 in any calendar year, shall not be treated as an expense;

(x)            in the event that the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger or similar transaction (an "Acquired Business") on or after the date hereof, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business;

(xi)           any write-off or amortization or depreciation of goodwill arising out of the purchase of the Purchased Interests pursuant to this Agreement shall not be treated as an expense;

(xii)          there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price;

(xiii)         the fees and expenses of Grant Thornton LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010, up to $85,000 shall not be treated as an expense for purposes of 2010 PBT;

(xiv)         any distribution by WWG of any Purchase Price proceeds to its members shall not be treated as an expense;

(xv)          any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense, unless the termination of such Principal's employment was recommended and initiated by the Representative (as defined in Section 8.18 below);

(xvi)         PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses; and

(xvii)        solely with respect to the calculation of 2010 PBT, an amount equal to $459,129 shall not be treated as an expense.

2.1.3        Other Definitions.

(i)            "Target Working Capital" means an amount equal to $1,000,000.

8

(ii)            "Closing Date Working Capital" means the current assets of the Company and the Subsidiaries less the current liabilities of the Company and the Subsidiaries as of the opening of business on March 1, 2010 in accordance with GAAP.

(iii)           "2010 Financial Information" means the following financial information prepared by WWG with respect to the Company and its subsidiaries for calendar year 2010, and delivered to the Purchaser on or prior to December 10, 2010: (x) a consolidated balance sheet of the Company and its subsidiaries as at November 30, 2010 and the related statement of income for the month of November and the eleven months then ended and (y) a good faith reasonable forecasted statement of income for the 2010 calendar year, including the Company's estimate of (A) 2010 PBT ("WWG’s Estimated 2010 PBT") and (B) Estimated FIP, each such estimate to be based upon such financial statements included within the 2010 Financial Information.

(iv)           "2011 Financial Information" means the following financial information prepared by WWG with respect to the Company and its subsidiaries for calendar year 2011, and delivered to the Purchaser on or prior to December 10, 2011: (x) a consolidated balance sheet of the Company and its subsidiaries as at November 30, 2011 and the related statement of income for the month of November and the eleven months then ended and (y) a good faith reasonable forecasted statement of income for the 2011 calendar year, including the Company's estimate of (A) 2011 PBT ("WWG’s Estimated 2011 PBT") and (B) Estimated FIIP, each such estimate to be based upon such financial statements included within the 2011 Financial Information.

(v)            "Estimated FIP" means an amount equal to (x) the amount of FIP as calculated pursuant to Section 2.1.1(c) that would have been payable if 2010 PBT were equal to the Estimated 2010 PBT times (y) 85%.

(vi)           "Estimated FIIP" means an amount equal to (x) the amount of FIIP as calculated pursuant to Section 2.1.1(e) that would have been payable if 2011 PBT were equal to the Estimated 2011 PBT times (y) 85%.

(vii)          "MDC Cost of Funds Rate" means 12%.

(viii)         "Adjusted Profits" means, for any year, the result of (i) GAAP PBT (as defined and calculated pursuant to the Operating Agreement) for such year, minus (ii) all Acquisition Company PBT (as defined and calculated pursuant to the Operating Agreement) for such year plus (iii) any Acquisition Free Cash Flow (as defined and calculated pursuant to the Operating Agreement) for such year.

(ix)           "2009 PBT" shall mean, for calendar year 2009, the sum of (x) the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal and state income taxes for such period, determined in accordance with GAAP and as reported in the Company's 2009 audited consolidated financial statements, plus (y) $875,189.

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2.1.4        Accounting Procedures.

(i)            The Purchaser shall, or shall cause BDO Seidman LLP, or another independent accounting firm chosen by the Purchaser (the "Accountants"), as soon as practicable after the Closing, to prepare in accordance with GAAP and deliver to the Representative, a report containing a consolidated balance sheet of the Company and the Subsidiaries as of the close of business on the Closing Date and taking into account the transactions effected by the Formation and the NT Conveyance Document (the "Closing Balance Sheet"), together with a statement of the Accountants based upon such report which sets forth the Closing Date Working Capital (the "Special Determination").  If the Purchaser engages the Accountants, the Purchaser shall have the option, in its sole discretion (and at its sole expense) to instruct the Accountants to audit or perform agreed upon procedures on the Closing Balance Sheet and to determine the scope of such audit or procedures.  If the Representative does not agree that the Special Determination correctly states the Closing Date Working Capital, the Representative shall promptly (but not later than 30 days after the delivery to him of the Special Determination) give written notice to the Purchaser of any exceptions thereto (in reasonable detail describing the nature of the disagreement asserted).  If the Representative and the Purchaser reconcile their differences, the Closing Date Working Capital calculation shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  If the dispute relates to an accounting issue and if the Representative and the Purchaser are unable to reconcile their differences in writing within 20 days after written notice of exceptions is delivered to the Purchaser (the "Reconciliation Period"), the accounting items in dispute shall be submitted to a mutually acceptable accounting firm (other than the Accountants) selected from any of the four largest accounting firms in the United States in terms of gross revenues (the "Independent Auditors") for final determination.  The Closing Date Working Capital calculation shall be deemed adjusted in accordance with the determination of the Independent Auditors and shall become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  The Independent Auditors shall consider only the accounting items in dispute and shall be instructed to act within 20 days (or such longer period as the Representative and the Purchaser may agree) to resolve all accounting items in dispute.  If the dispute involves a non-accounting issue and such dispute cannot be reconciled within the Reconciliation Period, the dispute shall be settled by a court of competent jurisdiction.  If the Representative does not give written notice of any exception within 30 days after the delivery to it of the Special Determination or if the Representative gives written notification of his acceptance of the Closing Date Working Capital prior to the end of such 30 day period, the Closing Date Working Capital set forth in the Special Determination shall thereupon become binding, final and conclusive upon all the parties hereto and enforceable in a court of law.

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(ii)            As soon as reasonably practicable after receiving WWG's Estimated 2010 PBT or WWG’s Estimated 2011 PBT, as the case may be, the Purchaser shall use its reasonable best efforts to review such calculation.  If the Purchaser does not agree with WWG's Estimated 2010 PBT or WWG’s Estimated 2011 PBT, as the case may be, the Purchaser shall promptly give written notice to the Representative of any exceptions thereto and provide its calculation of Estimated 2010 PBT or Estimated 2011 PBT, as the case may be (the "Purchaser's Estimated 2010 PBT" or the "Purchaser's Estimated 2011 PBT").  If the Representative and the Purchaser reconcile their differences prior to (x) December 24, 2010 with respect to Estimated 2010 PBT, such agreed upon calculation shall be deemed to be Estimated 2010 PBT for purposes of calculating Estimated FIP or (y) December 24, 2011 with respect to Estimated 2011 PBT, such agreed upon calculation shall be deemed to be Estimated 2011 PBT for purposes of calculating Estimated FIIP.  If the Purchaser and the Representative are unable to reconcile their differences prior to (x) December 24, 2010 with respect to Estimated 2010 PBT, then there shall be deemed to be no agreement between the Purchaser and the Representative with respect to such calculation and the Purchaser's Estimated 2010 PBT shall be deemed to be Estimated 2010 PBT for purposes of calculating Estimated FIP or (y) December 24, 2011 with respect to Estimated 2011 PBT, then there shall be deemed to be no agreement between the Purchaser and the Representative with respect to such calculation and the Purchaser's Estimated 2011 PBT shall be deemed to be Estimated 2011 PBT for purposes of calculating Estimated FIIP.   If the Purchaser does not give written notice of any exception to WWG’s Estimated 2010 PBT prior to December 24, 2010 or if the Purchaser gives written notification of its acceptance of WWG’s Estimated 2010 PBT prior to December 24, 2010, WWG’s Estimated 2010 PBT shall be deemed to be Estimated 2010 PBT for purposes of Estimated FIP. If the Purchaser does not give written notice of any exception to WWG’s Estimated 2011 PBT prior to December 24, 2011 or if the Purchaser gives written notification of its acceptance of WWG’s Estimated 2011 PBT prior to December 24, 2011, WWG’s Estimated 2010 PBT shall be deemed to be Estimated 2011 PBT for purposes of Estimated FIIP.

(iii)           The Purchaser shall prepare, or cause the Accountants to prepare, as soon as practicable after the end of the calendar years 2010, 2011 and 2012, to prepare in accordance with GAAP, a report containing consolidated balance sheets of the Company and its subsidiaries, if any, as of the close of business on December 31, 2010, December 31, 2011 and December 31, 2012, and related consolidated statements of income of the Company and its subsidiaries, if any, for each calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth the calculation of PBT and Profits for calendar years 2010, 2011 and 2012, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 2.1.4(iii) (the "Annual Determination").  For avoidance of doubt, the Annual Determination for calendar year 2010 shall include PBT of TEAM, O-A and Pulse for the Pre-Closing Period.  If the Purchaser engages the Accountants, the Purchaser shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements for any period and to determine the scope of such audit.  The Purchaser shall deliver, or shall instruct the Accountants to deliver, a copy of each such Annual Determination to the Representative not later than 150 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of the Purchaser.

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(iv)          If the Representative does not agree that the Annual Determination correctly states the calculation of PBT and/or Profits for calendar years 2010, 2011 and 2012, as applicable, the Representative shall promptly (but not later than 30 days after the delivery of such Annual Determination to the Representative) give written notice to the Purchaser of any exceptions thereto (in reasonable detail describing the nature of the disagreement asserted).  If the Representative and the Purchaser reconcile their differences, the Annual Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  If the dispute relates to an accounting issue and if the Representative and the Purchaser are unable to reconcile their differences in writing within the Reconciliation Period, the accounting items in dispute shall be submitted to the Independent Auditors for final determination, and the Annual Determination shall be deemed adjusted in accordance with the determination of the Independent Auditors and shall become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  The Independent Auditors shall consider only the accounting items in dispute and shall be instructed to act within 20 days (or such longer period as the Representative and the Purchaser may agree) to resolve all accounting items in dispute.  If the dispute involves a non-accounting issue and such dispute cannot be reconciled within the Reconciliation Period, the dispute shall be settled by a court of competent jurisdiction. If the Representative does not give written notice of any exception within 30 days after the delivery of the Annual Determination or if the Representative gives written notification of his acceptance of the Annual Determination prior to the end of such 30 day period, such Annual Determination shall thereupon become binding, final and conclusive upon all the parties hereto and enforceable in a court of law.

(v)            In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 2.1.4, then the Purchaser and the Representative agree to select another accounting firm from among the remaining four largest accounting firms in the United States (except the Accountants) in terms of gross revenues to perform the services to be performed under this Section 2.1.4 by the Independent Auditors.  If the Purchaser and the Representative fail to select the Independent Auditors as required by Section 2.1.4(i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either the Purchaser or the Representative may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York to appoint an independent firm of certified public accountants to perform the services required under this Section 2.1.4 by the Independent Auditors.  The fees of JAMS shall be shared equally by the Purchaser and WWG.  For purposes of this Section 2.1.4 the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this Section 2.1.4(v).

(vi)           The Independent Auditors shall determine the party (i.e., the Purchaser or the Representative) whose asserted position as to the calculation of the Closing Date Working Capital, Profits or PBT, as the case may be, is furthest from the determination of the Closing Date Working Capital, Profits or  PBT, as the case may be, by the Independent Auditors, which non-prevailing party (WWG or the Purchaser) shall pay the fees and expenses of the Independent Auditors and shall reimburse the prevailing party for the portion of the fees of JAMS previously paid by it.

2.1.5         Examination of Books and Records.  The books and records of WWG, TEAM, O-A and Pulse (with respect to periods prior to the Closing Date) and the Company and its subsidiaries (if any) shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 2.1.  The Principals, on the one hand, and the Purchaser, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by them to support a position that is contrary to the position taken by the other party.

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Section 2.2       Closing.   The closing of the transactions contemplated by this Agreement (the "Closing") shall take place simultaneously with the execution and delivery of this Agreement on the date hereof, at the offices of Davis & Gilbert LLP, 1740 Broadway, New York, New York 10019 or by the exchange of documents and instruments by mail, courier, telecopy and wire transfer to the extent mutually acceptable to the parties hereto (such date is herein referred to as the "Closing Date").

Section 2.3       Third Party Consents.   Anything in this Agreement to the contrary notwithstanding, in the event an assignment or purported assignment to the Company or any Subsidiary of any of the agreements, contracts or commitments of TEAM, O-A or Pulse pursuant to the Formation and/or the NT Conveyance Document, as applicable, or any claim, right or benefit arising thereunder or resulting therefrom, without the consent of other parties thereto, would constitute a breach thereof or would not result in the Company or any Subsidiary receiving all of the rights of TEAM, O-A or Pulse, as the case may be, thereunder, such agreement, contract or commitment shall be deemed not to have been assigned by TEAM, O-A or Pulse, as the case may be, to the Company or any Subsidiary, as the case may be.  In those circumstances, if requested by the Purchaser, after the Closing, the Principals will use their best efforts to obtain any such consent (excluding the payment of any fees).  If such consent is not obtained and is required to effectively assign any agreement, contract or commitment to the Company or any Subsidiary, WWG and the Principals will cooperate with the Company or such Subsidiary to provide the Company or such Subsidiary with the full claims, rights and benefits thereunder, including enforcement at the cost and for the benefit of the Company or such Subsidiary of any and all rights of TEAM, O-A or Pulse, as the case may be, against a third party thereto arising out of the breach or cancellation by such third party or otherwise, and any amount received by TEAM, O-A or Pulse, as the case may be, in respect thereof shall be held for and paid over to the Company or such Subsidiary.

Section 2.4       Further Assurance; Post Closing Cooperation. WWG will, from time to time, at the request of the Purchaser, whether at or after the Closing Date, execute and deliver such other and further instruments of conveyance, assignment, transfer and consent necessary for the conveyance, assignment and transfer of the Assets pursuant to the NT Conveyance Document.  Following the Closing, upon reasonable advance notice, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data relating to TEAM, the Company and each Subsidiary in its possession with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of tax returns, (ii) the determination or enforcement of rights and obligations under this Agreement, (iii) compliance with the requirements of any Governmental or Regulatory Authority (as defined in Section 3.1.2), (iv) the determination or enforcement of the rights and obligations of any party entitled to indemnification under Article VII, (v) any actual or threatened action or proceeding, and (vi) the verification of the Assets and Assumed Liabilities (as defined in the NT Conveyance Document).

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ARTICLE III

REPRESENTATIONS OF WWG AND THE PRINCIPALS

A.  Each of the Principals severally represents and warrants to and with the Purchaser, as follows:

Section 3.1       Execution and Validity of Agreements; Restrictive Documents.

3.1.1        Execution and Validity.  Each Principal has the full legal right and capacity to enter into this Agreement and to perform his obligations hereunder.  This Agreement has been duly and validly executed and delivered by each Principal and, assuming due authorization, execution and delivery by the Purchaser and each other party hereto, constitutes a legal, valid and binding obligation of each Principal as to himself, enforceable against each Principal in accordance with its terms.  Nothing herein shall be construed to mean that one Principal is binding or has the authority to bind any other Principal.

3.1.2        No Restrictions.  There is no suit, action, claim, investigation or inquiry by any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision ("Governmental or Regulatory Authority"), and no legal, administrative or arbitration proceeding pending or, to WWG's knowledge, threatened against any Principal with respect to the execution, delivery and performance of this Agreement or the transactions contemplated hereby or any other agreement entered into by any Principal in connection with the transactions contemplated hereby.

3.1.3        Non-Contravention.  The execution, delivery and performance by each Principal of his obligations hereunder and the consummation of the transactions contemplated hereby, will not as of the Closing Date (a) result in the violation by any Principal of any statute, law, rule, regulation or ordinance (collectively, "Laws"), or any judgment, decree, order, writ, permit or license (collectively, "Orders"), of any Governmental or Regulatory Authority, applicable to any Principal, or (b) conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require any Principal to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of the assets or properties of any Principal, under any of the terms, conditions or provisions of any agreement, commitment, lease, license, evidence of indebtedness, letter of credit, mortgage, indenture, security agreement, instrument, note, bond, franchise, permit, concession, or other instrument, obligation or agreement of any kind, written or oral (collectively, "Contracts"), to which any Principal is a party or by which any Principal or any of his assets or properties are bound.

3.1.4        Approvals and Consents.  No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which any Principal is a party for the execution and delivery of this Agreement by any Principal, the performance by any Principal of his obligations hereunder or the consummation of the transactions contemplated hereby.

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B.  WWG and the Principals, jointly and severally, represent and warrant to and with the Purchaser, as follows:

Section 3.2      Execution and Validity; Existence and Good Standing.   WWG has the full corporate power and authority to enter into this Agreement and to perform its obligations hereunder and thereunder.  Each of TEAM and NT has the full corporate power and authority to enter into the NT Conveyance Document, and to perform their respective obligations thereunder. The execution and delivery of this Agreement by WWG and the NT Conveyance Document by TEAM and NT, and the consummation by such parties of the transactions contemplated hereby and thereby have been duly authorized by all required corporate action on behalf of such parties.  This Agreement has been duly and validly executed and delivered by WWG and constitutes a legal, valid and binding obligation of WWG, enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors rights generally and subject, as to enforceability, to the effect of general principles of equity.  The NT Conveyance Document has been duly and validly executed and delivered by TEAM and NT, and constitutes the legal, valid and binding obligations of TEAM and NT, enforceable against each of them in accordance with their terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors rights generally and subject, as to enforceability, to the effect of general principles of equity.  The Company and TEAM are each duly organized and are each validly existing and in good standing (including tax status) under the laws of the State of Delaware and the Commonwealth of Massachusetts, respectively, with the full power and authority to own their respective property and to carry on their respective businesses all as and in the places where such properties are now owned or operated or such businesses re now being conducted except where such failure to qualify would not have a material adverse effect on the respective business.  The Company and TEAM are each duly qualified, licensed or admitted to do business and each of them is in good company and tax standing in the jurisdictions set forth on Schedule 3.2, which are the only jurisdictions in which the ownership, use or leasing of their assets and properties, or the conduct or nature of their business, makes such qualification, licensing or admission necessary.

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Section 3.3       Capital Stock; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments.   WWG is the owner of record and beneficially has valid title to 99% of the Membership Interests of the Company and such ownership is free and clear of all Liens.   WWG2 is the owner of record and beneficially has valid title to 1% of the Membership Interests of the Company and such ownership is free and clear of all Liens.  There are no outstanding subscriptions, options, warrants, rights (including "phantom stock rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind providing for the purchase, issuance or sale of any equity or ownership or proprietary interest of the Company, or which grants any Person other than WWG or WWG2 the right to share in the earnings of the Company.  There is no suit, action, claim, or to the knowledge of WWG, investigation or inquiry by any Governmental or Regulatory Authority, and no legal, administrative or arbitration proceeding pending or, to the knowledge of WWG, threatened against a Principal or the Company or any of the Membership Interests, with respect to the execution, delivery and performance of this Agreement, the NT Conveyance Document or the transactions contemplated hereby or thereby or any other agreement entered into by WWG, a Principal or the Company in connection with the transactions contemplated hereby or thereby.  Except for the Subsidiaries, the Company does not, directly or indirectly, own any equity interest in or have any voting rights with respect to any Person.   Schedule 3.3 lists the full legal name of each Subsidiary and all lines of business in which each Subsidiary is participating or engaged.  Each Subsidiary is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, with full power and authority to own its assets and properties and to carry on its business all as and in the places where such properties are now owned or operated or such business is now being conducted.    Each Subsidiary is duly qualified, licensed or admitted to do business and is in good standing in those jurisdictions specified on Schedule 3.3, which are the only jurisdictions in which the ownership, use or leasing of such Subsidiary's assets and properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary, except for those jurisdictions in which the adverse effects of all such failures by the Company and the Subsidiaries to be qualified, licensed or admitted and in good standing can in the aggregate be eliminated without material cost or expense by the Company or a Subsidiary, as the case may be, becoming qualified, licensed or admitted and in good standing.  The Company is the owner of record and beneficially has valid title to 100% of the membership interests of each Subsidiary.  All of the outstanding equity interests in each Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable, have not been issued in violation of any preemptive rights of other equity interest holders, and are owned, beneficially and of record, by the Company (or Subsidiaries wholly owned by the Company) free and clear of all Liens.  There are no (a) outstanding subscriptions, options, warrants, rights (including "phantom stock rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind providing for the purchase, issuance or sale of any equity interests in any Subsidiary, except pursuant to this Agreement or (b) voting trusts, proxies or other commitments, understandings, restrictions or arrangements in favor of any Person other than the Company or the Subsidiary with respect to the voting of or the right to participate in dividends, distributions or other earnings on any equity interest in any Subsidiary.

Section 3.4       Financial Statements and No Material Changes.   Schedule 3.4(A) sets forth (a) the consolidated unaudited balance sheets of WWG and its subsidiaries as at December 31, 2008 and December 31, 2009 (the consolidated unaudited balance sheets of WWG and its subsidiaries as at December 31, 2009, hereinafter referred to as the "Balance Sheet") and the related consolidated unaudited statements of income for the calendar years then ended.  Such financial statements have been prepared in accordance with GAAP throughout the periods indicated except as set forth on Schedule 3.4(B).  Each balance sheet fairly presents the financial condition of the entity or entities included within such balance sheet, at the respective date thereof, and reflects all claims against and all debts and liabilities of such entities, fixed or contingent, as at the respective date thereof, required to be shown thereon under GAAP and the related statements of income present the results of operations for the respective period indicated.  Except for the transactions consummated pursuant to the Formation and the NT Conveyance Document, since December 31, 2009 (the "Balance Sheet Date"), there has been no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations of WWG or the Company.

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Section 3.5       Books and Records.   Except as set forth on Schedule 3.5, all accounts, books, ledgers and official and other records material to the business of TEAM, the Company, or any Subsidiary maintained by or on behalf of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, of whatsoever kind have been properly and accurately kept and completed in all material respects, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein.  Except as set forth on Schedule 3.5, neither TEAM, O-A or Pulse had, and the Company nor any Subsidiary has, any of its records, systems, controls, data or information recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) were not under the exclusive ownership and possession of WWG or are not under the exclusive ownership and possession of the Company or such Subsidiary.  WWG has delivered to the Purchaser complete and correct copies of the Certificates of Formation and the Limited Liability Company Agreements of each of the Company and the Subsidiaries, with all amendments thereto, currently in effect, and copies of the minute books and stock transfer records (or similar transfer records) of the Company and each Subsidiary.

Section 3.6       Title to Properties; Encumbrances; No Prior Activities.

3.6.1         Title to Properties; Encumbrances.  Except for the Excluded Assets listed in the NT Conveyance Document, TEAM, O-A and Pulse, as the case may be, had and the Company and each Subsidiary now has good and valid title to, or enforceable leasehold interests in or valid rights under contract to use, all the properties and assets owned or used by TEAM, O-A and Pulse, as the case may be, (real, personal, tangible and intangible), including, without limitation (a) all the properties and assets reflected in the Balance Sheet, and (b) all the properties and assets purchased or otherwise contracted for by the Company or any Subsidiary since the Balance Sheet Date (except for properties and assets reflected in the Balance Sheet or acquired or otherwise contracted for since the Balance Sheet Date that have been sold or otherwise disposed of in the ordinary course of business), in each case free and clear of all Liens, except for Liens set forth on Schedule 3.6.  The property, plant and equipment conveyed to the Company or any Subsidiary, whether owned or otherwise contracted for, is in a state of good maintenance and repair (ordinary wear and tear excepted) and is adequate and suitable for the purposes for which they are presently being used.

3.6.2         No Prior Activities.  The Company and each Subsidiary was created solely for the purpose of engaging in the transactions contemplated by the consummation of the reorganizations contemplated by the NT Conveyance Document and this Agreement.  Neither the Company nor any Subsidiary has engaged in any activities other than in connection with its formation, the negotiation, execution and delivery of this Agreement, the NT Conveyance Document and the Operating Agreement, and the consummation of the transactions contemplated hereby and thereby.  Except for liabilities incurred in connection with its formation and the consummation of the transactions contemplated by this Agreement, the NT Conveyance Document and the Operating Agreement, neither the Company nor any Subsidiary has incurred any liabilities or entered into any agreements or arrangements with any Person. Prior to the date hereof, neither O-A or Pulse conducted any business of any nature (other than general start-up activities relating to the formation of such companies).

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Section 3.7       Real Property.

3.7.1         Owned Real Property.None of TEAM, O-A, Pulse, the Company or any Subsidiary own any real property (including ground leases) or hold a freehold interest in any real property or any option or right of first refusal or first offer to acquire any real property.

3.7.2         Leased Real Property.  Schedule 3.7.2 contains an accurate and complete list of all real property leases, subleases, real property licenses and other occupancy agreements, including without limitation, any modification, amendment or supplement thereto and any other related document or agreement executed or entered into by WWG, TEAM, O-A or Pulse, as the case may be, and assigned to the Company or any Subsidiary pursuant to the NT Conveyance Document to which the Company or a Subsidiary is a party (as lessee, sublessee, lessor, sublessor, licensor or licensee) (each individually, a "Real Property Lease" and collectively, the "Real Property Leases").  Each Real Property Lease set forth on Schedule 3.7.2 (or required to be set forth on Schedule 3.7.2) is valid, binding and in full force and effect; all rents and additional rents and other sums, expenses and charges due thereunder to date on each such Real Property Lease have been paid; and the lessee has been in peaceable possession since the commencement of the original term of such Real Property Lease and no waiver, indulgence or postponement of the lessee's obligations thereunder has been granted by the lessor.  There exists no default or event of default by WWG, the Company or any Subsidiary or to the knowledge of WWG by any other party to any Real Property Lease; and there exists no occurrence, condition or act (including the purchase of the Purchased Interests hereunder) which, with the giving of notice, the lapse of time or the happening of any further event or condition, would become a default or event of default by WWG, the Company or any Subsidiary under any Real Property Lease, and there are no outstanding claims of breach or indemnification or notice of default or termination of any Real Property Lease.  WWG, TEAM, O-A or Pulse, as the case may be, held and the Company or a Subsidiary, as the case may be, now holds the leasehold estate on all the Real Property Leases free and clear of all Liens except as set forth on Schedule 3.7.2.  The real property leased by the Company and the Subsidiaries is in a state of good maintenance and repair (ordinary wear and tear excepted), adequate and suitable for the purposes for which it is presently being used, and there are no material repair or restoration works likely to be required in connection with any of the leased real properties.  WWG, TEAM, O-A or Pulse, as the case may be, was, and the Company or a Subsidiary now is, in physical possession and actual and exclusive occupation of the whole of each of its leased properties.  To the knowledge of WWG, no environmental claim has been made against WWG, TEAM, O-A, Pulse, the Company or any Subsidiary with respect to any Real Property Lease.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary owes any brokerage commission with respect to any of the Real Property Leases.

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Section 3.8       Contracts.   Schedule 3.8 hereto contains an accurate and complete list of the following Contracts (whether written or oral, but indicating which Contracts are oral) to which the Company or any Subsidiary is currently a party or TEAM, O-A or Pulse, as the case may be, was a party prior to the assignment of the same to the Company or any Subsidiary pursuant to the NT Conveyance Document (and Schedule 3.8 indicates if a listed item has not been assigned to and assumed by the Company or any Subsidiary pursuant to the NT Conveyance Document): (a) all Plans (as such term is defined in Section 3.19), (b) any personal property lease with a fixed annual rental of $10,000 or more, (c) any Contract relating to capital expenditures which involves payments of $25,000 or more in any single transaction or series of related transactions, (d) any Contract relating to the making of a loan or advance to or investment in, any other Person, (e) any agreement, instrument or arrangement evidencing or relating in any way to indebtedness for money borrowed or to be borrowed, whether directly or indirectly, by way of loan, purchase money obligation, guarantee (other than the endorsement of negotiable instruments for collection in the ordinary course of business), conditional sale, purchase or otherwise, (f) any management service, employment, consulting or similar type of Contract which is not cancelable by the Company or any Subsidiary without penalty or other financial obligation within 30 days, (g) any Contract limiting the Company's or any Subsidiary's freedom to engage in any line of business or to compete with any other Person, including, without limitation, any agreement limiting the ability of the Company or any Subsidiary or any of their respective affiliates to take on competitive accounts during or after the term thereof, (h) any collective bargaining or union agreement, (i) any Contract between the Company or any Subsidiary, on the one hand, and any officer or director thereof, on the other hand, not covered by subsection (f) above (including indemnification agreements), (j) any secrecy or confidentiality agreement (other than standard confidentiality agreements in computer software license agreements or agreements with clients entered into in the ordinary course of business), (k) any agreement with respect to any Intellectual Property (as defined in Section 3.14) other than "shrink-wrap" and similar end-user licenses, (l) any agreement with a client required to be listed on Schedule 3.16, (m) any agreement, indenture or other instrument which contains restrictions which affect the ability of the Company or any Subsidiary to make distributions in respect of its equity, (n) any joint venture agreement involving a sharing of profits not covered by clauses (a) through (m) above, (o) any Contract (not covered by another subsection of this Section 3.8) which involves $25,000 or more over the unexpired term thereof and is not cancelable by the Company or any Subsidiary, as the case may be, without penalty or other financial obligation within 30 days; provided, however, Contracts of a similar nature which individually do not involve $25,000 but in the aggregate involve $25,000 or more over the unexpired terms shall also be set forth on Schedule 3.8 (p) any Contract with a media buying service; provided, however, commitments to purchase media in the ordinary course of business do not have to be set forth on Schedule 3.8, and (q) any agreement (not covered by another subsection of this Section 3.8) between the Company or a Subsidiary, on the one hand, and any member of the Company, on the other hand. Notwithstanding anything to the contrary contained above, (x) commitments to media and production expenses which are fully reimbursable from clients, and (y) estimates or purchase orders given in the ordinary course of business relating to the execution of projects, do not have to be set forth on Schedule 3.8. Each Contract which has been assigned to and assumed by the Company or any Subsidiary pursuant to the NT Conveyance Document, as applicable, including without limitation, those required to be set forth on Schedule 3.8, is in full force and effect, and there exists no default or event of default by the Company or any Subsidiary or to the knowledge of WWG, by any other party, or occurrence, condition, or act (including the purchase of the Purchased Interests hereunder) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default thereunder by the Company or any Subsidiary, and there are no outstanding claims of breach or indemnification or notice of default or termination of any such Contract.  Summaries of all oral Contracts contained on Schedule 3.8 are complete and accurate in all material respects.

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Section 3.9       Non-Contravention; Approvals and Consents.   The execution, delivery and performance by any Principal, the Company or any Subsidiary and WWG, TEAM, O-A and Pulse of their respective obligations under this Agreement and the NT Conveyance Document and the consummation of the transactions contemplated hereby and thereby, will not (a) violate, conflict with or result in the breach of any provision of the certificate of formation and limited liability company agreement (or other comparable documents) of the Company or any Subsidiary or WWG, TEAM, O-A and Pulse; (b) result in the violation by the Company or any Subsidiary or WWG, TEAM, O-A and Pulse of any Laws or Orders of any Governmental or Regulatory Authority applicable to any of them or any of their respective assets or properties, or (c) if the consents and notices set forth in Schedule 3.9 are obtained, conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Company or any Subsidiary or WWG, TEAM, O-A or Pulse to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of their respective assets or properties, or under any of the terms, conditions or provisions of any Contract to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or WWG, TEAM, O-A and Pulse or any of their respective assets or properties are or were bound.  Except as set forth in Schedule 3.9, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Company or any Subsidiary or WWG, TEAM, O-A and Pulse is a party, or by which their respective assets or properties were or are bound for the execution and delivery of this Agreement or the NT Conveyance Document, the performance by the Company or any Subsidiary or WWG, TEAM, O-A and Pulse of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby.

Section 3.10     Litigation.   Except as set forth on Schedule 3.10, there is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of WWG, any investigation by) any Governmental or Regulatory Authority, pending or, to the knowledge of WWG, threatened, against the Company or any Subsidiary or WWG, TEAM, O-A and Pulse with respect to this Agreement or the transactions contemplated hereby or by the NT Conveyance Document, or any other agreement entered into by the Company or any Subsidiary or WWG, TEAM, O-A and Pulse in connection with the transactions contemplated hereby, or against or affecting the business or the assets transferred to the Company or any Subsidiary pursuant to the NT Conveyance Document; and no acts, facts, circumstances, events or conditions occurred or exist which are a basis for any such action, proceeding or investigation.  None of the Company, any Subsidiary, WWG, TEAM, O-A or Pulse is subject to any Order entered in any lawsuit or proceeding. Schedule 3.10 also sets forth with respect to each pending or threatened action, suit or proceeding listed thereon, the amount of costs, expenses or damages the Company, any Subsidiary or WWG, TEAM, O-A or Pulse has incurred to date and reasonably expects to incur through the conclusion thereof.

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Section 3.11    Taxes.   Each of WWG, TEAM, O-A, Pulse, the Company and each Subsidiary has timely completed and filed, or caused to be filed, taking into account any valid extensions of due dates, completely and accurately, all federal, state, local and foreign (if any) tax or information returns (including estimated tax returns) required under the statutes, rules or regulations of such jurisdictions to be filed by WWG, TEAM, O-A, Pulse, the Company and each Subsidiary.  The term "Taxes" means taxes, duties, charges or levies of any nature imposed by any taxing or other Governmental or Regulatory Authority, including without limitation income, gains, capital gains, surtax, capital, franchise, capital stock, value-added taxes, taxes required to be deducted from payments made by the payor and accounted for to any tax authority, employees' income withholding, back-up withholding, withholding on payments to foreign Persons, social security, national insurance, unemployment, worker's compensation, payroll, disability, real property, personal property, sales, use, goods and services or other commodity taxes, business, occupancy, excise, customs and import duties, transfer, stamp, and other taxes (including interest, penalties or additions to tax in respect of the foregoing), and includes all taxes payable by WWG, TEAM, O-A, Pulse, the Company and each Subsidiary pursuant to Treasury Regulations §1.1502-6 or any similar provision of state, local or foreign law.  All Taxes shown on said returns to be due and all other Taxes due and owing (whether or not shown on any Tax return) have been timely paid and all additional assessments received prior to the date hereof have been timely paid or are being contested in good faith, in which case, such contested assessments are set forth on Schedule 3.11.  Each of WWG, TEAM, O-A, Pulse, the Company and each Subsidiary has collected all sales, use, goods and services or other commodity Taxes required to be collected and remitted or will remit the same to the appropriate taxing authority within the prescribed time periods.  Each of WWG, TEAM, O-A, Pulse, the Company and each Subsidiary has withheld all amounts required to be withheld on account of Taxes from amounts paid to employees, former employees, directors, officers, members, residents and non-residents and remitted or will remit the same to the appropriate taxing authorities within the prescribed time periods.  The amount set up as an accrual for Taxes (aside from any reserved for deferred Taxes established to reflect timing differences between book and Tax accrual) on the Balance Sheet (as opposed to the notes thereto) is sufficient for the payment of all unpaid Taxes of each of WWG, TEAM, O-A, Pulse, the Company and each Subsidiary, as the case may be, whether or not disputed, for all periods ended on and prior to the date thereof.  Since the Balance Sheet Date, none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has incurred any liabilities for Taxes other than in the ordinary course of their respective businesses consistent with past custom and practice. No stockholder, member, manager, director or officer (or employee responsible for Tax matters) of any of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary expects any authorities to assess any additional Taxes for any period for which Tax returns have been filed.  Schedule 3.11 sets forth each jurisdiction (other than United States federal) in which WWG, TEAM, O-A, Pulse, the Company or any Subsidiary files, is required to file, or has been required to file a tax return or is or has been liable for any Taxes on a "nexus" basis.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary have received any notice of a claim by any Governmental or Regulatory Authority in any jurisdictions where any of them do not file tax returns that any of them may be subject to Tax by that jurisdiction.  WWG  has delivered to the Purchaser correct and complete copies of all federal, state, local and foreign income tax returns filed with respect to WWG, TEAM, O-A, Pulse, the Company and the Subsidiaries.  Except as set forth on Schedule 3.11, none of the federal, state, local or foreign income tax returns of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary have ever been audited by the Internal Revenue Service or any other Governmental or Regulatory Authority.  No examination of any return of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is currently in progress, and none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received notice of any proposed audit or examination.  No deficiency in the payment of Taxes by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary for any period has been asserted in writing by any taxing authority and remains unsettled at the date of this Agreement.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has made any agreement, waiver or other arrangement providing for an extension of time with respect to the assessment or collection of any Taxes against it.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has been a member of an affiliated group filing consolidated federal income tax returns nor has it been included in any combined, consolidated or unitary state or local income tax return.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary will be required as a result of a change in accounting method for any period ending on or before the Closing Date to include any adjustment under Section 481 of the Code (or any similar provision of state, local or foreign income tax law) in income for any period ending after the Closing Date, or as a result of a change for any period that may be required by law in connection with the transactions contemplated by this Agreement.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary are obligated to make any payments or is a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Section 280G of the Code.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is or has been a U.S. real property holding corporation within the meaning or Section 897 of the Code.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has entered into any Tax sharing or indemnification agreement with any party.  None of the Purchaser, WWG, TEAM, O-A, Pulse, the Company or any Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); (ii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iii) prepaid amount received on or prior to the Closing Date.  Since its inception, WWG has a valid election under Treasury Regulation Section 301.7701-3 to be taxed as a corporation for federal, state and local income tax purposes and since its inception has validly elected to be treated as an Subchapter S corporation within the meaning of Section 1361 of the Code for federal, state and local income tax purposes, and such elections remain in full force and effect. Commencing with the initial fiscal year in which WWG owned stock in TEAM, WWG has had an election in effect under Treasury Regulation Section 1.1361-3, to treat TEAM as a qualified subchapter S subsidiary for federal, state and local income tax purposes and such election remains in full force and effect.  In any fiscal year in which TEAM was not a qualified Subchapter S subsidiary for federal, state and local income tax purposes, it had validly elected to be taxed as a Subchapter S corporation within the meaning of Section 1361 of the Code for federal, state and local income tax purposes.  Since inception, the Company, O-A, Pulse and the Subsidiaries have been treated as disregarded entities within the meaning of Treasury Regulation Section 301.7701-3 for federal, state and local income tax purposes.

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Section 3.12    Liabilities.   Except for the Assumed Liabilities (as defined in the NT Conveyance Document) set forth in the NT Conveyance Document, or as set forth on Schedule 3.12, neither the Company nor any Subsidiary has any outstanding claims, liabilities or indebtedness of any nature whatsoever as to which the Company or any Subsidiary is or may become responsible (collectively in this Section 3.12, "Liabilities"), whether accrued, absolute or contingent, determined or undetermined, asserted or unasserted, and whether due or to become due, other than (i) Liabilities specifically disclosed in any Schedule hereto; (ii) Liabilities under Contracts of the type required to be disclosed by WWG  and the Principals on any Schedule and so disclosed or which because of the dollar amount or other qualifications are not required to be listed on such Schedule; and (iii) Liabilities incurred since the Balance Sheet Date in the ordinary course of business and consistent with past practice of the Company or any of the Subsidiaries.

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Section 3.13    Insurance.   Schedule 3.13 contains a true and complete list (including the names and addresses of the insurers, the names of the Persons to whom such insurance policies have been issued, the expiration dates thereof, the annual premiums and payment terms thereof, whether it is a "claims made" or an "occurrence" policy and a brief description of the interests insured thereby) of all liability, property, workers' compensation and other insurance policies currently in effect that insure the property, assets or business of TEAM, O-A and Pulse that was transferred to the Company and the Subsidiaries pursuant to the NT Conveyance Document or the employees of the Company and the Subsidiaries (other than self-obtained insurance policies by such employees). Each such insurance policy is valid and binding and in full force and effect, all premiums due thereunder have been paid and none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received any notice of cancellation or termination in respect of any such policy or default thereunder.  To the knowledge of WWG, such insurance policies are placed with financially sound and reputable insurers, and are in amounts and have coverage that are reasonable and customary for Persons engaged in the operation of the business of the Company and the Subsidiaries.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, or to the knowledge of WWG, the Person to whom such policy has been issued has received notice that any insurer under any policy referred to in this Section 3.13 is denying liability with respect to a claim thereunder or defending under a reservation of rights clause.  Within the last two years none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has filed for any claims exceeding $25,000 against any of its insurance policies, exclusive of automobile and health insurance policies. None of such policies shall lapse or terminate by reason of the transactions contemplated by this Agreement or the NT Conveyance Document and all such policies shall continue in effect after the Closing Date for the benefit of the Company and the Subsidiaries.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received any notice of cancellation of any such policy.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received written notice from any of its insurance carriers that any premiums will be materially increased in the future or that any insurance coverage listed on Schedule 3.13 will not be available in the future on substantially the same terms now in effect. None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has been refused any insurance or required to pay higher than normal or customary premiums, nor has its coverage been limited by any insurance carrier to which it has applied for insurance during the last three years.

Section 3.14     Intellectual Properties.

3.14.1      Definitions.  For purposes of this Agreement, the following terms have the following definitions:

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"Intellectual Property" shall include, without limitation, any or all of the following and all rights associated therewith: (a) all domestic and foreign patents, and applications therefor, and all reissues, reexaminations, divisions, renewals, extensions, continuations and continuations-in-part thereof; (b) all inventions (whether patentable or not), invention disclosures, improvements; (c) trade secrets, confidential and proprietary information, know how, technology, technical data and customer lists, financial and marketing data, pricing and cost information, business and marketing plans, databases and compilations of data, rights of privacy and publicity, and all documentation relating to any of the foregoing; (d) all copyrights, copyright registrations and applications therefor, unregistered copyrights, the content of all World Wide Web sites of a Person and all other rights corresponding thereto throughout the world; (e) all mask works, mask work registrations and applications therefor; (f) all industrial designs and any registrations and applications therefor; (g) all trade names, corporate names, logos, trade dress, common law trademarks and service marks, trademark and service mark registrations and applications therefor and all goodwill associated therewith; (h) any and all Internet domain names and Web sites (including all software and applications, and all components and/or modules thereof), used in connection therewith; and (i) all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded, and all documentation related to any of the foregoing.

"Intellectual Property of the Company and its Subsidiaries" shall mean any Intellectual Property that is owned by the Company or any Subsidiary, including Registered IP and Unregistered IP.

"Licensed Intellectual Property" means any Intellectual Property owned by another Person that is used by the Company or any of the Subsidiaries in the operation of the business of the Company or the Subsidiaries (the "Business"), including Off-the-Shelf Software (as defined below), but excluding rights in or to materials created for clients, to the extent to which such (x) client is the first owner of copyright in such materials or (y) the materials are subject to a written assignment of copyright in favor of clients of the Company or any Subsidiary.

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3.14.2       Representations.  Except as set forth on Schedule 3.14.2, all of the Intellectual Property of TEAM, O-A and Pulse was transferred to the Company and the Subsidiaries pursuant to the NT Conveyance Documents. Schedule 3.14.2 hereto contains an accurate and complete list of all (a) patents, patent applications, registered trademarks, applications for registered trademarks, registered service marks, domain names, applications for registered service marks, logos, registered copyrights and applications for registered copyrights which are owned by the Company or any Subsidiary (the "Registered IP"), (b) all unregistered trademarks, unregistered service marks and material unregistered copyrights which are owned by the Company or any Subsidiary (the "Unregistered IP") and (c) all Licensed Intellectual Property that is material to the operation of the Business, other than widely distributed off-the-shelf applications subject to shrink-wrap and similar non-negotiated end-user license agreements ("Off-the-Shelf Software"). Except as set forth on Schedule 3.14.2, the registrations and applications of the Registered IP listed on Schedule 3.14.2 are in the name of WWG, TEAM, O-A or Pulse, as the case may be, and are valid, in proper form, enforceable and subsisting, all necessary registration and renewal fees in connection with such registrations have been made and all necessary documents and certificates in connection with such registrations have been filed with the relevant patent and Internet domain names, copyrights and trademark authorities in the United States or other jurisdictions where the Business is conducted for the purposes of maintaining such Intellectual Property registrations, and applications therefore, and no actions (including filing of documents or payments of fees) are due within ninety (90) days after the Closing.  No registration, or application therefor, for any of the Registered IP has lapsed, expired, or been abandoned, and no such registrations, or applications therefor, are the subject of any opposition, interference, cancellation, or other legal, quasi-legal, or governmental proceeding pending before any governmental, registration, or other authority in any jurisdiction.  Except as set forth on Schedule 3.14.2, (i) the Company or one of its Subsidiaries, as applicable, is the sole and exclusive owner of all rights, title and interest in and to the Intellectual Property of the Company and its Subsidiaries, free and clear of all Liens, (ii) no Person has any rights to use any of the Intellectual Property of the Company and its Subsidiaries, (iii) none of WWG, TEAM, O-A, Pulse the Company or any Subsidiary has granted to any Person, or authorized any Person to retain, any ownership in the Intellectual Property of the Company and its Subsidiaries, and (iv) all Licensed Intellectual Property in the Company's or any Subsidiary's possession or used in the operation of the Business has been properly licensed from the owner of such Intellectual Property, and the Company and such Subsidiary, as applicable, possess all license agreements, certificates or documentation sufficient to substantiate such rights, and the Company and each such Subsidiary are in compliance with, and WWG, TEAM, O-A and Pulse have not in the past violated, such license agreements.  Except as set forth on Schedule 3.14.2,the consummation of the transactions contemplated hereby will not result in any loss or impairment of the Company's or any Subsidiary's rights to own or use any Intellectual Property, nor will such consummation require the consent of any third party in respect of any Intellectual Property. The operation of the Business and use of all Intellectual Property therein does not infringe the Intellectual Property of any other Person. There are no proceedings pending or, to the knowledge of WWG, threatened against WWG, TEAM, O-A, Pulse, the Company or any Subsidiary with respect to the Intellectual Property, or with respect to any other Intellectual Property, alleging the infringement or misappropriation by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary of any Intellectual Property of any Person, and none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received notice from any Person that the operation of the Business infringes the Intellectual Property of any Person.  There are no claims pending or, to the knowledge of WWG, threatened challenging the validity of any Intellectual Property of the Company or any Subsidiary or any Intellectual Property used by the Company or any Subsidiary in the conduct of the Business. None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has entered into or is otherwise bound by any consent, forbearance or any settlement agreement which limits the rights of the Company or any Subsidiary to use the Intellectual Property of the Company and its Subsidiaries. To the knowledge of WWG, no Person is infringing or misappropriating any of the Intellectual Property of the Company and its Subsidiaries. All Intellectual Property of the Company and its Subsidiaries was either developed (a) by employees of WWG, TEAM, O-A or Pulse within the scope of such employee's employment duties; or (b) by independent contractors or other third parties who have assigned all of their rights therein WWG, TEAM, O-A or Pulse, as the case may be, pursuant to a written agreement, and all such employees, independent contractors, and other third parties have waived, pursuant to a written agreement, their moral rights in all such Intellectual Property in favor of the Company or any Subsidiary, as the case may be.  Except as set forth on Schedule 3.14.2, the Intellectual Property of the Company and its Subsidiaries does not contain any software licensed under terms which require, as a condition of the use, modification, or distribution of such software, that other software incorporated into, derived from, or distributed with such software: (x) be disclosed or distributed in source code form; (y) be licensed under terms that permit making derivative works; or (z) be redistributable at no charge to subsequent licensees.

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3.14.3    Privacy and Security.  All information or data of any kind possessed by the Company or any Subsidiary, including but not limited to, personally identifiable information collected from consumers ("PII"), aggregate or anonymous information collected from consumers ("Non-PII") and employee data (collectively, "Data"), has been collected, by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, or any other Person, and is being maintained, stored, processed and used by the Company and the Subsidiaries, in compliance with all Laws and Orders.  WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has at all times presented a privacy policy ("Privacy Policy") to consumers prior to the collection of any PII or Non-PII online.  The Privacy Policy, and any other representations, marketing materials and advertisements that address privacy issues and the treatment of PII and Non-PII, accurately and completely describe WWG's, TEAM's, O-A's, Pulse's, the Company's and each any Subsidiary's respective information collection and use practices, and no such notices or disclosures have been inaccurate, misleading or deceptive.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has collected or received any PII from children under the age of 13 without verifiable parental consent or directed any of its websites to children under the age of 13 through which such PII could be obtained.  WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has stored and maintained all Data in a secure manner, using commercially reasonable technical measures, to assure the integrity and security of the Data and to prevent loss, alteration, corruption, misuse and unauthorized access to such Data.  There has been no unauthorized use, access to or disclosure of any Data.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received any claims, notices or complaints regarding its information practices or use of Data.  The consummation of the transactions contemplated hereby will not result in any loss or impairment of the rights to own and use any Data, nor will such consummation require the consent of any third party in respect of any Data.

Section 3.15      Compliance with Laws; Permits.   The Company and the Subsidiaries are, and the Business (including the businesses conducted by TEAM, O-A and Pulse) has been conducted, in compliance with all applicable Laws and Orders, except in each case (other than with respect to compliance with environmental Laws and Orders relating to the regulation or protection of the environment ("Environmental Laws and Orders")) where the failure to so comply would not reasonably be expected to have a Material Adverse Effect (as defined below), including without limitation: (a) all Laws and Orders promulgated by the Federal Trade Commission or any other Governmental or Regulatory Authority; (b) all Environmental Laws and Orders; and (c) all Laws and Orders relating to labor, civil rights, and occupational safety and health laws, worker's compensation, employment and wages, hours and vacations, or pay equity. None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has been charged with, or, to the knowledge of WWG, threatened with or under any investigation with respect to, any charge concerning any violation of any Laws or Orders. The term "Material Adverse Effect" as it applies to WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, shall mean a material adverse effect on its operations, business, prospects, assets or financial condition. The Company and each Subsidiary has all permits, licenses, and other government certificates, authorizations and approvals ("Required Permits") required by any Governmental or Regulatory Authority for the operation of the Business, except where the failure to have such Required Permits would not reasonably be expected to have a Material Adverse Effect.  All of the Required Permits are in full force and effect and no action or claim is pending, nor to the knowledge of WWG, is threatened, to revoke or terminate any such Required Permit or declare any such Required Permit invalid in any material respect.

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Section 3.16      Client Relations.   Schedule 3.16 sets forth (a) the 10 largest clients of the Company and of each Subsidiary (measured by revenues), and the revenues from each such client and from all clients (in the aggregate) for the calendar years ended December 31, 2008 and December 31, 2009 and (b) the clients projected to be the 10 largest clients (measured by revenues) of the Company and of each Subsidiary based on the Company's and each Subsidiary's current profit plan for the twelve months ending December 31, 2010, together with the estimated revenues from each such client and all clients (in the aggregate) for such period.  WWG and the Principals do not warrant that the clients will remain clients of the Company or any Subsidiary beyond the Closing or that the estimated revenues set forth on Schedule 3.16 will prove to be accurate; provided, however, they do represent that they were made in good faith and on a reasonable basis.  No client of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has advised any Principal or any of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary in writing that it is (x) terminating or considering terminating the handling of its business, in whole or in respect of any particular project or service or (y) planning to reduce its future spending with the Company or any Subsidiary in any material manner.

Section 3.17      Accounts Receivable; Work-in-Process; Accounts Payable.   The amount of all work-in-process, accounts receivable, unbilled invoices (including without limitation unbilled invoices for services and out-of-pocket expenses) and other debts due or recorded in the records and books of account of TEAM, O-A and Pulse and which was transferred to the Company and the Subsidiaries pursuant to the NT Conveyance Document, as being due to the Company and the Subsidiaries and reflected on the Balance Sheet and the Closing Balance Sheet represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and will be good and collectible in full (less the amount of any provision, reserve or similar adjustment therefor reflected on the Balance Sheet and the Closing Balance Sheet) in the ordinary course of business, and none of the accounts receivable or other debts (or accounts receivable arising from any such work-in-process or unbilled invoices) is or will be subject to any counterclaim or set-off except to the extent of any such provision, reserve or adjustment.  The accounts payable set forth on the Balance Sheet, and the accounts payable incurred since the Balance Sheet Date through the Closing Date, represent trade payables resulting from bona fide transactions incurred in the ordinary course of business. There has been no change since the Balance Sheet Date in the amount or aging of the work-in-process, accounts receivable, unbilled invoices, or other debts due to the Company or any Subsidiary, or the reserves with respect thereto, or accounts payable of the Company or any Subsidiary which would have a Material Adverse Effect.

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Section 3.18      Employment Relations.   (a) No unfair labor practice complaint against WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is pending before any Governmental or Regulatory Authority; (b) there is no organized labor strike, dispute, slowdown or stoppage actually pending or to the knowledge of WWG threatened against or involving the Business; (c) there are no labor unions representing or, to the knowledge of WWG, attempting to represent the employees of TEAM, O-A and Pulse who became employees of the Company and the Subsidiaries; (d) no claim or grievance nor any arbitration proceeding arising out of or under any collective bargaining agreement is pending against WWG, TEAM, O-A, Pulse, the Company or any Subsidiary and to the knowledge of WWG, no such claim or grievance has been threatened; (e) no collective bargaining agreement is currently being negotiated by any of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary; and (f) none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary experienced any work stoppage or similar organized labor dispute during the last three years.  There is no legal action, suit, proceeding or claim pending or, to the knowledge of WWG, threatened between WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, on the one hand, and any employees or former employees of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, agents or former agents of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, job applicants or any association or group of any employees of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, on the other hand.

Section 3.19      Employee Benefit Matters.

3.19.1    List of Plans.  Schedule 3.8 to this Agreement lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus, incentive, deferred compensation, stock option, restricted stock, stock appreciation rights, phantom stock rights, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, individual retirement programs or arrangements, and all termination, severance or other Contracts, whether covering one Person or more than one Person, and whether or not subject to any of the provisions of ERISA, which are or have been maintained, contributed to or sponsored by WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate (as defined in Section 3.19.3) for the benefit of any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (each item listed on Schedule 3.8 being referred to herein individually, as a "Plan" and collectively, as the "Plans").  For purposes of this Agreement, "foreign benefit plan" means each material plan, program or agreement contributed to, sponsored or maintained by either the Company or any ERISA Affiliate or any other Person that is maintained outside of the United States, or that covers primarily employees residing or working outside of the United States, and which would be treated as a Plan had it been a material United States plan, program or agreement.  WWG has delivered to the Purchaser, to the extent applicable, a complete and accurate copy of: (a) each written Plan and descriptions of any unwritten Plan (including all amendments thereto whether or not such amendments are currently effective); (b) each summary plan description and all summaries of material modifications relating to a Plan; (c) each trust agreement or other funding arrangement with respect to each Plan, including insurance contracts; (d) the most recently filed IRS Form 5500 relating to each Plan; (e) the most recently received IRS opinion, advisory or determination letter for each Plan; and (f) the three most recently prepared actuarial reports (if applicable) and financial statements in connection with each Plan.  None of the Principals, WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has made any commitment, (i) to create or cause to exist any Plan not set forth on Schedule 3.8 or (ii) to modify, change or terminate any Plan.

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3.19.2    Severance.  None of the Plans, nor, except as set forth on Schedule 3.19.2, any employment agreement or other Contract to which WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is a party or bound, (a) provides for the payment of or obligates WWG, TEAM, O-A, Pulse, the Company or any Subsidiary to pay separation, severance, termination or similar-type benefits to any Person; or (b) obligates WWG, TEAM, O-A, Pulse, the Company or any Subsidiary to pay separation, severance, termination or similar-type benefits as a result of any transaction contemplated by this Agreement or as a result of a "change in control," within the meaning of such term under Section 280G of the Code, either alone or in conjunction with any subsequent occurrence.

3.19.3    Multi-Employer Plans.  None of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate has maintained, contributed to or participated in a multi-employer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) or a multiple employer plan subject to Sections 4063 and 4064 of ERISA, nor has any obligations or liabilities, including withdrawal, reorganization or successor liabilities, regarding any such plan. As used herein, the term "ERISA Affiliate" means any Person that is or has been a member of a controlled group of organizations (within the meaning of Sections 414(b), (c), (m) or (o) of the Code) of which WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is a member.

3.19.4    Welfare Benefit Plans.  Each of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has expressly reserved the right, in all Plan documents relating to welfare benefits provided to employees, former employees, officers, directors and other participants and beneficiaries, to amend, modify or terminate at any time the Plans which provide for welfare benefits, and WWG is not aware of any fact, event or condition that could reasonably be expected to restrict or impair such right. Except as required under Section 601 of ERISA, none of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate has made any promises or commitments to provide, and is not obligated to provide (i) medical benefits (including without limitation through insurance) to retirees or former employees of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate or their respective dependants, or (ii) life insurance or other death benefits to retired employees or former employees of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate or their respective dependants.

3.19.5    Administrative Compliance.  Each Plan is now and has been operated in all material respects in accordance with the requirements of its terms and with all applicable Laws, including, without limitation, ERISA, the Health Insurance Portability and Accountability Act of 1996 (as amended by the Health Information Technology for Economic and Clinical Health Act) and the Code, including, without limitation, all nondiscrimination and minimum coverage requirements of Sections 401(a) and 410(b) thereof, the Age Discrimination in Employment Act, Family and Medical Leave Act, the Americans with Disabilities Act, the Equal Pay Act, Title VII of the Civil Rights Act of 1964, and the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, and the regulations and authorities published thereunder.  Each of WWG, TEAM, O-A, Pulse, the Company and any Subsidiary has performed all material obligations required to be performed by it under, is not in any respect in default under or in violation of, and WWG has no knowledge of any default or violation by any Person under, any Plan.  Except as set forth on Schedule 3.9, no legal action, suit, audit, investigation or claim is pending or threatened with respect to any Plan (other than claims for benefits in the ordinary course), and no fact, event or condition exists that would be reasonably likely to provide a legal basis for any such action, suit, audit, investigation or claim.  All reports, disclosures, notices and filings with respect to such Plans required to be made to employees, participants, beneficiaries, alternate payees and any Governmental or Regulatory Authority have been timely made or an extension has been timely obtained. With respect to any insurance policy providing funding for benefits or an investment alternative under any Plan, (i) no liability or loss shall be incurred by the Company or any Subsidiary or any such Plan in the nature of a retroactive rate adjustment, loss sharing arrangement or other liability or loss, and (ii) no insurance company issuing any such policy is in receivership, conservatorship, liquidation or similar proceeding and, to the knowledge of WWG, no such proceedings with respect to any insurer are imminent.

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3.19.6    Tax-Qualification.  Each Plan which is intended to be qualified under Sections 401(a) or 408(k) of the Code is qualified under Sections 401(a) and 408(k) of the Code (and, if applicable, complies with the requirements of Section 401(k) of the Code), and has received a favorable opinion, advisory or determination letter from the IRS that it is so qualified.  Each trust established in connection with any Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code is exempt under Section 501(a) of the Code; and no fact or event has occurred or condition exists since the date of such opinion, advisory or determination letter from the IRS which would be reasonably likely to adversely affect the qualified status of any such Plan or the exempt status of any such trust. Each Plan that is a foreign benefit plan which is intended to be qualified with the appropriate Governmental or Regulatory Authority in the relevant country has received a favorable determination that it is so qualified, and each trust established in connection with such foreign benefit plan that is intended to be exempt from taxation has received a favorable determination that it is so exempt.

3.19.7    Funding; Excise Taxes.  There has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan subject to ERISA.  None of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate has incurred any liability for any excise tax arising under Sections 4971, 4972, 4973, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980, 4980B, 4980D or 4980E of the Code or any civil penalty arising under Sections 409, 502(i) or 502(l) of ERISA, and no fact, event or condition exists which could give rise to any such liability.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary nor any ERISA Affiliate has incurred any liability under, arising out of or by operation of Section 302(c)(11) or Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation ("PBGC") arising in the ordinary course), including, without limitation, any liability in connection with the termination of any employee benefit plan subject to Title IV of ERISA (a "Title IV Plan"); and, no fact, event or condition exists which could give rise to any such liability.  No complete or partial termination has occurred within the five years preceding the date hereof with respect to any Plan maintained by WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate, and no reportable event (within the meaning of Section 4043 of ERISA), notice of which has not been waived by the PBGC, has occurred or is expected to occur with respect to any Plan maintained by WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate. The transactions contemplated by this Agreement and the NT Conveyance Document will not result in liability to WWG, TEAM, O-A, Pulse, the Company or any Subsidiary or the Purchaser under Section 4069 of ERISA.  No Title IV Plan or Plan subject to Section 302 of ERISA maintained by WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate had an accumulated funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of the most recently ended plan year of such Plan.  None of the assets of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate is the subject of any Lien arising under Section 302(f) of ERISA or Section 412(n) of the Code; none of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate has been required to post any security under Section 307 of ERISA or Section 401(a) (29) of the Code relating to any Plan; and no fact or event exists which could give rise to any such Lien or requirement to post any such security.  As of the Closing Date, no Plan which is a Title IV Plan will have an "unfunded benefit liability" (within the meaning of Section 4001(a)(18) of ERISA) and no Plan which is subject to Section 302 of ERISA will have in "accumulated funding deficiency" (within the meaning of Section 302(a)(2) of ERISA).

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3.19.8    Tax Deductions.  All contributions, premiums or payments (including all employer contributions and, if applicable, employee salary reduction contributions) required to be made, paid or accrued with respect to any Plan have been made, paid or accrued on or before their due dates, including extensions thereof.  All such contributions have been fully deducted or in the case of the current year will be deducted for income tax purposes and no such deduction has been challenged or disallowed by any Governmental or Regulatory Authority, and no fact or event exists which could give rise to any such challenge or disallowance.

3.19.9    409A.  With respect to each Plan (and any other arrangement involving the Company or each Subsidiary) that is a nonqualified deferred compensation plan, within the meaning of Section 409A of the Code (a "409A Plan"), no event has occurred and no condition exists, that could subject anyone, including any Person, to any tax, fine, penalty or other liability under Section 409A of the Code ("409A Liability").   None of the transactions contemplated by this Agreement could, directly or indirectly, subject anyone or any Person to any 409A Liability.  Each 409A Plan is and has been operated and administered in good faith compliance with 409A of the Code, Treasury Notice 2005-1, the Final Treasury Reg. Sections 1.409A-1 through 1.409A-6, and any subsequent guidance issued thereunder.

Section 3.20      Interests in Customers, Suppliers, Etc.   Except as set forth on Schedule 3.20, none of the Principals, nor to the knowledge of WWG (without making any inquiry of any member of the Related Group, as hereinafter defined), any officer, director, or employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary immediately prior to the Closing Date, any parent, brother, sister, child or spouse of any such officer, director, key executive or employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary or the Principals (collectively, the "Related Group"), or any Person controlled by anyone in the Related Group:

(i)          owns, directly or indirectly, any interest in (excepting for ownership, directly or indirectly, of less than 1/4 of 1% of the issued and outstanding shares of any class of securities of a publicly held and traded company), or received or has any right to receive payments from, or is an officer, director, employee, agent or consultant of, any Person which is, or is engaged in business as, a competitor, lessor, lessee, supplier, distributor, sales agent, customer or client of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary;

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(ii)         owns, directly or indirectly (other than through the ownership of Membership Interests), in whole or in part, any tangible or intangible property (including, but not limited to Intellectual Property), that WWG, TEAM, O-A, Pulse, the Company or any Subsidiary used in the conduct of the Business, other than immaterial personal items owned and used by employees at their work stations; or

(iii)        has any cause of action or other claim whatsoever against, or owes any amount to, WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, except for claims in the ordinary course of business such as for accrued vacation pay, accrued benefits under employee benefit plans, and similar matters and agreements existing on the date hereof.

Section 3.21      Bank Accounts and Powers of Attorney.   Set forth in Schedule 3.21 is an accurate and complete list showing (a) the name and address of, and account information for, each bank in which immediately prior to the transfer of the Business, WWG, TEAM, O-A, Pulse, the Company or any Subsidiary had an account, credit line or safe deposit box and the names of all Persons authorized to draw thereon or to have access thereto, and (b) the names of all Persons, if any, holding powers of attorney from WWG, TEAM, O-A, Pulse, the Company or any Subsidiary and a summary statement of the terms thereof.

Section 3.22      Compensation of Employees.

(a)         Schedule 3.22 is an accurate and complete list showing: (a) the names and positions of all employees and exclusive consultants who immediately prior to the transfer of the Business were being compensated by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary at an annualized rate of $50,000 or more, together with a statement of the current annual salary, and the annual salary, bonus and incentive compensation paid or payable with respect to calendar years 2008 and 2009, and a statement of the projected annual salary, bonus and incentive compensation payable with respect to the calendar year ended December 31, 2010, and the material fringe benefits of such employees and exclusive consultants not generally available to all employees of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary; (b) all bonus and incentive compensation paid or payable (whether by agreement, custom or understanding) to any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary not listed in clause (a) above for services rendered or to be rendered during calendar years 2008 and 2009; (c) the names of all retired employees, if any, of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary who are receiving or entitled to receive any healthcare or life insurance benefits or any payments from WWG, TEAM, O-A, Pulse, the Company or any Subsidiary not covered by any pension plan to which WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is a party, their ages and current unfunded pension rate, if any; and (d) a description of the current severance and vacation policy of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has, because of past practices or previous commitments with respect to its employees, established any rights on the part of any of its employees to additional compensation with respect to any period after the Closing Date (other than wage increases in the ordinary course of business).  Each of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary have properly classified and compensated all employees and consultants in accordance with all applicable Laws and Order of any Governmental and Regulatory Authority.

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(b)         No Principal has agreed or made any written or verbal commitment to give any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (or any family member or any affiliate of the employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary) any portion or share of the Purchase Price in the form of a bonus, gift, award, or any similar type of remuneration.   The Principals agree that, from and after the date hereof, no portion or proceeds of the Purchase Price shall be used to compensate or give to any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (or any family member of any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary) a bonus, gift, award, or any similar type of remuneration.

Section 3.23      No Changes Since the Balance Sheet Date.   From the Balance Sheet Date through the date hereof, except as specifically stated on Schedule 3.23, none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (i) incurred any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except in the ordinary course of business, (ii) permitted any of its assets to be subjected to any Lien, (iii) sold, transferred or otherwise disposed of any assets except in the ordinary course of business, (iv) made any capital expenditure or commitment therefor which individually or in the aggregate exceeded $25,000; (v) declared or made any distributions or dividend payments on any of their respective equity, or redeemed, purchased or otherwise acquired (or committed to do so) any of their respective equity, or any option, warrant or other right to purchase or acquire any of their respective equity, (vi) made any bonus or profit sharing distribution, (vii) increased or prepaid its indebtedness for borrowed money, except current borrowings under credit lines listed on Schedule 3.8, or made any loan to any Person other than to any employee for normal travel and expense advances, (viii) wrote down the value of any work-in-process, or wrote off as uncollectible any notes or accounts receivable, except write-downs and write-offs in the ordinary course of business, none of which individually or in the aggregate, were material to WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, (ix) granted any increase in the rate of wages, salaries, bonuses or other remuneration of any employee who, whether as a result of such increase or prior thereto, received aggregate compensation from WWG, TEAM, O-A, Pulse, the Company or any Subsidiary at an annual rate of $50,000 or more, or except in the ordinary course of business to any other employees, (x) entered into any employment or exclusive consulting agreement which is not cancelable by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (and will not be cancelable by the Company or any Subsidiary) without penalty or other financial obligation within 30 days, (xi) canceled or waived any claims or rights of material value, (xii) made any change in any method of accounting procedures, (xiii) otherwise conducted the business of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary or entered into any transaction, except in the usual and ordinary manner and in the ordinary course of its business, (xiv) amended or terminated any agreement which is material to their businesses, (xv) renewed, extended or modified any lease of real property or any lease of personal property, except in the ordinary course of business, or (xvi) agreed, whether or not in writing, to do any of the actions set forth in any of the above clauses.

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Section 3.24     Corporate Controls.   To the knowledge of WWG, no officer, authorized agent, employee, consultant or any other Person while acting on behalf of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, has, directly or indirectly: used any corporate fund for unlawful contributions, gifts, or other unlawful expenses relating to political activity; made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false or fictitious entry on its books or records; participated in any racketeering activity; or made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment, or other payment of a similar or comparable nature, to any Person, private or public, regardless of form, whether in money, property, or services, to obtain favorable treatment in securing business or to obtain special concessions, or to pay for favorable treatment for business secured or for special concessions already obtained, and none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has participated in any illegal boycott or other similar illegal practices affecting any of its actual or potential customers.

Section 3.25      Brokers.   Except as set forth on Schedule 3.25, no broker, finder, agent or similar intermediary has acted on behalf of WWG, any Principal or the Company or any Subsidiary in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees, consulting fees or similar fees or commissions are payable by the Company or any Subsidiary or any Principal in connection therewith based on any agreement, arrangement or understanding with any of them.

Section 3.26     Repayment of Loans.  All (i) intercompany indebtedness and (ii) indebtedness of the Principals to any of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has been repaid in full, other than routine travel expense advances in the ordinary course of business and consistent in amount with past practice.

Section 3.27     Copies of Documents.   WWG has caused to be made available for inspection and copying by the Purchaser and its advisers, true, complete and correct copies of all documents referred to in this Article III or in any Schedule.  Summaries of all oral contracts contained on Schedule 3.8 are complete and accurate in all material respects.

ARTICLE IV

REPRESENTATIONS OF THE PURCHASER

The Purchaser represents, warrants and agrees to and with WWG and the Principals as follows:

Section 4.1        Existence and Good Standing.   The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with full corporate power and authority to own its property and to carry on its business all as and in the places where such properties are now owned or operated or such business is now being conducted.

Section 4.2        Execution and Validity of Agreement.   The Purchaser has the full corporate power and authority to make, execute, deliver and perform this Agreement and the transactions contemplated hereby.  The execution and delivery of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby have been duly authorized by all required corporate action on behalf of the Purchaser.  This Agreement has been duly and validly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Principals and WWG, constitutes legal, valid and binding obligations of the Purchaser, enforceable against each of them in accordance with its terms.

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Section 4.3       Litigation.   There is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Purchaser, any investigation by), any Governmental or Regulatory Authority pending or, to the knowledge of the Purchaser, threatened against the Purchaser or any of their respective properties or rights with respect to this Agreement.  The Purchaser is not subject to any Order entered in any lawsuit or proceeding with respect to this Agreement or the transactions contemplated hereby.

Section 4.4        Non-Contravention; Approvals and Consents.   The execution, delivery and performance by the Purchaser of its obligations hereunder and the consummation of the transactions contemplated hereby will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation and bylaws of the Purchaser, (b) result in the violation by the Purchaser of any Laws or Orders of any Governmental or Regulatory Authority applicable to the Purchaser or any of its assets or properties, or (c) result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Purchaser to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or, except for such Liens as may be created in connection with an MDC Financing (as defined in Section 6.1 hereof), result in the creation or imposition of any Lien upon any of the respective assets or properties of the Purchaser, under any of the terms, conditions or provisions of any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound. No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound for the execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder or the consummation by the Purchaser of the transactions contemplated hereby.

Section 4.5        Brokers.   No broker, finder, agent or similar intermediary has acted on behalf of the Purchaser in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees or similar fees or commissions are payable by the Purchaser in connection therewith based on any agreement, arrangement or understanding with either of them.

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ARTICLE V

ACTIONS AT CLOSING BY WWG AND THE PRINCIPALS

Simultaneously herewith:

Section 5.1         Authorization Documents; Good Standing Certificates.

(a)        WWG shall have delivered to the Purchaser: (a) a copy of the resolutions of the managing member and the members of WWG, authorizing the execution, delivery and performance of this Agreement and the transactions contemplated hereby, certified by one of its officers; (b) a copy of the Company's Certificate of Formation, including all amendments, certified by the Delaware Secretary of State; (c) a certificate as of a recent date from the Delaware Secretary of State that the Company is in good standing in such state; and (d) a copy of the Company's limited liability company operating agreement, including all amendments, certified by an officer of the Company.

(b)        WWG shall have delivered to the Purchaser with respect to each Subsidiary: (a) a copy of each Subsidiary's organizational documents, including all amendments, certified by its jurisdiction of organization; (b) a certificate from the appropriate authority of each jurisdiction in which each Subsidiary was organized that such Subsidiary in good standing (in each case together with any applicable tax status certificate) in such jurisdiction; and (c) a certificate from the appropriate authority of each jurisdiction in which each Subsidiary is qualified as a foreign company to do business to the effect that the Subsidiary is in good standing in such jurisdiction (in each case together with any applicable tax status certificate).

(c)         WWG shall have delivered to the Purchaser a certificate as of a recent date from the Massachusetts Secretary of State that TEAM is in good standing in such state.

(d)        WWG shall have delivered to the Purchaser a copy of the resolutions of the sole shareholder and the Board of Directors of TEAM, authorizing the execution, delivery and performance of the NT Conveyance Document and the transactions contemplated thereby.

(e)          WWG shall have delivered to the Purchaser a copy of the resolutions of the members and the Managing Member of WWG2 authorizing execution and delivery of the Operating Agreement.

Section 5.2        Required Approvals and Consents.   WWG shall have obtained or given, at no expense to the Purchaser or MDC, and there shall not have been withdrawn or modified, any consents or approvals or other actions listed on Schedule 3.9 hereof (including without limitation, obtaining all such consents, approvals and/or waivers required under the Contracts listed on Schedule 3.8).  Each such consent or approval shall be in form satisfactory to counsel for the Purchaser.

Section 5.3         Operating Agreement.   WWG and WWG2 shall have entered into the Operating Agreement.

Section 5.4        Employment Agreements.   Each of Gregory, O'Toole, Groth, Graham, Frank Fanelli, Gregory Goldhaber, Alexander Gonzalez, Michael Shea and Brian Murphy shall have entered into Employment Agreements with the Company substantially in the form and to the effect of Exhibits B-1, B-2, B-3, B-4, B-5, B-6, B-7, B-8 and B-9, respectively, attached hereto.

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Section 5.5        Non-Competition/Non-Solicitation/Non-Servicing Agreements.   The Principals shall have entered into Non-Competition/Non-Solicitation/Non-Servicing Agreements with the Purchaser and the Company in the form and to the effect of Exhibits C-1, C-2, C-3, C-4, C-5 and C-6, respectively, attached hereto.

Section 5.6        Conveyance Document. WWG shall have caused TEAM to enter into the NT Conveyance Document.

Section 5.7        Bank Pay-off Letter; Release of Liens.  WWG shall have delivered to the Purchaser pay-off letters and lien discharges (or agreements therefor) reasonably satisfactory to the Purchaser from PNC Bank, National Association, as lender to WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, and/or in connection with any such entity's pre-closing outstanding indebtedness and line of credit.

Section 5.8        Brian Murphy Side Letter. WWG and Brian Murphy shall have entered into that certain letter agreement (the "Side Letter") as referenced in the employment agreement by and between Brian Murphy and the Company referred to in Section 5.4 above.

Section 5.9        Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incident thereto must be reasonably satisfactory in form and substance to the Purchaser and its counsel, and the Purchaser shall have received copies of all such documents and other evidences as it or its counsel reasonably requested in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

ARTICLE VI

OTHER AGREEMENTS

Section 6.1         Management of the Company.

6.1.1      MDC Financing.  Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the Purchase Price under Section 2.1 hereof and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC and/or one of its affiliates, in connection with its or any of its affiliates' current or future credit facilities or financing arrangements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon the Purchaser's Membership Interests; (x) pledge or grant a security interest in or to otherwise have a lien placed upon the assets and properties of the Company and/or its Subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under the Call and/or Sale Request (as such terms are defined in the Operating Agreement) to or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders (as applicable and collectively, the "Lender"); and (z) have the Company and/or its Subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned to it.

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6.1.2      Effect of Events During Period Membership Interests Are Outstanding.  The parties hereto understand and agree that under the terms of the Employment Agreements referred to in Section 5.4, each of the Principals may be terminated for "cause" or "without cause" (as such terms are defined in such Employment Agreement); provided, however, the parties hereto acknowledge and agree that no employee (other than Gregory or Groth) of the Company or any Subsidiary shall be terminated "without cause" without the prior written consent of Gregory; provided further, however, in the event that a majority of the remaining Principals approve in writing of such termination of employment, the prior written consent of Gregory shall not be required in connection with such termination of employment.  In addition, the parties hereto acknowledge and agree that in the event Gregory's employment with the Company and/or NT is terminated "without cause", a majority of the remaining Principals shall have the right to (and shall) within 10 days following such termination of employment, appoint Gregory's replacement as Chief Executive Officer and President of the Company and/or NT, as the case may be, subject to the reasonable approval and consent of MDC.  In the event that a majority of the remaining Principals do not (within 10 days following such termination of employment) appoint Gregory's replacement, MDC shall have the sole right to appoint a new Chief Executive Officer of the Company and/or NT, as the case may be.  Notwithstanding the foregoing, in the event any Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect WWG's right to receive the Purchase Price under this Agreement.  Each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company or any Subsidiary during the period commencing as of Closing Date through the end of the last year included in the Measuring Period (as defined in the Operating Agreement) with respect to the exercise of a Call or Sale Request (as such terms are defined in the Operating Agreement) resulting in WWG no longer owing any Class B and Class C Units, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any Subsidiary, no party to this Agreement or any Person claiming a right through such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any Subsidiary (x) constitutes a breach by the Purchaser or any of its affiliates of this Agreement, (y) resulted in an adverse effect on the Purchase Price hereunder forming the basis for a claim against the Purchaser or any of its affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 2.1.4 hereof.

Section 6.2         Tax Matters.

6.2.1      Section 754 Election.  The Purchaser and WWG agree that a timely election under Section 754 of the Code will be made by the Company on its federal partnership income tax return (Form 1065) for the Tax year of the Company that ends on the Closing Date.  The Purchaser shall prepare an allocation of the Purchase Price (and of other capitalized costs) among the assets of the Company and the Subsidiaries.  The Company, the Purchaser, each member of the Company and the Principals shall report, act and file all tax returns in all respects and for all purposes consistent with such allocation prepared by the Purchaser and agreed to by WWG.  WWG and/or the Principals shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as the Purchaser may reasonably request to prepare such allocation.  None of the Company, any member of the Company, or any of the Principals shall take any position (whether in audits, tax returns, or otherwise) that is inconsistent with such allocation unless required to do so by applicable law.

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6.2.2      Tax Returns.  The Company shall prepare or cause to be prepared and file or cause to be filed all Tax returns for the Company except as otherwise specifically provided herein or in the Operating Agreement.  The Company shall permit the Purchaser to review and comment on each such Tax return described in the preceding sentence prior to filing.

6.2.3      Tax Cooperation.  The Purchaser, WWG and the Principals shall cooperate fully, and each shall cause the Company to cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax returns pursuant to Section 6.2.2 or any other Tax returns relating to the operations of WWG or the Company, and any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include WWG's retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  The Purchaser and WWG agree to, and each agree to cause the Company to, (A) retain all books and records with respect to Tax matters pertinent to WWG and Company relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by the Purchaser, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, WWG or the Purchaser, as the case may be, shall allow the other party to take possession of such books and records.

6.2.4      Tax Liability.  To the extent that any of the transactions contemplated by the NT Conveyance Document give rise to sales and/or use tax liability or other transfer, purchase, stamp or recordation documentary tax and fees (collectively, "Sales Taxes"), the Purchaser shall promptly pay such Sales Taxes to the appropriate tax authorities.  WWG shall cause the Company to deliver to the Purchaser completed returns in respect of any Sales Taxes required to be filed with respect to the transactions contemplated herein (regardless of whether such returns are informational or show liability for Sales Taxes) for filing with the appropriate taxing authority.  The Purchaser and WWG hereby waive compliance with the bulk sales laws of any applicable jurisdiction, and WWG and the Principals hereby agree to indemnify and hold harmless the Purchaser and its Affiliates from and against any claims arising out of or due to the failure to comply with such bulk sales laws.

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Section 6.3        Equity Securities of WWG. As long as WWG beneficially owns any equity interests in the Company, no Principal shall sell or in any other way transfer, assign, distribute, pledge, encumber or otherwise dispose of (a "Transfer") any of the equity securities of WWG or permit WWG to issue any additional equity securities (the "WWG Interests"); provided, however, (i) WWG may issue membership interests to Brian Murphy pursuant to the terms and conditions of that certain letter agreement attached hereto as Exhibit D, and (ii) each Principal (x) may Transfer WWG Interests to another Principal or (y) for estate planning purposes, may Transfer WWG Interests to a Family Member (as hereinafter defined) as long as the total equity securities and voting power retained in the aggregate by such Principal (exclusive of equity securities owned by Family Members) in WWG constitutes a majority of the equity securities and voting power in WWG, and such Family Member agrees in writing to the Purchaser to be bound by the provisions of this Section 6.3 as if it were a member of WWG.  Without limiting the foregoing, in the event that at any time on or after the date of this Agreement a holder of equity securities of WWG Transfers some or all of such equity securities, then WWG shall upon receiving notice of such Transfer promptly provide the Purchaser with written notice of such Transfer.  To the extent known, such notice shall specify the names and addresses of the transferee and transferor of such equity securities, the number and type or class of equity securities Transferred, and all of the other material terms and conditions of such Transfer.  As used herein, the term "Family Member" of any Principal shall mean (i) the spouse and lineal descendants of such Principal, (ii) the spouses of any such descendants, (ii) the legal representatives of any Person that falls within clause (i) or (ii) hereof, and (iii) the trustee of any trust of which any of the Persons falling with clause (i) or (ii) shall be the only beneficiaries entitled to the income or principal.

Section6.4        Change of Name. At the Closing, the Company shall execute appropriate documents to change (x) TEAM’s name to a name dissimilar to "TEAM Enterprises", (y) O-A’s name to a name dissimilar to "Outer-Active" and (z) Pulse’s name to a name dissimilar to "Pulse", and promptly thereafter shall file any necessary documents to reflect such name changes with the appropriate Secretary of State and the appropriate authorities in the other states in which each such entity is qualified to do business.

Section6.5        Brian Murphy Side Letter. WWG covenants and agrees to use its best efforts following the Closing to consummate the transactions contemplated by the Side Letter in accordance with the terms and conditions thereof.

ARTICLE VII

SURVIVAL; INDEMNITY

Section 7.1       Survival.   Notwithstanding any right of any party hereto fully to investigate the affairs of any other party, and notwithstanding any knowledge of facts determined or determinable pursuant to such investigation or right of investigation, each party hereto shall have the right to rely fully upon the representations, warranties, covenants and agreements of the other parties contained in this Agreement and the Schedules, if any, furnished by any other party pursuant to this Agreement, or in any certificate or document delivered at the Closing by any other party.  Subject to the limitations set forth in Section 7.6, the respective representations, warranties, covenants and agreements of the WWG, the Principals and the Purchaser contained in this Agreement shall survive the Closing.

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Section 7.2         Obligation of WWG and the Principals to Indemnify.

7.2.1      General Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, WWG and the Principals hereby agree, jointly and severally, to indemnify the Purchaser and its affiliates, stockholders, officers, directors, employees, agents, representatives and successors, permitted assignees of the Purchaser and their affiliates (individually, a "Purchaser Indemnified Party" and collectively, the "Purchaser Indemnified Parties") against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to pay on behalf of or reimburse the Purchaser Indemnified Parties as and when incurred for, any and all liabilities (including liabilities for Taxes), obligations, losses, damages, penalties, demands, claims, actions, suits, judgments, settlements, penalties, interest, out-of-pocket costs, expenses and disbursements (including reasonable costs of investigation, and reasonable attorneys’, accountants' and expert witnesses' fees) of whatever kind and nature (collectively, "Losses"), that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation contained in Article III.B hereof or in any certificate delivered by WWG or the Principals at the Closing; (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of WWG or the Principals contained in Article III.B hereof or in any certificate delivered by WWG or the Principals at the Closing; (c) any breach or failure by WWG or the Principals to comply with, perform or discharge any obligation, agreement or covenant by WWG or the Principals contained in this Agreement; (d) any liability or obligation or any assertion against any Purchaser Indemnified Party, arising out of or relating, directly or indirectly, to any Excluded Asset or any Retained Liability (as such terms are defined in the NT Conveyance Document) or other liability arising, in whole or in part, out of the conduct of the business of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary prior to the Closing except for the Assumed Liabilities (as such term is defined in the NT Conveyance Document); (e) any litigation or claim disclosed on Schedule 3.10 to this Agreement; (f) any liability or obligation arising out of or relating, directly or indirectly, to the classification of any individual performing services for any of WWG, TEAM, NT, O-A or Pulse (i) as an independent contractor, (ii) as a freelancer, (iii) as a consultant or (iv) in any other capacity other than as an employee; (g) any liability or obligation arising out of or relating, directly or indirectly, to any violation by WWG, TEAM, NT, O-A or Pulse, on or prior to the Closing, of the Fair Labor Standards Act or any similar state or local wage and hour Law, Order, ordinance or regulation; and (h) the failure of the TEAM, the Company or any Subsidiary to qualify to do business in any applicable jurisdiction in the United States.

7.2.2      Special Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, each of the Principals hereby severally agrees to indemnify the Purchaser Indemnified Parties against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to assume liability for, the payment of all Losses that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of or in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of a representation or warranty by such Principal contained in Article III.A hereof; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting the Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of such Principal contained in Article III.A hereof or in any certificate delivered by such Principal at the Closing.  Any claim for indemnity made under this Section 7.2.2 shall not be construed as a claim under Section 7.2.1 hereof even if the Purchaser Indemnified Party could have made a claim under Section 7.2.1 hereof in respect of the same matters.

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7.2.3      "Losses".  The term "Losses" as used in this Article VII is not limited to matters asserted by third parties against any Purchaser Indemnified Party but includes Losses incurred or sustained by a Purchaser Indemnified Party in the absence of Third Party Claims (as defined in Section 7.4.2 hereof).

Section 7.3         Obligation of the Purchaser to Indemnify.   Subject to the limitations set forth in Section 7.6.3 hereof, the Purchaser hereby agrees to indemnify WWG and the Principals (individually a "Company Indemnified Party" and collectively, the "Company Indemnified Parties") against, and to protect, save and keep harmless the Company Indemnified Parties from, and to pay on behalf of or reimburse the Company Indemnified Parties as and when incurred for, any and all Losses that may be imposed on or incurred by the Company Indemnified Parties as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any Company Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (c) any breach or failure by the Purchaser to comply with, perform or discharge any obligation, agreement or covenant by the Purchaser contained in this Agreement.

Section 7.4         Indemnification Procedures.

7.4.1      Non-Third Party Claims.

(a)         In the event that any Person entitled to indemnification under this Agreement (an "Indemnified Party") asserts a claim for indemnification which does not involve a Third Party Claim (as defined in Section 7.4.2) (a "Non-Third Party Claim"), against which a Person is required to provide indemnification under this Agreement (an "Indemnifying Party"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Non-Third Party Claim Notice"), which Non-Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party.

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(b)         The Indemnifying Party may acknowledge and agree by written notice (the "Non-Third Party Acknowledgement of Liability") to the Indemnified Party to satisfy the Non-Third Party Claim within 30 days of receipt of the Non-Third Party Claim Notice.  In the event that the Indemnifying Party disputes the Non-Third Party Claim, the Indemnifying Party shall provide written notice of such dispute (the "Non-Third Party Dispute Notice") to the Indemnified Party within 30 days of receipt of the Non-Third Party Claim Notice (the "Non-Third Party Dispute Period"), setting forth a reasonable basis of such dispute.  In the event that the Indemnifying Party shall fail to deliver the Non-Third Party Acknowledgement of Liability or Non-Third Party Dispute Notice within the Non-Third Party Dispute Period, the Indemnifying Party shall be deemed to have acknowledged and agreed to pay the Non-Third Party Claim in full and to have waived any right to dispute the Non-Third Party Claim.  Once the Indemnifying Party has acknowledged and agreed to pay any Non-Third Party Claim pursuant to this Section 7.4.1, or once any dispute under this Section 7.4.1 has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction, subject to the provisions of Section 7.6.1, the Indemnifying Party shall pay the amount of such Non-Third Party Claim to the Indemnified Party within 10 days of the date of acknowledgement or resolution, as the case may be, to such account and in such manner as is designated in writing by the Indemnified Party.

7.4.2      Third-Party Claims.

(a)          In the event that any Indemnified Party asserts a claim for indemnification or receives notice of the assertion of any claim or of the commencement of any action or proceeding by any Person who is not a party to this Agreement or an affiliate of a party to this Agreement in respect of which such Indemnified Party is entitled to indemnification by an Indemnifying Party under this Agreement (a "Third Party Claim"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Third Party Claims Notice") within 20 days after asserting or learning of such Third Party Claim (or within such shorter time as may be necessary to give the Indemnifying Party a reasonable opportunity to respond to such claim), together with a statement specifying the basis of such Third Party Claim.  The Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party. The Indemnifying Party must provide written notice to the Indemnified Party that it is either (i) assuming responsibility for the Third Party Claim or (ii) disputing the claim for indemnification against it (the "Indemnification Notice").  The Indemnification Notice must be provided by the Indemnifying Party to the Indemnified Party within 15 days after receipt of the Third Party Claims Notice or within such shorter time as may be necessary to give the Indemnified Party a reasonable opportunity to respond to such Third Party Claim (the "Indemnification Notice Period").

(b)         If the Indemnifying Party provides an Indemnification Notice to the Indemnified Party within the Indemnification Notice Period that it assumes responsibility for the Third Party Claim, the Indemnifying Party shall conduct at its expense the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party.  The Defense Notice shall specify the counsel it will appoint to defend such claim ("Defense Counsel") provided, however, that the Indemnified Party shall have the right to approve the Defense Counsel, which approval shall not be unreasonably withheld or delayed.  In the event that the Indemnifying Party fails to give the Indemnification Notice within the Indemnification Notice Period, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim without the prior consent of the Indemnifying Party and subject to the provisions of Section 7.6.1, the Indemnifying Party will be liable for all costs, expenses, settlement amounts or other Losses paid or incurred in connection therewith.

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(c)         In the event that the Indemnifying Party provides in the Indemnification Notice that it disputes the claim for indemnification against it, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim, without the prior consent of the Indemnifying Party. Once such dispute has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction or by mutual agreement of the Indemnified Party and Indemnifying Party, subject to the provisions of Section 7.6.1, the Indemnifying Party shall within 10 days of the date of such resolution or agreement, pay to the Indemnified Party all Losses paid or incurred by the Indemnified Party in connection therewith.

(d)         In the event that the Indemnifying Party delivers an Indemnification Notice pursuant to which it elects to conduct the defense of the Third Party Claim, the Indemnifying Party shall be entitled to have the exclusive control over the defense of the Third Party Claim and the Indemnified Party will cooperate in good faith with and make available to the Indemnifying Party such assistance and materials as it may reasonably request, all at the expense of the Indemnifying Party.  The Indemnified Party shall have the right at its expense, which shall not be reimbursable by the Indemnifying Party, to participate in the defense assisted by counsel of its own choosing.  The Indemnifying Party will not settle the Third Party Claim or cease to defend against any Third Party Claim as to which it has delivered an Indemnification Notice (as to which it has assumed responsibility for the Third Party Claim), without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed; provided, however, such consent may be withheld for any reason if, as a result of such settlement or cessation of defense, (i) injunctive relief or specific performance would be imposed against the Indemnified Party, or (ii) such settlement or cessation would lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder.

(e)         If an Indemnified Party refuses to consent to a bona fide offer of settlement which the Indemnifying Party wishes to accept, which provides for a full release of the Indemnified Party and its affiliates relating to the Third Party Claims underlying the offer of settlement and solely for a monetary payment, the Indemnified Party may continue to pursue such matter, free of any participation by the Indemnifying Party, at the sole expense of the Indemnified Party. In such an event, the obligation of the Indemnifying Party shall be limited to the amount of the offer of settlement which the Indemnified Party refused to accept plus the reasonable costs and expenses of the Indemnified Party incurred prior to the date the Indemnifying Party notified the Indemnified Party of the offer of settlement.

(f)          Notwithstanding clause (d) above, the Indemnifying Party shall not be entitled to control, but may participate in, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of (x) that part of any Third Party Claim (i) that seeks a temporary restraining order, a preliminary or permanent injunction or specific performance against the Indemnified Party, or (ii) to the extent such Third Party Claim involves criminal allegations against the Indemnified Party or (y) the entire Third Party Claim if such Third Party Claim would impose liability on the part of the Indemnified Party in an amount which is greater than the amount as to which the Indemnified Party is entitled to indemnification under this Agreement.

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(g)         A failure by an Indemnified Party to give timely, complete or accurate notice as provided in this Section 7.4 will not affect the rights or obligations of any party hereunder except and only to the extent that, as a result of such failure, any party entitled to receive such notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise directly and materially damaged as a result of such failure to give timely notice.

Section 7.5         Right of Offset.   Without limiting any other rights or remedies available to it, the Purchaser shall be entitled to offset any claim for indemnity made pursuant to Section 7.2 and in accordance with Section 7.4, against any payment of the Purchase Price due under Section 2.1; provided, however, the Purchaser may only exercise such right of offset in respect of claims relating to Losses actually incurred by a Purchaser Indemnified Party (in which case the amount of such offset shall be the amount of such actual Loss) or claims actually asserted by a third party (in which case the amount of the offset shall not exceed the Purchaser's good faith, reasonable estimate of the amount of indemnifiable Losses that will ultimately be payable to a Purchaser Indemnified Party in respect of such claims).  If any such claims for indemnity are resolved in favor of WWG and the Principals by mutual agreement or otherwise, or if the amount withheld exceeds the amount ultimately payable to a Purchaser Indemnified Party in respect of such claim, the Purchaser shall pay to WWG the excess amount withheld with respect to such claim, together with interest thereon for the period such amount has been withheld at a rate equal to the published prime rate of interest of J.P. Morgan Chase in New York, in effect from time to time during the relevant period.

Section 7.6         Limitations On and Other Matters Regarding Indemnification.

7.6.1      Indemnity Cushion and Cap.  Subject to Section 7.6.5, neither WWG nor the Principals shall have any liability to any Purchaser Indemnified Party with respect to Losses arising out of any of the matters referred to in Section 7.2 until such time as the amount of such liability shall exceed $50,000 in the aggregate (in which case WWG and the Principals shall be liable for all Losses in excess of $50,000).  Notwithstanding anything to the contrary herein, subject to Section 7.6.5 below, the maximum aggregate liability of WWG and the Principals for indemnity payments under Section 7.2 shall be an amount equal to $11,000,000.  Notwithstanding the foregoing, each Principal's maximum aggregate liability for indemnity payments pursuant to Section 7.2.1 and Section 7.2.2, subject to Section 7.6.5 below, shall be such Principal's allocable portion of the total Purchase Price paid or payable pursuant to Section 2.1 of this Agreement.

7.6.2      Termination of Indemnification Obligations of WWG and the Principals.  Subject to Section 7.6.5, the obligation of WWG and the Principals to indemnify under Section 7.2 hereof shall terminate on April 30, 2012, except as to matters as to which the Purchaser Indemnified Party has made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.3      Termination of Indemnification Obligations of the Purchaser.  The obligation of the Purchaser to indemnify under Section 7.3 hereof shall terminate on April 30, 2012, except as to matters as to which WWG or the Principals have made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto for such party shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

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7.6.4      Treatment.  Any indemnity payments by an Indemnifying Party to an Indemnified Party under this Article VIII shall be treated by the parties as an adjustment to the Purchase Price.

7.6.5      Exceptions.  Each of the limitations set forth above in this Section 7.6 shall in no event (a) apply to any Losses incurred by a Purchaser Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by WWG or the Principals; (ii) any breach of a representation or warranty contained in Section 3.1, 3.2, 3.6, 3.11, 3.19, 3.25 or any other provision hereof relating to Taxes, (iii) any indemnification obligation under Sections 7.2.1(c), 7.2.1(d), 7.2.1(e), 7.2.1(f), 7.2.1(g) or 7.2.1(h); and (iv) the obligations of WWG and the Principals set forth in Section 8.1 to pay certain expenses; or (b) apply to any Losses incurred by a Company Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by the Purchaser; (ii) any indemnification obligation under Section 7.3(c); and (iii) the Purchaser's obligations set forth in Section 8.1 to pay certain expenses.

7.6.6      Control by MDC.  All decisions and determinations to be made by the Purchaser and/or a Purchaser Indemnified Party under this Article VII shall be made by MDC in the name of and on behalf of the Purchaser and/or such other Purchaser Indemnified Party.

ARTICLE VIII

MISCELLANEOUS

Section 8.1         Expenses.   Except as otherwise provided in this Agreement, the Purchaser, on the one hand, and the Principals and WWG, on the other hand, shall pay its or his own expenses relating to the transactions contemplated by this Agreement, including, without limitation, the fees and expenses of their respective counsel, financial advisors and accountants.

Section 8.2         Governing Law; Service of Process and Consent to Jurisdiction. The interpretation and construction of this Agreement, and all matters relating hereto (including, without limitation, the validity or enforcement of this Agreement), shall be governed by the laws of the State of Delaware without regard to any conflicts or choice of laws provisions of the State of Delaware that would result in the application of the law of any other jurisdiction.  Each of the parties hereto agrees that delivery of process, summons, notice or document in accordance with Section 8.2 shall be effective service of process for any action, suit or proceeding arising out of this Agreement.  Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the District of Delaware or any court of the State of Delaware in any action, suit or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby, and agrees that any such action, suit or proceeding shall be brought only in such court.  Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such action, suit or proceeding brought in such a court and any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

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Section 8.3        "Person" Defined.   "Person" shall mean and include an individual, a company, a joint venture, a corporation (including any non-profit corporation), an estate, an association, a trust, a general or limited partnership, a limited liability company, a limited liability partnership, an unincorporated organization and a government or other department or agency thereof.

Section 8.4         "Knowledge" Defined.   Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of WWG, such term shall be limited to the actual knowledge of the Chief Financial Officer of TEAM, the Company and/or NT and the Principals, and unless otherwise stated, such knowledge that would have been discovered by the Chief Financial Officer of TEAM, the Company and/or NT and the Principals after reasonable inquiry.  Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Purchaser, as the case may be, such term shall be limited to the actual knowledge of the executive officers of such entity and unless otherwise stated, such knowledge that would have been discovered by such executive officers after reasonable inquiry.

Section 8.5         "Affiliate" Defined.   As used in this Agreement, an "affiliate" of any Person, shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

Section 8.6         Captions.   The Article and Section captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement.

Section 8.7         Publicity.   Subject to the provisions of the next sentence, no party to this Agreement shall, and the Principals shall use reasonable efforts to insure that no representative of WWG, WWG2, TEAM, the Company or any Subsidiary shall, issue any press release or other public document or make any public statement relating to this Agreement or the matters contained herein without obtaining the prior approval of the Purchaser and the Principals.  Notwithstanding the foregoing, the foregoing provision shall not apply to the extent that MDC is required to make any announcement relating to or arising out of this Agreement by virtue of the securities laws of the United States or Canada or the rules and regulations promulgated thereunder or other rules of the NASDAQ Stock Market, Toronto Stock Exchange or the United States Securities and Exchange Commission or any announcement by any party or the Company pursuant to applicable law or regulations.

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Section 8.8         Notices.   Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to any other party shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next business day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to the Purchaser, addressed to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

c/o MDC Partners Inc.

950 Third Avenue

New York, New York 10022

Attention:  General Counsel

and (which shall not constitute notice)

Davis & Gilbert LLP

1740 Broadway

New York, New York 10019

Attention:  Brad J. Schwartzberg, Esq.

If to WWG or the Principals, to:

c/o TEAM Enterprises Inc.

110 E Broward Blvd. Suite 2450

Fort Lauderdale, FL 33301

Attention: Daniel K. Gregory

with a copy to (which shall not constitute notice):

Kopelowitz Ostrow 

Ferguson Weiselberg Keechl

200 SW 1st Avenue, 12th Floor

Fort Lauderdale, FL 33301

Attention: Jeffrey M. Ostrow, Esq.

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

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Section 8.9        Parties in Interest.   This Agreement may not be transferred, assigned, pledged or hypothecated by any party hereto, other than by operation of law.  Any purported such transfer, assignment, pledge, or hypothecation (other than by operation of law) shall be void and ineffective.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

Section 8.10      Severability.   In the event any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless be binding upon the parties with the same effect as though the void or unenforceable part had been severed and deleted.

Section 8.11     Counterparts.   This Agreement may be executed in two or more counterparts or by facsimile transmission, all of which taken together shall constitute one instrument.

Section 8.12      Entire Agreement.   This Agreement, together with the Schedules and Exhibits hereto, constitutes the sole, exclusive and only agreements of the parties hereto pertaining to the subject matter hereof, contains all of the covenants, conditions and agreements between the parties, express or implied, whether by statute or otherwise, and sets forth the respective rights, duties and obligations of each party to the other party as of the date hereof. No oral understandings, oral statements, oral promises or oral inducements exist

Section 8.13      Amendments.   This Agreement may not be amended, supplemented or modified orally, but only by an agreement in writing signed by each of the parties hereto.

Section 8.14      Third Party Beneficiaries.   Each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto and their respective successors and assigns as permitted under Section 8.9, except the Purchaser Indemnified Parties as provided in Article VII hereof and with respect to the provisions of Section 7.6.6, MDC.

Section 8.15      Use of Terms.   Whenever the context so requires or permits, all references to the masculine herein shall include the feminine and neuter, all references to the neuter herein shall include the masculine and feminine, all references to the plural shall include the singular and all references to the singular shall include the plural. Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.

Section 8.16      "Liens" Defined.   With respect to any asset, a "Lien" shall mean (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (other than an operating lease) (or any financial lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

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Section 8.17      No Strict Construction; Representation by Counsel.  The language used in this Agreement will be deemed to be the language chosen by the parties hereto 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.  The provisions of this Agreement shall be construed according to their fair meaning and neither for nor against any party hereto irrespective of which party caused such provisions to be drafted.  Each of the parties acknowledges that it has been represented by an attorney in connection with the preparation and execution of this Agreement.

Section 8.18      Representative.  Each of the Principals and WWG hereby appoints Gregory as his or its exclusive agent and attorney-in-fact (the "Representative") (i) to give and receive notices and communications with respect to the provisions of this Agreement, (ii) to amend the terms of this Agreement, (iii) to agree to, negotiate, enter into settlements or compromises of matters arising under the provisions of this Agreement, and (iv) to take any and all actions necessary or appropriate in the judgment of the Representative to be taken on behalf of the Principals and WWG under such provisions of this Agreement.  Such agency and that of any successor representative is irrevocable and coupled with an interest; provided, however, the Representative shall have no authority to act on behalf of any Principal and WWG with respect to an indemnity claim under Section 7.2.2.  In the event the Representative refuses to, or is no longer capable of, serving as the Representative hereunder, the other Principals shall promptly appoint a successor Representative who shall thereafter be the successor Representative hereunder and the Representative shall serve until such successor is duly appointed and qualified to act hereunder.  The Principals and WWG hereby agree that the Representative shall not have any liability to the Company or any Subsidiary for any action he takes or omits to take hereunder (or under any agreement or instrument referred to herein) in his capacity as Representative, unless such action or omission constitutes bad faith or willful misconduct by the Representative.  Notices or communications to or from the Representative shall constitute notice to or from the Principals and/or WWG in respect of matters relating to this Agreement.  Any decision, act, consent or instruction of the Representative shall constitute a decision of all of the Principals and WWG, and shall be final, binding and conclusive upon each Principal and WWG, and the Purchaser may rely upon any decision, act, consent or instruction of the Representative as being the decision, act, consent or instruction of WWG and each and every Principal.

Section 8.19      Guaranty.  MDC hereby agrees to pay, or cause the Purchaser to pay, when due, each payment of Purchase Price required pursuant to Article II above and any indemnification obligations of the Purchaser pursuant to Article VII above.

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IN WITNESS WHEREOF, the parties hereto have executed this Membership Interest Purchase Agreement, on the day and year first above written.

MDC ACQUISITION INC.
By:	/s/
	Name: Michael Sabatino
	Title: President
WWG, LLC
By:	/s/
	Daniel K. Gregory
	Managing Member
/s/
Todd Graham
/s/
Kevin Berg
/s/
Vincent Parinello
/s/
Daniel K. Gregory
/s/
Stephen Groth
/s/
Sean M. O'Toole
MDC PARTNERS INC. (solely with respect to Sections 7.6.6 and 8.19)
By:	/s/
	Name: Mitchell Gendel
	Title: General Counsel

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EX-10.2.2 5 v183284_ex10-2x2.htm

Exhibit 10.2.2

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

TEAM HOLDINGS LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this “Agreement”) dated as of March 1, 2010, is made and entered into by and among TEAM HOLDINGS LLC, a Delaware limited liability company (the “Company”), MDC ACQUISITION INC., a Delaware corporation (“MDC Holdco”), and WWG, LLC, a Florida limited liability company (“WWG”), WWG2, LLC, a Florida limited liability company ("WWG2", together with MDC Holdco and WWG are collectively referred to as the “Members” and individually a “Member”).   Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article XIII.

WHEREAS, WWG was (x) the sole shareholder of TEAM Enterprises, Inc. a Massachusetts corporation ("TEAM") and (y) the sole member of (A) OuterActive, LLC, a Delaware limited liability company ("O-A") and (B) Pulse Marketing, LLC, a Delaware limited liability company ("Pulse");

WHEREAS, WWG formed NEW TEAM LLC, a Delaware limited liability company ("NT"), as its sole member;

WHEREAS, WWG caused TEAM to contribute substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business, to NT pursuant to a Contribution Agreement (General Assignment, Bill of Sale and Assumption Agreement) (the "NT Conveyance Document");

WHEREAS, WWG and WWG2, LLC formed (the "Formation") the Company, with WWG owning 99% of the issued and outstanding membership interests in the Company and WWG2 owning 1% of the issued and outstanding membership interests in the Company (the membership interests of the Company collectively referred to as the "Membership Interests");

WHEREAS, simultaneously with the Formation, WWG and WWG2 executed and delivered a Limited Liability Company Agreement of the Company (the "Original Operating Agreement"), pursuant to which WWG transferred 100% of its equity ownership in (x) NT, (y) O-A and (z) Pulse to the Company, such that following such transfer, the Company was the sole member of each of NT, O-A and Pulse;

WHEREAS, WWG desired to sell 60% of the Membership Interests in the Company to MDC Holdco and, in connection therewith, to redesignate the Membership Interests as Class A Units, Class B Units and Class C Units;

WHEREAS, pursuant to the Membership Unit Purchase Agreement of even date herewith (the “Purchase Agreement”), WWG sold, transferred, conveyed and delivered to MDC Holdco a 60% membership interest in the Company represented by 600 Class A Units,  such that immediately after giving effect to such transfer, the issued and outstanding Units of the Company were to be as follows:  MDC Holdco – 600 Class A Units; WWG – 310 Class B Units and 80 Class C Units, WWG2 – 10 Class B Units in accordance with the terms of this Agreement;

WHEREAS, the Company wishes to create profits interests to be available for grant to certain Participants pursuant to that certain Restricted Unit Plan effective as of March 1, 2010 (the “Profits Interest Plan”);

WHEREAS, the Members now desire to enter into this Agreement to supersede the Original Operating Agreement, as amended, to designate the existing Membership Interests as Class A Units, Class B Units and Class C Units, to provide for the admission of MDC Holdco as a member, to create Class D Units for use under the Profits Interest Plan and to promote their interests and those of the Company by making provisions in this Agreement to govern their relations as Members;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members and the other parties hereto do hereby agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

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

Section 1.3             Offices; Registered Agent.  The principal place of business of the Company shall be 110 East Broward Boulevard, Suite 2450, Fort Lauderdale, Florida 33301 or such other principal place of business as the Managers (as defined in Section 11.5) may from time to time determine.  The Company may have, in addition to such office, such other offices and places of business at such locations, both within and without the State of Delaware, as the Managers may from time to time determine or the business and affairs of the Company may require.  The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person (as defined in Section 13.1) as the Managers may designate from time to time in the manner provided by law.

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

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

ARTICLE II

MEMBERS; MEMBERSHIP INTERESTS; UNITS

Section 2.1             Members and Membership Units.  The Company is authorized to issue 600 Class A Units, 320 Class B Units, 80 Class C Units and 80 Class D Units, all of which have been or are hereby issued and are outstanding, or are reserved for future issuance under the Profits Interest Plan, and allocated among the Members as set forth on Schedule 2.1.  Upon any change in the Members or Units, including by reason of the issuance of additional Units, the Members agree to complete a revised Schedule 2.1 hereof, which shall be deemed incorporated into this Agreement as part of this Section 2.1.

Section 2.2             Classes of Units.

(a)           Class A Units.  The Class A Units shall have the following characteristics: (i) an initial Unit Capital Account (as defined in Section 7.2(e) hereof), (ii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iii) entitlement to distributions as provided in Sections 3.4 and 9.2, and (iv) voting rights equal to one (1) vote per Unit.

(b)           Class B Units. The Class B Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

(c)           Class C Units. The Class C Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

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(d)           Class D Units.  The Class D Units shall have the following characteristics: (i) an initial Unit Capital Account of $0, (ii) provisions relating to transfer as provided in Article X hereof, (iii) an entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) an entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) no voting rights.  All Class D Units are intended to be “profits interests” within the meaning of Revenue Procedures 93-27 and 2001-43.  In accordance with Revenue Procedure 2001-43, the Company shall treat any such Member issued a Class D Unit as the owner of such Unit, and shall file its IRS Form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with such Class D Unit. Each such Member agrees to take into account such distributive share in computing its federal, state and local income or franchise tax liability for the entire period during which it holds the Class D Unit issued on the date hereof.  The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the fair market value of such Class D Unit.   The undertakings contained in this Section 2.2(d) shall be construed in accordance with Section 4 of Revenue Procedure 2001-43.  Notwithstanding any other provision of this Agreement the Managers shall have the right to amend, and the Members shall take all actions necessary to cause the Managers to amend, this Agreement, in anticipation of or following the issuance of final Treasury Regulations, as determined by the Managers in good faith, to provide for (i) the election of a safe harbor under Treasury Regulation Section 1.83-3(l) (or any similar provision) under which the fair market value of a Class D Units that is transferred in connection with the performance of services is treated as being equal to the liquidation value of that interest, (ii) an agreement by the Company and all of its Members to comply with the requirements set forth in such Regulations and Internal Revenue Service Notice 2005-43 (and any other guidance provided by the Internal Revenue Service with respect to such election) with respect to all Units transferred in connection with the performance of services while the election remains effective, and (iii) any other amendments reasonably related thereto or reasonably required in connection therewith. In executing this Agreement, the Members authorize the Company to utilize the same valuation methodology provided for in Proposed Treasury Regulations Section 1.83-3(l) in determining the fair market value of any Class D Units issued prior to the effective date of such Treasury Regulation.

Section 2.3             Transfer of Units.  In the event a Member sells all or a portion of its Membership Interests in accordance with Article X hereof, then effective as of the date of the sale and subject to compliance with Section 10.1 hereof, such Member shall automatically cease to be a Member in the Company as to such sold Unit.  Upon the acquisition by MDC Holdco of any other Units pursuant to the procedures set forth in Article X hereof or the Profits Interests Plan, MDC Holdco shall have all of the rights, powers and duties associated with such Units.

Section 2.4             Additional Members and Membership Interests.  Additional Persons may be admitted to the Company as Members and Membership Interests may be created and issued to such Persons on such terms and conditions as the Members shall approve, subject to Section 4.1 hereof.  The terms of admission or issuance may specify the creation of different classes or groups of Members having different rights, powers and duties.  The creation of any new class or group of Members shall be indicated in an amendment to this Agreement in accordance with Section 14.4 hereof and such amendment shall indicate the different rights, powers and duties of the classes or groups of Members.  No Member shall be admitted unless such Person shall agree to be bound by the terms of this Agreement, as such agreement may be amended.

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

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

Section 2.7             Certification of Units. The Company may at its election issue certificates to the Members representing the Units held by such Member. If such election is approved by the Managers, then this Section 2.7 shall apply and not otherwise:

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

(b)             The transfer register or transfer book and blank certificates shall be kept by the secretary of the Company or by any transfer agent or registrar approved by the Managers for that purpose. The certificates shall be numbered and registered in the share or unit register or transfer books of the Company as they are issued. Except to the extent that the Company shall have received written notice of an assignment of any Unit in the Company, the Company shall be entitled to treat the Person in whose name any certificates issued by the Company stand on the books of the Company as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such Unit on the part of any other Person.

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

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

ARTICLE III

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS

Section 3.1           Capital Account.

The Capital Accounts of the Members shall be computed in accordance with Section 7.2 below.

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

Section 3.3           Allocation of Profits and Losses.

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

(i)           Profits shall be allocated as follows:

(A) First, to those Members to whom GAAP PBT (as such term is defined in Section 13.1) for such calendar year and each prior calendar year since the Effective Time has been allocated under Section 3.5 or Section 3.6(b) until the excess of the allocation to each such Member of Profits under this Section 3.3(a)(i) over any allocation to each such Member of Losses under Section 3.3(a)(ii) for such calendar years equals the amount of GAAP PBT so allocated to each such Member during such calendar years; and

(B) Thereafter, to the Members holding Class A Units, Class B Units and Class C Units in accordance with the number of such Units held by them.

(ii)           Losses shall be allocated as follows:

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(A) First, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(B) over Losses allocated under this Section 3.3(a)(ii)(A), 100% to the Members in the proportion in which such excess was allocated;

(B) Second, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(A) over Losses allocated under this Section 3.3(a)(ii)(B), 100% to the Members in the proportion in which such excess was allocated;

(C) Third, to the Members holding Class A Units, Class B Units and Class C Units in accordance with the number of such Units held by them.

(b)             In the case of any property contributed to the Company by any Member which at the time of contribution has an adjusted tax basis which differs from its fair market value, items of Profits, Losses, income, gain and deduction for income tax purposes shall be allocated as required under Section 704(c) of the Code to take into account such difference.   The parties agree that such allocations will be made following the traditional method with remedial allocations.

(c)             Notwithstanding anything to the contrary in this Agreement, all items of income attributable to any:  (A) change in method of accounting for a taxable period ending on or prior to the Closing Date or a change in method required on account of the transactions contemplated to occur on the Closing Date, whether under Section 481 or otherwise; (B) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); and (C) installment sale or open transaction disposition made on or prior to the Closing Date, shall be allocated 100% to WWG in accordance with its interest.  The parties agree that if the allocation provided for in the preceding sentence cannot be done, the Managers shall cause the Company to allocate items of income, gain, deduction, and loss among the Members to achieve substantially the same results as if such allocation had been done.  In addition, an amount of income equal to any income triggered to MDC Holdco and/or the Company on account of any deemed assumption by either or both of them of any deferred revenue of WWG as of the Closing Date shall be allocated 100% to WWG in accordance with its interest.

(d)             Any item of taxable income, gain, loss or deduction of the Company (as well as any credits or the basis of property to which such credits apply) as determined for federal income tax purposes shall be allocated in the same manner as the corresponding income, gain, loss, or deduction is allocated under Section 3.3(a) (as modified by Section 3(e)).  Allocations pursuant to this Section 3.3(d) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

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(e)             Special Allocations and Limitations

(1)           In the event a Member unexpectedly receives in any taxable year any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) which cause or increase an Adjusted Capital Account Deficit (as defined in Section 13.1) of such Member, items of Company income and gain shall be specially allocated to such Member in such taxable year (and, if necessary in subsequent taxable years), in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible.

(2)           Notwithstanding the provisions of Section 3.3(a), in no event shall Losses of the Company be allocated to a Member if such allocation would result in such Member’s having an Adjusted Capital Account Deficit at the end of any taxable year.  All Losses in excess of the limitation set forth in this Section 3.3(e)(2) shall be allocated to the Members with positive balances in their Capital Accounts, as a class pro rata in proportion to such positive balances.

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

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

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

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

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

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

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

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

(5)           Solely for purposes of determining a Member’s proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Members’ interests in Company profits are in proportion to their Units, and, for purposes of allocating Nonrecourse Liabilities (as defined in Section 13.1) of the Company among the Members pursuant to Treasury Regulation Section 1.752-3(a)(3), the parties agree that each Member’s interest in Company profits shall equal its Units.

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

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(7)           For purposes of determining the character (as ordinary income or capital gain) of any Profits allocated to the Members pursuant to this Section 3, such portion of Profits that is treated as ordinary income attributable to the recapture of depreciation shall, to the extent possible, be allocated among the Members in the proportion which (i) the amount of depreciation previously allocated to each Member bears to (ii) the total of such depreciation allocated to all Members.  This Section 3.3(f)(7) shall not alter the amount of allocations among the Members pursuant to this Section 3, but merely the character of income so allocated.

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

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

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

Section 3.4            Distributions.

(a)           Subject to the making of the Tax Distributions (as defined in clause (b) below), to the extent permitted by the Act, the Company shall distribute Cash Flow (as defined in Section 13.1) of the Company as follows:

(i) first, distributions of Cash Flow generated by the Company in respect of any calendar year, shall be distributed 100% to the holders of the Class A Units in an amount equal to the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class A Distribution Shortfall Amount (as defined in Section 13.1) for such year;

(ii) thereafter, distributions of Cash Flow generated by the Company in respect of any calendar year shall be distributed to the holders of the Class B Units, Class C Units and Class D Units in an amount no greater than the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the sum of the Class B Distribution Shortfall Amount, Class C Distribution Shortfall Amount and Class D Shortfall Amount (each as defined in Section 13.1) for such year, distributed to the holders in the proportion and the amounts in which such sum was attributable to such holders.

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Distributions described above shall be made on an annual basis, generally in arrears, based upon the financial statements of the Company and its subsidiaries then available to the Managers.

(b)           Notwithstanding anything in this Agreement to the contrary, in preference to any other distributions pursuant to this Section 3.4, the Members shall cause the Company to distribute cash of the Company to its Members on a quarterly (or other reasonable) basis at least sufficient for each Member to meet such Member’s required federal, state and local income tax payments in respect of such Member’s distributive share of the Company’s taxable income for the current or the prior fiscal year calculated at the maximum individual tax rates for a resident of Florida taking into account the deduction allowable for federal income taxes of any state income taxes (which tax payments shall include (i) estimated tax payments in respect of the current fiscal year and (ii) any remaining payments of income tax on account of the prior fiscal year not funded out of Tax Distributions in respect of estimated payments for such prior fiscal year) (the "Tax Distributions").  For purposes hereof, if a Member is a "pass-through" entity for income tax purposes, the Tax Distributions required hereby shall be made in amounts which are at least sufficient to meet the tax payment requirements of the stockholders or members of such Member in respect of their allocated Profits hereunder. For purposes of Section 3.4(a) hereof, Tax Distributions shall be deemed to be distributions of Cash Flow at the time of such Tax Distribution.

(c)           Any distribution of funds prior to the end of the fiscal year in which such funds came into possession of the Company shall be treated as a non-interest-bearing loan (a "draw") from the Company to each Member receiving such draw and shall be deemed repaid by reducing the amount of each subsequent distribution to the Member receiving such draw pursuant to this Section 3.4(c) by the lesser of (i) the entire amount otherwise distributable to the Member receiving such draw, and (ii) the entire amount of any unrepaid draws pursuant to this Section 3.4(c).

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

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Section 3.5           Allocation of GAAP PBT.

(a)           Subject to Section 3.6(b) below, GAAP PBT (as defined in Section 13.1) for purposes of this Agreement shall be allocated for any calendar year as follows:

(i) first, GAAP PBT shall be allocated to the Loss Account (as defined in Section 3.5(b) below) until such Loss Account shall have been brought to zero;

(ii) next, GAAP PBT generated by the Company in calendar years 2010-2012 shall be allocated 100% to the holders of the Class A Units;

(iii) next, subject to Section 3.5(c) below, GAAP PBT generated by the Company in calendar years 2013 and 2014 shall be allocated 100% to the holders of Class A Units; provided, however, no more than the following shall be allocated to the holders of Class A Units under this Section 3.5(a)(iii) in respect of each of the calendar years set forth below:

Year	Amount
2013	the sum of (a) the Annual Hurdle plus (b) the Class A 2013 Shortfall Amount (such sum, the “2013 Class A Priority Allocation”)
2014	the sum of (a) the Annual Hurdle plus (b) the Class A 2014 Shortfall Amount (such sum, the “2014 Class A Priority Allocation”)

(iv) next, subject to Section 3.5(c) below, with respect to calendar years 2013 and 2014 only, after satisfaction of the allocations in Section 3.5(a)(iii) with respect to such year, GAAP PBT generated by the Company in such years shall be allocated 100% to the holders of Class B Units, Class C Units and Class D Units; provided, however, no more than the following shall be allocated to such holders under this Section 3.5(a)(iv) in respect of such calendar years as set forth below:

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Year	Amount
2013	the result of (x) the 2013 Class A Priority Allocation, multiplied by (y) 40%, divided by (z) 60%, such amount being allocated as follows: (A)     first, an amount equal to 8.0% of the amount of GAAP PBT in excess of Base PBT shall first be allocated to holders of Class D Units (other than MDC Holdco) pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized, with any amount attributable to unissued or cancelled units or Class D Units held by MDC Holdco being allocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them; (B)     next, the remainder shall be allocated pro rata among the holders of Class B Units and Class C Units in accordance with the total number of Class B and Class Units held by them until the Class C Units shall have been allocated an amount of GAAP PBT for 2013 under this clause (B) equal to 8.0% of Base PBT; and (C)     thereafter, any remainder shall be allocated 100% to the holders of Class B Units in accordance with the number of Class B Units held by them.
2014	the result of (x) the 2014 Class A Priority Allocation, multiplied by (y) 40%, divided by (z) 60%, such amount being allocated as follows: (A)     first, an amount equal to 8.0% of the amount of GAAP PBT in excess of Base PBT shall first be allocated to holders of Class D Units (other than MDC Holdco) pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized, with any amount attributable to unissued or cancelled units or Class D Units held by MDC Holdco being allocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them; (B)     next, the remainder shall be allocated pro rata among the holders of Class B Units and Class C Units in accordance with the total number of Class B and Class Units held by them until the Class C Units shall have been allocated an amount of GAAP PBT for 2014 under this clause (B) equal to 8.0% of Base PBT; and (C)     thereafter, any remainder shall be allocated 100% to the holders of Class B Units in accordance with the number of Class B Units held by them.

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(v) thereafter, subject to Section 3.5(c) below, with respect to calendar years 2013 and 2014 only, after satisfaction of the allocations in Sections 3.5(a)(iii) and 3.5(a)(iv) with respect to such year, GAAP PBT generated by the Company shall be allocated as follows:

(A)           32.0% of such additional amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(B)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

(C)           the remainder of the amount to be allocated under this Section 3.5(a)(v) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(vi) thereafter, with respect to the period January 1, 2015 until February 28, 2015, GAAP PBT generated by the Company in such period shall be allocated:

(A)           first, 100% to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them, up to a maximum amount equal to the sum of (i) the 2015 Hurdle plus (ii) the Class A 2015 Shortfall Amount (such sum, the “2015 Class A Priority Allocation”);

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(B)           second, 100% to the holders of Class B Units, Class C Units and Class D Units up to a maximum amount equal to the result of (i) the 2015 Class A Priority Allocation, multiplied by (ii) 40%, divided by (iii) 60%, such amount being allocated among them as follows:

(1)           first, 100% to the holders of Class B and Class C Units allocated pro rata among the holders of Class B Units and Class C Units in accordance with the total number of Class B and Class Units held by them until the Class C Units shall have been allocated an amount of GAAP PBT for 2015 under this clause (B) equal to 8.0% of Base PBT; and

(2)           thereafter, any remaining amount allocated 100% to the holders of Class B and Class D Units, allocated pro rata in accordance with the number of Class B or Class D Units held by such holder out of the total number of Class B and Class D Units authorized but without allocating any amount to MDC Holdco in respect of any Class D Units held by it, with any amount attributable to unissued or cancelled Class D Units or Class D Units held by MDC Holdco being allocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them;

(C)           third, any remaining GAAP PBT shall be allocated as follows:

(1)           32.0% of such amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(2)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

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(3)           the remainder of the amount to be allocated under this Section 3.5(a)(vi)(C) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(vii) thereafter, with respect to the remainder of calendar year 2015, GAAP PBT generated by the Company in such period shall be allocated as follows:

(A)           first, 100% to the holders of Class A Units, Class B and Class C Units allocated pro rata in accordance with the number of Units held by them, until holders of the Class C Units shall have been allocated an aggregate amount of GAAP PBT for 2015 under this clause (A) and Section 3.5(a)(vi) equal to 8.0% of Base PBT;

(B)           thereafter, the remaining GAAP PBT shall be allocated as follows:

(1)           32.0% of such amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(2)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

(3)           the remainder of the amount to be allocated under this Section 3.5(a)(vii)(B) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(viii) thereafter, with respect to calendar year 2016 and all calendar years thereafter, GAAP PBT generated by the Company in such years shall be allocated as follows:

(A)           first, GAAP PBT in excess of Base PBT shall be allocated as follows:

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(1)           32.0% of such amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(2)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco) being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

(3)           the remainder of the amount to be allocated under this Section 3.5(a)(viii)(A) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(B)            then, the remaining GAAP PBT shall be allocated to the holders of Class A, Class B and Class C Units, pro rata in accordance with the number of Class A, Class B or Class C Units held by them.

(b)           Allocation of Annual Loss.  In the event that GAAP PBT for any year shall be less than zero, such amount (expressed as a negative) shall be allocated to a loss account (the “Loss Account”), which shall be required to be brought to zero through allocations of future year allocations of GAAP PBT pursuant to Section 3.5(a)(i) before allocations of positive GAAP PBT shall be made to the Members.

(c)           Effect of Priority Satisfaction Event.  In the event that a Priority Satisfaction Event shall have occurred:

(i)           in respect of allocations being made for calendar years 2010-2012, then (A) allocations for such year shall continue to be made in accordance with Sections 3.5(a)(i) and (ii) for calendar years 2010-2012, (B) no allocations for calendar year 2013 or 2014 shall be made under Sections 3.5(a)(iii), (iv) or (v), and (C) all future allocations for 2013 and 2014 shall be made under Section 3.5(a)(viii) irrespective of the 2016 date limitation set forth therein;

(ii)           in respect of allocations being made for calendar years 2013 or 2014, then (A) no further allocations shall be made to Class A Units under Section 3.5(a)(iii) for such calendar year, (B) holders of Class B, C and D Units shall be entitled to receive an allocation under Section 3.5(a)(iv) in respect of such year of the lesser of (x) the amount remaining available for allocation and (y) 66.67% of the amount allocated to the holders of Class A Units for such calendar year under Section 3.5(a)(ii), (C) any additional allocations for such calendar year shall be made under Section 3.5(a)(v), and (D) allocations for all future years shall be made under Section 3.5(a)(viii) irrespective of the 2016 date limitation set forth therein; or

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(iii)           in respect of allocations being made for calendar year 2015 under Section 3.5(a)(v), then (A) no further allocations shall be made to Class A Units under Section 3.5(a)(vi) for such calendar year, (B) holders of Class B, C and D Units shall be entitled to receive an allocation under Section 3.5(a)(vi) in respect of such period of the lesser of (x) the amount remaining available for allocation and (y) 66.67% of the amount allocated to the holders of Class A Units for such period under Section 3.5(a)(vi), and (C) any additional allocations for 2015 shall be made under Section 3.5(a)(vii) irrespective of the period limitation set forth therein.

(d)           For purposes of this Section 3.5, the following additional definitions shall apply:

(i)           “2010 Hurdle” means the result of (x) the sum of (A) $2,200,000 and (B) FAP divided by 90%, multiplied by (y) 83-1/3%;

(ii)          “2011 Hurdle” means the sum of (x) $2,200,000, (y) FIP times 20%, and (z) SAP divided by 90%;

(iii)         “2012 Hurdle” means the sum of (w) $2,200,000, (x) FIP times 20%, (y) FIIP times 20%, and (z) FIAP divided by 90%;

(iv)         “2015 Hurdle” means the result of (x) the sum of (A) $2,200,000 and (B) FAP divided by 90%, multiplied by (y) 16-2/3%;

(v)          “Annual Hurdle” shall mean the result of (a) the sum of the CP, FIP and  FIIP, (b) multiplied by 20%.

(vi)         “Base PBT” shall mean 2009 PBT (as defined in Section 2.1.3 of the Purchase Agreement).

(vii)        “Class A 2013 Shortfall Amount” shall mean the excess, if any, of (x) the sum of the 2010 Hurdle, 2011 Hurdle and 2012 Hurdle over (y) the aggregate amount of GAAP PBT allocated to the holders of Class A Units pursuant to Section 3.5(a)(ii) in respect of calendar years 2010, 2011 and 2012.

(viii)       “Class A 2014 Shortfall Amount” shall mean the excess, if any, of (x) the sum of the Annual Hurdle and the Class A 2013 Shortfall Amount over (y) the amount of GAAP PBT allocated to the holders of Class A Units pursuant to Section 3.5(a)(iii) in respect of calendar year 2013.

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(ix)         “Class A 2015 Shortfall Amount” shall mean the excess, if any, of (x) the sum of the Annual Hurdle and the Class A 2014 Shortfall Amount over (y) the amount of GAAP PBT allocated to the holders of Class A Units pursuant to Section 3.5(a)(iii) in respect of calendar year 2014.

(x)          “CP”, “FAP”, “FIP”, “FIAP”, “FIIP” and “SAP” shall have the meaning ascribed to such terms in the Purchase Agreement.

(xi)         “Priority Satisfaction Event” shall mean (i) prior to the payment of the FIIP, if the allocation of GAAP PBT to Class A Units pursuant to Section 3.5(a) shall equal the result of (x) $19,000,000 plus (y) FAP divided by 90%, plus (z) SAP divided by 90% or (ii) after the payment of the FIIP, if the allocation of GAAP PBT to Class A Units pursuant to Section 3.5(a) shall equal the result of (w) the sum of CP, FIP, FIIP plus (x) FAP divided by 90%, plus (y) SAP divided by 90%, plus (z) FIAP divided by 90%.

Section 3.6             Company Acquisitions.                                                      

(a)             Consideration of Qualifying Proposals.  WWG may, from time to time, present to the Board, proposals for the Company to acquire businesses that are consistent with the Company’s Board-approved strategy.  If such proposal is a Qualifying Proposal (as defined below) and (x) the MDC Holdco Managers on the Board vote against approval of such acquisition or (y) MDC Partners (as defined in Section 4.1(a)) refuses to provide cash to fund the purchase price for such acquisition, such proposal shall be deemed a “Rejected Qualifying Proposal”.  For further clarity, the Members specifically agree that the failure of the Company and the potential acquisition target to come to terms, any Board requirement that the Company conduct thorough and complete due diligence, any Board requirement that adequate documentation and indemnification protection be provided to the Company or any MDC Partners requirement that the transaction structure be adjusted in respect of tax, finance, accounting or legal considerations, shall not be deemed to be grounds for a Qualifying Proposal to become a Rejected Qualifying Proposal.  In the event that three Qualifying Proposals made in good faith by WWG become Rejected Qualifying Proposals prior to March 1, 2013, an “Acquisition Failure Event” shall have been deemed to occur.   A “Qualifying Proposal” shall be a proposal to acquire a Person:

(i)                that has annual EBITDA margins of at least 20% over the prior two calendar years, and projected over the year of acquisition and the subsequent year,

(ii)               that has annual revenue growth of at least 15% over the prior two calendar years, and projected over the year of acquisition and the subsequent year,

(iii)              for which no Client Group (as defined in Section 10.4(e) below) in the trailing 12 months represents, nor is projected to represent in the next 12 months, more than 20% of revenues,

(iv)              for an effective purchase price multiple of less than 6.0x profit before tax,

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(v)               that has an implied enterprise valuation at the time of acquisition of not more than $20 million;

(vi)              made at a time when the Company shall have had PBT (as defined and calculated pursuant to the Purchase Agreement) for the prior calendar year, and projected PBT (as defined and calculated pursuant to the Purchase Agreement) for the current year, of at least 80% of the then current Reference PBT.  Reference PBT for purposes of this condition shall be (i) 2009 PBT (as defined in the Purchase Agreement) for acquisition proposals made in 2010; the average of 2009 PBT and 2010 PBT (as defined and calculated in the Purchase Agreement) for acquisition proposals made in 2011; and the average of 2009 PBT, 2010 PBT and 2011 PBT (as defined and calculated in the Purchase Agreement) for acquisition proposals made in 2012 or later years; and

(vii)             the terms of which incorporate the following elements:

(A) acquisition of a majority and control, with the right to require the remaining minority (non-binding put rights may be included);

(B) no more than 60% of the projected purchase price is payable at closing, with the remaining purchase price contingent on the performance of the target over at least two years post-acquisition;

(C) the target shall have sufficient and agreed upon working capital to operate its business post-closing in accordance with the target’s proposed operating and capital expenditure budget without additional borrowing;

(D) the target will be debt-free at closing;

(E) the purchaser shall be entitled to a priority return based on the purchase price for the initial purchase;

(F) the seller(s) may be granted minority protections no more favorable than provided in this Agreement;

(G) the seller(s) shall enter into protective covenant agreements reasonably acceptable to MDC Partners; and

(H) MDC Partners shall be entitled to pledge its acquired equity and the assets of the target (and subsidiaries, if any) in connection with MDC Partners’ credit facilities and/or secured debt; the target shall be required to grant upstream guarantees in connection with such facilities and to participate in MDC Partners’ centralized cash management and banking program;

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(b)           Effect of Acquisitions on Profit Allocation, Distributions.  In the event that the Company consummates an acquisition (a “Company Acquisition”), whether or not as a result of a Qualifying Proposal, the Members agree that the following shall be the basis pursuant to which GAAP PBT shall be allocated and cash generated from the operations of such Company Acquisitions (“Acquisition Cash Flow”) shall be utilized:

(i)              Payments of purchase price made by MDC Partners or one of its Affiliates shall be deemed a loan to the Company (an “Acquisition Loan”) made at an interest rate of 12%.  Any third party transaction expenses incurred in connection with the Company Acquisition shall be included as an Acquisition Loan;

(ii)             A separate calculation of GAAP PBT shall be made each year for each Company Acquisition (each such calculation, “Acquired Company GAAP PBT”); for the avoidance of doubt, (x) interest accruing on the Acquisition Loan in respect of any Company Acquisition shall be treated as an expense in the calculation of such Company Acquisition’s Acquired Company GAAP PBT and (y) to the extent any item of income or expense is included in the calculation of Acquired Company GAAP PBT, such item shall not also be included in the calculation of GAAP PBT for purposes of Section 3.5 except to the extent Acquired Company GAAP PBT is included back in GAAP PBT pursuant to clause (iii) below;

(iii)            As long as any Acquisition Loan remains outstanding or any Deferred Acquisition Consideration Liabilities (as defined in Section 10.4(e) below) remain in respect of a Company Acquisition, the Acquired Company GAAP PBT (whether positive or negative) for such Company Acquisition shall not be included in the GAAP PBT to be allocated pursuant to Section 3.5 above and instead shall be allocated 100% to the Class A Member and shall not be included in the calculations described in Section 3.5(a).  If no Acquisition Loan remains outstanding nor any Deferred Acquisition Consideration Liabilities remain in respect of a Company Acquisition, then the Acquired Company GAAP PBT for such Company Acquisition shall be included in the GAAP PBT to be allocated pursuant to Section 3.5 above;

(iv)            As long as a Acquisition Loan for a Company Acquisition is outstanding or any Deferred Acquisition Consideration Liability shall remain without a corresponding cash reserve (as described below), Acquisition Cash Flow from such Company Acquisition shall not be included generally in Cash Flow, but instead shall be allocated in the following manner: (A) first, to pay current interest and any interest arrearage on outstanding Acquisition Loans for such Company Acquisition, (B) second, as a contribution to Cash Flow specifically for the purpose of funding any necessary Tax Distribution relating to the allocation of Acquired Company GAAP PBT for such Company Acquisition, (C) third, as payment on the outstanding balance of the Acquisition Loans for such Company Acquisition and (D) fourth, as a contribution to a cash reserve to satisfy any Deferred Acquisition Consideration Liability for such Company Acquisition.   Upon payment in full of the Acquisition Loans for a Company Acquisition, and satisfaction in full of all Deferred Acquisition Consideration Liabilities (including for this purpose, any associated cash reserve) (collectively, “Debt Satisfaction”), any additional available Acquisition Cash Flow from such acquisition (“Acquisition Free Cash Flow”) shall be included in Cash Flow and become available for distribution in accordance with Section 3.4 hereof.  In the event that following Debt Satisfaction, but prior to delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, (x) the Deferred Acquisition Consideration Liabilities is adjusted downward (other than as a result of a payment), an amount of cash equal to such adjustment shall be released from the cash reserve and shall be included in Cash Flow and become available for distribution in accordance with Section 3.4 or (y) the Deferred Acquisition Consideration Liabilities is adjusted upward, then the first sentence in this clause (iv) shall become effective until a sufficient cash reserve is established to satisfy such adjustment.

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Each Company Acquisition shall be treated separately for purposes of this Section 3.6(b); however, each Acquisition Loan in respect of a single Company Acquisition shall be aggregated for purposes of this Section 3.6(b).

Section 3.7             Effective Time.  The Members agree that the provisions of this Article III shall apply from and after the Effective Time (as defined in Section 13.1).  Accordingly, GAAP PBT and any Profit or Losses of the Company in respect of the portion of calendar year 2010 prior to the Effective Time shall not be included in the calculations described in this Article III and shall be allocated solely to WWG and WWG2 in accordance with the Original Operating Agreement; provided, however, subject to Section 2.1.1(b) of the Purchase Agreement, no distributions shall be payable in respect of such GAAP PBT or Profits for such earlier period following the Effective Time.

ARTICLE IV

MANAGEMENT

Section 4.1             Management of the Company.

(a)           Except to the extent otherwise provided for herein, the powers of the Company shall be exercised by and under the authority of, and the business and affairs of the Company shall be managed under, the direction of the Managers of the Company. Notwithstanding the foregoing or any other provisions hereof to the contrary, until MDC Holdco or one of its Affiliates has purchased and paid for 100% of the Class B Units and Class C Units, the taking of any of the actions listed in clauses (i) through (x)below shall require the consent of both MDC Holdco and WWG.  The consent of MDC Holdco and WWG may be obtained by a vote at a meeting of the Members or by the written consent of MDC Holdco and WWG.

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(i)           a sale, lease or other disposition of all or substantially all or a significant part of the assets or business of the Company or any subsidiary thereof, except in connection with (x) a sale, lease or other disposition of all or substantially all or a significant part of the assets or business or stock (an “MDC Sale”) of MDC Partners Inc. (“MDC Partners”); (y) an MDC Financing (as defined in Section 4.1(e) hereof) or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing; or (z) any transfer by MDC Holdco or any of its Affiliates of their respective interest in the Company to another wholly-owned subsidiary of MDC Partners (an “MDC Internal Transfer”) (for purposes of this Agreement, in the event of any MDC Internal Transfer, the term MDC Holdco as used in this Agreement shall include any such transferee);

(ii)          a merger or consolidation of the Company with and into another Person or of another Person with and into the Company, except in connection with an MDC Sale, an MDC Internal Transfer or an MDC Financing;

(iii)         the authorization or issuance of additional Class A Units, Class B Units, Class C Units, Class D Units or other equity ownership interests in, or the granting of any other rights to participate in the proceeds of the sale of assets of the Company which are dilutive to WWG; or the incurring of debt for borrowed money in excess of the amount provided for in the approved annual operating budget or capital expenditure budget, except in connection with borrowings under the terms and conditions of the MDC Cash Management Program (and in compliance with Section 4.1(d) below);

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

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

(vi)         a relocation of the Company's primary offices outside of Broward County, Florida;

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

(viii)       any change in the name of the Company;

(ix)          entering into any business other than, or any transaction outside of, the normal business activities of the Company and any of its subsidiaries and related activities other than a MDC Internal Transfer;

(x)           the payment by the Company of any general management fee to any Member or one of such Member's Affiliates; or

(xi)          a fundamental change to the nature of the business of the Company and its subsidiaries, taken as a whole.

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

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

(d)           The parties hereto further agree that the operations of the Company and its subsidiaries shall be conducted (i) subject to Section 4.1(h) below, to participate in the overall cash management and banking program of MDC Holdco Partners as set forth on Schedule 4.1(d) hereto (the “MDC Cash Management Program”), and (ii) to comply on a timely basis with the financial reporting and budgeting procedures of MDC Holdco Partners as from time to time in effect, which procedures require the approval of an annual operating budget, capital expenditure budget and cash flow projections and require management of operating companies to seek approval prior to material deviations from such budgets.

(e)           Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the purchase price pursuant to the Purchase Agreement and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC Partners  and/or any of its Affiliates, in connection with its or any of its Affiliates’ current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon MDC Holdco’s Membership Interests; (x) pledge or grant a security interest in or otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under any Call to, or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders (as applicable and collectively, the “Lender”); and (z) have the Company and/or its subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an “MDC Financing”); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned by it.

(f)           MDC Partners shall cause sufficient working capital to be made available to the Company as shall be determined by the Board of Managers to be reasonably necessary to execute upon its approved annual operating and capital expenditure budgets, but in no event shall MDC Partners or any of its Affiliates be required to fund losses of the Company or any of its subsidiaries.  Such working capital shall be provided to the Company on terms consistent with the MDC Cash Management Program and accordingly, neither MDC Partners nor any of its Affiliates shall be required to provide working capital in the event that the consolidated cash balance of the Company in the MDC Cash Management Program is negative. The parties hereto further agree that the Company shall hereby adopt, and shall take appropriate steps to cause the employees of the Company to comply with, the Code of Conduct of MDC Partners, as the same may be amended from time to time.

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(g)           The Company shall comply with all applicable federal, state and local laws and the Company shall provide reasonable assistance to MDC Partners and its Affiliates in their compliance with all applicable federal, state and local laws, including without limitation, the provisions of the Sarbanes-Oxley Act of 2002, as amended from time to time.

(h)           The Company shall not take any of the actions described in Section 4.1(a) if such action would be reasonably be expected to have a material adverse effect on the value of the Class D Units that is disproportionate to the other Members unless (i) consented to by holders of a majority of the Class D Units or (ii) WWG and MDC Holdco have mutually agreed to such action in accordance with Section 4.1(a).

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

Section 4.3             Number and Qualifications of Managers.  As long as both of WWG own outstanding Units of the Company, there shall be five (5) Managers of the Company of which MDC Holdco shall be entitled to appoint three (3) Managers and WWG shall be entitled to appoint two (2) Managers (each Manager appointed by WWG must be a Principal or a full-time employee of the Company or one of its subsidiaries); thereafter the Managers shall be elected in accordance with Section 4.4.  No decrease in the number of Managers shall have the effect of shortening the term of any incumbent Manager.  None of the Managers need be Members of the Company or residents of the State of Delaware.  The initial designees of MDC Holdco are Rob Dickson, Michael Sabatino and David Doft.  The initial designees of WWG are Daniel K. Gregory and Stephen Groth.

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

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Section 4.5             Removal; Filling of Vacancies.  As long as WWG owns outstanding Units of the Company, only MDC Holdco can remove and replace its appointed Managers and only WWG can remove and replace its appointed Managers.  Following such time, the Members by the required vote as set forth in Section 5.5 shall be entitled to remove any Manager and to elect for the unexpired term of such Manager so removed another individual.  Upon the resignation, retirement or death of any of the Managers of the Company, subject to Section 4.3, the Members by the required vote as set forth in Section 5.5, shall be entitled to elect another Person for the unexpired term of such Manager.

Section 4.6             Place of Meetings.  Meetings of the Managers, annual, regular or special, may be held either in New York, NY or Fort Lauderdale, Florida, unless otherwise agreed to by the Managers (including, for as long as WWG own outstanding Units of the Company, at least one Manager appointed by MDC Holdco and one Manager appointed by WWG).

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

Section 4.8             Regular Meetings.  The Managers shall notify each of the Members of regular meetings of the Managers, which meetings shall be held at such times and places as may be fixed from time to time by resolution adopted by the Managers.  Except as otherwise provided by statute, any and all business may be transacted at any regular meeting.  The Managers shall be given reasonable notice of the date, time and place of any scheduled regular meeting.

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

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

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

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

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

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

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

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

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

ARTICLE V

MEETINGS OF MEMBERS

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

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

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

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

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

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

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

ARTICLE VI

OFFICERS

Section 6.1             Officers.  The Managers may designate one or more individuals (who may or may not be Managers) to serve as officers of the Company.  The Company shall have such officers as the Managers may from time to time determine.  Any two or more offices may be held by the same individual.  An officer of the Company shall have the duties and responsibilities consistent with his position and shall perform such duties and responsibilities as shall from time to time be prescribed or delegated to him by the Managers, subject to the terms of any employment agreement with the Company or one of its subsidiaries to which such officer may be a party. The parties hereto hereby initially designate those persons identified on Schedule 6.1 as officers of the Company.

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ARTICLE VII

ACCOUNTING AND TAX MATTERS; REPORTS; BANKING

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

Section 7.2         Capital Accounts.  An individual capital account (the “Capital Account”) shall be maintained by the Company for each Member as provided below:

(a)          Each Member's Capital Contributions when made shall be credited to such Member’s Capital Account.  The Capital Account of each Member shall, except as otherwise provided in this Agreement, be (i) credited with the amount of cash and the fair market value of any property contributed to the Company by such Member or its predecessor in interest (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), (ii) credited with the amount of any Profits allocated to such Member or its predecessor in interest for federal income tax purposes, (iii) debited by the amount of any Losses allocated to such Member or its predecessor in interest for federal income tax purposes, (iv) debited by such Member’s (or such predecessor’s) allocable share of expenditures of the Company not deductible in computing the Company’s taxable income and not properly chargeable as capital expenditures, including any nondeductible book amortization of capitalized costs, and (v) debited by the amount of cash or the fair market value of any property distributed to such Member its predecessor in interest (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code).  Immediately prior to any distribution of property by the Company, the Members’ Capital Accounts shall be adjusted, as required by Treasury Regulation 1.704-1(b)(2).

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE VIII

COVENANTS OF THE MEMBERS

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

 ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION

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

 

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Section 9.2         Liquidation.  Upon dissolution of the Company, the Members shall appoint a Manager as liquidating trustee, who shall immediately commence to wind up the Company’s affairs; provided, however, that a reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the satisfaction of liabilities to creditors so as to enable the Members to minimize the normal losses attendant upon a liquidation.  After making payment or provision for all debts and liabilities of the Company, if determined to be necessary under the circumstances by the Managers, the Members’ Capital Accounts shall be adjusted by debiting or crediting each Member’s Capital Account with its respective share of the hypothetical gains or losses resulting from the assumed sale of all remaining assets of the Company for cash at their respective fair market values as of the date of dissolution of the Company in the same manner as gains and losses on actual sales of such properties are allocated under Section 3.3, Section 3.5 and Section 3.6 hereof.  The liquidating trustee shall then by payment of cash or property make distributions to the Members in accordance with their respective Capital Accounts.  Any distribution to the Members in liquidation of the Company shall be made by the later of the end of the taxable year in which the liquidation occurs or 90 days after the date of such liquidation.  Notwithstanding any provisions in this Agreement to the contrary, no Member shall be obligated to restore a deficit balance in its Capital Account at any time.  The proceeds of liquidation shall be distributed, as realized, in the manner provided in the Act, subject to the applicable provisions of Section 3.4.  Subject to the immediately following sentence, the Members shall continue to share Profits and Losses during liquidation in the same proportions, as specified in Sections 3.3, 3.5 and 3.6 hereof, as before liquidation.  Notwithstanding anything to the contrary herein, the Managers shall in their good faith discretion (and in a manner which reflects the economic interests of the Members consistent with the intent of the transactions set forth in this Agreement and the Purchase Agreement) allocate items of income, gain, deduction, and loss for the year of liquidation (and for earlier years if necessary to the extent then possible) so as to give Members positive Capital Account balances, immediately before the distributions provided for in the second preceding sentence, equal to the amount (if any) that would be distributed to Members if distributions were made in accordance with Section 3.4(a) and (b) hereof.  In the event that such Manager is unable to perform in his capacity as liquidating trustee due to bankruptcy, dissolution, death, adjudicated incompetency or any other termination of such Manager as an entity, the liquidating trustee shall be a Person approved by the unanimous vote of the Membership Interests.  With respect to this provision, the term “liquidation” shall have the same meaning as set forth in Treasury Regulation §1.704-1(b)(2)(ii) as in effect at such time, provided that the events specified in Section 10 shall not be deemed a “liquidation”.

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

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

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ARTICLE X

RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS

Section 10.1       Assignment by the Members.  For so long as WWG owns Units, no Class A Unit shall be sold or transferred without the consent of WWG, except in connection with (i) an MDC Sale, (ii) an MDC Holdco Internal Transfer, (iii) a sale described in Section 10.2(c) or (iv) an MDC Financing or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing.  Except as set forth in Section 10.2(c), no Class B Unit, Class C Unit or Class D Unit shall be sold, transferred, assigned, pledged or otherwise disposed of, in whole or in part, without the written consent of MDC Holdco to such transfer (or, in the case of a Class D Unit, in accordance with the Profits Interest Plan).  Any purported transfer by WWG, WWG2 or other permitted holder of Class B Units, Class C Units or Class D Units of all or any of its Units, any purported assignment by WWG, WWG2 or other permitted holders of Class B Units, Class C Units or Class D Units of any of its rights under this Agreement, and any purported delegation by WWG, WWG2 or other permitted holders of Class B Units, Class C Units or Class D Units of any of its duties or obligations under this Agreement (which shall in no way relieve WWG, WWG2 or such other permitted holder of Class B Units, Class C Units or Class D Units of responsibility for the performance of any such duties and obligations), in contravention of any of the provisions of this Agreement, will be null and void ab initio and of no force and effect.  Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the indirect sale of Units as part of any transaction involving a change of control of MDC Partners or its successors.

Section 10.2       Put Rights of WWG/Call Rights of MDC Holdco.

(a)         MDC Holdco Call of Class B Units.  At any time on or after March 1, 2013 (the "Call Period"), MDC Holdco shall have the right (but not the obligation) to require WWG and WWG2 to sell to it (a "Call"), all of the remaining Class B Units owned by WWG and WWG2.  MDC may exercise the Call at any time during the Call Period, and may do so by delivering written notice of exercise (a "Call Exercise Notice") to WWG and WWG2 during the Call Period.   The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

(b)         MDC Holdco Call of Class C Units.  At any time during the Call Period, MDC Holdco shall also have the right (but not the obligation) to exercise a Call for all of the remaining Class C Units owned by WWG.  MDC may exercise the Call at any time  during the Call Period, and may do so by delivering a Call Exercise Notice to WWG during the Call Period.   The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

(c)         WWG Sale Request. At any time on or after March 1, 2015 (or in the event of an Acquisition Failure Event (as defined in Section 3.6), at any time on or after March 1, 2013) (the “Sale Request Period”), in the event that MDC Holdco shall not have exercised its Call right with respect to all of WWG’s Class B Units or Class C Units, WWG shall have the right (but not the obligation) to request that MDC Holdco to purchase from it and WWG2 (a “Sale Request”) any or all of their remaining Class B Units and Class C Units.  WWG may make a Sale Request by delivering written notice (a “Sale Request Notice”) to MDC Holdco at any time during the applicable Sale Request Period; provided that WWG may not make more than one Sale Request in any 12-month period.  MDC Holdco shall have thirty (30) days following receipt of the Sale Request Notice to accept WWG’s Sale Request, which acceptance shall be exercised by delivering written notice (a “Sale Request Acceptance Notice”) to WWG within such thirty day period.  If such Sale Request Acceptance Notice is delivered (an “Accepted Sale Request”), the Class B Units and/or Class C Units shall be sold to MDC Holdco in accordance with the provisions set forth in Section 10.4, with the date of delivery of the Sale Request Acceptance Notice being the exercise date.  In the event that MDC Holdco shall not have delivered a Sale Request Acceptance Notice during such thirty (30) day period, then (i) WWG shall have the right for twelve (12) months to solicit bona-fide offers for a sale of its Class B Units and Class C Units, WWG’s Class B Units and of the Class D Units by the holders of such Class D Units, to an unaffiliated third party (the “Prospective Purchaser”), (ii) upon the receipt of such offer, WWG shall deliver written notice (a “Third Party Offer Notice”) of such offer to MDC Holdco, which notice shall identify the Prospective Purchaser and shall describe the material terms of such offer, (iii) for a period of ten (10) days after receipt of the Third Party Offer Notice, MDC Holdco shall have the right to deliver a Sale Request Acceptance Notice and (x) if such Sale Request Acceptance Notice is delivered, MDC Holdco shall acquire the Class B and/or Class C Units as described above and no Member shall be permitted to consummate a sale to the Prospective Purchaser or (y) if a Sale Request Acceptance Notice is not delivered, WWG shall, for a period of one hundred twenty (120) days, be permitted to consummate the sale of its Class B Units and/or Class C Units, WWG2 and the holders of Class D Units shall be permitted to sell their Class B Units and Class D Units, respectively, to such Prospective Purchaser, and WWG shall have the right to require MDC Holdco to sell its Units to such Prospective Purchaser on substantially the same terms and conditions (taking into account the economic differences, if any, between Units) provided that MDC Holdco is able to obtain all necessary approvals, including the approval of its lenders.

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Section 10.3         Binding Obligations Upon Exercise of a Call or an Accepted Sale Request.  Upon the proper delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, WWG and WWG2 shall be obligated to sell to MDC Holdco, and MDC Holdco shall be obligated to purchase from WWG and WWG2, the Units subject to the Call or Accepted Sale Request, as applicable, pursuant to the terms of this Article X.

Section 10.4         Put/Call Purchase Price.

(a)           Calculation/ Payment of the Put/Call Purchase Price for Class B Units.  In connection with the exercise of a Call under Section 10.2(a) or an Accepted Sale Request for Class B Units, MDC Holdco shall calculate and pay to WWG and WWG2, in the aggregate (payable to them pro rata in accordance with the number of Class B Units held by them), the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class B Put/Call Purchase Price"):

(i)         within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “First Class B Payment”) equal to:

             AP x (4.0 x (Adjusted PBT for YP-1) –Acquisition Liabilities)

                3

(ii)         within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “Second Class B Payment”) equal to:

{AP x (4.0 x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP)) – Acquisition Liabilities)} – First Class B Payment

               3

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(iii)         within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the “Final Class B Payment”)  equal to:

(x)  the result of:

AP x (AM x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP) + (Adjusted PBT for YP+1)) – Acquisition Liabilities)

3

minus (y) (First Class B Payment + Second Class B Payment)

(b)          Calculation/ Payment of the Put/Call Purchase Price for Class C Units.  In connection with the exercise of a Call under Section 10.2(b) or an Accepted Sale Request for Class C Units, MDC Holdco shall calculate and pay to WWG the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class C Put/Call Purchase Price"; the Class B Put/Call Purchase Price and the Class C Put/Call Purchase Price are referred to in this Agreement as a “Put/Call Purchase Price”):

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “First Class C Payment”) equal to:

              AP x (4.0 x (Adjusted PBT for YP-1) –Acquisition Liabilities)

               3

(ii)          within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “Second Class C Payment”) equal to:

{AP x (4.0 x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP)) – Acquisition Liabilities)} – First Class C Payment

               3

(iii)         within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the “Final Class C Payment”)  equal to:

(x)  the result of:

AP x (AM x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP) + (Adjusted PBT for YP+1)) – Acquisition Liabilities)

3

minus (y) (First Class C Payment + Second Class C Payment)

 

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; provided, however, for purposes of making each of the calculations in this Section 10.4(b), in no event shall any of Adjusted PBT for YP-1, Adjusted PBT for YP or Adjusted PBT for YP+1 be greater than PBT Limit; provided, further than the Class C Put/Call Purchase Price shall not, with respect to any Call or Accepted Sale Request, exceed the result of (i) AP multiplied by (ii) AM multiplied by (iii) the PBT Limit.

(c)          Additional Put/Call Purchase Price for Class C Units.  In connection with the exercise of a Call under Section 10.2(b) or an Accepted Sale Request for Class C Units, MDC Holdco shall calculate and pay to WWG, in respect of its Class C Units, the following additional amounts of Put/Call Purchase Price, to the extent applicable:

With respect to unissued Class D Units as of the delivery of a Call Exercise Notice or a Sale Request Acceptance Notice:

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “First True-Up Payment”) equal to:

(x)          the result of:

(Unissued AP divided by AP)

multiplied by

(y)           the result of:

           [AP x (4.0 x (Adjusted PBT for YP-1) –Acquisition Liabilities)] – First Class C Payment

             3

(ii)          within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “Second True-Up Payment”) equal to:

(x)          the result of:

(Unissued AP divided by AP)

multiplied by

(y)          the result of:

(A)          the result of

{AP x (4.0 x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP)) – Acquisition Liabilities)}

               3

minus

(B)          the result of

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(First Class C Payment + Second Class C Payment)

with the result of (x) multiplied by (y), then reduced by

(z)          the First True-Up Payment

(iii)          within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the “Third True-Up Payment”)  equal to:

(x)          the result of:

(Unissued AP divided by AP)

multiplied by

(y)         the result of:

(A)          the result of

AP x (AM x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP) + (Adjusted PBT for YP+1)) – Acquisition Liabilities)

3

minus

(B)          the result of

(First Class C Payment + Second Class C Payment + Final Class C Payment)

with the result of (x) multiplied by (y), then reduced by

(z)          (First True-Up Payment + Second True-Up Payment)

With respect to Class D Units that are purchased by MDC Holdco after the delivery of a Call Exercise Notice or a Sale Request Acceptance Notice in respect of the Class C Units:

(iv)         within 7 calendar days following the Final Payment of Put/Call Purchase Price (each as defined in the applicable Restricted Unit Award Agreement for a holder of Class D Units) for any Call pursuant to Section 2(f) of the Restricted Unit Award Agreement, or any Put or Call involving a purchase by MDC Holdco directly from the Participant (as defined in the Restricted Unit Award Agreement) for which the Payout Factor (as defined in the Restricted Unit Award Agreement) is less than 100%, in each case that occurs after the delivery of a Call Exercise Notice or a Sale Request Acceptance Notice for the Class C Units, MDC Holdco shall pay the holders of Class C Units the difference between (x) the amount that such holder of Class D Units would have received under their Restricted Unit Award Agreement had such Put or Call been calculated as a Call under Section 2(e) of the Restricted Unit Award Agreement and the Payout Factor were 100% and (y) the total Put/Call Purchase Price received by such holder of Class D Units (collectively, the payments made to holders of Class C Units under this clause (iv), the “Final True-Up Payments”).

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(d)          If any calculation of the Put/Call Purchase Price results in an amount which is equal to less than zero, such Put/Call Purchase Price payment shall be deemed to be zero and accordingly the seller of the Units pursuant to such Put or Call shall not be under any obligation to pay such negative amount (expressed as a positive number).

(e)          Other Definitions.

(i)          “Acquisition PBT” for any period, for any Company Acquisition, shall mean the PBT associated with such Company Acquisition for such period; for the avoidance of doubt, interest accruing on the Acquisition Loans in respect of such Company Acquisition shall not be treated as an expense in the calculation of such Company Acquisition’s Acquisition PBT.

(ii)         “Acquisition Liabilities” shall mean the sum of (x) the outstanding balance of all Acquisition Loans as of the Put/Call Closing Date and (y) the sum of all Deferred Acquisition Consideration Liabilities for all Company Acquisitions (net of any cash reserve associated with such liabilities as described in Section 3.6(b)) as of the Put/Call Closing Date; provided, however, for purposes of calculating the Final Class B Payment, the Final Class C Payment or the Third True-Up Payment, the Deferred Acquisition Consideration Liabilities in clause (y) shall be measured as of December 31 of YP+1, but shall add back to such amount any payments of deferred acquisition consideration actually made between the Put/Call Closing Date and December 31 of YP +1 to the extent such payments were satisfied by a source other than the associated cash reserve.

(iii)        “Adjusted PBT” for any year shall mean (x) the PBT for such year exclusive of all Acquisition PBT plus (y) for each Company Acquisition, the Annualized Acquisition PBT for such Company Acquisition.

 (iv)       "AM" shall mean the applicable multiple and equal:

(w)        4.0, if the Average Annual PBT Growth Rate is less than or equal to 5%;

(x)          4.25, if the Average Annual PBT Growth Rate is greater than 5%, but less than or equal to 10%;

(y)         4.5, if the Average Annual PBT Growth Rate is greater than 10%, but less than or equal to 15%;

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(z)          5.0, if the Average Annual PBT Growth Rate is greater than 15%;

; provided, however, the value of AM determined above shall be further adjusted based on the following:

(A)         if Revenue for any Client Group for the period YP and YP+1 exceeds 30% of the total Revenue of the Company during such period, then AM shall be reduced by 0.5; provided, however, AM shall not be reduced to lower than 4.5 as a result of such reduction; or

(B)         if no Client Group has generated Revenue for the Company during the period YP and YP+1 greater than or equal to 30% of the total Revenue of the Company during such period, then AM shall be increased by 0.5.

For purposes of making the calculation described in clauses (A) and (B) above, Revenue shall be deemed to include Revenue from any Company Acquisition on a pro forma basis for any period during YP or YP+1 that occurred prior to the consummation of such Company Acquisition.

(v)          “Annualized Acquisition PBT” shall mean, with respect to any Company Acquisition, (x) the total Acquisition PBT for such Company Acquisition for the applicable portion of the Measuring Period in which the Company Acquisition was included in the Company’s consolidated results, divided by (y) the number of months during the Measuring Period in which the Company Acquisition was included in the Company’s consolidated results, with such result multiplied by (z) 12.

 (vi)        "Applicable Percentage" or "AP" shall mean (x) the number of Class B Units or Class C Units, as the case may be, being sold pursuant to a Call or an Accepted Sale Request, divided by (y) the total number of authorized Class A Units, Class B Units and Class C Units.

(vii)        "Average Annual PBT Growth Rate" shall mean, for purposes of calculating any Put/Call Purchase Price, the result of (x) the sum of (1) PBT for YP+1 divided by PBT for YP, and (2) PBT for YP divided by PBT for YP-1, multiplied by (y) 50%; provided, however, for purposes of making this calculation Acquisition Company PBT shall only be included in PBT in the following manner:

(A)         if the Company Acquisition occurred prior to calendar year YP-1, then it shall be included for all periods YP-1, YP and YP+1;

(B)         if the Company Acquisition occurred during the first six months of calendar year YP-1:  (x) Acquisition Company PBT shall be calculated on a pro forma basis for YP-1 to include the portion of YP-1 pre-acquisition, and (y) Acquisition PBT shall be included for periods YP and YP+1;

40

(C)          if the Company Acquisition occurred during the last six months of calendar year YP-1: (x) no Acquisition Company PBT shall be included in clause (1) above for YP-1 or YP; and (y) Acquisition PBT shall be included for purposes of clause (2) above for periods YP and YP+1;

(D)          if the Company Acquisition occurred during the first six months of calendar year YP:  (x) no Acquisition Company PBT shall be included in clause (1) above for YP-1 or YP; (y) for purposes of clause (2) above, Acquisition Company PBT for YP shall be calculated and included on a pro forma basis to include the portion of YP pre-acquisition, and (z) Acquisition PBT shall be included for period YP+1; or

(E)          if the Company Acquisition occurred during the last six months of calendar year YP or during YP+1, no Acquisition Company PBT shall be included for any of YP-1, YP or YP+1.

(viii)      “Client Group” for any client of the Company, shall mean such client and each other client of the Company that is part of the same group of companies that  conducts business through more than one entity, division or operating unit, whether or not separately incorporated.

(ix)         “Deferred Acquisition Consideration Liabilities” shall mean, as of any date, the current estimated deferred acquisition consideration (including earn-outs) accounted for in the financial statements of MDC Partners in respect of any Company Acquisition.

(x)         "Measuring Period" shall mean the calendar years included in the applicable Put/Call Purchase Price calculation under Section 10.4(a), 10.4(b) or 10.4 (c)(i)-(iii) above.

(xi)         “PBT” for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal and state income taxes for such period, determined in accordance with GAAP; provided, however, in making the foregoing determinations:

(1)          neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or any predecessor entity), is the named beneficiary or is otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

41

(2)          intercompany management fees charged by MDC Holdco or any of its Affiliates (as defined in Section 13.1 hereof) to the Company or any of its subsidiaries, shall not be treated as an expense, unless such fees have been approved by the parties in accordance with this Agreement, and such fees replace an expense that would otherwise be paid by the Company to a third party;

(3)          any Losses (as defined in Section 7.2 of the Purchase Agreement) of a Purchaser Indemnified Party (as defined in Section 7.2 of the Purchase Agreement) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 of the Purchase Agreement and which are fully assumed by WWG and/or the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(4)          any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3 of the Purchase Agreement) shall not be treated as an expense;

(5)          there shall be no charge against income for the payment or accrual of any component of any Purchase Price payment pursuant to the Purchase Agreement or any component of any Put/Call Purchase Price payment;

(6)          the fees and disbursements of the Company’s attorneys, accountants and financial advisors incurred prior to or after the Closing (as defined in Section 2.3 of the Purchase Agreement) in connection with the formation and organization of the Company and the Subsidiaries and the negotiation, preparation and execution of the Purchase Agreement and the other documents delivered at such Closing that have either (x) been expensed and paid prior to such Closing or (y) accrued for on the Closing Balance Sheet (as defined in the Purchase Agreement), shall not be treated as an expense;

(7)          the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company’s direct or indirect ownership in such subsidiary;

(8)          any extraordinary or non-recurring gains or losses, gains or losses from the sale of any capital assets, and any gains or losses recognized by the Company or any of its subsidiaries in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries shall be excluded from income;

(9)          the fees and expenses of (1) the Accountants in preparing the Special Determination or any Annual Determination (each as defined in the Purchase Agreement) or (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder, in excess of $50,000 in any calendar year, shall not be treated as an expense; and

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(10)        in the event that the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger or similar transaction (an “Acquired Business”) on or after the date of this Agreement, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business unless its inclusion has been agreed to by the Representative (as defined in the Purchase Agreement), in which case it shall be included in the manner described within the definitions of “Acquisition PBT”, “Adjusted PBT” and “Average Annual PBT Growth Rate” in this Section 10.4(e);

(11)        any transaction expenses incurred in connection with any potential or completed acquisition shall be included as an expense;

(12)        any write-off or amortization or depreciation of goodwill or other intangibles arising out of the purchase of the Purchased Interests (as defined in the Purchase Agreement) pursuant to the Purchase Agreement shall not be treated as an expense;

(13)        there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price (as defined in the Purchase Agreement);

(14)        the fees and expenses of Grant Thornton LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010, up to $85,000 shall not be treated as an expense for purposes of 2010 PBT;

(14)        any distribution by WWG of any Purchase Price proceeds to its members shall not be treated as an expense;

(15)        any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense, unless the termination of such Principal's employment was recommended and initiated by the Representative (as defined in the Purchase Agreement);

(16)        PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses; and

(17)        solely with respect to the calculation of 2010 PBT, an amount equal to $459,129 shall not be treated as an expense.

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 (xii)        “PBT Limit” shall mean 2009 PBT (as defined in Section 2.1.3 of the Purchase Agreement).

 (xiii)       "Revenues" during each relevant calendar year shall mean the commissions and fees, mark-ups and hourly charges earned by the Company and its subsidiaries during such calendar year for work generated or performed by employees or contractors and charged to clients determined in accordance with GAAP; provided, however, Revenues shall not include any pass-through of third party costs or direct billings of expenses where the Company and its subsidiaries acts as an agent for its clients.

(xiv)        "Unissued AP" shall mean (x) the number of authorized Class D Units that are unissued as of the date that a Call Exercise Notice or a Sale Request Acceptance Notice in respect of the Class C Units has been delivered, divided by (y) 80, with the result multiplied by (z) 8.0%.

(xv)         "YP" shall mean the calendar year in which the respective Call was exercised by proper delivery of an Exercise Notice or the Accepted Sale Request occurred.

(xvi)        "YP-1" shall mean the calendar year immediately preceding YP.

(xvii)       "YP+1" shall mean the calendar year immediately following YP.

(f)           Accounting Procedures.

(i)           Upon exercise of each Call or Accepted Sale Request, MDC Holdco may prepare or, at its discretion, may cause BDO Seidman LLP or other independent accountant of national standing (the "Accountants") to prepare, in accordance with GAAP, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business on December 31 of each year contained within the Measuring Period, and a related consolidated statement of income of the Company and its subsidiaries, if any, for the relevant calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth for the period under examination the applicable calculation of PBT, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4 (the "Annual Determination").  MDC Holdco shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements and to determine the scope of such audit.  MDC Holdco shall instruct the Accountants to deliver a copy of each such Annual Determination to WWG not later than 120 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of MDC Holdco.

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

(iii)           In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 10.4, then WWG and MDC Holdco agree to select another mutually acceptable accounting firm to perform the services to be performed under this Section 10.4 by the Independent Auditors.  If WWG and MDC Holdco fail to select the Independent Auditors as required by clause (i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either WWG or MDC Holdco may request the American Arbitration Association in New York City (the "AAA") to appoint an independent firm of certified public accountants to perform the services required under this Section 10.4 by the Independent Auditors.  MDC Holdco, on the one hand, and WWG, on the other hand, shall share the fees of the AAA equally.  For purposes of this Section 10.4(f) the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this clause (iii).

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

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(v)           The books and records of the Company and its subsidiaries shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto and their representatives, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 10.4.  WWG, on the one hand, and MDC Holdco, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by or for them to support a position that is contrary to the position taken by the other party. Upon the request by WWG, MDC Holdco shall request that the Accountants make their work papers available to WWG and its representatives after the completion of any audit of the financial statements of the Company and its subsidiaries and/or to verify the calculations set forth in any Annual Determination (in each case during normal business hours upon reasonable advance notice at the principal offices of the Accountants); provided, however, it is understood that the decision to make such work papers available is solely that of the Accountants.

(g)           Closing.  The closing for each purchase and sale of Units (a “Put/Call Closing”) pursuant to a Call or Accepted Sale Request, as applicable, shall be held at the offices of the Company within 30 days after the delivery of an Exercise Notice or Sale Request Acceptance Notice.  The date on which the respective Put/Call Closing takes place is referred to in this Agreement as its “Put/Call Closing Date”.  At each Put/Call Closing, the parties shall execute an Assignment of Unit Agreement in form and substance reasonably acceptable to MDC Holdco and WWG and an amendment to this Agreement in accordance with Section 14.4 reflecting such transfer and the reallocated Units (including the related portion of the Capital Account).  The transfer of any Units pursuant to this Section 10.4 shall be free and clear of all claims, liens and encumbrances other than as created by the provisions of this Agreement.  Prior to any Put/Call Closing, the Company and WWG shall use their best efforts to obtain any required governmental or regulatory approval or approvals.  MDC Holdco shall have the right to postpone any scheduled Put/Call Closing until any such governmental or regulatory approval is obtained.

(h)           Put/Call Purchase Price Payment.  Payment of each component of the Put/Call Purchase Price shall be made by MDC Holdco in cash by direct wire transfer to such account as WWG may direct by written notice to the Purchaser given pursuant to this Agreement.  Each component of the Put/Call Purchase Price shall be deemed to include imputed interest to the extent required by the Code.

(i)           Effect of Events During Period Class B Units and Class C Units Are Issued.  The parties hereto understand and agree that under the terms of each Principal’s Employment Agreement with the Company, such Principal may be terminated for "Cause" or "without Cause" (as such terms are defined in his respective Employment Agreement).  Accordingly, each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any subsidiary of the Company, no party to this Agreement or any Person deriving rights through any such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary of the Company (x) constitutes a breach by MDC Holdco or any of its Affiliates of this Agreement, (y) resulted in an adverse effect on any Put/Call Purchase Price payment under this Agreement forming the basis for a claim against MDC Holdco or any of its Affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 10.4(f) hereof.  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect the right of WWG or WWG2 to receive any Put/Call Purchase Price payment under this Agreement.

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(j)           MDC Partners Guaranty.  MDC Partners hereby agrees to pay, or cause MDC Holdco to pay, when due, each payment of Put/Call Purchase Price required pursuant to this Article X.

ARTICLE XI

INDEMNIFICATION

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

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

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

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

Section 11.5        Definitions.  For purposes of this Article XI:

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

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

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

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

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

Section 11.7        Nonexclusivity of Rights.  The right to indemnification and the advancement and payment of expenses conferred in this Article XI shall not be exclusive of any other right that a Manager or other Person indemnified pursuant hereto may have or hereafter acquire under any law (common or statutory), provision of the Certificate or this Agreement or otherwise.

ARTICLE XII

ADDITIONAL AGREEMENTS

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

ARTICLE XIII

OTHER DEFINITIONS

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

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

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

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

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

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"Affiliate" of any Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

"Business Day" shall mean any day on which commercial banks are not authorized or required to close in New York, NY.

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

"Cash Flow" shall mean the consolidated amount of cash in respect of any calendar year of all of the Company and its subsidiaries that the Board of Managers in its good faith discretion believes is available for distribution to Members of the Company; provided, however, during calendar years 2010-2012, Cash Flow must be at least an amount necessary to satisfy the distribution required pursuant to Section 3.4(a)(i).

"Class A Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(i) to holders of Class A Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class A Units of GAAP PBT under Section 3.5(a) and Section 3.6(b) for such prior years.

“Class B Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class B Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class B Units of GAAP PBT under Section 3.5(a) for such prior years.

“Class C Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class C Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class C Units of GAAP PBT under Section 3.5(a) for such prior years.

“Class D Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class D Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class D Units of GAAP PBT under Section 3.5(a) for such prior years.

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

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

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

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"Effective Time" shall mean March 1, 2010.

"GAAP PBT" shall mean, for any calendar (or partial) year, the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal and state income taxes for such period, determined in accordance with GAAP.

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

(i)          Subject to the final sentence of this definition, the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by reference to Section 3.1(b), and as set forth in Section 8 to each of the Conveyance Documents.

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

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

(iv)        The Gross Asset Value of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (vi) of the definition of Profits and Losses herein; provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the extent the Managers determine that an adjustment pursuant to clause (ii) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iv).

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

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

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

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

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

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

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

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

"Profits and Losses", shall mean, for each fiscal year, an amount equal to the Company’s taxable income or loss for such fiscal year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

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

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

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

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

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

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

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

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 3.3(e) shall be determined by applying rules analogous to those set forth in clauses (i) through (vii) above.

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

"Units" shall mean Class A Units, Class B Units, Class C Units or Class D Units, as applicable.

ARTICLE XIV

MISCELLANEOUS

Section 14.1         Manner of Giving Notice.  Whenever under the provisions of the Act, the Certificate or this Agreement, notice is required to be given to the Company, any Member or Manager of the Company, and no provision is made as to how such notice shall be given, any such notice to be given hereunder shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next Business Day if sent by facsimile transmission (if transmission is electronically confirmed) or by a prepaid overnight courier service, and in each case at the respective addresses or numbers set forth below or such other address or number as such party may have fixed by notice:

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If to MDC Holdco or MDC Partners, to:

MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:  Rob Dickson

Fax:  (416) 960-9555

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

Fax:  (212) 937-4365

If to WWG, to:

c/o TEAM Enterprises, Inc.

110 E. Broward Blvd., Suite 2450

Fort Lauderdale, FL 33301

Attention: Daniel K. Gregory

Fax:

with a copy to:

Jeffrey M. Ostrow, Esq.

Kopelowitz Ostrow

220 SW 1st Avenue, Suite 1200

Fort Lauderdale, FL 33301

Email: ostrow@kolawyers.com

Fax: (954) 525-4300

If to the Company, to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

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Attention:  Rob Dickson

Fax:  (416) 960-9555

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

Fax:  (212) 937-4365

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

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

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

Section 14.4        Amendment or Modification.  The power to adopt, alter, amend or repeal this Agreement is vested solely in the Members. Except for the amendments contemplated by Sections 2.1, 2.2(d) and 10.4(g), and subject to the provisions of Section 4.1, this Agreement may be altered or amended only by the unanimous vote or unanimous written consent of MDC Holdco and WWG. The Managers may not adopt, alter, amend or repeal any provision of this Agreement.

Section 14.5        Binding Effect.  Subject to the restrictions on transfer and assignment set forth in Article X of this Agreement, this Agreement is binding on and inures to the benefit of the Members and their respective successors and permitted assigns, including without limitation, any Lender who exercises a default remedy under any agreement entered into in connection with an MDC Financing.

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

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

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

Section 14.9        Currency.  Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.  All payments made hereunder shall be made in United States Dollars.

*                      *                      *

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

MDC ACQUISITION INC.
By:	/s/
	Name: Michael Sabatino
	Title: President
WWG, LLC
By:	/s/
	Name:    Daniel K. Gregory
	Title:      Managing Member
WWG2, LLC
By:	/s/
	Name:    Daniel K. Gregory
	Title:      Managing Member
TEAM HOLDINGS LLC
By:	/s/
	Name: Daniel K. Gregory
	Title: Manager
MDC PARTNERS INC.
(solely with respect to Section 10.4(j))
By:	/s/
	Name: Mitchell Gendel
	Title: General Counsel and Corporate Secretary

 

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EX-10.3.1 6 v183284_ex10-3x1.htm

Exhibit 10.3.1

MEMBERSHIP UNIT PURCHASE AGREEMENT

by and among

MF + P ACQUISITION CO.,

INTEGRATED MEDIA SOLUTIONS, LLC

ROBERT INGRAM,

DESIREE DU MONT

and

RON CORVINO

Dated May 6, 2010 and effective as of April 30, 2010

MEMBERSHIP UNIT PURCHASE AGREEMENT

MEMBERSHIP UNIT PURCHASE AGREEMENT (this "Agreement") dated May 6, 2010 and effective as of the close of business on April 30, 2010 (the "Effective Date") , by and among MF + P ACQUISITION CO., a Delaware corporation (the "Purchaser"), INTEGRATED MEDIA SOLUTIONS, LLC, a New York limited liability company ("IMS Holdco"), ROBERT INGRAM ("Ingram"), DESIREE DU MONT ("Desiree"), RON CORVINO ("Ron"; and together with Ingram and Desiree, individually a "Principal" and collectively, the "Principals"), and solely for purposes of Sections 7.6.6 and 8.19, MDC Partners Inc., a corporation existing under the laws of Canada ("MDC Partners").

WITNESSETH:

WHEREAS, IMS Holdco formed Integrated Media Solutions Partners LLC, a Delaware limited liability company (the "Company"), with IMS Holdco as its initial member owning 100% of the issued and outstanding membership units in the Company (the "Membership Units");

WHEREAS, prior to the execution and delivery of this Agreement, IMS Holdco contributed substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business, to the Company pursuant to a General Assignment, Bill of Sale and Assumption Agreement attached hereto as Exhibit A (the "Conveyance Document");

WHEREAS, IMS Holdco desires to sell, and the Purchaser desires to purchase, 75% of the Membership Units to be designated as "Class A Units" (the "Purchased Units"), pursuant to the provisions of this Agreement such that after giving effect to such purchase, the Membership Units will be owned as follows: the Purchaser – 75%; IMS Holdco – 25%;

WHEREAS, simultaneously with the execution and delivery of this Agreement, the Purchaser, IMS Holdco and the Company are executing and delivering an Amended and Restated Limited Liability Company Agreement of the Company (the "Operating Agreement"), attached hereto as Exhibit B;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE I

SALE OF THE PURCHASED UNITS

Section 1.1       Sale of the Purchased Units.   Subject to the terms and conditions herein stated, IMS Holdco agrees to sell, assign, transfer and deliver to the Purchaser as of the Effective Date (as defined in Section 2.2), and the Purchaser agrees to purchase from IMS Holdco as of the Effective Date, the Purchased Units.

ARTICLE II

PURCHASE PRICE AND CLOSING

Section 2.1   Purchase Price; Working Capital Adjustment.

2.1.1    Purchase Price.  In full consideration for the purchase by the Purchaser of the Purchased Units, the purchase price (the "Purchase Price"), shall be calculated and paid by the Purchaser to IMS Holdco, as set forth below (capitalized terms used in this Article II and not otherwise defined, shall have the meaning ascribed to such terms in Sections 2.1.2  below):

(a)       Closing Payment.  At the Closing, the Purchaser shall pay to IMS Holdco an amount equal to $20,000,000 ("CP").

(b)       Working Capital Payment.  If the Effective Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.3, is less than the Target Working Capital (such difference being referred to herein as the "Working Capital Shortfall"), then within five business days after the Special Determination (as defined in Section 2.1.3(i) below) and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.3, (A) IMS Holdco shall pay to the Purchaser 75% of the Working Capital Shortfall and (B) immediately thereafter, IMS Holdco and the Purchaser shall contribute to the capital of the Company as a contribution to capital, 25% and 75%, respectively, of the Working Capital Shortfall.  If IMS Holdco fails to make all or any portion of the payment referred to in (A) above or the contribution referred to in (B) above, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset any remaining unpaid amount against any future Purchase Price payments to IMS Holdco, which in the case of (B) above shall then be contributed by the Purchaser to the capital of the Company in respect of IMS Holdco's obligation under (B) above.  If the Effective Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.3, is greater than Target Working Capital, within five days after the Special Determination and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.3, the Company shall make a distribution to IMS Holdco in the amount of the difference between Target Working Capital and the Effective Date Working Capital. Any amount paid pursuant to this Section 2.1.1(b) shall be referred to as the "Working Capital Payment."

(c)       Top-Up Payments. The Purchaser shall pay to IMS Holdco the following top-up payments (the "Top-Up Payments"):

(i)      On or prior to the first anniversary of the Closing, the Purchaser shall pay to IMS Holdco an amount equal to $3,333,333 (the "Initial Top-Up Amount"), plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment; provided, however, in the event that on or before December 31, 2010 changes in United States federal long-term capital gains tax rates are enacted, which will result in an increase in 2011 federal long-term capital gains rates over 2010 federal long-term capital gains rates (the difference between such rates being referred to herein as the "LTG Rate Increase"), then, at the election of IMS Holdco (which election must be made by IMS Holdco in writing and received by the Purchaser no later than December 20, 2010), such payment shall be made on or prior to December 31, 2010, provided that the Initial Top-Up Amount shall be reduced by an amount equal to the product of (x) the Initial Top-Up Amount times (y) ½ of the LTG Rate Increase.  By way of example, if 2011 federal long-term capital gains rates are increased from 15% to 25%, then the LTG Rate Increase shall be equal to 10%, and, if a payment prior to December 31, 2010 is elected by IMS Holdco, the Initial Top-Up Amount shall be reduced by 5%;

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(ii)     on or prior to the second anniversary of the Closing, an amount equal to $3,333,333, plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment; and

(iii)    on or prior to the third anniversary of the Closing, an amount equal to $3,333,334, plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment.

(d)       First Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2010 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the First Additional Payment ("FAP"), calculated as follows:

FAP = Applicable Percentage x 22.5% x 2010 Adjusted GAAP PBT

; provided, however, in the event that 2010 Adjusted GAAP PBT were less than $5,333,333, then FAP shall equal (A) the excess, if any, of (i) 2010 Adjusted GAAP PBT over (ii) $4,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage.

(e)       Second Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2011 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Second Additional Payment ("SAP"), calculated as follows:

SAP = Applicable Percentage x 22.5% x 2011 Adjusted GAAP PBT

; provided, however, in the event that 2011 Adjusted GAAP PBT were less than $8,000,000, then SAP shall equal (A) the excess, if any, of (i) 2011 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that 2010 Adjusted GAAP PBT were less than $4,000,000 then for purposes of the calculations of SAP above, 2011 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

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(f)        Third Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2012 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Third Additional Payment ("TAP"), calculated as follows:

TAP = Applicable Percentage x 22.5% x 2012 Adjusted GAAP PBT

; provided, however, in the event that 2012 Adjusted GAAP PBT were less than $8,000,000, then TAP shall equal (A) the excess, if any, of (i) 2012 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT and 2011 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP and (B) SAP divided by the Applicable Percentage applicable to SAP divided by (ii) 90% minus (z) the 2010 Growth Payment (as defined in Section 2.1.1(i)(ii) herein), were less than $10,000,000, then for purposes of the calculations of TAP above, 2012 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(g)       Fourth Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2013 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Fourth Additional Payment ("FOAP"), calculated as follows:

FOAP = Applicable Percentage x 22.5% x 2013 Adjusted GAAP PBT

; provided, however, in the event that 2013 Adjusted GAAP PBT were less than $8,000,000, then FOAP shall equal (A) the excess, if any, of (i) 2013 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT, 2011 Adjusted GAAP PBT and 2012 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP, (B) SAP divided by the Applicable Percentage applicable to SAP and (C) TAP divided by the Applicable Percentage applicable to TAP divided by (ii) 90% minus (z) the 2010 Growth Payment, were less than $16,000,000, then for purposes of the calculations of FOAP above, 2013 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(h)       Final Additional Payment.  Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2014 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Final Additional Payment ("FIAP"), calculated as follows:

FIAP = Applicable Percentage x 22.5% x 2014 Adjusted GAAP PBT

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; provided, however, in the event that 2014 Adjusted GAAP PBT were less than $8,000,000, then FIAP shall equal (A) the excess, if any, of (i) 2014 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT, 2011 Adjusted GAAP PBT, 2012 Adjusted GAAP PBT and 2013 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP, (B) SAP divided by the Applicable Percentage applicable to SAP, (C) TAP divided by the Applicable Percentage applicable to TAP and (D) FOAP divided by the Applicable Percentage applicable to FOAP divided by (ii) 90% minus (z) the 2010 Growth Payment, were less than $22,000,000, then for purposes of the calculations of FIAP above, 2014 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(i)        Extra Payment; 2010 Growth Payment.

(i)       (A) The Purchaser shall pay to IMS Holdco an amount equal to $666,666 in respect of the calendar year associated with FAP, such payment to be made in 3 equal installments of $222,222 on the last day of each calendar quarter of the calendar year associated with FAP, commencing with the last day of the second calendar quarter of such calendar year and (B) the Purchaser shall pay to IMS Holdco an amount equal to $1,000,000 in respect of the calendar years associated with SAP or TAP, as the case may be, such payments to be made in 4 equal installments of $250,000 on the last day of each calendar quarter of the calendar years associated with SAP or TAP, as the case may be (each payment under (A) and (B), an "Extra Payment", and collectively, the "Extra Payments"); provided, however, IMS Holdco shall not be entitled to receive the applicable Extra Payment in the event that Adjusted GAAP PBT for the applicable calendar quarter is less than $250,000.

(ii)      Simultaneously with the payment of FAP, on the date FAP is paid to IMS Holdco, the Purchaser shall pay to IMS Holdco an amount equal to: (x) 50% times (y) the excess, if any, of (A) 2010 Adjusted GAAP PBT over (B) $5,906,849 (the "2010 Growth Payment").

(j)        Limitations.  As of any date during the period commencing on the Effective Date and ending on December 31, 2014, in the event the amount equal to (A) aggregate Adjusted GAAP PBT through such date less (B) the sum of the fractions, the numerators of which are each Additional Payment paid or payable through such date, and the denominators of which are the Applicable Percentage applicable to such Additional Payment divided by 90%, less (C) the 2010 Growth Payment, less (D) the aggregate amount of Extra Payments, results in an amount equal to or in excess of $30,000,000, then thereafter each of the provisos set forth in Sections 2.1.1(d) through (h) shall no longer be applicable.

(k)       No Negative Payments. Notwithstanding the potential reduction of Adjusted GAAP PBT as set forth in Sections 2.1.1(e) through (h) above, in the event that the calculation of FAP, SAP, TAP, FOAP or FIAP, as the case may be, results in an amount which is less than zero, such Purchase Price component shall be deemed to be zero.

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(l)        Payment of the Purchase Price.Payment of each component of the Purchase Price and any payment that is required to be made under this Section 2.1 shall be made in United States dollars by the Purchaser by direct wire transfer to the account of IMS Holdco, as set forth on Schedule 2.1.1 (or to such other account as IMS Holdco may notify the Purchaser in writing).  Each of FAP, SAP, TAP, FOAP or FIAP, the Extra Payments and the 2010 Growth Payment, as the case may be, shall be deemed to include imputed interest, to the extent required by the Internal Revenue Code of 1986, as amended (the "Code").

(m)      Termination of Additional Payments.  Upon the exercise of a Call under Section 10.2(a) of the Operating Agreement, the delivery of a Sale Request Acceptance Notice or the consummation of a sale to a Prospective Purchaser (as such terms are defined in the Operating Agreement), as the case may be, pursuant to Section 10.2 of the Operating Agreement (each a "Sale Event"), IMS Holdco's right to receive any Additional Payments based upon Adjusted GAAP PBT for, or otherwise in respect of, the calendar year in which the applicable Sale Event occurred or for any calendar year(s) thereafter, shall cease, and the obligation of the Purchaser to pay to IMS Holdco any such Additional Payments shall terminate, contemporaneously with the applicable Sale Event.

2.1.2        Definitions.

(i)            "Additional Payments" shall mean the aggregate amount of the payments made in Sections 2.1.1(d) through (h).

(ii)           "Adjusted GAAP PBT" with respect to any year, shall mean Adjusted GAAP PBT (as defined and calculated pursuant to the Operating Agreement) for such year; provided, however, solely with respect to calendar year 2010, 2010 Adjusted GAAP PBT shall be calculated for the period commencing on May 1, 2010 and ending on December 31, 2010.

(iii)          "Applicable Percentage" shall mean, with respect to any Additional Payment, a percentage equal to the result of (A)(x) the average number of Class B Units of the Company owned by IMS Holdco during the calendar year for which Adjusted GAAP PBT is used to calculate such Additional Payment (such average being determined as the quotient of (1) the sum of the products of the varying numbers of Class B Units so owned by IMS Holdco by the number of days in such year each such number was owned by IMS Holdco, and (2) 365 or 366 days, as applicable for such year), divided by (y) the average total number of outstanding Class A Units and Class B Units for such year (calculated on the same basis as provided in the parenthetical under (A)(x) above), divided by (B) 25%.

(iv)          "Effective Date Working Capital" means the current assets of the Company and its subsidiaries, if any, less the current liabilities of the Company and the subsidiaries, if any, as of the close of business as of the Effective Date in accordance with GAAP; provided, however, an amount equal to $366,273 identified on Schedule 3.23(iv) shall not be treated as a current liability solely for purposes of determining the Effective Date Working Capital.

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(v)           "GAAP" shall mean United States generally accepted accounting principles consistently applied.

(vi)          "Target Working Capital" means an amount equal to $1.00.

2.1.3        Accounting Procedures.

(i)            The Purchaser shall, or shall cause BDO Seidman LLP, or another independent accounting firm chosen by the Purchaser (the "Accountants"), at the Purchaser's expense, as soon as practicable after the Closing, to prepare in accordance with GAAP and deliver to the Representative, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business as of the Effective Date immediately after the consummation of the transactions effected by the Conveyance Document (the "Closing Balance Sheet"), together with a statement of the Accountants based upon such report which sets forth the Effective Date Working Capital (the "Special Determination").  The Purchaser shall have the option, in its sole discretion (and at its sole expense) to instruct the Accountants to audit or perform agreed upon procedures on the Closing Balance Sheet and to determine the scope of such audit or procedures.  If the Representative does not agree that the Special Determination correctly states the Effective Date Working Capital, the Representative shall promptly (but not later than 30 days after the delivery to him of the Special Determination) give written notice to the Purchaser of any exceptions thereto (in reasonable detail describing the nature of the disagreement asserted).  If the Representative and the Purchaser reconcile their differences, the Effective Date Working Capital calculation shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  If the dispute relates to an accounting issue and if the Representative and the Purchaser are unable to reconcile their differences in writing within 20 days after written notice of exceptions is delivered to the Purchaser (the "Reconciliation Period"), the accounting items in dispute shall be submitted to a mutually acceptable accounting firm (other than the Accountants) (the "Independent Auditors") for final determination.  The Effective Date Working Capital calculation shall be deemed adjusted in accordance with the determination of the Independent Auditors and shall become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  The Independent Auditors shall consider only the accounting items in dispute and shall be instructed to act within 20 days (or such longer period as the Representative and the Purchaser may agree) to resolve all accounting items in dispute.  If the dispute involves a non-accounting issue and such dispute cannot be reconciled within the Reconciliation Period, the dispute shall be settled by a court of competent jurisdiction.  If the Representative does not give written notice of any exception within 30 days after the delivery to him of the Special Determination or if the Representative gives written notification of his acceptance of the Effective Date Working Capital prior to the end of such 30 day period, the Effective Date Working Capital set forth in the Special Determination shall thereupon become binding, final and conclusive upon all the parties hereto and enforceable in a court of law.

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(ii)           In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 2.1.3, then the Purchaser and the Representative agree to select another accounting firm (other than the Accountants) to perform the services to be performed under this Section 2.1.3 by the Independent Auditors.  If the Purchaser and the Representative fail to select the Independent Auditors as required by Section 2.1.3(i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either the Purchaser or the Representative may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York to appoint an independent firm of certified public accountants to perform the services required under this Section 2.1.3 by the Independent Auditors.  The fees of JAMS shall be shared equally by the Purchaser and IMS Holdco.  For purposes of this Section 2.1.3 the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this Section 2.1.3(ii).

(iii)          The Independent Auditors shall determine the party (i.e., the Purchaser or the Representative) whose asserted position as to the calculation of the Effective Date Working Capital is furthest from the determination of the Effective Date Working Capital by the Independent Auditors, which non-prevailing party shall pay the fees and expenses of the Independent Auditors and shall reimburse the prevailing party for the portion of the fees of JAMS previously paid by it.

2.1.4        Examination of Books and Records.  The books and records of IMS Holdco (with respect to periods prior to the Closing Date) and the Company and its subsidiaries (if any) shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 2.1.  The Principals, on the one hand, and the Purchaser, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by them in making any determinations hereunder or to support a position that is contrary to the position taken by the other party.

Section 2.2       Closing.   The closing of the transactions contemplated by this Agreement (the "Closing") shall take place simultaneously with the execution and delivery of this Agreement effective as of the Effective Date, at the offices of Davis & Gilbert LLP, 1740 Broadway, New York, New York 10019 or by the exchange of documents and instruments by mail, courier, telecopy and wire transfer to the extent mutually acceptable to the parties hereto (the date of closing is referred to as the "Closing Date").  The transactions contemplated by this Agreement shall be effective as of the Effective Date and the Assets (as defined in the Conveyance Document) transferred to the Company shall be those owned by the Company as of the Effective Date, subject to transactions in the ordinary course of business between the Effective Date and the Closing Date.  After the Effective Date and through the Closing Date, the operations of IMS Holdco will be for the account of the Company, and any gain or loss during such period shall inure to the Company’s detriment or benefit.

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Section 2.3       Third Party Consents.  Anything in this Agreement to the contrary notwithstanding, in the event an assignment or purported assignment to the Company of any of the agreements, contracts or commitments of IMS Holdco pursuant to the Conveyance Document or any claim, right or benefit arising thereunder or resulting therefrom, without the consent of other parties thereto, would constitute a breach thereof or would not result in the Company receiving all of the rights of IMS Holdco thereunder, such agreement, contract or commitment shall be deemed not to have been assigned to the Company.  In those circumstances, if reasonably requested by the Purchaser, after the Closing, IMS Holdco and the Principals will use their best efforts to obtain any such consent (excluding the payment of any fees).  If such consent is not obtained and is required to effectively assign any agreement, contract or commitment to the Company, the Principals and IMS Holdco will reasonably cooperate with the Company to provide the Company with the full claims, rights and benefits thereunder, including enforcement at the cost and for the benefit of the Company of any and all rights of IMS Holdco, against a third party thereto arising out of the breach or cancellation by such third party or otherwise, and any amount received by IMS Holdco in respect thereof shall be held for and paid over to the Company.

Section 2.4        Further Assurance; Post Closing Cooperation. IMS Holdco will, from time to time, at the request of the Purchaser, whether at or after the Closing Date, execute and deliver such other and further instruments of conveyance, assignment, transfer and consent necessary for the conveyance, assignment and transfer of the Assets (as defined in the Conveyance Document) pursuant to the Conveyance Document.  Following the Closing, upon reasonable advance notice, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data relating to IMS Holdco or the Company and its subsidiaries, if any, in its possession with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of tax returns, (ii) the determination or enforcement of rights and obligations under this Agreement, (iii) compliance with the requirements of any Governmental or Regulatory Authority (as defined in Section 3.1.2), (iv) the determination or enforcement of the rights and obligations of any party entitled to indemnification under Article VII, (v) any actual or threatened action or proceeding, and (vi) the verification of the Assets and Assumed Liabilities (as defined in the Conveyance Document).

ARTICLE III

REPRESENTATIONS OF IMS HOLDCO AND THE PRINCIPALS

A.  Each of the Principals severally represents and warrants to and with the Purchaser, as follows:

Section 3.1       Execution and Validity of Agreements; Restrictive Documents.

3.1.1        Execution and Validity.  The Principal has the full legal right and capacity to enter into this Agreement and to perform his or her respective obligations hereunder.  This Agreement has been duly and validly executed and delivered by such Principal and, assuming due authorization, execution and delivery by the Purchaser, IMS Holdco and each other Principal a party hereto, constitutes a legal, valid and binding obligation of such Principal, enforceable against such Principal in accordance with its terms.

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3.1.2        No Restrictions.  There is no suit, action, claim, investigation or inquiry by any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision ("Governmental or Regulatory Authority"), and no legal, administrative or arbitration proceeding is pending or, to such Principal's knowledge, threatened against the Principal with respect to the execution, delivery and performance of this Agreement or the transactions contemplated hereby or any other agreement entered into by such Principal in connection with the transactions contemplated hereby.

3.1.3        Non-Contravention.  The execution, delivery and performance by the Principal of his or her obligations hereunder and the consummation of the transactions contemplated hereby, will not as of the Closing Date (a) result in the violation by such Principal of any statute, law, rule, regulation or ordinance (collectively, "Laws"), or any judgment, decree, order, writ, permit or license (collectively, "Orders"), of any Governmental or Regulatory Authority, applicable to such Principal, or (b) conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require such Principal to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of the assets or properties of such Principal, under any of the terms, conditions or provisions of any agreement, commitment, lease, license, evidence of indebtedness, letter of credit, mortgage, indenture, security agreement, instrument, note, bond, franchise, permit, concession, or other instrument, obligation or agreement of any kind, written or oral (collectively, "Contracts"), to which such Principal is a party or by which such Principal or any of his or her assets or properties are bound.

3.1.4        Approvals and Consents.  No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Principal is a party for the execution and delivery of this Agreement by such Principal, the performance by such Principal of his or her obligations hereunder or the consummation of the transactions contemplated hereby.

B.  IMS Holdco and the Principals, jointly and severally, represent and warrant to and with the Purchaser, as follows:

Section 3.2       Existence and Good Standing.  IMS Holdco has the full limited liability company power and authority to enter into this Agreement and the Conveyance Document and to perform its obligations hereunder and thereunder.  The Company has the full limited liability company power and authority to enter into the Conveyance Document and to perform its obligations thereunder. The execution and delivery of this Agreement and the Conveyance Document by IMS Holdco and the Conveyance Document by the Company, and the consummation by such parties of the transactions contemplated hereby and thereby have been duly authorized by all required company action on behalf of such parties.  This Agreement and the Conveyance Document have been duly and validly executed and delivered by IMS Holdco and constitute a legal, valid and binding obligation of IMS Holdco, enforceable against it in accordance with their terms.  The Conveyance Document has been duly and validly executed and delivered by the Company, and constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms.  The Company and IMS Holdco are each duly organized and are each validly existing and in good standing (including tax status) under the laws of the State of Delaware and the State of New York, respectively, with the full power and authority to own their respective properties and to carry on their respective businesses (the business operated by the Company hereinafter referred to as the "Business") all as and in the places where such properties are now owned or operated or such businesses are now being conducted except where such failure to qualify would not have a material adverse effect on the respective businesses.  The Company and IMS Holdco are each duly qualified, licensed or admitted to do business and each of them is in good company and tax standing in the jurisdictions set forth on Schedule 3.2, which are the only jurisdictions in which the ownership, use or leasing of their respective assets and properties, or the conduct or nature of their respective businesses, makes such qualification, licensing or admission necessary.

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Section 3.3       Membership Interests; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments.  The Principals own of record and beneficially have valid title to 100% of the membership interests of IMS Holdco.  IMS Holdco owns of record and beneficially has valid title to 100% of the Membership Units of the Company, including the Purchased Units, and such ownership is free and clear or all Liens.  Except as set forth on Schedule 3.3, there are no outstanding subscriptions, options, warrants, rights (including "phantom stock rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind providing for the purchase, issuance or sale of any equity or ownership or proprietary interest of the Company, or which grants any Person other than IMS Holdco the right to share in the earnings of the Company.  Except as set forth on Schedule 3.3, the Company does not, directly or indirectly, own any equity interest in or have any voting rights with respect to any Person.  There are no outstanding subscriptions, options, rights, warrants, calls, commitments or arrangements of any kind to acquire any of the Purchased Units and there are no agreements or understandings with respect to the sale or transfer of any of the Purchased Units other than this Agreement. There is no suit, action, claim, investigation or inquiry by any Governmental or Regulatory Authority, and no legal, administrative or arbitration proceeding pending or, to the knowledge of the Principals, threatened, against any Principal or the Company or any of the Purchased Units, with respect to the execution, delivery and performance of this Agreement or the Conveyance Document or the transactions contemplated hereby or thereby or any other agreement entered into by the Principals or IMS Holdco in connection with the transactions contemplated hereby or thereby.

Section 3.4       Financial Statements and No Material Changes.  Schedule 3.4(A) sets forth (a) the unaudited balance sheets of IMS Holdco as at December 31, 2008 and December 31, 2009 and the related unaudited statements of operations for the fiscal years then ended, and (b) the unaudited balance sheets of IMS Holdco as at March 31, 2010 (the "Balance Sheet") and the related unaudited statements of operations for the three months then ended.  Such financial statements have been prepared in accordance with GAAP throughout the periods indicated except as set forth on Schedule 3.4(B).  Each balance sheet fairly presents the financial condition of the entity or entities included within such balance sheet, at the respective date thereof, and reflects all claims against and all debts and liabilities of such entities, fixed or contingent, as at the respective date thereof, required to be shown thereon under GAAP and the related statements of operations fairly present the results of operations for the respective period indicated.  Except for the transactions consummated pursuant to the Conveyance Document, since March 31, 2010 (the "Balance Sheet Date"), there has been no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects of IMS Holdco or the Company.

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Section 3.5       Books and Records.  IMS Holdco did not have and the Company does not have any of its records, systems, controls, data or information recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) were not prior to the Effective Date under the exclusive ownership and possession of IMS Holdco and which are not now under the exclusive ownership and possession of the Company.  IMS Holdco or the Principals have delivered to the Purchaser complete and correct copies of the Certificate of Formation and the limited liability company agreement of the Company in effect immediately prior to the execution of this Agreement.

Section 3.6       Title to Properties; Encumbrances; No Prior Activities.

3.6.1        Title to Properties; Encumbrances.  Except for the Excluded Assets listed in the Conveyance Document, IMS Holdco had and the Company now has good and valid title to, or enforceable leasehold interests in or valid rights under contract to use, all the properties and assets owned or used by IMS Holdco (real, personal, tangible and intangible), including, without limitation (a) all the properties and assets reflected in the Balance Sheet, (b) all the properties and assets purchased or otherwise contracted for by IMS Holdco since the Balance Sheet Date (except for properties and assets reflected in the Balance Sheet or acquired or otherwise contracted for since the Balance Sheet Date that have been sold or otherwise disposed of in the ordinary course of business) and (c) all monies received from clients of the Company (including, without limitation, all monies received in connection with the Company's media purchase obligations on behalf of its clients), in each case free and clear of all Liens, except for Liens set forth on Schedule 3.6.  The property, plant and equipment conveyed by IMS Holdco to the Company, whether owned or otherwise contracted for, is in a state of good maintenance and repair (ordinary wear and tear excepted) and is adequate and suitable for the purposes for which they are presently being used, including the Business.

3.6.2        No Prior Activities.  The Company was created solely for the purpose of engaging in the transactions contemplated by the Conveyance Document and this Agreement.  The Company has not engaged in any activities other than in connection with its formation, the negotiation, execution and delivery of this Agreement, the Conveyance Document and the Operating Agreement, and the consummation of the transactions contemplated hereby and thereby.  Except for liabilities incurred in connection with its formation and the consummation of the transactions contemplated by this Agreement, the Conveyance Document and the Operating Agreement, the Company has not incurred any liabilities or entered into any agreements or arrangements with any Person.  As of the Closing Date, (x) neither Media Time Sales LLC nor Performance Fuel Network LLC (collectively, the "Retained Subsidiaries") are engaged in any operational or business activities and (y) the Retained Subsidiaries do not have any liabilities whatsoever or any obligations with respect to any agreements or arrangements with any Person.

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Section 3.7       Real Property.

3.7.1        Owned Real Property.The Company does not own any real property (including ground leases) or hold a freehold interest in any real property or any option or right of first refusal or first offer to acquire any real property.

3.7.2        Leased Real Property.  Schedule 3.7.2 contains an accurate and complete list of all real property leases, subleases, real property licenses and other occupancy agreements, including without limitation, any modification, amendment or supplement thereto and any other related document or agreement executed or entered into by the Company, or by IMS Holdco and assigned to the Company pursuant to the Conveyance Document, to which the Company is a party (as lessee, sublessee, lessor, sublessor, licensor or licensee) (each individually, a "Real Property Lease" and collectively, the "Real Property Leases").  Each Real Property Lease set forth on Schedule 3.7.2 (or required to be set forth on Schedule 3.7.2) is valid, binding and in full force and effect; all rents and additional rents and other sums, expenses and charges due thereunder to date on each such Real Property Lease have been paid; and the lessee has been in peaceable possession since the commencement of the original term of such Real Property Lease and no waiver, indulgence or postponement of the lessee's obligations thereunder has been granted by the lessor.  There exists no default or event of default by IMS Holdco or the Company or to the knowledge of the Principals by any other party to any Real Property Lease; and there exists no occurrence, condition or act (including the purchase of the Purchased Units hereunder) which, with the giving of notice, the lapse of time or the happening of any further event or condition, would become a default or event of default by IMS Holdco or the Company under any Real Property Lease, and there are no outstanding claims of breach or indemnification or notice of default or termination of any Real Property Lease.  IMS Holdco held and the Company now holds the leasehold estate on all the Real Property Leases free and clear of all Liens except as set forth on Schedule 3.7.2.  The real property leased by IMS Holdco and/or the Company is in a state of good maintenance and repair (ordinary wear and tear excepted), adequate and suitable for the purposes for which it is presently being used, and there are no material repair or restoration works likely to be required in connection with any of the leased real properties.  IMS Holdco was, and the Company now is, in physical possession and actual and exclusive occupation of the whole of each of its leased properties.  No environmental claim has been made against IMS Holdco or the Company with respect to any Real Property Lease.  Neither IMS Holdco nor the Company owes any brokerage commission with respect to any of the Real Property Leases.

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Section 3.8       Contracts.  Schedule 3.8 hereto contains an accurate and complete list of the following Contracts (whether written or oral, but indicating which Contracts are oral) to which the Company is currently a party or IMS Holdco was a party immediately prior to the assignment of the same to the Company pursuant to the Conveyance Document (and Schedule 3.8 indicates if a listed item has not been assigned to and assumed by the Company pursuant to the Conveyance Document): (a) all Plans (as such term is defined in Section 3.19), (b) any personal property lease with a fixed annual rental of $10,000 or more, (c) any Contract relating to capital expenditures which involves payments of $25,000 or more in any single transaction or series of related transactions, (d) any Contract relating to the making of a loan or advance to or investment in, any other Person, (e) any agreement, instrument or arrangement evidencing or relating in any way to indebtedness for money borrowed or to be borrowed, whether directly or indirectly, by way of loan, purchase money obligation, guarantee (other than the endorsement of negotiable instruments for collection in the ordinary course of business), conditional sale, purchase or otherwise, (f) any management service, employment, consulting or similar type of Contract which is not cancelable by the Company or IMS Holdco without penalty or other financial obligation within 30 days, (g) any Contract limiting the Company's freedom to engage in any line of business or to compete with any other Person, including, without limitation, any agreement limiting the ability of the Company or IMS Holdco or any of their respective affiliates to take on competitive accounts during or after the term thereof, (h) any collective bargaining or union agreement, (i) any Contract between the Company, on the one hand, and any officer or director thereof, on the other hand, not covered by subsection (f) above (including indemnification agreements), (j) any secrecy or confidentiality agreement (other than standard confidentiality agreements in computer software license agreements or agreements with clients entered into in the ordinary course of business), (k) any agreement with respect to any Intellectual Property (as defined in Section 3.14) other than "shrink-wrap" and similar end-user licenses, (l) any agreement with a client required to be listed on Schedule 3.16, (m) any agreement, indenture or other instrument which restricts the ability of the Company or any of its subsidiaries to make distributions in respect of its equity, (n) any joint venture agreement involving a sharing of profits not covered by clauses (a) through (m) above, (o) any Contract (not covered by another subsection of this Section 3.8) which involves $25,000 or more over the unexpired term thereof and is not cancelable by the Company, without penalty or other financial obligation within 30 days; provided, however, Contracts of a similar nature which individually do not involve $25,000 but in the aggregate involve $25,000 or more over the unexpired terms shall also be set forth on Schedule 3.8, (p) any Contract with a media buying service; provided, however, commitments to purchase media in the ordinary course of business do not have to be set forth on Schedule 3.8, and (q) any agreement (not covered by another subsection of this Section 3.8) between the Company, on the one hand, and any member of the Company, on the other hand. Notwithstanding anything to the contrary contained above, (x) commitments to media and production expenses which are fully reimbursable from clients, and (y) estimates or purchase orders given in the ordinary course of business relating to the execution of projects, do not have to be set forth on Schedule 3.8. Each Contract which has been assigned to and assumed by the Company pursuant to the Conveyance Document, including without limitation, those required to be set forth on Schedule 3.8, is in full force and effect, and there exists no default or event of default by the Company or IMS Holdco or, to the knowledge of the Principals, by any other party, or occurrence, condition, or act (including the purchase of the Purchased Units hereunder) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default thereunder by the Company, and there are no outstanding claims of breach or indemnification or notice of default or termination of any such Contract.  Summaries of all oral Contracts contained on Schedule 3.8 are complete and accurate in all material respects.

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Section 3.9       Non-Contravention; Approvals and Consents.   The execution, delivery and performance by the Principals, the Company and IMS Holdco of their respective obligations under this Agreement and the Conveyance Document and the consummation of the transactions contemplated hereby and thereby, will not (a) violate, conflict with or result in the breach of any provision of the certificate of formation and limited liability company agreement (or other comparable documents) of the Company or IMS Holdco; (b) result in the violation by the Company or IMS Holdco of any Laws or Orders of any Governmental or Regulatory Authority, or (c) if the consents and notices set forth in Schedule 3.9 are obtained, conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Company or IMS Holdco to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of their respective assets or properties, or under any of the terms, conditions or provisions of any Contract to which the Company or IMS Holdco is a party or by which the Company or IMS Holdco or any of their respective assets or properties are or were bound.  Except as set forth in Schedule 3.9, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Company or IMS Holdco is a party, or by which their respective assets or properties were or are bound, for the execution and delivery of this Agreement or the Conveyance Document, the performance by the Company or IMS Holdco of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby.

Section 3.10     Litigation.  Except as set forth on Schedule 3.10, there is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Principals, any investigation by) any Governmental or Regulatory Authority, pending or, to the knowledge of the Principals, threatened, against the Company or IMS Holdco with respect to this Agreement or the transactions contemplated hereby or by the Conveyance Document, or any other agreement entered into by the Company or IMS Holdco in connection with the transactions contemplated hereby, or against or affecting the Business or the assets transferred to the Company pursuant to the Conveyance Document; and no acts, facts, circumstances, events or conditions occurred or exist which are a basis for any such action, proceeding or investigation.  Neither the Company nor IMS Holdco is subject to any Order entered in any lawsuit or proceeding. Schedule 3.10 also sets forth with respect to each pending or, to the knowledge of the Principals, threatened action, suit or proceeding listed thereon, the amount of costs, expenses or damages the Company or IMS Holdco has incurred to date and reasonably expects to incur through the conclusion thereof.

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Section 3.11    Taxes.   Each of IMS Holdco and the Company have timely completed and filed, or caused to be filed, taking into account any valid extensions of due dates, completely and accurately, all federal, state, local and foreign (if any) tax or information returns (including estimated tax returns) required under the statutes, rules or regulations of such jurisdictions to be filed by each of them.  The term "Taxes" means taxes, duties, charges or levies of any nature imposed by any taxing or other Governmental or Regulatory Authority, including without limitation income, gains, capital gains, surtax, capital, franchise, capital stock, value-added taxes, taxes required to be deducted from payments made by the payor and accounted for to any tax authority, employees' income withholding, back-up withholding, withholding on payments to foreign Persons, social security, national insurance, unemployment, worker's compensation, payroll, disability, real property, personal property, sales, use, goods and services or other commodity taxes, business, occupancy, excise, customs and import duties, transfer, stamp, and other taxes (including interest, penalties or additions to tax in respect of the foregoing), and includes all taxes payable by IMS Holdco or the Company pursuant to Treasury Regulations §1.1502-6 or any similar provision of state, local or foreign law.  All Taxes shown on said returns to be due and all other Taxes due and owing (whether or not shown on any Tax return) have been paid and all additional assessments received prior to the Closing Date have been paid or are being contested in good faith, in which case, such contested assessments are set forth on Schedule 3.11.  Each of IMS Holdco and the Company has collected all sales, use, goods and services or other commodity Taxes required to be collected and remitted or will remit the same to the appropriate taxing authority within the prescribed time periods.  Each of IMS Holdco and the Company have withheld all amounts required to be withheld on account of Taxes from amounts paid to employees, former employees, directors, officers, members, residents and non-residents and remitted or will remit the same to the appropriate taxing authorities within the prescribed time periods.  The amount set up as an accrual for Taxes (aside from any reserved for deferred Taxes established to reflect timing differences between book and Tax accrual) on the Balance Sheet (as opposed to the notes thereto) is sufficient for the payment of all unpaid Taxes of IMS Holdco, whether or not disputed, for all periods ended on and prior to the date thereof.  Since the Balance Sheet Date, IMS Holdco has not incurred any liabilities for Taxes other than in the ordinary course of the business of IMS Holdco consistent with past custom and practice. To the knowledge of the Principals, no member, manager, director or officer (or employee responsible for Tax matters) of IMS Holdco or the Company has any reason to believe that any authorities may assess any additional Taxes for any period for which Tax returns have been filed.  The Principals have delivered to the Purchaser correct and complete copies of all federal, state and local income tax returns filed with respect to IMS Holdco and the Company that were requested by the Purchaser.  Except as set forth on Schedule 3.11, none of the federal, state or local income tax returns of either IMS Holdco or the Company have ever been audited by the Internal Revenue Service or any other Governmental or Regulatory Authority.  No examination of any return of IMS Holdco or the Company is currently in progress, and neither IMS Holdco nor the Company has received notice of any proposed audit or examination.  No deficiency in the payment of Taxes by IMS Holdco or the Company for any period has been asserted in writing by any taxing authority and remains unsettled at the date of this Agreement.  Neither IMS Holdco nor the Company has made any agreement, waiver or other arrangement providing for an extension of time with respect to the assessment or collection of any Taxes against it.  Neither IMS Holdco nor the Company has been a member of an affiliated group filing consolidated federal income tax returns nor has it been included in any combined, consolidated or unitary state or local income tax return.  Neither IMS Holdco nor the Company will be required as a result of a change in accounting method for any period ending on or before the Closing Date to include any adjustment under Section 481 of the Code (or any similar provision of state, local or foreign income tax law) in income for any period ending after the Closing Date, or as a result of a change for any period that may be required by law in connection with this transaction.  Neither IMS Holdco nor the Company is obligated to make any payments or is a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Section 280G of the Code.  Neither IMS Holdco nor the Company is or has been a U.S. real property holding corporation within the meaning or Section 897 of the Code and none of the Principals or IMS Holdco are nonresident alien individuals within the meaning of Section 871(b)(1) of the Code.  Neither IMS Holdco nor the Company has entered into any Tax sharing or indemnification agreement with any party.  The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); (ii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iii) prepaid amount received on or prior to the Closing Date.  Since its inception, IMS Holdco has been treated as a partnership for federal, state, local and foreign income tax purposes and will continue to be treated as a partnership through the Closing Date. Since its formation, the Company has been treated as disregarded entity within the meaning of Treasury Regulation Section 301.7701-3 for federal, state and local income tax purposes.

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Section 3.12     Liabilities.  Except for the Assumed Liabilities (as defined in the Conveyance Document) set forth in the Conveyance Document, or as set forth on Schedule 3.12, neither the Company nor IMS Holdco has any outstanding claims, liabilities or indebtedness of any nature whatsoever as to which the Company is or may become responsible (collectively in this Section 3.12, "Liabilities"), whether accrued, absolute or contingent, determined or undetermined, asserted or unasserted, and whether due or to become due, other than (i) Liabilities specifically disclosed in any Schedule hereto; (ii) Liabilities under Contracts of the type required to be disclosed by IMS Holdco, the Company and the Principals on any Schedule and so disclosed or which because of the dollar amount or other qualifications are not required to be listed on such Schedule; and (iii) Liabilities incurred since the Balance Sheet Date in the ordinary course of business and consistent with past practice of IMS Holdco or the Company, as the case may be.

Section 3.13     Insurance.  Schedule 3.13 contains a true and complete list (including the names and addresses of the insurers, the names of the Persons to whom such insurance policies have been issued, the expiration dates thereof, the annual premiums and payment terms thereof, whether it is a "claims made" or an "occurrence" policy and a brief description of the interests insured thereby) of all liability, property, workers' compensation and other insurance policies currently in effect that insure the property, assets, Business and employees of the Company, including but not limited to the property, assets, business and employees of IMS Holdco that were transferred to the Company pursuant to the Conveyance Document (other than self-obtained insurance policies by such employees). Each such insurance policy is valid and binding and in full force and effect, all premiums due thereunder have been paid and neither IMS Holdco nor the Company has received any notice of cancellation or termination in respect of any such policy or default thereunder.  To the knowledge of the Principals, such insurance policies are placed with financially sound and reputable insurers, and are in amounts and have coverage that are reasonable and customary for Persons engaged in the operation of the Business.  Neither IMS Holdco nor the Company, or to the knowledge of the Principals, the Person to whom such policy has been issued has received notice that any insurer under any policy referred to in this Section 3.13 is denying liability with respect to a claim thereunder or defending under a reservation of rights clause.  Within the last two years neither IMS Holdco nor the Company has filed for any claims exceeding $25,000 against any of its insurance policies, exclusive of automobile and health insurance policies. None of such policies shall lapse or terminate by reason of the transactions contemplated by this Agreement or the Conveyance Document and all such policies shall continue in effect after the Closing Date for the benefit of the Company.  Neither IMS Holdco nor the Company has received any notice of cancellation of any such policy.  Neither IMS Holdco nor the Company has received written notice from any of its insurance carriers that any premiums will be materially increased in the future or that any insurance coverage listed on Schedule 3.13 will not be available in the future on substantially the same terms now in effect. Neither IMS Holdco nor the Company has been refused any insurance or required to pay higher than normal or customary premiums, nor has its coverage been limited by any insurance carrier to which it has applied for insurance during the last three years.

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Section 3.14     Intellectual Properties.

3.14.1      Definitions.  For purposes of this Agreement, the following terms have the following definitions:

"Intellectual Property" shall include, without limitation, any or all of the following and all rights associated therewith: (a) all domestic and foreign patents, and applications therefor, and all reissues, reexaminations, divisions, renewals, extensions, continuations and continuations-in-part thereof; (b) all inventions (whether patentable or not), invention disclosures, improvements; (c) trade secrets, confidential and proprietary information, know how, technology, technical data and customer lists, financial and marketing data, pricing and cost information, business and marketing plans, databases and compilations of data, rights of privacy and publicity, and all documentation relating to any of the foregoing; (d) all copyrights, copyright registrations and applications therefor, unregistered copyrights, the content of all World Wide Web sites of a Person and all other rights corresponding thereto throughout the world; (e) all mask works, mask work registrations and applications therefor; (f) all industrial designs and any registrations and applications therefor; (g) all trade names, corporate names, logos, trade dress, common law trademarks and service marks, trademark and service mark registrations and applications therefor and all goodwill associated therewith; (h) any and all Internet domain names and Web sites (including all software and applications, and all components and/or modules thereof), used in connection therewith; and (i) all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded, and all documentation related to any of the foregoing.

"Intellectual Property of the Company" shall mean any Intellectual Property that is owned by the Company (including Intellectual Property transferred by IMS Holdco to the Company pursuant to the Conveyance Document), including Registered IP and Unregistered IP.

"Licensed Intellectual Property" means any Intellectual Property owned by another Person that is used by the Company in the operation of the Business, including Off-the-Shelf Software (as defined below), but excluding rights in or to materials created for clients, to the extent to which such (x) client is the first owner of copyright in such materials or (y) the materials are subject to a written assignment of copyright in favor of clients of the Company.

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3.14.2      Representations.  Except as set forth on Schedule 3.14.2, all of the Intellectual Property of IMS Holdco was transferred to the Company pursuant to the Conveyance Document. Schedule 3.14.2 hereto contains an accurate and complete list of all (a) patents, patent applications, registered trademarks, applications for registered trademarks, registered service marks, domain names, applications for registered service marks, logos, registered copyrights and applications for registered copyrights which are owned by the Company (the "Registered IP"), (b) all unregistered trademarks, unregistered service marks and material unregistered copyrights which are owned by the Company (the "Unregistered IP") and (c) all Licensed Intellectual Property that is material to the operation of the Business, other than widely distributed off-the-shelf applications subject to shrink-wrap and similar non-negotiated end-user license agreements ("Off-the-Shelf Software"). Except as set forth on Schedule 3.14.2, the registrations and applications of the Registered IP listed on Schedule 3.14.2 are in the name of IMS Holdco, and are valid, in proper form, enforceable and subsisting, all necessary registration and renewal fees in connection with such registrations have been made and all necessary documents and certificates in connection with such registrations have been filed with the relevant patent and Internet domain names, copyrights and trademark authorities in the United States or other jurisdictions where the Business is conducted for the purposes of maintaining such Intellectual Property registrations, and applications therefor, and no actions (including filing of documents or payments of fees) are due within ninety (90) days after the Closing.  No registration, or application therefor, for any of the Registered IP has lapsed, expired, or been abandoned, and no such registrations, or applications therefor, are the subject of any opposition, interference, cancellation, or other legal, quasi-legal, or governmental proceeding pending before any governmental, registration, or other authority in any jurisdiction.  Except as set forth on Schedule 3.14.2, (i) the Company is the sole and exclusive owner of all rights, title and interest in and to the Intellectual Property of the Company, free and clear of all Liens, (ii) no Person has any rights to use any of the Intellectual Property of the Company, (iii) neither IMS Holdco nor the Company has granted to any Person, or authorized any Person to retain, any ownership in the Intellectual Property of the Company, and (iv) all Licensed Intellectual Property in the Company's possession or used in the operation of the Business has been properly licensed from the owner of such Intellectual Property, and the Company possesses all license agreements, certificates or documentation sufficient to substantiate such rights, and the Company is in compliance with, and IMS Holdco has not in the past violated, such license agreements.  Except as set forth on Schedule 3.14.2,the consummation of the transactions contemplated hereby will not result in any loss or impairment of the Company's rights to own or use any Intellectual Property, nor will such consummation require the consent of any third party in respect of any Intellectual Property. The operation of the Business and use of all Intellectual Property therein does not infringe the Intellectual Property of any other Person. There are no proceedings pending or, to the knowledge of the Principals, threatened against IMS Holdco or the Company with respect to the Intellectual Property, or with respect to any other Intellectual Property, alleging the infringement or misappropriation by IMS Holdco or the Company of any Intellectual Property of any Person, and neither IMS Holdco nor the Company has received notice from any Person that the operation of the Business infringes the Intellectual Property of any Person.  There are no claims pending or, to the knowledge of the Principals, threatened challenging the validity of any Intellectual Property of the Company or any Intellectual Property used by the Company in the conduct of the Business. Neither IMS Holdco nor the Company has entered into or is otherwise bound by any consent, forbearance or any settlement agreement which limits the rights of the Company to use the Intellectual Property of the Company. To the knowledge of the Principals, no Person is infringing or misappropriating any of the Intellectual Property of the Company. All Intellectual Property of the Company was either developed (a) by employees of IMS Holdco within the scope of such employee's employment duties; or (b) by independent contractors or other third parties who have assigned all of their rights therein to IMS Holdco pursuant to a written agreement, and all such employees, independent contractors, and other third parties have waived, pursuant to a written agreement, their moral rights in all such Intellectual Property in favor of the Company or IMS Holdco.  Except as set forth on Schedule 3.14.2, the Intellectual Property of the Company does not contain any software licensed under terms which require, as a condition of the use, modification, or distribution of such software, that other software incorporated into, derived from, or distributed with such software: (x) be disclosed or distributed in source code form; (y) be licensed under terms that permit making derivative works; or (z) be redistributable at no charge to subsequent licensees.

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3.14.3      Privacy and Security.  All information or data of any kind possessed by the Company, including but not limited to, personally identifiable information collected from consumers ("PII"), aggregate or anonymous information collected from consumers ("Non-PII") and employee data (collectively, "Data"), has been collected, by IMS Holdco or the Company, or any other Person, and is being maintained, stored, processed and used by the Company, in compliance with all Laws and Orders.  IMS Holdco or the Company has at all times presented a privacy policy ("Privacy Policy") to consumers prior to the collection of any PII or Non-PII online.  The Privacy Policy, and any other representations, marketing materials and advertisements that address privacy issues and the treatment of PII and Non-PII, accurately and completely describe IMS Holdco's and the Company's respective information collection and use practices, and no such notices or disclosures have been inaccurate, misleading or deceptive.  Neither IMS Holdco nor the Company has collected or received any PII from children under the age of 13 without verifiable parental consent or directed any of its websites to children under the age of 13 through which such PII could be obtained.  IMS Holdco and the Company have stored and maintained all Data in a secure manner, using commercially reasonable technical measures, to assure the integrity and security of the Data and to prevent loss, alteration, corruption, misuse and unauthorized access to such Data.  There has been no unauthorized use, access to or disclosure of any Data.  Neither IMS Holdco nor the Company has received any claims, notices or complaints regarding its information practices or use of Data.  The consummation of the transactions contemplated hereby will not result in any loss or impairment of the rights to own and use any Data, nor will such consummation require the consent of any third party in respect of any Data.

Section 3.15     Compliance with Laws.  The Company is, and the Business (including the business conducted by IMS Holdco) has been conducted, in compliance with all applicable Laws and Orders, except in each case (other than with respect to compliance with environmental Laws and Orders relating to the regulation or protection of the environment ("Environmental Laws and Orders")) where the failure to so comply would not reasonably be expected to have a Material Adverse Effect (as defined below), including without limitation: (a) all Laws and Orders promulgated by the Federal Trade Commission or any other Governmental or Regulatory Authority; (b) all Environmental Laws and Orders; and (c) all Laws and Orders relating to labor, civil rights, and occupational safety and health laws, worker's compensation, employment and wages, hours and vacations, or pay equity. Neither IMS Holdco nor the Company has been charged with, or, to the knowledge of the Principals, threatened with or under any investigation with respect to, any charge concerning any violation of any Laws or Orders. The term "Material Adverse Effect" as it applies to IMS Holdco or the Company, shall mean a material adverse effect on its operations, business, prospects, assets or financial condition. The Company has all permits, licenses, and other government certificates, authorizations and approvals ("Required Permits") required by any Governmental or Regulatory Authority for the operation of the Business, except where the failure to have such Required Permits would not reasonably be expected to have a Material Adverse Effect.  All of the Required Permits are in full force and effect and no action or claim is pending, nor to the knowledge of the Principals, threatened, to revoke or terminate any such Required Permit or declare any such Required Permit invalid in any respect.

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Section 3.16     Client Relations.  Schedule 3.16 sets forth (a) the 20 largest clients of IMS Holdco (measured by revenues), and the revenues from each such client and from all clients (in the aggregate) for the calendar year ended December 31, 2009 and (b) the clients projected to be the 20 largest clients (measured by revenues) of the Company based on its current profit plan for the twelve months ending December 31, 2010, together with the estimated revenues from each such client and all clients (in the aggregate) for such period.  IMS Holdco and the Principals represent that the estimated revenues set forth on Schedule 3.16 were made in good faith and on a reasonable basis.  Except as set forth on Schedule 3.16, no client of IMS Holdco or the Company has advised IMS Holdco, the Company or any Principal in writing that it is (x) terminating or considering terminating the handling of its business by IMS Holdco or the Company or in respect of any particular product, project or service or (y) planning to reduce its future spending with IMS Holdco or the Company in any material manner; and no client has orally advised the Company, IMS Holdco or any Principal of any of the foregoing events.

Section 3.17     Accounts Receivable; Work-in-Process; Accounts Payable.  The amount of all work-in-process, accounts receivable, unbilled invoices (including without limitation unbilled invoices for services and out-of-pocket expenses) and other debts due or recorded in the records and books of account of IMS Holdco and which were transferred to the Company pursuant to the Conveyance Document, as being due to the Company and reflected on the Balance Sheet and the Closing Balance Sheet represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and will be good and collectible in full (less the amount of any provision, reserve or similar adjustment therefor reflected on the Balance Sheet and the Closing Balance Sheet) in the ordinary course of business, and none of the accounts receivable or other debts (or accounts receivable arising from any such work-in-process or unbilled invoices) is or will be subject to any counterclaim or set-off except to the extent of any such provision, reserve or adjustment.  The accounts payable set forth on the Balance Sheet, and the accounts payable incurred since the Balance Sheet Date through the Closing Date, represent trade payables resulting from bona fide transactions incurred in the ordinary course of business. There has been no change since the Balance Sheet Date in the amount or aging of the work-in-process, accounts receivable, unbilled invoices, or other debts due to the Company, or the reserves with respect thereto, or accounts payable of the Company which would have a Material Adverse Effect.

Section 3.18     Employment Relations.  (a) No unfair labor practice complaint against IMS Holdco or the Company is pending before any Governmental or Regulatory Authority; (b) there is no organized labor strike, dispute, slowdown or stoppage pending or to the knowledge of the Principals, threatened against or involving the Business; (c) there are no labor unions representing or, to the knowledge of the Principals, attempting to represent the employees of IMS Holdco who became employees of the Company; (d) no claim or grievance nor any arbitration proceeding arising out of or under any collective bargaining agreement is pending against any of the Company, IMS Holdco or the Principals and to the knowledge of the Principals, no such claim or grievance has been threatened; (e) no collective bargaining agreement is currently being negotiated by IMS Holdco or the Company; and (f) IMS Holdco did not experience any work stoppage or similar organized labor dispute during the last three years.  Except as set forth on Schedule 3.10, there is no legal action, suit, proceeding or claim pending or, to the knowledge of the Principals, threatened between the Company or IMS Holdco and any employees or former employees of the Company or IMS Holdco, agents or former agents of the Company or IMS Holdco, job applicants or any association or group of any employees of the Company or IMS Holdco, in each case prior to the transfer of the Business to the Company.

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Section 3.19     Employee Benefit Matters.

3.19.1      List of Plans.  Schedule 3.8 to this Agreement lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus, incentive, deferred compensation, stock option, restricted stock, stock appreciation rights, phantom stock rights, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, individual retirement programs or arrangements, and all termination, severance or other Contracts, whether covering one Person or more than one Person, and whether or not subject to any of the provisions of ERISA, which are or have been maintained, contributed to or sponsored by IMS Holdco or the Company or any ERISA Affiliate (as defined in Section 3.19.3) for the benefit of any employee of IMS Holdco or the Company (each item listed on Schedule 3.8 being referred to herein individually, as a "Plan" and collectively, as the "Plans").  For purposes of this Agreement, "foreign benefit plan" means each material plan, program or agreement contributed to, sponsored or maintained by either IMS Holdco, the Company or any ERISA Affiliate that is maintained outside of the United States, or that covers primarily employees residing or working outside of the United States, and which would be treated as a Plan had it been a material United States plan, program or agreement.  IMS Holdco has delivered to the Purchaser, to the extent applicable, a complete and accurate copy of: (a) each written Plan and descriptions of any unwritten Plan (including all amendments thereto whether or not such amendments are currently effective); (b) each summary plan description and all summaries of subsequent material modifications relating to a Plan; (c) each current trust agreement or other funding arrangement with respect to each Plan, including insurance contracts; (d) the most recently filed IRS Form 5500 relating to each Plan, if any; (e) the most recently received IRS opinion, advisory or determination letter for each Plan, if any; and (f) the three most recently prepared actuarial reports (if applicable) and financial statements, if any, in connection with each Plan.  None of the Principals, IMS Holdco or the Company has made any commitment, (i) to create or cause to exist any Plan not set forth on Schedule 3.8 or (ii) to modify, change or terminate any Plan.

3.19.2      Severance.  None of the Plans, nor, except as set forth on Schedule 3.19.2, any employment agreement or other Contract to which IMS Holdco or the Company is a party or bound, (a) provides for the payment of or obligates IMS Holdco or the Company to pay separation, severance, termination or similar-type benefits to any Person; or (b) obligates IMS Holdco or the Company to pay separation, severance, termination or similar-type benefits as a result of any transaction contemplated by this Agreement or as a result of a "change in control," within the meaning of such term under Section 280G of the Code, either alone or in conjunction with any subsequent occurrence.

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3.19.3      Multi-Employer Plans.  None of IMS Holdco, the Company or any ERISA Affiliate has maintained, contributed to or participated within the preceding three years in a multi-employer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) or a multiple employer plan subject to Sections 4063 and 4064 of ERISA, nor has any obligations or liabilities, including withdrawal, reorganization or successor liabilities, regarding any such plan. As used herein, the term "ERISA Affiliate" means any Person that is or has been a member of a controlled group of organizations (within the meaning of Sections 414(b), (c), (m) or (o) of the Code) of which IMS Holdco or the Company is a member.

3.19.4      Welfare Benefit Plans.  Each of IMS Holdco and the Company has expressly reserved the right, in all Plan documents relating to welfare benefits provided to employees, former employees, officers, directors and other participants and beneficiaries, to amend, modify or terminate at any time the Plans which provide for welfare benefits, and neither IMS Holdco nor any Principal is aware of any fact, event or condition that could reasonably be expected to restrict or impair such right. Except as required under Section 601 of ERISA, none of IMS Holdco, the Company or any ERISA Affiliate has made any promises or commitments to provide, and is not obligated to provide (i) medical benefits (including without limitation through insurance) to retirees or former employees of IMS Holdco, the Company or any ERISA Affiliate or their respective dependants, or (ii) life insurance or other death benefits to retired employees or former employees of IMS Holdco, the Company or any ERISA Affiliate or their respective dependants.

3.19.5      Administrative Compliance.  Each Plan is now and has been operated in all material respects in accordance with the requirements of its terms and with all applicable Laws, including, without limitation, ERISA, the Health Insurance Portability and Accountability Act of 1996 (as amended by the Health Information Technology for Economic and Clinical Health Act) and the Code, including, without limitation, all nondiscrimination and minimum coverage requirements of Sections 401(a) and 410(b) thereof, the Age Discrimination in Employment Act, Family and Medical Leave Act, the Americans with Disabilities Act, the Equal Pay Act, Title VII of the Civil Rights Act of 1964, and the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, and the regulations and authorities published thereunder.  Each of IMS Holdco and the Company has performed all obligations required to be performed by it under, is not in any respect in default under or in violation of, and the Principals have no knowledge of any default or violation by any Person under, any Plan.  Except as set forth on Schedule 3.9, no legal action, suit, audit, investigation or claim is pending or threatened with respect to any Plan (other than claims for benefits in the ordinary course), and no fact, event or condition exists that would be reasonably likely to provide a legal basis for any such action, suit, audit, investigation or claim.  All reports, disclosures, notices and filings with respect to such Plans required to be made to employees, participants, beneficiaries, alternate payees and any Governmental or Regulatory Authority have been timely made or an extension has been timely obtained. With respect to any insurance policy providing funding for benefits or an investment alternative under any Plan, (i) no liability or loss shall be incurred by the Company or any such Plan in the nature of a retroactive rate adjustment, loss sharing arrangement or other liability or loss, and (ii) no insurance company issuing any such policy is in receivership, conservatorship, liquidation or similar proceeding and, to the knowledge of the Principals, no such proceedings with respect to any insurer are imminent.

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3.19.6      Tax-Qualification.  Each Plan which is intended to be qualified under Sections 401(a) or 408(k) of the Code is qualified under Sections 401(a) and 408(k) of the Code (and, if applicable, complies with the requirements of Section 401(k) of the Code), and has received a favorable opinion, advisory or determination letter from the IRS that it is so qualified or is covered by a determination letter issued for master or prototype plans.  Each trust established in connection with any Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code is exempt under Section 501(a) of the Code; and no fact or event has occurred or condition exists since the date of such opinion, advisory or determination letter from the IRS which would be reasonably likely to adversely affect the qualified status of any such Plan or the exempt status of any such trust. Each Plan that is a foreign benefit plan which is intended to be qualified with the appropriate Governmental or Regulatory Authority in the relevant country has received a favorable determination that it is so qualified, and each trust established in connection with such foreign benefit plan that is intended to be exempt from taxation has received a favorable determination that it is so exempt.

3.19.7      Funding; Excise Taxes.  There has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan subject to ERISA.  None of IMS Holdco, the Company or any ERISA Affiliate has incurred any liability for any excise tax arising under Sections 4971, 4972, 4973, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980, 4980B, 4980D or 4980E of the Code or any civil penalty arising under Sections 409, 502(i) or 502(l) of ERISA, and no fact, event or condition exists which could give rise to any such liability.  None of IMS Holdco, the Company or any ERISA Affiliate has incurred any liability under, arising out of or by operation of Section 302(c)(11) or Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation ("PBGC") arising in the ordinary course), including, without limitation, any liability in connection with the termination of any employee benefit plan subject to Title IV of ERISA (a "Title IV Plan"); and, no fact, event or condition exists which could give rise to any such liability.  No complete or partial termination has occurred within the five years preceding the Closing Date with respect to any Plan maintained by IMS Holdco, the Company or any ERISA Affiliate, and no reportable event (within the meaning of Section 4043 of ERISA), notice of which has not been waived by the PBGC, has occurred or is expected to occur with respect to any Plan maintained by IMS Holdco, the Company or any ERISA Affiliate. The transactions contemplated by this Agreement and the Conveyance Document will not result in liability to IMS Holdco, the Company or the Purchaser under Section 4069 of ERISA.  No Title IV Plan or Plan subject to Section 302 of ERISA maintained by IMS Holdco, the Company or any ERISA Affiliate had an accumulated funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of the most recently ended plan year of such Plan.  None of the assets of IMS Holdco, the Company or any ERISA Affiliate is the subject of any Lien arising under Section 302(f) of ERISA or Section 412(n) of the Code; none of IMS Holdco, the Company or any ERISA Affiliate has been required to post any security under Section 307 of ERISA or Section 401(a) (29) of the Code relating to any Plan; and no fact or event exists which could give rise to any such Lien or requirement to post any such security.  As of the Closing Date, no Plan which is a Title IV Plan will have an "unfunded benefit liability" (within the meaning of Section 4001(a)(18) of ERISA) and no Plan which is subject to Section 302 of ERISA will have in "accumulated funding deficiency" (within the meaning of Section 302(a)(2) of ERISA).

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3.19.8      Tax Deductions.  All contributions, premiums or payments (including all employer contributions and, if applicable, employee salary reduction contributions) required to be made, paid or accrued with respect to any Plan have been made, paid or accrued on or before their due dates, including extensions thereof.  All such contributions have been fully deducted (to the extent deductible by the Company) or in the case of the current year will be deducted (to the extent deductible by the Company) for income tax purposes and no such deduction has been challenged or disallowed by any Governmental or Regulatory Authority, and no fact or event exists which could give rise to any such challenge or disallowance.

3.19.9      409A.  With respect to each Plan (and any other arrangement involving the Company) that is a nonqualified deferred compensation plan, within the meaning of Section 409A of the Code (a "409A Plan"), no event has occurred and no condition exists, that could subject anyone, including any Person, to any tax, fine, penalty or other liability under Section 409A of the Code ("409A Liability").   None of the transactions contemplated by this Agreement could, directly or indirectly, subject anyone or any Person to any 409A Liability.  Each 409A Plan is and has been operated and administered in good faith compliance with 409A of the Code, Treasury Notice 2005-1, the Final Treasury Reg. Sections 1.409A-1 through 1.409A-6, and any subsequent guidance issued thereunder.

Section 3.20     Interests in Customers, Suppliers, Etc.  Except as set forth on Schedule 3.20, neither the Principals nor to the knowledge of the Principals (without making any inquiry of any member of the Related Group, as hereinafter defined), any officer, director, or employee of IMS Holdco or the Company immediately prior to the Closing Date, any parent, brother, sister, child or spouse of any such officer, director, key executive or employee of the Company, IMS Holdco or the Principals (collectively, the "Related Group"), or any Person controlled by anyone in the Related Group:

(i)     owns, directly or indirectly, any interest in (excepting for ownership, directly or indirectly, of less than 1/4 of 1% of the issued and outstanding shares of any class of securities of a publicly held and traded company), or received or has any right to receive payments from, or is an officer, director, employee, agent or consultant of, any Person which is, or is engaged in business as, a competitor, lessor, lessee, supplier, distributor, sales agent, customer or client of IMS Holdco or the Company;

(ii)    owns, directly or indirectly (other than through the ownership of Membership Units), in whole or in part, any tangible or intangible property (including, but not limited to Intellectual Property), that the Company used in the conduct of the Business, other than immaterial personal items owned and used by employees at their work stations; or

(iii)   has any cause of action or other claim whatsoever against, or owes any amount to, IMS Holdco or the Company, except for claims in the ordinary course of business such as for accrued vacation pay, accrued benefits under employee benefit plans, and similar matters and agreements existing as of the Closing Date.

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Section 3.21     Bank Accounts and Powers of Attorney.  Set forth in Schedule 3.21 is an accurate and complete list showing (a) the name and address of, and account information for, each bank in which IMS Holdco had immediately prior to the transfer of the Business to the Company, or the Company has, an account, credit line or safe deposit box and the names of all Persons authorized to draw thereon or to have access thereto, and (b) the names of all Persons, if any, holding powers of attorney from IMS Holdco or the Company and a summary statement of the terms thereof.

Section 3.22     Compensation of Employees.

(a)           Schedule 3.22 is an accurate and complete list showing: (a) the names and positions of all employees and exclusive consultants of the Company, or IMS Holdco immediately prior to the transfer of the Business by IMS Holdco to the Company, who are, or were being, compensated at an annualized rate of $50,000 or more, together with a statement of the current annual salary, and the annual salary, bonus and incentive compensation paid or payable with respect to calendar years 2008 and 2009, and a statement of the projected annual salary, bonus and incentive compensation payable with respect to the calendar year ended December 31, 2010, and the material fringe benefits of such employees and exclusive consultants not generally available to all employees of IMS Holdco or the Company; (b) all bonus and incentive compensation paid or payable (whether by agreement, custom or understanding) to any employee of IMS Holdco or the Company not listed in clause (a) above for services rendered or to be rendered during calendar years 2008 and 2009; (c) the names of all retired employees, if any, of IMS Holdco or the Company who are receiving or entitled to receive any healthcare or life insurance benefits or any payments from IMS Holdco or the Company not covered by any pension plan to which IMS Holdco or the Company is a party, their ages and current unfunded pension rate, if any; and (d) a description of the current severance and vacation policy of IMS Holdco and the Company.  Neither IMS Holdco nor the Company has, because of past practices or previous commitments with respect to its employees, established any rights on the part of any of its employees to additional compensation with respect to any period after the Effective Date (other than wage increases in the ordinary course of business).  Each of IMS Holdco and the Company has properly classified and compensated all employees and consultants in accordance with all applicable Laws and Orders of any Governmental and Regulatory Authority.

(b)           Except as set forth on Schedule 3.3, the Principals have not agreed or made any written or verbal commitment to give any employee of IMS Holdco or the Company (or any family member or any affiliate of the employee of IMS Holdco or the Company) any portion or share of the Purchase Price in the form of a bonus, gift, award, or any similar type of remuneration.  The Principals agree that, from and after the Effective Date, no portion or proceeds of the Purchase Price shall be used to compensate or give to any employee of IMS Holdco or the Company (or any family member of any employee of IMS Holdco or the Company) a bonus, gift, award, or any similar type of remuneration.

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Section 3.23     No Changes Since the Balance Sheet Date.  From the Balance Sheet Date through the Closing Date, except as specifically stated on Schedule 3.23, neither IMS Holdco nor the Company (i) incurred any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except in the ordinary course of business, (ii) permitted any of its assets to be subjected to any Lien, (iii) sold, transferred or otherwise disposed of any assets except in the ordinary course of business, (iv) made any capital expenditure or commitment therefor which individually or in the aggregate exceeded $25,000; (v) made any distributions or dividend payments on any shares of its capital stock or equity participation rights, or redeemed, purchased or otherwise acquired any units of Membership Interest, or any option, warrant or other right to purchase or acquire any units of Membership Interest or equity participation rights of IMS Holdco or the Company, (vi) made any bonus or profit sharing distribution, (vii) increased or prepaid its indebtedness for borrowed money, except current borrowings under credit lines listed on Schedule 3.8, or made any loan to any Person other than to any employee for normal travel and expense advances, (viii) wrote down the value of any work-in-process, or wrote off as uncollectible any notes or accounts receivable, except write-downs and write-offs in the ordinary course of business, none of which individually or in the aggregate, were material to IMS Holdco or the Company, (ix) granted any increase in the rate of wages, salaries, bonuses or other remuneration of any employee who, whether as a result of such increase or prior thereto, received aggregate compensation from IMS Holdco or the Company at an annual rate of $100,000 or more, or except in the ordinary course of business to any other employees, (x) entered into any employment or exclusive consulting agreement which is not cancelable by IMS Holdco or the Company (and will not be cancelable by the Company) without penalty or other financial obligation within 30 days, (xi) canceled or waived any claims or rights of material value, (xii) made any change in any method of accounting procedures, (xiii) otherwise conducted IMS Holdco's business or the Business or entered into any transaction, except in the usual and ordinary manner and in the ordinary course of its business, (xiv) amended or terminated any agreement which is material to their businesses, (xv) renewed, extended or modified any lease of real property or any lease of personal property, except in the ordinary course of business, or (xvi) agreed, whether or not in writing, to do any of the actions set forth in any of the above clauses.

Section 3.24     Corporate Controls.  To the knowledge of the Principals, no officer, authorized agent, employee, consultant or any other Person while acting on behalf of IMS Holdco or the Company, has, directly or indirectly: used any corporate fund for unlawful contributions, gifts, or other unlawful expenses relating to political activity; made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false or fictitious entry on its books or records; participated in any racketeering activity; or made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment, or other payment of a similar or comparable nature, to any Person, private or public, regardless of form, whether in money, property, or services, to obtain favorable treatment in securing business or to obtain special concessions, or to pay for favorable treatment for business secured or for special concessions already obtained, and neither IMS Holdco nor the Company have participated in any illegal boycott or other similar illegal practices affecting any of its actual or potential customers.

Section 3.25     Brokers.  Except as set forth on Schedule 3.25, no broker, finder, agent or similar intermediary has acted on behalf of the Principals, IMS Holdco or the Company in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees, consulting fees or similar fees or commissions are payable by IMS Holdco, the Company or the Principals in connection therewith based on any agreement, arrangement or understanding with any of them.

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Section 3.26     Repayment of Loans.  All (i) intercompany indebtedness and (ii) indebtedness of the Principals to IMS Holdco or the Company has been repaid in full, other than routine travel expense advances in the ordinary course of business and consistent in amount with past practice.

Section 3.27     Copies of Documents.  The Principals have caused to be made available for inspection and copying by the Purchaser and its advisers, true, complete and correct copies of all documents referred to in this Article III or in any Schedule.  Summaries of all oral contracts contained on Schedule 3.8 are complete and accurate in all material respects.

ARTICLE IV

REPRESENTATIONS OF THE PURCHASER

The Purchaser represents, warrants and agrees to and with IMS Holdco and the Principals as follows:

Section 4.1       Existence and Good Standing.  The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with full corporate power and authority to own its property and to carry on its business all as and in the places where such properties are now owned or operated or such business is now being conducted.

Section 4.2       Execution and Validity of Agreement.  The Purchaser has the full corporate power and authority to make, execute, deliver and perform this Agreement and the transactions contemplated hereby.  The execution and delivery of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby have been duly authorized by all required corporate action on behalf of the Purchaser.  This Agreement has been duly and validly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by IMS Holdco and the Principals, constitutes the legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms.

Section 4.3       Litigation.  There is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Purchaser, any investigation by), any Governmental or Regulatory Authority pending or, to the knowledge of the Purchaser, threatened against the Purchaser or any of their respective properties or rights with respect to this Agreement.  The Purchaser is not subject to any Order entered in any lawsuit or proceeding with respect to this Agreement or the transactions contemplated hereby.

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Section 4.4       Non-Contravention; Approvals and Consents.  The execution, delivery and performance by the Purchaser of its obligations hereunder and the consummation of the transactions contemplated hereby will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation and bylaws of the Purchaser, (b) result in the violation by the Purchaser of any Laws or Orders of any Governmental or Regulatory Authority applicable to the Purchaser or any of its assets or properties, or (c) result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Purchaser to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or, except for such Liens as may be created in connection with an MDC Financing (as defined in Section 6.1 hereof), result in the creation or imposition of any Lien upon any of the respective assets or properties of the Purchaser, under any of the terms, conditions or provisions of any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound. No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound for the execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder or the consummation by the Purchaser of the transactions contemplated hereby

Section 4.5       Brokers.  No broker, finder, agent or similar intermediary has acted on behalf of the Purchaser in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees or similar fees or commissions are payable by the Purchaser in connection therewith based on any agreement, arrangement or understanding with either of them.

ARTICLE V

ACTIONS AT CLOSING

Simultaneously herewith:

Section 5.1       Certified Resolutions.  Each of IMS Holdco and the Company shall have delivered to the Purchaser a copy of the resolutions of its Members and Board of Managers, respectively, authorizing the execution, delivery and performance of this Agreement, the Operating Agreement and the Conveyance Document and the transactions contemplated hereby and thereby, as applicable, certified by one of its officers.

Section 5.2       Required Approvals and Consents.  The Company and the Principals shall have obtained or given, at no expense to the Purchaser or MDC Partners, and there shall not have been withdrawn or modified, any consents or approvals or other actions listed on Schedule 3.9 hereof (including without limitation, obtaining all such consents, approvals and/or waivers required under the Contracts listed on Schedule 3.8).  Each such consent or approval shall be in form reasonably satisfactory to counsel for the Purchaser.

Section 5.3       Operating Agreement.  The Company and IMS Holdco shall have entered into the Operating Agreement, together with the Purchaser.

Section 5.4       Employment Agreements. The Principals shall have entered into Employment Agreements with the Company substantially in the form and to the effect of Exhibit C hereto.

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Section 5.5       Non-Competition/Non-Solicitation/Non-Servicing Agreements.  The Principals and Dawn Du Mont shall have entered into Non-Competition/Non-Solicitation/Non-Servicing Agreements with the Purchaser and the Company in the form and to the effect of Exhibits D-1 and D-2 hereto.

Section 5.6       Conveyance Document.IMS Holdco and the Company shall have entered into the Conveyance Document.

Section 5.7      Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement, the Conveyance Document and all documents incident thereto must be reasonably satisfactory in form and substance to the Purchaser and its counsel, and the Purchaser shall have received copies of all such documents and other evidences as it or its counsel reasonably requested in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

ARTICLE VI

OTHER AGREEMENTS

Section 6.1       Management of the Company.

6.1.1        MDC Financing.  Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the Purchase Price under Section 2.1 hereof and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC Partners and/or one or more of its affiliates, in connection with its or any of its affiliates' current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon the Purchaser's Membership Units; (x) pledge or grant a security interest in or to otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under the Call and/or Sale Request (as such terms are defined in the Operating Agreement) to or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders from time to time (as applicable and collectively, the "Lender"); and (z) have the Company provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Units which have been pledged or assigned to it.

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6.1.2        Effect of Events During Period Membership Units Are Outstanding.  The parties hereto understand and agree that under the terms of the Employment Agreements referred to in Section 5.4, the Principals may be terminated for "cause" or "without cause" (as such terms are defined in such Employment Agreements).  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect IMS Holdco's right to receive the Purchase Price under this Agreement.  Each of the parties hereto agrees that if (a) a Principal ceases to be an employee of the Company during the period commencing as of Effective Date through the end of the last year included in the Measuring Period (as defined in the Operating Agreement) with respect to the exercise of a Call or Sale Request resulting in IMS Holdco no longer owing any Class B Units, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any of its subsidiaries, if any, no party to this Agreement or any Person claiming a right through such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary, if any (x) constitutes a breach by the Purchaser or any of its affiliates of this Agreement, (y) resulted in an adverse effect on the Purchase Price hereunder forming the basis for a claim against the Purchaser or any of its affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 2.1.3 hereof.

Section 6.2       Tax Matters.

6.2.1        Allocation.  The Principals, IMS Holdco and the Purchaser agree (i) to report for federal, state and local income tax purposes, the transactions contemplated by this Agreement in accordance with Situation 1 of Revenue Ruling 99-5, 1999-1 C.B. 434, and (ii) shall not take, or permit any of its Affiliates to take, a position inconsistent with such treatment unless otherwise required by Law.  The Purchaser shall prepare an allocation of the Purchase Price (and of other capitalized costs) among the assets of the Company.  The Company, the Purchaser, each member of the Company and the Principals shall report, act and file all Tax returns (including, but not limited to, Internal Revenue Service form 8594) in all respects and for all purposes consistent with such allocation prepared by the Purchaser and agreed to by IMS Holdco.  IMS Holdco and/or the Principals shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as the Purchaser may reasonably request to prepare such allocation.  None of the Company, any member of the Company, or the Principals shall take any position (whether in audits, tax returns, or otherwise) that is inconsistent with such allocation unless required to do so by applicable law.

6.2.2        Tax Returns.  The parties hereto acknowledge and agree that the Company shall prepare or cause to be prepared and file or cause to be filed all Tax returns for the Company except as otherwise specifically provided herein or in the Operating Agreement.  The Company shall permit the Purchaser to review and comment on each such Tax return described in the preceding sentence prior to filing.

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6.2.3        Tax Cooperation.  The Purchaser, IMS Holdco and the Principals shall cooperate fully, and each shall cause the Company to cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax returns pursuant to Section 6.2.2 or any other Tax returns relating to the operations of IMS Holdco or the Company, and any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include IMS Holdco's retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  The Purchaser, the Principals and IMS Holdco agree to, and each agree to cause the Company to, (A) retain all books and records with respect to Tax matters pertinent to IMS Holdco and Company relating to any taxable period beginning before the Effective Date until the expiration of the statute of limitations (and, to the extent notified by the Purchaser, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, IMS Holdco or the Purchaser, as the case may be, shall allow the other party to take possession of such books and records.

6.2.4        Tax Liability.  To the extent that any of the transactions contemplated by the Conveyance Document give rise to sales and/or use tax liability or other transfer, purchase, stamp or recordation documentary tax and fees (collectively, "Sales Taxes"), the Purchaser shall promptly pay such Sales Taxes to the appropriate tax authorities.  IMS Holdco shall cause the Company to deliver to the Purchaser completed returns in respect of any Sales Taxes required to be filed with respect to the transactions contemplated herein (regardless of whether such returns are informational or show liability for Sales Taxes) for filing with the appropriate taxing authority.  The Purchaser and IMS Holdco hereby waive compliance with the bulk sales laws of any applicable jurisdiction, and IMS Holdco and the Principals hereby agree to indemnify and hold harmless the Purchaser and its Affiliates from and against any claims arising out of or due to the failure to comply with such bulk sales laws.

Section 6.3       Equity Securities of IMS Holdco.

(a)           As long as IMS Holdco beneficially owns any equity interests in the Company, no Principal shall sell or in any other way transfer, assign, distribute, pledge, encumber or otherwise dispose of (a "Transfer") any IMS Holdco Interests (as defined below) without the prior written consent of the Purchaser, except with respect to a Transfer of IMS Holdco Interests pursuant to Section 10.2(c) of the Operating Agreement; provided, however, in the event a Principal desires to Transfer, for estate planning purposes, IMS Holdco Interests to a Family Member (as hereinafter defined) of such Principal, the prior written consent of the Purchaser shall not be unreasonably delayed or withheld.  As used herein, the term "Family Member" of any Principal shall mean (i) the spouse and lineal descendants of such Principal, (ii) the spouses of any such descendants, (ii) the legal representatives of any Person that falls within clause (i) or (ii) hereof, and (iii) the trustee of any trust of which any of the Persons falling with clause (i) or (ii) shall be the only beneficiaries entitled to the income or principal.

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(b)           From and after the Closing, IMS Holdco covenants and agrees that it shall not, directly or indirectly (i) authorize, create, issue, amend or modify any equity interests (whether common or preferred), subscriptions, options, warrants, rights (including "phantom equity rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind, providing for the purchase, issuance or sale of any membership interests, profits interests, capital interests or equity interests of any kind in IMS Holdco (the "IMS Holdco Interests"); or (ii) provide compensation to any employee of the Company or any subsidiary, if any, except to the extent such employee was entitled or eligible to receive such compensation at the time of, and as a result of, the Closing.  IMS Holdco further covenants and agrees that it shall not, directly or indirectly modify or amend IMS Holdco's Second Amended and Restated Operating Agreement (as amended through the Effective Date) dated February 2007, a copy of which is attached hereto as Exhibit E (the "IMS Holdco Operating Agreement").  Notwithstanding anything contained in this Section 6.3(b) to the contrary, the Principals shall be entitled to amend the IMS Holdco Operating Agreement and such amendment shall not be deemed to be in violation of this Section 6.3(b), so long as such amendment only results in a modification with respect to the IMS Holdco Interests owned by the Principals, and does not result in the issuance of any IMS Holdco Interests to any Person other than the Principals.

Section 6.4       Change of Name; Post-Closing Dissolutions.  At the Closing or a soon as practicable after the Closing Date, IMS Holdco shall execute appropriate documents to change its name to a name dissimilar to "Integrated MediaSolutions", and promptly thereafter shall file any necessary documents to reflect the name change with the New York Secretary of State and the appropriate authorities in the other states in which it is qualified to do business.  As soon as practicable after the Closing Date, IMS Holdco shall execute appropriate documents to dissolve each of the Retained Subsidiaries, and promptly thereafter shall file any necessary documents to reflect such dissolutions with the New York Secretary of State and the appropriate authorities in the other states in which the Retained Subsidiaries are qualified to do business.

ARTICLE VII

SURVIVAL; INDEMNITY

Section 7.1       Survival.   Notwithstanding any right of any party hereto fully to investigate the affairs of any other party, and notwithstanding any knowledge of facts determined or determinable pursuant to such investigation or right of investigation, each party hereto shall have the right to rely fully upon the representations, warranties, covenants and agreements of the other parties contained in this Agreement and the Schedules, if any, furnished by any other party pursuant to this Agreement, or in any certificate or document delivered at the Closing by any other party.  Subject to the limitations set forth in Section 7.6, the respective representations, warranties, covenants and agreements of IMS Holdco, the Principals and the Purchaser contained in this Agreement shall survive the Closing.

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Section 7.2       Obligation of IMS Holdco and the Principals to Indemnify.

7.2.1        General Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, IMS Holdco and the Principals hereby agree, jointly and severally, to indemnify the Purchaser and its affiliates, stockholders, officers, directors, employees, agents, representatives and successors, permitted assignees of the Purchaser and their affiliates (individually, a "Purchaser Indemnified Party" and collectively, the "Purchaser Indemnified Parties") against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to pay on behalf of or reimburse the Purchaser Indemnified Parties as and when incurred for, any and all liabilities (including liabilities for Taxes), obligations, losses, damages, penalties, demands, claims, actions, suits, judgments, settlements, penalties, interest, out-of-pocket costs, expenses and disbursements (including reasonable costs of investigation, and reasonable attorneys', accountants' and expert witnesses' fees) of whatever kind and nature (collectively, "Losses"), that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation contained in Article III.B hereof or in any certificate delivered by IMS Holdco or the Principals at the Closing or otherwise in connection herewith; (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of IMS Holdco and the Principals contained in Article III.B hereof or in any certificate delivered by IMS Holdco and the Principals at the Closing or otherwise in connection herewith; (c) any breach or failure by IMS Holdco or any Principal to comply with, perform or discharge any obligation, agreement or covenant by IMS Holdco and the Principals contained in this Agreement; (d) any liability or obligation or any assertion against any Purchaser Indemnified Party, arising out of or relating, directly or indirectly, to any Excluded Asset or any Retained Liability (as such terms are defined in the Conveyance Document) or other liability arising, in whole or in part, out of the conduct of the business of IMS Holdco, the Company or any of its subsidiaries, if any, prior to the Closing except for the Assumed Liabilities (as such term is defined in the Conveyance Document); (e) any litigation or claim disclosed on Schedule 3.10 to this Agreement; (f) any liability or obligation arising out of or relating, directly or indirectly, to the classification of any individual performing services for IMS Holdco (i) as an independent contractor, (ii) as a freelancer, (iii) as a consultant or (iv) in any other capacity other than as an employee; (g) any liability or obligation arising out of or relating, directly or indirectly, to any violation by IMS Holdco, on or prior to the Closing, of the Fair Labor Standards Act or any similar state or local wage and hour Law, Order, ordinance or regulation; and (h) any liability or obligation in connection with that certain Consulting Agreement by and among the Principals, Dawn Du Mont and IMS Holdco dated March 23, 2009.

7.2.2        Special Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, each of the Principals hereby severally agrees to indemnify the Purchaser Indemnified Parties against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to assume liability for, the payment of all Losses that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of or in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of a representation or warranty by such Principal contained in Article III.A hereof; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting the Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of such Principal contained in Article III.A hereof or in any certificate delivered by such Principal at the Closing or otherwise in connection herewith.  Any claim for indemnity made under this Section 7.2.2 shall not be construed as a claim under Section 7.2.1 hereof even if the Purchaser Indemnified Party could have made a claim under Section 7.2.1 hereof in respect of the same matters.

7.2.3        "Losses".  The term "Losses" as used in this Article VII is not limited to matters asserted by third parties against any Purchaser Indemnified Party but includes Losses incurred or sustained by a Purchaser Indemnified Party in the absence of Third Party Claims (as defined in Section 7.4.2 hereof).

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Section 7.3       Obligation of the Purchaser to Indemnify.   Subject to the limitations set forth in Section 7.6.3 hereof, the Purchaser hereby agrees to indemnify IMS Holdco and the Principals (individually an "IMS Holdco Indemnified Party" and collectively, the "IMS Holdco Indemnified Parties")against, and to protect, save and keep harmless the IMS Holdco Indemnified Parties from, and to pay on behalf of or reimburse the IMS Holdco Indemnified Parties as and when incurred for, any and all Losses that may be imposed on or incurred by the IMS Holdco Indemnified Parties as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any IMS Holdco Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (c) any breach or failure by the Purchaser to comply with, perform or discharge any obligation, agreement or covenant by the Purchaser contained in this Agreement.

Section 7.4       Indemnification Procedures.

7.4.1        Non-Third Party Claims.

(a)           In the event that any Person entitled to indemnification under this Agreement (an "Indemnified Party") asserts a claim for indemnification which does not involve a Third Party Claim (as defined in Section 7.4.2) (a "Non-Third Party Claim"), against which a Person is required to provide indemnification under this Agreement (an "Indemnifying Party"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Non-Third Party Claim Notice"), which Non-Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party.

(b)           The Indemnifying Party may acknowledge and agree by written notice (the "Non-Third Party Acknowledgement of Liability") to the Indemnified Party to satisfy the Non-Third Party Claim within 30 days of receipt of the Non-Third Party Claim Notice.  In the event that the Indemnifying Party disputes the Non-Third Party Claim, the Indemnifying Party shall provide written notice of such dispute (the "Non-Third Party Dispute Notice") to the Indemnified Party within 30 days of receipt of the Non-Third Party Claim Notice (the "Non-Third Party Dispute Period"), setting forth a reasonable basis of such dispute.  In the event that the Indemnifying Party shall fail to deliver the Non-Third Party Acknowledgement of Liability or Non-Third Party Dispute Notice within the Non-Third Party Dispute Period, the Indemnifying Party shall be deemed to have acknowledged and agreed to pay the Non-Third Party Claim in full and to have waived any right to dispute the Non-Third Party Claim.  Once the Indemnifying Party has acknowledged and agreed to pay any Non-Third Party Claim pursuant to this Section 7.4.1, or once any dispute under this Section 7.4.1 has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction, subject to the provisions of Section 7.6.1, the Indemnifying Party shall pay the amount of such Non-Third Party Claim to the Indemnified Party within 10 days of the date of acknowledgement or resolution, as the case may be, to such account and in such manner as is designated in writing by the Indemnified Party.

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7.4.2        Third-Party Claims.

(a)           In the event that any Indemnified Party asserts a claim for indemnification or receives notice of the assertion of any claim or of the commencement of any action or proceeding by any Person who is not a party to this Agreement or an affiliate of a party to this Agreement in respect of which such Indemnified Party is entitled to indemnification by an Indemnifying Party under this Agreement (a "Third Party Claim"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Third Party Claims Notice") within 20 days after asserting or learning of such Third Party Claim (or within such shorter time as may be necessary to give the Indemnifying Party a reasonable opportunity to respond to such claim), together with a statement specifying the basis of such Third Party Claim.  The Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party. The Indemnifying Party must provide written notice to the Indemnified Party that it is either (i) assuming responsibility for the Third Party Claim or (ii) disputing the claim for indemnification against it (the "Indemnification Notice").  The Indemnification Notice must be provided by the Indemnifying Party to the Indemnified Party within 15 days after receipt of the Third Party Claims Notice or within such shorter time as may be necessary to give the Indemnified Party a reasonable opportunity to respond to such Third Party Claim (the "Indemnification Notice Period").

(b)           If the Indemnifying Party provides an Indemnification Notice to the Indemnified Party within the Indemnification Notice Period that it assumes responsibility for the Third Party Claim (the "Defense Notice"), the Indemnifying Party shall conduct at its expense the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party.  The Defense Notice shall specify the counsel the Indemnifying Party will appoint to defend such claim ("Defense Counsel"); provided, however, that the Indemnified Party shall have the right to approve the Defense Counsel, which approval shall not be unreasonably withheld or delayed.  In the event that the Indemnifying Party fails to give the Indemnification Notice within the Indemnification Notice Period, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim without the prior consent of the Indemnifying Party and subject to the provisions of Section 7.6.1, the Indemnifying Party will be liable for all costs, expenses, settlement amounts or other Losses paid or incurred in connection therewith.

(c)           In the event that the Indemnifying Party provides in the Indemnification Notice that it disputes the claim for indemnification against it, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim, without the prior consent of the Indemnifying Party. Once such dispute has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction or by mutual agreement of the Indemnified Party and Indemnifying Party, subject to the provisions of Section 7.6.1, the Indemnifying Party shall within 10 days of the date of such resolution or agreement, pay to the Indemnified Party all Losses paid or incurred by the Indemnified Party in connection therewith.

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(d)           In the event that the Indemnifying Party delivers an Indemnification Notice pursuant to which it elects to conduct the defense of the Third Party Claim, the Indemnifying Party shall be entitled to have the exclusive control over the defense of the Third Party Claim and the Indemnified Party will cooperate in good faith with and make available to the Indemnifying Party such assistance and materials as it may reasonably request, all at the expense of the Indemnifying Party.  The Indemnified Party shall have the right at its expense to participate in the defense assisted by counsel of its own choosing.  The Indemnifying Party will not settle the Third Party Claim or cease to defend against any Third Party Claim as to which it has delivered an Indemnification Notice (as to which it has assumed responsibility for the Third Party Claim), without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed; provided, however, such consent may be withheld if, among other reasons, as a result of such settlement or cessation of defense, (i) injunctive relief or specific performance would be imposed against the Indemnified Party, or (ii) such settlement or cessation would lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder.

(e)           If an Indemnified Party refuses to consent to a bona fide offer of settlement which the Indemnifying Party wishes to accept, which provides for a full release of the Indemnified Party and its affiliates relating to the Third Party Claims underlying the offer of settlement and solely for a monetary payment, the Indemnified Party may continue to pursue such matter, free of any participation by the Indemnifying Party, at the sole expense of the Indemnified Party. In such an event, the obligation of the Indemnifying Party shall be limited to the amount of the offer of settlement which the Indemnified Party refused to accept plus the reasonable costs and expenses of the Indemnified Party incurred prior to the date the Indemnifying Party notified the Indemnified Party of the offer of settlement.

(f)           Notwithstanding clause (d) above, the Indemnifying Party shall not be entitled to control, but may participate in, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of (x) that part of any Third Party Claim that (i) seeks a temporary restraining order, a preliminary or permanent injunction or specific performance against the Indemnified Party, (ii) involves criminal allegations against the Indemnified Party or (iii) may lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder and (y) the entire Third Party Claim if such Third Party Claim would impose liability on the part of the Indemnified Party in an amount which is greater than the amount as to which the Indemnified Party is entitled to indemnification under this Agreement.

(g)           A failure by an Indemnified Party to give timely, complete or accurate notice as provided in this Section 7.4 will not affect the rights or obligations of any party hereunder except and only to the extent that, as a result of such failure, any party entitled to receive such notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise directly and materially damaged as a result of such failure to give timely notice.

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Section 7.5       Right of Offset.   Without limiting any other rights or remedies available to it, the Purchaser shall be entitled, subject to the limitations in Section 7.6, to offset any claim for indemnity made pursuant to Section 7.2 and in accordance with Section 7.4, against any payment of the Purchase Price due under Section 2.1; provided, however, the Purchaser may only exercise such right of offset in respect of claims relating to Losses actually incurred by a Purchaser Indemnified Party (in which case the amount of such offset shall be the amount of such actual Loss) or claims actually asserted by a third party (in which case the amount of the offset shall not exceed the Purchaser's good faith estimate of the amount of indemnifiable Losses that will ultimately be payable to a Purchaser Indemnified Party in respect of such claims).  If any such claims for indemnity are resolved in favor of IMS Holdco and the Principals by mutual agreement or otherwise, or if the amount withheld exceeds the amount ultimately payable to a Purchaser Indemnified Party in respect of such claim, the Purchaser shall pay to IMS Holdco the excess amount withheld with respect to such claim, together with interest thereon for the period such amount has been withheld at a rate equal to the published prime rate of interest of J.P. Morgan Chase in New York, in effect from time to time during the relevant period.

Section 7.6       Limitations On and Other Matters Regarding Indemnification.

7.6.1        Indemnity Cushion and Cap.  Subject to Section 7.6.5, neither IMS Holdco nor the Principals shall have any liability to any Purchaser Indemnified Party with respect to Losses arising out of any of the matters referred to in Section 7.2 until such time as the amount of such liability shall exceed $50,000 in the aggregate (in which case IMS Holdco and the Principals shall be liable for all Losses in excess of $50,000.  Notwithstanding anything to the contrary herein, subject to Section 7.6.5 below, the maximum aggregate liability of IMS Holdco and the Principals for indemnity payments under Section 7.2.1 and Section 7.2.2 shall be an amount equal to $30,000,000.

7.6.2        Termination of Indemnification Obligations of IMS Holdco and the Principals.  Subject to Section 7.6.5, the obligation of IMS Holdco and the Principals to indemnify under Section 7.2 hereof shall terminate on June 30, 2012, except as to matters as to which the Purchaser Indemnified Party has made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.3        Termination of Indemnification Obligations of the Purchaser.  The obligation of the Purchaser to indemnify under Section 7.3 hereof shall terminate on June 30, 2012, except as to matters as to which IMS Holdco or the Principals have made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto for such party shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.4        Treatment.  Any indemnity payments by an Indemnifying Party to an Indemnified Party under this Article VIII shall be treated by the parties as an adjustment to the Purchase Price.

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7.6.5        Exceptions.  Each of the limitations set forth above in this Section 7.6 shall in no event (a) apply to any Losses incurred by a Purchaser Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by IMS Holdco or the Principals; (ii) any breach of a representation or warranty contained in Sections 3.1, 3.2, 3.3, 3.6, 3.11, 3.19, 3.25 or any other provision hereof relating to Taxes, (iii) any indemnification obligation under Sections 7.2.1(c), 7.2.1(d), 7.2.1(e), 7.2.1(f), 7.2.1(g) or 7.2.1(h); and (iv) the obligations of IMS Holdco and the Principals set forth in Section 8.1 to pay certain expenses; or (b) apply to any Losses incurred by an IMS Holdco Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by the Purchaser; (ii) any indemnification obligation under Section 7.3(c); and (iii) the Purchaser's obligations set forth in Section 8.1 to pay certain expenses.

7.6.6        Control by MDC Partners.  All decisions and determinations to be made by the Purchaser and/or a Purchaser Indemnified Party under this Article VII shall be made by MDC Partners in the name of and on behalf of the Purchaser and/or such other Purchaser Indemnified Party.

7.6.7        Tax and Insurance Effects.  An indemnity payment due and payable by an Indemnifying Party under this Article VII shall be decreased to the extent of any   net  reduction in Taxes payable by the Indemnified Party resulting from the Losses,  taking into account the tax consequences to the Indemnified Party of the receipt of any indemnity payment due and payable by the Indemnifying Party under this Article VII.  In both cases the tax consequences shall be  determined  by using an assumed marginal tax rate equal to the highest marginal tax rate then in effect for corporate or individual taxpayers, as applicable, in the relevant jurisdiction.  In addition, any amounts otherwise required to be paid by an Indemnifying Party under this Article VII shall be net of any insurance proceeds received by the Indemnified Party.

ARTICLE VIII

MISCELLANEOUS

Section 8.1       Expenses.   Except as otherwise provided in this Agreement, the Purchaser, on the one hand, and the Principals and IMS Holdco, on the other hand, shall pay its, her or his own expenses relating to the transactions contemplated by this Agreement, including, without limitation, the fees and expenses of their respective counsel, financial advisors and accountants.

Section 8.2       Governing Law; Service of Process and Consent to Jurisdiction. The interpretation and construction of this Agreement, and all matters relating hereto (including, without limitation, the validity or enforcement of this Agreement), shall be governed by the laws of the State of New York without regard to any conflicts or choice of laws provisions of the State of New York that would result in the application of the law of any other jurisdiction.  Each of the parties hereto agrees that delivery of process, summons, notice or document in accordance with Section 8.2 shall be effective service of process for any action, suit or proceeding arising out of this Agreement.  Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any court of the State of New York located in New York County in any action, suit or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby, and agrees that any such action, suit or proceeding shall be brought only in such court.  Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such action, suit or proceeding brought in such a court and any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

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Section 8.3       "Person" Defined.   "Person" shall mean and include an individual, a company, a joint venture, a corporation (including any non-profit corporation), an estate, an association, a trust, a general or limited partnership, a limited liability company, a limited liability partnership, an unincorporated organization and a government or other department or agency thereof.

Section 8.4       "Knowledge" Defined.   Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Principals, such term shall be limited to the actual knowledge of any executive officer of IMS Holdco or any Principal, and unless otherwise stated, such knowledge that would have been discovered by any of them after reasonable inquiry.  Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Purchaser, as the case may be, such term shall be limited to the actual knowledge of the executive officers of such entity and unless otherwise stated, such knowledge that would have been discovered by such executive officers after reasonable inquiry.

Section 8.5       "Affiliate" Defined.   As used in this Agreement, an "affiliate" of any Person, shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

Section 8.6       Captions.   The Article and Section captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement.

Section 8.7       Publicity.   Subject to the provisions of the next sentence, no party to this Agreement shall, and the Principals shall use their reasonable efforts to ensure that no representative of IMS Holdco or the Company shall, issue any press release or other public document or make any public statement relating to this Agreement or the matters contained herein without obtaining the prior approval of the Purchaser and the Representative.  Notwithstanding the foregoing, the foregoing provision shall not apply to the extent that MDC Partners is required to make any announcement relating to or arising out of this Agreement by virtue of the securities laws of the United States or Canada or the rules and regulations promulgated thereunder or other rules of the NASDAQ Stock Market, Toronto Stock Exchange or the United States Securities and Exchange Commission or any announcement by any party or the Company pursuant to applicable law or regulations.

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Section 8.8       Notices.   Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to any other party shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next business day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to the Purchaser, addressed to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

c/o MDC Partners Inc.

950 Third Avenue

New York, New York 10022

Attention:  General Counsel

and (which shall not constitute notice)

Davis & Gilbert LLP

1740 Broadway

New York, New York 10019

Attention:  Brad J. Schwartzberg, Esq.

If to IMS Holdco or the Principals, to:

c/o BDR Company, LLC

650 Fifth Avenue

New York, New York 10017

Attention: Robert Ingram

with a copy to (which shall not constitute notice):

Moses & Singer LLP

405 Lexington Avenue

New York, New York 10174

Attention: Solomon P. Friedman, Esq.

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

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Section 8.9       Parties in Interest.   This Agreement may not be transferred, assigned, pledged or hypothecated by any party hereto, other than by operation of law.  Any purported such transfer, assignment, pledge, or hypothecation (other than by operation of law) shall be void and ineffective.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

Section 8.10     Severability.   In the event any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless be binding upon the parties with the same effect as though the void or unenforceable part had been severed and deleted.

Section 8.11     Counterparts.   This Agreement may be executed in two or more counterparts or by facsimile transmission, all of which taken together shall constitute one instrument.

Section 8.12     Entire Agreement.   This Agreement, together with the Schedules and Exhibits hereto, constitutes the sole, exclusive and only agreements of the parties hereto pertaining to the subject matter hereof, contains all of the covenants, conditions and agreements between the parties, express or implied, whether by statute or otherwise, and sets forth the respective rights, duties and obligations of each party to the other party as of the Closing Date. No oral understandings, oral statements, oral promises or oral inducements exist.

Section 8.13     Amendments.   This Agreement may not be amended, supplemented or modified orally, but only by an agreement in writing signed by each of the parties hereto.

Section 8.14     Third Party Beneficiaries.   Each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto and their respective successors and assigns as permitted under Section 8.9, except the Purchaser Indemnified Parties as provided in Article VII hereof.

Section 8.15     Use of Terms.   Whenever the context so requires or permits, all references to the masculine herein shall include the feminine and neuter, all references to the neuter herein shall include the masculine and feminine, all references to the plural shall include the singular and all references to the singular shall include the plural.  Whenever used in this Agreement, the terms "Dollars" and "$" shall mean United Stated Dollars.

Section 8.16     "Liens" Defined.   With respect to any asset, a "Lien" shall mean (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (other than an operating lease) (or any financial lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

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Section 8.17     No Strict Construction; Representation by Counsel.  The language used in this Agreement will be deemed to be the language chosen by the parties hereto 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.  The provisions of this Agreement shall be construed according to their fair meaning and neither for nor against any party hereto irrespective of which party caused such provisions to be drafted.  Each of the parties acknowledges that it has been represented by an attorney in connection with the preparation and execution of this Agreement.

Section 8.18     Representative.  Each of the Principals and IMS Holdco hereby appoints Ingram as his, her or its exclusive agent and attorney-in-fact (the "Representative") (i) to give and receive notices and communications with respect to the provisions of this Agreement, (ii) to amend the terms of this Agreement, (iii) to agree to, negotiate, enter into settlements or compromises of matters arising under the provisions of this Agreement, and (iv) to take any and all actions necessary or appropriate in the judgment of the Representative to be taken on behalf of the Principals and IMS Holdco under such provisions of this Agreement.  Such agency and that of any successor representative is irrevocable and coupled with an interest; provided, however, the Representative shall have no authority to act on behalf of any Principal or IMS Holdco with respect to an indemnity claim under Section 7.2.2.  In the event the Representative refuses to, or is no longer capable of, serving as the Representative hereunder, the other Principals shall promptly appoint a successor Representative who shall thereafter be the successor Representative hereunder and the Representative shall serve until such successor is duly appointed and qualified to act hereunder.  The Principals and IMS Holdco hereby agree that the Representative shall not have any liability to the Company or any of its subsidiaries, if any, for any action he takes or omits to take hereunder (or under any agreement or instrument referred to herein) in his capacity as Representative, unless such action or omission constitutes bad faith or willful misconduct by the Representative.  Notices or communications to or from the Representative shall constitute notice to or from the Principals and/or IMS Holdco in respect of matters relating to this Agreement.  Any decision, act, consent or instruction of the Representative shall constitute a decision of all of the Principals and IMS Holdco, and shall be final, binding and conclusive upon each Principal and IMS Holdco, and the Purchaser may rely upon any decision, act, consent or instruction of the Representative as being the decision, act, consent or instruction of IMS Holdco and each and every Principal.

Section 8.19     Guaranty.  MDC Partners hereby agrees to pay, or cause the Purchaser to pay, when due, each payment of Purchase Price required pursuant to Article II above and any indemnification obligations of the Purchaser pursuant to Article VII above.

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IN WITNESS WHEREOF, the parties hereto have executed this Membership Unit Purchase Agreement, on the day and year first above written.

MF + P ACQUISITION CO.
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary
INTEGRATED MEDIA SOLUTIONS, LLC
By:	/s/ Robert Ingram
	Name: Robert Ingram
	Title: Chief Executive Officer
/s/
Robert Ingram
/s/
Desiree Du Mont
/s/
Ron Corvino
MDC PARTNERS INC. (solely with respect to Sections 7.6.6 and 8.19)
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: General Counsel and Corporate Secretary

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TABLE OF CONTENTS

ARTICLE I
SALE OF THE PURCHASED UNITS
Section 1.1  Sale of the Purchased Units	1
ARTICLE II
PURCHASE PRICE AND CLOSING
Section 2.1  Purchase Price; Working Capital Adjustment	2
2.1.1  Purchase Price	2
2.1.2  Definitions	6
2.1.2  Other Definitions	6
2.1.3  Accounting Procedures	7
2.1.4  Examination of Books and Records	8
Section 2.2  Closing	8
Section 2.3  Third Party Consents	9
Section 2.4  Further Assurance; Post Closing Cooperation	9
ARTICLE III
REPRESENTATIONS OF IMS HOLDCO AND THE PRINCIPALS
Section 3.1  Execution and Validity of Agreements; Restrictive Documents	9
3.1.1  Execution and Validity	9
3.1.2  No Restrictions	10
3.1.3  Non-Contravention	10
3.1.4  Approvals and Consents	10
Section 3.2  Existence and Good Standing	10
Section 3.3  Capital Stock; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments	11
Section 3.4  Financial Statements and No Material Changes	11
Section 3.5  Books and Records	12
Section 3.6  Title to Properties; Encumbrances; No Prior Activities	12
3.6.1  Title to Properties; Encumbrances	12
3.6.2  No Prior Activities	12
Section 3.7  Real Property	13
3.7.1  Owned Real Property	13
3.7.2  Leased Real Property	13
Section 3.8  Contracts	14
Section 3.9  Non-Contravention; Approvals and Consents	15
Section 3.10  Litigation	15
Section 3.11  Taxes	16
Section 3.12  Liabilities	17

45

Section 3.13  Insurance	17
Section 3.14  Intellectual Properties	18
3.14.1  Definitions	18
3.14.2  Representations	19
3.14.3  Privacy and Security	20
Section 3.15  Compliance with Laws	20
Section 3.16  Client Relations	21
Section 3.17  Accounts Receivable; Work-in-Process; Accounts Payable	21
Section 3.18  Employment Relations	21
Section 3.19  Employee Benefit Matters	22
3.19.1  List of Plans	22
3.19.2  Severance	22
3.19.3  Multi-Employer Plans	23
3.19.4  Welfare Benefit Plans	23
3.19.5  Administrative Compliance	23
3.19.6  Tax-Qualification	24
3.19.7  Funding; Excise Taxes	24
3.19.8  Tax Deductions	25
3.19.9  409A	25
Section 3.20  Interests in Customers, Suppliers, Etc.	25
Section 3.21  Bank Accounts and Powers of Attorney	26
Section 3.22  Compensation of Employoees	26
Section 3.23  No Changes Since the Balance Sheet Date	27
Section 3.24  Corporate Controls	27
Section 3.25  Brokers	27
Section 3.26  Repayment of Loans	28
Section 3.27  Copies of Documents	28
ARTICLE IV
REPRESENTATIONS OF THE PURCHASER
Section 4.1  Existence and Good Standing	28
Section 4.2  Execution and Validity of Agreement	28
Section 4.3  Litigation	28
Section 4.4  Non Contravention; Approvals and Consents	29
Section 4.5  Brokers	29
ARTICLE V
ACTIONS AT CLOSING
Section 5.1  Certified Resolutions	29
Section 5.2  Required Approvals and Consents	29
Section 5.3  Operating Agreement	29
Section 5.4  Employment Agreements	29
Section 5.5  Non-Competition/Non-Solicitation/Non-Servicing Agreements	30
Section 5.6  Conveyance Document	30

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Section 5.7  Proceedings	30
ARTICLE VI
OTHER AGREEMENTS
Section 6.1  Management of the Company	30
6.1.1  MDC Financing	30
6.1.2  Effect of Events During Period Membership Units Are Outstanding	31
Section 6.2  Tax Matters	31
6.2.1  Allocation	31
6.2.2  Tax Returns	31
6.2.3  Tax Cooperation	32
6.2.4  Tax Liability	32
Section 6.3  Equity Securities of IMS Holdco	32
Section 6.4  Change of Name	33
ARTICLE VII
SURVIVAL; INDEMNITY
Section 7.1  Survival	33
Section 7.2  Obligation of IMS Holdco and the Principals to Indemnify	34
7.2.1  General Indemnity	34
7.2.2  Special Indemnity	34
7.2.3  Losses	34
Section 7.3  Obligation of the Purchaser to Indemnify	35
Section 7.4  Indemnification Procedures	35
7.4.1  Non-Third Party Claims	35
7.4.2  Third-Party Claims	36
Section 7.5  Right of Offset	38
Section 7.6  Limitations On and Other Matters Regarding Indemnification	38
7.6.1  Indemnity Cushion and Cap	38
7.6.2  Termination of Indemnification Obligations of IMS Holdco and the Principals	38
7.6.3  Termination of Indemnification Obligations of the Purchaser	38
7.6.4  Treatment	38
7.6.5  Exceptions	39
7.6.6  Control by MDC Partners	39
7.6.7  Tax and Insurance Effects	39
ARTICLE VIII
MISCELLANEOUS
Section 8.1  Expenses	39
Section 8.2  Governing Law; Service of Process and Consent to Jurisdiction	39
Section 8.3  "Person" Defined	40
Section 8.4  "Knowledge" Defined	40
Section 8.5  "Affiliate" Defined	40

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Section 8.6  Captions	40
Section 8.7  Publicity	40
Section 8.8  Notices	41
Section 8.9  Parties in Interest	42
Section 8.10  Severability	42
Section 8.11  Counterparts	42
Section 8.12  Entire Agreement	42
Section 8.13  Amendments	42
Section 8.14  Third Party Beneficiaries	42
Section 8.15  Use of Terms	42
Section 8.16  "Liens" Defined	42
Section 8.17  No Strict Construction; Representation by Counsel	43
Section 8.18  Representative	43
Section 8.19  Guaranty	43

48

INDEX OF DEFINED TERMS

2010 Growth Payment	5
409A Liability	26
409A Plan	26
Accountants	7
Additional Payments	6
Adjusted GAAP PBT	6
affiliate	42
Agreement	1
Applicable Percentage	6
Balance Sheet	12
Balance Sheet Date	12
Business	11
Closing	8
Closing Balance Sheet	7
Closing Date	9
Closing Date Working Capital	7
Code	6
Company	1
Company Indemnified Parties	36
Company Indemnified Party	36
Contracts	10
Conveyance Document	1
Data	20
Defense Counsel	38
Defense Notice	38
Desiree	1
Environmental Laws and Orders	21
ERISA	23
ERISA Affiliate	23
Extra Payment	5
Family Member	34
FAP	3
FIAP	5
FOAP	4

GAAP	7
Governmental or Regulatory Authority	10
IMS	1
IMS Interests	33
Indemnification Notice	38
Indemnification Notice Period	38
Indemnified Party	37
Indemnifying Party	37
Independent Auditors	7
Ingram	1
Initial Top-Up Amount	3
Intellectual Property	18
Intellectual Property of the Company	19
JAMS	8
Laws	10
Lender	32
Liabilities	17
Licensed Intellectual Property	19
Lien	44
Losses	35
LTG Rate Increase	3
Material Adverse Effect	21
MDC Financing	32
MDC Partners	1
Membership Units	1
Non PII	20
Non-Third Party Acknowledgement of Liability	37
Non-Third Party Claim	37
Non-Third Party Claim Notice	37
Non-Third Party Dispute Notice	37
Non-Third Party Dispute Period	37
Off-the-Shelf Software	19
Operating Agreement	1
Operative Documents	44
Orders	10
PBGC	25
Person	42
PII	20
Plan	23

Plans	23
Principal	1
Principals	1
Privacy Policy	20
Purchase Price	2
Purchased Units	1
Purchaser	1
Purchaser Indemnified Parties	35
Purchaser Indemnified Party	35
Real Property Lease	13
Real Property Leases	13
Reconciliation Period	7
Registered IP	19
Related Group	26
Representative	45
Required Permits	21
Retained Subsidiaries	13
Ron	1
Sale Event	6
Sales Taxes	33
SAP	3
Special Determination	7
TAP	4
Target Working Capital	7
Taxes	16
Third Party Claim	37
Third Party Claims Notice	37
Title IV Plan	25
Top-Up Payments	2
Transfer	33
Unregistered IP	19
Working Capital Payment	2
Working Capital Shortfall	2

EXHIBITS

Exhibit A	Conveyance Document
Exhibit B	Operating Agreement
Exhibit C	Employment Agreements
Exhibit D-1	Principals Non-Competition/Non-Solicitation/Non-Servicing Agreements
Exhibit D-2	Dawn Du Mont Non-Competition/Non-Solicitation/Non-Servicing Agreements
Exhibit E	IMS Holdco's Second Agreement and Restated Operating Agreement

SCHEDULES

Schedule 2.1.1	Payment of the Purchase Price
Schedule 3.2	Good Standing
Schedule 3.3	No Options or Restrictions
Schedule 3.4(A)	Financial Statements
Schedule 3.4(B)	GAAP Exceptions
Schedule 3.6	Liens
Schedule 3.7.2	Real Property Leases
Schedule 3.8	Contracts
Schedule 3.9	Approvals and Consents
Schedule 3.10	Litigation
Schedule 3.11	Taxes
Schedule 3.12	Liabilities
Schedule 3.13	Insurance
Schedule 3.14.2	Intellectual Property
Schedule 3.16	Client Relations
Schedule 3.19.2	Severance
Schedule 3.20	Interests in Customers, Suppliers, Etc.
Schedule 3.21	Bank Accounts and Powers of Attorney
Schedule 3.22	Compensation of Employees
Schedule 3.23	No Changes Since the Balance Sheet Date
Schedule 3.25	Brokers

EX-10.3.2 7 v183284_ex10-3x2.htm

Exhibit 10.3.2

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

INTEGRATED MEDIA SOLUTIONS PARTNERS LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") dated May 6, 2010 and effective as of April 30, 2010, is made and entered into by and among INTEGRATED MEDIA SOLUTIONS PARTNERS LLC, a Delaware limited liability company (the "Company"), MF + P ACQUISITION CO., a Delaware corporation ("MDC Holdco"), and INTEGRATED MEDIA SOLUTIONS, LLC, a New York limited liability company ("IMS Holdco", together with MDC Holdco, are collectively referred to as the "Members" and individually a "Member").   Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article XIII.

WHEREAS, IMS Holdco formed the Company as its sole member, owning 100% of the Membership Interests (as defined in Section 13.1 hereof) in the Company, and entered into a Limited Liability Company Agreement of the Company (the "Original Operating Agreement");

WHEREAS, pursuant to a General Assignment, Bill of Sale and Assumption Agreement (the "Conveyance Document"), effective as of April 30, 2010 (the "Effective Date"), a copy of which has been delivered to MDC Holdco, IMS Holdco transferred to the Company substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business (the "Business"), in exchange for 100% of the Membership Interests;

WHEREAS, pursuant to the Membership Unit Purchase Agreement effective as of the Effective Date (the "Purchase Agreement"), IMS Holdco sold, transferred, conveyed and delivered to MDC Holdco 750 Class A Units, representing 100% of the issued and outstanding Class A Units (the "Purchase Transaction"), such that immediately after giving effect to such transfer, the issued and outstanding Units of the Company were as follows: MDC Holdco – 750 Class A Units; IMS Holdco – 250 Class B Units; and

WHEREAS, the Members now desire to enter into this Agreement to supersede the Original Operating Agreement, to provide for the admission of MDC Holdco as a member, and to promote their interests and those of the Company by making provisions in this Agreement to govern their relations as Members;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members and the other parties hereto do hereby agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

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

Section 1.3           Offices; Registered Agent.  The principal place of business of the Company shall be 650 Fifth Avenue, New York, New York, 10017, or such other principal place of business as the Managers (as defined in Section 11.5) may from time to time determine.  The Company may have, in addition to such office, such other offices and places of business at such locations, both within and without the State of Delaware, as the Managers may from time to time determine or the business and affairs of the Company may require.  The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person (as defined in Section 13.1) as the Managers may designate from time to time in the manner provided by law.

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

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

ARTICLE II

MEMBERS; MEMBERSHIP INTERESTS; UNITS

Section 2.1           Members and Membership Units.  The Company is authorized to issue 750 Class A Units and 250 Class B Units, all of which have been issued and are outstanding, and allocated among the Members as set forth on Schedule 2.1.  Upon any change in the Members or Units, including by reason of the issuance of additional Units, the Members agree to complete a revised Schedule 2.1 hereof, which shall be deemed incorporated into this Agreement as part of this Section 2.1.

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Section 2.2           Classes of Units.

(a)           Class A Units.  The Class A Units shall have the following characteristics: (i) an initial Unit Capital Account (as defined in Section 7.2(e) hereof), (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

(b)           Class B Units. The Class B Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

Section 2.3           Transfer of Units.  In the event a Member sells all or a portion of its Membership Interests in accordance with Article X hereof, then effective as of the date of the sale and subject to compliance with Section 10.1 hereof, such Member shall automatically cease to be a Member in the Company as to such sold Unit.  Upon the acquisition by MDC Holdco of any other Units pursuant to the procedures set forth in Article X hereof, MDC Holdco shall have all of the rights, powers and duties associated with such Units.

Section 2.4           Additional Members and Membership Interests.  Additional Persons may be admitted to the Company as Members and Membership Interests may be created and issued to such Persons on such terms and conditions as the Members shall approve, subject to Section 4.1 hereof.  The terms of admission or issuance may specify the creation of different classes or groups of Members having different rights, powers and duties.  The creation of any new class or group of Members shall be indicated in an amendment to this Agreement in accordance with Section 14.4 hereof and such amendment shall indicate the different rights, powers and duties of the classes or groups of Members.

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

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

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Section 2.7           Certification of Units. The Company may at its election issue certificates to the Members representing the Units held by such Member. If such election is approved by the Managers, then this Section 2.7 shall apply and not otherwise:

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

(b)           The transfer register or transfer book and blank certificates shall be kept by the secretary of the Company or by any transfer agent or registrar approved by the Managers for that purpose. The certificates shall be numbered and registered in the share or unit register or transfer books of the Company as they are issued. Except to the extent that the Company shall have received written notice of an assignment of any Unit in the Company, the Company shall be entitled to treat the Person in whose name any certificates issued by the Company stand on the books of the Company as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such Unit on the part of any other Person.

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

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

ARTICLE III

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS

Section 3.1           Capital Account; Capital Contributions.

(a)           The Capital Accounts of the Members shall be computed in accordance with Section 7.2 below.  The Members hereby recognize the following to be the factual basis on which the Capital Accounts shall be so computed: (i) prior to the purchase of Class A Units by MDC Holdco from IMS Holdco pursuant to the Purchase Agreement, IMS Holdco made a capital contribution to the Company in an amount equal to the fair market value of the Business, which fair market value the Members agreed was equal to 133.33% of the fair market value of the actual consideration paid by MDC Holdco to IMS Holdco pursuant to the Purchase Agreement (the value of such consideration being the "Purchase Consideration Value"); (ii) pursuant to the Purchase Agreement, MDC Holdco acquired 100% of the Class A Units and 75% of IMS Holdco's former aggregate Capital Account in the Company and accordingly the Capital Account of MDC Holdco equals the Purchase Consideration Value; and (iii) the remaining aggregate Capital Account of IMS Holdco equals 33.33% of the Purchase Consideration Value.

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(b)           The Members agree that for purposes of this Agreement, each of MDC Holdco and IMS Holdco shall be deemed to have made initial Capital Contributions equal to their initial Capital Account balance as set forth in Section 3.1(a) above, and on Schedule A hereto, which shall be adjusted by the Members as soon as the final Purchase Consideration Value has been determined in accordance with the Purchase Agreement.  The Members also agree that the Gross Asset Values (as defined in Section 13.1 below) of all Business assets are to be determined as set forth in Section 8 of the Conveyance Document (as defined in the Purchase Agreement).

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

Section 3.3           Allocation of Profits and Losses.

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

(i)           Profits shall be allocated as follows:

(A) First, to those Members to whom GAAP PBT (as such term is defined in Section 13.1) for such calendar year and each prior calendar year since the Effective Time has been allocated under Section 3.5 until the excess of the cumulative allocations to each such Member of Profits for such calendar years under this Section 3.3(a)(i) over any cumulative allocations to each such Member of Losses under Section 3.3(a)(ii) for such calendar years equals the amount of GAAP PBT so allocated to each such Member during such calendar years; and

(B) Thereafter, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(ii)           Losses shall be allocated as follows:

(A) First, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(B) over Losses allocated under this Section 3.3(a)(ii)(A), 100% to the Members in the proportion in which such excess was allocated;

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(B) Second, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(A) over Losses allocated under this Section 3.3(a)(ii)(B), 100% to the Members in the proportion in which such excess was allocated;

(C) Third, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(b)          In the case of any property contributed to the Company by any Member which at the time of contribution has an adjusted tax basis which differs from its fair market value, items of Profits, Losses, income, gain and deduction for income tax purposes shall be allocated as required under Section 704(c) of the Code to take into account such difference.   The parties agree that such allocations will be made following the traditional method with remedial allocations.

(c)           Notwithstanding anything to the contrary in this Agreement, all items of income attributable to any: (A) change in method of accounting for a taxable period ending on or prior to the Effective Time or a change in method required on account of the transactions contemplated to occur on the Effective Time, whether under Section 481 or otherwise; (B) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); and (C) installment sale or open transaction disposition made on or prior to the Effective Time, shall be allocated 100% to IMS Holdco.  The Members agree that if the allocation provided for in the preceding sentence cannot be done, the Managers shall cause the Company to allocate items of income, gain, deduction, and loss among the Members to achieve substantially the same results as if such allocation had been done.  In addition, an amount of income equal to any income triggered to MDC Holdco and/or the Company on account of any deemed assumption by either or both of them of any deferred revenue of IMS Holdco as of the Effective Time shall be allocated 100% to IMS Holdco.

(d)           Any item of taxable income, gain, loss or deduction of the Company (as well as any credits or the basis of property to which such credits apply) as determined for federal income tax purposes shall be allocated in the same manner as the corresponding income, gain, loss, or deduction is allocated under Section 3.3(a) (as modified by Section 3(e)).  Allocations pursuant to this Section 3.3(d) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

(e)           Special Allocations and Limitations

(1)           In the event a Member unexpectedly receives in any taxable year any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) which cause or increase an Adjusted Capital Account Deficit (as defined in Section 13.1) of such Member, items of Company income and gain shall be specially allocated to such Member in such taxable year (and, if necessary in subsequent taxable years), in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible.

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(2)           Notwithstanding the provisions of Section 3.3(a), in no event shall Losses of the Company be allocated to a Member if such allocation would result in such Member’s having an Adjusted Capital Account Deficit at the end of any taxable year.  All Losses in excess of the limitation set forth in this Section 3.3(e)(2) shall be allocated to the Members with positive balances in their Capital Accounts, as a class pro rata in proportion to such positive balances.

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

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

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

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

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

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

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

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

(5)           Solely for purposes of determining a Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Members' interests in Company profits are in proportion to their Units, and, for purposes of allocating Nonrecourse Liabilities (as defined in Section 13.1) of the Company among the Members pursuant to Treasury Regulation Section 1.752-3(a)(3), the parties agree that each Member's interest in Company profits shall equal its Units.

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

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(7)           For purposes of determining the character (as ordinary income or capital gain) of any Profits allocated to the Members pursuant to this Section 3, such portion of Profits that is treated as ordinary income attributable to the recapture of depreciation shall, to the extent possible, be allocated among the Members in the proportion which (i) the amount of depreciation previously allocated to each Member bears to (ii) the total of such depreciation allocated to all Members.  This Section 3.3(f)(7) shall not alter the amount of allocations among the Members pursuant to this Section 3, but merely the character of income so allocated.

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

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

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

Section 3.4           Distributions.

(a)           Subject to the making of the Tax Distributions (as defined in clause (b) below), to the extent permitted by the Act, the Company shall distribute Cash Flow (as defined in Section 13.1) of the Company as follows:

(i) first, distributions of Cash Flow generated by the Company in respect of any calendar year, shall be distributed 100% to the holders of the Class A Units in an amount equal to the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class A Distribution Shortfall Amount (as defined in Section 13.1) for such year; and

(ii) thereafter, distributions of Cash Flow generated by the Company in respect of any calendar year shall be distributed to the holders of the Class B Units in an amount no greater than the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class B Distribution Shortfall Amount (as defined in Section 13.1) for such year.

Distributions described above shall be made on a quarterly basis, generally in arrears, based upon the financial statements of the Company and its subsidiaries then available to the Managers.

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(b)           Notwithstanding anything in this Agreement to the contrary, in preference to any other distributions pursuant to this Section 3.4, the Members shall cause the Company to distribute cash of the Company to its Members on a quarterly (or other reasonable) basis at least sufficient for each Member to meet such Member's required federal, state and local income tax payments in respect of such Member's distributive share of the Company's taxable income for the current or the prior fiscal year calculated at the maximum individual tax rates for a resident of New York City taking into account the deduction allowable for federal income taxes of any state income taxes (which tax payments shall include (i) estimated tax payments in respect of the current fiscal year and (ii) any remaining payments of income tax on account of the prior fiscal year not funded out of Tax Distributions in respect of estimated payments for such prior fiscal year) (the "Tax Distributions").  For purposes hereof, if a Member is a "pass-through" entity for income tax purposes, the Tax Distributions required hereby shall be made in amounts which are at least sufficient to meet the tax payment requirements of the stockholders or members of such Member in respect of their allocated Profits hereunder. For purposes of Section 3.4(a) hereof, Tax Distributions shall be deemed to be distributions of Cash Flow at the time of such Tax Distribution.

(c)           Any distribution of funds prior to the end of the fiscal year in which such funds came into possession of the Company shall be treated as a non-interest-bearing loan (a "draw") from the Company to each Member receiving such draw and shall be deemed repaid by reducing the amount of each subsequent distribution to the Member receiving such draw pursuant to this Section 3.4(c) by the lesser of (i) the entire amount otherwise distributable to the Member receiving such draw, and (ii) the entire amount of any unrepaid draws pursuant to this Section 3.4(c).

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

Section 3.5           Allocation of GAAP PBT.

(a)           GAAP PBT (as defined in Section 13.1) for purposes of this Agreement shall be allocated for any calendar year as follows:

(i) first, GAAP PBT shall be allocated to the Loss Account (as defined in Section 3.5(b) below) until such Loss Account shall have been brought to zero;

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(ii) next, with respect to calendar years 2010 through 2014, GAAP PBT generated by the Company in such years shall be allocated 100% to the holders of the Class A Units; and

(iii) thereafter, with respect to all calendar years from and after 2015,  GAAP PBT generated by the Company in such year shall be allocated to the Members in accordance with the number of Units held by such Member.

(b)           Allocation of Annual Loss.  In the event that GAAP PBT for any year shall be less than zero, such amount (expressed as a negative) shall be allocated to a loss account (the "Loss Account"), which shall be required to be brought to zero through allocations of future year allocations of GAAP PBT pursuant to Section 3.5(a)(i) before allocations of positive GAAP PBT shall be made to the Members.

ARTICLE IV

MANAGEMENT

Section 4.1           Management of the Company.

(a)           Except to the extent otherwise provided for herein, the powers of the Company shall be exercised by and under the authority of, and the business and affairs of the Company shall be managed under, the direction of the Managers of the Company. Notwithstanding the foregoing or any other provisions hereof to the contrary, until MDC Holdco or one of its Affiliates has purchased and paid for 100% of the Class B Units the taking of any of the actions listed in clauses (i) through (xv)below shall require the mutual agreement of MDC Holdco and IMS Holdco.  The mutual agreement of MDC Holdco and IMS Holdco may be obtained by a vote at a meeting of the Members or by the written consent of MDC Holdco and IMS Holdco.

(i)            a sale, lease or other disposition of all or substantially all or a significant part of the assets or business of the Company or any subsidiary thereof, except in connection with (x) a sale, lease or other disposition of all or substantially all or a significant part of the assets or business or stock (an "MDC Sale") of MDC Partners Inc. ("MDC Partners"); (y) an MDC Financing (as defined in Section 4.1(e) hereof) or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing; or (z) any transfer by MDC Holdco or any of its Affiliates of their respective interest in the Company to another wholly-owned subsidiary of MDC Partners (an "MDC Internal Transfer") (for purposes of this Agreement, in the event of any MDC Internal Transfer, the term MDC Holdco as used in this Agreement shall include any such transferee);

(ii)           a merger, consolidation or amalgamation of the Company or any subsidiary with and into another Person or of another Person with and into the Company or any subsidiary, except in connection with an MDC Sale, an MDC Internal Transfer or an MDC Financing;

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(iii)          the authorization or issuance of additional Class A Units, Class B Units or other equity ownership interests in, or the granting of any other rights to participate in the proceeds of the sale of assets of the Company which are dilutive to IMS Holdco; or the incurring of debt for borrowed money in excess of the amount provided for in the approved annual operating budget or capital expenditure budget, except in connection with borrowings under the terms and conditions of the MDC Cash Management Program (and in compliance with Section 4.1(d) below);

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

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

(vi)          a relocation of the Company's offices from either its current office location at (a) 650 Fifth Avenue, New York, New York or (b) 50 S. Beverly Drive, Beverly Hills, California, at any time while either lease thereon remains in effect under such lease's terms in effect as of the Effective Date, unless such relocation occurs as a result of the failure to obtain the consent of the landlord in connection with the assignment of such lease;

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

(viii)        any change in the name of the Company;

(ix)           entering into any business other than, or any transaction outside of, the normal business activities of the Company and any of its subsidiaries and related activities other than a MDC Internal Transfer;

(x)           the payment by the Company of any general management fee to any Member or one of such Member's Affiliates;

(xi)           a fundamental change to the nature of the business of the Company and its subsidiaries, taken as a whole;

(xii)          the formation of any subsidiaries of the Company or any of its subsidiaries;

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(xiii)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal (as defined in the Purchase Agreement) is in the active employ of the Company, (x) modify the salary, bonus or other incentive compensation of any employee of the Company or any of its subsidiaries, or (y) adopt or amend any profit sharing or other employee benefit or compensation plan for the Company or any of its subsidiaries; provided, however, this clause (xiii) shall not apply to the employment terms of Robert Ingram, whose employment terms are set forth in his Employment Agreement, or any other individual in the position of Chief Executive Officer of the Company;

(xiv)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal is in the active employ of the Company, hire, or fire "without cause", any employee of the Company or any of its subsidiaries whose annual salary is less than $200,000, without the consent of the then Chief Executive Officer of the Company (or if there is more than one such Chief Executive Officer, then any of such Chief Executive Officers, it being understood that as of the date of this Agreement Robert Ingram is the Chief Executive Officer of the Company); and

(xv)         the delegation to any Manager or to any committee of the Board of Managers of the Company or any subsidiary or to any officer of the Company or any subsidiary the power to take any of the actions referred to in the foregoing clauses before obtaining the authorization required by this Section 4.1(a).

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

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

(d)          The Members hereto further agree that the operations of the Company and its subsidiaries shall be conducted (i) subject to Section 4.1(g) below, to participate in the overall cash management and banking program of MDC Partners (the "MDC Cash Management Program"), and (ii) to comply on a timely basis with the financial reporting and budgeting procedures of MDC Partners as from time to time in effect, which procedures require the approval of an annual operating budget, capital expenditure budget and cash flow projections and require management of operating companies to seek approval prior to material deviations from such budgets.

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(e)           Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the purchase price pursuant to the Purchase Agreement and for other good and valuable consideration, the Members hereby (i) agree that MDC Partners  and/or one or more of its Affiliates, in connection with its or any of its Affiliates’ current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon MDC Holdco's Membership Interests; (x) pledge or grant a security interest in or otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under any Call to, or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders from time to time (as applicable and collectively, the "Lender"); and (z) have the Company and/or its subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned to it.

(f)           MDC Partners shall cause sufficient working capital to be made available to the Company as shall be determined by the Board of Managers to be reasonably necessary to execute upon its approved annual operating and capital expenditure budgets, but in no event shall MDC Partners or any of its Affiliates be required to fund losses of the Company or any of its subsidiaries.  Such working capital shall be provided to the Company on terms consistent with the MDC Cash Management Program and accordingly, neither MDC Partners nor any of its Affiliates shall be required to provide working capital in the event that the consolidated cash balance of the Company in the MDC Cash Management Program is negative. The parties hereto further agree that the Company shall hereby adopt, and shall take appropriate steps to cause the employees of the Company to comply with, the Code of Conduct of MDC Partners, as the same may be amended from time to time.

(g)           The Company shall comply with all applicable federal, state and local laws and the Company shall provide reasonable assistance to MDC Partners and its Affiliates in their compliance with all applicable federal, state and local laws, including without limitation, the provisions of the Sarbanes-Oxley Act of 2002, as amended from time to time.

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

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Section 4.3           Number and Qualifications of Managers.  As long as IMS Holdco owns outstanding Units of the Company, there shall be five (5) Managers of the Company of which MDC Holdco shall be entitled to appoint three (3) Managers and IMS Holdco shall be entitled to appoint two (2) Managers (each Manager appointed by IMS Holdco must be a full-time employee of the Company or one of its subsidiaries); thereafter the Managers shall be elected in accordance with Section 4.4.  No decrease in the number of Managers shall have the effect of shortening the term of any incumbent Manager.  None of the Managers need be Members of the Company or residents of the State of Delaware.  The initial designees of MDC Holdco are Gavin Swartzman, Michael Sabatino and David Doft.  The initial designees of IMS Holdco are Robert Ingram and Desiree Du Mont.

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

Section 4.5           Removal; Filling of Vacancies.  As long as IMS Holdco owns outstanding Units of the Company, only MDC Holdco can remove and replace its appointed Managers and only IMS Holdco can remove and replace its appointed Managers.  Following such time, the Members by the required vote as set forth in Section 5.5 shall be entitled to remove any Manager and to elect for the unexpired term of such Manager so removed another individual.  Upon the resignation, retirement or death of any of the Managers of the Company, subject to Section 4.3, the Members by the required vote as set forth in Section 5.5, shall be entitled to elect another Person for the unexpired term of such Manager.

Section 4.6           Place of Meetings.  Meetings of the Managers, annual, regular or special, shall be held in New York, NY, unless otherwise agreed to by the Managers.

Section 4.7           Annual Meetings.  Annual meetings of the Managers, of which no notice shall be required, shall be held at the discretion of the Managers immediately following any annual meeting of Members, at which time any and all business may be transacted.

Section 4.8           Regular Meetings.  The Managers shall notify each of the Members of regular meetings of the Managers, which meetings shall be held at such times and places as may be fixed from time to time by resolution adopted by the Managers.  Except as otherwise provided by statute, any and all business may be transacted at any regular meeting.  The Managers shall be given reasonable notice of the date, time and place of any scheduled regular meeting.

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

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

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

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

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

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

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

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

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

ARTICLE V

MEETINGS OF MEMBERS

Section 5.1           Annual Meetings.  An annual meeting of the Members shall not be required, but if called by any Member may be held on such date, at such time and at such place as shall be determined by the Managers and stated in the notice of the meeting, provided that there may be called no more than one such annual meeting in any calendar year.  At such meeting, the Members shall elect the Managers (subject to Section 4.3 above) and transact such other business as may properly be brought before the meeting.

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

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

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

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

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

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

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ARTICLE VI

OFFICERS

Section 6.1           Officers.  The Managers may designate one or more individuals (who may or may not be Managers) to serve as officers of the Company.  The Company shall have such officers as the Managers may from time to time determine.  Any two or more offices may be held by the same individual.  An officer of the Company shall have the duties and responsibilities consistent with his position and shall perform such duties and responsibilities as shall from time to time be prescribed or delegated to him by the Managers, subject to the terms of any employment agreement with the Company or one of its subsidiaries to which such officer may be a party. The Managers hereby initially designate Robert Ingram as Chief Executive Officer of the Company, Desiree Du Mont as President of the Company, Ron Corvino as President of the Company, Joe Volpe as Chief Operating Officer of the Company, Mitchell Gendel as Vice President and Secretary of the Company,  Michael Sabatino as Vice President and Treasurer of the Company, Gavin Swartzman as Vice President, Development of the Company, Edward Kipperman as Vice President, Taxation of the Company and Doreene Weiner as Director, Treasury Operations of the Company.

ARTICLE VII

ACCOUNTING AND TAX MATTERS; REPORTS; BANKING

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

Section 7.2           Capital Accounts.  An individual capital account (the "Capital Account") shall be maintained by the Company for each Member as provided below:

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(a)           Each Member's Capital Contributions when made shall be credited to such Member's Capital Account.  The Capital Account of each Member shall, except as otherwise provided in this Agreement, be (i) credited with the amount of cash and the fair market value of any property contributed to the Company by such Member or its predecessor in interest (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), (ii) credited with the amount of any Profits allocated to such Member or its predecessor in interest for federal income tax purposes, (iii) debited by the amount of any Losses allocated to such Member or its predecessor in interest for federal income tax purposes, (iv) debited by such Member's (or such predecessor's) allocable share of expenditures of the Company not deductible in computing the Company's taxable income and not properly chargeable as capital expenditures, including any nondeductible book amortization of capitalized costs, and (v) debited by the amount of cash or the fair market value of any property distributed to such Member its predecessor in interest (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code).  Immediately prior to any distribution of property by the Company, the Members’ Capital Accounts shall be adjusted, as required by Treasury Regulation 1.704-1(b)(2).

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

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

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

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

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

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

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

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

(c)           To elect under Section 754 of the Code to adjust the basis of the Company's assets pursuant to Sections 734 and 743 of the Code.

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

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

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

ARTICLE VIII

COVENANTS OF THE MEMBERS

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

ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION

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

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Section 9.2           Liquidation.  Upon dissolution of the Company, the Members shall appoint a Manager as liquidating trustee, who shall immediately commence to wind up the Company’s affairs; provided, however, that a reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the satisfaction of liabilities to creditors so as to enable the Members to minimize the normal losses attendant upon a liquidation.  After making payment or provision for all debts and liabilities of the Company, if determined to be necessary under the circumstances by the Managers, the Members' Capital Accounts shall be adjusted by debiting or crediting each Member's Capital Account with its respective share of the hypothetical gains or losses resulting from the assumed sale of all remaining assets of the Company for cash at their respective fair market values as of the date of dissolution of the Company in the same manner as gains and losses on actual sales of such properties are allocated under Section 3.3 and Section 3.5 hereof.  The liquidating trustee shall then by payment of cash or property make distributions to the Members in accordance with their respective Capital Accounts.  Any distribution to the Members in liquidation of the Company shall be made by the later of the end of the taxable year in which the liquidation occurs or 90 days after the date of such liquidation.  Notwithstanding any provisions in this Agreement to the contrary, no Member shall be obligated to restore a deficit balance in its Capital Account at any time.  The proceeds of liquidation shall be distributed, as realized, in the manner provided in the Act, subject to the applicable provisions of Section 3.4.  Subject to the immediately following sentence, the Members shall continue to share Profits and Losses during liquidation in the same proportions, as specified in Sections 3.3 and 3.5 hereof, as before liquidation.  Notwithstanding anything to the contrary herein, the Managers shall in their good faith discretion (and in a manner which reflects the economic interests of the Members consistent with the intent of the transactions set forth in this Agreement and the Purchase Agreement) allocate items of income, gain, deduction, and loss for the year of liquidation (and for earlier years if necessary to the extent then possible) so as to give Members positive Capital Account balances, immediately before the distributions provided for in the second preceding sentence, equal to the amount (if any) that would be distributed to Members if distributions were made in accordance with Section 3.4(a) and (b) hereof.  In the event that such Manager is unable to perform in his capacity as liquidating trustee due to bankruptcy, dissolution, death, adjudicated incompetency or any other termination of such Manager as an entity, the liquidating trustee shall be a Person approved by the unanimous vote of the Membership Interests.  With respect to this provision, the term "liquidation" shall have the same meaning as set forth in Treasury Regulation §1.704-1(b)(2)(ii) as in effect at such time, provided that the events specified in Section 10 shall not be deemed a "liquidation".

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

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

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ARTICLE X

RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS

Section 10.1         Assignment by the Members.  For so long as IMS Holdco owns Units, no Class A Unit shall be sold or transferred without the consent of IMS Holdco, except in connection with (i) an MDC Sale, (ii) an MDC Internal Transfer, (iii) a sale described in Section 10.2(b) or (iv) an MDC Financing or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing.  Except as set forth in Section 10.2(b), no Class B Unit shall be sold, transferred, assigned, pledged or otherwise disposed of, in whole or in part, without the written consent of MDC Holdco to such transfer, which, in the case of a transfer in connection with a distribution to the direct or indirect members of IMS Holdco or for tax or estate planning purposes, shall not be unreasonably delayed or withheld (but which shall require, without limitation, that such Class B Units so transferred continue to be subject to the applicable Call under Sections 10.2(a) and 10.2(c) hereof).  Any purported transfer by IMS Holdco or other permitted holder of Class B Units of all or any of its Units, any purported assignment by IMS Holdco or other permitted holders of Class B Units of any of its rights under this Agreement, and any purported delegation by IMS Holdco or other permitted holders of Class B Units of any of its duties or obligations under this Agreement (which shall in no way relieve IMS Holdco or such other permitted holder of Class B Units of responsibility for the performance of any such duties and obligations), in contravention of any of the provisions of this Agreement, will be null and void ab initio and of no force and effect.  Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the indirect sale of Units as part of any transaction involving a change of control of MDC Partners or its successors.

Section 10.2         Call Rights of MDC Holdco; Permitted IMS Holdco Liquidity Actions.

(a)           MDC Holdco Call.  At any time during the first calendar quarter of any calendar year commencing with calendar year 2015 (each, a "Call Period"), MDC Holdco shall have the right (but not the obligation) to require IMS Holdco to sell to it (a "Call"), all  of the Class B Units owned by IMS Holdco.  MDC may exercise the Call at any time during the Call Period, and may do so by delivering written notice of exercise (a "Call Exercise Notice") to IMS Holdco during the Call Period.  The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

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(b)           IMS Holdco Sale Request.

(i)           In the event that MDC Holdco has not yet exercised its Call right pursuant to Section 10.2(a) and the Sale Request Condition (as defined below) has then been met, during any applicable Sale Request Period (as defined below), IMS Holdco shall have the right (but not the obligation) to request that MDC Holdco purchase from it (a "Sale Request") all of the Class B Units owned by IMS Holdco; provided, however, the parties hereto agree that IMS Holdco shall not be permitted to exercise a Sale Request if, in the reasonable determination of MDC Holdco's accountants, the purchase by MDC Holdco of IMS Holdco's Class B Units pursuant to this Section 10.2(b) would result in the failure of the "Goodwill Impairment Test" under FASB 142 (or any successor provision) with respect to such purchase. For purposes of this Section 10.2(b), (x) the "Sale Request Condition" shall be: (i) if the applicable Sale Request Period is during calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of (1) FAP divided by the Split Percentage (as defined herein) applicable to FAP, (2) SAP divided by the Split Percentage applicable to SAP, (3) TAP divided by the Split Percentage applicable to TAP and (4) FOAP divided by the Split Percentage applicable to FOAP (as each of FAP, SAP, TAP, FOAP and Split Percentage is defined in the Purchase Agreement) paid or payable as of such date, divided by (II) 90%, (B) the 2010 Growth Payment (as defined in the Purchase Agreement) and (C) $24,000,000; or (ii) if the applicable Sale Request Period is during any calendar year other than calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of the fractions, the numerators of which are each Additional Payment (as defined in the Purchase Agreement) paid or payable in respect of periods prior to such date, and the denominators of which are the Split Percentages applicable to such Additional Payment, divided by (II) 90%, (B) the 2010 Growth Payment and (C) $30,000,000; and (y) the "Sale Request Period" shall be any of: (i) the first calendar quarter of calendar years 2011, 2012, 2013 and 2014 and (ii) the second calendar quarter of calendar year 2015 and any calendar year thereafter.

(ii)          IMS Holdco may make a Sale Request by delivering written notice (a "Sale Request Notice") to MDC Holdco at any time during the applicable Sale Request Period; provided that IMS Holdco may not make more than one Sale Request in any 12-month period.  MDC Holdco shall have thirty (30) days following receipt of the Sale Request Notice to accept IMS Holdco's Sale Request, which acceptance shall be exercised by delivering written notice (a "Sale Request Acceptance Notice") to IMS Holdco within such thirty day period.

(iii)         If such Sale Request Acceptance Notice is delivered (an "Accepted Sale Request"), the Class B Units shall be sold to MDC Holdco in accordance with the provisions set forth in Section 10.4, with the date of delivery of the Sale Request Acceptance Notice being the exercise date.

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(iv)         In the event that MDC Holdco shall not have delivered a Sale Request Acceptance Notice during such thirty (30) day period, then (x) IMS Holdco shall have the right for twelve (12) months to solicit bona-fide offers for a sale of its Class B Units and MDC Holdco's Class A Units to an unaffiliated third party (the "Prospective Purchaser"), (y) upon the receipt of such offer, IMS Holdco shall deliver written notice (a "Third Party Offer Notice") of such offer to MDC Holdco, which notice shall identify the Prospective Purchaser and shall describe the material terms of such offer, and (z) for a period of thirty (30) days after receipt of the Third Party Offer Notice, MDC Holdco shall have the right to deliver a Sale Request Acceptance Notice and (A) if such Sale Request Acceptance Notice is delivered, MDC Holdco shall acquire the Class B Units as described above in this Section 10.2 and no Member shall be permitted to consummate a sale to the Prospective Purchaser or (B) if a Sale Request Acceptance Notice is not delivered, IMS Holdco shall, for a period of one hundred twenty (120) days, be permitted to consummate the sale of its Class B Units to such Prospective Purchaser, and IMS Holdco shall have the right to require MDC Holdco to sell its Class A Units to such Prospective Purchaser on substantially the same terms and conditions (taking into account the economic differences, if any, between Units).

(c)           Termination Call.  Notwithstanding the periods described in Sections 10.2(a) and (b) above, in the event that a Principal shall no longer be an employee of the Company for any reason whatsoever (a "Departing Principal"), then at any time following the effective date of such termination (the "Date of Termination"), MDC Holdco shall have the right, subject to the proviso contained in this Section 10.2(c), to exercise a Call, exercisable by delivery to IMS Holdco of a Call Exercise Notice, in respect of a number of IMS Holdco's Class B Units equal to the number of Class B Units indirectly owned by the Departing Principal; provided, however, MDC Holdco shall not be permitted to exercise a Call under this Section 10.2(c) for a period of 20 days following the Date of Termination (the "Waiting Period") and during such Waiting Period, IMS Holdco and/or the Principals who are in the then-current employ of the Company (the "Remaining Principals"), shall have the right to purchase all of the Departing Principal's equity interests in IMS Holdco as of the Date of Termination upon terms and conditions agreed upon by IMS Holdco and the Principals, so long as notice of such purchase has been delivered in writing to MDC Holdco prior to the expiration of the Waiting Period indicating a binding commitment on behalf of IMS Holdco and/or the Remaining Principals to purchase such equity interests within 60 days following the expiration of the Waiting Period.  In the event such purchase does not occur within such 60-day period, MDC Holdco shall be entitled to exercise a Call pursuant to this Section 10.2(c).

Section 10.3        Binding Obligations Upon Exercise of a Call or an Accepted Sale Request.  Upon the proper delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, IMS Holdco shall be obligated to sell to MDC Holdco, and MDC Holdco shall be obligated to purchase from IMS Holdco, the Units subject to the Call or the Accepted Sale Request, as applicable, pursuant to the terms of this Article X.

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Section 10.4         Purchase Price.

(a)           Calculation/Payment of the Purchase Price for Class B Units. In connection with the exercise of a Call under Section 10.2(a) or Section 10.2(c) or an Accepted Sale Request for Class B Units, MDC Holdco shall calculate and pay in the aggregate to holders of such Units, the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class B Purchase Price"):

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "First Payment") equal to:

           AP  x  {(PBT for YP-1) x  5.0} – {the Reduction Amount}

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(ii)           within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "Second Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP)) x 5.0} – {First Payment} – {the Reduction Amount}

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(iii)          within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the "Final Class B Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP) + (PBT for YP+1)) x AM} – {First Payment + Second Payment} – {the Reduction Amount}

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(b)           If any calculation of the Class B Purchase Price results in an amount which is equal to or less than zero, such Class B Purchase Price payment shall be deemed to be zero and accordingly the seller of the Units pursuant to such Call or Accepted Sale Request shall not be under any obligation to pay such negative amount (expressed as a positive number).

(c)           Other Definitions.

(i)           "AM" shall mean 5.0, and may be increased by one or more of the following:

(x)           by 0.25, if Average Annual PBT Growth Rate is 10% or greater;

(y)           by 0.25, if Average PBT Margin for the Measuring Period (as defined below) is 25% or greater; and

(z)           by 0.50, if within a reasonable period of time prior to the applicable Class B Closing Date, the Principals have indentified successor management of the Company, reasonably satisfactory to the Chief Executive Officer of MDC Partners, and such successor management have agreed to employment terms and protective covenants satisfactory to MDC Holdco.

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(ii)           "Applicable Percentage" or "AP" shall mean (a) the number of Class B Units being sold pursuant to a Call or an Accepted Sale Request, divided by (b) the total number of outstanding Units.

(iii)          "Average Annual PBT Growth Rate" shall mean the result of (x) the sum of (1) (A) PBT for YP+1 less PBT for YP divided by (B) PBT for YP, (2) (A) PBT for YP less PBT for YP-1 divided by (B) PBT for YP-1, and (3) (A) PBT for YP-1 less PBT for YP-2 divided by (B) PBT for YP-2, divided by (y) 3.

(iv)          "Average PBT Margin" shall equal the percentage equivalent of the quotient determined by dividing (a) the total PBT for the Measuring Period, by (b) the total Revenues for the Measuring Period.

(v)           "Direct Billings of Expenses" shall mean any third party costs that are billed to a particular client, excluding any mark-up to such client on such costs.

(vi)          "Measuring Period" shall mean the calendar year or years included in the applicable Class B Purchase Price calculation.

(vii)         "Pass Through of Third Party Costs" shall mean any component of a particular client invoice that is dispersed (or will ultimately be dispersed) directly to a third party (other than independent contractors) in connection with the funding of a service relating to that client's campaign, engagement or business, whether or not such Person acts as an agent or as a principal with respect to such client.

(viii)        "PBT" for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP; provided, however, that for calendar year 2010, 2010 PBT shall mean the sum of (x) the consolidated PBT of IMS Holdco and its subsidiaries, if any, from January 1, 2010 through and including the Effective Date (the "Pre-Closing Period") and (y) the consolidated PBT of the Company and its subsidiaries, if any, as of the Effective Time through and including December 31, 2010 (the "Post-Closing Period"); provided further, however, in making the foregoing determinations:

(1)           neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or any predecessor entity), is the named beneficiary or is otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

(2)           intercompany management fees charged by MDC Holdco or any of its Affiliates (as defined in Section 13.1 hereof) to the Company or any of its subsidiaries, shall not be treated as an expense, unless such fees have been approved by the parties in accordance with this Agreement, and such fees replace an expense that would otherwise be paid by the Company to a third party;

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(3)           any Losses (as defined in Section 7.2 of the Purchase Agreement) of a Purchaser Indemnified Party (as defined in Section 7.2 of the Purchase Agreement) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 of the Purchase Agreement and which are fully assumed by IMS Holdco and/or the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(4)           any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3 of the Purchase Agreement) shall not be treated as an expense;

(5)           there shall be no charge against income for the payment or accrual of any component of any Purchase Price payment pursuant to the Purchase Agreement or any component of any Class B Purchase Price payment;

(6)           the fees and disbursements of the Company's attorneys, accountants and financial advisors incurred prior to or after the Closing (as defined in Section 2.3 of the Purchase Agreement) in connection with the formation and organization of the Company and the negotiation, preparation and execution of the Purchase Agreement and the other documents delivered at such Closing that have either (x) been expensed and paid prior to such Closing or (y) accrued for on the Closing Balance Sheet (as defined in the Purchase Agreement), shall not be treated as an expense;

(7)           the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company's direct or indirect ownership in such subsidiary;

(8)           any extraordinary or unusual gains or losses, gains or losses from the sale of any capital assets, and any gains or losses recognized by the Company or any of its subsidiaries in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries shall be excluded from income;

(9)           the fees and expenses of (1) the Accountants in preparing any Annual Determination and year-end audit, (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder and (3) any preparation of income tax returns, reports and related schedules, in excess of $57,500 in any calendar year, shall not be treated as an expense;

(10)         if the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger of similar transaction (an "Acquired Business") on or after the date of this Agreement, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business unless its inclusion has been agreed to by the Representative (as defined in the Purchase Agreement);

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(11)           any transaction expenses incurred in connection with any potential or contemplated acquisition shall not be included as an expense;

(12)           any write-off or amortization of goodwill or other intangibles arising out of the purchase of the Purchased Units (as defined in the Purchase Agreement) pursuant to the Purchase Agreement shall not be treated as an expense;

(13)           there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price (as defined in the Purchase Agreement) or the Class B Purchase Price under Sections 10.2 and 10.4 of this Agreement;

(14)           the fees and expenses of BDO Seidman LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010 shall not be treated as an expense for the purposes of 2010 PBT;

(15)           any interest costs or transaction fees incurred by the Company or any of its subsidiaries resulting from an MDC Financing shall not be treated as an expense except to the extent incurred by the Company under the MDC Cash Management Program;

(16)           any distribution by IMS Holdco of any Class B Purchase Price proceeds to its members or any employees of the Company pursuant to "phantom equity" documents as disclosed in the Purchase Agreement and in accordance with Section 6.3 of the Purchase Agreement shall not be treated as an expense;

(17)           any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense;

(18)           PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses;

(19)           solely with respect to the calculation of 2010 PBT, an amount equal to $239,404 with respect to expenses incurred during the Pre-Closing Period shall not be treated as an expense;

(20)           for each calendar year in respect of which an Extra Payment (as defined in the Purchase Agreement) is required to be made under the Purchase Agreement, PBT shall be reduced by an amount equal to the Extra Payment made in respect of such calendar year; and

(21)           Notwithstanding anything to the contrary, PBT for calendar year 2009 shall be $9,409,000, without further adjustment.

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(ix)           "Reduction Amount" shall mean (A) with respect to a Call under 10.2(c), an amount equal to (i) (a) in the case of a Call being triggered by the termination of employment of Ingram or Desiree (as each is defined in the Purchase Agreement), 36.5% or (b) in the case of a Call being triggered by the termination of employment of Ron (as defined in the Purchase Agreement), 27% multiplied by (ii) $2,666,667, multiplied by (iii) a fraction, the numerator of which is the number of days in the period commencing on the applicable Date of Termination and ending on December 31, 2012 (such period, with respect to the applicable Call, the "Remaining Period"), and the denominator of which is the number of days in the period commencing as of the Closing Date (as defined in the Purchase Agreement) and ending on December 31, 2012 and (B) with respect to a Call under 10.2(a), an amount equal to zero.

 (x)           "Revenues" during each relevant calendar year of the Measuring Period, shall mean the commissions and fees, mark-ups and hourly charges earned by the Company for work generated or performed by employees or contractors and charged to clients determined in accordance with GAAP; provided, however, that in making such determination, Revenues shall not include any Pass Through of Third Party Costs or Direct Billings of Expenses; provided further, however, that for calendar year 2010, Revenues shall mean the sum of (x) the Revenues earned by IMS Holdco during the Pre-Closing Period and (y) the Revenues earned by the Company and its subsidiaries during the Post-Closing Period.

(xi)           "YP" shall mean the calendar year in which the Call Exercise Notice or the Sale Request Acceptance Notice, as applicable, is delivered.

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

(xiii)         "YP+1" shall mean the calendar year immediately following YP.

(xiv)        "YP-2" shall mean the calendar year immediately preceding YP-1.

(xv)         "Split Percentage" shall mean "Applicable Percentage" as defined in the Purchase Agreement.

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(d)           Accounting Procedures.

(i)            Commencing with calendar year 2010 and for every calendar year thereafter, MDC Holdco shall prepare or, at its discretion, shall cause BDO Seidman LLP or other independent accountant of national standing (the "Accountants") to prepare, in accordance with GAAP, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business on December 31 of each such calendar year, and a related consolidated statement of income of the Company and its subsidiaries, if any, for the relevant calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth for the period under examination the applicable calculation of GAAP PBT and Adjusted GAAP PBT, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4 (the "Annual Determination"); provided, however, upon the exercise of a Call or an Accepted Sale Request pursuant to this Article X, MDC Holdco shall include or, at its discretion, shall cause the Accountants to include, in any Annual Determination with respect to each calendar year during the Measuring Period, (x) the applicable calculations of PBT, Average Annual PBT Growth Rate, Revenues, Average PBT Margin and AM, and (y) all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4.  MDC Holdco shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements and to determine the scope of such audit.  MDC Holdco shall instruct the Accountants to deliver a copy of each Annual Determination to IMS Holdco not later than 120 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of MDC Holdco.

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

(iii)          In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 10.4, then IMS Holdco and MDC Holdco agree to select another mutually acceptable accounting firm to perform the services to be performed under this Section 10.4 by the Independent Auditors.  If IMS Holdco and MDC Holdco fail to select the Independent Auditors as required by clause (i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either IMS Holdco or MDC Holdco may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York. to appoint an independent firm of certified public accountants to perform the services required under this Section 10.4 by the Independent Auditors.  MDC Holdco, on the one hand, and IMS Holdco, on the other hand, shall share the fees of the JAMS equally.  For purposes of this Section 10.4(d) the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this clause (iii).

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

(v)           The books and records of the Company and its subsidiaries shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto and their representatives, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 10.4.  IMS Holdco, on the one hand, and MDC Holdco, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by or for them to support a position that is contrary to the position taken by the other party. Upon the request by IMS Holdco, MDC Holdco shall request that the Accountants make their work papers available to IMS Holdco and its representatives after the completion of any audit of the financial statements of the Company and its subsidiaries and/or to verify the calculations set forth in any Annual Determination (in each case during normal business hours upon reasonable advance notice at the principal offices of the Accountants); provided, however, it is understood that the decision to make such work papers available is solely that of the Accountants.

(e)           Closing.  The closing for each purchase and sale of Units (a "Class B Closing") pursuant to a Call or Accepted Sale Request, as applicable, shall be held at the offices of the Company within 30 days after the delivery of an Exercise Notice or Sale Request Acceptance Notice.  The date on which the respective Class B Closing takes place is referred to in this Agreement as its "Class B Closing Date".  At each Class B Closing, the parties shall execute an Assignment of Unit Agreement in form and substance reasonably acceptable to MDC Holdco and IMS Holdco and an amendment to this Agreement in accordance with Section 14.4 reflecting such transfer and the reallocated Units (including the related portion of the Capital Account).  The transfer of any Units pursuant to this Section 10.4 shall be free and clear of all claims, liens and encumbrances other than as created by the provisions of this Agreement.  Prior to any Class B Closing, the Company and IMS Holdco shall use their best efforts to obtain any required governmental or regulatory approval or approvals.  MDC Holdco shall have the right to postpone any scheduled Class B Closing until any such governmental or regulatory approval is obtained.

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(f)           Class B Purchase Price Payment.  Payment of each component of the Class B Purchase Price shall be made by MDC Holdco in cash by direct wire transfer to such account as IMS Holdco may direct by written notice to the Purchaser given pursuant to this Agreement.  Each component of the Class B Purchase Price shall be deemed to include imputed interest to the extent required by the Code.

(g)           Effect of Events During Period Class B Units Are Issued.  The parties hereto understand and agree that under the terms of each Principal's Employment Agreement with the Company, such Principal may be terminated for "Cause" or "without Cause" (as such terms are defined in the Employment Agreements).  Accordingly, each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any subsidiary of the Company, no party to this Agreement or any Person deriving rights through any such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary of the Company (x) constitutes a breach by MDC Holdco or any of its Affiliates of this Agreement, (y) resulted in an adverse effect on any Class B Purchase Price payment under this Agreement forming the basis for a claim against MDC Holdco or any of its Affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 10.4(d) hereof.  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect the right of IMS Holdco to receive any Class B Purchase Price payment under this Agreement.

(h)           Covenant to Fund.  MDC Partners shall cause sufficient capital to be available to MDC Holdco to meet its obligations to pay the Class B Purchase Price pursuant to Article X of this Agreement.  If MDC Holdco fails to meet its payment obligations under Article X of this Agreement, then MDC Partners shall satisfy such payment obligations to the extent MDC Holdco has failed to do so.

ARTICLE XI

INDEMNIFICATION

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

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

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

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

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Section 11.5         Definitions.  For purposes of this Article XI:

(a)           The term "expenses" includes court costs and attorneys' fees and disbursements;

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

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

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

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

Section 11.7         Nonexclusivity of Rights.  The right to indemnification and the advancement and payment of expenses conferred in this Article XI shall not be exclusive of any other right that a Manager or other Person indemnified pursuant hereto may have or hereafter acquire under any law (common or statutory), provision of the Certificate or this Agreement or otherwise.

ARTICLE XII

ADDITIONAL AGREEMENTS

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

35

ARTICLE XIII

OTHER DEFINITIONS

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

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

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

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

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

"Adjusted GAAP PBT" shall mean, for any calendar (or partial) year, GAAP PBT for such calendar year less (A) (i) with respect to calendar year 2010, $666,667 or (ii) with respect to calendar years 2011 or 2012, $1,000,000; plus (B) in the event that a Principal's employment with the Company shall have been terminated prior to December 31, 2012, an amount equal to the result of (x) the total Reduction Amount applicable to any Call able to be made under Section 10.2(c) in respect of such Principal, times (y) a fraction, the numerator of which is the number of days in the Remaining Period occurring during such calendar year and the denominator of which is the total number of days in the Remaining Period.

"Affiliate" of any Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

"Business Day" shall mean any day on which commercial banks are not authorized or required to close in New York, NY.

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

"Cash Flow" shall mean the consolidated amount of cash in respect of any calendar year of the Company and its subsidiaries that the Board of Managers in its good faith discretion believes is available for distribution to Members of the Company; provided, however, with respect to distributions made in respect of calendar years 2010 through 2014, Cash Flow must be at least an amount necessary to satisfy the distribution required pursuant to Section 3.4(a)(i).

36

"Class A Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(i) to holders of Class A Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class A Units of GAAP PBT under Section 3.5(a) for such prior years.

"Class B Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class B Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class B Units of GAAP PBT under Section 3.5(a) for such prior years.

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

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

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

"Effective Time" shall mean 12:01a.m. on May 1, 2010.

"GAAP PBT" shall mean, for any calendar (or partial) year, the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP, and in accordance with the procedures applicable to such determination set forth in Section 10.4(d) hereof; provided, however, for calendar year 2010, GAAP PBT shall be calculated from and after the Effective Time through December 31, 2010.

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

(i)           Subject to the final sentence of this definition, the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by reference to Section 3.1(b), and as set forth in Section 8 to the Conveyance Document;

37

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

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

(iv)         The Gross Asset Value of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (vi) of the definition of Profits and Losses herein; provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the extent the Managers determine that an adjustment pursuant to clause (ii) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to clauses (i), (ii), or (iv) hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.  It is understood that the Gross Asset Values of each of the assets of the Company on the date of execution of this Agreement shall be determined as set forth in Section 8 of the Conveyance Document.

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

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

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

38

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

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

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

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

"Profits and Losses", shall mean, for each fiscal year, an amount equal to the Company’s taxable income or loss for such fiscal year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

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

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

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

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

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

39

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

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

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 3.3(e) shall be determined by applying rules analogous to those set forth in clauses (i) through (vii) above.

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

"Units" shall mean Class A Units or Class B Units, as applicable.

ARTICLE XIV

MISCELLANEOUS

Section 14.1         Manner of Giving Notice.  Whenever under the provisions of the Act, the Certificate or this Agreement, notice is required to be given to the Company, any Member or Manager of the Company, and no provision is made as to how such notice shall be given, any such notice to be given hereunder shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next Business Day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to MDC Holdco or MDC Partners, to:

MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

40

If to IMS Holdco, to:

c/o BDR Company, LLC

650 Fifth Avenue

New York, New York 10017

Attention: Robert Ingram

with a copy to:

Moses & Singer LLP

405 Lexington Avenue

New York, New York 10174

Attention: Solomon P. Friedman, Esq.

If to the Company, to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

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

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

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

41

Section 14.4         Amendment or Modification.  The power to adopt, alter, amend or repeal this Agreement is vested solely in the Members. Except for the amendments contemplated by Sections 2.1 and 10.4(e), and subject to the provisions of Section 4.1, this Agreement may be altered or amended only by the unanimous vote or unanimous written consent of MDC Holdco and IMS Holdco. The Managers may not adopt, alter, amend or repeal any provision of this Agreement.

Section 14.5         Binding Effect.  Subject to the restrictions on transfer and assignment set forth in Article X of this Agreement, this Agreement is binding on and inures to the benefit of the Members and their respective successors and permitted assigns, including without limitation, any Lender who exercises a default remedy under any agreement entered into in connection with an MDC Financing.

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

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

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

Section 14.9         Currency.  Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.  All payments made hereunder shall be made in United States Dollars.

42

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

MF + P ACQUISITION CO.
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary
INTEGRATED MEDIA SOLUTIONS, LLC
By:	/s/ Robert Ingram
	Name: Robert Ingram
	Title: Chief Executive Officer
INTEGRATED MEDIA SOLUTIONS PARTNERS LLC
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary

43

TABLE OF CONTENTS

ARTICLE I
FORMATION OF LIMITED LIABILITY COMPANY
Section 1.1  Formation	2
Section 1.2  Purpose	2
Section 1.3  Offices; Registered Agent	2
Section 1.4  Filings and Foreign Qualification	2
Section 1.5  Term	2
ARTICLE II
MEMBERS; MEMBERSHIP INTERESTS; UNITS
Section 2.1  Members and Membership Units	2
Section 2.2  Classes of Units	3
Section 2.3  Transfer of Units	3
Section 2.4  Additional Members and Membership Interests	3
Section 2.5  Liability of Member	3
Section 2.6  Limitations on Members	3
Section 2.7  Certification of Units	4
ARTICLE III
CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS
Section 3.1  Capital Account; Capital Contributions	4
Section 3.2  Withdrawal and Return of Capital Contribution	5
Section 3.3  Allocation of Profits and Losses	5
Section 3.4  Distributions	9
Section 3.5  Allocation of GAAP PBT	10
ARTICLE IV
MANAGEMENT
Section 4.2  Authority of Managers	14
Section 4.3  Number and Qualifications of Managers	15
Section 4.4  Election and Term of Service	15
Section 4.5  Removal; Filling of Vacancies	15
Section 4.6  Place of Meetings	15
Section 4.7  Annual Meetings	15
Section 4.8  Regular Meetings	15
Section 4.9  Special Meetings	15
Section 4.10  Quorum of and Action by Managers	16
Section 4.11  Approval or Ratification of Acts or Contracts by Members	16
Section 4.12  Action Without A Meeting	16

i

Section 4.13  Telephone Meetings	16
Section 4.14  Interested Managers and Officers	16
Section 4.15  Manager's Compensation	17
Section 4.16  Time Devoted to Company	17
Section 4.17  Liability of Managers	17
ARTICLE V
MEETINGS OF MEMBERS
Section 5.1  Annual Meetings	17
Section 5.2  Special Meetings	17
Section 5.3  Place of Meetings	17
Section 5.4  Notice of Meetings	18
Section 5.5  Quorum of and Action by Members	18
Section 5.6  Action Without a Meeting	18
Section 5.7  Telephone Meetings	18
ARTICLE VI
OFFICERS
Section 6.1  Officers	19
ARTICLE VII
ACCOUNTING AND TAX MATTERS; REPORTS; BANKING
Section 7.1  Books and Records	19
Section 7.2  Capital Accounts	19
Section 7.3  Tax Matters Partner	20
Section 7.4  Tax Elections	20
Section 7.5  Bank Accounts; Investment of Company Funds	21
Section 7.6  Signature of Negotiable Instruments	21
ARTICLE VIII
COVENANTS OF THE MEMBERS
Section 8.1  Independent Accountants	21
ARTICLE IX
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 9.1  Dissolution	21
Section 9.2  Liquidation	22
Section 9.3  Termination	22
Section 9.4  Claims of the Members	22

ii

ARTICLE X
RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS
Section 10.1  Assignment by the Members	23
Section 10.3  Binding Obligations Upon Exercise of a Put or a Call	25
ARTICLE XI
INDEMNIFICATION
Section 11.1  Indemnification of Managers and Members	33
Section 11.2  Others	34
Section 11.3  Insurance and Other Arrangements	34
Section 11.4  Report to Members	34
Section 11.5  Definitions	35
Section 11.6  Severability	35
Section 11.7  Nonexclusivity of Rights	35
ARTICLE XII
ADDITIONAL AGREEMENTS
Section 12.1  Integrated Media Solutions Name	35
ARTICLE XIII
OTHER DEFINITIONS
Section 13.1  Other Definitions	36
ARTICLE XIV
MISCELLANEOUS
Section 14.1  Manner of Giving Notice	40
Section 14.2  Waiver of Notice	41
Section 14.3  No Company Seal	41
Section 14.4  Amendment or Modification	42
Section 14.5  Binding Effect	42
Section 14.6  Governing Law; Severability	42
Section 14.8  Counterparts	42
Section 14.9  Entire Agreement	42
Section 14.9  Entire Agreement	42

iii

INDEX OF DEFINED TERMS

AAA	33
Accepted Sale Request	25
Accountants	32
Acquired Business	30
Act	2
Adjusted Capital Account Deficit	37
Adjusted GAAP PBT	37
Affiliate	38
Agreement	1
AM	27
Annual Determination	32
AP	28
Applicable Percentage	28
Average Annual PBT Growth Rate	28
Average PBT Margin	28
Business	1
Business Day	38
Call	24
Call Exercise Notice	24
Call Period	24
Capital Account	20
Capital Contribution	38
Cash Flow	38
Certificate	2
Class A Distribution Shortfall Amount	38
Class B Closing	34
Class B Closing Date	34
Class B Distribution Shortfall Amount	38
Class B Purchase Price	27
Code	38
Company Minimum Gain	38
Conveyance Document	1
Date of Termination	26
Departing Principal	26
Depreciation	38
Direct Billings of Expenses	28
draw	10
Effective Time	39
Employment Agreements	4
expenses	36

iv

Final Class B Payment	27
First Payment	27
GAAP	20
GAAP PBT	39
Gross Asset Value	39
IMS Holdco	1
Independent Auditors	32
JAMS	33
Lender	14
Loss Account	11
Manager	36
MDC Cash Management Program	14
MDC Financing	14
MDC Holdco	1
MDC Internal Transfer	12
MDC Partners	12
MDC Sale	12
Member	1
Member Nonrecourse Debt	40
Member Nonrecourse Debt Minimum Gain	40
Member Nonrecourse Deductions	40
Members	1
Membership Interest	40
Nonrecourse Deductions	40
Nonrecourse Liability	40
Original Operating Agreement	1
Other Entity	35
Pass Through of Third Party Costs	28
PBT	28
Person	40
proceeding	36
Profits and Losses	40
Prospective Purchaser	26
Purchase Agreement	1
Purchase Consideration Value	5
Purchase Transaction	1

v

Reconciliation Period	32
Reduction Amount	31
Regulatory Allocations	7
Remaining Period	31
Remaining Principals	26
Revenues	31
Sale Request	25
Sale Request Acceptance Notice	25
Sale Request Condition	25
Sale Request Notice	25
Sale Request Period	25
Second Payment	27
serving at the request of the Company	36
Tax Distributions	10
Third Party Offer Notice	26
TMP	21
Treasury Regulations	41
Unit Capital Account	21
Units	41
Waiting Period	26
YP	31
YP+1	31
YP-1	31
YP-2	31

vi

Schedule 2.1

Members and Membership Units

MF + P Acquisition Co.: 750 Class A Units

Integrated Media Solutions, LLC: 250 Class B Units

i

EX-12 8 v183284_ex12.htm

Exhibit 12

Statement of Computation of Ratio of Earnings to Fixed Charges

	Three Months Ended March 31,
	2010			2009
	(000’s)			(000’s)
Earnings:
Income (loss) from continuing operations attributable to MDC Partners Inc.	$	(10,186	)	$	281
Additions:
Income tax expense		249			615
Noncontrolling interest in income of consolidated subsidiaries		968			382
Fixed charges, as shown below		8,302			5,319
Distributions received from equity-method investees		7			—
		9,526			6,316
Subtractions:
Equity in income (loss) of investees		(104	)		93
Noncontrolling interest in earnings of consolidated subsidiaries that have not incurred fixed charges		—			—
		(104	)		93
Earnings as adjusted	$	(556	)	$	6,504
Fixed charges:
Interest on indebtedness, expensed or capitalized		6,377			3,443
Amortization of debt discount and expense and premium on indebtedness, expensed or capitalized		651			318
Interest within rent expense		1,274			1,558
Total fixed charges	$	8,302		$	5,319
Ratio of earnings to fixed charges		N/A			1.22
Fixed charge deficiency		8,858			N/A

EX-31.1 9 v183284_ex31-1.htm

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, Miles S. Nadal, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ MILES S. NADAL
		Miles S. Nadal
		Title: Chairman, Chief Executive Officer and President

EX-31.2 10 v183284_ex31-2.htm

Exhibit 31.2

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, David B. Doft, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ DAVID B. DOFT
		David B. Doft Title: Chief Financial Officer

EX-32.1 11 v183284_ex32-1.htm

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Miles S. Nadal, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010

By:	/s/ MILES S. NADAL
	Miles S. Nadal Title: Chairman, Chief Executive Officer and President

EX-32.2 12 v183284_ex32-2.htm

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David B. Doft, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010
By:	/s/ DAVID B. DOFT
	David B. Doft Title: Chief Financial Officer

EX-99.1 13 v183284_ex99-1.htm

Exhibit 99.1

MDC PARTNERS INC.

SCHEDULE OF CURRENT AND POTENTIAL MARKETING

COMMUNICATIONS COMPANY OWNERSHIP

Company	% Owned at 3/31/10			Year of Initial Investment	Put/Call Options
					2010			Thereafter
					(See Notes)
Consolidated:
Strategic Marketing Services
Allard Johnson Communications Inc.		74.0	%	1992		89.0	%	Note 1
Attention Partners LLC		51.0	%	2009		—		Note 2
Bruce Mau Design Inc.		50.1	%	2004		—
Colle & McVoy, LLC		95.0	%	1999		—		Note 3
Crispin Porter & Bogusky, LLC		100.0	%	2001		—
Company C Communications LLC		90.0	%	2000		—		Note 4
Fearless Progression, LLC		51.0	%	2010		75.0	%	Note 5
Fletcher Martin, LLC		85.0	%	1999		100.0	%	Note 6
Hello Design, LLC		49.0	%	2004		—
henderson bas partnership		65.0	%	2004		100.0	%
HL Group Partners, LLC		65.9	%	2007		—		Note 7
kirshenbaum bond senecal & partners, LLC		100.0	%	2004		—
Mono Advertising, LLC		49.9	%	2004		54.9	%	Note 8
Redscout, LLC		60.0	%	2007		—		Note 9
Skinny NYC, LLC		50.1	%	2008		—		Note 10
Veritas Communications Inc.		64.1	%	1993		78.4	%	Note 11
Vitro Robertson, LLC		77.0	%	2004		—		Note 12
Yamamoto Moss Mackenzie		100.0	%	2000		—
Zig Inc.		76.1	%	2004		88.4	%	Note 13
Zyman Group, LLC		94.1	%	2005		—		Note 14
Performance Marketing Services
Accent Marketing Services, LLC		100.0	%	1999		—
Accumark Communications Inc.		55.0	%	1993		61.7	%	Note 15
Bryan Mills Iradesso Corp.		62.8	%	1989		88.2	%	Note 16
Communifx Partners, LLC		75.0	%	2010				Note 17
Computer Composition of Canada Inc.		100.0	%	1988		—
Northstar Research Partners Inc.		70.0	%	1998		—		Note 18
Onbrand		89.0	%	1992		—
Shout Media LLC		51.0	%	2010
Source Marketing, LLC		83.0	%	1998		—		Note 19
TargetCom, LLC		100.0	%	2000		—		Note 20
Team Holdings LLC		60.0	%	2010				Note 21
Equity Accounted:
Adrenalina, LLC		49.9	%	2007		—		Note 22

Notes

(1) MDC has the right to increase its ownership interest in Allard Johnson Communications Inc. through acquisition of an incremental interest, and the other holders have the right to put to MDC the same incremental interest up to 89% of this entity in 2010 and 100% only upon termination.

(2) Attention Partners LLC is owned by HL Group Partners, LLC. HL Group Partners, LLC has the right to increase its ownership in Attention Partners, LLC through acquisitions of incremental interests, and the other interest holders has the right to put to HL Group Partners, LLC the same incremental interests up to 100% only upon termination.

(3) MDC has the right to increase its economic ownership in Colle & McVoy, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(4) MDC has the right to increase its economic ownership in Company C Communications, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012. Effective October 1, 2008, Company C is operated as a division of kirshenbaum bond & partners, LLC.

(5) MDC has the right to increase its economic ownership in Fearless Progression, LLC through acquisitions of incremental interests, up to 75% of this entity in 2010, and up to 100% in 2011.

(6) Effective January 1, 2010, MDC acquired the remaining 15% membership interest; however, in conjunction with the step-up in Trendcore, which was merged into Fletcher Martin, LLC, a 15% profits interests was issued.

(7) MDC has the right to increase its ownership in HL Group Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 72.4% of this entity in 2012, up to 82.62% in 2013 and up to 93.73% in 2014. Effective January 25, 2010, MDC acquired an additional 1% membership interest in HL Group Partners, LLC.

(8) MDC has the right to increase its ownership in Mono Advertising, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 54.9% of this entity in 2010, up to 60.0% in 2011, up to 65.0% in 2012, up to 70.0% in 2013 and up to 75.0% in 2014.

(9) MDC has the right to increase its ownership in Redscout, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 80% of this entity in 2012.

(10) MDC has the right to increase its ownership in Skinny NYC, LLC through acquisition of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 60.1% of this entity in 2014, up to 70.1% of this entity in 2015 and up to 80.1% of this entity in 2016.

(11) MDC has the right to increase its ownership in Veritas Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 78.4% of this in 2010, up to 81.5% in 2011, up to 95.1% in 2012 and up to 100% in 2013.

(12) MDC has the right to increase its ownership in Vitro Robertson, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 95% of this entity in 2011, up to 97.5% in 2012 and up to 100% in 2013.

(13) MDC has the right to increase its ownership in Zig Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 88.4% of this entity in 2010, and up to 90.45% of this entity in 2012.

(14) As of March 31, 2010, MDC’s economic interest in Zyman Group, LLC was 100% of profits as its priority return is not expected to be exceeded. In January 2009, Zyman Group, LLC has become an operating division of kirshenbaum bond & partners, LLC.

(15) MDC has the right to increase its ownership in Accumark Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up to 61.7% of this entity in 2010, up to 68.3% in 2011 and up to 75.0% in 2012. MDC’s current economic interest is 42%.

(16) MDC has the right to increase its ownership in Bryan Mills Iradesso, Corp. through acquisition of an incremental interest, and the other interest holders have the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(17) MDC has the right to increase its ownership in Communifx Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(18) MDC has the right to increase its ownership in Northstar Research Partners Inc. through acquisitions of incremental interests, and the other holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(19) MDC has the right to increase its ownership in Source Marketing, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up 87.1% of this entity in 2011 and 91.3% in 2012 and 100% in 2013.

(20) Effective January 1, 2009, Targetcom LLC is operating as a division of Accent Marketing Services, LLC.

(21) MDC has the right to increase its ownership in Team Holdings, LLC, through acquisition of an incremental interest,  up to 100% of this entity in 2013.

(22) MDC has the right to increase its ownership in Adrenalina, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 61% of this entity in 2013, up to 72% in 2014 and up to 82% in 2015.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.2.1

Exhibit 10.2.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT

by and among

MDC ACQUISITION INC.,

WWG, LLC,

TODD GRAHAM,

KEVIN BERG,

VINCENT PARINELLO,

DANIEL K. GREGORY,

STEPHEN GROTH

and

SEAN M. O'TOOLE

Dated as of March 1, 2010

MEMBERSHIP INTEREST PURCHASE AGREEMENT

MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") dated as of March 1, 2010, by and among MDC ACQUISITION INC., a Delaware corporation (the "Purchaser"), WWG, LLC, a Florida limited liability company ("WWG"), TODD GRAHAM ("Graham"), KEVIN BERG ("Berg"), VINCENT PARINELLO ("Parinello"), DANIEL K. GREGORY ("Gregory"), STEPHEN GROTH ("Groth"), and SEAN M. O'TOOLE ("O'Toole"; and together with Graham, Berg, Parinello, Gregory and Groth, collectively, the "Principals", and individually a "Principal") and solely for purposes of Sections 7.6.6 and 8.19, MDC Partners Inc., a corporation existing under the laws of Canada ("MDC").

WITNESSETH:

WHEREAS, WWG was (x) the sole shareholder of TEAM Enterprises Inc. a Massachusetts corporation ("TEAM") and (y) the sole member of (A) OuterActive, LLC, a Delaware limited liability company ("O-A") and (B) Pulse Marketing, LLC, a Delaware limited liability company ("Pulse");

WHEREAS, WWG formed NEW TEAM LLC, a Delaware limited liability company ("NT"), as its sole member;

WHEREAS, WWG caused TEAM to contribute substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business, to NT pursuant to a Contribution Agreement (General Assignment, Bill of Sale and Assumption Agreement) (the "NT Conveyance Document");

WHEREAS, WWG and WWG2, LLC, a Florida limited liability company ("WWG2") formed (the "Formation") TEAM HOLDINGS LLC, a Delaware limited liability company (the "Company"), with WWG owning 99% of the issued and outstanding membership interests in the Company and WWG2 owning 1% of the issued and outstanding membership interests in the Company (the membership interests of the Company collectively referred to as the "Membership Interests");

WHEREAS, simultaneously with the Formation, WWG and WWG2 executed and delivered a Limited Liability Company Agreement of the Company (the "Original Operating Agreement"), pursuant to which WWG transferred 100% of its equity ownership in (x) NT, (y) O-A and (z) Pulse to the Company, such that following such transfer, the Company was the sole member of each of NT, O-A and Pulse (NT, O-A and Pulse hereinafter referred to collectively as the "Subsidiaries", and individually as a "Subsidiary");

WHEREAS, WWG desires to sell, and the Purchaser desires to purchase, 60% of the Membership Interests (the "Purchased Interests"), pursuant to the provisions of this Agreement such that after giving effect to such purchase, the Membership Interests will be owned as follows: the Purchaser – 60%; WWG – 39%; and WWG2 – 1%;

WHEREAS, simultaneously with the execution and delivery of this Agreement, the Purchaser, WWG, WWG2 and the Company are executing and delivering an Amended and Restated Limited Liability Company Agreement of the Company (the "Operating Agreement") attached hereto as Exhibit A (pursuant to which the Purchased Interests shall be redesignated as "Class A Units" and the Membership Interests owned by WWG and WWG2 shall be redesignated as "Class B Units" and/or "Class C Units");

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE I

SALE OF THE PURCHASED INTERESTS

Section 1.1      Sale of the Purchased Interests.   Subject to the terms and conditions herein stated, WWG agrees to sell, assign, transfer and deliver to the Purchaser on the Closing Date (as defined in Section 2.2), and the Purchaser agrees to purchase from WWG on the Closing Date, the Purchased Interests.

ARTICLE II

PURCHASE PRICE AND CLOSING

Section 2.1      Purchase Price; Working Capital Adjustment.

2.1.1        Purchase Price.  In full consideration for the purchase by the Purchaser of the Purchased Interests, the purchase price (the "Purchase Price"), shall be calculated and paid by the Purchaser to WWG, as set forth below (capitalized terms used in this Article II and not otherwise defined, shall have the meaning ascribed to such terms in Sections 2.1.2 or 2.1.3 below):

(a)       Closing Payment.  At the Closing, the Purchaser shall pay to WWG an amount equal to $11,000,000 ("CP").

(b)      Working Capital Payment.  If the Closing Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.4, is less than the Target Working Capital (such difference being referred to herein as the "Working Capital Shortfall"), then within five business days after the Special Determination (as defined in Section 2.1.4(i) below) and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.4, (A) WWG shall pay to the Purchaser 60% of the Working Capital Shortfall and (B) immediately thereafter, WWG, WWG2 and the Purchaser shall contribute to the capital of the Company as a contribution to capital, 39% by WWG, 1% by WWG2 and 60% by the Purchaser, respectively, of the Working Capital Shortfall.  If WWG fails to make the payment referred to in (A) above or if WWG or WWG2 fails to make the contribution referred to in (B) above, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset such amount against any future Purchase Price payments to WWG.  If the Closing Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.4, is greater than Target Working Capital, within five days after the Special Determination and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.4, the Company shall make a distribution to WWG in the amount of the difference between Target Working Capital and the Closing Date Working Capital. Any amount paid pursuant to this Section 2.1.1(b) shall be referred to as the "Working Capital Payment."

2

(c)       First Interim Payment. Provided that WWG shall not have validly made a FIP Prepayment Election (as defined in Section 2.1.1(h) below), within five business days after the Annual Determination for calendar year 2010 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall pay to WWG the First Interim Payment ("FIP"), calculated as follows:

FIP shall equal the lesser of:

(A)     $5,000,000

and

(B)      {60% x [5.0 x (2009 PBT + 2010 PBT)]} – {CP}

                                                      2

(d)      First Additional Payment. Within five business days after the Annual Determination for calendar year 2010 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall pay to WWG the First Additional Payment ("FAP"), calculated as follows:

FAP = 90% x (2010 Adjusted Profits x 40%)

; provided, however, in the event that 2010 Adjusted Profits is less than the result of (x) $1,833,333 divided by (y) 60%, then FAP shall equal (A) the excess, if any, of (i) 2010 Adjusted Profits over (ii) $1,833,333, multiplied by (B) 90%.

(e)       Final Interim Payment. Provided that WWG shall not have validly made a FIIP Prepayment Election (as defined in Section 2.1.1(h) below), within five business days after the Annual Determination for calendar year 2011 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall, subject to Section 2.1.1(i) below, pay to WWG the Final Interim Payment ("FIIP"), calculated as follows:

3

(A)     In the event both:

(x) (2009 PBT + 2010 PBT) is equal to or greater than $6,333,333

                                    2

and

(y) 2011 PBT is equal to or greater than {90% x (2009 PBT + 2010 PBT)},

                       2

then:

FIIP = {$19,000,000} – {CP + FIP}

or

(B)      In the event

(x) (2009 PBT + 2010 PBT) is less than $6,333,333

                        2

or

(y) 2011 PBT is less than {90% x (2009 PBT + 2010 PBT)},

          2

then:

FIIP = {60% x [4.5 x (2009 PBT + 2010 PBT + 2011 PBT)]} – {CP + FIP}

                                     3

(f)       Second Additional Payment. Within five business days after the Annual Determination for calendar year 2011 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall pay to WWG the Second Additional Payment ("SAP"), calculated as follows:

SAP = 90% x (2011 Adjusted Profits x 40%)

; provided, however, in the event that 2011 Adjusted Profits is less than the result of (x) the sum of (i) $2,200,000 plus (ii) (FIP times 20%), divided by (y) 60%, then SAP shall equal (A) the excess, if any, of (i) 2011 Adjusted Profits over (ii) the sum of (X) $2,200,000 plus (Y) (FIP times 20%), multiplied by (B) 90%;

; provided further, however, in the event that 2010 Adjusted Profits were less than $1,833,333, then for purposes of the calculations of SAP above, 2011 Adjusted Profits shall be reduced by the amount of such shortfall.

4

(g)      Final Additional Payment.  Within five business days after the Annual Determination for calendar year 2012 and any adjustments thereto shall have become binding on the parties as provided in Section 2.1.4 below, the Purchaser shall pay to WWG the Final Additional Payment ("FIAP"), calculated as follows:

FIAP = 90% x (2012 Adjusted Profits x 40%)

; provided, however, in the event that 2012 Adjusted Profits is less than the result of (x) the sum of (i) $2,200,000 plus (ii) (FIP times 20%), plus (iii) (FIIP times 20%), divided by (y) 60%, then FIAP shall equal (A) the excess, if any, of (i) 2012 Adjusted Profits over (ii) the sum of (X) $2,200,000, plus (Y) (FIP times 20%) plus (Z) (FIIP times 20%), multiplied by (B) 90%;

; provided further, however, in the event that the sum of 2010 Adjusted Profits and 2011 Adjusted Profits were less than the sum of (I) $4,033,333 plus (II) (FIP times 20%), then for purposes of the calculations of FIAP above, 2012 Adjusted Profits shall be reduced by the amount of such shortfall.

(h)      Prepayment Elections.  In the event that changes in United States long-term capital gains tax rates are established which result in either an (x) increase in 2011 long-term capital gains rates from 2010 rates (a "2011 Rate Increase") or (y) an increase in 2012 long-term capital gains rates from 2010 rates or 2011 rates (a "2012 Rate Increase"), WWG shall have the option to elect to receive a prepayment of the FIP (a "FIP Prepayment Election"), in the case of a 2011 Rate Increase, or to receive a prepayment of the FIIP (a "FIIP Prepayment Election"; the FIP Prepayment Election and the FIIP Prepayment Election are sometimes referred to herein as a "Prepayment Election"),  in the case of a 2012 Rate Increase, as follows:

(A)       To exercise a Prepayment Election, (i) WWG shall deliver notice to the Purchaser on or prior to December 10, 2010, in the case of a FIP Prepayment Election, or on or prior to December 10, 2011, in the case of a FIIP Prepayment Election and (ii) WWG shall have timely and fully delivered the 2010 Financial Information or the 2011 Financial Information, as the case may be.

(B)       If a FIP Prepayment Election is validly exercised, then on or prior to December 31, 2010, the Purchaser shall pay to WWG an amount (the "FIP Prepayment") equal to the result of (x) the Estimated FIP divided by (y) the sum of (i) one plus (ii) the MDC Cost of Funds Rate (as defined in Section 2.1.3(vii) below) divided by 4.  Within five business days after the Annual Determination for 2010 and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.4 below, (i) if FIP (as calculated pursuant to Section 2.1.1(c) above using actual 2010 PBT) is greater than Estimated FIP, then the Purchaser shall pay WWG such excess, or (ii) if Estimated FIP is greater than FIP (as calculated pursuant to Section 2.1.1(c) above using actual 2010 PBT), then WWG shall pay the Purchaser such excess.  If WWG fails to pay any amount required to be paid by it to the Purchaser, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset such amount against any future Purchase Price payments to WWG.

5

(C)       If a FIIP Prepayment Election is validly exercised, then on or prior to December 31, 2011, the Purchaser shall pay to WWG an amount (the "FIIP Prepayment") equal to the result of (x) the Estimated FIIP divided by (y) the sum of (i) one plus (ii) the MDC Cost of Funds Rate divided by 4.  Within five business days after the Annual Determination for 2011 and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.4 below, (i) if FIIP (as calculated pursuant to Section 2.1.1(e) above using actual 2011 PBT) is greater than Estimated FIIP, then the Purchaser shall, subject to Section 2.1.1(i), pay WWG such excess, or (ii) if Estimated FIIP is greater than FIIP (as calculated pursuant to Section 2.1.1(e) above using actual 2011 PBT), then WWG shall pay the Purchaser such excess.  If WWG fails to pay any amount required to be paid by it to the Purchaser, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset such amount against any future Purchase Price payments to WWG.

(D)       In the event that a Prepayment Election is made, (i) FIP as ultimately determined pursuant to clause (B) above shall be the value for "FIP" and (ii) FIIP as ultimately determined pursuant to clause (C) shall be the value for "FIIP" for purposes of making other calculations of Purchase Price that rely on FIP or FIIP, as the case may be.

(i)       Purchase Price Cap. Notwithstanding the foregoing, in no event shall the sum of the CP, FIP (inclusive of any Estimated FIP) and FIIP (inclusive of any Estimated FIIP) be greater than $19,000,000.

(j)       No Negative Payments. In the event that the calculation of FIP, FAP, FIIP, SAP or FIAP, as the case may be, results in an amount which is less than zero, such Purchase Price component shall be deemed to be zero and accordingly, the amount of FIP, FAP, FIIP, SAP or FIAP, as the case may be, included in any Purchase Price calculation, shall be zero

(k)      Payment of the Purchase Price.Payment of each component of the Purchase Price and any payment that is required to be made under Section 2.1 above shall be made in United States Dollars by the Purchaser by direct wire transfer to the account of WWG, as set forth on Schedule 2.1.1 (or to such other account as WWG may notify the Purchaser in writing).  Each of the FIP, FAP, FIIP, SAP or FIAP (including amounts payable pursuant to the Prepayment Election provisions of Section 2.1.1(h) above), as the case may be, shall be deemed to include imputed interest, to the extent required by the Internal Revenue Code of 1986, as amended (the "Code").

2.1.2       PBT.   The term "PBT" for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries, if any, before provision for all federal, state and local income and franchise taxes for such period, determined in accordance with United States generally accepted accounting principles consistently applied ("GAAP"); provided, however, for calendar year 2010, 2010 PBT shall mean the sum of (x) the consolidated PBT of WWG, TEAM, O-A and Pulse from January 1, 2010 through and including the Closing Date (the "Pre-Closing Period") and (y) the consolidated PBT of the Company and its subsidiaries, if any, after the Closing Date through and including December 31, 2010 (the "Post-Closing Period"); and provided that in making such determinations:

6

(i)             neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or TEAM, O-A or Pulse for the Pre-Closing Period), is the named beneficiary or otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

(ii)            for any service rendered or provided to the Company or any Subsidiary thereof by MDC or any of its affiliates (as defined in Section 9.5) (it being understood that except as provided below, no such service shall be rendered or provided without the consent of the Representative (as defined in Section 8.18) while he is still in the full-time employ of the Company or any Subsidiary, and in the event the Representative is not so employed, one of the other Principals, provided that such Principal is then in the full-time employ of the Company or any Subsidiary, or in the event no Principals are so employed, a then senior member of management of the Company or a Subsidiary (in any such case, each such individual being referred to as the "Authorized Officer")), the Company or its subsidiary, as the case may be, shall be charged at the rates agreed to by MDC or one of its affiliates, as the case may be, and the Authorized Officer; and all charges permitted by this clause (ii) shall be treated as an expense;

(iii)           any Losses (as defined in Section 7.2) of a Purchaser Indemnified Party (as defined in Section 7.2) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 and which are fully assumed by WWG and the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(iv)           any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3) shall not be treated as an expense;

(v)            there shall be no charge against income for the payment or accrual of any component of the Purchase Price;

(vi)           the fees and disbursements of WWG's attorneys, accountants and financial advisors incurred prior to or after the Closing in connection with the formation and organization of the Company and the Subsidiaries and the negotiation, preparation and execution of this Agreement and the other documents to be delivered at the Closing hereunder that have either (x) been expensed and paid prior to the Closing or (y) accrued for on the Closing Balance Sheet (as defined in Section 2.1.4(i) hereof), shall not be treated as an expense;

(vii)          the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company's direct or indirect ownership in such subsidiary;

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(viii)         any extraordinary or non-recurring gains or losses and any gains or losses from the sale of any capital assets, and any gains and losses recognized by the Company or any of its subsidiaries, if any, in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries, if any, shall be excluded from income;

(ix)           the fees and expenses of (1) the Accountants (as defined in Section 2.1.4(i) hereof) in preparing the Special Determination or any Annual Determination or (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder, in excess of $50,000 in any calendar year, shall not be treated as an expense;

(x)            in the event that the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger or similar transaction (an "Acquired Business") on or after the date hereof, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business;

(xi)           any write-off or amortization or depreciation of goodwill arising out of the purchase of the Purchased Interests pursuant to this Agreement shall not be treated as an expense;

(xii)          there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price;

(xiii)         the fees and expenses of Grant Thornton LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010, up to $85,000 shall not be treated as an expense for purposes of 2010 PBT;

(xiv)         any distribution by WWG of any Purchase Price proceeds to its members shall not be treated as an expense;

(xv)          any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense, unless the termination of such Principal's employment was recommended and initiated by the Representative (as defined in Section 8.18 below);

(xvi)         PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses; and

(xvii)        solely with respect to the calculation of 2010 PBT, an amount equal to $459,129 shall not be treated as an expense.

2.1.3        Other Definitions.

(i)            "Target Working Capital" means an amount equal to $1,000,000.

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(ii)            "Closing Date Working Capital" means the current assets of the Company and the Subsidiaries less the current liabilities of the Company and the Subsidiaries as of the opening of business on March 1, 2010 in accordance with GAAP.

(iii)           "2010 Financial Information" means the following financial information prepared by WWG with respect to the Company and its subsidiaries for calendar year 2010, and delivered to the Purchaser on or prior to December 10, 2010: (x) a consolidated balance sheet of the Company and its subsidiaries as at November 30, 2010 and the related statement of income for the month of November and the eleven months then ended and (y) a good faith reasonable forecasted statement of income for the 2010 calendar year, including the Company's estimate of (A) 2010 PBT ("WWG’s Estimated 2010 PBT") and (B) Estimated FIP, each such estimate to be based upon such financial statements included within the 2010 Financial Information.

(iv)           "2011 Financial Information" means the following financial information prepared by WWG with respect to the Company and its subsidiaries for calendar year 2011, and delivered to the Purchaser on or prior to December 10, 2011: (x) a consolidated balance sheet of the Company and its subsidiaries as at November 30, 2011 and the related statement of income for the month of November and the eleven months then ended and (y) a good faith reasonable forecasted statement of income for the 2011 calendar year, including the Company's estimate of (A) 2011 PBT ("WWG’s Estimated 2011 PBT") and (B) Estimated FIIP, each such estimate to be based upon such financial statements included within the 2011 Financial Information.

(v)            "Estimated FIP" means an amount equal to (x) the amount of FIP as calculated pursuant to Section 2.1.1(c) that would have been payable if 2010 PBT were equal to the Estimated 2010 PBT times (y) 85%.

(vi)           "Estimated FIIP" means an amount equal to (x) the amount of FIIP as calculated pursuant to Section 2.1.1(e) that would have been payable if 2011 PBT were equal to the Estimated 2011 PBT times (y) 85%.

(vii)          "MDC Cost of Funds Rate" means 12%.

(viii)         "Adjusted Profits" means, for any year, the result of (i) GAAP PBT (as defined and calculated pursuant to the Operating Agreement) for such year, minus (ii) all Acquisition Company PBT (as defined and calculated pursuant to the Operating Agreement) for such year plus (iii) any Acquisition Free Cash Flow (as defined and calculated pursuant to the Operating Agreement) for such year.

(ix)           "2009 PBT" shall mean, for calendar year 2009, the sum of (x) the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal and state income taxes for such period, determined in accordance with GAAP and as reported in the Company's 2009 audited consolidated financial statements, plus (y) $875,189.

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2.1.4        Accounting Procedures.

(i)            The Purchaser shall, or shall cause BDO Seidman LLP, or another independent accounting firm chosen by the Purchaser (the "Accountants"), as soon as practicable after the Closing, to prepare in accordance with GAAP and deliver to the Representative, a report containing a consolidated balance sheet of the Company and the Subsidiaries as of the close of business on the Closing Date and taking into account the transactions effected by the Formation and the NT Conveyance Document (the "Closing Balance Sheet"), together with a statement of the Accountants based upon such report which sets forth the Closing Date Working Capital (the "Special Determination").  If the Purchaser engages the Accountants, the Purchaser shall have the option, in its sole discretion (and at its sole expense) to instruct the Accountants to audit or perform agreed upon procedures on the Closing Balance Sheet and to determine the scope of such audit or procedures.  If the Representative does not agree that the Special Determination correctly states the Closing Date Working Capital, the Representative shall promptly (but not later than 30 days after the delivery to him of the Special Determination) give written notice to the Purchaser of any exceptions thereto (in reasonable detail describing the nature of the disagreement asserted).  If the Representative and the Purchaser reconcile their differences, the Closing Date Working Capital calculation shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  If the dispute relates to an accounting issue and if the Representative and the Purchaser are unable to reconcile their differences in writing within 20 days after written notice of exceptions is delivered to the Purchaser (the "Reconciliation Period"), the accounting items in dispute shall be submitted to a mutually acceptable accounting firm (other than the Accountants) selected from any of the four largest accounting firms in the United States in terms of gross revenues (the "Independent Auditors") for final determination.  The Closing Date Working Capital calculation shall be deemed adjusted in accordance with the determination of the Independent Auditors and shall become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  The Independent Auditors shall consider only the accounting items in dispute and shall be instructed to act within 20 days (or such longer period as the Representative and the Purchaser may agree) to resolve all accounting items in dispute.  If the dispute involves a non-accounting issue and such dispute cannot be reconciled within the Reconciliation Period, the dispute shall be settled by a court of competent jurisdiction.  If the Representative does not give written notice of any exception within 30 days after the delivery to it of the Special Determination or if the Representative gives written notification of his acceptance of the Closing Date Working Capital prior to the end of such 30 day period, the Closing Date Working Capital set forth in the Special Determination shall thereupon become binding, final and conclusive upon all the parties hereto and enforceable in a court of law.

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(ii)            As soon as reasonably practicable after receiving WWG's Estimated 2010 PBT or WWG’s Estimated 2011 PBT, as the case may be, the Purchaser shall use its reasonable best efforts to review such calculation.  If the Purchaser does not agree with WWG's Estimated 2010 PBT or WWG’s Estimated 2011 PBT, as the case may be, the Purchaser shall promptly give written notice to the Representative of any exceptions thereto and provide its calculation of Estimated 2010 PBT or Estimated 2011 PBT, as the case may be (the "Purchaser's Estimated 2010 PBT" or the "Purchaser's Estimated 2011 PBT").  If the Representative and the Purchaser reconcile their differences prior to (x) December 24, 2010 with respect to Estimated 2010 PBT, such agreed upon calculation shall be deemed to be Estimated 2010 PBT for purposes of calculating Estimated FIP or (y) December 24, 2011 with respect to Estimated 2011 PBT, such agreed upon calculation shall be deemed to be Estimated 2011 PBT for purposes of calculating Estimated FIIP.  If the Purchaser and the Representative are unable to reconcile their differences prior to (x) December 24, 2010 with respect to Estimated 2010 PBT, then there shall be deemed to be no agreement between the Purchaser and the Representative with respect to such calculation and the Purchaser's Estimated 2010 PBT shall be deemed to be Estimated 2010 PBT for purposes of calculating Estimated FIP or (y) December 24, 2011 with respect to Estimated 2011 PBT, then there shall be deemed to be no agreement between the Purchaser and the Representative with respect to such calculation and the Purchaser's Estimated 2011 PBT shall be deemed to be Estimated 2011 PBT for purposes of calculating Estimated FIIP.   If the Purchaser does not give written notice of any exception to WWG’s Estimated 2010 PBT prior to December 24, 2010 or if the Purchaser gives written notification of its acceptance of WWG’s Estimated 2010 PBT prior to December 24, 2010, WWG’s Estimated 2010 PBT shall be deemed to be Estimated 2010 PBT for purposes of Estimated FIP. If the Purchaser does not give written notice of any exception to WWG’s Estimated 2011 PBT prior to December 24, 2011 or if the Purchaser gives written notification of its acceptance of WWG’s Estimated 2011 PBT prior to December 24, 2011, WWG’s Estimated 2010 PBT shall be deemed to be Estimated 2011 PBT for purposes of Estimated FIIP.

(iii)           The Purchaser shall prepare, or cause the Accountants to prepare, as soon as practicable after the end of the calendar years 2010, 2011 and 2012, to prepare in accordance with GAAP, a report containing consolidated balance sheets of the Company and its subsidiaries, if any, as of the close of business on December 31, 2010, December 31, 2011 and December 31, 2012, and related consolidated statements of income of the Company and its subsidiaries, if any, for each calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth the calculation of PBT and Profits for calendar years 2010, 2011 and 2012, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 2.1.4(iii) (the "Annual Determination").  For avoidance of doubt, the Annual Determination for calendar year 2010 shall include PBT of TEAM, O-A and Pulse for the Pre-Closing Period.  If the Purchaser engages the Accountants, the Purchaser shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements for any period and to determine the scope of such audit.  The Purchaser shall deliver, or shall instruct the Accountants to deliver, a copy of each such Annual Determination to the Representative not later than 150 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of the Purchaser.

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(iv)          If the Representative does not agree that the Annual Determination correctly states the calculation of PBT and/or Profits for calendar years 2010, 2011 and 2012, as applicable, the Representative shall promptly (but not later than 30 days after the delivery of such Annual Determination to the Representative) give written notice to the Purchaser of any exceptions thereto (in reasonable detail describing the nature of the disagreement asserted).  If the Representative and the Purchaser reconcile their differences, the Annual Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  If the dispute relates to an accounting issue and if the Representative and the Purchaser are unable to reconcile their differences in writing within the Reconciliation Period, the accounting items in dispute shall be submitted to the Independent Auditors for final determination, and the Annual Determination shall be deemed adjusted in accordance with the determination of the Independent Auditors and shall become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  The Independent Auditors shall consider only the accounting items in dispute and shall be instructed to act within 20 days (or such longer period as the Representative and the Purchaser may agree) to resolve all accounting items in dispute.  If the dispute involves a non-accounting issue and such dispute cannot be reconciled within the Reconciliation Period, the dispute shall be settled by a court of competent jurisdiction. If the Representative does not give written notice of any exception within 30 days after the delivery of the Annual Determination or if the Representative gives written notification of his acceptance of the Annual Determination prior to the end of such 30 day period, such Annual Determination shall thereupon become binding, final and conclusive upon all the parties hereto and enforceable in a court of law.

(v)            In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 2.1.4, then the Purchaser and the Representative agree to select another accounting firm from among the remaining four largest accounting firms in the United States (except the Accountants) in terms of gross revenues to perform the services to be performed under this Section 2.1.4 by the Independent Auditors.  If the Purchaser and the Representative fail to select the Independent Auditors as required by Section 2.1.4(i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either the Purchaser or the Representative may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York to appoint an independent firm of certified public accountants to perform the services required under this Section 2.1.4 by the Independent Auditors.  The fees of JAMS shall be shared equally by the Purchaser and WWG.  For purposes of this Section 2.1.4 the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this Section 2.1.4(v).

(vi)           The Independent Auditors shall determine the party (i.e., the Purchaser or the Representative) whose asserted position as to the calculation of the Closing Date Working Capital, Profits or PBT, as the case may be, is furthest from the determination of the Closing Date Working Capital, Profits or  PBT, as the case may be, by the Independent Auditors, which non-prevailing party (WWG or the Purchaser) shall pay the fees and expenses of the Independent Auditors and shall reimburse the prevailing party for the portion of the fees of JAMS previously paid by it.

2.1.5         Examination of Books and Records.  The books and records of WWG, TEAM, O-A and Pulse (with respect to periods prior to the Closing Date) and the Company and its subsidiaries (if any) shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 2.1.  The Principals, on the one hand, and the Purchaser, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by them to support a position that is contrary to the position taken by the other party.

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Section 2.2       Closing.   The closing of the transactions contemplated by this Agreement (the "Closing") shall take place simultaneously with the execution and delivery of this Agreement on the date hereof, at the offices of Davis & Gilbert LLP, 1740 Broadway, New York, New York 10019 or by the exchange of documents and instruments by mail, courier, telecopy and wire transfer to the extent mutually acceptable to the parties hereto (such date is herein referred to as the "Closing Date").

Section 2.3       Third Party Consents.   Anything in this Agreement to the contrary notwithstanding, in the event an assignment or purported assignment to the Company or any Subsidiary of any of the agreements, contracts or commitments of TEAM, O-A or Pulse pursuant to the Formation and/or the NT Conveyance Document, as applicable, or any claim, right or benefit arising thereunder or resulting therefrom, without the consent of other parties thereto, would constitute a breach thereof or would not result in the Company or any Subsidiary receiving all of the rights of TEAM, O-A or Pulse, as the case may be, thereunder, such agreement, contract or commitment shall be deemed not to have been assigned by TEAM, O-A or Pulse, as the case may be, to the Company or any Subsidiary, as the case may be.  In those circumstances, if requested by the Purchaser, after the Closing, the Principals will use their best efforts to obtain any such consent (excluding the payment of any fees).  If such consent is not obtained and is required to effectively assign any agreement, contract or commitment to the Company or any Subsidiary, WWG and the Principals will cooperate with the Company or such Subsidiary to provide the Company or such Subsidiary with the full claims, rights and benefits thereunder, including enforcement at the cost and for the benefit of the Company or such Subsidiary of any and all rights of TEAM, O-A or Pulse, as the case may be, against a third party thereto arising out of the breach or cancellation by such third party or otherwise, and any amount received by TEAM, O-A or Pulse, as the case may be, in respect thereof shall be held for and paid over to the Company or such Subsidiary.

Section 2.4       Further Assurance; Post Closing Cooperation. WWG will, from time to time, at the request of the Purchaser, whether at or after the Closing Date, execute and deliver such other and further instruments of conveyance, assignment, transfer and consent necessary for the conveyance, assignment and transfer of the Assets pursuant to the NT Conveyance Document.  Following the Closing, upon reasonable advance notice, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data relating to TEAM, the Company and each Subsidiary in its possession with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of tax returns, (ii) the determination or enforcement of rights and obligations under this Agreement, (iii) compliance with the requirements of any Governmental or Regulatory Authority (as defined in Section 3.1.2), (iv) the determination or enforcement of the rights and obligations of any party entitled to indemnification under Article VII, (v) any actual or threatened action or proceeding, and (vi) the verification of the Assets and Assumed Liabilities (as defined in the NT Conveyance Document).

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ARTICLE III

REPRESENTATIONS OF WWG AND THE PRINCIPALS

A.  Each of the Principals severally represents and warrants to and with the Purchaser, as follows:

Section 3.1       Execution and Validity of Agreements; Restrictive Documents.

3.1.1        Execution and Validity.  Each Principal has the full legal right and capacity to enter into this Agreement and to perform his obligations hereunder.  This Agreement has been duly and validly executed and delivered by each Principal and, assuming due authorization, execution and delivery by the Purchaser and each other party hereto, constitutes a legal, valid and binding obligation of each Principal as to himself, enforceable against each Principal in accordance with its terms.  Nothing herein shall be construed to mean that one Principal is binding or has the authority to bind any other Principal.

3.1.2        No Restrictions.  There is no suit, action, claim, investigation or inquiry by any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision ("Governmental or Regulatory Authority"), and no legal, administrative or arbitration proceeding pending or, to WWG's knowledge, threatened against any Principal with respect to the execution, delivery and performance of this Agreement or the transactions contemplated hereby or any other agreement entered into by any Principal in connection with the transactions contemplated hereby.

3.1.3        Non-Contravention.  The execution, delivery and performance by each Principal of his obligations hereunder and the consummation of the transactions contemplated hereby, will not as of the Closing Date (a) result in the violation by any Principal of any statute, law, rule, regulation or ordinance (collectively, "Laws"), or any judgment, decree, order, writ, permit or license (collectively, "Orders"), of any Governmental or Regulatory Authority, applicable to any Principal, or (b) conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require any Principal to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of the assets or properties of any Principal, under any of the terms, conditions or provisions of any agreement, commitment, lease, license, evidence of indebtedness, letter of credit, mortgage, indenture, security agreement, instrument, note, bond, franchise, permit, concession, or other instrument, obligation or agreement of any kind, written or oral (collectively, "Contracts"), to which any Principal is a party or by which any Principal or any of his assets or properties are bound.

3.1.4        Approvals and Consents.  No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which any Principal is a party for the execution and delivery of this Agreement by any Principal, the performance by any Principal of his obligations hereunder or the consummation of the transactions contemplated hereby.

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B.  WWG and the Principals, jointly and severally, represent and warrant to and with the Purchaser, as follows:

Section 3.2      Execution and Validity; Existence and Good Standing.   WWG has the full corporate power and authority to enter into this Agreement and to perform its obligations hereunder and thereunder.  Each of TEAM and NT has the full corporate power and authority to enter into the NT Conveyance Document, and to perform their respective obligations thereunder. The execution and delivery of this Agreement by WWG and the NT Conveyance Document by TEAM and NT, and the consummation by such parties of the transactions contemplated hereby and thereby have been duly authorized by all required corporate action on behalf of such parties.  This Agreement has been duly and validly executed and delivered by WWG and constitutes a legal, valid and binding obligation of WWG, enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors rights generally and subject, as to enforceability, to the effect of general principles of equity.  The NT Conveyance Document has been duly and validly executed and delivered by TEAM and NT, and constitutes the legal, valid and binding obligations of TEAM and NT, enforceable against each of them in accordance with their terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors rights generally and subject, as to enforceability, to the effect of general principles of equity.  The Company and TEAM are each duly organized and are each validly existing and in good standing (including tax status) under the laws of the State of Delaware and the Commonwealth of Massachusetts, respectively, with the full power and authority to own their respective property and to carry on their respective businesses all as and in the places where such properties are now owned or operated or such businesses re now being conducted except where such failure to qualify would not have a material adverse effect on the respective business.  The Company and TEAM are each duly qualified, licensed or admitted to do business and each of them is in good company and tax standing in the jurisdictions set forth on Schedule 3.2, which are the only jurisdictions in which the ownership, use or leasing of their assets and properties, or the conduct or nature of their business, makes such qualification, licensing or admission necessary.

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Section 3.3       Capital Stock; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments.   WWG is the owner of record and beneficially has valid title to 99% of the Membership Interests of the Company and such ownership is free and clear of all Liens.   WWG2 is the owner of record and beneficially has valid title to 1% of the Membership Interests of the Company and such ownership is free and clear of all Liens.  There are no outstanding subscriptions, options, warrants, rights (including "phantom stock rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind providing for the purchase, issuance or sale of any equity or ownership or proprietary interest of the Company, or which grants any Person other than WWG or WWG2 the right to share in the earnings of the Company.  There is no suit, action, claim, or to the knowledge of WWG, investigation or inquiry by any Governmental or Regulatory Authority, and no legal, administrative or arbitration proceeding pending or, to the knowledge of WWG, threatened against a Principal or the Company or any of the Membership Interests, with respect to the execution, delivery and performance of this Agreement, the NT Conveyance Document or the transactions contemplated hereby or thereby or any other agreement entered into by WWG, a Principal or the Company in connection with the transactions contemplated hereby or thereby.  Except for the Subsidiaries, the Company does not, directly or indirectly, own any equity interest in or have any voting rights with respect to any Person.   Schedule 3.3 lists the full legal name of each Subsidiary and all lines of business in which each Subsidiary is participating or engaged.  Each Subsidiary is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, with full power and authority to own its assets and properties and to carry on its business all as and in the places where such properties are now owned or operated or such business is now being conducted.    Each Subsidiary is duly qualified, licensed or admitted to do business and is in good standing in those jurisdictions specified on Schedule 3.3, which are the only jurisdictions in which the ownership, use or leasing of such Subsidiary's assets and properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary, except for those jurisdictions in which the adverse effects of all such failures by the Company and the Subsidiaries to be qualified, licensed or admitted and in good standing can in the aggregate be eliminated without material cost or expense by the Company or a Subsidiary, as the case may be, becoming qualified, licensed or admitted and in good standing.  The Company is the owner of record and beneficially has valid title to 100% of the membership interests of each Subsidiary.  All of the outstanding equity interests in each Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable, have not been issued in violation of any preemptive rights of other equity interest holders, and are owned, beneficially and of record, by the Company (or Subsidiaries wholly owned by the Company) free and clear of all Liens.  There are no (a) outstanding subscriptions, options, warrants, rights (including "phantom stock rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind providing for the purchase, issuance or sale of any equity interests in any Subsidiary, except pursuant to this Agreement or (b) voting trusts, proxies or other commitments, understandings, restrictions or arrangements in favor of any Person other than the Company or the Subsidiary with respect to the voting of or the right to participate in dividends, distributions or other earnings on any equity interest in any Subsidiary.

Section 3.4       Financial Statements and No Material Changes.   Schedule 3.4(A) sets forth (a) the consolidated unaudited balance sheets of WWG and its subsidiaries as at December 31, 2008 and December 31, 2009 (the consolidated unaudited balance sheets of WWG and its subsidiaries as at December 31, 2009, hereinafter referred to as the "Balance Sheet") and the related consolidated unaudited statements of income for the calendar years then ended.  Such financial statements have been prepared in accordance with GAAP throughout the periods indicated except as set forth on Schedule 3.4(B).  Each balance sheet fairly presents the financial condition of the entity or entities included within such balance sheet, at the respective date thereof, and reflects all claims against and all debts and liabilities of such entities, fixed or contingent, as at the respective date thereof, required to be shown thereon under GAAP and the related statements of income present the results of operations for the respective period indicated.  Except for the transactions consummated pursuant to the Formation and the NT Conveyance Document, since December 31, 2009 (the "Balance Sheet Date"), there has been no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations of WWG or the Company.

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Section 3.5       Books and Records.   Except as set forth on Schedule 3.5, all accounts, books, ledgers and official and other records material to the business of TEAM, the Company, or any Subsidiary maintained by or on behalf of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, of whatsoever kind have been properly and accurately kept and completed in all material respects, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein.  Except as set forth on Schedule 3.5, neither TEAM, O-A or Pulse had, and the Company nor any Subsidiary has, any of its records, systems, controls, data or information recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) were not under the exclusive ownership and possession of WWG or are not under the exclusive ownership and possession of the Company or such Subsidiary.  WWG has delivered to the Purchaser complete and correct copies of the Certificates of Formation and the Limited Liability Company Agreements of each of the Company and the Subsidiaries, with all amendments thereto, currently in effect, and copies of the minute books and stock transfer records (or similar transfer records) of the Company and each Subsidiary.

Section 3.6       Title to Properties; Encumbrances; No Prior Activities.

3.6.1         Title to Properties; Encumbrances.  Except for the Excluded Assets listed in the NT Conveyance Document, TEAM, O-A and Pulse, as the case may be, had and the Company and each Subsidiary now has good and valid title to, or enforceable leasehold interests in or valid rights under contract to use, all the properties and assets owned or used by TEAM, O-A and Pulse, as the case may be, (real, personal, tangible and intangible), including, without limitation (a) all the properties and assets reflected in the Balance Sheet, and (b) all the properties and assets purchased or otherwise contracted for by the Company or any Subsidiary since the Balance Sheet Date (except for properties and assets reflected in the Balance Sheet or acquired or otherwise contracted for since the Balance Sheet Date that have been sold or otherwise disposed of in the ordinary course of business), in each case free and clear of all Liens, except for Liens set forth on Schedule 3.6.  The property, plant and equipment conveyed to the Company or any Subsidiary, whether owned or otherwise contracted for, is in a state of good maintenance and repair (ordinary wear and tear excepted) and is adequate and suitable for the purposes for which they are presently being used.

3.6.2         No Prior Activities.  The Company and each Subsidiary was created solely for the purpose of engaging in the transactions contemplated by the consummation of the reorganizations contemplated by the NT Conveyance Document and this Agreement.  Neither the Company nor any Subsidiary has engaged in any activities other than in connection with its formation, the negotiation, execution and delivery of this Agreement, the NT Conveyance Document and the Operating Agreement, and the consummation of the transactions contemplated hereby and thereby.  Except for liabilities incurred in connection with its formation and the consummation of the transactions contemplated by this Agreement, the NT Conveyance Document and the Operating Agreement, neither the Company nor any Subsidiary has incurred any liabilities or entered into any agreements or arrangements with any Person. Prior to the date hereof, neither O-A or Pulse conducted any business of any nature (other than general start-up activities relating to the formation of such companies).

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Section 3.7       Real Property.

3.7.1         Owned Real Property.None of TEAM, O-A, Pulse, the Company or any Subsidiary own any real property (including ground leases) or hold a freehold interest in any real property or any option or right of first refusal or first offer to acquire any real property.

3.7.2         Leased Real Property.  Schedule 3.7.2 contains an accurate and complete list of all real property leases, subleases, real property licenses and other occupancy agreements, including without limitation, any modification, amendment or supplement thereto and any other related document or agreement executed or entered into by WWG, TEAM, O-A or Pulse, as the case may be, and assigned to the Company or any Subsidiary pursuant to the NT Conveyance Document to which the Company or a Subsidiary is a party (as lessee, sublessee, lessor, sublessor, licensor or licensee) (each individually, a "Real Property Lease" and collectively, the "Real Property Leases").  Each Real Property Lease set forth on Schedule 3.7.2 (or required to be set forth on Schedule 3.7.2) is valid, binding and in full force and effect; all rents and additional rents and other sums, expenses and charges due thereunder to date on each such Real Property Lease have been paid; and the lessee has been in peaceable possession since the commencement of the original term of such Real Property Lease and no waiver, indulgence or postponement of the lessee's obligations thereunder has been granted by the lessor.  There exists no default or event of default by WWG, the Company or any Subsidiary or to the knowledge of WWG by any other party to any Real Property Lease; and there exists no occurrence, condition or act (including the purchase of the Purchased Interests hereunder) which, with the giving of notice, the lapse of time or the happening of any further event or condition, would become a default or event of default by WWG, the Company or any Subsidiary under any Real Property Lease, and there are no outstanding claims of breach or indemnification or notice of default or termination of any Real Property Lease.  WWG, TEAM, O-A or Pulse, as the case may be, held and the Company or a Subsidiary, as the case may be, now holds the leasehold estate on all the Real Property Leases free and clear of all Liens except as set forth on Schedule 3.7.2.  The real property leased by the Company and the Subsidiaries is in a state of good maintenance and repair (ordinary wear and tear excepted), adequate and suitable for the purposes for which it is presently being used, and there are no material repair or restoration works likely to be required in connection with any of the leased real properties.  WWG, TEAM, O-A or Pulse, as the case may be, was, and the Company or a Subsidiary now is, in physical possession and actual and exclusive occupation of the whole of each of its leased properties.  To the knowledge of WWG, no environmental claim has been made against WWG, TEAM, O-A, Pulse, the Company or any Subsidiary with respect to any Real Property Lease.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary owes any brokerage commission with respect to any of the Real Property Leases.

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Section 3.8       Contracts.   Schedule 3.8 hereto contains an accurate and complete list of the following Contracts (whether written or oral, but indicating which Contracts are oral) to which the Company or any Subsidiary is currently a party or TEAM, O-A or Pulse, as the case may be, was a party prior to the assignment of the same to the Company or any Subsidiary pursuant to the NT Conveyance Document (and Schedule 3.8 indicates if a listed item has not been assigned to and assumed by the Company or any Subsidiary pursuant to the NT Conveyance Document): (a) all Plans (as such term is defined in Section 3.19), (b) any personal property lease with a fixed annual rental of $10,000 or more, (c) any Contract relating to capital expenditures which involves payments of $25,000 or more in any single transaction or series of related transactions, (d) any Contract relating to the making of a loan or advance to or investment in, any other Person, (e) any agreement, instrument or arrangement evidencing or relating in any way to indebtedness for money borrowed or to be borrowed, whether directly or indirectly, by way of loan, purchase money obligation, guarantee (other than the endorsement of negotiable instruments for collection in the ordinary course of business), conditional sale, purchase or otherwise, (f) any management service, employment, consulting or similar type of Contract which is not cancelable by the Company or any Subsidiary without penalty or other financial obligation within 30 days, (g) any Contract limiting the Company's or any Subsidiary's freedom to engage in any line of business or to compete with any other Person, including, without limitation, any agreement limiting the ability of the Company or any Subsidiary or any of their respective affiliates to take on competitive accounts during or after the term thereof, (h) any collective bargaining or union agreement, (i) any Contract between the Company or any Subsidiary, on the one hand, and any officer or director thereof, on the other hand, not covered by subsection (f) above (including indemnification agreements), (j) any secrecy or confidentiality agreement (other than standard confidentiality agreements in computer software license agreements or agreements with clients entered into in the ordinary course of business), (k) any agreement with respect to any Intellectual Property (as defined in Section 3.14) other than "shrink-wrap" and similar end-user licenses, (l) any agreement with a client required to be listed on Schedule 3.16, (m) any agreement, indenture or other instrument which contains restrictions which affect the ability of the Company or any Subsidiary to make distributions in respect of its equity, (n) any joint venture agreement involving a sharing of profits not covered by clauses (a) through (m) above, (o) any Contract (not covered by another subsection of this Section 3.8) which involves $25,000 or more over the unexpired term thereof and is not cancelable by the Company or any Subsidiary, as the case may be, without penalty or other financial obligation within 30 days; provided, however, Contracts of a similar nature which individually do not involve $25,000 but in the aggregate involve $25,000 or more over the unexpired terms shall also be set forth on Schedule 3.8 (p) any Contract with a media buying service; provided, however, commitments to purchase media in the ordinary course of business do not have to be set forth on Schedule 3.8, and (q) any agreement (not covered by another subsection of this Section 3.8) between the Company or a Subsidiary, on the one hand, and any member of the Company, on the other hand. Notwithstanding anything to the contrary contained above, (x) commitments to media and production expenses which are fully reimbursable from clients, and (y) estimates or purchase orders given in the ordinary course of business relating to the execution of projects, do not have to be set forth on Schedule 3.8. Each Contract which has been assigned to and assumed by the Company or any Subsidiary pursuant to the NT Conveyance Document, as applicable, including without limitation, those required to be set forth on Schedule 3.8, is in full force and effect, and there exists no default or event of default by the Company or any Subsidiary or to the knowledge of WWG, by any other party, or occurrence, condition, or act (including the purchase of the Purchased Interests hereunder) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default thereunder by the Company or any Subsidiary, and there are no outstanding claims of breach or indemnification or notice of default or termination of any such Contract.  Summaries of all oral Contracts contained on Schedule 3.8 are complete and accurate in all material respects.

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Section 3.9       Non-Contravention; Approvals and Consents.   The execution, delivery and performance by any Principal, the Company or any Subsidiary and WWG, TEAM, O-A and Pulse of their respective obligations under this Agreement and the NT Conveyance Document and the consummation of the transactions contemplated hereby and thereby, will not (a) violate, conflict with or result in the breach of any provision of the certificate of formation and limited liability company agreement (or other comparable documents) of the Company or any Subsidiary or WWG, TEAM, O-A and Pulse; (b) result in the violation by the Company or any Subsidiary or WWG, TEAM, O-A and Pulse of any Laws or Orders of any Governmental or Regulatory Authority applicable to any of them or any of their respective assets or properties, or (c) if the consents and notices set forth in Schedule 3.9 are obtained, conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Company or any Subsidiary or WWG, TEAM, O-A or Pulse to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of their respective assets or properties, or under any of the terms, conditions or provisions of any Contract to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or WWG, TEAM, O-A and Pulse or any of their respective assets or properties are or were bound.  Except as set forth in Schedule 3.9, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Company or any Subsidiary or WWG, TEAM, O-A and Pulse is a party, or by which their respective assets or properties were or are bound for the execution and delivery of this Agreement or the NT Conveyance Document, the performance by the Company or any Subsidiary or WWG, TEAM, O-A and Pulse of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby.

Section 3.10     Litigation.   Except as set forth on Schedule 3.10, there is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of WWG, any investigation by) any Governmental or Regulatory Authority, pending or, to the knowledge of WWG, threatened, against the Company or any Subsidiary or WWG, TEAM, O-A and Pulse with respect to this Agreement or the transactions contemplated hereby or by the NT Conveyance Document, or any other agreement entered into by the Company or any Subsidiary or WWG, TEAM, O-A and Pulse in connection with the transactions contemplated hereby, or against or affecting the business or the assets transferred to the Company or any Subsidiary pursuant to the NT Conveyance Document; and no acts, facts, circumstances, events or conditions occurred or exist which are a basis for any such action, proceeding or investigation.  None of the Company, any Subsidiary, WWG, TEAM, O-A or Pulse is subject to any Order entered in any lawsuit or proceeding. Schedule 3.10 also sets forth with respect to each pending or threatened action, suit or proceeding listed thereon, the amount of costs, expenses or damages the Company, any Subsidiary or WWG, TEAM, O-A or Pulse has incurred to date and reasonably expects to incur through the conclusion thereof.

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Section 3.11    Taxes.   Each of WWG, TEAM, O-A, Pulse, the Company and each Subsidiary has timely completed and filed, or caused to be filed, taking into account any valid extensions of due dates, completely and accurately, all federal, state, local and foreign (if any) tax or information returns (including estimated tax returns) required under the statutes, rules or regulations of such jurisdictions to be filed by WWG, TEAM, O-A, Pulse, the Company and each Subsidiary.  The term "Taxes" means taxes, duties, charges or levies of any nature imposed by any taxing or other Governmental or Regulatory Authority, including without limitation income, gains, capital gains, surtax, capital, franchise, capital stock, value-added taxes, taxes required to be deducted from payments made by the payor and accounted for to any tax authority, employees' income withholding, back-up withholding, withholding on payments to foreign Persons, social security, national insurance, unemployment, worker's compensation, payroll, disability, real property, personal property, sales, use, goods and services or other commodity taxes, business, occupancy, excise, customs and import duties, transfer, stamp, and other taxes (including interest, penalties or additions to tax in respect of the foregoing), and includes all taxes payable by WWG, TEAM, O-A, Pulse, the Company and each Subsidiary pursuant to Treasury Regulations §1.1502-6 or any similar provision of state, local or foreign law.  All Taxes shown on said returns to be due and all other Taxes due and owing (whether or not shown on any Tax return) have been timely paid and all additional assessments received prior to the date hereof have been timely paid or are being contested in good faith, in which case, such contested assessments are set forth on Schedule 3.11.  Each of WWG, TEAM, O-A, Pulse, the Company and each Subsidiary has collected all sales, use, goods and services or other commodity Taxes required to be collected and remitted or will remit the same to the appropriate taxing authority within the prescribed time periods.  Each of WWG, TEAM, O-A, Pulse, the Company and each Subsidiary has withheld all amounts required to be withheld on account of Taxes from amounts paid to employees, former employees, directors, officers, members, residents and non-residents and remitted or will remit the same to the appropriate taxing authorities within the prescribed time periods.  The amount set up as an accrual for Taxes (aside from any reserved for deferred Taxes established to reflect timing differences between book and Tax accrual) on the Balance Sheet (as opposed to the notes thereto) is sufficient for the payment of all unpaid Taxes of each of WWG, TEAM, O-A, Pulse, the Company and each Subsidiary, as the case may be, whether or not disputed, for all periods ended on and prior to the date thereof.  Since the Balance Sheet Date, none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has incurred any liabilities for Taxes other than in the ordinary course of their respective businesses consistent with past custom and practice. No stockholder, member, manager, director or officer (or employee responsible for Tax matters) of any of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary expects any authorities to assess any additional Taxes for any period for which Tax returns have been filed.  Schedule 3.11 sets forth each jurisdiction (other than United States federal) in which WWG, TEAM, O-A, Pulse, the Company or any Subsidiary files, is required to file, or has been required to file a tax return or is or has been liable for any Taxes on a "nexus" basis.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary have received any notice of a claim by any Governmental or Regulatory Authority in any jurisdictions where any of them do not file tax returns that any of them may be subject to Tax by that jurisdiction.  WWG  has delivered to the Purchaser correct and complete copies of all federal, state, local and foreign income tax returns filed with respect to WWG, TEAM, O-A, Pulse, the Company and the Subsidiaries.  Except as set forth on Schedule 3.11, none of the federal, state, local or foreign income tax returns of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary have ever been audited by the Internal Revenue Service or any other Governmental or Regulatory Authority.  No examination of any return of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is currently in progress, and none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received notice of any proposed audit or examination.  No deficiency in the payment of Taxes by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary for any period has been asserted in writing by any taxing authority and remains unsettled at the date of this Agreement.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has made any agreement, waiver or other arrangement providing for an extension of time with respect to the assessment or collection of any Taxes against it.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has been a member of an affiliated group filing consolidated federal income tax returns nor has it been included in any combined, consolidated or unitary state or local income tax return.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary will be required as a result of a change in accounting method for any period ending on or before the Closing Date to include any adjustment under Section 481 of the Code (or any similar provision of state, local or foreign income tax law) in income for any period ending after the Closing Date, or as a result of a change for any period that may be required by law in connection with the transactions contemplated by this Agreement.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary are obligated to make any payments or is a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Section 280G of the Code.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is or has been a U.S. real property holding corporation within the meaning or Section 897 of the Code.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has entered into any Tax sharing or indemnification agreement with any party.  None of the Purchaser, WWG, TEAM, O-A, Pulse, the Company or any Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); (ii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iii) prepaid amount received on or prior to the Closing Date.  Since its inception, WWG has a valid election under Treasury Regulation Section 301.7701-3 to be taxed as a corporation for federal, state and local income tax purposes and since its inception has validly elected to be treated as an Subchapter S corporation within the meaning of Section 1361 of the Code for federal, state and local income tax purposes, and such elections remain in full force and effect. Commencing with the initial fiscal year in which WWG owned stock in TEAM, WWG has had an election in effect under Treasury Regulation Section 1.1361-3, to treat TEAM as a qualified subchapter S subsidiary for federal, state and local income tax purposes and such election remains in full force and effect.  In any fiscal year in which TEAM was not a qualified Subchapter S subsidiary for federal, state and local income tax purposes, it had validly elected to be taxed as a Subchapter S corporation within the meaning of Section 1361 of the Code for federal, state and local income tax purposes.  Since inception, the Company, O-A, Pulse and the Subsidiaries have been treated as disregarded entities within the meaning of Treasury Regulation Section 301.7701-3 for federal, state and local income tax purposes.

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Section 3.12    Liabilities.   Except for the Assumed Liabilities (as defined in the NT Conveyance Document) set forth in the NT Conveyance Document, or as set forth on Schedule 3.12, neither the Company nor any Subsidiary has any outstanding claims, liabilities or indebtedness of any nature whatsoever as to which the Company or any Subsidiary is or may become responsible (collectively in this Section 3.12, "Liabilities"), whether accrued, absolute or contingent, determined or undetermined, asserted or unasserted, and whether due or to become due, other than (i) Liabilities specifically disclosed in any Schedule hereto; (ii) Liabilities under Contracts of the type required to be disclosed by WWG  and the Principals on any Schedule and so disclosed or which because of the dollar amount or other qualifications are not required to be listed on such Schedule; and (iii) Liabilities incurred since the Balance Sheet Date in the ordinary course of business and consistent with past practice of the Company or any of the Subsidiaries.

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Section 3.13    Insurance.   Schedule 3.13 contains a true and complete list (including the names and addresses of the insurers, the names of the Persons to whom such insurance policies have been issued, the expiration dates thereof, the annual premiums and payment terms thereof, whether it is a "claims made" or an "occurrence" policy and a brief description of the interests insured thereby) of all liability, property, workers' compensation and other insurance policies currently in effect that insure the property, assets or business of TEAM, O-A and Pulse that was transferred to the Company and the Subsidiaries pursuant to the NT Conveyance Document or the employees of the Company and the Subsidiaries (other than self-obtained insurance policies by such employees). Each such insurance policy is valid and binding and in full force and effect, all premiums due thereunder have been paid and none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received any notice of cancellation or termination in respect of any such policy or default thereunder.  To the knowledge of WWG, such insurance policies are placed with financially sound and reputable insurers, and are in amounts and have coverage that are reasonable and customary for Persons engaged in the operation of the business of the Company and the Subsidiaries.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, or to the knowledge of WWG, the Person to whom such policy has been issued has received notice that any insurer under any policy referred to in this Section 3.13 is denying liability with respect to a claim thereunder or defending under a reservation of rights clause.  Within the last two years none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has filed for any claims exceeding $25,000 against any of its insurance policies, exclusive of automobile and health insurance policies. None of such policies shall lapse or terminate by reason of the transactions contemplated by this Agreement or the NT Conveyance Document and all such policies shall continue in effect after the Closing Date for the benefit of the Company and the Subsidiaries.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received any notice of cancellation of any such policy.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received written notice from any of its insurance carriers that any premiums will be materially increased in the future or that any insurance coverage listed on Schedule 3.13 will not be available in the future on substantially the same terms now in effect. None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has been refused any insurance or required to pay higher than normal or customary premiums, nor has its coverage been limited by any insurance carrier to which it has applied for insurance during the last three years.

Section 3.14     Intellectual Properties.

3.14.1      Definitions.  For purposes of this Agreement, the following terms have the following definitions:

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"Intellectual Property" shall include, without limitation, any or all of the following and all rights associated therewith: (a) all domestic and foreign patents, and applications therefor, and all reissues, reexaminations, divisions, renewals, extensions, continuations and continuations-in-part thereof; (b) all inventions (whether patentable or not), invention disclosures, improvements; (c) trade secrets, confidential and proprietary information, know how, technology, technical data and customer lists, financial and marketing data, pricing and cost information, business and marketing plans, databases and compilations of data, rights of privacy and publicity, and all documentation relating to any of the foregoing; (d) all copyrights, copyright registrations and applications therefor, unregistered copyrights, the content of all World Wide Web sites of a Person and all other rights corresponding thereto throughout the world; (e) all mask works, mask work registrations and applications therefor; (f) all industrial designs and any registrations and applications therefor; (g) all trade names, corporate names, logos, trade dress, common law trademarks and service marks, trademark and service mark registrations and applications therefor and all goodwill associated therewith; (h) any and all Internet domain names and Web sites (including all software and applications, and all components and/or modules thereof), used in connection therewith; and (i) all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded, and all documentation related to any of the foregoing.

"Intellectual Property of the Company and its Subsidiaries" shall mean any Intellectual Property that is owned by the Company or any Subsidiary, including Registered IP and Unregistered IP.

"Licensed Intellectual Property" means any Intellectual Property owned by another Person that is used by the Company or any of the Subsidiaries in the operation of the business of the Company or the Subsidiaries (the "Business"), including Off-the-Shelf Software (as defined below), but excluding rights in or to materials created for clients, to the extent to which such (x) client is the first owner of copyright in such materials or (y) the materials are subject to a written assignment of copyright in favor of clients of the Company or any Subsidiary.

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3.14.2       Representations.  Except as set forth on Schedule 3.14.2, all of the Intellectual Property of TEAM, O-A and Pulse was transferred to the Company and the Subsidiaries pursuant to the NT Conveyance Documents. Schedule 3.14.2 hereto contains an accurate and complete list of all (a) patents, patent applications, registered trademarks, applications for registered trademarks, registered service marks, domain names, applications for registered service marks, logos, registered copyrights and applications for registered copyrights which are owned by the Company or any Subsidiary (the "Registered IP"), (b) all unregistered trademarks, unregistered service marks and material unregistered copyrights which are owned by the Company or any Subsidiary (the "Unregistered IP") and (c) all Licensed Intellectual Property that is material to the operation of the Business, other than widely distributed off-the-shelf applications subject to shrink-wrap and similar non-negotiated end-user license agreements ("Off-the-Shelf Software"). Except as set forth on Schedule 3.14.2, the registrations and applications of the Registered IP listed on Schedule 3.14.2 are in the name of WWG, TEAM, O-A or Pulse, as the case may be, and are valid, in proper form, enforceable and subsisting, all necessary registration and renewal fees in connection with such registrations have been made and all necessary documents and certificates in connection with such registrations have been filed with the relevant patent and Internet domain names, copyrights and trademark authorities in the United States or other jurisdictions where the Business is conducted for the purposes of maintaining such Intellectual Property registrations, and applications therefore, and no actions (including filing of documents or payments of fees) are due within ninety (90) days after the Closing.  No registration, or application therefor, for any of the Registered IP has lapsed, expired, or been abandoned, and no such registrations, or applications therefor, are the subject of any opposition, interference, cancellation, or other legal, quasi-legal, or governmental proceeding pending before any governmental, registration, or other authority in any jurisdiction.  Except as set forth on Schedule 3.14.2, (i) the Company or one of its Subsidiaries, as applicable, is the sole and exclusive owner of all rights, title and interest in and to the Intellectual Property of the Company and its Subsidiaries, free and clear of all Liens, (ii) no Person has any rights to use any of the Intellectual Property of the Company and its Subsidiaries, (iii) none of WWG, TEAM, O-A, Pulse the Company or any Subsidiary has granted to any Person, or authorized any Person to retain, any ownership in the Intellectual Property of the Company and its Subsidiaries, and (iv) all Licensed Intellectual Property in the Company's or any Subsidiary's possession or used in the operation of the Business has been properly licensed from the owner of such Intellectual Property, and the Company and such Subsidiary, as applicable, possess all license agreements, certificates or documentation sufficient to substantiate such rights, and the Company and each such Subsidiary are in compliance with, and WWG, TEAM, O-A and Pulse have not in the past violated, such license agreements.  Except as set forth on Schedule 3.14.2,the consummation of the transactions contemplated hereby will not result in any loss or impairment of the Company's or any Subsidiary's rights to own or use any Intellectual Property, nor will such consummation require the consent of any third party in respect of any Intellectual Property. The operation of the Business and use of all Intellectual Property therein does not infringe the Intellectual Property of any other Person. There are no proceedings pending or, to the knowledge of WWG, threatened against WWG, TEAM, O-A, Pulse, the Company or any Subsidiary with respect to the Intellectual Property, or with respect to any other Intellectual Property, alleging the infringement or misappropriation by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary of any Intellectual Property of any Person, and none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received notice from any Person that the operation of the Business infringes the Intellectual Property of any Person.  There are no claims pending or, to the knowledge of WWG, threatened challenging the validity of any Intellectual Property of the Company or any Subsidiary or any Intellectual Property used by the Company or any Subsidiary in the conduct of the Business. None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has entered into or is otherwise bound by any consent, forbearance or any settlement agreement which limits the rights of the Company or any Subsidiary to use the Intellectual Property of the Company and its Subsidiaries. To the knowledge of WWG, no Person is infringing or misappropriating any of the Intellectual Property of the Company and its Subsidiaries. All Intellectual Property of the Company and its Subsidiaries was either developed (a) by employees of WWG, TEAM, O-A or Pulse within the scope of such employee's employment duties; or (b) by independent contractors or other third parties who have assigned all of their rights therein WWG, TEAM, O-A or Pulse, as the case may be, pursuant to a written agreement, and all such employees, independent contractors, and other third parties have waived, pursuant to a written agreement, their moral rights in all such Intellectual Property in favor of the Company or any Subsidiary, as the case may be.  Except as set forth on Schedule 3.14.2, the Intellectual Property of the Company and its Subsidiaries does not contain any software licensed under terms which require, as a condition of the use, modification, or distribution of such software, that other software incorporated into, derived from, or distributed with such software: (x) be disclosed or distributed in source code form; (y) be licensed under terms that permit making derivative works; or (z) be redistributable at no charge to subsequent licensees.

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3.14.3    Privacy and Security.  All information or data of any kind possessed by the Company or any Subsidiary, including but not limited to, personally identifiable information collected from consumers ("PII"), aggregate or anonymous information collected from consumers ("Non-PII") and employee data (collectively, "Data"), has been collected, by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, or any other Person, and is being maintained, stored, processed and used by the Company and the Subsidiaries, in compliance with all Laws and Orders.  WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has at all times presented a privacy policy ("Privacy Policy") to consumers prior to the collection of any PII or Non-PII online.  The Privacy Policy, and any other representations, marketing materials and advertisements that address privacy issues and the treatment of PII and Non-PII, accurately and completely describe WWG's, TEAM's, O-A's, Pulse's, the Company's and each any Subsidiary's respective information collection and use practices, and no such notices or disclosures have been inaccurate, misleading or deceptive.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has collected or received any PII from children under the age of 13 without verifiable parental consent or directed any of its websites to children under the age of 13 through which such PII could be obtained.  WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has stored and maintained all Data in a secure manner, using commercially reasonable technical measures, to assure the integrity and security of the Data and to prevent loss, alteration, corruption, misuse and unauthorized access to such Data.  There has been no unauthorized use, access to or disclosure of any Data.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has received any claims, notices or complaints regarding its information practices or use of Data.  The consummation of the transactions contemplated hereby will not result in any loss or impairment of the rights to own and use any Data, nor will such consummation require the consent of any third party in respect of any Data.

Section 3.15      Compliance with Laws; Permits.   The Company and the Subsidiaries are, and the Business (including the businesses conducted by TEAM, O-A and Pulse) has been conducted, in compliance with all applicable Laws and Orders, except in each case (other than with respect to compliance with environmental Laws and Orders relating to the regulation or protection of the environment ("Environmental Laws and Orders")) where the failure to so comply would not reasonably be expected to have a Material Adverse Effect (as defined below), including without limitation: (a) all Laws and Orders promulgated by the Federal Trade Commission or any other Governmental or Regulatory Authority; (b) all Environmental Laws and Orders; and (c) all Laws and Orders relating to labor, civil rights, and occupational safety and health laws, worker's compensation, employment and wages, hours and vacations, or pay equity. None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has been charged with, or, to the knowledge of WWG, threatened with or under any investigation with respect to, any charge concerning any violation of any Laws or Orders. The term "Material Adverse Effect" as it applies to WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, shall mean a material adverse effect on its operations, business, prospects, assets or financial condition. The Company and each Subsidiary has all permits, licenses, and other government certificates, authorizations and approvals ("Required Permits") required by any Governmental or Regulatory Authority for the operation of the Business, except where the failure to have such Required Permits would not reasonably be expected to have a Material Adverse Effect.  All of the Required Permits are in full force and effect and no action or claim is pending, nor to the knowledge of WWG, is threatened, to revoke or terminate any such Required Permit or declare any such Required Permit invalid in any material respect.

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Section 3.16      Client Relations.   Schedule 3.16 sets forth (a) the 10 largest clients of the Company and of each Subsidiary (measured by revenues), and the revenues from each such client and from all clients (in the aggregate) for the calendar years ended December 31, 2008 and December 31, 2009 and (b) the clients projected to be the 10 largest clients (measured by revenues) of the Company and of each Subsidiary based on the Company's and each Subsidiary's current profit plan for the twelve months ending December 31, 2010, together with the estimated revenues from each such client and all clients (in the aggregate) for such period.  WWG and the Principals do not warrant that the clients will remain clients of the Company or any Subsidiary beyond the Closing or that the estimated revenues set forth on Schedule 3.16 will prove to be accurate; provided, however, they do represent that they were made in good faith and on a reasonable basis.  No client of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has advised any Principal or any of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary in writing that it is (x) terminating or considering terminating the handling of its business, in whole or in respect of any particular project or service or (y) planning to reduce its future spending with the Company or any Subsidiary in any material manner.

Section 3.17      Accounts Receivable; Work-in-Process; Accounts Payable.   The amount of all work-in-process, accounts receivable, unbilled invoices (including without limitation unbilled invoices for services and out-of-pocket expenses) and other debts due or recorded in the records and books of account of TEAM, O-A and Pulse and which was transferred to the Company and the Subsidiaries pursuant to the NT Conveyance Document, as being due to the Company and the Subsidiaries and reflected on the Balance Sheet and the Closing Balance Sheet represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and will be good and collectible in full (less the amount of any provision, reserve or similar adjustment therefor reflected on the Balance Sheet and the Closing Balance Sheet) in the ordinary course of business, and none of the accounts receivable or other debts (or accounts receivable arising from any such work-in-process or unbilled invoices) is or will be subject to any counterclaim or set-off except to the extent of any such provision, reserve or adjustment.  The accounts payable set forth on the Balance Sheet, and the accounts payable incurred since the Balance Sheet Date through the Closing Date, represent trade payables resulting from bona fide transactions incurred in the ordinary course of business. There has been no change since the Balance Sheet Date in the amount or aging of the work-in-process, accounts receivable, unbilled invoices, or other debts due to the Company or any Subsidiary, or the reserves with respect thereto, or accounts payable of the Company or any Subsidiary which would have a Material Adverse Effect.

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Section 3.18      Employment Relations.   (a) No unfair labor practice complaint against WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is pending before any Governmental or Regulatory Authority; (b) there is no organized labor strike, dispute, slowdown or stoppage actually pending or to the knowledge of WWG threatened against or involving the Business; (c) there are no labor unions representing or, to the knowledge of WWG, attempting to represent the employees of TEAM, O-A and Pulse who became employees of the Company and the Subsidiaries; (d) no claim or grievance nor any arbitration proceeding arising out of or under any collective bargaining agreement is pending against WWG, TEAM, O-A, Pulse, the Company or any Subsidiary and to the knowledge of WWG, no such claim or grievance has been threatened; (e) no collective bargaining agreement is currently being negotiated by any of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary; and (f) none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary experienced any work stoppage or similar organized labor dispute during the last three years.  There is no legal action, suit, proceeding or claim pending or, to the knowledge of WWG, threatened between WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, on the one hand, and any employees or former employees of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, agents or former agents of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, job applicants or any association or group of any employees of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, on the other hand.

Section 3.19      Employee Benefit Matters.

3.19.1    List of Plans.  Schedule 3.8 to this Agreement lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus, incentive, deferred compensation, stock option, restricted stock, stock appreciation rights, phantom stock rights, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, individual retirement programs or arrangements, and all termination, severance or other Contracts, whether covering one Person or more than one Person, and whether or not subject to any of the provisions of ERISA, which are or have been maintained, contributed to or sponsored by WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate (as defined in Section 3.19.3) for the benefit of any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (each item listed on Schedule 3.8 being referred to herein individually, as a "Plan" and collectively, as the "Plans").  For purposes of this Agreement, "foreign benefit plan" means each material plan, program or agreement contributed to, sponsored or maintained by either the Company or any ERISA Affiliate or any other Person that is maintained outside of the United States, or that covers primarily employees residing or working outside of the United States, and which would be treated as a Plan had it been a material United States plan, program or agreement.  WWG has delivered to the Purchaser, to the extent applicable, a complete and accurate copy of: (a) each written Plan and descriptions of any unwritten Plan (including all amendments thereto whether or not such amendments are currently effective); (b) each summary plan description and all summaries of material modifications relating to a Plan; (c) each trust agreement or other funding arrangement with respect to each Plan, including insurance contracts; (d) the most recently filed IRS Form 5500 relating to each Plan; (e) the most recently received IRS opinion, advisory or determination letter for each Plan; and (f) the three most recently prepared actuarial reports (if applicable) and financial statements in connection with each Plan.  None of the Principals, WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has made any commitment, (i) to create or cause to exist any Plan not set forth on Schedule 3.8 or (ii) to modify, change or terminate any Plan.

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3.19.2    Severance.  None of the Plans, nor, except as set forth on Schedule 3.19.2, any employment agreement or other Contract to which WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is a party or bound, (a) provides for the payment of or obligates WWG, TEAM, O-A, Pulse, the Company or any Subsidiary to pay separation, severance, termination or similar-type benefits to any Person; or (b) obligates WWG, TEAM, O-A, Pulse, the Company or any Subsidiary to pay separation, severance, termination or similar-type benefits as a result of any transaction contemplated by this Agreement or as a result of a "change in control," within the meaning of such term under Section 280G of the Code, either alone or in conjunction with any subsequent occurrence.

3.19.3    Multi-Employer Plans.  None of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate has maintained, contributed to or participated in a multi-employer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) or a multiple employer plan subject to Sections 4063 and 4064 of ERISA, nor has any obligations or liabilities, including withdrawal, reorganization or successor liabilities, regarding any such plan. As used herein, the term "ERISA Affiliate" means any Person that is or has been a member of a controlled group of organizations (within the meaning of Sections 414(b), (c), (m) or (o) of the Code) of which WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is a member.

3.19.4    Welfare Benefit Plans.  Each of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has expressly reserved the right, in all Plan documents relating to welfare benefits provided to employees, former employees, officers, directors and other participants and beneficiaries, to amend, modify or terminate at any time the Plans which provide for welfare benefits, and WWG is not aware of any fact, event or condition that could reasonably be expected to restrict or impair such right. Except as required under Section 601 of ERISA, none of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate has made any promises or commitments to provide, and is not obligated to provide (i) medical benefits (including without limitation through insurance) to retirees or former employees of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate or their respective dependants, or (ii) life insurance or other death benefits to retired employees or former employees of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate or their respective dependants.

3.19.5    Administrative Compliance.  Each Plan is now and has been operated in all material respects in accordance with the requirements of its terms and with all applicable Laws, including, without limitation, ERISA, the Health Insurance Portability and Accountability Act of 1996 (as amended by the Health Information Technology for Economic and Clinical Health Act) and the Code, including, without limitation, all nondiscrimination and minimum coverage requirements of Sections 401(a) and 410(b) thereof, the Age Discrimination in Employment Act, Family and Medical Leave Act, the Americans with Disabilities Act, the Equal Pay Act, Title VII of the Civil Rights Act of 1964, and the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, and the regulations and authorities published thereunder.  Each of WWG, TEAM, O-A, Pulse, the Company and any Subsidiary has performed all material obligations required to be performed by it under, is not in any respect in default under or in violation of, and WWG has no knowledge of any default or violation by any Person under, any Plan.  Except as set forth on Schedule 3.9, no legal action, suit, audit, investigation or claim is pending or threatened with respect to any Plan (other than claims for benefits in the ordinary course), and no fact, event or condition exists that would be reasonably likely to provide a legal basis for any such action, suit, audit, investigation or claim.  All reports, disclosures, notices and filings with respect to such Plans required to be made to employees, participants, beneficiaries, alternate payees and any Governmental or Regulatory Authority have been timely made or an extension has been timely obtained. With respect to any insurance policy providing funding for benefits or an investment alternative under any Plan, (i) no liability or loss shall be incurred by the Company or any Subsidiary or any such Plan in the nature of a retroactive rate adjustment, loss sharing arrangement or other liability or loss, and (ii) no insurance company issuing any such policy is in receivership, conservatorship, liquidation or similar proceeding and, to the knowledge of WWG, no such proceedings with respect to any insurer are imminent.

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3.19.6    Tax-Qualification.  Each Plan which is intended to be qualified under Sections 401(a) or 408(k) of the Code is qualified under Sections 401(a) and 408(k) of the Code (and, if applicable, complies with the requirements of Section 401(k) of the Code), and has received a favorable opinion, advisory or determination letter from the IRS that it is so qualified.  Each trust established in connection with any Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code is exempt under Section 501(a) of the Code; and no fact or event has occurred or condition exists since the date of such opinion, advisory or determination letter from the IRS which would be reasonably likely to adversely affect the qualified status of any such Plan or the exempt status of any such trust. Each Plan that is a foreign benefit plan which is intended to be qualified with the appropriate Governmental or Regulatory Authority in the relevant country has received a favorable determination that it is so qualified, and each trust established in connection with such foreign benefit plan that is intended to be exempt from taxation has received a favorable determination that it is so exempt.

3.19.7    Funding; Excise Taxes.  There has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan subject to ERISA.  None of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate has incurred any liability for any excise tax arising under Sections 4971, 4972, 4973, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980, 4980B, 4980D or 4980E of the Code or any civil penalty arising under Sections 409, 502(i) or 502(l) of ERISA, and no fact, event or condition exists which could give rise to any such liability.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary nor any ERISA Affiliate has incurred any liability under, arising out of or by operation of Section 302(c)(11) or Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation ("PBGC") arising in the ordinary course), including, without limitation, any liability in connection with the termination of any employee benefit plan subject to Title IV of ERISA (a "Title IV Plan"); and, no fact, event or condition exists which could give rise to any such liability.  No complete or partial termination has occurred within the five years preceding the date hereof with respect to any Plan maintained by WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate, and no reportable event (within the meaning of Section 4043 of ERISA), notice of which has not been waived by the PBGC, has occurred or is expected to occur with respect to any Plan maintained by WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate. The transactions contemplated by this Agreement and the NT Conveyance Document will not result in liability to WWG, TEAM, O-A, Pulse, the Company or any Subsidiary or the Purchaser under Section 4069 of ERISA.  No Title IV Plan or Plan subject to Section 302 of ERISA maintained by WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate had an accumulated funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of the most recently ended plan year of such Plan.  None of the assets of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate is the subject of any Lien arising under Section 302(f) of ERISA or Section 412(n) of the Code; none of WWG, TEAM, O-A, Pulse, the Company, any Subsidiary or any ERISA Affiliate has been required to post any security under Section 307 of ERISA or Section 401(a) (29) of the Code relating to any Plan; and no fact or event exists which could give rise to any such Lien or requirement to post any such security.  As of the Closing Date, no Plan which is a Title IV Plan will have an "unfunded benefit liability" (within the meaning of Section 4001(a)(18) of ERISA) and no Plan which is subject to Section 302 of ERISA will have in "accumulated funding deficiency" (within the meaning of Section 302(a)(2) of ERISA).

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3.19.8    Tax Deductions.  All contributions, premiums or payments (including all employer contributions and, if applicable, employee salary reduction contributions) required to be made, paid or accrued with respect to any Plan have been made, paid or accrued on or before their due dates, including extensions thereof.  All such contributions have been fully deducted or in the case of the current year will be deducted for income tax purposes and no such deduction has been challenged or disallowed by any Governmental or Regulatory Authority, and no fact or event exists which could give rise to any such challenge or disallowance.

3.19.9    409A.  With respect to each Plan (and any other arrangement involving the Company or each Subsidiary) that is a nonqualified deferred compensation plan, within the meaning of Section 409A of the Code (a "409A Plan"), no event has occurred and no condition exists, that could subject anyone, including any Person, to any tax, fine, penalty or other liability under Section 409A of the Code ("409A Liability").   None of the transactions contemplated by this Agreement could, directly or indirectly, subject anyone or any Person to any 409A Liability.  Each 409A Plan is and has been operated and administered in good faith compliance with 409A of the Code, Treasury Notice 2005-1, the Final Treasury Reg. Sections 1.409A-1 through 1.409A-6, and any subsequent guidance issued thereunder.

Section 3.20      Interests in Customers, Suppliers, Etc.   Except as set forth on Schedule 3.20, none of the Principals, nor to the knowledge of WWG (without making any inquiry of any member of the Related Group, as hereinafter defined), any officer, director, or employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary immediately prior to the Closing Date, any parent, brother, sister, child or spouse of any such officer, director, key executive or employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary or the Principals (collectively, the "Related Group"), or any Person controlled by anyone in the Related Group:

(i)          owns, directly or indirectly, any interest in (excepting for ownership, directly or indirectly, of less than 1/4 of 1% of the issued and outstanding shares of any class of securities of a publicly held and traded company), or received or has any right to receive payments from, or is an officer, director, employee, agent or consultant of, any Person which is, or is engaged in business as, a competitor, lessor, lessee, supplier, distributor, sales agent, customer or client of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary;

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(ii)         owns, directly or indirectly (other than through the ownership of Membership Interests), in whole or in part, any tangible or intangible property (including, but not limited to Intellectual Property), that WWG, TEAM, O-A, Pulse, the Company or any Subsidiary used in the conduct of the Business, other than immaterial personal items owned and used by employees at their work stations; or

(iii)        has any cause of action or other claim whatsoever against, or owes any amount to, WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, except for claims in the ordinary course of business such as for accrued vacation pay, accrued benefits under employee benefit plans, and similar matters and agreements existing on the date hereof.

Section 3.21      Bank Accounts and Powers of Attorney.   Set forth in Schedule 3.21 is an accurate and complete list showing (a) the name and address of, and account information for, each bank in which immediately prior to the transfer of the Business, WWG, TEAM, O-A, Pulse, the Company or any Subsidiary had an account, credit line or safe deposit box and the names of all Persons authorized to draw thereon or to have access thereto, and (b) the names of all Persons, if any, holding powers of attorney from WWG, TEAM, O-A, Pulse, the Company or any Subsidiary and a summary statement of the terms thereof.

Section 3.22      Compensation of Employees.

(a)         Schedule 3.22 is an accurate and complete list showing: (a) the names and positions of all employees and exclusive consultants who immediately prior to the transfer of the Business were being compensated by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary at an annualized rate of $50,000 or more, together with a statement of the current annual salary, and the annual salary, bonus and incentive compensation paid or payable with respect to calendar years 2008 and 2009, and a statement of the projected annual salary, bonus and incentive compensation payable with respect to the calendar year ended December 31, 2010, and the material fringe benefits of such employees and exclusive consultants not generally available to all employees of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary; (b) all bonus and incentive compensation paid or payable (whether by agreement, custom or understanding) to any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary not listed in clause (a) above for services rendered or to be rendered during calendar years 2008 and 2009; (c) the names of all retired employees, if any, of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary who are receiving or entitled to receive any healthcare or life insurance benefits or any payments from WWG, TEAM, O-A, Pulse, the Company or any Subsidiary not covered by any pension plan to which WWG, TEAM, O-A, Pulse, the Company or any Subsidiary is a party, their ages and current unfunded pension rate, if any; and (d) a description of the current severance and vacation policy of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary.  None of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has, because of past practices or previous commitments with respect to its employees, established any rights on the part of any of its employees to additional compensation with respect to any period after the Closing Date (other than wage increases in the ordinary course of business).  Each of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary have properly classified and compensated all employees and consultants in accordance with all applicable Laws and Order of any Governmental and Regulatory Authority.

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(b)         No Principal has agreed or made any written or verbal commitment to give any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (or any family member or any affiliate of the employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary) any portion or share of the Purchase Price in the form of a bonus, gift, award, or any similar type of remuneration.   The Principals agree that, from and after the date hereof, no portion or proceeds of the Purchase Price shall be used to compensate or give to any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (or any family member of any employee of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary) a bonus, gift, award, or any similar type of remuneration.

Section 3.23      No Changes Since the Balance Sheet Date.   From the Balance Sheet Date through the date hereof, except as specifically stated on Schedule 3.23, none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (i) incurred any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except in the ordinary course of business, (ii) permitted any of its assets to be subjected to any Lien, (iii) sold, transferred or otherwise disposed of any assets except in the ordinary course of business, (iv) made any capital expenditure or commitment therefor which individually or in the aggregate exceeded $25,000; (v) declared or made any distributions or dividend payments on any of their respective equity, or redeemed, purchased or otherwise acquired (or committed to do so) any of their respective equity, or any option, warrant or other right to purchase or acquire any of their respective equity, (vi) made any bonus or profit sharing distribution, (vii) increased or prepaid its indebtedness for borrowed money, except current borrowings under credit lines listed on Schedule 3.8, or made any loan to any Person other than to any employee for normal travel and expense advances, (viii) wrote down the value of any work-in-process, or wrote off as uncollectible any notes or accounts receivable, except write-downs and write-offs in the ordinary course of business, none of which individually or in the aggregate, were material to WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, (ix) granted any increase in the rate of wages, salaries, bonuses or other remuneration of any employee who, whether as a result of such increase or prior thereto, received aggregate compensation from WWG, TEAM, O-A, Pulse, the Company or any Subsidiary at an annual rate of $50,000 or more, or except in the ordinary course of business to any other employees, (x) entered into any employment or exclusive consulting agreement which is not cancelable by WWG, TEAM, O-A, Pulse, the Company or any Subsidiary (and will not be cancelable by the Company or any Subsidiary) without penalty or other financial obligation within 30 days, (xi) canceled or waived any claims or rights of material value, (xii) made any change in any method of accounting procedures, (xiii) otherwise conducted the business of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary or entered into any transaction, except in the usual and ordinary manner and in the ordinary course of its business, (xiv) amended or terminated any agreement which is material to their businesses, (xv) renewed, extended or modified any lease of real property or any lease of personal property, except in the ordinary course of business, or (xvi) agreed, whether or not in writing, to do any of the actions set forth in any of the above clauses.

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Section 3.24     Corporate Controls.   To the knowledge of WWG, no officer, authorized agent, employee, consultant or any other Person while acting on behalf of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, has, directly or indirectly: used any corporate fund for unlawful contributions, gifts, or other unlawful expenses relating to political activity; made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false or fictitious entry on its books or records; participated in any racketeering activity; or made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment, or other payment of a similar or comparable nature, to any Person, private or public, regardless of form, whether in money, property, or services, to obtain favorable treatment in securing business or to obtain special concessions, or to pay for favorable treatment for business secured or for special concessions already obtained, and none of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has participated in any illegal boycott or other similar illegal practices affecting any of its actual or potential customers.

Section 3.25      Brokers.   Except as set forth on Schedule 3.25, no broker, finder, agent or similar intermediary has acted on behalf of WWG, any Principal or the Company or any Subsidiary in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees, consulting fees or similar fees or commissions are payable by the Company or any Subsidiary or any Principal in connection therewith based on any agreement, arrangement or understanding with any of them.

Section 3.26     Repayment of Loans.  All (i) intercompany indebtedness and (ii) indebtedness of the Principals to any of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary has been repaid in full, other than routine travel expense advances in the ordinary course of business and consistent in amount with past practice.

Section 3.27     Copies of Documents.   WWG has caused to be made available for inspection and copying by the Purchaser and its advisers, true, complete and correct copies of all documents referred to in this Article III or in any Schedule.  Summaries of all oral contracts contained on Schedule 3.8 are complete and accurate in all material respects.

ARTICLE IV

REPRESENTATIONS OF THE PURCHASER

The Purchaser represents, warrants and agrees to and with WWG and the Principals as follows:

Section 4.1        Existence and Good Standing.   The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with full corporate power and authority to own its property and to carry on its business all as and in the places where such properties are now owned or operated or such business is now being conducted.

Section 4.2        Execution and Validity of Agreement.   The Purchaser has the full corporate power and authority to make, execute, deliver and perform this Agreement and the transactions contemplated hereby.  The execution and delivery of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby have been duly authorized by all required corporate action on behalf of the Purchaser.  This Agreement has been duly and validly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Principals and WWG, constitutes legal, valid and binding obligations of the Purchaser, enforceable against each of them in accordance with its terms.

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Section 4.3       Litigation.   There is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Purchaser, any investigation by), any Governmental or Regulatory Authority pending or, to the knowledge of the Purchaser, threatened against the Purchaser or any of their respective properties or rights with respect to this Agreement.  The Purchaser is not subject to any Order entered in any lawsuit or proceeding with respect to this Agreement or the transactions contemplated hereby.

Section 4.4        Non-Contravention; Approvals and Consents.   The execution, delivery and performance by the Purchaser of its obligations hereunder and the consummation of the transactions contemplated hereby will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation and bylaws of the Purchaser, (b) result in the violation by the Purchaser of any Laws or Orders of any Governmental or Regulatory Authority applicable to the Purchaser or any of its assets or properties, or (c) result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Purchaser to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or, except for such Liens as may be created in connection with an MDC Financing (as defined in Section 6.1 hereof), result in the creation or imposition of any Lien upon any of the respective assets or properties of the Purchaser, under any of the terms, conditions or provisions of any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound. No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound for the execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder or the consummation by the Purchaser of the transactions contemplated hereby.

Section 4.5        Brokers.   No broker, finder, agent or similar intermediary has acted on behalf of the Purchaser in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees or similar fees or commissions are payable by the Purchaser in connection therewith based on any agreement, arrangement or understanding with either of them.

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ARTICLE V

ACTIONS AT CLOSING BY WWG AND THE PRINCIPALS

Simultaneously herewith:

Section 5.1         Authorization Documents; Good Standing Certificates.

(a)        WWG shall have delivered to the Purchaser: (a) a copy of the resolutions of the managing member and the members of WWG, authorizing the execution, delivery and performance of this Agreement and the transactions contemplated hereby, certified by one of its officers; (b) a copy of the Company's Certificate of Formation, including all amendments, certified by the Delaware Secretary of State; (c) a certificate as of a recent date from the Delaware Secretary of State that the Company is in good standing in such state; and (d) a copy of the Company's limited liability company operating agreement, including all amendments, certified by an officer of the Company.

(b)        WWG shall have delivered to the Purchaser with respect to each Subsidiary: (a) a copy of each Subsidiary's organizational documents, including all amendments, certified by its jurisdiction of organization; (b) a certificate from the appropriate authority of each jurisdiction in which each Subsidiary was organized that such Subsidiary in good standing (in each case together with any applicable tax status certificate) in such jurisdiction; and (c) a certificate from the appropriate authority of each jurisdiction in which each Subsidiary is qualified as a foreign company to do business to the effect that the Subsidiary is in good standing in such jurisdiction (in each case together with any applicable tax status certificate).

(c)         WWG shall have delivered to the Purchaser a certificate as of a recent date from the Massachusetts Secretary of State that TEAM is in good standing in such state.

(d)        WWG shall have delivered to the Purchaser a copy of the resolutions of the sole shareholder and the Board of Directors of TEAM, authorizing the execution, delivery and performance of the NT Conveyance Document and the transactions contemplated thereby.

(e)          WWG shall have delivered to the Purchaser a copy of the resolutions of the members and the Managing Member of WWG2 authorizing execution and delivery of the Operating Agreement.

Section 5.2        Required Approvals and Consents.   WWG shall have obtained or given, at no expense to the Purchaser or MDC, and there shall not have been withdrawn or modified, any consents or approvals or other actions listed on Schedule 3.9 hereof (including without limitation, obtaining all such consents, approvals and/or waivers required under the Contracts listed on Schedule 3.8).  Each such consent or approval shall be in form satisfactory to counsel for the Purchaser.

Section 5.3         Operating Agreement.   WWG and WWG2 shall have entered into the Operating Agreement.

Section 5.4        Employment Agreements.   Each of Gregory, O'Toole, Groth, Graham, Frank Fanelli, Gregory Goldhaber, Alexander Gonzalez, Michael Shea and Brian Murphy shall have entered into Employment Agreements with the Company substantially in the form and to the effect of Exhibits B-1, B-2, B-3, B-4, B-5, B-6, B-7, B-8 and B-9, respectively, attached hereto.

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Section 5.5        Non-Competition/Non-Solicitation/Non-Servicing Agreements.   The Principals shall have entered into Non-Competition/Non-Solicitation/Non-Servicing Agreements with the Purchaser and the Company in the form and to the effect of Exhibits C-1, C-2, C-3, C-4, C-5 and C-6, respectively, attached hereto.

Section 5.6        Conveyance Document. WWG shall have caused TEAM to enter into the NT Conveyance Document.

Section 5.7        Bank Pay-off Letter; Release of Liens.  WWG shall have delivered to the Purchaser pay-off letters and lien discharges (or agreements therefor) reasonably satisfactory to the Purchaser from PNC Bank, National Association, as lender to WWG, TEAM, O-A, Pulse, the Company or any Subsidiary, and/or in connection with any such entity's pre-closing outstanding indebtedness and line of credit.

Section 5.8        Brian Murphy Side Letter. WWG and Brian Murphy shall have entered into that certain letter agreement (the "Side Letter") as referenced in the employment agreement by and between Brian Murphy and the Company referred to in Section 5.4 above.

Section 5.9        Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incident thereto must be reasonably satisfactory in form and substance to the Purchaser and its counsel, and the Purchaser shall have received copies of all such documents and other evidences as it or its counsel reasonably requested in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

ARTICLE VI

OTHER AGREEMENTS

Section 6.1         Management of the Company.

6.1.1      MDC Financing.  Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the Purchase Price under Section 2.1 hereof and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC and/or one of its affiliates, in connection with its or any of its affiliates' current or future credit facilities or financing arrangements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon the Purchaser's Membership Interests; (x) pledge or grant a security interest in or to otherwise have a lien placed upon the assets and properties of the Company and/or its Subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under the Call and/or Sale Request (as such terms are defined in the Operating Agreement) to or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders (as applicable and collectively, the "Lender"); and (z) have the Company and/or its Subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned to it.

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6.1.2      Effect of Events During Period Membership Interests Are Outstanding.  The parties hereto understand and agree that under the terms of the Employment Agreements referred to in Section 5.4, each of the Principals may be terminated for "cause" or "without cause" (as such terms are defined in such Employment Agreement); provided, however, the parties hereto acknowledge and agree that no employee (other than Gregory or Groth) of the Company or any Subsidiary shall be terminated "without cause" without the prior written consent of Gregory; provided further, however, in the event that a majority of the remaining Principals approve in writing of such termination of employment, the prior written consent of Gregory shall not be required in connection with such termination of employment.  In addition, the parties hereto acknowledge and agree that in the event Gregory's employment with the Company and/or NT is terminated "without cause", a majority of the remaining Principals shall have the right to (and shall) within 10 days following such termination of employment, appoint Gregory's replacement as Chief Executive Officer and President of the Company and/or NT, as the case may be, subject to the reasonable approval and consent of MDC.  In the event that a majority of the remaining Principals do not (within 10 days following such termination of employment) appoint Gregory's replacement, MDC shall have the sole right to appoint a new Chief Executive Officer of the Company and/or NT, as the case may be.  Notwithstanding the foregoing, in the event any Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect WWG's right to receive the Purchase Price under this Agreement.  Each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company or any Subsidiary during the period commencing as of Closing Date through the end of the last year included in the Measuring Period (as defined in the Operating Agreement) with respect to the exercise of a Call or Sale Request (as such terms are defined in the Operating Agreement) resulting in WWG no longer owing any Class B and Class C Units, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any Subsidiary, no party to this Agreement or any Person claiming a right through such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any Subsidiary (x) constitutes a breach by the Purchaser or any of its affiliates of this Agreement, (y) resulted in an adverse effect on the Purchase Price hereunder forming the basis for a claim against the Purchaser or any of its affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 2.1.4 hereof.

Section 6.2         Tax Matters.

6.2.1      Section 754 Election.  The Purchaser and WWG agree that a timely election under Section 754 of the Code will be made by the Company on its federal partnership income tax return (Form 1065) for the Tax year of the Company that ends on the Closing Date.  The Purchaser shall prepare an allocation of the Purchase Price (and of other capitalized costs) among the assets of the Company and the Subsidiaries.  The Company, the Purchaser, each member of the Company and the Principals shall report, act and file all tax returns in all respects and for all purposes consistent with such allocation prepared by the Purchaser and agreed to by WWG.  WWG and/or the Principals shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as the Purchaser may reasonably request to prepare such allocation.  None of the Company, any member of the Company, or any of the Principals shall take any position (whether in audits, tax returns, or otherwise) that is inconsistent with such allocation unless required to do so by applicable law.

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6.2.2      Tax Returns.  The Company shall prepare or cause to be prepared and file or cause to be filed all Tax returns for the Company except as otherwise specifically provided herein or in the Operating Agreement.  The Company shall permit the Purchaser to review and comment on each such Tax return described in the preceding sentence prior to filing.

6.2.3      Tax Cooperation.  The Purchaser, WWG and the Principals shall cooperate fully, and each shall cause the Company to cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax returns pursuant to Section 6.2.2 or any other Tax returns relating to the operations of WWG or the Company, and any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include WWG's retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  The Purchaser and WWG agree to, and each agree to cause the Company to, (A) retain all books and records with respect to Tax matters pertinent to WWG and Company relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by the Purchaser, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, WWG or the Purchaser, as the case may be, shall allow the other party to take possession of such books and records.

6.2.4      Tax Liability.  To the extent that any of the transactions contemplated by the NT Conveyance Document give rise to sales and/or use tax liability or other transfer, purchase, stamp or recordation documentary tax and fees (collectively, "Sales Taxes"), the Purchaser shall promptly pay such Sales Taxes to the appropriate tax authorities.  WWG shall cause the Company to deliver to the Purchaser completed returns in respect of any Sales Taxes required to be filed with respect to the transactions contemplated herein (regardless of whether such returns are informational or show liability for Sales Taxes) for filing with the appropriate taxing authority.  The Purchaser and WWG hereby waive compliance with the bulk sales laws of any applicable jurisdiction, and WWG and the Principals hereby agree to indemnify and hold harmless the Purchaser and its Affiliates from and against any claims arising out of or due to the failure to comply with such bulk sales laws.

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Section 6.3        Equity Securities of WWG. As long as WWG beneficially owns any equity interests in the Company, no Principal shall sell or in any other way transfer, assign, distribute, pledge, encumber or otherwise dispose of (a "Transfer") any of the equity securities of WWG or permit WWG to issue any additional equity securities (the "WWG Interests"); provided, however, (i) WWG may issue membership interests to Brian Murphy pursuant to the terms and conditions of that certain letter agreement attached hereto as Exhibit D, and (ii) each Principal (x) may Transfer WWG Interests to another Principal or (y) for estate planning purposes, may Transfer WWG Interests to a Family Member (as hereinafter defined) as long as the total equity securities and voting power retained in the aggregate by such Principal (exclusive of equity securities owned by Family Members) in WWG constitutes a majority of the equity securities and voting power in WWG, and such Family Member agrees in writing to the Purchaser to be bound by the provisions of this Section 6.3 as if it were a member of WWG.  Without limiting the foregoing, in the event that at any time on or after the date of this Agreement a holder of equity securities of WWG Transfers some or all of such equity securities, then WWG shall upon receiving notice of such Transfer promptly provide the Purchaser with written notice of such Transfer.  To the extent known, such notice shall specify the names and addresses of the transferee and transferor of such equity securities, the number and type or class of equity securities Transferred, and all of the other material terms and conditions of such Transfer.  As used herein, the term "Family Member" of any Principal shall mean (i) the spouse and lineal descendants of such Principal, (ii) the spouses of any such descendants, (ii) the legal representatives of any Person that falls within clause (i) or (ii) hereof, and (iii) the trustee of any trust of which any of the Persons falling with clause (i) or (ii) shall be the only beneficiaries entitled to the income or principal.

Section6.4        Change of Name. At the Closing, the Company shall execute appropriate documents to change (x) TEAM’s name to a name dissimilar to "TEAM Enterprises", (y) O-A’s name to a name dissimilar to "Outer-Active" and (z) Pulse’s name to a name dissimilar to "Pulse", and promptly thereafter shall file any necessary documents to reflect such name changes with the appropriate Secretary of State and the appropriate authorities in the other states in which each such entity is qualified to do business.

Section6.5        Brian Murphy Side Letter. WWG covenants and agrees to use its best efforts following the Closing to consummate the transactions contemplated by the Side Letter in accordance with the terms and conditions thereof.

ARTICLE VII

SURVIVAL; INDEMNITY

Section 7.1       Survival.   Notwithstanding any right of any party hereto fully to investigate the affairs of any other party, and notwithstanding any knowledge of facts determined or determinable pursuant to such investigation or right of investigation, each party hereto shall have the right to rely fully upon the representations, warranties, covenants and agreements of the other parties contained in this Agreement and the Schedules, if any, furnished by any other party pursuant to this Agreement, or in any certificate or document delivered at the Closing by any other party.  Subject to the limitations set forth in Section 7.6, the respective representations, warranties, covenants and agreements of the WWG, the Principals and the Purchaser contained in this Agreement shall survive the Closing.

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Section 7.2         Obligation of WWG and the Principals to Indemnify.

7.2.1      General Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, WWG and the Principals hereby agree, jointly and severally, to indemnify the Purchaser and its affiliates, stockholders, officers, directors, employees, agents, representatives and successors, permitted assignees of the Purchaser and their affiliates (individually, a "Purchaser Indemnified Party" and collectively, the "Purchaser Indemnified Parties") against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to pay on behalf of or reimburse the Purchaser Indemnified Parties as and when incurred for, any and all liabilities (including liabilities for Taxes), obligations, losses, damages, penalties, demands, claims, actions, suits, judgments, settlements, penalties, interest, out-of-pocket costs, expenses and disbursements (including reasonable costs of investigation, and reasonable attorneys’, accountants' and expert witnesses' fees) of whatever kind and nature (collectively, "Losses"), that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation contained in Article III.B hereof or in any certificate delivered by WWG or the Principals at the Closing; (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of WWG or the Principals contained in Article III.B hereof or in any certificate delivered by WWG or the Principals at the Closing; (c) any breach or failure by WWG or the Principals to comply with, perform or discharge any obligation, agreement or covenant by WWG or the Principals contained in this Agreement; (d) any liability or obligation or any assertion against any Purchaser Indemnified Party, arising out of or relating, directly or indirectly, to any Excluded Asset or any Retained Liability (as such terms are defined in the NT Conveyance Document) or other liability arising, in whole or in part, out of the conduct of the business of WWG, TEAM, O-A, Pulse, the Company or any Subsidiary prior to the Closing except for the Assumed Liabilities (as such term is defined in the NT Conveyance Document); (e) any litigation or claim disclosed on Schedule 3.10 to this Agreement; (f) any liability or obligation arising out of or relating, directly or indirectly, to the classification of any individual performing services for any of WWG, TEAM, NT, O-A or Pulse (i) as an independent contractor, (ii) as a freelancer, (iii) as a consultant or (iv) in any other capacity other than as an employee; (g) any liability or obligation arising out of or relating, directly or indirectly, to any violation by WWG, TEAM, NT, O-A or Pulse, on or prior to the Closing, of the Fair Labor Standards Act or any similar state or local wage and hour Law, Order, ordinance or regulation; and (h) the failure of the TEAM, the Company or any Subsidiary to qualify to do business in any applicable jurisdiction in the United States.

7.2.2      Special Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, each of the Principals hereby severally agrees to indemnify the Purchaser Indemnified Parties against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to assume liability for, the payment of all Losses that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of or in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of a representation or warranty by such Principal contained in Article III.A hereof; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting the Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of such Principal contained in Article III.A hereof or in any certificate delivered by such Principal at the Closing.  Any claim for indemnity made under this Section 7.2.2 shall not be construed as a claim under Section 7.2.1 hereof even if the Purchaser Indemnified Party could have made a claim under Section 7.2.1 hereof in respect of the same matters.

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7.2.3      "Losses".  The term "Losses" as used in this Article VII is not limited to matters asserted by third parties against any Purchaser Indemnified Party but includes Losses incurred or sustained by a Purchaser Indemnified Party in the absence of Third Party Claims (as defined in Section 7.4.2 hereof).

Section 7.3         Obligation of the Purchaser to Indemnify.   Subject to the limitations set forth in Section 7.6.3 hereof, the Purchaser hereby agrees to indemnify WWG and the Principals (individually a "Company Indemnified Party" and collectively, the "Company Indemnified Parties") against, and to protect, save and keep harmless the Company Indemnified Parties from, and to pay on behalf of or reimburse the Company Indemnified Parties as and when incurred for, any and all Losses that may be imposed on or incurred by the Company Indemnified Parties as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any Company Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (c) any breach or failure by the Purchaser to comply with, perform or discharge any obligation, agreement or covenant by the Purchaser contained in this Agreement.

Section 7.4         Indemnification Procedures.

7.4.1      Non-Third Party Claims.

(a)         In the event that any Person entitled to indemnification under this Agreement (an "Indemnified Party") asserts a claim for indemnification which does not involve a Third Party Claim (as defined in Section 7.4.2) (a "Non-Third Party Claim"), against which a Person is required to provide indemnification under this Agreement (an "Indemnifying Party"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Non-Third Party Claim Notice"), which Non-Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party.

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(b)         The Indemnifying Party may acknowledge and agree by written notice (the "Non-Third Party Acknowledgement of Liability") to the Indemnified Party to satisfy the Non-Third Party Claim within 30 days of receipt of the Non-Third Party Claim Notice.  In the event that the Indemnifying Party disputes the Non-Third Party Claim, the Indemnifying Party shall provide written notice of such dispute (the "Non-Third Party Dispute Notice") to the Indemnified Party within 30 days of receipt of the Non-Third Party Claim Notice (the "Non-Third Party Dispute Period"), setting forth a reasonable basis of such dispute.  In the event that the Indemnifying Party shall fail to deliver the Non-Third Party Acknowledgement of Liability or Non-Third Party Dispute Notice within the Non-Third Party Dispute Period, the Indemnifying Party shall be deemed to have acknowledged and agreed to pay the Non-Third Party Claim in full and to have waived any right to dispute the Non-Third Party Claim.  Once the Indemnifying Party has acknowledged and agreed to pay any Non-Third Party Claim pursuant to this Section 7.4.1, or once any dispute under this Section 7.4.1 has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction, subject to the provisions of Section 7.6.1, the Indemnifying Party shall pay the amount of such Non-Third Party Claim to the Indemnified Party within 10 days of the date of acknowledgement or resolution, as the case may be, to such account and in such manner as is designated in writing by the Indemnified Party.

7.4.2      Third-Party Claims.

(a)          In the event that any Indemnified Party asserts a claim for indemnification or receives notice of the assertion of any claim or of the commencement of any action or proceeding by any Person who is not a party to this Agreement or an affiliate of a party to this Agreement in respect of which such Indemnified Party is entitled to indemnification by an Indemnifying Party under this Agreement (a "Third Party Claim"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Third Party Claims Notice") within 20 days after asserting or learning of such Third Party Claim (or within such shorter time as may be necessary to give the Indemnifying Party a reasonable opportunity to respond to such claim), together with a statement specifying the basis of such Third Party Claim.  The Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party. The Indemnifying Party must provide written notice to the Indemnified Party that it is either (i) assuming responsibility for the Third Party Claim or (ii) disputing the claim for indemnification against it (the "Indemnification Notice").  The Indemnification Notice must be provided by the Indemnifying Party to the Indemnified Party within 15 days after receipt of the Third Party Claims Notice or within such shorter time as may be necessary to give the Indemnified Party a reasonable opportunity to respond to such Third Party Claim (the "Indemnification Notice Period").

(b)         If the Indemnifying Party provides an Indemnification Notice to the Indemnified Party within the Indemnification Notice Period that it assumes responsibility for the Third Party Claim, the Indemnifying Party shall conduct at its expense the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party.  The Defense Notice shall specify the counsel it will appoint to defend such claim ("Defense Counsel") provided, however, that the Indemnified Party shall have the right to approve the Defense Counsel, which approval shall not be unreasonably withheld or delayed.  In the event that the Indemnifying Party fails to give the Indemnification Notice within the Indemnification Notice Period, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim without the prior consent of the Indemnifying Party and subject to the provisions of Section 7.6.1, the Indemnifying Party will be liable for all costs, expenses, settlement amounts or other Losses paid or incurred in connection therewith.

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(c)         In the event that the Indemnifying Party provides in the Indemnification Notice that it disputes the claim for indemnification against it, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim, without the prior consent of the Indemnifying Party. Once such dispute has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction or by mutual agreement of the Indemnified Party and Indemnifying Party, subject to the provisions of Section 7.6.1, the Indemnifying Party shall within 10 days of the date of such resolution or agreement, pay to the Indemnified Party all Losses paid or incurred by the Indemnified Party in connection therewith.

(d)         In the event that the Indemnifying Party delivers an Indemnification Notice pursuant to which it elects to conduct the defense of the Third Party Claim, the Indemnifying Party shall be entitled to have the exclusive control over the defense of the Third Party Claim and the Indemnified Party will cooperate in good faith with and make available to the Indemnifying Party such assistance and materials as it may reasonably request, all at the expense of the Indemnifying Party.  The Indemnified Party shall have the right at its expense, which shall not be reimbursable by the Indemnifying Party, to participate in the defense assisted by counsel of its own choosing.  The Indemnifying Party will not settle the Third Party Claim or cease to defend against any Third Party Claim as to which it has delivered an Indemnification Notice (as to which it has assumed responsibility for the Third Party Claim), without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed; provided, however, such consent may be withheld for any reason if, as a result of such settlement or cessation of defense, (i) injunctive relief or specific performance would be imposed against the Indemnified Party, or (ii) such settlement or cessation would lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder.

(e)         If an Indemnified Party refuses to consent to a bona fide offer of settlement which the Indemnifying Party wishes to accept, which provides for a full release of the Indemnified Party and its affiliates relating to the Third Party Claims underlying the offer of settlement and solely for a monetary payment, the Indemnified Party may continue to pursue such matter, free of any participation by the Indemnifying Party, at the sole expense of the Indemnified Party. In such an event, the obligation of the Indemnifying Party shall be limited to the amount of the offer of settlement which the Indemnified Party refused to accept plus the reasonable costs and expenses of the Indemnified Party incurred prior to the date the Indemnifying Party notified the Indemnified Party of the offer of settlement.

(f)          Notwithstanding clause (d) above, the Indemnifying Party shall not be entitled to control, but may participate in, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of (x) that part of any Third Party Claim (i) that seeks a temporary restraining order, a preliminary or permanent injunction or specific performance against the Indemnified Party, or (ii) to the extent such Third Party Claim involves criminal allegations against the Indemnified Party or (y) the entire Third Party Claim if such Third Party Claim would impose liability on the part of the Indemnified Party in an amount which is greater than the amount as to which the Indemnified Party is entitled to indemnification under this Agreement.

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(g)         A failure by an Indemnified Party to give timely, complete or accurate notice as provided in this Section 7.4 will not affect the rights or obligations of any party hereunder except and only to the extent that, as a result of such failure, any party entitled to receive such notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise directly and materially damaged as a result of such failure to give timely notice.

Section 7.5         Right of Offset.   Without limiting any other rights or remedies available to it, the Purchaser shall be entitled to offset any claim for indemnity made pursuant to Section 7.2 and in accordance with Section 7.4, against any payment of the Purchase Price due under Section 2.1; provided, however, the Purchaser may only exercise such right of offset in respect of claims relating to Losses actually incurred by a Purchaser Indemnified Party (in which case the amount of such offset shall be the amount of such actual Loss) or claims actually asserted by a third party (in which case the amount of the offset shall not exceed the Purchaser's good faith, reasonable estimate of the amount of indemnifiable Losses that will ultimately be payable to a Purchaser Indemnified Party in respect of such claims).  If any such claims for indemnity are resolved in favor of WWG and the Principals by mutual agreement or otherwise, or if the amount withheld exceeds the amount ultimately payable to a Purchaser Indemnified Party in respect of such claim, the Purchaser shall pay to WWG the excess amount withheld with respect to such claim, together with interest thereon for the period such amount has been withheld at a rate equal to the published prime rate of interest of J.P. Morgan Chase in New York, in effect from time to time during the relevant period.

Section 7.6         Limitations On and Other Matters Regarding Indemnification.

7.6.1      Indemnity Cushion and Cap.  Subject to Section 7.6.5, neither WWG nor the Principals shall have any liability to any Purchaser Indemnified Party with respect to Losses arising out of any of the matters referred to in Section 7.2 until such time as the amount of such liability shall exceed $50,000 in the aggregate (in which case WWG and the Principals shall be liable for all Losses in excess of $50,000).  Notwithstanding anything to the contrary herein, subject to Section 7.6.5 below, the maximum aggregate liability of WWG and the Principals for indemnity payments under Section 7.2 shall be an amount equal to $11,000,000.  Notwithstanding the foregoing, each Principal's maximum aggregate liability for indemnity payments pursuant to Section 7.2.1 and Section 7.2.2, subject to Section 7.6.5 below, shall be such Principal's allocable portion of the total Purchase Price paid or payable pursuant to Section 2.1 of this Agreement.

7.6.2      Termination of Indemnification Obligations of WWG and the Principals.  Subject to Section 7.6.5, the obligation of WWG and the Principals to indemnify under Section 7.2 hereof shall terminate on April 30, 2012, except as to matters as to which the Purchaser Indemnified Party has made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.3      Termination of Indemnification Obligations of the Purchaser.  The obligation of the Purchaser to indemnify under Section 7.3 hereof shall terminate on April 30, 2012, except as to matters as to which WWG or the Principals have made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto for such party shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

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7.6.4      Treatment.  Any indemnity payments by an Indemnifying Party to an Indemnified Party under this Article VIII shall be treated by the parties as an adjustment to the Purchase Price.

7.6.5      Exceptions.  Each of the limitations set forth above in this Section 7.6 shall in no event (a) apply to any Losses incurred by a Purchaser Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by WWG or the Principals; (ii) any breach of a representation or warranty contained in Section 3.1, 3.2, 3.6, 3.11, 3.19, 3.25 or any other provision hereof relating to Taxes, (iii) any indemnification obligation under Sections 7.2.1(c), 7.2.1(d), 7.2.1(e), 7.2.1(f), 7.2.1(g) or 7.2.1(h); and (iv) the obligations of WWG and the Principals set forth in Section 8.1 to pay certain expenses; or (b) apply to any Losses incurred by a Company Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by the Purchaser; (ii) any indemnification obligation under Section 7.3(c); and (iii) the Purchaser's obligations set forth in Section 8.1 to pay certain expenses.

7.6.6      Control by MDC.  All decisions and determinations to be made by the Purchaser and/or a Purchaser Indemnified Party under this Article VII shall be made by MDC in the name of and on behalf of the Purchaser and/or such other Purchaser Indemnified Party.

ARTICLE VIII

MISCELLANEOUS

Section 8.1         Expenses.   Except as otherwise provided in this Agreement, the Purchaser, on the one hand, and the Principals and WWG, on the other hand, shall pay its or his own expenses relating to the transactions contemplated by this Agreement, including, without limitation, the fees and expenses of their respective counsel, financial advisors and accountants.

Section 8.2         Governing Law; Service of Process and Consent to Jurisdiction. The interpretation and construction of this Agreement, and all matters relating hereto (including, without limitation, the validity or enforcement of this Agreement), shall be governed by the laws of the State of Delaware without regard to any conflicts or choice of laws provisions of the State of Delaware that would result in the application of the law of any other jurisdiction.  Each of the parties hereto agrees that delivery of process, summons, notice or document in accordance with Section 8.2 shall be effective service of process for any action, suit or proceeding arising out of this Agreement.  Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the District of Delaware or any court of the State of Delaware in any action, suit or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby, and agrees that any such action, suit or proceeding shall be brought only in such court.  Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such action, suit or proceeding brought in such a court and any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

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Section 8.3        "Person" Defined.   "Person" shall mean and include an individual, a company, a joint venture, a corporation (including any non-profit corporation), an estate, an association, a trust, a general or limited partnership, a limited liability company, a limited liability partnership, an unincorporated organization and a government or other department or agency thereof.

Section 8.4         "Knowledge" Defined.   Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of WWG, such term shall be limited to the actual knowledge of the Chief Financial Officer of TEAM, the Company and/or NT and the Principals, and unless otherwise stated, such knowledge that would have been discovered by the Chief Financial Officer of TEAM, the Company and/or NT and the Principals after reasonable inquiry.  Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Purchaser, as the case may be, such term shall be limited to the actual knowledge of the executive officers of such entity and unless otherwise stated, such knowledge that would have been discovered by such executive officers after reasonable inquiry.

Section 8.5         "Affiliate" Defined.   As used in this Agreement, an "affiliate" of any Person, shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

Section 8.6         Captions.   The Article and Section captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement.

Section 8.7         Publicity.   Subject to the provisions of the next sentence, no party to this Agreement shall, and the Principals shall use reasonable efforts to insure that no representative of WWG, WWG2, TEAM, the Company or any Subsidiary shall, issue any press release or other public document or make any public statement relating to this Agreement or the matters contained herein without obtaining the prior approval of the Purchaser and the Principals.  Notwithstanding the foregoing, the foregoing provision shall not apply to the extent that MDC is required to make any announcement relating to or arising out of this Agreement by virtue of the securities laws of the United States or Canada or the rules and regulations promulgated thereunder or other rules of the NASDAQ Stock Market, Toronto Stock Exchange or the United States Securities and Exchange Commission or any announcement by any party or the Company pursuant to applicable law or regulations.

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Section 8.8         Notices.   Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to any other party shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next business day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to the Purchaser, addressed to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

c/o MDC Partners Inc.

950 Third Avenue

New York, New York 10022

Attention:  General Counsel

and (which shall not constitute notice)

Davis & Gilbert LLP

1740 Broadway

New York, New York 10019

Attention:  Brad J. Schwartzberg, Esq.

If to WWG or the Principals, to:

c/o TEAM Enterprises Inc.

110 E Broward Blvd. Suite 2450

Fort Lauderdale, FL 33301

Attention: Daniel K. Gregory

with a copy to (which shall not constitute notice):

Kopelowitz Ostrow 

Ferguson Weiselberg Keechl

200 SW 1st Avenue, 12th Floor

Fort Lauderdale, FL 33301

Attention: Jeffrey M. Ostrow, Esq.

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

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Section 8.9        Parties in Interest.   This Agreement may not be transferred, assigned, pledged or hypothecated by any party hereto, other than by operation of law.  Any purported such transfer, assignment, pledge, or hypothecation (other than by operation of law) shall be void and ineffective.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

Section 8.10      Severability.   In the event any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless be binding upon the parties with the same effect as though the void or unenforceable part had been severed and deleted.

Section 8.11     Counterparts.   This Agreement may be executed in two or more counterparts or by facsimile transmission, all of which taken together shall constitute one instrument.

Section 8.12      Entire Agreement.   This Agreement, together with the Schedules and Exhibits hereto, constitutes the sole, exclusive and only agreements of the parties hereto pertaining to the subject matter hereof, contains all of the covenants, conditions and agreements between the parties, express or implied, whether by statute or otherwise, and sets forth the respective rights, duties and obligations of each party to the other party as of the date hereof. No oral understandings, oral statements, oral promises or oral inducements exist

Section 8.13      Amendments.   This Agreement may not be amended, supplemented or modified orally, but only by an agreement in writing signed by each of the parties hereto.

Section 8.14      Third Party Beneficiaries.   Each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto and their respective successors and assigns as permitted under Section 8.9, except the Purchaser Indemnified Parties as provided in Article VII hereof and with respect to the provisions of Section 7.6.6, MDC.

Section 8.15      Use of Terms.   Whenever the context so requires or permits, all references to the masculine herein shall include the feminine and neuter, all references to the neuter herein shall include the masculine and feminine, all references to the plural shall include the singular and all references to the singular shall include the plural. Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.

Section 8.16      "Liens" Defined.   With respect to any asset, a "Lien" shall mean (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (other than an operating lease) (or any financial lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

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Section 8.17      No Strict Construction; Representation by Counsel.  The language used in this Agreement will be deemed to be the language chosen by the parties hereto 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.  The provisions of this Agreement shall be construed according to their fair meaning and neither for nor against any party hereto irrespective of which party caused such provisions to be drafted.  Each of the parties acknowledges that it has been represented by an attorney in connection with the preparation and execution of this Agreement.

Section 8.18      Representative.  Each of the Principals and WWG hereby appoints Gregory as his or its exclusive agent and attorney-in-fact (the "Representative") (i) to give and receive notices and communications with respect to the provisions of this Agreement, (ii) to amend the terms of this Agreement, (iii) to agree to, negotiate, enter into settlements or compromises of matters arising under the provisions of this Agreement, and (iv) to take any and all actions necessary or appropriate in the judgment of the Representative to be taken on behalf of the Principals and WWG under such provisions of this Agreement.  Such agency and that of any successor representative is irrevocable and coupled with an interest; provided, however, the Representative shall have no authority to act on behalf of any Principal and WWG with respect to an indemnity claim under Section 7.2.2.  In the event the Representative refuses to, or is no longer capable of, serving as the Representative hereunder, the other Principals shall promptly appoint a successor Representative who shall thereafter be the successor Representative hereunder and the Representative shall serve until such successor is duly appointed and qualified to act hereunder.  The Principals and WWG hereby agree that the Representative shall not have any liability to the Company or any Subsidiary for any action he takes or omits to take hereunder (or under any agreement or instrument referred to herein) in his capacity as Representative, unless such action or omission constitutes bad faith or willful misconduct by the Representative.  Notices or communications to or from the Representative shall constitute notice to or from the Principals and/or WWG in respect of matters relating to this Agreement.  Any decision, act, consent or instruction of the Representative shall constitute a decision of all of the Principals and WWG, and shall be final, binding and conclusive upon each Principal and WWG, and the Purchaser may rely upon any decision, act, consent or instruction of the Representative as being the decision, act, consent or instruction of WWG and each and every Principal.

Section 8.19      Guaranty.  MDC hereby agrees to pay, or cause the Purchaser to pay, when due, each payment of Purchase Price required pursuant to Article II above and any indemnification obligations of the Purchaser pursuant to Article VII above.

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IN WITNESS WHEREOF, the parties hereto have executed this Membership Interest Purchase Agreement, on the day and year first above written.

MDC ACQUISITION INC.
By:	/s/
	Name: Michael Sabatino
	Title: President
WWG, LLC
By:	/s/
	Daniel K. Gregory
	Managing Member
/s/
Todd Graham
/s/
Kevin Berg
/s/
Vincent Parinello
/s/
Daniel K. Gregory
/s/
Stephen Groth
/s/
Sean M. O'Toole
MDC PARTNERS INC. (solely with respect to Sections 7.6.6 and 8.19)
By:	/s/
	Name: Mitchell Gendel
	Title: General Counsel

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EX-10.2.2 5 v183284_ex10-2x2.htm

Exhibit 10.2.2

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

TEAM HOLDINGS LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this “Agreement”) dated as of March 1, 2010, is made and entered into by and among TEAM HOLDINGS LLC, a Delaware limited liability company (the “Company”), MDC ACQUISITION INC., a Delaware corporation (“MDC Holdco”), and WWG, LLC, a Florida limited liability company (“WWG”), WWG2, LLC, a Florida limited liability company ("WWG2", together with MDC Holdco and WWG are collectively referred to as the “Members” and individually a “Member”).   Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article XIII.

WHEREAS, WWG was (x) the sole shareholder of TEAM Enterprises, Inc. a Massachusetts corporation ("TEAM") and (y) the sole member of (A) OuterActive, LLC, a Delaware limited liability company ("O-A") and (B) Pulse Marketing, LLC, a Delaware limited liability company ("Pulse");

WHEREAS, WWG formed NEW TEAM LLC, a Delaware limited liability company ("NT"), as its sole member;

WHEREAS, WWG caused TEAM to contribute substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business, to NT pursuant to a Contribution Agreement (General Assignment, Bill of Sale and Assumption Agreement) (the "NT Conveyance Document");

WHEREAS, WWG and WWG2, LLC formed (the "Formation") the Company, with WWG owning 99% of the issued and outstanding membership interests in the Company and WWG2 owning 1% of the issued and outstanding membership interests in the Company (the membership interests of the Company collectively referred to as the "Membership Interests");

WHEREAS, simultaneously with the Formation, WWG and WWG2 executed and delivered a Limited Liability Company Agreement of the Company (the "Original Operating Agreement"), pursuant to which WWG transferred 100% of its equity ownership in (x) NT, (y) O-A and (z) Pulse to the Company, such that following such transfer, the Company was the sole member of each of NT, O-A and Pulse;

WHEREAS, WWG desired to sell 60% of the Membership Interests in the Company to MDC Holdco and, in connection therewith, to redesignate the Membership Interests as Class A Units, Class B Units and Class C Units;

WHEREAS, pursuant to the Membership Unit Purchase Agreement of even date herewith (the “Purchase Agreement”), WWG sold, transferred, conveyed and delivered to MDC Holdco a 60% membership interest in the Company represented by 600 Class A Units,  such that immediately after giving effect to such transfer, the issued and outstanding Units of the Company were to be as follows:  MDC Holdco – 600 Class A Units; WWG – 310 Class B Units and 80 Class C Units, WWG2 – 10 Class B Units in accordance with the terms of this Agreement;

WHEREAS, the Company wishes to create profits interests to be available for grant to certain Participants pursuant to that certain Restricted Unit Plan effective as of March 1, 2010 (the “Profits Interest Plan”);

WHEREAS, the Members now desire to enter into this Agreement to supersede the Original Operating Agreement, as amended, to designate the existing Membership Interests as Class A Units, Class B Units and Class C Units, to provide for the admission of MDC Holdco as a member, to create Class D Units for use under the Profits Interest Plan and to promote their interests and those of the Company by making provisions in this Agreement to govern their relations as Members;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members and the other parties hereto do hereby agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

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

Section 1.3             Offices; Registered Agent.  The principal place of business of the Company shall be 110 East Broward Boulevard, Suite 2450, Fort Lauderdale, Florida 33301 or such other principal place of business as the Managers (as defined in Section 11.5) may from time to time determine.  The Company may have, in addition to such office, such other offices and places of business at such locations, both within and without the State of Delaware, as the Managers may from time to time determine or the business and affairs of the Company may require.  The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person (as defined in Section 13.1) as the Managers may designate from time to time in the manner provided by law.

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

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

ARTICLE II

MEMBERS; MEMBERSHIP INTERESTS; UNITS

Section 2.1             Members and Membership Units.  The Company is authorized to issue 600 Class A Units, 320 Class B Units, 80 Class C Units and 80 Class D Units, all of which have been or are hereby issued and are outstanding, or are reserved for future issuance under the Profits Interest Plan, and allocated among the Members as set forth on Schedule 2.1.  Upon any change in the Members or Units, including by reason of the issuance of additional Units, the Members agree to complete a revised Schedule 2.1 hereof, which shall be deemed incorporated into this Agreement as part of this Section 2.1.

Section 2.2             Classes of Units.

(a)           Class A Units.  The Class A Units shall have the following characteristics: (i) an initial Unit Capital Account (as defined in Section 7.2(e) hereof), (ii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iii) entitlement to distributions as provided in Sections 3.4 and 9.2, and (iv) voting rights equal to one (1) vote per Unit.

(b)           Class B Units. The Class B Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

(c)           Class C Units. The Class C Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

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(d)           Class D Units.  The Class D Units shall have the following characteristics: (i) an initial Unit Capital Account of $0, (ii) provisions relating to transfer as provided in Article X hereof, (iii) an entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) an entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) no voting rights.  All Class D Units are intended to be “profits interests” within the meaning of Revenue Procedures 93-27 and 2001-43.  In accordance with Revenue Procedure 2001-43, the Company shall treat any such Member issued a Class D Unit as the owner of such Unit, and shall file its IRS Form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with such Class D Unit. Each such Member agrees to take into account such distributive share in computing its federal, state and local income or franchise tax liability for the entire period during which it holds the Class D Unit issued on the date hereof.  The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the fair market value of such Class D Unit.   The undertakings contained in this Section 2.2(d) shall be construed in accordance with Section 4 of Revenue Procedure 2001-43.  Notwithstanding any other provision of this Agreement the Managers shall have the right to amend, and the Members shall take all actions necessary to cause the Managers to amend, this Agreement, in anticipation of or following the issuance of final Treasury Regulations, as determined by the Managers in good faith, to provide for (i) the election of a safe harbor under Treasury Regulation Section 1.83-3(l) (or any similar provision) under which the fair market value of a Class D Units that is transferred in connection with the performance of services is treated as being equal to the liquidation value of that interest, (ii) an agreement by the Company and all of its Members to comply with the requirements set forth in such Regulations and Internal Revenue Service Notice 2005-43 (and any other guidance provided by the Internal Revenue Service with respect to such election) with respect to all Units transferred in connection with the performance of services while the election remains effective, and (iii) any other amendments reasonably related thereto or reasonably required in connection therewith. In executing this Agreement, the Members authorize the Company to utilize the same valuation methodology provided for in Proposed Treasury Regulations Section 1.83-3(l) in determining the fair market value of any Class D Units issued prior to the effective date of such Treasury Regulation.

Section 2.3             Transfer of Units.  In the event a Member sells all or a portion of its Membership Interests in accordance with Article X hereof, then effective as of the date of the sale and subject to compliance with Section 10.1 hereof, such Member shall automatically cease to be a Member in the Company as to such sold Unit.  Upon the acquisition by MDC Holdco of any other Units pursuant to the procedures set forth in Article X hereof or the Profits Interests Plan, MDC Holdco shall have all of the rights, powers and duties associated with such Units.

Section 2.4             Additional Members and Membership Interests.  Additional Persons may be admitted to the Company as Members and Membership Interests may be created and issued to such Persons on such terms and conditions as the Members shall approve, subject to Section 4.1 hereof.  The terms of admission or issuance may specify the creation of different classes or groups of Members having different rights, powers and duties.  The creation of any new class or group of Members shall be indicated in an amendment to this Agreement in accordance with Section 14.4 hereof and such amendment shall indicate the different rights, powers and duties of the classes or groups of Members.  No Member shall be admitted unless such Person shall agree to be bound by the terms of this Agreement, as such agreement may be amended.

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

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

Section 2.7             Certification of Units. The Company may at its election issue certificates to the Members representing the Units held by such Member. If such election is approved by the Managers, then this Section 2.7 shall apply and not otherwise:

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

(b)             The transfer register or transfer book and blank certificates shall be kept by the secretary of the Company or by any transfer agent or registrar approved by the Managers for that purpose. The certificates shall be numbered and registered in the share or unit register or transfer books of the Company as they are issued. Except to the extent that the Company shall have received written notice of an assignment of any Unit in the Company, the Company shall be entitled to treat the Person in whose name any certificates issued by the Company stand on the books of the Company as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such Unit on the part of any other Person.

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

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

ARTICLE III

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS

Section 3.1           Capital Account.

The Capital Accounts of the Members shall be computed in accordance with Section 7.2 below.

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

Section 3.3           Allocation of Profits and Losses.

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

(i)           Profits shall be allocated as follows:

(A) First, to those Members to whom GAAP PBT (as such term is defined in Section 13.1) for such calendar year and each prior calendar year since the Effective Time has been allocated under Section 3.5 or Section 3.6(b) until the excess of the allocation to each such Member of Profits under this Section 3.3(a)(i) over any allocation to each such Member of Losses under Section 3.3(a)(ii) for such calendar years equals the amount of GAAP PBT so allocated to each such Member during such calendar years; and

(B) Thereafter, to the Members holding Class A Units, Class B Units and Class C Units in accordance with the number of such Units held by them.

(ii)           Losses shall be allocated as follows:

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(A) First, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(B) over Losses allocated under this Section 3.3(a)(ii)(A), 100% to the Members in the proportion in which such excess was allocated;

(B) Second, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(A) over Losses allocated under this Section 3.3(a)(ii)(B), 100% to the Members in the proportion in which such excess was allocated;

(C) Third, to the Members holding Class A Units, Class B Units and Class C Units in accordance with the number of such Units held by them.

(b)             In the case of any property contributed to the Company by any Member which at the time of contribution has an adjusted tax basis which differs from its fair market value, items of Profits, Losses, income, gain and deduction for income tax purposes shall be allocated as required under Section 704(c) of the Code to take into account such difference.   The parties agree that such allocations will be made following the traditional method with remedial allocations.

(c)             Notwithstanding anything to the contrary in this Agreement, all items of income attributable to any:  (A) change in method of accounting for a taxable period ending on or prior to the Closing Date or a change in method required on account of the transactions contemplated to occur on the Closing Date, whether under Section 481 or otherwise; (B) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); and (C) installment sale or open transaction disposition made on or prior to the Closing Date, shall be allocated 100% to WWG in accordance with its interest.  The parties agree that if the allocation provided for in the preceding sentence cannot be done, the Managers shall cause the Company to allocate items of income, gain, deduction, and loss among the Members to achieve substantially the same results as if such allocation had been done.  In addition, an amount of income equal to any income triggered to MDC Holdco and/or the Company on account of any deemed assumption by either or both of them of any deferred revenue of WWG as of the Closing Date shall be allocated 100% to WWG in accordance with its interest.

(d)             Any item of taxable income, gain, loss or deduction of the Company (as well as any credits or the basis of property to which such credits apply) as determined for federal income tax purposes shall be allocated in the same manner as the corresponding income, gain, loss, or deduction is allocated under Section 3.3(a) (as modified by Section 3(e)).  Allocations pursuant to this Section 3.3(d) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

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(e)             Special Allocations and Limitations

(1)           In the event a Member unexpectedly receives in any taxable year any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) which cause or increase an Adjusted Capital Account Deficit (as defined in Section 13.1) of such Member, items of Company income and gain shall be specially allocated to such Member in such taxable year (and, if necessary in subsequent taxable years), in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible.

(2)           Notwithstanding the provisions of Section 3.3(a), in no event shall Losses of the Company be allocated to a Member if such allocation would result in such Member’s having an Adjusted Capital Account Deficit at the end of any taxable year.  All Losses in excess of the limitation set forth in this Section 3.3(e)(2) shall be allocated to the Members with positive balances in their Capital Accounts, as a class pro rata in proportion to such positive balances.

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

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

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

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

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

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

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

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

(5)           Solely for purposes of determining a Member’s proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Members’ interests in Company profits are in proportion to their Units, and, for purposes of allocating Nonrecourse Liabilities (as defined in Section 13.1) of the Company among the Members pursuant to Treasury Regulation Section 1.752-3(a)(3), the parties agree that each Member’s interest in Company profits shall equal its Units.

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

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(7)           For purposes of determining the character (as ordinary income or capital gain) of any Profits allocated to the Members pursuant to this Section 3, such portion of Profits that is treated as ordinary income attributable to the recapture of depreciation shall, to the extent possible, be allocated among the Members in the proportion which (i) the amount of depreciation previously allocated to each Member bears to (ii) the total of such depreciation allocated to all Members.  This Section 3.3(f)(7) shall not alter the amount of allocations among the Members pursuant to this Section 3, but merely the character of income so allocated.

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

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

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

Section 3.4            Distributions.

(a)           Subject to the making of the Tax Distributions (as defined in clause (b) below), to the extent permitted by the Act, the Company shall distribute Cash Flow (as defined in Section 13.1) of the Company as follows:

(i) first, distributions of Cash Flow generated by the Company in respect of any calendar year, shall be distributed 100% to the holders of the Class A Units in an amount equal to the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class A Distribution Shortfall Amount (as defined in Section 13.1) for such year;

(ii) thereafter, distributions of Cash Flow generated by the Company in respect of any calendar year shall be distributed to the holders of the Class B Units, Class C Units and Class D Units in an amount no greater than the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the sum of the Class B Distribution Shortfall Amount, Class C Distribution Shortfall Amount and Class D Shortfall Amount (each as defined in Section 13.1) for such year, distributed to the holders in the proportion and the amounts in which such sum was attributable to such holders.

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Distributions described above shall be made on an annual basis, generally in arrears, based upon the financial statements of the Company and its subsidiaries then available to the Managers.

(b)           Notwithstanding anything in this Agreement to the contrary, in preference to any other distributions pursuant to this Section 3.4, the Members shall cause the Company to distribute cash of the Company to its Members on a quarterly (or other reasonable) basis at least sufficient for each Member to meet such Member’s required federal, state and local income tax payments in respect of such Member’s distributive share of the Company’s taxable income for the current or the prior fiscal year calculated at the maximum individual tax rates for a resident of Florida taking into account the deduction allowable for federal income taxes of any state income taxes (which tax payments shall include (i) estimated tax payments in respect of the current fiscal year and (ii) any remaining payments of income tax on account of the prior fiscal year not funded out of Tax Distributions in respect of estimated payments for such prior fiscal year) (the "Tax Distributions").  For purposes hereof, if a Member is a "pass-through" entity for income tax purposes, the Tax Distributions required hereby shall be made in amounts which are at least sufficient to meet the tax payment requirements of the stockholders or members of such Member in respect of their allocated Profits hereunder. For purposes of Section 3.4(a) hereof, Tax Distributions shall be deemed to be distributions of Cash Flow at the time of such Tax Distribution.

(c)           Any distribution of funds prior to the end of the fiscal year in which such funds came into possession of the Company shall be treated as a non-interest-bearing loan (a "draw") from the Company to each Member receiving such draw and shall be deemed repaid by reducing the amount of each subsequent distribution to the Member receiving such draw pursuant to this Section 3.4(c) by the lesser of (i) the entire amount otherwise distributable to the Member receiving such draw, and (ii) the entire amount of any unrepaid draws pursuant to this Section 3.4(c).

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

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Section 3.5           Allocation of GAAP PBT.

(a)           Subject to Section 3.6(b) below, GAAP PBT (as defined in Section 13.1) for purposes of this Agreement shall be allocated for any calendar year as follows:

(i) first, GAAP PBT shall be allocated to the Loss Account (as defined in Section 3.5(b) below) until such Loss Account shall have been brought to zero;

(ii) next, GAAP PBT generated by the Company in calendar years 2010-2012 shall be allocated 100% to the holders of the Class A Units;

(iii) next, subject to Section 3.5(c) below, GAAP PBT generated by the Company in calendar years 2013 and 2014 shall be allocated 100% to the holders of Class A Units; provided, however, no more than the following shall be allocated to the holders of Class A Units under this Section 3.5(a)(iii) in respect of each of the calendar years set forth below:

Year	Amount
2013	the sum of (a) the Annual Hurdle plus (b) the Class A 2013 Shortfall Amount (such sum, the “2013 Class A Priority Allocation”)
2014	the sum of (a) the Annual Hurdle plus (b) the Class A 2014 Shortfall Amount (such sum, the “2014 Class A Priority Allocation”)

(iv) next, subject to Section 3.5(c) below, with respect to calendar years 2013 and 2014 only, after satisfaction of the allocations in Section 3.5(a)(iii) with respect to such year, GAAP PBT generated by the Company in such years shall be allocated 100% to the holders of Class B Units, Class C Units and Class D Units; provided, however, no more than the following shall be allocated to such holders under this Section 3.5(a)(iv) in respect of such calendar years as set forth below:

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Year	Amount
2013	the result of (x) the 2013 Class A Priority Allocation, multiplied by (y) 40%, divided by (z) 60%, such amount being allocated as follows: (A)     first, an amount equal to 8.0% of the amount of GAAP PBT in excess of Base PBT shall first be allocated to holders of Class D Units (other than MDC Holdco) pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized, with any amount attributable to unissued or cancelled units or Class D Units held by MDC Holdco being allocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them; (B)     next, the remainder shall be allocated pro rata among the holders of Class B Units and Class C Units in accordance with the total number of Class B and Class Units held by them until the Class C Units shall have been allocated an amount of GAAP PBT for 2013 under this clause (B) equal to 8.0% of Base PBT; and (C)     thereafter, any remainder shall be allocated 100% to the holders of Class B Units in accordance with the number of Class B Units held by them.
2014	the result of (x) the 2014 Class A Priority Allocation, multiplied by (y) 40%, divided by (z) 60%, such amount being allocated as follows: (A)     first, an amount equal to 8.0% of the amount of GAAP PBT in excess of Base PBT shall first be allocated to holders of Class D Units (other than MDC Holdco) pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized, with any amount attributable to unissued or cancelled units or Class D Units held by MDC Holdco being allocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them; (B)     next, the remainder shall be allocated pro rata among the holders of Class B Units and Class C Units in accordance with the total number of Class B and Class Units held by them until the Class C Units shall have been allocated an amount of GAAP PBT for 2014 under this clause (B) equal to 8.0% of Base PBT; and (C)     thereafter, any remainder shall be allocated 100% to the holders of Class B Units in accordance with the number of Class B Units held by them.

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(v) thereafter, subject to Section 3.5(c) below, with respect to calendar years 2013 and 2014 only, after satisfaction of the allocations in Sections 3.5(a)(iii) and 3.5(a)(iv) with respect to such year, GAAP PBT generated by the Company shall be allocated as follows:

(A)           32.0% of such additional amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(B)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

(C)           the remainder of the amount to be allocated under this Section 3.5(a)(v) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(vi) thereafter, with respect to the period January 1, 2015 until February 28, 2015, GAAP PBT generated by the Company in such period shall be allocated:

(A)           first, 100% to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them, up to a maximum amount equal to the sum of (i) the 2015 Hurdle plus (ii) the Class A 2015 Shortfall Amount (such sum, the “2015 Class A Priority Allocation”);

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(B)           second, 100% to the holders of Class B Units, Class C Units and Class D Units up to a maximum amount equal to the result of (i) the 2015 Class A Priority Allocation, multiplied by (ii) 40%, divided by (iii) 60%, such amount being allocated among them as follows:

(1)           first, 100% to the holders of Class B and Class C Units allocated pro rata among the holders of Class B Units and Class C Units in accordance with the total number of Class B and Class Units held by them until the Class C Units shall have been allocated an amount of GAAP PBT for 2015 under this clause (B) equal to 8.0% of Base PBT; and

(2)           thereafter, any remaining amount allocated 100% to the holders of Class B and Class D Units, allocated pro rata in accordance with the number of Class B or Class D Units held by such holder out of the total number of Class B and Class D Units authorized but without allocating any amount to MDC Holdco in respect of any Class D Units held by it, with any amount attributable to unissued or cancelled Class D Units or Class D Units held by MDC Holdco being allocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them;

(C)           third, any remaining GAAP PBT shall be allocated as follows:

(1)           32.0% of such amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(2)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

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(3)           the remainder of the amount to be allocated under this Section 3.5(a)(vi)(C) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(vii) thereafter, with respect to the remainder of calendar year 2015, GAAP PBT generated by the Company in such period shall be allocated as follows:

(A)           first, 100% to the holders of Class A Units, Class B and Class C Units allocated pro rata in accordance with the number of Units held by them, until holders of the Class C Units shall have been allocated an aggregate amount of GAAP PBT for 2015 under this clause (A) and Section 3.5(a)(vi) equal to 8.0% of Base PBT;

(B)           thereafter, the remaining GAAP PBT shall be allocated as follows:

(1)           32.0% of such amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(2)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

(3)           the remainder of the amount to be allocated under this Section 3.5(a)(vii)(B) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(viii) thereafter, with respect to calendar year 2016 and all calendar years thereafter, GAAP PBT generated by the Company in such years shall be allocated as follows:

(A)           first, GAAP PBT in excess of Base PBT shall be allocated as follows:

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(1)           32.0% of such amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(2)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco) being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

(3)           the remainder of the amount to be allocated under this Section 3.5(a)(viii)(A) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(B)            then, the remaining GAAP PBT shall be allocated to the holders of Class A, Class B and Class C Units, pro rata in accordance with the number of Class A, Class B or Class C Units held by them.

(b)           Allocation of Annual Loss.  In the event that GAAP PBT for any year shall be less than zero, such amount (expressed as a negative) shall be allocated to a loss account (the “Loss Account”), which shall be required to be brought to zero through allocations of future year allocations of GAAP PBT pursuant to Section 3.5(a)(i) before allocations of positive GAAP PBT shall be made to the Members.

(c)           Effect of Priority Satisfaction Event.  In the event that a Priority Satisfaction Event shall have occurred:

(i)           in respect of allocations being made for calendar years 2010-2012, then (A) allocations for such year shall continue to be made in accordance with Sections 3.5(a)(i) and (ii) for calendar years 2010-2012, (B) no allocations for calendar year 2013 or 2014 shall be made under Sections 3.5(a)(iii), (iv) or (v), and (C) all future allocations for 2013 and 2014 shall be made under Section 3.5(a)(viii) irrespective of the 2016 date limitation set forth therein;

(ii)           in respect of allocations being made for calendar years 2013 or 2014, then (A) no further allocations shall be made to Class A Units under Section 3.5(a)(iii) for such calendar year, (B) holders of Class B, C and D Units shall be entitled to receive an allocation under Section 3.5(a)(iv) in respect of such year of the lesser of (x) the amount remaining available for allocation and (y) 66.67% of the amount allocated to the holders of Class A Units for such calendar year under Section 3.5(a)(ii), (C) any additional allocations for such calendar year shall be made under Section 3.5(a)(v), and (D) allocations for all future years shall be made under Section 3.5(a)(viii) irrespective of the 2016 date limitation set forth therein; or

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(iii)           in respect of allocations being made for calendar year 2015 under Section 3.5(a)(v), then (A) no further allocations shall be made to Class A Units under Section 3.5(a)(vi) for such calendar year, (B) holders of Class B, C and D Units shall be entitled to receive an allocation under Section 3.5(a)(vi) in respect of such period of the lesser of (x) the amount remaining available for allocation and (y) 66.67% of the amount allocated to the holders of Class A Units for such period under Section 3.5(a)(vi), and (C) any additional allocations for 2015 shall be made under Section 3.5(a)(vii) irrespective of the period limitation set forth therein.

(d)           For purposes of this Section 3.5, the following additional definitions shall apply:

(i)           “2010 Hurdle” means the result of (x) the sum of (A) $2,200,000 and (B) FAP divided by 90%, multiplied by (y) 83-1/3%;

(ii)          “2011 Hurdle” means the sum of (x) $2,200,000, (y) FIP times 20%, and (z) SAP divided by 90%;

(iii)         “2012 Hurdle” means the sum of (w) $2,200,000, (x) FIP times 20%, (y) FIIP times 20%, and (z) FIAP divided by 90%;

(iv)         “2015 Hurdle” means the result of (x) the sum of (A) $2,200,000 and (B) FAP divided by 90%, multiplied by (y) 16-2/3%;

(v)          “Annual Hurdle” shall mean the result of (a) the sum of the CP, FIP and  FIIP, (b) multiplied by 20%.

(vi)         “Base PBT” shall mean 2009 PBT (as defined in Section 2.1.3 of the Purchase Agreement).

(vii)        “Class A 2013 Shortfall Amount” shall mean the excess, if any, of (x) the sum of the 2010 Hurdle, 2011 Hurdle and 2012 Hurdle over (y) the aggregate amount of GAAP PBT allocated to the holders of Class A Units pursuant to Section 3.5(a)(ii) in respect of calendar years 2010, 2011 and 2012.

(viii)       “Class A 2014 Shortfall Amount” shall mean the excess, if any, of (x) the sum of the Annual Hurdle and the Class A 2013 Shortfall Amount over (y) the amount of GAAP PBT allocated to the holders of Class A Units pursuant to Section 3.5(a)(iii) in respect of calendar year 2013.

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(ix)         “Class A 2015 Shortfall Amount” shall mean the excess, if any, of (x) the sum of the Annual Hurdle and the Class A 2014 Shortfall Amount over (y) the amount of GAAP PBT allocated to the holders of Class A Units pursuant to Section 3.5(a)(iii) in respect of calendar year 2014.

(x)          “CP”, “FAP”, “FIP”, “FIAP”, “FIIP” and “SAP” shall have the meaning ascribed to such terms in the Purchase Agreement.

(xi)         “Priority Satisfaction Event” shall mean (i) prior to the payment of the FIIP, if the allocation of GAAP PBT to Class A Units pursuant to Section 3.5(a) shall equal the result of (x) $19,000,000 plus (y) FAP divided by 90%, plus (z) SAP divided by 90% or (ii) after the payment of the FIIP, if the allocation of GAAP PBT to Class A Units pursuant to Section 3.5(a) shall equal the result of (w) the sum of CP, FIP, FIIP plus (x) FAP divided by 90%, plus (y) SAP divided by 90%, plus (z) FIAP divided by 90%.

Section 3.6             Company Acquisitions.                                                      

(a)             Consideration of Qualifying Proposals.  WWG may, from time to time, present to the Board, proposals for the Company to acquire businesses that are consistent with the Company’s Board-approved strategy.  If such proposal is a Qualifying Proposal (as defined below) and (x) the MDC Holdco Managers on the Board vote against approval of such acquisition or (y) MDC Partners (as defined in Section 4.1(a)) refuses to provide cash to fund the purchase price for such acquisition, such proposal shall be deemed a “Rejected Qualifying Proposal”.  For further clarity, the Members specifically agree that the failure of the Company and the potential acquisition target to come to terms, any Board requirement that the Company conduct thorough and complete due diligence, any Board requirement that adequate documentation and indemnification protection be provided to the Company or any MDC Partners requirement that the transaction structure be adjusted in respect of tax, finance, accounting or legal considerations, shall not be deemed to be grounds for a Qualifying Proposal to become a Rejected Qualifying Proposal.  In the event that three Qualifying Proposals made in good faith by WWG become Rejected Qualifying Proposals prior to March 1, 2013, an “Acquisition Failure Event” shall have been deemed to occur.   A “Qualifying Proposal” shall be a proposal to acquire a Person:

(i)                that has annual EBITDA margins of at least 20% over the prior two calendar years, and projected over the year of acquisition and the subsequent year,

(ii)               that has annual revenue growth of at least 15% over the prior two calendar years, and projected over the year of acquisition and the subsequent year,

(iii)              for which no Client Group (as defined in Section 10.4(e) below) in the trailing 12 months represents, nor is projected to represent in the next 12 months, more than 20% of revenues,

(iv)              for an effective purchase price multiple of less than 6.0x profit before tax,

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(v)               that has an implied enterprise valuation at the time of acquisition of not more than $20 million;

(vi)              made at a time when the Company shall have had PBT (as defined and calculated pursuant to the Purchase Agreement) for the prior calendar year, and projected PBT (as defined and calculated pursuant to the Purchase Agreement) for the current year, of at least 80% of the then current Reference PBT.  Reference PBT for purposes of this condition shall be (i) 2009 PBT (as defined in the Purchase Agreement) for acquisition proposals made in 2010; the average of 2009 PBT and 2010 PBT (as defined and calculated in the Purchase Agreement) for acquisition proposals made in 2011; and the average of 2009 PBT, 2010 PBT and 2011 PBT (as defined and calculated in the Purchase Agreement) for acquisition proposals made in 2012 or later years; and

(vii)             the terms of which incorporate the following elements:

(A) acquisition of a majority and control, with the right to require the remaining minority (non-binding put rights may be included);

(B) no more than 60% of the projected purchase price is payable at closing, with the remaining purchase price contingent on the performance of the target over at least two years post-acquisition;

(C) the target shall have sufficient and agreed upon working capital to operate its business post-closing in accordance with the target’s proposed operating and capital expenditure budget without additional borrowing;

(D) the target will be debt-free at closing;

(E) the purchaser shall be entitled to a priority return based on the purchase price for the initial purchase;

(F) the seller(s) may be granted minority protections no more favorable than provided in this Agreement;

(G) the seller(s) shall enter into protective covenant agreements reasonably acceptable to MDC Partners; and

(H) MDC Partners shall be entitled to pledge its acquired equity and the assets of the target (and subsidiaries, if any) in connection with MDC Partners’ credit facilities and/or secured debt; the target shall be required to grant upstream guarantees in connection with such facilities and to participate in MDC Partners’ centralized cash management and banking program;

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(b)           Effect of Acquisitions on Profit Allocation, Distributions.  In the event that the Company consummates an acquisition (a “Company Acquisition”), whether or not as a result of a Qualifying Proposal, the Members agree that the following shall be the basis pursuant to which GAAP PBT shall be allocated and cash generated from the operations of such Company Acquisitions (“Acquisition Cash Flow”) shall be utilized:

(i)              Payments of purchase price made by MDC Partners or one of its Affiliates shall be deemed a loan to the Company (an “Acquisition Loan”) made at an interest rate of 12%.  Any third party transaction expenses incurred in connection with the Company Acquisition shall be included as an Acquisition Loan;

(ii)             A separate calculation of GAAP PBT shall be made each year for each Company Acquisition (each such calculation, “Acquired Company GAAP PBT”); for the avoidance of doubt, (x) interest accruing on the Acquisition Loan in respect of any Company Acquisition shall be treated as an expense in the calculation of such Company Acquisition’s Acquired Company GAAP PBT and (y) to the extent any item of income or expense is included in the calculation of Acquired Company GAAP PBT, such item shall not also be included in the calculation of GAAP PBT for purposes of Section 3.5 except to the extent Acquired Company GAAP PBT is included back in GAAP PBT pursuant to clause (iii) below;

(iii)            As long as any Acquisition Loan remains outstanding or any Deferred Acquisition Consideration Liabilities (as defined in Section 10.4(e) below) remain in respect of a Company Acquisition, the Acquired Company GAAP PBT (whether positive or negative) for such Company Acquisition shall not be included in the GAAP PBT to be allocated pursuant to Section 3.5 above and instead shall be allocated 100% to the Class A Member and shall not be included in the calculations described in Section 3.5(a).  If no Acquisition Loan remains outstanding nor any Deferred Acquisition Consideration Liabilities remain in respect of a Company Acquisition, then the Acquired Company GAAP PBT for such Company Acquisition shall be included in the GAAP PBT to be allocated pursuant to Section 3.5 above;

(iv)            As long as a Acquisition Loan for a Company Acquisition is outstanding or any Deferred Acquisition Consideration Liability shall remain without a corresponding cash reserve (as described below), Acquisition Cash Flow from such Company Acquisition shall not be included generally in Cash Flow, but instead shall be allocated in the following manner: (A) first, to pay current interest and any interest arrearage on outstanding Acquisition Loans for such Company Acquisition, (B) second, as a contribution to Cash Flow specifically for the purpose of funding any necessary Tax Distribution relating to the allocation of Acquired Company GAAP PBT for such Company Acquisition, (C) third, as payment on the outstanding balance of the Acquisition Loans for such Company Acquisition and (D) fourth, as a contribution to a cash reserve to satisfy any Deferred Acquisition Consideration Liability for such Company Acquisition.   Upon payment in full of the Acquisition Loans for a Company Acquisition, and satisfaction in full of all Deferred Acquisition Consideration Liabilities (including for this purpose, any associated cash reserve) (collectively, “Debt Satisfaction”), any additional available Acquisition Cash Flow from such acquisition (“Acquisition Free Cash Flow”) shall be included in Cash Flow and become available for distribution in accordance with Section 3.4 hereof.  In the event that following Debt Satisfaction, but prior to delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, (x) the Deferred Acquisition Consideration Liabilities is adjusted downward (other than as a result of a payment), an amount of cash equal to such adjustment shall be released from the cash reserve and shall be included in Cash Flow and become available for distribution in accordance with Section 3.4 or (y) the Deferred Acquisition Consideration Liabilities is adjusted upward, then the first sentence in this clause (iv) shall become effective until a sufficient cash reserve is established to satisfy such adjustment.

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Each Company Acquisition shall be treated separately for purposes of this Section 3.6(b); however, each Acquisition Loan in respect of a single Company Acquisition shall be aggregated for purposes of this Section 3.6(b).

Section 3.7             Effective Time.  The Members agree that the provisions of this Article III shall apply from and after the Effective Time (as defined in Section 13.1).  Accordingly, GAAP PBT and any Profit or Losses of the Company in respect of the portion of calendar year 2010 prior to the Effective Time shall not be included in the calculations described in this Article III and shall be allocated solely to WWG and WWG2 in accordance with the Original Operating Agreement; provided, however, subject to Section 2.1.1(b) of the Purchase Agreement, no distributions shall be payable in respect of such GAAP PBT or Profits for such earlier period following the Effective Time.

ARTICLE IV

MANAGEMENT

Section 4.1             Management of the Company.

(a)           Except to the extent otherwise provided for herein, the powers of the Company shall be exercised by and under the authority of, and the business and affairs of the Company shall be managed under, the direction of the Managers of the Company. Notwithstanding the foregoing or any other provisions hereof to the contrary, until MDC Holdco or one of its Affiliates has purchased and paid for 100% of the Class B Units and Class C Units, the taking of any of the actions listed in clauses (i) through (x)below shall require the consent of both MDC Holdco and WWG.  The consent of MDC Holdco and WWG may be obtained by a vote at a meeting of the Members or by the written consent of MDC Holdco and WWG.

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(i)           a sale, lease or other disposition of all or substantially all or a significant part of the assets or business of the Company or any subsidiary thereof, except in connection with (x) a sale, lease or other disposition of all or substantially all or a significant part of the assets or business or stock (an “MDC Sale”) of MDC Partners Inc. (“MDC Partners”); (y) an MDC Financing (as defined in Section 4.1(e) hereof) or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing; or (z) any transfer by MDC Holdco or any of its Affiliates of their respective interest in the Company to another wholly-owned subsidiary of MDC Partners (an “MDC Internal Transfer”) (for purposes of this Agreement, in the event of any MDC Internal Transfer, the term MDC Holdco as used in this Agreement shall include any such transferee);

(ii)          a merger or consolidation of the Company with and into another Person or of another Person with and into the Company, except in connection with an MDC Sale, an MDC Internal Transfer or an MDC Financing;

(iii)         the authorization or issuance of additional Class A Units, Class B Units, Class C Units, Class D Units or other equity ownership interests in, or the granting of any other rights to participate in the proceeds of the sale of assets of the Company which are dilutive to WWG; or the incurring of debt for borrowed money in excess of the amount provided for in the approved annual operating budget or capital expenditure budget, except in connection with borrowings under the terms and conditions of the MDC Cash Management Program (and in compliance with Section 4.1(d) below);

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

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

(vi)         a relocation of the Company's primary offices outside of Broward County, Florida;

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

(viii)       any change in the name of the Company;

(ix)          entering into any business other than, or any transaction outside of, the normal business activities of the Company and any of its subsidiaries and related activities other than a MDC Internal Transfer;

(x)           the payment by the Company of any general management fee to any Member or one of such Member's Affiliates; or

(xi)          a fundamental change to the nature of the business of the Company and its subsidiaries, taken as a whole.

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

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

(d)           The parties hereto further agree that the operations of the Company and its subsidiaries shall be conducted (i) subject to Section 4.1(h) below, to participate in the overall cash management and banking program of MDC Holdco Partners as set forth on Schedule 4.1(d) hereto (the “MDC Cash Management Program”), and (ii) to comply on a timely basis with the financial reporting and budgeting procedures of MDC Holdco Partners as from time to time in effect, which procedures require the approval of an annual operating budget, capital expenditure budget and cash flow projections and require management of operating companies to seek approval prior to material deviations from such budgets.

(e)           Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the purchase price pursuant to the Purchase Agreement and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC Partners  and/or any of its Affiliates, in connection with its or any of its Affiliates’ current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon MDC Holdco’s Membership Interests; (x) pledge or grant a security interest in or otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under any Call to, or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders (as applicable and collectively, the “Lender”); and (z) have the Company and/or its subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an “MDC Financing”); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned by it.

(f)           MDC Partners shall cause sufficient working capital to be made available to the Company as shall be determined by the Board of Managers to be reasonably necessary to execute upon its approved annual operating and capital expenditure budgets, but in no event shall MDC Partners or any of its Affiliates be required to fund losses of the Company or any of its subsidiaries.  Such working capital shall be provided to the Company on terms consistent with the MDC Cash Management Program and accordingly, neither MDC Partners nor any of its Affiliates shall be required to provide working capital in the event that the consolidated cash balance of the Company in the MDC Cash Management Program is negative. The parties hereto further agree that the Company shall hereby adopt, and shall take appropriate steps to cause the employees of the Company to comply with, the Code of Conduct of MDC Partners, as the same may be amended from time to time.

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(g)           The Company shall comply with all applicable federal, state and local laws and the Company shall provide reasonable assistance to MDC Partners and its Affiliates in their compliance with all applicable federal, state and local laws, including without limitation, the provisions of the Sarbanes-Oxley Act of 2002, as amended from time to time.

(h)           The Company shall not take any of the actions described in Section 4.1(a) if such action would be reasonably be expected to have a material adverse effect on the value of the Class D Units that is disproportionate to the other Members unless (i) consented to by holders of a majority of the Class D Units or (ii) WWG and MDC Holdco have mutually agreed to such action in accordance with Section 4.1(a).

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

Section 4.3             Number and Qualifications of Managers.  As long as both of WWG own outstanding Units of the Company, there shall be five (5) Managers of the Company of which MDC Holdco shall be entitled to appoint three (3) Managers and WWG shall be entitled to appoint two (2) Managers (each Manager appointed by WWG must be a Principal or a full-time employee of the Company or one of its subsidiaries); thereafter the Managers shall be elected in accordance with Section 4.4.  No decrease in the number of Managers shall have the effect of shortening the term of any incumbent Manager.  None of the Managers need be Members of the Company or residents of the State of Delaware.  The initial designees of MDC Holdco are Rob Dickson, Michael Sabatino and David Doft.  The initial designees of WWG are Daniel K. Gregory and Stephen Groth.

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

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Section 4.5             Removal; Filling of Vacancies.  As long as WWG owns outstanding Units of the Company, only MDC Holdco can remove and replace its appointed Managers and only WWG can remove and replace its appointed Managers.  Following such time, the Members by the required vote as set forth in Section 5.5 shall be entitled to remove any Manager and to elect for the unexpired term of such Manager so removed another individual.  Upon the resignation, retirement or death of any of the Managers of the Company, subject to Section 4.3, the Members by the required vote as set forth in Section 5.5, shall be entitled to elect another Person for the unexpired term of such Manager.

Section 4.6             Place of Meetings.  Meetings of the Managers, annual, regular or special, may be held either in New York, NY or Fort Lauderdale, Florida, unless otherwise agreed to by the Managers (including, for as long as WWG own outstanding Units of the Company, at least one Manager appointed by MDC Holdco and one Manager appointed by WWG).

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

Section 4.8             Regular Meetings.  The Managers shall notify each of the Members of regular meetings of the Managers, which meetings shall be held at such times and places as may be fixed from time to time by resolution adopted by the Managers.  Except as otherwise provided by statute, any and all business may be transacted at any regular meeting.  The Managers shall be given reasonable notice of the date, time and place of any scheduled regular meeting.

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

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

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

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

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

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

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

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

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

ARTICLE V

MEETINGS OF MEMBERS

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

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

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

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

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

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

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

ARTICLE VI

OFFICERS

Section 6.1             Officers.  The Managers may designate one or more individuals (who may or may not be Managers) to serve as officers of the Company.  The Company shall have such officers as the Managers may from time to time determine.  Any two or more offices may be held by the same individual.  An officer of the Company shall have the duties and responsibilities consistent with his position and shall perform such duties and responsibilities as shall from time to time be prescribed or delegated to him by the Managers, subject to the terms of any employment agreement with the Company or one of its subsidiaries to which such officer may be a party. The parties hereto hereby initially designate those persons identified on Schedule 6.1 as officers of the Company.

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ARTICLE VII

ACCOUNTING AND TAX MATTERS; REPORTS; BANKING

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

Section 7.2         Capital Accounts.  An individual capital account (the “Capital Account”) shall be maintained by the Company for each Member as provided below:

(a)          Each Member's Capital Contributions when made shall be credited to such Member’s Capital Account.  The Capital Account of each Member shall, except as otherwise provided in this Agreement, be (i) credited with the amount of cash and the fair market value of any property contributed to the Company by such Member or its predecessor in interest (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), (ii) credited with the amount of any Profits allocated to such Member or its predecessor in interest for federal income tax purposes, (iii) debited by the amount of any Losses allocated to such Member or its predecessor in interest for federal income tax purposes, (iv) debited by such Member’s (or such predecessor’s) allocable share of expenditures of the Company not deductible in computing the Company’s taxable income and not properly chargeable as capital expenditures, including any nondeductible book amortization of capitalized costs, and (v) debited by the amount of cash or the fair market value of any property distributed to such Member its predecessor in interest (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code).  Immediately prior to any distribution of property by the Company, the Members’ Capital Accounts shall be adjusted, as required by Treasury Regulation 1.704-1(b)(2).

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE VIII

COVENANTS OF THE MEMBERS

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

 ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION

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

 

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Section 9.2         Liquidation.  Upon dissolution of the Company, the Members shall appoint a Manager as liquidating trustee, who shall immediately commence to wind up the Company’s affairs; provided, however, that a reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the satisfaction of liabilities to creditors so as to enable the Members to minimize the normal losses attendant upon a liquidation.  After making payment or provision for all debts and liabilities of the Company, if determined to be necessary under the circumstances by the Managers, the Members’ Capital Accounts shall be adjusted by debiting or crediting each Member’s Capital Account with its respective share of the hypothetical gains or losses resulting from the assumed sale of all remaining assets of the Company for cash at their respective fair market values as of the date of dissolution of the Company in the same manner as gains and losses on actual sales of such properties are allocated under Section 3.3, Section 3.5 and Section 3.6 hereof.  The liquidating trustee shall then by payment of cash or property make distributions to the Members in accordance with their respective Capital Accounts.  Any distribution to the Members in liquidation of the Company shall be made by the later of the end of the taxable year in which the liquidation occurs or 90 days after the date of such liquidation.  Notwithstanding any provisions in this Agreement to the contrary, no Member shall be obligated to restore a deficit balance in its Capital Account at any time.  The proceeds of liquidation shall be distributed, as realized, in the manner provided in the Act, subject to the applicable provisions of Section 3.4.  Subject to the immediately following sentence, the Members shall continue to share Profits and Losses during liquidation in the same proportions, as specified in Sections 3.3, 3.5 and 3.6 hereof, as before liquidation.  Notwithstanding anything to the contrary herein, the Managers shall in their good faith discretion (and in a manner which reflects the economic interests of the Members consistent with the intent of the transactions set forth in this Agreement and the Purchase Agreement) allocate items of income, gain, deduction, and loss for the year of liquidation (and for earlier years if necessary to the extent then possible) so as to give Members positive Capital Account balances, immediately before the distributions provided for in the second preceding sentence, equal to the amount (if any) that would be distributed to Members if distributions were made in accordance with Section 3.4(a) and (b) hereof.  In the event that such Manager is unable to perform in his capacity as liquidating trustee due to bankruptcy, dissolution, death, adjudicated incompetency or any other termination of such Manager as an entity, the liquidating trustee shall be a Person approved by the unanimous vote of the Membership Interests.  With respect to this provision, the term “liquidation” shall have the same meaning as set forth in Treasury Regulation §1.704-1(b)(2)(ii) as in effect at such time, provided that the events specified in Section 10 shall not be deemed a “liquidation”.

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

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

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ARTICLE X

RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS

Section 10.1       Assignment by the Members.  For so long as WWG owns Units, no Class A Unit shall be sold or transferred without the consent of WWG, except in connection with (i) an MDC Sale, (ii) an MDC Holdco Internal Transfer, (iii) a sale described in Section 10.2(c) or (iv) an MDC Financing or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing.  Except as set forth in Section 10.2(c), no Class B Unit, Class C Unit or Class D Unit shall be sold, transferred, assigned, pledged or otherwise disposed of, in whole or in part, without the written consent of MDC Holdco to such transfer (or, in the case of a Class D Unit, in accordance with the Profits Interest Plan).  Any purported transfer by WWG, WWG2 or other permitted holder of Class B Units, Class C Units or Class D Units of all or any of its Units, any purported assignment by WWG, WWG2 or other permitted holders of Class B Units, Class C Units or Class D Units of any of its rights under this Agreement, and any purported delegation by WWG, WWG2 or other permitted holders of Class B Units, Class C Units or Class D Units of any of its duties or obligations under this Agreement (which shall in no way relieve WWG, WWG2 or such other permitted holder of Class B Units, Class C Units or Class D Units of responsibility for the performance of any such duties and obligations), in contravention of any of the provisions of this Agreement, will be null and void ab initio and of no force and effect.  Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the indirect sale of Units as part of any transaction involving a change of control of MDC Partners or its successors.

Section 10.2       Put Rights of WWG/Call Rights of MDC Holdco.

(a)         MDC Holdco Call of Class B Units.  At any time on or after March 1, 2013 (the "Call Period"), MDC Holdco shall have the right (but not the obligation) to require WWG and WWG2 to sell to it (a "Call"), all of the remaining Class B Units owned by WWG and WWG2.  MDC may exercise the Call at any time during the Call Period, and may do so by delivering written notice of exercise (a "Call Exercise Notice") to WWG and WWG2 during the Call Period.   The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

(b)         MDC Holdco Call of Class C Units.  At any time during the Call Period, MDC Holdco shall also have the right (but not the obligation) to exercise a Call for all of the remaining Class C Units owned by WWG.  MDC may exercise the Call at any time  during the Call Period, and may do so by delivering a Call Exercise Notice to WWG during the Call Period.   The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

(c)         WWG Sale Request. At any time on or after March 1, 2015 (or in the event of an Acquisition Failure Event (as defined in Section 3.6), at any time on or after March 1, 2013) (the “Sale Request Period”), in the event that MDC Holdco shall not have exercised its Call right with respect to all of WWG’s Class B Units or Class C Units, WWG shall have the right (but not the obligation) to request that MDC Holdco to purchase from it and WWG2 (a “Sale Request”) any or all of their remaining Class B Units and Class C Units.  WWG may make a Sale Request by delivering written notice (a “Sale Request Notice”) to MDC Holdco at any time during the applicable Sale Request Period; provided that WWG may not make more than one Sale Request in any 12-month period.  MDC Holdco shall have thirty (30) days following receipt of the Sale Request Notice to accept WWG’s Sale Request, which acceptance shall be exercised by delivering written notice (a “Sale Request Acceptance Notice”) to WWG within such thirty day period.  If such Sale Request Acceptance Notice is delivered (an “Accepted Sale Request”), the Class B Units and/or Class C Units shall be sold to MDC Holdco in accordance with the provisions set forth in Section 10.4, with the date of delivery of the Sale Request Acceptance Notice being the exercise date.  In the event that MDC Holdco shall not have delivered a Sale Request Acceptance Notice during such thirty (30) day period, then (i) WWG shall have the right for twelve (12) months to solicit bona-fide offers for a sale of its Class B Units and Class C Units, WWG’s Class B Units and of the Class D Units by the holders of such Class D Units, to an unaffiliated third party (the “Prospective Purchaser”), (ii) upon the receipt of such offer, WWG shall deliver written notice (a “Third Party Offer Notice”) of such offer to MDC Holdco, which notice shall identify the Prospective Purchaser and shall describe the material terms of such offer, (iii) for a period of ten (10) days after receipt of the Third Party Offer Notice, MDC Holdco shall have the right to deliver a Sale Request Acceptance Notice and (x) if such Sale Request Acceptance Notice is delivered, MDC Holdco shall acquire the Class B and/or Class C Units as described above and no Member shall be permitted to consummate a sale to the Prospective Purchaser or (y) if a Sale Request Acceptance Notice is not delivered, WWG shall, for a period of one hundred twenty (120) days, be permitted to consummate the sale of its Class B Units and/or Class C Units, WWG2 and the holders of Class D Units shall be permitted to sell their Class B Units and Class D Units, respectively, to such Prospective Purchaser, and WWG shall have the right to require MDC Holdco to sell its Units to such Prospective Purchaser on substantially the same terms and conditions (taking into account the economic differences, if any, between Units) provided that MDC Holdco is able to obtain all necessary approvals, including the approval of its lenders.

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Section 10.3         Binding Obligations Upon Exercise of a Call or an Accepted Sale Request.  Upon the proper delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, WWG and WWG2 shall be obligated to sell to MDC Holdco, and MDC Holdco shall be obligated to purchase from WWG and WWG2, the Units subject to the Call or Accepted Sale Request, as applicable, pursuant to the terms of this Article X.

Section 10.4         Put/Call Purchase Price.

(a)           Calculation/ Payment of the Put/Call Purchase Price for Class B Units.  In connection with the exercise of a Call under Section 10.2(a) or an Accepted Sale Request for Class B Units, MDC Holdco shall calculate and pay to WWG and WWG2, in the aggregate (payable to them pro rata in accordance with the number of Class B Units held by them), the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class B Put/Call Purchase Price"):

(i)         within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “First Class B Payment”) equal to:

             AP x (4.0 x (Adjusted PBT for YP-1) –Acquisition Liabilities)

                3

(ii)         within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “Second Class B Payment”) equal to:

{AP x (4.0 x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP)) – Acquisition Liabilities)} – First Class B Payment

               3

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(iii)         within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the “Final Class B Payment”)  equal to:

(x)  the result of:

AP x (AM x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP) + (Adjusted PBT for YP+1)) – Acquisition Liabilities)

3

minus (y) (First Class B Payment + Second Class B Payment)

(b)          Calculation/ Payment of the Put/Call Purchase Price for Class C Units.  In connection with the exercise of a Call under Section 10.2(b) or an Accepted Sale Request for Class C Units, MDC Holdco shall calculate and pay to WWG the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class C Put/Call Purchase Price"; the Class B Put/Call Purchase Price and the Class C Put/Call Purchase Price are referred to in this Agreement as a “Put/Call Purchase Price”):

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “First Class C Payment”) equal to:

              AP x (4.0 x (Adjusted PBT for YP-1) –Acquisition Liabilities)

               3

(ii)          within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “Second Class C Payment”) equal to:

{AP x (4.0 x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP)) – Acquisition Liabilities)} – First Class C Payment

               3

(iii)         within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the “Final Class C Payment”)  equal to:

(x)  the result of:

AP x (AM x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP) + (Adjusted PBT for YP+1)) – Acquisition Liabilities)

3

minus (y) (First Class C Payment + Second Class C Payment)

 

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; provided, however, for purposes of making each of the calculations in this Section 10.4(b), in no event shall any of Adjusted PBT for YP-1, Adjusted PBT for YP or Adjusted PBT for YP+1 be greater than PBT Limit; provided, further than the Class C Put/Call Purchase Price shall not, with respect to any Call or Accepted Sale Request, exceed the result of (i) AP multiplied by (ii) AM multiplied by (iii) the PBT Limit.

(c)          Additional Put/Call Purchase Price for Class C Units.  In connection with the exercise of a Call under Section 10.2(b) or an Accepted Sale Request for Class C Units, MDC Holdco shall calculate and pay to WWG, in respect of its Class C Units, the following additional amounts of Put/Call Purchase Price, to the extent applicable:

With respect to unissued Class D Units as of the delivery of a Call Exercise Notice or a Sale Request Acceptance Notice:

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “First True-Up Payment”) equal to:

(x)          the result of:

(Unissued AP divided by AP)

multiplied by

(y)           the result of:

           [AP x (4.0 x (Adjusted PBT for YP-1) –Acquisition Liabilities)] – First Class C Payment

             3

(ii)          within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “Second True-Up Payment”) equal to:

(x)          the result of:

(Unissued AP divided by AP)

multiplied by

(y)          the result of:

(A)          the result of

{AP x (4.0 x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP)) – Acquisition Liabilities)}

               3

minus

(B)          the result of

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(First Class C Payment + Second Class C Payment)

with the result of (x) multiplied by (y), then reduced by

(z)          the First True-Up Payment

(iii)          within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the “Third True-Up Payment”)  equal to:

(x)          the result of:

(Unissued AP divided by AP)

multiplied by

(y)         the result of:

(A)          the result of

AP x (AM x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP) + (Adjusted PBT for YP+1)) – Acquisition Liabilities)

3

minus

(B)          the result of

(First Class C Payment + Second Class C Payment + Final Class C Payment)

with the result of (x) multiplied by (y), then reduced by

(z)          (First True-Up Payment + Second True-Up Payment)

With respect to Class D Units that are purchased by MDC Holdco after the delivery of a Call Exercise Notice or a Sale Request Acceptance Notice in respect of the Class C Units:

(iv)         within 7 calendar days following the Final Payment of Put/Call Purchase Price (each as defined in the applicable Restricted Unit Award Agreement for a holder of Class D Units) for any Call pursuant to Section 2(f) of the Restricted Unit Award Agreement, or any Put or Call involving a purchase by MDC Holdco directly from the Participant (as defined in the Restricted Unit Award Agreement) for which the Payout Factor (as defined in the Restricted Unit Award Agreement) is less than 100%, in each case that occurs after the delivery of a Call Exercise Notice or a Sale Request Acceptance Notice for the Class C Units, MDC Holdco shall pay the holders of Class C Units the difference between (x) the amount that such holder of Class D Units would have received under their Restricted Unit Award Agreement had such Put or Call been calculated as a Call under Section 2(e) of the Restricted Unit Award Agreement and the Payout Factor were 100% and (y) the total Put/Call Purchase Price received by such holder of Class D Units (collectively, the payments made to holders of Class C Units under this clause (iv), the “Final True-Up Payments”).

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(d)          If any calculation of the Put/Call Purchase Price results in an amount which is equal to less than zero, such Put/Call Purchase Price payment shall be deemed to be zero and accordingly the seller of the Units pursuant to such Put or Call shall not be under any obligation to pay such negative amount (expressed as a positive number).

(e)          Other Definitions.

(i)          “Acquisition PBT” for any period, for any Company Acquisition, shall mean the PBT associated with such Company Acquisition for such period; for the avoidance of doubt, interest accruing on the Acquisition Loans in respect of such Company Acquisition shall not be treated as an expense in the calculation of such Company Acquisition’s Acquisition PBT.

(ii)         “Acquisition Liabilities” shall mean the sum of (x) the outstanding balance of all Acquisition Loans as of the Put/Call Closing Date and (y) the sum of all Deferred Acquisition Consideration Liabilities for all Company Acquisitions (net of any cash reserve associated with such liabilities as described in Section 3.6(b)) as of the Put/Call Closing Date; provided, however, for purposes of calculating the Final Class B Payment, the Final Class C Payment or the Third True-Up Payment, the Deferred Acquisition Consideration Liabilities in clause (y) shall be measured as of December 31 of YP+1, but shall add back to such amount any payments of deferred acquisition consideration actually made between the Put/Call Closing Date and December 31 of YP +1 to the extent such payments were satisfied by a source other than the associated cash reserve.

(iii)        “Adjusted PBT” for any year shall mean (x) the PBT for such year exclusive of all Acquisition PBT plus (y) for each Company Acquisition, the Annualized Acquisition PBT for such Company Acquisition.

 (iv)       "AM" shall mean the applicable multiple and equal:

(w)        4.0, if the Average Annual PBT Growth Rate is less than or equal to 5%;

(x)          4.25, if the Average Annual PBT Growth Rate is greater than 5%, but less than or equal to 10%;

(y)         4.5, if the Average Annual PBT Growth Rate is greater than 10%, but less than or equal to 15%;

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(z)          5.0, if the Average Annual PBT Growth Rate is greater than 15%;

; provided, however, the value of AM determined above shall be further adjusted based on the following:

(A)         if Revenue for any Client Group for the period YP and YP+1 exceeds 30% of the total Revenue of the Company during such period, then AM shall be reduced by 0.5; provided, however, AM shall not be reduced to lower than 4.5 as a result of such reduction; or

(B)         if no Client Group has generated Revenue for the Company during the period YP and YP+1 greater than or equal to 30% of the total Revenue of the Company during such period, then AM shall be increased by 0.5.

For purposes of making the calculation described in clauses (A) and (B) above, Revenue shall be deemed to include Revenue from any Company Acquisition on a pro forma basis for any period during YP or YP+1 that occurred prior to the consummation of such Company Acquisition.

(v)          “Annualized Acquisition PBT” shall mean, with respect to any Company Acquisition, (x) the total Acquisition PBT for such Company Acquisition for the applicable portion of the Measuring Period in which the Company Acquisition was included in the Company’s consolidated results, divided by (y) the number of months during the Measuring Period in which the Company Acquisition was included in the Company’s consolidated results, with such result multiplied by (z) 12.

 (vi)        "Applicable Percentage" or "AP" shall mean (x) the number of Class B Units or Class C Units, as the case may be, being sold pursuant to a Call or an Accepted Sale Request, divided by (y) the total number of authorized Class A Units, Class B Units and Class C Units.

(vii)        "Average Annual PBT Growth Rate" shall mean, for purposes of calculating any Put/Call Purchase Price, the result of (x) the sum of (1) PBT for YP+1 divided by PBT for YP, and (2) PBT for YP divided by PBT for YP-1, multiplied by (y) 50%; provided, however, for purposes of making this calculation Acquisition Company PBT shall only be included in PBT in the following manner:

(A)         if the Company Acquisition occurred prior to calendar year YP-1, then it shall be included for all periods YP-1, YP and YP+1;

(B)         if the Company Acquisition occurred during the first six months of calendar year YP-1:  (x) Acquisition Company PBT shall be calculated on a pro forma basis for YP-1 to include the portion of YP-1 pre-acquisition, and (y) Acquisition PBT shall be included for periods YP and YP+1;

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(C)          if the Company Acquisition occurred during the last six months of calendar year YP-1: (x) no Acquisition Company PBT shall be included in clause (1) above for YP-1 or YP; and (y) Acquisition PBT shall be included for purposes of clause (2) above for periods YP and YP+1;

(D)          if the Company Acquisition occurred during the first six months of calendar year YP:  (x) no Acquisition Company PBT shall be included in clause (1) above for YP-1 or YP; (y) for purposes of clause (2) above, Acquisition Company PBT for YP shall be calculated and included on a pro forma basis to include the portion of YP pre-acquisition, and (z) Acquisition PBT shall be included for period YP+1; or

(E)          if the Company Acquisition occurred during the last six months of calendar year YP or during YP+1, no Acquisition Company PBT shall be included for any of YP-1, YP or YP+1.

(viii)      “Client Group” for any client of the Company, shall mean such client and each other client of the Company that is part of the same group of companies that  conducts business through more than one entity, division or operating unit, whether or not separately incorporated.

(ix)         “Deferred Acquisition Consideration Liabilities” shall mean, as of any date, the current estimated deferred acquisition consideration (including earn-outs) accounted for in the financial statements of MDC Partners in respect of any Company Acquisition.

(x)         "Measuring Period" shall mean the calendar years included in the applicable Put/Call Purchase Price calculation under Section 10.4(a), 10.4(b) or 10.4 (c)(i)-(iii) above.

(xi)         “PBT” for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal and state income taxes for such period, determined in accordance with GAAP; provided, however, in making the foregoing determinations:

(1)          neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or any predecessor entity), is the named beneficiary or is otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

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(2)          intercompany management fees charged by MDC Holdco or any of its Affiliates (as defined in Section 13.1 hereof) to the Company or any of its subsidiaries, shall not be treated as an expense, unless such fees have been approved by the parties in accordance with this Agreement, and such fees replace an expense that would otherwise be paid by the Company to a third party;

(3)          any Losses (as defined in Section 7.2 of the Purchase Agreement) of a Purchaser Indemnified Party (as defined in Section 7.2 of the Purchase Agreement) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 of the Purchase Agreement and which are fully assumed by WWG and/or the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(4)          any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3 of the Purchase Agreement) shall not be treated as an expense;

(5)          there shall be no charge against income for the payment or accrual of any component of any Purchase Price payment pursuant to the Purchase Agreement or any component of any Put/Call Purchase Price payment;

(6)          the fees and disbursements of the Company’s attorneys, accountants and financial advisors incurred prior to or after the Closing (as defined in Section 2.3 of the Purchase Agreement) in connection with the formation and organization of the Company and the Subsidiaries and the negotiation, preparation and execution of the Purchase Agreement and the other documents delivered at such Closing that have either (x) been expensed and paid prior to such Closing or (y) accrued for on the Closing Balance Sheet (as defined in the Purchase Agreement), shall not be treated as an expense;

(7)          the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company’s direct or indirect ownership in such subsidiary;

(8)          any extraordinary or non-recurring gains or losses, gains or losses from the sale of any capital assets, and any gains or losses recognized by the Company or any of its subsidiaries in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries shall be excluded from income;

(9)          the fees and expenses of (1) the Accountants in preparing the Special Determination or any Annual Determination (each as defined in the Purchase Agreement) or (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder, in excess of $50,000 in any calendar year, shall not be treated as an expense; and

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(10)        in the event that the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger or similar transaction (an “Acquired Business”) on or after the date of this Agreement, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business unless its inclusion has been agreed to by the Representative (as defined in the Purchase Agreement), in which case it shall be included in the manner described within the definitions of “Acquisition PBT”, “Adjusted PBT” and “Average Annual PBT Growth Rate” in this Section 10.4(e);

(11)        any transaction expenses incurred in connection with any potential or completed acquisition shall be included as an expense;

(12)        any write-off or amortization or depreciation of goodwill or other intangibles arising out of the purchase of the Purchased Interests (as defined in the Purchase Agreement) pursuant to the Purchase Agreement shall not be treated as an expense;

(13)        there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price (as defined in the Purchase Agreement);

(14)        the fees and expenses of Grant Thornton LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010, up to $85,000 shall not be treated as an expense for purposes of 2010 PBT;

(14)        any distribution by WWG of any Purchase Price proceeds to its members shall not be treated as an expense;

(15)        any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense, unless the termination of such Principal's employment was recommended and initiated by the Representative (as defined in the Purchase Agreement);

(16)        PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses; and

(17)        solely with respect to the calculation of 2010 PBT, an amount equal to $459,129 shall not be treated as an expense.

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 (xii)        “PBT Limit” shall mean 2009 PBT (as defined in Section 2.1.3 of the Purchase Agreement).

 (xiii)       "Revenues" during each relevant calendar year shall mean the commissions and fees, mark-ups and hourly charges earned by the Company and its subsidiaries during such calendar year for work generated or performed by employees or contractors and charged to clients determined in accordance with GAAP; provided, however, Revenues shall not include any pass-through of third party costs or direct billings of expenses where the Company and its subsidiaries acts as an agent for its clients.

(xiv)        "Unissued AP" shall mean (x) the number of authorized Class D Units that are unissued as of the date that a Call Exercise Notice or a Sale Request Acceptance Notice in respect of the Class C Units has been delivered, divided by (y) 80, with the result multiplied by (z) 8.0%.

(xv)         "YP" shall mean the calendar year in which the respective Call was exercised by proper delivery of an Exercise Notice or the Accepted Sale Request occurred.

(xvi)        "YP-1" shall mean the calendar year immediately preceding YP.

(xvii)       "YP+1" shall mean the calendar year immediately following YP.

(f)           Accounting Procedures.

(i)           Upon exercise of each Call or Accepted Sale Request, MDC Holdco may prepare or, at its discretion, may cause BDO Seidman LLP or other independent accountant of national standing (the "Accountants") to prepare, in accordance with GAAP, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business on December 31 of each year contained within the Measuring Period, and a related consolidated statement of income of the Company and its subsidiaries, if any, for the relevant calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth for the period under examination the applicable calculation of PBT, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4 (the "Annual Determination").  MDC Holdco shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements and to determine the scope of such audit.  MDC Holdco shall instruct the Accountants to deliver a copy of each such Annual Determination to WWG not later than 120 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of MDC Holdco.

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

(iii)           In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 10.4, then WWG and MDC Holdco agree to select another mutually acceptable accounting firm to perform the services to be performed under this Section 10.4 by the Independent Auditors.  If WWG and MDC Holdco fail to select the Independent Auditors as required by clause (i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either WWG or MDC Holdco may request the American Arbitration Association in New York City (the "AAA") to appoint an independent firm of certified public accountants to perform the services required under this Section 10.4 by the Independent Auditors.  MDC Holdco, on the one hand, and WWG, on the other hand, shall share the fees of the AAA equally.  For purposes of this Section 10.4(f) the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this clause (iii).

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

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(v)           The books and records of the Company and its subsidiaries shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto and their representatives, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 10.4.  WWG, on the one hand, and MDC Holdco, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by or for them to support a position that is contrary to the position taken by the other party. Upon the request by WWG, MDC Holdco shall request that the Accountants make their work papers available to WWG and its representatives after the completion of any audit of the financial statements of the Company and its subsidiaries and/or to verify the calculations set forth in any Annual Determination (in each case during normal business hours upon reasonable advance notice at the principal offices of the Accountants); provided, however, it is understood that the decision to make such work papers available is solely that of the Accountants.

(g)           Closing.  The closing for each purchase and sale of Units (a “Put/Call Closing”) pursuant to a Call or Accepted Sale Request, as applicable, shall be held at the offices of the Company within 30 days after the delivery of an Exercise Notice or Sale Request Acceptance Notice.  The date on which the respective Put/Call Closing takes place is referred to in this Agreement as its “Put/Call Closing Date”.  At each Put/Call Closing, the parties shall execute an Assignment of Unit Agreement in form and substance reasonably acceptable to MDC Holdco and WWG and an amendment to this Agreement in accordance with Section 14.4 reflecting such transfer and the reallocated Units (including the related portion of the Capital Account).  The transfer of any Units pursuant to this Section 10.4 shall be free and clear of all claims, liens and encumbrances other than as created by the provisions of this Agreement.  Prior to any Put/Call Closing, the Company and WWG shall use their best efforts to obtain any required governmental or regulatory approval or approvals.  MDC Holdco shall have the right to postpone any scheduled Put/Call Closing until any such governmental or regulatory approval is obtained.

(h)           Put/Call Purchase Price Payment.  Payment of each component of the Put/Call Purchase Price shall be made by MDC Holdco in cash by direct wire transfer to such account as WWG may direct by written notice to the Purchaser given pursuant to this Agreement.  Each component of the Put/Call Purchase Price shall be deemed to include imputed interest to the extent required by the Code.

(i)           Effect of Events During Period Class B Units and Class C Units Are Issued.  The parties hereto understand and agree that under the terms of each Principal’s Employment Agreement with the Company, such Principal may be terminated for "Cause" or "without Cause" (as such terms are defined in his respective Employment Agreement).  Accordingly, each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any subsidiary of the Company, no party to this Agreement or any Person deriving rights through any such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary of the Company (x) constitutes a breach by MDC Holdco or any of its Affiliates of this Agreement, (y) resulted in an adverse effect on any Put/Call Purchase Price payment under this Agreement forming the basis for a claim against MDC Holdco or any of its Affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 10.4(f) hereof.  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect the right of WWG or WWG2 to receive any Put/Call Purchase Price payment under this Agreement.

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(j)           MDC Partners Guaranty.  MDC Partners hereby agrees to pay, or cause MDC Holdco to pay, when due, each payment of Put/Call Purchase Price required pursuant to this Article X.

ARTICLE XI

INDEMNIFICATION

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

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

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

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

Section 11.5        Definitions.  For purposes of this Article XI:

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

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

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

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

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

Section 11.7        Nonexclusivity of Rights.  The right to indemnification and the advancement and payment of expenses conferred in this Article XI shall not be exclusive of any other right that a Manager or other Person indemnified pursuant hereto may have or hereafter acquire under any law (common or statutory), provision of the Certificate or this Agreement or otherwise.

ARTICLE XII

ADDITIONAL AGREEMENTS

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

ARTICLE XIII

OTHER DEFINITIONS

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

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

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

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

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

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"Affiliate" of any Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

"Business Day" shall mean any day on which commercial banks are not authorized or required to close in New York, NY.

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

"Cash Flow" shall mean the consolidated amount of cash in respect of any calendar year of all of the Company and its subsidiaries that the Board of Managers in its good faith discretion believes is available for distribution to Members of the Company; provided, however, during calendar years 2010-2012, Cash Flow must be at least an amount necessary to satisfy the distribution required pursuant to Section 3.4(a)(i).

"Class A Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(i) to holders of Class A Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class A Units of GAAP PBT under Section 3.5(a) and Section 3.6(b) for such prior years.

“Class B Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class B Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class B Units of GAAP PBT under Section 3.5(a) for such prior years.

“Class C Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class C Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class C Units of GAAP PBT under Section 3.5(a) for such prior years.

“Class D Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class D Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class D Units of GAAP PBT under Section 3.5(a) for such prior years.

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

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

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

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"Effective Time" shall mean March 1, 2010.

"GAAP PBT" shall mean, for any calendar (or partial) year, the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal and state income taxes for such period, determined in accordance with GAAP.

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

(i)          Subject to the final sentence of this definition, the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by reference to Section 3.1(b), and as set forth in Section 8 to each of the Conveyance Documents.

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

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

(iv)        The Gross Asset Value of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (vi) of the definition of Profits and Losses herein; provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the extent the Managers determine that an adjustment pursuant to clause (ii) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iv).

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

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

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

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

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

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

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

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

"Profits and Losses", shall mean, for each fiscal year, an amount equal to the Company’s taxable income or loss for such fiscal year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

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

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

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

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

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

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

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

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 3.3(e) shall be determined by applying rules analogous to those set forth in clauses (i) through (vii) above.

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

"Units" shall mean Class A Units, Class B Units, Class C Units or Class D Units, as applicable.

ARTICLE XIV

MISCELLANEOUS

Section 14.1         Manner of Giving Notice.  Whenever under the provisions of the Act, the Certificate or this Agreement, notice is required to be given to the Company, any Member or Manager of the Company, and no provision is made as to how such notice shall be given, any such notice to be given hereunder shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next Business Day if sent by facsimile transmission (if transmission is electronically confirmed) or by a prepaid overnight courier service, and in each case at the respective addresses or numbers set forth below or such other address or number as such party may have fixed by notice:

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If to MDC Holdco or MDC Partners, to:

MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:  Rob Dickson

Fax:  (416) 960-9555

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

Fax:  (212) 937-4365

If to WWG, to:

c/o TEAM Enterprises, Inc.

110 E. Broward Blvd., Suite 2450

Fort Lauderdale, FL 33301

Attention: Daniel K. Gregory

Fax:

with a copy to:

Jeffrey M. Ostrow, Esq.

Kopelowitz Ostrow

220 SW 1st Avenue, Suite 1200

Fort Lauderdale, FL 33301

Email: ostrow@kolawyers.com

Fax: (954) 525-4300

If to the Company, to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

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Attention:  Rob Dickson

Fax:  (416) 960-9555

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

Fax:  (212) 937-4365

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

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

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

Section 14.4        Amendment or Modification.  The power to adopt, alter, amend or repeal this Agreement is vested solely in the Members. Except for the amendments contemplated by Sections 2.1, 2.2(d) and 10.4(g), and subject to the provisions of Section 4.1, this Agreement may be altered or amended only by the unanimous vote or unanimous written consent of MDC Holdco and WWG. The Managers may not adopt, alter, amend or repeal any provision of this Agreement.

Section 14.5        Binding Effect.  Subject to the restrictions on transfer and assignment set forth in Article X of this Agreement, this Agreement is binding on and inures to the benefit of the Members and their respective successors and permitted assigns, including without limitation, any Lender who exercises a default remedy under any agreement entered into in connection with an MDC Financing.

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

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

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

Section 14.9        Currency.  Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.  All payments made hereunder shall be made in United States Dollars.

*                      *                      *

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

MDC ACQUISITION INC.
By:	/s/
	Name: Michael Sabatino
	Title: President
WWG, LLC
By:	/s/
	Name:    Daniel K. Gregory
	Title:      Managing Member
WWG2, LLC
By:	/s/
	Name:    Daniel K. Gregory
	Title:      Managing Member
TEAM HOLDINGS LLC
By:	/s/
	Name: Daniel K. Gregory
	Title: Manager
MDC PARTNERS INC.
(solely with respect to Section 10.4(j))
By:	/s/
	Name: Mitchell Gendel
	Title: General Counsel and Corporate Secretary

 

i

EX-10.3.1 6 v183284_ex10-3x1.htm

Exhibit 10.3.1

MEMBERSHIP UNIT PURCHASE AGREEMENT

by and among

MF + P ACQUISITION CO.,

INTEGRATED MEDIA SOLUTIONS, LLC

ROBERT INGRAM,

DESIREE DU MONT

and

RON CORVINO

Dated May 6, 2010 and effective as of April 30, 2010

MEMBERSHIP UNIT PURCHASE AGREEMENT

MEMBERSHIP UNIT PURCHASE AGREEMENT (this "Agreement") dated May 6, 2010 and effective as of the close of business on April 30, 2010 (the "Effective Date") , by and among MF + P ACQUISITION CO., a Delaware corporation (the "Purchaser"), INTEGRATED MEDIA SOLUTIONS, LLC, a New York limited liability company ("IMS Holdco"), ROBERT INGRAM ("Ingram"), DESIREE DU MONT ("Desiree"), RON CORVINO ("Ron"; and together with Ingram and Desiree, individually a "Principal" and collectively, the "Principals"), and solely for purposes of Sections 7.6.6 and 8.19, MDC Partners Inc., a corporation existing under the laws of Canada ("MDC Partners").

WITNESSETH:

WHEREAS, IMS Holdco formed Integrated Media Solutions Partners LLC, a Delaware limited liability company (the "Company"), with IMS Holdco as its initial member owning 100% of the issued and outstanding membership units in the Company (the "Membership Units");

WHEREAS, prior to the execution and delivery of this Agreement, IMS Holdco contributed substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business, to the Company pursuant to a General Assignment, Bill of Sale and Assumption Agreement attached hereto as Exhibit A (the "Conveyance Document");

WHEREAS, IMS Holdco desires to sell, and the Purchaser desires to purchase, 75% of the Membership Units to be designated as "Class A Units" (the "Purchased Units"), pursuant to the provisions of this Agreement such that after giving effect to such purchase, the Membership Units will be owned as follows: the Purchaser – 75%; IMS Holdco – 25%;

WHEREAS, simultaneously with the execution and delivery of this Agreement, the Purchaser, IMS Holdco and the Company are executing and delivering an Amended and Restated Limited Liability Company Agreement of the Company (the "Operating Agreement"), attached hereto as Exhibit B;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE I

SALE OF THE PURCHASED UNITS

Section 1.1       Sale of the Purchased Units.   Subject to the terms and conditions herein stated, IMS Holdco agrees to sell, assign, transfer and deliver to the Purchaser as of the Effective Date (as defined in Section 2.2), and the Purchaser agrees to purchase from IMS Holdco as of the Effective Date, the Purchased Units.

ARTICLE II

PURCHASE PRICE AND CLOSING

Section 2.1   Purchase Price; Working Capital Adjustment.

2.1.1    Purchase Price.  In full consideration for the purchase by the Purchaser of the Purchased Units, the purchase price (the "Purchase Price"), shall be calculated and paid by the Purchaser to IMS Holdco, as set forth below (capitalized terms used in this Article II and not otherwise defined, shall have the meaning ascribed to such terms in Sections 2.1.2  below):

(a)       Closing Payment.  At the Closing, the Purchaser shall pay to IMS Holdco an amount equal to $20,000,000 ("CP").

(b)       Working Capital Payment.  If the Effective Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.3, is less than the Target Working Capital (such difference being referred to herein as the "Working Capital Shortfall"), then within five business days after the Special Determination (as defined in Section 2.1.3(i) below) and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.3, (A) IMS Holdco shall pay to the Purchaser 75% of the Working Capital Shortfall and (B) immediately thereafter, IMS Holdco and the Purchaser shall contribute to the capital of the Company as a contribution to capital, 25% and 75%, respectively, of the Working Capital Shortfall.  If IMS Holdco fails to make all or any portion of the payment referred to in (A) above or the contribution referred to in (B) above, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset any remaining unpaid amount against any future Purchase Price payments to IMS Holdco, which in the case of (B) above shall then be contributed by the Purchaser to the capital of the Company in respect of IMS Holdco's obligation under (B) above.  If the Effective Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.3, is greater than Target Working Capital, within five days after the Special Determination and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.3, the Company shall make a distribution to IMS Holdco in the amount of the difference between Target Working Capital and the Effective Date Working Capital. Any amount paid pursuant to this Section 2.1.1(b) shall be referred to as the "Working Capital Payment."

(c)       Top-Up Payments. The Purchaser shall pay to IMS Holdco the following top-up payments (the "Top-Up Payments"):

(i)      On or prior to the first anniversary of the Closing, the Purchaser shall pay to IMS Holdco an amount equal to $3,333,333 (the "Initial Top-Up Amount"), plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment; provided, however, in the event that on or before December 31, 2010 changes in United States federal long-term capital gains tax rates are enacted, which will result in an increase in 2011 federal long-term capital gains rates over 2010 federal long-term capital gains rates (the difference between such rates being referred to herein as the "LTG Rate Increase"), then, at the election of IMS Holdco (which election must be made by IMS Holdco in writing and received by the Purchaser no later than December 20, 2010), such payment shall be made on or prior to December 31, 2010, provided that the Initial Top-Up Amount shall be reduced by an amount equal to the product of (x) the Initial Top-Up Amount times (y) ½ of the LTG Rate Increase.  By way of example, if 2011 federal long-term capital gains rates are increased from 15% to 25%, then the LTG Rate Increase shall be equal to 10%, and, if a payment prior to December 31, 2010 is elected by IMS Holdco, the Initial Top-Up Amount shall be reduced by 5%;

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(ii)     on or prior to the second anniversary of the Closing, an amount equal to $3,333,333, plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment; and

(iii)    on or prior to the third anniversary of the Closing, an amount equal to $3,333,334, plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment.

(d)       First Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2010 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the First Additional Payment ("FAP"), calculated as follows:

FAP = Applicable Percentage x 22.5% x 2010 Adjusted GAAP PBT

; provided, however, in the event that 2010 Adjusted GAAP PBT were less than $5,333,333, then FAP shall equal (A) the excess, if any, of (i) 2010 Adjusted GAAP PBT over (ii) $4,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage.

(e)       Second Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2011 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Second Additional Payment ("SAP"), calculated as follows:

SAP = Applicable Percentage x 22.5% x 2011 Adjusted GAAP PBT

; provided, however, in the event that 2011 Adjusted GAAP PBT were less than $8,000,000, then SAP shall equal (A) the excess, if any, of (i) 2011 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that 2010 Adjusted GAAP PBT were less than $4,000,000 then for purposes of the calculations of SAP above, 2011 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

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(f)        Third Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2012 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Third Additional Payment ("TAP"), calculated as follows:

TAP = Applicable Percentage x 22.5% x 2012 Adjusted GAAP PBT

; provided, however, in the event that 2012 Adjusted GAAP PBT were less than $8,000,000, then TAP shall equal (A) the excess, if any, of (i) 2012 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT and 2011 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP and (B) SAP divided by the Applicable Percentage applicable to SAP divided by (ii) 90% minus (z) the 2010 Growth Payment (as defined in Section 2.1.1(i)(ii) herein), were less than $10,000,000, then for purposes of the calculations of TAP above, 2012 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(g)       Fourth Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2013 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Fourth Additional Payment ("FOAP"), calculated as follows:

FOAP = Applicable Percentage x 22.5% x 2013 Adjusted GAAP PBT

; provided, however, in the event that 2013 Adjusted GAAP PBT were less than $8,000,000, then FOAP shall equal (A) the excess, if any, of (i) 2013 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT, 2011 Adjusted GAAP PBT and 2012 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP, (B) SAP divided by the Applicable Percentage applicable to SAP and (C) TAP divided by the Applicable Percentage applicable to TAP divided by (ii) 90% minus (z) the 2010 Growth Payment, were less than $16,000,000, then for purposes of the calculations of FOAP above, 2013 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(h)       Final Additional Payment.  Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2014 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Final Additional Payment ("FIAP"), calculated as follows:

FIAP = Applicable Percentage x 22.5% x 2014 Adjusted GAAP PBT

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; provided, however, in the event that 2014 Adjusted GAAP PBT were less than $8,000,000, then FIAP shall equal (A) the excess, if any, of (i) 2014 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT, 2011 Adjusted GAAP PBT, 2012 Adjusted GAAP PBT and 2013 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP, (B) SAP divided by the Applicable Percentage applicable to SAP, (C) TAP divided by the Applicable Percentage applicable to TAP and (D) FOAP divided by the Applicable Percentage applicable to FOAP divided by (ii) 90% minus (z) the 2010 Growth Payment, were less than $22,000,000, then for purposes of the calculations of FIAP above, 2014 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(i)        Extra Payment; 2010 Growth Payment.

(i)       (A) The Purchaser shall pay to IMS Holdco an amount equal to $666,666 in respect of the calendar year associated with FAP, such payment to be made in 3 equal installments of $222,222 on the last day of each calendar quarter of the calendar year associated with FAP, commencing with the last day of the second calendar quarter of such calendar year and (B) the Purchaser shall pay to IMS Holdco an amount equal to $1,000,000 in respect of the calendar years associated with SAP or TAP, as the case may be, such payments to be made in 4 equal installments of $250,000 on the last day of each calendar quarter of the calendar years associated with SAP or TAP, as the case may be (each payment under (A) and (B), an "Extra Payment", and collectively, the "Extra Payments"); provided, however, IMS Holdco shall not be entitled to receive the applicable Extra Payment in the event that Adjusted GAAP PBT for the applicable calendar quarter is less than $250,000.

(ii)      Simultaneously with the payment of FAP, on the date FAP is paid to IMS Holdco, the Purchaser shall pay to IMS Holdco an amount equal to: (x) 50% times (y) the excess, if any, of (A) 2010 Adjusted GAAP PBT over (B) $5,906,849 (the "2010 Growth Payment").

(j)        Limitations.  As of any date during the period commencing on the Effective Date and ending on December 31, 2014, in the event the amount equal to (A) aggregate Adjusted GAAP PBT through such date less (B) the sum of the fractions, the numerators of which are each Additional Payment paid or payable through such date, and the denominators of which are the Applicable Percentage applicable to such Additional Payment divided by 90%, less (C) the 2010 Growth Payment, less (D) the aggregate amount of Extra Payments, results in an amount equal to or in excess of $30,000,000, then thereafter each of the provisos set forth in Sections 2.1.1(d) through (h) shall no longer be applicable.

(k)       No Negative Payments. Notwithstanding the potential reduction of Adjusted GAAP PBT as set forth in Sections 2.1.1(e) through (h) above, in the event that the calculation of FAP, SAP, TAP, FOAP or FIAP, as the case may be, results in an amount which is less than zero, such Purchase Price component shall be deemed to be zero.

5

(l)        Payment of the Purchase Price.Payment of each component of the Purchase Price and any payment that is required to be made under this Section 2.1 shall be made in United States dollars by the Purchaser by direct wire transfer to the account of IMS Holdco, as set forth on Schedule 2.1.1 (or to such other account as IMS Holdco may notify the Purchaser in writing).  Each of FAP, SAP, TAP, FOAP or FIAP, the Extra Payments and the 2010 Growth Payment, as the case may be, shall be deemed to include imputed interest, to the extent required by the Internal Revenue Code of 1986, as amended (the "Code").

(m)      Termination of Additional Payments.  Upon the exercise of a Call under Section 10.2(a) of the Operating Agreement, the delivery of a Sale Request Acceptance Notice or the consummation of a sale to a Prospective Purchaser (as such terms are defined in the Operating Agreement), as the case may be, pursuant to Section 10.2 of the Operating Agreement (each a "Sale Event"), IMS Holdco's right to receive any Additional Payments based upon Adjusted GAAP PBT for, or otherwise in respect of, the calendar year in which the applicable Sale Event occurred or for any calendar year(s) thereafter, shall cease, and the obligation of the Purchaser to pay to IMS Holdco any such Additional Payments shall terminate, contemporaneously with the applicable Sale Event.

2.1.2        Definitions.

(i)            "Additional Payments" shall mean the aggregate amount of the payments made in Sections 2.1.1(d) through (h).

(ii)           "Adjusted GAAP PBT" with respect to any year, shall mean Adjusted GAAP PBT (as defined and calculated pursuant to the Operating Agreement) for such year; provided, however, solely with respect to calendar year 2010, 2010 Adjusted GAAP PBT shall be calculated for the period commencing on May 1, 2010 and ending on December 31, 2010.

(iii)          "Applicable Percentage" shall mean, with respect to any Additional Payment, a percentage equal to the result of (A)(x) the average number of Class B Units of the Company owned by IMS Holdco during the calendar year for which Adjusted GAAP PBT is used to calculate such Additional Payment (such average being determined as the quotient of (1) the sum of the products of the varying numbers of Class B Units so owned by IMS Holdco by the number of days in such year each such number was owned by IMS Holdco, and (2) 365 or 366 days, as applicable for such year), divided by (y) the average total number of outstanding Class A Units and Class B Units for such year (calculated on the same basis as provided in the parenthetical under (A)(x) above), divided by (B) 25%.

(iv)          "Effective Date Working Capital" means the current assets of the Company and its subsidiaries, if any, less the current liabilities of the Company and the subsidiaries, if any, as of the close of business as of the Effective Date in accordance with GAAP; provided, however, an amount equal to $366,273 identified on Schedule 3.23(iv) shall not be treated as a current liability solely for purposes of determining the Effective Date Working Capital.

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(v)           "GAAP" shall mean United States generally accepted accounting principles consistently applied.

(vi)          "Target Working Capital" means an amount equal to $1.00.

2.1.3        Accounting Procedures.

(i)            The Purchaser shall, or shall cause BDO Seidman LLP, or another independent accounting firm chosen by the Purchaser (the "Accountants"), at the Purchaser's expense, as soon as practicable after the Closing, to prepare in accordance with GAAP and deliver to the Representative, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business as of the Effective Date immediately after the consummation of the transactions effected by the Conveyance Document (the "Closing Balance Sheet"), together with a statement of the Accountants based upon such report which sets forth the Effective Date Working Capital (the "Special Determination").  The Purchaser shall have the option, in its sole discretion (and at its sole expense) to instruct the Accountants to audit or perform agreed upon procedures on the Closing Balance Sheet and to determine the scope of such audit or procedures.  If the Representative does not agree that the Special Determination correctly states the Effective Date Working Capital, the Representative shall promptly (but not later than 30 days after the delivery to him of the Special Determination) give written notice to the Purchaser of any exceptions thereto (in reasonable detail describing the nature of the disagreement asserted).  If the Representative and the Purchaser reconcile their differences, the Effective Date Working Capital calculation shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  If the dispute relates to an accounting issue and if the Representative and the Purchaser are unable to reconcile their differences in writing within 20 days after written notice of exceptions is delivered to the Purchaser (the "Reconciliation Period"), the accounting items in dispute shall be submitted to a mutually acceptable accounting firm (other than the Accountants) (the "Independent Auditors") for final determination.  The Effective Date Working Capital calculation shall be deemed adjusted in accordance with the determination of the Independent Auditors and shall become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  The Independent Auditors shall consider only the accounting items in dispute and shall be instructed to act within 20 days (or such longer period as the Representative and the Purchaser may agree) to resolve all accounting items in dispute.  If the dispute involves a non-accounting issue and such dispute cannot be reconciled within the Reconciliation Period, the dispute shall be settled by a court of competent jurisdiction.  If the Representative does not give written notice of any exception within 30 days after the delivery to him of the Special Determination or if the Representative gives written notification of his acceptance of the Effective Date Working Capital prior to the end of such 30 day period, the Effective Date Working Capital set forth in the Special Determination shall thereupon become binding, final and conclusive upon all the parties hereto and enforceable in a court of law.

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(ii)           In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 2.1.3, then the Purchaser and the Representative agree to select another accounting firm (other than the Accountants) to perform the services to be performed under this Section 2.1.3 by the Independent Auditors.  If the Purchaser and the Representative fail to select the Independent Auditors as required by Section 2.1.3(i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either the Purchaser or the Representative may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York to appoint an independent firm of certified public accountants to perform the services required under this Section 2.1.3 by the Independent Auditors.  The fees of JAMS shall be shared equally by the Purchaser and IMS Holdco.  For purposes of this Section 2.1.3 the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this Section 2.1.3(ii).

(iii)          The Independent Auditors shall determine the party (i.e., the Purchaser or the Representative) whose asserted position as to the calculation of the Effective Date Working Capital is furthest from the determination of the Effective Date Working Capital by the Independent Auditors, which non-prevailing party shall pay the fees and expenses of the Independent Auditors and shall reimburse the prevailing party for the portion of the fees of JAMS previously paid by it.

2.1.4        Examination of Books and Records.  The books and records of IMS Holdco (with respect to periods prior to the Closing Date) and the Company and its subsidiaries (if any) shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 2.1.  The Principals, on the one hand, and the Purchaser, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by them in making any determinations hereunder or to support a position that is contrary to the position taken by the other party.

Section 2.2       Closing.   The closing of the transactions contemplated by this Agreement (the "Closing") shall take place simultaneously with the execution and delivery of this Agreement effective as of the Effective Date, at the offices of Davis & Gilbert LLP, 1740 Broadway, New York, New York 10019 or by the exchange of documents and instruments by mail, courier, telecopy and wire transfer to the extent mutually acceptable to the parties hereto (the date of closing is referred to as the "Closing Date").  The transactions contemplated by this Agreement shall be effective as of the Effective Date and the Assets (as defined in the Conveyance Document) transferred to the Company shall be those owned by the Company as of the Effective Date, subject to transactions in the ordinary course of business between the Effective Date and the Closing Date.  After the Effective Date and through the Closing Date, the operations of IMS Holdco will be for the account of the Company, and any gain or loss during such period shall inure to the Company’s detriment or benefit.

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Section 2.3       Third Party Consents.  Anything in this Agreement to the contrary notwithstanding, in the event an assignment or purported assignment to the Company of any of the agreements, contracts or commitments of IMS Holdco pursuant to the Conveyance Document or any claim, right or benefit arising thereunder or resulting therefrom, without the consent of other parties thereto, would constitute a breach thereof or would not result in the Company receiving all of the rights of IMS Holdco thereunder, such agreement, contract or commitment shall be deemed not to have been assigned to the Company.  In those circumstances, if reasonably requested by the Purchaser, after the Closing, IMS Holdco and the Principals will use their best efforts to obtain any such consent (excluding the payment of any fees).  If such consent is not obtained and is required to effectively assign any agreement, contract or commitment to the Company, the Principals and IMS Holdco will reasonably cooperate with the Company to provide the Company with the full claims, rights and benefits thereunder, including enforcement at the cost and for the benefit of the Company of any and all rights of IMS Holdco, against a third party thereto arising out of the breach or cancellation by such third party or otherwise, and any amount received by IMS Holdco in respect thereof shall be held for and paid over to the Company.

Section 2.4        Further Assurance; Post Closing Cooperation. IMS Holdco will, from time to time, at the request of the Purchaser, whether at or after the Closing Date, execute and deliver such other and further instruments of conveyance, assignment, transfer and consent necessary for the conveyance, assignment and transfer of the Assets (as defined in the Conveyance Document) pursuant to the Conveyance Document.  Following the Closing, upon reasonable advance notice, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data relating to IMS Holdco or the Company and its subsidiaries, if any, in its possession with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of tax returns, (ii) the determination or enforcement of rights and obligations under this Agreement, (iii) compliance with the requirements of any Governmental or Regulatory Authority (as defined in Section 3.1.2), (iv) the determination or enforcement of the rights and obligations of any party entitled to indemnification under Article VII, (v) any actual or threatened action or proceeding, and (vi) the verification of the Assets and Assumed Liabilities (as defined in the Conveyance Document).

ARTICLE III

REPRESENTATIONS OF IMS HOLDCO AND THE PRINCIPALS

A.  Each of the Principals severally represents and warrants to and with the Purchaser, as follows:

Section 3.1       Execution and Validity of Agreements; Restrictive Documents.

3.1.1        Execution and Validity.  The Principal has the full legal right and capacity to enter into this Agreement and to perform his or her respective obligations hereunder.  This Agreement has been duly and validly executed and delivered by such Principal and, assuming due authorization, execution and delivery by the Purchaser, IMS Holdco and each other Principal a party hereto, constitutes a legal, valid and binding obligation of such Principal, enforceable against such Principal in accordance with its terms.

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3.1.2        No Restrictions.  There is no suit, action, claim, investigation or inquiry by any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision ("Governmental or Regulatory Authority"), and no legal, administrative or arbitration proceeding is pending or, to such Principal's knowledge, threatened against the Principal with respect to the execution, delivery and performance of this Agreement or the transactions contemplated hereby or any other agreement entered into by such Principal in connection with the transactions contemplated hereby.

3.1.3        Non-Contravention.  The execution, delivery and performance by the Principal of his or her obligations hereunder and the consummation of the transactions contemplated hereby, will not as of the Closing Date (a) result in the violation by such Principal of any statute, law, rule, regulation or ordinance (collectively, "Laws"), or any judgment, decree, order, writ, permit or license (collectively, "Orders"), of any Governmental or Regulatory Authority, applicable to such Principal, or (b) conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require such Principal to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of the assets or properties of such Principal, under any of the terms, conditions or provisions of any agreement, commitment, lease, license, evidence of indebtedness, letter of credit, mortgage, indenture, security agreement, instrument, note, bond, franchise, permit, concession, or other instrument, obligation or agreement of any kind, written or oral (collectively, "Contracts"), to which such Principal is a party or by which such Principal or any of his or her assets or properties are bound.

3.1.4        Approvals and Consents.  No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Principal is a party for the execution and delivery of this Agreement by such Principal, the performance by such Principal of his or her obligations hereunder or the consummation of the transactions contemplated hereby.

B.  IMS Holdco and the Principals, jointly and severally, represent and warrant to and with the Purchaser, as follows:

Section 3.2       Existence and Good Standing.  IMS Holdco has the full limited liability company power and authority to enter into this Agreement and the Conveyance Document and to perform its obligations hereunder and thereunder.  The Company has the full limited liability company power and authority to enter into the Conveyance Document and to perform its obligations thereunder. The execution and delivery of this Agreement and the Conveyance Document by IMS Holdco and the Conveyance Document by the Company, and the consummation by such parties of the transactions contemplated hereby and thereby have been duly authorized by all required company action on behalf of such parties.  This Agreement and the Conveyance Document have been duly and validly executed and delivered by IMS Holdco and constitute a legal, valid and binding obligation of IMS Holdco, enforceable against it in accordance with their terms.  The Conveyance Document has been duly and validly executed and delivered by the Company, and constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms.  The Company and IMS Holdco are each duly organized and are each validly existing and in good standing (including tax status) under the laws of the State of Delaware and the State of New York, respectively, with the full power and authority to own their respective properties and to carry on their respective businesses (the business operated by the Company hereinafter referred to as the "Business") all as and in the places where such properties are now owned or operated or such businesses are now being conducted except where such failure to qualify would not have a material adverse effect on the respective businesses.  The Company and IMS Holdco are each duly qualified, licensed or admitted to do business and each of them is in good company and tax standing in the jurisdictions set forth on Schedule 3.2, which are the only jurisdictions in which the ownership, use or leasing of their respective assets and properties, or the conduct or nature of their respective businesses, makes such qualification, licensing or admission necessary.

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Section 3.3       Membership Interests; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments.  The Principals own of record and beneficially have valid title to 100% of the membership interests of IMS Holdco.  IMS Holdco owns of record and beneficially has valid title to 100% of the Membership Units of the Company, including the Purchased Units, and such ownership is free and clear or all Liens.  Except as set forth on Schedule 3.3, there are no outstanding subscriptions, options, warrants, rights (including "phantom stock rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind providing for the purchase, issuance or sale of any equity or ownership or proprietary interest of the Company, or which grants any Person other than IMS Holdco the right to share in the earnings of the Company.  Except as set forth on Schedule 3.3, the Company does not, directly or indirectly, own any equity interest in or have any voting rights with respect to any Person.  There are no outstanding subscriptions, options, rights, warrants, calls, commitments or arrangements of any kind to acquire any of the Purchased Units and there are no agreements or understandings with respect to the sale or transfer of any of the Purchased Units other than this Agreement. There is no suit, action, claim, investigation or inquiry by any Governmental or Regulatory Authority, and no legal, administrative or arbitration proceeding pending or, to the knowledge of the Principals, threatened, against any Principal or the Company or any of the Purchased Units, with respect to the execution, delivery and performance of this Agreement or the Conveyance Document or the transactions contemplated hereby or thereby or any other agreement entered into by the Principals or IMS Holdco in connection with the transactions contemplated hereby or thereby.

Section 3.4       Financial Statements and No Material Changes.  Schedule 3.4(A) sets forth (a) the unaudited balance sheets of IMS Holdco as at December 31, 2008 and December 31, 2009 and the related unaudited statements of operations for the fiscal years then ended, and (b) the unaudited balance sheets of IMS Holdco as at March 31, 2010 (the "Balance Sheet") and the related unaudited statements of operations for the three months then ended.  Such financial statements have been prepared in accordance with GAAP throughout the periods indicated except as set forth on Schedule 3.4(B).  Each balance sheet fairly presents the financial condition of the entity or entities included within such balance sheet, at the respective date thereof, and reflects all claims against and all debts and liabilities of such entities, fixed or contingent, as at the respective date thereof, required to be shown thereon under GAAP and the related statements of operations fairly present the results of operations for the respective period indicated.  Except for the transactions consummated pursuant to the Conveyance Document, since March 31, 2010 (the "Balance Sheet Date"), there has been no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects of IMS Holdco or the Company.

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Section 3.5       Books and Records.  IMS Holdco did not have and the Company does not have any of its records, systems, controls, data or information recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) were not prior to the Effective Date under the exclusive ownership and possession of IMS Holdco and which are not now under the exclusive ownership and possession of the Company.  IMS Holdco or the Principals have delivered to the Purchaser complete and correct copies of the Certificate of Formation and the limited liability company agreement of the Company in effect immediately prior to the execution of this Agreement.

Section 3.6       Title to Properties; Encumbrances; No Prior Activities.

3.6.1        Title to Properties; Encumbrances.  Except for the Excluded Assets listed in the Conveyance Document, IMS Holdco had and the Company now has good and valid title to, or enforceable leasehold interests in or valid rights under contract to use, all the properties and assets owned or used by IMS Holdco (real, personal, tangible and intangible), including, without limitation (a) all the properties and assets reflected in the Balance Sheet, (b) all the properties and assets purchased or otherwise contracted for by IMS Holdco since the Balance Sheet Date (except for properties and assets reflected in the Balance Sheet or acquired or otherwise contracted for since the Balance Sheet Date that have been sold or otherwise disposed of in the ordinary course of business) and (c) all monies received from clients of the Company (including, without limitation, all monies received in connection with the Company's media purchase obligations on behalf of its clients), in each case free and clear of all Liens, except for Liens set forth on Schedule 3.6.  The property, plant and equipment conveyed by IMS Holdco to the Company, whether owned or otherwise contracted for, is in a state of good maintenance and repair (ordinary wear and tear excepted) and is adequate and suitable for the purposes for which they are presently being used, including the Business.

3.6.2        No Prior Activities.  The Company was created solely for the purpose of engaging in the transactions contemplated by the Conveyance Document and this Agreement.  The Company has not engaged in any activities other than in connection with its formation, the negotiation, execution and delivery of this Agreement, the Conveyance Document and the Operating Agreement, and the consummation of the transactions contemplated hereby and thereby.  Except for liabilities incurred in connection with its formation and the consummation of the transactions contemplated by this Agreement, the Conveyance Document and the Operating Agreement, the Company has not incurred any liabilities or entered into any agreements or arrangements with any Person.  As of the Closing Date, (x) neither Media Time Sales LLC nor Performance Fuel Network LLC (collectively, the "Retained Subsidiaries") are engaged in any operational or business activities and (y) the Retained Subsidiaries do not have any liabilities whatsoever or any obligations with respect to any agreements or arrangements with any Person.

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Section 3.7       Real Property.

3.7.1        Owned Real Property.The Company does not own any real property (including ground leases) or hold a freehold interest in any real property or any option or right of first refusal or first offer to acquire any real property.

3.7.2        Leased Real Property.  Schedule 3.7.2 contains an accurate and complete list of all real property leases, subleases, real property licenses and other occupancy agreements, including without limitation, any modification, amendment or supplement thereto and any other related document or agreement executed or entered into by the Company, or by IMS Holdco and assigned to the Company pursuant to the Conveyance Document, to which the Company is a party (as lessee, sublessee, lessor, sublessor, licensor or licensee) (each individually, a "Real Property Lease" and collectively, the "Real Property Leases").  Each Real Property Lease set forth on Schedule 3.7.2 (or required to be set forth on Schedule 3.7.2) is valid, binding and in full force and effect; all rents and additional rents and other sums, expenses and charges due thereunder to date on each such Real Property Lease have been paid; and the lessee has been in peaceable possession since the commencement of the original term of such Real Property Lease and no waiver, indulgence or postponement of the lessee's obligations thereunder has been granted by the lessor.  There exists no default or event of default by IMS Holdco or the Company or to the knowledge of the Principals by any other party to any Real Property Lease; and there exists no occurrence, condition or act (including the purchase of the Purchased Units hereunder) which, with the giving of notice, the lapse of time or the happening of any further event or condition, would become a default or event of default by IMS Holdco or the Company under any Real Property Lease, and there are no outstanding claims of breach or indemnification or notice of default or termination of any Real Property Lease.  IMS Holdco held and the Company now holds the leasehold estate on all the Real Property Leases free and clear of all Liens except as set forth on Schedule 3.7.2.  The real property leased by IMS Holdco and/or the Company is in a state of good maintenance and repair (ordinary wear and tear excepted), adequate and suitable for the purposes for which it is presently being used, and there are no material repair or restoration works likely to be required in connection with any of the leased real properties.  IMS Holdco was, and the Company now is, in physical possession and actual and exclusive occupation of the whole of each of its leased properties.  No environmental claim has been made against IMS Holdco or the Company with respect to any Real Property Lease.  Neither IMS Holdco nor the Company owes any brokerage commission with respect to any of the Real Property Leases.

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Section 3.8       Contracts.  Schedule 3.8 hereto contains an accurate and complete list of the following Contracts (whether written or oral, but indicating which Contracts are oral) to which the Company is currently a party or IMS Holdco was a party immediately prior to the assignment of the same to the Company pursuant to the Conveyance Document (and Schedule 3.8 indicates if a listed item has not been assigned to and assumed by the Company pursuant to the Conveyance Document): (a) all Plans (as such term is defined in Section 3.19), (b) any personal property lease with a fixed annual rental of $10,000 or more, (c) any Contract relating to capital expenditures which involves payments of $25,000 or more in any single transaction or series of related transactions, (d) any Contract relating to the making of a loan or advance to or investment in, any other Person, (e) any agreement, instrument or arrangement evidencing or relating in any way to indebtedness for money borrowed or to be borrowed, whether directly or indirectly, by way of loan, purchase money obligation, guarantee (other than the endorsement of negotiable instruments for collection in the ordinary course of business), conditional sale, purchase or otherwise, (f) any management service, employment, consulting or similar type of Contract which is not cancelable by the Company or IMS Holdco without penalty or other financial obligation within 30 days, (g) any Contract limiting the Company's freedom to engage in any line of business or to compete with any other Person, including, without limitation, any agreement limiting the ability of the Company or IMS Holdco or any of their respective affiliates to take on competitive accounts during or after the term thereof, (h) any collective bargaining or union agreement, (i) any Contract between the Company, on the one hand, and any officer or director thereof, on the other hand, not covered by subsection (f) above (including indemnification agreements), (j) any secrecy or confidentiality agreement (other than standard confidentiality agreements in computer software license agreements or agreements with clients entered into in the ordinary course of business), (k) any agreement with respect to any Intellectual Property (as defined in Section 3.14) other than "shrink-wrap" and similar end-user licenses, (l) any agreement with a client required to be listed on Schedule 3.16, (m) any agreement, indenture or other instrument which restricts the ability of the Company or any of its subsidiaries to make distributions in respect of its equity, (n) any joint venture agreement involving a sharing of profits not covered by clauses (a) through (m) above, (o) any Contract (not covered by another subsection of this Section 3.8) which involves $25,000 or more over the unexpired term thereof and is not cancelable by the Company, without penalty or other financial obligation within 30 days; provided, however, Contracts of a similar nature which individually do not involve $25,000 but in the aggregate involve $25,000 or more over the unexpired terms shall also be set forth on Schedule 3.8, (p) any Contract with a media buying service; provided, however, commitments to purchase media in the ordinary course of business do not have to be set forth on Schedule 3.8, and (q) any agreement (not covered by another subsection of this Section 3.8) between the Company, on the one hand, and any member of the Company, on the other hand. Notwithstanding anything to the contrary contained above, (x) commitments to media and production expenses which are fully reimbursable from clients, and (y) estimates or purchase orders given in the ordinary course of business relating to the execution of projects, do not have to be set forth on Schedule 3.8. Each Contract which has been assigned to and assumed by the Company pursuant to the Conveyance Document, including without limitation, those required to be set forth on Schedule 3.8, is in full force and effect, and there exists no default or event of default by the Company or IMS Holdco or, to the knowledge of the Principals, by any other party, or occurrence, condition, or act (including the purchase of the Purchased Units hereunder) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default thereunder by the Company, and there are no outstanding claims of breach or indemnification or notice of default or termination of any such Contract.  Summaries of all oral Contracts contained on Schedule 3.8 are complete and accurate in all material respects.

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Section 3.9       Non-Contravention; Approvals and Consents.   The execution, delivery and performance by the Principals, the Company and IMS Holdco of their respective obligations under this Agreement and the Conveyance Document and the consummation of the transactions contemplated hereby and thereby, will not (a) violate, conflict with or result in the breach of any provision of the certificate of formation and limited liability company agreement (or other comparable documents) of the Company or IMS Holdco; (b) result in the violation by the Company or IMS Holdco of any Laws or Orders of any Governmental or Regulatory Authority, or (c) if the consents and notices set forth in Schedule 3.9 are obtained, conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Company or IMS Holdco to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of their respective assets or properties, or under any of the terms, conditions or provisions of any Contract to which the Company or IMS Holdco is a party or by which the Company or IMS Holdco or any of their respective assets or properties are or were bound.  Except as set forth in Schedule 3.9, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Company or IMS Holdco is a party, or by which their respective assets or properties were or are bound, for the execution and delivery of this Agreement or the Conveyance Document, the performance by the Company or IMS Holdco of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby.

Section 3.10     Litigation.  Except as set forth on Schedule 3.10, there is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Principals, any investigation by) any Governmental or Regulatory Authority, pending or, to the knowledge of the Principals, threatened, against the Company or IMS Holdco with respect to this Agreement or the transactions contemplated hereby or by the Conveyance Document, or any other agreement entered into by the Company or IMS Holdco in connection with the transactions contemplated hereby, or against or affecting the Business or the assets transferred to the Company pursuant to the Conveyance Document; and no acts, facts, circumstances, events or conditions occurred or exist which are a basis for any such action, proceeding or investigation.  Neither the Company nor IMS Holdco is subject to any Order entered in any lawsuit or proceeding. Schedule 3.10 also sets forth with respect to each pending or, to the knowledge of the Principals, threatened action, suit or proceeding listed thereon, the amount of costs, expenses or damages the Company or IMS Holdco has incurred to date and reasonably expects to incur through the conclusion thereof.

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Section 3.11    Taxes.   Each of IMS Holdco and the Company have timely completed and filed, or caused to be filed, taking into account any valid extensions of due dates, completely and accurately, all federal, state, local and foreign (if any) tax or information returns (including estimated tax returns) required under the statutes, rules or regulations of such jurisdictions to be filed by each of them.  The term "Taxes" means taxes, duties, charges or levies of any nature imposed by any taxing or other Governmental or Regulatory Authority, including without limitation income, gains, capital gains, surtax, capital, franchise, capital stock, value-added taxes, taxes required to be deducted from payments made by the payor and accounted for to any tax authority, employees' income withholding, back-up withholding, withholding on payments to foreign Persons, social security, national insurance, unemployment, worker's compensation, payroll, disability, real property, personal property, sales, use, goods and services or other commodity taxes, business, occupancy, excise, customs and import duties, transfer, stamp, and other taxes (including interest, penalties or additions to tax in respect of the foregoing), and includes all taxes payable by IMS Holdco or the Company pursuant to Treasury Regulations §1.1502-6 or any similar provision of state, local or foreign law.  All Taxes shown on said returns to be due and all other Taxes due and owing (whether or not shown on any Tax return) have been paid and all additional assessments received prior to the Closing Date have been paid or are being contested in good faith, in which case, such contested assessments are set forth on Schedule 3.11.  Each of IMS Holdco and the Company has collected all sales, use, goods and services or other commodity Taxes required to be collected and remitted or will remit the same to the appropriate taxing authority within the prescribed time periods.  Each of IMS Holdco and the Company have withheld all amounts required to be withheld on account of Taxes from amounts paid to employees, former employees, directors, officers, members, residents and non-residents and remitted or will remit the same to the appropriate taxing authorities within the prescribed time periods.  The amount set up as an accrual for Taxes (aside from any reserved for deferred Taxes established to reflect timing differences between book and Tax accrual) on the Balance Sheet (as opposed to the notes thereto) is sufficient for the payment of all unpaid Taxes of IMS Holdco, whether or not disputed, for all periods ended on and prior to the date thereof.  Since the Balance Sheet Date, IMS Holdco has not incurred any liabilities for Taxes other than in the ordinary course of the business of IMS Holdco consistent with past custom and practice. To the knowledge of the Principals, no member, manager, director or officer (or employee responsible for Tax matters) of IMS Holdco or the Company has any reason to believe that any authorities may assess any additional Taxes for any period for which Tax returns have been filed.  The Principals have delivered to the Purchaser correct and complete copies of all federal, state and local income tax returns filed with respect to IMS Holdco and the Company that were requested by the Purchaser.  Except as set forth on Schedule 3.11, none of the federal, state or local income tax returns of either IMS Holdco or the Company have ever been audited by the Internal Revenue Service or any other Governmental or Regulatory Authority.  No examination of any return of IMS Holdco or the Company is currently in progress, and neither IMS Holdco nor the Company has received notice of any proposed audit or examination.  No deficiency in the payment of Taxes by IMS Holdco or the Company for any period has been asserted in writing by any taxing authority and remains unsettled at the date of this Agreement.  Neither IMS Holdco nor the Company has made any agreement, waiver or other arrangement providing for an extension of time with respect to the assessment or collection of any Taxes against it.  Neither IMS Holdco nor the Company has been a member of an affiliated group filing consolidated federal income tax returns nor has it been included in any combined, consolidated or unitary state or local income tax return.  Neither IMS Holdco nor the Company will be required as a result of a change in accounting method for any period ending on or before the Closing Date to include any adjustment under Section 481 of the Code (or any similar provision of state, local or foreign income tax law) in income for any period ending after the Closing Date, or as a result of a change for any period that may be required by law in connection with this transaction.  Neither IMS Holdco nor the Company is obligated to make any payments or is a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Section 280G of the Code.  Neither IMS Holdco nor the Company is or has been a U.S. real property holding corporation within the meaning or Section 897 of the Code and none of the Principals or IMS Holdco are nonresident alien individuals within the meaning of Section 871(b)(1) of the Code.  Neither IMS Holdco nor the Company has entered into any Tax sharing or indemnification agreement with any party.  The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); (ii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iii) prepaid amount received on or prior to the Closing Date.  Since its inception, IMS Holdco has been treated as a partnership for federal, state, local and foreign income tax purposes and will continue to be treated as a partnership through the Closing Date. Since its formation, the Company has been treated as disregarded entity within the meaning of Treasury Regulation Section 301.7701-3 for federal, state and local income tax purposes.

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Section 3.12     Liabilities.  Except for the Assumed Liabilities (as defined in the Conveyance Document) set forth in the Conveyance Document, or as set forth on Schedule 3.12, neither the Company nor IMS Holdco has any outstanding claims, liabilities or indebtedness of any nature whatsoever as to which the Company is or may become responsible (collectively in this Section 3.12, "Liabilities"), whether accrued, absolute or contingent, determined or undetermined, asserted or unasserted, and whether due or to become due, other than (i) Liabilities specifically disclosed in any Schedule hereto; (ii) Liabilities under Contracts of the type required to be disclosed by IMS Holdco, the Company and the Principals on any Schedule and so disclosed or which because of the dollar amount or other qualifications are not required to be listed on such Schedule; and (iii) Liabilities incurred since the Balance Sheet Date in the ordinary course of business and consistent with past practice of IMS Holdco or the Company, as the case may be.

Section 3.13     Insurance.  Schedule 3.13 contains a true and complete list (including the names and addresses of the insurers, the names of the Persons to whom such insurance policies have been issued, the expiration dates thereof, the annual premiums and payment terms thereof, whether it is a "claims made" or an "occurrence" policy and a brief description of the interests insured thereby) of all liability, property, workers' compensation and other insurance policies currently in effect that insure the property, assets, Business and employees of the Company, including but not limited to the property, assets, business and employees of IMS Holdco that were transferred to the Company pursuant to the Conveyance Document (other than self-obtained insurance policies by such employees). Each such insurance policy is valid and binding and in full force and effect, all premiums due thereunder have been paid and neither IMS Holdco nor the Company has received any notice of cancellation or termination in respect of any such policy or default thereunder.  To the knowledge of the Principals, such insurance policies are placed with financially sound and reputable insurers, and are in amounts and have coverage that are reasonable and customary for Persons engaged in the operation of the Business.  Neither IMS Holdco nor the Company, or to the knowledge of the Principals, the Person to whom such policy has been issued has received notice that any insurer under any policy referred to in this Section 3.13 is denying liability with respect to a claim thereunder or defending under a reservation of rights clause.  Within the last two years neither IMS Holdco nor the Company has filed for any claims exceeding $25,000 against any of its insurance policies, exclusive of automobile and health insurance policies. None of such policies shall lapse or terminate by reason of the transactions contemplated by this Agreement or the Conveyance Document and all such policies shall continue in effect after the Closing Date for the benefit of the Company.  Neither IMS Holdco nor the Company has received any notice of cancellation of any such policy.  Neither IMS Holdco nor the Company has received written notice from any of its insurance carriers that any premiums will be materially increased in the future or that any insurance coverage listed on Schedule 3.13 will not be available in the future on substantially the same terms now in effect. Neither IMS Holdco nor the Company has been refused any insurance or required to pay higher than normal or customary premiums, nor has its coverage been limited by any insurance carrier to which it has applied for insurance during the last three years.

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Section 3.14     Intellectual Properties.

3.14.1      Definitions.  For purposes of this Agreement, the following terms have the following definitions:

"Intellectual Property" shall include, without limitation, any or all of the following and all rights associated therewith: (a) all domestic and foreign patents, and applications therefor, and all reissues, reexaminations, divisions, renewals, extensions, continuations and continuations-in-part thereof; (b) all inventions (whether patentable or not), invention disclosures, improvements; (c) trade secrets, confidential and proprietary information, know how, technology, technical data and customer lists, financial and marketing data, pricing and cost information, business and marketing plans, databases and compilations of data, rights of privacy and publicity, and all documentation relating to any of the foregoing; (d) all copyrights, copyright registrations and applications therefor, unregistered copyrights, the content of all World Wide Web sites of a Person and all other rights corresponding thereto throughout the world; (e) all mask works, mask work registrations and applications therefor; (f) all industrial designs and any registrations and applications therefor; (g) all trade names, corporate names, logos, trade dress, common law trademarks and service marks, trademark and service mark registrations and applications therefor and all goodwill associated therewith; (h) any and all Internet domain names and Web sites (including all software and applications, and all components and/or modules thereof), used in connection therewith; and (i) all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded, and all documentation related to any of the foregoing.

"Intellectual Property of the Company" shall mean any Intellectual Property that is owned by the Company (including Intellectual Property transferred by IMS Holdco to the Company pursuant to the Conveyance Document), including Registered IP and Unregistered IP.

"Licensed Intellectual Property" means any Intellectual Property owned by another Person that is used by the Company in the operation of the Business, including Off-the-Shelf Software (as defined below), but excluding rights in or to materials created for clients, to the extent to which such (x) client is the first owner of copyright in such materials or (y) the materials are subject to a written assignment of copyright in favor of clients of the Company.

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3.14.2      Representations.  Except as set forth on Schedule 3.14.2, all of the Intellectual Property of IMS Holdco was transferred to the Company pursuant to the Conveyance Document. Schedule 3.14.2 hereto contains an accurate and complete list of all (a) patents, patent applications, registered trademarks, applications for registered trademarks, registered service marks, domain names, applications for registered service marks, logos, registered copyrights and applications for registered copyrights which are owned by the Company (the "Registered IP"), (b) all unregistered trademarks, unregistered service marks and material unregistered copyrights which are owned by the Company (the "Unregistered IP") and (c) all Licensed Intellectual Property that is material to the operation of the Business, other than widely distributed off-the-shelf applications subject to shrink-wrap and similar non-negotiated end-user license agreements ("Off-the-Shelf Software"). Except as set forth on Schedule 3.14.2, the registrations and applications of the Registered IP listed on Schedule 3.14.2 are in the name of IMS Holdco, and are valid, in proper form, enforceable and subsisting, all necessary registration and renewal fees in connection with such registrations have been made and all necessary documents and certificates in connection with such registrations have been filed with the relevant patent and Internet domain names, copyrights and trademark authorities in the United States or other jurisdictions where the Business is conducted for the purposes of maintaining such Intellectual Property registrations, and applications therefor, and no actions (including filing of documents or payments of fees) are due within ninety (90) days after the Closing.  No registration, or application therefor, for any of the Registered IP has lapsed, expired, or been abandoned, and no such registrations, or applications therefor, are the subject of any opposition, interference, cancellation, or other legal, quasi-legal, or governmental proceeding pending before any governmental, registration, or other authority in any jurisdiction.  Except as set forth on Schedule 3.14.2, (i) the Company is the sole and exclusive owner of all rights, title and interest in and to the Intellectual Property of the Company, free and clear of all Liens, (ii) no Person has any rights to use any of the Intellectual Property of the Company, (iii) neither IMS Holdco nor the Company has granted to any Person, or authorized any Person to retain, any ownership in the Intellectual Property of the Company, and (iv) all Licensed Intellectual Property in the Company's possession or used in the operation of the Business has been properly licensed from the owner of such Intellectual Property, and the Company possesses all license agreements, certificates or documentation sufficient to substantiate such rights, and the Company is in compliance with, and IMS Holdco has not in the past violated, such license agreements.  Except as set forth on Schedule 3.14.2,the consummation of the transactions contemplated hereby will not result in any loss or impairment of the Company's rights to own or use any Intellectual Property, nor will such consummation require the consent of any third party in respect of any Intellectual Property. The operation of the Business and use of all Intellectual Property therein does not infringe the Intellectual Property of any other Person. There are no proceedings pending or, to the knowledge of the Principals, threatened against IMS Holdco or the Company with respect to the Intellectual Property, or with respect to any other Intellectual Property, alleging the infringement or misappropriation by IMS Holdco or the Company of any Intellectual Property of any Person, and neither IMS Holdco nor the Company has received notice from any Person that the operation of the Business infringes the Intellectual Property of any Person.  There are no claims pending or, to the knowledge of the Principals, threatened challenging the validity of any Intellectual Property of the Company or any Intellectual Property used by the Company in the conduct of the Business. Neither IMS Holdco nor the Company has entered into or is otherwise bound by any consent, forbearance or any settlement agreement which limits the rights of the Company to use the Intellectual Property of the Company. To the knowledge of the Principals, no Person is infringing or misappropriating any of the Intellectual Property of the Company. All Intellectual Property of the Company was either developed (a) by employees of IMS Holdco within the scope of such employee's employment duties; or (b) by independent contractors or other third parties who have assigned all of their rights therein to IMS Holdco pursuant to a written agreement, and all such employees, independent contractors, and other third parties have waived, pursuant to a written agreement, their moral rights in all such Intellectual Property in favor of the Company or IMS Holdco.  Except as set forth on Schedule 3.14.2, the Intellectual Property of the Company does not contain any software licensed under terms which require, as a condition of the use, modification, or distribution of such software, that other software incorporated into, derived from, or distributed with such software: (x) be disclosed or distributed in source code form; (y) be licensed under terms that permit making derivative works; or (z) be redistributable at no charge to subsequent licensees.

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3.14.3      Privacy and Security.  All information or data of any kind possessed by the Company, including but not limited to, personally identifiable information collected from consumers ("PII"), aggregate or anonymous information collected from consumers ("Non-PII") and employee data (collectively, "Data"), has been collected, by IMS Holdco or the Company, or any other Person, and is being maintained, stored, processed and used by the Company, in compliance with all Laws and Orders.  IMS Holdco or the Company has at all times presented a privacy policy ("Privacy Policy") to consumers prior to the collection of any PII or Non-PII online.  The Privacy Policy, and any other representations, marketing materials and advertisements that address privacy issues and the treatment of PII and Non-PII, accurately and completely describe IMS Holdco's and the Company's respective information collection and use practices, and no such notices or disclosures have been inaccurate, misleading or deceptive.  Neither IMS Holdco nor the Company has collected or received any PII from children under the age of 13 without verifiable parental consent or directed any of its websites to children under the age of 13 through which such PII could be obtained.  IMS Holdco and the Company have stored and maintained all Data in a secure manner, using commercially reasonable technical measures, to assure the integrity and security of the Data and to prevent loss, alteration, corruption, misuse and unauthorized access to such Data.  There has been no unauthorized use, access to or disclosure of any Data.  Neither IMS Holdco nor the Company has received any claims, notices or complaints regarding its information practices or use of Data.  The consummation of the transactions contemplated hereby will not result in any loss or impairment of the rights to own and use any Data, nor will such consummation require the consent of any third party in respect of any Data.

Section 3.15     Compliance with Laws.  The Company is, and the Business (including the business conducted by IMS Holdco) has been conducted, in compliance with all applicable Laws and Orders, except in each case (other than with respect to compliance with environmental Laws and Orders relating to the regulation or protection of the environment ("Environmental Laws and Orders")) where the failure to so comply would not reasonably be expected to have a Material Adverse Effect (as defined below), including without limitation: (a) all Laws and Orders promulgated by the Federal Trade Commission or any other Governmental or Regulatory Authority; (b) all Environmental Laws and Orders; and (c) all Laws and Orders relating to labor, civil rights, and occupational safety and health laws, worker's compensation, employment and wages, hours and vacations, or pay equity. Neither IMS Holdco nor the Company has been charged with, or, to the knowledge of the Principals, threatened with or under any investigation with respect to, any charge concerning any violation of any Laws or Orders. The term "Material Adverse Effect" as it applies to IMS Holdco or the Company, shall mean a material adverse effect on its operations, business, prospects, assets or financial condition. The Company has all permits, licenses, and other government certificates, authorizations and approvals ("Required Permits") required by any Governmental or Regulatory Authority for the operation of the Business, except where the failure to have such Required Permits would not reasonably be expected to have a Material Adverse Effect.  All of the Required Permits are in full force and effect and no action or claim is pending, nor to the knowledge of the Principals, threatened, to revoke or terminate any such Required Permit or declare any such Required Permit invalid in any respect.

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Section 3.16     Client Relations.  Schedule 3.16 sets forth (a) the 20 largest clients of IMS Holdco (measured by revenues), and the revenues from each such client and from all clients (in the aggregate) for the calendar year ended December 31, 2009 and (b) the clients projected to be the 20 largest clients (measured by revenues) of the Company based on its current profit plan for the twelve months ending December 31, 2010, together with the estimated revenues from each such client and all clients (in the aggregate) for such period.  IMS Holdco and the Principals represent that the estimated revenues set forth on Schedule 3.16 were made in good faith and on a reasonable basis.  Except as set forth on Schedule 3.16, no client of IMS Holdco or the Company has advised IMS Holdco, the Company or any Principal in writing that it is (x) terminating or considering terminating the handling of its business by IMS Holdco or the Company or in respect of any particular product, project or service or (y) planning to reduce its future spending with IMS Holdco or the Company in any material manner; and no client has orally advised the Company, IMS Holdco or any Principal of any of the foregoing events.

Section 3.17     Accounts Receivable; Work-in-Process; Accounts Payable.  The amount of all work-in-process, accounts receivable, unbilled invoices (including without limitation unbilled invoices for services and out-of-pocket expenses) and other debts due or recorded in the records and books of account of IMS Holdco and which were transferred to the Company pursuant to the Conveyance Document, as being due to the Company and reflected on the Balance Sheet and the Closing Balance Sheet represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and will be good and collectible in full (less the amount of any provision, reserve or similar adjustment therefor reflected on the Balance Sheet and the Closing Balance Sheet) in the ordinary course of business, and none of the accounts receivable or other debts (or accounts receivable arising from any such work-in-process or unbilled invoices) is or will be subject to any counterclaim or set-off except to the extent of any such provision, reserve or adjustment.  The accounts payable set forth on the Balance Sheet, and the accounts payable incurred since the Balance Sheet Date through the Closing Date, represent trade payables resulting from bona fide transactions incurred in the ordinary course of business. There has been no change since the Balance Sheet Date in the amount or aging of the work-in-process, accounts receivable, unbilled invoices, or other debts due to the Company, or the reserves with respect thereto, or accounts payable of the Company which would have a Material Adverse Effect.

Section 3.18     Employment Relations.  (a) No unfair labor practice complaint against IMS Holdco or the Company is pending before any Governmental or Regulatory Authority; (b) there is no organized labor strike, dispute, slowdown or stoppage pending or to the knowledge of the Principals, threatened against or involving the Business; (c) there are no labor unions representing or, to the knowledge of the Principals, attempting to represent the employees of IMS Holdco who became employees of the Company; (d) no claim or grievance nor any arbitration proceeding arising out of or under any collective bargaining agreement is pending against any of the Company, IMS Holdco or the Principals and to the knowledge of the Principals, no such claim or grievance has been threatened; (e) no collective bargaining agreement is currently being negotiated by IMS Holdco or the Company; and (f) IMS Holdco did not experience any work stoppage or similar organized labor dispute during the last three years.  Except as set forth on Schedule 3.10, there is no legal action, suit, proceeding or claim pending or, to the knowledge of the Principals, threatened between the Company or IMS Holdco and any employees or former employees of the Company or IMS Holdco, agents or former agents of the Company or IMS Holdco, job applicants or any association or group of any employees of the Company or IMS Holdco, in each case prior to the transfer of the Business to the Company.

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Section 3.19     Employee Benefit Matters.

3.19.1      List of Plans.  Schedule 3.8 to this Agreement lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus, incentive, deferred compensation, stock option, restricted stock, stock appreciation rights, phantom stock rights, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, individual retirement programs or arrangements, and all termination, severance or other Contracts, whether covering one Person or more than one Person, and whether or not subject to any of the provisions of ERISA, which are or have been maintained, contributed to or sponsored by IMS Holdco or the Company or any ERISA Affiliate (as defined in Section 3.19.3) for the benefit of any employee of IMS Holdco or the Company (each item listed on Schedule 3.8 being referred to herein individually, as a "Plan" and collectively, as the "Plans").  For purposes of this Agreement, "foreign benefit plan" means each material plan, program or agreement contributed to, sponsored or maintained by either IMS Holdco, the Company or any ERISA Affiliate that is maintained outside of the United States, or that covers primarily employees residing or working outside of the United States, and which would be treated as a Plan had it been a material United States plan, program or agreement.  IMS Holdco has delivered to the Purchaser, to the extent applicable, a complete and accurate copy of: (a) each written Plan and descriptions of any unwritten Plan (including all amendments thereto whether or not such amendments are currently effective); (b) each summary plan description and all summaries of subsequent material modifications relating to a Plan; (c) each current trust agreement or other funding arrangement with respect to each Plan, including insurance contracts; (d) the most recently filed IRS Form 5500 relating to each Plan, if any; (e) the most recently received IRS opinion, advisory or determination letter for each Plan, if any; and (f) the three most recently prepared actuarial reports (if applicable) and financial statements, if any, in connection with each Plan.  None of the Principals, IMS Holdco or the Company has made any commitment, (i) to create or cause to exist any Plan not set forth on Schedule 3.8 or (ii) to modify, change or terminate any Plan.

3.19.2      Severance.  None of the Plans, nor, except as set forth on Schedule 3.19.2, any employment agreement or other Contract to which IMS Holdco or the Company is a party or bound, (a) provides for the payment of or obligates IMS Holdco or the Company to pay separation, severance, termination or similar-type benefits to any Person; or (b) obligates IMS Holdco or the Company to pay separation, severance, termination or similar-type benefits as a result of any transaction contemplated by this Agreement or as a result of a "change in control," within the meaning of such term under Section 280G of the Code, either alone or in conjunction with any subsequent occurrence.

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3.19.3      Multi-Employer Plans.  None of IMS Holdco, the Company or any ERISA Affiliate has maintained, contributed to or participated within the preceding three years in a multi-employer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) or a multiple employer plan subject to Sections 4063 and 4064 of ERISA, nor has any obligations or liabilities, including withdrawal, reorganization or successor liabilities, regarding any such plan. As used herein, the term "ERISA Affiliate" means any Person that is or has been a member of a controlled group of organizations (within the meaning of Sections 414(b), (c), (m) or (o) of the Code) of which IMS Holdco or the Company is a member.

3.19.4      Welfare Benefit Plans.  Each of IMS Holdco and the Company has expressly reserved the right, in all Plan documents relating to welfare benefits provided to employees, former employees, officers, directors and other participants and beneficiaries, to amend, modify or terminate at any time the Plans which provide for welfare benefits, and neither IMS Holdco nor any Principal is aware of any fact, event or condition that could reasonably be expected to restrict or impair such right. Except as required under Section 601 of ERISA, none of IMS Holdco, the Company or any ERISA Affiliate has made any promises or commitments to provide, and is not obligated to provide (i) medical benefits (including without limitation through insurance) to retirees or former employees of IMS Holdco, the Company or any ERISA Affiliate or their respective dependants, or (ii) life insurance or other death benefits to retired employees or former employees of IMS Holdco, the Company or any ERISA Affiliate or their respective dependants.

3.19.5      Administrative Compliance.  Each Plan is now and has been operated in all material respects in accordance with the requirements of its terms and with all applicable Laws, including, without limitation, ERISA, the Health Insurance Portability and Accountability Act of 1996 (as amended by the Health Information Technology for Economic and Clinical Health Act) and the Code, including, without limitation, all nondiscrimination and minimum coverage requirements of Sections 401(a) and 410(b) thereof, the Age Discrimination in Employment Act, Family and Medical Leave Act, the Americans with Disabilities Act, the Equal Pay Act, Title VII of the Civil Rights Act of 1964, and the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, and the regulations and authorities published thereunder.  Each of IMS Holdco and the Company has performed all obligations required to be performed by it under, is not in any respect in default under or in violation of, and the Principals have no knowledge of any default or violation by any Person under, any Plan.  Except as set forth on Schedule 3.9, no legal action, suit, audit, investigation or claim is pending or threatened with respect to any Plan (other than claims for benefits in the ordinary course), and no fact, event or condition exists that would be reasonably likely to provide a legal basis for any such action, suit, audit, investigation or claim.  All reports, disclosures, notices and filings with respect to such Plans required to be made to employees, participants, beneficiaries, alternate payees and any Governmental or Regulatory Authority have been timely made or an extension has been timely obtained. With respect to any insurance policy providing funding for benefits or an investment alternative under any Plan, (i) no liability or loss shall be incurred by the Company or any such Plan in the nature of a retroactive rate adjustment, loss sharing arrangement or other liability or loss, and (ii) no insurance company issuing any such policy is in receivership, conservatorship, liquidation or similar proceeding and, to the knowledge of the Principals, no such proceedings with respect to any insurer are imminent.

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3.19.6      Tax-Qualification.  Each Plan which is intended to be qualified under Sections 401(a) or 408(k) of the Code is qualified under Sections 401(a) and 408(k) of the Code (and, if applicable, complies with the requirements of Section 401(k) of the Code), and has received a favorable opinion, advisory or determination letter from the IRS that it is so qualified or is covered by a determination letter issued for master or prototype plans.  Each trust established in connection with any Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code is exempt under Section 501(a) of the Code; and no fact or event has occurred or condition exists since the date of such opinion, advisory or determination letter from the IRS which would be reasonably likely to adversely affect the qualified status of any such Plan or the exempt status of any such trust. Each Plan that is a foreign benefit plan which is intended to be qualified with the appropriate Governmental or Regulatory Authority in the relevant country has received a favorable determination that it is so qualified, and each trust established in connection with such foreign benefit plan that is intended to be exempt from taxation has received a favorable determination that it is so exempt.

3.19.7      Funding; Excise Taxes.  There has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan subject to ERISA.  None of IMS Holdco, the Company or any ERISA Affiliate has incurred any liability for any excise tax arising under Sections 4971, 4972, 4973, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980, 4980B, 4980D or 4980E of the Code or any civil penalty arising under Sections 409, 502(i) or 502(l) of ERISA, and no fact, event or condition exists which could give rise to any such liability.  None of IMS Holdco, the Company or any ERISA Affiliate has incurred any liability under, arising out of or by operation of Section 302(c)(11) or Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation ("PBGC") arising in the ordinary course), including, without limitation, any liability in connection with the termination of any employee benefit plan subject to Title IV of ERISA (a "Title IV Plan"); and, no fact, event or condition exists which could give rise to any such liability.  No complete or partial termination has occurred within the five years preceding the Closing Date with respect to any Plan maintained by IMS Holdco, the Company or any ERISA Affiliate, and no reportable event (within the meaning of Section 4043 of ERISA), notice of which has not been waived by the PBGC, has occurred or is expected to occur with respect to any Plan maintained by IMS Holdco, the Company or any ERISA Affiliate. The transactions contemplated by this Agreement and the Conveyance Document will not result in liability to IMS Holdco, the Company or the Purchaser under Section 4069 of ERISA.  No Title IV Plan or Plan subject to Section 302 of ERISA maintained by IMS Holdco, the Company or any ERISA Affiliate had an accumulated funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of the most recently ended plan year of such Plan.  None of the assets of IMS Holdco, the Company or any ERISA Affiliate is the subject of any Lien arising under Section 302(f) of ERISA or Section 412(n) of the Code; none of IMS Holdco, the Company or any ERISA Affiliate has been required to post any security under Section 307 of ERISA or Section 401(a) (29) of the Code relating to any Plan; and no fact or event exists which could give rise to any such Lien or requirement to post any such security.  As of the Closing Date, no Plan which is a Title IV Plan will have an "unfunded benefit liability" (within the meaning of Section 4001(a)(18) of ERISA) and no Plan which is subject to Section 302 of ERISA will have in "accumulated funding deficiency" (within the meaning of Section 302(a)(2) of ERISA).

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3.19.8      Tax Deductions.  All contributions, premiums or payments (including all employer contributions and, if applicable, employee salary reduction contributions) required to be made, paid or accrued with respect to any Plan have been made, paid or accrued on or before their due dates, including extensions thereof.  All such contributions have been fully deducted (to the extent deductible by the Company) or in the case of the current year will be deducted (to the extent deductible by the Company) for income tax purposes and no such deduction has been challenged or disallowed by any Governmental or Regulatory Authority, and no fact or event exists which could give rise to any such challenge or disallowance.

3.19.9      409A.  With respect to each Plan (and any other arrangement involving the Company) that is a nonqualified deferred compensation plan, within the meaning of Section 409A of the Code (a "409A Plan"), no event has occurred and no condition exists, that could subject anyone, including any Person, to any tax, fine, penalty or other liability under Section 409A of the Code ("409A Liability").   None of the transactions contemplated by this Agreement could, directly or indirectly, subject anyone or any Person to any 409A Liability.  Each 409A Plan is and has been operated and administered in good faith compliance with 409A of the Code, Treasury Notice 2005-1, the Final Treasury Reg. Sections 1.409A-1 through 1.409A-6, and any subsequent guidance issued thereunder.

Section 3.20     Interests in Customers, Suppliers, Etc.  Except as set forth on Schedule 3.20, neither the Principals nor to the knowledge of the Principals (without making any inquiry of any member of the Related Group, as hereinafter defined), any officer, director, or employee of IMS Holdco or the Company immediately prior to the Closing Date, any parent, brother, sister, child or spouse of any such officer, director, key executive or employee of the Company, IMS Holdco or the Principals (collectively, the "Related Group"), or any Person controlled by anyone in the Related Group:

(i)     owns, directly or indirectly, any interest in (excepting for ownership, directly or indirectly, of less than 1/4 of 1% of the issued and outstanding shares of any class of securities of a publicly held and traded company), or received or has any right to receive payments from, or is an officer, director, employee, agent or consultant of, any Person which is, or is engaged in business as, a competitor, lessor, lessee, supplier, distributor, sales agent, customer or client of IMS Holdco or the Company;

(ii)    owns, directly or indirectly (other than through the ownership of Membership Units), in whole or in part, any tangible or intangible property (including, but not limited to Intellectual Property), that the Company used in the conduct of the Business, other than immaterial personal items owned and used by employees at their work stations; or

(iii)   has any cause of action or other claim whatsoever against, or owes any amount to, IMS Holdco or the Company, except for claims in the ordinary course of business such as for accrued vacation pay, accrued benefits under employee benefit plans, and similar matters and agreements existing as of the Closing Date.

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Section 3.21     Bank Accounts and Powers of Attorney.  Set forth in Schedule 3.21 is an accurate and complete list showing (a) the name and address of, and account information for, each bank in which IMS Holdco had immediately prior to the transfer of the Business to the Company, or the Company has, an account, credit line or safe deposit box and the names of all Persons authorized to draw thereon or to have access thereto, and (b) the names of all Persons, if any, holding powers of attorney from IMS Holdco or the Company and a summary statement of the terms thereof.

Section 3.22     Compensation of Employees.

(a)           Schedule 3.22 is an accurate and complete list showing: (a) the names and positions of all employees and exclusive consultants of the Company, or IMS Holdco immediately prior to the transfer of the Business by IMS Holdco to the Company, who are, or were being, compensated at an annualized rate of $50,000 or more, together with a statement of the current annual salary, and the annual salary, bonus and incentive compensation paid or payable with respect to calendar years 2008 and 2009, and a statement of the projected annual salary, bonus and incentive compensation payable with respect to the calendar year ended December 31, 2010, and the material fringe benefits of such employees and exclusive consultants not generally available to all employees of IMS Holdco or the Company; (b) all bonus and incentive compensation paid or payable (whether by agreement, custom or understanding) to any employee of IMS Holdco or the Company not listed in clause (a) above for services rendered or to be rendered during calendar years 2008 and 2009; (c) the names of all retired employees, if any, of IMS Holdco or the Company who are receiving or entitled to receive any healthcare or life insurance benefits or any payments from IMS Holdco or the Company not covered by any pension plan to which IMS Holdco or the Company is a party, their ages and current unfunded pension rate, if any; and (d) a description of the current severance and vacation policy of IMS Holdco and the Company.  Neither IMS Holdco nor the Company has, because of past practices or previous commitments with respect to its employees, established any rights on the part of any of its employees to additional compensation with respect to any period after the Effective Date (other than wage increases in the ordinary course of business).  Each of IMS Holdco and the Company has properly classified and compensated all employees and consultants in accordance with all applicable Laws and Orders of any Governmental and Regulatory Authority.

(b)           Except as set forth on Schedule 3.3, the Principals have not agreed or made any written or verbal commitment to give any employee of IMS Holdco or the Company (or any family member or any affiliate of the employee of IMS Holdco or the Company) any portion or share of the Purchase Price in the form of a bonus, gift, award, or any similar type of remuneration.  The Principals agree that, from and after the Effective Date, no portion or proceeds of the Purchase Price shall be used to compensate or give to any employee of IMS Holdco or the Company (or any family member of any employee of IMS Holdco or the Company) a bonus, gift, award, or any similar type of remuneration.

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Section 3.23     No Changes Since the Balance Sheet Date.  From the Balance Sheet Date through the Closing Date, except as specifically stated on Schedule 3.23, neither IMS Holdco nor the Company (i) incurred any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except in the ordinary course of business, (ii) permitted any of its assets to be subjected to any Lien, (iii) sold, transferred or otherwise disposed of any assets except in the ordinary course of business, (iv) made any capital expenditure or commitment therefor which individually or in the aggregate exceeded $25,000; (v) made any distributions or dividend payments on any shares of its capital stock or equity participation rights, or redeemed, purchased or otherwise acquired any units of Membership Interest, or any option, warrant or other right to purchase or acquire any units of Membership Interest or equity participation rights of IMS Holdco or the Company, (vi) made any bonus or profit sharing distribution, (vii) increased or prepaid its indebtedness for borrowed money, except current borrowings under credit lines listed on Schedule 3.8, or made any loan to any Person other than to any employee for normal travel and expense advances, (viii) wrote down the value of any work-in-process, or wrote off as uncollectible any notes or accounts receivable, except write-downs and write-offs in the ordinary course of business, none of which individually or in the aggregate, were material to IMS Holdco or the Company, (ix) granted any increase in the rate of wages, salaries, bonuses or other remuneration of any employee who, whether as a result of such increase or prior thereto, received aggregate compensation from IMS Holdco or the Company at an annual rate of $100,000 or more, or except in the ordinary course of business to any other employees, (x) entered into any employment or exclusive consulting agreement which is not cancelable by IMS Holdco or the Company (and will not be cancelable by the Company) without penalty or other financial obligation within 30 days, (xi) canceled or waived any claims or rights of material value, (xii) made any change in any method of accounting procedures, (xiii) otherwise conducted IMS Holdco's business or the Business or entered into any transaction, except in the usual and ordinary manner and in the ordinary course of its business, (xiv) amended or terminated any agreement which is material to their businesses, (xv) renewed, extended or modified any lease of real property or any lease of personal property, except in the ordinary course of business, or (xvi) agreed, whether or not in writing, to do any of the actions set forth in any of the above clauses.

Section 3.24     Corporate Controls.  To the knowledge of the Principals, no officer, authorized agent, employee, consultant or any other Person while acting on behalf of IMS Holdco or the Company, has, directly or indirectly: used any corporate fund for unlawful contributions, gifts, or other unlawful expenses relating to political activity; made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false or fictitious entry on its books or records; participated in any racketeering activity; or made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment, or other payment of a similar or comparable nature, to any Person, private or public, regardless of form, whether in money, property, or services, to obtain favorable treatment in securing business or to obtain special concessions, or to pay for favorable treatment for business secured or for special concessions already obtained, and neither IMS Holdco nor the Company have participated in any illegal boycott or other similar illegal practices affecting any of its actual or potential customers.

Section 3.25     Brokers.  Except as set forth on Schedule 3.25, no broker, finder, agent or similar intermediary has acted on behalf of the Principals, IMS Holdco or the Company in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees, consulting fees or similar fees or commissions are payable by IMS Holdco, the Company or the Principals in connection therewith based on any agreement, arrangement or understanding with any of them.

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Section 3.26     Repayment of Loans.  All (i) intercompany indebtedness and (ii) indebtedness of the Principals to IMS Holdco or the Company has been repaid in full, other than routine travel expense advances in the ordinary course of business and consistent in amount with past practice.

Section 3.27     Copies of Documents.  The Principals have caused to be made available for inspection and copying by the Purchaser and its advisers, true, complete and correct copies of all documents referred to in this Article III or in any Schedule.  Summaries of all oral contracts contained on Schedule 3.8 are complete and accurate in all material respects.

ARTICLE IV

REPRESENTATIONS OF THE PURCHASER

The Purchaser represents, warrants and agrees to and with IMS Holdco and the Principals as follows:

Section 4.1       Existence and Good Standing.  The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with full corporate power and authority to own its property and to carry on its business all as and in the places where such properties are now owned or operated or such business is now being conducted.

Section 4.2       Execution and Validity of Agreement.  The Purchaser has the full corporate power and authority to make, execute, deliver and perform this Agreement and the transactions contemplated hereby.  The execution and delivery of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby have been duly authorized by all required corporate action on behalf of the Purchaser.  This Agreement has been duly and validly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by IMS Holdco and the Principals, constitutes the legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms.

Section 4.3       Litigation.  There is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Purchaser, any investigation by), any Governmental or Regulatory Authority pending or, to the knowledge of the Purchaser, threatened against the Purchaser or any of their respective properties or rights with respect to this Agreement.  The Purchaser is not subject to any Order entered in any lawsuit or proceeding with respect to this Agreement or the transactions contemplated hereby.

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Section 4.4       Non-Contravention; Approvals and Consents.  The execution, delivery and performance by the Purchaser of its obligations hereunder and the consummation of the transactions contemplated hereby will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation and bylaws of the Purchaser, (b) result in the violation by the Purchaser of any Laws or Orders of any Governmental or Regulatory Authority applicable to the Purchaser or any of its assets or properties, or (c) result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Purchaser to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or, except for such Liens as may be created in connection with an MDC Financing (as defined in Section 6.1 hereof), result in the creation or imposition of any Lien upon any of the respective assets or properties of the Purchaser, under any of the terms, conditions or provisions of any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound. No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound for the execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder or the consummation by the Purchaser of the transactions contemplated hereby

Section 4.5       Brokers.  No broker, finder, agent or similar intermediary has acted on behalf of the Purchaser in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees or similar fees or commissions are payable by the Purchaser in connection therewith based on any agreement, arrangement or understanding with either of them.

ARTICLE V

ACTIONS AT CLOSING

Simultaneously herewith:

Section 5.1       Certified Resolutions.  Each of IMS Holdco and the Company shall have delivered to the Purchaser a copy of the resolutions of its Members and Board of Managers, respectively, authorizing the execution, delivery and performance of this Agreement, the Operating Agreement and the Conveyance Document and the transactions contemplated hereby and thereby, as applicable, certified by one of its officers.

Section 5.2       Required Approvals and Consents.  The Company and the Principals shall have obtained or given, at no expense to the Purchaser or MDC Partners, and there shall not have been withdrawn or modified, any consents or approvals or other actions listed on Schedule 3.9 hereof (including without limitation, obtaining all such consents, approvals and/or waivers required under the Contracts listed on Schedule 3.8).  Each such consent or approval shall be in form reasonably satisfactory to counsel for the Purchaser.

Section 5.3       Operating Agreement.  The Company and IMS Holdco shall have entered into the Operating Agreement, together with the Purchaser.

Section 5.4       Employment Agreements. The Principals shall have entered into Employment Agreements with the Company substantially in the form and to the effect of Exhibit C hereto.

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Section 5.5       Non-Competition/Non-Solicitation/Non-Servicing Agreements.  The Principals and Dawn Du Mont shall have entered into Non-Competition/Non-Solicitation/Non-Servicing Agreements with the Purchaser and the Company in the form and to the effect of Exhibits D-1 and D-2 hereto.

Section 5.6       Conveyance Document.IMS Holdco and the Company shall have entered into the Conveyance Document.

Section 5.7      Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement, the Conveyance Document and all documents incident thereto must be reasonably satisfactory in form and substance to the Purchaser and its counsel, and the Purchaser shall have received copies of all such documents and other evidences as it or its counsel reasonably requested in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

ARTICLE VI

OTHER AGREEMENTS

Section 6.1       Management of the Company.

6.1.1        MDC Financing.  Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the Purchase Price under Section 2.1 hereof and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC Partners and/or one or more of its affiliates, in connection with its or any of its affiliates' current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon the Purchaser's Membership Units; (x) pledge or grant a security interest in or to otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under the Call and/or Sale Request (as such terms are defined in the Operating Agreement) to or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders from time to time (as applicable and collectively, the "Lender"); and (z) have the Company provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Units which have been pledged or assigned to it.

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6.1.2        Effect of Events During Period Membership Units Are Outstanding.  The parties hereto understand and agree that under the terms of the Employment Agreements referred to in Section 5.4, the Principals may be terminated for "cause" or "without cause" (as such terms are defined in such Employment Agreements).  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect IMS Holdco's right to receive the Purchase Price under this Agreement.  Each of the parties hereto agrees that if (a) a Principal ceases to be an employee of the Company during the period commencing as of Effective Date through the end of the last year included in the Measuring Period (as defined in the Operating Agreement) with respect to the exercise of a Call or Sale Request resulting in IMS Holdco no longer owing any Class B Units, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any of its subsidiaries, if any, no party to this Agreement or any Person claiming a right through such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary, if any (x) constitutes a breach by the Purchaser or any of its affiliates of this Agreement, (y) resulted in an adverse effect on the Purchase Price hereunder forming the basis for a claim against the Purchaser or any of its affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 2.1.3 hereof.

Section 6.2       Tax Matters.

6.2.1        Allocation.  The Principals, IMS Holdco and the Purchaser agree (i) to report for federal, state and local income tax purposes, the transactions contemplated by this Agreement in accordance with Situation 1 of Revenue Ruling 99-5, 1999-1 C.B. 434, and (ii) shall not take, or permit any of its Affiliates to take, a position inconsistent with such treatment unless otherwise required by Law.  The Purchaser shall prepare an allocation of the Purchase Price (and of other capitalized costs) among the assets of the Company.  The Company, the Purchaser, each member of the Company and the Principals shall report, act and file all Tax returns (including, but not limited to, Internal Revenue Service form 8594) in all respects and for all purposes consistent with such allocation prepared by the Purchaser and agreed to by IMS Holdco.  IMS Holdco and/or the Principals shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as the Purchaser may reasonably request to prepare such allocation.  None of the Company, any member of the Company, or the Principals shall take any position (whether in audits, tax returns, or otherwise) that is inconsistent with such allocation unless required to do so by applicable law.

6.2.2        Tax Returns.  The parties hereto acknowledge and agree that the Company shall prepare or cause to be prepared and file or cause to be filed all Tax returns for the Company except as otherwise specifically provided herein or in the Operating Agreement.  The Company shall permit the Purchaser to review and comment on each such Tax return described in the preceding sentence prior to filing.

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6.2.3        Tax Cooperation.  The Purchaser, IMS Holdco and the Principals shall cooperate fully, and each shall cause the Company to cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax returns pursuant to Section 6.2.2 or any other Tax returns relating to the operations of IMS Holdco or the Company, and any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include IMS Holdco's retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  The Purchaser, the Principals and IMS Holdco agree to, and each agree to cause the Company to, (A) retain all books and records with respect to Tax matters pertinent to IMS Holdco and Company relating to any taxable period beginning before the Effective Date until the expiration of the statute of limitations (and, to the extent notified by the Purchaser, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, IMS Holdco or the Purchaser, as the case may be, shall allow the other party to take possession of such books and records.

6.2.4        Tax Liability.  To the extent that any of the transactions contemplated by the Conveyance Document give rise to sales and/or use tax liability or other transfer, purchase, stamp or recordation documentary tax and fees (collectively, "Sales Taxes"), the Purchaser shall promptly pay such Sales Taxes to the appropriate tax authorities.  IMS Holdco shall cause the Company to deliver to the Purchaser completed returns in respect of any Sales Taxes required to be filed with respect to the transactions contemplated herein (regardless of whether such returns are informational or show liability for Sales Taxes) for filing with the appropriate taxing authority.  The Purchaser and IMS Holdco hereby waive compliance with the bulk sales laws of any applicable jurisdiction, and IMS Holdco and the Principals hereby agree to indemnify and hold harmless the Purchaser and its Affiliates from and against any claims arising out of or due to the failure to comply with such bulk sales laws.

Section 6.3       Equity Securities of IMS Holdco.

(a)           As long as IMS Holdco beneficially owns any equity interests in the Company, no Principal shall sell or in any other way transfer, assign, distribute, pledge, encumber or otherwise dispose of (a "Transfer") any IMS Holdco Interests (as defined below) without the prior written consent of the Purchaser, except with respect to a Transfer of IMS Holdco Interests pursuant to Section 10.2(c) of the Operating Agreement; provided, however, in the event a Principal desires to Transfer, for estate planning purposes, IMS Holdco Interests to a Family Member (as hereinafter defined) of such Principal, the prior written consent of the Purchaser shall not be unreasonably delayed or withheld.  As used herein, the term "Family Member" of any Principal shall mean (i) the spouse and lineal descendants of such Principal, (ii) the spouses of any such descendants, (ii) the legal representatives of any Person that falls within clause (i) or (ii) hereof, and (iii) the trustee of any trust of which any of the Persons falling with clause (i) or (ii) shall be the only beneficiaries entitled to the income or principal.

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(b)           From and after the Closing, IMS Holdco covenants and agrees that it shall not, directly or indirectly (i) authorize, create, issue, amend or modify any equity interests (whether common or preferred), subscriptions, options, warrants, rights (including "phantom equity rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind, providing for the purchase, issuance or sale of any membership interests, profits interests, capital interests or equity interests of any kind in IMS Holdco (the "IMS Holdco Interests"); or (ii) provide compensation to any employee of the Company or any subsidiary, if any, except to the extent such employee was entitled or eligible to receive such compensation at the time of, and as a result of, the Closing.  IMS Holdco further covenants and agrees that it shall not, directly or indirectly modify or amend IMS Holdco's Second Amended and Restated Operating Agreement (as amended through the Effective Date) dated February 2007, a copy of which is attached hereto as Exhibit E (the "IMS Holdco Operating Agreement").  Notwithstanding anything contained in this Section 6.3(b) to the contrary, the Principals shall be entitled to amend the IMS Holdco Operating Agreement and such amendment shall not be deemed to be in violation of this Section 6.3(b), so long as such amendment only results in a modification with respect to the IMS Holdco Interests owned by the Principals, and does not result in the issuance of any IMS Holdco Interests to any Person other than the Principals.

Section 6.4       Change of Name; Post-Closing Dissolutions.  At the Closing or a soon as practicable after the Closing Date, IMS Holdco shall execute appropriate documents to change its name to a name dissimilar to "Integrated MediaSolutions", and promptly thereafter shall file any necessary documents to reflect the name change with the New York Secretary of State and the appropriate authorities in the other states in which it is qualified to do business.  As soon as practicable after the Closing Date, IMS Holdco shall execute appropriate documents to dissolve each of the Retained Subsidiaries, and promptly thereafter shall file any necessary documents to reflect such dissolutions with the New York Secretary of State and the appropriate authorities in the other states in which the Retained Subsidiaries are qualified to do business.

ARTICLE VII

SURVIVAL; INDEMNITY

Section 7.1       Survival.   Notwithstanding any right of any party hereto fully to investigate the affairs of any other party, and notwithstanding any knowledge of facts determined or determinable pursuant to such investigation or right of investigation, each party hereto shall have the right to rely fully upon the representations, warranties, covenants and agreements of the other parties contained in this Agreement and the Schedules, if any, furnished by any other party pursuant to this Agreement, or in any certificate or document delivered at the Closing by any other party.  Subject to the limitations set forth in Section 7.6, the respective representations, warranties, covenants and agreements of IMS Holdco, the Principals and the Purchaser contained in this Agreement shall survive the Closing.

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Section 7.2       Obligation of IMS Holdco and the Principals to Indemnify.

7.2.1        General Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, IMS Holdco and the Principals hereby agree, jointly and severally, to indemnify the Purchaser and its affiliates, stockholders, officers, directors, employees, agents, representatives and successors, permitted assignees of the Purchaser and their affiliates (individually, a "Purchaser Indemnified Party" and collectively, the "Purchaser Indemnified Parties") against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to pay on behalf of or reimburse the Purchaser Indemnified Parties as and when incurred for, any and all liabilities (including liabilities for Taxes), obligations, losses, damages, penalties, demands, claims, actions, suits, judgments, settlements, penalties, interest, out-of-pocket costs, expenses and disbursements (including reasonable costs of investigation, and reasonable attorneys', accountants' and expert witnesses' fees) of whatever kind and nature (collectively, "Losses"), that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation contained in Article III.B hereof or in any certificate delivered by IMS Holdco or the Principals at the Closing or otherwise in connection herewith; (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of IMS Holdco and the Principals contained in Article III.B hereof or in any certificate delivered by IMS Holdco and the Principals at the Closing or otherwise in connection herewith; (c) any breach or failure by IMS Holdco or any Principal to comply with, perform or discharge any obligation, agreement or covenant by IMS Holdco and the Principals contained in this Agreement; (d) any liability or obligation or any assertion against any Purchaser Indemnified Party, arising out of or relating, directly or indirectly, to any Excluded Asset or any Retained Liability (as such terms are defined in the Conveyance Document) or other liability arising, in whole or in part, out of the conduct of the business of IMS Holdco, the Company or any of its subsidiaries, if any, prior to the Closing except for the Assumed Liabilities (as such term is defined in the Conveyance Document); (e) any litigation or claim disclosed on Schedule 3.10 to this Agreement; (f) any liability or obligation arising out of or relating, directly or indirectly, to the classification of any individual performing services for IMS Holdco (i) as an independent contractor, (ii) as a freelancer, (iii) as a consultant or (iv) in any other capacity other than as an employee; (g) any liability or obligation arising out of or relating, directly or indirectly, to any violation by IMS Holdco, on or prior to the Closing, of the Fair Labor Standards Act or any similar state or local wage and hour Law, Order, ordinance or regulation; and (h) any liability or obligation in connection with that certain Consulting Agreement by and among the Principals, Dawn Du Mont and IMS Holdco dated March 23, 2009.

7.2.2        Special Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, each of the Principals hereby severally agrees to indemnify the Purchaser Indemnified Parties against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to assume liability for, the payment of all Losses that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of or in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of a representation or warranty by such Principal contained in Article III.A hereof; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting the Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of such Principal contained in Article III.A hereof or in any certificate delivered by such Principal at the Closing or otherwise in connection herewith.  Any claim for indemnity made under this Section 7.2.2 shall not be construed as a claim under Section 7.2.1 hereof even if the Purchaser Indemnified Party could have made a claim under Section 7.2.1 hereof in respect of the same matters.

7.2.3        "Losses".  The term "Losses" as used in this Article VII is not limited to matters asserted by third parties against any Purchaser Indemnified Party but includes Losses incurred or sustained by a Purchaser Indemnified Party in the absence of Third Party Claims (as defined in Section 7.4.2 hereof).

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Section 7.3       Obligation of the Purchaser to Indemnify.   Subject to the limitations set forth in Section 7.6.3 hereof, the Purchaser hereby agrees to indemnify IMS Holdco and the Principals (individually an "IMS Holdco Indemnified Party" and collectively, the "IMS Holdco Indemnified Parties")against, and to protect, save and keep harmless the IMS Holdco Indemnified Parties from, and to pay on behalf of or reimburse the IMS Holdco Indemnified Parties as and when incurred for, any and all Losses that may be imposed on or incurred by the IMS Holdco Indemnified Parties as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any IMS Holdco Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (c) any breach or failure by the Purchaser to comply with, perform or discharge any obligation, agreement or covenant by the Purchaser contained in this Agreement.

Section 7.4       Indemnification Procedures.

7.4.1        Non-Third Party Claims.

(a)           In the event that any Person entitled to indemnification under this Agreement (an "Indemnified Party") asserts a claim for indemnification which does not involve a Third Party Claim (as defined in Section 7.4.2) (a "Non-Third Party Claim"), against which a Person is required to provide indemnification under this Agreement (an "Indemnifying Party"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Non-Third Party Claim Notice"), which Non-Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party.

(b)           The Indemnifying Party may acknowledge and agree by written notice (the "Non-Third Party Acknowledgement of Liability") to the Indemnified Party to satisfy the Non-Third Party Claim within 30 days of receipt of the Non-Third Party Claim Notice.  In the event that the Indemnifying Party disputes the Non-Third Party Claim, the Indemnifying Party shall provide written notice of such dispute (the "Non-Third Party Dispute Notice") to the Indemnified Party within 30 days of receipt of the Non-Third Party Claim Notice (the "Non-Third Party Dispute Period"), setting forth a reasonable basis of such dispute.  In the event that the Indemnifying Party shall fail to deliver the Non-Third Party Acknowledgement of Liability or Non-Third Party Dispute Notice within the Non-Third Party Dispute Period, the Indemnifying Party shall be deemed to have acknowledged and agreed to pay the Non-Third Party Claim in full and to have waived any right to dispute the Non-Third Party Claim.  Once the Indemnifying Party has acknowledged and agreed to pay any Non-Third Party Claim pursuant to this Section 7.4.1, or once any dispute under this Section 7.4.1 has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction, subject to the provisions of Section 7.6.1, the Indemnifying Party shall pay the amount of such Non-Third Party Claim to the Indemnified Party within 10 days of the date of acknowledgement or resolution, as the case may be, to such account and in such manner as is designated in writing by the Indemnified Party.

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7.4.2        Third-Party Claims.

(a)           In the event that any Indemnified Party asserts a claim for indemnification or receives notice of the assertion of any claim or of the commencement of any action or proceeding by any Person who is not a party to this Agreement or an affiliate of a party to this Agreement in respect of which such Indemnified Party is entitled to indemnification by an Indemnifying Party under this Agreement (a "Third Party Claim"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Third Party Claims Notice") within 20 days after asserting or learning of such Third Party Claim (or within such shorter time as may be necessary to give the Indemnifying Party a reasonable opportunity to respond to such claim), together with a statement specifying the basis of such Third Party Claim.  The Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party. The Indemnifying Party must provide written notice to the Indemnified Party that it is either (i) assuming responsibility for the Third Party Claim or (ii) disputing the claim for indemnification against it (the "Indemnification Notice").  The Indemnification Notice must be provided by the Indemnifying Party to the Indemnified Party within 15 days after receipt of the Third Party Claims Notice or within such shorter time as may be necessary to give the Indemnified Party a reasonable opportunity to respond to such Third Party Claim (the "Indemnification Notice Period").

(b)           If the Indemnifying Party provides an Indemnification Notice to the Indemnified Party within the Indemnification Notice Period that it assumes responsibility for the Third Party Claim (the "Defense Notice"), the Indemnifying Party shall conduct at its expense the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party.  The Defense Notice shall specify the counsel the Indemnifying Party will appoint to defend such claim ("Defense Counsel"); provided, however, that the Indemnified Party shall have the right to approve the Defense Counsel, which approval shall not be unreasonably withheld or delayed.  In the event that the Indemnifying Party fails to give the Indemnification Notice within the Indemnification Notice Period, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim without the prior consent of the Indemnifying Party and subject to the provisions of Section 7.6.1, the Indemnifying Party will be liable for all costs, expenses, settlement amounts or other Losses paid or incurred in connection therewith.

(c)           In the event that the Indemnifying Party provides in the Indemnification Notice that it disputes the claim for indemnification against it, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim, without the prior consent of the Indemnifying Party. Once such dispute has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction or by mutual agreement of the Indemnified Party and Indemnifying Party, subject to the provisions of Section 7.6.1, the Indemnifying Party shall within 10 days of the date of such resolution or agreement, pay to the Indemnified Party all Losses paid or incurred by the Indemnified Party in connection therewith.

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(d)           In the event that the Indemnifying Party delivers an Indemnification Notice pursuant to which it elects to conduct the defense of the Third Party Claim, the Indemnifying Party shall be entitled to have the exclusive control over the defense of the Third Party Claim and the Indemnified Party will cooperate in good faith with and make available to the Indemnifying Party such assistance and materials as it may reasonably request, all at the expense of the Indemnifying Party.  The Indemnified Party shall have the right at its expense to participate in the defense assisted by counsel of its own choosing.  The Indemnifying Party will not settle the Third Party Claim or cease to defend against any Third Party Claim as to which it has delivered an Indemnification Notice (as to which it has assumed responsibility for the Third Party Claim), without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed; provided, however, such consent may be withheld if, among other reasons, as a result of such settlement or cessation of defense, (i) injunctive relief or specific performance would be imposed against the Indemnified Party, or (ii) such settlement or cessation would lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder.

(e)           If an Indemnified Party refuses to consent to a bona fide offer of settlement which the Indemnifying Party wishes to accept, which provides for a full release of the Indemnified Party and its affiliates relating to the Third Party Claims underlying the offer of settlement and solely for a monetary payment, the Indemnified Party may continue to pursue such matter, free of any participation by the Indemnifying Party, at the sole expense of the Indemnified Party. In such an event, the obligation of the Indemnifying Party shall be limited to the amount of the offer of settlement which the Indemnified Party refused to accept plus the reasonable costs and expenses of the Indemnified Party incurred prior to the date the Indemnifying Party notified the Indemnified Party of the offer of settlement.

(f)           Notwithstanding clause (d) above, the Indemnifying Party shall not be entitled to control, but may participate in, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of (x) that part of any Third Party Claim that (i) seeks a temporary restraining order, a preliminary or permanent injunction or specific performance against the Indemnified Party, (ii) involves criminal allegations against the Indemnified Party or (iii) may lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder and (y) the entire Third Party Claim if such Third Party Claim would impose liability on the part of the Indemnified Party in an amount which is greater than the amount as to which the Indemnified Party is entitled to indemnification under this Agreement.

(g)           A failure by an Indemnified Party to give timely, complete or accurate notice as provided in this Section 7.4 will not affect the rights or obligations of any party hereunder except and only to the extent that, as a result of such failure, any party entitled to receive such notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise directly and materially damaged as a result of such failure to give timely notice.

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Section 7.5       Right of Offset.   Without limiting any other rights or remedies available to it, the Purchaser shall be entitled, subject to the limitations in Section 7.6, to offset any claim for indemnity made pursuant to Section 7.2 and in accordance with Section 7.4, against any payment of the Purchase Price due under Section 2.1; provided, however, the Purchaser may only exercise such right of offset in respect of claims relating to Losses actually incurred by a Purchaser Indemnified Party (in which case the amount of such offset shall be the amount of such actual Loss) or claims actually asserted by a third party (in which case the amount of the offset shall not exceed the Purchaser's good faith estimate of the amount of indemnifiable Losses that will ultimately be payable to a Purchaser Indemnified Party in respect of such claims).  If any such claims for indemnity are resolved in favor of IMS Holdco and the Principals by mutual agreement or otherwise, or if the amount withheld exceeds the amount ultimately payable to a Purchaser Indemnified Party in respect of such claim, the Purchaser shall pay to IMS Holdco the excess amount withheld with respect to such claim, together with interest thereon for the period such amount has been withheld at a rate equal to the published prime rate of interest of J.P. Morgan Chase in New York, in effect from time to time during the relevant period.

Section 7.6       Limitations On and Other Matters Regarding Indemnification.

7.6.1        Indemnity Cushion and Cap.  Subject to Section 7.6.5, neither IMS Holdco nor the Principals shall have any liability to any Purchaser Indemnified Party with respect to Losses arising out of any of the matters referred to in Section 7.2 until such time as the amount of such liability shall exceed $50,000 in the aggregate (in which case IMS Holdco and the Principals shall be liable for all Losses in excess of $50,000.  Notwithstanding anything to the contrary herein, subject to Section 7.6.5 below, the maximum aggregate liability of IMS Holdco and the Principals for indemnity payments under Section 7.2.1 and Section 7.2.2 shall be an amount equal to $30,000,000.

7.6.2        Termination of Indemnification Obligations of IMS Holdco and the Principals.  Subject to Section 7.6.5, the obligation of IMS Holdco and the Principals to indemnify under Section 7.2 hereof shall terminate on June 30, 2012, except as to matters as to which the Purchaser Indemnified Party has made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.3        Termination of Indemnification Obligations of the Purchaser.  The obligation of the Purchaser to indemnify under Section 7.3 hereof shall terminate on June 30, 2012, except as to matters as to which IMS Holdco or the Principals have made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto for such party shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.4        Treatment.  Any indemnity payments by an Indemnifying Party to an Indemnified Party under this Article VIII shall be treated by the parties as an adjustment to the Purchase Price.

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7.6.5        Exceptions.  Each of the limitations set forth above in this Section 7.6 shall in no event (a) apply to any Losses incurred by a Purchaser Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by IMS Holdco or the Principals; (ii) any breach of a representation or warranty contained in Sections 3.1, 3.2, 3.3, 3.6, 3.11, 3.19, 3.25 or any other provision hereof relating to Taxes, (iii) any indemnification obligation under Sections 7.2.1(c), 7.2.1(d), 7.2.1(e), 7.2.1(f), 7.2.1(g) or 7.2.1(h); and (iv) the obligations of IMS Holdco and the Principals set forth in Section 8.1 to pay certain expenses; or (b) apply to any Losses incurred by an IMS Holdco Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by the Purchaser; (ii) any indemnification obligation under Section 7.3(c); and (iii) the Purchaser's obligations set forth in Section 8.1 to pay certain expenses.

7.6.6        Control by MDC Partners.  All decisions and determinations to be made by the Purchaser and/or a Purchaser Indemnified Party under this Article VII shall be made by MDC Partners in the name of and on behalf of the Purchaser and/or such other Purchaser Indemnified Party.

7.6.7        Tax and Insurance Effects.  An indemnity payment due and payable by an Indemnifying Party under this Article VII shall be decreased to the extent of any   net  reduction in Taxes payable by the Indemnified Party resulting from the Losses,  taking into account the tax consequences to the Indemnified Party of the receipt of any indemnity payment due and payable by the Indemnifying Party under this Article VII.  In both cases the tax consequences shall be  determined  by using an assumed marginal tax rate equal to the highest marginal tax rate then in effect for corporate or individual taxpayers, as applicable, in the relevant jurisdiction.  In addition, any amounts otherwise required to be paid by an Indemnifying Party under this Article VII shall be net of any insurance proceeds received by the Indemnified Party.

ARTICLE VIII

MISCELLANEOUS

Section 8.1       Expenses.   Except as otherwise provided in this Agreement, the Purchaser, on the one hand, and the Principals and IMS Holdco, on the other hand, shall pay its, her or his own expenses relating to the transactions contemplated by this Agreement, including, without limitation, the fees and expenses of their respective counsel, financial advisors and accountants.

Section 8.2       Governing Law; Service of Process and Consent to Jurisdiction. The interpretation and construction of this Agreement, and all matters relating hereto (including, without limitation, the validity or enforcement of this Agreement), shall be governed by the laws of the State of New York without regard to any conflicts or choice of laws provisions of the State of New York that would result in the application of the law of any other jurisdiction.  Each of the parties hereto agrees that delivery of process, summons, notice or document in accordance with Section 8.2 shall be effective service of process for any action, suit or proceeding arising out of this Agreement.  Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any court of the State of New York located in New York County in any action, suit or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby, and agrees that any such action, suit or proceeding shall be brought only in such court.  Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such action, suit or proceeding brought in such a court and any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

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Section 8.3       "Person" Defined.   "Person" shall mean and include an individual, a company, a joint venture, a corporation (including any non-profit corporation), an estate, an association, a trust, a general or limited partnership, a limited liability company, a limited liability partnership, an unincorporated organization and a government or other department or agency thereof.

Section 8.4       "Knowledge" Defined.   Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Principals, such term shall be limited to the actual knowledge of any executive officer of IMS Holdco or any Principal, and unless otherwise stated, such knowledge that would have been discovered by any of them after reasonable inquiry.  Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Purchaser, as the case may be, such term shall be limited to the actual knowledge of the executive officers of such entity and unless otherwise stated, such knowledge that would have been discovered by such executive officers after reasonable inquiry.

Section 8.5       "Affiliate" Defined.   As used in this Agreement, an "affiliate" of any Person, shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

Section 8.6       Captions.   The Article and Section captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement.

Section 8.7       Publicity.   Subject to the provisions of the next sentence, no party to this Agreement shall, and the Principals shall use their reasonable efforts to ensure that no representative of IMS Holdco or the Company shall, issue any press release or other public document or make any public statement relating to this Agreement or the matters contained herein without obtaining the prior approval of the Purchaser and the Representative.  Notwithstanding the foregoing, the foregoing provision shall not apply to the extent that MDC Partners is required to make any announcement relating to or arising out of this Agreement by virtue of the securities laws of the United States or Canada or the rules and regulations promulgated thereunder or other rules of the NASDAQ Stock Market, Toronto Stock Exchange or the United States Securities and Exchange Commission or any announcement by any party or the Company pursuant to applicable law or regulations.

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Section 8.8       Notices.   Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to any other party shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next business day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to the Purchaser, addressed to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

c/o MDC Partners Inc.

950 Third Avenue

New York, New York 10022

Attention:  General Counsel

and (which shall not constitute notice)

Davis & Gilbert LLP

1740 Broadway

New York, New York 10019

Attention:  Brad J. Schwartzberg, Esq.

If to IMS Holdco or the Principals, to:

c/o BDR Company, LLC

650 Fifth Avenue

New York, New York 10017

Attention: Robert Ingram

with a copy to (which shall not constitute notice):

Moses & Singer LLP

405 Lexington Avenue

New York, New York 10174

Attention: Solomon P. Friedman, Esq.

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

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Section 8.9       Parties in Interest.   This Agreement may not be transferred, assigned, pledged or hypothecated by any party hereto, other than by operation of law.  Any purported such transfer, assignment, pledge, or hypothecation (other than by operation of law) shall be void and ineffective.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

Section 8.10     Severability.   In the event any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless be binding upon the parties with the same effect as though the void or unenforceable part had been severed and deleted.

Section 8.11     Counterparts.   This Agreement may be executed in two or more counterparts or by facsimile transmission, all of which taken together shall constitute one instrument.

Section 8.12     Entire Agreement.   This Agreement, together with the Schedules and Exhibits hereto, constitutes the sole, exclusive and only agreements of the parties hereto pertaining to the subject matter hereof, contains all of the covenants, conditions and agreements between the parties, express or implied, whether by statute or otherwise, and sets forth the respective rights, duties and obligations of each party to the other party as of the Closing Date. No oral understandings, oral statements, oral promises or oral inducements exist.

Section 8.13     Amendments.   This Agreement may not be amended, supplemented or modified orally, but only by an agreement in writing signed by each of the parties hereto.

Section 8.14     Third Party Beneficiaries.   Each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto and their respective successors and assigns as permitted under Section 8.9, except the Purchaser Indemnified Parties as provided in Article VII hereof.

Section 8.15     Use of Terms.   Whenever the context so requires or permits, all references to the masculine herein shall include the feminine and neuter, all references to the neuter herein shall include the masculine and feminine, all references to the plural shall include the singular and all references to the singular shall include the plural.  Whenever used in this Agreement, the terms "Dollars" and "$" shall mean United Stated Dollars.

Section 8.16     "Liens" Defined.   With respect to any asset, a "Lien" shall mean (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (other than an operating lease) (or any financial lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

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Section 8.17     No Strict Construction; Representation by Counsel.  The language used in this Agreement will be deemed to be the language chosen by the parties hereto 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.  The provisions of this Agreement shall be construed according to their fair meaning and neither for nor against any party hereto irrespective of which party caused such provisions to be drafted.  Each of the parties acknowledges that it has been represented by an attorney in connection with the preparation and execution of this Agreement.

Section 8.18     Representative.  Each of the Principals and IMS Holdco hereby appoints Ingram as his, her or its exclusive agent and attorney-in-fact (the "Representative") (i) to give and receive notices and communications with respect to the provisions of this Agreement, (ii) to amend the terms of this Agreement, (iii) to agree to, negotiate, enter into settlements or compromises of matters arising under the provisions of this Agreement, and (iv) to take any and all actions necessary or appropriate in the judgment of the Representative to be taken on behalf of the Principals and IMS Holdco under such provisions of this Agreement.  Such agency and that of any successor representative is irrevocable and coupled with an interest; provided, however, the Representative shall have no authority to act on behalf of any Principal or IMS Holdco with respect to an indemnity claim under Section 7.2.2.  In the event the Representative refuses to, or is no longer capable of, serving as the Representative hereunder, the other Principals shall promptly appoint a successor Representative who shall thereafter be the successor Representative hereunder and the Representative shall serve until such successor is duly appointed and qualified to act hereunder.  The Principals and IMS Holdco hereby agree that the Representative shall not have any liability to the Company or any of its subsidiaries, if any, for any action he takes or omits to take hereunder (or under any agreement or instrument referred to herein) in his capacity as Representative, unless such action or omission constitutes bad faith or willful misconduct by the Representative.  Notices or communications to or from the Representative shall constitute notice to or from the Principals and/or IMS Holdco in respect of matters relating to this Agreement.  Any decision, act, consent or instruction of the Representative shall constitute a decision of all of the Principals and IMS Holdco, and shall be final, binding and conclusive upon each Principal and IMS Holdco, and the Purchaser may rely upon any decision, act, consent or instruction of the Representative as being the decision, act, consent or instruction of IMS Holdco and each and every Principal.

Section 8.19     Guaranty.  MDC Partners hereby agrees to pay, or cause the Purchaser to pay, when due, each payment of Purchase Price required pursuant to Article II above and any indemnification obligations of the Purchaser pursuant to Article VII above.

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IN WITNESS WHEREOF, the parties hereto have executed this Membership Unit Purchase Agreement, on the day and year first above written.

MF + P ACQUISITION CO.
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary
INTEGRATED MEDIA SOLUTIONS, LLC
By:	/s/ Robert Ingram
	Name: Robert Ingram
	Title: Chief Executive Officer
/s/
Robert Ingram
/s/
Desiree Du Mont
/s/
Ron Corvino
MDC PARTNERS INC. (solely with respect to Sections 7.6.6 and 8.19)
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: General Counsel and Corporate Secretary

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TABLE OF CONTENTS

ARTICLE I
SALE OF THE PURCHASED UNITS
Section 1.1  Sale of the Purchased Units	1
ARTICLE II
PURCHASE PRICE AND CLOSING
Section 2.1  Purchase Price; Working Capital Adjustment	2
2.1.1  Purchase Price	2
2.1.2  Definitions	6
2.1.2  Other Definitions	6
2.1.3  Accounting Procedures	7
2.1.4  Examination of Books and Records	8
Section 2.2  Closing	8
Section 2.3  Third Party Consents	9
Section 2.4  Further Assurance; Post Closing Cooperation	9
ARTICLE III
REPRESENTATIONS OF IMS HOLDCO AND THE PRINCIPALS
Section 3.1  Execution and Validity of Agreements; Restrictive Documents	9
3.1.1  Execution and Validity	9
3.1.2  No Restrictions	10
3.1.3  Non-Contravention	10
3.1.4  Approvals and Consents	10
Section 3.2  Existence and Good Standing	10
Section 3.3  Capital Stock; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments	11
Section 3.4  Financial Statements and No Material Changes	11
Section 3.5  Books and Records	12
Section 3.6  Title to Properties; Encumbrances; No Prior Activities	12
3.6.1  Title to Properties; Encumbrances	12
3.6.2  No Prior Activities	12
Section 3.7  Real Property	13
3.7.1  Owned Real Property	13
3.7.2  Leased Real Property	13
Section 3.8  Contracts	14
Section 3.9  Non-Contravention; Approvals and Consents	15
Section 3.10  Litigation	15
Section 3.11  Taxes	16
Section 3.12  Liabilities	17

45

Section 3.13  Insurance	17
Section 3.14  Intellectual Properties	18
3.14.1  Definitions	18
3.14.2  Representations	19
3.14.3  Privacy and Security	20
Section 3.15  Compliance with Laws	20
Section 3.16  Client Relations	21
Section 3.17  Accounts Receivable; Work-in-Process; Accounts Payable	21
Section 3.18  Employment Relations	21
Section 3.19  Employee Benefit Matters	22
3.19.1  List of Plans	22
3.19.2  Severance	22
3.19.3  Multi-Employer Plans	23
3.19.4  Welfare Benefit Plans	23
3.19.5  Administrative Compliance	23
3.19.6  Tax-Qualification	24
3.19.7  Funding; Excise Taxes	24
3.19.8  Tax Deductions	25
3.19.9  409A	25
Section 3.20  Interests in Customers, Suppliers, Etc.	25
Section 3.21  Bank Accounts and Powers of Attorney	26
Section 3.22  Compensation of Employoees	26
Section 3.23  No Changes Since the Balance Sheet Date	27
Section 3.24  Corporate Controls	27
Section 3.25  Brokers	27
Section 3.26  Repayment of Loans	28
Section 3.27  Copies of Documents	28
ARTICLE IV
REPRESENTATIONS OF THE PURCHASER
Section 4.1  Existence and Good Standing	28
Section 4.2  Execution and Validity of Agreement	28
Section 4.3  Litigation	28
Section 4.4  Non Contravention; Approvals and Consents	29
Section 4.5  Brokers	29
ARTICLE V
ACTIONS AT CLOSING
Section 5.1  Certified Resolutions	29
Section 5.2  Required Approvals and Consents	29
Section 5.3  Operating Agreement	29
Section 5.4  Employment Agreements	29
Section 5.5  Non-Competition/Non-Solicitation/Non-Servicing Agreements	30
Section 5.6  Conveyance Document	30

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Section 5.7  Proceedings	30
ARTICLE VI
OTHER AGREEMENTS
Section 6.1  Management of the Company	30
6.1.1  MDC Financing	30
6.1.2  Effect of Events During Period Membership Units Are Outstanding	31
Section 6.2  Tax Matters	31
6.2.1  Allocation	31
6.2.2  Tax Returns	31
6.2.3  Tax Cooperation	32
6.2.4  Tax Liability	32
Section 6.3  Equity Securities of IMS Holdco	32
Section 6.4  Change of Name	33
ARTICLE VII
SURVIVAL; INDEMNITY
Section 7.1  Survival	33
Section 7.2  Obligation of IMS Holdco and the Principals to Indemnify	34
7.2.1  General Indemnity	34
7.2.2  Special Indemnity	34
7.2.3  Losses	34
Section 7.3  Obligation of the Purchaser to Indemnify	35
Section 7.4  Indemnification Procedures	35
7.4.1  Non-Third Party Claims	35
7.4.2  Third-Party Claims	36
Section 7.5  Right of Offset	38
Section 7.6  Limitations On and Other Matters Regarding Indemnification	38
7.6.1  Indemnity Cushion and Cap	38
7.6.2  Termination of Indemnification Obligations of IMS Holdco and the Principals	38
7.6.3  Termination of Indemnification Obligations of the Purchaser	38
7.6.4  Treatment	38
7.6.5  Exceptions	39
7.6.6  Control by MDC Partners	39
7.6.7  Tax and Insurance Effects	39
ARTICLE VIII
MISCELLANEOUS
Section 8.1  Expenses	39
Section 8.2  Governing Law; Service of Process and Consent to Jurisdiction	39
Section 8.3  "Person" Defined	40
Section 8.4  "Knowledge" Defined	40
Section 8.5  "Affiliate" Defined	40

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Section 8.6  Captions	40
Section 8.7  Publicity	40
Section 8.8  Notices	41
Section 8.9  Parties in Interest	42
Section 8.10  Severability	42
Section 8.11  Counterparts	42
Section 8.12  Entire Agreement	42
Section 8.13  Amendments	42
Section 8.14  Third Party Beneficiaries	42
Section 8.15  Use of Terms	42
Section 8.16  "Liens" Defined	42
Section 8.17  No Strict Construction; Representation by Counsel	43
Section 8.18  Representative	43
Section 8.19  Guaranty	43

48

INDEX OF DEFINED TERMS

2010 Growth Payment	5
409A Liability	26
409A Plan	26
Accountants	7
Additional Payments	6
Adjusted GAAP PBT	6
affiliate	42
Agreement	1
Applicable Percentage	6
Balance Sheet	12
Balance Sheet Date	12
Business	11
Closing	8
Closing Balance Sheet	7
Closing Date	9
Closing Date Working Capital	7
Code	6
Company	1
Company Indemnified Parties	36
Company Indemnified Party	36
Contracts	10
Conveyance Document	1
Data	20
Defense Counsel	38
Defense Notice	38
Desiree	1
Environmental Laws and Orders	21
ERISA	23
ERISA Affiliate	23
Extra Payment	5
Family Member	34
FAP	3
FIAP	5
FOAP	4

GAAP	7
Governmental or Regulatory Authority	10
IMS	1
IMS Interests	33
Indemnification Notice	38
Indemnification Notice Period	38
Indemnified Party	37
Indemnifying Party	37
Independent Auditors	7
Ingram	1
Initial Top-Up Amount	3
Intellectual Property	18
Intellectual Property of the Company	19
JAMS	8
Laws	10
Lender	32
Liabilities	17
Licensed Intellectual Property	19
Lien	44
Losses	35
LTG Rate Increase	3
Material Adverse Effect	21
MDC Financing	32
MDC Partners	1
Membership Units	1
Non PII	20
Non-Third Party Acknowledgement of Liability	37
Non-Third Party Claim	37
Non-Third Party Claim Notice	37
Non-Third Party Dispute Notice	37
Non-Third Party Dispute Period	37
Off-the-Shelf Software	19
Operating Agreement	1
Operative Documents	44
Orders	10
PBGC	25
Person	42
PII	20
Plan	23

Plans	23
Principal	1
Principals	1
Privacy Policy	20
Purchase Price	2
Purchased Units	1
Purchaser	1
Purchaser Indemnified Parties	35
Purchaser Indemnified Party	35
Real Property Lease	13
Real Property Leases	13
Reconciliation Period	7
Registered IP	19
Related Group	26
Representative	45
Required Permits	21
Retained Subsidiaries	13
Ron	1
Sale Event	6
Sales Taxes	33
SAP	3
Special Determination	7
TAP	4
Target Working Capital	7
Taxes	16
Third Party Claim	37
Third Party Claims Notice	37
Title IV Plan	25
Top-Up Payments	2
Transfer	33
Unregistered IP	19
Working Capital Payment	2
Working Capital Shortfall	2

EXHIBITS

Exhibit A	Conveyance Document
Exhibit B	Operating Agreement
Exhibit C	Employment Agreements
Exhibit D-1	Principals Non-Competition/Non-Solicitation/Non-Servicing Agreements
Exhibit D-2	Dawn Du Mont Non-Competition/Non-Solicitation/Non-Servicing Agreements
Exhibit E	IMS Holdco's Second Agreement and Restated Operating Agreement

SCHEDULES

Schedule 2.1.1	Payment of the Purchase Price
Schedule 3.2	Good Standing
Schedule 3.3	No Options or Restrictions
Schedule 3.4(A)	Financial Statements
Schedule 3.4(B)	GAAP Exceptions
Schedule 3.6	Liens
Schedule 3.7.2	Real Property Leases
Schedule 3.8	Contracts
Schedule 3.9	Approvals and Consents
Schedule 3.10	Litigation
Schedule 3.11	Taxes
Schedule 3.12	Liabilities
Schedule 3.13	Insurance
Schedule 3.14.2	Intellectual Property
Schedule 3.16	Client Relations
Schedule 3.19.2	Severance
Schedule 3.20	Interests in Customers, Suppliers, Etc.
Schedule 3.21	Bank Accounts and Powers of Attorney
Schedule 3.22	Compensation of Employees
Schedule 3.23	No Changes Since the Balance Sheet Date
Schedule 3.25	Brokers

EX-10.3.2 7 v183284_ex10-3x2.htm

Exhibit 10.3.2

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

INTEGRATED MEDIA SOLUTIONS PARTNERS LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") dated May 6, 2010 and effective as of April 30, 2010, is made and entered into by and among INTEGRATED MEDIA SOLUTIONS PARTNERS LLC, a Delaware limited liability company (the "Company"), MF + P ACQUISITION CO., a Delaware corporation ("MDC Holdco"), and INTEGRATED MEDIA SOLUTIONS, LLC, a New York limited liability company ("IMS Holdco", together with MDC Holdco, are collectively referred to as the "Members" and individually a "Member").   Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article XIII.

WHEREAS, IMS Holdco formed the Company as its sole member, owning 100% of the Membership Interests (as defined in Section 13.1 hereof) in the Company, and entered into a Limited Liability Company Agreement of the Company (the "Original Operating Agreement");

WHEREAS, pursuant to a General Assignment, Bill of Sale and Assumption Agreement (the "Conveyance Document"), effective as of April 30, 2010 (the "Effective Date"), a copy of which has been delivered to MDC Holdco, IMS Holdco transferred to the Company substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business (the "Business"), in exchange for 100% of the Membership Interests;

WHEREAS, pursuant to the Membership Unit Purchase Agreement effective as of the Effective Date (the "Purchase Agreement"), IMS Holdco sold, transferred, conveyed and delivered to MDC Holdco 750 Class A Units, representing 100% of the issued and outstanding Class A Units (the "Purchase Transaction"), such that immediately after giving effect to such transfer, the issued and outstanding Units of the Company were as follows: MDC Holdco – 750 Class A Units; IMS Holdco – 250 Class B Units; and

WHEREAS, the Members now desire to enter into this Agreement to supersede the Original Operating Agreement, to provide for the admission of MDC Holdco as a member, and to promote their interests and those of the Company by making provisions in this Agreement to govern their relations as Members;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members and the other parties hereto do hereby agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

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

Section 1.3           Offices; Registered Agent.  The principal place of business of the Company shall be 650 Fifth Avenue, New York, New York, 10017, or such other principal place of business as the Managers (as defined in Section 11.5) may from time to time determine.  The Company may have, in addition to such office, such other offices and places of business at such locations, both within and without the State of Delaware, as the Managers may from time to time determine or the business and affairs of the Company may require.  The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person (as defined in Section 13.1) as the Managers may designate from time to time in the manner provided by law.

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

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

ARTICLE II

MEMBERS; MEMBERSHIP INTERESTS; UNITS

Section 2.1           Members and Membership Units.  The Company is authorized to issue 750 Class A Units and 250 Class B Units, all of which have been issued and are outstanding, and allocated among the Members as set forth on Schedule 2.1.  Upon any change in the Members or Units, including by reason of the issuance of additional Units, the Members agree to complete a revised Schedule 2.1 hereof, which shall be deemed incorporated into this Agreement as part of this Section 2.1.

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Section 2.2           Classes of Units.

(a)           Class A Units.  The Class A Units shall have the following characteristics: (i) an initial Unit Capital Account (as defined in Section 7.2(e) hereof), (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

(b)           Class B Units. The Class B Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

Section 2.3           Transfer of Units.  In the event a Member sells all or a portion of its Membership Interests in accordance with Article X hereof, then effective as of the date of the sale and subject to compliance with Section 10.1 hereof, such Member shall automatically cease to be a Member in the Company as to such sold Unit.  Upon the acquisition by MDC Holdco of any other Units pursuant to the procedures set forth in Article X hereof, MDC Holdco shall have all of the rights, powers and duties associated with such Units.

Section 2.4           Additional Members and Membership Interests.  Additional Persons may be admitted to the Company as Members and Membership Interests may be created and issued to such Persons on such terms and conditions as the Members shall approve, subject to Section 4.1 hereof.  The terms of admission or issuance may specify the creation of different classes or groups of Members having different rights, powers and duties.  The creation of any new class or group of Members shall be indicated in an amendment to this Agreement in accordance with Section 14.4 hereof and such amendment shall indicate the different rights, powers and duties of the classes or groups of Members.

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

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

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Section 2.7           Certification of Units. The Company may at its election issue certificates to the Members representing the Units held by such Member. If such election is approved by the Managers, then this Section 2.7 shall apply and not otherwise:

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

(b)           The transfer register or transfer book and blank certificates shall be kept by the secretary of the Company or by any transfer agent or registrar approved by the Managers for that purpose. The certificates shall be numbered and registered in the share or unit register or transfer books of the Company as they are issued. Except to the extent that the Company shall have received written notice of an assignment of any Unit in the Company, the Company shall be entitled to treat the Person in whose name any certificates issued by the Company stand on the books of the Company as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such Unit on the part of any other Person.

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

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

ARTICLE III

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS

Section 3.1           Capital Account; Capital Contributions.

(a)           The Capital Accounts of the Members shall be computed in accordance with Section 7.2 below.  The Members hereby recognize the following to be the factual basis on which the Capital Accounts shall be so computed: (i) prior to the purchase of Class A Units by MDC Holdco from IMS Holdco pursuant to the Purchase Agreement, IMS Holdco made a capital contribution to the Company in an amount equal to the fair market value of the Business, which fair market value the Members agreed was equal to 133.33% of the fair market value of the actual consideration paid by MDC Holdco to IMS Holdco pursuant to the Purchase Agreement (the value of such consideration being the "Purchase Consideration Value"); (ii) pursuant to the Purchase Agreement, MDC Holdco acquired 100% of the Class A Units and 75% of IMS Holdco's former aggregate Capital Account in the Company and accordingly the Capital Account of MDC Holdco equals the Purchase Consideration Value; and (iii) the remaining aggregate Capital Account of IMS Holdco equals 33.33% of the Purchase Consideration Value.

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(b)           The Members agree that for purposes of this Agreement, each of MDC Holdco and IMS Holdco shall be deemed to have made initial Capital Contributions equal to their initial Capital Account balance as set forth in Section 3.1(a) above, and on Schedule A hereto, which shall be adjusted by the Members as soon as the final Purchase Consideration Value has been determined in accordance with the Purchase Agreement.  The Members also agree that the Gross Asset Values (as defined in Section 13.1 below) of all Business assets are to be determined as set forth in Section 8 of the Conveyance Document (as defined in the Purchase Agreement).

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

Section 3.3           Allocation of Profits and Losses.

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

(i)           Profits shall be allocated as follows:

(A) First, to those Members to whom GAAP PBT (as such term is defined in Section 13.1) for such calendar year and each prior calendar year since the Effective Time has been allocated under Section 3.5 until the excess of the cumulative allocations to each such Member of Profits for such calendar years under this Section 3.3(a)(i) over any cumulative allocations to each such Member of Losses under Section 3.3(a)(ii) for such calendar years equals the amount of GAAP PBT so allocated to each such Member during such calendar years; and

(B) Thereafter, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(ii)           Losses shall be allocated as follows:

(A) First, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(B) over Losses allocated under this Section 3.3(a)(ii)(A), 100% to the Members in the proportion in which such excess was allocated;

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(B) Second, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(A) over Losses allocated under this Section 3.3(a)(ii)(B), 100% to the Members in the proportion in which such excess was allocated;

(C) Third, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(b)          In the case of any property contributed to the Company by any Member which at the time of contribution has an adjusted tax basis which differs from its fair market value, items of Profits, Losses, income, gain and deduction for income tax purposes shall be allocated as required under Section 704(c) of the Code to take into account such difference.   The parties agree that such allocations will be made following the traditional method with remedial allocations.

(c)           Notwithstanding anything to the contrary in this Agreement, all items of income attributable to any: (A) change in method of accounting for a taxable period ending on or prior to the Effective Time or a change in method required on account of the transactions contemplated to occur on the Effective Time, whether under Section 481 or otherwise; (B) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); and (C) installment sale or open transaction disposition made on or prior to the Effective Time, shall be allocated 100% to IMS Holdco.  The Members agree that if the allocation provided for in the preceding sentence cannot be done, the Managers shall cause the Company to allocate items of income, gain, deduction, and loss among the Members to achieve substantially the same results as if such allocation had been done.  In addition, an amount of income equal to any income triggered to MDC Holdco and/or the Company on account of any deemed assumption by either or both of them of any deferred revenue of IMS Holdco as of the Effective Time shall be allocated 100% to IMS Holdco.

(d)           Any item of taxable income, gain, loss or deduction of the Company (as well as any credits or the basis of property to which such credits apply) as determined for federal income tax purposes shall be allocated in the same manner as the corresponding income, gain, loss, or deduction is allocated under Section 3.3(a) (as modified by Section 3(e)).  Allocations pursuant to this Section 3.3(d) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

(e)           Special Allocations and Limitations

(1)           In the event a Member unexpectedly receives in any taxable year any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) which cause or increase an Adjusted Capital Account Deficit (as defined in Section 13.1) of such Member, items of Company income and gain shall be specially allocated to such Member in such taxable year (and, if necessary in subsequent taxable years), in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible.

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(2)           Notwithstanding the provisions of Section 3.3(a), in no event shall Losses of the Company be allocated to a Member if such allocation would result in such Member’s having an Adjusted Capital Account Deficit at the end of any taxable year.  All Losses in excess of the limitation set forth in this Section 3.3(e)(2) shall be allocated to the Members with positive balances in their Capital Accounts, as a class pro rata in proportion to such positive balances.

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

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

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

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

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

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

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

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

(5)           Solely for purposes of determining a Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Members' interests in Company profits are in proportion to their Units, and, for purposes of allocating Nonrecourse Liabilities (as defined in Section 13.1) of the Company among the Members pursuant to Treasury Regulation Section 1.752-3(a)(3), the parties agree that each Member's interest in Company profits shall equal its Units.

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

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(7)           For purposes of determining the character (as ordinary income or capital gain) of any Profits allocated to the Members pursuant to this Section 3, such portion of Profits that is treated as ordinary income attributable to the recapture of depreciation shall, to the extent possible, be allocated among the Members in the proportion which (i) the amount of depreciation previously allocated to each Member bears to (ii) the total of such depreciation allocated to all Members.  This Section 3.3(f)(7) shall not alter the amount of allocations among the Members pursuant to this Section 3, but merely the character of income so allocated.

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

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

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

Section 3.4           Distributions.

(a)           Subject to the making of the Tax Distributions (as defined in clause (b) below), to the extent permitted by the Act, the Company shall distribute Cash Flow (as defined in Section 13.1) of the Company as follows:

(i) first, distributions of Cash Flow generated by the Company in respect of any calendar year, shall be distributed 100% to the holders of the Class A Units in an amount equal to the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class A Distribution Shortfall Amount (as defined in Section 13.1) for such year; and

(ii) thereafter, distributions of Cash Flow generated by the Company in respect of any calendar year shall be distributed to the holders of the Class B Units in an amount no greater than the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class B Distribution Shortfall Amount (as defined in Section 13.1) for such year.

Distributions described above shall be made on a quarterly basis, generally in arrears, based upon the financial statements of the Company and its subsidiaries then available to the Managers.

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(b)           Notwithstanding anything in this Agreement to the contrary, in preference to any other distributions pursuant to this Section 3.4, the Members shall cause the Company to distribute cash of the Company to its Members on a quarterly (or other reasonable) basis at least sufficient for each Member to meet such Member's required federal, state and local income tax payments in respect of such Member's distributive share of the Company's taxable income for the current or the prior fiscal year calculated at the maximum individual tax rates for a resident of New York City taking into account the deduction allowable for federal income taxes of any state income taxes (which tax payments shall include (i) estimated tax payments in respect of the current fiscal year and (ii) any remaining payments of income tax on account of the prior fiscal year not funded out of Tax Distributions in respect of estimated payments for such prior fiscal year) (the "Tax Distributions").  For purposes hereof, if a Member is a "pass-through" entity for income tax purposes, the Tax Distributions required hereby shall be made in amounts which are at least sufficient to meet the tax payment requirements of the stockholders or members of such Member in respect of their allocated Profits hereunder. For purposes of Section 3.4(a) hereof, Tax Distributions shall be deemed to be distributions of Cash Flow at the time of such Tax Distribution.

(c)           Any distribution of funds prior to the end of the fiscal year in which such funds came into possession of the Company shall be treated as a non-interest-bearing loan (a "draw") from the Company to each Member receiving such draw and shall be deemed repaid by reducing the amount of each subsequent distribution to the Member receiving such draw pursuant to this Section 3.4(c) by the lesser of (i) the entire amount otherwise distributable to the Member receiving such draw, and (ii) the entire amount of any unrepaid draws pursuant to this Section 3.4(c).

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

Section 3.5           Allocation of GAAP PBT.

(a)           GAAP PBT (as defined in Section 13.1) for purposes of this Agreement shall be allocated for any calendar year as follows:

(i) first, GAAP PBT shall be allocated to the Loss Account (as defined in Section 3.5(b) below) until such Loss Account shall have been brought to zero;

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(ii) next, with respect to calendar years 2010 through 2014, GAAP PBT generated by the Company in such years shall be allocated 100% to the holders of the Class A Units; and

(iii) thereafter, with respect to all calendar years from and after 2015,  GAAP PBT generated by the Company in such year shall be allocated to the Members in accordance with the number of Units held by such Member.

(b)           Allocation of Annual Loss.  In the event that GAAP PBT for any year shall be less than zero, such amount (expressed as a negative) shall be allocated to a loss account (the "Loss Account"), which shall be required to be brought to zero through allocations of future year allocations of GAAP PBT pursuant to Section 3.5(a)(i) before allocations of positive GAAP PBT shall be made to the Members.

ARTICLE IV

MANAGEMENT

Section 4.1           Management of the Company.

(a)           Except to the extent otherwise provided for herein, the powers of the Company shall be exercised by and under the authority of, and the business and affairs of the Company shall be managed under, the direction of the Managers of the Company. Notwithstanding the foregoing or any other provisions hereof to the contrary, until MDC Holdco or one of its Affiliates has purchased and paid for 100% of the Class B Units the taking of any of the actions listed in clauses (i) through (xv)below shall require the mutual agreement of MDC Holdco and IMS Holdco.  The mutual agreement of MDC Holdco and IMS Holdco may be obtained by a vote at a meeting of the Members or by the written consent of MDC Holdco and IMS Holdco.

(i)            a sale, lease or other disposition of all or substantially all or a significant part of the assets or business of the Company or any subsidiary thereof, except in connection with (x) a sale, lease or other disposition of all or substantially all or a significant part of the assets or business or stock (an "MDC Sale") of MDC Partners Inc. ("MDC Partners"); (y) an MDC Financing (as defined in Section 4.1(e) hereof) or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing; or (z) any transfer by MDC Holdco or any of its Affiliates of their respective interest in the Company to another wholly-owned subsidiary of MDC Partners (an "MDC Internal Transfer") (for purposes of this Agreement, in the event of any MDC Internal Transfer, the term MDC Holdco as used in this Agreement shall include any such transferee);

(ii)           a merger, consolidation or amalgamation of the Company or any subsidiary with and into another Person or of another Person with and into the Company or any subsidiary, except in connection with an MDC Sale, an MDC Internal Transfer or an MDC Financing;

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(iii)          the authorization or issuance of additional Class A Units, Class B Units or other equity ownership interests in, or the granting of any other rights to participate in the proceeds of the sale of assets of the Company which are dilutive to IMS Holdco; or the incurring of debt for borrowed money in excess of the amount provided for in the approved annual operating budget or capital expenditure budget, except in connection with borrowings under the terms and conditions of the MDC Cash Management Program (and in compliance with Section 4.1(d) below);

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

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

(vi)          a relocation of the Company's offices from either its current office location at (a) 650 Fifth Avenue, New York, New York or (b) 50 S. Beverly Drive, Beverly Hills, California, at any time while either lease thereon remains in effect under such lease's terms in effect as of the Effective Date, unless such relocation occurs as a result of the failure to obtain the consent of the landlord in connection with the assignment of such lease;

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

(viii)        any change in the name of the Company;

(ix)           entering into any business other than, or any transaction outside of, the normal business activities of the Company and any of its subsidiaries and related activities other than a MDC Internal Transfer;

(x)           the payment by the Company of any general management fee to any Member or one of such Member's Affiliates;

(xi)           a fundamental change to the nature of the business of the Company and its subsidiaries, taken as a whole;

(xii)          the formation of any subsidiaries of the Company or any of its subsidiaries;

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(xiii)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal (as defined in the Purchase Agreement) is in the active employ of the Company, (x) modify the salary, bonus or other incentive compensation of any employee of the Company or any of its subsidiaries, or (y) adopt or amend any profit sharing or other employee benefit or compensation plan for the Company or any of its subsidiaries; provided, however, this clause (xiii) shall not apply to the employment terms of Robert Ingram, whose employment terms are set forth in his Employment Agreement, or any other individual in the position of Chief Executive Officer of the Company;

(xiv)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal is in the active employ of the Company, hire, or fire "without cause", any employee of the Company or any of its subsidiaries whose annual salary is less than $200,000, without the consent of the then Chief Executive Officer of the Company (or if there is more than one such Chief Executive Officer, then any of such Chief Executive Officers, it being understood that as of the date of this Agreement Robert Ingram is the Chief Executive Officer of the Company); and

(xv)         the delegation to any Manager or to any committee of the Board of Managers of the Company or any subsidiary or to any officer of the Company or any subsidiary the power to take any of the actions referred to in the foregoing clauses before obtaining the authorization required by this Section 4.1(a).

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

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

(d)          The Members hereto further agree that the operations of the Company and its subsidiaries shall be conducted (i) subject to Section 4.1(g) below, to participate in the overall cash management and banking program of MDC Partners (the "MDC Cash Management Program"), and (ii) to comply on a timely basis with the financial reporting and budgeting procedures of MDC Partners as from time to time in effect, which procedures require the approval of an annual operating budget, capital expenditure budget and cash flow projections and require management of operating companies to seek approval prior to material deviations from such budgets.

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(e)           Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the purchase price pursuant to the Purchase Agreement and for other good and valuable consideration, the Members hereby (i) agree that MDC Partners  and/or one or more of its Affiliates, in connection with its or any of its Affiliates’ current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon MDC Holdco's Membership Interests; (x) pledge or grant a security interest in or otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under any Call to, or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders from time to time (as applicable and collectively, the "Lender"); and (z) have the Company and/or its subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned to it.

(f)           MDC Partners shall cause sufficient working capital to be made available to the Company as shall be determined by the Board of Managers to be reasonably necessary to execute upon its approved annual operating and capital expenditure budgets, but in no event shall MDC Partners or any of its Affiliates be required to fund losses of the Company or any of its subsidiaries.  Such working capital shall be provided to the Company on terms consistent with the MDC Cash Management Program and accordingly, neither MDC Partners nor any of its Affiliates shall be required to provide working capital in the event that the consolidated cash balance of the Company in the MDC Cash Management Program is negative. The parties hereto further agree that the Company shall hereby adopt, and shall take appropriate steps to cause the employees of the Company to comply with, the Code of Conduct of MDC Partners, as the same may be amended from time to time.

(g)           The Company shall comply with all applicable federal, state and local laws and the Company shall provide reasonable assistance to MDC Partners and its Affiliates in their compliance with all applicable federal, state and local laws, including without limitation, the provisions of the Sarbanes-Oxley Act of 2002, as amended from time to time.

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

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Section 4.3           Number and Qualifications of Managers.  As long as IMS Holdco owns outstanding Units of the Company, there shall be five (5) Managers of the Company of which MDC Holdco shall be entitled to appoint three (3) Managers and IMS Holdco shall be entitled to appoint two (2) Managers (each Manager appointed by IMS Holdco must be a full-time employee of the Company or one of its subsidiaries); thereafter the Managers shall be elected in accordance with Section 4.4.  No decrease in the number of Managers shall have the effect of shortening the term of any incumbent Manager.  None of the Managers need be Members of the Company or residents of the State of Delaware.  The initial designees of MDC Holdco are Gavin Swartzman, Michael Sabatino and David Doft.  The initial designees of IMS Holdco are Robert Ingram and Desiree Du Mont.

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

Section 4.5           Removal; Filling of Vacancies.  As long as IMS Holdco owns outstanding Units of the Company, only MDC Holdco can remove and replace its appointed Managers and only IMS Holdco can remove and replace its appointed Managers.  Following such time, the Members by the required vote as set forth in Section 5.5 shall be entitled to remove any Manager and to elect for the unexpired term of such Manager so removed another individual.  Upon the resignation, retirement or death of any of the Managers of the Company, subject to Section 4.3, the Members by the required vote as set forth in Section 5.5, shall be entitled to elect another Person for the unexpired term of such Manager.

Section 4.6           Place of Meetings.  Meetings of the Managers, annual, regular or special, shall be held in New York, NY, unless otherwise agreed to by the Managers.

Section 4.7           Annual Meetings.  Annual meetings of the Managers, of which no notice shall be required, shall be held at the discretion of the Managers immediately following any annual meeting of Members, at which time any and all business may be transacted.

Section 4.8           Regular Meetings.  The Managers shall notify each of the Members of regular meetings of the Managers, which meetings shall be held at such times and places as may be fixed from time to time by resolution adopted by the Managers.  Except as otherwise provided by statute, any and all business may be transacted at any regular meeting.  The Managers shall be given reasonable notice of the date, time and place of any scheduled regular meeting.

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

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

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

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

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

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

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

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

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

ARTICLE V

MEETINGS OF MEMBERS

Section 5.1           Annual Meetings.  An annual meeting of the Members shall not be required, but if called by any Member may be held on such date, at such time and at such place as shall be determined by the Managers and stated in the notice of the meeting, provided that there may be called no more than one such annual meeting in any calendar year.  At such meeting, the Members shall elect the Managers (subject to Section 4.3 above) and transact such other business as may properly be brought before the meeting.

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

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

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

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

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

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

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ARTICLE VI

OFFICERS

Section 6.1           Officers.  The Managers may designate one or more individuals (who may or may not be Managers) to serve as officers of the Company.  The Company shall have such officers as the Managers may from time to time determine.  Any two or more offices may be held by the same individual.  An officer of the Company shall have the duties and responsibilities consistent with his position and shall perform such duties and responsibilities as shall from time to time be prescribed or delegated to him by the Managers, subject to the terms of any employment agreement with the Company or one of its subsidiaries to which such officer may be a party. The Managers hereby initially designate Robert Ingram as Chief Executive Officer of the Company, Desiree Du Mont as President of the Company, Ron Corvino as President of the Company, Joe Volpe as Chief Operating Officer of the Company, Mitchell Gendel as Vice President and Secretary of the Company,  Michael Sabatino as Vice President and Treasurer of the Company, Gavin Swartzman as Vice President, Development of the Company, Edward Kipperman as Vice President, Taxation of the Company and Doreene Weiner as Director, Treasury Operations of the Company.

ARTICLE VII

ACCOUNTING AND TAX MATTERS; REPORTS; BANKING

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

Section 7.2           Capital Accounts.  An individual capital account (the "Capital Account") shall be maintained by the Company for each Member as provided below:

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(a)           Each Member's Capital Contributions when made shall be credited to such Member's Capital Account.  The Capital Account of each Member shall, except as otherwise provided in this Agreement, be (i) credited with the amount of cash and the fair market value of any property contributed to the Company by such Member or its predecessor in interest (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), (ii) credited with the amount of any Profits allocated to such Member or its predecessor in interest for federal income tax purposes, (iii) debited by the amount of any Losses allocated to such Member or its predecessor in interest for federal income tax purposes, (iv) debited by such Member's (or such predecessor's) allocable share of expenditures of the Company not deductible in computing the Company's taxable income and not properly chargeable as capital expenditures, including any nondeductible book amortization of capitalized costs, and (v) debited by the amount of cash or the fair market value of any property distributed to such Member its predecessor in interest (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code).  Immediately prior to any distribution of property by the Company, the Members’ Capital Accounts shall be adjusted, as required by Treasury Regulation 1.704-1(b)(2).

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

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

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

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

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

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

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

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

(c)           To elect under Section 754 of the Code to adjust the basis of the Company's assets pursuant to Sections 734 and 743 of the Code.

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

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

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

ARTICLE VIII

COVENANTS OF THE MEMBERS

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

ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION

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

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Section 9.2           Liquidation.  Upon dissolution of the Company, the Members shall appoint a Manager as liquidating trustee, who shall immediately commence to wind up the Company’s affairs; provided, however, that a reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the satisfaction of liabilities to creditors so as to enable the Members to minimize the normal losses attendant upon a liquidation.  After making payment or provision for all debts and liabilities of the Company, if determined to be necessary under the circumstances by the Managers, the Members' Capital Accounts shall be adjusted by debiting or crediting each Member's Capital Account with its respective share of the hypothetical gains or losses resulting from the assumed sale of all remaining assets of the Company for cash at their respective fair market values as of the date of dissolution of the Company in the same manner as gains and losses on actual sales of such properties are allocated under Section 3.3 and Section 3.5 hereof.  The liquidating trustee shall then by payment of cash or property make distributions to the Members in accordance with their respective Capital Accounts.  Any distribution to the Members in liquidation of the Company shall be made by the later of the end of the taxable year in which the liquidation occurs or 90 days after the date of such liquidation.  Notwithstanding any provisions in this Agreement to the contrary, no Member shall be obligated to restore a deficit balance in its Capital Account at any time.  The proceeds of liquidation shall be distributed, as realized, in the manner provided in the Act, subject to the applicable provisions of Section 3.4.  Subject to the immediately following sentence, the Members shall continue to share Profits and Losses during liquidation in the same proportions, as specified in Sections 3.3 and 3.5 hereof, as before liquidation.  Notwithstanding anything to the contrary herein, the Managers shall in their good faith discretion (and in a manner which reflects the economic interests of the Members consistent with the intent of the transactions set forth in this Agreement and the Purchase Agreement) allocate items of income, gain, deduction, and loss for the year of liquidation (and for earlier years if necessary to the extent then possible) so as to give Members positive Capital Account balances, immediately before the distributions provided for in the second preceding sentence, equal to the amount (if any) that would be distributed to Members if distributions were made in accordance with Section 3.4(a) and (b) hereof.  In the event that such Manager is unable to perform in his capacity as liquidating trustee due to bankruptcy, dissolution, death, adjudicated incompetency or any other termination of such Manager as an entity, the liquidating trustee shall be a Person approved by the unanimous vote of the Membership Interests.  With respect to this provision, the term "liquidation" shall have the same meaning as set forth in Treasury Regulation §1.704-1(b)(2)(ii) as in effect at such time, provided that the events specified in Section 10 shall not be deemed a "liquidation".

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

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

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ARTICLE X

RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS

Section 10.1         Assignment by the Members.  For so long as IMS Holdco owns Units, no Class A Unit shall be sold or transferred without the consent of IMS Holdco, except in connection with (i) an MDC Sale, (ii) an MDC Internal Transfer, (iii) a sale described in Section 10.2(b) or (iv) an MDC Financing or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing.  Except as set forth in Section 10.2(b), no Class B Unit shall be sold, transferred, assigned, pledged or otherwise disposed of, in whole or in part, without the written consent of MDC Holdco to such transfer, which, in the case of a transfer in connection with a distribution to the direct or indirect members of IMS Holdco or for tax or estate planning purposes, shall not be unreasonably delayed or withheld (but which shall require, without limitation, that such Class B Units so transferred continue to be subject to the applicable Call under Sections 10.2(a) and 10.2(c) hereof).  Any purported transfer by IMS Holdco or other permitted holder of Class B Units of all or any of its Units, any purported assignment by IMS Holdco or other permitted holders of Class B Units of any of its rights under this Agreement, and any purported delegation by IMS Holdco or other permitted holders of Class B Units of any of its duties or obligations under this Agreement (which shall in no way relieve IMS Holdco or such other permitted holder of Class B Units of responsibility for the performance of any such duties and obligations), in contravention of any of the provisions of this Agreement, will be null and void ab initio and of no force and effect.  Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the indirect sale of Units as part of any transaction involving a change of control of MDC Partners or its successors.

Section 10.2         Call Rights of MDC Holdco; Permitted IMS Holdco Liquidity Actions.

(a)           MDC Holdco Call.  At any time during the first calendar quarter of any calendar year commencing with calendar year 2015 (each, a "Call Period"), MDC Holdco shall have the right (but not the obligation) to require IMS Holdco to sell to it (a "Call"), all  of the Class B Units owned by IMS Holdco.  MDC may exercise the Call at any time during the Call Period, and may do so by delivering written notice of exercise (a "Call Exercise Notice") to IMS Holdco during the Call Period.  The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

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(b)           IMS Holdco Sale Request.

(i)           In the event that MDC Holdco has not yet exercised its Call right pursuant to Section 10.2(a) and the Sale Request Condition (as defined below) has then been met, during any applicable Sale Request Period (as defined below), IMS Holdco shall have the right (but not the obligation) to request that MDC Holdco purchase from it (a "Sale Request") all of the Class B Units owned by IMS Holdco; provided, however, the parties hereto agree that IMS Holdco shall not be permitted to exercise a Sale Request if, in the reasonable determination of MDC Holdco's accountants, the purchase by MDC Holdco of IMS Holdco's Class B Units pursuant to this Section 10.2(b) would result in the failure of the "Goodwill Impairment Test" under FASB 142 (or any successor provision) with respect to such purchase. For purposes of this Section 10.2(b), (x) the "Sale Request Condition" shall be: (i) if the applicable Sale Request Period is during calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of (1) FAP divided by the Split Percentage (as defined herein) applicable to FAP, (2) SAP divided by the Split Percentage applicable to SAP, (3) TAP divided by the Split Percentage applicable to TAP and (4) FOAP divided by the Split Percentage applicable to FOAP (as each of FAP, SAP, TAP, FOAP and Split Percentage is defined in the Purchase Agreement) paid or payable as of such date, divided by (II) 90%, (B) the 2010 Growth Payment (as defined in the Purchase Agreement) and (C) $24,000,000; or (ii) if the applicable Sale Request Period is during any calendar year other than calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of the fractions, the numerators of which are each Additional Payment (as defined in the Purchase Agreement) paid or payable in respect of periods prior to such date, and the denominators of which are the Split Percentages applicable to such Additional Payment, divided by (II) 90%, (B) the 2010 Growth Payment and (C) $30,000,000; and (y) the "Sale Request Period" shall be any of: (i) the first calendar quarter of calendar years 2011, 2012, 2013 and 2014 and (ii) the second calendar quarter of calendar year 2015 and any calendar year thereafter.

(ii)          IMS Holdco may make a Sale Request by delivering written notice (a "Sale Request Notice") to MDC Holdco at any time during the applicable Sale Request Period; provided that IMS Holdco may not make more than one Sale Request in any 12-month period.  MDC Holdco shall have thirty (30) days following receipt of the Sale Request Notice to accept IMS Holdco's Sale Request, which acceptance shall be exercised by delivering written notice (a "Sale Request Acceptance Notice") to IMS Holdco within such thirty day period.

(iii)         If such Sale Request Acceptance Notice is delivered (an "Accepted Sale Request"), the Class B Units shall be sold to MDC Holdco in accordance with the provisions set forth in Section 10.4, with the date of delivery of the Sale Request Acceptance Notice being the exercise date.

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(iv)         In the event that MDC Holdco shall not have delivered a Sale Request Acceptance Notice during such thirty (30) day period, then (x) IMS Holdco shall have the right for twelve (12) months to solicit bona-fide offers for a sale of its Class B Units and MDC Holdco's Class A Units to an unaffiliated third party (the "Prospective Purchaser"), (y) upon the receipt of such offer, IMS Holdco shall deliver written notice (a "Third Party Offer Notice") of such offer to MDC Holdco, which notice shall identify the Prospective Purchaser and shall describe the material terms of such offer, and (z) for a period of thirty (30) days after receipt of the Third Party Offer Notice, MDC Holdco shall have the right to deliver a Sale Request Acceptance Notice and (A) if such Sale Request Acceptance Notice is delivered, MDC Holdco shall acquire the Class B Units as described above in this Section 10.2 and no Member shall be permitted to consummate a sale to the Prospective Purchaser or (B) if a Sale Request Acceptance Notice is not delivered, IMS Holdco shall, for a period of one hundred twenty (120) days, be permitted to consummate the sale of its Class B Units to such Prospective Purchaser, and IMS Holdco shall have the right to require MDC Holdco to sell its Class A Units to such Prospective Purchaser on substantially the same terms and conditions (taking into account the economic differences, if any, between Units).

(c)           Termination Call.  Notwithstanding the periods described in Sections 10.2(a) and (b) above, in the event that a Principal shall no longer be an employee of the Company for any reason whatsoever (a "Departing Principal"), then at any time following the effective date of such termination (the "Date of Termination"), MDC Holdco shall have the right, subject to the proviso contained in this Section 10.2(c), to exercise a Call, exercisable by delivery to IMS Holdco of a Call Exercise Notice, in respect of a number of IMS Holdco's Class B Units equal to the number of Class B Units indirectly owned by the Departing Principal; provided, however, MDC Holdco shall not be permitted to exercise a Call under this Section 10.2(c) for a period of 20 days following the Date of Termination (the "Waiting Period") and during such Waiting Period, IMS Holdco and/or the Principals who are in the then-current employ of the Company (the "Remaining Principals"), shall have the right to purchase all of the Departing Principal's equity interests in IMS Holdco as of the Date of Termination upon terms and conditions agreed upon by IMS Holdco and the Principals, so long as notice of such purchase has been delivered in writing to MDC Holdco prior to the expiration of the Waiting Period indicating a binding commitment on behalf of IMS Holdco and/or the Remaining Principals to purchase such equity interests within 60 days following the expiration of the Waiting Period.  In the event such purchase does not occur within such 60-day period, MDC Holdco shall be entitled to exercise a Call pursuant to this Section 10.2(c).

Section 10.3        Binding Obligations Upon Exercise of a Call or an Accepted Sale Request.  Upon the proper delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, IMS Holdco shall be obligated to sell to MDC Holdco, and MDC Holdco shall be obligated to purchase from IMS Holdco, the Units subject to the Call or the Accepted Sale Request, as applicable, pursuant to the terms of this Article X.

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Section 10.4         Purchase Price.

(a)           Calculation/Payment of the Purchase Price for Class B Units. In connection with the exercise of a Call under Section 10.2(a) or Section 10.2(c) or an Accepted Sale Request for Class B Units, MDC Holdco shall calculate and pay in the aggregate to holders of such Units, the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class B Purchase Price"):

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "First Payment") equal to:

           AP  x  {(PBT for YP-1) x  5.0} – {the Reduction Amount}

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(ii)           within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "Second Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP)) x 5.0} – {First Payment} – {the Reduction Amount}

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(iii)          within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the "Final Class B Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP) + (PBT for YP+1)) x AM} – {First Payment + Second Payment} – {the Reduction Amount}

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(b)           If any calculation of the Class B Purchase Price results in an amount which is equal to or less than zero, such Class B Purchase Price payment shall be deemed to be zero and accordingly the seller of the Units pursuant to such Call or Accepted Sale Request shall not be under any obligation to pay such negative amount (expressed as a positive number).

(c)           Other Definitions.

(i)           "AM" shall mean 5.0, and may be increased by one or more of the following:

(x)           by 0.25, if Average Annual PBT Growth Rate is 10% or greater;

(y)           by 0.25, if Average PBT Margin for the Measuring Period (as defined below) is 25% or greater; and

(z)           by 0.50, if within a reasonable period of time prior to the applicable Class B Closing Date, the Principals have indentified successor management of the Company, reasonably satisfactory to the Chief Executive Officer of MDC Partners, and such successor management have agreed to employment terms and protective covenants satisfactory to MDC Holdco.

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(ii)           "Applicable Percentage" or "AP" shall mean (a) the number of Class B Units being sold pursuant to a Call or an Accepted Sale Request, divided by (b) the total number of outstanding Units.

(iii)          "Average Annual PBT Growth Rate" shall mean the result of (x) the sum of (1) (A) PBT for YP+1 less PBT for YP divided by (B) PBT for YP, (2) (A) PBT for YP less PBT for YP-1 divided by (B) PBT for YP-1, and (3) (A) PBT for YP-1 less PBT for YP-2 divided by (B) PBT for YP-2, divided by (y) 3.

(iv)          "Average PBT Margin" shall equal the percentage equivalent of the quotient determined by dividing (a) the total PBT for the Measuring Period, by (b) the total Revenues for the Measuring Period.

(v)           "Direct Billings of Expenses" shall mean any third party costs that are billed to a particular client, excluding any mark-up to such client on such costs.

(vi)          "Measuring Period" shall mean the calendar year or years included in the applicable Class B Purchase Price calculation.

(vii)         "Pass Through of Third Party Costs" shall mean any component of a particular client invoice that is dispersed (or will ultimately be dispersed) directly to a third party (other than independent contractors) in connection with the funding of a service relating to that client's campaign, engagement or business, whether or not such Person acts as an agent or as a principal with respect to such client.

(viii)        "PBT" for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP; provided, however, that for calendar year 2010, 2010 PBT shall mean the sum of (x) the consolidated PBT of IMS Holdco and its subsidiaries, if any, from January 1, 2010 through and including the Effective Date (the "Pre-Closing Period") and (y) the consolidated PBT of the Company and its subsidiaries, if any, as of the Effective Time through and including December 31, 2010 (the "Post-Closing Period"); provided further, however, in making the foregoing determinations:

(1)           neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or any predecessor entity), is the named beneficiary or is otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

(2)           intercompany management fees charged by MDC Holdco or any of its Affiliates (as defined in Section 13.1 hereof) to the Company or any of its subsidiaries, shall not be treated as an expense, unless such fees have been approved by the parties in accordance with this Agreement, and such fees replace an expense that would otherwise be paid by the Company to a third party;

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(3)           any Losses (as defined in Section 7.2 of the Purchase Agreement) of a Purchaser Indemnified Party (as defined in Section 7.2 of the Purchase Agreement) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 of the Purchase Agreement and which are fully assumed by IMS Holdco and/or the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(4)           any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3 of the Purchase Agreement) shall not be treated as an expense;

(5)           there shall be no charge against income for the payment or accrual of any component of any Purchase Price payment pursuant to the Purchase Agreement or any component of any Class B Purchase Price payment;

(6)           the fees and disbursements of the Company's attorneys, accountants and financial advisors incurred prior to or after the Closing (as defined in Section 2.3 of the Purchase Agreement) in connection with the formation and organization of the Company and the negotiation, preparation and execution of the Purchase Agreement and the other documents delivered at such Closing that have either (x) been expensed and paid prior to such Closing or (y) accrued for on the Closing Balance Sheet (as defined in the Purchase Agreement), shall not be treated as an expense;

(7)           the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company's direct or indirect ownership in such subsidiary;

(8)           any extraordinary or unusual gains or losses, gains or losses from the sale of any capital assets, and any gains or losses recognized by the Company or any of its subsidiaries in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries shall be excluded from income;

(9)           the fees and expenses of (1) the Accountants in preparing any Annual Determination and year-end audit, (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder and (3) any preparation of income tax returns, reports and related schedules, in excess of $57,500 in any calendar year, shall not be treated as an expense;

(10)         if the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger of similar transaction (an "Acquired Business") on or after the date of this Agreement, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business unless its inclusion has been agreed to by the Representative (as defined in the Purchase Agreement);

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(11)           any transaction expenses incurred in connection with any potential or contemplated acquisition shall not be included as an expense;

(12)           any write-off or amortization of goodwill or other intangibles arising out of the purchase of the Purchased Units (as defined in the Purchase Agreement) pursuant to the Purchase Agreement shall not be treated as an expense;

(13)           there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price (as defined in the Purchase Agreement) or the Class B Purchase Price under Sections 10.2 and 10.4 of this Agreement;

(14)           the fees and expenses of BDO Seidman LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010 shall not be treated as an expense for the purposes of 2010 PBT;

(15)           any interest costs or transaction fees incurred by the Company or any of its subsidiaries resulting from an MDC Financing shall not be treated as an expense except to the extent incurred by the Company under the MDC Cash Management Program;

(16)           any distribution by IMS Holdco of any Class B Purchase Price proceeds to its members or any employees of the Company pursuant to "phantom equity" documents as disclosed in the Purchase Agreement and in accordance with Section 6.3 of the Purchase Agreement shall not be treated as an expense;

(17)           any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense;

(18)           PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses;

(19)           solely with respect to the calculation of 2010 PBT, an amount equal to $239,404 with respect to expenses incurred during the Pre-Closing Period shall not be treated as an expense;

(20)           for each calendar year in respect of which an Extra Payment (as defined in the Purchase Agreement) is required to be made under the Purchase Agreement, PBT shall be reduced by an amount equal to the Extra Payment made in respect of such calendar year; and

(21)           Notwithstanding anything to the contrary, PBT for calendar year 2009 shall be $9,409,000, without further adjustment.

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(ix)           "Reduction Amount" shall mean (A) with respect to a Call under 10.2(c), an amount equal to (i) (a) in the case of a Call being triggered by the termination of employment of Ingram or Desiree (as each is defined in the Purchase Agreement), 36.5% or (b) in the case of a Call being triggered by the termination of employment of Ron (as defined in the Purchase Agreement), 27% multiplied by (ii) $2,666,667, multiplied by (iii) a fraction, the numerator of which is the number of days in the period commencing on the applicable Date of Termination and ending on December 31, 2012 (such period, with respect to the applicable Call, the "Remaining Period"), and the denominator of which is the number of days in the period commencing as of the Closing Date (as defined in the Purchase Agreement) and ending on December 31, 2012 and (B) with respect to a Call under 10.2(a), an amount equal to zero.

 (x)           "Revenues" during each relevant calendar year of the Measuring Period, shall mean the commissions and fees, mark-ups and hourly charges earned by the Company for work generated or performed by employees or contractors and charged to clients determined in accordance with GAAP; provided, however, that in making such determination, Revenues shall not include any Pass Through of Third Party Costs or Direct Billings of Expenses; provided further, however, that for calendar year 2010, Revenues shall mean the sum of (x) the Revenues earned by IMS Holdco during the Pre-Closing Period and (y) the Revenues earned by the Company and its subsidiaries during the Post-Closing Period.

(xi)           "YP" shall mean the calendar year in which the Call Exercise Notice or the Sale Request Acceptance Notice, as applicable, is delivered.

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

(xiii)         "YP+1" shall mean the calendar year immediately following YP.

(xiv)        "YP-2" shall mean the calendar year immediately preceding YP-1.

(xv)         "Split Percentage" shall mean "Applicable Percentage" as defined in the Purchase Agreement.

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(d)           Accounting Procedures.

(i)            Commencing with calendar year 2010 and for every calendar year thereafter, MDC Holdco shall prepare or, at its discretion, shall cause BDO Seidman LLP or other independent accountant of national standing (the "Accountants") to prepare, in accordance with GAAP, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business on December 31 of each such calendar year, and a related consolidated statement of income of the Company and its subsidiaries, if any, for the relevant calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth for the period under examination the applicable calculation of GAAP PBT and Adjusted GAAP PBT, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4 (the "Annual Determination"); provided, however, upon the exercise of a Call or an Accepted Sale Request pursuant to this Article X, MDC Holdco shall include or, at its discretion, shall cause the Accountants to include, in any Annual Determination with respect to each calendar year during the Measuring Period, (x) the applicable calculations of PBT, Average Annual PBT Growth Rate, Revenues, Average PBT Margin and AM, and (y) all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4.  MDC Holdco shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements and to determine the scope of such audit.  MDC Holdco shall instruct the Accountants to deliver a copy of each Annual Determination to IMS Holdco not later than 120 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of MDC Holdco.

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

(iii)          In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 10.4, then IMS Holdco and MDC Holdco agree to select another mutually acceptable accounting firm to perform the services to be performed under this Section 10.4 by the Independent Auditors.  If IMS Holdco and MDC Holdco fail to select the Independent Auditors as required by clause (i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either IMS Holdco or MDC Holdco may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York. to appoint an independent firm of certified public accountants to perform the services required under this Section 10.4 by the Independent Auditors.  MDC Holdco, on the one hand, and IMS Holdco, on the other hand, shall share the fees of the JAMS equally.  For purposes of this Section 10.4(d) the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this clause (iii).

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

(v)           The books and records of the Company and its subsidiaries shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto and their representatives, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 10.4.  IMS Holdco, on the one hand, and MDC Holdco, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by or for them to support a position that is contrary to the position taken by the other party. Upon the request by IMS Holdco, MDC Holdco shall request that the Accountants make their work papers available to IMS Holdco and its representatives after the completion of any audit of the financial statements of the Company and its subsidiaries and/or to verify the calculations set forth in any Annual Determination (in each case during normal business hours upon reasonable advance notice at the principal offices of the Accountants); provided, however, it is understood that the decision to make such work papers available is solely that of the Accountants.

(e)           Closing.  The closing for each purchase and sale of Units (a "Class B Closing") pursuant to a Call or Accepted Sale Request, as applicable, shall be held at the offices of the Company within 30 days after the delivery of an Exercise Notice or Sale Request Acceptance Notice.  The date on which the respective Class B Closing takes place is referred to in this Agreement as its "Class B Closing Date".  At each Class B Closing, the parties shall execute an Assignment of Unit Agreement in form and substance reasonably acceptable to MDC Holdco and IMS Holdco and an amendment to this Agreement in accordance with Section 14.4 reflecting such transfer and the reallocated Units (including the related portion of the Capital Account).  The transfer of any Units pursuant to this Section 10.4 shall be free and clear of all claims, liens and encumbrances other than as created by the provisions of this Agreement.  Prior to any Class B Closing, the Company and IMS Holdco shall use their best efforts to obtain any required governmental or regulatory approval or approvals.  MDC Holdco shall have the right to postpone any scheduled Class B Closing until any such governmental or regulatory approval is obtained.

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(f)           Class B Purchase Price Payment.  Payment of each component of the Class B Purchase Price shall be made by MDC Holdco in cash by direct wire transfer to such account as IMS Holdco may direct by written notice to the Purchaser given pursuant to this Agreement.  Each component of the Class B Purchase Price shall be deemed to include imputed interest to the extent required by the Code.

(g)           Effect of Events During Period Class B Units Are Issued.  The parties hereto understand and agree that under the terms of each Principal's Employment Agreement with the Company, such Principal may be terminated for "Cause" or "without Cause" (as such terms are defined in the Employment Agreements).  Accordingly, each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any subsidiary of the Company, no party to this Agreement or any Person deriving rights through any such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary of the Company (x) constitutes a breach by MDC Holdco or any of its Affiliates of this Agreement, (y) resulted in an adverse effect on any Class B Purchase Price payment under this Agreement forming the basis for a claim against MDC Holdco or any of its Affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 10.4(d) hereof.  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect the right of IMS Holdco to receive any Class B Purchase Price payment under this Agreement.

(h)           Covenant to Fund.  MDC Partners shall cause sufficient capital to be available to MDC Holdco to meet its obligations to pay the Class B Purchase Price pursuant to Article X of this Agreement.  If MDC Holdco fails to meet its payment obligations under Article X of this Agreement, then MDC Partners shall satisfy such payment obligations to the extent MDC Holdco has failed to do so.

ARTICLE XI

INDEMNIFICATION

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

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

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

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

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Section 11.5         Definitions.  For purposes of this Article XI:

(a)           The term "expenses" includes court costs and attorneys' fees and disbursements;

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

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

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

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

Section 11.7         Nonexclusivity of Rights.  The right to indemnification and the advancement and payment of expenses conferred in this Article XI shall not be exclusive of any other right that a Manager or other Person indemnified pursuant hereto may have or hereafter acquire under any law (common or statutory), provision of the Certificate or this Agreement or otherwise.

ARTICLE XII

ADDITIONAL AGREEMENTS

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

35

ARTICLE XIII

OTHER DEFINITIONS

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

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

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

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

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

"Adjusted GAAP PBT" shall mean, for any calendar (or partial) year, GAAP PBT for such calendar year less (A) (i) with respect to calendar year 2010, $666,667 or (ii) with respect to calendar years 2011 or 2012, $1,000,000; plus (B) in the event that a Principal's employment with the Company shall have been terminated prior to December 31, 2012, an amount equal to the result of (x) the total Reduction Amount applicable to any Call able to be made under Section 10.2(c) in respect of such Principal, times (y) a fraction, the numerator of which is the number of days in the Remaining Period occurring during such calendar year and the denominator of which is the total number of days in the Remaining Period.

"Affiliate" of any Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

"Business Day" shall mean any day on which commercial banks are not authorized or required to close in New York, NY.

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

"Cash Flow" shall mean the consolidated amount of cash in respect of any calendar year of the Company and its subsidiaries that the Board of Managers in its good faith discretion believes is available for distribution to Members of the Company; provided, however, with respect to distributions made in respect of calendar years 2010 through 2014, Cash Flow must be at least an amount necessary to satisfy the distribution required pursuant to Section 3.4(a)(i).

36

"Class A Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(i) to holders of Class A Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class A Units of GAAP PBT under Section 3.5(a) for such prior years.

"Class B Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class B Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class B Units of GAAP PBT under Section 3.5(a) for such prior years.

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

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

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

"Effective Time" shall mean 12:01a.m. on May 1, 2010.

"GAAP PBT" shall mean, for any calendar (or partial) year, the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP, and in accordance with the procedures applicable to such determination set forth in Section 10.4(d) hereof; provided, however, for calendar year 2010, GAAP PBT shall be calculated from and after the Effective Time through December 31, 2010.

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

(i)           Subject to the final sentence of this definition, the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by reference to Section 3.1(b), and as set forth in Section 8 to the Conveyance Document;

37

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

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

(iv)         The Gross Asset Value of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (vi) of the definition of Profits and Losses herein; provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the extent the Managers determine that an adjustment pursuant to clause (ii) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to clauses (i), (ii), or (iv) hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.  It is understood that the Gross Asset Values of each of the assets of the Company on the date of execution of this Agreement shall be determined as set forth in Section 8 of the Conveyance Document.

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

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

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

38

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

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

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

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

"Profits and Losses", shall mean, for each fiscal year, an amount equal to the Company’s taxable income or loss for such fiscal year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

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

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

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

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

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

39

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

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

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 3.3(e) shall be determined by applying rules analogous to those set forth in clauses (i) through (vii) above.

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

"Units" shall mean Class A Units or Class B Units, as applicable.

ARTICLE XIV

MISCELLANEOUS

Section 14.1         Manner of Giving Notice.  Whenever under the provisions of the Act, the Certificate or this Agreement, notice is required to be given to the Company, any Member or Manager of the Company, and no provision is made as to how such notice shall be given, any such notice to be given hereunder shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next Business Day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to MDC Holdco or MDC Partners, to:

MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

40

If to IMS Holdco, to:

c/o BDR Company, LLC

650 Fifth Avenue

New York, New York 10017

Attention: Robert Ingram

with a copy to:

Moses & Singer LLP

405 Lexington Avenue

New York, New York 10174

Attention: Solomon P. Friedman, Esq.

If to the Company, to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

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

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

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

41

Section 14.4         Amendment or Modification.  The power to adopt, alter, amend or repeal this Agreement is vested solely in the Members. Except for the amendments contemplated by Sections 2.1 and 10.4(e), and subject to the provisions of Section 4.1, this Agreement may be altered or amended only by the unanimous vote or unanimous written consent of MDC Holdco and IMS Holdco. The Managers may not adopt, alter, amend or repeal any provision of this Agreement.

Section 14.5         Binding Effect.  Subject to the restrictions on transfer and assignment set forth in Article X of this Agreement, this Agreement is binding on and inures to the benefit of the Members and their respective successors and permitted assigns, including without limitation, any Lender who exercises a default remedy under any agreement entered into in connection with an MDC Financing.

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

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

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

Section 14.9         Currency.  Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.  All payments made hereunder shall be made in United States Dollars.

42

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

MF + P ACQUISITION CO.
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary
INTEGRATED MEDIA SOLUTIONS, LLC
By:	/s/ Robert Ingram
	Name: Robert Ingram
	Title: Chief Executive Officer
INTEGRATED MEDIA SOLUTIONS PARTNERS LLC
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary

43

TABLE OF CONTENTS

ARTICLE I
FORMATION OF LIMITED LIABILITY COMPANY
Section 1.1  Formation	2
Section 1.2  Purpose	2
Section 1.3  Offices; Registered Agent	2
Section 1.4  Filings and Foreign Qualification	2
Section 1.5  Term	2
ARTICLE II
MEMBERS; MEMBERSHIP INTERESTS; UNITS
Section 2.1  Members and Membership Units	2
Section 2.2  Classes of Units	3
Section 2.3  Transfer of Units	3
Section 2.4  Additional Members and Membership Interests	3
Section 2.5  Liability of Member	3
Section 2.6  Limitations on Members	3
Section 2.7  Certification of Units	4
ARTICLE III
CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS
Section 3.1  Capital Account; Capital Contributions	4
Section 3.2  Withdrawal and Return of Capital Contribution	5
Section 3.3  Allocation of Profits and Losses	5
Section 3.4  Distributions	9
Section 3.5  Allocation of GAAP PBT	10
ARTICLE IV
MANAGEMENT
Section 4.2  Authority of Managers	14
Section 4.3  Number and Qualifications of Managers	15
Section 4.4  Election and Term of Service	15
Section 4.5  Removal; Filling of Vacancies	15
Section 4.6  Place of Meetings	15
Section 4.7  Annual Meetings	15
Section 4.8  Regular Meetings	15
Section 4.9  Special Meetings	15
Section 4.10  Quorum of and Action by Managers	16
Section 4.11  Approval or Ratification of Acts or Contracts by Members	16
Section 4.12  Action Without A Meeting	16

i

Section 4.13  Telephone Meetings	16
Section 4.14  Interested Managers and Officers	16
Section 4.15  Manager's Compensation	17
Section 4.16  Time Devoted to Company	17
Section 4.17  Liability of Managers	17
ARTICLE V
MEETINGS OF MEMBERS
Section 5.1  Annual Meetings	17
Section 5.2  Special Meetings	17
Section 5.3  Place of Meetings	17
Section 5.4  Notice of Meetings	18
Section 5.5  Quorum of and Action by Members	18
Section 5.6  Action Without a Meeting	18
Section 5.7  Telephone Meetings	18
ARTICLE VI
OFFICERS
Section 6.1  Officers	19
ARTICLE VII
ACCOUNTING AND TAX MATTERS; REPORTS; BANKING
Section 7.1  Books and Records	19
Section 7.2  Capital Accounts	19
Section 7.3  Tax Matters Partner	20
Section 7.4  Tax Elections	20
Section 7.5  Bank Accounts; Investment of Company Funds	21
Section 7.6  Signature of Negotiable Instruments	21
ARTICLE VIII
COVENANTS OF THE MEMBERS
Section 8.1  Independent Accountants	21
ARTICLE IX
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 9.1  Dissolution	21
Section 9.2  Liquidation	22
Section 9.3  Termination	22
Section 9.4  Claims of the Members	22

ii

ARTICLE X
RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS
Section 10.1  Assignment by the Members	23
Section 10.3  Binding Obligations Upon Exercise of a Put or a Call	25
ARTICLE XI
INDEMNIFICATION
Section 11.1  Indemnification of Managers and Members	33
Section 11.2  Others	34
Section 11.3  Insurance and Other Arrangements	34
Section 11.4  Report to Members	34
Section 11.5  Definitions	35
Section 11.6  Severability	35
Section 11.7  Nonexclusivity of Rights	35
ARTICLE XII
ADDITIONAL AGREEMENTS
Section 12.1  Integrated Media Solutions Name	35
ARTICLE XIII
OTHER DEFINITIONS
Section 13.1  Other Definitions	36
ARTICLE XIV
MISCELLANEOUS
Section 14.1  Manner of Giving Notice	40
Section 14.2  Waiver of Notice	41
Section 14.3  No Company Seal	41
Section 14.4  Amendment or Modification	42
Section 14.5  Binding Effect	42
Section 14.6  Governing Law; Severability	42
Section 14.8  Counterparts	42
Section 14.9  Entire Agreement	42
Section 14.9  Entire Agreement	42

iii

INDEX OF DEFINED TERMS

AAA	33
Accepted Sale Request	25
Accountants	32
Acquired Business	30
Act	2
Adjusted Capital Account Deficit	37
Adjusted GAAP PBT	37
Affiliate	38
Agreement	1
AM	27
Annual Determination	32
AP	28
Applicable Percentage	28
Average Annual PBT Growth Rate	28
Average PBT Margin	28
Business	1
Business Day	38
Call	24
Call Exercise Notice	24
Call Period	24
Capital Account	20
Capital Contribution	38
Cash Flow	38
Certificate	2
Class A Distribution Shortfall Amount	38
Class B Closing	34
Class B Closing Date	34
Class B Distribution Shortfall Amount	38
Class B Purchase Price	27
Code	38
Company Minimum Gain	38
Conveyance Document	1
Date of Termination	26
Departing Principal	26
Depreciation	38
Direct Billings of Expenses	28
draw	10
Effective Time	39
Employment Agreements	4
expenses	36

iv

Final Class B Payment	27
First Payment	27
GAAP	20
GAAP PBT	39
Gross Asset Value	39
IMS Holdco	1
Independent Auditors	32
JAMS	33
Lender	14
Loss Account	11
Manager	36
MDC Cash Management Program	14
MDC Financing	14
MDC Holdco	1
MDC Internal Transfer	12
MDC Partners	12
MDC Sale	12
Member	1
Member Nonrecourse Debt	40
Member Nonrecourse Debt Minimum Gain	40
Member Nonrecourse Deductions	40
Members	1
Membership Interest	40
Nonrecourse Deductions	40
Nonrecourse Liability	40
Original Operating Agreement	1
Other Entity	35
Pass Through of Third Party Costs	28
PBT	28
Person	40
proceeding	36
Profits and Losses	40
Prospective Purchaser	26
Purchase Agreement	1
Purchase Consideration Value	5
Purchase Transaction	1

v

Reconciliation Period	32
Reduction Amount	31
Regulatory Allocations	7
Remaining Period	31
Remaining Principals	26
Revenues	31
Sale Request	25
Sale Request Acceptance Notice	25
Sale Request Condition	25
Sale Request Notice	25
Sale Request Period	25
Second Payment	27
serving at the request of the Company	36
Tax Distributions	10
Third Party Offer Notice	26
TMP	21
Treasury Regulations	41
Unit Capital Account	21
Units	41
Waiting Period	26
YP	31
YP+1	31
YP-1	31
YP-2	31

vi

Schedule 2.1

Members and Membership Units

MF + P Acquisition Co.: 750 Class A Units

Integrated Media Solutions, LLC: 250 Class B Units

i

EX-12 8 v183284_ex12.htm

Exhibit 12

Statement of Computation of Ratio of Earnings to Fixed Charges

	Three Months Ended March 31,
	2010			2009
	(000’s)			(000’s)
Earnings:
Income (loss) from continuing operations attributable to MDC Partners Inc.	$	(10,186	)	$	281
Additions:
Income tax expense		249			615
Noncontrolling interest in income of consolidated subsidiaries		968			382
Fixed charges, as shown below		8,302			5,319
Distributions received from equity-method investees		7			—
		9,526			6,316
Subtractions:
Equity in income (loss) of investees		(104	)		93
Noncontrolling interest in earnings of consolidated subsidiaries that have not incurred fixed charges		—			—
		(104	)		93
Earnings as adjusted	$	(556	)	$	6,504
Fixed charges:
Interest on indebtedness, expensed or capitalized		6,377			3,443
Amortization of debt discount and expense and premium on indebtedness, expensed or capitalized		651			318
Interest within rent expense		1,274			1,558
Total fixed charges	$	8,302		$	5,319
Ratio of earnings to fixed charges		N/A			1.22
Fixed charge deficiency		8,858			N/A

EX-31.1 9 v183284_ex31-1.htm

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, Miles S. Nadal, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ MILES S. NADAL
		Miles S. Nadal
		Title: Chairman, Chief Executive Officer and President

EX-31.2 10 v183284_ex31-2.htm

Exhibit 31.2

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, David B. Doft, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ DAVID B. DOFT
		David B. Doft Title: Chief Financial Officer

EX-32.1 11 v183284_ex32-1.htm

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Miles S. Nadal, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010

By:	/s/ MILES S. NADAL
	Miles S. Nadal Title: Chairman, Chief Executive Officer and President

EX-32.2 12 v183284_ex32-2.htm

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David B. Doft, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010
By:	/s/ DAVID B. DOFT
	David B. Doft Title: Chief Financial Officer

EX-99.1 13 v183284_ex99-1.htm

Exhibit 99.1

MDC PARTNERS INC.

SCHEDULE OF CURRENT AND POTENTIAL MARKETING

COMMUNICATIONS COMPANY OWNERSHIP

Company	% Owned at 3/31/10			Year of Initial Investment	Put/Call Options
					2010			Thereafter
					(See Notes)
Consolidated:
Strategic Marketing Services
Allard Johnson Communications Inc.		74.0	%	1992		89.0	%	Note 1
Attention Partners LLC		51.0	%	2009		—		Note 2
Bruce Mau Design Inc.		50.1	%	2004		—
Colle & McVoy, LLC		95.0	%	1999		—		Note 3
Crispin Porter & Bogusky, LLC		100.0	%	2001		—
Company C Communications LLC		90.0	%	2000		—		Note 4
Fearless Progression, LLC		51.0	%	2010		75.0	%	Note 5
Fletcher Martin, LLC		85.0	%	1999		100.0	%	Note 6
Hello Design, LLC		49.0	%	2004		—
henderson bas partnership		65.0	%	2004		100.0	%
HL Group Partners, LLC		65.9	%	2007		—		Note 7
kirshenbaum bond senecal & partners, LLC		100.0	%	2004		—
Mono Advertising, LLC		49.9	%	2004		54.9	%	Note 8
Redscout, LLC		60.0	%	2007		—		Note 9
Skinny NYC, LLC		50.1	%	2008		—		Note 10
Veritas Communications Inc.		64.1	%	1993		78.4	%	Note 11
Vitro Robertson, LLC		77.0	%	2004		—		Note 12
Yamamoto Moss Mackenzie		100.0	%	2000		—
Zig Inc.		76.1	%	2004		88.4	%	Note 13
Zyman Group, LLC		94.1	%	2005		—		Note 14
Performance Marketing Services
Accent Marketing Services, LLC		100.0	%	1999		—
Accumark Communications Inc.		55.0	%	1993		61.7	%	Note 15
Bryan Mills Iradesso Corp.		62.8	%	1989		88.2	%	Note 16
Communifx Partners, LLC		75.0	%	2010				Note 17
Computer Composition of Canada Inc.		100.0	%	1988		—
Northstar Research Partners Inc.		70.0	%	1998		—		Note 18
Onbrand		89.0	%	1992		—
Shout Media LLC		51.0	%	2010
Source Marketing, LLC		83.0	%	1998		—		Note 19
TargetCom, LLC		100.0	%	2000		—		Note 20
Team Holdings LLC		60.0	%	2010				Note 21
Equity Accounted:
Adrenalina, LLC		49.9	%	2007		—		Note 22

Notes

(1) MDC has the right to increase its ownership interest in Allard Johnson Communications Inc. through acquisition of an incremental interest, and the other holders have the right to put to MDC the same incremental interest up to 89% of this entity in 2010 and 100% only upon termination.

(2) Attention Partners LLC is owned by HL Group Partners, LLC. HL Group Partners, LLC has the right to increase its ownership in Attention Partners, LLC through acquisitions of incremental interests, and the other interest holders has the right to put to HL Group Partners, LLC the same incremental interests up to 100% only upon termination.

(3) MDC has the right to increase its economic ownership in Colle & McVoy, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(4) MDC has the right to increase its economic ownership in Company C Communications, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012. Effective October 1, 2008, Company C is operated as a division of kirshenbaum bond & partners, LLC.

(5) MDC has the right to increase its economic ownership in Fearless Progression, LLC through acquisitions of incremental interests, up to 75% of this entity in 2010, and up to 100% in 2011.

(6) Effective January 1, 2010, MDC acquired the remaining 15% membership interest; however, in conjunction with the step-up in Trendcore, which was merged into Fletcher Martin, LLC, a 15% profits interests was issued.

(7) MDC has the right to increase its ownership in HL Group Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 72.4% of this entity in 2012, up to 82.62% in 2013 and up to 93.73% in 2014. Effective January 25, 2010, MDC acquired an additional 1% membership interest in HL Group Partners, LLC.

(8) MDC has the right to increase its ownership in Mono Advertising, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 54.9% of this entity in 2010, up to 60.0% in 2011, up to 65.0% in 2012, up to 70.0% in 2013 and up to 75.0% in 2014.

(9) MDC has the right to increase its ownership in Redscout, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 80% of this entity in 2012.

(10) MDC has the right to increase its ownership in Skinny NYC, LLC through acquisition of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 60.1% of this entity in 2014, up to 70.1% of this entity in 2015 and up to 80.1% of this entity in 2016.

(11) MDC has the right to increase its ownership in Veritas Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 78.4% of this in 2010, up to 81.5% in 2011, up to 95.1% in 2012 and up to 100% in 2013.

(12) MDC has the right to increase its ownership in Vitro Robertson, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 95% of this entity in 2011, up to 97.5% in 2012 and up to 100% in 2013.

(13) MDC has the right to increase its ownership in Zig Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 88.4% of this entity in 2010, and up to 90.45% of this entity in 2012.

(14) As of March 31, 2010, MDC’s economic interest in Zyman Group, LLC was 100% of profits as its priority return is not expected to be exceeded. In January 2009, Zyman Group, LLC has become an operating division of kirshenbaum bond & partners, LLC.

(15) MDC has the right to increase its ownership in Accumark Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up to 61.7% of this entity in 2010, up to 68.3% in 2011 and up to 75.0% in 2012. MDC’s current economic interest is 42%.

(16) MDC has the right to increase its ownership in Bryan Mills Iradesso, Corp. through acquisition of an incremental interest, and the other interest holders have the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(17) MDC has the right to increase its ownership in Communifx Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(18) MDC has the right to increase its ownership in Northstar Research Partners Inc. through acquisitions of incremental interests, and the other holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(19) MDC has the right to increase its ownership in Source Marketing, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up 87.1% of this entity in 2011 and 91.3% in 2012 and 100% in 2013.

(20) Effective January 1, 2009, Targetcom LLC is operating as a division of Accent Marketing Services, LLC.

(21) MDC has the right to increase its ownership in Team Holdings, LLC, through acquisition of an incremental interest,  up to 100% of this entity in 2013.

(22) MDC has the right to increase its ownership in Adrenalina, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 61% of this entity in 2013, up to 72% in 2014 and up to 82% in 2015.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.2.2

Exhibit 10.2.2

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

TEAM HOLDINGS LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this “Agreement”) dated as of March 1, 2010, is made and entered into by and among TEAM HOLDINGS LLC, a Delaware limited liability company (the “Company”), MDC ACQUISITION INC., a Delaware corporation (“MDC Holdco”), and WWG, LLC, a Florida limited liability company (“WWG”), WWG2, LLC, a Florida limited liability company ("WWG2", together with MDC Holdco and WWG are collectively referred to as the “Members” and individually a “Member”).   Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article XIII.

WHEREAS, WWG was (x) the sole shareholder of TEAM Enterprises, Inc. a Massachusetts corporation ("TEAM") and (y) the sole member of (A) OuterActive, LLC, a Delaware limited liability company ("O-A") and (B) Pulse Marketing, LLC, a Delaware limited liability company ("Pulse");

WHEREAS, WWG formed NEW TEAM LLC, a Delaware limited liability company ("NT"), as its sole member;

WHEREAS, WWG caused TEAM to contribute substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business, to NT pursuant to a Contribution Agreement (General Assignment, Bill of Sale and Assumption Agreement) (the "NT Conveyance Document");

WHEREAS, WWG and WWG2, LLC formed (the "Formation") the Company, with WWG owning 99% of the issued and outstanding membership interests in the Company and WWG2 owning 1% of the issued and outstanding membership interests in the Company (the membership interests of the Company collectively referred to as the "Membership Interests");

WHEREAS, simultaneously with the Formation, WWG and WWG2 executed and delivered a Limited Liability Company Agreement of the Company (the "Original Operating Agreement"), pursuant to which WWG transferred 100% of its equity ownership in (x) NT, (y) O-A and (z) Pulse to the Company, such that following such transfer, the Company was the sole member of each of NT, O-A and Pulse;

WHEREAS, WWG desired to sell 60% of the Membership Interests in the Company to MDC Holdco and, in connection therewith, to redesignate the Membership Interests as Class A Units, Class B Units and Class C Units;

WHEREAS, pursuant to the Membership Unit Purchase Agreement of even date herewith (the “Purchase Agreement”), WWG sold, transferred, conveyed and delivered to MDC Holdco a 60% membership interest in the Company represented by 600 Class A Units,  such that immediately after giving effect to such transfer, the issued and outstanding Units of the Company were to be as follows:  MDC Holdco – 600 Class A Units; WWG – 310 Class B Units and 80 Class C Units, WWG2 – 10 Class B Units in accordance with the terms of this Agreement;

WHEREAS, the Company wishes to create profits interests to be available for grant to certain Participants pursuant to that certain Restricted Unit Plan effective as of March 1, 2010 (the “Profits Interest Plan”);

WHEREAS, the Members now desire to enter into this Agreement to supersede the Original Operating Agreement, as amended, to designate the existing Membership Interests as Class A Units, Class B Units and Class C Units, to provide for the admission of MDC Holdco as a member, to create Class D Units for use under the Profits Interest Plan and to promote their interests and those of the Company by making provisions in this Agreement to govern their relations as Members;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members and the other parties hereto do hereby agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

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

Section 1.3             Offices; Registered Agent.  The principal place of business of the Company shall be 110 East Broward Boulevard, Suite 2450, Fort Lauderdale, Florida 33301 or such other principal place of business as the Managers (as defined in Section 11.5) may from time to time determine.  The Company may have, in addition to such office, such other offices and places of business at such locations, both within and without the State of Delaware, as the Managers may from time to time determine or the business and affairs of the Company may require.  The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person (as defined in Section 13.1) as the Managers may designate from time to time in the manner provided by law.

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

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

ARTICLE II

MEMBERS; MEMBERSHIP INTERESTS; UNITS

Section 2.1             Members and Membership Units.  The Company is authorized to issue 600 Class A Units, 320 Class B Units, 80 Class C Units and 80 Class D Units, all of which have been or are hereby issued and are outstanding, or are reserved for future issuance under the Profits Interest Plan, and allocated among the Members as set forth on Schedule 2.1.  Upon any change in the Members or Units, including by reason of the issuance of additional Units, the Members agree to complete a revised Schedule 2.1 hereof, which shall be deemed incorporated into this Agreement as part of this Section 2.1.

Section 2.2             Classes of Units.

(a)           Class A Units.  The Class A Units shall have the following characteristics: (i) an initial Unit Capital Account (as defined in Section 7.2(e) hereof), (ii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iii) entitlement to distributions as provided in Sections 3.4 and 9.2, and (iv) voting rights equal to one (1) vote per Unit.

(b)           Class B Units. The Class B Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

(c)           Class C Units. The Class C Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

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(d)           Class D Units.  The Class D Units shall have the following characteristics: (i) an initial Unit Capital Account of $0, (ii) provisions relating to transfer as provided in Article X hereof, (iii) an entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) an entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) no voting rights.  All Class D Units are intended to be “profits interests” within the meaning of Revenue Procedures 93-27 and 2001-43.  In accordance with Revenue Procedure 2001-43, the Company shall treat any such Member issued a Class D Unit as the owner of such Unit, and shall file its IRS Form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with such Class D Unit. Each such Member agrees to take into account such distributive share in computing its federal, state and local income or franchise tax liability for the entire period during which it holds the Class D Unit issued on the date hereof.  The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the fair market value of such Class D Unit.   The undertakings contained in this Section 2.2(d) shall be construed in accordance with Section 4 of Revenue Procedure 2001-43.  Notwithstanding any other provision of this Agreement the Managers shall have the right to amend, and the Members shall take all actions necessary to cause the Managers to amend, this Agreement, in anticipation of or following the issuance of final Treasury Regulations, as determined by the Managers in good faith, to provide for (i) the election of a safe harbor under Treasury Regulation Section 1.83-3(l) (or any similar provision) under which the fair market value of a Class D Units that is transferred in connection with the performance of services is treated as being equal to the liquidation value of that interest, (ii) an agreement by the Company and all of its Members to comply with the requirements set forth in such Regulations and Internal Revenue Service Notice 2005-43 (and any other guidance provided by the Internal Revenue Service with respect to such election) with respect to all Units transferred in connection with the performance of services while the election remains effective, and (iii) any other amendments reasonably related thereto or reasonably required in connection therewith. In executing this Agreement, the Members authorize the Company to utilize the same valuation methodology provided for in Proposed Treasury Regulations Section 1.83-3(l) in determining the fair market value of any Class D Units issued prior to the effective date of such Treasury Regulation.

Section 2.3             Transfer of Units.  In the event a Member sells all or a portion of its Membership Interests in accordance with Article X hereof, then effective as of the date of the sale and subject to compliance with Section 10.1 hereof, such Member shall automatically cease to be a Member in the Company as to such sold Unit.  Upon the acquisition by MDC Holdco of any other Units pursuant to the procedures set forth in Article X hereof or the Profits Interests Plan, MDC Holdco shall have all of the rights, powers and duties associated with such Units.

Section 2.4             Additional Members and Membership Interests.  Additional Persons may be admitted to the Company as Members and Membership Interests may be created and issued to such Persons on such terms and conditions as the Members shall approve, subject to Section 4.1 hereof.  The terms of admission or issuance may specify the creation of different classes or groups of Members having different rights, powers and duties.  The creation of any new class or group of Members shall be indicated in an amendment to this Agreement in accordance with Section 14.4 hereof and such amendment shall indicate the different rights, powers and duties of the classes or groups of Members.  No Member shall be admitted unless such Person shall agree to be bound by the terms of this Agreement, as such agreement may be amended.

4

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

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

Section 2.7             Certification of Units. The Company may at its election issue certificates to the Members representing the Units held by such Member. If such election is approved by the Managers, then this Section 2.7 shall apply and not otherwise:

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

(b)             The transfer register or transfer book and blank certificates shall be kept by the secretary of the Company or by any transfer agent or registrar approved by the Managers for that purpose. The certificates shall be numbered and registered in the share or unit register or transfer books of the Company as they are issued. Except to the extent that the Company shall have received written notice of an assignment of any Unit in the Company, the Company shall be entitled to treat the Person in whose name any certificates issued by the Company stand on the books of the Company as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such Unit on the part of any other Person.

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

5

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

ARTICLE III

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS

Section 3.1           Capital Account.

The Capital Accounts of the Members shall be computed in accordance with Section 7.2 below.

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

Section 3.3           Allocation of Profits and Losses.

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

(i)           Profits shall be allocated as follows:

(A) First, to those Members to whom GAAP PBT (as such term is defined in Section 13.1) for such calendar year and each prior calendar year since the Effective Time has been allocated under Section 3.5 or Section 3.6(b) until the excess of the allocation to each such Member of Profits under this Section 3.3(a)(i) over any allocation to each such Member of Losses under Section 3.3(a)(ii) for such calendar years equals the amount of GAAP PBT so allocated to each such Member during such calendar years; and

(B) Thereafter, to the Members holding Class A Units, Class B Units and Class C Units in accordance with the number of such Units held by them.

(ii)           Losses shall be allocated as follows:

6

(A) First, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(B) over Losses allocated under this Section 3.3(a)(ii)(A), 100% to the Members in the proportion in which such excess was allocated;

(B) Second, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(A) over Losses allocated under this Section 3.3(a)(ii)(B), 100% to the Members in the proportion in which such excess was allocated;

(C) Third, to the Members holding Class A Units, Class B Units and Class C Units in accordance with the number of such Units held by them.

(b)             In the case of any property contributed to the Company by any Member which at the time of contribution has an adjusted tax basis which differs from its fair market value, items of Profits, Losses, income, gain and deduction for income tax purposes shall be allocated as required under Section 704(c) of the Code to take into account such difference.   The parties agree that such allocations will be made following the traditional method with remedial allocations.

(c)             Notwithstanding anything to the contrary in this Agreement, all items of income attributable to any:  (A) change in method of accounting for a taxable period ending on or prior to the Closing Date or a change in method required on account of the transactions contemplated to occur on the Closing Date, whether under Section 481 or otherwise; (B) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); and (C) installment sale or open transaction disposition made on or prior to the Closing Date, shall be allocated 100% to WWG in accordance with its interest.  The parties agree that if the allocation provided for in the preceding sentence cannot be done, the Managers shall cause the Company to allocate items of income, gain, deduction, and loss among the Members to achieve substantially the same results as if such allocation had been done.  In addition, an amount of income equal to any income triggered to MDC Holdco and/or the Company on account of any deemed assumption by either or both of them of any deferred revenue of WWG as of the Closing Date shall be allocated 100% to WWG in accordance with its interest.

(d)             Any item of taxable income, gain, loss or deduction of the Company (as well as any credits or the basis of property to which such credits apply) as determined for federal income tax purposes shall be allocated in the same manner as the corresponding income, gain, loss, or deduction is allocated under Section 3.3(a) (as modified by Section 3(e)).  Allocations pursuant to this Section 3.3(d) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

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(e)             Special Allocations and Limitations

(1)           In the event a Member unexpectedly receives in any taxable year any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) which cause or increase an Adjusted Capital Account Deficit (as defined in Section 13.1) of such Member, items of Company income and gain shall be specially allocated to such Member in such taxable year (and, if necessary in subsequent taxable years), in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible.

(2)           Notwithstanding the provisions of Section 3.3(a), in no event shall Losses of the Company be allocated to a Member if such allocation would result in such Member’s having an Adjusted Capital Account Deficit at the end of any taxable year.  All Losses in excess of the limitation set forth in this Section 3.3(e)(2) shall be allocated to the Members with positive balances in their Capital Accounts, as a class pro rata in proportion to such positive balances.

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

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

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

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

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

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

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

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

(5)           Solely for purposes of determining a Member’s proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Members’ interests in Company profits are in proportion to their Units, and, for purposes of allocating Nonrecourse Liabilities (as defined in Section 13.1) of the Company among the Members pursuant to Treasury Regulation Section 1.752-3(a)(3), the parties agree that each Member’s interest in Company profits shall equal its Units.

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

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(7)           For purposes of determining the character (as ordinary income or capital gain) of any Profits allocated to the Members pursuant to this Section 3, such portion of Profits that is treated as ordinary income attributable to the recapture of depreciation shall, to the extent possible, be allocated among the Members in the proportion which (i) the amount of depreciation previously allocated to each Member bears to (ii) the total of such depreciation allocated to all Members.  This Section 3.3(f)(7) shall not alter the amount of allocations among the Members pursuant to this Section 3, but merely the character of income so allocated.

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

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

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

Section 3.4            Distributions.

(a)           Subject to the making of the Tax Distributions (as defined in clause (b) below), to the extent permitted by the Act, the Company shall distribute Cash Flow (as defined in Section 13.1) of the Company as follows:

(i) first, distributions of Cash Flow generated by the Company in respect of any calendar year, shall be distributed 100% to the holders of the Class A Units in an amount equal to the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class A Distribution Shortfall Amount (as defined in Section 13.1) for such year;

(ii) thereafter, distributions of Cash Flow generated by the Company in respect of any calendar year shall be distributed to the holders of the Class B Units, Class C Units and Class D Units in an amount no greater than the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the sum of the Class B Distribution Shortfall Amount, Class C Distribution Shortfall Amount and Class D Shortfall Amount (each as defined in Section 13.1) for such year, distributed to the holders in the proportion and the amounts in which such sum was attributable to such holders.

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Distributions described above shall be made on an annual basis, generally in arrears, based upon the financial statements of the Company and its subsidiaries then available to the Managers.

(b)           Notwithstanding anything in this Agreement to the contrary, in preference to any other distributions pursuant to this Section 3.4, the Members shall cause the Company to distribute cash of the Company to its Members on a quarterly (or other reasonable) basis at least sufficient for each Member to meet such Member’s required federal, state and local income tax payments in respect of such Member’s distributive share of the Company’s taxable income for the current or the prior fiscal year calculated at the maximum individual tax rates for a resident of Florida taking into account the deduction allowable for federal income taxes of any state income taxes (which tax payments shall include (i) estimated tax payments in respect of the current fiscal year and (ii) any remaining payments of income tax on account of the prior fiscal year not funded out of Tax Distributions in respect of estimated payments for such prior fiscal year) (the "Tax Distributions").  For purposes hereof, if a Member is a "pass-through" entity for income tax purposes, the Tax Distributions required hereby shall be made in amounts which are at least sufficient to meet the tax payment requirements of the stockholders or members of such Member in respect of their allocated Profits hereunder. For purposes of Section 3.4(a) hereof, Tax Distributions shall be deemed to be distributions of Cash Flow at the time of such Tax Distribution.

(c)           Any distribution of funds prior to the end of the fiscal year in which such funds came into possession of the Company shall be treated as a non-interest-bearing loan (a "draw") from the Company to each Member receiving such draw and shall be deemed repaid by reducing the amount of each subsequent distribution to the Member receiving such draw pursuant to this Section 3.4(c) by the lesser of (i) the entire amount otherwise distributable to the Member receiving such draw, and (ii) the entire amount of any unrepaid draws pursuant to this Section 3.4(c).

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

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Section 3.5           Allocation of GAAP PBT.

(a)           Subject to Section 3.6(b) below, GAAP PBT (as defined in Section 13.1) for purposes of this Agreement shall be allocated for any calendar year as follows:

(i) first, GAAP PBT shall be allocated to the Loss Account (as defined in Section 3.5(b) below) until such Loss Account shall have been brought to zero;

(ii) next, GAAP PBT generated by the Company in calendar years 2010-2012 shall be allocated 100% to the holders of the Class A Units;

(iii) next, subject to Section 3.5(c) below, GAAP PBT generated by the Company in calendar years 2013 and 2014 shall be allocated 100% to the holders of Class A Units; provided, however, no more than the following shall be allocated to the holders of Class A Units under this Section 3.5(a)(iii) in respect of each of the calendar years set forth below:

Year	Amount
2013	the sum of (a) the Annual Hurdle plus (b) the Class A 2013 Shortfall Amount (such sum, the “2013 Class A Priority Allocation”)
2014	the sum of (a) the Annual Hurdle plus (b) the Class A 2014 Shortfall Amount (such sum, the “2014 Class A Priority Allocation”)

(iv) next, subject to Section 3.5(c) below, with respect to calendar years 2013 and 2014 only, after satisfaction of the allocations in Section 3.5(a)(iii) with respect to such year, GAAP PBT generated by the Company in such years shall be allocated 100% to the holders of Class B Units, Class C Units and Class D Units; provided, however, no more than the following shall be allocated to such holders under this Section 3.5(a)(iv) in respect of such calendar years as set forth below:

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Year	Amount
2013	the result of (x) the 2013 Class A Priority Allocation, multiplied by (y) 40%, divided by (z) 60%, such amount being allocated as follows: (A)     first, an amount equal to 8.0% of the amount of GAAP PBT in excess of Base PBT shall first be allocated to holders of Class D Units (other than MDC Holdco) pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized, with any amount attributable to unissued or cancelled units or Class D Units held by MDC Holdco being allocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them; (B)     next, the remainder shall be allocated pro rata among the holders of Class B Units and Class C Units in accordance with the total number of Class B and Class Units held by them until the Class C Units shall have been allocated an amount of GAAP PBT for 2013 under this clause (B) equal to 8.0% of Base PBT; and (C)     thereafter, any remainder shall be allocated 100% to the holders of Class B Units in accordance with the number of Class B Units held by them.
2014	the result of (x) the 2014 Class A Priority Allocation, multiplied by (y) 40%, divided by (z) 60%, such amount being allocated as follows: (A)     first, an amount equal to 8.0% of the amount of GAAP PBT in excess of Base PBT shall first be allocated to holders of Class D Units (other than MDC Holdco) pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized, with any amount attributable to unissued or cancelled units or Class D Units held by MDC Holdco being allocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them; (B)     next, the remainder shall be allocated pro rata among the holders of Class B Units and Class C Units in accordance with the total number of Class B and Class Units held by them until the Class C Units shall have been allocated an amount of GAAP PBT for 2014 under this clause (B) equal to 8.0% of Base PBT; and (C)     thereafter, any remainder shall be allocated 100% to the holders of Class B Units in accordance with the number of Class B Units held by them.

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(v) thereafter, subject to Section 3.5(c) below, with respect to calendar years 2013 and 2014 only, after satisfaction of the allocations in Sections 3.5(a)(iii) and 3.5(a)(iv) with respect to such year, GAAP PBT generated by the Company shall be allocated as follows:

(A)           32.0% of such additional amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(B)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

(C)           the remainder of the amount to be allocated under this Section 3.5(a)(v) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(vi) thereafter, with respect to the period January 1, 2015 until February 28, 2015, GAAP PBT generated by the Company in such period shall be allocated:

(A)           first, 100% to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them, up to a maximum amount equal to the sum of (i) the 2015 Hurdle plus (ii) the Class A 2015 Shortfall Amount (such sum, the “2015 Class A Priority Allocation”);

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(B)           second, 100% to the holders of Class B Units, Class C Units and Class D Units up to a maximum amount equal to the result of (i) the 2015 Class A Priority Allocation, multiplied by (ii) 40%, divided by (iii) 60%, such amount being allocated among them as follows:

(1)           first, 100% to the holders of Class B and Class C Units allocated pro rata among the holders of Class B Units and Class C Units in accordance with the total number of Class B and Class Units held by them until the Class C Units shall have been allocated an amount of GAAP PBT for 2015 under this clause (B) equal to 8.0% of Base PBT; and

(2)           thereafter, any remaining amount allocated 100% to the holders of Class B and Class D Units, allocated pro rata in accordance with the number of Class B or Class D Units held by such holder out of the total number of Class B and Class D Units authorized but without allocating any amount to MDC Holdco in respect of any Class D Units held by it, with any amount attributable to unissued or cancelled Class D Units or Class D Units held by MDC Holdco being allocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them;

(C)           third, any remaining GAAP PBT shall be allocated as follows:

(1)           32.0% of such amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(2)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

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(3)           the remainder of the amount to be allocated under this Section 3.5(a)(vi)(C) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(vii) thereafter, with respect to the remainder of calendar year 2015, GAAP PBT generated by the Company in such period shall be allocated as follows:

(A)           first, 100% to the holders of Class A Units, Class B and Class C Units allocated pro rata in accordance with the number of Units held by them, until holders of the Class C Units shall have been allocated an aggregate amount of GAAP PBT for 2015 under this clause (A) and Section 3.5(a)(vi) equal to 8.0% of Base PBT;

(B)           thereafter, the remaining GAAP PBT shall be allocated as follows:

(1)           32.0% of such amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(2)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

(3)           the remainder of the amount to be allocated under this Section 3.5(a)(vii)(B) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(viii) thereafter, with respect to calendar year 2016 and all calendar years thereafter, GAAP PBT generated by the Company in such years shall be allocated as follows:

(A)           first, GAAP PBT in excess of Base PBT shall be allocated as follows:

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(1)           32.0% of such amount shall be allocated to the holders of Class B Units, pro rata in accordance with the number of Class B Units held by them,

(2)            8.0% of such amount shall be allocated to the holders of Class D Units (other than MDC Holdco), pro rata in accordance with the number of Class D Units held by such holder out of the total number of Class D Units authorized (with any unallocated amount resulting from unissued or cancelled Class D Units or Class D Units held by MDC Holdco) being reallocated to the holders of Class C Units pro rata in accordance with the number of Class C Units held by them); and

(3)           the remainder of the amount to be allocated under this Section 3.5(a)(viii)(A) to the holders of Class A Units, pro rata in accordance with the number of Class A Units held by them;

(B)            then, the remaining GAAP PBT shall be allocated to the holders of Class A, Class B and Class C Units, pro rata in accordance with the number of Class A, Class B or Class C Units held by them.

(b)           Allocation of Annual Loss.  In the event that GAAP PBT for any year shall be less than zero, such amount (expressed as a negative) shall be allocated to a loss account (the “Loss Account”), which shall be required to be brought to zero through allocations of future year allocations of GAAP PBT pursuant to Section 3.5(a)(i) before allocations of positive GAAP PBT shall be made to the Members.

(c)           Effect of Priority Satisfaction Event.  In the event that a Priority Satisfaction Event shall have occurred:

(i)           in respect of allocations being made for calendar years 2010-2012, then (A) allocations for such year shall continue to be made in accordance with Sections 3.5(a)(i) and (ii) for calendar years 2010-2012, (B) no allocations for calendar year 2013 or 2014 shall be made under Sections 3.5(a)(iii), (iv) or (v), and (C) all future allocations for 2013 and 2014 shall be made under Section 3.5(a)(viii) irrespective of the 2016 date limitation set forth therein;

(ii)           in respect of allocations being made for calendar years 2013 or 2014, then (A) no further allocations shall be made to Class A Units under Section 3.5(a)(iii) for such calendar year, (B) holders of Class B, C and D Units shall be entitled to receive an allocation under Section 3.5(a)(iv) in respect of such year of the lesser of (x) the amount remaining available for allocation and (y) 66.67% of the amount allocated to the holders of Class A Units for such calendar year under Section 3.5(a)(ii), (C) any additional allocations for such calendar year shall be made under Section 3.5(a)(v), and (D) allocations for all future years shall be made under Section 3.5(a)(viii) irrespective of the 2016 date limitation set forth therein; or

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(iii)           in respect of allocations being made for calendar year 2015 under Section 3.5(a)(v), then (A) no further allocations shall be made to Class A Units under Section 3.5(a)(vi) for such calendar year, (B) holders of Class B, C and D Units shall be entitled to receive an allocation under Section 3.5(a)(vi) in respect of such period of the lesser of (x) the amount remaining available for allocation and (y) 66.67% of the amount allocated to the holders of Class A Units for such period under Section 3.5(a)(vi), and (C) any additional allocations for 2015 shall be made under Section 3.5(a)(vii) irrespective of the period limitation set forth therein.

(d)           For purposes of this Section 3.5, the following additional definitions shall apply:

(i)           “2010 Hurdle” means the result of (x) the sum of (A) $2,200,000 and (B) FAP divided by 90%, multiplied by (y) 83-1/3%;

(ii)          “2011 Hurdle” means the sum of (x) $2,200,000, (y) FIP times 20%, and (z) SAP divided by 90%;

(iii)         “2012 Hurdle” means the sum of (w) $2,200,000, (x) FIP times 20%, (y) FIIP times 20%, and (z) FIAP divided by 90%;

(iv)         “2015 Hurdle” means the result of (x) the sum of (A) $2,200,000 and (B) FAP divided by 90%, multiplied by (y) 16-2/3%;

(v)          “Annual Hurdle” shall mean the result of (a) the sum of the CP, FIP and  FIIP, (b) multiplied by 20%.

(vi)         “Base PBT” shall mean 2009 PBT (as defined in Section 2.1.3 of the Purchase Agreement).

(vii)        “Class A 2013 Shortfall Amount” shall mean the excess, if any, of (x) the sum of the 2010 Hurdle, 2011 Hurdle and 2012 Hurdle over (y) the aggregate amount of GAAP PBT allocated to the holders of Class A Units pursuant to Section 3.5(a)(ii) in respect of calendar years 2010, 2011 and 2012.

(viii)       “Class A 2014 Shortfall Amount” shall mean the excess, if any, of (x) the sum of the Annual Hurdle and the Class A 2013 Shortfall Amount over (y) the amount of GAAP PBT allocated to the holders of Class A Units pursuant to Section 3.5(a)(iii) in respect of calendar year 2013.

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(ix)         “Class A 2015 Shortfall Amount” shall mean the excess, if any, of (x) the sum of the Annual Hurdle and the Class A 2014 Shortfall Amount over (y) the amount of GAAP PBT allocated to the holders of Class A Units pursuant to Section 3.5(a)(iii) in respect of calendar year 2014.

(x)          “CP”, “FAP”, “FIP”, “FIAP”, “FIIP” and “SAP” shall have the meaning ascribed to such terms in the Purchase Agreement.

(xi)         “Priority Satisfaction Event” shall mean (i) prior to the payment of the FIIP, if the allocation of GAAP PBT to Class A Units pursuant to Section 3.5(a) shall equal the result of (x) $19,000,000 plus (y) FAP divided by 90%, plus (z) SAP divided by 90% or (ii) after the payment of the FIIP, if the allocation of GAAP PBT to Class A Units pursuant to Section 3.5(a) shall equal the result of (w) the sum of CP, FIP, FIIP plus (x) FAP divided by 90%, plus (y) SAP divided by 90%, plus (z) FIAP divided by 90%.

Section 3.6             Company Acquisitions.                                                      

(a)             Consideration of Qualifying Proposals.  WWG may, from time to time, present to the Board, proposals for the Company to acquire businesses that are consistent with the Company’s Board-approved strategy.  If such proposal is a Qualifying Proposal (as defined below) and (x) the MDC Holdco Managers on the Board vote against approval of such acquisition or (y) MDC Partners (as defined in Section 4.1(a)) refuses to provide cash to fund the purchase price for such acquisition, such proposal shall be deemed a “Rejected Qualifying Proposal”.  For further clarity, the Members specifically agree that the failure of the Company and the potential acquisition target to come to terms, any Board requirement that the Company conduct thorough and complete due diligence, any Board requirement that adequate documentation and indemnification protection be provided to the Company or any MDC Partners requirement that the transaction structure be adjusted in respect of tax, finance, accounting or legal considerations, shall not be deemed to be grounds for a Qualifying Proposal to become a Rejected Qualifying Proposal.  In the event that three Qualifying Proposals made in good faith by WWG become Rejected Qualifying Proposals prior to March 1, 2013, an “Acquisition Failure Event” shall have been deemed to occur.   A “Qualifying Proposal” shall be a proposal to acquire a Person:

(i)                that has annual EBITDA margins of at least 20% over the prior two calendar years, and projected over the year of acquisition and the subsequent year,

(ii)               that has annual revenue growth of at least 15% over the prior two calendar years, and projected over the year of acquisition and the subsequent year,

(iii)              for which no Client Group (as defined in Section 10.4(e) below) in the trailing 12 months represents, nor is projected to represent in the next 12 months, more than 20% of revenues,

(iv)              for an effective purchase price multiple of less than 6.0x profit before tax,

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(v)               that has an implied enterprise valuation at the time of acquisition of not more than $20 million;

(vi)              made at a time when the Company shall have had PBT (as defined and calculated pursuant to the Purchase Agreement) for the prior calendar year, and projected PBT (as defined and calculated pursuant to the Purchase Agreement) for the current year, of at least 80% of the then current Reference PBT.  Reference PBT for purposes of this condition shall be (i) 2009 PBT (as defined in the Purchase Agreement) for acquisition proposals made in 2010; the average of 2009 PBT and 2010 PBT (as defined and calculated in the Purchase Agreement) for acquisition proposals made in 2011; and the average of 2009 PBT, 2010 PBT and 2011 PBT (as defined and calculated in the Purchase Agreement) for acquisition proposals made in 2012 or later years; and

(vii)             the terms of which incorporate the following elements:

(A) acquisition of a majority and control, with the right to require the remaining minority (non-binding put rights may be included);

(B) no more than 60% of the projected purchase price is payable at closing, with the remaining purchase price contingent on the performance of the target over at least two years post-acquisition;

(C) the target shall have sufficient and agreed upon working capital to operate its business post-closing in accordance with the target’s proposed operating and capital expenditure budget without additional borrowing;

(D) the target will be debt-free at closing;

(E) the purchaser shall be entitled to a priority return based on the purchase price for the initial purchase;

(F) the seller(s) may be granted minority protections no more favorable than provided in this Agreement;

(G) the seller(s) shall enter into protective covenant agreements reasonably acceptable to MDC Partners; and

(H) MDC Partners shall be entitled to pledge its acquired equity and the assets of the target (and subsidiaries, if any) in connection with MDC Partners’ credit facilities and/or secured debt; the target shall be required to grant upstream guarantees in connection with such facilities and to participate in MDC Partners’ centralized cash management and banking program;

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(b)           Effect of Acquisitions on Profit Allocation, Distributions.  In the event that the Company consummates an acquisition (a “Company Acquisition”), whether or not as a result of a Qualifying Proposal, the Members agree that the following shall be the basis pursuant to which GAAP PBT shall be allocated and cash generated from the operations of such Company Acquisitions (“Acquisition Cash Flow”) shall be utilized:

(i)              Payments of purchase price made by MDC Partners or one of its Affiliates shall be deemed a loan to the Company (an “Acquisition Loan”) made at an interest rate of 12%.  Any third party transaction expenses incurred in connection with the Company Acquisition shall be included as an Acquisition Loan;

(ii)             A separate calculation of GAAP PBT shall be made each year for each Company Acquisition (each such calculation, “Acquired Company GAAP PBT”); for the avoidance of doubt, (x) interest accruing on the Acquisition Loan in respect of any Company Acquisition shall be treated as an expense in the calculation of such Company Acquisition’s Acquired Company GAAP PBT and (y) to the extent any item of income or expense is included in the calculation of Acquired Company GAAP PBT, such item shall not also be included in the calculation of GAAP PBT for purposes of Section 3.5 except to the extent Acquired Company GAAP PBT is included back in GAAP PBT pursuant to clause (iii) below;

(iii)            As long as any Acquisition Loan remains outstanding or any Deferred Acquisition Consideration Liabilities (as defined in Section 10.4(e) below) remain in respect of a Company Acquisition, the Acquired Company GAAP PBT (whether positive or negative) for such Company Acquisition shall not be included in the GAAP PBT to be allocated pursuant to Section 3.5 above and instead shall be allocated 100% to the Class A Member and shall not be included in the calculations described in Section 3.5(a).  If no Acquisition Loan remains outstanding nor any Deferred Acquisition Consideration Liabilities remain in respect of a Company Acquisition, then the Acquired Company GAAP PBT for such Company Acquisition shall be included in the GAAP PBT to be allocated pursuant to Section 3.5 above;

(iv)            As long as a Acquisition Loan for a Company Acquisition is outstanding or any Deferred Acquisition Consideration Liability shall remain without a corresponding cash reserve (as described below), Acquisition Cash Flow from such Company Acquisition shall not be included generally in Cash Flow, but instead shall be allocated in the following manner: (A) first, to pay current interest and any interest arrearage on outstanding Acquisition Loans for such Company Acquisition, (B) second, as a contribution to Cash Flow specifically for the purpose of funding any necessary Tax Distribution relating to the allocation of Acquired Company GAAP PBT for such Company Acquisition, (C) third, as payment on the outstanding balance of the Acquisition Loans for such Company Acquisition and (D) fourth, as a contribution to a cash reserve to satisfy any Deferred Acquisition Consideration Liability for such Company Acquisition.   Upon payment in full of the Acquisition Loans for a Company Acquisition, and satisfaction in full of all Deferred Acquisition Consideration Liabilities (including for this purpose, any associated cash reserve) (collectively, “Debt Satisfaction”), any additional available Acquisition Cash Flow from such acquisition (“Acquisition Free Cash Flow”) shall be included in Cash Flow and become available for distribution in accordance with Section 3.4 hereof.  In the event that following Debt Satisfaction, but prior to delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, (x) the Deferred Acquisition Consideration Liabilities is adjusted downward (other than as a result of a payment), an amount of cash equal to such adjustment shall be released from the cash reserve and shall be included in Cash Flow and become available for distribution in accordance with Section 3.4 or (y) the Deferred Acquisition Consideration Liabilities is adjusted upward, then the first sentence in this clause (iv) shall become effective until a sufficient cash reserve is established to satisfy such adjustment.

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Each Company Acquisition shall be treated separately for purposes of this Section 3.6(b); however, each Acquisition Loan in respect of a single Company Acquisition shall be aggregated for purposes of this Section 3.6(b).

Section 3.7             Effective Time.  The Members agree that the provisions of this Article III shall apply from and after the Effective Time (as defined in Section 13.1).  Accordingly, GAAP PBT and any Profit or Losses of the Company in respect of the portion of calendar year 2010 prior to the Effective Time shall not be included in the calculations described in this Article III and shall be allocated solely to WWG and WWG2 in accordance with the Original Operating Agreement; provided, however, subject to Section 2.1.1(b) of the Purchase Agreement, no distributions shall be payable in respect of such GAAP PBT or Profits for such earlier period following the Effective Time.

ARTICLE IV

MANAGEMENT

Section 4.1             Management of the Company.

(a)           Except to the extent otherwise provided for herein, the powers of the Company shall be exercised by and under the authority of, and the business and affairs of the Company shall be managed under, the direction of the Managers of the Company. Notwithstanding the foregoing or any other provisions hereof to the contrary, until MDC Holdco or one of its Affiliates has purchased and paid for 100% of the Class B Units and Class C Units, the taking of any of the actions listed in clauses (i) through (x)below shall require the consent of both MDC Holdco and WWG.  The consent of MDC Holdco and WWG may be obtained by a vote at a meeting of the Members or by the written consent of MDC Holdco and WWG.

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(i)           a sale, lease or other disposition of all or substantially all or a significant part of the assets or business of the Company or any subsidiary thereof, except in connection with (x) a sale, lease or other disposition of all or substantially all or a significant part of the assets or business or stock (an “MDC Sale”) of MDC Partners Inc. (“MDC Partners”); (y) an MDC Financing (as defined in Section 4.1(e) hereof) or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing; or (z) any transfer by MDC Holdco or any of its Affiliates of their respective interest in the Company to another wholly-owned subsidiary of MDC Partners (an “MDC Internal Transfer”) (for purposes of this Agreement, in the event of any MDC Internal Transfer, the term MDC Holdco as used in this Agreement shall include any such transferee);

(ii)          a merger or consolidation of the Company with and into another Person or of another Person with and into the Company, except in connection with an MDC Sale, an MDC Internal Transfer or an MDC Financing;

(iii)         the authorization or issuance of additional Class A Units, Class B Units, Class C Units, Class D Units or other equity ownership interests in, or the granting of any other rights to participate in the proceeds of the sale of assets of the Company which are dilutive to WWG; or the incurring of debt for borrowed money in excess of the amount provided for in the approved annual operating budget or capital expenditure budget, except in connection with borrowings under the terms and conditions of the MDC Cash Management Program (and in compliance with Section 4.1(d) below);

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

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

(vi)         a relocation of the Company's primary offices outside of Broward County, Florida;

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

(viii)       any change in the name of the Company;

(ix)          entering into any business other than, or any transaction outside of, the normal business activities of the Company and any of its subsidiaries and related activities other than a MDC Internal Transfer;

(x)           the payment by the Company of any general management fee to any Member or one of such Member's Affiliates; or

(xi)          a fundamental change to the nature of the business of the Company and its subsidiaries, taken as a whole.

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

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

(d)           The parties hereto further agree that the operations of the Company and its subsidiaries shall be conducted (i) subject to Section 4.1(h) below, to participate in the overall cash management and banking program of MDC Holdco Partners as set forth on Schedule 4.1(d) hereto (the “MDC Cash Management Program”), and (ii) to comply on a timely basis with the financial reporting and budgeting procedures of MDC Holdco Partners as from time to time in effect, which procedures require the approval of an annual operating budget, capital expenditure budget and cash flow projections and require management of operating companies to seek approval prior to material deviations from such budgets.

(e)           Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the purchase price pursuant to the Purchase Agreement and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC Partners  and/or any of its Affiliates, in connection with its or any of its Affiliates’ current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon MDC Holdco’s Membership Interests; (x) pledge or grant a security interest in or otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under any Call to, or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders (as applicable and collectively, the “Lender”); and (z) have the Company and/or its subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an “MDC Financing”); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned by it.

(f)           MDC Partners shall cause sufficient working capital to be made available to the Company as shall be determined by the Board of Managers to be reasonably necessary to execute upon its approved annual operating and capital expenditure budgets, but in no event shall MDC Partners or any of its Affiliates be required to fund losses of the Company or any of its subsidiaries.  Such working capital shall be provided to the Company on terms consistent with the MDC Cash Management Program and accordingly, neither MDC Partners nor any of its Affiliates shall be required to provide working capital in the event that the consolidated cash balance of the Company in the MDC Cash Management Program is negative. The parties hereto further agree that the Company shall hereby adopt, and shall take appropriate steps to cause the employees of the Company to comply with, the Code of Conduct of MDC Partners, as the same may be amended from time to time.

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(g)           The Company shall comply with all applicable federal, state and local laws and the Company shall provide reasonable assistance to MDC Partners and its Affiliates in their compliance with all applicable federal, state and local laws, including without limitation, the provisions of the Sarbanes-Oxley Act of 2002, as amended from time to time.

(h)           The Company shall not take any of the actions described in Section 4.1(a) if such action would be reasonably be expected to have a material adverse effect on the value of the Class D Units that is disproportionate to the other Members unless (i) consented to by holders of a majority of the Class D Units or (ii) WWG and MDC Holdco have mutually agreed to such action in accordance with Section 4.1(a).

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

Section 4.3             Number and Qualifications of Managers.  As long as both of WWG own outstanding Units of the Company, there shall be five (5) Managers of the Company of which MDC Holdco shall be entitled to appoint three (3) Managers and WWG shall be entitled to appoint two (2) Managers (each Manager appointed by WWG must be a Principal or a full-time employee of the Company or one of its subsidiaries); thereafter the Managers shall be elected in accordance with Section 4.4.  No decrease in the number of Managers shall have the effect of shortening the term of any incumbent Manager.  None of the Managers need be Members of the Company or residents of the State of Delaware.  The initial designees of MDC Holdco are Rob Dickson, Michael Sabatino and David Doft.  The initial designees of WWG are Daniel K. Gregory and Stephen Groth.

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

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Section 4.5             Removal; Filling of Vacancies.  As long as WWG owns outstanding Units of the Company, only MDC Holdco can remove and replace its appointed Managers and only WWG can remove and replace its appointed Managers.  Following such time, the Members by the required vote as set forth in Section 5.5 shall be entitled to remove any Manager and to elect for the unexpired term of such Manager so removed another individual.  Upon the resignation, retirement or death of any of the Managers of the Company, subject to Section 4.3, the Members by the required vote as set forth in Section 5.5, shall be entitled to elect another Person for the unexpired term of such Manager.

Section 4.6             Place of Meetings.  Meetings of the Managers, annual, regular or special, may be held either in New York, NY or Fort Lauderdale, Florida, unless otherwise agreed to by the Managers (including, for as long as WWG own outstanding Units of the Company, at least one Manager appointed by MDC Holdco and one Manager appointed by WWG).

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

Section 4.8             Regular Meetings.  The Managers shall notify each of the Members of regular meetings of the Managers, which meetings shall be held at such times and places as may be fixed from time to time by resolution adopted by the Managers.  Except as otherwise provided by statute, any and all business may be transacted at any regular meeting.  The Managers shall be given reasonable notice of the date, time and place of any scheduled regular meeting.

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

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

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

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

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

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

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

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

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

ARTICLE V

MEETINGS OF MEMBERS

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

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

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

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

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

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

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

ARTICLE VI

OFFICERS

Section 6.1             Officers.  The Managers may designate one or more individuals (who may or may not be Managers) to serve as officers of the Company.  The Company shall have such officers as the Managers may from time to time determine.  Any two or more offices may be held by the same individual.  An officer of the Company shall have the duties and responsibilities consistent with his position and shall perform such duties and responsibilities as shall from time to time be prescribed or delegated to him by the Managers, subject to the terms of any employment agreement with the Company or one of its subsidiaries to which such officer may be a party. The parties hereto hereby initially designate those persons identified on Schedule 6.1 as officers of the Company.

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ARTICLE VII

ACCOUNTING AND TAX MATTERS; REPORTS; BANKING

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

Section 7.2         Capital Accounts.  An individual capital account (the “Capital Account”) shall be maintained by the Company for each Member as provided below:

(a)          Each Member's Capital Contributions when made shall be credited to such Member’s Capital Account.  The Capital Account of each Member shall, except as otherwise provided in this Agreement, be (i) credited with the amount of cash and the fair market value of any property contributed to the Company by such Member or its predecessor in interest (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), (ii) credited with the amount of any Profits allocated to such Member or its predecessor in interest for federal income tax purposes, (iii) debited by the amount of any Losses allocated to such Member or its predecessor in interest for federal income tax purposes, (iv) debited by such Member’s (or such predecessor’s) allocable share of expenditures of the Company not deductible in computing the Company’s taxable income and not properly chargeable as capital expenditures, including any nondeductible book amortization of capitalized costs, and (v) debited by the amount of cash or the fair market value of any property distributed to such Member its predecessor in interest (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code).  Immediately prior to any distribution of property by the Company, the Members’ Capital Accounts shall be adjusted, as required by Treasury Regulation 1.704-1(b)(2).

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE VIII

COVENANTS OF THE MEMBERS

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

 ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION

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

 

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Section 9.2         Liquidation.  Upon dissolution of the Company, the Members shall appoint a Manager as liquidating trustee, who shall immediately commence to wind up the Company’s affairs; provided, however, that a reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the satisfaction of liabilities to creditors so as to enable the Members to minimize the normal losses attendant upon a liquidation.  After making payment or provision for all debts and liabilities of the Company, if determined to be necessary under the circumstances by the Managers, the Members’ Capital Accounts shall be adjusted by debiting or crediting each Member’s Capital Account with its respective share of the hypothetical gains or losses resulting from the assumed sale of all remaining assets of the Company for cash at their respective fair market values as of the date of dissolution of the Company in the same manner as gains and losses on actual sales of such properties are allocated under Section 3.3, Section 3.5 and Section 3.6 hereof.  The liquidating trustee shall then by payment of cash or property make distributions to the Members in accordance with their respective Capital Accounts.  Any distribution to the Members in liquidation of the Company shall be made by the later of the end of the taxable year in which the liquidation occurs or 90 days after the date of such liquidation.  Notwithstanding any provisions in this Agreement to the contrary, no Member shall be obligated to restore a deficit balance in its Capital Account at any time.  The proceeds of liquidation shall be distributed, as realized, in the manner provided in the Act, subject to the applicable provisions of Section 3.4.  Subject to the immediately following sentence, the Members shall continue to share Profits and Losses during liquidation in the same proportions, as specified in Sections 3.3, 3.5 and 3.6 hereof, as before liquidation.  Notwithstanding anything to the contrary herein, the Managers shall in their good faith discretion (and in a manner which reflects the economic interests of the Members consistent with the intent of the transactions set forth in this Agreement and the Purchase Agreement) allocate items of income, gain, deduction, and loss for the year of liquidation (and for earlier years if necessary to the extent then possible) so as to give Members positive Capital Account balances, immediately before the distributions provided for in the second preceding sentence, equal to the amount (if any) that would be distributed to Members if distributions were made in accordance with Section 3.4(a) and (b) hereof.  In the event that such Manager is unable to perform in his capacity as liquidating trustee due to bankruptcy, dissolution, death, adjudicated incompetency or any other termination of such Manager as an entity, the liquidating trustee shall be a Person approved by the unanimous vote of the Membership Interests.  With respect to this provision, the term “liquidation” shall have the same meaning as set forth in Treasury Regulation §1.704-1(b)(2)(ii) as in effect at such time, provided that the events specified in Section 10 shall not be deemed a “liquidation”.

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

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

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ARTICLE X

RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS

Section 10.1       Assignment by the Members.  For so long as WWG owns Units, no Class A Unit shall be sold or transferred without the consent of WWG, except in connection with (i) an MDC Sale, (ii) an MDC Holdco Internal Transfer, (iii) a sale described in Section 10.2(c) or (iv) an MDC Financing or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing.  Except as set forth in Section 10.2(c), no Class B Unit, Class C Unit or Class D Unit shall be sold, transferred, assigned, pledged or otherwise disposed of, in whole or in part, without the written consent of MDC Holdco to such transfer (or, in the case of a Class D Unit, in accordance with the Profits Interest Plan).  Any purported transfer by WWG, WWG2 or other permitted holder of Class B Units, Class C Units or Class D Units of all or any of its Units, any purported assignment by WWG, WWG2 or other permitted holders of Class B Units, Class C Units or Class D Units of any of its rights under this Agreement, and any purported delegation by WWG, WWG2 or other permitted holders of Class B Units, Class C Units or Class D Units of any of its duties or obligations under this Agreement (which shall in no way relieve WWG, WWG2 or such other permitted holder of Class B Units, Class C Units or Class D Units of responsibility for the performance of any such duties and obligations), in contravention of any of the provisions of this Agreement, will be null and void ab initio and of no force and effect.  Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the indirect sale of Units as part of any transaction involving a change of control of MDC Partners or its successors.

Section 10.2       Put Rights of WWG/Call Rights of MDC Holdco.

(a)         MDC Holdco Call of Class B Units.  At any time on or after March 1, 2013 (the "Call Period"), MDC Holdco shall have the right (but not the obligation) to require WWG and WWG2 to sell to it (a "Call"), all of the remaining Class B Units owned by WWG and WWG2.  MDC may exercise the Call at any time during the Call Period, and may do so by delivering written notice of exercise (a "Call Exercise Notice") to WWG and WWG2 during the Call Period.   The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

(b)         MDC Holdco Call of Class C Units.  At any time during the Call Period, MDC Holdco shall also have the right (but not the obligation) to exercise a Call for all of the remaining Class C Units owned by WWG.  MDC may exercise the Call at any time  during the Call Period, and may do so by delivering a Call Exercise Notice to WWG during the Call Period.   The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

(c)         WWG Sale Request. At any time on or after March 1, 2015 (or in the event of an Acquisition Failure Event (as defined in Section 3.6), at any time on or after March 1, 2013) (the “Sale Request Period”), in the event that MDC Holdco shall not have exercised its Call right with respect to all of WWG’s Class B Units or Class C Units, WWG shall have the right (but not the obligation) to request that MDC Holdco to purchase from it and WWG2 (a “Sale Request”) any or all of their remaining Class B Units and Class C Units.  WWG may make a Sale Request by delivering written notice (a “Sale Request Notice”) to MDC Holdco at any time during the applicable Sale Request Period; provided that WWG may not make more than one Sale Request in any 12-month period.  MDC Holdco shall have thirty (30) days following receipt of the Sale Request Notice to accept WWG’s Sale Request, which acceptance shall be exercised by delivering written notice (a “Sale Request Acceptance Notice”) to WWG within such thirty day period.  If such Sale Request Acceptance Notice is delivered (an “Accepted Sale Request”), the Class B Units and/or Class C Units shall be sold to MDC Holdco in accordance with the provisions set forth in Section 10.4, with the date of delivery of the Sale Request Acceptance Notice being the exercise date.  In the event that MDC Holdco shall not have delivered a Sale Request Acceptance Notice during such thirty (30) day period, then (i) WWG shall have the right for twelve (12) months to solicit bona-fide offers for a sale of its Class B Units and Class C Units, WWG’s Class B Units and of the Class D Units by the holders of such Class D Units, to an unaffiliated third party (the “Prospective Purchaser”), (ii) upon the receipt of such offer, WWG shall deliver written notice (a “Third Party Offer Notice”) of such offer to MDC Holdco, which notice shall identify the Prospective Purchaser and shall describe the material terms of such offer, (iii) for a period of ten (10) days after receipt of the Third Party Offer Notice, MDC Holdco shall have the right to deliver a Sale Request Acceptance Notice and (x) if such Sale Request Acceptance Notice is delivered, MDC Holdco shall acquire the Class B and/or Class C Units as described above and no Member shall be permitted to consummate a sale to the Prospective Purchaser or (y) if a Sale Request Acceptance Notice is not delivered, WWG shall, for a period of one hundred twenty (120) days, be permitted to consummate the sale of its Class B Units and/or Class C Units, WWG2 and the holders of Class D Units shall be permitted to sell their Class B Units and Class D Units, respectively, to such Prospective Purchaser, and WWG shall have the right to require MDC Holdco to sell its Units to such Prospective Purchaser on substantially the same terms and conditions (taking into account the economic differences, if any, between Units) provided that MDC Holdco is able to obtain all necessary approvals, including the approval of its lenders.

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Section 10.3         Binding Obligations Upon Exercise of a Call or an Accepted Sale Request.  Upon the proper delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, WWG and WWG2 shall be obligated to sell to MDC Holdco, and MDC Holdco shall be obligated to purchase from WWG and WWG2, the Units subject to the Call or Accepted Sale Request, as applicable, pursuant to the terms of this Article X.

Section 10.4         Put/Call Purchase Price.

(a)           Calculation/ Payment of the Put/Call Purchase Price for Class B Units.  In connection with the exercise of a Call under Section 10.2(a) or an Accepted Sale Request for Class B Units, MDC Holdco shall calculate and pay to WWG and WWG2, in the aggregate (payable to them pro rata in accordance with the number of Class B Units held by them), the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class B Put/Call Purchase Price"):

(i)         within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “First Class B Payment”) equal to:

             AP x (4.0 x (Adjusted PBT for YP-1) –Acquisition Liabilities)

                3

(ii)         within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “Second Class B Payment”) equal to:

{AP x (4.0 x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP)) – Acquisition Liabilities)} – First Class B Payment

               3

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(iii)         within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the “Final Class B Payment”)  equal to:

(x)  the result of:

AP x (AM x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP) + (Adjusted PBT for YP+1)) – Acquisition Liabilities)

3

minus (y) (First Class B Payment + Second Class B Payment)

(b)          Calculation/ Payment of the Put/Call Purchase Price for Class C Units.  In connection with the exercise of a Call under Section 10.2(b) or an Accepted Sale Request for Class C Units, MDC Holdco shall calculate and pay to WWG the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class C Put/Call Purchase Price"; the Class B Put/Call Purchase Price and the Class C Put/Call Purchase Price are referred to in this Agreement as a “Put/Call Purchase Price”):

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “First Class C Payment”) equal to:

              AP x (4.0 x (Adjusted PBT for YP-1) –Acquisition Liabilities)

               3

(ii)          within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “Second Class C Payment”) equal to:

{AP x (4.0 x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP)) – Acquisition Liabilities)} – First Class C Payment

               3

(iii)         within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the “Final Class C Payment”)  equal to:

(x)  the result of:

AP x (AM x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP) + (Adjusted PBT for YP+1)) – Acquisition Liabilities)

3

minus (y) (First Class C Payment + Second Class C Payment)

 

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; provided, however, for purposes of making each of the calculations in this Section 10.4(b), in no event shall any of Adjusted PBT for YP-1, Adjusted PBT for YP or Adjusted PBT for YP+1 be greater than PBT Limit; provided, further than the Class C Put/Call Purchase Price shall not, with respect to any Call or Accepted Sale Request, exceed the result of (i) AP multiplied by (ii) AM multiplied by (iii) the PBT Limit.

(c)          Additional Put/Call Purchase Price for Class C Units.  In connection with the exercise of a Call under Section 10.2(b) or an Accepted Sale Request for Class C Units, MDC Holdco shall calculate and pay to WWG, in respect of its Class C Units, the following additional amounts of Put/Call Purchase Price, to the extent applicable:

With respect to unissued Class D Units as of the delivery of a Call Exercise Notice or a Sale Request Acceptance Notice:

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “First True-Up Payment”) equal to:

(x)          the result of:

(Unissued AP divided by AP)

multiplied by

(y)           the result of:

           [AP x (4.0 x (Adjusted PBT for YP-1) –Acquisition Liabilities)] – First Class C Payment

             3

(ii)          within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Put/Call Closing Date, an amount (the “Second True-Up Payment”) equal to:

(x)          the result of:

(Unissued AP divided by AP)

multiplied by

(y)          the result of:

(A)          the result of

{AP x (4.0 x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP)) – Acquisition Liabilities)}

               3

minus

(B)          the result of

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(First Class C Payment + Second Class C Payment)

with the result of (x) multiplied by (y), then reduced by

(z)          the First True-Up Payment

(iii)          within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the “Third True-Up Payment”)  equal to:

(x)          the result of:

(Unissued AP divided by AP)

multiplied by

(y)         the result of:

(A)          the result of

AP x (AM x ((Adjusted PBT for YP-1) + (Adjusted PBT for YP) + (Adjusted PBT for YP+1)) – Acquisition Liabilities)

3

minus

(B)          the result of

(First Class C Payment + Second Class C Payment + Final Class C Payment)

with the result of (x) multiplied by (y), then reduced by

(z)          (First True-Up Payment + Second True-Up Payment)

With respect to Class D Units that are purchased by MDC Holdco after the delivery of a Call Exercise Notice or a Sale Request Acceptance Notice in respect of the Class C Units:

(iv)         within 7 calendar days following the Final Payment of Put/Call Purchase Price (each as defined in the applicable Restricted Unit Award Agreement for a holder of Class D Units) for any Call pursuant to Section 2(f) of the Restricted Unit Award Agreement, or any Put or Call involving a purchase by MDC Holdco directly from the Participant (as defined in the Restricted Unit Award Agreement) for which the Payout Factor (as defined in the Restricted Unit Award Agreement) is less than 100%, in each case that occurs after the delivery of a Call Exercise Notice or a Sale Request Acceptance Notice for the Class C Units, MDC Holdco shall pay the holders of Class C Units the difference between (x) the amount that such holder of Class D Units would have received under their Restricted Unit Award Agreement had such Put or Call been calculated as a Call under Section 2(e) of the Restricted Unit Award Agreement and the Payout Factor were 100% and (y) the total Put/Call Purchase Price received by such holder of Class D Units (collectively, the payments made to holders of Class C Units under this clause (iv), the “Final True-Up Payments”).

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(d)          If any calculation of the Put/Call Purchase Price results in an amount which is equal to less than zero, such Put/Call Purchase Price payment shall be deemed to be zero and accordingly the seller of the Units pursuant to such Put or Call shall not be under any obligation to pay such negative amount (expressed as a positive number).

(e)          Other Definitions.

(i)          “Acquisition PBT” for any period, for any Company Acquisition, shall mean the PBT associated with such Company Acquisition for such period; for the avoidance of doubt, interest accruing on the Acquisition Loans in respect of such Company Acquisition shall not be treated as an expense in the calculation of such Company Acquisition’s Acquisition PBT.

(ii)         “Acquisition Liabilities” shall mean the sum of (x) the outstanding balance of all Acquisition Loans as of the Put/Call Closing Date and (y) the sum of all Deferred Acquisition Consideration Liabilities for all Company Acquisitions (net of any cash reserve associated with such liabilities as described in Section 3.6(b)) as of the Put/Call Closing Date; provided, however, for purposes of calculating the Final Class B Payment, the Final Class C Payment or the Third True-Up Payment, the Deferred Acquisition Consideration Liabilities in clause (y) shall be measured as of December 31 of YP+1, but shall add back to such amount any payments of deferred acquisition consideration actually made between the Put/Call Closing Date and December 31 of YP +1 to the extent such payments were satisfied by a source other than the associated cash reserve.

(iii)        “Adjusted PBT” for any year shall mean (x) the PBT for such year exclusive of all Acquisition PBT plus (y) for each Company Acquisition, the Annualized Acquisition PBT for such Company Acquisition.

 (iv)       "AM" shall mean the applicable multiple and equal:

(w)        4.0, if the Average Annual PBT Growth Rate is less than or equal to 5%;

(x)          4.25, if the Average Annual PBT Growth Rate is greater than 5%, but less than or equal to 10%;

(y)         4.5, if the Average Annual PBT Growth Rate is greater than 10%, but less than or equal to 15%;

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(z)          5.0, if the Average Annual PBT Growth Rate is greater than 15%;

; provided, however, the value of AM determined above shall be further adjusted based on the following:

(A)         if Revenue for any Client Group for the period YP and YP+1 exceeds 30% of the total Revenue of the Company during such period, then AM shall be reduced by 0.5; provided, however, AM shall not be reduced to lower than 4.5 as a result of such reduction; or

(B)         if no Client Group has generated Revenue for the Company during the period YP and YP+1 greater than or equal to 30% of the total Revenue of the Company during such period, then AM shall be increased by 0.5.

For purposes of making the calculation described in clauses (A) and (B) above, Revenue shall be deemed to include Revenue from any Company Acquisition on a pro forma basis for any period during YP or YP+1 that occurred prior to the consummation of such Company Acquisition.

(v)          “Annualized Acquisition PBT” shall mean, with respect to any Company Acquisition, (x) the total Acquisition PBT for such Company Acquisition for the applicable portion of the Measuring Period in which the Company Acquisition was included in the Company’s consolidated results, divided by (y) the number of months during the Measuring Period in which the Company Acquisition was included in the Company’s consolidated results, with such result multiplied by (z) 12.

 (vi)        "Applicable Percentage" or "AP" shall mean (x) the number of Class B Units or Class C Units, as the case may be, being sold pursuant to a Call or an Accepted Sale Request, divided by (y) the total number of authorized Class A Units, Class B Units and Class C Units.

(vii)        "Average Annual PBT Growth Rate" shall mean, for purposes of calculating any Put/Call Purchase Price, the result of (x) the sum of (1) PBT for YP+1 divided by PBT for YP, and (2) PBT for YP divided by PBT for YP-1, multiplied by (y) 50%; provided, however, for purposes of making this calculation Acquisition Company PBT shall only be included in PBT in the following manner:

(A)         if the Company Acquisition occurred prior to calendar year YP-1, then it shall be included for all periods YP-1, YP and YP+1;

(B)         if the Company Acquisition occurred during the first six months of calendar year YP-1:  (x) Acquisition Company PBT shall be calculated on a pro forma basis for YP-1 to include the portion of YP-1 pre-acquisition, and (y) Acquisition PBT shall be included for periods YP and YP+1;

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(C)          if the Company Acquisition occurred during the last six months of calendar year YP-1: (x) no Acquisition Company PBT shall be included in clause (1) above for YP-1 or YP; and (y) Acquisition PBT shall be included for purposes of clause (2) above for periods YP and YP+1;

(D)          if the Company Acquisition occurred during the first six months of calendar year YP:  (x) no Acquisition Company PBT shall be included in clause (1) above for YP-1 or YP; (y) for purposes of clause (2) above, Acquisition Company PBT for YP shall be calculated and included on a pro forma basis to include the portion of YP pre-acquisition, and (z) Acquisition PBT shall be included for period YP+1; or

(E)          if the Company Acquisition occurred during the last six months of calendar year YP or during YP+1, no Acquisition Company PBT shall be included for any of YP-1, YP or YP+1.

(viii)      “Client Group” for any client of the Company, shall mean such client and each other client of the Company that is part of the same group of companies that  conducts business through more than one entity, division or operating unit, whether or not separately incorporated.

(ix)         “Deferred Acquisition Consideration Liabilities” shall mean, as of any date, the current estimated deferred acquisition consideration (including earn-outs) accounted for in the financial statements of MDC Partners in respect of any Company Acquisition.

(x)         "Measuring Period" shall mean the calendar years included in the applicable Put/Call Purchase Price calculation under Section 10.4(a), 10.4(b) or 10.4 (c)(i)-(iii) above.

(xi)         “PBT” for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal and state income taxes for such period, determined in accordance with GAAP; provided, however, in making the foregoing determinations:

(1)          neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or any predecessor entity), is the named beneficiary or is otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

41

(2)          intercompany management fees charged by MDC Holdco or any of its Affiliates (as defined in Section 13.1 hereof) to the Company or any of its subsidiaries, shall not be treated as an expense, unless such fees have been approved by the parties in accordance with this Agreement, and such fees replace an expense that would otherwise be paid by the Company to a third party;

(3)          any Losses (as defined in Section 7.2 of the Purchase Agreement) of a Purchaser Indemnified Party (as defined in Section 7.2 of the Purchase Agreement) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 of the Purchase Agreement and which are fully assumed by WWG and/or the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(4)          any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3 of the Purchase Agreement) shall not be treated as an expense;

(5)          there shall be no charge against income for the payment or accrual of any component of any Purchase Price payment pursuant to the Purchase Agreement or any component of any Put/Call Purchase Price payment;

(6)          the fees and disbursements of the Company’s attorneys, accountants and financial advisors incurred prior to or after the Closing (as defined in Section 2.3 of the Purchase Agreement) in connection with the formation and organization of the Company and the Subsidiaries and the negotiation, preparation and execution of the Purchase Agreement and the other documents delivered at such Closing that have either (x) been expensed and paid prior to such Closing or (y) accrued for on the Closing Balance Sheet (as defined in the Purchase Agreement), shall not be treated as an expense;

(7)          the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company’s direct or indirect ownership in such subsidiary;

(8)          any extraordinary or non-recurring gains or losses, gains or losses from the sale of any capital assets, and any gains or losses recognized by the Company or any of its subsidiaries in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries shall be excluded from income;

(9)          the fees and expenses of (1) the Accountants in preparing the Special Determination or any Annual Determination (each as defined in the Purchase Agreement) or (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder, in excess of $50,000 in any calendar year, shall not be treated as an expense; and

42

(10)        in the event that the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger or similar transaction (an “Acquired Business”) on or after the date of this Agreement, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business unless its inclusion has been agreed to by the Representative (as defined in the Purchase Agreement), in which case it shall be included in the manner described within the definitions of “Acquisition PBT”, “Adjusted PBT” and “Average Annual PBT Growth Rate” in this Section 10.4(e);

(11)        any transaction expenses incurred in connection with any potential or completed acquisition shall be included as an expense;

(12)        any write-off or amortization or depreciation of goodwill or other intangibles arising out of the purchase of the Purchased Interests (as defined in the Purchase Agreement) pursuant to the Purchase Agreement shall not be treated as an expense;

(13)        there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price (as defined in the Purchase Agreement);

(14)        the fees and expenses of Grant Thornton LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010, up to $85,000 shall not be treated as an expense for purposes of 2010 PBT;

(14)        any distribution by WWG of any Purchase Price proceeds to its members shall not be treated as an expense;

(15)        any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense, unless the termination of such Principal's employment was recommended and initiated by the Representative (as defined in the Purchase Agreement);

(16)        PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses; and

(17)        solely with respect to the calculation of 2010 PBT, an amount equal to $459,129 shall not be treated as an expense.

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 (xii)        “PBT Limit” shall mean 2009 PBT (as defined in Section 2.1.3 of the Purchase Agreement).

 (xiii)       "Revenues" during each relevant calendar year shall mean the commissions and fees, mark-ups and hourly charges earned by the Company and its subsidiaries during such calendar year for work generated or performed by employees or contractors and charged to clients determined in accordance with GAAP; provided, however, Revenues shall not include any pass-through of third party costs or direct billings of expenses where the Company and its subsidiaries acts as an agent for its clients.

(xiv)        "Unissued AP" shall mean (x) the number of authorized Class D Units that are unissued as of the date that a Call Exercise Notice or a Sale Request Acceptance Notice in respect of the Class C Units has been delivered, divided by (y) 80, with the result multiplied by (z) 8.0%.

(xv)         "YP" shall mean the calendar year in which the respective Call was exercised by proper delivery of an Exercise Notice or the Accepted Sale Request occurred.

(xvi)        "YP-1" shall mean the calendar year immediately preceding YP.

(xvii)       "YP+1" shall mean the calendar year immediately following YP.

(f)           Accounting Procedures.

(i)           Upon exercise of each Call or Accepted Sale Request, MDC Holdco may prepare or, at its discretion, may cause BDO Seidman LLP or other independent accountant of national standing (the "Accountants") to prepare, in accordance with GAAP, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business on December 31 of each year contained within the Measuring Period, and a related consolidated statement of income of the Company and its subsidiaries, if any, for the relevant calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth for the period under examination the applicable calculation of PBT, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4 (the "Annual Determination").  MDC Holdco shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements and to determine the scope of such audit.  MDC Holdco shall instruct the Accountants to deliver a copy of each such Annual Determination to WWG not later than 120 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of MDC Holdco.

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

(iii)           In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 10.4, then WWG and MDC Holdco agree to select another mutually acceptable accounting firm to perform the services to be performed under this Section 10.4 by the Independent Auditors.  If WWG and MDC Holdco fail to select the Independent Auditors as required by clause (i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either WWG or MDC Holdco may request the American Arbitration Association in New York City (the "AAA") to appoint an independent firm of certified public accountants to perform the services required under this Section 10.4 by the Independent Auditors.  MDC Holdco, on the one hand, and WWG, on the other hand, shall share the fees of the AAA equally.  For purposes of this Section 10.4(f) the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this clause (iii).

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

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(v)           The books and records of the Company and its subsidiaries shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto and their representatives, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 10.4.  WWG, on the one hand, and MDC Holdco, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by or for them to support a position that is contrary to the position taken by the other party. Upon the request by WWG, MDC Holdco shall request that the Accountants make their work papers available to WWG and its representatives after the completion of any audit of the financial statements of the Company and its subsidiaries and/or to verify the calculations set forth in any Annual Determination (in each case during normal business hours upon reasonable advance notice at the principal offices of the Accountants); provided, however, it is understood that the decision to make such work papers available is solely that of the Accountants.

(g)           Closing.  The closing for each purchase and sale of Units (a “Put/Call Closing”) pursuant to a Call or Accepted Sale Request, as applicable, shall be held at the offices of the Company within 30 days after the delivery of an Exercise Notice or Sale Request Acceptance Notice.  The date on which the respective Put/Call Closing takes place is referred to in this Agreement as its “Put/Call Closing Date”.  At each Put/Call Closing, the parties shall execute an Assignment of Unit Agreement in form and substance reasonably acceptable to MDC Holdco and WWG and an amendment to this Agreement in accordance with Section 14.4 reflecting such transfer and the reallocated Units (including the related portion of the Capital Account).  The transfer of any Units pursuant to this Section 10.4 shall be free and clear of all claims, liens and encumbrances other than as created by the provisions of this Agreement.  Prior to any Put/Call Closing, the Company and WWG shall use their best efforts to obtain any required governmental or regulatory approval or approvals.  MDC Holdco shall have the right to postpone any scheduled Put/Call Closing until any such governmental or regulatory approval is obtained.

(h)           Put/Call Purchase Price Payment.  Payment of each component of the Put/Call Purchase Price shall be made by MDC Holdco in cash by direct wire transfer to such account as WWG may direct by written notice to the Purchaser given pursuant to this Agreement.  Each component of the Put/Call Purchase Price shall be deemed to include imputed interest to the extent required by the Code.

(i)           Effect of Events During Period Class B Units and Class C Units Are Issued.  The parties hereto understand and agree that under the terms of each Principal’s Employment Agreement with the Company, such Principal may be terminated for "Cause" or "without Cause" (as such terms are defined in his respective Employment Agreement).  Accordingly, each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any subsidiary of the Company, no party to this Agreement or any Person deriving rights through any such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary of the Company (x) constitutes a breach by MDC Holdco or any of its Affiliates of this Agreement, (y) resulted in an adverse effect on any Put/Call Purchase Price payment under this Agreement forming the basis for a claim against MDC Holdco or any of its Affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 10.4(f) hereof.  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect the right of WWG or WWG2 to receive any Put/Call Purchase Price payment under this Agreement.

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(j)           MDC Partners Guaranty.  MDC Partners hereby agrees to pay, or cause MDC Holdco to pay, when due, each payment of Put/Call Purchase Price required pursuant to this Article X.

ARTICLE XI

INDEMNIFICATION

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

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

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

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

Section 11.5        Definitions.  For purposes of this Article XI:

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

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

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

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

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

Section 11.7        Nonexclusivity of Rights.  The right to indemnification and the advancement and payment of expenses conferred in this Article XI shall not be exclusive of any other right that a Manager or other Person indemnified pursuant hereto may have or hereafter acquire under any law (common or statutory), provision of the Certificate or this Agreement or otherwise.

ARTICLE XII

ADDITIONAL AGREEMENTS

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

ARTICLE XIII

OTHER DEFINITIONS

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

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

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

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

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

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"Affiliate" of any Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

"Business Day" shall mean any day on which commercial banks are not authorized or required to close in New York, NY.

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

"Cash Flow" shall mean the consolidated amount of cash in respect of any calendar year of all of the Company and its subsidiaries that the Board of Managers in its good faith discretion believes is available for distribution to Members of the Company; provided, however, during calendar years 2010-2012, Cash Flow must be at least an amount necessary to satisfy the distribution required pursuant to Section 3.4(a)(i).

"Class A Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(i) to holders of Class A Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class A Units of GAAP PBT under Section 3.5(a) and Section 3.6(b) for such prior years.

“Class B Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class B Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class B Units of GAAP PBT under Section 3.5(a) for such prior years.

“Class C Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class C Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class C Units of GAAP PBT under Section 3.5(a) for such prior years.

“Class D Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class D Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class D Units of GAAP PBT under Section 3.5(a) for such prior years.

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

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

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

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"Effective Time" shall mean March 1, 2010.

"GAAP PBT" shall mean, for any calendar (or partial) year, the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal and state income taxes for such period, determined in accordance with GAAP.

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

(i)          Subject to the final sentence of this definition, the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by reference to Section 3.1(b), and as set forth in Section 8 to each of the Conveyance Documents.

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

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

(iv)        The Gross Asset Value of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (vi) of the definition of Profits and Losses herein; provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the extent the Managers determine that an adjustment pursuant to clause (ii) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iv).

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

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

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

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

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

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

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

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

"Profits and Losses", shall mean, for each fiscal year, an amount equal to the Company’s taxable income or loss for such fiscal year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

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

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

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

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

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

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

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

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 3.3(e) shall be determined by applying rules analogous to those set forth in clauses (i) through (vii) above.

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

"Units" shall mean Class A Units, Class B Units, Class C Units or Class D Units, as applicable.

ARTICLE XIV

MISCELLANEOUS

Section 14.1         Manner of Giving Notice.  Whenever under the provisions of the Act, the Certificate or this Agreement, notice is required to be given to the Company, any Member or Manager of the Company, and no provision is made as to how such notice shall be given, any such notice to be given hereunder shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next Business Day if sent by facsimile transmission (if transmission is electronically confirmed) or by a prepaid overnight courier service, and in each case at the respective addresses or numbers set forth below or such other address or number as such party may have fixed by notice:

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If to MDC Holdco or MDC Partners, to:

MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:  Rob Dickson

Fax:  (416) 960-9555

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

Fax:  (212) 937-4365

If to WWG, to:

c/o TEAM Enterprises, Inc.

110 E. Broward Blvd., Suite 2450

Fort Lauderdale, FL 33301

Attention: Daniel K. Gregory

Fax:

with a copy to:

Jeffrey M. Ostrow, Esq.

Kopelowitz Ostrow

220 SW 1st Avenue, Suite 1200

Fort Lauderdale, FL 33301

Email: ostrow@kolawyers.com

Fax: (954) 525-4300

If to the Company, to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

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Attention:  Rob Dickson

Fax:  (416) 960-9555

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

Fax:  (212) 937-4365

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

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

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

Section 14.4        Amendment or Modification.  The power to adopt, alter, amend or repeal this Agreement is vested solely in the Members. Except for the amendments contemplated by Sections 2.1, 2.2(d) and 10.4(g), and subject to the provisions of Section 4.1, this Agreement may be altered or amended only by the unanimous vote or unanimous written consent of MDC Holdco and WWG. The Managers may not adopt, alter, amend or repeal any provision of this Agreement.

Section 14.5        Binding Effect.  Subject to the restrictions on transfer and assignment set forth in Article X of this Agreement, this Agreement is binding on and inures to the benefit of the Members and their respective successors and permitted assigns, including without limitation, any Lender who exercises a default remedy under any agreement entered into in connection with an MDC Financing.

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

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

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

Section 14.9        Currency.  Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.  All payments made hereunder shall be made in United States Dollars.

*                      *                      *

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

MDC ACQUISITION INC.
By:	/s/
	Name: Michael Sabatino
	Title: President
WWG, LLC
By:	/s/
	Name:    Daniel K. Gregory
	Title:      Managing Member
WWG2, LLC
By:	/s/
	Name:    Daniel K. Gregory
	Title:      Managing Member
TEAM HOLDINGS LLC
By:	/s/
	Name: Daniel K. Gregory
	Title: Manager
MDC PARTNERS INC.
(solely with respect to Section 10.4(j))
By:	/s/
	Name: Mitchell Gendel
	Title: General Counsel and Corporate Secretary

 

i

EX-10.3.1 6 v183284_ex10-3x1.htm

Exhibit 10.3.1

MEMBERSHIP UNIT PURCHASE AGREEMENT

by and among

MF + P ACQUISITION CO.,

INTEGRATED MEDIA SOLUTIONS, LLC

ROBERT INGRAM,

DESIREE DU MONT

and

RON CORVINO

Dated May 6, 2010 and effective as of April 30, 2010

MEMBERSHIP UNIT PURCHASE AGREEMENT

MEMBERSHIP UNIT PURCHASE AGREEMENT (this "Agreement") dated May 6, 2010 and effective as of the close of business on April 30, 2010 (the "Effective Date") , by and among MF + P ACQUISITION CO., a Delaware corporation (the "Purchaser"), INTEGRATED MEDIA SOLUTIONS, LLC, a New York limited liability company ("IMS Holdco"), ROBERT INGRAM ("Ingram"), DESIREE DU MONT ("Desiree"), RON CORVINO ("Ron"; and together with Ingram and Desiree, individually a "Principal" and collectively, the "Principals"), and solely for purposes of Sections 7.6.6 and 8.19, MDC Partners Inc., a corporation existing under the laws of Canada ("MDC Partners").

WITNESSETH:

WHEREAS, IMS Holdco formed Integrated Media Solutions Partners LLC, a Delaware limited liability company (the "Company"), with IMS Holdco as its initial member owning 100% of the issued and outstanding membership units in the Company (the "Membership Units");

WHEREAS, prior to the execution and delivery of this Agreement, IMS Holdco contributed substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business, to the Company pursuant to a General Assignment, Bill of Sale and Assumption Agreement attached hereto as Exhibit A (the "Conveyance Document");

WHEREAS, IMS Holdco desires to sell, and the Purchaser desires to purchase, 75% of the Membership Units to be designated as "Class A Units" (the "Purchased Units"), pursuant to the provisions of this Agreement such that after giving effect to such purchase, the Membership Units will be owned as follows: the Purchaser – 75%; IMS Holdco – 25%;

WHEREAS, simultaneously with the execution and delivery of this Agreement, the Purchaser, IMS Holdco and the Company are executing and delivering an Amended and Restated Limited Liability Company Agreement of the Company (the "Operating Agreement"), attached hereto as Exhibit B;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE I

SALE OF THE PURCHASED UNITS

Section 1.1       Sale of the Purchased Units.   Subject to the terms and conditions herein stated, IMS Holdco agrees to sell, assign, transfer and deliver to the Purchaser as of the Effective Date (as defined in Section 2.2), and the Purchaser agrees to purchase from IMS Holdco as of the Effective Date, the Purchased Units.

ARTICLE II

PURCHASE PRICE AND CLOSING

Section 2.1   Purchase Price; Working Capital Adjustment.

2.1.1    Purchase Price.  In full consideration for the purchase by the Purchaser of the Purchased Units, the purchase price (the "Purchase Price"), shall be calculated and paid by the Purchaser to IMS Holdco, as set forth below (capitalized terms used in this Article II and not otherwise defined, shall have the meaning ascribed to such terms in Sections 2.1.2  below):

(a)       Closing Payment.  At the Closing, the Purchaser shall pay to IMS Holdco an amount equal to $20,000,000 ("CP").

(b)       Working Capital Payment.  If the Effective Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.3, is less than the Target Working Capital (such difference being referred to herein as the "Working Capital Shortfall"), then within five business days after the Special Determination (as defined in Section 2.1.3(i) below) and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.3, (A) IMS Holdco shall pay to the Purchaser 75% of the Working Capital Shortfall and (B) immediately thereafter, IMS Holdco and the Purchaser shall contribute to the capital of the Company as a contribution to capital, 25% and 75%, respectively, of the Working Capital Shortfall.  If IMS Holdco fails to make all or any portion of the payment referred to in (A) above or the contribution referred to in (B) above, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset any remaining unpaid amount against any future Purchase Price payments to IMS Holdco, which in the case of (B) above shall then be contributed by the Purchaser to the capital of the Company in respect of IMS Holdco's obligation under (B) above.  If the Effective Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.3, is greater than Target Working Capital, within five days after the Special Determination and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.3, the Company shall make a distribution to IMS Holdco in the amount of the difference between Target Working Capital and the Effective Date Working Capital. Any amount paid pursuant to this Section 2.1.1(b) shall be referred to as the "Working Capital Payment."

(c)       Top-Up Payments. The Purchaser shall pay to IMS Holdco the following top-up payments (the "Top-Up Payments"):

(i)      On or prior to the first anniversary of the Closing, the Purchaser shall pay to IMS Holdco an amount equal to $3,333,333 (the "Initial Top-Up Amount"), plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment; provided, however, in the event that on or before December 31, 2010 changes in United States federal long-term capital gains tax rates are enacted, which will result in an increase in 2011 federal long-term capital gains rates over 2010 federal long-term capital gains rates (the difference between such rates being referred to herein as the "LTG Rate Increase"), then, at the election of IMS Holdco (which election must be made by IMS Holdco in writing and received by the Purchaser no later than December 20, 2010), such payment shall be made on or prior to December 31, 2010, provided that the Initial Top-Up Amount shall be reduced by an amount equal to the product of (x) the Initial Top-Up Amount times (y) ½ of the LTG Rate Increase.  By way of example, if 2011 federal long-term capital gains rates are increased from 15% to 25%, then the LTG Rate Increase shall be equal to 10%, and, if a payment prior to December 31, 2010 is elected by IMS Holdco, the Initial Top-Up Amount shall be reduced by 5%;

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(ii)     on or prior to the second anniversary of the Closing, an amount equal to $3,333,333, plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment; and

(iii)    on or prior to the third anniversary of the Closing, an amount equal to $3,333,334, plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment.

(d)       First Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2010 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the First Additional Payment ("FAP"), calculated as follows:

FAP = Applicable Percentage x 22.5% x 2010 Adjusted GAAP PBT

; provided, however, in the event that 2010 Adjusted GAAP PBT were less than $5,333,333, then FAP shall equal (A) the excess, if any, of (i) 2010 Adjusted GAAP PBT over (ii) $4,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage.

(e)       Second Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2011 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Second Additional Payment ("SAP"), calculated as follows:

SAP = Applicable Percentage x 22.5% x 2011 Adjusted GAAP PBT

; provided, however, in the event that 2011 Adjusted GAAP PBT were less than $8,000,000, then SAP shall equal (A) the excess, if any, of (i) 2011 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that 2010 Adjusted GAAP PBT were less than $4,000,000 then for purposes of the calculations of SAP above, 2011 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

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(f)        Third Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2012 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Third Additional Payment ("TAP"), calculated as follows:

TAP = Applicable Percentage x 22.5% x 2012 Adjusted GAAP PBT

; provided, however, in the event that 2012 Adjusted GAAP PBT were less than $8,000,000, then TAP shall equal (A) the excess, if any, of (i) 2012 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT and 2011 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP and (B) SAP divided by the Applicable Percentage applicable to SAP divided by (ii) 90% minus (z) the 2010 Growth Payment (as defined in Section 2.1.1(i)(ii) herein), were less than $10,000,000, then for purposes of the calculations of TAP above, 2012 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(g)       Fourth Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2013 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Fourth Additional Payment ("FOAP"), calculated as follows:

FOAP = Applicable Percentage x 22.5% x 2013 Adjusted GAAP PBT

; provided, however, in the event that 2013 Adjusted GAAP PBT were less than $8,000,000, then FOAP shall equal (A) the excess, if any, of (i) 2013 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT, 2011 Adjusted GAAP PBT and 2012 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP, (B) SAP divided by the Applicable Percentage applicable to SAP and (C) TAP divided by the Applicable Percentage applicable to TAP divided by (ii) 90% minus (z) the 2010 Growth Payment, were less than $16,000,000, then for purposes of the calculations of FOAP above, 2013 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(h)       Final Additional Payment.  Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2014 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Final Additional Payment ("FIAP"), calculated as follows:

FIAP = Applicable Percentage x 22.5% x 2014 Adjusted GAAP PBT

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; provided, however, in the event that 2014 Adjusted GAAP PBT were less than $8,000,000, then FIAP shall equal (A) the excess, if any, of (i) 2014 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT, 2011 Adjusted GAAP PBT, 2012 Adjusted GAAP PBT and 2013 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP, (B) SAP divided by the Applicable Percentage applicable to SAP, (C) TAP divided by the Applicable Percentage applicable to TAP and (D) FOAP divided by the Applicable Percentage applicable to FOAP divided by (ii) 90% minus (z) the 2010 Growth Payment, were less than $22,000,000, then for purposes of the calculations of FIAP above, 2014 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(i)        Extra Payment; 2010 Growth Payment.

(i)       (A) The Purchaser shall pay to IMS Holdco an amount equal to $666,666 in respect of the calendar year associated with FAP, such payment to be made in 3 equal installments of $222,222 on the last day of each calendar quarter of the calendar year associated with FAP, commencing with the last day of the second calendar quarter of such calendar year and (B) the Purchaser shall pay to IMS Holdco an amount equal to $1,000,000 in respect of the calendar years associated with SAP or TAP, as the case may be, such payments to be made in 4 equal installments of $250,000 on the last day of each calendar quarter of the calendar years associated with SAP or TAP, as the case may be (each payment under (A) and (B), an "Extra Payment", and collectively, the "Extra Payments"); provided, however, IMS Holdco shall not be entitled to receive the applicable Extra Payment in the event that Adjusted GAAP PBT for the applicable calendar quarter is less than $250,000.

(ii)      Simultaneously with the payment of FAP, on the date FAP is paid to IMS Holdco, the Purchaser shall pay to IMS Holdco an amount equal to: (x) 50% times (y) the excess, if any, of (A) 2010 Adjusted GAAP PBT over (B) $5,906,849 (the "2010 Growth Payment").

(j)        Limitations.  As of any date during the period commencing on the Effective Date and ending on December 31, 2014, in the event the amount equal to (A) aggregate Adjusted GAAP PBT through such date less (B) the sum of the fractions, the numerators of which are each Additional Payment paid or payable through such date, and the denominators of which are the Applicable Percentage applicable to such Additional Payment divided by 90%, less (C) the 2010 Growth Payment, less (D) the aggregate amount of Extra Payments, results in an amount equal to or in excess of $30,000,000, then thereafter each of the provisos set forth in Sections 2.1.1(d) through (h) shall no longer be applicable.

(k)       No Negative Payments. Notwithstanding the potential reduction of Adjusted GAAP PBT as set forth in Sections 2.1.1(e) through (h) above, in the event that the calculation of FAP, SAP, TAP, FOAP or FIAP, as the case may be, results in an amount which is less than zero, such Purchase Price component shall be deemed to be zero.

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(l)        Payment of the Purchase Price.Payment of each component of the Purchase Price and any payment that is required to be made under this Section 2.1 shall be made in United States dollars by the Purchaser by direct wire transfer to the account of IMS Holdco, as set forth on Schedule 2.1.1 (or to such other account as IMS Holdco may notify the Purchaser in writing).  Each of FAP, SAP, TAP, FOAP or FIAP, the Extra Payments and the 2010 Growth Payment, as the case may be, shall be deemed to include imputed interest, to the extent required by the Internal Revenue Code of 1986, as amended (the "Code").

(m)      Termination of Additional Payments.  Upon the exercise of a Call under Section 10.2(a) of the Operating Agreement, the delivery of a Sale Request Acceptance Notice or the consummation of a sale to a Prospective Purchaser (as such terms are defined in the Operating Agreement), as the case may be, pursuant to Section 10.2 of the Operating Agreement (each a "Sale Event"), IMS Holdco's right to receive any Additional Payments based upon Adjusted GAAP PBT for, or otherwise in respect of, the calendar year in which the applicable Sale Event occurred or for any calendar year(s) thereafter, shall cease, and the obligation of the Purchaser to pay to IMS Holdco any such Additional Payments shall terminate, contemporaneously with the applicable Sale Event.

2.1.2        Definitions.

(i)            "Additional Payments" shall mean the aggregate amount of the payments made in Sections 2.1.1(d) through (h).

(ii)           "Adjusted GAAP PBT" with respect to any year, shall mean Adjusted GAAP PBT (as defined and calculated pursuant to the Operating Agreement) for such year; provided, however, solely with respect to calendar year 2010, 2010 Adjusted GAAP PBT shall be calculated for the period commencing on May 1, 2010 and ending on December 31, 2010.

(iii)          "Applicable Percentage" shall mean, with respect to any Additional Payment, a percentage equal to the result of (A)(x) the average number of Class B Units of the Company owned by IMS Holdco during the calendar year for which Adjusted GAAP PBT is used to calculate such Additional Payment (such average being determined as the quotient of (1) the sum of the products of the varying numbers of Class B Units so owned by IMS Holdco by the number of days in such year each such number was owned by IMS Holdco, and (2) 365 or 366 days, as applicable for such year), divided by (y) the average total number of outstanding Class A Units and Class B Units for such year (calculated on the same basis as provided in the parenthetical under (A)(x) above), divided by (B) 25%.

(iv)          "Effective Date Working Capital" means the current assets of the Company and its subsidiaries, if any, less the current liabilities of the Company and the subsidiaries, if any, as of the close of business as of the Effective Date in accordance with GAAP; provided, however, an amount equal to $366,273 identified on Schedule 3.23(iv) shall not be treated as a current liability solely for purposes of determining the Effective Date Working Capital.

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(v)           "GAAP" shall mean United States generally accepted accounting principles consistently applied.

(vi)          "Target Working Capital" means an amount equal to $1.00.

2.1.3        Accounting Procedures.

(i)            The Purchaser shall, or shall cause BDO Seidman LLP, or another independent accounting firm chosen by the Purchaser (the "Accountants"), at the Purchaser's expense, as soon as practicable after the Closing, to prepare in accordance with GAAP and deliver to the Representative, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business as of the Effective Date immediately after the consummation of the transactions effected by the Conveyance Document (the "Closing Balance Sheet"), together with a statement of the Accountants based upon such report which sets forth the Effective Date Working Capital (the "Special Determination").  The Purchaser shall have the option, in its sole discretion (and at its sole expense) to instruct the Accountants to audit or perform agreed upon procedures on the Closing Balance Sheet and to determine the scope of such audit or procedures.  If the Representative does not agree that the Special Determination correctly states the Effective Date Working Capital, the Representative shall promptly (but not later than 30 days after the delivery to him of the Special Determination) give written notice to the Purchaser of any exceptions thereto (in reasonable detail describing the nature of the disagreement asserted).  If the Representative and the Purchaser reconcile their differences, the Effective Date Working Capital calculation shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  If the dispute relates to an accounting issue and if the Representative and the Purchaser are unable to reconcile their differences in writing within 20 days after written notice of exceptions is delivered to the Purchaser (the "Reconciliation Period"), the accounting items in dispute shall be submitted to a mutually acceptable accounting firm (other than the Accountants) (the "Independent Auditors") for final determination.  The Effective Date Working Capital calculation shall be deemed adjusted in accordance with the determination of the Independent Auditors and shall become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  The Independent Auditors shall consider only the accounting items in dispute and shall be instructed to act within 20 days (or such longer period as the Representative and the Purchaser may agree) to resolve all accounting items in dispute.  If the dispute involves a non-accounting issue and such dispute cannot be reconciled within the Reconciliation Period, the dispute shall be settled by a court of competent jurisdiction.  If the Representative does not give written notice of any exception within 30 days after the delivery to him of the Special Determination or if the Representative gives written notification of his acceptance of the Effective Date Working Capital prior to the end of such 30 day period, the Effective Date Working Capital set forth in the Special Determination shall thereupon become binding, final and conclusive upon all the parties hereto and enforceable in a court of law.

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(ii)           In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 2.1.3, then the Purchaser and the Representative agree to select another accounting firm (other than the Accountants) to perform the services to be performed under this Section 2.1.3 by the Independent Auditors.  If the Purchaser and the Representative fail to select the Independent Auditors as required by Section 2.1.3(i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either the Purchaser or the Representative may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York to appoint an independent firm of certified public accountants to perform the services required under this Section 2.1.3 by the Independent Auditors.  The fees of JAMS shall be shared equally by the Purchaser and IMS Holdco.  For purposes of this Section 2.1.3 the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this Section 2.1.3(ii).

(iii)          The Independent Auditors shall determine the party (i.e., the Purchaser or the Representative) whose asserted position as to the calculation of the Effective Date Working Capital is furthest from the determination of the Effective Date Working Capital by the Independent Auditors, which non-prevailing party shall pay the fees and expenses of the Independent Auditors and shall reimburse the prevailing party for the portion of the fees of JAMS previously paid by it.

2.1.4        Examination of Books and Records.  The books and records of IMS Holdco (with respect to periods prior to the Closing Date) and the Company and its subsidiaries (if any) shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 2.1.  The Principals, on the one hand, and the Purchaser, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by them in making any determinations hereunder or to support a position that is contrary to the position taken by the other party.

Section 2.2       Closing.   The closing of the transactions contemplated by this Agreement (the "Closing") shall take place simultaneously with the execution and delivery of this Agreement effective as of the Effective Date, at the offices of Davis & Gilbert LLP, 1740 Broadway, New York, New York 10019 or by the exchange of documents and instruments by mail, courier, telecopy and wire transfer to the extent mutually acceptable to the parties hereto (the date of closing is referred to as the "Closing Date").  The transactions contemplated by this Agreement shall be effective as of the Effective Date and the Assets (as defined in the Conveyance Document) transferred to the Company shall be those owned by the Company as of the Effective Date, subject to transactions in the ordinary course of business between the Effective Date and the Closing Date.  After the Effective Date and through the Closing Date, the operations of IMS Holdco will be for the account of the Company, and any gain or loss during such period shall inure to the Company’s detriment or benefit.

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Section 2.3       Third Party Consents.  Anything in this Agreement to the contrary notwithstanding, in the event an assignment or purported assignment to the Company of any of the agreements, contracts or commitments of IMS Holdco pursuant to the Conveyance Document or any claim, right or benefit arising thereunder or resulting therefrom, without the consent of other parties thereto, would constitute a breach thereof or would not result in the Company receiving all of the rights of IMS Holdco thereunder, such agreement, contract or commitment shall be deemed not to have been assigned to the Company.  In those circumstances, if reasonably requested by the Purchaser, after the Closing, IMS Holdco and the Principals will use their best efforts to obtain any such consent (excluding the payment of any fees).  If such consent is not obtained and is required to effectively assign any agreement, contract or commitment to the Company, the Principals and IMS Holdco will reasonably cooperate with the Company to provide the Company with the full claims, rights and benefits thereunder, including enforcement at the cost and for the benefit of the Company of any and all rights of IMS Holdco, against a third party thereto arising out of the breach or cancellation by such third party or otherwise, and any amount received by IMS Holdco in respect thereof shall be held for and paid over to the Company.

Section 2.4        Further Assurance; Post Closing Cooperation. IMS Holdco will, from time to time, at the request of the Purchaser, whether at or after the Closing Date, execute and deliver such other and further instruments of conveyance, assignment, transfer and consent necessary for the conveyance, assignment and transfer of the Assets (as defined in the Conveyance Document) pursuant to the Conveyance Document.  Following the Closing, upon reasonable advance notice, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data relating to IMS Holdco or the Company and its subsidiaries, if any, in its possession with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of tax returns, (ii) the determination or enforcement of rights and obligations under this Agreement, (iii) compliance with the requirements of any Governmental or Regulatory Authority (as defined in Section 3.1.2), (iv) the determination or enforcement of the rights and obligations of any party entitled to indemnification under Article VII, (v) any actual or threatened action or proceeding, and (vi) the verification of the Assets and Assumed Liabilities (as defined in the Conveyance Document).

ARTICLE III

REPRESENTATIONS OF IMS HOLDCO AND THE PRINCIPALS

A.  Each of the Principals severally represents and warrants to and with the Purchaser, as follows:

Section 3.1       Execution and Validity of Agreements; Restrictive Documents.

3.1.1        Execution and Validity.  The Principal has the full legal right and capacity to enter into this Agreement and to perform his or her respective obligations hereunder.  This Agreement has been duly and validly executed and delivered by such Principal and, assuming due authorization, execution and delivery by the Purchaser, IMS Holdco and each other Principal a party hereto, constitutes a legal, valid and binding obligation of such Principal, enforceable against such Principal in accordance with its terms.

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3.1.2        No Restrictions.  There is no suit, action, claim, investigation or inquiry by any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision ("Governmental or Regulatory Authority"), and no legal, administrative or arbitration proceeding is pending or, to such Principal's knowledge, threatened against the Principal with respect to the execution, delivery and performance of this Agreement or the transactions contemplated hereby or any other agreement entered into by such Principal in connection with the transactions contemplated hereby.

3.1.3        Non-Contravention.  The execution, delivery and performance by the Principal of his or her obligations hereunder and the consummation of the transactions contemplated hereby, will not as of the Closing Date (a) result in the violation by such Principal of any statute, law, rule, regulation or ordinance (collectively, "Laws"), or any judgment, decree, order, writ, permit or license (collectively, "Orders"), of any Governmental or Regulatory Authority, applicable to such Principal, or (b) conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require such Principal to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of the assets or properties of such Principal, under any of the terms, conditions or provisions of any agreement, commitment, lease, license, evidence of indebtedness, letter of credit, mortgage, indenture, security agreement, instrument, note, bond, franchise, permit, concession, or other instrument, obligation or agreement of any kind, written or oral (collectively, "Contracts"), to which such Principal is a party or by which such Principal or any of his or her assets or properties are bound.

3.1.4        Approvals and Consents.  No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Principal is a party for the execution and delivery of this Agreement by such Principal, the performance by such Principal of his or her obligations hereunder or the consummation of the transactions contemplated hereby.

B.  IMS Holdco and the Principals, jointly and severally, represent and warrant to and with the Purchaser, as follows:

Section 3.2       Existence and Good Standing.  IMS Holdco has the full limited liability company power and authority to enter into this Agreement and the Conveyance Document and to perform its obligations hereunder and thereunder.  The Company has the full limited liability company power and authority to enter into the Conveyance Document and to perform its obligations thereunder. The execution and delivery of this Agreement and the Conveyance Document by IMS Holdco and the Conveyance Document by the Company, and the consummation by such parties of the transactions contemplated hereby and thereby have been duly authorized by all required company action on behalf of such parties.  This Agreement and the Conveyance Document have been duly and validly executed and delivered by IMS Holdco and constitute a legal, valid and binding obligation of IMS Holdco, enforceable against it in accordance with their terms.  The Conveyance Document has been duly and validly executed and delivered by the Company, and constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms.  The Company and IMS Holdco are each duly organized and are each validly existing and in good standing (including tax status) under the laws of the State of Delaware and the State of New York, respectively, with the full power and authority to own their respective properties and to carry on their respective businesses (the business operated by the Company hereinafter referred to as the "Business") all as and in the places where such properties are now owned or operated or such businesses are now being conducted except where such failure to qualify would not have a material adverse effect on the respective businesses.  The Company and IMS Holdco are each duly qualified, licensed or admitted to do business and each of them is in good company and tax standing in the jurisdictions set forth on Schedule 3.2, which are the only jurisdictions in which the ownership, use or leasing of their respective assets and properties, or the conduct or nature of their respective businesses, makes such qualification, licensing or admission necessary.

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Section 3.3       Membership Interests; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments.  The Principals own of record and beneficially have valid title to 100% of the membership interests of IMS Holdco.  IMS Holdco owns of record and beneficially has valid title to 100% of the Membership Units of the Company, including the Purchased Units, and such ownership is free and clear or all Liens.  Except as set forth on Schedule 3.3, there are no outstanding subscriptions, options, warrants, rights (including "phantom stock rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind providing for the purchase, issuance or sale of any equity or ownership or proprietary interest of the Company, or which grants any Person other than IMS Holdco the right to share in the earnings of the Company.  Except as set forth on Schedule 3.3, the Company does not, directly or indirectly, own any equity interest in or have any voting rights with respect to any Person.  There are no outstanding subscriptions, options, rights, warrants, calls, commitments or arrangements of any kind to acquire any of the Purchased Units and there are no agreements or understandings with respect to the sale or transfer of any of the Purchased Units other than this Agreement. There is no suit, action, claim, investigation or inquiry by any Governmental or Regulatory Authority, and no legal, administrative or arbitration proceeding pending or, to the knowledge of the Principals, threatened, against any Principal or the Company or any of the Purchased Units, with respect to the execution, delivery and performance of this Agreement or the Conveyance Document or the transactions contemplated hereby or thereby or any other agreement entered into by the Principals or IMS Holdco in connection with the transactions contemplated hereby or thereby.

Section 3.4       Financial Statements and No Material Changes.  Schedule 3.4(A) sets forth (a) the unaudited balance sheets of IMS Holdco as at December 31, 2008 and December 31, 2009 and the related unaudited statements of operations for the fiscal years then ended, and (b) the unaudited balance sheets of IMS Holdco as at March 31, 2010 (the "Balance Sheet") and the related unaudited statements of operations for the three months then ended.  Such financial statements have been prepared in accordance with GAAP throughout the periods indicated except as set forth on Schedule 3.4(B).  Each balance sheet fairly presents the financial condition of the entity or entities included within such balance sheet, at the respective date thereof, and reflects all claims against and all debts and liabilities of such entities, fixed or contingent, as at the respective date thereof, required to be shown thereon under GAAP and the related statements of operations fairly present the results of operations for the respective period indicated.  Except for the transactions consummated pursuant to the Conveyance Document, since March 31, 2010 (the "Balance Sheet Date"), there has been no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects of IMS Holdco or the Company.

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Section 3.5       Books and Records.  IMS Holdco did not have and the Company does not have any of its records, systems, controls, data or information recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) were not prior to the Effective Date under the exclusive ownership and possession of IMS Holdco and which are not now under the exclusive ownership and possession of the Company.  IMS Holdco or the Principals have delivered to the Purchaser complete and correct copies of the Certificate of Formation and the limited liability company agreement of the Company in effect immediately prior to the execution of this Agreement.

Section 3.6       Title to Properties; Encumbrances; No Prior Activities.

3.6.1        Title to Properties; Encumbrances.  Except for the Excluded Assets listed in the Conveyance Document, IMS Holdco had and the Company now has good and valid title to, or enforceable leasehold interests in or valid rights under contract to use, all the properties and assets owned or used by IMS Holdco (real, personal, tangible and intangible), including, without limitation (a) all the properties and assets reflected in the Balance Sheet, (b) all the properties and assets purchased or otherwise contracted for by IMS Holdco since the Balance Sheet Date (except for properties and assets reflected in the Balance Sheet or acquired or otherwise contracted for since the Balance Sheet Date that have been sold or otherwise disposed of in the ordinary course of business) and (c) all monies received from clients of the Company (including, without limitation, all monies received in connection with the Company's media purchase obligations on behalf of its clients), in each case free and clear of all Liens, except for Liens set forth on Schedule 3.6.  The property, plant and equipment conveyed by IMS Holdco to the Company, whether owned or otherwise contracted for, is in a state of good maintenance and repair (ordinary wear and tear excepted) and is adequate and suitable for the purposes for which they are presently being used, including the Business.

3.6.2        No Prior Activities.  The Company was created solely for the purpose of engaging in the transactions contemplated by the Conveyance Document and this Agreement.  The Company has not engaged in any activities other than in connection with its formation, the negotiation, execution and delivery of this Agreement, the Conveyance Document and the Operating Agreement, and the consummation of the transactions contemplated hereby and thereby.  Except for liabilities incurred in connection with its formation and the consummation of the transactions contemplated by this Agreement, the Conveyance Document and the Operating Agreement, the Company has not incurred any liabilities or entered into any agreements or arrangements with any Person.  As of the Closing Date, (x) neither Media Time Sales LLC nor Performance Fuel Network LLC (collectively, the "Retained Subsidiaries") are engaged in any operational or business activities and (y) the Retained Subsidiaries do not have any liabilities whatsoever or any obligations with respect to any agreements or arrangements with any Person.

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Section 3.7       Real Property.

3.7.1        Owned Real Property.The Company does not own any real property (including ground leases) or hold a freehold interest in any real property or any option or right of first refusal or first offer to acquire any real property.

3.7.2        Leased Real Property.  Schedule 3.7.2 contains an accurate and complete list of all real property leases, subleases, real property licenses and other occupancy agreements, including without limitation, any modification, amendment or supplement thereto and any other related document or agreement executed or entered into by the Company, or by IMS Holdco and assigned to the Company pursuant to the Conveyance Document, to which the Company is a party (as lessee, sublessee, lessor, sublessor, licensor or licensee) (each individually, a "Real Property Lease" and collectively, the "Real Property Leases").  Each Real Property Lease set forth on Schedule 3.7.2 (or required to be set forth on Schedule 3.7.2) is valid, binding and in full force and effect; all rents and additional rents and other sums, expenses and charges due thereunder to date on each such Real Property Lease have been paid; and the lessee has been in peaceable possession since the commencement of the original term of such Real Property Lease and no waiver, indulgence or postponement of the lessee's obligations thereunder has been granted by the lessor.  There exists no default or event of default by IMS Holdco or the Company or to the knowledge of the Principals by any other party to any Real Property Lease; and there exists no occurrence, condition or act (including the purchase of the Purchased Units hereunder) which, with the giving of notice, the lapse of time or the happening of any further event or condition, would become a default or event of default by IMS Holdco or the Company under any Real Property Lease, and there are no outstanding claims of breach or indemnification or notice of default or termination of any Real Property Lease.  IMS Holdco held and the Company now holds the leasehold estate on all the Real Property Leases free and clear of all Liens except as set forth on Schedule 3.7.2.  The real property leased by IMS Holdco and/or the Company is in a state of good maintenance and repair (ordinary wear and tear excepted), adequate and suitable for the purposes for which it is presently being used, and there are no material repair or restoration works likely to be required in connection with any of the leased real properties.  IMS Holdco was, and the Company now is, in physical possession and actual and exclusive occupation of the whole of each of its leased properties.  No environmental claim has been made against IMS Holdco or the Company with respect to any Real Property Lease.  Neither IMS Holdco nor the Company owes any brokerage commission with respect to any of the Real Property Leases.

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Section 3.8       Contracts.  Schedule 3.8 hereto contains an accurate and complete list of the following Contracts (whether written or oral, but indicating which Contracts are oral) to which the Company is currently a party or IMS Holdco was a party immediately prior to the assignment of the same to the Company pursuant to the Conveyance Document (and Schedule 3.8 indicates if a listed item has not been assigned to and assumed by the Company pursuant to the Conveyance Document): (a) all Plans (as such term is defined in Section 3.19), (b) any personal property lease with a fixed annual rental of $10,000 or more, (c) any Contract relating to capital expenditures which involves payments of $25,000 or more in any single transaction or series of related transactions, (d) any Contract relating to the making of a loan or advance to or investment in, any other Person, (e) any agreement, instrument or arrangement evidencing or relating in any way to indebtedness for money borrowed or to be borrowed, whether directly or indirectly, by way of loan, purchase money obligation, guarantee (other than the endorsement of negotiable instruments for collection in the ordinary course of business), conditional sale, purchase or otherwise, (f) any management service, employment, consulting or similar type of Contract which is not cancelable by the Company or IMS Holdco without penalty or other financial obligation within 30 days, (g) any Contract limiting the Company's freedom to engage in any line of business or to compete with any other Person, including, without limitation, any agreement limiting the ability of the Company or IMS Holdco or any of their respective affiliates to take on competitive accounts during or after the term thereof, (h) any collective bargaining or union agreement, (i) any Contract between the Company, on the one hand, and any officer or director thereof, on the other hand, not covered by subsection (f) above (including indemnification agreements), (j) any secrecy or confidentiality agreement (other than standard confidentiality agreements in computer software license agreements or agreements with clients entered into in the ordinary course of business), (k) any agreement with respect to any Intellectual Property (as defined in Section 3.14) other than "shrink-wrap" and similar end-user licenses, (l) any agreement with a client required to be listed on Schedule 3.16, (m) any agreement, indenture or other instrument which restricts the ability of the Company or any of its subsidiaries to make distributions in respect of its equity, (n) any joint venture agreement involving a sharing of profits not covered by clauses (a) through (m) above, (o) any Contract (not covered by another subsection of this Section 3.8) which involves $25,000 or more over the unexpired term thereof and is not cancelable by the Company, without penalty or other financial obligation within 30 days; provided, however, Contracts of a similar nature which individually do not involve $25,000 but in the aggregate involve $25,000 or more over the unexpired terms shall also be set forth on Schedule 3.8, (p) any Contract with a media buying service; provided, however, commitments to purchase media in the ordinary course of business do not have to be set forth on Schedule 3.8, and (q) any agreement (not covered by another subsection of this Section 3.8) between the Company, on the one hand, and any member of the Company, on the other hand. Notwithstanding anything to the contrary contained above, (x) commitments to media and production expenses which are fully reimbursable from clients, and (y) estimates or purchase orders given in the ordinary course of business relating to the execution of projects, do not have to be set forth on Schedule 3.8. Each Contract which has been assigned to and assumed by the Company pursuant to the Conveyance Document, including without limitation, those required to be set forth on Schedule 3.8, is in full force and effect, and there exists no default or event of default by the Company or IMS Holdco or, to the knowledge of the Principals, by any other party, or occurrence, condition, or act (including the purchase of the Purchased Units hereunder) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default thereunder by the Company, and there are no outstanding claims of breach or indemnification or notice of default or termination of any such Contract.  Summaries of all oral Contracts contained on Schedule 3.8 are complete and accurate in all material respects.

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Section 3.9       Non-Contravention; Approvals and Consents.   The execution, delivery and performance by the Principals, the Company and IMS Holdco of their respective obligations under this Agreement and the Conveyance Document and the consummation of the transactions contemplated hereby and thereby, will not (a) violate, conflict with or result in the breach of any provision of the certificate of formation and limited liability company agreement (or other comparable documents) of the Company or IMS Holdco; (b) result in the violation by the Company or IMS Holdco of any Laws or Orders of any Governmental or Regulatory Authority, or (c) if the consents and notices set forth in Schedule 3.9 are obtained, conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Company or IMS Holdco to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of their respective assets or properties, or under any of the terms, conditions or provisions of any Contract to which the Company or IMS Holdco is a party or by which the Company or IMS Holdco or any of their respective assets or properties are or were bound.  Except as set forth in Schedule 3.9, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Company or IMS Holdco is a party, or by which their respective assets or properties were or are bound, for the execution and delivery of this Agreement or the Conveyance Document, the performance by the Company or IMS Holdco of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby.

Section 3.10     Litigation.  Except as set forth on Schedule 3.10, there is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Principals, any investigation by) any Governmental or Regulatory Authority, pending or, to the knowledge of the Principals, threatened, against the Company or IMS Holdco with respect to this Agreement or the transactions contemplated hereby or by the Conveyance Document, or any other agreement entered into by the Company or IMS Holdco in connection with the transactions contemplated hereby, or against or affecting the Business or the assets transferred to the Company pursuant to the Conveyance Document; and no acts, facts, circumstances, events or conditions occurred or exist which are a basis for any such action, proceeding or investigation.  Neither the Company nor IMS Holdco is subject to any Order entered in any lawsuit or proceeding. Schedule 3.10 also sets forth with respect to each pending or, to the knowledge of the Principals, threatened action, suit or proceeding listed thereon, the amount of costs, expenses or damages the Company or IMS Holdco has incurred to date and reasonably expects to incur through the conclusion thereof.

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Section 3.11    Taxes.   Each of IMS Holdco and the Company have timely completed and filed, or caused to be filed, taking into account any valid extensions of due dates, completely and accurately, all federal, state, local and foreign (if any) tax or information returns (including estimated tax returns) required under the statutes, rules or regulations of such jurisdictions to be filed by each of them.  The term "Taxes" means taxes, duties, charges or levies of any nature imposed by any taxing or other Governmental or Regulatory Authority, including without limitation income, gains, capital gains, surtax, capital, franchise, capital stock, value-added taxes, taxes required to be deducted from payments made by the payor and accounted for to any tax authority, employees' income withholding, back-up withholding, withholding on payments to foreign Persons, social security, national insurance, unemployment, worker's compensation, payroll, disability, real property, personal property, sales, use, goods and services or other commodity taxes, business, occupancy, excise, customs and import duties, transfer, stamp, and other taxes (including interest, penalties or additions to tax in respect of the foregoing), and includes all taxes payable by IMS Holdco or the Company pursuant to Treasury Regulations §1.1502-6 or any similar provision of state, local or foreign law.  All Taxes shown on said returns to be due and all other Taxes due and owing (whether or not shown on any Tax return) have been paid and all additional assessments received prior to the Closing Date have been paid or are being contested in good faith, in which case, such contested assessments are set forth on Schedule 3.11.  Each of IMS Holdco and the Company has collected all sales, use, goods and services or other commodity Taxes required to be collected and remitted or will remit the same to the appropriate taxing authority within the prescribed time periods.  Each of IMS Holdco and the Company have withheld all amounts required to be withheld on account of Taxes from amounts paid to employees, former employees, directors, officers, members, residents and non-residents and remitted or will remit the same to the appropriate taxing authorities within the prescribed time periods.  The amount set up as an accrual for Taxes (aside from any reserved for deferred Taxes established to reflect timing differences between book and Tax accrual) on the Balance Sheet (as opposed to the notes thereto) is sufficient for the payment of all unpaid Taxes of IMS Holdco, whether or not disputed, for all periods ended on and prior to the date thereof.  Since the Balance Sheet Date, IMS Holdco has not incurred any liabilities for Taxes other than in the ordinary course of the business of IMS Holdco consistent with past custom and practice. To the knowledge of the Principals, no member, manager, director or officer (or employee responsible for Tax matters) of IMS Holdco or the Company has any reason to believe that any authorities may assess any additional Taxes for any period for which Tax returns have been filed.  The Principals have delivered to the Purchaser correct and complete copies of all federal, state and local income tax returns filed with respect to IMS Holdco and the Company that were requested by the Purchaser.  Except as set forth on Schedule 3.11, none of the federal, state or local income tax returns of either IMS Holdco or the Company have ever been audited by the Internal Revenue Service or any other Governmental or Regulatory Authority.  No examination of any return of IMS Holdco or the Company is currently in progress, and neither IMS Holdco nor the Company has received notice of any proposed audit or examination.  No deficiency in the payment of Taxes by IMS Holdco or the Company for any period has been asserted in writing by any taxing authority and remains unsettled at the date of this Agreement.  Neither IMS Holdco nor the Company has made any agreement, waiver or other arrangement providing for an extension of time with respect to the assessment or collection of any Taxes against it.  Neither IMS Holdco nor the Company has been a member of an affiliated group filing consolidated federal income tax returns nor has it been included in any combined, consolidated or unitary state or local income tax return.  Neither IMS Holdco nor the Company will be required as a result of a change in accounting method for any period ending on or before the Closing Date to include any adjustment under Section 481 of the Code (or any similar provision of state, local or foreign income tax law) in income for any period ending after the Closing Date, or as a result of a change for any period that may be required by law in connection with this transaction.  Neither IMS Holdco nor the Company is obligated to make any payments or is a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Section 280G of the Code.  Neither IMS Holdco nor the Company is or has been a U.S. real property holding corporation within the meaning or Section 897 of the Code and none of the Principals or IMS Holdco are nonresident alien individuals within the meaning of Section 871(b)(1) of the Code.  Neither IMS Holdco nor the Company has entered into any Tax sharing or indemnification agreement with any party.  The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); (ii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iii) prepaid amount received on or prior to the Closing Date.  Since its inception, IMS Holdco has been treated as a partnership for federal, state, local and foreign income tax purposes and will continue to be treated as a partnership through the Closing Date. Since its formation, the Company has been treated as disregarded entity within the meaning of Treasury Regulation Section 301.7701-3 for federal, state and local income tax purposes.

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Section 3.12     Liabilities.  Except for the Assumed Liabilities (as defined in the Conveyance Document) set forth in the Conveyance Document, or as set forth on Schedule 3.12, neither the Company nor IMS Holdco has any outstanding claims, liabilities or indebtedness of any nature whatsoever as to which the Company is or may become responsible (collectively in this Section 3.12, "Liabilities"), whether accrued, absolute or contingent, determined or undetermined, asserted or unasserted, and whether due or to become due, other than (i) Liabilities specifically disclosed in any Schedule hereto; (ii) Liabilities under Contracts of the type required to be disclosed by IMS Holdco, the Company and the Principals on any Schedule and so disclosed or which because of the dollar amount or other qualifications are not required to be listed on such Schedule; and (iii) Liabilities incurred since the Balance Sheet Date in the ordinary course of business and consistent with past practice of IMS Holdco or the Company, as the case may be.

Section 3.13     Insurance.  Schedule 3.13 contains a true and complete list (including the names and addresses of the insurers, the names of the Persons to whom such insurance policies have been issued, the expiration dates thereof, the annual premiums and payment terms thereof, whether it is a "claims made" or an "occurrence" policy and a brief description of the interests insured thereby) of all liability, property, workers' compensation and other insurance policies currently in effect that insure the property, assets, Business and employees of the Company, including but not limited to the property, assets, business and employees of IMS Holdco that were transferred to the Company pursuant to the Conveyance Document (other than self-obtained insurance policies by such employees). Each such insurance policy is valid and binding and in full force and effect, all premiums due thereunder have been paid and neither IMS Holdco nor the Company has received any notice of cancellation or termination in respect of any such policy or default thereunder.  To the knowledge of the Principals, such insurance policies are placed with financially sound and reputable insurers, and are in amounts and have coverage that are reasonable and customary for Persons engaged in the operation of the Business.  Neither IMS Holdco nor the Company, or to the knowledge of the Principals, the Person to whom such policy has been issued has received notice that any insurer under any policy referred to in this Section 3.13 is denying liability with respect to a claim thereunder or defending under a reservation of rights clause.  Within the last two years neither IMS Holdco nor the Company has filed for any claims exceeding $25,000 against any of its insurance policies, exclusive of automobile and health insurance policies. None of such policies shall lapse or terminate by reason of the transactions contemplated by this Agreement or the Conveyance Document and all such policies shall continue in effect after the Closing Date for the benefit of the Company.  Neither IMS Holdco nor the Company has received any notice of cancellation of any such policy.  Neither IMS Holdco nor the Company has received written notice from any of its insurance carriers that any premiums will be materially increased in the future or that any insurance coverage listed on Schedule 3.13 will not be available in the future on substantially the same terms now in effect. Neither IMS Holdco nor the Company has been refused any insurance or required to pay higher than normal or customary premiums, nor has its coverage been limited by any insurance carrier to which it has applied for insurance during the last three years.

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Section 3.14     Intellectual Properties.

3.14.1      Definitions.  For purposes of this Agreement, the following terms have the following definitions:

"Intellectual Property" shall include, without limitation, any or all of the following and all rights associated therewith: (a) all domestic and foreign patents, and applications therefor, and all reissues, reexaminations, divisions, renewals, extensions, continuations and continuations-in-part thereof; (b) all inventions (whether patentable or not), invention disclosures, improvements; (c) trade secrets, confidential and proprietary information, know how, technology, technical data and customer lists, financial and marketing data, pricing and cost information, business and marketing plans, databases and compilations of data, rights of privacy and publicity, and all documentation relating to any of the foregoing; (d) all copyrights, copyright registrations and applications therefor, unregistered copyrights, the content of all World Wide Web sites of a Person and all other rights corresponding thereto throughout the world; (e) all mask works, mask work registrations and applications therefor; (f) all industrial designs and any registrations and applications therefor; (g) all trade names, corporate names, logos, trade dress, common law trademarks and service marks, trademark and service mark registrations and applications therefor and all goodwill associated therewith; (h) any and all Internet domain names and Web sites (including all software and applications, and all components and/or modules thereof), used in connection therewith; and (i) all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded, and all documentation related to any of the foregoing.

"Intellectual Property of the Company" shall mean any Intellectual Property that is owned by the Company (including Intellectual Property transferred by IMS Holdco to the Company pursuant to the Conveyance Document), including Registered IP and Unregistered IP.

"Licensed Intellectual Property" means any Intellectual Property owned by another Person that is used by the Company in the operation of the Business, including Off-the-Shelf Software (as defined below), but excluding rights in or to materials created for clients, to the extent to which such (x) client is the first owner of copyright in such materials or (y) the materials are subject to a written assignment of copyright in favor of clients of the Company.

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3.14.2      Representations.  Except as set forth on Schedule 3.14.2, all of the Intellectual Property of IMS Holdco was transferred to the Company pursuant to the Conveyance Document. Schedule 3.14.2 hereto contains an accurate and complete list of all (a) patents, patent applications, registered trademarks, applications for registered trademarks, registered service marks, domain names, applications for registered service marks, logos, registered copyrights and applications for registered copyrights which are owned by the Company (the "Registered IP"), (b) all unregistered trademarks, unregistered service marks and material unregistered copyrights which are owned by the Company (the "Unregistered IP") and (c) all Licensed Intellectual Property that is material to the operation of the Business, other than widely distributed off-the-shelf applications subject to shrink-wrap and similar non-negotiated end-user license agreements ("Off-the-Shelf Software"). Except as set forth on Schedule 3.14.2, the registrations and applications of the Registered IP listed on Schedule 3.14.2 are in the name of IMS Holdco, and are valid, in proper form, enforceable and subsisting, all necessary registration and renewal fees in connection with such registrations have been made and all necessary documents and certificates in connection with such registrations have been filed with the relevant patent and Internet domain names, copyrights and trademark authorities in the United States or other jurisdictions where the Business is conducted for the purposes of maintaining such Intellectual Property registrations, and applications therefor, and no actions (including filing of documents or payments of fees) are due within ninety (90) days after the Closing.  No registration, or application therefor, for any of the Registered IP has lapsed, expired, or been abandoned, and no such registrations, or applications therefor, are the subject of any opposition, interference, cancellation, or other legal, quasi-legal, or governmental proceeding pending before any governmental, registration, or other authority in any jurisdiction.  Except as set forth on Schedule 3.14.2, (i) the Company is the sole and exclusive owner of all rights, title and interest in and to the Intellectual Property of the Company, free and clear of all Liens, (ii) no Person has any rights to use any of the Intellectual Property of the Company, (iii) neither IMS Holdco nor the Company has granted to any Person, or authorized any Person to retain, any ownership in the Intellectual Property of the Company, and (iv) all Licensed Intellectual Property in the Company's possession or used in the operation of the Business has been properly licensed from the owner of such Intellectual Property, and the Company possesses all license agreements, certificates or documentation sufficient to substantiate such rights, and the Company is in compliance with, and IMS Holdco has not in the past violated, such license agreements.  Except as set forth on Schedule 3.14.2,the consummation of the transactions contemplated hereby will not result in any loss or impairment of the Company's rights to own or use any Intellectual Property, nor will such consummation require the consent of any third party in respect of any Intellectual Property. The operation of the Business and use of all Intellectual Property therein does not infringe the Intellectual Property of any other Person. There are no proceedings pending or, to the knowledge of the Principals, threatened against IMS Holdco or the Company with respect to the Intellectual Property, or with respect to any other Intellectual Property, alleging the infringement or misappropriation by IMS Holdco or the Company of any Intellectual Property of any Person, and neither IMS Holdco nor the Company has received notice from any Person that the operation of the Business infringes the Intellectual Property of any Person.  There are no claims pending or, to the knowledge of the Principals, threatened challenging the validity of any Intellectual Property of the Company or any Intellectual Property used by the Company in the conduct of the Business. Neither IMS Holdco nor the Company has entered into or is otherwise bound by any consent, forbearance or any settlement agreement which limits the rights of the Company to use the Intellectual Property of the Company. To the knowledge of the Principals, no Person is infringing or misappropriating any of the Intellectual Property of the Company. All Intellectual Property of the Company was either developed (a) by employees of IMS Holdco within the scope of such employee's employment duties; or (b) by independent contractors or other third parties who have assigned all of their rights therein to IMS Holdco pursuant to a written agreement, and all such employees, independent contractors, and other third parties have waived, pursuant to a written agreement, their moral rights in all such Intellectual Property in favor of the Company or IMS Holdco.  Except as set forth on Schedule 3.14.2, the Intellectual Property of the Company does not contain any software licensed under terms which require, as a condition of the use, modification, or distribution of such software, that other software incorporated into, derived from, or distributed with such software: (x) be disclosed or distributed in source code form; (y) be licensed under terms that permit making derivative works; or (z) be redistributable at no charge to subsequent licensees.

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3.14.3      Privacy and Security.  All information or data of any kind possessed by the Company, including but not limited to, personally identifiable information collected from consumers ("PII"), aggregate or anonymous information collected from consumers ("Non-PII") and employee data (collectively, "Data"), has been collected, by IMS Holdco or the Company, or any other Person, and is being maintained, stored, processed and used by the Company, in compliance with all Laws and Orders.  IMS Holdco or the Company has at all times presented a privacy policy ("Privacy Policy") to consumers prior to the collection of any PII or Non-PII online.  The Privacy Policy, and any other representations, marketing materials and advertisements that address privacy issues and the treatment of PII and Non-PII, accurately and completely describe IMS Holdco's and the Company's respective information collection and use practices, and no such notices or disclosures have been inaccurate, misleading or deceptive.  Neither IMS Holdco nor the Company has collected or received any PII from children under the age of 13 without verifiable parental consent or directed any of its websites to children under the age of 13 through which such PII could be obtained.  IMS Holdco and the Company have stored and maintained all Data in a secure manner, using commercially reasonable technical measures, to assure the integrity and security of the Data and to prevent loss, alteration, corruption, misuse and unauthorized access to such Data.  There has been no unauthorized use, access to or disclosure of any Data.  Neither IMS Holdco nor the Company has received any claims, notices or complaints regarding its information practices or use of Data.  The consummation of the transactions contemplated hereby will not result in any loss or impairment of the rights to own and use any Data, nor will such consummation require the consent of any third party in respect of any Data.

Section 3.15     Compliance with Laws.  The Company is, and the Business (including the business conducted by IMS Holdco) has been conducted, in compliance with all applicable Laws and Orders, except in each case (other than with respect to compliance with environmental Laws and Orders relating to the regulation or protection of the environment ("Environmental Laws and Orders")) where the failure to so comply would not reasonably be expected to have a Material Adverse Effect (as defined below), including without limitation: (a) all Laws and Orders promulgated by the Federal Trade Commission or any other Governmental or Regulatory Authority; (b) all Environmental Laws and Orders; and (c) all Laws and Orders relating to labor, civil rights, and occupational safety and health laws, worker's compensation, employment and wages, hours and vacations, or pay equity. Neither IMS Holdco nor the Company has been charged with, or, to the knowledge of the Principals, threatened with or under any investigation with respect to, any charge concerning any violation of any Laws or Orders. The term "Material Adverse Effect" as it applies to IMS Holdco or the Company, shall mean a material adverse effect on its operations, business, prospects, assets or financial condition. The Company has all permits, licenses, and other government certificates, authorizations and approvals ("Required Permits") required by any Governmental or Regulatory Authority for the operation of the Business, except where the failure to have such Required Permits would not reasonably be expected to have a Material Adverse Effect.  All of the Required Permits are in full force and effect and no action or claim is pending, nor to the knowledge of the Principals, threatened, to revoke or terminate any such Required Permit or declare any such Required Permit invalid in any respect.

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Section 3.16     Client Relations.  Schedule 3.16 sets forth (a) the 20 largest clients of IMS Holdco (measured by revenues), and the revenues from each such client and from all clients (in the aggregate) for the calendar year ended December 31, 2009 and (b) the clients projected to be the 20 largest clients (measured by revenues) of the Company based on its current profit plan for the twelve months ending December 31, 2010, together with the estimated revenues from each such client and all clients (in the aggregate) for such period.  IMS Holdco and the Principals represent that the estimated revenues set forth on Schedule 3.16 were made in good faith and on a reasonable basis.  Except as set forth on Schedule 3.16, no client of IMS Holdco or the Company has advised IMS Holdco, the Company or any Principal in writing that it is (x) terminating or considering terminating the handling of its business by IMS Holdco or the Company or in respect of any particular product, project or service or (y) planning to reduce its future spending with IMS Holdco or the Company in any material manner; and no client has orally advised the Company, IMS Holdco or any Principal of any of the foregoing events.

Section 3.17     Accounts Receivable; Work-in-Process; Accounts Payable.  The amount of all work-in-process, accounts receivable, unbilled invoices (including without limitation unbilled invoices for services and out-of-pocket expenses) and other debts due or recorded in the records and books of account of IMS Holdco and which were transferred to the Company pursuant to the Conveyance Document, as being due to the Company and reflected on the Balance Sheet and the Closing Balance Sheet represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and will be good and collectible in full (less the amount of any provision, reserve or similar adjustment therefor reflected on the Balance Sheet and the Closing Balance Sheet) in the ordinary course of business, and none of the accounts receivable or other debts (or accounts receivable arising from any such work-in-process or unbilled invoices) is or will be subject to any counterclaim or set-off except to the extent of any such provision, reserve or adjustment.  The accounts payable set forth on the Balance Sheet, and the accounts payable incurred since the Balance Sheet Date through the Closing Date, represent trade payables resulting from bona fide transactions incurred in the ordinary course of business. There has been no change since the Balance Sheet Date in the amount or aging of the work-in-process, accounts receivable, unbilled invoices, or other debts due to the Company, or the reserves with respect thereto, or accounts payable of the Company which would have a Material Adverse Effect.

Section 3.18     Employment Relations.  (a) No unfair labor practice complaint against IMS Holdco or the Company is pending before any Governmental or Regulatory Authority; (b) there is no organized labor strike, dispute, slowdown or stoppage pending or to the knowledge of the Principals, threatened against or involving the Business; (c) there are no labor unions representing or, to the knowledge of the Principals, attempting to represent the employees of IMS Holdco who became employees of the Company; (d) no claim or grievance nor any arbitration proceeding arising out of or under any collective bargaining agreement is pending against any of the Company, IMS Holdco or the Principals and to the knowledge of the Principals, no such claim or grievance has been threatened; (e) no collective bargaining agreement is currently being negotiated by IMS Holdco or the Company; and (f) IMS Holdco did not experience any work stoppage or similar organized labor dispute during the last three years.  Except as set forth on Schedule 3.10, there is no legal action, suit, proceeding or claim pending or, to the knowledge of the Principals, threatened between the Company or IMS Holdco and any employees or former employees of the Company or IMS Holdco, agents or former agents of the Company or IMS Holdco, job applicants or any association or group of any employees of the Company or IMS Holdco, in each case prior to the transfer of the Business to the Company.

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Section 3.19     Employee Benefit Matters.

3.19.1      List of Plans.  Schedule 3.8 to this Agreement lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus, incentive, deferred compensation, stock option, restricted stock, stock appreciation rights, phantom stock rights, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, individual retirement programs or arrangements, and all termination, severance or other Contracts, whether covering one Person or more than one Person, and whether or not subject to any of the provisions of ERISA, which are or have been maintained, contributed to or sponsored by IMS Holdco or the Company or any ERISA Affiliate (as defined in Section 3.19.3) for the benefit of any employee of IMS Holdco or the Company (each item listed on Schedule 3.8 being referred to herein individually, as a "Plan" and collectively, as the "Plans").  For purposes of this Agreement, "foreign benefit plan" means each material plan, program or agreement contributed to, sponsored or maintained by either IMS Holdco, the Company or any ERISA Affiliate that is maintained outside of the United States, or that covers primarily employees residing or working outside of the United States, and which would be treated as a Plan had it been a material United States plan, program or agreement.  IMS Holdco has delivered to the Purchaser, to the extent applicable, a complete and accurate copy of: (a) each written Plan and descriptions of any unwritten Plan (including all amendments thereto whether or not such amendments are currently effective); (b) each summary plan description and all summaries of subsequent material modifications relating to a Plan; (c) each current trust agreement or other funding arrangement with respect to each Plan, including insurance contracts; (d) the most recently filed IRS Form 5500 relating to each Plan, if any; (e) the most recently received IRS opinion, advisory or determination letter for each Plan, if any; and (f) the three most recently prepared actuarial reports (if applicable) and financial statements, if any, in connection with each Plan.  None of the Principals, IMS Holdco or the Company has made any commitment, (i) to create or cause to exist any Plan not set forth on Schedule 3.8 or (ii) to modify, change or terminate any Plan.

3.19.2      Severance.  None of the Plans, nor, except as set forth on Schedule 3.19.2, any employment agreement or other Contract to which IMS Holdco or the Company is a party or bound, (a) provides for the payment of or obligates IMS Holdco or the Company to pay separation, severance, termination or similar-type benefits to any Person; or (b) obligates IMS Holdco or the Company to pay separation, severance, termination or similar-type benefits as a result of any transaction contemplated by this Agreement or as a result of a "change in control," within the meaning of such term under Section 280G of the Code, either alone or in conjunction with any subsequent occurrence.

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3.19.3      Multi-Employer Plans.  None of IMS Holdco, the Company or any ERISA Affiliate has maintained, contributed to or participated within the preceding three years in a multi-employer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) or a multiple employer plan subject to Sections 4063 and 4064 of ERISA, nor has any obligations or liabilities, including withdrawal, reorganization or successor liabilities, regarding any such plan. As used herein, the term "ERISA Affiliate" means any Person that is or has been a member of a controlled group of organizations (within the meaning of Sections 414(b), (c), (m) or (o) of the Code) of which IMS Holdco or the Company is a member.

3.19.4      Welfare Benefit Plans.  Each of IMS Holdco and the Company has expressly reserved the right, in all Plan documents relating to welfare benefits provided to employees, former employees, officers, directors and other participants and beneficiaries, to amend, modify or terminate at any time the Plans which provide for welfare benefits, and neither IMS Holdco nor any Principal is aware of any fact, event or condition that could reasonably be expected to restrict or impair such right. Except as required under Section 601 of ERISA, none of IMS Holdco, the Company or any ERISA Affiliate has made any promises or commitments to provide, and is not obligated to provide (i) medical benefits (including without limitation through insurance) to retirees or former employees of IMS Holdco, the Company or any ERISA Affiliate or their respective dependants, or (ii) life insurance or other death benefits to retired employees or former employees of IMS Holdco, the Company or any ERISA Affiliate or their respective dependants.

3.19.5      Administrative Compliance.  Each Plan is now and has been operated in all material respects in accordance with the requirements of its terms and with all applicable Laws, including, without limitation, ERISA, the Health Insurance Portability and Accountability Act of 1996 (as amended by the Health Information Technology for Economic and Clinical Health Act) and the Code, including, without limitation, all nondiscrimination and minimum coverage requirements of Sections 401(a) and 410(b) thereof, the Age Discrimination in Employment Act, Family and Medical Leave Act, the Americans with Disabilities Act, the Equal Pay Act, Title VII of the Civil Rights Act of 1964, and the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, and the regulations and authorities published thereunder.  Each of IMS Holdco and the Company has performed all obligations required to be performed by it under, is not in any respect in default under or in violation of, and the Principals have no knowledge of any default or violation by any Person under, any Plan.  Except as set forth on Schedule 3.9, no legal action, suit, audit, investigation or claim is pending or threatened with respect to any Plan (other than claims for benefits in the ordinary course), and no fact, event or condition exists that would be reasonably likely to provide a legal basis for any such action, suit, audit, investigation or claim.  All reports, disclosures, notices and filings with respect to such Plans required to be made to employees, participants, beneficiaries, alternate payees and any Governmental or Regulatory Authority have been timely made or an extension has been timely obtained. With respect to any insurance policy providing funding for benefits or an investment alternative under any Plan, (i) no liability or loss shall be incurred by the Company or any such Plan in the nature of a retroactive rate adjustment, loss sharing arrangement or other liability or loss, and (ii) no insurance company issuing any such policy is in receivership, conservatorship, liquidation or similar proceeding and, to the knowledge of the Principals, no such proceedings with respect to any insurer are imminent.

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3.19.6      Tax-Qualification.  Each Plan which is intended to be qualified under Sections 401(a) or 408(k) of the Code is qualified under Sections 401(a) and 408(k) of the Code (and, if applicable, complies with the requirements of Section 401(k) of the Code), and has received a favorable opinion, advisory or determination letter from the IRS that it is so qualified or is covered by a determination letter issued for master or prototype plans.  Each trust established in connection with any Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code is exempt under Section 501(a) of the Code; and no fact or event has occurred or condition exists since the date of such opinion, advisory or determination letter from the IRS which would be reasonably likely to adversely affect the qualified status of any such Plan or the exempt status of any such trust. Each Plan that is a foreign benefit plan which is intended to be qualified with the appropriate Governmental or Regulatory Authority in the relevant country has received a favorable determination that it is so qualified, and each trust established in connection with such foreign benefit plan that is intended to be exempt from taxation has received a favorable determination that it is so exempt.

3.19.7      Funding; Excise Taxes.  There has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan subject to ERISA.  None of IMS Holdco, the Company or any ERISA Affiliate has incurred any liability for any excise tax arising under Sections 4971, 4972, 4973, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980, 4980B, 4980D or 4980E of the Code or any civil penalty arising under Sections 409, 502(i) or 502(l) of ERISA, and no fact, event or condition exists which could give rise to any such liability.  None of IMS Holdco, the Company or any ERISA Affiliate has incurred any liability under, arising out of or by operation of Section 302(c)(11) or Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation ("PBGC") arising in the ordinary course), including, without limitation, any liability in connection with the termination of any employee benefit plan subject to Title IV of ERISA (a "Title IV Plan"); and, no fact, event or condition exists which could give rise to any such liability.  No complete or partial termination has occurred within the five years preceding the Closing Date with respect to any Plan maintained by IMS Holdco, the Company or any ERISA Affiliate, and no reportable event (within the meaning of Section 4043 of ERISA), notice of which has not been waived by the PBGC, has occurred or is expected to occur with respect to any Plan maintained by IMS Holdco, the Company or any ERISA Affiliate. The transactions contemplated by this Agreement and the Conveyance Document will not result in liability to IMS Holdco, the Company or the Purchaser under Section 4069 of ERISA.  No Title IV Plan or Plan subject to Section 302 of ERISA maintained by IMS Holdco, the Company or any ERISA Affiliate had an accumulated funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of the most recently ended plan year of such Plan.  None of the assets of IMS Holdco, the Company or any ERISA Affiliate is the subject of any Lien arising under Section 302(f) of ERISA or Section 412(n) of the Code; none of IMS Holdco, the Company or any ERISA Affiliate has been required to post any security under Section 307 of ERISA or Section 401(a) (29) of the Code relating to any Plan; and no fact or event exists which could give rise to any such Lien or requirement to post any such security.  As of the Closing Date, no Plan which is a Title IV Plan will have an "unfunded benefit liability" (within the meaning of Section 4001(a)(18) of ERISA) and no Plan which is subject to Section 302 of ERISA will have in "accumulated funding deficiency" (within the meaning of Section 302(a)(2) of ERISA).

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3.19.8      Tax Deductions.  All contributions, premiums or payments (including all employer contributions and, if applicable, employee salary reduction contributions) required to be made, paid or accrued with respect to any Plan have been made, paid or accrued on or before their due dates, including extensions thereof.  All such contributions have been fully deducted (to the extent deductible by the Company) or in the case of the current year will be deducted (to the extent deductible by the Company) for income tax purposes and no such deduction has been challenged or disallowed by any Governmental or Regulatory Authority, and no fact or event exists which could give rise to any such challenge or disallowance.

3.19.9      409A.  With respect to each Plan (and any other arrangement involving the Company) that is a nonqualified deferred compensation plan, within the meaning of Section 409A of the Code (a "409A Plan"), no event has occurred and no condition exists, that could subject anyone, including any Person, to any tax, fine, penalty or other liability under Section 409A of the Code ("409A Liability").   None of the transactions contemplated by this Agreement could, directly or indirectly, subject anyone or any Person to any 409A Liability.  Each 409A Plan is and has been operated and administered in good faith compliance with 409A of the Code, Treasury Notice 2005-1, the Final Treasury Reg. Sections 1.409A-1 through 1.409A-6, and any subsequent guidance issued thereunder.

Section 3.20     Interests in Customers, Suppliers, Etc.  Except as set forth on Schedule 3.20, neither the Principals nor to the knowledge of the Principals (without making any inquiry of any member of the Related Group, as hereinafter defined), any officer, director, or employee of IMS Holdco or the Company immediately prior to the Closing Date, any parent, brother, sister, child or spouse of any such officer, director, key executive or employee of the Company, IMS Holdco or the Principals (collectively, the "Related Group"), or any Person controlled by anyone in the Related Group:

(i)     owns, directly or indirectly, any interest in (excepting for ownership, directly or indirectly, of less than 1/4 of 1% of the issued and outstanding shares of any class of securities of a publicly held and traded company), or received or has any right to receive payments from, or is an officer, director, employee, agent or consultant of, any Person which is, or is engaged in business as, a competitor, lessor, lessee, supplier, distributor, sales agent, customer or client of IMS Holdco or the Company;

(ii)    owns, directly or indirectly (other than through the ownership of Membership Units), in whole or in part, any tangible or intangible property (including, but not limited to Intellectual Property), that the Company used in the conduct of the Business, other than immaterial personal items owned and used by employees at their work stations; or

(iii)   has any cause of action or other claim whatsoever against, or owes any amount to, IMS Holdco or the Company, except for claims in the ordinary course of business such as for accrued vacation pay, accrued benefits under employee benefit plans, and similar matters and agreements existing as of the Closing Date.

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Section 3.21     Bank Accounts and Powers of Attorney.  Set forth in Schedule 3.21 is an accurate and complete list showing (a) the name and address of, and account information for, each bank in which IMS Holdco had immediately prior to the transfer of the Business to the Company, or the Company has, an account, credit line or safe deposit box and the names of all Persons authorized to draw thereon or to have access thereto, and (b) the names of all Persons, if any, holding powers of attorney from IMS Holdco or the Company and a summary statement of the terms thereof.

Section 3.22     Compensation of Employees.

(a)           Schedule 3.22 is an accurate and complete list showing: (a) the names and positions of all employees and exclusive consultants of the Company, or IMS Holdco immediately prior to the transfer of the Business by IMS Holdco to the Company, who are, or were being, compensated at an annualized rate of $50,000 or more, together with a statement of the current annual salary, and the annual salary, bonus and incentive compensation paid or payable with respect to calendar years 2008 and 2009, and a statement of the projected annual salary, bonus and incentive compensation payable with respect to the calendar year ended December 31, 2010, and the material fringe benefits of such employees and exclusive consultants not generally available to all employees of IMS Holdco or the Company; (b) all bonus and incentive compensation paid or payable (whether by agreement, custom or understanding) to any employee of IMS Holdco or the Company not listed in clause (a) above for services rendered or to be rendered during calendar years 2008 and 2009; (c) the names of all retired employees, if any, of IMS Holdco or the Company who are receiving or entitled to receive any healthcare or life insurance benefits or any payments from IMS Holdco or the Company not covered by any pension plan to which IMS Holdco or the Company is a party, their ages and current unfunded pension rate, if any; and (d) a description of the current severance and vacation policy of IMS Holdco and the Company.  Neither IMS Holdco nor the Company has, because of past practices or previous commitments with respect to its employees, established any rights on the part of any of its employees to additional compensation with respect to any period after the Effective Date (other than wage increases in the ordinary course of business).  Each of IMS Holdco and the Company has properly classified and compensated all employees and consultants in accordance with all applicable Laws and Orders of any Governmental and Regulatory Authority.

(b)           Except as set forth on Schedule 3.3, the Principals have not agreed or made any written or verbal commitment to give any employee of IMS Holdco or the Company (or any family member or any affiliate of the employee of IMS Holdco or the Company) any portion or share of the Purchase Price in the form of a bonus, gift, award, or any similar type of remuneration.  The Principals agree that, from and after the Effective Date, no portion or proceeds of the Purchase Price shall be used to compensate or give to any employee of IMS Holdco or the Company (or any family member of any employee of IMS Holdco or the Company) a bonus, gift, award, or any similar type of remuneration.

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Section 3.23     No Changes Since the Balance Sheet Date.  From the Balance Sheet Date through the Closing Date, except as specifically stated on Schedule 3.23, neither IMS Holdco nor the Company (i) incurred any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except in the ordinary course of business, (ii) permitted any of its assets to be subjected to any Lien, (iii) sold, transferred or otherwise disposed of any assets except in the ordinary course of business, (iv) made any capital expenditure or commitment therefor which individually or in the aggregate exceeded $25,000; (v) made any distributions or dividend payments on any shares of its capital stock or equity participation rights, or redeemed, purchased or otherwise acquired any units of Membership Interest, or any option, warrant or other right to purchase or acquire any units of Membership Interest or equity participation rights of IMS Holdco or the Company, (vi) made any bonus or profit sharing distribution, (vii) increased or prepaid its indebtedness for borrowed money, except current borrowings under credit lines listed on Schedule 3.8, or made any loan to any Person other than to any employee for normal travel and expense advances, (viii) wrote down the value of any work-in-process, or wrote off as uncollectible any notes or accounts receivable, except write-downs and write-offs in the ordinary course of business, none of which individually or in the aggregate, were material to IMS Holdco or the Company, (ix) granted any increase in the rate of wages, salaries, bonuses or other remuneration of any employee who, whether as a result of such increase or prior thereto, received aggregate compensation from IMS Holdco or the Company at an annual rate of $100,000 or more, or except in the ordinary course of business to any other employees, (x) entered into any employment or exclusive consulting agreement which is not cancelable by IMS Holdco or the Company (and will not be cancelable by the Company) without penalty or other financial obligation within 30 days, (xi) canceled or waived any claims or rights of material value, (xii) made any change in any method of accounting procedures, (xiii) otherwise conducted IMS Holdco's business or the Business or entered into any transaction, except in the usual and ordinary manner and in the ordinary course of its business, (xiv) amended or terminated any agreement which is material to their businesses, (xv) renewed, extended or modified any lease of real property or any lease of personal property, except in the ordinary course of business, or (xvi) agreed, whether or not in writing, to do any of the actions set forth in any of the above clauses.

Section 3.24     Corporate Controls.  To the knowledge of the Principals, no officer, authorized agent, employee, consultant or any other Person while acting on behalf of IMS Holdco or the Company, has, directly or indirectly: used any corporate fund for unlawful contributions, gifts, or other unlawful expenses relating to political activity; made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false or fictitious entry on its books or records; participated in any racketeering activity; or made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment, or other payment of a similar or comparable nature, to any Person, private or public, regardless of form, whether in money, property, or services, to obtain favorable treatment in securing business or to obtain special concessions, or to pay for favorable treatment for business secured or for special concessions already obtained, and neither IMS Holdco nor the Company have participated in any illegal boycott or other similar illegal practices affecting any of its actual or potential customers.

Section 3.25     Brokers.  Except as set forth on Schedule 3.25, no broker, finder, agent or similar intermediary has acted on behalf of the Principals, IMS Holdco or the Company in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees, consulting fees or similar fees or commissions are payable by IMS Holdco, the Company or the Principals in connection therewith based on any agreement, arrangement or understanding with any of them.

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Section 3.26     Repayment of Loans.  All (i) intercompany indebtedness and (ii) indebtedness of the Principals to IMS Holdco or the Company has been repaid in full, other than routine travel expense advances in the ordinary course of business and consistent in amount with past practice.

Section 3.27     Copies of Documents.  The Principals have caused to be made available for inspection and copying by the Purchaser and its advisers, true, complete and correct copies of all documents referred to in this Article III or in any Schedule.  Summaries of all oral contracts contained on Schedule 3.8 are complete and accurate in all material respects.

ARTICLE IV

REPRESENTATIONS OF THE PURCHASER

The Purchaser represents, warrants and agrees to and with IMS Holdco and the Principals as follows:

Section 4.1       Existence and Good Standing.  The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with full corporate power and authority to own its property and to carry on its business all as and in the places where such properties are now owned or operated or such business is now being conducted.

Section 4.2       Execution and Validity of Agreement.  The Purchaser has the full corporate power and authority to make, execute, deliver and perform this Agreement and the transactions contemplated hereby.  The execution and delivery of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby have been duly authorized by all required corporate action on behalf of the Purchaser.  This Agreement has been duly and validly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by IMS Holdco and the Principals, constitutes the legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms.

Section 4.3       Litigation.  There is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Purchaser, any investigation by), any Governmental or Regulatory Authority pending or, to the knowledge of the Purchaser, threatened against the Purchaser or any of their respective properties or rights with respect to this Agreement.  The Purchaser is not subject to any Order entered in any lawsuit or proceeding with respect to this Agreement or the transactions contemplated hereby.

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Section 4.4       Non-Contravention; Approvals and Consents.  The execution, delivery and performance by the Purchaser of its obligations hereunder and the consummation of the transactions contemplated hereby will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation and bylaws of the Purchaser, (b) result in the violation by the Purchaser of any Laws or Orders of any Governmental or Regulatory Authority applicable to the Purchaser or any of its assets or properties, or (c) result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Purchaser to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or, except for such Liens as may be created in connection with an MDC Financing (as defined in Section 6.1 hereof), result in the creation or imposition of any Lien upon any of the respective assets or properties of the Purchaser, under any of the terms, conditions or provisions of any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound. No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound for the execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder or the consummation by the Purchaser of the transactions contemplated hereby

Section 4.5       Brokers.  No broker, finder, agent or similar intermediary has acted on behalf of the Purchaser in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees or similar fees or commissions are payable by the Purchaser in connection therewith based on any agreement, arrangement or understanding with either of them.

ARTICLE V

ACTIONS AT CLOSING

Simultaneously herewith:

Section 5.1       Certified Resolutions.  Each of IMS Holdco and the Company shall have delivered to the Purchaser a copy of the resolutions of its Members and Board of Managers, respectively, authorizing the execution, delivery and performance of this Agreement, the Operating Agreement and the Conveyance Document and the transactions contemplated hereby and thereby, as applicable, certified by one of its officers.

Section 5.2       Required Approvals and Consents.  The Company and the Principals shall have obtained or given, at no expense to the Purchaser or MDC Partners, and there shall not have been withdrawn or modified, any consents or approvals or other actions listed on Schedule 3.9 hereof (including without limitation, obtaining all such consents, approvals and/or waivers required under the Contracts listed on Schedule 3.8).  Each such consent or approval shall be in form reasonably satisfactory to counsel for the Purchaser.

Section 5.3       Operating Agreement.  The Company and IMS Holdco shall have entered into the Operating Agreement, together with the Purchaser.

Section 5.4       Employment Agreements. The Principals shall have entered into Employment Agreements with the Company substantially in the form and to the effect of Exhibit C hereto.

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Section 5.5       Non-Competition/Non-Solicitation/Non-Servicing Agreements.  The Principals and Dawn Du Mont shall have entered into Non-Competition/Non-Solicitation/Non-Servicing Agreements with the Purchaser and the Company in the form and to the effect of Exhibits D-1 and D-2 hereto.

Section 5.6       Conveyance Document.IMS Holdco and the Company shall have entered into the Conveyance Document.

Section 5.7      Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement, the Conveyance Document and all documents incident thereto must be reasonably satisfactory in form and substance to the Purchaser and its counsel, and the Purchaser shall have received copies of all such documents and other evidences as it or its counsel reasonably requested in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

ARTICLE VI

OTHER AGREEMENTS

Section 6.1       Management of the Company.

6.1.1        MDC Financing.  Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the Purchase Price under Section 2.1 hereof and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC Partners and/or one or more of its affiliates, in connection with its or any of its affiliates' current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon the Purchaser's Membership Units; (x) pledge or grant a security interest in or to otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under the Call and/or Sale Request (as such terms are defined in the Operating Agreement) to or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders from time to time (as applicable and collectively, the "Lender"); and (z) have the Company provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Units which have been pledged or assigned to it.

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6.1.2        Effect of Events During Period Membership Units Are Outstanding.  The parties hereto understand and agree that under the terms of the Employment Agreements referred to in Section 5.4, the Principals may be terminated for "cause" or "without cause" (as such terms are defined in such Employment Agreements).  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect IMS Holdco's right to receive the Purchase Price under this Agreement.  Each of the parties hereto agrees that if (a) a Principal ceases to be an employee of the Company during the period commencing as of Effective Date through the end of the last year included in the Measuring Period (as defined in the Operating Agreement) with respect to the exercise of a Call or Sale Request resulting in IMS Holdco no longer owing any Class B Units, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any of its subsidiaries, if any, no party to this Agreement or any Person claiming a right through such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary, if any (x) constitutes a breach by the Purchaser or any of its affiliates of this Agreement, (y) resulted in an adverse effect on the Purchase Price hereunder forming the basis for a claim against the Purchaser or any of its affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 2.1.3 hereof.

Section 6.2       Tax Matters.

6.2.1        Allocation.  The Principals, IMS Holdco and the Purchaser agree (i) to report for federal, state and local income tax purposes, the transactions contemplated by this Agreement in accordance with Situation 1 of Revenue Ruling 99-5, 1999-1 C.B. 434, and (ii) shall not take, or permit any of its Affiliates to take, a position inconsistent with such treatment unless otherwise required by Law.  The Purchaser shall prepare an allocation of the Purchase Price (and of other capitalized costs) among the assets of the Company.  The Company, the Purchaser, each member of the Company and the Principals shall report, act and file all Tax returns (including, but not limited to, Internal Revenue Service form 8594) in all respects and for all purposes consistent with such allocation prepared by the Purchaser and agreed to by IMS Holdco.  IMS Holdco and/or the Principals shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as the Purchaser may reasonably request to prepare such allocation.  None of the Company, any member of the Company, or the Principals shall take any position (whether in audits, tax returns, or otherwise) that is inconsistent with such allocation unless required to do so by applicable law.

6.2.2        Tax Returns.  The parties hereto acknowledge and agree that the Company shall prepare or cause to be prepared and file or cause to be filed all Tax returns for the Company except as otherwise specifically provided herein or in the Operating Agreement.  The Company shall permit the Purchaser to review and comment on each such Tax return described in the preceding sentence prior to filing.

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6.2.3        Tax Cooperation.  The Purchaser, IMS Holdco and the Principals shall cooperate fully, and each shall cause the Company to cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax returns pursuant to Section 6.2.2 or any other Tax returns relating to the operations of IMS Holdco or the Company, and any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include IMS Holdco's retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  The Purchaser, the Principals and IMS Holdco agree to, and each agree to cause the Company to, (A) retain all books and records with respect to Tax matters pertinent to IMS Holdco and Company relating to any taxable period beginning before the Effective Date until the expiration of the statute of limitations (and, to the extent notified by the Purchaser, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, IMS Holdco or the Purchaser, as the case may be, shall allow the other party to take possession of such books and records.

6.2.4        Tax Liability.  To the extent that any of the transactions contemplated by the Conveyance Document give rise to sales and/or use tax liability or other transfer, purchase, stamp or recordation documentary tax and fees (collectively, "Sales Taxes"), the Purchaser shall promptly pay such Sales Taxes to the appropriate tax authorities.  IMS Holdco shall cause the Company to deliver to the Purchaser completed returns in respect of any Sales Taxes required to be filed with respect to the transactions contemplated herein (regardless of whether such returns are informational or show liability for Sales Taxes) for filing with the appropriate taxing authority.  The Purchaser and IMS Holdco hereby waive compliance with the bulk sales laws of any applicable jurisdiction, and IMS Holdco and the Principals hereby agree to indemnify and hold harmless the Purchaser and its Affiliates from and against any claims arising out of or due to the failure to comply with such bulk sales laws.

Section 6.3       Equity Securities of IMS Holdco.

(a)           As long as IMS Holdco beneficially owns any equity interests in the Company, no Principal shall sell or in any other way transfer, assign, distribute, pledge, encumber or otherwise dispose of (a "Transfer") any IMS Holdco Interests (as defined below) without the prior written consent of the Purchaser, except with respect to a Transfer of IMS Holdco Interests pursuant to Section 10.2(c) of the Operating Agreement; provided, however, in the event a Principal desires to Transfer, for estate planning purposes, IMS Holdco Interests to a Family Member (as hereinafter defined) of such Principal, the prior written consent of the Purchaser shall not be unreasonably delayed or withheld.  As used herein, the term "Family Member" of any Principal shall mean (i) the spouse and lineal descendants of such Principal, (ii) the spouses of any such descendants, (ii) the legal representatives of any Person that falls within clause (i) or (ii) hereof, and (iii) the trustee of any trust of which any of the Persons falling with clause (i) or (ii) shall be the only beneficiaries entitled to the income or principal.

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(b)           From and after the Closing, IMS Holdco covenants and agrees that it shall not, directly or indirectly (i) authorize, create, issue, amend or modify any equity interests (whether common or preferred), subscriptions, options, warrants, rights (including "phantom equity rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind, providing for the purchase, issuance or sale of any membership interests, profits interests, capital interests or equity interests of any kind in IMS Holdco (the "IMS Holdco Interests"); or (ii) provide compensation to any employee of the Company or any subsidiary, if any, except to the extent such employee was entitled or eligible to receive such compensation at the time of, and as a result of, the Closing.  IMS Holdco further covenants and agrees that it shall not, directly or indirectly modify or amend IMS Holdco's Second Amended and Restated Operating Agreement (as amended through the Effective Date) dated February 2007, a copy of which is attached hereto as Exhibit E (the "IMS Holdco Operating Agreement").  Notwithstanding anything contained in this Section 6.3(b) to the contrary, the Principals shall be entitled to amend the IMS Holdco Operating Agreement and such amendment shall not be deemed to be in violation of this Section 6.3(b), so long as such amendment only results in a modification with respect to the IMS Holdco Interests owned by the Principals, and does not result in the issuance of any IMS Holdco Interests to any Person other than the Principals.

Section 6.4       Change of Name; Post-Closing Dissolutions.  At the Closing or a soon as practicable after the Closing Date, IMS Holdco shall execute appropriate documents to change its name to a name dissimilar to "Integrated MediaSolutions", and promptly thereafter shall file any necessary documents to reflect the name change with the New York Secretary of State and the appropriate authorities in the other states in which it is qualified to do business.  As soon as practicable after the Closing Date, IMS Holdco shall execute appropriate documents to dissolve each of the Retained Subsidiaries, and promptly thereafter shall file any necessary documents to reflect such dissolutions with the New York Secretary of State and the appropriate authorities in the other states in which the Retained Subsidiaries are qualified to do business.

ARTICLE VII

SURVIVAL; INDEMNITY

Section 7.1       Survival.   Notwithstanding any right of any party hereto fully to investigate the affairs of any other party, and notwithstanding any knowledge of facts determined or determinable pursuant to such investigation or right of investigation, each party hereto shall have the right to rely fully upon the representations, warranties, covenants and agreements of the other parties contained in this Agreement and the Schedules, if any, furnished by any other party pursuant to this Agreement, or in any certificate or document delivered at the Closing by any other party.  Subject to the limitations set forth in Section 7.6, the respective representations, warranties, covenants and agreements of IMS Holdco, the Principals and the Purchaser contained in this Agreement shall survive the Closing.

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Section 7.2       Obligation of IMS Holdco and the Principals to Indemnify.

7.2.1        General Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, IMS Holdco and the Principals hereby agree, jointly and severally, to indemnify the Purchaser and its affiliates, stockholders, officers, directors, employees, agents, representatives and successors, permitted assignees of the Purchaser and their affiliates (individually, a "Purchaser Indemnified Party" and collectively, the "Purchaser Indemnified Parties") against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to pay on behalf of or reimburse the Purchaser Indemnified Parties as and when incurred for, any and all liabilities (including liabilities for Taxes), obligations, losses, damages, penalties, demands, claims, actions, suits, judgments, settlements, penalties, interest, out-of-pocket costs, expenses and disbursements (including reasonable costs of investigation, and reasonable attorneys', accountants' and expert witnesses' fees) of whatever kind and nature (collectively, "Losses"), that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation contained in Article III.B hereof or in any certificate delivered by IMS Holdco or the Principals at the Closing or otherwise in connection herewith; (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of IMS Holdco and the Principals contained in Article III.B hereof or in any certificate delivered by IMS Holdco and the Principals at the Closing or otherwise in connection herewith; (c) any breach or failure by IMS Holdco or any Principal to comply with, perform or discharge any obligation, agreement or covenant by IMS Holdco and the Principals contained in this Agreement; (d) any liability or obligation or any assertion against any Purchaser Indemnified Party, arising out of or relating, directly or indirectly, to any Excluded Asset or any Retained Liability (as such terms are defined in the Conveyance Document) or other liability arising, in whole or in part, out of the conduct of the business of IMS Holdco, the Company or any of its subsidiaries, if any, prior to the Closing except for the Assumed Liabilities (as such term is defined in the Conveyance Document); (e) any litigation or claim disclosed on Schedule 3.10 to this Agreement; (f) any liability or obligation arising out of or relating, directly or indirectly, to the classification of any individual performing services for IMS Holdco (i) as an independent contractor, (ii) as a freelancer, (iii) as a consultant or (iv) in any other capacity other than as an employee; (g) any liability or obligation arising out of or relating, directly or indirectly, to any violation by IMS Holdco, on or prior to the Closing, of the Fair Labor Standards Act or any similar state or local wage and hour Law, Order, ordinance or regulation; and (h) any liability or obligation in connection with that certain Consulting Agreement by and among the Principals, Dawn Du Mont and IMS Holdco dated March 23, 2009.

7.2.2        Special Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, each of the Principals hereby severally agrees to indemnify the Purchaser Indemnified Parties against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to assume liability for, the payment of all Losses that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of or in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of a representation or warranty by such Principal contained in Article III.A hereof; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting the Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of such Principal contained in Article III.A hereof or in any certificate delivered by such Principal at the Closing or otherwise in connection herewith.  Any claim for indemnity made under this Section 7.2.2 shall not be construed as a claim under Section 7.2.1 hereof even if the Purchaser Indemnified Party could have made a claim under Section 7.2.1 hereof in respect of the same matters.

7.2.3        "Losses".  The term "Losses" as used in this Article VII is not limited to matters asserted by third parties against any Purchaser Indemnified Party but includes Losses incurred or sustained by a Purchaser Indemnified Party in the absence of Third Party Claims (as defined in Section 7.4.2 hereof).

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Section 7.3       Obligation of the Purchaser to Indemnify.   Subject to the limitations set forth in Section 7.6.3 hereof, the Purchaser hereby agrees to indemnify IMS Holdco and the Principals (individually an "IMS Holdco Indemnified Party" and collectively, the "IMS Holdco Indemnified Parties")against, and to protect, save and keep harmless the IMS Holdco Indemnified Parties from, and to pay on behalf of or reimburse the IMS Holdco Indemnified Parties as and when incurred for, any and all Losses that may be imposed on or incurred by the IMS Holdco Indemnified Parties as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any IMS Holdco Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (c) any breach or failure by the Purchaser to comply with, perform or discharge any obligation, agreement or covenant by the Purchaser contained in this Agreement.

Section 7.4       Indemnification Procedures.

7.4.1        Non-Third Party Claims.

(a)           In the event that any Person entitled to indemnification under this Agreement (an "Indemnified Party") asserts a claim for indemnification which does not involve a Third Party Claim (as defined in Section 7.4.2) (a "Non-Third Party Claim"), against which a Person is required to provide indemnification under this Agreement (an "Indemnifying Party"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Non-Third Party Claim Notice"), which Non-Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party.

(b)           The Indemnifying Party may acknowledge and agree by written notice (the "Non-Third Party Acknowledgement of Liability") to the Indemnified Party to satisfy the Non-Third Party Claim within 30 days of receipt of the Non-Third Party Claim Notice.  In the event that the Indemnifying Party disputes the Non-Third Party Claim, the Indemnifying Party shall provide written notice of such dispute (the "Non-Third Party Dispute Notice") to the Indemnified Party within 30 days of receipt of the Non-Third Party Claim Notice (the "Non-Third Party Dispute Period"), setting forth a reasonable basis of such dispute.  In the event that the Indemnifying Party shall fail to deliver the Non-Third Party Acknowledgement of Liability or Non-Third Party Dispute Notice within the Non-Third Party Dispute Period, the Indemnifying Party shall be deemed to have acknowledged and agreed to pay the Non-Third Party Claim in full and to have waived any right to dispute the Non-Third Party Claim.  Once the Indemnifying Party has acknowledged and agreed to pay any Non-Third Party Claim pursuant to this Section 7.4.1, or once any dispute under this Section 7.4.1 has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction, subject to the provisions of Section 7.6.1, the Indemnifying Party shall pay the amount of such Non-Third Party Claim to the Indemnified Party within 10 days of the date of acknowledgement or resolution, as the case may be, to such account and in such manner as is designated in writing by the Indemnified Party.

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7.4.2        Third-Party Claims.

(a)           In the event that any Indemnified Party asserts a claim for indemnification or receives notice of the assertion of any claim or of the commencement of any action or proceeding by any Person who is not a party to this Agreement or an affiliate of a party to this Agreement in respect of which such Indemnified Party is entitled to indemnification by an Indemnifying Party under this Agreement (a "Third Party Claim"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Third Party Claims Notice") within 20 days after asserting or learning of such Third Party Claim (or within such shorter time as may be necessary to give the Indemnifying Party a reasonable opportunity to respond to such claim), together with a statement specifying the basis of such Third Party Claim.  The Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party. The Indemnifying Party must provide written notice to the Indemnified Party that it is either (i) assuming responsibility for the Third Party Claim or (ii) disputing the claim for indemnification against it (the "Indemnification Notice").  The Indemnification Notice must be provided by the Indemnifying Party to the Indemnified Party within 15 days after receipt of the Third Party Claims Notice or within such shorter time as may be necessary to give the Indemnified Party a reasonable opportunity to respond to such Third Party Claim (the "Indemnification Notice Period").

(b)           If the Indemnifying Party provides an Indemnification Notice to the Indemnified Party within the Indemnification Notice Period that it assumes responsibility for the Third Party Claim (the "Defense Notice"), the Indemnifying Party shall conduct at its expense the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party.  The Defense Notice shall specify the counsel the Indemnifying Party will appoint to defend such claim ("Defense Counsel"); provided, however, that the Indemnified Party shall have the right to approve the Defense Counsel, which approval shall not be unreasonably withheld or delayed.  In the event that the Indemnifying Party fails to give the Indemnification Notice within the Indemnification Notice Period, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim without the prior consent of the Indemnifying Party and subject to the provisions of Section 7.6.1, the Indemnifying Party will be liable for all costs, expenses, settlement amounts or other Losses paid or incurred in connection therewith.

(c)           In the event that the Indemnifying Party provides in the Indemnification Notice that it disputes the claim for indemnification against it, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim, without the prior consent of the Indemnifying Party. Once such dispute has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction or by mutual agreement of the Indemnified Party and Indemnifying Party, subject to the provisions of Section 7.6.1, the Indemnifying Party shall within 10 days of the date of such resolution or agreement, pay to the Indemnified Party all Losses paid or incurred by the Indemnified Party in connection therewith.

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(d)           In the event that the Indemnifying Party delivers an Indemnification Notice pursuant to which it elects to conduct the defense of the Third Party Claim, the Indemnifying Party shall be entitled to have the exclusive control over the defense of the Third Party Claim and the Indemnified Party will cooperate in good faith with and make available to the Indemnifying Party such assistance and materials as it may reasonably request, all at the expense of the Indemnifying Party.  The Indemnified Party shall have the right at its expense to participate in the defense assisted by counsel of its own choosing.  The Indemnifying Party will not settle the Third Party Claim or cease to defend against any Third Party Claim as to which it has delivered an Indemnification Notice (as to which it has assumed responsibility for the Third Party Claim), without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed; provided, however, such consent may be withheld if, among other reasons, as a result of such settlement or cessation of defense, (i) injunctive relief or specific performance would be imposed against the Indemnified Party, or (ii) such settlement or cessation would lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder.

(e)           If an Indemnified Party refuses to consent to a bona fide offer of settlement which the Indemnifying Party wishes to accept, which provides for a full release of the Indemnified Party and its affiliates relating to the Third Party Claims underlying the offer of settlement and solely for a monetary payment, the Indemnified Party may continue to pursue such matter, free of any participation by the Indemnifying Party, at the sole expense of the Indemnified Party. In such an event, the obligation of the Indemnifying Party shall be limited to the amount of the offer of settlement which the Indemnified Party refused to accept plus the reasonable costs and expenses of the Indemnified Party incurred prior to the date the Indemnifying Party notified the Indemnified Party of the offer of settlement.

(f)           Notwithstanding clause (d) above, the Indemnifying Party shall not be entitled to control, but may participate in, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of (x) that part of any Third Party Claim that (i) seeks a temporary restraining order, a preliminary or permanent injunction or specific performance against the Indemnified Party, (ii) involves criminal allegations against the Indemnified Party or (iii) may lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder and (y) the entire Third Party Claim if such Third Party Claim would impose liability on the part of the Indemnified Party in an amount which is greater than the amount as to which the Indemnified Party is entitled to indemnification under this Agreement.

(g)           A failure by an Indemnified Party to give timely, complete or accurate notice as provided in this Section 7.4 will not affect the rights or obligations of any party hereunder except and only to the extent that, as a result of such failure, any party entitled to receive such notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise directly and materially damaged as a result of such failure to give timely notice.

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Section 7.5       Right of Offset.   Without limiting any other rights or remedies available to it, the Purchaser shall be entitled, subject to the limitations in Section 7.6, to offset any claim for indemnity made pursuant to Section 7.2 and in accordance with Section 7.4, against any payment of the Purchase Price due under Section 2.1; provided, however, the Purchaser may only exercise such right of offset in respect of claims relating to Losses actually incurred by a Purchaser Indemnified Party (in which case the amount of such offset shall be the amount of such actual Loss) or claims actually asserted by a third party (in which case the amount of the offset shall not exceed the Purchaser's good faith estimate of the amount of indemnifiable Losses that will ultimately be payable to a Purchaser Indemnified Party in respect of such claims).  If any such claims for indemnity are resolved in favor of IMS Holdco and the Principals by mutual agreement or otherwise, or if the amount withheld exceeds the amount ultimately payable to a Purchaser Indemnified Party in respect of such claim, the Purchaser shall pay to IMS Holdco the excess amount withheld with respect to such claim, together with interest thereon for the period such amount has been withheld at a rate equal to the published prime rate of interest of J.P. Morgan Chase in New York, in effect from time to time during the relevant period.

Section 7.6       Limitations On and Other Matters Regarding Indemnification.

7.6.1        Indemnity Cushion and Cap.  Subject to Section 7.6.5, neither IMS Holdco nor the Principals shall have any liability to any Purchaser Indemnified Party with respect to Losses arising out of any of the matters referred to in Section 7.2 until such time as the amount of such liability shall exceed $50,000 in the aggregate (in which case IMS Holdco and the Principals shall be liable for all Losses in excess of $50,000.  Notwithstanding anything to the contrary herein, subject to Section 7.6.5 below, the maximum aggregate liability of IMS Holdco and the Principals for indemnity payments under Section 7.2.1 and Section 7.2.2 shall be an amount equal to $30,000,000.

7.6.2        Termination of Indemnification Obligations of IMS Holdco and the Principals.  Subject to Section 7.6.5, the obligation of IMS Holdco and the Principals to indemnify under Section 7.2 hereof shall terminate on June 30, 2012, except as to matters as to which the Purchaser Indemnified Party has made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.3        Termination of Indemnification Obligations of the Purchaser.  The obligation of the Purchaser to indemnify under Section 7.3 hereof shall terminate on June 30, 2012, except as to matters as to which IMS Holdco or the Principals have made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto for such party shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.4        Treatment.  Any indemnity payments by an Indemnifying Party to an Indemnified Party under this Article VIII shall be treated by the parties as an adjustment to the Purchase Price.

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7.6.5        Exceptions.  Each of the limitations set forth above in this Section 7.6 shall in no event (a) apply to any Losses incurred by a Purchaser Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by IMS Holdco or the Principals; (ii) any breach of a representation or warranty contained in Sections 3.1, 3.2, 3.3, 3.6, 3.11, 3.19, 3.25 or any other provision hereof relating to Taxes, (iii) any indemnification obligation under Sections 7.2.1(c), 7.2.1(d), 7.2.1(e), 7.2.1(f), 7.2.1(g) or 7.2.1(h); and (iv) the obligations of IMS Holdco and the Principals set forth in Section 8.1 to pay certain expenses; or (b) apply to any Losses incurred by an IMS Holdco Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by the Purchaser; (ii) any indemnification obligation under Section 7.3(c); and (iii) the Purchaser's obligations set forth in Section 8.1 to pay certain expenses.

7.6.6        Control by MDC Partners.  All decisions and determinations to be made by the Purchaser and/or a Purchaser Indemnified Party under this Article VII shall be made by MDC Partners in the name of and on behalf of the Purchaser and/or such other Purchaser Indemnified Party.

7.6.7        Tax and Insurance Effects.  An indemnity payment due and payable by an Indemnifying Party under this Article VII shall be decreased to the extent of any   net  reduction in Taxes payable by the Indemnified Party resulting from the Losses,  taking into account the tax consequences to the Indemnified Party of the receipt of any indemnity payment due and payable by the Indemnifying Party under this Article VII.  In both cases the tax consequences shall be  determined  by using an assumed marginal tax rate equal to the highest marginal tax rate then in effect for corporate or individual taxpayers, as applicable, in the relevant jurisdiction.  In addition, any amounts otherwise required to be paid by an Indemnifying Party under this Article VII shall be net of any insurance proceeds received by the Indemnified Party.

ARTICLE VIII

MISCELLANEOUS

Section 8.1       Expenses.   Except as otherwise provided in this Agreement, the Purchaser, on the one hand, and the Principals and IMS Holdco, on the other hand, shall pay its, her or his own expenses relating to the transactions contemplated by this Agreement, including, without limitation, the fees and expenses of their respective counsel, financial advisors and accountants.

Section 8.2       Governing Law; Service of Process and Consent to Jurisdiction. The interpretation and construction of this Agreement, and all matters relating hereto (including, without limitation, the validity or enforcement of this Agreement), shall be governed by the laws of the State of New York without regard to any conflicts or choice of laws provisions of the State of New York that would result in the application of the law of any other jurisdiction.  Each of the parties hereto agrees that delivery of process, summons, notice or document in accordance with Section 8.2 shall be effective service of process for any action, suit or proceeding arising out of this Agreement.  Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any court of the State of New York located in New York County in any action, suit or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby, and agrees that any such action, suit or proceeding shall be brought only in such court.  Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such action, suit or proceeding brought in such a court and any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

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Section 8.3       "Person" Defined.   "Person" shall mean and include an individual, a company, a joint venture, a corporation (including any non-profit corporation), an estate, an association, a trust, a general or limited partnership, a limited liability company, a limited liability partnership, an unincorporated organization and a government or other department or agency thereof.

Section 8.4       "Knowledge" Defined.   Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Principals, such term shall be limited to the actual knowledge of any executive officer of IMS Holdco or any Principal, and unless otherwise stated, such knowledge that would have been discovered by any of them after reasonable inquiry.  Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Purchaser, as the case may be, such term shall be limited to the actual knowledge of the executive officers of such entity and unless otherwise stated, such knowledge that would have been discovered by such executive officers after reasonable inquiry.

Section 8.5       "Affiliate" Defined.   As used in this Agreement, an "affiliate" of any Person, shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

Section 8.6       Captions.   The Article and Section captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement.

Section 8.7       Publicity.   Subject to the provisions of the next sentence, no party to this Agreement shall, and the Principals shall use their reasonable efforts to ensure that no representative of IMS Holdco or the Company shall, issue any press release or other public document or make any public statement relating to this Agreement or the matters contained herein without obtaining the prior approval of the Purchaser and the Representative.  Notwithstanding the foregoing, the foregoing provision shall not apply to the extent that MDC Partners is required to make any announcement relating to or arising out of this Agreement by virtue of the securities laws of the United States or Canada or the rules and regulations promulgated thereunder or other rules of the NASDAQ Stock Market, Toronto Stock Exchange or the United States Securities and Exchange Commission or any announcement by any party or the Company pursuant to applicable law or regulations.

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Section 8.8       Notices.   Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to any other party shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next business day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to the Purchaser, addressed to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

c/o MDC Partners Inc.

950 Third Avenue

New York, New York 10022

Attention:  General Counsel

and (which shall not constitute notice)

Davis & Gilbert LLP

1740 Broadway

New York, New York 10019

Attention:  Brad J. Schwartzberg, Esq.

If to IMS Holdco or the Principals, to:

c/o BDR Company, LLC

650 Fifth Avenue

New York, New York 10017

Attention: Robert Ingram

with a copy to (which shall not constitute notice):

Moses & Singer LLP

405 Lexington Avenue

New York, New York 10174

Attention: Solomon P. Friedman, Esq.

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

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Section 8.9       Parties in Interest.   This Agreement may not be transferred, assigned, pledged or hypothecated by any party hereto, other than by operation of law.  Any purported such transfer, assignment, pledge, or hypothecation (other than by operation of law) shall be void and ineffective.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

Section 8.10     Severability.   In the event any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless be binding upon the parties with the same effect as though the void or unenforceable part had been severed and deleted.

Section 8.11     Counterparts.   This Agreement may be executed in two or more counterparts or by facsimile transmission, all of which taken together shall constitute one instrument.

Section 8.12     Entire Agreement.   This Agreement, together with the Schedules and Exhibits hereto, constitutes the sole, exclusive and only agreements of the parties hereto pertaining to the subject matter hereof, contains all of the covenants, conditions and agreements between the parties, express or implied, whether by statute or otherwise, and sets forth the respective rights, duties and obligations of each party to the other party as of the Closing Date. No oral understandings, oral statements, oral promises or oral inducements exist.

Section 8.13     Amendments.   This Agreement may not be amended, supplemented or modified orally, but only by an agreement in writing signed by each of the parties hereto.

Section 8.14     Third Party Beneficiaries.   Each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto and their respective successors and assigns as permitted under Section 8.9, except the Purchaser Indemnified Parties as provided in Article VII hereof.

Section 8.15     Use of Terms.   Whenever the context so requires or permits, all references to the masculine herein shall include the feminine and neuter, all references to the neuter herein shall include the masculine and feminine, all references to the plural shall include the singular and all references to the singular shall include the plural.  Whenever used in this Agreement, the terms "Dollars" and "$" shall mean United Stated Dollars.

Section 8.16     "Liens" Defined.   With respect to any asset, a "Lien" shall mean (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (other than an operating lease) (or any financial lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

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Section 8.17     No Strict Construction; Representation by Counsel.  The language used in this Agreement will be deemed to be the language chosen by the parties hereto 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.  The provisions of this Agreement shall be construed according to their fair meaning and neither for nor against any party hereto irrespective of which party caused such provisions to be drafted.  Each of the parties acknowledges that it has been represented by an attorney in connection with the preparation and execution of this Agreement.

Section 8.18     Representative.  Each of the Principals and IMS Holdco hereby appoints Ingram as his, her or its exclusive agent and attorney-in-fact (the "Representative") (i) to give and receive notices and communications with respect to the provisions of this Agreement, (ii) to amend the terms of this Agreement, (iii) to agree to, negotiate, enter into settlements or compromises of matters arising under the provisions of this Agreement, and (iv) to take any and all actions necessary or appropriate in the judgment of the Representative to be taken on behalf of the Principals and IMS Holdco under such provisions of this Agreement.  Such agency and that of any successor representative is irrevocable and coupled with an interest; provided, however, the Representative shall have no authority to act on behalf of any Principal or IMS Holdco with respect to an indemnity claim under Section 7.2.2.  In the event the Representative refuses to, or is no longer capable of, serving as the Representative hereunder, the other Principals shall promptly appoint a successor Representative who shall thereafter be the successor Representative hereunder and the Representative shall serve until such successor is duly appointed and qualified to act hereunder.  The Principals and IMS Holdco hereby agree that the Representative shall not have any liability to the Company or any of its subsidiaries, if any, for any action he takes or omits to take hereunder (or under any agreement or instrument referred to herein) in his capacity as Representative, unless such action or omission constitutes bad faith or willful misconduct by the Representative.  Notices or communications to or from the Representative shall constitute notice to or from the Principals and/or IMS Holdco in respect of matters relating to this Agreement.  Any decision, act, consent or instruction of the Representative shall constitute a decision of all of the Principals and IMS Holdco, and shall be final, binding and conclusive upon each Principal and IMS Holdco, and the Purchaser may rely upon any decision, act, consent or instruction of the Representative as being the decision, act, consent or instruction of IMS Holdco and each and every Principal.

Section 8.19     Guaranty.  MDC Partners hereby agrees to pay, or cause the Purchaser to pay, when due, each payment of Purchase Price required pursuant to Article II above and any indemnification obligations of the Purchaser pursuant to Article VII above.

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IN WITNESS WHEREOF, the parties hereto have executed this Membership Unit Purchase Agreement, on the day and year first above written.

MF + P ACQUISITION CO.
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary
INTEGRATED MEDIA SOLUTIONS, LLC
By:	/s/ Robert Ingram
	Name: Robert Ingram
	Title: Chief Executive Officer
/s/
Robert Ingram
/s/
Desiree Du Mont
/s/
Ron Corvino
MDC PARTNERS INC. (solely with respect to Sections 7.6.6 and 8.19)
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: General Counsel and Corporate Secretary

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TABLE OF CONTENTS

ARTICLE I
SALE OF THE PURCHASED UNITS
Section 1.1  Sale of the Purchased Units	1
ARTICLE II
PURCHASE PRICE AND CLOSING
Section 2.1  Purchase Price; Working Capital Adjustment	2
2.1.1  Purchase Price	2
2.1.2  Definitions	6
2.1.2  Other Definitions	6
2.1.3  Accounting Procedures	7
2.1.4  Examination of Books and Records	8
Section 2.2  Closing	8
Section 2.3  Third Party Consents	9
Section 2.4  Further Assurance; Post Closing Cooperation	9
ARTICLE III
REPRESENTATIONS OF IMS HOLDCO AND THE PRINCIPALS
Section 3.1  Execution and Validity of Agreements; Restrictive Documents	9
3.1.1  Execution and Validity	9
3.1.2  No Restrictions	10
3.1.3  Non-Contravention	10
3.1.4  Approvals and Consents	10
Section 3.2  Existence and Good Standing	10
Section 3.3  Capital Stock; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments	11
Section 3.4  Financial Statements and No Material Changes	11
Section 3.5  Books and Records	12
Section 3.6  Title to Properties; Encumbrances; No Prior Activities	12
3.6.1  Title to Properties; Encumbrances	12
3.6.2  No Prior Activities	12
Section 3.7  Real Property	13
3.7.1  Owned Real Property	13
3.7.2  Leased Real Property	13
Section 3.8  Contracts	14
Section 3.9  Non-Contravention; Approvals and Consents	15
Section 3.10  Litigation	15
Section 3.11  Taxes	16
Section 3.12  Liabilities	17

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Section 3.13  Insurance	17
Section 3.14  Intellectual Properties	18
3.14.1  Definitions	18
3.14.2  Representations	19
3.14.3  Privacy and Security	20
Section 3.15  Compliance with Laws	20
Section 3.16  Client Relations	21
Section 3.17  Accounts Receivable; Work-in-Process; Accounts Payable	21
Section 3.18  Employment Relations	21
Section 3.19  Employee Benefit Matters	22
3.19.1  List of Plans	22
3.19.2  Severance	22
3.19.3  Multi-Employer Plans	23
3.19.4  Welfare Benefit Plans	23
3.19.5  Administrative Compliance	23
3.19.6  Tax-Qualification	24
3.19.7  Funding; Excise Taxes	24
3.19.8  Tax Deductions	25
3.19.9  409A	25
Section 3.20  Interests in Customers, Suppliers, Etc.	25
Section 3.21  Bank Accounts and Powers of Attorney	26
Section 3.22  Compensation of Employoees	26
Section 3.23  No Changes Since the Balance Sheet Date	27
Section 3.24  Corporate Controls	27
Section 3.25  Brokers	27
Section 3.26  Repayment of Loans	28
Section 3.27  Copies of Documents	28
ARTICLE IV
REPRESENTATIONS OF THE PURCHASER
Section 4.1  Existence and Good Standing	28
Section 4.2  Execution and Validity of Agreement	28
Section 4.3  Litigation	28
Section 4.4  Non Contravention; Approvals and Consents	29
Section 4.5  Brokers	29
ARTICLE V
ACTIONS AT CLOSING
Section 5.1  Certified Resolutions	29
Section 5.2  Required Approvals and Consents	29
Section 5.3  Operating Agreement	29
Section 5.4  Employment Agreements	29
Section 5.5  Non-Competition/Non-Solicitation/Non-Servicing Agreements	30
Section 5.6  Conveyance Document	30

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Section 5.7  Proceedings	30
ARTICLE VI
OTHER AGREEMENTS
Section 6.1  Management of the Company	30
6.1.1  MDC Financing	30
6.1.2  Effect of Events During Period Membership Units Are Outstanding	31
Section 6.2  Tax Matters	31
6.2.1  Allocation	31
6.2.2  Tax Returns	31
6.2.3  Tax Cooperation	32
6.2.4  Tax Liability	32
Section 6.3  Equity Securities of IMS Holdco	32
Section 6.4  Change of Name	33
ARTICLE VII
SURVIVAL; INDEMNITY
Section 7.1  Survival	33
Section 7.2  Obligation of IMS Holdco and the Principals to Indemnify	34
7.2.1  General Indemnity	34
7.2.2  Special Indemnity	34
7.2.3  Losses	34
Section 7.3  Obligation of the Purchaser to Indemnify	35
Section 7.4  Indemnification Procedures	35
7.4.1  Non-Third Party Claims	35
7.4.2  Third-Party Claims	36
Section 7.5  Right of Offset	38
Section 7.6  Limitations On and Other Matters Regarding Indemnification	38
7.6.1  Indemnity Cushion and Cap	38
7.6.2  Termination of Indemnification Obligations of IMS Holdco and the Principals	38
7.6.3  Termination of Indemnification Obligations of the Purchaser	38
7.6.4  Treatment	38
7.6.5  Exceptions	39
7.6.6  Control by MDC Partners	39
7.6.7  Tax and Insurance Effects	39
ARTICLE VIII
MISCELLANEOUS
Section 8.1  Expenses	39
Section 8.2  Governing Law; Service of Process and Consent to Jurisdiction	39
Section 8.3  "Person" Defined	40
Section 8.4  "Knowledge" Defined	40
Section 8.5  "Affiliate" Defined	40

47

Section 8.6  Captions	40
Section 8.7  Publicity	40
Section 8.8  Notices	41
Section 8.9  Parties in Interest	42
Section 8.10  Severability	42
Section 8.11  Counterparts	42
Section 8.12  Entire Agreement	42
Section 8.13  Amendments	42
Section 8.14  Third Party Beneficiaries	42
Section 8.15  Use of Terms	42
Section 8.16  "Liens" Defined	42
Section 8.17  No Strict Construction; Representation by Counsel	43
Section 8.18  Representative	43
Section 8.19  Guaranty	43

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INDEX OF DEFINED TERMS

2010 Growth Payment	5
409A Liability	26
409A Plan	26
Accountants	7
Additional Payments	6
Adjusted GAAP PBT	6
affiliate	42
Agreement	1
Applicable Percentage	6
Balance Sheet	12
Balance Sheet Date	12
Business	11
Closing	8
Closing Balance Sheet	7
Closing Date	9
Closing Date Working Capital	7
Code	6
Company	1
Company Indemnified Parties	36
Company Indemnified Party	36
Contracts	10
Conveyance Document	1
Data	20
Defense Counsel	38
Defense Notice	38
Desiree	1
Environmental Laws and Orders	21
ERISA	23
ERISA Affiliate	23
Extra Payment	5
Family Member	34
FAP	3
FIAP	5
FOAP	4

GAAP	7
Governmental or Regulatory Authority	10
IMS	1
IMS Interests	33
Indemnification Notice	38
Indemnification Notice Period	38
Indemnified Party	37
Indemnifying Party	37
Independent Auditors	7
Ingram	1
Initial Top-Up Amount	3
Intellectual Property	18
Intellectual Property of the Company	19
JAMS	8
Laws	10
Lender	32
Liabilities	17
Licensed Intellectual Property	19
Lien	44
Losses	35
LTG Rate Increase	3
Material Adverse Effect	21
MDC Financing	32
MDC Partners	1
Membership Units	1
Non PII	20
Non-Third Party Acknowledgement of Liability	37
Non-Third Party Claim	37
Non-Third Party Claim Notice	37
Non-Third Party Dispute Notice	37
Non-Third Party Dispute Period	37
Off-the-Shelf Software	19
Operating Agreement	1
Operative Documents	44
Orders	10
PBGC	25
Person	42
PII	20
Plan	23

Plans	23
Principal	1
Principals	1
Privacy Policy	20
Purchase Price	2
Purchased Units	1
Purchaser	1
Purchaser Indemnified Parties	35
Purchaser Indemnified Party	35
Real Property Lease	13
Real Property Leases	13
Reconciliation Period	7
Registered IP	19
Related Group	26
Representative	45
Required Permits	21
Retained Subsidiaries	13
Ron	1
Sale Event	6
Sales Taxes	33
SAP	3
Special Determination	7
TAP	4
Target Working Capital	7
Taxes	16
Third Party Claim	37
Third Party Claims Notice	37
Title IV Plan	25
Top-Up Payments	2
Transfer	33
Unregistered IP	19
Working Capital Payment	2
Working Capital Shortfall	2

EXHIBITS

Exhibit A	Conveyance Document
Exhibit B	Operating Agreement
Exhibit C	Employment Agreements
Exhibit D-1	Principals Non-Competition/Non-Solicitation/Non-Servicing Agreements
Exhibit D-2	Dawn Du Mont Non-Competition/Non-Solicitation/Non-Servicing Agreements
Exhibit E	IMS Holdco's Second Agreement and Restated Operating Agreement

SCHEDULES

Schedule 2.1.1	Payment of the Purchase Price
Schedule 3.2	Good Standing
Schedule 3.3	No Options or Restrictions
Schedule 3.4(A)	Financial Statements
Schedule 3.4(B)	GAAP Exceptions
Schedule 3.6	Liens
Schedule 3.7.2	Real Property Leases
Schedule 3.8	Contracts
Schedule 3.9	Approvals and Consents
Schedule 3.10	Litigation
Schedule 3.11	Taxes
Schedule 3.12	Liabilities
Schedule 3.13	Insurance
Schedule 3.14.2	Intellectual Property
Schedule 3.16	Client Relations
Schedule 3.19.2	Severance
Schedule 3.20	Interests in Customers, Suppliers, Etc.
Schedule 3.21	Bank Accounts and Powers of Attorney
Schedule 3.22	Compensation of Employees
Schedule 3.23	No Changes Since the Balance Sheet Date
Schedule 3.25	Brokers

EX-10.3.2 7 v183284_ex10-3x2.htm

Exhibit 10.3.2

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

INTEGRATED MEDIA SOLUTIONS PARTNERS LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") dated May 6, 2010 and effective as of April 30, 2010, is made and entered into by and among INTEGRATED MEDIA SOLUTIONS PARTNERS LLC, a Delaware limited liability company (the "Company"), MF + P ACQUISITION CO., a Delaware corporation ("MDC Holdco"), and INTEGRATED MEDIA SOLUTIONS, LLC, a New York limited liability company ("IMS Holdco", together with MDC Holdco, are collectively referred to as the "Members" and individually a "Member").   Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article XIII.

WHEREAS, IMS Holdco formed the Company as its sole member, owning 100% of the Membership Interests (as defined in Section 13.1 hereof) in the Company, and entered into a Limited Liability Company Agreement of the Company (the "Original Operating Agreement");

WHEREAS, pursuant to a General Assignment, Bill of Sale and Assumption Agreement (the "Conveyance Document"), effective as of April 30, 2010 (the "Effective Date"), a copy of which has been delivered to MDC Holdco, IMS Holdco transferred to the Company substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business (the "Business"), in exchange for 100% of the Membership Interests;

WHEREAS, pursuant to the Membership Unit Purchase Agreement effective as of the Effective Date (the "Purchase Agreement"), IMS Holdco sold, transferred, conveyed and delivered to MDC Holdco 750 Class A Units, representing 100% of the issued and outstanding Class A Units (the "Purchase Transaction"), such that immediately after giving effect to such transfer, the issued and outstanding Units of the Company were as follows: MDC Holdco – 750 Class A Units; IMS Holdco – 250 Class B Units; and

WHEREAS, the Members now desire to enter into this Agreement to supersede the Original Operating Agreement, to provide for the admission of MDC Holdco as a member, and to promote their interests and those of the Company by making provisions in this Agreement to govern their relations as Members;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members and the other parties hereto do hereby agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

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

Section 1.3           Offices; Registered Agent.  The principal place of business of the Company shall be 650 Fifth Avenue, New York, New York, 10017, or such other principal place of business as the Managers (as defined in Section 11.5) may from time to time determine.  The Company may have, in addition to such office, such other offices and places of business at such locations, both within and without the State of Delaware, as the Managers may from time to time determine or the business and affairs of the Company may require.  The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person (as defined in Section 13.1) as the Managers may designate from time to time in the manner provided by law.

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

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

ARTICLE II

MEMBERS; MEMBERSHIP INTERESTS; UNITS

Section 2.1           Members and Membership Units.  The Company is authorized to issue 750 Class A Units and 250 Class B Units, all of which have been issued and are outstanding, and allocated among the Members as set forth on Schedule 2.1.  Upon any change in the Members or Units, including by reason of the issuance of additional Units, the Members agree to complete a revised Schedule 2.1 hereof, which shall be deemed incorporated into this Agreement as part of this Section 2.1.

2

Section 2.2           Classes of Units.

(a)           Class A Units.  The Class A Units shall have the following characteristics: (i) an initial Unit Capital Account (as defined in Section 7.2(e) hereof), (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

(b)           Class B Units. The Class B Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

Section 2.3           Transfer of Units.  In the event a Member sells all or a portion of its Membership Interests in accordance with Article X hereof, then effective as of the date of the sale and subject to compliance with Section 10.1 hereof, such Member shall automatically cease to be a Member in the Company as to such sold Unit.  Upon the acquisition by MDC Holdco of any other Units pursuant to the procedures set forth in Article X hereof, MDC Holdco shall have all of the rights, powers and duties associated with such Units.

Section 2.4           Additional Members and Membership Interests.  Additional Persons may be admitted to the Company as Members and Membership Interests may be created and issued to such Persons on such terms and conditions as the Members shall approve, subject to Section 4.1 hereof.  The terms of admission or issuance may specify the creation of different classes or groups of Members having different rights, powers and duties.  The creation of any new class or group of Members shall be indicated in an amendment to this Agreement in accordance with Section 14.4 hereof and such amendment shall indicate the different rights, powers and duties of the classes or groups of Members.

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

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

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Section 2.7           Certification of Units. The Company may at its election issue certificates to the Members representing the Units held by such Member. If such election is approved by the Managers, then this Section 2.7 shall apply and not otherwise:

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

(b)           The transfer register or transfer book and blank certificates shall be kept by the secretary of the Company or by any transfer agent or registrar approved by the Managers for that purpose. The certificates shall be numbered and registered in the share or unit register or transfer books of the Company as they are issued. Except to the extent that the Company shall have received written notice of an assignment of any Unit in the Company, the Company shall be entitled to treat the Person in whose name any certificates issued by the Company stand on the books of the Company as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such Unit on the part of any other Person.

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

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

ARTICLE III

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS

Section 3.1           Capital Account; Capital Contributions.

(a)           The Capital Accounts of the Members shall be computed in accordance with Section 7.2 below.  The Members hereby recognize the following to be the factual basis on which the Capital Accounts shall be so computed: (i) prior to the purchase of Class A Units by MDC Holdco from IMS Holdco pursuant to the Purchase Agreement, IMS Holdco made a capital contribution to the Company in an amount equal to the fair market value of the Business, which fair market value the Members agreed was equal to 133.33% of the fair market value of the actual consideration paid by MDC Holdco to IMS Holdco pursuant to the Purchase Agreement (the value of such consideration being the "Purchase Consideration Value"); (ii) pursuant to the Purchase Agreement, MDC Holdco acquired 100% of the Class A Units and 75% of IMS Holdco's former aggregate Capital Account in the Company and accordingly the Capital Account of MDC Holdco equals the Purchase Consideration Value; and (iii) the remaining aggregate Capital Account of IMS Holdco equals 33.33% of the Purchase Consideration Value.

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(b)           The Members agree that for purposes of this Agreement, each of MDC Holdco and IMS Holdco shall be deemed to have made initial Capital Contributions equal to their initial Capital Account balance as set forth in Section 3.1(a) above, and on Schedule A hereto, which shall be adjusted by the Members as soon as the final Purchase Consideration Value has been determined in accordance with the Purchase Agreement.  The Members also agree that the Gross Asset Values (as defined in Section 13.1 below) of all Business assets are to be determined as set forth in Section 8 of the Conveyance Document (as defined in the Purchase Agreement).

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

Section 3.3           Allocation of Profits and Losses.

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

(i)           Profits shall be allocated as follows:

(A) First, to those Members to whom GAAP PBT (as such term is defined in Section 13.1) for such calendar year and each prior calendar year since the Effective Time has been allocated under Section 3.5 until the excess of the cumulative allocations to each such Member of Profits for such calendar years under this Section 3.3(a)(i) over any cumulative allocations to each such Member of Losses under Section 3.3(a)(ii) for such calendar years equals the amount of GAAP PBT so allocated to each such Member during such calendar years; and

(B) Thereafter, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(ii)           Losses shall be allocated as follows:

(A) First, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(B) over Losses allocated under this Section 3.3(a)(ii)(A), 100% to the Members in the proportion in which such excess was allocated;

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(B) Second, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(A) over Losses allocated under this Section 3.3(a)(ii)(B), 100% to the Members in the proportion in which such excess was allocated;

(C) Third, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(b)          In the case of any property contributed to the Company by any Member which at the time of contribution has an adjusted tax basis which differs from its fair market value, items of Profits, Losses, income, gain and deduction for income tax purposes shall be allocated as required under Section 704(c) of the Code to take into account such difference.   The parties agree that such allocations will be made following the traditional method with remedial allocations.

(c)           Notwithstanding anything to the contrary in this Agreement, all items of income attributable to any: (A) change in method of accounting for a taxable period ending on or prior to the Effective Time or a change in method required on account of the transactions contemplated to occur on the Effective Time, whether under Section 481 or otherwise; (B) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); and (C) installment sale or open transaction disposition made on or prior to the Effective Time, shall be allocated 100% to IMS Holdco.  The Members agree that if the allocation provided for in the preceding sentence cannot be done, the Managers shall cause the Company to allocate items of income, gain, deduction, and loss among the Members to achieve substantially the same results as if such allocation had been done.  In addition, an amount of income equal to any income triggered to MDC Holdco and/or the Company on account of any deemed assumption by either or both of them of any deferred revenue of IMS Holdco as of the Effective Time shall be allocated 100% to IMS Holdco.

(d)           Any item of taxable income, gain, loss or deduction of the Company (as well as any credits or the basis of property to which such credits apply) as determined for federal income tax purposes shall be allocated in the same manner as the corresponding income, gain, loss, or deduction is allocated under Section 3.3(a) (as modified by Section 3(e)).  Allocations pursuant to this Section 3.3(d) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

(e)           Special Allocations and Limitations

(1)           In the event a Member unexpectedly receives in any taxable year any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) which cause or increase an Adjusted Capital Account Deficit (as defined in Section 13.1) of such Member, items of Company income and gain shall be specially allocated to such Member in such taxable year (and, if necessary in subsequent taxable years), in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible.

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(2)           Notwithstanding the provisions of Section 3.3(a), in no event shall Losses of the Company be allocated to a Member if such allocation would result in such Member’s having an Adjusted Capital Account Deficit at the end of any taxable year.  All Losses in excess of the limitation set forth in this Section 3.3(e)(2) shall be allocated to the Members with positive balances in their Capital Accounts, as a class pro rata in proportion to such positive balances.

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

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

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

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

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

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

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

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

(5)           Solely for purposes of determining a Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Members' interests in Company profits are in proportion to their Units, and, for purposes of allocating Nonrecourse Liabilities (as defined in Section 13.1) of the Company among the Members pursuant to Treasury Regulation Section 1.752-3(a)(3), the parties agree that each Member's interest in Company profits shall equal its Units.

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

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(7)           For purposes of determining the character (as ordinary income or capital gain) of any Profits allocated to the Members pursuant to this Section 3, such portion of Profits that is treated as ordinary income attributable to the recapture of depreciation shall, to the extent possible, be allocated among the Members in the proportion which (i) the amount of depreciation previously allocated to each Member bears to (ii) the total of such depreciation allocated to all Members.  This Section 3.3(f)(7) shall not alter the amount of allocations among the Members pursuant to this Section 3, but merely the character of income so allocated.

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

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

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

Section 3.4           Distributions.

(a)           Subject to the making of the Tax Distributions (as defined in clause (b) below), to the extent permitted by the Act, the Company shall distribute Cash Flow (as defined in Section 13.1) of the Company as follows:

(i) first, distributions of Cash Flow generated by the Company in respect of any calendar year, shall be distributed 100% to the holders of the Class A Units in an amount equal to the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class A Distribution Shortfall Amount (as defined in Section 13.1) for such year; and

(ii) thereafter, distributions of Cash Flow generated by the Company in respect of any calendar year shall be distributed to the holders of the Class B Units in an amount no greater than the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class B Distribution Shortfall Amount (as defined in Section 13.1) for such year.

Distributions described above shall be made on a quarterly basis, generally in arrears, based upon the financial statements of the Company and its subsidiaries then available to the Managers.

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(b)           Notwithstanding anything in this Agreement to the contrary, in preference to any other distributions pursuant to this Section 3.4, the Members shall cause the Company to distribute cash of the Company to its Members on a quarterly (or other reasonable) basis at least sufficient for each Member to meet such Member's required federal, state and local income tax payments in respect of such Member's distributive share of the Company's taxable income for the current or the prior fiscal year calculated at the maximum individual tax rates for a resident of New York City taking into account the deduction allowable for federal income taxes of any state income taxes (which tax payments shall include (i) estimated tax payments in respect of the current fiscal year and (ii) any remaining payments of income tax on account of the prior fiscal year not funded out of Tax Distributions in respect of estimated payments for such prior fiscal year) (the "Tax Distributions").  For purposes hereof, if a Member is a "pass-through" entity for income tax purposes, the Tax Distributions required hereby shall be made in amounts which are at least sufficient to meet the tax payment requirements of the stockholders or members of such Member in respect of their allocated Profits hereunder. For purposes of Section 3.4(a) hereof, Tax Distributions shall be deemed to be distributions of Cash Flow at the time of such Tax Distribution.

(c)           Any distribution of funds prior to the end of the fiscal year in which such funds came into possession of the Company shall be treated as a non-interest-bearing loan (a "draw") from the Company to each Member receiving such draw and shall be deemed repaid by reducing the amount of each subsequent distribution to the Member receiving such draw pursuant to this Section 3.4(c) by the lesser of (i) the entire amount otherwise distributable to the Member receiving such draw, and (ii) the entire amount of any unrepaid draws pursuant to this Section 3.4(c).

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

Section 3.5           Allocation of GAAP PBT.

(a)           GAAP PBT (as defined in Section 13.1) for purposes of this Agreement shall be allocated for any calendar year as follows:

(i) first, GAAP PBT shall be allocated to the Loss Account (as defined in Section 3.5(b) below) until such Loss Account shall have been brought to zero;

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(ii) next, with respect to calendar years 2010 through 2014, GAAP PBT generated by the Company in such years shall be allocated 100% to the holders of the Class A Units; and

(iii) thereafter, with respect to all calendar years from and after 2015,  GAAP PBT generated by the Company in such year shall be allocated to the Members in accordance with the number of Units held by such Member.

(b)           Allocation of Annual Loss.  In the event that GAAP PBT for any year shall be less than zero, such amount (expressed as a negative) shall be allocated to a loss account (the "Loss Account"), which shall be required to be brought to zero through allocations of future year allocations of GAAP PBT pursuant to Section 3.5(a)(i) before allocations of positive GAAP PBT shall be made to the Members.

ARTICLE IV

MANAGEMENT

Section 4.1           Management of the Company.

(a)           Except to the extent otherwise provided for herein, the powers of the Company shall be exercised by and under the authority of, and the business and affairs of the Company shall be managed under, the direction of the Managers of the Company. Notwithstanding the foregoing or any other provisions hereof to the contrary, until MDC Holdco or one of its Affiliates has purchased and paid for 100% of the Class B Units the taking of any of the actions listed in clauses (i) through (xv)below shall require the mutual agreement of MDC Holdco and IMS Holdco.  The mutual agreement of MDC Holdco and IMS Holdco may be obtained by a vote at a meeting of the Members or by the written consent of MDC Holdco and IMS Holdco.

(i)            a sale, lease or other disposition of all or substantially all or a significant part of the assets or business of the Company or any subsidiary thereof, except in connection with (x) a sale, lease or other disposition of all or substantially all or a significant part of the assets or business or stock (an "MDC Sale") of MDC Partners Inc. ("MDC Partners"); (y) an MDC Financing (as defined in Section 4.1(e) hereof) or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing; or (z) any transfer by MDC Holdco or any of its Affiliates of their respective interest in the Company to another wholly-owned subsidiary of MDC Partners (an "MDC Internal Transfer") (for purposes of this Agreement, in the event of any MDC Internal Transfer, the term MDC Holdco as used in this Agreement shall include any such transferee);

(ii)           a merger, consolidation or amalgamation of the Company or any subsidiary with and into another Person or of another Person with and into the Company or any subsidiary, except in connection with an MDC Sale, an MDC Internal Transfer or an MDC Financing;

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(iii)          the authorization or issuance of additional Class A Units, Class B Units or other equity ownership interests in, or the granting of any other rights to participate in the proceeds of the sale of assets of the Company which are dilutive to IMS Holdco; or the incurring of debt for borrowed money in excess of the amount provided for in the approved annual operating budget or capital expenditure budget, except in connection with borrowings under the terms and conditions of the MDC Cash Management Program (and in compliance with Section 4.1(d) below);

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

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

(vi)          a relocation of the Company's offices from either its current office location at (a) 650 Fifth Avenue, New York, New York or (b) 50 S. Beverly Drive, Beverly Hills, California, at any time while either lease thereon remains in effect under such lease's terms in effect as of the Effective Date, unless such relocation occurs as a result of the failure to obtain the consent of the landlord in connection with the assignment of such lease;

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

(viii)        any change in the name of the Company;

(ix)           entering into any business other than, or any transaction outside of, the normal business activities of the Company and any of its subsidiaries and related activities other than a MDC Internal Transfer;

(x)           the payment by the Company of any general management fee to any Member or one of such Member's Affiliates;

(xi)           a fundamental change to the nature of the business of the Company and its subsidiaries, taken as a whole;

(xii)          the formation of any subsidiaries of the Company or any of its subsidiaries;

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(xiii)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal (as defined in the Purchase Agreement) is in the active employ of the Company, (x) modify the salary, bonus or other incentive compensation of any employee of the Company or any of its subsidiaries, or (y) adopt or amend any profit sharing or other employee benefit or compensation plan for the Company or any of its subsidiaries; provided, however, this clause (xiii) shall not apply to the employment terms of Robert Ingram, whose employment terms are set forth in his Employment Agreement, or any other individual in the position of Chief Executive Officer of the Company;

(xiv)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal is in the active employ of the Company, hire, or fire "without cause", any employee of the Company or any of its subsidiaries whose annual salary is less than $200,000, without the consent of the then Chief Executive Officer of the Company (or if there is more than one such Chief Executive Officer, then any of such Chief Executive Officers, it being understood that as of the date of this Agreement Robert Ingram is the Chief Executive Officer of the Company); and

(xv)         the delegation to any Manager or to any committee of the Board of Managers of the Company or any subsidiary or to any officer of the Company or any subsidiary the power to take any of the actions referred to in the foregoing clauses before obtaining the authorization required by this Section 4.1(a).

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

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

(d)          The Members hereto further agree that the operations of the Company and its subsidiaries shall be conducted (i) subject to Section 4.1(g) below, to participate in the overall cash management and banking program of MDC Partners (the "MDC Cash Management Program"), and (ii) to comply on a timely basis with the financial reporting and budgeting procedures of MDC Partners as from time to time in effect, which procedures require the approval of an annual operating budget, capital expenditure budget and cash flow projections and require management of operating companies to seek approval prior to material deviations from such budgets.

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(e)           Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the purchase price pursuant to the Purchase Agreement and for other good and valuable consideration, the Members hereby (i) agree that MDC Partners  and/or one or more of its Affiliates, in connection with its or any of its Affiliates’ current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon MDC Holdco's Membership Interests; (x) pledge or grant a security interest in or otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under any Call to, or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders from time to time (as applicable and collectively, the "Lender"); and (z) have the Company and/or its subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned to it.

(f)           MDC Partners shall cause sufficient working capital to be made available to the Company as shall be determined by the Board of Managers to be reasonably necessary to execute upon its approved annual operating and capital expenditure budgets, but in no event shall MDC Partners or any of its Affiliates be required to fund losses of the Company or any of its subsidiaries.  Such working capital shall be provided to the Company on terms consistent with the MDC Cash Management Program and accordingly, neither MDC Partners nor any of its Affiliates shall be required to provide working capital in the event that the consolidated cash balance of the Company in the MDC Cash Management Program is negative. The parties hereto further agree that the Company shall hereby adopt, and shall take appropriate steps to cause the employees of the Company to comply with, the Code of Conduct of MDC Partners, as the same may be amended from time to time.

(g)           The Company shall comply with all applicable federal, state and local laws and the Company shall provide reasonable assistance to MDC Partners and its Affiliates in their compliance with all applicable federal, state and local laws, including without limitation, the provisions of the Sarbanes-Oxley Act of 2002, as amended from time to time.

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

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Section 4.3           Number and Qualifications of Managers.  As long as IMS Holdco owns outstanding Units of the Company, there shall be five (5) Managers of the Company of which MDC Holdco shall be entitled to appoint three (3) Managers and IMS Holdco shall be entitled to appoint two (2) Managers (each Manager appointed by IMS Holdco must be a full-time employee of the Company or one of its subsidiaries); thereafter the Managers shall be elected in accordance with Section 4.4.  No decrease in the number of Managers shall have the effect of shortening the term of any incumbent Manager.  None of the Managers need be Members of the Company or residents of the State of Delaware.  The initial designees of MDC Holdco are Gavin Swartzman, Michael Sabatino and David Doft.  The initial designees of IMS Holdco are Robert Ingram and Desiree Du Mont.

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

Section 4.5           Removal; Filling of Vacancies.  As long as IMS Holdco owns outstanding Units of the Company, only MDC Holdco can remove and replace its appointed Managers and only IMS Holdco can remove and replace its appointed Managers.  Following such time, the Members by the required vote as set forth in Section 5.5 shall be entitled to remove any Manager and to elect for the unexpired term of such Manager so removed another individual.  Upon the resignation, retirement or death of any of the Managers of the Company, subject to Section 4.3, the Members by the required vote as set forth in Section 5.5, shall be entitled to elect another Person for the unexpired term of such Manager.

Section 4.6           Place of Meetings.  Meetings of the Managers, annual, regular or special, shall be held in New York, NY, unless otherwise agreed to by the Managers.

Section 4.7           Annual Meetings.  Annual meetings of the Managers, of which no notice shall be required, shall be held at the discretion of the Managers immediately following any annual meeting of Members, at which time any and all business may be transacted.

Section 4.8           Regular Meetings.  The Managers shall notify each of the Members of regular meetings of the Managers, which meetings shall be held at such times and places as may be fixed from time to time by resolution adopted by the Managers.  Except as otherwise provided by statute, any and all business may be transacted at any regular meeting.  The Managers shall be given reasonable notice of the date, time and place of any scheduled regular meeting.

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

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

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

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

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

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

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

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

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

ARTICLE V

MEETINGS OF MEMBERS

Section 5.1           Annual Meetings.  An annual meeting of the Members shall not be required, but if called by any Member may be held on such date, at such time and at such place as shall be determined by the Managers and stated in the notice of the meeting, provided that there may be called no more than one such annual meeting in any calendar year.  At such meeting, the Members shall elect the Managers (subject to Section 4.3 above) and transact such other business as may properly be brought before the meeting.

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

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

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

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

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

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

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ARTICLE VI

OFFICERS

Section 6.1           Officers.  The Managers may designate one or more individuals (who may or may not be Managers) to serve as officers of the Company.  The Company shall have such officers as the Managers may from time to time determine.  Any two or more offices may be held by the same individual.  An officer of the Company shall have the duties and responsibilities consistent with his position and shall perform such duties and responsibilities as shall from time to time be prescribed or delegated to him by the Managers, subject to the terms of any employment agreement with the Company or one of its subsidiaries to which such officer may be a party. The Managers hereby initially designate Robert Ingram as Chief Executive Officer of the Company, Desiree Du Mont as President of the Company, Ron Corvino as President of the Company, Joe Volpe as Chief Operating Officer of the Company, Mitchell Gendel as Vice President and Secretary of the Company,  Michael Sabatino as Vice President and Treasurer of the Company, Gavin Swartzman as Vice President, Development of the Company, Edward Kipperman as Vice President, Taxation of the Company and Doreene Weiner as Director, Treasury Operations of the Company.

ARTICLE VII

ACCOUNTING AND TAX MATTERS; REPORTS; BANKING

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

Section 7.2           Capital Accounts.  An individual capital account (the "Capital Account") shall be maintained by the Company for each Member as provided below:

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(a)           Each Member's Capital Contributions when made shall be credited to such Member's Capital Account.  The Capital Account of each Member shall, except as otherwise provided in this Agreement, be (i) credited with the amount of cash and the fair market value of any property contributed to the Company by such Member or its predecessor in interest (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), (ii) credited with the amount of any Profits allocated to such Member or its predecessor in interest for federal income tax purposes, (iii) debited by the amount of any Losses allocated to such Member or its predecessor in interest for federal income tax purposes, (iv) debited by such Member's (or such predecessor's) allocable share of expenditures of the Company not deductible in computing the Company's taxable income and not properly chargeable as capital expenditures, including any nondeductible book amortization of capitalized costs, and (v) debited by the amount of cash or the fair market value of any property distributed to such Member its predecessor in interest (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code).  Immediately prior to any distribution of property by the Company, the Members’ Capital Accounts shall be adjusted, as required by Treasury Regulation 1.704-1(b)(2).

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

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

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

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

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

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

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

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

(c)           To elect under Section 754 of the Code to adjust the basis of the Company's assets pursuant to Sections 734 and 743 of the Code.

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

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

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

ARTICLE VIII

COVENANTS OF THE MEMBERS

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

ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION

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

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Section 9.2           Liquidation.  Upon dissolution of the Company, the Members shall appoint a Manager as liquidating trustee, who shall immediately commence to wind up the Company’s affairs; provided, however, that a reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the satisfaction of liabilities to creditors so as to enable the Members to minimize the normal losses attendant upon a liquidation.  After making payment or provision for all debts and liabilities of the Company, if determined to be necessary under the circumstances by the Managers, the Members' Capital Accounts shall be adjusted by debiting or crediting each Member's Capital Account with its respective share of the hypothetical gains or losses resulting from the assumed sale of all remaining assets of the Company for cash at their respective fair market values as of the date of dissolution of the Company in the same manner as gains and losses on actual sales of such properties are allocated under Section 3.3 and Section 3.5 hereof.  The liquidating trustee shall then by payment of cash or property make distributions to the Members in accordance with their respective Capital Accounts.  Any distribution to the Members in liquidation of the Company shall be made by the later of the end of the taxable year in which the liquidation occurs or 90 days after the date of such liquidation.  Notwithstanding any provisions in this Agreement to the contrary, no Member shall be obligated to restore a deficit balance in its Capital Account at any time.  The proceeds of liquidation shall be distributed, as realized, in the manner provided in the Act, subject to the applicable provisions of Section 3.4.  Subject to the immediately following sentence, the Members shall continue to share Profits and Losses during liquidation in the same proportions, as specified in Sections 3.3 and 3.5 hereof, as before liquidation.  Notwithstanding anything to the contrary herein, the Managers shall in their good faith discretion (and in a manner which reflects the economic interests of the Members consistent with the intent of the transactions set forth in this Agreement and the Purchase Agreement) allocate items of income, gain, deduction, and loss for the year of liquidation (and for earlier years if necessary to the extent then possible) so as to give Members positive Capital Account balances, immediately before the distributions provided for in the second preceding sentence, equal to the amount (if any) that would be distributed to Members if distributions were made in accordance with Section 3.4(a) and (b) hereof.  In the event that such Manager is unable to perform in his capacity as liquidating trustee due to bankruptcy, dissolution, death, adjudicated incompetency or any other termination of such Manager as an entity, the liquidating trustee shall be a Person approved by the unanimous vote of the Membership Interests.  With respect to this provision, the term "liquidation" shall have the same meaning as set forth in Treasury Regulation §1.704-1(b)(2)(ii) as in effect at such time, provided that the events specified in Section 10 shall not be deemed a "liquidation".

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

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

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ARTICLE X

RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS

Section 10.1         Assignment by the Members.  For so long as IMS Holdco owns Units, no Class A Unit shall be sold or transferred without the consent of IMS Holdco, except in connection with (i) an MDC Sale, (ii) an MDC Internal Transfer, (iii) a sale described in Section 10.2(b) or (iv) an MDC Financing or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing.  Except as set forth in Section 10.2(b), no Class B Unit shall be sold, transferred, assigned, pledged or otherwise disposed of, in whole or in part, without the written consent of MDC Holdco to such transfer, which, in the case of a transfer in connection with a distribution to the direct or indirect members of IMS Holdco or for tax or estate planning purposes, shall not be unreasonably delayed or withheld (but which shall require, without limitation, that such Class B Units so transferred continue to be subject to the applicable Call under Sections 10.2(a) and 10.2(c) hereof).  Any purported transfer by IMS Holdco or other permitted holder of Class B Units of all or any of its Units, any purported assignment by IMS Holdco or other permitted holders of Class B Units of any of its rights under this Agreement, and any purported delegation by IMS Holdco or other permitted holders of Class B Units of any of its duties or obligations under this Agreement (which shall in no way relieve IMS Holdco or such other permitted holder of Class B Units of responsibility for the performance of any such duties and obligations), in contravention of any of the provisions of this Agreement, will be null and void ab initio and of no force and effect.  Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the indirect sale of Units as part of any transaction involving a change of control of MDC Partners or its successors.

Section 10.2         Call Rights of MDC Holdco; Permitted IMS Holdco Liquidity Actions.

(a)           MDC Holdco Call.  At any time during the first calendar quarter of any calendar year commencing with calendar year 2015 (each, a "Call Period"), MDC Holdco shall have the right (but not the obligation) to require IMS Holdco to sell to it (a "Call"), all  of the Class B Units owned by IMS Holdco.  MDC may exercise the Call at any time during the Call Period, and may do so by delivering written notice of exercise (a "Call Exercise Notice") to IMS Holdco during the Call Period.  The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

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(b)           IMS Holdco Sale Request.

(i)           In the event that MDC Holdco has not yet exercised its Call right pursuant to Section 10.2(a) and the Sale Request Condition (as defined below) has then been met, during any applicable Sale Request Period (as defined below), IMS Holdco shall have the right (but not the obligation) to request that MDC Holdco purchase from it (a "Sale Request") all of the Class B Units owned by IMS Holdco; provided, however, the parties hereto agree that IMS Holdco shall not be permitted to exercise a Sale Request if, in the reasonable determination of MDC Holdco's accountants, the purchase by MDC Holdco of IMS Holdco's Class B Units pursuant to this Section 10.2(b) would result in the failure of the "Goodwill Impairment Test" under FASB 142 (or any successor provision) with respect to such purchase. For purposes of this Section 10.2(b), (x) the "Sale Request Condition" shall be: (i) if the applicable Sale Request Period is during calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of (1) FAP divided by the Split Percentage (as defined herein) applicable to FAP, (2) SAP divided by the Split Percentage applicable to SAP, (3) TAP divided by the Split Percentage applicable to TAP and (4) FOAP divided by the Split Percentage applicable to FOAP (as each of FAP, SAP, TAP, FOAP and Split Percentage is defined in the Purchase Agreement) paid or payable as of such date, divided by (II) 90%, (B) the 2010 Growth Payment (as defined in the Purchase Agreement) and (C) $24,000,000; or (ii) if the applicable Sale Request Period is during any calendar year other than calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of the fractions, the numerators of which are each Additional Payment (as defined in the Purchase Agreement) paid or payable in respect of periods prior to such date, and the denominators of which are the Split Percentages applicable to such Additional Payment, divided by (II) 90%, (B) the 2010 Growth Payment and (C) $30,000,000; and (y) the "Sale Request Period" shall be any of: (i) the first calendar quarter of calendar years 2011, 2012, 2013 and 2014 and (ii) the second calendar quarter of calendar year 2015 and any calendar year thereafter.

(ii)          IMS Holdco may make a Sale Request by delivering written notice (a "Sale Request Notice") to MDC Holdco at any time during the applicable Sale Request Period; provided that IMS Holdco may not make more than one Sale Request in any 12-month period.  MDC Holdco shall have thirty (30) days following receipt of the Sale Request Notice to accept IMS Holdco's Sale Request, which acceptance shall be exercised by delivering written notice (a "Sale Request Acceptance Notice") to IMS Holdco within such thirty day period.

(iii)         If such Sale Request Acceptance Notice is delivered (an "Accepted Sale Request"), the Class B Units shall be sold to MDC Holdco in accordance with the provisions set forth in Section 10.4, with the date of delivery of the Sale Request Acceptance Notice being the exercise date.

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(iv)         In the event that MDC Holdco shall not have delivered a Sale Request Acceptance Notice during such thirty (30) day period, then (x) IMS Holdco shall have the right for twelve (12) months to solicit bona-fide offers for a sale of its Class B Units and MDC Holdco's Class A Units to an unaffiliated third party (the "Prospective Purchaser"), (y) upon the receipt of such offer, IMS Holdco shall deliver written notice (a "Third Party Offer Notice") of such offer to MDC Holdco, which notice shall identify the Prospective Purchaser and shall describe the material terms of such offer, and (z) for a period of thirty (30) days after receipt of the Third Party Offer Notice, MDC Holdco shall have the right to deliver a Sale Request Acceptance Notice and (A) if such Sale Request Acceptance Notice is delivered, MDC Holdco shall acquire the Class B Units as described above in this Section 10.2 and no Member shall be permitted to consummate a sale to the Prospective Purchaser or (B) if a Sale Request Acceptance Notice is not delivered, IMS Holdco shall, for a period of one hundred twenty (120) days, be permitted to consummate the sale of its Class B Units to such Prospective Purchaser, and IMS Holdco shall have the right to require MDC Holdco to sell its Class A Units to such Prospective Purchaser on substantially the same terms and conditions (taking into account the economic differences, if any, between Units).

(c)           Termination Call.  Notwithstanding the periods described in Sections 10.2(a) and (b) above, in the event that a Principal shall no longer be an employee of the Company for any reason whatsoever (a "Departing Principal"), then at any time following the effective date of such termination (the "Date of Termination"), MDC Holdco shall have the right, subject to the proviso contained in this Section 10.2(c), to exercise a Call, exercisable by delivery to IMS Holdco of a Call Exercise Notice, in respect of a number of IMS Holdco's Class B Units equal to the number of Class B Units indirectly owned by the Departing Principal; provided, however, MDC Holdco shall not be permitted to exercise a Call under this Section 10.2(c) for a period of 20 days following the Date of Termination (the "Waiting Period") and during such Waiting Period, IMS Holdco and/or the Principals who are in the then-current employ of the Company (the "Remaining Principals"), shall have the right to purchase all of the Departing Principal's equity interests in IMS Holdco as of the Date of Termination upon terms and conditions agreed upon by IMS Holdco and the Principals, so long as notice of such purchase has been delivered in writing to MDC Holdco prior to the expiration of the Waiting Period indicating a binding commitment on behalf of IMS Holdco and/or the Remaining Principals to purchase such equity interests within 60 days following the expiration of the Waiting Period.  In the event such purchase does not occur within such 60-day period, MDC Holdco shall be entitled to exercise a Call pursuant to this Section 10.2(c).

Section 10.3        Binding Obligations Upon Exercise of a Call or an Accepted Sale Request.  Upon the proper delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, IMS Holdco shall be obligated to sell to MDC Holdco, and MDC Holdco shall be obligated to purchase from IMS Holdco, the Units subject to the Call or the Accepted Sale Request, as applicable, pursuant to the terms of this Article X.

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Section 10.4         Purchase Price.

(a)           Calculation/Payment of the Purchase Price for Class B Units. In connection with the exercise of a Call under Section 10.2(a) or Section 10.2(c) or an Accepted Sale Request for Class B Units, MDC Holdco shall calculate and pay in the aggregate to holders of such Units, the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class B Purchase Price"):

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "First Payment") equal to:

           AP  x  {(PBT for YP-1) x  5.0} – {the Reduction Amount}

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(ii)           within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "Second Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP)) x 5.0} – {First Payment} – {the Reduction Amount}

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(iii)          within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the "Final Class B Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP) + (PBT for YP+1)) x AM} – {First Payment + Second Payment} – {the Reduction Amount}

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(b)           If any calculation of the Class B Purchase Price results in an amount which is equal to or less than zero, such Class B Purchase Price payment shall be deemed to be zero and accordingly the seller of the Units pursuant to such Call or Accepted Sale Request shall not be under any obligation to pay such negative amount (expressed as a positive number).

(c)           Other Definitions.

(i)           "AM" shall mean 5.0, and may be increased by one or more of the following:

(x)           by 0.25, if Average Annual PBT Growth Rate is 10% or greater;

(y)           by 0.25, if Average PBT Margin for the Measuring Period (as defined below) is 25% or greater; and

(z)           by 0.50, if within a reasonable period of time prior to the applicable Class B Closing Date, the Principals have indentified successor management of the Company, reasonably satisfactory to the Chief Executive Officer of MDC Partners, and such successor management have agreed to employment terms and protective covenants satisfactory to MDC Holdco.

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(ii)           "Applicable Percentage" or "AP" shall mean (a) the number of Class B Units being sold pursuant to a Call or an Accepted Sale Request, divided by (b) the total number of outstanding Units.

(iii)          "Average Annual PBT Growth Rate" shall mean the result of (x) the sum of (1) (A) PBT for YP+1 less PBT for YP divided by (B) PBT for YP, (2) (A) PBT for YP less PBT for YP-1 divided by (B) PBT for YP-1, and (3) (A) PBT for YP-1 less PBT for YP-2 divided by (B) PBT for YP-2, divided by (y) 3.

(iv)          "Average PBT Margin" shall equal the percentage equivalent of the quotient determined by dividing (a) the total PBT for the Measuring Period, by (b) the total Revenues for the Measuring Period.

(v)           "Direct Billings of Expenses" shall mean any third party costs that are billed to a particular client, excluding any mark-up to such client on such costs.

(vi)          "Measuring Period" shall mean the calendar year or years included in the applicable Class B Purchase Price calculation.

(vii)         "Pass Through of Third Party Costs" shall mean any component of a particular client invoice that is dispersed (or will ultimately be dispersed) directly to a third party (other than independent contractors) in connection with the funding of a service relating to that client's campaign, engagement or business, whether or not such Person acts as an agent or as a principal with respect to such client.

(viii)        "PBT" for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP; provided, however, that for calendar year 2010, 2010 PBT shall mean the sum of (x) the consolidated PBT of IMS Holdco and its subsidiaries, if any, from January 1, 2010 through and including the Effective Date (the "Pre-Closing Period") and (y) the consolidated PBT of the Company and its subsidiaries, if any, as of the Effective Time through and including December 31, 2010 (the "Post-Closing Period"); provided further, however, in making the foregoing determinations:

(1)           neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or any predecessor entity), is the named beneficiary or is otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

(2)           intercompany management fees charged by MDC Holdco or any of its Affiliates (as defined in Section 13.1 hereof) to the Company or any of its subsidiaries, shall not be treated as an expense, unless such fees have been approved by the parties in accordance with this Agreement, and such fees replace an expense that would otherwise be paid by the Company to a third party;

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(3)           any Losses (as defined in Section 7.2 of the Purchase Agreement) of a Purchaser Indemnified Party (as defined in Section 7.2 of the Purchase Agreement) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 of the Purchase Agreement and which are fully assumed by IMS Holdco and/or the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(4)           any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3 of the Purchase Agreement) shall not be treated as an expense;

(5)           there shall be no charge against income for the payment or accrual of any component of any Purchase Price payment pursuant to the Purchase Agreement or any component of any Class B Purchase Price payment;

(6)           the fees and disbursements of the Company's attorneys, accountants and financial advisors incurred prior to or after the Closing (as defined in Section 2.3 of the Purchase Agreement) in connection with the formation and organization of the Company and the negotiation, preparation and execution of the Purchase Agreement and the other documents delivered at such Closing that have either (x) been expensed and paid prior to such Closing or (y) accrued for on the Closing Balance Sheet (as defined in the Purchase Agreement), shall not be treated as an expense;

(7)           the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company's direct or indirect ownership in such subsidiary;

(8)           any extraordinary or unusual gains or losses, gains or losses from the sale of any capital assets, and any gains or losses recognized by the Company or any of its subsidiaries in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries shall be excluded from income;

(9)           the fees and expenses of (1) the Accountants in preparing any Annual Determination and year-end audit, (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder and (3) any preparation of income tax returns, reports and related schedules, in excess of $57,500 in any calendar year, shall not be treated as an expense;

(10)         if the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger of similar transaction (an "Acquired Business") on or after the date of this Agreement, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business unless its inclusion has been agreed to by the Representative (as defined in the Purchase Agreement);

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(11)           any transaction expenses incurred in connection with any potential or contemplated acquisition shall not be included as an expense;

(12)           any write-off or amortization of goodwill or other intangibles arising out of the purchase of the Purchased Units (as defined in the Purchase Agreement) pursuant to the Purchase Agreement shall not be treated as an expense;

(13)           there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price (as defined in the Purchase Agreement) or the Class B Purchase Price under Sections 10.2 and 10.4 of this Agreement;

(14)           the fees and expenses of BDO Seidman LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010 shall not be treated as an expense for the purposes of 2010 PBT;

(15)           any interest costs or transaction fees incurred by the Company or any of its subsidiaries resulting from an MDC Financing shall not be treated as an expense except to the extent incurred by the Company under the MDC Cash Management Program;

(16)           any distribution by IMS Holdco of any Class B Purchase Price proceeds to its members or any employees of the Company pursuant to "phantom equity" documents as disclosed in the Purchase Agreement and in accordance with Section 6.3 of the Purchase Agreement shall not be treated as an expense;

(17)           any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense;

(18)           PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses;

(19)           solely with respect to the calculation of 2010 PBT, an amount equal to $239,404 with respect to expenses incurred during the Pre-Closing Period shall not be treated as an expense;

(20)           for each calendar year in respect of which an Extra Payment (as defined in the Purchase Agreement) is required to be made under the Purchase Agreement, PBT shall be reduced by an amount equal to the Extra Payment made in respect of such calendar year; and

(21)           Notwithstanding anything to the contrary, PBT for calendar year 2009 shall be $9,409,000, without further adjustment.

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(ix)           "Reduction Amount" shall mean (A) with respect to a Call under 10.2(c), an amount equal to (i) (a) in the case of a Call being triggered by the termination of employment of Ingram or Desiree (as each is defined in the Purchase Agreement), 36.5% or (b) in the case of a Call being triggered by the termination of employment of Ron (as defined in the Purchase Agreement), 27% multiplied by (ii) $2,666,667, multiplied by (iii) a fraction, the numerator of which is the number of days in the period commencing on the applicable Date of Termination and ending on December 31, 2012 (such period, with respect to the applicable Call, the "Remaining Period"), and the denominator of which is the number of days in the period commencing as of the Closing Date (as defined in the Purchase Agreement) and ending on December 31, 2012 and (B) with respect to a Call under 10.2(a), an amount equal to zero.

 (x)           "Revenues" during each relevant calendar year of the Measuring Period, shall mean the commissions and fees, mark-ups and hourly charges earned by the Company for work generated or performed by employees or contractors and charged to clients determined in accordance with GAAP; provided, however, that in making such determination, Revenues shall not include any Pass Through of Third Party Costs or Direct Billings of Expenses; provided further, however, that for calendar year 2010, Revenues shall mean the sum of (x) the Revenues earned by IMS Holdco during the Pre-Closing Period and (y) the Revenues earned by the Company and its subsidiaries during the Post-Closing Period.

(xi)           "YP" shall mean the calendar year in which the Call Exercise Notice or the Sale Request Acceptance Notice, as applicable, is delivered.

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

(xiii)         "YP+1" shall mean the calendar year immediately following YP.

(xiv)        "YP-2" shall mean the calendar year immediately preceding YP-1.

(xv)         "Split Percentage" shall mean "Applicable Percentage" as defined in the Purchase Agreement.

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(d)           Accounting Procedures.

(i)            Commencing with calendar year 2010 and for every calendar year thereafter, MDC Holdco shall prepare or, at its discretion, shall cause BDO Seidman LLP or other independent accountant of national standing (the "Accountants") to prepare, in accordance with GAAP, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business on December 31 of each such calendar year, and a related consolidated statement of income of the Company and its subsidiaries, if any, for the relevant calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth for the period under examination the applicable calculation of GAAP PBT and Adjusted GAAP PBT, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4 (the "Annual Determination"); provided, however, upon the exercise of a Call or an Accepted Sale Request pursuant to this Article X, MDC Holdco shall include or, at its discretion, shall cause the Accountants to include, in any Annual Determination with respect to each calendar year during the Measuring Period, (x) the applicable calculations of PBT, Average Annual PBT Growth Rate, Revenues, Average PBT Margin and AM, and (y) all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4.  MDC Holdco shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements and to determine the scope of such audit.  MDC Holdco shall instruct the Accountants to deliver a copy of each Annual Determination to IMS Holdco not later than 120 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of MDC Holdco.

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

(iii)          In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 10.4, then IMS Holdco and MDC Holdco agree to select another mutually acceptable accounting firm to perform the services to be performed under this Section 10.4 by the Independent Auditors.  If IMS Holdco and MDC Holdco fail to select the Independent Auditors as required by clause (i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either IMS Holdco or MDC Holdco may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York. to appoint an independent firm of certified public accountants to perform the services required under this Section 10.4 by the Independent Auditors.  MDC Holdco, on the one hand, and IMS Holdco, on the other hand, shall share the fees of the JAMS equally.  For purposes of this Section 10.4(d) the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this clause (iii).

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

(v)           The books and records of the Company and its subsidiaries shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto and their representatives, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 10.4.  IMS Holdco, on the one hand, and MDC Holdco, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by or for them to support a position that is contrary to the position taken by the other party. Upon the request by IMS Holdco, MDC Holdco shall request that the Accountants make their work papers available to IMS Holdco and its representatives after the completion of any audit of the financial statements of the Company and its subsidiaries and/or to verify the calculations set forth in any Annual Determination (in each case during normal business hours upon reasonable advance notice at the principal offices of the Accountants); provided, however, it is understood that the decision to make such work papers available is solely that of the Accountants.

(e)           Closing.  The closing for each purchase and sale of Units (a "Class B Closing") pursuant to a Call or Accepted Sale Request, as applicable, shall be held at the offices of the Company within 30 days after the delivery of an Exercise Notice or Sale Request Acceptance Notice.  The date on which the respective Class B Closing takes place is referred to in this Agreement as its "Class B Closing Date".  At each Class B Closing, the parties shall execute an Assignment of Unit Agreement in form and substance reasonably acceptable to MDC Holdco and IMS Holdco and an amendment to this Agreement in accordance with Section 14.4 reflecting such transfer and the reallocated Units (including the related portion of the Capital Account).  The transfer of any Units pursuant to this Section 10.4 shall be free and clear of all claims, liens and encumbrances other than as created by the provisions of this Agreement.  Prior to any Class B Closing, the Company and IMS Holdco shall use their best efforts to obtain any required governmental or regulatory approval or approvals.  MDC Holdco shall have the right to postpone any scheduled Class B Closing until any such governmental or regulatory approval is obtained.

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(f)           Class B Purchase Price Payment.  Payment of each component of the Class B Purchase Price shall be made by MDC Holdco in cash by direct wire transfer to such account as IMS Holdco may direct by written notice to the Purchaser given pursuant to this Agreement.  Each component of the Class B Purchase Price shall be deemed to include imputed interest to the extent required by the Code.

(g)           Effect of Events During Period Class B Units Are Issued.  The parties hereto understand and agree that under the terms of each Principal's Employment Agreement with the Company, such Principal may be terminated for "Cause" or "without Cause" (as such terms are defined in the Employment Agreements).  Accordingly, each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any subsidiary of the Company, no party to this Agreement or any Person deriving rights through any such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary of the Company (x) constitutes a breach by MDC Holdco or any of its Affiliates of this Agreement, (y) resulted in an adverse effect on any Class B Purchase Price payment under this Agreement forming the basis for a claim against MDC Holdco or any of its Affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 10.4(d) hereof.  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect the right of IMS Holdco to receive any Class B Purchase Price payment under this Agreement.

(h)           Covenant to Fund.  MDC Partners shall cause sufficient capital to be available to MDC Holdco to meet its obligations to pay the Class B Purchase Price pursuant to Article X of this Agreement.  If MDC Holdco fails to meet its payment obligations under Article X of this Agreement, then MDC Partners shall satisfy such payment obligations to the extent MDC Holdco has failed to do so.

ARTICLE XI

INDEMNIFICATION

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

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

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

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

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Section 11.5         Definitions.  For purposes of this Article XI:

(a)           The term "expenses" includes court costs and attorneys' fees and disbursements;

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

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

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

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

Section 11.7         Nonexclusivity of Rights.  The right to indemnification and the advancement and payment of expenses conferred in this Article XI shall not be exclusive of any other right that a Manager or other Person indemnified pursuant hereto may have or hereafter acquire under any law (common or statutory), provision of the Certificate or this Agreement or otherwise.

ARTICLE XII

ADDITIONAL AGREEMENTS

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

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ARTICLE XIII

OTHER DEFINITIONS

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

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

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

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

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

"Adjusted GAAP PBT" shall mean, for any calendar (or partial) year, GAAP PBT for such calendar year less (A) (i) with respect to calendar year 2010, $666,667 or (ii) with respect to calendar years 2011 or 2012, $1,000,000; plus (B) in the event that a Principal's employment with the Company shall have been terminated prior to December 31, 2012, an amount equal to the result of (x) the total Reduction Amount applicable to any Call able to be made under Section 10.2(c) in respect of such Principal, times (y) a fraction, the numerator of which is the number of days in the Remaining Period occurring during such calendar year and the denominator of which is the total number of days in the Remaining Period.

"Affiliate" of any Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

"Business Day" shall mean any day on which commercial banks are not authorized or required to close in New York, NY.

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

"Cash Flow" shall mean the consolidated amount of cash in respect of any calendar year of the Company and its subsidiaries that the Board of Managers in its good faith discretion believes is available for distribution to Members of the Company; provided, however, with respect to distributions made in respect of calendar years 2010 through 2014, Cash Flow must be at least an amount necessary to satisfy the distribution required pursuant to Section 3.4(a)(i).

36

"Class A Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(i) to holders of Class A Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class A Units of GAAP PBT under Section 3.5(a) for such prior years.

"Class B Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class B Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class B Units of GAAP PBT under Section 3.5(a) for such prior years.

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

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

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

"Effective Time" shall mean 12:01a.m. on May 1, 2010.

"GAAP PBT" shall mean, for any calendar (or partial) year, the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP, and in accordance with the procedures applicable to such determination set forth in Section 10.4(d) hereof; provided, however, for calendar year 2010, GAAP PBT shall be calculated from and after the Effective Time through December 31, 2010.

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

(i)           Subject to the final sentence of this definition, the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by reference to Section 3.1(b), and as set forth in Section 8 to the Conveyance Document;

37

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

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

(iv)         The Gross Asset Value of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (vi) of the definition of Profits and Losses herein; provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the extent the Managers determine that an adjustment pursuant to clause (ii) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to clauses (i), (ii), or (iv) hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.  It is understood that the Gross Asset Values of each of the assets of the Company on the date of execution of this Agreement shall be determined as set forth in Section 8 of the Conveyance Document.

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

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

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

38

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

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

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

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

"Profits and Losses", shall mean, for each fiscal year, an amount equal to the Company’s taxable income or loss for such fiscal year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

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

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

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

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

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

39

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

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

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 3.3(e) shall be determined by applying rules analogous to those set forth in clauses (i) through (vii) above.

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

"Units" shall mean Class A Units or Class B Units, as applicable.

ARTICLE XIV

MISCELLANEOUS

Section 14.1         Manner of Giving Notice.  Whenever under the provisions of the Act, the Certificate or this Agreement, notice is required to be given to the Company, any Member or Manager of the Company, and no provision is made as to how such notice shall be given, any such notice to be given hereunder shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next Business Day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to MDC Holdco or MDC Partners, to:

MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

40

If to IMS Holdco, to:

c/o BDR Company, LLC

650 Fifth Avenue

New York, New York 10017

Attention: Robert Ingram

with a copy to:

Moses & Singer LLP

405 Lexington Avenue

New York, New York 10174

Attention: Solomon P. Friedman, Esq.

If to the Company, to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

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

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

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

41

Section 14.4         Amendment or Modification.  The power to adopt, alter, amend or repeal this Agreement is vested solely in the Members. Except for the amendments contemplated by Sections 2.1 and 10.4(e), and subject to the provisions of Section 4.1, this Agreement may be altered or amended only by the unanimous vote or unanimous written consent of MDC Holdco and IMS Holdco. The Managers may not adopt, alter, amend or repeal any provision of this Agreement.

Section 14.5         Binding Effect.  Subject to the restrictions on transfer and assignment set forth in Article X of this Agreement, this Agreement is binding on and inures to the benefit of the Members and their respective successors and permitted assigns, including without limitation, any Lender who exercises a default remedy under any agreement entered into in connection with an MDC Financing.

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

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

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

Section 14.9         Currency.  Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.  All payments made hereunder shall be made in United States Dollars.

42

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

MF + P ACQUISITION CO.
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary
INTEGRATED MEDIA SOLUTIONS, LLC
By:	/s/ Robert Ingram
	Name: Robert Ingram
	Title: Chief Executive Officer
INTEGRATED MEDIA SOLUTIONS PARTNERS LLC
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary

43

TABLE OF CONTENTS

ARTICLE I
FORMATION OF LIMITED LIABILITY COMPANY
Section 1.1  Formation	2
Section 1.2  Purpose	2
Section 1.3  Offices; Registered Agent	2
Section 1.4  Filings and Foreign Qualification	2
Section 1.5  Term	2
ARTICLE II
MEMBERS; MEMBERSHIP INTERESTS; UNITS
Section 2.1  Members and Membership Units	2
Section 2.2  Classes of Units	3
Section 2.3  Transfer of Units	3
Section 2.4  Additional Members and Membership Interests	3
Section 2.5  Liability of Member	3
Section 2.6  Limitations on Members	3
Section 2.7  Certification of Units	4
ARTICLE III
CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS
Section 3.1  Capital Account; Capital Contributions	4
Section 3.2  Withdrawal and Return of Capital Contribution	5
Section 3.3  Allocation of Profits and Losses	5
Section 3.4  Distributions	9
Section 3.5  Allocation of GAAP PBT	10
ARTICLE IV
MANAGEMENT
Section 4.2  Authority of Managers	14
Section 4.3  Number and Qualifications of Managers	15
Section 4.4  Election and Term of Service	15
Section 4.5  Removal; Filling of Vacancies	15
Section 4.6  Place of Meetings	15
Section 4.7  Annual Meetings	15
Section 4.8  Regular Meetings	15
Section 4.9  Special Meetings	15
Section 4.10  Quorum of and Action by Managers	16
Section 4.11  Approval or Ratification of Acts or Contracts by Members	16
Section 4.12  Action Without A Meeting	16

i

Section 4.13  Telephone Meetings	16
Section 4.14  Interested Managers and Officers	16
Section 4.15  Manager's Compensation	17
Section 4.16  Time Devoted to Company	17
Section 4.17  Liability of Managers	17
ARTICLE V
MEETINGS OF MEMBERS
Section 5.1  Annual Meetings	17
Section 5.2  Special Meetings	17
Section 5.3  Place of Meetings	17
Section 5.4  Notice of Meetings	18
Section 5.5  Quorum of and Action by Members	18
Section 5.6  Action Without a Meeting	18
Section 5.7  Telephone Meetings	18
ARTICLE VI
OFFICERS
Section 6.1  Officers	19
ARTICLE VII
ACCOUNTING AND TAX MATTERS; REPORTS; BANKING
Section 7.1  Books and Records	19
Section 7.2  Capital Accounts	19
Section 7.3  Tax Matters Partner	20
Section 7.4  Tax Elections	20
Section 7.5  Bank Accounts; Investment of Company Funds	21
Section 7.6  Signature of Negotiable Instruments	21
ARTICLE VIII
COVENANTS OF THE MEMBERS
Section 8.1  Independent Accountants	21
ARTICLE IX
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 9.1  Dissolution	21
Section 9.2  Liquidation	22
Section 9.3  Termination	22
Section 9.4  Claims of the Members	22

ii

ARTICLE X
RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS
Section 10.1  Assignment by the Members	23
Section 10.3  Binding Obligations Upon Exercise of a Put or a Call	25
ARTICLE XI
INDEMNIFICATION
Section 11.1  Indemnification of Managers and Members	33
Section 11.2  Others	34
Section 11.3  Insurance and Other Arrangements	34
Section 11.4  Report to Members	34
Section 11.5  Definitions	35
Section 11.6  Severability	35
Section 11.7  Nonexclusivity of Rights	35
ARTICLE XII
ADDITIONAL AGREEMENTS
Section 12.1  Integrated Media Solutions Name	35
ARTICLE XIII
OTHER DEFINITIONS
Section 13.1  Other Definitions	36
ARTICLE XIV
MISCELLANEOUS
Section 14.1  Manner of Giving Notice	40
Section 14.2  Waiver of Notice	41
Section 14.3  No Company Seal	41
Section 14.4  Amendment or Modification	42
Section 14.5  Binding Effect	42
Section 14.6  Governing Law; Severability	42
Section 14.8  Counterparts	42
Section 14.9  Entire Agreement	42
Section 14.9  Entire Agreement	42

iii

INDEX OF DEFINED TERMS

AAA	33
Accepted Sale Request	25
Accountants	32
Acquired Business	30
Act	2
Adjusted Capital Account Deficit	37
Adjusted GAAP PBT	37
Affiliate	38
Agreement	1
AM	27
Annual Determination	32
AP	28
Applicable Percentage	28
Average Annual PBT Growth Rate	28
Average PBT Margin	28
Business	1
Business Day	38
Call	24
Call Exercise Notice	24
Call Period	24
Capital Account	20
Capital Contribution	38
Cash Flow	38
Certificate	2
Class A Distribution Shortfall Amount	38
Class B Closing	34
Class B Closing Date	34
Class B Distribution Shortfall Amount	38
Class B Purchase Price	27
Code	38
Company Minimum Gain	38
Conveyance Document	1
Date of Termination	26
Departing Principal	26
Depreciation	38
Direct Billings of Expenses	28
draw	10
Effective Time	39
Employment Agreements	4
expenses	36

iv

Final Class B Payment	27
First Payment	27
GAAP	20
GAAP PBT	39
Gross Asset Value	39
IMS Holdco	1
Independent Auditors	32
JAMS	33
Lender	14
Loss Account	11
Manager	36
MDC Cash Management Program	14
MDC Financing	14
MDC Holdco	1
MDC Internal Transfer	12
MDC Partners	12
MDC Sale	12
Member	1
Member Nonrecourse Debt	40
Member Nonrecourse Debt Minimum Gain	40
Member Nonrecourse Deductions	40
Members	1
Membership Interest	40
Nonrecourse Deductions	40
Nonrecourse Liability	40
Original Operating Agreement	1
Other Entity	35
Pass Through of Third Party Costs	28
PBT	28
Person	40
proceeding	36
Profits and Losses	40
Prospective Purchaser	26
Purchase Agreement	1
Purchase Consideration Value	5
Purchase Transaction	1

v

Reconciliation Period	32
Reduction Amount	31
Regulatory Allocations	7
Remaining Period	31
Remaining Principals	26
Revenues	31
Sale Request	25
Sale Request Acceptance Notice	25
Sale Request Condition	25
Sale Request Notice	25
Sale Request Period	25
Second Payment	27
serving at the request of the Company	36
Tax Distributions	10
Third Party Offer Notice	26
TMP	21
Treasury Regulations	41
Unit Capital Account	21
Units	41
Waiting Period	26
YP	31
YP+1	31
YP-1	31
YP-2	31

vi

Schedule 2.1

Members and Membership Units

MF + P Acquisition Co.: 750 Class A Units

Integrated Media Solutions, LLC: 250 Class B Units

i

EX-12 8 v183284_ex12.htm

Exhibit 12

Statement of Computation of Ratio of Earnings to Fixed Charges

	Three Months Ended March 31,
	2010			2009
	(000’s)			(000’s)
Earnings:
Income (loss) from continuing operations attributable to MDC Partners Inc.	$	(10,186	)	$	281
Additions:
Income tax expense		249			615
Noncontrolling interest in income of consolidated subsidiaries		968			382
Fixed charges, as shown below		8,302			5,319
Distributions received from equity-method investees		7			—
		9,526			6,316
Subtractions:
Equity in income (loss) of investees		(104	)		93
Noncontrolling interest in earnings of consolidated subsidiaries that have not incurred fixed charges		—			—
		(104	)		93
Earnings as adjusted	$	(556	)	$	6,504
Fixed charges:
Interest on indebtedness, expensed or capitalized		6,377			3,443
Amortization of debt discount and expense and premium on indebtedness, expensed or capitalized		651			318
Interest within rent expense		1,274			1,558
Total fixed charges	$	8,302		$	5,319
Ratio of earnings to fixed charges		N/A			1.22
Fixed charge deficiency		8,858			N/A

EX-31.1 9 v183284_ex31-1.htm

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, Miles S. Nadal, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ MILES S. NADAL
		Miles S. Nadal
		Title: Chairman, Chief Executive Officer and President

EX-31.2 10 v183284_ex31-2.htm

Exhibit 31.2

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, David B. Doft, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ DAVID B. DOFT
		David B. Doft Title: Chief Financial Officer

EX-32.1 11 v183284_ex32-1.htm

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Miles S. Nadal, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010

By:	/s/ MILES S. NADAL
	Miles S. Nadal Title: Chairman, Chief Executive Officer and President

EX-32.2 12 v183284_ex32-2.htm

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David B. Doft, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010
By:	/s/ DAVID B. DOFT
	David B. Doft Title: Chief Financial Officer

EX-99.1 13 v183284_ex99-1.htm

Exhibit 99.1

MDC PARTNERS INC.

SCHEDULE OF CURRENT AND POTENTIAL MARKETING

COMMUNICATIONS COMPANY OWNERSHIP

Company	% Owned at 3/31/10			Year of Initial Investment	Put/Call Options
					2010			Thereafter
					(See Notes)
Consolidated:
Strategic Marketing Services
Allard Johnson Communications Inc.		74.0	%	1992		89.0	%	Note 1
Attention Partners LLC		51.0	%	2009		—		Note 2
Bruce Mau Design Inc.		50.1	%	2004		—
Colle & McVoy, LLC		95.0	%	1999		—		Note 3
Crispin Porter & Bogusky, LLC		100.0	%	2001		—
Company C Communications LLC		90.0	%	2000		—		Note 4
Fearless Progression, LLC		51.0	%	2010		75.0	%	Note 5
Fletcher Martin, LLC		85.0	%	1999		100.0	%	Note 6
Hello Design, LLC		49.0	%	2004		—
henderson bas partnership		65.0	%	2004		100.0	%
HL Group Partners, LLC		65.9	%	2007		—		Note 7
kirshenbaum bond senecal & partners, LLC		100.0	%	2004		—
Mono Advertising, LLC		49.9	%	2004		54.9	%	Note 8
Redscout, LLC		60.0	%	2007		—		Note 9
Skinny NYC, LLC		50.1	%	2008		—		Note 10
Veritas Communications Inc.		64.1	%	1993		78.4	%	Note 11
Vitro Robertson, LLC		77.0	%	2004		—		Note 12
Yamamoto Moss Mackenzie		100.0	%	2000		—
Zig Inc.		76.1	%	2004		88.4	%	Note 13
Zyman Group, LLC		94.1	%	2005		—		Note 14
Performance Marketing Services
Accent Marketing Services, LLC		100.0	%	1999		—
Accumark Communications Inc.		55.0	%	1993		61.7	%	Note 15
Bryan Mills Iradesso Corp.		62.8	%	1989		88.2	%	Note 16
Communifx Partners, LLC		75.0	%	2010				Note 17
Computer Composition of Canada Inc.		100.0	%	1988		—
Northstar Research Partners Inc.		70.0	%	1998		—		Note 18
Onbrand		89.0	%	1992		—
Shout Media LLC		51.0	%	2010
Source Marketing, LLC		83.0	%	1998		—		Note 19
TargetCom, LLC		100.0	%	2000		—		Note 20
Team Holdings LLC		60.0	%	2010				Note 21
Equity Accounted:
Adrenalina, LLC		49.9	%	2007		—		Note 22

Notes

(1) MDC has the right to increase its ownership interest in Allard Johnson Communications Inc. through acquisition of an incremental interest, and the other holders have the right to put to MDC the same incremental interest up to 89% of this entity in 2010 and 100% only upon termination.

(2) Attention Partners LLC is owned by HL Group Partners, LLC. HL Group Partners, LLC has the right to increase its ownership in Attention Partners, LLC through acquisitions of incremental interests, and the other interest holders has the right to put to HL Group Partners, LLC the same incremental interests up to 100% only upon termination.

(3) MDC has the right to increase its economic ownership in Colle & McVoy, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(4) MDC has the right to increase its economic ownership in Company C Communications, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012. Effective October 1, 2008, Company C is operated as a division of kirshenbaum bond & partners, LLC.

(5) MDC has the right to increase its economic ownership in Fearless Progression, LLC through acquisitions of incremental interests, up to 75% of this entity in 2010, and up to 100% in 2011.

(6) Effective January 1, 2010, MDC acquired the remaining 15% membership interest; however, in conjunction with the step-up in Trendcore, which was merged into Fletcher Martin, LLC, a 15% profits interests was issued.

(7) MDC has the right to increase its ownership in HL Group Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 72.4% of this entity in 2012, up to 82.62% in 2013 and up to 93.73% in 2014. Effective January 25, 2010, MDC acquired an additional 1% membership interest in HL Group Partners, LLC.

(8) MDC has the right to increase its ownership in Mono Advertising, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 54.9% of this entity in 2010, up to 60.0% in 2011, up to 65.0% in 2012, up to 70.0% in 2013 and up to 75.0% in 2014.

(9) MDC has the right to increase its ownership in Redscout, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 80% of this entity in 2012.

(10) MDC has the right to increase its ownership in Skinny NYC, LLC through acquisition of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 60.1% of this entity in 2014, up to 70.1% of this entity in 2015 and up to 80.1% of this entity in 2016.

(11) MDC has the right to increase its ownership in Veritas Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 78.4% of this in 2010, up to 81.5% in 2011, up to 95.1% in 2012 and up to 100% in 2013.

(12) MDC has the right to increase its ownership in Vitro Robertson, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 95% of this entity in 2011, up to 97.5% in 2012 and up to 100% in 2013.

(13) MDC has the right to increase its ownership in Zig Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 88.4% of this entity in 2010, and up to 90.45% of this entity in 2012.

(14) As of March 31, 2010, MDC’s economic interest in Zyman Group, LLC was 100% of profits as its priority return is not expected to be exceeded. In January 2009, Zyman Group, LLC has become an operating division of kirshenbaum bond & partners, LLC.

(15) MDC has the right to increase its ownership in Accumark Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up to 61.7% of this entity in 2010, up to 68.3% in 2011 and up to 75.0% in 2012. MDC’s current economic interest is 42%.

(16) MDC has the right to increase its ownership in Bryan Mills Iradesso, Corp. through acquisition of an incremental interest, and the other interest holders have the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(17) MDC has the right to increase its ownership in Communifx Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(18) MDC has the right to increase its ownership in Northstar Research Partners Inc. through acquisitions of incremental interests, and the other holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(19) MDC has the right to increase its ownership in Source Marketing, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up 87.1% of this entity in 2011 and 91.3% in 2012 and 100% in 2013.

(20) Effective January 1, 2009, Targetcom LLC is operating as a division of Accent Marketing Services, LLC.

(21) MDC has the right to increase its ownership in Team Holdings, LLC, through acquisition of an incremental interest,  up to 100% of this entity in 2013.

(22) MDC has the right to increase its ownership in Adrenalina, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 61% of this entity in 2013, up to 72% in 2014 and up to 82% in 2015.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.3.1

Exhibit 10.3.1

MEMBERSHIP UNIT PURCHASE AGREEMENT

by and among

MF + P ACQUISITION CO.,

INTEGRATED MEDIA SOLUTIONS, LLC

ROBERT INGRAM,

DESIREE DU MONT

and

RON CORVINO

Dated May 6, 2010 and effective as of April 30, 2010

MEMBERSHIP UNIT PURCHASE AGREEMENT

MEMBERSHIP UNIT PURCHASE AGREEMENT (this "Agreement") dated May 6, 2010 and effective as of the close of business on April 30, 2010 (the "Effective Date") , by and among MF + P ACQUISITION CO., a Delaware corporation (the "Purchaser"), INTEGRATED MEDIA SOLUTIONS, LLC, a New York limited liability company ("IMS Holdco"), ROBERT INGRAM ("Ingram"), DESIREE DU MONT ("Desiree"), RON CORVINO ("Ron"; and together with Ingram and Desiree, individually a "Principal" and collectively, the "Principals"), and solely for purposes of Sections 7.6.6 and 8.19, MDC Partners Inc., a corporation existing under the laws of Canada ("MDC Partners").

WITNESSETH:

WHEREAS, IMS Holdco formed Integrated Media Solutions Partners LLC, a Delaware limited liability company (the "Company"), with IMS Holdco as its initial member owning 100% of the issued and outstanding membership units in the Company (the "Membership Units");

WHEREAS, prior to the execution and delivery of this Agreement, IMS Holdco contributed substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business, to the Company pursuant to a General Assignment, Bill of Sale and Assumption Agreement attached hereto as Exhibit A (the "Conveyance Document");

WHEREAS, IMS Holdco desires to sell, and the Purchaser desires to purchase, 75% of the Membership Units to be designated as "Class A Units" (the "Purchased Units"), pursuant to the provisions of this Agreement such that after giving effect to such purchase, the Membership Units will be owned as follows: the Purchaser – 75%; IMS Holdco – 25%;

WHEREAS, simultaneously with the execution and delivery of this Agreement, the Purchaser, IMS Holdco and the Company are executing and delivering an Amended and Restated Limited Liability Company Agreement of the Company (the "Operating Agreement"), attached hereto as Exhibit B;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE I

SALE OF THE PURCHASED UNITS

Section 1.1       Sale of the Purchased Units.   Subject to the terms and conditions herein stated, IMS Holdco agrees to sell, assign, transfer and deliver to the Purchaser as of the Effective Date (as defined in Section 2.2), and the Purchaser agrees to purchase from IMS Holdco as of the Effective Date, the Purchased Units.

ARTICLE II

PURCHASE PRICE AND CLOSING

Section 2.1   Purchase Price; Working Capital Adjustment.

2.1.1    Purchase Price.  In full consideration for the purchase by the Purchaser of the Purchased Units, the purchase price (the "Purchase Price"), shall be calculated and paid by the Purchaser to IMS Holdco, as set forth below (capitalized terms used in this Article II and not otherwise defined, shall have the meaning ascribed to such terms in Sections 2.1.2  below):

(a)       Closing Payment.  At the Closing, the Purchaser shall pay to IMS Holdco an amount equal to $20,000,000 ("CP").

(b)       Working Capital Payment.  If the Effective Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.3, is less than the Target Working Capital (such difference being referred to herein as the "Working Capital Shortfall"), then within five business days after the Special Determination (as defined in Section 2.1.3(i) below) and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.3, (A) IMS Holdco shall pay to the Purchaser 75% of the Working Capital Shortfall and (B) immediately thereafter, IMS Holdco and the Purchaser shall contribute to the capital of the Company as a contribution to capital, 25% and 75%, respectively, of the Working Capital Shortfall.  If IMS Holdco fails to make all or any portion of the payment referred to in (A) above or the contribution referred to in (B) above, in addition to any other legal remedies available to it, the Purchaser shall have the right to offset any remaining unpaid amount against any future Purchase Price payments to IMS Holdco, which in the case of (B) above shall then be contributed by the Purchaser to the capital of the Company in respect of IMS Holdco's obligation under (B) above.  If the Effective Date Working Capital, as finally determined pursuant to the procedures set forth in Section 2.1.3, is greater than Target Working Capital, within five days after the Special Determination and any adjustments thereto shall have become binding on the parties pursuant to the procedures set forth in Section 2.1.3, the Company shall make a distribution to IMS Holdco in the amount of the difference between Target Working Capital and the Effective Date Working Capital. Any amount paid pursuant to this Section 2.1.1(b) shall be referred to as the "Working Capital Payment."

(c)       Top-Up Payments. The Purchaser shall pay to IMS Holdco the following top-up payments (the "Top-Up Payments"):

(i)      On or prior to the first anniversary of the Closing, the Purchaser shall pay to IMS Holdco an amount equal to $3,333,333 (the "Initial Top-Up Amount"), plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment; provided, however, in the event that on or before December 31, 2010 changes in United States federal long-term capital gains tax rates are enacted, which will result in an increase in 2011 federal long-term capital gains rates over 2010 federal long-term capital gains rates (the difference between such rates being referred to herein as the "LTG Rate Increase"), then, at the election of IMS Holdco (which election must be made by IMS Holdco in writing and received by the Purchaser no later than December 20, 2010), such payment shall be made on or prior to December 31, 2010, provided that the Initial Top-Up Amount shall be reduced by an amount equal to the product of (x) the Initial Top-Up Amount times (y) ½ of the LTG Rate Increase.  By way of example, if 2011 federal long-term capital gains rates are increased from 15% to 25%, then the LTG Rate Increase shall be equal to 10%, and, if a payment prior to December 31, 2010 is elected by IMS Holdco, the Initial Top-Up Amount shall be reduced by 5%;

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(ii)     on or prior to the second anniversary of the Closing, an amount equal to $3,333,333, plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment; and

(iii)    on or prior to the third anniversary of the Closing, an amount equal to $3,333,334, plus interest thereon accruing at a rate of 6% per annum from the Closing through the date of such payment.

(d)       First Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2010 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the First Additional Payment ("FAP"), calculated as follows:

FAP = Applicable Percentage x 22.5% x 2010 Adjusted GAAP PBT

; provided, however, in the event that 2010 Adjusted GAAP PBT were less than $5,333,333, then FAP shall equal (A) the excess, if any, of (i) 2010 Adjusted GAAP PBT over (ii) $4,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage.

(e)       Second Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2011 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Second Additional Payment ("SAP"), calculated as follows:

SAP = Applicable Percentage x 22.5% x 2011 Adjusted GAAP PBT

; provided, however, in the event that 2011 Adjusted GAAP PBT were less than $8,000,000, then SAP shall equal (A) the excess, if any, of (i) 2011 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that 2010 Adjusted GAAP PBT were less than $4,000,000 then for purposes of the calculations of SAP above, 2011 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

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(f)        Third Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2012 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Third Additional Payment ("TAP"), calculated as follows:

TAP = Applicable Percentage x 22.5% x 2012 Adjusted GAAP PBT

; provided, however, in the event that 2012 Adjusted GAAP PBT were less than $8,000,000, then TAP shall equal (A) the excess, if any, of (i) 2012 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT and 2011 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP and (B) SAP divided by the Applicable Percentage applicable to SAP divided by (ii) 90% minus (z) the 2010 Growth Payment (as defined in Section 2.1.1(i)(ii) herein), were less than $10,000,000, then for purposes of the calculations of TAP above, 2012 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(g)       Fourth Additional Payment. Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2013 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Fourth Additional Payment ("FOAP"), calculated as follows:

FOAP = Applicable Percentage x 22.5% x 2013 Adjusted GAAP PBT

; provided, however, in the event that 2013 Adjusted GAAP PBT were less than $8,000,000, then FOAP shall equal (A) the excess, if any, of (i) 2013 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT, 2011 Adjusted GAAP PBT and 2012 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP, (B) SAP divided by the Applicable Percentage applicable to SAP and (C) TAP divided by the Applicable Percentage applicable to TAP divided by (ii) 90% minus (z) the 2010 Growth Payment, were less than $16,000,000, then for purposes of the calculations of FOAP above, 2013 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(h)       Final Additional Payment.  Subject to clause (m) below, within five business days after the determination of Adjusted GAAP PBT for calendar year 2014 and any adjustments thereto shall have become binding on the parties in accordance with the Operating Agreement, the Purchaser shall pay to IMS Holdco the Final Additional Payment ("FIAP"), calculated as follows:

FIAP = Applicable Percentage x 22.5% x 2014 Adjusted GAAP PBT

4

; provided, however, in the event that 2014 Adjusted GAAP PBT were less than $8,000,000, then FIAP shall equal (A) the excess, if any, of (i) 2014 Adjusted GAAP PBT over (ii) $6,000,000, multiplied by (B) 90%, multiplied by (C) the Applicable Percentage;

; provided further, however, in the event that (x) the sum of 2010 Adjusted GAAP PBT, 2011 Adjusted GAAP PBT, 2012 Adjusted GAAP PBT and 2013 Adjusted GAAP PBT minus (y) (i) the sum of (A) FAP divided by the Applicable Percentage applicable to FAP, (B) SAP divided by the Applicable Percentage applicable to SAP, (C) TAP divided by the Applicable Percentage applicable to TAP and (D) FOAP divided by the Applicable Percentage applicable to FOAP divided by (ii) 90% minus (z) the 2010 Growth Payment, were less than $22,000,000, then for purposes of the calculations of FIAP above, 2014 Adjusted GAAP PBT shall be reduced by the amount of such shortfall.

(i)        Extra Payment; 2010 Growth Payment.

(i)       (A) The Purchaser shall pay to IMS Holdco an amount equal to $666,666 in respect of the calendar year associated with FAP, such payment to be made in 3 equal installments of $222,222 on the last day of each calendar quarter of the calendar year associated with FAP, commencing with the last day of the second calendar quarter of such calendar year and (B) the Purchaser shall pay to IMS Holdco an amount equal to $1,000,000 in respect of the calendar years associated with SAP or TAP, as the case may be, such payments to be made in 4 equal installments of $250,000 on the last day of each calendar quarter of the calendar years associated with SAP or TAP, as the case may be (each payment under (A) and (B), an "Extra Payment", and collectively, the "Extra Payments"); provided, however, IMS Holdco shall not be entitled to receive the applicable Extra Payment in the event that Adjusted GAAP PBT for the applicable calendar quarter is less than $250,000.

(ii)      Simultaneously with the payment of FAP, on the date FAP is paid to IMS Holdco, the Purchaser shall pay to IMS Holdco an amount equal to: (x) 50% times (y) the excess, if any, of (A) 2010 Adjusted GAAP PBT over (B) $5,906,849 (the "2010 Growth Payment").

(j)        Limitations.  As of any date during the period commencing on the Effective Date and ending on December 31, 2014, in the event the amount equal to (A) aggregate Adjusted GAAP PBT through such date less (B) the sum of the fractions, the numerators of which are each Additional Payment paid or payable through such date, and the denominators of which are the Applicable Percentage applicable to such Additional Payment divided by 90%, less (C) the 2010 Growth Payment, less (D) the aggregate amount of Extra Payments, results in an amount equal to or in excess of $30,000,000, then thereafter each of the provisos set forth in Sections 2.1.1(d) through (h) shall no longer be applicable.

(k)       No Negative Payments. Notwithstanding the potential reduction of Adjusted GAAP PBT as set forth in Sections 2.1.1(e) through (h) above, in the event that the calculation of FAP, SAP, TAP, FOAP or FIAP, as the case may be, results in an amount which is less than zero, such Purchase Price component shall be deemed to be zero.

5

(l)        Payment of the Purchase Price.Payment of each component of the Purchase Price and any payment that is required to be made under this Section 2.1 shall be made in United States dollars by the Purchaser by direct wire transfer to the account of IMS Holdco, as set forth on Schedule 2.1.1 (or to such other account as IMS Holdco may notify the Purchaser in writing).  Each of FAP, SAP, TAP, FOAP or FIAP, the Extra Payments and the 2010 Growth Payment, as the case may be, shall be deemed to include imputed interest, to the extent required by the Internal Revenue Code of 1986, as amended (the "Code").

(m)      Termination of Additional Payments.  Upon the exercise of a Call under Section 10.2(a) of the Operating Agreement, the delivery of a Sale Request Acceptance Notice or the consummation of a sale to a Prospective Purchaser (as such terms are defined in the Operating Agreement), as the case may be, pursuant to Section 10.2 of the Operating Agreement (each a "Sale Event"), IMS Holdco's right to receive any Additional Payments based upon Adjusted GAAP PBT for, or otherwise in respect of, the calendar year in which the applicable Sale Event occurred or for any calendar year(s) thereafter, shall cease, and the obligation of the Purchaser to pay to IMS Holdco any such Additional Payments shall terminate, contemporaneously with the applicable Sale Event.

2.1.2        Definitions.

(i)            "Additional Payments" shall mean the aggregate amount of the payments made in Sections 2.1.1(d) through (h).

(ii)           "Adjusted GAAP PBT" with respect to any year, shall mean Adjusted GAAP PBT (as defined and calculated pursuant to the Operating Agreement) for such year; provided, however, solely with respect to calendar year 2010, 2010 Adjusted GAAP PBT shall be calculated for the period commencing on May 1, 2010 and ending on December 31, 2010.

(iii)          "Applicable Percentage" shall mean, with respect to any Additional Payment, a percentage equal to the result of (A)(x) the average number of Class B Units of the Company owned by IMS Holdco during the calendar year for which Adjusted GAAP PBT is used to calculate such Additional Payment (such average being determined as the quotient of (1) the sum of the products of the varying numbers of Class B Units so owned by IMS Holdco by the number of days in such year each such number was owned by IMS Holdco, and (2) 365 or 366 days, as applicable for such year), divided by (y) the average total number of outstanding Class A Units and Class B Units for such year (calculated on the same basis as provided in the parenthetical under (A)(x) above), divided by (B) 25%.

(iv)          "Effective Date Working Capital" means the current assets of the Company and its subsidiaries, if any, less the current liabilities of the Company and the subsidiaries, if any, as of the close of business as of the Effective Date in accordance with GAAP; provided, however, an amount equal to $366,273 identified on Schedule 3.23(iv) shall not be treated as a current liability solely for purposes of determining the Effective Date Working Capital.

6

(v)           "GAAP" shall mean United States generally accepted accounting principles consistently applied.

(vi)          "Target Working Capital" means an amount equal to $1.00.

2.1.3        Accounting Procedures.

(i)            The Purchaser shall, or shall cause BDO Seidman LLP, or another independent accounting firm chosen by the Purchaser (the "Accountants"), at the Purchaser's expense, as soon as practicable after the Closing, to prepare in accordance with GAAP and deliver to the Representative, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business as of the Effective Date immediately after the consummation of the transactions effected by the Conveyance Document (the "Closing Balance Sheet"), together with a statement of the Accountants based upon such report which sets forth the Effective Date Working Capital (the "Special Determination").  The Purchaser shall have the option, in its sole discretion (and at its sole expense) to instruct the Accountants to audit or perform agreed upon procedures on the Closing Balance Sheet and to determine the scope of such audit or procedures.  If the Representative does not agree that the Special Determination correctly states the Effective Date Working Capital, the Representative shall promptly (but not later than 30 days after the delivery to him of the Special Determination) give written notice to the Purchaser of any exceptions thereto (in reasonable detail describing the nature of the disagreement asserted).  If the Representative and the Purchaser reconcile their differences, the Effective Date Working Capital calculation shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  If the dispute relates to an accounting issue and if the Representative and the Purchaser are unable to reconcile their differences in writing within 20 days after written notice of exceptions is delivered to the Purchaser (the "Reconciliation Period"), the accounting items in dispute shall be submitted to a mutually acceptable accounting firm (other than the Accountants) (the "Independent Auditors") for final determination.  The Effective Date Working Capital calculation shall be deemed adjusted in accordance with the determination of the Independent Auditors and shall become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  The Independent Auditors shall consider only the accounting items in dispute and shall be instructed to act within 20 days (or such longer period as the Representative and the Purchaser may agree) to resolve all accounting items in dispute.  If the dispute involves a non-accounting issue and such dispute cannot be reconciled within the Reconciliation Period, the dispute shall be settled by a court of competent jurisdiction.  If the Representative does not give written notice of any exception within 30 days after the delivery to him of the Special Determination or if the Representative gives written notification of his acceptance of the Effective Date Working Capital prior to the end of such 30 day period, the Effective Date Working Capital set forth in the Special Determination shall thereupon become binding, final and conclusive upon all the parties hereto and enforceable in a court of law.

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(ii)           In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 2.1.3, then the Purchaser and the Representative agree to select another accounting firm (other than the Accountants) to perform the services to be performed under this Section 2.1.3 by the Independent Auditors.  If the Purchaser and the Representative fail to select the Independent Auditors as required by Section 2.1.3(i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either the Purchaser or the Representative may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York to appoint an independent firm of certified public accountants to perform the services required under this Section 2.1.3 by the Independent Auditors.  The fees of JAMS shall be shared equally by the Purchaser and IMS Holdco.  For purposes of this Section 2.1.3 the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this Section 2.1.3(ii).

(iii)          The Independent Auditors shall determine the party (i.e., the Purchaser or the Representative) whose asserted position as to the calculation of the Effective Date Working Capital is furthest from the determination of the Effective Date Working Capital by the Independent Auditors, which non-prevailing party shall pay the fees and expenses of the Independent Auditors and shall reimburse the prevailing party for the portion of the fees of JAMS previously paid by it.

2.1.4        Examination of Books and Records.  The books and records of IMS Holdco (with respect to periods prior to the Closing Date) and the Company and its subsidiaries (if any) shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 2.1.  The Principals, on the one hand, and the Purchaser, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by them in making any determinations hereunder or to support a position that is contrary to the position taken by the other party.

Section 2.2       Closing.   The closing of the transactions contemplated by this Agreement (the "Closing") shall take place simultaneously with the execution and delivery of this Agreement effective as of the Effective Date, at the offices of Davis & Gilbert LLP, 1740 Broadway, New York, New York 10019 or by the exchange of documents and instruments by mail, courier, telecopy and wire transfer to the extent mutually acceptable to the parties hereto (the date of closing is referred to as the "Closing Date").  The transactions contemplated by this Agreement shall be effective as of the Effective Date and the Assets (as defined in the Conveyance Document) transferred to the Company shall be those owned by the Company as of the Effective Date, subject to transactions in the ordinary course of business between the Effective Date and the Closing Date.  After the Effective Date and through the Closing Date, the operations of IMS Holdco will be for the account of the Company, and any gain or loss during such period shall inure to the Company’s detriment or benefit.

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Section 2.3       Third Party Consents.  Anything in this Agreement to the contrary notwithstanding, in the event an assignment or purported assignment to the Company of any of the agreements, contracts or commitments of IMS Holdco pursuant to the Conveyance Document or any claim, right or benefit arising thereunder or resulting therefrom, without the consent of other parties thereto, would constitute a breach thereof or would not result in the Company receiving all of the rights of IMS Holdco thereunder, such agreement, contract or commitment shall be deemed not to have been assigned to the Company.  In those circumstances, if reasonably requested by the Purchaser, after the Closing, IMS Holdco and the Principals will use their best efforts to obtain any such consent (excluding the payment of any fees).  If such consent is not obtained and is required to effectively assign any agreement, contract or commitment to the Company, the Principals and IMS Holdco will reasonably cooperate with the Company to provide the Company with the full claims, rights and benefits thereunder, including enforcement at the cost and for the benefit of the Company of any and all rights of IMS Holdco, against a third party thereto arising out of the breach or cancellation by such third party or otherwise, and any amount received by IMS Holdco in respect thereof shall be held for and paid over to the Company.

Section 2.4        Further Assurance; Post Closing Cooperation. IMS Holdco will, from time to time, at the request of the Purchaser, whether at or after the Closing Date, execute and deliver such other and further instruments of conveyance, assignment, transfer and consent necessary for the conveyance, assignment and transfer of the Assets (as defined in the Conveyance Document) pursuant to the Conveyance Document.  Following the Closing, upon reasonable advance notice, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data relating to IMS Holdco or the Company and its subsidiaries, if any, in its possession with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of tax returns, (ii) the determination or enforcement of rights and obligations under this Agreement, (iii) compliance with the requirements of any Governmental or Regulatory Authority (as defined in Section 3.1.2), (iv) the determination or enforcement of the rights and obligations of any party entitled to indemnification under Article VII, (v) any actual or threatened action or proceeding, and (vi) the verification of the Assets and Assumed Liabilities (as defined in the Conveyance Document).

ARTICLE III

REPRESENTATIONS OF IMS HOLDCO AND THE PRINCIPALS

A.  Each of the Principals severally represents and warrants to and with the Purchaser, as follows:

Section 3.1       Execution and Validity of Agreements; Restrictive Documents.

3.1.1        Execution and Validity.  The Principal has the full legal right and capacity to enter into this Agreement and to perform his or her respective obligations hereunder.  This Agreement has been duly and validly executed and delivered by such Principal and, assuming due authorization, execution and delivery by the Purchaser, IMS Holdco and each other Principal a party hereto, constitutes a legal, valid and binding obligation of such Principal, enforceable against such Principal in accordance with its terms.

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3.1.2        No Restrictions.  There is no suit, action, claim, investigation or inquiry by any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision ("Governmental or Regulatory Authority"), and no legal, administrative or arbitration proceeding is pending or, to such Principal's knowledge, threatened against the Principal with respect to the execution, delivery and performance of this Agreement or the transactions contemplated hereby or any other agreement entered into by such Principal in connection with the transactions contemplated hereby.

3.1.3        Non-Contravention.  The execution, delivery and performance by the Principal of his or her obligations hereunder and the consummation of the transactions contemplated hereby, will not as of the Closing Date (a) result in the violation by such Principal of any statute, law, rule, regulation or ordinance (collectively, "Laws"), or any judgment, decree, order, writ, permit or license (collectively, "Orders"), of any Governmental or Regulatory Authority, applicable to such Principal, or (b) conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require such Principal to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of the assets or properties of such Principal, under any of the terms, conditions or provisions of any agreement, commitment, lease, license, evidence of indebtedness, letter of credit, mortgage, indenture, security agreement, instrument, note, bond, franchise, permit, concession, or other instrument, obligation or agreement of any kind, written or oral (collectively, "Contracts"), to which such Principal is a party or by which such Principal or any of his or her assets or properties are bound.

3.1.4        Approvals and Consents.  No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Principal is a party for the execution and delivery of this Agreement by such Principal, the performance by such Principal of his or her obligations hereunder or the consummation of the transactions contemplated hereby.

B.  IMS Holdco and the Principals, jointly and severally, represent and warrant to and with the Purchaser, as follows:

Section 3.2       Existence and Good Standing.  IMS Holdco has the full limited liability company power and authority to enter into this Agreement and the Conveyance Document and to perform its obligations hereunder and thereunder.  The Company has the full limited liability company power and authority to enter into the Conveyance Document and to perform its obligations thereunder. The execution and delivery of this Agreement and the Conveyance Document by IMS Holdco and the Conveyance Document by the Company, and the consummation by such parties of the transactions contemplated hereby and thereby have been duly authorized by all required company action on behalf of such parties.  This Agreement and the Conveyance Document have been duly and validly executed and delivered by IMS Holdco and constitute a legal, valid and binding obligation of IMS Holdco, enforceable against it in accordance with their terms.  The Conveyance Document has been duly and validly executed and delivered by the Company, and constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms.  The Company and IMS Holdco are each duly organized and are each validly existing and in good standing (including tax status) under the laws of the State of Delaware and the State of New York, respectively, with the full power and authority to own their respective properties and to carry on their respective businesses (the business operated by the Company hereinafter referred to as the "Business") all as and in the places where such properties are now owned or operated or such businesses are now being conducted except where such failure to qualify would not have a material adverse effect on the respective businesses.  The Company and IMS Holdco are each duly qualified, licensed or admitted to do business and each of them is in good company and tax standing in the jurisdictions set forth on Schedule 3.2, which are the only jurisdictions in which the ownership, use or leasing of their respective assets and properties, or the conduct or nature of their respective businesses, makes such qualification, licensing or admission necessary.

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Section 3.3       Membership Interests; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments.  The Principals own of record and beneficially have valid title to 100% of the membership interests of IMS Holdco.  IMS Holdco owns of record and beneficially has valid title to 100% of the Membership Units of the Company, including the Purchased Units, and such ownership is free and clear or all Liens.  Except as set forth on Schedule 3.3, there are no outstanding subscriptions, options, warrants, rights (including "phantom stock rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind providing for the purchase, issuance or sale of any equity or ownership or proprietary interest of the Company, or which grants any Person other than IMS Holdco the right to share in the earnings of the Company.  Except as set forth on Schedule 3.3, the Company does not, directly or indirectly, own any equity interest in or have any voting rights with respect to any Person.  There are no outstanding subscriptions, options, rights, warrants, calls, commitments or arrangements of any kind to acquire any of the Purchased Units and there are no agreements or understandings with respect to the sale or transfer of any of the Purchased Units other than this Agreement. There is no suit, action, claim, investigation or inquiry by any Governmental or Regulatory Authority, and no legal, administrative or arbitration proceeding pending or, to the knowledge of the Principals, threatened, against any Principal or the Company or any of the Purchased Units, with respect to the execution, delivery and performance of this Agreement or the Conveyance Document or the transactions contemplated hereby or thereby or any other agreement entered into by the Principals or IMS Holdco in connection with the transactions contemplated hereby or thereby.

Section 3.4       Financial Statements and No Material Changes.  Schedule 3.4(A) sets forth (a) the unaudited balance sheets of IMS Holdco as at December 31, 2008 and December 31, 2009 and the related unaudited statements of operations for the fiscal years then ended, and (b) the unaudited balance sheets of IMS Holdco as at March 31, 2010 (the "Balance Sheet") and the related unaudited statements of operations for the three months then ended.  Such financial statements have been prepared in accordance with GAAP throughout the periods indicated except as set forth on Schedule 3.4(B).  Each balance sheet fairly presents the financial condition of the entity or entities included within such balance sheet, at the respective date thereof, and reflects all claims against and all debts and liabilities of such entities, fixed or contingent, as at the respective date thereof, required to be shown thereon under GAAP and the related statements of operations fairly present the results of operations for the respective period indicated.  Except for the transactions consummated pursuant to the Conveyance Document, since March 31, 2010 (the "Balance Sheet Date"), there has been no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects of IMS Holdco or the Company.

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Section 3.5       Books and Records.  IMS Holdco did not have and the Company does not have any of its records, systems, controls, data or information recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) were not prior to the Effective Date under the exclusive ownership and possession of IMS Holdco and which are not now under the exclusive ownership and possession of the Company.  IMS Holdco or the Principals have delivered to the Purchaser complete and correct copies of the Certificate of Formation and the limited liability company agreement of the Company in effect immediately prior to the execution of this Agreement.

Section 3.6       Title to Properties; Encumbrances; No Prior Activities.

3.6.1        Title to Properties; Encumbrances.  Except for the Excluded Assets listed in the Conveyance Document, IMS Holdco had and the Company now has good and valid title to, or enforceable leasehold interests in or valid rights under contract to use, all the properties and assets owned or used by IMS Holdco (real, personal, tangible and intangible), including, without limitation (a) all the properties and assets reflected in the Balance Sheet, (b) all the properties and assets purchased or otherwise contracted for by IMS Holdco since the Balance Sheet Date (except for properties and assets reflected in the Balance Sheet or acquired or otherwise contracted for since the Balance Sheet Date that have been sold or otherwise disposed of in the ordinary course of business) and (c) all monies received from clients of the Company (including, without limitation, all monies received in connection with the Company's media purchase obligations on behalf of its clients), in each case free and clear of all Liens, except for Liens set forth on Schedule 3.6.  The property, plant and equipment conveyed by IMS Holdco to the Company, whether owned or otherwise contracted for, is in a state of good maintenance and repair (ordinary wear and tear excepted) and is adequate and suitable for the purposes for which they are presently being used, including the Business.

3.6.2        No Prior Activities.  The Company was created solely for the purpose of engaging in the transactions contemplated by the Conveyance Document and this Agreement.  The Company has not engaged in any activities other than in connection with its formation, the negotiation, execution and delivery of this Agreement, the Conveyance Document and the Operating Agreement, and the consummation of the transactions contemplated hereby and thereby.  Except for liabilities incurred in connection with its formation and the consummation of the transactions contemplated by this Agreement, the Conveyance Document and the Operating Agreement, the Company has not incurred any liabilities or entered into any agreements or arrangements with any Person.  As of the Closing Date, (x) neither Media Time Sales LLC nor Performance Fuel Network LLC (collectively, the "Retained Subsidiaries") are engaged in any operational or business activities and (y) the Retained Subsidiaries do not have any liabilities whatsoever or any obligations with respect to any agreements or arrangements with any Person.

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Section 3.7       Real Property.

3.7.1        Owned Real Property.The Company does not own any real property (including ground leases) or hold a freehold interest in any real property or any option or right of first refusal or first offer to acquire any real property.

3.7.2        Leased Real Property.  Schedule 3.7.2 contains an accurate and complete list of all real property leases, subleases, real property licenses and other occupancy agreements, including without limitation, any modification, amendment or supplement thereto and any other related document or agreement executed or entered into by the Company, or by IMS Holdco and assigned to the Company pursuant to the Conveyance Document, to which the Company is a party (as lessee, sublessee, lessor, sublessor, licensor or licensee) (each individually, a "Real Property Lease" and collectively, the "Real Property Leases").  Each Real Property Lease set forth on Schedule 3.7.2 (or required to be set forth on Schedule 3.7.2) is valid, binding and in full force and effect; all rents and additional rents and other sums, expenses and charges due thereunder to date on each such Real Property Lease have been paid; and the lessee has been in peaceable possession since the commencement of the original term of such Real Property Lease and no waiver, indulgence or postponement of the lessee's obligations thereunder has been granted by the lessor.  There exists no default or event of default by IMS Holdco or the Company or to the knowledge of the Principals by any other party to any Real Property Lease; and there exists no occurrence, condition or act (including the purchase of the Purchased Units hereunder) which, with the giving of notice, the lapse of time or the happening of any further event or condition, would become a default or event of default by IMS Holdco or the Company under any Real Property Lease, and there are no outstanding claims of breach or indemnification or notice of default or termination of any Real Property Lease.  IMS Holdco held and the Company now holds the leasehold estate on all the Real Property Leases free and clear of all Liens except as set forth on Schedule 3.7.2.  The real property leased by IMS Holdco and/or the Company is in a state of good maintenance and repair (ordinary wear and tear excepted), adequate and suitable for the purposes for which it is presently being used, and there are no material repair or restoration works likely to be required in connection with any of the leased real properties.  IMS Holdco was, and the Company now is, in physical possession and actual and exclusive occupation of the whole of each of its leased properties.  No environmental claim has been made against IMS Holdco or the Company with respect to any Real Property Lease.  Neither IMS Holdco nor the Company owes any brokerage commission with respect to any of the Real Property Leases.

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Section 3.8       Contracts.  Schedule 3.8 hereto contains an accurate and complete list of the following Contracts (whether written or oral, but indicating which Contracts are oral) to which the Company is currently a party or IMS Holdco was a party immediately prior to the assignment of the same to the Company pursuant to the Conveyance Document (and Schedule 3.8 indicates if a listed item has not been assigned to and assumed by the Company pursuant to the Conveyance Document): (a) all Plans (as such term is defined in Section 3.19), (b) any personal property lease with a fixed annual rental of $10,000 or more, (c) any Contract relating to capital expenditures which involves payments of $25,000 or more in any single transaction or series of related transactions, (d) any Contract relating to the making of a loan or advance to or investment in, any other Person, (e) any agreement, instrument or arrangement evidencing or relating in any way to indebtedness for money borrowed or to be borrowed, whether directly or indirectly, by way of loan, purchase money obligation, guarantee (other than the endorsement of negotiable instruments for collection in the ordinary course of business), conditional sale, purchase or otherwise, (f) any management service, employment, consulting or similar type of Contract which is not cancelable by the Company or IMS Holdco without penalty or other financial obligation within 30 days, (g) any Contract limiting the Company's freedom to engage in any line of business or to compete with any other Person, including, without limitation, any agreement limiting the ability of the Company or IMS Holdco or any of their respective affiliates to take on competitive accounts during or after the term thereof, (h) any collective bargaining or union agreement, (i) any Contract between the Company, on the one hand, and any officer or director thereof, on the other hand, not covered by subsection (f) above (including indemnification agreements), (j) any secrecy or confidentiality agreement (other than standard confidentiality agreements in computer software license agreements or agreements with clients entered into in the ordinary course of business), (k) any agreement with respect to any Intellectual Property (as defined in Section 3.14) other than "shrink-wrap" and similar end-user licenses, (l) any agreement with a client required to be listed on Schedule 3.16, (m) any agreement, indenture or other instrument which restricts the ability of the Company or any of its subsidiaries to make distributions in respect of its equity, (n) any joint venture agreement involving a sharing of profits not covered by clauses (a) through (m) above, (o) any Contract (not covered by another subsection of this Section 3.8) which involves $25,000 or more over the unexpired term thereof and is not cancelable by the Company, without penalty or other financial obligation within 30 days; provided, however, Contracts of a similar nature which individually do not involve $25,000 but in the aggregate involve $25,000 or more over the unexpired terms shall also be set forth on Schedule 3.8, (p) any Contract with a media buying service; provided, however, commitments to purchase media in the ordinary course of business do not have to be set forth on Schedule 3.8, and (q) any agreement (not covered by another subsection of this Section 3.8) between the Company, on the one hand, and any member of the Company, on the other hand. Notwithstanding anything to the contrary contained above, (x) commitments to media and production expenses which are fully reimbursable from clients, and (y) estimates or purchase orders given in the ordinary course of business relating to the execution of projects, do not have to be set forth on Schedule 3.8. Each Contract which has been assigned to and assumed by the Company pursuant to the Conveyance Document, including without limitation, those required to be set forth on Schedule 3.8, is in full force and effect, and there exists no default or event of default by the Company or IMS Holdco or, to the knowledge of the Principals, by any other party, or occurrence, condition, or act (including the purchase of the Purchased Units hereunder) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default thereunder by the Company, and there are no outstanding claims of breach or indemnification or notice of default or termination of any such Contract.  Summaries of all oral Contracts contained on Schedule 3.8 are complete and accurate in all material respects.

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Section 3.9       Non-Contravention; Approvals and Consents.   The execution, delivery and performance by the Principals, the Company and IMS Holdco of their respective obligations under this Agreement and the Conveyance Document and the consummation of the transactions contemplated hereby and thereby, will not (a) violate, conflict with or result in the breach of any provision of the certificate of formation and limited liability company agreement (or other comparable documents) of the Company or IMS Holdco; (b) result in the violation by the Company or IMS Holdco of any Laws or Orders of any Governmental or Regulatory Authority, or (c) if the consents and notices set forth in Schedule 3.9 are obtained, conflict with, result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Company or IMS Holdco to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or result in the creation or imposition of any Lien upon any of their respective assets or properties, or under any of the terms, conditions or provisions of any Contract to which the Company or IMS Holdco is a party or by which the Company or IMS Holdco or any of their respective assets or properties are or were bound.  Except as set forth in Schedule 3.9, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Company or IMS Holdco is a party, or by which their respective assets or properties were or are bound, for the execution and delivery of this Agreement or the Conveyance Document, the performance by the Company or IMS Holdco of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby.

Section 3.10     Litigation.  Except as set forth on Schedule 3.10, there is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Principals, any investigation by) any Governmental or Regulatory Authority, pending or, to the knowledge of the Principals, threatened, against the Company or IMS Holdco with respect to this Agreement or the transactions contemplated hereby or by the Conveyance Document, or any other agreement entered into by the Company or IMS Holdco in connection with the transactions contemplated hereby, or against or affecting the Business or the assets transferred to the Company pursuant to the Conveyance Document; and no acts, facts, circumstances, events or conditions occurred or exist which are a basis for any such action, proceeding or investigation.  Neither the Company nor IMS Holdco is subject to any Order entered in any lawsuit or proceeding. Schedule 3.10 also sets forth with respect to each pending or, to the knowledge of the Principals, threatened action, suit or proceeding listed thereon, the amount of costs, expenses or damages the Company or IMS Holdco has incurred to date and reasonably expects to incur through the conclusion thereof.

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Section 3.11    Taxes.   Each of IMS Holdco and the Company have timely completed and filed, or caused to be filed, taking into account any valid extensions of due dates, completely and accurately, all federal, state, local and foreign (if any) tax or information returns (including estimated tax returns) required under the statutes, rules or regulations of such jurisdictions to be filed by each of them.  The term "Taxes" means taxes, duties, charges or levies of any nature imposed by any taxing or other Governmental or Regulatory Authority, including without limitation income, gains, capital gains, surtax, capital, franchise, capital stock, value-added taxes, taxes required to be deducted from payments made by the payor and accounted for to any tax authority, employees' income withholding, back-up withholding, withholding on payments to foreign Persons, social security, national insurance, unemployment, worker's compensation, payroll, disability, real property, personal property, sales, use, goods and services or other commodity taxes, business, occupancy, excise, customs and import duties, transfer, stamp, and other taxes (including interest, penalties or additions to tax in respect of the foregoing), and includes all taxes payable by IMS Holdco or the Company pursuant to Treasury Regulations §1.1502-6 or any similar provision of state, local or foreign law.  All Taxes shown on said returns to be due and all other Taxes due and owing (whether or not shown on any Tax return) have been paid and all additional assessments received prior to the Closing Date have been paid or are being contested in good faith, in which case, such contested assessments are set forth on Schedule 3.11.  Each of IMS Holdco and the Company has collected all sales, use, goods and services or other commodity Taxes required to be collected and remitted or will remit the same to the appropriate taxing authority within the prescribed time periods.  Each of IMS Holdco and the Company have withheld all amounts required to be withheld on account of Taxes from amounts paid to employees, former employees, directors, officers, members, residents and non-residents and remitted or will remit the same to the appropriate taxing authorities within the prescribed time periods.  The amount set up as an accrual for Taxes (aside from any reserved for deferred Taxes established to reflect timing differences between book and Tax accrual) on the Balance Sheet (as opposed to the notes thereto) is sufficient for the payment of all unpaid Taxes of IMS Holdco, whether or not disputed, for all periods ended on and prior to the date thereof.  Since the Balance Sheet Date, IMS Holdco has not incurred any liabilities for Taxes other than in the ordinary course of the business of IMS Holdco consistent with past custom and practice. To the knowledge of the Principals, no member, manager, director or officer (or employee responsible for Tax matters) of IMS Holdco or the Company has any reason to believe that any authorities may assess any additional Taxes for any period for which Tax returns have been filed.  The Principals have delivered to the Purchaser correct and complete copies of all federal, state and local income tax returns filed with respect to IMS Holdco and the Company that were requested by the Purchaser.  Except as set forth on Schedule 3.11, none of the federal, state or local income tax returns of either IMS Holdco or the Company have ever been audited by the Internal Revenue Service or any other Governmental or Regulatory Authority.  No examination of any return of IMS Holdco or the Company is currently in progress, and neither IMS Holdco nor the Company has received notice of any proposed audit or examination.  No deficiency in the payment of Taxes by IMS Holdco or the Company for any period has been asserted in writing by any taxing authority and remains unsettled at the date of this Agreement.  Neither IMS Holdco nor the Company has made any agreement, waiver or other arrangement providing for an extension of time with respect to the assessment or collection of any Taxes against it.  Neither IMS Holdco nor the Company has been a member of an affiliated group filing consolidated federal income tax returns nor has it been included in any combined, consolidated or unitary state or local income tax return.  Neither IMS Holdco nor the Company will be required as a result of a change in accounting method for any period ending on or before the Closing Date to include any adjustment under Section 481 of the Code (or any similar provision of state, local or foreign income tax law) in income for any period ending after the Closing Date, or as a result of a change for any period that may be required by law in connection with this transaction.  Neither IMS Holdco nor the Company is obligated to make any payments or is a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Section 280G of the Code.  Neither IMS Holdco nor the Company is or has been a U.S. real property holding corporation within the meaning or Section 897 of the Code and none of the Principals or IMS Holdco are nonresident alien individuals within the meaning of Section 871(b)(1) of the Code.  Neither IMS Holdco nor the Company has entered into any Tax sharing or indemnification agreement with any party.  The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); (ii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iii) prepaid amount received on or prior to the Closing Date.  Since its inception, IMS Holdco has been treated as a partnership for federal, state, local and foreign income tax purposes and will continue to be treated as a partnership through the Closing Date. Since its formation, the Company has been treated as disregarded entity within the meaning of Treasury Regulation Section 301.7701-3 for federal, state and local income tax purposes.

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Section 3.12     Liabilities.  Except for the Assumed Liabilities (as defined in the Conveyance Document) set forth in the Conveyance Document, or as set forth on Schedule 3.12, neither the Company nor IMS Holdco has any outstanding claims, liabilities or indebtedness of any nature whatsoever as to which the Company is or may become responsible (collectively in this Section 3.12, "Liabilities"), whether accrued, absolute or contingent, determined or undetermined, asserted or unasserted, and whether due or to become due, other than (i) Liabilities specifically disclosed in any Schedule hereto; (ii) Liabilities under Contracts of the type required to be disclosed by IMS Holdco, the Company and the Principals on any Schedule and so disclosed or which because of the dollar amount or other qualifications are not required to be listed on such Schedule; and (iii) Liabilities incurred since the Balance Sheet Date in the ordinary course of business and consistent with past practice of IMS Holdco or the Company, as the case may be.

Section 3.13     Insurance.  Schedule 3.13 contains a true and complete list (including the names and addresses of the insurers, the names of the Persons to whom such insurance policies have been issued, the expiration dates thereof, the annual premiums and payment terms thereof, whether it is a "claims made" or an "occurrence" policy and a brief description of the interests insured thereby) of all liability, property, workers' compensation and other insurance policies currently in effect that insure the property, assets, Business and employees of the Company, including but not limited to the property, assets, business and employees of IMS Holdco that were transferred to the Company pursuant to the Conveyance Document (other than self-obtained insurance policies by such employees). Each such insurance policy is valid and binding and in full force and effect, all premiums due thereunder have been paid and neither IMS Holdco nor the Company has received any notice of cancellation or termination in respect of any such policy or default thereunder.  To the knowledge of the Principals, such insurance policies are placed with financially sound and reputable insurers, and are in amounts and have coverage that are reasonable and customary for Persons engaged in the operation of the Business.  Neither IMS Holdco nor the Company, or to the knowledge of the Principals, the Person to whom such policy has been issued has received notice that any insurer under any policy referred to in this Section 3.13 is denying liability with respect to a claim thereunder or defending under a reservation of rights clause.  Within the last two years neither IMS Holdco nor the Company has filed for any claims exceeding $25,000 against any of its insurance policies, exclusive of automobile and health insurance policies. None of such policies shall lapse or terminate by reason of the transactions contemplated by this Agreement or the Conveyance Document and all such policies shall continue in effect after the Closing Date for the benefit of the Company.  Neither IMS Holdco nor the Company has received any notice of cancellation of any such policy.  Neither IMS Holdco nor the Company has received written notice from any of its insurance carriers that any premiums will be materially increased in the future or that any insurance coverage listed on Schedule 3.13 will not be available in the future on substantially the same terms now in effect. Neither IMS Holdco nor the Company has been refused any insurance or required to pay higher than normal or customary premiums, nor has its coverage been limited by any insurance carrier to which it has applied for insurance during the last three years.

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Section 3.14     Intellectual Properties.

3.14.1      Definitions.  For purposes of this Agreement, the following terms have the following definitions:

"Intellectual Property" shall include, without limitation, any or all of the following and all rights associated therewith: (a) all domestic and foreign patents, and applications therefor, and all reissues, reexaminations, divisions, renewals, extensions, continuations and continuations-in-part thereof; (b) all inventions (whether patentable or not), invention disclosures, improvements; (c) trade secrets, confidential and proprietary information, know how, technology, technical data and customer lists, financial and marketing data, pricing and cost information, business and marketing plans, databases and compilations of data, rights of privacy and publicity, and all documentation relating to any of the foregoing; (d) all copyrights, copyright registrations and applications therefor, unregistered copyrights, the content of all World Wide Web sites of a Person and all other rights corresponding thereto throughout the world; (e) all mask works, mask work registrations and applications therefor; (f) all industrial designs and any registrations and applications therefor; (g) all trade names, corporate names, logos, trade dress, common law trademarks and service marks, trademark and service mark registrations and applications therefor and all goodwill associated therewith; (h) any and all Internet domain names and Web sites (including all software and applications, and all components and/or modules thereof), used in connection therewith; and (i) all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded, and all documentation related to any of the foregoing.

"Intellectual Property of the Company" shall mean any Intellectual Property that is owned by the Company (including Intellectual Property transferred by IMS Holdco to the Company pursuant to the Conveyance Document), including Registered IP and Unregistered IP.

"Licensed Intellectual Property" means any Intellectual Property owned by another Person that is used by the Company in the operation of the Business, including Off-the-Shelf Software (as defined below), but excluding rights in or to materials created for clients, to the extent to which such (x) client is the first owner of copyright in such materials or (y) the materials are subject to a written assignment of copyright in favor of clients of the Company.

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3.14.2      Representations.  Except as set forth on Schedule 3.14.2, all of the Intellectual Property of IMS Holdco was transferred to the Company pursuant to the Conveyance Document. Schedule 3.14.2 hereto contains an accurate and complete list of all (a) patents, patent applications, registered trademarks, applications for registered trademarks, registered service marks, domain names, applications for registered service marks, logos, registered copyrights and applications for registered copyrights which are owned by the Company (the "Registered IP"), (b) all unregistered trademarks, unregistered service marks and material unregistered copyrights which are owned by the Company (the "Unregistered IP") and (c) all Licensed Intellectual Property that is material to the operation of the Business, other than widely distributed off-the-shelf applications subject to shrink-wrap and similar non-negotiated end-user license agreements ("Off-the-Shelf Software"). Except as set forth on Schedule 3.14.2, the registrations and applications of the Registered IP listed on Schedule 3.14.2 are in the name of IMS Holdco, and are valid, in proper form, enforceable and subsisting, all necessary registration and renewal fees in connection with such registrations have been made and all necessary documents and certificates in connection with such registrations have been filed with the relevant patent and Internet domain names, copyrights and trademark authorities in the United States or other jurisdictions where the Business is conducted for the purposes of maintaining such Intellectual Property registrations, and applications therefor, and no actions (including filing of documents or payments of fees) are due within ninety (90) days after the Closing.  No registration, or application therefor, for any of the Registered IP has lapsed, expired, or been abandoned, and no such registrations, or applications therefor, are the subject of any opposition, interference, cancellation, or other legal, quasi-legal, or governmental proceeding pending before any governmental, registration, or other authority in any jurisdiction.  Except as set forth on Schedule 3.14.2, (i) the Company is the sole and exclusive owner of all rights, title and interest in and to the Intellectual Property of the Company, free and clear of all Liens, (ii) no Person has any rights to use any of the Intellectual Property of the Company, (iii) neither IMS Holdco nor the Company has granted to any Person, or authorized any Person to retain, any ownership in the Intellectual Property of the Company, and (iv) all Licensed Intellectual Property in the Company's possession or used in the operation of the Business has been properly licensed from the owner of such Intellectual Property, and the Company possesses all license agreements, certificates or documentation sufficient to substantiate such rights, and the Company is in compliance with, and IMS Holdco has not in the past violated, such license agreements.  Except as set forth on Schedule 3.14.2,the consummation of the transactions contemplated hereby will not result in any loss or impairment of the Company's rights to own or use any Intellectual Property, nor will such consummation require the consent of any third party in respect of any Intellectual Property. The operation of the Business and use of all Intellectual Property therein does not infringe the Intellectual Property of any other Person. There are no proceedings pending or, to the knowledge of the Principals, threatened against IMS Holdco or the Company with respect to the Intellectual Property, or with respect to any other Intellectual Property, alleging the infringement or misappropriation by IMS Holdco or the Company of any Intellectual Property of any Person, and neither IMS Holdco nor the Company has received notice from any Person that the operation of the Business infringes the Intellectual Property of any Person.  There are no claims pending or, to the knowledge of the Principals, threatened challenging the validity of any Intellectual Property of the Company or any Intellectual Property used by the Company in the conduct of the Business. Neither IMS Holdco nor the Company has entered into or is otherwise bound by any consent, forbearance or any settlement agreement which limits the rights of the Company to use the Intellectual Property of the Company. To the knowledge of the Principals, no Person is infringing or misappropriating any of the Intellectual Property of the Company. All Intellectual Property of the Company was either developed (a) by employees of IMS Holdco within the scope of such employee's employment duties; or (b) by independent contractors or other third parties who have assigned all of their rights therein to IMS Holdco pursuant to a written agreement, and all such employees, independent contractors, and other third parties have waived, pursuant to a written agreement, their moral rights in all such Intellectual Property in favor of the Company or IMS Holdco.  Except as set forth on Schedule 3.14.2, the Intellectual Property of the Company does not contain any software licensed under terms which require, as a condition of the use, modification, or distribution of such software, that other software incorporated into, derived from, or distributed with such software: (x) be disclosed or distributed in source code form; (y) be licensed under terms that permit making derivative works; or (z) be redistributable at no charge to subsequent licensees.

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3.14.3      Privacy and Security.  All information or data of any kind possessed by the Company, including but not limited to, personally identifiable information collected from consumers ("PII"), aggregate or anonymous information collected from consumers ("Non-PII") and employee data (collectively, "Data"), has been collected, by IMS Holdco or the Company, or any other Person, and is being maintained, stored, processed and used by the Company, in compliance with all Laws and Orders.  IMS Holdco or the Company has at all times presented a privacy policy ("Privacy Policy") to consumers prior to the collection of any PII or Non-PII online.  The Privacy Policy, and any other representations, marketing materials and advertisements that address privacy issues and the treatment of PII and Non-PII, accurately and completely describe IMS Holdco's and the Company's respective information collection and use practices, and no such notices or disclosures have been inaccurate, misleading or deceptive.  Neither IMS Holdco nor the Company has collected or received any PII from children under the age of 13 without verifiable parental consent or directed any of its websites to children under the age of 13 through which such PII could be obtained.  IMS Holdco and the Company have stored and maintained all Data in a secure manner, using commercially reasonable technical measures, to assure the integrity and security of the Data and to prevent loss, alteration, corruption, misuse and unauthorized access to such Data.  There has been no unauthorized use, access to or disclosure of any Data.  Neither IMS Holdco nor the Company has received any claims, notices or complaints regarding its information practices or use of Data.  The consummation of the transactions contemplated hereby will not result in any loss or impairment of the rights to own and use any Data, nor will such consummation require the consent of any third party in respect of any Data.

Section 3.15     Compliance with Laws.  The Company is, and the Business (including the business conducted by IMS Holdco) has been conducted, in compliance with all applicable Laws and Orders, except in each case (other than with respect to compliance with environmental Laws and Orders relating to the regulation or protection of the environment ("Environmental Laws and Orders")) where the failure to so comply would not reasonably be expected to have a Material Adverse Effect (as defined below), including without limitation: (a) all Laws and Orders promulgated by the Federal Trade Commission or any other Governmental or Regulatory Authority; (b) all Environmental Laws and Orders; and (c) all Laws and Orders relating to labor, civil rights, and occupational safety and health laws, worker's compensation, employment and wages, hours and vacations, or pay equity. Neither IMS Holdco nor the Company has been charged with, or, to the knowledge of the Principals, threatened with or under any investigation with respect to, any charge concerning any violation of any Laws or Orders. The term "Material Adverse Effect" as it applies to IMS Holdco or the Company, shall mean a material adverse effect on its operations, business, prospects, assets or financial condition. The Company has all permits, licenses, and other government certificates, authorizations and approvals ("Required Permits") required by any Governmental or Regulatory Authority for the operation of the Business, except where the failure to have such Required Permits would not reasonably be expected to have a Material Adverse Effect.  All of the Required Permits are in full force and effect and no action or claim is pending, nor to the knowledge of the Principals, threatened, to revoke or terminate any such Required Permit or declare any such Required Permit invalid in any respect.

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Section 3.16     Client Relations.  Schedule 3.16 sets forth (a) the 20 largest clients of IMS Holdco (measured by revenues), and the revenues from each such client and from all clients (in the aggregate) for the calendar year ended December 31, 2009 and (b) the clients projected to be the 20 largest clients (measured by revenues) of the Company based on its current profit plan for the twelve months ending December 31, 2010, together with the estimated revenues from each such client and all clients (in the aggregate) for such period.  IMS Holdco and the Principals represent that the estimated revenues set forth on Schedule 3.16 were made in good faith and on a reasonable basis.  Except as set forth on Schedule 3.16, no client of IMS Holdco or the Company has advised IMS Holdco, the Company or any Principal in writing that it is (x) terminating or considering terminating the handling of its business by IMS Holdco or the Company or in respect of any particular product, project or service or (y) planning to reduce its future spending with IMS Holdco or the Company in any material manner; and no client has orally advised the Company, IMS Holdco or any Principal of any of the foregoing events.

Section 3.17     Accounts Receivable; Work-in-Process; Accounts Payable.  The amount of all work-in-process, accounts receivable, unbilled invoices (including without limitation unbilled invoices for services and out-of-pocket expenses) and other debts due or recorded in the records and books of account of IMS Holdco and which were transferred to the Company pursuant to the Conveyance Document, as being due to the Company and reflected on the Balance Sheet and the Closing Balance Sheet represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and will be good and collectible in full (less the amount of any provision, reserve or similar adjustment therefor reflected on the Balance Sheet and the Closing Balance Sheet) in the ordinary course of business, and none of the accounts receivable or other debts (or accounts receivable arising from any such work-in-process or unbilled invoices) is or will be subject to any counterclaim or set-off except to the extent of any such provision, reserve or adjustment.  The accounts payable set forth on the Balance Sheet, and the accounts payable incurred since the Balance Sheet Date through the Closing Date, represent trade payables resulting from bona fide transactions incurred in the ordinary course of business. There has been no change since the Balance Sheet Date in the amount or aging of the work-in-process, accounts receivable, unbilled invoices, or other debts due to the Company, or the reserves with respect thereto, or accounts payable of the Company which would have a Material Adverse Effect.

Section 3.18     Employment Relations.  (a) No unfair labor practice complaint against IMS Holdco or the Company is pending before any Governmental or Regulatory Authority; (b) there is no organized labor strike, dispute, slowdown or stoppage pending or to the knowledge of the Principals, threatened against or involving the Business; (c) there are no labor unions representing or, to the knowledge of the Principals, attempting to represent the employees of IMS Holdco who became employees of the Company; (d) no claim or grievance nor any arbitration proceeding arising out of or under any collective bargaining agreement is pending against any of the Company, IMS Holdco or the Principals and to the knowledge of the Principals, no such claim or grievance has been threatened; (e) no collective bargaining agreement is currently being negotiated by IMS Holdco or the Company; and (f) IMS Holdco did not experience any work stoppage or similar organized labor dispute during the last three years.  Except as set forth on Schedule 3.10, there is no legal action, suit, proceeding or claim pending or, to the knowledge of the Principals, threatened between the Company or IMS Holdco and any employees or former employees of the Company or IMS Holdco, agents or former agents of the Company or IMS Holdco, job applicants or any association or group of any employees of the Company or IMS Holdco, in each case prior to the transfer of the Business to the Company.

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Section 3.19     Employee Benefit Matters.

3.19.1      List of Plans.  Schedule 3.8 to this Agreement lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus, incentive, deferred compensation, stock option, restricted stock, stock appreciation rights, phantom stock rights, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, individual retirement programs or arrangements, and all termination, severance or other Contracts, whether covering one Person or more than one Person, and whether or not subject to any of the provisions of ERISA, which are or have been maintained, contributed to or sponsored by IMS Holdco or the Company or any ERISA Affiliate (as defined in Section 3.19.3) for the benefit of any employee of IMS Holdco or the Company (each item listed on Schedule 3.8 being referred to herein individually, as a "Plan" and collectively, as the "Plans").  For purposes of this Agreement, "foreign benefit plan" means each material plan, program or agreement contributed to, sponsored or maintained by either IMS Holdco, the Company or any ERISA Affiliate that is maintained outside of the United States, or that covers primarily employees residing or working outside of the United States, and which would be treated as a Plan had it been a material United States plan, program or agreement.  IMS Holdco has delivered to the Purchaser, to the extent applicable, a complete and accurate copy of: (a) each written Plan and descriptions of any unwritten Plan (including all amendments thereto whether or not such amendments are currently effective); (b) each summary plan description and all summaries of subsequent material modifications relating to a Plan; (c) each current trust agreement or other funding arrangement with respect to each Plan, including insurance contracts; (d) the most recently filed IRS Form 5500 relating to each Plan, if any; (e) the most recently received IRS opinion, advisory or determination letter for each Plan, if any; and (f) the three most recently prepared actuarial reports (if applicable) and financial statements, if any, in connection with each Plan.  None of the Principals, IMS Holdco or the Company has made any commitment, (i) to create or cause to exist any Plan not set forth on Schedule 3.8 or (ii) to modify, change or terminate any Plan.

3.19.2      Severance.  None of the Plans, nor, except as set forth on Schedule 3.19.2, any employment agreement or other Contract to which IMS Holdco or the Company is a party or bound, (a) provides for the payment of or obligates IMS Holdco or the Company to pay separation, severance, termination or similar-type benefits to any Person; or (b) obligates IMS Holdco or the Company to pay separation, severance, termination or similar-type benefits as a result of any transaction contemplated by this Agreement or as a result of a "change in control," within the meaning of such term under Section 280G of the Code, either alone or in conjunction with any subsequent occurrence.

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3.19.3      Multi-Employer Plans.  None of IMS Holdco, the Company or any ERISA Affiliate has maintained, contributed to or participated within the preceding three years in a multi-employer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) or a multiple employer plan subject to Sections 4063 and 4064 of ERISA, nor has any obligations or liabilities, including withdrawal, reorganization or successor liabilities, regarding any such plan. As used herein, the term "ERISA Affiliate" means any Person that is or has been a member of a controlled group of organizations (within the meaning of Sections 414(b), (c), (m) or (o) of the Code) of which IMS Holdco or the Company is a member.

3.19.4      Welfare Benefit Plans.  Each of IMS Holdco and the Company has expressly reserved the right, in all Plan documents relating to welfare benefits provided to employees, former employees, officers, directors and other participants and beneficiaries, to amend, modify or terminate at any time the Plans which provide for welfare benefits, and neither IMS Holdco nor any Principal is aware of any fact, event or condition that could reasonably be expected to restrict or impair such right. Except as required under Section 601 of ERISA, none of IMS Holdco, the Company or any ERISA Affiliate has made any promises or commitments to provide, and is not obligated to provide (i) medical benefits (including without limitation through insurance) to retirees or former employees of IMS Holdco, the Company or any ERISA Affiliate or their respective dependants, or (ii) life insurance or other death benefits to retired employees or former employees of IMS Holdco, the Company or any ERISA Affiliate or their respective dependants.

3.19.5      Administrative Compliance.  Each Plan is now and has been operated in all material respects in accordance with the requirements of its terms and with all applicable Laws, including, without limitation, ERISA, the Health Insurance Portability and Accountability Act of 1996 (as amended by the Health Information Technology for Economic and Clinical Health Act) and the Code, including, without limitation, all nondiscrimination and minimum coverage requirements of Sections 401(a) and 410(b) thereof, the Age Discrimination in Employment Act, Family and Medical Leave Act, the Americans with Disabilities Act, the Equal Pay Act, Title VII of the Civil Rights Act of 1964, and the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, and the regulations and authorities published thereunder.  Each of IMS Holdco and the Company has performed all obligations required to be performed by it under, is not in any respect in default under or in violation of, and the Principals have no knowledge of any default or violation by any Person under, any Plan.  Except as set forth on Schedule 3.9, no legal action, suit, audit, investigation or claim is pending or threatened with respect to any Plan (other than claims for benefits in the ordinary course), and no fact, event or condition exists that would be reasonably likely to provide a legal basis for any such action, suit, audit, investigation or claim.  All reports, disclosures, notices and filings with respect to such Plans required to be made to employees, participants, beneficiaries, alternate payees and any Governmental or Regulatory Authority have been timely made or an extension has been timely obtained. With respect to any insurance policy providing funding for benefits or an investment alternative under any Plan, (i) no liability or loss shall be incurred by the Company or any such Plan in the nature of a retroactive rate adjustment, loss sharing arrangement or other liability or loss, and (ii) no insurance company issuing any such policy is in receivership, conservatorship, liquidation or similar proceeding and, to the knowledge of the Principals, no such proceedings with respect to any insurer are imminent.

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3.19.6      Tax-Qualification.  Each Plan which is intended to be qualified under Sections 401(a) or 408(k) of the Code is qualified under Sections 401(a) and 408(k) of the Code (and, if applicable, complies with the requirements of Section 401(k) of the Code), and has received a favorable opinion, advisory or determination letter from the IRS that it is so qualified or is covered by a determination letter issued for master or prototype plans.  Each trust established in connection with any Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code is exempt under Section 501(a) of the Code; and no fact or event has occurred or condition exists since the date of such opinion, advisory or determination letter from the IRS which would be reasonably likely to adversely affect the qualified status of any such Plan or the exempt status of any such trust. Each Plan that is a foreign benefit plan which is intended to be qualified with the appropriate Governmental or Regulatory Authority in the relevant country has received a favorable determination that it is so qualified, and each trust established in connection with such foreign benefit plan that is intended to be exempt from taxation has received a favorable determination that it is so exempt.

3.19.7      Funding; Excise Taxes.  There has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan subject to ERISA.  None of IMS Holdco, the Company or any ERISA Affiliate has incurred any liability for any excise tax arising under Sections 4971, 4972, 4973, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980, 4980B, 4980D or 4980E of the Code or any civil penalty arising under Sections 409, 502(i) or 502(l) of ERISA, and no fact, event or condition exists which could give rise to any such liability.  None of IMS Holdco, the Company or any ERISA Affiliate has incurred any liability under, arising out of or by operation of Section 302(c)(11) or Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation ("PBGC") arising in the ordinary course), including, without limitation, any liability in connection with the termination of any employee benefit plan subject to Title IV of ERISA (a "Title IV Plan"); and, no fact, event or condition exists which could give rise to any such liability.  No complete or partial termination has occurred within the five years preceding the Closing Date with respect to any Plan maintained by IMS Holdco, the Company or any ERISA Affiliate, and no reportable event (within the meaning of Section 4043 of ERISA), notice of which has not been waived by the PBGC, has occurred or is expected to occur with respect to any Plan maintained by IMS Holdco, the Company or any ERISA Affiliate. The transactions contemplated by this Agreement and the Conveyance Document will not result in liability to IMS Holdco, the Company or the Purchaser under Section 4069 of ERISA.  No Title IV Plan or Plan subject to Section 302 of ERISA maintained by IMS Holdco, the Company or any ERISA Affiliate had an accumulated funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of the most recently ended plan year of such Plan.  None of the assets of IMS Holdco, the Company or any ERISA Affiliate is the subject of any Lien arising under Section 302(f) of ERISA or Section 412(n) of the Code; none of IMS Holdco, the Company or any ERISA Affiliate has been required to post any security under Section 307 of ERISA or Section 401(a) (29) of the Code relating to any Plan; and no fact or event exists which could give rise to any such Lien or requirement to post any such security.  As of the Closing Date, no Plan which is a Title IV Plan will have an "unfunded benefit liability" (within the meaning of Section 4001(a)(18) of ERISA) and no Plan which is subject to Section 302 of ERISA will have in "accumulated funding deficiency" (within the meaning of Section 302(a)(2) of ERISA).

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3.19.8      Tax Deductions.  All contributions, premiums or payments (including all employer contributions and, if applicable, employee salary reduction contributions) required to be made, paid or accrued with respect to any Plan have been made, paid or accrued on or before their due dates, including extensions thereof.  All such contributions have been fully deducted (to the extent deductible by the Company) or in the case of the current year will be deducted (to the extent deductible by the Company) for income tax purposes and no such deduction has been challenged or disallowed by any Governmental or Regulatory Authority, and no fact or event exists which could give rise to any such challenge or disallowance.

3.19.9      409A.  With respect to each Plan (and any other arrangement involving the Company) that is a nonqualified deferred compensation plan, within the meaning of Section 409A of the Code (a "409A Plan"), no event has occurred and no condition exists, that could subject anyone, including any Person, to any tax, fine, penalty or other liability under Section 409A of the Code ("409A Liability").   None of the transactions contemplated by this Agreement could, directly or indirectly, subject anyone or any Person to any 409A Liability.  Each 409A Plan is and has been operated and administered in good faith compliance with 409A of the Code, Treasury Notice 2005-1, the Final Treasury Reg. Sections 1.409A-1 through 1.409A-6, and any subsequent guidance issued thereunder.

Section 3.20     Interests in Customers, Suppliers, Etc.  Except as set forth on Schedule 3.20, neither the Principals nor to the knowledge of the Principals (without making any inquiry of any member of the Related Group, as hereinafter defined), any officer, director, or employee of IMS Holdco or the Company immediately prior to the Closing Date, any parent, brother, sister, child or spouse of any such officer, director, key executive or employee of the Company, IMS Holdco or the Principals (collectively, the "Related Group"), or any Person controlled by anyone in the Related Group:

(i)     owns, directly or indirectly, any interest in (excepting for ownership, directly or indirectly, of less than 1/4 of 1% of the issued and outstanding shares of any class of securities of a publicly held and traded company), or received or has any right to receive payments from, or is an officer, director, employee, agent or consultant of, any Person which is, or is engaged in business as, a competitor, lessor, lessee, supplier, distributor, sales agent, customer or client of IMS Holdco or the Company;

(ii)    owns, directly or indirectly (other than through the ownership of Membership Units), in whole or in part, any tangible or intangible property (including, but not limited to Intellectual Property), that the Company used in the conduct of the Business, other than immaterial personal items owned and used by employees at their work stations; or

(iii)   has any cause of action or other claim whatsoever against, or owes any amount to, IMS Holdco or the Company, except for claims in the ordinary course of business such as for accrued vacation pay, accrued benefits under employee benefit plans, and similar matters and agreements existing as of the Closing Date.

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Section 3.21     Bank Accounts and Powers of Attorney.  Set forth in Schedule 3.21 is an accurate and complete list showing (a) the name and address of, and account information for, each bank in which IMS Holdco had immediately prior to the transfer of the Business to the Company, or the Company has, an account, credit line or safe deposit box and the names of all Persons authorized to draw thereon or to have access thereto, and (b) the names of all Persons, if any, holding powers of attorney from IMS Holdco or the Company and a summary statement of the terms thereof.

Section 3.22     Compensation of Employees.

(a)           Schedule 3.22 is an accurate and complete list showing: (a) the names and positions of all employees and exclusive consultants of the Company, or IMS Holdco immediately prior to the transfer of the Business by IMS Holdco to the Company, who are, or were being, compensated at an annualized rate of $50,000 or more, together with a statement of the current annual salary, and the annual salary, bonus and incentive compensation paid or payable with respect to calendar years 2008 and 2009, and a statement of the projected annual salary, bonus and incentive compensation payable with respect to the calendar year ended December 31, 2010, and the material fringe benefits of such employees and exclusive consultants not generally available to all employees of IMS Holdco or the Company; (b) all bonus and incentive compensation paid or payable (whether by agreement, custom or understanding) to any employee of IMS Holdco or the Company not listed in clause (a) above for services rendered or to be rendered during calendar years 2008 and 2009; (c) the names of all retired employees, if any, of IMS Holdco or the Company who are receiving or entitled to receive any healthcare or life insurance benefits or any payments from IMS Holdco or the Company not covered by any pension plan to which IMS Holdco or the Company is a party, their ages and current unfunded pension rate, if any; and (d) a description of the current severance and vacation policy of IMS Holdco and the Company.  Neither IMS Holdco nor the Company has, because of past practices or previous commitments with respect to its employees, established any rights on the part of any of its employees to additional compensation with respect to any period after the Effective Date (other than wage increases in the ordinary course of business).  Each of IMS Holdco and the Company has properly classified and compensated all employees and consultants in accordance with all applicable Laws and Orders of any Governmental and Regulatory Authority.

(b)           Except as set forth on Schedule 3.3, the Principals have not agreed or made any written or verbal commitment to give any employee of IMS Holdco or the Company (or any family member or any affiliate of the employee of IMS Holdco or the Company) any portion or share of the Purchase Price in the form of a bonus, gift, award, or any similar type of remuneration.  The Principals agree that, from and after the Effective Date, no portion or proceeds of the Purchase Price shall be used to compensate or give to any employee of IMS Holdco or the Company (or any family member of any employee of IMS Holdco or the Company) a bonus, gift, award, or any similar type of remuneration.

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Section 3.23     No Changes Since the Balance Sheet Date.  From the Balance Sheet Date through the Closing Date, except as specifically stated on Schedule 3.23, neither IMS Holdco nor the Company (i) incurred any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except in the ordinary course of business, (ii) permitted any of its assets to be subjected to any Lien, (iii) sold, transferred or otherwise disposed of any assets except in the ordinary course of business, (iv) made any capital expenditure or commitment therefor which individually or in the aggregate exceeded $25,000; (v) made any distributions or dividend payments on any shares of its capital stock or equity participation rights, or redeemed, purchased or otherwise acquired any units of Membership Interest, or any option, warrant or other right to purchase or acquire any units of Membership Interest or equity participation rights of IMS Holdco or the Company, (vi) made any bonus or profit sharing distribution, (vii) increased or prepaid its indebtedness for borrowed money, except current borrowings under credit lines listed on Schedule 3.8, or made any loan to any Person other than to any employee for normal travel and expense advances, (viii) wrote down the value of any work-in-process, or wrote off as uncollectible any notes or accounts receivable, except write-downs and write-offs in the ordinary course of business, none of which individually or in the aggregate, were material to IMS Holdco or the Company, (ix) granted any increase in the rate of wages, salaries, bonuses or other remuneration of any employee who, whether as a result of such increase or prior thereto, received aggregate compensation from IMS Holdco or the Company at an annual rate of $100,000 or more, or except in the ordinary course of business to any other employees, (x) entered into any employment or exclusive consulting agreement which is not cancelable by IMS Holdco or the Company (and will not be cancelable by the Company) without penalty or other financial obligation within 30 days, (xi) canceled or waived any claims or rights of material value, (xii) made any change in any method of accounting procedures, (xiii) otherwise conducted IMS Holdco's business or the Business or entered into any transaction, except in the usual and ordinary manner and in the ordinary course of its business, (xiv) amended or terminated any agreement which is material to their businesses, (xv) renewed, extended or modified any lease of real property or any lease of personal property, except in the ordinary course of business, or (xvi) agreed, whether or not in writing, to do any of the actions set forth in any of the above clauses.

Section 3.24     Corporate Controls.  To the knowledge of the Principals, no officer, authorized agent, employee, consultant or any other Person while acting on behalf of IMS Holdco or the Company, has, directly or indirectly: used any corporate fund for unlawful contributions, gifts, or other unlawful expenses relating to political activity; made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false or fictitious entry on its books or records; participated in any racketeering activity; or made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment, or other payment of a similar or comparable nature, to any Person, private or public, regardless of form, whether in money, property, or services, to obtain favorable treatment in securing business or to obtain special concessions, or to pay for favorable treatment for business secured or for special concessions already obtained, and neither IMS Holdco nor the Company have participated in any illegal boycott or other similar illegal practices affecting any of its actual or potential customers.

Section 3.25     Brokers.  Except as set forth on Schedule 3.25, no broker, finder, agent or similar intermediary has acted on behalf of the Principals, IMS Holdco or the Company in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees, consulting fees or similar fees or commissions are payable by IMS Holdco, the Company or the Principals in connection therewith based on any agreement, arrangement or understanding with any of them.

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Section 3.26     Repayment of Loans.  All (i) intercompany indebtedness and (ii) indebtedness of the Principals to IMS Holdco or the Company has been repaid in full, other than routine travel expense advances in the ordinary course of business and consistent in amount with past practice.

Section 3.27     Copies of Documents.  The Principals have caused to be made available for inspection and copying by the Purchaser and its advisers, true, complete and correct copies of all documents referred to in this Article III or in any Schedule.  Summaries of all oral contracts contained on Schedule 3.8 are complete and accurate in all material respects.

ARTICLE IV

REPRESENTATIONS OF THE PURCHASER

The Purchaser represents, warrants and agrees to and with IMS Holdco and the Principals as follows:

Section 4.1       Existence and Good Standing.  The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with full corporate power and authority to own its property and to carry on its business all as and in the places where such properties are now owned or operated or such business is now being conducted.

Section 4.2       Execution and Validity of Agreement.  The Purchaser has the full corporate power and authority to make, execute, deliver and perform this Agreement and the transactions contemplated hereby.  The execution and delivery of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby have been duly authorized by all required corporate action on behalf of the Purchaser.  This Agreement has been duly and validly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by IMS Holdco and the Principals, constitutes the legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms.

Section 4.3       Litigation.  There is no action, suit, proceeding at law or in equity by any Person, or any arbitration or any administrative or other proceeding by or before (or to the knowledge of the Purchaser, any investigation by), any Governmental or Regulatory Authority pending or, to the knowledge of the Purchaser, threatened against the Purchaser or any of their respective properties or rights with respect to this Agreement.  The Purchaser is not subject to any Order entered in any lawsuit or proceeding with respect to this Agreement or the transactions contemplated hereby.

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Section 4.4       Non-Contravention; Approvals and Consents.  The execution, delivery and performance by the Purchaser of its obligations hereunder and the consummation of the transactions contemplated hereby will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation and bylaws of the Purchaser, (b) result in the violation by the Purchaser of any Laws or Orders of any Governmental or Regulatory Authority applicable to the Purchaser or any of its assets or properties, or (c) result in a violation or breach of, constitute (with or without notice or lapse of time or both) a default under, or require the Purchaser to obtain any consent, approval or action of, make any filing with or give any notice to, or result in or give to any Person any right of payment or reimbursement, termination, cancellation, modification or acceleration of, or, except for such Liens as may be created in connection with an MDC Financing (as defined in Section 6.1 hereof), result in the creation or imposition of any Lien upon any of the respective assets or properties of the Purchaser, under any of the terms, conditions or provisions of any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound. No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other Person is necessary or required under any of the terms, conditions or provisions of any Law or Order of any Governmental or Regulatory Authority or any Contract to which the Purchaser is a party or by which the Purchaser or any of its assets or properties are bound for the execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder or the consummation by the Purchaser of the transactions contemplated hereby

Section 4.5       Brokers.  No broker, finder, agent or similar intermediary has acted on behalf of the Purchaser in connection with this Agreement or the transactions contemplated hereby, and no brokerage commissions, finder's fees or similar fees or commissions are payable by the Purchaser in connection therewith based on any agreement, arrangement or understanding with either of them.

ARTICLE V

ACTIONS AT CLOSING

Simultaneously herewith:

Section 5.1       Certified Resolutions.  Each of IMS Holdco and the Company shall have delivered to the Purchaser a copy of the resolutions of its Members and Board of Managers, respectively, authorizing the execution, delivery and performance of this Agreement, the Operating Agreement and the Conveyance Document and the transactions contemplated hereby and thereby, as applicable, certified by one of its officers.

Section 5.2       Required Approvals and Consents.  The Company and the Principals shall have obtained or given, at no expense to the Purchaser or MDC Partners, and there shall not have been withdrawn or modified, any consents or approvals or other actions listed on Schedule 3.9 hereof (including without limitation, obtaining all such consents, approvals and/or waivers required under the Contracts listed on Schedule 3.8).  Each such consent or approval shall be in form reasonably satisfactory to counsel for the Purchaser.

Section 5.3       Operating Agreement.  The Company and IMS Holdco shall have entered into the Operating Agreement, together with the Purchaser.

Section 5.4       Employment Agreements. The Principals shall have entered into Employment Agreements with the Company substantially in the form and to the effect of Exhibit C hereto.

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Section 5.5       Non-Competition/Non-Solicitation/Non-Servicing Agreements.  The Principals and Dawn Du Mont shall have entered into Non-Competition/Non-Solicitation/Non-Servicing Agreements with the Purchaser and the Company in the form and to the effect of Exhibits D-1 and D-2 hereto.

Section 5.6       Conveyance Document.IMS Holdco and the Company shall have entered into the Conveyance Document.

Section 5.7      Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement, the Conveyance Document and all documents incident thereto must be reasonably satisfactory in form and substance to the Purchaser and its counsel, and the Purchaser shall have received copies of all such documents and other evidences as it or its counsel reasonably requested in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

ARTICLE VI

OTHER AGREEMENTS

Section 6.1       Management of the Company.

6.1.1        MDC Financing.  Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the Purchase Price under Section 2.1 hereof and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC Partners and/or one or more of its affiliates, in connection with its or any of its affiliates' current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon the Purchaser's Membership Units; (x) pledge or grant a security interest in or to otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under the Call and/or Sale Request (as such terms are defined in the Operating Agreement) to or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders from time to time (as applicable and collectively, the "Lender"); and (z) have the Company provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Units which have been pledged or assigned to it.

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6.1.2        Effect of Events During Period Membership Units Are Outstanding.  The parties hereto understand and agree that under the terms of the Employment Agreements referred to in Section 5.4, the Principals may be terminated for "cause" or "without cause" (as such terms are defined in such Employment Agreements).  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect IMS Holdco's right to receive the Purchase Price under this Agreement.  Each of the parties hereto agrees that if (a) a Principal ceases to be an employee of the Company during the period commencing as of Effective Date through the end of the last year included in the Measuring Period (as defined in the Operating Agreement) with respect to the exercise of a Call or Sale Request resulting in IMS Holdco no longer owing any Class B Units, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any of its subsidiaries, if any, no party to this Agreement or any Person claiming a right through such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary, if any (x) constitutes a breach by the Purchaser or any of its affiliates of this Agreement, (y) resulted in an adverse effect on the Purchase Price hereunder forming the basis for a claim against the Purchaser or any of its affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 2.1.3 hereof.

Section 6.2       Tax Matters.

6.2.1        Allocation.  The Principals, IMS Holdco and the Purchaser agree (i) to report for federal, state and local income tax purposes, the transactions contemplated by this Agreement in accordance with Situation 1 of Revenue Ruling 99-5, 1999-1 C.B. 434, and (ii) shall not take, or permit any of its Affiliates to take, a position inconsistent with such treatment unless otherwise required by Law.  The Purchaser shall prepare an allocation of the Purchase Price (and of other capitalized costs) among the assets of the Company.  The Company, the Purchaser, each member of the Company and the Principals shall report, act and file all Tax returns (including, but not limited to, Internal Revenue Service form 8594) in all respects and for all purposes consistent with such allocation prepared by the Purchaser and agreed to by IMS Holdco.  IMS Holdco and/or the Principals shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as the Purchaser may reasonably request to prepare such allocation.  None of the Company, any member of the Company, or the Principals shall take any position (whether in audits, tax returns, or otherwise) that is inconsistent with such allocation unless required to do so by applicable law.

6.2.2        Tax Returns.  The parties hereto acknowledge and agree that the Company shall prepare or cause to be prepared and file or cause to be filed all Tax returns for the Company except as otherwise specifically provided herein or in the Operating Agreement.  The Company shall permit the Purchaser to review and comment on each such Tax return described in the preceding sentence prior to filing.

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6.2.3        Tax Cooperation.  The Purchaser, IMS Holdco and the Principals shall cooperate fully, and each shall cause the Company to cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax returns pursuant to Section 6.2.2 or any other Tax returns relating to the operations of IMS Holdco or the Company, and any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include IMS Holdco's retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  The Purchaser, the Principals and IMS Holdco agree to, and each agree to cause the Company to, (A) retain all books and records with respect to Tax matters pertinent to IMS Holdco and Company relating to any taxable period beginning before the Effective Date until the expiration of the statute of limitations (and, to the extent notified by the Purchaser, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, IMS Holdco or the Purchaser, as the case may be, shall allow the other party to take possession of such books and records.

6.2.4        Tax Liability.  To the extent that any of the transactions contemplated by the Conveyance Document give rise to sales and/or use tax liability or other transfer, purchase, stamp or recordation documentary tax and fees (collectively, "Sales Taxes"), the Purchaser shall promptly pay such Sales Taxes to the appropriate tax authorities.  IMS Holdco shall cause the Company to deliver to the Purchaser completed returns in respect of any Sales Taxes required to be filed with respect to the transactions contemplated herein (regardless of whether such returns are informational or show liability for Sales Taxes) for filing with the appropriate taxing authority.  The Purchaser and IMS Holdco hereby waive compliance with the bulk sales laws of any applicable jurisdiction, and IMS Holdco and the Principals hereby agree to indemnify and hold harmless the Purchaser and its Affiliates from and against any claims arising out of or due to the failure to comply with such bulk sales laws.

Section 6.3       Equity Securities of IMS Holdco.

(a)           As long as IMS Holdco beneficially owns any equity interests in the Company, no Principal shall sell or in any other way transfer, assign, distribute, pledge, encumber or otherwise dispose of (a "Transfer") any IMS Holdco Interests (as defined below) without the prior written consent of the Purchaser, except with respect to a Transfer of IMS Holdco Interests pursuant to Section 10.2(c) of the Operating Agreement; provided, however, in the event a Principal desires to Transfer, for estate planning purposes, IMS Holdco Interests to a Family Member (as hereinafter defined) of such Principal, the prior written consent of the Purchaser shall not be unreasonably delayed or withheld.  As used herein, the term "Family Member" of any Principal shall mean (i) the spouse and lineal descendants of such Principal, (ii) the spouses of any such descendants, (ii) the legal representatives of any Person that falls within clause (i) or (ii) hereof, and (iii) the trustee of any trust of which any of the Persons falling with clause (i) or (ii) shall be the only beneficiaries entitled to the income or principal.

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(b)           From and after the Closing, IMS Holdco covenants and agrees that it shall not, directly or indirectly (i) authorize, create, issue, amend or modify any equity interests (whether common or preferred), subscriptions, options, warrants, rights (including "phantom equity rights"), calls, commitments, understandings, conversion rights, rights of exchange, plans or other agreements of any kind, providing for the purchase, issuance or sale of any membership interests, profits interests, capital interests or equity interests of any kind in IMS Holdco (the "IMS Holdco Interests"); or (ii) provide compensation to any employee of the Company or any subsidiary, if any, except to the extent such employee was entitled or eligible to receive such compensation at the time of, and as a result of, the Closing.  IMS Holdco further covenants and agrees that it shall not, directly or indirectly modify or amend IMS Holdco's Second Amended and Restated Operating Agreement (as amended through the Effective Date) dated February 2007, a copy of which is attached hereto as Exhibit E (the "IMS Holdco Operating Agreement").  Notwithstanding anything contained in this Section 6.3(b) to the contrary, the Principals shall be entitled to amend the IMS Holdco Operating Agreement and such amendment shall not be deemed to be in violation of this Section 6.3(b), so long as such amendment only results in a modification with respect to the IMS Holdco Interests owned by the Principals, and does not result in the issuance of any IMS Holdco Interests to any Person other than the Principals.

Section 6.4       Change of Name; Post-Closing Dissolutions.  At the Closing or a soon as practicable after the Closing Date, IMS Holdco shall execute appropriate documents to change its name to a name dissimilar to "Integrated MediaSolutions", and promptly thereafter shall file any necessary documents to reflect the name change with the New York Secretary of State and the appropriate authorities in the other states in which it is qualified to do business.  As soon as practicable after the Closing Date, IMS Holdco shall execute appropriate documents to dissolve each of the Retained Subsidiaries, and promptly thereafter shall file any necessary documents to reflect such dissolutions with the New York Secretary of State and the appropriate authorities in the other states in which the Retained Subsidiaries are qualified to do business.

ARTICLE VII

SURVIVAL; INDEMNITY

Section 7.1       Survival.   Notwithstanding any right of any party hereto fully to investigate the affairs of any other party, and notwithstanding any knowledge of facts determined or determinable pursuant to such investigation or right of investigation, each party hereto shall have the right to rely fully upon the representations, warranties, covenants and agreements of the other parties contained in this Agreement and the Schedules, if any, furnished by any other party pursuant to this Agreement, or in any certificate or document delivered at the Closing by any other party.  Subject to the limitations set forth in Section 7.6, the respective representations, warranties, covenants and agreements of IMS Holdco, the Principals and the Purchaser contained in this Agreement shall survive the Closing.

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Section 7.2       Obligation of IMS Holdco and the Principals to Indemnify.

7.2.1        General Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, IMS Holdco and the Principals hereby agree, jointly and severally, to indemnify the Purchaser and its affiliates, stockholders, officers, directors, employees, agents, representatives and successors, permitted assignees of the Purchaser and their affiliates (individually, a "Purchaser Indemnified Party" and collectively, the "Purchaser Indemnified Parties") against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to pay on behalf of or reimburse the Purchaser Indemnified Parties as and when incurred for, any and all liabilities (including liabilities for Taxes), obligations, losses, damages, penalties, demands, claims, actions, suits, judgments, settlements, penalties, interest, out-of-pocket costs, expenses and disbursements (including reasonable costs of investigation, and reasonable attorneys', accountants' and expert witnesses' fees) of whatever kind and nature (collectively, "Losses"), that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation contained in Article III.B hereof or in any certificate delivered by IMS Holdco or the Principals at the Closing or otherwise in connection herewith; (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of IMS Holdco and the Principals contained in Article III.B hereof or in any certificate delivered by IMS Holdco and the Principals at the Closing or otherwise in connection herewith; (c) any breach or failure by IMS Holdco or any Principal to comply with, perform or discharge any obligation, agreement or covenant by IMS Holdco and the Principals contained in this Agreement; (d) any liability or obligation or any assertion against any Purchaser Indemnified Party, arising out of or relating, directly or indirectly, to any Excluded Asset or any Retained Liability (as such terms are defined in the Conveyance Document) or other liability arising, in whole or in part, out of the conduct of the business of IMS Holdco, the Company or any of its subsidiaries, if any, prior to the Closing except for the Assumed Liabilities (as such term is defined in the Conveyance Document); (e) any litigation or claim disclosed on Schedule 3.10 to this Agreement; (f) any liability or obligation arising out of or relating, directly or indirectly, to the classification of any individual performing services for IMS Holdco (i) as an independent contractor, (ii) as a freelancer, (iii) as a consultant or (iv) in any other capacity other than as an employee; (g) any liability or obligation arising out of or relating, directly or indirectly, to any violation by IMS Holdco, on or prior to the Closing, of the Fair Labor Standards Act or any similar state or local wage and hour Law, Order, ordinance or regulation; and (h) any liability or obligation in connection with that certain Consulting Agreement by and among the Principals, Dawn Du Mont and IMS Holdco dated March 23, 2009.

7.2.2        Special Indemnity.  Subject to the limitations contained in Sections 7.6.1 and 7.6.2, each of the Principals hereby severally agrees to indemnify the Purchaser Indemnified Parties against, and to protect, save and keep harmless the Purchaser Indemnified Parties from, and to assume liability for, the payment of all Losses that may be imposed on or incurred by any Purchaser Indemnified Party as a consequence of or in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of a representation or warranty by such Principal contained in Article III.A hereof; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting the Purchaser Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of such Principal contained in Article III.A hereof or in any certificate delivered by such Principal at the Closing or otherwise in connection herewith.  Any claim for indemnity made under this Section 7.2.2 shall not be construed as a claim under Section 7.2.1 hereof even if the Purchaser Indemnified Party could have made a claim under Section 7.2.1 hereof in respect of the same matters.

7.2.3        "Losses".  The term "Losses" as used in this Article VII is not limited to matters asserted by third parties against any Purchaser Indemnified Party but includes Losses incurred or sustained by a Purchaser Indemnified Party in the absence of Third Party Claims (as defined in Section 7.4.2 hereof).

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Section 7.3       Obligation of the Purchaser to Indemnify.   Subject to the limitations set forth in Section 7.6.3 hereof, the Purchaser hereby agrees to indemnify IMS Holdco and the Principals (individually an "IMS Holdco Indemnified Party" and collectively, the "IMS Holdco Indemnified Parties")against, and to protect, save and keep harmless the IMS Holdco Indemnified Parties from, and to pay on behalf of or reimburse the IMS Holdco Indemnified Parties as and when incurred for, any and all Losses that may be imposed on or incurred by the IMS Holdco Indemnified Parties as a consequence of, in connection with, incident to, resulting from or arising out of or in any way related to or by virtue of: (a) any misrepresentation, inaccuracy or breach of any warranty or representation of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (b) any action, demand, proceeding, investigation or claim by any third party (including any Governmental or Regulatory Authority) against or affecting any IMS Holdco Indemnified Party which may give rise to or evidence the existence of or relate to a misrepresentation or breach of any of the representations and warranties of the Purchaser contained in Article IV hereof or in any certificate delivered by the Purchaser at the Closing; or (c) any breach or failure by the Purchaser to comply with, perform or discharge any obligation, agreement or covenant by the Purchaser contained in this Agreement.

Section 7.4       Indemnification Procedures.

7.4.1        Non-Third Party Claims.

(a)           In the event that any Person entitled to indemnification under this Agreement (an "Indemnified Party") asserts a claim for indemnification which does not involve a Third Party Claim (as defined in Section 7.4.2) (a "Non-Third Party Claim"), against which a Person is required to provide indemnification under this Agreement (an "Indemnifying Party"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Non-Third Party Claim Notice"), which Non-Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party.

(b)           The Indemnifying Party may acknowledge and agree by written notice (the "Non-Third Party Acknowledgement of Liability") to the Indemnified Party to satisfy the Non-Third Party Claim within 30 days of receipt of the Non-Third Party Claim Notice.  In the event that the Indemnifying Party disputes the Non-Third Party Claim, the Indemnifying Party shall provide written notice of such dispute (the "Non-Third Party Dispute Notice") to the Indemnified Party within 30 days of receipt of the Non-Third Party Claim Notice (the "Non-Third Party Dispute Period"), setting forth a reasonable basis of such dispute.  In the event that the Indemnifying Party shall fail to deliver the Non-Third Party Acknowledgement of Liability or Non-Third Party Dispute Notice within the Non-Third Party Dispute Period, the Indemnifying Party shall be deemed to have acknowledged and agreed to pay the Non-Third Party Claim in full and to have waived any right to dispute the Non-Third Party Claim.  Once the Indemnifying Party has acknowledged and agreed to pay any Non-Third Party Claim pursuant to this Section 7.4.1, or once any dispute under this Section 7.4.1 has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction, subject to the provisions of Section 7.6.1, the Indemnifying Party shall pay the amount of such Non-Third Party Claim to the Indemnified Party within 10 days of the date of acknowledgement or resolution, as the case may be, to such account and in such manner as is designated in writing by the Indemnified Party.

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7.4.2        Third-Party Claims.

(a)           In the event that any Indemnified Party asserts a claim for indemnification or receives notice of the assertion of any claim or of the commencement of any action or proceeding by any Person who is not a party to this Agreement or an affiliate of a party to this Agreement in respect of which such Indemnified Party is entitled to indemnification by an Indemnifying Party under this Agreement (a "Third Party Claim"), the Indemnified Party shall give written notice to the Indemnifying Party (the "Third Party Claims Notice") within 20 days after asserting or learning of such Third Party Claim (or within such shorter time as may be necessary to give the Indemnifying Party a reasonable opportunity to respond to such claim), together with a statement specifying the basis of such Third Party Claim.  The Third Party Claim Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party. The Indemnifying Party must provide written notice to the Indemnified Party that it is either (i) assuming responsibility for the Third Party Claim or (ii) disputing the claim for indemnification against it (the "Indemnification Notice").  The Indemnification Notice must be provided by the Indemnifying Party to the Indemnified Party within 15 days after receipt of the Third Party Claims Notice or within such shorter time as may be necessary to give the Indemnified Party a reasonable opportunity to respond to such Third Party Claim (the "Indemnification Notice Period").

(b)           If the Indemnifying Party provides an Indemnification Notice to the Indemnified Party within the Indemnification Notice Period that it assumes responsibility for the Third Party Claim (the "Defense Notice"), the Indemnifying Party shall conduct at its expense the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party.  The Defense Notice shall specify the counsel the Indemnifying Party will appoint to defend such claim ("Defense Counsel"); provided, however, that the Indemnified Party shall have the right to approve the Defense Counsel, which approval shall not be unreasonably withheld or delayed.  In the event that the Indemnifying Party fails to give the Indemnification Notice within the Indemnification Notice Period, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim without the prior consent of the Indemnifying Party and subject to the provisions of Section 7.6.1, the Indemnifying Party will be liable for all costs, expenses, settlement amounts or other Losses paid or incurred in connection therewith.

(c)           In the event that the Indemnifying Party provides in the Indemnification Notice that it disputes the claim for indemnification against it, the Indemnified Party shall have the right to conduct the defense and to compromise and settle such Third Party Claim, without the prior consent of the Indemnifying Party. Once such dispute has been finally resolved in favor of indemnification by a court or other tribunal of competent jurisdiction or by mutual agreement of the Indemnified Party and Indemnifying Party, subject to the provisions of Section 7.6.1, the Indemnifying Party shall within 10 days of the date of such resolution or agreement, pay to the Indemnified Party all Losses paid or incurred by the Indemnified Party in connection therewith.

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(d)           In the event that the Indemnifying Party delivers an Indemnification Notice pursuant to which it elects to conduct the defense of the Third Party Claim, the Indemnifying Party shall be entitled to have the exclusive control over the defense of the Third Party Claim and the Indemnified Party will cooperate in good faith with and make available to the Indemnifying Party such assistance and materials as it may reasonably request, all at the expense of the Indemnifying Party.  The Indemnified Party shall have the right at its expense to participate in the defense assisted by counsel of its own choosing.  The Indemnifying Party will not settle the Third Party Claim or cease to defend against any Third Party Claim as to which it has delivered an Indemnification Notice (as to which it has assumed responsibility for the Third Party Claim), without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed; provided, however, such consent may be withheld if, among other reasons, as a result of such settlement or cessation of defense, (i) injunctive relief or specific performance would be imposed against the Indemnified Party, or (ii) such settlement or cessation would lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder.

(e)           If an Indemnified Party refuses to consent to a bona fide offer of settlement which the Indemnifying Party wishes to accept, which provides for a full release of the Indemnified Party and its affiliates relating to the Third Party Claims underlying the offer of settlement and solely for a monetary payment, the Indemnified Party may continue to pursue such matter, free of any participation by the Indemnifying Party, at the sole expense of the Indemnified Party. In such an event, the obligation of the Indemnifying Party shall be limited to the amount of the offer of settlement which the Indemnified Party refused to accept plus the reasonable costs and expenses of the Indemnified Party incurred prior to the date the Indemnifying Party notified the Indemnified Party of the offer of settlement.

(f)           Notwithstanding clause (d) above, the Indemnifying Party shall not be entitled to control, but may participate in, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of (x) that part of any Third Party Claim that (i) seeks a temporary restraining order, a preliminary or permanent injunction or specific performance against the Indemnified Party, (ii) involves criminal allegations against the Indemnified Party or (iii) may lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder and (y) the entire Third Party Claim if such Third Party Claim would impose liability on the part of the Indemnified Party in an amount which is greater than the amount as to which the Indemnified Party is entitled to indemnification under this Agreement.

(g)           A failure by an Indemnified Party to give timely, complete or accurate notice as provided in this Section 7.4 will not affect the rights or obligations of any party hereunder except and only to the extent that, as a result of such failure, any party entitled to receive such notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise directly and materially damaged as a result of such failure to give timely notice.

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Section 7.5       Right of Offset.   Without limiting any other rights or remedies available to it, the Purchaser shall be entitled, subject to the limitations in Section 7.6, to offset any claim for indemnity made pursuant to Section 7.2 and in accordance with Section 7.4, against any payment of the Purchase Price due under Section 2.1; provided, however, the Purchaser may only exercise such right of offset in respect of claims relating to Losses actually incurred by a Purchaser Indemnified Party (in which case the amount of such offset shall be the amount of such actual Loss) or claims actually asserted by a third party (in which case the amount of the offset shall not exceed the Purchaser's good faith estimate of the amount of indemnifiable Losses that will ultimately be payable to a Purchaser Indemnified Party in respect of such claims).  If any such claims for indemnity are resolved in favor of IMS Holdco and the Principals by mutual agreement or otherwise, or if the amount withheld exceeds the amount ultimately payable to a Purchaser Indemnified Party in respect of such claim, the Purchaser shall pay to IMS Holdco the excess amount withheld with respect to such claim, together with interest thereon for the period such amount has been withheld at a rate equal to the published prime rate of interest of J.P. Morgan Chase in New York, in effect from time to time during the relevant period.

Section 7.6       Limitations On and Other Matters Regarding Indemnification.

7.6.1        Indemnity Cushion and Cap.  Subject to Section 7.6.5, neither IMS Holdco nor the Principals shall have any liability to any Purchaser Indemnified Party with respect to Losses arising out of any of the matters referred to in Section 7.2 until such time as the amount of such liability shall exceed $50,000 in the aggregate (in which case IMS Holdco and the Principals shall be liable for all Losses in excess of $50,000.  Notwithstanding anything to the contrary herein, subject to Section 7.6.5 below, the maximum aggregate liability of IMS Holdco and the Principals for indemnity payments under Section 7.2.1 and Section 7.2.2 shall be an amount equal to $30,000,000.

7.6.2        Termination of Indemnification Obligations of IMS Holdco and the Principals.  Subject to Section 7.6.5, the obligation of IMS Holdco and the Principals to indemnify under Section 7.2 hereof shall terminate on June 30, 2012, except as to matters as to which the Purchaser Indemnified Party has made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.3        Termination of Indemnification Obligations of the Purchaser.  The obligation of the Purchaser to indemnify under Section 7.3 hereof shall terminate on June 30, 2012, except as to matters as to which IMS Holdco or the Principals have made a claim for indemnification on or prior to such date, in which case the right to indemnification with respect thereto for such party shall survive the expiration of such period until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.

7.6.4        Treatment.  Any indemnity payments by an Indemnifying Party to an Indemnified Party under this Article VIII shall be treated by the parties as an adjustment to the Purchase Price.

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7.6.5        Exceptions.  Each of the limitations set forth above in this Section 7.6 shall in no event (a) apply to any Losses incurred by a Purchaser Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by IMS Holdco or the Principals; (ii) any breach of a representation or warranty contained in Sections 3.1, 3.2, 3.3, 3.6, 3.11, 3.19, 3.25 or any other provision hereof relating to Taxes, (iii) any indemnification obligation under Sections 7.2.1(c), 7.2.1(d), 7.2.1(e), 7.2.1(f), 7.2.1(g) or 7.2.1(h); and (iv) the obligations of IMS Holdco and the Principals set forth in Section 8.1 to pay certain expenses; or (b) apply to any Losses incurred by an IMS Holdco Indemnified Party which relate, directly or indirectly, to (i) any fraudulent acts committed by the Purchaser; (ii) any indemnification obligation under Section 7.3(c); and (iii) the Purchaser's obligations set forth in Section 8.1 to pay certain expenses.

7.6.6        Control by MDC Partners.  All decisions and determinations to be made by the Purchaser and/or a Purchaser Indemnified Party under this Article VII shall be made by MDC Partners in the name of and on behalf of the Purchaser and/or such other Purchaser Indemnified Party.

7.6.7        Tax and Insurance Effects.  An indemnity payment due and payable by an Indemnifying Party under this Article VII shall be decreased to the extent of any   net  reduction in Taxes payable by the Indemnified Party resulting from the Losses,  taking into account the tax consequences to the Indemnified Party of the receipt of any indemnity payment due and payable by the Indemnifying Party under this Article VII.  In both cases the tax consequences shall be  determined  by using an assumed marginal tax rate equal to the highest marginal tax rate then in effect for corporate or individual taxpayers, as applicable, in the relevant jurisdiction.  In addition, any amounts otherwise required to be paid by an Indemnifying Party under this Article VII shall be net of any insurance proceeds received by the Indemnified Party.

ARTICLE VIII

MISCELLANEOUS

Section 8.1       Expenses.   Except as otherwise provided in this Agreement, the Purchaser, on the one hand, and the Principals and IMS Holdco, on the other hand, shall pay its, her or his own expenses relating to the transactions contemplated by this Agreement, including, without limitation, the fees and expenses of their respective counsel, financial advisors and accountants.

Section 8.2       Governing Law; Service of Process and Consent to Jurisdiction. The interpretation and construction of this Agreement, and all matters relating hereto (including, without limitation, the validity or enforcement of this Agreement), shall be governed by the laws of the State of New York without regard to any conflicts or choice of laws provisions of the State of New York that would result in the application of the law of any other jurisdiction.  Each of the parties hereto agrees that delivery of process, summons, notice or document in accordance with Section 8.2 shall be effective service of process for any action, suit or proceeding arising out of this Agreement.  Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any court of the State of New York located in New York County in any action, suit or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby, and agrees that any such action, suit or proceeding shall be brought only in such court.  Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such action, suit or proceeding brought in such a court and any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

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Section 8.3       "Person" Defined.   "Person" shall mean and include an individual, a company, a joint venture, a corporation (including any non-profit corporation), an estate, an association, a trust, a general or limited partnership, a limited liability company, a limited liability partnership, an unincorporated organization and a government or other department or agency thereof.

Section 8.4       "Knowledge" Defined.   Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Principals, such term shall be limited to the actual knowledge of any executive officer of IMS Holdco or any Principal, and unless otherwise stated, such knowledge that would have been discovered by any of them after reasonable inquiry.  Where any representation and warranty contained in this Agreement is expressly specified by reference to the knowledge of the Purchaser, as the case may be, such term shall be limited to the actual knowledge of the executive officers of such entity and unless otherwise stated, such knowledge that would have been discovered by such executive officers after reasonable inquiry.

Section 8.5       "Affiliate" Defined.   As used in this Agreement, an "affiliate" of any Person, shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

Section 8.6       Captions.   The Article and Section captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement.

Section 8.7       Publicity.   Subject to the provisions of the next sentence, no party to this Agreement shall, and the Principals shall use their reasonable efforts to ensure that no representative of IMS Holdco or the Company shall, issue any press release or other public document or make any public statement relating to this Agreement or the matters contained herein without obtaining the prior approval of the Purchaser and the Representative.  Notwithstanding the foregoing, the foregoing provision shall not apply to the extent that MDC Partners is required to make any announcement relating to or arising out of this Agreement by virtue of the securities laws of the United States or Canada or the rules and regulations promulgated thereunder or other rules of the NASDAQ Stock Market, Toronto Stock Exchange or the United States Securities and Exchange Commission or any announcement by any party or the Company pursuant to applicable law or regulations.

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Section 8.8       Notices.   Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to any other party shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next business day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to the Purchaser, addressed to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

c/o MDC Partners Inc.

950 Third Avenue

New York, New York 10022

Attention:  General Counsel

and (which shall not constitute notice)

Davis & Gilbert LLP

1740 Broadway

New York, New York 10019

Attention:  Brad J. Schwartzberg, Esq.

If to IMS Holdco or the Principals, to:

c/o BDR Company, LLC

650 Fifth Avenue

New York, New York 10017

Attention: Robert Ingram

with a copy to (which shall not constitute notice):

Moses & Singer LLP

405 Lexington Avenue

New York, New York 10174

Attention: Solomon P. Friedman, Esq.

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

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Section 8.9       Parties in Interest.   This Agreement may not be transferred, assigned, pledged or hypothecated by any party hereto, other than by operation of law.  Any purported such transfer, assignment, pledge, or hypothecation (other than by operation of law) shall be void and ineffective.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

Section 8.10     Severability.   In the event any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless be binding upon the parties with the same effect as though the void or unenforceable part had been severed and deleted.

Section 8.11     Counterparts.   This Agreement may be executed in two or more counterparts or by facsimile transmission, all of which taken together shall constitute one instrument.

Section 8.12     Entire Agreement.   This Agreement, together with the Schedules and Exhibits hereto, constitutes the sole, exclusive and only agreements of the parties hereto pertaining to the subject matter hereof, contains all of the covenants, conditions and agreements between the parties, express or implied, whether by statute or otherwise, and sets forth the respective rights, duties and obligations of each party to the other party as of the Closing Date. No oral understandings, oral statements, oral promises or oral inducements exist.

Section 8.13     Amendments.   This Agreement may not be amended, supplemented or modified orally, but only by an agreement in writing signed by each of the parties hereto.

Section 8.14     Third Party Beneficiaries.   Each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto and their respective successors and assigns as permitted under Section 8.9, except the Purchaser Indemnified Parties as provided in Article VII hereof.

Section 8.15     Use of Terms.   Whenever the context so requires or permits, all references to the masculine herein shall include the feminine and neuter, all references to the neuter herein shall include the masculine and feminine, all references to the plural shall include the singular and all references to the singular shall include the plural.  Whenever used in this Agreement, the terms "Dollars" and "$" shall mean United Stated Dollars.

Section 8.16     "Liens" Defined.   With respect to any asset, a "Lien" shall mean (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (other than an operating lease) (or any financial lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

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Section 8.17     No Strict Construction; Representation by Counsel.  The language used in this Agreement will be deemed to be the language chosen by the parties hereto 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.  The provisions of this Agreement shall be construed according to their fair meaning and neither for nor against any party hereto irrespective of which party caused such provisions to be drafted.  Each of the parties acknowledges that it has been represented by an attorney in connection with the preparation and execution of this Agreement.

Section 8.18     Representative.  Each of the Principals and IMS Holdco hereby appoints Ingram as his, her or its exclusive agent and attorney-in-fact (the "Representative") (i) to give and receive notices and communications with respect to the provisions of this Agreement, (ii) to amend the terms of this Agreement, (iii) to agree to, negotiate, enter into settlements or compromises of matters arising under the provisions of this Agreement, and (iv) to take any and all actions necessary or appropriate in the judgment of the Representative to be taken on behalf of the Principals and IMS Holdco under such provisions of this Agreement.  Such agency and that of any successor representative is irrevocable and coupled with an interest; provided, however, the Representative shall have no authority to act on behalf of any Principal or IMS Holdco with respect to an indemnity claim under Section 7.2.2.  In the event the Representative refuses to, or is no longer capable of, serving as the Representative hereunder, the other Principals shall promptly appoint a successor Representative who shall thereafter be the successor Representative hereunder and the Representative shall serve until such successor is duly appointed and qualified to act hereunder.  The Principals and IMS Holdco hereby agree that the Representative shall not have any liability to the Company or any of its subsidiaries, if any, for any action he takes or omits to take hereunder (or under any agreement or instrument referred to herein) in his capacity as Representative, unless such action or omission constitutes bad faith or willful misconduct by the Representative.  Notices or communications to or from the Representative shall constitute notice to or from the Principals and/or IMS Holdco in respect of matters relating to this Agreement.  Any decision, act, consent or instruction of the Representative shall constitute a decision of all of the Principals and IMS Holdco, and shall be final, binding and conclusive upon each Principal and IMS Holdco, and the Purchaser may rely upon any decision, act, consent or instruction of the Representative as being the decision, act, consent or instruction of IMS Holdco and each and every Principal.

Section 8.19     Guaranty.  MDC Partners hereby agrees to pay, or cause the Purchaser to pay, when due, each payment of Purchase Price required pursuant to Article II above and any indemnification obligations of the Purchaser pursuant to Article VII above.

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IN WITNESS WHEREOF, the parties hereto have executed this Membership Unit Purchase Agreement, on the day and year first above written.

MF + P ACQUISITION CO.
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary
INTEGRATED MEDIA SOLUTIONS, LLC
By:	/s/ Robert Ingram
	Name: Robert Ingram
	Title: Chief Executive Officer
/s/
Robert Ingram
/s/
Desiree Du Mont
/s/
Ron Corvino
MDC PARTNERS INC. (solely with respect to Sections 7.6.6 and 8.19)
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: General Counsel and Corporate Secretary

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TABLE OF CONTENTS

ARTICLE I
SALE OF THE PURCHASED UNITS
Section 1.1  Sale of the Purchased Units	1
ARTICLE II
PURCHASE PRICE AND CLOSING
Section 2.1  Purchase Price; Working Capital Adjustment	2
2.1.1  Purchase Price	2
2.1.2  Definitions	6
2.1.2  Other Definitions	6
2.1.3  Accounting Procedures	7
2.1.4  Examination of Books and Records	8
Section 2.2  Closing	8
Section 2.3  Third Party Consents	9
Section 2.4  Further Assurance; Post Closing Cooperation	9
ARTICLE III
REPRESENTATIONS OF IMS HOLDCO AND THE PRINCIPALS
Section 3.1  Execution and Validity of Agreements; Restrictive Documents	9
3.1.1  Execution and Validity	9
3.1.2  No Restrictions	10
3.1.3  Non-Contravention	10
3.1.4  Approvals and Consents	10
Section 3.2  Existence and Good Standing	10
Section 3.3  Capital Stock; Equity Ownership; No Options or Restrictions; Subsidiaries and Investments	11
Section 3.4  Financial Statements and No Material Changes	11
Section 3.5  Books and Records	12
Section 3.6  Title to Properties; Encumbrances; No Prior Activities	12
3.6.1  Title to Properties; Encumbrances	12
3.6.2  No Prior Activities	12
Section 3.7  Real Property	13
3.7.1  Owned Real Property	13
3.7.2  Leased Real Property	13
Section 3.8  Contracts	14
Section 3.9  Non-Contravention; Approvals and Consents	15
Section 3.10  Litigation	15
Section 3.11  Taxes	16
Section 3.12  Liabilities	17

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Section 3.13  Insurance	17
Section 3.14  Intellectual Properties	18
3.14.1  Definitions	18
3.14.2  Representations	19
3.14.3  Privacy and Security	20
Section 3.15  Compliance with Laws	20
Section 3.16  Client Relations	21
Section 3.17  Accounts Receivable; Work-in-Process; Accounts Payable	21
Section 3.18  Employment Relations	21
Section 3.19  Employee Benefit Matters	22
3.19.1  List of Plans	22
3.19.2  Severance	22
3.19.3  Multi-Employer Plans	23
3.19.4  Welfare Benefit Plans	23
3.19.5  Administrative Compliance	23
3.19.6  Tax-Qualification	24
3.19.7  Funding; Excise Taxes	24
3.19.8  Tax Deductions	25
3.19.9  409A	25
Section 3.20  Interests in Customers, Suppliers, Etc.	25
Section 3.21  Bank Accounts and Powers of Attorney	26
Section 3.22  Compensation of Employoees	26
Section 3.23  No Changes Since the Balance Sheet Date	27
Section 3.24  Corporate Controls	27
Section 3.25  Brokers	27
Section 3.26  Repayment of Loans	28
Section 3.27  Copies of Documents	28
ARTICLE IV
REPRESENTATIONS OF THE PURCHASER
Section 4.1  Existence and Good Standing	28
Section 4.2  Execution and Validity of Agreement	28
Section 4.3  Litigation	28
Section 4.4  Non Contravention; Approvals and Consents	29
Section 4.5  Brokers	29
ARTICLE V
ACTIONS AT CLOSING
Section 5.1  Certified Resolutions	29
Section 5.2  Required Approvals and Consents	29
Section 5.3  Operating Agreement	29
Section 5.4  Employment Agreements	29
Section 5.5  Non-Competition/Non-Solicitation/Non-Servicing Agreements	30
Section 5.6  Conveyance Document	30

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Section 5.7  Proceedings	30
ARTICLE VI
OTHER AGREEMENTS
Section 6.1  Management of the Company	30
6.1.1  MDC Financing	30
6.1.2  Effect of Events During Period Membership Units Are Outstanding	31
Section 6.2  Tax Matters	31
6.2.1  Allocation	31
6.2.2  Tax Returns	31
6.2.3  Tax Cooperation	32
6.2.4  Tax Liability	32
Section 6.3  Equity Securities of IMS Holdco	32
Section 6.4  Change of Name	33
ARTICLE VII
SURVIVAL; INDEMNITY
Section 7.1  Survival	33
Section 7.2  Obligation of IMS Holdco and the Principals to Indemnify	34
7.2.1  General Indemnity	34
7.2.2  Special Indemnity	34
7.2.3  Losses	34
Section 7.3  Obligation of the Purchaser to Indemnify	35
Section 7.4  Indemnification Procedures	35
7.4.1  Non-Third Party Claims	35
7.4.2  Third-Party Claims	36
Section 7.5  Right of Offset	38
Section 7.6  Limitations On and Other Matters Regarding Indemnification	38
7.6.1  Indemnity Cushion and Cap	38
7.6.2  Termination of Indemnification Obligations of IMS Holdco and the Principals	38
7.6.3  Termination of Indemnification Obligations of the Purchaser	38
7.6.4  Treatment	38
7.6.5  Exceptions	39
7.6.6  Control by MDC Partners	39
7.6.7  Tax and Insurance Effects	39
ARTICLE VIII
MISCELLANEOUS
Section 8.1  Expenses	39
Section 8.2  Governing Law; Service of Process and Consent to Jurisdiction	39
Section 8.3  "Person" Defined	40
Section 8.4  "Knowledge" Defined	40
Section 8.5  "Affiliate" Defined	40

47

Section 8.6  Captions	40
Section 8.7  Publicity	40
Section 8.8  Notices	41
Section 8.9  Parties in Interest	42
Section 8.10  Severability	42
Section 8.11  Counterparts	42
Section 8.12  Entire Agreement	42
Section 8.13  Amendments	42
Section 8.14  Third Party Beneficiaries	42
Section 8.15  Use of Terms	42
Section 8.16  "Liens" Defined	42
Section 8.17  No Strict Construction; Representation by Counsel	43
Section 8.18  Representative	43
Section 8.19  Guaranty	43

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INDEX OF DEFINED TERMS

2010 Growth Payment	5
409A Liability	26
409A Plan	26
Accountants	7
Additional Payments	6
Adjusted GAAP PBT	6
affiliate	42
Agreement	1
Applicable Percentage	6
Balance Sheet	12
Balance Sheet Date	12
Business	11
Closing	8
Closing Balance Sheet	7
Closing Date	9
Closing Date Working Capital	7
Code	6
Company	1
Company Indemnified Parties	36
Company Indemnified Party	36
Contracts	10
Conveyance Document	1
Data	20
Defense Counsel	38
Defense Notice	38
Desiree	1
Environmental Laws and Orders	21
ERISA	23
ERISA Affiliate	23
Extra Payment	5
Family Member	34
FAP	3
FIAP	5
FOAP	4

GAAP	7
Governmental or Regulatory Authority	10
IMS	1
IMS Interests	33
Indemnification Notice	38
Indemnification Notice Period	38
Indemnified Party	37
Indemnifying Party	37
Independent Auditors	7
Ingram	1
Initial Top-Up Amount	3
Intellectual Property	18
Intellectual Property of the Company	19
JAMS	8
Laws	10
Lender	32
Liabilities	17
Licensed Intellectual Property	19
Lien	44
Losses	35
LTG Rate Increase	3
Material Adverse Effect	21
MDC Financing	32
MDC Partners	1
Membership Units	1
Non PII	20
Non-Third Party Acknowledgement of Liability	37
Non-Third Party Claim	37
Non-Third Party Claim Notice	37
Non-Third Party Dispute Notice	37
Non-Third Party Dispute Period	37
Off-the-Shelf Software	19
Operating Agreement	1
Operative Documents	44
Orders	10
PBGC	25
Person	42
PII	20
Plan	23

Plans	23
Principal	1
Principals	1
Privacy Policy	20
Purchase Price	2
Purchased Units	1
Purchaser	1
Purchaser Indemnified Parties	35
Purchaser Indemnified Party	35
Real Property Lease	13
Real Property Leases	13
Reconciliation Period	7
Registered IP	19
Related Group	26
Representative	45
Required Permits	21
Retained Subsidiaries	13
Ron	1
Sale Event	6
Sales Taxes	33
SAP	3
Special Determination	7
TAP	4
Target Working Capital	7
Taxes	16
Third Party Claim	37
Third Party Claims Notice	37
Title IV Plan	25
Top-Up Payments	2
Transfer	33
Unregistered IP	19
Working Capital Payment	2
Working Capital Shortfall	2

EXHIBITS

Exhibit A	Conveyance Document
Exhibit B	Operating Agreement
Exhibit C	Employment Agreements
Exhibit D-1	Principals Non-Competition/Non-Solicitation/Non-Servicing Agreements
Exhibit D-2	Dawn Du Mont Non-Competition/Non-Solicitation/Non-Servicing Agreements
Exhibit E	IMS Holdco's Second Agreement and Restated Operating Agreement

SCHEDULES

Schedule 2.1.1	Payment of the Purchase Price
Schedule 3.2	Good Standing
Schedule 3.3	No Options or Restrictions
Schedule 3.4(A)	Financial Statements
Schedule 3.4(B)	GAAP Exceptions
Schedule 3.6	Liens
Schedule 3.7.2	Real Property Leases
Schedule 3.8	Contracts
Schedule 3.9	Approvals and Consents
Schedule 3.10	Litigation
Schedule 3.11	Taxes
Schedule 3.12	Liabilities
Schedule 3.13	Insurance
Schedule 3.14.2	Intellectual Property
Schedule 3.16	Client Relations
Schedule 3.19.2	Severance
Schedule 3.20	Interests in Customers, Suppliers, Etc.
Schedule 3.21	Bank Accounts and Powers of Attorney
Schedule 3.22	Compensation of Employees
Schedule 3.23	No Changes Since the Balance Sheet Date
Schedule 3.25	Brokers

EX-10.3.2 7 v183284_ex10-3x2.htm

Exhibit 10.3.2

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

INTEGRATED MEDIA SOLUTIONS PARTNERS LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") dated May 6, 2010 and effective as of April 30, 2010, is made and entered into by and among INTEGRATED MEDIA SOLUTIONS PARTNERS LLC, a Delaware limited liability company (the "Company"), MF + P ACQUISITION CO., a Delaware corporation ("MDC Holdco"), and INTEGRATED MEDIA SOLUTIONS, LLC, a New York limited liability company ("IMS Holdco", together with MDC Holdco, are collectively referred to as the "Members" and individually a "Member").   Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article XIII.

WHEREAS, IMS Holdco formed the Company as its sole member, owning 100% of the Membership Interests (as defined in Section 13.1 hereof) in the Company, and entered into a Limited Liability Company Agreement of the Company (the "Original Operating Agreement");

WHEREAS, pursuant to a General Assignment, Bill of Sale and Assumption Agreement (the "Conveyance Document"), effective as of April 30, 2010 (the "Effective Date"), a copy of which has been delivered to MDC Holdco, IMS Holdco transferred to the Company substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business (the "Business"), in exchange for 100% of the Membership Interests;

WHEREAS, pursuant to the Membership Unit Purchase Agreement effective as of the Effective Date (the "Purchase Agreement"), IMS Holdco sold, transferred, conveyed and delivered to MDC Holdco 750 Class A Units, representing 100% of the issued and outstanding Class A Units (the "Purchase Transaction"), such that immediately after giving effect to such transfer, the issued and outstanding Units of the Company were as follows: MDC Holdco – 750 Class A Units; IMS Holdco – 250 Class B Units; and

WHEREAS, the Members now desire to enter into this Agreement to supersede the Original Operating Agreement, to provide for the admission of MDC Holdco as a member, and to promote their interests and those of the Company by making provisions in this Agreement to govern their relations as Members;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members and the other parties hereto do hereby agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

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

Section 1.3           Offices; Registered Agent.  The principal place of business of the Company shall be 650 Fifth Avenue, New York, New York, 10017, or such other principal place of business as the Managers (as defined in Section 11.5) may from time to time determine.  The Company may have, in addition to such office, such other offices and places of business at such locations, both within and without the State of Delaware, as the Managers may from time to time determine or the business and affairs of the Company may require.  The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person (as defined in Section 13.1) as the Managers may designate from time to time in the manner provided by law.

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

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

ARTICLE II

MEMBERS; MEMBERSHIP INTERESTS; UNITS

Section 2.1           Members and Membership Units.  The Company is authorized to issue 750 Class A Units and 250 Class B Units, all of which have been issued and are outstanding, and allocated among the Members as set forth on Schedule 2.1.  Upon any change in the Members or Units, including by reason of the issuance of additional Units, the Members agree to complete a revised Schedule 2.1 hereof, which shall be deemed incorporated into this Agreement as part of this Section 2.1.

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Section 2.2           Classes of Units.

(a)           Class A Units.  The Class A Units shall have the following characteristics: (i) an initial Unit Capital Account (as defined in Section 7.2(e) hereof), (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

(b)           Class B Units. The Class B Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

Section 2.3           Transfer of Units.  In the event a Member sells all or a portion of its Membership Interests in accordance with Article X hereof, then effective as of the date of the sale and subject to compliance with Section 10.1 hereof, such Member shall automatically cease to be a Member in the Company as to such sold Unit.  Upon the acquisition by MDC Holdco of any other Units pursuant to the procedures set forth in Article X hereof, MDC Holdco shall have all of the rights, powers and duties associated with such Units.

Section 2.4           Additional Members and Membership Interests.  Additional Persons may be admitted to the Company as Members and Membership Interests may be created and issued to such Persons on such terms and conditions as the Members shall approve, subject to Section 4.1 hereof.  The terms of admission or issuance may specify the creation of different classes or groups of Members having different rights, powers and duties.  The creation of any new class or group of Members shall be indicated in an amendment to this Agreement in accordance with Section 14.4 hereof and such amendment shall indicate the different rights, powers and duties of the classes or groups of Members.

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

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

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Section 2.7           Certification of Units. The Company may at its election issue certificates to the Members representing the Units held by such Member. If such election is approved by the Managers, then this Section 2.7 shall apply and not otherwise:

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

(b)           The transfer register or transfer book and blank certificates shall be kept by the secretary of the Company or by any transfer agent or registrar approved by the Managers for that purpose. The certificates shall be numbered and registered in the share or unit register or transfer books of the Company as they are issued. Except to the extent that the Company shall have received written notice of an assignment of any Unit in the Company, the Company shall be entitled to treat the Person in whose name any certificates issued by the Company stand on the books of the Company as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such Unit on the part of any other Person.

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

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

ARTICLE III

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS

Section 3.1           Capital Account; Capital Contributions.

(a)           The Capital Accounts of the Members shall be computed in accordance with Section 7.2 below.  The Members hereby recognize the following to be the factual basis on which the Capital Accounts shall be so computed: (i) prior to the purchase of Class A Units by MDC Holdco from IMS Holdco pursuant to the Purchase Agreement, IMS Holdco made a capital contribution to the Company in an amount equal to the fair market value of the Business, which fair market value the Members agreed was equal to 133.33% of the fair market value of the actual consideration paid by MDC Holdco to IMS Holdco pursuant to the Purchase Agreement (the value of such consideration being the "Purchase Consideration Value"); (ii) pursuant to the Purchase Agreement, MDC Holdco acquired 100% of the Class A Units and 75% of IMS Holdco's former aggregate Capital Account in the Company and accordingly the Capital Account of MDC Holdco equals the Purchase Consideration Value; and (iii) the remaining aggregate Capital Account of IMS Holdco equals 33.33% of the Purchase Consideration Value.

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(b)           The Members agree that for purposes of this Agreement, each of MDC Holdco and IMS Holdco shall be deemed to have made initial Capital Contributions equal to their initial Capital Account balance as set forth in Section 3.1(a) above, and on Schedule A hereto, which shall be adjusted by the Members as soon as the final Purchase Consideration Value has been determined in accordance with the Purchase Agreement.  The Members also agree that the Gross Asset Values (as defined in Section 13.1 below) of all Business assets are to be determined as set forth in Section 8 of the Conveyance Document (as defined in the Purchase Agreement).

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

Section 3.3           Allocation of Profits and Losses.

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

(i)           Profits shall be allocated as follows:

(A) First, to those Members to whom GAAP PBT (as such term is defined in Section 13.1) for such calendar year and each prior calendar year since the Effective Time has been allocated under Section 3.5 until the excess of the cumulative allocations to each such Member of Profits for such calendar years under this Section 3.3(a)(i) over any cumulative allocations to each such Member of Losses under Section 3.3(a)(ii) for such calendar years equals the amount of GAAP PBT so allocated to each such Member during such calendar years; and

(B) Thereafter, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(ii)           Losses shall be allocated as follows:

(A) First, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(B) over Losses allocated under this Section 3.3(a)(ii)(A), 100% to the Members in the proportion in which such excess was allocated;

5

(B) Second, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(A) over Losses allocated under this Section 3.3(a)(ii)(B), 100% to the Members in the proportion in which such excess was allocated;

(C) Third, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(b)          In the case of any property contributed to the Company by any Member which at the time of contribution has an adjusted tax basis which differs from its fair market value, items of Profits, Losses, income, gain and deduction for income tax purposes shall be allocated as required under Section 704(c) of the Code to take into account such difference.   The parties agree that such allocations will be made following the traditional method with remedial allocations.

(c)           Notwithstanding anything to the contrary in this Agreement, all items of income attributable to any: (A) change in method of accounting for a taxable period ending on or prior to the Effective Time or a change in method required on account of the transactions contemplated to occur on the Effective Time, whether under Section 481 or otherwise; (B) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); and (C) installment sale or open transaction disposition made on or prior to the Effective Time, shall be allocated 100% to IMS Holdco.  The Members agree that if the allocation provided for in the preceding sentence cannot be done, the Managers shall cause the Company to allocate items of income, gain, deduction, and loss among the Members to achieve substantially the same results as if such allocation had been done.  In addition, an amount of income equal to any income triggered to MDC Holdco and/or the Company on account of any deemed assumption by either or both of them of any deferred revenue of IMS Holdco as of the Effective Time shall be allocated 100% to IMS Holdco.

(d)           Any item of taxable income, gain, loss or deduction of the Company (as well as any credits or the basis of property to which such credits apply) as determined for federal income tax purposes shall be allocated in the same manner as the corresponding income, gain, loss, or deduction is allocated under Section 3.3(a) (as modified by Section 3(e)).  Allocations pursuant to this Section 3.3(d) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

(e)           Special Allocations and Limitations

(1)           In the event a Member unexpectedly receives in any taxable year any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) which cause or increase an Adjusted Capital Account Deficit (as defined in Section 13.1) of such Member, items of Company income and gain shall be specially allocated to such Member in such taxable year (and, if necessary in subsequent taxable years), in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible.

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(2)           Notwithstanding the provisions of Section 3.3(a), in no event shall Losses of the Company be allocated to a Member if such allocation would result in such Member’s having an Adjusted Capital Account Deficit at the end of any taxable year.  All Losses in excess of the limitation set forth in this Section 3.3(e)(2) shall be allocated to the Members with positive balances in their Capital Accounts, as a class pro rata in proportion to such positive balances.

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

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

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

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

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

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

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

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

(5)           Solely for purposes of determining a Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Members' interests in Company profits are in proportion to their Units, and, for purposes of allocating Nonrecourse Liabilities (as defined in Section 13.1) of the Company among the Members pursuant to Treasury Regulation Section 1.752-3(a)(3), the parties agree that each Member's interest in Company profits shall equal its Units.

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

8

(7)           For purposes of determining the character (as ordinary income or capital gain) of any Profits allocated to the Members pursuant to this Section 3, such portion of Profits that is treated as ordinary income attributable to the recapture of depreciation shall, to the extent possible, be allocated among the Members in the proportion which (i) the amount of depreciation previously allocated to each Member bears to (ii) the total of such depreciation allocated to all Members.  This Section 3.3(f)(7) shall not alter the amount of allocations among the Members pursuant to this Section 3, but merely the character of income so allocated.

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

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

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

Section 3.4           Distributions.

(a)           Subject to the making of the Tax Distributions (as defined in clause (b) below), to the extent permitted by the Act, the Company shall distribute Cash Flow (as defined in Section 13.1) of the Company as follows:

(i) first, distributions of Cash Flow generated by the Company in respect of any calendar year, shall be distributed 100% to the holders of the Class A Units in an amount equal to the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class A Distribution Shortfall Amount (as defined in Section 13.1) for such year; and

(ii) thereafter, distributions of Cash Flow generated by the Company in respect of any calendar year shall be distributed to the holders of the Class B Units in an amount no greater than the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class B Distribution Shortfall Amount (as defined in Section 13.1) for such year.

Distributions described above shall be made on a quarterly basis, generally in arrears, based upon the financial statements of the Company and its subsidiaries then available to the Managers.

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(b)           Notwithstanding anything in this Agreement to the contrary, in preference to any other distributions pursuant to this Section 3.4, the Members shall cause the Company to distribute cash of the Company to its Members on a quarterly (or other reasonable) basis at least sufficient for each Member to meet such Member's required federal, state and local income tax payments in respect of such Member's distributive share of the Company's taxable income for the current or the prior fiscal year calculated at the maximum individual tax rates for a resident of New York City taking into account the deduction allowable for federal income taxes of any state income taxes (which tax payments shall include (i) estimated tax payments in respect of the current fiscal year and (ii) any remaining payments of income tax on account of the prior fiscal year not funded out of Tax Distributions in respect of estimated payments for such prior fiscal year) (the "Tax Distributions").  For purposes hereof, if a Member is a "pass-through" entity for income tax purposes, the Tax Distributions required hereby shall be made in amounts which are at least sufficient to meet the tax payment requirements of the stockholders or members of such Member in respect of their allocated Profits hereunder. For purposes of Section 3.4(a) hereof, Tax Distributions shall be deemed to be distributions of Cash Flow at the time of such Tax Distribution.

(c)           Any distribution of funds prior to the end of the fiscal year in which such funds came into possession of the Company shall be treated as a non-interest-bearing loan (a "draw") from the Company to each Member receiving such draw and shall be deemed repaid by reducing the amount of each subsequent distribution to the Member receiving such draw pursuant to this Section 3.4(c) by the lesser of (i) the entire amount otherwise distributable to the Member receiving such draw, and (ii) the entire amount of any unrepaid draws pursuant to this Section 3.4(c).

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

Section 3.5           Allocation of GAAP PBT.

(a)           GAAP PBT (as defined in Section 13.1) for purposes of this Agreement shall be allocated for any calendar year as follows:

(i) first, GAAP PBT shall be allocated to the Loss Account (as defined in Section 3.5(b) below) until such Loss Account shall have been brought to zero;

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(ii) next, with respect to calendar years 2010 through 2014, GAAP PBT generated by the Company in such years shall be allocated 100% to the holders of the Class A Units; and

(iii) thereafter, with respect to all calendar years from and after 2015,  GAAP PBT generated by the Company in such year shall be allocated to the Members in accordance with the number of Units held by such Member.

(b)           Allocation of Annual Loss.  In the event that GAAP PBT for any year shall be less than zero, such amount (expressed as a negative) shall be allocated to a loss account (the "Loss Account"), which shall be required to be brought to zero through allocations of future year allocations of GAAP PBT pursuant to Section 3.5(a)(i) before allocations of positive GAAP PBT shall be made to the Members.

ARTICLE IV

MANAGEMENT

Section 4.1           Management of the Company.

(a)           Except to the extent otherwise provided for herein, the powers of the Company shall be exercised by and under the authority of, and the business and affairs of the Company shall be managed under, the direction of the Managers of the Company. Notwithstanding the foregoing or any other provisions hereof to the contrary, until MDC Holdco or one of its Affiliates has purchased and paid for 100% of the Class B Units the taking of any of the actions listed in clauses (i) through (xv)below shall require the mutual agreement of MDC Holdco and IMS Holdco.  The mutual agreement of MDC Holdco and IMS Holdco may be obtained by a vote at a meeting of the Members or by the written consent of MDC Holdco and IMS Holdco.

(i)            a sale, lease or other disposition of all or substantially all or a significant part of the assets or business of the Company or any subsidiary thereof, except in connection with (x) a sale, lease or other disposition of all or substantially all or a significant part of the assets or business or stock (an "MDC Sale") of MDC Partners Inc. ("MDC Partners"); (y) an MDC Financing (as defined in Section 4.1(e) hereof) or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing; or (z) any transfer by MDC Holdco or any of its Affiliates of their respective interest in the Company to another wholly-owned subsidiary of MDC Partners (an "MDC Internal Transfer") (for purposes of this Agreement, in the event of any MDC Internal Transfer, the term MDC Holdco as used in this Agreement shall include any such transferee);

(ii)           a merger, consolidation or amalgamation of the Company or any subsidiary with and into another Person or of another Person with and into the Company or any subsidiary, except in connection with an MDC Sale, an MDC Internal Transfer or an MDC Financing;

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(iii)          the authorization or issuance of additional Class A Units, Class B Units or other equity ownership interests in, or the granting of any other rights to participate in the proceeds of the sale of assets of the Company which are dilutive to IMS Holdco; or the incurring of debt for borrowed money in excess of the amount provided for in the approved annual operating budget or capital expenditure budget, except in connection with borrowings under the terms and conditions of the MDC Cash Management Program (and in compliance with Section 4.1(d) below);

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

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

(vi)          a relocation of the Company's offices from either its current office location at (a) 650 Fifth Avenue, New York, New York or (b) 50 S. Beverly Drive, Beverly Hills, California, at any time while either lease thereon remains in effect under such lease's terms in effect as of the Effective Date, unless such relocation occurs as a result of the failure to obtain the consent of the landlord in connection with the assignment of such lease;

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

(viii)        any change in the name of the Company;

(ix)           entering into any business other than, or any transaction outside of, the normal business activities of the Company and any of its subsidiaries and related activities other than a MDC Internal Transfer;

(x)           the payment by the Company of any general management fee to any Member or one of such Member's Affiliates;

(xi)           a fundamental change to the nature of the business of the Company and its subsidiaries, taken as a whole;

(xii)          the formation of any subsidiaries of the Company or any of its subsidiaries;

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(xiii)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal (as defined in the Purchase Agreement) is in the active employ of the Company, (x) modify the salary, bonus or other incentive compensation of any employee of the Company or any of its subsidiaries, or (y) adopt or amend any profit sharing or other employee benefit or compensation plan for the Company or any of its subsidiaries; provided, however, this clause (xiii) shall not apply to the employment terms of Robert Ingram, whose employment terms are set forth in his Employment Agreement, or any other individual in the position of Chief Executive Officer of the Company;

(xiv)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal is in the active employ of the Company, hire, or fire "without cause", any employee of the Company or any of its subsidiaries whose annual salary is less than $200,000, without the consent of the then Chief Executive Officer of the Company (or if there is more than one such Chief Executive Officer, then any of such Chief Executive Officers, it being understood that as of the date of this Agreement Robert Ingram is the Chief Executive Officer of the Company); and

(xv)         the delegation to any Manager or to any committee of the Board of Managers of the Company or any subsidiary or to any officer of the Company or any subsidiary the power to take any of the actions referred to in the foregoing clauses before obtaining the authorization required by this Section 4.1(a).

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

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

(d)          The Members hereto further agree that the operations of the Company and its subsidiaries shall be conducted (i) subject to Section 4.1(g) below, to participate in the overall cash management and banking program of MDC Partners (the "MDC Cash Management Program"), and (ii) to comply on a timely basis with the financial reporting and budgeting procedures of MDC Partners as from time to time in effect, which procedures require the approval of an annual operating budget, capital expenditure budget and cash flow projections and require management of operating companies to seek approval prior to material deviations from such budgets.

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(e)           Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the purchase price pursuant to the Purchase Agreement and for other good and valuable consideration, the Members hereby (i) agree that MDC Partners  and/or one or more of its Affiliates, in connection with its or any of its Affiliates’ current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon MDC Holdco's Membership Interests; (x) pledge or grant a security interest in or otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under any Call to, or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders from time to time (as applicable and collectively, the "Lender"); and (z) have the Company and/or its subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned to it.

(f)           MDC Partners shall cause sufficient working capital to be made available to the Company as shall be determined by the Board of Managers to be reasonably necessary to execute upon its approved annual operating and capital expenditure budgets, but in no event shall MDC Partners or any of its Affiliates be required to fund losses of the Company or any of its subsidiaries.  Such working capital shall be provided to the Company on terms consistent with the MDC Cash Management Program and accordingly, neither MDC Partners nor any of its Affiliates shall be required to provide working capital in the event that the consolidated cash balance of the Company in the MDC Cash Management Program is negative. The parties hereto further agree that the Company shall hereby adopt, and shall take appropriate steps to cause the employees of the Company to comply with, the Code of Conduct of MDC Partners, as the same may be amended from time to time.

(g)           The Company shall comply with all applicable federal, state and local laws and the Company shall provide reasonable assistance to MDC Partners and its Affiliates in their compliance with all applicable federal, state and local laws, including without limitation, the provisions of the Sarbanes-Oxley Act of 2002, as amended from time to time.

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

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Section 4.3           Number and Qualifications of Managers.  As long as IMS Holdco owns outstanding Units of the Company, there shall be five (5) Managers of the Company of which MDC Holdco shall be entitled to appoint three (3) Managers and IMS Holdco shall be entitled to appoint two (2) Managers (each Manager appointed by IMS Holdco must be a full-time employee of the Company or one of its subsidiaries); thereafter the Managers shall be elected in accordance with Section 4.4.  No decrease in the number of Managers shall have the effect of shortening the term of any incumbent Manager.  None of the Managers need be Members of the Company or residents of the State of Delaware.  The initial designees of MDC Holdco are Gavin Swartzman, Michael Sabatino and David Doft.  The initial designees of IMS Holdco are Robert Ingram and Desiree Du Mont.

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

Section 4.5           Removal; Filling of Vacancies.  As long as IMS Holdco owns outstanding Units of the Company, only MDC Holdco can remove and replace its appointed Managers and only IMS Holdco can remove and replace its appointed Managers.  Following such time, the Members by the required vote as set forth in Section 5.5 shall be entitled to remove any Manager and to elect for the unexpired term of such Manager so removed another individual.  Upon the resignation, retirement or death of any of the Managers of the Company, subject to Section 4.3, the Members by the required vote as set forth in Section 5.5, shall be entitled to elect another Person for the unexpired term of such Manager.

Section 4.6           Place of Meetings.  Meetings of the Managers, annual, regular or special, shall be held in New York, NY, unless otherwise agreed to by the Managers.

Section 4.7           Annual Meetings.  Annual meetings of the Managers, of which no notice shall be required, shall be held at the discretion of the Managers immediately following any annual meeting of Members, at which time any and all business may be transacted.

Section 4.8           Regular Meetings.  The Managers shall notify each of the Members of regular meetings of the Managers, which meetings shall be held at such times and places as may be fixed from time to time by resolution adopted by the Managers.  Except as otherwise provided by statute, any and all business may be transacted at any regular meeting.  The Managers shall be given reasonable notice of the date, time and place of any scheduled regular meeting.

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

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

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

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

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

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

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

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

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

ARTICLE V

MEETINGS OF MEMBERS

Section 5.1           Annual Meetings.  An annual meeting of the Members shall not be required, but if called by any Member may be held on such date, at such time and at such place as shall be determined by the Managers and stated in the notice of the meeting, provided that there may be called no more than one such annual meeting in any calendar year.  At such meeting, the Members shall elect the Managers (subject to Section 4.3 above) and transact such other business as may properly be brought before the meeting.

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

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

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

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

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

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

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ARTICLE VI

OFFICERS

Section 6.1           Officers.  The Managers may designate one or more individuals (who may or may not be Managers) to serve as officers of the Company.  The Company shall have such officers as the Managers may from time to time determine.  Any two or more offices may be held by the same individual.  An officer of the Company shall have the duties and responsibilities consistent with his position and shall perform such duties and responsibilities as shall from time to time be prescribed or delegated to him by the Managers, subject to the terms of any employment agreement with the Company or one of its subsidiaries to which such officer may be a party. The Managers hereby initially designate Robert Ingram as Chief Executive Officer of the Company, Desiree Du Mont as President of the Company, Ron Corvino as President of the Company, Joe Volpe as Chief Operating Officer of the Company, Mitchell Gendel as Vice President and Secretary of the Company,  Michael Sabatino as Vice President and Treasurer of the Company, Gavin Swartzman as Vice President, Development of the Company, Edward Kipperman as Vice President, Taxation of the Company and Doreene Weiner as Director, Treasury Operations of the Company.

ARTICLE VII

ACCOUNTING AND TAX MATTERS; REPORTS; BANKING

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

Section 7.2           Capital Accounts.  An individual capital account (the "Capital Account") shall be maintained by the Company for each Member as provided below:

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(a)           Each Member's Capital Contributions when made shall be credited to such Member's Capital Account.  The Capital Account of each Member shall, except as otherwise provided in this Agreement, be (i) credited with the amount of cash and the fair market value of any property contributed to the Company by such Member or its predecessor in interest (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), (ii) credited with the amount of any Profits allocated to such Member or its predecessor in interest for federal income tax purposes, (iii) debited by the amount of any Losses allocated to such Member or its predecessor in interest for federal income tax purposes, (iv) debited by such Member's (or such predecessor's) allocable share of expenditures of the Company not deductible in computing the Company's taxable income and not properly chargeable as capital expenditures, including any nondeductible book amortization of capitalized costs, and (v) debited by the amount of cash or the fair market value of any property distributed to such Member its predecessor in interest (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code).  Immediately prior to any distribution of property by the Company, the Members’ Capital Accounts shall be adjusted, as required by Treasury Regulation 1.704-1(b)(2).

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

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

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

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

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

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

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

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

(c)           To elect under Section 754 of the Code to adjust the basis of the Company's assets pursuant to Sections 734 and 743 of the Code.

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

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

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

ARTICLE VIII

COVENANTS OF THE MEMBERS

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

ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION

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

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Section 9.2           Liquidation.  Upon dissolution of the Company, the Members shall appoint a Manager as liquidating trustee, who shall immediately commence to wind up the Company’s affairs; provided, however, that a reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the satisfaction of liabilities to creditors so as to enable the Members to minimize the normal losses attendant upon a liquidation.  After making payment or provision for all debts and liabilities of the Company, if determined to be necessary under the circumstances by the Managers, the Members' Capital Accounts shall be adjusted by debiting or crediting each Member's Capital Account with its respective share of the hypothetical gains or losses resulting from the assumed sale of all remaining assets of the Company for cash at their respective fair market values as of the date of dissolution of the Company in the same manner as gains and losses on actual sales of such properties are allocated under Section 3.3 and Section 3.5 hereof.  The liquidating trustee shall then by payment of cash or property make distributions to the Members in accordance with their respective Capital Accounts.  Any distribution to the Members in liquidation of the Company shall be made by the later of the end of the taxable year in which the liquidation occurs or 90 days after the date of such liquidation.  Notwithstanding any provisions in this Agreement to the contrary, no Member shall be obligated to restore a deficit balance in its Capital Account at any time.  The proceeds of liquidation shall be distributed, as realized, in the manner provided in the Act, subject to the applicable provisions of Section 3.4.  Subject to the immediately following sentence, the Members shall continue to share Profits and Losses during liquidation in the same proportions, as specified in Sections 3.3 and 3.5 hereof, as before liquidation.  Notwithstanding anything to the contrary herein, the Managers shall in their good faith discretion (and in a manner which reflects the economic interests of the Members consistent with the intent of the transactions set forth in this Agreement and the Purchase Agreement) allocate items of income, gain, deduction, and loss for the year of liquidation (and for earlier years if necessary to the extent then possible) so as to give Members positive Capital Account balances, immediately before the distributions provided for in the second preceding sentence, equal to the amount (if any) that would be distributed to Members if distributions were made in accordance with Section 3.4(a) and (b) hereof.  In the event that such Manager is unable to perform in his capacity as liquidating trustee due to bankruptcy, dissolution, death, adjudicated incompetency or any other termination of such Manager as an entity, the liquidating trustee shall be a Person approved by the unanimous vote of the Membership Interests.  With respect to this provision, the term "liquidation" shall have the same meaning as set forth in Treasury Regulation §1.704-1(b)(2)(ii) as in effect at such time, provided that the events specified in Section 10 shall not be deemed a "liquidation".

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

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

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ARTICLE X

RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS

Section 10.1         Assignment by the Members.  For so long as IMS Holdco owns Units, no Class A Unit shall be sold or transferred without the consent of IMS Holdco, except in connection with (i) an MDC Sale, (ii) an MDC Internal Transfer, (iii) a sale described in Section 10.2(b) or (iv) an MDC Financing or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing.  Except as set forth in Section 10.2(b), no Class B Unit shall be sold, transferred, assigned, pledged or otherwise disposed of, in whole or in part, without the written consent of MDC Holdco to such transfer, which, in the case of a transfer in connection with a distribution to the direct or indirect members of IMS Holdco or for tax or estate planning purposes, shall not be unreasonably delayed or withheld (but which shall require, without limitation, that such Class B Units so transferred continue to be subject to the applicable Call under Sections 10.2(a) and 10.2(c) hereof).  Any purported transfer by IMS Holdco or other permitted holder of Class B Units of all or any of its Units, any purported assignment by IMS Holdco or other permitted holders of Class B Units of any of its rights under this Agreement, and any purported delegation by IMS Holdco or other permitted holders of Class B Units of any of its duties or obligations under this Agreement (which shall in no way relieve IMS Holdco or such other permitted holder of Class B Units of responsibility for the performance of any such duties and obligations), in contravention of any of the provisions of this Agreement, will be null and void ab initio and of no force and effect.  Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the indirect sale of Units as part of any transaction involving a change of control of MDC Partners or its successors.

Section 10.2         Call Rights of MDC Holdco; Permitted IMS Holdco Liquidity Actions.

(a)           MDC Holdco Call.  At any time during the first calendar quarter of any calendar year commencing with calendar year 2015 (each, a "Call Period"), MDC Holdco shall have the right (but not the obligation) to require IMS Holdco to sell to it (a "Call"), all  of the Class B Units owned by IMS Holdco.  MDC may exercise the Call at any time during the Call Period, and may do so by delivering written notice of exercise (a "Call Exercise Notice") to IMS Holdco during the Call Period.  The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

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(b)           IMS Holdco Sale Request.

(i)           In the event that MDC Holdco has not yet exercised its Call right pursuant to Section 10.2(a) and the Sale Request Condition (as defined below) has then been met, during any applicable Sale Request Period (as defined below), IMS Holdco shall have the right (but not the obligation) to request that MDC Holdco purchase from it (a "Sale Request") all of the Class B Units owned by IMS Holdco; provided, however, the parties hereto agree that IMS Holdco shall not be permitted to exercise a Sale Request if, in the reasonable determination of MDC Holdco's accountants, the purchase by MDC Holdco of IMS Holdco's Class B Units pursuant to this Section 10.2(b) would result in the failure of the "Goodwill Impairment Test" under FASB 142 (or any successor provision) with respect to such purchase. For purposes of this Section 10.2(b), (x) the "Sale Request Condition" shall be: (i) if the applicable Sale Request Period is during calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of (1) FAP divided by the Split Percentage (as defined herein) applicable to FAP, (2) SAP divided by the Split Percentage applicable to SAP, (3) TAP divided by the Split Percentage applicable to TAP and (4) FOAP divided by the Split Percentage applicable to FOAP (as each of FAP, SAP, TAP, FOAP and Split Percentage is defined in the Purchase Agreement) paid or payable as of such date, divided by (II) 90%, (B) the 2010 Growth Payment (as defined in the Purchase Agreement) and (C) $24,000,000; or (ii) if the applicable Sale Request Period is during any calendar year other than calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of the fractions, the numerators of which are each Additional Payment (as defined in the Purchase Agreement) paid or payable in respect of periods prior to such date, and the denominators of which are the Split Percentages applicable to such Additional Payment, divided by (II) 90%, (B) the 2010 Growth Payment and (C) $30,000,000; and (y) the "Sale Request Period" shall be any of: (i) the first calendar quarter of calendar years 2011, 2012, 2013 and 2014 and (ii) the second calendar quarter of calendar year 2015 and any calendar year thereafter.

(ii)          IMS Holdco may make a Sale Request by delivering written notice (a "Sale Request Notice") to MDC Holdco at any time during the applicable Sale Request Period; provided that IMS Holdco may not make more than one Sale Request in any 12-month period.  MDC Holdco shall have thirty (30) days following receipt of the Sale Request Notice to accept IMS Holdco's Sale Request, which acceptance shall be exercised by delivering written notice (a "Sale Request Acceptance Notice") to IMS Holdco within such thirty day period.

(iii)         If such Sale Request Acceptance Notice is delivered (an "Accepted Sale Request"), the Class B Units shall be sold to MDC Holdco in accordance with the provisions set forth in Section 10.4, with the date of delivery of the Sale Request Acceptance Notice being the exercise date.

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(iv)         In the event that MDC Holdco shall not have delivered a Sale Request Acceptance Notice during such thirty (30) day period, then (x) IMS Holdco shall have the right for twelve (12) months to solicit bona-fide offers for a sale of its Class B Units and MDC Holdco's Class A Units to an unaffiliated third party (the "Prospective Purchaser"), (y) upon the receipt of such offer, IMS Holdco shall deliver written notice (a "Third Party Offer Notice") of such offer to MDC Holdco, which notice shall identify the Prospective Purchaser and shall describe the material terms of such offer, and (z) for a period of thirty (30) days after receipt of the Third Party Offer Notice, MDC Holdco shall have the right to deliver a Sale Request Acceptance Notice and (A) if such Sale Request Acceptance Notice is delivered, MDC Holdco shall acquire the Class B Units as described above in this Section 10.2 and no Member shall be permitted to consummate a sale to the Prospective Purchaser or (B) if a Sale Request Acceptance Notice is not delivered, IMS Holdco shall, for a period of one hundred twenty (120) days, be permitted to consummate the sale of its Class B Units to such Prospective Purchaser, and IMS Holdco shall have the right to require MDC Holdco to sell its Class A Units to such Prospective Purchaser on substantially the same terms and conditions (taking into account the economic differences, if any, between Units).

(c)           Termination Call.  Notwithstanding the periods described in Sections 10.2(a) and (b) above, in the event that a Principal shall no longer be an employee of the Company for any reason whatsoever (a "Departing Principal"), then at any time following the effective date of such termination (the "Date of Termination"), MDC Holdco shall have the right, subject to the proviso contained in this Section 10.2(c), to exercise a Call, exercisable by delivery to IMS Holdco of a Call Exercise Notice, in respect of a number of IMS Holdco's Class B Units equal to the number of Class B Units indirectly owned by the Departing Principal; provided, however, MDC Holdco shall not be permitted to exercise a Call under this Section 10.2(c) for a period of 20 days following the Date of Termination (the "Waiting Period") and during such Waiting Period, IMS Holdco and/or the Principals who are in the then-current employ of the Company (the "Remaining Principals"), shall have the right to purchase all of the Departing Principal's equity interests in IMS Holdco as of the Date of Termination upon terms and conditions agreed upon by IMS Holdco and the Principals, so long as notice of such purchase has been delivered in writing to MDC Holdco prior to the expiration of the Waiting Period indicating a binding commitment on behalf of IMS Holdco and/or the Remaining Principals to purchase such equity interests within 60 days following the expiration of the Waiting Period.  In the event such purchase does not occur within such 60-day period, MDC Holdco shall be entitled to exercise a Call pursuant to this Section 10.2(c).

Section 10.3        Binding Obligations Upon Exercise of a Call or an Accepted Sale Request.  Upon the proper delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, IMS Holdco shall be obligated to sell to MDC Holdco, and MDC Holdco shall be obligated to purchase from IMS Holdco, the Units subject to the Call or the Accepted Sale Request, as applicable, pursuant to the terms of this Article X.

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Section 10.4         Purchase Price.

(a)           Calculation/Payment of the Purchase Price for Class B Units. In connection with the exercise of a Call under Section 10.2(a) or Section 10.2(c) or an Accepted Sale Request for Class B Units, MDC Holdco shall calculate and pay in the aggregate to holders of such Units, the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class B Purchase Price"):

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "First Payment") equal to:

           AP  x  {(PBT for YP-1) x  5.0} – {the Reduction Amount}

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(ii)           within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "Second Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP)) x 5.0} – {First Payment} – {the Reduction Amount}

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(iii)          within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the "Final Class B Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP) + (PBT for YP+1)) x AM} – {First Payment + Second Payment} – {the Reduction Amount}

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(b)           If any calculation of the Class B Purchase Price results in an amount which is equal to or less than zero, such Class B Purchase Price payment shall be deemed to be zero and accordingly the seller of the Units pursuant to such Call or Accepted Sale Request shall not be under any obligation to pay such negative amount (expressed as a positive number).

(c)           Other Definitions.

(i)           "AM" shall mean 5.0, and may be increased by one or more of the following:

(x)           by 0.25, if Average Annual PBT Growth Rate is 10% or greater;

(y)           by 0.25, if Average PBT Margin for the Measuring Period (as defined below) is 25% or greater; and

(z)           by 0.50, if within a reasonable period of time prior to the applicable Class B Closing Date, the Principals have indentified successor management of the Company, reasonably satisfactory to the Chief Executive Officer of MDC Partners, and such successor management have agreed to employment terms and protective covenants satisfactory to MDC Holdco.

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(ii)           "Applicable Percentage" or "AP" shall mean (a) the number of Class B Units being sold pursuant to a Call or an Accepted Sale Request, divided by (b) the total number of outstanding Units.

(iii)          "Average Annual PBT Growth Rate" shall mean the result of (x) the sum of (1) (A) PBT for YP+1 less PBT for YP divided by (B) PBT for YP, (2) (A) PBT for YP less PBT for YP-1 divided by (B) PBT for YP-1, and (3) (A) PBT for YP-1 less PBT for YP-2 divided by (B) PBT for YP-2, divided by (y) 3.

(iv)          "Average PBT Margin" shall equal the percentage equivalent of the quotient determined by dividing (a) the total PBT for the Measuring Period, by (b) the total Revenues for the Measuring Period.

(v)           "Direct Billings of Expenses" shall mean any third party costs that are billed to a particular client, excluding any mark-up to such client on such costs.

(vi)          "Measuring Period" shall mean the calendar year or years included in the applicable Class B Purchase Price calculation.

(vii)         "Pass Through of Third Party Costs" shall mean any component of a particular client invoice that is dispersed (or will ultimately be dispersed) directly to a third party (other than independent contractors) in connection with the funding of a service relating to that client's campaign, engagement or business, whether or not such Person acts as an agent or as a principal with respect to such client.

(viii)        "PBT" for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP; provided, however, that for calendar year 2010, 2010 PBT shall mean the sum of (x) the consolidated PBT of IMS Holdco and its subsidiaries, if any, from January 1, 2010 through and including the Effective Date (the "Pre-Closing Period") and (y) the consolidated PBT of the Company and its subsidiaries, if any, as of the Effective Time through and including December 31, 2010 (the "Post-Closing Period"); provided further, however, in making the foregoing determinations:

(1)           neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or any predecessor entity), is the named beneficiary or is otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

(2)           intercompany management fees charged by MDC Holdco or any of its Affiliates (as defined in Section 13.1 hereof) to the Company or any of its subsidiaries, shall not be treated as an expense, unless such fees have been approved by the parties in accordance with this Agreement, and such fees replace an expense that would otherwise be paid by the Company to a third party;

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(3)           any Losses (as defined in Section 7.2 of the Purchase Agreement) of a Purchaser Indemnified Party (as defined in Section 7.2 of the Purchase Agreement) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 of the Purchase Agreement and which are fully assumed by IMS Holdco and/or the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(4)           any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3 of the Purchase Agreement) shall not be treated as an expense;

(5)           there shall be no charge against income for the payment or accrual of any component of any Purchase Price payment pursuant to the Purchase Agreement or any component of any Class B Purchase Price payment;

(6)           the fees and disbursements of the Company's attorneys, accountants and financial advisors incurred prior to or after the Closing (as defined in Section 2.3 of the Purchase Agreement) in connection with the formation and organization of the Company and the negotiation, preparation and execution of the Purchase Agreement and the other documents delivered at such Closing that have either (x) been expensed and paid prior to such Closing or (y) accrued for on the Closing Balance Sheet (as defined in the Purchase Agreement), shall not be treated as an expense;

(7)           the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company's direct or indirect ownership in such subsidiary;

(8)           any extraordinary or unusual gains or losses, gains or losses from the sale of any capital assets, and any gains or losses recognized by the Company or any of its subsidiaries in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries shall be excluded from income;

(9)           the fees and expenses of (1) the Accountants in preparing any Annual Determination and year-end audit, (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder and (3) any preparation of income tax returns, reports and related schedules, in excess of $57,500 in any calendar year, shall not be treated as an expense;

(10)         if the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger of similar transaction (an "Acquired Business") on or after the date of this Agreement, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business unless its inclusion has been agreed to by the Representative (as defined in the Purchase Agreement);

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(11)           any transaction expenses incurred in connection with any potential or contemplated acquisition shall not be included as an expense;

(12)           any write-off or amortization of goodwill or other intangibles arising out of the purchase of the Purchased Units (as defined in the Purchase Agreement) pursuant to the Purchase Agreement shall not be treated as an expense;

(13)           there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price (as defined in the Purchase Agreement) or the Class B Purchase Price under Sections 10.2 and 10.4 of this Agreement;

(14)           the fees and expenses of BDO Seidman LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010 shall not be treated as an expense for the purposes of 2010 PBT;

(15)           any interest costs or transaction fees incurred by the Company or any of its subsidiaries resulting from an MDC Financing shall not be treated as an expense except to the extent incurred by the Company under the MDC Cash Management Program;

(16)           any distribution by IMS Holdco of any Class B Purchase Price proceeds to its members or any employees of the Company pursuant to "phantom equity" documents as disclosed in the Purchase Agreement and in accordance with Section 6.3 of the Purchase Agreement shall not be treated as an expense;

(17)           any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense;

(18)           PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses;

(19)           solely with respect to the calculation of 2010 PBT, an amount equal to $239,404 with respect to expenses incurred during the Pre-Closing Period shall not be treated as an expense;

(20)           for each calendar year in respect of which an Extra Payment (as defined in the Purchase Agreement) is required to be made under the Purchase Agreement, PBT shall be reduced by an amount equal to the Extra Payment made in respect of such calendar year; and

(21)           Notwithstanding anything to the contrary, PBT for calendar year 2009 shall be $9,409,000, without further adjustment.

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(ix)           "Reduction Amount" shall mean (A) with respect to a Call under 10.2(c), an amount equal to (i) (a) in the case of a Call being triggered by the termination of employment of Ingram or Desiree (as each is defined in the Purchase Agreement), 36.5% or (b) in the case of a Call being triggered by the termination of employment of Ron (as defined in the Purchase Agreement), 27% multiplied by (ii) $2,666,667, multiplied by (iii) a fraction, the numerator of which is the number of days in the period commencing on the applicable Date of Termination and ending on December 31, 2012 (such period, with respect to the applicable Call, the "Remaining Period"), and the denominator of which is the number of days in the period commencing as of the Closing Date (as defined in the Purchase Agreement) and ending on December 31, 2012 and (B) with respect to a Call under 10.2(a), an amount equal to zero.

 (x)           "Revenues" during each relevant calendar year of the Measuring Period, shall mean the commissions and fees, mark-ups and hourly charges earned by the Company for work generated or performed by employees or contractors and charged to clients determined in accordance with GAAP; provided, however, that in making such determination, Revenues shall not include any Pass Through of Third Party Costs or Direct Billings of Expenses; provided further, however, that for calendar year 2010, Revenues shall mean the sum of (x) the Revenues earned by IMS Holdco during the Pre-Closing Period and (y) the Revenues earned by the Company and its subsidiaries during the Post-Closing Period.

(xi)           "YP" shall mean the calendar year in which the Call Exercise Notice or the Sale Request Acceptance Notice, as applicable, is delivered.

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

(xiii)         "YP+1" shall mean the calendar year immediately following YP.

(xiv)        "YP-2" shall mean the calendar year immediately preceding YP-1.

(xv)         "Split Percentage" shall mean "Applicable Percentage" as defined in the Purchase Agreement.

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(d)           Accounting Procedures.

(i)            Commencing with calendar year 2010 and for every calendar year thereafter, MDC Holdco shall prepare or, at its discretion, shall cause BDO Seidman LLP or other independent accountant of national standing (the "Accountants") to prepare, in accordance with GAAP, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business on December 31 of each such calendar year, and a related consolidated statement of income of the Company and its subsidiaries, if any, for the relevant calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth for the period under examination the applicable calculation of GAAP PBT and Adjusted GAAP PBT, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4 (the "Annual Determination"); provided, however, upon the exercise of a Call or an Accepted Sale Request pursuant to this Article X, MDC Holdco shall include or, at its discretion, shall cause the Accountants to include, in any Annual Determination with respect to each calendar year during the Measuring Period, (x) the applicable calculations of PBT, Average Annual PBT Growth Rate, Revenues, Average PBT Margin and AM, and (y) all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4.  MDC Holdco shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements and to determine the scope of such audit.  MDC Holdco shall instruct the Accountants to deliver a copy of each Annual Determination to IMS Holdco not later than 120 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of MDC Holdco.

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

(iii)          In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 10.4, then IMS Holdco and MDC Holdco agree to select another mutually acceptable accounting firm to perform the services to be performed under this Section 10.4 by the Independent Auditors.  If IMS Holdco and MDC Holdco fail to select the Independent Auditors as required by clause (i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either IMS Holdco or MDC Holdco may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York. to appoint an independent firm of certified public accountants to perform the services required under this Section 10.4 by the Independent Auditors.  MDC Holdco, on the one hand, and IMS Holdco, on the other hand, shall share the fees of the JAMS equally.  For purposes of this Section 10.4(d) the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this clause (iii).

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

(v)           The books and records of the Company and its subsidiaries shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto and their representatives, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 10.4.  IMS Holdco, on the one hand, and MDC Holdco, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by or for them to support a position that is contrary to the position taken by the other party. Upon the request by IMS Holdco, MDC Holdco shall request that the Accountants make their work papers available to IMS Holdco and its representatives after the completion of any audit of the financial statements of the Company and its subsidiaries and/or to verify the calculations set forth in any Annual Determination (in each case during normal business hours upon reasonable advance notice at the principal offices of the Accountants); provided, however, it is understood that the decision to make such work papers available is solely that of the Accountants.

(e)           Closing.  The closing for each purchase and sale of Units (a "Class B Closing") pursuant to a Call or Accepted Sale Request, as applicable, shall be held at the offices of the Company within 30 days after the delivery of an Exercise Notice or Sale Request Acceptance Notice.  The date on which the respective Class B Closing takes place is referred to in this Agreement as its "Class B Closing Date".  At each Class B Closing, the parties shall execute an Assignment of Unit Agreement in form and substance reasonably acceptable to MDC Holdco and IMS Holdco and an amendment to this Agreement in accordance with Section 14.4 reflecting such transfer and the reallocated Units (including the related portion of the Capital Account).  The transfer of any Units pursuant to this Section 10.4 shall be free and clear of all claims, liens and encumbrances other than as created by the provisions of this Agreement.  Prior to any Class B Closing, the Company and IMS Holdco shall use their best efforts to obtain any required governmental or regulatory approval or approvals.  MDC Holdco shall have the right to postpone any scheduled Class B Closing until any such governmental or regulatory approval is obtained.

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(f)           Class B Purchase Price Payment.  Payment of each component of the Class B Purchase Price shall be made by MDC Holdco in cash by direct wire transfer to such account as IMS Holdco may direct by written notice to the Purchaser given pursuant to this Agreement.  Each component of the Class B Purchase Price shall be deemed to include imputed interest to the extent required by the Code.

(g)           Effect of Events During Period Class B Units Are Issued.  The parties hereto understand and agree that under the terms of each Principal's Employment Agreement with the Company, such Principal may be terminated for "Cause" or "without Cause" (as such terms are defined in the Employment Agreements).  Accordingly, each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any subsidiary of the Company, no party to this Agreement or any Person deriving rights through any such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary of the Company (x) constitutes a breach by MDC Holdco or any of its Affiliates of this Agreement, (y) resulted in an adverse effect on any Class B Purchase Price payment under this Agreement forming the basis for a claim against MDC Holdco or any of its Affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 10.4(d) hereof.  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect the right of IMS Holdco to receive any Class B Purchase Price payment under this Agreement.

(h)           Covenant to Fund.  MDC Partners shall cause sufficient capital to be available to MDC Holdco to meet its obligations to pay the Class B Purchase Price pursuant to Article X of this Agreement.  If MDC Holdco fails to meet its payment obligations under Article X of this Agreement, then MDC Partners shall satisfy such payment obligations to the extent MDC Holdco has failed to do so.

ARTICLE XI

INDEMNIFICATION

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

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

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

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

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Section 11.5         Definitions.  For purposes of this Article XI:

(a)           The term "expenses" includes court costs and attorneys' fees and disbursements;

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

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

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

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

Section 11.7         Nonexclusivity of Rights.  The right to indemnification and the advancement and payment of expenses conferred in this Article XI shall not be exclusive of any other right that a Manager or other Person indemnified pursuant hereto may have or hereafter acquire under any law (common or statutory), provision of the Certificate or this Agreement or otherwise.

ARTICLE XII

ADDITIONAL AGREEMENTS

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

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ARTICLE XIII

OTHER DEFINITIONS

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

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

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

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

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

"Adjusted GAAP PBT" shall mean, for any calendar (or partial) year, GAAP PBT for such calendar year less (A) (i) with respect to calendar year 2010, $666,667 or (ii) with respect to calendar years 2011 or 2012, $1,000,000; plus (B) in the event that a Principal's employment with the Company shall have been terminated prior to December 31, 2012, an amount equal to the result of (x) the total Reduction Amount applicable to any Call able to be made under Section 10.2(c) in respect of such Principal, times (y) a fraction, the numerator of which is the number of days in the Remaining Period occurring during such calendar year and the denominator of which is the total number of days in the Remaining Period.

"Affiliate" of any Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

"Business Day" shall mean any day on which commercial banks are not authorized or required to close in New York, NY.

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

"Cash Flow" shall mean the consolidated amount of cash in respect of any calendar year of the Company and its subsidiaries that the Board of Managers in its good faith discretion believes is available for distribution to Members of the Company; provided, however, with respect to distributions made in respect of calendar years 2010 through 2014, Cash Flow must be at least an amount necessary to satisfy the distribution required pursuant to Section 3.4(a)(i).

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"Class A Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(i) to holders of Class A Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class A Units of GAAP PBT under Section 3.5(a) for such prior years.

"Class B Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class B Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class B Units of GAAP PBT under Section 3.5(a) for such prior years.

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

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

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

"Effective Time" shall mean 12:01a.m. on May 1, 2010.

"GAAP PBT" shall mean, for any calendar (or partial) year, the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP, and in accordance with the procedures applicable to such determination set forth in Section 10.4(d) hereof; provided, however, for calendar year 2010, GAAP PBT shall be calculated from and after the Effective Time through December 31, 2010.

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

(i)           Subject to the final sentence of this definition, the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by reference to Section 3.1(b), and as set forth in Section 8 to the Conveyance Document;

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

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

(iv)         The Gross Asset Value of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (vi) of the definition of Profits and Losses herein; provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the extent the Managers determine that an adjustment pursuant to clause (ii) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to clauses (i), (ii), or (iv) hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.  It is understood that the Gross Asset Values of each of the assets of the Company on the date of execution of this Agreement shall be determined as set forth in Section 8 of the Conveyance Document.

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

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

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

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

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

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

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

"Profits and Losses", shall mean, for each fiscal year, an amount equal to the Company’s taxable income or loss for such fiscal year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

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

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

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

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

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

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

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

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 3.3(e) shall be determined by applying rules analogous to those set forth in clauses (i) through (vii) above.

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

"Units" shall mean Class A Units or Class B Units, as applicable.

ARTICLE XIV

MISCELLANEOUS

Section 14.1         Manner of Giving Notice.  Whenever under the provisions of the Act, the Certificate or this Agreement, notice is required to be given to the Company, any Member or Manager of the Company, and no provision is made as to how such notice shall be given, any such notice to be given hereunder shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next Business Day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to MDC Holdco or MDC Partners, to:

MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

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If to IMS Holdco, to:

c/o BDR Company, LLC

650 Fifth Avenue

New York, New York 10017

Attention: Robert Ingram

with a copy to:

Moses & Singer LLP

405 Lexington Avenue

New York, New York 10174

Attention: Solomon P. Friedman, Esq.

If to the Company, to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

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

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

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

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Section 14.4         Amendment or Modification.  The power to adopt, alter, amend or repeal this Agreement is vested solely in the Members. Except for the amendments contemplated by Sections 2.1 and 10.4(e), and subject to the provisions of Section 4.1, this Agreement may be altered or amended only by the unanimous vote or unanimous written consent of MDC Holdco and IMS Holdco. The Managers may not adopt, alter, amend or repeal any provision of this Agreement.

Section 14.5         Binding Effect.  Subject to the restrictions on transfer and assignment set forth in Article X of this Agreement, this Agreement is binding on and inures to the benefit of the Members and their respective successors and permitted assigns, including without limitation, any Lender who exercises a default remedy under any agreement entered into in connection with an MDC Financing.

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

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

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

Section 14.9         Currency.  Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.  All payments made hereunder shall be made in United States Dollars.

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

MF + P ACQUISITION CO.
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary
INTEGRATED MEDIA SOLUTIONS, LLC
By:	/s/ Robert Ingram
	Name: Robert Ingram
	Title: Chief Executive Officer
INTEGRATED MEDIA SOLUTIONS PARTNERS LLC
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary

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TABLE OF CONTENTS

ARTICLE I
FORMATION OF LIMITED LIABILITY COMPANY
Section 1.1  Formation	2
Section 1.2  Purpose	2
Section 1.3  Offices; Registered Agent	2
Section 1.4  Filings and Foreign Qualification	2
Section 1.5  Term	2
ARTICLE II
MEMBERS; MEMBERSHIP INTERESTS; UNITS
Section 2.1  Members and Membership Units	2
Section 2.2  Classes of Units	3
Section 2.3  Transfer of Units	3
Section 2.4  Additional Members and Membership Interests	3
Section 2.5  Liability of Member	3
Section 2.6  Limitations on Members	3
Section 2.7  Certification of Units	4
ARTICLE III
CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS
Section 3.1  Capital Account; Capital Contributions	4
Section 3.2  Withdrawal and Return of Capital Contribution	5
Section 3.3  Allocation of Profits and Losses	5
Section 3.4  Distributions	9
Section 3.5  Allocation of GAAP PBT	10
ARTICLE IV
MANAGEMENT
Section 4.2  Authority of Managers	14
Section 4.3  Number and Qualifications of Managers	15
Section 4.4  Election and Term of Service	15
Section 4.5  Removal; Filling of Vacancies	15
Section 4.6  Place of Meetings	15
Section 4.7  Annual Meetings	15
Section 4.8  Regular Meetings	15
Section 4.9  Special Meetings	15
Section 4.10  Quorum of and Action by Managers	16
Section 4.11  Approval or Ratification of Acts or Contracts by Members	16
Section 4.12  Action Without A Meeting	16

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Section 4.13  Telephone Meetings	16
Section 4.14  Interested Managers and Officers	16
Section 4.15  Manager's Compensation	17
Section 4.16  Time Devoted to Company	17
Section 4.17  Liability of Managers	17
ARTICLE V
MEETINGS OF MEMBERS
Section 5.1  Annual Meetings	17
Section 5.2  Special Meetings	17
Section 5.3  Place of Meetings	17
Section 5.4  Notice of Meetings	18
Section 5.5  Quorum of and Action by Members	18
Section 5.6  Action Without a Meeting	18
Section 5.7  Telephone Meetings	18
ARTICLE VI
OFFICERS
Section 6.1  Officers	19
ARTICLE VII
ACCOUNTING AND TAX MATTERS; REPORTS; BANKING
Section 7.1  Books and Records	19
Section 7.2  Capital Accounts	19
Section 7.3  Tax Matters Partner	20
Section 7.4  Tax Elections	20
Section 7.5  Bank Accounts; Investment of Company Funds	21
Section 7.6  Signature of Negotiable Instruments	21
ARTICLE VIII
COVENANTS OF THE MEMBERS
Section 8.1  Independent Accountants	21
ARTICLE IX
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 9.1  Dissolution	21
Section 9.2  Liquidation	22
Section 9.3  Termination	22
Section 9.4  Claims of the Members	22

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ARTICLE X
RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS
Section 10.1  Assignment by the Members	23
Section 10.3  Binding Obligations Upon Exercise of a Put or a Call	25
ARTICLE XI
INDEMNIFICATION
Section 11.1  Indemnification of Managers and Members	33
Section 11.2  Others	34
Section 11.3  Insurance and Other Arrangements	34
Section 11.4  Report to Members	34
Section 11.5  Definitions	35
Section 11.6  Severability	35
Section 11.7  Nonexclusivity of Rights	35
ARTICLE XII
ADDITIONAL AGREEMENTS
Section 12.1  Integrated Media Solutions Name	35
ARTICLE XIII
OTHER DEFINITIONS
Section 13.1  Other Definitions	36
ARTICLE XIV
MISCELLANEOUS
Section 14.1  Manner of Giving Notice	40
Section 14.2  Waiver of Notice	41
Section 14.3  No Company Seal	41
Section 14.4  Amendment or Modification	42
Section 14.5  Binding Effect	42
Section 14.6  Governing Law; Severability	42
Section 14.8  Counterparts	42
Section 14.9  Entire Agreement	42
Section 14.9  Entire Agreement	42

iii

INDEX OF DEFINED TERMS

AAA	33
Accepted Sale Request	25
Accountants	32
Acquired Business	30
Act	2
Adjusted Capital Account Deficit	37
Adjusted GAAP PBT	37
Affiliate	38
Agreement	1
AM	27
Annual Determination	32
AP	28
Applicable Percentage	28
Average Annual PBT Growth Rate	28
Average PBT Margin	28
Business	1
Business Day	38
Call	24
Call Exercise Notice	24
Call Period	24
Capital Account	20
Capital Contribution	38
Cash Flow	38
Certificate	2
Class A Distribution Shortfall Amount	38
Class B Closing	34
Class B Closing Date	34
Class B Distribution Shortfall Amount	38
Class B Purchase Price	27
Code	38
Company Minimum Gain	38
Conveyance Document	1
Date of Termination	26
Departing Principal	26
Depreciation	38
Direct Billings of Expenses	28
draw	10
Effective Time	39
Employment Agreements	4
expenses	36

iv

Final Class B Payment	27
First Payment	27
GAAP	20
GAAP PBT	39
Gross Asset Value	39
IMS Holdco	1
Independent Auditors	32
JAMS	33
Lender	14
Loss Account	11
Manager	36
MDC Cash Management Program	14
MDC Financing	14
MDC Holdco	1
MDC Internal Transfer	12
MDC Partners	12
MDC Sale	12
Member	1
Member Nonrecourse Debt	40
Member Nonrecourse Debt Minimum Gain	40
Member Nonrecourse Deductions	40
Members	1
Membership Interest	40
Nonrecourse Deductions	40
Nonrecourse Liability	40
Original Operating Agreement	1
Other Entity	35
Pass Through of Third Party Costs	28
PBT	28
Person	40
proceeding	36
Profits and Losses	40
Prospective Purchaser	26
Purchase Agreement	1
Purchase Consideration Value	5
Purchase Transaction	1

v

Reconciliation Period	32
Reduction Amount	31
Regulatory Allocations	7
Remaining Period	31
Remaining Principals	26
Revenues	31
Sale Request	25
Sale Request Acceptance Notice	25
Sale Request Condition	25
Sale Request Notice	25
Sale Request Period	25
Second Payment	27
serving at the request of the Company	36
Tax Distributions	10
Third Party Offer Notice	26
TMP	21
Treasury Regulations	41
Unit Capital Account	21
Units	41
Waiting Period	26
YP	31
YP+1	31
YP-1	31
YP-2	31

vi

Schedule 2.1

Members and Membership Units

MF + P Acquisition Co.: 750 Class A Units

Integrated Media Solutions, LLC: 250 Class B Units

i

EX-12 8 v183284_ex12.htm

Exhibit 12

Statement of Computation of Ratio of Earnings to Fixed Charges

	Three Months Ended March 31,
	2010			2009
	(000’s)			(000’s)
Earnings:
Income (loss) from continuing operations attributable to MDC Partners Inc.	$	(10,186	)	$	281
Additions:
Income tax expense		249			615
Noncontrolling interest in income of consolidated subsidiaries		968			382
Fixed charges, as shown below		8,302			5,319
Distributions received from equity-method investees		7			—
		9,526			6,316
Subtractions:
Equity in income (loss) of investees		(104	)		93
Noncontrolling interest in earnings of consolidated subsidiaries that have not incurred fixed charges		—			—
		(104	)		93
Earnings as adjusted	$	(556	)	$	6,504
Fixed charges:
Interest on indebtedness, expensed or capitalized		6,377			3,443
Amortization of debt discount and expense and premium on indebtedness, expensed or capitalized		651			318
Interest within rent expense		1,274			1,558
Total fixed charges	$	8,302		$	5,319
Ratio of earnings to fixed charges		N/A			1.22
Fixed charge deficiency		8,858			N/A

EX-31.1 9 v183284_ex31-1.htm

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, Miles S. Nadal, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ MILES S. NADAL
		Miles S. Nadal
		Title: Chairman, Chief Executive Officer and President

EX-31.2 10 v183284_ex31-2.htm

Exhibit 31.2

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, David B. Doft, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ DAVID B. DOFT
		David B. Doft Title: Chief Financial Officer

EX-32.1 11 v183284_ex32-1.htm

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Miles S. Nadal, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010

By:	/s/ MILES S. NADAL
	Miles S. Nadal Title: Chairman, Chief Executive Officer and President

EX-32.2 12 v183284_ex32-2.htm

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David B. Doft, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010
By:	/s/ DAVID B. DOFT
	David B. Doft Title: Chief Financial Officer

EX-99.1 13 v183284_ex99-1.htm

Exhibit 99.1

MDC PARTNERS INC.

SCHEDULE OF CURRENT AND POTENTIAL MARKETING

COMMUNICATIONS COMPANY OWNERSHIP

Company	% Owned at 3/31/10			Year of Initial Investment	Put/Call Options
					2010			Thereafter
					(See Notes)
Consolidated:
Strategic Marketing Services
Allard Johnson Communications Inc.		74.0	%	1992		89.0	%	Note 1
Attention Partners LLC		51.0	%	2009		—		Note 2
Bruce Mau Design Inc.		50.1	%	2004		—
Colle & McVoy, LLC		95.0	%	1999		—		Note 3
Crispin Porter & Bogusky, LLC		100.0	%	2001		—
Company C Communications LLC		90.0	%	2000		—		Note 4
Fearless Progression, LLC		51.0	%	2010		75.0	%	Note 5
Fletcher Martin, LLC		85.0	%	1999		100.0	%	Note 6
Hello Design, LLC		49.0	%	2004		—
henderson bas partnership		65.0	%	2004		100.0	%
HL Group Partners, LLC		65.9	%	2007		—		Note 7
kirshenbaum bond senecal & partners, LLC		100.0	%	2004		—
Mono Advertising, LLC		49.9	%	2004		54.9	%	Note 8
Redscout, LLC		60.0	%	2007		—		Note 9
Skinny NYC, LLC		50.1	%	2008		—		Note 10
Veritas Communications Inc.		64.1	%	1993		78.4	%	Note 11
Vitro Robertson, LLC		77.0	%	2004		—		Note 12
Yamamoto Moss Mackenzie		100.0	%	2000		—
Zig Inc.		76.1	%	2004		88.4	%	Note 13
Zyman Group, LLC		94.1	%	2005		—		Note 14
Performance Marketing Services
Accent Marketing Services, LLC		100.0	%	1999		—
Accumark Communications Inc.		55.0	%	1993		61.7	%	Note 15
Bryan Mills Iradesso Corp.		62.8	%	1989		88.2	%	Note 16
Communifx Partners, LLC		75.0	%	2010				Note 17
Computer Composition of Canada Inc.		100.0	%	1988		—
Northstar Research Partners Inc.		70.0	%	1998		—		Note 18
Onbrand		89.0	%	1992		—
Shout Media LLC		51.0	%	2010
Source Marketing, LLC		83.0	%	1998		—		Note 19
TargetCom, LLC		100.0	%	2000		—		Note 20
Team Holdings LLC		60.0	%	2010				Note 21
Equity Accounted:
Adrenalina, LLC		49.9	%	2007		—		Note 22

Notes

(1) MDC has the right to increase its ownership interest in Allard Johnson Communications Inc. through acquisition of an incremental interest, and the other holders have the right to put to MDC the same incremental interest up to 89% of this entity in 2010 and 100% only upon termination.

(2) Attention Partners LLC is owned by HL Group Partners, LLC. HL Group Partners, LLC has the right to increase its ownership in Attention Partners, LLC through acquisitions of incremental interests, and the other interest holders has the right to put to HL Group Partners, LLC the same incremental interests up to 100% only upon termination.

(3) MDC has the right to increase its economic ownership in Colle & McVoy, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(4) MDC has the right to increase its economic ownership in Company C Communications, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012. Effective October 1, 2008, Company C is operated as a division of kirshenbaum bond & partners, LLC.

(5) MDC has the right to increase its economic ownership in Fearless Progression, LLC through acquisitions of incremental interests, up to 75% of this entity in 2010, and up to 100% in 2011.

(6) Effective January 1, 2010, MDC acquired the remaining 15% membership interest; however, in conjunction with the step-up in Trendcore, which was merged into Fletcher Martin, LLC, a 15% profits interests was issued.

(7) MDC has the right to increase its ownership in HL Group Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 72.4% of this entity in 2012, up to 82.62% in 2013 and up to 93.73% in 2014. Effective January 25, 2010, MDC acquired an additional 1% membership interest in HL Group Partners, LLC.

(8) MDC has the right to increase its ownership in Mono Advertising, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 54.9% of this entity in 2010, up to 60.0% in 2011, up to 65.0% in 2012, up to 70.0% in 2013 and up to 75.0% in 2014.

(9) MDC has the right to increase its ownership in Redscout, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 80% of this entity in 2012.

(10) MDC has the right to increase its ownership in Skinny NYC, LLC through acquisition of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 60.1% of this entity in 2014, up to 70.1% of this entity in 2015 and up to 80.1% of this entity in 2016.

(11) MDC has the right to increase its ownership in Veritas Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 78.4% of this in 2010, up to 81.5% in 2011, up to 95.1% in 2012 and up to 100% in 2013.

(12) MDC has the right to increase its ownership in Vitro Robertson, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 95% of this entity in 2011, up to 97.5% in 2012 and up to 100% in 2013.

(13) MDC has the right to increase its ownership in Zig Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 88.4% of this entity in 2010, and up to 90.45% of this entity in 2012.

(14) As of March 31, 2010, MDC’s economic interest in Zyman Group, LLC was 100% of profits as its priority return is not expected to be exceeded. In January 2009, Zyman Group, LLC has become an operating division of kirshenbaum bond & partners, LLC.

(15) MDC has the right to increase its ownership in Accumark Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up to 61.7% of this entity in 2010, up to 68.3% in 2011 and up to 75.0% in 2012. MDC’s current economic interest is 42%.

(16) MDC has the right to increase its ownership in Bryan Mills Iradesso, Corp. through acquisition of an incremental interest, and the other interest holders have the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(17) MDC has the right to increase its ownership in Communifx Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(18) MDC has the right to increase its ownership in Northstar Research Partners Inc. through acquisitions of incremental interests, and the other holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(19) MDC has the right to increase its ownership in Source Marketing, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up 87.1% of this entity in 2011 and 91.3% in 2012 and 100% in 2013.

(20) Effective January 1, 2009, Targetcom LLC is operating as a division of Accent Marketing Services, LLC.

(21) MDC has the right to increase its ownership in Team Holdings, LLC, through acquisition of an incremental interest,  up to 100% of this entity in 2013.

(22) MDC has the right to increase its ownership in Adrenalina, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 61% of this entity in 2013, up to 72% in 2014 and up to 82% in 2015.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.3.2

Exhibit 10.3.2

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

INTEGRATED MEDIA SOLUTIONS PARTNERS LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") dated May 6, 2010 and effective as of April 30, 2010, is made and entered into by and among INTEGRATED MEDIA SOLUTIONS PARTNERS LLC, a Delaware limited liability company (the "Company"), MF + P ACQUISITION CO., a Delaware corporation ("MDC Holdco"), and INTEGRATED MEDIA SOLUTIONS, LLC, a New York limited liability company ("IMS Holdco", together with MDC Holdco, are collectively referred to as the "Members" and individually a "Member").   Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article XIII.

WHEREAS, IMS Holdco formed the Company as its sole member, owning 100% of the Membership Interests (as defined in Section 13.1 hereof) in the Company, and entered into a Limited Liability Company Agreement of the Company (the "Original Operating Agreement");

WHEREAS, pursuant to a General Assignment, Bill of Sale and Assumption Agreement (the "Conveyance Document"), effective as of April 30, 2010 (the "Effective Date"), a copy of which has been delivered to MDC Holdco, IMS Holdco transferred to the Company substantially all of its assets, subject to certain disclosed liabilities, and its ongoing business (the "Business"), in exchange for 100% of the Membership Interests;

WHEREAS, pursuant to the Membership Unit Purchase Agreement effective as of the Effective Date (the "Purchase Agreement"), IMS Holdco sold, transferred, conveyed and delivered to MDC Holdco 750 Class A Units, representing 100% of the issued and outstanding Class A Units (the "Purchase Transaction"), such that immediately after giving effect to such transfer, the issued and outstanding Units of the Company were as follows: MDC Holdco – 750 Class A Units; IMS Holdco – 250 Class B Units; and

WHEREAS, the Members now desire to enter into this Agreement to supersede the Original Operating Agreement, to provide for the admission of MDC Holdco as a member, and to promote their interests and those of the Company by making provisions in this Agreement to govern their relations as Members;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members and the other parties hereto do hereby agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

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

Section 1.3           Offices; Registered Agent.  The principal place of business of the Company shall be 650 Fifth Avenue, New York, New York, 10017, or such other principal place of business as the Managers (as defined in Section 11.5) may from time to time determine.  The Company may have, in addition to such office, such other offices and places of business at such locations, both within and without the State of Delaware, as the Managers may from time to time determine or the business and affairs of the Company may require.  The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person (as defined in Section 13.1) as the Managers may designate from time to time in the manner provided by law.

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

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

ARTICLE II

MEMBERS; MEMBERSHIP INTERESTS; UNITS

Section 2.1           Members and Membership Units.  The Company is authorized to issue 750 Class A Units and 250 Class B Units, all of which have been issued and are outstanding, and allocated among the Members as set forth on Schedule 2.1.  Upon any change in the Members or Units, including by reason of the issuance of additional Units, the Members agree to complete a revised Schedule 2.1 hereof, which shall be deemed incorporated into this Agreement as part of this Section 2.1.

2

Section 2.2           Classes of Units.

(a)           Class A Units.  The Class A Units shall have the following characteristics: (i) an initial Unit Capital Account (as defined in Section 7.2(e) hereof), (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

(b)           Class B Units. The Class B Units shall have the following characteristics: (i) an initial Unit Capital Account, (ii) provisions relating to transfer as provided in Article X hereof, (iii) entitlement to a share of Profits and Losses as set forth in Section 3.3, (iv) entitlement to distributions as provided in Sections 3.4 and 9.2, and (v) voting rights equal to one (1) vote per Unit.

Section 2.3           Transfer of Units.  In the event a Member sells all or a portion of its Membership Interests in accordance with Article X hereof, then effective as of the date of the sale and subject to compliance with Section 10.1 hereof, such Member shall automatically cease to be a Member in the Company as to such sold Unit.  Upon the acquisition by MDC Holdco of any other Units pursuant to the procedures set forth in Article X hereof, MDC Holdco shall have all of the rights, powers and duties associated with such Units.

Section 2.4           Additional Members and Membership Interests.  Additional Persons may be admitted to the Company as Members and Membership Interests may be created and issued to such Persons on such terms and conditions as the Members shall approve, subject to Section 4.1 hereof.  The terms of admission or issuance may specify the creation of different classes or groups of Members having different rights, powers and duties.  The creation of any new class or group of Members shall be indicated in an amendment to this Agreement in accordance with Section 14.4 hereof and such amendment shall indicate the different rights, powers and duties of the classes or groups of Members.

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

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

3

Section 2.7           Certification of Units. The Company may at its election issue certificates to the Members representing the Units held by such Member. If such election is approved by the Managers, then this Section 2.7 shall apply and not otherwise:

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

(b)           The transfer register or transfer book and blank certificates shall be kept by the secretary of the Company or by any transfer agent or registrar approved by the Managers for that purpose. The certificates shall be numbered and registered in the share or unit register or transfer books of the Company as they are issued. Except to the extent that the Company shall have received written notice of an assignment of any Unit in the Company, the Company shall be entitled to treat the Person in whose name any certificates issued by the Company stand on the books of the Company as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such Unit on the part of any other Person.

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

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

ARTICLE III

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS

Section 3.1           Capital Account; Capital Contributions.

(a)           The Capital Accounts of the Members shall be computed in accordance with Section 7.2 below.  The Members hereby recognize the following to be the factual basis on which the Capital Accounts shall be so computed: (i) prior to the purchase of Class A Units by MDC Holdco from IMS Holdco pursuant to the Purchase Agreement, IMS Holdco made a capital contribution to the Company in an amount equal to the fair market value of the Business, which fair market value the Members agreed was equal to 133.33% of the fair market value of the actual consideration paid by MDC Holdco to IMS Holdco pursuant to the Purchase Agreement (the value of such consideration being the "Purchase Consideration Value"); (ii) pursuant to the Purchase Agreement, MDC Holdco acquired 100% of the Class A Units and 75% of IMS Holdco's former aggregate Capital Account in the Company and accordingly the Capital Account of MDC Holdco equals the Purchase Consideration Value; and (iii) the remaining aggregate Capital Account of IMS Holdco equals 33.33% of the Purchase Consideration Value.

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(b)           The Members agree that for purposes of this Agreement, each of MDC Holdco and IMS Holdco shall be deemed to have made initial Capital Contributions equal to their initial Capital Account balance as set forth in Section 3.1(a) above, and on Schedule A hereto, which shall be adjusted by the Members as soon as the final Purchase Consideration Value has been determined in accordance with the Purchase Agreement.  The Members also agree that the Gross Asset Values (as defined in Section 13.1 below) of all Business assets are to be determined as set forth in Section 8 of the Conveyance Document (as defined in the Purchase Agreement).

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

Section 3.3           Allocation of Profits and Losses.

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

(i)           Profits shall be allocated as follows:

(A) First, to those Members to whom GAAP PBT (as such term is defined in Section 13.1) for such calendar year and each prior calendar year since the Effective Time has been allocated under Section 3.5 until the excess of the cumulative allocations to each such Member of Profits for such calendar years under this Section 3.3(a)(i) over any cumulative allocations to each such Member of Losses under Section 3.3(a)(ii) for such calendar years equals the amount of GAAP PBT so allocated to each such Member during such calendar years; and

(B) Thereafter, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(ii)           Losses shall be allocated as follows:

(A) First, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(B) over Losses allocated under this Section 3.3(a)(ii)(A), 100% to the Members in the proportion in which such excess was allocated;

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(B) Second, to the extent of any excess of Profits allocated under Section 3.3(a)(i)(A) over Losses allocated under this Section 3.3(a)(ii)(B), 100% to the Members in the proportion in which such excess was allocated;

(C) Third, to the Members holding Class A Units and Class B Units pro rata in accordance with the number of such Units held by them.

(b)          In the case of any property contributed to the Company by any Member which at the time of contribution has an adjusted tax basis which differs from its fair market value, items of Profits, Losses, income, gain and deduction for income tax purposes shall be allocated as required under Section 704(c) of the Code to take into account such difference.   The parties agree that such allocations will be made following the traditional method with remedial allocations.

(c)           Notwithstanding anything to the contrary in this Agreement, all items of income attributable to any: (A) change in method of accounting for a taxable period ending on or prior to the Effective Time or a change in method required on account of the transactions contemplated to occur on the Effective Time, whether under Section 481 or otherwise; (B) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local, or foreign income tax law); and (C) installment sale or open transaction disposition made on or prior to the Effective Time, shall be allocated 100% to IMS Holdco.  The Members agree that if the allocation provided for in the preceding sentence cannot be done, the Managers shall cause the Company to allocate items of income, gain, deduction, and loss among the Members to achieve substantially the same results as if such allocation had been done.  In addition, an amount of income equal to any income triggered to MDC Holdco and/or the Company on account of any deemed assumption by either or both of them of any deferred revenue of IMS Holdco as of the Effective Time shall be allocated 100% to IMS Holdco.

(d)           Any item of taxable income, gain, loss or deduction of the Company (as well as any credits or the basis of property to which such credits apply) as determined for federal income tax purposes shall be allocated in the same manner as the corresponding income, gain, loss, or deduction is allocated under Section 3.3(a) (as modified by Section 3(e)).  Allocations pursuant to this Section 3.3(d) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

(e)           Special Allocations and Limitations

(1)           In the event a Member unexpectedly receives in any taxable year any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) which cause or increase an Adjusted Capital Account Deficit (as defined in Section 13.1) of such Member, items of Company income and gain shall be specially allocated to such Member in such taxable year (and, if necessary in subsequent taxable years), in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible.

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(2)           Notwithstanding the provisions of Section 3.3(a), in no event shall Losses of the Company be allocated to a Member if such allocation would result in such Member’s having an Adjusted Capital Account Deficit at the end of any taxable year.  All Losses in excess of the limitation set forth in this Section 3.3(e)(2) shall be allocated to the Members with positive balances in their Capital Accounts, as a class pro rata in proportion to such positive balances.

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

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

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

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

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

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

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

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

(5)           Solely for purposes of determining a Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Members' interests in Company profits are in proportion to their Units, and, for purposes of allocating Nonrecourse Liabilities (as defined in Section 13.1) of the Company among the Members pursuant to Treasury Regulation Section 1.752-3(a)(3), the parties agree that each Member's interest in Company profits shall equal its Units.

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

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(7)           For purposes of determining the character (as ordinary income or capital gain) of any Profits allocated to the Members pursuant to this Section 3, such portion of Profits that is treated as ordinary income attributable to the recapture of depreciation shall, to the extent possible, be allocated among the Members in the proportion which (i) the amount of depreciation previously allocated to each Member bears to (ii) the total of such depreciation allocated to all Members.  This Section 3.3(f)(7) shall not alter the amount of allocations among the Members pursuant to this Section 3, but merely the character of income so allocated.

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

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

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

Section 3.4           Distributions.

(a)           Subject to the making of the Tax Distributions (as defined in clause (b) below), to the extent permitted by the Act, the Company shall distribute Cash Flow (as defined in Section 13.1) of the Company as follows:

(i) first, distributions of Cash Flow generated by the Company in respect of any calendar year, shall be distributed 100% to the holders of the Class A Units in an amount equal to the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class A Distribution Shortfall Amount (as defined in Section 13.1) for such year; and

(ii) thereafter, distributions of Cash Flow generated by the Company in respect of any calendar year shall be distributed to the holders of the Class B Units in an amount no greater than the sum of (a) the allocation to such holders of GAAP PBT under Section 3.5(a) for such calendar year plus (b) the Class B Distribution Shortfall Amount (as defined in Section 13.1) for such year.

Distributions described above shall be made on a quarterly basis, generally in arrears, based upon the financial statements of the Company and its subsidiaries then available to the Managers.

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(b)           Notwithstanding anything in this Agreement to the contrary, in preference to any other distributions pursuant to this Section 3.4, the Members shall cause the Company to distribute cash of the Company to its Members on a quarterly (or other reasonable) basis at least sufficient for each Member to meet such Member's required federal, state and local income tax payments in respect of such Member's distributive share of the Company's taxable income for the current or the prior fiscal year calculated at the maximum individual tax rates for a resident of New York City taking into account the deduction allowable for federal income taxes of any state income taxes (which tax payments shall include (i) estimated tax payments in respect of the current fiscal year and (ii) any remaining payments of income tax on account of the prior fiscal year not funded out of Tax Distributions in respect of estimated payments for such prior fiscal year) (the "Tax Distributions").  For purposes hereof, if a Member is a "pass-through" entity for income tax purposes, the Tax Distributions required hereby shall be made in amounts which are at least sufficient to meet the tax payment requirements of the stockholders or members of such Member in respect of their allocated Profits hereunder. For purposes of Section 3.4(a) hereof, Tax Distributions shall be deemed to be distributions of Cash Flow at the time of such Tax Distribution.

(c)           Any distribution of funds prior to the end of the fiscal year in which such funds came into possession of the Company shall be treated as a non-interest-bearing loan (a "draw") from the Company to each Member receiving such draw and shall be deemed repaid by reducing the amount of each subsequent distribution to the Member receiving such draw pursuant to this Section 3.4(c) by the lesser of (i) the entire amount otherwise distributable to the Member receiving such draw, and (ii) the entire amount of any unrepaid draws pursuant to this Section 3.4(c).

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

Section 3.5           Allocation of GAAP PBT.

(a)           GAAP PBT (as defined in Section 13.1) for purposes of this Agreement shall be allocated for any calendar year as follows:

(i) first, GAAP PBT shall be allocated to the Loss Account (as defined in Section 3.5(b) below) until such Loss Account shall have been brought to zero;

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(ii) next, with respect to calendar years 2010 through 2014, GAAP PBT generated by the Company in such years shall be allocated 100% to the holders of the Class A Units; and

(iii) thereafter, with respect to all calendar years from and after 2015,  GAAP PBT generated by the Company in such year shall be allocated to the Members in accordance with the number of Units held by such Member.

(b)           Allocation of Annual Loss.  In the event that GAAP PBT for any year shall be less than zero, such amount (expressed as a negative) shall be allocated to a loss account (the "Loss Account"), which shall be required to be brought to zero through allocations of future year allocations of GAAP PBT pursuant to Section 3.5(a)(i) before allocations of positive GAAP PBT shall be made to the Members.

ARTICLE IV

MANAGEMENT

Section 4.1           Management of the Company.

(a)           Except to the extent otherwise provided for herein, the powers of the Company shall be exercised by and under the authority of, and the business and affairs of the Company shall be managed under, the direction of the Managers of the Company. Notwithstanding the foregoing or any other provisions hereof to the contrary, until MDC Holdco or one of its Affiliates has purchased and paid for 100% of the Class B Units the taking of any of the actions listed in clauses (i) through (xv)below shall require the mutual agreement of MDC Holdco and IMS Holdco.  The mutual agreement of MDC Holdco and IMS Holdco may be obtained by a vote at a meeting of the Members or by the written consent of MDC Holdco and IMS Holdco.

(i)            a sale, lease or other disposition of all or substantially all or a significant part of the assets or business of the Company or any subsidiary thereof, except in connection with (x) a sale, lease or other disposition of all or substantially all or a significant part of the assets or business or stock (an "MDC Sale") of MDC Partners Inc. ("MDC Partners"); (y) an MDC Financing (as defined in Section 4.1(e) hereof) or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing; or (z) any transfer by MDC Holdco or any of its Affiliates of their respective interest in the Company to another wholly-owned subsidiary of MDC Partners (an "MDC Internal Transfer") (for purposes of this Agreement, in the event of any MDC Internal Transfer, the term MDC Holdco as used in this Agreement shall include any such transferee);

(ii)           a merger, consolidation or amalgamation of the Company or any subsidiary with and into another Person or of another Person with and into the Company or any subsidiary, except in connection with an MDC Sale, an MDC Internal Transfer or an MDC Financing;

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(iii)          the authorization or issuance of additional Class A Units, Class B Units or other equity ownership interests in, or the granting of any other rights to participate in the proceeds of the sale of assets of the Company which are dilutive to IMS Holdco; or the incurring of debt for borrowed money in excess of the amount provided for in the approved annual operating budget or capital expenditure budget, except in connection with borrowings under the terms and conditions of the MDC Cash Management Program (and in compliance with Section 4.1(d) below);

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

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

(vi)          a relocation of the Company's offices from either its current office location at (a) 650 Fifth Avenue, New York, New York or (b) 50 S. Beverly Drive, Beverly Hills, California, at any time while either lease thereon remains in effect under such lease's terms in effect as of the Effective Date, unless such relocation occurs as a result of the failure to obtain the consent of the landlord in connection with the assignment of such lease;

(vii)         the making of any loan to any employee of the Company or any of its subsidiaries other than reasonable travel and business expense advances in the ordinary course and consistent with past practices exceeding $10,000, in the aggregate, at any one time outstanding;

(viii)        any change in the name of the Company;

(ix)           entering into any business other than, or any transaction outside of, the normal business activities of the Company and any of its subsidiaries and related activities other than a MDC Internal Transfer;

(x)           the payment by the Company of any general management fee to any Member or one of such Member's Affiliates;

(xi)           a fundamental change to the nature of the business of the Company and its subsidiaries, taken as a whole;

(xii)          the formation of any subsidiaries of the Company or any of its subsidiaries;

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(xiii)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal (as defined in the Purchase Agreement) is in the active employ of the Company, (x) modify the salary, bonus or other incentive compensation of any employee of the Company or any of its subsidiaries, or (y) adopt or amend any profit sharing or other employee benefit or compensation plan for the Company or any of its subsidiaries; provided, however, this clause (xiii) shall not apply to the employment terms of Robert Ingram, whose employment terms are set forth in his Employment Agreement, or any other individual in the position of Chief Executive Officer of the Company;

(xiv)        except as otherwise may be required by law, and subject to (in all instances) the approved profit plan and operating and capital expenditure budgets of the Company and its subsidiaries, if any, and provided that at least one Principal is in the active employ of the Company, hire, or fire "without cause", any employee of the Company or any of its subsidiaries whose annual salary is less than $200,000, without the consent of the then Chief Executive Officer of the Company (or if there is more than one such Chief Executive Officer, then any of such Chief Executive Officers, it being understood that as of the date of this Agreement Robert Ingram is the Chief Executive Officer of the Company); and

(xv)         the delegation to any Manager or to any committee of the Board of Managers of the Company or any subsidiary or to any officer of the Company or any subsidiary the power to take any of the actions referred to in the foregoing clauses before obtaining the authorization required by this Section 4.1(a).

(b)           As long as this Agreement is in full force and effect, the Company shall keep on file at its principal office a copy of this Agreement. The Company shall make such copy available to any Member during normal business hours and upon reasonable advance written notice.

(c)           As long as this Agreement is in full force and effect, the Company and the Members agree that they shall cause any and all subsidiaries of the Company to comply with the provisions of this Section 4.1 as if such provisions were applicable to such subsidiary.

(d)          The Members hereto further agree that the operations of the Company and its subsidiaries shall be conducted (i) subject to Section 4.1(g) below, to participate in the overall cash management and banking program of MDC Partners (the "MDC Cash Management Program"), and (ii) to comply on a timely basis with the financial reporting and budgeting procedures of MDC Partners as from time to time in effect, which procedures require the approval of an annual operating budget, capital expenditure budget and cash flow projections and require management of operating companies to seek approval prior to material deviations from such budgets.

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(e)           Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the purchase price pursuant to the Purchase Agreement and for other good and valuable consideration, the Members hereby (i) agree that MDC Partners  and/or one or more of its Affiliates, in connection with its or any of its Affiliates’ current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon MDC Holdco's Membership Interests; (x) pledge or grant a security interest in or otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under any Call to, or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders from time to time (as applicable and collectively, the "Lender"); and (z) have the Company and/or its subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an "MDC Financing"); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned to it.

(f)           MDC Partners shall cause sufficient working capital to be made available to the Company as shall be determined by the Board of Managers to be reasonably necessary to execute upon its approved annual operating and capital expenditure budgets, but in no event shall MDC Partners or any of its Affiliates be required to fund losses of the Company or any of its subsidiaries.  Such working capital shall be provided to the Company on terms consistent with the MDC Cash Management Program and accordingly, neither MDC Partners nor any of its Affiliates shall be required to provide working capital in the event that the consolidated cash balance of the Company in the MDC Cash Management Program is negative. The parties hereto further agree that the Company shall hereby adopt, and shall take appropriate steps to cause the employees of the Company to comply with, the Code of Conduct of MDC Partners, as the same may be amended from time to time.

(g)           The Company shall comply with all applicable federal, state and local laws and the Company shall provide reasonable assistance to MDC Partners and its Affiliates in their compliance with all applicable federal, state and local laws, including without limitation, the provisions of the Sarbanes-Oxley Act of 2002, as amended from time to time.

Section 4.2           Authority of Managers.  Unless specifically authorized by a resolution duly adopted by the Managers, no Manager, solely in his capacity as a Manager, shall have the authority or power to act as agent for or on behalf of the Company or any other Manager, to do any act which would be binding on the Company or any other Manager, to incur any expenditures on behalf of or for the Company, or to execute, deliver and perform any agreements, acts, transactions or other matters on behalf of the Company.

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Section 4.3           Number and Qualifications of Managers.  As long as IMS Holdco owns outstanding Units of the Company, there shall be five (5) Managers of the Company of which MDC Holdco shall be entitled to appoint three (3) Managers and IMS Holdco shall be entitled to appoint two (2) Managers (each Manager appointed by IMS Holdco must be a full-time employee of the Company or one of its subsidiaries); thereafter the Managers shall be elected in accordance with Section 4.4.  No decrease in the number of Managers shall have the effect of shortening the term of any incumbent Manager.  None of the Managers need be Members of the Company or residents of the State of Delaware.  The initial designees of MDC Holdco are Gavin Swartzman, Michael Sabatino and David Doft.  The initial designees of IMS Holdco are Robert Ingram and Desiree Du Mont.

Section 4.4           Election and Term of Service.  At any annual meeting of Members held in accordance with this Agreement, the Members may elect Managers to serve until the next succeeding annual meeting.  Subject to Section 4.3, the individuals receiving the greatest number of votes (determined by number of Units cast in favor) shall be the Managers.  Cumulative voting for the election of Managers shall not be permitted.  Each Manager elected shall serve as Manager for the term for which he is elected and until his successor shall have been elected by the Members and qualified or until his earlier death, resignation, retirement, disqualification or removal in accordance with this Agreement.

Section 4.5           Removal; Filling of Vacancies.  As long as IMS Holdco owns outstanding Units of the Company, only MDC Holdco can remove and replace its appointed Managers and only IMS Holdco can remove and replace its appointed Managers.  Following such time, the Members by the required vote as set forth in Section 5.5 shall be entitled to remove any Manager and to elect for the unexpired term of such Manager so removed another individual.  Upon the resignation, retirement or death of any of the Managers of the Company, subject to Section 4.3, the Members by the required vote as set forth in Section 5.5, shall be entitled to elect another Person for the unexpired term of such Manager.

Section 4.6           Place of Meetings.  Meetings of the Managers, annual, regular or special, shall be held in New York, NY, unless otherwise agreed to by the Managers.

Section 4.7           Annual Meetings.  Annual meetings of the Managers, of which no notice shall be required, shall be held at the discretion of the Managers immediately following any annual meeting of Members, at which time any and all business may be transacted.

Section 4.8           Regular Meetings.  The Managers shall notify each of the Members of regular meetings of the Managers, which meetings shall be held at such times and places as may be fixed from time to time by resolution adopted by the Managers.  Except as otherwise provided by statute, any and all business may be transacted at any regular meeting.  The Managers shall be given reasonable notice of the date, time and place of any scheduled regular meeting.

Section 4.9           Special Meetings.  Special meetings of the Managers may be called by any Manager on not less than twenty-four hours’ notice to each Manager, either personally or by mail (overnight service), telegram, telephone, facsimile or similar communication.  Only business within the purpose or purposes described in the notice of special meeting of Managers may be conducted at the meeting.

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Section 4.10         Quorum of and Action by Managers.  At all meetings of the Managers the presence of a majority of the number of Managers fixed by or in the manner provided by this Agreement shall be necessary and sufficient to constitute a quorum for the transaction of business.  Unless otherwise specifically required by law or this Agreement, the act of a majority of Managers present at a meeting at which a quorum is present shall be the act of the Managers; provided that such majority includes the affirmative vote of one MDC Holdco Manager.  If a quorum shall not be present at any meeting of the Managers, the Managers present may adjourn the meeting to another time by giving reasonable notice of the date, time and place of the adjourned meeting to all Managers. At any such adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted at the meeting as originally convened.

Section 4.11         Approval or Ratification of Acts or Contracts by Members.  The Managers, in their discretion, may submit any act or contract for approval or certification at any annual meeting of the Members, or at any special meeting of the Members called for the purpose of considering any such act or contract, and subject to the provisions of Section 4.1(a), any act or contract that shall be approved or ratified by the holders of a majority of the Units entitled to vote thereon or such greater percentage as may be provided by any other applicable provision of this Agreement shall be as valid and binding upon the Company and upon all the Members as if it shall have been approved or ratified by every Member of the Company.

Section 4.12         Action Without a Meeting.  Subject to Section 4.1(a), any action required or permitted to be taken at any meeting of the Managers may be taken without a meeting, with prior notice of such contemplated action to each of the Managers (with no requirement to provide copies to any additional persons described in Section 14.1 or otherwise), and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the minimum number of Managers that would have been required to approve such action at a meeting and the writing or writings are filed with the minutes of proceedings of the Managers.  A telegram or similar transmission by a Manager, or a photographic, pdf, facsimile or similar reproduction of a writing signed by a Manager, shall be regarded as signed by the Manager for purposes of this Section 4.12.

Section 4.13         Telephone Meetings.  Any Manager may participate in any meeting of Managers by using conference telephone or similar communications equipment by means of which all individuals participating in the meeting can hear each other, and participation in a meeting pursuant to this Section shall constitute presence in person at such meeting.

Section 4.14         Interested Managers and Officers.  No contract or transaction between the Company and one or more of its Managers or between the Company and any other Person in which one or more of its Members, Managers or officers are shareholders, partners, members, directors, managers or officers, or have a financial or equity interest, shall be void or voidable solely for this reason, or solely because the Manager is present at or participates in the meeting of the Managers which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (i) all material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the Managers, and the Managers in good faith authorize the contract or transaction by the affirmative vote of a majority of the disinterested Managers, even though the disinterested Managers be less than a quorum; (ii) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the Members entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of a majority of the disinterested holders of Units entitled to vote thereon or such greater percentage as may be provided by any other applicable provision of this Agreement; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified by the Managers or the Members.

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Section 4.15         Manager's Compensation.  No Manager shall be entitled to receive any compensation for attendance at meetings of the Managers or otherwise serving as a Manager. Nothing in this Agreement shall be construed to preclude any Manager from serving the Company in any other capacity and receiving proper compensation therefor.

Section 4.16         Time Devoted to Company.  The Managers shall devote such time to Company business as they deem necessary to manage and supervise the business and affairs of the Company in an efficient manner; but nothing in this Agreement shall preclude the employment of any agent, third party or Affiliate to manage or provide other services with respect to the Company’s assets or business as the Managers shall determine.

Section 4.17         Liability of Managers.  Except as expressly provided under the Act, no Manager shall be liable for the debts, liabilities, contracts or other obligations of the Company; provided, however, that each Manager shall be liable for any debts, liabilities, contracts or other obligations of the Company incurred or agreed to by such Manager without authorization and in violation of Section 4.2 of this Agreement.

ARTICLE V

MEETINGS OF MEMBERS

Section 5.1           Annual Meetings.  An annual meeting of the Members shall not be required, but if called by any Member may be held on such date, at such time and at such place as shall be determined by the Managers and stated in the notice of the meeting, provided that there may be called no more than one such annual meeting in any calendar year.  At such meeting, the Members shall elect the Managers (subject to Section 4.3 above) and transact such other business as may properly be brought before the meeting.

Section 5.2           Special Meetings.  Special meetings of the Members, for any purpose or purposes, unless otherwise prescribed by statute, the Certificate or this Agreement, may be called by any Manager or Member.  Only business within the purpose or purposes described in the notice of special meeting of Members may be conducted at the meeting.

Section 5.3           Place of Meetings.  Meetings of Members shall be held at such places, within or without the State of Delaware, as may from time to time be fixed by the Managers or as shall be specified or fixed in the respective notices or waivers of notice thereof; provided, however, the Members agree that such meetings of Members shall be held in New York, NY, unless otherwise agreed upon by the Members.

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Section 5.4           Notice of Meetings.  Written or printed notice stating the place, day and hour of each meeting of the Members and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than five nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of any Manager or individual calling the meeting, to each Member entitled to vote at the meeting; provided, however, that notice of any meeting shall not be required if all Members not receiving notice waive any and all requirements for giving notice of such meeting of the Members.

Section 5.5           Quorum of and Action by Members.  With respect to any matter, the holders of at least a majority (or such higher percentage as may be required by law or any other provision of this Agreement, including Section 4.1(a) above) of the Units entitled to vote on that matter, present in person or represented by proxy shall constitute a quorum of each meeting of Members for the transaction of business with respect to that matter.  Unless otherwise provided in this Agreement, the Members represented in person or by proxy at a meeting of Members at which a quorum is not present may adjourn the meeting until such time and place as may be determined by a vote of the holders of a majority of the Units represented in person or by proxy at that meeting.  At any such adjourned meeting at which a quorum shall be present or represented, any business may be transacted that might have been transacted at the meeting as originally convened.  Except as otherwise specifically provided in this Agreement (including without limitation, the provisions of Section 4.1(a) hereof) or under applicable law, with respect to any matter the affirmative vote or consent of the holders of a majority of the Units entitled to vote on that matter and represented in person or by proxy at a meeting of Members at which a quorum is present shall be the act of the Members.  Unless otherwise provided in this Agreement, once a quorum is present at a meeting of Members, the Members represented in person or by proxy may conduct such business as may be properly brought before the meeting until it is adjourned, and the subsequent withdrawal from the meeting of any Member or the refusal of any Member represented in person or by proxy to vote shall not affect the presence of a quorum at the meeting.

Section 5.6           Action Without a Meeting.  Any action required by the Act to be taken at any annual or special meeting of Members, or any action which may be taken at any annual or special meeting of Members, may be taken without a meeting, with prior notice of such contemplated action to each of the Members thereof (with no requirement to provide copies to any additional persons described in Section 14.1 or otherwise), and subject to Section 4.1(a), without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the Members holding a majority of all of the Units (or if a higher percentage of Units is required to take action, such higher percentage).  A telegram, telex, cablegram or similar transmission by a Member, or a photographic, photostatic, facsimile or similar reproduction of a writing signed by a Member, shall be regarded as signed by the Member for purposes of this Section 5.6.

Section 5.7           Telephone Meetings.  Subject to the provisions of applicable law and this Agreement regarding notice of meetings, a Member may participate in any meeting by using conference telephone or similar communications equipment by means of which all individuals participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 5.7 shall constitute presence in person at such meeting, except when a Person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.

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ARTICLE VI

OFFICERS

Section 6.1           Officers.  The Managers may designate one or more individuals (who may or may not be Managers) to serve as officers of the Company.  The Company shall have such officers as the Managers may from time to time determine.  Any two or more offices may be held by the same individual.  An officer of the Company shall have the duties and responsibilities consistent with his position and shall perform such duties and responsibilities as shall from time to time be prescribed or delegated to him by the Managers, subject to the terms of any employment agreement with the Company or one of its subsidiaries to which such officer may be a party. The Managers hereby initially designate Robert Ingram as Chief Executive Officer of the Company, Desiree Du Mont as President of the Company, Ron Corvino as President of the Company, Joe Volpe as Chief Operating Officer of the Company, Mitchell Gendel as Vice President and Secretary of the Company,  Michael Sabatino as Vice President and Treasurer of the Company, Gavin Swartzman as Vice President, Development of the Company, Edward Kipperman as Vice President, Taxation of the Company and Doreene Weiner as Director, Treasury Operations of the Company.

ARTICLE VII

ACCOUNTING AND TAX MATTERS; REPORTS; BANKING

Section 7.1           Books and Records.  At all times during the continuance of the Company, the Company shall maintain and cause each of its subsidiaries, if any, to maintain, at their respective principal place of business, separate books of account that shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received and all income derived in connection with the operation of their respective businesses in accordance with United States generally accepted accounting principles, consistently applied from year to year ("GAAP").  Such books of account, together with a copy of this Agreement and of the Certificate, shall at all times be maintained at the principal place of business of the Company, shall be open to inspection and examination at reasonable times by each Member and its duly authorized representative for any purpose reasonably related to such Member's interest as a Member of the Company.

Section 7.2           Capital Accounts.  An individual capital account (the "Capital Account") shall be maintained by the Company for each Member as provided below:

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(a)           Each Member's Capital Contributions when made shall be credited to such Member's Capital Account.  The Capital Account of each Member shall, except as otherwise provided in this Agreement, be (i) credited with the amount of cash and the fair market value of any property contributed to the Company by such Member or its predecessor in interest (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), (ii) credited with the amount of any Profits allocated to such Member or its predecessor in interest for federal income tax purposes, (iii) debited by the amount of any Losses allocated to such Member or its predecessor in interest for federal income tax purposes, (iv) debited by such Member's (or such predecessor's) allocable share of expenditures of the Company not deductible in computing the Company's taxable income and not properly chargeable as capital expenditures, including any nondeductible book amortization of capitalized costs, and (v) debited by the amount of cash or the fair market value of any property distributed to such Member its predecessor in interest (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code).  Immediately prior to any distribution of property by the Company, the Members’ Capital Accounts shall be adjusted, as required by Treasury Regulation 1.704-1(b)(2).

(b)           Any adjustments of basis of Company property provided for under Sections 734 and 743 of the Code and comparable provisions of state law (resulting from an election under Section 754 of the Code or comparable provisions of state law) shall not affect the Capital Accounts of the Members except to the extent required by Treasury Regulation § 1.704-1(b)(2)(iv)(m), and the Members' Capital Accounts shall be debited or credited pursuant to the terms of this Section 7.2 as if no such election had been made.

(c)           It is the intention of the parties that the Capital Account of each Member be kept in the manner required under Treasury Regulation § 1.704-1(b)(2)(iv).

(d)          Capital Accounts shall be adjusted, in a manner consistent with this Section 7.2, to reflect any adjustments in items of Company Profits, Losses, income, gain or deduction that result from amended returns filed by the Company or pursuant to an agreement by the Company with the Internal Revenue Service or a final court decision.

(e)           The "Unit Capital Account" of any Unit owned by a Member shall be equal to the Capital Account of such Member divided by the number of Units owned by such Member.  Upon a transfer of Class B Units pursuant to Article X hereof, an allocable portion of IMS Holdco's Capital Account with respect to such Units shall be transferred to the purchaser of such Units.

Section 7.3           Tax Matters Partner.  The Managers shall appoint one of the Members as the tax matters partner ("TMP") under Section 6231 of the Code, and until the Managers shall appoint another Member, such TMP shall be MDC Holdco.  The TMP shall inform each other Member of all significant tax matters that may come to its attention (including, without limitation, any tax audits of the Company) and shall forward to each other Member copies of all written communications it may receive in that capacity.  Nothing in this Section 7.3 shall limit the ability of any Member to take any action in its individual capacity with respect to tax audit matters that is left to the determination of an individual Member under Sections 6221 through 6233 of the Code or under any similar state or local provision.  The TMP shall be entitled to the indemnification provided by the Company as set forth in Article XI.

Section 7.4           Tax Elections.  The TMP shall make the following elections on behalf of the Company:

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(a)           To elect the fiscal year ending December 31 as the Company's fiscal year;

(b)          To elect the accrual method of accounting and partnership tax treatment;

(c)           To elect under Section 754 of the Code to adjust the basis of the Company's assets pursuant to Sections 734 and 743 of the Code.

(d)           To elect with respect to such other federal, state and local tax matters as the Managers shall determine from time to time.

Section 7.5           Bank Accounts; Investment of Company Funds.  The Managers shall cause one or more accounts to be maintained in the name of the Company in one or more banks, which accounts shall be used for the payment of expenditures incurred in connection with the business of the Company and in which shall be deposited any and all receipts of the Company.  All amounts shall be and remain the property of the Company and shall be received, held and disbursed for the purposes specified in this Agreement.  There shall not be deposited in any of such accounts any funds other than funds belonging to the Company, and no other funds shall in any way be commingled with such funds.  The Managers may invest or cause to be invested the Company funds in any manner which the Managers deem appropriate, in their discretion, and is consistent with prudent business practices.  Notwithstanding anything in this Section 7.5 to the contrary, the Company and/or its subsidiaries shall maintain such accounts and deposit the funds of the Company and its subsidiaries in such manner as may be required or advisable in connection with (i) the MDC Cash Management Program during the Company's participation in the program or (ii) an MDC Financing.

Section 7.6           Signature of Negotiable Instruments.  All bills, notes, checks or other instruments for the payment of money shall be signed or countersigned by such officer, officers, agent or agents, and in such manner, as are permitted by this Agreement and as from time to time may be prescribed by resolution (whether general or special) of the Managers.

ARTICLE VIII

COVENANTS OF THE MEMBERS

Section 8.1           Independent Accountants.  Notwithstanding anything to the contrary in this Agreement, MDC Holdco shall be entitled to appoint the independent public accountants of the Company to audit the Company's financial statements.

ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 9.1           Dissolution.  The Company shall be dissolved upon the first to occur of either of the approval of the Members or the entry of a decree of judicial dissolution under the Act.  As promptly as possible following the occurrence of either of the foregoing events effecting the dissolution of the Company, a Manager of the Company shall execute a statement of intent to dissolve, in such form as shall be prescribed by the Secretary of State of Delaware.

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Section 9.2           Liquidation.  Upon dissolution of the Company, the Members shall appoint a Manager as liquidating trustee, who shall immediately commence to wind up the Company’s affairs; provided, however, that a reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the satisfaction of liabilities to creditors so as to enable the Members to minimize the normal losses attendant upon a liquidation.  After making payment or provision for all debts and liabilities of the Company, if determined to be necessary under the circumstances by the Managers, the Members' Capital Accounts shall be adjusted by debiting or crediting each Member's Capital Account with its respective share of the hypothetical gains or losses resulting from the assumed sale of all remaining assets of the Company for cash at their respective fair market values as of the date of dissolution of the Company in the same manner as gains and losses on actual sales of such properties are allocated under Section 3.3 and Section 3.5 hereof.  The liquidating trustee shall then by payment of cash or property make distributions to the Members in accordance with their respective Capital Accounts.  Any distribution to the Members in liquidation of the Company shall be made by the later of the end of the taxable year in which the liquidation occurs or 90 days after the date of such liquidation.  Notwithstanding any provisions in this Agreement to the contrary, no Member shall be obligated to restore a deficit balance in its Capital Account at any time.  The proceeds of liquidation shall be distributed, as realized, in the manner provided in the Act, subject to the applicable provisions of Section 3.4.  Subject to the immediately following sentence, the Members shall continue to share Profits and Losses during liquidation in the same proportions, as specified in Sections 3.3 and 3.5 hereof, as before liquidation.  Notwithstanding anything to the contrary herein, the Managers shall in their good faith discretion (and in a manner which reflects the economic interests of the Members consistent with the intent of the transactions set forth in this Agreement and the Purchase Agreement) allocate items of income, gain, deduction, and loss for the year of liquidation (and for earlier years if necessary to the extent then possible) so as to give Members positive Capital Account balances, immediately before the distributions provided for in the second preceding sentence, equal to the amount (if any) that would be distributed to Members if distributions were made in accordance with Section 3.4(a) and (b) hereof.  In the event that such Manager is unable to perform in his capacity as liquidating trustee due to bankruptcy, dissolution, death, adjudicated incompetency or any other termination of such Manager as an entity, the liquidating trustee shall be a Person approved by the unanimous vote of the Membership Interests.  With respect to this provision, the term "liquidation" shall have the same meaning as set forth in Treasury Regulation §1.704-1(b)(2)(ii) as in effect at such time, provided that the events specified in Section 10 shall not be deemed a "liquidation".

Section 9.3           Termination.  The Company shall terminate when all of the assets of the Company have been distributed in the manner provided for in this Article IX, and the Certificate shall have been canceled in the manner required by the Act.

Section 9.4           Claims of the Members.  Members and former Members shall look solely to the Company's assets for the return of their Capital Contributions, and if the assets of the Company remaining after payment of or due provision for all debts, liabilities and obligations of the Company are insufficient to return such Capital Contributions, the Members and former Members shall have no recourse against the Company or any other Member.

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ARTICLE X

RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS

Section 10.1         Assignment by the Members.  For so long as IMS Holdco owns Units, no Class A Unit shall be sold or transferred without the consent of IMS Holdco, except in connection with (i) an MDC Sale, (ii) an MDC Internal Transfer, (iii) a sale described in Section 10.2(b) or (iv) an MDC Financing or the exercise of a default remedy under any agreement entered into in connection with an MDC Financing.  Except as set forth in Section 10.2(b), no Class B Unit shall be sold, transferred, assigned, pledged or otherwise disposed of, in whole or in part, without the written consent of MDC Holdco to such transfer, which, in the case of a transfer in connection with a distribution to the direct or indirect members of IMS Holdco or for tax or estate planning purposes, shall not be unreasonably delayed or withheld (but which shall require, without limitation, that such Class B Units so transferred continue to be subject to the applicable Call under Sections 10.2(a) and 10.2(c) hereof).  Any purported transfer by IMS Holdco or other permitted holder of Class B Units of all or any of its Units, any purported assignment by IMS Holdco or other permitted holders of Class B Units of any of its rights under this Agreement, and any purported delegation by IMS Holdco or other permitted holders of Class B Units of any of its duties or obligations under this Agreement (which shall in no way relieve IMS Holdco or such other permitted holder of Class B Units of responsibility for the performance of any such duties and obligations), in contravention of any of the provisions of this Agreement, will be null and void ab initio and of no force and effect.  Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the indirect sale of Units as part of any transaction involving a change of control of MDC Partners or its successors.

Section 10.2         Call Rights of MDC Holdco; Permitted IMS Holdco Liquidity Actions.

(a)           MDC Holdco Call.  At any time during the first calendar quarter of any calendar year commencing with calendar year 2015 (each, a "Call Period"), MDC Holdco shall have the right (but not the obligation) to require IMS Holdco to sell to it (a "Call"), all  of the Class B Units owned by IMS Holdco.  MDC may exercise the Call at any time during the Call Period, and may do so by delivering written notice of exercise (a "Call Exercise Notice") to IMS Holdco during the Call Period.  The purchase and sale of such Units upon the exercise of this Call shall be made in accordance with the provisions set forth in Section 10.4.

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(b)           IMS Holdco Sale Request.

(i)           In the event that MDC Holdco has not yet exercised its Call right pursuant to Section 10.2(a) and the Sale Request Condition (as defined below) has then been met, during any applicable Sale Request Period (as defined below), IMS Holdco shall have the right (but not the obligation) to request that MDC Holdco purchase from it (a "Sale Request") all of the Class B Units owned by IMS Holdco; provided, however, the parties hereto agree that IMS Holdco shall not be permitted to exercise a Sale Request if, in the reasonable determination of MDC Holdco's accountants, the purchase by MDC Holdco of IMS Holdco's Class B Units pursuant to this Section 10.2(b) would result in the failure of the "Goodwill Impairment Test" under FASB 142 (or any successor provision) with respect to such purchase. For purposes of this Section 10.2(b), (x) the "Sale Request Condition" shall be: (i) if the applicable Sale Request Period is during calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of (1) FAP divided by the Split Percentage (as defined herein) applicable to FAP, (2) SAP divided by the Split Percentage applicable to SAP, (3) TAP divided by the Split Percentage applicable to TAP and (4) FOAP divided by the Split Percentage applicable to FOAP (as each of FAP, SAP, TAP, FOAP and Split Percentage is defined in the Purchase Agreement) paid or payable as of such date, divided by (II) 90%, (B) the 2010 Growth Payment (as defined in the Purchase Agreement) and (C) $24,000,000; or (ii) if the applicable Sale Request Period is during any calendar year other than calendar year 2014, that MDC Holdco has received allocations of GAAP PBT under Section 3.5(a) hereof since the Effective Time in an amount equal to at least the sum of (A) the result of (I) the sum of the fractions, the numerators of which are each Additional Payment (as defined in the Purchase Agreement) paid or payable in respect of periods prior to such date, and the denominators of which are the Split Percentages applicable to such Additional Payment, divided by (II) 90%, (B) the 2010 Growth Payment and (C) $30,000,000; and (y) the "Sale Request Period" shall be any of: (i) the first calendar quarter of calendar years 2011, 2012, 2013 and 2014 and (ii) the second calendar quarter of calendar year 2015 and any calendar year thereafter.

(ii)          IMS Holdco may make a Sale Request by delivering written notice (a "Sale Request Notice") to MDC Holdco at any time during the applicable Sale Request Period; provided that IMS Holdco may not make more than one Sale Request in any 12-month period.  MDC Holdco shall have thirty (30) days following receipt of the Sale Request Notice to accept IMS Holdco's Sale Request, which acceptance shall be exercised by delivering written notice (a "Sale Request Acceptance Notice") to IMS Holdco within such thirty day period.

(iii)         If such Sale Request Acceptance Notice is delivered (an "Accepted Sale Request"), the Class B Units shall be sold to MDC Holdco in accordance with the provisions set forth in Section 10.4, with the date of delivery of the Sale Request Acceptance Notice being the exercise date.

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(iv)         In the event that MDC Holdco shall not have delivered a Sale Request Acceptance Notice during such thirty (30) day period, then (x) IMS Holdco shall have the right for twelve (12) months to solicit bona-fide offers for a sale of its Class B Units and MDC Holdco's Class A Units to an unaffiliated third party (the "Prospective Purchaser"), (y) upon the receipt of such offer, IMS Holdco shall deliver written notice (a "Third Party Offer Notice") of such offer to MDC Holdco, which notice shall identify the Prospective Purchaser and shall describe the material terms of such offer, and (z) for a period of thirty (30) days after receipt of the Third Party Offer Notice, MDC Holdco shall have the right to deliver a Sale Request Acceptance Notice and (A) if such Sale Request Acceptance Notice is delivered, MDC Holdco shall acquire the Class B Units as described above in this Section 10.2 and no Member shall be permitted to consummate a sale to the Prospective Purchaser or (B) if a Sale Request Acceptance Notice is not delivered, IMS Holdco shall, for a period of one hundred twenty (120) days, be permitted to consummate the sale of its Class B Units to such Prospective Purchaser, and IMS Holdco shall have the right to require MDC Holdco to sell its Class A Units to such Prospective Purchaser on substantially the same terms and conditions (taking into account the economic differences, if any, between Units).

(c)           Termination Call.  Notwithstanding the periods described in Sections 10.2(a) and (b) above, in the event that a Principal shall no longer be an employee of the Company for any reason whatsoever (a "Departing Principal"), then at any time following the effective date of such termination (the "Date of Termination"), MDC Holdco shall have the right, subject to the proviso contained in this Section 10.2(c), to exercise a Call, exercisable by delivery to IMS Holdco of a Call Exercise Notice, in respect of a number of IMS Holdco's Class B Units equal to the number of Class B Units indirectly owned by the Departing Principal; provided, however, MDC Holdco shall not be permitted to exercise a Call under this Section 10.2(c) for a period of 20 days following the Date of Termination (the "Waiting Period") and during such Waiting Period, IMS Holdco and/or the Principals who are in the then-current employ of the Company (the "Remaining Principals"), shall have the right to purchase all of the Departing Principal's equity interests in IMS Holdco as of the Date of Termination upon terms and conditions agreed upon by IMS Holdco and the Principals, so long as notice of such purchase has been delivered in writing to MDC Holdco prior to the expiration of the Waiting Period indicating a binding commitment on behalf of IMS Holdco and/or the Remaining Principals to purchase such equity interests within 60 days following the expiration of the Waiting Period.  In the event such purchase does not occur within such 60-day period, MDC Holdco shall be entitled to exercise a Call pursuant to this Section 10.2(c).

Section 10.3        Binding Obligations Upon Exercise of a Call or an Accepted Sale Request.  Upon the proper delivery of a Call Exercise Notice or a Sale Request Acceptance Notice, IMS Holdco shall be obligated to sell to MDC Holdco, and MDC Holdco shall be obligated to purchase from IMS Holdco, the Units subject to the Call or the Accepted Sale Request, as applicable, pursuant to the terms of this Article X.

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Section 10.4         Purchase Price.

(a)           Calculation/Payment of the Purchase Price for Class B Units. In connection with the exercise of a Call under Section 10.2(a) or Section 10.2(c) or an Accepted Sale Request for Class B Units, MDC Holdco shall calculate and pay in the aggregate to holders of such Units, the following amounts (collectively, with respect to any such Call or Accepted Sale Request, the "Class B Purchase Price"):

(i)           within 30 calendar days following the determination of PBT for YP-1 becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "First Payment") equal to:

           AP  x  {(PBT for YP-1) x  5.0} – {the Reduction Amount}

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(ii)           within 30 calendar days following the determination of PBT for YP becoming final and binding on the parties hereto, but in no event earlier than the Class B Closing Date, an amount (the "Second Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP)) x 5.0} – {First Payment} – {the Reduction Amount}

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(iii)          within 30 calendar days following the determination of PBT for YP+1 becoming final and binding on the parties hereto, an amount (the "Final Class B Payment") equal to:

AP x {((PBT for YP-1) + (PBT for YP) + (PBT for YP+1)) x AM} – {First Payment + Second Payment} – {the Reduction Amount}

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(b)           If any calculation of the Class B Purchase Price results in an amount which is equal to or less than zero, such Class B Purchase Price payment shall be deemed to be zero and accordingly the seller of the Units pursuant to such Call or Accepted Sale Request shall not be under any obligation to pay such negative amount (expressed as a positive number).

(c)           Other Definitions.

(i)           "AM" shall mean 5.0, and may be increased by one or more of the following:

(x)           by 0.25, if Average Annual PBT Growth Rate is 10% or greater;

(y)           by 0.25, if Average PBT Margin for the Measuring Period (as defined below) is 25% or greater; and

(z)           by 0.50, if within a reasonable period of time prior to the applicable Class B Closing Date, the Principals have indentified successor management of the Company, reasonably satisfactory to the Chief Executive Officer of MDC Partners, and such successor management have agreed to employment terms and protective covenants satisfactory to MDC Holdco.

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(ii)           "Applicable Percentage" or "AP" shall mean (a) the number of Class B Units being sold pursuant to a Call or an Accepted Sale Request, divided by (b) the total number of outstanding Units.

(iii)          "Average Annual PBT Growth Rate" shall mean the result of (x) the sum of (1) (A) PBT for YP+1 less PBT for YP divided by (B) PBT for YP, (2) (A) PBT for YP less PBT for YP-1 divided by (B) PBT for YP-1, and (3) (A) PBT for YP-1 less PBT for YP-2 divided by (B) PBT for YP-2, divided by (y) 3.

(iv)          "Average PBT Margin" shall equal the percentage equivalent of the quotient determined by dividing (a) the total PBT for the Measuring Period, by (b) the total Revenues for the Measuring Period.

(v)           "Direct Billings of Expenses" shall mean any third party costs that are billed to a particular client, excluding any mark-up to such client on such costs.

(vi)          "Measuring Period" shall mean the calendar year or years included in the applicable Class B Purchase Price calculation.

(vii)         "Pass Through of Third Party Costs" shall mean any component of a particular client invoice that is dispersed (or will ultimately be dispersed) directly to a third party (other than independent contractors) in connection with the funding of a service relating to that client's campaign, engagement or business, whether or not such Person acts as an agent or as a principal with respect to such client.

(viii)        "PBT" for any relevant period shall mean the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP; provided, however, that for calendar year 2010, 2010 PBT shall mean the sum of (x) the consolidated PBT of IMS Holdco and its subsidiaries, if any, from January 1, 2010 through and including the Effective Date (the "Pre-Closing Period") and (y) the consolidated PBT of the Company and its subsidiaries, if any, as of the Effective Time through and including December 31, 2010 (the "Post-Closing Period"); provided further, however, in making the foregoing determinations:

(1)           neither the proceeds from nor any dividends or refunds with respect to, nor any increases in the cash surrender value of, any life insurance policy under which the Company, or any subsidiary thereof (or any predecessor entity), is the named beneficiary or is otherwise entitled to recovery, shall be included as income, and the premium expense related to any such life insurance policy shall not be treated as an expense;

(2)           intercompany management fees charged by MDC Holdco or any of its Affiliates (as defined in Section 13.1 hereof) to the Company or any of its subsidiaries, shall not be treated as an expense, unless such fees have been approved by the parties in accordance with this Agreement, and such fees replace an expense that would otherwise be paid by the Company to a third party;

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(3)           any Losses (as defined in Section 7.2 of the Purchase Agreement) of a Purchaser Indemnified Party (as defined in Section 7.2 of the Purchase Agreement) which give rise to an indemnity payment pursuant to the indemnification provisions of Section 7.2 of the Purchase Agreement and which are fully assumed by IMS Holdco and/or the Principals or as to which such Purchaser Indemnified Party has been reimbursed (by offset or otherwise), shall not be treated as an expense, and there shall be excluded from income any amount received by such Purchaser Indemnified Party pursuant thereto;

(4)           any indemnity payments made by a Purchaser Indemnified Party to any Company Indemnified Party (as defined in Section 7.3 of the Purchase Agreement) shall not be treated as an expense;

(5)           there shall be no charge against income for the payment or accrual of any component of any Purchase Price payment pursuant to the Purchase Agreement or any component of any Class B Purchase Price payment;

(6)           the fees and disbursements of the Company's attorneys, accountants and financial advisors incurred prior to or after the Closing (as defined in Section 2.3 of the Purchase Agreement) in connection with the formation and organization of the Company and the negotiation, preparation and execution of the Purchase Agreement and the other documents delivered at such Closing that have either (x) been expensed and paid prior to such Closing or (y) accrued for on the Closing Balance Sheet (as defined in the Purchase Agreement), shall not be treated as an expense;

(7)           the income (loss) of any subsidiary of the Company whose results of operations are required to be consolidated with that of the Company under GAAP shall be included only in proportion to the Company's direct or indirect ownership in such subsidiary;

(8)           any extraordinary or unusual gains or losses, gains or losses from the sale of any capital assets, and any gains or losses recognized by the Company or any of its subsidiaries in connection with the sale or other disposition of any investments by the Company or any of its subsidiaries shall be excluded from income;

(9)           the fees and expenses of (1) the Accountants in preparing any Annual Determination and year-end audit, (2) any audit performed in connection with the Sarbanes-Oxley Act of 2002, as amended or modified from time to time, or any successor statute, and any rules and regulations promulgated thereunder and (3) any preparation of income tax returns, reports and related schedules, in excess of $57,500 in any calendar year, shall not be treated as an expense;

(10)         if the Company or any of its subsidiaries acquires any other Person pursuant to a purchase of assets or stock, merger of similar transaction (an "Acquired Business") on or after the date of this Agreement, the calculation of PBT shall exclude any net profit (loss) derived by the Company and its subsidiaries from the Acquired Business unless its inclusion has been agreed to by the Representative (as defined in the Purchase Agreement);

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(11)           any transaction expenses incurred in connection with any potential or contemplated acquisition shall not be included as an expense;

(12)           any write-off or amortization of goodwill or other intangibles arising out of the purchase of the Purchased Units (as defined in the Purchase Agreement) pursuant to the Purchase Agreement shall not be treated as an expense;

(13)           there shall be no charge for interest incurred on any loan to fund any payment of the Purchase Price (as defined in the Purchase Agreement) or the Class B Purchase Price under Sections 10.2 and 10.4 of this Agreement;

(14)           the fees and expenses of BDO Seidman LLP in preparing the audit for calendar year 2009 and any prior periods to the extent incurred in calendar year 2010 shall not be treated as an expense for the purposes of 2010 PBT;

(15)           any interest costs or transaction fees incurred by the Company or any of its subsidiaries resulting from an MDC Financing shall not be treated as an expense except to the extent incurred by the Company under the MDC Cash Management Program;

(16)           any distribution by IMS Holdco of any Class B Purchase Price proceeds to its members or any employees of the Company pursuant to "phantom equity" documents as disclosed in the Purchase Agreement and in accordance with Section 6.3 of the Purchase Agreement shall not be treated as an expense;

(17)           any salary expenses payable to any individuals hired to replace any of the Principals to the extent such Principals are also receiving severance payments at the time such salary expenses are incurred shall not be treated as an expense;

(18)           PBT shall reflect appropriate fair market compensation levels, including salary and incentive bonuses;

(19)           solely with respect to the calculation of 2010 PBT, an amount equal to $239,404 with respect to expenses incurred during the Pre-Closing Period shall not be treated as an expense;

(20)           for each calendar year in respect of which an Extra Payment (as defined in the Purchase Agreement) is required to be made under the Purchase Agreement, PBT shall be reduced by an amount equal to the Extra Payment made in respect of such calendar year; and

(21)           Notwithstanding anything to the contrary, PBT for calendar year 2009 shall be $9,409,000, without further adjustment.

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(ix)           "Reduction Amount" shall mean (A) with respect to a Call under 10.2(c), an amount equal to (i) (a) in the case of a Call being triggered by the termination of employment of Ingram or Desiree (as each is defined in the Purchase Agreement), 36.5% or (b) in the case of a Call being triggered by the termination of employment of Ron (as defined in the Purchase Agreement), 27% multiplied by (ii) $2,666,667, multiplied by (iii) a fraction, the numerator of which is the number of days in the period commencing on the applicable Date of Termination and ending on December 31, 2012 (such period, with respect to the applicable Call, the "Remaining Period"), and the denominator of which is the number of days in the period commencing as of the Closing Date (as defined in the Purchase Agreement) and ending on December 31, 2012 and (B) with respect to a Call under 10.2(a), an amount equal to zero.

 (x)           "Revenues" during each relevant calendar year of the Measuring Period, shall mean the commissions and fees, mark-ups and hourly charges earned by the Company for work generated or performed by employees or contractors and charged to clients determined in accordance with GAAP; provided, however, that in making such determination, Revenues shall not include any Pass Through of Third Party Costs or Direct Billings of Expenses; provided further, however, that for calendar year 2010, Revenues shall mean the sum of (x) the Revenues earned by IMS Holdco during the Pre-Closing Period and (y) the Revenues earned by the Company and its subsidiaries during the Post-Closing Period.

(xi)           "YP" shall mean the calendar year in which the Call Exercise Notice or the Sale Request Acceptance Notice, as applicable, is delivered.

(xii)          "YP-1" shall mean the calendar year immediately preceding YP.

(xiii)         "YP+1" shall mean the calendar year immediately following YP.

(xiv)        "YP-2" shall mean the calendar year immediately preceding YP-1.

(xv)         "Split Percentage" shall mean "Applicable Percentage" as defined in the Purchase Agreement.

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(d)           Accounting Procedures.

(i)            Commencing with calendar year 2010 and for every calendar year thereafter, MDC Holdco shall prepare or, at its discretion, shall cause BDO Seidman LLP or other independent accountant of national standing (the "Accountants") to prepare, in accordance with GAAP, a report containing a consolidated balance sheet of the Company and its subsidiaries, if any, as of the close of business on December 31 of each such calendar year, and a related consolidated statement of income of the Company and its subsidiaries, if any, for the relevant calendar year then ended, in each case together with a statement based upon such report which (x) states that it was prepared in accordance with this Agreement and (y) sets forth for the period under examination the applicable calculation of GAAP PBT and Adjusted GAAP PBT, and (z) sets forth all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4 (the "Annual Determination"); provided, however, upon the exercise of a Call or an Accepted Sale Request pursuant to this Article X, MDC Holdco shall include or, at its discretion, shall cause the Accountants to include, in any Annual Determination with respect to each calendar year during the Measuring Period, (x) the applicable calculations of PBT, Average Annual PBT Growth Rate, Revenues, Average PBT Margin and AM, and (y) all adjustments required to be made to such audited financial statements in order to make the calculations required under this Section 10.4.  MDC Holdco shall have the option, in its sole discretion, to instruct the Accountants to audit the annual financial statements and to determine the scope of such audit.  MDC Holdco shall instruct the Accountants to deliver a copy of each Annual Determination to IMS Holdco not later than 120 days after the end of the period to which such Annual Determination relates; provided, however, any delay of the Accountants to meet such timetable shall impose no liability on the part of MDC Holdco.

(ii)           If IMS Holdco does not agree that any Annual Determination correctly states the applicable calculations of GAAP PBT, Adjusted GAAP PBT, PBT, Average Annual PBT Growth Rate, Revenues, Average PBT Margin or AM, as the case may be, for the period under examination, IMS Holdco shall promptly (but not later than 30 days after the delivery of such Annual Determination to IMS Holdco) give written notice to MDC Holdco of any exceptions thereto (in reasonable detail describing the nature of the disagreement asserted).  If IMS Holdco and MDC Holdco reconcile their differences, the Annual Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  If IMS Holdco and MDC Holdco are unable to reconcile their differences in writing within 20 days after written notice of exceptions is delivered to IMS Holdco (the "Reconciliation Period"), the items in dispute shall be submitted to a mutually acceptable accounting firm (other than the Accountants) (the "Independent Auditors") for final determination, and the Annual Determination shall be deemed adjusted in accordance with the determination of the Independent Auditors and shall become binding, final and conclusive upon all of the parties hereto and enforceable in a court of law.  The Independent Auditors shall consider only the items in dispute and shall be instructed to act within 20 days (or such longer period as IMS Holdco and MDC Holdco may agree) to resolve all items in dispute.  If IMS Holdco does not give written notice of any exception within 30 days after the delivery of an Annual Determination or if IMS Holdco gives written notification of its acceptance of an Annual Determination prior to the end of such 30 day period, such Annual Determination shall thereupon become binding, final and conclusive upon all the parties hereto and enforceable in a court of law.

(iii)          In the event the Independent Auditors are for any reason unable or unwilling to perform the services required of it under this Section 10.4, then IMS Holdco and MDC Holdco agree to select another mutually acceptable accounting firm to perform the services to be performed under this Section 10.4 by the Independent Auditors.  If IMS Holdco and MDC Holdco fail to select the Independent Auditors as required by clause (i) above within seven days after the expiration of the Reconciliation Period or fail to select another accounting firm within seven days after it is determined that the Independent Auditors will not perform the services required, either IMS Holdco or MDC Holdco may request the Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in New York, New York, or if JAMS is not so located, in the jurisdiction of closest proximity to New York, New York. to appoint an independent firm of certified public accountants to perform the services required under this Section 10.4 by the Independent Auditors.  MDC Holdco, on the one hand, and IMS Holdco, on the other hand, shall share the fees of the JAMS equally.  For purposes of this Section 10.4(d) the term "Independent Auditors" shall include such other accounting firm chosen in accordance with this clause (iii).

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(iv)          The Independent Auditors shall determine the party (i.e., IMS Holdco or MDC Holdco) whose asserted position as to the calculation of GAAP PBT, Adjusted GAAP PBT, PBT, Average Annual PBT Growth Rate, Revenues, Average PBT Margin or AM, as the case may be, for the period under examination before the Independent Auditors is furthest from the determination of GAAP PBT, Adjusted GAAP PBT, PBT, Average Annual PBT Growth Rate, Revenues, Average PBT Margin or AM, as the case may be, by the Independent Auditors, which non-prevailing party shall pay the fees and expenses of the Independent Auditors and shall reimburse the prevailing party for the portion of the fees of the JAMS previously paid by it.

(v)           The books and records of the Company and its subsidiaries shall be made available during normal business hours upon reasonable advance notice at the principal office of the Company, to the parties hereto and their representatives, the Accountants and the Independent Auditors to the extent required to determine the calculations required under Section 10.4.  IMS Holdco, on the one hand, and MDC Holdco, on the other hand, shall make available to the other party and their representatives (including auditors) any back-up materials generated by or for them to support a position that is contrary to the position taken by the other party. Upon the request by IMS Holdco, MDC Holdco shall request that the Accountants make their work papers available to IMS Holdco and its representatives after the completion of any audit of the financial statements of the Company and its subsidiaries and/or to verify the calculations set forth in any Annual Determination (in each case during normal business hours upon reasonable advance notice at the principal offices of the Accountants); provided, however, it is understood that the decision to make such work papers available is solely that of the Accountants.

(e)           Closing.  The closing for each purchase and sale of Units (a "Class B Closing") pursuant to a Call or Accepted Sale Request, as applicable, shall be held at the offices of the Company within 30 days after the delivery of an Exercise Notice or Sale Request Acceptance Notice.  The date on which the respective Class B Closing takes place is referred to in this Agreement as its "Class B Closing Date".  At each Class B Closing, the parties shall execute an Assignment of Unit Agreement in form and substance reasonably acceptable to MDC Holdco and IMS Holdco and an amendment to this Agreement in accordance with Section 14.4 reflecting such transfer and the reallocated Units (including the related portion of the Capital Account).  The transfer of any Units pursuant to this Section 10.4 shall be free and clear of all claims, liens and encumbrances other than as created by the provisions of this Agreement.  Prior to any Class B Closing, the Company and IMS Holdco shall use their best efforts to obtain any required governmental or regulatory approval or approvals.  MDC Holdco shall have the right to postpone any scheduled Class B Closing until any such governmental or regulatory approval is obtained.

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(f)           Class B Purchase Price Payment.  Payment of each component of the Class B Purchase Price shall be made by MDC Holdco in cash by direct wire transfer to such account as IMS Holdco may direct by written notice to the Purchaser given pursuant to this Agreement.  Each component of the Class B Purchase Price shall be deemed to include imputed interest to the extent required by the Code.

(g)           Effect of Events During Period Class B Units Are Issued.  The parties hereto understand and agree that under the terms of each Principal's Employment Agreement with the Company, such Principal may be terminated for "Cause" or "without Cause" (as such terms are defined in the Employment Agreements).  Accordingly, each of the parties hereto agrees that if (a) any Principal ceases to be an employee of the Company, regardless of the reason therefor, or (b) there are changes in the composition of the Board of Managers of the Company or any subsidiary of the Company, no party to this Agreement or any Person deriving rights through any such party shall have the right to make a claim that such cessation of employment or change in the composition of the Board of Managers of the Company or any subsidiary of the Company (x) constitutes a breach by MDC Holdco or any of its Affiliates of this Agreement, (y) resulted in an adverse effect on any Class B Purchase Price payment under this Agreement forming the basis for a claim against MDC Holdco or any of its Affiliates, or (z) constitutes an event forming the basis for such party to dispute any calculation required to be made pursuant to the accounting procedures set forth in Section 10.4(d) hereof.  In the event a Principal ceases to be employed by the Company, regardless of the reason therefor, such event shall not affect the right of IMS Holdco to receive any Class B Purchase Price payment under this Agreement.

(h)           Covenant to Fund.  MDC Partners shall cause sufficient capital to be available to MDC Holdco to meet its obligations to pay the Class B Purchase Price pursuant to Article X of this Agreement.  If MDC Holdco fails to meet its payment obligations under Article X of this Agreement, then MDC Partners shall satisfy such payment obligations to the extent MDC Holdco has failed to do so.

ARTICLE XI

INDEMNIFICATION

Section 11.1         Indemnification of Managers and Members.  The Company shall indemnify and advance expenses to a Person who was or is threatened to be made a named defendant or respondent in a proceeding because the individual is or was a Manager or Member to the fullest extent permitted or authorized by the laws of the State of Delaware as if the Company was a corporation organized under the laws of Delaware.  This indemnification provision shall inure to each of the Managers and Members of the Company, and other Persons serving at the request of the Company (as provided in this Article), and in the event of his or her death shall extend to his or her legal representatives; but such rights shall not be exclusive of any other rights to which he or she may be entitled.

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Section 11.2         Others.  The Company may indemnify and advance expenses to an officer, employee or agent of the Company to the same extent that it is required to indemnify and advance expenses to Managers or Members under this Agreement or by statute.  The Company may indemnify and advance expenses to Persons who are not or were not officers, employees or agents of the Company but who are or were "serving at the request of the Company" (as defined in Section 11.5(d)) as a director, officer, partner, manager, member, venturer, proprietor, trustee, employee, agent or similar functionary of another limited liability company, corporation, partnership, employee benefit plan, or other enterprise or entity (individually, an "Other Entity") to the same extent that the Company is required to indemnify and advance expenses to Managers or Members under this Article or by statute.

Section 11.3         Insurance and Other Arrangements.  The Company may purchase and maintain insurance or establish and maintain another arrangement on behalf of any individual who is or was a Manager, officer, employee, Member or agent of the Company or who is or was serving at the request of the Company as a director, officer, partner, manager, member, venturer, proprietor, trustee, employee, agent or similar functionary of an Other Entity, against or in respect of any liability asserted against him or her and incurred by him or her in such a capacity or arising out of his or her status as such an individual, whether or not the Company would have the power to indemnify him or her against that liability under this Agreement or by statute.  If the insurance or other arrangement is with a Person or entity that is not regularly engaged in the business of providing insurance coverage, the insurance or other arrangement may provide for payment of a liability with respect to which the Company would not have the power to indemnify the Person only if including coverage for the additional liability has been approved by the Members of the Company.  Without limiting the power of the Company to purchase, procure, establish or maintain any kind of insurance or other arrangement, the Company may, for the benefit of persons indemnified by the Company, (a) create a trust fund; (b) establish any form of self-insurance; (c) secure its indemnity obligation by grant of a security interest or other lien on the assets of the Company; or (d) establish a letter of credit, guaranty or surety arrangement.  The insurance or other arrangement may be purchased, procured, maintained or established within the Company or with any insurer or other Person deemed appropriate by the Managers regardless of whether all or part of the stock or other securities of the insurer or other Person are owned in whole or part by the Company.  In the absence of fraud, the judgment of the Managers as to the terms and conditions of the insurance or other arrangement and the identity of the insurer or other Person participating in an arrangement shall be conclusive and the insurance or arrangement shall not be voidable and shall not subject the Managers approving the insurance or arrangement to liability, on any ground, regardless of whether Managers participating in the approval are beneficiaries of the insurance or arrangement.

Section 11.4         Report to Members.  Any indemnification of or advance of expenses to a Manager or Member in accordance with this Article or the provisions of any statute shall be reported in writing to the Members with or before the notice or waiver of notice of the next Members' meeting or with or before the next submission to the Members of a consent to action without a meeting and, in any case, within the 12-month period immediately following the date of the indemnification or advance.

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Section 11.5         Definitions.  For purposes of this Article XI:

(a)           The term "expenses" includes court costs and attorneys' fees and disbursements;

(b)           The term "proceeding" means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, any appeal in such an action, suit or proceeding, and any inquiry or investigation that could lead to such an action, suit or proceeding;

(c)           The term "Manager" means any Person who is or was a Manager of the Company and any Person who, while a Manager of the Company, is or was serving at the request of the Company as a director, officer, partner, manager, member, venturer, proprietor, trustee, employee, agent or similar functionary of an Other Entity;

(d)          The term "serving at the request of the Company" as used above shall include any service as a manager, director, officer, employee or agent of the Company or where any such Person performs duties on or otherwise involves services with respect to an employee benefit plan, or the participants or beneficiaries of the employee benefit plan sponsored by the Company.  Excise taxes assessed on a Manager with respect to an employee benefit plan pursuant to applicable law are deemed fines.  Action taken or omitted to be taken by a Manager with respect to an employee benefit plan in the performance of his or her duties for a purpose reasonably believed by him or her to be in the interest of the participants and beneficiaries of the plan is deemed to be for a purpose which is not opposed to the best interests of the Company.

Section 11.6         Severability.  The provisions of this Article are intended to comply with the Act.  To the extent that any provision of this Article authorizes or requires indemnification or the advancement of expenses contrary to such statute or the Certificate, the Company's power to indemnify or advance expenses under such provision shall be limited to that permitted by such statute and the Certificate and any limitation required by such statute or the Certificate shall not affect the validity of any other provision of this Article XI.

Section 11.7         Nonexclusivity of Rights.  The right to indemnification and the advancement and payment of expenses conferred in this Article XI shall not be exclusive of any other right that a Manager or other Person indemnified pursuant hereto may have or hereafter acquire under any law (common or statutory), provision of the Certificate or this Agreement or otherwise.

ARTICLE XII

ADDITIONAL AGREEMENTS

Section 12.1         "Integrated Media Solutions" Name.   The Members hereby agree that (a) all right, title and interest in the trade name "Integrated Media Solutions" or any variation thereof belong to the Company and (b) so long as the Company is an Affiliate of MDC Partners, the Company, the Members and the Principals shall endeavor to have any materials, documents or other items that reference the name "Integrated Media Solutions" or any variations thereof to be followed by the words "an MDC Partners Company".

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ARTICLE XIII

OTHER DEFINITIONS

Section 13.1  Other Definitions.  When used herein, the following terms shall have the following meanings:

"Adjusted Capital Account Deficit" with respect to any Member means the deficit balance, if any, in such Member's Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:

(i)           Credit to such Capital Account any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or is otherwise treated as being obligated to restore under Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to the penultimate sentence of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(ii)          Debit to such Capital Account the items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

"Adjusted GAAP PBT" shall mean, for any calendar (or partial) year, GAAP PBT for such calendar year less (A) (i) with respect to calendar year 2010, $666,667 or (ii) with respect to calendar years 2011 or 2012, $1,000,000; plus (B) in the event that a Principal's employment with the Company shall have been terminated prior to December 31, 2012, an amount equal to the result of (x) the total Reduction Amount applicable to any Call able to be made under Section 10.2(c) in respect of such Principal, times (y) a fraction, the numerator of which is the number of days in the Remaining Period occurring during such calendar year and the denominator of which is the total number of days in the Remaining Period.

"Affiliate" of any Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person.

"Business Day" shall mean any day on which commercial banks are not authorized or required to close in New York, NY.

"Capital Contribution" shall mean the contribution of a Member and any subsequent contributions of capital made by that Member to the Company as set forth in Article III.

"Cash Flow" shall mean the consolidated amount of cash in respect of any calendar year of the Company and its subsidiaries that the Board of Managers in its good faith discretion believes is available for distribution to Members of the Company; provided, however, with respect to distributions made in respect of calendar years 2010 through 2014, Cash Flow must be at least an amount necessary to satisfy the distribution required pursuant to Section 3.4(a)(i).

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"Class A Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(i) to holders of Class A Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class A Units of GAAP PBT under Section 3.5(a) for such prior years.

"Class B Distribution Shortfall Amount" with respect to any calendar year, shall mean the cumulative amount by which distributions under Section 3.4(a)(ii) to holders of Class B Units for all preceding calendar years since the Effective Time fell short of the cumulative allocations to holders of Class B Units of GAAP PBT under Section 3.5(a) for such prior years.

"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor statute or statutes.

"Company Minimum Gain" shall have the meaning for "Partnership Minimum Gain" set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.

"Depreciation" shall mean for each fiscal year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such fiscal year, except that if the Gross Asset Value of an asset differs from its adjusted basis for Federal income tax purposes at the beginning of such fiscal year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the Federal income tax depreciation, amortization, or other cost recovery deduction for such fiscal year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for Federal income tax purposes of an asset at the beginning of such fiscal year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the TMP.

"Effective Time" shall mean 12:01a.m. on May 1, 2010.

"GAAP PBT" shall mean, for any calendar (or partial) year, the consolidated net income (loss) of the Company and its subsidiaries (if any) before provision for all federal, state and local income taxes for such period, determined in accordance with GAAP, and in accordance with the procedures applicable to such determination set forth in Section 10.4(d) hereof; provided, however, for calendar year 2010, GAAP PBT shall be calculated from and after the Effective Time through December 31, 2010.

"Gross Asset Value", with respect to any asset, the asset’s adjusted basis for Federal income tax purposes, except as follows:

(i)           Subject to the final sentence of this definition, the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by reference to Section 3.1(b), and as set forth in Section 8 to the Conveyance Document;

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(ii)           The Gross Asset Value of all Company assets shall be adjusted to equal their respective gross fair market values as of the following times: (a) the acquisition of additional Units by any new or existing Member in exchange for a Capital Contribution or in connection with the grant of an interest in the Company as consideration for the provision of services to or for the benefit of the Company by an existing Member of a new Member; (b) the distribution by the Company to a Member of property as consideration for a Unit; and (c) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (a) and (b) above shall be made only if the Managers reasonably determine that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company;

(iii)          The Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross fair market value of such asset on the date of distribution; and

(iv)         The Gross Asset Value of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and clause (vi) of the definition of Profits and Losses herein; provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the extent the Managers determine that an adjustment pursuant to clause (ii) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to clauses (i), (ii), or (iv) hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.  It is understood that the Gross Asset Values of each of the assets of the Company on the date of execution of this Agreement shall be determined as set forth in Section 8 of the Conveyance Document.

"Member Nonrecourse Debt" shall have the meaning for "Partner Nonrecourse Debt" set forth in Section 1.704-2(b)(4) of the Treasury Regulations.

"Member Nonrecourse Debt Minimum Gain" shall mean an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Treasury Regulations.

"Member Nonrecourse Deductions" shall have the meaning set forth in Section 1.704-2(i)(2) of the Treasury Regulations.

38

"Membership Interest" of any Member shall mean such Member's interest in the Company under this Agreement (including, without limitation, such Member's interest in Profits and Losses, distributions, voting, and management, all as specified in this Agreement).

"Nonrecourse Deductions" shall have the meaning set forth in Section 1.704-2(b)(1) of the Treasury Regulations.

"Nonrecourse Liability" shall have the meaning set forth in Section 1.704-2(b)(3) of the Treasury Regulations.

"Person" shall mean an individual, partnership, limited partnership, limited liability company, trust, estate, corporation, custodian, trustee, executor, administrator, nominee or entity in a representative capacity.

"Profits and Losses", shall mean, for each fiscal year, an amount equal to the Company’s taxable income or loss for such fiscal year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

(i)            Any income of the Company that is exempt from Federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss;

(ii)           Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations, and not otherwise taken into account in computing Profits or Losses pursuant to this definition, shall be subtracted from such taxable income or loss;

(iii)          In the event the Gross Asset Value of any Company asset is adjusted pursuant to clauses (ii) or (iii) of the definition of "Gross Asset Value" herein, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses;

(iv)          Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for Federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(v)           In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account depreciation for such fiscal year or other period, computed in accordance with the definition thereof;

39

(vi)          To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s Units, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for the purposes of computing Profits or Losses; and

(vii)         Notwithstanding any other provisions of this definition, any items which are specially allocated pursuant to Section 3.3(d) shall not be taken into account in computing Profits or Losses.

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 3.3(e) shall be determined by applying rules analogous to those set forth in clauses (i) through (vii) above.

"Treasury Regulations" shall mean final regulations issued by the Department of the Treasury interpreting the Code.

"Units" shall mean Class A Units or Class B Units, as applicable.

ARTICLE XIV

MISCELLANEOUS

Section 14.1         Manner of Giving Notice.  Whenever under the provisions of the Act, the Certificate or this Agreement, notice is required to be given to the Company, any Member or Manager of the Company, and no provision is made as to how such notice shall be given, any such notice to be given hereunder shall be in writing and shall be deemed to have been given (a) upon personal delivery, if delivered by hand or courier, (b) three days after the date of deposit in the mails, postage prepaid, or (c) the next Business Day if sent by a prepaid overnight courier service, and in each case at the respective addresses set forth below or such other address as such party may have fixed by notice:

If to MDC Holdco or MDC Partners, to:

MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

40

If to IMS Holdco, to:

c/o BDR Company, LLC

650 Fifth Avenue

New York, New York 10017

Attention: Robert Ingram

with a copy to:

Moses & Singer LLP

405 Lexington Avenue

New York, New York 10174

Attention: Solomon P. Friedman, Esq.

If to the Company, to:

c/o MDC Partners Inc.

45 Hazelton Avenue

Toronto, Ontario

Canada M5R 2E3

Attention:

with a copy to:

MDC Partners Inc.

950 Third Avenue

New York, NY 10022

Attn:  Mitchell Gendel, General Counsel

or to such other address as hereafter shall be designated in writing by the applicable party sent in accordance herewith or in the records of the Company.

Section 14.2         Waiver of Notice.  Whenever any notice is required to be given to any Member or Manager of the Company under the provisions of the Act, the Certificate or this Agreement, a waiver thereof in writing signed by the Person or Persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

Section 14.3         No Company Seal.  The Company shall not have a Company seal, and no agreement, instrument or other document executed on behalf of the Company that would otherwise be valid and binding on the Company shall be invalid or not binding on the Company solely because no Company seal is affixed thereto.

41

Section 14.4         Amendment or Modification.  The power to adopt, alter, amend or repeal this Agreement is vested solely in the Members. Except for the amendments contemplated by Sections 2.1 and 10.4(e), and subject to the provisions of Section 4.1, this Agreement may be altered or amended only by the unanimous vote or unanimous written consent of MDC Holdco and IMS Holdco. The Managers may not adopt, alter, amend or repeal any provision of this Agreement.

Section 14.5         Binding Effect.  Subject to the restrictions on transfer and assignment set forth in Article X of this Agreement, this Agreement is binding on and inures to the benefit of the Members and their respective successors and permitted assigns, including without limitation, any Lender who exercises a default remedy under any agreement entered into in connection with an MDC Financing.

Section 14.6         Governing Law; Severability.  This Agreement is governed by and shall be construed in accordance with the law of the State of Delaware without regard to the principles of conflict of laws thereof.  In the event of a direct conflict between the provisions of this Agreement and any provision in the Certificate or any mandatory provision of the Act, the applicable provisions of the Certificate or the Act shall control.  If any provision of this Agreement or the application thereof to any Person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of that provision to other Persons or circumstances is not affected thereby and that provision shall be enforced to the greatest extent permitted by law.

Section 14.7         Counterparts.  This Agreement may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement.

Section 14.8         Entire Agreement.  This Agreement, including the other documents referred to herein and the Exhibits and Schedules hereto that form a part hereof, contains the entire understanding of the parties hereto with respect to the subject matter contained herein and therein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter, including without limitation, the Original Operating Agreement.

Section 14.9         Currency.  Whenever used in this Agreement, the terms "Dollars" and "$" mean United States Dollars.  All payments made hereunder shall be made in United States Dollars.

42

IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated Limited Liability Company Agreement as of the day and year first above written.

MF + P ACQUISITION CO.
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary
INTEGRATED MEDIA SOLUTIONS, LLC
By:	/s/ Robert Ingram
	Name: Robert Ingram
	Title: Chief Executive Officer
INTEGRATED MEDIA SOLUTIONS PARTNERS LLC
By:	/s/ Mitchell Gendel
	Name: Mitchell Gendel
	Title: Vice President and Secretary

43

TABLE OF CONTENTS

ARTICLE I
FORMATION OF LIMITED LIABILITY COMPANY
Section 1.1  Formation	2
Section 1.2  Purpose	2
Section 1.3  Offices; Registered Agent	2
Section 1.4  Filings and Foreign Qualification	2
Section 1.5  Term	2
ARTICLE II
MEMBERS; MEMBERSHIP INTERESTS; UNITS
Section 2.1  Members and Membership Units	2
Section 2.2  Classes of Units	3
Section 2.3  Transfer of Units	3
Section 2.4  Additional Members and Membership Interests	3
Section 2.5  Liability of Member	3
Section 2.6  Limitations on Members	3
Section 2.7  Certification of Units	4
ARTICLE III
CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS
Section 3.1  Capital Account; Capital Contributions	4
Section 3.2  Withdrawal and Return of Capital Contribution	5
Section 3.3  Allocation of Profits and Losses	5
Section 3.4  Distributions	9
Section 3.5  Allocation of GAAP PBT	10
ARTICLE IV
MANAGEMENT
Section 4.2  Authority of Managers	14
Section 4.3  Number and Qualifications of Managers	15
Section 4.4  Election and Term of Service	15
Section 4.5  Removal; Filling of Vacancies	15
Section 4.6  Place of Meetings	15
Section 4.7  Annual Meetings	15
Section 4.8  Regular Meetings	15
Section 4.9  Special Meetings	15
Section 4.10  Quorum of and Action by Managers	16
Section 4.11  Approval or Ratification of Acts or Contracts by Members	16
Section 4.12  Action Without A Meeting	16

i

Section 4.13  Telephone Meetings	16
Section 4.14  Interested Managers and Officers	16
Section 4.15  Manager's Compensation	17
Section 4.16  Time Devoted to Company	17
Section 4.17  Liability of Managers	17
ARTICLE V
MEETINGS OF MEMBERS
Section 5.1  Annual Meetings	17
Section 5.2  Special Meetings	17
Section 5.3  Place of Meetings	17
Section 5.4  Notice of Meetings	18
Section 5.5  Quorum of and Action by Members	18
Section 5.6  Action Without a Meeting	18
Section 5.7  Telephone Meetings	18
ARTICLE VI
OFFICERS
Section 6.1  Officers	19
ARTICLE VII
ACCOUNTING AND TAX MATTERS; REPORTS; BANKING
Section 7.1  Books and Records	19
Section 7.2  Capital Accounts	19
Section 7.3  Tax Matters Partner	20
Section 7.4  Tax Elections	20
Section 7.5  Bank Accounts; Investment of Company Funds	21
Section 7.6  Signature of Negotiable Instruments	21
ARTICLE VIII
COVENANTS OF THE MEMBERS
Section 8.1  Independent Accountants	21
ARTICLE IX
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 9.1  Dissolution	21
Section 9.2  Liquidation	22
Section 9.3  Termination	22
Section 9.4  Claims of the Members	22

ii

ARTICLE X
RESTRICTIONS ON TRANSFERS; LIQUIDITY RIGHTS
Section 10.1  Assignment by the Members	23
Section 10.3  Binding Obligations Upon Exercise of a Put or a Call	25
ARTICLE XI
INDEMNIFICATION
Section 11.1  Indemnification of Managers and Members	33
Section 11.2  Others	34
Section 11.3  Insurance and Other Arrangements	34
Section 11.4  Report to Members	34
Section 11.5  Definitions	35
Section 11.6  Severability	35
Section 11.7  Nonexclusivity of Rights	35
ARTICLE XII
ADDITIONAL AGREEMENTS
Section 12.1  Integrated Media Solutions Name	35
ARTICLE XIII
OTHER DEFINITIONS
Section 13.1  Other Definitions	36
ARTICLE XIV
MISCELLANEOUS
Section 14.1  Manner of Giving Notice	40
Section 14.2  Waiver of Notice	41
Section 14.3  No Company Seal	41
Section 14.4  Amendment or Modification	42
Section 14.5  Binding Effect	42
Section 14.6  Governing Law; Severability	42
Section 14.8  Counterparts	42
Section 14.9  Entire Agreement	42
Section 14.9  Entire Agreement	42

iii

INDEX OF DEFINED TERMS

AAA	33
Accepted Sale Request	25
Accountants	32
Acquired Business	30
Act	2
Adjusted Capital Account Deficit	37
Adjusted GAAP PBT	37
Affiliate	38
Agreement	1
AM	27
Annual Determination	32
AP	28
Applicable Percentage	28
Average Annual PBT Growth Rate	28
Average PBT Margin	28
Business	1
Business Day	38
Call	24
Call Exercise Notice	24
Call Period	24
Capital Account	20
Capital Contribution	38
Cash Flow	38
Certificate	2
Class A Distribution Shortfall Amount	38
Class B Closing	34
Class B Closing Date	34
Class B Distribution Shortfall Amount	38
Class B Purchase Price	27
Code	38
Company Minimum Gain	38
Conveyance Document	1
Date of Termination	26
Departing Principal	26
Depreciation	38
Direct Billings of Expenses	28
draw	10
Effective Time	39
Employment Agreements	4
expenses	36

iv

Final Class B Payment	27
First Payment	27
GAAP	20
GAAP PBT	39
Gross Asset Value	39
IMS Holdco	1
Independent Auditors	32
JAMS	33
Lender	14
Loss Account	11
Manager	36
MDC Cash Management Program	14
MDC Financing	14
MDC Holdco	1
MDC Internal Transfer	12
MDC Partners	12
MDC Sale	12
Member	1
Member Nonrecourse Debt	40
Member Nonrecourse Debt Minimum Gain	40
Member Nonrecourse Deductions	40
Members	1
Membership Interest	40
Nonrecourse Deductions	40
Nonrecourse Liability	40
Original Operating Agreement	1
Other Entity	35
Pass Through of Third Party Costs	28
PBT	28
Person	40
proceeding	36
Profits and Losses	40
Prospective Purchaser	26
Purchase Agreement	1
Purchase Consideration Value	5
Purchase Transaction	1

v

Reconciliation Period	32
Reduction Amount	31
Regulatory Allocations	7
Remaining Period	31
Remaining Principals	26
Revenues	31
Sale Request	25
Sale Request Acceptance Notice	25
Sale Request Condition	25
Sale Request Notice	25
Sale Request Period	25
Second Payment	27
serving at the request of the Company	36
Tax Distributions	10
Third Party Offer Notice	26
TMP	21
Treasury Regulations	41
Unit Capital Account	21
Units	41
Waiting Period	26
YP	31
YP+1	31
YP-1	31
YP-2	31

vi

Schedule 2.1

Members and Membership Units

MF + P Acquisition Co.: 750 Class A Units

Integrated Media Solutions, LLC: 250 Class B Units

i

EX-12 8 v183284_ex12.htm

Exhibit 12

Statement of Computation of Ratio of Earnings to Fixed Charges

	Three Months Ended March 31,
	2010			2009
	(000’s)			(000’s)
Earnings:
Income (loss) from continuing operations attributable to MDC Partners Inc.	$	(10,186	)	$	281
Additions:
Income tax expense		249			615
Noncontrolling interest in income of consolidated subsidiaries		968			382
Fixed charges, as shown below		8,302			5,319
Distributions received from equity-method investees		7			—
		9,526			6,316
Subtractions:
Equity in income (loss) of investees		(104	)		93
Noncontrolling interest in earnings of consolidated subsidiaries that have not incurred fixed charges		—			—
		(104	)		93
Earnings as adjusted	$	(556	)	$	6,504
Fixed charges:
Interest on indebtedness, expensed or capitalized		6,377			3,443
Amortization of debt discount and expense and premium on indebtedness, expensed or capitalized		651			318
Interest within rent expense		1,274			1,558
Total fixed charges	$	8,302		$	5,319
Ratio of earnings to fixed charges		N/A			1.22
Fixed charge deficiency		8,858			N/A

EX-31.1 9 v183284_ex31-1.htm

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, Miles S. Nadal, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ MILES S. NADAL
		Miles S. Nadal
		Title: Chairman, Chief Executive Officer and President

EX-31.2 10 v183284_ex31-2.htm

Exhibit 31.2

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, David B. Doft, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ DAVID B. DOFT
		David B. Doft Title: Chief Financial Officer

EX-32.1 11 v183284_ex32-1.htm

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Miles S. Nadal, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010

By:	/s/ MILES S. NADAL
	Miles S. Nadal Title: Chairman, Chief Executive Officer and President

EX-32.2 12 v183284_ex32-2.htm

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David B. Doft, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010
By:	/s/ DAVID B. DOFT
	David B. Doft Title: Chief Financial Officer

EX-99.1 13 v183284_ex99-1.htm

Exhibit 99.1

MDC PARTNERS INC.

SCHEDULE OF CURRENT AND POTENTIAL MARKETING

COMMUNICATIONS COMPANY OWNERSHIP

Company	% Owned at 3/31/10			Year of Initial Investment	Put/Call Options
					2010			Thereafter
					(See Notes)
Consolidated:
Strategic Marketing Services
Allard Johnson Communications Inc.		74.0	%	1992		89.0	%	Note 1
Attention Partners LLC		51.0	%	2009		—		Note 2
Bruce Mau Design Inc.		50.1	%	2004		—
Colle & McVoy, LLC		95.0	%	1999		—		Note 3
Crispin Porter & Bogusky, LLC		100.0	%	2001		—
Company C Communications LLC		90.0	%	2000		—		Note 4
Fearless Progression, LLC		51.0	%	2010		75.0	%	Note 5
Fletcher Martin, LLC		85.0	%	1999		100.0	%	Note 6
Hello Design, LLC		49.0	%	2004		—
henderson bas partnership		65.0	%	2004		100.0	%
HL Group Partners, LLC		65.9	%	2007		—		Note 7
kirshenbaum bond senecal & partners, LLC		100.0	%	2004		—
Mono Advertising, LLC		49.9	%	2004		54.9	%	Note 8
Redscout, LLC		60.0	%	2007		—		Note 9
Skinny NYC, LLC		50.1	%	2008		—		Note 10
Veritas Communications Inc.		64.1	%	1993		78.4	%	Note 11
Vitro Robertson, LLC		77.0	%	2004		—		Note 12
Yamamoto Moss Mackenzie		100.0	%	2000		—
Zig Inc.		76.1	%	2004		88.4	%	Note 13
Zyman Group, LLC		94.1	%	2005		—		Note 14
Performance Marketing Services
Accent Marketing Services, LLC		100.0	%	1999		—
Accumark Communications Inc.		55.0	%	1993		61.7	%	Note 15
Bryan Mills Iradesso Corp.		62.8	%	1989		88.2	%	Note 16
Communifx Partners, LLC		75.0	%	2010				Note 17
Computer Composition of Canada Inc.		100.0	%	1988		—
Northstar Research Partners Inc.		70.0	%	1998		—		Note 18
Onbrand		89.0	%	1992		—
Shout Media LLC		51.0	%	2010
Source Marketing, LLC		83.0	%	1998		—		Note 19
TargetCom, LLC		100.0	%	2000		—		Note 20
Team Holdings LLC		60.0	%	2010				Note 21
Equity Accounted:
Adrenalina, LLC		49.9	%	2007		—		Note 22

Notes

(1) MDC has the right to increase its ownership interest in Allard Johnson Communications Inc. through acquisition of an incremental interest, and the other holders have the right to put to MDC the same incremental interest up to 89% of this entity in 2010 and 100% only upon termination.

(2) Attention Partners LLC is owned by HL Group Partners, LLC. HL Group Partners, LLC has the right to increase its ownership in Attention Partners, LLC through acquisitions of incremental interests, and the other interest holders has the right to put to HL Group Partners, LLC the same incremental interests up to 100% only upon termination.

(3) MDC has the right to increase its economic ownership in Colle & McVoy, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(4) MDC has the right to increase its economic ownership in Company C Communications, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012. Effective October 1, 2008, Company C is operated as a division of kirshenbaum bond & partners, LLC.

(5) MDC has the right to increase its economic ownership in Fearless Progression, LLC through acquisitions of incremental interests, up to 75% of this entity in 2010, and up to 100% in 2011.

(6) Effective January 1, 2010, MDC acquired the remaining 15% membership interest; however, in conjunction with the step-up in Trendcore, which was merged into Fletcher Martin, LLC, a 15% profits interests was issued.

(7) MDC has the right to increase its ownership in HL Group Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 72.4% of this entity in 2012, up to 82.62% in 2013 and up to 93.73% in 2014. Effective January 25, 2010, MDC acquired an additional 1% membership interest in HL Group Partners, LLC.

(8) MDC has the right to increase its ownership in Mono Advertising, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 54.9% of this entity in 2010, up to 60.0% in 2011, up to 65.0% in 2012, up to 70.0% in 2013 and up to 75.0% in 2014.

(9) MDC has the right to increase its ownership in Redscout, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 80% of this entity in 2012.

(10) MDC has the right to increase its ownership in Skinny NYC, LLC through acquisition of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 60.1% of this entity in 2014, up to 70.1% of this entity in 2015 and up to 80.1% of this entity in 2016.

(11) MDC has the right to increase its ownership in Veritas Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 78.4% of this in 2010, up to 81.5% in 2011, up to 95.1% in 2012 and up to 100% in 2013.

(12) MDC has the right to increase its ownership in Vitro Robertson, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 95% of this entity in 2011, up to 97.5% in 2012 and up to 100% in 2013.

(13) MDC has the right to increase its ownership in Zig Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 88.4% of this entity in 2010, and up to 90.45% of this entity in 2012.

(14) As of March 31, 2010, MDC’s economic interest in Zyman Group, LLC was 100% of profits as its priority return is not expected to be exceeded. In January 2009, Zyman Group, LLC has become an operating division of kirshenbaum bond & partners, LLC.

(15) MDC has the right to increase its ownership in Accumark Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up to 61.7% of this entity in 2010, up to 68.3% in 2011 and up to 75.0% in 2012. MDC’s current economic interest is 42%.

(16) MDC has the right to increase its ownership in Bryan Mills Iradesso, Corp. through acquisition of an incremental interest, and the other interest holders have the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(17) MDC has the right to increase its ownership in Communifx Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(18) MDC has the right to increase its ownership in Northstar Research Partners Inc. through acquisitions of incremental interests, and the other holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(19) MDC has the right to increase its ownership in Source Marketing, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up 87.1% of this entity in 2011 and 91.3% in 2012 and 100% in 2013.

(20) Effective January 1, 2009, Targetcom LLC is operating as a division of Accent Marketing Services, LLC.

(21) MDC has the right to increase its ownership in Team Holdings, LLC, through acquisition of an incremental interest,  up to 100% of this entity in 2013.

(22) MDC has the right to increase its ownership in Adrenalina, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 61% of this entity in 2013, up to 72% in 2014 and up to 82% in 2015.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-12

Exhibit 12

Statement of Computation of Ratio of Earnings to Fixed Charges

	Three Months Ended March 31,
	2010			2009
	(000’s)			(000’s)
Earnings:
Income (loss) from continuing operations attributable to MDC Partners Inc.	$	(10,186	)	$	281
Additions:
Income tax expense		249			615
Noncontrolling interest in income of consolidated subsidiaries		968			382
Fixed charges, as shown below		8,302			5,319
Distributions received from equity-method investees		7			—
		9,526			6,316
Subtractions:
Equity in income (loss) of investees		(104	)		93
Noncontrolling interest in earnings of consolidated subsidiaries that have not incurred fixed charges		—			—
		(104	)		93
Earnings as adjusted	$	(556	)	$	6,504
Fixed charges:
Interest on indebtedness, expensed or capitalized		6,377			3,443
Amortization of debt discount and expense and premium on indebtedness, expensed or capitalized		651			318
Interest within rent expense		1,274			1,558
Total fixed charges	$	8,302		$	5,319
Ratio of earnings to fixed charges		N/A			1.22
Fixed charge deficiency		8,858			N/A

EX-31.1

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, Miles S. Nadal, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ MILES S. NADAL
		Miles S. Nadal
		Title: Chairman, Chief Executive Officer and President

EX-31.2

Exhibit 31.2

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, David B. Doft, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2010 of MDC Partners Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2010	By:	/s/ DAVID B. DOFT
		David B. Doft Title: Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Miles S. Nadal, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010

By:	/s/ MILES S. NADAL
	Miles S. Nadal Title: Chairman, Chief Executive Officer and President

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MDC Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David B. Doft, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of May 7, 2010
By:	/s/ DAVID B. DOFT
	David B. Doft Title: Chief Financial Officer

EX-99.1

Exhibit 99.1

MDC PARTNERS INC.

SCHEDULE OF CURRENT AND POTENTIAL MARKETING

COMMUNICATIONS COMPANY OWNERSHIP

Company	% Owned at 3/31/10			Year of Initial Investment	Put/Call Options
					2010			Thereafter
					(See Notes)
Consolidated:
Strategic Marketing Services
Allard Johnson Communications Inc.		74.0	%	1992		89.0	%	Note 1
Attention Partners LLC		51.0	%	2009		—		Note 2
Bruce Mau Design Inc.		50.1	%	2004		—
Colle & McVoy, LLC		95.0	%	1999		—		Note 3
Crispin Porter & Bogusky, LLC		100.0	%	2001		—
Company C Communications LLC		90.0	%	2000		—		Note 4
Fearless Progression, LLC		51.0	%	2010		75.0	%	Note 5
Fletcher Martin, LLC		85.0	%	1999		100.0	%	Note 6
Hello Design, LLC		49.0	%	2004		—
henderson bas partnership		65.0	%	2004		100.0	%
HL Group Partners, LLC		65.9	%	2007		—		Note 7
kirshenbaum bond senecal & partners, LLC		100.0	%	2004		—
Mono Advertising, LLC		49.9	%	2004		54.9	%	Note 8
Redscout, LLC		60.0	%	2007		—		Note 9
Skinny NYC, LLC		50.1	%	2008		—		Note 10
Veritas Communications Inc.		64.1	%	1993		78.4	%	Note 11
Vitro Robertson, LLC		77.0	%	2004		—		Note 12
Yamamoto Moss Mackenzie		100.0	%	2000		—
Zig Inc.		76.1	%	2004		88.4	%	Note 13
Zyman Group, LLC		94.1	%	2005		—		Note 14
Performance Marketing Services
Accent Marketing Services, LLC		100.0	%	1999		—
Accumark Communications Inc.		55.0	%	1993		61.7	%	Note 15
Bryan Mills Iradesso Corp.		62.8	%	1989		88.2	%	Note 16
Communifx Partners, LLC		75.0	%	2010				Note 17
Computer Composition of Canada Inc.		100.0	%	1988		—
Northstar Research Partners Inc.		70.0	%	1998		—		Note 18
Onbrand		89.0	%	1992		—
Shout Media LLC		51.0	%	2010
Source Marketing, LLC		83.0	%	1998		—		Note 19
TargetCom, LLC		100.0	%	2000		—		Note 20
Team Holdings LLC		60.0	%	2010				Note 21
Equity Accounted:
Adrenalina, LLC		49.9	%	2007		—		Note 22

Notes

(1) MDC has the right to increase its ownership interest in Allard Johnson Communications Inc. through acquisition of an incremental interest, and the other holders have the right to put to MDC the same incremental interest up to 89% of this entity in 2010 and 100% only upon termination.

(2) Attention Partners LLC is owned by HL Group Partners, LLC. HL Group Partners, LLC has the right to increase its ownership in Attention Partners, LLC through acquisitions of incremental interests, and the other interest holders has the right to put to HL Group Partners, LLC the same incremental interests up to 100% only upon termination.

(3) MDC has the right to increase its economic ownership in Colle & McVoy, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(4) MDC has the right to increase its economic ownership in Company C Communications, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 100% of this entity in 2012. Effective October 1, 2008, Company C is operated as a division of kirshenbaum bond & partners, LLC.

(5) MDC has the right to increase its economic ownership in Fearless Progression, LLC through acquisitions of incremental interests, up to 75% of this entity in 2010, and up to 100% in 2011.

(6) Effective January 1, 2010, MDC acquired the remaining 15% membership interest; however, in conjunction with the step-up in Trendcore, which was merged into Fletcher Martin, LLC, a 15% profits interests was issued.

(7) MDC has the right to increase its ownership in HL Group Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 72.4% of this entity in 2012, up to 82.62% in 2013 and up to 93.73% in 2014. Effective January 25, 2010, MDC acquired an additional 1% membership interest in HL Group Partners, LLC.

(8) MDC has the right to increase its ownership in Mono Advertising, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 54.9% of this entity in 2010, up to 60.0% in 2011, up to 65.0% in 2012, up to 70.0% in 2013 and up to 75.0% in 2014.

(9) MDC has the right to increase its ownership in Redscout, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 80% of this entity in 2012.

(10) MDC has the right to increase its ownership in Skinny NYC, LLC through acquisition of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 60.1% of this entity in 2014, up to 70.1% of this entity in 2015 and up to 80.1% of this entity in 2016.

(11) MDC has the right to increase its ownership in Veritas Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 78.4% of this in 2010, up to 81.5% in 2011, up to 95.1% in 2012 and up to 100% in 2013.

(12) MDC has the right to increase its ownership in Vitro Robertson, LLC through acquisition of an incremental interest, and the other interest holder has the right to put to MDC the same incremental interest, up to 95% of this entity in 2011, up to 97.5% in 2012 and up to 100% in 2013.

(13) MDC has the right to increase its ownership in Zig Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interest, up to 88.4% of this entity in 2010, and up to 90.45% of this entity in 2012.

(14) As of March 31, 2010, MDC’s economic interest in Zyman Group, LLC was 100% of profits as its priority return is not expected to be exceeded. In January 2009, Zyman Group, LLC has become an operating division of kirshenbaum bond & partners, LLC.

(15) MDC has the right to increase its ownership in Accumark Communications Inc. through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up to 61.7% of this entity in 2010, up to 68.3% in 2011 and up to 75.0% in 2012. MDC’s current economic interest is 42%.

(16) MDC has the right to increase its ownership in Bryan Mills Iradesso, Corp. through acquisition of an incremental interest, and the other interest holders have the right to put to MDC the same incremental interest, up to 100% of this entity in 2012.

(17) MDC has the right to increase its ownership in Communifx Partners, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(18) MDC has the right to increase its ownership in Northstar Research Partners Inc. through acquisitions of incremental interests, and the other holders have the right to put to MDC the same incremental interests, up to 100% of this entity in 2013.

(19) MDC has the right to increase its ownership in Source Marketing, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests up 87.1% of this entity in 2011 and 91.3% in 2012 and 100% in 2013.

(20) Effective January 1, 2009, Targetcom LLC is operating as a division of Accent Marketing Services, LLC.

(21) MDC has the right to increase its ownership in Team Holdings, LLC, through acquisition of an incremental interest,  up to 100% of this entity in 2013.

(22) MDC has the right to increase its ownership in Adrenalina, LLC through acquisitions of incremental interests, and the other interest holders have the right to put to MDC the same incremental interests, up to 61% of this entity in 2013, up to 72% in 2014 and up to 82% in 2015.