Exhibit 2.1

Execution Version

TRANSACTION AGREEMENT

dated as of

December 21, 2020

by and among

STAGWELL MEDIA LP,

MDC PARTNERS INC.,

NEW MDC LLC

and

MIDAS MERGER SUB 1 LLC

CONTENTS

TRANSACTION AGREEMENT

THIS TRANSACTION AGREEMENT (this “Agreement”), dated as of December 21, 2020, is made by and among Stagwell Media LP, a Delaware limited partnership (“Stagwell”), MDC Partners Inc., a Canadian corporation, which shall domesticate to the State of Delaware and become a Delaware corporation prior to the Closing (as defined below) in accordance with the terms of this Agreement (“MDC”), New MDC LLC, a Delaware limited liability company and wholly-owned subsidiary of MDC (“New MDC”), and Midas Merger Sub 1 LLC, a Delaware limited liability company and wholly-owned subsidiary of New MDC (“Merger Sub”).

WITNESSETH:

WHEREAS, Stagwell, through its wholly-owned subsidiary Stagwell Marketing Group Holdings LLC, a Delaware limited liability company (“SMGH,” and together with its direct and indirect Subsidiaries (as defined below), the “Stagwell Subject Entities,” and each, a “Stagwell Subject Entity”), indirectly owns and operates a portfolio of marketing services companies;

WHEREAS, MDC, directly and indirectly, owns and operates a portfolio of marketing, communications and consulting agencies;

WHEREAS, prior to the date hereof, (x) MDC formed New MDC and (y) New MDC formed Merger Sub for the sole purpose of engaging in the Transactions (as defined below);

WHEREAS, subject to the terms and conditions set forth herein, Stagwell and MDC desire to combine the Stagwell Subject Entities with MDC in a series of transactions involving the following steps (collectively, the “Transactions”):

(i)                 Prior to (A) the Stagwell Contribution, Stagwell will use its reasonable best efforts to undertake the Stagwell Restructuring (as defined below); and (B) the Redomiciliation, MDC will undertake the MDC Pre-Redomiciliation Restructuring (as defined below);

(ii)               At least three (3) Business Days prior to the Closing, (A) MDC will domesticate to the State of Delaware and become a Delaware corporation in accordance with Section 388 of the General Corporation Law of the State of Delaware (the “DGCL”) by filing a Certificate of Domestication (as defined below) with the Secretary of State of the State of Delaware (the “Secretary of State”) and discontinue as a Canadian corporation pursuant to a continuance effected in accordance with Section 188 of the Canada Business Corporations Act (the “CBCA”), (B) in connection with such domestication, MDC will (1) adopt a certificate of incorporation in the form attached hereto as Exhibit G (with such other changes as the parties may mutually agree, the “MDC Delaware Certificate of Incorporation”), which shall set forth, among other things, that the holders of the MDC Delaware Series 6 Shares shall be entitled to vote on the MDC Merger as a single class with the holders of the MDC Delaware Class A Shares and the MDC Delaware Class B Shares, and file the MDC Delaware Certificate of Incorporation with the Secretary of State together with the MDC Delaware Certificate of Domestication and (2) adopt bylaws in the same form as the New MDC Bylaws (as defined below) (with such other changes as parties may mutually agree, the “MDC Delaware Bylaws”), and (C) in connection with such domestication, MDC will obtain a certificate of discontinuance from the director appointed under Section 260 of the CBCA (the transactions described in the foregoing clauses (A), (B) and (C), collectively, the “Redomiciliation”);

(iii)             At least one (1) Business Day after completion of the Redomiciliation and at least two (2) Business Days prior to the Closing, MDC will undertake the Maxxcom Restructuring (as defined below);

(iv)            At least one (1) Business Day following the Maxxcom Restructuring and at least one (1) Business Day prior to the Closing, (A) New MDC shall convert into a Delaware corporation (the “New MDC Incorporation”) pursuant to the DGCL and file with the Secretary of State (1) a certificate of conversion to a Delaware corporation and (2) a certificate of incorporation in the form attached hereto as Exhibit A (with such changes as the parties may mutually agree, the “New MDC Certificate of Incorporation”); and (B) MDC will, and will cause New MDC to, adopt the bylaws of New MDC in the form attached hereto as Exhibit B (with such changes as the parties may mutually agree, the “New MDC Bylaws”);

(v)              Immediately following, and on the same day as, the New MDC Incorporation, Merger Sub will merge with and into MDC, with MDC surviving as a direct and wholly-owned Subsidiary of New MDC (the “MDC Merger”);

(vi)            Immediately following, and on the same day as, the MDC Merger, MDC will effect the MDC Conversion (as defined below) and convert into a Delaware limited liability company, OpCo (as defined below), pursuant to the Delaware Limited Liability Company Act (the “DLLCA”) and the DGCL, and with New MDC as the then-sole member of OpCo, and OpCo will adopt and thereafter be governed by a limited liability company operating agreement in a form reasonably satisfactory to Stagwell (the “Initial OpCo Operating Agreement”);

(vii)            Immediately following the MDC Conversion, New MDC shall cause OpCo to consummate the Midas Corporate HoldCo Formation (as defined below);

(viii)          At least one (1) Business Day following the Midas Corporate HoldCo Formation, at the Closing, Stagwell shall consummate the Stagwell Contribution (as defined below) in exchange for the Stagwell Contribution Consideration (as defined below);

WHEREAS, on the date hereof, MDC obtained the consent of Stagwell Agency Holdings LLC (“SAH”), in its capacity as the holder of all of the issued and outstanding Series 6 convertible preference shares of MDC (the “MDC Series 6 Preferred Shares”) pursuant to the Securities Purchase Agreement by and between MDC and SAH, dated as of March 14, 2019, and the articles of amendment, filed on March 14, 2019 , designating the Series 6 convertible preference shares of MDC (the “MDC Series 6 Preferred Shares”), to MDC’s entry into the Transactions and certain related waivers (such consent and waivers, the “Stagwell Consent”);

WHEREAS, on the date hereof, MDC obtained the consent of Broad Street Principal Investments, L.L.C. (“Broad Street” and together with its Affiliates, “Goldman Sachs”), pursuant to the Securities Purchase Agreement by and between MDC and Broad Street, dated as of February 14, 2017, and the articles of amendment, filed on March 7, 2017, designating the Series 4 convertible preference shares of MDC (the “MDC Series 4 Preferred Shares”), to MDC’s entry into the Transactions and certain related waivers, subject to documentation of certain agreed upon terms (such consent and waivers, the “Goldman Consent”);

WHEREAS, on the date hereof, MDC obtained the agreement of the holders of a majority in aggregate principal amount of the outstanding Senior Notes (as defined below), pursuant to those certain consent and support agreements entered into on the date hereof (the “Note Consent Agreements”), to, inter alia, deliver a valid consent in respect of the Senior Notes held by each such holder to certain waivers and amendments to the Senior Notes Indenture (as defined below) relating to the Transactions pursuant to a formal consent solicitation (the “Consent Solicitation”, and such consent, the “Senior Note Consent”) to be launched by MDC on or after the date hereof;

WHEREAS, on November 13, 2020, Stagwell Marketing Group LLC, a Delaware limited liability company and wholly-owned subsidiary of SMGH (“Stagwell Marketing Group”), and certain material direct and indirect domestic subsidiaries of Stagwell Marketing Group entered into the Second Stagwell Credit Agreement Amendment (as defined below);

WHEREAS, on November 13, 2020, Stagwell Marketing Group and certain material direct and indirect domestic subsidiaries of Stagwell Marketing Group entered into the Term Loan Credit Agreement (as defined below);

WHEREAS, on June 25, 2020, Stagwell delivered a preliminary, non-binding letter to the board of directors of MDC (the “MDC Board”) proposing to combine the Stagwell Subject Entities and MDC (the “Proposed Transaction”) and indicating that the entry into definitive documentation for the Proposed Transaction would be subject to the approval of such definitive documentation and the Proposed Transaction by a committee of disinterested non-management members of the MDC Board;

WHEREAS, the MDC Board thereafter constituted the MDC Special Committee (as defined below) and vested the MDC Special Committee with the full and exclusive power and authority of the MDC Board to review strategic alternatives available to MDC and/or maintaining the status quo, and charged the MDC Special Committee with, among other things, considering, reviewing and evaluating and, if the MDC Special Committee deemed it appropriate, (A) negotiating the terms and conditions of the Proposed Transaction and (B) retaining advisors to assist the MDC Special Committee in relation to the Proposed Transaction;

WHEREAS, the MDC Special Committee and its financial and legal advisors negotiated the terms and conditions of this Agreement and the Transactions with Stagwell and its financial and legal advisors;

WHEREAS, the MDC Special Committee unanimously (i) determined that it is in the best interests of MDC and its shareholders (other than Mark Penn, Stagwell, Goldman and their respective Affiliates (other than MDC and its Subsidiaries) (collectively, the “Interested Shareholders”)), and declared it advisable, to recommend that MDC enter into this Agreement and consummate the Transactions, (ii) recommended that the MDC Board approve the execution, delivery and performance by MDC of this Agreement and the consummation of the Transactions, and (iii) resolved, subject to the MDC Board approving the execution, delivery and performance by MDC of this Agreement and the consummation of the Transactions, to recommend to the MDC Board that it recommend the shareholders of MDC approve the Transaction Resolutions (as defined below);

WHEREAS, the MDC Board, acting upon the unanimous recommendation of the MDC Special Committee, has unanimously (with Mark Penn, Charlene Barshefsky and Bradley Gross abstaining from voting on, or participating in any deliberations with respect to the Transactions) (i) determined that it is in the best interests of MDC and its shareholders (other than the Interested Shareholders), and declared it advisable, to enter into this Agreement and consummate the Transactions, (ii) approved the execution, delivery and performance by MDC of this Agreement and the consummation of the Transactions, and (iii) resolved to recommend that the shareholders of MDC vote for the Transaction Resolutions; and

WHEREAS, the Stagwell Group, in its capacity as the sole general partner of Stagwell, has (a) determined that it is in the best interests of Stagwell and its limited partners, and declared it advisable, to enter into this Agreement and (b) approved the execution, delivery and performance by Stagwell of this Agreement and the consummation of the Transactions.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained in this Agreement, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Stagwell, MDC, New MDC and Merger Sub hereby agree as follows:

Article 1
DEFINITIONS

Section 1.01            Definitions.

(a)                As used herein, the following terms have the following meanings:

“A&R OpCo Operating Agreement” means the amended and restated limited liability company agreement of OpCo, substantially in the form attached hereto as Exhibit D.

“Affiliate” means, as to any Person, any other Person which, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by Contract or otherwise.

“Ancillary Agreements” means, collectively, the following agreements: (i) the A&R OpCo Operating Agreement, (ii) the Registration Rights Agreement, (iii) the Tax Receivables Agreement and (iv) the Information Rights Letter Agreement.

“Anti-Bribery Law” means all and any of the following: the United States Foreign Corrupt Practices Act of 1977, as amended; the UK Bribery Act 2010; the Organisation For Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related implementing legislation; and any other applicable anti-bribery or anti-corruption, related provisions in criminal and anti-competition laws and/or anti-bribery, anti-corruption, campaign finance, lobbying and/or anti-money laundering laws, including the PRC Criminal Law and the PRC Anti-Unfair Competition Law, the Foreign Corrupt Practices Act of 1977, as amended, and the Corruption of Foreign Public Officials Act (Canada).

“Business Combination Resolution” means the resolutions required to be approved by MDC Shareholders authorizing and approving the steps of the Transactions required to be authorized or approved by MDC Shareholders, other than the Redomiciliation.

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by applicable Law to close.

“Canadian Tax Act” means the Income Tax Act (Canada), as amended, including the regulations promulgated thereunder.

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act.

“Closing Date” means the date on which the Stagwell Contribution occurs.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor provision of US federal law.

“Competition Act” means the Competition Act, R.S.C. 1985, c. C-34 as amended, including the regulations promulgated thereunder.

“Contract” means any written or oral contract, subcontract, license, sublicense, lease, sublease, agreement, instrument, indenture, purchase order, note, bond, mortgage, debenture or other legally binding commitment, arrangement or undertaking of any nature.

“COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof or related or associated epidemics, pandemics or disease outbreaks.

“COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester, workplace safety or similar Law, directive, order, guidelines or recommendations promulgated by any industry group, health organization or any Governmental Entity, including the Centers for Disease Control and Prevention and the World Health Organization, in each case, in connection with or in response to COVID-19, including the CARES Act and Families First Coronavirus Response Act.

“Credit Agreement Liens” means Liens arising under, as applicable, the Stagwell Credit Agreement, the MDC Credit Agreement, the Term Loan Credit Agreement or documents entered into in connection therewith.

“Data Protection Laws” means all Laws related to the Processing, privacy, protection or security of Personal Data and all regulations and guidance issued thereunder, including consumer protection, direct marketing and employee protection Laws, in each case to the extent they concern privacy or Personal Data protection, including the Federal Trade Commission Act, 15 U.S.C. §§ 41–58; the Gramm-Leach-Bliley Act, 113 Stat. 1338 (“Gramm-Leach-Bliley”); the California Consumer Privacy Act, Cal. Civ. Code § 1789.100 et seq.; the Illinois Biometric Information Privacy Act, 740 ILCS 14/1; the Children's Online Privacy Protection Act of 1998, 15 U.S.C. §§ 6501–6505; U.S. state and territory personal data breach notification laws; the European Union General Data Protection Regulation 2016/679 (“GDPR”); NY SHIELD Act, N.Y. Gen. Bus. L. Section § 899-BB; the Massachusetts Security Standards, 201 CMR 17; ISO 27001; the US NIST Framework; the EU NIS Directive, EU 2016/1148; the UK Data Protection Act 1998; and the most recent Payment Card Industry Data Security Standards; the Personal Information Protection and Electronic Documents Act (Canada); An Act to Promote the Efficiency and Adaptability of the Canadian Economy by Regulating ‎Certain Activities that Discourage Reliance on Electronic Means of Carrying out Commercial ‎Activities, and to Amend the Canadian Radio-television and Telecommunications Commission ‎Act, the Competition Act, the Personal Information Protection and Electronic Documents Act ‎and the Telecommunications Act (Canada); the Personal Information Protection Act (Alberta); the Personal Information Protection Act (British Columbia); and Act respecting the protection of personal information in the private sector (Quebec); in each case as the same may be amended, restated, amended and restated, supplemented or modified from time to time.

“Debt Transactions” means, collectively, the MDC Credit Agreement Termination and the Debt Financing.

“Dissenting MDC Shareholder” means a registered holder of MDC Common Shares or MDC Preferred Shares, as applicable, who has duly and validly exercised the Dissent Rights in respect of the Transaction Resolutions (to the extent such Dissent Rights are required to be provided in by the CBCA in respect of any of the Transaction Resolutions) in strict compliance with the Dissent Rights and who has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights.

“Dissenting MDC Shares” means the MDC Common Shares or the MDC Preferred Shares, as applicable, held by Dissenting MDC Shareholders in respect of which such Dissenting MDC Shareholders have given Notice of Dissent.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

“Export Laws” means all applicable Laws relating to export control, trade embargoes, and customs regulations, and any and all regulations and orders promulgated or issued under such authority, including the regulations administered by any of the Office of Foreign Assets Control of the U.S. Department of the Treasury, any other agency of the US government, the United Nations, the European Union or any member state thereof.

“Formal Valuation” means the independent formal valuation required to be obtained in connection with the Transactions pursuant to MI 61-101.

“GAAP” means generally accepted accounting principles in the United States.

“GAAS” means generally accepted auditing standards in the United States.

“Governmental Entity” means any nation, state or province or any municipal or other political subdivision thereof, or any agency, commission, department, board, bureau, minister, tribunal or court, whether national, state, provincial, local, foreign or multinational (to the extent that the rules, regulations or orders of such Person has the force of Law), exercising executive, legislative, judicial, taxing, regulatory or administrative functions.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Information Rights Letter Agreement” means the letter agreement, to be executed and delivered as of the Closing Date, substantially in the form attached hereto as Exhibit C.

“Intellectual Property” means collectively, all intellectual property rights in any jurisdiction, whether registered or unregistered, including such rights in and to patents, know-how, trade secrets, inventions, confidential information, trademarks, service marks, corporate names, trade names, social media accounts, Internet domain names, copyrights and works of authorship, designs and databases, trade names and software.

“Investment Canada Act” means the Investment Canada Act, R.S.C. 1985, c. 28 (1st Supp.), as amended, including the regulations promulgated thereunder.

“Investment Canada Act Approval” means the satisfaction or deemed satisfaction by the Minister of Canadian Heritage under the Investment Canada Act that the Proposed Transaction is likely to be of “net benefit to Canada” for purposes of the Investment Canada Act.

“Law” means any supranational, national, federal, state, provincial, territorial or local law (statutory, common or otherwise), constitution, treaty, ordinance, code, rule, regulation, order, injunction, judgment, decree, rule of law or other similar requirement enacted, adopted, or promulgated by a Governmental Entity.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, right of first refusal, claim, easement, encroachment or other similar encumbrance in respect of such asset.

“Maxxcom” means Maxxcom Inc., a Delaware corporation.

“MDC 10-K” means MDC’s annual report on Form 10-K for the fiscal year ended December 31, 2019 filed on March 15, 2020, as amended by Amendment No. 1 filed on April 29, 2020.

“MDC Audited Financial Statements” means the audited consolidated financial statements consisting of the consolidated balance sheets and the related consolidated statements of operations, and stockholders’ equity (deficit) and cash flows of MDC and its Subsidiaries, as of and for the fiscal years ended December 31, 2019 and December 31, 2018 (including, in each case, any related notes thereto and the related reports of the independent public accountants) included in the MDC SEC Documents prior to the date of this Agreement.

“MDC Balance Sheet” means the audited consolidated balance sheet of MDC as of December 31, 2019 (the “MDC Audited Balance Sheet Date”), and the footnotes thereto set forth in the MDC 10-K.

“MDC Benefit Plan” means each “employee benefit plan” (as defined in Section 3(3) of ERISA), whether or not subject to ERISA, and each bonus, stock option, stock appreciation right, restricted stock, restricted stock unit, phantom right, incentive unit, stock purchase, or other stock- or equity-based, profit sharing, savings, disability, incentive, deferred compensation, retirement, pension, severance, employment, consulting, retention, change in control, medical, vision, dental or other health plans, life insurance, employee assistance, relocation benefits, post-employment retirement benefits, unemployment benefits, disability or sick leave benefits, workers’ compensation benefits, vacation, fringe benefit or other employee benefit or compensation plans, programs, arrangements, Contracts or policies, in each case, whether funded or unfunded, written or unwritten, insured or self-insured, maintained or contributed to, or required to be maintained or contributed to, for the benefit of, or relating to, any MDC Participant (or their beneficiaries or dependents), or with respect to which MDC or any MDC Subsidiary could have any liability.

“MDC Class A Shares” means, prior to the Redomiciliation, the Class A subordinate voting shares, no par value, of MDC.

“MDC Class B Shares” means, prior to the Redomiciliation, the Class B multiple voting shares, no par value, of MDC.

“MDC Common Shares” means, collectively, the MDC Class A Shares and the MDC Class B Shares.

“MDC Credit Agreement” means the Second Amended and Restated Credit Agreement, dated as of May 3, 2016, by and among MDC, Maxxcom, the subsidiaries of MDC and Maxxcom party thereto, Wells Fargo, as agent, and the lenders from time to time party thereto, as amended by the Consent and First Amendment to the Second Amended and Restated Credit Agreement, dated as of March 12, 2019.

“MDC Data Protection Commitments” means (i) MDC and the MDC Subsidiaries’ data privacy and security policies and notices relating to Personal Data published on MDC or the MDC Subsidiaries’ websites or otherwise made available by or on behalf of MDC or the MDC Subsidiaries to any Person who is not an employee of MDC or the MDC Subsidiaries, (ii) any other public representations (including representations on MDC and the MDC Subsidiaries’ websites) relating to MDC or the MDC Subsidiaries’ Processing of Personal Data made by or on behalf of MDC or any MDC Subsidiary, (iii) any Contracts between MDC or an MDC Subsidiary, on the one hand, and a third party, on the other hand, relating to the Processing of Personal Data, and (iv) any privacy choices (including opt-in and opt-out preferences) provided by or on behalf of MDC or any MDC Subsidiary to any individuals and the associated choices made by such individuals and communicated to MDC or the MDC Subsidiaries.

“MDC Delaware Class A Common Stock” means, following the Redomiciliation but prior to the MDC Merger, the Class A common stock, no par value, of MDC.

“MDC Delaware Class B Common Stock” means, following the Redomiciliation but prior to the MDC Merger, the Class B common stock, no par value, of MDC.

“MDC Delaware Common Stock” means, following the Redomiciliation but prior to the MDC Merger, collectively, the MDC Delaware Class A Common Stock and the MDC Delaware Class B Common Stock.

“MDC Delaware Preferred Stock” means, following the Redomiciliation but prior to the MDC Merger, collectively, the MDC Delaware Series 4 Preferred Stock and the MDC Delaware Series 6 Preferred Stock.

“MDC Delaware Series 4 Preferred Stock” means, following the Redomiciliation but prior to the MDC Merger, the Series 4 convertible preferred stock, no par value, of MDC.

“MDC Delaware Series 6 Preferred Stock” means, following the Redomiciliation but prior to the MDC Merger, the Series 6 convertible preferred stock, no par value, of MDC.

“MDC Delaware Stockholder” means, following the Redomiciliation but prior to the MDC Merger, the holders of any shares of MDC Delaware Common Stock or MDC Delaware Preferred Stock.

“MDC Financing Arrangements” means the 6.50% senior notes due 2024 issued by MDC pursuant to an indenture dated as of March 23, 2016, as the same may be amended, replaced, supplemented from time to time, and any debt finance arrangements, including further notes or a bridge loan facility, entered into in accordance with Section 6.01 on or prior to the Closing Date in order to refinance such senior notes.

“MDC Incentive Award” means any stock option, stock appreciation right, restricted stock, growth shares, restricted stock unit or other equity, equity-based or equity-related award with respect to MDC Common Shares granted pursuant to the MDC Stock Plans or as a stand-alone award, separate and apart from the MDC Stock Plans.

“MDC IT or Security Incident” means any breach or unintended interruption of the availability, proper functioning, security, confidentiality, or integrity of MDC IT Systems, or any unauthorized access to or breach, misuse, theft or loss of any Personal Data Processed by or on behalf of MDC or any of the MDC Subsidiaries or of MDC-Related Confidential Information.

“MDC IT Systems” means the information and communications technologies used by or on behalf of MDC or the MDC Subsidiaries, including hardware, software, servers, networks, and associated documentation.

“MDC Material Adverse Effect” means, with respect to MDC, any fact, circumstance, occurrence, event, development, change or condition (each, an “Effect”), either individually or together with one or more other contemporaneously existing Effects, that has been materially adverse to the business, financial condition, assets, Liabilities or results of operation of MDC and the MDC Subsidiaries, taken as a whole; provided, that, any such Effect (or combination thereof) shall not be considered in determining whether an MDC Material Adverse Effect has occurred to the extent it results from (A) Effects generally affecting the economy, the financial or securities markets, or political, legislative or regulatory conditions, in each case in the United States or elsewhere in the world where MDC or any of the MDC Subsidiaries conducts business, (B) Effects in the industries in which MDC or any of the MDC Subsidiaries conducts business, (C) any adoption, implementation, promulgation, repeal, modification, reinterpretation or proposal of any rule, regulation, ordinance, order, protocol or any other Law of or by any national, regional, state or local Governmental Entity, or market administrator, (D) any changes in GAAP or accounting standards or interpretations thereof, (E) any hurricane, tornado, flood, earthquake or other weather or natural disaster, (F) any Effects resulting from hostilities or acts of war (whether or not declared), civil disobedience, terrorism, military actions, geopolitical conditions or any escalation or worsening of the foregoing, (G) any epidemic, pandemic or disease outbreak (including COVID-19 or any COVID-19 Measures), or other public health condition, or any other force majeure event, (H) the announcement or the existence of this Agreement or the Transactions or the compliance with or performance of this Agreement, (I) any taking of any action at the specific written request of Stagwell, (J) any failure by MDC to meet any financial projections or forecasts or estimates of revenues, earnings or other financial metrics for any period (provided that the exception in this clause (J) shall not prevent or otherwise affect a determination that any Effect underlying such failure has resulted in an MDC Material Adverse Effect so long as it is not otherwise excluded by this definition) or (K) any changes in the share price or trading volume of the MDC Class A Shares or in MDC’s credit rating (provided that the exception in this clause (K) shall not prevent or otherwise affect a determination that any Effect underlying such change has resulted in an MDC Material Adverse Effect so long as it is not otherwise excluded by this definition); except, in each case with respect to subclauses (A) through (G), to the extent that such Effect disproportionately affects MDC and the MDC Subsidiaries, taken as a whole, relative to other similarly situated companies in the industry in which MDC and the MDC Subsidiaries operate.

“MDC Merger Approval” means the affirmative vote, at a duly called and held meeting of the stockholders of MDC or by written consent, of holders of a majority of the voting power of the MDC Delaware Class A Common Stock, MDC Delaware Class B Common Stock and MDC Delaware Series 6 Preferred Stock, voting together as a single class, following the Redomiciliation Effective Time, approving the adoption of the Transaction Agreement and the Transactions, including the MDC Merger.

“MDC Merger Resolutions” means a resolution that each of MDC and The Stagwell Group LLC (each, a “Proxyholder”) be granted a proxy, acting singly, with respect to the holders of MDC Delaware Common Stock and the MDC Delaware Series 6 Preferred Stock to vote in favor of, or consent to, the approval and adoption of this Agreement and the Transactions, including the MDC Merger, which proxy (A) shall survive until the earlier of (1) the termination of this Agreement in accordance with its terms and (2) the effectiveness of a consent voting such shares of MDC Delaware Common Stock and MDC Delaware Series 6 Preferred Stock to approve and adopt this Agreement and the Transactions and (B) with respect to MDC, shall be granted conditional on MDC, in its capacity as Proxyholder, irrevocably committing to vote such shares of MDC Delaware Common Stock and MDC Delaware Series 6 Preferred Stock to approve and adopt this Agreement and the Transactions.

“MDC Participant” means any current or former director, officer, employee, contractor or consultant of MDC or any MDC Subsidiary.

“MDC Pre-Closing Taxes” means any Taxes of MDC or any of its Subsidiaries relating to or attributable to any Pre-Closing Tax Period, including any Taxes resulting from the Transactions.

“MDC Preferred Shares” means, collectively the MDC Series 4 Preferred Shares and the MDC Series 6 Preferred Shares.

“MDC-Related Confidential Information” means any (i) confidential information of MDC or the MDC Subsidiaries, whether held by MDC, the MDC Subsidiaries or a third-party, and (ii) any confidential information of any third-party that is held by or on behalf of MDC or the MDC Subsidiaries and as to which MDC or the MDC Subsidiaries has contractual or other legal confidentiality obligations.

“MDC SEC Documents” means all forms, reports, schedules, registration statements, definitive proxy statements and other documents, including all exhibits thereto, required to be filed by MDC with the SEC.

“MDC Shareholder” means, prior to the Redomiciliation, the holders of any MDC Common Shares or MDC Preferred Shares.

“MDC Shareholder Approval” means the MDC Special Meeting Approval and the MDC Merger Approval, collectively.

“MDC Special Meeting Approval” means the required affirmative vote, at a duly called and held meeting of MDC Shareholders for the purpose of approving the Transaction Resolutions, of not less than the following votes cast by MDC Shareholders (present in person or by proxy at the Special Meeting): (i) in respect of the Redomiciliation Resolution, 66 2/3% of the votes cast by the MDC Shareholders, voting as a single class; (ii) in respect of the Business Combination Resolutions, 66 2/3% of the votes cast by the holders of MDC Class A Shares and MDC Class B Shares, voting together as a single class; (iii) in respect of the Transaction Resolutions, pursuant to MI 61-101, a simple majority of the votes cast by the holders of each of the MDC Class A Shares, MDC Class B Shares, and each class of outstanding MDC Preferred Shares, in each instance voting separately as a class (unless relief or approval is obtained from the applicable securities regulatory authorities to permit voting as a single class), excluding the votes cast by “interested parties” for purposes of MI 61-101 or any votes otherwise excluded for purposes of the “minority approval” determined pursuant to MI 61-101; (iv) in respect of the NASDAQ Resolution, a majority of the votes cast by the holders of MDC Class A Shares and MDC Class B Shares, voting together as a single class, (v) in respect of the MDC Merger Resolutions, by holders of a majority of the voting power represented by the issued and outstanding MDC Delaware Class A Shares, MDC Delaware Class B Shares and MDC Delaware Series 6 Preferred Stock, voting together as a single class, and (vi) if required in respect of the Transaction Resolutions, the votes necessary to obtain “minority approval” as such term is defined in OSC Rule 56-501 - Restricted Shares, unless exemptive relief is obtained from the applicable securities regulatory authorities.

“MDC Special Committee” means the special committee of the MDC Board comprised of four independent (within the meaning of applicable securities Laws, including MI 61-101, and NASDAQ rules) directors constituted by the MDC Board in connection with the Proposed Transaction.

“MDC Stock Plans” means the MDC Partners Inc. Stock Appreciation Rights Plan, the MDC Partners Inc. 2005 Stock Incentive Plan, as amended, the MDC Partners Inc. 2008 Key Partner Incentive Plan, the MDC Partners Inc. 2011 Stock Incentive Plan and the MDC Partners Inc. 2016 Stock Incentive Plan, as amended.

“MDC Unaudited Balance Sheet” means the unaudited condensed consolidated balance sheet of MDC and its Subsidiaries as of September 30, 2020 included in the MDC SEC Documents prior to the date of this Agreement.

“MDC Unaudited Financial Statements” means the unaudited condensed consolidated financial statements of MDC and its Subsidiaries consisting of the MDC Unaudited Balance Sheet and all of the related condensed consolidated statements of income and comprehensive income, cash flows and equity of MDC and its Subsidiaries as of and for the nine (9) months ended September 30, 2020 (including, in each case, any related notes thereto), included in the SEC Documents prior to the date of this Agreement.

“MI 61-101” means Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

“NASDAQ” means The NASDAQ Stock Market LLC, or any successor thereto.

“NASDAQ Resolution” means the resolutions required to be approved by MDC Shareholders authorizing and approving the issuance of (i) the MDC Delaware Series 6 Preferred Shares and (ii) the New MDC Class C Shares, each in accordance with NASDAQ Listing Rule 5635

“Net Debt” means, as of any date and without duplication, the amount, which may be positive or negative, and which shall be calculated in accordance with the sample calculation set forth on Schedule VII (including with respect to any line items, adjustments and/or exclusions contained therein) equal to (i) the sum of, whether matured, unmatured, liquidated, unliquidated, contingent or otherwise, (A) the principal of, and accrued and unpaid interest in respect of, indebtedness of the Stagwell Subject Entities for money borrowed under the Stagwell Credit Agreement or the Term Loan Credit Agreement; (B) the book value of all obligations of the Stagwell Subject Entities as the deferred purchase price of any property, services, assets, securities or business, including all conditional sale obligations, “earn-outs” or other contingent consideration of any Stagwell Subject Entities (whether owed or payable to any seller, equityholder, director, officer, employee or other Person other than, in each case, a minority equityholder of Targeted Holdings, LLC in connection with a change of control); and (C) all fees, costs and expenses (including fees, costs and expenses of legal counsel, investment bankers, brokers or other representatives and consultants) incurred by and due from any of the Stagwell Subject Entities in connection with the negotiation, execution, delivery and consummation of this Agreement, and which are unpaid as of the Closing, in each instance set forth in (A) and (B), calculated in accordance with GAAP, less (ii) the sum of (A) the cash and cash equivalents (excluding Restricted Cash) held by the Stagwell Subject Entities and (B) the book value of any unconsolidated equity interests of the Stagwell Subject Entities in any Person, including Wolfgang, LLC and Finn Partners, in each case, as of such date and calculated in accordance with GAAP; provided, however, that for purposes of this definition, the “Stagwell Subject Entities” shall exclude each of TrueLogic Software LLC and Kettle Solutions, LLC.

“New MDC Class A Common Stock” means, following the Redomiciliation and the MDC Merger, the Class A common stock, no par value, of New MDC, authorized pursuant to the New MDC Certificate of Incorporation.

“New MDC Class B Common Stock” means, following the Redomiciliation and the MDC Merger, the Class B common stock, no par value, of New MDC, authorized pursuant to the New MDC Certificate of Incorporation.

“New MDC Class C Common Stock” means, following the Redomiciliation and the MDC Merger, the Class C common stock, no par value, of New MDC, authorized pursuant to the New MDC Certificate of Incorporation.

“New MDC Common Stock” means, collectively, the New MDC Class A Common Stock, the New MDC Class B Common Stock and the New MDC Class C Common Stock.

“New MDC Pre-Closing Taxes” means (without duplication of any MDC Pre-Closing Taxes) any Taxes of New MDC or any of its Subsidiaries relating to or attributable to any Pre-Closing Tax Period, including any Taxes resulting from the Transactions.

“New MDC Preferred Stock” means, collectively, the New MDC Series 4 Preferred Stock and the New MDC Series 6 Preferred Stock.

“New MDC Series 4 Preferred Stock” means, following the Redomiciliation and the MDC Merger, the Series 4 convertible preferred stock, no par value, of New MDC, authorized pursuant to the New MDC Certificate of Incorporation.

“New MDC Series 6 Preferred Stock means, following the Redomiciliation and the MDC Merger, the Series 6 convertible preferred stock, no par value, of New MDC, authorized pursuant to the New MDC Certificate of Incorporation.

“Notice of Dissent” means a notice of dissent duly and validly given by a registered holder of MDC Common Shares or MDC Preferred Shares, as applicable, exercising Dissent Rights as described in Section 2.11.

“Official” means any official, employee or representative of, or any other Person acting in an official capacity for or on behalf of, any Governmental Entity, including any entity owned or controlled by or more Governmental Entities, any political party, party official or political candidate, or any public international organization, or any family member thereof.

“OpCo” means, immediately following the consummation of the MDC Conversion, the successor in interest to MDC.

“OpCo Common Units” means the common membership interests of OpCo.

“OpCo Series 4 Preferred Units” means the Series 4 convertible preferred membership interests of OpCo to be issued in connection with the MDC Conversion.

“OpCo Series 6 Preferred Units” means the Series 6 convertible preferred membership interests of OpCo to be issued in connection with the MDC Conversion.

“Open Source Software” means any software that is licensed, distributed or conveyed as “open source software,” “free software,” “copyleft” or under a similar licensing or distribution model, or under a Contract that requires as a condition of its use, modification or distribution that it, or other software into which such software is incorporated or with which such software is combined or distributed or that is derived from or links to such software, be disclosed or distributed in source code form, licensed for the purpose of making derivative works, delivered, conveyed or licensed at no charge or be licensed, distributed or conveyed under some or all of the terms as such Contract (including software licensed under the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, Microsoft Public License, Microsoft Reciprocal, Common Public License, Artistic License, Netscape Public License, Sun Community Source License (SCSL), Sun Industry Standards License (SISL), Apache License and any license listed at www.opensource.org).

“Partnership Audit Rules” means Subchapter C of Chapter 63 of the Code and any subsequent amendment (and any Treasury Regulations or other guidance relating) thereto and, in each case, any analogous provisions of state, local and non-U.S. Law governing the preparation and filing of Tax Returns, interactions with tax authorities, the conduct and resolution of examinations by tax authorities and payment of resulting Tax liabilities.

“Permitted Liens” means (i) Liens reserved against or identified in the MDC Balance Sheet or the Stagwell Balance Sheet, as the case may be, to the extent so reserved or reflected or described in the notes thereto, (ii) Liens for Taxes not yet due and payable and for which sufficient reserves have been established in accordance with GAAP, (iii) Credit Agreement Liens; (iv) mechanics, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business; and (v) those Liens that, individually or in the aggregate with all other Permitted Liens, do not, and are not reasonably likely to, materially interfere with the use or value of the properties or assets of MDC and its Subsidiaries or the Stagwell Subject Entities, as the case may be, taken as a whole.

“Person” means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization, limited liability company or governmental or other entity.

“Personal Data” means any data or information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household, or any other data or information that constitutes personal data, personally identifiable information, personal information or a similar defined term under any Law relating to privacy, data protection or data security.

“Pre-Closing Tax Period” means any taxable period (or portion thereof) ending on or prior to the Closing Date.

“Processing” or “Processed” means, with respect to data means collected, accessed, recorded, acquired, stored, organized, altered, adapted, retrieved, disclosed, used, disposed, erased, disclosed, destructed, transferred or otherwise processed, in each case, whether or not by automated means.

“Redomiciliation Resolution” means the resolution of the MDC Shareholders authorizing and approving the Redomiciliation

“Registration Rights Agreement” means the registration rights agreement, to be executed and delivered as of the Closing Date, substantially in the form of Exhibit E.

“Required MDC Information” means (i) solely to the extent publicly filed, the audited consolidated financial statements for MDC for the fiscal year ended December 31, 2019, (ii) solely to the extent publicly filed, the unaudited interim consolidated financial statements of MDC for each fiscal quarter ended subsequent to the date of the latest financial statements delivered pursuant to clause (i), including the period ending September 30, 2020, (iii) a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and cash flow statement) of MDC for the five-year period following the Closing in form reasonably satisfactory to the applicable administrative agent, and (iv) a balance sheet of the applicable borrower giving pro forma effect to the Transactions.”

“Reputation Defender Entities” means, collectively, RepDef Holdings LLC, a Delaware limited liability company, and its Subsidiaries.

“Reputation Defender Entity Financial Statements” means (i) the unaudited consolidated balance sheets and statements of income, cash flows and stockholders’ equity of the Reputation Defender Entities as of and for the years ended December 31, 2019 and December 31, 2018 (such balance sheet as of December 31, 2019, the “Reputation Defender Balance Sheet”), and (ii) the unaudited consolidated balance sheet and related statements of income, cash flows and stockholders’ equity of the Reputation Defender Entities as of and for the nine (9) months ended September 30, 2020.

“Restricted Cash” means cash and cash equivalents of the Stagwell Subject Entities that would be classified as restricted cash in accordance with MDC’s accounting policies or practices, in effect as of the date hereof.

“Sanctioned Person” means any person, organization or vessel (i) designated on the OFAC list of Specially Designated Nationals and Blocked Persons, the Consolidated List of Financial Sanctions Targets maintained by Her Majesty’s Treasury or on any list of targeted persons issued under the Export Law of any other country, (ii) that is, or is part of, a government of a Sanctioned Territory, (iii) owned or controlled by, or acting on behalf of, any of the foregoing, (iv) located within or operating from a Sanctioned Territory, or (v) otherwise targeted under any Export Law.

“Sanctioned Territory” means any country or other territory subject to a general export, import, financial or investment embargo under economic sanctions Laws, which countries and territories, as of the date of this Agreement, include the territory of Crimea, Cuba, Iran, North Korea, and Syria.

“SEC” means the Securities and Exchange Commission.

“Second Stagwell Credit Agreement Amendment” means the Second Amendment to and Waiver Under Credit Agreement, dated as of November 13, 2020, by and among Stagwell Marketing Group, the other loan parties party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, which amends the Stagwell Credit Agreement.

“Securities Act” means, as applicable, the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder, and the Securities Act (Ontario) together with all other applicable securities laws, rules, regulations and published policies thereunder or under the securities laws of any other province or territory of Canada, and all orders, rules, staff-notices, policies, regulations or similar pronouncements from the Canadian Securities Administrators or any member thereof, as now in effect or as may be promulgated or amended from time to time.

“Securities Liens” means Liens arising out of, under or in connection with (i) applicable securities Laws or (ii) restrictions on transfer, hypothecation or similar actions contained in any organizational documents of either (A) a Stagwell Subject Entity which have been provided to MDC prior to the date hereof or (B) MDC or any MDC Subsidiary which have been provided to Stagwell prior to the date hereof; provided, that the failure to receive any consent required in connection with the Transactions shall not be deemed to be a Securities Lien hereunder.

“Senior Notes Indenture” means the indenture, dated as of March 23, 2016, among MDC, the guarantors party thereto and The Bank of New York Mellon, as trustee, relating to the issuance by MDC of the Senior Notes, as the same may be amended, restated, amended and restated, supplemented or modified from time to time.

“Senior Notes Refinancing” means a refinancing of the Senior Notes with the proceeds of further notes, debt instruments or any other sources of funding that is sufficient to refinance in full, and retire, the Senior Notes.

“Senior Notes” means MDC’s 6.50% senior notes due 2024 issued under the Senior Notes Indenture in the aggregate principal amount of $900 million.

“Stagwell Benefit Plan” means each “employee benefit plan” (as defined in Section 3(3) of ERISA), whether or not subject to ERISA, and each bonus, stock option, stock appreciation right, restricted stock, restricted stock unit, phantom right, incentive unit, stock purchase, or other stock- or equity-based, profit sharing, savings, disability, incentive, deferred compensation, retirement, pension, severance, employment, consulting, retention, change in control, medical, vision, dental or other health plans, life insurance, employee assistance, relocation benefits, post-employment retirement benefits, unemployment benefits, disability or sick leave benefits, workers’ compensation benefits, vacation, fringe benefit or other employee benefit or compensation plans, programs, arrangements, Contracts or policies, including any plan, program, policy, practice or Contract maintained by a professional employer organization, in each case, whether funded or unfunded, written or unwritten, insured or self-insured, maintained or contributed to, or required to be maintained or contributed to, for the benefit of, or relating to, any Stagwell Participant (or their beneficiaries or dependents), or with respect to which the Stagwell Subject Entities could have any liability.

“Stagwell Contribution Consideration” means 216,250,000 OpCo Common Units (such OpCo Common Units, the “Stagwell OpCo Units”); provided, however, that to the extent that one or more of the transactions contemplated by the Stagwell Restructuring shall not have been completed as of the Closing, the number of OpCo Common Units constituting Stagwell OpCo Units issuable as Stagwell Contribution Consideration shall be reduced by the sum of (i) the product of (A) a fraction equal to (1) the aggregate Undelivered Stagwell Subject Entity EBITDA for all Undelivered Stagwell Subject Entity Equity (if any), divided by (2) the amount set forth in the row entitled “Total” in the column titled “Proportional Ownership” in Schedule IX, and (B) the number of shares of OpCo Common Units that would have otherwise been issued as Stagwell Contribution Consideration but for this proviso (including without duplication before any reduction pursuant to clause (ii) hereof), and (ii) the aggregate Undelivered Stagwell Incentive Award OpCo Units for all Undelivered Stagwell Incentive Awards (if any); provided further, however, that the Stagwell Contribution Consideration shall automatically be adjusted for any share splits, share dividends, reverse splits, share capitalizations, reorganizations, reclassifications, recapitalizations or similar events effected by MDC or New MDC prior to the Closing in order to give effect to the intent of the substance of the transactions contemplated hereby).

“Stagwell Credit Agreement” means the Credit Agreement, dated as of November 18, 2019, by and among Stagwell Marketing Group, the other loan parties party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, as amended pursuant to (i) the First Amendment to, Consent under, and Release from Credit Agreement, dated as of December 20, 2019 and (ii) the Second Stagwell Credit Agreement Amendment.

“Stagwell Data Protection Commitments” means (i) Stagwell Subject Entities’ data privacy and security policies and notices relating to Personal Data published on the Stagwell Subject Entities’ websites or otherwise made available by or on behalf of the Stagwell Subject Entities to any Person who is not an employee of the Stagwell Subject Entities, (ii) any other public representations (including representations on the Stagwell Subject Entities’ websites) relating to the Stagwell Subject Entities’ Processing of Personal Data made by or on behalf of any of the Stagwell Subject Entities, (iii) any Contracts between any of the Stagwell Subject Entities, on the one hand, and a third party, on the other hand, relating to the Processing of Personal Data, and (iv) any privacy choices (including opt-in and opt-out preferences) provided by or on behalf of any of the Stagwell Subject Entities to any individuals and the associated choices made by such individuals and communicated to the Stagwell Subject Entities.

“Stagwell Digital Products” means Cue and Reputation Defender.

“Stagwell Financial Statements” means, collectively, the Stagwell Subject Entity Financial Statements and the Reputation Defender Entity Financial Statements.

“Stagwell Incentive Awards” means any stock option, stock appreciation right, restricted stock, growth shares, restricted stock unit, phantom right, incentive unit or other equity, equity-based or equity-related award with respect to any Stagwell Subject Entity granted pursuant to any Stagwell Benefit Plan.

“Stagwell Incentive Plans” means any Stagwell Benefit Plan pursuant to which any stock option, stock appreciation right, restricted stock, restricted stock unit, phantom right, incentive unit or other equity, equity-based or equity-related award with respect to any Stagwell Subject Entity is granted.

“Stagwell IT or Security Incident” means any breach or unintended interruption of the availability, proper functioning, security, confidentiality, or integrity of the Stagwell IT Systems or any unauthorized access to or breach, misuse, theft or loss of any Personal Data Processed by or on behalf of a Stagwell Subject Entity or of Stagwell-Related Confidential Information.

“Stagwell IT Systems” means the information and communications technologies used by or on behalf of a Stagwell Subject Entity, including hardware, software, servers, networks, and associated documentation.

“Stagwell Material Adverse Effect” means, with respect to Stagwell, any Effect, either individually or together with one or more other contemporaneously existing Effects, that has been materially adverse to the business, financial condition, assets, Liabilities or results of operation of the Stagwell Subject Entities, taken as a whole; provided, that, any such Effect (or combination thereof) shall not be considered in determining whether a Stagwell Material Adverse Effect has occurred to the extent it results from (A) Effects generally affecting the economy, the financial or securities markets, or political, legislative or regulatory conditions, in each case in the United States or elsewhere in the world where any of the Stagwell Subject Entities conducts business, (B) Effects in the industries in which any of the Stagwell Subject Entities conducts business, (C) any adoption, implementation, promulgation, repeal, modification, reinterpretation or proposal of any rule, regulation, ordinance, order, protocol or any other Law of or by any national, regional, state or local Governmental Entity, or market administrator, (D) any changes in GAAP or accounting standards or interpretations thereof, (E) any hurricane, tornado, flood, earthquake or other weather or natural disaster, (F) any Effects resulting from hostilities or acts of war (whether or not declared), civil disobedience, terrorism, military actions, geopolitical conditions or any escalation or worsening of the foregoing, (G) any epidemic, pandemic or disease outbreak (including COVID-19 or any COVID-19 Measures), or other public health condition, or any other force majeure event, (H) the announcement or the existence of this Agreement or the Transactions or the compliance with or performance of this Agreement, (I) any taking of any action at the specific written request of MDC, or (J) any failure by the Stagwell Subject Entities to meet any financial projections or forecasts or estimates of revenues, earnings or other financial metrics for any period (provided that the exception in this clause (J) shall not prevent or otherwise affect a determination that any Effect underlying such failure has resulted in a Stagwell Material Adverse Effect so long as it is not otherwise excluded by this definition); except, in each case with respect to subclauses (A) through (G), to the extent that such Effect disproportionately affects the Stagwell Subject Entities, taken as a whole, relative to other similarly situated companies in the industry in which the Stagwell Subject Entities operate.

“Stagwell Participant” means any current or former director, officer, employee, contractor or consultant of the Stagwell Subject Entities.

“Stagwell-Related Confidential Information” means any (a) confidential information of a Stagwell Subject Entity, whether held by a Stagwell Subject Entity or a third-party, and (b) any confidential information of any third-party that is held by or on behalf of a Stagwell Subject Entity and as to which a Stagwell Subject Entity has contractual or other legal confidentiality obligations.

“Stagwell Subject Entity Financial Statements” means (i) the audited consolidated balance sheets and statements of income, cash flows and stockholders’ equity of the Stagwell Subject Entities (excluding, for all purposes, the Reputation Defender Entities) as of and for the years ended December 31, 2019 (the “Stagwell Audited Balance Sheet Date”), and December 31, 2018 (including, in each case, any related notes thereto) (such balance sheet as of December 31, 2019, the “Stagwell Balance Sheet”), (ii) the unaudited consolidated balance sheet and related statements of income, cash flows and stockholders’ equity of the Stagwell Subject Entities (excluding, for all purposes, the Reputation Defender Entities) as of and for the year ended December 31, 2017, and (iii) the unaudited consolidated balance sheet and related statements of income, cash flows and stockholders’ equity of the Stagwell Subject Entities (excluding, for all purposes, the Reputation Defender Entities) as of and for the nine (9) months ended September 30, 2020.

“Subsidiary” means, with respect to any Person, another Person, an amount of the voting securities or other voting ownership interests of which is sufficient, together with any contractual rights, to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, fifty percent (50%) or more of the equity interests of which) is owned directly or indirectly by such first Person.

“Tax” means (i) any federal, state, provincial, territorial, county, municipal, local, foreign or other tax, import, levy, fee, tariff, duty or other governmental charge or assessment or escheat payments, or deficiencies thereof, including income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, capital gains, profits, windfall profits, gross receipts, value added, goods and services, harmonized sales, sales, use, excise, custom duties, land transfer, property transfer, transfer, conveyance, mortgage, registration, stamp, documentary, recording, premium, severance, environmental, real and personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, employer health, social security, employment insurance, Canada and any other government pension plan contributions or premiums, disability, workers’ compensation, payroll, health care, withholding, estimated or other similar tax, (ii) all interest, penalties and additions to tax that may become payable in respect of amounts of the type described in clause (i) or this clause (ii), and (iii) any liability for the payment of any amounts of the type described in clauses (i) or (ii) for or to or in respect of any other Person including as a result of being a member of an affiliated, consolidated, combined or unitary group for any Person or by virtue of any statute (including under sections 159 and 160 of the Canadian Tax Act, and 1504 of the Code).

“Tax Authority” means any Governmental Entity, board, bureau, body, person, department or authority of any United States federal, state or local jurisdiction or any non-United States jurisdiction, having jurisdiction with respect to any Tax.

“Tax Receivables Agreement” means the tax receivables agreement, to be executed and delivered as of the Closing Date, substantially in the form attached hereto as Exhibit F.

“Tax Return” means any return, estimated tax return, report, declaration, form, claim for refund, registration, notice, designation, election or information statement (whether in tangible, electronic or other form) relating to Taxes made, prepared, filed or required to be made, prepared or filed by Law in respect of Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Term Loan Credit Agreement” means the Credit Agreement, dated as of November 13, 2020, by and among Stagwell Marketing Group, the other loan parties party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.

“Transaction Resolutions” means (i) the Redomiciliation Resolution, (ii) the Business Combination Resolution, (iii) the NASDAQ Resolution and (iv) the MDC Merger Resolution.

“Treasury Regulations” means the US Treasury Department income tax regulations promulgated under the Code.

“Undelivered Stagwell Incentive Awards” means, with respect to the transactions contemplated by item 4 of the Stagwell Restructuring, any Stagwell Incentive Award set forth on Schedule X that has not been cancelled, extinguished or otherwise terminated as of the Closing as had been contemplated by item 4 of the Stagwell Restructuring set forth on Schedule VIII.

“Undelivered Stagwell Incentive Award OpCo Units” means, with respect to any holder of Undelivered Stagwell Incentive Awards, the aggregate amount of OpCo Common Units set forth opposite such holder’s name in the column entitled “Shares Allocable (000’s)” in Schedule X.

“Undelivered Stagwell Subject Entity EBITDA” means, with respect to any Undelivered Stagwell Subject Entity Equity, the portion of the budgeted EBITDA of the relevant Stagwell Subject Entity attributable to such Undelivered Stagwell Subject Entity Equity for the twelve months ended December 31, 2020, it being agreed that the budgeted aggregate EBITDA contributed by such Stagwell Subject Entity for the twelve months ended December 31, 2020 is the amount set forth opposite its name in the column entitled “Proportional Ownership” in Schedule IX.

“Undelivered Stagwell Subject Entity Equity” means, with respect to the transactions contemplated by items 1 through 3 of the Stagwell Restructuring, any outstanding equity interest (other than a Stagwell Incentive Award) of a non-wholly owned Stagwell Subject Entity that has not been acquired as of the Closing as had been contemplated by items 1 through 3 of the Stagwell Restructuring set forth on Schedule VIII.

“Wells Fargo” means Wells Fargo Bank, N.A.

(b)                Each of the following terms is defined in the Section set forth opposite such term:

Article 2

THE TRANSACTIONS

Section 2.01            The Stagwell Restructuring; Prior to the Closing, Stagwell shall use its reasonable best efforts to effect the Stagwell Restructuring (as defined below) in accordance with Section 7.13.

Section 2.02            The MDC Pre-Redomiciliation Restructuring. Prior to the Redomiciliation, MDC shall, and shall cause its Affiliates to, undertake certain restructuring transactions as described on Schedule II (the “MDC Pre-Redomiciliation Restructuring”), provided, however, that the transactions described in Part B of Schedule II may be completed prior to or after the Closing, in MDC’s discretion.

Section 2.03            The Redomiciliation.

(a)             Subject to the satisfaction, or to the extent legally permitted, waiver of the Closing Conditions (other than the MDC Merger Approval and those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent legally permitted, waiver of those conditions at the Closing), and at least three (3) Business Days prior to the Closing, MDC shall cause the Redomiciliation to become effective, including by:

(i)                filing with the Secretary of State a certificate of corporate domestication with respect to the Redomiciliation (the “Certificate of Domestication”), in form and substance reasonably acceptable to Stagwell, together with the MDC Delaware Certificate of Incorporation, in each case, in accordance with the provisions hereof and the DGCL;

(ii)               completing and making and procuring all those filings required to be made under the CBCA in connection with the Redomiciliation, including an application for a letter of satisfaction from Corporations Canada; and

(iii)              obtaining a certificate of discontinuance (the “Certificate of Discontinuance”) from the director appointed under Section 260 of the CBCA; and

(iv)              immediately following the filing of the Certificate of Domestication and the MDC Delaware Certificate of Incorporation with the Secretary of State, causing the incorporator of MDC to adopt the MDC Delaware Bylaws as its bylaws until thereafter amended in accordance with the provisions thereof and the DGCL and appoint the directors of MDC.

(b)             In accordance with applicable Law, at the effective time of the Redomiciliation (the “Redomiciliation Effective Time”), by virtue of the Redomiciliation, and without any action on the part of any MDC Shareholder:

(i)                each MDC Class A Share outstanding immediately prior to the Redomiciliation Effective Time (excluding any Dissenting MDC Shares) shall be converted into one (1) validly issued, fully paid and non-assessable share of MDC Delaware Class A Common Stock;

(ii)               each MDC Class B Share outstanding immediately prior to the Redomiciliation Effective Time (excluding any Dissenting MDC Shares) shall be converted into one (1) validly issued, fully paid and non-assessable share of MDC Delaware Class B Common Stock;

(iii)              each MDC Series 4 Preferred Share outstanding immediately prior to the Redomiciliation Effective Time (excluding any Dissenting MDC Shares) shall be converted into one (1) validly issued, fully paid and non-assessable share of MDC Delaware Series 4 Preferred Stock; and

(iv)              each MDC Series 6 Preferred Share outstanding immediately prior to the Redomiciliation Effective Time (excluding any Dissenting MDC Shares) shall be converted into one (1) validly issued, fully paid and non-assessable share of MDC Delaware Series 6 Preferred Stock.

(c)             Each share certificate that prior to the Redomiciliation represented shares of MDC Class A Shares, MDC Class B Shares, MDC Series 4 Preferred Shares, and MDC Series 6 Preferred Shares shall thereafter, without any action on the part of any MDC Shareholder, represent that same number of shares of MDC Delaware Class A Common Stock, MDC Delaware Class B Common Stock, MDC Delaware Series 4 Preferred Stock, and MDC Delaware Series 6 Preferred Stock, respectively.

Section 2.04           The Maxxcom Restructuring. At least one (1) Business Day after the completion of the Redomiciliation and not less than two (2) Business Days prior to the Closing, MDC shall, and shall cause Maxxcom, and its Affiliates to, undertake certain restructuring transactions as described on Schedule III (such transactions, the “Maxxcom Restructuring”).

Section 2.05           New MDC Incorporation; New MDC Organizational Documents. At least one (1) Business Day following the Maxxcom Restructuring and at least one (1) Business Day prior to the Closing, (a) the New MDC Incorporation shall be effected; and (b) concurrently therewith, New MDC shall (i) adopt and file with the Secretary of State the New MDC Certificate of Incorporation, providing for, among other things, the authorization of a sufficient number of shares of New MDC Class C Common Stock to accomplish the issuance contemplated hereunder, which shares will have no economic interest but will have voting rights equal to one vote per share (voting with the New MDC Class A Common Stock as a single class) and (ii) cause the incorporator of New MDC to adopt the New MDC Bylaws and appoint directors to the board of directors of New MDC. In connection with the New MDC Incorporation each unit of New MDC previously held by MDC will be converted into one (1) share of New MDC Class A Common Stock.

Section 2.06            The MDC Merger.

(a)             Immediately following the New MDC Incorporation, on the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL and the DLLCA, (A) the MDC Merger shall be effected, at the MDC Effective Time, Merger Sub shall be merged with and into MDC, whereupon the separate existence of Merger Sub shall cease, and MDC shall continue as the surviving corporation in the MDC Merger (the “Surviving Corporation”) and (B) New MDC will purchase from MDC, and MDC shall sell, all shares of New MDC Class A Stock held by MDC for an aggregate purchase price of $10 MDC shall, and shall cause Merger Sub and New MDC to, cause the MDC Merger to become effective, including by:

(i)                 filing with the Secretary of State a certificate of merger for the MDC Merger (the “MDC Merger Certificate of Merger”), in form and substance reasonable acceptable to Stagwell, in accordance with the provisions hereof and the DGCL and the DLLCA, to be filed with the Secretary of State in accordance with the relevant provisions of the DGCL and the DLLCA; and

(ii)                completing and making all filings required to be made with the SEC and NASDAQ to list the New MDC Class A Common Stock on NASDAQ.

(b)            The MDC Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL and the DLLCA and, without limiting the foregoing, from and after the MDC Effective Time, the Surviving Corporation shall possess all the rights, privileges, immunities and franchises, of a public as well as a private nature, and shall be subject to all liabilities, obligations and penalties of MDC and Merger Sub. The MDC Merger shall become effective at the date and time of the filing of the MDC Merger Certificate of Merger with the Secretary of State, or such later time as may be agreed by the parties hereto and specified in the MDC Merger Certificate of Merger (such time being the “MDC Effective Time”).

(c)             Unless and until amended in accordance with applicable Law and the terms of this Agreement, (a) the certificate of incorporation of MDC as in effect immediately prior to the MDC Effective Time shall be the certificate of incorporation of the Surviving Corporation and (b) the bylaws of MDC as in effect immediately prior to the MDC Effective Time shall be the bylaws of the Surviving Corporation.

(d)            The directors of MDC immediately prior to the MDC Effective Time shall continue to be the directors of the Surviving Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation and until their respective successors are duly elected and qualified or until each such director’s earlier death, resignation or removal, and the officers of MDC immediately prior to the MDC Effective Time shall continue to be the officers of the Surviving Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation and until their respective successors are duly elected and qualified or until each such officer’s earlier death, resignation or removal.

(e)             In accordance with applicable Law, at the MDC Effective Time, by virtue of the MDC Merger, and without any action on the part of MDC, Merger Sub or any MDC Delaware Stockholder:

(i)                 each share of MDC Delaware Class A Common Stock outstanding immediately prior to the MDC Effective Time shall be converted into the right to receive one (1) validly issued, fully paid and non-assessable share of New MDC Class A Common Stock;

(ii)               each share of MDC Delaware Class B Common Stock outstanding immediately prior to the MDC Effective Time (other than Appraisal Shares) shall be converted into the right to receive one (1) validly issued, fully paid and non-assessable share of New MDC Class B Common Stock;

(iii)              each share of MDC Delaware Series 4 Preferred Stock outstanding immediately prior to the MDC Effective Time (other than Appraisal Shares) shall be converted into the right to receive one (1) validly issued, fully paid and non-assessable share of New MDC Series 4 Preferred Stock; and

(iv)              each share of MDC Delaware Series 6 Preferred Stock outstanding immediately prior to the MDC Effective Time (other than Appraisal Shares) shall be converted into the right to receive one (1) validly issued, fully paid and non-assessable share of New MDC Series 6 Preferred Stock.

(f)             In accordance with applicable Law, at the MDC Effective Time, by virtue of the MDC Merger, and without any action part of MDC, Merger Sub or any MDC Intermediate Stockholder, all of the limited liability company interests of Merger Sub that are outstanding immediately prior to the MDC Effective Time shall be converted into one (1) validly issued, fully paid and non-assessable share of Class A Common Stock of the Surviving Corporation.

(g)            Following the MDC Effective Time, each holder of MDC Incentive Awards will hold the same number of MDC Incentive Awards as such holder held immediately prior to the MDC Effective Time, except that the security referenced under or issuable upon exercise or settlement of such MDC Incentive Award will be New MDC Common Stock (or, as applicable, the cash equivalent) rather than MDC Common Shares (or, as applicable, the cash equivalent). Except as specifically provided in this Section 2.06(f), following the MDC Effective Time, each MDC Incentive Award shall continue to be governed by the same terms and conditions as were applicable to such MDC Incentive Award immediately prior to the MDC Effective Time. Prior to the MDC Effective Time, MDC shall take commercially reasonable actions, including obtaining necessary consents and/or amending and/or interpreting any provision of the MDC Incentive Awards, the MDC Stock Plans or agreements governing the terms and conditions of the MDC Incentive Awards, to effectuate the provisions of this Section 2.06(f) (including approval of the MDC Board or an authorized committee thereof).

(h)            Notwithstanding anything in this Agreement to the contrary, shares of MDC Delaware Class B Common Stock or MDC Delaware Preferred Stock that are outstanding immediately prior to the MDC Effective Time and that are held by any holder who has not voted in favor of the MDC Merger or consented thereto in writing, has not waived appraisal rights in connection with the MDC Merger, and properly demands appraisal of such shares pursuant to, and in accordance with, Section 262 of the DGCL (“Appraisal Shares”) shall not be converted into the right to receive the consideration set forth in Section 2.06(e), but instead shall be entitled to only those rights as are granted by Section 262 of the DGCL; provided, however, that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262 of the DGCL, or a court of competent jurisdiction shall determine such holder is not entitled to the relief provided by Section 262 of the DGCL, then the right of such holder to be paid the fair value of such holder’s Appraisal Shares under Section 262 of the DGCL shall cease and such Appraisal Shares shall thereupon be deemed to have been converted as of the MDC Effective Time into, and shall represent only the right to receive, the consideration set forth in Section 2.06(e) upon the surrender of such shares in the manner provided in this Agreement.

Section 2.07           The MDC Conversion. Immediately following the completion of the MDC Merger, (a) New MDC shall cause MDC to file with the Secretary of State a certificate of conversion (the “MDC Certificate of Conversion”) and a certificate of formation (the “MDC Certificate of Formation”) in accordance with the DGCL and the DLLCA and convert from a corporation into a Delaware limited liability company, OpCo (the “MDC Conversion”) effective as of immediately after the MDC Merger, and pursuant to which (i) all of the outstanding shares of the Surviving Corporation shall be converted into membership interests of MDC OpCo LLC comprised of the OpCo Series 4 Preferred Units, the OpCo Series 6 Preferred Units and a number of OpCo Common Units equal to the number of outstanding shares of New MDC Common Stock (calculated on a fully diluted basis, taking into account, without duplication, (i) each MDC Incentive Award that is or will be outstanding immediately following the Closing and is or will be convertible, exchangeable or settled into shares of New MDC Common Stock and (ii) shares of New MDC Common Stock issuable as deferred compensation, “earn-outs,” earn-in credits or other contingent consideration, but in each case without giving effect to any conversion of New MDC Series 4 Preferred Stock or New MDC Series 6 Preferred Stock into New MDC Common Stock); and (b) New MDC, as the sole member of OpCo, will adopt, and OpCo will thereafter be governed by, the Initial OpCo Operating Agreement until thereafter amended as provided therein or by applicable Law.

Section 2.08           The Midas Corporate HoldCo Formation. After the MDC Conversion and at least one (1) Business Day prior to the Stagwell Contribution, New MDC shall, and shall cause its Affiliates to, undertake certain restructuring transactions as described on Schedule IV (the “Midas Corporate HoldCo Formation”).

Section 2.09            The Stagwell Contribution.

(a)            At the Closing, at least one (1) Business Day following the Midas Corporate HoldCo Formation, (i)(A) Stagwell shall contribute to OpCo, and OpCo shall accept, the issued and outstanding equity interest of SMGH (the “SMGH Interest”), free and clear of all Liens (other than Securities Liens and Credit Agreement Liens) and together with all accrued rights and benefits attached thereto, and immediately thereafter (the “Stagwell Contribution”); and (B) in exchange therefor, OpCo shall issue to Stagwell, and Stagwell shall accept, the Stagwell Contribution Consideration, free and clear of all Liens (other than Securities Liens); and (ii) Stagwell and MDC, as the only members of OpCo, shall adopt, and OpCo shall thereafter be governed by, the A&R OpCo Operating Agreement until thereafter amended as provided therein or by applicable law.

(b)            Following the Stagwell Contribution, SMGH and OpCo shall, and shall cause their Affiliates to, undertake certain restructuring transactions as described on Schedule VI (collectively, the “SMGH Reorganization”).

(c)            At the Closing, Stagwell shall contribute to New MDC an aggregate amount of cash equal to $100 in exchange for a number of shares of New MDC Class C Common Stock equal to the number of Stagwell OpCo Units.

Section 2.10           Withholding Taxes. Each of Stagwell, MDC, OpCo and New MDC shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Agreement such amounts as are required to be withheld or deducted under the Code, or any applicable provisions of state, local or foreign Tax Law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding were made.

Section 2.11            Dissent Rights. Holders of MDC Common Shares or MDC Preferred Shares may exercise rights of dissent (“Dissent Rights”) (in each case, to the extent not waived pursuant to the Stagwell Consent or the Goldman Consent, as applicable) in accordance with the procedures, and subject to the limitations, set out in Section 190 of the CBCA.

Article 3

CLOSING

Section 3.01           Closing. Subject to the terms and conditions of this Agreement, the closing of the Stagwell Contribution (the “Closing”) shall take place at the offices of Freshfields Bruckhaus Deringer US LLP, located at 601 Lexington Avenue, 31st Floor, New York, New York, 10022, or remotely by electronic exchange of executed documents, at 10:00 a.m. (New York City time) on the day that is five (5) Business Days after the day on which all of the conditions set forth in Article 8 (the “Closing Conditions”) have been satisfied, or to the extent legally permitted, waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent legally permitted, waiver of those conditions at the Closing).

Section 3.02           Stagwell Closing Deliverables. At least three (3) Business Days prior to the Closing , Stagwell will deliver, or cause to be delivered, to MDC or New MDC, in escrow (to be released automatically as of the Closing), the following:

(a)            membership interest power or other instrument of transfer duly executed in blank with respect to the SMGH Interest;

(b)            a certificate, dated as of the Closing Date, signed by a senior executive officer of Stagwell certifying to the effect that the conditions set forth in each of Section 8.03(a), Section 8.03(b) and Section 8.03(d) with respect to Stagwell have been satisfied;

(c)            duly executed counterparts of each of the Ancillary Agreements; and

(d)            a duly executed IRS Form W-9, Request for Taxpayer Identification Number and Certification, dated as of the Closing Date that satisfies the requirements of Treasury Regulation Sections 1.1445-2(b)(2)(v) and 1.1446(f)-5(b) with respect to Stagwell.

Section 3.03           MDC Closing Deliverables. At least three (3) Business Days prior to the Closing, MDC or New MDC will deliver, or cause to be delivered, to Stagwell, in escrow (to be released automatically as of the Closing), the following:

(a)            evidence of shares issued in the name of Stagwell representing the New MDC Class C Common Stock issuable by New MDC pursuant to Section 2.09;

(b)            a certificate, dated as of the Closing Date, signed by a senior executive officer of MDC or New MDC certifying to the effect that the conditions set forth in each of Section 8.02(a), Section 8.02(b) and Section 8.02(d) have been satisfied;

(c)            true and correct copies of (i) the file-stamped Certificate of Domestication and (ii) the Certificate of Discontinuance, as finally issued;

(d)           duly executed counterparts of each of the Ancillary Agreements;

(e)           a copy of the Payoff Letter with respect to the MDC Credit Agreement duly executed by each of the parties thereto;

(f)             either (i) a copy of the Senior Note Consent in the event the Senior Note Consent has been obtained or (ii) in the event a Senior Notes Refinancing is consummated, an executed letter with respect to the Senior Notes and the Senior Note Indenture in form and substance customary for such financings from the trustee under the Senior Note Indenture on behalf of the Senior Note holders, which letter together with any related release documentation shall, among other things include the payoff amount and provide that guarantees, if any, granted in connection with the Senior Note Indenture shall, upon the payment of the amount set forth in the letter at or prior to the Closing, be released and terminated; and

(g)            the MDC Merger Certificate of Merger evidencing the MDC Merger, duly executed, acknowledged and filed with the Secretary of State.

Article 4

REPRESENTATIONS AND WARRANTIES OF MDC

Except as set forth in (a) the correspondingly numbered sections of the disclosure letter delivered by MDC to Stagwell at or prior to the execution and delivery of this Agreement (the “MDC Disclosure Letter”), but subject to Section 11.12, or (b) the MDC SEC Documents filed with the SEC on or after January 1, 2019 and publicly available at least one (1) Business Day prior to the date hereof (excluding any disclosure set forth in any risk factor or “forward-looking statements” section and any other disclosure to the extent it is a prediction or forward-looking in nature, the “Specified MDC SEC Disclosure”) (provided no such disclosure shall be deemed to modify or qualify any of Section 4.01, Section 4.02, Section 4.03, Section 4.04 or Section 4.11), MDC represents and warrants to Stagwell as follows:

Section 4.01            Organization, Good Standing and Qualification.

(a)            Each of MDC and its Subsidiaries (the “MDC Subsidiaries”) is a corporation, limited liability company, limited partnership, partnership or other entity duly organized and validly existing under the Laws of its respective jurisdiction of organization and has all requisite entity power and authority to own, operate and lease its properties and assets in the manner in which its properties and assets are currently owned, operated and leased and to carry on its business as now conducted.

(b)            Each of MDC and the MDC Subsidiaries is duly qualified and/or licensed, as may be required, to do business and in good standing (where applicable or recognized) in each of the jurisdictions in which the nature of its business or the character of its owned, leased or used properties makes such qualification and/or licensing necessary, except where the failure to be so qualified and/or licensed would not reasonably be expected to have an MDC Material Adverse Effect or prevent, materially delay or materially impair the ability of MDC, New MDC or Merger Sub to timely consummate the Transactions.

(c)            The copies of the articles of amalgamation, as amended, and bylaws of MDC, each of which are incorporated by reference as an exhibit to the annual report on the MDC 10-K (the “MDC Governing Documents”), are complete and correct copies of such documents in full force and effect on the date of this Agreement, and MDC is not in violation of any of the provisions thereof. MDC has made available to Stagwell complete and correct copies of each of the MDC Subsidiaries’ certificate of incorporation and by-laws or comparable governing documents (together with the MDC Governing Documents, the “MDC Organizational Documents”), in each case as amended to the date of this Agreement, and each as so delivered is in full force and effect, and no such MDC Subsidiary is in violation in any material respect of any of the provisions thereof.

Section 4.02            Capitalization.

(a)            Prior to the Redomiciliation, the authorized share capital of MDC consists of (i) unlimited MDC Class A Shares, (ii) unlimited MDC Class B Shares, (iii) unlimited preference shares, issuable in series, including (A) 5,000 Series 1 preference shares, (B) 700,000 Series 2 preference shares, (C) an unlimited number of Series 3 preference shares, (D) 95,000 Series 4 preference shares, (E) an unlimited number of Series 5 preference shares, (F) 50,000 Series 6 preference shares, and (G) an unlimited number of Series 7 preference shares. As of the close of business on December 17, 2020, there were (1) 73,309,337 MDC Class A Shares issued and outstanding, (2) 3,743 MDC Class B Shares issued and outstanding, (3) no Series 1 preference shares issued and outstanding; (4) no Series 2 preference shares issued and outstanding; (5) no Series 3 preference shares issued and outstanding; (6) 95,000 Series 4 preference shares issued and outstanding; (7) no Series 5 preference shares issued and outstanding; (8) 50,000 Series 6 preference shares issued and outstanding; (9) no Series 7 preference shares issued and outstanding; (10) 3,294,269 MDC Class A Shares underlying outstanding awards of performance stock units, restricted stock units and awards of restricted stock under the MDC Stock Plans and MDC Incentive Awards; (11) 2,325,800 outstanding options and stock appreciation rights awards issued under the MDC Stock Plans and MDC Incentive Awards; and (12) 600,000 MDC Class A Shares reserved for issuance to satisfy deferred acquisition-related obligations. Section 4.02(a) of the MDC Disclosure Letter sets forth a true, correct and complete list of the MDC Incentive Awards as of the date hereof, including, with respect to each such award, the name of the holder thereof, the number of MDC Common Shares subject to each such award and the vesting schedule (including any performance conditions) thereof. After the Redomiciliation, the authorized share capital of MDC will be as set forth in the MDC Intermediate Certificate of Incorporation.

(b)            All outstanding MDC Common Shares have been, and all of the New MDC Common Stock required to be issued pursuant to this Agreement will be, when issued in accordance with and subject to the terms and conditions hereof, duly authorized, validly issued, fully paid and nonassessable, and are not, or will not be when issued, subject to and were not issued in violation of any pre-emptive or similar right, purchase option, call or right of first refusal or similar right. All of the shares of capital stock described in this Section 4.02(b) were issued, or will be issued, in material compliance with applicable Laws (including securities Laws).

(c)            Except as set forth in this Section 4.02, MDC has not issued any securities, the holders of which have the right to vote with the shareholders of MDC on any matter.

(d)            Except as provided in this Agreement or permitted pursuant to Section 6.01(a), and except as set forth in or contemplated by this Section 4.02 or as reflected under “redeemable noncontrolling interests” or “noncontrolling interests” in the audited consolidated financial statements of MDC set forth in the MDC 10-K, there are no existing options, units, warrants, calls, pre-emptive (or similar) rights, subscriptions, phantom stock, phantom rights, stock appreciation rights, restricted stock, restricted stock units, incentive units, earn-in credits or any other equity or equity-based compensation or any other rights, Contracts, arrangements or commitments of any kind (including shareholders agreements, voting trusts or similar Contracts) relating to any equity interests of MDC or any MDC Subsidiary or obligating MDC or any MDC Subsidiary to issue, transfer or sell, or cause to be issued, transferred or sold, any equity interests of MDC or such MDC Subsidiary or any securities convertible into or exchangeable for such equity interests or similar profit participation rights, and there are no current outstanding contractual obligations of MDC or any MDC Subsidiary to repurchase, redeem or otherwise acquire any of its equity interests or any securities convertible into or exchangeable for such equity interests or similar profit participation rights, in each case other than in relation to obligations to pay deferred acquisition consideration as set forth in the MDC 10-K.

Section 4.03            Authorization; No Conflict; Board Recommendation.

(a)            Each of MDC, New MDC and Merger Sub has the requisite power and authority to enter into and deliver this Agreement and all other agreements and documents contemplated hereby to which it is a party and to consummate the Transactions, subject, in the case of the consummation of the Transactions (other than the MDC Merger), only to receipt of the MDC Special Meeting Approval and, in the case of the consummation of the MDC Merger, only to receipt of the MDC Merger Approval. The execution and delivery of this Agreement by MDC, New MDC and Merger Sub, the performance by MDC, New MDC and Merger Sub of its obligations hereunder and the consummation by MDC, New MDC and Merger Sub of the Transactions have been duly and validly approved by the MDC Board and by the sole member and manager of each of New MDC and Merger Sub, as applicable. No other corporate, limited liability company or other action on the part of MDC, New MDC or Merger Sub other than (i) in respect of the MDC Merger only, (1) the MDC Delaware Board Approvals and the MDC Merger Approval, (2) the approval and authorization by the New MDC Board of the issuance of New MDC Common Stock and New MDC Preferred Stock in connection with the Transactions following the New MDC Incorporation, and (ii) with respect to all the Transactions, the MDC Special Meeting Approval, are necessary to authorize the execution, delivery and performance of this Agreement by MDC, New MDC and Merger Sub and the consummation by MDC, New MDC and Merger Sub of the Transactions.

(b)            This Agreement has been duly executed and delivered by MDC, New MDC and Merger Sub and, assuming due authorization, execution and delivery by Stagwell, constitutes a valid and binding obligation of each of MDC, New MDC and Merger Sub enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at Law).

(c)            None of the execution and delivery of this Agreement by MDC, New MDC or Merger Sub, the consummation by MDC, New MDC or Merger Sub of the Transactions or compliance by MDC, New MDC or Merger Sub with any of the provisions herein will (i) result in a violation or breach of or conflict with any of the MDC Organizational Documents, (ii) (A) result in a violation or breach of or conflict with any provisions of, (B) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (C) result in the termination or cancellation of, give rise to a right of purchase under, (D) accelerate the performance required by MDC or any MDC Subsidiaries under, (E) result in a right of termination or acceleration under, (F) result in the creation of any Lien (other than a Permitted Lien) upon any of the properties or assets owned or operated by MDC or any MDC Subsidiary under, (G) result in being declared void, voidable, or without further binding effect under, any of the terms, conditions or provisions of, any Contract to which MDC or any MDC Subsidiary is a party or by which MDC or any MDC Subsidiary or any of their respective properties or assets may be bound, or (iii) subject to obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in Section 4.03(g), violate any Laws applicable to MDC or any of the MDC Subsidiaries or any of their respective properties or assets, other than any such event described in clause (i) (only with respect to any MDC Subsidiary), (ii) or (iii) which would not reasonably be expected to have an MDC Material Adverse Effect or prevent, materially delay or materially impair the ability of MDC, New MDC or Merger Sub to timely consummate the Transactions.

(d)            The MDC Special Committee has unanimously (i) determined that it is in the best interests of MDC, and declared it advisable, to recommend that MDC enter into this Agreement and consummate the Transactions, (ii) recommended that the MDC Board approve the execution, delivery and performance by MDC of this Agreement and the consummation of the Transactions and (iii) resolved, subject to the MDC Board approving the execution, delivery and performance by MDC of this Agreement and the consummation of the Transactions, to recommend the shareholders of MDC approve the Transaction Resolutions. The MDC Board (upon the recommendation of the MDC Special Committee) has, by resolutions duly adopted by the requisite vote of the directors and not subsequently rescinded or modified in any way, unanimously (with Mark Penn, Charlene Barshefsky and Bradley Gross abstaining from voting on, or participating in any deliberations with respect to the Transactions) (i) determined that it is in the best interests of MDC and its shareholders (other than the Interested Shareholders), and declared it advisable, to enter into this Agreement and consummate the Transactions, (ii) approved the execution, delivery and performance by MDC of this Agreement and the consummation of the Transactions, and (iii) resolved to recommend that the shareholders of MDC vote for the Transaction Resolutions. The MDC Special Committee has received (A) independent legal advice from DLA Piper, (B) from the MDC Financial Advisor an opinion, dated as of the date of this Agreement, that as of such date and based upon and subject to the limitations and assumptions set forth therein, the percentage ownership of MDC to be held by the holders of MDC Common Shares upon completion of the Transaction is fair, from a financial point of view, to the holders of MDC Common Shares (other than the Interested Shareholders) and (C) from the Second MDC Financial Advisor, (a) an opinion, dated as of the date of this Agreement, that as of such date and based upon and subject to the limitations and assumptions set forth therein, and such other matters as the Second MDC Financial Advisor considered relevant, the consideration to be paid by MDC for the Stagwell Subject Entities pursuant to this Agreement is fair, from a financial point of view, to the holders of MDC Class A Shares (other than Mark Penn, Stagwell, Goldman Sachs and their Affiliates) and (b) the Formal Valuation, in each case a written copy of which will be provided to Stagwell as soon as practicable after the execution and delivery hereof, solely for informational purposes.

(e)            (i) The MDC Special Meeting Approval is the only vote required of the holders of any class or series of MDC capital stock that shall be necessary to adopt the resolutions providing for the consummation of the Transactions, including the Redomiciliation Resolution, the Business Combination Resolution and the NASDAQ Resolution, and (ii) the MDC Merger Approval is the only vote required of the holders of any class or series of MDC or MDC Delaware capital stock that shall be necessary to effect the MDC Merger.

(f)             The MDC Board has, and following the Redomiciliation will have, taken all action necessary to exempt under and not make subject to any takeover Law or other Law that limits or restricts business combinations or the ability to acquire or vote shares: (a) the execution of this Agreement and (b) the Transactions. The New MDC Certificate of Incorporation will opt out of Section 203 of the DGCL. MDC has no shareholder rights plan, “poison pill” or similar agreement or arrangement in effect.

(g)             Except for filings, permits, authorizations, consents, approvals and other applicable requirements as may be required under the Securities Act, the Exchange Act, state securities or blue sky laws, the HSR Act or the Investment Canada Act, and the filing of (i) the Certificate of Domestication, (ii) the MDC Delaware Certificate of Incorporation, (iii) the MDC Merger Certificate of Merger, (iv) the New MDC Certificate of Incorporation, (v) the MDC Certificate of Conversion and the certificates of conversion described in Schedule III in connection with the Maxxcom Restructuring and (vi) the MDC Certificate of Formation with the Secretary of State and the filings required to be made under the CBCA in connection with the Redomiciliation, no filing with or notice to, and no permit, authorization, consent or approval of, any Governmental Entity is necessary for the execution and delivery by MDC of this Agreement or the consummation by MDC of the Transactions.

Section 4.04            Subsidiaries.

(a)             Section 4.04(a) of the MDC Disclosure Letter sets forth, as of the date of this Agreement, the name and jurisdiction of organization of each (i) MDC Subsidiary, (ii) entity (other than the MDC Subsidiaries) in which MDC or any MDC Subsidiary owns any interest, and (iii) MDC’s percentage aggregate direct or indirect record and beneficial ownership of each such entity as of the date hereof (other than, in the case of this clause (iii), with respect to non-material interests).

(b)             All of the outstanding shares of capital stock or other equity securities of, or other ownership interests in, (i) each MDC Subsidiary, and (ii) each other Person that is a legal entity in which MDC has an equity ownership interest are duly authorized, validly issued, fully paid up and, in the case of all corporate MDC Subsidiaries, nonassessable (in jurisdictions that recognize such concepts), and such shares, securities or interests are owned by MDC or by an MDC Subsidiary free and clear of any Liens (other than Securities Liens and Credit Agreement Liens) or limitations on voting rights. Except as set forth on Section 4.04(b) of the MDC Disclosure Letter, there are no subscriptions, options, units, warrants, calls, rights, convertible securities, phantom stock, stock appreciation rights, or any other equity or equity-based compensation or other Contracts relating to the issuance, transfer, sales, delivery, voting or redemption (including any rights of conversion or exchange under any outstanding security or other instrument) for any of the capital stock or other equity interests of, or other ownership interests in, any MDC Subsidiaries.

(c)             Each of New MDC and Merger Sub has been formed solely for the purpose of engaging in the Transactions, and, each of New MDC and Merger Sub has not conducted any business, incurred or guaranteed any indebtedness or any other liabilities or made any investments, other than those activities incident to its formation or its obligations under this Agreement or the Transactions.

Section 4.05            SEC Documents; Financial Statements and Internal Controls.

(a)             MDC has filed or furnished, as applicable, (A) its annual report on Form 10-K for the fiscal year ended December 31, 2019, (B) its quarterly reports on Form 10-Q for its fiscal quarters ended September 30, 2020, June 30, 2020, and March 31, 2020, (C) its proxy statement relating to the annual meeting of the shareholders of MDC held in 2020, and (D) all other forms, reports, schedules and other statements required to be filed or furnished by it with the SEC under the Exchange Act or the Securities Act since January 1, 2019 (collectively, as such document may have been supplemented, modified or amended since the initial filing date and together with all exhibits thereto and information incorporated by reference therein, the “MDC Reports”). As of its respective date, and, if amended, as of the date of the last such amendment, each MDC Report complied in all material respects as to form with the applicable requirements of the Securities Act and the Exchange Act, and any rules and regulations promulgated thereunder applicable to such MDC Report. As of its respective date, and, if amended, as of the date of the last such amendment, no MDC Report contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances in which they were made, not misleading.

(b)             The MDC Audited Financial Statements and the MDC Unaudited Financial Statements have been prepared in accordance with GAAP applied on a consistent basis (except as may be indicated in the notes thereto) and present fairly in all material respects the financial position, results of operations and cash flows of MDC and the MDC Subsidiaries as of the dates and for the respective periods shown.

(c)             As of the date hereof, (i) there are no outstanding or unresolved comments in comment letters received by MDC from the SEC with respect to the MDC Reports and (ii) to the knowledge of MDC, none of the MDC Reports is the subject of any ongoing review by the SEC. Since January 1, 2019, MDC’s independent public accounting firm has not informed MDC in writing that it has any material disagreements with, regarding or pertaining to MDC’s accounting policies or practices which are unresolved as of the date of this Agreement.

(d)             With respect to each annual report on Form 10-K, each quarterly report on Form 10-Q and each amendment of any such report included in the MDC Reports, the principal executive officer and principal financial officer of MDC have made all certifications (without qualifications or exceptions to the matters certified) required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and any related rules and regulations promulgated by the SEC, and the statements contained in any such certifications are complete and correct. As of the date of this Agreement, other than any matters that do not remain the subject of any open or outstanding inquiry, neither MDC nor its officers have received written notice from the SEC questioning or challenging the accuracy, completeness or form of such certificates. “Principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act. To the knowledge of MDC, as of the date hereof, MDC is in compliance with Section 404 of the Sarbanes-Oxley Act.

(e)             MDC has established and maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act); such disclosure controls and procedures are reasonably designed to ensure that all information (both financial and non-financial) relating to MDC and the MDC Subsidiaries required to be disclosed in MDC’s reports required to be filed with or submitted to the SEC pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to MDC’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the chief executive officer and chief financial officer of MDC required under the Exchange Act with respect to such reports. MDC has disclosed, based on its most recent evaluation of such disclosure controls and procedures prior to the date of this Agreement, to MDC’s auditors and the audit committee of the MDC Board and on Section 4.05(e) of the MDC Disclosure Letter (i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect MDC’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in MDC’s internal control over financial reporting.

(f)              During the past five (5) years, no director or officer of MDC or any MDC Subsidiary, or to the knowledge of MDC, any non-officer employees, external auditor, external accountant or similar authorized representative of MDC or any MDC Subsidiary, has received or otherwise been made aware of any material complaint, allegation or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of MDC or any MDC Subsidiary or their respective internal accounting controls, including any complaint, allegation or claim that any of MDC or the MDC Subsidiaries engaged in accounting or auditing practices that represent a violation of applicable Law.

(g)             MDC is in compliance in all material respects with (i) all current listing and corporate governance requirements of NASDAQ and (ii) all rules, regulations and requirements of the Sarbanes-Oxley Act and the SEC.

Section 4.06            Absence of Changes. Since the MDC Audited Balance Sheet Date through the date hereof, (a) there has not been any MDC Material Adverse Effect, and no event has occurred or circumstance arisen that, in combination with any other events or circumstances, would reasonably be expected to have or result in an MDC Material Adverse Effect; (b) none of MDC or any MDC Subsidiary has taken any action, or authorized, approved, committed or agreed to take any action that, if taken between the date hereof and the Closing Date, would require Stagwell’s consent under Section 6.01(b); and (c) MDC and the MDC Subsidiaries have conducted their business in the ordinary course of business consistent with past practice.

Section 4.07            Litigation. As of the date hereof, there are no suits, actions or legal, administrative, arbitration or other hearings, proceedings or governmental investigations (“Proceedings”) pending or, to the knowledge of MDC, threatened against MDC or any of the MDC Subsidiaries or any of their respective properties or assets or any director, officer or employee of MDC or any MDC Subsidiary (i) for which MDC or any MDC Subsidiary may be liable that would reasonably be expected to have an MDC Material Adverse Effect or (ii) that challenges or seeks to prevent, enjoin or otherwise delay the Transactions, and, in each case, to the knowledge of MDC, there are no presently existing facts or circumstances that would constitute a reasonable basis therefor. As of the date hereof, there are no judgments, decrees, injunctions, awards or orders of any Governmental Entity outstanding against MDC or any of the MDC Subsidiaries that would reasonably be expected to have an MDC Material Adverse Effect or prevent, materially delay or materially impair the ability of MDC, New MDC or Merger Sub to timely consummate the Transactions.

Section 4.08             Information Supplied.

(a)             None of the information supplied or to be supplied by MDC for inclusion or incorporation by reference in (a) New MDC’s registration statement on Form S-4 (the “Registration Statement”) to be filed jointly by MDC and New MDC in connection with the Transactions will, at the time the Registration Statement is filed with the SEC and at the time it becomes effective under the Securities Act, and (b) the proxy statement relating to the Special Meeting to be held in connection with the Transactions (the “Combined Proxy Statement/Prospectus”) will, (i) as of the date of its filing, (ii) at the time it becomes effective, (iii) as of the date the Combined Proxy Statement/Prospectus is mailed to shareholders of MDC, or (iv) at the time of the meeting of shareholders of MDC to be held in connection with the Transactions, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

(b)             The portions of the Combined Proxy Statement/Prospectus supplied by MDC will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. No representation or warranty is made by MDC with respect to information regarding the Stagwell Subject Entities incorporated by reference in the Combined Proxy Statement/Prospectus or supplied by Stagwell or any of the Stagwell Subject Entities specifically for inclusion in the Combined Proxy Statement/Prospectus.

Section 4.09            No Undisclosed Liabilities. MDC and the MDC Subsidiaries do not have any obligation or liability of any nature (whether accrued, absolute, contingent or otherwise) (“Liabilities”) required by GAAP to be recognized on a condensed consolidated statement of financial position of MDC, except (a) as reflected, reserved or disclosed in the financial statements (or the notes thereto) included in the MDC Reports as at and for the year ended December 31, 2019 or the 9-month period ended September 30, 2020, (b) as incurred since December 31, 2019 in the ordinary course of business, (c) as incurred in accordance with this Agreement or in connection with the Transactions, (d) that are obligations to perform pursuant to the terms of any of the MDC Material Contracts or (e) as would not constitute an MDC Material Adverse Effect.

Section 4.10            Senior Notes. The holders of a majority in aggregate principal amount of the outstanding Senior Notes have entered into the Note Consent Agreements, and the Note Consent Agreements are, as of the date hereof, in full force and effect. No other action is required to be taken by MDC in connection with the Senior Notes to prevent the triggering of any redemption or other similar rights thereunder in connection with the Transactions other than the launch and consummation of the Consent Solicitation and any actions required to implement the amendments and waivers approved pursuant to the Consent Solicitation, including the execution of a supplemental indenture.

Section 4.11            Broker’s Fees. Except for (i) Moelis & Company (the “MDC Financial Advisor”) and (ii) Canaccord Genuity Corp. (the “Second MDC Financial Advisor”), each of which shall be entitled to fees and commissions not in excess of the compensation set forth on Section 4.11 of the MDC Disclosure Letter, no agent, broker, Person or firm acting on behalf of MDC or any MDC Subsidiary or under MDC’s or any MDC Subsidiary’s authority is or will be entitled to any advisory, commission or broker’s or finder’s fee or commission from any of the parties hereto in connection with any of the Transactions. MDC will promptly after the execution of this Agreement provide to Stagwell complete and correct copies of the engagement letter agreements related to such fees or commissions entered into by and between MDC and the MDC Financial Advisor or the Second MDC Financial Advisor, as applicable.

Section 4.12             Labor Matters.

(a)             Neither MDC nor any MDC Subsidiary (i) is a party to any collective bargaining, works council, information and consultation or other Contracts with any labor organization or union or other employee representative or organization (and no such Contract is currently being requested by, or is under discussion by management with, any employee, group of employees or others), or (ii) is obligated by, or subject to, any order of the National Labor Relations Board or other labor board or administration, or any unfair labor practice decision, or any similar order or decision in any jurisdiction.

(b)             Except as would not reasonably be expected to have an MDC Material Adverse Effect, neither MDC nor any MDC Subsidiary is a party or subject to any pending or, to the knowledge of MDC, threatened labor or civil rights dispute, controversy or grievance or any unfair labor practice charge or proceeding with respect to claims of, or obligations of, any employee or group of employees.

(c)             There are no labor unions, works council or other similar representative or organizations, representing or, to MDC’s knowledge, purporting to represent any employees of MDC or the MDC Subsidiaries and neither MDC nor any MDC Subsidiary has received any notice that any labor representation request is pending or is threatened with respect to any employees of MDC or the MDC Subsidiaries. Neither MDC nor any MDC Subsidiary is subject to any pending or, to the knowledge of MDC, threatened, strikes, slowdowns, lockouts, walkouts work stoppages or any other industrial action in any jurisdiction.

(d)             Except as would not reasonably be expected to have an MDC Material Adverse Effect, MDC and each of the MDC Subsidiaries are, and during the last five (5) years have been, in compliance with all applicable foreign, federal, state and local Laws respecting labor, employment and employment practices, including terms and conditions of employment, wages and hours, holiday pay, discrimination, equal pay, disability, workers compensation, wrongful discharge, immigration and occupational safety and health, and there are no claims, suits, disputes, actions, grievances, audits or investigations or disciplinary actions by any Governmental Entity or any current or former employee, director, or individual independent contractor of MDC or any MDC Subsidiary pending or, to the knowledge of MDC, threatened against any MDC or any MDC Subsidiary with respect to the employment or termination of any employee or individual independent contractor of MDC or any MDC Subsidiary (including with respect to any of the topics referenced in this Section 4.12(d)). Except as would not reasonably be expected to have an MDC Material Adverse Effect, all individuals who perform or have performed services for MDC or any MDC Subsidiary have been properly classified under applicable Law as employees or independent contractors to the extent applicable, and, for employees, as an “exempt” or “nonexempt” employee (within the meaning of the Fair Labor Standards Act and applicable state Law) to the extent applicable. Neither MDC nor any MDC Subsidiary maintains any leased employees.

(e)             Except as would not reasonably be expected to have an MDC Material Adverse Effect, to the knowledge of MDC, in the last five (5) years, no allegations, claims or reports of sexual or other unlawful harassment or discrimination or retaliation have been made against (i) any officer or other key employee of MDC or any MDC Subsidiary or (ii) any employee of MDC or any MDC Subsidiary who is currently at a level of Vice President or above.

(f)              Except as would not reasonably be expected to have an MDC Material Adverse Effect, neither MDC nor any MDC Subsidiary has, during the last three (3) years, effectuated a “plant closing” or “mass layoff” (each as defined in the Worker Adjustment and Retraining Notification Act (“WARN”) or any similar concept under applicable Laws) that would trigger a notice requirement under WARN or to any Governmental Entity, or taken any other action that would trigger a notice requirement under any similar state or local Law and no layoffs that could implicate any such applicable Laws are currently contemplated by MDC.

(g)             Except as would not reasonably be expected to have an MDC Material Adverse Effect, each of MDC and the MDC Subsidiaries (i) is and at all relevant times has been in compliance with COVID-19 related safety and health Laws and guidance issued and enforced by the Occupational Safety and Health Administration (“OSHA”) and the applicable foreign, federal, state or local Governmental Entity, and with the paid and unpaid leave requirements of the Families First Coronavirus Response Act and any similar Laws in other jurisdictions; and (ii) to the extent MDC or any MDC Subsidiary has granted employees paid sick leave or paid family leave under the Families First Coronavirus Response Act or any similar Laws in other jurisdictions, MDC or any such MDC Subsidiary has taken commercially reasonable efforts to obtain and retain all material documentation required to substantiate eligibility for the relevant leave and for sick leave or family leave tax credits pursuant to applicable Law to the extent the time limit to obtain or receive such substantiation has not lapsed. To the extent MDC has knowledge of any MDC or MDC Subsidiary employees or independent contractors who have tested positive for COVID-19, MDC or any such MDC Subsidiary has taken commercially reasonable efforts to take all material precautions required under applicable Law with respect to such employees and independent contractors. MDC and each MDC Subsidiary have used commercially reasonable efforts to document any such diagnosis to the extent required by laws of OSHA or other applicable Law.

Section 4.13            Benefit Plans.

(a)             Section 4.13(a) of the MDC Disclosure Letter contains a true, complete and correct list of each material MDC Benefit Plan.

(b)             Each MDC Benefit Plan has been established, operated, maintained, funded and administered (i) in compliance in all material respects with all applicable Laws, orders, statutes, regulations and rules issued by a Governmental Entity, including ERISA and the Code, and with any Contract entered into with a union, works council or labor representative or organization and (ii) in accordance with its terms.

(c)             With respect to each material MDC Benefit Plan, MDC has made available to Stagwell copies, to the extent applicable, of: (i) the current plan and trust documents and the most recent summary plan description and any material modifications with respect thereto and, with respect to any unwritten MDC Benefit Plan, a written summary of such MDC Benefit Plan, (ii) all amendments thereto, (iii) the three most recent annual reports (Form 5500 series), (iv) the most recent financial statements, (v) the most recent Internal Revenue Service determination letter or opinion letter, (vi) all non-routine, written communications with respect thereto and (vii) any comparable documents with respect to MDC Non-US Plans that are required to be prepared or filed under the applicable Laws of a non-U.S. jurisdiction.

(d)             None of MDC, any MDC Subsidiary, or any of their respective ERISA Affiliates has ever maintained or contributed to (or been obligated to contribute to): (i) a benefit plan that was ever subject to Section 412 of the Code or Title IV of ERISA, (ii) a “multiemployer plan” (as defined in Section 3(37) of ERISA), or (iii) a “multiple employer plan” as defined in Section 210 of ERISA or Section 413(c) of the Code.

(e)             Each MDC Benefit Plan intended to qualify under Section 401(a) of the Code is the subject of a favorable determination or opinion letter from the Internal Revenue Service with respect to its qualified status, and to the knowledge of MDC, no facts or circumstances exist that have jeopardized or would reasonably be expected to jeopardize the qualification of such MDC Benefit Plan.

(f)              Each MDC Benefit Plan that is required to be registered or approved by a foreign Governmental Entity or subject to the Laws of a jurisdiction outside of the United States or that is otherwise maintained for the benefit of current or former employees or dependents thereof who perform services or who are employed outside of the United States (each an “MDC Non-US Plan”), has if required been registered with, or approved by, and has been maintained in all material respects in good standing with such Governmental Entity, and in all cases has been maintained in all material respects in compliance with applicable Law and its plan, policy and trust documents. With respect to each MDC Non-US Plan, the fair market value of the assets of such funded MDC Non-US Plan, the liability of each insurer for such MDC Non-US Plan funded through insurance or the book reserve established for such MDC Non-US Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations, as of the date of this Agreement, with respect to all current and former participants in such MDC Non-US Plan according to the actuarial assumptions and valuations most recently used to determine employer contributions to such MDC Non-US Plan, and the transactions contemplated hereby shall not cause such assets or insurance obligations to be less than such benefit obligations. If intended to qualify for special Tax or other treatment, such MDC Non-US Plan satisfies all requirements for such treatment.

(g)             Neither MDC nor any MDC Subsidiary is or has at any time been an “employer” (for the purpose of sections 38 to 51 of the United Kingdom Pensions Act 2004) of a UK registered occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993), or “connected” with or an “associate” (as those terms are used in the United Kingdom Pensions Act 2004) of such an employer. Neither MDC nor any MDC Subsidiary maintains or contributes to any plan or arrangement that is a “multi-employer scheme” as defined in section 75A of the UK Pensions Act 1995. No contribution notice or financial support direction has been issued by the UK Pensions Regulator under sections 38 or 43 of the UK Pensions Act 2004 against MDC nor any MDC Subsidiary and there is no fact or circumstance which may give rise to any such direction or notice to or in respect of MDC or any MDC Subsidiary nor any of their Affiliates or to Stagwell or any of its Affiliates. None of MDC, any MDC Subsidiary or any of its or their Affiliates has been notified that it is liable for a debt arising or payable under sections 75 or 75A of the UK Pensions Act 1995 (a “Section 75 Debt”) and neither the execution and delivery of this Agreement nor the performance of the transactions contemplated by this Agreement will or may (in either case, either alone or upon the occurrence of any additional or subsequent events) result in any Section 75 Debt arising or becoming payable by MDC, any of the Stagwell Subject Entities or any other Person.

(h)             All contributions required to be made prior to the date hereof with respect to any MDC Benefit Plan by applicable Law, any order or any MDC Benefit Plan document or other contractual undertaking, and all premiums due or payable prior to the date hereof with respect to any insurance policy funding any MDC Benefit Plan have been timely made or properly accrued in accordance with GAAP.

(i)              There are no pending or, to the knowledge of MDC, threatened material Proceedings by or on behalf of any MDC Benefit Plan, any employee or beneficiary covered under any MDC Benefit Plan, any Governmental Entity involving any MDC Benefit Plan, or otherwise involving any MDC Benefit Plan (other than routine claims for benefits). No MDC Benefit Plan is under audit or is the subject of an investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation, the U.S. Securities and Exchange Commission or any other Governmental Entity, in any jurisdiction, nor is any such audit or investigation pending or, to the knowledge of MDC, threatened.

(j)              No MDC Benefit Plan provides post-employment welfare benefits, including life insurance, death or medical benefits, beyond termination of service or retirement for any participant, or any spouse, dependent or beneficiary of a participant except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (or any other similar applicable Law).

(k)             Except as would not reasonably be expected to have an MDC Material Adverse Effect, each MDC Benefit Plan that is or was a nonqualified deferred compensation plan subject to Section 409A of the Code has been maintained and operated in operational and documentary compliance with Section 409A of the Code and applicable guidance thereunder during the respective time periods in which such operational or documentary compliance has been required. No Tax penalties or additional Taxes have been imposed or would be reasonably expected to be imposed on any current or former employee of MDC or any MDC Subsidiary, and no acceleration of Taxes has occurred or would be reasonably expected to occur with respect to any current or former employee, director or other service provider of MDC or any MDC Subsidiary, in each case as a result of a failure to comply with Section 409A of the Code. No employee, director or other service provider of MDC or any MDC Subsidiary is entitled to receive any gross-up or additional payment in connection with the Tax required by Section 409A or Section 4999 of the Code.

(l)              Neither the execution nor delivery of this Agreement nor the consummation of the Transactions (either alone or in conjunction with another event whether contingent or otherwise) will: (i) accelerate the time of payment or vesting of any compensation or benefit, or trigger any funding of benefits under any MDC Benefit Plan or otherwise; (ii) entitle any current or former employee, director or other service provider to any payment, compensation or benefit or increase in compensation or benefits under any MDC Benefit Plan or otherwise; or (iii) result in any breach or violation of or default under or limit any right to amend, modify or terminate any MDC Benefit Plan.

(m)            No amount that will be received (whether in cash or property or the vesting of property), as a result of the execution of this Agreement or the consummation of the Transactions, by any current or former employee, director or individual service provider under any MDC Benefit Plan or otherwise would not be deductible by MDC or any MDC Subsidiary by reason of Section 280G of the Code or would be subject to an excise tax under Section 4999 of the Code.

Section 4.14            Taxes. Except as to matters that would not reasonably be expected to have an MDC Material Adverse Effect:

(a)             MDC and each of its Subsidiaries (i) has timely filed (taking into account all applicable extensions) all material Tax Returns required to be filed by it under applicable Law, and all such Tax Returns are true, correct and complete and (ii) has timely paid (or has had timely paid on its behalf) to the appropriate Governmental Entity all Taxes required to be paid by it, except for those Taxes being contested in good faith or for which adequate reserves have been established in the financial statements of MDC in accordance with GAAP.

(b)             MDC and each of its Subsidiaries has (i) withheld and paid all Taxes required to have been withheld and paid prior to the Closing in connection with amounts paid or owing to any employee, former employee, creditor, customer, supplier, seller or other third party and (ii) complied with all reporting requirements (including maintenance of required records with respect thereto) with respect to such payments.

(c)             No claim has ever been made by a Governmental Entity in any jurisdiction where MDC or any of its Subsidiaries does not file Tax Returns or pay Taxes that MDC or such Subsidiary is required to file Tax Returns or pay Taxes in such jurisdiction, other than a claim that has been finally resolved.

(d)             There are no audits, disputes, or administrative or judicial proceedings ongoing or pending, or claims asserted in writing, in respect of unpaid Taxes of MDC or any of its Subsidiaries, other than any claim that has been resolved. No deficiency for any Taxes has been assessed or proposed or asserted in writing against MDC or any of its Subsidiaries that has not been resolved and paid in full.

(e)             There are no Liens (other than Permitted Liens) for unpaid Taxes upon any of the assets of MDC or any of its Subsidiaries.

(f)              Neither MDC nor any of its Subsidiaries is party to any agreement, the principal purpose of which is the allocation, indemnification or sharing of Taxes other than such an agreement exclusively between or among one or more of MDC and its Subsidiaries. Neither MDC nor any of its Subsidiaries has any liability for any Tax or any portion of a Tax (or any amount calculated with reference to any portion of a Tax) of any Person other than MDC or one of its Subsidiaries, including under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law) or as transferee or successor. Neither MDC nor any of its Subsidiaries has been a member of an affiliated group (or similar state, local or foreign filing group) filing a consolidated income or franchise Tax Return (other than a group the common parent of which is Maxxcom, or after the Redomiciliation, MDC or New MDC, or for which the statute of limitations on collection of the relevant Tax has expired).

(g)             Neither MDC nor any of its Subsidiaries has engaged in any listed transaction within the meaning of Treasury Regulations Section 1.6011-4(b)(2).

(h)             Neither MDC nor any of its Subsidiaries 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 (A) any installment sale or open transaction disposition made on or prior to the Closing Date, (B) any prepaid amount received on or prior to the Closing Date, (C) any “closing agreement,” as described in Section 7121 of the Code (or any corresponding provision of state, local or non-U.S. income tax law) entered into on or prior to the Closing Date, (D) any “gain recognition agreement” or “domestic use election” (or analogous concepts under state, local or foreign income Tax Law); (E) a change in the method of accounting for a period ending prior to or including the Closing Date; or (F) an election pursuant to Section 965(h) of the Code.

(i)              During the period beginning two (2) years before the date hereof, neither MDC nor any of its Subsidiaries has been a distributing corporation or a controlled corporation for purposes of Section 355 of the Code.

(j)              No MDC Subsidiary has filed an election under Treasury Regulations Section 301.9100-22 to apply the Partnership Audit Rules to taxable years that begin prior to December 31, 2017.

(k)             Neither MDC nor any MDC Subsidiary has deferred any payroll Taxes pursuant to the CARES Act or are the beneficiaries of any other COVID-19 related tax deferral relief of any U.S. state and local Governmental Entities.

(l)              Neither MDC nor any MDC Subsidiary has incurred any loan, directly or indirectly, pursuant to the Paycheck Protection Program, established by the CARES Act, as amended or supplemented from time to time by interim rules, policy statements, FAQs or otherwise.

(m)            There are no circumstances which exist and would result in, or which have existed and resulted in, section 17 of the Canadian Tax Act applying to MDC or any of its Subsidiaries.

(n)             The shares of capital stock of MDC are not “taxable Canadian property” (as defined in the Canadian Tax Act).

Section 4.15            Environmental Matters. Except as to matters that would not reasonably be expected to have an MDC Material Adverse Effect:

(a)             MDC and each MDC Subsidiary is, and for the past three (3) years has been, in compliance with all applicable orders of any court, Governmental Entity or arbitration board or tribunal and all applicable federal, state, local and foreign or international Laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) (collectively “Environmental Laws”);

(b)             MDC and each MDC Subsidiary are in possession of all permits, approvals, licenses and other authorizations by Governmental Entities required under applicable Environmental Laws (“Environmental Permits”) and are in compliance with the terms and conditions thereof, and such Environmental Permits are in full force and effect, free from breach, and will not be adversely affected by the Transactions;

(c)                None of MDC or any MDC Subsidiary has entered into any consent decree under any Environmental Law;

(d)               There are no Environmental Claims that are pending or, to the knowledge of MDC, threatened against MDC or any MDC Subsidiary or, to the knowledge of MDC, against any Person or entity whose liability for any Environmental Claim any of MDC or the MDC Subsidiaries has or may have retained or assumed either contractually or by operation of Law. “Environmental Claim” means any material action, claim, demand or notice alleging liability or noncompliance with or seeking investigation or remediation of Hazardous Materials under applicable Environmental Law;

(e)                To the knowledge of MDC, there are no past or present specific conditions, events or incidents, including the Release or presence of any Hazardous Material, which would be reasonably likely to form the basis of any Environmental Claim against MDC or any of the MDC Subsidiaries or against any Person whose liability for any Environmental Claim any of MDC or the MDC Subsidiaries has or may have retained or assumed either contractually or by operation of Law. “Hazardous Material” means (i) any substance that is or contains asbestos, polychlorinated biphenyls, petroleum or petroleum-derived substances or wastes or radon gas or (ii) any substance that requires investigation, removal or remediation under any Environmental Law, or is defined, listed, regulated or identified as hazardous, toxic or words of similar import under any Environmental Laws. “Release” means any releasing, disposing, discharging, injecting, spilling, leaking, pumping, dumping, emitting, escaping, emptying, dispersal, leaching, migration, transporting or placing of Hazardous Materials, including into or upon, any land, soil, surface water, ground water or air, or otherwise entering into the environment; and

(f)                 MDC has delivered to, or has otherwise made available for inspection by Stagwell, all material written assessments, audits, investigation reports, studies, test results or similar environmental documents in the possession of MDC or any MDC Subsidiary related to environmental, health or safety matters or Hazardous Materials.

Section 4.16               Compliance with Laws. Except for non-compliance as would not reasonably be expected to have an MDC Material Adverse Effect: (a) MDC and the MDC Subsidiaries are, and for the three (3) years prior to the date hereof have been, in compliance with all applicable Laws; and (b) during the three (3) year period prior to the date hereof, no written notice, charge, claim, action or assertion has been received by MDC or any MDC Subsidiary or, to MDC’s knowledge, filed, commenced or threatened in writing against MDC or any MDC Subsidiary alleging any such non-compliance. All licenses, permits and approvals required under such Laws with respect to MDC or the MDC Subsidiaries or their businesses, properties or assets are in full force and effect, except where the failure to be obtained or to be in full force and effect would not reasonably be expected to have an MDC Material Adverse Effect.

Section 4.17               Title to Properties.

(a)                Neither MDC not any MDC Subsidiary owns any real property.

(b)               Section 4.17(b) of the MDC Disclosure Letter sets forth an accurate and complete list of each real property lease, sublease, license or occupancy Contract pursuant to which MDC or any MDC Subsidiary leases, subleases, licenses or occupies real property (such properties, the “MDC Leased Real Property,” and such Contracts, the “MDC Leases”). To the knowledge of MDC, all buildings, structures and improvements located on such MDC Leased Real Property are in reasonably good condition and repair, ordinary wear and tear excepted, except if the failure to meet such standards would not materially and adversely impair the use of any such real property as currently used by MDC and the MDC Subsidiaries’ business. To the knowledge of MDC, MDC or an MDC Subsidiary has a valid and binding leasehold interest in each parcel of MDC Leased Real Property, free and clear of any material Liens, other than Permitted Liens. To the knowledge of MDC, neither MDC nor any MDC Subsidiary has subleased, licensed or otherwise granted to a third party any material right to use or occupy all or any portion of the MDC Leased Real Property.

(c)                MDC or an MDC Subsidiary has good and valid title to, or in the case of leased properties and assets, valid leasehold interests in, all of the tangible assets of MDC and the MDC Subsidiaries, except where the failure to have such good and valid title or valid leasehold interests would not, individually or in the aggregate, reasonably be expected to have an MDC Material Adverse Effect, in each case free and clear of any Liens, other than Permitted Liens.

Section 4.18               Intellectual Property.

(a)                Except as would not reasonably be expected to have an MDC Material Adverse Effect, to the knowledge of MDC, MDC and the MDC Subsidiaries own or possess licenses or other valid rights to use all Intellectual Property necessary to carry on their respective businesses as currently conducted. Except as would not reasonably be expected to have an MDC Material Adverse Effect, to the knowledge of MDC, the conduct of the businesses of MDC and the MDC Subsidiaries does not, and immediately following the Closing, will not, materially infringe, misappropriate or otherwise violate, and has not since January 1, 2018, materially infringed, misappropriated or otherwise violated, the Intellectual Property, moral rights or publicity rights (or other rights to use the names, likeness, signature, image, voice, personality or biographical information) of others, and, to the knowledge of MDC, no third party is infringing or, since January 1, 2018, has infringed the Intellectual Property owned or claimed to be owned by MDC or the MDC Subsidiaries (“MDC Intellectual Property”). None of MDC or the MDC Subsidiaries has received any notice from any Person claiming that MDC, such MDC Subsidiary, the conduct of the businesses of MDC or any MDC Subsidiary or any product or service of MDC or any MDC Subsidiary, as applicable, infringes, violates or misappropriates any Intellectual Property, moral rights or publicity rights (or other rights to use the names, likeness, signature, image, voice, personality or biographical information).

(b)                Section 4.18(b) of the MDC Disclosure Letter lists (i) all (A) material registered, issued or filed MDC Intellectual Property and (B) material unregistered trademarks included in the MDC Intellectual Property; and (ii) any challenges to the validity, enforceability or ownership of any of the material MDC Intellectual Property, including Proceedings before any Governmental Entity (including the United States Patent and Trademark Office or equivalent authority anywhere in the world) to which MDC or an MDC Subsidiary is or was, since January 1, 2018, a party and in which claims are or were raised relating to the validity, enforceability or ownership of any of the material MDC Intellectual Property (other than ordinary course Proceedings relating to any filed but not yet registered or issued MDC Intellectual Property to which solely the Governmental Entity and MDC or an MDC Subsidiary are or were parties).

(c)               Except as would not reasonably be expected to have an MDC Material Adverse Effect, MDC or an MDC Subsidiary is the sole and exclusive owner of each item of MDC Intellectual Property, free and clear of any Liens other than Permitted Liens, and, to the knowledge of MDC, except as would not reasonably be expected to have an MDC Material Adverse Effect, MDC or an MDC Subsidiary has registered its acquisition or ownership of each item of registered, issued or applied-for MDC Intellectual Property in its name with the United States Patent and Trademark Office or the applicable equivalent authority anywhere in the world. To the knowledge of MDC, none of MDC or the MDC Subsidiaries has (i) granted any exclusive license with respect to any material MDC Intellectual Property to any other Person, (ii) transferred or assigned any material MDC Intellectual Property to any Person, (iii) granted to any Person any option to any of the foregoing, or (iv) done any act or failed to take any action that could cause the rights of MDC or the MDC Subsidiaries in any MDC Intellectual Property to enter into the public domain other than in the ordinary course of business consistent with past practice.

(d)               Except as would not reasonably be expected to have an MDC Material Adverse Effect, each (i) current and former employee of MDC or the MDC Subsidiaries, (ii) current and former consultant or contractor of MDC or the MDC Subsidiaries, and (iii) other Person, in each case who has been involved in the creation, invention or development of Intellectual Property for or on behalf of MDC or the MDC Subsidiaries that does not vest initially in MDC or an MDC Subsidiary by operation of law, has executed a binding, valid and enforceable Contract with MDC or the applicable MDC Subsidiary that conveys to MDC or the applicable MDC Subsidiary any and all of such Person’s right, title and interest in and to, such Intellectual Property. To the knowledge of MDC, since January 1, 2018, no Person has made, or threatened to make, any right, claim, interest or option (including the right to further remuneration or consideration) with respect to any such material Intellectual Property.

(e)                Except as would not reasonably be expected to have an MDC Material Adverse Effect, to the knowledge of MDC, with respect to each item of registered, issued or applied-for MDC Intellectual Property, (i) all necessary application, registration, maintenance and renewal fees have been timely paid to, and all necessary documents and certificates have been timely filed with, the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Intellectual Property rights; and (ii) each such item is subsisting, and except with respect to applications, valid and enforceable.

(f)                MDC and the MDC Subsidiaries have taken commercially reasonable measures to preserve and maintain the confidentiality of, and otherwise protect against the misuse or misappropriation of, all material MDC-Related Confidential Information. Except as would not reasonably be expected to have an MDC Material Adverse Effect, to MDC’s knowledge, since January 1, 2018, there has been no unauthorized disclosure, misappropriation or loss of any MDC-Related Confidential Information.

Section 4.19               Privacy and Data Security.

(a)                Except as would not reasonably be expected to have an MDC Material Adverse Effect, MDC and the MDC Subsidiaries, and to the knowledge of MDC, all third Persons Processing Personal Data for or on behalf of MDC or any of the MDC Subsidiaries, are in compliance and, since January 1, 2018, have been in compliance with all Data Protection Laws applicable to the operations of MDC and the MDC Subsidiaries and all MDC Data Protection Commitments, in each case in all material respects.

(b)                No investigation or material claim relating to MDC or the MDC Subsidiaries’ Processing of Personal Data, or relating to MDC or the MDC Subsidiaries’ compliance with Data Protection Laws applicable to the operations of MDC and the MDC Subsidiaries or MDC Data Protection Commitments, is being, or since January 1, 2018 was, made, conducted, prosecuted, litigated, or, to the knowledge of MDC, threatened by any Governmental Entity or third party.

(c)                To the knowledge of MDC, the execution, delivery and performance of this Agreement will not cause, constitute, or result in a breach or violation of any Data Protection Laws applicable to the operations of MDC and the MDC Subsidiaries or MDC Data Protection Commitments.

(d)               MDC and the MDC Subsidiaries have implemented reasonable, and otherwise in accordance with Laws applicable to the operations of MDC and the MDC Subsidiaries, technical, physical, and organizational measures designed to preserve the availability, proper functioning, security and integrity of the MDC IT Systems and MDC-Related Confidential Information, and to respond to any MDC IT or Security Incidents. The MDC IT Systems are adequate for MDC and the MDC Subsidiaries to operate their business as currently conducted in all material respects.

(e)                Except as would not reasonably be expected to have an MDC Material Adverse Effect, since January 1, 2018, to the knowledge of MDC, neither MDC nor any MDC Subsidiary has experienced any material MDC IT or Security Incident.

(f)                 Except as would not reasonably be expected to have an MDC Material Adverse Effect, MDC and the MDC Subsidiaries have established and maintain reasonable data backup and disaster recovery plans for the MDC IT Systems of a scope consistent in all material respects with all applicable industry standards.

Section 4.20               Insurance. Except as would not reasonably be expected to have an MDC Material Adverse Effect, all insurance policies maintained by MDC and the MDC Subsidiaries, including fire and casualty, general liability, cybersecurity, workers’ compensation and employer liability, directors and officers and other liability policies are in full force and effect and provide a level of coverage that is reasonably customary in comparison to coverage carried by companies in similar lines of business as MDC and the MDC Subsidiaries. As of the date hereof, there is no pending claim against such insurance policies by or in respect of MDC or any MDC Subsidiary as to which the insurers have denied coverage. Except as would not reasonably be expected to have an MDC Material Adverse Effect, neither MDC nor any MDC Subsidiary is in breach or default under any such insurance policy, and neither MDC nor any MDC Subsidiary has taken any action or failed to take any action which (including with respect to the Transactions), with notice or lapse of time or both, would constitute a breach or default, or permit a termination or material modification of any of the material insurance policies of MDC and the MDC Subsidiaries.

Section 4.21               Material Contracts.

(a)                Except for this Agreement and any agreements filed by MDC with the SEC, Section 4.21(a) of the MDC Disclosure Letter sets forth a correct and complete list of each of the following Contracts to which, as of the date hereof, MDC or any MDC Subsidiary is a party or by which MDC or any MDC Subsidiary or any of their respective assets is bound (each such Contract set forth or required to be set forth on the MDC Disclosure Letter, an “MDC Material Contract”):

(i)                 any “material contract” (as such term is defined in Item 601 (b)(10) of Regulation S-K of the SEC);

(ii)               any partnership or joint venture agreement (other than a partnership agreement constituting an organizational agreement of a Subsidiary) that is material to MDC and the MDC Subsidiaries, taken as a whole;

(iii)             except for (A) intercompany transactions among MDC and the MDC Subsidiaries in the ordinary course of business consistent with past practices and (B) the MDC Credit Agreement and any security documents related thereto, any Contract relating to the borrowing of money (including any guarantee thereof) or that is a mortgage, security agreement, capital lease or similar agreement, in each case in excess of $5,000,000 or that creates a Lien other than a Permitted Lien on any material asset of MDC or any MDC Subsidiary;

(iv)             other than any partnership, joint venture or similar arrangement, any Contract that materially limits or purports to materially limit the ability of MDC and the MDC Subsidiaries, taken as a whole, to compete or engage in any line of business, in any geographic area or with any Person;

(v)               except for intercompany transactions among MDC and the MDC Subsidiaries in the ordinary course of business consistent with past practices and any security documents related to the MDC Credit Agreement that will be released in connection with the Closing, any Contract that includes a license, sublicense or other grant of rights under any Intellectual Property or other intangible asset (whether as a licensor or a licensee) and contains (A) a payment of $5,000,000 or more per year or (B) a grant of exclusive rights under material Intellectual Property;

(vi)              any Contract entered into since January 1, 2018 relating to the sale of any of the assets or properties of MDC or any MDC Subsidiary in excess of $5,000,000, other than (A) those in respect of which the sale transaction has previously closed, are so reflected on MDC’s financial statements, and do not provide for any continuing material obligations on the part of MDC or any MDC Subsidiary, or (B) relate to an intercompany transaction among MDC and the MDC Subsidiaries in the ordinary course of business consistent with past practices;

(vii)             any Contract entered into since January 1, 2018 relating to the acquisition by MDC or any MDC Subsidiary of any assets or the capital stock of any other Person in excess of $5,000,000, other than those in respect of which the acquisition has previously closed, are so reflected on MDC’s financial statements and do not provide for any continuing material obligations on the part of MDC or any MDC Subsidiary;

(viii)           with respect to an MDC Stock Plan, MDC Incentive Award or MDC Benefit Plan, any Contract that provides for an increase in, or acceleration of the vesting of any, benefits as a result of the occurrence of any of the Transactions;

(ix)              any Contract (other than an MDC Benefit Plan) under which the Transactions would trigger any change of control, any right of termination, cancellation or amendment, or any acceleration of any obligation or loss of a benefit;

(x)               any Contract that requires aggregate annual payments by or to MDC or any MDC Subsidiary in excess of $10,000,000 or aggregate payments by or to MDC or any MDC Subsidiary in excess of $10,000,000, other than as set forth in clause (xiv) of this Section 4.21(a);

(xi)              any Contract that contains (A) exclusivity or similar provisions, (B) non-solicitation provisions, or (C) “most favored nation” provisions, in each case that would limit in any material respect, following the Closing, MDC and the MDC Subsidiaries, taken as a whole, from engaging in their businesses;

(xii)             any Contract involving any resolution or settlement of any actual or threatened legal proceeding before a Governmental Entity or that provides for any injunctive or other non-monetary relief or grants a material release;

(xiii)            any Contract with any Governmental Entity; and

(xiv)            any Contract with an MDC Material Customer or an MDC Material Supplier that involves aggregate payments by or to MDC or any MDC Subsidiary in excess of $1,000,000 during the fiscal year ended December 31, 2019.

(b)                MDC has made available to Stagwell correct and complete copies of each MDC Material Contract (including all modifications, amendments, supplements, annexes and schedules thereto and written waivers thereunder). Each MDC Material Contract is valid and binding on MDC or an MDC Subsidiary, as the case may be, and, to the knowledge of MDC, each other party thereto, and is in full force and effect, except for such failures to be valid and binding or to be in full force and effect as would not reasonably be expected to have an MDC Material Adverse Effect. Neither MDC nor any MDC Subsidiary, nor, to MDC’s knowledge, any counterparty to any MDC Material Contract, has violated or is alleged to have violated any provision of, or committed or failed to perform any act which, with or without notice, lapse of time or both, would constitute a default under the provisions of any MDC Material Contract, except in each case for those violations and defaults which would not reasonably be expected to have an MDC Material Adverse Effect.

Section 4.22              Customers and Suppliers. Section 4.22(a) of the MDC Disclosure Letter sets forth a correct and complete list of the top fifteen (15) third-party customers (by annual revenue) of MDC and the MDC Subsidiaries, taken as a whole, for the fiscal year ended December 31, 2019 (collectively, the “MDC Material Customers”) and the amount of consideration paid to MDC and the MDC Subsidiaries by each MDC Material Customer during such fiscal year period.). Section 4.22(b) of the MDC Disclosure Letter sets forth a correct and complete list of the top ten (10) third-party suppliers (by annual expenditure) of MDC and the MDC Subsidiaries for the fiscal year ended December 31, 2019 (collectively, the “MDC Material Suppliers”) and the amount of consideration paid to each MDC Material Supplier by MDC and the MDC Subsidiaries during such fiscal year period. Since January 1, 2019 through the date of this Agreement: (i) no MDC Material Customer or MDC Material Supplier has canceled or otherwise terminated its relationship with MDC or any MDC Subsidiary except as would not reasonably be expected to be material to the business of MDC and the MDC Subsidiaries, taken as a whole, and (ii) to the knowledge of MDC, no MDC Material Customer or MDC Material Supplier has threatened to cancel or otherwise terminate its relationship with MDC or any MDC Subsidiary or its usage of the services of MDC or any MDC Subsidiary, except as would not reasonably be expected to be material to the business of MDC and the MDC Subsidiaries, taken as a whole.

Section 4.23               Certain Business Practices.

(a)               As of the date hereof, none of MDC, any MDC Subsidiary, or any director (or other comparable position), officer, employee, affiliate or agent of the same (acting in such capacity), is in material violation of or has for the three (3) years prior to the date hereof materially violated any applicable Law, or, to the knowledge of MDC, is under investigation or the subject of any inquiry, litigation or administrative or enforcement proceedings with respect to or been threatened to be charged with or given notice of any violation of, any applicable Law, has received a subpoena relating to an investigation or allegations of the same, or is aware of any conduct that could reasonably give rise to any investigation, inquiry, litigation or administrative or enforcement proceeding relating to alleged violations of applicable Law at this time or any time in the future. As of the date hereof, there is no judgment, decree, injunction, rule or order of any arbitrator or Governmental Entity outstanding against MDC or any MDC Subsidiary, or any director (or other comparable position), officer, employee or agent of the same (acting in such capacity).

(b)                Neither MDC nor any MDC Subsidiaries, nor any director (or other comparable position), officer, employee, affiliate or agent of the same (acting in such capacity) in connection with the business activities of MDC or any of the MDC Subsidiaries, has, in any material respect, directly or indirectly:

(i)               made, authorized, offered, or promised any unlawful contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment of value, regardless of form, whether in money, property, or services, to any Official or other Person in violation of any Anti-Bribery Law;

(ii)              used any MDC or MDC Subsidiary funds for unlawful contributions, unlawful gifts, unlawful entertainment or other unlawful expenses relating to political activity;

(iii)             established or maintained any unlawful or hidden fund of monies or other assets of MDC or any MDC Subsidiary; or

(iv)             made, promised or authorized any fraudulent entry on the books or records of MDC or any MDC Subsidiary.

(c)                MDC and each of the MDC Subsidiaries maintains books, records, and accounts that are readily accessible and available and that, in reasonable detail, accurately and fairly reflect its transactions and dispositions of its assets, and maintains a system of internal accounting controls sufficient to provide reasonable assurances of the same, including that:

(i)                 its transactions are executed, and its funds are expended only in accordance with its management’s authorization;

(ii)               its transactions are recorded as necessary to permit preparation of its financial statements in conformity with the GAAP;

(iii)             access to its assets is permitted only in accordance with its management’s authorization; and

(iv)             its accounting for assets is compared with existing assets at reasonable intervals and action is taken with respect to any differences

(d)               The operations of MDC and the MDC Subsidiaries are conducted in compliance in all material respects with all applicable Export Laws and anti-money laundering laws. Neither MDC nor any of the MDC Subsidiaries, nor any director (or other comparable position), officer, employee, affiliate or agent of the same, or holders of more than ten percent (10%) of the equity interests in the same (i) is a Sanctioned Person, or (ii) engages in any dealings or transactions with any Sanctioned Person on behalf of MDC or the MDC Subsidiaries in violation of Export Laws.

Section 4.24              Affiliate Transactions. No officer or director of MDC, or to the knowledge of MDC, no holder of 10% or more of the equity interests in MDC or any MDC Subsidiary and, to the knowledge of MDC, no immediate family member of any of such Persons, or, to the knowledge of MDC, any trust, partnership or corporation in which any of such Persons has or has had an interest is a party to any Contract (other than an MDC Benefit Plan) to which MDC or any MDC Subsidiary is a party or any of its properties or assets are bound.

Section 4.25              Competition Act. MDC and its Affiliates do not have assets in Canada that exceed $200 million or gross revenues from sales in, from or into Canada that exceed $200 million, all as determined in accordance with Part IX of the Competition Act and the Notifiable Transactions Regulations thereunder.

Section 4.26              No Additional Representations. Except for the representations and warranties contained in Article 5, MDC acknowledges that neither Stagwell nor any other Person on behalf of Stagwell makes any other express or implied representation or warranty with respect to Stagwell or any of their respective Affiliates or with respect to any other information provided to MDC in connection with this Agreement or the Transactions. MDC expressly disclaims reliance on any and all representations and warranties other than the representations and warranties set forth in Article 5, whether express or implied.

Article 5
REPRESENTATIONS AND WARRANTIES OF STAGWELL

Except as set forth in the correspondingly numbered sections of the disclosure letter delivered by Stagwell to MDC at or prior to the execution and delivery of this Agreement (the “Stagwell Disclosure Letter”), but subject to Section 11.12, Stagwell represents and warrants to MDC, New MDC and Merger Sub as follows:

Section 5.01               Organization, Good Standing and Qualification.

(a)                Each of Stagwell and the Stagwell Subject Entities is a corporation, limited liability company, limited partnership, partnership or other entity duly organized and validly existing under the Laws of its respective jurisdiction of organization and has all requisite entity power and authority to own, operate and lease its properties and assets in the manner in which its properties and assets are currently owned, operated and leased and to carry on its business as now conducted.

(b)                Each of Stagwell and the Stagwell Subject Entities is duly qualified and/or licensed, as may be required, to do business and in good standing (where applicable or recognized) in each of the jurisdictions in which the nature of its business or the character of its owned, leased or used properties makes such qualification and/or licensing necessary, except where the failure to be so qualified and/or licensed would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, or prevent, materially delay or materially impair the ability of Stagwell to timely consummate the Transactions.

(c)                Stagwell has made available to MDC complete and correct copies of each Stagwell Subject Entity’s certificate of incorporation and by-laws or comparable governing documents (the agreements so made available, the “Stagwell Organizational Documents”), in each case as amended to the date of this Agreement, and each as so delivered is in full force and effect, and no such Stagwell Subject Entity is in violation in any material respect of any of the provisions thereof.

Section 5.02               Capitalization.

(a)                Immediately prior to the Closing, the issued and outstanding equity capital of SMGH will consist of one (1) ownership interest held by Stagwell and there will be no other outstanding equity interests (including any options, warrants or other forms of derivative equity interests) or other voting or economic interests of SMGH outstanding as of immediately prior to the Closing. Section 5.02(a) of the Stagwell Disclosure Letter sets forth a true, correct and complete list of the Stagwell Incentive Awards as of the date hereof, including, with respect to each such award, the applicable Stagwell Subject Entity to which such award relates, the name of the holder thereof, the number of units subject to each such award and the vesting schedule (including any performance conditions) thereof.

(b)                The SMGH Interest and all outstanding capital stock and other interests of the other Stagwell Subject Entities are duly authorized, validly issued, fully paid and nonassessable, and are not subject to and were not issued in violation of any pre-emptive or similar right, purchase option, call or right of first refusal or similar right. All of the shares of capital stock and other interests described in this Section 5.02(b) were issued in material compliance with applicable Laws (including securities Laws).

(c)                Except as set forth in this Section 5.02, SMGH has not issued any securities, the holders of which have the right to vote with the equity holders of SMGH on any matter.

(d)                There are no existing options, units, warrants, calls, pre-emptive (or similar) rights, subscriptions, phantom stock, phantom rights, stock appreciation rights, restricted stock, restricted stock units, incentive units, earn-in credits or any other equity or equity-based compensation or any other rights, Contracts, arrangements or commitments of any kind (including shareholders agreements, voting trusts or similar Contracts) relating to any equity interests of SMGH or any other Stagwell Subject Entity or obligating SMGH or any other Stagwell Subject Entity to issue, transfer or sell, or cause to be issued, transferred or sold, any equity interests of such Stagwell Subject Entity or any securities convertible into or exchangeable for such equity interests or similar profit participation rights, and there are no current outstanding contractual obligations of SMGH or any other Stagwell Subject Entity to repurchase, redeem or otherwise acquire any of its equity interests or any securities convertible into or exchangeable for such equity interests or similar profit participation rights, in each case other than in relation to obligations under Stagwell Incentive Awards.

(e)               Stagwell has made available to MDC true and complete copies of all Stagwell Incentive Plans covering the Stagwell Incentive Awards outstanding as of the date hereof, the forms of all award agreements evidencing such Stagwell Incentive Awards (and any other award agreement to the extent there are material variations from the form of agreement, specifically identifying the Person(s) to whom such variant forms apply).

Section 5.03               Authorization; No Conflict.

(a)                Stagwell has the requisite partnership power and authority to enter into and deliver this Agreement and all other agreements and documents contemplated hereby to which it is a party and to consummate the Transactions. The execution and delivery of this Agreement by Stagwell, the performance by Stagwell of its obligations hereunder and the consummation by Stagwell of the Transactions have been duly and validly approved by the Stagwell Group, in its capacity as the sole general partner of Stagwell, and no other partnership or other action on the part of Stagwell is necessary to authorize the execution, delivery and performance of this Agreement by Stagwell and the consummation by Stagwell of the Transactions.

(b)               This Agreement has been duly executed and delivered by Stagwell and, assuming due authorization, execution and delivery by MDC, New MDC and Merger Sub, constitutes a valid and binding obligation of Stagwell, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at Law).

(c)               None of the execution and delivery of this Agreement by Stagwell, the consummation by Stagwell of the Transactions or compliance by Stagwell with any of the provisions herein will (i) result in a violation or breach of or conflict with the limited partnership agreement of Stagwell or the Stagwell Organizational Documents, (ii) (A) result in a violation or breach of or conflict with any provisions of, (B) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (C) result in the termination or cancellation of, give rise to a right of purchase under, (D) accelerate the performance required by Stagwell or any Stagwell Subject Entity under, (E) result in a right of termination or acceleration under, (F) result in the creation of any Lien (other than a Permitted Lien) upon any of the properties or assets owned or operated by Stagwell or any Stagwell Subject Entity under, (G) result in being declared void, voidable, or without further binding effect under, any of the terms, conditions or provisions of, any Contract to which Stagwell or any of the Stagwell Subject Entity is a party or by which Stagwell or any Stagwell Subject Entity or any of their respective properties or assets may be bound, or (iii) subject to obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in Section 5.03(d), violate any Laws applicable to Stagwell or any Stagwell Subject Entity or any of their respective properties or assets, other than any such event described in clause (i) (only with respect to a Stagwell Subject Entity), (ii) or (iii) which would not reasonably be expected to have a Stagwell Material Adverse Effect or prevent, materially delay or materially impair the ability of Stagwell to timely consummate the Transactions.

(d)                Except for filings, permits, authorizations, consents, approvals and other applicable requirements as may be required under the Securities Act, the Exchange Act, state securities or blue sky laws, the HSR Act or the Investment Canada Act, no filing with or notice to, and no permit, authorization, consent or approval of, any Governmental Entity is necessary for the execution and delivery by Stagwell of this Agreement or the consummation by Stagwell of the Transactions.

Section 5.04            Subsidiaries.

(a)                Section 5.04(a) of the Stagwell Disclosure Letter sets forth, as of the date of this Agreement, the name and jurisdiction of organization of each (i) Stagwell Subject Entity, (ii) entity (other than the Stagwell Subject Entities) in which any Stagwell Subject Entity owns any interest, and (iii) SMGH’s percentage aggregate direct or indirect record and beneficial ownership of each such Stagwell Subject Entity (other than SMGH) as of the date hereof.

(b)                All of the outstanding shares of capital stock or other equity securities of, or other ownership interests in, (i) each Stagwell Subject Entity (other than SMGH), and (ii) each other Person that is a legal entity in which SMGH has an equity ownership interest are duly authorized, validly issued, fully paid up and, in the case of all corporate Stagwell Subject Entities (other than SMGH), nonassessable (in jurisdictions that recognize such concepts), and such shares, securities or interests are owned by SMGH or by any other Stagwell Subject Entity free and clear of any Liens (other than Securities Liens and Credit Agreement Liens) or limitations on voting rights. Section 5.04(b) of the Stagwell Disclosure Letter sets forth a true and correct list as of the date hereof of (A) each Stagwell Subject Entity, (B) the name of each shareholder or equityholder of each Stagwell Subject Entity, (C) the percentage of shares or other equity or voting interests of each Stagwell Subject Entity owned by such holder and (D) all subscriptions, options, units, warrants, calls, rights, convertible securities, phantom stock, stock appreciation rights, or any other equity or equity-based compensation or other Contracts relating to the issuance, transfer, sales, delivery, voting or redemption (including any rights of conversion or exchange under any outstanding security or other instrument) for any of the capital stock or other equity interests of, or other ownership interests in, any Stagwell Subject Entity.

Section 5.05            Financial Statements; Internal Controls.

(a)                Stagwell has delivered to MDC complete copies of the Stagwell Subject Entity Financial Statements. The Stagwell Subject Entity Financial Statements have been prepared in accordance with GAAP applied on a consistent basis (except as may be indicated in the notes thereto) and present fairly in all material respects the financial position, results of operations and cash flows of the Stagwell Subject Entities (excluding, for all purposes, the Reputation Defender Entities) as of the dates and for the respective periods shown.

(b)                Stagwell has delivered to MDC complete copies of the Reputation Defender Entity Financial Statements. The Reputation Defender Entity Financial Statements have been prepared in accordance with GAAP applied on a consistent basis (except as may be indicated in the notes thereto) and present fairly in all material respects the financial position, results of operations and cash flows of the Reputation Defender Entities as of the dates and for the respective periods shown.

(c)                Stagwell has devised and maintained systems of internal accounting controls which it has applied with respect to the Stagwell Subject Entities which systems are effective in providing reasonable assurance (i) regarding the reliability of financial reporting and the preparation of financial statements (including the Stagwell Subject Entity Financial Statements and the Reputation Defender Financial Statements) in accordance with GAAP, and (ii) that (A) all transactions are executed in accordance with management’s general or specific authorization, (B) all transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to maintain proper accountability for items, (C) access to its property and assets is permitted only in accordance with management’s general or specific authorization and (D) recorded accountability for items is compared with actual levels at reasonable intervals and appropriate action is taken with respect to any differences. There is no significant deficiency or material weakness in the system of internal accounting controls utilized by the Stagwell Subject Entities or, to the knowledge of Stagwell, fraud that involves management of the Stagwell Subject Entities or other employees or independent contractors of the Stagwell Subject Entities who have a role in the preparation of financial statements or internal accounting controls utilized by the Stagwell Subject Entities. During the past five (5) years, no director or officer of any Stagwell Subject Entity, or to the knowledge of Stagwell any non-officer employees, external auditor, external accountant or similar authorized representative of any Stagwell Subject Entity, has received or otherwise been made aware of any material complaint, allegation or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of any Stagwell Subject Entity or their respective internal accounting controls, including any complaint, allegation or claim that any Stagwell Subject Entity engaged in accounting or auditing practices that represent a violation of GAAP or GAAS.

Section 5.06            Absence of Changes. Since the Stagwell Audited Balance Sheet Date through the date hereof, (a) there has not been any Stagwell Material Adverse Effect, and no event has occurred or circumstance arisen that, in combination with any other events or circumstances, would reasonably be expected to have or result in a Stagwell Material Adverse Effect; (b) no Stagwell Subject Entity has taken any action, or authorized, approved, committed or agreed to take any action that, if taken between the date hereof and the Closing Date, would require MDC’s consent under Section 6.02(b); and (c) the Stagwell Subject Entities have conducted their business in the ordinary course of business consistent with past practice.

Section 5.07            Litigation. As of the date hereof, there are no Proceedings pending or, to the knowledge of Stagwell, threatened against any of the Stagwell Subject Entities or any of their respective properties or assets or any director, officer or employee of any of the Stagwell Subject Entities (i) for which any of the Stagwell Subject Entities may be liable that would reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole or (ii) that challenges or seeks to prevent, enjoin or otherwise delay the Transactions, and, in each case, to the knowledge of Stagwell, there are no presently existing facts or circumstances that would constitute a reasonable basis therefor. As of the date hereof, there are no judgments, decrees, injunctions, awards or orders of any Governmental Entity outstanding against any of the Stagwell Subject Entities that would reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, or prevent, materially delay or materially impair the ability of Stagwell to timely consummate the Transactions.

Section 5.08            Information Supplied.

(a)                None of the information supplied or to be supplied by Stagwell for inclusion or incorporation by reference in the Combined Proxy Statement/Prospectus will (i) as of the date of its filing, (ii) at the time it becomes effective, (iii) as of the date the Combined Proxy Statement/Prospectus is mailed to shareholders of MDC, or (iv) at the time of the meeting of shareholders of MDC to be held in connection with the Transactions, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

(b)                The portions of the Combined Proxy Statement/Prospectus supplied by Stagwell will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. No representation or warranty is made by Stagwell with respect to information regarding MDC or the MDC Subsidiaries incorporated by reference in the Combined Proxy Statement/Prospectus or supplied by MDC or the MDC Subsidiaries specifically for inclusion in the Combined Proxy Statement/Prospectus.

Section 5.09            No Undisclosed Liabilities. The Stagwell Subject Entities do not have any Liabilities required by GAAP to be recognized on a condensed consolidated statement of financial position of the Stagwell Subject Entities except (a) as reflected, reserved or disclosed in the Stagwell Financial Statements, (b) as incurred since December 31, 2019 in the ordinary course of business, (c) as incurred in accordance with this Agreement or in connection with the Transactions, (d) that are obligations to perform pursuant to the terms of any of the Stagwell Material Contracts, or (e) as would not be material to the Stagwell Subject Entities, taken as a whole.

Section 5.10            Broker’s Fees. No agent, broker, Person or firm is or will be entitled to any advisory, commission or broker’s or finder’s fee or commission from any Stagwell Subject Entity in connection with any of the Transactions.

Section 5.11            Financing.

(a)                Stagwell has delivered to MDC true, accurate and complete copies of (i) the Second Stagwell Credit Agreement Amendment, pursuant to which, and subject to the terms and conditions of which, the lenders party thereto have committed to lend the amounts set forth therein to Stagwell Marketing Group effective as of the Closing (such financing, the “Stagwell Revolver Financing”) and (ii) the Term Loan Credit Agreement, pursuant to which, and subject to the terms and conditions of which, the lenders party thereto have committed to lend the amounts set forth therein to Stagwell Marketing Group effective as of the Closing (such financing, the “Stagwell Term Loan Financing,” and together with the Stagwell Revolver Financing, the “Debt Financing”).

(b)                As of the date of this Agreement, (i) each of the Second Stagwell Credit Agreement Amendment and the Term Loan Credit Agreement is in full force and effect and has not been withdrawn, rescinded or terminated, or otherwise amended or modified in any respect and (ii) each of the Second Stagwell Credit Agreement Amendment and the Term Loan Credit Agreement, in the forms so delivered, constitute a legal, valid and binding obligation of Stagwell Marketing Group and its Subsidiaries, as applicable, and, to the knowledge of Stagwell, the other parties thereto, enforceable by and against it or them, as the case may be, in accordance with its terms except as enforceability may be affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally, and general equitable principles. Other than as expressly set forth in the Second Stagwell Credit Agreement Amendment or the Term Loan Credit Agreement, there are no other agreements, side letters, or arrangements relating to the Stagwell Credit Agreement Amendment or the Term Loan Credit Agreement that could affect the amount, availability or conditionality of the Debt Financing.

(c)                As of the date of this Agreement, (i) no lender party to the Stagwell Credit Agreement Amendment or the Term Loan Credit Agreement has notified Stagwell or any of its Subsidiaries of any inability to, or intention not to, satisfy its obligations under the Stagwell Credit Agreement Amendment or the Term Loan Credit Agreement, as applicable, or not to provide any portion of the Debt Financing, (ii) assuming satisfaction of the Closing Conditions, Stagwell has no reason to believe that any of the conditions to the Second Stagwell Credit Agreement Amendment or the Term Loan Credit Agreement will fail to be satisfied on a timely basis; and (iii) no default, event of default or drawstop event (however described) under either the Stagwell Credit Agreement Amendment or the Term Loan Credit Agreement has occurred and there is no event or circumstance which could reasonably be expected to constitute such a default, event of default or drawstop event which would enable the relevant lenders to refuse to provide funds under either the Stagwell Credit Agreement Amendment or the Term Loan Credit Agreement.

Section 5.12            Labor Matters. (a)No Stagwell Subject Entity (i) is a party to any collective bargaining, works council, information and consultation or other Contracts with any labor organization or union or other employee representative or organization (and no such Contract is currently being requested by, or is under discussion by management with, any employee, group of employees or others), or (ii) is obligated by, or subject to, any order of the National Labor Relations Board or other labor board or administration, or any unfair labor practice decision, or any similar order or decision in any jurisdiction.

(b)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, no Stagwell Subject Entity is a party or subject to any pending or, to the knowledge of Stagwell, threatened labor or civil rights dispute, controversy or grievance or any unfair labor practice charge or proceeding with respect to claims of, or obligations of, any employee or group of employees.

(c)                There are no labor unions, works council or other similar representative or organizations, representing or, to Stagwell’s knowledge, purporting to represent any employees of the Stagwell Subject Entities and no Stagwell Subject Entity has received any notice that any labor representation request is pending or is threatened with respect to any employees of the Stagwell Subject Entities. No Stagwell Subject Entity is subject to any pending or, to the knowledge of Stagwell, threatened, strikes, slowdowns, lockouts, walkouts, work stoppages or any other industrial action in any jurisdiction.

(d)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, the Stagwell Subject Entities are, and during the last five (5) years have been, in compliance with all applicable foreign, federal, state and local Laws respecting labor, employment and employment practices, including terms and conditions of employment, wages and hours, holiday pay, discrimination, equal pay, disability, workers compensation, wrongful discharge, immigration and occupational safety and health, and there are no claims, suits, disputes, actions, grievances, audits or investigations or disciplinary actions by any Governmental Entity or any current or former employee, director, or individual independent contractor of the Stagwell Subject Entities pending or, to the knowledge of Stagwell, threatened against any Stagwell Subject Entity with respect to the employment or termination of any employee or individual independent contractor of the Stagwell Subject Entities (including with respect to any of the topics referenced in this Section 5.12(d)). Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, all individuals who perform or have performed services for the Stagwell Subject Entities have been properly classified under applicable Law as employees or independent contractors to the extent applicable, and, for employees, as an “exempt” or “nonexempt” employee (within the meaning of the Fair Labor Standards Act and applicable state Law) to the extent applicable. None of the Stagwell Subject Entities maintains any leased employees.

(e)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, to the knowledge of Stagwell, in the last five (5) years, no allegations, claims or reports of sexual or other unlawful harassment or discrimination or retaliation have been made against (i) any officer or other key employee of any Stagwell Subject Entity or (ii) any employee of the Stagwell Subject Entities who is currently at a level of Vice President or above.

(f)                 Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, no Stagwell Subject Entity has, during the last three (3) years, effectuated a “plant closing” or “mass layoff” (each as defined in WARN or any similar concept under applicable Laws) that would trigger a notice requirement under WARN or to any Governmental Entity, or taken any other action that would trigger a notice requirement under any similar state or local Law and no layoffs that could implicate any such applicable Laws are currently contemplated by Stagwell.

(g)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, each Stagwell Subject Entity (i) is and at all relevant times has been in compliance with COVID-19 related safety and health Laws and guidance issued and enforced by OSHA and the applicable foreign, federal, state or local Governmental Entity, and with the paid and unpaid leave requirements of the Families First Coronavirus Response Act and any similar Laws in other jurisdictions; and (ii) to the extent any Stagwell Subject Entity has granted employees paid sick leave or paid family leave under the Families First Coronavirus Response Act or any similar Laws in other jurisdictions, such Stagwell Subject Entity has taken commercially reasonable efforts to obtain and retain all material documentation required to substantiate eligibility for the relevant leave and for sick leave or family leave tax credits pursuant to applicable Law to the extent the time limit to obtain or receive such substantiation has not lapsed. To the extent Stagwell has knowledge of any Stagwell Subject Entity employees or independent contractors who have tested positive for COVID-19, such Stagwell Subject Entity has taken commercially reasonable efforts to take all material precautions required under applicable Law with respect to such employees and independent contractors. The Stagwell Subject Entities have used commercially reasonable efforts to document any such diagnosis to the extent required by laws of OSHA or other applicable Law.

Section 5.13            Benefit Plans.

(a)                Section 5.13(a) of the Stagwell Disclosure Letter contains a true, complete and correct list of each material Stagwell Benefit Plan.

(b)                Each Stagwell Benefit Plan has been established, operated, maintained, funded and administered (i) in compliance in all material respects with all applicable Laws, orders, statutes, regulations and rules issued by a Governmental Entity, including ERISA and the Code, and with any Contract entered into with a union, works council or labor representative or organization and (ii) in accordance with its terms.

(c)                With respect to each material Stagwell Benefit Plan, Stagwell has made available to MDC copies, to the extent applicable, of: (i) the current plan and trust documents and the most recent summary plan description and any material modifications with respect thereto and, with respect to any unwritten Stagwell Benefit Plan, a written summary of such Stagwell Benefit Plan, (ii) all amendments thereto, (iii) the three most recent annual reports (Form 5500 series), (iv) the most recent financial statements, (v) the most recent Internal Revenue Service determination letter or opinion letter, (vi) all non-routine, written communications with respect thereto and (vii) any comparable documents with respect to Stagwell Non-US Plans that are required to be prepared or filed under the applicable Laws of a non-U.S. jurisdiction.

(d)                No Stagwell Subject Entity or any of their respective ERISA Affiliates has ever maintained or contributed to (or been obligated to contribute to): (i) a benefit plan that was ever subject to Section 412 of the Code or Title IV of ERISA, (ii) a “multiemployer plan” (as defined in Section 3(37) of ERISA), or (iii) a “multiple employer plan” as defined in Section 210 of ERISA or Section 413(c) of the Code.

(e)                Each Stagwell Benefit Plan intended to qualify under Section 401(a) of the Code is the subject of a favorable determination or opinion letter from the Internal Revenue Service with respect to its qualified status, and to the knowledge of Stagwell, no facts or circumstances exist that have jeopardized or would reasonably be expected to jeopardize the qualification of such Stagwell Benefit Plan.

(f)                 Each Stagwell Benefit Plan that is required to be registered or approved by a foreign Governmental Entity or subject to the Laws of a jurisdiction outside of the United States or that is otherwise maintained for the benefit of current or former employees or dependents thereof who perform services or who are employed outside of the United States (each a “Stagwell Non-US Plan”), has if required been registered with, or approved by, and has been maintained in all material respects in good standing with such Governmental Entity, and in all cases has been maintained in all material respects in compliance with applicable Law and its plan, policy and trust documents. With respect to each Stagwell Non-US Plan, the fair market value of the assets of such funded Stagwell Non-US Plan, the liability of each insurer for such Stagwell Non-US Plan funded through insurance or the book reserve established for such Stagwell Non-US Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations, as of the date of this Agreement, with respect to all current and former participants in such Stagwell Non-US Plan according to the actuarial assumptions and valuations most recently used to determine employer contributions to such Stagwell Non-US Plan, and the transactions contemplated hereby shall not cause such assets or insurance obligations to be less than such benefit obligations. If intended to qualify for special Tax or other treatment, such Stagwell Non-US Plan satisfies all requirements for such treatment.

(g)                None of the Stagwell Subject Entities is or has at any time been an “employer” (for the purpose of sections 38 to 51 of the United Kingdom Pensions Act 2004) of a UK registered occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993), or “connected” with or an “associate” (as those terms are used in the United Kingdom Pensions Act 2004) of such an employer. None of the Stagwell Subject Entities maintains or contributes to any plan or arrangement that is a “multi-employer scheme” as defined in section 75A of the UK Pensions Act 1995. No contribution notice or financial support direction has been issued by the UK Pensions Regulator under sections 38 or 43 of the UK Pensions Act 2004 against any of the Stagwell Subject Entities and there is no fact or circumstance which may give rise to any such direction or notice to or in respect of any of the Stagwell Subject Entities nor any of their Affiliates or to MDC or any of its Affiliates. None of the Stagwell Subject Entities nor any of their Affiliates has been notified that it is liable for a debt arising or payable under a Section 75 Debt and neither the execution and delivery of this Agreement nor the performance of the transactions contemplated by this Agreement will or may (in either case, either alone or upon the occurrence of any additional or subsequent events) result in any Section 75 Debt arising or becoming payable by MDC, any of the Stagwell Subject Entities or any other Person.

(h)                All contributions required to be made prior to the date hereof with respect to any Stagwell Benefit Plan by applicable Law, any order or any Stagwell Benefit Plan document or other contractual undertaking, and all premiums due or payable prior to the date hereof with respect to any insurance policy funding any Stagwell Benefit Plan have been timely made or properly accrued in accordance with GAAP.

(i)                 There are no pending or, to the knowledge of Stagwell, threatened material Proceedings by or on behalf of any Stagwell Benefit Plan, any employee or beneficiary covered under any Stagwell Benefit Plan, any Governmental Entity involving any Stagwell Benefit Plan, or otherwise involving any Stagwell Benefit Plan (other than routine claims for benefits). No Stagwell Benefit Plan is under audit or is the subject of an investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation, the U.S. Securities and Exchange Commission or any other Governmental Entity, in any jurisdiction, nor is any such audit or investigation pending or, to the knowledge of Stagwell, threatened.

(j)                 No Stagwell Benefit Plan provides post-employment welfare benefits, including life insurance, death or medical benefits, beyond termination of service or retirement for any participant, or any spouse, dependent or beneficiary of a participant except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (or any other similar applicable Law).

(k)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, each Stagwell Benefit Plan that is or was a nonqualified deferred compensation plan subject to Section 409A of the Code has been maintained and operated in operational and documentary compliance with Section 409A of the Code and applicable guidance thereunder during the respective time periods in which such operational or documentary compliance has been required. No Tax penalties or additional Taxes have been imposed or would be reasonably expected to be imposed on any current or former employee of any Stagwell Subject Entity, and no acceleration of Taxes has occurred or would be reasonably expected to occur with respect to any current or former employee, director or other service provider of any Stagwell Subject Entity, in each case as a result of a failure to comply with Section 409A of the Code. No employee, director or other service provider of any Stagwell Subject Entity is entitled to receive any gross-up or additional payment in connection with the Tax required by Section 409A or Section 4999 of the Code.

(l)                 Neither the execution nor delivery of this Agreement nor the consummation of the Transactions (either alone or in conjunction with another event whether contingent or otherwise) will: (i) accelerate the time of payment or vesting of any compensation or benefit, or trigger any funding of benefits under any Stagwell Benefit Plan or otherwise; (ii) entitle any current or former employee, director or other service provider to any payment, compensation or benefit or increase in compensation or benefits under any Stagwell Benefit Plan or otherwise; or (iii) result in any breach or violation of or default under or limit any right to amend, modify or terminate any Stagwell Benefit Plan.

(m)              No amount that will be received (whether in cash or property or the vesting of property), as a result of the execution of this Agreement or the consummation of the Transactions, by any current or former employee, director or individual service provider under any Stagwell Benefit Plan or otherwise would not be deductible by any Stagwell Subject Entity by reason of Section 280G of the Code or would be subject to an excise tax under Section 4999 of the Code.

Section 5.14            Taxes.

(a)                (i) All material Tax Returns required by Law to be filed by a Stagwell Subject Entity (or in which a Stagwell Subject Entity is required to be included) have been timely filed (taking into account all applicable extensions), and all such Tax Returns are true, correct and complete in all material respects, (ii) all Taxes with respect to each Stagwell Subject Entity have been timely paid to the appropriate Governmental Entity and each Stagwell Subject Entity has timely paid (or has had timely paid on its behalf) all material Taxes required to be paid by it, except for those Taxes being contested in good faith or for which adequate reserves have been established in the financial statements of the Stagwell Subject Entities in accordance with GAAP.

(b)                The Stagwell Subject Entities have (i) withheld and paid all material Taxes required to have been withheld and paid prior to the Closing in connection with amounts paid or owing to any employee, former employee, creditor, customer, supplier, seller or other third party and (ii) complied with all material reporting requirements (including maintenance of required records with respect thereto) with respect to such payments.

(c)                No claim has ever been made by a Governmental Entity in any jurisdiction where a Stagwell Subject Entity does not file Tax Returns or pay Taxes that such Stagwell Subject Entity is required to file Tax Returns or pay Taxes in such jurisdiction, other than a claim that has been finally resolved.

(d)                There are no material audits, disputes, or administrative or judicial proceedings ongoing or pending, or claims asserted in writing, in respect of material unpaid Taxes of any Stagwell Subject Entity, other than any claim that has been resolved. No deficiency for any Taxes has been assessed or proposed or asserted in writing against any Stagwell Subject Entity that has not been resolved and paid in full.

(e)                There are no material Liens (other than Permitted Liens) for unpaid Taxes upon any of the assets of any Stagwell Subject Entity.

(f)                 No Stagwell Subject Entity is party to any material agreement, the principal purpose of which is the allocation, indemnification or sharing of Taxes other than such an agreement exclusively between or among any Stagwell Subject Entities. No Stagwell Subject Entity has any liability for any Tax or any portion of a Tax (or any amount calculated with reference to any portion of a Tax) of any Person other than a Stagwell Subject Entity, including under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law) or as transferee or successor, and no Stagwell Subject Entity has been a member of an affiliated group (or similar state, local or foreign filing group) filing a consolidated income or franchise Tax Return (other than a group the common parent of which is a Stagwell Subject Entity or for which the statute of limitations on collection of the relevant Tax has expired).

(g)                No Stagwell Subject Entity has engaged in any listed transaction within the meaning of Treasury Regulations Section 1.6011-4(b)(2).

(h)                No Stagwell Subject Entity will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of (A) any installment sale or open transaction disposition made on or prior to the Closing Date, (B) any prepaid amount received on or prior to the Closing Date, (C) any “closing agreement,” as described in Section 7121 of the Code (or any corresponding provision of state, local or non-U.S. income tax law) entered into on or prior to the Closing Date, (D) any “gain recognition agreement” or “domestic use election” (or analogous concepts under state, local or foreign income Tax Law); (E) a change in the method of accounting for a period ending prior to or including the Closing Date; or (F) an election pursuant to Section 965(h) of the Code.

(i)                 During the period beginning two (2) years before the date hereof, no Stagwell Subject Entity has been a distributing corporation or a controlled corporation for purposes of Section 355 of the Code.

(j)                 No Stagwell Subject Entity has filed an election under Treasury Regulations Section 301.9100-22 to apply the Partnership Audit Rules to taxable years that begin prior to December 31, 2017.

(k)                No Stagwell Subject Entity has deferred any payroll Taxes pursuant to the CARES Act or are the beneficiaries of any other COVID-19 related tax deferral relief of any U.S. state and local Governmental Entities.

(l)                 No Stagwell Subject Entity has incurred any loan, directly or indirectly, pursuant to the Paycheck Protection Program, established by the CARES Act, as amended or supplemented from time to time by interim rules, policy statements, FAQs or otherwise.

(m)              Section 5.14(a) of the Stagwell Disclosure Letter includes a list of each Stagwell Subject Entity together with each such Stagwell Subject Entity’s classification for U.S. federal income tax purposes.

Section 5.15            Environmental Matters. Except as to matters that would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole:

(a)                Each of the Stagwell Subject Entities is, and for the past three (3) years has been, in compliance with all applicable Environmental Laws;

(b)                Each of the Stagwell Subject Entities is in possession of all Environmental Permits and is in compliance with the terms and conditions thereof, and such Environmental Permits are in full force and effect, free from breach, and will not be adversely affected by the Transactions;

(c)                No Stagwell Subject Entity has entered into any consent decree under any Environmental Law;

(d)                There are no Environmental Claims that are pending or, to the knowledge of Stagwell, threatened against any Stagwell Subject Entity or, to the knowledge of Stagwell, against any Person or entity whose liability for any Environmental Claim any of the Stagwell Subject Entities has or may have retained or assumed either contractually or by operation of Law;

(e)                To the knowledge of Stagwell, there are no past or present specific conditions, events or incidents, including the Release or presence of any Hazardous Material, which would be reasonably likely to form the basis of any Environmental Claim against any Stagwell Subject Entity or against any Person whose liability for any Environmental Claim any of the Stagwell Subject Entities has or may have retained or assumed either contractually or by operation of Law; and

(f)                 Stagwell has delivered to, or has otherwise made available for inspection by MDC, all material written assessments, audits, investigation reports, studies, test results or similar environmental documents in the possession of any Stagwell Subject Entity related to environmental, health or safety matters or Hazardous Materials.

Section 5.16            Compliance with Laws. Except for non-compliance as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole: (a) the Stagwell Subject Entities are, and for the three (3) years prior to the date hereof have been, in compliance with all applicable Laws; and (b) during the three (3) year period prior to the date hereof, no written notice, charge, claim, action or assertion has been received by any Stagwell Subject Entity or, to Stagwell’s knowledge, filed, commenced or threatened in writing against any Stagwell Subject Entity alleging any such non-compliance. All licenses, permits and approvals required under such Laws with respect to the Stagwell Subject Entities or their businesses, properties or assets are in full force and effect, except where the failure to be obtained or to be in full force and effect would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole.

Section 5.17            Title to Properties.

(a)                No Stagwell Subject Entity owns any real property.

(b)                Section 5.17(b) of the Stagwell Disclosure Letter sets forth an accurate and complete list of each real property lease, sublease, license or occupancy Contract pursuant to which any Stagwell Subject Entity leases, subleases, licenses or occupies real property (such properties, the “Stagwell Leased Real Property,” and such Contracts, the “Stagwell Leases”). To the knowledge of Stagwell, all buildings, structures and improvements located on such Stagwell Leased Real Property are in reasonably good condition and repair, ordinary wear and tear excepted, except if the failure to meet such standards would not materially and adversely impair the use of any such real property as currently used by the Stagwell Subject Entities’ business. To the knowledge of Stagwell, a Stagwell Subject Entity has a valid and binding leasehold interest in each parcel of Stagwell Leased Real Property, free and clear of any material Liens, other than Permitted Liens. To the knowledge of Stagwell, no Stagwell Subject Entity has subleased, licensed or otherwise granted to a third party any material right to use or occupy all or any portion of the Stagwell Leased Real Property.

(c)                A Stagwell Subject Entity has good and valid title to, or in the case of leased properties and assets, valid leasehold interests in, all of the tangible assets of the Stagwell Subject Entities, except where the failure to have such good and valid title or valid leasehold interests would not, individually or in the aggregate, reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, in each case free and clear of any Liens, other than Permitted Liens.

Section 5.18            Intellectual Property.

(a)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, to the knowledge of Stagwell, the Stagwell Subject Entities own or possess licenses or other valid rights to use all Intellectual Property necessary to carry on their respective businesses as currently conducted. Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, to the knowledge of Stagwell, the conduct of the businesses of the Stagwell Subject Entities does not, and immediately following the Closing, will not, materially infringe, misappropriate or otherwise violate, and has not since January 1, 2018, materially infringed, misappropriated or otherwise violated, the Intellectual Property, moral rights or publicity rights (or other rights to use the names, likeness, signature, image, voice, personality or biographical information) of others, and, to the knowledge of Stagwell, no third party is infringing or, since January 1, 2018, has infringed the Intellectual Property owned or claimed to be owned by any Stagwell Subject Entity (“Stagwell Intellectual Property”). None of the Stagwell Subject Entities has received any notice from any Person claiming that any Stagwell Subject Entity, the conduct of the business of any Stagwell Subject Entity or any product or service of any Stagwell Subject Entity, as applicable, infringes, violates or misappropriates any Intellectual Property, moral rights or publicity rights (or other rights to use the names, likeness, signature, image, voice, personality or biographical information).

(b)                Section 5.18(b) of the Stagwell Disclosure Letter lists (i) all (A) material registered, issued or filed Stagwell Intellectual Property, (B) material unregistered trademarks included in the Stagwell Intellectual Property and (C) the Stagwell Digital Products; and (ii) any challenges to the validity, enforceability or ownership of any of the material Stagwell Intellectual Property, including Proceedings before any Governmental Entity (including the United States Patent and Trademark Office or equivalent authority anywhere in the world) to which a Stagwell Subject Entity is or was, since January 1, 2018, a party and in which claims are or were raised relating to the validity, enforceability or ownership of any of the material Stagwell Intellectual Property (other than ordinary course Proceedings relating to any filed but not yet registered or issued Stagwell Intellectual Property to which solely the Governmental Entity and a Stagwell Subject Entity are or were parties).

(c)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, a Stagwell Subject Entity is the sole and exclusive owner of each item of Stagwell Intellectual Property, free and clear of any Liens other than Permitted Liens, and, to the knowledge of Stagwell, except as would not reasonably be expected to have a Stagwell Material Adverse Effect, a Stagwell Subject Entity has registered its acquisition or ownership of each item of registered, issued or applied-for Stagwell Intellectual Property in its name with the United States Patent and Trademark Office or the applicable equivalent authority anywhere in the world. To the knowledge of Stagwell, no Stagwell Subject Entity has (i) granted any exclusive license with respect to any material Stagwell Intellectual Property to any other Person, (ii) transferred or assigned any material Stagwell Intellectual Property to any Person, (iii) granted to any Person any option to any of the foregoing, or (iv) done any act or failed to take any action that could cause the rights of any Stagwell Subject Entity in any Stagwell Intellectual Property to enter into the public domain other than in the ordinary course of business consistent with past practice.

(d)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, each (i) current and former employee of a Stagwell Subject Entity, (ii) current and former consultant or contractor of a Stagwell Subject Entity, and (iii) other Person, in each case who has been involved in the creation, invention or development of Intellectual Property for or on behalf of a Stagwell Subject Entity that does not vest initially in a Stagwell Subject Entity by operation of law, has executed a binding, valid and enforceable Contract with the applicable Stagwell Subject Entity that conveys to the applicable Stagwell Subject Entity any and all of such Person’s right, title and interest in and to, such Intellectual Property. To the knowledge of Stagwell, since January 1, 2018, no Person has made, or threatened to make, any right, claim, interest or option (including the right to further remuneration or consideration) with respect to any such material Intellectual Property.

(e)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, to the knowledge of Stagwell, with respect to each item of registered, issued or applied-for Stagwell Intellectual Property, (i) all necessary application, registration, maintenance and renewal fees have been timely paid to, and all necessary documents and certificates have been timely filed with, the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Intellectual Property rights; and (ii) each such item is subsisting, and except with respect to applications, valid and enforceable.

(f)                 The Stagwell Subject Entities have taken commercially reasonable measures to preserve and maintain the confidentiality of, and otherwise protect against the misuse or misappropriation of, all material Stagwell-Related Confidential Information. Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, to Stagwell’s knowledge, since January 1, 2018, there has been no unauthorized disclosure, misappropriation or loss of any Stagwell-Related Confidential Information.

(g)                To the knowledge of Stagwell, and except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, the Stagwell Subject Entities have not used Open Source Software in any manner that would, with respect to any software used in connection with the Stagwell Digital Products (i) require its disclosure or distribution in source code form, (ii) require the licensing thereof for the purpose of making derivative works or (iii) prohibit charging a royalty or other fee for the distribution thereof. To the knowledge of Stagwell, and except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, with respect to any Open Source Software that is used by the Stagwell Subject Entities in connection with the Stagwell Digital Products, the Stagwell Subject Entities are in compliance with all applicable licenses with respect thereto.

(h)                To the knowledge of Stagwell, and except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, except as set forth in Section 5.18(h) of the Stagwell Disclosure Letter, none of the Stagwell Subject Entities has been a party to any source code escrow agreement requiring the deposit or licensing of source code incorporated or embodied in the Stagwell Digital Products (other than any open source license) for the benefit of or to any third party, and neither the execution of this Agreement nor the consummation of the Transactions will result in any requirement on any Stagwell Subject Entities (or, after the Closing, New MDC or any of its Affiliates) to (x) disclose or deliver any such source code to any Person or (y) deposit such source code into escrow or release any such source code that is currently deposited in an escrow.

(i)                 To the knowledge of Stagwell, none of the Stagwell Digital Products: (i) contains any bug, defect or error that materially affects the use, functionality or performance of the Stagwell Digital Products, other than those discovered and corrected or in the process of being corrected in the normal course of any Stagwell Subject Entity’s software maintenance procedures or (ii) currently fails to operate or comply, in any material respect, with any applicable warranty, specifications or contractual commitment relating to the use, functionality or performance of the Stagwell Digital Products (or any software therein).

Section 5.19                Privacy and Data Security.

(a)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, the Stagwell Subject Entities, and to the knowledge of Stagwell, all third Persons Processing Personal Data for or on behalf of the Stagwell Subject Entities, are in compliance and, since January 1, 2018, have been in compliance with all Data Protection Laws applicable to the operations of the Stagwell Subject Entities and all Stagwell Data Protection Commitments, in each case in all material respects.

(b)                No investigation or material claim relating to any Stagwell Subject Entity’s Processing of Personal Data, or relating to any Stagwell Subject Entity’s compliance with Data Protection Laws applicable to the operations of the Stagwell Subject Entities or Stagwell Data Protection Commitments, is being, or since January 1, 2018 was, made, conducted, prosecuted, litigated, or, to the knowledge of Stagwell, threatened by any Governmental Entity or third party.

(c)                To the knowledge of Stagwell, the execution, delivery and performance of this Agreement will not cause, constitute, or result in a breach or violation of any Data Protection Laws applicable to the operations of the Stagwell Subject Entities or Stagwell Data Protection Commitments.

(d)                The Stagwell Subject Entities have implemented reasonable, and otherwise in accordance with Laws applicable to the operations of the Stagwell Subject Entities, technical, physical, and organizational measures designed to preserve the availability, proper functioning, security and integrity of the Stagwell IT Systems and Stagwell-Related Confidential Information, and to respond to any Stagwell IT or Security Incidents. The Stagwell IT Systems are adequate for the Stagwell Subject Entities to operate their business as currently conducted in all material respects.

(e)                Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, since January 1, 2018, to the knowledge of Stagwell, no Stagwell Subject Entity has experienced any material Stagwell IT or Security Incident.

(f)                 Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, the Stagwell Subject Entities have established and maintain reasonable data backup and disaster recovery plans for the Stagwell IT Systems of a scope appropriate for the size and complexity of the Stagwell Entities.

Section 5.20              Insurance. Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, all insurance policies maintained by the Stagwell Subject Entities, including fire and casualty, general liability, cybersecurity, workers’ compensation and employer liability, directors and officers and other liability policies are in full force and effect and provide a level of coverage that is reasonably customary in comparison to coverage carried by companies in similar lines of business as the Stagwell Subject Entities. As of the date hereof, there is no pending claim against such insurance policies by or in respect of the Stagwell Subject Entities as to which the insurers have denied coverage. Except as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole, none of the Stagwell Subject Entities is in breach or default under any such insurance policy, and none of the Stagwell Subject Entities has taken any action or failed to take any action which (including with respect to the Transactions), with notice or lapse of time or both, would constitute a breach or default, or permit a termination or material modification of any of the material insurance policies of the Stagwell Subject Entities.

Section 5.21            Material Contracts.

(a)                Except for this Agreement, Section 5.21(a) of the Stagwell Disclosure Letter sets forth a correct and complete list of each of the following Contracts to which, as of the date hereof, any Stagwell Subject Entity is a party or by which any Stagwell Subject Entity or any of their respective assets is bound (each such Contract set forth or required to be set forth on the Stagwell Disclosure Letter, a “Stagwell Material Contract”):

(i)                 any partnership or joint venture agreement (other than a partnership agreement constituting an organizational agreement of a Subsidiary) that is material to the Stagwell Subject Entities, taken as a whole;

(ii)               except for (A) intercompany transactions among the Stagwell Subject Entities in the ordinary course of business consistent with past practices and (B) the Stagwell Credit Agreement, the Term Loan Credit Agreement and any security documents related thereto, any Contract relating to the borrowing of money (including any guarantee thereof) or that is a mortgage, security agreement, capital lease or similar agreement, in each case in excess of $5,000,000 or that creates a Lien other than a Permitted Lien on any material asset of any Stagwell Subject Entity;

(iii)            other than any partnership, joint venture or similar arrangement, any Contract that materially limits or purports to materially limit the ability of the Stagwell Subject Entities, taken as a whole, to compete or engage in any line of business, in any geographic area or with any Person;

(iv)            except for intercompany transactions among the Stagwell Subject Entities in the ordinary course of business consistent with past practices and any security documents related to the Stagwell Credit Agreement or the Term Loan Credit Agreement, any Contract that includes a license, sublicense or other grant of rights under any Intellectual Property or other intangible asset (whether as a licensor or a licensee) and contains (A) a payment of $5,000,000 or more per year or (B) a grant of exclusive rights under material Intellectual Property;

(v)             any Contract entered into since January 1, 2018 relating to the sale of any of the assets or properties of the Stagwell Subject Entities in excess of $5,000,000, other than (A) those in respect of which the sale transaction has previously closed, are so reflected on the Stagwell Financial Statements, and do not provide for any continuing material obligations on the part of the Stagwell Subject Entities, or (B) relate to an intercompany transaction among the Stagwell Subject Entities in the ordinary course of business consistent with past practices;

(vi)            any Contract entered into since January 1, 2018 relating to the acquisition by any Stagwell Subject Entity of any assets or the capital stock of any other Person in excess of $5,000,000, other than those in respect of which the acquisition has previously closed, are so reflected on the Stagwell’s Financial Statements and do not provide for any continuing material obligations on the part of the Stagwell Subject Entities;

(vii)           with respect to a Stagwell Incentive Plan or Stagwell Benefit Plan, any Contract that provides for an increase in, or acceleration of the vesting of any, benefits as a result of the occurrence of any of the Transactions;

(viii)         any Contract (other than a Stagwell Benefit Plan) under which the Transactions would trigger any change of control, any right of termination, cancellation or amendment, or any acceleration of any obligation or loss of a benefit;

(ix)             any Contract that requires aggregate annual payments by or to any Stagwell Subject Entity in excess of $10,000,000 or aggregate payments by or to any Stagwell Subject Entity in excess of $10,000,000, other than as set forth in clause (xiii) of this ‎Section 5.21(a);

(x)              any Contract that contains (A) exclusivity or similar provisions, (B) non-solicitation provisions, or (C) “most favored nation” provisions, in each case that would limit in any material respect, following the Closing, the Stagwell Subject Entities, taken as a whole, from engaging in their businesses;

(xi)              any Contract involving any resolution or settlement of any actual or threatened legal proceeding before a Governmental Entity or that provides for any injunctive or other non-monetary relief or grants a material release;

(xii)            any Contract with any Governmental Entity; and

(xiii)          any Contract with a Stagwell Material Customer or a Stagwell Material Supplier that involves aggregate payments by or to any Stagwell Subject Entity in excess of $1,000,000 during the fiscal year ended December 31, 2019.

(b)                Stagwell has made available to MDC correct and complete copies of each Stagwell Material Contract (including all modifications, amendments, supplements, annexes and schedules thereto and written waivers thereunder). Each Stagwell Material Contract is valid and binding on a Stagwell Subject Entity, as the case may be, and, to the knowledge of Stagwell, each other party thereto, and is in full force and effect, except for such failures to be valid and binding or to be in full force and effect as would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole. Neither a Stagwell Subject Entity, nor, to Stagwell’s knowledge, any counterparty to any Stagwell Material Contract, has violated or is alleged to have violated any provision of, or committed or failed to perform any act which, with or without notice, lapse of time or both, would constitute a default under the provisions of any Stagwell Material Contract, except in each case for those violations and defaults which would not reasonably be expected to be material to the Stagwell Subject Entities, taken as a whole.

Section 5.22            Customers and Suppliers. Section 5.22(a) of the Stagwell Disclosure Letter sets forth a correct and complete list of the top fifteen (15) third-party customers (by annual revenue) of the Stagwell Subject Entities, taken as a whole, for the fiscal year ended December 31, 2019 (collectively, the “Stagwell Material Customers”) and the amount of consideration paid to the Stagwell Subject Entities by each Stagwell Material Customer during such fiscal year period. Section 5.22(b) of the Stagwell Disclosure Letter sets forth a correct and complete list of the top ten (10) third-party suppliers (by annual expenditure) of the Stagwell Subject Entities for each of the fiscal year ended December 31, 2019 (collectively, the “Stagwell Material Suppliers”) and the amount of consideration paid to each Stagwell Material Supplier by the Stagwell Subject Entities during such period. Since January 1, 2019 through the date of this Agreement: (i) no Stagwell Material Customer has canceled or otherwise terminated its relationship with the Stagwell Subject Entities except as would not reasonably be expected to be material to the business of the Stagwell Subject Entities, taken as a whole, and (ii) to the knowledge of Stagwell, no Stagwell Material Customer or Stagwell Material Supplier has threatened to cancel or otherwise terminate its relationship with the Stagwell Subject Entities or its usage of the services of the Stagwell Subject Entities except as would not reasonably be expected to be material to the business of the Stagwell Subject Entities, taken as a whole.

Section 5.23            Certain Business Practices.

(a)                As of the date hereof, none of the Stagwell Subject Entities, or any director (or other comparable position), officer, employee, affiliate or agent of the same (acting in such capacity), is in material violation of or has for the three (3) years prior to the date hereof materially violated any applicable Law, or, to the knowledge of Stagwell, is under investigation or the subject of any inquiry, litigation or administrative or enforcement proceedings with respect to or been threatened to be charged with or given notice of any violation of, any applicable Law, has received a subpoena relating to an investigation or allegations of the same, or is aware of any conduct that could reasonably give rise to any investigation, inquiry, litigation or administrative or enforcement proceeding relating to alleged violations of applicable Law at this time or any time in the future. As of the date hereof, there is no judgment, decree, injunction, rule or order of any arbitrator or Governmental Entity outstanding against the Stagwell Subject Entities, or any director (or other comparable position), officer, employee or agent of the same (acting in such capacity).

(b)                Neither the Stagwell Subject Entities, nor any director (or other comparable position), officer, employee, affiliate or agent of the same (acting in such capacity) in connection with the business activities of the Stagwell Subject Entities, has, in any material respect, directly or indirectly:

(i)               made, authorized, offered, or promised any unlawful contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment of value, regardless of form, whether in money, property, or services, to any Official or other Person in violation of any Anti-Bribery Law;

(ii)              used any Stagwell Subject Entity funds for unlawful contributions, unlawful gifts, unlawful entertainment or other unlawful expenses relating to political activity;

(iii)             established or maintained any unlawful or hidden fund of monies or other assets of the Stagwell Subject Entities; or

(iv)             made, promised or authorized any fraudulent entry on the books or records of the Stagwell Subject Entities.

(c)                Each of the Stagwell Subject Entities maintains books, records, and accounts that are readily accessible and available and that, in reasonable detail, accurately and fairly reflect its transactions and dispositions of its assets, and maintains a system of internal accounting controls sufficient to provide reasonable assurances of the same, including that:

(i)               its transactions are executed, and its funds are expended only in accordance with its management’s authorization;

(ii)              its transactions are recorded as necessary to permit preparation of its financial statements in conformity with the GAAP;

(iii)             access to its assets is permitted only in accordance with its management’s authorization; and

(iv)             its accounting for assets is compared with existing assets at reasonable intervals and action is taken with respect to any differences.

(d)                The operations of the Stagwell Subject Entities are conducted in compliance in all material respects with all applicable Export Laws and anti-money laundering laws. Neither the Stagwell Subject Entities, nor any director (or other comparable position), officer, employee affiliate or agent of the same, or holders of more than ten percent (10%) of the equity interests in the same (i) is a Sanctioned Person, or (ii) engages in any dealings or transactions with any Sanctioned Person on behalf of the Stagwell Subject Entities in violation of Export Laws.

Section 5.24            Affiliate Transactions. No officer or director of Stagwell or any Stagwell Subject Entity, or to the knowledge of Stagwell, no holder of equity interests in Stagwell or any Stagwell Subject Entity and, to the knowledge of Stagwell, no immediate family member of any of such Persons, or, to the knowledge of Stagwell, any trust, partnership or corporation in which any of such Persons has or has had an interest is a party to any Contract (other than a Stagwell Benefit Plan) to which any Stagwell Subject Entity is a party or any of its properties or assets are bound.

Section 5.25             Sufficiency of Assets.

(a)              The Stagwell Subject Entities comprise all of the operating Subsidiaries of Stagwell.

(b)              The properties, assets and rights of the Stagwell Subject Entities include all properties, assets and rights (i) used or held for use in connection with the conduct of the business of Stagwell and its Subsidiaries and (ii) necessary and sufficient for the continued conduct of the business of Stagwell and its Subsidiaries after the Closing, in all material respects, in substantially the same manner as conducted immediately prior to the Closing.

Section 5.26            Competition Act. Stagwell and its Affiliates do not have assets in Canada that exceed $200 million or gross revenues from sales in, from or into Canada that exceed $200 million, all as determined in accordance with Part IX of the Competition Act and the Notifiable Transactions Regulations thereunder.

Section 5.27            Investment Canada Act. Stagwell is a “trade agreement investor” within the meaning of the Investment Canada Act.

Section 5.28            No Additional Representations. Except for the representations and warranties contained in Article 4, Stagwell acknowledges that neither MDC, nor any other Person on behalf of MDC, makes any other express or implied representation or warranty with respect to MDC or any of its Affiliates or with respect to any other information provided to Stagwell in connection with this Agreement or the Transactions. Stagwell expressly disclaims reliance on any and all representations and warranties other than the representations and warranties set forth in Article 4, whether express or implied.

Article 6
CONDUCT OF THE BUSINESS

Section 6.01            Conduct of Business of MDC and the MDC Subsidiaries Pending the Transactions.

(a)                MDC covenants and agrees that, from the date hereof until the earlier of the termination of this Agreement in accordance with its terms and the Closing, except (i) as set forth on Section 6.01(a) of the MDC Disclosure Letter, (ii) as Stagwell may consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (iii) as otherwise required by applicable Laws, (iv) in connection with any COVID-19 Measure or (v) as otherwise expressly required or contemplated by this Agreement (including pursuant to Section 7.18, the Debt Transactions or the Transactions, including the Redomiciliation, the Pre-Redomiciliation Restructuring, the Maxxcom Restructuring, the MDC Merger, the MDC Conversion, the Midas Corporate HoldCo Formation and the Stagwell Contribution), the businesses of MDC and the MDC Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and MDC shall, and shall, to the extent permitted under the applicable organizational documents, cause each MDC Subsidiary to, use its reasonable best efforts to maintain its assets and preserve intact its business and operations.

(b)                Without limiting the generality of Section 6.01(a), MDC covenants and agrees that, from the date hereof until the earlier of the termination of this Agreement in accordance with its terms and the Closing, except (i) as set forth on Section 6.01(b) of the MDC Disclosure Letter, (ii) as Stagwell may consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (iii) as otherwise required by applicable Laws, (iv) in connection with any COVID-19 Measure or (v) as otherwise expressly required or contemplated by this Agreement (including pursuant to Section 7.18, the Debt Transactions or the Transactions, including the Redomiciliation, the Pre-Redomiciliation Restructuring, the Maxxcom Restructuring, the MDC Merger, the MDC Conversion, the Midas Corporate HoldCo Formation and the Stagwell Contribution), MDC shall not directly or indirectly, and shall, to the extent permitted under the applicable organizational documents, cause the MDC Subsidiaries not to, do any of the following:

(i)                 adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;

(ii)               other than with respect to direct or indirect wholly-owned Subsidiaries, merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements providing for the sale, lease, pledge, assignment or other disposition of their respective material assets, operations or business;

(iii)             acquire any corporation, partnership or other business organization or division thereof or collection of assets constituting all or substantially all of a business or business unit, whether by merger or consolidation, purchase of substantial assets or equity interest or any other manner, from any other Person;

(iv)              issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, units, warrants, phantom stock, stock appreciation rights, or any other equity or equity-based compensation or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities; provided, that this Section 6.01(b)(iv) shall not apply to the issuance of any units or shares upon the exercise or settlement of any MDC Incentive Awards outstanding as of the date hereof or granted after the date hereof in the ordinary course of business consistent with past practice (so long as (A) at no point shall the aggregate number of units or shares granted pursuant to any such MDC Incentive Awards exceed the aggregate number of units or shares granted pursuant to MDC Incentive Awards in the relevant grant cycle in the prior year and (B) no MDC Incentive Awards may be granted to members of the MDC Board pursuant to this proviso to Section 6.01(b)(iv));

(v)                create or incur any Lien securing indebtedness for borrowed money (other than a Lien currently provided for under the MDC Credit Agreement, any Permitted Lien and/or the grant of any cash collateral in respect of letters of credit issued in respect of, or otherwise securing, ordinary course operating liabilities) on any assets having a value in excess of $5,000,000 in the aggregate;

(vi)             make any loans, advances, capital contributions to or investments in any Person, other than between or among MDC and one or more MDC Subsidiaries, in each case greater than $5,000,000 or make any guarantees;

(vii)           declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for declared dividends paid by any direct or indirect wholly-owned MDC Subsidiary to MDC or any other direct or indirect wholly-owned MDC Subsidiary) or enter into any Contract with respect to the voting of its capital stock;

(viii)          reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;

(ix)              incur any indebtedness for borrowed money (which, for the avoidance of doubt, shall not include obligations in respect of cash-collateralized letters of credit issued in respect of, or other grants of cash collateral securing, ordinary course operating liabilities), other than between or among MDC and one or more MDC Subsidiaries, or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice and (B) guarantees incurred in compliance with this Section 6.01(b);

(x)               make or authorize any capital expenditure in excess of $5,000,000 in the aggregate,

(xi)              (A) enter into any Contract that would have been classified as an MDC Material Contract pursuant to Section 4.21(a)(xi) had it been entered into prior to the date of this Agreement or (B) enter into any Contract that would have been classified as an MDC Material Contract pursuant to any other clause of Section 4.21(a) had it been entered into prior to the date of this Agreement other than in the case of this clause (B), (1) in the ordinary course of business consistent with past practice or (2) Contracts with existing or new clients;

(xii)            make any material changes with respect to material accounting policies or procedures, except as required by changes in applicable Law or GAAP;

(xiii)          settle any suit, action, litigation or other proceeding (A) for an amount in excess of $5,000,000 individually or $10,000,000 in the aggregate or (B) in a manner that would impose any material restrictions on its assets, operations or businesses or result in any injunction or equitable relief against MDC or any MDC Subsidiary (or, following the Closing, any Stagwell Subject Entity);

(xiv)          modify or amend in any material respect, grant a material waiver under or terminate any MDC Material Contract other than in the ordinary course of business consistent with past practice;

(xv)            (A) change in any material respect any material method of accounting for Tax purposes; (B) enter into any agreement with any Governmental Entity (including a “closing agreement” under Code Section 7121) with respect to any material Tax or material Tax Returns (other than in the ordinary course of business); (C) surrender a right to a material Tax refund; (D) change an accounting period with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; or (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business);

(xvi)          transfer, sell, lease, license, mortgage, pledge, divest, abandon, allow to lapse, cancel, fail to renew, fail to continue to prosecute, protect or defend or otherwise dispose of any material tangible or intangible assets (including Intellectual Property), licenses, operations, rights, product lines, businesses or interests therein, including the capital stock of any Subsidiary, except in connection with services provided in the ordinary course of business and sales or other dispositions of obsolete or worn-out assets, except for sales, leases, licenses, divestitures, cancellations, abandonments, lapses, expirations or other dispositions of assets with a fair market value not in excess of $5,000,000 in the aggregate and, with respect to licenses of Intellectual Property, except for (A) any Contract for Open Source Software and (B) non-exclusive licenses that are commercially available “off-the-shelf” licenses or granted to or by service providers or to or by customers in which the grant of Intellectual Property is incidental to other performance under such Contracts and entered into in the ordinary course of business consistent with past practice;

(xvii)          except as required to comply with applicable Data Protection Laws, materially modify any privacy policies, notices or statements in a manner that (A) limits the ability or right of MDC or any MDC Subsidiary to share or transfer data in connection with the Transactions, or (B) limits MDC’s or any MDC Subsidiary’s (or following the Closing, any Stagwell Subject Entity’s) use of the data;

(xviii)        (A) except to the extent required by any MDC Benefit Plan as in effect on the date of this Agreement, grant any loan to or materially increase the compensation or benefits of any MDC Participant, other than in the ordinary course of business consistent with past practice, (B) amend, adopt, establish, agree to establish, enter into or terminate any collective bargaining agreement or other labor union contract, (C) take any action to fund or in any other way secure the payment of compensation or benefits under any MDC Benefit Plan, or (D) hire any new employee, except for the hire of employees in the ordinary course of business consistent with past practice (including to fill vacancies) where such hiring does not relate to an employee with an annual base salary in excess of $500,000;

(xix)           change in any material respect any policies or procedures for or timing of the collection of accounts receivable (or any other trade receivables), payment of accounts payable (or any other trade payables), billing of its customers, pricing and payment terms, cash collections, cash payments or terms with suppliers, in each case, other than changes required by suppliers, vendors and service providers or otherwise occurring in the ordinary course of business;

(xx)            amend, terminate or allow to lapse any material licenses; or

(xxi)          agree, authorize or commit to do any of the foregoing.

Section 6.02            Conduct of Business by the Stagwell Subject Entities Pending the Transactions.

(a)                Stagwell covenants and agrees that, from the date hereof until the earlier of the termination of this Agreement in accordance with its terms and the Closing, except (i) as set forth on Section 6.02(a) of the Stagwell Disclosure Letter, (ii) as MDC may consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (iii) as otherwise required by applicable Laws, (iv) in connection with any COVID-19 Measure or (v) as otherwise expressly required or contemplated by this Agreement (including pursuant to the Debt Transactions, the Stagwell Restructuring or the Transactions, including the Redomiciliation, the Pre-Redomiciliation Restructuring, the Maxxcom Restructuring, the MDC Merger, the MDC Conversion, the Midas Corporate HoldCo Formation and the Stagwell Contribution), the businesses of the Stagwell Subject Entities shall be conducted only in the ordinary course of business consistent with past practice, and Stagwell shall, to the extent permitted under the applicable organizational documents, cause each of the Stagwell Subject Entities to use its reasonable best efforts to maintain its assets and preserve intact its business and operations.

(b)                Without limiting the generality of Section 6.01(a), Stagwell covenants and agrees that, from the date hereof until the earlier of the termination of this Agreement in accordance with its terms and the Closing, except (i) as set forth on Section 6.02(b) of the Stagwell Disclosure Letter, (ii) as MDC may consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (iii) as otherwise required by applicable Laws, (iv) in connection with any COVID-19 Measure or (v) as otherwise expressly required or contemplated by this Agreement (including pursuant to the Debt Transactions, the Stagwell Restructuring or the Transactions, including the Redomiciliation, the Pre-Redomiciliation Restructuring, the Maxxcom Restructuring, the MDC Merger, the MDC Conversion, the Midas Corporate HoldCo Formation and the Stagwell Contribution), Stagwell shall, to the extent permitted under the applicable organizational documents, cause the Stagwell Subject Entities not to do any of the following:

(i)              adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;

(ii)             other than with respect to direct or indirect wholly-owned Subsidiaries, merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements providing for the sale, lease, pledge, assignment or other disposition of their respective material assets, operations or business;

(iii)            acquire any corporation, partnership or other business organization or division thereof or collection of assets constituting all or substantially all of a business or business unit, whether by merger or consolidation, purchase of substantial assets or equity interest or any other manner, from any other Person;

(iv)            issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, units, warrants, phantom stock, stock appreciation rights, or any other equity or equity-based compensation or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;

(v)             create or incur any Lien securing indebtedness for borrowed money (other than a Lien currently provided for under the Stagwell Credit Agreement or the Term Loan Credit Agreement, any Permitted Lien and/or the grant of any cash collateral in respect of letters of credit issued in respect of, or otherwise securing, ordinary course operating liabilities) on any assets having a value in excess of $5,000,000 in the aggregate;

(vi)            make any loans, advances, capital contributions to or investments in any Person, other than between or among one or more Stagwell Subject Entities, in each case greater than $5,000,000 or make any guarantees (other than pursuant to the Debt Transactions);

(vii)          declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for declared dividends paid by any direct or indirect wholly-owned Subsidiary of Stagwell to SMGH or any other direct or indirect wholly-owned Subsidiary of SMGH and the declaration and payment of cash dividends by SMGH or any of its Subsidiaries to Stagwell so long as such cash dividends would not cause the Stagwell Net Debt Condition to fail to be satisfied at the Closing) or enter into any Contract with respect to the voting of its capital stock;

(viii)          reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;

(ix)             incur any indebtedness for borrowed money (which, for the avoidance of doubt, shall not include obligations in respect of cash-collateralized letters of credit issued in respect of, or other grants of cash collateral securing, ordinary course operating liabilities), other than between or among one or more Stagwell Subject Entities, or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $5,000,000 in the aggregate, (B) guarantees incurred in compliance with this Section 6.02(b) and (C) incurrence of indebtedness that would not cause the Stagwell Net Debt Condition to fail to be satisfied at the Closing;

(x)             make or authorize any capital expenditure in excess of $5,000,000 in the aggregate,

(xi)            enter into any Contract that would have been a Stagwell Material Contract had it been entered into prior to this Agreement other than (i) in the ordinary course of business consistent with past practice or (ii) Contracts with existing or new clients;

(xii)            make any material changes with respect to material accounting policies or procedures, except as required by changes in applicable Law or GAAP;

(xiii)          settle any suit, action, litigation or other proceeding (A) for an amount in excess of $5,000,000 individually or $10,000,000 in the aggregate or (B) in a manner that would impose any material restrictions on its assets, operations or businesses or result in any injunction or equitable relief against any Stagwell Subject Entity (or, following the Closing, MDC or any MDC Subsidiary);

(xiv)          modify or amend in any material respect, grant a material waiver under or terminate any Stagwell Material Contract other than in the ordinary course of business consistent with past practice;

(xv)            (A) change in any material respect any material method of accounting for Tax purposes; (B) enter into any agreement with any Governmental Entity (including a “closing agreement” under Code Section 7121) with respect to any material Tax or material Tax Returns (other than in the ordinary course of business); (C) surrender a right to a material Tax refund; (D) change an accounting period with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; or (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business);

(xvi)          transfer, sell, lease, license, mortgage, pledge, divest, abandon, allow to lapse, cancel, fail to renew, fail to continue to prosecute, protect or defend or otherwise dispose of any material tangible or intangible assets (including Intellectual Property), licenses, operations, rights, product lines, businesses or interests therein, including the capital stock of any Subsidiary, except in connection with services provided in the ordinary course of business and sales or other dispositions of obsolete or worn-out assets, except for sales, leases, licenses, divestitures, cancellations, abandonments, lapses, expirations or other dispositions of assets with a fair market value not in excess of $5,000,000 in the aggregate and, with respect to licenses of Intellectual Property, except for (A) any Contract for Open Source Software and (B) non-exclusive licenses that are commercially available “off-the-shelf” licenses or granted to or by service providers or to or by customers in which the grant of Intellectual Property is incidental to other performance under such Contracts and entered into in the ordinary course of business consistent with past practice;

(xvii)        except as required to comply with applicable Data Protection Laws, materially modify any privacy policies, notices or statements in a manner that (A) limits the ability or right of the Stagwell Subject Entities to share or transfer data in connection with the Transactions, or (B) limits any Stagwell Subject Entity’s (or, following the Closing, MDC’s or any MDC Subsidiary’s) use of the data;

(xviii)        (A) except to the extent required by any Stagwell Benefit Plan as in effect on the date of this Agreement, grant any loan to or materially increase the compensation or benefits of any Stagwell Participant, other than in the ordinary course of business consistent with past practice, (B) amend, adopt, establish, agree to establish, enter into or terminate any collective bargaining agreement or other labor union contract, (C) take any action to fund or in any other way secure the payment of compensation or benefits under any Stagwell Benefit Plan, or (D) hire any new employee, except for the hire of employees in the ordinary course of business consistent with past practice (including to fill vacancies) where such hiring does not relate to an employee with an annual base salary in excess of $300,000;

(xix)          change in any material respect any policies or procedures for or timing of the collection of accounts receivable (or any other trade receivables), payment of accounts payable (or any other trade payables), billing of its customers, pricing and payment terms, cash collections, cash payments or terms with suppliers, in each case, other than changes required by suppliers, vendors and service providers or otherwise occurring in the ordinary course of business;

(xx)            amend, terminate or allow to lapse any material licenses; or

(xxi)          agree, authorize or commit to do any of the foregoing.

Article 7
ADDITIONAL AGREEMENTS

Section 7.01            Preparation of Combined Proxy Statement/Prospectus; Special Meeting.

(a)                As promptly as reasonably practicable after the date hereof, MDC shall cause to be prepared and, as promptly as reasonably practicable after the delivery by Stagwell to MDC of the Stagwell S-4 Financials in accordance with Section 7.03(d)(i), filed in preliminary form with the SEC the Registration Statement containing the Combined Proxy Statement/Prospectus (such filing, the “Preliminary Registration Statement Filing,” and the date of such filing, the “Preliminary Registration Statement Filing Date”). MDC shall use its reasonable best efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing and to keep the Registration Statement effective as long as necessary to consummate the Transactions and the other transactions contemplated hereby. MDC shall use its reasonable best efforts to obtain any approvals required under any applicable state securities Laws in connection with the issuance of shares of New MDC Common Stock and New MDC Preferred Stock in connection with the Redomiciliation, the MDC Merger and the other Transactions (including shares issuable under any MDC Stock Plans) (provided that in no event shall New MDC be required to qualify to do business in any jurisdiction in which MDC is not now so qualified or file a general consent to service of process).

(b)                Each of Stagwell and MDC shall obtain and furnish the information concerning itself, its Affiliates, directors, officers and (to the extent reasonably available) equityholders and such other matters as may be reasonably necessary or advisable to be included in the Registration Statement. Prior to filing with the SEC, MDC will make available to Stagwell drafts of the Registration Statement and any other documents to be filed with the SEC, both preliminary and final, and drafts of any amendment or supplement to the Registration Statement or such other document and will provide Stagwell with a reasonable opportunity to review and comment on such drafts (and shall consider such comments in good faith). MDC will advise Stagwell as promptly as practicable after it receives notice thereof, of (i) the time when the Registration Statement has been filed, (ii) the completion of the SEC’s review of the Registration Statement or the SEC’s intention not to review the Registration Statement, (iii) the filing of any supplement or amendment to the Registration Statement and (iv) any comments, written or oral, from the SEC or its staff relating to the Registration Statement, including requests for additional information. MDC shall provide Stagwell with copies of all written correspondence and a summary of all material oral communications between it, on the one hand, and the SEC and its staff, on the other hand, relating to the Registration Statement. MDC shall cooperate and provide Stagwell with a reasonable opportunity to review and comment (and shall consider any such comments in good faith) on any substantive correspondence (including responses to SEC comments) with the SEC and its staff.

(c)                Subject in all instances to Section 7.06 and Article 9, as promptly as practicable after the effectiveness of the Registration Statement, and in accordance with the MDC Organizational Documents and applicable Law, MDC shall cause the Combined Proxy Statement/Prospectus to be mailed to MDC’s shareholders, and if necessary or required by applicable Law, after the definitive Combined Proxy Statement/Prospectus has been mailed, promptly circulate amended, supplemented or supplemental proxy materials and, if required in connection therewith, re-solicit proxies or written consents, as applicable. If at any time prior to the receipt of the MDC Special Meeting Approval, the officers and directors of Stagwell or MDC discover any information which, in light of the circumstances under which it is made, is false or misleading with respect to a material fact or omits to state a material fact necessary to make the statements made in the Combined Proxy Statement/Prospectus or Registration Statement not misleading, then such party shall immediately notify the other party of such misstatements or omissions, and an appropriate amendment or supplement describing such information shall promptly be prepared and filed with the SEC and to the extent required by applicable Law. MDC shall promptly transmit to MDC’s shareholders an amendment or supplement to the Registration Statement and/or Combined Proxy Statement/Prospectus containing such information. MDC will also inform Stagwell, promptly after MDC receives written notice thereof, of the time of the issuance of any stop order or the suspension of the qualification of the New MDC Class A Common Stock or the New MDC Class B Common Stock for offering or sale in any jurisdiction, or of the initiation or written threat of any proceeding for any such purpose.

(d)                Subject in all instances to Section 7.06 and Article 9, MDC shall, in accordance with the MDC Organizational Documents and applicable Law, take all actions to establish a record date (which will be as soon as practicable and advisable after the date hereof) for, duly call, give notice of, convene, and hold a special meeting of the MDC’s shareholders (the “Special Meeting”), for the purpose of securing the MDC Special Meeting Approval, and shall not submit any other proposal to MDC’s shareholders in connection with the Special Meeting without the prior written consent of Stagwell, not to be unreasonably withheld, conditioned or delayed. Except as provided in Section 7.06, and unless this Agreement has been validly terminated in accordance with Article 9, MDC shall use its reasonable best efforts to solicit from MDC’s shareholders proxies in favor of the Transactions and to take all other action necessary or advisable to secure the MDC Special Meeting Approval and the MDC Merger Approval. Unless this Agreement has been validly terminated in accordance with Article 9, and subject in all instances to Section 7.06, as promptly as possible following the date upon which the Registration Statement becomes effective, MDC shall convene and hold the Special Meeting (on a date selected by MDC in consultation with Stagwell). Without limiting the generality of the foregoing, but subject in all instances to Section 7.06 and the termination rights set forth in Article 9, MDC’s obligations pursuant to the first three sentences of this Section 7.01(d) shall not be affected by (i) the commencement, public proposal, public disclosure or communication to MDC of any Alternative Proposal or (ii) the withdrawal or modification by the MDC Board (upon the recommendation of the MDC Special Committee) of the MDC Board Recommendation (as defined below) or the MDC Board’s approval of this Agreement or the Transactions. Unless this Agreement has been validly terminated in accordance with Article 9, once the Special Meeting has been called and noticed, (i) MDC shall not postpone or adjourn the Special Meeting without the consent of Stagwell (other than to the extent necessary for the absence of a quorum or to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure which the MDC Special Committee has determined in good faith after consultation with its outside legal counsel is necessary under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by MDC’s shareholders prior to the Special Meeting; provided, that no such postponement or adjournment shall delay the Special Meeting by more than thirty (30) days from the initially scheduled date; and (ii) MDC shall postpone the Special Meeting if Stagwell requests such postponement or adjournment in order to permit the solicit of additional proxies in favor of the Transaction Resolutions, in which case, MDC shall, subject to Section 7.06, use its reasonable best efforts during any such postponement or adjournment to solicit and obtain such proxies in favor of the adoption of the Transaction Resolutions as soon as reasonably practicable. Except to the extent permitted by, and subject to the termination rights set forth in Article 9 and the procedures set forth in Section 7.06(f) and Section 7.06(g), (i) the Combined Proxy Statement/Prospectus shall (x) state that the MDC Board (upon the recommendation of the MDC Special Committee) has unanimously (with Mark Penn, Charlene Barshefsky and Bradley Gross abstaining from voting on, or participating in any deliberations with respect to the Transactions) determined that this Agreement and the Transactions are advisable and in the best interests of MDC and its shareholders (other than the Interested Shareholders) and (y) include the recommendation of the MDC Board (upon the recommendation of the MDC Special Committee) that the shareholders of MDC vote for the Transaction Resolutions (such recommendation described in this clause (y), the “MDC Board Recommendation”) and (ii) neither the MDC Board nor the MDC Special Committee shall withdraw, amend or modify, or publicly propose or resolve to withdraw, amend or modify, in a manner adverse to Stagwell, the MDC Board Recommendation. MDC shall ensure that the Combined Proxy Statement/Prospectus includes the full text of (A) the opinions of the financial advisors referred to in Section 4.03(d) and summary thereof and (B) the Formal Valuation and a summary thereof.

Section 7.02            Stock Exchange Listing. MDC shall use its reasonable best efforts to cause the shares of New MDC Class A Common Stock to be issued in connection with the Redomiciliation, the MDC Merger and the other Transactions (including shares issuable under any MDC Stock Plans and pursuant to the Exchange Agreement) to be approved for listing on NASDAQ at or prior to the MDC Effective Time, subject to official notice of issuance.

Section 7.03            Tax Matters.

(a)                Intended Tax Treatment.

(i)                With respect to the Redomiciliation, this Agreement is intended to constitute a “plan of reorganization” within the meaning of Treasury Regulation Section 1.368-2(g) and the parties hereto adopt it as such.

(ii)               With respect to the New MDC Incorporation, the MDC Merger and the MDC Conversion (taken together, the “Holding Company Formation F Reorganization”), this Agreement is intended to constitute a “plan of reorganization” within the meaning of Treasury Regulation Section 1.368-2(g) and the parties hereby adopt it as such.

(iii)             With respect to the Stagwell Contribution, the contribution of the SMGH Interest by Stagwell to OpCo in exchange for the Stagwell Contribution Consideration is intended to constitute the formation of a new partnership and an exchange described in Section 721 of the Code.

(iv)              For U.S. federal, state and local tax purposes, the Parties intend that: (A) the Redomiciliation be treated as a reorganization within the meaning of Section 368(a)(1)(F) of the Code (the “Redomiciliation Intended Tax Treatment”); (B) the formation of New MDC be disregarded for U.S. federal income tax purposes, and until the New MDC Incorporation, New MDC be treated as a disregarded entity for U.S. federal income tax purposes (the “New MDC Formation Intended Tax Treatment”); (C) Merger Sub be treated as a disregarded entity for U.S. federal income tax purposes (the “Merger Sub Formation Intended Tax Treatment”); (D) the Holding Company Formation F Reorganization be treated as a reorganization within the meaning of Section 368(a)(1)(F) of the Code (the “Holding Company Formation F Reorganization Intended Tax Treatment”); and (E) the Stagwell Contribution be treated as a contribution to a newly formed partnership and an exchange described in Section 721 of the Code (the “Stagwell Contribution Intended Tax Treatment”). Each of the Parties will treat the Redomiciliation, the formation of New MDC and Merger Sub, the Holding Company Formation F Reorganization and the Stagwell Contribution in accordance with the Redomiciliation Intended Tax Treatment, the New MDC Formation Intended Tax Treatment, the Merger Sub Formation Intended Tax Treatment, the Holding Company Formation F Reorganization Intended Tax Treatment or the Stagwell Contribution Intended Tax Treatment (as applicable) for all U.S. federal, state and local tax purposes and will not take an inconsistent position on any Tax Return except as may be required by applicable law after a final determination. The Parties will not take (or fail to take) any action which action (or failure to act) would reasonably be expected to cause the Redomiciliation, the formation of New MDC and Merger Sub, the Holding Company Formation or the Stagwell Contribution to fail to qualify for the Redomiciliation Intended Tax Treatment, the Holding Company Formation F Reorganization Intended Tax Treatment, the New MDC Formation Intended Tax Treatment, the Merger Sub Formation Intended Tax Treatment or the Stagwell Contribution Intended Tax Treatment (as applicable).

(b)                Between the date hereof and the Closing Date, except as set forth on Section 7.03(b) of the Stagwell Disclosure Letter, Stagwell shall prepare, or cause to be prepared, all Tax Returns that (1) solely include one or more Subsidiaries of Stagwell and (2) are not filed or required to be filed with or as part of any other Tax Return of any consolidated, affiliated, combined, unitary or other Tax group that includes Stagwell or any of its Affiliates (other than a group that consists solely of Stagwell and any of its Subsidiaries) for any Tax period which are required to be filed on or before the Closing Date (taking extensions into account) using accounting methods, principles and positions consistent with those used for prior Tax periods, unless a change is required by applicable Law or regulation, and all such Tax Returns shall be timely filed and all related Taxes paid on or before the Closing Date.

(c)                MDC Tax Liabilities.

(i)              The parties hereto acknowledge that, following the MDC Conversion, OpCo shall own all of the assets of MDC, and OpCo shall assume and become liable for all of the liabilities of MDC, including any MDC Pre-Closing Taxes. To the maximum extent permitted under applicable Law, OpCo shall timely pay or cause to be paid (including by causing any applicable Subsidiary of OpCo to pay) to the applicable Tax Authority, any MDC Pre-Closing Tax or New MDC Pre-Closing Tax that is due after the Closing Date as and when required by Law, whether such MDC Pre-Closing Tax or New MDC Pre-Closing Tax may be levied against OpCo, such Subsidiary, MDC or New MDC under applicable Law.

(ii)             In any case where applicable Law does not permit OpCo or one of its Subsidiaries to satisfy any MDC Pre-Closing Tax or New MDC Pre-Closing Tax described in Section 7.03(c)(i) in full, and New MDC is required under applicable Law to satisfy such Tax, upon written request of New MDC, OpCo shall promptly and timely, and in no event later than two (2) Business Days prior to the due date of the relevant Tax, distribute to New MDC such amounts as necessary for New MDC to satisfy such MDC Pre-Closing Tax or New MDC Pre-Closing Tax (as applicable). New MDC shall use any funds distributed to it pursuant to this Section 7.03(c)(ii) for the sole purpose of satisfying such MDC Pre-Closing Tax or New MDC Pre-Closing Tax (as applicable). To the extent the amounts distributed to New MDC pursuant to this Section 7.03(c)(ii) exceed New MDC’s actual liability for such MDC Pre-Closing Tax or New MDC Pre-Closing Tax, or New MDC receives a cash refund of an MDC Pre-Closing Tax or New MDC Pre-Closing Tax with respect to which it has previously received a distribution from OpCo pursuant to this Section 7.03(c)(ii), New MDC agrees to contribute such excess or cash refund (net of any expenses incurred in securing such refund), as applicable, to OpCo for no additional consideration.

(iii)           The parties hereto each covenant and agree to take any action necessary or appropriate to enable OpCo and New MDC (or any of their Subsidiaries) to comply with its respective obligations under this Section 7.03.

(iv)            Stagwell and OpCo will join in filing an election in accordance with Treasury Regulations Section 1.245A-5(e)(3)(i)) to close the Tax year of each Stagwell Subject Entity that is a controlled foreign corporation within the meaning of Section 957 of the Code immediately before the Closing and shall cooperate in the preparation and filing of the statement required pursuant to Treasury Regulations Section 1.245A-5(e)(3)(i)(D). If requested by MDC or New MDC, Stagwell and OpCo will join in filing an election in accordance with Treasury Regulations Section 1.245A-5(e)(3)(i)) to close the Tax year of each MDC Subsidiary identified in the request that is a controlled foreign corporation within the meaning of Section 957 of the Code immediately before the Closing and shall cooperate in the preparation and filing of the statement required pursuant to Treasury Regulations Section 1.245A-5(e)(3)(i)(D). In each case, it is intended that this Agreement will constitute a binding agreement between Stagwell and OpCo as required by Treasury Regulations Section 1.245A-5(e)(3)(i)(C)(2).

(d)                Partnership Audits.

(i)             Stagwell shall promptly notify MDC or, after the Closing, New MDC, following receipt of any notice of any Tax audit, examination, or similar proceeding, and any administrative or judicial proceeding involving any Stagwell Subject Entity with respect to any Pre-Closing Tax Period pursuant to the Partnership Audit Rules (any such proceeding, a “Stagwell Partnership Audit”).

(ii)             With respect to any Stagwell Partnership Audit commenced prior to the Closing, Stagwell shall use commercially reasonable efforts to make or cause to be made a timely election under Section 6226 of the Code (or similar provisions of state, local or non-U.S. Law) at Stagwell’s sole cost and expense, and, if such election has not been made by the Closing Date with respect to such a Stagwell Partnership Audit or if any Stagwell Partnership Audit is commenced after the Closing, the Parties hereby agree to use commercially reasonable efforts to make or cause to be made (including by taking such actions as necessary to cause OpCo or any of its Subsidiaries after the Closing to make) such election on a timely basis.

Section 7.04            Stagwell S-4 Financials.

(b)                As promptly as reasonably practicable following the date hereof, Stagwell shall use its reasonable best efforts to deliver to MDC the audited financial statements of the Stagwell Subject Entities required under the Securities Act to be included in the Registration Statement contained in the Combined Proxy Statement/Prospectus, which financial statements shall include audited financial statements of the Stagwell Subject Entities for the year ended December 31, 2019, including a balance sheets, statement of income and statement of cash flow, prepared in accordance with GAAP, together with all related notes and schedules thereto, accompanied by an audit report of Stagwell’s independent auditor (collectively, the “Stagwell PCAOB Audited Financials”); and (b) the unaudited financial statements of the Stagwell Subject Entities required under the Securities Act to be included in the Registration Statement, which financial statements shall include (i) unaudited financial statements of the Stagwell Subject Entities for the years ended December 31, 2018 and December 21, 2017, including in each case balance sheets, statements of income and statements of cash flows, prepared in accordance with GAAP, together with all related notes and schedules thereto, and (ii) unaudited financial statements of the Stagwell Subject Entities for the nine months ended September 30, 2020, including a balance sheet, statement of income and statement of cash flows (but excluding related notes and schedules thereto (the unaudited financial statements in clauses (i) and (ii), together with the Stagwell PCAOB Audited Financials, the “Stagwell S-4 Financials”).

(c)                As soon as available but in any event within seventy-five (75) days after December 31, 2020 (provided, that if after reasonable best efforts the audited consolidated balance sheet of the Stagwell Subject Entities as of December 31, 2020 and the related audited statements of income, cash flows and stockholders’ equity for the year ended December 31, 2020 cannot be completed in such period, the foregoing period shall be extended by an additional fifteen (15) days), Stagwell shall deliver, or cause to be delivered, to MDC an audited consolidated balance sheet of the Stagwell Subject Entities as of December 31, 2020 and the related audited statements of income, cash flows and stockholders’ equity for the year ended December 31, 2020, including the notes thereto, in each case, audited by Stagwell’s independent auditor.

(d)                As soon as available but in any event within forty-five (45) days after the end of each fiscal quarter beginning on or after January 1, 2021 and ending prior to the Closing, Stagwell shall deliver, or cause to be delivered, to MDC an unaudited consolidated balance sheet of the Stagwell Subject Entities and the related unaudited statements of income, cash flows and stockholders’ equity for the period from the beginning of the fiscal quarter to the end of such fiscal quarter, and all such statements shall be prepared in accordance with GAAP (except for the absence of footnotes and subject to changes resulting from year-end audit adjustments).

Section 7.05                Access; Confidentiality.

(a)                From the date hereof until the Closing and subject to the requirements of applicable Laws, MDC shall (i) give to Stagwell and its Representatives reasonable access during normal business hours to the offices, properties, personnel, books, records, work papers and other documents and information relating to MDC and the MDC Subsidiaries, (ii) furnish to Stagwell and its Representatives such financial and operating data and other information as Stagwell may reasonably request, and (iii) instruct its and its Subsidiaries’ Representatives to cooperate reasonably with Stagwell in its investigation of MDC and the MDC Subsidiaries. Nothing in this Section 7.05(a) shall require MDC or any of the MDC Subsidiaries to disclose any information that would cause a risk of a loss of privilege to MDC or any of its Subsidiaries. Notwithstanding this Section 7.05(a), no party nor its Representatives shall have the right to conduct environmental sampling on any of the properties owned or operated by the other party or its Subsidiaries. Any investigation pursuant to this Section 7.05(a) shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of MDC or the MDC Subsidiaries.

(b)                From the date hereof until the Closing and subject to the requirements of applicable Laws, Stagwell shall (i) give to MDC and its Representatives reasonable access during normal business hours to the offices, properties, personnel, books, records, work papers and other documents and information relating to the Stagwell Subject Entities, (ii) furnish to MDC and its Representatives such financial and operating data and other information as MDC may reasonably request, and (iii) instruct its and its Subsidiaries’ Representatives to cooperate reasonably with MDC in its investigation of the Stagwell Subject Entities. Nothing in this Section 7.05(b) shall require Stagwell or any of the Stagwell Subject Entities to disclose any information that would cause a risk of a loss of privilege to Stagwell or any of the Stagwell Subject Entities. Notwithstanding this Section 7.05(b), no party nor its Representatives shall have the right to conduct environmental sampling on any of the properties owned or operated by the other party or its Subsidiaries. Any investigation pursuant to this Section 7.05(b) shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of Stagwell or the Stagwell Subject Entities.

(c)                Each of Stagwell and MDC acknowledges that the information provided to it and its Representatives in connection with this Agreement and the Transactions is subject to the terms of the Mutual Nondisclosure Agreement between Stagwell and MDC, dated as of July 21, 2020 (as amended or modified from time to time, the “Mutual NDA”). The terms of the Mutual NDA are hereby incorporated by reference. The Mutual NDA shall terminate at the Closing.

Section 7.06                No Solicitation; Other Offers.

(a)                From and after the date of this Agreement, MDC shall, and shall cause its Subsidiaries and its and their respective directors, officers, members, employees, representatives, agents, attorneys, consultants, contractors, accountants, financial advisors and other advisors (each, a “Representative”), to (i) immediately cease and terminate, and cause to be ceased and terminated, all discussions and negotiations with any other Person (other than Stagwell or its Affiliates) regarding any Alternative Proposal (as defined below) or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Alternative Proposal, (ii) terminate access by any other Person (other than Stagwell or its Affiliates) to any physical or electronic data room or other access to data or information of MDC, in each case relating to, or in connection with, any Alternative Proposal or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Alternative Proposal, (iii) promptly request that each Person that has received confidential information in connection with any Alternative Proposal or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Alternative Proposal return to MDC or destroy all confidential information heretofore furnished to such Person by or on behalf of MDC and its Subsidiaries and (iv) enforce, and not waive or modify or release or permit the release of any Person from, any confidentiality, non-solicitation, no-hire, standstill or similar agreement entered into or amended in respect of any Alternative Proposal or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Alternative Proposal unless the MDC Special Committee or the MDC Board concludes in good faith, after consultation with its outside legal counsel, that a failure to take any action described in this clause (iv) would be inconsistent with its fiduciary duties under applicable Law. It is agreed that any violation of the restrictions set forth in this Section 7.06(a) by any Representative of MDC or its Subsidiaries shall constitute a breach of this Section 7.06 by MDC.

(b)                From and after the date of this Agreement, except as expressly permitted by Section 7.06(c), MDC shall not, and shall cause its Subsidiaries and its and their respective Representatives not to, directly or indirectly, (i) solicit, initiate, assist or knowingly encourage or facilitate (including by way of furnishing confidential information), or engage in discussions or negotiations regarding, any inquiry, expression or interest, request for information, proposal or offer which constitutes or would be reasonably expected to lead to an Alternative Proposal, or the making or consummation thereof, (ii) enter into any letter of intent, memorandum of understanding, agreement in principle or similar Contract with any Person (other than Stagwell or its Affiliates) for, constituting or otherwise relating to an Alternative Proposal or that would reasonably be expected to lead to or result in an Alternative Proposal, (iii) approve, endorse or recommend any Alternative Proposal or (iv) resolve or agree to do any of the foregoing. It is agreed that any material violation of the restrictions set forth in this Section 7.06(b) by any Representative (other than Mark Penn or any other Person acting at his express direction, in each instance, directly or indirectly) of MDC or its Subsidiaries shall constitute a breach of this Section 7.06 by MDC.

(c)                Notwithstanding anything to the contrary contained in Section 7.06(a) and Section 7.06(b), MDC and its Representatives shall be entitled, prior to obtaining the MDC Special Meeting Approval, to furnish information regarding MDC or any of its Subsidiaries to, or engage in discussions or negotiations with, any Person in response to an unsolicited, bona fide, written proposal with respect to an Alternative Proposal that is submitted to MDC or its Representatives by or on behalf of such Person (for so long as such Alternative Proposal has not been withdrawn) if (i) none of MDC, its Subsidiaries or its or their respective Representatives shall have materially breached the provisions set forth in this Section 7.06 with respect to such Person, (ii) the MDC Special Committee or the MDC Board shall have determined, in its good faith judgment, after consultation with its financial advisor and outside legal counsel, that the proposal constitutes or is reasonably likely to lead to a Superior Proposal, and (ii) the MDC Special Committee or the MDC Board shall have determined, in its good faith judgment, after consultation with outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable Law; provided, that MDC may not enter into negotiations or discussions or furnish any information in connection with any such Alternative Proposal to any such Person without entering into a confidentiality agreement with such Person, which confidentiality agreement shall contain terms no less favorable to MDC than those contained in the Mutual NDA and an executed copy of which shall be provided promptly (and in any event within twenty-four (24) hours) to Stagwell. Stagwell shall be entitled to receive notification of the identity of such Person promptly (and in any event prior to MDC’s furnishing information to the Person making such Alternative Proposal or its Representatives). MDC shall provide or make available to Stagwell any non-public information concerning MDC or any of its Subsidiaries (to the extent not previously provided or made available to Stagwell) concurrently with it being made available to the Person making such Alternative Proposal or its Representatives.

(d)                MDC agrees that it shall notify Stagwell promptly (and in any event within twenty-four (24) hours of receipt) if any inquiry, expression of interest, request for non-public information, proposal or offer related to an Alternative Proposal, or that would be reasonably expected to lead to an Alternative Proposal, is received by, or any such discussions or negotiations are sought to be initiated or continued with, MDC, its Subsidiaries or any of its or their respective Representatives. Such notice shall be provided in writing and shall provide a reasonably detailed summary of the material terms and conditions of any such inquiry, expression of interest, request for non-public information, proposal or offer (including the identity of the Person making such inquiry, expression of interest, request for non-public information, proposal or offer, together with copies of any related documentation). Thereafter, MDC shall keep Stagwell reasonably informed, on a reasonably current basis, of all material developments regarding the status of, and material changes to the terms and conditions of, any such inquiry, expression of interest, request for non-public information, proposal or offer and any such discussions of negotiations. Nothing contained in this Agreement shall prevent the MDC Board or the MDC Special Committee from making or causing MDC to make a customary “stop, look and listen” communication after the commencement of an Alternative Proposal pursuant to Rule 14e-2 under the Exchange Act or Rule 14d-9(f) under the Exchange Act, in each instance, without such action being considered a Change in Recommendation.

(e)                Except as permitted by Section 7.06(f) or Section 7.06(g), neither the MDC Board nor the MDC Special Committee shall (i) (A) withdraw (or qualify or modify in any manner adverse to Stagwell), or publicly propose to withdraw (or qualify or modify in any manner adverse to Stagwell), the MDC Board Recommendation or the MDC Special Committee Recommendation, (B) recommend, adopt, or approve, or propose publicly to recommend, adopt, or approve any Alternative Proposal, (C) fail to include the MDC Board Recommendation or the MDC Special Committee Recommendation in the Combined Proxy Statement/Prospectus or (D) resolve, publicly propose or agree to do any of the foregoing (any action described in this clause (i) being referred to as a “Change in Recommendation”) or (ii) (A) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, or allow MDC or any of its Subsidiaries to execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, or other similar Contract constituting or related to, an Alternative Proposal or that would require MDC to abandon, terminate or fail to consummate the Transactions (other than a confidentiality agreement referred to in Section 7.06(c)) (an “Acquisition Agreement”) or (B) resolve, agree or propose to do any of the foregoing.

(f)                 Notwithstanding anything in this Agreement to the contrary, if, prior to obtaining the MDC Special Meeting Approval, the MDC Special Committee or the MDC Board determines in good faith (after consultation with its outside legal counsel and financial advisors) that (x) the failure to do so would be inconsistent with its fiduciary duties under applicable Law, and (y) an Alternative Proposal constitutes a Superior Proposal, then the MDC Special Committee or the MDC Board, as applicable, may (i) terminate this Agreement pursuant to Section 9.03(b) and cause MDC to enter into an Acquisition Agreement with respect to such Superior Proposal or (ii) make a Change in Recommendation with respect to such Superior Proposal, but in the case of the foregoing clauses (i) and (ii), (A) only if such Superior Proposal has not resulted, directly or indirectly, from a material breach of its or MDC’s obligations pursuant to this Section 7.06, and (B) only if (1) MDC provides at least five (5) Business Days’ written notice to Stagwell (a “Notice of Change in Recommendation”) advising Stagwell that the MDC Special Committee or the MDC Board intends to take such action, specifying (x) a summary of the material terms and conditions of such Superior Proposal, (y) the identity of the Person making such Superior Proposal and providing copies of all relevant documents relating to such Superior Proposal that MDC has received from such Person or its Representatives, including a copy of the most current proposed Acquisition Agreement (if any) (it being understood and agreed that any amendment to the financial terms or other material terms of such Superior Proposal shall require a new Notice of Change in Recommendation and restart the notice period and require compliance with the requirements of this Section 7.06(f)); (2) during a period of five (5) Business Days following Stagwell’s receipt of a Notice of Change in Recommendation (or, in the event of a new Notice of Change in Recommendation as a result of any such amendment, an extension of three (3) additional Business Days), if requested by Stagwell, MDC and its Representatives shall have negotiated with Stagwell and its Representatives in good faith to make such revisions or adjustments proposed by Stagwell to the terms and conditions of this Agreement as would enable the MDC Board or the MDC Special Committee to proceed with its recommendation of this Agreement and the Transactions and not to make such Change in Recommendation; and (3) if applicable, at the end of such applicable 5- or 3-Business Day period, the MDC Board or MDC Special Committee, after considering in good faith any such revisions or adjustments to the terms and conditions of this Agreement that Stagwell, prior to the expiration of such applicable period, shall have offered in writing, continues to determine in good faith (after consultation with its outside legal counsel and financial advisors) that (x) the failure to do so would be inconsistent with its fiduciary duties under applicable Law, and (y) any such Alternative Proposal continues to constitute a Superior Proposal.

(g)                Other than in connection with an Alternative Proposal, the MDC Special Committee or the MDC Board may, at any time prior to, but not after, obtaining the MDC Special Meeting Approval, make a Change in Recommendation in response to an Intervening Event (an “Intervening Event Change in Recommendation”), if the MDC Special Committee or the MDC Board, as applicable, determines in good faith (after consultation with its outside legal counsel and financial advisors) that the failure to do so would be inconsistent with its fiduciary duties under applicable Law; provided, that: (A) Stagwell shall have received written notice from MDC of the MDC Special Committee’s or the MDC Board’s intention to make an Intervening Event Change in Recommendation at least five (5) Business Days prior to the taking of such action by the MDC Special Committee or the MDC Board, which notice shall specify the facts and circumstances of the applicable Intervening Event in reasonable detail, (B) during such period and prior to making an Intervening Event Change in Recommendation, if requested by Stagwell, MDC and its Representatives shall have negotiated in good faith with Stagwell and its Representatives regarding any revisions or adjustments proposed by Stagwell to the terms and conditions of this Agreement as would enable the MDC Special Committee or the MDC Board, as applicable, to proceed with its recommendation of this Agreement and the Transactions and not make such Intervening Event Change in Recommendation and (C) the MDC Special Committee or the MDC Board may make an Intervening Event Change in Recommendation only if the MDC Special Committee or the MDC Board, as applicable, after considering in good faith any revisions or adjustments to the terms and conditions of this Agreement that Stagwell shall have, prior to the expiration of the 5-Business Day period, offered in writing, continues to determine in good faith (after consultation with its outside legal counsel and financial advisors) that failure to make an Intervening Event Change in Recommendation would be inconsistent with its fiduciary duties under applicable Law.

(h)                As used in this Agreement:

(i)                 “Alternative Proposal” shall mean any bona fide proposal or offer from any Person or group of Persons (within the meaning of Section 13(d) of the Exchange Act, but expressly excluding Stagwell or any of its Affiliates or any group of which Stagwell is a member) providing for, in a single transaction or series of related transactions (A) a merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or any similar transaction or series of transactions involving MDC pursuant to which any such Person or group of Persons would own or control, directly or indirectly, twenty percent (20%) or more of the voting power of MDC immediately following such transaction, or (B) a direct or indirect purchase or acquisition of twenty percent (20%) or more of the assets or businesses of MDC and its Subsidiaries (including any Subsidiary of MDC whose business constitutes twenty percent (20%) or more of the net revenues, net income or assets of MDC and its Subsidiaries, taken as a whole).

(ii)               “Superior Proposal” shall mean any Alternative Proposal (provided, that for purposes of this definition, references to “twenty percent (20%)” in the definition of “Alternative Proposal” shall be deemed to be references to “(fifty percent (50%)”) which (A) the MDC Special Committee or the MDC Board determines in its good faith judgment, after consultation with its outside legal counsel and financial advisors, would, if consummated, result in a transaction more favorable to MDC’s shareholders than the Transactions (including any bona fide written offer or proposal made by Stagwell in response to such Alternative Proposal or otherwise, in accordance with the time periods set forth in this Section 7.06), taking into account all the terms and conditions of such Alternative Proposal and this Agreement (including any conditions to and expected timing of consummation thereof, and all legal, financial and regulatory aspects of such Alternative Proposal and this Agreement), (B) is not subject to any financing or due diligence conditionality and (C) is reasonably capable of being completed on the terms proposed.

(iii)             “Intervening Event” shall mean any material Effect or combination of Effects arising after the date of this Agreement that (A) was not known to or reasonably foreseeable by the MDC Special Committee or MDC Board as of the date of this Agreement, (B) did not result from or arise out of the announcement or pendency of, or any action required to be taken (or to be refrained from being taken) pursuant to this Agreement (including pursuant to Section 7.07) and (C) does not relate to (1) any Alternative Proposal or Superior Proposal, (2) any fluctuation in the market price or trading volume of the MDC Class A Shares, or (3) MDC or the Stagwell Subject Entities meeting, failing to meet or exceeding projections; provided, however, that the occurrence of any such Effect or combination of such Effects contemplated by the immediately preceding clause (C) shall not prevent or otherwise affect a determination that an Intervening Event has occurred.

Section 7.07               Reasonable Best Efforts; Filings, etc. Subject to the terms and conditions set forth in this Agreement, including the limitations set forth in Section 7.07(c), each of the parties hereto shall (and shall cause its Subsidiaries to) use its reasonable best efforts (subject to, and in accordance with, applicable Law) to take promptly, or to cause to be taken, all actions, and to do promptly, or to cause to be done, and to assist and to cooperate with the other parties in doing, all things necessary, proper or advisable under applicable Laws (including Regulatory Laws) to consummate and make effective the Transactions, including (i) the obtaining of all necessary actions or nonactions, waivers, authorizations, expirations or terminations of waiting periods, advance rulings, no-action letters, clearances, consents and approvals from Governmental Entities and the making of all necessary registrations and filings and the taking of all steps as may be necessary, including undertaking to Her Majesty the Queen in right of Canada to carry out specific agreed upon reasonable undertakings as a condition of the allowance of the Proposed Transaction by the Minister of Canadian Heritage under the Investment Canada Act, to obtain an approval, allowance or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary consents, approvals or waivers from third parties (provided that, for the avoidance of doubt, any failure to obtain a consent, approval or waiver from a third party shall not constitute a failure of any of the conditions set forth in Section 8.02(b) or Section 8.03(b) to be satisfied on the Closing Date), (iii) the defending of any Proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions and (iv) the execution and delivery of any additional instruments reasonably necessary to consummate the Transactions. In addition, no party hereto shall knowingly take any action after the date hereof that would reasonably be expected to delay, hinder or otherwise obstruct the consummation of the Closing, including any action that delays the obtaining of, or results in not obtaining, any permission, approval or consent from any Governmental Entity or other Person required to be obtained prior to the Closing.

(a)                Subject to Section 7.07(b) and the other terms and conditions herein provided and without limiting the foregoing, Stagwell and MDC shall (and shall cause their respective Subsidiaries to):

(i)                 make their respective required filings (and filings considered by the parties to be advisable after consulting with, and considering in good faith the views of, each other) under the HSR Act, the Investment Canada Act and any other applicable Regulatory Laws (and the parties shall bear equal responsibility for all filing fees incident thereto), which filings shall be made as promptly as practicable (and, in the case of the HSR Act, not later than ten (10) Business Days after the date hereof), and thereafter shall make any other required submissions under the HSR Act, the Investment Canada Act or other such Laws as promptly as possible; without limiting the generality of the foregoing, each party shall use its reasonable best efforts to respond to and comply as promptly as practicable with any request for information regarding the Transactions from any Governmental Entity charged with enforcing, applying, administering, or investigating any Regulatory Law;

(ii)               use their reasonable best efforts to cooperate with one another in (A) determining which filings are required to be made prior to the Closing with, and which consents, approvals, advance rulings, no-action letters, permits or authorizations are required to be obtained prior to the Closing from, Governmental Entities in connection with the execution and delivery of this Agreement, and the consummation of the Transactions and (B) timely making all such filings;

(iii)             promptly notify each other of any communication concerning this Agreement or the Transactions to that party from any Governmental Entity, it being understood that correspondence, filings and communications received from any Governmental Entity shall be immediately provided to the other party upon receipt, subject in appropriate cases to appropriate confidentiality agreements to limit disclosure to outside lawyers and consultants;

(iv)              not participate or agree to participate in any meeting or substantive discussion (including any discussion relating to the antitrust merits, any potential remedies, commitments or undertakings, the timing of any waivers, consents, approvals, permits, orders or authorizations, and any agreement regarding the timing of consummation of the Transactions) with any Governmental Entity relating to any filings or investigation concerning this Agreement or the Transactions unless it consults with the other party and its Representatives in advance and invites the other party’s Representatives to attend, subject in appropriate cases to appropriate confidentiality agreements to limit disclosure to outside lawyers and consultants, unless the Governmental Entity prohibits such attendance;

(v)                promptly furnish the other party, subject in appropriate cases to appropriate confidentiality agreements to limit disclosure to outside lawyers and consultants, with draft copies prior to submission to a Governmental Entity, with reasonable time and opportunity to comment and consult, of all correspondence and communications (and memoranda setting forth the substance thereof) that they, their Affiliates or their respective Representatives intend to submit to any Governmental Entity; and

(vi)              promptly furnish the other party, subject in appropriate cases to appropriate confidentiality agreements to limit disclosure to outside lawyers and consultants, with such necessary information and reasonable assistance as such other party and its Affiliates may reasonably request in connection with their preparation of necessary filings, registrations or submissions of information to any Governmental Entity, including, without limitation, any filings necessary or appropriate under the provisions of Regulatory Laws.

(b)                MDC shall not make any offer, acceptance or counter-offer to or otherwise engage in negotiations or discussions with any Governmental Entity with respect to any proposed timing extension, settlement, consent decree, commitment or remedy, or, in the event of litigation, discovery, admissibility of evidence, timing or scheduling, except as specifically requested by or agreed with Stagwell. Each party hereto shall use its reasonable best efforts to provide the other parties hereto full and effective support in all material respects in all such investigations, litigation, negotiations and discussions to the extent requested.

(c)                Notwithstanding anything to the contrary contained in this Agreement, (i) neither Stagwell nor MDC shall, nor shall it permit any of its Subsidiaries to, without the prior written consent of the other party, divest or hold separate or otherwise take or commit to take any action that limits its freedom with respect to, or its ability to retain, any of the respective businesses, product lines or assets of the Stagwell Subject Entities, on the one hand, or MDC and its Subsidiaries, on the other hand, as applicable, (ii) neither Stagwell nor MDC, nor any of their respective Affiliates, shall be required to divest or hold separate (or agree to divest or hold separate), or otherwise take or commit to take any action that limits its freedom with respect to, or its ability to retain, any of the respective businesses, product lines or assets of the Stagwell Subject Entities, on the one hand, or MDC and its Subsidiaries, on the other hand, as applicable, and (iii) neither Stagwell nor MDC, nor any of their respective Affiliates, shall be required to commence and/or defend any suit, action or other proceeding before any court or other applicable Governmental Entity to resolve any objections arising under Regulatory Laws that a Governmental Entity may have to the Transactions.

(d)                For purposes of this Agreement, “Regulatory Laws” means the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, the Investment Canada Act, and all other federal, state or foreign statutes, treaties, rules, regulations, orders, decrees, administrative and judicial doctrines and other applicable Laws, including any antitrust, competition or trade regulation laws, that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening competition through merger or acquisition or any Laws with respect to foreign investment.

Section 7.08               Shareholder Litigation.

(a)                MDC shall promptly (and in any event within twenty-four (24) hours) notify Stagwell in writing of, and shall give Stagwell the opportunity to participate fully and actively in, but not control, the defense or settlement of any claim or litigation against or otherwise involving MDC and/or any of its directors or officers relating to this Agreement or the Transactions; provided, however, that no compromise or full or partial settlement of any such claim or litigation shall be agreed to by MDC without Stagwell’s consent (not to be unreasonably withheld, conditioned or delayed).

(b)                Stagwell shall promptly (and in any event within twenty-four (24) hours) notify MDC in writing of, and shall give MDC the opportunity to participate fully and actively in, but not control, the defense or settlement of any claim or litigation against or otherwise involving Stagwell and/or any of its directors or officers relating to this Agreement or the Transactions; provided, however, that no compromise or full or partial settlement of any such claim or litigation shall be agreed to by Stagwell without MDC’s consent (not to be unreasonably withheld, conditioned or delayed) to the extent it would reduce or be binding on the assets or operations of the Stagwell Subject Entities following the Closing.

Section 7.09              Public Statements. Except for any public disclosure made by MDC or Stagwell in connection with any of the actions or events contemplated by Section 7.06, Stagwell and MDC shall consult with each other prior to issuing, and provide each other with the reasonable opportunity to review and comment upon, any public announcement, statement or other disclosure with respect to this Agreement or the Transactions and shall not issue any such public announcement or statement prior to such consultation, except as may be required by Law or any listing agreement with a national securities exchange or trading market (and then, to the extent permitted, only after consulting with the other party prior to making any such required disclosure); provided, that each of Stagwell and MDC may make any public statements in response to questions by the press, analysts, investors or those attending industry conferences or analyst or investor conference calls, so long as such statements are consistent with (and not materially expansive of) previous public announcements, statements or other disclosure made jointly by Stagwell and MDC. The parties agree that the initial press release to be issued with respect to the Transactions shall be in the form heretofore agreed by the parties.

Section 7.10               Notification of Certain Matters. Each of Stagwell and MDC shall promptly notify the other party in writing of (i) any notice or other communication received by such party or any of its Subsidiaries, or to the knowledge of such party, any of their respective Representatives, from any Person alleging that the consent, approval, permission of or waiver from such party is or may be required in connection with the Transactions; (ii) knowledge of the commencement or threat of commencement of any action, suit, litigation or other legal proceeding by or before any Governmental Entity with respect to the Transactions (and shall keep the other party informed as to the status of any such action, suit, litigation or other legal proceeding or threat) (iii) any notice or other communication received by such party or any of its Subsidiaries, or any of their respective Representatives, from any Governmental Entity in connection with the Transactions; and (iv) any fact, event or circumstance known to it that would be reasonably likely to result in the failure of any of the Closing Conditions to be capable of being satisfied prior to the Termination Date; provided, that the failure to deliver any notice pursuant to this Section 7.10 shall not be considered in determining whether the Closing Conditions have been satisfied.

Section 7.11               Director and Officer Indemnification and Insurance.

(a)                All rights to indemnification existing in favor of the current or former directors, officers and employees of MDC and its Subsidiaries (the “Indemnified Persons”) as provided in the MDC Organizational Documents or under indemnification agreements between Indemnified Persons and MDC and its Subsidiaries, in each case as in effect as of the date of this Agreement with respect to matters occurring prior to the Closing (the “Indemnification Obligations”) shall survive the Transactions and shall continue in full force and effect as obligations of New MDC for a period of not less than six (6) years after the Closing unless otherwise required by applicable Law.

(b)                Following the Closing, New MDC shall maintain director and officer liability insurance policies providing comparable coverage to New MDC’s existing directors’ and officers’ liability insurance and fiduciary liability insurance through and including the date six (6) years after the Closing with respect to claims arising from facts or events that existed or occurred prior to or at the Closing (including in connection with this Agreement or the transactions or actions contemplated hereby); provided, that in no event shall New MDC be required to expend an amount pursuant to this Section 7.11(b) in excess of three hundred percent (300%) of the current annual premium paid by MDC for its existing coverage in the aggregate and if such comparable coverage cannot be obtained by paying an aggregate premium equal to or below three hundred percent (300%) of the current annual premium, New MDC shall only be required to maintain as much coverage as can be maintained by paying an aggregate premium equal to three hundred percent (300%) of such amount.

(c)                This Section 7.11 shall survive the consummation of the Transactions and is intended to benefit, and shall be enforceable by each Indemnified Person (notwithstanding that such Persons are not parties to this Agreement) and their respective heirs and legal representatives. The indemnification provided for herein shall not be deemed exclusive of any other rights to which an Indemnified Person is entitled, whether pursuant to Law, Contract or otherwise. If MDC or any of its successors or assigns (i) subsequently consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity resulting from such consolidation or merger or (ii) subsequently transfers all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of MDC, as the case may be, shall assume the applicable obligations set forth in this Section 7.11.

Section 7.12                Integration Planning. After the date hereof and prior to the Closing Date, Stagwell and MDC shall establish procedures, subject to applicable Law, reasonably acceptable to both parties by which the parties will confer on a regular and continued basis regarding the general status of the ongoing operations of the Stagwell Subject Entities and MDC, respectively, and reasonably necessary integration planning matters and communicate and consult with specific persons to be identified by each party to the other with respect to the foregoing.

Section 7.13              Stagwell Restructuring. Prior to the Closing, Stagwell shall use its reasonable best efforts to effect certain restructuring transactions described in Schedule VIII, pursuant to which Stagwell would (a) acquire the outstanding equity interests of the non-wholly owned Stagwell Subject Entities set forth therein and (b) cancel, extinguish or otherwise terminate the Stagwell Incentive Awards set forth therein (such transactions, collectively, the “Stagwell Restructuring”). Stagwell shall keep MDC reasonably involved in any process and communications relating to the Stagwell Restructuring and shall consider in good faith any comments of MDC regarding the proposed terms of the Stagwell Restructuring.

Section 7.14               Special Distribution. Stagwell covenants and agrees that, pursuant to the Stagwell Contribution, the Stagwell Subject Entities shall be contributed with no greater than $260 million in the aggregate of Net Debt (such amount, the “Stagwell Net Debt Cap,” and such requirement, the “Stagwell Net Debt Condition”). To the extent that the Stagwell Subject Entities hold an aggregate amount of Net Debt less than the Stagwell Net Debt Cap (the difference between the Stagwell Net Debt Cap and such amount, the “Stagwell Net Debt Surplus”) at such time, Stagwell shall be permitted to cause Stagwell Marketing Group to make a one-time draw under the Stagwell Credit Agreement in an amount no greater than the Stagwell Net Debt Surplus, which amount Stagwell may cause to be paid as a distribution to Stagwell prior to the Stagwell Contribution (such distribution, the “Special Distribution”). At least three (3) Business Days prior to the Closing, Stagwell shall provide MDC with a good-faith calculation of its Net Debt (the “Net Debt Calculation”), together with reasonably detailed supporting documentation as well as an accounting of any payments or distributions to be made pursuant to this Section 7.14. For the avoidance of doubt, the parties hereto shall not be obligated to consummate the Transactions until Stagwell has reasonably demonstrated that the Stagwell Net Debt Condition will be satisfied at the Closing. MDC shall be entitled to comment on and request reasonable changes to the Net Debt Calculation, and Stagwell shall consider in good faith any changes MDC proposes to the Net Debt Calculation.

Section 7.15                 Post-Closing New MDC Board and Committee Representation.

(a)                 Prior to the consummation of the MDC Merger, MDC shall cause all directors, other than the three MDC directors to be identified by the MDC Special Committee following the date hereof but prior to the Closing (such persons, the “Continuing Independent Directors”), Bradley Gross and Mark Penn, to resign and shall take all requisite action such that the four (4) directors identified by Stagwell no later than five (5) Business Days following the effectiveness of the Registration Statement be appointed to the board of directors of New MDC (the “New MDC Board”) (effective as of Closing), to serve until their respective successors are duly elected and qualified or until each such director’s earlier death, resignation or removal.

(b)                Subject to the fiduciary duties of the New MDC Board, New MDC shall cause the Continuing Independent Directors to be nominated as part of New MDC’s proposed slate of directors at the next two annual meetings of New MDC stockholders following the Closing (the “Post-Closing Governance Period”). From and after the Post-Closing Governance Period, for so long as (x) Stagwell Beneficially Owns more than 10% of the then-issued and outstanding voting securities of New MDC, (y) Stagwell has nominated directors constituting a majority of the New MDC Board, or (z) Stagwell has the contractual right to appoint a majority of the New MDC Board, New MDC shall have at least three (3) independent directors (to the extent required under applicable SEC and NASDAQ rules).

(c)                 Subject to the fiduciary duties of the New MDC Board, New MDC shall cause the Continuing Independent Directors to constitute all of the members of New MDC’s Audit Committee and Compensation Committee for the Post-Closing Governance Period; provided, that if any Continuing Independent Director’s service as a director ceases during the Post-Closing Governance Period as a result of such director’s death, retirement or resignation, any vacancy on such committees may be filled by any other New MDC director then-serving on the New MDC Board selected by the other Continuing Independent Director(s) who are qualified to serve on such committees under applicable SEC and NASDAQ rules. All other committee representation will be determined by the post-Closing New MDC Board.

Section 7.16                Other Post-Closing Governance Matters. The parties hereby agree that, for so long as (x) Stagwell Beneficially Owns more than 10% of the then-issued and outstanding voting securities of New MDC, (y) Stagwell has nominated directors constituting a majority of the New MDC Board, or (z) Stagwell has the contractual right to appoint a majority of the New MDC Board:

(a)                 any related-party transaction by and between New MDC or any of the MDC Subsidiaries, on the one hand, and Stagwell or its Affiliates (other than New MDC and the MDC Subsidiaries), on the other hand, will require the approval of a majority of the independent directors then-serving on the New MDC Board; provided, that, for the avoidance of doubt, any amendment or modification of (i) solely to the extent they relate to any right, power or preference unique to Stagwell or its Affiliates (other than New MDC and the MDC Subsidiaries), the New MDC Certificate of Incorporation or the New MDC Bylaws; (ii) any Ancillary Agreement; or (iii) this Agreement, including Section 7.15 and this Section 7.16, shall each be considered such a related-party transaction; and

(b)                any proposed business combination following the Closing by and between New MDC, on the one hand, and Stagwell or any of its Affiliates (other than New MDC and any of the MDC Subsidiaries), on the other hand, shall require (i) approval from a “majority of the minority” of New MDC stockholders, and (ii) the creation of a special committee of the post-Closing New MDC Board comprised solely of independent and disinterested directors with authority similar to that of the MDC Special Committee. For the avoidance of doubt, the foregoing requirement shall not apply to any business combination solely among direct or indirect Subsidiaries (other than OpCo) of New MDC.

(c)                 For purposes of this Section 7.16, “Beneficially Owns” shall mean the beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of Stagwell, but shall expressly exclude any shares held directly by any of its limited partners.

Section 7.17                Section 16 Matters. Prior to the Closing, each of Stagwell and MDC shall use all reasonable efforts, including in accordance with the interpretive guidance set forth by the SEC, to cause any dispositions of MDC Common Shares (including derivative securities with respect to MDC Common Shares) or acquisitions of New MDC Common Stock (including derivative securities with respect to New MDC Common Stock) resulting from the Transactions by each officer or director who is or will be subject to the reporting requirements of Section 16(a) of the Exchange Act, to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Section 7.18                MDC Actions.

(a)                 MDC shall take all actions within its power to take, and cause its Affiliates to take, all actions necessary to:

(i)                 cause each of New MDC and Merger Sub to consummate the Transactions on the terms and subject to the conditions set forth in this Agreement; and

(ii)               ensure that, prior to Closing, each of New MDC and Merger Sub shall not conduct any business, incur or guarantee any indebtedness or any other liabilities or make any investments, other than those activities incident to its obligations under this Agreement or the Transactions.

(b)                 MDC covenants and agrees to take all actions necessary to immediately (and in any event within twelve (12) hours) following the completion of the Redomiciliation, (i) cause the sole incorporator of MDC to appoint and elect one or more directors following the Redomiciliation Effective Time to the extent no such director or directors shall have been named in the MDC Delaware Certificate of Incorporation, (ii) immediately following the appointment and election of such directors, approve and declare advisable this Agreement and the Transactions, including the MDC Merger, by all necessary corporate or other action in accordance with the DGCL (other than the MDC Merger Approval) (the actions described in the foregoing clauses (i) and (ii) collectively, the “MDC Delaware Board Approval”) and to take all other actions necessary or advisable to permit and facilitate the obtaining of the MDC Merger Approval immediately following the effectiveness of the MDC Delaware Board Approval and (iii) deliver to Stagwell evidence reasonably satisfactory to Stagwell that the MDC Delaware Board Approval have been obtained and such other actions have been taken. For the avoidance of doubt MDC shall have the sole authority to designate the sole incorporator referenced in the foregoing sentence.

(c)                 MDC or New MDC shall pay all fees and take any actions contemplated by or necessary for the effectiveness of the Senior Note Consent or a Senior Notes Refinancing, whichever shall be the case, as of the Closing.

Section 7.19                 Financing Cooperation.

(a)                 MDC shall, and shall cause each of its Subsidiaries to, use its respective reasonable best efforts to provide such cooperation in connection with obtaining the Debt Financing as may be reasonably requested by Stagwell, including:

(i)                 preparing and furnishing Stagwell and any lenders, as promptly as practicable, all Required Information within MDC’s possession and all other financial and other pertinent information and disclosures regarding MDC and the MDC Subsidiaries as may reasonably be requested by Stagwell for use in connection with the Debt Financing;

(ii)               causing such senior officers of MDC as MDC may reasonably consider appropriate to participate in a reasonable number of lender meetings, rating agency presentations and due diligence meetings at reasonable times and upon reasonable advance notice;

(iii)              cooperating with Stagwell’s legal counsel in connection with the preparation of customary legal opinions required of Stagwell and provided by Stagwell’s legal counsel in connection with the Debt Financing;

(iv)              providing such assistance as Stagwell may reasonably request in obtaining any corporate credit and family ratings from any ratings agencies contemplated by the Second Stagwell Credit Agreement Amendment or the Term Loan Credit Agreement;

(v)                assisting in the preparation of, and, on or following Closing executing and delivering customary financing documents, including joinder, guarantee and collateral documents and other certificates and documents by OpCo and MDC Subsidiaries as may be required by the Second Stagwell Credit Agreement Amendment or the Term Loan Credit Agreement;

(vi)              on or following Closing, facilitating the pledging of collateral for the Debt Financing (including delivery of original stock certificates and original stock powers of MDC’s Subsidiaries on the Closing Date in connection with the Debt Financing to the extent available to MDC);

(vii)              with effect from Closing, taking all ministerial company actions requested by Stagwell to permit the consummation of the Debt Financing; and

(viii)             providing all customary documentation and other information about MDC and its Subsidiaries requested in writing by the finance parties in respect of the Debt Financing that relates to applicable “know your customer” and anti-money laundering rules and regulations;

(b)                 Stagwell shall, and shall cause each of the Stagwell Subject Entities to, use its respective reasonable best efforts to provide such cooperation in connection with (i) obtaining the MDC Financing Arrangements, and (ii) the accession of the Stagwell Subject Entities to the MDC Financing Arrangements as may be reasonably requested by MDC, including:

(i)                 preparing and furnishing MDC, as promptly as practicable, all financial and other pertinent information and disclosures regarding Stagwell and the Stagwell Subject Entities as may reasonably be requested by MDC for use in connection with the MDC Financing Arrangements;

(ii)               causing such senior officers of Stagwell as Stagwell may reasonably consider appropriate to participate in a reasonable number of lender meetings, rating agency presentations and due diligence meetings at reasonable times and upon reasonable advance notice in connection with the MDC Financing Arrangements;

(iii)              cooperating with MDC’s legal counsel in connection with the preparation of customary legal opinions required of MDC and provided by MDC’s legal counsel in connection with the MDC Financing Arrangements;

(iv)              assisting in the preparation of, and, on or following Closing executing and delivering customary financing documents, including joinder, guarantee and collateral documents and other certificates and documents by the Stagwell Subject Entities as may be required by the documentation in respect of the MDC Financing Arrangements;

(v)                with effect from Closing, taking all ministerial company actions requested by MDC to permit the consummation of the MDC Financing Arrangements; and

(vi)              providing all customary documentation and other information about the Stagwell Subject Entities requested in writing by the lenders or other finance parties in respect of the MDC Financing Arrangements that relates to applicable “know your customer” and anti-money laundering rules and regulations;

(c)                 Nothing in this ‎Section 7.19 shall require MDC, Stagwell, or any of their Subsidiaries (each, a “Providing Party”) to:

(i)                 in the case of MDC or its Subsidiaries, provide to Stagwell or, in the case of Stagwell or the Stagwell Subject Entities, provide to MDC, or any other person, documentation or other information in respect of which MDC or Stagwell, as applicable, or any of their respective Subsidiaries owes a duty of confidentiality to a person other than the other party, that is privileged, or that MDC or Stagwell, as applicable, reasonably considers to be commercially or competitively sensitive;

(ii)                take any action that is inconsistent with applicable Law or obligations to which the Providing Party is a party (including, in the case of MDC and its Subsidiaries, the MDC Credit Agreement);

(iii)               take any action that has effect (including in respect of the incurrence of any obligations) prior to Closing; or

(iv)              take any action or provide any documentation or other information the taking or provision of which reasonably interferes with the ongoing operations of the Providing Party.

(d)                Stagwell shall, on demand, reimburse MDC for all reasonable and documented out-of-pocket costs and expenses incurred by MDC and its Subsidiaries in connection with their respective obligations pursuant to ‎Section 7.19(a).

(e)                MDC shall, on demand, reimburse Stagwell for all reasonable and documented out-of-pocket costs and expenses incurred by Stagwell and its Subsidiaries in connection with their respective obligations pursuant to ‎Section 7.19(b).

Section 7.20               Repayment and Termination of MDC Credit Agreement. MDC shall, and shall cause its Subsidiaries to, deliver all notices, cooperate with Stagwell and take all other actions reasonably requested by Stagwell to facilitate the termination at or prior to the Closing of all commitments in respect of the MDC Credit Agreement, the repayment in full on or prior to the Closing Date of all obligations in respect of the indebtedness under the MDC Credit Agreement, and the release on or as soon as reasonably practicable thereafter of any Liens securing all such indebtedness and guarantees in connection therewith (such transactions, collectively, the “MDC Credit Agreement Termination”). In furtherance and not in limitation of the foregoing, MDC shall, and shall cause its Subsidiaries to, use reasonable best efforts and shall cooperate with Stagwell to obtain and deliver to Stagwell at least five (5) Business Days prior to the Closing Date an executed payoff letter with respect to the MDC Credit Agreement (the “Payoff Letter”), in form and substance customary for financings of the type to which the Payoff Letter relates, from Wells Fargo on behalf of the lenders to whom such indebtedness is owed, which Payoff Letter together with any related release documentation shall, among other things include the payoff amount and provide that Liens (and guarantees), if any, granted in connection with the MDC Credit Agreement relating to the assets, rights and properties of MDC and its Subsidiaries securing such indebtedness shall, upon the payment of the amount set forth in the Payoff Letter at or prior to the Closing, be released and terminated.

Article 8
CONDITIONS

Section 8.01                Conditions to Each Party’s Obligations to Effect the Transactions. The obligations of each party to effect the Closing are subject to the satisfaction or, to the extent permitted by applicable Law, the waiver on or prior to the Closing Date of each of the following conditions:

(a)                 Shareholder Approval. (i) With respect to the Transactions other than the MDC Merger, the MDC Special Meeting Approval shall have been duly obtained in accordance with the CBCA, the MDC Organizational Documents and the rules and requirements of NASDAQ and the SEC; and (ii) with respect to the MDC Merger only, the MDC Delaware Board Approval and the MDC Merger Approval shall have been duly obtained in accordance with the DGCL.

(b)                 Antitrust/Competition. Any waiting period (and any extension thereof) applicable to the consummation of the Transactions under the HSR Act and any agreement with the US Federal Trade Commission or the US Department of Justice not to consummate the Transactions shall have expired or been terminated.

(c)                 Investment Canada Act. The Investment Canada Act Approval shall have been obtained.

(d)               No Injunctions or Restraints. There shall be no Law, injunction, judgment, order or decree of any Governmental Entity of competent jurisdiction that is in effect which temporarily or permanently prohibits or enjoins the consummation of the Transactions.

(e)                 NASDAQ Listing. The shares of New MDC Class A Common Stock to be issued in connection with the Transactions (including any such shares issuable pursuant to the A&R OpCo Operating Agreement) shall have been approved for listing on NASDAQ, subject to official notice of issuance.

(f)                  Debt Transactions. The Debt Transactions shall have been completed.

(g)                Goldman Consent and Stagwell Consent. The Goldman Consent and the Stagwell Consent shall not have been modified or rescinded and shall remain in full force and effect.

(h)                 Senior Note Consent or Senior Note Refinancing. Either (i) the Senior Note Consent shall have been obtained and shall remain in full force and effect or (ii) MDC, with the prior consent of Stagwell, shall have consummated a Senior Note Refinancing.

Section 8.02                Conditions to Obligations of Stagwell. The obligations of Stagwell to effect the Closing are further subject to the satisfaction or, to the extent permitted by applicable Law, the waiver by Stagwell on or prior to the Closing Date of each of the following conditions:

(a)                 Representations and Warranties. (i) The representations and warranties of MDC set forth in Section 4.02(a), Section 4.02(d) (but solely as it relates to MDC and not any MDC Subsidiary) and Section 4.06(a) shall be true and correct in all respects (other than, in the case of Section 4.02(a) and Section 4.02(d), for any de minimis inaccuracies) as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date only), (ii) the representations and warranties of MDC set forth in Section 4.01(a), Section 4.01(b), Section 4.02(b), Section 4.02(c), Section 4.02(d) (but solely to the extent that it relates to the MDC Subsidiaries and not MDC), Section 4.03 (other than clauses (c) and (g) thereof), and Section 4.11 (such Sections, together with the Sections referred to in the immediately preceding clause (i), the “Specified MDC Representations”) shall be true and correct (without giving effect to any limitation as to materiality or “MDC Material Adverse Effect” set forth therein) in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date only), and (iii) the representations and warranties of MDC set forth in this Agreement (other than the Specified MDC Representations) shall be true and correct (without giving effect to any limitation as to materiality or “MDC Material Adverse Effect” set forth therein) as of the date of this Agreement and as of the Closing Date as though made as of such date (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date only), except where the failure of such representations and warranties to be so true and correct individually or in the aggregate has not had, and would not reasonably be expected to have, an MDC Material Adverse Effect.

(b)                Performance of Obligations of MDC. MDC shall have performed in all material respects all obligations required to be performed or complied with by it under this Agreement on or prior to the Closing Date.

(c)                 Closing Deliverables. Stagwell shall have received each of the closing deliverables, as applicable, contemplated by Section 3.03.

(d)                 No MDC Material Adverse Effect. Since the date of this Agreement, there shall not have occurred and be continuing any Effect which, individually or in the aggregate, has had or would reasonably be expected to have an MDC Material Adverse Effect.

Section 8.03                Conditions to Obligations of MDC. The obligations of MDC to effect the Closing are further subject to the satisfaction or, to the extent permitted by applicable Law, the waiver by MDC on or prior to the Closing Date of each of the following conditions:

(a)                 Representations and Warranties. (i) The representations and warranties of Stagwell set forth in Section 5.02(a), Section 5.02(d) (but solely as it relates to SMGH and not any other Stagwell Subject Entity) and Section 5.06(a) shall be true and correct in all respects (other than, in the case of Section 5.02(a) and Section 5.02(d), for any de minimis inaccuracies) as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date only), (ii) the representations and warranties of Stagwell set forth in Section 5.01(a), Section 5.01(b), Section 5.02(b), Section 5.02(c), Section 5.02(d) (but solely as it relates to the Stagwell Subject Entities other than SMGH), Section 5.03 (other than clauses (c) and (d)), and Section 5.10 (such Sections in this clause (ii), together with the Sections referred to in the immediately preceding clause (i), the “Specified Stagwell Representations”) shall be true and correct (without giving effect to any limitation as to materiality or “Stagwell Material Adverse Effect” set forth therein) in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date only), and (iii) the representations and warranties of Stagwell set forth in this Agreement (other than the Specified Stagwell Representations) shall be true and correct (without giving effect to any limitation as to materiality or “Stagwell Material Adverse Effect” set forth therein) as of the date of this Agreement and as of the Closing Date as though made as of such date (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date only), except where the failure of such representations and warranties to be so true and correct individually or in the aggregate has not had, and would not reasonably be expected to have, a Stagwell Material Adverse Effect.

(b)                Performance of Obligations of Stagwell. Stagwell shall have performed in all material respects all obligations required to be performed or complied with by it under this Agreement on or prior to the Closing Date.

(c)                 Closing Deliverables. MDC shall have received each of the closing deliverables contemplated by Section 3.02.

(d)                No Stagwell Material Adverse Effect. Since the date of this Agreement, there shall not have occurred and be continuing any Effect which, individually or in the aggregate, has had or would reasonably be expected to have a Stagwell Material Adverse Effect.

(e)                 Stagwell Restructuring. Either (i) Stagwell shall have provided MDC with copies of legal documentation reasonably satisfactory to MDC evidencing the completion of the Stagwell Restructuring on the terms set forth in Schedule VIII, or (ii) in the event the Stagwell Restructuring shall not have been completed on the terms set forth in Schedule VIII, Stagwell shall have delivered written notice to MDC of its agreement that the Stagwell Contribution Consideration be reduced for all purposes hereunder in accordance with the proviso to the definition thereof.

Article 9
TERMINATION

Section 9.01                Termination by Mutual Consent. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing, whether before or after the MDC Shareholder Approval has been obtained, by mutual written consent of Stagwell and MDC.

Section 9.02                Termination by Stagwell or MDC. This Agreement may be terminated at any time prior to the Closing, whether before or after the MDC Shareholder Approval has been obtained, by either Stagwell or MDC upon written notice to the other if:

(a)                 the Closing Date shall not have occurred by 5:00 pm (New York City time) on the date that is the nine (9) month anniversary of the date of this Agreement (such date or such later date, if any, as is provided in the proviso of this Section 9.02(a), the “Termination Date”), and the party seeking to terminate this Agreement pursuant to this Section 9.02(a) shall not have materially breached its representations, warranties or covenants under this Agreement in any manner that shall have proximately caused the failure to consummate the Transactions on or before the Termination Date; provided, that in the event that any of the conditions set forth in Section 8.01(b) (Antitrust/Competition), Section 8.01(c) (Investment Canada Act) or Section 8.01(d) (No Injunctions or Restraints) (to the extent related to the waiting periods and clearances that are the subject of Section 8.01(b) or Section 8.01(c)) shall not have been satisfied on or before the Termination Date because of the failure to obtain the approvals described in Section 8.01(b) (Antitrust/Competition) or Section 8.01(c) (Investment Canada Act) but all of the other conditions set forth in Section 8.01 have been satisfied, then either Stagwell or MDC may extend the Termination Date, on one or more occasions, by notice delivered to the other parties, until 5:00 pm (New York City time) to a date no later than the twelve (12) month anniversary of the date of this Agreement, in which case the Termination Date shall be deemed for all purposes to be the latest of such dates;

(b)                any Law, injunction, judgment, order or decree having the effects set forth in Section 8.01(c) (No Injunctions or Restraints) shall be in effect and shall have become permanent final and nonappealable; or

(c)                the MDC Special Meeting Approval shall not have been obtained upon a vote taken at the Special Meeting (including any adjournment or postponement thereof).

Section 9.03                 Termination by MDC. This Agreement may be terminated at any time prior to the Closing by MDC if:

(a)                 Stagwell shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 8.03(a) or Section 8.03(b), and (ii) is incapable of being satisfied or cured by Stagwell prior to the Termination Date or, if capable of being satisfied or cured, is not satisfied or cured by Stagwell within thirty (30) calendar days following receipt of written notice from MDC of such breach or failure to perform (“Stagwell Terminable Breach”); provided, that MDC is not then in MDC Terminable Breach of any representation, warranty, covenant or other agreement by MDC contained in this Agreement; or

(b)                 prior to the receipt of the MDC Special Meeting Approval, the MDC Board or the MDC Special Committee shall have approved, and MDC is concurrently entering into, an Acquisition Agreement in accordance with Section 7.06(f), provided that MDC shall have complied in all material respects with Section 7.06, and shall have paid (or shall concurrently pay) the fee due under Section 9.05.

Section 9.04                 Termination by Stagwell. This Agreement may be terminated at any time prior to the Closing by Stagwell if:

(a)                 MDC shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 8.02(a) or Section 8.02(b), and (ii) is incapable of being satisfied or cured by MDC prior to the Termination Date or, if capable of being satisfied or cured, is not satisfied or cured by MDC within thirty (30) calendar days following receipt of written notice from Stagwell of such breach or failure to perform (“MDC Terminable Breach”); provided, that Stagwell is not then in Stagwell Terminable Breach of any representation, warranty, covenant or other agreement by Stagwell contained in this Agreement;

(b)                 (i) a Change in Recommendation (whether in respect of a Superior Proposal or an Intervening Event Change in Recommendation) has occurred or (ii) a tender or exchange offer that constitutes an Alternative Proposal shall have been commenced (or thereafter amended in any material respect) and MDC shall not have communicated to the shareholders of MDC, within ten Business Days after the commencement of such tender or exchange offer (or such amendment), a statement disclosing that the MDC Board or MDC Special Committee recommends rejection of such tender or exchange offer and reaffirming the MDC Board Recommendation or MDC Special Committee Recommendation, as applicable; or

(c)                 MDC shall have committed a willful and material breach of any of its obligations under Section 7.01(d) or Section 7.06; or

(d)                Stagwell shall not have received evidence reasonably satisfactory to Stagwell, within twenty-four (24) hours following the completion of the Redomiciliation, of the adoption and approval of the MDC Delaware Board Approval.

Section 9.05                 Effect of Termination.

(a)                In the event that:

(i)                 this Agreement is terminated by MDC pursuant to Section 9.03(b);

(ii)               this Agreement is terminated by Stagwell pursuant to Section 9.04(b), Section 9.04(c) or Section 9.04(d); or

(iii)              (A) (1) an Alternative Proposal shall have been made or communicated to MDC, the MDC Board or the MDC Special Committee or any Person shall have publicly announced an Alternative Proposal, and (2) such Alternative Proposal has not been publicly withdrawn in good faith prior to the event giving rise to termination, (B) this Agreement is terminated by MDC or Stagwell pursuant to Section 9.02(c), and (C) within twelve (12) months after the date this Agreement is terminated, MDC enters into a definitive agreement with respect to, or consummates, any Alternative Proposal (which need not be the same Alternative Proposal described in clause (A) above);

then in any such event, MDC shall pay to Stagwell the amount of $5,855,000 in cash (the “MDC Termination Amount”), in consideration for the disposition of Stagwell’s rights under this Agreement (as and to the extent set forth herein), it being understood that in no event shall MDC be required to pay the MDC Termination Amount on more than one occasion.

For purposes of this Section 9.05, the term “Alternative Proposal” shall have the meaning set forth in Section 7.06(h)(i), except that all references to “twenty percent (20%)” therein shall be deemed to be references to “fifty percent (50%).”

(b)                Any payment required to be made pursuant to clause (i) of Section 9.05(a) shall be made to Stagwell prior to or concurrently with such termination by MDC; any payment required to be made pursuant to clause (ii) of Section 9.05(a) shall be made to Stagwell promptly (and, in any event, within three (3) Business Days) following the termination giving rise to such payment; and any payment required to be made pursuant to clause (iii) of Section 9.05(a) shall be made to Stagwell promptly (but in no event later than the consummation of such Alternative Proposal); and in each case such payment shall be made by wire transfer of immediately available funds to the account details of Stagwell provided in writing by Stagwell to MDC for such purpose.

(c)                 In the event that MDC shall fail to pay the MDC Termination Amount required pursuant to this Section 9.05 when due, such amount shall accrue interest for the period commencing on the date such amount became past due, at a rate equal to the rate of interest publicly announced by Citibank N.A., in the City of New York from time to time during such period, as such bank’s Prime Lending Rate. In addition, if MDC shall fail to pay such amount when due, MDC shall also pay to Stagwell all of Stagwell’s costs and expenses (including attorneys’ fees) incurred in connection with efforts to collect such amount.

(d)                MDC acknowledges that the MDC Termination Amount and the other provisions of this Section 9.05 are an integral part of this Agreement and the Transactions and that, without these agreements, Stagwell would not enter into this Agreement. MDC acknowledges that the MDC Termination Amount is not a penalty, but rather a reasonable amount in consideration for the disposition of Stagwell’s rights under this Agreement (as and to the extent set forth herein). Notwithstanding anything to the contrary in this Agreement, the parties agree that in circumstances where payment of the MDC Termination Amount is required hereunder, upon such payment, the payment of any such MDC Termination Amount in accordance with this Section 9.05, shall be the exclusive remedy of Stagwell, as the case may be, for (i) any loss suffered as a result of the failure of the Transactions to be consummated and (ii) any other losses, damages, obligations or liabilities suffered relating to or arising out of this Agreement and the Transactions, except, in each case, in the event of actual fraud (involving scienter) or any willful and material breach prior to such termination  (it being understood that, without limiting the foregoing, in the case of fraud or a willful and material breach, any prior payment of the MDC Termination Amount shall be taken into account when determining any remedies). For purposes of this Agreement, “willful and material breach” shall mean a material breach that is a consequence of an act or a failure to take such act by the breaching party with the knowledge that the taking of such act (or the failure to take such act) would cause a material breach of this Agreement.

(e)                If this Agreement is terminated in accordance with Article 9, this Agreement shall forthwith become null and void and, except as set forth in this Section 9.05, there shall be no liability or obligation on the part of Stagwell, MDC or their respective Affiliates or Representatives, provided that (i) Article 1, Section 7.05(c), this Section 9.05 and Article 11 will survive termination hereof and (ii) no party shall be relieved from any liabilities or damages as a result of actual fraud (involving scienter) or any willful and material breach by any party of any of such party’s representations, warranties, covenants or other agreements.

Article 10
SURVIVAL

Section 10.01             Survival. None of the representations and warranties contained in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Closing. No covenant or agreement contained in this Agreement shall survive the Closing except to the extent any such covenant or agreement by its terms contemplates performance following the Closing, in which case such covenant or agreement shall survive until fully performed in accordance with its terms.

Article 11
GENERAL PROVISIONS

Section 11.01             Notices. Each notice, request, demand or other communication under this Agreement shall be in writing and shall be deemed to have been duly given, delivered or made as follows: (a) if delivered by hand, when delivered; (b) if sent by facsimile transmission before 5:00 p.m. on a Business Day in the delivery location, when transmitted and receipt is confirmed; (c) if sent by facsimile transmission after 5:00 p.m. on a Business Day in the delivery location or on a day other than a Business Day and receipt is confirmed, on the following Business Day; (d) if sent via an overnight international courier service, the Business Day after being delivered to such courier; and (e) if sent by email, when sent, provided that (i) the subject line of such email states that it is a notice delivered pursuant to this Agreement and (ii) the sender of such email does not receive a written notification of delivery failure. All notices and other communications hereunder shall be delivered to the address, facsimile number or email address set forth beneath the name of such party below (or to such other address, facsimile number or email address as such party shall have specified in a written notice given to the other parties hereto):

(a)            if to Stagwell:

Stagwell Media LP

1808 I Street, NW, 6th Floor

Washington DC 20006

Attention: Ryan Greene

Email: ryan@stagwellgroup.com

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

(b)           if to MDC:

MDC Partners Inc.

One World Trade Center, Floor 65

New York, NY 10007

Attention:          David Ross

Email:                 dross@mdc-partners.com

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

Cleary Gottlieb Steen & Hamilton LLP

1 Liberty Pl

New York, NY 10006

with copies (which shall not constitute notice) to:

Section 11.02        Interpretations. When a reference is made in this Agreement to an Article, Section, Schedule, Disclosure Letter, Annex or Exhibit, such reference shall be to an Article, Section, Schedule, Disclosure Letter, Annex or Exhibit to this Agreement unless otherwise indicated. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” Any references in this Agreement to “the date hereof” refers to the date of execution of this Agreement. All references to “CAD$” refer to Canadian dollars. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. References to “this Agreement,” “hereof,” “herein,” and “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement and include any schedules, disclosure letters, annexes, exhibits or other attachments to this Agreement. The MDC Disclosure Letter, the Stagwell Disclosure Letter and all annexes and schedules hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or other document or any Law defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, other document or Law as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. The parties hereto have participated jointly in the negotiation and drafting of this Agreement with the assistance of counsel and other Representatives and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement or interim drafts of this Agreement. Any references in this Agreement: (a) to the “knowledge” of MDC shall mean the actual knowledge of the individuals identified in Section 11.02(a) of the MDC Disclosure Letter; and (b) to the “knowledge” of Stagwell shall mean the actual knowledge of the individuals identified in Section 11.02(b) of the Stagwell Disclosure Letter. Whenever the phrase “made available,” “delivered” or words of similar import are used herein, it shall mean the document was (i) (A) with respect to Stagwell, available for viewing in the “Project Midas” electronic data room hosted by IntraLinks, Inc., or (B) with respect to MDC, available for viewing in the “Project Metro II” electronic data room hosted by Datasite, in each case as such site existed on or before the date that is one (1) Business Day prior to the date hereof at 11:59 PM Eastern Time, or (ii) otherwise made available (electronically or otherwise) in written form to the relevant party or its Representatives prior to the execution and delivery of this Agreement.

Section 11.03        Governing Law; Jurisdiction; Specific Performance; Waiver of Jury Trial.

(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE, EXCEPT TO THE EXTENT THE LAWS OF THE PROVINCE OF ONTARIO ARE MANDATORILY APPLICABLE.

(b)          All actions arising out of, relating to or in connection with this this Agreement or any of the Transactions shall be heard and determined exclusively in the Court of Chancery of the State of Delaware (the “Chancery Court”) and any state appellate court therefrom within the State of Delaware (or if, but only if, the Chancery Court lacks subject matter jurisdiction, any other state or federal court located in the State of Delaware and any appellate court therefrom). Each of the parties hereto (i) irrevocably submits itself to the personal jurisdiction of the Chancery Court or, if, but only if, the Chancery Court lacks subject matter jurisdiction, any other state or federal court located in the State of Delaware and any appellate court therefrom with respect to any dispute arising out of, relating to or in connection with this Agreement or any of the Transactions, (ii) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any action or proceeding arising out of, relating to or in connection with this Agreement or any of the Transactions, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action or proceeding arising out of, relating to or in connection with this Agreement or any of the Transactions is brought in an inconvenient forum, that the venue of the action or proceeding arising out of, relating to or in connection with this Agreement or any of the Transactions is improper, or that this Agreement or any of the Transactions may not be enforced in or by the above-named courts, and (iii) agrees that it will not bring any action arising out of, relating to or in connection with this Agreement or any of the Transactions in any court other than the courts of the State of Delaware, as described above. Nothing in this Section 11.03 shall prevent any party from bringing an action or proceeding in any jurisdiction to enforce any judgment of the Chancery Court or any other state or federal court located in the State of Delaware or any appellate court therefrom, as applicable. Each of the parties hereto hereby agrees that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 11.01 shall be effective service of process for any suit or proceeding in connection with this Agreement or any of the Transactions.

(c)           The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that monetary damages, even if available, would be not be an adequate remedy therefor. Each party agrees that, in the event of any breach or threatened breach by any other party of any covenant or obligation contained in this Agreement, the non-breaching party shall be entitled, prior to the valid termination of this Agreement (in addition to any other remedy that may be available to it whether in law or equity, including monetary damages), to (i) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (ii) an injunction restraining such breach or threatened breach, in each case, without the posting of any bond or other security. In circumstances where the parties are obligated to consummate the Transactions and the Transactions have not been consummated (other than as a result of the other party’s refusal to close in violation of this Agreement), each of the parties expressly acknowledges and agrees that the other party and its stockholders shall have suffered irreparable harm, that monetary damages will be inadequate to compensate such other party and its equityholders, and that such other party on behalf of itself and its equityholders shall be entitled to enforce specifically the breaching party’s obligation to consummate the Transactions.

(d)          EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND ANY OF THE TRANSACTIONS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, RELATING TO or in connection with THIS AGREEMENT OR ANY OF THE TRANSACTIONS. EACH OF THE PARTIES HERETO CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS IN THIS Section 11.03(d).

Section 11.04        Counterparts; Electronic Transmission of Signatures. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, and delivered by means of electronic mail transmission or otherwise, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

Section 11.05        Assignment; No Third-Party Beneficiaries.

(a)           This Agreement and all of the provisions hereto shall be binding upon and inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns, but, except as set forth in Section 7.18, neither this Agreement nor any of the rights, interests or obligations set forth herein shall be assigned by any party hereto without the prior written consent of the other parties hereto and any purported assignment without such consent shall be void.

(b)           Nothing in this Agreement shall be construed as giving any Person, other than the parties hereto and their heirs, successors, legal representatives and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof.

Section 11.06        Expenses. Except as otherwise specifically provided herein, each party hereto shall bear its own expenses in connection with this Agreement and the Transactions.

Section 11.07        Severability. If any provision of this Agreement shall be held to be illegal, invalid or unenforceable under any applicable Law, then such contravention or invalidity shall not invalidate the entire Agreement. Such provision shall be deemed to be modified to the extent necessary to render it legal, valid and enforceable, and if no such modification shall render it legal, valid and enforceable, then this Agreement shall be construed as if not containing the provision held to be invalid, and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

Section 11.08        Entire Agreement. This Agreement (including the annexes, exhibits and letters hereto) and the Mutual NDA constitute the entire agreement, and supersede all other prior agreements and understandings (both written and oral), among the parties hereto with respect to the subject matter hereof and thereof.

Section 11.09        Amendment. This Agreement may be amended by the parties hereto (in the case of MDC, acting upon the recommendation of the MDC Special Committee) at any time, whether before or after approval of this Agreement and the Transactions by the shareholders of MDC; provided, that after any such approval by the shareholders of MDC, no amendment shall be made without the further approval of such shareholders except as permitted by Law; provided, further, that from and after the Closing, Section 7.15 or Section 7.16 may only be amended in accordance with Section 7.16(a). This Agreement (including the MDC Disclosure Letter and the Stagwell Disclosure Letter) may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

Section 11.10        Waiver. Any failure of any of the parties to comply with any obligation, representation, warranty, covenant, agreement or condition herein may be waived at any time prior to the Closing by any of the parties entitled to the benefit thereof only by a written instrument signed by each such party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, representation, warranty, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. For the avoidance of doubt, any waiver by MDC shall require the prior approval of the MDC Special Committee.

Section 11.11        No Waiver of Privilege.

(a)           From and after the Closing, in any dispute or action arising out of, relating to or in connection with this Agreement, any of the Ancillary Agreements, the Transactions or any of the other transactions contemplated hereby or thereby, Stagwell, together with all of its Affiliates and Representatives from and after the Closing and the respective successors and assigns of Stagwell and such Affiliates and Representatives (collectively, the “Stagwell Parties”), shall have the right, at their election, to retain the firms of Freshfields Bruckhaus Deringer US LLP, Freshfields Bruckhaus Deringer LLP, McCarthy Tétrault LLP or any other external or internal counsel of Stagwell or any of its Subsidiaries that has advised Stagwell or any Stagwell Subject Entity in connection with this Agreement, the Ancillary Agreements, the Transactions or any of the other transactions contemplated hereby or thereby (collectively, the “Stagwell Counsel”) to represent it in such matter, and MDC hereby irrevocably waives any objection and consent, and, following the Closing, shall cause the Stagwell Subject Entities and each of its and their respective Subsidiaries to irrevocably waive any objection and consent, on its own behalf and on behalf of its successors and assigns, to any such representation in any such matter and the communication by any Stagwell Counsel to the Stagwell Parties in connection with any such representation of any fact known to any Stagwell Counsel arising by reason of such counsel’s prior representation of the Stagwell Parties, the Stagwell Subject Entities and their respective Affiliates and Representatives, as applicable. MDC hereby irrevocably acknowledges and agrees, and shall cause the Stagwell Subject Entities and each of its and their respective Subsidiaries to irrevocably acknowledge and agree, on its own behalf and on behalf of its successors and assigns, that all communications between the Stagwell Subject Entities and their respective Representatives and Stagwell Counsel made in connection with the negotiation, preparation, execution, delivery and closing under, or any dispute or action arising under or in connection with, this Agreement, any Ancillary Agreement, the Transactions or any of the other transactions contemplated hereby or thereby, which, immediately prior to the Closing, would be deemed to be privileged communications between the Stagwell Subject Entities and Stagwell Counsel and would not be subject to disclosure to New MDC in connection with any process relating to a dispute arising under or in connection with, this Agreement, any Ancillary Agreement, the Transactions or any of the other transactions contemplated hereby or thereby, or otherwise, shall, from and after the Closing, be deemed to be privileged communications between the Stagwell Parties and Stagwell Counsel, and neither New MDC, the Stagwell Subject Entities nor any other Person acting or purporting to act on behalf of or through any of them shall, from and after the Closing, attempt to access, or possess (including by virtue of the Transactions or any of the other transactions contemplated by this Agreement or any of the Ancillary Agreements) any right of access to, any work product of Stagwell Counsel, or any other information, materials or documents in the possession of Stagwell Counsel, or any communications between Stagwell Counsel and any of the Stagwell Subject Entities or otherwise seek to obtain the same by any process, including in each case on the grounds that the privilege attaching to such work product, information, materials, documents or communications belongs to any Person other than the Stagwell Parties. Other than as explicitly set forth in this Section 11.11(a), the parties acknowledge that any attorney-client, attorney work product, common interest, joint defense and any other available privilege attaching as a result of legal counsel representing the Stagwell Subject Entities prior to the Closing shall survive the Closing and continue to be a privilege of the Stagwell Subject Entities and not the Stagwell Parties after the Closing. Notwithstanding anything to the contrary in this Section 11.11(a), in the event that a dispute arises following the Closing between New MDC and any of its Affiliates, on the one hand, and any third party who is not a party to this Agreement and not affiliated with, employed by or otherwise a Representative of Stagwell or its Subsidiaries on the other hand, (a) the Stagwell Subject Entities may assert the attorney-client privilege to prevent disclosure of their communications with Stagwell Counsel to such third party and (b) Stagwell shall not waive its privilege retained hereunder in connection with such dispute with such third party without the prior written consent of New MDC. Stagwell, for itself and on behalf of Stagwell Counsel, acknowledges this Section 11.11(a) does not apply to any communications of the Stagwell Subject Entities with Stagwell Counsel other than those made in connection with the negotiation, preparation, execution, delivery and closing under, or any dispute or action arising under or in connection with, this Agreement, any Ancillary Agreement, the Transactions or any of the other transactions contemplated hereby or thereby, and accordingly the Stagwell Subject Entities retain any privilege that may attach to such communications in accordance with applicable Law.

(b)          From and after the Closing, in any dispute or action arising out of, relating to or in connection with this Agreement, any of the Ancillary Agreements, the Transactions or any of the other transactions contemplated hereby or thereby, New MDC and OpCo, together with all of their respective Affiliates (including the MDC Subsidiaries) and Representatives from and after the Closing and the respective successors and assigns of MDC and such Affiliates and Representatives (collectively, the “MDC Parties”), shall have the right, at their election, to retain the firms of DLA Piper LLP (US), DLA Piper (Canada) LLP, and/or Cleary Gottlieb Steen & Hamilton LLP, or any other external or internal counsel of MDC or any MDC Subsidiary that has advised MDC or any MDC Subsidiary in connection with this Agreement, the Ancillary Agreements, the Transactions or any of the other transactions contemplated hereby or thereby (collectively, the “MDC Counsel”) to represent it in such matter, and Stagwell hereby irrevocably waives any objection and consent, and, following the Closing, shall cause each of its and their respective Subsidiaries to irrevocably waive any objection and consent, on its own behalf and on behalf of its successors and assigns, to any such representation in any such matter and the communication by any MDC Counsel to the MDC Parties, in connection with any such representation of any fact known to any MDC Counsel arising by reason of such counsel’s prior representation of the MDC Parties and their respective Affiliates and Representatives, as applicable. Stagwell hereby irrevocably acknowledges and agrees, and shall cause each of its Subsidiaries to irrevocably acknowledge and agree, on its own behalf and on behalf of its successors and assigns, that all communications between the MDC Parties (other than the Stagwell Subject Entities) and their respective Representatives and MDC Counsel made in connection with the negotiation, preparation, execution, delivery and closing under, or any dispute or action arising under or in connection with, this Agreement, any Ancillary Agreement, the Transactions or any of the other transactions contemplated hereby or thereby, which, immediately prior to the Closing, would be deemed to be privileged communications between the MDC Parties (other than the Stagwell Subject Entities) and MDC Counsel, and would not be subject to disclosure to Stagwell in connection with any process relating to a dispute arising under or in connection with, this Agreement, any Ancillary Agreement, the Transactions or any of the other transactions contemplated hereby or thereby, or otherwise, shall, from and after the Closing, be deemed to be privileged communications between the MDC Parties (other than the Stagwell Subject Entities) and MDC Counsel, and neither Stagwell nor any other Person acting or purporting to act on behalf of or through any of them shall, from and after the Closing, attempt to access, or possess (including by virtue of the Transactions or any of the other transactions contemplated by this Agreement or any of the Ancillary Agreements) any right of access to, any work product of MDC Counsel, or any other information, materials or documents in the possession of MDC Counsel, or any communications between MDC Counsel and any of the MDC Parties (other than the Stagwell Subject Entities) or otherwise seek to obtain the same by any process, including in each case on the grounds that the privilege attaching to such work product, information, materials, documents or communications belongs to any Person other than the MDC Parties (other than the Stagwell Subject Entities).  Notwithstanding anything to the contrary in this Section 11.11(b), in the event that a dispute arises following the Closing between Stagwell and any of its Affiliates, on the one hand, and any third party who is not a party to this Agreement and not affiliated with, employed by or otherwise a Representative of MDC or New MDC, on the other hand, (a) New MDC, the MDC Subsidiaries (other than the Stagwell Subject Entities) or New MDC, as applicable, may assert the attorney-client privilege to prevent disclosure of their communications with MDC Counsel, to such third-party and (b) MDC shall not waive its privilege retained hereunder in connection with such dispute with such third party without the prior written consent of Stagwell. MDC, for itself and on behalf of MDC Counsel, acknowledges this Section 11.11(b) does not apply to any communications of MDC with MDC Counsel, other than those made in connection with the negotiation, preparation, execution, delivery and closing under, or any dispute or action arising under or in connection with, this Agreement, any Ancillary Agreement, the Transactions or any of the other transactions contemplated hereby or thereby, and accordingly MDC retains any privilege that may attach to such communications in accordance with applicable Law.

Section 11.12        Disclosure Letters. Any disclosure contained in the MDC Disclosure Letter or the Stagwell Disclosure Letter with reference to any section or subsection of this Agreement shall be deemed to apply to any other section or subsection of the MDC Disclosure Letter or Stagwell Disclosure Letter, respectively, where the relevance of such disclosure is reasonably apparent on its face (without reference to any additional information, investigation or documentation). The mere inclusion of any item in the MDC Disclosure Letter as an exception to a representation or warranty of MDC in this Agreement or the Stagwell Disclosure Letter as an exception to a representation or warranty of Stagwell in this Agreement, shall not be deemed to be an admission that such item is a material exception, fact, event or circumstance, or that such item, individually or in the aggregate, has had or is reasonably expected to have, an MDC Material Adverse Effect or a Stagwell Material Adverse Effect, as applicable, or trigger any other materiality qualification.

Section 11.13        Financing. Each of Stagwell, on behalf of itself, and each Stagwell Party and MDC, on behalf of itself, and each MDC Party hereby: (a) agrees that any Proceeding, whether in law or in equity, whether in contract or in tort or otherwise, involving the Debt Financing Sources, arising out of or relating to, this Agreement, the Debt Financing or any of the agreements entered into in connection with the Debt Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, shall be subject to the exclusive jurisdiction of any federal or state court in the Borough of Manhattan, New York, New York, and any appellate court thereof and each party hereto irrevocably submits itself and its property with respect to any such Proceeding to the exclusive jurisdiction of such court, and agrees not to bring or support any such Proceeding against any Debt Financing Source in any forum other than such courts, (b) agrees that any such Proceeding shall be governed by the laws of the State of New York (without giving effect to any conflicts of law principles that would result in the application of the laws of another state), except as otherwise provided in any agreement relating to the Debt Financing, (c) knowingly, intentionally and voluntarily waives to the fullest extent permitted by applicable law trial by jury in any Proceeding brought against the Debt Financing Sources in any way arising out of or relating to, this Agreement or the Debt Financing Sources, (d) agrees that none of the Debt Financing Sources will have any liability to any Stagwell Party or MDC Party (as applicable) relating to or arising out of this Agreement or the Debt Financing (subject to the last sentence of this Section 11.13, and (e) agrees that the Debt Financing Sources are express third party beneficiaries of, and may enforce, any of the provisions of this Section 11.13 and that this Section 11.13 may not be amended without the written consent of the Debt Financing Sources. Notwithstanding the foregoing, nothing in this Section 11.13 shall in any way limit or modify the rights and obligations of MDC or Stagwell under this Agreement or any Debt Financing Source’s obligations to MDC or Stagwell, as applicable, under the MDC Commitment Letter, the Term Loan Credit Agreement or the Second Stagwell Credit Agreement Amendment, as applicable.

[The remainder of this page has been intentionally left blank; the next page is the signature page.]

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

EXHIBIT A

New MDC Certificate of Incorporation

EXHIBIT B

New MDC Bylaws

EXHIBIT C

Information Rights Letter Agreement

[To be dated the Closing Date]

MDC Partners Inc.

[•]

[•]

Attention: [•]

Ladies and Gentlemen:

Reference is made to the Transaction Agreement, dated as of [•], 2020 (the “Transaction Agreement”), by and among Stagwell Media LP, a Delaware limited partnership (“Stagwell Media”), MDC Partners Inc., a Canadian corporation which domesticated to the State of Delaware and converted into a Delaware limited liability company prior to the date hereof (the “OpCo”), New MDC LLC, a Delaware limited liability company, and Midas Merger Sub 1 LLC, a Delaware limited liability company, pursuant to which, among other things, MDC Partners Inc., a Delaware corporation (the “Company”), became the managing member of OpCo. Capitalized terms used and not defined in this letter agreement shall have the meanings given to them in the Transaction Agreement. As used herein, (i) the “Stagwell Parties” means, collectively, Stagwell Media, Stagwell Agency Holdings LLC, a Delaware limited liability company, the Stagwell Group LLC, a Delaware limited liability company, and (except as provided in Section 4) Mark J. Penn; and (ii) the “Parties” means, collectively, the Stagwell Parties and the Company.

The Parties agree as follows:

1.       Information Rights. For so long as the Stagwell Parties “beneficially own” (as such term is defined in Rule 13d-3 under the Exchange Act) more than 10% of the then issued and outstanding voting securities of the Company, the Company shall provide to each Stagwell Party:

a.       quarterly financial statements as soon as reasonably practicable after they become available, but no later than the earlier of (i) forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company and (ii) the applicable filing deadlines under SEC rules, prepared in accordance with GAAP as in effect from time to time, which such financial statements shall include the consolidated balance sheet of the Company and its Subsidiaries and the related consolidated statements of operations, changes in shareholders’ equity and cash flows; provided, that this requirement shall be deemed to have been satisfied if, on or prior to such date, the Company files its quarterly report on Form 10-Q for the applicable fiscal quarter with the SEC; and

b.       annual financial statements audited by a nationally recognized accounting firm as soon as reasonably practicable after they become available, but no later than the earlier of (i) ninety (90) days after the end of each fiscal year of the Company and (ii) the applicable filing deadline under SEC rules, prepared in accordance with GAAP as in effect from time to time, which such audited financial statements shall include the consolidated balance sheet of the Company and its Subsidiaries and the related consolidated statements of operations, changes in shareholders’ equity and cash flows; provided, that this requirement shall be deemed to have been satisfied if, on or prior to such date, the Company files its annual report on Form 10-K for the applicable fiscal year with the SEC.

2.       Access Rights. For so long as the Stagwell Parties, collectively, “beneficially own” more than 10% of the then issued and outstanding voting securities of the Company, the Company shall (a) give to the Stagwell Parties and their respective Representatives reasonable access during normal business hours to the offices, properties, personnel, books, records, work papers and other documents and information relating to the Company and its Subsidiaries (provided that the Stagwell Parties must request access at least forty-eight (48) hours in advance) and (b) furnish to the Stagwell Parties and their respective Representatives such financial and operating data and other information as the Stagwell Parties may reasonably request. Nothing in this Section 2 shall require the Company or any of its Subsidiaries to disclose any information (i) that would cause a risk of a loss of privilege to the Company or any of its Subsidiaries, (ii) that would cause the Company or any of its Subsidiaries to be in violation of any applicable law, or (iii) which relates to specific events, occurrences or circumstances with respect to which there is an actual conflict of interest between the Stagwell Parties and the Company (as reasonably determined in good faith by the general counsel of the Company). If the Company or any of its Subsidiaries does not provide or cause its Representatives to provide such access or such information in reliance on the immediately preceding sentence, the Company shall give notice to the applicable Stagwell Party of the fact that it is withholding such information or documents pursuant to such sentence, and thereafter the Company and the applicable Stagwell Party shall reasonably cooperate to cause such access or information to be provided in a manner that would not reasonably be expected to waive the applicable privilege, violate applicable law or relate to an actual conflict of interest, as applicable. Notwithstanding this Section 2, none of the Stagwell Parties nor any of their respective Representatives shall have the right to conduct environmental sampling on any of the properties owned or operated by the Company or its Subsidiaries. Any access pursuant to this Section 2 shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of the Company or its Subsidiaries. The Stagwell Parties shall be responsible for, and shall reimburse the Company for, any reasonable, documented, out-of-pocket fees and expenses incurred directly in connection with the permitting of access or the preparation and provision of any information pursuant to this Section 2 to the extent that such information would not otherwise have been prepared by the Company but for the need to fulfill its obligations under this letter agreement.

3.       Sharing of Information. Individuals associated with the Stagwell Parties may from time to time serve on the board of directors of the Company or equivalent governing bodies of the Company’s Subsidiaries. The Company, on behalf of itself and its Subsidiaries, recognizes that such individuals: (a) will from time to time receive non-public information concerning the Company and its Subsidiaries; and (b) may (subject to the obligation to maintain the confidentiality of such information in accordance with this letter agreement) share such information with Stagwell Related Parties (as defined below). Such sharing will be for the dual purpose of facilitating support to such individuals in their capacity as directors (or members of the governing body of any Subsidiary) and enabling the Stagwell Parties, as equityholders of the Company, to evaluate the Company’s performance and prospects. The Company, on behalf of itself and its Subsidiaries, irrevocably consents to such sharing and agrees that such individuals, provided they comply with the confidentiality obligations herein, shall not be, or shall not be deemed to be, in breach of any duties (fiduciary or otherwise) otherwise applicable to such individuals in connection with the exercise of the rights granted in this letter agreement.

4.       Confidentiality. Except as otherwise agreed to by the Company, each Stagwell Party agrees that it will keep confidential and will not disclose, divulge or use for any purpose other than to monitor its investment in the Company and its Subsidiaries (and, with respect to a Stagwell Party who is an employee of the Company or its Subsidiaries, in the ordinary course of such Stagwell Party’s employment in compliance with the terms of such Stagwell Party’s employment agreement (if any) and any applicable policies of the Company and its Subsidiaries relating to disclosure of confidential information), any confidential information obtained from the Company pursuant to the terms of this letter agreement, unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 4 by such Stagwell Party or its controlled Affiliates), (b) is or has been independently developed or conceived by such Stagwell Party without use of the Company’s confidential information or (c) is or has been made known or disclosed to such Stagwell Party by a third party (other than a controlled Affiliate of such Stagwell Party) without, to such Stagwell Party’s knowledge, a breach of any obligation of confidentiality such third party may have to the Company; provided, that a Stagwell Party may disclose confidential information (i) to its Representatives to the extent necessary to obtain their services in connection with monitoring its investment in the Company, provided that such Stagwell Party directs such Representatives to comply with the confidentiality obligations set forth in this Section 4, (ii) to any (A) controlled Affiliate of such Stagwell Party or (B) partner or member of such Stagwell Party (but solely to the extent consistent with such Stagwell Party’s historical practices and subject to appropriate confidentiality arrangements) (the Persons identified in clauses (A) and (B), the “Stagwell Related Parties”), in each case in the ordinary course of its business, provided that any such Stagwell Related Party is subject to a customary obligation to keep such information confidential, (iii) upon the routine request of any governmental or regulatory body having authority to regulate any such Stagwell Party that relates specifically to the Company or (iv) as may otherwise be required by law, provided, in the case of each of clauses (iii) and (iv), that such Stagwell Party provides notice to the Company of such request or requirement (to the extent practicable) and undertakes reasonable effort to minimize the extent of any such required disclosure (including by cooperating with any effort by the Company to obtain confidential treatment of any information to be produced in response thereto). Each of the Stagwell Parties agree to be responsible for any breach of this Section 4 by any Stagwell Related Party or any of its or their Representatives. Notwithstanding anything in this Section 4 to the contrary, for so long as Mark J. Penn is an officer or director of the Company, he shall not be considered a “Stagwell Related Party” for purposes of this Section 4, it being understood that his duties of confidentiality to the Company shall be determined solely by reference to any applicable employment agreement he has entered into with the Company or its Subsidiaries and to the extent provided under applicable Law.

5.       Miscellaneous. Sections 12.03 (Governing Law; Jurisdiction; Specific Performance; Waiver of Jury Trial), 12.04 (Counterparts; Electronic Transmission of Signatures), 12.05(a) (Assignment); 12.06 (Expenses) 12.07 (Severability), 12.09 (Amendment), 12.10 (Waiver) and Section 12.11 (No Waiver of Privilege) of the Transaction Agreement shall apply, mutatis mutandis, to this letter agreement.

[Signature Page Follows]

If you agree with the foregoing, please execute and return to us the enclosed counterpart to this letter agreement.

[Signature Page to Information Side Letter]

Accepted and agreed:

[Signature Page to Letter Agreement]

EXHIBIT D

A&R OpCo Operating Agreement

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

[MIDAS OPCO HOLDINGS LLC]

DATED AS OF [•]

THE LIMITED LIABILITY COMPANY INTERESTS IN [MIDAS OPCO HOLDINGS LLC] HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE, OR ANY OTHER APPLICABLE SECURITIES LAWS, AND ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE SECURITIES LAWS OF ANY STATE AND ANY OTHER APPLICABLE SECURITIES LAWS; (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT; AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN THE MANAGER AND THE APPLICABLE MEMBER (EACH AS DEFINED HEREIN). SUCH INTERESTS ALSO MAY BE SUBJECT TO RESTRICTIONS ON TRANSFER PURSUANT TO A REGISTRATION RIGHTS AGREEMENT. DATED AS OF [•], BY AND AMONG [PUBCO] AND THE HOLDERS PARTY THERETO. THEREFORE, PURCHASERS AND OTHER TRANSFEREES OF SUCH LIMITED LIABILITY COMPANY INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT OR ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.

TABLE OF CONTENTS

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

[MIDAS OPCO HOLDINGS LLC]

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (as amended, supplemented or restated from time to time, this “Agreement”) of [MIDAS OPCO HOLDINGS LLC], a Delaware limited liability company (the “Company”), is made and entered into as of [•], by and among the Company, [NEW MDC INC.], a Delaware corporation (“PubCo”), as a member and in its capacity as the initial Manager, Stagwell Media LP, a Delaware limited partnership (“Stagwell”), [STAGWELL FAF] and each Person who is or at any time becomes a Member in accordance with the terms of this Agreement and the Act. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in Section 1.1.

RECITALS

WHEREAS, the Company was formed pursuant to a certificate of conversion and a certificate of formation filed in the office of the Secretary of State of the State of Delaware on [•] (the “Certificate of Formation”) and was originally governed by the Limited Liability Company Agreement of the Company, dated as of [•] (the “Existing LLC Agreement”), by and between the Company and PubCo;

WHEREAS, on [•], Stagwell, MDC Partners Inc., a Canadian corporation which domesticated as a Delaware corporation prior to the date hereof and converted into the Company pursuant to a certificate of conversion filed in the office of the Secretary of State of the State of Delaware (the “Certificate of Conversion”), PubCo and [Merger Sub LLC]¹, a Delaware limited liability company (together with Stagwell, the Company and PubCo, the “Transaction Agreement Parties”), entered into that certain Transaction Agreement (as amended, modified or supplemented from time to time, the “Transaction Agreement”);

WHEREAS, the Transaction Agreement Parties have effected or agreed to effect the Transactions (as defined in the Transaction Agreement);

WHEREAS, the parties hereto desire to continue the Company and to amend and restate the Existing LLC Agreement in its entirety and enter into this Agreement in order to, inter alia, (i) reflect the addition of Stagwell as a Member of the Company, (ii) provide for the management, operation and governance of the Company, and (iii) set forth their respective rights and obligations as Members in the Company generally; and

WHEREAS, this Agreement shall supersede the Initial LLC Agreement in its entirety as of the date hereof.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows, effective as of the Effective Time:

Article I
DEFINITIONS

Section 1.1.          Definitions. As used in this Agreement and the Schedules and Exhibits attached to this Agreement, the following definitions shall apply:

¹        Note to Draft: Entity names to be finalized.

“Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law).

“Action” means any suit, action or legal, administrative, arbitration or other hearings, proceedings or governmental investigations.

“Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account at the end of any Fiscal Year, with the following adjustments:

(a)               credit to such Capital Account any amount that such Member is obligated to restore under Treasury Regulations Section 1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to last sentences of the Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) after taking into account thereunder any changes during such Fiscal Year in Company Minimum Gain and in the minimum gain attributable to any Member Nonrecourse Debt; and

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

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

“Affiliate” means, as to any Person, any other Person which, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; provided, that for purposes of this Agreement, (i) no Member shall be deemed an Affiliate of the Company or any of its Subsidiaries and (ii) none of the Company or any of its Subsidiaries shall be deemed an Affiliate of any Member.

“Agreement” has the meaning given to such term in the preamble to this Agreement.

“Assumed Tax Liability” means, with respect to PubCo as of any Tax Distribution Date, an amount equal to the product of (a) the Assumed Tax Rate and (b) the estimated or actual taxable income of the Company, as determined for federal income tax purposes, allocated to PubCo pursuant to Article IV for the Tax period (or portion thereof) to which the Assumed Tax Liability relates (to the extent not previously taken into account in determining the Assumed Tax Liability and determined as though PubCo were a corporation which earned solely the items of income, gain, deduction, loss, and/or credit allocated to such taxable periods (or portions thereof)), as reasonably determined by the Manager in good faith; provided, that (i) any adjustments by reason of Sections 734 or 743 of the Code shall not be taken into account and (ii) without duplication of amounts otherwise taken into account, any adjustment to the taxable income or liabilities of the Company allocated to PubCo under applicable Law with respect to any Tax period (or portion thereof) ending on or prior to the Tax period (or portion thereof) to which the Assumed Tax Liability relates shall be treated as taxable income allocated to PubCo in the Tax Period (or portion thereof) to which the Assumed Tax Liability relates to the extent such adjustment results in an increase in PubCo’s actual tax liability with respect to such Tax period; provided, however, that Assumed Tax Liability shall not take into account taxable income of the Company allocated to PubCo with respect to expenses of the Manager that are reimbursed by the Company in section 6.8, to the extent that such expenses are deductible by PubCo.

“Assumed Tax Rate” means, for any taxable period, the highest marginal effective rate of federal, state, local and non-U.S. income tax applicable to PubCo for such taxable period.

“beneficially own” and “beneficial owner” shall be as defined in Rule 13d-3 of the rules promulgated under the Exchange Act.

“Black-Out Period” means any “black-out” or similar period under PubCo’s policies covering trading in PubCo’s securities to which the applicable Exchanging Member is subject, which period restricts the ability of such Exchanging Member to immediately resell shares of Class A Common Stock to be delivered to such Exchanging Member in connection with an Exchange Notice.

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by applicable Law to close.

“Capital Account” means, with respect to any Member, the Capital Account maintained for such Member in accordance with Section 4.1.

“Capital Contributions” means, with respect to any Member, the amount of cash and the initial Gross Asset Value of any property (other than cash) contributed to the Company by such Member. Any reference to the Capital Contributions of a Member will include the Capital Contributions made by a predecessor holder of such Member’s Units to the extent the Capital Contribution was made in respect of Units Transferred to such Member.

“Cash Election” has the meaning given to such term in Section 3.6(d).

“Cash Election Amount” means, with respect to a particular Exchange, an amount of cash equal to the value of the shares of Class A Stock that would be received in such Exchange as of the date of receipt by the Company of the Exchange Notice with respect to such Exchange pursuant to Section 3.6 (the “Valuation Date”), decreased by any distributions received by the Exchanging Member with respect to the Common Units that are the subject of the Exchange following the date of receipt by the Company of the Exchange Notice where the record date for such distribution was after the date of receipt of such Exchange Notice. For this purpose, the value of a share of Class A Stock shall equal the greater of (a) the volume weighted average price of a share of Class A Stock for the ten trading days ending on the last trading day immediately prior to the Valuation Date and (b) the Fair Market Value of such shares as of the close of business on the last trading day immediately prior to the Valuation Date.

“Cash Election Notice” has the meaning given to such term in Section 3.6(d).

“Certificate of Conversion” has the meaning given to such term in the recitals of this Agreement.

“Certificate of Formation” has the meaning given to such term in the recitals of this Agreement.

“Change of Control Exchange Date” has the meaning given to such term in Section 3.6(j).

“Chancery Court” has the meaning given to such term in Section 11.6(b).

“Class A Stock” means, as applicable, (a) the Class A Common Stock, no par value, of PubCo or (b) following any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other Person or cash or other property that becomes payable in consideration for the Class A Stock or into which the Class A Stock is exchanged or converted as a result of such consolidation, merger, reclassification or other similar event.

“Class B Stock” means, as applicable, (a) the Class B Common Stock, no par value, of PubCo or (b) following any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other Person or cash or other property that becomes payable in consideration for the Class B Stock or into which the Class B Stock is exchanged or converted as a result of such consolidation, merger, reclassification or other similar event.

“Class C Stock” means, as applicable, (a) the Class C Common Stock, no par value, of PubCo or (b) following any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other Person or cash or other property that becomes payable in consideration for the Class C Stock or into which the Class C Stock is exchanged or converted as a result of such consolidation, merger, reclassification or other similar event.

“Code” means the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law).

“Commission” means the U.S. Securities and Exchange Commission.

“Common Unit” means a Unit having the rights and obligations specified with respect to the Common Units in this Agreement.

“Company” has the meaning given to such term in the preamble to this Agreement.

“Company Indemnitees” has the meaning given to such term in Section 6.4.

“Company Minimum Gain” has the meaning of “partnership minimum gain” set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d). It is further understood that Company Minimum Gain shall be determined in a manner consistent with the rules of Treasury Regulations Section 1.704-2(b)(2), including the requirement that if the adjusted Gross Asset Value of property subject to one or more Nonrecourse Liabilities differs from its adjusted tax basis, Company Minimum Gain shall be determined with reference to such Gross Asset Value.

“Contract” means any written or oral contract, subcontract, license, sublicense, lease, sublease, agreement, instrument, indenture, purchase order, note, bond, mortgage, debenture or other legally binding commitment, arrangement or undertaking of any nature.

“control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by Contract or otherwise.

“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such Fiscal Year, except that with respect to any property the Gross Asset Value of which 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 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 with respect to such asset shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Manager.

“DGCL” means the General Corporation Law of the State of Delaware, as amended from time to time (or any corresponding provisions of succeeding law).

“Effective Time” means the Effective Time as defined in the Transaction Agreement.

“Effective Time Capital Account Balance” means, with respect to any Member, the positive Capital Account balance of such Member as of the Effective Time, the amount or deemed value of which is set forth on Exhibit A.

“Eligible PubCo Offer Securities” has the meaning given to such term in Section 3.6(k).

“Equity Plan” means any stock or equity purchase plan, restricted stock or equity plan or other similar equity compensation plan now or hereafter adopted by PubCo or any of its Subsidiaries.

“Equity Securities” means (a) with respect to a partnership, limited liability company or similar Person, any and all units, interests, rights to purchase, warrants, options or other equivalents of, or other ownership interests in, any such Person as well as debt or equity instruments convertible, exchangeable or exercisable into any such units, interests, rights or other ownership interests and (b) with respect to a corporation, any and all shares, interests, participation or other equivalents (however designated) of capital stock, including all common stock and preferred stock, or warrants, options or other rights to acquire any of the foregoing, including any debt instrument convertible or exchangeable into any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.

“Exchange” has the meaning given to such term in Section 3.6(a).

“Exchange Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (or any corresponding provisions of succeeding law).

“Exchange Date” has the meaning given to such term in Section 3.6(f).

“Exchange Notice” has the meaning given to such term in Section 3.6(b).

“Exchange Right” has the meaning given to such term in Section 3.6(a).

“Exchanging Member” has the meaning given to such term in Section 3.6(b).

“Existing LLC Agreement” has the meaning given to such term in the recitals of this Agreement.

“Fair Market Value” means the fair market value of any property based on the amount the Company would receive in an all cash sale of such property in an arm’s-length transaction with an unaffiliated third party, with neither party having compulsion to buy or sell, consummated on the day immediately preceding the date on which the event occurred which necessitated the determination of Fair Market Value, as such amount is determined by the Manager (or if pursuant to Article X, the Winding-Up Person) in its good faith judgment using information and data reasonably pertinent thereto.

“Fiscal Year” means the fiscal year of the Company, which shall end on December 31 of each calendar year unless, for federal income tax purposes, another taxable year is required. The Company shall have the same fiscal year for federal income tax purposes and for accounting purposes.

“GAAP” means generally acceptable accounting principles at the time.

“Governmental Entity” means any nation, state or province or any municipal or other political subdivision thereof, or any agency, commission, department, board, bureau, minister, tribunal or court, whether national, state, provincial, local, foreign or multinational (to the extent that the rules, regulations or orders of such Person has the force of Law), exercising executive, legislative, judicial, taxing, regulatory or administrative functions.

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

(a)               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 of the date of such contribution;

(b)               the Gross Asset Values of all Company assets shall be adjusted to equal their respective gross Fair Market Values as of the following times: (i) the acquisition of an interest (or additional interest) in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution to the Company or in exchange for the performance of more than a de minimis amount of services to or for the benefit of the Company; (ii) the distribution by the Company to a Member of more than a de minimis amount of Company assets as consideration for an interest in the Company; (iii) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g)(1); (iv) the acquisition of an interest in the Company by any new or existing Member upon the exercise of a noncompensatory option (including the conversion of a Preferred Unit) in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(s); or (v) any other event to the extent determined by the Manager to be permitted and necessary to properly reflect Gross Asset Values in accordance with the standards set forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(q); provided, however, that adjustments pursuant to clauses (i), (ii) and (iv) above shall be made only if the Manager reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company. If any noncompensatory options are outstanding upon the occurrence of an event described in this paragraph (b)(i) through (b)(v), the Company shall adjust the Gross Asset Values of its properties in accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2);

(c)               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 such distribution;

(d)               the Gross Asset Values 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 subsection (f) in the definition of “Profits” or “Losses” below or Section 4.3(g); provided, however, that the Gross Asset Value of a Company asset shall not be adjusted pursuant to this subsection to the extent the Manager determines that an adjustment pursuant to subsection (b) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (d); and

(e)               if the Gross Asset Value of a Company asset has been determined or adjusted pursuant to subsections (a), (b) or (d) of this definition of Gross Asset Value, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits, Losses and other items allocated pursuant to Article IV.

“Imputed Underpayment Amount” has the meaning given to such term in Section 9.5(b).

“Indebtedness” means (a) all indebtedness for borrowed money (including capitalized lease obligations, sale-leaseback transactions or other similar transactions, however evidenced), (b) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar instrument, (c) notes payable and (d) lines of credit and any other agreements relating to the borrowing of money or extension of credit.

“Interest” means the entire interest of a Member in the Company, including the Units and all of such Member’s rights, powers and privileges under this Agreement and the Act.

“Joinder” means a joinder to this Agreement substantially in the form of Exhibit B to this Agreement.

“Law” means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code or order of any Governmental Entity.

“Liability” means any liability or obligation, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated and whether due or to become due, regardless of when asserted.

“Lien” means, with respect to any asset, (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 (or any financing 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.

“Liquidating Events” has the meaning given to such term in Section 10.1.

“Loss” means any and all losses, damages, claims, costs and expenses, interest, awards, judgments and penalties (including reasonable attorneys’ fees and expenses, but excluding any allocation of corporate overhead, internal legal department costs and other internal costs and expenses).

“Majority Members” means the members (which may include PubCo) holding not less than a majority of the Units then outstanding; provided, that if as of any date of determination, a majority of the Units are held by PubCo or any Affiliate controlled by PubCo, the “Majority Members” shall mean PubCo together with the Members holding at least a majority of the then outstanding Units not held by PubCo or its controlled Affiliates.

“Manager” has the meaning given to such term in Section 6.1(a).

“Member” means any Person that executes this Agreement as a Member, and any other Person admitted to the Company as an additional or substituted Member, that has not made a disposition of such Person’s entire Interest.

“Member Minimum Gain” has the meaning ascribed to “partner nonrecourse debt minimum gain” set forth in Treasury Regulations Section 1.704-2(i).

“Member Nonrecourse Debt” has the meaning of “partner nonrecourse debt” set forth in Treasury Regulations Section 1.704-2(b)(4).

“Member Nonrecourse Deductions” has the meaning of “partner nonrecourse deductions” set forth in Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

“National Securities Exchange” means an exchange registered with the Commission under the Exchange Act.

“Nonrecourse Deductions” has the meaning given to such term in Treasury Regulations
Section 1.704-2(b).

“Nonrecourse Liability” has the meaning given to such term in Treasury Regulations
Section 1.704-2(b)(3).

“Officer” means each Person designated as an officer of the Company pursuant to and in accordance with the provisions of Section 6.2, subject to any resolution of the Manager appointing such Person as an officer or relating to such appointment.

“Partnership Representative” means the “partnership representative” as defined in Code Section 6223(a) and as appointed in Section 9.4.

“Permitted Transferee” means, with respect to any Member, (a) any successor entity of such Member owned and controlled solely by the same Persons that own and control such Member prior to such Transfer; (b) with respect to Stagwell[ and Stagwell’s pooling vehicle] only, an Affiliate, general partner or limited partner of such Member or a holder, as of immediately prior to the closing of the Transactions, of a Stagwell Incentive Award (as defined in the Transaction Agreement) or other equity interest in a Stagwell Subject Entity, (c) a trust established by or for the benefit of a Member of which only such Member and his or her immediate family members are beneficiaries; (d) any Person established for the benefit of, and beneficially owned solely by, an entity Member or the sole individual direct or indirect owner of an entity Member; and (e) upon an individual Member’s death, an executor, administrator or beneficiary of the estate of the deceased Member.

“Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

“Plan Asset Regulations” means the regulations issued by the U.S. Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the Code of Federal Regulations, or any successor regulations as the same may be amended from time to time.

“Preferred Unit” has the meaning given to such term in Section 3.7.

“Prime Rate” means, on any date of determination, a rate per annum equal to the rate of interest most recently published by The Wall Street Journal as the “prime rate” at large U.S. money center banks.

“Proceeding” has the meaning given to such term in Section 6.4.

“Profits” or “Losses” means, for each Fiscal Year, an amount equal to the Company’s taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):

(a)               any income or gain of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss;

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

(c)               in the event the Gross Asset Value of any Company asset is adjusted pursuant to subsection (b) or (c) or the definition of Gross Asset Value above, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the Company asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the Company asset) from the disposition of such asset and shall, except to the extent allocated pursuant to Section 4.3, be taken into account for purposes of computing Profits or Losses;

(d)               gain or loss resulting from any disposition of Company assets with respect to which gain or loss is recognized for federal income tax purposes shall be computed with reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value;

(e)               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;

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

(g)               any items of income, gain, loss or deduction which are specifically allocated pursuant to the provisions of Section 4.3 shall not be taken into account in computing Profits or Losses for such Fiscal Year, but such items available to be specially allocated pursuant to Section 4.3 will be determined by applying rules analogous to those set forth in subparagraphs (a) through (f) above.

“PubCo” has the meaning given to such term in the preamble to this Agreement.

“PubCo Change of Control” means (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than Stagwell, [Stagwell FAF] and one or more of their respective Permitted Transferees, becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all Equity Securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 40% or more of the Equity Securities of PubCo entitled to vote for members of the board of directors or equivalent governing body of PubCo on a fully-diluted basis, (and taking into account all such Equity Securities that such person or group has the right to acquire pursuant to any option right); (b) PubCo shall cease to control the Company; (c) PubCo, Stagwell, [Stagwell FAF] and any or all of their Permitted Transferees, individually or collectively, shall cease to own, directly or indirectly, free and clear of all Liens or other encumbrances 65% of the outstanding voting Equity Securities of the Company; (d) the occupation at any time of a majority of the seats (other than vacant seats) on the board of directors of PubCo by Persons who were neither (i) directors of PubCo as of immediately following the Closing (as defined in the Transaction Agreement) nor (ii) nominated, appointed, or approved by the board of directors of PubCo; (e) the acquisition of direct or indirect control of the Company by any Person or group other than PubCo or Stagwell, [Stagwell FAF] and one or more of their Permitted Transferees; or (f) the Company shall cease to own, directly or indirectly, free and clear of all Liens or other encumbrances, the outstanding voting Equity Securities of the Guarantors (as defined in the Term Loan Credit Agreement) owned at the time of the Closing (except as otherwise permitted herein), in each case, on a fully diluted basis (or, in the case of any Guarantor acquired after the Closing, at the time of the acquisition of such Guarantor).

“PubCo Common Stock” means all classes and series of common stock of PubCo, including the Class A Stock and the Class B Stock.

“PubCo Offer” has the meaning given to such term in Section 3.6(k).

“Reclassification Event” means any of the following: (a) any reclassification or recapitalization of PubCo Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination or any transaction subject to Section 3.4(d)), (b) any merger, consolidation or other combination involving PubCo, or (c) any sale, conveyance, lease, or other disposal of all or substantially all the properties and assets of PubCo to any other Person, in each of clauses (a), (b) or (c), as a result of which holders of PubCo Common Stock shall be entitled to receive cash, securities or other property for their shares of PubCo Common Stock.

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of [•], by and among PubCo, Stagwell and the other Holders party thereto.

“Regulatory Allocations” is defined in Section 4.3(h).

“Retraction Notice” has the meaning given to such term in Section 3.6(d).

“Securities Act” means the Securities Act of 1933, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (or any corresponding provisions of succeeding law).

“Series 4 Certificate of Designations” means the Certificate of Designations of PubCo, filed with the Secretary of State of the State of Delaware on [•], as the same may be amended, restated, modified or supplemented from time to time in accordance with its terms.

“Series 4 Preferred Unit” a Unit having the rights and obligations specified with respect to the Series 4 Preferred Units in this Agreement.

“Series 4 Preferred Stock” means the Series 4 Convertible Preferred Stock of PubCo, the rights and preferences of which are set forth in the Series 4 Certificate of Designations.

“Series 4 Preferred Stock Liquidation Payment” means the amount to be paid by PubCo pursuant to the Series 4 Certificate of Designations in respect of the Series 4 Preferred Stock with respect to any liquidation, dissolution or winding up of the affairs of PubCo.

“Series 6 Certificate of Designations” means the Certificate of Designations of PubCo, filed with the Secretary of State of the State of Delaware on [•], as the same may be amended, restated, modified or supplemented from time to time in accordance with its terms.

“Series 6 Preferred Stock” means the Series 6 Convertible Preferred Stock of PubCo, the rights and preferences of which are set forth in the Series 6 Certificate of Designations.

“Series 6 Preferred Unit” means a Unit having the rights and obligations specified with respect to the Series 6 Preferred Units in this Agreement.

“Series 6 Preferred Stock Liquidation Payment” means the amount to be paid by PubCo pursuant to the Series 6 Certificate of Designations in respect of the Series 6 Preferred Stock with respect to any liquidation, dissolution or winding up of the affairs of PubCo.

“Stagwell” has the meaning given to such terms in the preamble to this Agreement.

“Subsidiary” means, with respect to any Person, another Person, an amount of the voting securities or other voting ownership interests of which is sufficient, together with any contractual rights, to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, 50 percent or more of the equity interests of which) is owned directly or indirectly by such first Person.

“Tax Distribution Date” means any date that is two Business Days prior to the date on which estimated federal income tax payments are required to be made by calendar year corporate taxpayers and the due date for federal income tax returns of corporate calendar year taxpayers (without regard to extensions).

“Term Loan Credit Agreement” means the Credit Agreement, dated as of November 13, 2020, by and among Stagwell Marketing Group LLC, the other loan parties party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.

“Transaction Agreement” has the meaning given to such term in the recitals of this Agreement.

“Transaction Agreement Parties” has the meaning given to such term in the recitals of this Agreement.

“Transfer” means any voluntary or involuntary, direct or indirect (whether through a change of control of the Transferor or any Person that controls the Transferor, the issuance or transfer of Equity Securities of the Transferor, by operation of Law or otherwise), transfer, sale, pledge or hypothecation or other disposition. The terms “Transferee,” “Transferor,” “Transferred,” and other forms of the word “Transfer” shall have the correlative meanings.

“Transfer Agent” has the meaning given to such term in Section 3.6(b).

“Treasury Regulations” means the regulations promulgated under the Code by the United States Department of the Treasury.

“Underwritten Offering” has the meaning given to such term in the Registration Rights Agreement.

“Unit” means a unit representing a fractional part of the Interests of a Member and includes a Common Unit.

“Unit Register” has the meaning given to such term in Section 3.1(c).

“Winding-Up Person” has the meaning given to such term in Section 10.2(a).

“Withholding Payment” has the meaning given to such term in Section 9.5(b).

Section 1.2.          Interpretive Provisions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)               the terms defined in Section 1.1 have the meanings assigned to them in Section 1.1 and are applicable to the singular as well as the plural forms of such terms;

(b)               all accounting terms not otherwise defined herein have the meanings assigned under GAAP;

(c)               all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars;

(d)               when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;

(e)               whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”;

(f)                “or” is not exclusive;

(g)               pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms; and

(h)               the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement.

Article II
ORGANIZATION OF THE LIMITED LIABILITY COMPANY

Section 2.1.          Formation. The Company has been formed as a limited liability company pursuant to the provisions of the Act by the filing of the Certificate of Conversion and the Certificate of Formation in accordance with the Act.

Section 2.2.          Filings. The Members shall execute such further documents (including amendments to the Certificate of Formation) and take such further action as is appropriate to comply with the requirements of Law for the formation or operation of a limited liability company in Delaware and in all states and other jurisdictions where the Company may conduct its business.

Section 2.3.          Amended and Restated Limited Liability Company Agreement. The Company, the Manager and the Members hereby execute this Agreement for the purpose of continuing the affairs of the Company and the conduct of its business in accordance with the provisions of the Act. The Company, the Manager and the Members hereby agree that during the term of the Company set forth in Section 2.8, the rights and obligations of the Members and the Manager with respect to the Company will be determined in accordance with the terms and conditions of this Agreement and the Act. On any matter on which this Agreement is silent, the Act shall control. No provision of this Agreement shall be in violation of the Act and, to the extent any provision of this Agreement is in violation of the Act, such provision shall be void and of no effect to the extent of such violation without affecting the validity of the other provisions of this Agreement. Where the Act provides that a provision of the Act shall apply “unless otherwise provided in a limited liability company agreement” or words of similar effect, the provisions of this Agreement shall in each instance control. It is expressly agreed that this Agreement does not provide for contractual appraisal rights pursuant Section 18-210 of the Act.

Section 2.4.          Name. The name of the Company is “[MIDAS OPCO HOLDINGS LLC]” and all business of the Company shall be conducted in such name or, in the discretion of the Manager, under any other name.

Section 2.5.          Registered Office; Registered Agent. The location of the registered office of the Company in the State of Delaware is [•]. The registered agent of the Company for service of process at such address is [•]. The Manager may from time to time change the Company’s registered office and registered agent in the State of Delaware.

Section 2.6.          Principal Place of Business. The principal place of business of the Company shall be located in such place as is determined by the Manager from time to time.

Section 2.7.          Purpose; Powers. The nature of the business or purposes to be conducted or promoted by the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act. The Company shall have the power and authority to take any and all actions and engage in any and all activities necessary, appropriate, desirable, advisable, ancillary or incidental to the accomplishment of the foregoing purpose.

Section 2.8.          Term. The term of the Company commenced on the date of filing of the Certificate of Formation with the office of the Secretary of State of the State of Delaware in accordance with the Act and shall continue indefinitely. The Company may be dissolved and its affairs wound up only in accordance with Article X.

Section 2.9.          Tax Treatment. It is the intent of the Members that the Company be operated in a manner consistent with its treatment as a partnership for federal and applicable state income tax purposes, and that each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment. None of the Company, the Manager or any Member shall (a) file or cause the Company to file any entity classification election to treat the Company as an association taxable as a corporation for U.S. federal tax purposes, nor (b) shall file any tax returns or otherwise take a tax or financial reporting position in a manner inconsistent with the treatment of the Company as a partnership for federal and applicable state income tax purposes unless otherwise required after a final determination (within the meaning of Section 1313(a) of the Code).

Article III
UNITS; CAPITAL CONTRIBUTIONS; MEMBERS

Section 3.1.          Authorized Units; General Provisions With Respect to Units.

(a)               Interests in the Company shall be represented by Units, or such other Equity Securities of the Company, in each case as the Manager may establish in its discretion in accordance with the terms and subject to the restrictions hereof. Subject to the provisions of this Agreement, the Company shall be authorized to issue from time to time such number of Units and such other Equity Securities as the Manager shall determine in accordance with Section 3.4. Each authorized Unit may be issued pursuant to such agreements and in exchange for such Capital Contributions or other consideration as the Manager shall approve, including pursuant to options and warrants. The Company may reissue any Units that have been repurchased or acquired by the Company. Exhibit A sets forth the Members and the number and class of Units held by each of them at the Effective Time.

(b)               Initially, none of the Units will be represented by certificates. If the Manager determines that it is in the interest of the Company to issue certificates representing the Units, certificates will be issued and the Units will be represented by those certificates, and this Agreement shall be amended as necessary or desirable to reflect the issuance of certificated Units for purposes of the Uniform Commercial Code. Nothing contained in this Section 3.1(b) shall be deemed to authorize or permit any Member to Transfer its Units except as otherwise permitted under this Agreement.

(c)               The Company shall maintain as part of its books and records a register (the “Unit Register”) with respect to all Units issued by the Company. The Unit Register shall set forth the name of each Member and the number of Units held by each Member. All Transfers of Units validly made in accordance with Article VIII shall be recorded in the Unit Register. The names of the Members and the number of Units held by each Member as they appear in the Unit Register shall be the official record of the Members for all purposes. Absent manifest error in the Unit Register, the Company shall be entitled to rely exclusively on record ownership of Units as shown in the Unit Register for all purposes and shall be entitled to recognize the registered holder of Units as shown in the Unit Register as the holder of record of such Units and the Member with respect to the Interest represented thereby for all purposes; provided, however, that the Company shall treat the record owner of any certificate representing Units as the holder of the Units evidenced thereby unless and until such Units have been Transferred in accordance with this Agreement. At the Effective Time, Exhibit A shall constitute the Unit Register. From and after the Effective Time, subject to the foregoing provisions of this Section 3.1(c), the Company may maintain the Unit Register in such form as the Manager shall determine from time to time, and any changes in the information set forth in the Unit Register shall not require any amendment or other change to Exhibit A.

Section 3.2.          Voting Rights. No Member has any voting rights except with respect to those matters specifically reserved for a Member vote under the Act and for matters expressly requiring the vote or approval of Members under this Agreement. Except as otherwise required by the Act, each Unit will entitle the holder thereof to one vote on all matters to be voted on by the Members; provided, that notwithstanding anything to the contrary herein, the Common Units held by Stagwell or any Transferee thereof shall have no voting rights except as expressly set forth in this Agreement. Except as otherwise expressly provided in this Agreement, the holders of Units having voting rights will vote together as a single class on all matters to be approved by the Members.

Section 3.3.          Capital Contributions. At the Effective Time, after giving effect to the Transactions, each Member as of the Effective Time shall have made or shall be deemed to have made Capital Contributions equal to such Member’s Effective Time Capital Account Balance set forth on Exhibit A. Except for PubCo as provided in Section 3.4 and Section 3.6 (or, for the avoidance of doubt, as required by Section 8.03(c) of the Transaction Agreement), no Member shall be required to make additional Capital Contributions. Furthermore, except in connection with issuances of Equity Securities by PubCo as provided herein, PubCo shall not issue, sell or Transfer any of its Equity Securities, and PubCo shall not issue, sell or Transfer any of its Equity Securities to any Person other than PubCo.

Section 3.4.          Issuance of Additional Units or Interests; Exchanges and Repurchases; Recapitalizations.

(a)               From and after the Effective Time to the extent required by Section 3.4(b), the Manager may authorize and create, and cause the Company to issue, additional Units or other Equity Securities in the Company (including creating preferred interests or other classes or series of securities having such rights, preferences and privileges as determined by the Manager) solely to the extent they are in the aggregate substantially equivalent to a class of Equity Securities of PubCo; provided, that following the Effective Time, in each case the Company shall not issue Equity Securities in the Company to any Person unless such Person shall have executed a Joinder and all other documents, agreements or instruments deemed necessary or desirable in the discretion of the Manager.

(b)               If at any time after the Effective Time PubCo issues a share of its Class A Stock or any other Equity Security of PubCo (other than shares of Class C Stock), (i) the Company shall issue to PubCo one Common Unit (if PubCo issues a share of Class A Stock), or such other Equity Security of the Company (if PubCo issues Equity Securities other than Class A Stock) corresponding to the Equity Securities issued by PubCo, and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo and (ii) the net proceeds received by PubCo with respect to the corresponding share of Class A Stock or other Equity Security, if any, shall be concurrently transferred to the Company by PubCo; provided, however, that if PubCo issues any shares of Class A Stock in order to purchase or fund the purchase from a Member of a number of Common Units (and correspondingly cancels shares of Class C Stock) equal to the number of shares of Class A Stock so issued, then the Company shall not issue any new Common Units in connection therewith and PubCo shall not be required to transfer such net proceeds to the Company. Notwithstanding the foregoing, this Section 3.4(b) shall not apply to (i) the issuance and distribution to holders of shares of PubCo Common Stock of rights to purchase Equity Securities of PubCo under a “poison pill” or similar shareholders rights plan (it being understood that upon exchange of Common Units for Class A Stock, such Class A Stock will be issued together with a corresponding right) or (ii) the issuance under the Equity Plans of any warrants, options or other rights to acquire Equity Securities of PubCo or rights or property that may be converted into or settled in Equity Securities of PubCo, but shall in the foregoing cases apply to the issuances of Equity Securities of PubCo in connection with the exercise or settlement of such rights, warrants, options or other rights or property. Except pursuant to Section 3.6, (x) the Company may not issue any additional Units to PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary issues or sells an equal number of shares of PubCo’s Class A Stock to another Person, and (y) the Company may not issue any other Equity Securities of the Company to PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary issues or sells, to another Person, an equal number of shares of a new class or series of Equity Securities of PubCo or such Subsidiary with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Company. Notwithstanding anything contained herein to the contrary, the Company shall only be able to issue additional Units or other Equity Interests in the Company to Persons and on the terms and conditions provided for in Section 3.1, Section 3.3, and Section 3.4.

(c)               Neither PubCo nor any of its Subsidiaries may redeem, repurchase or otherwise acquire (i) any shares of Class A Stock (including upon forfeiture of any unvested shares of Class A Stock) unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from PubCo or such Subsidiary an equal number of Common Units for the same price per security or (ii) any other Equity Securities of PubCo unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from PubCo or such Subsidiary an equal number of Equity Securities of the Company of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo for the same price per security. Except pursuant to Section 3.6, the Company may not redeem, repurchase or otherwise acquire (A) any Common Units from PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary redeems, repurchases or otherwise acquires an equal number of shares of Class A Stock for the same price per security from holders thereof, or (B) any other Equity Securities of the Company from PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary redeems, repurchases or otherwise acquires for the same price per security an equal number of Equity Securities of PubCo of a corresponding class or series with substantially the same rights to dividends and distributions (including distribution upon liquidation) and other economic rights as those of such Equity Securities of PubCo. Notwithstanding the foregoing, to the extent that any consideration payable by PubCo in connection with the redemption or repurchase of any shares of Class A Stock or other Equity Securities of PubCo or any of its Subsidiaries consists (in whole or in part) of shares of Class A Stock or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless exercise of an option or warrant), then the redemption or repurchase of the corresponding Common Units or other Equity Securities of the Company shall be effectuated in an equivalent manner.

(d)               The Company shall not in any manner effect any subdivision (by any stock split, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, reclassification, recapitalization or otherwise) of the outstanding Units unless accompanied by an identical subdivision or combination, as applicable, of the outstanding PubCo Common Stock, with corresponding changes made with respect to any other exchangeable or convertible securities. PubCo shall not in any manner effect any subdivision (by any stock split, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, reclassification, recapitalization or otherwise) of the outstanding PubCo Common Stock unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

Section 3.5.          Other Matters.

(a)               No Member shall be entitled to demand or receive a return on or of its Capital Contributions or withdraw from the Company, except as expressly provided in this Agreement. Under circumstances requiring a return of any Capital Contributions, no Member has the right to receive property other than cash.

(b)               No Member shall receive any interest, salary, compensation, draw or reimbursement with respect to its Capital Contributions or its Capital Account, or for services rendered or expenses incurred on behalf of the Company or otherwise in its capacity as a Member, except as otherwise provided in or contemplated by this Agreement.

(c)               The Liability of each Member shall be limited as set forth in the Act and other applicable Law and, except as expressly set forth in this Agreement or required by Law, no Member (or any of its Affiliates) shall be personally liable, whether to the Company, to any of the other Members, to the creditors of the Company, or to any other third party, for any debt or Liability of the Company, whether arising in Contract, tort or otherwise, solely by reason of being a Member of the Company.

(d)               Except as otherwise required by the Act, a Member shall not be required to restore a deficit balance in its Capital Account, to lend any funds to the Company or to make any additional contributions or payments to the Company.

(e)               The Company shall not be obligated for the repayment of any Capital Contributions of any Member.

Section 3.6.          Exchange Right of Members.

(a)               Each of the Members, other than PubCo, Merger Sub 3 and any other wholly owned subsidiary of PubCo that becomes a Member following the date hereof, shall be entitled to exchange with the Company (an “Exchange”), at any time and from time to time, any or all of such Member’s Common Units (together with the transfer and surrender to PubCo of an equal number of shares of Class C Stock) for an equivalent number (subject to adjustment as provided in Section 3.6(g)) of shares of Class A Stock or, at the Company’s election validly made in accordance with Section 3.6(d), cash equal to the Cash Election Amount calculated with respect to such Exchange (the “Exchange Right”). For the avoidance of doubt, upon the Exchange of all Common Units held by a Member, such Member shall cease to be a Member.

(b)                Notwithstanding Section 3.6(a), no Member may exercise its Exchange Right prior to the date that is six (6) months after the date of this Agreement.

(c)               In order to exercise the Exchange Right, a Member (the “Exchanging Member”) shall provide written notice (the “Exchange Notice”) to the Company and PubCo, stating the number of Common Units (together with the transfer and surrender of an equal number of shares of Class C Stock) the Exchanging Member elects to have the Company redeem. If the Common Units to be redeemed (along with the shares of Class C Stock to be transferred and surrendered) are represented by a certificate or certificates, the Exchanging Member shall also present and surrender the certificate or certificates representing such Common Units and shares of Class C Stock during normal business hours at the principal executive offices of the Company, or if any agent for the registration or transfer of Class A Stock is then duly appointed and acting (the “Transfer Agent”), at the office of the Transfer Agent with respect to such Class A Stock. If required by PubCo, any certificate for Common Units and shares of Class C Stock surrendered in connection with an Exchange shall be accompanied by instruments of transfer, in form reasonably satisfactory to PubCo and the Transfer Agent, duly executed by the Exchanging Member or the Exchanging Member’s duly authorized representative. An Exchange Notice may specify that the Exchange is to be contingent (including as to timing) upon the consummation of a purchase by another Person (whether in a tender or exchange offer, an Underwritten Offering or otherwise) of the shares of Class A Stock for which the Common Units and shares of Class C Stock are redeemable, or contingent (including as to timing) upon the closing of an announced merger, consolidation or other transaction or event in which the shares of Class A Stock would be exchanged or converted or become exchangeable for or convertible into cash or other securities or property; provided that the foregoing shall not apply to any Exchange for which the Company has made a valid Cash Election.

(d)               Upon receipt of an Exchange Notice, the Company shall be entitled to elect (a “Cash Election”) to settle the Exchange by delivery to the Exchanging Member, in lieu of the applicable number of shares of Class A Stock that would be received in such Exchange, an amount of cash equal to the Cash Election Amount for such Exchange; provided, however, that notwithstanding anything to the contrary in this Agreement, the Company shall not be entitled to make a Cash Election if such Cash Election would reasonably be expected to (i) require the Company or any of its Subsidiaries to incur Indebtedness or (ii) prevent the Company of any of its Subsidiaries from repaying any amounts due or intended to be paid in connection with outstanding Indebtedness as previously contemplated by the board of directors of PubCo, in either case, in the twelve (12) months following receipt of the relevant Exchange Notice. In order to make a Cash Election with respect to an Exchange, the Company must provide written notice (the “Cash Election Notice”) of such election to the Exchanging Member prior to 5:00 pm, New York time, on the first Business Day after the date on which the Exchange Notice shall have been received by the Company and PubCo. If the Company fails to provide a Cash Election Notice prior to such time, it shall not be entitled to make a Cash Election with respect to such Exchange. The Exchanging Member may retract its Exchange Notice by giving written notice (the “Retraction Notice”) to the Company (with a copy to PubCo) at any time prior to 5:00 pm, New York time, on the first Business Day after delivery of the Cash Election Notice. The timely delivery of a Retraction Notice shall terminate the Exchanging Member’s, the Company’s and PubCo’s rights and obligation under this Section 3.6 arising from the retracted Exchange Notice.

(e)               Notwithstanding anything to the contrary in Section 3.6(c) or 3.6(d), in the event the Company fails to timely make a valid Cash Election in connection with an Exchange, an Exchanging Member shall be entitled, at any time prior to the consummation of the Exchange, to revoke its Exchange Notice or delay the consummation of an Exchange if any of the following conditions exists: (i) any registration statement pursuant to which the resale of the Class A Stock to be registered for such Exchanging Member at or immediately following the consummation of the Exchange shall have ceased to be effective pursuant to any action or inaction by the Commission or no such resale registration statement has yet become effective; (ii) PubCo shall have failed to cause any related prospectus to be supplemented by any required prospectus supplement necessary to effect such Exchange; (iii) PubCo shall have exercised its right to defer, delay or suspend the filing or effectiveness of the registration statement and such deferral, delay or suspension shall affect the ability of such Exchanging Member to have the resale of its Class A Stock registered at or immediately following the consummation of the Exchange; (iv) PubCo shall have disclosed to such Exchanging Member (after receiving consent of such Exchanging Member) or such Exchanging Member otherwise receives as a result of any officer or director of such Exchanging Member also acting as an officer or director of PubCo any material non-public information concerning PubCo or its Subsidiaries, taken as a whole, the receipt of which results in the Exchanging Member being prohibited or restricted from selling Class A Stock at or immediately following the Exchange without disclosure of such information (and PubCo does not permit disclosure); (v) any stop order relating to the registration statement pursuant to which the Class A Stock was to be registered by such Exchanging Member at or immediately following the Exchange shall have been issued by the Commission; (vi) there shall be in effect an injunction, a restraining order or decree of any nature of any Governmental Entity that restrains or prohibits the Exchange; (vii) PubCo shall have failed to comply in all material respects with its obligations under the Registration Rights Agreement, and such failure shall have affected the ability of such Exchanging Member to consummate the resale of the Class A Stock to be received upon such Exchange pursuant to an effective registration statement; or (viii) the Exchange Date would occur three (3) Business Days or less prior to, or during, a Black-Out Period. If an Exchanging Member delays the consummation of an Exchange pursuant to this Section 3.6(e), (A) the Exchange Date shall occur on the third Business Day following the date on which the conditions giving rise to such delay cease to exist (or such earlier date as PubCo, the Company and Exchanging Member may mutually agree in writing) and (B) notwithstanding anything to the contrary in Section 3.6(d), the Exchanging Member may retract its Exchange Notice by giving a Retraction Notice to the Company (with a copy to PubCo) at any time prior to 5:00 pm, New York time, on the first Business Day following the date on which the conditions giving rise to such delay cease to exist.

(f)                If the Company has not made a valid Cash Election, then as promptly as practicable after the receipt of the Exchange Notice and the surrender to the Company of the certificate or certificates, if any, representing such Common Units and shares of Class C Stock (but in any event by the Exchange Date, as defined below), PubCo shall issue and contribute to the Company, and the Company shall deliver to the Exchanging Member, or on the Exchanging Member’s written order, the number of shares of Class A Stock issuable upon the Exchange (in book-entry or certificated form, as determined by PubCo, and with such legends as may be required in accordance with applicable Law), and the Company shall deliver such surrendered Common Units and shares of Class C Stock to PubCo in exchange for no additional consideration. If the Company has made a valid Cash Election, then as promptly as practicable after the receipt of the Exchange Notice (but in no event more than two (2) Business Days after receipt of the Exchange Notice), PubCo shall contribute to the Company the cash consideration the Exchanging Member is entitled to receive in the Exchange and, upon surrender to the Company of the certificate or certificates, if any, representing such Common Units and shares of Class C Stock, the Company shall deliver to the Exchanging Member as directed by the Exchanging Member by wire transfer of immediately available funds the Cash Election Amount payable upon the Exchange, and the Company shall deliver such surrendered Common Units and shares of Class C Stock to PubCo for no additional consideration. Each Exchange shall be deemed to have been effected on (i) the Business Day after the date on which the Exchange Notice shall have been received by the Company, PubCo or the Transfer Agent, as applicable (subject to receipt by the Company, PubCo or the Transfer Agent, as applicable, within three Business Days thereafter of any required instruments of transfer as aforesaid) if the Company has not made a valid Cash Election with respect to such Exchange or (y) if the Company has made a valid Cash Election with respect to such Exchange, the first Business Day on which the Company has available funds to pay the Cash Election Amount (but in no event more than two (2) Business Days after receipt of the Exchange Notice), or (ii) such later date specified in or pursuant to the Exchange Notice (such date identified in clause (i) or (ii), as applicable, the “Exchange Date”). If the Company has not made a valid Cash Election, and the Person or Persons in whose name or the shares of Class A Stock shall be issuable upon such Exchange as aforesaid shall be deemed to have become, on the Exchange Date, the holder or holders of record of the shares represented thereby. Notwithstanding anything herein to the contrary and in addition to the rights set forth in Section 3.6(d), unless the Company has made a valid Cash Election (and the Exchanging Member has failed to timely deliver a Retraction Notice in accordance with Section 3.6(d)), any Exchanging Member may retract or amend an Exchange Notice, in whole or in part, prior to the effectiveness of the applicable Exchange, at any time prior to 5:00 p.m., New York, New York time, on the Business Day immediately preceding the Exchange Date (or any such later time as may be required by applicable Law) by delivery of a written notice of retraction to the Company (with a copy to PubCo), specifying (1) the numbers of the withdrawn Common Units and shares of Class B Stock (and the applicable certificate numbers therefor, if certificated), (2) if any, the number of Common Units and shares of Class C Stock as to which the Exchange Notice remains in effect and (3) if the Exchanging Member so determines, a new Exchange Date or any other new or revised information permitted in an Exchange Notice.

(g)               If (i) there is any reclassification, reorganization, recapitalization or other similar transaction pursuant to which the shares of Class A Stock are converted or changed into another security, securities or other property, or (ii) PubCo shall, by dividend or otherwise, distribute to all holders of the shares of Class A Stock evidences of its Indebtedness or assets, including securities (including shares of Class A Stock and any rights, options or warrants to all holders of the shares of Class A Stock to subscribe for or to purchase or to otherwise acquire shares of Class A Stock, or other securities or rights convertible into, exchangeable for or exercisable for shares of Class A Stock) but excluding any cash dividend or distribution as well as any such distribution of Indebtedness or assets received by PubCo from the Company in respect of the Units, then upon any subsequent Exchange, each Member shall be entitled to receive the amount of such security, securities or other property that such Member would have received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization, other similar transaction dividend or other distribution, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the shares of Class A Stock are converted or changed into another security, securities or other property, or any dividend or distribution (other than an excluded dividend or distribution, as described above), this Section 3.6 shall continue to be applicable, mutatis mutandis, with respect to such security or other property.

(h)               PubCo shall at all times keep authorized and available, solely for the purpose of issuance upon an Exchange, such number of shares of Class A Stock that shall be issuable upon the Exchange of all outstanding Common Units and shares of Class C Stock; provided, that nothing contained herein shall be construed to preclude PubCo from satisfying its obligations with respect of an Exchange by delivery of shares of Class A Stock that are held in the treasury of PubCo. PubCo covenants that all shares of Class A Stock that shall be issued upon an Exchange shall, upon issuance thereof, be validly issued, fully paid and non-assessable. In addition, for so long as the shares of Class A Stock are listed on a National Securities Exchange, PubCo shall use its reasonable best efforts to cause all shares of Class A Stock issued upon an Exchange to be listed on such National Securities Exchange at the time of such issuance.

(i)                 Unless otherwise required by applicable Law, each Exchange shall be treated for federal (and applicable state and local) income tax purposes as an exchange with PubCo of the Exchanging Member’s Common Units for shares of Class A Stock or cash, as applicable, for purposes of Section 743 and other applicable Sections of the Code. The issuance of shares of Class A Stock upon an Exchange shall be made without charge to the Exchanging Member for any stamp or other similar tax in respect of such issuance; provided, however, that if any such shares are to be issued in a name other than that of the Exchanging Member, then the Person or Persons in whose name the shares are to be issued shall pay to PubCo the amount of any tax that may be payable in respect of any transfer involved in such issuance or shall establish to the satisfaction of PubCo that such tax has been paid or is not payable.

(j)                 In connection with a PubCo Change of Control, PubCo shall have the right to require each Member (other than PubCo, Merger Sub 3 and any other wholly owned subsidiary of PubCo that becomes a Member following the date hereof) to effect an Exchange of all but not less than all of such Member’s Common Units and cancel a corresponding number of such Member’s shares of Class C Stock in exchange for an equal number of newly issued shares of Class A Common Stock. Any Exchange pursuant to this Section 3.6(j) shall be effective immediately prior to the consummation of the PubCo Change of Control (and, for the avoidance of doubt, shall not be effective if such PubCo Change of Control is not consummated) (the date of such effectiveness, the “Change of Control Exchange Date”). From and after the Change of Control Exchange Date, (i) the Common Units and shares of Class C Stock subject to such Exchange shall be deemed to have been transferred to PubCo on the Change of Control Exchange Date and (ii) such Member shall cease to have any rights with respect to such Common Units and shares of Class C Stock subject to such Exchange (other than the right to receive shares of Class A Common Stock pursuant to such Exchange). PubCo shall provide written notice of an expected PubCo Change of Control transaction to all Members within the earlier of (x) five (5) Business Days following the execution of the definitive agreement with respect to such PubCo Change of Control and (y) ten (10) Business Days before the proposed date upon which the contemplated PubCo Change of Control is to be effected, indicating in such notice such information as may reasonably describe the PubCo Change of Control transaction, subject to applicable Law, including the date of execution of such definitive agreement or such proposed effective date, as applicable, the amount and type of consideration to be paid for shares of Class A Stock in the PubCo Change of Control, and any election with respect to types of consideration that a holder of shares of Class A Stock, as applicable, shall be entitled to make in connection with such PubCo Change of Control. Following the delivery of such notice and on or prior to the Change of Control Exchange Date, the Members shall take all actions reasonably requested by PubCo to effect such Exchange, including taking any action and delivering any document required pursuant to Section 3.6(c) to effect such Exchange.

(k)               In the event that a tender offer, share exchange offer, issuer bid, take-over bid, merger, recapitalization or similar transaction with respect to shares of Class A Stock (a “PubCo Offer”) is proposed by PubCo or is proposed to PubCo or its stockholders and approved by the board of directors of PubCo or is otherwise effected or to be effected with the consent or approval of the board of directors of PubCo, each Member (other than PubCo, Merger Sub 3 and any other wholly owned subsidiary of PubCo that becomes a Member following the date hereof) shall be permitted to participate in such PubCo Offer by delivery of a contingent Exchange Notice in accordance with the last sentence of Section 3.6(c) with respect to its Common Units and shares of Class C Stock (other than with respect to any Common Units or shares of Class C Stock to which the Company exercised its right to require any such Member to effect an Exchange pursuant to Section 3.6(i) in connection with a PubCo Change of Control) (the “Eligible PubCo Offer Securities”). In the case of a PubCo Offer proposed by PubCo, PubCo will use its reasonable best efforts expeditiously and in good faith to take all such actions and do all such things as are necessary or desirable to enable and permit the Members (other than PubCo, Merger Sub 3 and any other wholly owned subsidiary of PubCo that becomes a Member following the date hereof) to participate in such PubCo Offer with respect to such Eligible PubCo Offer Securities to the same extent or on an economically equivalent basis as the holders of shares of PubCo without discrimination; provided, that without limiting the generality of this sentence, PubCo will use its reasonable best efforts expeditiously and in good faith to ensure that such Members may participate in each such PubCo Offer with respect to such Eligible PubCo Offer Securities without being required to cause the Exchange of Common Units and cancellation of shares of Class C Stock (or, if so required, to ensure that any such Exchange shall be effective only upon, and shall be conditional upon, the closing of such PubCo Offer and only to the extent necessary to tender or deposit to PubCo Offer in accordance with the last sentence of Section 3.6(c), or, as applicable, to the extent necessary to exchange the Eligible PubCo Offer Securities being repurchased).

(l)                 No Exchange shall impair the right of the Exchanging Member to receive any distributions payable on the Common Units so redeemed in respect of a record date that occurs prior to the Exchange Date for such Exchange. For the avoidance of doubt, no Exchanging Member, or a Person designated by an Exchanging Member to receive shares of Class A Stock, shall be entitled to receive, with respect to the same fiscal quarter, distributions or dividends both on Common Units redeemed from such Exchanging Member and on shares of Class A Stock received by such Exchanging Member, or other Person so designated, if applicable, in such Exchange, unless the Company makes more than one distribution during any given fiscal quarter.

Section 3.7.          Rights of the Preferred Units. The Company intends that (x) the rights, preferences and privileges of the Series 4 Preferred Units issued to PubCo, subject to Section 5.2(a), mirror the rights, preferences and privileges of the Series 4 Preferred Stock issued by PubCo, and that at all times the ratio between the number of outstanding Series 4 Preferred Units and the number of outstanding shares of Series 4 Preferred Stock be maintained at 1:1, and (y) the rights, preferences and privileges of the Series 6 Preferred Units issued to PubCo, subject to Section 5.2(a), mirror the rights, preferences and privileges of the Series 6 Preferred Stock issued by PubCo, and that at all times the ratio between the number of outstanding Series 6 Preferred Units and the number of outstanding shares of Series 6 Preferred Stock be maintained at 1:1. Accordingly, the terms and provisions of this Section 3.7 shall be construed in accordance with such intent, and (x) to the extent there is a conflict between the rights, preferences and privileges of the Series 4 Preferred Units under this Agreement and the rights, preferences and privileges of the Series 4 Preferred Stock under the Series 4 Certificate of Designations, the terms of the Series 4 Certificate of Designations shall control, and (y) to the extent there is a conflict between the rights, preferences and privileges of the Series 6 Preferred Units under this Agreement and the rights, preferences and privileges of the Series 6 Preferred Stock under the Series 6 Certificate of Designations, the terms of the Series 6 Certificate of Designations shall control. Subject to the foregoing, the Series 4 Preferred Units and the Series 6 Preferred Units (collectively, the “Preferred Units”) shall have the following rights, preferences and privileges and shall be subject to the following duties and obligations:

(a)               Dividends or Other Distributions.

(i)                 Series 4 Preferred Units.

(A)             In the event PubCo is required to declare a Dividend (as defined in the Series 4 Certificate of Designations), on or before the date such Dividend is to be paid, the Manager shall cause the Company to make a distribution of cash to PubCo in respect of the Series 4 Preferred Units in an amount equal to the amount to be paid by PubCo in respect of such Dividend, which distribution shall be, for the avoidance of doubt, in addition to any amounts distributable to PubCo pursuant to Section 5.2(a).

(B)              To the extent the holders of the Series 4 Preferred Stock are entitled to participate in any dividends or distributions (whether in cash or other property, but not including dividends or distributions of Class A Stock or other PubCo Equity Securities addressed in Section 3.7(a)(i)(C) to holders of Class A Stock, the Manager shall cause the Company to make a distribution of cash or other property, as applicable, to PubCo in respect of the Series 4 Preferred Units in an amount and type equal to the amount to be paid by PubCo to the holders of the Series 4 Preferred Stock, which distribution shall be in addition to any amounts distributable to PubCo with respect to Series 4 Preferred Units pursuant to Section 5.2(a).

(C)              To the extent the holders of the Series 4 Preferred Stock are entitled to participate in any dividends or distributions of Class A Stock or other PubCo Equity Securities to holders of Class A Stock, consistent with Section 3.4(b), the Manager shall cause the Company to issue to PubCo a number of Common Units or such other Equity Security of the Company, as applicable, equal to the number of shares of Class A Common Stock or other PubCo Equity Security, as applicable, being issued by PubCo to the holders of the Series 4 Preferred Stock.

(ii)              Series 6 Preferred Units.

(A)             In the event PubCo is required to declare a Dividend (as defined in the Series 6 Certificate of Designations), on or before the date such Dividend is to be paid, the Manager shall cause the Company to make a distribution of cash to PubCo in respect of the Series 6 Preferred Units in an amount equal to the amount to be paid by PubCo in respect of such Dividend, which distribution shall be, for the avoidance of doubt, in addition to any amounts distributable to PubCo pursuant to Section 5.2(a).

(B)              To the extent the holders of the Series 6 Preferred Stock are entitled to participate in any dividends or distributions (whether in cash or other property, but not including dividends or distributions of Class A Stock or other PubCo Equity Securities addressed in Section 3.7(a)(ii)(C)) to holders of Class A Stock, the Manager shall cause the Company to make a distribution of cash or other property, as applicable, to PubCo in respect of the Series 6 Preferred Units in an amount and type equal to the amount to be paid by PubCo to the holders of the Series 6 Preferred Stock, which distribution shall be in addition to any amounts distributable to PubCo with respect to Series 6 Preferred Units pursuant to Section 5.2(a).

(C)              To the extent the holders of the Series 6 Preferred Stock are entitled to participate in any dividends or distributions of Class A Stock or other PubCo Equity Securities to holders of Class A Stock, consistent with Section 3.4(b), the Manager shall cause the Company to issue to PubCo a number of Common Units or such other Equity Security of the Company, as applicable, equal to the number of shares of Class A Common Stock or other PubCo Equity Security, as applicable, being issued by PubCo to the holders of the Series 6 Preferred Stock.