EX-10.2 AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

 

AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

ZYMAN GROUP, LLC

 

 

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

 

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

 

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

 

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

 

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

 

 

ARTICLE I

 

FORMATION OF LIMITED LIABILITY COMPANY

 

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

 

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

 

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

 

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

 

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

 

ARTICLE II

 

MEMBERS; MEMBERSHIP INTERESTS; UNITS

 

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

 

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

 

Section 2.2   Classes of Units .

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE III

 

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS

 

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

 

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

 

Section 3.3   Allocation of Profits and Losses .

 

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

 

(i)                                      Profits shall be allocated as follows:

 

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

 

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

 

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

 

(ii)                                   Losses shall be allocated as follows:

 

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

 

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

 

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

 

(b)                                  Special Allocations and Limitations

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 3.4   Distributions .

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 3.5   Allocation of PBT . 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE IV

 

MANAGEMENT

 

Section 4.1   Management of the Company .

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)                                     Notwithstanding anything to the contrary contained in this Agreement, in consideration for the payment of the Purchase Price under Section 2.1 of the Purchase Agreement and for other good and valuable consideration, the parties hereto hereby (i) agree that MDC Partners and/or any of its Affiliates, in connection with its or any of its Affiliates’ current or future credit facilities, debt offerings (including, without limitation, senior, subordinated or mezzanine debt issued in a public offering or a Regulation S or Rule 144A private placement) or any other debt agreements, shall be entitled to: (w) pledge or grant a security interest in or otherwise have a lien placed upon MDC’s Membership Interests; (x) pledge or grant a security interest in or otherwise have a lien placed upon the assets and properties of the Company and/or its subsidiaries; (y) assign all of its rights, benefit, title and interest in the Company and distributions therefrom, including, without limitation, all rights and claims pursuant to and under any Put or Call to, or to an agent or representative on behalf of, its bank or lender or group of banks or group of lenders or holders of its other senior debt (as applicable and collectively, the “ Lender ”); and (z) have the Company and/or its subsidiaries provide guarantees and such other ancillary security and related documentation as reasonably required by the Lender from time to time (the items in (w), (x), (y) and (z) being collectively referred to as an “ MDC Financing ”); and (ii) consent unconditionally to (x) the granting of all security and the execution of all documents required in connection with an MDC Financing and the enforcement thereof, where applicable, by the Lender; and (y) any transaction by which the Lender becomes the absolute legal and beneficial owner of any Membership Interests which have been pledged or assigned by it. 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE V

 

MEETINGS OF MEMBERS

 

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

 

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

 

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

 

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

 

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