Unassociated Document


    EXHIBIT
      10.3


     

    STOCK
      PURCHASE AGREEMENT

     

    by
      and
      among

     

    SECURED
      PRODUCTS (CAYMAN), INC.,

     

    H.I.G.
      CAPITAL MANAGEMENT, INC.

     

    and

     

    MDC
      PARTNERS INC.

     

    dated
      as
      of

     

    November
      3, 2006

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    



    STOCK
      PURCHASE AGREEMENT

     

    Stock
      Purchase Agreement, dated as of November 3, 2006, by and among Secured
      Products (Cayman), Inc., a
      Cayman
      Islands exempted company (“Purchaser”),
      and
MDC
      Partners Inc.,
      a
      Canadian corporation (“Seller”)
      and
      the holder of all the capital stock of 2114744 Ontario Inc., a newly-formed
      Ontario corporation that will conduct its business as Mercury
      Graphics (“Mercury”);
      Metaca
      Corporation,
      a
      Canadian corporation (“Metaca”);
      MDC
      USA Holdings Inc. (“MDC
      Holdco”),
      a
      Delaware corporation that owns all of the capital stock of Ashton-Potter
      [USA] Ltd.,
      a
      Delaware corporation (“AP”)(Mercury,
      Metaca and MDC Holdco are referred to as the “Base
      Companies”,
      and
      collectively with AP and Placard
      Pty Ltd. (“Placard”),
      an
      Australian corporation that is wholly-owned by Metaca, the “Companies”),
      and
H.I.G.
      Capital Management, Inc.,
      a
      Delaware corporation (“HIG”)
      (for
      purposes of Sections 1.2(b)(i), 2.1(b)(iv) and 7 only). Certain capitalized
      terms used in this Agreement have the meanings assigned to them in Article
      IX.

     

    WHEREAS
      each of the boards of directors of Purchaser and Seller has unanimously
      approved, and deems it advisable and in the best interests of its respective
      stockholders to consummate, the acquisition by Purchaser (or its designated
      Subsidiaries) from Seller, and the sale by Seller to Purchaser (or its
      designated Subsidiaries), of all the outstanding capital stock of the Base
      Companies upon the terms and subject to the conditions set forth
      herein;

     

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual representations,
      warranties, covenants and agreements set forth herein, intending to be legally
      bound hereby, the parties hereto agree as follows:

     

    ARTICLE
      I  

    PURCHASE
      AND SALE OF SHARES

     

    1.1.  Sale
      and Transfer of Shares.
      Subject
      to the terms and conditions of this Agreement, at the Closing, Seller shall
      sell, convey, assign, transfer and deliver to Purchaser (or its designated
      Subsidiaries) all the issued and outstanding Shares, free and clear of all
      Encumbrances, except for any Encumbrance arising under the Securities Act or
      any
      applicable state or provincial securities laws, and Purchaser (or its designated
      Subsidiaries) shall purchase, acquire and accept the Shares from
      Seller.

     

    1.2.  Consideration;
      Purchase Price.
      (a)  Subject
      to the terms and conditions of this Agreement, in consideration of the aforesaid
      sale, conveyance, assignment, transfer and delivery to Purchaser (or its
      designated Subsidiaries) of the Shares, Purchaser (or its designated
      Subsidiaries) shall (i)
      pay to
      Seller an amount of cash equal to $20 million (the “Base
      Purchase Price”),
      as
      adjusted pursuant to clause (c) (as so adjusted, the “Purchase
      Price”)
      and
      (ii) issue or deliver to Seller to Seller an amount equal to 7.5% of the
      issued ordinary shares, par value US$1.00, in Purchaser (the “MDC
      Shares”).

     

    (b)  The
      Purchase Price shall be paid by Purchaser to Seller as follows: 

     

    (i)  Simultaneously
      with the execution of this Agreement, HIG shall deliver to the Escrow Agent,
      a
      wire transfer in immediately available federal funds in an amount equal to
      $1
      million (the “Contract
      Deposit”),
      to be
      held by the Escrow Agent in accordance with the Deposit Escrow Agreement among
      the Escrow Agent, HIG, Purchaser and Seller of even date herewith (the
“Deposit
      Escrow Agreement”).
      The
      Contract Deposit shall be non-refundable except as expressly provided in Article
      VII hereof; 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii)  At
      the
      Closing, an amount equal to $1 million of the Purchase Price (the “Escrow
      Amount”)
      shall
      be placed in escrow for
      a
      period of up to one (1)
      year
      following the Closing Date
      pursuant
      to the terms of the Escrow Agreement, as
      security for the purchase price adjustments described in Section 2.2, if any,
      and the indemnification obligations, if any, of Seller as set forth in Section
      8
      hereof; and

     

    (iii) At
      the
      Closing, (A) Purchaser shall pay to Seller an amount equal to the balance of
      the
      Estimated Purchase Price (i.e., the balance of the Estimated Purchase Price
      less
      the Escrow Amount) and (B) (x) the Escrow Agent shall pay the Contract Deposit
      to HIG (together will all accrued interest thereon) or, (y) if the Contract
      Deposit has been released prior to the Closing pursuant to Section 7.2, Seller
      shall refund the Contract Deposit and the Second Contract Deposit to HIG by
      wire
      transfer of immediately available federal funds.

     

    (c)  The
      Base
      Purchase Price shall be (i) increased by the amount, if any, by which the
      Closing Working Capital exceeds $13 million or decreased by the amount, if
      any,
      by which the Closing Working Capital is less than $13 million; (ii) decreased
      by
      the aggregate amount of Indebtedness (excluding the Mercury Lease) of the
      Companies as of the Closing; and (iii) decreased by the aggregate amount of
      any
      professional fees and expenses (including, without limitation, accounting,
      broker and legal expenses and fees) that have been incurred by the Companies
      in
      connection with the transactions contemplated hereby and that have not been
      paid
      by the Seller as of the Closing (the “Transaction
      Expenses”).

     

    (d)  For
      purposes of determining the amount of cash to be paid as the Estimated Purchase
      Price by Purchaser to Seller at the Closing, Seller shall in good faith prepare
      an estimated calculation of the Closing Working Capital (such amount, the
“Estimated
      Closing Working Capital”)
      on the
      basis described in the first sentence of Section 2.2(b). Seller shall deliver
      the calculation of Estimated Closing Working Capital to Purchaser not less
      than
      two Business Days before the Closing Date along with a certificate executed
      by
      an officer of the Seller certifying that such statement of Estimated Closing
      Working Capital was prepared on the basis described in
      Section 2.2(b).

     

    (e)  As
      used
      in this Agreement, the “Estimated
      Purchase Price”
shall
      mean the amount equal to the Base Purchase Price (i) increased by the
      amount, if any, by which the Estimated Closing Working Capital exceeds $13
      million or (ii) decreased by the amount, if any, by which the Estimated
      Closing Working Capital is less than $13 million, and as the same may be
      adjusted pursuant to Section 1.2(c)(ii) and (iii) of this
      Agreement.

     

    
      
        
        

      

      
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    ARTICLE
      II 

    THE
      CLOSING

     

    2.1.  The
      Closing.
      (a)  The
      sale and transfer of the Shares by Seller to Purchaser (or its designated
      Subsidiaries) shall take place at the offices of Seller at 10:00 am (New York
      City time) on November 15, 2006 (the “Closing
      Date”),
      unless another date or place is agreed in writing by each of the parties
      hereto.

     

    (b)  At
      the
      Closing:

     

    (i)  Seller
      shall deliver to Purchaser (or its designated Subsidiaries) one or more
      certificates representing all the issued and outstanding Shares, each such
      certificate to be duly and validly endorsed in favor of Purchaser (or its
      designated Subsidiaries) or accompanied by a separate stock power duly and
      validly executed by Seller and otherwise sufficient to vest in Purchaser (or
      its
      designated Subsidiaries) legal and beneficial ownership of such
      Shares;

     

    (ii)  Purchaser
      (or its designated Subsidiaries) shall transfer the Estimated Purchase Price,
      less the Escrow Amount, to an account designated by Seller prior to the Closing
      by wire transfer of immediately available U.S. Dollar funds; and

     

    (iii)  Purchaser
      (or its designated Subsidiaries) shall transfer the Escrow Amount to the account
      designated by Escrow Agent prior to the Closing by wire transfer of immediately
      available U.S. Dollar funds.

     

    (iv)  HIG
      and
      Seller shall cause the Escrow Agent to release and pay the amount of the
      Contract Deposit to HIG (by joint written instruction), unless the Contract
      Deposit has been released to Seller prior to the Closing in connection with
      an
      Extension Election pursuant to Article 7, in which case Seller shall return
      to
      HIG the Contract Deposit and the Second Contract Deposit to HIG by wire transfer
      of immediately available federal funds at the Closing;

     

    (v)  Purchaser
      and Seller shall enter into a Transition Services Agreement substantially in
      the
      form of Exhibit A hereto (the “Transition
      Services Agreement”).

     

    (vi)  Purchaser
      and Seller shall enter into a Shareholders’ Agreement with respect to the MDC
      Shares substantially in the form of Exhibit B hereto.

     

    (vii)  Purchaser,
      Seller and the Escrow Agent shall enter into the Escrow Agreement substantially
      in the form of Exhibit C hereto (the “Escrow
      Agreement”).

     

    (viii)  All
      of
      the MDC Partner-designated directors and officers of the Companies listed on
      Schedule 2.1(b)(viii) shall have tendered resignations of their positions with
      the Companies.

     

    
      
        
        

      

      
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    (ix)  Seller
      shall prepare and deliver to the Purchaser a certificate (the “Certificate
      of Indebtedness”)
      representing and certifying as to (A) the amount of Indebtedness of each Company
      outstanding on the Closing Date, and specifying the amount owed to each creditor
      listed thereon and (B) the amount of Transaction Expenses of each Company
      outstanding on the Closing Date, and specifying the amount owed to each party
      listed thereon.

     

    (x)  Seller
      shall deliver to Purchaser pay-off letters and lien discharges (or agreements
      therefor) reasonably satisfactory to the Purchaser from each creditor listed
      on
      Schedule 2.1(b)(ix)
      hereto.
      Seller
      shall have evidenced the discharge of all Intercompany Arrangements between
      Placard and Metaca required to be discharged pursuant to Section 5.5 (in a
      manner reasonably satisfactory to the Purchaser).

     

    (xi)  Seller
      shall deliver the written consents, in form and substance reasonably
      satisfactory to Purchaser and Purchaser’s counsel, to the consummation of the
      transactions contemplated by this Agreement (including the Mercury Contribution)
      referenced on Schedule 2.1(b)(xi)
      hereto.

     

    (xii)  Seller
      shall have evidenced the completion of the Mercury Contribution pursuant to
      the
      Asset Purchase Rollover Agreement substantially in the form attached as Exhibit
      E hereto.

     

    2.2.  Post-Closing
      Adjustment. (a)  Seller
      has prepared the attached Schedule
      2.2
      which
      lists certain current asset and current liability accounts and certain
      accounting principles, methodologies and policies to be used to determine the
      Closing Working Capital. The Purchase Price shall be adjusted after the Closing
      in accordance with this Section 2.2 based upon the actual Closing Working
      Capital of the accounts shown on Schedule
      2.2.
      For
      purposes hereof, the statement of the Closing Working Capital, together with
      the
      calculation of the Purchase Price that results from the determination of such
      amount, shall be referred to as the “Closing
      Statement.”

     

    (b)  The
      Closing Statement shall be prepared on the basis of, and using the same
      accounting principles, methodologies and policies, as specified in Schedule
      2.2
      and, to
      the extent not specified therein, as used in preparing the Financial Statements.
      If the Purchase Price as finally determined in accordance with this Section
      2.2
      (i) is less than the Estimated Purchase Price, Seller shall pay to
      Purchaser the amount by which the Purchase Price falls short of the Estimated
      Purchase Price, or (ii) exceeds the Estimated Purchase Price, Purchaser
      shall pay to Seller the amount by which the Estimated Purchase Price falls
      short
      of the Purchase Price. Any such payment shall be made by wire transfer of
      immediately available U.S. Dollar funds to an account designated by the party
      receiving payment within three Business Days after the final determination
      of
      the Purchase Price. The amount of any such payment not made when due shall
      bear
      interest at a rate per annum equal to the rate announced by Citibank, N.A.
      from
      time to time as its “Base Rate”
plus
      two percent (2%) from the third Business Day after the final determination
      of
      the Purchase Price. Any
      amount owed by Seller to Purchaser pursuant to clause (b) may, at the
      Purchaser’s option, be satisfied from the Escrowed Amount pursuant to the Escrow
      Agreement.

     

    
      
        
        

      

      
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    (c)  As
      promptly as practicable (and, in any event, within 120 days after the Closing),
      Purchaser shall prepare and deliver to Seller the Closing Statement prepared
      in
      accordance with this Section
      2.2.
      If
      Seller disagrees with the determination of the Closing Statement, Seller shall
      notify Purchaser of such disagreement within 60 days after delivery of the
      Closing Statement, which notice shall set forth any such disagreement in
      reasonable detail. If Seller fails to deliver this notice by the end of such
      60
      days, Seller shall be deemed to have accepted the Closing Statement delivered
      by
      Purchaser. Matters included in the calculations in the Closing Statement that
      are not objected to by Seller in such notice shall be deemed accepted by Seller
      and shall not be subject to further dispute or review. During the 60-day period
      of Seller’s review of the Closing Statement and the resolution of any disputes
      that may arise under this Section 2.2, Purchaser will, upon reasonable notice
      and during regular business hours, provide Seller and its accountants access
      to
      the books and records and personnel of the Companies and all documents,
      schedules and workpapers used by Purchaser in the preparation of the Closing
      Statement. Purchaser and Seller shall negotiate in good faith to resolve any
      such disagreement, and any resolution agreed to in writing by Purchaser and
      Seller shall be final and binding upon the parties.

     

    (d)  If
      Purchaser and Seller are unable to resolve any disagreement as contemplated
      by
      Section 2.2(c) within 30 days after delivery by Seller of written notice of
      such
      disagreement, Purchaser and Seller shall jointly select a partner at a mutually
      acceptable accounting firm to resolve such disagreement (the person so selected
      shall be referred to herein as the “Accounting
      Arbitrator”).
      The
      parties shall instruct the Accounting Arbitrator to consider only those items
      and amounts set forth in the Closing Statement as to which Purchaser and Seller
      have not resolved their disagreement. Purchaser and Seller shall use reasonable
      best efforts to cause the Accounting Arbitrator to deliver to the parties,
      as
      promptly as practicable, a written report setting forth the resolution of any
      such disagreement determined in accordance with the terms of this Agreement.
      Such report shall be final and binding upon the parties. The fees, costs and
      expenses of the Accounting Arbitrator shall be borne one-half by Purchaser
      and
      one-half by Seller; provided that if the Accounting Arbitrator determines that
      one party’s position is completely correct, then such party shall pay none of
      the fees, costs and expenses of the Accounting Arbitrator and the other party
      shall pay all such fees, costs and expenses.

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF SELLER

     

    Except
      as
      set forth in the Disclosure Schedule delivered by Seller to Purchaser
      simultaneously with the execution hereof, Seller represents and warrants to
      Purchaser that all of the statements contained in this Article III are true
      as
      of the date of this Agreement (or, if made as of a specified date, as of such
      date) and as of the Closing Date. For purposes of the representations and
      warranties of Seller contained herein, disclosure in any section of the
      Disclosure Schedule of any facts or circumstances shall be deemed to be adequate
      response and disclosure of such facts or circumstances with respect to another
      representation or warranty by Seller calling for disclosure of such information
      if (a) a specific cross-reference is made to or from the appropriate Disclosure
      Schedule for such other representation or warranty or (b) the disclosure is
      described in sufficient detail such that its qualification of the other
      representation or warranty is reasonably apparent. Except as set forth in the
      Disclosure Schedule, Seller represents and warrants to Purchaser as of the
      date
      hereof (or, if the representation or warranty is made as of a specified date,
      as
      of such date), and as of the Closing Date, as follows:

     

    
      
        
        

      

      
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    3.1.  Organization.
      Seller
      and each of the Companies (a) is a corporation or other legal entity duly
      organized, validly existing and, if applicable, in good standing under the
      laws
      of its jurisdiction of organization; (b) has all requisite corporate or other
      legal entity power and authority to carry on its business as it is now being
      conducted and to own the properties and assets it now owns; and (c) is duly
      qualified or licensed to do business in every jurisdiction in which such
      qualification is required. No meeting has been convened, resolution proposed,
      petition presented or order made for the winding up of any Company. Seller
      has
      heretofore delivered to Purchaser, or made available for review by Purchaser,
      complete and correct copies of the certificate of incorporation and by-laws
      of
      each Company, and all amendments thereto, as presently in effect.

     

    3.2.  Authorization.
      Seller
      has the requisite corporate power and authority and full legal right to execute,
      deliver and perform this Agreement and to consummate the Closing and the Mercury
      Contribution. The execution, delivery and performance by Seller of this
      Agreement and the consummation by Seller of the Closing and the Mercury
      Contribution have been duly authorized by the board of directors of Seller,
      and
      no other corporate action on the part of Seller or any Company is necessary
      to
      authorize the execution, delivery and performance by Seller of this Agreement
      or
      the consummation by Seller of the Closing and the Mercury
      Contribution.

     

    3.3.  Execution;
      Validity of Agreement.
      This
      Agreement has been duly executed and delivered by Seller, and, assuming due
      and
      valid authorization, execution and delivery hereof by Purchaser, is a valid
      and
      binding obligation of Seller, enforceable against Seller in accordance with
      its
      terms.

     

    3.4.  Consents
      and Approvals; No Violations.
      Except
      for (i) the filing of reports by Seller under the Exchange Act and in accordance
      with NASDAQ National Market and Toronto Stock Exchange rules and requirements
      and (ii) filings, permits, authorizations, consents and approvals as may be
      required under the HSR Act and applicable non-U.S. laws with respect to foreign
      investment and competition, and other applicable requirements of state or
      provincial securities or blue sky laws, none of the execution, delivery or
      performance of this Agreement by Seller or the consummation by Seller of the
      Closing or the Mercury Contribution will (a) conflict with or result in any
      breach of any provision of the certificate of incorporation or by-laws of Seller
      or any of the Companies, (b) require any filing with, or permit, authorization,
      consent or approval of, any Governmental Entity, (c) result in a violation
      or
      breach of, or constitute (with or without notice or lapse of time or both)
      a
      default (or give rise to any right of termination, cancellation or acceleration)
      under, any of the terms, conditions or provisions of any contract, agreement,
      insurance policy, loan, lease, license, guarantee or commitment by which the
      Companies or any of their respective assets or properties are bound, (d) violate
      any statute, law, constitutional provision, code, regulation, ordinance, rule,
      ruling, judgment, decision, order, writ, injunction, decree, permit, concession,
      grant, franchise, license, agreement, directive, binding guideline or policy,
      or
      rule of common law, requirement of or other governmental restriction of or
      determination by any Government Entity or any interpretation of any of the
      foregoing by any Governmental Entity (“Law”)
      applicable to Seller, any of the Companies or any of their properties or assets,
      or (e) result in the creation or imposition of any Encumbrance (other than
      a Permitted Encumbrance) on any properties or assets of the Companies, excluding
      from the foregoing clauses (b), (c) and (d) such violations, breaches and
      defaults which would become applicable as a result of the business or activities
      in which Purchaser is or proposes to be engaged (to the extent different from
      the businesses engaged in by the Companies) or as a result of any acts or
      omissions by, or the status of any facts pertaining specifically to, Purchaser
      or any of its Affiliates (other than the Companies). 

     

    
      
        
        

      

      
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    3.5.  Ownership
      and Possession of Shares.
      As of
      the Closing, Seller is the registered and beneficial owner of all the issued
      and
      outstanding Shares, free and clear of all Encumbrances whatsoever, except for
      any Encumbrances created by this Agreement and Encumbrances arising under the
      Securities Act or any applicable state or provincial securities
      laws.

     

    3.6.  Capitalization.
      The
      issued and outstanding capital stock of each Base Company consists exclusively
      of the Shares. Metaca is the registered holder and beneficial owner of all
      of
      the shares issued in the capital of Placard. MDC Holdco is the registered holder
      and beneficial owner of all of the shares issued in the capital of AP. Seller
      is
      the registered holder and beneficial owner of all of the shares issued in the
      capital of Mercury. All the Shares are duly authorized, validly issued, fully
      paid and non-assessable. There are no options, rights or agreements to which
      any
      of Seller, any Company or any of their respective Subsidiaries is a party or
      by
      which any of them is bound obligating any of them (a) to issue, deliver or
      sell,
      or refrain from issuing, delivering or selling, any shares of capital stock
      of
      any Company or any Subsidiary, or to grant, extend or enter into any such
      option, right or agreement, (b) to repurchase, redeem or otherwise acquire,
      or
      to refrain from repurchasing, redeeming or otherwise acquiring, any shares
      of
      capital stock of any Company or any Subsidiary, or to grant, extend or enter
      into any such option, right or agreement or (c) to vote, or to refrain from
      voting, any shares of capital stock of any Company or any
      Subsidiary.

     

    3.7.  Subsidiaries
      and Affiliates.
      Schedule 3.7 of the Disclosure Schedule sets forth, as of the date hereof,
      a
      complete list of each Subsidiary of each Company, and each Subsidiary is
      wholly-owned by such Company. Except as set forth on the Disclosure Schedule,
      none of the Companies has any Subsidiaries and none of the Companies otherwise
      owns, any shares in the capital of or any interest in, or control, directly
      or
      indirectly, any corporation, partnership, association, joint venture, business
      trust, or other business entity.

     

    3.8.  Financial
      Statements.
      True
      and complete copies of the Financial Statements are included in the Disclosure
      Schedule. The Financial Statements have been prepared in accordance with
      applicable GAAP (subject, in the case of the Interim Financials, to the absence
      of notes and to normal recurring year-end adjustments) and present, in all
      material respects, the financial position and the results of operations of
      each
      Company as of the dates and for the periods referred to therein. Each of the
      balance sheets included in the Financial Statements fairly and accurately
      presents, in all material respects, the financial condition of each Company
      as
      of its respective date. Each of the statements of income, retained earnings
      and
      cash flows, if any, included in the Financial Statements fairly and accurately
      present, in all material respects, the results of operations of each Company
      for
      the periods covered thereby.

     

    
      
        
        

      

      
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    3.9.  Absence
      of Certain Changes.
      

     

    (a)  Since
      the
      Balance Sheet Date, (i) no event, change or circumstance that would have a
      Company Material Adverse Effect has occurred, and (ii) except as set forth
      in Section 3.9 of the Disclosure Schedule, each Company has carried on its
      business only in the ordinary course, and there has not been (A) any change
      in
      the assets, liabilities, sales, income or business of such Company or in the
      relationships with suppliers, customers or lessors, other than changes which
      were both in the ordinary course of business and have not been, either in any
      case or in the aggregate, materially adverse; (B) any damage, destruction or
      loss, whether or not covered by insurance, materially and adversely affecting,
      either in any case or in the aggregate, the property or business of such
      Company; (C) any forgiveness or cancellation of any debt or claim by such
      Company or any waiver of any right of material value other than compromises
      of
      accounts receivable in the ordinary course of business; (D) any entry by such
      Company into any transaction other than in the ordinary course of business;
      or
      (D) any discharge or satisfaction by such Company of any lien or encumbrance
      or
      payment by such Company of any obligation or liability (fixed or contingent)
      other than (x) current liabilities included in the Year-End Balance Sheet or
      the
      Closing Statement and (y) current liabilities incurred since the date of the
      Year-End Balance Sheet in the ordinary course of business. 

     

    (b)  Except
      as
      set forth on Schedule 3.9 or as contemplated in connection with the transactions
      set forth in this Agreement, since the Balance Sheet Date, no Company
      has:

     

    (i)  (x)
      amended its certificate of incorporation or by-laws or similar organizational
      documents or (y) (A) issued, sold, transferred, pledged, disposed of or
      encumbered any shares of any class or series of its capital stock, or securities
      convertible into or exchangeable for, or options, warrants, calls, commitments
      or rights of any kind to acquire, any shares of any class or series of its
      capital stock, (B) declared, set aside or paid any non-cash dividend or any
      other distribution payable in stock or property (other than cash and cash
      equivalents) with respect to any shares of any class or series of its capital
      stock, (C) split, combined or reclassified any shares of any class or series
      of
      its stock or (D) redeemed, purchased or otherwise acquired directly or
      indirectly any shares of any class or series of its capital stock, or any
      instrument or security which consists of or includes a right to acquired such
      shares;

     

    (ii)  made
      any
      change in the compensation, pension or other benefits payable or to become
      payable to any of its employees (other than normal recurring increases in the
      ordinary course of business or pursuant to plans, programs or agreements
      existing on the date hereof);

     

    (iii)  adopted
      a
      plan of complete or partial liquidation, dissolution, merger, consolidation,
      restructuring, recapitalization or other corporate reorganization of such
      Company;

     

    (iv)  changed
      in any material respect any of the accounting methods used by it unless required
      by applicable GAAP and disclosed to Purchaser in writing;

     

    
      
        
        

      

      
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    (v)  become
      legally committed to any new capital expenditure requiring expenditures after
      the Closing in excess of $50,000, except for expenditures pursuant to projects
      for which work has already been commenced or committed;

     

    (vi)  except
      in
      the ordinary course of business, sold, leased, licensed, mortgaged or created
      an
      Encumbrance upon (other than Permitted Encumbrances) any of its respective
      assets or properties at a price in excess of $50,000 in the aggregate or in
      a
      transaction that is not arms-length;

     

    (vii)  made
      any
      loans or advances to any Person such that the amount of principal owed by such
      Person to any Company shall be in excess of $10,000; and

     

    (viii)
       entered
      into any agreement, contract or commitment to do any of the
      foregoing.

     

    3.10.  Property
      and Assets.
      

     

     (a) 
      Each of the Companies has good and marketable title to, or a valid lease,
      license or right to use, all assets, properties and rights used by it. Those
      real and other tangible properties purported to be owned by each of the
      Companies are held free and clear of all Encumbrances other than (i)
      Encumbrances for Taxes not yet due and payable, (ii) mechanics’, materialmen’s,
      carriers’, workers’, repairers’, landlords’ and similar Encumbrances arising or
      incurred in the ordinary course of business, (iii) zoning, entitlement, building
      and other land use regulations that are not violated by current occupancy or
      use
      and (iv) customary covenants, conditions, restrictions, easements and similar
      restrictions of record affecting title that do not impair current occupancy
      or
      use (clauses (i) through (iv) being “Permitted
      Encumbrances”).
      All
      tangible assets owned or leased by each Company are in satisfactory operating
      condition for the uses to which they are being put, subject to ordinary wear
      and
      tear and ordinary maintenance requirements. Section 3.10(a)(i) of the
      Disclosure Schedule sets forth a complete list of all Real Property and
      specifies which Real Property is owned and which is leased. Section 3.10(a)(ii)
      of the Disclosure Schedule sets forth a complete and correct list of all capital
      assets of each of the Companies having a book or fair market value in excess
      of
      $25,000. There are no material defects in any such capital assets (subject
      to
      ordinary wear and tear and ordinary maintenance requirements) or Real Property,
      as to title or condition, not described in Section 3.10(a)(i)
      or
      3.10(a)(ii)
      of the
      Disclosure Schedule. Neither Seller nor any of the Companies has received any
      notice that either the whole or any portion of the Real Property is to be
      condemned, expropriated, requisitioned or otherwise taken by any public
      authority. Neither Seller nor any of the Companies has any knowledge of any
      public improvements that may result in special assessments against any of the
      Real Property. Section 3.10(a)(i) of the Disclosure Schedule sets forth (i)
      a
      complete and correct description of all leases of Real Property to which any
      of
      the Companies is a party and (ii) a complete and accurate list of the street
      addresses of all real property leased by any of the Companies. Complete and
      correct copies of all such leases have been delivered or made available to
      Purchaser. Each such lease is valid and subsisting, and no action has been
      taken
      or omitted by any Company or the Seller and, to the Knowledge of the Seller,
      no
      other event or condition exists, which constitutes, or after notice or lapse
      of
      time or both would constitute, a default under any such lease. The leasehold
      interests of each Company are subject to no lien or other encumbrance, and
      such
      Company is in quiet possession of the properties covered by such leases.


     

    
      
        
        

      

      
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    (b)  Except
      as
      set forth in Section 3.10(b) of the Disclosure Schedules, the property and
      assets transferred to Mercury in accordance with the Mercury Contribution,
      when
      utilized with a labor force substantially similar to that employed by the
      Company immediately prior to the Mercury Contribution, are adequate and
      sufficient to conduct the business of Mercury as conducted by the Seller
      immediately prior to the Mercury Contribution. Such properties and assets,
      taken
      as a whole, constitute all of the properties and assets used primarily or held
      primarily for use in connection with the business conducted by
      Mercury.

     

    3.11.  Leases,
      Contracts and Commitments.
      (a)  Section
      3.11 of the Disclosure Schedule sets forth, as of the date hereof, a complete
      list of every binding contract, agreement, loan, lease, license, joint venture
      agreement, tax sharing agreement, guarantee or commitment to which each Company
      and each Subsidiary of such Company is a party and that (i) provides for future
      payments, or pursuant to which payments were received or made during the one
      (1)
      year period ending on the date hereof, by a Company or any Subsidiary of that
      Company, or to a Company or any Subsidiary of that Company, of more than $50,000
      per annum (excluding contracts terminable on 30 days notice or less without
      penalty, and purchase orders and invoices entered into or incurred in the
      ordinary course of business); (ii) is a collective bargaining or similar
      agreement; or (iii) materially restricts a Company from engaging in any business
      activity anywhere in the world. Except as expressly set forth in Section 3.11
      of
      the Disclosure Schedule, no Company is a party to or subject to any contract
      with any officer, director or Affiliate of Seller or any of the
      Companies.

     

    (b)  There
      is
      not and, to the Knowledge of Seller, there has not been claimed or alleged
      by
      any Person, with respect to any contract listed in Section 3.11 of the
      Disclosure Schedule, any existing default or event that, with notice or lapse
      of
      time or both, would constitute a default or event of default on the part of
      any
      Company or, to the Knowledge of Seller, on the part of any other party thereto.
      Each Company has in all material respects performed all obligations required
      to
      be performed by it to date under each such material contract. Subject to
      obtaining any necessary consents by the other party or parties to any such
      material contract (the requirement of any such consent being reflected in
      Section 3.4 of the Disclosure Schedule), no such material contract includes
      any
      provision the effect of which may be to enlarge or accelerate any obligations
      of
      any Company upon or after the Closing or give additional rights to any other
      party thereto or will in any other way be affected by, or terminate or lapse
      by
      reason of, the transactions contemplated by this Agreement. 

     

    3.12.  Insurance.
      Section
      3.12 of the Disclosure Schedule lists all insurance policies in effect as of
      the
      date hereof that are owned or held by each Company or that provide coverage
      with
      respect to the business or assets of each of the Companies. All such insurance
      policies are valid and currently effective insurance policies with financially
      sound and reputable companies funds and underwriters in such types and amounts
      as are consistent with customary practices and standards of companies engaged
      in
      business and operations similar to those of such Company. All such policies
      (a)
      are in full force and effect, (b) are and have been sufficient for compliance
      in
      all material respects by each of the Companies with all requirements of law
      and
      all agreements to which such Company is a party, and (c) provide that they
      will
      remain in full force and effect, and all related premiums have been paid,
      through the respective dates set forth in Section 3.12 of the Disclosure
      Schedule. The Companies shall have access to recovery of claims under such
      insurance policies owned or held by each Company until such expiration dates.
      Neither Seller nor any of the Companies is in default in any material respect
      with respect to its obligations under any of such insurance policies and has
      not
      received any notification of cancellation of any such insurance policies. No
      insurance carrier has denied coverage for any claim asserted by any of the
      Companies since January 1, 2000, nor has any insurance carrier declined to
      provide any coverage to any of the Companies since January 1, 2000. As of the
      Closing Date, no applicable limits under any such policies have been exhausted
      or significantly diminished. Except as set forth in Section 3.12 of the
      Disclosure Schedules, since January 1, 2001, there has been no lapse in coverage
      in respect of any area of liability or loss addressed by the insurance policies
      listed in Section 3.12 of the Disclosure Schedules.

     

    
      
        
        

      

      
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    3.13.  Litigation.
      Except
      as set forth in Section 3.13 of the Disclosure Schedule, none of the Companies
      is a party to, or, to the Knowledge of Seller, threatened to be made a party
      to,
      any actions, suits, proceedings, grievances, hearings or investigations. Seller
      is not a party to or, to the Knowledge of the Seller, threatened to be made
      a
      party to any actions, suits, proceedings, hearings or investigations of, in
      or
      before any Governmental Entity that challenges the validity of this Agreement
      or
      any action taken or to be taken by Seller pursuant to this
      Agreement.

     

    3.14.  Environmental
      Matters.
      Except
      as set forth in Section 3.14 of the Disclosure Schedule, (i) neither the
      Companies nor any of their respective Subsidiaries are in violation or, to
      the
      Knowledge of Seller, alleged violation of any Environmental Laws and (ii) none
      of the Real Property or, to the Knowledge of Seller any real property formerly
      owned, leased or used by the Companies or any of their respective Subsidiaries
      (the “Former
      Real Property”)
      are in
      violation or alleged violation of any Environmental Laws.

     

    (a)  None
      of
      the Companies or any of their respective Subsidiaries has received any notice
      from any third party, including, without limitation, any Governmental Entity,
      that (i) any of the Companies or any of their Subsidiaries has been identified
      by the United States Environmental Protection Agency (“EPA”)
      as a
      potentially responsible party under CERCLA with respect to a site listed on
      the
      National Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) any
      Hazardous Substances which any of the Companies, any of their Subsidiaries
      or
      any of their respective predecessors-in-interest has generated, transported
      or
      disposed of has been found at any site at which a Governmental Entity or other
      third party has conducted or has ordered that any of the Companies, any of
      their
      Subsidiaries or any of their respective predecessors-in-interest conduct a
      remedial investigation, removal or other response action pursuant to any
      Environmental Law; (iii) any of the Companies, any of their Subsidiaries or
      any
      of their respective predecessors-in-interest is, shall or may be a named party
      to any claim, action, cause of action, complaint, (contingent or otherwise)
      legal or administrative proceeding arising out of any third party’s incurrence
      of costs, expenses, losses or damages of any kind whatsoever in connection
      with
      the presence or release of Hazardous Substances; (iv) alleges any past or
      present violations or gives notice of an investigation regarding possible past
      or present violations of any Environmental Laws by any of the Companies or
      any
      of their Subsidiaries; or (v) alleges any event, condition, circumstance,
      activity, practice, incident, action or plan which is reasonably likely to
      interfere with or prevent continued compliance with or which would give rise
      to
      any common law or statutory liability, or otherwise form the basis of any claim,
      action, suit or proceeding, against any of the Companies or any of their
      Subsidiaries based on or resulting from the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling, or
      the
      emission, discharge or release of any Hazardous Substance. The Seller has no
      Knowledge of any matter that would require notification to any Governmental
      Entity or could entitle any Governmental Entity to require monitoring, closure,
      clean up or remediation under any Environmental Law.

     

    
      
        
        

      

      
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    (b)  (i)
      To
      the
      Knowledge of Seller,
      no
      portion of any of the Real Property or the Former Real Property has been used
      for the handling, manufacturing, processing, storage or disposal of Hazardous
      Substances, and no underground tank or other underground storage receptacle
      for
      Hazardous Substances is located on such properties; (ii) in the course of any
      activities conducted by any of the Companies, any of their Subsidiaries or,
      to
      the Knowledge of Seller, any of their respective predecessors-in-interest on
      any
      of the Real Property or, the Former Real Property, no Hazardous Substances
      have
      been generated, imported, transported, used, handled, processed, stored or
      disposed of except in accordance with applicable Environmental Laws; (iii)
      to
      the Knowledge of Seller, the Real Property does not contain any Hazardous
      Substances, other than Hazardous Substances the presence and condition of which
      comply with applicable Environmental Laws; (iv) there have been no releases
      or,
      to the Knowledge of Seller, threats of releases of Hazardous Substances on,
      upon, or into or from the vicinity of any of the Real Property or Former Real
      Property; and (v) any Hazardous Substances that have been generated at any
      of
      the Real Property or Former Real Property or by any of the Companies or their
      Subsidiaries have been transported offsite only by carriers having
      identification numbers issued by the EPA or otherwise in compliance in all
      material respects with applicable law, and have been treated or disposed of
      only
      by treatment or disposal facilities maintaining valid permits as required under
      applicable Environmental Laws.

     

    (c)  None
      of
      the Real Property is or shall be subject to any applicable environmental cleanup
      responsibility law or environmental restrictive transfer law or regulation,
      by
      virtue of the transactions set forth herein and contemplated
      hereby.

     

    3.15.   Compliance
      with Laws.
      (a)
      Except
      as set forth in Section 3.15 of the Disclosure Schedule, each Company is in
      possession of all material franchises, grants, authorizations, licenses,
      permits, easements, variances, exceptions, consents, certificates, approvals
      and
      orders of any Governmental Entity that is necessary for it to carry on its
      business as it is now being conducted and no suspension or cancellation of
      any
      of the foregoing is pending or, to the Knowledge of Seller, threatened. Each
      of
      the Companies has and maintains the permits listed in Section 3.15 of the
      Disclosure Schedules (collectively, the “Permits”)
      and
      such Permits include all material licenses, permits and other authorizations
      from all Governmental Entities as are required under Environmental Laws or
      are
      otherwise necessary for the conduct of the business or operations of the
      Companies and each of their respective Subsidiaries, and the Companies and
      each
      of their Subsidiaries are in material compliance with all of the Permits. Except
      as expressly designated in Section 3.15 of the Disclosure Schedule, the
      Companies and their respective Subsidiaries have complied in all material
      respects with all Laws applicable to their businesses, assets and employees.
      None of the Companies nor any of their respective Subsidiaries have received
      notice of any contravention or allegation of any contravention of any such
      applicable Law.

     

    
      
        
        

      

      
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    (b)  Except
      as
      set forth in Schedule 3.15(b), Placard has complied in
      all
      material respects at all times with all Privacy
      Laws,
      and has
      collected, used and disclosed such personal information in accordance with
      applicable privacy policies, notices, guidelines and statements made available
      to its customers
      (or
      required by its customers),
      employees or other individuals or to the public from time to time. The execution
      of this Agreement and the consummation of the transactions contemplated hereby
      will not result in a breach of such Privacy
      Laws,
      policies, notices, guidelines or statements.
      No
      Person has claimed,
      and, to
      the Knowledge of Seller, no grounds exist for a Person to claim, compensation
      from Placard for a breach of any such Privacy Laws, policies, notices,
      guidelines or statements. 

     

    (c)  Except
      as
      set forth in Schedule 3.15(b), Seller and each of the Companies has complied
      in
      all material respects at all times with all applicable laws respecting the
      collection, use and disclosure of personal information, and has collected,
      used
      and disclosed such personal information in accordance with applicable privacy
      policies, notices, guidelines and statements made available to its customers
      (or
      requested by its customers), employees or other individuals or to the public
      from time to time. The execution of this Agreement and the consummation of
      the
      transactions contemplated hereby will not result in a breach of such laws,
      policies, notices, guidelines or statements.

     

    (d)  All
      consents required to be obtained in connection with the disclosure to Purchaser
      by Seller and the Companies of any personal information in connection with
      Purchaser’s evaluation of, or for the completion and consummation of, the
      transactions contemplated by this Agreement and all such consents as are
      necessary to permit Purchaser to use such personal information following the
      Closing have been obtained. Seller and each of the Companies have disclosed
      to
      Purchaser the purposes for which such personal information was
      collected.

     

    3.16.  Employee
      Benefit Plans.
      (a) 
      Section 3.16 of the Disclosure Schedule contains a true and complete list of
      all
      Plans. Seller has heretofore made available to Purchaser a true and complete
      copy of each written Plan (or, with respect to any Plan which is not written,
      a
      summary thereof), and with respect to each such Plan, true and complete copies
      of any amendments thereto, any associated trust, custodial, insurance or service
      agreements and any material written policies or procedures used in Plan
      administration, any annual report, any material actuarial report, or material
      disclosure materials including, without limitation, any summary plan description
      submitted to any governmental agency or distributed to participants or
      beneficiaries thereunder in the current or preceding calendar year, each
      agreement creating or modifying any related trust or other funding vehicle,
      and
      the most recently received IRS determination letters and any governmental
      advisory opinions, rulings, orders compliance statements, closing agreements
      or
      similar materials specific to such Plan. 

     

    (b)  No
      liability under Title IV or Section 302 of ERISA has been incurred by any
      Company or any ERISA Affiliate that has not been satisfied in full.

     

    (c)  The
      PBGC
      has not instituted proceedings to terminate any Title IV Plan and no condition
      exists that presents a material risk that such proceedings will be
      instituted.

     

    
      
        
        

      

      
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          13 -

        
          

        

      

      
        
        

      

    

     

    (d)  No
      Title
      IV Plan is a “multi-employer pension plan,” as defined in Section 3(37) of
      ERISA, nor is any Title IV Plan a plan described in Section 4063(a) of ERISA.
      Except as set out in Section 3.16 of the Disclosure Schedule, no Plan that
      is a
“registered pension plan” as that term is defined in subsection 248(1) of the
      Income Tax Act (Canada) (hereinafter an “RPP”) is a multi-employer pension plan
      as defined under the provisions of applicable Law.

     

    (e)  Each
      Plan
      is and has heretofore been established, registered, qualified, funded, invested
      and administered in all material respects in accordance with its terms and
      in
      all material respects with the requirements of applicable Law, including ERISA,
      the Code and the Income Tax Act (Canada) and in accordance with all
      understandings, written or oral, between the Seller or any Company and employees
      or former employees of any Company.

     

    (f)  All
      liabilities of the Companies (whether accrued, absolute, contingent or
      otherwise) related to all Plans have been fully and accurately disclosed in
      accordance with GAAP in the Financial Statements and will be fully and
      accurately disclosed in the Closing Statement in all material
      respects.

     

    (g)  No
      improvements to any Plan have been promised and no amendments or improvements
      to
      any Plan will be made or promised by any Company or the Seller prior to
      Closing.

     

    (h)  Each
      Plan
      intended to be “qualified” within the meaning of Section 401(a) of the Code has
      been determined to be so qualified by the Internal Revenue Service (or, where
      there is no determination letter but a qualified plan is based upon a master
      and
      prototype or volume submitter form, the sponsor of such form has received an
      advisory opinion as to the form upon which any Company is entitled to rely
      under
      applicable Internal Revenue Service procedures) and, to the Knowledge of Seller,
      no event or circumstance exists that has or is likely to result in the
      revocation of such qualification or which requires or could require action
      under
      the compliance resolution programs of the IRS to preserve such
      qualification.

     

    (i)  To
      the
      Knowledge of Seller, there is no pending or threatened legal action, legal
      or
      regulatory proceeding or investigation, other than routine or immaterial claims
      for benefits, concerning any Plan or, to the Knowledge of the Seller, any
      fiduciary or service provider thereof and to the Knowledge of the Seller, there
      is no basis for any such legal action, proceeding or investigation. No event
      has
      occurred with respect to any RPP which would entitle any Person to cause the
      wind-up or termination of such RPP in whole or in part.

     

    (j)  Except
      with respect to those Plans identified on Section 3.16 of the Disclosure
      Schedule, no Plan provides benefits subsequent to termination of employment
      to
      employees or their beneficiaries (except as required by applicable state
      insurance laws and Title I, Part 6 of ERISA).

     

    (k)  With
      respect to each Plan for which a separate fund of assets is or is required
      to be
      maintained, full payment has been made of all amounts that Seller is required,
      under the terms of each such Plan, applicable Law or any collective bargaining
      agreement, to have paid as contributions to that Plan as of the Closing Date
      and
      each such Plan is fully funded or fully insured on an ongoing, solvency and
      wind-up basis.

     

    
      
        
        

      

      
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          14 -

        
          

        

      

      
        
        

      

    

     

    (l)  The
      execution of this Agreement and the consummation of the transactions
      contemplated hereby (including the Mercury Contribution) will not, by itself
      or
      in combination with any other event, result in any payment (whether of severance
      pay or otherwise) becoming due from any Plan to any current or former director,
      officer, consultant or employee of the Seller or result in the vesting,
      acceleration of payment or increases in the amount of any benefit payable to
      or
      in respect of any such current or former director, officer, consultant or
      employee.

     

    (m)  Each
      Plan
      subject to the laws of any jurisdiction outside of the United States (i) if
      intended to qualify for special tax treatment meets all requirements for such
      treatment, (ii) is fully funded and has been fully accrued for on the applicable
      Company’s financial statements, and (iii) if required to be registered, has been
      registered with the appropriate authorities and has been maintained in good
      standing with the appropriate regulatory authorities.

     

    (n)  Placard
      has complied with its obligations under the governing rules of the relevant
      Plan, including making all contributions required to be made under those rules
      and any agreement with any present employees of Placard.

     

    (p) Placard
      is not an employer sponsor in an Australian Superannuation Arrangement. Placard
      contributes to an Australian Superannuation Arrangement and does not have any
      other obligation, liability or duty to make any payment to any person, in
      respect of any Australian Superannuation Arrangements.

     

    (q) Placard
      is not required to make superannuation contributions to an Australian
      Superannuation Arrangement that provides defined benefits (whether or not that
      Australian Superannuation Arrangement also provides accumulation style
      benefits).

     

    (r) A
      change
      of control in Placard will not change the existing participation / contribution
      arrangements with an Australian Superannuation Arrangement that it currently
      contributes to.

     

    (s) Placard
      has complied with all of its superannuation obligations, duties and liabilities
      in respect of its employees under all laws and regulations.

     

    (t) Except
      in
      the case of Ganesh Ganeshalingham, Placard contributes superannuation on behalf
      of each employee at a rate not exceeding 9%.

     

    (u) In
      respect of all its employees, Placard has paid an amount not less than the
      minimum superannuation contributions on the correct earnings base so as to
      not
      incur liability under the Superannuation Guarantee (Administration) Act 1992
      or
      the Superannuation Guarantee Charge Act 1992.

     

    (v) There
      is
      no matching of superannuation contribution arrangement in place.

     

    (w) Prior
      to
      and as at the Closing Date, no superannuation contributions were or are required
      to be made by Placard in respect of any contractors.

     

    
      
        
        

      

      
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          15 -

        
          

        

      

      
        
        

      

    

     

    3.17.  Tax
      Matters.
      

     

    (a)  Each
      of
      the Companies has timely filed (or has been appropriately included in) any
      Tax
      Returns required to be filed by or with respect to it. All such Tax Returns
      are
      true, correct and complete in all material respects. All Taxes payable by each
      Company or any of its Subsidiaries (whether or not showing on any Tax Return)
      have been timely paid. Except for an extension granted until September 15,
      2006,
      for MDC Holdco and its Subsidiaries to file its 2005 consolidated tax return,
      none of the Companies nor any of their Subsidiaries currently is the beneficiary
      of any extension of time within which to file any Tax Return. No written claim
      has ever been made by any taxing authority in a jurisdiction in which a Company
      or Subsidiary does not file Tax Returns that such Company or Subsidiary, as
      the
      case may be, is or may be subject to taxation in that jurisdiction.


     

    (b)  There
      are
      no Encumbrances for Taxes upon any property or assets of the Companies, except
      for Encumbrances for Taxes not yet due and payable. Each Company and each of
      its
      Subsidiaries has withheld and paid or remitted to the appropriate Governmental
      Entity all Taxes required to have been withheld and paid or remitted in
      connection with any amounts paid or owing to any present or former employee,
      independent contractor, creditor, stockholder, non-resident (or deemed
      non-resident) or other third party. Each Company and its Subsidiaries has
      charged, collected and remitted, on a timely basis, all Taxes as required under
      applicable Law on any sale or delivery whatsoever, made by such
      entity.

     

    (c)  No
      federal, state, provincial, local or foreign audits, examinations,
      investigations or other administrative proceedings (such audits, examinations,
      investigations and other administrative proceedings referred to collectively
      as
“Audits”)
      or
      court proceedings are presently pending or, to the Knowledge of Seller,
      threatened with regard to any Taxes or Tax Returns filed by or on behalf of
      any
      Company or any of its Subsidiaries, and none of the Companies nor any of their
      Subsidiaries has received a written notice from any taxing authority of any
      intention to open such an Audit, a request for information related to Tax
      matters, or a notice of deficiency or proposed adjustment or reassessment or
      a
      notice of reassessment that is outstanding for any amount of Tax proposed
      asserted or assessed against any Company or any of its Subsidiaries. There
      are
      no outstanding requests, agreements, consents or waivers to extend the statutory
      period of limitations applicable to the assessment or reassessment of any Taxes
      or deficiencies against any Company or any Subsidiary of a Company.

     

    (d)  None
      of
      the Companies nor any of their Subsidiaries is a party to any material tax
      sharing, tax indemnity or other agreement or arrangement with any Person. No
      Company nor any Subsidiary of the Companies is a party to any agreement,
      contract, arrangement or plan that has resulted or could result, separately
      or
      in the aggregate, in the payment of any “excess parachute payment” within the
      meaning of section 280G of the Code, or any amount that would not be fully
      deductible as a result of the application of Section 162(m) of the Code (or,
      in
      each case, any corresponding provision of state, local or foreign law). None
      of
      the Companies nor any of their Subsidiaries has been a United States real
      property holding corporation within the meaning of section 897(c)(2) of the
      Code
      during the applicable period specified in section 897(c)(1)(A)(ii). None of
      the
      Companies nor any of their Subsidiaries has been a member of an affiliated
      group
      filing a consolidated return within the meaning of section 1502 of the Code
      and
      the Treasury Regulations promulgated thereunder, other than such a group the
      common parent of which was such Company, and none of the Companies nor any
      of
      their Subsidiaries has any liability for the Taxes of any other Person pursuant
      to Treasury Regulation section 1.1502-6 (or any corresponding provision of
      state, local, or foreign law), as a transferee or successor, by contract or
      otherwise.

     

    
      
        
        

      

      
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    (e)  The
      unpaid Taxes of the Companies and their Subsidiaries did not, as of the most
      recent fiscal month end, exceed the accrual for Tax liability (rather than
      any
      reserve for deferred Taxes established to reflect timing differences between
      book and Tax income) set forth on the face of the Financial Statements as of
      the
      Balance Sheet Date, and will not exceed that accrual as adjusted for the passage
      of time through the Closing Date in accordance with the past practice and custom
      of the Companies and their Subsidiaries in filing their Tax Returns. Since
      the
      Balance Sheet Date, none of the Companies nor any of their Subsidiaries has
      incurred any liability for Taxes arising from extraordinary gains or losses,
      as
      that term is defined for purposes of GAAP, other than in the ordinary course
      of
      business consistent with past custom and practice.

     

    (f)  None
      of
      the Companies nor any of their 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 (1) a change in method of accounting for a
      taxable period (or portion thereof) ending on or before the Closing Date, (2)
      any “closing agreement” as described in Section 7121 of the Code (or any
      corresponding provision of state, local or foreign Law), (3) any “intercompany
      transaction” or “excess loss account” within the meaning of the Treasury
      Regulations (or any corresponding provision of state, local or foreign Law),
      (4)
      any installment sale or open transaction made on or prior to the Closing Date,
      or (5) as a result of any prepaid amount received on or prior to the Closing
      Date.

     

    (g)  None
      of
      the Companies nor any of their Subsidiaries has distributed stock of another
      Person, or had its stock distributed by another Person, in a transaction that
      was purported or intended to be governed in whole or in part by section 355
      or
      section 361 of the Code. None of the Companies nor any of their
      Subsidiaries
      has
      participated, within the meaning of Treasury Regulation Section 1.6011-4(c),
      in
      (A) any “reportable transaction” within the meaning of Section 6011 of the Code,
      and the Treasury Regulations thereunder, (B) any “confidential corporate tax
      shelter” within the meaning of Section 6111 of the Code and the Treasury
      Regulations thereunder, or (C) any “potentially abusive tax shelter” within the
      meaning of Section 6112 of the Code and the Treasury Regulations
      thereunder.

     

    (h)  Each
      plan, program,
      arrangement or agreement that constitutes in any part a nonqualified deferred
      compensation plan within the meaning of Section 409A of the Code is identified
      as such on Section 3.17(h) of the Disclosure Schedule. Since December 31, 2004,
      each plan, program, arrangement or agreement identified or required to be
      identified on Schedule
      3.17(h)
      has been
      operated and maintained in all material respects in accordance with the
      requirements of IRS Notice 2005-1 and a good faith, reasonable interpretation
      of
      Section 409A of the Code and its purpose with respect to amounts deferred
      (within the meaning of Section 409A of the Code) after December 31,
      2004.

     

    
      
        
        

      

      
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    (i)  None
      of
      the Companies nor any of their Subsidiaries have participated, directly or
      through a partnership, in a transaction or series of transactions contemplated
      in subsection 247(2) of the Tax Act or any comparable Law of any province
      or territory in Canada.
      No
      items
      of income or expense will be reallocated under Section 482 of the Code or any
      similar provision under applicable state or local Law for any taxable
      period (or portion thereof) ending after the Closing Date with respect to
      any material transactions or arrangements between or among any of a Company,
      its
      Subsidiaries, or any of its or their Affiliates.

     

    (j)  None
      of
      the Companies nor any of their Subsidiaries will be required to include in
      a
      taxable period ending after the Closing Date any amount of net taxable income
      (after taking into account deductions claimed for such a period that relate
      to a
      prior period) attributable to income that accrued in a prior taxable period
      but
      that was not included in taxable income for that or another prior taxable
      period. Without limiting the generality of the foregoing, there are no
      circumstances existing which could result in the application to a Company or
      any
      of its Subsidiaries of sections 78, 80, 80.01, 80.02, 80.03, 80.04 or 160 of
      the
      Tax Act or any analogous provision of any comparable Law of any province or
      territory of Canada.

     

    (k)  Seller
      is
      not a non-resident of Canada for purposes of section 116 of the Tax
      Act.

     

    (l)  Solely
      with respect to Tax matters relating to Placard:

     

    (i)  No
      asset
      of Placard has been the subject of a claim for rollover relief under Part IIIA
      of the ITAA 1936 or Subdivision 126-B of the ITAA 1997 in circumstances where
      there might be an application of either section 160ZZOA of the ITAA 1936 or
      Subdivision
      104-J of the ITAA 1997.

     

    (ii)  Placard:

     

    
      	(A)  	
              is
                registered for GST under the GST Law, if required by the GST
                Law;

            


    

     

    
      	(B)  	
              has
                complied in all respects with the GST Law;
                and

            


    

     

    
      	(C)  	
              is
                not in default of any obligation to make any payment or return (including
                any Business Activity Statement) or notification under the GST
                Law.

            


    

     

    (m)  
      Solely
      with respect to Placard, no third-party debt forgiveness has occurred prior
      to
      the Closing Date.

     

    3.18.  Intellectual
      Property.
      Section
      3.18 of the Disclosure Schedule sets forth a complete and accurate list of
      (a)
      all patents, trademarks, trade names, industrial designs and domain names and
      all copyright registered in the name of any of the Companies by any of the
      Companies, all applications therefor, and all licenses (as licensee or licensor)
      and other material agreements relating thereto other than licenses relating
      to
      off-the-shelf software, and (b) all written agreements relating to any other
      Intellectual Property and any other technology, know-how and processes which
      any
      Company is licensed or authorized by others to use or which any Company has
      licensed or authorized for use by others other than licenses relating to
      off-the-shelf software. Each of the Companies owns, or is licensed to use or
      otherwise possesses legally enforceable rights in, its Company Intellectual
      Property. Immediately after the Closing, each Company will continue to have
      the
      right to use or otherwise exploit the Company Intellectual Property in the
      same
      manner as such Company Intellectual Property is used or otherwise exploited
      by
      such Company prior to the Closing. To the Knowledge of Seller, there are no
      oppositions, cancellations, invalidity proceedings, interferences or
      re-examination proceedings pending with respect to any Company Intellectual
      Property. To the Knowledge of Seller, the use by each Company of its Company
      Intellectual Property does not infringe any Intellectual Property rights of
      any
      third party. Neither Seller nor any of the Companies has received any written
      notice from any third party challenging the right of any Company to use any
      of
      the Company Intellectual Property. To the Knowledge of the Seller, there has
      never been any instance of confusion between the Company and any entity with
      the
      element "Mercury Graphics" in its name nor, except as disclosed in the
      Disclosure Schedule, any communication from or to any third party regarding
      an allegation of a likelihood of confusion between the Company and such
      entity.

     

    
      
        
        

      

      
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    3.19.  Labor
      Matters.
      Except
      as set forth in Section 3.19 of the Disclosure Schedule, there is no labor
      strike, dispute, slowdown, stoppage, lockout or other form of industrial labor
      action currently in effect, pending, or to the Knowledge of Seller, threatened
      against any Company.

     

    (a)  Except
      as
      set forth in Section 3.19 of the Disclosure Schedule, none
      of the
      Companies is a party to or bound by any collective bargaining
      agreement
      (which
      includes, with respect to Placard, any registered or unregistered collective
      agreement),
      labor
      contract, letter of understanding, letter of intent of voluntary recognition
      agreement with any labor, union, trade or employee organization.
      Except
      as set forth in Section 3.19 of the Disclosure Schedule, Placard is not bound
      by
      any state or federal award, or any Notional Agreement Preserving State Awards
      or
      Preserved State Agreement (as defined in the Australia Workplace
      Relations Act 1996)
      derived
      from a state award or agreement, with respect to its employees.

     

    (b)  No
      labor union
      has been
      certified as bargaining agent for any of the employees of any
      Company,
      and,
      with respect to Placard, no trade union other than the Australian Manufacturing
      Workers' Union is involved in the business of Placard. None of the Companies
      is
      a party to or bound by any collective bargaining agreement, labour contract,
      letter of understanding, letter of intent, or voluntary recognition agreement
      with any labour union, trade union, or employee organization.
      

     

    (c)  There
      is
      no unfair labor practice charge or complaint pending or threatened against
      any
      Company nor are the employees of any Company currently subject to any union
      organization effort.

     

    (d)  Since
      the
      enactment of the WARN Act, none of the Companies has effectuated a “plant
      closing”
(as
      defined in the WARN Act) affecting any site of employment or one or more
      facilities or operating units within any site of employment or facility of
      the
      Companies, and there has not occurred a “mass
      layoff”
(as
      defined in the WARN Act) or any mass termination under other applicable laws
      affecting any site of employment or facility of the Companies.

     

    
      
        
        

      

      
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    (e)  There
      are
      no outstanding orders or, to the Knowledge of Seller, investigations made under
      applicable occupational health and safety legislation related to any Company.
      There are no current, pending or, to the Knowledge of Seller, threatened charges
      against any Company under occupational health and safety laws. There have been
      no fatal or critical accidents which have occurred in the course of the
      operation of the businesses which might lead to charges under such laws. To
      the
      Knowledge of Seller, there are no materials present in the operation of any
      Company which may result in an occupational disease.

     

    (f) Placard
      has complied in all material respects with all awards, collective agreements
      and
      other form of agreements made or taken to exist under an Australian industrial
      or labor statute.

     

    3.20.  Indebtedness.
      Except
      as set forth in Section 3.20 of the Disclosure Schedules, the Companies have
      no
      outstanding Indebtedness other than (i) Indebtedness outstanding between Seller
      or its affiliates (“Intercompany
      Indebtedness”)
      and
      (ii) trade or business obligations incurred in the ordinary course of business.
      Except as set forth in Section 5.5 of the Disclosure Schedule, all Intercompany
      Indebtedness will be paid in full or otherwise satisfied on or prior to the
      Closing Date.

     

    3.21.  Compensation
      of and Contracts With Employees.
      Section
      3.21 of the Disclosure Schedule sets forth a complete and accurate list of,
      with
      respect to each Company, (a) each employee of such Company and the rate,
      character and amount of compensation paid to each such employee for the fiscal
      year ended December 31, 2005, and (b) the rate, character and amount of
      compensation paid to each such employee through July 31, 2006. There have been
      no changes in such compensation since such date outside the ordinary course
      of
      business. Except
      as
      set forth in Section 3.21 of the Disclosure Schedule
      and with
      the exception of Placard,
      no
      Company has any employment agreement, written or oral, with any currently active
      employee, including any agreement to provide any severance,
      bonus
      or
      benefit to any such employee.
      Except
      as set forth in Section 3.21 of the Disclosure Schedule, the employment of
      each
      employee of Placard can be terminated lawfully by Placard giving the employee
      not more than 5 weeks' notice and Placard has no agreement with any of its
      employees to provide any bonus or benefit to any such employee. No policies
      or
      procedures of Placard are binding contractually on it and each policy or
      procedure can be varied lawfully at Placard's sole discretion at any time and,
      except as set forth in Section 3.21 of the Disclosure Schedule, no contractors
      are engaged within Placard's business and the engagement of any contractors
      engaged within Placard's business can be terminated on not more than 1 month's
      notice. No Company has any severance or redundancy policy which provides for
      any
      entitlements beyond that required by applicable Law.
      Except
      as set forth in Section 3.21 of the Disclosure Schedule, since December 31,
      2005, no Company has made any pension, bonus or other payment, other than base
      salary, or become obligated to make any such payment, to any of its employees,
      other than as contemplated by the terms of the agreements described on Schedule
      3.21. Except as set forth in Section 3.21 of the Disclosure Schedule, no Company
      has any outstanding loans or advances to any employee. No Company has paid,
      nor
      will it be required to pay, any bonus, fee, incentive
      payment, distribution,
      remuneration or other compensation to any Person (other than salaries, wages
      or
      bonuses paid or payable to employees in the ordinary course of business) as
      a
      result of the transactions contemplated by this Agreement.

     

    
      
        
        

      

      
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          20 -

        
          

        

      

      
        
        

      

    

     

    3.22.  Potential
      Conflicts of Interest.
      Except
      as set forth in Section 3.22 of the Disclosure Schedule, no officer or director
      of Seller or any of the Companies (a) owns, directly or indirectly, any interest
      in (excepting not more than 3% stock holdings for investment purposes in
      securities of publicly held and traded companies) or is an officer, director,
      employee or consultant of any Person which is a competitor, lessor, lessee,
      customer or supplier of any the Companies; (b) owns, directly or indirectly,
      in
      whole or in part, any tangible or intangible property which any of the Companies
      is using or the use of which is necessary for the business of the Companies;
      or
      (c) has any cause of action or other claim whatsoever against, or owes any
      amount to, any Company, except for claims in the ordinary course of business,
      such as for accrued vacation pay, accrued benefits under the Plans and similar
      matters and agreements.

     

    3.23.  Suppliers
      and Customers.
      Section
      3.23 of the Disclosure Schedule sets forth the ten (10) largest suppliers and
      ten (10) largest customers of each Company for the twelve (12) month period
      ending on July 31, 2006. No supplier or customer of material importance to
      any
      of the Companies has canceled or otherwise terminated, or to the Knowledge
      of
      Seller, threatened to cancel or otherwise to terminate, its relationship with
      any of the Companies or has during the last twelve (12) months decreased
      materially, or to the Knowledge of Seller, threatened to decrease or limit
      materially, its services, supplies or materials for use by any of the Companies
      or its usage or purchase of the services or products of any of the Companies
      except for normal cyclical changes related to customers’ businesses. To the
      Knowledge of Seller, no such supplier or customer intends to cancel or otherwise
      substantially modify its relationship with any Company, or to decrease
      materially or limit its services, supplies or materials to any Company, solely
      as a result of the transactions contemplated by this Agreement.

     

    3.24.  Accounts
      Receivable.
      All
      accounts and notes receivable reflected on the Interim Financial Statements,
      and
      all accounts and notes receivable arising subsequent to July 31, 2006, have
      arisen in the ordinary course of business, represent valid obligations owing
      to
      the applicable Company and have been collected or, to the Knowledge of the
      Seller, are collectible in the aggregate recorded amounts thereof in accordance
      with their terms, net of the reserve for uncollected accounts to be set forth
      on
      the Closing Statement.

     

    3.25.  No
      Undisclosed Liabilities.
      Except
      to the extent (a) reflected or reserved against in the Interim Financial
      Statements or the Closing Statement, (b) incurred in the ordinary course of
      business after July 31, 2006, or (c) described on any Disclosure Schedule,
      none
      of the Companies nor any of their Subsidiaries has any liabilities or
      obligations of any nature, whether accrued, absolute, contingent or otherwise
      (including without limitation as guarantor or otherwise with respect to
      obligations of others), which liabilities or obligations required to be recorded
      or reflected on a balance sheet by GAAP were not so recorded or reflected in
      the
      Year End Balance Sheet, the Interim Financial Statements or the Closing
      Statement.

     

    3.26.  Inventory.
      The
      inventory and supplies of each Company are adequate for such Company’s present
      needs in all material respects, and are in usable and salable condition in
      the
      ordinary course of its business.

     

    
      
        
        

      

      
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          21 -

        
          

        

      

      
        
        

      

    

     

    3.27.  Minutes
      Books.
      Complete copies of all minute books, certificates of registration, statutory
      books and registers of each Company have been provided or made available to
      the
      Purchaser, and such documents do not contain material inaccuracies or
      discrepancies of any kind and accurately record therein all actions taken by
      the
      Board of Directors and shareholders of such Company.

     

    3.28.  Warranty
      Claims; Product Liability.
      Except
      as set forth in Section 3.28 of the Disclosure Schedule, to the Knowledge of
      Seller the Companies have no actual or alleged liability for death, injury
      or
      damage to person or property as a result of any actual or alleged defect in
      any
      product sold, designed, built or manufactured by any of the Companies on or
      prior to the Closing Date in any amount which is not reserved against on the
      Closing Statement or fully covered by the Companies’ insurance policies, and
      there are no contractual product warranty claims arising out of defects in
      any
      product sold, designed, built or manufactured by any of the Companies on or
      prior to the Closing Date in amounts which are not either
      reserved against on the Closing Statement
      or
fully
      covered by the Companies’ insurance policies.

     

    3.29.  Brokers
      or Finders.
      No
      agent, broker, investment banker, financial advisor or other firm or Person
      is
      or will be entitled to any brokers’ or finder’s fee or other commission or
      similar fee in connection with the transactions contemplated by this Agreement
      except for Jefferies & Co., Inc., TD Securities and Guiliani Capital
      Advisors, whose fees and expenses will be paid by Seller in accordance with
      Seller’s agreement with such firm.

     

    Purchaser
      acknowledges that, except for the representations and warranties contained
      in
      this Article III, neither Seller nor any other Person acting on behalf of
      Seller, makes any representation or warranty, express or implied.

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF PURCHASER

     

    Purchaser
      represents and warrants to Seller, as of the date hereof and as of the Closing
      Date, that:

    


    4.1.  Organization.
      Purchaser (a) is a corporation or other legal entity duly organized, validly
      existing and, if applicable, in good standing under the laws of its jurisdiction
      of organization, (b) has all requisite corporate or other legal entity power
      and
      authority to carry on its business as it is now being conducted and to own
      the
      properties and assets it now owns and (c) is duly qualified or licensed to
      do
      business in every jurisdiction in which such qualification is
      required.

     

    4.2.  Authorization;
      Validity of Agreement.
      Purchaser has the requisite corporate or other legal entity power and authority
      and full legal right to execute, deliver and perform this Agreement and to
      consummate the Closing. The execution, delivery and performance by Purchaser
      of
      this Agreement and the consummation by Purchaser of the Closing have been duly
      authorized by the board of directors of Purchaser, and no other corporate action
      on the part of Purchaser is necessary to authorize the execution, delivery
      and
      performance by Purchaser of this Agreement or the consummation by Purchaser
      of
      the Closing. This Agreement has been duly executed and delivered by Purchaser,
      and, assuming due and valid authorization, execution and delivery hereof by
      Seller, is a valid and binding obligation of Purchaser, enforceable against
      Purchaser in accordance with its terms.

     

    
      
        
        

      

      
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    4.3.  Consents
      and Approvals; No Violations.
      Except
      for the filings, permits, authorizations, consents and approvals as may be
      required under the HSR Act and applicable non-U.S. laws with respect to foreign
      investment and competition, and other applicable requirements of state or
      provincial securities or blue sky laws, none of the execution, delivery or
      performance of this Agreement by Purchaser or the consummation by Purchaser
      of
      the Closing will (a) conflict with or result in any breach of any provision
      of
      the certificate of incorporation or by-laws or similar organizational document
      of Purchaser, (b) require any filing with, or permit, authorization, consent
      or
      approval of, any Governmental Entity, (c) result in a violation or breach of,
      or
      constitute (with or without notice or lapse of time or both) a default (or
      give
      rise to any right of termination, cancellation or acceleration) under, any
      of
      the terms, conditions or provisions of any note, bond, mortgage, indenture,
      lease, license, contract, agreement or other instrument or obligation to which
      Purchaser or any of its Subsidiaries is a party or by which any of them or
      any
      of their respective properties or assets may be bound or (d) violate any Law
      applicable to Purchaser, any of its Subsidiaries or any of their respective
      properties or assets, excluding from the foregoing clauses (b), (c) and (d)
      such
      violations, breaches or defaults which would not, individually or in the
      aggregate, either (i) have an adverse effect on Purchaser’s ability to
      consummate the Closing or perform its obligations under this Agreement or
      (ii) impede in any respect or delay the consummation of the
      Closing.

     

    4.4.  Acquisition
      of Shares for Investment; Ability to Evaluate and Bear Risk.
      (a)  Purchaser
      is acquiring the Shares for investment and not with a view toward, or for sale
      in connection with, any distribution thereof, nor with any present intention
      of
      distributing or selling the Shares. Purchaser agrees that the Shares may not
      be
      sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed
      of without registration under the Securities Act and qualification under any
      applicable state or provincial securities laws, except pursuant to an exemption
      from such registration under such Act and qualification under such
      laws.

     

    (b)  Purchaser
      is able to bear the economic risk of holding the Shares for an indefinite
      period, and has knowledge and experience in financial and business matters
      such
      that it is capable of evaluating the risks of the investment in
      Shares.

     

    4.5.  Availability
      of Funds.
      Purchaser has access to sufficient immediately available funds in cash or cash
      equivalents, and will at the Closing have sufficient immediately available
      U.S.
      Dollar funds in cash, to pay the Purchase Price and to pay all other amounts
      payable in connection with this Agreement and effect the Closing.

     

    4.6.  Litigation.
      Each of
      Purchaser and its Subsidiaries (a) is not subject to any outstanding
      injunctions, judgments, orders or decrees and (b) is not a party or, to the
      knowledge of Purchaser, threatened to be made a party, to any actions, suits,
      proceedings, hearings or investigations of, in, or before any Governmental
      Entity, in the case of clauses (a) and (b), that are related to this Agreement
      or the transactions contemplated hereby or that would, individually or in the
      aggregate, either (i) have an adverse effect on the ability of Purchaser to
      consummate the Closing or perform its obligations under this Agreement or
      (ii) impede in any respect or delay the consummation of the
      Closing.

     

    
      
        
        

      

      
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    4.7.  Investigation
      by Purchaser; Seller’s Liability.
      For
      purposes of the Purchaser’s rights to indemnification pursuant to Article VIII
      of this Agreement, Purchaser acknowledges that in entering into this Agreement
      (a) it has relied solely on (i) the specific representations and warranties
      of
      Seller set forth in Article III and schedules thereto and (ii) its own
      independent investigation, review and analysis of the business, operations,
      assets, liabilities, results of operations, financial condition, software,
      technology and prospects of the Companies (and not on any factual
      representations or opinions of Seller or Seller’s representatives except the
      specific representations and warranties of Seller set forth in Article III
      and
      schedules thereto) and (b) that neither Seller nor the Companies or any of
      their
      respective directors, officers, shareholders, employees, Affiliates, controlling
      persons, agents, advisors or representatives makes or has made any oral or
      written representation or warranty, either express or implied, as to the
      accuracy or completeness of any of the information (including in the descriptive
      memorandum relating to the Companies provided to Purchaser, in materials
      furnished in the Company’s data room, in presentations by the Company’s
      management or otherwise) provided or made available to Purchaser or its
      directors, officers, employees, shareholders, Affiliates, controlling persons,
      agents, advisors or representatives (except the specific representations and
      warranties of Seller set forth in Article III and schedules thereto). The
      foregoing acknowledgment shall not be deemed to apply to or limit in any way
      any
      rights or claims by Purchaser against Seller in respect of fraud or intentional
      breach.

     

    4.8.  Brokers
      or Finders.
      Neither
      Purchaser nor any of its Subsidiaries or its Affiliates has entered into any
      agreement or arrangement entitling any agent, broker, investment banker,
      financial advisor or other firm or Person to any broker’s or finder’s fee or any
      other commission or similar fee in connection with any of the transactions
      contemplated by this Agreement.

     

    Seller
      acknowledges that, except for the representations and warranties contained
      in
      this Article IV, neither Purchaser nor any other Person acting on behalf of
      Purchaser, makes any representation or warranty, express or
      implied.

     

    ARTICLE
      V

    ADDITIONAL
      COVENANTS OF THE PARTIES

     

    5.1.  Tax
      Matters. 

     

    (a)  Apportionment
      of Taxes.
      With
      respect to all jurisdictions in which Tax Returns are filed:

     

    (i)  In
      order
      appropriately to apportion any Taxes relating to a period that includes the
      Closing Date, the parties hereto will, to the extent permitted by applicable
      Law, elect with the relevant taxing authority to treat for all purposes the
      Closing Date as the last day of a taxable period of the Company (a “Short
      Period”),
      and
      such period shall be treated as a Short Period and a period ending on the
      Closing Date for purposes of this Agreement. Accordingly, to the
      extent permitted or required by applicable Law: (i) the taxable period of the
      Company and its Subsidiaries that began on January 1 of the calendar year that
      includes the Closing Date shall be treated as closing as of the close of
      business on the Closing Date; and (ii) no election shall be made under Treasury
      Regulation Section 1.1502-76(b)(2)(ii) or Treasury Regulation Section
      1.1502-76(b)(2)(iii) for the month that includes the Closing Date. 

     

    
      
        
        

      

      
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    (ii)  For
      purposes of this Agreement, the method of apportioning any Tax with respect
      to a
      taxable period that begins before, and ends after, the Closing Date (a “Straddle
      Period”), between the portion of such Straddle Period up to and including the
      Closing Date and the portion of such Straddle Period beginning after the Closing
      Date, shall be (i) in the case of a Tax that is not an income Tax or any
      Tax based on gross income, sales, gross receipts or specific transactions
      (including real property taxes), the total amount of such Tax for the Straddle
      Period in question multiplied by a fraction, the numerator of which is the
      number of days in the Straddle Period through and including the Closing Date,
      and the denominator of which is the total number of days in such Straddle
      Period, and (ii) in the case of an income Tax and any Tax that is based on
      any
      of gross income, sales, gross receipts or specific transactions, the Tax that
      would be due with respect to the portion of the Straddle Period through and
      including the Closing Date, if such portion of the Straddle Period were a
      separate taxable period, except that exemptions, allowances, deductions or
      credits that are calculated on an annual basis (such as the deduction for
      depreciation or capital allowances) shall be apportioned on a per diem
      basis.

     

    (b)  Transfer
      Taxes and Other Closing Expenses.
      Seller
      shall timely pay when due, or shall reimburse Purchaser promptly upon demand
      and
      delivery of proof of payment of, all excise, sales, transfer, documentary,
      filing, recordation and other similar taxes, levies, fees and charges, if any
      (including all real estate transfer taxes and conveyance and recording fees,
      if
      any), that may be imposed upon, or payable or collectible or incurred in
      connection with, this Agreement and the transactions contemplated hereby (such
      Taxes, “Transfer
      Taxes”).
      Purchaser shall cooperate with Seller and, subject to the other terms of this
      Agreement, take any action reasonably requested by Seller which does not cause
      Purchaser to incur any cost or material inconvenience in order to minimize
      Transfer Taxes. Notwithstanding the provisions of Section 5.1(c), which shall
      not apply to Tax Returns relating to Transfer Taxes, any Tax Returns that must
      be filed in connection with Transfer Taxes shall be prepared and filed when
      due
      by the party primarily or customarily responsible under the applicable local
      law
      for filing such Tax Returns, and such party will use its reasonable efforts
      to
      provide such Tax Returns to the other party at least 10 Business Days prior
      to
      the due date for such Tax Returns. All other expenses of Closing will be paid
      by
      the party incurring such expense. 

     

    (c)  Tax
      Returns.
      

     

    (i)  Seller
      shall be responsible for the timely filing (taking into account any extensions
      received from the relevant tax authorities) of all Tax Returns required by
      law
      to be filed by (or that include) each Company or its Subsidiaries in respect
      of
      any period ending on or prior to the Closing Date. Such Tax Returns shall be
      prepared in accordance with the past practice and custom of each Company and
      its
      Subsidiaries in filing its or their Tax Returns, shall be true, correct and
      in
      all material respects complete and shall be prepared in accordance with
      applicable federal, state, provincial, local or foreign Tax laws, regulations
      or
      rules. Seller shall cause the Companies to timely pay all Taxes shown as due
      on
      such Tax Returns. Seller shall be entitled to any and all tax refunds during
      the
      periods for which Seller is responsible for the timely filing of all Tax Returns
      in accordance with this Section 5.1(c)(i). Purchaser shall promptly transfer
      such refunds received by the Purchaser to the Seller when obtained from a taxing
      authority within 45 days.

     

    
      
        
        

      

      
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    (ii)  Purchaser
      shall be responsible for the timely filing (taking into account any extensions
      received from the relevant tax authorities) of all Tax Returns required by
      law
      to be filed by (or include) each Company or its Subsidiaries in respect of
      any
      period ending after the Closing Date (other than income Tax Returns with respect
      to periods for which a consolidated, combined or unitary Tax Return of Seller
      will include the operations of such Company and its Subsidiaries), and, subject
      to the allocation of Taxes discussed in Section 5.1(a) hereof and this
      subparagraph (ii), shall be responsible for all
      Taxes
      shown as due on such Tax Returns. Any such Tax Returns that relate in whole
      or
      in part to a Straddle Period shall be prepared on a basis consistent with those
      prepared for prior taxable periods unless a different treatment of any item
      is
      required by an intervening change in law. Seller shall be responsible for,
      and
      shall pay promptly upon request by Purchaser, and in any event within no more
      than three days’ prior to the filing deadline for such Tax Return, all Taxes
      shown as due on such Tax Returns, to the extent such Taxes are allocable under
      the principles of Section 5.1(a) above to a taxable period ending on or before
      the Closing Date or to the portion of a Straddle Period ending on the Closing
      Date.

     

    (iii)  Purchaser
      shall be entitled to review and comment on any Tax Returns for each Company
      for
      any taxable period that ends on or prior to the Closing Date. Seller shall
      submit a draft of any such Tax Return (with copies of any relevant schedules,
      work papers and other documentation then available) to Purchaser at least 30
      days before the date such Tax Return is required to be filed with the relevant
      tax authority for its review and comment, and Seller shall make such changes
      to
      such Tax Returns as are reasonably requested by Purchaser, insofar as such
      changes relate to or affect amounts for which Purchaser would be responsible
      under the provisions of this Section 5.4, such changes are consistent with
      the
      past practice of each Company and its Subsidiaries in filing its or their Tax
      Returns, and such changes are consistent with applicable Law.

     

    (d)  Certain
      Post-Closing Actions which Affect Seller’s Liability for Taxes.
      With
      respect to each Company:

     

    (i)  Purchaser
      shall not permit such Company to take any action that reasonably could be
      expected to increase Seller’s liability for Taxes for a taxable period (or
      portion thereof) ending on or prior to the Closing Date, without Seller’s
      written consent.

     

    (ii)  None
      of
      Purchaser or any Affiliate of Purchaser shall (or shall cause or permit such
      Company to) amend, refile or otherwise modify any Tax Return relating in whole
      or in part to any Company with respect to any taxable year or period ending
      on
      or before the Closing Date (or with respect to any Straddle Period, to the
      extent the changes made to such Tax Return affect the portion of such Straddle
      Period ending on the Closing Date), if such amendment, refiling or other
      modification would have the result of increasing the liability of the Seller
      for
      Taxes under this Agreement, without the prior written consent of
      Seller.

     

    
      
        
        

      

      
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    (iii)  None
      of
      Purchaser or any Affiliate of Purchaser shall (or shall cause or permit such
      Company to) carryback for federal, state, provincial, local or foreign tax
      purposes to any taxable period, or portion thereof, of such Company or Seller
      or
      any Affiliate of Seller ending before, or which includes, the Closing Date
      any
      operating losses, net operating losses, capital losses, tax credits or similar
      items arising in, resulting from or generated in connection with a taxable
      year
      of Purchaser or any Affiliate of Purchaser, or portion thereof, ending on or
      after the Closing Date except to the extent Seller provides its specific
      authorization for such a carryback, which authorization will not be unreasonably
      withheld, conditioned or delayed.

     

    (iv)  If
      an
      examination of any federal, state, local or other Tax Return of Seller or the
      Company for any taxable period (or portion thereof) ending on or before the
      Closing Date shall result (by settlement or otherwise) in any adjustment which
      permits Purchaser, the Company to increase deductions, losses or tax credits
      or
      decrease the amount of reportable income, gains or recapture of tax credits
      (including by way of any increase in basis) for one or more periods ending
      after
      the Closing Date, Seller shall notify Purchaser and provide it with adequate
      information so that Purchaser can reflect on its or the Company’s Tax Returns
      such increases in deductions, losses or tax credits or decreases in income,
      gains or recapture of tax credits.

     

    (e)  Termination
      of Existing Tax Sharing Agreements.
      Any and
      all existing Tax sharing agreements or arrangements, written or oral, between
      Seller and any Company or any Subsidiary, shall terminate as of the Closing,
      and
      after the Closing Date, neither any Company, any Subsidiary, the Purchaser,
      nor
      any Affiliate of any of them, shall have any liability thereunder after the
      Closing Date.

     

    (f)  Cooperation.
      Purchaser and Seller shall cooperate fully, as and to the extent reasonably
      requested by the other party, in connection with the filing of any Tax Returns
      and any audit, litigation or other proceeding with respect to Taxes of or
      related to the Companies or any Subsidiary. Such cooperation shall include
      the
      retention and (upon the other party's request) the provision of records and
      information reasonably relevant to any such Tax Return, audit, litigation or
      other proceeding and making employees available on a mutually convenient basis
      to provide additional information and explanation of any material provided
      hereunder. Each of Seller and Purchaser agrees to (i) retain or cause to be
      retained all books and records in its possession on the Closing Date relating
      to
      Tax matters of or pertaining to a Company or any Subsidiary for any taxable
      period beginning before the Closing Date until expiration of the statute of
      limitations (including any extensions thereof) of the respective taxable
      periods, and to abide by all record retention agreements entered into with
      any
      taxing authority and (ii) give each other party reasonable written notice prior
      to transferring, destroying or discarding any such books and records and, if
      the
      other party so requests, allow the requesting party to take possession of such
      books and records.

     

    
      
        
        

      

      
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    (g)  Allocation
      of Purchase Price.
      The
      Purchase Price shall be allocated among the Shares of each Base Company in
      the
      manner specified in Schedule 5.1, and such schedule shall be revised from time
      to time to reflect any post-closing adjustment to the Purchase Price. Purchaser
      and Seller shall follow the allocations set out in Schedule 5.1 in determining
      and reporting their liabilities for any Taxes and, without limitation, shall
      file all of their respective Tax Returns in accordance and in a manner
      consistent with such allocations.

     

    (h)  Seller
      Tax Covenants.
      Seller
      agrees to notify Purchaser of any proposed action to occur on or prior to the
      Closing Date affecting the Taxes of any of the Companies, including making
      or
      changing any material Tax election, settling or compromising any claim for
      refund, consenting to any extension or waiver of the limitation period
      applicable to any Tax claim or assessment, and taking any other similar action
      in respect of Taxes; provided, however, that none of the Companies shall take
      such action if Purchaser determines that such action will have an adverse impact
      on any of the Companies in a post-Closing taxable period.

     

    (i) Tax
      Elections.
      Seller
      shall be responsible for filing all Tax elections as provided for in the Asset
      Purchase Rollover Agreement entered into between Seller and Mercury pursuant
      to
      the Mercury Contribution, and Seller shall indemnify and save harmless Mercury
      from any interest, penalties or other Tax liability, or any Losses, arising
      in
      connection with such Tax elections, other than any Tax liability arising solely
      as a consequence of an agreed amount (for purposes of such Tax elections) in
      respect of a property being less than the fair market value of such property
      as
      at the closing date (as defined in the Asset Purchase Rollover
      Agreement).

     

    5.2.  Publicity.
      The
      initial press release with respect to the execution of this Agreement shall
      be a
      joint press release acceptable to Purchaser and Seller. Each of Purchaser and
      Seller shall, and shall cause each of its Affiliates to, not issue or cause
      the
      publication of any press release or disclosure with respect to this Agreement
      or
      the transactions contemplated hereby without prior consultation with the other
      party, except as may be required by Law or by any listing agreement with a
      national securities exchange or trading market. This Section 5.2 shall not
      limit
      the applicability of the Confidentiality Agreement.

     

    5.3.  Employees;
      Employee Benefits.
      (a)  With
      respect to each employee benefit plan, practice or policy of Purchaser or any
      of
      its Affiliates, Purchaser shall make reasonable efforts to ensure that each
      Retained Employee shall be given credit under such plan for all service prior
      to
      the Closing Date with the applicable Company or any predecessor employer (to
      the
      extent such credit was given by Seller, the applicable Company or any
      predecessor employer under a comparable Plan), for purposes of determining
      eligibility and vesting and for all other purposes for which such service is
      either taken into account or recognized; provided,
      however,
      such
      service need not be credited to the extent it would result in a duplication
      of
      benefits, including benefit accrual under defined benefit plans. Purchaser
      shall
      make reasonable efforts to ensure that such service also shall apply for
      purposes of satisfying any welfare benefit plan waiting periods, evidence of
      insurability requirements, or the application of any preexisting condition
      limitations. Purchaser shall make reasonable efforts to ensure that Retained
      Employees shall be given credit for amounts paid under a corresponding employee
      benefit plan during the same period for purposes of applying deductibles,
      copayments and out-of-pocket maximums as though such amounts had been paid
      in
      accordance with the terms and conditions of the comparable employee benefit
      plan
      of Purchaser. The obligations of Purchaser under this Section 5.3(a) shall
      apply
      only to the extent that the Retained Employees commence participation under
      an
      employee benefit plan, practice or policy of the Purchaser or one of its
      Affiliates (other than the Companies) on or promptly after the
      Closing.

     

    
      
        
        

      

      
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    (b)  If
      any
      Retained Employee is discharged by the Company as of or after the Closing,
      then
      Purchaser shall be responsible for any and all severance costs for such Retained
      Employee, including payments owing under those agreements, plans or arrangements
      listed in the Disclosure Schedule. Purchaser shall be responsible and assume
      all
      liability for all notices or payments due to any Retained Employees, and all
      notices, payments, fines or assessments due to any Governmental Entity, pursuant
      to any applicable foreign, federal, state or local law, common law, statute,
      rule or regulation with respect to the employment, discharge or layoff of
      employees by the Company after the Closing, including the WARN Act and Section
      4980B of the Code and any rules or regulations as have been issued in connection
      with the foregoing.

     

    (c)  From
      and
      after the Closing, Purchaser shall be responsible for, and shall indemnify
      and
      hold harmless Seller and its Affiliates and their officers, directors,
      employees, Affiliates and agents and the fiduciaries (including plan
      administrators) of the Plans from and against, any and all claims, losses,
      damages, costs and expenses (including attorneys’ fees and expenses) and other
      liabilities and obligations relating to or arising out of (i) all salaries,
      wages, commissions, employee incentive or other compensation, severance,
      holiday, vacation, or retirement benefits earned but unpaid as of the Closing
      and post-Closing bonuses due to any Retained Employee (other than bonuses that
      become payable as a result of the transactions contemplated by this Agreement,
      all of which shall be satisfied by the Seller prior to the Closing), (ii) the
      liabilities assumed by Purchaser under this Section 5.3 or any failure by
      Purchaser to comply with the provisions of this Section 5.3, and (iii) any
      claims of, or damages or penalties sought by, any Retained Employees, or any
      Governmental Entity on behalf of or concerning any Retained Employees, with
      respect to any act or failure to act by Purchaser to the extent arising from
      the
      employment, discharge, layoff or termination of any Retained
      Employee.

     

    (d)  Purchaser
      shall provide short-term disability coverage for all Retained Employees eligible
      to receive short-term disability benefits under policies of the Companies as
      of
      the Closing on substantially the same terms and conditions as in effect
      immediately prior to the Closing, so that such Retained Employees receive
      short-term disability benefits for a total of six months from the original
      date
      of disability.

     

    (e)  Effective
      as of the Closing, Purchaser shall (i) assume liability for all active workers’
compensation cases attributable to Retained Employees as of the Closing; (ii)
      provide Retained Employees with coverage for all required workers’ compensation
      benefits and (iii) from and after the Closing be responsible for all required
      workers’ compensation claims filed by Retained Employees regardless of whether
      the underlying event for such claims occurred prior to the Closing.


     

    5.4.  Transition
      Services.
      Except
      as with respect to the services to be provided pursuant to the Transition
      Services Agreement to be entered into as of the date hereof between Seller
      and
      Purchaser, all data processing, cash management, accounting, insurance, banking,
      personnel, legal, communications and other products and services provided to
      the
      Companies by Seller or any Affiliate of Seller (other than the Companies),
      including any agreements or understandings (written or oral) with respect
      thereto, shall terminate simultaneously with the Closing without any further
      action or liability on the part of the parties thereto. 

     

    
      
        
        

      

      
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    5.5.  Intercompany
      Arrangements.
      Except
      with respect to the Intercompany Accounts listed on Section 5.5 of the
      Disclosure Schedules, Seller shall arrange for all Intercompany Accounts between
      a Company, on the one hand, and Seller and its Affiliates (excluding the
      Companies), on the other hand, to be entirely settled effective as of the
      Closing. In addition, except as otherwise expressly contemplated by this
      Agreement, all agreements and commitments, whether written, oral or otherwise,
      which are solely between a Company, on the one hand, and Seller and its
      Affiliates (excluding the Companies), on the other hand, shall be terminated
      and
      of no further effect, simultaneously with the Closing without any further action
      or liability on the part of the parties thereto, except to the extent they
      relate to arms-length commercial matters between the Subsidiaries of Seller
      (other than the Company), on the one hand, and the Company, on the other
      hand.

     

    5.6.  Maintenance
      of Books and Records.
      After
      the Closing, each of the parties hereto shall preserve, until at least the
      eighth anniversary of the Closing Date, all pre-Closing Date records possessed
      or to be possessed by such party relating to the Company. After the Closing
      Date
      and up until at least the eighth anniversary of the Closing Date, upon any
      reasonable request from a party hereto or its representatives, the party holding
      such records shall (a) provide to the requesting party or its representatives
      reasonable access to such records during normal business hours and (b) permit
      the requesting party or its representatives to make copies of such records,
      in
      each case at no cost to the requesting party or its representatives (other
      than
      for reasonable out-of-pocket expenses); provided,
      however,
      that
      nothing herein shall require either party to disclose any information to the
      other if such disclosure would jeopardize any attorney-client or other legal
      privilege or contravene any applicable law. Such records may be sought under
      this Section for any reasonable purpose, including to the extent reasonably
      required in connection with the audit, accounting, tax, litigation, securities
      law disclosure or other similar needs of the party seeking such records.
      Notwithstanding the foregoing, any and all such records may be destroyed by
      a
      party if such destroying party sends to the other party hereto written notice
      of
      its intent to destroy such records, specifying in reasonable detail the contents
      of the records to be destroyed; such records may then be destroyed after the
      60th
      day
      following such notice unless the other party hereto notifies the destroying
      party that such other party desires to obtain possession of such records, in
      which event the destroying party shall transfer the records to such requesting
      party and such requesting party shall pay all reasonable expenses of the
      destroying party in connection therewith.

     

    5.7.  Seller’s
      Trademarks.
      Notwithstanding anything to the contrary contained in this Agreement, it is
      expressly agreed that (a) Purchaser is not purchasing, acquiring or otherwise
      obtaining, and the Companies will not be entitled to retain following the
      Closing Date, any right, title or interest in any Trademarks employing Seller’s
      name or any part or variation of such name or anything confusingly similar
      thereto (including any reference to “MDC”) and (b) the Companies, Purchaser or
      their Affiliates shall not make any use of Seller’s Trademarks from and after
      the Closing. Effective as of the Closing, Seller shall assign and convey to
      AP
      all of its rights and interests in and to the name “Secured Products
      International” or any similar name and shall not use of any such names for any
      commercial purpose thereafter.

     

    
      
        
        

      

      
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    5.8.  Insurance
      Policies.
      (a)  
      Seller and its Affiliates (other than the Companies) shall retain all right,
      title and interest in and to their respective insurance policies (other than
      those insurance policies that have been transferred by Seller to Mercury in
      connection with the Mercury Contribution), including those insurance policies
      listed on Schedule 5.8 (the “MDC
      Insurance Policies”).
      Seller shall continue to maintain (but shall have no obligation to renew) the
      MDC Insurance Policies under their current terms for purposes of preserving
      the
      Companies’ rights, if any, to recovery with respect to such Companies’ losses,
      damages and claims arising out of events occurring prior to the Closing
      (“Pre-Closing
      Company Claims”)
      for
      which premiums securing coverage for such claims have been paid in full as
      of
      the Closing Date (and shall not take any affirmative action to terminate
      coverage for such Pre-Closing Company Claims).

     

    (b)  At
      any
      time after the Closing, each Company shall have the right to tender all
      Pre-Closing Company Claims to the Seller’s applicable insurance provider and the
      Seller shall provide reasonable cooperation and assistance in connection
      therewith (including, if required, making any such claim to an insurer on behalf
      of any Company). All proceeds paid out under MDC Insurance Policies after the
      Closing solely with respect to Pre-Closing Company Claims tendered by any
      Company shall be for the benefit of the applicable Company.

     

    (c)  After
      the
      Closing, upon the reasonable request of the Purchaser, the Seller shall provide
      to the Purchaser updated loss information regarding pre-closing occurrences
      related to the Companies (including, without limitation, information regarding
      the current value of any pre-Closing losses).

     

    5.9.  Unclaimed
      Property Audit.
      Purchaser agrees to cooperate and agrees to cause the Companies to cooperate
      with Seller and any of its employees, directors, representatives and other
      agents in Seller’s preparation for and response to any unclaimed property audit
      by any state or province including, but not limited to, promptly providing
      copies of all reasonably requested documents and making any Company employees
      available to respond to inquiries of Seller in connection with any such audit.
      The obligations of Purchaser under this Section 5.9 shall survive until the
      expiration of the applicable state or provincial statutes of limitation.


     

    5.10.  Bank
      Accounts.
      Seller
      shall provide Purchaser with a complete list of each of the bank accounts of
      the
      Companies and the authorized signatories for each such account as soon as
      practicable before the Closing Date. The parties shall cooperate in connection
      with the replacement or supplementation of such signatories effective as of
      the
      Closing.

     

    5.11.  Further
      Assurances.
      (a)  From
      and after the Closing, each of Seller and Purchaser shall furnish or cause
      to be
      furnished to the other party and its employees, counsel, auditors and other
      representatives such information and assistance relating to the Companies (to
      the extent within the control of such other party) as is reasonably necessary
      for financial reporting and accounting matters of the other party, including
      the
      furnishing of such documentation and information relating to the Companies
      as
      may be reasonably requested in connection with the preparation of reports,
      accounts and other documents and materials to be filed with or submitted to
      the
      SEC, Canadian securities regulatory authorities, or any stock exchange or in
      connection with any proposed capital markets offering that would be exempt
      from
      the registration requirements of the Securities Act or Canadian provincial
      securities laws.

     

    
      
        
        

      

      
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    (b)  At
      any
      time and from time to time, each party to this Agreement agrees, subject to
      the
      terms and conditions of this Agreement, to take such commercially reasonable
      actions and to execute and deliver such documents as may be necessary to
      effectuate the purposes of this Agreement and the Mercury Contribution at the
      earliest practicable time (including, without limitation, the conveyance to
      Mercury of any assets of the Mercury Graphics division of the Seller, except
      as
      set forth in Section 3.10(b) of the Disclosure Schedules) that for any reason
      continue to be owned or held by the Seller, any such conveyance to be made
      by
      deeds, bills of sale, certificates of title and other instruments of assignment
      and transfer effective in each case to vest in Mercury good and valid record
      and
      marketable title to such assets, free and clear of all Encumbrances other than
      Permitted Encumbrances. 

     

    5.12.  Collection
      of Receivables.
      If,
      after the Closing Date, Seller or any of its Affiliates receives any payment
      or
      remittance with respect to any account receivable of any of the Companies,
      Seller shall, or shall cause its Affiliate to, deliver promptly to the
      applicable Company all cash, checks or other property received with respect
      to
      such receivables.

     

    5.13.  Interim
      Operations of the Companies.
      Except
      as contemplated by this Agreement, and except as may be consented to in writing
      by Purchaser, Seller covenants and agrees that, after the date hereof and prior
      to the Closing Date the business of each Company shall be conducted in a
      substantially similar manner as heretofore conducted and only in the ordinary
      course. No Company shall take any action that would cause any of the
      representations or warranties in Section 3.9(b) to be untrue in any material
      respect as of the Closing. Subject to the Confidentiality Agreement, Seller
      shall afford to Purchaser and its authorized representatives reasonable access
      during normal business hours to all properties, books, records, contracts and
      documents of the Companies and a full opportunity to make such reasonable
      investigations as it shall desire to make of Companies, and Seller shall furnish
      or cause to be furnished to Purchaser and its authorized representatives all
      such information with respect to the affairs and businesses of the Companies
      as
      Purchaser may reasonably request. Seller will promptly advise Purchaser in
      writing of any Company Material Adverse Effect. Seller shall use reasonable
      commercial efforts to continue to obtain all third party consents listed on
      Schedule 3.4 and that have not already been obtained prior to the execution
      of
      this Agreement, except as set forth on Schedule 3.4.

     

    ARTICLE
      VI

    CONDITION
      TO CLOSING

     

    6.1.  Conditions
      to Each Party’s Obligation to Effect the Closing.
      The
      obligation of each party to consummate the Closing shall be subject to the
      satisfaction or waiver on or prior to the Closing Date of the following
      condition: no Law shall have been enacted or promulgated by any Governmental
      Entity which expressly prohibits the consummation of the Closing; and there
      shall be no order or injunction of a court of competent jurisdiction in effect
      expressly prohibiting consummation of the Closing.

     

    
      
        
        

      

      
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    6.2.  Condition
      to Obligation of Purchaser to Effect the Closing.
      The
      obligation of Purchaser to consummate the Closing shall be subject to the
      satisfaction or waiver on or prior to the Closing Date of each of the following
      conditions:

     

    (a)  No
      Company Material Adverse Effect.
      Since
      the date of this Agreement, (i) no event has occurred which results in, or
      would
      reasonably be expected to result in, a Company Material Adverse Change, and
      (ii)
      no fact or circumstance has become known to Seller that has resulted in, or
      would reasonably be expected to result in, a Company Material Adverse Change;
      provided,
      however,
      that
      the foregoing clauses (i) and (ii) shall not constitute a condition to the
      obligation of Purchaser to consummate the Closing if the Extension Election
      has
      been exercised by Purchaser and HIG pursuant to Section 7.1(ii).

     

    (b)  Seller’s
      Certificate.
      The
      Seller shall have delivered to Purchaser in writing, at and as of the Closing,
      a
      certificate duly executed by Seller, in form and substance reasonably
      satisfactory to Purchaser and Purchaser’s counsel, certifying that the
      conditions in Section 6.2(a) have been satisfied; provided,
      however,
      that
      foregoing shall not constitute a condition to the obligation of Purchaser to
      consummate the Closing if the Extension Election has been exercised by Purchaser
      and HIG pursuant to Section 7.1(ii).

     

    (c)  Closing
      Proceedings.
      Seller
      shall have taken all actions required by it under, and shall have complied
      in
      all material respects with all of its obligations set forth in, the provisions
      of Sections 2.1(b)(i),(v),(vi), (vii), (ix), (x) and (xii).

     

    6.3.  Conditions
      to Obligations of Seller to Effect the Closing.
      The
      obligations of Seller to consummate the Closing shall be subject to the
      satisfaction or waiver on or prior to the Closing Date of each of the following
      conditions:

     

    (a)  Closing
      Proceedings.
      The
      Purchaser shall have taken all actions required by, and shall have complied
      with
      all of its obligations set forth in, the provisions of Section
      1.2(b).

     

    ARTICLE
      VII

    TERMINATION
      OF AGREEMENT

     

    7.1.  Termination.
      The
      transactions contemplated hereby may be terminated or abandoned at any time
      prior to the Closing Date:

     

    (i)  By
      the
      mutual written consent of Purchaser and Seller.

     

    (ii)  By
      Seller
      if the Closing shall not have occurred on or prior to November 15, 2006, unless
      (A) the conditions precedent to the obligation of Purchaser to consummate the
      Closing set forth in Section 6.1 and 6.2 have not been satisfied as of such
      date
      or (B) Purchaser has notified Seller of its election to extend such date to
      December 1, 2006 and HIG has, prior to 5:00 p.m. eastern time on November 15,
      2006 (an “Extension
      Election”),
      (x)
      delivered a written instruction to the Escrow Agent to release the Contract
      Deposit to Seller in accordance with the Escrow Agreement and (y) paid to
      Seller, by wire transfer in immediately available federal funds, an additional
      deposit amount equal to $1 million (the “Second Contract Deposit”).
      

     

    
      
        
        

      

      
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    (iii)  By
      Seller
      if the Extension Election has been exercised by Purchaser and HIG pursuant
      to
      Section 7.1(ii) and the Closing shall not have occurred on or prior to December
      1, 2006, unless the conditions precedent to the obligation of Purchaser to
      consummate the Closing set forth in Section 6.1 and 6.2 have not been satisfied
      as of such date.

     

    (iv)  By
      Purchaser if the Closing shall not have occurred on or prior to November 15,
      2006 (unless the conditions precedent to the obligation of Seller to consummate
      the Closing set forth in Section 6.1 and 6.3 have not been satisfied as of
      such
      date).

     

    (v)  By
      either
      Party if the Closing has not occurred on or prior to December 31,
      2006.

     

    7.2.  Effect
      of Termination.
      In the
      event of the termination of this Agreement in accordance with Section 7.1,
      (a) this Agreement shall become null and void and of no further force or effect
      except for Section 5.2, this Article VII and Article X and (b) such termination
      shall relieve each party from all violations of this Agreement that occurred
      prior to such termination other than violations of Articles I or II and willful
      breaches; provided,
      however,
      that
      (A) in the event that Seller terminates this Agreement pursuant to Section
      7.1(ii), Seller may thereafter provide notice of such termination to the Escrow
      Agent, whereupon the Escrow Agent shall release and pay the Contract Deposit
      to
      Seller pursuant to the Deposit Escrow Agreement or (B) in the event that Seller
      terminates this Agreement pursuant to Section 7.1(iii), Seller may retain the
      Contract Deposit and the Second Contract Deposit. The Contract Deposit and
      the
      Second Contract Deposit (if applicable) shall constitute liquidated damages
      in
      full satisfaction of any claims, liabilities, damages or other losses of Seller
      related to the termination of this Agreement under Section 7.1(ii) or (iii).
      In
      the
      case of any termination other than a termination by Seller pursuant to Section
      7.1(ii) or 7.1(iii), then (x) Purchaser may thereafter provide notice of such
      termination to the Escrow Agent, whereupon the Escrow Agent shall release and
      return the Contract Deposit to Purchaser pursuant to the Deposit Escrow
      Agreement or (y) if the Extension Election has been made, Seller shall, not
      later than one (1) business day after such termination, return the Contract
      Deposit and the Second Contract Deposit to HIG by wire transfer of immediately
      available federal funds. The amount of such payment required by subpart (y)
      of
      the immediately preceding sentence not made when due shall bear interest at
      a
      rate per annum equal to the Base Rate plus two percent (2%).

     

    ARTICLE
      VIII

    INDEMNIFICATION

     

    8.1.  Indemnification;
      Remedies.
      (a)  From
      and after the Closing, Seller shall indemnify, defend and hold harmless
      Purchaser from and against all Losses incurred by Purchaser, its Subsidiaries
      and the respective directors, officers and employees (“Purchaser
      Indemnified Persons”)
      that
      arise out of:

     

    
      
        
        

      

      
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    (i)  any
      breach by Seller of any of Seller’s representations and warranties contained in
      this Agreement or any other certificate delivered pursuant hereto (including,
      without limitation, the Certificate of Indebtedness); 

     

    (ii)  any
      breach or failure to perform by Seller of its covenants, obligations or
      undertaking contained in this Agreement;

     

    (iii)  (A)
      all
      Taxes (or the non-payment thereof) of the Companies and their Subsidiaries
      for
      all taxable periods (or portions thereof) ending on or before the Closing Date
      (including the portion of any Straddle Period ending on the Closing Date),
      determined under the principles of Section 5.4(a) hereof, (B) all Taxes of
      any
      member of a consolidated, unitary or combined group for which any Company or
      its
      Subsidiaries or any Purchaser Indemnified Persons may be held liable, whether
      by
      virtue of the application of Treasury Regulation section 1.1502-6 (or any
      corresponding provision of state, local or foreign Law) or otherwise, and (C)
      all Taxes of any Person for which any Company or its Subsidiaries or any
      Purchaser Indemnified Persons may be held liable as a transferee or successor,
      by contract, or pursuant to any applicable Law which Taxes relate to an event
      or
      transaction relating to the Companies or the Subsidiaries prior to the Closing
      Date; provided,
      that in
      the case of clauses (A), (B) and (C) above, Sellers shall be liable for any
      Taxes only to the extent that such Taxes exceed the accrual, if any, in respect
      thereof on the Closing Statement; 

     

    (iv)  any
      liability of AP arising out of the potential litigation matter disclosed in
      Section 3.13 of the AP Disclosure Schedule, and any liability of Metaca arising
      out of the potential litigation matter disclosed in Section 3.13 of the Metaca
      Disclosure Schedule;

     

    (v)  any
      liability of Mercury arising out of the counterclaim litigation matter disclosed
      in Section 3.13 of the Mercury Disclosure Schedule to the extent such Losses
      exceed amounts that have been recovered by Mercury, if any, in connection with
      its Statement of Claim related thereto as of the time such Losses are
      incurred;

     

    (vi)  any
      liability of Placard arising solely out of the claim against Placard by the
      Australian Manufacturer’s Worker Union described in Section 3.13 of the Placard
      Disclosure Schedule;

     

    (vii)  any
      claim
      by an executive officer or director of any of the Companies for indemnification,
      based solely on any conduct or event that occurred prior to the Closing Date
      and
      related solely to the operations or business of any of the Companies; provided,
      however, that the foregoing indemnity shall not apply to any such claim that
      would not have been covered by Seller’s D&O indemnity policies in effect on
      the Closing Date and described on Schedule 3.12;

     

    (viii)  solely
      to
      the
      extent relating to or arising out of the fact that the Companies were Affiliates
      of the Seller, (A)
      the
      presence or release of or exposure to Hazardous Substances, (B) the
      transportation, disposal or recycling of any Hazardous Substances, and (C)
      any
      violation or alleged violation of Environmental Laws, in each case relating
      solely to properties owned or occupied by the Seller or its Affiliates but
      not
      owned or occupied by any of the Companies;

     

    
      
        
        

      

      
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    (ix)  solely
      to
      the
      extent arising out of or related to the Companies being or having been
      Affiliates of the Seller, any liabilities of the Companies under Plans of the
      Seller or its Affiliates (other than the Companies); and

     

    (x)  in
      connection with the failure of AP to maintain liability insurance coverage
      from
      the period beginning on January 1, 2005 and ending on July 8, 2005 (the
“Gap
      Period”)
      on the
      same terms as the general liability insurance policy identified as Item (g)
      on
      Schedule 3.12 of the AP Disclosure Schedule with Peerless Insurance Company
      (Policy No. CBP9915578), any Losses that would have been covered under such
      policy had it been in place during such Gap Period.

     

    (b)  Seller’s
      indemnification obligation under Section 8.1(a) shall be subject to each of
      the
      following limitations:

     

    (i)  With
      respect to indemnification for Losses arising out of or relating to any breaches
      of any representation or warranty by Seller in this Agreement other than
      Sections 3.1, 3.2, 3.5, 3.6, 3.14, 3.16 3.17 or 3.20 (collectively,
“Representation
      and Warranty Losses”),
      such
      obligation to indemnify shall terminate on March 31, 2008, unless before such
      date Purchaser has provided Seller with an applicable Claim Notice;

     

    (ii)  With
      respect to indemnification for Losses arising out of or relating to any breaches
      of any representation or warranty by Seller in Sections 3.1, 3.2, 3.5, 3.6,
      3.14, 3.16, 3.17 or 3.20, such obligation to indemnify shall terminate on the
      date of the applicable statute of limitations, unless before such date Purchaser
      has provided Seller with an applicable Claim Notice;

     

    (iii)  With
      respect to Representation and Warranty Losses, there shall be no obligation
      to
      indemnify under Section 8.1(a) unless the aggregate of all Representation and
      Warranty Losses for which Seller, but for this clause (iii), would be liable
      under Section 8.1(a) exceeds on a cumulative basis an amount equal to $350,000
      (the “Indemnity
      Threshold”),
      and
      then only to the extent of such excess;

     

    (iv)  With
      respect to Representation and Warranty Losses, there shall be no obligation
      to
      indemnify under Section 8.1(a) for any item where the Losses for the claim
      or
      series of related claims relating thereto are less than $15,000 (it being
      understood that such items shall not be aggregated for purposes of the
      immediately preceding clause (iii));

     

    (v)  With
      respect to Losses arising under clauses (iv) and (v) of Section 8.1(a), there
      shall be no obligation to indemnify unless the aggregate of all such Losses
      exceeds on a cumulative basis an amount equal to $50,000, and then only to
      the
      extent of such excess;

     

    
      
        
        

      

      
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    (vi)  With
      respect to Losses arising out of any breach of the representations or warranties
      in Section 3.16 (“ERISA
      Losses”),
      (A)
      there shall be no obligation to indemnify under Section 8.1(a) unless the
      aggregate of all ERISA Losses for which Seller, but for this clause (vi), would
      be liable under Section 8.1(a) exceeds on a cumulative basis an amount equal
      to
      $250,000, whereupon the Seller will be obligated to indemnify for the entire
      amount of all ERISA Losses and (B) the aggregate amount payable for all ERISA
      Losses shall not exceed an amount equal to $5 million;

     

    (vii)  With
      respect to Representation and Warranty Losses, there shall be no obligation
      to
      indemnify under Section 8.1(a) for any amount, in the aggregate, in excess
      of an
      amount equal to 20% of the Purchase Price;

     

    (viii)  The
      aggregate amount payable for all Losses (including Representation and Warranty
      Losses) shall not exceed an amount equal to the Purchase Price;

     

    (ix)  With
      respect to indemnification for Losses pursuant to Section 8.1(a)(vi), (A) such
      obligation to indemnify shall apply only to Losses incurred prior to the earlier
      of (x) the completion of a new labor agreement with the Australian
      Manufacturer’s Worker Union and (y) March 31, 2008, unless a Proceeding has been
      filed or initiated with respect thereto, and Purchaser has issued a Claim Notice
      with respect to such Proceeding, prior to such date and (B) the aggregate amount
      payable for all such Losses shall not exceed an amount equal to $175,000;
      and

     

    (x)  Each
      Loss
      shall be reduced by (A) the amount of any insurance proceeds actually paid
      to
      Purchaser or any Purchaser Indemnified Person with respect to such Loss, or
      (B)
      any indemnity, contribution or other similar payment actually paid to Purchaser
      or any Purchaser Indemnified Person by any third party with respect to such
      Loss, subject to Section 8.5 below.

     

    (c)  From
      and
      after the Closing, Purchaser shall indemnify, defend and hold harmless Seller
      from and against all Losses incurred by Seller, its Subsidiaries and the
      respective directors and officers of Seller and its Subsidiaries (the
“Seller
      Indemnified Parties”)
      that
      arise out of (i) any breach by Purchaser of any of Purchaser’s representations
      and warranties contained in this Agreement and (ii) any breach by Purchaser
      of
      its covenants contained in this Agreement.

     

    (d)  For
      purposes of determining breaches by
      Seller
      of
      its
      representations and warranties which will be subject to indemnification under
      Section 8.1(a),
      and for
      determining Losses arising from such breaches,
      Purchaser and Seller have agreed to use predictable dollar thresholds as
      provided in Section 8.1(b) of this Agreement. Accordingly, Purchaser and Seller
      agree that with respect to any representation or warranty referred to in Section
      8.1, if such representation or warranty contains a materiality qualification
      (including “material,” “materially,” “in all material respects,” or “Material
      Adverse Change”), then such materiality qualification shall be disregarded and
      only the dollar thresholds stated in Section 8.1(b) will apply; provided,
      however,
      that
      the foregoing provision to disregard materiality shall not apply for
      purposes of determining breaches of
      Seller’s
      representations and warranties set forth in Sections 3.8 or 3.9 of this
      Agreement
      (but
      will apply for purposes of determining Losses arising from such
      breaches).

     

    
      
        
        

      

      
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    8.2.  Notice
      of Claim; Defense.
      (a)  If
      (i) any third-party institutes or asserts any claim, demand, investigation,
      audit in respect of any Tax liability, action or proceeding (each of the
      foregoing, a “Proceeding”)
      that
      may give rise to Losses for which a party (an “Indemnifying
      Party”)
      may be
      liable for indemnification under this Article VIII (a “Third-party
      Claim”)
      or
      (ii) any Person entitled to indemnification under this Agreement (an
“Indemnified
      Party”)
      shall
      have a claim to be indemnified by an Indemnifying Party that does not involve
      a
      Third-party Claim (a “Direct
      Claim”),
      then,
      in case of clause (i) or (ii), the Indemnified Party shall promptly send to
      the
      Indemnifying Party a written notice specifying the nature of such claim and
      the
      amount of all related Liabilities (a “Claim
      Notice”),
      provided that the Indemnifying Party shall be relieved of its indemnification
      obligations under this Article VIII only to the extent that it is prejudiced
      by
      the failure of the Indemnified Parties to provide a timely and adequate Claim
      Notice. With respect to liquidated Losses finally determined to be due and
      payable, if within thirty (30) days the Indemnifying Party has not contested
      the
      Claim Notice in writing, then the Indemnified Party will pay the full amount
      of
      such liquidated Losses within ten (10) days after the expiration of such
      thirty-day period. Any liquidated amount owed by an Indemnifying Party hereunder
      with respect to any Losses may be set-off by the Indemnified Party against
      any
      amounts owed by the Indemnified Party to the Indemnifying Party. Any
      amount finally determined to be due and owed by Seller to Purchaser pursuant
      to
      this Article VIII may, at the Purchaser’s option, be satisfied from the Escrowed
      Amount pursuant to the Escrow Agreement.  The
      unpaid balance of any Losses shall bear interest at a rate per annum equal
      to
      the rate announced by Citibank, N.A. from time to time as its “Base Rate”
plus
      two percent (2%) from the date notice thereof is given by the Indemnified Party
      to the Indemnifying Party.

     

    (b)  In
      the
      event of a Third-party Claim, the Indemnifying Party may elect to retain counsel
      of its choice to represent such Indemnified Parties in connection with such
      Proceeding and shall pay the fees, charges and disbursements of such counsel.
      The Indemnified Parties may participate, at their own expense and through legal
      counsel of their choice, in any such Proceeding, provided that (i) the
      Indemnifying Party may elect to control the defense of the Indemnified Parties
      in connection with such Proceeding and (ii) the Indemnified Parties and
      their counsel shall cooperate with the Indemnifying Party and its counsel in
      connection with such Proceeding. The Indemnifying Party shall not settle any
      such Proceeding without the relevant Indemnified Parties’ prior written consent
      (which shall not be unreasonably withheld), unless the terms of such settlement
      provide for no relief other than the payment of monetary damages.
      Notwithstanding the foregoing, (A) if the Indemnifying Party elects not to
      retain counsel and assume control of such defense or if both the Indemnifying
      Party and any Indemnified Party are parties to or subjects of such Proceeding
      and conflicts of interests exist between the Indemnifying Party and such
      Indemnified Party such that, in the Indemnified Parties’ reasonable discretion,
      separate representation by the Indemnified Parties’ counsel is advisable, and
      (B) with respect to any Proceedings relating to the matters described in
      Sections 8.1(a)(iv), (v) and (vi), the Indemnified Parties shall retain counsel
      reasonably acceptable to the Indemnifying Party in connection with such
      Proceeding and assume control of the defense in connection with such Proceeding,
      and the fees, charges and disbursements of no more than one such counsel per
      jurisdiction selected by the Indemnified Parties shall be reimbursed by the
      Indemnifying Party (and in the case of the matter described in Section
      8.1(a)(vi), Purchaser shall use reasonable commercial efforts to keep Seller
      apprised of the status of such matter and any negotiations with the claimant
      related thereto). Under no circumstances will the Indemnifying Party have any
      liability in connection with any settlement of any Proceeding that is entered
      into without its prior written consent (which shall not be unreasonably
      withheld).

     

    
      
        
        

      

      
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    (c)  From
      and
      after the delivery of a Claim Notice, at the reasonable request of the
      Indemnifying Party, each Indemnified Party shall grant the Indemnifying Party
      and its counsel, experts and representatives full access, during normal business
      hours, to the books, records, personnel and properties of the Indemnified Party
      to the extent reasonably related to the Claim Notice at no cost to the
      Indemnifying Party (other than for reasonable out-of-pocket expenses of the
      Indemnified Parties).

     

    8.3.  Tax
      Effect of Indemnification Payments.
      All
      indemnity payments made pursuant to this Article VIII shall be treated for
      all
      Tax purposes as adjustments to the consideration paid with respect to the
      Shares.

     

    8.4.  No
      Duplication; Exclusive Remedy.
      (a)  Any
      liability for indemnification hereunder shall be determined without duplication
      of recovery by reason of the state of facts giving rise to such liability
      constituting a breach of more than one representation, warranty, covenant or
      agreement.

     

    (b)  From
      and
      after the Closing, the exclusive remedy of each party in connection with this
      Agreement and the transactions contemplated hereby (whether under this contract
      or arising under common law or any other Law) shall be as provided in this
      Article VIII, except as otherwise specified in Sections 2.2 and 7.2 and except
      in the case of claims for fraud or intentional breach.

     

    8.5.  Mitigation.
      Purchaser and Seller shall cooperate with each other with respect to resolving
      any claim or liability with respect to which one party is obligated to indemnify
      the other party including by making commercially reasonable efforts to mitigate,
      whether by seeking claims against a third party, an insurer or otherwise, and
      to
      resolve any such claim or liability. If a Loss is covered by insurance or
      subject to third party recoveries, but proceeds have not been received, the
      Indemnified Party shall use reasonable efforts to recover the amount of such
      insurance or recoverable from the insurer or third party, and, if applicable,
      will reimburse the Indemnifying Party for any Losses already paid hereunder
      (net
      of costs incurred to recover such amounts).

     

    ARTICLE
      IX

    DEFINITIONS
      AND INTERPRETATION

     

    9.1.  Definitions.
      For all
      purposes of this Agreement, except as otherwise expressly provided or unless
      the
      context clearly requires otherwise:

     

    “401(k)
      Plan Participants”
shall
      have the meaning set forth in Section 5.6(b).

     

    “Accounting
      Arbitrator”
has
      the
      meaning set forth in Section 2.2.

     

    
      
        
        

      

      
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          39 -

        
          

        

      

      
        
        

      

    

     

    “Affiliate”
shall
      have the meaning set forth in Rule 12b-2 of the Exchange Act.

     

    “Agreement”
or
      “this
      Agreement”
shall
      mean this Stock Purchase Agreement, together with the Exhibits, Appendices
      and
      Schedules hereto and the Disclosure Schedule.

     

    “AP”
shall
      have the meaning set forth in the opening paragraph.

     

    “Audits”
shall
      have the meaning set forth in Section 3.17.

     

    “Australian
      Superannuation Arrangement”
means
      any fund,
      plan, scheme, agreement or arrangement under which superannuation benefits,
      retirement benefits, pensions, annuities or other allowances of a similar nature
      are or may be provided to or in respect of any present or former employees
      of
      Placard or any Subsidiary of Placard or their respective
      dependants.

     

    “Balance
      Sheet Date”
shall
      mean July 31, 2006, the date of the most recent balance sheet included in the
      Financial Statements.

     

    “Base
      Purchase Price”
shall
      have the meaning set forth in Section 1.2.

     

    “Business
      Day”
shall
      mean a day other than Saturday, Sunday or any day on which the principal
      commercial banks located in the State of New York are authorized or obligated
      to
      close under the laws of such state.

     

    “Certificate
      of Indebtedness”
shall
      have the meaning set forth in Section 2.1(b)(ix).

     

    “Claim
      Notice”
shall
      have the meaning set forth in Section 8.2(a).

     

    “Closing”
shall
      mean the closing referred to in Section 2.1.

     

    “Closing
      Date”
shall
      mean the date on which the Closing occurs.

     

    “Closing
      Statement”
shall
      have the meaning set forth in Section 2.2.

     

    “Closing
      Working Capital”
shall
      mean, as of the close of business on the date immediately preceding the Closing
      Date, the excess of (i) current assets of the Companies (including cash and
      cash
      equivalents and excluding non-trade
      intercompany receivables) over (ii) current liabilities of the Companies
      (excluding non-trade
      intercompany payables), determined in accordance with Schedule 2.2.

     

    “Code”
shall
      mean the Internal Revenue Code of 1986, as amended.

     

    “Company”
shall
      have the meaning set forth in the opening paragraph. In the case of Mercury,
      the
      term “Company” shall also include the Mercury Graphics division of the Seller as
      operated by the Seller prior to the Mercury Contribution; provided, however,
      that no other assets, liabilities or operations of Seller shall be deemed
      included as part of the term “Company.”

     

    
      
        
        

      

      
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    “Company
      Intellectual Property”
shall
      mean all Intellectual Property that is used in the business of the
      Companies.

     

    “Company
      Material Adverse Effect”
shall
      mean any material adverse effect on the business, financial condition or results
      of operations of the Companies, taken as a whole; provided,
      however,
      that
      the effects of events, changes and circumstances relating to (a) the industries
      and markets in which the Companies operate, (b) macroeconomic factors, interest
      rates, general financial market conditions, war, terrorism or hostilities,
      (c)
      changes in Law, generally accepted accounting principles or official
      interpretations of the foregoing, (d) compliance with this Agreement, or (e)
      the
      transactions contemplated hereby or the public announcement of this Agreement,
      shall not be considered when determining if a Company Material Adverse Effect
      has occurred.

     

    “Computer
      Software”
shall
      mean computer software programs, databases and all documentation related
      thereto.

     

    “Confidentiality
      Agreement”
shall
      mean the letter agreement dated March 21, 2006 between Seller and
      Purchaser.

     

    “Copyrights”
shall
      mean U.S. and foreign registered and unregistered copyrights (including those
      in
      Computer Software and databases), rights of publicity and all registrations
      and
      applications to register the same.

     

    “Designs”
means
      designs defined under the Australia Designs
      Act 2003
      (Cth)
      and any similar rights capable of protection under the laws of any foreign
      jurisdictions.

     

    “Direct
      Claim”
shall
      have the meaning set forth in Section 8.2(a).

     

    “Disclosure
      Schedule”
shall
      mean the disclosure schedules of even date herewith delivered by Seller to
      Purchaser simultaneously with the execution hereof.

     

    “Due
      Date”
shall
      mean, with respect to any Tax Return, the date such return is due to be filed
      (taking into account any valid extensions).

     

    “Encumbrances”
shall
      mean any and all liens, charges, security interests, options, claims, mortgages,
      pledges, proxies, voting trusts or agreements, obligations, understandings,
      adverse claims or arrangements or other restrictions on title or transfer of
      any
      nature whatsoever.

     

    “Environmental
      Law”
shall
      mean all federal, provincial, state, county, regional, municipal, local or
      foreign laws, statutes, regulations, codes, plans, orders, decrees, judgments,
      notices, Permits, rules, ordinances, by-laws or demand letters relating to
      environmental matters, Hazardous Substances, natural resources, pollution or
      protection of human health, safety or the environment, including, without
      limitation, laws relating to emissions, discharges, releases or threatened
      releases of Hazardous Substances into ambient air, surface water, groundwater,
      or land or otherwise relating to the manufacture, processing, distribution,
      use,
      presence, production, treatment, storage, disposal, transport, or handling
      of
      Hazardous Substances, including, but not limited to, the Federal Water Pollution
      Control Act (33 U.S.C. §1251 et seq.), Resource Conservation and Recovery Act
      (42 U.S.C. §6901 et seq.), Safe Drinking Water Act (42 U.S.C. §3000(f) et seq.),
      Toxic Substances Control Act (15 U.S.C. §2601 et seq.), Clean Air Act (42 U.S.C.
§7401 et seq.), Comprehensive Environmental Response, Compensation and Liability
      Act (42 U.S.C. §9601 et seq.) (“CERCLA”),
      Canadian Environmental Protection Act (S.C. 1999, c. 33), Fisheries Act (R.S.C.,
      1985, c. F-14), Environmental Protection Act (R.S.O. 1990, c. E.19), Ontario
      Water Resources Act (R.S.O. 1990, c. O.40), and other similar state, provincial,
      regional, municipal and local statutes, and any regulations promulgated
thereto.

     

    
      
        
        

      

      
        -
          41 -

        
          

        

      

      
        
        

      

    

     

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

     

    “ERISA
      Affiliate”
shall
      mean any trade or business, whether or not incorporated, that together with
      the
      applicable Company would be deemed a “single
      employer”
within
      the meaning of Section 4001(b) of ERISA.

     

    “Escrow
      Agent”
shall
      mean JPMorgan Chase Bank, N.A..

     

    “Escrow
      Agreement”
has
      the
      meaning set forth in Section 2.1(b)(iii).

     

    “Escrow
      Amount”
has
      the
      meaning set forth in Section 1.2(a).

     

    “Estimated
      Closing Working Capital”
shall
      have the meaning set forth in Section 1.2.

     

    “Estimated
      Purchase Price”
shall
      have the meaning set forth in Section 1.2.

     

    “Evaluation
      Material”
shall
      have the meaning assigned to such term in the Confidentiality
      Agreement.

     

    “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended.

     

    “Financial
      Statements”
shall
      mean (a) the audited balance sheets of AP, Metaca, Placard and Mercury
      (represented by the Mercury Graphics division of the Seller as conducted prior
      to the Mercury Contribution) at December 31, 2005 and 2004 together with the
      audited statements of income and statements of cash flows for the years ended
      December 31, 2005 and 2004 and (b) the Interim Financial
      Statements.

     

    “GAAP”
shall
      mean, for any jurisdiction, generally accepted accounting principles for such
      jurisdiction, consistently applied.

     

    “Governmental
      Entity”
means
      any country, any national body (including the European Union), any state,
      province, municipality, or subdivision of any of the foregoing, any agency,
      governmental department, court, entity, commission, board, ministry, bureau,
      locality or authority of any of the foregoing, or any quasi-governmental or
      private body exercising any regulatory, taxing, importing, exporting, or other
      governmental or quasi-governmental function.

     

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

     

    
      
        
        

      

      
        -
          42 -

        
          

        

      

      
        
        

      

    

     

    “Hazardous
      Substances”
means
      any hazardous substance as defined in 42 U.S.C. § 9601(14), any hazardous
      waste as defined by 42 U.S.C. §6903(5), any pollutant or contaminant as defined
      by 42 U.S.C. §9601(33) or any toxic substance, pollutant, contaminant, waste,
      oil or hazardous material or other chemical or substance (including, without
      limitation, asbestos in any form, urea formaldehyde, perchlorate or
      polychlorinated biphenyls) regulated by or forming the basis of liability under
      any Environmental Laws.

     

    “Indebtedness”
shall
      mean, without double counting, (a) the indebtedness of any of the Companies
      for
      borrowed money owed to third parties, (b) accrued interest payable by any
      Company on the indebtedness under clause (a), and (c) the obligations of
      any Company under their capitalized leases (which leases shall, for greater
      certainty, exclude those operating leases described on Schedule 3.11A of the
      Disclosure Schedules); provided
      that in
      no event shall Indebtedness include any amount that is included in the Closing
      Working Capital.

     

    “Indemnified
      Party”
shall
      have the meaning set forth in Section 8.2(a).

     

    “Indemnifying
      Party”
shall
      have the meaning set forth in Section 8.2(a).

     

    “Indemnity
      Threshold”
shall
      have the meaning set forth in Section 8.1(b)(ii).

     

    “Insurance
      Policy”
shall
      mean any insurance policy maintained by Seller or any of its Affiliates (other
      than the Companies).

     

    “Intellectual
      Property”
shall
      mean all of the following: Trademarks, Patents, Copyrights, Trade Secrets and
      Licenses.

     

    “Intercompany
      Accounts”
shall
      mean all balances related to indebtedness, including any intercompany
      indebtedness, loan, guaranty, receivable, payable or other account (other than
      trade payables and receivables) between Seller and its Subsidiaries (other
      than
      the Companies) on the one hand, and any Company, on the other hand.

     

    “Interim
      Financial Statements”
the
      unaudited balance sheets of AP, Metaca, Placard and Mercury (represented by
      the
      Mercury Graphics division of the Seller as conducted prior to the Mercury
      Contribution) as of July 31, 2006 together with the related statements of income
      for the for the seven (7) month period then ended.

     

    “Interim
      Period”
shall
      have the meaning set forth in Section 5.4(a)(ii).

     

    “IRS”
shall
      mean the United States Internal Revenue Service.

     

    “Knowledge
      of Seller”
shall
      mean the actual knowledge, including knowledge that a reasonable senior
      executive would have under the circumstances following reasonable inquiry,
      of
      Barry Switzer, Gord Bayda, Jerry Moodie, Ganesh Ganeshalingam, Stephen Pustil
      and Walter Campbell.

     

    “Law”
shall
      have the meaning set forth in Section 3.4.

     

    
      
        
        

      

      
        -
          43 -

        
          

        

      

      
        
        

      

    

     

    “Licenses”
shall
      mean all licenses and agreements pursuant to which any Company has acquired
      rights in or to any Trademarks, Patents or Copyrights, or licenses and
      agreements pursuant to which any Company has licensed or transferred the right
      to use any of the foregoing.

     

    “Losses”
shall
      mean any and all actual losses, liabilities, damages, judgments, settlements
      and
      expenses (including interest and penalties recovered by a third party with
      respect thereto and reasonable attorney and other professional fees and
      expenses).

     

    “Mercury”
shall
      have the meaning set forth in the opening paragraph. 

     

    “Mercury
      Contribution”
shall
      mean the series of transactions completed by the Seller on or prior to the
      date
      hereof pursuant to which the assets and liabilities of the Mercury division
      of
      the Seller have been contributed into Mercury.

     

    “Mercury
      Lease”
means
      that certain lease between Mercury Graphic Corporation, as lessee, and
      Saskatchewan Economic Development Corporation, as lessor, dated September 21,
      1990, as amended. 

     

    “Metaca”
shall
      have the meaning set forth in the opening paragraph.

     

    “Patents”
shall
      mean issued U.S. and foreign patents and pending patent applications, patent
      disclosures, and any and all divisions, continuations, continuations-in-part,
      reissues, reexaminations, and extensions thereof, any counterparts claiming
      priority therefrom, utility models, patents of importation/confirmation,
      certificates of invention and similar statutory rights.

     

    “PBGC”
shall
      mean the Pension Benefit Guaranty Corporation.

     

    “Permitted
      Encumbrances”
shall
      have the meaning set forth in Section 3.10.

     

    “Person”
shall
      mean a natural person, partnership, corporation, limited liability company,
      business trust, joint stock company, trust, unincorporated association, joint
      venture, Governmental Entity or other entity or organization.

     

    “Placard”
shall
      have the meaning set forth in the opening paragraph.

     

    “Plan”
shall
      mean each deferred compensation and each incentive compensation, stock purchase,
      stock option and other equity compensation plan, program, agreement or
      arrangement; each severance or termination pay, medical, surgical,
      hospitalization, life insurance and other “welfare”
plan,
      fund or program (within the meaning of Section 3(1) of ERISA); each
      profit-sharing, stock bonus or other “pension”
plan,
      fund or program (within the meaning of Section 3(2) of ERISA); each employment,
      termination or severance agreement; and each other employee benefit plan,
      pension, retirement savings or retirement income plan, fund, program, agreement
      or arrangement, in each case, that is sponsored, maintained or contributed
      to or
      required to be contributed to by any Company or by any ERISA Affiliate, or
      to
      which any Company or an ERISA Affiliate is party or has any outstanding
      liability to or in respect of or obligation under, whether formal or informal,
      written or oral, for the benefit of any director, officer, consultant, or
      employee, whether active or terminated, of any Company excluding any government
      sponsored plans requiring mandatory contributions by employers and/or
      employees.

     

    
      
        
        

      

      
        -
          44 -

        
          

        

      

      
        
        

      

    

     

    “Privacy
      Law”
shall
      mean (a) the Australia Privacy Act 1988 (Cth); and (b) the National Privacy
      Principles contained in Schedule 3 to the Australia Privacy Act 1988 (Cth)
      or an
      approved privacy code (as defined in the Australia Privacy Act 1988 (Cth))
      that
      applies to a Company.

     

    “Proceeding”
shall
      have the meaning set forth in Section 8.2(a).

     

    “Purchase
      Price”
shall
      have the meaning set forth in Section 1.2.

     

    “Purchaser”
shall
      have the meaning set forth in the opening paragraph.

     

    “Purchaser
      Indemnified Persons”
shall
      have meaning set forth in Section 8.1(a).

     

    “Real
      Property”
shall
      mean all material real property that is owned, leased or used by the Companies
      or any of their respective Subsidiaries.

     

    “Retained
      Employee”
shall
      mean each person who was an active or inactive employee (including but not
      limited to any such employee who is on any leave of absence, whether paid or
      unpaid, including, but not limited to, “short-term
      disability leave”,
      “long-term
      disability leave”
or
      “workers’
      compensation leave”
as
      such
      term is defined in a Plan) of any Company immediately prior to the Closing
      Date.

     

    “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended.

     

    “SEC”
shall
      mean the United States Securities and Exchange Commission.

     

    “Seller”
shall
      have the meaning set forth in the opening paragraph.

     

    “Shares”
shall
      mean the outstanding shares of common stock issued by the Base
      Companies.

     

    “Short
      Period”
shall
      have the meaning set forth in Section 5.4(a)(i).

     

    “Straddle
      Period”
shall
      mean a taxable year or period beginning on or before, and ending on or after,
      the Closing Date.

     

    “Subsidiary”
shall
      mean, with respect to any Person, any corporation or other organization, whether
      incorporated or unincorporated, of which (a) at least a majority of the
      securities or other interests having by their terms ordinary voting power to
      elect a majority of the board of directors or others performing similar
      functions with respect to such corporation or other organization is directly
      or
      indirectly owned or controlled by such Person or by any one or more of its
      Subsidiaries, or by such Person and one or more of its Subsidiaries or (b)
      such
      Person or any other Subsidiary of such Person is a general partner (excluding
      any such partnership where such Person or any Subsidiary of such Person does
      not
      have a majority of the voting interest in such partnership).

     

    
      
        
        

      

      
        -
          45 -

        
          

        

      

      
        
        

      

    

     

    “Tax
      Act”
shall
      mean the Income
      Tax Act
      (Canada)
      and the regulations thereunder, as amended.

     

    “Taxes”
shall
      mean all taxes, however denominated, including any interest or penalties that
      may become payable in respect thereof, imposed by any federal, state,
      provincial, local or foreign government or any agency or political subdivision
      of any such government, which taxes shall include, without limiting the
      generality of the foregoing, all income taxes (including, but not limited to,
      United States and Canadian federal income taxes and state or provincial income
      taxes), payroll and employee withholding taxes, unemployment insurance and
      employment insurance payments, social security, Canada Pension Plan and
      provincial pension plan contributions, value-added, sales and use taxes, excise
      taxes, goods and services taxes, harmonized sales taxes, environmental,
      franchise taxes, gross receipts taxes, occupation taxes, real and personal
      property taxes, stamp taxes, severance taxes, capital stock taxes, capital
      taxes, alternative or add-on minimum taxes, estimated taxes, transfer taxes,
      withholding taxes, workers’ compensation, and other obligations of the same or
      of a similar nature, whether arising before, on or after the Closing Date and
      whether disputed or not.

     

    “Tax
      Return”
means
      a
      report, return, declaration, election, agreement, claim for refund, or other
      information return or statement (including any schedule or attachment thereto
      and including any amendment thereof) required to be supplied to or filed with
      a
      Governmental Entity with respect to Taxes including, where permitted or
      required, combined or consolidated returns for any group of entities that
      includes the Company.

     

    “Third-party
      Claim”
shall
      have the meaning set forth in Section 8.2(a).

     

    “Title
      IV Plan”
shall
      mean a Plan that is subject to Section 302 or Title IV of ERISA or Section
      412
      of the Code.

     

    “Trademarks”
shall
      mean U.S. and foreign registered and unregistered trademarks, trade dress,
      service marks, logos, trade names, corporate names, business names and all
      registrations and applications to register the same.

     

    “Trade
      Secrets”
shall
      mean all categories of trade secrets as defined in the Uniform Trade Secrets
      Act, including business information and any trade secrets capable of protection
      in any applicable non-U.S. jurisdiction.

     

    “Transfer
      Taxes”
shall
      have the meaning set forth in Section 5.4(a)(iii).

     

    “U.S.”
shall
      mean the United States of America.

     

    “U.S.
      Dollar”
or
      “$”
means
      the lawful currency of the United States of America.

     

    “WARN
      Act”
shall
      mean the Worker Adjustment and Retraining Notification Act.

     

    “Year
      End Balance Sheet”
means
      the audited balance sheet of the Companies at December 31, 2005.

     

    
      
        
        

      

      
        -
          46 -

        
          

        

      

      
        
        

      

    

     

    9.2.  Interpretation.
      (a)  The
      headings contained in this Agreement are for reference purposes only and shall
      not affect in any way the meaning or interpretation of this
      Agreement.

     

    (b)  Whenever
      the words “include”,
      “includes”
or
      “including”
are
      used in this Agreement they shall be deemed to be followed by the words
“without
      limitation.”

     

    (c)  The
      words
“hereof”,
      “herein”
and
      “herewith”
and
      words of similar import shall, unless otherwise stated, be construed to refer
      to
      this Agreement as a whole and not to any particular provision of this Agreement,
      and article, section, paragraph, exhibit and schedule references are to the
      articles, sections, paragraphs, exhibits and schedules of this Agreement unless
      otherwise specified.

     

    (d)  The
      meaning assigned to each term defined herein shall be equally applicable to
      both
      the singular and the plural forms of such term, and words denoting any gender
      shall include all genders. Where a word or phrase is defined herein, each of
      its
      other grammatical forms shall have a corresponding meaning.

     

    (e)  A
      reference to any party to this Agreement or any other agreement or document
      shall include such party’s successors and permitted assigns.

     

    (f)  A
      reference to any legislation or to any provision of any legislation shall
      include any amendment to, and any modification or re-enactment thereof, any
      legislative provision substituted therefor and all regulations and statutory
      instruments issued thereunder or pursuant thereto.

     

    (g)  The
      parties have participated jointly in the negotiation and drafting of this
      Agreement. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as if drafted jointly by the parties,
      and no presumption or burden of proof shall arise favoring or disfavoring any
      party by virtue of the authorship of any provisions of this
      Agreement.

     

    (h)  All
      payments and adjustments under this Agreement shall be made in U.S.
      Dollars.

     

    ARTICLE
      X

    MISCELLANEOUS

     

    10.1.  Fees
      and Expenses.
      All
      costs and expenses incurred in connection with this Agreement and the
      consummation of the Closing shall be paid by the party incurring such expenses,
      except as specifically provided to the contrary in this Agreement.

     

    10.2.  Amendment
      and Modification.
      This
      Agreement may be amended, modified and supplemented in any and all respects,
      but
      only by a written instrument signed by all of the parties hereto expressly
      stating that such instrument is intended to amend, modify or supplement this
      Agreement.

     

    
      
        
        

      

      
        -
          47 -

        
          

        

      

      
        
        

      

    

     

    10.3.  Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed given if mailed, delivered personally, telecopied (which is confirmed)
      or
      sent by an overnight courier service, such as Federal Express, to the parties
      at
      the following addresses (or at such other address for a party as shall be
      specified by like notice):

     

    
      	 	
              if
                to Purchaser and/or HIG, to:

            
	 	
              c/o
                H.I.G. Capital Management, Inc.

            
	 	
              855
                Boylston Street, 11th
                Floor

            
	 	
              Boston,
                MA 02116

            
	 	
              Attention:
                John Black, William NolanTelephone: 617-262-8455

            
	 	
              Telecopy:
                617-262-1505

            
	 	 
	 	
              with
                a copy to:

            
	 	 
	 	
              Bingham
                McCutchen LLP

            
	 	
              399
                Park Avenue

            
	 	
              New
                York, NY 10022Attention: Neil W. Townsend, Esq.

            
	 	
              Telephone:
                212-705-7722

            
	 	
              Telecopy:
                212-702-3644

            
	 	 
	 	
              and

            
	 	 
	 	
              if
                to Seller, to:

            
	 	 
	 	
              Steven
                Berns, President and CFO

            
	 	
              MDC
                Partners Inc.

            
	 	
              950
                Third Avenue

            
	 	
              New
                York, N.Y. 10022

            
	 	
              Telephone:
                646-429-1818

            
	 	
              Telecopy:
                212-937-4365

            
	 	 
	 	
              With
                a copy to:

            
	 	 
	 	
              Mitchell
                Gendel, General Counsel

            
	 	
              MDC
                Partners Inc.

            
	 	
              950
                Third Avenue

            
	 	
              New
                York, N.Y. 10022

            
	 	
              Telephone:
                646-429-1803

            
	 	
              Telecopy:
                212-937-4365

            


    

     

    10.4.  Counterparts.
      This
      Agreement may be executed in two or more counterparts, all of which shall be
      considered one and the same agreement and shall become effective when two or
      more counterparts have been signed by each of the parties and delivered to
      the
      other parties.

     

    
      
        
        

      

      
        -
          48 -

        
          

        

      

      
        
        

      

    

     

    10.5.  Entire
      Agreement; No Third Party Beneficiaries.
      This
      Agreement and the Confidentiality Agreement (a) constitute the entire agreement
      and supersede all prior agreements and understandings, both written and oral,
      between the parties with respect to the subject matter hereof and thereof and
      (b) are not intended to confer upon any Person other than the parties hereto
      and
      thereto and, solely with respect to Section 8, the other Purchaser Indemnified
      Parties and Seller Indemnified Parties.

     

    10.6.  Severability.
      Any
      term or provision of this Agreement that is held by a court of competent
      jurisdiction or other authority to be invalid, void or unenforceable in any
      situation in any jurisdiction shall not affect the validity or enforceability
      of
      the remaining terms and provisions hereof or the validity or enforceability
      of
      the offending term or provision in any other situation or in any other
      jurisdiction. If the final judgment of a court of competent jurisdiction or
      other authority declares that any term or provision hereof is invalid, void
      or
      unenforceable, the parties agree that the court making such determination shall
      have the power to reduce the scope, duration, area or applicability of the
      term
      or provision, to delete specific words or phrases, or to replace any invalid,
      void or unenforceable term or provision with a term or provision that is valid
      and enforceable and that comes closest to expressing the intention of the
      invalid or unenforceable term or provision.

     

    10.7.  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without giving effect to the principles of conflicts of law
      thereof.

     

    10.8.  Jurisdiction.
      To the
      fullest extent permitted by applicable Law, each party hereto (i) agrees that
      any claim, action or proceeding by such party seeking any relief whatsoever
      arising out of, or in connection with, this Agreement or the transactions
      contemplated hereby shall be brought only in the United States District Court
      for the Southern District of New York or any New York State court, in each
      case,
      located in the Borough of Manhattan and not in any other State or Federal court
      in the United States of America or any court in any other country, (ii) agrees
      to submit to the exclusive jurisdiction of such courts located in the Borough
      of
      Manhattan for purposes of all legal proceedings arising out of, or in connection
      with, this Agreement or the transactions contemplated hereby, (iii) waives
      and
      agrees not to assert any objection that it may now or hereafter have to the
      laying of the venue of any such proceeding brought in such a court or any claim
      that any such proceeding brought in such a court has been brought in an
      inconvenient forum, (iv) agrees that mailing of process or other papers in
      connection with any such action or proceeding in the manner provided in Section
      10.3 (Notices) or any other manner as may be permitted by Law shall be valid
      and
      sufficient service thereof and (v) agrees that a final judgment in any such
      action or proceeding shall be conclusive and may be enforced in other
      jurisdictions by suit on the judgment or in any other manner provided by
      applicable Law. The preceding sentence shall not limit the jurisdiction of
      the
      Accounting Arbitrator as set forth in Section 2.2, although claims may be
      asserted in such courts described in the preceding sentence for purposes of
      enforcing the jurisdiction of the Accounting Arbitrator.

     

    10.9.  Time
      of Essence.
      Each of
      the parties hereto hereby agrees that, with regard to all dates and time periods
      set forth or referred to in this Agreement, time is of the essence.

     

    
      
        
        

      

      
        -
          49 -

        
          

        

      

      
        
        

      

    

     

    10.10.  Extension;
      Waiver.
      At any
      time prior to the Closing Date, either party hereto may extend the time for
      the
      performance of any of the obligations or other acts of the other party. Any
      agreement on the part of a party to any such extension shall be valid only
      if
      set forth in an instrument in writing signed by or on behalf of such party.
      The
      failure of either party to this Agreement to assert any of its rights under
      this
      Agreement or otherwise shall not constitute a waiver of those
      rights.

     

    10.11.  Assignment.
      Neither
      this Agreement nor any of the rights, interests or obligations hereunder shall
      be transferred by either party (whether by operation of law or otherwise)
      without the prior written consent of the other party. Any transfer of any
      rights, interests or obligations hereunder in violation of this Section shall
      be
      null and void. Notwithstanding the foregoing, the Purchaser shall be permitted
      to assign or delegate all or part of its rights or obligations hereunder (a)
      to
      one or more of its Subsidiaries (provided that such assignment or delegation
      shall not relieve the Purchaser of its obligations and responsibilities
      hereunder) and (b) by way of collateral assignment to any bank or financing
      institution providing financing to the Purchaser.

     

    
      
        
        

      

      
        -
          50 -

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, Purchaser, Seller and HIG have executed this Agreement or
      caused this Agreement to be executed by their respective officers thereunto
      duly
      authorized as of the date first written above.

     

    
      	 	 	 
	 	SECURED
              PRODUCTS (CAYMAN), INC.
	 
 	 
 	 
 
	 	 	By
	 	
              
Name:
	 	Title:


    

    


    
      	 	 	 
	 	MDC
              PARTNERS INC.
	 
	 
 	 
 
	 	 	By
	 	
              
Name:
	 	Title:


    

     

    
      	 	 	 
	 	H.I.G.
              CAPITAL MANAGEMENT, INC.
	 
 	 
 	 
 
	 	 	By
	 	
              
Name:
	 	Title: 


    

     

    
      
        
        

      

      
        -
          51 -