ACQUISITION AGREEMENT

Exhibit 10.1

ACQUISITION AGREEMENT

THIS ACQUISITION AGREEMENT (this “Agreement”), is made as of the 11th day of November, 2005, by and among SGS International, Inc., a corporation organized under the laws of Delaware (hereinafter “ Purchaser ”), RMC Delaware, Inc. , a corporation organized under the laws of Delaware, U.S.A. (“ RMC ”), Southern Graphic Systems-Canada, Ltd./Systemes Graphiques Southern-Canada, Ltee. , a Quebec corporation (“ SGS Canada ”), and Alcoa UK Holdings Limited , a company incorporated under the laws of England and Wales (“ Alcoa UK ”) (collectively, RMC, SGS Canada and Alcoa UK are referred to as the “ Sellers ” and individually as a “ Seller ”).

WHEREAS , RMC and Alcoa UK are wholly-owned subsidiaries of Alcoa Inc., a Pennsylvania corporation (“ Alcoa ”);

WHEREAS , RMC directly owns 100% of the issued and outstanding shares of common stock of Southern Graphic Systems, Inc., a Kentucky corporation (“ SGS ”);

WHEREAS , RMC directly owns 99% of Southern Graphic Systems Mexico, S. De R.L. De C.V., a Mexican company (“ SGS Mexico ”), and SGS directly owns 1% of SGS Mexico;

WHEREAS , Alcoa UK directly owns 100% of the issued and outstanding shares of common stock of SGS-UK Limited, a company incorporated under the laws of England and Wales (“ SGS UK ”);

WHEREAS , SGS directly owns 51% of the issued and outstanding shares of common stock of Mozaic Group Ltd., a Missouri corporation (“ Mozaic ”);

WHEREAS , the Purchaser desires to acquire from RMC and Alcoa UK the ownership interests of SGS, SGS Mexico and SGS UK, respectively, and Purchaser desires to acquire from SGS Canada certain assets of SGS Canada used by or relating to the Purchased Business, upon the terms and conditions set forth below.

NOW, THEREFORE , in consideration of the premises and the covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, each of the following terms shall have the following meaning:

Section 1.01 “ AAP ” or “ Alcoa Accounting Policies ” shall mean GAAP except as provided in Schedule 1.01 .

Section 1.02 “ Administered Claims ” shall have the meaning set forth in Section 8.09(b).

Section 1.03 “ Agreement ” shall have the meaning set forth in the Preamble.

Section 1.04 “ Affiliate ” means any Person, directly or indirectly, controlling, controlled by, or under common control with, Sellers or Purchaser (except as “affiliates” is defined in Section 6 03(c)). Without limiting the generality of the foregoing, a Person is considered to be in control of or to be controlled by another Person if such Person holds 50% or more of the outstanding voting equity interest in such other Person or such other Person holds 50% or more of its outstanding voting equity interest.

Section 1.05 “ Alcoa ” shall have the meaning set forth in the Preamble.

Section 1.06 “ Alcoa UK ” shall have the meaning set forth in the Preamble.

Section 1.07 “ Applicable Environmental Law ” shall have the meaning set forth in Section 11.01 (b).

Section 1.08 “ Assignment and Assumption Agreement ” shall have the meaning set forth in Section 10.02(c).

Section 1.09 “ Assumed Liabilities ” means all of the liabilities of the Companies, the Subsidiaries and SGS Canada except the Excluded Liabilities.

Section 1.10 “ Audited Financial Statements ” shall have the meaning set forth in Section 4.16(a).

Section 1.11 “ Bank Accounts ” means all of the bank accounts of SGS, SGS Mexico, SGS UK, Mozaic, SGS Canada, and the Subsidiaries utilized exclusively for the Purchased Business, all of which are listed on Schedule 1.11 .

Section 1.12 “ Best Efforts ” means commercially reasonable efforts that a prudent person desiring to achieve a result would use in similar circumstances to ensure that the result is achieved as expeditiously as possible, provided, however, that an obligation to use Best Efforts under this Agreement does not require the person subject to that obligation to take actions that would result in a materially adverse change in the benefits to that person of this Agreement and the transactions contemplated by this Agreement.

Section 1.13 [Intentionally omitted]

Section 1.14 “ Books and Records ” means (a)  all books and records and operating data in the possession of each of the Companies, the Subsidiaries, or SGS Canada, and (b)  all books and records and operating data in the possession of the Sellers primarily relating to the Purchased Business, in each case including, but not limited to, all lists of customers, lists of suppliers, all sales and credit information, advertising and purchasing materials and correspondence, quotation records, resume files, payroll master files and all collection and credit records of the Purchased Business, except as listed on Schedule 1.14 .

Section 1.15 “ Business Day ” means any day other than a weekend or a day that the Federal Reserve Bank of Philadelphia is closed. If Business Day is not expressly referenced then the term “day” will refer to or be defined as a calendar day.

 

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Section 1.16 “ Business Employees ” shall have the meaning set forth in Section 4.09(a). Business Employees includes the employees of MCG, as such employees are identified in the MCG Purchase Agreement.

Section 1.17 “ Cap ” shall have the meaning set forth in Section 13.04(b).

Section 1.18 “ Canadian Assumed Plans ” shall have the meaning set forth in Section 9.03(b).

Section 1.19 “ Canadian Business Employees ” means those Business Employees employed in the Province of Ontario and the Province of Quebec.

Section 1.20 “ CERCLA ” means Comprehensive Environmental, Response, Compensation and Liability Act, 42 U.S.C. §§9601 et seq., as amended, and the rules and regulations thereunder.

Section 1.21 “ Closing ” shall have the meaning set forth in Section 10.01.

Section 1.22 “ Closing Date ” shall have the meaning set forth in Section 10.01.

Section 1.23 “ Closing Date Balance Sheet ” means the combined unaudited balance sheet of the Purchased Business as of the Closing Date.

Section 1.24 “ Closing Net Working Capital Statement ” shall have the meaning set forth in Section 3.01.

Section 1.25 “ Closing Net Working Capital ” shall have the meaning set forth in Section 3.01.

Section 1.26 “ Closing Purchase Price ” shall have the meaning set forth in Section 2.02.

Section 1.27 “ Code ” shall mean the Internal Revenue Code of 1986, as amended, and/or the relevant Tax Laws applicable in Canada, Mexico, and England and Wales, as the context suggests. All citations to the Code or to the regulations promulgated thereunder will include any amendments or any substitute or successor provisions thereto.

Section 1.28 “ Commitment Letters ” shall have the meaning set forth in Section 5.07.

Section 1.29 “ Companies ” means collectively SGS, SGS Mexico, SGS UK and Mozaic.

Section 1.30 “ Confidentiality Agreement ” shall have the meaning set forth in Section 8.08.

Section 1.31 “ Contract ” means any legally binding agreement, written or oral commitment, arrangement, lease, license, understanding or contract.

Section 1.32 “ Corporate Documents ” shall have the meaning set forth in Section 4.05(a).

Section 1.33 “ CPA Firm ” shall have the meaning set forth in Section 3.03.

Section 1.34 “ CPR ” shall have the meaning set forth in Section 14.16.

Section 1.35 “ Deductible ” shall have the meaning set forth in Section 13.04(a).

 

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Section 1.36 “ Direct Claim ” shall have the meaning set forth in Section 13.05(c).

Section 1.37 “ Dispute ” shall have the meaning set forth in Section 14.16.

Section 1.38 “ Eastgate Purchase Agreement ” means that certain Purchase Agreement dated March 31, 2005, for the sale of Real Property owned by SGS (f/k/a Southern Gravure Services, Inc.) in Richmond, Virginia.

Section 1.39 “ Eastgate Purchase Price ” means US $2.1 million dollars, to be received by Purchaser from the Commonwealth of Virginia, Dept. of Transportation at or after the closing of the Eastgate Purchase Agreement, as may be adjusted under Section 8.18.

Section 1.40 “ Employee Benefit Plans ” shall have the meaning set forth in Section 4.13(a).

Section 1.41 “ Encumbrance ” means any mortgage, covenant, condition, restriction, option, lien (statutory or other), pledge, charge, security interest, hypothec, easement or other encumbrance.

Section 1.42 “ Enterprise Value ” shall have the meaning set forth in Section 8.16(b).

Section 1.43 “ Environmental Permits ” shall have the meaning set forth in Section 4.15(a).

Section 1.44 “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and rules and regulations promulgated thereunder.

Section 1.45 “ ERISA Affiliate ” means any employer that is, or at any time with respect to which any relevant statute of limitations remains open was, together with any Seller, considered to be a “single employer” under section 414(b), 414(c) or 414(m) of the Code.

Section 1.46 “ Excluded Assets ” means (i)  all cash and cash equivalents; (ii)  all surety bonds and contracts of insurance insuring the Purchased Business, the assets of the Purchased Business or the Business Employees, except those policies set forth on Schedule 1.46 ; (iii)  all rights to all refunds or credits of Taxes levied or imposed upon, or in connection with the Purchased Business with respect to any taxable period or portion thereof that ends on or before the Closing Date, except to the extent that any such refunds or credits are included in the Closing Date Balance Sheet; (iv)  all rights, claims and privileges of Sellers and their Affiliates (other than the Companies, the Subsidiaries and SGS Canada), except to the extent they relate primarily to the Purchased Business, the assets of the Purchased Business or Transferred Employees; (v)  all Inter-Company Accounts; and (vi)  the contracts, agreements, leases and other assets listed on Schedule 1.46 .

Section 1.47 “ Excluded Liabilities ” means those liabilities for which Sellers retain responsibility vis-à-vis Purchaser pursuant to this Agreement, which liabilities are set forth on Schedule 1.47 .

Section 1.48 “ Final Net Working Capital Statement ” shall have the meaning set forth in Section 3.03.

Section 1.49 “ Financial Statements ” shall have the meaning set forth in Section 4.16.

Section 1.50 “ Financing ” shall have the meaning set forth in Section 6.03(b).

 

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Section 1.51 “ Foreign Companies ” shall have the meaning set forth in Section 4.13 (c)(iii).

Section 1.52 “ Foreign Employee Benefit Plan ” shall have the meaning set forth in Section 4.13(c).

Section 1.53 “ GAAP ” means United States generally accepted accounting principles.

Section 1.54 “ Gains Taxes ” shall have the meaning set forth in Section 4.05(b)

Section 1.55 “ Government ” means any agency, division, subdivision, audit group or procuring office of the government of the United States, or of any foreign country, and any state, province or territory thereof, or any city, county or municipality thereof, including the employees or agents thereof.

Section 1.56 “ GST ” means goods and services tax or harmonized sales tax imposed under the GST Act.

Section 1.57 “ GST Act ” means Part IX of the Excise Tax Act (Canada).

Section 1.58 “ Hazardous Substance ” shall have the meaning set forth in Section 11.01(a).

Section 1.59 “ Inactive US Employees ” shall have the meaning set forth in Section 9.04.

Section 1.60 “ Indebtedness ” means, without duplication (i)  all indebtedness for borrowed money of the Companies, the Subsidiaries, or SGS Canada, (ii)  all obligations of the Companies, the Subsidiaries or SGS Canada evidenced by notes, bonds, debentures or similar instruments (other than capital lease obligations), (iii)  the amount of the liability in respect of all capital lease obligations of the Companies, the Subsidiaries or SGS Canada, (iv)  all indebtedness of the type described in clauses (i) through (iii) above guaranteed directly or indirectly in any manner by the Companies, the Subsidiaries or SGS Canada including interest and penalties thereon, (v)  any indebtedness of the type described in clauses (i) through (iv) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any lien on assets or property owned by the Companies, the Subsidiaries or SGS Canada and (vi)  all accrued but unpaid interest (or interest equivalent) to the date of determination, and all prepayment premiums or penalties or commitment fees, related to any items of indebtedness of the type described in clauses (i) through (v) above. Excluded Liabilities are not included in this definition of “Indebtedness” and Excluded Liabilities are not subject to the Purchase Price adjustment in Section 2.02 to deduct Indebtedness from the Purchase Price. Indebtedness does not include without limitation (i)  anything on the Closing Net Working Capital Statement, (ii)  any Excluded Assets or Excluded Liabilities, (iii)  any obligations of the Companies, the Subsidiaries or SGS Canada for the deferred purchase price of property or services (including without limitation earn-outs and similar arrangements), or (iv)  any Intra-Company Accounts.

Section 1.61 “ Indemnitee ” means a party seeking indemnification.

Section 1.62 “ Indemnitor ” means a party against whom indemnification is sought.

Section 1.63 “ Insurance Payment ” shall have the meaning set forth in Section 8.09(c).

 

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Section 1.64 “ Insurance Policies ” shall have the meaning set forth in Section 4.17.

Section 1.65 “ Intangible Property ” means with respect to the Purchased Business all intellectual property or other intangible property of whatever nature and kind including, without limitation, all domestic and foreign trademarks, service marks, business names, trade names, domain names, trade dress and trading styles, patents and patent applications, inventions and technology (whether or not patentable), trade secrets, industrial designs and copyrights, rights in software, database and other collections and compilations of data, rights of publicity/ privacy, and all registrations and applications for registration thereof, and all inventions, formulae, recipes, product formulations, processes, processing methods, and techniques, know-how, manuals, and any licenses or authorizations from the Companies, Subsidiaries or SGS Canada to a third party to use any of its intellectual property or other intangible property, except for Excluded Assets and Excluded Liabilities.

Section 1.66 “ Inter-Company Accounts ” means those accounts that relate to various items including certain payables, receivables, notes, accounts, indebtedness and other liabilities between any of the Companies, Subsidiaries and SGS Canada, on the one hand, and Sellers or any of their Affiliates (other than any of the Companies, Subsidiaries and SGS Canada), on the other, none of which are included in the Purchased Business and all of which are set forth as of September 30, 2005 on Schedule 1.66 .

Section 1.67 “ Intra-Company Accounts ” means those accounts and debts between the Companies, the Subsidiaries and/or SGS Canada, which accounts and debt are included in the Purchased Business, all of which are set forth as of September 30, 2005 on Schedule 1.66 and Schedule 4.23 .

Section 1.68 “ Law ” means any applicable federal, state, provincial, local, municipal or foreign order, writ, injunction, decree, regulation, ordinance, law, statute or code.

Section 1.69 “ Leases ” shall have the meaning set forth in Section 4.08(b).

Section 1.70 “ Leased Real Property ” shall have the meaning set forth in Section 4.08(b).

Section 1.71 “ Losses ” means all damages, losses, amounts paid in settlement, claims, liabilities, judgments, reasonable costs and expenses, interest, penalties and charges, including reasonable attorneys’ fees, but not including (i)  incidental, special or punitive damages, except in the case of fraud or as claimed or asserted by or paid to third parties to the extent actually and finally awarded to a third party by a court of competent jurisdiction, or (ii)  any internal fees and expenses of the indemnified party (including without limitation in-house counsel fees and expenses). For the avoidance of doubt, Sellers will in no event be liable for any incidental damages or any internal legal costs incurred by Purchaser, the Companies, the Subsidiaries or the Purchased Business.

Section 1.72 “ LTD ” means long term disability.

Section 1.73 “ Major Customer ” means those customers of the Purchased Business (by volume in dollars of sales to such customers) to whom the Purchased Business has had more than $3 million in net sales for the one year period ended December 31, 2004.

Section 1.74 “ Material Adverse Effect ” means any change or effect that either individually or in the aggregate is or could reasonably be expected to be materially adverse to the assets, liabilities, operations, financial condition or results or the business operations of the Purchased Business as a whole,

 

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other than any change or effect arising out of: (i)  general economic conditions or conditions affecting the Purchased Business generally in the industries in which the Purchased Business operates; (ii)  the loss of personnel, or (iii)  changes in any Laws or its or their interpretation. Material Adverse Effect includes, after execution of this Agreement and before the Closing Date (i)  actual loss (or threatened loss, provided Sellers have received written notice thereof) of a customer or customers with revenues of more than 5% of the total revenues of the Purchased Business based on the 2005 forecast, and (ii)  actual loss (or threatened loss, provided Sellers have received written notice thereof) of E.I. DuPont de Nemours and Company as a supplier to the Purchased Business. For purposes of determining whether a breach of a representation or warranty under this Agreement has a Material Adverse Effect, the effect of such breach shall be considered cumulatively with the effect of all other breaches (or circumstances which, but for materiality or Material Adverse Effect qualifiers, would be breaches) of other representations and warranties, in each case, determined without regard to any materiality or Material Adverse Effect qualifiers. For purposes of this definition of Material Adverse Effect, the effect of any matter as to any past period shall be determined based on its actual effect, and its effect as to any future period shall be determined based on the effect that such matter is reasonably likely to have. Except as explicitly stated otherwise, any reference to the term “material” will be construed accordingly.

Section 1.75 “ Material Contract ” means (i)  any agreement or contract providing for aggregate future payment of at least US$500,000, (ii)  any loan agreement, credit agreement, promissory note, guarantee, subordination agreement, letter of credit, deferred purchase price, earn-out or other similar type of contract related to Indebtedness or the granting of material liens, (iii)  all Contracts between or among any Company, any Subsidiary, or SGS Canada, on the one hand, and any Seller or its Affiliates (other than any Company, any Subsidiary, or SGS Canada), on the other hand, (iv)  all employment, severance, retention or consulting Contracts with Transferred Employees (other than oral at-will arrangements), (v)  all Contracts for the sale or purchase of any material assets of the Purchased Business (other than sales of inventory in the ordinary course of business), (vi)  all guaranties of any obligation of any Person for borrowings or lease obligations given by the Companies or the Subsidiaries, (vii)  any joint venture or limited partnership agreements, (viii)  all Contracts that provide for the purchase of all or substantially all of any Company’s, any Subsidiary’s, or SGS Canada’s requirements of a particular product from a particular supplier, (ix)  all licenses or similar agreements regarding material Intangible Property, whether as licensee or licensor, (x)  all Contracts imposing non-competition obligations on a Company, a Subsidiary or SGS Canada, (xi)  all Contracts to acquire all or substantially all of the assets or stock of another company or a line of business, whether by merger, consolidation, sale or other transfer, (xii)  the Leases; or (xiii)  any other agreement or contract material to the business, operations or financial condition of the Purchased Business, taken as a whole, in each case, except for Excluded Assets.

Section 1.76 “ MCG ” means MCG Graphics Limited, a company incorporated under the laws of England and Wales.

Section 1.77 “ MCG Purchase Agreement ” means that Agreement, including related attachments and disclosure schedules, dated November 4, 2005, among Omnipack PLC, SGS – UK and Daniel M. Bejarano, under which SGS – UK acquired all of the capital shares of MCG.

Section 1.78 “ Mexican Business Employees ” shall have the meaning set forth in Section 9.01(a)(iv).

Section 1.79 “ Mozaic ” shall have the meaning set forth in the Recitals.

 

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Section 1.80 “ Mozaic DC Plans ” shall have the meaning set forth in Section 9.02(b)(ii).

Section 1.81 “ Mozaic Shares ” shall have the meaning set forth in Section 4.03(a).

Section 1.82 “ Multiemployer Plan ” shall mean a plan defined in Section 4001 (a)(3) of ERISA.

Section 1.83 “ Net Working Capital ” shall mean as of the applicable date, the sum of the account balances for the accounts listed on Schedule 1.83 related to accounts receivable, prepaid expenses and other current assets of the Purchased Business (excluding MCG), less the sum of account balances for the accounts listed on Schedule 1.83 related to accounts payable, accrued compensation and other current liabilities of the Purchased Business (excluding MCG). For avoidance of doubt, the calculation of “Net Working Capital” shall not include either the line items/accounts entitled “Allowance for Customer Claims and Credits” or “Allowance for Doubtful Accounts” or any amounts associated with such reserves and will also not include any Excluded Assets and Excluded Liabilities. MCG is not included in calculating Net Working Capital for purposes of Article 3.

Section 1.84 “ New Principal Employer ” shall have the meaning set forth in Section 13.02.

Section 1.85 “ Non-Compete ” shall have the meaning set forth in Section 8.14.

Section 1.86 “ Owned Real Property ” shall have the meaning set forth in Section 4.08(a).

Section 1.87 “ Ownership Interest ” shall have the meaning set forth in Section 8.16(b).

Section 1.88 “ PBGC ” shall have the meaning set forth in Section 4.13(b)(v)( 1).

Section 1.89 “ Pension Provisions ” shall have the meaning set forth in Section 13.02.

Section 1.90 “ Pension Scheme ” shall have the meaning set forth in Section 13.02.

Section 1.91 “ Permits ” shall have the meaning set forth in Section 4.11.

Section 1.92 “ Permitted Exceptions ” means (i)  those exceptions to title to the assets of the Purchased Business listed on Schedule 1.92 ; (ii)  statutory liens securing all or a portion of the purchase price of an asset of the Purchased Business which arose in connection with the purchase of an asset of the Purchased Business after the date of the Unaudited Financial Statements; (iii) carriers’, warehousemen’s, mechanics’ and materialsmen’s and other similar liens arising in the ordinary course of the Purchased Business consistent with past practice for sums not yet due and payable or the validity of which is being contested in good faith by appropriate proceedings; (iv)  all exceptions, restrictions, easements, rights of way and encumbrances set forth in the title insurance policies listed on Schedule 1.92 ; and (v)  other Encumbrances that are neither material in amount nor materially detract from the value of nor materially impair the use of the property affected by such Encumbrance for the Purchased Business.

Section 1.93 “ Person ” shall mean a natural person, a corporation, a partnership or any other legal entity.

Section 1.94 “ Phase I and II Reports ” shall have the meaning set forth in Section 11.02.

 

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Section 1.95 “ Pre-Closing Returns ” shall have the meaning set forth in Section 8.06(a).

Section 1.96 “ Pre-Closing Taxes ” shall have the meaning set forth in Section 8.06(a).

Section 1.97 “ Prohibited Transaction ” means a transaction defined in Section 406 or 407 of ERISA or Section 4975 of the Code for which a statutory or administrative exemption does not exist.

Section 1.98 “ Prohibited Terms ” shall have the meaning set forth in Section 8.07.

Section 1.99 “ Purchaser’s Assessment ” shall have the meaning set forth in Section 11.03.

Section 1.100 “ Purchased Business ” means (i)  Assumed Liabilities (other than the Excluded Liabilities) and (ii)  all of the property and assets (other than the Excluded Assets) (1)  owned or held for use by the Sellers or their Affiliates (other than SGS Canada) primarily in the business carried on by the Companies, the Subsidiaries and SGS Canada as of the Closing Date, and (2)  owned or held for use by SGS Canada, including in each case, without limitation, the Bank Accounts, the Books and Records, the accounts receivable, the contracts, the Owned Real Property and Leased Real Property, the Intangible Property, machinery, equipment, supplies, furniture, fixtures, leasehold improvements, motor vehicles, and prepaid expenses and comprised of creative design, packaging graphics, image carrier production and other enterprise support services conducted at their facilities, and all business activities incidental thereto, whether or not reflected in the Unaudited Financial Statements. Notwithstanding the foregoing, the Purchased Business shall include (other than Excluded Assets and Excluded Liabilities):

(a) 100% of the outstanding Shares of SGS;

(b) 100% of the outstanding SGS Mexico Social Parts;

(c) the entire share capital of SGS UK, together with its Subsidiary;

(d) 51 % of the outstanding Shares of Mozaic owned by SGS, together with Mozaic’ s Subsidiaries; and

(e) all of the assets and Assumed Liabilities of SGS Canada;

Section 1.101 “ Purchaser’s Knowledge ” for the purposes of this Agreement means the actual knowledge of the persons listed in Schedule 1.101 . Where any statement in this Agreement is expressed to be given or made to the knowledge of Purchaser or is qualified in some other manner having substantially the same effect, such statement will be deemed to be qualified by the additional statement that such knowledge is limited to the actual knowledge of the persons listed in Schedule 1.101 . after having made reasonable enquiries of the subject matter of the relevant statement and Purchaser will only be liable in respect of any breach of any representation or warranty on this basis.

Section 1.102 “ Purchase Price ” shall have the meaning set forth in Section 2.02.

Section 1.103 “ Purchaser ” shall have the meaning set forth in the Preamble.

Section 1.104 “ Purchaser SGS DC Plans ” shall have the meaning set forth in Section 9.02(b)(i).

 

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Section 1.105 “ QST ” means Quebec sales tax imposed under the QST Act.

Section 1.106 “ QST Act ” means Title I of An Act respecting the Quebec sales tax .

Section 1.107 “ Reallocation ” shall have the meaning set forth in Section 8.14.

Section 1.108 “ Real Property ” means the Owned Real Property and the Leased Real Property.

Section 1.109 “ Remediation ” shall have the meaning set forth in Section 4.15(b).

Section 1.110 “ Related Agreements ” means the share certificates referenced in Section 10.02(a), the Transition Services Agreement, the Bill of Sale and the Assignment and Assumption Agreement.

Section 1.111 “ Release ” shall have the meaning set forth in Section 11.01(c).

Section 1.112 “ Released Parties ” shall have the meaning set forth in Section 8.10(b).

Section 1.113 “ Representatives ” shall have the meaning set forth in Section 6.03(a).

Section 1.114 “ Required Consents ” shall have the meaning set forth in Section 7.02(d).

Section 1.115 “ Restricted Party ” shall have the meaning set forth in Section 8.10.

Section 1.116 “ Return ” or “ Returns ” means all returns, declarations, reports, statements, and other documents required to be filed in respect of Taxes.

Section 1.117 “ RMC ” shall have the meaning set forth in the Preamble.

Section 1.118 “ RST Act ” shall have the meaning set forth in Section 14.17.

Section 1.119 “ Rules ” shall have the meaning set forth in Section 14.16.

Section 1.120 “ Section 338(h)(10) Elections ” shall have the meaning set forth in Section 8.06(g).

Section 1.121 “ Sellers ” shall have the meaning set forth in Section Preamble.

Section 1.122 “ SGS ” shall have the meaning set forth in the Recitals.

Section 1.123 “ SGS Canada ” shall have the meaning set forth in Preamble.

Section 1.124 “ SGS DC Plans ” shall have the meaning set forth in the Section 9.02(b)(i).

Section 1.125 “ SGS DB Plans ” shall have the meaning set forth in Section 9.02(c).

 

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Section 1.126 “ SGS Mexico ” shall have the meaning set forth in the Recitals.

Section 1.127 “ SGS Mexico Social Parts ” shall have the meaning set forth in Section 4.03(a).

Section 1.128 “ SGS Shares ” shall have the meaning set forth in Section 4.03(a).

Section 1.129 “ SGS UK ” shall have the meaning set forth in Section Recitals.

Section 1.130 “ SGS UK Shares ” shall have the meaning set forth in Section 4.03(a).

Section 1.131 “ Shares ” will have the meaning set forth in Section 4.03(a).

Section 1.132 “ STD ” shall mean short term disability.

Section 1.133 “ Subsidiaries ” means all legal entities owned by the Companies and listed in Schedule 1.133 .

Section 1.34 “ Tangible Net Worth ” means the net worth of RMC, calculated by taking the (i)  total assets of RMC and subtracting (ii)  the total liabilities of RMC and the portion of RMC’s total assets attributable to goodwill, each as determined in accordance with GAAP.

Section 1.135 “ Tax ” or “ Taxes ” means any federal, state, provincial, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, goods and services, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto.

Section 1.136 “ Third Party Claim ” shall have the meaning set forth in Section 13.05(a).

Section 1.137 “ Third Party Sale Transaction ” shall have the meaning set forth in Section 8.16(b).

Section 1.138 “ Threshold ” shall have the meaning set forth in Section 8.16(a).

Section 1.139 “ to the knowledge of Sellers ” or “ to the best knowledge of Sellers ” for the purposes of this Agreement means the actual knowledge of the persons listed in Schedule 1.139 . Where any statement in this Agreement is expressed to be given or made to the knowledge of Sellers or is qualified in some other manner having substantially the same effect, such statement will be deemed to be qualified by the additional statement that such knowledge is limited to the actual knowledge of the persons listed in Schedule 1.139 , after having made reasonable enquiries of the senior management of the Purchased Business in respect of the subject matter of the relevant statement and Sellers will only be liable, jointly and severally, in respect of any breach of any representation or warranty on this basis.

Section 1.140 “ Transferred Employees ” shall mean Transferred US Employees, Transferred Canadian Employees, Transferred UK Employees and Transferred Mexican Employees.

Section 1.141 “ Transferred Canadian Employees ” shall have the meaning set forth in Section 9.01 (a)(ii)(3).

 

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Section 1.142 “ Transferred Mexican Employees ” shall have the meaning set forth in Section 9.01(a)(iv).

Section 1.143 “ Transferred Mozaic Employees ” shall have the meaning set forth in Section 9.01(a)(i).

Section 1.144 “ Transferred SGS Employees ” shall have the meaning set forth in Section 9.01(a)(i).

Section 1.145 “ Transferred UK Employees ” shall have the meaning set forth in Section 9.01(a)(iii).

Section 1.146 “ Transferred US Employees ” shall have the meaning set forth in Section 9.01(a)(i).

Section 1.147 “ Transfer Taxes ” shall have the meaning set forth in Section 14.04.

Section 1.148 “ Transition Services Agreement ” shall have the meaning set forth in Section 10.02(g).

Section 1.149 “ UK Business Employees ” shall have the meaning set forth in Section 9.01(a)(iii).

Section 1.150 “ Unaudited Financial Statements ” shall have the meaning set forth in Section 4.16(b).

Section 1.151 “ US DC Plans ” shall have the meaning set forth in Section 9.02(b)(ii).

Section 1.152 “ US Business Employees ” shall have the meaning set forth in Section 9.01(a)(i).

Section 1.153 “ US Employee Benefit Plan ” shall have the meaning set forth in Section 4.13(b).

Section 1.154 “ US Employee Pension Benefit Plan ” shall have the meaning set forth in Section 4.13(b)(ii).

Section 1.155 “ US Employee Welfare Benefit Plan ” shall have the meaning set forth in Section 4.13(b)(iii).

Section 1.156 “ VAT ” shall have the meaning set forth in Section 14.04.

 

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ARTICLE 2

PURCHASE AND SALE

Section 2.01. Purchase and Sale of the Purchased Business . Subject to the terms and conditions set forth in this Agreement, on the Closing Date, Sellers hereby agree to transfer, sell and convey the Purchased Business to Purchaser, and Purchaser hereby agrees to purchase the Purchased Business and assume the Assumed Liabilities from Sellers for the consideration specified in this Agreement. Notwithstanding anything to the contrary contained herein, Purchaser will not purchase, assume or be bound by, or be obligated or responsible for, any Excluded Liability.

Section 2.02. Purchase Price . As consideration for the sale of the Purchased Business to Purchaser, Purchaser will pay to Sellers (a)  US$409,400,000.00, less (b)  the Indebtedness of the Purchased Business as of the Closing Date, plus (c)  the Eastgate Purchase Price. The sum of (a) and (b) is the “ Closing Purchase Price ”, and the sum of (a), (b) and (c), as it may be adjusted pursuant to Article 3, Section 6.05(b) and Section 8.18 below, is the “ Purchase Price .”

Section 2.03. Payment of the Closing Purchase Price . Purchaser will pay the Closing Purchase Price to Sellers in immediately available funds on the Closing Date in accordance with Seller’s written instructions. By no later than 1:00 (one o’clock) in the afternoon (Eastern Time) on the Closing Date, Purchaser will instruct its bank or banks to transfer the amount of the Closing Purchase Price to a bank specified by Sellers by wire transfer of immediately available funds. Purchaser will pay the Eastgate Purchase Price to Sellers in immediately available funds within three (3) Business Days of the receipt thereof. Any adjustment to the Closing Purchase Price will be paid in accordance with Section 3.04(b).

Section 2.04. Allocation of Purchase Price . At least five Business Days prior to the Closing Date, Purchaser and Sellers will agree as to the allocation of the Purchase Price (together with any Assumed Liabilities properly taken into account as consideration for assets comprising the Purchased Business for Tax purposes) among the assets comprising the Purchased Business, which allocation shall be based on the principles set forth in Schedule 2.04 . Purchaser and Sellers will agree to a reasonable readjustment of the allocation of the Purchase Price that has been subject to an adjustment pursuant to Section 3.04(b) within 30 days following the determination of any increase or decrease in the Purchase Price pursuant to Section 3.03(a). Sellers and Purchaser will each complete all Returns, designations and elections in a manner consistent with the final allocation and otherwise follow the final allocation for all Tax purposes on and subsequent to the Closing Date and not take any position inconsistent with the final allocation. If such allocation is disputed by any Tax authority or other Government, the party receiving notice of such dispute will promptly notify the other party and the parties will use their Best Efforts to sustain the final allocation. Sellers and Purchaser will share information and cooperate to the extent reasonably necessary to permit the transactions contemplated by this Agreement to be properly, timely and consistently reported.

ARTICLE 3

ADJUSTMENT TO PURCHASE PRICE

Section 3.01. Preparation of Closing Date Balance Sheet . As soon as practicable, but in any event within 45 days after the Closing Date, Sellers will prepare and deliver to Purchaser the Closing Date Balance Sheet and a statement (the “ Closing Net Working Capital Statement ”), which shall set forth an itemized calculation of the Net Working Capital of the Purchased Business (excluding MCG) as of the Closing Date as derived from the Closing Date Balance Sheet (the “ Closing Net Working Capital ”).

 

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Purchaser will give Sellers and their representatives access at all reasonable times to the properties, Books and Records of the Purchased Business for such purpose, subject to the execution by the Sellers of appropriate confidentiality provisions and subject to any applicable privileges that may attach to such Books and Records. The Closing Date Balance Sheet and the Closing Net Working Capital Statement will be prepared in accordance with AAP, using the same accounting methods, policies, practices and procedures, with consistent classifications, judgments and estimation methodology as used in preparing the Unaudited Financial Statements. Notwithstanding the definition of Purchased Business, no adjustment will be made to the Purchase Price under this Article 3 based upon the working capital of MCG (including without limitation any working capital adjustment under the MCG Purchase Agreement).

Section 3.02. Foreign Companies’ Exchange . The exchange rates in effect on the date of execution of this Agreement will be used to convert the local currency used on the local Companies’ balance sheets into U.S. dollars for purposes of preparing the Closing Date Balance Sheet and the Closing Net Working Capital Statement. Specifically, the parties will use the William Mercer Company midpoint foreign exchange rates (WMR FIX) in effect on the date of execution of this Agreement as provided on the Reuters system.

Section 3.03. Adjustments to Closing Date Balance Sheet . Purchaser will have 45 days from the date of delivery of the Closing Date Balance Sheet to review the Closing Date Balance Sheet and the Closing Net Working Capital Statement. If, in Purchaser’s reasonable judgment, the Closing Date Balance Sheet and the Closing Net Working Capital Statement were not prepared in accordance with Section 3.01, Purchaser will have the right to suggest adjustments to the Closing Date Balance Sheet and the Closing Net Working Capital Statement within such 45-day period. However, Purchaser may not dispute any amounts reflected on the Closing Date Balance Sheet and the Closing Net Working Capital Statement except on the basis that the Closing Date Balance Sheet and the Closing Net Working Capital Statement were not prepared in accordance with AAP applied on a basis consistent with Section 3.01. Purchaser will notify Sellers in writing of each disputed item, specifying the amount thereof in dispute, within the 45-day review period set forth in this Section 3.03. Within 45 days of any notice of a disputed item by Purchaser, Purchaser and Sellers will use their Best Efforts to resolve and agree upon any such proposed adjustments. If, after a period of 30 days following the date on which notice of any proposed adjustment is given, any adjustment still remains disputed, then Sellers and Purchaser will engage by mutual agreement an internationally recognized accounting firm to resolve any remaining disputes (the “ CPA Firm ”). The decision of the CPA Firm will be final and binding on the parties. The scope of the CPA Firm’s engagement (which shall not be an audit) shall be limited to the resolution of the items contained in the notice of dispute, and the recalculation, if any, of the Closing Net Working Capital in light of such resolution, and such firm shall be deemed to be acting as experts and not as arbitrators. In its review of the Closing Date Balance Sheet and the Closing Net Working Capital Statement, the CPA Firm will be limited, as to each item in dispute, to resolving such item either in favor of the Sellers or in favor of the Purchaser. The fees and expenses of the CPA Firm will be allocated between Purchaser, on the one hand, and the Sellers, on the other, so that the Purchaser’s share of such fees and expenses shall be equal to the percentage of the disputed amount that is unsuccessfully disputed by the Purchaser, and the Seller’s share of such fees and expenses shall be equal to the percentage of the disputed amount that is unsuccessfully disputed by the Sellers, in each case as finally determined by the CPA Firm. For purposes of complying with the terms set forth in this Section 3.03, each party shall cooperate with and make available to the other party and its representatives all information, records, data and working papers, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Final Net Working Capital Statement and the resolution of any disputes thereunder. The “ Final Net Working Capital Statement ” shall be deemed to be the (i) the Closing Net

 

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Working Capital Statement if Purchaser does not notify Sellers of any disputed items within the 45-day review period specified above, or (ii)  if Purchaser does notify Sellers of any disputed items within the 45-day review period specified above, the Closing Net Working Capital Statement, as adjusted by either (A)  the agreement of the parties or (B)  the CPA Firm.

Section 3.04. Adjustment to Purchase Price .

(a) Net Working Capital . The Purchase Price is based in part on Net Working Capital of the Purchased Business of $36,093,000. If the Net Working Capital of the Purchased Business as set forth on the Final Net Working Capital Statement exceeds 36,343,000, the Purchase Price will be increased by such excess on a dollar-for dollar basis. If the Net Working Capital of the Purchased Business as set forth on the Final Net Working Capital Statement is less than 35,843,000, the Purchase Price will be decreased by such shortfall on a dollar-for dollar basis. No adjustment will be made to the Purchase Price if the Net Working Capital as set forth on the Final Net Working Capital Statement is between 35,843,000 and 36,343,000.

(b) Adjustment . Any net increase in the Purchase Price pursuant to Section 3.04(a) will be paid to Sellers by Purchaser within five Business Days following the determination thereof in the same manner as payment of the Purchase Price under Section 2.03 or in accordance with Sellers’ written instructions. Any net decrease in the Purchase Price resulting pursuant to Section 3.04(a) will be paid to Purchaser by Sellers within five Business Days following the determination thereof by wire transfer or certified check in accordance with Purchaser’s instructions.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF SELLER

Each of the Sellers, jointly and severally, hereby makes the following representations and warranties to Purchaser on and as of the date hereof:

Section 4.01. Sellers’ Authority . Each Seller has full corporate power and authority to enter into this Agreement and each of the Related Agreements to which it is to be a party and to consummate the transactions contemplated hereby and thereby. The execution of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized in accordance with each Seller’s Corporate Documents and no other corporate proceeding on the part of any Seller is necessary to authorize this Agreement or the Related Agreements or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and the Related Agreements will be at the Closing, duly and validity executed and delivered by each Seller, and constitute, or will constitute at the Closing, legal, valid, binding and enforceable agreements of each Seller, enforceable against it in accordance with their terms, except as limited (i)  by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Law affecting creditors’ rights generally, and (ii)  by general principles of equity.

Section 4.02. Organization and Good Standing of the Companies, the Subsidiaries and SGS Canada . The Companies, the Subsidiaries and SGS Canada are corporations duly organized, validly existing and in good standing under the Law of the jurisdiction in which they are incorporated, and each has full corporate power to carry on its business as currently conducted and to own or lease and to operate the properties that it now owns or leases. Each Company, each Subsidiary and SGS Canada is duly qualified and in good standing as a foreign corporation in each jurisdiction where the current nature

 

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of its business or the ownership or leasing of its properties requires such qualification (which jurisdictions are listed in Schedule 4.02) , except where failure to so qualify or be in good standing has no Material Adverse Effect.

Section 4.03. Capitalization of Companies; Title to Shares .

(a) Capital Shares . The capital stock of SGS consists solely of 750 shares of 6% cumulative nonparticipating, preferred stock, par value of $100.00 per share, none of which are issued and outstanding, and 18,000 shares of common stock, par value of $25.00 per share, of which 16,032 shares are issued and outstanding (the “ SGS Shares ”). The capital stock of SGS Mexico consists solely of three social parts, two of which represent the fixed capital stock and one represents the variable capital stock, par value of $1.00 Peso Mexican Currency or its multiple, all of which have voting rights and are issued and outstanding (the “ SGS Mexico Social Parts ”), with RMC holding 99% of the SGS Mexico Social Parts and SGS holding 1% of the SGS Mexico Social Parts. The issued share capital of SGS UK is comprised of 50,000 ordinary shares of £1 each, all of which are issued and outstanding (the “ SGS UK Shares ”). The capital stock of Mozaic consists solely of 100,000 shares of voting common Class A stock and 900,000 shares of non-voting common Class B stock, $0.10 par value per share, of which 10,314 shares of voting common stock and 142,563 shares of non-voting common stock (which equal 51% of the outstanding shares of each class of voting common stock and 50.997% of each class of non-voting common stock, respectively) are issued and outstanding to SGS, and such shares owned by SGS are hereinafter referred to as the “ Mozaic Shares .” The Mozaic Shares together with the SGS Shares, the SGS Mexico Social Parts, and the SGS UK Shares, are referred to as the “ Shares .” All of the issued and outstanding Shares are validly issued and outstanding, fully paid and non-assessable. The Shares have been issued and will be transferred to Purchaser in compliance with all applicable federal, state and foreign securities Law. Except as provided on Schedule 4.03 . there are no outstanding subscriptions, options, warrants, calls or other rights of any kind, agreements, arrangements or commitments to purchase or otherwise acquire, and no securities convertible into, capital stock or other securities of the Companies.

(b) Title to SGS Shares . RMC is the owner, beneficially and of record, of all of the SGS Shares. All of the SGS Shares are free and clear of all Encumbrances.

(c) Title to SGS Mexico Social Parts . RMC and SGS are the owners, beneficially and of record, of all of the SGS Mexico Social Parts. All of the SGS Mexico Social Parts are free and clear of all Encumbrances.

(d) Title to SGS UK Shares . Alcoa UK is the legal and beneficial owner of all of the SGS UK Shares. All of the SGS UK Shares are free and clear of all Encumbrances.

(e) Title to Mozaic Shares . SGS is the owner, beneficially and of record, of the Mozaic Shares. All of the Mozaic Shares are free and clear of all Encumbrances, except as set forth on Schedule 4.03 .

(f) No Options . There is no contract, option or any other right of another binding upon Sellers to sell, transfer, assign, pledge, charge, mortgage or in any other way dispose of or encumber any of the assets of SGS Canada other than pursuant to the provisions of this Agreement or pursuant to purchase orders accepted by SGS Canada in the usual and ordinary course of business.

Section 4.04. Subsidiaries . Except as set forth on Schedule 1.133, the Companies, the Subsidiaries and SGS Canada do not own or hold, directly or indirectly, any ownership interest of any kind in any Person.

 

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Schedule 4.02 and Schedule 4.04 set forth the jurisdiction and date of formation, officers and directors, authorized stock or other ownership interests, the current owners of its equity and their respective ownership interests therein of each Subsidiary and any jurisdictions in which any such Subsidiary is qualified to do business as a foreign corporation, and any exceptions to such disclosures. Mozaic’s and SGS UK’s ownership interests in the Subsidiaries as described in Schedule 4.04 are validly issued, fully paid and non-assessable and owned of record and beneficially by Mozaic and SGS UK, free and clear of all Encumbrances. There are no outstanding subscriptions, options, warrants, calls or other rights, agreements, arrangements or commitments obligating Mozaic or SGS UK to transfer or sell any of its shares in any Subsidiary.

Section 4.05. Consents and Approvals; No Violation . Except as set forth in Schedule 4.05 , neither the execution nor delivery of this Agreement nor the consummation by Sellers of the transactions contemplated hereby or thereby will:

(a) conflict with or result in any breach of any provision of the respective articles or certificates of incorporation and by-laws (or comparable charter and other organizational documents) (together, “ Corporate Documents ”) of Sellers, the Companies or the Subsidiaries;

(b) require any consent, approval, authorization or permit of, or filing with or notification to, any Government entity, except (i)  in connection with any state, provincial, or local tax which is attributable to the beneficial ownership of the Real Property, if any (the “ Gains Taxes ”); (ii)  as may be required by any applicable state or provincial securities or “blue sky” Laws or state or provincial takeover Laws; (iii)  such filings and consents as may be required under any Applicable Environmental Law pertaining to any notification, disclosure or required approval triggered by the transactions contemplated by this Agreement; (iv)  where the failure to obtain such consent, approval, authorization or permit, or to make such filing or notification, individually or in the aggregate, has no Material Adverse Effect or would not prevent or materially delay performance by the Companies, the Sellers or the Subsidiaries of their material obligations under this Agreement; and (v)  such filings, consents, approvals, orders, registrations and declarations as may be required under the merger notification investment Laws or competition Laws of any country (if any) in which Purchaser, Sellers or the Companies conduct any business or own any assets.

(c) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration or Encumbrance or loss of a material benefit) under any of the terms, conditions or provisions of any note, bond, mortgage, license, permit, lease, indenture, Contract, agreement or other instrument or obligation to which the Companies, the Subsidiaries or SGS Canada are a party or by which any of their properties or assets may be bound, except in any such case where requisite waivers or consents have been obtained or which individually or in the aggregate has no Material Adverse Effect; or

(d) assuming the consents, approvals, authorizations or permits and filings or notifications referred to in this Section 4.05 are duly and timely obtained or made, contravene or violate any Law applicable to the Companies, the Subsidiaries or SGS Canada or to any of their properties or assets, except for violations which, individually or in the aggregate, have no Material Adverse Effect.

Section 4.06. Intangible Property .

(a) The registered Intangible Property primarily used or held for use by the Purchased Business is set forth on Schedule 4.06 . Except as disclosed on Schedule 4.06 . the Companies, the Subsidiaries and SGS

 

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Canada are the owners of, or a licensee under valid licenses for, all items of the Purchased Business Intangible Property. Except as disclosed on Schedule 4.06 . (i)  neither the Companies, the Subsidiaries or SGS Canada is in material breach or default (nor with the giving of notice or lapse of time or both would be in material breach or default) under any license sublicense, consent or other agreement pertaining to any Intangible Property, and each such license, sublicense, consent or other agreement is now and immediately following the Closing (subject to any required consents, each of which is set forth on Schedule 4.05 ) shall be valid and in full force and effect; (ii)  to the knowledge of Sellers, no third party is in material breach or default (nor with the giving of notice or lapse of time or both would be in material breach or default) under any license sublicense, consent or other agreement pertaining to any Intangible Property; (iii)  to the knowledge of Sellers, there are no contracts, licenses or agreements between the Companies, the Subsidiaries or SGS Canada and any other person with respect to any Intangible Property under which there is any material dispute regarding the scope of such agreement, or performance under such agreement including with respect to any payments to be made or received thereunder; (iv)  to the knowledge of the Sellers, none of the Intangible Property is being infringed by any third party; and (v)  there are no claims pending or, to the knowledge of Sellers, threatened, that the Companies, the Subsidiaries or SGS Canada are in violation of any intellectual property or other intangible property rights of any third party, in each case other than any default, infringement or claim that, individually or in the aggregate, has no Material Adverse Effect.

(b) Except as set forth in Schedule 4.06 , all of the material patents, trademarks, service marks, copyright and domain names used by the Purchased Business are registered, valid and in full force and are held of record in the name of the applicable Company, Subsidiary or SGS Canada (or legal predecessor).

Section 4.07. Title to Assets; Absence of Encumbrances . Except as otherwise disclosed on Schedule 4.07 and subject to the Permitted Exceptions, each of the Sellers, the Companies, the Subsidiaries and SGS Canada has good and marketable title to, or, in the case of leased assets, has a valid leasehold interest in, all of the real and personal assets owned or used by the Purchased Business. Except for Permitted Exceptions and as otherwise disclosed on Schedule 4.07 . all such assets are free and clear of all Encumbrances.

Section 4.08. Real Property .

(a) Owned Real Property . Schedule 4.08 sets forth (i) the real property owned exclusively by the Companies, the Subsidiaries or SGS Canada, and (ii) all of the real property owned by the Sellers (other than SGS Canada) used primarily for the operation of the Purchased Business ((i) and (n), the “ Owned Real Property ”). All improvements on the Owned Real Property have been maintained in accordance with the usual business practices of each of the Sellers, the Companies, and the Subsidiaries, and to the best knowledge of Sellers there exist no material defects with respect to said improvements. Neither the Sellers, the Companies nor the Subsidiaries is in, and to the best knowledge of Sellers, none of the other parties to any Leases is in, material default under any of the Leases. Except as set forth in Schedule 4.08 , none of the Owned Real Property or Leased Real Property or any current use thereof violates any applicable building, zoning or other land-use Law or any covenant, condition, restriction, easement or order of any Government having jurisdiction over such property. Except as disclosed on Schedule 4.08 , there are no outstanding options, repurchase rights or rights of first refusal to purchase or lease any Owned Real Property, or any portion thereof or interest therein to which a Seller, a Company or a Subsidiary is a party. The Sellers, the Companies, SGS Canada and the Subsidiaries together have good and marketable fee title to all of the Owned Real Property, free and clear of all Encumbrances except for Permitted Exceptions.

 

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(b) Leased Real Property . Schedule 4.08 sets forth a list of all leases, subleases and licenses of real property, including all amendments, extensions, renewals, supplements and guaranties with respect thereto, (i) to which a Company, SGS Canada or a Subsidiary is a party, or (ii) to which a Seller (other than SGS Canada) is a party if the real property that is the subject of such Lease is used primarily in the Purchased Business (together, the “ Leases ” and, the real property that is the subject of the Leases, the “ Leased Real Property ”). True, correct and complete copies of all Leases have previously been made available to Purchaser. Neither the Sellers, the Companies nor any Subsidiaries are obligated to pay any leasing or brokerage commission relating to any Lease that has not already been paid and, except as set forth on Schedule 4.08 , none will have any obligation to pay any leasing or brokerage commission upon the renewal of any Lease.

(c) There are no material eminent domain, condemnation or other similar proceedings pending or threatened against any Seller, any Company or any Subsidiary or otherwise affecting any portion of the Owned Real Property or the Leased Real Property and no such entity has received any notice of the same.

Section 4.09. Labor and Employment Agreements .

(a) Each person actively and inactively employed in the Purchased Business as of the date of this Agreement including without limitation, all absent employees, those employees who are on leave of absence, military absence, STD, LTD and worker’s compensation, is listed, by name or by reference to a designated number, on Schedule 4.09 (which schedule may be updated as of the Closing Date to reflect any departures or new hires) (the “ Business Employees ”). The employees of MCG, as identified in the MCG Purchase Agreement, are incorporated by reference into Schedule 4.09 . Except as set forth in Schedule 4.09 . the Companies, the Subsidiaries and SGS Canada (i)  are not subject to any collective bargaining or other labor agreement relating to the Purchased Business; (ii)  are not a party to, involved in, or to the knowledge of the Sellers, threatened by, any labor dispute or unfair labor practice charge, or (iii)  are not subject to any employment, retainer, or consulting agreement that gives rise to any annual payment obligation in excess of $100,000 to any of the Business Employees to which Sellers or the Companies are a party, or by which either is bound and (iv)  have not recognized and are not required to recognize any labor organization as the collective bargaining representative of any of the employees of the Purchased Business. Except as set forth on Schedule 4.09 , in respect of SGS Canada, no Business Employee has any agreement as to the length of notice or termination or severance payment required to terminate his or her employment, other than as implied by Law. None of the Sellers, the Companies or the Subsidiaries have committed any unfair labor practice that has a Material Adverse Effect on the Purchased Business. There is no labor strike, work slowdown or stoppage pending or, to the knowledge of Sellers, threatened against the Purchased Business and except as set forth in Schedule 4.09, there has been no such action against the Purchased Business during the last three years.

(b) The Companies, SGS Canada and the Subsidiaries have properly classified for all purposes (including, without limitation, for all Tax purposes and for purposes of determining eligibility to participate in any employee benefit plan) all employees, leased employees, consultants and independent contractors (including nurses and recruiters), and have withheld and paid all applicable Taxes and made all appropriate filings in connection with services provided by such persons to the Companies, SGS Canada and each Subsidiary.

Section 4.10. Litigation and Proceedings . Except as set forth on Schedule 4.10 . there are no claims, actions, suits, proceedings or investigations, judicial or administrative, pending or to the best knowledge of Sellers, threatened, against, the Companies, the Subsidiaries or SGS Canada which individually or in

 

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the aggregate have a Material Adverse Effect. Except as set forth on Schedule 4.10 , no judgment, decree, injunction, rule or order of any Governmental entity or arbitrator is outstanding against the Companies, the Subsidiaries or SGS Canada that individually or in the aggregate has a Material Adverse Effect or which seeks to restrain, prohibit or invalidate the transactions contemplated by this Agreement.

Section 4.11. Legal Compliance . Except (a)  as set forth on Schedule 4.11 or (b)  as has no Material Adverse Effect, the Purchased Business has been conducted in accordance with all Laws applicable to the Sellers, the Companies or the Subsidiaries. Except as provided on Schedule 4.11 , the Companies, the Subsidiaries and SGS Canada collectively possess all requisite Governmental franchises, licenses, permits, authorizations, approvals and consents (“ Permits ”) to own their properties and to carry on the Purchased Business as it is now being conducted, and the Companies, the Subsidiaries and SGS Canada are not in violation of or in default under such Permit applicable to the Companies, the Subsidiaries, SGS Canada or any of their respective assets and properties, in each case other than where such failure to possess, violations, or defaults, individually or in the aggregate, has no Material Adverse Effect.

Section 4.12. Tax Matters .

(a) Filing of Returns . Except as set forth on Schedule 4.12 , the Companies and the Subsidiaries have properly completed and filed on a timely basis all Returns of the Companies and the Subsidiaries or related to the Purchased Business required to be filed on or prior to the date hereof. All such Returns are true, correct and complete and accurately reflect the taxable income (or other measure of Tax) of the Companies and the Subsidiaries in all material respects.

(b) Payment of Taxes . With respect to all amounts in respect of Taxes imposed on the Companies or the Subsidiaries or for which the Companies or the Subsidiaries are or could be liable, whether to Tax authorities (as, for example, under Law) or to other Persons (as, for example, under Tax allocation agreements), with respect to all taxable periods or portions of periods ending on or before the Closing Date, all applicable Tax Laws and agreements have been fully complied with in all material respects, and all such amounts required to be paid by the Companies or the Subsidiaries to Tax authorities or others on or before the date hereof have been paid.

(c) Audit History . Except as set forth on Schedule 4.12 , no Returns with respect to the Companies or the Subsidiaries are currently the subject of a Tax audit or examination and neither the Sellers, the Companies, nor the Subsidiaries have received notice of any threatened Tax audit or examination. No material issues have been raised (or are currently pending) by any Tax authority in connection with any of the Returns filed by the Companies or the Subsidiaries in connection with the Purchased Business. No waivers of statutes of limitation with respect to the Returns have been given by or requested with respect to any Taxes of the Companies or the Subsidiaries. Except to the extent shown on Schedule 4.12 , all deficiencies asserted or assessments made as a result of any examinations have been fully paid, or are fully reflected as a liability in the financial statements of the Companies, the Subsidiaries or SGS Canada, or are being contested and an adequate reserve therefor has been established and is fully reflected in the Unaudited Financial Statements of the Purchased Business.

(d) Liens . There are no liens for Taxes (other than for current Taxes not yet due and payable) on the assets of the Companies, the Subsidiaries or SGS Canada.

(e) SGS Canada . SGS Canada is not a non-resident person within the meaning of section 116 of the Income Tax Act (Canada).

 

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(f) All Taxes of the Companies and Subsidiaries or with respect to the Purchased Business that are required to be withheld and deposited have been withheld and deposited.

(g) No claim has ever been made by a jurisdiction in which any of the Companies or the Subsidiaries does not file Returns that such Company or Subsidiary is or may be subject to taxation in that jurisdiction.

(h) None of the Companies or the Subsidiaries will be required, following the Closing Date, to include in taxable income (or exclude as a deduction from taxable income) any income or expense item that is attributable to a period prior to the Closing Date as a result of a change in method of accounting, closing agreement, installment sale or other event occurring prior to the Closing.

(i) SGS Canada is duly registered for the purposes of the GST Act (registration number 887994150RT0001) and is duly registered for the purposes of the QST Act (registration number 1210803447TQ0001).

Section 4.13. Employee Benefits .

(a) Employee Benefits Plans . Schedules 4.13 (b) and (c) lists each employee welfare benefit plan, employee pension benefit plan, and any other material employee benefit plan, program or arrangement of any kind which the Sellers, the Companies or the Subsidiaries maintain, participate in, contribute to, or is a party to, and in which the Business Employees participate in, or are entitled to receive benefits under, or are a party to, including, without limitation, any written employment agreement and any written retention agreement, any severance, bonus, medical, dental, vision care, disability, employee relocation, cafeteria benefit, dependent care, life or accident insurance, pension, profit sharing, deferred compensation, or other employee incentive program, agreement or commitment, whether covered by private plans or plans mandated under Law (individually, an “ Employee Benefit Plan ” and collectively the “ Employee Benefit Plans ”). Except as set forth on Schedule 4.13(a) , the Subsidiaries do not have any Employee Benefit Plans and do not have any employees.

(b) US Employee Benefit Plans . Schedule 4 13 (b)  lists each Employee Benefit Plan that Sellers, SGS, Mozaic and the Subsidiaries of Mozaic maintain for the benefit of Business Employees in the U.S. or to which SGS, Mozaic and the Subsidiaries of Mozaic contribute for the benefit of Business Employees in the U.S. or in which their Business Employees participate (individually, each an “ US Employee Benefit Plan ” and collectively the “ US Employee Benefit Plans ”). Except as set forth on Schedule 4.13(b) , with regard to each US Employee Benefit Plan:

(i) Each US Employee Benefit Plan (and each related trust, insurance contract, or fund) complies in form and in operation in all material respects with the applicable requirements of ERISA and the Code including, in the case of a defined compensation plan subject to Code Section 409A, IRS Notice 2005-1 and the proposed regulations promulgated under Section 409A.

(ii) All contributions (including all employer contributions and employee salary reduction contributions) which are due have been paid to each such US Employee Benefit Plan that is an “employee pension benefit plan” under ERISA and the Code (a “US Employee Pension Benefit Plan ”) and all contributions for any period ending on or before the Closing Date which are not yet due have been paid to each such US Employee Pension Benefit Plan or accrued in accordance with the past custom and practice of Sellers, SGS and Mozaic

 

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(iii) All premiums or other payments for all periods ending on or before the Closing Date have been paid with respect to each such US Employee Benefit Plan that is an “employee welfare benefit plan” under ERISA and the Code (a “ US Employee Welfare Benefit Plan ”).

(iv) Each such US Employee Benefit Plan that is a US Employee Pension Benefit Plan and intended to meet the requirements of a “qualified plan” under Code Section 401 (a) has received a favorable determination letter from the Internal Revenue Service.

(v) With respect to each US Employee Benefit Plan that Sellers, SGS, Mozaic and the Subsidiaries of Mozaic maintain or in which their Business Employees participate or to which Sellers, SGS, Mozaic and the Subsidiaries of Mozaic have been required to contribute with respect to their Business Employees, except as provided on Schedule 4.13(b)(v) :

(1) No US Employee Benefit Plan that is a US Employee Pension Benefit Plan (other than any Multiemployer Plan as defined in Section 3(37) of ERISA) has been completely or partially terminated or been the subject of a reportable event as to which notices would be required to be filed with the Pension Benefit Guaranty Corporation (“ PBGC ”). No proceeding by the PBGC to terminate any such Employee Pension Benefit Plan (other than any Multiemployer Plan) has been instituted or, to the knowledge of Sellers, threatened.

(2) There have been no Prohibited Transactions with respect to any US Employee Benefit Plan, which are not exempted under ERISA and the Code. No action, suit, proceeding, hearing, or investigation with respect to the administration or the investment of the assets of any US Employee Benefit Plan (other than routine claims for benefits) is pending or, to the best knowledge of Sellers, threatened. Sellers do not have any knowledge of any basis for any such action, suit, proceeding, hearing, or investigation.

(3) Neither Sellers, SGS, Mozaic nor any of their ERISA Affiliates has incurred with respect to the Purchased Business, and none has any reason to expect that the Purchased Business will incur, any liability to the PBGC (other than PBGC premium payments) or otherwise under Title IV of ERISA (including any withdrawal liability) or under the Code with respect to any US Employee Pension Benefit Plan.

(4) Neither Sellers, SGS, Mozaic nor any of their ERISA Affiliates has any liability with respect to the Purchased Business (including withdrawal liability) or contingent liability by reason of a transaction described in Section 4204 of ERISA with respect to any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA).

(5) Sellers, SGS, Mozaic and each of their ERISA Affiliates with respect to the Purchased Business have complied with the notice and continuation coverage requirements of section 4980B of the Code and the regulations thereunder, including, without limitation, the “M&A regulations” issued as Treasury Regulations § 54.4980B-9, with respect to each US Employee Welfare Benefit Plan that is, or was during any taxable year of Sellers, SGS, Mozaic or any ERISA Affiliate with respect to the Purchased Business for which the statute of limitations on the assessment of federal income taxes remains open, by consent or otherwise, a group health plan within the meaning of section 5000(b)(1) of the Code.

(6) No payment which is or may be made by, from or with respect to any US Employee Benefit Plan, to any employee, former employee, director or agent of SGS, Mozaic or

 

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Subsidiary of Mozaic, either alone or in conjunction with any other payment, will or could properly be characterized as an excess parachute payment under section 280G of the Code.

(c) Foreign Employee Benefit Plans . Schedule 4.13(c) lists each Employee Benefit Plan that Sellers, SGS Canada, SGS Mexico, or SGS UK maintain for the benefit of Business Employees in Canada, Mexico and England and Wales or to which Sellers, SGS Canada, SGS Mexico, or SGS UK contribute for the benefit of Business Employees in Canada, Mexico or England and Wales or in which their Business Employees participate (individually, each a “ Foreign Employee Benefit Plan ” and collectively the “ Foreign Employee Benefit Plans ”). Except as set forth on Schedule 4.13(c) , with regard to each Foreign Employee Benefit Plan:

(i) All of the Foreign Employee Benefit Plans are and have been established, registered, qualified, invested and administered, in all material respects, in accordance with their terms and all Laws.

(ii) No Foreign Employee Benefit Plan is subject to any pending investigation, examination or other proceeding, action or claim initiated by any regulatory authority, or by any other party (other than routine claims for benefits).

(iii) All contributions or premiums required to be paid by SGS Canada, SGS Mexico, or SGS UK (collectively, the “ Foreign Companies ”) under the terms of each Foreign Employee Benefit Plan or by Laws have been made in accordance with Laws and the terms of the Foreign Employee Benefit Plans within the required time periods.

(iv) No commitments to improve or otherwise amend any Foreign Employee Benefit Plan have been made except as required by applicable Laws or the terms of the collective agreements applicable to the Foreign Companies.

(v) There have been no improper withdrawals, applications or transfers of assets of any Foreign Employee Benefit Plan.

(vi) No Person who is a fiduciary in respect of a Foreign Employee Benefit Plan has breached any fiduciary obligation with respect to the administration or investment of the assets of any such plan.

(vii) None of the Foreign Employee Benefit Plans enjoy any special tax status under any Laws, nor have any advance tax rulings been sought or received in respect of any Foreign Employee Benefit Plan.

(viii) None of the Foreign Employee Benefit Plans (other than pension plans) provide benefits to retired employees or to the beneficiaries or dependants of retired employees.

Section 4.14. Material Contracts . Sellers have delivered or made available to Purchaser all written Material Contracts. Except for any contracts excluded as Excluded Assets and as set forth on Schedule 4.14 , each Material Contract (a)  is legal, valid, binding, enforceable, and in full force and effect in accordance with its terms in all material respects (b)  neither the Companies, SGS Canada or any Subsidiaries is in breach or default in any material respect, and no event has occurred which with notice or lapse of time (or both) would constitute a breach or default in any material respect, or permit termination, modification, or acceleration under any Contract that (i) is in excess of $500,000, (ii) imposes non-competition obligations on a Company, a Subsidiary or SGS Canada, or (iii) if terminated

 

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has a Material Adverse Effect; (c)  to the knowledge of Sellers, no third party is in breach or default in any material respect, and no event has occurred which with notice or lapse of time (or both) would constitute a breach or default in any material respect, or permit termination, modification, or acceleration under any Contract in excess of $500,000, and (d)  no party has repudiated or, to the knowledge of the Sellers, threatened to repudiate any provision of such Material Contract.

Section 4.15. Environmental .

(a) Except as set forth on Schedule 4.15 , the Companies, the Subsidiaries and SGS Canada have obtained all permits, licenses, approvals and other authorizations (including any authorizations or contracts with any public or privately owned wastewater treatment facilities) which are required under any Applicable Environmental Law with respect to the Purchased Business (“ Environmental Permits ”), each of such Environmental Permits is in full force and effect, and the Companies, the Subsidiaries and SGS Canada have obtained or applied or filed for and are in compliance with in all material respects with the Environmental Permits and all Applicable Environmental Law, except for such failures to obtain, be in full force and effect or be in compliance which, individually or in the aggregate, have no Material Adverse Effect. Except as set forth on Schedule 4.15 , there are no material claims pending or, to the knowledge of Sellers, threatened against the Companies, the Subsidiaries or SGS Canada under any of the Environmental Permits or any Applicable Environmental Law.

(b) Except as set forth in Schedule 4.15 , (i)  there have been no Releases of any Hazardous Substances by the Purchased Business, the Companies, the Subsidiaries or SGS Canada or, to the knowledge of Sellers, by any other Person on sites currently owned, operated or leased by the Companies, the Subsidiaries or SGS Canada that would be reasonably likely to form the basis of a claim against the Companies, the Subsidiaries or SGS Canada and (ii)  no site or facility now or, to the knowledge of Sellers, previously owned, operated or leased by the Companies, SGS Canada, or the Subsidiaries is listed on the National Priorities List promulgated pursuant to CERCLA, or any similar local, state, provincial or foreign governmental list of properties requiring or which may require clean-up, remediation, monitoring, sampling, removal or any other response action (“ Remediation ”) except for any such Release or listing which has no Material Adverse Effect. Except as set forth in Schedule 4.15 , neither the Companies, the Subsidiaries, nor SGS Canada has been convicted of an offense or has been subjected to any judgment, injunction or other proceeding or been fined or otherwise sentenced for or, to the knowledge of Sellers, found in non-compliance with any Applicable Environmental Law in connection with the Purchased Business, except as has no Material Adverse Effect.

(c) Except as set forth in Schedule 4.15 and the Permitted Exceptions, no Encumbrances have arisen under or pursuant to any Applicable Environmental Law on any site or facility currently owned, operated or leased by the Companies, the Subsidiaries or SGS Canada, except for such Encumbrance which, individually or in the aggregate, has no Material Adverse Effect.

Section 4.16. Financial Statements . Schedule 4.16 sets forth the following combined financial statements of the Companies, the Subsidiaries and SGS Canada (the “ Financial Statements ”):

(a) the audited combined balance sheets as of December 31, 2004 and 2003, and the related audited combined statements of income, comprehensive income and enterprise capital and cash flows for each of the three years in the period ended December 31, 2004, which financial statements have been reported on by, and are accompanied by the report of, PricewaterhouseCoopers LLP (collectively, the “ Audited Financial Statements ”). The Audited Financial Statements have been prepared in accordance with GAAP consistently applied during the periods involved, and present fairly, in all material respects, the

 

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combined financial position of the Companies, the Subsidiaries and SGS Canada as of December 31, 2004 and 2003, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2004.

(b) the unaudited combined balance sheet as of September 30, 2005 and the unaudited combined statement of income for the nine-month period ended September 30, 2005 (collectively, the “ Unaudited Financial Statements ”). The Unaudited Financial Statements present fairly, in all material respects, the combined financial position and results of operations of the Companies, the Subsidiaries and SGS Canada as of the date and for the period set forth therein, as prepared in accordance with AAP.

Section 4.17. Insurance Policies . Schedule 4.17 sets forth a complete and correct description of each material surety bond and casualty and property insurance policy (collectively, the “ Insurance Policies ”) maintained by or for the benefit of the Companies, the Subsidiaries and SGS Canada. All such policies are in full force and effect, all premiums have been paid in full, and no written notice of cancellation has been received with respect to any such insurance.

Section 4.18. Workplace Safety and Insurance Act and Workers Compensation Act . Except as set forth on Schedule 4.18 , all levies, penalties and assessments, including, without limitation, experience-rating surcharges, workwell surcharges, payroll premiums, non-compliance charges, contributions or other amounts payable, all current assessments under the Workplace Safety and Insurance Act (Ontario), the Act Respecting Industrial Accidents and Occupational Diseases (Quebec), and other similar workers’ compensation legislation in relation to the Purchased Business have been paid or accrued and, to the knowledge of Sellers, the Purchased Business is not subject to any actual audit or premium reassessment, and the Purchased Business has not been subject to any special or penalty assessment under such legislation which has not been paid.

Section 4.19. No Brokers . Except as set forth on Schedule 4.19 , none of the Sellers, the Subsidiaries or the Companies have entered into or will enter into any agreement, arrangement or understanding with any person or firm which will result in the obligation of Purchaser to pay any finder’s fee, brokerage commission or similar payment in connection with the transactions contemplated hereby.

Section 4.20. Adequacy of Assets . The material tangible personal property owned or used by the Purchased Business, taken as a whole, is in good operating condition and repair, ordinary wear and tear excepted. Except for the Excluded Assets and as set forth on Schedule 4.20 , the personal property, real property and assets to be transferred to Purchaser at the Closing (including without limitation all personal property, real property and assets of the Companies transferred by operation of law pursuant to the stock transfers) constitute all of the personal property, real property and assets required to operate the Purchased Business in the manner as conducted on the date hereof.

Section 4.21. Absence of Changes . Since September 30, 2005, except as set forth in Schedule 4.21 (a)  the Purchased Business has been conducted in the ordinary course and, to the knowledge of Sellers, there has not occurred any event, circumstance or fact that, individually or in the aggregate, has a Material Adverse Effect, (b)  neither a Seller, a Company nor a Subsidiary has received any written notice of any termination of any Material Contract, which termination has a Material Adverse Effect and (c)  none of the Sellers, the Companies, or the Subsidiaries has taken (or agreed to take, except as contemplated by this Agreement) any action that, if taken after the date hereof, would constitute a violation of Section 6.01(g), (h) or (i).

 

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Section 4.22. Relationship with Customers and Suppliers . Sellers and the Companies have not received any written notice that any Major Customer of the Purchased Business or E.I. DuPont de Nemours and Company will terminate or materially and adversely modify its business relationship with the Purchased Business.

Section 4.23. No Undisclosed Liabilities . To the knowledge of Sellers, the Companies, the Subsidiaries and SGS Canada do not have any liabilities (whether accrued, absolute, contingent or otherwise and whether due or to become due) except (i) as set forth or reflected on the Financial Statements (or disclosed in the notes thereto), (ii) as disclosed in the Schedules to this Agreement, including Schedule 4.23 hereto, (iii) for Excluded Liabilities, (iv) for liabilities incurred since December 31, 2004, in the ordinary course of business consistent with past practice, or (v) for any liabilities that have no Material Adverse Effect.

Section 4.24. Accounts Receivable . All of the accounts and notes receivable of the Companies, the Subsidiaries and SGS Canada represent amounts receivable for merchandise actually delivered or services actually provided (or, in the case of non-trade accounts or notes represent amounts receivable in respect of other bona-fide business transactions), and have arisen from bona-fide transactions in the ordinary course of business.

Section 4.25. Transactions with Affiliates . Except for the Inter-Company Accounts, the Intra-Company Accounts, or as set forth on Schedule 4.25 , none of the Affiliates of either the Companies, the Subsidiaries, SGS Canada or their respective directors, officers, managers or stockholders (a) has borrowed money from, or loaned money to, a Company, a Subsidiary, or SGS Canada, (b) is a party to any Contract with a Company, a Subsidiary, or SGS Canada, (c) has asserted or, to the Seller’s knowledge, threatened to assert any claim against a Company, a Subsidiary, or SGS Canada, (d) is engaged in any transaction with a Company, a Subsidiary, or SGS Canada, or (e) to the Seller’s knowledge, has any direct or indirect financial interest in any competitor, supplier, customer, or distributor of the Purchased Business.

Section 4.26. No Other Warranties or Representations . SELLERS AND PURCHASER SPECIFICALLY ACKNOWLEDGE THAT SELLERS ARE SELLING AND PURCHASER IS PURCHASING THE PURCHASED BUSINESS AND, AS SUCH, IS BUYING THE ON-GOING BUSINESS OF THE COMPANIES, THE SUBSIDIARIES AND SGS CANADA, INCLUDING ACQUIRING ALL BUSINESSES, ASSETS, OBLIGATIONS AND LIABILITIES (OTHER THAN THE EXCLUDED ASSETS AND EXCLUDED LIABILITIES AS SPECIFICALLY SET FORTH HEREIN). PURCHASER ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, UPON WHICH THE PURCHASER HAS RELIED IN ENTERING INTO THIS AGREEMENT, THE ON-GOING BUSINESS IS BEING CONVEYED WITH THE PURCHASED BUSINESS ON AN “AS IS, WHERE IS, WITH ALL FAULTS” BASIS. SELLERS MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, EXCEPT AS SET FORTH IN THIS AGREEMENT AND THE RELATED AGREEMENTS. PURCHASER HAS INSPECTED, HAS HAD AN OPPORTUNITY AND WILL CONTINUE TO HAVE THE OPPORTUNITY TO INSPECT SAID ASSETS, OBLIGATIONS AND LIABILITIES AND IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLERS, COMPANIES, SUBSIDIARIES, SGS CANADA, OR THEIR AGENTS OR REPRESENTATIVES, AS TO ANY MATTERS CONCERNING THE SAME EXCEPT AS PROVIDED IN THIS AGREEMENT.

 

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Section 4.27. MCG . Except for the representations and warranties made under Section 4.04 of this Agreement, none of the representations and warranties made by Sellers under this Article 4 will be deemed to be made with respect to MCG. All of the representations and warranties with respect to MCG are exclusively made in clause 5, Schedule 3, and Part 3 of Schedule 4 of the MCG Purchase Agreement (as limited by the disclosure letter to the MCG Purchase Agreement), which representations and warranties are hereby incorporated by reference and constitute all of the representations and warranties with respect to MCG made by Sellers to Purchaser. Sellers are deemed to have made such representations on and as of the date hereof. For purposes of Article 4 (except Section 4.04), the terms Purchased Business and Subsidiaries will not include MCG.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby makes the following representations and warranties to Sellers on and as of the date hereof:

Section 5.01 Authority . Purchaser has full corporate power and authority to enter into this Agreement and each of the Related Agreements to which Purchaser is to be a party and to consummate the transactions contemplated hereby and thereby. The execution of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized in accordance with Purchaser’s corporate charter and no other corporate proceedings on the part of Purchaser are necessary to authorize this Agreement or the Related Agreements or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and the Related Agreements will be at the Closing, duly and validly executed and delivered by Purchaser and constitute, and the Related Agreements will constitute at the Closing, legal, valid, binding and enforceable agreements of Purchaser, enforceable against Purchaser in accordance with their terms, except as limited (a)  by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally, and (b)  by general principles of equity.

Section 5.02. Organization and Good Standing . Purchaser is a corporation duly organized, validly existing and in good standing under the Laws of Delaware and has full corporate power and authority to consummate the transactions contemplated hereby and to conduct the operations of the Purchased Business.

Section 5.03. Validity of Contemplated Transactions . None of the execution, delivery or performance of this Agreement or the consummation of the transactions hereby contemplated will (a)  cause any breach of or conflict with the articles, certificate of incorporation, by-laws, or similar organizational documents of Purchaser; (b)  contravene or violate any Law to which Purchaser is subject, or (c)  require any filing with, or permit, authorization, consent or approval of any Government or any other Person, except for the filings, permits, authorizations, consents and approvals set forth on Schedule 5.03 or as may be required under the competition Laws of the U.S., Canada, Mexico, UK or any other country or supranational authority having jurisdiction over the parties or the transactions contemplated hereby.

Section 5.04. No Brokers . Purchaser has neither entered into nor will enter into any agreement, arrangement or understanding with any person or firm which will result in the obligation of Sellers to pay any finder’s fee, brokerage commission or similar