<PAGE> 18
RII INVESTMENT CORP.
THE PARTIES NAMED IN PART 1 OF THE FIRST SCHEDULE HERETO
ENTERPRISE IRELAND
REUNION INDUSTRIES INC.
- and -
TINTARENT LIMITED
SHARE PURCHASE AGREEMENT
========================
(Data Packaging Holdings Limited)
LK SHIELDS
Solicitors
39/40 Upper Mount Street
Dublin 2
(1578-001/CM/LD/Share3C.doc)
<PAGE> 19
TABLE OF CONTENTS
Clause 1 - Interpretation
Clause 2 - Conditions Precedent
Clause 3 - Share Purchase And Sale
Clause 4 - Deferred Consideration
Clause 5 - Warranties And Undertakings
Clause 6 - Indemnity
Clause 7 - Completion Accounts
Clause 8 - Business Until Completion
Clause 9 - Further Covenants
Clause 10 - Completion
Clause 11 - General Provisions
SCHEDULES
Schedule 1 The Managers
Schedule 2 Shareholdings
Schedule 3 Deferred Consideration
Schedule 4 Warranties
Part I - General Warranties
Part II - Accounts
Part III - Finance
Part IV - Assets
Part V - Properties
Part VI - Trading and Contracts
Part VII - Employees
Part VIII - Corporate & General
Part IX - Taxation Warranties
Schedule 5 Property of the Companies
Part I - Land and Buildings
Part II - Particulars of Title and Occupation of Property
Part III/IV - Tenancies & Lettings
Schedule 6 The Companies
Schedule 7 Particulars of the Directors and Secretary of each of the
Companies
Schedule 8 Management Accounts
Agreed Form Documents
Tax Deed
Service Agreements
<PAGE> 20
THIS AGREEMENT is made on , 2000
BETWEEN: RII INVESTMENT CORP.
having its principal place of business
at 300 Delaware Avenue, Suite 900, Wilmington Delaware, 19801,
United States of America
(hereinafter called the "RII")
THE PARTIES NAMED IN PART 1 OF THE
FIRST SCHEDULE HERETO
(hereinafter together referred to as the "Managers")
ENTERPRISE IRELAND
having its registered office at Wilton Park House,
Wilton Place, Dublin 2
REUNION INDUSTRIES INC.
having its principal place of business
at 11 Stanwix Street, Suite 1400, Pittsburgh, Pennsylvania 15222,
United States of America
(hereunder referred to as "Reunion")
- and -
TINTARENT LIMITED
having its registered office
at Deloitte and Touche House Earlsfort Terrace Dublin 2
(hereinafter referred to as the "Purchaser")
WHEREAS:-
A. Data Packaging Holdings Limited (hereinafter called the "Company") is
a limited company incorporated in Ireland on 15 February, 1997 under
registration number 261477 and now has an authorised share capital of IR
100,000 divided into 590,000 Ordinary Shares of IR 0.10 pence each, and
410,000 3% Preference Shares of IR 0.10 pence of which 15,710 Ordinary Shares
have been issued and are fully paid up and 410,000 3% Preference Shares have
been issued and are fully paid up.
B. The Vendors (as hereinafter defined) are the registered and
beneficial owners of the entire issued share capital of the Company in the
proportions set out in the Second Schedule hereto such share capital being
registered in the manner set forth therein.
C. The Purchaser has agreed to purchase and the Vendors have agreed to
sell the entire shareholding of ordinary shares in the Company upon and
subject to the terms and conditions hereinafter contained.
D. Reunion has entered into this Agreement for the purposes hereinafter
appearing.
E. Each of the Companies listed in the Sixth Schedule hereto is a
subsidiary of the Company, owned as to the proportion of its issued share
capital set opposite its name therein.
<PAGE> 21
NOW IT IS HEREBY AGREED that in consideration of the mutual covenants
conditions agreements warranties and payments hereinafter set forth or
provided for the parties hereto respectively covenant with each other as
follows:
1. INTERPRETATION
--------------
1.1 Definitions
-----------
In this Agreement the following expressions shall unless the context
otherwise requires have the following meanings:
(a) "Accounting Date", 31st December 1999.
(b) "Accounts", both or either of them the audited consolidated
balance sheet and consolidated profit and loss account of the Companies as at
the Accounting Date and shall include the directors' and auditors' reports
thereon and any notes thereto together with all documents which are required
by law to be attached thereto.
(c) "BES Scheme", the investment made by the Tenth ICC BES Fund
under the scheme for investment in corporate trades pursuant to an agreement
dated 12 November, 1997 between the Company, Erin Executor & Trustee Company
Limited, ICC BES Managers Limited and Others.
(d) "Board", the Board of Directors of the Company.
(e) "Business", the manufacture and distribution of injection
moulded thermoplastics components as currently carried on.
(f) "Business Day", a full working week-day in Dublin.
(g) "Claim", means any claim by the Purchaser against any of the
parties under an indemnity in this Agreement which for the purpose of this
Agreement includes a claim for breach of the Warranties.
(h) "Companies", the Company and each of the Companies listed in
the Sixth Schedule hereto and the expression "Group" shall be construed
accordingly and the term "Company' shall where the context permits include any
company in the Group
(i) "Completion", completion of the purchase and sale provided
for in this Agreement in accordance with the provisions of Section 10.0.
(j) "Completion Accounts", the accounts agreed or deemed to be
agreed in accordance with Section 7.0.
(k) "Completion Date", the date of Completion of this Agreement
in accordance with Section 10.0.
(l) "Confidential Information", all information not at present in
the public domain used in or otherwise relating to the Business, customers or
financial or other affairs of the Company including, without limitation,
information relating to:
<PAGE> 22
(a) the marketing of any products or services including,
without limitation, customer names and lists and any other details of
customers, sales targets, sales statistics, market share statistics, price,
market research reports and surveys, and advertising or other promotional
materials; and
(b) future projects, business development or planning,
commercial relationships and negotiations.
(m) "Consideration", the consideration payable for the Shares as
set out in Clause 3.2(a).
(n) "Deferred Consideration" means the amount payable, if at all,
to RII and Enterprise Ireland by the Purchaser under Clause 4 and the Third
Schedule Part I.
(o) "Disclosure Letter", the letter referred to in Clause 5.2.
(p) "EBITDA", earnings before interest and tax, depreciation and
amortisation.
(q) "Encumbrance"
(i) any option or right to acquire or right to restrict;
(ii) any mortgage, charge, assignment hypothecation,
pledge, lien, or security interest or arrangement of whatsoever nature.
(r) "EURIBOR", the rate of the offered quotation for deposits in
Euros for a period comparable to the given period which appears on the display
designated pages 248 and 249 on the Telerate Service (or such other page or
service as may replace it for the purpose of displaying the interest rates
offered in the Euro-zone Interbank Market for deposit is in Euros) at or about
11 am. (Brussels time) on the first day of the given period.
(s) "Exchange Rate", shall be the exchange rate as indicated in
the Wall Street Journal unless stated to be otherwise in this Agreement.
(t) "External Indebtedness/Cash Balance", The total of all
indebtedness in the nature of borrowings of each Company in the Group as at
the Completion Date ("External Indebtedness") including, without limitation,
(1) any such borrowings in the nature of finance leases (not being operating
leases); (2) the amount payable to ICC BES Managers and/or Erin Executor &
Trustee Co. Limited in connection with the repurchase of the shares held by
Erin Executor & Trustee Co. Limited in Barnmead Limited; (3) any prepayments
of management fees by Data Packaging Limited to any member of the Reunion
Group; (4) any unpaid capital duty including penalties on the issue of and the
redemption price of all preference shares registered in the name of Enterprise
Ireland (provided that no corresponding downwards adjustment is made to the
Cash Balance (as hereinafter defined) by reason of the redemption of the
preference shares) (5) an amount (not to exceed IR 18,000) equal to the sum of
the bank financing costs of the Purchaser in borrowing an amount equivalent to
the Promissory Notes (including accrued interest) and the increased stamp duty
payable in relation thereto with indebtedness to be expressed as a positive
number for the purposes of this Agreement less the sum of (A) any cash, cash
in hand or on deposit at bank as shown in the cash book balance or otherwise
<PAGE> 23
reflected in the books of the Company as at Completion plus (B) the amount of
funds, if any, paid by Data Packaging Limited prior to Completion for the
purchase of 2 DEMAG Injection Moulding Presses to the extent that such
payments are required to be made prior to Completion ("Cash Balance"). In
determining the External Indebtedness/Cash Balance no account shall be taken
of inter company funding liabilities between companies in the Group or the
obligation of RII to pay or receipt by Data Packaging Limited of the monies
due in respect of the Promissory Notes.
(u) "Grant Agreements", (i) the grant agreements dated 10th
April, 1989 between Industrial Development Authority, Data Packaging Limited
(Bermuda Corporation) and the Promoters (as defined therein); (ii) the grant
agreement dated 31 October 1997 between Forbairt (now called Enterprise
Ireland), Data Packaging (Ireland) Limited, Reunion and DPL Acquisition
Corp.(now called RII), (iii) the Transfer Agreement dated 9th January, 1998
between Forbairt (now Enterprise Ireland) Data Packaging Limited and Barnmead
Limited; (iv) the grant agreement dated 9 January, 1998 between RII, the
Company, Enterprise Ireland and Reunion; (v) letter dated 30 August, 1995 from
Enterprise Ireland to Data Packaging Limited, (vi) letter dated 19 September,
1996 from Enterprise Ireland to Data Packaging Limited, (vii) letter dated 13
January, 1997 from Enterprise Ireland to Data Packaging Limited, (viii) letter
dated 22 July, 1998 from Enterprise Ireland to Data Packaging Limited, (ix)
letter dated 17 November 1999 from Enterprise Ireland to Data Packaging
Limited.
(v) "Deed of Guarantee" the Deed of guarantee in the agreed form
between Reunion and the Purchaser.
(w) "Interest Rate" 2% above EURIBOR, such interest to be
compounded at three monthly intervals (so that interest shall be paid on
interest) and to accrue after as well as before judgement.
(x) Latest Completion Date 18th September, 2000.
(y) "Legal Opinion" an opinion relating, inter alia, to the
validity and enforceability of the Deed of Guarantee to be furnished on
Completion in form reasonably satisfactory to the Purchaser.
(z) "Management Accounts" the unaudited consolidated balance
sheet of the Companies as at 30 April 2000 and unaudited consolidated profit
and loss account of the Companies for the 4 month period ended on 30th April
2000 as set out in the Eighth Schedule.
(aa) "Other Occupiers" means all past, present or future owners,
tenants, licensees or other occupiers or users (lawful or unlawful) of the
Properties but excluding the Purchaser and the Company.
(bb) "Planning Acts", the Local Government (Planning &
Development) Acts, 1963 - 1992 and the Building Control Act, 1990.
(cc) "Properties", the property or properties of the Company short
particulars whereof are set out in the Fifth Schedule hereto.
(dd) "Provisional External Indebtedness/Cash Balance" means the
amount as agreed or determined in accordance with Clause 2.4.
<PAGE> 24
(ee) "Promissory Notes", the Promissory Notes from DPL Acquisition
Corporation to Data Packaging Limited dated 2nd December, 1999 and 19th May,
2000 in the principal amounts of IR 729,963 and IR 440,000 respectively.
(ff) "Pro Rata" where such term is used in connection with the
payment of consideration to RII or Enterprise Ireland (whether on Completion
or as Deferred Consideration) shall mean as between those parties in the
proportions in which each holds Ordinary Shares in the Company.
(gg) "the Purchaser's Group" the Purchaser (which is a non-trading
holding company) or a company which is a Subsidiary of the Purchaser from time
to time, which for the avoidance of doubt includes Trend Technologies Europe
Limited and shall also include the Group Companies on Completion.
(hh) "Reunion Group" Reunion Industries Inc. and each Subsidiary
for the time being and the term "Reunion Group" can mean any one thereof and
for the avoidance of doubt shall exclude the Company and its subsidiaries,
including without limitation, Data Packaging Limited an Irish registered
company.
(ii) "Service Agreements" the service agreements in agreed terms
between each of the Managers and the Company in relation to their employment
with the Purchaser.
(jj) "Shares", the entire issued Ordinary Shares in the capital of
the Company, together with all further and other shares which are issued
hereafter and which are comprised in the issued share capital of the Company
at Completion.
(kk) "Subsidiary", a subsidiary company (as defined by Section 155
Companies Act, 1963).
(ll) "Target Net Working Capital", means the current assets (where
current assets comprise the aggregate of receivables (less provisions and any
inter-company trade receivables prior to Completion), inventories (less
provisions) and other current assets) expressed as a positive number, less
current liabilities (where current liabilities comprise the aggregate of trade
payables, customer deposits and accrued expenses and other current
liabilities), other than the current portion of long term debt and other than
amounts, if any, included in accounts payable prior to Completion for the
purchase by Data Packaging Limited of 2 DEMAG Injection Moulding Presses.
(mm) "Taxation", all forms of taxation howsoever and wheresoever
arising and including:-
(i) within Ireland, income tax, corporation tax, stamp
duty, capital duty, value added tax, residential property tax, dividend
withholding tax, capital gains tax, petroleum revenue tax, customs duty,
excise duty, pay-related social insurance and other similar contributions,
PAYE, estate duty, rates, gift tax, inheritance tax or any other taxes levies,
customs and other similar duties or imposts similar to, replaced by or
replacing any of them, all costs, expenses, charges, surcharges properly
payable to a revenue authority, whether by way of penalty or additional
liability to tax, penalties and interest included in or relating to any tax
assessment therefor; and
<PAGE> 25
(ii) outside Ireland all taxes including (without
limitation) taxes on gross or net income profits or gains, receipts, sales,
use, occupation, franchise, value added, personal property and other taxes,
levies, imposts, duties, charges or withholdings of any nature whatsoever and
all penalties charges and interest included in or relating to any tax
assessment therefor.
(nn) "Tax Deed" the deed of tax covenant in the agreed form
between RII, the Purchaser and the Company.
(oo) "Taxation Warranties", the Warranties contained in Part IX of
the Fourth Schedule hereto.
(pp) "Territory", the island of Ireland.
(qq) "US$" and "Dollars", lawful currency for the time being of
the United States of America.
(rr) "the Vendors" the Parties named in the First Schedule Part I,
RII and Enterprise Ireland.
(ss) "Warranties", the undertakings, warranties and
representations set forth in the Fourth Schedule hereto.
(tt) "Warrantor" RII.
(uu) "IR " and "Irish Pounds", lawful currency for the time being
of Ireland.
1.2 Construction
------------
(a) Any reference to a document being "in the agreed form" shall
mean that such document shall be in a form approved by each of the parties
hereto and for the purpose of identification signed by or on behalf of the
parties approving the same on or prior to the date hereof.
(b) Any reference to any provision of any legislation shall
include any modification re-enactment or extension thereof and shall also
include any subordinate legislation made from time to time under such
provisions. Any reference to any provision of any legislation unless the
context clearly indicates to the contrary shall be a reference to legislation
of Ireland.
(c) Words such as "hereunder", "hereto", "hereof", and "herein"
and other words commencing with "here" shall unless the context clearly
indicates to the contrary refer to the whole of this Agreement and not to any
particular Section or Clause thereof.
(d) Save as otherwise provided herein any reference to a Section,
Clause, paragraph or sub-paragraph shall be a reference to a Section, Clause
paragraph or sub-paragraph (as the case may be) of this Agreement and any
reference in a Clause to a paragraph or sub-paragraph shall be a reference to
a paragraph or sub-paragraph of the Clause or paragraph in which the reference
is contained unless it appears from the context that a reference to some other
provision is intended.
<PAGE> 26
(e) The Schedules to this Agreement shall form part of this
Agreement.
1.3 Headings and Captions
---------------------
The Section headings and captions to the Clauses in this Agreement
are inserted for convenience of reference only and shall not be considered a
part of or affect the construction or interpretation of this Agreement.
1.4 Governing Law
-------------
This Agreement shall in all respects (including the formation thereof
and performance thereunder) be governed by and construed in accordance with
the laws of Ireland.
2. CONDITIONS PRECEDENT
--------------------
2.1 Purchaser's Conditions
----------------------
Notwithstanding any other provision hereof but subject to Clause 2.3,
the obligations of the Purchaser hereunder shall not arise until the
conditions set forth in the succeeding paragraphs of this Clause shall have
been fulfilled to the satisfaction of the Purchaser. RII and the Managers and
Purchasers covenant with each other that they shall use all reasonable
endeavours to procure (in so far as may lie within their power or procurement
either individually or collectively) the completion of such matters on or
before the date specified in Clause 10.1:-
(a) the Purchaser shall have received all such consents and/or
approvals of governmental and other agencies and regulatory bodies which it
shall reasonably deem to be necessary or desirable in connection with the
purchase of the Shares and such consents and/or approvals shall:-
(i) be received in terms to the reasonable satisfaction
of the Purchaser; and
(ii) remain in full force and effect on Completion.
In particular, and without prejudice to the generality of the
foregoing, the Purchaser on behalf of all of the other parties hereto and in
co-operation with them, shall have notified the Minister for Enterprise, Trade
and Employment of the transactions provided for herein, pursuant to the
Mergers, Takeovers and (Control) Acts 1978 to 1996, the parties shall have
responded to all queries raised by or on behalf of the said Minister and
consequent thereon either:-
A. the said Minister shall have informed the Purchaser that she
has decided not to make an order under Section 9 of the said Act in relation
to such transactions;
B. the said Minister shall have made a conditional order
<PAGE> 27
permitting the said transactions on terms satisfactory to each of the parties
and such conditions have been complied with in full; or
C. the relevant period under Section 6 of the said Act shall
have expired without the Minister having made any order.
(b) RII and the Managers shall have fulfilled and performed all
of the obligations which under the terms hereof they are or any of them is to
have performed and fulfilled on or before or until Completion;
(c) there shall have been full compliance with the Warranties and
no circumstance shall have arisen which gives rise to an obligation to notify
in accordance with Clause 5.3(b);
(d) no substantial damage by fire or other hazard to the physical
assets of the Companies shall have occurred prior to Completion;
(e) there shall not have been instituted or threatened any legal
proceedings seeking to prohibit the consummation of the transactions
contemplated by this Agreement (or any agreement relating thereto) in
accordance with its terms or to obtain damages with respect thereto;
(f) no event or events shall have happened or occurred in
relation to the businesses, assets, liabilities or prospects of the Companies
which in the opinion of the Purchaser has resulted or is likely to result in
any material adverse change in the business financial conditions, affairs or
prospects of the Companies taken as a whole;
(g) it shall have been established to the satisfaction of the
Purchaser that the Companies have good and marketable title to all of the
Properties and, without limitation, the transfer of the Properties from Data
Packaging Limited (Bermuda) to Data Packaging Limited (Ireland) having been
completed to the Purchaser's satisfaction;
(h) the Purchaser shall have received all necessary consents and
waivers from Enterprise Ireland, in respect of the sale of the Shares as
contemplated by this Agreement and the continuation of grants previously
received by the Companies in the Group in form satisfactory to the Purchaser;
(i) the Purchaser shall have received consent from ICC Bank plc
to the change of control effected by the sale of shares to the Purchaser in
form satisfactory to the Purchaser;
(j) it shall have been established to the satisfaction of the
Purchaser that the outstanding preference shares in the Company have been
fully and properly redeemed subject only to the condition of the purchase of
the Shares being completed;
(k) the Purchaser shall have received appropriate financing from
funds managed by Doughty Hanson & Co. Limited and ICC Bank plc to purchase the
entire issued share capital of the Company in accordance with this Agreement.
(l) The Purchaser shall have received all necessary consents and
waivers from the lenders under the Trend Technologies Inc. Credit Agreement
and the Purchasers of the subordinated notes issued by Trend Holdings Inc.
<PAGE> 28
(m) that the members of all relevant companies in the Group shall
have passed all necessary resolutions to approve security arrangements to be
entered into with ICC Bank plc pursuant to Section 60(2) of the Companies
Acts, 1963.
(n) the Company has received clearance from the Revenue
Commissioners in form acceptable to the Purchaser that Barnmead Limited will
not lose its qualifying company status under the scheme for investment in
corporate trades as a result of a change of control of the Company resulting
from the proposed sale of shares to the Purchaser.
(o) that the Vendors and the Purchaser are in a position to
furnish all items required to be delivered by each of them respectively on
Completion as set out in Clause 10.
(p) the guarantee(s) by any member of the Reunion Group of any
obligation of any Companies to Enterprise Ireland have been released and
evidence of such release to the reasonable satisfaction of Reunion being
produced.
(q) the Provisional External Indebtedness/Cash Balance shall be
agreed or otherwise determined in accordance with Clause 2.4.
2.2 Vendor's Conditions
-------------------
(a) Notwithstanding any other provision hereof but subject to
Clause 2.3 the obligations of the Vendors hereunder shall not arise until the
conditions in Clause 2.1 (a), (e), (o) and (p) shall have been fulfilled to
the reasonable satisfaction of the Vendors.
(b) Notwithstanding any other provision hereof but subject to
clause 2.3 the obligations of Enterprise Ireland hereunder shall not arise
until the following conditions have been satisfied:
(i) the redemption of 410,000 Redeemable Cumulative
Preference Shares of IR 1 in the Company together with dividends up to the
date of Completion;
(ii) Tintarent Limited underwriting all outstanding
contingent grant liability in respect of the Grant Agreements in a form to be
agreed;
(iii) appropriate consent from Enterprise Ireland pursuant
to the Grant Agreements having issued.
2.3 Consequences of Non-Compliance
------------------------------
(a) Subject to paragraph (b), (i) the Purchaser may unilaterally
adjourn Completion from time to time by written notice to the Vendor given
prior to the date then scheduled for Completion specifying the reason for the
adjournment and the date to which adjourned, but only if and to the extent
that the need for adjournment arises because any of the conditions to the
obligations of the Purchaser contemplated by Clause 2.1 have not been
satisfied and (ii) the Vendors may unilaterally adjourn Completion from time
<PAGE> 29
to time by written notice to the Purchaser given prior to the date then
scheduled for Completion specifying the reason for the adjournment and the
date to which adjourned, but only if and to the extent that the need for
adjournment arises because any of the conditions to the obligations of the
Vendors contemplated by Clause 2.2 (a) have not been satisfied and (iii)
Enterprise Ireland may unilaterally adjourn Completion from time to time by
written notice to the Purchaser and the other Vendors given prior to the date
then scheduled for Completion specifying the reasons for adjournment and the
date to which adjourned, but only if and to the extent that the need for
adjournment arises because any of the conditions to the obligations of
Enterprise Ireland contemplated by Clause 2.2 (b) have not been satisfied
(b) If Completion shall not have occurred, by reason of the non-
fulfilment of any of the conditions precedent in Clause 2.1 or Clause 2.2, on
or prior to the Latest Completion Date, this Agreement shall thereupon lapse
and cease to have effect but without prejudice to any rights of the Purchaser
or the Vendors pursuant to this Section 2.0
(c) The rights of the Purchaser and the Vendors pursuant to
Clause 2.3(a) shall be additional and without prejudice to any other remedies
available to the Purchaser or the Vendors at law or otherwise in respect of
any non-fulfilment or non-performance of any conditions hereto and accordingly
no such remedy shall be defeated or affected by the failure of the Purchaser
or the Vendors to exercise any right of adjournment.
(d) Any of the conditions set out in Clause 2.1 may be waived in
whole or in part by the Purchaser without prejudice to its rights of
adjournment or of rescission or other rights in the event of non-compliance
with any other condition. Any such waiver shall be binding on the Purchaser
only if it is in writing. The provisions of this clause 2.3(d) shall apply to
the Vendors mutatis mutandis in relation to the conditions set out in Clause
2.2.
2.4 The Purchaser and RII shall jointly procure that as soon as
practicable and in any event three Business Days prior to Completion the
Purchaser and RII will agree on the Provisional External Indebtedness/Cash
Balance. In the event of their being any disagreement between the Purchaser
and RII the decision of the Purchaser shall prevail so long as such decision
is reasonably based on and is consistent with the most recently available
financial information in relation to the Companies.
3. SHARE PURCHASE AND SALE
-----------------------
3.1 Purchase and Sale
-----------------
Subject to Section 2.0, the Vendors shall sell and the Purchaser
shall purchase the Shares free from any lien charge or encumbrance and
together with all accrued benefits and rights for the consideration referred
to in Clause 3.2(a) payable at the time or times and in the manner specified
in Clause 3.2 (b) and (c). The Purchaser shall not be obliged to complete the
purchase of any of the Shares unless the purchase of all of the Shares is
completed simultaneously.
<PAGE> 30
3.2 Consideration
-------------
(a) Subject to adjustment in accordance with Clause 7 and 10.5.2,
the consideration payable in respect of the Shares shall be an amount of
US$13,300,000 less the Provisional External Indebtedness/Cash Balance for the
shareholding of RII and Enterprise Ireland Pro-Rata and US$1,200,000 for the
shareholding of the Managers pro-rata to the Managers percentage ordinary
shareholding in the Company in each case as set out in the Second Schedule
(the "Consideration")
(b) The Consideration payable in respect of the Shares shall be
payable in cash on Completion.
(c) The Vendors hereby authorise the Purchaser to pay all amounts
of the consideration payable in respect of the Shares to Messrs. Arthur Cox
(in immediately payable funds by telegraphic transfer to Arthur Cox client
account) acting on their behalf. The receipt of such firm shall be sufficient
evidence of payment and shall be a good discharge to the Purchaser. The
Purchaser shall not be concerned as to the distribution of such monies to the
Vendors.
4. DEFERRED CONSIDERATION
----------------------
The Deferred Consideration shall be determined and, subject to the
provisions of Clauses 6.5 and 7.11, paid in accordance with the provisions of
the Third Schedule Part I. The Deferred Consideration shall be additional
consideration for the shareholdings of RII and Enterprise Ireland and shall be
payable Pro Rata in accordance with the Third Schedule.
5. WARRANTIES AND UNDERTAKINGS
---------------------------
5.1 In consideration of and as an inducement to the Purchaser entering
into this Agreement, Enterprise Ireland and the Managers each severally
warrants and represents to the Purchaser and its successors in title in
relation to itself only that:
(a) it has full power and authority to enter into and perform
this Agreement;
(b) there is no Encumbrance on, over or affecting its
shareholding in the Company and there is no agreement or arrangement to give
or create any Encumbrance and no claim has been made by any person to be
entitled to any Encumbrance;
(c) it is not a party to any other share sale agreement or share
option agreement in relation to their shareholding in the Company;
(d) it has full and unrestricted power and authority to transfer
the legal and beneficial title to their entire shareholding in the Company and
Purchaser or its designee.
<PAGE> 31
Enterprise Ireland and the Managers further warrant and undertake to
and with the Purchaser and its successors in title that all of the warranties
will be fulfilled down to and will be true and correct at Completion in all
respects as if they has been entered into afresh at Completion with reference
to the state of affairs as at that date and if after the execution hereof and
prior to or at Completion any event shall occur which results or may result in
any of the warranties being unfilled, untrue, misleading or incorrect at that
date or at Completion in respect of it/their respective shareholding in the
Company it/they (as the case may be) shall immediately notify the Purchaser
thereof in writing.
5.2 Warranties and Undertakings
---------------------------
The Warrantor undertakes with and warrants to the Purchaser and its
successors in title in relation to the Companies in accordance with the terms
set out in the Fourth Schedule hereto subject only to any exceptions fully and
fairly disclosed (other than in respect of warranty number 85 and warranty 162
in the Fourth Schedule in respect of which no disclosure is deemed to be made)
by the Warrantor in a letter of disclosure of even date herewith addressed to
LK SHIELDS, Solicitors for the Purchaser. RII further acknowledges that the
Purchaser has entered into this Agreement in reliance (inter alia) on the
Warranties.
5.3 Period prior to Completion
--------------------------
The Warrantor further warrants and undertakes to and with the
Purchaser and its successors in title that:
(a) save as set out in Clause 5.2 all of the Warranties will be
fulfilled down to and will be true and correct at Completion in all respects
as if they had been entered into afresh at Completion with reference to the
state of affairs as at that date; and
(b) if after the execution hereof and prior to or at Completion
any event shall occur which results or may result in any of the Warranties
being unfulfilled, untrue, misleading or incorrect at that date or at
Completion it shall immediately notify the Purchaser thereof in writing.
5.4 Effect of Completion
--------------------
The warranties in Clause 5.1 and the Warranties shall not in any
respect be extinguished or affected by Completion and the benefits thereof may
be assigned in whole or in part by the Purchaser.
5.5 Rights of Rescission
--------------------
(a) Without prejudice and in addition to the rights and remedies
of the Purchaser under Section 2.0, if at any time up to Completion it shall
be found that any of the warranties in Clause 5.1 and the Warranties have not
been carried out or complied with or are otherwise untrue or incorrect in any
way the Purchaser shall be entitled to rescind this Agreement, but failure to
exercise this right shall not constitute a waiver of any other rights of the
<PAGE> 32
Purchaser or its assigns arising out of any breach of warranty or undertaking.
(b) Rescission of this Agreement shall not extinguish any right
to damages to which the Purchaser or its assigns may be entitled in respect of
any breach of this Agreement.
5.6 Each of the Warranties shall be construed separately and
independently and shall not be limited or restricted by reference to or
inference from any of the other Warranties or the Tax Deed.
5.7 Claims may be made by the Purchaser in respect of the warranties in
Clause 5.1 and/or under the Warranties whether or not the Purchaser knew or
could have discovered (whether by any investigation made by it on its behalf
into the affairs of each Group Company or otherwise) prior to signing this
Agreement that any of the Warranties have not been complied with or carried
out or are otherwise untrue or misleading.
5.8 Notwithstanding any other provision of this Agreement, no limitation
of any kind whatsoever shall apply in respect of any claim made hereunder
against the Managers, Enterprise Ireland or the Warrantor if such claim arises
from any fraudulent act or fraudulent omission or fraudulent misrepresentation
of the Managers, Enterprise Ireland or the Warrantor made with the intention
of deceiving the Purchaser.
5.9 The rights and remedies of the Purchaser in respect of a breach of
any of the Warranties shall not be affected by the sale and purchase of the
Shares.
5.10 Without prejudice to any other right or remedy of the Purchaser under
this Agreement or otherwise all sums payable by the Warrantor under this
Agreement shall bear interest at the Interest Rate from the date of claim
until the date of payment (before as well as after judgement).
5.11 The liability of the Warrantor shall be limited in accordance with
the following provisions of this clause:-
5.11.1 no liability shall attach to the Warrantor unless the
aggregate amount of all liabilities under the Warranties shall have exceeded
the total sum of IR 100,000 whereupon the Warrantor shall be liable for the
entire amount of such liabilities and not merely the excess; and
5.11.2 the aggregate liability of the Warrantor under the Warranties
in respect of all or any claims shall (with the exception of any claim on foot
of a breach of warranty number 85 or warranty number 162 in the Fourth
Schedule) be subject to an overall maximum liability of an amount equal to US$
1,620,000. For this purpose in relation to any claim the Exchange Rate
applicable on the date such Claim is made shall be used to determine the
overall limit.
5.12 A claim against the Warrantor under the Warranties and/or the Tax
Deed shall be barred unless written particulars thereof (containing reasonable
details of the event or circumstance giving rise to the breach, the basis upon
which the Purchaser is making a claim against the Warrantor and an estimate
(where available) of the amount of the liability which may result) shall have
been given to the Warrantor:
5.12.1 in the case of a claim under Part IX of the Fourth Schedule
<PAGE> 33
or in the case of a claim under the Tax Deed before the seventh anniversary of
the Completion Date (except in the case of fraud by the Warrantor which causes
the Revenue Commissioners to re-open assessments in respect of the period up
to Completion, in which case the limitation in respect of a claim against the
Warrantors shall be extended to twenty years after the end of the accounting
period of the Company next following Completion); or
5.12.2 in the case of a claim in relation to any environmental
Warranties in the Fourth Schedule or under Clause 6.1, before the fifth
anniversary of the Completion Date; or
5.12.3 in the case of any other claim under the Warranties before
the second anniversary of the Completion Date.
5.13 The Warrantor shall not be liable in respect of a breach under the
Taxation Warranties or the Tax Deed to the extent that adequate and specific
provision or reserve was made for the matter giving rise to the claim in the
Management Accounts or incurred in the ordinary course of the Companies'
business since 30 April, 2000 until the Completion Date.
5.14 The Purchaser shall not be entitled to recover twice under the
Warranties or the indemnities under this Agreement in respect of the same
subject matter and shall not be entitled to recover twice under the Tax Deed
in respect of any relevant claim or recover more than once in respect of the
same subject matter under two or more separate Warranties or more than once in
respect of any one relevant claim under the Tax Deed.
5.15 Nothing herein or in the Warranties, shall or shall be deemed to
relieve the Purchaser of any common law duty to mitigate any loss or damage
incurred by it.
5.16 If the Warrantor makes any payment by way of damages for breach of
any of the Warranties and/or the Tax Deed and after the making of the relevant
payment, an amount is recovered by any member of the Purchaser's Group from a
third party a sum which would have reduced the liability of the Warrantor in
respect of such breach the Purchaser shall, once it or the relevant member of
the Purchaser's Group has received such sum, forthwith repay to the Warrantors
so much of the recovered amount from the third party (less cost of recovery,
interest or liability to Taxation) as does not exceed the sum paid by the
Warrantor to the Purchaser.
5.17 Any payment by the Warrantor to the Purchaser pursuant to the
Warranties or the Tax Deed shall be deemed to be a reduction of the
consideration payable hereunder.
5.18 No liability shall arise on the part of the Warrantor in respect of
any breach of any of the Warranties if and to the extent that:-
(a) any such breach or claim occurs as a result of any
legislation or other governmental regulation or alteration of the governmental
regulation not in force at the date hereof which takes effect retrospectively
or occurs or is increased as a result of any increase in the rates of taxation
in force at the date hereof with retrospective effect;
(b) any such breach or claim is attributable to any voluntary
act, omission, transaction, event, default or arrangement of or carried out
<PAGE> 34
after the date hereof by any member of the Purchaser's Group or their
respective successors in title and which the Purchaser knew would give rise to
a claim hereunder save to the extent that such act, omission, transaction or
arrangement was carried out as a result of a binding contract or commitment
entered into on or prior to Completion;
(c) any member of the Purchaser's Group receives a contribution
against any loss or damage suffered by it arising out of such breach or claim
under the terms of any insurance policy for the time being in force (less cost
of recovery);
5.19 No breach or breaches of any of the Warranties, save as may be
otherwise provided under this Agreement, or any covenant or undertaking
contained herein shall give rise to any right on the part of the Purchaser to
rescind this Agreement after Completion save for fraud or wilful concealment.
5.20 In the event that the Warrantor at any time after the date hereof
shall wish to take out insurance against the Warrantor's liability hereunder
the Purchaser undertakes to provide such information as the prospective
insurer may reasonably require before effecting such insurance provided that
first the insurer enters into a confidentiality agreement on terms
satisfactory to the Purchaser.
5.21 To the extent costs and expenses are taken into account in the
calculation of EBITDA (for the purpose of calculation of the Deferred
Consideration in the Third Schedule) and the same costs or expenses are part
of a Claim the Purchaser shall not, for the avoidance of doubt, be entitled to
recover the same costs and expenses on foot of a Claim.
5.22 In no event shall the liability of each of the Vendors under this
Agreement and/or the Tax Deed exceed the amounts receivable by each of them
under this Agreement.
6. INDEMNITY
---------
6.1 RII shall indemnify and keep indemnified the Purchaser and/or the
Companies against any costs, expenses, awards, liabilities, damages, monies
incurred directly or indirectly by the Purchaser and/or the Companies , in
respect of or as a result of any loss or damage to the Environment (as
hereinafter defined in schedule 4) or any breach of Environmental Legislation
(as hereinafter defined in Schedule 4), arising from or during the occupation
of the Properties by the Vendor or by the Company or by the Other Occupiers or
otherwise prior to the Completion Date.
6.2 RII shall indemnify and keep indemnified the Purchaser and/or the
Companies against any costs, expenses, awards, liabilities, damages, monies
incurred by the Purchaser and/or the Companies directly or indirectly in
respect of or as a result of any claims made by Enterprise Ireland under the
Grant Agreements prior to or after Completion arising out of or in connection
with any act, omission or other circumstance occurring or in existence at any
time on or prior to Completion.
6.3 RII shall indemnify and keep indemnified the Purchaser and/or the
Companies against any costs, expenses, awards, liabilities, damages, monies
<PAGE> 35
incurred by the Purchaser and/or the Companies directly or indirectly, whether
occurring before or after Completion as a result of the winding up of Data
Packaging Limited, a Bermudan registered company and subsidiary of the
Company.
6.4 RII shall indemnify and keep indemnified the Purchaser and/or the
Company against any costs, expenses, awards, liabilities, damages, monies
incurred by the Purchaser and/or the Company directly or indirectly, whether
occurring before or after Completion as a result of the registration in the
Irish land registry of Data Packaging Limited, an Irish registered company, as
the owner of the Property described in Part I of the Fifth Schedule.
6.5 The Purchaser shall be entitled on the provision of notice in writing
to RII to withhold payment of any part of the Deferred Consideration payable
to RII and Enterprise Ireland in the event that the Purchaser reasonably
believes that it has a Claim. If the Purchaser has a Claim under this
Agreement or a claim under the Tax Deed and at the time such claim arises the
Deferred Consideration amount has been agreed the Purchaser shall firstly
deduct the amount of such claim from the Deferred Consideration payable to
RII and Enterprise Ireland Pro Rata and to the extent the Deferred
Consideration does not satisfy the full amount of such claim, RII shall be
required to pay the balance to the Purchaser.
6.6 If RII objects to the withholding of payment of all or any part of
the Deferred Consideration, RII shall forthwith and in any case within seven
Business Days of receipt of the notice referred to in Clause 6.5, send a
notice to the Purchaser setting out the grounds for objecting to the
withholding of payment of the Deferred Consideration. If the parties do not
resolve the dispute within seven Business Days of the service of the notice
under Clause 6.5, the matter shall be referred to an expert ("the Expert") of
not less than ten year's experience in the field of commercial law appointed
by RII and the Purchaser or failing which the President for the time being of
the Institute of Chartered Accountants in Ireland for determination on the
following basis:-
6.6.1 the Expert shall be instructed to notify that RII and the
Purchaser of the determination of any issue within ten Business Days of such
referral;
6.6.2 in making his determination the Expert shall act as expert
and not as arbitrator and the rules relating to arbitration shall not apply
and his decision as to the issue referred to him for determination shall be
final and binding in all respects on the parties in the absence of manifest
error; and
6.6.3 the fees and expenses of the Expert shall be borne as he
shall direct or failing such direction shall be borne as to 50% by the
Purchaser and 50% by RII.
6.7 In the event that a claim is not brought against RII pursuant to the
provisions of Clauses 6.2, 6.3 or 6.4 by 31 December 2007 then RII shall cease
to have any further liability thereunder.
6.8 The liability of Enterprise Ireland pursuant to the terms of this
Clause 6 shall be limited to its Pro Rata share of the Deferred Consideration
and in the event that Enterprise Ireland receives payment of any amount of the
<PAGE> 36
Deferred Consideration Enterprise Ireland shall have no further liability
thereunder.
7. COMPLETION ACCOUNTS AND EXTERNAL INDEBTEDNESS/CASH BALANCE
----------------------------------------------------------
7.1 As soon as reasonably practicable after the Completion Date and in
any event within forty five Business Days of the Completion Date the Purchaser
shall procure that the Company shall prepare a consolidated balance sheet of
the Companies as at the Completion Date including appropriate notes thereto,
and such accounts to be prepared in accordance with the following provisions
of this Clause 7 (the "draft Completion Accounts")
7.2 The draft Completion Accounts shall be prepared on a consistent basis
in accordance with the same accounting principles, methodologies bases and
policies as have been applied in the Accounts and subject thereto in
accordance with generally accepted accounting principles in Ireland.
7.3 No adjustment in the Consideration payable to RII and Enterprise
Ireland pursuant to Clause 3.2 will be made in the Completion Accounts for
External Indebtedness/Cash Balance to the extent it is dealt with in
accordance with Clause 7.9.
7.4 Upon completion of the preparation of the draft Completion Accounts
the Purchaser shall procure that the Company shall deliver a copy thereof to
RII.
7.5 RII and the Purchaser shall review the draft Completion Accounts as
soon as reasonably practicable after receipt of the same and RII shall have
reasonable access to relevant information in the possession or control of the
Purchaser to enable it to determine if it agrees with the draft Completion
Accounts. RII and the Purchaser shall within fifteen Business Days of receipt
of the draft Completion Accounts issue a report stating whether or not they
agree with the draft Completion Accounts.
7.6 If each of RII and the Purchaser report within fifteen Business Days
of receipt of the draft Completion Accounts that they agree the draft
Completion Accounts then the draft Completion Accounts shall constitute the
Completion Accounts for the purposes of this Agreement. If either the
Purchaser, or RII report that there is disagreement with the draft Completion
Accounts then the provisions of Clause 7.7 shall apply.
7.7 If any dispute arises between the Purchaser and RII as to any matter
to be included in the draft Completion Accounts or as to any aspect of the
draft Completion Accounts, either RII or the Purchaser shall within fifteen
Business Days of receipt of the draft Completion Accounts give notice to the
other party that a dispute exists ( a "Dispute Notice"). If the Purchaser and
RII have not resolved the dispute within ten Business Days of the date of
receipt of the Dispute Notice by the other party, the following provisions
shall apply. Either RII or the Purchaser may refer the dispute to an
independent firm of chartered accountants of international repute agreed by
the parties, or in default of agreement shall immediately refer the dispute to
an independent firm of chartered accountants nominated by the President for
the time being of the Institute of Chartered Accountants in Ireland (the
"Expert"), with a request that the Expert make a decision on the dispute
<PAGE> 37
within fifteen Business Days of receiving the reference. In any reference,
the Expert shall act as an expert and not as an arbitrator. The decision of
the Expert shall, in the absence of manifest error, be final and binding on
both the Purchaser and RII and shall constitute the Completion Accounts. The
Purchaser will procure that the Company will give all reasonable assistance to
the expert to enable the Expert to resolve the dispute. The costs of the
Expert shall be borne equally by on the one hand the Vendor, and on the other
hand, the Purchaser, unless the Expert otherwise determines.
7.8 In the event the Completion Accounts (as agreed or determined in
accordance with this Clause 7) contain a Target Net Working Capital amount
less than IR 253,000 the Consideration paid to RII and Enterprise Ireland in
accordance with Clause 3.1 shall be reduced by the amount of such shortfall
but only if the shortfall exceeds US$4,000 whereupon RII and Enterprise
Ireland shall pay Pro Rata the full amount of such shortfall to the Purchaser
within fourteen days of demand having been made in writing by the Purchaser.
For the avoidance of doubt where the difference is less than or equal to
US$4,000, the Consideration paid to RII and Enterprise Ireland by the
Purchaser shall not be reduced and no demand shall be made by the Purchaser
for the repayment of any of the Consideration paid to RII and Enterprise
Ireland in accordance with Clause 3.1. For the purposes of this Clause 7.8,
the US Dollar to Irish Pound Exchange Rate shall be the Exchange Rate
applicable on the day of Completion.
7.9
7.9.1 Following, Completion, RII and the Purchaser shall endeavour
in good faith to agree the External Indebtedness/Cash Balance within twenty
one days of Completion. For the purpose of determining and agreeing External
Indebtedness/Cash Balance the Purchaser shall, and shall procure that the
Group shall give RII and RII shall give the Purchaser reasonable access at
reasonable times to all books and records relating to such External
Indebtedness/Cash Balance in their respective possession or control.
7.9.2 If any dispute arises between the parties as to any matter or
amounts to be included in the External Indebtedness/Cash Balance or as to any
aspect of the External Indebtedness/Cash Balance, either RII or the Purchaser
shall immediately give notice to the other party that a dispute exists and the
dispute procedure in Clause 7.7 shall be followed mutatis mutandis.
7.9.3 If the External Indebtedness/Cash Balance amount is a higher
amount than the Provisional External Indebtedness/Cash Balance then the
Consideration paid to RII and Enterprise Ireland in accordance with Clause 3.2
shall be reduced by the amount of such difference Pro Rata and RII and
Enterprise Ireland shall pay the full amount of such difference to the
Purchaser within fourteen days of demand having been made in writing by the
Purchaser. For the avoidance of doubt any reduction in the Consideration paid
to RII and Enterprise Ireland pursuant to this sub-clause 7.9.3 shall be in
addition to any reduction made to the Consideration pursuant to Clause 7.8.
If the External Indebtedness/Cash Balance amount is a lower amount than the
Provisional External Indebtedness/Cash Balance then the Consideration paid to
RII and Enterprise Ireland in accordance with Clause 3.2 shall be increased by
the amount of such difference and the Purchaser shall pay the full amount of
such difference to RII and Enterprise Ireland Pro Rata within fourteen days of
demand having been made in writing by RII. For the purposes of this Clause
7.9 the US Dollar to Irish Pound Exchange Rate shall be the Exchange Rate
applicable on the day of Completion.
<PAGE> 38
7.10 The provisions of this Clause 7 shall be without prejudice to the
Purchaser's rights pursuant to the Warranties or otherwise provided, however,
that the Purchaser shall not be entitled to recover more than once in respect
of the same subject matter to the extent such matter was taken into account in
calculating the Target Net Working Capital and the External Indebtedness/Cash
Balance.
7.11 The Purchaser shall be entitled, if any of the matters under this
Clause 7 have not been fully resolved in accordance with this Clause 7 by the
time the Deferred Consideration becomes payable by the Purchaser to RII under
the terms of this Agreement, on the provision of notice in writing to RII, to
withhold payment of any part of the Deferred Consideration payable to RII.
7.12 If RII objects to the withholding of payment of all or any part of
the Deferred Consideration, RII shall forthwith and in any case within seven
Business Days of receipt of the notice referred to in Clause 7.11, send a
notice to the Purchaser setting out the grounds for objecting to the
withholding of payment of the Deferred Consideration. If the parties do not
resolve the dispute within seven Business Days of the service of the notice
under Clause 7.11, the procedure in Clause 6.6 shall be followed.
8. BUSINESS UNTIL COMPLETION
-------------------------
8.1 Business
--------
RII and the Managers shall procure that until Completion the business
of the Companies shall be carried out subject to Clauses 8.2 and 8.3, in its
ordinary and usual course consistent with past practice. RII and the Managers
will consult and will cause the Company to consult, with the Purchaser with
respect to any action which may materially affect the business of the
Companies.
8.2 Access
------
Until Completion RII and the Managers shall procure that each of the
Companies shall afford the Purchaser and its advisers free and full access to
its properties, books and records (including the right to take copies of same)
employees, suppliers and major customers and shall from time to time furnish
the Purchaser with such additional financial and operating data and other
information as to the business and the properties of each of the Companies as
the Purchaser or its advisers may from time to time request provided, however,
that in exercising its rights under this clause the Purchaser shall not
adversely interfere with the normal business operations of the Companies.
8.3 Prohibited Transactions
-----------------------
With effect from the date hereof and until Completion RII and the
Managers shall procure that unless otherwise provided herein none of the
Companies shall without the prior written consent of the Purchaser:
(a) create, extend, grant or issue any mortgages, charges,
<PAGE> 39
debentures, guarantees, warranties, hypothecations or other securities or
agree to do so;
(b) create or issue any share or loan capital (whether or not
convertible to shares) or give or agree to give any option in respect of any
share or loan capital or enter into any commitment to borrow money or agree to
do any of the foregoing;
(c) enter into any long term, material or abnormal contract or
any guarantee or indemnity or, save in the normal course of business, any
capital commitment;
(d) declare or pay any dividend or bonus or make any other
distribution of profits or assets or do or permit anything whereby its
financial position would be rendered less favourable than at the date hereof;
(e) pass any resolution by its members in general meeting or make
any alteration to any of the provisions of its Memorandum or Articles of
Association
(f) in any material way depart from the ordinary course of its
day to day trading either as regards the nature, scope or manner of conducting
the same or enter into any contract or transaction otherwise than in the
normal course of business and upon an arms length basis;
(g) in respect of any agreement binding upon it where the value
to or liability of the Company exceeds US$25,000 make any default or fail to
observe or perform any of the provisions thereof;
(h) acquire any assets on hire lease, hire, purchase, credit sale
or deferred terms in excess of US$25,000;
(i) co-opt any person to its board of directors;
(j) dismiss any employee under such circumstances as would render
the Company liable to have proceedings of any kind brought against it;
(k) pay or agree to pay to its directors, agents, shareholders,
officers or employees any remuneration or other emoluments or benefits
whatsoever other than those and at those rates (subject to normal increases)
subsisting at the Accounting Date;
(l) dispose of or carry out any development or additions upon any
part of its fixed assets;
(m) permit any liens or other encumbrances to arise on any of its
assets having a book value in excess of US$25,000; or
(n) acquire or dispose of any shares in any other company or
promote any subsidiary.
(o) do or omit to do any act or thing which would result in an
abnormal tax liability being incurred by any of the Companies;
(p) knowing do or suffer anything whereby there will be or is
likely to be or may be any material adverse change in its financial position;
<PAGE> 40
(q) knowingly permit any of its insurance to lapse or knowingly
do anything to make any policy of insurance void or voidable;
(r) enter into any indemnities, guarantees or suretyships except
those implied by law or given in relation to the products manufactured by it;
(s) without prejudice to (k) above, other than in the ordinary
course of business alter the terms of employment of any employee of the
Company;
(t) allow any cash to be extracted from the business by Reunion
(or any of its Subsidiaries) by dividend, intra-company funding or in any
other manner except for payment for products and services in the ordinary
course;
(u) allow any additional management charges to be levied against
them by Reunion except as provided in Clause 8.3(t).
Provided however that none of the above restrictions shall operate to
prevent the passing of the necessary resolutions of shareholders or directors
or the taking of such other steps that are necessary to fulfil the conditions
precedent set out in Clause 2.1 or the transactions to be effected on or prior
to Completion as set out in Clause 10 provided however that the Vendors shall
not take any such action or propose or pass any such resolution (and shall
procure that none of the Companies shall do any such things) unless the
Purchaser had been given written notification of the proposed action at least
3 Business Days in advance.
9. FURTHER COVENANTS
-----------------
9.1 Waiver of Pre-emption Rights
----------------------------
The Vendors hereby waive all pre-emption rights to which they may be
entitled by virtue of the Articles of Association of the Company or otherwise
and hereby authorise and require the Board to register in the name of the
Purchaser or its designee, every transfer of shares in the Company to the
Purchaser or its designee pursuant to this Agreement.
9.2 Restrictive Covenants
---------------------
(a) In further consideration of, and as a further inducement to,
the Purchaser entering into this Agreement and for the purpose of assuring to
the Purchaser the full benefit of the business and the goodwill of the
Company, the Covenantors hereby covenant with and undertake to the Purchaser
for itself only (for the benefit of the Purchaser and as trustee for the
benefit of its successors in title to the business and to the benefit of each
member of the Purchaser's Group) that they shall not and Reunion shall procure
that each member of the Reunion Group shall not during the period commencing
on Completion and expiring on the second anniversary of Completion, either
alone or jointly or in conjunction with or on behalf of or through the agency
of any person and whether as principal, agent, partner, shareholder, holding
<PAGE> 41
company, director, manager, adviser, consultant, employee or otherwise
howsoever and whether directly or indirectly:
(i) carry on or participate or assist or be involved or
concerned or interested in any Business which competes directly or indirectly
with the Companies in the Territory;
(ii) in competition with the Companies, procure or seek to
procure orders from or do business with or procure directly or indirectly any
other person to procure orders from or do business with any person who is at
Completion or who has been at any time during the period of 12 months
immediately preceding Completion a customer or supplier to the Companies in
the Territory provided however that if any such customer or supplier has
branches or operations both in and outside of the Territory nothing in this
Clause 9.2 shall be construed so as to restrict Reunion or any other member of
the Reunion Group from supplying or purchasing goods to such customer or
purchasing goods from suppliers outside of the Territory unless Reunion or
other such member of the Reunion Group has actual knowledge or could
reasonably have known that such goods are to be used or resold within the
Territory
(iii) knowingly supply competing goods or products to any
other person or company who competes directly or indirectly with the Business
of the Companies in the Territory with a view to such person or company
supplying or selling the goods or products in the Territory.
(iv) knowingly take such steps that would have a material
effect on the continuance of supplies to the Companies in the Territory (or
the terms relating to such supplies) from any suppliers who are at Completion
or who have been at any time during the 12 months immediately preceding
Completion supplying materials, components, products, goods or services to the
Companies in the Territory; or
(v) solicit or entice away or offer employment to or
endeavour to solicit or entice away or offer employment to any person who is
at the date hereof or who between that date and Completion becomes an employee
of the Companies in a senior or management capacity whether or not such person
would commit a breach of contract by reason of leaving his employment, office
or service
and notwithstanding the foregoing and for the avoidance of doubt
nothing in this Clause 9(a) shall be construed in such a way as to limit,
restrict or otherwise prevent any member of the Reunion Group engaging in the
Business anywhere in the world other than Ireland.
(b) Each of the Covenantors hereby acknowledges and agrees with
the Purchaser that each of the undertakings contained in Clause 9.3(a)
constitutes an entirely separate, severable, independent and separately
enforceable restriction on each of the Covenantors and that the duration,
extent and application of the respective restrictions in Clause 9.3(a) are not
greater than is reasonable and necessary for the protection of the legitimate
interests of the Purchaser but that if any such restriction shall be adjudged
by any court or regulatory authority or agency of completed jurisdiction to be
void or unenforceable but would be valid if part of the wording thereof was
deleted and/or the period thereof and/or the geographical area dealt with
thereby was reduced, the said restriction shall apply within the jurisdiction
<PAGE> 42
of that court or regulatory authority or agency with such modifications as may
be necessary to make it valid, effective and enforceable provided , however,
that in no event shall the scope of the covenants set forth in this Clause 9
be extended beyond Ireland.
(c) The Covenantors have taken independent legal advice and
acknowledge that they consider the undertakings contained in Clause 9.3(a)
necessary for the proper protection of the Business of the Company and further
acknowledge that damages would not be adequate remedy for breach of such
undertakings.
(d) The liability of each Covenantor for a breach of this Clause
9 shall be several only.
(e) For the purposes of this Clause 9 the term "Covenantors'
shall mean Reunion, RII and the Managers.
9.3 Articles of Association
-----------------------
The Vendors (if so requested by the Purchaser) shall on or before
Completion procure that each of the Companies shall amend its Articles of
Association in such manner as shall be reasonably required by the Purchaser.
9.4 Waivers
-------
RII, Reunion and the Managers hereby irrevocably waive all claims
against each of the Companies, their agents, advisers, directors, members and
employees (other than for salary properly accrued and expenses properly
incurred by them on behalf of any of the Companies) which they (or any of
them) may have outstanding prior to the date of this Agreement and/or
Completion and without prejudice to the generality of the foregoing none of
the information supplied by any of the Companies or their professional
advisers prior to the date of this Agreement to RII, Reunion and the Managers
or their agents, representatives or advisers in connection with the Warranties
or the contents of the Disclosure Letter or otherwise in relation to the
business or affairs of any of the Companies shall be deemed a representation,
warranty or guarantee of its accuracy by any of the Companies to RII, Reunion
and the Managers and RII, Reunion and the Managers waive any claim against any
of the Companies which they might otherwise have in respect of it. To the
extent permitted by applicable law the Purchaser shall procure that the
Companies waive any and all claims against Richard L. Evans, Kimball J.
Bradley and Robert Snyder which they may have or have had outstanding on or
prior to the date of Completion. Without prejudice to the deductability of
such management charges in the calculation of "External Indebtedness/Cash
Balance' the Purchaser shall cause the Companies to waive any claim against
any member of the Reunion Group for repayment of pre paid management fees.
<PAGE> 43
10. COMPLETION
----------
10.1 Completion
----------
Completion shall take place at the offices of LK Shields five
Business Days after the provisions of Section 2.0 have been complied with to
the satisfaction of the Purchaser (and the Vendors in the case of the matters
referred to in Clause 2.3) but in any event not earlier than 31 August 2000)
or at such other time, place and date as the parties hereto may agree. Upon
Completion the matters referred to in the following Clauses of this Section
shall take place.
10.2 Delivery
--------
10.2.1 The Vendors shall deliver to the Purchaser:
share transfer forms in respect of the shares duly executed and made
in favour of the Purchaser or its designee together with the relevant share
certificates (or in the case of any lost share certificate, an indemnity in
lieu thereof in terms satisfactory to the Purchaser);
10.2.2 RII and the Managers shall deliver to the Purchaser:
(a) the minute book, share register, seal, share certificate
book, cancelled share certificates, certificate of incorporation and other
corporate records of each of the Companies;
(b) a copy of the Memorandum and Articles of Association of each
Company certified by the Secretary of such Company to be a true and complete
copy as at the date of Completion;
(c) the title documents to the Properties; and
(d) such waivers or consents as the Purchaser may require to
enable the Purchaser or its nominees to be registered as holders of the
Shares;
(e) letters of consent from ICC Bank plc. in respect of the sale
of the shares in the form satisfactory to the Purchaser;
(f) confirmation from ICC BES Managers Limited and Erin Executor
and Trustee Company Limited in form satisfactory to the Purchaser agreeing
that the shares held by the Managers and Paschal Claffey and the powers
exerciseable under Clause 7.4 of the Investment Agreement dated 12th November,
1997 shall be transferred/assigned to and exercisable by the Purchaser or a
nominee thereof;
(g) letter of resignation of such of the director(s),
secretary/ies and auditors of the Group Companies in such form as the
Purchaser may require on in the case of the resignation of auditor containing
a statement that there are no circumstances connected with their resignation
that they consider should be brought to the attention of the members or
creditors of such Company.
<PAGE> 44
(h) a letter of consent in form satisfactory to the Purchaser
from Schneider Electric Manufacturing Celbridge ("Schneider") in relation to
the Industrial Subcontracting Agreement between Schreider and Data Packaging
Limited dated 25th November 1999.
(i) evidence in form satisfactory to the Purchaser of the release
of all charges over any Company in the Group with the exception only of
charges in favour of ICC Bank plc
10.2.3 RII shall deliver to the Purchaser:
(a) the Tax Deed duly executed by RII and the Company; and
(b) the Deed of Guarantee duly executed by Reunion together with
the Legal Opinion.
10.2.4 The Managers shall deliver to the Purchaser:
(a) the Service Agreements duly executed by each of the Managers.
10.2.5 As additional consideration the Purchaser shall pay RII an
amount equal to the principal amount of the Promissory Notes (together with
accrued interest up to the date of Completion) from which RII will immediately
repay the Promissory Notes to Data Packaging Limited on behalf of DPL
Acquisition Corp.
10.3 The Purchaser shall deliver:
(a) to RII duly executed counterpart Tax Deed;
(b) to RII duly executed counterpart Deed of Guarantee; and
(c) to the Managers duly executed counterparts of the Service
Agreements executed by the Company in respect of each of them.
10.4 Board Meeting
-------------
RII and the Managers shall procure that meetings of the Board and of
the board of directors, secretary and auditors of each Group Company are held
at which:-
(a) such persons as the Purchaser may nominate are duly appointed
as directors, secretary and auditors of such of the Companies as shall be
designated by the Purchaser;
(b) such of the directors, auditors and secretary of each of the
Companies as the Purchaser may require, retire without any claim for
compensation for loss of office or other claim against any of the Companies
and furnish a letter under seal acknowledging that they have no such claim and
(in the case of the auditors' letter), confirming that there is no matter
which should be brought to the attention of the members in relation to their
resignation;
(c) the Purchaser and/or its designees are approved for
registration as members of the Company in respect of the Shares subject only
<PAGE> 45
to presentation to the Secretary of the transfers thereof duly stamped; and
(d) the banking mandates of each of the Companies are changed in
such manner as the Purchaser shall require.
10.5 Payment
-------
10.5.1 Subject to due compliance with the provisions of the
foregoing Clauses of this Section the Purchaser shall make payment of the
consideration payable on Completion in accordance with the provisions of
Section 3.0 comprising:
(a) US$13,300,000 less the Provisional External Indebtedness/Cash
Balance to RII and Enterprise Ireland Pro-Rata; and
(b) US$1,200,000 to the Managers pro-rata to their percentage
ordinary shareholdings in the Company.
10.5.2 In the event the full amount of intra-company receivables
(excluding prepaid management fees) owed to the Companies by Reunion are not
repaid or only partially repaid in connection with Completion in accordance
with Clause 10.7, the relevant sum will be deducted from the Consideration
payable to RII pursuant to Clause 3.2.
10.6 Stamping
--------
The Purchaser shall, following Completion, promptly deliver to the
Revenue Commissioners the share transfer forms referred to in Clause 10.2(a)
for assessment of stamp duty and shall promptly pay the duty thus assessed.
Prior to registration of such duly stamped share transfer forms in the
register of members of the Company, the Vendors shall co-operate in any manner
required by the Purchaser for the convening, holding at short notice and
conduct of general meetings of the Company, shall execute on a timely basis
all proxy forms, appointments of a representative, documents of consent to
short notice and such like that the Purchaser may require and generally shall
act in all respects as the nominee and at the direction of the Purchaser in
respect of the Shares and all rights and interests attaching thereto.
10.7 Repayment by RII
----------------
10.7.1 On Completion RII and Reunion shall and Reunion shall procure
that each member of the Reunion Group shall release the Companies from all
securities, guarantees and indemnities given by or binding upon the Companies
in relation to any debt or obligation of any members of the Reunion Group and
ensure all intra-company funding and trading accounts other than between the
Companies are settled prior to Completion. Pending such release and/or
payments, RII and Reunion shall indemnify and keep indemnified the Purchaser
as trustee for itself and the Companies concerned from and against all costs,
claims and demands arising out of or in connection with such securities,
guarantees and indemnities and in respect of any inter-company receivables
other than between the Companies of the Companies not repaid prior to
Completion.
<PAGE> 46
10.7.2 Reunion shall acknowledge, undertake and represent in writing
that no management charges or monies by way of intra-group debt or otherwise
are owed to it or any other member of the Reunion Group by any of the
Companies and each of the Companies will do the same in respect of Reunion.
11. GENERAL PROVISIONS
------------------
11.1 Confidential Information
------------------------
11.1.1 The Vendors (otherwise than Enterprise Ireland) shall
use its/their best endeavours to procure that no body corporate controlled by
it/them shall, at any time after the date of this Agreement, make use of or
disclose for its/their own benefit or for or on behalf of or to any other
person any Confidential Information which may be within or may come to
it/their knowledge; and
11.1.2 The Vendors (other than Enterprise Ireland) shall use
its/their best endeavours to procure that any body corporate controlled by
it/them, will use its reasonable endeavours to prevent the disclosure of any
Confidential Information.
11.1.3 Clause 11.1.1 shall not apply to:
11.1.3.1 disclosure of any Confidential Information
to officers or employees of the Vendors whose province it is to know about the
Confidential Information;
11.1.3.2 disclosure of any Confidential Information
required by law;
11.1.3.3 disclosure of any Confidential Information
to any professional adviser for the purpose of advising the Vendors and on
terms that this Clause 11.1 shall apply to any use or disclosure by the
professional adviser;
11.1.3.4 any Confidential Information which comes
into the public domain otherwise than by breach of this Clause 11.1 by the
Vendors (other than Enterprise Ireland).
11.2 Survival of Obligations
-----------------------
The Warranties together with any of the provisions of this Agreement
which shall not have been performed at Completion shall remain in full force
and effect notwithstanding Completion.
11.3 Binding on Successors
---------------------
This Agreement shall enure to the benefit of and be binding upon the
respective parties hereto and their respective successors personal
representatives and assigns. The Vendors agree that the benefit of any
provision of this Agreement may be enforced by the beneficial owner for the
time being of the Shares and accordingly the benefit of any provision of this
<PAGE> 47
Agreement may be assigned by the Purchaser and its successors in title without
the consent of the Vendors.
11.4 Further Assurance
-----------------
At the request of the Purchaser, RII, Enterprise Ireland and the
Managers shall (and shall procure that any other necessary parties shall)
execute and do all such documents acts and things as may reasonably be
required subsequent to Completion by the Purchaser for assuring to or vesting
in the Purchaser (including its nominee or nominees) the legal and beneficial
ownership of the Shares.
11.5 Waiver
------
Any liability to any party hereto under the provisions of this
Agreement may in whole or in part be released varied compounded or compromised
by such party in its absolute discretion as regards any party under such
liability without in any way prejudicing or affecting its rights against any
other party under the same or a like liability whether joint and several or
otherwise. A waiver by any party hereto of any breach by any party hereto of
any of the terms provisions or conditions of this Agreement or the
acquiescence of a party hereto in any act (whether of commission or omission)
which but for such acquiescence would be a breach as aforesaid shall not
constitute a general waiver of such term provision or condition or of any
subsequent act contrary thereto.
11.6 Investigations
--------------
No investigations made by or on behalf of the Purchaser in relation
to any of the Companies (whether pursuant to Clause 2.1(b) or otherwise) shall
in any way affect or be deemed to be a waiver of any of the Warranties.
11.7 Counterparts
------------
This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts each of which when
executed and delivered shall constitute an original all such counterparts
together constituting but one and the same instrument.
11.8 Business Days
-------------
If any action or duty to be taken or performed under any of the
provisions hereof would, apart from the provisions of this Clause, fall to be
taken or performed on a day which is not a Business Day such action or duty
shall be taken or performed on the Business Day next following such date.
11.9 Assignment
----------
This Agreement shall not be assignable in whole or in part by any of
the parties hereto without consent of the other save that the Purchaser shall
<PAGE> 48
be entitled to assign and transfer all or any of its rights and obligations
hereunder to any member of the Purchaser's Group or as security interest to
its funders and financiers. If such assignee or transferee shall cease to be
a member of the Purchaser's Group the Purchaser shall provide that it shall
assign its rights and obligations under the Agreement to a member of the
Purchaser's Group prior to so ceasing.
11.10 Notices
-------
(a) Any notice or other communication required or permitted to be
given or made hereunder shall be addressed or sent as follows.
(i) if to the Purchaser, if by letter, to Ciaran Harris
at Trend Technologies Europe Limited, Knockmitten Lane, Western Industrial
Estate, Dublin 12, Ireland and to Graeme Stening at Doughty Hanson & Co.,
Times Place, 45 Pall Mall, London SW1Y 5JG, England and if by fax to fax
number (01) 4505065 and to (0044) 207 747 9344 and if by electronic mail to
[email protected] and to [email protected]; and
(ii) If to Reunion:
11 Stanwix Street
Suite 1400
Pittsburgh Pennsylvania 15224
Attention: President
Fax: 001 412 281 4747
(iii) if to RII:
30 Delaware Avenue
Suite 900
Wilmington Delaware 19801
United States of America
with a copy (but without prejudice to the validity of
service on RII in the manner aforesaid) to Arthur Cox:
Solicitors,
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Attention: Mary Swords
Fax:353-1-618 0731
or to such other postal or electronic mail address or fax number as any such
party hereto may from time to time notify to the other parties hereto in
writing in accordance with the provisions hereof.
(b) Any notice or other communication required or permitted to be
given or made hereunder shall be validly given or made if delivered personally
or if despatched by pre-paid letter post addressed as aforesaid or if sent by
telex message to such telex number (if any) as may be specified as aforesaid
or if sent by fax to such fax number (if any) as may be specified as aforesaid
and shall be deemed to be given or made:
<PAGE> 49
(i) if delivered by hand - at the time of delivery;
(ii) if sent by post - ninety six hours after the same
shall have been posted;
(iii) if sent by electronic mail - at the time of
acknowledgement of receipt; and
(iv) if sent by fax - at the time of termination of the
fax transmission.
11.11 Announcements
-------------
The Vendors and the Purchaser shall consult together as to the terms
of, timetable for and manner of publication of, any announcement to
shareholders, employees, customers, suppliers or other authorities or to the
media or otherwise which either may desire or be obliged to make regarding the
subject matter of this Agreement. Subject as aforesaid and save as may be
required by law, neither the Vendors nor the Purchaser shall make or authorise
any announcement concerning the subject matter of this Agreement.
11.12 Costs
-----
Each party to this Agreement shall pay its own costs of and
incidental to this Agreement.
IN WITNESS whereof this Agreement has been entered into the day and year first
herein written.
<PAGE> 50
FIRST SCHEDULE
--------------
PART 1
------
NAME ADDRESS
Mr. Paul Walsh Lakeview Dysant, Mullingar, County Westmeath
Mr. Donal Lawlor Irishtown, Mullingar, County Westmeath
Mr. Brendan Murtagh Mostrim Road, Ballymahon, County Longford
<PAGE> 51
SECOND SCHEDULE
---------------
SHAREHOLDINGS
-------------
VENDORS NO. OF ORDINARY SHARES %
SHAREHOLDINGS
RII Investment Group 12,642 80.47%
Enterprise Ireland 712 4.53%
Mr. Paul Walsh 1,178 7.50%
Mr. Donal Lawlor 707 4.50%
Mr. Brendan Murtagh 471 3.00%
<PAGE> 52
THIRD SCHEDULE
--------------
Part I
------
Deferred Consideration
----------------------
For the purposes of calculating the Deferred Consideration, "Earn-Out Net
Profits" means the "EBITDA" of the Group to be determined by Messrs Deloitte &
Touche (the "Auditors") by reference to the audited consolidated profit and
loss accounts of the Group for the financial year ended 31 December, 2000
being accounts prepared on the same basis and in accordance with the same
accounting principles and policies as have been applied in the Accounts and in
the absence of such principles and policies in accordance with generally
accepted accounting principles in Ireland.
During the period from Completion until 31 December, 2000, the Purchaser
undertakes to RII in the terms set out in Part III of this Schedule.
The amount of the Deferred Consideration shall be calculated as follows:
1. The Purchaser shall procure that the Auditors shall prepare and audit
a consolidated profit and loss account of the Group for the period from 1
January 2000 to 31 December 2000 and shall within three months of the end of
such period deliver to RII, Enterprise Ireland and to the Purchaser a copy of
such accounts together with a report showing the Earn-Out Net Profits for such
period in the form set out in Part II of this Schedule and showing the amount
of the Deferred Consideration payable in respect of that period (the
"Report").
2. The Report (referred to in paragraph 1 above) shall set out by
reference to the following formulae
(X - Y) x 2 = Z
where: X = the EBITDA of the Group for the 12 month period ended 31
December 2000
Y = the EBITDA of the Group for the period commencing 1 January 2000
and ending 30 June 2000
Z = the Earn-Out Net Profits
For each US$ that Z exceeds $2.5m, RII and Enterprise Ireland shall
be entitled to Deferred Consideration of US$1.25 (one and one quarter dollars)
up to a maximum Deferred Consideration payable to RII and Enterprise Ireland
of $1.0m (one million dollars) Pro-Rata. The following table is included to
illustrate the amount of Deferred Consideration payable, if at all,
<PAGE> 53
Earn-Out Calculation assumes US$-IR rate 1-1.25
Percentage Deferred
6 months 1/7/00 - 31/12/00 Annualised Achieved Consideration
-------------------------- ---------- ---------- -------------
1,250,000 2,500,000 0.00% -
1,350,000 2,700,000 25.00% 250,000
1,450,000 2,900,000 50.00% 500,000
1,550,000 3,100,000 75.00% 750,000
1,650,000 3,300,000 100.00% 1,000,000
3. The Purchaser shall, and shall procure that all members of the
Purchaser's Group shall, give to the Auditors all relevant papers, information
and explanations as may be reasonably necessary to enable the Auditors to
prepare the relevant profit and loss account and to issue the Report.
4. RII's Auditors may review on behalf of both RII and Enterprise
Ireland the accounts referred to in paragraph 1 above in order to satisfy
themselves that they have been prepared and audited in accordance with the
provisions of this Schedule and that the details contained in the Report are
correct. The Purchaser shall itself and shall procure that each member of the
Purchaser's Group and the Auditors shall co-operate promptly and diligently in
any such review and that they shall give to RII and RII's Auditors all such
papers, information and explanations as they may reasonably require in
relation thereto.
5. Unless within fifteen Business Days of receipt of the same (inclusive
of the day of receipt) RII informs the Purchaser in writing, giving reasonable
particulars and reasons, of any respect in which it is not satisfied that the
calculation of the Earn-Out Net Profits or the amount of the Deferred
Consideration as specified in such Report are correct, then the contents of
the Report shall be final and binding between RII, Enterprise Ireland and the
Purchaser.
6. Notwithstanding any other provision of this Agreement, the Auditors
shall translate the EBITDA of the Group for the purposes of calculating the
Deferred Consideration into US Dollars using a currency Exchange Rate of 1.25
US Dollars for each Irish pound.
7. If RII informs the Purchaser that it is not so satisfied, the parties
shall endeavour (within the period expiring fifteen Business Days after
receipt of RII's notification that it is not so satisfied) to resolve the
matter and if the matter is not so resolved it shall be resolved by an expert
in accordance with the provisions of paragraphs 9 and 10 of this Schedule and
following resolution by any such expert, the contents of the Report shall be
final and binding between RII, Enterprise Ireland and the Purchaser in the
absence of manifest error.
8. Subject to the provisions of this Agreement the Deferred
Consideration shall be satisfied in cash by the Purchaser seven Business Days
following the day on which the Report is treated as final and binding between
RII, Enterprise Ireland and the Purchaser in the absence of manifest error in
accordance with preceding paragraphs of this Schedule.
9. The expert shall be a Chartered Accountant or firm of Chartered
Accountants agreed on by RII and the Purchaser or, if they cannot agree on
<PAGE> 54
such within seven days of either party giving notice in writing to the other
that it desires an expert to be appointed, such Chartered Accountant or firm
of Chartered Accountants as may be nominated on the application of either of
them by the President or other the senior officer for the time being of the
Institute of Chartered Accountants of Ireland.
10. If any disagreement or dispute under this Agreement is referred to
the expert
(a) the parties will each co-operate with the expert in resolving
such disagreement or dispute, and for that purpose will provide to him all
such information and documentation as he may reasonably require;
(b) the expert shall have the right to seek such professional
assistance and advice as he may require;
(c) the fees of the expert and other professional fees incurred
by him shall be met in proportion to the value of the award made by him and,
if the fees are paid in full by either party, the appropriate proportion shall
be due from the other party as a debt due on demand;
(d) the expert shall act as expert and not as arbitrator and his
decision shall be final and binding on the parties in the absence of manifest
error.
11. If any instalment of the Deferred Consideration is not paid when it
is due in accordance with paragraph 8, such amount shall bear Interest from
time to time, calculated on a daily basis for the period from the due date to
the date of actual payment, before as well as after judgement.
<PAGE> 55
Part II
FORM OF REPORT
To: The Directors The Directors
[RII] [Purchaser]
[Enterprise Ireland]
Data Packaging Holdings Limited (the "Company")
We confirm that we have reviewed the consolidated profit and loss accounts of
the Company for the period ended 31 December 2000. These accounts are
attached. They have been drawn up in accordance with the provisions of the
Third Schedule to the Share Purchase Agreement dated [ ], 2000
between [RII], the [Purchaser], Enterprise Ireland and Others.
Based on the above accounts we confirm that :
(a) The EBITDA for the full year is US$[ ]
(b) The EBITDA for the first six months of the year is US$[ ]
(c) the aggregate amount of the Earn-Out Net Profits for the period is
US$[ ] i.e. US$ (a) - (b) x2 ; and
(d) the amount of the Deferred Consideration payable is US$[ ]
Yours faithfully,
[Auditors]
Part III
PROTECTIVE COVENANTS
The Purchaser agrees with RII that during the period from Completion until 31
December, 2000;
(a) it will procure that the Group will not engage to any material extent
in any business other than the Business;
(b) it will not cause any member of the Group to enter into any contract
outside the ordinary course of its business as historically carried out;
(c) it will not cause or permit any member of the Group to materially
alter its business or manner of operation or to sell all or any material part
of its business or to reduce the scale of its operations or materially alter
its business or manner of operation;
(d) it will procure that all trading or other transactions of whatever
nature between the Purchaser's Group and the Purchaser or any member of the
Purchaser's Group will be conducted on an arm's-length basis at fair market
value;
(e) it will not cause or permit the diversion of any business secured by
<PAGE> 56
the Purchaser's Group to any other member of the Purchaser's Group;
(f) it will not permit any member of the Purchaser's Group to incur any
loss or liability other than in relation to its own business;
(g) neither it nor any member of the Purchaser's Group will make any
charges (or fees or otherwise) to the Purchaser's Group;
(h) save in respect of a dividend by the Company to the Purchaser in the
amount represented by the principal amount of the Promissory Notes together
with accrued interest up to Completion it will not permit any member of the
Purchaser's Group to pay any dividends or purchase, redeem or pay any other
amounts in respect of the ordinary shares of such member or to make any loans,
advances or investments ; and
(i) it will not permit any member of the Purchaser's Group to prepay any
External Indebtedness/Cash Balance.
<PAGE> 57
FOURTH SCHEDULE
---------------
Warranties
----------
Part I
------
General Warranties
------------------
1. Construction
------------
(a) The provisions of the within Agreement (herein referred to as
the "Agreement") with regard to interpretation and construction shall apply to
the provisions of this Schedule and, in particular (without limitation), save
as otherwise specifically defined herein, expressions defined in the Agreement
shall bear the same meanings in this Schedule.
(b) Each of the Clauses contained in this Schedule shall be
construed independently of the other Clauses of this Schedule and shall not be
limited in any respect by the inclusion of other Clauses dealing with the same
subject matter or dealing more specifically with the subject matter of such
Clause.
2. Knowledge of Warrantors
-----------------------
(a) Any representation or warranty set out in this Schedule which
refers to the knowledge, information, belief or awareness of the Warrantors or
any of them (or any of such matters or any combination thereof) shall be
deemed to refer to such knowledge, information, belief and/or awareness (as
the case may be) after the making of due and careful enquiries by the
Warrantors with regard to the subject matter of such representation or
warranty and the Warrantors shall be deemed to have made or given such
representation or warranty on such basis.
3. Recitals Disclosure Letter and Information
------------------------------------------
(a) The facts set out in the Recitals hereto are and the
information set out in the Disclosure Letter and any written information
delivered by or on behalf of the Warrantors to the Purchaser, the Purchaser's
Solicitors, the Purchaser's accountants or any other person on behalf of the
Purchaser relating to each of the Companies in the course of responding to a
due diligence questionnaire and any additional questions raised by the
Purchaser's advisors. was true, complete and accurate in all material respects
at the date it was communicated and remain true, complete and accurate save to
the extent expressly stated in subsequent written correspondence or in the
Disclosure Letter and none of the Warrantors are aware of any other fact or
matter which renders any such information misleading or which might reasonably
affect the willingness of a purchaser to purchase the Shares on the terms
(including price) of this Agreement.
<PAGE> 58
Part II
-------
Accounts
--------
4. Accounts
--------
(a) The Accounts have been prepared in accordance with the
historical cost convention and all applicable statutes and regulations
(including without prejudice to the generality of the foregoing the Companies
Acts and any other relevant statutes and all current FRSs of the Accounting
Standards Board) applicable to a company incorporated in Ireland) and the
bases and accounting policies adopted for the purposes of preparation of the
Accounts are the same as those adopted in the preparation of the audited
consolidated accounts of each of the Companies in respect of the last five
preceding accounts periods and the Accounts:-
(b) set out fully, correctly and accurately the assets,
liabilities, profits and losses of each of the Companies and the amounts
thereof and show a true and fair view of the financial position of each of the
Companies as at the Accounting Date and are not affected by any unusual,
extraordinary, exceptional or non-recurring items;
(c) make full provision or reserve for all liabilities or capital
commitments of each of the Companies up to the Accounting Date including
contingent, unqualified or disputed liabilities and include all such reserves
and provisions for taxation as are necessary to cover all liabilities for
Taxation (whether or not assessed) of each of the Companies up to the
Accounting Date and in particular (but without prejudice to the generality of
the foregoing) attributable to profits gains income receipts and loans and
distributions made to participators and associates and payments made from
which tax is deductible;
(d) redundant and obsolete stock of each of the Companies has
been wholly written off and all excessive or slow moving stock has been
written down as required under the appropriate FRS;
(e) the basis of valuation for stock-in-trade and work-in-
progress:-
(i) is in accordance with normally recognised accounting
principles and practices for the kind(s) of business in which each of the
Companies is engaged and with the relevant FRS in force for the relevant
financial year;
(ii) has remained substantially the same in respect of the
commencement and end of the accounting periods of each of the Companies during
the period of five years terminating on the Accounting Date since its date of
incorporation whichever period is the shorter;
(iii) is such that the value attributed to each item of
stock (other than redundant, obsolete, excessive or slow moving stock) does
not exceed the lower of cost and net realisable value as at the Accounting
Date.
<PAGE> 59
(f) the Accounts do not include any intangible assets and the
value attributed to each fixed asset of the Companies does not exceed the
current market value thereof as at the Accounting Date. The basis of valuing
such fixed assets has not been changed during the period of five years
terminating on the Accounting Date and nor has there been any revaluation of
fixed assets during such period;
(g) the rate of depreciation applied in respect of each fixed
asset has been consistently applied over not less than the five previous
accounting periods of each of the Companies and is adequate to write down the
value of such fixed asset to its net realisable value as at the end of its
useful working life and the fixed assets have been depreciated in accordance
with the relevant FRS for the relevant financial year.
(h) the Management Accounts (a copy of which are attached to the
Disclosure Letter) have been prepared with reasonable care and attention and
on a basis and using accounting policies consistent with those adopted in
preparing the Accounts and are correct and accurate in all material respects
in so far as they show the state of affairs and income or profit and loss of
the Companies at 30th April 2000 and are not materially misleading in any
respect.
(i) the net book value of the fixed assets of the Companies is
not less than that shown in the Management Accounts allowing for subsequent
depreciation and amortisation on the basis set out in the Accounts.
5. Accounting Records
------------------
(a) All accounts books ledgers financial and other records of
whatsoever kind of each of the Companies are in its possession and:-
(b) have been fully properly and accurately maintained and
contain true and accurate records of all matters required to be entered
therein by the Companies Acts, 1963 - 1990 and any other relevant statutes or
regulations;
(c) do not contain or reflect any material inaccuracies or
discrepancies; and
(d) give and reflect a true and fair view of the trading
transactions and of the financial and contractual position of each of the
Companies and of its assets and liabilities.
6. Valuation of Plant, etc.
------------------------
Adequate depreciation and provisions for obsolescence have been made
in the Accounts having regard to the condition and age of the plant, machinery
fixtures and fittings belonging to each of the Companies so that the written
down value thereof taken as a whole does not exceed its actual value and none
of such plant machinery fixtures and equipment was acquired at a price
substantially in excess of market value.
<PAGE> 60
7. Companies (Amendment) Act, 1986
-------------------------------
(a) At the Accounting Date each of the Companies qualified as a
medium sized company for the purposes of Section 8 of the Companies
(Amendment) Act, 1986 and was entitled to avail of the exemptions set out in
Section 11 and 12 of that Act.
(b) No guarantee has been executed or filed by or in respect of
any of the Companies pursuant to Section 17 of the Companies (Amendment) Act,
1986.
8. Current Debtors
---------------
None of the book debts included in the Accounts and none of the book
debts owing to any of the Companies are at the date hereof or will at
Completion are outstanding for more than sixty days from their due dates for
payment and all such debts will realise in the normal course of collection
their full value after taking into account the provisions for bad and doubtful
debts included in the Accounts.
Part III
--------
Finance
-------
9. Charges, Loan Capital and Engagements
-------------------------------------
(a) Save as disclosed in the Accounts or in the Disclosure Letter
there are:-
(i) no mortgages charges liens or other similar
encumbrances on any estate or interest in the assets of any of the Companies
or any part thereof; and
(ii) no loans, (including loan capital) outstanding to any
of the Companies.
(b) In respect of any encumbrance referred to in paragraph (a)
disclosed as aforesaid there has been no increase in the amount thereof for
which it is available as security beyond that for which it was security at the
Accounting Date or in the case of a mortgage or charge created subsequent to
that date the amount disclosed to the Purchaser for the purposes hereof.
(c) With the exception of the loans debts and securities
particulars of which are contained in the Disclosure Letter and which will
have been discharged prior to Completion there are no loans made to or debts
owing by any of the Warrantor or any company owned or controlled by any of it
or by any director or employee of such company or any debts owing to or by any
of the Companies other than debts which have arisen in the ordinary course of
business.
(d) With the exception of the contracts and engagements
<PAGE> 61
particulars of which are contained in the Disclosure Letter there are no
existing contracts or engagements to which any of the Companies is party or in
respect of which such company may in any way be liable and in which the
Warrantor (or any member of the Reunion Group) or in which any director or
employee of any of the Companies is interested directly or indirectly.
10. Bank and Other Borrowings
(a)
(i) Full details of all limits on each of the Company's
bank overdraft facilities are accurately set out in the Disclosure Letter;
(ii) The total amount borrowed by any of the Companies
from each of its banks does not exceed its respective overdraft facilities;
(iii) The total amount borrowed by each of the Companies'
(as determined in accordance with the provisions of the relevant instrument)
does not exceed any limitation on its borrowing powers contained in its
Articles of Association or any debenture or loan stock, deed or other
instrument.
(b)
(i) A statement of each of the bank accounts of each of
the Companies and of the credit or debit balances thereon as at a date not
more than seven days before the date hereof has been supplied to the
Purchaser;
(ii) Since such statements there have been no payments out
of any such accounts except for payments in the ordinary course of business
and the balances on current accounts are not substantially different from the
balances shown in such statements.
(c) In relation to all debentures, acceptance, credit,
overdrafts, loans, or other financial facilities outstanding or available to
each of the Companies (referred to in this Clause as "facilities"):-
(i) the Disclosure Letter sets out full details of them
and there are attached to it accurate copies of all documents relating to the
facilities;
(ii) there is no contravention of or non-compliance with
any provision of any such document;
(iii) no steps for the early repayment of any indebtedness
have been taken or threatened;
(iv) there have not been nor are there any circumstances
known to the Warrantors whereby the continuation of any of the facilities
might be prejudiced or which may give rise to any alteration in the terms and
conditions of any of the facilities;
(v) none of the facilities is dependent on the guarantee
or indemnity of or any security provided by a third party; and
(vi) none of the Warrantors have any knowledge,
information or belief that as a result of the acquisition of the Shares by the
<PAGE> 62
Purchaser or any other thing contemplated in this Agreement any of the
facilities might be terminated or mature prior to its stated maturity.
11. Borrowed Monies
---------------
None of the Companies has received notice (whether formal or
informal) from any lenders of money to it in respect of or as a preliminary to
the demand by such persons for payment of any money owing by the Companies to
such persons and the Warrantors are not aware of any circumstance likely to
give rise to such notice being given to any of the Companies.
12. Grants, etc. not Repayable
--------------------------
Save for disposals in the ordinary course of business none of the
Companies has done or failed to do any act or thing which could result in all
or any part of a government grant or other similar payment or allowance made
or due to be made by it becoming repayable or being forfeited by it.
Part IV
-------
Assets
------
13. Ownership of Assets, etc.
-------------------------
All assets of or represented as belonging to each of the Companies
(including but not limited to the fixed and loose plant machinery furniture
fixtures and fittings and other chattels equipment and vehicles, stock, work-
in-progress, raw materials, supplies, books, records, customers lists, costing
details and all other written information) are the absolute property of and
held by each of the Companies free from any charge, lien, hypothecation,
pledge, or other security interest assignment any factoring arrangement hire
purchase or credit sale agreement or bill of sale or other encumbrance
whatsoever (save for liens arising in the ordinary course of business) are not
subject to any agreement or commitment to give or create any of the foregoing
over them and are held in possession by it and such assets are all the assets
necessary for carrying on the business of each of the Companies at their
levels at the date hereof and at Completion.
14. Plant and Machinery
-------------------
(a) The plant, machinery, vehicles and other equipment used in
connection with the business of each of the Companies:-
(i) are in a good and safe state of repair and condition
and satisfactory working order and have been regularly and properly
maintained;
(ii) are not to any extent surplus to requirements;
(iii) are in its possession and control, and are its
<PAGE> 63
absolute property, save for those items the subject of the hire purchase,
leasing or rental agreements listed in the Disclosure Letter, or in respect of
which the outstanding payments do not exceed IR 2,000;
(iv) are not expected to require replacements or additions
at a cost in excess of IR 10,000 within six months from the date of this
Agreement;
(v) are all capable and (subject to normal wear and tear)
will remain capable throughout the respective periods of time during which
they are each written down to a nil value in the accounts of each of the
Companies (in accordance with the normal recognised accountancy principles
consistently applied prior to the date hereof) of doing the work for which
they were designed or purchased.
(b) Maintenance contracts are in full force and effect in respect
of all assets of each of the Companies where it is normal or prudent to have
maintained by independent or specialist contractors and in respect of all
assets which each of the Companies is obliged to maintain or repair under any
leasing or similar agreement; and all those assets have been regularly
maintained to a good technical standard and in accordance with safety
regulations usually observed in relation to assets of that description and in
accordance with the terms and conditions of any applicable leasing or similar
agreement.
15. Raw Materials
-------------
The stock of raw materials, packaging materials and finished goods
now held by each of the Companies are not excessive and are adequate in
relation to the current trading requirements of each of the Companies and none
of such stock is obsolete, slow moving, unsuitable, unmarketable,
inappropriate or of limited value in relation to the current business of each
of the Companies and no contracts are established which are likely to result
in the foregoing not being true.
16. Condition of Stocks
-------------------
All of the stocks of each of the Companies are in good condition and
regular stock analysis of such stocks have been carried out by each of the
Companies since the Accounting Date.
17. Retention of Title
------------------
None of the regular suppliers of stock, raw materials or the like to
any of the Companies supply such stock raw materials or the like on the basis
that the title to the same shall be retained by such supplier pending the
fulfilment by such company of any obligation and at the date hereof and at
Completion no amounts shall be owing by any of the Companies to any person
firm or company who shall have supplied goods stock raw materials or the like
to any of the Companies on such basis as aforesaid.
<PAGE> 64
18. Insurance
---------
(a) All the assets of each of the Companies of an insurable
nature have at all material times been and are at the date hereof insured in
amounts representing their full replacement or reinstatement value against
fire and other risks (including without limiting the generality of the
foregoing loss of profit) normally insured against by persons carrying on the
same classes of business as those carried on by each of the Companies and each
of the Companies has at all material times been and is at the date hereof
adequately covered against accident, damage, injury, third party public
liability (including products liability ) loss of profits and other risks
normally insured against by persons carrying on the same classes of business
as those carried on by each of the Companies. All such policies are and will
at Completion be in full force and effect and nothing has been done or omitted
to be done which would make any policy of insurance void or voidable or which
is likely to result in an increase in premium. Copies of such insurance
policies have been disclosed to the Purchaser and are attached to in the
Disclosure Letter.
(b) None of the said policies is subject to any special or
unusual terms or restrictions or to the payment of any premium in excess of
the normal rate and no claim is outstanding or may be made under any of the
said policies and no circumstances exist which are likely to give rise to such
a claim nor is the Warrantor is aware of any circumstances likely to give rise
to a claim.
19. Leased Asset
------------
No circumstances have arisen or are likely to arise in relation to
any asset held by any of the Companies, under a lease or a similar agreement
whereby the rental payable has been or is likely to be increased.
20. Patents and Trade Marks
-----------------------
(a) None of the Companies has an interest in any patents trade
marks or registered designs or applications for any of the foregoing or any
right to apply therefor in any part of the world.
(b) None of the Companies has entered into any agreement for
licensing of patents or copyrights or use of trade marks registered designs or
the provision or acquisition of technical information or assistance or which
may restrict the use or disclosure of information.
(c) None of the Companies require any patent trade mark or
registered design or licence to use the same in order to carry on its business
as presently constituted.
(d) The processes employed and the products and services dealt in
by each of the Companies do not use embody or infringe any Irish or foreign
patents, registered designs, knowhow or trade secrets, copyrights, trade marks
or similar intellectual property rights (whether registered or not) and no
claims have been made and no applications are pending of which the Warrantor
is aware which if pursued or granted might be material thereto.
<PAGE> 65
(e) Each of the Companies is entitled to use without payment all
know-how and technical information used by them in connection with its
businesses and all information concerning its products, methods and processes.
Part V
------
Properties
----------
21. Details of Properties
---------------------
(a) The Properties set out in Part 1 of the Fifth Schedule
comprise all the land and buildings owned and occupied by Data Packaging
Limited. None of the other Companies own or occupy or otherwise use any
property in connection with the business of the Company.
(b) The particulars of title and occupation of the Properties
set out in Part 2 of the Fifth Schedule are true and correct.
(c) Those of the Properties which are occupied or otherwise used
by the Companies in connection with their businesses are occupied or used by
right of ownership or under lease or licence, the terms of which permit such
occupation or use.
22. Title
-----
(a) Where any of the Companies is shown as the owner of any of
the Properties, such company is the legal and beneficial owner thereof, has
good and marketable title thereto and is in sole and undisputed occupation
thereof.
(b) Data Packaging Limited has in its possession or under its
control all deeds and documents necessary to prove title thereto and all such
deeds and documents are properly stamped and registered.
(c) Apart from a charge in favour of ICC Bank plc the Properties
are free from any caution, inhibition or notice and no matter exists which is
capable of registration against any of the Properties.
(d) There is no resolution proposal scheme or order whether
formerly adopted or not for the compulsory acquisition of the whole or any
part of the Properties.
(e) Where the title to the Properties or any part thereof is
unregistered, no event has occurred in consequence of which compulsory
registration should have been affected under the provisions of the
Registration of Title Act, 1964.
(f) Where the title to the Properties or any part thereof held by
any of the Companies is registered in the Land Registry, such company is
registered with an absolute freehold or leasehold title thereof and none of
the burdens specified in Sections 59, 72 & 73 of the Registration of Title
Act, 1964 effect the same.
<PAGE> 66
(g) No part of the Properties is or has been affected by the
provisions of the Family Law Act, 1981, the Judicial, Separation and Family
Law Reform Act, 1989, the Family Law Act 1995 and the Family Law Divorce Act,
1996.
23. Encumbrances
------------
(a) Apart from a charge in favour of Data Packaging Limited the
Properties are free from any mortgage, debenture, charge, rent charge, lien or
other encumbrance securing the repayment of monies or any other obligation or
liability of any of the Companies or any other party.
(b) The Properties are not subject to any outgoings, other than
commercial rates, water rates and insurance premiums and in the case of
leasehold properties, rent and service charges, and there are no outstanding
arrears in relation to any of the foregoing.
(c) The Properties are not subject to any covenant, restriction,
stipulation or other relevant matter of an onerous or unusual nature which, if
disclosed, would affect the open market value of the Properties.
(d) The Properties are not subject to any adverse estate,
easement, profit-a-prendre, way-leave, licence, grant, restriction or
overriding interest in favour of any third party and none is in the course of
being acquired and there is no agreement or commitment to give or create any
of the foregoing.
(e) The Properties are not subject to any option, right of pre-
emption or right of first refusal in favour of any third party.
(f) There are no disputes affecting any of the Properties which
would restrict or terminate the continued possession, occupation or enjoyment
of any of the Properties or with any adjoining or neighbouring owner in
relation to boundaries, easements, rights or means of access to the
Properties.
(g) The Properties and all developments thereto and thereon
comply with the provisions of the Building Control Act, 1990 and the
regulations made thereunder and the Safety, Health and Welfare at Work
(Construction) Regulations 1995.
24. Planning Matters
----------------
(a) The Properties and all developments thereto and thereon
comply with the provisions of the Planning Acts and all permissions, licences
or consents issued thereunder are unconditional or are subject to conditions
which have been satisfied or are subject to continuing conditions which are
not onerous and all of which have been and are being complied with.
(b) The user of each of the Properties is the permitted user
under the Planning Acts and such user is not of a temporary nature.
(c) There are no agreements with any planning or other competent
authority regulating or restricting the use or development of the Properties.
<PAGE> 67
(d) There are no planning applications relating to the Properties
awaiting the decision of the relevant planning authority or An Bord Pleanala.
(e) The Properties are not affected by any special amenity area
order, preservation order, conservation order or any other order under the
Planning Acts.
25. Statutory and Other Obligations
-------------------------------
(a) Each of the Companies has complied and is complying with all
applicable statutory and local requirements in relation to the Properties
occupied by it, the use thereof, the business carried out thereat and the
employment of persons, plant and equipment therein.
(b) There is no outstanding unobserved obligation in relation to
the Properties necessary to comply with the requirements or recommendations
(whether formal or informal) of any competent authority exercising statutory
or delegated powers.
(c) The Properties are not affected by any notice or order issued
by a competent authority in relation to the Properties to the use thereof and
to the business carried out thereat which has not been fully complied with.
(d) Each of the Companies has obtained all necessary permissions,
licences, consents, certifications and registrations relating to the
Properties occupied by it, the use thereof, the business carried out thereat
and the employment of persons, plant and equipment therein and all such
permissions, licences, consents, certifications and registrations are
unconditional or are subject to conditions which have been satisfied or
subject to continuing conditions which are not onerous and all of which have
been fully complied with and none of the Companies nor any of the Warrantors
is aware of any reason why any of them should be suspended, cancelled or
revoked or not renewed on the same (or substantially the same) terms.
26. Leasehold Properties
--------------------
(a) All leases (which expression includes underleases and tenancy
agreements) under which the Companies (or any of them) holds the Properties
are valid and in full force.
(b) There is no covenant, condition or agreement contained in any
lease under which the Properties are held which is of an unduly onerous or
restrictive nature.
(c) The Companies have paid all rent and performed and observed
all covenants and conditions on the part of the tenant contained in the leases
under which the Properties are held.
(d) There is no outstanding unobserved or unperformed obligation
necessary to comply with any notice or other requirement given by the landlord
or any superior landlord under any lease of the Properties.
(e) There are no (material) subsisting breaches or any (material)
non-performance or observance of any covenant, condition or agreement
<PAGE> 68
contained in any lease under which the Properties are held whether on the part
of the tenant, the landlord or either of their predecessors in title.
(f) All licences, consents and approvals required from the
landlord and any superior landlord under any lease under which the Properties
are held have been obtained and all covenants on the part of the tenant
contained in such licences, consents and approvals have been fully performed
and observed.
(g) No alterations or improvements have been made to the
Properties at the expense of the tenant without all necessary consents and
approvals having been obtained from the landlord and any superior landlord and
all such alterations and improvements are to be disregarded on rent review.
(h) Where the rent reserved by any lease of any of the Properties
is subject to review, all rent review notices have been served within the
requisite time limits and there are no disputes outstanding as to the
settlement of the level of rent.
(i) There is no obligation to re-instate any of the Properties by
removing or dismantling any alteration or improvement made to it by any of the
Companies or any predecessor in title of any of the Companies.
(j) Each of the Companies is a joint insured with the landlord on
all relevant policies of insurance in respect of the Properties occupied by it
and the insurers have waived subrogation rights against each such company.
(k) All the leases to which any of the Companies are a party
contain provisions entitling such company to terminate in the event of the
Properties comprised therein having been damaged or destroyed and not having
been fully reinstated within a period of two years from the date of damage or
destruction.
27. Condition
---------
(a) The buildings and other structures on the Properties are in
good and substantial repair and fit for the purposes for which they are used.
(b) None of the following substances have been used in the
construction of the buildings and other structures on the Properties, namely:-
(c) high alumina cement or concrete, asbestos, woodwool, calcium,
silicate bricks or tiles, calcium chloride cement, sea washed or sea dredged
aggregates or any other material which is known to be inadequate, dangerous,
unstable or otherwise inappropriate for building purposes.
(d) No control waste, household waste, commercial waste,
industrial waste or effluent, toxic or any other deleterious or dangerous
substance is or has been buried or disposed of in the Properties.
(e) None of the Properties has or is affected by any structural
or other defects in the buildings, drains, pipes, wires or services.
(f) None of the Properties are located in an area particularly
susceptible to flooding, subsidence, rising damp, wet or dry rot or any
<PAGE> 69
infestation.
(g) None of the Properties are affected by any past or present
mining activity.
(h) There are no disputes with any neighbouring owner in relation
to boundaries or in relation to any easement or right enjoyed by the
Properties.
(i) The Properties enjoy access and egress over roads abutting
the Properties which have been taken in charge by the local authority.
(j) The Properties are served by water, electricity, gas
utilities and either the pipes, sewers, wires, cables, conduits and other
conducting media serving the Properties connect directly into public mains
without passing through land in the ownership or occupation of the third party
or, if they do not, the facilities, easements or rights necessary for the
enjoyment and present use of the Properties are enjoyed on terms which do not
entitle any person to terminate or curtail the same.
28. Acquisition and Disposal
------------------------
(a) None of the Companies has any existing or contingent
liability in respect of any land or buildings previously owned or occupied by
it or in which it held any interest.
(b) None of the Companies has entered into any agreement to
acquire or dispose of any land or buildings or any interest therein which has
not been completed.
29. Tenancies
---------
Intentionally deleted
(a) The particulars of all lettings (which expression includes
sub-lettings) to which the Properties are subject are set out in Part 3 and 4
of the Fifth Schedule are true and correct.
(b) There is no subsisting material breach or subsisting material
non-observance or non-performance of any covenant, condition or agreement
provided for in any letting and the none of the Companies have refused to
accept rent or made any complaint or objection to the tenant and each tenant
pays its rent and other sums reserved by the letting when due and no
proceedings have been instituted or threatened by any of the Companies against
any tenant.
(c) Apart from the lease to Barnmean Limited there is no
provision in any letting that entitles a tenant to determine its interest
prior to the expiration of the term of the letting and no notice has been
served by any tenant upon any of the Companies and the Companies are not aware
of any intention by any tenant to serve any notice whether pursuant to the
letting, the Landlord and Tenant (Amendment) Act, 1980 or otherwise. So far,
Barnmead Limited has not exercised its option to determine. The pre-emption
rights in Clause 6.7 of the said lease have not been executed.
<PAGE> 70
(d) Any consent necessary for the creation of any letting was
obtained and the conditions thereof (if any) complied with.
(e) Each of the Companies has full details of all works (if any)
carried out by any tenant, and such works (if any) were carried out in
compliance with the requirements (if any) of such company.
(f) There is no tenant of the Properties who has quit the same
and is now entitled to compensation under the provisions of section 46 of the
Landlord and Tenant (Amendment) Act, 1980.
(g) Every letting entitles such of the Companies as is a party
thereto to re-enter the Properties in the case of the bankruptcy or the
winding-up of the tenant as well as for any breach of any of the tenant's
obligations thereunder.
(h) Apart from the lease to Barnmead Limited in relation to any
letting where the term thereof does not exceed two years and eleven months,
the tenant thereof was not in occupation prior to the granting of the letting
and nothing has arisen thereunder or no concessions or agreements have been
made which would entitle any tenant to statutory rights under the provisions
of section 16 of the Landlord and Tenant (Amendment) Act, 1980.
(i) There is no rent review in respect of letting currently under
negotiation or the subject of a reference to either an expert, an arbitrator
or the courts, and the rent review provisions, which provide for an upwards-
only review of rent, do not contain any unusual provisions or concessions
which would entitle the tenant to seek an open market rent less than would
otherwise be the case.
(j) Apart from the lease to Barnmead Limited every letting
(except for those which do not exceed two years and eleven months) contains a
full repairing obligation on the part of the tenant and also an obligation to
reimburse such of the Companies as is a party thereto as landlord for the full
cost of insuring the Properties.
(k) No letting contains any unusual or objectionable covenant or
agreement adverse to the interests of any of the Companies.
30. Environmental Warranties
------------------------
(a) In this Clause unless the context otherwise requires the
following words shall have the following meanings:-
(i) "Environment", includes any land (including without
limitation, soil, surface land and sub surface strata, seabed or river bed
under any water (as referred to below) and any natural or man made structures
) any waters (including without limitation coastal and inland waters, surface
waters, ground water sand water, in pipes, drains or other conduits) and air
(including without limitation air within buildings and other natural or man
made structures above or below ground).
(ii) "Environmental Legislation", means any law relating
to the Environment whether Irish ) Law, European Community Law, or common or
customary law and any order, rule regulation, directive statutory instrument,
<PAGE> 71
bye-law or other legislative measure thereunder of any jurisdiction
whatsoever.
(iii) "Environmental Matters", mean any matter arising out
of, relating to or resulting from pollution, contamination, protection of the
Environment, human health or safety, health and safety of animal or plant
life, sanitation and any matters relating to actual or threatened emission,
discharges, dissemminations, releases of Hazardous Materials into the
Environment or otherwise arising out of or relating to or resulting from the
manufacture, processing distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.
(iv) "Environmental Permit", means any permit, licence,
approval, consent, registration or other authorisation required by or pursuant
to any applicable Environmental Legislation or relating to Environmental
Matters.
(v) "Hazardous Materials", means any pollutants,
contaminants, radio-active explosive, oxidising, flammable, toxic, harmful,
corrosive, irritant, dangerous, hazardous, infections, carcinogenic,
teratogenic, etiologic or mutagenic substances, materials constituents,
chemicals, preparations or waste (including without limitation petroleum or
any by products of fractions thereof, any form of natural gas, asbestos and
asbestos containing material or any derivations thereof, polychlorinated
biphenls ("PCB") and PCB containing equipment, radon or radio-active elements,
pesticides and defoliants) or any other meanings ascribed to such terms by any
Environmental Legislation).
(vi) "Substance", includes (without limitation) any solid,
liquid, gas, noise or electromagnetic or other radiation.
(b) The Companies have never and to the best of the such
company's knowledge no third party has ever used, generated, manufactured,
treated, stored, emitted, released, discharged or disposed of, under or about
the Properties or transported to or from the Properties any Hazardous
Materials.
(c) Each Company has operated at all times and in compliance (and
at Completion will be compliance) in all respects with Environmental
Legislation or in any notices served on any Company pursuant to such
Environmental Laws.
(d) Each Company has obtained all Environmental Permits requisite
for its operations and all activities which are in full force and effect and
has not been, is not and at Completion shall not be in breach of such
Environmental Permits or any conditions attached thereto. No works or other
investment or will be necessary to serve compliance with or to obtain or
maintain the Environmental Permits and there are no facts or circumstances
indicates that the Environmental Permits would or might lapse or be revoked,
suspended, cancelled, varied, reviewed or not renewed. All Environmental
Permits are transferable to the Purchaser without the consent of any other
person.
(e) Neither the execution nor the performance of this Agreement
will cause any Environmental Permit to be withdrawn or modified
(f)No notice or communication has been received by a Company from any
competent authority or third party alleging that it has been, is or may be in
<PAGE> 72
breach of any Environmental Legislation or any Environmental Permit or the
conditions attached thereto and there are no claims (civil or criminal) or
demonstrative actions, investigations enquiries or proceedings pending or, to
the knowledge of the Warrantor, threatened against any Company that are based
on or related to any Environmental Matters or the failure to have any required
Environmental Permit and there are no facts of which the Company is aware or
ought to be aware which would or may result in any such notice or
communication.
(g) Each Company, after due and careful enquiries on its part,
has not:-
(i) by omission or omission caused, permitted or
contributed in any way to damage to the Environment by pollution,
contamination, release or discharge or omission.
(ii) discharged, emitted, spilled or otherwise caused to
pass into the Environment any Hazardous Materials or other Substance.
(iii) created or allowed any circumstances to exist that
might be harmful to human health or the Environment.
(iv) produced, handled, stored, transported or otherwise
treated or dealt with in any manner whatsoever and whether on the Properties
or otherwise any Hazardous Materials.
(h) No Company has used any waste disposal site or otherwise
disposed of, transported or arranged for the transportation of any Hazardous
Materials or Substances to any place or location.
(i) No Company is aware of any breach of any
Environmental Legislation or any Environmental Permits (or the conditions
attaching thereto) by any third party (including without limitation an
employee, servants, agents or contractors of such Company) or any other
circumstances relating to the Environmental Matters which has resulted or
could result in damage or injury to the Properties or damage or injury to
persons present from time to time on the Properties or to the Environment
generally arising from the Properties.
(j) Full and complete details of all insurance currently or
previously maintained by each Company against any potential claim relating to
Enviromental Matters are set forth in the Disclosure Letter and all premiums
in respect thereof are and at the completion date shall be fully paid. Full
and complete details of all circumstances surrounding any refusal of any
application for such type of insurance are also set forth in the Disclosure
Letter (inlcuding the basis for such refusal).
<PAGE> 73
Part VI
-------
Trading and Contracts
---------------------
31. Liabilities
-----------
None of the Companies has liabilities (actual contingent or otherwise
and whether quantified or not) other than those disclosed in the Accounts save
such liabilities as have been incurred since the Accounting Date in the
ordinary course of business of such company.
32. Prior Transactions
------------------
(a) Since the Accounting Date as regards each of the Companies:-
(b) its business has been carried on in the ordinary and usual
course and so as to maintain the same as a going concern;
(c) there has been no deterioration in either its turnover or
financial or trading position and it has not disposed of any assets (including
knowhow) or assumed or incurred any material liabilities (including contingent
liabilities) otherwise than in the ordinary course of carrying on its business
and at the fair market value thereof;
(d) its business has not been materially and adversely affected
by the loss of any important customer or source of supply or labour dispute or
by any abnormal factor and after making due and careful enquiries the
Warrantor is not aware of any facts likely to affect such company in such
manner;
(e) no bonuses dividends or other distributions have been
declared paid or made or deemed to have been declared paid or made on or by
reference to its issued or allotted share capital;
(f) it has not disbursed any cash except in the ordinary course
of its business and all amounts received by it have been deposited with its
bankers and appear in the appropriate books of account;
(g) it has not made any loan to any party or paid any dividend or
other distribution;
(h) it has not made or received any surrender relating to group
relief;
(i) it has not entered into any capital transactions as vendor,
purchaser, lessor or lessee or otherwise undertaken any material commitments
on its capital account in either case involving any capital expenditure in
excess of IR 25,000 on each individual item or commitment;
(j) it has not made any borrowings or acquired any assets on
lease or by hire purchase or repaid or become liable to repay any loan or
indebtedness in advance of its stated maturity;
<PAGE> 74
(k) it has not, knowingly done anything to prejudice its
goodwill;
(l) it has paid its creditors in accordance with their respective
credit terms and there are no amounts due by it which have been due for more
than sixteen weeks;
(m) it has not issued or given or agreed to issue or give any
shares, options over shares or securities convertible to shares;
(n) it has not altered its Memorandum and Articles of Association
or passed or adopted any resolution of its shareholders;
(o) it has not caused or permitted any of its policies of
insurance to lapse or become voidable or done or omitted to do anything
whereby it might be denied indemnity in respect of any actual potential or
pending claim;
(p) it has not made any alteration in the rates of pay, bonuses,
benefits, pensions or other terms of employment or engagement of any employee,
ex-employee, consultant, contractor or director.
33. Compliance with Statutory Requirements
(a) All statutory municipal and other like requirements
applicable to the business or affairs of each of the Companies (whether the
same shall be in or of Ireland or in or of any other country whatsoever) have
been complied in all material respects by each of the Companies and there are
no such requirements outstanding.
34. Each of the Companies has at all times, carried on its business and
conducted its affairs in all material respects in accordance with its
Memorandum and Articles of Association for the time being in force and any
other documents to which it is or has been a party.
35. No Unusual Contracts, etc
-------------------------
(a) None of Companies is party to any contract entered into
otherwise than in the ordinary and usual course of business or any contract of
an onerous or unusual or long term nature or containing any onerous unusual or
other provision material for disclosure to an intending purchaser of the
Shares including but not limited to any contract for the supply of goods or
services at a price different from that reasonably obtainable on any arms'
length basis.
(b) None of the Companies nor any other party to any such
agreement, arrangement or obligation is in material breach of or default under
any agreement, arrangement or other obligation binding on it or any of its
assets and no threat or claim of such breach or default has been made against
any of the Companies; and to the best of the knowledge information and belief
of the Warrantor there are no circumstances likely to give rise to such
default or breach.
(c) No tender, quotation or offer issued or made at any time by
<PAGE> 75
any of the Companies is or will become capable of giving rise to a contract by
an order or acceptance by another party or parties, save in the ordinary
course of business and on terms calculated to yield a gross profit margin
consistent with the prudent carrying on of the business of each of the
Companies.
36. No Guarantees or Capital Commitments, etc
-----------------------------------------
No guarantees, indemnities or undertakings, capital commitments or
unusual liabilities have been made given entered into or incurred by or on
behalf of any of the Companies whether in respect of the liabilities of the
Warrantor or any company owned or controlled by it and there are no
outstanding agreements or arrangements to give, make, enter into or incur any
of the same.
37. Customer Relations
------------------
None of the Companies has any dispute in respect of a material amount
with any of its customers with regard to alleged defective goods or negligent
services supplied or rendered by it.
38. Product Liability
-----------------
(a) None of the Companies has manufactured, supplied or sold any
products which are or were, or will become, in any material respect faulty or
defective or which does not comply in any material respect with any warranties
or representations expressly or impliedly made by any of the Companies or with
all applicable regulations standards and requirements in respect thereof.
(b) None of the Companies is subject to any liability or
obligation (save as may be implied by law) to service repair maintain take
back or otherwise do or not do anything in respect of any products that have
been delivered by it prior to Completion.
(c) There has not within a period of six years prior to the date
hereof been any product liability claim against any of the Companies nor is
there any such claim outstanding pending or threatened against any of the
Companies and the Warrantors are not aware of any circumstances likely to give
rise to such a claim being made against any of the Companies.
39. Purchases and Sales
-------------------
(a) Neither more than 15% of the aggregate amount of all the
purchases, nor more than 10% of the aggregate amount of all the sales of any
of the Companies are obtained or made from or to the same supplier or customer
(including any person, firm or company in any way connected with such supplier
or customer) nor is any material source of supply to, or any material outlet
for the sales of any of the Companies in jeopardy or likely to be in jeopardy.
(b) During the period of two years ending on the Accounting Date,
the business of each of the Companies has not been adversely affected by the
loss of any important customer or source of supply or by any abnormal factor
<PAGE> 76
and the Warrantors do not know of any facts likely to affect any of the
Companies in such manner.
40. No Litigation or Default in Obligation
--------------------------------------
(a) None of the Companies nor any person for whose acts or
defaults it is or may be vicariously liable is engaged in or threatened with
any litigation or arbitration affecting any of the Companies and neither to
the best of the knowledge and belief of the Warrantor is any such litigation
or arbitration pending or threatened and further none of the Companies nor any
of its officers is in the course of being prosecuted for any criminal offence
and the Warrantor are not aware of any circumstances likely to lead to such
litigation arbitration or prosecution and none of the Companies are in default
in respect of any material obligation whether contractual statutory or
municipal.
(b) Neither the Warrantor nor any of the Companies nor, to the
best knowledge, information and belief of the Warrantor, any other person is
engaged in or threatened with any litigation or arbitration seeking to
prohibit, or the effect of which would be to prohibit, the consummation of the
transactions contemplated by the within Agreement (or any agreement relating
thereto) in accordance with its terms or to obtain damages in respect thereto.
(c) None of the Companies is in default with respect to any of
the duties or obligations imposed on it by the Factories Act, 1955, the Safety
in Industry Act, 1980, the Office Premises Act, 1958, the Industrial Training
Act, 1967, the Dangerous Substances Acts, 1972-1979, the Labour Services Act,
1989 or any other statute or enforceable regulation affecting any of the
Companies, its business or the conduct thereof.
41. Legal Compliance
----------------
None of the Companies has done or omitted to do any act or thing
which is in breach of or contrary to any law, statute or regulation materially
affecting its business and to which it is subject whether in Ireland or
elsewhere and none of the Companies nor any of the officers or employees of
any of the Companies is in material default under any such law, statute, or
regulation or under any award, judgement or order of any court or tribunal of
Ireland or of any foreign country having jurisdiction over any of the
Companies or any assets or over any of such officers or employees.
42. Powers of Attorney
------------------
(a) None of the Companies has delegated any powers under a power
of attorney which remains in effect.
(b) There are not outstanding any authorities (express or
implied) by which any person may enter into any contract or commitment to do
anything on behalf of any of the Companies.
(c) None of the Companies has given to any person any power of
attorney or other authority (express, implied or ostensible) which is still
outstanding.
<PAGE> 77
43. Name of Business
----------------
None of the Companies uses on its letterhead books or vehicles or
otherwise carry on business under any name other than its corporate name.
44. Competition
-----------
(a) None of the Companies is a party to or concerned in any
agreement, practice or arrangement which is registered or notifiable under or
contravenes or is invalidated (in whole or in part) by the provisions of the
Competition Acts, 1991 to 1996 and no order has been made thereunder against
any of the Companies.
(b) None of the Companies is nor has it been, party to or
concerned in any agreement, decision or practice prohibited by Articles 85 or
86 of the Treaty of Rome, or which contravenes any anti-trust, anti-monopoly
or anti-cartel legislation or regulations of Ireland or of the European
Community, nor has any of the Companies made any application to the Commission
of the European Communities for a declaration of inapplicability or for
negative clearance in respect of any agreement, decision or practice, nor is
any of the Companies abusing, nor has it abused, a dominant position.
(c) None of the Companies has given any covenants limiting or
excluding its right to do business and/or compete in any area or field with
any other person.
45. Permits
-------
(a) Each of the Companies has all material permits, licenses and
authorities necessary for the carrying on of its business and is not in breach
of any condition of any such permit, licence or authority breach of which
would be likely to have a material adverse effect on its business.
46. Agents and Distributors and Joint Ventures
------------------------------------------
True and complete particulars of each agency or distributors
contract, joint venture, consortium, partnership or other unincorporated
association or other agreement whatsoever entered into by each of the
Companies relating in any way to its business and subsisting at the date
hereof have been disclosed to the Purchaser and are referred to or contained
in the Disclosure Letter and none of the Companies has received any notice
purporting to terminate or terminating such contracts and none of the
Companies is aware of any circumstances likely to give rise to any
termination. None of the Companies is nor has it agreed to become, a party to
any arrangement or agreement for the sharing of commissions or other income.
47. Data Protection
---------------
(a) Each of the Companies has duly complied with all relevant
requirements of the Data Protection Act, 1988 insofar as they apply to such
company.
<PAGE> 78
(b) None of the Companies has received any notice or allegation
pursuant to the provisions of that Act either from the Data Protection
Commissioner or any data subject or any claim for compensation under or
pursuant to the provisions of that Act nor are the Warrantors aware of any
circumstances likely to give rise to any such notice, allegation or claim
being served on any of the Companies.
48. Arms Length Contracts
---------------------
None of the Companies is a party to nor has its profits or financial
position during the five years prior to the date of this Agreement been
affected by any contract or arrangement which is not of an entirely arms-
length nature.
49. Management Reports
------------------
There have been no reports commissioned by or on behalf of any of the
Companies concerning any of those Companies by financial or management
consultants within the period of one year prior to the date of this Agreement.
50. Agencies
--------
There are no licences, distributorship agreements, industrial
properties rights, commission or other agencies or other appointments
whatsoever in the names of the Warrantor or any member of Reunion Group or any
of them or in the name of a nominee for them or any of them which appointment
licence agency or agreement is related to the business carried on by each of
the Companies with its customers and suppliers.
51. Management Controls
-------------------
None of the Companies has entered into any management contract in
respect of the Properties and to the extent that it has so entered a contract,
such contract shall have been terminated at completion.
Part VII
--------
Employees
---------
52. Service Agreements
------------------
There are not in existence any service agreements with directors or
employees of any of the Companies which cannot be terminated by three months
notice or less or (where not reduced in writing) by reasonable notice without
giving rise to any claim for damages or compensation (other than the statutory
redundancy payment or statutory compensation for unfair dismissals).
<PAGE> 79
53. Pensions
--------
(a) The information set out in the Disclosure Letter, comprises
full and accurate disclosure in all material respects of all retirement,
death, superannuation and pension benefits and schemes actually or
contingently agreed, or due, or accrued, or proposed in respect of all of the
present and former employees of each of the Companies (all such schemes and
benefits being hereafter called the "Pension Schemes").
(b) There are no gratuitous payments, pensions, or benefits
payable, promised, undertaken or being paid by any of the Companies to any
directors, consultants, employees or former directors consultants or employees
of any of the Companies.
(c) None of the Companies nor any of the Warrantors:-
(i) has given any undertaking or assurance (whether
legally enforceable or not) to any employee or to any widow, child or
dependant of any employee as to the continuance, introduction, improvement or
increase of any benefit of a kind described in paragraph (b) above; or
(ii) is paying or has in the last three years paid any
benefit of the kind described in paragraph (b) above to any employee or the
widow, child or dependant of any employee.
(d) The Pension Schemes have been registered pursuant to the
provisions of the Pensions Act, 1990.
(e) The Pension Schemes are exempt approved schemes within the
meaning of Section 774 of the Taxes Consolidation Act, 1997 and comply with
and have at all times and in all material respects been administered in
accordance with all applicable laws, regulations and requirements (including
those of the Revenue Commissioners and of trust law) and none of the
Warrantors are aware of any reason why such exempt status should or could be
withdrawn.
(f) True copies of all of the Definitive and Interim Trust Deeds
and Rules, and all material Explanatory Booklets and Announcements relating to
the Pension Schemes have been delivered to the Purchaser and copies thereof
are contained in the Disclosure Letter, and none of the Companies has any
obligation to any employee or former employee in relation to death in service,
pension, superannuation benefits save as provided in the said Deeds, Rules,
Booklets and Announcements.
(g) The Disclosure Letter contains a true copy of the latest
Trustees reports and actuarial valuations for such Pension Schemes as are
defined benefit schemes (as defined in 5.2 Pension Act, 1990).
(h) All benefits payable under the Pensions Schemes on the death
of any person while in employment to which the Pension Schemes relate are
insured fully with an insurance company.
(i) All contributions and insurance premiums relating to the
Pension Schemes which have fallen due for payment have been paid and no such
amounts for which each of the Companies is or may become liable (whether
<PAGE> 80
wholly or in part) have been incurred but not paid and in the case of a
Pension Scheme which is a defined benefit scheme, contributions have been and
are currently paid in accordance with the actuarial valuations.
(j) Each of the Companies:-
(i) has been admitted to participation in the Pension
Schemes on the same terms as apply to all other employers participating in the
Schemes;
(ii) has in all material respects observed and performed
those provisions of the Pension Schemes which apply to it;
(iii) may terminate its liability to contribute to the
Pension Schemes without notice, without the consent of any person and without
further payment;
(iv) has at all material times held or been named in a
contracting-out certificate referable to the Pensions Scheme.
(k) The trustees of the Pension Scheme are not engaged in any
litigation or arbitration proceedings and so far as the Warrantors are aware
no litigation or arbitration proceedings are pending or threatened by or
against the trustees of the Pension Scheme and there are no facts likely to
give rise to any litigation or arbitration.
(l) Each person who is or was eligible to join the Pension
Schemes was invited to join the Pension Schemes when first eligible to do so
and has been admitted to membership in accordance with the terms of the
Pension Schemes.
54. Amounts due to Directors
------------------------
Save as set forth in the Accounts there are no amounts owing to any
present or former directors of any of the Companies other than remuneration
agreed due or for reimbursement of business expenses properly incurred.
55. Non-Deductible Payments to Employees
------------------------------------
Save to the extent (if any) to which provision or allowance has been
made in the Accounts none of the Companies has made or agreed to make any
payment to or provided or agreed to provide any benefit for any present or
former officer or employee which is not allowable as a deduction for the
purposes of taxation.
56. Breach of Contract, etc
-----------------------
No liability has been incurred by any of the Companies for breach of
any contract of service for redundancy payment or for compensation for
wrongful or unfair dismissal or for failure to comply with any order for the
reinstatement or re-engagement of any employee and no gratuitous payment has
been made or promised by any of the Companies in connection with the
termination or proposed termination of the employment of any present or former
<PAGE> 81
director or employee.
57. Trade Disputes
--------------
None of the Companies is involved in any industrial or trade dispute
or any dispute or negotiation regarding a claim of material importance with
any trade union or organisation or body of employees or any dispute arising
out of or affected by or otherwise relating to the provisions of any
employment legislation applicable in Ireland and there are no agreements or
other arrangements (whether or not legally binding) between any of the
Companies and any trade union or other body representing employees.
58. Employee Share Schemes
----------------------
None of the Companies has in existence nor is it proposing to
introduce any share incentive scheme share option scheme or profit sharing
scheme for all or any part of its directors or employees.
59. Statutory Obligations
---------------------
(a) Each of the Companies has in relation to each of its
employees (and so far as is relevant to each of its former employees):-
(b) complied in all material respects with all obligations
imposed on it by any statutory provision or regulation and codes of conduct
relevant to the relations between it and its employees or any recognised trade
union and has maintained adequate and suitable records regarding the service
of each of its employees; and
(c) complied in all material respects with all collective
agreements for the time being having effect as regards such relations or the
conditions of service of its employees;
(d) complied in all material respects with the Redundancy
Payments Acts, 1967-1991, the Minimum Notice and Terms of Employment Acts,
1973 - 1991, the Organisation of Working Time Act 1997, the Anti-
Discrimination (Pay) Act, 1974, the Protection of Young Persons (Employment)
Act, 1996, the Unfair Dismissals Acts, 1977 to 1993, the Protection of
Employment Act, 1977, the Employment Equality Act, 1977, the European
Communities (Safeguarding of Rights of Employees on Transfer of Undertakings)
Regulations 1980, the Maternity Protection of Employees Act, 1981 and 1991,
the Pensions Act, 1990, the European Communities (Protection of Workers)
(Exposure to Noise) Regulations 1990, the Payment of Wages Act, 1991, the
Worker Protection (Regular Part Time Employees) Act, 1991, the Industrial
Training (Apprenticeship Levy) Act, 1994, the Terms of Employment
(Information) Act, 1994, the Maternity Protection Act, 1994 and the Adoptive
Leave Act, 1995.
60. Employee Relations
------------------
Each of the Companies enjoys a good relationship with its employees
and no such employee in receipt of a salary at a basic rate in excess of
<PAGE> 82
IR 15,000 per annum has advised such company formally or informally that he is
terminating or considering terminating his employment with such company and
the Warrantors are not aware of any circumstances likely to give rise to such
termination and further none of the Companies has a dispute with any of its
employees of a material nature.
61. Full Time Employees
-------------------
To the best knowledge information and belief of the Warrantor, all
persons in receipt of income at a basic rate in excess of IR 15,000 per annum
who have during the period since the Accounting Date habitually or normally
carried out duties of a full time nature on behalf of any of the Companies in
connection with its business and affairs shall at Completion be employees of
each of the Companies and at Completion no such person shall be bound by any
contract (whether of employment or otherwise) to carry out duties for or on
behalf of the Warrantor or any company controlled by it.
62. Changes in Terms
----------------
No change has been made since the Accounting Date by any of the
Companies in the rate or basis of the emoluments or other terms of any
contract of service, contract for services or otherwise of any directors or
employees of any of the Companies who at any time since the Accounting Date
were in receipt of emoluments at the rate of IR 15,000 per annum or more.
63. Particulars
-----------
True and complete particulars of the total numbers of each of the
Companies's full time and part time employees as at the Accounting Date, their
dates of commencement of employment or appointment to office, and terms and
conditions of their employment including their remuneration and other benefits
have been disclosed to the Purchaser and are referred to or contained in the
Disclosure Letter and there has been no material change in such numbers since
the Accounting Date.
64. No Contractual Obligations
--------------------------
None of the Companies is under any contractual or other obligation to
increase the rates of remuneration of or make any bonus or incentive or other
similar payment to any of its officers or employees at any future date.
65. Recognition of Unions
---------------------
None of the Companies has entered into any recognition agreement with
a trade union nor has it done any act which might be construed as recognition.
<PAGE> 83
Part VIII
---------
Corporate & General
-------------------
66. Directors and Secretary
-----------------------
The Directors and Secretary of each of the Companies are the persons
listed as such in the Fourth Schedule to the within Agreement.
67. No Governing Directors
----------------------
There are no permanent or governing directors of each of the
Companies and none of the Companies is under any liability to pay any sum
whatsoever to any former director or governing director.
68. Documents
---------
All title deeds relating to the properties/assets of each of the
Companies and an executed copy of all agreements to which any of the Companies
is a party, and the original copies of all other documents which are owned by
or ought to be in the possession of any of the Companies are in its
possession.
69. Associated Companies
--------------------
None of the Companies directly or indirectly hold shares or any
interest in any other body corporate.
70. Branches
--------
None of the Companies has outside Ireland any branch agency or place
of business, or any permanent establishment (as that expression is defined in
the relative double taxation relief orders current at the date of this
Agreement).
71. No Issues or Options
--------------------
Save as disclosed in the Accounts none of the Companies has issued
any shares or agreed to give any option in respect of any shares nor issued
nor agreed to give any option in respect of any debenture or other security
and there are outstanding no options in respect of any such shares debentures
or securities.
72. Commissions
-----------
No person is entitled to receive from any of the Companies any
finders fee, brokerage or other commission in connection with the sale and
<PAGE> 84
purchase of the Shares under this Agreement.
73. Execution of Agreement
----------------------
(a) Each of the Companies and the Warrantors have full power and
authority to enter into this Agreement and into all Agreements and documents
provided for herein and this Agreement and such other agreements and documents
will when executed constitute binding obligations on each of the Companies and
the Warrantors in accordance with their terms.
(b) All necessary consents under the Mergers Takeovers &
Monopolies (Control) Act, 1978 (as amended), the Competition Act, 1991 and
other consents requirements and conditions in relation to the issue and
transfer of shares, the borrowing and lending of and by each of the Companies
and the operations of each of the Companies have been duly obtained and
complied with and are in full force and effect.
(c) The registers of members, directors and charges maintained by
each of the Companies accurately record all of the information intended or
purported to be recorded therein, and are accurate, comprehensive and up to
date in all respects.
74. Effect of Agreement
-------------------
(a) The making or implementation of this Agreement will not:-
(b) cause any lease, tenancy, licence, concession, grant or
agreement of any nature whatsoever to which any of the Companies is a party to
be or become liable to be avoided revoked or otherwise affected in any
material way;
(c) (without prejudice to the generality of the foregoing) impose
upon any of the Companies any penalty cost charge expense or obligation of any
nature (including without limitation any obligation to sell or purchase shares
in any company);
(d) result in the creation, imposition, crystallisation or
enforcement of any encumbrance whatsoever of any of the assets of any of the
Companies; or
(e) result in any present or future indebtedness of any of the
Companies becoming due or capable of being declared due and payable prior to
its stated maturity.
75. Returns Up-to-Date
------------------
(a) All returns particulars resolutions and other documents
required to be filed or to be delivered on behalf of any of the Companies with
or to the Registrar of Companies of Ireland or any other applicable
jurisdiction or with or to any other public office, local authority or
otherwise, have been correctly and properly made up and so filed or delivered
within the period prescribed.
<PAGE> 85
(b) All charges in favour of each of the Companies have (if
appropriate) been registered in accordance with the provisions of the
Companies Acts, 1963 - 1990.
76. Records
-------
(a) All accounts books ledgers financial and other material
records of whatsoever kind of each of the Companies have at the date hereof
been fully properly and accurately kept and completed and there are no
material inaccuracies or discrepancies of any kind contained or reflected
therein or in any of them and at the date hereof they give and reflect a true
and fair view of the financial contractual and trading position of each of the
Companies and of its plant, machinery, fixed and current assets and
liabilities (actual and contingent), debtors and creditors, stock-in-trade and
work-in-progress.
(b) None of the records, details or information relating to the
business of any of the Companies is recorded, monitored or in any manner
dependent in whole or in part on any electronic mechanical or photographic
process (whether computerised or not) which is not under the exclusive
ownership and direction of each of the Companies.
77. Memorandum and Articles of Association
--------------------------------------
The copy of the Memorandum and Articles of Association of each of the
Companies which has been supplied to the Purchaser and its advisers on or
prior to the date hereof is a true copy and accurate and complete in all
respects annexing or embodying all alterations which have been made up to the
date hereof.
78. Intentionally Deleted.
79. Insolvency
----------
(a) No order has been made or petition presented or resolution
passed for the winding up of any of the Companies and there are no grounds on
which any such order or petition could be made or presented and no such
resolution is contemplated by the members or any of them.
(b) No distress, execution or other process has been levied on
any of the assets of any of the Companies, nor has any of them stopped payment
or become insolvent or unable to pay its debts for the purposes of Section 214
of the Companies Act, 1963.
(c) No power to appoint a receiver or administrative Receiver has
been exercised or has arisen in respect of the business or any of the assets
of any of the Companies and there is no unfulfilled or unsatisfied judgement
or Court order outstanding against any of them.
<PAGE> 86
80. Investigations
--------------
There are not pending, or in existence, any investigations or
enquiries by, or on behalf of, any governmental or other body in respect of
the affairs of any of the Companies.
81. Attachment of Defaulters Funds
------------------------------
No notice of attachment has been served on any of the Companies nor
in relation to any funds of any of the Companies under Section 73(2) of the
Finance Act, 1988.
82. Compliance with the Companies Act, 1990
---------------------------------------
(a) None of the Companies has:-
(b) had its affairs investigated pursuant to Section 7 or Section
8 or Section 9 of the 1990 Act nor has there been any investigation of the
ownership of the shares of any of the Companies pursuant to Sections 14 and 15
of the 1990 Act nor has there been a direction made under Section 16 of the
1990 Act nor an investigation pursuant to Section 66 of the 1990 Act;
(c) entered into any arrangement in breach of Section 28 or
Section 29 of the 1990 Act;
(d) made any loans or quasi-loans (within the meaning of Section
25 of the 1990 Act), entered into any credit transactions as creditor or
entered into any guarantee or indemnity or provided any security in connection
with a loan, quasi-loan or credit transaction in breach of Section 31 of the
1990 Act;
(e) been and is not related to any other company for the purpose
of Section 140 of the 1990 Act and is not and will not at any time be liable
to be subject to an order made under that Section by virtue of any act
(whether of commission or omission) that occurred prior to Completion;
(f) had a notice served on it by its auditors pursuant to Section
185 or 194 of the 1990 Act;
(g) been struck-off and subsequently restored to the Register
pursuant to the provisions of Section 311 (a) of the 1963 Act;
(h) entered into any transaction or arrangement, particulars
whereof would, pursuant to Section 41 of the 1990 Act, require to be contained
in the accounts prepared by such company;
(i) purchased or redeemed its own shares or those of its holding
company or created treasury shares pursuant to the provisions of Part XI of
the 1990 Act.
<PAGE> 87
83. Conditions Precedent Fulfilled
------------------------------
At Completion each of the conditions precedent to the within
Agreement as set out in Clause 2.1 shall have been duly fulfilled in
accordance with its terms.
84. Title
-----
The Warrantor is the sole registered and beneficial owner free from
encumbrances of all of the Shares specified opposite its name in the First
Schedule to the Agreement (the "RII Shares") and is absolutely entitled to all
dividends, proceeds, interests, voting and other rights payable thereon and in
respect thereof and attaching thereto. None of the RII Shares are subject to
any current or pending claim or litigation as to their title or ownership. No
person or persons other than the Warrantor (in respect of such of the Shares
set opposite his/her name in the First Schedule to the Agreement) has any
right, title, interest or estate to or in any of such RII Shares or their
proceeds. No pledge, mortgage, equitable deposit, charge or other security
interest exists or has been created or is in course of being created over any
of the RII Shares or any rights attaching thereto. No person has any option
over any of the RII Shares.
Part IX
-------
Taxation Warranties
-------------------
85. General
-------
At Completion, all Taxation for which each of the Companies is liable
will if and insofar as such Taxation or other sums ought to be paid prior to
or on Completion, have been paid at or before Completion and the Companies
will not have any liability, in respect of Taxation falling due for payment on
or prior to Completion.
86. Agreements to Indemnify
-----------------------
None of the Companies have entered into any financing, leasing or
other agreement in which or in connection with which it has indemnified any
other party against any claim, loss or other liability, arising from any
change in tax legislation or in the interpretation of tax legislation.
87. Accounting and Taxation Treatments
----------------------------------
There are set out in the Disclosure Letter full particulars of all
differences between the accounting and taxation treatments of all items in the
Accounts.
<PAGE> 88
88. Employee Share Schemes
----------------------
(a) None of the Companies operates nor has at any time operated
any share option scheme, profit sharing scheme or other employee share scheme.
[Save for the schemes details of which are set out in the Disclosure Letter.]
(b) [The share option scheme, details of which are set out in the
Disclosure Letter, is an approved scheme for the purposes [Schedule 32,
paragraph 7 (1) of the Taxes Consolidation Act, 1997], [and no circumstances
exist which would lead the Revenue Commissioners to withdraw approval of such
scheme or to contend that any of the Companies is not a qualifying company
carrying on a specified trade].]
(c) The profit sharing scheme, details of which are set out in
the Disclosure Letter, is an approved scheme for the purposes of Part 17,
Chapter 1 of the Taxes Consolidation Act, 1997 and no circumstances exist
which would lead the Revenue Commissioners to withdraw approval of such
scheme.
(d) None of the employees of any of the Companies have benefited
from the provisions of Section 479 of the Taxes Consolidation Act, 1997. If
the employees of any of the Companies have benefited from Section 479 of the
Taxes Consolidation Act, 1997 no circumstance exists in relation to any of the
Companies which would lead to the withdrawal of the relief.
89. Domicile and Residence
----------------------
None of the Companies has been at any time, for Taxation purposes,
resident in any jurisdiction other than Ireland nor have they been at any time
managed or controlled in or from any country other than Ireland and none of
the Companies has at any time established a branch or carried on any trade in
any other country.
90. Secondary Liability
-------------------
No act or transaction has been effected in consequence of which any
of the Companies is or may be liable for any Taxation primarily chargeable
against some other person.
91. PAYE/Social Welfare
-------------------
Each of the Companies is registered for the purposes of regulations
made under Section 986 of the Taxes Consolidation Act, 1997 and has complied
with and made payments due under such regulations and is not liable to any
abnormal or non-routine payment or any forfeiture or penalty or to the
operation of any penal provisions due to non-compliance with the said
regulations.
92. Compliance and Records
----------------------
Each of the Companies has complied in all respects with the Social
<PAGE> 89
Welfare Consolidation Act 1993, the Health Contributions Act, 1979, Youth
Employment Agency Act, 1981, and any Regulations made under any such Acts and
has maintained full complete, correct and up to date records for the purposes
thereof and has not committed any offence Part VI, Chapter 4 of the Social
Welfare Consolidation Act, 1993 and is not liable for any abnormal or non-
routine payment or any forfeiture or penalty or for the operation of any penal
provisions due to non-compliance with the said Acts and/or Regulations.
93. Intentionally Deleted
94. Treatment of Premiums as Rental Income
--------------------------------------
None of the Companies has effected or entered into any act,
transaction or arrangement of any nature whereby any of the Companies has
incurred or may hereafter incur any liability under or by virtue of any of
Sections 98, 99, 100 and 103 of the Taxes Consolidation Act, 1997.
95. Use of Machinery and Plant and Industrial Buildings
---------------------------------------------------
Any machinery or plant provided for use for the purposes of the trade
of each of the Companies after 1 April 1990 is used wholly and exclusively for
the purposes of the trade of each of the Companies. (Section 283 and 284 of
the Taxes Consolidation Act, 1997). On the sale of any machinery and plant at
the value thereof shown, no balancing charge will be incurred. The Companies
have claimed writing down allowance under Section 272 of the Taxes
Consolidation Act, 1997 in respect of any industrial building used in the
business of the Companies.
CORPORATION TAX
96. Non-Deductible Payments to Directors and Employees
--------------------------------------------------
None of the Companies has paid nor has it agreed to pay nor is it nor
will it become liable to pay nor be liable to pay remuneration or compensation
for loss of office or make any gratuitous payment or any other payment in
respect of management or other services rendered or to be rendered to any of
the Companies by any of its present or former directors or employees which
will not be deductible in computing the taxable profits of such company.
97. Group Relief
------------
(a) None of the Companies has claimed, surrendered or agreed to
surrender any amount by way of group relief under the provisions of Section
411 to 424 and section 456 of the Taxes Consolidation Act, 1997.
(b) None of the Companies is nor will it at any time in the
future become liable to make a subvention payment or any other payment for an
amount surrendered by any other company under or in connection with the
provisions of Sections 411 to Section 424 and Section 456 of the Taxes
Consolidation Act, 1997.
<PAGE> 90
98. Excess Interest Paid to Directors and Employees
-----------------------------------------------
No interest has been paid to any director or any associate of any
director of the Companies so as to result in any liability to tax falling on
any such company under Section 437 of the Taxes Consolidation Act, 1997.
99. Loans or Write Off of Loans to Shareholders
-------------------------------------------
No loan or advance or payment has been made or consideration given or
transaction effected falling within Sections 438 or 439 of the Taxes
Consolidation Act, 1997.
100. Disallowance of Trading Losses
------------------------------
No change of ownership of any of the Companies has taken place in
circumstances such that Section 401 of the Taxes Consolidation Act, 1997 has
or may be applied to deny relief for a loss or losses incurred by it.
101. Intentionally Deleted
102. Capital Allowances against Leasing Income
-----------------------------------------
The restrictions on the use of the capital allowances for certain
leased assets as set out in Section 403 of the Taxes Consolidation Act, 1997
do not apply to any transactions entered into by any of the Companies.
103. Capital Allowances Net of Grant
-------------------------------
The provisions of Section 317(3) of the Taxes Consolidation Act, 1997
do not apply to any expenditure incurred by any of the Companies.
104. Profits from Land Development
-----------------------------
None of the Companies has entered into any transaction as a result of
which it could be assessed to tax under Part 22 of the Taxes Consolidation
Act, 1997.
105. Losses and Charges against Profits
----------------------------------
The utilisation of losses incurred or charges paid by each of the
Companies is not restricted by Sections 243, 396, 455 or 456 of the Taxes
Consolidation Act, 1997.
106. Limited Partnerships: Relief Restrictions
-----------------------------------------
The provisions of Section 1013 of the Taxes Consolidation Act, 1997
do not and will not apply to any transactions entered into by any of the
Companies.
<PAGE> 91
DIVIDENDS AND DISTRIBUTIONS
107. Advance Corporation Tax ("ACT") and Dividend Withholding Tax ("DWT")
--------------------------------------------------------------------
(a) None of the Companies has any outstanding liability to ACT,
under Chapter 8 of Part 6 of the Taxes Consolidation Act, 1997.
(b) None of the Companies has made an election under Section 165
of the Taxes Consolidation Act, 1997 (group dividends).
(c) None of the Companies has made a surrender under Section 166
of the Taxes Consolidation Act, 1997 (surrender of ACT).
(d) None of the Companies is affected by the provisions of
Section 167 of the Taxes Consolidation Act, 1997 (carrying forward of ACT,
where a change in ownership of company).
(e) None of the Companies is affected by the provisions of
Section 170 of the Taxes Consolidation Act, 1997 (application of ACT, to
interest on certain loans - transitional provisions "Section 84 loans" now
Sections 130-134 Taxes Consolidation Act 1997).
(f) None of the Companies has any outstanding liability to DWT
under Chapter 8A of Part 6 of the Taxes Consolidation Act, 1997
(g) The Companies have complied with the requirements of Chapter
8A of Part 6 and Schedule 2A of the Taxes Consolidation Act, 1997.
108. Acquisition of Own Shares
-------------------------
None of the Companies has acquired any of its own shares pursuant to
the provisions of Chapter 9 of Part 6 of the Taxes Consolidation Act, 1997.
109. Treatment of Expenses as Dividends and Distributions
-----------------------------------------------------
None of the Companies has ever incurred any expense or paid any
amount in consequence of which it has been or could be treated under Section
436 or Section 437 of the Taxes Consolidation Act, 1997 as having made a
distribution.
110. Treatment of Dividends on Certain Preference Shares
---------------------------------------------------
Section 138 of the Taxes Consolidation Act, 1997 does not apply to
any dividend paid by any of the Companies in respect of its preference shares.
111. Section 130 Loans ("Section 84 loans")
--------------------------------------
None of the Companies has ever been a party to a loan arrangement in
respect of which interest or any other amount payable thereunder is capable of
being treated as a distribution pursuant to the provisions of the Taxes
Consolidation Act, 1997. [The tax benefit envisaged at the time of borrowing
<PAGE> 92
in respect of any loan under Sections 130-134 of the Taxes Consolidation Act,
1997 will under present legislation remain undiminished until such loan has
been repaid.]
112. Distributions out of Certain Income
-----------------------------------
(a) None of the Companies has made a distribution after 28
January 1992 out of:-
(b) income derived from exempted trading operations under Section
70, Corporation Tax Act 1976;
(c) export sales relieved income under Section 145 and 146 of the
Taxes Consolidation Act, 1997; or
(d) income from a qualifying patent or a distribution derived
from income arising on a qualifying patent under Taxes Consolidation Act,
1997, Section 234.
113. Dividends from a Non-Resident Subsidiary
----------------------------------------
No reduction or withdrawal of relief has occurred under Section
222(4) of the Taxes Consolidation Act, 1997.
114. Removal of Taxation Free Status from certain Dividends
------------------------------------------------------
None of the Companies beneficially owns nor has it ever beneficially
owned shares to which Section 155 or 489 of the Taxes Consolidation Act, 1997
applies or may have applied.
115. Surcharge on Investment Income
------------------------------
None of the Companies has had in respect of any accounting period any
excess of distributable investment and estate income within the meaning of
Section 434 of the Taxes Consolidation Act, 1997.
COMPLIANCE WITH ADMINISTRATIVE PROCEDURES
116. Interest on Overdue Taxation
----------------------------
None of the Companies is or has at any time since the Accounts Date
been liable to pay interest on overdue Taxation.
117. Payments made under Deduction of Taxation
-----------------------------------------
(a) Each of the Companies has duly complied with the requirements
of Section 239 of the Taxes Consolidation Act, 1997 and with the requirements
of all other provisions relating to the deduction and withholding of Taxation
at source up to the date hereof and all such taxation which has become due,
has been paid.
<PAGE> 93
(b) None of the Companies is liable to any claim in respect of
Taxation due under Section 531 of the Taxes Consolidation Act, 1997, arising
for payments to certain sub-contractors.
118. Late Submission of Returns
--------------------------
No claims to relief connected with any of the Companies have been or
will be restricted by Section 1085 of the Taxes Consolidation Act, 1997.
119. Appeals
-------
There is no appeal by any of the Companies pending against any
assessment to Taxation.
120. Taxation Accounts and Returns
-----------------------------
Each of the Companies has for each accounting period up to and
including the accounting period ending on the Accounts Date, furnished the
relevant tax authority with full and accurate particulars relating to its
affairs, and also has properly and within the prescribed periods of time made
all returns and given or delivered all notices, accounts and information
required for the purpose of Taxation, and all such particulars have been
correct in all material respects and on a proper basis and none are disputed
by the relevant tax authority concerned, and there are no grounds or
circumstances which might cause any such dispute and each of the Companies has
made all claims which would be of benefit to it within the time limits laid
down in the relevant legislation. Each of the Companies has submitted
computations of its taxable profits in respect of all periods up to and
including the year ended on the Accounts Date.
121. Mandatory Reporting Requirements
--------------------------------
Each of the Companies has complied in all respects with the reporting
requirements of Part 38, Chapter 3 of the Taxes Consolidation Act, 1997.
122. Self Assessment Returns
-----------------------
No penalty or surcharge under Section 1084 of the Taxes Consolidation
Act, 1997 has or will become payable.
123. Intentionally Deleted
AVOIDANCE AND EVASION
124. Taxation Evasion
----------------
None of the Companies has committed any act nor made any omission
which might constitute an offence under Section 1078 of the Taxes
Consolidation Act, 1997 (aiding, abetting, assisting, etc. tax evasion).
<PAGE> 94
125. Taxation Avoidance
------------------
None of the Companies has entered into or been a party to any scheme
or arrangement designed partly or wholly for the purpose of avoiding Taxation.
None of the Companies has been involved in any "tax avoidance transaction"
within the meaning of Section 811 of the Taxes Consolidation Act, 1997 and no
provisions of that section apply to it in respect of any event (whether or not
involving any of the Companies) which took place before Completion or in
respect of any series of events (whether or not such events or any of them
involve any of the Companies) taking place partly before Completion and partly
after Completion.
126. Transactions at Arms Length
---------------------------
None of the Companies has acquired or disposed of any asset or
entered into any transaction which was not a bargain at arm's length,
[("Relevant Transaction") save for a Relevant Transaction(s) in respect of
which all Taxation for which such company was or is liable arising therefrom
has been provided for in full, or where due for payment, will have been paid
prior to Completion.]
127. Depreciatory Transactions and Dividend Stripping
------------------------------------------------
No allowable loss which has arisen or which may hereafter arise on
the disposal by each of the Companies of shares in or securities of any
company is liable to be disallowed in whole or in part by virtue of the
application of Section 621 (depreciatory transactions in a group) or Section
622 (dividend stripping) of the Taxes Consolidation Act, 1997, (anti avoidance
provisions).
128. Avoidance of Schedule F Liability
---------------------------------
None of the Companies has entered into or taken any steps, the object
of which is a transaction which comes or might come within Section 817 of the
Taxes Consolidation Act, 1997.
CAPITAL GAINS TAX
129. Rollover Relief
---------------
None of the Companies has made any claim under Section 597 of the
Taxes Consolidation Act, 1997 as respects the consideration for the disposal
of its interest in any assets which are defined in the said Section 597 as
"the "old assets" or under Section 605 of the Taxes Consolidation Act, 1997
(compulsory purchase order relief).
130. Transfers at Undervalue
-----------------------
None of the Companies has made any such transfer as is referred to in
Section 589 of the Taxes Consolidation Act, 1997 or received any asset by way
<PAGE> 95
of gift as mentioned in Section 978 of the Taxes Consolidation Act, 1997.
131. Share for Share Exchange
------------------------
None of the Companies has been a party to or involved in any share
for share exchange nor any scheme of reconstruction or amalgamation such as
are mentioned in Chapter 4 of Part 19 of the Taxes Consolidation Act, 1997 or
Section 615 of the Taxes Consolidation Act, 1997 under which shares or
debentures have been issued or any transfer of assets effected.
132. Receipt of Shares for Transfer of Trade
---------------------------------------
None of the Companies has entered into any of the transactions to
which Part 21 of the Taxes Consolidation Act, 1997 applies or holds or has
disposed of "new assets" under Section 631 of the Taxes Consolidation Act,
1997.
133. Disposal by Liquidators or Mortgagees
-------------------------------------
None of the Companies has any liability by virtue of the provisions
of Section 571 of the Taxes Consolidation Act, 1997.
134. Remittable Profits made Abroad
------------------------------
None of the Companies has made any claim under Section 1005 of the
Taxes Consolidation Act, 1997.
135. Negligible Value Claim
----------------------
There have been no claims under Section 538(2) of the Taxes
Consolidation Act, 1997.
136. Creation of Capital Gains Tax Act Losses
----------------------------------------
None of the Companies has entered into or taken any steps, the object
of which is a transaction which comes within or might come within Section 549
of the Taxes Consolidation Act, 1997.
137. Deferment of Capital Gains Tax
------------------------------
No tax liability has been deferred by any of the Companies under any
provisions of the Part 19 of the Taxes Consolidation Act, 1997 including
Section 563 or 981 of the Taxes Consolidation Act, 1997.
138. Passing Out of Value
--------------------
None of the Companies has been involved in a scheme or arrangement to
which the Taxes Consolidation Act, 1997 Section 543 applies.
<PAGE> 96
139. Group Transactions
------------------
None of the Companies has entered into any transactions to which any
of the provisions of Chapter 1 of Part 20 of the Taxes Consolidation Act,
1997.
STAMP DUTY
140. Mandatory Payment of Stamp Duty
-------------------------------
Each of the Companies has duly complied with and has no liability
under Section 1 of the Stamp Act, 1891, as substituted by the provisions of
Section 94 of the Finance Act, 1991.
141. Instruments Properly Stamped
----------------------------
All instruments in the possession of or under the control of each of
the Companies which attract stamp duty have been properly stamped.
142. Reliefs, Exemptions or Reductions
---------------------------------
(a) No relief, exemption or reduction has been obtained by the
Companies from companies capital duty or stamp duty under Section 72 of the
Finance Act, 1973 (reconstruction or amalgamation) or from stamp duty under
Section 19 of the Finance Act, 1952 (associated company relief) or Section 31
of the Finance Act, 1965 (relief from capital and stamp duty in certain cases)
which:-
(b) has been forfeited, cancelled or withdrawn; or
(c) may be forfeited, cancelled or withdrawn in the future.
143. Liability to Capital Duty and Stamp Duty
----------------------------------------
All capital duty howsoever arising or payable including but not
limited to any such arising or payable on any transaction referred to in
Section 68(1) of the Finance Act, 1973 has been duly and promptly paid by each
of the Companies and there is no outstanding liability therefor or interest
thereon.
144. Penalties
---------
None of the Companies has executed an instrument in respect of which
fines could be imposed on it pursuant to Section 5 of the Stamp Act, 1891 as
substituted by Section 97 of the Finance Act, 1991 (penalties for fraud and
for negligence in the preparation of instruments, etc.).
<PAGE> 97
145. Surcharge
---------
None of the Companies is liable for any penalty imposed by Section
103 of the Finance Act, 1991 (surcharge for undervaluations).
VALUE ADDED TAX
146. Value Added Tax Compliance
--------------------------
(a) Each of the Companies is a registered and taxable person for
the purposes of the Value Added Tax Act, 1972 and has complied in all respects
with such legislation (including the due payment of any sums due) and all
regulations made or notices issued thereunder and has maintained and obtained
full complete correct and up to date records, invoices and other documents (as
the case may be) including, without prejudice to the generality of the
foregoing, monthly control statements, INTRASTAT and VIES returns appropriate
or requisite for the purposes thereof.
(b) None of the Companies is nor has been in arrears with its
payments or returns (including where relevant monthly control statements and
listings) or notifications under the Value Added Tax Act, 1972 or liable to
any abnormal or non-routine payment or any forfeiture or penalty or to the
operation of any penal provisions contained therein.
(c) Each of the Companies has charged and accounted in a timely
manner for value added tax at the appropriate rate in respect of all supplies
of goods and services affected by the Value Added Tax Act, 1972.
147. Membership of a Group for Value Added Tax
-----------------------------------------
(a) No arrangement exists or has existed whereby pursuant to
Section 8(8) of the Value Added Tax Act, 1972 and Regulation 5 of the Value
Added Tax Regulations 1979 (as amended) regarding membership of a group for
value added tax purposes, the business activities of each of the Companies is
or was deemed to be carried on by any other person or the business activities
of any other person is or was deemed to be carried on by any of the Companies.
No notification has been received by any of the Companies from the Revenue
Commissioners under Section 8(8) of the Value Added Tax Act, 1972 including
especially a notification in the absence of a request from the taxable persons
concerned.
148. Security for Value Added Tax
----------------------------
None of the Companies has been required by appropriate fiscal
authorities to give security under the value added tax legislation in Ireland
or elsewhere nor do any circumstances exist which may cause any such fiscal
authority to seek such security.
149. Deferment of Value Added Tax for small traders
----------------------------------------------
None of the Companies has availed of the procedure in Section 58 of
<PAGE> 98
the Finance Act, 1989 whereby a trader may account and make returns for value
added tax purposes other than after each two monthly taxable period.
150. Waiver of Exemption
-------------------
None of the Companies has waived the exemption in respect of any
exempted activity under Section 7 of the Value Added Tax Act, 1972.
151. No Refunds Withheld
-------------------
No circumstances exist whereby a refund of Value Added Tax due to any
of the Companies has been or may be deferred under the provisions of Section
20 (1A) of the Value Added Tax Act, 1972.
152. No Appointments as Agent for Non-residents
------------------------------------------
None of the Companies has received notification from the Revenue
Commissioners under Section 37 of the Value Added Tax Act, 1972.
153. No Appointment of Fiscal Representative
---------------------------------------
None of the Companies has appointed a fiscal representative for Value
Added Tax purposes in any member state of the European Community and none of
the Companies has been appointed as a fiscal representative for a non-
resident.
CAPITAL ACQUISITIONS TAX
154. Liability of Shares
-------------------
There is no unsatisfied liability to Capital Acquisitions Tax
attached or attributable to the Shares and none of such shares are subject to
a charge in favour of the Revenue Commissioners.
155. Reduction of Value of Shares
----------------------------
None of the Companies has entered into or taken any steps the object
of which is a transaction which comes within Section 90 of the Finance Act,
1989 or Section 126 of the Finance Act, 1993.
SPECIAL CATEGORY ACTIVITIES
156. Intentionally Deleted
157. Intentionally Deleted
158. Withdrawal of 10% Relief for certain Activities
-----------------------------------------------
The goods produced by the Companies fall within the definition of
<PAGE> 99
goods regarded as manufactured contained in Section 443 of the Taxes
Consolidation Act, 1997 and the 10% relief has not been withdrawn from any of
the Companies.
159. Restriction of Taxation Incentives on Property Investment
---------------------------------------------------------
None of the Companies has been involved in any property investment
scheme in respect of which the tax incentives on property investment are
restricted by Section 408 of the Taxes Consolidation Act, 1997.
160. Intentionally Deleted
161. Intentionally Deleted
162. Restrictions on BES Relief
--------------------------
None of the Companies nor any of its shareholders is affected by the
restrictions on the business expansion scheme relief which are contained in
Part 16 of the Taxes Consolidation Act, 1997. Barnmead Limited has been at
all times and is entitled to claim BES relief under Part 16 of the Taxes
Consolidation Act, 1997.
163. Intentionally Deleted
PAYE/SOCIAL WELFARE LEVIES
164. Deferment of PAYE
-----------------
None of the Companies has availed of the Income Tax (Employment)
Regulations 1989 (S.I. 58/1989) whereby an employer may make remittances of
PAYE deducted from his employees at longer intervals than the normal
remittance basis.
MISCELLANEOUS
165. Involvement in Specific Activities
----------------------------------
(a) None of the Companies has been a party to or otherwise
involved in any transaction, scheme or arrangement to which any of the
following provisions could apply:-
(b) Intentionally Deleted
(c) Part 28, Chapter 2, Taxes Consolidation Act, 1997 (purchase
and sale of shares by financial concerns);
(d) Part 33, Chapter 1, Taxes Consolidation Act, 1997 (transfer
of assets abroad);
(e) Section 813, Taxes Consolidation Act, 1997 (anti-avoidance
provision relating to arrangements concerning loans and giving of credit);
<PAGE> 100
(f) Section 425, Taxes Consolidation Act, 1997 (Leasing
Contracts; effect on claims for losses of company reconstructions);
(g) Intentionally Deleted
(h) Sections 586 and 587 Taxes Consolidation Act, 1997 (company
reconstruction and share swap);
(i) Section 1001 Taxes Consolidation Act, 1997 (fixed charges on
book debts);
(j) Section 930 Taxes Consolidation Act, 1997 (error or mistake
claims);
(k) Section 400 Taxes Consolidation Act, 1997 (Companies
reconstruction without transfer of ownership);
(l) Section 614 Taxes Consolidation Act, 1997 (Corporation Tax
attributable to chargeable gains; recovery from shareholder);
(m) Section 816 Taxes Consolidation Act, 1997 (Taxation of shares
issued in lieu of cash dividends);
(n) Intentionally Deleted
166. Compliance with Specific Provisions
-----------------------------------
(a) Each of the Companies has complied in all material respects
with the provisions of the following Sections and with all regulations which
have been made by virtue thereof:-
(b) Section 1041 of the Taxes Consolidation Act, 1997 (tax on
rents payable to non-residents);
(c) Section 104 Taxes Consolidation Act, 1997 (tax on rents under
long leases);
(d) Section 980 Taxes Consolidation Act, 1997 (disposals of
certain assets by non-residents) [other than the transaction herein];
(e) Chapter 4, Part 8 Taxes Consolidation Act, 1997 (deposit
interest retention tax);
(f) Intentionally Deleted
<PAGE> 101
FIFTH SCHEDULE
--------------
Property of the Companies
-------------------------
Part I
------
Land and Buildings
------------------
The factory at Mullingar, County Westmeath comprising 5.631 acres of
thereabouts statute measure less the portion thereof more particularly
described in the First Schedule to Deed of Exchange (hereinafter called "the
Deed of Exchange") 30th July 1997 Data Packaging Limited to the County Council
of the County of Westmeath.
Together also with that part of the lands of Clonmore containing 0.540 acres
or thereabouts more particularly described in the Second Schedule to the Deed
of Exchange.
Part II
-------
Particulars of Title and Occupation of Property
-----------------------------------------------
Registered on Folio 10273F County Westmeath in the name of Data Packaging
Limited, together with the strip of land acquired under the Deed of Exchange
which is presently registered on Folio 6285F County Westmeath.
Part III/Part IV
----------------
Tenancies and Lettings
----------------------
Part of the ground floor of the said factory is subject to a lease in favour
of Barnmead Limited. Term 21 years from 4th November 1997, yearly rent IR
5,000 subject to five yearly review dates based on the open market value.
General
-------
A strip of land has been exchanged with Westmeath County Council in exchange
for a strip from the County Council's folio so the Land Registry will
hopefully effect a small mapping adjustment when finalising registration.
Lodging the Exchange was delayed pending the transfer of the property from the
Bermudian to the Irish Company. This has now been done, so both deeds will be
lodged together.
<PAGE> 102
SIXTH SCHEDULE
--------------
The Companies
-------------
Data Packaging Holdings Limited
Data Packaging Limited (Ireland)
Data Packaging Limited (Bermuda)
Barnmead Limited
Name Percentage Shareholding
---- -----------------------
Data Ordinary Shares @ 0.10 each 12,642 80.47% RII Investment
Packaging Group
Holdings Ordinary Shares @ 0.10 each 712 4.53% Enterprise Ireland
Limited Ordinary Shares @ 0.10 each 1,178 7.50% Paul Walsh
Ordinary Shares @ 0.10 each 707 4.50% Donal Lawlor
Ordinary Shares @ 0.10 each 471 3.00% Brendan Murtagh
--------- -------
15,710 100.00% Total
========= =======
Redeemable 3% Preference
Shares @ 0.10 each 410,000 100.00% Total
========= =======
Data Ordinary Shares @ 0.10 each 1 50.00% Data Packaging
Packaging Holdings Limited
Limited Ordinary Shares @ 0.10 each 1 50.00% Paul Walsh (in
(Ireland) trust for Data
Packaging
Holdings Limited)
--------- -------
2 100.00% Total
========= =======
Data Common Shares @ $1.00 each 13,242 100.00% Data Packaging
Packaging ========= ======= Holdings Limited
Limited
(Bermuda)
Barnmead A'Ordinary Shares@ 1.00 each 1,000,000 90.00% Erin Executor &
Limited Trustee Co.
Limited
B'Ordinary Shares@ 1.00 each 111,011 9.99% Data Packaging
Limited (Ireland)
B'Ordinary Shares@ 1.00 each 25 .0025% Paul Walsh
B'Ordinary Shares@ 1.00 each 25 .0025% Donal Lawlor
B'Ordinary Shares@ 1.00 each 25 .0025% Brendan Murtagh
B'Ordinary Shares@ 1.00 each 25 .0025% Paschal Claffey
--------- -------
1,111,111 100.00% Total
========= =======
<PAGE> 103
SEVENTH SCHEDULE
----------------
Particulars of the Directors and Secretary of each of the Companies
-------------------------------------------------------------------
Assistant
Directors Secretary Secretary
--------- --------- ---------
Data Robert Snyder Donal Lawlor None
Packaging Richard Evans
Holdings Paul Walsh
Limited Donal Lawlor
Data Kimball Bradley Donal Lawlor None
Packaging Robert Snyder
Limited Paul Walsh
(Ireland) Donal Lawlor
Data Kimball Bradley Richard Jenkyn None
Packaging Robert Snyder
Limited Paul Walsh
(Bermuda) Donal Lawlor
Barnmead Limited Paul Walsh Donal Lawlor None
Donal Lawlor
Anthony Davis
<PAGE> 104
PRESENT when the common seal of
RII INVESTMENT GROUP
was affixed hereto:-
SIGNED SEALED AND DELIVERED
by PAUL WALSH
in the presence of:
SIGNED SEALED AND DELIVERED
by DONAL LAWLOR
in the presence of:
SIGNED SEALED AND DELIVERED
by BRENDAN MURTAGH
in the presence of:
PRESENT when the common seal of
REUNION INDUSTRIES INC.
was affixed hereto:-
Signed by CIARAN HARRIS
Duly authorised for and on behalf of
TINTARENT LIMITED:
Signed by:
For and on behalf of
ENTERPRISE IRELAND
