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Exhibit 10.1
STOCK PURCHASE AGREEMENT
BETWEEN
INTERWAVE COMMUNICATIONS INTERNATIONAL, LTD.
AND
THE SHAREHOLDERS OF
MICROCELLULAR SYSTEMS LIMITED
JUNE 30, 2000
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TABLE OF CONTENTS
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ARTICLE 1 CONSTRUCTION AND DEFINITIONS . . . . . . . . . . . . . . . . . 1
1.1 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 SALE AND TRANSFER OF SHARES; CLOSING . . . . . . . . . . . . . 6
2.1 SALE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 AGGREGATE PURCHASE PRICE . . . . . . . . . . . . . . . . . . . 6
2.3 PAYMENT OF AGGREGATE PURCHASE PRICE. . . . . . . . . . . . . . 6
2.4 TREATMENT OF OPTIONS . . . . . . . . . . . . . . . . . . . . . 8
2.5 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . 9
2.7 ADJUSTMENT PROCEDURE . . . . . . . . . . . . . . . . . . . . . 10
2.8 EMPLOYEE Retention plan. . . . . . . . . . . . . . . . . . . . 12
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS. . . . . . . . . . . 12
3.1 ORGANIZATION, GOOD STANDING, OWNERSHIP OF SUBSIDIARIES, AND
CONVEYANCE OF OWNERSHIP. . . . . . . . . . . . . . . . . . . . 12
3.2 ENFORCEABILITY; NO CONFLICT. . . . . . . . . . . . . . . . . . 13
3.3 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . 14
3.4 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . 14
3.5 BOOKS AND RECORDS. . . . . . . . . . . . . . . . . . . . . . . 15
3.6 ACCOUNTS RECEIVABLE. . . . . . . . . . . . . . . . . . . . . . 15
3.7 INVENTORY. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.8 NO UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . 15
3.9 NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . 15
3.10 ABSENCE OF CERTAIN CHANGES AND EVENTS. . . . . . . . . . . . . 16
3.11 LEASE ARRANGEMENTS; REAL PROPERTY. . . . . . . . . . . . . . . 16
3.12 CONDITION AND SUFFICIENCY OF TANGIBLE ASSETS . . . . . . . . . 17
3.13 INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . 17
3.14 DATE-LIMITED SOFTWARE; EURO COMPLIANCE . . . . . . . . . . . . 18
3.15 CONTRACTS; NO DEFAULTS . . . . . . . . . . . . . . . . . . . . 18
3.16 CUSTOMERS AND SUPPLIERS. . . . . . . . . . . . . . . . . . . . 20
3.17 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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3.18 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.19 EMPLOYEE BENEFITS. . . . . . . . . . . . . . . . . . . . . . . 21
3.20 LABOR RELATIONS; EMPLOYMENT LAW. . . . . . . . . . . . . . . . 22
3.21 ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS. . . . . . . . . . . 22
3.22 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . 23
3.23 LEGAL PROCEEDINGS; ORDERS. . . . . . . . . . . . . . . . . . . 23
3.24 RELATIONSHIPS WITH RELATED PERSONS . . . . . . . . . . . . . . 24
3.25 BROKERS OR FINDERS . . . . . . . . . . . . . . . . . . . . . . 24
3.26 DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.27 ADDITIONAL REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 24
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . 26
4.1 ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.2 ENFORCEABILITY; NO CONFLICT. . . . . . . . . . . . . . . . . . 27
4.3 PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.4 BROKERS OR FINDERS . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 5 COVENANTS OF SELLERS BEFORE CLOSING. . . . . . . . . . . . . . 28
5.1 ACCESS AND INVESTIGATION . . . . . . . . . . . . . . . . . . . 28
5.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES. . . . . 28
5.3 NEGATIVE COVENANT. . . . . . . . . . . . . . . . . . . . . . . 28
5.4 REQUIRED APPROVALS . . . . . . . . . . . . . . . . . . . . . . 28
5.5 NOTIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS . . . . . . . . . . 29
5.7 NO NEGOTIATION . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 6 COVENANTS OF BUYER BEFORE CLOSING. . . . . . . . . . . . . . . 30
6.1 REQUIRED APPROVALS . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 7 CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. . . . . . 30
7.1 ACCURACY OF REPRESENTATIONS. . . . . . . . . . . . . . . . . . 30
7.2 SELLERS' PERFORMANCE . . . . . . . . . . . . . . . . . . . . . 30
7.3 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.4 ADDITIONAL DOCUMENTS . . . . . . . . . . . . . . . . . . . . . 30
7.5 NO PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . 31
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7.6 NO CLAIM REGARDING EQUITY OWNERSHIP OR SALE PROCEEDS . . . . . 31
7.7 NO PROHIBITION . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 8 CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE . . . . . 31
8.1 ACCURACY OF REPRESENTATIONS. . . . . . . . . . . . . . . . . . 31
8.2 BUYER'S PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . 31
8.3 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.4 ADDITIONAL DOCUMENTS . . . . . . . . . . . . . . . . . . . . . 32
8.5 NO PROHIBITION . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 9 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.1 TERMINATION EVENTS . . . . . . . . . . . . . . . . . . . . . . 32
9.2 EFFECT OF TERMINATION. . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 10 INDEMNIFICATION; REMEDIES. . . . . . . . . . . . . . . . . . . 33
10.1 SURVIVAL, RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE;
WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.2 INDEMNIFICATION BY SELLERS . . . . . . . . . . . . . . . . . . 33
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. . . . . . . . 34
10.4 TIME LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . 35
10.5 LIMITATIONS ON AMOUNT. . . . . . . . . . . . . . . . . . . . . 35
10.6 RIGHT OF SETOFF. . . . . . . . . . . . . . . . . . . . . . . . 36
10.7 PROCEDURE FOR INDEMNIFICATION - DEFENSE OF THIRD-PARTY CLAIMS. 36
ARTICLE 11 TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.1 INDEMNIFICATION OF SELLERS . . . . . . . . . . . . . . . . . . 36
11.2 INDEMNIFICATION OF BUYER . . . . . . . . . . . . . . . . . . . 36
11.3 INDEMNIFICATION PROCESS. . . . . . . . . . . . . . . . . . . . 37
11.4 TIMING OF PAYMENT; CHARACTERIZATION. . . . . . . . . . . . . . 37
11.5 TRANSACTIONAL TAXES. . . . . . . . . . . . . . . . . . . . . . 37
11.6 TAX ELECTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 37
11.7 TAX RECORDS. . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.8 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 12 SELLERS' REPRESENTATIVE. . . . . . . . . . . . . . . . . . . . 38
12.1 APPOINTMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 38
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12.2 LIMITATION ON LIABILITY; INDEMNIFICATION . . . . . . . . . . . 39
12.3 RELIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.4 DELEGATION; SUCCESSOR. . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 13 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 39
13.1 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.2 PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . . 40
13.3 CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . 40
13.4 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.5 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . 42
13.6 SCHEDULES. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.7 ENTIRE AGREEMENT AND MODIFICATION. . . . . . . . . . . . . . . 42
13.8 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD PARTY RIGHTS . . . . . . 42
13.10 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.11 ARBITRATION. . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.12 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . 43
13.13 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . 43
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EXHIBITS
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Exhibit 2.4. . . . . . . . . . . . . . . Option Cancellation and Assumption Agreement
Exhibit 2.6(a)(ii) . . . . . . .Seller's Release (Delivered on Payment After Closing)
Exhibit 2.6(a)(v). . . . . . . . . . . . . . . . . . . . . Non-competition Agreements
Exhibit 2.6(a)(vi) . . . . . . . . . . . . . . . . . . . . . . .Employment Agreements
Exhibit 2.6(a)(viii) . . . . . . . . . . . . . . . . . . Seller's Closing Certificate
Exhibit 2.6(b)(i). . . . . . . . . . . . . . . . . . . . .Buyer's Closing Certificate
Exhibit 2.6(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . Escrow Agreement
Exhibit 2.9 . . . . . . . . . . . . . . . Seller's Release (Delivered After Payment)
Exhibit 7.4(a) . . . . . . . . . . . . . . . . . . . . . .Opinion of Sellers' Counsel
SELLERS' DISCLOSURE SCHEDULE
Part 2.3 . . . . . . . . . . . . . . . . . . . . . Aggregate Purchase Price Breakdown
Part 2.4 . . . . . . . . . . . . . . . . Option Cancellation and Assumption Breakdown
Part 3.1 . . . . . . . . . . Copies of Organizational Documents of Acquired Companies
Part 3.2(b). . . . . . . . . . . . . . . . . Consents and Governmental Authorizations
Part 3.2(c). . . . . . . . . . . . . . . . . . . . . . . . .Exceptions to No Conflict
Part 3.3 . . . . . . . . . . . . . . . . . . . . . . .Fully-Diluted Capital Structure
Part 3.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Accounts Receivable
Part 3.8 . . . . . . . . . . . . . . . . . . .Exceptions to Balance Sheet Liabilities
Part 3.10. . . . . . . . . . . . . . . . . .Exceptions to Ordinary Course of Business
Part 3.11. . . . . . . . . . . . . . . . List of Lease Agreements and Principal Terms
Part 3.13(b) . . . . . . . . . . . . . . .List of Intellectual Property and Royalties
Part 3.13(c) . . . . . . . . . . . . . . . . . . . Exceptions to Free and Clear Title
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Part 3.15(a) . . . . . . . . . . . . . . . . . .List of Contracts and Principal Terms
Part 3.15(b) . . . . . . . . . . . . . . . . Exceptions to Effectiveness of Contracts
Part 3.16. . . . . . . . . . . . . . . . . . . . . . . . .Key Customers and Suppliers
Part 3.17. . . . . . . . . . .List of Insurance Policies, Principal Terms, and Claims
Part 3.18. . . . . . . . . . . . . . . . . . . . . .Exceptions to Tax Representations
Part 3.19(a) . . . . . . . . . . . . .Employee Benefits Plans and Similar Obligations
Part 3.19(b) . . . . . . . . . . . . . . . . .List of all Employees and Other Workers
Part 3.19(d) . . . . . . . . . . . . . . . . . . Exceptions to Employment Obligations
Part 3.20(b) . . . . . . . . . . . . . . . . . . . . Collective Bargaining Agreements
Part 3.21. . . . . . . . . . . . . . . . . . . Exceptions to Environmental Compliance
Part 3.22(a) . . . . . . . . . . . . . . . . . . . . . Exceptions to Legal Compliance
Part 3.22(b) . . . . . . . . . . . . . . . . . . .List of Governmental Authorizations
Part 3.23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Proceedings
Part 3.27. . . . . . . . . . . . . . . . . .Additional Representations and Warranties
BUYER'S SCHEDULES
Schedule 4.2(b). . . . . . . . . . . . . . . Consents and Governmental Authorizations
Schedule 4.2(c). . . . . . . . . . . . . . . . . . . . . . .Exceptions to No Conflict
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "AGREEMENT") is made as of JUNE 30,
2000, by and among INTERWAVE COMMUNICATIONS INTERNATIONAL, LTD., A BERMUDA
corporation ("BUYER"), and the Persons identified on the attached Schedule of
Sellers ("SELLERS").
PRELIMINARY STATEMENT
Sellers desire to sell, and Buyer desires to purchase, all of the
issued shares at closing (the "SHARES") of MICROCELLULAR SYSTEMS LIMITED, a
company organized under the laws of Ireland (the "COMPANY"), on the terms set
forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1
CONSTRUCTION AND DEFINITIONS
1.1 CONSTRUCTION
Any reference in this Agreement to an "Article," "Section" or "Part"
refers to the corresponding Article, Section or Part of this Agreement or the
Disclosure Schedules, unless the context indicates otherwise. The headings
of Articles and Sections are provided for convenience only and should not
affect the construction or interpretation of this Agreement. All words used
in this Agreement should be construed to be of such gender or number as the
circumstances require. The terms "include" or "including" indicate examples
of a foregoing general statement and not a limitation on that general
statement. Any reference to a statute refers to the statute, any amendments
or successor legislation, and all regulations promulgated under or
implementing the statute, as in effect at the relevant time. Any reference
to a Contract or other document as of a given date means the Contract or
other document as amended, supplemented and modified from time to time.
1.2 DEFINITIONS
For the purposes of this Agreement, the following terms and variations
on them have the meanings specified in this Section:
"ACCOUNTS RECEIVABLE" is defined in Section 3.6.
"ACQUIRED COMPANY" means each of the following (i) the Company,
together with its trade representative office in Beijing, China, (ii)
Microcellular Systems Ireland Limited, an Irish corporation, (iii)
Microcellular Systems Limited (U.K.), a United Kingdom corporation, and (iv)
Microcellular Systems USA, Inc., a California corporation (collectively
referred to as the "Acquired Companies").
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"ADJUSTMENT AMOUNT" is defined in Section 2.7(d).
"ADVERSE CONSEQUENCE" means any Liability, loss, damage (including
incidental and consequential damages), claim, cost, deficiency, diminution of
value, or expense (including costs of investigation and defense, penalties,
and reasonable legal fees and costs), whether or not involving a third-party
claim.
"AGGREGATE PURCHASE PRICE" is defined in Section 2.2.
"ANCILLARY AGREEMENTS" is defined in Section 2.6(c).
"BALANCE SHEET" is defined in Section 3.4.
"BEST EFFORTS" means the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to achieve that result
as expeditiously as possible.
"BUYER" is defined in the first paragraph of this Agreement.
"BUYER INDEMNITEES" is defined in Section 10.2.
"CLOSING" means the consummation and completion of the purchase and
sale of the Shares.
"CLOSING BALANCE SHEET" is defined in Section 2.7(b).
"CLOSING DATE" means the date on which the Closing actually takes
place.
"COMPANY" is defined in the Preliminary Statement.
"COMPANY CONTRACT" means any Contract (a) under which an Acquired
Company has or may acquire rights, (b) under which an Acquired Company is or
may become subject to Liability, or (c) by which an Acquired Company or any
of its assets is or may become bound.
"CONSENT" means any approval, consent, ratification, waiver, or other
authorization.
"CONTEMPLATED TRANSACTIONS" means all of the transactions to be
carried out in accordance with this Agreement, including the purchase and
sale of the Shares, the performance by the parties of their other obligations
under this Agreement, and the execution, delivery, and performance of the
Ancillary Agreements.
"CONTRACT" means any contract, agreement, commitment, understanding,
lease, license, franchise, warranty, guaranty, mortgage, note, bond, or other
instrument or consensual obligation (whether written or oral and whether
express or implied) that is legally binding.
"CONTRAVENE" - an act or omission would "Contravene" something if, as
the context requires:
(i) the act or omission would conflict with it, violate it,
result in a breach or violation of or failure to comply with it, or
constitute a default under it;
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(ii) the act or omission would give any Governmental Body or
other Person the right to challenge, revoke, withdraw, suspend, cancel,
terminate, or modify it, to exercise any remedy or obtain any relief under
it, or to declare a default or accelerate the maturity of any obligation
under it; or
(iii) the act or omission would result in the creation of an
Encumbrance on the stock or assets of an Acquired Company.
"DEVICES" is defined in Section 3.14(a).
"DISCLOSURE SCHEDULE" means the disclosure schedule delivered by
Sellers to Buyer concurrently with the execution and delivery of this
Agreement.
"EMPLOYEES" is defined in Section 2.6(a)(v).
"EMPLOYEE SELLERS" means Michael Fitzgerald, Monte Egeland, Ian
Walter, David Jones, Alastair Froggett, Guy Waugh, Glyn Turner, Dan Lambert,
Denis Herlihy, Tony Dunne, Bart Kane, Sharon Rovario, Pete Crawford, James
Kempton, Dan Hawkinson, Roger Johnson, Suresh Koppolu, Carol Zhang and all
other Sellers employed by an Acquired Company at the closing.
"EMPLOYEE SHAREHOLDINGS" means the total number of shares of the
Company held by all Employee Sellers on the Closing Date.
"ENCUMBRANCE" means any charge, claim, mortgage, servitude, easement,
right of way, community or other marital property interest, covenant,
equitable interest, lease or other possessory interest, lien, option, pledge,
security interest, preference, priority, right of first refusal, or similar
restriction.
"ESCROW ACCOUNT" is defined in Section 2.3 (c).
"ESCROW AGENT" is defined in Section 2.3(c).
"ESCROW AGREEMENT" is defined in Section 2.6(c).
"FACILITY" means any real property or tangible personal property
interest owned or operated by an Acquired Company, including the real
property and tangible personal property used or leased by an Acquired Company.
"GOVERNMENTAL AUTHORIZATION" means any Consent, license, permit or
registration issued, granted, given or otherwise made available by or under
the authority of any Governmental Body or pursuant to any Legal Requirement.
"GOVERNMENTAL BODY" means any:
(i) nation, region, state, county, city, town, village,
district, or other jurisdiction;
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(ii) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, or other
entity and any court or other tribunal);
(iii) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, policy, regulatory, or
taxing authority or power of any nature; and
(iv) official of any of the foregoing.
"INTELLECTUAL PROPERTY" is defined in Section 3.13(a).
"INTERIM BALANCE SHEET" is defined in Section 3.4.
"KNOWLEDGE" -- (i) an individual will be considered to have
"Knowledge" of a fact or matter if the individual is actually aware of the
fact or matter or a prudent individual could be expected to discover or
otherwise become aware of the fact or matter in the course of conducting a
reasonably comprehensive investigation concerning the existence of the fact
or matter; (ii) an entity will be considered to have "Knowledge" of a fact or
matter if any individual who is serving, or who has at any time served, as a
director, manager or senior executive, officer, partner, executor, or trustee
of that entity (or in similar capacity) has, or at any time had, Knowledge of
the fact or matter; and (iii) Sellers will be considered to have "Knowledge"
of a fact or matter if an Acquired Company or any Seller has Knowledge of the
fact or matter.
"LEGAL REQUIREMENT" means any constitution, law, statute, treaty,
rule, regulation, ordinance, binding case law or principle of common law,
notice, approval or Order of any Governmental Body, and any Contract with any
Governmental Body relating to compliance with any of the foregoing.
"LIABILITIES" includes liabilities or obligations of any nature,
whether known or unknown, whether absolute, accrued, contingent, choate,
inchoate, or otherwise, whether due or to become due, and whether or not
required to be reflected on a balance sheet.
"MATERIAL ADVERSE EFFECT" - something would be considered to have a
"Material Adverse Effect" on an Acquired Company if it (i) materially
adversely affects the financial or other condition, results of operations,
assets (considered in the aggregate), Liabilities, equity, business or
prospects of the Acquired Company, (ii) materially impedes the ongoing
operations of the Acquired Company, or (iii) significantly adversely affects
a material asset of the Acquired Company.
"NON-EMPLOYEE SELLERS" - means Andrew O'Rorke, Declan Hogan, Rionach
Ui Ogain, Paul McKeon, Fiona McKeon, Hogan & Associates, Pearse Boyce, Robert
Dennison, Thomas Cunningham, Martin Quaid, Rory A. Stokes, Innovapp, and
Shannon Free Airport Development Company Limited.
"ORDER" means any order, injunction, judgment, decree, ruling,
assessment or arbitration award of any Governmental Body or arbitrator.
"ORDINARY COURSE OF BUSINESS" refers to actions taken in an Acquired
Company's normal operation, consistent with its past practice and causing no
Material Adverse Effect.
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"ORGANIZATIONAL DOCUMENT" means any charter, articles, bylaws,
certificate, statement, statutes, or similar document adopted, filed or
registered in connection with the creation, formation, or organization of an
entity, and any Contract among all equity holders, partners or members of an
entity.
"PERSON" refers to an individual or an entity, including a
corporation, share company, limited liability company, partnership, trust,
association, Governmental Body or any other body with legal personality
separate from its equity holders or members.
"PROCEEDING" means any action, arbitration, audit, examination,
investigation, hearing, litigation, or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or informal, and
whether public or private) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"PRO FORMA NUMBER OF SHARES OF COMMON STOCK" means the number of
shares of common stock calculated, as of the closing date, as a result of
valuing the shares of stock held by Shannon Development as five percent (5%)
of the total shares of the Company and the remaining shares of common stock
outstanding as ninety five percent (95%) of the shares of common stock of the
Company.
"PROPYLON" means Propylon Limited, incorporated in Ireland under
Companies Registration Office No. 315946.
"RELATED PERSON" means, with respect to a particular Person, any other
Person directly or indirectly controlling, controlled by or under common
control with, such Person and, with respect to an individual, any other
individual that is a member of the individual's family (by blood, marriage or
adoption), a member of the individual's household, an entity in which the
individual participates in management, or an employee or employer of the
individual.
"REPRESENTATIVE" means, with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, legal counsel,
accountant, or other representative of that Person.
"SELLERS" is defined in the first paragraph of this Agreement.
"SELLERS' RELEASES" is defined in Section 2.6(a)(ii).
"SELLERS' REPRESENTATIVE" is defined in Section 12.1.
"SHARES" is defined in the Preliminary Statement.
"SSAP" means all applicable Statements of Standard Accounting Practice
issued by the Accounting Standards Board.
"TAX" OR "TAXES" means all taxes, charges, fees, duties (including
customs duties), levies or other assessments, including income, gross
receipts, net proceeds, alternative or add-on minimum, ad valorem, turnover,
real and personal property (tangible and intangible), sales, use, franchise,
excise, value added, stamp, leasing, lease, user, transfer, payroll,
environmental,
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capital stock, disability, employee's income withholding, other withholding,
that are imposed by any Governmental Body, and including any interest,
penalties or additions to tax attributable thereto.
"TAX RETURN" means any report, return or other information required to
be supplied to a Governmental Body in connection with any Taxes.
"THREATENED" - an action or matter would be considered to have been
"Threatened" if a demand or statement has been made (whether orally or in
writing) or a notice has been given (whether orally or in writing), or any
other event has occurred or any other circumstances exist, that would lead a
prudent Person to conclude that such action or matter is likely to be
asserted, commenced, taken or otherwise pursued in the future.
ARTICLE 2
SALE AND TRANSFER OF SHARES; CLOSING
2.1 SALE OF SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Sellers will sell and transfer the Shares to Buyer, and Buyer will purchase
the Shares from Sellers.
2.2 AGGREGATE PURCHASE PRICE
In exchange for the Shares and the fulfillment by Sellers of the
obligations contained herein, Buyer shall pay to Sellers an aggregate
purchase price (the "AGGREGATE PURCHASE PRICE") consisting of the following:
(a) an amount equal to US$10,000,000, (the "INITIAL PURCHASE
PRICE"), payable in:
(i) 555,556 newly-issued and unregistered shares of Buyer's
common stock, representing US$5,000,000 calculated at a fixed price of
US$9.00 per share (the "STOCK CONSIDERATION");
(ii) US$5,000,000 in cash, reduced by the Adjustment Amount
and reduced by any indemnification pursuant to Article 10 and reduced by any
amount not paid to Employee Sellers who are not employed by an Acquired
Company on the date of payment under paragraph 2.3 (f) (the "CASH
CONSIDERATION"); and
(b) an amount up to US$2,500,000, contingent upon the Acquired
Companies meeting certain performance targets (the "ADDITIONAL CASH
CONSIDERATION").
2.3 PAYMENT OF AGGREGATE PURCHASE PRICE
The Aggregate Purchase Price shall be payable as follows:
(a) At Closing the Sellers shall provide a Certificate to the
Buyer setting out the actual number of shares issued to each Seller (the
"Closing Certificate") and as soon as practicable after
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the Closing, Buyer shall deliver to each Seller a stock certificate
representing such Seller's portion of the Stock Consideration, as set forth
in PART 2.3;
(b) within 5 days after the Closing, the sum of US$1,250,000 shall
be paid to Sellers by wire transfer of immediately available funds to Sellers
in the amounts set forth opposite their respective names in PART 2.3 and to
such bank accounts as designated in writing prior to the Closing;
(c) within 5 days after the Closing, the sum of US$3,750,000 shall
be deposited with Norwest Bank Minnesota, in Minneapolis, Minnesota (the
"Escrow Agent") by wire transfer to an account specified by the Escrow Agent
(the "Escrow Account");
(d) in accordance with the Escrow Agreement and subject to the
Adjustment Amount and any indemnification pursuant to Article 10, Buyer shall
pay by wire transfer of immediately available funds the following amounts to
the Sellers as set forth in Part 2.3:
(i) within 15 days after the later of (i) the delivery by
Buyer to Sellers' Representative of the Closing Balance Sheet, or (ii) the
resolution of any disputes with respect thereto pursuant to Section 2.7(c),
Buyer shall pay to Sellers the sum of US$1,250,000, less the Adjustment
Amount;
(ii) Buyer shall pay the remaining Cash Consideration, less
any remaining portion of the Adjustment Amount, to Sellers as follows:
(A) with respect to Non-Employee Sellers: such
Seller's pro rata portion of the remaining Cash Consideration, shall be paid
within 15 days after the later of (i) the delivery by Buyer to Sellers'
Representative of the Closing Balance Sheet, or (ii) the resolution of any
disputes with respect thereto pursuant to Section 2.7(c); and
(B) with respect to Employee Sellers: 50% of such
Employee Seller's pro rata portion of the remaining Cash Consideration shall
be paid 12 months after the Closing, and the other 50% of such Employee
Seller's pro rata portion of the remaining Cash Consideration shall be paid
18 months after the Closing; and
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(e) Prior to August 31, 2001, Buyer shall pay to Sellers a pro rata
portion of the Additional Cash Consideration, according to each Seller's pro
rata shareholding at the Closing Date, subject to the Acquired Companies
achieving minimum sales of US$5,000,000 up to a maximum target of
US$8,000,000 for the period from July 1, 2000 through and including June 30,
2001. For purposes of this paragraph, "sales" shall include the value of all
revenue from Buyer inventory held by the Acquired Companies prior to the
Closing, but shall exclude the post-Closing transfer price to the Acquired
Companies of products or services sold from Buyer. On achievement of the
minimum sales target of US$5,000,000, five-eighths of the Additional Cash
Consideration shall be due to the Sellers, and the remaining three-eighths of
the Additional Cash Consideration shall be paid pro rata to the Sellers in
proportion to the achievement of revenue between US$5,000,000 and
US$8,000,000 in the fiscal year ending June 30, 2001.
(f) Notwithstanding anything to the contrary contained herein:
(i) an Employee Seller shall not be entitled to receive any
portion of the remaining Cash Consideration payable under Section 2.3(d)(ii)
unless such individual remains an employee of an Acquired Company on the date
that such payment is made, except for dismissal without cause (employees
dismissed with cause do not receive any portion of the remaining Cash
Consideration after their dismissal), as more fully set forth in the relevant
Employment Agreement; and,
(ii) the amount of Cash Consideration paid to each Employee
Seller shall not increase in the event that any Employee Seller leaves the
employment of an Acquired Company before such payment is made. The pro rata
portion of Cash Consideration that would have been paid to an Employee Seller
who is no longer employed by an Acquired Company shall not be paid by the
Buyer to the remaining Employee Sellers. The total Cash Consideration to be
paid to Employee Sellers shall be reduced by the pro rata portion that would
have been paid to an Employee Seller who has left the employment of an
Acquired Company on the date when such payment is made. The remaining
Employee Sellers shall be paid pro rata based upon their pro rata holdings of
total Employee Shareholdings at the Closing Date. The total amount of Cash
Consideration paid by the Buyer shall be reduced by the amount of cash
consideration not paid to Employee Sellers who are no longer employed by an
Acquired Company on the date of payment under Paragraph 2.3(f).
2.4 TREATMENT OF OPTIONS
Prior to the Closing, Sellers shall cause each holder of an
outstanding stock option for the purchase of shares of the Company's stock
(each a "Company Option") to execute an Option Cancellation and Assumption
Agreement in the form attached hereto as EXHIBIT 2.4. Pursuant to the terms
of such agreements, each Company Option shall be cancelled, effective as of
the Closing, and shall be replaced with an option (each a "Buyer Option") to
purchase shares of Buyer's common stock with an in-the-money value equal to
the in-the-money value of the relevant Company Option as of the Closing, as
set forth in PART 2.4. For purposes of this paragraph, "in-the-money value"
shall be calculated on an individual basis for each holder of a Company
Option and shall mean the aggregate US$ value of such holder's Company
Option, determined by multiplying the number of shares of the Company's stock
subject to the Company Option by the difference between (i) the US$ value of
the per share price of the Company's
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stock, calculated as the Initial Purchase Price divided by the Pro Forma
Number of Shares of Common Stock purchased by Buyer hereunder, and (ii) the
strike price per share. If the foregoing calculation results in a Buyer
Option being exercisable for a fraction of a share, then the number of shares
of Buyer's common stock subject to such option shall be rounded down to the
nearest whole number with no cash being payable for the fractional share. To
the extent permitted by applicable law, each Buyer Option shall preserve the
vesting schedule and other key terms set forth in the corresponding Company
Option immediately prior to the Closing.
2.5 CLOSING
The Closing will take place at the offices of Arthur Cox at Earlsfort
Centre, Earlsfort Terrace, Dublin 2, Ireland, at 10:00 a.m. (local time) on
or before July 28, 2000 or at such other place and time as Buyer and Sellers
agree.
2.6 CLOSING DELIVERIES
At the Closing:
(a) Sellers shall deliver to Buyer:
(i) the share certificates representing the Shares,
accompanied by duly executed stock transfer forms in favor of Buyer or as
Buyer shall direct;
(ii) a release in the form of EXHIBIT 2.6(a)(ii) executed by
each Seller (collectively "Sellers' Releases"), to be delivered by each
Seller as each Seller is paid under this Agreement;
(iii) the statutory books of the Company, and each Acquired
Company, together with the Company seal, and the seal of each Acquired
Company;
(iv) resignation letters from each director of the Company,
and each director of each Acquired Company, with such resignations to be
effective as of the Closing Date;
(v) non-competition and confidentiality agreements in the
form of EXHIBIT 2.6(a)(v) (collectively, the "NON-COMPETITION AGREEMENTS"),
executed by each employee of an Acquired Company (the "EMPLOYEES"), with the
Non-competition Agreements for key Employees to contain, among other
provisions, a covenant not to compete with Buyer or the Acquired Companies
for a period of 2 years following termination of employment, as well as a
covenant not to solicit employees of Buyer or the Acquired Companies for a
period of 3 years following termination of employment;
(vi) employment agreements in the form of EXHIBIT 2.6(a)(vi),
executed by Michael Fitzgerald, Monte Egeland, Ian Walter, David Jones,
Alastair Froggett, Guy Waugh, Glyn Turner, Dan Lambert, Dennis Herlihy, Tony
Dunne, and Bart Kane (collectively, the "EMPLOYEE SELLERS"), as well as by
all other Employees of the Acquired Companies (collectively, the "EMPLOYMENT
AGREEMENTS");
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(vii) an executed Option Cancellation and Assumption Agreement
from each holder of a Company Option; and
(viii) a certificate executed by each Seller, other than
Rionach Ui Ogain, Paul McKeon, Fiona McKeon, Pearse Boyce, Robert Dennison,
Thomas Cunningham, Martin Quaid, Rory Stokes and Andrew O'Rorke, and Shannon
Free Airport Development Company Limited, representing and warranting to
Buyer that each of Sellers' representations and warranties in this Agreement
was accurate in all respects as of the date of this Agreement and is accurate
in all respects as of the Closing Date as if then made, in the form of
EXHIBIT 2.6(a)(viii).
(b) Buyer shall deliver to Sellers:
(i) a certificate executed by Buyer representing and
warranting to Sellers that each of Buyer's representations and warranties in
this Agreement was accurate in all respects as of the date of this Agreement
and is accurate in all respects as of the Closing Date as if then made, in
the form of EXHIBIT 2.6(b)(i); and
(ii) the Employment Agreements executed by the relevant
Acquired Company, and the option cancellation and assumption agreement
executed by the Buyer.
(c) The Sellers' Releases, Non-competition Agreements, Employment
Agreements, and the escrow agreement attached hereto as EXHIBIT 2.6(c) (the
"ESCROW AGREEMENT") are collectively referred to as the "ANCILLARY
AGREEMENTS."
(d) In addition to the above deliveries, the parties shall arrange
for a meeting of the Company's Board of Directors to be held as of the
Closing Date in order to approve the transactions contemplated by this
Agreement and to take all such other actions as may be necessary to otherwise
implement the terms of this Agreement.
2.7 ADJUSTMENT PROCEDURE
(a) Upon execution of this Agreement and prior to the Closing,
Sellers will cause the Company to immediately begin an audit of the accounts,
balance sheet, and income statement of Microcellular Systems Limited (U.K.)
for the fiscal year ended July 31, 1999.
(b) After the Closing, Buyer will cause the Company to prepare and
will cause KPMG, certified public accountants, to audit a consolidated
balance sheet of the Acquired Companies as of the Closing Date (the "CLOSING
BALANCE SHEET"), including a computation of consolidated shareholders' equity
as of the Closing Date. Buyer will prepare the Closing Balance Sheet in
accordance with SSAP applied on a basis consistent with audited Balance
Sheet. Buyer will deliver the Closing Balance Sheet to Sellers'
Representative within 60 days after the Closing Date.
(c) If Sellers' Representative objects to the Closing Balance
Sheet, Seller's Representative shall notify Buyer of such objection within 10
days after receipt of the Closing Balance Sheet. The parties will use
reasonable efforts to resolve themselves any objections to the Closing
Balance Sheet. If they are unable to do so within 30 days of Buyer's receipt
of the
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notice of objection, then the issues in dispute will be submitted to KPMG,
certified public accountants (the "ACCOUNTANTS"), for resolution, and:
(i) Each party will furnish to the Accountants such work
papers and other documents and information relating to the disputed issues as
the Accountants may request and will be afforded the opportunity to present
to the Accountants any material relating to the disputed issues and to
discuss the issues with the Accountants;
(ii) The resolution of the issues in dispute by the
Accountants, as set forth in a notice delivered to both parties by the
Accountants, will be binding and conclusive on the parties; and
(iii) Buyer and Sellers will each bear 50% of the fees and
expenses of the Accountants for such resolution.
Buyer will cause the Closing Balance Sheet to be revised, if necessary, to
reflect the resolution of the issues in dispute.
(d) Within 5 days after (i) the expiration of the 10-day objection
period set forth above, if Sellers' Representative makes no objection, (ii)
Buyer's and Sellers' mutual resolution of all objections, or (iii) the date
of the Accountant's notice pursuant to Section 2.7(c)(ii), the amounts
reflected in the Closing Balance Sheet shall be used in calculating the
Adjustment Amount as follows: the "ADJUSTMENT AMOUNT" shall be the greater of
(i) zero or (ii) the amount of the Company's liabilities stated in the
Closing Balance Sheet minus the amount of the Company's liabilities stated in
the Balance Sheet, plus (ii) the amount of the Company's assets stated in the
Balance Sheet minus the amount of the Company's assets stated in the Closing
Balance Sheet.
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2.8 EMPLOYEE RETENTION PLAN
As a further inducement to Sellers to enter into this Agreement,
following the Closing Buyer shall:
(a) establish a cash bonus plan for Employees of the Acquired
Companies on execution of the Agreement in an amount of US$2,000,000, with
US$1,000,000 payable at the end of each of the first two fiscal years
following the Closing, subject to achievement of performance criteria to be
mutually agreed upon by the management of the Acquired Companies and the
management of Buyer;
(b) grant options to Employees covering an aggregate of 350,000
shares of Buyer's common stock under Buyer's stock option plan; and
(c) allow Employees to participate in Buyer's employee stock
purchase plan and other benefits currently available to Buyer's employees.
Details of each Employee's participation in the above plans shall be set
forth in the relevant Employment Agreement.
2.9 RELEASE ON FINAL PAYMENT
Upon final payment of the relevant portion of the Aggregate Purchase
Price to each Seller under this Agreement, each Seller shall deliver to the
Buyer the Seller's Release in the form attached as Part 2.9.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, other than Rionach Ui Ogan, Paul McKeon, Fiona McKeon, Pearse
Boyce, Robert Dennison, Thomas Cunningham, Martin Quaid, Rory Stokes and
Andrew O'Rorke, and Shannon Free Airport Development Company Limited, jointly
and severally represent and warrant to Buyer as follows:
3.1 ORGANIZATION, GOOD STANDING, OWNERSHIP OF SUBSIDIARIES, AND CONVEYANCE
OF OWNERSHIP
(a) Each Acquired Company is a corporation duly organized and
validly existing, and Microcellular USA is in good standing, under the laws
of its jurisdiction of organization, with full corporate power and authority
to conduct its business as it is now being conducted, to own or use the
properties and assets that it purports to own or use, and to perform all its
obligations under all its Company Contracts. Each Acquired Company is duly
qualified to do business, and Microcellular USA is in good standing, in each
jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification.
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(b) Sellers have delivered to Buyer copies of the Organizational
Documents of each Acquired Company, as currently in effect. PART 3.1 of the
Disclosure Schedules contains a complete and accurate listing of the
documentation relating to each Acquired Company's jurisdiction of formation
and other jurisdictions in which it is authorized to do business.
(c) The Company is the direct or indirect owner of 100% of the
stock of each other Acquired Company, free and clear of any claim or
encumbrance of any third party.
(d) The Company is the owner of twenty percent (20%) of the stock
of Propylon, Ltd., all free and clear of any claim or encumbrance of any
third party or right of divestment in favor of any third party.
(e) By this Agreement, the Company conveys to Buyer complete
ownership of each other Acquired Company, free and clear of any encumbrance
or claim of any third party, including 100% of each other Acquired Company,
and including 20% of the common stock of Propylon.
3.2 ENFORCEABILITY; NO CONFLICT
(a) Assuming due authorization, execution and delivery of this
Agreement by Buyer, this Agreement constitutes the legal, valid, and binding
obligation of each Seller, enforceable against each Seller in accordance with
its terms. Assuming due authorization, execution and delivery by the other
parties thereto, each Ancillary Agreement to which a Seller is a party will,
upon execution and delivery, constitute that Seller's legal, valid, and
binding obligation, enforceable against such Seller in accordance with its
terms. Each Seller has the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and the
Ancillary Agreements to which such Seller is a party and to perform his or
her obligations under this Agreement and such Ancillary Agreements.
(b) Except as disclosed in PART 3.2(b), Sellers and the Acquired
Companies are not and will not be required to give any notice to any Person
or obtain any Consent or Governmental Authorization in connection with the
execution and delivery of this Agreement or the consummation or performance
of any of the Contemplated Transactions.
(c) Except as disclosed in PART 3.2(c), neither the execution and
delivery of this Agreement nor the consummation or performance of any of the
Contemplated Transactions will directly or indirectly:
(i) Contravene any provision of the Organizational Documents
of an Acquired Company or any resolution adopted by the management or
shareholders of an Acquired Company;
(ii) Contravene any Company Contract, Governmental
Authorization, Legal Requirement or Order to which any Acquired Company or
any Seller, or any of the assets owned or used by an Acquired Company, may be
subject; or
(iii) result in the imposition or creation of any Encumbrance
upon or with respect to any of the assets owned or used by an Acquired
Company.
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3.3 CAPITALIZATION
The authorised share capital of the Company consists of 3,000,000
ordinary shares of US$1.00 each, of which 498,720 are issued as of the
execution of the agreement, and 538,720 may be issued as of the closing; and
367,000 'A' ordinary shares of 1 IR pound each, of which 122,333 shares are
issued as of the closing. The Sellers will provide a certificate to the Buyer
at the Closing with the actual number of issued ordinary shares. The 'A'
ordinary shares represent 5% of the ownership and voting power of the
Company. The Shares represent all of the issued and outstanding shares in the
Company as of the Closing. Sellers are and will be on the Closing Date the
record and beneficial owners and holders of the Shares, free and clear of all
Encumbrances. The attached PART 3.3 sets forth the holders of all Shares, as
well as the holders of all options, warrants, or related instruments to
purchase shares of the Acquired Companies' capital stock. With the exception
of the Shares, all of the outstanding equity securities and other securities
of each Acquired Company are owned of record and beneficially by one or more
of the Acquired Companies, free and clear of all Encumbrances. No legend or
other reference to any purported Encumbrance appears upon any certificate
representing equity securities of any Acquired Company. All of the
outstanding equity securities of each Acquired Company have been duly
authorized and validly issued and are fully paid and non-assessable. Except
as set forth in Part 3.3, there are no Contracts relating to the issuance,
sale, or transfer of any equity securities or other securities of any
Acquired Company. The Company owns 20% of the issued share capital of
Propylon, and no Acquired Company owns, or has any Contract to acquire, any
equity securities or other securities of any Person or any direct or indirect
equity or ownership interest in any other business.
3.4 FINANCIAL STATEMENTS
Sellers have delivered to Buyer: (a) an audited balance sheet of
Microcellular Systems Limited (U.K.) as at July 31, 1998, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flow for the fiscal year then ended, (b) an unaudited consolidated balance
sheet of the Acquired Companies as at April 30, 2000 (the "BALANCE SHEET"),
and (c) an unaudited consolidated balance sheet of the Acquired Companies as
at May 31, 2000 (the "INTERIM BALANCE SHEET") and the related unaudited
consolidated statements of income, changes in shareholders' equity, and cash
flow for the months then ended, including in each case the notes thereto.
Sellers shall furnish, prior to the Closing, an unaudited consolidated
balance sheet of the Acquired Companies as of June 30, 2000, and the related
unaudited consolidated statement of income, changes in shareholders' equity,
and cash flow for the months then ended, including the notes thereto. Such
financial statements and notes fairly present the financial condition and the
results of operations, changes in shareholders' equity, and cash flow of the
Acquired Companies as at the respective dates of such financial statements,
in accordance with SSAP. The financial statements referred to in this
Section reflect the consistent application of accounting principles
throughout the periods involved. No financial statements of any Person other
than the Acquired Companies are required by SSAP to be included in the
financial statements of the Company.
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3.5 BOOKS AND RECORDS
The books of account, minute books, equity record books, and other
records of the Acquired Companies, all of which have been made available to
Buyer, are complete and correct in all material respects. Each transaction
of each Acquired Company is properly and accurately recorded on the books and
records of the Acquired Company, and each document (including any Contract,
invoice, or receipt) on which entries in the Acquired Company's books and
records are based is complete and accurate in all material respects. The
minute books of each Acquired Company contain accurate and complete records
of all meetings held of, and corporate action taken by, the Acquired
Company's shareholders, directors and directors' committees, and no such
meeting has been held for which minutes have not been prepared and are not
contained in such minute books. At the Closing, all of those books and
records will be in the possession of the respective Acquired Company.
3.6 ACCOUNTS RECEIVABLE
All accounts receivable that are reflected on the Balance Sheet, the
Interim Balance Sheet and the accounting records of each Acquired Company as
of the Closing Date, as the case may be, (collectively, the "ACCOUNTS
RECEIVABLE") represent or will represent valid obligations arising from sales
actually made or services actually performed in the Ordinary Course of
Business. Unless paid prior to the Closing Date, the Accounts Receivable are
or will be as of the Closing Date current and collectible net of the
respective reserves shown on the Balance Sheet, Interim Balance Sheet or
Closing Balance Sheet. There is no contest, claim, defense or right of
setoff under any Contract relating to the amount or validity of any Account
Receivable. PART 3.6 contains a complete and accurate list of all Accounts
Receivable as of the date of the Interim Balance Sheet, which list sets forth
the aging of each such Account Receivable.
3.7 INVENTORY
All inventory of each Acquired Company consists of a quality and
quantity usable and salable in the Ordinary Course of Business. All
inventory is maintained at the location of the relevant Acquired Company.
3.8 NO UNDISCLOSED LIABILITIES
Except as set forth in PART 3.8, no Acquired Company has Liabilities
of any nature except for Liabilities reflected or reserved against in the
Balance Sheet or the Interim Balance Sheet, and current Liabilities incurred
in the Ordinary Course of Business since the respective dates thereof.
3.9 NO MATERIAL ADVERSE CHANGE
Since the date of the Balance Sheet, there has been no Material
Adverse Effect on any Acquired Company, and no event has occurred or
circumstance exists that may result in such a Material Adverse Effect.
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3.10 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as disclosed in PART 3.10, since the date of the Balance Sheet,
each Acquired Company has conducted its business only in the Ordinary Course
of Business and there has not been any:
(a) change in an Acquired Company's authorized or issued shares;
grant of any equity option or right to purchase shares of an Acquired
Company; issuance of any security convertible into such equity; grant of any
registration rights; purchase, redemption, retirement, or other acquisition
by an Acquired Company of any shares; or declaration or payment of any
dividend or other distribution or payment with respect to any shares;
(b) amendment to the Organizational Documents of an Acquired
Company;
(c) payment (except in the Ordinary Course of Business) or increase
by an Acquired Company of any bonuses, salaries, or other compensation to any
Seller, director or employee, or entry into any employment, severance, or
similar Contract with any director or employee;
(d) adoption of, amendment to or increase in the payments to or
benefits under, any employee benefit plan or similar obligation of an
Acquired Company;
(e) damage to or destruction or loss of any asset or property of an
Acquired Company, whether or not covered by insurance, which may have a
Material Adverse Effect on the Acquired Company;
(f) entry into, termination of, or receipt of notice of termination
of any Contract or transaction involving an Acquired Company;
(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of an
Acquired Company, including Intellectual Property, or the creation of any
Encumbrance on any material asset of the Acquired Companies;
(h) cancellation or waiver of any claims or rights by an Acquired
Company;
(i) change in the accounting methods used by any Acquired Company;
or
(j) Contract by an Acquired Company to do any of the foregoing.
3.11 LEASE ARRANGEMENTS; REAL PROPERTY
PART 3.11 contains a list of all lease agreements entered into by the
Acquired Companies, together with an indication of the term of such lease and
the periodic rental payments and related fees. The Acquired Companies are
not in default under the relevant lease agreements and are not in violation
of any Legal Requirement with respect to the occupation and use of the
relevant premises. No Acquired Company owns any real property.
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3.12 CONDITION AND SUFFICIENCY OF TANGIBLE ASSETS
Each Acquired Company owns good and transferable title to all of its
assets free and clear of any Encumbrances. Each item of tangible personal
property of each Acquired Company is in good operating condition and repair,
ordinary wear and tear excepted, is free from latent and patent defects and
is suitable for immediate use in the Ordinary Course of Business. The
tangible personal property of the Acquired Companies constitute all assets
necessary for the continued operation of the Acquired Companies after the
Closing in the same manner as before the Closing.
3.13 INTELLECTUAL PROPERTY
(a) The "INTELLECTUAL PROPERTY" means all intellectual property
owned, used or licensed by an Acquired Company, including: (i) each Acquired
Company's name and all assumed fictional business names, trade names,
registered and unregistered trademarks, service marks, and applications; (ii)
all patents, patent applications, and inventions, discoveries, and methods of
doing business that may be patentable; (iii) all registered and unregistered
copyrights in both published works and unpublished works; (iv) all know-how,
trade secrets, confidential or proprietary information, customer lists,
software, databases, source code, object code, technical information, data,
process technology, plans, drawings, surveys, designs, and blue prints; and
(v) all rights in Internet websites and domain names presently used by an
Acquired Company.
(b) PART 3.13(b) contains a complete and accurate list and summary
description of all Intellectual Property, together with an indication of any
royalties paid or received by any Acquired Company, and the Company has
delivered to Buyer accurate and complete copies of all Company Contracts
relating to the Intellectual Property, except for any license implied by the
sale of a product and perpetual, paid-up licenses for commonly available
software programs with a value of less than US$1,000 under which an Acquired
Company is the licensee. There are no outstanding and, to Sellers'
Knowledge, no Threatened disputes or disagreements with respect to any such
Contract.
(c) The Intellectual Property constitutes all the intellectual
property necessary for the continued operation of the Acquired Companies
after the Closing in the same manner as before the Closing. The relevant
Acquired Company is the owner or licensee of all right, title, and interest
in and to the Intellectual Property, free and clear of all Encumbrances, and
has the absolute right to use all of the Intellectual Property without
payment to any third party, except with respect to the licenses listed in
PART 3.13(c). Except as set forth in Part 3.13(c), no Acquired Company has
granted a license or otherwise permitted any other party to use or exploit
any of the Intellectual Property, whether for or without consideration. To
the extent permitted by law, all former and current employees of each
Acquired Company have executed written Contracts with one or more Acquired
Companies that assign to an Acquired Company all rights to any inventions,
improvements, discoveries, or information relating to the business of any
Acquired Company.
(d) To the extent required by applicable law or to the extent
reasonably necessary to protect the Acquired Companies' interest in such
Intellectual Property, all items of Intellectual Property have been properly
registered, are currently in compliance with formal legal
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requirements (including payment of filing, examination, and maintenance
fees), are valid and enforceable, and are not subject to any maintenance fees
or taxes or actions falling due within 90 days after the Closing Date.
(e) The Acquired Companies have taken all reasonable precautions to
protect the secrecy, confidentiality, and value of all trade secrets, and, to
Sellers' Knowledge, no information relating thereto has been used, divulged,
or appropriated either for the benefit of any Person or to the detriment of
the Acquired Companies.
(f) To Sellers' Knowledge, no item of Intellectual Property has
been challenged or Threatened, nor is alleged to infringe any proprietary
right of any other Person.
(g) Where applicable, all products sold or materials distributed by
an Acquired Company contain the appropriate mark, indication, or notice.
3.14 DATE-LIMITED SOFTWARE; EURO COMPLIANCE
(a) All software, firmware, computers, equipment and other devices
(collectively "DEVICES") owned, used, produced, sold, leased, licensed or
distributed by an Acquired Company that store or utilize dates or
date-related data (in any form) will receive input of, recognize, store,
retrieve, process and generate output of dates and date-related data without
error, ambiguity, interruption, malfunction or the need for any change in the
manner of its use and in accordance with current calendar conventions.
(b) The Devices owned or used by each Acquired Company has the
programming, design and performance capabilities to ensure that it: (i) is
capable of performing its functions for more than one currency and for the
common currency adopted by one or more members of the European Union (the
"EURO").
(c) Other than to Buyer, no Acquired Company has provided any
guarantees, warranties or other assurances to any third party with respect to
the Devices.
3.15 CONTRACTS; NO DEFAULTS
(a) PART 3.15(a) contains a complete and accurate list, and Sellers
have delivered to Buyer true and complete copies, of:
(i) each Company Contract that involves performance of
services or delivery of goods or materials by or to an Acquired Companies of
an amount or value in excess of US$5,000;
(ii) each Company Contract affecting the ownership of,
leasing of, title to, use of, or any leasehold or other interest in, any real
or personal property (except personal property leases and installment and
conditional sales agreements having a value per item or aggregate payments of
less than US$5,000 and with a term of less than one year);
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(iii) each Company Contract with respect to Intellectual
Property, including agreements with current or former employees, consultants,
or contractors regarding the appropriation or the non-disclosure of any of
the Intellectual Property;
(iv) each Company Contract with any labor union or other
employee representative of a group of employees;
(v) each Company Contract (however named) involving a
sharing of profits, losses, costs, or Liabilities by an Acquired Company with
any other Person;
(vi) each Company Contract containing covenants that in any
way purport to restrict the business activity of an Acquired Company or limit
the freedom of an Acquired Company to engage in any line of business or to
compete with any Person;
(vii) each Company Contract providing for payments to or by
any Person based on or determined by reference to sales, purchases, or
profits, other than direct payments for goods;
(viii) each power of attorney that is currently effective and
outstanding;
(ix) each Company Contract for capital expenditures in excess
of US$5,000; and
(x) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by an Acquired
Company other than in the Ordinary Course of Business.
PART 3.15(a) sets forth reasonably complete details concerning such
Contracts, including the parties to the Contracts, the amount of the
remaining commitment of the Acquired Companies under the Contracts, and the
Acquired Company's office where details relating to the Contracts are located.
(b) Except as disclosed in PART 3.15(b), each Company Contract is
in full force and effect and is valid and enforceable in accordance with its
terms, the relevant Acquired Company has not Contravened any of the
applicable terms and requirements of such Contract, and Sellers have no
Knowledge of any Contravention of any Company Contract by the other party or
parties thereto.
(c) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any Company Contracts, and no one has made
written demand for such renegotiations.
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3.16 CUSTOMERS AND SUPPLIERS
PART 3.16 lists the names and addresses of the 5 largest customers and
the 5 largest suppliers (measured in each case by dollar volume of purchases
or sales during the years ended July 31, 1998 and July 31, 1999) of the
Acquired Companies, taken as a whole, and the dollar amount of purchases or
sales which such customer or supplier represented from August 1, 1999 through
May 31, 2000. Except as disclosed in PART 3.16, there exists no actual, and
Sellers have no Knowledge of any Threatened, termination, cancellation or
material limitation of, or any material change in, the business relationship
of any Acquired Company with any customer, supplier, group of customers or
group of suppliers listed in PART 3.16. No customer of any Acquired Company
has any right to any credit or refund for products sold or services rendered
or to be rendered by the Acquired Company pursuant to any Contract.
3.17 INSURANCE
Each Acquired Company maintains, and through the Closing will continue
to maintain, in full force and effect insurance policies covering its
insurable business risks and Liabilities in adequate amounts to provide
reasonable protection for the business of and the properties owned and used
by the Acquired Company and for its directors and officers. PART 3.17
contains (a) a list and brief description of each such policy, including the
policy number, name of Acquired Company holding the policy, coverage, name
and address of the insurance carrier, principal amount or limit, annual
premium, date of expiration, and loss experience for the current and
preceding policy year. The Acquired Companies have complied with each such
policy and program and have not failed to give any notice or present any
claim thereunder in a due and timely manner which failure would reasonably be
expected to result in a loss or forfeiture of any right thereunder. PART
3.17 also contains a description of all insurance claims made by the Acquired
Companies since during the last 5 years.
3.18 TAXES
Except as disclosed in PART 3.18:
(a) The Acquired Companies have filed on a timely basis all Tax
Returns as required by applicable Legal Requirements. Each such Tax Return
is true, correct and complete in all respects. All Taxes shown as due and
owing on all such Tax Returns have been paid. The Acquired Companies have
not requested an extension of time within which to file any Tax Return in
respect of any taxable year which has not since been filed. There are no Tax
liens upon the properties or assets of any Acquired Company.
(b) The Acquired Companies have and will have no additional
Liability for Taxes with respect to any Tax Return which was required by
applicable Legal Requirements to be filed on or before the Closing Date,
other than those reflected as liabilities on the Balance Sheet. The amounts
reflected as liabilities on the Balance Sheet for all Taxes are adequate to
cover all unpaid Liabilities for all Taxes, whether or not disputed.
(c) No Irish, U.S. or other country audits or other Proceedings
exist with regard to any Taxes or Tax Returns of any Acquired Company, nor,
to Sellers' Knowledge, is any audit or
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other Proceeding Threatened. The Acquired Companies have not granted or been
requested to grant any waiver of any statutes of limitations applicable to
any claim for Taxes.
(f) All Taxes that each Acquired Company is required by law to
withhold or collect, including sales and use taxes, and amounts required to
be withheld for Taxes of employees and other withholding taxes, have been
duly withheld or collected and, to the extent required, have been paid over
to the proper taxing authority or are held in separate bank accounts for such
purpose.
3.19 EMPLOYEE BENEFITS
(a) PART 3.19(a) contains a complete and accurate list of all
employee benefits plans and similar benefit obligations.
(b) PART 3.19(b) contains a complete and accurate list of all
employees, agents, independent contractors, and other workers working in the
Acquired Companies, including names, date of engagement, and a summary of the
terms of engagement.
(c) Sellers have delivered to Buyer:
(i) all documents that set forth the terms of each employee
benefits plan or similar obligation, including all summaries and descriptions
furnished to participants and beneficiaries;
(ii) all personnel, payroll, and employment manuals and
policies of each Acquired Company;
(iii) a written description of any benefits obligation that is
not otherwise in writing;
(iv) all insurance policies purchased by or to provide
benefits under any Company Plan; and
(v) all reports submitted during the 2 prior years by
third-party administrators, actuaries, investment managers, trustees,
consultants, or other independent contractors with respect to any employee
benefit plan or similar obligation.
(d) Except as disclosed in PART 3.19(d):
(i) The Acquired Companies have performed all of their
respective obligations, including to any Governmental Body, under all
employee benefit plans and similar obligations. The Acquired Companies have
made appropriate entries in their financial records and statements for all
related obligations and liabilities that have accrued but are not due.
(ii) No event has occurred or circumstance exists that may
result in a material increase in premium costs or benefits cost of any
employee benefits plan or similar obligation. The consummation of the
Contemplated Transactions will not result in the payment, vesting, or
acceleration of any benefit.
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(iii) Other than routine claims for benefits submitted by
participants or beneficiaries, no claim against, or Proceeding involving, any
employee benefits plan or similar obligation is pending or, to Sellers'
Knowledge, is Threatened.
(iv) No Acquired Company provides health or welfare benefits
for any retired or former employee nor is any Acquired Company obligated to
provide health or welfare benefits to any active employee following such
employee's retirement or other termination of service.
(v) There are not in existence any retirement, death,
disability, or other benefit plans for Employees or any dependant of any
Employee, other than those disclosed in writing during due diligence, nor are
there any retirement, death or disability obligations pursuant to which any
Acquired Company is or may become liable to make payments, and no pension,
retirement, or sickness payment is currently being paid or has been promised
by any Acquired Company to or with respect to any former officer, Employee,
or their dependants, other than those disclosed in writing during due
diligence.
3.20 LABOR RELATIONS; EMPLOYMENT LAW
(a) Each Acquired Company has complied in all respects with all
Legal Requirements relating to employment practices, terms and conditions of
employment, equal employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, and collective bargaining. No Acquired Company is
liable for the payment of any fines, penalties, or other amounts, for failure
to comply with any of the foregoing Legal Requirements.
(b) Except as disclosed in PART 3.20(b): (i) no Acquired Company is
involved in negotiations to vary the terms or conditions of employment of any
Employee; (ii) no Acquired Company has been, or is now, a party to any
collective bargaining agreement or other labor contract; (iii) there has not
been, there is not presently pending or existing, and to Sellers' Knowledge
there is not Threatened, any strike, slowdown, picketing, work stoppage or
employee grievance process involving an Acquired Company; and (iv) there is
not pending or, to Sellers' Knowledge, Threatened any Proceeding against or
affecting an Acquired Company relating to the alleged violation of any Legal
Requirement pertaining to labor relations, discrimination, or other
employment matters.
(c) No employee or director of any Acquired Company is a party to,
or is otherwise bound by, any Contract, including any confidentiality,
non-competition, or proprietary rights agreement, that in any way adversely
affects or will affect (i) the performance of such individual's duties as an
employee or director of an Acquired Company, or (ii) the ability of any
Acquired Company to conduct its business. To Sellers' Knowledge, no employee
intends to terminate his or her employment with an Acquired Company.
3.21 ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS
Except as disclosed in PART 3.21, to the best of Seller's information,
knowledge and belief, having made due and careful consideration:
(a) Each Acquired Company is, and at all times has been, in full
compliance with, and has not been and is not in Contravention of or liable
under, any environmental law or
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occupational safety and health law. There are no pending or, to Sellers'
Knowledge, Threatened, claims, Encumbrances or other restrictions of any
nature, resulting from any environmental, health, and safety liabilities or
arising under or pursuant to any environmental law or occupational safety and
health law, with respect to or affecting any Facilities or any other
properties and assets in which any Acquired Company has or had an interest.
(d) Neither any Seller nor any Acquired Company has any
environmental, health, or safety liabilities with respect to any Facility.
There are no hazardous materials present on or in the environment at any
Facility or, to Sellers' Knowledge, at any adjoining property.
(g) Sellers have delivered to Buyer true and complete copies and
results of any reports, studies, analyses, tests, or monitoring pertaining to
hazardous materials or Hazardous Activities in, on, or under any Facilities,
or concerning compliance by any Acquired Company with environmental laws.
3.22 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS
(a) Except as disclosed in Part 3.22(a):
(i) Each Acquired Company is, and at all times has been, in
full compliance with each Legal Requirement, including each Governmental
Authorization, that is or was applicable to it or to the conduct or operation
of its business or the ownership or use of its assets.
(ii) No event has occurred or circumstance exists that may
cause an Acquired Company to Contravene any Legal Requirement or Governmental
Authorization or may give rise to any obligation on the part of an Acquired
Company to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature.
(iii) No Acquired Company has received any notice or other
communication (whether oral or written) from any Governmental Body or any
other Person regarding any actual or potential Contravention of any Legal
Requirement or Governmental Authorization.
(b) Part 3.22(b) contains a complete and accurate list of each
Governmental Authorization that is held by an Acquired Company or that
otherwise relates to the business of, or the assets owned or used by, an
Acquired Company, all of which are valid and in full force and effect and
will remain so following the Closing. The Governmental Authorizations listed
in Part 3.22(b) constitute all of the Governmental Authorizations necessary
to permit the Acquired Companies to conduct and operate their businesses.
3.23 LEGAL PROCEEDINGS; ORDERS
(a) Except as disclosed in Part 3.23, there is no pending
Proceeding (i) by or against any Acquired Company or that otherwise relates
to or may affect the business of, or any of the assets owned or used by, an
Acquired Company; or (ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of
the Contemplated Transactions. To Sellers' Knowledge, no such Proceeding has
been Threatened. Sellers have delivered to Buyer copies of all pleadings,
correspondence, and other documents
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relating to each Proceeding listed in Part 3.23. The Proceedings listed in
Part 3.23 will not in the aggregate have a Material Adverse Effect on any
Acquired Company. To Sellers' Knowledge, there is no Order to which an
Acquired Company or any of its officers, directors, agents, employees are
subject.
3.24 RELATIONSHIPS WITH RELATED PERSONS
No Seller nor any Related Person of any Seller or of any Acquired
Company has any interest in any property used in or pertaining to the
Acquired Companies businesses. No Seller nor any Related Person of any
Seller or of any Acquired Company, owns (of record or as a beneficial owner)
an equity interest or any other financial or profit interest in a Person that
has (i) had business dealings or a material financial interest in any
transaction with an Acquired Company, or (ii) engages in competition with an
Acquired Company with respect to any line of the products or services of the
Acquired Company, except for ownership of less than 1% of the outstanding
capital stock of any publicly traded company. With the exception of
employment agreements, no Seller nor any Related Person of any Seller or of
any Acquired Company is a party to any Contract with, or has any claim or
right against, any Acquired Company.
3.25 BROKERS OR FINDERS
Neither Sellers nor any of their Representatives have incurred any
Liability for brokerage or finders' fees or agents' commissions or other
similar payment in connection with the Contemplated Transactions.
3.26 DISCLOSURE
(a) No representation or warranty of Sellers in this Agreement, no
statement in the Disclosure Schedule, and no notice given pursuant to Section
5.5 contains any material untrue statement or omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading. No Seller has
Knowledge of any fact that has specific application to any Seller or Acquired
Company (other than general economic or industry conditions) and that could
have a Material Adverse Effect on an Acquired Company that has not been set
forth in this Agreement.
(b) Disclosures and deliverables on the attached schedules to the
Agreement shall be specific and not general. If a written disclosure is made
under one paragraph of the Agreement on the attached schedules, it will be
deemed to be a disclosure as to all paragraphs of the Agreement.
3.27 ADDITIONAL REPRESENTATIONS AND WARRANTIES
In addition to, and not in limitation of, the representations and
warranties contained in this Article 3, each Seller providing warranties
represents and warrants, subject to the matters set out in the Disclosure
Schedules, that each of the additional representations and warranties
contained in Part 3.27 to this Agreement is true and correct, and that the
Disclosure Schedules
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are true and correct, with respect to the Company, and further agrees that
such representations and warranties are hereby incorporated in this Article 3.
3.28 EXCEPTIONS TO THE WARRANTIES
The following shall be exceptions to the Seller's warranties:
(a) Any and all matters which would be revealed by searches on the
Closing Date of the Companies Registration Office in Dublin, a judgment
search in Ireland, a search for bankruptcy against individuals in Ireland,
the Sheriff's Office in Dublin, and the Companies House in London.
(b) The contents of the Memorandum and Articles of Association of
each of the Acquired Companies and the documents attached thereto, as
provided in copies to the Buyer.
(c) Any and all matters set forth in writing in the leases listed
in Part 3.11 attached to this Agreement.
(d) Any and all matters shown in the audited accounts of
Microcelluar Systems. Ltd. (U.K.) as of July 31, 1998.
(e) all matters contained in the Disclosure Schedules attached
hereto, provided that the matters contained in the Disclosure Schedules are
true.
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3.29 CLAIM REDUCTION AND CLAIM PROCEDURES
Any claim shall be reduced to the extent that:
(a) it arises or is increased as a result of any change in
legislation made after Closing of this Agreement and having retrospective
effect;
(b) it would not have arisen but for a voluntary act or transaction
which is carried out, outside the usual course of the Company's business, by
the Buyer or the Company after Closing;
(c) specific provision or full and adequate reserve, including any
provision for deferred taxation, has been made in the audited accounts of
Microcellular Systems Ltd. (U.K.) of July 31, 1998, or in the Company's
balance sheet of April 30, 2000, in specific respect of the matter to which
such claims relate such that the claim has no effect on the shareholders
funds account on that balance sheet determined on the basis of generally
accepted accounting principles;
(d) if there is a breach of the warranties and the loss occasioned
thereby is recoverable under any insurance policy in force in the name of the
Company as at Closing, the Buyer shall be entitled forthwith to make a claim
against the Sellers hereunder but shall nevertheless use all reasonable
endeavors to pursue a claim against the insurers. If six months after the
making of such claim against the Sellers, payment in full has not been made
by the insurers, the Sellers shall pay an amount equal to any shortfall.
(e) it arises as a result of any change in the accounting policy or
practice introduced after Closing, but this shall not apply if the prior
accounting practice was not done consistently or was not done in accordance
with generally accepted accounting principles or was not done in compliance
with the SSAP or if as a result of audit accounting policy or practice is
changed.
(f) the Company or the Buyer receives in cash recovery of any
amount as a result of sthe circumstances giving rise to the claim;
(g) any taxation for which the Company is or may become liable to
be assessed or accountable is reduced or extinguished as a direct result of
the circumstances giving rise to such claim;
(h) such claim would not have arisen but for a cessation on or
after Closing of the business of the Company or any part thereof.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 ORGANIZATION
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Buyer is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization.
4.2 ENFORCEABILITY; NO CONFLICT
(a) Buyer has the right, power, and authority to execute and
deliver this Agreement and its Ancillary Agreements and to perform its
obligations under this Agreement and its Ancillary Agreements, which actions
have been duly authorized and approved by all necessary corporate action of
Buyer. Assuming the valid execution and delivery of this Agreement by
Sellers, this Agreement constitutes the legal, valid, and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms. Assuming
their execution and delivery by the other parties thereto, the Ancillary
Agreements to which Buyer is a party will, upon execution and delivery,
constitute legal, valid, and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms.
(b) Except as set forth in SCHEDULE 4.2(b), Buyer is not and will
not be required to obtain any Governmental Authorization or Consent in
connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
(c) Except as set forth in SCHEDULE 4.2(c), neither the execution
and delivery of this Agreement by Buyer nor the consummation or performance
of any of the Contemplated Transactions by Buyer will give any Person the
right to prevent, delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
shareholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be
subject; or
(iv) any Contract to which Buyer is a party or by which Buyer
may be bound.
4.3 PROCEEDINGS
There is no pending Proceeding that has been commenced against Buyer
and that challenges, or may have the effect of preventing, delaying, making
illegal, or otherwise interfering with, any of the Contemplated Transactions.
To Buyer's Knowledge, no such Proceeding has been Threatened.
4.4 BROKERS OR FINDERS
Neither Buyer nor any of its Representatives have incurred any
Liability for brokerage or finders' fees or agents' commissions or other
similar payment in connection with the Contemplated Transactions.
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ARTICLE 5
COVENANTS OF SELLERS BEFORE CLOSING
5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date, Sellers will,
and will cause the Acquired Companies and their Representatives to, (a)
afford Buyer and its Representatives and their Representatives (collectively,
"BUYER'S ADVISORS") full and free access to each Acquired Company's
personnel, properties (including subsurface testing), Contracts, books and
records, and other documents and data, (b) furnish Buyer and Buyer's Advisors
with copies of all such Contracts, books and records, and other documents and
data as Buyer may reasonably request, and (c) furnish Buyer and Buyer's
Advisors with such additional financial, operating, and other data and
information as Buyer may reasonably request.
5.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES
Between the date of this Agreement and the Closing Date, Sellers will,
and will cause each Acquired Company to:
(a) conduct the business of such Acquired Company only in the
Ordinary Course of Business;
(b) use their Best Efforts to preserve intact the current business
organization of such Acquired Company, keep available the services of the
current officers, employees, and agents of such Acquired Company, and
maintain relations and goodwill with suppliers, customers, landlords,
creditors, and others having business relationships such Acquired Company; and
(c) confer with Buyer concerning operational matters of a material
nature, the status of the business, operations, and finances of such Acquired
Company.
5.3 NEGATIVE COVENANT
Except as otherwise expressly permitted by this Agreement, between the
date of this Agreement and the Closing Date, Sellers will not, and will cause
each Acquired Company not to, without the prior consent of Buyer, take any
affirmative action, or fail to take any reasonable action within their or its
control, as a result of which any of the changes or events listed in Section
3.10 is likely to occur.
5.4 REQUIRED APPROVALS
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(a) As promptly as practicable after the date of this Agreement,
Sellers will, and will cause each Acquired Company to, make all filings that
Legal Requirements require them to make to consummate the Contemplated
Transactions, including those specified in Part 3.2(b). Between the date of
this Agreement and the Closing Date, Sellers will, and will cause each
Acquired Company to, (a) cooperate with Buyer with respect to all filings
that Buyer elects to make or that Legal Requirements require Buyer to make in
connection with the Contemplated Transactions, and (b) cooperate with Buyer
in obtaining all Governmental Authorizations and Consents identified in
Schedule 4.2(b).
(b) The parties expressly accept that the Board of Directors of the
Company have approved the transaction, the terms of which are set out in this
Agreement, and the members of the Board will use their best efforts to
promptly procure the execution of the Agreement by all Sellers prior to
closing.
5.5 NOTIFICATION
Between the date of this Agreement and the Closing Date, each Seller
will promptly notify Buyer in writing if such Seller or any Acquired Company
becomes aware of: (i) any fact or condition that causes or constitutes a
breach of any of Sellers' representations and warranties as of the date of
this Agreement, or (ii) the occurrence after the date of this Agreement of
any fact or condition that would cause or constitute a breach of any such
representation or warranty had that representation or warranty been made as
of the time of the occurrence or discovery of such fact or condition. Should
any such fact or condition require any change in the Disclosure Schedule,
Sellers will promptly deliver to Buyer a supplement to the Disclosure
Schedule specifying such change. Such delivery will not affect any rights of
Buyer under Section 9.2 and Article 10. During the same period, each Seller
will promptly notify Buyer of the occurrence of any breach of any covenant of
Sellers in this Article or of the occurrence of any event that may make the
satisfaction of the conditions in Article 7 impossible or unlikely.
5.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS
Except as expressly provided in this Agreement, Sellers will cause all
indebtedness owed to any Acquired Company by either Sellers or any Related
Person of Sellers to be paid in full before the Closing Date.
5.7 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Article 9, Sellers will not, and will cause each Acquired Company and each of
their Representatives not to, directly or indirectly, solicit, initiate,
encourage or entertain any inquiries or proposals from, discuss or negotiate
with, provide any non-public information to, or consider the merits of any
inquiries or proposals from, any Person (other than Buyer) relating to any
business combination transaction involving any Acquired Company, including
the sale of any of the shares of an Acquired Company, any merger or
consolidation, or the sale of the business or any of the assets of an
Acquired Company (other than in the Ordinary Course of Business).
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ARTICLE 6
COVENANTS OF BUYER BEFORE CLOSING
6.1 REQUIRED APPROVALS
Following execution of this Agreement, Buyer shall promptly file a
request for approval of the transaction with the Irish Ministry of Enterprise
and Employment.
ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions (any of which may be waived by Buyer, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
(a) All of Sellers' representations and warranties in this
Agreement (considered both individually and collectively) must have been
accurate in all material respects as of the date of this Agreement, and must
be accurate in all material respects as of the Closing Date as if then made,
without giving effect to any supplement to the Disclosure Schedule.
7.2 SELLERS' PERFORMANCE
All of the covenants and obligations that Sellers are required to
perform or to comply with pursuant to this Agreement on or before the Closing
Date (considered both collectively and individually) must have been duly
performed and complied with in all material respects. Sellers shall have (i)
delivered each document that Section 2.6 requires them to deliver.
7.3 CONSENTS
Each of the Governmental Authorizations and Consents identified in
Part 3.2(b) and Schedules 4.2(b) and (c) must have been obtained and must be
in full force and effect.
7.4 ADDITIONAL DOCUMENTS
Each of the following documents shall have been delivered to Buyer:
(a) an opinion of Andrew O'Rorke, Hayes & Sons, dated the Closing
Date, in the form of EXHIBIT 7.4(a); and
(b) such other documents as Buyer may reasonably request for the
purpose of (i) evidencing the accuracy of any of Sellers' representations and
warranties, (ii) evidencing the performance by any Seller of, or the
compliance by any Seller with, any covenant or obligation required to be
performed or complied with by such Seller, (iii) evidencing the satisfaction
of any
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condition referred to in this Article, or (iv) otherwise facilitating the
consummation or performance of any of the Contemplated Transactions.
7.5 NO PROCEEDINGS
Since the date of this Agreement, there must not have been commenced
or Threatened against Buyer, or against any Related Person of Buyer, any
Proceeding (a) involving any challenge to, or seeking damages or other relief
in connection with, any of the Contemplated Transactions, or (b) that may
have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions.
7.6 NO CLAIM REGARDING EQUITY OWNERSHIP OR SALE PROCEEDS
There must not have been made or Threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or
has the right to acquire or to obtain beneficial ownership of any stock of,
or any other voting, equity, or ownership interest in, an Acquired Company,
or (b) is entitled to all or any portion of the Purchase Price.
7.7 NO PROHIBITION
Neither the consummation nor the performance of any of the
Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), Contravene, or cause Buyer or any Related Person of
Buyer to suffer any adverse consequence under any applicable existing or
proposed Legal Requirement or Order.
ARTICLE 8
CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to sell the Shares and to take the other actions
required to be taken by Sellers at the Closing is subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions (any of which may be waived by Sellers, in whole or in part):
8.1 ACCURACY OF REPRESENTATIONS
All of Buyer's representations and warranties in this Agreement
(considered collectively and individually) must have been accurate in all
material respects as of the date of this Agreement and must be accurate in
all material respects as of the Closing Date as if then made.
8.2 BUYER'S PERFORMANCE
All of the covenants and obligations that Buyer is required to perform
or to comply with pursuant to this Agreement on or before the Closing Date
(considered both collectively and individually) must have been performed and
complied with in all material respects. Buyer shall have (i) executed and
delivered each of the documents required to be delivered by Buyer pursuant to
Section 2.6.
8.3 CONSENTS
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Each of the Governmental Authorizations and Consents identified in
Part 3.2(b) must have been obtained and must be in full force and effect, in
a form acceptable to Buyer.
8.4 ADDITIONAL DOCUMENTS
Buyer must have caused to be delivered to Sellers such documents as
Sellers may reasonably request for the purpose of (i) evidencing the accuracy
of any representation or warranty of Buyer, (ii) evidencing the performance
by Buyer of, or the compliance by Buyer with, any covenant or obligation
required to be performed or complied with by Buyer, (iii) evidencing the
satisfaction of any condition referred to in this Article, or (iv) otherwise
facilitating the consummation of any of the Contemplated Transactions.
8.5 NO PROHIBITION
There must not be in effect any Legal Requirement or Order that (a)
prohibits the consummation of the Contemplated Transactions, and (b) has been
adopted or issued, or has otherwise become effective, since the date of this
Agreement.
ARTICLE 9
TERMINATION
9.1 TERMINATION EVENTS
This Agreement may, by notice given before or at the Closing and
subject to Section 9.2, be terminated:
(a) by either Buyer or Sellers if a material breach of any
provision of this Agreement has been committed by the other party or parties
and such breach has not been waived;
(b) by mutual consent of Buyer and Sellers; or
(c) by either Buyer or Sellers if the Closing has not occurred
(other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before August 31, 2000, or such later date as the parties may agree upon.
9.2 EFFECT OF TERMINATION
Each party's right of termination under Section 9.1 is in addition to
any other rights it may have under this Agreement or otherwise, and the
exercise of such right of termination will not be an election of remedies.
If this Agreement is terminated pursuant to Section 9.1, all obligations of
the parties under this Agreement will terminate, except that the
representations in Sections 3.25 and 4.4 and the obligations in Sections
13.1, 13.3 and 13.12 will survive; PROVIDED, HOWEVER, that if this Agreement
is terminated by a party because of the breach of the Agreement by the other
party or because one or more of the conditions to the terminating party's
obligations under this Agreement is not satisfied as a result of the other
party's failure to comply with its
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obligations under this Agreement, the terminating party's right to pursue all
legal remedies will survive such termination unimpaired.
ARTICLE 10
INDEMNIFICATION; REMEDIES
10.1 SURVIVAL, RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE; WAIVER
All representations, warranties, covenants, and obligations in this
Agreement, the Disclosure Schedule and other Schedules, the supplements to
the Disclosure Schedule, the certificates delivered pursuant to Section
2.6(a)(viii), and any other certificate or document delivered pursuant to
this Agreement will survive the Closing and the consummation of the
Contemplated Transactions, subject to the limitations set forth in Sections
3.26, 3.28, 10.4, 10.5 and 11.8. The right to indemnification, payment of
damages or other remedy based on such representations, warranties, covenants,
and obligations will not be affected by any investigation conducted with
respect to, or any Knowledge acquired (or capable of having been acquired)
about, the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any
condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of damages, or other remedy based on
such representation, warranty, covenant, or obligation.
10.2 INDEMNIFICATION BY SELLERS
Sellers, subject to the limitations set forth in Sections 3.26, 3.28,
10.4, 10.5 and 11.8, jointly and severally, other than Rionach Ui Ogain, Paul
McKeon, Fiona McKeon, Pearse Boyce, Robert Dennison, Thomas Cunningham,
Martin Quaid, Rory Stokes and Andrew O'Rorke, and Shannon Free Airport
Development Company Limited, and other than Declan Hogan, who will severally
but not jointly to the extent of consideration he has received, will
indemnify and hold harmless Buyer, the Acquired Companies, and their
respective Representatives, equity owners, controlling persons and affiliates
(collectively, the "BUYER INDEMNITEES") for, and will pay to the Buyer
Indemnitees the monetary value, up to an amount equal to the Aggregate
Purchase Price, of, any Adverse Consequences arising, directly or indirectly,
from or in connection with:
(a) any breach of any representation or warranty made by any Seller
in this Agreement, the Disclosure Schedule and supplements thereto, the
certificates delivered pursuant to Section 2.6(a)(viii), or any other
certificate or document delivered by Sellers pursuant to this Agreement;
(b) any breach by a Seller of any covenant or obligation of such
Seller in this Agreement;
(c) any Liability of an Acquired Company existing at or arising out
of a state of facts existing at or before the Closing Date, to the extent
that such Liability is not reflected or reserved
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against in the Balance Sheet and Interim Balance Sheet, including Liabilities
arising from or relating to:
(i) any product shipped or manufactured by, or any services
provided by, an Acquired Company before the Closing Date;
(ii) any environmental, health, and safety liabilities;
(iii) any risk or actual incidence of illness, disability,
death or other injury to, or the contraction of any diseases by, any Person
(including any current or former employee) resulting from exposure to
hazardous materials, products, or other materials before the Closing Date,
without regard to when such injuries or diseases are first manifested; and
(d) any matter disclosed in Part 3.23.
Notwithstanding the foregoing, no Seller, other than Michael
Fitzgerald, Monte Egeland, Ian Walter, David Jones, Alastair Froggett, and
Guy Waugh, shall be liable to indemnify Buyer under this Article 10 in an
amount exceeding that portion of the Aggregate Purchase Price allocated to
such Seller under this Agreement.
Notwithstanding the foregoing, indemnification for breach of any
representation or warranty contained in Section 3.18 or for breach of any
covenant or obligation contained in Article 11 is governed by Article 11.
Notwithstanding the foregoing, there shall be no limit to the amount
of indemnity that shall be paid to the Buyer Indemnitees by Michael
Fitzgerald, Monte Egeland, Ian Walter, David Jones, Alastair Froggett, and
Guy Waugh, for claims arising from fraud, willful concealment, dishonesty, or
breach of the duty of confidentiality or deliberate non-disclosure, nor shall
there be any limit as to time as to when an indemnity may be sought.
(e) Notwithstanding any other provision of this Agreement, all
Sellers, including Rionach Ui Ogain, Paul McKeon, Fiona McKeon, Pearse Boyce,
Robert Dennison, Thomas Cunningham, Martin Quaid, Rory Stokes and Andrew
O'Rorke, and Shannon Free Airport Development Company Limited, shall be
liable under the provision of Paragraph 3.3 in the event of breach of the
warranty that Sellers are and will be on the Closing Date the record and
beneficial owners and holders of the Shares, free and clear of all
encumbrances, set forth opposite their name on the Schedule of Sellers.
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER
Buyer will indemnify and hold harmless Sellers, and will pay to
Sellers the monetary value of any Adverse Consequences arising, directly or
indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Buyer in
this Agreement or in any certificate delivered by Buyer pursuant to this
Agreement;
(b) any breach by Buyer of any of its covenant or obligation in
this Agreement; and
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(c) any and all Proceedings, demands or assessments incidental to
any of the matters set forth in Sections 10.3(a) and (b).
Notwithstanding the foregoing, indemnification for breach of a covenant or
obligation contained in Article 11 will be governed by Article 11.
10.4 TIME LIMITATIONS
(a) If the Closing occurs, Sellers will have no Liability for
breach of (i) a covenant or obligation to be performed or complied with
before the Closing Date or (ii) a representation or warranty, unless on or
before the second anniversary of the Closing Date, or on the seventh
anniversary of the Closing Date as to Article 11, Buyer notifies Sellers of a
claim specifying the factual basis of that claim in reasonable detail to the
extent then known by Buyer. Notwithstanding the foregoing, a claim with
respect to Sections 3.3, or a claim for indemnification or reimbursement not
based upon any covenant or obligation to be performed or complied with before
the Closing Date, may be made at any time.
(b) If the Closing occurs, Buyer will have no Liability (for
indemnification or otherwise) for breach of (i) a covenant or obligation to
be performed or complied with before the Closing Date or (ii) a
representation or warranty, unless on or before the second anniversary of the
Closing Date, Sellers notify Buyer of a claim specifying the factual basis of
that claim in reasonable detail to the extent then known by Sellers.
(c) Proceedings based on breach of warranty must be instituted
within six (6) months after the warranty limitation period expires.
10.5 LIMITATIONS ON AMOUNT
(a) Sellers will have no liability with respect to the matters
governed by Section 10.2(a), or, to the extent relating to any failure to
perform or comply before the Closing Date, Section 10.2(b), until the total
monetary value of all Adverse Consequences with respect to such matters
exceeds US$25,000.
(b) Buyer will have no liability (for indemnification or otherwise)
with respect to the matters governed by clause (a) or (b) of Section 10.3
until the total monetary value of all Adverse Consequences with respect to
such matters exceeds US$25,000.
(c) This Section will not apply to any breach by a party of its
representations and warranties of which such party had Knowledge at any time
before the date on which such representation and warranty is made, or any
intentional breach by a party of any covenant or obligation, and such party
will be liable for all Adverse Consequences with respect to such breaches.
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10.6 RIGHT OF SETOFF
Upon notice to Sellers specifying in reasonable detail the basis for
its action, Buyer may set off any amount to which it may be entitled under
this Article and Article 11 against amounts otherwise payable under this
Agreement. The exercise of such right of setoff by Buyer in good faith,
whether or not ultimately determined to be justified, will not constitute a
breach under this Agreement. Neither the exercise of nor the failure to
exercise such right of setoff will constitute an election of remedies or
limit Buyer in any manner in the enforcement of any other remedies that may
be available to it.
10.7 PROCEDURE FOR INDEMNIFICATION - DEFENSE OF THIRD-PARTY CLAIMS
(a) Promptly after receipt by a Person entitled to indemnity under
Section 10.2 or 10.3 (an "INDEMNIFIED PERSON") of notice of the assertion of
a third-party claim against it, the Indemnified Person will, if a claim is to
be made against a Person obligated to indemnify under such Section (an
"INDEMNIFYING PERSON"), give notice to the Indemnifying Person of the
assertion of such claim. An Indemnified Person's failure to notify an
Indemnifying Person will not relieve the Indemnifying Person of any Liability
that it may have to the Indemnified Person.
(b) If notice is given to an Indemnifying Person of the
commencement of any Proceeding and the Indemnifying Person does not, within
ten days after the Indemnified Person's notice is given, give notice to the
Indemnified Person of its election to assume the defense of such Proceeding,
the Indemnifying Person will be bound by any determination made in such
Proceeding or any compromise or settlement effected by the Indemnified Person
in good faith.
(c) Sellers hereby consent to the non-exclusive jurisdiction of
any court stated in Section 13.11 in which a Proceeding is brought against
any Buyer Indemnitee for purposes of any claim that a Buyer Indemnitee may
have under this Agreement with respect to such Proceeding or the matters
alleged therein. Sellers agree that process may be served on Sellers with
respect to such a claim anywhere in the world.
ARTICLE 11
TAX MATTERS
11.1 INDEMNIFICATION OF SELLERS
Buyer will indemnify and hold harmless Sellers from and against any
and all Taxes arising out of or relating to any breach of Buyer's covenants
contained in this Article.
11.2 INDEMNIFICATION OF BUYER
Sellers, subject to the limitations set forth in Sections 3.26, 3.28,
10.4, 10.5 and 11.8, jointly and severally, except for Rinoach Ui Ogan, Paul
McKeon, Fiona McKeon, Pearse Boyce, Robert Dennison, Thomas Cunningham,
Martin Quaid, Rory Stokes and Andrew O'Rorke, and Shannon Free Airport
Development Company Limited, and other than Declan Hogan who will severally
but not jointly indemnify, will indemnify and hold harmless the Buyer
Indemnitees
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from and against any and all Taxes, up to an amount equal to the Aggregate
Purchase Price, arising out of or relating to: (a) the pre-Closing period
that have not been paid prior to the Closing Date or reserved on the Balance
Sheet; and (b) any Adverse Consequences arising, directly or indirectly, from
or in connection with any breach of the representations and warranties
contained in Section 3.18 of this Agreement or of Sellers' covenants
contained in this Article.
Notwithstanding the foregoing, no Seller, other than Michael
Fitzgerald, Monte Egeland, Ian Walter, David Jones, Alastair Froggett, and
Guy Waugh, shall be liable to indemnify Buyer under this Article 11 in an
amount exceeding that portion of the Aggregate Purchase Price allocated to
such Seller under this Agreement.
11.3 INDEMNIFICATION PROCESS
In the event of a third-party claim for Taxes, Buyer will permit
Sellers, at their expense, to control any Proceeding relating to any taxable
year or period of the relevant Acquired Companies ending on or before the
Closing Date. Sellers will not settle or otherwise compromise any issue or
matter without Buyer's prior written consent. If Sellers do not assume the
defense of any such Proceeding, Buyer may, without any effect to its right of
indemnification by Sellers under this Article, defend the same in such manner
as it may deem appropriate, including, but not limited to, settling such
Proceeding. Buyer will control any Proceeding relating to any taxable year or
period of an Acquired Company ending after the Closing Date.
11.4 TIMING OF PAYMENT; CHARACTERIZATION
Payment of any amounts due under this Article will be made by Sellers
or Buyer, as the case may be, within 14 days of the receipt of reasonable
evidence establishing that such a payment is required. All amounts paid by
Buyer or Sellers, as the case may be, by reason of Sections 10.2, 10.3, 11.1
and 11.2 will be treated to the extent permitted under applicable Legal
Requirements as adjustments to the Purchase Price for all Tax purposes.
11.5 TRANSACTIONAL TAXES
All transfer, documentary, recording, notarial, sales, use,
registration, stamp and other similar Taxes or fees imposed by any authority
in connection with the Contemplated Transactions will be borne by the party
which is obligated to pay such Tax under applicable Legal Requirements.
Buyer and Sellers will cooperate in timely making and filing all Tax Returns
as may be required to comply with Legal Requirements.
11.6 TAX ELECTIONS
From and after the date hereof, Sellers will not, without the prior
written consent of Buyer (which consent may not be unreasonably withheld),
make or revoke, or cause or permit to be made or revoked, any Tax election.
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11.7 TAX RECORDS
Sellers will make available to Buyer such records as Buyer may require
for the preparation of any Tax Return and such records as Buyer may require
for the defense of any Proceeding concerning such Tax Return. Buyer will
make available to Sellers such records as Sellers may require for the
preparation of any Tax Return and such records as Sellers may require for the
defense of any Proceeding concerning any such Tax Return.
11.8 MISCELLANEOUS
The covenants and agreements of the parties contained in this Article
and the representations and warranties contained in Section 3.18 as well as
Section VI of Part 3.27 will survive the Closing and will remain in full
force and effect until 7 years following the Closing.
ARTICLE 12
SELLERS' REPRESENTATIVE
12.1 APPOINTMENT
Each Employee Seller and Shannon Free Airport Development Company
Limited hereby designates and appoints Michael Fitzgerald ("EMPLOYEE SELLERS'
REPRESENTATIVE") as such Employee Seller's representative and
attorney-in-fact with full power and authority to act for and on behalf of
each Employee Seller with regard to, and each Non-employee Seller other than
Shannon Free Airport Development Company Limited hereby designates and
appoints Andrew O Rorke ("NON-EMPLOYEE SELLERS' REPRESENTATIVE") as such
Non-Employee Seller's representative and attorney-in-fact with full power and
authority to act for and on behalf of each Non-Employee Seller with regard to:
(a) approval and payment of fees and expenses not paid by the
Acquired Companies, if any, attributable to Sellers as a group with respect
to the sale of the Shares;
(b) execution, delivery and receipt on behalf of Sellers of all
notices, requests and other communications required or permitted to be given
under this Agreement;
(c) the adjustment procedure in Section 2.7 and matters arising in
connection with any adjustment to the Aggregate Purchase Price;
(d) termination of this Agreement pursuant to Section 9.1 and any
waiver pursuant to Section 2.3, Article 8, or Section 9.1;
(e) acceptance of service of process;
(f) all disputes or other matters between Sellers and Buyer in
connection with, arising out of, or relative to this Agreement after the
Closing Date;
(g) all matters pertaining to the Escrow Agreement, and all matters
to the Escrow Account, and to the funds in that account, including but not
limited to the establishment,
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maintenance, deposits, withdrawals, payments and disbursements from that
account, and the signing of any and all documents on behalf of Sellers as to
the Escrow Agreement and Escrow Account; and
(h) all other matters specifically authorized by this Agreement.
This appointment and grant of power and authority is coupled with an
interest, is in consideration of the mutual covenants made in this Agreement,
is irrevocable, and shall not be terminated by the act of any Seller or by
operation of law. Each Seller hereby consents to the taking of any actions
and the making of any decisions that this Agreement requires or permits
Employee Sellers' Representative or Non-employee Sellers' Representative to
take or make.
12.2 LIMITATION ON LIABILITY; INDEMNIFICATION
Each Seller agrees that Sellers' Representative will have no Liability
to any Person for any good faith action or omission pursuant to this Article,
and each Seller will, on a proportionate basis in accordance with such
Seller's Initial Payment, indemnify and hold Sellers' Representative harmless
from and against any Adverse Consequences Sellers' Representative may suffer
as a result of any such action or omission.
12.3 RELIANCE
Buyer will be entitled to rely upon any document delivered by a
Sellers' Representative as (a) being genuine and correct and (b) having been
duly signed or sent by such Sellers' Representative, and Buyer will not be
liable to any Seller for any action taken or omitted by Buyer in such
reliance.
12.4 DELEGATION; SUCCESSOR
A Sellers' Representative may delegate his authority as Sellers'
Representative to any one or more representatives of Sellers for a fixed or
indeterminate period of time by notice to Buyer in accordance with Section
13.4. In the event of the death or incapacity of Sellers' Representative,
Sellers will select a successor representative or representatives, and Buyer
may rely upon any such designation if signed by such Sellers or their
successors whose interests aggregate not less than two-thirds of the relevant
Shares.
ARTICLE 13
GENERAL PROVISIONS
13.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party
to this Agreement will bear its respective expenses incurred in connection
with the preparation, execution, and performance of this Agreement and the
Contemplated Transactions, including all fees and expenses of its
Representatives, except that Buyer will pay the Seller's actual out of pocket
expenses not to exceed US$75,000 and not to exceed US$75,000 in actual due
diligence preparation costs. All such out of pocket expenses and costs shall
be evidenced by paid receipts
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and shall be subject to audit. Sellers will use their best efforts to
minimize any fees, costs or other expenses incurred and will cause the
Acquired Companies not to incur any expenses in connection with this
Agreement in the aggregate in excess of $75,000 in out-of-pocket expenses and
$75,000 in due diligence preparation costs.
13.2 PUBLIC ANNOUNCEMENTS
Sellers will not and will not permit the Acquired Companies to make
any disclosure of the Contemplated Transactions, except with the prior
written consent of Buyer or as required by Legal Requirements. Sellers and
Buyer will consult with each other concerning the means by which the Acquired
Companies' employees, customers, suppliers and others having dealings with
the Acquired Companies will be informed of the Contemplated Transactions, and
Buyer will have the right to be present for any such communication.
13.3 CONFIDENTIALITY
Between the date of this Agreement and the Closing Date, Buyer and
Sellers will maintain in confidence, and will cause the Representatives of
Buyer, Sellers, and the Acquired Companies to maintain in confidence, any
written, oral, or other information obtained in confidence from another party
or an Acquired Company in connection with this Agreement or the Contemplated
Transactions, unless (a) such information is already known to such party or
to others not bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
Consent required for the consummation of the Contemplated Transactions, or
(c) the furnishing or use of such information is required by Proceedings. If
the Contemplated Transactions are not consummated, each party will return or
destroy as much of such written information as the other party may reasonably
request.
13.4 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed given to a party when (a)
delivered to the appropriate address by hand or by nationally recognized
overnight courier service (costs prepaid); (b) sent by facsimile or e-mail
with confirmation of transmission by the transmitting equipment; or (c)
received or rejected by the addressee, if sent by certified mail, return
receipt requested; in each case to the following (or to such other address,
facsimile number, e-mail address as a party may designate by notice to the
other parties):
Employee Sellers:
Michael Fitzgerald
Sellers' Representative
Address: Kerry Innovation Centre
Clash, Tralee
Co. Kerry
Ireland
Fax No.: 353-66-712-7999
E-mail: [email protected]
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with a copy to:
Andrew O'Rorke, Esq.
Attention: Hayes & Sons
Address: Lavery House
Earlsfort Terrace
Dublin, Ireland
Fax No.: 353-1-661-2163
E-mail: [email protected]
Non-employee Sellers:
Andrew O'Rorke, Esq.
Attention: Hayes & Sons
Address: Lavery House
Earlsfort Terrace
Dublin, Ireland
Fax No.: 353-1-661-2163
E-mail: [email protected]
Buyer:
interWAVE Communications International, Ltd.
Attention: Robin Foor, General Counsel
Address: 312 Constitution Drive
Menlo Park, CA 94025
Fax No.: 1-650-321-6381
E-mail: [email protected]
with a copy to:
Baker & McKenzie
Attention: Andre M. Saltoun
Eric H. Anderson
Address: 660 Hansen Way
Palo Alto, CA 94304
Fax No.: 1-650-856-9299
E-mail: [email protected]
[email protected]
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13.5 FURTHER ASSURANCES
The parties agree to furnish upon request to each other such further
information, to execute and deliver to each other such other documents, and
to do such other acts and things as the other party may reasonably request
for the purpose of carrying out the intent of this Agreement and the
Contemplated Transactions.
13.6 SCHEDULES
The Schedules identified in this Agreement, including the Disclosure
Schedule, are incorporated herein by reference and made a part of this
Agreement. In the event of any inconsistency between the statements in the
body of this Agreement and those in the Disclosure Schedule (other than an
exception expressly set forth as such in the Disclosure Schedule with respect
to a specifically identified representation or warranty), the statements in
the body of this Agreement will control.
13.7 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements among the parties with
respect to its subject matter (including any letter of intent or term sheet
previously signed by the parties) and constitutes (along with the documents
delivered pursuant to this Agreement) a complete and exclusive statement of
the terms of the agreement between the parties with respect to its subject
matter. This Agreement may not be amended, supplemented or otherwise modified
except by a written agreement executed by the party to be charged with the
amendment.
13.8 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in full force and
effect to the extent not held invalid or unenforceable.
13.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD PARTY RIGHTS
No party may assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of the
other parties, except that Buyer may assign any of its rights and delegate
any of its obligations under this Agreement to any subsidiary of Buyer or to
any subsequent acquirer of the Shares or all or substantially all of the
business of the Acquired Companies. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of each Seller's heirs, executors, administrators and permitted
assigns and Buyer's successors and permitted assigns.
13.10 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither any failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or
any of the documents referred to in this Agreement will
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operate as a waiver thereof, and no single or partial exercise of such right,
power, or privilege will preclude any other or further exercise thereof.
13.11 ARBITRATION
All disputes arising out of or in connection with this Agreement shall
be finally settled under the Rules of Arbitration of the International
Chamber of Commerce by a single arbitrator appointed in accordance with such
Rules. The place of arbitration will be San Francisco, California, or
London, England or Dublin, Ireland. The language of the arbitration will be
English. Process in any such arbitration Proceeding may be served on any
party anywhere in the world by notice given to the party in accordance with
Section 13.4.
Notwithstanding the foregoing, in the event Buyer reasonably believes
it is necessary to protect the Intellectual Property or to enforce any
restrictive covenant or confidentiality agreement set forth in this Agreement
or in any employment contract or other contract, Buyer or any Acquired
Company shall have the right to initiate a court action, without recurring
first to arbitration, in order to protect such rights or enforce such
covenants or agreements, including any action for injunctive relief. In
connection with any such action, Sellers hereby expressly consent to the
non-exclusive jurisdiction of the federal and state courts located in the
State of California, the courts of England, and the courts of Ireland.
13.12 GOVERNING LAW
This Agreement will be governed by and construed under the laws of
Ireland without regard to conflict of laws principles that would require the
application of any other law.
13.13 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
-43-
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as
of the date indicated in the first sentence of this Agreement.
INTERWAVE COMMUNICATIONS INTERNATIONAL, LTD.
By:
----------------------------------
PRISCILLA LU
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
------------------------------------- ------------------------------------
NAME OF SELLER: MICHAEL FITZGERALD NAME OF SELLER: MONTE EGELAND
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
------------------------------------- ------------------------------------
NAME OF SELLER: IAN WALTER NAME OF SELLER: DAVID JONES
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
------------------------------------- ------------------------------------
NAME OF SELLER: ALASTAIR FROGGETT NAME OF SELLER: GUY WAUGH
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
-44-
<PAGE>
------------------------------------- ------------------------------------
NAME OF SELLER: GLYN TURNER NAME OF SELLER: DAN LAMBERT
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
------------------------------------- ------------------------------------
NAME OF SELLER: DENNIS HERLIHY NAME OF SELLER: TONY DUNNE
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
------------------------------------- ------------------------------------
NAME OF SELLER: BART KANE NAME OF SELLER: DECLAN HOGAN
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
------------------------------------- ------------------------------------
NAME OF SELLER: RIONACH UI OGAIN NAME OF SELLER: P. MCKEON
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
-45-
<PAGE>
------------------------------------- ------------------------------------
NAME OF SELLER: FIONA MCKEON
in Seller's individual capacity
Address:
-----------------------------
-----------------------------
------------------------------------- ------------------------------------
NAME OF SELLER: PEARSE BOYCE NAME OF SELLER: ROBERT DENNISON
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
------------------------------------- ------------------------------------
NAME OF SELLER: THOMAS CUNNINGHAM NAME OF SELLER: MARTIN QUAID
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
------------------------------------- ------------------------------------
NAME OF SELLER: RORY A. STOKES NAME OF SELLER: ANDREW O'RORKE
in Seller's individual capacity in Seller's individual capacity
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
-46-
<PAGE>
------------------------------------- ------------------------------------
NAME OF SIGNER: SCOTT MEADER NAME OF SIGNER:
NAME OF SELLER: INNOVAP NAME OF SELLER: SHANNON FREE AIRPORT
DEVELOPMENT COMPANY LIMITED
in Signer's capacity as: in Signer's capacity as:
___________ of Innovap ___________ of Shannon Free Airport
Development Company Limited
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
ACCEPTANCE AND AGREEMENT OF EMPLOYEE SELLERS' REPRESENTATIVE
The undersigned, being the Employee Sellers' Representative appointed
in Section 12.1 of the foregoing Stock Purchase Agreement, agrees to serve as
Employee Sellers' Representative and to be bound by the terms of the Stock
Purchase Agreement pertaining to that role.
Date:
-------------------------------- ------------------------------------
MICHAEL FITZGERALD
ACCEPTANCE AND AGREEMENT OF NON-EMPLOYEE SELLERS' REPRESENTATIVE
The undersigned, being the Non-Employee Sellers' Representative
appointed in Section 12.1 of the foregoing Stock Purchase Agreement, agrees
to serve as Non-Employee Sellers' Representative and to be bound by the terms
of the Stock Purchase Agreement pertaining to that role.
Date:
-------------------------------- ------------------------------------
ANDREW O RORKE
-47-
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF SELLERS
------------------------------------------------------------------------------
NAME SHARES ADDRESS
OWNED
------------------------------------------------------------------------------
Holders of Ordinary Shares
------------------------------------------------------------------------------
<S> <C> <C>
Michael Fitzgerald 60,000
------------------------------------------------------------------------------
Monte Egeland 60,000
------------------------------------------------------------------------------
Ian Walter 60,000
------------------------------------------------------------------------------
David Jones 60,000
------------------------------------------------------------------------------
Alastair Froggett 60,000
------------------------------------------------------------------------------
Guy Waugh 60,000
------------------------------------------------------------------------------
Glyn Turner 12,000
------------------------------------------------------------------------------
Dan Lambert 2,400
------------------------------------------------------------------------------
Denis Herlihy 6,000
------------------------------------------------------------------------------
Tony Dunne 4,200
------------------------------------------------------------------------------
Bart Kane 4,200
------------------------------------------------------------------------------
Declan Hogan 15,750
------------------------------------------------------------------------------
Rionach Ui Ogain 15,750
------------------------------------------------------------------------------
P. McKeon 15,750
------------------------------------------------------------------------------
Fiona McKeon 15,750
------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
NAME SHARES ADDRESS
OWNED
------------------------------------------------------------------------------
Declan Hogan 21,750
------------------------------------------------------------------------------
Pearse Boyce 9,000
------------------------------------------------------------------------------
Robert Dennison 7,740
------------------------------------------------------------------------------
Thomas Cunningham 6,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Rory A. Stokes 6,000
------------------------------------------------------------------------------
Andrew O'Rorke 3,600
------------------------------------------------------------------------------
Innovap (Scott Meader) 2,580
------------------------------------------------------------------------------
Holders of Ordinary 'A' Shares
------------------------------------------------------------------------------
Shannon Development 122,333
------------------------------------------------------------------------------
TOTAL SHARES 621,053
------------------------------------------------------------------------------
</TABLE>
<PAGE>
PART 2.3
AGGREGATE PURCHASE PRICE BREAKDOWN
<PAGE>
PART 2.4
OPTION CANCELLATION AND ASSUMPTION BREAKDOWN
<PAGE>
PART 3.1
COPIES OF ORGANIZATIONAL DOCUMENTS OF ACQUIRED COMPANIES
<PAGE>
The following are disclosed. The paragraph numbers stated below are for
convenience of reference only and refer to clauses in Article 3 of the Stock
Purchase Agreement. Buyer expressly accepts that disclosure of any
particular matter by reference to a specific paragraph is to be regarded as a
disclosure in respect of each and every other paragraph as far as same shall
be applicable and as disclosures to the warranties contained in Part 3.27 of
the Agreement.
<TABLE>
<S> <C>
------------------------------------------------------------------------------
General Schedule Microcellular Systems Inventory dated 31st March 2000
------------------------------------------------------------------------------
General Schedule Microcellular Systems Aged Debtors as at 31st March 2000
showing a total value $2,809,892
------------------------------------------------------------------------------
General Schedule Microcellular Systems Pre-payment Schedules dated 31st
March 2000
------------------------------------------------------------------------------
General Schedule Microcellular Systems Limited A/P Ageing Detail as of 31st
March 2000
------------------------------------------------------------------------------
General Microcellular Systems Limited Accruals Schedule dated 31st March
2000
------------------------------------------------------------------------------
General Microcellular Systems Limited Sales Backlog as at 31st March 2000
------------------------------------------------------------------------------
General Letter dated 1st May 2000 to Simms Duncan from Monte Egeland
------------------------------------------------------------------------------
General Schedule ID1 Text describing locations
------------------------------------------------------------------------------
General VIIB4 List of Competitors Nos. 1 - 7
------------------------------------------------------------------------------
General VIIB5 Press Kit, Current Brochures, Standard Price List and Video
------------------------------------------------------------------------------
General Schedule headed Microcellular Systems Limited Customer Contact List
detailing Customer Phone, Fax and Contact Addresses and the turnover
to March 2000 - This list top 15 customers Microcellular Systems
------------------------------------------------------------------------------
General Microcellular Systems Profit & Loss Account quarter ended 31st
December 1999
------------------------------------------------------------------------------
General Microcellular Systems Profit & Loss Account quarter ended 31st March
2000
------------------------------------------------------------------------------
General Microcellular Systems Profit & Loss Account quarter ended 30th
September 1999
------------------------------------------------------------------------------
General Letter dated 6th May 2000 to Simms Duncan from Monte Egeland
enclosing additional material requested by Robin Foor
------------------------------------------------------------------------------
General Schedule showing Microcellular Systems USA 401K profit sharing plan
and trust client summary for 1st January 2000 to 31st March 2000
------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
------------------------------------------------------------------------------
General Booklet containing documentation relating to a company purchase from
ADC on 8th July 1999. Index of Contents attached
</TABLE>
CLOSING CHECKLIST
SALE OF SHARES OF ADC MICROCELLULAR SYSTEMS LIMITED (UK)
BY ADC TELECOMMUNICATIONS, INC.
TO MICROCELLULAR SYSTEMS LIMITED (IRELAND)
CLOSING INFORMATION
Closing Date: July 8, 1999
Parties: ADCT (ADC Telecommunications, Inc.)
ADCMS (ADC Microcellular Systems Limited)
Microcellular Ireland (Microcellular Systems
Limited)
PRE-CLOSING TRANSFERS/ACTIONS:
1. Assumption Agreement (by Wireless from ADCMS)
Transferring any excluded liabilities
2. Assumption Agreement (by ADCMS from ADCT and all Affiliates)
Transferring all GMS Business liabilities
3. Redesignation of San Diego employees to ADCMS
4. Corporate Documents (ADCMS)
i) Shareholder Resolutions Approving Name Change
ii) Resolutions of Board Approving Transaction
TRANSACTION/CLOSING DOCUMENTS:
a. Share Purchase Agreement
b. Disclosure Schedules
Schedule 3(g) - Record and Beneficial Owner of Shares
Schedule 3(h) - Existing ADCMS Assets
Schedule 6(d) - Listing of ADCMS Employees
Schedule 6(e) - Terms of Beijing Sublease
Schedule 6(i) -1- Bill of Sale and Receipt for Debt
Payment (Wireless/ADCMS)
List of Excluded Assets
List of Transferred Assets
Schedule 6(i) -2- List of Jobs to Add to Wireless Transfer
Schedule 6(m) - Employee Incentives
c. Bill of Sale and Receipt for Debt Payment (Wireless Asset
Transfers)
Listing of Excluded Assets
Listing of Transferred Assets
d. Intercompany Financing Debt Waiver Agreement
e. Promissory Note
------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
f. Security Agreement
Collateral Description
Location of Collateral Listing
g. UCC Financing Statements
California UCC - 1
h. Officer's Certificate (Microcellular Ireland)
Satisfaction of Closing Conditions
i. Officer's Certificate (ADCT)
Satisfaction of Closing Conditions
j. Secretary's Certificate (Microcellular Ireland)
Incumbency of Officers and Directors
Certification of Resolutions
k. Certified Memorandum of Incorporation
Confirmation of Authority to Conduct Business
l. Resignation of ADCMS Officers and Directors (excluding Mike
Fitzgerald)
Schofield
Baker
Fisher
Bodart
m. Form 288B Change in Director Form
n. Stock Transfer Form (ADCMS) in favour of Microcellular Ireland
o. Reconciliation of Payments
------------------------------------------------------------------------------
<TABLE>
<S> <C>
------------------------------------------------------------------------------
3.1 Articles of Incorporation of Microcellular Systems U.S.A.
------------------------------------------------------------------------------
3.1 Fax dated 24th January 2000 to George Schultz from Monte Egeland
requesting Mike Fitzgerald and David Jones to be added to the list
of directors of the company
------------------------------------------------------------------------------
3.1 Schedule IC1 List of Directors for Ireland Holding Company and
Ireland, U.K. and U.S.A. operating companies
------------------------------------------------------------------------------
3.1 Schedule IC2 Name and Address of Microcellular Systems Limited
General Council in Ireland
------------------------------------------------------------------------------
3.1 Schedule IC3 Corporate Structure of Microcellular Systems Limited
and subsidiary companies
------------------------------------------------------------------------------
3.1 Schedule ID4 China Representative Office Registration Certificate
------------------------------------------------------------------------------
3.1 Letter dated 17th April 2000 from Monte Egeland "To Whom it May
Concern" Subject: Official Statement of Relationship between ADC and
Microcellular Systems and Certificate of Incorporation and Change of
Name Company No. 3348785 re ADC Microcellular Systems Limited
------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
3.1.(b) Certificate of Incorporation and Change of Name for ADC
Microcellular Systems Limited
------------------------------------------------------------------------------
3.1.(b) Memorandum & Articles of Association of ADC Microcellular Systems
Limited (U.K. Company)
------------------------------------------------------------------------------
3.1.(b) Certificate of Incorporation and Change of Name Marksway Limited
------------------------------------------------------------------------------
3.1.(b) Memorandum & Articles of Association of Microcellular Systems
Limited Company No. 303626
------------------------------------------------------------------------------
3.1.(b) Certificate of Incorporation of Microcellular Systems Limited,
Registration No. 303626
------------------------------------------------------------------------------
3.1.(b) Certificate of Incorporation of Microcellular Systems (Ireland)
Limited, Registration No. 312802
------------------------------------------------------------------------------
3.1.(b) Memorandum & Articles of Association of Microcellular Systems
(Ireland) Limited
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.1(d) Copy letter dated 14th February 2000 from Microcellular Systems
Limited to The Board of Directors Proplyon Limited signed by Mike
Fitzgerald and Declan Hogan
------------------------------------------------------------------------------
3.1(d) Letter dated 17th February 2000 from Hogan Associates addressed
to Mike Fitzgerald
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.3 Schedule of Shareholders and related percentage shareholdings
each
------------------------------------------------------------------------------
3.3 Schedule showing all Treasury Stock
------------------------------------------------------------------------------
3.3 Copy of Subscription Agreement re "A" Ordinary Shares between
Shannon Free Airport Development Company Limited and
Microcellular Systems Limited
------------------------------------------------------------------------------
3.3/3.10(a) Put and Call Option Agreement between Microcellular Systems
Limited and Shannon Free Airport Development Company Limited
dated 29th September 1999
------------------------------------------------------------------------------
3.3/3.10(a) Copy of Option Agreement entered into between Microcellular
Systems Limited and Pearse Boyce
------------------------------------------------------------------------------
3.33.10(a) Copy of Option Agreement between Microcellular Systems Limited
and Robert Dennison
------------------------------------------------------------------------------
3.3/3.10(a) Copy of Option Agreement between Microcellular Systems Limited
and Andrew O Rorke
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.5 Microcellular Systems U.S.A. Minutes of Board Meetings held 4th
February 2000 at 12.00 a.m.
------------------------------------------------------------------------------
3.5 Minutes of Microcellular Systems Board of Directors Meeting,
Cannes, France, 3rd February 2000
------------------------------------------------------------------------------
3.5 Microcellular Systems Limited Minutes of Board of Directors held
at Centennial Court, Minutes signed on 21st January 2000
------------------------------------------------------------------------------
3.5 Minutes of Board of Directors Meeting of Microcellular Systems
Limited held on 19th January 2000 at 10.00 a.m.
------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
3.5 Microcellular Systems Limited's company number 3345785 Minutes of
written Resolution of sole shareholder
------------------------------------------------------------------------------
3.5 Microcellular systems Board of Directors Meeting Tralee, Co.
Kerry 29th September 1999
------------------------------------------------------------------------------
3.5 Letter dated 13th March 2000 from Companies House, accounts
reminder notice, this states the accounts from 1st August 1998 to
31st July 1999 must be delivered to Companies House no later than
31st May 2000
------------------------------------------------------------------------------
3.5 Companies House Penalty Notice Invoice amount L1,000 dated 24th
March 00
------------------------------------------------------------------------------
3.5 Letter dated 31st January 2000 from Companies House addressed to
Microcellular Systems Limited
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.11/3.15(a)(ii) Copy Lease Agreement between Kerry Innovation Centre, Tralee
and Mike Fitzgerald of Microcellular Systems Limited.
------------------------------------------------------------------------------
3.11/3.15(a)(ii) VIB USA Lease at 6640 & 6650 Lusk Boulevard, San Diego
------------------------------------------------------------------------------
3.11/ China Lease for Representative Office at East Gate Plaza in
3.15(a)(ii) Beijing (in Chinese)
------------------------------------------------------------------------------
3.11/3.15(a)(i) Reference 8a Business Property Statement
------------------------------------------------------------------------------
3.11/3.15(a)(ii) Copy of Modified Triple Net Lease dated 3rd April 2000 less
RAOPP Acquisition Corps to Lessee Microcellular Systems USA
------------------------------------------------------------------------------
3.11/ Letter from Shannon Development to Bart Kane confirming
3.15 (a)(ii) allocation of 5,000 square feet of office space at
Enterprise House for Microcellular Systems Limited
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.15 Letter dated 7th February 2000 from Inovapp Incorporated to
Microcellular Systems Kerry Innovation Centre setting out
statement of work to be carried out by Inovapp
------------------------------------------------------------------------------
3.15 Reference 11a Copy of Contract from Best Maintenance Inc.
------------------------------------------------------------------------------
3.15 Estimate / Contract for Maintenance Services dated 18th April
2000
------------------------------------------------------------------------------
3.15 Copy Contract from Edison Security Services dated 17th April
2000
------------------------------------------------------------------------------
3.15 401K Record Keeping Services copy of Share Purchase Agreement
between ADC Telecommunications and Microcellular Systems
completed on 8th July 1999 with schedule enclosed showing
contents
------------------------------------------------------------------------------
3.15 Copy of Maintenance Agreement for Minolta Business Systems
signed by Sharon Rosario on 15th March 2000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.15(a) Copy Guarantee and Indemnity between Microcellular Systems
Limited and Ulster Bank Markets Limited signed by Mike
Fitzgerald, witnessed by Bart Kane
------------------------------------------------------------------------------
3.15(a) Guarantee of obligations and indemnification Agreement between
------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
Microcellular Systems U.S.A. and Ulster Bank Markets Limited
executed 26th October 1999 signed by Mike Fitzgerald
------------------------------------------------------------------------------
3.15(a) Copy Mortgage Debenture between Microcellular Systems Limited
registered number 3348785 and Ulster Bank Markets Limited signed
by Mike Fitzgerald, witness Bart Kane
------------------------------------------------------------------------------
3.15(a) Copy letter dated 26th October 1999 from Ulster Bank Markets to
Declan Hogan
------------------------------------------------------------------------------
3.15(a) Copy Facility Letter dated 26th October 1999 for Microcellular
Systems Limited: Address: 13, Herbert Street, Dublin 2.
------------------------------------------------------------------------------
3.15(a) Copy Financing Statement for Microcellular Systems U.S.A. signed
by Mike Fitzgerald
------------------------------------------------------------------------------
3.15(a) Exhibit "A" to U.C.C. - 1 Financing Statement Microcellular
Systems U.S.A.
------------------------------------------------------------------------------
3.15(a) Copy of signing pages of Facility Letter dated 26th October 1999
from Ulster Bank Markets, Corporate Banking signed by Mike
Fitzgerald, Ian Walter on behalf of Microcellular Systems
Limited, ADC Microcellular Systems Limited and Microcellular
Systems U.S.A.
------------------------------------------------------------------------------
3.15(a) Copy Document Charge and Deposit between Microcellular Systems
Limited and Ulster Bank Markets Limited, currently being
finalised May 2000
------------------------------------------------------------------------------
3.15(a) Copy Assignment between Microcellular Systems Limited and Ulster
Bank Markets Limited comment hand-written currently being
finalised May 2000
------------------------------------------------------------------------------
3.15(a) Letter dated 25th April 2000 addressed to The Directors,
Microcellular Systems Limited, 13, Herbert Street setting out
terms and conditions applicable to facilities (a) and (b) from
Ulster Bank Markets
------------------------------------------------------------------------------
3.15(a) Letter dated 25th April 2000 to The Directors, Microcellular
Systems Limited confirming Ulster Bank Markets opening facility
of U.S.$1.5 million
------------------------------------------------------------------------------
3.15(a) Letter dated 8th April 2000 addressed to Mr. Jack Burke, Company
Secretary, Shannon Development, Shannon, Co. Clare re research
technology and innovation initiative - RTI.
------------------------------------------------------------------------------
3.15(a) Letter dated 8th March 2000 to Mr. Mike Fitzgerald detailing
estimated cost of projects to be grant-aided and detailing
grants applicable to each project
------------------------------------------------------------------------------
3.15(a) Copy letter of acceptance signed by Mike Fitzgerald of related
grant of IRL125,000
------------------------------------------------------------------------------
3.15(a) Shannon Development Schedule of General Conditions applying to
RTI funded by European Operational Programme 1994-1999
------------------------------------------------------------------------------
3.15(a) Copy Employment Grant Agreement maximum grant IRL270,000 between
Shannon Free Airport Development Company Limited and
Microcellular Systems Limited signed by Mike Fitzgerald
------------------------------------------------------------------------------
3.15(a) Copy letter from Jack Burke, Company Secretary, Shannon
Development outlining proposed Management Development Grant
Module IV dated 6th December 1999
------------------------------------------------------------------------------
3.15(a) Letter dated 21st December 1999 addressed to Jack Burke from
Mike Fitzgerald confirming the acceptance of the Management
Development Grant
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.15(a)(i) Pico node Service Agreement Project Agreement No. 020544 dated
17th March 2000 between (a) Nortel Networks plc. and (b)
Microcellular Systems Limited
------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
3.15(a)(i) Schedule IC7 Letter of Intent with Superway dated 17th August
1999
------------------------------------------------------------------------------
3.15(a)(i) Schedule IC7 Memorandum of Understanding between Microcellular
Systems Limited and Composite Optics Incorporated
------------------------------------------------------------------------------
3.15(a)(i) IIC5 TELOS Microcellular OEM Purchase re Seller Agreement
(draft)
------------------------------------------------------------------------------
3.15(a)(i) IID3 Tajikistan (Telos) financing for hiPower BSS Network.
------------------------------------------------------------------------------
3.15(a)(i) China - Henan Van Contract, Superway/Hubei Contract USA-
Interwave Services contract; USA-Superway LOI for JV
------------------------------------------------------------------------------
3.15(a)(i) VIIB2 China - Distributor agreement with Superway, MOU with
Letter of Authorisation for Superway, Agent Agreement - Beijing
Link; USA - Synopsys Consulting Agreement (draft), Letter of
Authorisation for Vidar-SMS; China - Agents Agreements -
Zheijiang Signal
------------------------------------------------------------------------------
3.15(a)(i) Copy of Contract between ADC Microcellular Systems and Barakash
Telecommunications Company Somalia Limited for the supply of GSM
Macro Equipment for the Hargeysa and Bososa Networks in Somalia.
This is signed by Michael Fitzgerald on 5th January 1999 on
behalf of ADC Telecommunications Inc.
------------------------------------------------------------------------------
3.15(a)(i) Copy of Frame Agreement between Cosmote - Mobile
Telecommunications SA and Microcellular Systems S.A. for the
supply of GSM Wireless Office Networks dated March 2000 signed
by Alastair Froggett on 31st March 2000
------------------------------------------------------------------------------
3.15(a)(i) OEM Purchase Re-Seller Agreement between Microcellular Systems
and Telus Engineering Inc. dated 8th June 2000 signed by Monte
Egeland.
------------------------------------------------------------------------------
3.15(a)(i) Copy of Professional Services Agreement dated 30th April between
African Wireless Inc. the Dellaware Corporation and
Microcellular Systems Limited.
------------------------------------------------------------------------------
3.15(a)(i) Copy of OEM Purchase Agreement between ADC Telecommunications
Sales Inc. and Microcellular Sales Systems Limited signed by
Monte Egeland dated 21st April 2000
------------------------------------------------------------------------------
3.15(a)(i) Copy of General Terms and Conditions regarding hardware and
software shipped by Ericsson.
------------------------------------------------------------------------------
3.15(a)(i) Copy of Order acknowledgement from Ericsson totalling $7,677.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.15(a)(vi) Reciprocal Confidentiality Agreement between Microcellular
Systems Limited and SSBCCSCH
------------------------------------------------------------------------------
3.15(a)(vi) Non-Disclosure Agreement dated 14th January 2000 between
Ericsson Consulting Limited and Microcellular Systems Limited
------------------------------------------------------------------------------
3.15(a)(vi) Microcellular Systems Limited reciprocal Confidentiality
Agreement between Microcellular Systems Limited and Advent
Communications Limited
------------------------------------------------------------------------------
3.15(a)(vi) Reciprocal Confidentiality Agreement between Microcellular
Systems Limited and Mega Hertz Communications Limited
------------------------------------------------------------------------------
3.15(a)(vi) Reciprocal Confidentiality Agreement between Microcellular
Systems Limited and Dytecna Limited
------------------------------------------------------------------------------
3.15(a)(vi) Confidentiality Non-Disclosure Agreement between Microcellular
Systems Limited and Interwave Communications International
Limited
------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
3.16 Schedule showing Top 10 Customer Accounts starting with Cosmote
------------------------------------------------------------------------------
3.16 VIIA1 Top Five Suppliers (Matman. P...-Com. Will-burt Innovapp,
J-Mark
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.17 VA7 Application for Directors and Officers Insurance (verbal
approval for coverage received 5th January 2000
------------------------------------------------------------------------------
3.17 Admiral Insurance Company Policy No. A99AG06958 Commercial
General Liability coverage.
------------------------------------------------------------------------------
3.17 Copy Policy Workers Compensation Employers Liability Insurance
Policy, Policy No. NWC636028
------------------------------------------------------------------------------
3.17 Golden Eagle Insurance Corporation Policy No. CCP552876
------------------------------------------------------------------------------
3.17 Fax dated 13th January 2000 from Southern California Regional
Office confirming all risk of direct physical loss from an
external cause
------------------------------------------------------------------------------
3.17 Schedule of Insurance Policies to be PAGE 4
------------------------------------------------------------------------------
3.17 Sigma Policy International Advantage Commercial Insurance
Policy, Policy No. PHF054891
------------------------------------------------------------------------------
3.17 Printout of payments made to insurance company Microcellular
Systems Limited with insurance detail 1st July 1999 through 1st
May 2000
------------------------------------------------------------------------------
3.17 Sigma Insurance Company of Europe, Liability Policy
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.18 Reference 8a Employers Quarterly Federal Tax Return to 30th
September 1999
------------------------------------------------------------------------------
3.18 Schedule ID3 EIN for US Corporation
------------------------------------------------------------------------------
3.18 VIIIA USA - Employer Withholding Tax
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.19(a) Sharon Ravario 6,000 share options
------------------------------------------------------------------------------
3.19(a) Dan Lambert 6,000 share options
------------------------------------------------------------------------------
3.19(a) Suresh Koppolu 6,000 share options
------------------------------------------------------------------------------
3.19(a) James Kempton 6,000 share options
------------------------------------------------------------------------------
3.19(a) Paul Williams 300 share options
------------------------------------------------------------------------------
3.19(a) Betty Zhao 300 share options
------------------------------------------------------------------------------
3.19(a) Jerry Hong 300 share options
------------------------------------------------------------------------------
3.19(a) Carol Zhang 1,500 share options
------------------------------------------------------------------------------
3.19(a) Frank Lieman Jnr. 600 share options
------------------------------------------------------------------------------
3.19(a)/ Section VB1 USA 401K Plan Paycheck and Compliance Testing
3.19(c)(ii) documentation
------------------------------------------------------------------------------
Each letter sets out the conditions applicable to each
option
------------------------------------------------------------------------------
3.19(a)/(c)(ii) Pay cheques 401K Record Keeping services employees census
report
------------------------------------------------------------------------------
3.19(a)/(c)(ii) Schedule pay cheques Record Keeping Services actual
deferral and contribution percentage tests.
------------------------------------------------------------------------------
3.19(a)/3.19(c)(v) VB2 USA Medical/Dental Plans and Section 125 Flexible
Benefit Plan
------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
3.19(b) Alan Brown Inc. Consulting Agreement signed by Monte Egeland
dated 21st April 2000
------------------------------------------------------------------------------
3.19(b) Alan Brown Inc. Consulting Agreement signed by Monte Egeland
dated 4th May 2000
------------------------------------------------------------------------------
3.19(b) Company Organisation Chart setting out list of employees and
positions within the Company
------------------------------------------------------------------------------
3.19(b) Copy Service Contract signed by Alastair Froggett dated 29th
September 1999
------------------------------------------------------------------------------
3.19(b) Copy Service Contract signed by David Jones
------------------------------------------------------------------------------
3.19(b) Copy Service Contract signed by Ian Walter
------------------------------------------------------------------------------
3.19(b) Copy Service Contract signed by Mike Fitzgerald
------------------------------------------------------------------------------
3.19(b) Copy Service Contract signed by Monte Egeland
------------------------------------------------------------------------------
3.19(b) COPY ADC Microcellular Systems Employee Handbook dated 21st
April 1998
------------------------------------------------------------------------------
3.19(b) VA8 List of Employees of entire organisation with salary
structure and other compensation benefits relevant at April
2000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
3.22 Schedule ID4 California Sellers' Permit Beijing approval from
Municipal Foreign Economic Relations and Trade Commission
------------------------------------------------------------------------------
3.22 IVA4 900 Mhz 2W and 8W radio transmission equipment Type
Approval Certificates with transfer to Microcellular Systems
900 and 1800 Network Access Applications
------------------------------------------------------------------------------
3.22 IVA5 Experimental License for San Diego 900, 1800 and 1900 Mhz
------------------------------------------------------------------------------
</TABLE>
<PAGE>
PART 3.2(b)
CONSENTS AND GOVERNMENTAL AUTHORIZATIONS
Irish Ministry of Enterprise & Employment, under the Mergers and Acquisitions
Act of 1978, as amended.
<PAGE>
PART 3.2(c)
EXCEPTIONS TO NO CONFLICT
<PAGE>
PART 3.3
FULLY-DILUTED CAPITAL STRUCTURE
The Company owns 20% of Propylon Limited.
<PAGE>
PART 3.6
ACCOUNTS RECEIVABLE
<PAGE>
PART 3.8
EXCEPTIONS TO BALANCE SHEET LIABILITIES
<PAGE>
PART 3.10
EXCEPTIONS TO ORDINARY COURSE OF BUSINESS
<PAGE>
PART 3.11
LIST OF LEASE AGREEMENTS AND PRINCIPAL TERMS
<PAGE>
PART 3.13(b)
LIST OF INTELLECTUAL PROPERTY AND ROYALTIES
<PAGE>
PART 3.13(c)
EXCEPTIONS TO FREE AND CLEAR TITLE
<PAGE>
PART 3.15(a)
LIST OF CONTRACTS AND PRINCIPAL TERMS
<PAGE>
PART 3.15(b)
EXCEPTIONS TO EFFECTIVENESS OF CONTRACTS
<PAGE>
PART 3.16
KEY CUSTOMERS AND SUPPLIERS
<PAGE>
PART 3.17
LIST OF INSURANCE POLICIES, PRINCIPAL TERMS, AND CLAIMS
<PAGE>
PART 3.18
EXCEPTIONS TO TAX REPRESENTATIONS
<PAGE>
PART 3.19(a)
LIST OF EMPLOYEE BENEFITS PLANS AND SIMILAR OBLIGATIONS
<PAGE>
PART 3.19(b)
LIST OF ALL EMPLOYEES AND OTHER WORKERS
<PAGE>
PART 3.19(d)
EXCEPTIONS TO EMPLOYMENT OBLIGATIONS
<PAGE>
PART 3.20(b)
COLLECTIVE BARGAINING AGREEMENTS
<PAGE>
PART 3.21
EXCEPTIONS TO ENVIRONMENTAL COMPLIANCE
<PAGE>
PART 3.22(a)
EXCEPTIONS TO LEGAL COMPLIANCE
<PAGE>
PART 3.22(b)
LIST OF GOVERNMENTAL AUTHORIZATIONS
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PART 3.23
PROCEEDINGS
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PART 3.27
ADDITIONAL REPRESENTATIONS AND WARRANTIES
PART 3.27
SPECIFIC WARRANTIES RELATING TO MICROCELLULAR SYSTEMS LIMITED AND MICROCELLULAR
SYSTEMS IRELAND LIMITED, HEREINAFTER COLLECTIVELY CALLED 'THE COMPANY' WHICH
EXPRESSION SHALL REFER TO EITHER OR BOTH AS THE CONTEXT SO ADMITS.
The Warranties in this Schedule are the Specific Warranties relating to
Microcellular Systems Limited and Microcellular Systems Ireland Limited.
In this Schedule, "Encumbrance" includes any charge, debenture, mortgage,
pledge, lien, assignment, hypothecation, security interest, title retention
or other security agreement or arrangement.
1. CAPACITY AND AUTHORITY
1.1 INCORPORATION AND EXISTENCE
The Company is a company duly incorporated and validly existing
under the laws of Ireland and is duly qualified to do business in
the jurisdictions in which the transaction of its business makes
such qualification necessary.
1.2 POWER AND AUTHORITY
All corporate or personal action required by the Sellers validly
and duly to authorise the execution and delivery of, and to
exercise all rights and perform their obligations under the
Documents has been duly taken and each of the Sellers has the
legal right and full power and authority to execute and deliver,
and to exercise his or her rights and perform his or her
obligations under the Documents.
The Company has the legal right and full power and authority to
carry on its business and activities as currently being carried
on.
1.3 BINDING AGREEMENTS
All Documents issued, entered into or executed, or to be issued,
entered into or executed, by the Sellers will, when executed,
constitute valid and binding agreements of the relevant Seller(s),
enforceable in accordance with their respective terms.
2. INFORMATION AND THE SELLERS
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2.1 THE AGREEMENT AND THE SCHEDULES
All information set out in this Agreement and in the Schedules is
true, complete and accurate.
2.2 THE SELLERS
(a) No liability has been incurred, directly or indirectly, by
the Company to any Seller or to any officer of the Company
(or any person connected with it) or by any Seller (or
other such person) to the Company.
(b) There is not outstanding, and there has not at any time
during the last three years been outstanding, any
arrangement to which the Company is a party and in which
any officer or any person connected with any of them is or
has been interested, whether directly or indirectly.
(c) No Seller nor any person connected with any Seller has any
interest, directly or indirectly, in any business, firm or
company which has a close trading relationship with or is
in competition with the Company.
(d) The Company has not made any gift of any kind to any Seller
or to any person connected with any Seller or sold any
property to any Seller or any such person at a price which
is less than the market value thereof other than in arms
and length.
3. SHARES, SUBSIDIARIES, CONSTITUTION, REGISTERS, RETURNS, RECORDS
3.1 THE SHARES
(a) The Sellers are the sole legal and beneficial owners of the
Shares. The registers of members of the Company contains
complete and accurate records of its members from time to
time and all issues and transfers of shares in the capital
of the Company have been registered in accordance with the
articles of association of the Company from time to time in
force, all such transfers being duly stamped prior to
registration.
(b) The Shares comprise the whole of the allotted and issued
share capital of the Company. There are no shares issued
or allotted in the Company which are not legally and
beneficially owned by the Sellers or the Company.
(c) There is no Encumbrance, nor is there any agreement,
arrangement or obligation to create or give any
Encumbrance, on, over or affecting any of the shares or
unissued shares of the Company and no claim has been
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made by any person (including the Company) to be entitled
to any Encumbrance.
(d) Save as provided in this Agreement:
(i) there is no agreement, arrangement or obligation in
force which calls for the present or future
allotment, issue or transfer of, or the grant to any
person of the right (whether conditional or
otherwise) to call for the allotment, issue or
transfer of, any share or loan capital of the
Company (including, without limitation, any option
or right of pre-emption or conversion in the
Company); and
(ii) no share or loan capital has been created, allotted,
issued, acquired, repaid or redeemed, or agreed to
be created, allotted, issued, acquired, repaid or
redeemed, by the Company since the
April 30, 2000 balance sheet.
All rights and interests of every kind existing in respect
of the Shares and the Retained Shares are valid and
enforceable by action or legal proceeding or otherwise.
(e) SUBSIDIARIES, ASSOCIATES AND BRANCHES
The Company does not have any subsidiary or subsidiary
undertaking, other than Microcellular Systems USA and
Microcellular Systems, Ltd. (U.K.).
3.2 CONSTITUTION, REGISTERS, RETURNS, RECORDS
(a) The copies of the memorandum and articles of association of
the Company already made available to the Purchaser are
accurate copies of those documents in force on the date of
the Agreement and have annexed thereto or incorporated
therein a copy of every resolution or agreement to which
section 143 of the Companies Act, 1963 applies and all the
terms, particulars, resolutions and other documents
required to be delivered by the Company to the Registrar of
Companies in Ireland have been duly delivered to the
Registrar and all appropriate fees in connection therewith
duly paid and discharged.
(b) All registers, minute books and other statutory books
required to be kept by the Company pursuant to the
Companies Acts, 1963 to 1990 have been properly kept,
contain a true, complete and accurate record of the matters
with which they should deal and no notice or allegation has
been received that any of them is incorrect or should be
rectified.
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(c) All returns, particulars, resolutions and other documents
required to be delivered by the Company to the Register of
Companies or any governmental or other authorities have
been properly and correctly prepared and so delivered.
(d) There is no power of attorney given by the Company in force
and no outstanding authority by which any person may enter
into any agreement, arrangement or obligation to do
anything on behalf of the Company (other than any authority
of its employees and directors to enter into agreements in
the ordinary and usual course of their duties).
(e) The Company has maintained proper records of its activities
including all requisite books of account (reflecting in
accordance with generally accepted accounting practices all
the financial transactions of the company or to which it
has been a party) minute books registers and records all of
which are up to date complete and accurate in all respects
and these and all other deeds and documents (properly
stamped where necessary) belonging to the Company and its
seal are in the possession of the Company.
(f) The Company does not have any of its records, systems,
controls, data or information recorded, stored maintained,
operated or otherwise dependent upon or held by any means
(including any electronic mechanical or photographic
process whether computerised or not) which (including all
means of access thereto and therefrom and use thereof) are
not under the exclusive ownership and direct control of the
Company, and there has been no breach of any service or
maintenance contract relevant to any such electronic,
mechanical or photographic process or equipment whereby any
person or body providing services or maintenance thereunder
may have the right to terminate such service or maintenance
contract.
(g) The Company has not received any notices from the Data
Protection Commissioner.
(h) There has been no breach of any service or maintenance
contract relevant to any such electronic, mechanical or
photographic process or equipment of or used by the Company
whereby any person or body providing services or
maintenance thereunder may have the right to terminate such
service or maintenance contract.
4. ACCOUNTS
4.1 GENERAL
(a) The Accounts have been prepared in accordance with the laws
of Ireland, on a proper and consistent basis and in
accordance with the
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Companies Acts, 1963 to 1990 and the European Communities
(Companies: Group Accounts) Regulations, 1992 and with
generally accepted accounting standards, principles and
practices in Ireland and in accordance with all
applicable Statements of Standard Accounting Practice,
and all applicable Financial Reporting Standards issued
by the Accounting Standards Board and have been audited
in accordance with all applicable Auditing Standards,
Auditing Guidelines and other pronouncements issued or
made from time to time by the Auditing Practices
Committee or the Auditing Practices Board.
(b) No change in accounting policies has been made in preparing
the accounts of the Company for each of the financial
periods of the Company ended on the July 31, 1998 and July
31, 1999 balance sheets, except as stated in the audited
balance sheets and profit and loss accounts for these
periods.
(c) The Accounts show a true and fair view of the assets,
liabilities (including contingent liabilities), commitments
and financial position and the state of affairs of the
Company as at the April 30, 2000 and of the results and
cashflows of the Company for the financial period ending on
the April 30, 2000.
4.2 PROVISION FOR DEBTS AND LIABILITIES
Full disclosure of and full provisions for bad and doubtful debts
and all liabilities (whether actual, contingent or otherwise) and
all material financial commitments in existence at the July 31,
1998, July 31, 1999, April 30, 2000 balance sheets have been made
in the Accounts.
4.3 EXTRAORDINARY AND EXCEPTIONAL ITEMS
The results shown by the audited profit and loss accounts of the
Company for each of the financial periods of the Company ended on
the July 31, 1998 and July 31, 1999 balance sheets have not (save
as disclosed in those accounts) been affected by any extraordinary
or exceptional item or by any other circumstances rendering the
profits or losses for all or any of the periods covered by those
accounts unusually high or low.
4.4 PROVISION FOR TAXATION
The Accounts provide in full for all taxation liable to be
assessed on the Company, or for which it is or may become
accountable, in respect of any period beginning on or before the
July 31, 1998, July 31, 1999, and April 30, 2000 balance sheets
and whether or not the Company has or may have any right of
reimbursement against any other person and the Accounts provide or
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note in full for any contingent or deferred liability to taxation
for any such period.
4.5 VALUATION OF STOCKS, LONG TERM CONTRACT BALANCES AND
WORK-IN-PROGRESS
In the Accounts:
(a) Stocks were valued in the same manner adopted in the five
preceding accounting periods and on the basis of the lower
of cost and net realisable value [(as defined in clause
6.1)];
(b) all redundant and obsolete Stocks were wholly written off
and all slow moving and damaged Stocks were written down
appropriately and the value of the remaining Stock included
in the relevant balance sheets did not exceed the lower of
cost and net realisable value as at the April 30, 2000
balance sheet; and
(c) the value of the work-in-progress shown in the Accounts
properly reflects only the direct costs incurred by the
Company.
4.6 DEPRECIATION
(a) The bases and rules of depreciation and amortisation
adopted in the Accounts were the same as those adopted in
the audited accounts of the Company for the five previous
accounting periods.
(b) The Accounts make adequate provision to depreciation and
amortisation of fixed assets of the Company to the period
ended on the April 30, 2000 balance sheet were sufficient
to ensure (on the basis of proper maintenance of the assets
during their useful life) that each of the fixed assets of
the Company would be written down to residual value by the
end of its useful life.
4.7 GAINS AND BALANCING CHARGES
Except as disclosed by the Accounts and save insofar as full
provision is made therein for taxation in respect of any
chargeable gains or balancing charges which would arise or accrue
in respect of any such asset or machinery and plant on disposal
thereof at the values at which they are included, no asset is
included in the Accounts at such value that if it were obtained in
the disposal or deemed disposal of the asset a chargeable gain or
balancing charge would arise or accrue.
4.8 BOOK DEBTS
Excluding the bad and doubtful debts for which full and adequate
provision was made in the Accounts, the book debts of the Company
on Completion will be good for the full face value thereof and,
subject to the exercise of due
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diligence by the Company, will be paid in the ordinary course of
business within twelve calendar months after the Completion Date.
4.9 BOOKS AND FINANCIAL RECORDS
All the accounting books and records of the Company are in its
possession or under its control, are fully and accurately
completed in accordance with all applicable legal requirements and
are up-to-date.
4.10 MANAGEMENT ACCOUNTS
All management accounts of the Company since the April 30, 2000
balance sheet have been prepared with due care and attention and
have been prepared on a basis consistent with that adopted and on
the same assumptions as those made in preparing previous
management accounts of the Company for the preceding five
financial years and show a reasonably accurate view of the state
of affairs and profit or loss of the Company as at and for the
period in respect of which they have been prepared.
4.11 NET ASSETS
The net assets of the Company, as shown in the Accounts, are not
less than its liabilities as at the Completion Date.
5. BUSINESS SINCE APRIL 30, 2000 BALANCE SHEET
5.1 GENERAL
(a) Since the Last Accounting Date:
(i) the business and activities of the Company have been
carried on in the ordinary and usual course without
interruption, in the same manner (including, without
limitation, nature and scope) as in the year ended
on the audited July 31, 1998 Microcellular Systems
Ltd. (U.K.) balance sheet and so as to maintain the
business of the Company as a going concern;
(ii) there has been no adverse change in the financial or
trading position of the Company or the Company as a
whole; and
(iii) no individual changes in excess of 10% have occurred
in any of the assets and liabilities shown in the
Accounts and there has been no material reduction in
the value of the net tangible assets of the Company
on the basis of the valuations adopted for the
purposes of the Accounts; and
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(b) the business, profitability or prospects of the Company
have not been adversely affected by any factor not
affecting similar businesses to a like extent and there are
no factors which are likely to have such an effect.
(c) no unusual increases or decreases in Stocks or trading
which might affect the After Tax Profits figure.
5.2 SPECIFIC
Since the Last Accounting Date:
(a) The Company has not disposed of any asset (including,
without limitation, trading stock) or supplied any service
or business facility of any kind (including, without
limitation, a loan of money or the letting, hiring or
licensing of any property whether tangible or intangible)
in circumstances where the consideration actually received
or receivable or the disposal or the supply, as the case
may be, was less than the consideration which would be
deemed to have been received for the purposes of taxation;
(b) The Company has not, other than in the ordinary and usual
course of its business:
(i) acquired or disposed of, or agreed to acquire or
dispose of, any material asset; or
(ii) assumed or incurred, or agreed to assume or incur,
any material liability, expenditure or obligation;
(iii) the Company has not factored, sold or agreed to
sell, any of its debts;
(iv) the Company has not made, or agreed to make, any
capital expenditure or incurred, or agreed to incur,
any commitments involving capital expenditure;
(v) the business of the company has not been materially
and adversely affected by the termination, or any
change in the terms, of any important agreement or
by the loss of any customer or source of supply or
by any abnormal factor not affecting similar
businesses to a like extent;
(vi) no dividend or distribution (including, without
limitation, any distribution within the meaning of
the Corporation Tax Act 1976) has been declared,
paid or made by the Company except as provided in
its Accounts;
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(vii) save in the ordinary course of business no payment
has been made by the Company which will not be
deductible for corporation tax purposes either in
computing the profits of the Company or in computing
the corporation tax chargeable on the Company;
(viii) the Company has not changed its accounting reference
period;
(ix) no resolution of the Company in general meeting has
been passed (other than any resolution constituting
ordinary business conducted at an annual general
meeting);
(x) the Company has not borrowed or lent any money or
increased by an amount any secured liability or
(except in the ordinary course of its trading and
for full value) disposed of any assets or incurred
or entered into any other liability, transaction or
contract of a financial nature;
(xi) the Company has not issued or repaid or agreed to
issue or repay or to the registration of any
transfer of any share or loan capital or granted any
option in relation thereto;
(xii) the Company has not created, extended, granted or
issued or agreed to create, extend, grant or issue
any lease, tenancy, licence, mortgage, charge, lien,
encumbrance, option, debenture or other security;
(xiii) the Company has not made any unusual augmentation in
stock nor written up any fixed assets or stock;
(xiv) the Company has not written off any debts;
(xv) the Company has not done or omitted to do anything
which would entitle any third party to terminate any
contract or any benefit enjoyed by the Company or
call in any money before the normal due date
thereof;
(xvi) the Company has not passed any resolution by its
members in general meeting or made any alteration to
the provisions of its memorandum of association or
articles of association;
(c) the Company has not disposed of any assets of a capital
nature other than in the normal and ordinary course of
business; and
(d) the Company has not changed or agreed to change the terms
of employment or engagement of any officer or employee of
the
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Company who was on the 30th of April 2000 entitled to
remuneration at a rate in excess of L5,000 per annum (or
where employment commenced subsequent to the 30th of April
2000 was so entitled on the date of appointment);
6. ASSETS
6.1 TITLE, CONDITION AND SUFFICIENCY OF ASSETS
(a) All assets included in the Accounts or acquired by the
Company since the 30th of April 2000 (other than trading
stock subsequently disposed of in the ordinary and usual
course of business) and all material assets used by the
Company or which are in the reputed ownership of the
Company are:-
(i) legally and beneficially owned by the Company free
from any Encumbrance and the Company has good title
thereto and all such assets are free from any hire
purchase, credit, sale or rental agreement, lien,
option, mortgage, charge, lease, tenancy, licence,
covenant, condition, agreement or other encumbrance
whether relating to the asset itself or the use
thereof or the business carried on at the
Properties;
(ii) where capable of possession, are in the possession
or under the control of the Company free from any
agreement letting the same on hire (other than in
the normal course of the business of the Company and
in accordance with terms already disclosed to the
Purchaser) or by hire purchase or for sale on
deferred terms;
(iii) comprise all the assets, property and rights which
the Company uses for the purpose of or in connection
with its business;
(b) The plant, machinery, vehicles and all other equipment,
Stock-in-Trade, furniture, fixtures and fittings used in
connection with the business of the Company.
(i) is in good repair and condition and in satisfactory
working order, and has been regularly and properly
maintained;
(ii) is operating (or is capable of operating) safely and
without danger to any person, property or the
environment and in accordance with all relevant
licences, regulations and permits governing its use;
(iii) is not surplus to requirements and is in the
possession and control of the Company and is not
expected to require
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replacements or additions within a period of 24
months after the Completion Date;
(iv) is capable and will (subject to normal wear and
tear) remain capable throughout the respective
periods of time during which it is written down to
nil value in the accounts of the Company of doing
the work for which it was designed or purchased;
(v) comply and have complied in all material respects
with all statutes and regulations applicable
thereto; and
(vi) is not dangerous, inefficient, unsuitable or in need
of removal or replacement;
(c) Maintenance contracts are in full force and effect in
respect of all assets of the Company which it is normal or
prudent to have maintained by independent or specialist
contractors.
(d) The assets owned or leased by the Company and the
facilities and services to which it has a contractual right
comprise all the assets, facilities and services necessary
or convenient for the carrying on of the business of the
Company in the manner in which it is presently conducted.
6.2 HIRE PURCHASE AND LEASED ASSETS
The Company is not a party to, nor has it any material liability
under, any lease or hire, hire purchase, credit sale or
conditional sale agreement.
6.3 STOCKS
(a) The level of Stocks of the Company is reasonable having
regard to current and anticipated demand.
(b) The Company's Stock is in good condition and is capable of
being sold by the Company in the ordinary course of its
business in accordance with its current price list without
rebate or allowance to its customers and is adequate (and
not excessive) in relation to the current trading
requirements of its business.
7. TERMS OF TRADE AND BUSINESS
7.1 CREDITORS
The Company has paid all its creditors (including trade creditors)
in the normal course. No debt owing by the Company is unpaid as
at its due date.
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7.2 COMPUTER RECORDS
None of the records, systems, data or information of the Company
are recorded, stored, maintained, operated or otherwise wholly or
partly dependent on or held or accessible by any means (including,
without limitation, any electronic, mechanical or photographic
process whether computerised or not) which are not under the
exclusive ownership and direct control of the Company.
8. EMPLOYEES
8.1 GENERAL
(a) There is not in existence any service agreement or
employment contract with any officer or employee of the
Company nor any contracts for services nor any consultancy
agreements with the Company.
(b) There is not in existence any service agreement with any
officer or employee of the Company which cannot be
terminated by three months' notice or less without giving
rise to any claim for damages or compensation (other than a
statutory redundancy payment or statutory compensation for
unfair dismissal) and the Company has not received notice
of resignation from any key employees and there are no
commitments or undertakings to any such persons other than
as set forth in formal written agreements or contracts
already disclosed in writing to the Purchaser.
(c) Full particulars are contained in the Schedule [ ]:
(i) the total number of employees (including officers,
consultants, part time employees and agency
employees) of the Company including those who are on
maternity leave or absent on the grounds of
disability or other long term leave of absence, and
have or may have a statutory or contractual right to
return to work with the Company; and
(ii) the names of all employees (including officers,
consultants, part time employees and agency
employees) of the Company, such names being set out
in a list for the Company, such list being split
between permanent employees, part-time employees and
agency employees and having the following headings
and setting out the relevant details on each such
employee under such headings:-
(1) employee names and addresses;
(2) salaries/wages and other benefits of any
kind;
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(3) dates of birth/age;
(4) dates of commencement of employment;
(5) number of years continuous employment
(including previous employment where
relevant);
(6) participation in benefit schemes (eg VHI,
pension scheme, share scheme etc);
(7) notice entitlements;
(8) grades/positions;
(9) holiday entitlement;
(10) any other relevant terms;
and where any employee is continuously absent from
work for a period in excess of one month, the reason
for the absence.
(d) The basis of the remuneration payable to the officers or
employees of the company is the same as that in force at
the 30th of April 2000 and the Company is not obliged to
increase nor has it made any provision to increase the
aggregate annual remuneration payable to the officers and
employees by more than five per cent.
(e) There are no amounts owing to any present or former
officers or employees of the Company other than
remuneration accrued due or for disbursement of business
expenses details of which are contained in the Schedules.
(f) There is no agreement or arrangement between the Company
and any officer or employee or former employee with respect
to his employment, his ceasing to be employed or his
retirement which is not included in the written terms of
his employment or previous employment (as the case may be).
(g) The Company has maintained current and adequate records
regarding the service of each of its officers and employees
(including, without limitation, details of terms of
employment, payments of statutory sick pay, statutory
maternity pay, disciplinary and health and safety matters,
income tax and social security contribution) and
termination of employment.
(h) No officer or employee of the Company has given or received
notice terminating his or her employment.
(i) No employee or officer of the Company is assigned or
employed wholly or mainly outside of Ireland.
(j) No past employee has a right of return to work or has or
may have a right to be reinstated or re-engaged.
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(k) On or prior to Completion:
(i) all pay related social insurance contributions (both
employer's and employees') due and payable by the
Company will have been duly paid;
(ii) all amounts due to the Revenue Commissioners in
respect of deductions which have been made or which
should have been made by the Company in accordance
with PAYE regulations from time to time in force
have been deducted so that the Company will not have
any liability in respect thereof;
(iii) all certificates relating to matters referred to in
this paragraph which by law are required to be given
by employers to employees (as defined) have been
given to all employees of the Company and are true
and accurate in all material respects.
(l) There are no schemes in operation by or in relation to the
Company whereunder any employee of the Company or any other
person whatsoever is entitled to a commission remuneration
bonus or other payment of any sort calculated by reference
to the whole or any part of the turnover profits or sales
of the Company.
(m) Every employee of the Company who should have been treated
as employed for tax purposes has been so treated.
(n) The Company has not incurred any liability:
(i) for breach or termination or variation of any
service agreement with any of its officers or
employees including, without limitation, redundancy
payments, protective awards, compensation for
wrongful dismissal or unfair dismissal or failure to
comply with any order for the reinstatement or
re-engagement of any officer or employee; and
(ii) for breach or termination of any consultancy
agreement.
8.2 PAYMENTS ON TERMINATION
Except as disclosed in the Accounts:
(a) no liability has been incurred by the Company for breach or
termination of any service agreement with any of its
employees including, without limitation, redundancy
payments, protective awards, compensation for wrongful
dismissal or unfair dismissal or failure to comply with any
order for the reinstatement or re-engagement of any
employee;
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(b) no liability has been incurred by the Company for breach or
termination of any consultancy agreement or other contract
for services; and
(c) the Company has not made or agreed to make any payment or
provided or agreed to provide any material benefit to any
present or former director or employee of the Company or
any dependant of any present or former director or employee
in connection with the actual or proposed termination or
suspension of employment or variation of any service
agreement of any present of former director or employee.
8.3 NON-ALLOWABLE PAYMENTS
The Company has not made, nor has it agreed to make any payment to
or provided or agreed to provide any benefit for any present or
former director or employee which is not allowable as a deduction
for the purposes of Taxation.
8.4 LIABILITIES FOR EMPLOYEES
The Company is not liable to pay any industrial training levy nor
has it outstanding any undischarged liability to pay to any
governmental or regulatory authority in any jurisdiction any
contribution, Taxation or other impost arising in connection with
the employment or engagement of employees or directors by it.
8.5 CLAIMS BY EMPLOYEES
There are no claims pending or threatened against any of the
Company;
(a) by an employee or workman or third party, in respect of an
accident or injury which is not fully covered by insurance;
or
(b) by an employee or director in relation to his terms and
conditions of employment or appointment.
8.6 COMPLIANCE WITH STATUTES
The Company has in relation to each of its officers and employees
(and, so far as relevant, to each of its former officers and
employees) complied in all material respect with:
(a) all obligations imposed by it by Article 119 of the Treaty
of Rome and all statutes, regulations and codes of conduct
and practice relevant to the relations between it and its
employees or any trade union, and has maintained current,
adequate and suitable records regarding the service of each
of its employees;
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(b) all collective agreements, customs and practices for the
time being dealing with such relations or the conditions of
service of its employees;
(c) all relevant orders and awards made under any relevant
statute, regulation or code of conduct or practice
affecting the conditions of service of its employees;
(d) all obligations imposed by the European Communities
(Safeguarding of Employees' Rights on the Transfer of
Undertakings) Regulations, 1980 in relation to any sale,
purchase or other transfer coming within the terms of those
Regulations; and
(e) all obligations imposed by the Safety, Health and Welfare
at Work Act, 1989.
8.7 INDUSTRIAL DISPUTES AND NEGOTIATIONS
The Company is not involved in any industrial or trade dispute or
any dispute or negotiation regarding a claim of material
importance with any trade union or association of trade unions or
organisation or body of employees, and no facts or circumstances
exist which might lead to any such dispute and during the past two
calendar years the Company has not had a strike or lockout or any
other labour dispute which has materially disrupted its business.
8.8 REDUNDANCIES AND TRANSFER OF BUSINESS
Within the period of one year ending on the date of this
Agreement, the Company has not:
(a) given notice of any redundancies to its employees and/or
the Minister for Enterprise and Employment or started
consultations in respect of redundancies with any trade
union; and
(b) been a party to any relevant transfer within the scope of
the European Communities (Safeguarding of Employees' Rights
on Transfer of Undertakings) Regulations, 1980 nor has the
Company failed to comply with any duty to inform and
consult any trade union under those Regulations.
8.9 TRADE UNIONS
Full and complete details of all recognised trade unions and all
collective bargaining or procedural or other agreements or
arrangements in existence
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relating or relevant to any of the employees of the Company and
of the current state of any negotiations with any trade union
staff association or other organisation formed for a similar
purpose which might affect the terms and conditions of
employment of any employees are set out in the Schedules.
8.10 INCENTIVE SCHEMES
The Company has not in existence nor is it proposing to introduce
any share incentive, share option, profit sharing, bonus or other
incentive, scheme for any of its consultants, officers or
employees.
8.11 TRAINING
There is no training scheme, arrangement or proposal in existence
at the date of this Agreement in relation to the Company.
90 FINANCING/LIABILITIES
9.1 INDEBTEDNESS
Except as disclosed in the Schedules, the Company has not
outstanding nor has it agreed to create or incur any loan capital,
borrowing or indebtedness in the nature of borrowing, including,
without limitation, any bank overdrafts, liabilities under
acceptances or acceptance credits.
9.2 GUARANTEES AND INDEMNITIES
(a) The Company is not a party to or has it any material
liability (including, without limitation, any contingent
liability) under any guarantee, indemnity, bond, facility
or other agreement to secure, or otherwise incur financial
or other obligations with respect to, an obligation of a
third party.
(b) None of the loan capital, borrowings or indebtedness in the
nature of borrowing of the Company is dependent on the
guarantee or indemnity of, or any security provided by, any
third party (including the Company).
9.3 EVENTS OF DEFAULT
No event has occurred or been alleged which:
(a) constitutes an event of default (howsoever described), or
otherwise gives rise to an obligation to repay under any
agreement relating to borrowing or indebtedness in the
nature of borrowing, or which would lead to any Encumbrance
constituted or created in connection with any borrowing or
indebtedness in the nature of borrowing, guarantee or
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indemnity, or which would lead to any other obligation of
the Company, becoming enforceable;
(b) would constitute such an event of default or would lead to
such security or obligation becoming enforceable with the
giving of notice or lapse of time or both; or
(c) would, or would be likely to, give rise to an obligation
for the Company to repay any monetary compensatory amounts,
export refunds, intervention payments or other like
subsidies.
9.4 GRANTS
(a) the Company is not under any liability to repay any
investment or other grant or subsidy made to it by any
body; no circumstances have arisen in which any such body
would or might be entitled to require repayment of, or
refuse an application by the company for, any such grant or
subsidy either in whole or in part and neither the
execution nor performance of this Agreement will constitute
such circumstances.
(b) Full particulars of all agreements, claims, leases and
other arrangements between the Company and any other grant
body are set out in the Schedule [ ].
9.5 CONTINUED AVAILABILITY OF FACILITIES
(a) The Schedules contain full and accurate details of all
debentures, acceptance credits, overdrafts, loan or other
financial facilities outstanding or available to the
Company (together the "FACILITIES") and there are attached
to it accurate and complete copies of all documents
relating to the Facilities.
(b) There has been no contravention of or non-compliance with
any of the provisions of such documents.
(c) No steps for early repayment of any indebtedness of the
Company has been taken or threatened.
(d) No circumstances have occurred or exist 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.
(e) None of the Facilities is dependent on a guarantee or
indemnity of or any security provided by a third party
(including of the Company).
(f) None of the Facilities may be terminated or mature prior to
its stated date of maturity as a result of the acquisition
of the Shares and/or the Retained Shares by the Purchaser
or any other thing contemplated by the Documents.
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100 INSOLVENCY
10.1 NO ORDER
No order has been made or petition presented or resolution passed
for the winding up or dissolution of the Company or for the
appointment of a liquidator or examiner to the Company.
10.2 NO RECEIVER
No receiver has been appointed by any person of the whole or any
part of the business or assets of the Company.
10.3 NOT INSOLVENT
The Company is not insolvent or unable to pay its debts.
10.4 PAYMENT OF DEBTS
The Company has not stopped paying its debts as they fall due.
10.5 NO DISTRESS ETC
No distress, execution or other process has been levied in respect
of any of the assets of the Company.
10.6 COMPOSITION OR SCHEMES ETC:
No composition in satisfaction of the debts of any of the Company,
or scheme of arrangement of its affairs, or compromise or
arrangement between it and its creditors or members or any class
of its creditors or members, has been proposed, sanctioned or
approved.
10.7 CRYSTALLISATION OF CHARGES
No event has occurred causing, or which upon intervention or
notice by any third party may cause, any floating charge created
by any of the Company to crystallise or any charge created by it
to become enforceable, nor has any such crystallisation occurred
or is such enforcement in process.
10.8 RIGHTS OF THIRD PARTIES
In relation to any property or assets held by each of the Company
under any hire purchase, conditional sale, chattel leasing or
retention of title agreement or
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otherwise belonging to a third party, no event has occurred
which entitles, or which upon intervention or notice by
the third party may entitle, the third party to repossess
the property or assets concerning or terminate the agreement
or any licence in respect of the same.
110 COMPETITION AND ANTI-TRUST
11.1 GENERAL
There is not in existence in connection with the business of the
Company any agreement arrangement or practice which infringes or
which has or should have been registered under the Restrictive
Practices Act, 1972 to 1987 (as amended) or which infringes or
which has or should have been notified to the Minister for
Enterprise and Employment, the Competition Authority and/or
European Commission under the Mergers, Takeovers and Monopolies
(Control) Act, 1978 (as amended), the Competition Act, 1991 and/or
Articles 85 or 86 of the Treaty of Rome (or any regulations or
directive made thereunder).
11.2 UNDERTAKINGS, ORDERS AND INVESTIGATIONS
(a) The Company has not given any undertaking or written
assurance (whether legally binding or not) to any
governmental authority or any authority of the European
Communities under the Treaty of Rome or any other statute
or legal instrument of Ireland or any other country and the
Company is not affected by any order or regulations made by
the Competition Authority or by any decision made by the
Commission of the European Communities.
(b) The Company has not received any process notice or
communication formal or informal by or on behalf of the
Ombudsman, the Director of Consumer Affairs, the
Competition Authority or the European Commission or any
other authority of any country or any political or
administrative sub-division thereof having jurisdiction in
anti-trust or consumer protection matters in relation to
any aspect of its business or any agreement arrangement or
practice to which it is or is alleged to be a party, nor is
or has the Company been subject to any investigation,
report or decision by any of the above mentioned persons.
11.3 COMPETITION ACT
(a) The Company is not nor has it been a party to, or engaged
in, any agreement, arrangement, decision, concerted
practice or activity which is prohibited by Section 4(1) of
the Competition Act, 1991 (the "Competition Act").
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(b) The Company has not made any notification to the
Competition Authority requesting a licence pursuant to
Section 4(2) of the Competition Act or a certificate
pursuant to Section 4(4) of the Competition Act.
(c) The Company has not committed, contrary to Section 5 of the
Competition Act, any abuse, either alone or jointly with
any other undertaking, of a dominant position within the
State or a substantial part of the State.
(d) An authorised officer appointed pursuant to Section 20 of
the Competition Act has not entered and inspected any
premises at or vehicles in or by means of which the Company
carries on business nor required the Company nor any person
employed in connection with the Business to produce any
books, documents or records and has not inspected, copied
or taken extracts from any such books, documents and
records nor required the Company nor any person to provide
any information in regard to entries in such books,
documents and records or in regard to the Company or its
business or in regard to the persons employed in connection
therewith.
(e) No petition has been presented by a person pursuant to
Section 6(1) of the Competition Act for an injunction or
declaration or damages including exemplary damages in
relation to any agreement decision, concerted practice or
action in which the Company is or has been involved nor has
any such injunction or declaration or damages been granted.
(f) No petition has been presented by the Minister pursuant to
Section 6(4) of the Competition Act for an injunction or
declaration in relation to any agreement, decision,
concerted practice or action in which the Company is or has
been involved nor has any such injunction or declaration
been granted.
(g) No investigation has been carried out by the Competition
Authority pursuant to Section 14 of the Competition Act as
to whether, in the opinion of the Authority, the Company is
in a dominant position and, if it is, whether the dominant
position is being abused and the Minister has not made an
order pursuant to Section 14(3) of the Competition Act
either (a) prohibiting the continuance of a dominant
enjoyed by the Company except on conditions specified in
the order or (b) requiring the adjustment of the dominant
position.
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11.4 MERGERS ACT
(a) Save in respect of the present transaction no order has
been made under the Mergers, Take-Overs and Monopolies
(Control) Act 1978 to 1996 (the "MERGERS ACT") which
directly or indirectly affects the business of the Company.
(b) In relation to every merger or take-over in which the
Company was involved prior to the date of this Agreement
and to which the Mergers Act applied, the Minister has
issued a statement in writing prior to completion of the
merger or take-over concerned stating that he had decided
not to make an order under Section 9 of the Mergers Act in
relation to the proposed merger or takeover.
(c) The Minister has not referred any proposed merger or
take-over in which the Company is involved and to which the
Mergers Act applies to the Competition Authority for
investigation pursuant to Section 7(b) of the Mergers Act.
(d) The Company has not been the object of a report of the
Competition Authority under Section 8(1) of the Mergers Act
stating whether, in the opinion of the Authority, a
proposed merger or takeover would be likely to prevent or
restrict competition or restrain trade in any goods or
services and would be likely to operate against the common
good.
(e) Since 3rd July, 1978 the Company has not been a party to
any transaction notifiable pursuant to section 5 of the
Mergers Act.
11.5 CONCENTRATIONS WITH A COMMUNITY DIMENSION
The Company is not nor has it been involved prior to or at the
date of this Agreement in any arrangement or transaction or
agreement which is or was a concentration with a community
dimension within the meaning of Council Regulation (EEC) No.
4064/89 of 21 December 1989 on the control of concentrations
between undertakings (the "Merger Control Regulation") and the
Company is not nor has it been involved prior to or at the date of
this Agreement in any arrangement or transaction or agreement
which at the request of a Member State has been the subject of
findings or decisions of the Commission of the European
Communities pursuant to Article 22 of the Merger Control
Regulation.
120 PENSIONS AND OTHER BENEFITS
12.1 DEFINITIONS
For the purposes of the Warranties in this paragraph 16:
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"APPROVED" means approved by the Revenue Commissioners for the
purposes of Chapter II of Part I of the Finance Act 1972 and
reference to "Approval" shall be construed accordingly;
"DEFINED CONTRIBUTION SCHEME" means a scheme under which the
amount of the benefits other than some or all of the benefits
payable on death before becoming a pensioner, payable to or in
respect of a member of the scheme is calculated by reference to
the contributions made to the scheme by and in respect of the
member;
"DISCLOSED SCHEME" means [insert name of Sellers' Scheme] and any
other agreement, arrangement, custom or practice of the Company in
operation for the payment of or contribution towards any pensions,
allowances, lump sums or other like benefits on retirement, death,
termination of employment (whether voluntary or not) or during
periods of sickness or disablement, for the benefit of any
Employee or for the benefit of the dependants of any Employee
which has been disclosed in the Schedules;
"EMPLOYEE" means any officer, former officer, employee, former
employee, consultant or former consultant of the Company.
12.2 GENERAL
(a) Except for the Disclosed Scheme, there are not in existence
(nor has any proposal been announced to establish) any
retirement, death, disability or other benefit schemes for
Employees or any dependant of any of them, nor are there
any obligations to, or in respect of, Employees or any
dependant of any of them with regard to retirement, death
or disability pursuant to which the Company is or may
become liable to make payments, and no pension, retirement
or sickness gratuity is currently being paid or has been
promised by either of the Company to or in respect of any
former officer of former employee or any dependent of it.
(b) The Disclosed Scheme is:
(i) an exempt Approved scheme and there is no reason why
the said exempt Approved status might be withdrawn
or cancelled;
(ii) a Defined Contribution Scheme.
12.3 INFORMATION RE THE DISCLOSED SCHEME
(a) Full details of each Disclosed Scheme have been given to
the Purchaser in the form of:
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(i) copies of all trust deeds, agreements, deeds, rules
and other material documents constituting and
governing or relating to the Disclosed Scheme
including, without limitation, agreements between
the Company and any Employee relating to the
provision of any of the benefits referred to in
paragraph 14.2; and such documents are up-to-date
and satisfactory to ensure continued treatment of
the Schemes as exempt approved schemes as aforesaid
(ii) copies of all explanatory booklets, announcements
and other communications to Employees relating to
the Disclosed Scheme, including (without limitation)
true and complete copies or particulars of each
deed, document, resolution, action, practice or
other matter which in relation to the Disclosed
Scheme confers or describes any improvements or
other amendments to actual, prospective or
contingent right to benefits thereunder, whether or
not yet incorporated into the documentation of the
Disclosed Scheme;
(iii) in the case of a Disclosed Scheme in relation to
which the trustees or managers are required to
obtain audited accounts, a copy of the audited
accounts of the Disclosed Scheme for the last scheme
year;
(iv) copies of all policies effected with and agreements
with any insurance company for the purposes of the
Disclosed Scheme;
(v) a list of the employees who are members of the
Disclosed Scheme with all particulars of them
relevant to their membership of the Disclosed Scheme
and necessary to establish their entitlements to
benefits; and
(vi) a copy of any agreement with any person providing
services of any nature in connection with the
Disclosed Scheme including, without limitation,
investment management or advisory services,
administration and data processing services.
(vii) a copy of the latest actuarial valuation of the
Disclosed Scheme together with notification if the
actuary who signed those valuations is not the
present actuary to the relevant Disclosed Scheme.
(b) No discretion or power has been exercised under any
Disclosed Scheme in respect of any Employee to:
(i) augment benefits;
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(ii) admit to membership any Employee who would not
otherwise have been eligible for admission to
membership;
(iii) admit to membership any Employee on terms which
provided for or envisaged the payment of a transfer
value or a transfer of assets from another scheme to
the Disclosed Scheme in a case in which the payment
or transfer has not been made or has not been made
in full;
(iv) provide a benefit which would not otherwise be
provided; or
(v) pay a contribution which would not otherwise have
been paid.
(c) All benefits (other than refunds of contributions) payable
under each Disclosed Scheme on the death of a member of the
Disclosed Scheme or during periods of sickness or
disability of the member are at the date of this Agreement
fully insured under a policy effected with an insurance
company of good repute and each member has been covered for
such insurance by such insurance company at its normal
rates and on its normal terms for persons in good health
and all insurance premiums payable have been paid.
(d) No plan, proposal or intention to amend, discontinue in
whole or in part or exercise any discretion in relation to
any Disclosed Scheme has been communicated to any member of
the Disclosed Scheme.
(e) Each Employee who has been admitted to or promised
admission to membership of any Disclosed Scheme has been
admitted or promised admission on terms which are
consistent with the continuous treatment of the Disclosed
Scheme as Approved and the substance of the terms of the
admission or promised admission have been communicated to
the Employee.
(f) The trustees of each Disclosed Schemes have legal title to
all the assets of the Disclosed Scheme and there are no
Encumbrances over any of the assets of the Disclosed
Scheme.
(g) No person holds as an asset of any Disclosed Scheme any
securities issued by, properties leased to or occupied by,
and no loans have been made out of the assets of the
Disclosed Scheme which are, at the date of this Agreement,
outstanding to, the Sellers or any company connected with
any of the Sellers.
(h) There has been no breach of the trusts of any Disclosed
Scheme and there are no actions, suits or claims (other
than routine claims for benefits) outstanding, pending or
threatened against the trustees or administrator of any
Disclosed Scheme or against the Sellers or any
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other employee participating in the Disclosed Scheme in
respect of any act, event, omission or other matter
arising out of or in connection with the Disclosed Scheme
and after making due and careful enquiries and the
Sellers are not aware of any circumstances which may
give rise to any such claim.
(i) No increase has been made to the remuneration which is
pensionable under any Disclosed Scheme of any Employee who
is or was a member of the Disclosed Scheme since the date
on which the current administrative year of the Disclosed
Scheme commenced.
(j) No discretion or power under any Disclosed Scheme has been
exercised by the trustees or administrators or the Company
or any other party and there is no obligation to do so in
respect of any of the Employees and all amounts due to the
trustees of the Scheme from the Company or otherwise in
respect of any of the Employees have been paid.
(k) Each of the Disclosed Schemes is registered with the
Pensions Board as required by the Pensions Act, 1990 and
has at all times been administered in accordance and in
full compliance with the provisions of the Pensions Act,
1990 and all other applicable laws, regulations and
requirements.
(l) All death in service benefits (other than refunds or
contributions) which may be payable under the Schemes are
fully insured at normal rates with an insurance company of
good repute.
(m) The Disclosed Schemes have at all times been operated in
accordance with their governing documentation and all
applicable laws and regulatory requirements and in
particular, the Disclosed Schemes do not contain any
provision which gives rise or could give rise to a claim
against the Company or the trustees of any of the Disclosed
Schemes under Article 119 of the Treaty of Rome or Part VII
of the Pensions Act, 1990.
(n) Every Employee who is entitled to membership of the
Disclosed Schemes has been invited to join the Disclosed
Scheme which he or she is entitled to become a member of as
of the date on which he or she became entitled. The
Company which employs a person who has joined the Disclosed
Scheme has been properly admitted to participation and the
participation of the Company has been approved by the
Revenue Commissioners.
(o) No event has happened or circumstances exist which either
has led or will lead to the Disclosed Scheme being wound-up
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(p) The trustees of the Disclosed Scheme have legal title to
all the assets of the Disclosed Scheme and there are no
Encumbrances over any of the assets of the Disclosed
Scheme.
12.4 FUNDING
(a) There is not at the date of this Agreement any contribution
to any Disclosed Scheme which has fallen due but is unpaid
and there are no factors which have caused or contributed
to any substantial deterioration in the level of funding of
the Disclosed Schemes since the date of the latest
actuarial valuations.
(b) There is set out in the Schedules a statement of the basis
on which the Company has undertaken to contribute to the
Disclosed Scheme which is a Defined Contribution Scheme and
the rate and amount of the contributions in respect of each
member of the Disclosed Scheme made in the three year
period ending on the date of this Agreement.
(c) No assurance, promise or guarantee (whether oral or
written) has been made or given to any member of any
Disclosed Scheme which is a Defined Contribution Scheme of
any particular level or amount of benefits to be provided
for in respect of him under the Disclosed Scheme on
retirement, death or leaving service and the Company may
terminate any obligation it may have to contribute to any
Disclosed Scheme which is a Defined Contribution Scheme
without incurring any liability to any member of the
Disclosed Scheme under any agreement or arrangement with
the member.
(d) The Disclosed Scheme is and will be fully funded on the
basis of service completed to the date of Completion and
salaries projected to normal retirement date.
(e) All information supplied for the purpose of the most recent
actuarial valuation or funding review of each Disclosed
Scheme was true, complete and accurate in all material
respects.
(f) Since the date of the most recent actuarial valuation or
funding review referred to in paragraph (e), all
contribution and expenses due under the Disclosed Scheme up
to the date of Completion have been paid at the rate
recommended in the most recent actuarial valuation or
funding review in respect of the Disclosed Scheme and
applied in accordance with the provisions thereof and the
trusts upon which they are to be held.
(g) The Disclosed Scheme which is a Defined Benefit Scheme is
sufficiently and effectively funded on an on-going basis
using actuarial assumptions which are within the range of
generally accepted actuarial
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practice in relation to all relevant factors (which
assumptions include, without limitation, those
specified in paragraph (t) to secure all benefits
currently, prospectively and contingently payable
under the Disclosed Scheme at least to the extent which
they have accrued at Completion.
(h) The assumptions referred to in paragraph (g) include the
following:
(i) that the members to whom the benefits relate remain
in pensionable employment under the Disclosed Scheme
until their normal pension date under the Disclosed
Scheme subject to reasonable assumptions as to
withdrawal, early retirement or death;
(ii) that each member's remuneration used for determining
benefits under the Disclosed Scheme shall be
increased in respect of the period from Completion
to the member's normal pension date or earlier
assumed date of withdrawal, early retirement or
death at a rate which is consistent with the
assumption as to the yield on investments; and
(iii) that provisions shall be made to reflect the recent
practice of the Disclosed Schemes with regard to the
provision of increases to pensions in payment and in
deferment.
12.5 COMPLIANCE
(a) Each Disclosed Scheme is Approved and the Sellers are not
aware of any circumstances which might give the Revenue
Commissioners reason to withdraw approval, or if the
Disclosed Scheme is not Approved, it has been designed so
as to be capable of receiving Approval and the Sellers are
not aware of any circumstances which might give the Revenue
Commissioners reason to withhold the grant of Approval so
as to have effect from the date of commencement of the
Disclosed Scheme.
(b) Each Disclosed Scheme has been designed to comply with, and
has been administered in accordance with, all applicable
laws including, without limitation, the Pensions Act 1990
and all relevant statutes and subordinate legislation of
Ireland and all relevant provisions of the laws of the
European Communities, and subject to all applicable laws in
accordance with the trusts, powers and provisions of the
Disclosed Scheme.
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130 COMPLIANCE WITH LAW
13.1 DIRECTORS AND OTHER OFFICERS
(a) None of the persons who at present is, or who at any time
within the last three years was, a director or officer of
the Company is, or at any material time was, ineligible to
be a director by reason of the Companies Acts, 1963 to
1990.
(b) None of the directors or other officers of the Company has
been declared by a court to be a person to whom chapter I
of part IV of the 1990 Act applies, nor has any person been
or is an auditor, director or other officer in any way,
whether directly or indirectly, concerned or taken part in
the promotion, formation or management of the Company in
breach of Section 160 of the 1990 Act.
(c) the only directors and other officers of the Company are
the persons whose names are listed in Schedule 2 and no
person is or has been a shadow director (within the meaning
of section 27 of the 1990 Act) of the Company.
13.2 UNLAWFUL PAYMENTS
The Company has not and no person for whose acts or defaults the
Company may be vicariously liable has:
(a) induced any person to enter into any agreement or
arrangement with the Company by means of any unlawful or
immoral payment, contribution, gift, or other inducement;
(b) offered or made any unlawful or immoral payment,
contribution, gift or other inducement to any government
official or employee; or
(c) directly or indirectly made any unlawful contribution to
any political activity.
13.3 GENERAL
(a) All appropriate returns and all relevant information have
been supplied by the Company to the Revenue Commissioners,
the Department of Health, the Department of Social Welfare,
the Department of Enterprise and Employment and all other
relevant governmental, regulatory, municipal and local
authorities (in any country in the world) in connection
with the business of the Company and the same were and are
complete true and accurate in all material respects.
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(b) Full details of all present negotiations with and
investigations and enquiries by any of the public
authorities referred to in the immediately preceding
paragraph concerning any material liability (or alleged
liability) actual or contingent of or any material act or
omission of the Company (or any officer, employee or agent
of the Company in such capacity) have been disclosed to the
Purchaser and in respect of all such negotiations,
investigations and enquiries full and frank disclosure of
all material facts was made to such public authorities
concerned and all information supplied to them was true and
accurate in all respects and there were and are no
circumstances which would render any such information
inaccurate untrue or misleading in any respect.
140 BROKERAGE OR COMMISSIONS
No one is entitled to receive from the Company any finder's fee brokerage
or commission in connection with this Agreement or anything contained in
it.
150 CONTRACTS AND COMMITMENTS
15.1 AGREEMENTS
The Company is not a party to nor has any liability under any long
term, onerous or unusual agreement, arrangement or obligation
including, without limitation:
(a) any agreement, arrangement or obligation which was entered
into otherwise than in the ordinary and usual course of its
business;
(b) any agreement, arrangement or obligation which was entered
into otherwise than by way of a bargain at arm's length;
(c) any power of attorney given by the Company;
(d) any sale or purchase option or similar agreement,
arrangement or obligation affecting any assets owned or
used by the Company or by which the Company is bound;
(e) any agreement, arrangement or obligation which cannot
readily be fulfilled or performed by the Company on time or
without undue or unusual expenditure of money or effort; or
(f) any contract or arrangement of any kind, including, without
limitation, any contract of an unusual or onerous or long
term nature or any contracts of purchase or sale of any
properties or any other property purchased or sold by the
Sellers in the five years preceding the Completion Date or
any interest in the Subsidiary Undertaking or any
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subsidiary which was in the five years preceding the
Completion Date wholly owned by the Company or the
Subsidiary Undertaking;
(g) any guarantee, comfort letter, buy back obligations,
underwriting obligation no indemnity given by the Company;
(h) any agreement for the hire, rent, hire purchase or purchase
on deferred terms by the Company of any asset (other than
the Properties) excluding hirings and leases for periods of
less than one month and agreements in respect of which the
annual rental or payment does not exceed L1,000;
(i) any agreement or arrangement under which any person has
authority to pledge the credit of the Company;
(j) any agreement or arrangement relating to the business of
the Company which includes a provision enabling a third
party to terminate such agreement on or following
Completion as a result of the sale and/or purchase of the
Shares and in respect of which any such termination would
have an adverse effect on the Company or the Company's
business and no such agreements or arrangements will be
terminated following Completion;
(k) any loan capital or other indebtedness of the Company which
will become repayable or any security given by the Company
which will or may become enforceable by reason of the
acquisition by the Purchaser of the Shares;
(l) any obligation on the part of the Company to pay any
royalty or other similar periodic sums in the nature of
royalties;
(m) any mortgage, charge, lien, Encumbrance, debenture or other
security interest;
(n) any option granted by the Company.
15.2 The Company is not a party to nor has it any liability under:
(a) any agreement or arrangement whereby it is a member of a
joint venture, consortium, partnership or incorporated or
unincorporated association (other than bona fide trade
associations);
(b) any distributorship, agency, marketing, purchasing,
service, licensing or management agreement or arrangement
any or other agreement,
or if it is:
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(i) full details of such agreement, arrangement and
liability are set out in the Schedules; and
(ii) such agreement and/or arrangement can be terminated
by the Company on less than three months' notice
without payment of compensation.
15.3 The Company has not during the twelve months ending on the date of
this Agreement incurred any stock loss under a contract above 2%
of the value of the stock the subject of the contract for which
the Company may be liable.
15.4 RESTRICTIONS ON BUSINESS
The Company is not a party to nor has it any liability under:
(a any agreement or arrangement which restricts its freedom to
carry on its business in any part of the world in such
manner as it thinks fit; or
(b any agreement or arrangement in respect of which:
(i0 particulars have been notified to the Commission of
the European Communities for an exemption under
Article 85(3) of the Treaty of Rome; or
(ii0 an application has been made to the Commission of
the European Communities for a negative clearance
under Article 85 or 86 of the Treaty of Rome.
15.5 GUARANTEES ETC
Save as disclosed in the Accounts, there is not outstanding in
respect of any of the Company or any director or shadow director
of any of the Company or any person connected with any of them any
guarantee, indemnity or suretyship given by or for the benefit of
any of the Company or any director or shadow director of any of
the Company or any person connected with any of them.
15.6 LOANS ETC
With the exception of the loans, quasi-loans, credit transactions,
debts and securities particulars of which are contained in the
Schedules, all of which have been entered into in compliance with
all legal and statutory requirements and conditions, there are:
(a no loans, quasi-loans or credit transactions made by any of
the Company to any of the Sellers or any director or shadow
director of any of the Company or any person connected with
it;
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(b no debts owing by the Company by any of the Sellers or any
director or shadow director of the Company or any person
connected with any of them;
(c no debts owing by any of the Company other than debts which
have arisen in the ordinary course of business; and
(d no securities for any such loans or debts as aforesaid.
15.7 CONTRACTS WITH SELLERS OR DIRECTORS ETC
With the exception of the contracts and arrangements particulars
of which are contained in the Schedules, there are no existing
contracts or arrangements to which the company is a party and in
which any of the Sellers or any director or shadow director of the
Company or any person connected with it is interested, whether
directly or indirectly.
15.8 ARRANGEMENTS OR UNDERSTANDINGS
There are not outstanding any arrangements or understandings
(whether legally binding or not) between the Company and any
person who is a shareholder, or the beneficial owner of any
interest in, or any director or shadow director of the Company or
any person who is connected with any such director in the Company
or in any company in which the Company is interested, or any
person connected with any such person, relating to the management
of Company's businesses, or the appointment or removal of
directors of the Company, or the ownership or transfer of
ownership or the letting of any of the assets of the Company, or
the provision, supply or purchase of finance, goods, services or
other facilities to, by or from the Company, or otherwise
howsoever relating to its affairs.
15.9 COMPETING BUSINESSES
None of the Sellers has any right or interest, direct or indirect,
in any business other than those now carried on by the Company
which is, or are likely to become, competitive with the businesses
of the Company or any proposed new business.
16. COMPLIANCE WITH THE COMPANIES ACT, 1990
16.1 The Company has not:
(a had its affairs investigated pursuant to section 7, 8 or 9
of the Companies Act, 1990 (the "1990 ACT") , nor has there
been any investigation of the ownership of the shares of
the Company pursuant to section 14 or request pursuant to
section 15 of the 1990 Act, nor has
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there been a direction made under section 16 of the
1990 Act nor an investigation pursuant to section 66
of the 1990 Act;
(b entered into any arrangement in breach of section 28 or 29
of the 1990 Act;
(c 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;
(d the Company is not nor has it been 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;
(e had a notice served on it by its auditors pursuant to
section 185 or 194 of the 1990 Act;
(f been struck off and subsequently restored to the register
pursuant to section 311A of the 1963 Act;
(g 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
Holdings and Darshaan; or
(h purchased or redeemed its own shares or those of its
holding company or created treasury shares pursuant to part
XI of the 1990 Act.
17. GENERAL
17.1 No sums are owing by the Company to its auditors, solicitors or
other professional advisers except in the ordinary course of
business.
17.2 There are no loans owing to the Company by any of its directors.
17.3 Neither the Company nor any of its officers, employees or agents
nor other person acting on its behalf has ever directly or
indirectly given or agreed to give any gift or similar benefit to
any customer, supplier, governmental employee or other person who
is or may be in a position to help or hinder its business or
assist it in connection with any actual or proposed transaction.
17.4 Except as disclosed in the Schedules the Company it not a member
of any trade association and in respect of any trade associations
which have been
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disclosed it has complied with all its obligations as a member
thereof and all codes of practice promulgated by such
association.
17.5 [Year 2000/EMU compliance and frustration of contracts, loss of
profits etc.]
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SCHEDULE VI
TAX WARRANTIES
The Warranties in this Schedule are the Tax Warranties.
1. GENERAL
1.1 All taxation of any nature whatsoever or other sums imposed,
charged, assessed, levied or payable under the provisions of
applicable legislation relating to taxation for which the Company
is liable as a result of any act or omission by the Company prior
to Completion will if, and in so far as such taxation or other
sums ought to be paid prior to or on Completion, have been paid at
or before Completion and in particular, but without prejudice to
the generality of the foregoing, at Completion, all amounts due
for payment to the Revenue Commissioners in respect of excise duty
and of Value Added Tax in respect of goods or services supplied
prior to Completion or goods imported prior to Completion, and of
income tax deductible prior to Completion under Schedule E by
virtue of the PAYE regulations from time to time in force will
have been paid so that the Company will have no liability in
respect thereof and at Completion all Social Welfare and Pay
Related Social Insurance contributions (both employer's and
employees') and any other levies and impositions due in respect of
the employees of the Company will have been duly paid.
1.2 The Company is not liable and has not at any time since the
Balance Sheet Date been liable to pay interest on overdue
taxation.
1.3 The Company has not acquired or disposed of any asset or entered
into any transaction otherwise than by way of bargain at arm's
length.
1.4 The Company has not entered into any financing or leasing
agreement in which or in connection with which the Company 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.
1.5 There are set out in the Schedules full particulars of all
differences between the accounting and taxation treatments of all
items in the Accounts.
1.6 There is no appeal by the Company pending against any assessment
to tax and the Company is not in default in payment of any tax
within the period prescribed for payment thereof.
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1.7 The Company has not committed any act nor made any omission which
might constitute an offence under Section 1078 of the Taxes
Consolidation Act, 1997.
1.8 The Company has not been at any time, for taxation purposes,
resident in any jurisdiction other than the Republic of Ireland
nor has it been at any time managed or controlled in or from any
country other than the Republic of Ireland and the Company has not
at any time carried on any trade in any other country and does not
have a permanent establishment in any country other than the
Republic of Ireland.
1.9 The Company has for each accounting period up to and including the
accounting period ending on Completion furnished the Company's
Inspector of Taxes with full and accurate particulars relating to
the affairs of the Company, 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 have been correct in all material respects
and on a proper basis and none such are disputed by the Revenue
Commissioners or other authority concerned, there are no grounds
or circumstances which might cause any such dispute and the
Company has made all claims which would be of benefit to it within
the time limits laid down in the relevant legislation.
1.10 The Company has submitted and the Revenue Commissioners have where
relevant agreed computations of its taxable profits in respect of
all periods up to and including the year ended on the Balance
Sheet Date.
1.11 The Company has not entered into or been a party to any schemes or
arrangements designed partly or wholly for the purpose of avoiding
taxation. The Company has not 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
the Company in respect of any event (whether or not involving the
Company) which took place before Completion or in respect of any
series of events, (whether or not such events or any of them
involve the Company) taking place partly before Completion and
partly after Completion.
1.12 No act or transaction has been effected in consequence of which
the Company is liable for any taxation primarily chargeable
against some other person.
1.13 The making of returns, payment of preliminary tax and all other
requirements of Sections 950 to 959 of the Taxes Consolidation
Act, 1997 have been complied with fully by the Company.
1.14 No penalty under Section 1084 of the Taxes Consolidation Act,
1997 has or will become payable.
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1.15 No notice of attachment has been served on the Company or in
relation to any funds of the Company under Section 1002 of the
Taxes Consolidation Act, 1997.
1.16 The Company has for each accounting period:-
(i) furnished the Inspector of Taxes with full and accurate
particulars relating to the affairs of the Company;
(ii) properly and within the prescribed periods of time made all
returns and given or delivered all notices, accounts and
information required for the purposes of taxation; and
(iii) complied full with the requirements of Sections 950 to 959
of the Taxes Consolidation Act, 1997, regarding the payment
of preliminary tax, corporation tax and capital gains tax.
All such particulars, returns, notices, accounts information and
payments have been correct in all material respects and on a
proper basis and none such are disputed by the Revenue
Commissioners or other authority concerned. In addition there are
no grounds or circumstances which might cause any dispute and the
Company has made all claims which would be of benefit to it within
the time limits laid down in the relevant legislation.
1.17 No transaction has or had been effected by the Company in respect
of which any consent or clearance from the Revenue Commissioners
or other taxation authority was required and which consent or
clearance (as the case may be) was not obtained.
1.18 The Company is not and has never been a member of a group of
companies within the meaning of Section 590 or Section 616 of the
Taxes Consolidation Act, 1997, or associated with any other
company within the meaning of Section 423(1), Taxes Consolidation
Act, 1997.
1.19 The provisions of the Waiver of Certain Tax, Interest and
Penalties Act, 1993 do not have any application to the Company or
any of its officers.
1.20 The Company has not made a relevant investment within the meaning
of Section 481, and Schedule 32, Paragraph 22 of the Taxes
Consolidation Act, 1997.
2. CORPORATION TAX
2.1 (a The Company has not paid remuneration to its employees,
officers or directors (either deemed or otherwise) in
excess of such amount as will be deductible in computing
the taxable profits of the Company; and
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(b the Company has not paid and will not 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 the Company to
any of its present or former directors or employees (deemed
or otherwise) which will not be deductible in computing the
taxable profits of the Company.
2.2 In respect of Schedule 32, Paragraph 7 of the Taxes Consolidation
Act, 1997, no circumstance exists which would lead the Revenue to
withdraw approval of the scheme or to contend that the Company is
not a qualifying Company carrying on a specified trade.
2.3 In respect of profit sharing schemes under Sections 509 to 518 of
the Taxes Consolidation Act, 1997, no circumstance exists which
would lead the Revenue to withdraw approval of any such scheme.
2.4 In respect of employee share ownership trusts under Section 519
and Section 511(A) of the Taxes Consolidation Act, 1997, no
circumstance exists which would lead the Revenue to withdraw
approval of any such scheme.
2.5 If the employees of the Company have benefited from Section 479 of
the Taxes Consolidation Act, 1997, no circumstance exists in
relation to the Company which would lead to the withdrawal of the
relief.
2.6 The Company has not, within the meaning of Sections 520 to 529 of
the Taxes Consolidation Act, 1997, received payment in respect of
professional services from an accountable person.
2.7 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.
2.8 The Company 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
tax at source up to the date hereof and all such tax which has
become due to the Revenue Commissioners has been paid to the
Revenue Commissioners.
2.9 The Company has never incurred any expense or paid any amount in
consequence of which the Company has been or could be treated
under Sections 436 or 437 of the Taxes Consolidation Act, 1997 as
having made a distribution.
2.10 The limitation on the meaning of "distribution" provided for by
Sections 133 and 134 of the Taxes Consolidation Act, 1997 does not
apply to any financial arrangements of the Company.
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2.11 The Company is not affected by the amendments to Part IX of the
Corporation Tax Act, 1976 contained in Section 133(3) and 134(2)
of the Taxes Consolidation Act, 1997.
2.12 Section 138 of the Taxes Consolidation Act, 1997 does not apply to
any dividend paid by the Company in respect of its preference
shares.
2.13 The Company has not made any claim for relief in respect of stock
appreciation under Section 665 to 669 of the Taxes Consolidation
Act, 1997 or under Section 31 and 31A of the Finance Act, 1975 or
Section 26 of the Finance Act, 1976 or Section 49 Finance Act,
1984.
2.14 The Company has not effected or entered into any act transaction
or arrangement of any nature whereby it 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.
2.15 The Company has not surrendered any amount by way of company
relief under the provisions of Sections 411 to 424 and Section 456
of the Taxes Consolidation Act, 1997.
2.16 The Company is not and will not 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 Section 411 of the Taxes Consolidation Act,
1997.
2.17 The Company has not at any time:
(a) repaid or redeemed or agreed to repay or redeem any shares
of any class of its share capital or otherwise reduced or
agreed to reduce its issued share capital or any class
thereof; or
(b) capitalised or agreed to capitalise in the form of shares,
debentures or other securities or in paying up any amounts
unpaid on any shares debentures or other securities any
profits or reserves of any class or description or passed
or agreed to pass any resolution to do so; or
(c) provided capital to any company on terms whereby the
company so capitalised has in consideration thereof issued
shares loan stock or other securities where the terms of
any such capitalisation were otherwise than by way of a
bargain made at arm's length or where the shares loan stock
or other securities acquired are shown in the Accounts at a
value in excess of their market value at the time of
acquisition.
2.18 No allowable loss which has arisen or which may hereafter arise on
the disposal by the Company of shares in or securities of any
company is liable to
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be disallowed in whole or in part by virtue of the
application of Section 621 or 622 of the Taxes Consolidation
Act, 1997.
2.19 No change of ownership of the Company 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 the Company.
2.20 On a sale of any machinery and plant at the value thereof shown in
the Accounts no balancing charge will be incurred.
2.21 There has not been, 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.
2.22 The Company is entitled to relief up to 5th April 1990 under
Sections 144 to 146 of the Taxes Consolidation Act, 1997.
2.23 The Company has never claimed relief under Sections 147 to 149,
151, 442 to 450 and 453 and Schedule 32, paragraphs 4, 5(2), 6(2),
16(1) - (4) and 18 of the Taxes Consolidation Act, 1997.
2.24 The Company has not entered into transactions by virtue of which
it will be chargeable under Case IV, Schedule D in accordance with
Section 815 of the Taxes Consolidation Act, 1997.
2.25 The restrictions on the use of capital allowance for certain
leased assets, as set out in Section 403 of the Taxes
Consolidation Act, 1997 do not have application to any
transactions entered into by the Company.
2.26 The provisions of Sections 272 and 317(3) of the Taxes
Consolidation Act, 1997 apply to all expenditure incurred by the
Company, and have been properly implemented in the accounts of the
Company.
2.27 No circumstance exists in connection with the Company which would
lead to the withdrawal of relief for investment in research and
development as provided for in Chapter III of the Finance Act,
1986.
2.28 The Company has not received notice under Section 70 of the
Corporation Tax Act, 1976 as amended by Section 56 of the Finance
Act, 1986.
2.29 The provisions of Section 1013 of the Taxes Consolidation Act,
1997, do not apply to any transaction entered into by the Company.
2.30 The Company is not liable to any claim in respect of tax due under
Sections 530 or 531 of the Taxes Consolidation Act, 1997, and the
Company has complied with the provisions of these Statutes.
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2.31 The Company has not entered into any transaction as a result of
which it could be assessed to tax under Schedule D in accordance
with Section 639 to 647 of the Taxes Consolidation Act, 1997.
2.32 The Company has not received a notice under Section 446 of the
Taxes Consolidation Act, 1997, requiring the Company to desist
from an activity or revoking the certificate.
2.33 The utilisation of losses incurred by the Company is not
restricted by Section 456 of the Taxes Consolidation Act, 1997.
2.34 No reduction or withdrawal of relief has occurred under Section
222 of the Taxes Consolidation Act, 1997.
2.35 No allowance in respect of capital expenditure is or may be
restricted by virtue of Sections 271, 273, 274, 278, 283, 285,
300, 304, 305, 316, 317, 320, 658 and Schedule 32, paragraphs 9
and 23(2) of the Taxes Consolidation Act, 1997.
2.36 Neither the Company nor any of its shareholders is affected by the
restrictions on the Business Expansion Scheme relief which are
contained in Sections 489 to 498 of the Taxes Consolidation Act,
1997.
2.37 The Company has not 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.
2.38 The Company does not beneficially own nor has it ever beneficially
owned shares to which Sections 155 and 489 of the Taxes
Consolidation Act, 1997 apply or may have applied.
2.39 The goods produced by the Company fall within the definition of
goods regarded as manufactured contained in Section 443 of the
Taxes Consolidation Act, 1997.
2.40 The tax benefit envisaged at the time of borrowing in respect of
any loan under Section 130 of the Taxes Consolidation Act, 1997
will under present legislation remain undiminished until such loan
has been repaid.
2.41 The Company does not own nor has it ever owned an asset which
constitutes a material interest in an off-shore fund which is or
has at any time been a non qualifying off-shore fund within the
terms of Sections 740 to 747 of the Taxes Consolidation Act, 1997.
2.42 Any machinery or plant provided for use for the purposes of the
trade of the Company after 1 April 1990 is used wholly and
exclusively for the purposes of the trade of the Company.
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2.43 The cost of acquisition for the purposes of corporation tax on
chargeable gains to the Company of each asset of the Company
(except trading stock and work in progress) is not less than the
book value of that asset as provided for in the Company's accounts
and the Company has not acquired any asset otherwise than by way
of bargain at arms-length.
2.44 As at Completion, the Company has accumulated trading corporation
tax losses of IRL[ ] and advance
corporation tax of IRL[ ] available for
carrying forward. The Company has continued to carry on the trade
of [ ] since the
accumulation of corporation tax losses and advance corporation tax
without any major change in the nature or conduct of the said
trade.
2.45 The Company has not since its incorporation acquired any assets
other than trading stock from any company which at the time of the
acquisition was a member of the same Company as defined in
Sections 590(11) and 616 of the Taxes Consolidation Act, 1997.
2.46 Where fixed assets have been stated in the Accounts in excess of
their cost, any potential liability to Taxation on chargeable
gains that would accrue on the sale of these assets at their
values stated are either fully provided for or disclosed by way of
note in the Accounts.
2.47 The Company is not a close company as defined in Taxes
Consolidation Act, 1997.
3. ADVANCE CORPORATION TAX ("ACT")
3.1 The Company has no liability to ACT under Sections 159 to 172 of
the Taxes Consolidation Act, 1997.
3.2 The Company has not made an election under Section 165 of the
Taxes Consolidation Act, 1997 and no surrender has been made under
Section 166 of the Taxes Consolidation Act, 1997.
3.3 The Company is not affected by the provisions of Section 167 or
Section 170 of the Taxes Consolidation Act, 1997.
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4. CAPITAL GAINS TAX
4.1 The Company has not made any claim under Section 597 of the Taxes
Consolidation Act, 1997, as respects the consideration for the
disposal of or of its interest in any assets which are defined in
the said Section 597 as "the old assets".
4.2 The Company has not made any such transfer as is referred to in
Section 589 of the Taxes Consolidation Act, 1997, or received any
asset by way of gift as mentioned in Section 978 of the Taxes
Consolidation Act, 1997.
4.3 The Company has not been a party to or involved in any share for
share exchange nor any scheme of reconstruction or amalgamation
such as are mentioned in Sections 583 to 588, Section 600, Section
615 or Section 733 of the Taxes Consolidation Act, 1997, under
which shares or debentures have been issued or any transfer of
assets effected.
4.4 The Company has not entered into any transaction which has, will
or may give rise to a charge to tax under the provisions of Taxes
Consolidation Act, 1997 or under the provisions of the Capital
Acquisitions Tax Act, 1976.
4.5 The Company has no liability by virtue of the provisions of
Section 571 of the Taxes Consolidation Act, 1997.
4.6 The Company has not made any claim under Section 1005 of the Taxes
Consolidation Act, 1997 and no tax liability has been deferred
under any other provision of the Taxes Consolidation Act, 1997
including Sections 981 and 563(1) of the Taxes Consolidation Act,
1997.
4.7 The Company has not entered into any transactions which give rise
to a liability under Sections 590, 616, 623, 625, 626 of the Taxes
Consolidation Act, 1997. Nor has the Company entered into any
transactions to which Sections 632 to 635, 637 and 648 to 649 of
the Taxes Consolidation Act, 1997, apply.
4.8 There have been no claims under Section 538 of the Taxes
Consolidation Act, 1997.
4.9 The Company has not entered into or taken any steps the object of
which is a transaction which comes within or might come within
Sections 549 and 817 of the Taxes Consolidation Act, 1997 .
4.10 The Company has not 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, 1987.
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5. STAMP/CAPITAL DUTY
5.1 The Company 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.
5.2 All documents in the possession or under the control of or
required in connection with the title of the Company to any matter
or thing of the Company which attract stamp duty have been
properly stamped.
5.3 No relief, exemption or reduction has been obtained from company's
capital duty or stamp duty and without prejudice to the generality
of the foregoing no relief, exemption or reduction has been
obtained from company's capital duty or stamp duty under Section
72 of the Finance Act, 1973 (as amended) or from stamp duty under
Section 19 of the Finance Act, 1952 (as amended) or Section 31 of
the Finance Act, 1965 (as amended) which:
(a) has become liable to forfeiture; or
(b) may be forfeited in the future.
5.4 All capital duty and/or stamp duty payable by the Company in
respect of any of the transactions referred to in the following
Sections of the Finance Act, 1973 has been duly and promptly paid
by the Company so that there is no liability in respect thereof or
any interest thereon:
(a) Section 63;
(b) Section 64;
(c) Section 68; and
(d) Sections 69 and 70.
5.5 All other capital and/or stamp duty howsoever arising or payable
has been paid by the Company and there is no outstanding liability
therefore or interest thereon.
6. VALUE ADDED TAX
6.1 The Company is a registered and taxable person for the purposes of
the Value Added Tax Acts and has complied in all respects with
such legislation and all regulations made or notices issued
thereunder and has maintained full complete correct and up to date
records, invoices and other documents (as the case may be)
appropriate or requisite for the purposes thereof.
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6.2 The Company is not in arrears with its payments or returns or
notifications under the Value Added Tax legislation regulations or
notices or liable to any abnormal or non routine payment or any
forfeiture or penalty or to the operation of the penal provisions
contained therein.
6.3 The Company has not been required by appropriate fiscal
authorities to give security under the Value Added Tax
legislation.
6.4 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 Regulation 1979 (as amended) the business
activities of the Company are or were deemed to be carried on by
any other person or the business activities of any other person
are or were deemed to be carried on by the Company.
6.5 The Company has not availed of the procedure in Section 58 of the
Finance Act, 1989 whereby a trader may account and make returns
for VAT purposes other than after each two monthly taxable period.
6.6 The Company does not make any supplies which are exempt for VAT
purposes.
7. CAPITAL ACQUISITIONS TAX
7.1 There is no unsatisfied liability to capital acquisitions tax
attached or attributable to the Shares or any of the assets of the
Company and the Shares and the said assets are not subject to a
charge in favour of the Revenue Commissioners.
7.2 No person is liable to capital acquisitions tax attributable to
the value of any of the Shares and in consequence no person has
the power to raise the amount of such tax by sale or mortgage or
by a terminable charge on any of the Shares.
7.3 The Company has not entered into or taken any steps the object of
which is a transaction which comes within Section 90 of the
Finance Act, 1989.
8. WEALTH TAX
The Company has not any outstanding liability for wealth tax under the
Wealth Tax Act, 1975.
9. PAYE/SOCIAL WELFARE
9.1 The Company is registered for the purposes of regulations made
under Section 986 of the Taxes Consolidation Act, 1997, and has
complied in all respects with such regulations and has maintained
full, complete, correct and up to date records appropriate or
requisite for the purposes thereof.
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9.2 The Company is not in arrears with its payments or returns
required under regulations made under Section 986 of the Taxes
Consolidation Act, 1997, or liable to interest or 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.
9.3 The Company has complied in all respects with Part II, Chapter I,
Social Welfare Consolidation Act, 1981, Health Contributions Act,
1979, Youth Employment Agency Act, 1981 and Section 16 Finance
Act, 1983 and any regulations made under those Acts and has
maintained full, complete, correct and up to date records
appropriate or requisite for the purposes thereof and has not
committed any offence under Section 115, Social Welfare
Consolidation Act, 1981 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 Acts and/or regulations.
9.4 The Company has not availed of the Income Tax (Employments)
Regulations 1989 (SI No. 58 of 1989) whereby an employer may make
remittances of PAYE deducted from his employees at longer
intervals than the normal monthly remittance basis.
9.5 The Company has properly operated the PAYE system of deduction and
of accounting to the Revenue Commissioners (and all similar
systems to the appropriate authority in any other jurisdiction)
for tax chargeable on the remuneration of its employees (deemed or
otherwise) and has properly operated Social Welfare deductions (or
their equivalent in any other jurisdiction) and had made all
payments to the relevant authority in respect thereof.
-84-
<PAGE>
SPECIFIC DISCLOSURES TO PART 3.27 OF THE AGREEMENT
The following are disclosed. The paragraph numbers stated below are for
convenience of reference only and refer to the clauses in Part 3.27 to the
Stock Purchase Agreement. Buyer expressly accepts that disclosure of any
particular matter by reference to a specific paragraph is to be regarded as a
disclosure in respect of each and every other paragraph as far as same shall
be applicable and as disclosures to the warranties contained in Article 3 of
the Agreement.
1. CAPACITY AND AUTHORITY
1.1. Microcellular Systems Limited ("the Company") Certificate of
Incorporation and Memorandum and Articles of Association.
Microcellular Systems (Ireland) Limited Certificate of
Incorporation and Memorandum and Articles of Association.
1.2. The consent of the Minister for Enterprise Trade & Employment
under the Mergers, Take-Overs and Monopolies (Control) Act, 1978
will be required.
2. THE SELLERS
2.1. Subject to matters fully and fairly disclosed and set out in the
Disclosure Schedules all information is true, complete and accurate.
2.2. (a) Hogan & Associates are financial advisers to the Company.
Declan Hogan who is the principal of Hogan & Associates is
a Director of the company.
Hayes & Sons Solicitors are acting as legal advisers to the
Sellers. Andrew O Rorke, a private investor in the
company, is a partner in Hayes & Sons.
2.2. (b) See answer to 2.2. (a)
2.2. (c) Declan Hogan has a 20% shareholding in Proyplon Limited.
Paul McKeown has a 20% interest in Proyplon Limited
Robert Dennyson has less than 1% interest in Proyplon
Limited Thomas Cunningham has less than 1% interest in
Proyplon Limited
<PAGE>
3. SHARES, SUBSIDIARIES, CONSTITUTION, REGISTERS, RETURN, RECORDS
3.1. (a) The share registers and minute books
3.1. (d) Treasury Stock Options Schedule - already furnished. Put
and Call Option Agreement between the Company and Shannon
Free Airport Development Company Limited, 9th September
1999.
3.1. (d) Put Option Agreement between the Company and the Private
Investors in similar terms to the Agreement between the
Company and Andrew O Rorke - already furnished to the
Buyer.
Subscription Agreement between Shannon Free Airport
Development Company Limited and the Company and the
Promoters, dated 9th September 1999.
3.1. (d) (ii) Vesting of Shares
There are employee share options some of which have vested
and more of which are capable of vesting details of which
have already been furnished and set out in Treasury Stock
Option Schedule referred to at 3.1. (d) above.
3.1. (e) Microcellular Systems (Ireland) Limited - is also a
subsidiary, see documentation disclosed under 1.1.
3.2. Are available for inspection - Minutes, Statutory Books
Registers.
4. ACCOUNTS.
4. The Company was incorporated on 16th March 1999 and no audited
accounts have been prepared. Accordingly a number of the
accounting warranties sought at Section 4 are not applicable. No
returns have been filed in the Companies Registration Office.
4.3. See answer to 4.
4.4. See answer to Schedule VI
4.9. The accounting books and records of the Company have been
disclosed.
4.10. See answer to 4.
<PAGE>
5. BUSINESS SINCE MARCH 31, 2000 BALANCE SHEET
5.1. See answer to 4.
5.2.(b) (ix) 244,667 "A" Ordinary Shares of L1 were transferred by
Shannon Free Airport Development Limited to Guy Waugh, Bart
Kane, Tony Dunne and Declan Hogan and subsequently
converted and redesignated into 60,000 Ordinary shares of
$1.00 per share.
5.2.(b) (x) Guarantee and Indemnity between Microcellular Limited (UK)
Company and Ulster Bank Markets Limited 21 Jan 2000
Guarantee of Obligations and Indemnification Agreement
between Microcellular Systems USA Inc and Ulster Bank
Markets Limited. 26th October 1999.
Mortgage Debenture, Microcellular Systems Limited (UK)
Company and Ulster Bank Markets Limited. 21st January 2000
Letter from Ulster Bank to Declan Hogan re draft facility
letter - 26th October 1999
Charge on deposit between the Company and Ulster Bank
Markets Limited May 2000 - executed as per drafts furnished
to Buyer.
Assignment between the Company and Ulster Bank Markets
Limited May 2000. Assignment was executed as per the draft
assignment furnished to Buyers.
Facility Letter, Ulster Bank to the Company - finalised May
2000 in the terms of the draft furnished to Buyer.
5.2.(b) (xi) Letter from Microcellular Systems Limited to Shannon
Developments enclosing signed Letter of Acceptance of
Grant - 8th April 2000.
Grant Agreement between Shannon Free Airport Development
Company Limited and the Company, 21st January 2000.
Letter from Shannon Development to the company , 6th
December 1999.
Letter from Microcellular Systems Limited to Shannon
Developments, 21st December 1999.
5.2.(b) (xvi) See answer to 5.2.(b) (ix).
<PAGE>
6. ASSETS
6.1.(b)(iii) The computer equipment of the company may need to be
replaced within two years.
6.2. Memorandum of Agreement between Kerry Innovation Centre and
Mike Fitzgerald - Tenancy Agreement.
A verbal offer has been received from Shannon Development
for a new lease, the terms of which have been outlined to
the Buyer.
7. TERMS OF TRADE AND BUSINESS
7.1. All Creditors have not been paid in accordance with their credit
terms. The amounts are due and owing and are properly
reflected in the accounts.
8. EMPLOYEES
General
8.1.(a) Service contracts of Alastair Froggett, Director, David
Jones, Director, Ian Walter, Director, Mike Fitzgerald,
Director and Monty Egeland, Director and ADC Microcellular
Systems Employee Handbook, have been disclosed.
8.1.(c) The Employee schedule furnished sets out the principal
terms and benefits of employees.
8.10 A share option letter has been furnished to each employee
setting out details of the share option scheme. Details of
the scheme together with sample letters have been
furnished.
9. FINANCING/LIABILITIES
9.2.(b) Guarantee by Mike Fitzgerald re Lease of premises from
Kerry Innovation Centre.
9.4. See answer to 5.2.(b) (xi)
<PAGE>
12. GENERAL
12.2. Pension Scheme Documentation and Declaration of Trust re retirement
benefits scheme have been furnished.
15. COMPETING BUSINESS
Any of the shareholders may have an interest in a competing business but
warrantors are not aware of any material or significant interest.
<PAGE>
SCHEDULE V1
TAX WARRANTIES
1. General
Tax Returns have not yet been submitted and are not yet due.
1.18. The company is a member of a group of companies- please see
corporate structure document.
2. Corporation Tax
2.36 Certain shareholders benefited from Business Expansion Scheme
Relief when they invested in the Company.
2.44 Not possible to quantify - no tax returns have yet been submitted.
No advance corporation tax applicable in Ireland.
<PAGE>
SCHEDULE 4.2(b)
CONSENTS AND GOVERNMENTAL AUTHORIZATIONS
Irish Ministry of Enterprise & Employment, under the Mergers and Acquisitions
Act of 1978, as amended.
<PAGE>
SCHEDULE 4.2(c)
EXCEPTIONS TO NO CONFLICT
