Exhibit 2.3
DATED 19TH FEBRUARY, 2004
(1) BRIGHTPOINT HOLDINGS B.V.
(2) CELTIC TELECOM CONSULTANTS LIMITED
AGREEMENT FOR THE SALE AND PURCHASE OF
the entire issued share capital in
BRIGHTPOINT (IRELAND) LIMITED
XXXXXX XXX
Xxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx
Xxxxxx 0
CONTENTS
CLAUSE PAGE
1 DEFINITIONS AND INTERPRETATION..................................................................... 1
2 SALE AND PURCHASE.................................................................................. 7
3 CONSIDERATION...................................................................................... 7
4 COMPLETION......................................................................................... 9
5 WARRANTIES......................................................................................... 12
6 LIMITATIONS ON THE SELLER'S LIABILITY.............................................................. 13
7 WARRANTY CLAIMS.................................................................................... 16
8 INDEMNITIES........................................................................................ 17
9 TRADE XXXX LICENCE................................................................................. 18
10 POST COMPLETION MATTERS............................................................................ 18
11 CONFIDENTIAL INFORMATION........................................................................... 19
12 USE OF INTELLECTUAL PROPERTY RIGHTS................................................................ 20
13 FURTHER UNDERTAKINGS BY SELLER..................................................................... 20
15 ASSIGNMENT......................................................................................... 22
16 ANNOUNCEMENTS...................................................................................... 23
17 COSTS.............................................................................................. 23
18 FURTHER ASSURANCE.................................................................................. 23
19 GENERAL............................................................................................ 23
20 NOTICES............................................................................................ 24
21 DISPUTE RESOLUTION................................................................................. 24
22 GOVERNING LAW...................................................................................... 25
23 ENTIRE AGREEMENT................................................................................... 25
24 COUNTERPARTS....................................................................................... 26
SCHEDULE 1
Information concerning the Company.......................................................................... 27
SCHEDULE 2
Items for delivery by the Seller at Completion.............................................................. 28
SCHEDULE 3
Warranties.................................................................................................. 30
SCHEDULE 3A
Buyer's Warranties.......................................................................................... 82
SCHEDULE 4
Property.................................................................................................... 83
SCHEDULE 5
Due Diligence Document Delivery Log......................................................................... 84
SCHEDULE 6
Pro Forma Completion Balance Sheet.......................................................................... 85
SCHEDULE 7
Nextel Inventory............................................................................................ 86
AGREED FORM DOCUMENTS
1. Tax Deed
2. Disclosure Letter
3. Trade Xxxx Licence
4. Lease Guarantee, Rent Deposit and Indemnity Agreement
THIS AGREEMENT is made on 19th February, 2004 BETWEEN:
(1) BRIGHTPOINT HOLDINGS B.V., a company incorporated in the Netherlands
and having its registered office at Xxxxx 00, 0000 XX Xxxxxxxxx, Xxx
Xxxxxxxxxxx (the "SELLER"); and
(2) CELTIC TELECOM CONSULTANTS LIMITED a company incorporated in Ireland
under registration number 332315 having its registered office at Unit
20/21 Finglas Business Park, Finglas, Xxxxxx 00 (the "BUYER");
BACKGROUND:
(A) The Seller is the legal and beneficial owner of the Shares.
(B) The Seller has agreed to sell and the Buyer has agreed to purchase the
Shares on the terms and subject to the conditions of this Agreement.
(C) The Shares represent the entire issued share capital of the Company.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement the following expressions shall have the
following meanings namely:
"1963 ACT" means the Xxxxxxxxx Xxx, 0000;
"1990 ACT" means the Xxxxxxxxx Xxx, 0000;
"1999 ACT" means the Companies (Amendment) Act, 1999;
"1999 NO. 2 ACT" means the Companies (Amendment) (No. 2) Xxx,
0000;
"2001 ACT" means the Company Law Enforcement Xxx 0000;
"ACCOUNTING REQUIREMENTS" means the Companies Acts, 1963 to
2003 and the European Communities (Companies' Group Accounts)
Regulations 1992 and generally accepted accounting standards,
principles and practices in Ireland and all applicable
Statements of Standard Accounting Practice, and all applicable
Financial Reporting Standards issued by the Accounting
Standards Board and 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;
"ACCOUNTS" means the audited balance sheet as at the Last
Accounting Date and the audited profit and loss account for
the period ended on the Last Accounting
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Date of the Company together with the related directors'
reports and auditors' reports and includes all notes and other
documents annexed thereto in accordance with any legal
requirement or otherwise;
"AFFILIATES" means any holding company or subsidiary of the
person in question, and "holding company" and "subsidiary"
have the meaning given in section 155 of the 1963 Act;
"AGREEMENT" means this agreement and the schedules hereto;
"BRIGHTPOINT TRADEMARK" means the trade xxxx "Brightpoint"
registered with European Community Trade Xxxx Registration
Numbers 00514927 and 001078302;
"BUSINESS" means the distribution of wireless handsets and
accessories, and mobile telecommunications devices in Ireland;
"BUSINESS DAY" means a day other than a Saturday or Sunday or
public holiday in Ireland;
"BUYER'S SOLICITORS" means Xxxxxx Xxx xx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx Xxxxxxx, Xxxxxx 0;
"COMPANY" means Brightpoint (Ireland) Limited, particulars of
which are set out in Schedule 1 hereto;
"COMPLETION" means completion of the sale and purchase of the
Shares in accordance with this Agreement;
"COMPLETION BALANCE SHEET" means the balance sheet of the
Company prepared in accordance with the terms of clause y3 of
this Agreement, a draft of which is attached at Schedule 6;
"COMPLETION DATE" means 19th February, 2004;
"CONNECTED PERSON" and "CONNECTED" means a person who would be
connected with another person for the purposes of Section 26
of the Companies Act, 1990 if that other person was a director
of a company;
"CONFIDENTIAL INFORMATION" means all information not at
present in the public domain used in or otherwise directly
relating to the Business of the Company in the Territory
including, without limitation, information relating to:
(a) the marketing of any products or services including,
without limitation, customer names and lists and any
other details of customers, sales targets, sales
statistics, market share statistics, prices and
market research reports and surveys; and
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(b) future projects, business development or planning,
commercial relationships and negotiations
but excluding information which relates to the business and
operations of the Seller and its Affiliates outside the
Territory;
"CONSIDERATION" means the Initial Consideration (which is
subject to adjustment in accordance with clause 3.11) and the
Excess (if any) payable pursuant to clause 3.12;
"DISCLOSURE BUNDLE" means the documents listed in Appendix A
to the Disclosure Letter;
"DISCLOSURE LETTER" means the letter of today's date from the
Seller to the Buyer in relation to the Warranties and all
documents attached to it;
"DUE DILIGENCE DOCUMENT DELIVERY LOG" means the documents
furnished by the Seller to the Buyer for the purposes of due
diligence, as set out at Schedule 5;
"ENCUMBRANCE" means any mortgage, charge, pledge, lien,
option, restriction, right of first refusal, right of
pre-emption, third party right or interest, any other
encumbrance or security interest of any kind, and any other
type of preferential arrangement (including, without
limitation, title transfer and retention arrangements) having
a similar effect;
"EURIBOR" means:
(a) the percentage rate per annum equal to the offered
quotation which appears on the page of the Telerate
Screen which displays an average rate of the Banking
Federation of the European Union for the euro
(currently page 2480) for six months EURIBOR at
11.00am (Brussels time) on the quotation date or, if
such page or service ceases to be available, such
other page or other service for the purpose of
displaying an average rate of the Banking Federation
of the European Union agreed by the parties; or
(b) if no quotation for the relevant period is displayed
and the parties have not agreed an alternative
service on which a quotation is displayed, the
arithmetic mean (rounded upwards to four decimal
places) of the rates at which each of the Reference
Banks was offering to prime banks in the European
interbank market deposits in the euro of an
equivalent amount for such period at 11.00am
(Brussels time) on the quotation date;
"EURO" OR "EUR" means the currency unit of the participating
Member States of the European Union as defined in Recital (2)
of Council Regulation 974/98/EC on the introduction of the
euro;
"EXPERT" means an independent chartered accountant being a
member for the time being of the Institute of Chartered
Accountants of Ireland;
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"INDEMNITIES" means the indemnities set out in clauses 8,
10.4 and 10.5;
"INFORMATION" means the information and documents included in
the Disclosure Bundle and the Due Diligence Document Delivery
Log;
"INFORMATION TECHNOLOGY" means all computer systems,
communication systems, software and hardware owned or licensed
by or to the Company;
"INITIAL CONSIDERATION" means EUR1,158,000;
"INTELLECTUAL PROPERTY" means trade marks, service marks,
copyrights (including copyright in computer programs) database
rights, Know-how and Confidential Information, enforceable in
the Territory (whether or not the same are registered or
capable of registration) which are reasonably necessary to
operate the Business in the ordinary course and all
applications for, or for the protection of, any of the
foregoing;
"INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property
used, or required to be used, by the Company in, or in
connection with, the Business in the Territory;
"INTEREST RATE" means EURIBOR plus 3% per annum;
"KNOW-HOW" means all information and techniques (not publicly
known) owned by the Company or used, or required to be used,
by the Company in, or in connection with, the Business in the
Territory, held in any form (including, without limitation,
paper, electronically stored data, magnetic media, film and
microfilm) including, without limitation, that comprised in or
derived from drawings, data, reports, project reports,
formulae, specifications, testing procedures, test results,
component lists, instructions, manuals, brochures, catalogues
and process descriptions, market forecasts, lists and
particulars of customers and suppliers but excluding
information which relates solely to the business and
operations of the Seller and its Affiliates outside the
Territory;
"LAST ACCOUNTING DATE" means 31st December, 2003;
"LEASE GUARANTEE, RENT DEPOSIT AND INDEMNITY AGREEMENT" means
the Lease Guarantee, Rent Deposit and Indemnity Agreement in
the agreed form between the Buyer, Seller and Xxxxx Xxxxxx;
"LEASES" means (i) the Lease by and among Xxxxx Xxxxx,
Brightpoint, Inc. and the Company with respect to Unit Number
0 Xxx Xxxxx, Xxxxxxx Xxxxxxxx Xxxx, Xxxxxx; (ii) the Lease by
and between Xxxxx Xxxxx and the Company with respect to Unit
Number 0 Xxx Xxxxx, Xxxxxxx Xxxxxxxx Xxxx, Xxxxxx; and (iii)
the Lease by and between Xxxxx Xxxxx the Company with respect
to Unit Number 0 Xxx Xxxxx, Xxxxxxx Xxxxxxxx Xxxx, Xxxxxx;
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"MANAGEMENT ACCOUNTS" means the unaudited profit and loss
account and balance sheet of the Company for the accounting
period beginning on the next day following the Last Accounting
Date and ended on 31st January, 2003 and attached to the
Disclosure Letter;
"NET ASSET VALUE" means the net asset value of the Company as
at the Completion Date as set out in the Completion Balance
Sheet;
"NEXTEL INVENTORY" means the items listed in Schedule 7 and in
the possession of the Company on the Completion Date;
"NOKIA GUARANTEE" the guarantee dated 6th August, 2002 given
by Brightpoint Inc. in respect of a Distribution Agreement
dated 6th August, 2002 between Brightpoint (Ireland) Limited
and Nokia (Ireland) Limited;
"PHONEPAK DEBT" means the amount of EUR1,777,727.20 owed to
the Company by PhonePak Corporate Limited as at the Completion
Date;
"PLANNING ACTS" means the Local Government (Planning &
Development) Acts 1963 to 1999, the Planning & Development
Acts 2000 and 2001, the Building Control Act 1990 and any
statutory modification or re-enactment thereof for the time
being in force and any regulations or orders for the time
being made thereunder;
"PROPERTY" means the property or properties short particulars
of which are set out in Schedule 4 and includes an individual
property and a part of an individual property;
"PROPERTY SCHEDULE" means Schedule 4;
"REFERENCE BANKS" means the principal Dublin offices of Allied
Irish Banks, Bank of Ireland and Ulster Bank or such other
banks agreed between the parties from time to time;
"SHARES" means the entire issued share capital of the Company
which is to be purchased by the Buyer under the terms of this
Agreement;
"TAX" and "TAXATION" means all forms of taxation, duties,
imposts and levies and includes (without limiting the
generality of the foregoing) corporation tax, corporation
profits tax, advance corporation tax ("ACT"), capital gains
tax, development land tax, rates, water rates, capital
transfer tax, inheritance tax, gift tax, capital acquisitions
tax, residential property tax, value added tax, income tax,
dividend withholding tax, pay related social insurance
("PRSI"), national insurance contributions, amounts due under
the PAYE or PRSI system, income or other levies, customs and
excise duties any other import or export duties, stamp duty,
stamp duty reserve tax, companies capital duty, tax on
turnover or profits, sales tax, and any other amounts
corresponding thereto and all other taxes, rates, levies,
fines, duties or other fiscal impositions of any kind
whatsoever, whether
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imposed by government, municipal or local authority or
otherwise, or other sums paid in respect of Tax or Taxation
(including in particular but without derogating from the
generality of the foregoing any interest, fine, charge,
surcharge or penalty) whether arising under the laws of
Ireland or those of any other jurisdiction and whether
incurred as principal, agent, trustee, indemnitor or
otherwise, and regardless of whether such taxes, penalties,
charges, levies, fines, surcharges and interest are directly
or primarily chargeable against or attributable to the Company
or any other person, firm or company and whether or not the
Buyer or the Company is or may be entitled to claim
reimbursement thereof from any other person or persons;
"TAX AUTHORITY" and "TAXATION AUTHORITY" means the Revenue
Commissioners, and any other local, municipal, governmental,
state, federal or other fiscal authority or body anywhere in
the world;
"TAX DEED" means the deed of tax covenant in the agreed form
between the Seller, the Buyer and the Company;
"TAX WARRANTIES" means the warranties contained in paragraph 6
of Schedule 3;
"TCA" means Taxes Consolidation Act, 1997;
"TERRITORY" means the island of Ireland;
"TRADE XXXX LICENCE" means the licence in the agreed form
referred to in clause 9;
"WARRANTIES" means the representations and warranties
contained in Schedule 3 and "Warranty" means any of them.
1.2 In this Agreement:
(a) words and expressions which are defined in the
Companies Acts 1963 to 2001 (the "Companies Acts")
shall have the same meanings as are ascribed to them
in the Companies Acts;
(b) a document in the "agreed form" is a reference to a
document in a form approved and for the purposes of
identification signed by or on behalf of the parties
thereto;
(c) a statutory provision includes a reference to the
statutory provision as modified or re-enacted or both
from time to time before the date of this Agreement
and any subordinate legislation made under the
statutory provision before the date of this
Agreement;
(d) persons includes a reference to any body corporate,
unincorporated association or partnership;
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(e) a person includes a reference to that person's legal
personal representatives and successors;
(f) a clause, Paragraph or Schedule, unless otherwise
specified, is a reference to a clause, paragraph of
or schedule to this Agreement;
(g) reference to writing or similar expressions includes,
unless otherwise specified, transmission by
telecopier or comparable means of communication; and
(h) any reference to a statutory provision shall be
construed as a reference to the laws of Ireland
unless otherwise specified.
1.3 The headings in this Agreement shall not affect the
interpretation of this Agreement.
1.4 Unless the context otherwise requires, words importing the
singular include the plural and vice versa, words importing
the masculine include the feminine, and words importing
persons include corporations.
1.5 A reference in clause 5 and Schedule 3 to a person's
knowledge, information, belief or awareness is deemed to
include knowledge, information, belief or awareness which the
person would have had if the person had made all usual and
reasonable enquiries, save that this shall not require the
Seller to make enquiries of former employees of the Company.
2. SALE AND PURCHASE
2.1 The Seller agrees to sell as beneficial owner and the Buyer
shall purchase the Shares free from all Encumbrances together
with all rights of any nature whatsoever now or after the date
of this Agreement attaching or accruing to them.
2.2 The Seller waives and shall procure that there will be waived
before Completion, all rights of pre-emption and other
restrictions on transfer over the Shares conferred on it or
any other person under the articles of association of the
Company or otherwise.
3. CONSIDERATION
3.1 The consideration for the Shares is the payment by the Buyer
to the Seller of:
(a) the Initial Consideration on the Completion Date
(which is subject to adjustment in accordance with
clause 3.11); and
(b) the Excess (if any) payable pursuant to clause 3.12.
3.2 As soon as possible after Completion, and in any event within
15 Business Days of Completion, the Seller shall prepare and
deliver to the Buyer a draft
7
Completion Balance Sheet of the Company as at the Completion
Date in substantially the format set out in Schedule 6.
3.3 The Completion Balance Sheet shall be prepared upon the same
accounting principles and bases as were applied in the
preparation of the Company's statutory accounts for the
Company's financial year ending on the Last Accounting Date.
3.4 The Buyer shall review the draft Completion Balance Sheet and,
within 10 Business Days of receipt, confirm to the Seller in
writing whether or not it agrees with the draft Completion
Balance Sheet, giving written details of any matters in
dispute.
3.5 If (i) the Buyer confirms its agreement with the draft
Completion Balance Sheet (either as presented to it or as
adjusted by the Seller and the Buyer), or (ii) the Buyer fails
to give notice to the Seller in accordance with clause 3.4,
then such draft Completion Balance Sheet shall constitute the
Completion Balance Sheet for the purposes of this Agreement
and be final and binding on the parties to this Agreement.
3.6 If the Buyer is unable to agree with part or all of the draft
Completion Balance Sheet, it shall give notice to the Seller
in accordance with clause 3.4. If the Seller and the Buyer
are unable to agree the matters in dispute within 10 Business
Days of the Buyer notifying the Seller of the matter in
dispute, either the Seller or the Buyer may refer the dispute
to the Expert appointed by the Seller and the Buyer jointly
or, in default of agreement as to such appointment within 10
Business Days of one of them notifying the other of its wish
to appoint an Expert, by the President for the time being of
the Institute of Chartered Accountants of Ireland on the
application of either of them, provided such Expert shall be
an accountant employed by either Deloitte & Touche, KPMG or
PricewaterhouseCoopers. The Expert shall act as an expert and
not as an arbitrator and the Arbitration Acts 1954-1998 will
not apply.
3.7 The parties shall use reasonable endeavours to procure that
the Expert shall make and communicate his decision to the
Seller and the Buyer within 15 Business Days of appointment
and such decision shall be final and binding on the parties to
this Agreement (in the absence of manifest error).
3.8 Following settlement of any such matter which the Buyer shall
have disputed (whether by agreement pursuant to clause 3.5,
as determined by the Expert under clause 3.7 or otherwise by
agreement between the Seller and the Buyer), the Completion
Balance Sheet shall be finalised in accordance with that
settlement and shall constitute the Completion Balance Sheet
for the purposes of this agreement and shall be final and
binding on the parties to this Agreement.
3.9 The Seller and the Buyer shall each give the other (and their
respective accountants for the time being) or the Expert, as
the case may be, full access to those books of account,
documents, files and papers which the requesting party or
8
firm may reasonably require to prepare or review the
Completion Balance Sheet and determine whether the Completion
Balance Sheet has been prepared in accordance with this clause
3. Such employees of the Seller and the Buyer as the Seller
and the Buyer (and their respective accountants for the time
being) or the Expert may require to have access shall be
instructed to give promptly all the information and
explanations as the requesting party or firm may reasonably
require for the same purposes.
3.10 Each of the Seller and the Buyer shall be responsible for the
fees of their respective accountants. The fees of the Expert
shall be shared equally by the Buyer and the Seller unless the
Expert shall determine otherwise.
3.11 If the Net Asset Value in the Completion Balance Sheet is less
than EUR2,500,000, the Seller shall, within 5 Business Days of
the Completion Balance Sheet being finalised in accordance
with clause 3.8, pay to the Buyer by bank draft or to an
account nominated by the Buyer a sum equal to the amount by
which the Net Asset Value is less than EUR2,500,000 (the
"SHORTFALL") and such payment shall be treated as a reduction
in the Consideration.
3.12 If the Net Asset Value is equal to or exceeds EUR2,500,000,
the Buyer shall within 5 Business Days of the Completion
Balance Sheet being finalised in accordance with clause 3.8,
pay to the Seller by bank draft or to an account nominated by
the Seller a sum equal to the amount by which the Net Asset
Value exceeds EUR2,500,000 (the "EXCESS") and such payment
shall be treated as an increase in the Consideration.
3.13 A draft Completion Balance Sheet is attached at Schedule 6 for
the convenience of the parties to illustrate how the
Consideration adjustment mechanism set out in this clause 3
operates. The figures in the final Completion Balance Sheet
pursuant to clause 3.8 will differ from those in the draft
Completion Balance Sheet.
4. COMPLETION
4.1 Completion shall take place at the offices of the Buyer's
Solicitors on the Completion Date upon the execution hereof.
4.2 At Completion the Seller shall deliver or procure to be
delivered to the Buyer those items set out in Schedule 2.
4.3 The Seller shall procure that the directors of the Company
shall convene and at Completion hold a meeting of the board of
directors of the Company at which the directors shall:
(a) vote in favour of the registration of the Buyer and
its nominee(s) as member(s) of the Company in respect
of the Shares (subject to the production of duly
stamped transfers);
9
(b) revoke all existing mandates for the operation of
bank accounts and issue new mandates giving authority
to persons nominated by the Buyer;
(c) change the registered office of the Company to such
place as is nominated by the Buyer;
(d) appoint such persons as the Buyer may nominate as
directors, secretary and auditors of the Company with
immediate effect and approve the resignations of such
persons as directors, secretary and auditors as may
be required by the Buyer;
(e) approve and authorise the execution by the Company of
the Tax Deed; and
(f) approve and authorise the execution by the Company of
the Trade Xxxx Licence.
4.4 The Seller shall procure at Completion:
(a) the waiver and release of all debts owed by the
Company (whether then due for payment or not) to the
Seller and Brightpoint, Inc. or its Affiliates;
(b) the discharge of all monies owing to the Company
(whether then due for payment or not) by the Seller
or any director of the Company or by any of them or
any Connected Person; and
(c) the release of any and all guarantees or indemnities
or security given by the Company for or on behalf of
the Seller or for or on behalf of any director of the
Company or for or on behalf of any of them or any
Connected Person.
4.5 The Seller shall:
(a) assign and/or deliver to the Company any asset
whatever (including bank balances, agencies or
appointments) in its name or in the name of a company
or companies controlled by it which is required to
carry on the Business of the Company as it was
carried on immediately prior to Completion; and
(b) irrevocably waive any claims against the Company, its
agents, or employees which it may have outstanding at
Completion but, for the avoidance of doubt, this
shall be without prejudice to any claim the Seller
may have against the Buyer pursuant to this Agreement
or other agreements entered into pursuant to this
Agreement.
4.6 At Completion the Buyer shall deliver to the Seller:
(a) the Consideration by way of wire transfer to a bank
account nominated by the Seller;
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(b) the Tax Deed duly executed by the Buyer;
(c) certified copies of or extracts from the board
minutes of the Buyer approving the entry into and
execution, delivery and performance of the
obligations contained in this Agreement and other
agreements contemplated hereby;
(d) the Lease Guarantee, Rent Deposit and Indemnity
Agreement duly executed by the Buyer and Xxxxx
Xxxxxx; and
(e) a release, in a form reasonably satisfactory to the
Seller, of the Nokia Guarantee.
4.7 At Completion, each of the parties thereto shall enter into
the Tax Deed.
4.8 Prior to registration of stock transfer forms in respect of
the Shares in the register of shareholders of the Company and
after Completion, the Seller shall co-operate in any manner
reasonably required by the Buyer for the convening, holding at
short notice and conduct of general meetings of the Company,
shall execute on a timely basis all proxy forms, appointments
of representatives, documents of consent to short notice and
such like that the Buyer may reasonably require, and shall
generally act in all respects as the nominee and at the
direction of the Buyer in respect of the Shares sold by them
and all rights and interests attaching thereto and shall issue
letters of direction to the registered holders of any of the
Shares who hold such shares as their nominee requiring them to
act on the reasonable instructions of the Buyer for the
aforesaid purposes, but the Seller shall not be required to
incur any expenditure in performing its obligations under this
clause 4.8.
4.9 On and with effect from Completion, the Seller shall:
(a) and hereby appoints the Buyer to be its attorney to
exercise all rights attaching to the Shares or
exercisable by the Seller in its capacity as a member
of the Company. The powers exercisable by the Buyer
will include the power to execute, deliver and do all
deeds, instruments and acts in the Seller's name and
on the Seller's behalf in pursuance of the foregoing;
(b) not exercise any rights attaching to the Shares or
exercisable by the Seller in its capacity as a member
of the Company or appoint any other person to
exercise such rights, other than at the written
request of the Buyer;
(c) receive and hold in trust for the Buyer any
dividends, securities or notices, documents or other
communications which may be received by the Seller
from the Company or any third party in respect of the
Shares or in the Seller's capacity as a member of the
Company. Without prejudice to the generality of the
obligations imposed by the foregoing, the Seller
undertakes and agrees to promptly procure the
forwarding to the Buyer of
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all such benefits, notices, documents and
communications and to account to the Buyer for all
benefits arising from the Shares registered in the
Seller's name and/or from the Seller's capacity as a
member of the Company; and
(d) on the written request of the Buyer, ratify all
lawful deeds, instruments and acts exercised by the
Buyer in pursuance of this power; and
(e) acknowledge that in acting under the power or powers
set out in this Power of Attorney the Buyer may act
by its secretary or any director or person acting
pursuant to authority conferred by the Buyer's board
of directors or any director.
The power or powers and undertakings set out in this clause
4.9 will cease to have effect when the Seller ceases to be a
member of the Company, but without prejudice to any power
exercised prior to that date.
4.10 The Buyer shall, within five Business Days of Completion, give
to the Company such notice as is required by section 53 of the
Companies Act, 1990.
5. WARRANTIES
5.1 The Seller hereby represents and warrants to and undertakes
with the Buyer in relation to the Company that each of the
Warranties set out in Schedule 3 is true, accurate, complete
and not misleading in any material respect at the date of this
Agreement.
5.2 The Seller acknowledges that the Buyer is entering into this
Agreement in reliance (inter alia) upon each of the
Warranties.
5.3 The Buyer hereby represents and warrants to and undertakes
with the Seller that each of the Warranties set out in
Schedule 3A (the "BUYER'S WARRANTIES") is true, accurate,
complete and not misleading at the date of this Agreement.
5.4 The Buyer acknowledges that the Seller is entering into this
Agreement in reliance (inter alia) upon each of the Buyer's
Warranties.
5.5 The Warranties are qualified by the facts and circumstances
disclosed fairly, accurately and in a manner that is not
materially misleading in the Disclosure Letter.
5.6 The Seller agrees with the Buyer that the Seller shall waive
and not enforce any right which the Seller may have in respect
of any misrepresentation, inaccuracy, neglect or omission in
or from any information or advice supplied or given by the
Company or any officer, employee or adviser of or to the
Company for the purpose of assisting the Seller to give any of
the Warranties or to prepare the Disclosure Letter.
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5.7 Each of the Warranties shall be construed separately and
independently and (except where the Agreement expressly
provides otherwise) shall not be limited or restricted by
reference to or inference from a provision of this Agreement
or another Warranty.
5.8 The rights and remedies of the Buyer in respect of a breach of
any of the Warranties shall not be affected by the sale and
purchase of the Shares.
5.9 All sums payable by the Seller to the Buyer pursuant to clause
5 shall be paid free and clear of deductions and/or
withholdings save only as may be required by law.
5.10 If any deductions and/or withholdings are required by law to
be made from any sums payable from the Seller to the Buyer
pursuant to clause 5 the Seller shall pay to the Buyer such
sums as will, after the deductions and/or withholdings are
made, leave the Buyer with the same amount as it would have
been entitled to receive if no such deductions and/or
withholdings had been required to be made.
5.11 If any sum payable by the Seller to the Buyer pursuant to
clause 5 shall be subject to a liability to Tax in the hands
of the Buyer, the Seller shall be under the same obligation to
make an increased payment in relation to that liability to Tax
as if the liability were a deduction or withholding required
by law.
5.12 The Seller shall pay to the Buyer any amount required to be
paid pursuant to clause 5 as cleared funds or, at the option
of the Buyer, discharge directly the underlying liability,
within 30 days of receipt of notice of the subject matter or,
if later, on the day before the due date for settlement or
discharge of the liability that is the subject matter of the
claim. For the avoidance of doubt, if it has been agreed in
writing between the parties or finally determined by an
arbitrator under clause 21.2 that any sum is owed to the
Buyer pursuant to this clause 5.12 on the date on which any
Excess is payable by the Buyer pursuant to clause 3.12, the
amount of the Excess shall be reduced by an amount equal to
that sum. Otherwise, the Buyer shall have no set-off rights
against the Excess payable pursuant to clause 3.12 of this
Agreement.
6. LIMITATIONS ON THE SELLER'S LIABILITY
6.1 The liability of the Seller shall be limited in accordance
with the following provisions of this clause:
(a) the Seller shall not be liable by reason of any
single breach of the Warranties or the Indemnities
unless the amount of damage sustained as a result of
the circumstances giving rise to such breach exceeds
EUR5,000;
(b) no liability shall attach to the Seller for breach of
any Warranty unless the aggregate amount of all
liabilities under the Warranties shall have exceeded
the total sum of EUR75,000 whereupon the Seller shall
be liable for the entire amount of such liabilities
and not merely the excess;
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(c) the aggregate liability of the Seller under the
Warranties, this Agreement (including the
Indemnities) and the Tax Deed in respect of all or
any claims shall be subject to an overall maximum
liability of an amount equal to the Consideration (as
such may be adjusted pursuant to the provisions of
clause 3) actually received by the Seller, save that
the provisions of this clause 6.1(c) shall not limit
the liability of the Seller in respect of deliberate
breaches of the Agreement. For the purposes of this
clause 6.1(c), and without prejudice to the
generality of the foregoing, if the Buyer notifies
the Seller of a breach of the restrictive covenants
in clause 13 (Further Undertakings by Seller) and
the Seller fails to take affirmative action to cease
the conduct giving rise to any such alleged breach
within thirty (30) days, the Seller shall be deemed
to have committed a deliberate breach of this
Agreement.
6.2 Notwithstanding any other provision of this Agreement, no
limitation of any kind whatsoever shall apply in respect of
any claim made hereunder against the Seller:
(a) if such claim arises from any fraudulent act or
fraudulent omission or fraudulent misrepresentation
of the Seller, or if such claim arises from wilful
misstatement or wilful concealment by the Seller;
(b) to the extent that the claim relates to title to the
Shares or the title to the assets of the Company; or
(c) to the extent that the claim relates to any criminal
fine or penalty or to wilful or deliberate conduct
leading to a statutory fine or penalty.
6.3 A claim against the Seller under the Warranties shall be
barred unless written notice thereof shall have been given to
the Seller:
(a) in the case of a claim under paragraph 6 of Schedule
3 before the seventh anniversary of the Completion
Date (except in the case of fraud which causes the
Revenue Commissioners to re-open assessments in
respect of the period up to Completion, in which case
the limitation in respect of a claim against the
Seller shall be extended to twenty years after the
end of the accounting period of the Company next
following Completion) ), provided that such period of
seven (7) years shall be deemed to have reduced to
five (5) years from Completion on the date which is
specified in the Finance Xxx 0000 (Commencement of
Section 17) Order (Statutory Instrument Number 508 of
2003), being the date on which the amending
provisions of Section 17(1)(g) of the Finance Xxx
0000 are due to come into operation; or
(b) in the case of any other claim under the Warranties
in Schedule 3 before the second anniversary of the
Completion Date.
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6.4 The Seller shall not be liable in respect of a breach under
the Warranties to the extent that adequate and specific
provision was made for the matter giving rise to the claim in
the Accounts or in the Completion Balance Sheet.
6.5 The Buyer shall not be entitled to recover twice under the
Warranties in respect of the same subject matter or to recover
more than once in respect of the same subject matter under two
or more separate Warranties.
6.6 In the absence of fraud, wilful misstatement or wilful
concealment by the Seller, its agents or advisors the Seller
shall not be liable in respect of a breach of the Warranties:
(a) if and to the extent that the loss to which the claim
relates would not have occurred but for any voluntary
act, omission or transaction of the Buyer or the
Company carried out on or occurring after Completion
otherwise than in the ordinary course of business,
except where the voluntary act, omission or
transaction is required to comply with law or the
requirements of any regulatory authority;
(b) to the extent that the Buyer receives any credit or
makes recovery of an amount as a result of the
circumstances giving rise to the claim, and for the
avoidance of doubt this includes receipt of a credit
or recovery of an amount in respect of Taxation;
(c) to the extent that the loss giving rise to such claim
has already been recovered by the Buyer from any
third party or under any policy of insurance;
(d) to the extent that it arises or (to the extent only
of such increase) is increased as a result of an
increase in rates of Taxation after the date of this
Agreement or such breach or claim occurs as a result
of any legislation enacted made in force or allowed
(as appropriate) or any mandatory requirement of the
Revenue Commissioners imposed after the date of this
Agreement with or without retrospective effect;
(e) to the extent that the facts or circumstances giving
rise to the breach were reasonably evident from the
documents included in the Due Diligence Document
Delivery Log.
6.7 Any payment by the Seller to the Buyer pursuant to the
Warranties, the Indemnities, or the Tax Deed shall be deemed
to be a reduction of the Consideration payable hereunder.
6.8 Nothing herein or in the Warranties, shall or shall be deemed
to relieve the Buyer of any common law duty to mitigate any
loss or damage incurred by it.
6.9 The Seller shall not be required to make any payment to the
Buyer in respect of any contingent liability arising from a
breach of any of the Warranties which is
15
notified to the Seller until such liability ceases to be
contingent, or (if earlier) the time at which the Buyer or the
Company suffers loss resulting therefrom.
6.10 In the absence of fraud, wilful misstatement or wilful
concealment by the other party, its agents or advisors, the
parties hereto agree that they will pursue remedies for any
breach of this Agreement (including for any breach of the
Warranties) under the terms of and subject to the provisions
of this Agreement, provided that nothing in this clause 6.10
shall limit the Buyer's right to seek specific performance of
any of the obligations of the Seller set out in clause 13.
6.11 The Buyer will have no right to claim under the Indemnities,
the Warranties or the Tax Deed in respect of any claim against
the Company or the Buyer if, after Completion, (i) the Seller
assumes the defence of such claim pursuant to clause 7.3 ,
and (ii) any officer or employee of the Buyer or the Company,
without the Seller's consent (which is not to be unreasonably
withheld or delayed), admits in writing total or partial
liability to a third party for the claim against the Company
or the Buyer.
7. WARRANTY CLAIMS
7.1 The Buyer shall notify the Seller in writing as soon as
reasonably practicable of:
(a) any claim made against it by a third party which may
give rise to a claim under the Warranties, the
Indemnities or the Tax Deed; and
(b) any claim the Buyer is entitled to bring against a
third party which claim is based on circumstances
which may give rise to a claim under the Warranties,
the Indemnities or the Tax Deed.
7.2 Provided that the Buyer has notified the Seller in writing as
soon as reasonably practicable in accordance with the terms of
clause 7.1, the Buyer shall not be liable for any delay in
giving any notice under clause 7.1 and shall not by reason of
such delay be precluded from bringing any such claim against
the Seller.
7.3 Upon receipt of notice pursuant to clause 7.1(a), the Seller
may assume the defence of such claim unless the Buyer
reasonably determines that (a) there may be legal defences
available to the Buyer or the Company which are more effective
than those available to the Seller; or (b) that matters of
corporate or management policy or a conflict of interest make
it advisable for the Buyer to retain control of defending such
claim; provided that the Seller's assumption of the defence of
any claim pursuant to this clause 7.3 shall be subject to:
(i) the Seller indemnifying the Buyer and the Company against
any liabilities and expenses arising from such defence; (ii)
such defence being conducted by the Seller in a proper, timely
and reasonable fashion, (iii) the Seller conducting such
defence in a manner which does not restrict or impair the
current or prospective business activities of the Buyer and
the Company or materially prejudice the Buyer or the Company
and (iv) any settlement of such claim agreed by the Seller
shall be
16
subject to the consent of the Buyer (such consent not to be
unreasonably withheld or delayed).
7.4 The Buyer shall provide to the Seller and the Seller's
advisers reasonable access upon reasonable notice to any
relevant documents and records within their power, possession
or control for the purpose of investigating any claims under
the Warranties, the Indemnities and/or the Tax Deed and
enabling the Seller to take the action referred to in clause
7.3 and shall allow the Seller and its advisers to take
copies of any relevant documents or records at the Seller's
expense.
8. INDEMNITIES
8.1 PROPERTY
The Seller shall indemnify and hold harmless and keep the
Buyer indemnified against all costs, claims, actions,
proceedings, demands, losses, awards, penalties, fines,
liabilities (including without limitation, any liability to
taxation) and expenses (including, without limitation, legal
and other professional fees) which the Buyer may incur in
relation to the Property arising out of or in connection with
any breaches by the Company of the tenant's covenants under
the Leases and any breaches by the Company of the Planning
Acts or the Safety, Health and Welfare at Work Xxx 0000 and
all regulations made thereunder prior to the Completion Date.
8.2 EMPLOYMENT
The Seller shall indemnify and keep the Buyer indemnified
against all costs, claims, actions, proceedings, demands,
losses, awards, penalties, fines, liabilities (including
without limitation, any liability to taxation) and expenses
(including, without limitation, legal and other professional
fees) which the Buyer may incur:
(a) arising out of or in connection with any claim made
by or on behalf of Xxxxxxx Xxxxxx which relates to
any act or omission of the Seller or the Company in
connection with his employment by the Seller or the
Company or arising out of or in connection with his
dismissal by the Seller or the Company; and
(b) arising out of or in connection with any claim made
by or on behalf of any employee of the Seller or the
Company or by or on behalf of the Minister for
Enterprise, Trade and Employment in connection with
the collective redundancies implemented by the
Company during calendar years 2002 or 2003.
8.3 LIMITATIONS ON INDEMNITIES
For the avoidance of doubt, other than the limitations set out
in clauses 6.1(a) and 6.1(c), none of the exclusions or
limitations contained in clause 6 of this Agreement shall
apply to the Indemnities and nothing included or referred to
in
17
the Disclosure Letter or the Information shall prejudice or
restrict the Buyer's rights under the Indemnities.
9. TRADE XXXX LICENCE
9.1 At Completion the Seller shall grant to the Buyer a licence in
the form of the Trade Xxxx Licence to use the name
"Brightpoint" for a period of 135 days post-Completion on and
subject to the terms of the Trade Xxxx Licence.
9.2 Without prejudice to clause 9.1, the Buyer will procure that,
as soon as practicable after Completion (and in any event
within 30 days), the name of the Company is changed to a name
that does not include "Brightpoint" and is not confusingly
similar thereto.
10. POST COMPLETION MATTERS
10.1 PHONEPAK DEBT
(a) Following Completion, the Buyer or the Company will
use all reasonable endeavours to collect the PhonePak
Debt, the Seller will provide the Buyer with
reasonable assistance to effect such collection, and
the net amount collected by the Buyer or the Company
in respect of the PhonePak Debt, after deduction of
the expenses of collection, shall be split equally
between the Buyer and the Seller.
(b) The Buyer or the Company shall pay to the Seller any
amounts owed to the Seller pursuant to clause
10.1(a) within five Business Days of receipt by the
Buyer or the Company.
(c) The Buyer shall provide the Seller with monthly
updates on the costs incurred and progress made in
its endeavours to collect the PhonePak Debt until the
entirety of the PhonePak Debt has been collected or
the first anniversary of the Completion Date,
whichever is earlier.
10.2 OPERATION OF BUSINESS
Following Completion, the Buyer will use all reasonable
endeavours in carrying on the Business in the ordinary course,
to avoid damaging the reputation of Brightpoint Inc. or its
Affiliates, provided that nothing in this clause 10.2 shall
require the Buyer to incur any expenditure or act in a way
which would restrict or impair the current or prospective
business activities of the Buyer and the Company or materially
prejudice the Buyer or the Company. In particular, but without
prejudice to the generality of the foregoing, the Buyer shall
procure that, following Completion, the Company does not hold
itself out as an Affiliate of Brightpoint Inc. except that
this obligation of the Buyer shall not require the Buyer to
prejudice or restrict the rights of the Company under the
Trade Xxxx Licence.
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10.3 TRANSITIONAL ARRANGEMENTS
For a period of 60 days (the "TRANSITION PERIOD") following
Completion, the Seller will endeavour to assign Xxxxx Xxxxxx
during his normal working hours to assist the Buyer and
facilitate the transfer of the Company to the Buyer. The
Seller will pay all direct and indirect costs and expenses
arising from the employment of Xxxxx Xxxxxx for the first 30
days of the Transition Period, and the Buyer will pay all
direct and indirect costs and expenses arising from the
employment of Xxxxx Xxxxxx for the remainder of the Transition
Period.
10.4 SOFTWARE LICENCE
The Seller will as soon as practicable obtain and provide to
the Buyer a separate certificate of ownership for the software
licences granted by Microsoft and used by the Company at the
Completion Date, and the Seller shall indemnify and keep the
Buyer indemnified against all costs, claims, actions,
proceedings, demands, losses, awards, penalties, fines,
liabilities (including without limitation, any liability to
taxation) and expenses (including, without limitation, legal
and other professional fees) which the Buyer may suffer as a
result of the Seller's failure to provide such certificate.
10.5 NEXTEL STOCK
The Seller shall indemnify and keep the Buyer indemnified
against all costs, claims, actions, proceedings, demands,
losses, awards, penalties, fines, liabilities (including
without limitation, any liability to taxation) and expenses
(including, without limitation, legal and other professional
fees) which the Buyer may incur as a result of any claim by
Nextel that the Nextel Inventory does not include all the
items delivered to the Company by or on behalf of Nextel prior
to the date of this Agreement, or that the condition of the
Nextel Inventory has deteriorated while in the custody of the
Company prior to the date of this Agreement.
11. CONFIDENTIAL INFORMATION
11.1 The Seller shall not and shall procure that no body corporate
controlled by it shall, at any time after the date of this
Agreement, make use of or disclose for their own benefit or
for or on behalf of or to any other person any Confidential
Information or Know-How which may be within or may come to
their knowledge.
11.2 The Seller shall and shall procure that any body corporate
controlled by it, will use all reasonable endeavours to
prevent the disclosure of any Confidential Information or
Know-How in violation of this Agreement.
11.3 Clause 11.1 shall not apply to:
(a) disclosure of any Confidential Information or
Know-How to officers or employees of the Buyer or the
Company whose province it is to know about the
Confidential Information or Know-How;
19
(b) disclosure of any Confidential Information or
Know-How required by law;
(c) disclosure of any Confidential Information or
Know-How to any professional adviser for the purpose
of advising the Seller and on terms that this clause
11 shall apply to any use or disclosure by the
professional adviser; or
(d) any Confidential Information or Know-How which comes
into the public domain otherwise than by breach of
this clause 11 by the Seller.
12. USE OF INTELLECTUAL PROPERTY RIGHTS
The Seller shall not, and shall procure that no body corporate
controlled by the Seller will, either alone or jointly with, through or
as manager, adviser, consultant or agent for any person, directly or
indirectly use in connection with any business which competes, directly
or indirectly, with any part or all of the Business, any of the
Intellectual Property Rights or anything which is intended or is likely
to be confused with, any of the Intellectual Property Rights.
13. FURTHER UNDERTAKINGS BY SELLER
13.1 The Seller shall not and shall procure that no body corporate
controlled by it will, either alone or jointly with, through
or as owner, investor, operator, officer, director, partner,
manager, adviser, consultant, agent or otherwise for any
person (together the "RESTRICTED PARTIES"), directly or
indirectly:
(a) for a period of two years after the Completion Date
carry on, or be engaged or interested in, or assist,
any business competing, directly or indirectly, with
any part or all of the Business in the Territory as
such Business is being conducted at the Completion
Date;
(b) for a period of two years after the Completion Date
in competition with any part or all of the Business
as such Business is being conducted at the Completion
Date either seek to procure orders from, or do
business with, or procure directly or indirectly any
other person to seek to procure orders from or do
business with, any person who has been a customer of
the Company in any part or all of the Business at any
time during the period of 12 months before the date
of this Agreement;
(c) for a period of two years after the Completion Date
engage, employ, solicit, or contact with a view to
the engagement or employment by any person, any
employee, officer or manager of the Company. The
placing of an advertisement of a post available to a
member of the public generally and the recruitment of
a person through an employment agency shall not
constitute a breach of this clause 13.1(c) provided
that neither the Seller nor its employees or agents
solicit an employee, officer or manager of the
Company to respond to such advertisement, or
encourage or advise such agency to approach any
employee, officer or manager of the Company;
20
(d) do or say anything which is harmful to the reputation
of the Company or which may foreseeably lead any
person to cease to deal with the Company in
connection with any part or all of the Business as
such Business is being conducted at the Completion
Date on substantially equivalent terms to those
previously offered or at all;
(e) for a period of two years after the Completion Date
seek to contract with or engage, in such a way as to
adversely affect the Business of the Company as
carried on at the date of this Agreement, any person
who has been contracted with or engaged to
manufacture, assemble, supply or deliver products,
goods, materials or services to the Company at any
time during the period of 12 months before the date
of this Agreement;
with the intent that each of the foregoing provisions of this
clause 13.1 shall constitute an entirely separate and
independent restriction on the Seller.
For the avoidance of doubt, the foregoing shall not restrict
the Restricted Parties from contracting with or doing business
with any business operated by a third party and located
outside of the Territory which may after the date of this
Agreement compete or attempt to compete with the Business in
the Territory unless the relevant Restricted Party knowingly
assists such third party to compete with the Business in the
Territory or wilfully disregards the fact that such third
party is competing or attempting or intending to compete with
the Business in the Territory.
For the purposes of this clause 13.1, "corporate controlled"
shall mean: (a) the power (whether directly or indirectly and
whether by the ownership of share capital or the possession of
voting power by contract or otherwise) to appoint and/or
remove all or such of the members of the board of directors or
other governing body of a person who are able to cast a
majority of the votes capable of being cast by the members of
that board or body on all, or substantially all, matters, or
otherwise to control or have the power to control the policies
and affairs of that person; and /or (b) the holding and/or
possession of the beneficial interest in and/or the ability to
exercise the voting rights applicable to shares or other
securities in a person which confer in aggregate on the
holders thereof more than fifty per cent. of the total voting
rights exercisable at general meetings of that person on all,
or substantially all, matters.
13.2 It is agreed between the parties that, whilst the restrictions
set out in clause 13.1 are considered fair and reasonable, if
it should be found that any of the restrictions be void or
unenforceable as going beyond what is fair and reasonable in
all the circumstances and if by deleting part of the wording
or substituting a shorter period of time or different
geographical limit or a more restricted range of activities
for any of the periods of time, geographical limits or ranges
of activities set out in clause 13.1 it would not be void or
unenforceable then there shall be substituted such next less
extensive period or limit or activity or such deletions shall
be made as shall render clause 13.1 valid and enforceable.
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14. RELEASE
14.1 In exchange for the agreements set forth herein and for other
good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in the absence of fraud,
wilful misstatement or wilful concealment by any Released
Party (as defined below), the Buyer on its own behalf and for
its Affiliates, successors and assigns (collectively, the
"RELEASING PARTIES") hereby unconditionally and irrevocably to
the extent permitted by law releases, waives and discharges
the Seller's directors and officers and the directors and
officers of Brightpoint Inc. as at the date of this Agreement
(the "RELEASED PARTIES") of and from any and all claims,
demands, proceedings, causes of action, obligations,
contracts, agreements, debts and liabilities whatsoever, which
the Releasing Parties now have, claim or assert, or might or
could hereafter claim or assert, against any of the Released
Parties based upon facts existing on or prior to the date of
this Agreement.
14.2 Notwithstanding the provisions of clause 14.1, the release,
waiver and discharge set out therein does not extend to or
include the obligations and liabilities of the Seller created
by or undertaken pursuant to this Agreement
14.3 The Buyer hereby irrevocably covenants in the absence of
fraud, wilful misstatement or wilful concealment by any
Releasing Party, and to the extent permitted by law, to
refrain from, directly or indirectly asserting any claim or
demand, or commencing, instituting or causing to be commenced,
any proceedings of any kind against any of the Released
Parties, based upon any matter purported to be released by
virtue of clause 14.1 but, for the avoidance of doubt,
nothing in this clause 14 shall prevent or restrict the
Releasing Parties from reporting any matter which may
constitute a criminal or statutory offence to An Garda
Siochana or the appropriate authorities, or co-operating with
any proceedings arising from such report.
14.4 The Buyer acknowledges that the Seller is acting (solely for
the purposes of this clause 14) as agent for the Released
Parties to secure for them the benefit of this clause and that
the Released Parties have provided valuable consideration to
the Buyer by procuring the execution of this Agreement by the
Seller.
14.5 The Buyer further acknowledges that it is acting for itself
and (solely for the purposes of this clause 14) to the extent
permitted by law as agent for the other Releasing Parties.
15. ASSIGNMENT
No party may assign or transfer or purport to assign or transfer any of
its rights or obligations under this Agreement to any person without
the prior written consent of the other party which shall not be
unreasonably withheld or delayed.
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16. ANNOUNCEMENTS
Unless required by law or by the rules of any regulatory authority or
stock exchange to which any party is subject, no public announcement,
communication or circular concerning the transactions referred to in
this Agreement shall be made or despatched at any time (whether before
or after Completion) by any party without the prior written consent of
the other parties (such consent not to be unreasonably withheld or
delayed).
17. COSTS
Each party shall pay its own costs of and incidental to the
negotiation, preparation, execution and implementation by it of this
Agreement and of all other documents referred to in it. The Buyer shall
be responsible for stamp duty payable on the transfer of the Shares.
18. FURTHER ASSURANCE
18.1 At any time after Completion any party shall (at its sole
expense) do and execute, or procure to be done and executed,
all necessary acts, deeds, documents and things as may be
reasonably requested of it by the other party to give effect
to this Agreement.
18.2 At any time (after Completion) and upon the Buyer's reasonable
request from time to time the Seller shall:
(a) provide, or procure to be provided, to the Buyer all
information relating to the business and affairs of
Company and which is in its possession or under its
control; and
(b) give, or procure to be given, to the Buyer, its
directors and agents access to any documents
containing any of the information referred to in
clause 18.2(a) and the Buyer may copy any of those
documents.
19. GENERAL
19.1 No variation of this Agreement shall be valid unless it is in
writing and signed by or on behalf of each of the parties.
19.2 The failure to exercise or delay in exercising a right or
remedy under this Agreement shall not constitute a waiver of
the right or remedy or a waiver of any other rights or
remedies and no single or partial exercise of any right or
remedy under this Agreement shall prevent any further exercise
of the right or remedy or the exercise of any other right or
remedy.
19.3 The rights and remedies of the Buyer contained in this
Agreement are cumulative and not exclusive of any rights or
remedies provided by law.
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19.4 The invalidity, illegality or unenforceability of any
provision of this Agreement shall not affect or impair the
continuation in force of the remainder of this Agreement.
19.5 If any party defaults in the payment when due of any sum
payable under this Agreement (whether payable by agreement or
by an order of a court or otherwise), the liability of that
party shall be increased to include interest on that sum from
the date when such payment was due until the date of actual
payment at the Interest Rate. Such interest shall accrue from
day to day and shall be compounded annually.
20. NOTICES
20.1 Any notice or other communication under or in connection with
this Agreement shall be in writing and shall be delivered
personally or by registered post, to the party due to receive
the notice or communication at his address set out in this
Agreement or such other address as any party may specify by
notice in writing to the others. Any such notice served on the
Seller's Solicitors shall be deemed, for the purposes of this
Agreement to be served on the Seller.
20.2 In the absence of evidence of earlier receipt, any notice or
other communication shall be deemed to have been duly given:
(a) if delivered personally, when left at the address
referred to in this Agreement; and
(b) if sent by registered post, 48 hours after posting
it.
21. DISPUTE RESOLUTION
21.1 MEDIATION
(a) In the event a controversy, claim, or dispute arises
out of this Agreement or any breach thereof (each a
"DISPUTE" and together "DISPUTES"), either party may
demand mediation in Dublin, Ireland by notifying the
other party. The notification shall state with
specificity the nature of the Dispute and the amount
of any claims under the Dispute.
(b) Upon receipt of the mediation demand, the parties
hereto shall use all reasonable endeavours to agree
within 7 Business Days upon the appointment of an
acceptable mediator (the "Mediator"), in default of
agreement on which the parties shall at the election
of either party proceed to arbitration in accordance
with clause 21.2.
(c) The Mediator shall set the mediation procedures. The
mediation procedures shall provide for the mediation
to be completed within 30 Business Days of the date
of the initial demand for mediation. The parties
shall participate in good faith in the mediation and
shall use their best
24
efforts to reach a resolution within the 30 Business
Day time period. Each party shall make available in a
timely fashion a representative with authority to
resolve the Dispute. In the event that the Dispute
has not been resolved within 30 Business Days, the
mediation may continue if the parties so desire. If
not, the Mediator shall so notify the parties and
declare the mediation terminated. In the event that
the mediation continues beyond 30 Business Days, but
is not resolved within what the Mediator believes is
a reasonable time thereafter, the Mediator shall so
notify the parties, and declare the mediation
terminated.
21.2 ARBITRATION
(a) All Disputes which have not be resolved by mediation
shall at the election of either party be determined
by final and binding arbitration in Dublin, Ireland
in accordance with the International Arbitration
Rules of the International Centre for Dispute
Resolution ("ICDR").
(b) The arbitration shall be heard by one arbitrator (the
"ARBITRATOR") to be appointed by the agreement of the
parties or in default of agreement by the President
for the time being of the Law Society in England and
Wales at the request of either party.
(c) The Arbitrator shall be required to proceed promptly
and diligently and to render his/her decision as soon
as practicable.
21.3 Notwithstanding a submission to mediation and/or the
initiation of arbitration proceedings each party shall
continue to perform all duties and obligations under this
Agreement, on a without prejudice basis.
21.4 Any proceedings, claims or disputes under the Lease Guarantee,
Rent Deposit and Indemnity Agreement or the Trade Xxxx
Licence, or relating to the amount of the Excess or Shortfall
payable under clauses 3.11 and 3.12 of this Agreement shall
not constitute a Dispute (as defined in clause 21.1(a))
subject to the provisions of this clause 21.
22. GOVERNING LAW
This Agreement is governed by, and shall be construed in accordance
with the laws of Ireland.
23. ENTIRE AGREEMENT
This Agreement (together with the Disclosure Letter, the Tax Deed and
all other documents in the agreed form) constitutes the entire
understanding and agreement between the parties and supersedes all
prior agreements, arrangements, letters and discussions between the
parties.
25
24. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which when executed and delivered shall be an original, but all the
counterparts together shall constitute one and the same instrument.
26
SCHEDULE 1
INFORMATION CONCERNING THE COMPANY
1. Registered number: 269295
2. Date of incorporation: 15th July, 1997
3. Place of incorporation: Ireland
4. Address of registered office: 00/00 Xxxxx Xxxx Xxxx, Xxxxxx 0
5. Type of company: Private company limited by shares
6. Authorised share capital: EUR1,250,000 divided into 5,000,000 Ordinary
Shares of EUR0.25 each
7. Issued share capital: EUR2.50 divided into 10 Ordinary Shares of
EUR0.25 each
8. Directors: J. Xxxx Xxxxxx, Xxxxxx X. Xxxxx, Xxxxxx
Xxxxx Xxxx, Xxxxxx X. Xxxxxx
9. Secretary: Goodbody Secretarial Limited
10. Accounting reference date: 31 December
11. Auditors: Ernst & Young
12. Tax residence: Ireland
13. Charges: None
14. Shareholdings:
Registered Owner of Shares Ordinary Shares
The Seller 10
Beneficial Owner of Shares Ordinary Shares
The Seller 10
27
SCHEDULE 2
ITEMS FOR DELIVERY BY THE SELLER AT COMPLETION
1. Duly executed transfers by the Seller in favour of the Buyer or its
nominee(s) (together with any share certificates issued in respect of
the Shares or, if the share certificate is found to be missing, an
express indemnity, in a form satisfactory to the Buyer).
2. Any waivers, consents or other documents necessary to vest in the Buyer
the full beneficial ownership of the Shares and to enable the Buyer or
its nominee(s) to be registered as owners of the Shares.
3. The common seal and all registers, minute books, and other statutory
books, required to be kept by the Company pursuant to the Companies
Acts, 1963 to 2001 made up to the date of Completion and all
certificates of incorporation and certificates of incorporation on
change of name for the Company.
4. A copy of the memorandum and articles of association of the Company
certified by the secretary of the Company as a true and complete and
accurate copy as at the date of Completion.
5. The Tax Deed duly executed by the Seller and the Company.
6. The Trade Xxxx Licence duly executed by Brightpoint, Inc. and the
Company.
7. Evidence of the release or waiver of any debts owed by the Company to
Brightpoint Inc. or any Affiliates of Brightpoint Inc.
8. Letters in the agreed form duly executed under seal from the present
directors and secretaries of the Company in each case resigning from
their respective offices (with effect from the end of the meeting held
pursuant to clause 4.3) and acknowledging that the writer has no claim
against the relevant company for compensation for loss of office,
redundancy, unfair dismissal or otherwise arising from such
resignation.
9. Copies of all bank mandates of the Company together with bank
statements or other suitable information showing the financial
situation of the Company with their bankers at close of business on the
latest practicable date before the Completion Date.
10. Certified copies of (i) the Accounts signed by the directors of the
relevant companies and (ii) resolutions of the directors of the
relevant companies approving the Accounts.
11. The written resignation of the auditors of the Company containing
confirmation in accordance with the provisions of Section 185(2)(a) of
the Companies Act, 1990 that there are no circumstances connected with
their resignation which ought to be brought to the attention of the
members or creditors of the Company and incorporating an
acknowledgement that they will have no claim against the Company in
respect of
28
compensation for loss of office or on any account whatsoever including
fees for services rendered.
12. The Management Accounts.
13. The Leases
29
SCHEDULE 3
WARRANTIES
1. CAPACITY AND AUTHORITY
(a) INCORPORATION AND EXISTENCE
The Company is a company duly incorporated and validly
existing under the laws of Ireland.
(b) POWER AND AUTHORITY
(i) The Seller has the legal right and full power and
authority to execute and deliver, and to exercise its
rights and perform its obligations under this
Agreement and all the documents which are to be
executed at Completion.
(ii) The Company has the legal right and full power and
authority to carry on its business and activities as
currently being carried on and is duly qualified to
do business in the jurisdictions in which the
transaction of its business makes such qualification
necessary.
(c) BINDING AGREEMENTS
This Agreement constitutes, and the documents which are to be
executed at Completion when executed will constitute, valid
and binding agreements of the Seller enforceable in accordance
with their respective terms.
2. INFORMATION
(a) The Information, except for any document which is part of the
Information and which has been prepared by a third party, or
any specific piece of information included in the Information
which is derived from a document prepared by a third party,
(together the "THIRD PARTY INFORMATION"), is fair, accurate
and not materially misleading.
(b) The Seller has no reason to believe that any of the Third
Party Information is not fair or accurate, or is materially
misleading.
3. SHARES AND SUBSIDIARIES
(a) THE SHARES
(i) The Seller is the sole legal and beneficial owner of
the Shares as set out in Schedule 1.
30
(ii) 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 Seller or
the Company.
(iii) The Shares are fully paid up or credited as fully
paid up.
(iv) 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 any issued or unissued shares of the Company and
no claim has been made by any person to be entitled
to any such Encumbrance.
(v) Save as provided in this Agreement:
(A) 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
(B) 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 Last Accounting Date.
(vi) All rights and interests of every kind existing in
respect of the Shares are valid and enforceable by
action or legal proceeding or otherwise.
(b) SUBSIDIARIES, ASSOCIATES AND BRANCHES
(i) The Company does not have any subsidiary or
subsidiary undertaking and it does not have any
interest in, and has not agreed to acquire any
interest in, any shares of any other bodies
corporate.
(ii) The Company does not have outside Ireland any branch,
agency or place of business, or any permanent
establishment (as that expression is defined in the
relevant double taxation relief orders current at the
date of this Agreement).
(iii) The Company does not have nor has had any associated
undertaking within the meaning of the European
Communities (Companies: Group Accounts) Regulations,
1992.
(iv) The Company does not have any liability (actual,
contingent or otherwise) in respect of any company or
other entity which was formerly a subsidiary or an
associated undertaking of the Company.
31
4. ACCOUNTS
(a) GENERAL
(i) The Accounts have been prepared in accordance with
the laws of Ireland on a basis consistent with the
two previous financial periods and in accordance with
the Accounting Requirements.
(ii) No change in accounting policies has been made in
preparing the accounts of the Company for each of the
two financial periods of the Company ended on the
Last Accounting Date, except as stated in the audited
balance sheets and profit and loss accounts for these
periods.
(iii) 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 Last Accounting Date
and of the results and cashflows of the Company for
the financial period ending on the Last Accounting
Date.
(b) PROVISION FOR DEBTS AND LIABILITIES
To the extent required by the Accounting Requirements, full
disclosure of and adequate provisions for bad and doubtful
debts and all liabilities (whether actual, contingent or
otherwise) and all material financial commitments in existence
at the Last Accounting Date have been made in the Accounts.
(c) EXTRAORDINARY AND EXCEPTIONAL ITEMS
The results shown by the audited profit and loss accounts of
the Company and the consolidated profit and loss account of
the Company for each of the two financial periods of the
Company ended on the Last Accounting Date 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.
(d) PROVISION FOR TAXATION
To the extent required by the Accounting Requirements, 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 Last Accounting Date and whether or not the Company has or
may have any right of reimbursement against any other person
and the Accounts provide or note in full for any contingent or
deferred liability to Taxation for any such period.
(e) VALUATION OF STOCK AND WORK IN PROGRESS
In the Accounts:
32
(i) stocks were valued in the same manner adopted in the
two preceding accounting periods and on the basis of
the lower of cost and net realisable value;
(ii) 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 Last Accounting Date.
(iii) the value of the work in progress shown in the
Accounts properly reflects only the direct costs
incurred by the Company.
(f) DEPRECIATION
(i) 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 two previous accounting periods.
(ii) The Accounts make adequate provision for depreciation
and amortisation of fixed assets of the Company to
the period ended on the Last Accounting Date and such
provisions 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.
(g) 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.
(h) BOOK DEBTS
Full and adequate provision for bad and doubtful debts was
made in the Accounts in accordance with the Accounting
Requirements, and the Seller is not aware of any book debts
which are not good for the full face value, or for which
provision should be made pursuant to the Accounting
Requirements.
(i) 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.
33
(j) MANAGEMENT ACCOUNTS
The Management Accounts 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
year immediately preceding the date of the Management Accounts
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.
5. CHANGES SINCE THE LAST ACCOUNTING DATE
(a) GENERAL
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 Last Accounting Date and so as to maintain the
business of the Company as a going concern;
(ii) there has been no material adverse change in the
financial or trading position of the Company; and
(iii) save in the ordinary and proper course of business no
material changes have occurred in 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.
(b) SPECIFIC
Since the Last Accounting Date:
(i) the Company has not disposed of any asset (including,
without limitation, trading stock) nor 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 for 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;
(ii) the Company has not other than in the ordinary and
usual course of its business:
34
(A) acquired or disposed of, or agreed to
acquire or dispose of, any material or
capital asset; or
(B) assumed or incurred, or agreed to assume or
incur, any material liability, expenditure
or obligation;
(iii) the Company has not factored, sold nor agreed to sell
any of its debts;
(iv) the Company has not made, nor agreed to make, any
capital expenditure exceeding in total EUR5,000 or
incurred, or agreed to incur, any commitments
involving capital expenditure exceeding in total
EUR5,000;
(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 similar 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;
(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 nor lent any money nor
increased by an amount any secured liability nor
(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 agreed to the registration of any
transfer of any share or loan capital;
(xii) the Company has not created, extended, granted or
issued or agreed to create, extend, grant nor 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;
35
(xiv) the Company has not written off any debts;
(xv) the Company has not, to the Seller's knowledge, done
nor omitted to do anything which would entitle any
third party to terminate any contract with the
Company or call in any money before the normal due
date thereof; and
(xvi) the Company has not made any alteration to the
provisions of its memorandum of association or
articles of association.
6. TAXATION
(a) GENERAL
(i) PAYMENT OF TAX
(A) 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 it 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 the Company does
not have any liability in respect of Tax
(whether actual or contingent) that is not
fully provided for in the Accounts.
(ii) TAX INDEMNITIES
(A) 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.
(B) No act or transaction has been effected in
consequence of which the Company is liable
for any taxation primarily chargeable
against some other person.
(iii) REVENUE CONCESSIONS/CLEARANCES
(A) The amount of tax payable by the Company
during any accounting period up to and
including the accounting period in which
Completion falls has not depended on any
concession, agreement or other formal or
informal arrangement with any tax, revenue
or fiscal authority.
36
(B) 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.
(iv) RESIDENCE
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 at
no time carried on any trade in any other country
(whether through a branch, agency, permanent
establishment or otherwise) and does not have a
branch, agency or permanent establishment in any
country other that the Republic of Ireland.
(v) ATTACHMENT NOTICES
No notice of attachment has been served on the
Company or in relation to any funds or assets of the
Company under Section 1002 of TCA.
(vi) GROUP RELIEF
The Company is not nor has ever been a member of a
group of companies within the meaning of Section 590
or Section 616 TCA, Part 12 Chapter 5 TCA, or
associated with any other company within the meaning
of Section 432(1) TCA.
(b) COMPLIANCE
(i) SUBMISSION OF COMPUTATIONS
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 Last Accounting Date.
(ii) TAXATION ACCOUNTS, RECORDS AND RETURNS
The Company has for each accounting period up to and
including the accounting period in which Completion
falls:
(A) furnished the Inspector of Taxes with full
and accurate particulars relating to its
affairs;
(B) properly and within the prescribed periods
of time made all returns, declarations and
payments and given or delivered all notices,
accounts and information required for the
purposes of taxation;
37
(C) sufficient and proper records in relation to
all events up to and including Completion
including any claims or elections made to
calculate the tax liability or relief which
would arise on any disposal or on the
realisation of any asset owned by the
Company at Completion;
(D) duly and properly submitted all claims,
elections, amendments to claims, withdrawals
of claims and disclaimers which would be of
benefit to the Company within the time
limits laid down in the relevant
legislation.
All such particulars, returns, notices, accounts
information and payments have been correct in all
material respects and on a proper basis and there is
no dispute or disagreement outstanding nor any
grounds or circumstances which might cause any
dispute or disagreement with any tax, revenue or
fiscal authority and no such dispute or disagreement
is expected or contemplated or likely to commence
regarding any liability or potential liability to any
tax recoverable from the Company or the availability
of any relief from tax.
(iii) INTEREST ON TAX
The Company is not liable and has not at any time
since the Last Accounting Date been liable to pay
interest on overdue taxation.
(iv) APPEALS
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 such payment.
(v) OFFENCES
Neither the Company nor any other person acting in
relation to the Company has committed any act or made
any omission which might constitute an offence under
Sections 1078 or 1079, TCA.
(vi) OFFSET BETWEEN TAXES
The Company is not nor has it ever been subject to
the provisions of Section 1006A TCA and the
regulations enacted under it.
(vii) WITHHOLDING TAX
The Company has duly complied with the requirements
of Section 239 TCA and with the requirements of all
other provisions relating to the deduction and
withholding of tax at source up to the date of this
38
Agreement and all such tax which has become due or
will become due after Completion by virtue of an
event pre-Completion to the Revenue Commissioners has
been paid or will be paid to the Revenue
Commissioners.
(c) TAX AVOIDANCE
(i) TRANSACTIONS TO AVOID LIABILITY TO TAX
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 TCA 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.
(ii) ARMS LENGTH TRANSACTIONS
The Company has not acquired nor disposed of any
asset, supplied nor received any service nor entered
into any transaction otherwise than by way of bargain
at arm's length.
(iii) DEPRECIATORY TRANSACTIONS AND DIVIDEND STRIPPING
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
be disallowed in whole or in part by virtue of the
application of Section 621 or 622 TCA.
(d) CORPORATION TAX
(i) PAYMENTS TO OFFICERS AND EMPLOYEES
(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
(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.
39
(ii) SHARE SCHEMES AND RELIEFS
(A) In relation to the Company there is not and
never has been in place an approved share
option scheme under Schedule 32 Paragraph 7
TCA, an approved profit salary scheme under
Section 509 to 518 and Schedule 11 TCA, an
employee share ownership trust under Section
519 and Schedule 12 TCA, an approved savings
related share option scheme under Sections
519A to 519C and Schedules 12A to 12B
inclusive, or an approved share option
scheme under Section 519D and Schedule C
TCA.
(B) The employees of the Company have not
benefited from Section 479 TCA in relation
to shares in the Company.
(iii) BUSINESS EXPANSION SCHEME
(A) The Company nor any of its shareholders is
affected by the restrictions on the Business
Expansion Scheme relief which are contained
in Sections 489(7), (9), 490 and 491 TCA.
(B) The Company does not beneficially own nor
has it ever beneficially owned shares to
which Section 489 TCA apply or may have
applied.
(iv) TAXATION OF RENTS AND SIMILAR PAYMENTS
The Company has not effected nor 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 TCA.
(v) GROUP RELIEF
(A) The Company has not since its incorporation
acquired from any other company any asset
other than trading stock in circumstances
where the companies were, at the time of the
acquisition, members of the same Group of
companies as defined in sections 590(16) and
616 TCA.
(B) 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 TCA.
40
(vi) LOSSES
No change of ownership of the Company has taken place
in circumstances such that Section 401 TCA, has or
may be applied to deny relief for a trading loss or
losses incurred by the Company.
(vii) CAPITAL ALLOWANCES
(A) The restrictions on the use of capital
allowance for certain leased assets as set
out in Sections 403 and 404 TCA, do not have
application to any transactions entered into
by the Company.
(B) The provisions of Section 317(3) TCA do not
apply to any expenditure incurred by the
Company in respect of which capital
allowances are still being claimed.
(C) Any machinery or plant acquired for use for
the purposes of the trade of the Company has
been used wholly and exclusively for the
purposes of the trade of the Company.
(D) On a sale of any machinery and plant for a
consideration equal to the book value of the
assets shown in or adopted for the purpose
of the Completion Balance Sheet, no
balancing charge under Section 288 TCA not
fully provided for in the Completion Balance
Sheet will arise.
(E) The provisions of Section 272 TCA have where
applicable been properly implemented in the
accounts of the Company.
(viii) LIMITED PARTNERSHIPS
The provisions of Section 1013 TCA, do not apply to
any transaction entered into by the Company.
(ix) PAYMENT IN RESPECT OF PROFESSIONAL SERVICES
The Company has not, within the meaning of Sections
520 to 529 TCA, received payment in respect of
professional services from an accountable person.
(x) PAYMENTS TO SUBCONTRACTORS
The Company does not have any liability under
Sections 530 and 531 TCA.
41
(xi) DEALING IN OR DEVELOPING LAND
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 TCA.
(xii) CLOSE COMPANIES
The Company is not and never has been a close company
as defined in TCA and therefore the provisions of
Part 13 TCA do not apply to it.
(xiii) RELIEFS
(A) The Company has never claimed relief under
Part 14 TCA.
(B) The Company is carryon on a trade for the
purposes of the 12.5% rate of corporation
Taxation.
(xiv) OFFSHORE FUNDS
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 TCA.
(e) DIVIDENDS AND DISTRIBUTIONS
(i) DIVIDEND WITHHOLDING TAX
(A) In respect of all dividends paid on or after
6 April 1999, the Company has fully and
correctly complied with the provisions of
Chapter 8A of Part 6 TCA, and has deducted
and accounted for all appropriate dividend
withholding tax and has no outstanding
liability in respect of dividend withholding
tax.
(B) In respect of all dividends paid by the
Company on or after 6 April 1999 which were
exempt from dividend withholding tax, the
Company has received and retained a
declaration, in the form prescribed in
Schedule 2A to TCA from the recipients of
such dividends, evidencing that dividend
withholding tax was not payable.
(C) In respect of all dividends paid by the
Company on or after 6 April 1999 which were
exempt from dividend withholding tax under
Section 831(5) TCA the Company has complied
with the requirements of Section 172K TCA.
42
(ii) ADVANCE CORPORATION TAX ("ACT"):
The Company has no liability to ACT under Sections
159 to 172 TCA.
(iii) DISTRIBUTIONS
No securities (within the meaning of Section 135(8)
TCA) issued by the Company and remaining in issue at
the date of this Agreement were issued in such
circumstances that any interest or other distribution
out of assets in respect thereof falls to be treated
as a distribution under Section 130(2)(d) TCA, nor
has the Company agreed to issue securities (within
that meaning) in such circumstances.
(iv) TREATMENT OF DIVIDENDS ON CERTAIN PREFERENCE SHARES
Section 138 TCA, does not apply to any dividend paid
by the Company in respect of its preference shares.
(v) BUY BACK OF OWN SHARES
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; or
(D) issued any share capital or security as paid
up otherwise than by the receipt of new
consideration within the meaning of Part 6
TCA.
43
(f) CAPITAL GAINS TAX
(i) ROLLOVER RELIEF
The Company has not made any claim under Section 597
TCA, 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" or if
there have been Section 597 claims, full particulars
of each claim under Section 597 TCA 1997 have been
furnished prior to the date of this agreement.
(ii) RECONSTRUCTION/AMALGAMATION
The Company has not been a party to nor been 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 TCA, under which shares or debentures
have been issued or any transfer of assets effected.
(iii) GAINS ON DISPOSALS BY LIQUIDATORS AND OTHER PERSONS
The Company has no liability by virtue of the
provisions of Section 571 TCA.
(iv) UNREMITTABLE GAINS AND DEFERMENT OF LIABILITY
The Company has not made any claim under Section 1005
TCA, and no tax liability has been deferred under any
other provision TCA including Sections 981 and 563(1)
TCA.
(v) GAINS ON DEVELOPMENT LAND
The Company has not entered into any transaction to
which Section 648 to 653 TCA apply.
(vi) ASSETS LOST, DESTROYED OR OF NEGLIGIBLE VALUE
There have been no claims under Section 538 TCA.
(vii) SCHEMES TO CREATE CAPITAL GAINS TAX LOSSES
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 TCA.
44
(viii) TAXATION AND ACCOUNTING TREATMENT
Where the value of 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.
(ix) FIXED ASSETS
For the purposes of evaluating whether a Tax
Clearance Certificate pursuant to Section 980 TCA is
required, the value of the fixed assets shown in the
Accounts represents the value which would be derived
from such assets if sold by a willing buyer to a
willing seller on an arm's length basis.
(g) STAMP/CAPITAL DUTY
(i) CHARGE TO STAMP DUTY
The Company has duly complied with and has no
liability under Section 2 of the Stamp Duties
Consolidation Act, 1999 ("SDCA").
(ii) STAMPING OF INSTRUMENTS
All documents in the possession or under the control
of or which afford any right or rights to the Company
or required in connection with the title of the
Company to any matter or thing of the Company which
attract stamp duty and capital duty have been
properly stamped.
(iii) RELIEFS, EXEMPTIONS OR REDUCTIONS FROM STAMP/CAPITAL
DUTY
No relief, exemption or reduction has been obtained
from companies capital duty or stamp duty and without
prejudice to the generality of the foregoing no
relief, exemption or reduction has been obtained from
companies capital duty or stamp duty under Section
119 SDCA or from stamp duty under Section 79 or
Section 80 SDCA which:
(A) has become liable to forfeiture; or
(B) may be forfeited in the future.
(iv) PAYMENT OF STAMP DUTY AND CAPITAL DUTY
The Company has paid all capital duty, and interest,
fines and penalties thereon payable in accordance
with the provision of Section 116 of the SDCA,
whether or not the due date for payment has passed.
45
(h) VALUE ADDED TAX ("VAT") AND CUSTOMS AND EXCISE DUTY
(i) COMPLIANCE
(A) All customs duties, excise duties, common
agricultural policy charges, VAT and other
taxes, duties, charges or levies payable to
the Revenue Commissioners (or appropriate
fiscal or revenue authority) upon the
importation of goods or assets imported,
owned or used by the Company have been
properly accounted for and recorded and have
been paid in full prior to Completion.
(B) The Company is a registered and taxable
person for the purposes of the Value Added
Tax Act, 1972 ("VATA") 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, returns,
invoices and other documents (as the case
may be) appropriate or requisite for the
purposes thereof.
(C) The Company is not and has never been in
arrears with or in default in relation to
its payments or returns or notifications
under the VAT 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.
(D) The Company has not availed of the procedure
in Section 19(3)(aa) VATA whereby a trader
may account and make returns for VAT
purposes other than after each two monthly
taxable period.
(ii) REQUIREMENT TO GIVE SECURITY FOR VAT
The Company has not been required by appropriate
fiscal authorities to give security under VAT
legislation.
(iii) COMPUTATION OF THE PROFITS OF THE BUSINESS
There is no dispute or disagreement outstanding nor
is any contemplated at the date of this Agreement
with any revenue authority regarding the proper
treatment for VAT purposes of any supplies of goods
or services made (or treated as made) in the course
of the business of the Company and there are no
circumstances which make it likely that any such
dispute or agreement will commence.
(iv) GROUP REGISTRATION
Save as disclosed, no arrangement exists or has
existed whereby pursuant to Section 8(8) VATA and
Regulation 5 of the Value Added Tax Regulations 1979
(as amended) the business activities of the Company
are
46
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.
(v) FORFEITURE OF GOODS AND FRAUDULENT RETURNS
No goods transferred or to be transferred from the
Company are liable to forfeiture by virtue of Section
27(9), 27(9A) or 27(10) VATA.
(vi) EXEMPT SUPPLIES
The Company has not made and does not make any
supplies which are exempt for VAT purposes.
(vii) IMMOVABLE GOODS
(A) The Company has not applied to waive
exemption in relation to any immovable goods
in accordance with Section 7 VATA and
regulation 4 of the Value Added Tax
Regulations 1979.
(B) The Company does not engage in the letting
of immovable goods for periods of less than
ten years.
(viii) APPOINTMENT AS AGENT FOR NON-RESIDENTS
The Company has not at any time acted as an agent of
any person not established in Ireland within the
meaning of section 37 VATA 1972.
(ix) SELF-SUPPLY OF GOODS/SERVICES
The Company has not supplied any goods falling within
the meaning of Sections 3(1)(e) to Section 3(1)(f)
inclusive VATA nor supplied any services falling
within the meaning of Section 5(3) VATA at any time.
(i) CAPITAL ACQUISITIONS TAX ("CAT")
(i) CAT AS A CHARGE OVER ASSETS AND SHARES
There is no unsatisfied liability to CAT 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.
(ii) EFFECT OF AGREEMENT
The entering into this Agreement will not give rise
to a charge to CAT and 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
47
amount of such tax by sale or mortgage or by a
terminable charge on any of the Shares.
(iii) ARRANGEMENTS REDUCING VALUE OF COMPANY SHARES
The Company has not entered into nor taken any steps
the object of which is a transaction which comes
within Section 90 of the Finance Act, 1989.
(iv) RELIEFS
The shares in the capital of the Company have not
been the subject of a claim for relief in accordance
with paragraph 9 of Part I of the Second Schedule to
the Capital Acquisition Act, 1976 or Chapter 1 of
Part VI of the Finance Xxx 0000 in circumstances
where any of the conditions of the relevant relief
have been breached by a subsequent disposal of the
shares or otherwise.
(j) PAYE, SOCIAL WELFARE AND LEVIES
(i) COMPLIANCE
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 and Pay Related Social Insurance
deductions (both employer's and employees')
deductions (or their equivalent in any other
jurisdiction) and has made all payments to the
relevant authority in respect thereof and any other
levies and impositions due in respect of the
employees of the Company have been duly paid.
(ii) REGISTRATION PURSUANT TO SECTION 986 TCA
The Company is registered for the purposes of
regulations made under Section 986 TCA, 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.
(iii) PAYMENT
The Company is not in arrears with its payments or
returns required under regulations made under Section
986 TCA, nor 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.
48
(iv) RECORDS
The Company has complied in all respects with Part
II, Chapters 1,2,4,5 and 6 , Social Welfare
(Consolidation) Act, 1993 as amended, Health
Contributions Xxx, 0000, 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 213,
Social Welfare (Consolidation) Act, 1993 as amended,
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.
(v) REMITTANCE OF PAYE
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.
7. ASSETS
(a) TITLE, CONDITION AND SUFFICIENCY OF ASSETS
(i) All assets included in the Accounts or acquired by
the Company since the Last Accounting Date (other
than trading stock subsequently disposed of in the
ordinary and usual course of business) and all assets
used by the Company are:
(A) legally and beneficially owned by the
Company free from any Encumbrance; and
(B) where capable of possession, in the
possession or under the control of the
Company.
(ii) The vehicles and all other equipment, furniture and
fittings used in connection with the business of the
Company:
(A) is in good repair and condition, ordinary
wear and tear excepted; and
(B) is operating in accordance with all relevant
licences, regulations and permits governing
its use.
(iii) Maintenance contracts are in full force and effect in
respect of all assets of the Company.
49
(iv) The assets owned or leased by the Company and the
facilities and services to which the Company has a
contractual right comprise all the assets, facilities
and services reasonably necessary for the carrying on
of the business of the Company in the manner in which
it is presently conducted.
(b) HIRE PURCHASE AND LEASED ASSETS
Except in the ordinary course of business, the Company is not
a party to, nor has any material liability under, any lease or
hire, hire purchase, credit sale or conditional sale
agreement.
(c) STOCKS
The level of stocks of the Company is reasonable having regard
to current demand.
8. INTELLECTUAL PROPERTY, CONFIDENTIAL INFORMATION, KNOW-HOW AND
INFORMATION TECHNOLOGY
(a) INTELLECTUAL PROPERTY
(i) Each of the Intellectual Property Rights is:
(A) valid and enforceable and to the Seller's
knowledge nothing has been done or failed to
be done by which it has ceased to be valid
and enforceable;
(B) legally and beneficially owned by, and/or
validly granted to, the Company alone, free
from any licence, Encumbrance, restriction
on use, or disclosure obligation; and
(C) not, and to the Seller's knowledge will not
be, the subject of a claim or opposition
from a person (including, without
limitation, an employee or former employee
of the Company) as to title, validity,
enforceability, entitlement, or otherwise.
(ii) Schedule 5 contains details of the registered
Intellectual Property Rights (including, without
limitation, applications for registration) in respect
of which the Company is the registered owner, or
applicant for registration.
(iii) All of the registered Intellectual Property Rights in
respect of which the Company is the registered
proprietor are valid and subsisting, all renewal fees
in respect of such Intellectual Property Rights which
are due have been paid, and all other steps required
for the continued registration of such Intellectual
Property Rights have been taken, in any jurisdiction
in which they are registered.
50
(iv) To the Seller's knowledge nothing has been done or
failed to be done by which a person is or will be
able to seek cancellation, rectification or other
modification of a registration of any of the
Intellectual Property Rights.
(v) There are to the Seller's knowledge, as at the date
of this Agreement, no proceedings, actions or claims,
impugning the title, validity or enforceability of
any of the Intellectual Property Rights owned by the
Company, or claiming any right or interest in any of
the Intellectual Property Rights owned by the
Company. There are to the Seller's knowledge, as at
the date of this Agreement, no proceedings, actions
or claims, impugning the title, validity or
enforceability of any of the Intellectual Property
Rights owned by any third party, or claiming any
right or interest in any of the Intellectual Property
Rights owned by any third party.
(vi) The Company has not granted nor is it obliged to
grant a licence, sub-licence, assignment, or other
right, in respect of any of the Intellectual Property
Rights to any third party.
(vii) There is, and has been, to the Seller's knowledge no
infringement of any of the Intellectual Property
Rights.
(viii) The activities, processes, methods, products or
services used, manufactured, dealt in or supplied on
or before the date of this Agreement by the Company:
(A) are not at the date of this Agreement, nor
were they at the time used, manufactured,
dealt in or supplied, subject to the
licence, consent or permission of, or
payment to, another person;
(B) do not at the date of this Agreement, nor
did they to the Seller's knowledge at the
time used, manufactured, dealt in or
supplied, infringe the Intellectual Property
(including, without limitation, moral
rights) of another person; and
(C) have not given, and will not to the Seller's
knowledge give, rise to a claim against the
Company.
(ix) To the Seller's knowledge, no party to an agreement
relating to the use by the Company of Intellectual
Property owned by a third party is, or has at any
time been, in breach of the agreement.
(x) The Intellectual Property Rights comprise all the
Intellectual Property necessary for the Company to
operate the Business as it has been operated before
the date of this Agreement.
51
(xi) The Company is entitled to use all Confidential
Information owned by it, without restriction, in the
Business as presently carried on. The Company is
entitled to use all Confidential Information owned by
third parties and in its possession in the Business
without restriction, and the Company has not
disclosed any Confidential Information, or know-how
whether owned by the Company or any third party to
any third party, other than subject to written
confidentiality agreements and in accordance with its
obligations to any third party.
(xii) The Company does not use, nor operate its business
under, a name other than its corporate name.
(xiii) No moral rights have been asserted against the
Company which adversely affect the use of any of the
Intellectual Property in the business of the Company.
(b) INFORMATION TECHNOLOGY
(i) The Information Technology comprises all of the
information technology systems necessary for the
Company to operate the Business as it is being
operated at the date of this Agreement.
(ii) There are not and, in the two years prior to the date
of this Agreement there have not been, any failures
or breakdowns of any Information Technology used in
connection with the Business of the Company which
have caused either a disruption or interruption to
the Business of the Company.
(iii) The Company has in force maintenance contracts for
all material items of Information Technology which it
uses, all of which are valid and subsisting, are of a
duration of not less than 12 months after the
Completion Date, are sufficient for the purposes of
the Company as presently carried out, and will not be
affected by any change of control of the Company and,
in respect of which the Company is in compliance.
(iv) The Company is not in breach of any rights and/or
licences to which it is a party pursuant to which it
uses any Information Technology, all of which are
valid and subsisting, are of a duration of not less
than 12 months after the Completion Date, are
sufficient for the purposes of the Company to carry
on its Business as presently carried out, and will
not be affected by any change in control of the
Company.
(v) The Company has full and complete copies of all
source codes for all software which it owns and has
satisfactory arrangements in place for access
(including, but not limited to, use of) to the source
code of all software licensed to the Company, none of
which will be affected by any
52
change in control of the Company, is in full
compliance with the terms of all source code escrow
agreements.
(vi) The Company has in place documented policies and
procedures:
(A) to prevent unauthorised or malicious access
and\or use of the Information Technology,
whether internal or external to the Company;
(B) for taking and storing back-up, security,
and archival copies of all software and
data, which are stored off-site in a secure
environment.
(vii) None of the records, systems, data or information of
the Company is recorded, stored, maintained, operated
or otherwise wholly or partly dependent on or held or
to the Seller's knowledge accessible by any means
(including, without limitation, an electronic,
mechanical or photographic process computerised or
not) which are not under the exclusive ownership and
direct control of the Company.
(c) DATA PROTECTION
(i) The Company has obtained and maintained in force each
registration under the Data Protection Acts 1988 and
2003 (together the "Data Protection Acts") necessary
or appropriate in relation to the Business including,
without limitation, each registration relating to the
obtaining, holding, processing, transfer and
disclosure of personal data effected by the Company
(including, without limitation, to the Buyer).
(ii) The Company has in respect of personal data relating
to the Business at all times complied with the Data
Protection Principles contained in Section 2 of the
Data Protection Xxx 0000, as amended.
(d) ADVERTISING MATERIAL
All advertising and marketing materials used in connection
with the business of the Company comply with all legal
requirements applicable in the Territory and such materials
are not defamatory.
(e) EFFECT OF SALE
The execution or performance of this Agreement and all other
documents which are to be executed at Completion will not:
(i) conflict with or result in the breach of or
constitute a default under any of the terms,
conditions or other provisions of:
53
(A) any agreement licence or instrument to which
the Company is a party; or
(B) any provision of the Memorandum and Articles
of Association of the Company; or
(C) any Encumbrance, lease, contract, Order,
Judgment, award, injunction, regulation or
other restriction or obligation of any kind
or character by which or to which any assets
of the Company is bound or subject;
(ii) relieve any person from any obligation to the Company
(whether contractual or otherwise) or enable any
person to determine or avoid any such obligation or
any right or benefit enjoyed by the Company or enable
any person to exercise any right whether under an
agreement with or otherwise in respect of the
Company;
(iii) result in the creation, imposition, crystallisation
or enforcement of any security interest whatsoever on
any assets of the Company.
(f) BUSINESS DEALINGS
As a result of the acquisition of the Shares by the Buyer no:
(i) supplier of the Company will be entitled to cease or,
to the Seller's knowledge, will cease under the terms
of any material contract, agreement or arrangement,
supplying the Company, or to the Seller's knowledge
will substantially reduce its supply or modify its
terms of supply to the Company;
(ii) client or customer of the Company will be entitled to
cease or, to the Seller's knowledge, will cease under
the terms of any material contract, agreement or
arrangement, to deal with the Company, or to the
Seller's knowledge may substantially reduce its
existing level of business or alter the basis upon
which it does business with the Company;
(iii) benefit of any right or privilege which the Company
enjoys under any material contract, agreement or
arrangement will be lost; and
(iv) officer or senior employee of the Company will to the
Seller's knowledge leave the employ of the Company.
9. INSURANCE
(a) Copies of all current insurance and indemnity policies (the
"Policies") in respect of which the Company has an interest
have been provided to the Buyer, together with a list of such
Policies and all premiums due in respect of the Policies have
54
been fully paid and the next renewal dates for each of the
Policies is as set out in the Disclosure Letter.
(b) To the Seller's knowledge, there are no circumstances which
are likely to lead to any liability under such Policies being
avoided by insurers or the premiums increased and all of the
Policies are in full force and effect and are not void or
voidable and nothing has been done or omitted to be done by
the Company which would make any of the Policies void or
voidable.
(c) No claim is outstanding under any of the Policies and, to the
Seller's knowledge, no event has occurred, and no
circumstances exist, which gives rise, or are likely to give
rise, to any claim under any of the Policies.
(d) To the Seller's knowledge, nothing has been done or omitted to
be done by the Company which is likely to result in an
increase in premium under any of the Policies.
(e) The Company is now, and has since incorporation been,
adequately covered against accident, damage, injury, public
liability, third party loss (including product liability),
loss of profits and other risks normally covered by insurance
and the Properties and all other assets of an insurable nature
of the Company are insured with a reputable insurance office
or underwriters in amounts representing their full
reinstatement or replacement value against fire and other
risks normally insured against by persons carrying on business
similar to that of the Company.
(f) Except as disclosed, all claims made by the Company under its
past and present insurance policies have been settled in full
by the relevant insurers.
10. PROPERTY
(a) DESCRIPTION
The Property set out in the Property Schedule comprises all
the land and buildings occupied and/or used by the Company or
otherwise used in connection with the Business of the Company.
(b) USE OF PROPERTY
(i) All necessary permissions, consents and licences
relating to the Property, its current use and the
conduct of the Company's Business therefrom have been
obtained and any attached conditions have been
satisfied.
(ii) The Property is not subject to any matters which
might adversely affect, in any material respect, the
proper use, occupation or enjoyment thereof for the
purpose for which it is used as at the date of this
Agreement.
55
(c) ACCESS & SERVICES
(i) The Property is directly served by and/or has the
benefit of all means of access, rights, easements,
services and other facilities necessary for its use
as at the date of this Agreement;
(ii) To the Seller's knowledge, there are no proposed
schemes or orders affecting any road or highway
giving access to the Property or any right, easement,
service or facility necessary for its current use and
enjoyment and there are no circumstances likely to
lead to any such proposal, scheme or order which
would adversely affect the use or enjoyment of the
Property;
(iii) There are no rights, easements, licences or informal
arrangements public or private, enjoyed or being
acquired by or against the Property and none have
been proposed or granted or are necessary to permit
the owner or occupier of any adjoining land to come
on to the Property or to permit the Company to go
into any adjoining property whether for the purposes
of access, parking, fire escape, repair, maintenance,
re-development or otherwise; and
(iv) To the Seller's knowledge, no person is entitled to
or has threatened to terminate, curtail, restrict or
interrupt any right, easement, service or facility
appurtenant to the Property.
(d) FORMER PROPERTY
The Company does not have any outstanding obligations (whether
existing or contingent) in respect of any properties formerly
owned or occupied or used by it or in respect of which it had
an interest or acted as Surety.
(e) LEASEHOLD PROPERTY
(i) the leases provided and referred to in the Property
Schedule constitute the entire agreement relating to
occupation by the Company of the Property and there
are no other agreements or arrangements (written or
unwritten) relating to the occupation by the Company
of the Property;
(ii) where the rent reserved by any lease is subject to
review, all rent review notices have been served
within the requisite time limits, no review is
pending and there are no disputes outstanding as to
the settlement of the level of rent;
(iii) where the Property is insured by the landlord thereof
the Company is a joint insured with the landlord on
all relevant policies of insurance in respect of the
Property occupied by it or the interest of the
Company has
56
been noted on the relevant policy or policies of
insurance and the insurers have waived subrogation
rights against the Company;
(iv) where services are to be performed by the landlord or
superior landlord such services have been duly and
effectively performed throughout the Company's
occupation of the Property.
(f) CONDITION
The buildings and other structures on the Property are in good
and substantial repair, reasonable wear and tear excepted.
(g) COVENANTS
All covenants, restrictions, obligations, conditions,
agreements or other matters to which the Property is subject
have been complied with, the Company has not received any
notice of any outstanding or alleged breach or failure to
comply therewith and there are no circumstances within the
Seller's control which may lead to any such notice being
served.
(h) STATUTORY NOTICES
The Company has not received any notice that the Property is
or may be affected by any of the following matters:
(i) any closing, demolition or clearance order;
(ii) any enforcement notice which has not been complied
with;
(iii) any compensation received consequent upon a refusal
of any planning consent or the imposing of any
restrictions on any planning consent;
(iv) any order or proposal of which notice has been given
to Company for the compulsory acquisition or
requisition of the whole or any part thereof or
modification of any planning permission or the
discontinuance of any use or the removal of any
building;
(v) any provision in any development plan or proposal in
any draft development plan restricting, regulating or
adversely affecting the use or development of it or
any part of it;
and the Seller knows of no reason why the Property should
become so affected.
(i) LEGISLATIVE MATTERS
The Company has complied in all material respects with all
applicable laws (including common law) and with all applicable
bye-laws, statutes, regulations,
57
orders, instruments, decrees, notices, certificates and
judgements of any government, local government, executive,
administrative, judicial or regulatory authority or agency in
relation to or affecting the Property.
(j) With respect to any leases to which the Property is subject:
(i) the Seller and/or the Company have provided the Buyer
with particulars of any notices or other matters
which may affect them and/or the occupation or use of
the Property; and
(ii) the Company has fully performed and observed all of
the covenants and conditions imposed by the landlord
and there are no notices relating to them nor are
there any outstanding reviews, matters or proceedings
pending or which are anticipated but have yet to be
commenced or concluded.
(k) OUTSTANDING CONTRACTS
The Company has not entered into any agreement to dispose of
the Property or any part thereof or any interest therein or
right thereover or to acquire any other property or interest
therein or right thereover which has not been completed.
11. AGREEMENTS
(a) ALL AGREEMENTS
All material written contracts and agreements of the Company
relating to the Business are valid and enforceable. Complete
and accurate copies of these contracts and agreements are
annexed to the Disclosure Letter together with any variations
thereto and the Seller is not aware of any material oral
contracts or arrangements of the Company relating to the
Business.
(b) VALIDITY OF AGREEMENTS
No party with whom the Company has entered into any agreement
or arrangement has given any notice to the Company of its
intention to terminate, or, to the Seller's knowledge, has
otherwise sought to repudiate or disclaim, the agreement or
arrangement.
(c) NO BREACH
To the Seller's knowledge, neither the Company nor any party
with whom the Company has entered into any agreement or
arrangement is in material breach under any agreement or
arrangement. To the Seller's knowledge, no matter exists which
might give rise to a breach of this type.
58
(d) MATERIAL AGREEMENTS
The Company is not a party to nor has any liability under any
long term, onerous or unusual agreement, arrangement or
obligation, including:
(i) Any agreement, arrangement or obligation which was
entered into otherwise than in the ordinary and usual
course of its business;
(ii) Any agreement, arrangement or obligation which was
entered into otherwise than by way of a bargain at
arm's length;
(iii) 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;
(iv) 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;
(v) Any contract of purchase or sale of any properties or
any other property purchased or sold by the Company
in the five years preceding the Completion Date;
(vi) Any guarantee, comfort letter, lease back
obligations, underwriting obligation or indemnity
given by the Company (other than guarantees given in
the normal course of trading);
(vii) 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 EUR10,000;
(viii) Any agreement or arrangement under which any person
has authority to pledge the credit of the Company;
(ix) 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;
(x) Any loan capital or other indebtedness of the Company
which will become repayable or any security given by
the Company which will or may
59
become enforceable by reason of the acquisition by
the Buyer of the Shares;
(xi) Any obligation on the part of the Company to pay any
royalty or other similar periodic sums in the nature
of royalties;
(xii) Any mortgage, charge, lien, encumbrance, debenture or
other security interest; or
(xiii) Any power of attorney given by the Company.
(e) The Company is not a party to any agency, distribution,
marketing, purchasing, service, licensing or management
agreement or arrangement or is a party to any other agreement
which cannot be terminated by the Company on less than three
months' notice without payment of compensation.
(f) To the Seller's knowledge, there has been no material breach
of any warranty, term or condition made by or on behalf of the
Company or for which the Company may be liable.
(g) AGENCY AGREEMENTS, JOINT VENTURES ETC.
The Company is not a party to nor has any liability under:
(i) any agreement or arrangement whereby the Company is a
member of a joint venture, consortium, partnership or
incorporated or unincorporated association (other
than bona fide trade associations); or
(ii) 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.
(h) GUARANTEES ETC.
Save as disclosed in the Accounts, there is not outstanding in
respect of the Company or any director or shadow director of
the Company or any person Connected with any of them any
guarantee, indemnity or suretyship given by or for the benefit
of the Company or any director or shadow director of the
Company or any person Connected with any of them.
(i) LOANS ETC.
With the exception of the loans, quasi-loans, credit
transactions, debts and securities particulars of which are
contained in the Disclosure Letter, all of which have been
entered into in compliance with all legal and statutory
requirements and conditions, there are:
60
(i) no credit transactions outside the ordinary course of
business or loans or quasi-loans or made by the
Company to the Seller or any director or shadow
director of the Company or any person Connected with
any of them;
(ii) no debts owing to any of the Company by the Seller or
any director or shadow director of the Company or any
person Connected with any of them;
(iii) no debts owing by the Company other than debts which
have arisen in the ordinary course of business; and
(iv) no securities for any such loans or debts as
aforesaid.
(j) CONTRACTS WITH SELLER OR DIRECTORS ETC.
With the exception of the contracts and arrangements
particulars of which are contained in the Disclosure Letter,
there are no existing contracts or arrangements to which the
Company is a party and in which the Seller or any director or
shadow director of the Company or any person Connected with
any of them is interested, whether directly or indirectly.
(k) 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 of them, or in any
company in which the Company is interested, or any person
Connected with any such person, relating to the management of
any of the Company's business, 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.
(l) WARRANTIES AND INDEMNITIES
Except in the ordinary course of business, the Company has not
at any time prior to Completion sold or otherwise disposed of
any shares or assets in circumstances such that it is, or may
be, still subject to any liability (whether contingent or
otherwise) under any representation, warranty or indemnity
given or agreed to be given on or in connection with such
sales or disposal or, in the case of any acquisition by the
Company of any shares or assets, made or omitted or failed to
make or fully prosecute any claim capable of being made under
any representation, warranty or indemnities given or agreed to
be given on or in connection with such acquisitions.
61
12. TERMS OF TRADE AND BUSINESS
(a) CREDITORS
The Company has paid its trade creditors in the normal course.
No debt owing by the Company has been due for more than 3
months unless it has been fully reserved for in the Accounts.
(b) DEBTORS
No debt shown in the Accounts or the accounting records of the
Company is overdue by more than 3 months unless it has been
fully reserved for in the Accounts.
(c) SUPPLIERS AND CUSTOMERS
Neither during the financial period of the Company ended on
the Last Accounting Date nor during the period commencing on
the Last Accounting Date and ending on the date of this
Agreement has any person (either individually or jointly with
any other person) purchased from or sold to the Company more
than five per cent. of the aggregate amount of all purchases
or sales made by the Company during these periods.
(d) LICENCES, AUTHORISATIONS AND CONSENTS
(i) The Company has obtained all licences, authorisations
and consents reasonably required for the proper
carrying on of its business and all licences,
authorisations and consents (short particulars of
which are set out in the Disclosure Letter) are valid
and subsisting.
(ii) The Company is not in material breach of any such
licences, authorisations or consents and, to the
Seller's knowledge, no circumstances exist which may
result in any of them being revoked or not renewed,
in whole or in part.
13. EMPLOYEES
(a) GENERAL
(i) There are in existence service agreements or
employment contracts with all officers and employees
of the Company. No consultancy, independent
contractor or service provider agreements or
arrangements exist between the Company and any third
party.
(ii) 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
62
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 to the
Seller's knowledge 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 Buyer.
(iii) No offers of employment have been made to employees
who have accepted but not yet started employment.
(iv) Full particulars are contained in the Disclosure
Letter of:
(A) the total number of employees (including
officers, part time employees and agency
employees) of the Company including those
who are on maternity or other protective
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
(B) the names of all employees (including
officers, 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,
temporary employees, full-time employees,
part-time employees and employees on fixed
term contracts and having the following
headings and setting out the relevant
details on each such employee under such
headings:
(I) employee names and addresses;
(II) salaries/wages and other benefits
of any kind;
(III) dates of birth/age;
(IV) dates of commencement of
employment;
(V) number of years continuous
employment (including previous
employment where relevant);
(VI) participation in benefit schemes
(e.g. VHI/BUPA, permanent health
insurance, life assurance, pension
scheme, share and share option
schemes and profit sharing);
(VII) notice entitlements;
(VIII) grades/positions;
63
(IX) holiday entitlement;
(X) sick pay schemes;
(XI) bonus, commission, or incentive
schemes;
(XII) company cars, car allowances;
(XIII) any customs and practices for the
time being between the Company and
any trade union and any agreements
or arrangements, whether binding or
otherwise, for the payment of
compensation on termination of
employment including, in
particular, redundancy entitlement
and early retirement terms; and
(XIV) where any employee is continuously
absent from work for a period in
excess of one month, the reason for
the absence.
(v) The basis of the remuneration payable to the officers
or employees of the Company is the same as that in
force at the Last Accounting Date and the Company is
not obliged to increase nor has made any provision to
increase the aggregate annual remuneration payable to
the officers and employees by more than five per
cent.
(vi) There are no amounts owing to any present or former
officers or employees of the Company other than
remuneration accrued to date or for disbursement of
business expenses.
(vii) To the Seller's knowledge 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 service or previous employment
or service (as the case may be).
(viii) The Company has maintained current and adequate
records regarding the service of each of its current
and former officers and employees including, without
limitation, details of terms of employment, holidays,
working hours and rest breaks, payment of sick pay,
statutory maternity pay, disciplinary and health and
safety matters, income tax and social security
contribution and termination of employment.
(ix) No current or former officer or employee of the
Company has given or received notice terminating his
or her employment.
(x) No employee or officer of the Company is assigned or
employed wholly or mainly outside of Ireland.
64
(xi) No employee or former employee of the Company is
currently on maternity leave, paternity leave,
parental leave, adoptive leave, carer's leave, study
leave or other approved absence (other than holiday
leave) or has a right to return to work pursuant to
the Maternity Protection Act, 1994, the Adoptive
Leave Act, 1995, the Parental Leave Act, 1998 or the
Carer's Leave Act, 2001, and no employee of the
Company is on long term absence from work due to ill
health.
(xii) On or prior to completion:
(A) all pay related social insurance
contributions (both employer's and
employees') due and payable at Completion by
the Company will have been duly paid;
(B) 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;
(C) to the Seller's knowledge all certificates
relating to matters referred to in this
paragraph which by law are required to be
given by employers to employees have been
given to all employees of the Company and
are true and accurate in all material
respects.
(xiii) 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, incentive payment, 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.
(xiv) Every employee or former employee of the Company who
should have been treated as employed for tax purposes
has been so treated.
(xv) The Company has not incurred any liability:
(A) for breach or termination of or variation of
any service agreement with any of its
officers or employees or former officers or
employees including, without limitation,
redundancy payments, 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 or former officer or
employee; and
(B) for breach or termination of any consultancy
agreement.
(xvi) There are no written agreements or arrangements, and
to the Seller's knowledge there are no unwritten
agreements or arrangements, between
65
the Company and any of its employees or former
employees with respect to past and/or current
redundancy payments;
(xvii) The Company does not have in existence nor is it
proposing to introduce a sick pay scheme;
(xviii) The Company has not agreed to make any payment to its
employees on maternity or other protective leave;
(xix) The Company does not pay nor is it proposing to
introduce payment of commission to any of its
employees;
(xx) No employee is in receipt of or entitled to more than
20 days holidays per calendar year;
(xxi) Save as disclosed in the Disclosure Letter, there is
no agreement or arrangement between the Company and
any of its employees with respect to payment by any
of the Company of any of its employee's medical
insurance/VHI/BUPA.
(xxii) Save as disclosed in the Disclosure Letter, there is
no agreement or arrangement between the Company and
any of its employees or officers with respect to
payment by the Company of a car allowance or
provision of a car to any of its employees or
officers;
(xxiii) To the Seller's knowledge the Company is not liable
to make payment to any person pursuant to the
Employment Equality Act, 1977 the Anti-Discrimination
(Pay) Act, 1974 or the Employment Equality Act, 1998.
(b) PAYMENTS ON TERMINATION
Except as disclosed in the Accounts:
(i) no liability has been incurred by the Company for
breach or termination of any service agreement or
employment contract with any of its employees or
former 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 or former employee;
(ii) no liability has been incurred by the Company for
breach or termination of any consultancy agreement or
other contract for services; and
(iii) the Company has not made nor agreed to make or
promised any payment or provided or agreed to provide
any material benefit or gratuitous payment to any
current or former officer or employee of the Company
or any dependent of any current or former officer or
employee in connection
66
with the actual or proposed termination or suspension
of employment or variation of any service agreement
of any present or former director or employee.
(c) NON-ALLOWABLE PAYMENTS
The Company has not made nor agreed to make any payment to or
provided or agreed to provide any benefit for any current or
former officer or employee which is not allowable as a
deduction for the purposes of taxation.
(d) LIABILITIES FOR EMPLOYEES
The Company is not liable to pay any industrial training levy
nor has 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 current or former
officers or employees by it.
(e) CLAIMS BY EMPLOYEES
There are no claims in existence, pending or threatened
against the Company:
(i) by a current or former employee or third party, in
respect of any accident or injury which is not fully
covered by insurance;
(ii) by a current or former officer or employee in
relation to his terms and conditions of employment or
appointment; or
(iii) by a current or former employee for unfair dismissal,
notice, redundancy, wrongful dismissal or breach of
contract;
nor to the Seller's knowledge is the Company aware of any
circumstances which could reasonably give rise to such a
claim.
(f) INDUSTRIAL DISPUTES AND NEGOTIATIONS
The Company is not involved in any dispute or negotiation
regarding a claim of material importance with any trade unions
or association of trade unions or organisation or body of
employees, and the Company is not aware of any facts or
circumstances that exist which might reasonably 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.
(g) REDUNDANCIES AND TRANSFER OF BUSINESS
Within the period of one year ending on the date of this
Agreement, the Company has not:
67
(i) given notice of any redundancies to its employees
and/or the Minister for Enterprise, Trade and
Employment or started consultations in respect of
redundancies with any trade union or directly with
employees and/or their representatives whether
pursuant to the Protection of Employment Act, 1977
and 2000 or Regulation 7 of the European Communities
(Safeguarding of Employees' Rights on Transfer of
Undertakings) Regulations 1980 and 2003 or otherwise;
nor
(ii) been a party to any relevant transfer within the
scope of the European Communities (Safeguarding of
Employees' Rights on Transfer of Undertakings)
Regulations, 1980 and 2000 nor has the Company failed
to comply with any duty to inform and consult any
trade union under those Regulations.
(h) TRADE UNIONS
Full and complete details of all recognised trade unions and
all collective bargaining or procedural or other agreements or
arrangements in existence 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 Disclosure Letter.
(i) INCENTIVE SCHEMES
The Company does not have in existence nor is it proposing to
introduce any share incentive, share option, profit sharing,
bonus or other incentive scheme for any of its officers or
employees.
(j) TRAINING
There is no training scheme, arrangement or proposal in
existence at the date of this Agreement in relation to the
Company.
14. LIABILITIES
(a) INDEBTEDNESS
Except as disclosed in the Accounts or in the Disclosure
Letter, the Company does not have 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.
(b) GUARANTEES AND INDEMNITIES
(i) The Company is not a party to nor has any material
liability (including, without limitation, any
contingent liability) under any guarantee,
68
indemnity, bond, facility or other agreement to
secure, or otherwise incur financial or other
obligations with respect to, an obligation of a third
party.
(ii) 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, a third party (including
another Company).
(c) EVENTS OF DEFAULT
No event has occurred or been alleged which:
(i) constitutes an event of default, 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 indemnity, or which would lead to any
other obligation of the Company, becoming
enforceable;
(ii) 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
(iii) 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.
(d) GRANTS
(i) 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.
(ii) Full particulars of all agreements, claims, leases
and other arrangements between the Company and any
other grant body are set out in the Disclosure
Letter.
(e) BORROWINGS
(i) Full and accurate details of all loan, overdraft and
other financial facilities available to the Company
are set out in the Disclosure Letter and neither the
Seller nor the Company have done anything to
prejudice them.
(ii) The total amount borrowed by the Company from each of
its bankers does not exceed its respective overdraft
facility limits.
69
(iii) The total amount borrowed by the Company does not
exceed any limitation on the Company's borrowing
powers contained in its Articles of Association or in
any debenture or other deed or document or agreement
binding it.
(iv) The Company has no outstanding (nor has it agreed to
create or issue) any loan capital nor has it factored
any of its debts or engaged in financing of a type
which would not require to be shown or reflected in
the Accounts nor borrowed any money which it has not
repaid save for borrowings not exceeding the amounts
shown in the Accounts.
(v) The Company has not since the Last Accounting Date
repaid or become liable to repay any loan or
indebtedness in advance of its stated date of
maturity.
(f) LOAN FACILITIES
The Company will not at Completion have any outstanding
liability or obligation under any debentures, acceptance
credits, overdrafts, loan or other financial facilities
outstanding or available to the Company prior to Completion.
(g) BANK ACCOUNTS
The Company does not have any bank accounts save as disclosed
in the Disclosure Letter.
15. INSOLVENCY
(a) 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.
(b) NO RECEIVER
No receiver has been appointed by any person over the whole or
any part of the business or assets of the Company.
(c) NOT INSOLVENT
The Company is not insolvent nor unable to pay its debts.
(d) PAYMENT OF DEBTS
The Company has not stopped paying its debts as they fall due.
70
(e) NO DISTRESS ETC.
No distress, execution, sequestration or other process has
been levied in respect of any of the assets of the Company.
(f) COMPOSITION OR SCHEMES ETC.
No composition in satisfaction of the debts 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.
(g) CRYSTALLISATION OF CHARGES
There are no fixed or floating charges outstanding or
registered against the Company or any of its assets.
(h) 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, retention of title agreement or otherwise belonging
to a third party, to the Seller's knowledge 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.
(i) NOTICES RECEIVED
No notices from the Revenue Commissioners under section 1001
of the TCA, nor any notices in a relevant jurisdiction of a
similar or analogous effect, have been received by any
director of the Company.
(j) STATUTORY DEMAND
No 21-day notices or other statutory demand whether under
section 214 of the 1963 Act or otherwise has been received by
the Company in any relevant jurisdiction.
16. COMPETITION
(a) 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 Trade, Enterprise and Employment, the
Competition Authority and/or European
71
Commission under the Mergers, Takeovers and Monopolies
(Control) Act, 1978 (as amended), the Competition Act, 1991
(as amended) and/or Articles 81 or 82 of the Treaty of Rome
(or any regulations or directive made thereunder).
(b) UNDERTAKINGS AND ORDERS
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.
(c) INVESTIGATIONS
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 competition or
governmental authority of Ireland or any other country,
relating to any aspect of the business of the Company, nor to
the Seller's knowledge has any agreement, arrangement or
conduct (whether by omission or otherwise) of the Company been
the subject of an investigation, report or decision by any of
the previously named people or bodies.
(d) IRISH COMPETITION LAW
(i) The Company is not nor has been a party to, or
engaged in, any agreement, arrangement, decision,
concerted practice or activity which was prohibited
by section 4(1) of the Xxxxxxxxxxx Xxx, 0000, or
which is prohibited by section 4(1) of the
Xxxxxxxxxxx Xxx, 0000.
(ii) The Company has not made any notification to the
Competition Authority requesting a licence pursuant
to section 4(2) of the Xxxxxxxxxxx Xxx, 0000 or a
certificate pursuant to section 4(4) of the
Xxxxxxxxxxx Xxx, 0000.
(iii) The Company has not committed, contrary to section 5
of the Xxxxxxxxxxx Xxx, 0000, or section 5 of the
Xxxxxxxxxxx Xxx, 0000, any abuse, either alone or
jointly with any other undertaking, of a dominant
position within the State or a substantial part of
the State.
(iv) An authorised officer appointed pursuant to section
20 of the Xxxxxxxxxxx Xxx, 0000 or pursuant to
section 45 of the Xxxxxxxxxxx Xxx, 0000 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
72
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.
(v) No petition has been presented by a person pursuant
to section 6(1) of the Xxxxxxxxxxx Xxx, 0000 or
pursuant to section 14 of the Xxxxxxxxxxx Xxx, 0000
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.
(vi) No petition has been presented by the Minister
pursuant to section 6(4) of the Xxxxxxxxxxx Xxx, 0000
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.
(vii) No proceedings have been issued to the company,
director, manager or other officer or employee of the
Company pursuant to section 8 of the Xxxxxxxxxxx Xxx,
0000 in relation to any agreement, decision or action
in which the Company or any director, manager or
other officer or employee of the Company is or has
been involved and no director, manager or other
officer or employee of the Company has been convicted
of an offence under section 8.
(viii) No investigation has been carried out by the
Competition Authority pursuant to section 14 of the
Xxxxxxxxxxx Xxx, 0000 as to whether, in the opinion
of the Authority, the Company is in a dominant
position and, 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,
1991 either (a) prohibiting the continuance of a
dominant position enjoyed by the Company except on
conditions specified in the order or (b) requiring
the adjustment of the dominant position.
(ix) The Competition Authority has not pursuant to its
powers under section 7 of the Schedule to the
Xxxxxxxxxxx Xxx, 0000 or pursuant to its powers under
section 31 of the Xxxxxxxxxxx Xxx, 0000, done any of
the following in relation to any officer or employee
of the Company:
(A) summoned one or more of them as a witness to
attending before the Authority;
(B) examined on oath any such person or persons
summonsed to attend before the Authority;
73
(C) required any such person or persons
summonsed to appear as a witness before the
Authority to produce to the Authority any
document in the power or control of any such
person or persons.
(e) MERGERS CONTROL
(i) Save in respect of the present transaction no order
has been made under the Mergers Act which directly or
indirectly affects the business of the Company.
(ii) 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.
(iii) 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.
(iv) 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.
(v) Since 3rd July, 1978 the Company has not been a party
to any transaction notifiable pursuant to section 5
of the Mergers Act.
(vi) Since 1st January, 2003, in relation to every merger
or acquisition in which the Company was involved
prior to the date of this Agreement and to which the
Xxxxxxxxxxx Xxx, 0000 required a notification, or a
notification has been made, the Competition Authority
has determined that the merger or acquisition could
be put into effect and any such merger or acquisition
has been put into effect within one year of that
determination.
(vii) Since 1st January, 2003, in relation to every merger
or acquisition which the Company was involved, the
Competition Authority has not carried out a full
investigation under Section 22 of the Xxxxxxxxxxx
Xxx, 0000.
(viii) Since 1st January, 2003, in relation to every merger
or acquisition in which the Company was involved, the
Competition Authority has not determined that the
merger or acquisition could be put into effect only
subject to conditions specified by it.
74
(ix) Since 1st January, 2003, in relation to every merger
or acquisition in which the Company was involved, the
Company has not offered proposals to the Competition
Authority under Section 20(3) which have become
binding commitments on the Company.
(f) CONCENTRATIONS WITH A COMMUNITY DIMENSION
The Company is not nor has 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 21st December 1989 on the control of concentrations
between undertakings (the "MERGER CONTROL REGULATION") and the
Company is not nor has 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.
(g) STATE AID
The Company has never received, nor is the Company proposing
to receive, any aid (as that term is understood for the
purposes of Articles 87 to 89 of the Treaty of Rome) from a
Member State of the European community or from State
resources.
17. PENSIONS AND OTHER BENEFITS
(a) For the purposes of the Warranties in paragraph 16, "APPROVED"
means exempt approved by the Revenue Commissioners for the
purposes of Section 774 of TCA and reference to "APPROVAL"
shall be construed accordingly;
(b) There are not in operation, and no proposal has been announced
to enter into or establish, any agreement, arrangement, custom
or practice (whether legally enforceable or not or whether or
not Approved) for the payment of, or payment of any
contributions towards, any pensions, allowances, lump sum or
other like benefits or retirement, death, termination of
employment (whether voluntary or not) or during periods of
sickness or disablement, for the benefit of any employee or
officer or former employee or officer of the Company or for
the benefit of the dependants of any of them.
(c) The Company has no obligation in respect of any past or
present employee or officer or any dependant or beneficiary or
any of them other than under the documents referred to in the
Disclosure Letter which documents contain full and accurate
details of all benefits payable by the Company.
75
18. LITIGATION AND COMPLIANCE WITH LAW
(a) LITIGATION
(i) Neither the Company nor any person for whose acts or
defaults the Company is vicariously liable is
involved, or has at any time been involved, in any
civil, criminal, arbitration or other proceedings and
no civil, criminal, arbitration or other proceedings
are pending, or to the Seller's knowledge threatened,
by or against the Company or any person for whose
acts or defaults the Company may be vicariously
liable.
(ii) To the Seller's knowledge, no fact or circumstance
exists which is likely to give rise to any civil,
criminal, arbitration or other proceedings involving
the Company or any person for whose acts or defaults
the Company is vicariously liable.
(iii) There is no outstanding judgment, order, decree,
arbitral award or decision of any court, tribunal,
arbitrator or governmental agency against the Company
or any person for whose acts or defaults the Company
is vicariously liable.
(b) COMPLIANCE WITH LAW
The Company has conducted its business in all material
respects in accordance with all applicable legal requirements
in Ireland and elsewhere.
(c) INVESTIGATIONS
Neither the Seller nor the Company has received any notice of
any governmental or other investigations or enquiries or
disciplinary proceedings concerning the Company, and to the
Seller's knowledge is aware none are pending or threatened.
(d) DIRECTORS AND OTHER OFFICERS
(i) 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 2003.
(ii) 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.
76
(iii) 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 0000 Xxx) of
the Company.
(e) GENERAL
(i) 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 of the world) in
connection with the business of the Company and the
same were and are complete true and accurate in all
material respects.
(ii) 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 Buyer and in
respect of all such negotiations, investigations and
enquiries full and xxxxx 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.
19. CONSTITUTION, REGISTERS AND RETURNS
(a) CONSTITUTION
The Company has at all times carried on its business and
affairs in all material respects in accordance with its
memorandum and articles of association or other relevant
organisational and governance document for the time being and
the copy of the memorandum and articles of association or
other relevant organisational and governance document of the
Company delivered by the Seller to the Buyer is true and
complete and, in the case of such memorandum and articles of
association, has embodied therein or annexed thereto a copy of
every such resolution as is referred to in sections 143(2) of
the Companies Act, 1963.
(b) REGISTERS, MINUTE BOOKS AND STATUTORY BOOKS
All registers, minute books and other statutory books required
to be kept by the Company pursuant to the Companies Acts, 1963
to 2001 have been properly kept, contain a true, complete and
accurate record of the matters with which they
77
should deal and no notice or allegation has been received that
any of them is incorrect or should be rectified.
(c) OTHER RECORDS
(i) The Company has maintained proper records of its
activities including all requisite books of account
(reflecting in accordance with generally accepted
accounting principles 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 material
respects and these and all other deeds and documents
(properly stamped where necessary) belonging to the
Company and its seals are and at Completion will be
in the possession of the Company.
(ii) The Company has not nor will, pending Completion,
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.
(iii) 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.
(d) RETURNS
All returns, particulars, resolutions and other documents
required to be delivered by the Company to the Companies
Registration Office including, without limitation, in respect
of all charges granted by the Company, relevant companies
registers or any governmental authority have been in all
material aspects properly and correctly prepared and so
delivered.
(e) POWERS OF ATTORNEY AND AUTHORITIES
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).
(f) COMPLIANCE WITH 1990 ACT
The Company has not;
78
(i) has had its affairs investigated pursuant to section
7, 8 or 9 of the 1990 Act, nor has there been any
investigation of the ownership of the shares of any
of the Company pursuant to section 14 or request
pursuant to section 15 of the 1990 Act, nor has there
been a direction made under section 16 of the 1990
Act nor an investigation pursuant to section 66 of
the 1990 Act;
(ii) has entered into any arrangement in breach of section
28 or 29 of the 1990 Act;
(iii) has 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;
(iv) 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;
(v) had a notice served on it by its auditors pursuant to
section 185 or 194 of the 1990 Act;
(vi) been struck off and subsequently restored to the
register pursuant to section 311A of the 1963 Act;
(vii) entered into any transaction or arrangement
particulars whereof would, pursuant to section 41 of
the 1990 Act, require to be contained in the
accounts; or
(viii) purchased or redeemed its own shares or those of its
holding company or created treasury shares pursuant
to part XI of the 0000 Xxx.
(g) COMPLIANCE WITH 1999 NO. 2 ACT
(i) Part III of the 1999 No. 2 Act does not apply to the
Company.
(ii) The Company has at least one director who is resident
in the State or has complied with the provisions of
section 43 and 44 of the 1999 No. 2 Act.
(iii) No director of the Company is a director of more than
25 companies.
(iv) The Company has not received a registered letter from
the registrar of companies requiring the submission
of all outstanding annual returns.
79
(v) The Company has not had a notice relating to it
pursuant to Section 46 of the 1999 No. 2 Act
published in Iris Oifigiuil with a view to striking
the name of the Company off the register and
dissolving the Company.
(h) COMPLIANCE WITH 2001 ACT
(i) All directors and the company secretaries of the
Company have complied in all respects with the
provisions of Xxxxxxx 000 xx xxx 0000 Xxx.
(xx) All annual reports of the directors of the Company
include a statement of measures taken by the
directors to secure compliance with the requirement
for the keeping of proper books and accounts and the
location of those books.
(iii) The Company has not had a period of more than nine
months between the year end and the date of the
annual return for that company.
(iv) The Company and its officers have carried on its
business in accordance with the 2001 Act and to the
Seller's knowledge there are no circumstances which
might given rise to any notice, enquiry,
investigation or proceedings by the Office of the
Director of Corporate Enforcement against the Company
or its officers and no such action has been taken
against the Company or its officers to date.
20. 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.
21. GENERAL
(a) No sums are owing by the Company to its auditors, solicitors
or other professional advisers except in the ordinary course
of business.
(b) There are no loans owing to the Company by any of its
directors.
(c) 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 which would breach any applicable law or
regulatory requirements.
(d) Except as disclosed in the Disclosure Letter the Company is
not a member of any trade association and in respect of any
trade associations which have been disclosed has complied with
all its obligations as a member thereof and all codes of
practice promulgated by such association.
80
SCHEDULE 3A
BUYER'S WARRANTIES
1. POWER AND AUTHORITY
The Buyer has the legal right and full power and authority to execute
and deliver, and to exercise its rights and perform its obligations
under this Agreement and all the documents which are to be executed at
Completion.
2. BINDING AGREEMENTS
This Agreement constitutes, and the documents which are to be executed
at Completion when executed will constitute, valid and binding
agreements of the Buyer enforceable in accordance with their respective
terms.
82
SCHEDULE 4
PROPERTY
1. ALL THAT AND THOSE Unit Number 0 Xxx Xxxxx, Xxxxxxx Xxxxxxxx Xxxx, Xxxx
Xxxx, Xx. Xxxxxx held under a lease dated 8th November, 2000 by and
between Xxxxx Xxxxx and the Company.
2. ALL THAT AND THOSE Unit Number 0 Xxx Xxxxx, Xxxxxxx Xxxxxxxx Xxxx, Xxxx
Xxxx, Xx. Xxxxxx held under a lease dated 8th November, 2000 by and
between Xxxxx Xxxxx and the Company.
3. ALL THAT AND THOSE Unit Number 0 Xxx Xxxxx, Xxxxxxx Xxxxxxxx Xxxx, Xxxx
Xxxx, Xx. Xxxxxx held under a lease dated 4th June, 1998 by and between
Xxxxx Xxxxx, Brightpoint Inc. and the Company.
83
SCHEDULE 5
DUE DILIGENCE DOCUMENT DELIVERY LOG
84
SCHEDULE 6
PRO FORMA COMPLETION BALANCE SHEET
85
SCHEDULE 7
NEXTEL INVENTORY
86
Signed by /s/ Xxxxxx X. Xxxxx
-------------------
for and on behalf of BRIGHTPOINT
HOLDINGS B.V. in the presence of:
Signature of witness: /s/ Xxxxxx X. XxXxxxx
---------------------
Name: Xxxxxx X. XxXxxxx
Address: Ice Xxxxxx
Xxx Xxxxxxxx Xxxxxx Xxxxx 0000
Xxxxxxxxxxxx, XX XXX
Occupation: Counsel
Signed by /s/ Xxxxx Xxxxxx
----------------
for and on behalf of CELTIC TELECOM
CONSULTANTS LIMITED
in the presence of:
Signature of witness: /s/ Xxxxxxxx Xxxxxxx
--------------------
Name: Xxxxxxxx Xxxxxxx.
Address: Xxxxxxxxx Xxxxxx
Xxxxxxxxx XXX X0
Occupation: Solicitor
