Document:

EXHIBIT 10.16

 

Dated 27 February 2006

 

THE PERSONS NAMED IN SCHEDULE 1, PARTS I & II HERETO

AND

KANDEL LIMITED

AND

INVESTEXX HOLDINGS LIMITED

AND

INVESTCORP TECHNOLOGY VENTURES II, L.P. 

AND

INFONXX, INC.

 

AGREEMENT FOR THE SALE AND PURCHASE OF 

THE ENTIRE ISSUED SHARE CAPITAL OF 

KANDEL LIMITED

 

O’DONNELL SWEENEY

One Earlsfort Centre

Earlsfort Terrace

Dublin 2 

PS/FJH/14305.18 

 

 

2

 

 

THIS AGREEMENT is made on 27 February 2006 

BETWEEN

  	1.
	THE PERSONS NAMED IN SCHEDULE 1, PART I HERETO (the “Vendors”);

  	2.
	THE PERSONS NAMED IN SCHEDULE 1, PART II HERETO (the “Covenantors”);

  	3.
	INVESTCORP TECHNOLOGY VENTURES II, L.P. a Cayman Islands corporation having its registered office at West Wind Building, PO Box 1111, Grand Cayman (“Investcorp”), and INFONXX, INC., a Delaware corporation having its registered office at 3864 Courtney Street, Suite 411, Bethlehem, Pennsylvania, USA (“InfoNXX”, together with Investcorp, the “Promoters”) in the course of promoting a company under the style of Investexx Holdings Limited;

  	4.
	INVESTEXX HOLDINGS LIMITED, in the process of being incorporated as an Irish registered limited liability company (the “Purchaser”); and

  	5.
	KANDEL LIMITED registered in Ireland under registration number 364249 and having its registered office at East Point Business Park, Dublin 3 (the “Company”).

WHEREAS:

  	A.
	The legal and beneficial ownership of the Sale Shares is as set out in Schedule 1 Part I.

  	B.
	The Promoters are in the course of incorporating the Purchaser.

  	C.
	The Vendors have agreed to sell and the Purchaser has agreed to purchase all of the Sale Shares on the terms and subject to the conditions of this Agreement.

  	D.
	The Company is party to this Agreement for the purpose of receiving the benefit of certain undertakings and representations from the Vendors in its favour. The Covenantors are parties to this Agreement for the purpose of giving certain covenants in favour of the Company and the Purchaser.

  	E.
	The Sale Shares represent the entire Issued share capital of the Company.

  	F.
	The Company is the legal and beneficial owner of the entire issued share capital of each of the Subsidiaries.

NOW IT IS HEREBY AGREED as follows: 

  	1
	INTERPRETATION

  	1.1
	In this Agreement:

 

 

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“Accounting Standards” means accounting principles, standards and practices generally accepted in Ireland at the date of this Agreement consistently applied with prior periods;

“Accounts” means the audited consolidated financial statements of the Company and the Subsidiaries together with the financial statements of the Company and each of the Subsidiaries as at the Last Accounting Date comprising the audited consolidated balance sheet as at, and the audited consolidated profit and loss account for the accounting period ending on, the Last Accounting Date and the notes, reports and other documents required by law to be annexed thereto;

“Agreement” means this Agreement and the Schedules hereto;

“Anglo Irish Bank” means Anglo Irish Bank Corporation plc having its registered office at Stephens Court, 18/21 St Stephen’s Green, Dublin 2;

“BoSI” means Bank of Scotland (Ireland) Limited, having its registered office at Bank of Scotland House, 124-127 St Stephen’s Green, Dublin 2;

“Breach” in relation to a Warranty means any instance of the Warranty being untrue or inaccurate in any respect;

“Business” the full range of business activities heretofore carried on by the Group including the provision of directory enquiry services, outsourced customer care, telesales and ancillary call-centre services and the provision of internet classified search services to end-users;

“Business Day” means a day (other than a Saturday or Sunday or a public holiday) on which clearing banks are open for business in Dublin;

“Claim” means a Warranty Claim or an Indemnity Claim (as the context requires); 

“Completion” means completion of the matters referred to in Clause 5;

“Completion Date” means the fifth Business Day following (i) the giving of notice by the Purchaser to the Vendors’ Representative of its intention to complete the purchase of the Sale Shares, or (ii) the date which is five Business Days prior to the Long Stop Date, whichever is the earlier;

“Confidential Information” means all information of any Group Company not in the public domain used in or otherwise relating to the Business, the customers or financial or other affairs of any Group Company including, without limitation, information relating to:

  	(i)
	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, pricing methods, discount practices, market research reports and surveys, and advertising or other promotional materials;

  	(ii)
	future projects, business development or planning, commercial relationships and negotiations;

 

 

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“Connected Person” has the meaning given to it in Section 26 of the Companies Act 1990 (as amended) and “Person Connected” shall be construed accordingly;

“Consideration” means the cash consideration for the sale of the Sale Shares being €86,745,589;

“Disclosed” means fairly and accurately disclosed in the Disclosure Letter or the documents annexed thereto with sufficient detail to identify the nature and scope of the matter disclosed in the context of the Warranties;

“Disclosure Letter” means the letter of the same date as this Agreement from the Vendors to the Purchaser disclosing exceptions and qualifications to the Warranties;

“Director” means a director for the time being of any Group Company; 

“Domain Names” means the domain names of the Group listed in Schedule 8;

“Employee” means any director, former director, employee or former employee of any Group Company;

“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;

“Environment” means the environment generally including all biological and physical aspects of the environment including but not limited to any land (including, without limitation, soil, surface land and sub surface strata, sea bed or river bed under any water as referred to below and any natural or man made structures), any waters (including, without limitation, coastal and inland waters, surface waters, ground waters, aquifers and water in pipes, drains or other conduits) and air (including, without limitation, air within buildings and other natural or man made structures above or below ground);

“Environmental Laws” means all laws (whether criminal, civil or administrative) including common law, statutes, statutory instruments, directives, regulations, bye-laws, orders, codes, judgments and other legal measures having the force of law (including codes of practice, circulars and guidance notes made thereunder) in any jurisdiction relating to the Environment;

“Environmental Licences” means any permit, licence, permission, approval, consent, registration or other authorisation required by or pursuant to any applicable Environmental Laws or relating to the Environment;

“Escrow Account” means the interest bearing deposit account in the joint names of the Escrow Agents into which the Escrow Amount is to be paid on the Completion Date and which shall be operated in accordance with the Escrow Agreement;

“Escrow Agents” means the Purchaser’s Solicitors and the Vendors’ Solicitors;

 

 

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“Escrow Agreement” means the escrow agreement in the agreed form as set out in Schedule 7 to be entered into on the Completion Date between the Vendors, the Purchaser and the Escrow Agents;

“Escrow Amount” means at Completion, the sum of €10,000,000 to be paid by the Purchaser into the Escrow Account on Completion in accordance with Clause 3.3.1 and thereafter the sum standing to the credit of the Escrow Account from time to time (together with interest (if any) accrued thereon);

“EURIBOR” in relation to any amount on any day, means: (i) the rate per annum calculated and (rounded upwards to five decimal places) published or reported on Telerate page 248 (or such other screen or page as may replace that screen or page on that service) or about 12.00 p.m. on the second Business Day before such day as being the interest rate per annum offered in the European inter-bank market for deposits in euro in an amount comparable with such amount for a three month period; or (ii) if the service in (i) above is not available, the rate per annum determined by the party to whom monies are owed to be equal to the arithmetic mean (rounded upwards to five decimal places) of the rate (as notified to such party) at which each of three leading banks in the Dublin market were offering deposits in euro in
an amount comparable with the relevant amount for a three month period at or about 12.00 p.m. on the second Business Day before such day;

“€” or “euro” means the euro, the lawful currency of Ireland and being the single unit of currency provided for in the Treaty on European Union which was signed at Maastricht on 7 February 1992 and which came into force on 1 November 1993. Each euro is divided into one hundred cent and references in this Agreement to “cent” shall be construed accordingly;

“Group” means the Company and the Subsidiaries;

“Group Company” means any one of the Company or the Subsidiaries (as the case may be);

“Indemnity Claim” means a claim under the Tax Deed;

“Intellectual Property” means patents, trade marks, service marks, registered designs, applications for any of the foregoing, trade and business names, unregistered trade marks and service marks, know-how, copyrights, rights in designs, inventions, rights under licences and consents in relation to any such rights, and rights of the same or similar effect or nature, in any part of the world;

“Intellectual Property Rights” means all Intellectual Property used, or required to be used, by a Group Company, in, or in connection with the Business;

“KPMG Report” means the KPMG vendor due diligence assistance report dated 24 November 2005 to be addressed to the Purchaser;

“Last Accounting Date” means 31 March 2005;

“Long Stop Date” means 60 days from the date hereof;

 

 

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“Management Accounts” means the consolidated management accounts of the Group for the period commencing on the Last Accounting Date ended 31 January 2006;

“Pension Schemes” means the Conduit Group Retirement Benefit Pension Scheme established by Declaration of Trust dated 1 April 2001 made by Conduit Enterprises Limited and operated with Hibernian Life and Pensions Limited (Policy No. M071784);

“Planning Acts” means the local Government (Planning & Development) Acts 1963 to 1999, the Planning & Development Act 2000, the Planning & Development Act 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;

“Properties” means the property or properties short particulars of which are set out in Schedule 5 and a reference to the Property includes a reference to the individual properties comprising the Properties and any part or parts of individual properties;

“Purchaser’s Group” means the Purchaser and any other company which is or hereafter becomes a subsidiary undertaking or holding company of the Purchaser or a subsidiary undertaking of such holding company;

“Purchaser’s Solicitors” means Arthur Cox, Earlsfort Centre, Earlsfort Terrace, Dublin 2;

“Relevant Capacity” means on his own account or jointly with or for that of any person, firm or company and whether as principal, partner, director, consultant or agent or through the medium of any company in which it has an interest (save as the holder of shares or other securities of a listed company quoted on a recognised stock exchange where the shares or securities confer not more than five per cent of the votes which can be exercised aa general meeting and for which purpose there shall be aggregated with its shareholding or interest the shares or interests held or controlled or exercised by any person connected with the Vendors);

“Relevant Proportion” means, in relation to any Vendor, the percentage amount set opposite his name in the First Schedule hereto;

“Sale Shares” means the issued shares in the capital of the Company which are set out in Schedule 1;

“Subsidiaries” has the meaning set out in Part 2 of Schedule 2 and each a “Subsidiary”;

“Subsidiary Shares” means any shares in a Subsidiary which are not registered in the name of another Group Company;

“Substance” shall include but shall not be limited to any waste, pollutant or contaminant of whatever nature, noise, vibration, electromagnetic or other radiation which is capable of causing harm to the Environment;

“Tax” or “Taxation” includes (without limitation) corporation tax, income tax (including income tax or amounts on account of income tax required to be deducted or withheld from or accounted for in respect of any payment), capital gains tax, development land tax, inheritance 

 

 

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tax, value added tax, national insurance or PRSI contributions, PAYE, capital duty, stamp duty, stamp duty reserve tax, duties of customs and excise, petroleum revenue tax, rates, all taxes, duties or charges replaced by or replacing any of them, and all other taxes on gross or net income, profits or gains, distributions, receipts, sales, use, occupation, franchise, value added, and personal property, and all levies, imposts, duties, charges or withholdings of any nature whatsoever chargeable by any Tax Authority, and any payment whatsoever which the Company may be or become bound to make to any person as a result of the discharge by that person of any tax which the Company has failed to discharge, together with all penalties, charges and interest relating to any of the foregoing or to any late or incorrect return in respect of any of them, and regardless of whether any such taxes, levies,
duties, imposts, charges, withholdings, penalties and interest are chargeable directly or primarily against or attributable directly or primarily to the Company, or any other person and of whether any amount in respect of any of them is recoverable from any other person;

“Tax Authority” means any taxing or other authority (whether within or outside Ireland) competent to impose any liability to Tax;

“Tax Deed” means the deed of tax indemnity in the form set out in Schedule 6;

 “Tax Liability” shall bear the same meaning as in the Tax Deed;

“Taxes Act” and “TCA” mean the Taxes Consolidation Act, 1997;

“Territory” means the island of Ireland, England, Austria, Italy, France, Switzerland and Sweden;

“Vendors Representative” means Westfront Limited having its registered office at East Point Business Park, Clontarf, Dublin 3 or such other person as may be nominated by the Vendors from time to time and notified in writing to the Purchaser in accordance with Clause 13;

“Vendors’ Solicitors” means O’Donnell Sweeney Solicitors, One Earlsfort Centre, Earlsfort Terrace, Dublin 2;

“Warranties” means the warranties and undertakings contained in Schedule 4, each a “Warranty”;

“Warranty Claim” means a claim for Breach of any one or more of the Warranties; 

“1963 Act” means the Companies Act 1963; 

“1990 Act” means the Companies Act 1990.

  	1.2
	In this Agreement, a reference to:

  	 
	1.2.1
	the words “company”, “subsidiary”, “subsidiary undertaking” and “holding company” have the meanings given to them by the Companies Acts, 1963 to 2005;

  	 
	1.2.2
	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;

 

 

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	1.2.3
	a statutory provision includes a reference to:

  	 
	(a)
	that statutory provision as amended, restated, consolidated, modified or re-enacted from time to time (whether before or after the date of this Agreement); and

  	 
	(b)
	any subordinate legislation made under the statutory provision (whether before or after the date of this Agreement);

  	 
	1.2.4
	a person includes a reference to any body corporate, unincorporated association or partnership;

  	 
	1.2.5
	a person includes a reference to that person’s legal personal representatives and successors;

  	 
	1.2.6
	a clause or schedule, unless the context otherwise requires, is a reference to a clause of or schedule to this Agreement; and

  	 
	1.2.7
	the masculine gender shall include the feminine and neutral and the singular shall include the plural and vice versa.

  	1.3
	The headings in this Agreement shall not affect the interpretation of this Agreement.

  	1.4
	Any statement, representation or warranty which is qualified by the expression “so far as the Vendors are aware” or “to the best of the knowledge, information or belief of the Vendors” or with any similar qualification shall be deemed to include a warranty given by the Vendors that they have made such statement, representation or warranty after due and careful enquiry.

  	1.5
	Subject to Clause 6.2, in the event of there being any conflict or ambiguity between the provisions of this Agreement and the Disclosure Letter, the terms of this Agreement shall prevail.

  	1.6
	Where any warranty, obligation, representation or agreement pursuant to this Agreement is given by or accepted by more than one person;

  	 
	1.6.1
	the Warranties contained in this Agreement on the part of such persons shall be construed and take effect as joint and several warranties and undertakings and the act or default of any one of them shall be deemed to be the act or default of each of them and reference to that person shall refer to each of those persons or any of them as the case may be; and

  	 
	1.6.2
	any other such representations, agreements and obligations contained in this Agreement (not being Warranties) on the part of such person shall be construed and take effect as individual representations, agreements and obligations and the act or default of any one person of them shall be deemed to be the act or default of that person only.

 

 

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  	1.7
	The parties have participated jointly in negotiating and drafting of this Agreement. In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favouring or disfavouring any party by virtue of the authorship of any of the provisions of this Agreement

  	1.8
	The Promoters shall procure that the entry into of this Agreement (and all documents and agreements contemplated hereby) by the Promoters shall be ratified by the Purchaser after its incorporation in accordance with section 37 of the Companies Act 1963 and that all obligations and liabilities of the Promoters under this Agreement shall cease immediately following payment of the Consideration to the Vendors in accordance with the terms of this Agreement.

  	1.9
	References in this Agreement to payment obligations of the Purchaser shall, until the payment of the Consideration to the Vendors in accordance with the terms of this Agreement, be deemed to refer to the Purchaser and the Promoters jointly and severally.

  	2
	SALE AND PURCHASE

  	2.1
	In accordance with and subject to the provisions of this Agreement, the Vendors hereby agree to sell as legal and beneficial owners (and where Sale Shares are held in trust for any of the Vendors the trustees of those Sale Shares have joined in this Agreement for the purpose of transferring to the Purchaser the entire legal and beneficial interest in all of the Sale Shares) and the Purchaser hereby agrees to purchase as and from the Completion Date the Sale Shares for the Consideration free from all Encumbrances together with all rights of any nature whatsoever on or after the Completion Date attaching or accruing to them.

  	2.2
	Each Vendor hereby 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 him or any other person under the Articles of Association of the Company or otherwise.

  	3
	PURCHASE PRICE

  	3.1
	The total price payable to the Vendors by the Purchaser for the Sale Shares shall be the Consideration.

  	3.2
	At Completion:

  	 
	3.2.1
	the sum of €76,745,589 (being the Consideration less the Escrow Amount) shall be paid to the Vendors’ Solicitors whose receipt shall be sufficient evidence of payment and the Purchaser shall not be concerned as to the distribution of such monies between the Vendors; and

  	 
	3.2.2
	the Escrow Amount shall be paid into the Escrow Account, to be held on deposit for a period of eighteen months from the Completion Date and used in accordance 

 

 

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with the terms of the Escrow Agreement to satisfy (i) any Warranty Claim and/or (ii) any Indemnity Claim.

  	4
	CONDITIONS

  	4.1
	Completion is subject to and conditional upon there being no:

  	 
	4.1.1
	temporary restraining order or preliminary or permanent injunction, judgment, order or decree of any court or governmental or regulatory authority or competent jurisdiction prohibiting the sale and purchase of the Sale Shares (other than any competition or anti-trust regulatory authority); and

  	 
	4.1.2
	suit, action or proceeding (other than any suit, action or proceeding by any competition or anti-trust regulatory authority) being pending before or by any court or governmental or regulatory authority seeking to restrain or prohibit the sale and purchase of the Sale Shares, on or before the date set for Completion in clause 5.1, provided however that clauses 4.1.1 and 4.1.2 shall not apply to any injunction, decree, judgment, order or decree pursuant to clause 4.1.1 and/or any suit, action or proceeding pursuant to clause 4.1.2 which is taken by, on behalf of or in conjunction with the Purchaser, the Promoters (or either of them) or any person associated or connected with or controlled by any of them (the matters referred to in clauses 4.1.1 and 4.1.2 are hereinafter in this clause 4 collectively referred to a “Third Party Action”). 

  	4.2
	In the event that a Third Party Action occurs on or before the date set for Completion in clause 5.1, then, subject only to clause 4.3, the Promoters, the Purchaser and the Vendors shall:

  	 
	4.2.1
	challenge, defend, resist, lift, waive, settle and/or compromise (as appropriate) the Third Party Action; and

  	 
	4.2.2
	co-operate with each other in taking the action referred to in clause 4.2.1.

with the intention of giving effect to the matters envisaged by this Agreement and achieving Completion expeditiously.

  	4.3
	In the event a Third Party Action occurs on or before the date set for Completion in clause 5.1 and the Promoters, the Purchaser, and a majority (having regard to the number of voting shares held by them) of the Vendors are of the opinion that the Third Party Action is unlikely to be successfully defended, resisted, lifted, waived, settled and/or compromised (as appropriate) the Promoters, Purchaser and the Vendors undertake one with the other that they shall each use their best endeavours to, and shall negotiate in good faith so as to realise an alternative means of consummating the sale and purchase contemplated by this Agreement.

  	4.4
	If a Third Party Action has occurred and has not been successfully challenged, defended, resisted, lifted, waived, settled and/or compromised (as appropriate) on or prior to the 

 

 

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Long Stop Date, then the date for Completion shall be postponed to the date which is thirty Business Days after the date set for Completion in clause 5.1.

  	4.5
	If the date for Completion is postponed in accordance with clause 4.4 then the provisions of this Agreement shall apply to the date to which Completion is so postponed provided however that if Completion has not occurred on or before the date which is 120 Business Days from the initial date set for Completion, this Agreement shall automatically terminate and cease to have effect except that such termination shall not affect the accrued rights and entitlements of the Vendors under this Agreement at the date of termination and provided that the Purchaser shall have no entitlement to pursue the Vendors under the Warranties, the Tax Deed, for breach of Schedule 9 or otherwise (other than rights pursuant to clauses 7 (confidentiality), 10 (costs) and 17 (governing law)).

  	4.6
	Completion is also subject to receipt by the Purchaser, prior to the Completion Date of consents to the change of control of the Company contemplated by this Agreement from Orange UK (in respect of an agreement with the Group dated 14 July 2003 (as amended)),  Bord Gais (in respect of an agreement with the Group effective as of 1 January 2003 (as amended)), Vodafone (in respect of two agreements with the Group dated 11 April 2003 and July 2005 (as amended)) and the Welsh Development Authority (in respect of an agreement with the Group dated February 2003).

  	4.7
	Completion is also subject to:

  	 
	4.7.1
	each of the beneficial owners of the Sale Shares (with the exception of those shareholders set out in Schedule 1, Part III (the “Untraced Shareholders”) having agreed in writing to the sale of their Sale Shares in accordance with the provisions of this Agreement; and

  	 
	4.7.2
	the Articles of Association of the Company having been amended by the Vendors in a form acceptable to the Purchaser acting reasonably so as permit the Purchaser to compulsorily acquire the Sale Shares held by the Untraced Shareholders.

  	4.8
	Pending Completion the Vendors covenant in the terms set out in Schedule 9 provided however that any action which is required to be taken in order to effect the transactions contemplated by this Agreement or which is taken in relation to any necessary notification to the Authority shall be deemed not to be a breach of Schedule 9.

  	4.9
	The Purchaser:

  	 
	4.9.1
	agrees to submit to any relevant authority (including, without limitation, the Irish Competition Authority) (the “Authority”) within 5 Business Days of the date hereof any notification required by law (including a notification pursuant to section 18 of the Irish Competition Act 2002) in the agreed form;

  	 
	4.9.2
	shall ensure that any further communication with the Authority shall only be made by the Purchaser after consultation with the Vendors’ Representative and 

 

 

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shall be made in good faith and with the intention of obtaining expeditiously the approval of the Authority for the transactions contemplated hereby; and

  	 
	4.9.3
	undertakes with the Vendors to comply with the reasonable requirements imposed by the Authority, if any, of the Authority (including any reasonable conditions specified by the Authority) in respect of the matters envisaged by this Agreement,

  	 
	4.9.4
	to the extent any condition (including, without limitation, any divestment condition) is imposed by the Authority, they will proceed, to the maximum permissible extent, with the sale and purchase contemplated by this Agreement (provided that any such condition would not be material in value terms in the context of the Group as a whole),

with the intention of achieving Completion expeditiously.

  	4.10
	The Purchaser expressly acknowledges and agrees that in the event any Authority does not approve the sale and purchase of the Sale Shares pursuant to applicable laws and as a result the Purchaser fails to make payment in accordance with Clause 5.5.1 on Completion, the Vendors may pursue the Purchaser and/or the Promoters for breach of this Agreement.

  	5
	COMPLETION

  	5.1
	Completion shall take place at the office of the Vendors’ Solicitors on the Completion Date.

  	5.2
	At Completion the Vendors shall each deliver to the Purchaser duly executed transfers of the Sale Shares accompanied by the relevant original share certificates (if not already in the possession of the Purchaser) or an appropriate indemnification in the customary form in respect of any lost certificates together with such other deeds and documents as may be necessary to transfer to the Purchaser or as it may direct the legal and beneficial ownership of the shares free from all liens, charges or Encumbrances of every description.

  	5.3
	At Completion the Vendors shall deliver or procure to be delivered to the Purchaser those items set out in Schedule 3;

  	5.4
	At Completion the Vendors shall procure that the Directors of each Group Company shall convene and hold a meeting of the board of directors of each Group Company at which the Directors shall:

  	 
	5.4.1
	in the case of the Company, vote in favour of the registration of the Purchaser and/or its nominee(s) as member(s) of the Company in respect of the Sale Shares (subject only to the production of duly stamped transfers);

  	 
	5.4.2
	revoke all existing mandates for the operation of bank accounts and issue new mandates giving authority to persons nominated by the Purchaser;

 

 

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	5.4.3
	change the registered office of each Irish registered Group Company to and change the registered offices, corporate seats or principal places of business of all non-Irish registered Group Companies to such addresses as the Purchaser may direct;

  	 
	5.4.4 
	appoint such person or persons as the Purchaser may nominate as directors with immediate effect and approve the resignations of such persons as directors and secretary as may be required by the Purchaser; and

  	 
	5.4.5
	if the Purchaser so requests, appoint such firm as the Purchaser may nominate as auditors with immediate effect and approve the resignation of Deloitte & Touche as auditors.

  	5.5
	At Completion the Purchaser shall:

  	 
	5.5.1
	pay to the Vendors’ Solicitors in immediately available funds the sum of €76,745,589 (being the Consideration less the Escrow Amount), and the receipt of the Vendors’ Solicitors shall be a sufficient discharge to the Purchaser in respect of such payment;

  	 
	5.5.2
	pay the Escrow Amount into the Escrow Account.

  	5.6
	Upon the signing of this Agreement, the parties hereto shall enter into the Tax Deed, the Escrow Agreement and the Disclosure Letter.

  	5.7
	The Purchaser shall not be obliged to complete this Agreement unless the Vendors comply fully with all their obligations under this Clause 5.

  	5.8
	The Vendors shall not be obliged to complete this Agreement unless the Purchaser complies fully with its obligations under this Clause 5.

  	6
	WARRANTIES

  	6.1
	In consideration of the Purchaser agreeing to enter into this Agreement, the Vendors, jointly and severally warrant and undertake to the Purchaser that subject only to such matters as Disclosed each of the Warranties is true and accurate in all respects on the date of this Agreement and the Vendors agree and acknowledge that subject only to such matters as Disclosed the Purchaser is entering into this Agreement in reliance on the Warranties. In the event of a Breach, then, subject to the provisions of this Agreement and without restricting the rights of the Purchaser to claim damages on any other basis available to it, the Vendors shall, at the Purchaser’s option, either:

  	 
	6.1.1
	pay to the Purchaser an amount equal to the amount by which the value of the Sale Shares is less than it would have been if such Breach had not occurred; or

  	 
	6.1.2
	pay to the Purchaser an amount required to remedy in full the matter giving rise to the Breach

 

 

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together with all fees, costs and expenses reasonably and properly incurred or sustained by the Purchaser or any member of the Purchaser’s Group as a result of such Breach or in connection with the matter or circumstance giving rise to that Breach or in connection with establishing liability and recovering such payment from the Vendors.

  	6.2
	The Warranties shall be qualified only by reference to those matters Disclosed. The parties agree and acknowledge that (i) a document which is attached to or contained in the Disclosure Letter and (ii) any statement contained in the body of the Disclosure Letter and which in each case is specifically Disclosed against one warranty shall be deemed to qualify each other Warranty.

  	6.3
	Each of the Warranties shall be separate and independent and, save as set out in this Clause 6, shall not be limited by reference to any other paragraph or sub-paragraph or anything in this Agreement or the Tax Deed.

  	6.4
	Each of the Vendors undertakes to the Purchaser that upon it becoming aware of the actual, impending or threatened occurrence of any event after Completion, which might reasonably be expected to cause or constitute a Breach he will immediately give written notice thereof to the Purchaser together with reasonable details of the relevant event.

  	6.5
	The Purchaser is entering into this Agreement on the basis of the Warranties and in reliance on them and the Vendors acknowledge that this is the case: Liability under any Warranty shall not any way be modified or discharged by Completion.

  	6.6
	Each Warranty shall continue in full force and effect notwithstanding Completion and no information relating to the Group of which the Purchaser or any of its agents or advisors has knowledge (whether actual or constructive) nor any investigation, audit, inquiry or examination made by or on behalf of the Purchaser at any time, whether before or after the date of this Agreement, shall diminish the effect of any Warranty or of any representation undertaking herein contained or prejudice any claim made by the Purchaser thereunder or operate to reduce any amount recoverable thereunder and the assessment of any damages payable by the Vendors in respect of any Breach of any of  the Warranties shall wholly disregard any such information investigation, audit, inquiry or examination made by or on behalf of the Purchaser.

  	6.7
	The Vendors hereby assign to the Purchaser all the rights, remedies or claims which they may have in respect of any misrepresentations or inaccuracies in or omissions from any information (including information set out in the Disclosure Letter) or advice supplied or given by a Group Company or any of the officers, employees or agents of a Group Company and on which the Vendors have relied in giving the Warranties, preparing the Disclosure Letter and/or entering into this Agreement and/or the other documents to be entered into on Completion.

  	6.8
	Warranty Claims may be made by the Purchaser under the Warranties whether or not the Purchaser knew or could have discovered (whether by any investigation made by it or on its behalf into the affairs of the Company or otherwise) prior to signing this 

 

 

15

 

 

Agreement that any of the Warranties have not been complied with or carried out or are otherwise untrue or misleading.

  	6.9
	The rights and remedies of the Purchaser in respect of a Breach of any of the Warranties shall not be affected by the sale and purchase of the Sale Shares.

  	6.10
	Without prejudice to any other right or remedy of the Purchaser under this Agreement or otherwise all sums payable by the Vendors under this Agreement shall bear interest at the rate which is two per cent above three month EURIBOR from the date the claim (i) is settled between the parties or (ii) determined by a court of competent jurisdiction (whichever is the earlier) until the date of payment.

  	6.11
	Subject to Clause 6.16, the Vendors shall not have any liability whatsoever in respect of any Warranty Claim unless:

  	 
	6.11.1
	the Purchaser shall have given to the Vendors written notice of the relevant Claim (giving reasonable particulars of the Claim) on or before 17:00 GMT on the date falling 18 months from the Completion Date; and

  	 
	6.11.2
	proceedings in respect thereof are issued and served on the Vendors no later than 17:00 GMT on the date which is 6 months from the date on which notice of such claim is given by the Purchaser; and

  	6.12
	Subject to Clause 6.16, the Vendors shall not have any liability whatsoever in respect of any Warranty Claim unless the amount that would be recoverable from the Vendors in respect of that Warranty Claim when aggregated with any other amount or amounts recoverable (or which, but for this Clause 6.12 would be recoverable) in respect of other Warranty Claims exceeds €200,000.00 and in the event that the aggregated amounts exceed €200,000.00 the Vendors shall be liable in respect of the total aggregated amounts and not the excess only.

  	6.13
	Subject to Clause 6.16, the aggregate liability of the Vendors (whether at common law or under the express terms of this Agreement) under or in respect of or in connection with any Breach or Breaches of the Warranties shall not exceed the Escrow Amount and any payment to be made by the Vendors in connection therewith shall be made from the Escrow Account in accordance with the terms of the Escrow Agreement and accordingly no recourse shall be had in the settlement thereof to any other assets of the Vendors.

  	6.14
	Subject to clause 6.16, the aggregate liability of the Vendors (whether at common law or under the express terms of this Agreement) under or in respect of or in connection with any Indemnity Claim shall not exceed 15% of the Consideration and all Indemnity Claims shall be satisfied in the first instance from the Escrow Account in accordance with the terms of the Escrow Agreement.

  	6.15
	The maximum aggregate liability of the Vendors (whether at common law or under any express terms of this Agreement) under or in respect of or in connection with any indemnity Claim shall be reduced by the amount of any claim by the Purchaser against the Escrow Amount pursuant to this Agreement and the maximum individual liability of 

 

 

16

 

 

each of the Vendors (whether at common law or under any express terms of this Agreement) under or in respect of or in connection with any Indemnity Claim shall be reduced by that Vendor’s Relevant Proportion of the amount of any claim by the Purchaser against the Escrow Amount pursuant to this Agreement.

  	6.16
	Notwithstanding any other provision of this Agreement, the limitations set out in Clauses 6.11 to 6.14 inclusive shall not apply in respect of an individual Vendor (for the purposes of this Clause 6.16 a “Defaulting Vendor”) in respect of any Warranty Claim and/or any Indemnity Claim relating to: 

  	 
	6.16.1
	the Defaulting Vendor’s title to or the status or validity of his Sale Shares; or

  	 
	6.16.2
	any Claim which arises as a result of any fraudulent act or omission by the Defaulting Vendor,

  	6.17
	For the avoidance of doubt:

  	 
	6.17.1
	the limitations set out in Clauses 6.11 to 6.14 inclusive shall continue to apply in respect of those Vendors who are not a Defaulting Vendor.

  	 
	6.17.2
	the Purchaser shall be entitled, at its sole discretion, to pursue a Defaulting Vendor directly in respect of all or any part of his liability to make payment to the Purchaser in respect of Clause 6.16.1 and/or Clause 6.16.2 without first having to have recourse to the Escrow Amount but this shall be without prejudice to the Purchaser’s right at any time to discharge all or any part of a Defaulting Vendor’s liability to make payment to the Purchaser in respect of Clause 6.16.1 and/or Clause 6.16.2 from the sum for the time being standing to the credit of the Escrow Account in accordance with the terms of the Escrow Agreement;

  	6.18
	Any claim for breach of the obligations set out in Schedule 9 shall be made by notice in writing to the Vendors’ Representative on or prior to 17.00 GMT on the date which is 30 days from the Completion Date. The aggregate liability of the Vendors (whether at common law or under the express terms of this Agreement) under or in respect of or in connection with any claim for breach of the obligations set out in Schedule 9 shall not exceed an amount equal to €5,000,000.

  	6.19
	Save to the extent expressly warranted or guaranteed in this Agreement, none of the information, or its accuracy, supplied by any Group Company or any of its officers or employees or professional advisers to the Vendors or their professional advisers on or prior to the date hereof in connection with this Agreement, the Warranties, the Tax Deed, the Disclosure Letter or otherwise in relation to the business and affairs of the Group shall be deemed to have been warranted or guaranteed by the Group, and the Vendors irrevocably and unconditionally waive any and all claims (if any) which they might otherwise have against the Group or any of its or their officers or employees in respect thereof.

  	6.20
	Subject to Clauses 6.13, 6.14 ands 6.18, all sums payable by the Vendors to the Purchaser or a Group Company under this Agreement and/or under the Tax Deed shall be paid free 

 

 

17

 

 

and clear of all deductions or withholdings whatsoever save only as may be required by law. If any such deductions or withholdings are required by law the Vendors shall be obliged to pay to the relevant person such sums as will after such deduction or withholding has been made leave that person with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding. If any sum payable by the Vendors to the Purchaser or a Group Company under this Agreement and/or under the Tax Deed shall otherwise be subject to tax in the hands of the recipient the same obligation to make an increased payment shall apply in relation to such tax liability as if it were a deduction or withholding required by law.

  	6.21
	Where the Purchaser or any Group Company has a claim against a third party in relation to any matter which gives rise to a Warranty Claim (a “Third Party Claim”), the Purchaser shall:

  	 
	(i)
	after having received a written acknowledgment from the Vendors in terms reasonably acceptable to the Purchaser:

  	 
	(a)
	accepting liability for the Warranty Claim; and

  	 
	(b)
	agreeing to the Purchaser’s Pre-Estimate (as such term is defined in the Escrow Agreement) of the Warranty Claim for the purposes of the Escrow Agreement,

and

  	 
	(ii)
	subject to the Purchaser or the relevant Group Company being indemnified by the Vendors to the reasonable satisfaction of the Purchaser against all costs and expenses which might be incurred by reason of the Third Party Claim (including, where the third party concerned is a customer, any loss of business or profits resulting from the taking of such action against the customer), (provided that, for the avoidance of doubt, the indemnification in this Clause 6.21(ii) shall not be capped at the Escrow Amount) use all reasonable endeavours to procure that the Third Party Claim is diligently pursued to recover from such party any amounts in respect of the Third Party Claim and any amounts so recovered by the Purchaser (net of any costs and expenses incurred by the Purchaser or the Company in pursuing the Third Party Claim) shall act to reduce the amount of
the Warranty Claim payable by the Vendors.

  	6.22
	If a liability in respect of the same matter falls on the Vendors both in respect of a Breach of the Warranties and under the Tax Deed, then in calculating sums payable in respect of a Breach of the Warranties account shall be taken of sums paid or payable by the Vendors under the Tax Deed and vice versa.

  	6.23
	The Purchaser shall procure that the Company shall give the Vendors and their professional advisers reasonable access to the premises and personnel of the Company, and shall on a confidential basis give reasonable access to any relevant chattels, documents and records within the power, possession or control of the Company to enable the Vendors and their professional advisers to examine such chattels, accounts, 

 

 

18

 

 

documents and records and take copies or photographs thereof for the sole purpose of evaluating any Warranty Claim made by the Purchaser.

  	6.24
	For the avoidance of doubt it is hereby agreed that nothing in the Agreement shall in any way restrict or limit the general obligation of the Purchaser to mitigate any loss or damage which it may suffer in consequence of any matter giving rise to a claim against the Vendors under the Warranties.

  	6.25
	In the event of any Claim by the Purchaser succeeding and payment being made by the Vendors in respect of such claim, the Consideration payable for the Sale Shares sold by the Vendors making the payment shall be deemed to have been reduced by an amount equal to the sum received by the Purchaser from the Vendors and in the case of payment from the Escrow Account to the Purchaser in this regard all Vendors shall be deemed to share in the making of this payment pro rata to the percentage of the Consideration actually received by them.

  	6.26
	The Purchaser shall give to the Vendors written notice’ giving reasonable particulars of any Breach as soon as practicable upon it becoming aware of the occurrence of a Breach.

  	6.27
	The Vendors shall not be liable for a Warranty Claim if and to the extent:

  	 
	6.27.1
	the loss to which the Warranty Claim relates is attributable (in whole or in part) to a change made after the Completion Date in the accounting or taxation policies of a Group Company (except where the change is required to accounting or taxation policies which applied prior to the Completion Date and is necessary to comply with generally accepted accounting principles);

  	 
	6.27.2
	the loss to which the Warranty Claim relates would not have arisen but for a voluntary act, transaction or omission carried out by the Purchaser after Completion other than in the ordinary course of business and which the Purchaser was aware would give rise to a breach of the Warranties;

  	 
	6.27.4
	the loss to which the Warranty Claim relates arises as a direct result of a change in law occurring after Completion.

  	6.28
	Where the Purchaser gives notice to the Vendors in respect of a formal claim by a third party (the “Relevant TP Claim”) which in the opinion of the Purchaser gives rise to, or which may give rise to, a Warranty Claim the Purchaser shall allow the Vendors Representative reasonable access to and copies of all documents, records, papers in the possession of the Purchaser relating to the Relevant TP Claim (provided any reasonable costs incurred by the Purchaser and/or the Group in so doing shall be reimbursed by the Vendors) and shall not make any admission of liability or settle or compromise the Relevant TP Claim without the prior consent of the Vendors Representative which shall, not be unreasonably withheld or delayed PROVIDED THAT the Vendors (acting jointly) may take conduct of the Relevant TP Claim subject to the following
preconditions and upon the following terms (the breach of any of which by the Vendors (or any of them) shall entitle the relevant Group Company forthwith to re-take conduct of the Relevant TP Claim):

 

 

19

 

 

  	 
	(i)
	the Vendors first agree to jointly and severally indemnify (provided that, for the avoidance of doubt, the indemnification in this Clause 6.28 shall not be capped at the Escrow Amount) the Purchaser and the Group to their reasonable satisfaction against:

  	 
	(a)
	the maximum amount that may treasonably become payable if the Relevant TP Claim is successful; and

  	 
	(b)
	the costs of any proceedings relating to the Relevant TP Claim and all claims and judgments that may reasonably arise under the Relevant TP Claim;

  	 
	(ii)
	without prejudice to Clause 6.28(i) above, the Vendors agree in writing to the Purchaser’s Pre-Estimate (as such term is defined in the Escrow Agreement) of the Relevant TP Claim for the purposes of the Escrow Agreement,

  	 
	(iii)
	the proceedings relating to the Relevant TP Claim are not conducted by the Vendors in a manner that would reasonably be expected to jeopardise or damage the goodwill or reputation of the Group or the Purchaser;

  	 
	(iv)
	the Vendors shall at all times keep the Purchaser fully informed of all developments in relation to the Relevant TP Claim and shall allow the Purchaser and its advisors full access to all papers relating to the Relevant TP Claim or any proceedings arising therefrom;

  	 
	(i)
	the Vendors shall take the reasonable representations of the Purchaser into account in relation to the conduct of any proceedings relating to the Relevant TP Claim; and

  	 
	(ii)
	the Vendors shall ensure that no obligation, commitment or disadvantage shall be assumed or suffered by any Group Company or the Purchaser as a consequence of the Relevant TP Claim or arising out of the settlement thereof and the terms of any settlement of the Relevant TP Claim shall: 

  	 
	(a)
	require the prior written approval of the Purchaser; and

  	 
	(b)
	constitute an acknowledgement of liability on the part of the Vendors to pay to the Purchaser such amount of the Relevant TP Claim and all other sums payable under Clauses 6.28(i) above.

  	6.29
	The Promoters and the Purchaser jointly and severally warrant to the Vendors that:

  	 
	6.29.1
	the Promoters and the Purchaser have the requisite power and authority to enter into and perform this Agreement and the other documents which are to be executed by the Purchaser in accordance with the terms of this Agreement (the “Purchaser’s Completion Documents”);

 

 

20

 

 

  	 
	6.29.2
	this Agreement constitutes and the Purchaser’s Completion Documents will, when executed by the Promoters and the Purchaser, constitute binding obligations of the Promoters and the Purchaser in accordance with their respective terms;

  	 
	6.29.3
	the execution and delivery of, and the performance by the Purchaser of its obligations under this Agreement and the Purchaser’s Completion Documents will not:

  	 
	(i)
	result in a breach of any provision of the memorandum of articles of association or by-laws or equivalent constitutional documents of the Promoters or the Purchaser;

  	 
	(ii)
	result in a breach of, or constitute a default under, any instrument to which the Purchaser or the Promoters are party or by which the Purchaser or the Promoters are bound; or

  	 
	(iii)
	result in a breach of any order, judgment or decree of any court or governmental agency to which the Purchaser or the Promoters are party or by which the Purchaser or the Promoters are bound,

  	 
	6.29.4
	they are not actually aware of any fact or. matter which renders any of the Warranties untrue or misleading or gives rise to a breach thereof at the date of this Agreement.

  	6.30
	The Purchaser shall in no circumstances be entitled to bring any claim against the Vendors or any of them in respect of a Warranty Claim or an Indemnity Claim on or prior to Completion.

  	7
	CONFIDENTIALITY

  	 
	7.1
	For the. purpose of assuring to the Purchaser the full benefit of the Sale Shares and the goodwill and in consideration of the agreement of the Purchaser to purchase the Sale Shares on the terms hereof, the Vendors agree as a separate and independent agreement that, subject to clause 7.3, they will not at any time hereafter use, divulge or communicate to any person any Confidential Information which may be within or which, in the course of matters arising under this Agreement, may come to their knowledge, and that they will use all reasonable endeavours to prevent the use, publication or disclosure of any Confidential Information concerning such matters or any of them and not do anything to harm the goodwill of the Group.

  	 
	7.2
	No party hereto shall, without the prior consent in writing of BoSI, Liam Young and the Promoters or the Purchaser, make any announcement or public statement in relation to the entry into or performance of this Agreement. Each party hereto shall treat as strictly confidential all information received or obtained as a result of entering into or performing of this Agreement which relates to:

 

 

  	 
	21

 

  	 
	7.2.1
	the existence and the provisions or the contents of this Agreement or any document referred to herein;

  	 
	7.2.2
	the negotiations relating to this Agreement or any document referred to herein;

  	 	7.2.3
	(in the case of the Vendors only) the Purchaser’s Group.

	7.3
	Each party may disclose information which would otherwise be confidential if and to the extent:

	 	7.3.1
	required by the law of any relevant jurisdiction or pursuant to an order of a court of competent jurisdiction;

	 
	7.3.2
	required by any securities exchange or regulatory or governmental body to which any party is subject to, wherever situated, whether or not the requirement for information has the force of law;

  	 
	7.3.3
	that the information is disclosed on a strictly confidential basis to the professional advisers, auditors and/or bankers of that party on terms that such persons undertake to comply with the, provisions of Clauses 7.1 and 7.2 in respect of such information as if they were a party to this Agreement;

  	 
	7.3.4
	that the information has come into the public domain through no fault of that party;

  	 
	7.3.5
	that the other parties to this Agreement have given prior written approval to the disclosure, such approval not to be unreasonably withheld or delayed; or

  	 
	7.3.6
	required to enable that party to enforce its rights under this Agreement;

PROVIDED THAT any such information disclosed pursuant to paragraphs 7.3.1, or 7.3.2 shall be disclosed only after notice (i) by the Purchaser to the Vendors (in the case of any proposed disclosure by the Purchaser pursuant to this Clause 7.3) or (ii) by the Vendors’ Representative to the Purchaser (in the case of any proposed disclosure by a Vendor pursuant to this Clause 7.3).

The restrictions contained in this Clause 7 shall continue to apply after the date hereof without limit in time and notwithstanding the termination or expiration of this Agreement.

  	8
	USE OF INTELLECTUAL PROPERTY RIGHTS

No Vendor shall, and the Vendors shall procure that no persons or company controlled by any or all of them shall, 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 the Business or any part thereof, any of the Intellectual Property Rights or use anything which is intended or is likely to be confused with, any of the intellectual Property Rights.

  	9
	RESTRICTIVE COVENANTS

  	9.1
	Each of Liam Young, Denis Creighton, Mark Buckley, Dorothy O’Byrne, Neil Evans, Iris Seybold, Peter Josika and Colm Coyle hereby covenants to the Purchaser and to each Group Company that he shall not, in any Relevant Capacity:-

  	 
	9.1.1
	at any time during the period commencing on Completion and ending two years after such date carry on, or be engaged, concerned or interested in, or assist, any business which competes, directly or indirectly, with the Business in the Territory;

 

 

 

  	 
	22

 

  	 
	9.1.2
	at any time during the period commencing on Completion and ending two years after such date in competition with the Business either seek to procure orders from, or do business with, or procure directly or indirectly any other person to procure orders from or do business with, any person who has been a client or customer of a Group Company at anytime during the period of twelve months prior to Completion;

  	 
	9.1.3
	at any time during the period commencing on Completion and ending two years after such date solicit, or contact with a view to the engagement or employment by any person or engage or employ any of the employees of a Group Company whether or not such an employee would thereby commit a breach of his service contract;

  	 
	9.1.4
	do or say anything which is harmful to the reputation of the Company or which may lead any person to cease to deal with the Company on substantially equivalent terms to those previously offered or at all;

  	 
	9.1.5
	at any time during the period commencing on Completion and ending two years after such date seek to contract with or engage (in such a way as to adversely affect the business of the Group 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, ingredients or services to the Company at any time during the period of twelve months before Completion,

with the intent that each of the foregoing provisions of this Clause 9 shall constitute a separate and independent restriction on each of the persons listed in Clause 9.1.

  	9.2
	It is agreed between the parties that, whilst the restrictions set out in this Clause 8 are considered fair and reasonable, if it should be found that any of the restrictions be void or unenforceable as being 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 this Clause 9 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 this Clause 9 valid and enforceable.

  	10
	COSTS

Except as otherwise agreed in writing, 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.

 

 

 

  	 
	23

 

  	11
	FURTHER ASSURANCE

  	 
	11.1
	At any time after Completion each Vendor shall (at the reasonable cost of the Purchaser) do and execute, or procure to be done and executed, all necessary acts, deeds, documents and things as may be reasonably requested of them by the Purchaser to give effect to this Agreement.

  	 
	11.2
	At any time after Completion and upon the Purchaser’s reasonable request from time to time each Vendor shall (at the reasonable cost of the Purchaser): -

  	 
	11.2.1
	provide, or procure to be provided, tc the Purchaser all information relating to the business and affairs of the Company and which is in their possession or under their control; and

  	 
	11.2.2
	give, or procure to be given, to the Purchaser, its directors and agents access to any documents containing any of the information referred to in Clause 11.2.1 and the Purchaser may copy any of those documents.

  	12
	GENERAL

  	12.1
	No variation of this Agreement shall be valid unless it is in writing and signed by or on behalf of each of the parties.

  	12.2
	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.

  	12.3
	The rights and remedies of the Purchaser contained in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

  	12.4
	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.

  	12.5
	This Agreement shall enure to the benefit of and be binding upon the successors in title to the parties hereto.

  	13
	ASSIGNMENT

The Vendors shall not assign or transfer or purport to assign or transfer any of their rights or obligations under this Agreement. This Agreement and the Tax Deed may be assigned by the Purchaser to any member of the Purchaser’s Group and to any subsequent purchaser of the Sale Shares.

  	14
	NOTICES

  	14.1
	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 or sent by facsimile: 

 

 

  	 
	24

 

  	 
	(i)
	in the case of the Vendors to the Vendors’ Representative at the following address:

Westfront Limited

East Point Business Park

Clontarf 

Dublin 3

With a copy to:

Managing Partner 

O’Donnell Sweeney 

One Earlsfort Centre 

Earlsfort Terrace

Dublin 2

Fax: +353 1 6644300

  	 
	(ii)
	in the case of the Purchaser to:

Investexx Holdings Limited 

Arthur Cox Building

Earlsfort Terrace

Dublin 2

Fax: +353 1 618 0618

with a copy to:

Pádraig Ó Ríordáin 

Arthur Cox

Earlsfort Centre

Earlsfort Terrace

Dublin 2

Fax: +353 1 618 0618

  	 
	(iii)
	in the case of Investcorp to:

Hazem Ben-Gacem

Investcorp International Limited 

48 Grosvenor Street

London W1K 3HW

England

Fax: +44 207 887 3335

 

 

 

  	 
	25

 

with a copy to: 

Pádraig Ó Ríordáin

Arthur Cox

Earlsfort Centre

Earlsfort Terrace

Dublin 2

Fax: +353 1 618 0618

  	 
	(iv)
	in the case of InfoNXX to:

David Freedman

InfoNXX, Inc.

655 Madison Avenue 

21st Floor

New York NY 10021 

Fax: +1 212 909 8284

with a copy to:

Tim Mann

Kilpatrick Stockton LLP

Suite 2800

1000 Peachtree Street 

Atlanta GA 30309-4530 

USA

Fax: +1 404 541 3282

and

Deirdre-Ann Barr

Matheson Ormsby Prentice 

30 Herbert Street

Dublin 2

Fax: +353 1 619 9010

  	14.2
	in the absence of evidence of earlier receipt, any notice or other communication shall be deemed to have been duly given:

  	 
	14.2.1
	if delivered personally, when left at the address referred to in this Agreement; 

  	 
	14.2.2
	if sent by registered post, two days after posting it; and

  	 
	14.2.3
	if sent by facsimile, on completion of its transmission but if sent after 4.00 pm GMT it shall be deemed to have been duly give as at 9.00 am GMT on the next Business Day.

  	14.3
	Any such notice served on the Vendors Representative shall be deemed for the purposes of this Agreement to be have been duly served on each Vendor.

 

 

 

  	 
	26

 

  	15
	ENTIRE AGREEMENT

  	15.1
	This Agreement together with the Disclosure Letter, the Tax Deed, the Escrow Agreement and all documents in the agreed form or attached as a Schedule hereto or thereto constitute the entire understanding and agreement between the parties and supersede all prior agreements, arrangements, letters and discussions between the parties.

  	15.2
	In entering into this Agreement the Purchaser has not relied on any representation, warranty or other assurance other than as provided for under this Agreement, the Tax Deed, the Escrow Agreement and/or any documents in the agreed form.

  	15.3
	So far as permitted by law and except in the case of fraud, no party to this Agreements shall be liable whether in contract, tort or otherwise for any representation, warranty or assurance not set out in this Agreement and each party waives all remedies which might otherwise be available to it in respect thereof.

  	16
	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.

  	17
	WAIVER

  	17.1
	Any liability to the Purchaser under this Agreement may be wholly or partially released, varied, compounded or compromised by the Purchaser in its absolute discretion as regards any of the Vendors or any other party without in any way prejudicing or affecting its rights against any other party under the same or a similar liability, whether joint and several or otherwise. A waiver by the Purchaser of any breach by any party of any of the terms, provisions or conditions of this Agreement or of law, or the acquiescence of the Purchaser in any act (whether commission or omission) which but for such acquiescence would be a breach, will not constitute a general waiver of the term, provision or condition or of any subsequent act which is inconsistent with it.

  	17.2
	Each of the parties hereto other than the Purchaser hereby irrevocably agree, conditional upon the occurrence of Completion in accordance with this Agreement that the Subscription Agreement between BoSI, the Company and the persons named in schedule 1 thereto dated 25 March 2004 together with the Shareholders Agreement in the agreed form referred to therein be and they are hereby terminated and all rights of the parties thereto and all claims arising thereunder are hereby irrevocably waived.

  	18
	GOVERNING LAW AND JURISDICTION

  	18.1
	This Agreement is governed by, and shall be construed in accordance with the laws of Ireland without reference to its conflicts of laws rules.

  	18.2
	Each party irrevocably agrees that the courts of Ireland shall have non-exclusive jurisdiction to hear and determine any suit, action or proceedings, and to settle any disputes, which may arise out of or in connection with this Agreement and, for such purposes, each party irrevocably submits to the jurisdiction of the courts of Ireland.

 

 

 

 

  	 
	27

 

SCHEDULE 1

THE VENDORS AND THE SHARES

Schedule 1

Part I: The Vendors

 

 

 

  	 
	28

 

 

  	Name of legal owner
	 
	Name of beneficial owner
	 
	Number and class of

          Shares held
	 
	Relevant

          Proportion
	 

	Bank of Scotland

          (Ireland) Limited
	 
	Bank of Scotland

          (Ireland) Limited
	 
	6,312,971 A Ordinary

          Shares of €0.01 each

          4,000,000 6% Cumulative

          Redeemable Preference

          Shares of €1.00 each
	 
	27.08%
	 

	Westfront Limited

          Liam Young
	 
	Liam Young
	 
	3,865,363 B Ordinary

          Shares of €3.00 each

          6,266 C Ordinary Shares of €3.00 each

          425 D Ordinary Shares of €0.001 each
	 
	16.84%
	 

	Westfront Limited
	 
	Eddie Kerr
	 
	3,682,952 B Ordinary

          Shares of €3.00 each

          5,978 C Ordinary Shares of

          €3.00 each
	 
	12.84%
	 

	Anglo Irish Bank

          Nominees Limited
	 
	Anglo Irish Private

          Equity Fund L.P.
	 
	1,262,594 A Ordinary

          Shares of €0.01 each

          800,000 6% Cumulative Redeemable Preference Shares of €1.00 each

	 
	5.42%
	 

	Anglo Irish Bank

          Nominees Limited
	 
	Carol Moffet
	 
	631,297 A Ordinary Shares of €0.01 each
	 
	3.18%
	 

	 
	 
	 
	 
	133,906 B Ordinary Shares of €3.00 each
	 
	 
	 

	 
	 
	 
	 
	400,000 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

	Anglo Irish Bank Nominees Limited
	 
	Sean Fitzpatrick
	 
	631,297 A Ordinary Shares of €0.01 each
	 
	2.71%
	 

	 
	 
	 
	 
	400,000 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

 

 

 

  	 
	29

 

 

  	Anglo Irish Bank 

Nominees Limited
	 
	Tom Kirwan
	 
	631,297 A Ordinary Shares of €0.01 each
	 
	2.71%
	 

	 
	 
	 
	 
	400,000 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

	Anglo Irish Bank

Nominees Limited and 

Westfront Limited
	 
	Tom Jones
	 
	631,297 A Ordinary Shares of €0.01 each

        144,044 B Ordinary Shares of €3.00 each
	 
	3.21%
	 

	 
	 
	 
	 
	400,000 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

	Neil Evans
	 
	Neil Evans
	 
	100 D Ordinary Shares of €0.001
	 
	0.79%
	 

	Will Lewis
	 
	Will Lewis
	 
	25 D Ordinary Shares of €0.001
	 
	0.20%
	 

	Dryvale Limited
	 
	Mark Buckley
	 
	210,433 A Ordinary Shares of €0.01 each
	 
	2.29%
	 

	Mark Buckley
	 
	 
	 
	175 D Ordinary Shares of €0.001
	 
	 
	 

	 
	 
	 
	 
	133,334 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

	Dryvale Limited
	 
	Denis Creighton
	 
	210,432 A Ordinary Shares of €0.001 each
	 
	2.68%
	 

	Denis Creighton
	 
	 
	 
	225 D Ordinary Shares of €0.01 each
	 
	 
	 

	 
	 
	 
	 
	133,333 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

	Dryvale Limited
	 
	Colm Coyle
	 
	210,432 A Ordinary Shares of €0.01 each
	 
	1.69%
	 

	Colm Coyle
	 
	 
	 
	100 D Ordinary Shares of €0.001 each
	 
	 
	 

	 
	 
	 
	 
	133,333 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

	Dryvale Limited
	 
	Neil Parkinson
	 
	126,259 A Ordinary Shares of €0.01 each
	 
	0.54%.
	 

	 
	 
	 
	 
	80,000 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

 

 

 

  	 
	30

 

 

  	Dryvale Limited
	 
	Michael Walsh
	 
	126,259 A Ordinary Shares of €0.01 each
	 
	0.54%
	 

	 
	 
	 
	 
	80,000 6%. Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

	Dryvale Limited
	 
	Hugh Cooney
	 
	315,649 A Ordinary Shares of €0.01 each
	 
	2.93%
	 

	Hugh Cooney
	 
	 
	 
	200 D Ordinary Shares of €0.001 each
	 
	 
	 

	 
	 
	 
	 
	200,000 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

	Westfront Limited
	 
	John Kerry Keane
	 
	2,490,050 B Ordinary Shares of €3.00 each
	 
	5.69%
	 

	 
	 
	Patrick McDonagh
	 
	1,756 C Ordinary Shares of €3.00 each 
	 
	 
	 

	 
	 
	Michael Tunney
	 
	 
	 
	 
	 

	 
	 
	David Andrews
	 
	 
	 
	 
	 

	 
	 
	E.J. Princella
	 
	 
	 
	 
	 

	 
	 
	The Untraced Shareholders
	 
	 
	 
	 
	 

	Dryvale Limited
	 
	Gary McGann 

Lifeline Limited
	 
	1,325,723 A Ordinary Shares of €0.01 each
	 
	8.66%
	 

	 
	 
	Patrick Corcoran 

        John Kerry Keane 

Michael Quinn
	 
	840,000 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	Totals:
	 
	12,625,940 A Ordinary Shares of €0.01 each
	 
	100%
	 

	 
	 
	 
	 
	10,316,315 B Ordinary Shares of €3.00 each
	 
	 
	 

 

 

 

  	 
	31

 

  	 
	 
	 
	 
	14,000 C Ordinary Shares of €3.00 each
	 
	 
	 

	 
	 
	 
	 
	1,250 D Ordinary Shares of €0.001 each
	 
	 
	 

	 
	 
	 
	 
	8,000,000 6% Cumulative Redeemable Preference Shares of €1.00 each
	 
	 
	 

 

 

 

  	 
	32

 

Schedule 1

Part II: The Covenantors

Peter Josika 

Dorothy O’Byrne 

Iris Seybold

 

 

 

  	 
	33

 

Schedule 1

Part III: The Untraced Shareholders

 

 

 

  	 
	34

 

 

  	Untraced Shareholders
	 
	 
	 

	Ronan O’Caoimh
	 
	35,000
	 

	John & Rosemary Doran
	 
	32,750
	 

	 Gary Purcell
	 
	31,000
	 

	Ciaran Mc Namara
	 
	15,500
	 

	Micheline Heneghan
	 
	14,680
	 

	Sean Mc Namara
	 
	9,720
	 

	DS & CF Pension Fund
	 
	8,595
	 

	Richard O’Driscoll
	 
	8,552
	 

	Ulster Bank (Various)
	 
	6,338
	 

	Michael Tunney Mother 
	 
	5,600
	 

	Barry Maloney
	 
	3,968
	 

	Pierse Casey
	 
	3,850
	 

	Jim Young
	 
	3,174
	 

	Sean Melly
	 
	3,125
	 

	John Coolican
	 
	3,000
	 

	David Renwick
	 
	1,339
	 

	Moira Hynes
	 
	1,325
	 

	Stephen Tunney
	 
	1,190
	 

	Michael & Teresa Heneghan
	 
	1,020
	 

	Martin Scully
	 
	1,000
	 

	Niall Jones
	 
	1,000
	 

	Pat Nealon
	 
	951
	 

	Roger Conan
	 
	938
	 

	Fiona Spain
	 
	870
	 

	Declan & Dolores Geaney
	 
	850
	 

	Finola Young
	 
	794
	 

	Georgina Keane
	 
	794
	 

	Lisa Young
	 
	794
	 

	Mary Desmond
	 
	794
	 

	Terri Morrissey
	 
	750
	 

	Jimmy Lennox & Gerry Devitt
	 
	663
	 

	Kenneth Spratt
	 
	625
	 

	Mairead Moyne
	 
	625
	 

	Sean Creagh
	 
	625
	 

	John & Collette Mc Donald
	 
	600
	 

	Edward Delaney Bacon
	 
	500
	 

	ACC (Various)
	 
	475
	 

	Colin Lenehan
	 
	475
	 

	David Keaneally
	 
	400
	 

	Michael White
	 
	400
	 

	Bronwyn Heavey
	 
	318
	 

	Noel Roddy
	 
	250
	 

	Damian Hanlon
	 
	235
	 

	Oliver Gleason
	 
	175
	 

	Lovista Limited
	 
	65
	 

	Thomas O’Maolalaidh
	 
	65
	 

	Padraic Lang
	 
	 62
	 

	Others
	 
	205,819
	 

 

 

 

  	 
	35

 

SCHEDULE 2 – PART 1

INFORMATION CONCERNING THE COMPANY

Kandel Limited

 

  	1.
	 
	Registered number
	 
	364249
	 

	2.
	 
	Date of incorporation
	 
	22 November 2002
	 

	3.
	 
	Place of incorporation
	 
	Ireland
	 

	4.
	 
	Registered office
	 
	East Point Business Park, Dublin 3
	 

	5.
	 
	Type of company
	 
	Private Limited by shares
	 

	6.
	 
	Directors
	 
	Denis Creighton, Eugene McGale, Hugh Cooney, Liam Young, Michael Walsh, Neil Parkinson, Tom Kirwan
	 

	7.
	 
	Secretary
	 
	Mark Buckley
	 

 

 

 

  	 
	36

 

SCHEDULE 2 – PART 2

INFORMATION CONCERNING THE SUBSIDIARIES

List of Kandel Group Companies

 

  	Name
	 
	Country of Incorporation 
	 
	Registered Office/

Corporate Seat
	 
	Company Number 
	 
	 Shareholder Information
	 

	Fournir Limited
	 
	Ireland
	 
	Conduit House

        East point Business Park

        Dublin 3.
	 
	277404
	 
	Wholly owned subsidiary of Conduit Limited
	 

	Conduit Limited
	 
	Ireland
	 
	Conduit House

        East point Business Park

        Dublin 3.
	 
	327003
	 
	Wholly owned subsidiary of Kandel Limited
	 

	Conduit Enterprises Limited
	 
	Ireland
	 
	Conduit House

        East point Business Park 

        Dublin 3
	 
	244275
	 
	Wholly owned subsidiary of Conduit Limited
	 

	Conduit Software Limited
	 
	Ireland
	 
	Conduit House

        East point Business Park

        Dublin 3 
	 
	270057
	 
	Wholly owned subsidiary of Conduit Limited
	 

	118 Internet DQ Services Limited
	 
	Ireland
	 
	Conduit House

        East point Business Park

        Dublin 3
	 
	410939
	 
	Wholly owned subsidiary of Kandel Limited
	 

	118 DQ Services Ireland Limited
	 
	Ireland
	 
	Conduit House 

        East point Business Park

        Dublin 3
	 
	410938
	 
	Wholly owned subsidiary of 118 Internet Directory Services
	 

	118 Limited
	 
	UK 
	 
	Hodge House 

        114-116 Guildhall Place

        Cardiff CF10 1 DY

        UK
	 
	3951948
	 
	Wholly owned subsidiary of Conduit Enterprises Limited
	 

	Conduit Directory Services
	 
	UK
	 
	Hodge House

        114-116 Guildhall Place

        Cardiff CFI 0 1 DY

        UK.
	 
	4645079
	 
	Wholly owned subsidiary of Conduit Limited
	 

	Conduit Europe SA
	 
	Switzerland
	 
	Zentralstrasse 63a

        2502 Biel

        Switzerland
	 
	 
	 
	Wholly owned subsidiary of Conduit Limited
	 

	Conduit Enterprises GmbH
	 
	Austria
	 
	Nordbahnstraβe

        36/2/4 

        A-1020 Wien

        Austria
	 
	 
	 
	Wholly owned subsidiary of Conduit Enterprises Limited
	 

 

 

 

  	 
	37

 

 

  	Conduit Europe SA
	 
	Spain
	 
	Paseo de la Castellana, 164,
	 
	A-83046730
	 
	Wholly owned subsidiary of Conduit Limited
	 

	118.com Limited
	 
	UK
	 
	Hodge House

        114-116 Guildhall Place

        Cardiff CF10 1DY

        UK
	 
	5538664
	 
	Wholly owned subsidiary of Conduit Enterprises Limited
	 

 

 

38

 

SCHEDULE 3

ITEMS FOR DELIVERY BY THE VENDORS AT COMPLETION

  	1.
	A letter from any third party who at the date of Completion provides financial facilities to the Group granting all such consents, clearances or releases which may be necessary in relation to the transactions contemplated herein.

  	2.
	Copies of all bank mandates of each Group Company together with bank statements or other suitable information showing the financial situation of each Group Company with it’s bankers as at a date not earlier than five Business Days before the date of Completion.

  	3.
	Confirmation that no dividend (cash or non-cash) or other distributions has been declared and/or paid by any Group Company since the Last Accounting Date.

  	4.
	Duly executed transfers in respect of

  	 
	(i)
	the Sale Shares; and

  	 
	(ii)
	any Subsidiary Shares

in favour of the Purchaser or its nominee(s) (together with the share certificates in respect of the shares (if not already in the possession of the Purchaser) or if the share certificates are found to be missing, an express indemnity, in a form satisfactory to the Purchaser).

  	5.
	Pending registration of the Purchaser or its nominees as the holder of the Sale Shares and the Subsidiary Shares, a duly executed power of attorney in favour of the Purchaser or its nominees generally in respect of the Sale Shares and the Subsidiary Shares and in particular to enable the Purchaser or its nominees to attend and vote at general meetings of the Group Companies.

  	6.
	The common seal and all registers, minute books, and other statutory books, required to be kept by each Group Company pursuant to the Companies Acts 1963 to 2005 made up to the Completion Date and all certificates of incorporation and certificates on change of name of each Group Company.

  	7.
	A copy of the Memorandum and Articles of Association of each Group Company certified by the secretary of that Group Company as a true and complete and accurate copy as at the date of Completion.

  	8.
	Letters in the agreed form duly executed under seal from each of the present directors and secretaries of each Group Company (other than those nominated by the Purchaser) in each case resigning from his office and acknowledging that he has no claim against that Group Company for compensation for loss of office and redundancy, unfair dismissal or otherwise arising from such resignation.

 

 

39

 

  	9.
	All credit cards in the name of or for the account of any Group Company in the possession of any officer or employee of the Company resigning as at the Completion Date.

  	10.
	The written resignation of the auditors of each Group Company in such form as the Purchaser requires incorporating an acknowledgement that they will have no claim against such company in respect of compensation for loss of office or on any account whatsoever including fees for services rendered and incorporating a statement complying with section 185(2) of the Companies Act, 1990 that there are no circumstances connected with the resignation that they consider should be brought to the notice of the members or creditors of such company.

  	11.
	A written acknowledgement from the Vendors on terms satisfactory to the Purchaser acting reasonably acknowledging (i) that no Group Company is indebted to the Vendors or any of them, (ii) that no Vendor is indebted to a Group Company, and (iii) that no Vendor has any claim against any Group Company otherwise than in the ordinary course of business of the Group.

  	12.
	A Deed of Appointment and Removal of Trustees in the agreed form in respect of Conduit Group Retirement Benefit Scheme.

  	13.
	Evidence that all registered charges created by the Group have been discharged or letters to the Purchaser from all relevant bankers or holders of security confirming that the fixed and floating charges created in their favour by the relevant Group Company have not crystallised and will not as result of Completion crystallise.

  	14.
	Tax clearance certificate pursuant to Section 980 of the TCA or a letter from the auditors of the Company (prior to the resignation noted at 10 above) confirming none is required.

  	15.
	The written consent of Anglo Irish Bank to the sale and purchase of the Sale Shares.

  	16.
	A letter from any third party who has provided financial facilities to any Group Company granting all such consents, clearances, or releases which may be necessary in relation to the transactions contemplated herein.

  	18.
	Any further documents which are necessary to implement this Agreement.

 

 

 

 

 

40

 

SCHEDULE 4

WARRANTIES GIVEN BY THE VENDORS

 

 

41

 

FOURTH SCHEDULE

WARRANTIES

O’DONNELL SWEENEY

One Earlsfort Centre

Earlsfort Terrace

Dublin 2

 

 

42

 

TABLE OF CONTENTS

 

  	1
	 
	INFORMATION SUPPLIED AND CAPACITY OF VENDORS 
	 
	1

	2
	 
	SHARE CAPITAL 
	 
	1

	3
	 
	ACCOUNTS AND RECORDS 
	 
	2

	4
	 
	BUSINESS SINCE THE LAST ACCOUNTING DATE 
	 
	5

	5
	 
	TRADING AND CONTRACTUAL ARRANGEMENTS
	 
	6

	6
	 
	ASSETS (OTHER THAN THE PROPERTIES)
	 
	9

	7
	 
	EMPLOYEES AND AGENTS 
	 
	12

	8
	 
	PENSIONS
	 
	15

	9
	 
	INSURANCE
	 
	20

	10
	 
	GRANTS
	 
	21

	11
	 
	CURRENT FINANCIAL POSITION
	 
	21

	12
	 
	DATA PROTECTION
	 
	22

	13
	 
	LEGAL AND REGULATORY COMPLIANCE
	 
	23

	14
	 
	DEFECTIVE AND UNSAFE PRODUCTS / SERVICES
	 
	28

	15
	 
	LITIGATION
	 
	28

	16
	 
	INSOLVENCY
	 
	28

	17
	 
	COMPLIANCE
	 
	29

	18
	 
	ENVIRONMENTAL 
	 
	29

	19
	 
	COMPANIES ACTS AND OTHER LEGISLATION
	 
	31

	20
	 
	EFFECT OF AGREEMENT
	 
	33

	21
	 
	SUBSIDIARIES
	 
	33

	22
	 
	PROPERTIES
	 
	34

	23
	 
	COMPUTER SYSTEMS
	 
	34

	24
	 
	TAXATION 
	 
	35

	25
	 
	DIVIDENDS AND DISTRIBUTIONS
	 
	44

	26
	 
	COMPLIANCE
	 
	45

	27
	 
	CAPITAL GAINS TAX
	 
	47

	28
	 
	STAMP DUTY AND CAPITAL DUTY
	 
	48

	29
	 
	VALUE ADDED TAX
	 
	49

	30
	 
	CAPITAL ACQUISITIONS TAX
	 
	50

	31
	 
	ALLOWANCES / LOSSES 
	 
	50

 

 

43

 

  	1.
	INFORMATION SUPPLIED AND CAPACITY OF VENDORS

  	 
	1.1
	All information contained in this Agreement and all matters contained in the Disclosure Letter and all other information relating to the Group given by any of the Vendors or the Vendors’ Accountants or the Vendors’ Solicitors to the Purchaser or the Purchaser’s Accountants or the Purchaser’s Solicitors is true, accurate and complete in every respect and there is no fact or matter which has not been Disclosed which renders any such matters or information untrue, incomplete or misleading or the disclosure of which might reasonably affect the willingness of the Purchaser to purchase the Sale Shares on the terms of this Agreement.

  	 
	1.2
	The Vendors have full power and authority to enter into and perform this Agreement and the Tax Deed, and this Agreement and the Tax Deed, when executed, will constitute valid and binding obligations on the Vendors in accordance with their respective terms.

  	 
	1.3
	Neither entering into this Agreement or the Tax Deed nor performing the obligations referred to in those agreements has resulted or will result in the breach of any obligation of any of the Vendors under:

  	 
	1.3.1
	statutes, bye laws or other terms of charter or corporate regulation (in the case of the Fund’s);

  	 
	1.3.2
	the memorandum or articles of association, statutes, bye-laws or other terms of charter or corporate regulation of any Group Company;

  	 
	1.3.3
	any law or any order, judgment or decree of any court or governmental agency; or

  	 
	1.3.4
	any contract, undertaking or agreement to which any of the Vendors may be party.

  	2.
	SHARE CAPITAL

  	 
	2.1
	The Sale Shares constitute the whole of the allotted and issued share capital of the Company and are fully paid up.

  	 
	2.2
	The authorised and issued share capital of each Group Company is as set out in the Second Schedule.

  	 
	2.3
	The Vendors are the beneficial owners and registered holders of the Sale Shares which have been issued in proper legal form and each of the Vendors is entitled as beneficial owner to sell such of the Sale Shares as are set out opposite his name in Column 2 of the First Schedule free from all Encumbrances and together with all 

 

 

44

 

rights attached or accruing in or to them as at and from the Last Accounting Date without the consent of any third party.

  	 
	2.4
	The Vendors are entitled to transfer the full legal and beneficial ownership of the Sale Shares and any share in any Group Company to the Purchaser on the terms of this Agreement without the consent of any third party.

  	 
	2.5
	The Company (or where specified a Group Company) is the sole beneficial owner of the shares in each Group Company listed in Part 2 of the Second Schedule free from any Encumbrances.

  	 
	2.6
	No person has the right (whether actual or contingent) to call for the creation, allotment, issue, sale or transfer of any share or loan capital of the Company or any Group Company under any option or other agreement, arrangement or commitment (including without limitation conversion rights and rights on realisation of security) or to require any loan or share capital to be put under option and no person has claimed to be entitled to any of the foregoing.

  	 
	2.7
	Attached to the Disclosure Letter are correct and complete copies of the memoranda and articles of association of each Group Company and of all resolutions and agreements required by section 143(2) of the Companies Act 1963.

  	 
	2.8
	All returns, particulars, resolutions and other documents required to be delivered on behalf of each Group Company to the Registrar of Companies or other authority have been properly made and delivered and were when so made and delivered accurate and complete.

  	 
	2.9
	The statutory books, books of account, registers and other records of each Group Company are up-to-date and maintained in accordance with all applicable legal requirements on a proper and consistent basis and contain complete and accurate records of all matters required to be disclosed or dealt with in them.

  	 
	2.10
	No notice or allegation has been received that any of the statutory books or other records of any Group Company is incorrect or should be rectified.

  	 
	2.11
	All such books, registers and records and all other documents (including copies of all subsisting agreements to which any Group Company is party) which are the property of any Group Company or ought to be in its possession or under its control are in its possession or under its control.

  	 
	2.12.
	No proceedings of any kind have been instituted or threatened and no application of any kind has been made in relation to the Sale Shares or the Company under any of the provisions of the Judicial Separation and Family Law Reform Act 1989, the Family Law Act 1995, and/or the Family Law (Divorce) Act 1996 and the disposal of the Sale Shares pursuant to this Agreement is not a disposal for the purposes of defeating a claim for relief under any such legislation.

 

 

45

 

	 
	2.13
	No act or omission or circumstance has occurred or existed which, by virtue of Section 58 of the 1990 Act has or may have the effect of restricting or prejudicing the title of the Vendors to the Sale Shares or any of them.

  	3
	ACCOUNTS AND RECORDS 

	 
	 Accounting and Other Records

  	 
	3.1
	Each Group Company has at all times fully, properly and accurately maintained all books, accounts and records of whatever kind required by law to be maintained by it.

  	 
	3.2
	The books, accounts and records of whatever kind of each Group Company fully and accurately record all matters required by law to be entered in them and accurately present and reflect, in accordance with generally accepted accounting principles and practices, the assets and liabilities (actual and contingent) of each Group Company and all transactions to which they are or have been a party.

  	 
	3.3
	No notice or allegation has been received that any of those books, accounts or records is incorrect or should be rectified.

  	 
	3.4
	No Group Company has had any of its records, systems, controls, data or information recorded, stored, maintained, operated or otherwise wholly and partly dependent on or held by any means (including any electronic, mechanical or photographic process whether computerised or not) which (including all means of access thereto and there from) are not under the exclusive ownership and direct control of the Company.

Accounts

  	 
	3.5
	The Accounts: 

  	 
	3.5.1
	are true and accurate in all respects, comply with the requirements of the Companies Acts and other relevant statutes and generally accepted accounting principles and Accounting Standards and give a true and fair view of and properly reflect the financial position of the Group as at the Last Accounting Date and are not affected by any unusual or non-recurring items;

  	 
	3.5.2
	fully disclose all assets of the Group and make full provision or reserve for all assets and liabilities (whether or not quantified or disputed) and fully provide for (or disclose by way of note) all contingent liabilities of the Group at the Last Accounting Date;

  	 
	3.5.3
	make adequate provision for depreciation of the fixed assets of the Group having regard to their original cost and estimated life in accordance with the relevant Accounting Standards;

  	 
	3.5.4
	are not affected by any extraordinary, exceptional or non-recurring items not expressly disclosed in the Accounts;

 

 

46

 

  	 
	3.5.5
	note all material capital commitments of the Group of the Last Accounting Date, do not overstate the current or fixed assets (including slow moving or obsolete stock), the valuation and depreciation rates were on the same basis as in previous years and contain prudent provision for bad and doubtful debts.

Valuation of Work-in-Progress

  	 
	3.6
	The accounting policies and bases and the method of valuing work-in-progress used in the Accounts were the same as those adopted in the audited balance sheets and accounts of the Group for the immediately preceding three financial periods. Any non-recoverable work-in-progress included in the Accounts was written down appropriately and the value attributed to the remaining work-in-progress did not exceed the lower of cost and net realisable value as at the Last Accounting Date.

Value of Assets

  	 
	3.7
	The values attributed to the assets of the Group at the Last Accounting Date are such that; 

  	 
	3.7.1
	no claim for corporation tax in respect of any chargeable gain will be made on the Group; and

  	 
	3.7.2
	no balancing charge will be made on the Group;

on any disposal of any such assets or all such assets for a consideration equal to the value of such asset or assets in the Accounts and none of the Group’s assets has been acquired for any consideration in excess of its net realisable value at the date of such acquisition or otherwise than by way of a bargain at arms length.

  	 
	3.8
	Fixed assets have been depreciated in accordance with Accounting Standards in the Accounts hand in each Group Company’s accounts for the preceding two years.

  	 
	3.9
	Full and proper provision or reserve has been made in accordance with Accounting Standards in each Group Company’s balance sheet as at the Last Accounting Date for all Tax liable to be assessed on it or for which it is or may become accountable, including deferred taxation, in respect of:

  	 
	3.9.1
	profits, gains or income (as computed for Tax purposes) which arose or accrued, or are deemed to have arisen or accrued, on or before the Last Accounting Date;

  	 
	3.9.2
	any transactions effected or deemed to have been effected on or before the Last Accounting Date; and

 

 

47

 

  	 
	3.9.3
	distributions made or deemed to have been made on or before the Last Accounting Date.

  	 
	3.10
	Excluding bad and doubtful debts, for which full provision has been made in the Accounts and details of which are set out in the Disclosure Letter, the book debts of each Group Company on Completion will be good for the full face value thereof and, subject to the exercise of due diligence by the Group Companies, will be paid in the ordinary course of business within six calendar months after Completion or two months after the expiration of normal credit terms, whichever is the later.

  	 
	3.11
	Attached to the Disclosure Letter is a correct and complete list and an adequate summary (specifying the Group Company or Group Companies which are liable in each case) of each Group Company’s outstanding borrowings, loan capital, debt factoring, financial leasing and any  other financing in the nature of borrowings, including (without limitation) financing which, because of its nature, is not required to be reflected in statutory accounts.

  	 
	3.12
	There are no liabilities (including contingent liabilities) which are outstanding on the part of any Group Company other than those disclosed or reflected in the Accounts or which have arisen in the normal course of business since the Last Accounting Date.

  	 
	3.13
	The Disclosure Letter comprises a complete list and full particulars of all grants, subsidies, loans or financial assistance received by any Group Company either during the previous three years or where a liability (absolute or contingent) to repay exists, specifying the Group Company or Group Companies which are liable in each case.

  	 
	3.14
	No act or transaction has, been or will be effected (including the sale of the Sale Shares) in consequence of which any Group Company is or may be held liable to forfeit or refund in whole or in part any grant, loan or financial assistance which has been received or applied for.

  	 
	3.15
	No Group Company has any material capital commitments and, pending Completion, no Group Company will undertake any material capital commitments without the Purchaser’s prior written consent (not to be unreasonably withheld).

  	 
	3.16
	The Management Accounts have been carefully and properly prepared in accordance with Accounting Standards and accounting policies consistent with those used in preparing the Accounts and on a basis consistent with the management accounts in the preceding two years. The cumulative profits, assets and liabilities of the Group stated in the Management Accounts have not been misstated and are true and accurate in all respects. 

  	4.
	BUSINESS SINCE THE LAST ACCOUNTING DATE

Since the Last Accounting Date in respect of each Group Company: -

 

 

48

 

  	 
	4.1
	it has carried on its business in the ordinary and usual course both as regards the nature, scope and manner of its conduct and so as to maintain it as a going concern;

  	 
	4.2
	it has not borrowed, raised any money or availed of any financial facility;

  	 
	4.3
	it has paid its creditors within the times agreed with its creditors so that there are no debts outstanding by any Group Company which have been due for more than four weeks;

  	 
	4.4
	it has not entered into any capital commitments or any transaction or agreement for the disposal of any asset (including Intellectual Property Rights) or under which it has incurred or will incur (otherwise than in the ordinary and usual course of carrying on its business) any liabilities (including contingent liabilities) not provided for in the Accounts;

  	 
	4.5
	it has not entered into any unusual, long-term (that is to say, incapable of performance in accordance with its terms within six months after the date on which it was entered into or undertaken) or onerous arrangements, commitments or contracts;

  	 
	4.6
	its business has not been adversely affected by the loss of or material reduction in orders from any customer or the loss of or material reduction in any source of supply or by any abnormal factor not affecting similar businesses to a like extent and none of the Warrantors is aware of any facts which are likely to give rise to any such adverse effects;

  	 
	4.7
	no distribution of capital or income (including for the avoidance of doubt, any dividend) has been declared, made or paid or agreed or resolved to be declared, made or paid by it;

  	 
	4.8
	no loans have been made by it and no loan capital or loan has been or has become liable to be repaid by it in whole or in part;

  	 
	4.9
	no resolutions (whether in general meeting or otherwise) have been passed by it or any class of its members;

  	 
	4.10
	no sum has been paid or voted to any Director or employee (or ex-Director or ex-employee) of it by way of remuneration or otherwise in excess of the rates paid to him by it at the Last Accounting Date and no new service agreements have been entered into by it;

  	 
	4.11
	no alteration has been made in the terms of employment or conditions of service of any officer or any employee or agent of it or in the pension or other benefits of any past officer or employee of it or any of their dependants;

  	 
	4.12
	none of the fixed assets of it shown in the Accounts and none acquired by it since the Last Accounting Date has been lost, damaged or destroyed;

 

 

49

 

  	 
	4.13
	there has been no material adverse change in the financial position or trading prospects or turnover of it nor is any such material change foreseen; and

  	 
	4.14
	it has not waived any right of material value.

  	5
	TRADING AND CONTRACTUAL ARRANGEMENTS 

Ultra Vires

  	 
	5.1
	None of the contracts or obligations entered into by each Group Company is ultra vires that Group Company and no Group Company is in default under any such contracts or obligations.

Contracts

  	 
	5.2
	No Group Company is a party to any contract, transaction, obligation, commitment or liability which, whether by reason of its nature, term, scope, price or otherwise is or may be material in relation to its business, profits or assets or which: 

  	 
	5.2.1
	is in any way otherwise than in the ordinary course of its business;

  	 
	5.2.2
	is of a long term nature (that is to say incapable of performance in accordance with its terms within six months after the date on which it was entered into or undertaken);

  	 
	5.2.3
	is incapable of termination without fine or penalty in accordance with its terms by it on 60 days notice or less;

  	 
	5.2.4
	is of a loss making nature (that is to say known to be likely to result in a loss to it on completion of performance);

  	 
	5.2.5
	cannot readily be fulfilled or performed by it on time without undue or unusual expenditure of money or effort;

  	 
	5.2.6
	involves payment by it by reference to fluctuations in the index of retail prices or any other index or in the rate of exchange for any currency; or

  	 
	5.2.7
	requires an aggregate consideration payable by it in excess of €50,000 in respect of any one contract.

Suppliers and Customers

  	 	5.3
	No supplier or customer (including any person in any way connected with such supplier or customer) has accounted for more than 10 (ten) per cent of the aggregate amount of all purchases or sales of any Group Company in any of the 3 (three) financial periods immediately prior to the Latest Accounts Date and since the Latest Accounts Date no supplier or customer has accounted for more than 10 

 

 

50

 

(ten) per cent of the aggregate purchases or sales effected by any Group Company since the Latest Accounts Date.

  	 
	5.4
	No substantial customer or supplier of any Group Company has during the period commencing 18 (eighteen) months prior to the date hereof ceased or indicated an intention to cease trading with or supplying such Group Company or, so far as the Warrantors are aware, is likely to reduce substantially its trading with or supply to such Group Company and so far as the Warrantors are aware the attitude or actions of customers, suppliers and employees with regard to each Group Company will not be prejudicially affected by the execution or completion of this Agreement.

  	 
	5.5
	No Group Company has during the period commencing 18 (eighteen) months prior to the date hereof been and, so far as the Warrantors are aware, is not likely to be materially and adversely affected by the loss of any important customer or supplier or by any abnormal fact in relation to a customer or supplier or by any disputed matter which would adversely effect its relationship with any of its customers or suppliers.

Guarantees

  	 
	5.6
	No Group Company has agreed to become bound by any debenture or guarantee or contract for indemnity or suretyship or any like undertaking and there is not now outstanding any guarantee or contract for indemnity or suretyship or like undertaking given for the accommodation of or in respect of any obligation on the part of any Group Company.

Contracts, Etc. with Connected Persons

  	 
	5.7
	No sums of whatever nature are owing by any Group Company to any of the Vendors or any of the Directors or any person being a Connected Person of the Vendors or the Directors or any of them respectively.

  	 
	5.8
	No Group Company has been a party to any transaction to which any of the provisions of sections 29 (substantial property transactions involving Directors), or 31 (general restrictions on loans, etc. to Directors and persons connected with them) of the 1990 Act applies.

  	 
	5.9
	None of the Vendors nor any person who is a Connected Person in relation to any Vendor has any direct or indirect interest with any business which has a close trading relationship with that of any Group Company or which is or is likely to become competitive with the business of and Group Company.

  	 
	5.10
	There are no outstanding arrangements or understandings (whether legally binding or not) between any Group Company and any person who is a shareholder (or the beneficial owner of any interest in the Company or in any Group Company or in any company in which the Company is interested) or any person who is a Connected Person of any such person relating to the management 

 

 

51

 

of any Group Company’s business, or the appointment or removal of the Directors, or the ownership or transfer of ownership, or the letting of any of the assets of any Group Company, or the provision, supply, purchase or finance of goods, services or other facilities to, by or from any Group Company or otherwise howsoever in relation to each of the Group Company’s affairs.

Joint Ventures, Partnerships, Etc.

  	 
	5.11
	No Group Company:

  	 
	5.11.1
	has or has ever had any interest in or agreed to enter into any association, partnership, consortium, joint venture or similar arrangement with any other entity or in any agreement or arrangement for sharing business, commissions or other income relating to the business of any Group Company; or 

  	 
	5.11.2
	is a member of any partnership, trade association, society or other group, whether formal or informal and whether or not having a separate legal entity, in connection with the business of the Group Companies and no such body is relevant to or has any material influence over the business of the Group Companies.

Commissions and Finders Fees

  	 
	5.12
	No person is entitled to receive from any Group Company any finder’s fee, brokerage or commission in connection with the sale of the Sale Shares to the Purchaser.

Power of Attorney

  	 
	5.13
	No Group Company has given any power of attorney or similar authority which remains in force.

  	 
	5.14
	No person (except only officers and employees of the Company) is entitled or authorised whether as agent or otherwise to bind or commit the Company or any other Group Company to any obligation.

Restrictive Contracts

  	 
	5.15
	No Group Company has entered into or agreed to enter into any selling, purchasing, manufacturing or licensing agreement or arrangement or any agreement or arrangement which in any way restricts the freedom of it to carry on its business or any part of it in any part of the world in such manner as it may think fit.

 

 

52

 

Business Names

  	 
	5.16
	No Group Company carries on or has carried on business under any name other than its own corporate name. No Group Company is carrying on or has at any stage carried on business anywhere other than Ireland. No Group Company carries on any business other than the Business.

Warranty and Indemnity Obligations

  	 
	5.17
	No Group Company has sold or otherwise disposed of any assets or agreed to provide any services 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 sale or disposal or the provision of such services.

  	6
	ASSETS (OTHER THAN THE PROPERTIES)

Title to Assets

  	 
	6.1
	The assets included in the Accounts or Acquired since the Last Accounting Date are fully and accurately disclosed in the Disclosure Letter and all assets used by each Group Company: 

  	 
	6.1.1
	are legally and beneficially owned by that Group Company free from any Encumbrance or any agreement or commitment to give or create, or any claim by any person to be entitled to any, Encumbrance;

  	 
	6.1.2
	are not the subject of any agreement for lease, hire, hire purchase, conditional purchaser or sale on deferred terms;

  	 
	6.1.3
	are in the possession and under the control of that Group Company; and

  	 
	6.1.4
	comprise all the assets necessary to enable that Group Company to carry on its business fully and effectively in the ordinary course.

  	 
	6.2
	No Group Company has acquired or agreed to acquire any asset on terms that the property in it does not pass until full payment is made or all indebtedness is discharged.

  	 
	6.3
	In relation to any asset belonging to a third party which is held by any Group Company under any agreement for hire purchase, conditional sale, chattel leasing or retention of title or otherwise, no event has occurred which entitles or which upon intervention or notice by any third party may entitle any such third party to repossess the asset concerned, or to terminate the agreement or any licence in respect of that asset.

Plant and Machinery

  	 
	6.4
	The fixed and loose plant, machinery, furniture, fixtures, fittings and equipment, vehicles and other moveable assets used in connection with each Group 

 

 

53

 

Company’s business (including the assets referred to in warranty 6.1) are not surplus to requirements and are in good repair and condition and satisfactory working order and are all capable and (subject to normal wear and tear) will remain capable throughout the respective periods of time (during which they are each written down to a nil value in the accounts of that Group Company) of doing the works for which they were designed or acquired and are not expected to require repair, replacement or addition at an aggregated cost in excess of €50,000 within the period of twelve months immediately after Completion.

Subsidiaries, Associates and Branches

  	 
	6.5
	Save in respect of the Subsidiaries neither the Company nor any other Group Company: 

  	 
	6.5.1
	is or has ever been the holder or beneficial owner of, nor has it agreed to acquire, any share or loan capital of any other company (whether incorporated in Ireland or elsewhere);

  	 
	6.5.2
	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); and 

  	 
	6.5.3
	does not have, nor has it had, any associated company (that is to say a company which fails to be treated as such for the purposes of the relevant Accounting Standard).

Leasing Rentals

  	 
	6.6
	Rentals payable by any Group Company in relation to any leasing or similar agreement to which it is a party have not been and are not likely to be increased.

Debts

  	 
	6.7
	No Group Company is entitled to the benefit of any debt otherwise than as the original creditor and is not and has not agreed to become a party to any factoring or discounting arrangement.

  	 
	6.8
	None of the debts due at the Last Accounting Date remain unpaid at the date of this Agreement, nor has any debt which has subsequently become due to any Group Company (or any part of any such debt) remained unpaid for more than three months after the due date for payment of it or been released or written off or proved to be irrecoverable, nor is any such debt now regarded as irrecoverable  and all the debts owing to the Group Companies at Completion will be paid in full in the ordinary course of business and in any event not later than three months after Completion.

 

 

54

 

Intellectual Property

  	 
	6.9
	Full details of all Intellectual Property Rights are set out in the Disclosure Letter.

  	 
	6.10
	In relation to the Intellectual Property Rights, they are all or (where appropriate in the case of pending applications for the same) will all be: 

  	 
	6.10.1
	valid, binding and enforceable and not subject to attack or opposition; and

  	 
	6.10.2
	either legally and beneficially owned by and registered, vested and/or in the possession of or under control of the Group or are the subject of binding and enforceable licences from third parties (full particulars of which have been Disclosed) which are in full force and effect and in respect of which

  	 
	(a)
	no notice has been given to terminate the same

  	 
	(b)
	the obligations of all parties thereto have been fully complied with and

  	 	(c)
	no disputes have arisen or are foreseeable in relation thereto. 

	 
	6.10.3
	Not subject to any Encumbrance.

  	 
	6.11
	Save in respect of the Intellectual Property Rights: 

  	 
	6.11.1
	the Group does not own or use any Intellectual Property;

  	 
	6.11.2
	none of the processes employed or products or services dealt in by the Group embodies or infringes any rights relating to Intellectual Property.

  	 
	6.12
	The Group has not disclosed (except in the ordinary course of its business and subject to binding agreements which protect and preserve its confidentiality) to any of its know-how, trade secrets, lists of customers or other confidential information to any other person except the Purchaser and its advisers. The Group is entitled to use all confidential information in its possession and is not subject to any restrictions as to its use.

  	 
	6.13
	No claims have been made against the Group nor, to the best of the Warrantors’ knowledge, information and belief, are pending or threatened, nor have any applications been made by any person in relation to the Intellectual Property Rights which, if pursued or granted, would or might have a material effect on the Group or on the operation and conduct of its business.

  	 
	6.14
	No Group Company is in breach of any licence to use any third party’s Intellectual Property and no Group Company has any obligation to pay on or after the date hereof any royalties and/or licence fees in respect of its use of any Intellectual Property.

  	 
	6.15
	No Intellectual Property other than the Intellectual Property Rights is necessary to enable the Group to carry on its business in the ordinary course.

 

 

55

 

  	 
	6.16
	No Intellectual Property Rights are now or have ever been licensed to any third party.

  	 
	6.17
	A Group Company is the sole and exclusive owner of all right, title and interest in and to the Domain Names and the Domain Names are not subject to any contract for sale, licence, Encumbrance, claim, proceedings, demand, restriction or investigation of any kind.

  	 
	6.18 
	The Disclosure Letter sets out details of all secrecy, confidentiality, non-disclosure and non-competition agreements or arrangements and all other agreements or arrangements relating to the protection of Intellectual Property and any material variation to such agreements (or forms thereof).

  	7
	EMPLOYEES AND AGENTS

Particulars of Employees and Terms of Employment

  	 
	7.1
	The names of all employees, officers, consultants and agents of each Group Company together with copies of all contracts of service, contracts for services, letters of engagement, staff handbooks, memoranda or other documentation containing terms of service, and full particulars of the current and past terms of employment as required under the Terms of Employment (Information) Act 1994 — 2001 of all such employees, officers, consultants and agents of each Group Company have been Disclosed.

  	 
	7.2
	There is not now outstanding any contract of service or for services between any Group Company and any of its officers, employees, consultants or agents which is not determinable by that Group Company at any time on six months’ notice or less without compensation (other than liability for accrued salary, wages, commission or pensions) on the part of that Group Company to or for the benefit of any person who is or has been an officer, employee, consultant or agent of that Group Company.

  	 
	7.3
	No present officer, employee, consultant or agent of any Group Company has given or received notice terminating his employment or appointment and no such officer, employee, consultant or agent is entitled nor (so far as any of the Warrantors is aware) intends or is likely as a result of this Agreement or Completion to terminate his employment or appointment with that Group Company.

Liabilities to and for Employees

  	 
	7.4
	No Group Company has since the Last Accounting Date paid or agreed to pay remuneration or compensation for loss of office or made or agreed to make any gratuitous payment to or for the benefit of any of its present or former officers or employees which will not be deductible from the profits of that Group Company in computing corporation tax payable by that Group Company.

 

 

56

 

  	 
	7.5
	Full particulars are Disclosed of all loans and other benefits enjoyed by any officer, employee or agent of any Group Company.

  	 
	7.6
	Save for the Pension Scheme no Group Company is under any legal liability or obligation to pay bonuses, pensions, gratuities, superannuation, allowances or the like to any of its past or present officers or employees or their dependants nor is it a party to any arrangements or promise to make or in the habit of making ex gratia or voluntary payments by way of bonus, pension, gratuity, superannuation, allowance or the like to any such persons and there are no schemes or arrangements for payment of retirement pension or death benefit or similar schemes or arrangements in operation or contemplated in relation to that Group Company.

  	 
	7.7
	No Group Company is liable to pay any industrial training levy nor has outstanding any undischarged liability to pay to any government or regulatory authority in any jurisdiction any Taxation or social insurance arising in connection with the employment or engagement of employees or directors by it.

  	 
	7.8
	Save to the extent (if any) to which provision or allowance has been made in the Accounts no liability has been incurred by any Group Company to make any redundancy payments or to pay damages or compensation for wrongful or unfair dismissal or for failure to comply with any order for the reinstatement or re-engagement of any employee and no gratuitous payment has been made or promised by any Group Company in connection with the actual or proposed termination or suspension of employment or variation of any contract of employment of any present or former director or employee.

  	 
	7.9
	Save to the extent (if any) to which provision or allowance has been made in the Accounts no liability has been incurred by any Group Company to pay damages or compensation for any breaches of the Employment Equality Acts 1963 and 2004 and no gratuitous payment has been made or promised by any Group Company in connection with the actual or proposed settlement of any such claim.

  	 
	7.10
	There are no claims pending or threatened against any Group Company (and no Group Company is aware of any circumstance which might give rise to the making of any such claim) by any employee or former employee or workman or third party in respect of an accident or injury which is not fully covered by insurance or by any employee, former employee, director or former director in relation to his terms and conditions of employment or appointment.

  	 
	7.11
	There are no claims pending or threatened against any Group Company (and no Group Company is aware of any circumstance which might give rise to the making of any such claim) by any employee or former employee or person refused employment by a Group Company or third party in respect of an action under the legislation as set out in Warranty 7.11 connected to the employment or non employment of that person.

 

 

57

 

Compliance with Employment Law Legislation

  	 
	7.12
	Each Group Company has complied in all respects as regards all of its employees with all relevant policies, codes of conduct, collective agreements, customs and practices and all legal obligations including European Union Directives and Regulations and with all Statutes, Statutory Instruments and Employment Regulation Orders, and orders made or awarded under them. In particular, but without limitation of the generality of the foregoing, the Company has complied with (if applicable) the (non exhaustive) list of legislation set out hereunder: -

The Redundancy Payments Acts1967 to 2003, the Minimum Notice and Terms of Employment Acts 1973 to 2001, the Protection of Young Persons (Employment) Act 1996, the Unfair Dismissals Acts 1977 to 2001, the Worker Participation (State Enterprises) Acts 1977 to 2001, the Protection of Employment Act 1977 (as amended), the European Communities (Protection Of Employees On Transfer Of Undertakings) Regulations 2003, the Maternity Protection Acts 1994 and 2004, the Protection of Employees (Employers’ Insolvency) Acts 1984 to 2001, the Organisation of Working Time Act 1997, the Adoptive Leave Act 1995, the Competition Act 2002, the Protection for Persons reporting Child Abuse Act 1998, the Data Protection Acts 1988 and 2003, the European Communities (Data Protection) Regulations 2001, the Parental Leave Act 2001, the Parental Leave Act 1998, the Juries Act 1976, the Payment of Wages Act 1991, the
National Minimum Wage Act 2000, the Terms of Employment (Information) Act 1994 to 2001, the Industrial Relations Acts 1946 to 2001, and the Employment Equality Acts 1998 and 2004.

Labour Relations

  	 
	7.13
	No Group Company has recognised any trade union or any other organisation of employees in respect of its employees or any of them in any respect.

  	 
	7.14
	No Group Company is a party to any collective agreement or other similar agreement or arrangement and is not involved or likely to be involved in any industrial or trade dispute or negotiation with any trade union or other organisation of employees.

  	 
	7.15
	No employment regulation order affecting the terms of employment of any employee of any Group Company has been made by the Labour Court.

  	 
	7.16
	No industrial action has been taken within the last two years between any Group Company and a material number or category of its employees.

Share Incentive, Bonus Schemes, Etc.

  	 
	7.17
	No Group Company has in existence nor is proposing to introduce any share incentive scheme, share option scheme or profit sharing scheme or any other scheme analogous to any of those schemes for all or any of its directors, officers or employees.

 

 

58

 

 

Compliance with Health and Safety Law Legislation

 

  	 
	7.18
	Each Group Company has compiled in all respects and will at completion have so complied as regards all of its Employees with all relevant European Union Directives and Regulations and with all Statues, Statutory Instruments and Employment Regulation Orders, and orders made or awarded under them. In particular the company has complied with (if applicable) the (non exhaustive) list of legislation set out hereunder: 

The Safety Health and Welfare at Work Act 2005, the Safety, Health and Welfare at Work (General Application) Regulations 1993 to 2001, the Safety, Health and Welfare at Work (Carcinogens) Regulations 1993 to 2001, the Safety, Health and Welfare at Work (Biological Agents) Regulations 1994 to 1998, the Safety, Health and Welfare at Work (Chemical Agents) Regulations 1994, the Safety, Health and Welfare at Work (Signs) Regulations 1995, the Safety, Health and Welfare at Work (Miscellaneous Welfare Provisions ) Regulations 1995, the Safety, Health and Welfare at Work (Children and Young Persons) Regulations 1998, the Safety, Health and Welfare at Work ( Night Work and Shift Work) Regulations, the Safety, Health and Welfare at Work (Pregnant Employees) Regulations 2000, the Safety, Health and Welfare at Work (Confined Spaces) Regulations 2001 and the Safety, Health and Welfare at
Work (Construction) Regulations 2001.    

Transfer of Undertakings

  	 
	7.19
	In the one year period preceding the date of this Agreement, no Group Company has given or has been required to give notice under Regulation 8 of the European Communities (Protection of Employees on Transfer of undertakings) Regulations 2003.

Industrial Disputes and Negotiations

  	 
	7.20
	Each Group Company has complied with all recommendations made by Industrial Relations Officers of the Labour Relations Commission, by Rights Commissioners, Equality Officers, or by the Labour Court.

  	 
	7.21
	No Group Company is involved in any material industrial or trade dispute, or negotiation regarding a claim, with any trade union or other group or organisation representing employees, and there are no facts known, or which would on reasonable enquiry be known, to the Warrantors which might indicate that there may be arty such dispute.

Offer of Employment

  	 
	7.22
	No offers have been made to prospective employees, consultants, apprentices or trainees which have not been accepted or which have been accepted but who have not yet commenced employment with or provided services to any Group Company.

Redundancy

  	 
	7.23
	No redundancy policy exists for any Group Company and there have been no redundancies in any Group Company.

Consultants

  	 
	7.24
	The Company has discharged all of its liabilities to Taxation in respect of the engagement by the Company of any consultants. None of the consultants could, 

 

 

59

 

 

under the rules of the Revenue or of the Courts for such matters be considered employees of the Company.

  	8.
	PENSIONS

Pension Schemes and PHI Schemes

  	 
	8.1
	The Disclosure Letter contains a complete and accurate list and a fair summary of all retirement or death benefit schemes or permanent health insurance schemes of each Group Company.

  	 
	8.2
	True and complete copies have been supplied to the Purchaser of:

  	 
	8.2.1
	all trust deeds and rules constituting and governing each Pension Scheme and each PHI Scheme;

  	 
	8.2.2
	all material announcements, booklets and other explanatory literature or communications issued to members of each Pension Scheme and each PHI Scheme;

  	 	8.2.3
	the most recent annual report of each Pension Scheme; 

	 
	8.2.4
	A complete list has been supplied to the Purchaser of:

  	 
	(a)
	the present employees and officers of each Group Company who are members of each Pension Scheme (including as may be appropriate current members, deferred pensioners and pensioners), and

  	 
	(b)
	of those employees and officers of each Group Company who will, if they remain in service, become eligible for membership of each Pension Scheme and of each PHI Scheme; and

  	 
	8.2.5
	any undertakings in relation to each Pension Scheme given to the Revenue Commissioners and all notifications of approval of each Pension Scheme by the Revenue Commissioners.

  	 
	8.3
	All documentation relating•4tb each Pension Scheme and PHI Scheme is up-to-date, reflects the material terms of the Pension Scheme and PHI Scheme as announced to employees and officers of each Group Company and members of the Pension Scheme or PHI Scheme and as operated in practice.

Discretionary Practices

  	 
	8.4
	Full details in writing are set out in the Disclosure Letter of:

  	 
	8.4.1
	all material discretionary practices in relation to each Pension Scheme (including, without limitation, those in relation to eligibility, the payment and receipt of. transfer amounts, increases in pensions in payment and in 

 

 

60

 

 

deferment, optional benefits and augmentation of benefits) and each PHI Scheme; and

  	 
	8.4.2
	the current terms applicable on early retirement (voluntary or as a result of ill health or redundancy), late retirement, commutation, optional dependant’s pension and other optional arrangements under each Pension Scheme.

  	 	8.5
	Save as Disclosed no power or discretion has been exercised:

  	 
	8.5.1
	to admit to membership of any Pension Scheme or any PHI Scheme an employee or officer who would not otherwise have been eligible for membership thereof; or

  	 
	8.5.2
	to pay a contribution to any Pension Scheme which would not otherwise have been paid; or

  	 	 
	8.5.3
	to augment or provide in respect of any past or present employee or officer of the Company or any beneficiary of any Pension Scheme or dependant or beneficiary of any such person a benefit which would not otherwise have been augmented or provided under a Pension Scheme; or

  	 	 
	8.5.4
	to administer any transfer amount received into any Pension Scheme on a defined benefit basis.

Company’s Obligations

  	 
	8.6
	With the exception of the Pension Schemes and PHI Schemes:

  	 	 	8.6.1
	none of the Vendors nor any Group Company:

	 	 
	(a)
	has any legal or other liability or obligation (including any obligation established by custom), or

  	 	 
	(b)
	has made any promise, representation or ex gratia arrangement which it would be required to implement in accordance with good industrial relations practice, whether or not there is any legal obligation to do so,

to pay pensions, gratuities, superannuation allowances, death or disability benefits or the like to any past or present employee or officer of a Group Company or any dependant pr beneficiary of any such person, or to establish, or to pay or contribute to, .any scheme or arrangement for the provision of benefits as aforesaid;

  	 	 
	8.6.2
	no Group Company is or has been, a party to any scheme or arrangement having as its purpose or one of its purposes the making of payments or the provision of benefits as aforesaid;

 

 

61

 

 

  	 	 
	8.6.3
	no proposal has been announced to pay benefits as aforesaid, or to establish or contribute to any scheme for the provision of benefits as aforesaid.

  	 	8.7
	No Group Company has any obligation under any Pension Scheme in respect of any past or present employee or officer or any dependant or beneficiary of any of them, other than under the documents referred to in Warranty 8.2, which contain full and materially accurate details of the benefits payable under each Pension Scheme and PHI Scheme.

  	 	8.8
	There are currently no plans to amend or wholly or partly terminate any Pension Scheme or to alter any benefits or to introduce any new benefits, and any such plans which have in the past been communicated to any current employee or officer of the Company have been implemented and are fully documented in the documents referred to in Warranty 8.2.

  	 	8.9
	Other than as provided in the trust deeds governing each Pension Scheme disclosed under Warranty 8.2.1, neither the Vendor nor any Group Company has indemnified the trustees of the Pension Scheme or anyone else against any liabilities of whatsoever nature in connection with the Pension Scheme.

  	 	8.10
	The Company has complied with all relevant access requirements under the Pensions Act 1990 regarding PRSAs (as defined under the Pensions Act 1990).

Defined Contribution Schemes

  	 	8.11
	In relation to each Pension Scheme which is a defined contribution scheme as defined under the Pensions Act 1990 (a “defined contribution scheme”):

  	 
	8.11.1
	the Purchaser has been notified of the rate at which contributions to the Pension Scheme have been paid in respect of each member of the Pension Scheme and the basis on which they are calculated and whether they are paid in advance or in arrear, and the only liability (actual or contingent, present or future) of a Group Company to any employee or officer in respect of the Pension Scheme is to contribute the amount so notified as payable by that Group Company;

  	 
	8.11.2
	no assurance, promise or guarantee (oral or written) has been made or given to any present or past member of the Pension Scheme of a particular rate, level or amount of benefits (other than insured lump sum death benefits) to be provided for or in respect of him under the Pension Scheme;

  	 
	8.11.3
	all contributions due to the Pension Scheme have been paid in full by the due date for payment and within the time limits laid down by the Pensions Act 1990;

 

 

62

 

 

  	 	 
	8.11.4
	the Pension Scheme was established as a defined contribution scheme, and has not previously been converted from a defined benefit scheme, and was not established in succession to a defined benefit scheme relating to the same employment; and

  	 	 
	8.11.5
	the Pension Scheme does not provide for investment of the resources of the Pension Scheme in accordance with the directions of the members.

Compliance by the Schemes

  	 
	8.12
	Each Pension Scheme is an exempt approved scheme within the meaning of Chapter 1 of Part 30 of the TCA. The documentation referred to in Warranty 8.2 is satisfactory in the case of each Pension Scheme to ensure continued treatment of the Pension Scheme as an exempt approved scheme.

  	 
	8.13
	Each Pension Scheme is registered with the Pensions Board as required by the Pensions Act 1990.

  	 
	8.14
	Each Pension Scheme has at all times complied with and been duly administered in accordance with all applicable legislation, regulations and requirements including (without limitation):

  	 
	8.15.1
	the provisions of the Pensions Act 1990 (and any regulations made thereunder);

  	 
	8.15.2
	the requirements of the Large Cases Division Financial Services (Pensions) of the Revenue Commissioners for exempt approval and the requirements of the Pensions Board; and

  	 
	8.15.3
	the documentation by which it is constituted and governed.

  	 	8.15
	Each PHI Scheme has at all times complied with and been duly administered in accordance with all applicable legislation, regulations and requirements including (without limitation) the documentation by which it is constituted and governed.

  	 	8.16
	No Pension Scheme or PHI Scheme contains any provision, and no power or discretion under any Pension Scheme or PHI Scheme has been exercised in a fashion, that gives rise or could give rise to a claim against any Group Company, any employer participating in the Pension Scheme or the PHI Scheme or the trustees of the Pension Scheme under Article 141 (formerly Article 119) of the Treaty of Rome or the Anti-Discrimination Pay Act 1974 or Part VII of the Pensions Act 1990.

  	 	8.17
	The Occupational Pension, Schemes (Member Participation in the Selection of Persons for Appointment as Trustees) (No. 3) Regulations, 1996, have never been invoked in respect of any Pension Scheme.

 

 

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  	 	8.18
	No event has taken place which would, cause any Pension Scheme to wind up or to become closed to new entrants.

Membership

  	 
	8.19
	Every employee and officer of a Group Company who is obliged to be a member of any pension Scheme has; been a member since the date on which he became so obliged, and every employee and officer of a Group Company who is entitled to membership of any Pension Scheme or any PHI Scheme has been invited to Join the Pension Scheme and has been a member of the PHI Scheme as of the date on which he became so entitled.

Participating Companies

  	 
	8.20.1
	Full details in writing have been Disclosed of any employers other than the Company participating in any Pension Scheme or PHI Scheme either now or in the past, 

  	 
	8.20.2
	There are no employers participating on a temporary basis in any Pension Scheme and there are no arrangements outstanding in relation to the making of any bulk transfer payment from any Pension Scheme.

Pension Scheme Investments

  	 
	8.20
	The trustees of the Pension Scheme have legal title to each asset of the Pension Scheme. None of the assets of any Pension Scheme are mortgaged, charged or otherwise subjected to any encumbrance.

Insurance Cover

  	 
	8.21
	All benefits payable under any Pension Scheme on the death of a member thereof while in an employment to which the Pension Scheme relates or payable under any Pension Scheme and/or PHI Scheme during a period of sickness or disability of a member thereof (other than a refund of contributions with interest where appropriate) are fully insured under policies effected with a life office authorised to carry on life assurance business in Ireland at its normal rates and on its normal terms for persons in good health, and all insurance premiums payable have been paid;

  	 
	8.22
	Such policies are enforceable and there are no grounds on which the life office might avoid liability thereunder.

Claims and Disputes

  	 
	8.23
	No actions suits or claims’ (other than routine claims for benefits) have been made or are pending or threatened in respect of any Pension Scheme by or against the trustees of the Pension Scheme, or the Company or any employer participating in any Pension Scheme or in respect of any PHI Scheme.

 

 

64

 

 

  	 
	8.24
	There is no dispute about benefits payable under any Pension Scheme or PHI Scheme.

  	 
	8.25
	No complaint or report about any Pension Scheme has ever been made to the Pensions Board (other than routine registration and returns).

  	 
	8.26
	There is no claim in payment under any PHI Scheme.

  	 
	8.27
	There are no circumstances which might give rise to any such action, suit, claim or dispute under any Pension Scheme or PHI Scheme.

Interpretation

  	 
	8.28
	References to the Pensions Act 1990 in these Warranties include that Act as amended, substituted or varied by all subsequent enactments prior to and including the date on which these Warranties are given or repeated.

  	9.
	INSURANCE

  	 
	9.1
	Each Group Company is ‘fully covered by valid insurances against all risks normally insured against by prudent persons carrying on the same or similar businesses as those carried on by that Group Company and in particular. all assets are and have at all material times been insured to their full replacement or reinstatement value against fire and such other risks as aforesaid and that Group Company is, and has at all material times been adequately covered against accident, damage, injury, third party loss (including product liability), loss of profits and other risks normally insured against by prudent persons carrying on the same or similar businesses as those carried on by that Group Company.

  	 
	9.2
	Full particulars of all such insurances have been Disclosed and there are no outstanding claims or circumstances likely to give rise to a claim under them and nothing has been done or omitted to be done which has made or could make any policy of insurance void or voidable or give grounds for an increase in the premiums for it.

  	 
	9.3
	None of the said policies is subject to any special or unusual terms or restrictions or to the payment of any premium in excess of the normal rate.

  	 
	9.4
	In respect of all insurances held by any Group Company:

  	 
	9.4.1
	all premiums have been duly paid to date; 

  	 
	9.4.2
	no circumstances in relation to any Group Company or its affairs have arisen in the past ten years which have given rise to a specific increase in premium; 

  	 
	9.4.3
	there are no special or unusual terms or restrictions, the premiums payable are not in excess of the normal rates for similar cover in similar businesses 

 

 

65

 

 

for property of a similar nature and no circumstances exist which are likely to give rise to any increase in premiums; and         

  	 	 
	9.4.4
	no claim is outstanding and no circumstances exist which are likely to give rise to any claim.

  	10
	GRANTS

  	 
	10.1
	Full particulars are Disclosed of. all investment and other grants and allowances and of all loans or financial aid of any kind applied for or received or receivable by any Group Company from any governmental department, board, body or agency or any other supranational or national or local authority body or agency.

  	 
	10.2
	No Group Company is under any current actual liability to repay any investment or other grantor subsidy made to it by any governmental or quasi-governmental body; so far as management of the Company are aware, no circumstances have arisen in which any such body would or might be entitled to require repayment of any such grant or subsidy either in whole or in part.

  	11
	CURRENT FINANCIAL POSITION

Reserves, etc.

  	 
	11.1
	The amount of the share capital and reserves and deferred tax of each Group Company as at the Completion Date (calculated on the same accounting principles, bases and assumptions as those used in preparing the Accounts and without bringing into account any surplus arising from any revaluation of any assets included in the Accounts) will not be less than the amount attributed to them in the Accounts.

Profits

  	 
	11.2
	The profits of each Group Company for the three years ended on the Last Accounting Date as shown by its audited accounts and the trend of profits shown by those accounts were not (except as expressly disclosed in them) to a material extent affected by any unusual or non-recurring items of income or expenditure, by transactions entered into otherwise than on normal commercial terms or by any other factor rendering the profits of all or any of those years exceptionally high or low.

Borrowings

  	 
	11.3
	The amounts borrowed by each Group Company do not exceed any limitation on the directors’ borrowing powers contained in its Articles of Association nor do any such borrowings breach any of the provisions contained in any debenture or other deed or document binding upon that Group Company.

 

 

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Banking Facilities

  	 
	11.4
	Full details of all overdrafts, loans or other financial facilities outstanding or available to each Group Company and of all its bank and deposit accounts and true and correct copies of all documents relating to them are Disclosed and nothing has been done or omitted whereby the continuance in full force and effect of any such facilities might be adversely affected or prejudiced.

Off Balance Sheet Financing

  	 
	11.5
	No Group Company has engaged in any borrowing or financing not required to be reflected in its audited accounts.

Working Capital

  	 
	11.6
	Having regard to existing bank and other facilities each Group Company has sufficient working capital for the purposes of continuing to carry on its business in its present form and its present level of turnover for the foreseeable future and for the purposes of executing, carrying out and fulfilling in accordance with their terms all orders, projects, and ‘contractual obligations which have been placed with or undertaken by that Group Company.

  	12
	DATA PROTECTION

Data Protection

  	 
	12.1
	Each Group Company has complied in all respects with the requirements and principles set out in the Data Protection Acts 1988 and 2003 and all regulations made thereunder and all other data protection legislation that applies to that Group Company in Ireland or elsewhere and in particular but without limitation to the generality of the foregoing, each Group Company has complied with all registration requirements under such legislation and copies of all such registrations are attached to the Disclosure Letter.

  	 
	12.2
	Each Group Company’s data control, data processing and other procedures in relation to personal data are in compliance with the obligations and requirements set out in the Data Protection (Amendment) Act 2003 which gives effect to Directive 95146/Ell of the European Parliament and the Council of 24’” October, 1995, on the protection of individuals with regard to the processing of personal data and on the free movement of such data (the “Directive”) and each Group Company’s data control, data processing systems and other procedures do not involve subjecting data subjects to automated individual decisions.

  	 
	12.3
	No Group Company has received any complaint or any threat of a complaint that any Group Company has failed to comply with any of the requirements set out in the Data Protection Acts 1988 and 2003 and/or the Directive and/or any other applicable legislation or regulation relating to the protection of personal data and no person has made any request to any Group Company, pursuant to any such regulations or legislation or otherwise to establish the existence of personal data, to exercise their right of access to their personal data, to exercise their right of 

 

 

67

 

 

rectification or erasure of their personal data, to exercise their right to have their name removed from a . mailing list or otherwise in connection with personal data.

  	 
	12.4
	No Group Company has transferred any personal data controlled by it out of Ireland and no data processing is carried on by or on behalf of any Group Company other than in Ireland.

  	 
	12.5
	Any data processing carried on by third parties on behalf of any Group Company, is carried on by third parties pursuant to written agreements with them which incorporate adequate protections and guarantees in respect of security measures and organisational measures governing such processing and such agreements incorporate the requirements set out in the Data Protection Acts and the Directive including, without limitation, Article 17 of the Directive.

  	 
	12.6
	Each Group Company’s records, data and software are backed up on disk at regular intervals (at least once daily) and such disks are securely and appropriately stored off-site.

  	13
	LEGAL AND REGULATORY COMPLIANCE

Compliance with the Law

  	 
	13.1
	Each Group Company has carried on its business in all material respects in accordance with applicable laws, regulations and bye-laws in Ireland and all foreign countries, and there is no investigation or enquiry by, or order, decree or judgment of, any court, governmental agency or regulatory body outstanding against any Group Company which may have a material adverse effect upon its assets or business.

Licences and Consents

  	 
	13.2
	All statutory, municipal and other licences, authorisations, consents, permits and authorities necessary or desirable for the carrying on of the business and activities of each Group Company as now carried on have been obtained and are valid and subsisting and all conditions thereof have been complied with in all material respects, and none of them are likely to be suspended, cancelled, revised, refused or revoked.

Compliance with Agreements

  	 
	13.3
	The terms of all leases, tenancies, licences, concessions and agreements of whatsoever nature to which any Group Company is party have been duly complied with by all the parties thereto and there are no circumstances to give rise to any non-compliance.

 

 

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Competition - General

  	 
	13.4
	There is not, nor has there at any time been, in existence in connection with the business of any Group Company any agreement arrangement or practice which infringes, infringed or which has or should have been registered under the Restrictive Practices Act 1972 to 1987 (as amended) or which infringes, infringed, or which has or should have been notified to the Minister for Trade, Enterprise and Employment, the Competition Authority and/or European Commission under the Mergers, Takeovers and Monopolies (Control) Act 1978 (as amended) (the “ Mergers Act”), the Competition Act 1991 (as amended), the Competition Act 2002 and/or Articles 81 or 82 of the Treaty of  Rome (or any regulations or directive made thereunder).

Undertakings and Orders

  	 
	13.5
	No Group Company has 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 no Group Company is affected by any order or regulations made by the Competition Authority or by any decision made by the Commission of the European Communities.

Investigations

  	 
	13.6
	No Group Company has received any process, notice or communication formal or informal by or on behalf of the Ombudsman, the Director of Consumer Affairs, the Competition Authority or the European Commission, or any other competition regulatory or governmental authority of Ireland or any other country, relating to any aspect of the business of a Group Company, nor has any agreement, arrangement or conduct (whether by omission or otherwise) of a Group Company been the subject of an investigation, report or decision by any of the previously named people or bodies.

Irish Competition Law

  	 
	13.7
	No Group Company is or 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 Competition Act 1991, or which is prohibited by section 4(1) of the Competition Act 2002.

  	 
	13.8
	No Group Company has made any notification to the Competition Authority requesting a licence pursuant to section 4(2) of the Competition Act 1991 or a certificate pursuant to section 4(4) of the Competition Act 1991.

  	 
	13.9
	No Group Company has committed,. contrary to section 5 of the Competition Act 1991, or section 5 of the Competition Act 2002, any abuse, either alone or jointly with any other undertaking, of a dominant position within the State or a substantial part of the State.

 

 

69

 

 

  	 
	13.10
	No authorised officer appointed pursuant to section 20 of the Competition Act 1991 or pursuant to section 45 of the Competition Act 2002 has ever entered and inspected any premises at or vehicles in or by means of which any Group Company carries on business nor required any Group Company nor any person employed in connection with the Business to produce any books, documents or records and no such authorised person has inspected, copied or taken extracts from any such books, documents and records nor required any Group Company nor any person to provide any information in regard to entries in such books, documents and records or in regard to a Group Company or its business or in regard to the persons employed in connection therewith.

  	 
	13.11
	No petition has been presented by a person pursuant to section 6(1) of the Competition Act 1991 or pursuant to section 14 of the Competition Act 2002 for an Injunction or declaration or damages including exemplary damages in relation to any agreement decision, concerted practice or action in which any Group Company is or has been involved nor has any such injunction or declaration or Damages been granted.

  	 
	13.12
	No petition has been presented by the Minister pursuant to section 6(4) of the Competition Act 1991 for an injunction- or declaration in relation to any agreement, decision, concerted practice or action in which any Group Company’ is or has been involved nor has any such injunction or declaration been granted.

  	 
	13.13
	No proceedings have been issued to any Group Company, director, manager or other officer or employee of any Group Company pursuant to section 8 of the Competition Act 2002 in relation to any agreement, decision or action in which any Group Company or any director, manager or other officer or employee of any Group Company is or has been involved and no Group Company, director, manager or other officer or employee of any Group Company has been convicted of an offence under section 8 of the Competition Act 2002.

  	 
	13.14
	No investigation has been carried out by the Competition Authority pursuant to section 14 of the Competition Act 1991 as to whether, in the opinion of the Authority, any Group Company is in a dominant position 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 any Group Company except on conditions specified in the order or (b) requiring the adjustment of the dominant position.

  	 
	13.15
	The Competition Authority, has not pursuant to its powers under section 7 of the Schedule to the Competition Act 1941 or pursuant to its powers under section 31 of the Competition Act 2002, done any of the following in relation to any officer or employee of any Group Company:

  	 
	13.15.1
	summoned one or more of them as a witness to attending before the Authority;

 

 

70

 

 

  	 
	13.15.2
	examined on oath any such person or persons summonsed to attend before the Authority;

  	 
	13.15.3
	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.

Mergers Control

  	 
	13.16
	No order has been made under the Mergers, the Competition Act 1991 (as amended) and/or the Competition Act 2002 which directly or indirectly affects the business of any Group Company.

  	 
	13.17
	In relation to every merger or take-over in which any Group 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.

  	 
	13.18
	The Minister has not referred any proposed merger or take-over in which any Group Company was involved and to which the Mergers Act applied to the Competition Authority for investigation pursuant to section 7(b) of the Mergers Act.

  	 
	13.19
	No Group Company has, 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.

  	 
	13.20
	Since 3rd July, 1978 no Group Company has been a party to any transaction modifiable pursuant to section 5 of the Mergers Act.

  	 
	13.21
	Since 1st January, 2003, in relation to every merger or acquisition in which a Group Company was involved and to which the Competition Act 2002 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.

  	 
	13.22
	Since 1st January, 2003, in relation to every merger or acquisition in which a Group Company was involved:

  	 
	13.23
	 

         

  	 
	(a)
	the Competition Authority has not carried out a full investigation under Section 22 of the Competition Act 2002.

 

 

71

 

 

13.24

  	 
	(a)
	the Competition Authority has not determined that the merger or acquisition could be put into effect only subject to conditions specified by it.

  	 
	(b)
	no Group Company has offered proposals to the Competition Authority under Section 20(3) which have become binding commitments on any Group  Company.

Concentrations with a Community Dimension

  	 
	13.25
	No Group Company is or 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 either (i) Council Regulation (EEC) No. 4064/89 of 21st December 1989 (the “1989 Regulation”); of (ii) Council Regulation (EC) No. 139/2004 of 20 January 2004 (the “2004 Regulation”) on the control of concentrations between undertakings and no Group Company is or has been involved prior to or at the date of this Agreement in any arrangement or transaction or agreement which has been the subject of findings or decisions of the Commission of the European Communities pursuant to either the 1989 Regulation or the 2004 Regulation.

State Aid

  	 
	13.26
	No Group Company has ever received, nor is any Group 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.

Contracts and Transactions with Directors

  	 
	13.27
	No Group Company

  	 
	13.27.1
	has incorporated into any employment agreement any terms required approval under section 28 of the 1990 Act without obtaining such approval in accordance with the said section 28;

  	 
	13.27.2
	has entered into any arrangement for the acquisition or disposal of non-cash assets requiring approval under section 29 of the 1990 Act without obtaining such approval in accordance with the said section 29; or

  	 
	13.27.3
	has made any loans or quasi-loans, entered into any credit transactions as creditor, entered into any guarantees or indemnities or provided any security in connection with loans, quasi-loans or credit transactions in breach of section 31 of the 1990 Act.

 

 

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Invalid Transactions

  	 
	13.28
	To the best of the knowledge and belief of the Warrantors after making due and careful enquiries no Group Company has been party to any transaction with any third party which, in the event of the third party going into liquidation or an administration order pr a bankruptcy order being made in relation to such third party, would constitute (in whole or in part) a transaction at an undervalue, a fraudulent preference, an invalid floating charge, an extortionate credit transaction or part of general assignment of debts, which could be set aside against the Group Company.

No Questionable Payments

  	 
	13.29
	No current or former director, officer, agent, employee or other person acting on behalf of any Group Company has been party to:

  	 
	13.29.1
	the use of any of the assets of any Group Company for unlawful contributions, gifts or entertainment or for the making of any direct or indirect unlawful payment to the government officials or employees;

  	 
	13.29.2
	the establishment or maintenance of any unlawful or unrecorded fund of corporate monies or other assets;

  	 
	13.29.3
	the making, of any false or fictitious entries in the books or records of any Group Company;

  	 
	13.29.4
	the making of any unlawful payment. 

  	Director of Corporate Enforcement

	 
	13.30
	None of the Group Companies nor any of their respective directors have received any notices, or correspondence requesting information from the Director of Corporate Enforcement.

  	 
	13.31
	None of the Group Companies is aware of any notice served by its auditors on the Director of Corporate Enforcement under Section 194(5) of the 1990 Act.

  	14
	DEFECTIVE AND UNSAFE PRODUCTS/SERVICES

  	 
	14.1
	There are no outstanding claims against any Group Company in respect of defects in quality or delays in delivery or completion of contracts or deficiencies of design or performance of equipment or otherwise relating to liability for goods or services supplied or to be supplied by any Group Company and no such claims are threatened or anticipated.

  	 
	14.2
	No Group Company has knowledge that any goods or products for which that Group Company has responsibility or for which that Group Company assumes responsibility under any contract of indemnity or otherwise is defective within the meaning of the liability for Defective Products Act 1991 or that the Company supplies or possesses for supply any goods or products which are in breach of the general safety requirement imposed by any relevant law order or regulation.

 

 

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  	15
	LITIGATION

  	 
	15.1
	No Group Company nor any person for whose acts. or omissions it may vicariously be liable is engaged in or subject to any civil, criminal or arbitration proceedings or any dispute or has been served, with any notice making it a party to any litigation, arbitration, prosecution or* other legal proceedings and no litigation, arbitration, prosecution or other legal proceedings are threatened or pending either, by or against any Group Company and there are no facts which might give rise to any such proceedings or to any dispute

  	 
	15.2
	There is no outstanding judgment, order, decree, arbitral award or decision of any court, tribunal, arbitrator or governmental agency, so far as the officers of the Company are aware, against any Group Company or any person for whose acts or defaults any Group Company may be vicariously liable.

  	16
	INSOLVENCY

  	 
	16.1
	No order has been made, or petition presented, or resolution passed for the winding up of any Group Company and there is not outstanding: 

  	 
	16.1.1
	any petition or order for the winding up of any Group Company;

  	 
	16.1.2
	any appointment of a receiver over the whole or any part of the undertaking or assets of any Group Company;

  	 
	16.1.3
	any petition or order for the appointment of an examiner to any Group Company under the Companies (Amendment) Act 1990;

  	 
	16.1.4
	any voluntary arrangement between any Group Company and any of its creditors;
	.

  	 
	16.1.5
	any distress or execution or other process levied in. respect of any Group Company which remains undischarged;

  	 
	16.1.6
	any unfulfilled or unsatisfied judgment or court order against any Group Company.

  	 
	16.2
	There are no circumstances which would entitle any person to present a • petition for the winding-up of, to the appointment of an examiner to any Group Company or to appoint a receiver over the whole or any part of any Group Company’s undertaking or assets.

  	 
	16.3
	No Group Company is insolvent or unable to pay its debts within the meaning of Section 214 of the 1963 Act and no event analogous to those set out in that section has occurred outside Ireland.

 

 

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	16.4
	No Group Company is or has 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 omission or commission) that occurred prior to Completion.

  	17
	COMPLIANCE

  	 
	17.1 
	No Group Company has been a party to any undertaking or assurance given to any Court or governmental agency which is still in force and there are no judgments or orders given’ or made by any Court or governmental agency against any Group Company which have not been fully satisfied and complied with.

  	 
	17.2 
	All necessary licences, consents, permits and authorities (public and private) have been obtained by the Group to enable the Group to carry on its business effectively in the places and in the manner in which that business is now carried on and all such licences, consents, permits and authorities are valid and subsisting and there is no reason why any of them should be suspended, cancelled or revoked.

  	18
	ENVIRONMENTAL

  	 
	18.1
	The Group has at all times complied with, and there has not been any previous breach of Environmental Laws. The Group is not aware of or involved in any actions, claims or proceedings (whether actual or potential) which may affect the Group.

  	 
	18.2
	There has been no breach of Environmental Laws relating to asbestos or polychlorinated biphenyls at the Properties.

  	 
	18.3
	The Group holds and complies with, and has at all times held and complied with, all Environmental Licences for the time being necessary, desirable or advisable in respect of the Properties, the user of the Properties, and the conduct of its businesses and other activities. All Environmental Licences are and have been at all relevant times, valid and subsisting and all fees payable in relation to them have been paid and the Group has at all times acted in accordance with best practice in relation to all activities and procedures affecting or potentially affecting the Environment. No circumstances exist which might give rise to any notice, enquiry, claim or proceedings by third parties including governmental, statutory or local authorities for breach of any Environmental Laws.

  	 
	18.4
	No act or omission of any Group Company has taken place, whether in breach of Environmental Law or otherwise, which has caused, is causing or may cause damage to the Environment;

  	 
	18.5
	There has been no amendment, renewal, cancellation or other change actual or proposed to any of the Environmental Licences referred to above and no Group Company has received any communication, indication, proposal or notification whether formal or informal, in writing or otherwise, requiring further 

 

 

75

 

 

Environmental Licences or requiring that any Environmental Licence may be cancelled, annulled, withdrawn, amended, restricted, qualified or limited or that any Environmental Licence will not be renewed in full or in part;

  	 
	18.6
	There is no reason why the continued use of the Properties and/or the conduct of the business of the Group are likely to give rise to any actions, claims or proceedings for breach of Environmental Law.

  	 
	18.7
	True and accurate up to date copies of all Environmental Licences currently required in connection’ with the Group’s business and all previous relevant Environmental Licences and all related notices, formal or informal are annexed to the Disclosure Letter.

  	 
	18.8
	True and accurate copies of all environmental` audits, reports, evaluations, examinations, surveys, studies, assessment or tests relating to the Group’s business and/or affecting the Properties are annexed to the Disclosure Letter.

  	 
	18.9
	No Group Company has acquired, held, used, stored, managed, created, produced, transported, treated or otherwise dealt with any Substance

  	 
	18.10
	No Group Company has by commission or omission caused, permitted or contributed in any way to:

  	 
	18.10.1
	damage to the Environment whether by pollution, contamination, release, treatment, discharge or emission or otherwise;

  	 
	18.10.2
	any other danger or threat to the Environment; or

  	 
	18.10.3
	anything which is or might give rise to a breach of Environmental Law.

  	 
	18.11
	No Group Company has released, discharged, emitted, leaked, spilled, stored, transported, handled or otherwise caused or allowed to pass into the Environment any contaminant, pollutant or Substance which causes, has caused, may cause or has the potential to cause harm to the Environment.

  	 
	18.12
	No Group Company has created or allowed any circumstances to exist that might be harmful to the Environment.

  	 
	18.13
	No Group Company has been prosecuted for any offence involving damage to the Environment or breach or violation of Environmental Law.

  	 
	18.14
	No Group Company has received any notice, whether. formal or informal in writing or otherwise from any authority whether governmental, statutory, local or otherwise or other agency under any Environmental law regarding any damage to the Environment or violation of Environmental law, whether actual, alleged or potential

 

 

76

 

 

  	 
	18.15
	No Group Company has received or are aware of any actual, likely or possible complaints or enquiries whatsoever from any person (including any neighbour or employee), or from any body, representative or agency in respect of the Environment or the health or safety of the public or employees.

  	19
	COMPANIES ACTS AND OTHER LEGISLATION

Memorandum and Articles of Association

  	 
	19.1
	The copy of the Memorandum and Articles of Association of each Group Company which has been Disclosed is accurate and complete in all respects and has annexed to or embodied in it a copy of every resolution or agreement referred to in Section 143 of the 1963 Act or Section 55 of the Companies (Amendment) Act 1983.

Filing and records

  	 
	19.2
	 All documents required by the Companies Acts or any other legislation, to be filed with the Registrar of Companies or any other authority or so required to be published in respect of each Group Company have been duly filed or published as the case may be and due compliance has been made with all other legal requirements relating to the formation of each Group Company and the conduct of its business and to distributions and issues of shares, debentures and other securities of each Group Company and the keeping and filing of books, records and documents.

  	 
	19.3
	All registers required to be kept by each Group Company under the provisions of the Companies Acts, are true and accurate and all notifications and disclosures required to be made to each Group Company by the Warrantors and for the directors of each Group Company, including, but not limited to, Parts III and IV of the 1990 Act, have been made.

Charges

  	 
	19.4
	All charges in favour of any Group Company have (if applicable) been registered in accordance with the provisions of the 1963 Act. No charge in favour of any Group Company is void or voidable for want of registration and no event has occurred causing, or which upon intervention or notice by any third party may cause, any floating charge created by any Group Company to crystallise or any charge created by it to become enforceable nor has any such crystallisation occurred or is such enforcement in process.

General

  	 
	19.5
	No Group Company is a party to nor are any of its assets affected by: 

  	 
	19.5.1
	any contract for hire or rent, hire purchase or purchase by way of credit, sale and periodical payment;

 

 

77

 

 

  	 
	19.5.2
	any contract for guarantee, indemnity or suretyship;

  	 
	19.5.3
	any contract for service (other than contracts for supply of electricity or other utilities or normal office services);

  	 
	19.5.4
	any agreement or arrangement which to the knowledge of the Warrantors is liable to be terminated by another party as a result of any change in the control, management or shareholders of the Company or on Completion.

  	 
	19.6
	No Group Company has: 

  	 
	19.6.1
	had a notice served on it by its auditors pursuant to Section 185 or 194 of the 1990 Act;

  	 
	19.6.2
	entered into any transaction or arrangement, particulars whereof would, pursuant to Section 41 of the 1990 Act, require to be contained in its financial statements;

  	 
	19.6.3
	purchased or redeemed its, own shares or those of its holding company, reduced or repaid any share capital or created or created treasury shares pursuant to the provisions of Part XI of the 1990 Act or agreed to do so;

  	 
	19.6.4
	been struck off and subsequently restored to the register pursuant to Section 311A of the 1963 Act; and

  	 
	19.6.5
	no shares in or debentures of any Group Company are subject to or have been issued to contravention of any restriction under Section 16 of the 1990 Act and no Group Company is legally or beneficially interested in any shares in or debentures of any company which are the subject of any restriction under Section 16 of the 1990 Act.

  	 
	19.7
	No Director or person who has at any time within the last three years been a director or other officer of any Group Company is, or has at any material time been ineligible to be a director by reason of any provision of the Companies Acts and no person is a shadow director (within the meaning of Section 27 of the 1990 Act) of any Group Company.

  	 
	19.8
	No Director or other person who is or has been, directly or indirectly, appointed or acting in any way as a director, secretary or other officer or concerned in the management, promotion or formation of any Group Company:

  	 
	19.8.1
	has been restricted or disqualified; or .

  	 
	19.8.2
	acts or has acted in accordance with the directions or instructions of any person restricted or disqualified.

under Part 7 of the 1990 Act, nor is any Group Company disqualified under that Part of the 1990 Act.

 

 

78

 

  	 
	19.9
	The assets owned or leased by each Group Company and the facilities and services to which that Group Company has a contractual right comprises all the assets, facilities and services necessary or convenient for the carrying on of the Business and in particular the business of that Group Company in the manner in which it is currently conducted.

  	 
	19.10
	Each Group Company is a body corporate duly incorporated and validly existing under the laws of its relevant jurisdiction.

  	20
	EFFECT OF AGREEMENT

  	 
	20.1
	There are no contracts or arrangements (whether written or oral) to which any Group Company is a party which will by their terms be determinable as a result of the provisions of this Agreement or which will or may be determined by completion of this Agreement.

  	 
	20.2
	The execution and delivery of this. Agreement and the fulfilment and performance of and compliance with its terms by the Vendors do not and will not:

  	 
	20.2.1
	conflict with, violate or result: in a breach by any Group Company or the Vendors of the terms, provisions or conditions of any agreement or any law, undertaking to or judgment, order; injunction or decree of any court;

  	 
	20.2.2
	relieve any person of any contractual or other obligation to any Group Company or entitle any person to terminate any such obligation;

  	 
	20.2.3
	terminate or make subject. to termination or adversely affect from that Group Company’s point of view the enjoyment of any present or future benefit or privilege;

  	 
	20.2.4
	result in any customer or supplier of any Group Company ceasing to deal or substantially reducing the existing level of it’s dealings with that Group Company;

  	 
	20.2.5
	constitute a breach of or default under any loan or security interest to which any Group Company is a party or result in any indebtedness, present or future, of any Group Company becoming due or capable of being declared due: and payable before the stated maturity date;

  	 
	20.2.6
	give rise to any contractual or other obligation of the Company to any person. or entitle any person to require the performance of or compliance with any existing contractual or other obligation of that Group Company; or

  	 
	20.2.7
	cause any officer or senior employee to leave employment. 

 

 

79

 

  	21
	SUBSIDIARIES

  	 
	21.1
	The Subsidiaries are private companies limited by shares incorporated in Ireland.

  	 
	21.2
	All the issued shares of each of the Subsidiaries have been issued in proper legal form and are fully paid or credited as fully paid and the Company is the legal and beneficial owner of all such shares free from any Encumbrances.

  	 
	21.3
	The Subsidiaries do not have any subsidiary or associated companies. 

  	22
	PROPERTIES

  	 
	22.1
	The Properties comprises all the land and buildings owned and/or occupied and/or used by the Group and/or in which the Group has an interest or which are otherwise used in connection with the Businesses of the Group and the description, particulars of tenure, particulars of all leases, licences, franchise agreements, which exist in favour of third parties or are in the course of being created or acquired, of the Properties set out in the Fifth Schedule are accurate in all material respects.

  	 
	22.2
	No Group Company is in any current negotiations to acquire (by way of lease or otherwise) or dispose of any property.

  	 
	22.3
	No Group Company has entered into any agreement to acquire or dispose of the Properties or premises thereon or any interest therein which has not been completed.

  	 
	22.4
	The Lease a copy of which is annexed o the Disclosure Letter, constitutes the entire agreement relating to occupation by the Group of the Properties and there are no other agreements or arrangements (written or unwritten) relating to the occupation by the Group, of the Properties. There has been no variation or alteration in the terms and conditions of the Lease and the user of the Properties is in compliance with the user provision in the Lease.

  	 
	22.5
	In relation, to the Lease the Group has paid all rent accrued due and fully performed and observed all of the covenants and conditions on the part of the tenant and there are no notices relating to them nor are there, in so far as the Warrantors are aware, any outstanding reviews, matters or proceedings which have yet to be commenced or concluded. There has been no breach of the covenants and conditions contained in the Lease on the part of the landlord. Neither the landlord nor the tenant under the Lease has instituted any proceedings, served any notices or made any complaint or objection to the other and the Vendors do not intend to and is not aware of any intention on the part of any landlord to institute or threaten proceedings or to serve such notices.

  	23
	COMPUTER SYSTEMS

  	 
	23.1
	No Group Company has 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) are not under the exclusive ownership and direct control of that Group Company.

 

 

80

 

  	 
	23.2
	The computer systems of the Group have been satisfactorily maintained and supported and have the benefit of maintenance and support agreements, copies of which are attached to the Disclosure Letter, terminable by the contractor by not less than twelve months’ notice and each Group Company is in compliance in all material respects with the terms of such support and maintenance contracts.

  	 
	23.3
	To the best of the knowledge and belief of the Warrantors after making due and careful enquiries, the other parties to such support and maintenance contracts have compiled and are complying in all material respects with the terms of such support and maintenance contracts.

  	 
	23.4
	The computer systems of the Group have adequate capability and capacity for the projected requirements of the Group for not less than four years following Completion for the processing and other functions required to be performed for the purposes of the business of the Group.

  	 
	23.5
	Disaster recovery plans are in full force and effect and are adequate to ensure that the computer systems of the Group can be . replaced or substituted without material disruption to the business of the Group.

  	 
	23.6
	In the event that any person providing maintenance or support services for the Computer Systems ceases or is unable to do so, the Group has all necessary rights to obtain the relevant source codes and all related technical and other information free, of charge and to procure the carrying out of such services by employees or by a third party.

  	 
	23.7
	The Group has sufficient :technically competent and trained employees to ensure proper handling, operation, monitoring and use of it’s computer systems.

  	 
	23.8
	The Group has adequate procedures to• e6sure internal and external security of it’s computer systems, including procedures for taking and storing on-site and off-site back-up copies of computer programs and data.

  	24.
	TAXATION 

General

  	 
	24.1
	All taxation which any Group Company is liable to pay prior to Completion has been or will be discharged prior to Completion or is provided for in the Accounts.

  	 
	24.2
	All returns, computations, notices and items of information which are, or have been required to be made or given by a Group Company for any Taxation purposes have been made or given within the requisite periods and on a proper basis and are up to date and correct and none of them is the any dispute with the Revenue Commissioners or any Tax Authority.

 

 

81

 

  	 
	24.3
	No dispute exists with any Tax Authority in respect of any Taxation, and in particular for any computations for accounting periods within the self-assessment system.

  	 
	24.4
	No Group Company is liable and has not at any time since the Last Accounting Date been liable to pay interest on overdue taxation.

  	 
	24.5
	No Group Company has acquired or disposed of any asset or entered into any transaction otherwise than by way of bargain at arm’s length.

  	 
	24.6
	No Group Company has entered into any financing or leasing or other agreement in which or in. connection with which that Group Company has indemnified any other party against any claim, loss or other liability arising from any change in Taxation legislation or in the interpretation of Taxation legislation.

  	 
	24.7
	There are set out in the Disclosure Letter full particulars of all differences between the accounting and taxation treatments of all items in the Accounts.

  	 
	24.8
	There is no appeal by any Group Company pending against any assessment to tax and the Company is not in default in payment of any tax within the period prescribed for payment thereof.

  	 
	24.9
	No Group Company has committed any act nor made any omission which might constitute an offence under Section 1078 of the TCA .

  	 
	24.10
	No Group Company has 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 no Group Company hasp at any time carried on any trade in any other country and no Group Company has/had a permanent establishment, in any country other than the Republic of Ireland. No Group Company has paid tax on income, profits or gains to any Tax Authority in any country except the Republic of Ireland.

  	 
	24.11
	Each Group Company has for each accounting period up to and including the accounting period ending on Completion furnished that Group Company’s Inspector of Taxes with full and accurate particulars relating to the affairs of that Group Company, and also has properly and within the prescribed periods of time made all returns and given or delivered all notices, accounts and information required for the purpose of taxation, and all such have been correct in all material respects and on a proper basis and none such are disputed by the Revenue Commissioners or any Tax Authority, there are no grounds or circumstances which might cause, any such dispute and each Group Company has made all claims which would be of benefit to it within the time limits laid down in the relevant legislation.

  	 
	24.12
	Each Group Company has submitted and the relevant Tax Authority has where relevant agreed computations of its taxable profits in respect of all periods up to and including the year ended on the Last Accounting Date.

 

 

82

 

  	 
	24.13
	No Group Company has entered into or been a party to any schemes or arrangements designed partly or wholly for the purpose of avoiding taxation which could be classed as a “tax avoidance transaction” within the meaning of Section 811 of the TCA and no provisions of that Section apply to that Group Company in respect of any event (whether or not involving that Group 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.

  	 
	24.14
	No act or transaction has been effected in consequence of which any Group Company is liable for any taxation primarily chargeable against some other person.

  	 
	24.15
	The making of returns, payment of preliminary tax and all other requirements of Sections 950 to 959 of the TCA have been complied with fully by each Group Company.

  	 
	24.16
	No penalty under Section 1084 of the TCA has or will become payable in respect of any period ending prior to Completion.

  	 
	24.17
	No notice of attachment has been served on any Group Company or in relation to any funds of that Group Company under Section 1002 of the TCA.

  	 
	24.18
	Each Group Company has for each. accounting period: 

  	 
	24.18.1
	furnished the relevant Tax Authority with full and accurate particulars relating to the affairs of that Group Company; properly and within the prescribed periods of time made all returns and given or delivered all notices, accounts and information required for the purposes of taxation; and complied fully with the requirements of Sections 950 to 959 of the TCA, regarding the payment of preliminary tax, corporation tax and capital gains tax.

  	 
	24.20
	No transaction has or had been effected by any Group 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.

  	 
	24.21
	The provisions of the Waiver of Certain Tax, Interest and Penalties Act 1993 do not have any application to any Group Company or any of its officers.

  	 
	24.22
	No Group Company has made a relevant investment within the meaning of Section 481, and Schedule 32, Paragraph 22 of the TCA.

  	 
	24.23
	No Group Company operates nor has it at any time operated any share option scheme, profit sharing scheme or other employee shares scheme.

 

 

83

 

Penalties, Interest and Revenue Offences:

  	 
	24.24
	No Group Company has paid, or become liable to pay, any fine, penalty or interest charged by virtue of the TCA, the Value Added Tax Act 1972 or any other statutory provision relating to Tax, and no Group Company has committed any act or made any omission which might constitute an offence under section 1078 of the TCA.

Agreements with Tax Authorities:

  	 
	24.25
	The Disclosure Letter sets out full particulars of any agreement or arrangement between any Group Company and the Revenue Commissioners or other Tax Authorities pursuant to which the Group Company or any Group Company is authorised not to comply with a requirement which, but for such agreement or arrangement, would be its satisfactory obligation, and no Group Company has taken any action which has had, or will have, the result of altering, prejudicing or in any way disturbing any arrangement or agreement which it has previously had with the Revenue Commissioners or other Tax Authority.

Transactions since Last Accounting Date:

  	 
	24.26
	The Disclosure Letter contains full and accurate particulars of all transactions effected otherwise than in the ordinary course of business since the Last Accounting Date in respect of which any Group Company is required to make a specific return to the relevant Tax Authority and in respect of which the time for making such return will expire on or after Completion.

Tax Clearance and Clearances:

  	 
	24.27
	No transaction has been effected by any Group Company in respect of which any consent or clearance from the Revenue Commissioners or other Tax Authority was required:

  	 
	24.27.1
	without such consent or. clearance having been validly obtained before they transaction was effected;

  	 
	24.27.2
	otherwise than in accordance with the terms of, and so as to satisfy any conditions attached to, such consent or clearance; or

  	 
	24.27.3
	otherwise than at a time when, and in circumstances in which, such consent or clearance was valid and effective, and, in any case where such consent or clearance was required, no circumstances have arisen which might reasonably be expected to cause such consent or clearance was required, no circumstances have arisen which might reasonably be expected to cause such consent or clearance to be or become invalid or to be withdrawn by the Tax Authority concerned.

 

 

84

 

Applications since Last Accounting Date:

  	 
	24.28
	All particulars furnished to the Revenue Commissioners or other Tax Authority in connection with the application for any consent of clearance by the Group Company made since the Last Accounting Date fully and accurately disclosed all facts and circumstances material to the decision of the Revenue Commissioners or such other authority.

Claims under the Tax Deed:

  	 
	24.29
	Without prejudice to any liability which may arise under the Tax Deed, to the best of the knowledge and belief of the Warrantors after making due and careful enquiries, there is no liability to Taxation in respect of which a claim could be made under the Tax Deed and there are no circumstances likely to give rise to such a liability.

Liability for Others:

  	 
	24.30
	No Group Company is or will become liable to pay, or make reimbursement or indemnity in respect of, any Taxation (or amounts corresponding thereto) in consequence of the failure by any other person to discharge that Taxation within any specified period or otherwise, where such Taxation relates to a profit, income or gain, transaction, event, omission or circumstances arising, occurring or deemed to arise or occur (whether wholly or partly) prior to Completion.

Outstanding Entitlements:

  	 
	24.31
	The Disclosure Letter includes a correct and complete list and full particulars with express reference to this Warranty 25.32, of all matters relating to Tax in respect of which any Group Company (either alone or jointly with any other person) has, or at Completion will have, an outstanding entitlement:

  	 
	24.31.1
	to make any claim for relief under the TCA or any other statutory provision relating to Tax;

  	 
	24.31.2
	to make any election for one type of relief, or one, basis, system or method if Tax, as opposed to another;

  	 
	24.31.3
	to make any appeal (including a further appeal) against an assessment to Tax;

  	 
	24.31.4
	to make any application for the postponement, or payment of instalment of, Tax; or

  	 
	24.31.5
	to disclaim any allowance or relief,

such particulars being reasonably sufficient to enable the Purchaser to procure that any time limit to such entitlement, expiring within six months after Completion can be met.

 

 

85

 

Dividend Withholding Tax:

  	 
	24.32
	Each Group Company has fully complied with all the obligations imposed on it in relation to dividend withholding tax in accordance with Chapter 8A of Part 6 and schedule 2A of the TCA.

Notice of Attachment:

  	 
	24.33
	No notice of attachment has been served on any Group Company under section 1003 of the TCA

Deposit Interest Retention Tax:

  	 
	24.34
	No Group Company has received, or will prior to Completion earn, deposit interest subject to retention of tax under section 257 of the TCA

Charges on Book debts:

  	 
	24.35
	No Group Company has taken a fixed charge on the book debts of any company.

Agency for Non-Residents:

  	 
	24.36
	No Group Company has ever been, or is now, assessable to tax under section 1034 or 1035 of the TCA

Anti-Avoidance Provisions:

  	 
	24.37
	No Group Company has received any notice under section 811(6) of the TCA or engaged in, or been party to, a tax avoidance transaction within the meaning of section 811(2) of the TCA or any other transaction or series of transactions or scheme or arrangement of which the main purpose, or one of the main purposes, was or could be said to be the avoidance or deferral of, or a reduction in the liability to, Tax.

Pay as You Earn (PAYE) and Social Welfare:

  	 
	24.38
	The Group has properly operated the PAYE and social welfare contribution systems (including levies), deducting and accounting for Tax and maintaining records as required by law, and no Group Company has suffered any PAYE audit by the Revenue Commissioners since the Last Accounting Date or has been notified that any such audit will or is expected to. be made.

  	 
	24.39
	There has been no transfer by or cessation of any business within the Group which would or might give rise to any Tax liability as a consequence of the completion of the purchase by the Purchaser of the Sale Shares as contemplated by this Agreement.

 

 

86

 

Corporation Tax

  	 
	24.40
	No Group Company has, 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 that Group Company.

  	 
	24.41
	No Group Company has 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 that Group 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 that Group Company.

  	 
	24.42.
	In respect of Schedule 32, Paragraph 7 of the TCA, no circumstance exists which would lead the Revenue to withdraw approval of the scheme or to contend that any Group Company is not a qualifying Company carrying on a specified trade.

  	 
	24.43
	In respect of profit sharing schemes under Sections 509 to 518 of the TCA, no circumstance exists which would lead the Revenue to withdraw approval of any such scheme.

  	 
	24.44
	In respect of employee share ownership trusts under Section 519 and Section 511(A) of the TCA, no circumstance exists which would lead the Revenue to withdraw approval of any such scheme.

  	 
	24.45
	If the employees of any Group Company have benefited from Section 479 of the TCA, no circumstance exists in relation to that Group Company which would lead to the withdrawal of the relief.

  	 
	24.46
	No Group Company has, within the meaning of Sections 520 to 529 of the TCA, received payment in respect of professional services from an accountable person.

  	 
	24.47
	No loan or advance or payment has been made or consideration given or transaction effected falling within Sections 438 or 439 of the TCA.

  	 
	24.48
	Each Group Company has duly complied with the requirements of Section 239 of the TCA and with the requirements of all other provisions relating to the deduction and withholding of tax at source up to the date hereof and all such tax which has become due to the Revenue Commissioners or any Tax Authority has been paid to the Revenue Commissioners or such tax authority.

  	 
	24.49
	No Group Company has over incurred any expense or paid any amount in consequence of which that Group Company has been or could be treated under Sections 436 or 437 of the TCA as having made a distribution.

  	 
	24.50
	The limitation on the meaning of “distribution” provided for by Sections 133 and 134 of the TCA does not apply to any financial arrangements of any Group Company.

 

 

87

 

  	 
	24.51
	No Group Company is affected by the amendments to Part IX of the Corporation Tax Act 1976 contained in Section 133(3) and 134(2) of the TCA.

  	 
	24.52
	Section 138 of the TCA does not apply to any dividend paid by any Group Company in respect of its preference shares.

  	 
	24.53
	No Group Company has made any claim for relief in respect of stock appreciation under Section 665 to 669 of the TCA or under Section 31 and 31A of the Finance Act 1975 or Section 26 of the Finance Act 1976 or Section 49 Finance Act 1984.

  	 
	24.54
	No Group Company has effected. or entered into any act transaction or arrangement of any nature whereby it has incurred or may hereafter incur any liability under or by virtue of any of Sections 98, 99, 100 and 103 of the TCA.

  	 
	24.55
	No Group Company has surrendered any amount by way of group relief under the provisions of Sections 411 to 424 and Section 456 of the TCA.

  	 
	24.56
	No Group Company is and will not at any time in the future become liable to make a subvention payment or any other payment for an amount surrendered by any other Company under or in connection with the provisions of Section 411 of the TCA.

  	 
	24.57
	No Group Company has at any time:

  	 
	24.57.1
	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

  	 
	24.57.2
	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

  	 
	24.57.3
	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.

  	 
	24.58
	No allowable loss which has arisen or which may hereafter arise on the disposal by any Group Company of shares in or securities of any company held at Completion is liable to be disallowed in whole or in part by virtue of the application of Section 621 or 622 of the TCA.

  	 
	24.59
	No change of ownership, of any `Group Company has taken place in circumstances such their Section 401 of the TCA has or may be applied to deny relief for a loss or losses incurred by a Group Company.

 

 

88

 

  	 
	24.60
	On a sale of any machinery and plant at the value thereof shown in the Accounts no balancing charge will be incurred.

  	 
	24.61
	There has not been in respect of any accounting period, any excess of distributable investment and estate income within the meaning of Section 434 of the TCA.

  	 
	24.62
	Each Group Company is entitled to relief up to 5th April 1990 under Sections 144 to 146 of the TCA.

  	 
	24.63
	No Group Company has ever claimed relief under Sections 147 to 149, 151, 442 to 450 and 453 and Schedule 32, paragraphs 4, 5(2), 6(2), 16(1) - (4) and 18 of the TCA.

  	 
	24.64
	No Group Company has entered into transactions by virtue of which it will be chargeable under Case IV, Schedule D in accordance with Section 815 of the TCA.

  	 
	24.65
	The restrictions on the use of capital allowance for certain leased assets, as set out in Section 403 of the TCA do not have application to any transactions entered into by any Group Company.

  	 
	24.66
	The provisions of Sections 272 and 317(3) of the TCA apply to all expenditure incurred by each Group Company, and have been properly implemented in the accounts of that Group Company.

  	 
	24.67
	No circumstance exists in connection with any Group Company which would lead to the withdrawal of relief for investment in research and development as provided for in Chapter Ill of the Finance Act 1986.

  	 
	24.68
	No Group Company has received notice under Section 70 of the Corporation Tax Act 1976 as amended by Section 56 of the Finance Act 1986.

  	 
	24.69
	The provisions of Section 1013 of the TCA do not apply to any transaction entered into by any Group Company.

  	 
	24.70
	No Group Company is liable to any claim in respect of tax due under Sections 530 or 531 of the TCA, and each Group Company has complied with the provisions of these Sections.

  	 
	24.71
	No Group Company has entered into any transaction as a result of which it could be assessed to tax under Schedule D in accordance with Section 639 to 647 of the TCA.

  	 
	24.72
	No Group Company has received a notice under Section 446 of the TCA, requiring that Group Company to desist from an activity or revoking the certificate.

 

 

89

 

  	 
	24.73
	The utilisation of losses incurred by the Company is not restricted by Section 456 of the TCA.

  	 
	24.74
	No reduction or withdrawal of relief has occurred under Section 222 of the TCA.

  	 
	24.75
	No allowance in respect of capital expenditure is or may in respect of any capital asset acquired on or before Completion be restricted by virtue of Sections 271, 273, 274, 278,283, 285, 300; 304; 305, 316, 317, 320, 658 and Schedule 32, paragraphs 9 and 23(2) of the TCA.

  	 
	24.76
	No Group Company nor any of its shareholders is affected by the restrictions on the Business Expansion Scheme relief which are contained in Sections 489 to 498 of the TCA.

  	 
	24.77
	No Group Company has entered into or taken any steps the object of which is a transaction which comes or might come within Section 817 of the TCA.

  	 
	24.78
	No Group Company beneficially owns nor has it ever beneficially owned shares to which Sections 155 and 489 of the TCA apply or may have applied.

  	 
	24.79
	The goods produced by each Group Company fall within the definition of goods regarded as manufactured contained in Section 443 of the TCA.

  	 
	24.80
	The tax benefit envisaged at the time of borrowing in respect of any loan obtained prior to Completion under Section 130 of the TCA will, under present legislation, remain undiminished until such loan has been repaid.

  	 
	24.81
	No Group Company owns 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 offshore fund within the terms of. Sections 740 to 747 of the TCA.

  	 
	24.82
	Any machinery or plant provided for use for the purposes of the trade of any Group Company after 1 April 1990 is used wholly and exclusively for the purposes of the trade of that Group Company.

  	 
	24.83
	The cost of acquisition for the purposes of corporation tax on chargeable gains to each Group Company of each asset of that Group Company (except trading stock and work in progress) is not less than the book value of that asset as provided for in ,that Group Company’s accounts and that Group Company has not acquired any asset otherwise than by way of bargain at arms-length.

  	 
	24.84
	No Group Company has since its incorporation acquired any assets other than trading stock from any company which at the time of the acquisition was a member of the same group as defined in Sections 590(11) and 616 of the TCA.

  	 
	24.85
	Where fixed assets have been stated in the Accounts in excess of their cost, any potential liability to Taxation on chargeable gains that would accrue on the sale of these assets at their values stated are either fully provided for or disclosed by way of note in the Accounts.

 

 

90

 

  	 
	24.86
	Any inter-company transactions have been carried out on an arms length basis so that adjustments of profit or losses under Section 453 of the TCA are not applicable.

  	 
	24.87
	All pension payments made are ordinary annual attributions in accordance with Section 774 of the TCA.

  	 
	24.88
	No Group Company is, or ever has been, a close Company. No Group Company has any liability to a surcharge on any of its income pursuant to section 440 or 441 of the TCA, nor will it incur any such liability in respect of any accounting period prior to Completion, and no Group Company has at any time, ceased to carry on the trade of which, immediately prior to such time, its activities wholly or mainly consisted. No distribution falling within section 436 or 437 of the TCA has been made by any Group Company and no Group Company has entered into any transaction falling within section 438 or 439 of the TCA.

  	25
	DIVIDENDS AND DISTRIBUTIONS 

Advance Corporation Tax (“ACT”)

  	 
	25.1
	No Group Company has no outstanding liability to ACT, under Chapter 8 Part 6 of the TCA.

  	 
	25.2
	No Group Company has ever made a surrender of ACT under Section 66 of the TCA [surrender of ACT].

  	 
	25.3
	No Group Company is affected by the provisions of Section 167 of the TCA [carrying forward of ACT, where a change in ownership of company]. 

Dividend Withholding Tax (“DWT”)

  	 
	25.4
	In respect of all dividends paid on or after 6 April 1999, each Group Company has fully and correctly complied with the provisions of Chapter 8A of Part 6 of the TCA, and has deducted and accounted for all appropriate DWT and has no outstanding liability in respect of DWT.

  	 
	25.5
	In respect of all dividends paid by any Group Company on or after 6 April 1999, which are exempt from DWT, such Group Company has received a declaration, in the form prescribed in Schedule 2A of the TCA, from the recipients of such dividends, evidencing that DWT was not payable.

Acquisition of own Shares

  	 
	25.6
	No Group Company has acquired any of its own shares pursuant to the provisions of Chapter 9 of Part 6 of the TCA.

 

 

91

 

Treatment of Dividends on Certain Preference Shares

  	 
	25.7
	Section 138 of the TCA does not apply to any dividend paid by any Group Company in respect of its preference shares.

Section 130 Loans

  	 
	25.8
	No Group Company has ever been a party to any loan arrangement in respect of which interest or any other amount payable thereunder is capable of being treated as a distribution pursuant to the provisions of Chapter 2 of Part 6 of the TCA.

Dividends from a Non-Resident Subsidiary

  	 
	25.9
	No reduction or withdrawal of relief has occurred under Section 222 of the TCA.

Removal of Taxation Free Status from certain Dividends

  	 
	25.10
	No Group Company beneficially owns nor has it ever beneficially owned shares to which Section 155 or 489 TCA applies or may have applied.

  	26
	COMPLIANCE

  	PAYE/PRSI

	 
	26.1
	Each Group Company has properly operated the PAYE system of deduction and accounted to the relevant Tax Authority for Taxation chargeable on the remuneration of its employees and has properly operated the Pay Related Social Insurance system and has accounted to the relevant Tax Authority for all deductions made thereunder or provided in full for same in the Accounts.

Deferment of PAYE

  	 
	26.2
	No Group Company has availed of the Income Tax (Employment) Regulations 1989 (S.I 5811989) whereby an employer may make remittances of PAYE deducted from his employees at longer intervals than the normal remittance basis.

Compliance and Records

  	 	26.3
	Each Group Company has complied in all respects with the Social Welfare Consolidation Act 1993, the Health Contributions Act 1979, Youth Employment Agency Act 1981, (all as amended) and any Regulations made under any such Acts and has maintained full complete, correct and up to date records for the purposes thereof and has not committed any offence under Part VI, Chapter 4 of the Social Welfare Consolidation Act 1993 and is not liable for any abnormal or non-routine payment or any forfeiture or penalty or for the operation of any penal provisions due to non-compliance with the said Acts and/or Regulations.

 

 

92

 

Interest on Overdue Taxation

  	 
	26.4
	No Group Company is or has at any time since the Last Accounting Date been liable to pay interest on overdue Taxation.

Payments made under Deduction of Taxation

  	 
	26.5
	Each Group Company has duly complied with the requirements of Section 239 of the TCA [income tax on payments by a resident company] and with the requirements of all other provisions relating to the deduction and withholding of Taxation at source up to the date hereof and all such Taxation which has become due, has been paid.

Subcontractors Tax

  	 
	26.6
	No Group Company is liable for any claim for Taxation under Sections 530 and 531 of the TCA and has complied with the provisions of these Sections in all regards.

Surcharge for Late Submission of Returns

  	 
	26.7
	No claims to relief connected with a Group Company have been or will be restricted by Section 1085 of the TCA.

Appeals

  	 
	26.8
	here is no appeal by any Group Company pending against any assessment to Taxation.

Taxation Accounts and Returns

  	 
	26.9
	Each Group Company has for each accounting period up to and including the accounting period ending on the Last Accounting Date, furnished the relevant Tax Authority with full and accurate particulars relating to its affairs, and also has properly and within the prescribed periods of time made all returns and given or delivered all notices, accounts and information required for the purpose of Taxation, and all such particulars have been correct in all material respects and on a proper basis and none are disputed by the relevant Tax Authority concerned, and there are no grounds or circumstances which might cause any such dispute and each Group Company has made all claims which would be of benefit to it, within the time limits laid down in the relevant legislation. Each Group Company has submitted, and the relevant Tax Authority has where appropriate
agreed, computations of its taxable profits in respect of all periods up to and including the year ended on the Last Accounting Date.

Revenue Audits

  	 
	26.10
	No Group Company has been subject to an audit by any Taxing Authority whereby any liability to Taxation has been assessed or may be assessed.

 

 

93

 

Mandatory Reporting Requirements

  	 
	26.11
	Each Group Company has compiled in all respects with the reporting requirements of Part 38, Chapter 3 of the TCA.

Self Assessment Returns

  	 
	26.12
	No penalty or surcharge under Section 1084 of the TCA has or will become payable by any Group Company.

Withholding Taxation on Professional 

  	 
	26.13
	No Group Company has received payment nor is it due payment in respect of professional services from an accountable person within the meaning of Chapter 1 of Part 18 of the TCA.

Waiver of Certain Tax, Interest and Penalties Act 1993

  	 
	26.14
	The provisions of the Waiver of Certain Tax, Interest and Penalties Act 1993, do not have application to any Group Company.

  	27
	CAPITAL GAINS TAX

Rollover Relief

  	 
	27.1
	No Group Company has made any claim under Section 596, 600A, 605 or 620 of the TCA (rollover relief and compulsory purchase order relief).

Transfers at Undervalue 

  	 
	27.2
	No Group Company has made a transfer that is referred to in Section 589 of the TCA or received any asset by way of a gift as mentioned in Section 978 of the TCA.

Clearance Certificate

  	 
	27.3
	The Sale Shares do not derive the greater part of their value from: 

  	 	27.3.1
	land in Ireland;

	 
	27.3.2
	minerals, mineral rights or mining rights in Ireland; or

  	 
	27.3.3
	exploration or exploitation rights on the continental shelf of Ireland and such Sale Shares were not acquired by the Vendors, or any prior holder, in exchange for shares, debentures or other securities the greater part of the value of which was so derived.

 

 

94

 

Share for Share Exchange

  	 
	27.4 
	No Group Company has been a party to or involved in any share for share exchange nor any scheme of reconstruction or amalgamation as are mentioned in Chapter 4 of Part 19 of the TCA or Section 615 of the TCA under which shares or debentures have-been issued or any transfer of assets effected.

Receipt of Shares for Transfer of Trade

  	 
	27.5
	No Group Company has entered into any of the transactions to which Part 21 of the TCA applies nor holds nor has disposed of “new assets” under Section 631 of the TCA.

Disposal by Liquidators or Mortgages

  	 
	27.6
	No Group Company has any liability by virtue of the provisions of Section 571 of the TCA.

Group Transactions

  	 
	27.7
	No Group Company had entered into any transaction to which any of the provisions of Chapter 1 of Pert 20 of the TCA apply.

  	28
	STAMP DUTY AND CAPITAL DUTY 

Mandatory Payment of Stamp Duty and Capital Duty

  	 
	28.1
	The Company has duly complied with and has no liability under Section 2 or Section 116 of the Stamp Duties Consolidation Act 1999 (as amended) (“SDCA”). 

Liability to Stamp Duty and Capital Duty

  	 
	28.2
	Every instrument in the possession of or under the control of any Group Company and which affords any right or rights to any Group Company which attract stamp duty or capital duty, have been duly and properly stamped, and any Group Company has no outstanding liability whatsoever for stamp duty or capital duty, however arising or payable, or interest or penalties relating to stamp duty or capital duty.

Reliefs, Exemptions or Reductions

  	 
	28.3
	No relief, exemption or reduction has been claimed or obtained by any Group Company from capital duty or stamp duty under Section 79 of the SDCA [associated company relief], Section 80 of the SDCA [reconstruction or amalgamation relief]or 119 of the SDCA [reconstruction or amalgamation relief].

 

 

95

 

Penalties

  	 
	28.4
	No Group Company has executed any instrument in respect of which fines could be imposed on it pursuant to Section 8 of the SDCA [penalties for fraud and for negligence in the preparation of instruments, etc.]

  	29
	VALUE ADDED TAX 

Value Added Tax Compliance

  	 
	29.1
	Every Group Company is a registered and taxable person for the purposes of the VATA and has complied in all respects with such legislation (including the due payment of any sums due) and all regulations made or notices issued thereunder and has maintained and obtained full, complete, correct and up to date records, invoices and other documents (as the case may be) including, without prejudice to the generality of the foregoing, monthly control statements, INTRASTAT and VIES returns appropriate or requisite for the purposes thereof.

  	 
	29.2
	No Group Company is nor has it been in arrears with its payments, returns (including where relevant monthly control statements and listings) or notifications under the. VITA or liable to any abnormal or non-routine payment or any forfeiture . or penalty or to the operation of any penal provisions contained therein.

  	 
	29.3
	Each Group Company has charged, and accounted for in a timely manner, value added tax at the appropriate rate in respect of all supplies of goods and services affected by the VATA.

Membership of a Group for VAT

  	 
	29.4
	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) any Group Company is or was treated as a member of a group for value added tax purposes, or the business activities of a Group Company is or was deemed to be carried on by any other person or the business activities of any other person is or as deemed to be carried on, by any Group Company. No notification has been received by any Group Company from the Revenue Commissioners under Section 8(8) VATA including especially a notification in the absence of a request from the taxable persons concerned.

VAT Exempt Supplies

  	 
	29.5
	No Group Company makes any supplies which are exempt from value added tax under the VATA.

VAT on Property Transactions

  	 
	29.6
	No liability for Taxation with particular reference to value added tax arise for any Group Company by reason of the granting or the acquiring of any leases

 

 

96

 

Immovable Goods

  	 
	29.7
	No Group Company is or has ever been engaged in a letting of immovable goods.

Computation of Profits of the Business

  	 
	29.8
	There is no dispute or disagreement outstanding at Completion nor is any contemplated at the date of this Agreement with any relevant Tax 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 any Group Company and there are no circumstances that would make it likely that any such dispute or disagreement may commence.

Qualifying Goods and Services

  	 
	29.9
	No Group Company is not authorised to receive supplies of qualifying goods and services at the zero rate of VAT.

  	30
	CAPITAL ACQUISITIONS TAX 

Liability of Sale Shares

  	 
	30.1
	There is no unsatisfied liability to capital acquisitions tax attached or attributable to the Sale Sharps and none of the Sale Shares are subject to a charge in favour of any Tax Authority

  	31
	ALLOWANCES 1 LOSSES

  	 
	31.1
	As at the Last Accounting Date, the Group has: 

  	 
	31.1.1
	capital allowances of €8,000,000; and

	 
	31.1.2
	accumulated tax losses of not less than €27,500,000 available for carrying forward

  	 
	31.2
	and none of the capital allowances or losses which are available to the Group are restricted or unavailable in any way under the current corporate structure and the entering into of this Agreement or Completion will not result in the loss, non availability or restriction of any of the capital allowances or losses which are available to the Group as set out above.

 

 

97

 

SCHEDULE 5

THE PROPERTIES

  	A.
	Leasehold Properties

The properties occupied by the Group Companies are as follows.

 

  	“Cardiff
	 
	Part ground, second and third floors, Hodge House, 114-116 Place, Cardiff

	“Swansea”
	 
	Part ground floor and first and second floor offices and see mezzanine, 27-29 High Street and 34A Orchard Street, Swansea

	“Block V”
	 
	Conduit House, Block V, East Point Business Park, Dublin 3, Ireland,

	“Block P1”
	 
	Conduit House, Block P1, East Point Business Park, Dublin 3, Ireland

Cardiff

Tenure: leasehold under a lease dated 8 March 2002 made between Hodge House Limited, 118 Limited and Conduit Enterprises Limited (formerly Conduit plc) as varied by a deed of surrender and a deed of variation both dated 15 July 2003 made between the same parties as the parties to the lease whereby the fourth floor of Hodge House was surrendered, out of the lease and the rent was reduced.

The obligations of 118 Limited as tenant under the lease are guaranteed by:

1. Conduit plc: the guarantee is contained in the lease, to which Conduit plc are a party; and

2. AIB Group (UK) plc: the guarantee, which is for a maximum amount of €286,294 plus VAT, is contained in a deed dated 15 July 2003 made between AIB (Group) plc and Hodge House Limited. By a deed dated 19 May 2003 118 Limited has indemnified AIB Group (UK) plc for liability under the guarantee.

Term: .15 years from 11 June 2001, with a right for the tenant to terminate the term on 11 June 2011 on giving at least 12 months’ notice.

Annual rent: £572,588, subject to review on 11 June 2006 and 11 June 2011. 

Rates per annum: £177,241

Service Charge per annum: £311,760

The above mentioned service charge should normally be approximately £150,000.00 to £160,000.00 and in consequence is in dispute. The amount mentioned above is the amount being invoiced by the Managing agents (Arlington Property) and the increase occurred approximately a year ago. Of the £311,760, approximately £140,000 relates to repairs to the - roof, which is disputed and refuted for reason that this latent defect was present when the Company took up tenancy. All other tenants concur. Furthermore, the balance of the increase has been contested also albeit at a slow pace.

 

 

98

 

A meeting took place on the 9th November 2005 where it was agreed that future budgets and their subsequent final accounts will in future be submitted in good time to the Group. The Group’s Facilities Manager wrote on the 12th November 2005 to the Management agents following this meeting outlining observations in relation to the various matters arising under the service charge. The Group called for response to these points and await the outcome of same.

The Cardiff Rates include just half of the 3rd Floor. 

Swansea

Tenure: leasehold under a lease dated 14 April 2003 made between Lowdale Properties Limited and 118 Limited.          /

Term: 10 years from April 2003, with a right for 118 Limited (but not any assignee of the lease) to terminate the term on 11 April 2008 on giving at least 6 months’ notice.

Annual rent: £99,000, 

subject to review on in April 2008. 

Rates per annum: £44,626

Service Charge per annum: £0

Block V

Lease of Block V was made between Edward B. Kerr, Liam Young, Michael Tunney, Liam Lenehan and Laurence K. Shields (“Landlords”) and Conduit Enterprises Limited (“Tenant”) and was dated 5 December, 1997.

The yearly rent is €403,658, broken up as to rental on the property of €369,458.00 per annum and rental on 38 parking spaces of €34,200.00 per annum.

The initial rent for Block V was reviewed on the 4 December 2002 and was increased on the 4 December 2002 by the sum of €97,924.12, Originally the rent under the Lease included the car-parking spaces but during renegotiation the rent and car parking spaces were broken out as set out above.

In relation to Block V the rent originally was €305,733.88 including 38 car parking spaces, reviewable after 5 years.

The local government rates payable on the premises for 2005 are €40,589 and the full rates are due for 2005 to the Dublin County Council.

The Service Charge on Block V, East Point is €26,736 per year.

The Insurance payable on the premises is €7,927.22 and same has been paid. to December 2005.

The Lease re Block V East Point relates to Registry of Deeds title only. There are certain services that run across the registered land contained in Folio 64160F that benefit all the blocks at East Point including Block V. The reference to lands in Folio 104996F contained in the Lease 

 

 

99

 

relate to the entry to the estate by way of the access road causeway leading from Alfie Byrne Road to the Estate (see below). The Lease re Block V East Point has not been registered in the Registry of Deeds nor has the said Lease been registered in the Land Registry in relation to the easements contained therein which said easements should be specified as a burden on Folio 64160F County Dublin.

The Landlord’s signature in the Lease has not been witnessed. 

Block P1

Lease of Block P1 was made between, Erin Executor & Trustee Co. Limited (“Landlord”), Dublin Port Company, Earlsfort East Point, and Conduit Enterprises Limited.

The Block P1 Rent is €906,212 including 61 car parking spaces. The rent is payable quarterly in advance on the 1 January, .1 April, 1 July and .14 October in each year of the demised term.

The local government rates payable on the premises for 2005 are €169,297. The service charge on Block P1 is €68,320 per annum. 

 

  	Switzerland
	 
	 

	Property:
	 
	Zentralstrasse 63a, 2502 Biel.

	Leased to:
	 
	Conduit Europe

	Tenure:
	 
	Leasehold under lease dated 01 October 2005.

	Term:
	 
	3 years from 1 October 2005 Austria

	Austria
	 
	 

	Property:
	 
	Nordbahnstrasse 361214 A-1020 Wien, 

	Leased to:
	 
	Conduit Enterprises GmbH

	Tenure:
	 
	Leasehold held under Lease dated 9’ September 2003

	Term:
	 
	5 Years from 1St October 2003

 

 

100

 

SCHEDULE 6:

TAX DEED

 

 

101

 

SCHEDULE 7

Escrow Agreement

 

 

102

 

SCHEDULE 8

REGISTERED IP RIGHTS

 

  	TRADEMARKS

	Status
	 
	Registration/

          Application

          Number
	 
	Registered

          Owner/Applicant
	 
	Place of

          Registration
	 
	Description
	 

	Registered
	 
	223725
	 
	Conduit Enterprises Ltd
	 
	Ireland
	 
	11850 Device
	 

	Registered
	 
	226889
	 
	Conduit Enterprises Ltd
	 
	Ireland
	 
	11860
	 

	Registered
	 
	226890
	 
	Conduit Enterprises Ltd
	 
	Ireland
	 
	11850
	 

	Registered
	 
	2238772
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	11850 (series 2)
	 

	Registered 
	 
	2238649
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118
	 

	Registered
	 
	2226133A
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118.CO.UK
	 

	Registered
	 
	2238665
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	11850
	 

	Registered
	 
	2243912
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	11850 Logo
	 

	`
	 
	 	 
	 	 
	 
	 
	 
	 

	Registered
	 
	2238662
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	11860
	 

	Registered
	 
	2291403
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118888
	 

	Registered
	 
	2215533
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118888
	 

	Registered
	 
	2325930
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118888
	 

	Registered
	 
	2325933
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118888 LOGO

          (Series 2)
	 

	Registered
	 
	22261338
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118COM
	 

	Registered
	 
	2226133C
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118NET
	 

	Registered
	 
	2254312
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118UK
	 

	Registered
	 
	2369452
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118.com
	 

	Registered
	 
	22261338
	 
	Conduit Enterprises Ltd
	 
	UK
	 
	118.com
	 

	Registered
	 
	203358
	 
	Conduit Enterprises Ltd
	 
	Austria
	 
	118811 Device (b&w)
	 

	Registered
	 
	203359
	 
	Conduit Enterprises Ltd
	 
	Austria
	 
	118811 device colour
	 

	Registered
	 
	214956
	 
	Conduit Enterprises Ltd
	 
	Austria
	 
	118811
	 

	Registered
	 
	490356
	 
	Conduit Europe SA
	 
	Switzerland
	 
	1850
	 

	Registered
	 
	493945
	 
	Conduit Europe SA
	 
	Switzerland
	 
	Conduit Logo
	 

	Registered
	 
	1757012
	 
	Conduit Enterprises Ltd
	 
	EU.
	 
	CONDUIT
	 

	Registered
	 
	1757525
	 
	Conduit Enterprises Ltd
	 
	EU
	 
	Conduit Logo
	 

	Registered
	 
	1763507
	 
	Conduit Enterprises Ltd
	 
	EU
	 
	118
	 

	Registered
	 
	1342526
	 
	Conduit Software Ltd
	 
	EU
	 
	SMS-DQ
	 

	Registered
	 
	1342500
	 
	Conduit Software Ltd
	 
	EU
	 
	SMS-DA
	 

	Registered
	 
	1342450
	 
	Conduit Software Ltd
	 
	EU
	 
	WAP-DA
	 

	Registered
	 
	1342492
	 
	Conduit Software Ltd
	 
	EU
	 
	WAP-DQ
	 

 

  	PATENTS

	Status
	 
	Registration/

          Application Number
	 
	Registered Owner/

          Applicant
	 
	Place of

          Registration
	 
	Description
	 

	Granted
	 
	98 0097
	 
	Fournir Limited
	 
	Ireland
	 
	A communications controller
	 

	Granted
	 
	9802993.7
	 
	Fournir Limited
	 
	UK
	 
	A communications controller
	 

	Granted
	 
	S2000/0671
	 
	Fournir Limited
	 
	Ireland
	 
	A short message method and system
	 

	Granted
	 
	00 650116.7
	 
	Fournir Limited
	 
	EPO
	 
	A short message method and system
	 

 

 

103

 

 

  	DOMAIN NAMES

	Domain Name
	 
	Country
	 
	Registrant

	118
	 
	 
	 
	 

	118.com
	 
	 
	 
	Conduit (118 UK)

	118co.ee
	 
	Estonia
	 
	Conduit Enterprises Ltd

	118.co.uk
	 
	UK
	 
	Conduit Enterprises Ltd

	118.com.mt
	 
	Malta
	 
	Conduit Enterprises Ltd

	118.com.pt
	 
	Portugal .
	 
	118 Ltd

	118.cz
	 
	Czech Republic
	 
	Conduit Enterprises Ltd

	118.co.za
	 
	South Africa
	 
	Conduit Enterprises Ltd

	118.fr
	 
	France
	 
	Conduit Enterprises Ltd

	118.gr
	 
	Greece
	 
	Conduit Enterprises Ltd

	118.hu
	 
	Hungary
	 
	Conduit Enterprises Ltd

	118.ie
	 
	Ireland
	 
	Conduit Enterprises Ltd

	118.lu
	 
	Luxembourg
	 
	Conduit Enterprises Ltd

	118.p1
	 
	Poland
	 
	Conduit Enterprises Ltd

	118.sk
	 
	Slovakia
	 
	Conduit Enterprises Ltd

	118com.co.uk
	 
	UK
	 
	Conduit Enterprises Ltd

	118info.at
	 
	Austria
	 
	Conduit Enterprises Ltd

	118info.de
	 
	Germany
	 
	Conduit Enterprises Ltd

	118info.nl
	 
	The Netherlands
	 
	Conduit Enterprises Ltd

	118net.co.uk
	 
	UK
	 
	Conduit Enterprises Ltd

	118uk.co.uk
	 
	UK
	 
	Conduit Enterprises Ltd

	118.com.pl
	 
	Poland
	 
	Conduit Enterprises Ltd

	118.es
	 
	Spain
	 
	Conduit Enterprises Ltd

	118.co.in
	 
	India
	 
	Conduit Enterprises Ltd

	118.ch
	 
	Switzerland
	 
	Conduit Enterprises Ltd

	118.co.nz
	 
	New Zealand
	 
	Conduit Enterprises Ltd

	1181za.com
	 
	South Africa
	 
	Conduit Enterprises Ltd

	118.com.pk
	 
	Pakistan
	 
	Conduit Enterprises Ltd

	118.com.mx
	 
	Mexico
	 
	Conduit Enterprises Ltd

	118.com.pe
	 
	Peru
	 
	Conduit Enterprises Ltd

	118.com.es
	 
	Spain
	 
	Conduit Enterprises Ltd

	Info118
	 
	 
	 
	 

	info118.at
	 
	Austria
	 
	Conduit Enterprises Ltd

	info118.be
	 
	Belgium
	 
	Conduit. Enterprises Ltd

	info118.ch
	 
	Switzerland
	 
	Conduit Enterprises Ltd

	info118.se
	 
	Sweden
	 
	Conduit Enterprises Ltd

	info118.com.pt
	 
	Portugal
	 
	Conduit Enterprises Ltd

	info118.de
	 
	Germany
	 
	Conduit Enterprises Ltd

	info118.fr
	 
	France
	 
	Conduit Enterprises Ltd

	info118.ie
	 
	Ireland
	 
	Conduit Enterprises Ltd

	info118.it
	 
	Italy
	 
	Conduit Enterprises Ltd

	info118.lt
	 
	Lithuania
	 
	Conduit Enterprises Ltd

	info118.lv
	 
	Latvia
	 
	Conduit Enterprises Ltd

	info118.info
	 
	 
	 
	Conduit Enterprises Ltd

	info118.net
	 
	 
	 
	Conduit Enterprises Ltd

	info118.org
	 
	 
	 
	Conduit Enterprises Ltd

	info118.com
	 
	 
	 
	Conduit Enterprises Ltd

	Directory Enquiries
	 
	,
	 
	 

	11850.ie
	 
	Ireland
	 
	Conduit Enterprises Ltd

	11850.info
	 
	Ireland
	 
	Conduit Enterprises Ltd

 

 

104

 

 

  	118888.co.uk
	 
	UK
	 
	Conduit Enterprises Ltd

	118899.co.uk
	 
	UK
	 
	118 Ltd

	1850.ch
	 
	Switzerland
	 
	Conduit Enterprises Ltd

	Elf88elf.at
	 
	Austria
	 
	Conduit Enterprises Gmbh

	11850.com
	 
	 
	 
	Conduit Enterprises Ltd

	11850enquiries.com
	 
	 
	 
	Conduit Enterprises Ltd

	11860.com
	 
	 
	 
	118 Ltd

	118811.info
	 
	 
	 
	Conduit Enterprises Ltd

	118888.info
	 
	 
	 
	Conduit Enterprises Ltd

	1850.info
	 
	 
	 
	Conduit Enterprises Ltd

	118040.com
	 
	 
	 
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	118838.com
	 
	 
	 
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	118838.net
	 
	 
	 
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	118840.net
	 
	 
	 
	Conduit Enterprises Ltd

	118848.com
	 
	 
	 
	Conduit Enterprises Ltd

	118848.net
	 
	 
	 
	Conduit Enterprises Ltd

	Conduit
	 
	 
	 
	 

	Conduit.at
	 
	Austria
	 
	Conduit Enterprises Gmbh

	Conduit.ch
	 
	Switzerland
	 
	Conduit Enterprises Ltd

	Conduit.ie
	 
	Ireland
	 
	Conduit Enterprises Ltd

	conduiteurope.com
	 
	 
	 
	Conduit Enterprises Ltd

	conduituk.com
	 
	 
	 
	Conduit Enterprises Ltd

	conduituk.net
	 
	 
	 
	Conduit Enterprises Ltd

	directoryaffairs.co.uk
	 
	 
	 
	Conduit Enterprises Ltd

	directoryaffairs.com
	 
	 
	 
	Conduit Enterprises Ltd

	Italy
	 
	 
	 
	 

	qui1234.it
	 
	Italy
	 
	Conduit Enterprises Ltd

	pronto1234.it
	 
	Italy
	 
	Conduit Enterprises Ltd

	sempre1234
	 
	Italy
	 
	Conduit Enterprises Ltd

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	Italy
	 
	Conduit Enterprises Ltd

	pronto412.it
	 
	Italy
	 
	Conduit Enterprises Ltd

	sempre412.it
	 
	Italy
	 
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	info4321.it
	 
	Italy
	 
	Conduit Enterprises Ltd

	qui4321,it
	 
	Italy
	 
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	pronto4321.it
	 
	Italy
	 
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	sempre4321.it
	 
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	pronto12.it
	 
	Italy
	 
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	qui12.it
	 
	Italy
	 
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	info1250.it
	 
	Italy
	 
	Conduit Enterprises Ltd

	1250info.it
	 
	Italy
	 
	Conduit Enterprises Ltd

	pronto1250.it
	 
	Italy
	 
	Conduit Enterprises Ltd

	.eu
	 
	 
	 
	 

	info118.eu
	 
	 
	 
	Conduit Enterprises Ltd

	conduit.eu
	 
	 
	 
	Conduit Enterprises Ltd

	118.eu
	 
	 
	 
	Conduit Enterprises Ltd

 

 

105

 

SCHEDULE 9

CONDUCT OF BUSINESS BETWEEN SIGNING AND COMPLETION

  	1.
	The Vendors, hereby covenant with and undertake to the Purchaser that no material action will be taken (save as herein otherwise contemplated or required or with the prior written consent of the Promoters or the Purchaser), by them or by any Group Company with the intent of prejudicing the continuance for the benefit of a Group Company of any or all material contracts, engagements, business connections and orders subsisting at the date hereof or hereafter in relation to the Business.

  	2.
	The Vendors hereby covenant with and undertake to the Purchaser that the Purchaser and its agents will, upon reasonable notice, be allowed access to the books and records of. each Group Company including, without limitation, the statutory books, minute books, leases and contracts in the possession or control of the Group Company;

  	3.
	The Vendors hereby covenant with and undertake to the Purchaser that the Vendors shall not at any time prior to Completion:

  	 
	(a)
	dispose or attempt to dispose of any material interest in the Shares or grant any option over, or mortgage, charge or otherwise encumber or dispose of any of the Shares; or

  	 
	(b)
	enter into discussions with any persons as regards the possible sale of the Sale Shares, the Business or any material part of the Business’ other than discussions in connection with the sale of the Sale Shares to the Purchaser.

  	4.
	Without prejudice to the foregoing, the Vendors hereby covenant with and undertake to the Purchaser that each Group Company shall not at any time prior to Completion without the prior written consent of the Promoters or the Purchaser:

  	 
	(a)
	permit or cause to be proposed any alteration to its share capital (including any increase thereof) or the rights attaching to its shares;

  	 
	(b)
	create, allot, issue, redeem, consolidate, convert or sub-divide any share or loan capital or grant or agree to grant any options for the issue of any share or loan capital;

  	 
	(c)
	subscribe or otherwise acquire, or dispose of any shares in the capital of any Group Company;

  	 
	(d)
	acquire or dispose of the whole or any material part of the undertaking of it or of any other person, firm or company or acquire or dispose of a material asset except in the ordinary course of its business;

  	 
	(e)
	send any notice to its shareholders or pass any shareholder resolution;

 

 

106

 

  	 
	(f)
	voluntarily cease or propose to cease to carry on its business or be wound up or enter into receivership or any form of management or administration over its assets or;

  	 
	(g)
	take or refrain from taking any action which would be reasonably likely to cause any of its material insurances to lapse or intentionally do anything which would make any policy of insurance void, null or voidable or might result in an increase in the premium payable under any policy of insurance or prejudice the ability to effect equivalent insurance in the future;

  	 
	(h)
	make any change to its auditors, its bankers or the terms of the mandate given to such bankers in relation to its account(s), or its accounting reference date;

  	 
	(i)
	borrow material monies (other than. pursuant to facilities disclosed or referred to in the Disclosure Letter) or accept material credit (other than normal trade credit) or make payments out of or drawings on its bank accounts other than in accordance with the ordinary course of business and its usual practice prior to the date of this Agreement or amend the terms of its borrowings or indebtedness. in the nature of borrowing;

  	 
	(j)
	make any material payment otherwise than on an arm’s length basis save pursuant to any transactions which may be disclosed in the Disclosure Letter;

  	 
	(k)
	enter into or give any material guarantee of or indemnity or contract of suretyship for or otherwise commit itself in respect of the due payment of money or the performance of any contract, engagement or obligation of any other person or body;

  	 
	(l)
	in relation to any of the Properties:

  	 
	(i)
	apply for a planning permission or other permit or licence or implement one already obtained but not implemented;

  	 
	(ii)
	change its existing use;

  	 
	(iii)
	terminate, or give a notice to terminate, a lease tenancy or licence;

  	 
	(iv)
	apply for consent to do something requiring consent under a lease, tenancy or licence;

  	 
	(v)
	grant or refuse an application by a tenant or occupier to do something requiring its consent under a lease, tenancy or licence; or

  	 
	(vi)
	agree a new rent or fee payable under a lease, tenancy or licence.

 

 

 

107

 

  	 
	(m)
	propose, pay, declare or make any material dividend or propose, declare or make any other material distribution to shareholders in their capacity as such;

  	 
	(n)
	enter into any material partnership or joint venture;

  	 
	(o)
	incur any capital expenditure (including obligations under hire purchase and leasing arrangements other than those which have been disclosed in the Disclosure Letter) exceeding in aggregate EUR50,000 or as regards any single item EUR25,000;

  	 
	(p)
	dispose of any asset of a capital nature with a book or market value in excess of EUR50,000;

  	 
	(q)
	provide a gratuitous benefit to an officer or employee (or any of their dependants) or employ, engage or terminate the employment or engagement of a person with a salary in excess of EUR75,000;

  	 
	(r)
	vary or make any binding decisions on the terms of employment and service of any officer or employee increase or vary the salary (other than in the ordinary course of business) or other benefits of any such officer or employee or appoint or dismiss any officer or such employee with a salary in excess of EUR75,000;

  	 
	(s)
	create or permit they creation of or suffer to subsist any material Encumbrance ov9i- the whole or any part pf its assets or redeem any Encumbrance over, any asset of any Group Company other than Encumbrances disclosed or referred to in the Disclosure Letter or created in the ordinary course of business;

  	 
	(t)
	make any material loan or give ‘any material credit (other than normal trade credit) or acquire any loan capital of any corporate body (wherever incorporated);

  	 
	(u)
	surrender or agree to any material change in the terms of any material agreement to which it is from time to time a party;

  	 
	(v)
	amend or agree to amend any of the terms of the contracts with each of Vodafone, Orange UK or Bord Gais;

  	 
	(w)
	enter into or amend or vary any leasing, hire, hire purchase or other agreement for payment on deferred terms;

  	 
	(x)
	make any material change in its business or do any material act or thing outside the ordinary course of its business;

  	 
	(y)
	commence any litigation (save for the collection of debts arising in the ordinary course of business) or settle or compromise any claim or dispute or waive a right in relation to litigation or arbitration proceedings;

  	 
	(z)
	make a claim under section .597 of the TCA which affects an asset owned by any Group Company;

 

 

108

 

  	 
	(aa)
	save as may be required by law or the terms of the Pension Scheme, amend or discontinue (wholly or partly) the Pension Scheme or communicate to any member or former member, officer or employee of the Pension Scheme a plan, proposal or an intention to amend, discontinue (wholly or partly), or exercise a discretion, in relation to the Pension Scheme; and

  	6.
	The Purchaser shall be entitled to (i) nominate one person to act as an observer at board meetings of the Company who shall have the right to receive notice of and attend at all meetings of the board of directors of the Company prior to the Long Stop Date, and (ii) appoint such person or persons (at the cost and expense of the Purchaser) to oversee the activities and financial operations of the Group as it may in its sole discretion deem necessary.

 

 

 

 

109

 

 

  IN WITNESS whereof these presents have been entered into the day and year first herein written.

  SIGNED by Hugh Cooney                                                                                                   /s/ Hugh Cooney                                                

  the duly authorised representative

  of KANDEL LIMITED

  in the presence of:

  Signature of witness: 

  Name:

  Address:

  Occupation:

SIGNED by Eugene McGale                                                                                               /s/ Eugene McGale                                            

the duly authorised representative

of BANK OF SCOTLAND (IRELAND) LIMITED

in the presence of:

Signature of witness:

Name: 

Address:

Occupation:

EXECUTED AS A DEED BY

INVESTCORP TECHNOLOGY VENTURES II, L.P., 

a Cayman Islands exempted limited partnership

 

  	By:  
	ITV Limited, as General Partner of

Investcorp Technology Fund II Limited 

Partnership, its General Partner.

	By
	/s/ Rangarajan Raghavan

	Name: 
	Rangarajan Raghavan

	Title:
	Director

 

 

 

 

 

110

 

SIGNED by

INVESTCORP TECHNOLOGY VENTURES II, L.P. 

a Cayman Islands exempted limited partnership 

as Promoter for and on behalf of

INVESTEXX HOLDINGS LIMITED

By: ITV Limited, as General Partner of 

Investcorp Technology Fund II Limited 

Partnership, its General Partner

 

  	 
	 
	 

	By: 
	/s/ Rangarajan Raghavan
	 
	 
	 

	Name:
	Rangarajan Raghavan
	 
	 
	 

	Title:
	Director
	 
	 
	 

 

  	in the presence of:
	 
	 
	 

	 	 	 	 
	/s/ Lynda Mayoyo  
	 
	 
	 

	Signature of witness:

          Name: Lynda Mayoyo

          Address: P.O. Box 5340, Manama

               Kingdom of Bahrain
	 
	 
	 

Occupation: Paralegal

 

  	EXECUTED AS A DEED 

          BY InfoNXX, Inc.

          a Delaware incorporated corporation
	 
	 

	

By: 
	/s/ David Freedman
	 
	 
	 

	Name:
	David Freedman
	 
	 
	 

	Title:
	CFO
	 
	 
	 

 

 

 

111

 

 

  	SIGNED by Liam Young
	 
	/s/ Liam Young

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Pamela O’ Loughlin
	 
	 

	the lawfully appointed 
	 
	/s/ Pamela O’ Loughlin

	attorney of Eddie Kerr 
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed
	 
	 

	attorney of Carol Moffet 
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed 
	 
	 

	attorney of Tom Kirwan 
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed 
	 
	 

	attorney of Sean Fitzpatrick 
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed 
	 
	 

	attorney of Tom Jones 
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed 
	 
	 

	attorney of Neil Evans 
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

 

 

 

112

 

 

  	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed
	 
	 

	attorney of Will Lewis
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Mark Buckley
	 
	/s/ Mark Buckley

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed
	 
	 

	attorney of Denis Creighton
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed 
	 
	 

	attorney of Colm Coyle
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed 
	 
	 

	attorney of Neil Parkinson
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by Hugh Cooney
	 
	/s/ Hugh Cooney

	the lawfully appointed 
	 
	 

	attorney of Michael Walsh
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

 

 

 

113

 

 

  	 
	 
	 

	SIGNED by the duly authorised
	 
	/s/ Hugh Cooney

	representative of Westfront Limited
	 
	/s/ Mark Buckley

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by the duly authorised
	 
	/s/ Hugh Cooney

	representative of Dryvale Limited
	 
	/s/ Mark Buckley

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by the duly authorised
	 
	/s/ Hugh Cooney

	representative of Anglo Irish
	 
	 

	Private Equity Fund LP
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	SIGNED by the duly authorised
	 
	/s/ Hugh Cooney

	representative of Anglo Irish 
	 
	 

	Bank Nominees Limited
	 
	 

	in the presence of
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

 

 

 

114

 

 

  	
                        /s/ Peter Josika

      
 	 
	 
	 

	SIGNED SEALED AND DELIVERED

          by Peter Josika in the presence of:
	 
	 
	 

	
                        /s/ M. Schweizer

      
 	 
	 
	 

	Witness Signature
	 
	 
	 

	M. Schweizer
	 
	 
	 

	Witness Name
	 
	 
	 

 

  	SIGNED SEALED AND DELIVERED

          by Iris Seybold in the presence of:
	 
	 
	 

	/s/ Iris Seybold 
	 
	 
	 

	Witness Signature
	 
	 
	 

	W. Seybold 
	 
	 
	 

	Witness Name
	 
	 
	 

 

  	SIGNED SEALED AND DELIVERED

          by Dorothy O’Byrne in the presence of:
	 
	 
	 

	/s/ Dorothy O’Byrne
	 
	 
	 

	Witness Signature
	 
	 
	 

	/s/ Mark Buckley
	 
	 
	 

	Witness NameEXHIBIT 10.17

EXECUTION COPY

 

 

PURCHASE AGREEMENT

among

BC HOLDING III CORPORATION,

ONSLOW HOLDINGS, LLC

and

INFONXX, INC.

August 30, 2006

 

 

 

 

TABLE OF CONTENTS

 

	
                         
 	
                         
 	
                         
 	
                        Page
 
	
                        ARTICLE I  PURCHASE AND SALE OF INTERESTS
 	
                         
 	
                        1
 
	
                         
 	
      1.1
 	
                         
 	
                        Purchase and Sale of Interests
 	
                         
 	
      1
 
	
                         
 	
                        1.2
 	
                         
 	
                        Consideration
 	
                         
 	
                        1
 
	
                         
 	
                        1.3
 	
                         
 	
                        Purchase Price Adjustment
 	
                         
 	
                        3
 
	
                         
 	
                        1.4
 	
                         
 	
                        Closing
 	
                         
 	
                        4
 
	
                         
 	
                        1.5
 	
                         
 	
                        Assets and Liabilities
 	
                         
 	
                        5
 
	
                         
 	
                        1.6
 	
                         
 	
                        Prime Therapeutics Contract
 	
                         
 	
                        5
 
	
                        ARTICLE II  REPRESENTATIONS AND WARRANTIES OF THE SELLERS
 	
                         
 	
                        6
 
	
                         
 	
                        2.1
 	
                         
 	
                        Organization and Good Standing
 	
                         
 	
                        6
 
	
                         
 	
                        2.2
 	
                         
 	
                        [INTENTIONALLY OMITTED]
 	
                         
 	
                        6
 
	
                         
 	
                        2.3
 	
                         
 	
                        No Violations
 	
                         
 	
                        6
 
	
                         
 	
                        2.4
 	
                         
 	
                        Capitalization
 	
                         
 	
                        6
 
	
                         
 	
                        2.5
 	
                         
 	
                        Financial Statements
 	
                         
 	
                        7
 
	
                         
 	
                        2.6
 	
                         
 	
                        Absence of Certain Changes
 	
                         
 	
                        7
 
	
                         
 	
                        2.7
 	
                         
 	
                        Contracts
 	
                         
 	
                        8
 
	
                         
 	
                        2.8
 	
                         
 	
                        Leased Real Estate
 	
                         
 	
                        9
 
	
                         
 	
                        2.9
 	
                         
 	
                        Tangible Assets
 	
                         
 	
                        9
 
	
                         
 	
                        2.10
 	
                         
 	
                        Compliance With Laws
 	
                         
 	
                        9
 
	
                         
 	
                        2.11
 	
                         
 	
                        Licenses and Permits
 	
                         
 	
                        9
 
	
                         
 	
                        2.12
 	
                         
 	
                        Employees and Employee Benefits
 	
                         
 	
                        10
 
	
                         
 	
                        2.13
 	
                         
 	
                        Litigation
 	
                         
 	
                        11
 
	
                         
 	
                        2.14
 	
                         
 	
                        Taxes
 	
                         
 	
                        12
 
	
                         
 	
                        2.15
 	
                         
 	
                        Accounts Receivable
 	
                         
 	
                        13
 
	
                         
 	
                        2.16
 	
                         
 	
                        Intellectual Property Rights
 	
                         
 	
                        13
 
	
                         
 	
                        2.17
 	
                         
 	
                        Environmental Matters
 	
                         
 	
                        14
 
	
                         
 	
                        2.18
 	
                         
 	
                        Insurance
 	
                         
 	
                        14
 
	
                         
 	
                        2.19
 	
                         
 	
                        Bank Accounts
 	
                         
 	
                        14
 
	
                         
 	
                        2.20
 	
                         
 	
                        Brokers and Finders
 	
                         
 	
                        14
 
	
                         
 	
                        2.21
 	
                         
 	
                        Customers and Suppliers
 	
                         
 	
                        14
 
	
                         
 	
                        2.22
 	
                         
 	
                        Employees
 	
                         
 	
                        15
 
	
                         
 	
                        2.23
 	
                         
 	
                        Affiliate Transactions
 	
                         
 	
                        15
 
	
                         
 	
                        2.24
 	
                         
 	
                        No Material Shared Assets or Services
 	
                         
 	
                        15
 
	
                         
 	
                        2.25
 	
                         
 	
                        Subsidiaries
 	
                         
 	
  15
 

 

 

i

 

TABLE OF CONTENTS

(continued)

 

	
                         
 	
       
 	
                         
 	
                         
 	
                         
 	
      Page
 
	
                         
 	
                        2.26
 	
                         
 	
                        Sufficiency of the Assets
 	
                         
 	
                        16
 
	
                         
 	
                        2.27
 	
                         
 	
                        Telus
 	
                         
 	
                        16
 
	
                         
 	
                        2.28
 	
                         
 	
                        BC Holding Representations
 	
                         
 	
                        16
 
	
                         
 	
                        2.29
 	
                         
 	
                        Onslow Representations
 	
                         
 	
                        16
 
	
                         
 	
                        2.30
 	
                         
 	
                         Disclaimer
 	
                         
 	
                        17
 
	
                        ARTICLE III  REPRESENTATIONS AND WARRANTIES OF THE BUYER
 	
                         
 	
                        17
 
	
                         
 	
                        3.1
 	
                         
 	
                        Organization and Power; Foreign Qualification
 	
                         
 	
                        17
 
	
                         
 	
                        3.2
 	
                         
 	
                        Authorization and Enforceability of Agreement
 	
                         
 	
                        17
 
	
                         
 	
                        3.3
 	
                         
 	
                        No Conflicts
 	
                         
 	
                        18
 
	
                         
 	
                        3.4
 	
                         
 	
                        Brokers and Finders
 	
                         
 	
                        18
 
	
                         
 	
                        3.5
 	
                         
 	
                        Litigation
 	
                         
 	
                        18
 
	
                         
 	
                        3.6
 	
                         
 	
                        Funding
 	
                         
 	
                        18
 
	
                         
 	
                        3.7
 	
                         
 	
                        Purchase Entirely for Own Account
 	
                         
 	
                        18
 
	
                         
 	
                        3.8
 	
                         
 	
                        Restricted Securities
 	
                         
 	
                        18
 
	
                         
 	
                        3.9
 	
                         
 	
                        Accredited Investor
 	
                         
 	
                        18
 
	
                         
 	
                        3.10
 	
                         
 	
                        Disclaimer
 	
                         
 	
                        19
 
	
                        ARTICLE IV  COVENANTS
 	
                         
 	
                        19
 
	
                         
 	
                        4.1
 	
                         
 	
                        Covenants Pending Closing
 	
                         
 	
                        19
 
	
                         
 	
                        4.2
 	
                         
 	
                        Consents and Approvals; Fulfillment of Conditions
 	
                         
 	
                        21
 
	
                         
 	
                        4.3
 	
                         
 	
                        Amendment to Schedules
 	
                         
 	
                        21
 
	
                         
 	
                        4.4
 	
                         
 	
                        Access
 	
                         
 	
                        22
 
	
                         
 	
                        4.5
 	
                         
 	
                        Publicity
 	
                         
 	
                        22
 
	
                         
 	
                        4.6
 	
                         
 	
                        Post-Closing Maintenance of Records
 	
                         
 	
                        22
 
	
                         
 	
                        4.7
 	
                         
 	
                        Confidentiality
 	
                         
 	
                        22
 
	
                         
 	
                        4.8
 	
                         
 	
                        Cooperation
 	
                         
 	
                        23
 
	
                         
 	
                        4.9
 	
                         
 	
                        Certain Tax Matters
 	
                         
 	
                        23
 
	
                         
 	
                        4.10
 	
                         
 	
                        Employment Agreements
 	
                         
 	
                        26
 
	
                         
 	
                        4.11
 	
                         
 	
                        Bonus Plan
 	
                         
 	
                        26
 
	
                         
 	
                        4.12
 	
                         
 	
                        Non-Solicit, Non-Investment and Non-Acquisition Agreement
 	
                         
 	
                        26
 
	
                         
 	
                        4.13
 	
                         
 	
                        Performance Bonds
 	
                         
 	
                        26
 
	
                         
 	
                        4.14
 	
                         
 	
                        Employee Benefit Plans
 	
                         
 	
                        26
 
	
                         
 	
                        4.15
 	
                         
 	
                        Platinum Covenant
 	
                         
 	
                        27
 
	
                         
 	
                        4.16
 	
                         
 	
                        Stephen B. Baus Covenant
 	
                         
 	
  27
 

 

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
                         
 	
       
 	
                         
 	
                         
 	
                         
 	
      Page
 
	
                        ARTICLE V  CONDITIONS TO THE OBLIGATIONS OF THE BUYER
 	
                         
 	
                        27
 
	
                         
 	
                        5.1
 	
                         
 	
                        Representations, Warranties and Covenants of the Sellers
 	
                         
 	
                        27
 
	
                         
 	
                        5.2
 	
                         
 	
                        Absence of Litigation or Investigation
 	
                         
 	
                        28
 
	
                         
 	
                        5.3
 	
                         
 	
                        Material Consents
 	
                         
 	
                        28
 
	
                         
 	
                        5.4
 	
                         
 	
                        Delivery of Documents
 	
                         
 	
                        28
 
	
                         
 	
                        5.5
 	
                         
 	
                        No Material Adverse Effect
 	
                         
 	
                        29
 
	
                         
 	
                        5.6
 	
                         
 	
                        Cash Balance
 	
                         
 	
                        29
 
	
                        ARTICLE VI  CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
 	
                         
 	
                        29
 
	
                         
 	
                        6.1
 	
                         
 	
                        Representations and Warranties of the Buyer
 	
                         
 	
                        29
 
	
                         
 	
                        6.2
 	
                         
 	
                        Absence of Litigation or Investigation
 	
                         
 	
                        29
 
	
                         
 	
                        6.3
 	
                         
 	
                        Delivery of Documents
 	
                         
 	
                        29
 
	
                         
 	
                        6.4
 	
                         
 	
                        Deposit of Escrow Amount
 	
                         
 	
                        29
 
	
                        ARTICLE VII  SURVIVAL; INDEMNIFICATION
 	
                         
 	
                        30
 
	
                         
 	
                        7.1
 	
                         
 	
                        Survival Provisions; Assertion of Claims
 	
                         
 	
                        30
 
	
                         
 	
                        7.2
 	
                         
 	
                        Indemnity
 	
                         
 	
                        30
 
	
                         
 	
                        7.3
 	
                         
 	
                        Limitations on Indemnification
 	
                         
 	
                        31
 
	
                         
 	
                        7.4
 	
                         
 	
                        Direct Claims for Indemnity
 	
                         
 	
                        31
 
	
                         
 	
                        7.5
 	
                         
 	
                        Third Party Claims
 	
                         
 	
                        32
 
	
                         
 	
                        7.6
 	
                         
 	
                        Transfer Taxes
 	
                         
 	
                        33
 
	
                         
 	
                        7.7
 	
                         
 	
                        Mitigation
 	
                         
 	
                        33
 
	
                         
 	
                        7.8
 	
                         
 	
                        Exclusive Remedy
 	
                         
 	
                        33
 
	
                         
 	
                        7.9
 	
                         
 	
                        Damages
 	
                         
 	
                        33
 
	
                         
 	
                        7.10
 	
                         
 	
                        No Double Recovery
 	
                         
 	
                        33
 
	
                         
 	
                        7.11
 	
                         
 	
                        Adjustments to Purchase Price
 	
                         
 	
                        34
 
	
                         
 	
                        7.12
 	
                         
 	
                        Escrow Arrangements
 	
                         
 	
                        34
 
	
                        ARTICLE VIII  TERMINATION
 	
                         
 	
                        35
 
	
                         
 	
                        8.1
 	
                         
 	
                        Termination
 	
                         
 	
                        35
 
	
                         
 	
                        8.2
 	
                         
 	
                        Effect of Termination
 	
                         
 	
                        35
 
	
                        ARTICLE IX  GENERAL PROVISIONS
 	
                         
 	
                        36
 
	
                         
 	
                        9.1
 	
                         
 	
                        Expenses; Sellers’ Obligations
 	
                         
 	
                        36
 
	
                         
 	
                        9.2
 	
                         
 	
                        Further Assurances
 	
                         
 	
                        36
 
	
                         
 	
                        9.3
 	
                         
 	
                        Amendments and Waivers
 	
                         
 	
                        36
 
	
                         
 	
                        9.4
 	
                         
 	
                        Notices
 	
                         
 	
  36
 

 

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
                         
 	
       
 	
                         
 	
                         
 	
                         
 	
      Page
 
	
                         
 	
                        9.5
 	
                         
 	
                        Successors and Assigns, No Third Party Beneficiaries
 	
                         
 	
                        38
 
	
                         
 	
                        9.6
 	
                         
 	
                        Sellers’ Representative
 	
                         
 	
                        38
 
	
                         
 	
                        9.7
 	
                         
 	
                        Entire Agreement
 	
                         
 	
                        38
 
	
                         
 	
                        9.8
 	
                         
 	
                        Severability
 	
                         
 	
                        38
 
	
                         
 	
                        9.9
 	
                         
 	
                        Governing Law; Jurisdiction; Waiver of Jury Trial
 	
                         
 	
                        39
 
	
                         
 	
                        9.10
 	
                         
 	
                        Incorporation of Recitals, Schedules and Annexes
 	
                         
 	
                        39
 
	
                         
 	
                        9.11
 	
                         
 	
                        Construction
 	
                         
 	
                        39
 
	
                         
 	
                        9.12
 	
                         
 	
                        Counterparts; Facsimile Signatures
 	
                         
 	
  40
 

 

 

iv

 

 

PURCHASE AGREEMENT

This PURCHASE AGREEMENT (the “Agreement”) is dated as of August 30, 2006 and is entered into by and among BC HOLDING III CORPORATION, a Delaware corporation (“BC Holding”), ONSLOW HOLDINGS, LLC, a California limited liability company (“Onslow,” and together with BC Holding, the “Sellers”), on the one hand, and INFONXX, INC., a Delaware corporation (the “Buyer”), on the other hand.

WHEREAS, BC Holding owns all of the outstanding Class A limited liability company interests of the Company (the “Class A Interests”);

WHEREAS, Onslow owns all of the outstanding Class B limited liability company interests of the Company (the “Class B Interests,” and together with the Class A Interests, the “Interests”);

WHEREAS, there are no equity interests in the Company other than the Interests;

WHEREAS, the Buyer desires to acquire all of the Interests from the Sellers, and the Sellers desire to sell all of their Interests in the Company; and

WHEREAS, the capitalized terms used herein shall have the meanings ascribed to such terms in Annex A attached hereto.

NOW, THEREFORE, in consideration of the mutual agreements contained herein and such other consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

ARTICLE I

PURCHASE AND SALE OF INTERESTS

1.1 Purchase and Sale of Interests. Subject to the terms and conditions of this Agreement, at the Closing, each of the Sellers shall transfer and deliver to the Buyer, and the Buyer shall purchase and accept from each of the Sellers, all of the right, title and interest of the applicable Seller, as of the Closing Date, in and to the Class A Interests and the Class B Interests owned by the applicable Seller. 

1.2 Consideration.

(a) The purchase price for the Interests (the “Purchase Price”) shall equal Forty-Nine Million Eight Hundred Thousand Dollars ($49,800,000), as adjusted pursuant to Section 1.3. 

(b) At the Closing, the Buyer shall pay the Sellers an amount equal to the Purchase Price less the Bank Debt, the Participation Plan Payments under Section 1.2(d) and the Escrow Amount, and as adjusted pursuant to Section 1.3(a) (the “Closing Consideration”), by a

 

 

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wire transfer of immediately available funds to accounts designated by the Sellers at least three (3) business days before the Closing as follows:

(i) In respect of the Class A Interests, BC Holding shall receive an amount in cash equal to the product of 51% and the Closing Consideration (the “Class A Interest Closing Consideration”); and

(ii) In respect of the Class B Interests, Onslow shall receive an amount in cash equal to the product of 49% and the Closing Consideration (the “Class B Interest Closing Consideration”).

(c) At the Closing, the Bank Debt outstanding on the Closing Date will be fully repaid by the Buyer on behalf of the Company and the Subsidiary. In order to facilitate such repayment, no less than two (2) business days prior to the Closing, the Sellers shall cause the Company to obtain a payoff letter for the Bank Debt, in a form reasonably satisfactory to the Buyer. At the Closing, the Buyer will repay on behalf of the Company and the Subsidiary the Bank Debt by wire transfer of immediately available funds pursuant to and in accordance with the terms of the payoff letter.

(d) At the Closing, the Buyer will deposit by wire transfer of immediately available funds in an amount that the Sellers will notify the Buyer of at least two (2) business days prior to the Closing to an account of the Company designated by the Sellers at least three (3) business days prior to the Closing (the “Participation Plan Payments”), such funds to be used by the Company and the Subsidiary to pay as of the Closing a portion of the obligations and liabilities of the Company and the Subsidiary under the Company’s 2005 Participation Plan (the “Participation Plan”). Such deposit by the Buyer shall be evidenced by a written demand loan from the Buyer to the Company.

(e) At the Closing, the Buyer shall deposit Four Million Nine Hundred Eighty Thousand Dollars ($4,980,000) (the “Escrow Amount”) with the Escrow Agent by a wire transfer of immediately available funds to be held in accordance with the terms and conditions of Section 7.12 and the Escrow Agreement, which Escrow Amount shall be segregated into two separate sub-accounts as follows: 

(i) An amount equal to Two Million Five Hundred Thirty Nine Thousand Eight Hundred Dollars ($2,539,800) (the “BC Holding Escrow Amount”) shall be held to satisfy BC Holding’s indemnification obligations pursuant to Section 7.2 and Purchase Price adjustments up to $200,000 pursuant to Section 1.3(d); and

(ii) An amount equal to Two Million Four Hundred Forty Thousand Two Hundred Dollars ($2,440,200) (the “Onslow Escrow Amount”) shall be held to satisfy Onslow’s indemnification obligations pursuant to Section 7.2 and Purchase Price adjustments up to $200,000 pursuant to Section 1.3(d).

The Escrow Amount, together with any accrued interest thereon,  shall be released to the Buyer or the Sellers, as the case may be, in accordance with the terms of Section 7.12 and the Escrow Agreement.

 

 

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1.3 Purchase Price Adjustment.

(a) Net Debt. No later than three (3) business days prior to the anticipated Closing Date, the Sellers shall prepare and deliver to Buyer a written statement setting forth the Sellers’ good faith estimate of Net Debt as of the Closing Date. If the Net Debt as agreed by the parties (the “Estimated Net Debt”) is greater than zero, the Closing Consideration shall be decreased by the amount by which the Estimated Net Debt is greater than zero. If the Estimated Net Debt is less than zero, the Closing Consideration shall be increased by the amount by which the Estimated Net Debt is less than zero. For purposes of the Estimated Net Debt calculation Bank Debt shall be zero.

(b) Buyer’s Statement; the Sellers’ Review. No later than forty-five (45) days following the Closing Date, the Buyer shall prepare and deliver to the Sellers a statement of the Net Working Capital and Net Debt as of the Closing Date (“Buyer’s Statement”), which shall be prepared in accordance with U.S. generally accepted accounting principles, consistently applied and consistent with the Company’s previously prepared financial statements (“GAAP”). The Sellers shall have a period of forty-five (45) days from the receipt of
Buyer’s Statement (the “Review Period”) to review Buyer’s Statement. During the Review Period, the Buyer shall make available to the Sellers such accounting records of the Company and the Subsidiary as may be relevant to the Sellers’ review of Buyer’s Statement. If as a result of such review, the Sellers disagree with Buyer’s Statement, the Sellers shall deliver to the Buyer a written notice of disagreement (a “Dispute Notice”) prior to the expiration of the Review Period, specifying in reasonable detail the nature and amount of such disagreement and including the Sellers’ determination of the Net Working Capital and Net Debt as of the Closing Date. If the Sellers agree with Buyer’s Statement, the Sellers shall deliver a written statement to the Buyer within the Review Period
accepting Buyer’s Statement (an “Acceptance Notice”), in which case Buyer’s Statement shall be final and binding, effective as of the date on which the Buyer receives the Acceptance Notice. If the Sellers do not deliver a Dispute Notice or an Acceptance Notice within the Review Period, then Buyer’s Statement shall be final and binding, effective as of the first business day after the expiration of the Review Period.

(c) Resolution of Disputes. If the Sellers deliver a Dispute Notice to the Buyer in a timely manner, then the Buyer and the Sellers shall attempt in good faith to resolve such dispute within fifteen (15) days from the date of the Dispute Notice (or such longer period as the parties may mutually agree). If the Buyer and the Sellers cannot reach agreement within such fifteen (15) day period (or such longer period as they may mutually agree), then the Buyer and the Sellers shall promptly refer the specific items in dispute to PriceWaterhouseCoopers (the “Independent Auditor”) for binding resolution. The Independent Auditor shall work to resolve such dispute promptly and, to the extent practicable, within
thirty (30) days from the date the dispute is submitted to the Independent Auditor. The Independent Auditor shall act based solely on the presentations of the Buyer and the Sellers and not by independent review. Any item not specifically referred to the Independent Auditor for evaluation shall be deemed final and binding on the parties. The Independent Auditor shall deliver to the Buyer and the Sellers a written opinion setting forth the final determination of the Net Working Capital and Net Debt as of the Closing Date calculated in accordance with the provisions of this Agreement, which shall not be more than as set forth in the Dispute Notice nor less than as set forth in Buyer’s Statement. The determination of the Independent Auditor shall be final and binding, effective as of the date the

 

 

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Independent Auditor’s written opinion is received by the Buyer and the Sellers. The fees, costs and expenses of the Independent Auditor shall be borne 50% by the Buyer and 50% by the Sellers.

(d) Final Settlement.

(i) If the Final Net Working Capital is less than the Target Amount, then a payment of such difference shall be made to the Buyer. The Sellers shall, within five (5) business days from the effective date of such final determination, pay to the Buyer the amount of the difference, such payment to be made (i) from the Escrow Account if the payment is less than or equal to $200,000 (together with any payments made from the Escrow Account pursuant to Section 1.3(d)(ii)), or (ii) otherwise, directly by Sellers by wire transfer of immediately available funds to such bank account as the Buyer may designate (or in the absence of any such designation, by corporate check mailed to the Buyer). If the Final Net Working Capital is greater than the Target Amount, then the Buyer shall, within five (5) business days
from the date of such final determination, pay to the Sellers the amount of such difference, such payment to be made by wire transfer of immediately available funds to such bank account(s) as the Sellers may designate.

(ii) If the Final Net Debt is greater than the Estimated Net Debt, then a payment of such difference shall be made to the Buyer. The Sellers shall, within five (5) business days from the effective date of such final determination, pay to the Buyer the amount of the difference, such payment to be made (i) from the Escrow Account if the payment is less than or equal to $200,000 (together with any payments made from the Escrow Account pursuant to Section 1.3(d)(i)), or (ii) otherwise, directly by Sellers by wire transfer of immediately available funds to such bank account as the Buyer may designate (or in the absence of any such designation, by corporate check mailed to the Buyer). If the Final Net Debt is less than the Estimated Net Debt, then the Buyer shall, within five (5) business days from the
date of such final determination, pay to the Sellers the amount of such difference, such payment to be made by wire transfer of immediately available funds to such bank account(s) as the Sellers may designate.

(iii) All obligations of the Sellers under this Section 1.3 shall be borne by each Seller as follows: 51% by BC Holding and 49% by Onslow.

(iv) The Buyer shall cooperate with the Sellers in providing joint written instructions to the Escrow Agent to make any payments from the Escrow Account that is permitted under this Section 1.3(d).

(e) Any payments made pursuant to this Section 1.3 shall be consistently treated as adjustments to the Purchase Price.

1.4 Closing. The closing for the sale of the Interests (the “Closing”) will be held at the offices of Bingham McCutchen LLP, 355 South Grand Avenue, Los Angeles, California 90071, at 10:00 a.m. local time on the second (2nd) business day following the satisfaction and/or waiver of the final condition to the Closing or on such other date as mutually agreed upon by the parties (the “Closing Date”).

 

 

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1.5 Assets and Liabilities.

(a) All obligations and liabilities of the Company and the Subsidiary under the Participation Plan not paid at Closing by the Company and the Subsidiary pursuant to Section 1.2(d) will be excluded liabilities and will be assigned to and assumed by the Sellers or an Affiliate thereof (other than the Company or the Subsidiary) as of the Closing. No later than ten (10) business days prior to the date on which the Sellers are required to make any payment under the Participation Plan after the Closing Date, the Sellers shall provide written notice to the Buyer identifying (i) the persons to whom such payments are to be made and (ii) the anticipated payment date. No later than two business days prior to the proposed payment date, the Sellers shall transmit to the Buyer (or to the Company or a Subsidiary,
as the Buyer may request) the aggregate amount of the payments to be paid plus any incremental Company owed payroll Taxes, together with a final list of the persons to whom such payments are to be made and the amounts of each such payment, and the Buyer shall pay, or shall cause the Company or the Subsidiary to pay each such payment on the designated payment date. To the extent permitted by applicable Tax laws, the Sellers and the Buyer shall treat all payments contemplated by this Section 1.5(a) as compensation paid by the Sellers for all Tax purposes, and the Buyer (or the Company or the Subsidiary making such payments) shall be treated as a paying agent for the Sellers.

(b) At or prior to the Closing, the Sellers shall cause the Company to assign to BC Holding 51% and to Onslow 49% of the responsibility for the earn-out, if any, (and any liabilities associated therewith) under that certain equity purchase agreement, dated December 31, 2004, by and among J-Telecom Interest, Inc., EAS Call Centres, Inc. and the predecessor entity to the Company. The Sellers agree that they will make any earn-out payments due under such agreement after the Closing and, if the Buyer in any way becomes liable for such payments, the Buyer may seek indemnification for such payments pursuant to Article VII hereto.

(c) Notwithstanding the Seller’s obligations under this Section 1.5 or otherwise, at the Closing, the Buyer shall assume, or otherwise cause the Company or the Subsidiary on a post-Closing basis to pay, any severance obligations due under any employment, severance or other such agreement entered into by the Company or the Subsidiary, and neither Seller shall have any responsibility or obligation with respect thereto.

1.6 Prime Therapeutics Contract. If, between the date of this Agreement and the date that is 18 months after the Closing Date, the Buyer, the Company or an Affiliate of the Buyer or the Company has not entered into a services contract with Prime Therapeutics LLC in which the contract framework is consistent (within 20%) with the service volumes provided by the Company in the second quarter of 2006, BC Holding shall pay to the Buyer $1,530,000 and Onslow shall pay to the Buyer $1,470,000 within ten (10) business days of the date that is 18 months after the Closing Date. Such payments shall be made by wire transfer of immediately available funds to such bank account as the Buyer may designate (or in the absence of any such designation, by corporate check mailed to the Buyer).
The Buyer shall, and shall cause the Company to, after the Closing Date, act in good faith and use reasonable best efforts to enter into a contract with Prime Therapeutics LLC by the date that is 18 months after the Closing Date if such contract has not been entered into as of the Closing Date. The Buyer agrees that such

 

 

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service contract is not required to have any guaranteed minimum volume, “take or pay” or similar provisions.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

The Sellers represent and warrant severally, but not jointly, to the Buyer as follows; provided, however, that BC Holding shall be solely responsible for the representations and warranties made in Section 2.28 and Onslow shall be solely responsible for the representations and warranties made in Section 2.29:

2.1 Organization and Good Standing. The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company is duly registered to transact business and is in good standing in every jurisdiction in which the character of the Business makes such registration necessary, except for where the failure to be so qualified would not have a Material Adverse Effect. The Company has all necessary power and authority to carry on the Business as it is now being conducted. The Subsidiary is duly organized, validly existing and in good standing under the laws of the province in which the Subsidiary was organized, formed or incorporated, as applicable. The Subsidiary is duly qualified to transact business and is in
good standing in every jurisdiction in which the character of the Business makes such qualification necessary, except for where the failure to be so qualified would not have a Material Adverse Effect. The Subsidiary has all necessary power and authority to carry on the Business as it is now conducted. Schedule 2.1 lists every entity in which the Company has any equity or ownership interest.

2.2 [INTENTIONALLY OMITTED]

2.3 No Violations. Except as set forth on Schedule 2.3, the consummation of the transactions contemplated hereby will not (a) violate any provision of the certificate of formation, limited liability company agreement, certificate of incorporation or the bylaws, as applicable, of the Company or the Subsidiary, (b) violate in any material respect any order, writ, injunction, decree, law, statute, rule or regulation of any court or governmental authority relating to the Business applicable to the Company or the Subsidiary, or (c) give rise to a declaration or imposition of any Lien other than Permitted Liens upon any of the assets of the Company or the Subsidiary.

2.4 Capitalization. The Interests are all of the membership interests of the Company. The authorized and issued and outstanding shares of capital stock of the Subsidiary are as set forth on Schedule 2.4. All issued and outstanding shares of capital stock of Subsidiary have been duly authorized and are validly issued, fully paid and non assessable. There are no outstanding options, warrants, rights to subscribe to, or securities or rights convertible into, units or shares or evidencing ownership of the membership interests of the Company or the Subsidiary’s capital stock or contracts, commitments, understandings, or arrangements by which the Company or the Subsidiary is bound to issue
additional shares of capital stock, in the case of the Subsidiary, or any membership interests or certificates evidencing ownership of membership interests, in the case of the Company, or otherwise entitling any Person to consideration in respect of the sale of

 

 

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any equity interests of the Company. There are no voting trusts, proxies or similar voting arrangements with respect to the Company’s membership interests or the capital stock of the Subsidiary.

2.5 Financial Statements. The Company has delivered to the Buyer true and complete copies of its (i) audited consolidated balance sheet as of December 31, 2005 and consolidated income statement for the fiscal year ended December 31, 2005 and (ii) unaudited consolidated balance sheet as of July 31, 2006 and consolidated income statement for the seven (7) months ended July 31, 2006 (collectively, the “Financial Statements”). The Financial Statements were (i) prepared from the books and records of the Company and the Subsidiary, if applicable, (ii) have been prepared in accordance with GAAP on a consistent basis (except for the absence of footnote disclosure and normally
recurring adjustments made at year end that are not material either individually or in the aggregate) and (iii) fairly present in all material respects the financial position and results of operations of the Company and the Subsidiary, if applicable, as of and for the periods then ended. The Subsidiary has gross assets, calculated in accordance with GAAP, of less than CDN$5 million.

2.6 Absence of Certain Changes. Except as set forth on Schedule 2.6, and except for the matters specifically contemplated under this Agreement, since December 31, 2005 there has not been, as of the date of this Agreement:

(a) Any declaration, setting aside or payment of any dividend or distribution in the form of assets or property (other than cash or cash equivalents) with respect to the equity of the Company or the Subsidiary (including repurchases thereof);

(b) Any material sale of properties or assets of the Business;

(c) Any event having had, individually or in the aggregate, a Material Adverse Effect;

(d) Except in the ordinary course of business, any incurrence, assumption or guaranty of any indebtedness by the Company or the Subsidiary;

(e) Any subjection to liens, pledges, claims, mortgages, conditional sales or other title retention agreements, easements, options, security interests, encumbrances, charges, restrictions or liabilities (collectively, “Liens”) other than Permitted Liens of any kind on any of the assets of the Company or the Subsidiary;

(f) Any material alteration in the manner of keeping the books, accounts or records of the Business or in the accounting practices of the Company or the Subsidiary;

(g) Any increase in the compensation or fringe benefits of any present or former directors, officers, employees or independent contractors of the Company or the Subsidiary, except for increases in the ordinary course of business or as required by law or any existing agreement;

(h) The granting of, or adoption, amendment, modification or termination of, any Benefit Plan or of any bonus, incentive, severance, termination pay, loan, or other plan,

 

 

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contract or commitment to, or for the benefit of, any present or former directors, officers, employees or independent contractors of the Company, except in the ordinary course of business consistent with past practice or in accordance with plans or arrangements set forth on Schedule 2.12(b);

(i) Any grant of any equity or equity-based awards (including, without limitation, any Interests or any outstanding rights or securities exercisable or exchangeable for or convertible into any equity interests of the Company). 

(j) Any material capital expenditures outside the ordinary course of business;

(k) Any extraordinary loss, damage, destruction or casualty loss, whether or not covered by insurance and whether or not in the ordinary course of business or consistent with past custom and practice;

(l) Any amendment or authorization to amend the limited liability company agreement of the Company or the certificate of incorporation or bylaws of the Subsidiary;

(m) Any material change in accounting methods or Tax principles, practices or policies followed by the Company, any Tax election made or changed, any amended Tax Return filed, any closing agreement entered into, any proceedings with respect to any Tax claim or assessment relating to the Company or the Subsidiary settled or compromised, any right to claim a refund of Taxes surrendered, or any extension or waiver of the limitations period applicable to any Tax claim or assessment relating to the Company or the Subsidiary consented to;

(n) Any acquisition of a third party, including the acquisition of a substantial portion of a third party’s assets, by the Company or the Subsidiary.

(o) Any agreement to do any of the things described in the preceding subsections (a)-(n) of this Section 2.6.

2.7 Contracts. 

(a) Schedule 2.7(a) contains a list of the following written agreements or contracts to which the Company or the Subsidiary is a party as of the date hereof: (i) pursuant to which the Company or the Subsidiary incurred expenses or made capital expenditures in excess of $100,000.00 in the first six months of calendar year 2006 or generated revenue in excess of $400,000.00 in the first six months of calendar year 2006, (ii) to the extent not provided pursuant to clause (i) above, the top 20 DA customers, the top 5 CRM customers and the top 2 OS customers of the Company and the Subsidiary ( all measured based on revenue for the first six months of calendar year 2006), and contracts with Jacent, TellMe and CTI ; (iii) pursuant to which the Company or the Subsidiary leases real property
(the “Leased Real Property”), including all amendments or addendums with respect thereto (the “Leases”); (iv) partnership or joint venture agreements; (v) pursuant to which the Company or the Subsidiary is a lessor of or permits any third party to hold or operate any real or personal property involving annual payments in excess of $50,000.00; (vi) pursuant to which the Company or the Subsidiary is prohibited from freely engaging in business anywhere in the world; (vii) collective bargaining agreements; (viii)  performance bonds, surety agreements or stand-alone indemnification

 

 

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agreements obligating the Company or the Subsidiary to indemnify any Person for services performed; (ix) employment, consulting or similar agreements involving compensation equal to or in excess of $50,000.00 per annum (any such contract required to be listed on Schedule 2.7(a) pursuant to subsections (i) through (ix), collectively, the “Material Contracts”). 

(b) Other than as set forth on Schedule 2.7(b), (i) the Company or the Subsidiary has performed in all material respects all of the material obligations required to be performed by it under such Material Contract, the Company or the Subsidiary has not, and to the Knowledge of the Sellers, no other party has, accelerated, terminated or cancelled any Material Contract, (ii) each of the Material Contracts is the legal, valid and binding obligation of the Company or the Subsidiary, enforceable against the Company or the Subsidiary in accordance with its terms, except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium, or other laws relating to or affecting the enforcement of creditors’ rights and remedies generally and except as enforcement may be
limited by general principles of equity, (iii) no consent of any party to a Material Contract is required in connection with the execution of this Agreement or the consummation of the transactions contemplated hereby and (iv) the Buyer has been provided access to a true and correct copy of all Material Contracts.

2.8 Leased Real Estate. Schedule 2.8 sets forth the address of each Leased Real Property. The Company has delivered to the Buyer a true and complete copy of each such Lease governing the Leased Real Property. Except as set forth in Schedule 2.8, with respect to each of the Leases: (i) there are no written disputes with respect to such Lease; (ii) no security deposit or portion thereof deposited with respect to such Lease has been applied in respect of a breach or default under such Lease which has not been redeposited in full; and (iii) neither the Company nor the Subsidiary has assigned, subleased,
mortgaged, deeded in trust or otherwise transferred or encumbered such Lease or any interest therein.

2.9 Tangible Assets. Subject only to Permitted Liens, the Company and the Subsidiary own good and marketable title to, or have a valid leasehold interest in, all material tangible personal property, including all vehicles, machinery, equipment, tools, computer hardware, furniture, fixtures (both real and personal), furnishings and other similar property shown on the Financial Statements or acquired thereafter unless disposed of in the ordinary course of business. Such properties, in the aggregate, are in good operating condition and repair, subject to normal wear and tear, and are usable and adequate in the ordinary course of business and for the use or uses to which they are being put.

2.10 Compliance With Laws. Except as disclosed on Schedule 2.10, the Company and the Subsidiary is in compliance in all material respects with all applicable laws, statutes, ordinances, rules, regulations and orders. 

2.11 Licenses and Permits. Schedule 2.11 contains a list of all material Governmental Licenses held by the Company or the Subsidiary (the “Licenses”). There are no pending or, to the Knowledge of the Sellers, threatened claims or proceedings challenging the validity of or seeking to revoke or discontinue (other than expiration according to each respective License’s terms), any of the Licenses. The Company and the Subsidiary are in material compliance with the terms and conditions of such Licenses and have not, to the Knowledge of the Sellers,

 

 

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received any notices that they are in material violation of any of the material terms or conditions of such Licenses.

2.12 Employees and Employee Benefits.

(a) Neither the Company nor the Subsidiary is a party to a collective bargaining agreement, nor, to the Knowledge of the Sellers, as of the date hereof, is there any effort being made by any Person or union to organize the current employees of the Company or the Subsidiary. 

(b) Schedule 2.12(b) sets forth a list of all “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), and all bonus, incentive, deferred compensation, stock purchase, stock or stock option and all other equity-based plans or arrangements and all employment, termination pay, severance, change in control, employee loan, fringe benefit and all other employee benefit plans or arrangements, whether or not subject to ERISA, whether oral or written, (i) that are maintained, contributed to or sponsored by the Company or the Subsidiary, or (ii) under  which the Company or the Subsidiary contributes to or with respect to which
the Company or the Subsidiary has any present or future liability (the “Benefit Plans”). No Benefit Plan is a “multiemployer plan” within the meaning of Section 3(37) of ERISA and neither the Company, the Subsidiary nor any member of their “Controlled Group” (defined as any organization which is a member of a controlled group of organizations within the meaning of Sections 414(b), (c), (m) or (o) of the Code) has sponsored or contributed to, since January 1, 2005, any multiemployer plan.

(c) As applicable with respect to each Benefit Plan, the Company has made available to the Buyer copies of (i) each current Benefit Plan document, including any amendments, (ii) all trust documents and custodial agreements relating thereto, (iii) any summary plan description provided under a Benefit Plan, (iv) the most recent annual report (Form 5500 and all schedules thereto) filed with the Department of Labor or Internal Revenue Service (“IRS”), (v) any audited financial statements and actuarial valuation reports for the most recent fiscal year and (vi) the most recent IRS determination letter, each as applicable.

(d) Except as disclosed on Schedule 2.12(d), each Benefit Plan has been maintained, operated and administered in all material respects, in compliance with its terms and any related documents or agreements and the applicable provisions of ERISA, the Code and other applicable law.

(e) The Benefit Plans which are “employee pension benefit plans” within the meaning of Section 3(2) of ERISA and which are intended to meet the qualification requirements of Section 401(a) of the Code have received or requested determination letters from the IRS to the effect that such Benefit Plans are qualified and the related trusts are exempt from federal income taxes and no determination letter with respect to any such Benefit Plan has been revoked, and, to the Knowledge of the Sellers, no event has occurred which would reasonably be expected to cause the revocation of such determination letter.

 

 

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(f) Neither the Company nor any Benefit Plan nor any party in interest (within the meaning of Section 3(14) of ERISA) has engaged in a prohibited transaction, as defined under Section 4975 of the Code or Section 406 of ERISA, which could subject the Company or the Subsidiary to any direct or indirect liability, tax or penalty under Section 4975 of the Code or Section 502(i) of ERISA. Neither a “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in liability, nor an “accumulated funding deficiency” (as such term is defined Section 312 of ERISA and Section 412 of the Code) has occurred with respect to any Benefit Plan.

(g) All contributions with respect to or on behalf of any Current Employee to any Benefit Plan, which is an “employee pension benefit plan” within the meaning of Section 3(2) of ERISA, have been timely made or accrued in accordance with the terms of such Benefit Plan.

(h) No Benefit Plan is subject to Title IV of ERISA. Except for the Subsidiary, there are no other organizations which are part of the Controlled Group that includes the Company. 

(i) With respect to any Benefit Plan, (i) no actions, suits or claims (other than routine claims for benefits in the ordinary course) are pending or, to the Knowledge of the Sellers, threatened, or (ii) no administrative investigation, audit or other administrative preceding by the Department of Labor, the PBGC, the Internal Revenue Service or any other governmental agency is pending, in progress or, to the Knowledge of the Sellers, threatened (including, without limitation, any routine request for information from the PBGC).

(j) Except as set forth on Schedule 2.12(j), no Benefit Plan exists that, as a result of the execution of this Agreement or the purchase and sale of the Interests, could (i) result in the payment to any current or former employee, director or independent contractor of the Company or the Subsidiary of any severance pay or increase in severance pay upon any termination of employment after the date of this Agreement, or (ii) accelerate the time of payment or vesting or result in any payment or funding (through a grantor trust or otherwise) of any compensation or benefits for the benefit of any current or former employee, director or independent contractor of the Company or the Subsidiary.

(k) Except as set forth on Schedule 2.12(k), the execution of this Agreement will not (x) cause the Company or the Subsidiary to record additional compensation expense on its income statement with respect to any outstanding stock option or other equity-based award, or (y) cause the Company or the Subsidiary to make any payment that would not be deductible under, or by reason of, Section 280G of the Code.

2.13 Litigation. There is no action, claim, suit, investigation, complaint, grievance or proceeding pending or, to the Knowledge of the Sellers, threatened (i) against, relating to or affecting the Company or the Subsidiary, or any of its properties or assets before any Governmental Entity that are material to the Company, or (ii) that challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement. Neither the Company, the Subsidiary nor any of their assets or properties, is subject to any order, judgment, injunction or decree.

 

 

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2.14 Taxes. Except as set forth in Schedule 2.14:

(a) The Company is currently and has been at all times, since its conversion to a limited liability company on December 31, 2004, treated as a partnership for federal and state income tax purposes. The Subsidiary is, and has been at all times, since its formation, treated as a disregarded entity for federal income tax purposes. Each of the Company and the Subsidiary has timely filed all Tax Returns that it was required to file. All such Tax Returns were true, correct and complete in all material respects. All Taxes owed by any of the Company and the Subsidiary have been or will be paid prior to the Closing or accrued on the Financial Statements, or on the books of the Company after the date of the most recent Financial Statements through the Closing Date in accordance with the Company’s past practices and GAAP. Each of the Company and the Subsidiary (i) has
withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid to or owing to any employee, independent contractor, creditor, stockholder, or other third party and (ii) has collected all sales, use and value added Taxes required to be collected, and has remitted, or shall remit on a timely basis, such amounts to the appropriate governmental authorities and have furnished properly completed exemption certificates for all exempt transactions. None of the Company or the Subsidiary is the beneficiary of any extension of time within which to file any Tax Return other than Tax Returns for which the Sellers are responsible for filing pursuant to Section 4.9(b). There are no Liens on any of the assets of the Company or the Subsidiary that arose in connection with any failure (or alleged failure) to pay any Tax, except for any Tax, the payment of which is not delinquent
and not subject to penalties or which is being contested in good faith and for which adequate reserves have been provided.

(b) Neither the Company nor the Subsidiary has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. No power of attorney granted by or with respect to the Company or the Subsidiary relating to Taxes is currently in force.

(c) There is no dispute or claim concerning any Tax liability of the Company or the Subsidiary claimed or raised by any taxing authority in writing. There is no audit, examination, or similar proceeding pending or, to the Knowledge of the Sellers, proposed or threatened, with respect to Taxes of the Company or the Subsidiary.

(d) Neither the Company nor the Subsidiary is a party to, or bound by, or has an obligation under, any Tax allocation or sharing agreement or similar contract or arrangement other than any agreement solely among the Company and the Subsidiary.

(e) Neither the Company nor the Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (A) change in method of accounting for a taxable period ending on or prior to the Closing Date under Code § 481(c) (or any corresponding or similar provision of state, local or foreign income Tax law); or (B) “closing agreement” as described in Code § 7121 (or any corresponding or similar provision of state, local or foreign income Tax law).

 

 

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(f) The Company has not made an election under Section 754 of the Code or similar provisions under applicable state income Tax laws currently in effect.

(g) Since October 23, 2000, the Company is not nor has it ever been a member of an affiliated group of corporations filing a consolidated federal income Tax Return (other than the group of which it is currently a member). The Company does not have any liability for the Taxes of any Person (other than the Company) under Treasury Regulations Section 1.1502-6 (or any similar provision of any state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

2.15 Accounts Receivable. The accounts receivable of the Business in the Company’s June 30, 2006 balance sheet represent bona fide sales actually made or services actually performed on or prior to such date in the ordinary course of the business and consistent with past practices.

2.16 Intellectual Property Rights.

(a) Schedule 2.16(a)  contains a list of all of the following material intellectual property rights owned or licensed by the Company or the Subsidiary as applicable: (i) patents or patent applications; (ii) trademarks, service marks, trade names, corporate names and logos and Internet domain names and registrations and applications for registration thereof; (iii) copyrights and registrations and applications for registration thereof; (iv) database rights; and (v) computer software other than mass-marketed software purchased or licensed for less than a total cost of $10,000 for each program (together the “Company Intellectual Property Rights”).

(b) The Company and the Subsidiary own, or have a license to use, all material Company Intellectual Property Rights.

(c) No claims are currently pending against the Company or the Subsidiary asserting the invalidity, misuse or unenforceability of any of the Company Intellectual Property Rights and, to the Knowledge of the Sellers, no such claims are threatened. To the Knowledge of the Sellers, the operation of the Business as currently conducted does not currently infringe, misappropriate or otherwise violate, any Intellectual Property Rights of any third party. To the Knowledge of the Sellers, no third party is currently infringing, misappropriating or otherwise violating any of the Intellectual Property Rights owned by the Company.

(d) The Company and the Subsidiary have taken all necessary actions to protect and enforce their rights in the Intellectual Property Rights owned by the Company or the Subsidiary including, without limitation, by having all Persons who have contributed to the creation, invention, modification or improvement of any Intellectual Property Rights purportedly owned by the Company or the Subsidiary, in whole or in part, sign written agreements ensuring that all such Intellectual Property Rights are owned exclusively by the Company or the Subsidiary.

(e) No material software owned by the Company or the Subsidiary is subject to the terms of any “open source,” “copyleft,” or other similar license or distribution models that

 

 

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would require the Company or the Subsidiary to make the source code of that software publicly available to third parties.

2.17 Environmental Matters. The Company or the Subsidiary is operating in material compliance with all applicable Federal, state and local laws relating to the protection of human health and the environment, including but not limited to those relating to water quality, air quality, the management of hazardous waste, hazardous materials, hazardous substances or solid waste, emergency response planning and community right to know, asbestos building materials, or the release of hazardous substances, hazardous materials or hazardous waste, or wastes, pollutants or contaminants to the environment (“Environmental Laws”). The Company and the Subsidiary have obtained and are in compliance with
all of the material permits and other material governmental authorizations required for the Company’s or the Subsidiary’s operation in accordance with Environmental Laws. To the Knowledge of the Sellers, neither the Company, nor the Subsidiary has received any written communication, whether from a Governmental Entity, citizens’ group, employee or otherwise, alleging that the Company or the Subsidiary is not operating in material compliance with Environmental Laws or with the permits or other governmental authorizations issued to the Company or the Subsidiary, or that the Company or the Subsidiary has any liability under any Environmental Laws.

2.18 Insurance. Schedule 2.18 contains a list of all policies of insurance currently maintained by, or on behalf of, the Company and the Subsidiary, setting forth the name of the insurer, the holder of each such policy, the nature of coverage, the amount of such coverage, and the expiration dates thereof. All premiums due under the policies identified on Schedule 2.18 have been paid and neither the Company nor the Subsidiary has received any notice of cancellation, material modification or termination in respect of any such policy. There is no claim by the Company or the Sellers pending under any of such policies or
bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds.

2.19 Bank Accounts. Schedule 2.19 sets forth the name of each bank or other financial institution in which the Company or the Subsidiary has an account and the account number thereof.

2.20 Brokers and Finders. Except as disclosed on Schedule 2.20, the Company has not engaged or authorized any broker, finder, investment banker or other third party to act on behalf of the Company, directly or indirectly, as a broker, finder, investment banker or in any other like capacity in connection with this Agreement or the transactions contemplated hereby, or have consented to or acquiesced in anyone so acting. The Sellers shall be solely responsible for any payments, fees, or commissions that may be due to the parties listed on Schedule 2.20 in connection with the transactions contemplated hereby.

2.21 Customers and Suppliers. Schedule 2.21(1) sets forth (i) the name of each of the customers that the Company recognized revenue from in the six (6) month period ended June 30, 2006, with an asterisk next to the names of the top twenty (20) customers by revenue in such period (the “Top 20 Customers”), and (ii) the name of each of the suppliers that the Company paid more than $10,000 to in the period from January 1, 2006 through August 25, 2006. Since January 1, 2006, none of the Top 20 Customers, has, to the Knowledge of the Sellers, expressly stated, in writing or orally, that it shall stop, or materially
decrease the rate of, purchasing

 

 

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services of the Company or the Subsidiary. Schedule 2.21(2) sets forth the names of the Top 20 Customers that are aware that part of their service includes calls that are routed to a Federal Prison Industries, Inc. facility.

2.22 Employees.

(a) The Company and the Subsidiary are in compliance in all material respects with all applicable laws respecting labor, employment and employment practices and terms and conditions of employment, including, without limitation, wages and hours (including the payment of overtime wages), welfare, health and safety and immigration and naturalization. No claims are pending against the Company (x) before the Equal Employment Opportunity Commission or any other administrative or regulatory body or in any court asserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983, the Fair Labor Standards Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, the Americans with Disabilities Act, or any other Federal, state or local law, statute or ordinance barring
discrimination in employment or (y) otherwise arising out of any current former or prospective employment relationship (whether in tort or contract, statutory or common law, or otherwise)  There are no consent decrees or judgments binding upon the Company or the Subsidiary relating to employees or employment practices.

(b) With respect to the Company, (i) there are no labor disputes existing, or, to the Knowledge of the Sellers, threatened, involving strikes, slow-downs, work stoppages, job actions or lockouts, (ii) neither the Company nor the Subsidiary is a party to or bound by any collective bargaining agreements or other agreements with labor organizations, (iii) to the Knowledge of the Sellers, no labor union has taken any action with respect to organizing the employees of the Company or the Subsidiary and no demand for recognition or certification heretofore made by any labor organization or group of employees is pending or has been made since January 1, 2005 with respect to the Company or the Subsidiary, and (iv) there are no unfair labor practices or petitions for election pending or, to the Knowledge of the Sellers, threatened before the National Labor Relations
Board or any other governmental or administrative body or agency.

2.23 Affiliate Transactions. Except as set forth on Schedule 2.23, no officer, director, employee, equityholder, or Affiliate of the Sellers, the Company or the Subsidiary is a party to any contract or transaction with the Company or the Subsidiary or has any interest in any property, real or personal or mixed, tangible or intangible, of the Company or the Subsidiary, in either case that will survive the Closing. 

2.24 No Material Shared Assets or Services. There is no material asset, tangible or intangible, or service necessary for the conduct of the Business as it is presently conducted, the use of which is shared by the Company and the Subsidiary with any other Affiliate of the Company or the Subsidiary, except as set forth on Schedule 2.24, none of which shall survive the Closing. Neither the Company nor the Subsidiary will have any ongoing obligation or liability after the Closing with respect to the transactions and services set forth on Schedule 2.24.

2.25 Subsidiaries. The Subsidiary is the only subsidiary of the Company.

 

 

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2.26 Sufficiency of the Assets. The material assets of the Company and the Subsidiary are sufficient to conduct the Business as currently conducted.

2.27 Telus. The Company has not committed in writing to any minimum call volumes under that certain Service Agreement dated July 19, 2006 by and between Telus Communications Company and Operator Service Company, LLC (d/b/a Excell Services).

2.28 BC Holding Representations. BC Holding represents and warrants to the Buyer as follows:

(a) Authorization and Approvals. BC Holding has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder. This Agreement has been duly and validly authorized by and approved by all requisite action on the part of BC Holding. This Agreement has been duly executed and delivered by BC Holding and constitutes the legal, valid and binding obligation of BC Holding, enforceable against BC Holding in accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium or other laws relating to or affecting the enforcement of creditors’ rights and remedies generally and except as enforcement may be limited by general principles of equity. Except as set forth on Schedule
2.28(a), no material approvals or material consents by, or material filings with, any Governmental Entity or other Person is required in connection with the execution and delivery by BC Holding of this Agreement or the consummation by BC Holding of the transactions contemplated hereby.

(b) No Violations. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby will (a) violate any provision of the certificate of formation, limited liability company agreement, certificate of incorporation or the bylaws, as applicable, of BC Holding or (b) give rise to a declaration or imposition of any Lien other than Permitted Liens upon any of the Interests of BC Holding.

(c) Capitalization. BC Holding holds the issued and outstanding Interests as set forth on Schedule 2.28(c). BC Holding has good and marketable title to the Interests owned by such Seller as set forth on Schedule 2.28(c). With respect to BC Holding, all such owned Interests are free and clear of any conditions or restrictions on transfer or assignment and of any and all Liens.

2.29 Onslow Representations. Onslow represents and warrants to the Buyer as follows:

(a) Authorization and Approvals. Onslow has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder. This Agreement has been duly and validly authorized by and approved by all requisite action on the part of Onslow. This Agreement has been duly executed and delivered by Onslow and constitutes the legal, valid and binding obligation of Onslow, enforceable against Onslow in accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium or other laws relating to or affecting the enforcement of creditors’ rights and remedies generally and except as enforcement may be limited by general principles of equity. Except as set forth on Schedule 2.29(a), no material approvals or material consents by, or material filings with, any 

 

 

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Governmental Entity or other Person is required in connection with the execution and delivery by Onslow of this Agreement or the consummation by Onslow of the transactions contemplated hereby.

(b) No Violations. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby will (a) violate any provision of the certificate of formation, limited liability company agreement, certificate of incorporation or the bylaws, as applicable, of Onslow or (b) give rise to a declaration or imposition of any Lien other than Permitted Liens upon any of the Interests of Onslow.

(c) Capitalization. Onslow holds the issued and outstanding Interests as set forth on Schedule 2.29(c). Onslow has good and marketable title to the Interests owned by such Seller as set forth on Schedule 2.29(c). With respect to Onslow, all such owned Interests are free and clear of any conditions or restrictions on transfer or assignment and of any and all Liens.

2.30   Disclaimer. Except for the representations and warranties contained in this Article II of this Agreement, neither of the Sellers or any person or entity acting on their behalf makes or has made any other express or any implied representation or warranty to the Buyer as to the accuracy or completeness of any information regarding the Company, the Subsidiary, the Business or any other matter. The Buyer may not rely upon any document or written or oral information furnished to or discovered by it or its representatives, including any financial data or projections, other than as contained in Article II of this
Agreement, and to the fullest extent permitted by law, the Buyer’s rights and obligations with respect to all of the matters contemplated in this Agreement will be solely as set forth in this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Sellers:

3.1 Organization and Power; Foreign Qualification. The Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Buyer has all necessary corporate power and authority to own, lease and operate its properties, and to carry on its business, as such is now being conducted.

3.2 Authorization and Enforceability of Agreement. The Buyer has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder. This Agreement has been duly and validly authorized by and approved by all requisite action on the part of the Buyer. This Agreement has been duly executed and delivered by the Buyer and constitutes the legal, valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium or other laws relating to or affecting the enforcement of creditors’ rights and remedies generally and except as enforcement may be limited by general principles of equity. No material approvals or material consents
by, or material filings with, any Governmental Entity 

 

 

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or any other Person is required in connection with the execution and delivery by the Buyer of this Agreement or the consummation by the Buyer of the transactions contemplated hereby.

3.3 No Conflicts. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby will (a) violate any provisions of the certificate of limited liability company or operating agreement of the Buyer or (b) violate in any material respect any order, writ, injunction, decree, law, statute, rule or regulation of any court or governmental authority applicable to the Buyer or any of its properties or assets.

3.4 Brokers and Finders. Except as set forth on Schedule 3.4, the Buyer has not engaged or authorized any broker, finder, investment banker or other third party to act on behalf of the Buyer, directly or indirectly, as a broker, finder, investment banker or in any other like capacity in connection with this Agreement or the transactions contemplated hereby, and has not consented to or acquiesced in anyone so acting.

3.5 Litigation. There is no pending or to the knowledge of the Buyer, threatened action, suit, investigation, complaint, grievance or proceeding against the Buyer, relating to or affecting the transactions contemplated by this Agreement, which would have a material adverse effect on transactions contemplated hereunder. There is not in effect any order, judgment or decree enjoining, barring, suspending, prohibiting or otherwise limiting the Buyer from conducting or engaging in any aspect of the Business or entering into or consummating the transactions contemplated by this Agreement, or requiring the Buyer to take certain action with respect to any aspect of the Business.

3.6 Funding. The Buyer will have at the Closing, cash available to enable it to consummate the transactions contemplated by this Agreement and pay all related fees and expenses for which the Buyer may be responsible. The Buyer’s obligations under this Agreement are not contingent upon obtaining or the funding of any financing or borrowing facility.

3.7 Purchase Entirely for Own Account. The Interests are being acquired for investment purposes only, for the Buyer’s own account, and not with a view to the resale or distribution of any part thereof, and the Buyer has no present intention of selling, granting any participation in, or otherwise distributing any of the Interests.

3.8 Restricted Securities. The Buyer understands that the Interests are characterized as “restricted securities” under federal securities laws inasmuch as they are being acquired from the Sellers in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

3.9 Accredited Investor. The Buyer represents and warrants to the Sellers that:

(a) it is an “accredited investor” within the meaning of Rule 501 under the Securities Act;

 

 

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(b) it has sufficient knowledge, experience and sophistication in investing in or acquiring companies similar to the Company so as to be able to evaluate the risks and merits of its acquisition of the Company, and it is able financially to bear the risks thereof; and

(c) it has had an opportunity to discuss the Company’s business, management and financial affairs with the Company’s management and ask questions with respect thereto.

3.10 Disclaimer. Except for the representations and warranties contained in Article III of this Agreement, neither of the Buyer or any person or entity acting on its behalf makes or has made any other express or any implied representation or warranty to the Sellers as to the accuracy or completeness of any information regarding the Buyer. To the fullest extent permitted by law, the Sellers’ rights and obligations with respect to all of the matters contemplated in this Agreement will be solely as set forth in this Agreement.

ARTICLE IV

COVENANTS

4.1 Covenants Pending Closing. From the date hereof until the earlier of the Closing or the termination of this Agreement pursuant to Article VIII, except (i) to the extent disclosed on Schedule 4.1, or (ii) to the extent that the Buyer shall otherwise give its written consent (which consent will not be unreasonably withheld, conditioned or delayed), the Sellers will cause the Company and the Subsidiary to:

(a) operate the Business in the ordinary course of business in accordance with past custom and practice, and use commercially reasonable efforts to preserve intact the present business organization and the relationships with Persons having business dealings with the Business;

(b) maintain the Company’s and the Subsidiary’s books, accounts and records, in the usual, regular and ordinary manner and consistent with past practice;

(c) refrain from disposing of or encumbering any of the Company’s and the Subsidiary’s material properties and assets, whether tangible or intangible other than in the ordinary course of business;

(d) incur, assume or guaranty or otherwise become directly or indirectly responsible for the payment of any debt or obligation of any other Person other than amounts drawn under the Company’s revolving credit facility, any vehicle lease payments or any other contract in effect as of the date hereof; it being understood that the Company may repay any portion of its revolving credit facility;

(e) not amend or modify or take any affirmative action to terminate, any Material Contract other than in the ordinary course of business;

(f) not issue any Interests of the Company or capital stock of the Subsidiary;

 

 

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(g) not increase the compensation or benefits payable to its employees, officers, managers or directors, except in accordance with existing employment agreements, collective bargaining agreements, and Benefit Plans, or in the ordinary course of business consistent with past practice;

(h) not enter into or amend any employment, severance, termination or other similar agreement, adopt any new employee benefit plan, program, agreement or arrangement or amend any existing Benefit Plan (except as may be required by applicable law), hire (except in connection with the hiring of any new employee earning less than $50,000.00 per year), or make any loans to any of its officers, directors, employees, agents or consultants (other than loans made under a Benefit Plan qualified under Section 401(a) of the Code);

(i) not grant any severance or termination pay to any current or former officer, director, employee, agent or consultant of the Company or the Subsidiary;

(j) not grant any equity or equity-based awards (including, without limitation, any Interests or any outstanding rights or securities exercisable or exchangeable for or convertible into any equity interests of the Company); 

(k) redeem, purchase or otherwise acquire directly or indirectly any Interests, or any outstanding rights or securities exercisable or exchangeable for or convertible equity interests of the Company or the Subsidiary;

(l) refrain from acquiring (by merger, consolidation or acquisition of stock or assets) any corporation, limited liability company, partnership or other business organization or division thereof or any equity interest therein;

(m) pay all Taxes or other debts in accordance with past custom and practice, refrain from making or changing any Tax election, refrain from filing any amended Tax Return, except with respect to the Company’s and the Subsidiary’s 2005 income tax returns if and to the extent such amended Tax Return is filed in the ordinary course of business and is consistent with applicable law, refrain from entering into any closing agreement, settling or compromising any proceedings with respect to any Tax claim or assessment relating to the Company or its Subsidiary, refrain from surrendering any right to claim a refund of Taxes, and refrain from consenting to any extension or waiver of the limitations period applicable to any Tax claim or assessment relating to the Company or its Subsidiary;

(n) not enter into any Material Contracts or any contract that would be required to be set forth on Schedule 2.7 if such contract were in effect for the first six months of calendar year 2006, other than a contract with Prime Therapeutics LLC;

(o) not acquire any assets other than in the ordinary course of business and consistent with past practice;

(p) not declare, set aside or pay any dividend or distribute in the form of assets or property (other than cash or cash equivalents) with respect to the equity of the Company or the Subsidiary (including repurchases thereof);

 

 

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(q) not materially change their accounting methods or Tax principles, practices or policies;

(r) not have any capital expenditures outside the ordinary course of business;

(s) not amend or authorize the amendment of the limited liability company agreement of the Company or the certificate of incorporation or bylaws of the Subsidiary;

(t) except as otherwise contemplated herein, refrain from entering into any agreement with any Seller or its Affiliates.

Notwithstanding anything to the contrary in this Section 4.1 or any other provision of this Agreement, at any time and from time to time up to the Closing the Company and the Subsidiary may distribute by dividend or otherwise all cash and cash equivalents of the Company and its Subsidiary.

4.2 Consents and Approvals; Fulfillment of Conditions. Prior to Closing, the Sellers will use their commercially reasonable efforts and will cause the Company to use commercially reasonable efforts to obtain all consents and approvals of other Persons and Governmental Entities required to be obtained in connection with the consummation of the transactions contemplated by this Agreement. The Buyer shall use commercially reasonable efforts and shall cooperate with the Sellers in obtaining such consents. The Sellers and the Buyer shall use commercially reasonable efforts to perform, comply with and fulfill all obligations, covenants and conditions required by this Agreement to be performed, complied with and fulfilled by them prior to or at the Closing Date. The Sellers shall
be responsible for any expenses and payments incurred in obtaining the AT&T consent and any other consent to the transactions contemplated by this Agreement that are required under any applicable contract of the Company or the Subsidiary; provided, however, that any expense or payment incurred with respect to (i) obtaining a consent under a contract with a Top 20 Customer, except AT&T, (ii) obtaining a consent under any real estate lease listed on Schedule 2.7(a)(iii) or (iii) any state or federal regulatory filings listed on Schedule 2.3 shall be at the Buyer’s expense.

4.3 Amendment to Schedules. The Buyer agrees that the Sellers may, from time to time prior to the Closing, by notice in accordance with this Agreement, supplement or amend any Schedule to this Agreement, with respect to any fact, change, condition or circumstance that occurs after or becomes known to the Sellers after the date of this Agreement which would have been required to be set forth or described in the Schedules. Any such supplement or amendment to the Schedules shall not be deemed to have disclosed the information contained therein for purposes of determining whether the conditions set forth in Section 5.1 have been satisfied. If the events requiring such update to the Schedules do not
result in the conditions set forth in Section 5.1 having not been satisfied, Buyer may seek indemnification for any Damages stemming from the events requiring such update pursuant to Article VII of this Agreement. If the events requiring such update to the Schedules result in the conditions set forth in Section 5.1 having not been satisfied and Buyer elects to proceed with the Closing, Buyer may not seek indemnification for any Damages stemming from the events requiring such update.

 

 

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4.4 Access. Prior to the Closing, the Sellers agree to permit the Buyer and its employees, agents and representatives to have reasonable access to the properties, assets, books and records, contracts and other documents of the Company and the Subsidiary on reasonable prior notice to and approval (which shall not be unreasonably withheld, conditioned or delayed) of the Sellers’ Representative, during regular business hours. The Buyer may not contact employees, customers, vendors or suppliers of the Company or the Subsidiary without the prior approval of the Sellers’ Representative (which shall not be unreasonably withheld, conditioned or delayed), and then only with an authorized representative of the Sellers present.

4.5 Publicity. Except as may be required by applicable law, no party to this Agreement shall, or shall allow any of its Affiliates, to make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without prior consent of the other party, and the parties shall cooperate as to the timing and contents of any such announcement. Notwithstanding the foregoing, the parties will jointly agree upon an initial announcement and after the initial announcement of the transactions contemplated hereby by the parties and provided that the Closing has occurred, then each party may issue further press releases, tombstones and similar announcements without the consent of the other party, provided that such
announcements are consistent with, and not broader in scope with respect to the information they disclose, than the announcements previously mutually agreed.

4.6 Post-Closing Maintenance of Records. The Buyer shall:  (i) protect, preserve and maintain all books and other records, including without limitation, Tax Returns, of the Business (the “Records”) for seven (7) years after the effective date of such document using the same duty of care as the Buyer uses for its own records, (ii) not dispose of any Record earlier than the time period stated in clause (i) without first giving the Sellers at least one (1) month advance written notice of such destruction, and (iii) grant the Sellers access to the Records as may be reasonably required in connection with any reasonable business purpose at any reasonable time, and from time
to time, upon request by the Sellers, other than with respect to a dispute between the Buyer, the Company or the Subsidiary, on the one hand, and any Seller, on the other hand. Subject to Section 4.7, the Sellers may retain copies of such Records as they deem necessary after the Closing.

4.7 Confidentiality. The Buyer acknowledges and agrees that it is subject to, and will comply with the terms of confidentiality and public disclosure contained in the letter of intent, dated July 14, 2006, between the Company and the Buyer. Except as required by law, for a three (3) year period after the Closing, each Seller shall treat and hold as confidential any information concerning the Business that is not already generally available to the public or becomes generally known to the public, or is not disclosed to any Seller by a Person who is not, to the Knowledge of the Sellers bound by a duty of confidentiality (other than as a result of a breach of this Agreement by any Seller) (the “Confidential Information”) or refrain from using any of the Confidential Information except in connection with this Agreement. If any Seller is required to disclose any Confidential Information in order to avoid violating any applicable law, such Seller will provide the Buyer with prompt notice of such requirement. To the extent legally permissible and at the Buyer’s expense, such Seller shall provide the Buyer, in advance of any such disclosure, with notice of any Confidential Information such Seller intends to disclose (and, if applicable, the text of the disclosure language itself) and shall reasonably cooperate with the 

 

 

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Buyer in any lawful action to the extent the Buyer may seek to limit such disclosure. If in the absence of a protective order or the receipt of a waiver from the Buyer after a request therefor is made by such Seller, and after complying with the foregoing, such Seller is required by applicable law or legal process to disclose any Confidential Information, such Seller may do so; provided that such Seller shall disclose only such portion of the Confidential Information as it is required to disclose.

4.8 Cooperation. Each party shall reasonably cooperate with the other parties and use its commercially reasonable efforts to consummate the transactions contemplated by this Agreement in accordance with the terms hereof. In furtherance of the foregoing, the parties shall, at any time and from time to time after the Closing, upon the request of the other party, do, execute, acknowledge and deliver, and cause to be done, executed, acknowledged and delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney or assurances as the parties in good faith mutually agree are reasonably required to effectuate fully the intent and purposes of, and to consummate the transactions contemplated by, this Agreement.

4.9 Certain Tax Matters. 

(a) The Sellers severally, in a manner consistent with Section 7.2(a), shall indemnify the Buyer, the Company, and the Subsidiary and hold them harmless from and against (i) all Taxes (or the non-payment thereof) of the Company and the Subsidiary for all taxable periods ending on or before the Closing Date and the portion through the end of the Closing Date for any Straddle Period (as defined below) that includes (but does not end on) the Closing Date (each such taxable period or partial period, a “Pre-Closing Tax Period”), to the extent such Taxes are not paid on or prior to the Closing or taken into account as part of the Net Working Capital on the Closing Date and (ii) any and all liability (as a result
of Treasury Regulations Section 1.1502-6 or otherwise) for Taxes of the Sellers or any other person (other than the Company or the Subsidiary) which is or has ever been affiliated with the Company or with whom the Company otherwise joins or has ever joined (or is or has ever been required to join) in filing any consolidated, combined, unitary or aggregate Tax Return, prior to the Closing Date. 

(b) The Sellers at their own expense shall prepare, or cause to be prepared (in a manner consistent with past practices), all federal, state and local Tax Returns of the Company and the Subsidiary to be filed after the Closing Date which relate to a taxable period ending on or before the Closing Date, but if the Buyer determines that any such Tax Return could reasonably be expected to have a material adverse impact on the Taxes of the Company or its Subsidiary in a taxable period or portion thereof beginning after the Closing Date, the Sellers shall deliver to the Buyer for its review and comment, a copy of the proposed Tax Return no later than fifteen (15) days prior to the filing date of such Tax Return (including extensions thereof). The Sellers shall file all such Tax Returns and shall pay the amount of any Taxes shown due thereon to the appropriate Tax authorities. Any
officer of the Company or the Subsidiary as of the date immediately preceding the Closing Date shall have the authority and by execution of this Agreement, Buyer hereby grants any such officer the authority to sign any such Tax Return. Notwithstanding anything to the contrary herein, to the extent that any Taxes due on such Tax Returns have been taken into account as part of Net Working Capital, Buyer shall reimburse the Sellers for such amounts within five (5) business days of receipt of written notification from the Sellers. Such notification shall include reasonable evidence of proof of payment to the relevant 

 

 

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Tax authority and shall set forth in reasonable detail the computation of such reimbursement amounts.

(c) The Buyer shall prepare, or cause to be prepared, and shall file, or cause to be filed, all Tax Returns of the Company and the Subsidiary other than the Tax Returns which the Sellers shall prepare, or cause to prepared, pursuant to Section 4.9(b), but if any such Tax Return relates to any period beginning before the Closing Date and will result in payment by the Sellers pursuant to Section 4.9(a), (i) the Buyer shall deliver to the Sellers for their review, comment and approval (which approval will not be unreasonably withheld or delayed) a copy of the proposed Tax Return no later than fifteen (15) days prior to the filing date of such Tax Return (including extensions thereof) and (ii) the Company
and the Subsidiary shall confirm in writing that the proposed Tax Return has been prepared in a manner that is consistent with the past Tax practices and the past Tax Returns of the Company and the Subsidiary to the extent such Tax practices and such Tax Returns are consistent with applicable Tax law and consistent with this Agreement.

(d) The Sellers shall have the right, at their expense (i) to control, in whole or in part, any Tax audit or contest, (ii) to resolve and defend against any assessment, notice of deficiency, or other adjustment or proposed adjustment, (iii) to consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment, and (iv) to amend any Tax Return (each, a “Tax Matter”), in each case to the extent solely relating to all Taxes attributable to any Pre-Closing Tax Period (but not including any Straddle Period); provided, however, that the Sellers shall not settle or resolve such Tax
Matter without the prior written consent of the Buyer, which consent shall not be unreasonably withheld, conditioned or delayed. If the Buyer is not entitled to control the Tax Matter under the foregoing provisions, the Sellers will provide, or cause to be provided, to the Buyer copies of all correspondence received from or delivered to the taxing authority in connection with such Tax Matter.

(e) If the Sellers do not elect to control a Tax Matter under Section 4.9(d) or otherwise do not control a Tax Matter which relates in whole or in part to a Pre-Closing Tax Period, (i) the Buyer will use good faith efforts for the benefit of the Company and the Subsidiary and the Sellers in the defense or assertion of such Tax Matter, (ii) the Buyer will provide, or cause to be provided, to the Sellers, copies of all correspondence received from or delivered to the taxing authority in connection with any such Tax Matter, (iii) the Buyer, the Company and the Subsidiary shall allow the Sellers to participate in such Tax Matter at the expense of the Sellers, (iv) the Buyer, the Company and the Subsidiary shall not settle such Tax Matter without the consent of the Sellers,
which consent will not be unreasonably withheld, conditioned or delayed and (v) the Buyer shall be reimbursed by the Sellers for any third party costs or expenses incurred by the Buyer or the Company relating to such Tax Matters. 

(f) The Sellers and the Buyer shall jointly control and participate in all proceedings taken in connection with any Tax Matter relating to Taxes of the Company or its Subsidiary for a Straddle Period, and shall bear their own respective costs and expenses. Neither the Sellers nor the Buyer shall settle any such Tax Matter without the prior written consent of the other.

 

 

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(g) The Buyer shall control all proceedings with respect to any Tax Matter relating to a taxable period beginning after the Closing Date. The Sellers shall have no right to participate in the conduct of any such proceeding.

(h) The Sellers and the Buyer shall (i) each provide the other with such assistance as may reasonably be requested by any of them in connection with the preparation of any Tax Return, audit or other examination by any taxing authority or judicial or administrative proceedings relating to liability for Taxes or as may be reasonably requested with respect to the purchase of insurance or similar coverage for liabilities related to Taxes, (ii) each retain and provide the other with any records or other information which may be relevant to such Tax Return, audit or examination, proceeding determination, or insurance purchase and (iii) each provide the other with any final determination of any such audit or examination, proceeding or determination that affects any amount required to be shown on any Tax Return of the other for any period. Without limiting the generality
of the foregoing, the Buyer shall retain, and shall cause the Company and the Subsidiary to retain, and the Sellers shall retain, until the applicable statutes of limitations (including any extensions) have expired, copies of all Tax Returns, supporting work schedules and other records or information which may be relevant to such Tax Returns for all tax periods or portions thereof ending before or including the Closing Date; each shall allow reasonable access to such Tax Returns, schedules and records to the other party; and each shall not destroy or otherwise dispose of any such Tax Returns, schedules, and records without first providing the other party with a reasonable opportunity to review and copy the same.

(i) The Buyer and the Sellers will, if necessary and to the extent permitted by applicable law, will treat the taxable years of the Company and the Subsidiary as terminated on the day before the Closing Date and the Closing Date, respectively. Nevertheless, whenever it is necessary under this Agreement to determine the liability for Taxes of the Company or the Subsidiary for a taxable period that begins before and ends after the Closing Date (a “Straddle Period”), the determination of such Taxes for the portion of the Straddle Period ending on and including the Closing Date, and the portion of the Straddle Period beginning after, the Closing Date will be determined by assuming that the Straddle Period consisted of two (2) taxable years or periods, one which ended at the close of the Closing
Date and the other which began at the beginning of the day following the Closing Date; provided, however, that real and personal property Taxes and similar Taxes will be apportioned between such taxable periods on a daily basis.

(j) The Buyer shall (and shall cause the Company to) provide to the Sellers, within five (5) days of receipt, all Tax refunds, net of all payments made to third parties (including, without limitation, any legal or accounting fees) and net of all Tax costs incurred by the Buyer relating to the receipt of such refund, relating to tax periods (or partial periods) of the Company or the Subsidiary ending on or prior to the Closing Date. Refunds attributable to a Straddle Period shall be apportioned in accordance with Section 4.9(i). Notwithstanding anything to the contrary in the Section 4.9(j), the Sellers shall not be entitled to any refund to the extent such refund or credit has been taken into account as part of the Net Working Capital.

(k) Sellers shall deliver to the Buyer at the Closing a duly executed and acknowledged certificate, in form and substance acceptable to the Buyer and in compliance with 

 

 

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the Code and Treasury Regulations, certifying such facts as to establish that the transactions contemplated by this Agreement are exempt from withholding pursuant to Section 1445 of the Code.

4.10 Employment Agreements. As of the date hereof, each of the individuals set forth on Schedule 4.10 shall have executed an employment agreement in a form reasonably acceptable to the Buyer, which agreements will become effective if and only if the transactions contemplated by this Agreement are consummated.

4.11 Bonus Plan. The Buyer shall maintain the Company’s existing bonus plan for the Current Employees, which is set forth on Schedule 4.11, through the end of the fiscal quarter that the Company is in as of the Closing Date. After the end of such fiscal quarter, each such Current Employee will be considered for participation in the existing bonus plans of the Buyer to the same extent eligible for participation in such bonus plans.

4.12 Non-Solicit, Non-Investment and Non-Acquisition Agreement. At the Closing, Platinum Equity, LLC (“Platinum”) and the Buyer shall enter into a Non-Solicit, Non-Investment and Non-Acquisition Agreement substantially in the form attached hereto as Exhibit A. 

4.13 Performance Bonds. Within 30 days after the Closing, the Buyer will, or will cause the Company to, replace the bonds set forth on Schedule 2.7(a)(viii) and obtain the full release of the collateral or obligations supporting such bonds. If the Buyer is unable to replace such bonds, the Buyer will make arrangements to replace the collateral or obligations supporting those bonds and cause the applicable bonding company to release any collateral securing the bonds so that such collateral or obligation no longer consists of assets or obligations of Platinum or any Affiliate of Platinum. 

4.14 Employee Benefit Plans. 

(a) The Buyer agrees that for the one-year period beginning on the Closing Date and ending on the first anniversary thereof (the “Continuation Period”), the Buyer shall, or shall cause one of its affiliates to, provide the employees and officers who are employed by the Company or the Subsidiary immediately prior to the Closing (the “Current Employees”) with employee benefits that are substantially comparable in the aggregate to those provided to the other similarly situated employees of the Buyer. To the extent Current Employees are provided with benefits through the Buyer’s health and welfare benefit plans, the Buyer shall take all reasonable steps to ensure that: (i) any waiting periods or
limitations regarding pre-existing conditions with respect to such Current Employees and their beneficiaries under any of the Buyer’s plans will be waived, (ii) any covered expenses incurred by any such Current Employee under the Benefit Plans for any plan period prior to the Closing will be credited towards any deductibles, limits or out-of-pocket maximums under any of the Buyer’s plans, (iii) to the extent credit was given under the corresponding Benefit Plan, each of the Buyer’s plans will give each Current Employee credit for such Current Employee’s service with the Company and the Subsidiary prior to the Closing for purposes of eligibility to participate and vesting credit only and not for purposes of any benefit accruals or eligibility for early or subsidized benefits, and (iv) each such Current Employee’s vacation and personal time off accrued through the Closing Date shall continue to be honored after the Closing Date. Notwithstanding the forgoing, all

 

 

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Current Employees are to be given credit for service with the Company or the Subsidiary for determining benefits under the Buyer’s severance policy to the extent applicable.

(b) During the Continuation Period, the Buyer agrees to provide, or cause one of its affiliates to provide, each Current Employee with a base salary or rate of pay that is no less favorable than the base salary or rate of pay that was in effect for such Current Employee immediately prior to the Closing. Notwithstanding the foregoing, the payment of bonuses to the employees of the Company and the Subsidiary after the Closing shall be governed by Section 4.11.

(c) Except as otherwise expressly required under this Agreement, nothing contained herein shall require the Buyer or any of its affiliates to assume or maintain any Benefit Plan or continue the employment of any Person, including, without limitation, any Current Employee. Nothing contained in this Agreement shall require the Buyer, the Company or any of their affiliates to grant to any Current Employee, or take into account for purposes of determining comparability of benefits and compensation under this Section 4.14, any equity or equity-based awards, granted prior to, on or following the date hereof. Nothing contained in this Agreement shall confer any third-party beneficiary rights or other rights or remedies upon any Current Employee.

4.15 Platinum Covenant. After the Closing, Platinum shall be jointly and severally liable with BC Holding with respect to BC Holding’s obligations under Sections 1.3(d)(i) and (ii), 1.5(b) and 7.2(a) and (b); provided, however, that Platinum’s liability under this Section 4.15 shall be limited to a
maximum of $3,809,700 less (i) amounts available in the BC Holding Escrow Amount for claims by the Buyer and (ii) amounts previously paid by BC Holding in respect of its liabilities under such sections, other than with respect to fraudulent breaches or liability under Section 1.5(b).

4.16 Stephen B. Baus Covenant. After the Closing, Stephen B. Baus shall be jointly and severally liable with Onslow with respect to Onslow’s obligations under Sections 1.3(d)(i) and (ii), 1.5(b) and 7.2(a) and (b); provided, however, that Stephen B. Baus’s liability under this Section 4.16 shall be
limited to a maximum of $3,660,300 less (i) amounts available in the Onslow Escrow Amount for claims by the Buyer and (ii) amounts previously paid by Onslow in respect of its liabilities under such sections, other than with respect to fraudulent breaches or liability under Section 1.5(b)..

ARTICLE V

CONDITIONS TO THE OBLIGATIONS OF THE BUYER

The obligations of the Buyer hereunder are subject to the fulfillment or satisfaction at or prior to the Closing of each of the following conditions (any one or more of which may be waived by the Buyer but only in writing):

5.1 Representations, Warranties and Covenants of the Sellers. All representations and warranties of the Sellers contained in this Agreement shall be true and correct as of the date made and as of the Closing with the same effect as though such representations and warranties 

 

 

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were made at and as of the Closing (unless such representation speaks as of an earlier date, in which case it shall be true and correct as of such date), except in each case, that the representations and warranties with materiality or Material Adverse Effect qualifications should be true and correct in all respects and representations and warranties not so qualified should be true and correct in all material respects; the Sellers shall have performed and satisfied in all material respects all covenants, conditions and agreements required or contemplated by this Agreement to be performed prior to the Closing; and at the Closing, there shall be delivered to the Buyer a certificate to such effect signed by each Seller. Such certificate shall state that BC Holding shall be solely responsible for the representations and warranties made in Section
2.28 and Onslow shall be solely responsible for the representations and warranties made in Section 2.29.

5.2 Absence of Litigation or Investigation. No preliminary or permanent injunction or other order of any court or governmental agency or instrumentality shall be pending or shall have issued or been entered and remain in effect which prohibits or which would have the effect of prohibiting the consummation of the transactions contemplated by this Agreement.

5.3 Material Consents. The Sellers shall have obtained AT&T’s consent to the Buyer’s acquisition of the Interests, all on terms and conditions reasonably satisfactory to the Buyer. At the direction of the Buyer, the Sellers may attempt to obtain other consents, approvals and agreements from AT&T, but the Buyer acknowledges that the condition to Closing described in the first sentence of this Section 5.3 is limited to AT&T’s consent to the Buyer’s acquisition of the Interests and that such consent will not be conditioned on obtaining any other consent, approval or agreement from AT&T. Notwithstanding the obligations of the Sellers under Section 4.2, for avoidance of doubt the parties acknowledge and agree that the only consent required as a condition to the closing of the transactions contemplated by this Agreement is the consent from AT&T. 

5.4 Delivery of Documents. At the Closing, the Sellers will deliver to the Buyer:

(a) original certificates (to the extent the Interests are represented by certificates) evidencing each Seller’s ownership of the Interests and stock powers executed in favor of the Buyer or other documents to transfer title to the Interests to the Buyer;

(b) the certificate described in Section 5.1;

(c) resignations, in writing, of all the directors, Managers or Advisory Board Members of the Company and the Subsidiary, as applicable, and those officers of the Company and the Subsidiary designated by the Buyer prior to Closing;

(d) a counterpart signature page to the Escrow Agreement; and

(e) releases, substantially in the form attached hereto as Exhibit B-1, signed by all individuals receiving certain transaction bonus payments and releases, substantially in the form attached hereto as Exhibit B-2, signed by all individuals who will receive Participation Plan Payments.

 

 

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5.5 No Material Adverse Effect. There shall be no Material Adverse Effect at the time of Closing. 

5.6 Cash Balance. The Company’s cash balance shall be less than the Bank Debt immediately prior to payoff at Closing.

ARTICLE VI

CONDITIONS TO THE OBLIGATIONS OF THE SELLERS

The obligations of the Sellers hereunder are subject to the fulfillment or satisfaction at or prior to the Closing of each of the following conditions (any one or more of which may be waived by the Sellers, but only in writing):

6.1 Representations and Warranties of the Buyer. All representations and warranties of the Buyer contained in this Agreement shall be true and correct as of the date made and as of the Closing with the same effect as though such representations and warranties were made at and as of the Closing (unless such representation speaks as of an earlier date, in which case it shall be true and correct as of such date), except in each case, that the representations and warranties with materiality or material adverse effect qualifications should be true and correct in all respects and representations and warranties not so qualified should be true and correct in all material respects; the Buyer shall have performed and satisfied in all material respects all covenants, conditions and
agreements required or contemplated by this Agreement to be performed prior to the Closing; and at the Closing, there shall be delivered to the Sellers a certificate to such effect signed by the Buyer.

6.2 Absence of Litigation or Investigation. No preliminary or permanent injunction or other order of any court or governmental agency or instrumentality shall be pending or shall have issued or been entered and remain in effect which prohibits or which has the effect of prohibiting the consummation of the transactions contemplated by this Agreement.

6.3 Delivery of Documents. At Closing, the Buyer shall deliver to the Sellers (and/or the Escrow Agent, as applicable):

(a) the certificate described in Section 6.1;

(b) a counterpart signature page to the Escrow Agreement; 

(c) the Closing Consideration by wire transfer of immediately available funds in accordance with Section 1.2; and

(d) the other payments set forth in Section 1.2(c) and (d).

6.4 Deposit of Escrow Amount. At the Closing, the Buyer shall deposit the Escrow Amount with the Escrow Agent or the Company in accordance with Section 1.2(e).

 

 

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ARTICLE VII

SURVIVAL; INDEMNIFICATION

7.1 Survival Provisions; Assertion of Claims. 

(a) The representations, warranties and Pre-Closing Covenants of the parties contained in this Agreement shall survive the Closing until December 31, 2007; provided, however, that the representation and warranties set forth in Section 2.12 (to the extent related to any Tax), Section 2.14 and Section 2.17 shall survive until the expiration of the applicable statute of limitations; provided further that a representation, warranty or Pre-Closing Covenant that has been made the subject of a claim prior to such date in accordance with the provisions of this Article VII shall survive with respect to such claim until final resolution. The Post-Closing Covenants shall survive the Closing Date until the date they are otherwise terminated, whether by their terms or as a matter of applicable law, provided, however, that the covenants set forth in Section 4.1(m) and 4.1(q) shall survive until the expiration of the applicable statue
of limitations. For convenience of reference, the date upon which any representation, warranty, covenant or other agreement contained herein shall terminate, if any, is referred to herein as the “Survival Date”.

(b) No claim shall be brought under Section 7.2 unless the Indemnified Party, at any time prior to the applicable Survival Date, gives the Indemnifying Party (i) written notice of the existence of any such claim, specifying the nature and basis of such claim and the amount thereof, to the extent known, and if not a good faith estimate thereof, or (ii) a Third Party Claim Notice pursuant to Section 7.5 of any Third Party Claim, the existence of which might give rise to such a claim.

7.2 Indemnity.

(a) Subject to Section 7.3 hereof, each Seller, severally (so that BC Holding shall be solely liable for 51% of any Damages payable to the Buyer under this Section 7.2 and Onslow shall be solely liable for 49% of any Damages payable to the Buyer under this Section 7.2) and not jointly, shall defend, indemnify and hold harmless the Buyer and its Affiliates including, after the Closing, the Company and including, without limitation, each of their respective members, equity holders,  officers, managers, directors, employees, agents and representatives (collectively, the “Buyer
Indemnitees”) from and against any and all Damages for any inaccuracy in or breach of any representation or warranty made by the Sellers contained in Sections 2.1 through Section 2.27 (without regard to any materiality or Material Adverse Effect qualifier contained in such representation or warranty) or any Pre-Closing Covenants made by the Sellers in this Agreement.

(b) BC Holding shall be solely responsible for indemnifying the Buyer for Damages stemming from any inaccuracy in or breach of any representation or warranty made in Section 2.28 of this Agreement (without regard to any materiality or Material Adverse Effect qualifier contained in such representation or warranty) or any Post-Closing Covenant made by BC Holding in this Agreement made with respect to BC Holding, and Onslow shall be solely responsible for indemnifying the Buyer for Damages stemming from any inaccuracy in or breach 

 

 

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of any representation or warranty made in Section 2.29 of this Agreement (without regard to any materiality or Material Adverse Effect qualifier contained in such representation or warranty) or any Post-Closing Covenant made by Onslow in this Agreement made with respect to Onslow. Neither Seller shall be responsible for indemnifying the Buyer for Damages stemming from any inaccuracy in or breach of any representation, warranty or Post-Closing Covenant made in this Agreement with respect to the other Seller.

(c) The Buyer shall defend, indemnify and hold harmless each Seller and each of its Affiliates including, without limitation, each of its members, equity holders, officers, managers, directors, employees, agents and representatives (collectively, the “Seller Indemnitees”) from and against any and all Damages arising out of or resulting from:

(i) any inaccuracy in or breach of any representation or warranty made by the Buyer in this Agreement (including the schedules hereto) (without regard to any materiality or Material Adverse Effect qualifier contained in such representation or warranty); or

(ii) the failure by the Buyer to perform or observe any covenant, agreement or condition to be performed or observed by the Buyer pursuant to this Agreement.

7.3 Limitations on Indemnification. 

(a) The sum of all Damages pursuant to which indemnification is payable by the Sellers pursuant to Section 7.2 shall not exceed $3,809,700 for BC Holding and $3,660,300 for Onslow; provided, however, that in no event shall the limitations set forth in this Section 7.3(a) apply to the rights of the Buyer Indemnitees to be indemnified for fraudulent breaches or for breaches of Section 1.3, Section 1.5(a) and (b), Section 1.6, Section 2.14, Section 4.1(m) (with respect to Taxes) or Section 4.1(q).

(b) The Buyer Indemnitees shall not have the right to be indemnified pursuant to Section 7.2 unless and until the Buyer Indemnities shall have incurred on a cumulative basis since the Closing Date aggregate Damages in an amount exceeding $300,000, in which event the right to be indemnified shall be for all such Damages in excess of $300,000; provided, however, that in no event shall the limitations set forth in this Section 7.3(b) apply to fraudulent breaches or for breaches of Section 1.3, Section 1.5(a) and (b), Section 1.6, Section 2.14, Section 4.1(m) (with respect to Taxes) or Section 4.1(q).

7.4 Direct Claims for Indemnity. Whenever a claim for Damages shall arise for which an Indemnified Party shall be entitled to indemnification hereunder, such Indemnified Party shall notify the Indemnifying Party in writing within thirty (30) days of first becoming aware of such claim. Such notice shall specify in reasonable detail all facts and circumstances known to the Indemnified Party regarding the claim and shall explain in reasonable detail the basis on which the Indemnified Party claims a right to indemnity, including citation to relevant sections of this Agreement, and shall estimate the amount of the liability arising therefrom. If the Indemnifying Party shall be duly notified of such indemnity claim, the parties shall attempt to settle and compromise the same, or
if unable to do so within sixty (60) days of the Indemnified Party’s delivery of notice of indemnity claim, the parties may seek whatever remedy they may have at Law or in equity. Any rights of indemnification established by reason of such settlement

 

 

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or legal proceeding shall thereafter be paid and satisfied by the Indemnifying Party promptly after such date that the indemnified amount is finally determined.

7.5 Third Party Claims. 

(a) If any Indemnified Party receives notice of the assertion by any third party of any claim or of the commencement by any such third party of any action (any such claim or action being referred to herein as, a “Third Party Claim”) with respect to which an Indemnifying Party is or may be obligated to provide indemnification, the Indemnified Party shall promptly (and in no event later than thirty (30) days) notify the Indemnifying Party in writing (the “Third Party Claim Notice”) of the Third Party Claim stating the nature and basis of such Third Party Claim, and the amount thereof to the extent known; provided,
however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any liability or obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced by such delay.

(b) The Indemnifying Party shall have fifteen (15) days after receipt of the Third Party Claim Notice to undertake, conduct and control, through counsel of its own choosing, which counsel shall be reasonably satisfactory to the Indemnified Party, and subject to Section 7.3, at the Indemnifying Party’s sole expense, the settlement or defense thereof; provided, however, that the Indemnifying Party shall not have the right to assume the defense of any Third Party Claim, if (i) the Third Party Claim seeks only an injunction or other equitable relief, (ii) the Indemnified Party shall have been advised by counsel in writing that there are one or more legal or equitable defenses available to them which are
different from or in addition to those available to the Indemnifying Party, and, in the reasonable written opinion of the Indemnified Party, counsel for the Indemnifying Party could not adequately represent the interests of the Indemnified Party because such interests could be in conflict with those of the Indemnifying Party, or (iii) the Indemnifying Party shall not have assumed the defense of the Third Party Claim in a timely fashion. 

(c) If the Indemnifying Party shall assume the defense of a Third Party Claim as provided herein, the Indemnified Party shall cooperate with the Indemnifying Party in connection therewith. The Indemnifying Party shall permit the Indemnified Party to participate in the settlement or defense of such claim through counsel chosen by the Indemnified Party, provided that the fees and expenses of such counsel shall not be borne by the Indemnifying Party. The Indemnified Party shall not consent to the entry of any judgment, pay or settle such Third Party Claim without the prior written consent of the Indemnifying Party which consent will not be unreasonably withheld or delayed. If the Indemnifying Party exercises its right to assume the defense of a Third Party Claim, the Indemnifying Party shall not consent to the entry of any judgment, pay or make any settlement of any claims without
the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed. If a written offer is made to settle any Third Party Claim involving solely the payment of monetary relief to such third party, and the Indemnifying Party proposes to accept such settlement and the Indemnified Party refuses to consent to such settlement, then:  (i) the Indemnifying Party shall be excused from, and the Indemnified Party shall be solely responsible for, all further defense of such Third Party Claim; (ii) the maximum liability of the Indemnifying Party relating to such Third Party Claim shall be the amount of the proposed settlement plus any reasonable attorneys’

 

 

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fees and legal costs and expenses incurred prior to the rejection of such settlement by the Indemnified Party that are the responsibility of the Indemnifying Party pursuant to the terms hereof; and (iii) the Indemnified Party shall pay all attorneys’ fees and legal costs and expenses incurred after rejection of such settlement by the Indemnified Party.

7.6 Transfer Taxes. The Buyer shall be liable for and shall pay all excise, sales, use (including real property transfer or gains), stamp, documentary, filing, recordation and other similar taxes which may be imposed in connection with the transactions contemplated by the Agreement, together with any interest, additions or penalties with respect thereto (“Transfer Taxes”). Each party hereto hereby agrees to file all necessary documentation in connection with the payment and reporting of Transfer Taxes.

7.7 Mitigation. Notwithstanding anything in the Agreement to the contrary, the amount of any Damages otherwise payable to an Indemnified Party shall be reduced by the amount of insurance proceeds received by such Indemnified Party (after giving effect to deductibles or self insured or co-insurance payments made or premium payments made on such insurance) as compensation for the Damages. To the extent insurance recoveries are available under any insurance policy may be claimed with respect to any specific Damages, the Indemnified Party will undertake a good faith effort to make a claim under such insurance policy (provided making such claim is commercially reasonable, taking into account considerations including, but not limited to, the potential for increased premiums). To
the extent an Indemnified Party receives a payment for any Damages from a third party after having recovered for such Damages from the Indemnifying Party, the Indemnified Party will tender to the Indemnifying Party who made such initial payment an amount equal to the amount recovered from the third party, less all costs and expenses incurred by the Indemnified Party in recovering such amounts, insurance deductibles, co-insurance payments or similar costs and expenses. 

7.8 Exclusive Remedy. Other than for the breach of any Post-Closing Covenants made by the parties, the indemnification provided in this Article VII will, absent fraud, constitute the exclusive remedy of the Buyer Indemnitees or the Seller Indemnitees, as the case may be, and their respective assigns from and against any and all Damages asserted against, resulting to, imposed upon or incurred or suffered by, any of them, directly or indirectly, as a result of, or based upon or arising from this Agreement. The parties each hereby waive, to the fullest extent permitted under applicable law, any and all rights, claims, and causes of action it may have against any other party, or any of such
other party’s Affiliates, to the contrary.

7.9 Damages. Notwithstanding anything to the contrary elsewhere in this Agreement, no party or its Affiliates will be liable to any other party or its Affiliates for any Damages other than direct, compensatory Damages. Each party agrees that it is not entitled to recover and hereby waives any claim with respect to, and will not seek, indirect, lost profit, consequential, punitive or any other special Damages as to any matter under, relating to or arising out of the transactions contemplated by this Agreement

7.10 No Double Recovery. Notwithstanding the fact that any party may have the right to assert claims for indemnification under or in respect of more than one provision of this Agreement in respect of any fact, event, condition or circumstance, no party shall be entitled to recover the amount of any Damages suffered by such party more than once, regardless of

 

 

33

 

whether such Damages may be as a result of a breach of more than one representation or warranty or covenant. Moreover, notwithstanding anything in this Agreement to the contrary, if a matter for which the Buyer would otherwise be entitled to indemnification under this Agreement is reserved for or otherwise included in the Final Net Working Capital, then the Buyer shall not be able to recover for such item to the extent it was so reserved or accrued.

7.11 Adjustments to Purchase Price. Any payments made pursuant to this Article VII shall be consistently treated as adjustments to Purchase Price for all Tax purposes by the parties.

7.12 Escrow Arrangements.

(a) As described in Sections 1.2(e) and 6.4, at the Closing, the Buyer shall transfer to the Escrow Agent the Escrow Amount, which shall be available to compensate for Damages incurred by Buyer Indemnitees and subject to indemnification by the Sellers pursuant to Section 7.2.

(b) Subject to the following requirements, the BC Holding Escrow Amount shall be disbursed as follows:

(i) On June 30, 2007, if the remaining amount of the BC Holding Escrow Amount less BC Holding’s share of any pending claims by the Buyer under Article VII  and Section 1.3(d) is greater than or equal to One Million Two Hundred Sixty Nine Thousand Nine Hundred Dollars ($1,269,900) (“Half BC Holding Escrow Amount”), then BC Holding will receive Half BC Holding Escrow Amount. If, on June 30, 2007, the remaining amount of the BC Holding Escrow Amount less BC Holding’s share
of any pending claims by the Buyer under Article VII and Section 1.3(d) is less than Half BC Holding Escrow Amount, then BC Holding will receive an amount equal to the remaining BC Holding Escrow Amount less BC Holding’s share of any pending claims by the Buyer under Article VII and Section 1.3(d), if any.

(ii) On December 31, 2007 any remaining amount of the BC Holding Escrow Amount in excess of the amount of BC Holdings share of any pending claims made by the Buyer under Section 1.3(d) and Section 7.2 shall be disbursed to BC Holding; and

(iii) With respect to any BC Holding Escrow Amount retained by the Escrow Agent under Section 7.12(b)(ii) in respect of an pending claim for indemnification, upon resolution of any such pending claim, the Buyer and BC Holding shall deliver written instructions to the Escrow Agent indicating the amount, if any, to be disbursed to the Buyer in respect of such claim and that the balance of the remaining BC Holding Escrow Amount in respect of such claim shall be disbursed to BC Holding.

(c) Subject to the following requirements, the Onslow Escrow Amount shall be disbursed as follows:

(i) On December 31, 2007 any remaining amount of the Onslow Escrow Amount in excess of the amount of Onslow’s share any pending claims made by the Buyer under Section 1.3(d) and Section 7.2 shall be disbursed to Onslow; and

 

 

34

 

(ii) With respect to any Onslow Escrow Amount retained by the Escrow Agent under Section 7.12(c)(i) in respect of an pending claim for indemnification, upon resolution of any such pending claim, the Buyer and Onslow shall deliver written instructions to the Escrow Agent indicating the amount, if any, to be disbursed to the Buyer in respect of such claim and that the balance of the remaining Onslow Escrow Amount in respect of such claim shall be disbursed to Onslow.

(d) To the extent that the Buyer has the right to indemnification from either Seller pursuant to Section 7.2, as long as and to the extent that the Escrow Amount is available, such indemnifiable claims shall first be satisfied by disbursements from the Escrow Amount.

(e) Any and all accrued interest on the Escrow Amount shall belong to and shall be paid as follows: 51% to BC Holding and 49% to Onslow, as applicable, on a quarterly basis.

ARTICLE VIII

TERMINATION

8.1 Termination. This Agreement may be terminated at any time prior to the Closing, as follows, and in no other manner:

(a) By agreement of the Buyer on the one hand, and the Sellers’ Representative on the other hand.

(b) By the Buyer by written notice to the Sellers if the Closing shall not have occurred by September 15, 2006; provided, however, that the Buyer may not terminate this Agreement pursuant to this clause (b) if the failure of the applicable condition in Article V to be satisfied results from the breach of any covenant or agreement in this Agreement by the Buyer.

(c) By the Sellers’ Representative by written notice to the Buyer if the Closing has not occurred by September 15, 2006; provided, however, that the Sellers’ Representative may not terminate this Agreement pursuant to this clause (c) if the failure of the applicable condition in Article VI to be satisfied results from the breach of any covenant in this Agreement by the Company or any Seller.

8.2 Effect of Termination. In the event that this Agreement shall be terminated pursuant to Section 8.1, all obligations of the parties hereto under this Agreement shall terminate without further liability or obligation of either party to another, except for the obligations set forth in Sections 4.5 (Publicity) and 4.7 (Confidentiality) and Article IX (General Provisions), provided, however, that the parties shall remain obligated for any breach of this Agreement.

 

 

35

 

ARTICLE IX

GENERAL PROVISIONS

9.1 Expenses; Sellers’ Obligations.

(a) Except as otherwise provided in this Agreement, all expenses (including: legal, due diligence, accounting and investment banking fees and expenses) incurred pursuant to this Agreement and the transactions contemplated hereby shall be paid by the party incurring the expense; provided that the Sellers shall be responsible for all expenses of the Company or the Subsidiary incurred for services performed for the benefit of the Sellers in connection with the transactions contemplated by this Agreement.

(b) All obligations of the Sellers under this Agreement, to the extent not otherwise allocated herein, shall be borne by each Seller as follows: 51% by BC Holding and 49% by Onslow.

9.2 Further Assurances. Each party hereto agrees to use such party’s reasonable best efforts to cause the conditions to such party’s obligations herein set forth to be satisfied at or prior to the Closing insofar as such matters are within its control. Each of the parties agrees to execute and deliver any and all further agreements, documents or instruments reasonably necessary to effectuate this Agreement and the transactions referred to herein or contemplated hereby or reasonably requested by any other party to evidence its rights hereunder.

9.3 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Sellers and the Buyer. No waiver by any party of any default,  misrepresentation, or breach of warranty, covenant or agreement hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty, covenant or agreement hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

9.4 Notices. Any notices hereunder shall be deemed sufficiently given by one party to another only if in writing and if and when delivered or tendered by personal delivery or as of five (5) business days after deposit in the United States mail in a sealed envelope, registered or certified, with postage prepaid, twenty-four (24) hours after deposit with an overnight courier if delivered on a business day (or the next succeeding business day thereafter), or five (5) hours after confirmation of delivery by facsimile on a business day (or the next succeeding business day thereafter), addressed as follows:

If to the Buyer, or, following the Closing, the Company or the Subsidiary:

 

Infonxx, Inc.

655 Madison Avenue, 21st Floor

New York, New York 10021

	
       
 	
      Attention:   
 	
  Global General Counsel
 
	
       
 	
       
 	
  Zachary Green, Esq.
 

 

 

 

36

 

Telephone: (212) 909-8270

Telecopy: (212) 909-8284

With copies to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

      Attention:  
     Gary Horowitz, Esq.

      Telephone:  (212) 455-7113

      Telecopy:    (212) 455-2502

If to the Sellers, or, prior to the Closing, the Company or the Subsidiary:

BC Holding III Corporation

c/o Platinum Equity, LLC

360 North Crescent Drive

South Building

Beverly Hills, CA 90210

Attention: Eva M. Kalawski, Esq.

Telephone: (310) 712-1850

Facsimile: (310) 712-1863

Onslow Holdings, LLC

19 La Cintilla

Orinda, CA 94563

Attention: Stephen B. Baus

Telephone: (925) 386-0007

Facsimile:   (925) 386-0000

with a copy to:

Bingham McCutchen LLP

355 South Grand Avenue, Suite 4400

Los Angeles, CA 90071

Attention: Cynthia Dunnett, Esq.

Telephone: (213) 680-6400

Telecopy:   (213) 680-6499

or to such other address as the party addressed shall have previously designated by written notice to the serving party, given in accordance with this Section 9.4. A notice not given as provided above shall, if it is in writing, be deemed given if and when actually received by the party to

 

 

37

 

whom it is given. Any party may unilaterally change any one or more of the addresses to which a notice to the party or its representative is to be delivered or mailed, by written notice to the other party hereto given in the manner stated above.

9.5 Successors and Assigns, No Third Party Beneficiaries. This Agreement shall be binding upon and shall inure to the benefit of each of the parties hereto and their successors and permitted assigns. Notwithstanding the foregoing, the rights and obligations of the parties hereunder are not assignable (by agreement, operation of law or otherwise) to another Person without the prior written consent of all other parties hereto; provided, however, that the Buyer may assign its rights hereunder to Infonxx Operating Company, its wholly owned subsidiary, but no such assignment shall relieve the Buyer of any obligations
hereunder. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their successors and permitted assigns, any right or remedy under or by reason of this Agreement.

9.6 Sellers’ Representative. Each Seller hereby authorizes, directs and appoints BC Holding to act as sole and exclusive agent, attorney-in-fact and representative (the “Sellers’ Representative”) and authorizes and directs the Sellers’ Representative to (i) take any and all actions (including, without limitation, executing and delivering any documents, incurring any costs and expenses on behalf of the Sellers and making any and all determinations) which may be required or permitted by this Agreement to be taken by the Sellers; (ii) exercise such other rights, power and authority, as are authorized, delegated and granted to the Sellers’ Representative
pursuant to this Agreement; and (iii) exercise such rights, power and authority as are incidental to the foregoing. Any such actions taken, exercises of rights, power or authority, and any decision or determination made by the Sellers’ Representative consistent therewith, shall be absolutely and irrevocably binding on each Seller as if such Seller personally had taken such action, exercised such rights, power or authority or made such decision or determination in such Seller’s capacity. Each Seller agrees that the Sellers’ Representative shall not be liable for any actions taken or omitted to be taken under or in connection with this Agreement or the transactions contemplated hereby or thereby, except for such actions taken or omitted to be taken resulting from the Sellers’ Representative’s willful misconduct. Each Seller agrees that it will not make any claim against Buyer for actions taken by Buyer at the direction of the Sellers’ Representative in
connection with this Agreement.

9.7 Entire Agreement. This Agreement, including the annexes, schedules and exhibits attached hereto and other documents referred to herein, contains the entire understanding of the parties hereto with respect to its subject matter and supersedes all prior and contemporaneous agreements and understandings, oral and written, between the parties with respect to such subject matter.

9.8 Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the law and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any term or provision of this Agreement or the application thereof to any circumstance shall, in any jurisdiction and to any extent, be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable, such term or provision shall be ineffective as to such jurisdiction to the extent of such invalidity, prohibition or unenforceability without invalidating or rendering unenforceable 

 

 

38

such term or provision in any other jurisdiction, the remaining terms and provisions of this Agreement or the application of such terms and provisions to circumstances other than those as to which it is held invalid or enforceable. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

9.9 Governing Law; Jurisdiction; Waiver of Jury Trial. 

(a) This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. The parties hereto agree that any action, suit, counterclaim or proceeding (“Proceeding”) arising out of the transactions contemplated by this Agreement shall be commenced and litigated exclusively in the state and Federal courts located in the city of New York, State of New York. Each of the parties hereto hereby irrevocably and unconditionally (i) consents to submit to the exclusive jurisdiction of the Federal and state courts in the State
of New York for any Proceeding (and each such party agrees not to commence any Proceeding, except in such courts), (ii) waives any objection to the laying of venue of any Proceeding in the courts of the State of New York, and (iii) waives, and agrees not to plead or to make, any claim that any Proceeding brought in any court of the State of New York has been brought in an improper or otherwise inconvenient forum. 

(b) THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.

9.10 Incorporation of Recitals, Schedules and Annexes. The recitals, exhibits and Schedules referred to herein and attached hereto are hereby incorporated herein and made a part hereof as if fully set forth herein.

9.11 Construction. The article, section and subsection headings used herein are inserted for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. As used in this Agreement, the masculine, feminine or neuter gender, and the singular or plural, shall be deemed to include the others whenever and wherever the context so requires. Unless otherwise expressly provided, (a) the word “including” also means “including, without limitation” and does not limit the preceding words or terms, (b) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision, (c) any
definition of or reference to any law, agreement, instrument or other document herein will be construed as referring to such law, agreement, instrument or other document as from time to time amended, supplemented or otherwise modified, and (d) any definition of or reference to any statute will be construed as referring also to any rules and regulations promulgated thereunder.

 

 

39

9.12 Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. Facsimile signatures shall be acceptable and binding.

[Next page is signature page]

 

 

40

IN WITNESS WHEREOF, the parties hereto have executed this Purchase Agreement as of the day and year first above written.

 

	
                        SELLERS:
 	
                         
 	
                        BC HOLDING III CORPORATION
 
	 	 	 
	
                          
 	
                         
 	
                        By: 
 	
      /s/ Eva M. Kalawski
 
	
                         
 	
                         
 	
                         
 	
                        Name: Eva M. Kalawski
 
	
                         
 	
                         
 	
                         
 	
                        Title: Vice President & Secretary
 

 

	
                         
 	
                         
 	
                        ONSLOW HOLDINGS, LLC
 
	 	 	 
	
                          
 	
                         
 	
                        By: 
 	
                        /s/ Stephen B. Baus  
 
	
                         
 	
                         
 	
                         
 	
                        Name: Stephen B. Baus
 
	
                         
 	
                         
 	
                         
 	
                        Title: Managing Director 
 

 

	
                        BUYER:
 	
                         
 	
                        INFONXX, INC.
 
	 	 	 
	
                          
 	
                         
 	
                        By: 
 	
                        /s/ Zachary Green  
 
	
                         
 	
                         
 	
                         
 	
                        Name: Zachary Green
 
	
                         
 	
                         
 	
                         
 	
                        Title: Global General Counsel
 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Purchase Agreement as to its obligations in Section 4.12 and Section 4.15 only, as of the day and year first above written.

 

	
                         
 	
                         
 	
                        PLATINUM EQUITY, LLC
 
	 	 	 
	
                          
 	
                         
 	
                        By: 
 	
                        /s/ Eva M. Kalawski  
 
	
                         
 	
                         
 	
                         
 	
                        Name: Eva M. Kalawski
 
	
                         
 	
                         
 	
                         
 	
                        Title: Executive Vice President

                                General Counsel & Secretary
 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Purchase Agreement as to its obligations in Section 4.16 only, as of the day and year first above written.

 

	
                         
 	
                         
 	
                         
 	
                        STEPHEN B. BAUS
 
	 	 	 	 
	
                          
 	
                         
 	
                         
 	
                        /s/ Stephen B. Baus  
 
	
                         
 	
                         
 	
                         
 	
                        Name: Stephen B. Baus
 

 

 

ANNEX A

DEFINITIONS

For purposes of this Agreement, the following terms shall have the following meanings:

“Acceptance Notice” shall have the meaning set forth in Section 1.3(b).

“Affiliate” means, with respect to any Person, means any other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with such Person. For purposes of this definition, “control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” shall have the meaning set forth in the preamble hereto.

“AT&T” shall mean ATT Corp.

“Bank Debt” shall mean all amounts owed by the Company or the Subsidiary under sub-clause (i) of the definition of “Net Debt” to Lubbock National Bank.

“BC Holding” shall have the meaning set forth in the preamble. 

“BC Holding Escrow Amount”  shall have the meaning set forth in Section 1.2(e)(i).

“Benefit Plans” shall have the meaning set forth in Section 2.12(b).

“Business” means the business conducted by the Company and the Subsidiary, as the context requires or implies, as of the Closing Date, which is the business process outsourcing and private label outsourced call center functions, including directory assistance, customer relationship management and operator services.

“Buyer” shall have the meaning set forth in the preamble hereto.

“Buyer’s Statement” shall have the meaning set forth in Section 1.3(b).

“Buyer Indemnitees” shall have the meaning set forth in Section 7.2(a).

“Capital Lease Liabilities” means all liabilities of the Company and the Subsidiary characterized as capital leases in accordance with GAAP.

“Class A Interests” shall have the meaning set forth in the recitals hereto.

“Class A Interest Closing Consideration” shall have the meaning set forth in Section 1.2(b)(i).

“Class B Interests” shall have the meaning set forth in the recitals hereto.

 

 

“Class B Interest Closing Consideration” shall have the meaning set forth in Section 1.2(b)(ii).

“Closing” shall have the meaning set forth in Section 1.4.

“Closing Consideration” shall have the meaning set forth in Section 1.2(b).

“Closing Date” shall have the meaning set forth in Section 1.4.

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

“Company” shall mean Operator Service Company, LLC, a Delaware limited liability company.

“Company Intellectual Property Rights” shall have the meaning set forth in Section 2.16(a).

“Confidential Information” shall have the meaning set forth in Section 4.7. 

“Continuation Period” shall have the meaning set forth in Section 4.14(a).

“Current Employees” shall have the meaning set forth in Section 4.14(a).

“Damages” means all losses, obligations, costs, expenses, settlement payments, awards, damages, judgments, fines, penalties and other liabilities of any kind or nature whatsoever, including without limitation reasonable attorneys’, accountants’ and experts’ fees.

“Dispute Notice” shall have the meaning set forth in Section 1.3(b).

“Environmental Laws” shall have the meaning set forth in Section 2.17.

“ERISA” shall have the meaning set forth in Section 2.12(b).

“Escrow Agreement” shall mean the escrow agreement by and among the Sellers, the Buyer and the Escrow Agent, dated as of the date of the Closing and substantially in the form attached hereto as Exhibit C.

“Escrow Agent” shall have the meaning set forth in the Escrow Agreement.

“Escrow Amount” shall have the meaning set forth in Section 1.2(e).

“Estimated Net Debt” shall have the meaning set forth in Section 1.3(a).

“Financial Statements” shall have the meaning set forth in Section 2.5.

“Final Net Working Capital” shall mean the Net Working Capital on the Closing Date as determined pursuant to Section 1.3(b) and Section 1.3(c).

 

 

A-2

 

“Final Net Debt” shall mean the Net Debt on the Closing Date as determined pursuant to Section 1.3(b) and Section 1.3(c).

“GAAP” shall have the meaning set forth in Section 1.3(b).

“Governmental Entity” means any court, administrative agency, department or commission or other governmental body, agency, authority, official or instrumentality, domestic or foreign, Federal, state or local.

“Government Licenses” means all permits, licenses, franchises, orders, registrations, certificates, variances, approvals and other authorizations obtained from foreign, federal, state or local governments or governmental agencies or other similar rights.

“Half BC Holding Escrow Amount” shall have the meaning set forth in Section 7.12(b)(i).

“Hazardous Materials” means any and all hazardous substances, hazardous wastes, hazardous materials, wastes, solid wastes, pollutants or contaminants identified and/or regulated under any Environmental Law, including, but not limited to, substances or materials identified or regulated as flammable, ignitable, toxic, reactive, corrosive or radioactive materials, asbestos building materials, PCBs, petroleum hydrocarbons and used oil.

“Indemnified Party” means any party entitled to be indemnified pursuant to Article VII hereof.

“Indemnifying Party” means any party obligated to provide indemnification pursuant to Article VII hereof.

“Independent Auditor” shall have the meaning set forth in Section 1.3(c).

“Intellectual Property Rights” shall mean all of the following in any jurisdiction throughout the world: (i) patents and patent applications; (ii) trademarks, service marks, trade dress, trade names, corporate names and logos and Internet domain names and registrations and applications for registration thereof; (iii) copyrights and copyrightable works and registrations and applications for registration thereof; (iv) database rights; (v) trade secrets, confidential information, know-how and inventions; (vi) computer software; and (vii) all other intellectual property rights.

“Interests” shall have the meaning set forth in the recitals hereto.

“IRS” shall have the meaning set forth in Section 2.12(c).

“Knowledge of the Sellers” shall mean the actual knowledge of each of Stephen B. Baus, Charlie Anderson, Steve Ross, Paula Smith, Jill Froman, Scott McCarthy and Bob Wymbs.

“Leased Real Property” shall have the meaning set forth in Section 2.7(a).

“Leases” shall have the meaning set forth in Section 2.7(a).

 

 

A-3

 

“Licenses” shall have the meaning set forth in Section 2.11.

“Liens” shall have the meaning set forth in Section 2.6(e).

“Material Adverse Effect” means, with respect to the Company, a material adverse effect on, or any event, fact, circumstance or condition that has had a material adverse effect on, the business, operations, assets, financial condition, operating results, or liabilities of the Company and the Subsidiary or the Business, taken as a whole, other than any event, change, circumstance or effect relating (i) to the United States economy in general, or the economy of any foreign country in general in which the Company participates, (ii) in general to the industries in which the Company and the Subsidiary operate the Business and not disproportionately affecting the Business, (iii) to financial, banking, or securities markets (including any disruption thereof and any decline in the
price of any security or any market index), (iv) to the announcement of this Agreement or any transactions contemplated hereunder, the fulfillment of the parties’ obligations hereunder or the consummation of the transactions contemplated by this Agreement, or (v) to any outbreak or escalation of hostilities, war or act of terrorism involving the United States.

“Material Contracts” shall have the meaning set forth in Section 2.7(a).

“Net Debt” shall mean the amount equal to (i) any indebtedness of the Company and the Subsidiary as of the Closing for borrowed money that is evidenced by a note, bond, debenture or similar instrument (plus any accrued interest and any prepayment premiums, penalties, breakage costs or other similar obligations in respect thereof), if any, plus  (ii) any capitalized lease liabilities of the Company and the Subsidiary as of the Closing minus (iii) the amount of any cash or cash equivalents, as such terms are defined under GAAP, that is held by the Company or the Subsidiary as of the Closing, each as determined in accordance with GAAP
consistent with past practice and calculated on a consistent basis with the internal policies used to prepare the Financial Statements. For the avoidance of doubt, the amounts paid to the Company pursuant to Section 1.2(d) shall be included in the calculation of Estimated Net Debt and Net Debt as of the Closing Date; provided, however, that outstanding checks associated with the Participation Plan shall be taken into account for determining cash when making such calculations.

“Net Working Capital” shall mean (i) current assets of the Company and the Subsidiary less (ii) current liabilities of the Company and the Subsidiary (excluding for the purposes of both sub-clause (i) and (ii) the applicable items of Net Debt (i.e. cash and cash equivalents are excluded from current assets) and excluding for the purposes of sub-clause (ii) fees and expenses incurred by the Company relating to or in connection with the regulatory filings relating to the transactions contemplated by this Agreement and approved or directed by the Buyer or the Buyer’s counsel), all as determined in accordance with GAAP consistently applied and calculated on a consistent basis with the internal policies used to
prepare the Financial Statements.

“Onslow” shall have the meaning set forth in the preamble.

“Onslow Escrow Amount”  shall have the meaning set forth in Section 1.2(e)(ii).

“Participation Plan” shall have the meaning set forth in Section 1.2(d).

 

 

A-4

 

“Participation Plan Payments” shall have the meaning set forth in Section 1.2(d).

“Permitted Liens” means (i) Liens for Taxes not delinquent or the validity of which is being contested in good faith by appropriate proceedings and as to which adequate reserves have been established on the face of the Closing Balance Sheet reflecting the full amount of such contested Taxes, (ii) statutory landlord’s, mechanic’s, materialmen’s, carrier’s, workmen’s, repairmen’s or other similar Liens arising or incurred in the ordinary course of business and for amounts which are not delinquent, (iii) with respect to any owed or leased real property, easements, covenants and other restrictions of record, (iv) rights reserved to any Governmental Entity to regulate the affected assets, including zoning laws and ordinances which are not violated
by the current use or occupancy of such real property or the operation of the Business thereon, (v) purchase money liens and liens securing rental payments under any Capital Lease Liabilities, (vi) notice filings with respect to equipment leases or other leases of personal property and (vii) any other Lien that is immaterial with respect to the asset that it encumbers.

“Person” shall be construed broadly and shall include an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity (or any department, agency or political subdivision thereof).

“Platinum” shall have the meaning set forth in Section 4.12.

“Pre-Closing Covenants” shall mean, with respect to either the Buyer or the Sellers, covenants and other agreements that are obligations that are to be performed prior to the Closing.

“Pre-Closing Tax Period” shall have the meaning set forth in Section 4.9(a).

“Post-Closing Covenants” shall mean, with respect to either the Buyer or the Sellers, covenants and other agreements that have obligations that are to be performed after the Closing.

“Proceeding” shall have the meaning set forth in Section 9.9.

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

“Records” shall have the meaning set forth in Section 4.6.

“Review Period” shall have the meaning set forth in Section 1.3(b).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

“Sellers” shall have the meaning set forth in the preamble hereto. 

“Seller Indemnitees” shall have the meaning set forth in Section 7.2(c). 

“Sellers’ Representative” shall have the meaning set forth in Section 9.6.

“Straddle Period” shall have the meaning set forth in Section 4.9(i).

 

 

A-5

 

“Subsidiary” shall mean EAS Penticton Call Center ULC.

“Survival Date” shall have the meaning set forth in Section 7.1(a).

“Target Amount” shall mean $2,000,000.

“Tax” means any United States federal, state, local, or foreign taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Sec. 59A), customs duties, capital stock, franchise, escheat, abandoned property, unclaimed property, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever imposed by the United States or any state, county, local or foreign government or subdivision or agency thereof, including any interest, penalty, or
addition hereto, whether disputed or not.

“Tax Matter” shall have the meaning set forth in Section 4.9(d).

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement required to be supplied to any taxing authority in connection with Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Third Party Claim” shall have the meaning set forth in Section 7.5(a).

“Third Party Claim Notice” shall have the meaning set forth in Section 7.5(a).

“Top 20 Customers” shall have the meaning set forth in Section 2.21.

“Transfer Taxes” shall have the meaning set forth in Section 7.6.

 

 

A-6

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