SIRIT Technologies Inc. Reviews Its Successful Verdict Against Able Telcom Holding Corp.

Business Editors

TORONTO--(BUSINESS WIRE)--May 18, 2000

CASE SETS EXAMPLE TO THE INTERNATIONAL BUSINESS COMMUNITY

Earlier this week, SIRIT Technologies Inc. ("SIRIT" or the "Company") (CDN:SIRT.) announced a US$31.2 million verdict against Able Telcom Holding Corp. ("Able").

This verdict was rendered by a jury in the United States Federal District Court, Southern District of Florida in Miami on May 15, 2000. Also awarded was US$1.3 million of punitive damages against Thomas M. Davidson, Able's fiscal agent. For the benefit of SIRIT's shareholders and investors, the Company is providing additional information on the background to the litigation and damages awarded to SIRIT.

Background

In April of 1998, after some eight months of negotiations and due diligence, SIRIT and its institutional investors were in the final stages of culminating the management-led acquisition of MFS Network Technologies, Inc. ("MFSNT") from MCI WorldCom, Inc. ("WorldCom"). This acquisition represented a lucrative business opportunity for SIRIT and its investors. However, just before SIRIT's acquisition was to close, WorldCom abruptly discontinued communications with SIRIT and then, on April 27, 1998, announced the sale of MFSNT to Able. SIRIT's Chairman, Jacob Gornitzki, was convinced that Able and its fiscal agent Thomas M. Davidson ("Davidson") had acted in a deceitful, unethical and illegal manner to steal this transaction; and that, in doing so, they had relied upon confidential information which they had obtained from SIRIT under false pretenses. SIRIT was determined not to let Able and Davidson get away with this conduct, and thus SIRIT initiated legal action against Able and Davidson in May of 1998 in the United States District Court in Miami, Florida.

Over the ensuing two years, Mr. Gornitzki and SIRIT's team of lawyers pursued their investigation of Able's actions. Numerous documents were produced and examined, and depositions were taken from more than twenty witnesses. As a result of these efforts, SIRIT became even more convinced that the evidence strongly supported the allegations made against Able and Davidson in SIRIT's complaint, which charged tortious interference with contractual relations, fraud and breach of contract.

The Trial And The Verdict

On April 10, 2000, a trial of the lawsuit brought by SIRIT against Able and Davidson commenced in the Court in Miami before the Honourable Judge Alan S. Gold and a jury of citizens from the Miami community. At the conclusion of the trial, the jury found in favour of SIRIT and against Able and Davidson on all issues, and it awarded SIRIT $1.2 million (U.S.) in compensatory damages, $30 million (U.S.) in punitive damages against Able, and $1.3 million (U.S.) in punitive damages against Davidson.

In reaching its verdict, the jury was required to answer 29 special questions from the Court, and in every instance answered those questions in favour of SIRIT. Thus, the jury specifically found that:

* Able and Davidson interfered with SIRIT's business relations with WorldCom;

* the interference by Able and Davidson was improper and intentional;

* there was a business relationship between SIRIT and WorldCom evidenced by an actual and identifiable understanding or agreement, which in all probability would have been completed if the Able and Davidson had not interfered; and

* SIRIT was damaged by the interference of Able and Davidson.

Similarly, the jury specifically found that:

* Able and Davidson made misrepresentations or omissions;

* the misrepresentations or omissions related to material or existing facts;

* Able and Davidson knew or should have known that the misrepresentations were false and/or that the omissions made other statements materially misleading;

* Able and Davidson intended to induce SIRIT to rely and act upon the misrepresentations or omissions;

* SIRIT did indeed rely on those misrepresentations or omissions; and

* SIRIT suffered injury or damage because of its reliance on those misrepresentations or omissions.

Finally, the jury specifically found that Able Telcom Holding Corp. breached a nondisclosure and confidentiality agreement that it had signed with SIRIT and that the breach of contract caused damage to SIRIT. In reaching its determination on punitive damages, moreover, the jury specifically found that Able and Davidson acted willfully or with reckless indifference to the rights of SIRIT or otherwise engaged in fraud so as to warrant punitive damages.

In the face of the unanimous decision of the jury on all counts against Able and Davidson, it is difficult to understand that the only comment from Able was that it believed and continues to believe that SIRIT's suit was without merit.

The full text of the jury verdict can be read on SIRIT's web site at www.sirit.com

Possible Future Alternatives

SIRIT and its attorneys intend expeditiously to take all appropriate actions to execute and collect the judgments against both Able and Davidson. SIRIT continues to explore the re-institution of an action against WorldCom relating to the MFSNT acquisition. SIRIT had filed such an action on February 11, 2000, in the United States District Court in Omaha, Nebraska, but had voluntarily dismissed its case, without prejudice to reinstate it, when it became clear that Able was trying to use the existence of the WorldCom action to delay the trial in Miami. In making its determination regarding re-institution of litigation against WorldCom, SIRIT will take into account a number of considerations, including that Able never was successful in arranging for the financing required to purchase MFSNT, ultimately causing WorldCom to finance the acquisition through debt by itself; that ultimately WorldCom converted some US$25 million of this debt into equity in Able and now owns approximately 19 percent of Able's common shares; that WorldCom owns stock appreciation rights in Able representing approximately another 13 percent of Able's shares; and that the verdict returned by the jury in Miami reflects unambiguous findings of fact that are fully consistent with the allegations that are included in the Nebraska complaint.

SIRIT would like to thank its shareholders for their support over the last two years. On a personal note, Mr. Michael Briand, the President and CEO of SIRIT, would like to thank Mr. Gornitzki for his unwavering pursuit of justice in this case, and to emphasize that his commitment in time and effort during this period, including substantial time attending the earlier depositions as well as the entire five-week trial in Miami, has been extraordinary.

Mr. Gornitzki commented, "I am satisfied with the verdict and I am elated that the jury has so strongly and unambiguously vindicated the principles upon which this legal action was predicated. I believe that this will send a message to the business community that the rule of law is respected in international trade."

SIRIT continues to expand its wireless e-commerce business. The field installations of SIRIT equipment at selected McDonald's fast food outlets in the Los Angeles area continues to perform up to the expectations of our customer and the Company. Both parties continue to evaluate the projected roll-out beyond the pilot stores. SIRIT is also engaged in other potential projects which expand the use of our technology in other retail e-commerce applications.

SIRIT focuses its business on wireless, e-commerce payment solutions and identification systems in the transportation industry using radio frequency technology. SIRIT designs, develops and manufactures a range of radio frequency identification products marketed as the IDentity Series including IDentity HandsFree, IDentity Flex, and IDentity Title 21. SIRIT is the largest supplier of Title 21 compliant products to the United States market.

SIRIT has 34,082,843 common shares outstanding on a fully diluted basis.

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