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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 3, 2000
METRON TECHNOLOGY N.V.
(Exact name of registrant as specified in its charter)
The Netherlands 000-27863 98-0180010
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(State or other jurisdiction of Commission (I.R.S. Employer
incorporation or organization) File Number Identification Number)
1350 Old Bayshore Highway
Suite 360
Burlingame, California 94010
(Address of principal executive offices)
Registrant's telephone number, including area code: (650) 373-1133
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METRON TECHNOLOGY N.V.
INDEX
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Page No.
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<S> <C>
Item 2. Acquisition or Disposition of Assets. 3
Item 7. Financial Statements and Exhibits. 3
Signature 4
</TABLE>
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 3, 2000 Metron Technology (United Kingdom) Limited, a wholly owned
subsidiary of Metron Technology N.V. ("Metron"), acquired all of the common
shares of Shieldcare Limited ("Shieldcare"), a privately held company
incorporated in Scotland. The common shares were acquired from Gordon Riddell
and Effie Macrae Riddell for cash that amounted to 6.3 million British Pounds
(approximately 9.9 million US Dollars). Metron used its available cash
resources to fund the transaction. The transaction has been accounted for as
a purchase. Shieldcare is an authorized supplier of critical parts cleaning
services to major OEM and device manufacturing companies worldwide. The
company also operates as an authorized re-manufacturer of physical vapor
deposition (PVD) equipment for a well-known supplier of automated systems for
chemical vapor deposition (CVD). Metron intends to use the assets acquired in
the transaction to continue the operations of Shieldcare.
A copy of the press release issued by Metron on March 3, 2000 is attached
hereto as Exhibit 99.1 and is hereby incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
2.1 Agreement for the acquisition of the whole of the issued share capital
of Shieldcare Limited.
99.1 Press Release, dated as of March 3, 2000, entitled "Metron
Technology Acquires Critical Parts Cleaning Business"
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METRON TECHNOLOGY N.V.
Date: March 17, 2000 /s/ Peter V. Leigh
------------------
Peter V. Leigh
Vice President, Finance
Signing on behalf of the registrant
and as principal accounting officer
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DATED 3RD MARCH 2000
(1) GORDON RIDDELL
- AND -
(2) EFFIE MACRAE RIDDELL
- AND -
(3) METRON TECHNOLOGY
(UNITED KINGDOM) LIMITED
--------------------------------------------------------------------------
----
AGREEMENT
FOR THE ACQUISITION OF THE WHOLE OF THE ISSUED SHARE CAPITAL OF
SHIELDCARE LIMITED
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----
Hobson Audley
7 Pilgrim Street
London EC4V 6LB
Ref.: HA/METF-2/107799.05
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INDEX
<TABLE>
<CAPTION>
CLAUSE
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<S> <C>
1. DEFINITIONS AND INTERPRETATION 2
2. SALE OF SHARES 9
3. CONSIDERATION 9
4. COMPLETION 10
5. WARRANTIES 10
6. DEFERRED CONSIDERATION 11
7. PROTECTION OF GOODWILL 14
8. COSTS 16
9. GENERAL 16
10. TIME OF THE ESSENCE 17
11. FURTHER ASSURANCES 17
12. GOVERNING LAW 17
13. NOTICES 17
SCHEDULE 1 21
The Vendors and the Shares 21
SCHEDULE 2 22
Details of Shieldcare 22
SCHEDULE 4 24
Completion Formalities 24
1. ITEMS TO BE DELIVERED BY VENDORS 24
2. MATTERS TO BE PROCURED BY VENDORS 25
3. ITEMS TO BE DELIVERED BY THE PURCHASER 27
SCHEDULE 5 28
The Warranties 28
</TABLE>
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AGREEMENT
B E T W E E N :
(1) The persons whose names and addresses are set out in column (1) of Schedule
1 (the "Vendors"); and
(2) METRON TECHNOLOGY (UNITED KINGDOM) LIMITED registered no: 1350236, a
company incorporated in England whose registered office is at Units 6-7
Grafton Way West Ham Industrial Estate Basingstoke Hants RG22 6HY (the
"Purchaser"); and
RECITALS
(A) The Vendors wish to sell and the Purchaser wishes to purchase the entire
issued share capital of SHIELDCARE LIMITED ("Shieldcare") upon the terms
and conditions of this Agreement.
(B) Each of the Vendors is the beneficial owner of the shares in Shieldcare
shown against his or her name in columns (2) and (3) of Schedule 1.
(C) Shieldcare has no subsidiaries.
(D) Details of Shieldcare are set out in Schedule 2.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement (including the Schedules) except where the context
otherwise requires the following definitions are used:-
"Accounts" the audited balance sheet of
Shieldcare as at the Accounts Date
and the audited profit and loss
account of Shieldcare for the
financial period ended on the
Accounts Date including the
directors' and auditors' report
thereon and notes and all other
documents annexed thereto in the
agreed form;
"Accounts Date" 31st May, 1999;
"Act" the Companies Act 1985;
"agreed draft" and "agreed form" a draft agreed between the parties
to this Agreement and initialled by
them or on their behalf;
"ASSOCIATED COMPANY" in relation to Shieldcare and
(where applicable) the Purchaser,
any company which
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from time to time is a subsidiary
or subsidiary undertaking of
another company, a holding company
or parent undertaking of another
company, or a subsidiary or
subsidiary undertaking of a holding
company or parent undertaking of
another company;
"Bank" The Royal Bank of Scotland plc;
"Business" the business of Shieldcare;
"Business Day" a day on which clearing banks in
the City of London and in Scotland
are open for business excluding
public holidays, Saturdays and
Sundays;
"Completion" completion of this Agreement in
accordance with Clause 5 and
"Completion Date" shall mean the
date of Completion;
"Confidential Information" all information marked
"confidential" or stated at the
time of disclosure and subsequently
confirmed in writing to be
confidential and any information
which is not publicly known used in
or otherwise relating to Shieldcare
and/or its business, customers or
financial or other affairs,
including, without limitation,
information relating to:
(i) the marketing of goods or
services including, without
limitation, customer names
and lists and other details
of customers, sales targets,
sales statistics, market
share statistics, prices,
market research reports and
surveys, and advertising or
other promotional materials;
(ii) future projects, business
development or planning,
commercial
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relationships and
negotiations;
(iii) Intellectual Property Rights;
and
(iv) business accounts, financial
or contractual arrangements
and documentation
and all information in relation to
which Shieldcare owes a duty of
confidentiality to any third party;
"Deferred Consideration" the sum of up to L1,000,000,
being the Deferred Consideration,
payable in the circumstances
described in Clause 6;
"Disclosure Letter" the letter of even date in the
agreed form from the First Vendor
to the Purchaser which has been
countersigned by the Purchaser;
"Encumbrance" a mortgage, charge (whether fixed
or floating), standard security,
pledge, lien, option, restriction,
right of first refusal, right of
pre-emption, third-party right or
interest, other encumbrance or
security interest of any kind and
whether legal or equitable, or
another type of preferential
arrangement (including, without
limitation, a title transfer and
retention arrangement) having
similar effect;
"Escrow Accounts" two interest bearing accounts with
the Bank, the first in the joint
names of the Purchaser and the
First Vendor, the second in the
joint names of the Purchaser and
the Second Vendor, designated
respectively as the "First Escrow
Account" and the "Second Escrow
Account", to be used only for the
payment or repayment of the Escrow
Amount and operated in accordance
with the provisions of clause 6;
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"Escrow Amount" the sum of L1,000,000, being
the maximum amount of the Deferred
Consideration;
"Escrow Mandates" irrevocable bank mandates in the
form of the agreed draft in respect
of the operation of the Escrow
Accounts to be given by the Vendors
and the Purchaser.
"First Vendor" Gordon Riddell of 16 Mount Frost
Drive, Markinch, Fife KY7 6JQ;
"First Vendor's Employment" the employment of the First Vendor
by Shieldcare pursuant to the
Service Agreement, as amended and
restated from time to time;
"FRSs" the financial reporting standards
established by the Accounting
Standards Board Limited;
"holding company" the meaning given to it under
Sections 736 and 736A of the Act;
"Initial Consideration " the sum of L5,266,000, being
the aggregate initial consideration
payable for the Shares as set out
in Clause 4;
"Intellectual Property Rights" patents, trade marks, service
marks, design rights, database
rights, moral rights, rights in any
know-how, copyright or designs
(including but not limited to
semiconductor topography) and other
intellectual property rights in
each case whether registered or
unregistered and including
applications or rights to apply for
the grant of any of the foregoing,
trade or business names, rights in
confidential information and any
right or interest in any of the
foregoing having equivalent or
similar effect anywhere in the
world;
"Inventory" materials and services within the
meaning of "stocks and work in
progress" for the
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purposes of SSAP No. 9 (whether in
stock or agreed to be purchased) of
all kinds for use or resale
exclusively in the ordinary course
of the Business including without
limitation consumable stores, raw
materials and components for sale
or incorporation into products for
sale, goods and services in the
course of production, sales and
marketing materials, and finished
goods of Shieldcare;
"Management Accounts" the unaudited financial statements
of Shieldcare for period from the
Accounts Date to the Management
Accounts Date;
"Management Accounts Date" 31 December 1999;
"parent undertaking" the meaning given to it under
Section 258 of the Act;
"Properties" the leasehold properties referred
to in Schedule 3, together with the
premises at 92 Westlaw Place,
Whitehill Industrial Estate,
Glenrothes, currently occupied by
Shieldcare;
"Purchaser's Solicitors" Hobson Audley, 7 Pilgrim Street,
London EC4V 6LB;
"Purchaser's Scottish Solicitors" Dundas & Wilson, 191 West George
Street, Glasgow G2 2LD
"Purchaser's Tax Advisors" PriceWaterhouseCoopers, Edinburgh;
"Relevant Claim" a claim in respect of the
Warranties or under the Tax
Covenant or any claim arising in
respect of an Undisclosed Liability
for the purposes of Clause 6;
"Relevant Period" the period of two years prior to
the Completion Date;
"Restraint Period" the period from the date of this
Agreement up to the third
anniversary of Completion;
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"Restricted Territory" such geographical area or country
in which the Company has during the
Relevant Period carried on the
Business including (but not limited
to) the European Union, Norway,
Switzerland, Eastern Europe,
Israel, Singapore and the United
States of America;
"Second Vendor" Effie Macrae Riddell of 8 Bonnyton
Court, Glenrothes, Fife;
"Service Agreement" the service agreement to be entered
into with Shieldcare by the First
Vendor pursuant to this Agreement
in the form of the agreed draft;
"Shares" 9,500 issued ordinary shares of
L1 each, fully paid being the
entire issued share capital of
Shieldcare;
"subsidiary" the meaning given to it under
Sections 736 and 736A of the Act;
"subsidiary undertaking" the meaning given to it under
Section 258 of the Act;
"Taxation" all forms of tax, duty, levy or
other imposition whenever and by
whatever authority imposed and
whether of the United Kingdom or
elsewhere, including (without
limitation) income tax, corporation
tax, advance corporation tax,
capital gains tax, inheritance tax,
value added tax, customs duties,
rates, stamp duty, stamp duty
reserve tax, national insurance and
social security or other
contributions, and any interest,
penalty, fine or surcharge in
connection with any such taxation;
"Taxes Act" the Income and Corporation Taxes
Act 1988;
"Tax Covenant" the tax deed to be entered into
pursuant to this Agreement in the
form of the agreed draft;
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"TCGA" the Taxation of Chargeable Gains
Act 1992;
"VAT" Value Added Tax;
"VAT Act" the Value Added Tax Act 1994;
"Vendors' Solicitors" T.D. Young & Co. (the "First
Vendor's Solicitors"), New Law
House, Saltire Centre, Glenrothes,
Fife KY6 2BB, and McClure Naismith,
49 Queen Street, Edinburgh EH2 3NH
(the "Second Vendor's Solicitors");
"Warranties" the representations, warranties and
undertakings on the part of the
First Vendor which are set out in
Parts 1 and 2 of Schedule 5;
1.2 Any reference to an enactment (or subordinate legislation or any rule
made by a local authority and having the effect of law) is a reference
to it as already amended and includes a reference to any repealed
enactment which it may re-enact with or without amendment.
1.3 Unless there is something in the subject or context inconsistent
therewith:-
1.3.1 words importing the singular include the plural and vice versa;
1.3.2 words importing any gender shall include all genders; and
1.3.3 words importing individuals shall include corporations or
unincorporated bodies of persons and partnerships.
1.4 The headings in this Agreement shall not affect its interpretation.
1.5 Save where otherwise provided in this Agreement, references in this
Agreement to the Vendors include each of them severally.
1.6 References to Clauses, Paragraphs, Schedules, Annexures and
Attachments are to clauses, paragraphs, schedules, annexures and
attachments to this Agreement.
1.7 Any reference to times of the day are to London time.
1.8 References to parties to this Agreement include their respective
permitted assignees and/or their respective successors in title to
substantially the whole of their respective undertakings and, in the
case of individuals, to their respective estates and personal
representatives.
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2. SALE OF SHARES
2.1 Each of the Vendors shall sell or procure the sale of the number
of Shares shown opposite the respective Vendors' name in column
(3) of Schedule 1 and the Purchaser shall purchase the Shares upon
and subject to the terms and conditions of this Agreement.
2.2 The Purchaser shall acquire good legal and beneficial title to the
Shares free from Encumbrances and together with all rights which
now are or at any time hereafter may become attached to them.
2.3 Each of the Vendors waives any pre-emption rights he or she may
have in relation to any of the Shares whether under the articles
of association of Shieldcare or otherwise and acknowledges that he
or she has obtained separate and independent legal advice on the
terms of this Agreement and the sale of the Shares hereunder.
2.4 Each of the Vendors hereby warrants, represents and undertakes to
the Purchaser that he or she has the requisite power and authority
to enter into and perform his obligations under this Agreement,
that the execution and delivery of and the performance by the
Vendors of their respective obligations under this Agreement will
not:-
2.4.1 result in a breach of, or constitute a default under, any
agreement, instrument or arrangement to which the relevant
Vendor is a party or by which the relevant Vendor is bound;
2.4.2 result in a breach of any order, judgment or decree of any
Court or governmental agency to which the relevant Vendor
is a party or by which the relevant Vendor or is bound.
2.4.3 the relevant Vendor is not entitled to any claim of any
nature against Shieldcare or any of its officers,
employees, principal customers or suppliers and the
relevant Vendor has not assigned to any third party the
benefit of any such claim to which he or she was previously
entitled.
3. CONSIDERATION
3.1 The Initial Consideration for the sale of the Shares shall be the
payment to the Vendors of the cash sums shown opposite their
respective names in column (4) of Schedule 1;
3.2 In the circumstances described in Clause 6 the Deferred
Consideration shall be paid to the Vendors in the same proportions
as the Initial Consideration is to be paid.
3.3 All sums payable to the Vendors or either of them by the Purchaser
under this Agreement shall be paid (in the case
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of the First Vendor) to the First Vendor's Solicitors and shall be
paid (in the case of the Second Vendor) to the Second Vendor's
Solicitors who shall respectively receive the same as agents for
the relevant Vendor and whose respective receipt shall be an
absolute discharge of the Purchaser under Clause 4.1 and be
binding and conclusive against the respective Vendors.
4. COMPLETION
4.1 The sale and purchase of the Shares shall be completed at the
offices of the First Vendor's Solicitors immediately following the
signing of this Agreement.
4.2 At Completion:-
4.2.1 the Vendors shall deliver or procure to be delivered to the
Purchaser or the Purchaser's Solicitors or the Purchaser's
Scottish Solicitors, as the case may be, those items set
out in Paragraph 1 of Schedule 4;
4.2.2 the Vendors shall procure that those matters specified in
Paragraph 2 of Schedule 4 are effected at or with effect
from Completion; and
4.2.3 the Purchaser shall deliver or procure to be delivered to
the Vendors or to the Vendors' Solicitors, who shall
receive the same as agent for the respective Vendors and
whose receipt shall be an absolute discharge of the
Purchaser and shall be binding upon and conclusive against
each of the Vendors, those items set out in Paragraph 3 of
Schedule 4.
5. WARRANTIES
5.1 The First Vendor hereby warrants, represents and undertakes to the
Purchaser in terms of the Warranties with the intention of
inducing the Purchaser to enter into this Agreement and
acknowledges that the Purchaser was induced to enter into this
Agreement on the basis of and in reliance upon the Warranties. The
Purchaser acknowledges that it has not been induced to enter into
this Agreement by any representation or warranty other than the
Warranties.
5.2 The Warranties are subject to the information fully and fairly
disclosed in the Disclosure Letter but to no other qualification
whatsoever and liability under the Warranties and the Tax Covenant
and in relation to Undisclosed Liabilities (as defined in Clause
6) is limited in accordance with Part 3 of Schedule 5. No letter,
document or other communication shall be deemed to constitute a
disclosure for the purposes of the Warranties and the Tax Covenant
unless the same is accepted as such by the Purchaser and is
expressly included in the Disclosure Letter.
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5.3 The rights and remedies of the Purchaser in respect of the
Warranties shall continue and subsist and not be affected by
Completion or by any investigation made by or on behalf of the
Purchaser into the affairs of Shieldcare or by any other event or
matter whatsoever except a specific and duly authorised written
waiver or release by the Purchaser.
5.4 Where any of the Warranties is qualified by the expression "to the
best of the knowledge, information and belief of the First Vendor"
or "so far as the First Vendor is aware" or any similar expression
that Warranty is deemed to include an additional statement that it
has been made after due and careful enquiry.
5.5 Except as otherwise expressly provided for in the Warranties or
the Disclosure Letter each of the Warranties is, unless otherwise
expressly stated, given as at the Completion Date, and is to be
construed independently of the others and is not limited by
reference to any of the others.
5.6 The Vendors waive and may not enforce a right which they may have
against each other and against Shieldcare or any director, officer
or employee of or to Shieldcare in respect of a misrepresentation,
inaccuracy or omission in or from information or advice supplied
or given by any such persons for the purpose of assisting the
First Vendor to give a Warranty or prepare the Disclosure Letter.
6. DEFERRED CONSIDERATION
6.1. The purpose of this Clause 6 is to ensure that, if the audited
accounts of Shieldcare for the financial year ending 31 May 2000
("the 2000 Accounts") or the audited accounts of Shieldcare for
the financial year ending 31 May 2001 ("the 2001 Accounts") reveal
any liabilities which
(a) are not disclosed in the Disclosure Letter; or
(b) are not provided for in the Accounts or the Management
Accounts; or
(c) arise other than in the ordinary course of business proved
pursuant to this Clause 6.1 since the Accounts Date; or
(d) are not or otherwise excluded or quantified by the
provisions contained in Part 3 of Schedule 5 or this Clause
6.1;
("Undisclosed Liabilities") the amount of such liability
will reduce the Deferred Consideration which would
otherwise be payable to the Vendors.
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6.2. On Completion:-
6.2.1. L1,000,000, being the maximum amount of the Deferred
Consideration, shall be paid into the Escrow Accounts,
apportioned as to L510,105.20 to the First Escrow
Account and as to L489,894.80 to the Second Escrow
Account (the ratio of such apportionments being referred to
in this Clause 6 as the "Relevant Proportions");
6.2.2. the Escrow Mandates shall be delivered to the branch of the
Bank at which the Escrow Accounts are opened; and
6.2.3. the Escrow Amount (together with interest thereon) shall be
applied in accordance with the provisions in this clause 6.
6.2.4. If the Purchaser has not notified the Vendors of any
Undisclosed Liabilities by the date ("the First Relevant
Date") which is (i) 30th November 2000 or, (ii) if earlier,
the date of completion of the audited accounts for the
fiscal year ending May 31, 2000, ("the First Relevant
Date") 50 per cent of the Escrow Amount shall be paid in
full (together with all interest accrued to that date) to
the Vendors' Solicitors in the Relevant Proportions on the
Business Day next following the First Relevant Date, for
distribution to the Vendors.
6.2.5. If the Purchaser has not notified the Vendors of any
Undisclosed Liabilities by the date ("the Second Relevant
Date") which is (i) 30th November 2001 or, (ii) if earlier,
the date of completion of the audited accounts for the
fiscal year ending May 31, 2001, the amount then remaining
in the Escrow Accounts shall be paid in full (together with
interest) to the Vendors' Solicitors on the Business Day
next following the Second Relevant Date for distribution to
the Vendors.
6.2.6. If the Purchaser has notified the Vendors of any
Undisclosed Liabilities on or before the Second Relevant
Date and the amount of any such claim has not been proved
by the Purchaser, then the Purchaser shall on the date of
the first such notification and thereafter every three
months after the First Relevant Date use all reasonable
endeavours to make a reasonable estimate of what the
maximum liability of the Vendors in respect of all such
Undisclosed Liabilities would be (the "Notional Liability")
and shall notify the Vendors in writing of the estimated
amount of Notional Liability.
6.3. Where the Purchaser has notified the Vendors of any Undisclosed
Liabilities, payments out of the Escrow Accounts shall be made, in
the Relevant Proportions, as follows (in order of priority):-
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6.3.1. where the amount of any Undisclosed Liabilities has been
proved by the Purchaser, then such amount shall be paid to
the Purchaser on the next Business Day, to the extent there
are sufficient funds in the Escrow Accounts;
6.3.2. on the first Business Day after the First Relevant Date
there shall be paid to the Vendors' Solicitors for
distribution to the Vendors, as part of the Deferred
Consideration, the Escrow Amount less (i) 50 per cent of
the Escrow Amount and (ii) the current estimated aggregate
Notional Liability in respect of all such claims (provided
that the figure calculated pursuant to this paragraph shall
not be less than zero);
6.3.3. on the first Business Day after the Second Relevant Date
there shall be paid to the Vendors' Solicitors for
distribution to the Vendors, as part of the Deferred
Consideration, the amount then remaining in the Escrow
Accounts less the current estimated aggregate Notional
Liability in respect of all such claims (provided that the
figure calculated pursuant to this paragraph shall not be
less than zero); and
6.3.4. where the amount of all previously outstanding Undisclosed
Liabilities has been proved by the Purchaser after the
Second Relevant Date, on the second Business Day thereafter
the amount so proved shall be paid to the Purchaser on the
next Business Day, to the extent there are sufficient funds
in the Escrow Accounts, and any remaining balance held in
the Escrow Account shall be paid to the Vendors' Solicitors
for distribution to the Vendors.
6.4 For the purpose of this clause 6 Undisclosed Liabilities shall be
proved by the Purchaser once the liability of the Vendors
thereunder has been agreed between the Vendors and the Purchaser
or is the subject of a judgment of a court of competent
jurisdiction which if capable of appeal is not the subject of such
an appeal within the time provided (time to be of the essence) and
the First Vendor shall not admit or concede liability or agree a
compromise with the Purchaser in respect of any Undisclosed
Liability without the prior written consent of the Second Vendor
(such agreement not to be unreasonably withheld or delayed). A
claim by the Purchaser for an Undisclosed Liability shall be
deemed to have been abandoned by the Purchaser if it has not been
settled or resolved with the agreement of the Vendors, or if
proceedings in respect of the alleged Undisclosed Liability have
not been issued and served upon the Vendors within a period of 3
months after the First Relevant Date in respect of claimed
Undisclosed Liabilities in relation to the 2000 Accounts, or after
the Second Relevant Date in respect of Undisclosed Liabilities in
relation to the 2001 Accounts.
6.5 Receipt by the First Vendor's Solicitors of any sum payable to
them pursuant to this clause 6 on behalf of the First Vendor shall
be deemed to be receipt by the First Vendor and Receipt by the
Second Vendor's Solicitors of any sum payable to them pursuant to
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this clause 6 on behalf of the Second Vendor shall be deemed to be
receipt by the Second Vendor.
6.6 An Undisclosed Liability shall not be deemed to have been properly
claimed for the purposes of this clause 6 unless the Purchaser
gives details of the circumstances giving rise to the claim and
the amount claimed.
7. PROTECTION OF GOODWILL
7.1 The First Vendor shall not during the Restraint Period whether
alone or jointly or as manager, adviser, consultant or agent for
another person or with another and whether directly or indirectly
carry on be engaged or concerned in or (except as the owner for
investment of securities dealt in on a recognised stock exchange
and not exceeding ten per cent in nominal value of the securities
of that class but provided the First Vendor is not involved in the
management of any business in which he holds such interest) be
interested or assist in any business which:-
7.1.1 is situated within the Restricted Territory; and
7.1.2 competes with the Business carried on by Shieldcare.
7.2 The First Vendor shall not before the expiry of the Restraint
Period whether on his own account or otherwise and whether
directly or indirectly solicit, entice or accept the custom of or
otherwise deal with (in relation to any goods or services supplied
by Shieldcare and in competition with Shieldcare or its Associated
Companies) any person firm or company who is or was during the
Relevant Period and Restraint Period a customer of or who has
purchased or agreed to purchase goods from or who has employed the
services of Shieldcare or its Associated Companies or who has been
canvassed (other than by way of general advertising) with a view
to undertaking any of the activities referred to above.
7.3 The First Vendor shall not before the expiry of the Restraint
Period directly or indirectly solicit or endeavour to entice away,
offer employment to or employ, or offer or conclude any contract
for services with any person occupying a senior or managerial
position who was employed (whether as an employee or consultant)
by Shieldcare at any time during the Relevant Period likely to
be:-
7.3.1 in possession of Confidential Information; or
7.3.2 able to influence relationships with customers, employees
of Shieldcare or key suppliers.
7.4 During the Restraint Period the Vendors shall not knowingly do or
say anything which may lead a person to cease to deal with
Shieldcare on substantially equivalent terms to those previously
offered or not at all.
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7.5 Each Vendor undertakes that after Completion or, if later, the end
of any period following Completion during which the Vendor
concerned is employed by or a consultant to the Purchaser or
Shieldcare or their Associated Companies he or she shall not (save
as may be required in the course of the First Vendor's
Employment):-
7.5.1 use the name of "Shieldcare Limited" or any name of any its
Associated Companies that is likely to cause confusion in
the minds of members of the public;
7.5.2 do or say anything harmful to the reputation of Shieldcare
or any of its Associated Companies or of the Business;
7.5.3 not use any trade mark, name or logo used by Shieldcare
during the preceding 12 months (or any colourable imitation
thereof); or
7.5.4 in any way hold himself or herself out or permit himself or
herself to be held out as being interested in or in anyway
connected with Shieldcare.
7.6 After Completion the Vendors shall:-
7.6.1 not use or disclose to any person Confidential Information
he or she has or acquires (in the case of the First Vendor,
save to the extent that he may be required to do so in the
course of his duties under the Service Agreement); and
7.6.2 make all reasonable efforts to prevent the unauthorised use
or disclosure of Confidential Information.
7.7 Clause 7.6 (Confidential Information) does not apply to:-
7.7.1 disclosure of Confidential Information to a director,
officer or employee of the Purchaser or Shieldcare whose
function requires him to have the Confidential Information
provided that the Vendors shall procure that such
directors, officers and employees maintain the Confidential
Information as strictly confidential;
7.7.2 use or disclosure of Confidential Information required to
be used or disclosed by law;
7.7.3 disclosure of Confidential Information to a legal or other
professional adviser for the purpose of advising the
Vendors provided that the Vendors shall procure that such
advisers maintain the Confidential Information as strictly
confidential; or
15
<PAGE>
7.7.4 Confidential Information which becomes publicly known
except by the Vendors' breach of this Agreement.
7.8 Each of the Vendors acknowledges that:-
7.8.1 each of the foregoing Clauses of this Clause constitutes an
entirely separate and independent restriction on him or
her, notwithstanding that it may be contained in the same
sub-clause, paragraph, sentence or phrase;
7.8.2 the duration, extent and application of each of the
restrictions are no greater than is necessary for the
protection of the goodwill of the Business and the value of
the Shares; and
7.8.3 the covenants and undertakings contained in this Clause 7
are reasonable and are entered into for the purpose of
protecting the goodwill of the Business and that
accordingly the benefit of the covenants and undertakings
may be assigned by the Purchaser and its successors in
title without the consent of the Vendors.
7.9 In the event that any of the restrictions contained in this Clause
7 are found to be void but would be valid if some part thereof
were deleted, modified or varied or the period or area of
application reduced, such restriction shall apply with such
modification as may be necessary to make it valid and effective.
7.10 The First Vendor shall draw the provisions of this clause 7 to the
attention of any third party who may at any time before or after
the termination of the First Vendor's Employment Agreement offer
to engage the First Vendor in any capacity and for whom or with
whom the First Vendor intends to work during the period in which
the covenants in this clause 7 are in force.
8. COSTS
Each of the parties shall pay its own legal and accountancy costs,
charges and expenses connected with the negotiation, preparation and
implementation of this Agreement and the Purchaser shall pay all stamp
duty on the transfer of the Shares.
9. GENERAL
9.1 This Agreement when taken together with the documents in the
agreed form (or the executed engrossments of them) constitutes the
entire agreement and understanding between the parties with
respect to all matters herein referred to.
16
<PAGE>
9.2 No variation of this Agreement or any of the agreed drafts shall
be valid unless it is in writing and signed by or on behalf of
each of the parties.
9.3 As far as it remains to be fulfilled this Agreement will continue
in full force and effect notwithstanding Completion.
9.4 Notwithstanding any rule of law to the contrary any release,
waiver or compromise or any other arrangement of any kind
whatsoever which the Purchaser may agree to or effect as regards
one of the Vendors in connection with this Agreement and in
particular the Warranties shall not affect the rights and remedies
of the Purchaser as regards the other Vendor.
9.5 If at any time any one or more of the provisions hereof is or
becomes invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the remaining
provisions hereof shall not be in any way affected or impaired
thereby.
9.6 This Agreement may be executed in any number of counterparts and
by the parties on separate counterparts, but shall not be
effective until each party has executed at least one counterpart.
Each counterpart, when executed, shall be an original of this
Agreement and all counterparts shall together constitute one
instrument. Each counterpart, when executed, shall be an original
of this Agreement and all counterparts shall together constitute
one instrument.
10. TIME OF THE ESSENCE
Time shall be of the essence in this Agreement both as regards the dates
and periods mentioned herein and as to any dates and periods which may by
agreement in writing between or on behalf of the Vendors and the
Purchaser be substituted for them.
11. FURTHER ASSURANCES
At any time after Completion the Vendors shall execute all such documents
and do such acts and things as the Purchaser may reasonably require for
the purpose of vesting in the Purchaser the full legal and beneficial
title of the Shares and giving to the Purchaser the full benefit of this
Agreement.
12. GOVERNING LAW
This Agreement and any dispute arising under it shall be governed in all
respects by Scottish law and the parties hereto irrevocably submit to the
non-exclusive jurisdiction of the Scottish Courts.
13. NOTICES
13.1 Any notice to a party under this Agreement shall be in writing
signed by or on behalf of the party giving it and shall, unless
delivered to a party personally, be left at,
17
<PAGE>
or sent by prepaid first class post (air courier, if overseas),
prepaid recorded delivery or fax to the party at the address of
the relevant party set out in this Agreement (and in the case of
the Purchaser with copies sent to the Purchaser's Solicitors and
to Metron Technology N.V., 1350 Old Bayshore Highway, Suite 360,
Burlingame, CA 94010, USA and in the case of the Second Vendor
with copies to the Second Vendor's Solicitors with the notice and
any envelope containing the same marked: URGENT: Ref:
PGW/RI179002) or another address specified by that party and
notified in writing to the other parties from time to time.
13.2 Except as referred to in Clause 13.3, a notice shall be deemed to
have been served:
13.2.1 at the time of delivery if delivery personally;
13.2.2 48 hours after posting in the case of an address in the
United Kingdom and 96 hours after despatching by air
courier for any other address; or
13.2.3 3 hours after transmission if served by fax on a Business
Day prior to 3 p.m. or in any other case at 10 a.m. (in
both cases, in the place of receipt) on the Business Day
after the date of despatch.
If the deemed time of service is not during normal business hours
in the country of receipt, the notice shall be deemed served at
or, in the case of faxes, 2 hours after, the opening of business
on the next Business Day of that country.
13.3 The deemed service provisions set out in Clause 13.2 do not apply
to:-
13.3.1 a notice served by post or air courier, if there is a
national or local suspension, curtailment or disruption of
postal services or air courier which affects the collection
of the notice or is such that the notice cannot reasonably
be expected to be delivered within 48 hours or 96 hours (as
appropriate) after posting or despatch; and
13.3.2 a notice served by fax, if, before the time at which the
notice would otherwise be deemed to have been served, the
receiving party informs the sending party that the notice
has been received in a form which is unclear in any
material respect, and, if it informs the sending party by
telephone, it also despatches a confirmatory facsimile
within 2 hours.
13.4 In proving service it will be sufficient to prove:
13.4.1 in the case of personal service, that it was handed to the
party or delivered to or left in an appropriate place for
receipt of letters at its address;
18
<PAGE>
13.4.2 in the case of a letter sent by post, that the letter was
properly addressed, stamped and posted; or
13.4.3 in the case of a letter sent by air courier, that the
letter was properly addressed and delivered to the courier
company; or
13.4.4 in the case of fax, that it was properly addressed and
despatched to the number of the party and the person
despatching the fax has received a report showing a
successful transmission.
19
<PAGE>
13.5 A party shall not attempt to prevent or delay the service on it of
a notice connected with this Agreement.
IN WITNESS WHEREOF these presents consisting of this and the preceding [ ] pages
together with the Schedules annexed hereto are subscribed as follows:
by Gordon Riddell
at Glenrothes on /s/ Gordon Riddell
Third March 2000 G Riddell
in the presence of:
/s/ Ian Harvey Taylor
.............................. witness
Ian Harvey Taylor
.............................. Name
New Law House Saltire Centre
.............................. Address
Glenrothes
..............................
Solicitor
.............................. Occupation
by Effie Macrae Riddell
at Glenrothes on /s/ Effie M. Riddell
Third March 2000 ...................................
in the presence of: E Riddell
/s/ Martin Quinn
.............................. witness
Martin Quinn
.............................. Name
49 Queen Street
.............................. Address
Edinburgh
..............................
Solicitor
.............................. Occupation
Executed for and on behalf of
METRON TECHNOLOGY (UNITED KINGDOM) ...........................
LIMITED at London on Director
Third March 2000
/s/ Michael Beeby
...........................
Director/Secretary
in the presence of
/s/ Max Audley
Max Charles Audley
7 Pilgrim Street, London EC4
Solicitor
20
<PAGE>
SCHEDULE 1
THE VENDORS AND THE SHARES
<TABLE>
<CAPTION>
(1) (2) (3) (4)
NAMES AND ADDRESSES OF VENDORS NO. OF ORDINARY SHARES NO. OF ORDINARY INITIAL
HELD IN SHIELDCARE SHARES TO BE SOLD CONSIDERATION
RECEIVED ON
COMPLETION
<S> <C> <C> <C>
Gordon Riddell 4,846 4,846 L2,686,214
Effie Macrae Riddell 4,654 4,654 L2,579,786
</TABLE>
21
<PAGE>
SCHEDULE 2
DETAILS OF SHIELDCARE
SHIELDCARE
Name of Company: Shieldcare Limited
Place of registration: Scotland
Registered Number: 136428
Date of Incorporation: 6th February 1992
Registered Office: New Law House
Saltire Centre
Glenrothes Fife KY6 2BB
Directors: Gordon Riddell
Effie Macrae Riddell
Iain Alexander Headrick McDonald
Secretary: T. D. Young & Co
Accounting Reference Date: 31st May
Auditors: Carters
Authorised share capital: 9,500 ordinary L1 shares
Issued share capital: 9,500 ordinary L1 shares
Details of other holders of Shares
and Shares held: None
Encumbrances: A bond and floating charge granted
in favour of The Royal Bank of
Scotland dated 18 October 1992
22
<PAGE>
SCHEDULE 3
THE PROPERTIES
PARTICULARS OF LEASEHOLD PROPERTIES
<TABLE>
<CAPTION>
- ---------------------- ---------------------------- --------------- ----------------------- ---------------- ----------------
Address Lease between Term Current Rent and Next Other Use
Review Occupational
Interests
- ---------------------- ---------------------------- --------------- ----------------------- ---------------- ----------------
- ---------------------- ---------------------------- --------------- ----------------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
84, 85 and 86 (1) Mordechia Bamberger, 22/12/94 - L19,000 per annum None Classes 4 or 5
Westlaw Place, Moses A Bamberger, Isaac 27/12/2003 exclusive of Value of the
Whitehill Industrial D Bamberger, Scholime Added Tax which is Schedule to
Estate, Glenrothes Bamberger and David payable in addition. the Town &
Bamberger and (2) No further review. Country (Use
Shieldcare dated 7 and 20 Classes)
March and registered in (Scotland)
the Books of Council and Order 1989.
Session on 14 April all
1995.
- ---------------------- ---------------------------- --------------- ----------------------- ---------------- ----------------
- ---------------------- ---------------------------- --------------- ----------------------- ---------------- ----------------
79 Whitecraigs Road, (1) Gordon Riddell and 16/2/98 - L17,500 per annum None Business of
Glenrothes Effie Macrae Riddell as 15/2/2008 exclusive of Value Shieldcare
Managing Trustees and Added Tax which is
Britannia Life Trustees payable in addition.
Limited as Pensioner 16/2/2003.
Trustee of The Shieldcare
Limited Directors Plan
constituted by Deed of
Trust dated 14 June 1994
and (2) Shieldcare dated
19 February and 3 March
and registered in the
Books of Council and
Session on 25 March all
1998.
- ---------------------- ---------------------------- --------------- ----------------------- ---------------- ----------------
- ---------------------- ---------------------------- --------------- ----------------------- ---------------- ----------------
80 Whitecraigs Road, (1) Gordon Riddell and 13/8/96 - L10,800 per annum None Business of
Glenrothes Effie Macrae Riddell as 12/8/2006. exclusive of Value Shieldcare.
Managing Trustees and Added Tax which is
Britannia Life Trustees payable in addition.
Limited as Pensioner 13/8/2001.
Trustee of The Shieldcare
Limited Directors Plan
constituted by Deed of
Trust dated 14 June 1994
and (2) Shieldcare dated
1 November and 26 November
1996 and registered in
the Books of Council and
Session on 9 January 1997.
- ---------------------- ---------------------------- --------------- ----------------------- ---------------- ----------------
- ---------------------- ---------------------------- --------------- ----------------------- ---------------- ----------------
</TABLE>
23
<PAGE>
SCHEDULE 4
COMPLETION FORMALITIES
1. ITEMS TO BE DELIVERED BY VENDORS
At Completion the Vendors shall deliver or procure to be delivered to the
Purchaser or the Purchaser's Solicitors:-
1.1 this Agreement duly executed by the Vendors;
1.2 the Tax Covenant duly executed by the First Vendor;
1.3 the Disclosure Letter;
1.4 duly executed transfers into the name of the Purchaser or its
nominee in respect of the number of Shares shown opposite his or
her name in column (3) of Schedule 1;
1.5 share certificates or indemnities for lost share certificates in
respect of the Shares;
1.6 any other documents which may be necessary to give good legal and
beneficial title to the Shares (including any power of attorney
under which any document required to be delivered under this
Paragraph 1 has been executed or signed);
1.7 the certificates of incorporation, certificate of incorporation on
change of name, the common seals (if applicable), all minute
books, share registers and share certificate books (with any
unissued share certificates) and other statutory books, cheque
books and other books and records of Shieldcare and copies of the
Memorandum and Articles of Association of Shieldcare;
1.8 all deeds and documents relating to the Properties as exhibited to
the Purchaser's Scottish Solicitors prior to the date of this
Agreement;
1.9 THIS PARAGRAPH NOT USED;
1.10 a letter signed on behalf of Shieldcare to its bankers varying in
such manner as the Purchaser may specify all existing bank
mandates and authorities; and
1.11 executed powers of attorney in favour of the Purchaser or its
nominee(s) generally in respect of all the Shares and which
enables the Purchaser or its nominee(s) to attend and vote at
general meetings of Shieldcare;
1.12 Deeds of release from the Vendors (and persons connected with
them) releasing Shieldcare from all liabilities owed to them
(other than any unpaid salary);
1.13 notices of resignation of Messrs. Carters as auditors of
Shieldcare (which have been deposited at its registered office in
accordance with Section 392 of the Act
24
<PAGE>
containing the statement required under Section 394 of the Act);
1.14 the Service Agreement in the agreed form duly executed by
Shieldcare and the First Vendor;
1.15 certificates as to the balance or balances on the banking accounts
of Shieldcare at the close of business on the two Business Days
immediately prior to Completion, together in each case, if the
position is different at Completion, with a reconciliation
statement to show the position at Completion (listing unpresented
cheques drawn or received by Shieldcare and standing orders
payable since the date of such bank statements);
1.16 at the Properties, all motor vehicles owned by Shieldcare but in
the possession of an officer or employee of Shieldcare resigning
on Completion together with the keys and any registration
documents or certificates of insurance in respect thereof;
1.17 the Escrow Mandates duly executed by the First Vendor and the
Second Vendor respectively; and
1.18 a copy of the board minutes referred to in Paragraph 2.
2. MATTERS TO BE PROCURED BY VENDORS
2.1 At Completion the Vendors shall procure the passing of resolutions
of the directors of Shieldcare under which the following business
is transacted:-
2.1.1 the directors of Shieldcare shall approve for registration
the transfers of the Shares to the Purchaser or its
nominees (subject only to their being duly stamped);
2.1.2 the directors of Shieldcare shall approve and authorise the
signing of new bank mandates for all bank accounts of
Shieldcare in the agreed form;
2.1.3 the directors of Shieldcare (other than the First Vendor
and Iain McDonald) shall resign and the Board of directors
of Shieldcare shall be reconstituted in such manner as the
Purchaser may require and any director who accordingly
resigns shall execute a waiver in the agreed form of any
claims whatsoever which he may have against Shieldcare;
2.1.4 the secretary of Shieldcare shall resign and execute a
waiver in the agreed form of any claims whatsoever which he
may have against Shieldcare and Michael Beeby shall be
appointed in his place;
2.1.5 there shall be tabled a letter from Messrs. Carters
offering to resign as auditors of Shieldcare (containing
the statements which would be required
25
<PAGE>
under Section 394 of the Act if such resignation were to be
accepted);
2.1.6 the situation of the registered office of Shieldcare shall
be changed to an address in Scotland nominated by the
Purchaser;
2.1.7 the First Vendor shall enter into the Service Agreement
with Shieldcare in the agreed form;
2.1.8 a release duly executed in a form satisfactory to the
Purchaser, releasing Shieldcare from any liability
whatsoever (actual or contingent) which may be owing to the
Vendors or any person connected with them (as defined in
section 839 Income and Corporation Taxes Act 1988) by
Shieldcare.
2.2 The First Vendor undertakes to the Purchaser as follows in
relation to the following Properties:-
79 and 80 Whitecraigs Road, Glenrothes
- --------------------------------------
2.2.1 To procure that the works carried out pursuant to building
warrants 97/1144 and 98/0706 and planning permissions
98/0096 and 99/0557 are completed in accordance with their
terms and to deliver certificates of completion (or copies)
relative to the said building warrants to the Purchaser no
later than three months after the date of this Agreement;
2.2.2 To procure the consent of the feudal superior to the works
carried out pursuant to the said building warrants and
planning permissions as said consent is required pursuant
to Feu Disposition by Glenrothes Development Corporation in
favour of Par Graphics Ltd recorded GRS (Fife) 27 November
1990;
84-86 and 92 Westlaw Place, Glenrothes
- --------------------------------------
2.2.3 To procure the consent of the landlords to the alterations
and others as more fully described in letter by the First
Vendor's Solicitors to Graham & Sibbald dated 2 March 2000
and to deliver said consent (or a copy) to the Purchaser no
later than two months from the date of this Agreement and
that in terms satisfactory to the Purchaser (the Purchaser
being bound to act reasonably);
2.2.4 To procure from Fife Council a qualified statement pursuant
to the application made on behalf of Shieldcare by Dryburgh
Associates, dated 16 February 2000, and to deliver said
qualified statement (or a copy) to the Purchaser within
three months from the date of this Agreement;
2.2.5 To procure that a legally binding contract of lease is put
in place between Shieldcare Ltd and the landlords (which
expression includes successors from time to time) of the
premises at 92 Westlaw Place, in terms satisfactory to
26
<PAGE>
Shieldcare (acting reasonably but having regard to the text
of the draft Minute of Variation revised by Dundas & Wilson
on behalf of the Purchaser in February 2000).
This undertaking 2.2.5 is given on the understanding that
Shieldcare Ltd will continue negotiations with the
landlords in good faith and will behave reasonably at all
times with regard the terms of the formal letting
documentation by virtue of which the contract of the lease
is to be put in force.
2.3 Subject to the declaration aftermentioned, in respect of the
foregoing undertakings in Clause 2.2, the Purchaser agrees that
Shieldcare will meet any and all costs, expenses and other
payments incurred thereby (including any grassum), up to an
aggregate amount of L5,000 (exclusive of VAT) and the First
Vendor shall be responsible for the amount (if any) by which such
costs, expenses and other payments exceeds the said limit of
L5,000 (exclusive of VAT), declaring that, in respect of
Clause 2.2.5, Shieldcare will be responsible only for the
reasonable legal and surveying and other professional fees of
itself and the landlords and the stamp duty and Registers of
Scotland fees and other usual outlays payable in respect of the
said contract of lease. For the avoidance of doubt, the said limit
of L5,000 (exclusive of VAT) applies only to such costs,
expenses and other payments incurred after the date of this
Agreement, Shieldcare being responsible for all such costs,
expenses and other payments incurred on or prior to the date of
this Agreement.
3. ITEMS TO BE DELIVERED BY THE PURCHASER
At Completion the Purchaser shall deliver or procure to be delivered to
the Vendors or to the Vendors' Solicitors whose receipt shall be an
absolute discharge of the Purchaser and shall be binding upon and
conclusive against each of the Vendors' Solicitors:-
3.1 the sum of L5,266,000 by telegraphic transfer being the
Initial Consideration;
3.2 telegraphic transfers payable to the Escrow Accounts
of L1,000,000, being the Escrow Amount;
3.3 the counterpart of the Tax Covenant duly executed by the
Purchaser;
3.4 a copy of the Disclosure Letter acknowledged as having been
received by the Purchaser's Solicitors;
3.5 the Escrow Mandates duly executed by the Purchaser; and
3.6 two stock option agreements for 20,000 shares each in Metron
Technology N.V in favour of the First Vendor and Iain McDonald
together with copies of the Metron Technology N.V. Employee Stock
Option Plan.
27
<PAGE>
SCHEDULE 5
THE WARRANTIES
PART I - GENERAL WARRANTIES
1. DISCLOSURE OF MATERIAL FACTS
1.1 General
There are fully and accurately disclosed in the Disclosure
Letter all matters information and documents which are or
could on reasonable enquiry be known to the First Vendor
and:-
1.1.1 which are necessary to qualify the statements set
out in the following paragraphs of this Schedule
in order for such statements when so qualified to
be fair, accurate and not misleading;
1.1.2 which might materially or adversely affect the
present or, so far as the First Vendor is aware,
future value of the Shares;
1.1.3 which the First Vendor has reason to believe might
otherwise reasonably affect the willingness of the
Purchaser to purchase the Shares or to purchase
them for the consideration and upon the terms set
out in this Agreement.
1.2 Recitals and Schedules
The Recitals and Schedules 1 and 2 to this Agreement are
true and accurate in all material respects.
2. ACCOUNTS
2.1 General
The Accounts:-
2.1.1 give a true and fair view of the assets and
liabilities and state of affairs of Shieldcare as
at the Accounts Date and its profits for the
financial period ended on the Accounts Date;
2.1.2 have been prepared and audited in accordance with
generally accepted accounting practice including
all applicable SSAPs and FRSs and generally
accepted accounting standards and principles and
no changes in the bases or policies of accounting
have been made by Shieldcare for the three
financial periods preceding the Accounts Date;
2.1.3 comply with the requirements of the Act and any
other relevant statutes;
28
<PAGE>
2.1.4 have not been (and neither have the results shown
by the audited profit and loss accounts of
Shieldcare for preceding two financial years)
affected by any extraordinary, exceptional or
non-recurring item.
2.2 Provision for Liabilities etc.
The Accounts make full provision or reserve for or disclose
all depreciation, liabilities and capital commitments of
Shieldcare (whether actual, contingent, deferred, disputed,
unquantified or otherwise and whether or not Shieldcare has
a right of reimbursement from any third party) outstanding
at the Accounts Date (including any deferred Taxation) and
make adequate provision or reserve for all bad or doubtful
debts as at the Accounts Date.
2.3 Profits
The profits shown in the audited profit and loss accounts of
Shieldcare for each of the three financial years ended on
the Accounts Date have not (except as therein disclosed) to
a material extent been affected by any extraordinary or
exceptional item or by any other factor rendering such
profits for all or any of such years unusually high or low.
2.4 Asset Valuations
No amount included in the Accounts in respect of any asset,
whether fixed or current, exceeds its purchase price or
production cost (within the meaning of the Act, Schedule 4)
or (in the case of current assets) its net realisable value
on the Accounts Date and there has been no revaluation of
any fixed assets since their acquisition.
2.5 Stock
2.5.1 The basis of valuing raw materials,
work-in-progress, finished parts and Inventory
included in the Accounts is in accordance with the
relevant SSAPs and the same as that adopted in the
three immediately preceding accounting periods.
2.5.2 Obsolete items of finished parts,
work-in-progress, raw materials and Inventory have
been wholly written off and any of such items
which are slow moving have been written off to the
extent that such items represent in excess of one
year's usage and the value attributed to the
remaining items of raw materials,
work-in-progress, finished parts and Inventory
included in the financial and other material
records provided by, or on behalf of, the First
Vendor does not exceed the lower of cost and net
realisable value.
29
<PAGE>
2.6 Management Accounts
A true copy of the Management Accounts of Shieldcare for the
period ended on 31 December 1999 is annexed to the
Disclosure Letter and the Management Accounts have been
prepared in accordance with Shieldcare's normal practice on
a basis consistent with the Accounts and in accordance with
practices and principles generally accepted in the United
Kingdom and the First Vendor does not consider them
misleading and are not aware of any fact or circumstance
which might render them misleading.
2.7 Accounting Reference Date
Shieldcare has notified to the Registrar of Companies 31st
May as being its accounting reference date pursuant to the
Companies Act 1985 and has not at any time notified the
Registrar of Companies of any other date.
3. FINANCE
3.1 Debts
3.1.1 Any book and other debts which may be outstanding
at Completion will save insofar as a provision has
been made therefor in the Accounts, the Management
Accounts or the Disclosure Letter, be good and
collectable in the ordinary course of business; no
debt has been factored and no debtor has been
released by Shieldcare on terms that he pays less
than the book value of his debt and no debt owing
to Shieldcare has been deferred, subordinated or
written off or has proved irrecoverable.
3.1.2 There are no circumstances which indicate that any
of the debts owing to Shieldcare at the date
hereof and which were not fully written off or
fully provided against in the Accounts may prove
to be irrecoverable to any extent.
3.1.3 No single debtor owes to Shieldcare an amount or
amounts in aggregate greater than 5% of the total
of all debts owing to Shieldcare.
3.1.4 No debtor is entitled to credit terms in excess of
30 days from date of invoice.
3.1.5 The carrying value of trade debtors is consistent
with that in the three immediately preceding
accounting periods. Bad or doubtful debts as at
the Management Accounts Date have been wholly
provided for or written off in full in the
Management Accounts.
3.2 Off Balance Sheet Financing
Shieldcare has not engaged in any financing (including
without prejudice to the generality of the foregoing the
incurring of any borrowing or any indebtedness in the
30
<PAGE>
nature of borrowing including without limitation liabilities
in the nature of acceptances or acceptance credits) of a
type which would not be required to be shown or reflected in
the Accounts.
3.3 Borrowings and Guarantees
3.3.1 Bank Account
A statement of all the bank accounts of Shieldcare
and of the credit or debit balances on such
accounts as at 24 February 2000 is annexed to the
Disclosure Letter. Shieldcare has no other bank or
deposit accounts (whether in credit or overdrawn)
and since that statement there have been no
payments out of any such accounts except for
routine payments and the balances on current
account are not now substantially different from
the balance shown on such statements.
3.3.2 Other Indebtedness
Details of all borrowings or other indebtedness
owed by Shieldcare to third parties (other than in
respect of normal trade credit and debit balances
on bank accounts) in excess of L25,000 are
listed in the Disclosure Letter.
3.3.3 Repayment
Shieldcare has received no notice to repay under
any agreement relating to any borrowing or
indebtedness in the nature of borrowing on the
part of Shieldcare which is repayable on demand
and there has not occurred any event of default
under any agreement relating to any other
borrowing or indebtedness in the nature of
borrowing on the part of Shieldcare or any event
which with the giving of notice and/or the lapse
of time and/or the relevant termination would
constitute such an event of default.
3.3.4 Third Party Obligations
Shieldcare is not a party to and is not liable
(including, without limitation, contingently or
otherwise) under a guarantee, indemnity or other
agreement or arrangement to secure or incur a
financial or other obligation with respect to
another person's obligations.
3.3.5 Third Party Guarantees
No part of the loan capital, borrowing or
indebtedness in the nature of borrowing of
Shieldcare is dependent on the guarantee or
indemnity of, or security provided by, another
person.
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4. BUSINESS SINCE ACCOUNTS DATE
4.1 Borrowings and Trading
Since the Accounts Date:-
4.1.1 Shieldcare has carried on business in the ordinary
and usual course so as to maintain it as a going
concern without entering into any transaction
assuming any liability or making any payment which
(whether taken singly or in conjunction with
subsequent transactions) is not in the ordinary
course of its business and without any
interruption or alteration in the nature, scope or
manner of conducting its business and the assets
and liabilities of Shieldcare are substantially as
set out in the Accounts;
4.1.2 Shieldcare has not borrowed or lent any money or
taken any financial facility;
4.1.3 Shieldcare has paid its creditors within the time
agreed with such creditors and there are no debts
outstanding by Shieldcare which have been due for
more than 4 weeks;
4.1.4 Shieldcare has not entered into or agreed to enter
into any capital commitments;
4.1.5 no share or loan capital has been issued or agreed
to be issued by Shieldcare;
4.1.6 no capital expenditure has been incurred and no
commitments of a capital nature have been entered
into;
4.1.7 the Business has not been materially adversely
affected by the loss (whether before or after the
Accounts Date) of any customers or sources of
supply and (so far as the First Vendor is aware)
there are no circumstances which are likely to
give rise to any such effect; and
4.1.8 no provision or reserve included in the Accounts
has proved to be inadequate in the light of
subsequent circumstances and so far as the First
Vendor is aware, there are no circumstances which
indicate that any such provision or reserve may
prove to be inadequate;
4.1.9 details of all creditors to whom greater
than L25,000 is owed by Shieldcare are listed
in the Disclosure Letter; and
4.1.10 no accounting period for the purposes of Taxation
has ended;
4.1.11 such books and records as would be reasonably
necessary to compute the reliefs on Taxation that
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may fall due to Shieldcare on the disposal of any
of its assets have been retained;
4.1.12 no commissions, incentives, bonuses, profit
shares, share options or other payments in cash or
in kind under any similar scheme have been made to
any directors, employees , consultants or
independent contractors of Shieldcare; and
4.1.13 no debts or liabilities of Shieldcare against
which a deduction on Taxation has previously been
claimed have been released or otherwise
discharged.
4.2 Distributions
Since the Accounts Date no dividend has been declared or
paid out and no distribution of capital within the meaning
of Sections 209 or 210 of the Taxes Act has been made or
agreed to be made in respect of any share capital of
Shieldcare and no management charge has been or is to be
levied against Shieldcare and no loan (otherwise than in the
ordinary course of day to day business) or loan capital has
been repaid in whole or part and no payment for group relief
has been made by Shieldcare.
4.3 Material adverse changes
Since the Accounts Date there has been no material adverse
change in the working capital position or cashflow of
Shieldcare or in the financial or trading position or
prospects of Shieldcare or the Business or of any material
part thereof.
5. ASSETS
5.1 Title
All of the assets included in the Accounts (including all
book debts owed to Shieldcare) and all of the assets
acquired by Shieldcare since the Accounts Date and all other
assets used or employed by Shieldcare are legally and
beneficially owned by Shieldcare and are free from any
Encumbrance save for the assets disclosed in the Disclosure
Letter as being held under a leasing, hire or hire purchase
agreement or agreement for payment on deferred terms or
conditional sale agreement or rental agreement and there are
annexed to the Disclosure Letter copies of any such
agreements.
5.2 Necessary assets
The assets owned by Shieldcare, together with the assets
disclosed in the Disclosure Letter as being held under a
leasing, hire or hire purchase agreement for payment on
deferred terms or conditional sale agreement or rental
agreement comprise all the assets necessary to enable
Shieldcare to carry on the Business fully and effectively in
the ordinary course as carried on up to the Completion
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Date and no such assets are unused or used wholly or partly
for any purpose other than the Business.
5.3 Plant and Machinery, etc.
5.3.1 All the plant, machinery, equipment and vehicles
of Shieldcare are in a good state of repair and
working order and have been regularly and properly
maintained and, where appropriate, are and will on
Completion be adequately licensed and insured and
so far as the First Vendor is aware, none is
dangerous, inefficient, out-of-date, unsuitable or
in need of renewal or replacement (reasonable wear
and tear excepted);
5.3.2 The records of plant and machinery of Shieldcare
comprise a complete and accurate record of all
plant, machinery, equipment or vehicles owned or
possessed by it and there are no outstanding
commitments for capital expenditure other than
replacements and normal purchases of plant and
equipment in the ordinary course of business.
5.3.3 Shieldcare owns or has a valid licence to use each
asset necessary for the effective operation of the
Business.
5.4 Inventory
5.4.1 Shieldcare's stock-in-trade and Inventory is in
good condition and so far as the First Vendor is
aware, there have been no abnormal losses in the
stock of Shieldcare through theft, breakages,
damage or otherwise and all such stock has been
stored in suitable conditions for stock of its
kind and not left outside or exposed to the
weather and Shieldcare's stock-in-trade and
Inventory is adequate in relation to the current
trading requirements of the Business and is
capable of being sold by Shieldcare in the
ordinary course of Business in accordance with its
current price list without rebate or allowance to
a purchaser.
5.4.2 The quantities of raw materials, work-in-progress,
finished parts and Inventory will be no less at
Completion than at the Accounts Date and will be
sufficient to meet the requirements of the
Business at the Completion Date. All categories of
stock have been subject to physical count and
comparison to stock records within 2 months of
Completion.
5.5 Title Retention
Shieldcare has not acquired or agreed to acquire any
material asset on terms that property therein does not pass
until full payment is made.
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5.6 Maintenance Contracts
There are maintenance contracts with independent specialist
contractors in respect of all assets of Shieldcare for which
it is normal or prudent to have maintenance agreements and
in respect of all assets which Shieldcare is obliged to
maintain or repair under a lease or similar agreement.
6. INTELLECTUAL PROPERTY RIGHTS
6.1 At Completion Shieldcare will be the legal and beneficial
owner and, if applicable, will be the registered proprietor
of all the Intellectual Property Rights respectively now or
hitherto owned or used by it free from Encumbrances; and:-
6.1.1 the same and each of them is valid and enforceable
and not subject to revocation and there has not
been any default (or any event which with notice
or lapse of time or both would constitute default)
under any of them by Shieldcare;
6.1.2 no registered user rights or licences have been
granted in respect of any of them and no person
has been authorised to make any use whatsoever of
any of them and no other act has been done or
omission permitted whereby they or any of them
might cease to be valid and enforceable as
aforesaid;
6.1.3 Shieldcare does not pay any royalty or other
payment to any third party or so far as the First
Vendor is aware, require the permission of any
third party in relation to the sale of any product
or the use of any process or the provision of any
service;
6.1.4 Shieldcare has not disclosed (except in the
ordinary course of Business) any of its know-how,
trade secrets, Confidential Information or lists
of customers or suppliers to any other person; and
6.1.5 so far as the First Vendor is aware, Shieldcare
does not require any Intellectual Property Rights
of any other person in order to manufacture or
sell its products or provide its services or to
use the processes employed in the Business as
carried on at the Completion Date, and so far as
the First Vendor is aware, none of the activities
of Shieldcare infringes any patent or other
Intellectual Property Rights of any kind
whatsoever of any other person or gives rise to an
obligation to pay any sum in the nature of a
royalty.
6.2 Shieldcare does not carry on business or sell any product
under any name other than its corporate name, and so far as
the First Vendor is aware, there are no circumstances under
which Shieldcare may be prevented from carrying on
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the Business and/or selling its present products under its
corporate name or present product names.
6.3 The Disclosure Letter contains details of the registered
Intellectual Property Rights (including, without limitation,
applications for registration) in respect of which
Shieldcare is the registered owner or applicant for
registration. All renewal fees payable in respect of the
registered Intellectual Property Rights have been paid.
6.4 No civil, criminal, arbitration, administrative or other
proceeding or dispute in any jurisdiction concerning any of
the Intellectual Property Rights owned or used by Shieldcare
have been notified to Shieldcare. No civil, criminal,
arbitration, administrative or other proceeding concerning
any of the Intellectual Property Rights owned or used by
Shieldcare is, so far as the First Vendor is aware having
made no enquiry other than of the employees of Shieldcare,
pending or threatened. To the best of the First Vendor's
knowledge, information and belief, no matter exists which
might give rise to a proceeding of that type.
7. INFORMATION TECHNOLOGY
7.1 Computers
All the computers and computer systems owned by Shieldcare
or used by Shieldcare (including software, peripherals,
communication links and storage media):-
7.1.1 are in operating order and are fulfilling the
purposes for which they were acquired or
established in an efficient manner without
material downtime or errors;
7.1.2 have reasonably adequate security, back-ups,
duplication, hardware and software support and
maintenance (including emergency cover) and
trained personnel to ensure:-
7.1.2.1 that breaches of security, errors and
breakdowns are kept to a minimum; and
7.1.2.2 that no material disruption will be
caused to the business of Shieldcare or
any material part thereof in the event
of a breach of security, error or
breakdown;
7.1.3 are under the sole control of Shieldcare, are
located in premises within the United Kingdom
owned by Shieldcare, are not shared with or used
by or on behalf of or accessible by any other
person and (save for software licensed to
Shieldcare) are owned by Shieldcare.
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7.2 Third Parties
No person is in a position, by virtue of his rights in,
knowledge of or access to any of the computer systems and
databases used and operated by Shieldcare or any part of
them (including software) lawfully to prevent or impair the
proper and efficient functioning of the computer system or
databases or to demand any payment in excess of any current
licence fee or in excess of reasonable remuneration for
services rendered, or to impose any onerous condition, in
order to preserve the proper and efficient functioning of
the computer system in the future.
7.3 Data Protection
7.3.1 Shieldcare is not registered and is not required
to be registered as a data user under the Data
Protection Act 1984 and no individual has claimed,
or so far as the First Vendor is aware, will have
a right to claim, compensation from Shieldcare
under that Act.
7.4 Millennium Compliance
So far as the First Vendor is aware Shieldcare's software
has been prepared in accordance with standard industry
procedures and is Millennium Compliant and all hardware
owned or used by Shieldcare is Millennium Compliant. For the
purposes of this warranty "MILLENNIUM COMPLIANT" means the
ability to provide all of the following functions:
7.4.1 accurately process all date information whether
before, during or after 1st January, 2000,
including, without limitation, accepting date
input, providing accurate date output and
performing accurate calculations involving dates
or portions of dates;
7.4.2 function accurately, efficiently and without
interruption before, during and after 1st January,
2000 without any material change in operations, or
in any material input or output procedures;
7.4.3 accurately process date input in a way that does
not create any ambiguity as to century;
7.4.4 accurately store, retrieve and process date
information in a manner that does not create any
ambiguity as to century; and
7.4.5 accurately present all date output information in
a manner that does not create any ambiguity as to
century.
8. INSURANCES
8.1 Shieldcare has and at all material times has had valid
adequate and proper insurances in respect of its assets
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and business against all risks (including but without
limitation, product liability and loss of six months'
profits) which are normally insured against by other
companies owning or possessing similar assets or carrying on
similar businesses for the full replacement value of such
assets and in respect of the Business for such amounts as
would in the circumstances be prudent for such other
companies and Shieldcare is adequately covered against
accident and other risks normally covered by insurance.
8.2 Details of all Shieldcare's insurance policies are contained
in the Disclosure Letter.
8.3 On Completion Shieldcare will be the beneficiary under and
will have in full force and effect the policies of insurance
details of which are contained in the Disclosure Letter and
Shieldcare has not done or omitted to do or suffered
anything to be done or not to be done which has or might
render any policies of insurance taken out by it void or
voidable and, to the best of the knowledge, information and
belief of the First Vendor there are no circumstances which
would or might give rise to any claim under any of the said
policies.
8.4 Claims
No claim is outstanding under any policies of insurance of
Shieldcare and so far as the First Vendor is aware no matter
exists which is likely to give rise to a claim under any of
the said policies or which is likely to render any of the
said policies voidable by the insurers or likely to give
rise to any increase in the premiums therefor.
9. COMMERCIAL ARRANGEMENTS
9.1 Material Contracts
No contracts, transactions or commitments have been entered
into by Shieldcare which are, in the reasonable opinion of
the First Vendor, unusual, of more than one year's duration
or involve obligations of a nature or magnitude calling for
special mention.
9.2 Other Contracts
9.2.1 There is not outstanding:-
9.2.1.1 any option, right to acquire, mortgage,
charge, pledge, lien, or other
Encumbrance on the whole or any part of
the undertaking, property or assets of
Shieldcare; or any agreement or
commitment to give or create any of the
foregoing and no claim has been made to
Shieldcare by any person to be entitled
to any of the foregoing;
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9.2.1.2 any agreement which requires or may
require or confers any conditional or
unconditional right to require the issue
of any share or loan capital of
Shieldcare now or at any time in the
future or any option to subscribe for or
acquire or any agreement to put under
option any share or loan capital of
Shieldcare;
9.2.1.3 any sale or purchase option or similar
agreement or arrangement affecting any
assets owned by or used by Shieldcare or
by which Shieldcare is bound;
9.2.1.4 any agreement or arrangement where
Shieldcare is a party to any joint
venture, consortium or any partnership
or profit sharing arrangement or
agreement;
9.2.1.5 any liability statutory or otherwise
whatsoever on the part of Shieldcare to
any person who is or has been a director
or employee;
9.2.1.6 any contract for hire or rent,
hire-purchase or purchase by way of
credit sale or periodical payment in
respect of movable or personal property;
9.2.1.7 any guarantee or contract for indemnity
or for suretyship whether entered into
by Shieldcare in respect of the
obligations of others or by others in
respect of the obligations of
Shieldcare;
9.2.1.8 any contract for agency or for
distributorship or management agreement;
9.2.1.9 any agreement, contract or arrangement
entered into by Shieldcare otherwise
than in the ordinary and usual course of
the Business and by way of bargain at
arm's length;
9.2.1.10 any agreement or arrangement restricting
Shieldcare's freedom to operate the
whole or part of the Business or to use
or exploit any of its assets in any
jurisdiction as it decides;
9.2.1.11 any agreement, arrangement or obligation
which so far as the First Vendor is
aware, Shieldcare cannot comply with on
time or without undue or unusual
expenditure of money or effort;
9.2.1.12 any purchase contract including, without
limitation, any forward purchase
contract for the supply of raw materials
which is onerous
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or which is unusual in the nature of the
type of contract itself or the Business.
9.2.2 So far as the First Vendor is aware, no party with
whom Shieldcare has entered into any agreement or
arrangement is in default thereunder and so far as
the First Vendor is aware there are no
circumstances likely to give rise to such a
default.
9.2.3 Shieldcare is not in default under any agreement
or arrangement to which it is a party and there
are no circumstances likely to give rise to any
such default.
9.3 Powers of Attorney
There are not outstanding any powers of attorney given by
Shieldcare except in any debenture of Shieldcare or any
other authority (express implied or ostensible) which is
still outstanding or effective to any person to enter into
any contract or commitment or do anything on its behalf.
9.4 Substantial Customers and Suppliers
9.4.1 There is not outstanding any agreement or
arrangement between Shieldcare and a major (that
is to say representing more than five per cent of
the turnover of Shieldcare) distributor, supplier
or customer of Shieldcare.
9.4.2
9.4.3 During the year ending on the date of this
Agreement no substantial customer or supplier of
Shieldcare (that is to say representing more than
five per cent of the turnover of Shieldcare) has:-
9.4.3.1 stopped, or indicated an intention to
stop, trading with or supplying
Shieldcare;
9.4.3.2 reduced, or indicated an intention to
reduce, substantially its trading with
or supplies to Shieldcare; or
9.4.3.3 changed, or indicated an intention to
change, substantially the terms on which
it is prepared to trade with or supply
Shieldcare (other than normal price and
quota changes)
and so far as the First Vendor is aware none is
likely to do so.
9.5 Grants etc.
9.5.1 Shieldcare is not liable to repay an investment or
other grant or subsidy made to it by a body
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(including, without limitation, the Department of
Trade and Industry or its predecessor).
9.5.2 No matter (including, without limitation, the
execution and performance of this Agreement)
exists which might entitle a body to require
repayment of, or refuse an application by
Shieldcare for, the whole or part of a grant or
subsidy.
9.6 Commissions etc.
No person is entitled to receive from Shieldcare a finder's
fee, brokerage or commission in connection with this
Agreement or anything contained in it.
10. ARRANGEMENTS WITH CONNECTED PERSONS
10.1 There is not outstanding:-
10.1.1 any loan made by Shieldcare to, or debt owing to
Shieldcare by either of the Vendors or any
directors of any Company or any person connected
with any of them as described in Section 839 of
the Taxes Act;
10.1.2 any agreement or arrangement to which Shieldcare
is a party and in which either of the Vendors or
any director of Shieldcare or any persons
connected with any of them as described in Section
839 of the Taxes Act is interested;
10.1.3 any agreement or arrangements between Shieldcare
and any company of which it is a subsidiary or
another subsidiary of any such company (including
but not limited to any such agreement or
arrangements under which Shieldcare is or may in
future become liable to pay any service,
management or similar charge or to make any
payment of interest or in the nature of interest).
11. LITIGATION AND COMPLIANCE
11.1 General
11.1.1 Neither Shieldcare nor any person for whose acts
Shieldcare may be vicariously liable is engaged in
litigation or arbitration or administrative
proceedings which are in progress or are
threatened or pending by or against or concerning
Shieldcare or a person for whom Shieldcare may be
vicariously liable or any of its assets and the
First Vendor is not aware of any facts which are
likely to give rise to litigation or arbitration
or administrative proceedings in which Shieldcare
might become involved.
11.1.2 So far as the First Vendor is aware, neither
Shieldcare nor any of its officers or employees by
any act or default have committed:-
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11.1.2.1 any criminal or unlawful act in
connection with the Business other than
minor road traffic offences;
11.1.2.2 any breach of trust in relation to the
business or affairs of Shieldcare;
11.1.2.3 any breach of contract or statutory duty
or any delictual act which could entitle
any third party to terminate any
contract to which Shieldcare is party or
could lead to a claim against Shieldcare
for damages or an injunction.
11.2 Conduct of Business
So far as the First Vendor is aware Shieldcare has conducted
Business in all material respects in accordance with all
applicable laws, regulations and codes of conduct (whether
statutory or otherwise) of the United Kingdom and any
relevant foreign country and no governmental or official
investigation or enquiry concerning Shieldcare is in
progress or threatened and so far as the First Vendor is
aware there are no circumstances which are likely to give
rise to any such investigation or enquiry.
11.3 General
All licences, permissions and consents required for the
carrying on of the Business have been obtained and are in
full force and effect and the First Vendor is not aware of
any circumstances indicating that any of those licences,
permissions or consents are likely to be revoked or not
renewed in the ordinary course.
12. COMPETITION LAW
12.1 No agreement, practice or arrangement carried on by
Shieldcare or to which Shieldcare is or has in the six years
prior to the date of this Agreement been a party:
12.1.1 is or ought to be or ought to have been registered
in accordance with the provisions of the
Restrictive Trade Practices Acts 1976 and 1977 or
contravenes the provisions of the Competition Act
1998 or any previous legislation relating to
anti-competitive agreements or practices or is or
has been the subject of any enquiry, complaint,
investigation or proceeding under any of the same;
or
12.1.2 is or has been the subject of an enquiry,
complaint, investigation, reference or report
under the Competition Act 1998 or the Fair Trading
Act 1973 or any previous legislation relating to
monopolies or mergers anti-competitive agreements
or practices; or
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12.1.3 infringes Article 81 of the Treaty of Rome
establishing the European Economic Community or
constitutes an abuse of dominant position contrary
to Article 82 of the said Treaty or infringes any
regulation or other enactment made under the said
Treaty or is or has been the subject of any
enquiry, complaint, investigation or proceeding in
respect thereof; or
12.1.4 has been notified to the UK Office of Fair Trading
or the Directorate General of Competition of the
Commission of the European Communities and/or to
the EFTA Surveillance Authority; or
12.1.5 infringes any other competition, restrictive trade
practice, anti-trust, fair trading or consumer
protection law or legislation applicable in any
jurisdiction in which Shieldcare has assets or
carries on business or in which the activities of
Shieldcare may have an effect.
12.2 Shieldcare has not given any assurance or undertaking to the
Restrictive Practices Court or the Director General of Fair
Trading or the Secretary of State for Trade and Industry,
the European Commission, the EFTA Surveillance Authority or
the Court of Justice of the European Communities or to any
other court, person or body and is not subject to or in
default or contravention of any Article, Act, decision,
regulation, order or other instrument or undertaking
relating to any matter referred to in paragraph 12.1 above.
13. SUBSIDIARIES AND ASSOCIATES
Shieldcare does not have and never has had any subsidiaries or
subsidiary undertakings and has never been a subsidiary or subsidiary
undertaking of any other company nor does Shieldcare own any shares or
stock in the capital of or have any beneficial interest in any other
company or business organisation nor does Shieldcare control or take
part in the management of any other company or business organisation
nor is Shieldcare (nor has it ever been) a member of any partnership
or unincorporated company or association.
14. CORPORATE ORGANISATION
14.1 Share Capital
Schedule 2 contains true particulars of the authorised and
issued share capital of Shieldcare and all shares shown
there have been properly issued and allotted and are in
issue fully paid and are beneficially owned and registered
as set out therein free from any Encumbrance.
14.2 Options etc.
No person has the right (whether exercisable now or in the
future and whether contingent or not) to call for the
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allotment, issue, sale, redemption or transfer of any share
or loan capital of Shieldcare under any option or other
agreement (including conversion rights and rights of
pre-emption).
14.3 Memorandum and Articles
The copy of the Memorandum and Articles of Association of
Shieldcare annexed to the Disclosure Letter is true accurate
and complete and has embodied thereon or annexed thereto a
copy of every such resolution or agreement as is referred to
in Section 380 of the Act and neither Shieldcare nor any
class of its members has passed any resolution (other than
resolutions relating to business at annual general meetings
which was not special business). Shieldcare is operating and
has always operated the Business in all respects in
accordance with its Memorandum and Articles of association
at the relevant time.
14.4 Company's Accounts and Records
14.4.1 All accounts, books, ledgers, financial and other
records of whatsoever kind, including for the
avoidance of doubt, the fixed assets register of
Shieldcare:-
14.4.1.1 have been fully properly and accurately
maintained and are up to date, are in
the possession of Shieldcare and contain
true and accurate records of all matters
required by law to be entered therein;
14.4.1.2 do not contain or reflect any material
inaccuracies or discrepancies.
14.4.2 No notice or allegation that any of the said
records is incorrect or should be rectified has
been received by Shieldcare.
14.4.3 Where any of the said records are kept on
computer, Shieldcare is owner of all hardware and
all software licences necessary to enable it to
use the records as they have been used in the
Business hitherto and Shieldcare does not share
any hardware or software relating to any of its
records with any person.
14.4.4 Without prejudice to the generality of the
foregoing, the said records will fully reflect and
provide full and sufficient details of:-
14.4.4.1 all entitlements of customers of
Shieldcare to any special terms,
discounts, rebates, allowances and the
like in respect of or by reference to
the terms on which goods or services
have been supplied by Shieldcare to such
customers prior to Completion;
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14.4.4.2 the names and addresses of all customers
and suppliers of Shieldcare and all
dealings between Shieldcare and such
persons; and
14.4.4.3 all assets held by Shieldcare as at
Completion.
14.4.5 None of the records, systems, data or information
of Shieldcare is recorded, stored, maintained,
operated or otherwise wholly or partly dependent
on or held or accessible by any means (including,
without limitation, an electronic, mechanical or
photographic process computerised or not) which
are not under the exclusive ownership and direct
control of Shieldcare or validly licensed to
Shieldcare.
14.5 General
14.5.1 Shieldcare:-
14.5.1.1 does not have any branch or place of
business outside Scotland or any
permanent establishment outside the
United Kingdom;
14.5.1.2 has the right, power and authority to
conduct the Business as conducted at the
date of this Agreement; and
14.5.1.3 has the power to carry on the Business
and the Business has at all times been
carried on intra vires by Shieldcare.
14.6 Returns
All returns, particulars, resolutions and other documents
required under the Act or any other applicable legislation
to be delivered on behalf of Shieldcare to the Registrar of
Companies or to any other authority whatsoever have been
properly made and delivered.
14.7 Rectification
No member, former member or other person has made or given
notice of their intention to make an application for
rectification of the register of members of Shieldcare and
so far as Shieldcare is aware no application is pending or
threatened.
15. INSOLVENCY
15.1 Winding-Up Petition etc.
No order has been made or petition presented or resolution
passed for the winding-up or administration of Shieldcare
nor has any distress, execution or other process been levied
against Shieldcare or action taken to repossess goods in
Shieldcare's possession and Shieldcare has not stopped any
payment and neither Shieldcare nor either of
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the Vendors is insolvent (or will become insolvent as a
result of completion of the sale of the Shares) or unable to
pay its debts for the purposes of the Insolvency Act 1986.
15.2 Receivership etc.
No receiver, administrative receiver or administrator has
been appointed of the whole or any part of the assets or
undertaking of Shieldcare or of either of the Vendors and
the First Vendor is not aware of any circumstances likely to
give rise to the appointment of any such receiver,
administrative receiver or administrator.
15.3 Court Judgement
There is no unsatisfied judgement or court order outstanding
against Shieldcare.
15.4 Striking Off
No action is being taken by the registrar of companies to
strike Shieldcare off the register under Section 652A of the
Act.
16. CAPACITY AND INTERESTS OF VENDORS
16.1 The First Vendor has the requisite power and authority to
enter into and perform his obligations under this Agreement.
16.2 The execution and delivery of and the performance by the
Vendors of their respective obligations under this Agreement
will not:-
16.2.1 result in a breach of, or constitute a default
under, any agreement, instrument or arrangement to
which the First Vendor or Shieldcare is a party or
by which the First Vendor or Shieldcare is bound;
16.2.2 result in a breach of any order, judgment or
decree of any Court or governmental agency to
which either of the Vendors or Shieldcare is a
party or by which the First Vendor or Shieldcare
is bound.
16.2.3 neither the First Vendor or any person connected
with the First Vendor has any interest, direct or
indirect, in any business which competes or has
competed, or is in the future likely to compete,
with the Business or intends to acquire any such
interest.
16.2.4 the First Vendor is not entitled to any claim of
any nature against Shieldcare or any of its
officers, employees, principal customers or
suppliers and the First Vendor has not assigned to
any third party the benefit of any such claim to
which he was previously entitled.
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16.2.5 so far as the First Vendor is aware, none of the
Shares was or is, or represents assets which were
or are, the subject of a transfer at an undervalue
(within the meaning of the Insolvency Act 1986,
Section 238 or Section 339) within the last five
years, including without limitation, as a result
of any transaction contemplated by this Agreement.
17. THE AGREEMENT
17.1 Compliance with the terms of this Agreement will not and
does not:-
17.1.1 relieve any person of any obligation over
Shieldcare or enable any person to determine any
such obligation or result in the creation,
imposition, crystallisation or enforcement of any
encumbrance on any of Shieldcare's assets;
17.1.2 contravene any agreement or arrangement entered
into or binding on Shieldcare and any third party
or give any third party the right of termination
or any option;
17.1.3 result in any present or future indebtedness to
Shieldcare becoming due and payable prior to its
stated maturity.
18. EMPLOYMENT
18.1 General
18.1.1 All appropriate notices have been issued under all
statutes, regulations and codes of conduct
relevant to the relations between Shieldcare and
its employees, prospective employees or any trade
union and Shieldcare has maintained adequate and
suitable records regarding the service of its
employees.
18.1.2 Shieldcare has not entered into any collective
agreement or arrangement (whether legally binding
or not,) with a trade union, works council, staff
association or association of trade unions or
other body representing any of its employees nor
has it done any act which might be construed as
recognition of such a union or body.
18.2 Terms and Conditions
18.2.1 Full particulars are contained in the Disclosure
Letter of the terms and conditions upon which all
directors and employees of Shieldcare shall be
employed at Completion, including, without
limitation, details of all participation, profit
sharing, incentive, bonus, commission, , directors
and officers insurance, travel, car, redundancy
and other benefit schemes, arrangements and
understandings and whether legally binding upon
Shieldcare or not and of all consultancy
agreements
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with Shieldcare which are in place now or will be
in place at Completion.
18.2.2 no changes to any of the agreements referred to in
paragraph 18.2.1 above (including any increases in
emoluments) have been made or proposed since the
Accounts Date nor will any such changes be made to
the same up to Completion.
18.2.3 There is not in existence nor will there be
outstanding at Completion any contract of
employment with directors or employees of
Shieldcare (or any contract for services with any
individual) which cannot be terminated by three
months' notice or less without giving rise to a
claim for damages or compensation (other than a
statutory redundancy payment or statutory
compensation for unfair dismissal).
18.2.4 No promise has been made and Shieldcare is not
obliged to increase the emoluments payable to or
to vary the terms of service of any of its
directors, other officers and employees.
18.2.5 There are not, nor will there be at Completion,
outstanding offers of employment or consultancy
made by Shieldcare and there is no one who has
accepted an offer of employment or consultancy
made by Shieldcare but who has not yet taken up
that employment or consultancy.
18.3 Disputes and Transfers
18.3.1 Shieldcare has not been engaged or involved in any
trade dispute (as defined in Section 218 of the
Trade Union and Labour Relations (Consolidation)
Act 1992) with any employee, trade union, staff
association or any other body representing workers
and no event has occurred which could or might
give rise to any such dispute and no industrial
action involving employees of Shieldcare, official
or unofficial, is now occurring or threatened nor
have any industrial relations or employment
matters been referred either by Shieldcare or its
employees or by any trade union representing any
of its employees to ACAS for advice, conciliation
or arbitration.
18.3.2 Shieldcare has not within the period of 3 years
preceding the date hereof acquired or entered into
any agreement which involved or may involve it
acquiring any undertaking or part of one such that
the Transfer of Undertakings (Protection of
Employment) Regulations 1981 applied or may apply
thereto.
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18.4 Liabilities
18.4.1 There are no amounts owing or promised to any
present or former directors, employees or
consultants of Shieldcare other than remuneration
accrued due or for reimbursement of business
expenses and no directors, employees or
consultants of Shieldcare have given or been given
notice terminating their contracts of employment
or consultancy.
18.4.2 No liability has been incurred by Shieldcare (a)
for breach of any contract of service or for
redundancy payments (including protective awards)
or for compensation for wrongful dismissal or
unfair dismissal or for failure to comply with any
order for the reinstatement or re-engagement of
any employee or for the actual or proposed
termination or suspension of employment or
variation of any terms of employment of any
present or former employee of Shieldcare or (b) in
respect of any payment to be made or benefit to be
provided to any present or former director,
employee or consultant of Shieldcare in connection
with the sale of the Shares or (c) for the breach
of or the actual or proposed termination or
variation of any contract for services or
consultancy agreement for any present or former
consultant to Shieldcare.
18.4.3 No gratuitous payment has been made or promised by
Shieldcare in connection with the sale of the
Shares or 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 or in
connection with the proposed termination or
suspension or variation of any contract for
services or consultancy agreement.
18.4.4 There are no claims pending or threatened against
Shieldcare:-
18.4.4.1 by a present or former employee,
director, consultant or third party, in
respect of an accident or injury which
is not fully covered by insurance; or
18.4.4.2 by a present or former employee,
director or consultant in relation to
his terms and conditions of employment
or (as the case may be) consultancy.
18.5 Compliance with laws
Shieldcare has in relation to each of its employees (and so
far as relevant to each of its former employees and persons
seeking employment) complied with:-
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18.5.1 all laws and codes of conduct relevant to the
relations between it and its employees,
prospective employees or any trade union;
18.5.2 all collective agreements for the time being
dealing with the terms and conditions of service
of its employees; and
18.5.3 all relevant orders, declarations and awards made
under any relevant law or code of conduct
affecting the conditions of service of its
employees.
18.6 Redundancies
Shieldcare has not within a period of one year preceding the
date of this Agreement given notice of any redundancies to
the Secretary of State or started consultations with any
independent trade union or association of unions.
18.7 Leaving Shieldcare
No senior employee of Shieldcare or employee material to the
Business of Shieldcare has ceased to be employed by
Shieldcare (other than through death or retirement at normal
retirement age) during the twelve months prior to the date
hereof and the First Vendor has no reason to believe that
such employees intend or are likely to leave their
employment otherwise than through retirement as aforesaid
within the twelve months following Completion.
18.8 Commissions
There are no agreements, arrangements or schemes in
operation by or in relation to Shieldcare whereunder any of
its employees or officers and/or former employees or
officers and/or their relatives and dependants is entitled
to shares or a commission or remuneration of any kind
calculated by reference in whole or in part to turnover,
profits or sales.
19. PENSIONS, GRATUITIES ETC.
19.1 There is no liability whatsoever to make payment to or for
the benefit of any director or employee or ex-director or
ex-employee or the wife or widow or any other relative of
any director, ex-director, employee or ex-employee of
Shieldcare in respect of past service retirement, death or
disability by way of pension contribution, pension
retirement benefit lump sum, gratuity or otherwise.
19.2 Shieldcare has no superannuation fund, retirement benefit or
other pension schemes or arrangements.
20. PROPERTIES
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20.1 Title
20.1.1 The Properties shown in Schedule 3 comprise all of
the premises and land owned or occupied by, or
used in connection with the businesses of
Shieldcare or in respect of which Shieldcare has
interest, right or title.
20.1.2 The information set out in Schedule 3 as to the
description of the Properties and their tenure is
true and accurate in all respects.
20.1.3 Shieldcare has in its possession and control the
Extract Leases and other documents and papers
relating to the Properties listed on the agreed
draft inventory of the deeds relating to the
Properties.
20.1.4 So far as Shieldcare are aware and to the extent
not disclosed in the Leases or the heritable title
deeds for the Properties, none of the Properties
are subject to any servitudes
20.1.5 In so far as the First Vendor is aware there are
no outstanding actions or disputes between
Shieldcare and any third party affecting the
Properties or any neighbouring property.
DEVELOPMENT AT THE PROPERTIES
20.1.6 No development or other works at the Properties
has been or is being undertaken in breach of the
planning and building control legislation or any
regulations, bye-laws, orders, consents or
permissions made or given thereunder. In
particular, but without prejudice to the foregoing
generality, Shieldcare have to date complied in
full with Planning Consents 98/0096 and 99/0557
and Building Warrants BW/98/0706 (as amended) and
97/1144/AD in connection with works carried out at
the Properties known as 79 and 80 Whitecraigs
Road, Glenrothes.
20.1.7 As far as the First Vendor is aware, there is no
resolution, proposal or order, whether formally
adopted or not, for the compulsory acquisition by
any local or other authority of the whole or any
part of the Properties or any right of way or
other servitude serving the Properties nor are
there any circumstances which are likely to lead
to any such resolutions orders or proposals being
made.
20.1.8 Save as may be disclosed by the SPH Property
Search Certificates exhibited to the Purchaser in
connection with this Agreement, there is no
outstanding notice or order (statutory or
otherwise) relating to the Properties or any
business carried on at, or the use of, the
Properties.
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STATE AND CONDITION OF PROPERTIES
20.1.9 As far as the First Vendor is aware, all statutory
requirements, regulations and bye-laws relating to
the operation of the business carried on from the
Properties have been complied with in all material
respects and there are no material subsisting
breaches of any provisions or conditions contained
in or attaching to any certificates issued
pursuant to such laws.
LEASEHOLD PROPERTIES
20.2 Where the interest of Shieldcare in any of the Properties is
leasehold:
20.2.1 As far as the First Vendor is aware, in respect of
the property at 84, 85 and 86 Westlaw Place,
Glenrothes, there is no subsisting breach, nor any
non-observance of any obligation, condition or
agreement contained in the Lease on the part of
Shieldcare. No landlord has refused to accept rent
nor served any notice on the tenant in respect of
any breach or alleged breach of the Lease and the
Lease is still valid and in full force and effect;
20.2.2 no collateral assurances, undertakings or
concessions have been made by any party to the
Lease; and
20.2.3 the deeds and documents relating to the Properties
and listed in Schedule 3 comprise the entire
agreement between Shieldcare and the landlord
thereof and no variations formal or informal of
such agreement exist.
20.3 Environmental Matters
20.3.1 In this paragraph 20.3 the following definitions
are used:-
"COMPETENT AUTHORITY" means all or any competent
authority from time to time
exercising a regulatory role
under or for the purposes of any
Environmental Law, including
entirely without prejudice to or
limitation of the foregoing
generality all courts, tribunals
and other judicial or
quasi-judicial bodies, the
Scottish Environment Protection
Agency, all relevant local
authorities, and all water and
sewerage undertakers and
authorities.
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"ENVIRONMENT" means the natural and man-made
environment and all or any of
the following media namely air,
water and land, including air
within buildings and air within
other natural or man-made
structures above or below ground
and any living organisms or
ecological systems supported by
any one or more of such media.
"ENVIRONMENTAL CONDITION" means any one or more of (1) any
breach of or non-compliance of
Environment Laws or failure to
hold or comply with any
Environmental Consent, (2) the
presence of any Regulated
Substance on, in or under the
Properties, or any part thereof
and/or (3) any Migration.
"ENVIRONMENTAL CONSENT" means any permit, licence,
authorisation, consent,
registration, exemption or other
approval required by
Environmental Law in connection
with any part of the business of
the Company (including, without
limitation, in respect of any
one or more of the Properties).
"ENVIRONMENTAL LAW" means all laws, regulations,
directives, statutes,
subordinate legislation, rules
of common law and generally all
international, EU, national and
local laws and all judgements,
orders, instructions, decisions,
Guidance awards and other lawful
statements of any court tribunal
or other competent authority
applying from time to time in
respect of the Environment.
"MIGRATION" means the release, discharge,
spillage, entry, deposit,
emission, seepage, movement,
migration, flow or escape from
the Properties or any part or
parts thereof of any Regulated
Substance.
"REGULATED SUBSTANCE" means any substance, material,
liquid or other matter of
whatsoever nature which is
prescribed, controlled or in any
other way regulated by any
Environmental Law or which is
hazardous or potentially
hazardous
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to the health of human beings or
detrimental or potentially
detrimental to the Environment
or to the soundness of repair
and condition of buildings.
"WASTE" has the meaning ascribed to it
in the E.U. Directive on Waste
[75/441/EEC] as amended.
20.3.2. As far as the Vendor is aware, all Environmental Consents
have been obtained by the Company, are valid and subsisting
and in the name of the Company and all conditions attaching
to all Environmental Consents are now being complied with.
20.3.3 No notice or other communication has been received by the
Vendors or by the Company from any Competent Authority or
any third party concerning any Environmental Condition.
20.3.4 As far as the Vendor is aware, the Company has at all times
procured, and continues to procure, full compliance of all
Environmental Law affecting the keeping, treatment,
consignment and disposal of, and other dealings in, all
Waste produced, kept, treated, consigned, disposed of or
otherwise handled in connection with the business of the
Company.
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PART 2 - TAX WARRANTIES
1. GENERAL DISCLOSURE WARRANTY
Full details of every matter or circumstance which (whether of itself
or by reason of any connection with any other one or more transaction
or events) will or may give rise to any liability to Taxation for
which Shieldcare is or will or may become liable is contained in the
Disclosure Letter and there is no matter or circumstance relating to
Shieldcare concerned with Taxation which would affect a prudent
purchaser's decision to purchase the Shares which has not been so
disclosed and the following warranties are without prejudice to the
generality of the foregoing.
2. ADEQUACY OF PROVISION FOR TAXATION
The provisions for Taxation including provisions for deferred tax
included in the Accounts have been made in accordance with generally
accepted accounting principles and will be sufficient (on the basis of
the rates of tax current at the date of this Agreement) to cover all
Taxation for which Shieldcare was at the Accounts Date liable or may
after that date become or have become liable and in particular (but
without prejudice to the generality of the foregoing) will be
sufficient to cover such Taxation on or in respect of or by reference
to any profit, gains or income (including deemed profits gains or
income) withholding taxes or Schedule E taxes due on the emoluments of
directors, employees or any other persons for any period ended on or
before the Accounts Date.
3. DUE AND PUNCTUAL PAYMENT OF TAX
3.1 Shieldcare has duly and punctually paid all Taxation to the
extent that the same ought to have been paid and is under no
liability to pay any fine penalty or interest or to give any
security in connection therewith.
3.2 In particular (but without prejudice to the generality of
the foregoing):-
3.2.1 Shieldcare has made under deduction of tax all
payments to any person which ought to have been
made under deduction of tax (with particular
reference to Sections 134, 348 to 350 and 524 of
the Taxes Act) and has (if required by law to do
so) accounted to the Inland Revenue for the tax so
deducted;
3.2.2 Shieldcare has properly operated the P.A.Y.E.
system and all National Insurance Contributions
and sums payable to the Inland Revenue and the
Department of Social Security and/or the
Contributions Agency under the P.A.Y.E. system
(including ex gratia payments and compensation for
loss of office) (Section 148 of the Taxes Act)
benefits in kind (Sections 154 to 168G of the
Taxes
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Act) due and payable by Shieldcare up to the date
hereof have been paid;
3.2.3 Shieldcare has duly paid all tax shown to be due
to the Inland Revenue by all returns required to
be made under Schedule 13 to the Taxes Act
(advance corporation tax);
3.2.4 Shieldcare has correctly operated a statutory sick
pay scheme in accordance with the provisions of
the Social Security and Housing Benefits Act 1982;
3.2.5 prior to Completion all documents to which
Shieldcare is a party and all documents in the
enforcement of which Shieldcare may be interested
or to the production of which Shieldcare is
entitled which are necessary to establish the
title of Shieldcare to any asset and which attract
stamp duty in the United Kingdom or elsewhere have
been properly stamped and the appropriate stamp
duty has been paid and all duty payable in respect
of the capital of Shieldcare has been paid and
Shieldcare has duly paid any stamp duty reserve
tax for which it has at any time been liable.
3.3 No event has occurred which might give rise to a claim by
the Purchaser under the Tax Covenant.
4. COMPLETE AND UP-TO-DATE ACCOUNTS, RETURNS, CLEARANCES, ETC.
Shieldcare has and at Completion will have duly and punctually made
all returns, given all notices and accounts and supplied all other
information which ought to have been made given or supplied for the
purpose of and in respect of Taxation in the United Kingdom and
elsewhere, to the Inland Revenue, H.M. Commissioners of Customs and
Excise or to any other governmental authority (including any
governmental authority of a foreign jurisdiction) and has and at
Completion will have kept and maintained all records invoices and
other documents which ought to have been kept or maintained for such
purposes and:-
4.1 all such information, returns, accounts, notices, records,
invoices and other documents were and are and at Completion
will be up-to-date, accurate in all material respects and
made on the proper basis and are not, nor is likely to be,
the subject of any dispute with the Inland Revenue, H.M.
Commissioners of Customs and Excise or other appropriate
authorities concerned;
4.2 Shieldcare has not within the preceding seven years been the
subject of a back duty, PAYE or other audit or investigation
by the Inland Revenue or H.M. Commissioners of Customs and
Excise (or other similar authority outside the United
Kingdom);
4.3 all claims and elections, notices, clearances and consents
and dispensations and annual settlements made or obtained
from H.M. Treasury, the Inland Revenue, H.M. Commissioners
of Customs and Excise or other authority whether in the
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United Kingdom or elsewhere have been made or obtained after
full complete and accurate disclosure of all material facts
and considerations and no such clearance or consent is
liable to be withdrawn, modified or rendered void and all
such clearances and consents have been disclosed to the
Purchaser in the Disclosure Letter; and
4.4 during the six years prior to Completion Shieldcare has not
made any claims or elections under taxation legislation on a
provisional basis.
5. ASSET VALUES
The net values shown in the Accounts for buildings, plant, machinery,
vehicles and any other assets qualifying for capital allowances under
the Capital Allowances Act 1990, the Finance Act 1971 or subsequent
Finance Acts, do not materially differ from the aggregate amount of
expenditure of those assets still unallowed but allowable in future
accounting periods for tax purposes in accordance with those Acts and
no chargeable gain or profit (or balancing charge in respect of any
capital allowances claimed or given) would arise if any assets of
Shieldcare were realised for a consideration equal to the amount of
the book value thereof and shown or included in the Accounts.
6. DISCLOSURE
Full disclosure has been made by the First Vendor to the Purchaser in
the Disclosure Letter:-
6.1 of all bonus issues, redeemable share issues and repayments
and re-organisations of capital since the incorporation of
Shieldcare;
6.2 of the identity of all companies in the same group (as
defined in TCGA Section 170) as Shieldcare;
6.3 of the value as at 6th April 1965 and/or 1st April 1982 of
all assets owned by Shieldcare as at those dates
respectively which are or may be material to be known by a
prudent purchaser of the Shares;
6.4 of all agreements arrangements customs or practices (whether
legally enforceable or not) in operation at the date hereof
for the payment of or contribution towards any pensions or
pension scheme allowances lump sums or other like benefits
on retirement or on death during periods of sickness or
disablement for the benefit of any director or former
director or employee or former employee of Shieldcare or for
the benefit of the dependants of any such persons nor has
any proposal been announced to establish any such agreement
or arrangement;
6.5 of all profit sharing schemes share option schemes share
incentive schemes or any other schemes or arrangements under
which any officer employee or agent of Shieldcare is
entitled to participate in the profits of Shieldcare or has
any rights in respect of any shares or stock of Shieldcare;
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6.6 of all regional development, interest relief and other
grants and subsidies made to Shieldcare;
6.7 of Shieldcare's entitlement to and to the use of capital
allowances as at the date hereof;
6.8 of any agreements or arrangements between Shieldcare and the
Inland Revenue for the creation of any special arrangements
(being arrangements which are not based on a strict and
detailed application of the relevant legislation);
6.9 of all payments made to Shieldcare, since the Accounts Date,
to which Section 601 Taxes Act applies (pension scheme
surpluses: payments to employers);
6.10 of all assets of Shieldcare which are wasting assets within
the meaning of Section 44 of the TGCA and which do not
qualify for capital allowances; and
6.11 of any debt from which Shieldcare has in part been released
which is a loan relationship for the purposes of Finance Act
1996; and
6.12 of any assets of which Shieldcare is or has been the lessor
on terms to which Finance Act 1997 Schedule D12 apply;
7. TRADING LOSSES AND ADVANCE CORPORATION TAX
7.1 There are no trading losses and advance corporation tax
available to Shieldcare for carry forward.
7.2 Shieldcare has not entered into any arrangements for the
surrender of advance corporation tax.
7.3 Shieldcare has not surrendered any amounts of advance
corporation tax, nor claimed any advance corporation tax
surrendered or made any payment for the surrender of advance
corporation tax or consented or agreed to make any surrender
or claim in respect of advance corporation tax.
7.4 Nothing has been done which might cause the disallowance of
the carry forward of trading losses or advance corporation
tax under the provisions of Section 768 or Sections 245,
245A and 245B of the Taxes Act (and the sale of the Shares
hereby will not cause any such disallowance) nor have the
activities of Shieldcare become small or negligible for the
purposes of either of those Sections.
7.5 All of Shieldcare's trading losses are available for
carry-forward under Section 393 of the Taxes Act.
8. DEDUCTIBILITY OF PAYMENTS TO OR FOR THE BENEFIT OF DIRECTORS OR
EMPLOYEES
All remuneration and other sums (including any payments made directly
or indirectly in consideration or in consequence of, or
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otherwise in connection with, the termination of the holding of any
office or employment) paid or payable and all benefits provided or
agreed to be provided to employees or officers or directors or former
employees or officers or directors of Shieldcare and all interest,
rent, royalties, annuities and other annual payments paid or payable
(whether before or after the date hereof) or other sums of an income
nature by Shieldcare under any loan, lease, contract, agreement,
covenant or other commitment or arrangement outstanding or existing at
the date hereof is or are (on the basis of taxation legislation in
force at the date hereof) deductible for corporation tax purposes,
either in computing the profits of Shieldcare or in computing the
corporation tax chargeable on Shieldcare; and Shieldcare has not
incurred any expenditure which is not deductible by reason of Section
76 of the Finance Act 1989 (non-approved retirement benefit schemes).
9. INVESTMENT COMPANIES: DEDUCTIBILITY OF OUTGOINGS
To the extent that Shieldcare is an investment company for the
purposes of corporation tax, all outgoings of a revenue nature are
deductible in computing its profits for the purposes of taxation
pursuant to Sections 338, 339 (charges on income and capital) or 75
(management expenses) of the Taxes Act.
10. DISTRIBUTIONS
10.1 Shieldcare has not since its incorporation made any
distribution within the meaning of Sections 209 (General
definition of "distribution"), 210 or 211 (Bonus issue
following repayment of share capital) of the Taxes Act
except as provided for in its audited accounts nor is
Shieldcare bound to make any such distribution.
10.2 Shieldcare has not paid any capital distribution in respect
of its shares.
10.3 Shieldcare has not made any qualifying distribution which is
or may be deemed to be a foreign income dividend under
Finance Act 1997.
11. FRANKED INVESTMENT INCOME
11.1 Shieldcare has not received and will not receive before
Completion any franked investment income.
11.2 Shieldcare has made no claim under Sections 242 or 243 of
the Taxes Act (surplus franked investment income).
12. CAPITAL ALLOWANCES
12.1 The book value of each of the assets of Shieldcare in or
adopted for the purposes of the Accounts does not exceed the
written down value of such asset for the purposes of the
Capital Allowances Act 1990.
12.2 None of the assets for which a capital allowance has been or
is capable of being made by Shieldcare has been disposed of
or ceased to be used for the purposes of the
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trade since the Accounts Date otherwise than in the ordinary
course of business.
12.3 No grants or subsidies have been received by Shieldcare in
respect of assets on which it has claimed capital
allowances.
12.4 All plant or machinery which is affixed to land or buildings
of which Shieldcare is the owner is deemed to belong to
Shieldcare by virtue of the provisions of Sections 51-59
(inclusive) of the Capital Allowances Act 1990 (capital
allowances for fixtures).
12.5 Shieldcare has not incurred nor agreed to incur any
expenditure to which Part IV of the Capital Allowances Act
1990 applies or could apply.
12.6 Shieldcare has not incurred or agreed to incur any
expenditure to which Section 42 of the Capital Allowances
Act applies or could apply.
12.7 None of the assets, expenditure on which has qualified for a
capital allowance under Part I of the Capital Allowances Act
1990, has at any time since such expenditure was incurred
been used otherwise than as an industrial building or
structure.
12.8 All necessary conditions for all capital allowances (as
defined by Section 832 of the Taxes Act) claimed by
Shieldcare or any lessor to Shieldcare of any real property
or machinery or plant were at all material times satisfied
and remain satisfied and Shieldcare is not liable for any
balancing charge or in damages to any such lessor for breach
of the said conditions.
12.9 Shieldcare has notified the Inspector of Taxes of all
expenditure qualifying for plant and machinery capital
allowances as at the Accounts Date.
12.10 Shieldcare has no assets which are:-
12.10.1 subject to a hire purchase agreement; or
12.10.2 leased by Shieldcare, either as lessor or as
lessee.
12.11 Shieldcare has made no short life asset elections under
Capital Allowances Act 1990 and has no long life assets to
which Capital Allowances Act 1990 Part II Chapter IVA
applies.
12.12 Shieldcare has not been a party to any transfer of assets to
which Section 157 or Section 158 Capital Allowances Act 1990
applies.
13. CORPORATION TAX ON CHARGEABLE GAINS
13.1 For the purposes of corporation tax on chargeable gains
Shieldcare has not disposed of any assets to which
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Sections 48 and 280 (consideration due after time of
disposal) or Section 18(3) (loss on disposal to connected
persons) of the TGCA 1992 or Section 19 and Schedule 11,
paragraph 2 (assets disposed of in a series of transactions)
applies.
13.2 Shieldcare has not made any claim or election under Section
161 (appropriation of trading stock) or Schedule 2
(elections concerning assets held on 6th April 1965) of the
TCGA.
13.3 Shieldcare has no allowable losses which may not be set off
against chargeable gains of Shieldcare generally.
13.4 The cost of acquisition for the purposes of corporation tax
on chargeable gains to Shieldcare of each material asset of
Shieldcare is not less than the book value of that asset as
provided for in the Accounts.
13.5 So far as the First Vendor is aware none of the assets of
Shieldcare was acquired for a consideration higher than its
market value at the time of acquisition.
13.6 So far as the First Vendor is aware Shieldcare has not
disposed of any asset other than at market value and
Shieldcare has not disposed of or acquired any assets in
circumstances such that the provisions of Sections 17, 51,
125 or 282 TCGA could apply to such disposal or acquisition.
13.7 No chargeable gain will accrue to Shieldcare on the disposal
of any debt owed to Shieldcare for proceeds equal to the
value of the debt net of provision in the Accounts and no
debt owing to Shieldcare is a chargeable asset within the
meaning of Section 251 TCGA.
13.8 Shieldcare has not acquired any asset otherwise than by way
of bargain at arm's length from an unconnected person.
13.9 There has been no transaction to which any of Sections
126-134, 152, 153, 175 or 247 TCGA (replacement of assets)
or Sections 135 and 136 (company reconstructions and
amalgamations) TCGA, Section 171 (intra-group transfers) or
139 and 140 (transfer of assets on company reconstruction or
amalgamation) TCGA or Section 24 TCGA (deemed disposal)
applies.
13.10 Shieldcare has not at any time within the period of six
years ending with Completion, acquired any assets (including
in particular land with development value other than trading
stock) from any other company which at the time of the
acquisition was a member of the same group (as defined in
Section 170 TCGA) as Shieldcare.
13.11 Shieldcare has not taken or omitted to take any action
whereby either: Shieldcare is denied the right to the time
apportionment basis for computing the chargeable gain on the
goodwill of Shieldcare at 6th April 1965 by reason of any
election part disposal re-organisation reconstruction
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or transfer to a close company; or Shieldcare is deprived of
the right to make an election to have a chargeable gain on
the goodwill of Shieldcare at 6th April 1965 assessed by
reference to its value at that date.
13.12 Shieldcare has not received any capital distributions to
which the provisions of Section 189 TGCA could apply
(capital distribution of chargeable gains: recovery of tax
from shareholder).
13.13 Shieldcare has not transferred a trade carried on by it
outside the United Kingdom through a branch or agency to a
company not resident in the United Kingdom in circumstances
such that a chargeable gain may be deemed to arise at a date
after such transfer under Section 140 TCGA.
13.14 Shieldcare is not and never has been a member of a group of
companies for the purposes of Section 170 TGCA.
13.15 Shieldcare has made no claim under Section 279 TCGA (assets
situated outside the United Kingdom).
13.16 Shieldcare has made no claim under Section 24 TCGA (assets
of negligible value).
13.17 Shieldcare has made no claim under Sections 23 or 25 TCGA
(Compensation and Insurance monies).
13.18 No loss which might accrue on the disposal by Shieldcare of
any shares in, or securities of, a company (group companies)
is liable to be reduced by virtue of a deprecatory
transaction, as defined in Section 176 TCGA (including a
distribution treated as a deprecatory transaction by virtue
of Section 177 TCGA (dividend stripping)), effected prior to
Completion.
13.19 Nothing has been done in circumstances such that Sections 29
- 34 (inclusive) TCGA (value shifting and deprecatory
transactions) has or may or will have effect in relation to
a transaction by Shieldcare.
13.20 Shieldcare has not within the period of six months ending
with the date hereof disposed of shares and shares and
securities within the prescribed period as defined in
Section 106 of TCGA.
13.21 There has not accrued any gain in respect of which
Shieldcare may be liable to corporation tax on chargeable
gains by virtue of the provisions of Sections 86 and 87 or
Schedule 11, paragraph 18 TCGA.
13.22 Shieldcare has not made any elections under Section 35 TCGA
(Capital Gains Tax re-basing to 1982) and no relevant
disposal (within the meaning of the same section) has been
made.
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13.23 Shieldcare has not incurred liabilities under Sections
185-187 (inclusive) or Sections 188, 199 or 276 (company
migration) TCGA.
13.24 Shieldcare has not acquired benefits under any policy of
assurance other than as original beneficial owner (Section
210 TCGA).
13.25 Shieldcare either does not own and has not entered into any
agreement to acquire an asset which is a wasting asset
within the meaning of Section 44 TCGA or has not made any
disposals of any such assets.
13.26 No losses have arisen or will arise on the disposal of any
of the assets of Shieldcare which will be restricted by
reference to capital allowances or renewals allowances or
otherwise under Section 41 TCGA.
13.27 There have been no disposals or acquisitions of assets by
Shieldcare on which rollover or holdover relief under
Sections 152, 155, 247 and/or 247A TCGA has applied.
14. WITHDRAWAL OF TAX RELIEF
Shieldcare is not taxable on the withdrawal of any form of relief
against taxation and there is no information available to the First
Vendor from which it appears that Shieldcare may be liable to such
withdrawal. For the purposes of this warranty, withdrawal of relief
against taxation includes the loss of any relief, allowance or credit
or set-off or deduction in computing profits pursuant to any
legislation or otherwise for taxation.
15. TRANSACTIONS IN SHIELDCARE'S SHARE AND LOAN CAPITAL, ETC.
15.1 Shieldcare has not at any time after 6th April 1965 redeemed
repaid or repurchased or agreed to redeem repay or
repurchase any of its issued share capital.
15.2 Shieldcare has not at any time after 6th April 1965
capitalised or agreed to capitalise in the form of shares or
debentures any profits or reserves of any class or
description or passed or agreed to pass any resolution to do
so.
15.3 Shieldcare has not converted any securities it has issued.
15.4 Shieldcare has not granted any options over its shares or
any assets owned by it.
15.5 During the six years prior to the Completion Date Shieldcare
has not issued loan capital to a non United Kingdom resident
company.
15.6 No securities issued by Shieldcare and remaining in issue at
the date hereof were issued in such circumstances that the
interest payable thereon falls to be treated as a
distribution under Section 209(2) Taxes Act.
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15.7 Shieldcare has not issued nor does it own any shares to
which Section 249 or 251 Taxes Act (stock dividends) could
apply.
15.8 Shieldcare has not been a party to any transaction to which
either of Section 213 (Demergers) or Section 219 (Purchase
of own shares) of the Taxes Act have been or could be
applied.
16. GROUP INCOME
Shieldcare is not, nor has it ever been, a member of a group of
companies as defined by Section 170 T.C.G.A.
17. GROUP RELIEF, ETC.
17.1 Shieldcare is not and has not been a subsidiary and does not
have and has not had any subsidiaries and is not and has not
been part of any group of companies which would be eligible
for relief under the provisions of Section 402 to Section
413, Taxes Act or otherwise.
17.2 Shieldcare is not and has not been (during the seven years
prior to the date hereof) a consortium company or a member
of a consortium as defined in the Taxes Act.
18. UNREMITTABLE OVERSEAS INCOME
Shieldcare has made no claim under Section 584 of the Taxes Act
(unremittable income arising outside the United Kingdom).
19. CLOSE COMPANY PROVISIONS
19.1 Shieldcare is a close company as defined by Section 414 of
the Taxes Act.
19.2 Shieldcare has not made any loan advance or payment or given
any consideration falling within Sections 419-420 or 422
Taxes Act (loans to participators).
19.3 Shieldcare has made no payments falling to be treated as
distributions under Section 418 Taxes Act (distributions).
19.4 No sums fall to be apportioned in respect of any accounting
period commencing prior to March 31 1989 to any person under
Section 423 and Schedule 19 Taxes Act (shortfall etc.) in
respect of Shieldcare or any of Shieldcare's Subsidiaries
for any accounting period ending on or before the Accounts
Date and clearance under paragraph 16 Schedule 19 Taxes Act
has been obtained by Shieldcare as to the appropriate level
of distributions made by Shieldcare in respect of all
accounting periods ending on or within six years prior to
the Accounts Date.
19.5 Shieldcare has not expended or applied any sum liable to be
regarded as income available for distribution in respect of
any accounting period commencing prior to March 31 1989
pursuant to paragraph 8 Schedule 19 Taxes Act
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(first business loans etc.) and is not bound (contingently
or otherwise) to expend or apply any such sum.
20. ACCRUED INCOME SCHEME
Shieldcare has no undisclosed taxation liability in respect of accrued
amounts as defined in Section 713 of Taxes Act (transfers of
securities with accrued interest).
21. BUSINESS EXPANSION SCHEME AND ENTERPRISE INVESTMENT SCHEME
21.1 During the six years prior to Completion Shieldcare has not
issued any shares attracting relief under Chapter III of
Part VII of Taxes Act.
21.2 Shieldcare has not entered into any obligations requiring it
to be a qualifying company carrying on a qualifying trade
within the Finance Act 1981, Finance Act 1985 or Finance Act
1986 or Part VII Chapter III Taxes Act for the purposes of
the business start up scheme, the business expansion scheme
or the enterprise investment scheme.
22. VAT
22.1 Shieldcare is not nor has been for VAT purposes a member of
a group of companies and no act or transaction has been
effected in consequence whereof Shieldcare is or may be held
liable for any tax or VAT chargeable against some other
person firm or company.
22.2 Shieldcare is a registered and taxable person for the
purpose of the VATA and has complied with and observed in
all respects the terms of all statutory provisions,
directions, conditions, notices and agreements with H.M.
Customs and Excise relating to VAT.
22.3 Shieldcare has maintained and obtained accounts, records,
invoices and other documents (as the case may be)
appropriate or requisite for the purposes of VAT which are
complete, correct and up-to-date.
22.4 Shieldcare is not, nor in the past three years has been, in
arrears with any payments or returns or notifications under
any statutory provisions, directions, conditions or notices
relating to VAT, or liable to any forfeiture or penalty or
interest or surcharge or to the operation of any penalty,
interest or surcharge provision or received any surcharge or
penalty notice.
22.5 Shieldcare has not been required by H.M. Customs and Excise
to give security.
22.6 Shieldcare is not, and has not agreed to become, an agent,
manager or factor for the purposes of section 47 VATA
(agents etc.) of any persons who is not resident in the
United Kingdom.
22.7 Shieldcare has not made, and will not make prior to
Completion, any supplies that are exempt supplies.
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22.8 Shieldcare has not received a notice under paragraph 2 of
Schedule 6 VATA (valuation - special cases) directing that
the value of goods supplied by Shieldcare be taken to be
their open market value.
22.9 Shieldcare has not and will not prior to Completion be,
treated as having made any supply of goods or services for
the purposes of VAT where no supply has in fact been made by
Shieldcare.
22.10 Shieldcare does not use any schemes made under any of the
following regulations: Value Added Tax (Supplies by
Retailers) Regulations 1972 (special schemes for retailers);
Value Added Tax (Cash Accounting) Regulations 1987 (cash
accounting scheme); or Value Added Tax (Annual Accounting)
Regulations 1988 (annual accounting scheme).
22.11 Shieldcare is not for the purpose of paragraph 5(5) of
Schedule 10, VATA (developers of certain non-residential
buildings etc.) the developers of any building or work in
respect of which no election has been made under paragraph
2(1) of that Schedule by Shieldcare.
22.12 Shieldcare holds no interest in any buildings or land in
respect of which Shieldcare, or any other person has made an
election to waive the exemption to VAT in accordance with
the provisions of paragraph 2 of Schedule 10 to the VATA nor
is Shieldcare contractually committed (contingently or
otherwise) to receive any supply in respect of which such an
election has been made.
22.13 Shieldcare has not received any zero-rated supply in respect
of which there could be a charge to VAT at a positive rate
under paragraph 1 of Schedule 10 to the VATA.
22.14 Shieldcare is not a developer in relation to any building or
work in circumstances where it could make a self-supply of
land or buildings under paragraph 5 of Schedule 10 to the
VATA.
22.15 Shieldcare has not performed any services such as are
described in the VAT (self-supply of Construction Services)
Order 1989.
22.16 Shieldcare has made no deduction and taken no credit for
input tax in respect of a capital item in relation to which
there could be an adjustment under Part VA of the Value
Added Tax (General) Regulations 1985.
22.17 Full details of any claim for bad debts relief under section
36 VATA (bad debts) made by Shieldcare are set out in or
annexed to the Disclosure Letter and none is in excess of
the allowable amount.
22.18 Shieldcare is not required to pay amounts on account of VAT
under any order made under section 28 VATA (payments on
accounts).
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22.19 Shieldcare has acquired no assets in circumstances described
in Article 5(1) VAT (Special Provisions) Order 1995
SI1995/1268.
23. STAMP DUTY
No claim for exemption from stamp duty has been made under Section 42
of the Finance Act 1930 or Sections 75 or 77 of the Finance Act 1986
or any other statute or extra-statutory concession in respect of the
capital or assets of Shieldcare.
24. INHERITANCE TAX, ETC.
24.1 Shieldcare is not liable to be assessed to corporation tax
on chargeable gains or to capital transfer tax or
inheritance tax as donor or donee of any gift or transferor
or transferee of value and is at Completion not aware of any
circumstances which might give rise to a liability to
taxation under the provisions of Part VII of the Inheritance
Tax Act 1984; and Shieldcare has not been a party to any
transaction operation disposition or transfer which is or
may form part of an associated operation or associated
operation in relation to a transfer of value within the
meaning of Section 268 of the Inheritance Tax Act 1984.
24.2 No shares in or securities of or assets owned by Shieldcare
are or are liable to be subject to any sale, mortgage or
charge by virtue of Sections 204, 212, 237 or 238 of the
Inheritance Tax Act 1984.
24.3 Any certificates of discharge from inheritance tax (and/or
capital transfer tax) which have been obtained in relation
to Shieldcare have been obtained after full disclosure.
25. FOREIGN MATTERS
25.1 Shieldcare has not received any foreign loan interest since
incorporation of Shieldcare on which double taxation relief
could be restricted under Section 798 Taxes Act.
25.2 Shieldcare has for the six years prior to Completion been
resident for taxation purposes in the United Kingdom and is
not resident in any other jurisdiction.
25.3 Shieldcare has no assets situated outside the United
Kingdom.
25.4 Shieldcare has at no time during the six years up to the
date hereof claimed relief under Section 788 of Taxes Act
(double taxation relief pursuant to a Double Taxation
Agreement).
25.5 Shieldcare up to the date hereof has carried out no
operations or transactions which would render it to be
liable to taxation in a jurisdiction operating a unitary
system of taxation and Shieldcare has no presence in a
unitary state.
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25.6 Shieldcare is not and does not hold and has never held an
asset which might be considered to be a material interest in
a non-qualifying offshore fund as defined in Section 757 of
Taxes Act.
25.7 Shieldcare is not a dual resident Company as defined in
Section 404 and Schedule 17 Taxes Act.
25.8 Shieldcare is not liable to be assessed to tax in respect of
income or gains of a non-resident person pursuant to Part
VIII Taxes Management Act 1970.
25.9 Shieldcare is not interested in any controlled foreign
company for the purposes of Sections 747-755 and Schedule 29
Taxes Act.
25.10 Shieldcare does not make any payments of interest, royalties
or rents to non-resident persons.
26. PREMIUMS, LEASES AT UNDERVALUE, ETC.
Shieldcare has not entered into any transactions or done or permitted
to be done anything, in consequence of which any sums received or
receivable by Shieldcare, or any payment made or to be made by
Shieldcare, is subject to the provisions of Sections 34 to 37 of the
Taxes Act (assignment of lease at undervalue) or Section 36 of the
Taxes Act (sale with right to reconveyance and similar transactions).
27. TAX AVOIDANCE
27.1 Shieldcare has not been and is under no obligation to be a
party to or otherwise involved in any transaction to which
any of the following provisions could apply:-
27.1.1 Section 153 of the Capital Allowances Act 1990
(Capital Allowances - contributions and
subsidies);
27.1.2 Part XVII, Chapters I, II, III, VI Taxes Act
(transactions in securities, transfers of
securities, transfers of assets abroad, migration
of companies, change in ownership of companies,
transactions between associated persons,
transactions in land: taxation of capital gains,
sales and leasebacks, etc.);
27.1.3 Section 75 of the Capital Allowances Act 1990
(Capital Allowances - avoidance);
27.1.4 Section 240(11) Taxes Act (set off of advance
corporation tax);
27.1.5 Sections 395 (leasing contracts and company
reconstructions) and 116 (partnerships involving
companies - arrangements for transferring relief)
Taxes Act;
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27.1.6 Section 94 Taxes Act (release of obligation to pay
debt);
27.1.7 Section 42 of the Capital Allowances Act 1990
(Assets leased outside the United Kingdom);
27.1.8 Section 125 Taxes Act (annual payments).
27.2 In particular, but without prejudice to the generality of
the foregoing, Shieldcare has not entered into any
transaction, or done or omitted to do anything else in
consequence of which either (i) any tax advantage obtained
by Shieldcare may be cancelled pursuant to Section 703 of
the Taxes Act (cancellation of tax advantages from certain
transactions in securities) or (ii) in computing the income,
profits or losses of Shieldcare for tax purposes,
adjustments are liable to be made under the provisions of
Section 770 of the Taxes Act (sales and other transactions
at undervalue or overvalue).
27.3 In particular, but without prejudice to the generality of
the foregoing, Shieldcare has not entered into any
transaction to which Section 786 of the Taxes Act
(transactions associated with loans or credit; connected
persons) applies or may or will apply.
27.4 Shieldcare has not been involved in or been party to any
transaction, act or omission which could result in any
transaction being regarded for any taxation purpose as a
fiscal nullity or otherwise as having no consequences or
otherwise for any taxation purpose being ignored,
disregarded or treated as being of a different nature from
its nature when considered apart from any circumstances in
which it in fact happened.
28. MISCELLANEOUS
28.1 Shieldcare does not carry on and has not carried on business
in any partnership (as that term is defined in the
Partnership Act 1890) whether managed and controlled in the
United Kingdom or elsewhere.
28.2 Shieldcare has not issued and is not the owner of any
qualifying corporate bonds within Section 64 of and Schedule
13 Finance Act 1984.
28.3 Shieldcare has made no payments to Charity, nor does it
operate a charities payroll deduction scheme under Section
202 Taxes Act.
28.4 Shieldcare is not one to which the provisions of Section 844
and Schedule 30 Taxes Act (Transitional) apply or could
apply.
28.5 Shieldcare does not operate and has not operated a
profit-related pay scheme under Part V Chapter III Taxes
Act.
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28.6 Shieldcare does not operate and has not operated any
unauthorised employee share scheme within the meaning of
Part III Chapter II Finance Act 1988.
28.7 Shieldcare does not operate and has not operated an employee
share ownership trust as defined in Section 74 and Schedule
7 Finance Act 1989.
28.8 Shieldcare does not own and has not acquired any benefit
under any policy of insurance, annuity or capital
redemption.
28.9 So far as the First Vendor is aware Shieldcare has not, nor
will become, liable to pay or make reimbursements or
indemnity in respect of any taxation (or amounts
corresponding thereto) in consequence of the failure by any
other person to discharge such 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.
28.10 No chargeable gain or profit (or balancing charge in respect
of any capital allowances claimed or given) would arise if
any assets of Shieldcare were realised for a consideration
equal to the amount of the book value thereof and shown or
included in the Accounts, disregarding for the purposes of
determining any chargeable gain any relief or allowance
available other than amounts falling to be deducted under
Section 30 TCGA.
28.11 Shieldcare does not operate and has not operated any
approved employee share scheme within the meaning of Section
185 Taxes Act.
PART 3
LIMITATION OF LIABILITY UNDER WARRANTIES AND THE TAX COVENANT
1. EFFECT OF THIS PART 3
This Part 3 shall operate so as to limit the liability of the First
Vendor under the Warranties and the Tax Covenant and to qualify the
nature of Undisclosed Liabilities.
2. OPERATIVE PROVISIONS
2.1 In this Part 3 "Relevant Claim" means a claim in respect of
the Warranties or under the Tax Covenant or in respect of
any Undisclosed Liabilities.
2.2 No liability will arise in respect of any Relevant Claim,
unless:-
2.2.1 written notice containing so far as reasonably
practicable specific details of the Relevant Claim
(including the event, matter or default giving
rise
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to the claim, the breach that results and the
amount claimed) is served on the First Vendor:-
2.2.1.1 in respect of a claim under the
Warranties other than those contained in
Part 2 of this Schedule 5 on or before
the Second Relevant Date (as defined in
Clause 6 of the Agreement); or
2.2.1.2 in respect of a claim under the Tax
Covenant and the Warranties contained in
Part 2 of this Schedule 5 on or before
the seventh anniversary of Completion;
2.2.2 the aggregate amount of all Relevant Claims would
exceed L150,000 in which event the First
Vendor (or, in the case of the Undisclosed
Liabilities, the Vendors) shall only be liable for
the excess over such figure.
2.3 The aggregate maximum liability of the First Vendor in
respect of all Relevant Claims shall be limited to
L3,195,765.
2.4 The aggregate maximum liability of the Second Vendor in
respect of all Relevant Claims shall be limited to the
amount deposited in the Second Escrow Account at Completion.
2.5 No liability will arise in respect of any Relevant Claim:-
2.5.1 to the extent that the circumstances giving rise
to the same would not have arisen but for some act
or omission after Completion by the Purchaser or
Shieldcare (otherwise than in the normal course of
the Business) which could reasonably have been
avoided and which the Purchaser was aware or ought
reasonably to have been aware would give rise to a
Relevant Claim save where such act or omission is
a result of a legally binding obligation of
Shieldcare entered into before Completion or is
done with the approval of the Vendors;
2.5.2 to the extent that it arises or is increased as a
result only of:-
2.5.2.1 an increase in rates or incidence of
Taxation after the date hereof; or
2.5.2.2 the passing of any legislation, or
making of any subordinate legislation
with retrospective effect after the date
hereof;
2.5.3 to the extent that it relates to any loss which is
recovered under any policy of insurance effected
by Shieldcare, provided however that (subject to
the other limitations in the Part 3 of Schedule 5)
the Relevant Claim will be increased by an amount
equal to any increase in insurance premiums of
Shieldcare
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to the extent that they are directly attributable
to any such claim;
2.5.4 to the extent that it represents any matter
expressly and specifically provided for or
expressly and specifically included as a liability
in the Accounts or in the Management Accounts;
2.5.5 under the Warranties and in relation to
Undisclosed Liabilities, to the extent that the
matter giving rise to a Relevant Claim has been
fully and fairly disclosed in the Disclosure
Letter.
2.6 If the Purchaser or Shieldcare receive, pursuant to this
Agreement or the Tax Covenant, an amount from the First
Vendor or the Escrow Accounts in respect of any Relevant
Claim (a "Relevant Receipt") and the Purchaser or Shieldcare
subsequently recovers from a third party a sum which is
referable to such Relevant Claim, the Purchaser or
Shieldcare and/or any of their subsidiaries (as the case may
be) shall as soon as practicable thereafter reimburse the
Relevant Receipt net of the reasonable costs of recovery
(properly incurred) paid by the Purchaser and/or Shieldcare
and/or any of their subsidiaries or their agents or
successors in title up to a maximum of the total amount of
the Relevant Receipt or, if less, the amount received from
such third party.
2.7 The Purchaser will:-
2.7.1 as soon as reasonably practicable notify the First
Vendor in writing of any Relevant Claim and of any
claim or matters which gives or may give rise to a
Relevant Claim and will give a similar
notification to the Second Vendor to the extent
that such Relevant Claim may give rise to a claim
under Clause 6 of the Agreement;
2.7.2 take such action as the First Vendor and (in the
case of a Relevant Claim under Clause 6 of the
Agreement) the Second Vendor may reasonably
require to avoid, resist, contest or compromise
any Relevant Claim or matter which gives or may
give rise to a Relevant Claim (including making
claims against third parties, in which event the
provisions of paragraph 2.4 shall apply), and
where required by the First Vendor, give control
of the conduct of any Relevant Claim or matter
which may give rise to a Relevant Claim to the
First Vendor (provided that such control shall not
be required by the First Vendor in relation to any
matters which, in the reasonable opinion of the
Purchaser, is likely directly or indirectly to
affect adversely relations with customers or
suppliers of Shieldcare or is likely directly or
indirectly to affect adversely relations with H.M.
Customs & Excise or the Inland Revenue or any
other regulatory body having jurisdiction over
Shieldcare or may otherwise adversely affect the
goodwill of
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Shieldcare), and subject in each such case to
being fully indemnified and secured first by the
First Vendor against all reasonable costs in so
doing.
2.6 No breach on the part of the Purchaser of its obligations
under paragraph 2.5.1 or 2.5.2 shall prejudice any claim it
may have under the Warranties or the Tax Covenant or in
respect of Undisclosed Liabilities, but the amount
recoverable pursuant to such claim under the Warranties and
the Tax Covenant and in respect of Undisclosed Liabilities
shall be limited to the amount which would have been
recoverable had the provisions of paragraphs 2.5.1 and 2.5.2
been complied with.
2.7 Notwithstanding any of the foregoing provisions of this Part
3, none of the limitations contained in this Part 3 shall
apply to any Relevant Claim arising out of any fraud,
deliberate concealment, fraudulent conduct, conduct
involving dishonesty, serious misdeclaration or persistent
misdeclaration on the part of Shieldcare or the Vendors or
any person acting on his behalf in relation to the matter
giving rise to the Relevant Claim.
2.8 Any amounts paid by the Vendors to the Purchaser pursuant to
a Relevant Claim (whether pursuant to this Agreement or
under the Tax Covenant) shall be deemed (so far as possible)
to be a reimbursement of an equal value of the Consideration
received by them for the Shares.
2.9 The Vendors undertake not to make and undertake that no
other person claiming under or through them will make any
claim against Shieldcare or any employee of Shieldcare on
whom they may have relied before entering into any term of
this Agreement or in the preparation of the Disclosure
Letter in respect of any claim under this Agreement or any
omission from or statement in the Disclosure Letter.
2.10 Any liability in respect of a Relevant Claim shall be
reduced by the amount of any direct or indirect tax benefit
accruing to the Purchaser as a result of the matter giving
rise to the liability.
2.11 In determining damages for any breach of the Warranties the
Purchaser shall not be required to cause Shieldcare to be
wound up or to rely on the limited liability of Shieldcare
in mitigation of its loss, but shall be deemed for this
purpose to be under a duty to maintain Shieldcare as a going
concern and to make good any deficiency in its assets.
2.12 The Purchaser acknowledges that it is not relying on any
warranties or representations from the Vendors except those
in this Agreement and documents entered into pursuant to
this Agreement.
2.13 The Warranties and the benefit of the Tax Covenant are
personal to the Purchaser, its holding company and any
subsidiary of its holding company (as those expressions are
defined in the Companies Act 1985) and the benefit of none
of them may be assigned
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or transferred (other that to such persons) without the
prior written consent of the First Vendor (which consent the
First Vendor shall have an absolute discretion to withhold
without giving reasons therefor).
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Exhibit 99.1
METRON TECHNOLOGY ACQUIRES CRITICAL PARTS
CLEANING BUSINESS
Burlingame, California. - March 3, 2000 - Metron Technology N.V. (Nasdaq: MTCH)
today announced that it has completed the acquisition of Shieldcare Ltd., based
in Scotland, a leading provider of critical parts cleaning services for
semiconductor manufacturers in Europe. The acquisition fits with Metron
Technology's announced strategy to provide world class outsourcing solutions in
high growth areas of the semiconductor industry .The acquisition was completed
as a cash transaction; the terms of the agreement were not disclosed.
Ed Segal, President and CEO of Metron Technology, commented, "The demand for
capacity is driving the semiconductor industry into new areas of growth. With
its established global infrastructure, Metron is well positioned to support this
growth. The acquisition of Shieldcare allows us to provide additional high
quality outsourcing services to support a number of critical production steps in
the fab." The acquisition expands on a relationship between Shieldcare and
Metron Technology that began last year with a joint agreement to build a
critical parts cleaning facility in Israel. Building on the synergy of the
acquisition agreement, Metron Technology has decided to proceed with plans to
build an additional critical parts cleaning facility in Singapore.
Gordon Riddell, Managing Director of Shieldcare Ltd. added, "We strongly believe
that our existing customers will benefit from our decision to combine our
business with Metron Technology. The acquisition gives Metron Technology and
Shieldcare the ability to develop and grow in regions where our customers need
us to be." Shieldcare is an authorized supplier of critical parts cleaning
services to major OEM and device manufacturing companies worldwide. The company
also operates as an authorized re-manufacturer of physical vapor deposition
(PVD) equipment for a well-known supplier of automated systems for chemical
vapor deposition (CVD).
Metron Technology N.V. (NASDAQ: MTCH) is a leading worldwide supplier of
materials, capital equipment, and outsourcing services to the semiconductor and
related industries. Metron's global infrastructure facilitates cost-efficient
introduction of products into new markets and technical support worldwide.
Outsourcing services provide semiconductor manufacturers with the ability to
contract out support services such as materials management, cleanroom services,
and facility maintenance. At the core of the business is a firm belief in the
importance of local knowledge in maximizing penetration of worldwide markets. In
Asia, Europe and the United States, Metron provides the means to ensure the
successful transfer and use of manufacturing equipment and materials wherever
they are sold. Metron Technology N. V. has its headquarters in Burlingame,
California, and is on the web at www.metrontech.com
Except for the historical information contained herein, the matters discussed in
this news release are forward-looking statements involving risks and
uncertainties that could cause actual results to differ materially from those in
such forward-looking statements.
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Potential risks and uncertainties include, but are not limited to, the
cyclicality of the semiconductor industry, the company's ability to deliver
increased value to its stockholders and the ability to successfully integrate
Shieldcare's services and staff into the company. For a description of other
risks related to Metron Technology, see Metron Technology's prospectus dated
November 19, 1999 and its other filings with the Securities and Exchange
Commission.
CONTACT:
METRON TECHNOLOGY N.V.
Peter V. Leigh, (VP, Finance & CFO)
650/373-1133 ext.503
