UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 3)
Under the Securities Exchange Act of 1934
HEALTH MANAGEMENT, INC.
(Name of Issuer)
Common Stock, par value $.03 per share
(Title of Class of Securities)
42219B10
(CUSIP Number)
Robert W. Fine
Transworld HealthCare, Inc.
555 Madison Avenue, 30th Floor
New York, New York 10022
(212)750-0064
(Name, Address, and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 13, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b) (3) or (4), check the following box: [ ]
Check the following box if a fee is being paid with the
statement: [ ]
CUSIP No. 42219B10
I. Name of Reporting Person Transworld
HealthCare, Inc.
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
II. Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [X]
III. SEC Use Only
IV. Source of Funds BK
V. Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
VI. Citizenship or Place of Organization New York
VII. Sole Voting -0-
Power
Number of Shares VIII. Shared Voting 9,711,005
Power
IX. Sole Dis- -0-
positive Power
X. Shared Dis- 9,711,005
positive Power
XI. Aggregate Amount Beneficially
Owned By Each Reporting Person 9,711,005 shares
XII. Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
XIII.Percent of Class Represented by
Amount in Row (11) 51.0%
XIV. Type of Reporting Person CO
CUSIP No. 42219B10
I. Name of Reporting Person IMH Acquisition
Corp.
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
II. Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [X]
III. SEC Use Only
IV. Source of Funds BK
V. Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
VI. Citizenship or Place of Organization Delaware
VII. Sole Voting -0-
Power
Number of Shares VIII. Shared Voting 9,711,005
Power
IX. Sole Dis- -0-
positive Power
X. Shared Dis- 9,711,005
positive Power
XI. Aggregate Amount Beneficially
Owned By Each Reporting Person 9,711,005 shares
XII. Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
XIII.Percent of Class Represented by
Amount in Row (11) 51.0%
XIV. Type of Reporting Person CO
CUSIP No. 42219B10
I. Name of Reporting Person Hyperion
Partners II L.P.
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
II. Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [X]
III. SEC Use Only
IV. Source of Funds BK,OO
V. Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
VI. Citizenship or Place of Organization Delaware
VII. Sole Voting -0-
Power
Number of Shares VIII. Shared Voting 9,973,098
Power
IX. Sole Dis- -0-
positive Power
X. Shared Dis- 9,973,098
positive Power
XI. Aggregate Amount Beneficially
Owned By Each Reporting Person 9,973,098 shares
XII. Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
XIII.Percent of Class Represented by
Amount in Row (11) 51.6%
XIV. Type of Reporting Person PN
CUSIP No. 42219B10
I. Name of Reporting Person Hyperion
Ventures II L.P.
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
II. Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [X]
III. SEC Use Only
IV. Source of Funds OO
V. Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
VI. Citizenship or Place of Organization Delaware
VII. Sole Voting -0-
Power
Number of Shares VIII. Shared Voting 9,973,098
Power
IX. Sole Dis- -0-
positive Power
X. Shared Dis- 9,973,098
positive Power
XI. Aggregate Amount Beneficially
Owned By Each Reporting Person 9,973,098 shares
XII. Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
XIII.Percent of Class Represented by
Amount in Row (11) 51.6%
XIV. Type of Reporting Person PN
CUSIP No. 42219B10
I. Name of Reporting Person Hyperion
Funding II Corp.
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
II. Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [X]
III. SEC Use Only
IV. Source of Funds OO
V. Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
VI. Citizenship or Place of Organization Delaware
VII. Sole Voting -0-
Power
Number of Shares VIII. Shared Voting 9,973,098
Power
IX. Sole Dis- -0-
positive Power
X. Shared Dis- 9,973,098
positive Power
XI. Aggregate Amount Beneficially
Owned By Each Reporting Person 9,973,098 shares
XII. Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
XIII.Percent of Class Represented by
Amount in Row (11) 51.6%
XIV. Type of Reporting Person CO
CUSIP No. 42219B10
I. Name of Reporting Person Lewis S. Ranieri
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
II. Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [X]
III. SEC Use Only
IV. Source of Funds OO
V. Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
VI. Citizenship or Place of Organization United States of
America
VII. Sole Voting -0-
Power
Number of Shares VIII. Shared Voting 9,973,098
Power
IX. Sole Dis- -0-
positive Power
X. Shared Dis- 9,973,098
positive Power
XI. Aggregate Amount Beneficially
Owned By Each Reporting Person 9,973,098 shares
XII. Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
XIII.Percent of Class Represented by
Amount in Row (11) 51.6%
XIV. Type of Reporting Person IN
CUSIP No. 42219B10
I. Name of Reporting Person Scott A. Shay
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
II. Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [X]
III. SEC Use Only
IV. Source of Funds OO
V. Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
VI. Citizenship or Place of Organization United States of
America
VII. Sole Voting -0-
Power
Number of Shares VIII. Shared Voting 9,973,098
Power
IX. Sole Dis- -0-
positive Power
X. Shared Dis- 9,973,098
positive Power
XI. Aggregate Amount Beneficially
Owned By Each Reporting Person 9,973,098 shares
XII. Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
XIII.Percent of Class Represented by
Amount in Row (11) 51.6%
XIV. Type of Reporting Person IN
Item 4 of the Schedule 13D, dated November 13, 1996, as
amended by Amendment No. 1 and Amendment No. 2 thereto (the
"chedule 13D" relating to the Common Stock, par value $.03 per
share, of Health Management, Inc., is hereby amended by adding
thereto the information and exhibit described herein. Terms
which are defined in such Schedule 13D shall have their defined
meanings herein, unless otherwise defined herein.
Item 4. Purpose of Transaction
On August 13, 1997, Transworld and Counsel Corporation
("Counsel") entered into a letter agreement (the "Assets Purchase
Letter Agreement") providing for the purchase by Counsel (the
"Assets Purchase") of substantially all of the businesses and
operations of the Issuer (the "HMI Assets"). The purchase price
of the HMI Assets is approximately $40 million. The closing of
the Assets Purchase by Counsel is subject to, among other things,
Counsel's satisfaction with its due diligence review of the HMI
Assets, approval of the Merger and the Assets Purchase by the
lenders party to the Credit Agreement and certain state and
regulatory approvals. For further information with respect to
the Assets Purchase Letter Agreement, reference is made to the
Assets Purchase Letter Agreement (which is filed as Exhibit 1
hereto), which is incorporated herein by reference.
Item 7. Materials to be filed as Exhibits
Exhibit 1 - Assets Purchase Letter Agreement, dated August 13,
1997, between Transworld and Counsel
SIGNATURE
After reasonable inquiry and to the best of the knowledge
and belief of each of the undersigned, each of the undersigned
certifies that the information set forth in this statement is
true, complete, and correct.
TRANSWORLD HEALTHCARE, INC.
August 20, 1997 By /s/ Robert W. Fine
Robert W. Fine
President
HYPERION PARTNERS II L.P.
By: Hyperion Ventures II L.P.,
its general partner
By: Hyperion Funding II Corp.,
its general partner
By /s/Scott A. Shay
Scott A. Shay
Executive Vice
President
HYPERION VENTURES II L.P.
By: Hyperion Funding II Corp.,
its general partner
By /s/Scott A. Shay
Scott A. Shay
Executive Vice President
HYPERION FUNDING II CORP.
By /s/Scott A. Shay
Scott A. Shay
Executive Vice President
/s/Lewis S. Ranieri
Lewis S. Ranieri
/s/Scott A. Shay
Scott A. Shay
IMH ACQUISITION CORP.
By /s/ Robert W. Fine
Robert W. Fine
President
EXHIBIT 1
Counsel Corporation
The Exchange Tower
Suite 1300
2 First Canadian Place
Toronto, Ontario M5X IE3
Canada
August 13, 1997
Transworld HealthCare, Inc.
555 Madison Avenue, 30th Floor
New York, New York 10022
Gentlemen:
This letter, when countersigned by Transworld HealthCare,
Inc. ("Transworld"), will serve to confirm the agreement between
Counsel Corporation ("Counsel") and Transworld in respect of the
acquisition by an entity to be formed by, and whose obligations
will be guaranteed by, Counsel (the "Buyer") of substantially all
of the assets of Health Management, Inc. (the "Seller") in
accordance with the provisions set forth below:
1. (a) The Buyer would acquire substantially all of the
assets of the Seller (the "Assets"), including leasehold
interests relating to all facilities of the Seller (the
"Transferred Facilities") other than the Seller's Pittsburgh,
Pennsylvania, Chicago, Illinois and Ronkonkoma, New York
facilities (the "Retained Facilities"), receivables (including,
without limitation, accounts receivable), inventory, proprietary
rights (including, without limitation, copyrights, patents,
patent applications, tradenames and trademarks), tangible
personal property located at the Transferred Facilities
(including, without limitation, equipment, furniture and
fixtures), pharmacy equipment and supplies located at the
Retained Facilities (at the option of the Buyer), dealer
agreements, all customer and vendor lists, and related files and
information. The Seller will retain the rights to any cash, tax
refunds, the proceeds from any litigation or insurance claims,
and leasehold interests (and related deposits) relating to, and
tangible personal property (other than pharmacy equipment and
supplies if specified by the Buyer) located at, the Retained
Facilities. The Buyer will assume no liabilities of the Seller
other than liabilities and obligations under real property
leases, equipment and other personal property leases and
maintenance and other contracts relating to the Transferred
Facilities, purchase orders relating to inventory and supplies
purchased in the ordinary course of business, and liabilities and
obligations under contracts that the Buyer requests be assigned
to it. The Assets will be sold "as is, where is and with all
faults."
(b) The Buyer shall make an offer of employment to
each employee who is employed at a Transferred Facility on terms
substantially the same as those under which such employee
currently is employed by the Seller. Prior to the end of the
Inspection Period contemplated by paragraph 5(a), the Buyer shall
notify the Seller in writing of the identity of those employees
of Seller who are employed at a Retained Facility to whom Buyer
intends to offer employment upon consummation of the transaction
contemplated herein. The Retained Facilities will continue to
operate during a period to be agreed upon by the Buyer and
Transworld, not to exceed 60 days (the "Transition Period"). The
Buyer and Transworld will enter into a mutually satisfactory
arrangement under which the Buyer will operate the Retained
Facilities during the Transition Period, with costs to be
allocated between the Buyer and the Seller as they may mutually
agree. Any costs incurred in disposing of assets not acquired by
the Buyer and in releasing employees who are employed at a
Retained Facility and are not retained by the Buyer shall be at
the Seller's expense.
(2) (a) The total purchase price for the Assets shall be
$40 million, payable by the Buyer as follows:
(i) $30 million in cash, payable to the Seller at
the closing;
(ii) $10 million in cash, payable into escrow at
the closing (the "Receivables Escrow").
(b) Transworld will guaranty that the Buyer will
collect at least $20 million from the receivables portion of the
Assets within 12 months after the closing. The Receivables
Escrow will secure Transworld's guaranty. After the Buyer has
collected $10 million from the receivables, an amount equal to
100% of any further cash collected on the receivables shall be
released to the Seller from the Receivables Escrow until the
Seller shall have received the entire amount in the Receivables
Escrow. After six months, any amount remaining in the
Receivables Escrow will be released to the Buyer, and Transworld
will be required to pay to the Buyer the amount, if any (the
"Payment Amount"), by which $20 million exceeds the sum of (i)
the aggregate collections on the receivables portion of the
Assets and (ii) the amount released to the Buyer from the
Receivables Escrow. Thereafter, until the first anniversary of
the closing, the Buyer will be obligated to pay over to the
Seller 100% of cash collected on the receivables portion of the
Assets until the Seller has received an amount equal to the sum
of (x) the Payment Amount and (y) the amount released to the
Buyer from the Receivables Escrow.
Amounts payable under this paragraph 2(b) shall be adjusted
appropriately to reflect any change in the amounts of all Assets
shown on the closing date balance sheet of the Seller (other than
goodwill and net improvements and equipment located at the
Retained Facilities, and excluding changes that result from
depreciation, amortization and writedowns of net improvements and
equipment and accounting adjustments made after June 30, 1997
that relate to a period prior to June 30, 1997) as compared to
the values shown therefor on the Seller's June 30, 1997 balance
sheet.
Prior to disbursements, collections will be reconciled by
the Buyer to the accounts receivable portion of the Assets. The
Buyer will use all commercially reasonable efforts to collect the
accounts receivable within six months following the closing.
3. The Buyer and Transworld shall negotiate in good faith
toward the execution of a mutually acceptable definitive
acquisition agreement containing terms consistent with the terms
set forth herein and such other customary terms, conditions,
representations, warranties, covenants and indemnities as are
appropriate, desirable or necessary to a transaction of the type
herein contemplated (it being understood, however, that (i) the
Assets will be sold "as is, where is and with all faults", free
of liens and encumbrances and (ii) the Buyer and the Seller will
be jointly responsible for obtaining all licenses and permits
necessary to conduct the business and all consents and approvals
of governmental agencies and third parties necessary to transfer
the Assets to the Buyer). It is the Buyer's intention to
commence the preparation of definitive documentation and
preparations for due diligence promptly upon receipt of this
letter executed by Transworld. The parties agree to proceed in
good faith to close the transaction contemplated hereby on or
before September 17, 1997.
4. The Seller and Transworld shall agree, as part of the
transaction, not to engage in any activity in the United States
which directly competes with the business being acquired in the
area of mental illness, transplant, and infertility services, for
a period of three years subsequent to the closing date; provided,
however, that the foregoing shall not apply to any companies or
businesses acquired by Transworld so long as the activities that
are competitive are not the primary line of business of such
acquired companies or businesses.
5. (a) In addition to the other conditions set forth
herein, the Buyer's obligation to proceed is specifically
contingent upon the completion of financial, business and legal
"due diligence" investigations by Counsel, the Buyer, their
advisors and other retained professionals and consultants with
respect to the assets of the Seller to be acquired, the results
of which investigations shall be satisfactory to the Buyer. The
Buyer shall have until September 3, 1997 (the "Inspection
Period") within which to complete its due diligence
investigations, provided that such Inspection Period shall
automatically be extended by the parties for seven days so long
as the Buyer shall have provided Transworld on or before
September 3, 1997 with a letter stating that, as of the date of
the letter, the Buyer has not discovered any basis for not
continuing with the transactions contemplated by this letter. It
is the intention of the Seller and the Buyer that the Buyer's due
diligence investigations be completed prior to entering into a
definitive acquisition agreement. If, during the course of or at
the conclusion of the Inspection Period, the Buyer determines
that there are any facts, conditions or other matters relative to
the Seller's assets, financial condition, results of operations
or business that are unacceptable to the Buyer, the Buyer may
terminate this letter by written notice given to Transworld on or
before September 3, 1997 (or, if the Inspection Period is
extended, September 10, 1997). Unless such date is extended by
written agreement, the "due diligence" condition set forth herein
shall be deemed to have been waived by Counsel and the Buyer if
the Buyer has not given such written notice of termination on or
before September 3, 1997 (or, if the Inspection Period is
extended, September 10, 1997).
(b) In addition to the other conditions set forth
herein, the obligation of Transworld and the Seller to proceed is
specifically contingent upon the requirement that the lenders
(the "Banks") party to the Credit Agreement, dated as of July 31,
1996, as amended (the "Credit Agreement"), among Transworld, the
Banks, and Bankers Trust Company, as agent, shall have consented
to the merger (the "Merger") contemplated by the Agreement and
Plan of Merger, dated as of November 13, 1996, as amended, among
Transworld, IMH Acquisition Corp. and Health Management, Inc.
(the "Merger Agreement") and to the transactions contemplated
hereby and shall have agreed to amendments to the Credit
Agreement in order to permit the Merger and the transactions
contemplated hereby, all in the sole and absolute discretion of
such Banks.
6. Prior to the closing:
(i) the parties shall have received all material
approvals necessary for the consummation of the
proposed transaction from all applicable
governmental and regulatory authorities and all
material approvals and consents of any third-party
necessary for the consummation of the proposed
transaction (it being agreed, however, that (i)
the Buyer and the Seller will be jointly
responsible for obtaining any approvals or
consents necessary to transfer the Assets to the
Buyer and (ii) obtaining consents and approvals to
the transfer of payor/provider contracts and
leases will not be a condition of the closing);
(ii) there shall be no material adverse change in the
business, financial condition, results of
operations, assets or liabilities of the Seller
(it being agreed that losses incurred in the
ordinary course of business not in excess of $2
million per month and any contemplated government
action with regard to clozaril shall not be
considered materially adverse); and
(iii) either of the following shall have been satisfied:
(A) subject to the satisfaction of the condition set
forth in paragraph 5 (b), Transworld shall have
acquired the remaining equity securities of the
Seller not presently owned by Transworld in
accordance with the Merger Agreement (all
conditions to which shall have been satisfied by
the Seller); or
(B) (i) counsel to the Seller and Transworld shall
have provided to the Buyer not later than
September 3, 1997, an opinion in form and
substance satisfactory to the Buyer and its
counsel (in their sole discretion, such discretion
not to be unreasonably exercised) to the effect
that substantially all of the Assets may be sold
to the Buyer without the approval of the
shareholders of the Seller and (ii) Transworld
shall have agreed to indemnify the Buyer, its
affiliates, officers, directors and shareholders
against any and all losses, claims or damages as a
result of (x) any claim or action by any person
(other than a shareholder or creditor of Counsel,
the Buyer or its affiliates) arising out of, or in
connection with, this subparagraph 6(iii)(B) or
consummating the transaction in accordance with
this subparagraph 6(iii)(B) or (y) the failure to
comply with bulk sales laws.
7. This letter is executed upon the assumption that the
financial and business information furnished with respect to the
Seller in connection with the negotiations to date is accurate.
8. Each party shall furnish to the other advance copies of
any press release which it proposes to make concerning the
proposed transaction, and to give the other a reasonable
opportunity to comment thereon.
9. If the definitive agreement contemplated by this
agreement has not been executed by both the Seller and Transworld
by September 30, 1997, despite Buyer's willingness to do so,
Transworld shall reimburse the Buyer for the Buyer's actual and
documented third party costs and expenses.
10. Each party shall bear its own expenses incurred in
connection with the proposed transaction and neither party shall
be responsible for any expenses incurred by the other party
(except as provided for in paragraph 9 above). The parties have
not engaged the services of any finder, broker or any other party
acting in a similar capacity in connection with the transaction
contemplated herein.
11. In the event that the Buyer or any of its affiliates,
officers, directors or shareholders (each, an "Indemnitee")
suffers any loss, claim or damage as a result of any claim by
any shareholder or creditor of the Seller or Transworld (acting
in its capacity as such), including any claim by or through the
Seller or Transworld which is in the nature of a shareholder
derivative suit, that such person has suffered any damage as a
result of the execution of this agreement by the parties hereto
or by the completion or proposed completion of the transactions
contemplated hereby, Transworld shall indemnify and hold harmless
each such Indemnitee against any such loss, claim or damage,
other than any loss, claim or damage arising out of an
Indemnitee's breach of or failure to perform its obligations
hereunder or under the definitive agreement to be entered into
among the parties or an Indemnitee's failure to pay or perform an
assumed liability or obligation. Each Indemnitee shall give
Transworld prompt written notice of any claim, and Transworld
shall be entitled to assume the defense thereof. If Transworld
fails to assume the defense within a reasonable period of time,
the Buyer may assume the defense and the reasonable fees of its
counsel (but in no event more than one counsel for all
Indemnitees) will be covered by the foregoing indemnity. No claim
shall be compromised or settled by any Indemnitee without the
prior written consent of Transworld (which consent will not
unreasonably be withheld). The obligation of Transworld to
indemnify the Indemnities shall survive any termination of this
agreement and shall also be made a part of the definitive
agreement to be entered into by the parties.
12. The parties hereto acknowledge that this letter
constitutes an agreement to acquire substantially all the assets,
business and operations of the Seller and to work diligently
toward the consummation of this transaction in accordance with
the terms outlined herein. This agreement shall be governed by
and construed in accordance with the laws of the State of
Delaware, without giving effect to principles of conflict of
laws.
13. Transworld agrees that it will not, nor will Transworld
permit any of its officers, directors, agents or affiliates to,
provide information to, or have contact with, other parties with
regard to any merger, sale of all or substantially all of the
assets or other business combination with respect to the Seller
through September 17, 1997 or, if this letter is terminated by
Buyer pursuant to paragraph 5(a), then the date of such
termination.
14. The effectiveness of this letter shall be subject to
the receipt by Transworld of the written consent to this letter
by the lenders (the "Banks") party to the Credit Agreement, dated
as of July 31, 1996, as amended, among Transworld, the Banks and
Bankers Trust Company, as agent. If the written consent of the
Banks has not been obtained on or prior to September 3, 1997 (or,
if the Inspection Period is extended pursuant to Paragraph 5(a),
then September 10, 1997), then at any time thereafter Transworld
may, in its sole discretion, terminate this letter (in which case
this letter shall be null and void ab initio); provided, however,
that paragraph 9 shall survive any such termination. Transworld
will use its best efforts to obtain such written consent of the
Banks.
15. This letter shall inure solely to the benefit of each
party hereto, and nothing in this letter, express or implied, is
intended to confer upon any other person any rights or remedies
of any nature whatsoever under this letter.
16. Transworld shall use its best efforts to cause the
Seller to execute a letter with Counsel in the form of the letter
attached hereto as Exhibit A by not later than 11:00 p.m., New
York time, on August 14, 1997. If the Seller shall fail to
execute such letter within the period specified, Counsel may, in
its sole discretion, terminate this letter (in which case this
letter shall be null and void ab initio).<PAGE>
If the foregoing correctly sets forth our mutual agreement,
please sign the enclosed counterpart original of this letter and
return it to us by ___ p.m. on August ____, 1997.
Very truly yours,
COUNSEL CORPORATION
By: /s/ Alan Silber
ACCEPTED AND AGREED TO:
TRANSWORLD HEALTHCARE, INC.
By: /s/ Timothy M. Aitken
<PAGE>
Exhibit A
Counsel Corporation
The Exchange Tower
Suite 1300
2 First Canadian Place
Toronto, Ontario M5X IE3
Canada
August 13, 1997
Health Management, Inc.
1371-A Abbott Court
Buffalo Grove, IL 60089
Gentlemen:
In order to induce Counsel Corporation ("Counsel") to expend
the effort and expense to conduct a due diligence examination of
Health Management, Inc. ("HMI"), please confirm your agreement
with the following by signing below:
1. HMI shall give Counsel and its accountants, counsel and
other representatives full and free access to HMI's assets,
properties, customers, suppliers, books, accounting, financial
and statistical records, corporate records, tax returns and other
business files of HMI and such other documents and information
relating to the business and operations of HMI as may be deemed
necessary for the consummation of the proposed transaction and
shall permit Counsel to conduct an appropriate investigation into
HMI's financial position and operations. HMI shall cooperate
fully in making its officers and personnel available to Counsel,
and its accountants, counsel and other representatives. Counsel
agrees that (except as may be required by law), Counsel will not
disclose or use, and Counsel will cause its representatives not
to disclose or use, any confidential information with respect to
HMI, furnished, or to be furnished, by HMI in connection herewith
at any time or in any manner other than in connection with its
evaluation of the transaction contemplated herein without the
prior written consent of HMI, unless the same is or shall become
available to it through non-confidential means or is or shall
become generally available to the public other than by breach of
this letter by Counsel or its representatives. The letter
agreement dated October 28, 1996 between Counsel and HMI shall
apply to any information disclosed to Counsel or its
representatives pursuant to this letter. In addition, the
provisions of Section 6 of such letter ("No Solicitation") shall
apply as if the date of such letter agreement was the date
hereof.
2. HMI shall not, nor will HMI permit any of its officers,
directors, agents or affiliates to, provide information to, or
have contact with, other parties (other than Transworld
HealthCare, Inc. ("Transworld")) with regard to any merger, sale
of all or substantially all of the assets or other business
combination through September 30, 1997 (or such earlier date
after September 3, 1997 as Transworld notifies HMI in writing).
3. Prior to the closing date of the transactions
contemplated in the letter agreement dated August 13, 1997
between Counsel and Transworld, HMI shall carry on its business
diligently and in substantially the same manner as such business
has been operated prior to the date hereof.
Very truly yours,
COUNSEL CORPORATION
By:______________________________
ACCEPTED AND AGREED TO:
HEALTH MANAGEMENT, INC.
By:________________________________
