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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) July 3, 1997
Transworld HealthCare, Inc.
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(Exact name of Registrant as specified in its charter)
New York
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(State or other jurisdiction of incorporation)
1-11570 13-3098275
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(Commission File Number) (I.R.S. Employer Identification No.)
555 Madison Avenue, New York, New York 10022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 750-0064
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 3, 1997, Transworld Healthcare (UK) Limited ("Transworld UK"),
a wholly-owned subsidiary of Transworld HealthCare, Inc. ("Transworld")
acquired all of the issued and outstanding shares of Allied Medicare
Limited ("Allied") pursuant to an Agreement for Sale and Purchase dated
July 1, 1997 between Transworld UK and Vanessa Rosamunde Wynn Griffiths
and David Wynn Griffiths (the "Agreement") for a purchase price of 36.2
million pounds sterling, subject to adjustment as provided in the
Agreement. The purchase price for the acquisition of Allied was paid
using funds borrowed under Transworld's existing senior secured credit
facility.
Allied provides nursing and care giving services to homecare patients
in the United Kingdom.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired
The required financial statements are not included in this filing.
Transworld will file such required statements within the time period
required by the rules and regulations of the Securities and Exchange
Commission.
(b) Pro Forma Financial Information.
The required pro forma financials are not included in this filing.
Transworld will file such required pro forma statements within the time
period required by the rules and regulations of the Securities and
Exchange Commission.
(c) Exhibits.
Agreement for Sale and Purchase of Allied Medicare Limited between
Transworld Healthcare (UK) Limited and Vanessa Rosamunde Wynn Griffiths
and David Wynn Griffiths dated July 1, 1997 is filed as Exhibit 2.1
hereto.
Certain statements contained herein are forward-looking statements that
have been made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements
involve known and unknown risks and uncertainties which may cause the
actual results in the future periods or plans for future periods to
differ materially from those described herein as anticipated, believed
or estimated.
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SIGNATURES
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.
Transworld HealthCare, Inc.
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(Registrant)
Date: July 3, 1997 By: /s/ Wayne A. Palladino
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Wayne A. Palladino
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
No. Description
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Ex-2.1 Agreement for Sale and Purchase of Allied Medicare Limited between
Transworld Healthcare (UK) Limited and Vanessa Rosamunde Wynn Griffiths
and David Wynn Griffiths dated July 1, 1997.
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DATED July 1, 1997
VANESSA ROSAMUNDE WYNN-GRIFFITHS
AND DAVID WYNN GRIFFITHS
- AND -
TRANSWORLD HEALTHCARE (UK) LIMITED
AGREEMENT
FOR SALE AND PURCHASE OF
ALLIED MEDICARE LIMITED
abcde
3 COLMORE CIRCUS
BIRMINGHAM
B4 6BH
TEL: 0121 200 1050
FAX: 0121 626 1040
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CONTENTS
CLAUSE
1 Interpretation
2 Sale and Purchase of the Shares
3 Consideration
4 Completion and Net Asset Adjustment
5 Warranties
6 Limitation on Liability
7 The Buyer's Undertakings
8 Tax Covenant
9 Restrictive Covenant
10 Announcements
11 Notices
12 Entire Agreement
13 Effect of Completion
14 Costs
15 Assignment
16 Further Assurance
17 Waiver
18 Invalidity
19 Law and Jurisdiction
SCHEDULES
1 Sellers' Names, Address and Shareholdings
2 The Company
3 Properties
4 Warranties
5 Intellectual Property
6 Tax Covenant
7 Escrow Account
8 Pensions
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AGREED FORM DOCUMENTS
1 Disclosure Letter
2 Resignation letter of auditors
3 Legal opinion letter
4 Escrow Account Instruction Letter
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THIS AGREEMENT is made on July 1, 1997
BETWEEN:-
(1) VANESSA ROSAMUNDE WYNN-GRIFFITHS of Carrisbrooke, Sleepy Shore Lane,
Rainbow Bay, Eleuthera, Bahamas and DAVID WYNN GRIFFITHS of
Carrisbrooke, Sleepy Shore Lane, Rainbow Bay, Eleuthera, Bahamas (the
"SELLERS")
(2) TRANSWORLD HEALTHCARE (UK) LIMITED (No. 3370146 ) whose registered
office is at 5 Appold Street, London, EC2A 2HA (the "BUYER").
IT IS AGREED as follows:-
1 INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires:-
"ACCOUNTING STANDARDS" accounting conventions, standards, principles and
practices generally accepted in the United Kingdom
at the Accounts Date
"ACCOUNTS" means the audited balance sheet of the Company as
at, and the audited profit and loss account of the
Company and the audited consolidated profit and
loss account of the Company for the financial
period ended on, the Accounts Date, together with
the notes and directors' report and auditors'
report
"ACCOUNTS DATE" means 31 March 1997
"ACT" means the Companies Act 1985 as amended by the
Companies Act 1989
"BUSINESS DAY" means 9am to 5pm on any day (other than a
Saturday) on which clearing banks in the City of
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London are open for the transaction of normal
sterling banking business
"BUYER'S GROUP" means the Buyer, each of its subsidiaries, its
holding company and each subsidiary of its holding
company
"BUYER'S SOLICITORS" means Ashurst Morris Crisp of Broadwalk House, 5
Appold Street, London, EC2A 5HA
"COMPANY" means Allied Medicare Limited details of which are
set out in Schedule 2
"COMPLETION" means completion of the sale and purchase of
the Shares in accordance with this Agreement
"COMPLETION DATE" means the date of Completion
"CONNECTED PERSON" means any child of the Sellers, any corporation
controlled by either of the Sellers and any trust,
discretionary or otherwise, including any pension
trust or any other pension fund or scheme, in each
case of which either of the Sellers or any child
of the Sellers are beneficiaries or potential
beneficiaries
"CONSIDERATION" means the consideration for the purchase of the
Shares set out in Clause 3
"DISCLOSURE LETTER" means the letter (together with all the documents
attached to it) disclosing certain exceptions to
the Warranties in the agreed form from the Sellers
to the Buyer executed and delivered to the Buyer
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immediately prior to the execution of this
Agreement
"EMPLOYEE" means a director or officer (whether or not
employed by the Company) or employee of the
Company
"ENCUMBRANCE" means any mortgage, charge (whether fixed or
floating), pledge, lien, security interest or
other third party right or interest (whether legal
or equitable) over or in respect of the relevant
asset, security or right
"ESCROW ACCOUNT" means the separately designated interest bearing
deposit account in the joint names of the Buyer's
Solicitors and the Seller's Solicitors
"ESCROW ACCOUNT INSTRUCTION means the letter in the agreed form from the Buyer
LETTER" and the Sellers to the Buyer's Solicitors and the
Sellers' Solicitors
"ESCROW AMOUNT" means a sum equal to 10% of the Consideration
(being part of the Consideration) plus any
interest accruing on it from time to time to be
held in the Escrow Account
"ICTA" means the Income and Corporation Taxes Act 1988
"INTELLECTUAL PROPERTY" means all trade marks, service marks, applications
for any of the foregoing, unregistered trade marks
and service marks, trade and business names
including rights in any get-up or trade dress,
copyright (including rights in computer software)
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and confidential information owned by the Company
"PENSION SCHEMES" means the Allied Medicare Limited Pension Scheme
established on 13 February 1989 (referred to
separately as "the Self-Administered Pension
Scheme") and the Equitable Life Individual Pension
Plan (Plan number IPP0006849)
"PROPERTIES" means the properties details of which are set out
in Schedule 3 and references to a "PROPERTY"
include a reference to each of the individual
Properties
"RTPA" means the Restrictive Trade Practices Acts 1976
and 1977
"SELLERS' SOLICITORS" means Pinsent Curtis of 3 Colmore Circus,
Birmingham, B4 6BH
"SHARES" means the 86,654 fully paid ordinary shares of
pound sterling 1 each of the Company comprising
the whole of the issued share capital of the
Company
"TAXATION" has the meaning given in the Tax Covenant
"TAXATION AUTHORITY" has the meaning given in the Tax Covenant
"TAX COVENANT" means the tax covenant contained in Schedule 6
"TCGA" means the Taxation of Chargeable Gains Act 1992
"VAT" means, in the United Kingdom, value added tax
and, elsewhere, any equivalent tax
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"VATA" means the Value Added Tax Act 1994
"WARRANTIES" means the warranties contained in Schedule 4 and
references to a "WARRANTY" shall be construed
accordingly
1.2 In this Agreement, unless the context otherwise requires, reference
to:-
1.2.1 a Clause or Schedule is a reference to a clause of or
schedule to this Agreement;
1.2.2 a document "IN THE AGREED FORM" is a reference to a
document in the form approved, and for the purposes of
identification signed, by or on behalf of the Buyer and
the Sellers;
1.2.3 a "PERSON" includes a reference to an individual,
partnership, unincorporated association or body
corporate;
1.2.4 a "SUBSIDIARY", "HOLDING COMPANY" and "BODY CORPORATE"
has the respective meaning set out in sections 736 and
740 of the Act;
1.2.5 a "COMPANY" has the meaning set out in section 735 of
the Act;
1.2.6 a "SUBSIDIARY UNDERTAKING" or a "PARENT UNDERTAKING" has
the meaning set out in sections 258 and 259 of the Act;
1.2.7 a "GROUP UNDERTAKING" has the meaning set out in section
259 of the Act; and
1.2.8 a "CONNECTED PERSON" is a reference to a person
connected with another within the meaning of section 839
of ICTA.
1.3 The Schedules form part of this Agreement and shall be interpreted or
construed as though they were set out in this Agreement.
1.4 The headings to the Clauses, Schedules and paragraphs of the
Schedules are for convenience only and shall not affect the
interpretation of this Agreement.
1.5 All representations, warranties, undertakings, indemnities, consents,
agreements and obligations given or entered into by more than one
person in this Agreement are given jointly and severally except where
the context otherwise requires.
1.6 Any statement which refers to the knowledge or knowledge and belief
of the Sellers or so far as the Sellers are aware or any similar
expression shall be deemed to include an additional statement that it
has been made after reasonable enquiry only of David Johnson, Peter
Nuttall and any other relevant employee of the Company. Each of the
Sellers shall be deemed to have the knowledge and belief of the
other.
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2 SALE AND PURCHASE OF THE SHARES
2.1 Each Seller shall sell those of the Shares which are set opposite his
or her name in Schedule 1 with full title guarantee and the Buyer
agrees to buy the Shares in each case free from Encumbrances and
together with all rights now or hereafter attaching to them and all
dividends or other distributions declared after the Accounts Date in
respect of the Shares.
2.2 Each Seller waives all rights of pre-emption over any of the Shares
conferred either by the Articles of Association of the Company or in
any other way.
2.3 The Buyer shall not be obliged to complete the purchase of any of the
Shares unless the purchase of all the Shares is completed
simultaneously.
3 CONSIDERATION
3.1 The consideration for the purchase of the Shares is pound
sterling 36,200,000 (thirty six million two hundred thousand pounds),
to be satisfied in US dollars on Completion at an exchange rate of
US$1.6625 = pound sterling 1, which shall be divisible among the
Sellers as set out in Schedule 1 but the Buyer shall not be concerned
to see to its division amongst the Sellers.
3.2 The Consideration is payable by the Buyer at Completion by
telegraphic transfer in accordance with clause 4.4.
4 COMPLETION AND NET ASSET ADJUSTMENT
4.1 Completion shall take place during UK banking hours on Thursday 3
July 1997 when all the business referred to in Clauses 4.2 to 4.8
shall be transacted.
4.2 At Completion the Sellers shall deliver to the Buyer:-
4.2.1 duly executed transfers of the Shares to the Buyer or as
it directs together with the share certificates for all
of the Shares (or an indemnity in a form satisfactory to
the Buyer in the case of any missing certificate);
4.2.2 a letter of resignation from the auditors of the Company
in the agreed form;
4.2.3 the statutory books of the Company, its common seal,
Certificate of Incorporation and Certificate of
Incorporation on Change of Name;
4.2.4 such of the title deeds to the Properties which are in
the possession or under the control of the Company;
4.2.5 bank statements together with certificates from Lloyds
Bank PLC certifying the current and deposit account
balances of the Company at the close of business on the
second Business Day preceding Completion;
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4.2.6 a release in the agreed form from each of the Sellers
releasing the Company from any liability to the relevant
Seller and any Connected Person;
4.2.7 a letter of legal opinion in the agreed form in respect
of the capacity of the Sellers to enter into this
Agreement;
4.2.8 a signed copy of the Escrow Account Instruction Letter;
and
4.2.9 subject to the Buyer complying with Clause 4.4.3, duly
executed releases of the charges referred to in Schedule
2 in favour of the Company from Lloyds Bank PLC and
Stafford Railway Building Society.
4.3 At Completion the Sellers shall procure that a board meeting of the
Company is held at which the directors:- 4.3.1 approve the
registration of the transfers in respect of the Shares referred to in
Clause 4.2.1 (subject only to due stamping);
4.3.2 appoint the persons nominated by the Buyer as directors
of the Company;
4.3.3 accept the resignation referred to in Clause 4.2.2 and
appoint auditors of the Company as the Buyer directs;
4.3.4 revoke all existing authorities to bankers regarding the
operation of the Company's bank accounts and give
authority in favour of the persons nominated by the
Buyer to operate such accounts; and
4.3.5 change the Company's accounting reference date as the
Buyer directs.
4.4 At Completion the Buyer shall:-
4.4.1 pay the Consideration less the Escrow Amount to the
Sellers' Solicitors by telegraphic transfer to Pinsent
Curtis US Dollar Account Number 66623111, Barclays Bank
PLC, 15 Colmore Row, Birmingham, B3 2BY, Sort Code
20-07-71, who are irrevocably authorised by the Sellers
to accept the same, and whose receipt shall be an
absolute discharge to the Buyer of its obligation to pay
that part of the Consideration;
4.4.2 pay the Escrow Amount by telegraphic transfer into the
Escrow Account; and
4.4.3 advance to the Company such sum not exceeding pound
sterling 800,000 in aggregate as is necessary to enable
the Company to procure the discharge on Completion of
the charges referred to in Schedule 2.
4.5 The Escrow Account shall be dealt with in accordance with Schedule 7
(Escrow Account).
4.6 At Completion the Buyer shall deliver to the Sellers a signed copy of
the Escrow Account Instruction Letter.
4.7 At Completion, the Sellers shall:-
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4.7.1 repay, and shall procure that any Connected Person shall
repay all amounts owed by them to the Company whether
due for payment or not;
4.7.2 procure that the Company shall repay all amounts owed by
it to the Sellers or any Connected Person whether due
for payment or not; and
4.7.3 deliver to the Buyer a written schedule of the payments
to be made pursuant to Clauses 4.7.1 and 4.7.2.
4.8 At Completion the Buyer will fully discharge the fees and costs of
Pannell Kerr Forster in connection with their due diligence report
prepared in relation to the Company.
4.9 For the purpose of this Agreement:-
4.9.1 the "ADJUSTED NET ASSET VALUE" shall mean the amount by
which the aggregate of the Adjusted Assets exceeds the
aggregate of the Adjusted Liabilities;
4.9.2 the "ADJUSTED ASSETS" shall mean the assets of the
Company as at the Relevant Date;
4.9.3 the "ADJUSTED LIABILITIES" shall mean the liabilities
(whether current or not) of the Company as at the
Relevant Date but excluding any liability of the Company
to Mr Nuttall and Mr Johnson of up to pound
sterling 456,000 (including related employer's national
insurance contributions) relating to or arising out of
the sale of the Company; and
4.9.4 the "RELEVANT DATE" shall mean Sunday 22 June 1997.
Any advances made pursuant to Clause 4.4.3 shall be ignored in
calculating the Adjusted Net Asset Value.
4.10 For the purpose of determining the Adjusted Net Asset Value the Buyer
shall cause the Company to co-operate to enable Pannell Kerr Forster
("PKF") to prepare, as soon as practicable following Completion but
in any event within 45 days after the Completion Date, a statement of
the Adjusted Net Asset Value (the "NET ASSET STATEMENT"). The Net
Asset Statement shall be prepared in accordance with generally
accepted accounting principles and financial reporting standards in
the United Kingdom, and otherwise on the basis of the accounting
principles, practices and methods used in the preparation of the
Accounts consistently applied but shall not reappraise the value of
any of the fixed assets save that Lindum House and The Larches shall
be valued at pound sterling 245,000 and pound sterling 71,000
respectively or, if either or both of them are sold prior to the end
of the NAV Agreement Period (as defined below) the value shall, if
less, be the net proceeds of sale (net of any tax arising by virtue
of such sale and after legal and estate agents fees and expenses) of
the relevant property or properties.
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4.11 Forthwith following the preparation of the Net Asset Statement the
Sellers shall procure that PKF shall deliver a copy to the Buyer and
the Sellers. The Buyer and the Sellers shall have a period of 28 days
from receipt of such copies (the "NAV AGREEMENT PERIOD") in which to
review and agree or dispute the Net Asset Statement and the Buyer and
its accountants shall be given all reasonable access to PKF's working
papers for the purpose of such review.
4.12 The Net Asset Statement shall in the absence of the service of a
notice within the NAV Agreement Period by either party on the other
disputing the amount so determined be deemed to constitute the final
and binding agreement between the Sellers and the Buyer as to the
amount thereof.
4.13 In the event that the Net Asset Statement has not been agreed by
expiry of the NAV Agreement Period, the determination of the Net
Asset Statement shall be referred to an independent firm of chartered
accountants agreed between the Buyer and the Sellers or, failing
agreement within 14 days of the expiry of the NAV Agreement Period,
determined by the President for the time being of the Institute of
Chartered Accountants in England and Wales. In appointing any such
independent firm of chartered accountants, the Buyer and the Sellers
shall have the right to make representations to such independent firm
of chartered accountants as to the determination of the Net Asset
Statement. Any independent firm of chartered accountants appointed
pursuant to this Clause 4.13 shall act as experts and not as
arbitrators and their certificate shall (in the absence of manifest
error) be final and binding on the Buyer and the Sellers and the
costs of any independent firm of chartered accountants appointed
pursuant to this Clause 4.13 shall be borne between the parties as it
shall determine, or in the absence of any such determination, equally
between the parties.
4.14 The Sellers undertake to pay to the Buyer without any set-off or
counterclaim and free and clear of any deductions or withholdings
(save for any required by law), in cash within 7 days of the Net
Asset Statement being agreed or determined in accordance with Clause
4.13, the amount, if any, by which the Adjusted Net Asset Value is
less than pound sterling 3,240,000.
4.15 The Buyer undertakes to pay to the Sellers without any set-off or
counterclaim and free and clear of any deductions or withholdings
(save for any required by law), in cash within 7 days of the Net
Asset Statement being agreed or determined in accordance with Clause
4.13, the amount, if any, by which the Adjusted Net Asset Value is
more than pound sterling 3,340,000.
4.16 The Buyer undertakes to procure payment by the Company within one
month after Completion to David Johnson and Peter Nuttall of any then
remaining unpaid balances due to them in respect of the respective
payments of pound sterling 350,000 and pound sterling 106,500
referred to in paragraph 13.6 of Part 4 of the Disclosure Letter.
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5 WARRANTIES
5.1 The Sellers warrant to the Buyer in the terms of the Warranties.
5.2 The Warranties are subject to the provisions of Clause 6 (Limitation
on Liability). The Buyer shall not be entitled to bring a claim in
relation to a breach of Warranty in respect of any matter which is
fairly disclosed in the Disclosure Letter.
5.3 No information supplied by, or on behalf of, the Company to one or
more of the Sellers or their advisers in connection with the Company,
the Warranties, the Disclosure Letter or otherwise constitutes a
representation or warranty or guarantee as to its accuracy to the
Sellers by the Company and each Seller waives all claims (save, in
the case of the employees of the Company, in the event of fraud or
wilful non disclosure) which he or she may have against the employees
of the Company or the Company and undertakes to the Buyer (for itself
and as trustee for the Company and its directors or employees) that
(save in the event of such fraud or wilful non disclosure) he or she
will not bring any claim which he or she might otherwise have against
such person.
6 LIMITATION ON LIABILITY
6.1 The Sellers shall not be liable for breach of the Warranties or under
the Tax Covenant in respect of any claim unless notice of the claim
(specifying in reasonable detail the event, matter or default giving
rise to the claim and the amount claimed) has been given to the
Sellers in writing before the second anniversary of Completion except
insofar as such claim relates to the Warranties relating to Taxation
or to the Tax Covenant where such notice of the claim must be given
at any time before the sixth anniversary of Completion.
6.2 The Sellers shall not be liable for breach of the Warranties in
respect of any claim:-
6.2.1 which relates to any single circumstance unless the
liability loss or cost which is the subject matter of
the claim determined or agreed in respect of it when
aggregated with the liability loss or cost determined or
agreed in respect of any other claim which arises from
the same or similar circumstance as such claim exceeds
pound sterling 5,000 (excluding interest and costs); and
6.2.2 unless the aggregate amount of all liabilities losses or
costs which are the subject matter of the claim exceed
one percent of the Consideration in which case the whole
amount shall be capable of being claimed and not merely
the excess and for the avoidance of doubt liabilities
excluded by Clause 6.2.1 above shall also be excluded
for the purposes of this Clause 6.2.2,
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and the Sellers shall not be liable under the Tax Covenant in respect
of any claim unless the aggregate amount of all claims under the Tax
Covenant exceed pound sterling 50,000, in which case the whole amount
shall be capable of being claimed and not merely the excess.
6.3 Any claim for breach of the Warranties shall (if it has not been
previously satisfied, settled or withdrawn) be deemed to have been
withdrawn and shall become fully barred and unenforceable at the
expiration of nine months from the date on which the Buyer gave
notice of such claim in accordance with Clause 6.1, or in the case of
a claim where notice has been served under Clause 6.8 nine months
from the date the contingent or future liability ceases to be
contingent and becomes an actual liability, and the Sellers shall
have no further liability in respect of it unless proceedings in
respect of it have been commenced by being both issued and served on
the Sellers during such nine month period.
6.4 The maximum amount for which each Seller may be liable for all claims
under this Agreement except for any claims pursuant to Clauses 7.1, 9
and 10 and Schedule 8 (including all legal and other professional
fees and expenses of the Buyer or the Company determined or agreed to
be paid by the Sellers) ("Relevant Claims") shall, (except in the
case of fraud) be limited to an amount equal to:-
6.4.1 fifty per cent of the Consideration, in respect of
Relevant Claims notified in writing to the Sellers (in
the case of claims under the Warranties and Tax Covenant
in accordance with Clause 6.1) prior to the first
anniversary of Completion; and
6.4.2 thirty five per cent of the Consideration, in respect of
Relevant Claims notified in writing to the Sellers (in
the case of claims under the Warranties and Tax Covenant
in accordance with Clause 6.1) on or after the first
anniversary of Completion and for the avoidance of doubt
Relevant Claims to which Clause 6.4.1 applies shall be
aggregated with Relevant Claims to which Clause 6.4.2
applied in determining whether the maximum amount of
thirty five per cent of the Consideration has been
reached pursuant to this Clause 6.4.2.
6.5 The Sellers shall have no liability in respect of a claim for breach
of the Warranties to the extent that it would not have arisen but
for:-
6.5.1 legislation not in force at the date of this Agreement;
6.5.2 a change after the date of this Agreement (whether or
not such change is retrospective):-
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(a) in rates of Taxation;
(b) in law;
(c) in published practice of a Taxation Authority; or
(d) in generally accepted accounting practices;
6.5.3 a voluntary act or omission by the Buyer or its officers
and employees or the Company or its officers and
employees after Completion which is outside the ordinary
course of business of the Buyer or the Company (as the
case may be) and which is not pursuant to any legally
binding obligation of the Company existing at
Completion.
6.6 The Sellers shall have no liability in respect of a claim for breach
of the Warranties to the extent that:-
6.6.1 the Company or the Buyer actually recovers any sum under
any policy of insurance (net of reasonable costs of
recovery and any tax payable) and the Buyer undertakes to
the Sellers that it shall, and shall procure that the
Company shall:
(a) use all reasonable endeavours to make such recovery;
and
(b) maintain adequate insurance after Completion;
6.6.2 the liability in question would not have arisen but for:
(a) any claim, disclaimer or election made or notice of
consent given by the Buyer or the Company (as the
case may be) other than one the giving or doing of
which was taken into account in calculating any
provision for Taxation in the Net Asset Statement;
(b) any failure by the Company after Completion to make
any claim election, surrender to disclaimer or give
any notice or do any other thing after Completion,
the making, giving or doing of which was taken into
account in computing any provision or reserve for
Taxation in the Net Asset Statement; or
6.6.3 provision or reserve in respect of the subject matter of
the claim has been made in determining the Adjusted Net
Asset Value.
6.7 In the event of any breach of Warranty relating to any arrangement,
contract or liability between the Company and the Sellers or any
Connected Person and where such breach is remediable by the Sellers
the Buyer shall allow the Sellers the opportunity to remedy such
breach within 30 days of receipt of the written notification before
taking any further proceedings or action in relation to such breach.
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6.8 If any breach of any of the Warranties arises by reason of a
liability of the Company which is a contingent or future liability
when the claim in respect thereof is notified to the Sellers then the
Sellers will not be obliged to make any payment to the Buyer until
such time as the contingent liability ceases to be contingent and
becomes an actual liability.
6.9 The Buyer shall not be entitled to recover from the Sellers more than
once to the extent that it has been reimbursed under this Agreement
for the same loss.
6.10 The Buyer shall procure that if as a result of circumstances giving
rise to a claim under the Warranties any member of the Buyer's Group
is entitled to receive a benefit from a third party that member of
the Buyer's Group shall:
6.10.1 take all reasonable steps to obtain the benefit; and
6.10.2 if the claim under the Warranties to which the benefit
relates has been settled or determined at the time the
benefit is received, the relevant member of the Buyer's
Group shall account to the Sellers for an amount equal to
the lesser of the benefit received (net of tax, if any,
and the reasonable costs of recovery) and the amount paid
by the Sellers pursuant to such settlement or
determination; or
6.10.3 if the claim under the Warranties to which the benefit
relates has not been settled or determined at the time
the benefit is received, the Buyer shall not be entitled
to recover in respect of any such claim under the
Warranties to the extent of the amount of the benefit so
received (net of tax, if any, and the reasonable costs of
recovery)
Provided always that the Buyer shall not be obliged to act in any
manner which might reasonably be expected to prejudice the goodwill
of the business of the Company.
6.11 The Buyer shall procure that if a member of the Buyer's Group becomes
aware of any third party claim or potential claim which will give
rise to a claim under the Warranties, it shall:-
6.11.1 keep the Sellers informed of material development which
could effect the amount which is the subject of a claim
or recovery;
6.11.2 (subject to being fully indemnified and secured by the
Sellers) take such action as the Sellers reasonably
require in relation to the subject matter of the claim
provided that the Buyer shall not be obliged to act in
any manner which might reasonably be expected to
prejudice the goodwill of the business of the Company.
6.12 Nothing in this Agreement restricts the general obligation at law to
mitigate loss.
6.13 Nothing in this Agreement shall be construed as a representation by
the Sellers as to the interpretation or application of any law or
regulation.
13
<PAGE> 17
6.14 The Buyer confirms that the Buyer has not already formulated and does
not presently contemplate making a claim under the Warranties.
6.15 No breach of this Agreement (including the Tax Covenant) shall give
the Buyer the right to rescind this Agreement following Completion.
6.16 Amounts paid by the Sellers in respect of a claim under this
Agreement shall be treated as a reduction of the Consideration.
6.17 The Sellers make no representation and give no warranty or
undertaking to the Buyer save only as and to the extent expressly set
out in this Agreement. The Buyer shall not have any remedy in respect
of any misrepresentation or untrue statement (whether made carelessly
or not) made by or on behalf of the Sellers unless and to the extent
that a claim lies for breach of the Warranties. In particular, the
Sellers disclaim all liability and responsibility for any
representation, warranty, statement, opinion, or information made or
communicated (oral or in writing) to the Buyer including, without
limitation, any representation, warranty, statement, opinion,
information or advice made or communicated to the Buyer by an
officer, director, employee, agent, consultant or representative of
the Company or otherwise made available by or on behalf of the
Sellers. This Clause 6.17 shall not exclude any liability of the
Sellers for fraudulent misrepresentation.
6.18 Without prejudice to and subject to the provisions of clause 6.14, no
information relating to the Company of which the Buyer has knowledge
(actual or constructive) other than that contained in or referred to
in this agreement and/or included in the Disclosure Letter and no
investigation by or on behalf of the Buyer shall prejudice any claim
by the Buyer under the Warranties or reduce any amount recoverable
thereunder.
7 THE BUYER'S UNDERTAKINGS
7.1 Save as may be required by statute or regulatory authority in the
United Kingdom, United States or elsewhere, no party to this
Agreement will, without the prior agreement of the the other party,
divulge to any third party, other than their respective professional
advisers, any information regarding the existence or subject matter
of this Agreement.
7.2 The Buyer acknowledges that the information relating to the affairs
of the Sellers supplied to the Buyer and to the Buyer's professional
advisers is strictly confidential and will not, without the Sellers'
prior written consent, disclose any such information to any other
person, firm or company, unless required in writing to do so by any
governmental authority in the United Kingdom, United States or
elsewhere.
14
<PAGE> 18
7.3 If the sale and purchase contemplated by this Agreement is not
completed on the day contemplated by this Agreement the Buyer will
immediately return to the Sellers and the Sellers' Solicitors all
documents and other data however stored in its possession relating to
the Company which contain confidential or proprietary information and
will not disclose any such information to any other person, firm or
company.
7.4 In relation to pensions the provisions of Schedule 8 (Pensions) shall
apply.
8 TAX COVENANT In relation to Taxation the provisions of Schedule 6
(Tax Covenant) apply.
9 RESTRICTIVE COVENANT
9.1 Each Seller (for himself or herself only) undertakes to the Buyer
that without the written consent of the Buyer:-
9.1.1 for a period of 3 years from Completion he or she will
not in any capacity whatsoever directly or indirectly
carry on or assist in carrying on or be engaged,
concerned or interested in the business of the provision
of nurses and carers to the home care market, nursing
homes and hospitals within the United Kingdom; and
9.1.2 for a period of 3 years from Completion he or she will
not for the purpose of any business supplying products or
services similar to or capable of being used in
substitution for any product or service supplied by the
Company within the 12 months preceding Completion
canvass, solicit or endeavour to entice away from the
Company any person who during the period of one year
prior to Completion has been a customer of the Company or
has purchased or agreed or offered to purchase goods from
the Company or has employed its services or who has been
canvassed by the Company (otherwise than by general
advertising) with a view to becoming a customer of the
Company; and
9.1.3 for a period of 3 years from Completion he or she will
not do any act or thing likely to have the effect of
causing any supplier of or other person in the habit of
dealing with the Company to be unable or unwilling to
deal with the Company either at all or in part or on the
terms on which it had previously dealt with the Company
or likely to have the effect of causing any person having
a contract or arrangement with the Company to breach,
terminate or modify that contract or arrangement or to
exercise any right under it; and
15
<PAGE> 19
9.1.4 for a period of 3 years from Completion he or she will
not employ or offer employment to any person (other than
the Sellers themselves) who is an Employee employed in a
managerial, technical or sales capacity (provided that,
for avoidance of doubt, this shall not include Jean Ball)
nor do any act or thing likely to have the effect of
causing any such Employee to terminate his employment
with the Company whether or not such Employee would
thereby breach his contract of employment; and
9.1.5 he or she will not at any time in connection with any
business carried on by him or her use any Intellectual
Property belonging to the Company including any of the
names or words "Allied Medicare" or any names or words
similar to or likely to be confused with them or use any
distinctive mark, style or logo used by the Company at
the date of this Agreement whether by using such name as
part of a corporate name, trade name or otherwise.
9.2 Nothing in Clause 9.1 shall prevent the Sellers from owning not more
than five per cent of any class of the issued share capital of a
company which is dealt in on a recognised investment exchange (as
defined in the Financial Services Act 1986).
9.3 The Sellers acknowledge that damages would not be an adequate remedy
for breach of these undertakings contained in Clause 9.1.
9.4 Each of the Sellers shall after Completion not make use of or
disclose to any person any information belonging to the Company which
is confidential to it or which amounts to a trade secret of the
Company ("Confidential Information").
9.5 Clause 9.4 does not apply to:-
9.5.1 use or disclosure of Confidential Information required to
be used or disclosed by law or by any regulatory
authority;
9.5.2 disclosure of Confidential Information to an adviser for
the purpose of advising the Sellers in connection with
this Agreement provided that such disclosure is on the
terms set out in Clause 9.4; or
9.5.3 Confidential Information which becomes publicly known
except as a result of any one or more of the Sellers'
breach of Clause 9.4.
10 ANNOUNCEMENTS
10.1 Subject to Clauses 7 and 10.2, neither the Buyer nor the Sellers
shall make or send before or after Completion any announcement,
communication or circular relating to the subject matter
16
<PAGE> 20
of this Agreement unless such party has first obtained the other
party's written consent to the form and text of such announcement,
such consent not to be unreasonably withheld.
10.2 Clause 10.1 does not apply to an announcement, communication or
circular required by law or by any regulatory authority or by any
governmental authority in the United Kingdom, United States or
elsewhere, in which event the party required to make or send such
announcement, communication or circular shall, where practicable,
first consult with the other party as to the content of such
announcement.
11 NOTICES
11.1 Any notice or other communication pursuant to, or in connection with,
this Agreement shall be in writing and delivered personally, or sent
by first class pre-paid recorded delivery post (air mail if
overseas), to the Buyer at its registered office from time to time,
and to each Seller at the address for service given for them in
Clause 19.3 (or to such other address in England as may from time to
time have been notified in writing to the other party in accordance
with this Clause 11).
11.2 Subject to Clause 11.3, any notice or other communication shall be
deemed to have been served:-
11.2.1 if delivered personally, when left at the address
referred to in Clause 11.1;
11.2.2 if sent by pre-paid recorded delivery post (other than
air mail), two days after posting it; or
11.2.3 if sent by air mail, six days after posting it.
11.3 If a notice is given or deemed given at a time or on a date which is
not a Business Day, it shall be deemed to have been given on the next
Business Day.
11.4 A copy of each notice served on the Sellers shall be delivered to
Nicholas Andrew, Chartered Accountant, 10 Orange Street, Haymarket,
London.
12 ENTIRE AGREEMENT
12.1 This Agreement (together with all documents referred to in it or
executed at Completion) constitutes the entire agreement between the
parties in relation to its subject matter and replaces and
extinguishes all prior agreements, undertakings, arrangements or
statements (in whatever form) with respect to such subject matter.
The Buyer acknowledges that it is not entering into this Agreement in
reliance on any warranties, representations or undertakings (whether
express or implied) which are not included in this Agreement.
17
<PAGE> 21
12.2 No variation of this Agreement shall be effective unless made in
writing and signed by or on behalf of the Buyer and the Sellers.
13 EFFECT OF COMPLETION
This Agreement and in particular the Warranties and the Tax Covenant in
so far as any of its provisions remain to be, or are capable of being,
performed or observed, shall remain in full force and effect after
Completion.
14 COSTS
The Buyer and the Sellers shall pay their own costs in relation to the
negotiation, preparation, execution and implementation of this
Agreement and of each document referred to in this Agreement.
15 ASSIGNMENT
15.1 Subject to Clause 15.2, this Agreement is personal to the parties and
neither it nor any of the benefits arising under it may be assigned
without the prior written consent of the other party and neither party
shall purport to assign or transfer the same.
15.2 The Buyer shall be entitled to assign its rights hereunder:-
(i) to any other member of the Buyer's Group provided that if any
such assignee ceases to be a member of the Buyer's Group it
shall be deemed to have reassigned such rights to the Buyer
immediately prior to such cessation; or
(ii) by way of security to any bank or financial institution
lending money or making other banking facilities (of whatever
nature) available to any member of the Buyer's Group for the
purpose of the acquisition of the Shares or any facility agent
(or replacement therefor) appointed pursuant to any such
banking facilities or any person to whom any such person may
assign such rights pursuant to the enforcement of its rights
under such banking facilities,
provided that the liability of the Sellers shall be no greater as a
result of any such assignment than would have been the case had the
Buyer's rights not been assigned.
16 FURTHER ASSURANCE
Following Completion, each of the Sellers shall or any time prior to
the first anniversary of Completion as soon as practicably following a
reasonable written request from the Buyer (each at their own cost) do
or procure the doing of all such acts and execute or procure the
execution
18
<PAGE> 22
of all such documents in a form reasonably satisfactory to the Sellers
provided to the Sellers by the Buyer which are reasonably required and
necessary for the purpose of vesting in the Buyer the full legal and
beneficial title to the Shares and otherwise giving the Buyer the full
benefit of this Agreement.
17 INVALIDITY
Each undertaking contained in Clause 9 is and shall be construed as
separate and severable and if one or more of such undertakings is held
to be against the public interest or unlawful or in any way an
unreasonable restrain of trade or unenforceable in whole or in part,
the remaining undertakings or parts thereof, as appropriate, shall
continue to bind the Sellers. If any undertaking contained in Clause 9
would be void but would be valid if the period of application were
reduced or if some part of the undertaking were deleted, the
undertaking in question shall apply with such modification as may be
necessary to make it valid and effective.
18 WAIVER
18.1 A waiver of any term or provision of this Agreement, or any consent
granted under this Agreement, shall be effective only if given in
writing and signed by the waiving or consenting party and then only in
the instance and for the purpose for which it is given.
18.2 No failure or delay on the part or any part in exercising any right,
power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or of
the exercise of any other right, power or privilege.
18.3 The rights and remedies herein provided are cumulative with and not
exclusive of any rights or remedies provided by law.
19 LAW AND JURISDICTION
19.1 This Agreement (and any dispute, controversy, proceeding or claim of
whatever nature arising out of or in any way relating to this Agreement
or its formation) shall be governed by and construed in accordance with
the laws of England.
19.2 The parties hereby submit to the exclusive jurisdiction of the High
Court of England in relation to any dispute or claim arising out of or
in connection with this Agreement.
19.3 Without prejudice to any other permitted mode of service each of the
Sellers agrees that service of any writ, notice or other document for
the purpose of any proceedings begun in England
19
<PAGE> 23
shall be duly served upon him if delivered personally or sent by
registered post to Pinsent Curtis, 3 Colmore Circus, Birmingham B4 6BH
Ref. GM/90599 - 0003.1/DJH or to such other person and address in
England as the relevant Seller notifies to the Buyer in writing.
EXECUTED AS A DEED by the parties and delivered on the date which first appears
in this Agreement.
20
<PAGE> 24
SCHEDULE 1
SELLER'S NAME, ADDRESS AND SHAREHOLDINGS
<TABLE>
<CAPTION>
(1) (2) (3)
NAMES AND ADDRESS NUMBER OF SHARES PERCENTAGE OF CONSIDERATION
OF SELLER
<S> <C> <C>
Vanessa Rosamunde 43,327 50%
Wynn-Griffiths
Carrisbrooke, Sleepy Shore
Lane,
Rainbow Bay, Eleuthera
Bahamas
David Wynn Griffiths 43,327 50%
Carrisbrooke, Sleepy Shore
Lane,
Rainbow Bay, Eleuthera
Bahamas
</TABLE>
21
<PAGE> 25
SCHEDULE 2
THE COMPANY
<TABLE>
<S> <C>
1 Registered number: 1689856
2 Registered office: Medicare House
Stone Business Park
Brooms Road
Stone
ST15 0TZ
3 Date and place of 6.1.83 England & Wales
incorporation:
4 Authorised share capital: 1,000,000 ordinary shares of pound sterling 1 each
5 Issued share capital: 86,654 ordinary shares of pound sterling 1 each
6 Shareholders:
Shareholder No. of shares
Vanessa Rosamunde 43,327
Wynn-Griffiths
David Wynn Griffiths 43,327
7 Directors: Peter Geoffrey Nuttall
David Ian Johnson
8 Secretary: David Ian Johnson
9 Accounting reference date: 31 March
10 Bank: Lloyds Bank plc, Market Square, Stafford
</TABLE>
22
<PAGE> 26
<TABLE>
<S> <C>
11 Auditors: Dean Statham
Bank Passage
Stafford
ST16 2JS
12 VAT number: 488 7713 83
13 Tax district and reference number: Stafford 679 86790 00269
14 Outstanding Charges Debenture dated 11.11.88 to
secure all sums due to Lloyds
Bank plc - fixed and floating
charges over undertaking and
assets whether present and
future including goodwill,
bookdebts, uncalled capital,
buildings, fixtures, fixed
plant and machinery, including
heritable property and assets
in Scotland.
Debenture dated 28.4.89 to
secure all sums due to Lloyds
Bank plc - fixed and floating
charges over undertaking and
assets whether present or
future including goodwill,
bookdebts, uncalled capital,
buildings, fixtures, fixed
plant and machinery, and
heritable property and assets
in Scotland.
</TABLE>
23
<PAGE> 27
Mortgage dated 18.12.92 to
secure all sums due to Lloyds
Bank plc - freehold property
known as Lindum House, Barnes
Croft, Hilderstone,
Staffordshire together with
the goodwill of the business,
the benefit of all guarantees
and a floating charge over all
moveable plant machinery
implements utensils furniture
and equipment.
Legal charge dated 16.8.93 to
secure all sums due to Lloyds
Bank plc freehold property
known as 13 Bridge Grove, West
Bridgford Nottingham (Title
No. NT31445) together with the
goodwill of the business,
fixtures and fittings and a
floating charge over all
moveable plant machinery
implements utensils furniture
and equipment.
Legal charge dated 28.4.89 to
secure all sums to Lloyds Bank
Plc - charge over flat 2 "the
Larches" 98 Westhall Road,
Warlingham, Surrey together
with all buildings and
fixtures. Floating charge over
all moveable plant, machinery,
implements, utensils,
furniture and equipment, and
the goodwill of the business
Charge dated 13.6.86 to secure
all sums due to Stafford
Railway Building
Society-charge over flat 2
"the Larches" 98 Westhall
Road, Warlingham, Surrey.
24
<PAGE> 28
SCHEDULE 3
BRIEF DETAILS OF LEASEHOLD PROPERTIES
<TABLE>
<CAPTION>
DATE AND PARTIES PROPERTY TITLE
NO.
<S> <C> <C>
1 Lease dated 13 June 1996 between (1) P 4 and 6 London Road N/A
L Rochefort and S J Rochefort (2) the St Leonards on Sea
Company East Sussex
2 Lease dated 18 April 1995 between (1) Suite 205 Crown House N/A
Wasdon Investments Limited (2) Armley Road Leeds
Skillman Contract Services Limited (3) G
Redman and D White
3 Licence dated 28 November 1995 Office 3.2 Churchill House, N/A
between (1) Bondale Limited (2) the 12 Mosley Street,
Company Newcastle
4 Licence dated 2 January 1996 between Suite 108 Beckett House 14 N/A
(1) Northampton Executive Centre Billing Road Northampton
Limited (2) the Company NNA 5AW
5 Lease dated 19 August 1988 between (1) Office C, 57 High Street, N/A
J D Watkins (2) Entre Partitions Limited Yatton, Avon
(3) P G Coleman and D A Dunk
6 Informal Licence 13a Borough High Street, N/A
London SE1 9SE
</TABLE>
<TABLE>
<CAPTION>
DATE AND PARTIES DURATION OF LEASE RENT
<S> <C> <C>
1 Lease dated 13 June 1996 between (1) P 3 years from 24 April 1996 pound sterling 3,120 per annum
L Rochefort and S J Rochefort (2) the although the office has been
Company closed
2 Lease dated 18 April 1995 between (1) 3 years from 18 April 1995 pound sterling 1,600 per annum
Wasdon Investments Limited (2)
Skillman Contract Services Limited (3) G
Redman and D White
3 Licence dated 28 November 1995 Original licence period pound sterling 290 per month
between (1) Bondale Limited (2) the expired. Licence period
Company thought to be extended to 28
November 1997
4 Licence dated 2 January 1996 between Licence terminable on 2 pound sterling 300 per month
(1) Northampton Executive Centre months notice
Limited (2) the Company
5 Lease dated 19 August 1988 between (1) 15 years from 1 pound sterling 3,950 per annum
J D Watkins (2) Entre Partitions Limited August 1986 although this
(3) P G Coleman and D A Dunk office has been closed
6 Informal Licence Licence period thought to be pound sterling 1,250 per month
until September 1998
</TABLE>
25
<PAGE> 29
<TABLE>
<S> <C> <C>
7 Informal arrangement 1st Floor Office N/A
accommodation, 1 Victoria
Street, Liverpool
8 Licence dated 9 November 1995 between First floor accommodation N/A
(1) R P Bowsher (2) the Company 744 Oxford Road, Reading
9 Lease dated 20 May 1996 between (1) 4 Woodlands Close, N/A
Mr & Mrs MacMillan (2) the Company Curridge, Newbury
10 Lease dated 29 April 1996 between (1) 440/441 Baltic Chambers, N/A
Dawson Investments Limited (2) the Wellington Street, Glasgow
Company
11 Lease dated 25 August 1995 between (1) Office Suite D1 Second N/A
Salopian Holding Company Limited (2) Floor, Hamilton Court, 373
the Company Cowbridge Road East,
Cardiff
12 Lease dated 6 November 1995 between Offices 6, 7 and 8 N/A
(1) W B Anderson and Sons Limited (2) Anderson Chambers, 34
the Company Great Kings Street,
Dumfries
13 Lease dated 20 March 1996 between (1) Rooms T9 and T11, N/A
Town Centre Securities Plc (2) the Princes House, 5
Company Shandwick Place,
Edinburgh
</TABLE>
<TABLE>
<S> <C> <C>
7 Informal arrangement Uncertain pound sterling 5,720 per annum
8 Licence dated 9 November 1995 between Licence terminable on 28 pound sterling 400 per month
(1) R P Bowsher (2) the Company days notice
9 Lease dated 20 May 1996 between (1) 6 months from 20 May 1996 pound sterling 875 per month
Mr & Mrs MacMillan (2) the Company which has expired. The
Company is not in occuption,
a house Superintendent
occupies.
10 Lease dated 29 April 1996 between (1) Term commencing on 2 pound sterling 3,300 per annum
Dawson Investments Limited (2) the February 1996 and expiring
Company on 1 February 1999
11 Lease dated 25 August 1995 between (1) Six years from 25 August pound sterling 3,000 per annum
Salopian Holding Company Limited (2) 1995
the Company
12 Lease dated 6 November 1995 between Term commencing on 1 pound sterling 2,500 per annum
(1) W B Anderson and Sons Limited (2) December 1995 and expiring
the Company on 30 November 1998
13 Lease dated 20 March 1996 between (1) Term commencing on 1 pound sterling 6,130 per annum
Town Centre Securities Plc (2) the September 1995 and expiring
Company on 31 August 1998
</TABLE>
26
<PAGE> 30
<TABLE>
<S> <C> <C>
14 Lease, 8 August 1995 between (1) Office 17, 22/24 The N/A
Roshclose Limited (2) the Company Broadway and 3 West
Street, St Ives, Huntington
15 Lease of unknown date between (1) D M Ground and First Floors, N/A
E Artes (2) M Hammond 162/164 Selsdon Road,
Croydon
Note: This has never been vested in the
Company
16 Lease of unknown date between (1) A H Part Second Floor Graphic N/A
Bates and D G Storer (2) Allied Medical House, 35/37 Albert Street,
Nursing Services Limited Rugby
17 Tenancy at Will dated 25 November Unit S36 West Midlands N/A
1996 between (1) Workspace (NW) House, Willenhall,
Limited (2) Allied Medicare Nursing Wolverhampton
Services
18 Lease dated 28 April 1997 between (1) J Offices at Horton Street N/A
W Fidler & Sons Limited (2) the Company Stockport, Greater
Manchester
19 Lease dated 19 February 1996 between First Floor, 38 Hallgate, N/A
(1) Reeds Rains Limited (2) the Doncaster
Company
20 Lease dated 6 June 1996 between (1) D The Second Floor, 42/43 N/A
Ingram (Hi Fi Centre) Limited (2) the Lower Marsh, London SE1
Company
</TABLE>
<TABLE>
<S> <C> <C>
14 Lease, 8 August 1995 between (1) Term expiring on 14 pound sterling 4,800 per annum
Roshclose Limited (2) the Company December 1999
15 Lease of unknown date between (1) D M 3 years from 25 March 1995. pound sterling 3,500 per annum
E Artes (2) M Hammond
Note: This has never been vested in the
Company
16 Lease of unknown date between (1) A H Term expiring on 29 pound sterling 4,000 per annum
Bates and D G Storer (2) Allied Medical September 1998
Nursing Services Limited
17 Tenancy at Will dated 25 November Tenancy at Will determinable pound sterling 193 per month
1996 between (1) Workspace (NW) upon notice at any time
Limited (2) Allied Medicare Nursing
Services
18 Lease dated 28 April 1997 between (1) J 3 years from 28 April 1997 pound sterling 5,500 per annum
W Fidler & Sons Limited (2) the Company
19 Lease dated 19 February 1996 between 3 years from 17 November pound sterling 2,100 per annum
(1) Reeds Rains Limited (2) the 1995
Company
20 Lease dated 6 June 1996 between (1) D Term expiring on 22 pound sterling 6,000 per annum
Ingram (Hi Fi Centre) Limited (2) the December 1998
Company
</TABLE>
27
<PAGE> 31
<TABLE>
<S> <C> <C>
21 Lease dated 24 February 1997 between Premises at Lakeside N/A
(1) Pilkington Plc (2) the Company Building, Alexandra Park,
Prescot Road, St Helens
22 Licence of unknown date between (1) Premises at Leighton N/A
Mid Cheshire Hospitals (2) the Company Hospital, Crewe
23 Lease dated 2 June 1996 between (1) A J Ground Floor Offices 34 N/A
Kneale, P S Anderton, I S Gardner and J Northumberland Street,
C Pullar (2) the Company Morecambe
24 Informal arrangement Unit 3A Waterside House, N/A
Falmouth Road, Penryn
25 Tenancy of unknown date between (1) Rooms 2.2 and 3.1 N/A
Hall Architects (2) the Company Redwood House, Bristol
Road, Keynsham, Bristol
26 Lease dated 21 February 1990 between Plot B Stone Business Park, N/A
(1) D and Mrs V R Wynn Griffiths and Stone, Staffordshire
W F (Trustees) Limited (1) Allied
Medicare Nursing Services Limited
27 Lease dated 5 August 1953 between (1) Flat 2 The Larches, SY
G H R Smith (2) G C Marshall and W J Westhall Road, 97988
Marshall Warlingham, Surrey
28 Informal Licence Office at the International N/A
Centre Crawley
</TABLE>
<TABLE>
<S> <C> <C>
21 Lease dated 24 February 1997 between Term commencing 1 pound sterling 330.42 per month
(1) Pilkington Plc (2) the Company February 1997 and expiring
31 August 1997
22 Licence of unknown date between (1) Licence terminable on 4 pound sterling 350 per annum
Mid Cheshire Hospitals (2) the Company weeks notice
23 Lease dated 2 June 1996 between (1) A J Term commencing 2 June pound sterling 1,200 per annum
Kneale, P S Anderton, I S Gardner and J 1996 and expiring on 1 June
C Pullar (2) the Company 1997
24 Informal arrangement Uncertain pound sterling 290 per month
25 Tenancy of unknown date between (1) Terminable on 3 months pound sterling 687.50 per quarter
Hall Architects (2) the Company notice
26 Lease dated 21 February 1990 between 20 years from 27 November pound sterling 15,000 per month
(1) D and Mrs V R Wynn Griffiths and 1989 (inclusive of value
W F (Trustees) Limited (1) Allied added tax at the rate of
Medicare Nursing Services Limited 17.5%)
27 Lease dated 5 August 1953 between (1) 99 years from 5 August 1953 pound sterling 12.00 per annum
G H R Smith (2) G C Marshall and W J
Marshall
28 Informal Licence Uncertain. Mrs D Scott pound sterling 60 per week
occupies and the Company
pays the rent and other
payments payable
</TABLE>
28
<PAGE> 32
<TABLE>
<S> <C> <C>
29 Informal arrangement Offices at Chatham N/A
</TABLE>
<TABLE>
<S> <C> <C>
29 Informal arrangement Uncertain pound sterling 442 per month
</TABLE>
Note:
(a) The Company is seeking to relocate in Northampton from 1 July 1997 to
offices at 320 Wellingborough Road, Northampton at a rent of pound
sterling 80 per week terminable on one month's notice from either
landlord or tenant.
(b) The Company is seeking to relocate in Liverpool from 1 July 1997 to
premises comprising the ground floor Cavendish House, Brighton Road,
Waterloo, Liverpool at a rent of pound sterling 875 per quarter for an
initial period of twelve months.
29
<PAGE> 33
SCHEDULE 3
BRIEF DETAILS OF FREEHOLD PROPERTIES
<TABLE>
<CAPTION>
PROPERTY TITLE NO.
<S> <C>
1 13 Bridge Grove, Nottingham, Nottinghamshire NT 31445
2 Lindum House, Barnes Croft, Hilderstone, Stone, Staffordshire SF 319977
</TABLE>
30
<PAGE> 34
SCHEDULE 4
WARRANTIES
1 INFORMATION, RECORDS AND DOCUMENTS
WRITTEN INFORMATION AND MATERIAL DISCLOSURE
1.1 The contents of Schedule 1 are, and all factual information contained
in the specific disclosures in part 4 of the Disclosure Letter is,
true and accurate in all material respects.
STORAGE OF RECORDS
1.2 The Company does not have any of its records, systems, or data
recorded or operated or otherwise wholly or partly dependent on, or
held by, any means (including any electronic, mechanical or
photographic process whether computerised or not) which (including all
means of access to it and from it) are not under the ownership and
control of the Company.
POSSESSION OF DOCUMENTS
1.3 All title deeds relating to the assets of the Company are in the
possession or under the control of the Company. In the case of the
Properties such deeds and documents are either original or copies
marked by a solicitor as examined with the original.
2 OWNERSHIP OF SHARE CAPITAL, SUBSIDIARIES AND JOINT VENTURES
OWNERSHIP OF SHARES
2.1 The Shares constitute the whole of the issued share capital of the
Company and there is no option, mortgage, charge, pledge, lien or
other form of security or encumbrance on, over or affecting the Shares
or any unissued shares, debentures or other securities of the Company.
There is no agreement or commitment to give or create any of the
foregoing and each Seller is entitled to sell and transfer or procure
the sale and transfer of the full legal and beneficial ownership in
the number of Shares set opposite their names in Schedule 1 to the
Buyer on the terms of this Agreement.
SUBSIDIARIES AND JOINT VENTURES
2.2 Except in respect of Allied Homecare Limited, the Company is not the
beneficial or legal owner of, nor has agreed to acquire, any share or
loan capital of any other company (whether incorporated in the United
Kingdom or elsewhere).
2.3 The Company has not agreed to become and is not a member of any
partnership or other unincorporated association, joint venture or
European Economic Interest Grouping or
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consortium (other than recognised trade associations) and has no
subsidiary undertakings, save for Allied Homecare Limited.
2.4 Allied Homecare Limited is a wholly owned subsidiary of the Company,
has not traded since incorporation and has no assets or liabilities.
3 LEGAL MATTERS
DOCUMENTS FILED
3.1 All material returns and other documents required to be filed with the
Registrar of Companies in respect of the Company have been correctly
and properly prepared and filed and due compliance has been made with
the provisions of the Act in connection with the formation of the
Company and the allotment and issue of shares.
INVESTIGATIONS
3.2 The Company has received no notice of any investigations or enquiries
by, or on behalf of, any governmental or other body in respect of the
affairs of the Company and so far as the Sellers are aware, no such
investigations or enquiries are currently subsisting or have been
raised in the three years preceding the date of this Agreement.
LITIGATION
3.3 The Company is not now nor has been in the two years preceding this
Agreement engaged in any civil or criminal proceedings and so far as
the Sellers are aware no such proceeding are pending or threatened.
There is no outstanding judgement, order or award of a court or
tribunal against the Company. So far as the Seller is aware no
injunction has been granted against the Company and the Company has
given no undertaking to any court or to any third party arising out of
any legal proceedings.
POWERS OF ATTORNEY
3.4 The Company has not granted any power of attorney which remains in
effect nor has it given any other similar express authority which is
still outstanding (other than any authority for employees to enter
into routine trading contracts in the normal course of their duties).
STATUTORY BOOKS AND OTHER RECORDS
3.5 The statutory books of the company are complete and up to date and not
misleading.
MEMORANDUM AND ARTICLES OF ASSOCIATION
3.6 The memorandum and articles of association of the Company in the form
annexed to the Disclosure Letter are true and complete and have
embodied therein or annexed thereto copies of all resolutions and
agreements as are required by law to be embodied therein or annexed
thereto.
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LICENCES
3.7 The Company has obtained and complied in all material respects with
the terms and conditions of all statutory licences, permits, consents,
approvals and other authorisations necessary for the operation of the
Company's business, its ownership, possession and use of its assets
and its occupation of each of the Properties. Reasonable details of
all such statutory licences, permits, consents, approvals and other
authorisations are included in the Disclosure Letter. So far as the
Sellers are aware, there is no reason why any of such statutory
licences, permits, consents, approvals and other authorisations should
be suspended, revoked or be invalid.
4 CAPACITY
4.1 Each Seller has the capacity to enter into this Agreement and the Tax
Covenant which will, when executed, become binding obligations on him
or her.
4.2 The execution and performance of this Agreement will not:-
4.2.1 result in a breach of any of the terms of any material
agreement or instrument to which the Company is a party;
4.2.2 relieve any other party to a material contract with the
Company of its obligations or enable it to terminate the
contract;
4.2.3 crystallise any floating charge or other encumbrance of
any kind on any of the assets of the Company.
5 FINANCIAL MATTERS
ACCURACY OF ACCOUNTS
5.1 The Accounts:-
5.1.1 give a true and fair view of the state of the Company's
affairs as at the Accounts Date and its results for the
period to which they relate;
5.1.2 have been prepared in compliance with all applicable
laws, the accounting policies stated in the Accounts and
Accounting Standards;
5.1.3 have been prepared on a basis consistent with the basis
upon which all audited accounts of the Company have been
prepared in respect of the three years before the
Accounts Date;
5.1.4 to the extent required by applicable law and Accounting
Standards make provision or reserve for or disclose all
liabilities (including all contingent or deferred
liability to Taxation) of the Company whether actual,
contingent or otherwise.
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5.2 The results shown by the audited profit and loss accounts of the
Company for each of the three financial years of the Company ended on
the Accounts Date have not (except as disclosed in those accounts)
been affected by any extraordinary, exceptional or non-recurring items
or by any other matters making the profits or losses for a period
covered by any of those accounts unusually high or low.
5.3 The Company is not engaged in any financing (including the incurring
of any borrowing or any indebtedness in the nature of acceptances or
acceptance credits) of a type which would not be required to be shown
or reflected in the Accounts.
5.4 The books of account and all other records of the Company (including
any which it may be obliged to produce under any contract now in
force) are up-to-date, in its possession and comply with the Act and
Accounting Standards.
ACCOUNTS DATE
5.5 The accounting reference date of the Company is as set out in Schedule
1.
HIRE PURCHASE AND LEASED AGREEMENTS
5.6 Reasonable details of all hiring or leasing agreements, hire purchase
agreements, credit or conditional sale agreements, agreements for
payments on deferred terms and other similar agreements to which the
Company is a party are included in the Disclosure Letter.
6 EVENTS SINCE THE ACCOUNTS DATE
6.1 Since the Accounts Date as regards the Company there has been no
material adverse change in its financial or trading position and:-
6.1.1 its business has been carried on in a normal and proper
manner;
6.1.2 no asset has been acquired or disposed of on capital
account or has been agreed to be acquired or disposed of
on capital account and it has not incurred, or agreed to
incur, any material liabilities otherwise than in the
ordinary course of carrying on its business;
6.1.3 no substantial customer of the Company has ceased or
reduced its level of business with the Company to a
material extent;
6.1.4 no dividends or other distributions have been declared,
paid or made;
6.1.5 no resolution of the Company has been passed (other than
ordinary business at annual general meetings);
6.1.6 no payments have been made to any of the Sellers or any
Connected Persons and no agreement between the Buyers
and either of the Sellers or any Connected Persons have
been amended or entered into.
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BANK BORROWING
6.2 The total amount borrowed by the Company from its bankers does not
exceed its overdraft facilities details of which are set out in the
Disclosure Letter and does not exceed any limitation on its borrowing
powers contained in its Articles of Association.
LOAN CAPITAL
6.3 The Company has no outstanding loan capital nor has it factored its
debts or borrowed any money (save for short term borrowings from its
bankers) which it has not repaid nor has the Company engaged in
financing of a type which would not require to be shown or reflected
in audited accounts.
NOTICE OF REPAYMENT OF DEBTS
6.4 The Company has not received notice from any lenders of any money
requiring repayment or intimating the enforcement by any such lender
of any security which it may hold over any assets of the Company and
no event of default has occurred and is outstanding under the terms of
any agreement with any lender which entitles such lender to demand
repayment of any money prior to the date in which it would otherwise
be repayable by the Company.
BANK CERTIFICATE
6.5 A statement certified by the Company's bankers of the Company's bank
accounts and of its credit or debit balances as at a date not more
than two Business Days before today's date has been supplied to the
Buyer and the Company has no other bank or deposit account (whether in
credit or overdrawn) not included in such statement and since the date
of such statement there have been no payments out of any such accounts
except for routine payments and the aggregate balance on all current
accounts is not substantially different from the aggregate balance
shown on such statements.
GRANTS AND ALLOWANCES
6.6 Particulars of all grants, allowances, subsidies, loans or financial
assistance paid or made to the Company during the last three years by,
and of all outstanding claims by the Company for, any grant or
allowance from, any supranational, national or local authority or
government agency are set out in the Disclosure Letter and there are
no circumstances under which such grant or allowance may be liable to
be repaid in whole or in part.
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6.7 Save as disclosed in the Accounts, the Company has no liabilities,
actual or contingent, other than trade creditors incurred in the
ordinary course of trading since the Accounts Date.
6.8 FACILITIES
Full and accurate details of all overdrafts, loans or other financial
facilities outstanding or available to the Company are set out in the
Disclosure Letter and whether or not of a type which would be required
to be shown in or reflected in the Accounts (including any
indebtedness for moneys borrowed or raised under any acceptance
credit, bond, note, bill of exchange or commercial paper, finance
lease, hire purchase agreement, trade bills (other than those on terms
normally obtained) forward sale or purchase agreement or conditional
sale agreement or other transaction having the commercial effect of a
borrowing).
7 INSOLVENCY
7.1 No receiver (which expression shall include an administrative
receiver) has been appointed over the whole or any part of the assets
or undertaking of the Company nor has any liquidator or provisional
liquidator been appointed in respect of either of them.
7.2 No petition has been presented, no order has been made, and no
resolution has been passed for the winding-up of the Company and no
meeting has been convened for the purpose of winding-up either of
them.
7.3 No administration order has been made and no petition for such an
order has been presented in respect of the Company.
7.4 The Company has not stopped payment to its creditors of its debts nor
is it insolvent or is unable to pay its debts within the meaning of
Section 123 of the Insolvency Act 1986.
7.5 No unsatisfied judgment or court order is outstanding against the
Company.
7.6 No voluntary arrangement is in force or is proposed under Section 1 of
the Insolvency Act 1986 in respect of the Company.
8 TAXATION MATTERS
GENERAL
8.1 The Company has within the relevant time limits:-
8.1.1 correctly made all returns (including returns under
section 11 of the Taxes Management Act 1970) required to
be made and given all notices, accounts and computations
required to be given by the Company and maintained all
records for any Taxation purpose and the information
contained in any such returns, notices,
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accounts and computations and records was full and
accurate in all material respects; and
8.1.2 paid or accounted for all Taxation (including Taxation
required to be deducted or withheld from payments).
8.2 The Company is not or has not within the last six years been liable to
pay any fine, interest or penalties to a Taxation Authority and so far
as the Sellers are aware there are no facts within the last three
years which are likely to cause it to become liable to pay any such
penalty, fine or interest.
8.3 There is no dispute and there has not at any time been any dispute
(other than the routine negotiation of tax computations) between the
Company and any Taxation Authority, the Company is not nor has at any
time been the subject of an investigation by any Taxation Authority.
8.4 No action has been taken by the Company in respect of which any
consent or clearance from the Inland Revenue or other authority was
required save in circumstances where such consent or clearance was
validly obtained, and where any conditions attaching thereto were and
will, where relevant immediately following Completion, continue to be
met.
8.5 Since the Accounts Date, the Company has not made any payment or
incurred any liability to make any payment which could be disallowed
as a deduction in computing the taxable profits of the Company or as a
charge on the Company's income except for capital expenditure
qualifying for capital allowances and expenditure on entertainment in
the ordinary course of the Company's business not exceeding pound
sterling 1,000.
8.6 Since the Accounts Date, the Company has not made, nor is bound to
make, any distribution or deemed distribution as defined in or set out
in Section 209 to 211 ICTA or Sections 418, 419 or 422 ICTA.
TRANSACTIONS OTHER THAN AT ARM'S LENGTH
8.7 The Company has not been party to any transaction in respect of which
the relevant Taxation Authority may substitute for Taxation purposes a
different amount or value than the amount or value of the
consideration actually given or received by the Company and no notice
or enquiry pursuant to Section 770 T.A has been made in connection
with any of such transactions.
CAPITAL ALLOWANCES
8.8 (a) No balancing charge in respect of any capital allowances
claimed or given would arise if any asset or pool of
assets in respect of which separate computations are
required to be made for capital allowances of the
Company were to be realised for
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a consideration equal to the amount of the book value
thereof as shown or included in the Accounts.
(b) The Company has not since the Accounts Date become
liable for any balancing charge.
FOREIGN TAX
8.9 The Company is not and has never been liable to tax in any
jurisdiction other than the United Kingdom.
8.10 The Company is not and has never been an agent of another company for
the purpose of assessing the latter to tax in the United Kingdom.
PAYE AND NATIONAL INSURANCE
8.11 The Company has properly operated the PAYE system and has complied in
all material respects with all its obligations in respect of National
Insurance and has complied in all material respects with all its
reporting, accounting and payment obligations to the relevant
authorities in connection with payments (including notional payments)
and benefits provided for directors and employees of the Company or
others.
VAT
8.12 The Company is registered in the United Kingdom for the purposes of
the legislation relating to VAT. The Company has never been treated as
a member of a group for the purposes of section 43 VATA and no
application for such treatment has been made.
8.13 The Company has at all times complied in all material respects with
its payment and other obligations under the legislation relating to
VAT (including all regulations and orders relating thereto) and has
maintained complete, correct and up to date records and documents
appropriate or required for VAT purposes, has not within the last
three years incurred any penalty, default surcharge or interest in
relation to VAT and has not within the last two years been served with
any penalty liability notice within section 64 VATA or any surcharge
liability notice within section 59 VATA or been issued with any
written warning within section 76 (2) VATA.
8.14 The Company has never been required to give security to H M Customs &
Excise.
8.15 Neither the Company nor any relevant associate (for the purposes of
paragraph 3(7) of Schedule 10 VATA) has elected to waive exemption and
the Company has not received notice of any election to waive exemption
for VAT purposes in relation to any interest in land or buildings
owned or occupied by the Company.
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CLAIMS AND RECORDS
8.16 So far as the Sellers are aware the Company has maintained sufficient
records to enable it to calculate any present or, so far as possible,
future liability for Taxation of the Company or its entitlement to any
deduction relief or repayment of Taxation.
CAPITAL GAINS
8.17 The amounts at which assets are included in the Accounts are such that
on the disposal of any asset for a consideration equal to such amount
(disregarding any statutory right to make any election or to claim any
allowance or relief other than one allowable under section 38 of the
TCGA), no liability to corporation tax in respect of any chargeable
gain will arise.
8.18 The Disclosure Letter contains full details of all claims made by the
Company under sections 152 to 154 (replacement of business assets), of
the TCGA and which apply to any asset owned by the Company at
Completion and no other claim has been made or may be made by any
other person (including under sections 165 (gifts of business assets)
and 175 (replacement of business assets by members of a group) of the
TCGA) which affects the consideration for the acquisition of any such
asset taken into account in computing any liability to corporation tax
on chargeable gains on a subsequent disposal of that asset.
8.19 The Company has never been a party to any transaction as a result of
which the consideration received for any disposal of an asset may be
increased under section 30 of the TCGA (value-shifting).
RESIDENCE AND OVERSEAS MATTERS
8.20 The Company is, and always has been, resident only in the United
Kingdom for Taxation purposes (and has never been treated as resident
outside the United Kingdom for the purposes of any double taxation
convention).
8.21 The Company does not act as the branch, agent, factor, or tax
representative of any person resident outside the United Kingdom for
Taxation purposes and no such person carries on any trade or business
through the Company.
CAPITAL ALLOWANCES
8.22 The value attributed in the Accounts to each asset, or the aggregates
of the values attributed to the assets in each pool of assets in
respect of which separate computations for capital allowances are
required to be made or, as a result of any election, are made, is such
that on a disposal of each such asset or pool of assets on the
Accounts Date for a consideration equal to such a value or aggregate
value no balancing charge would have arisen.
8.23 So far as the Sellers are aware nothing has occurred since the
Accounts Date as a result of which the Company could be required to
bring a disposal value into account or suffer a
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balancing charge, or withdrawal of first year allowances or a recovery
of excess relief for the purpose of capital allowances.
DISTRIBUTIONS ETC
8.24 The Company has never made any repayment of share capital to which
section 210 of the Taxes Act (bonus issue following repayment of share
capital) applies or made any bonus issue or otherwise issued any share
capital as paid up otherwise than by receipt of new consideration
within the meaning of Part VI of the Taxes Act.
8.25 The Company has not since 5 April 1965 made any distribution (as
defined in sections 209 to 211 of the Taxes Act) except by way of a
cash dividend.
8.26 The Company has not redeemed, repaid or purchased or agreed to redeem,
repay or purchase any of its own shares under section 219 of the Taxes
Act (purchase by unquoted trading company of own shares).
GROUP MATTERS
8.27 The Company is not and has never been a member of a group of companies
for any Taxation purpose.
CLOSE COMPANY
8.28 The Company is a close company for the purposes of United Kingdom
Taxation but is not and has never been a close investment holding
company for the purposes of section 13A of the Taxes Act.
8.29 Within the last six years the Company has not made any loan to any
participator or any associate for the purposes of section 419 or 422
of the Taxes Act (loans to participators) or provided any payment or
benefit to a participator which has or could be treated as a
distribution for the purposes of section 418 of the Taxes Act (certain
expenses of close companies).
STAMP DUTY AND STAMP DUTY RESERVE TAX
8.30 All instruments executed by the Company and which are necessary to
establish the title of the Company to any asset have been duly stamped
and, where appropriate, stamped with the particulars delivered stamp
by the Inland Revenue.
8.31 The Company is or has ever been liable to pay any stamp duty reserve
tax.
INHERITANCE TAX
8.32 There has been no transfer of value made by the Company or in relation
to any share capital of the Company to which Part IV of the ITA (close
companies) might apply.
8.33 No Inland Revenue charge for unpaid capital transfer tax or
inheritance tax has been or may be imposed under section 212 or 237 of
the ITA over any asset of the Company or in relation
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to any part of the share capital of the Company and no such Inland
Revenue charge will arise after Completion in connection with any
event which has occurred prior to Completion.
9 PROPERTY MATTERS
9.1 The Properties comprise all the land and buildings used or occupied by
the Company.
9.2 The Company is in sole possession and occupation of the Properties and
there are no circumstances known to the Seller which would restrict or
terminate the continued possession or occupation by the Company of the
Properties.
9.3 In respect of any of the Properties which are leasehold ("Leasehold
Properties"):-
9.3.1 the Company has paid the rent reserved by the lease
under which the Leasehold Properties are held.
9.3.2 the Company has not received notice from any landlord
complaining of any breach of the covenants on the part
of the tenant contained in such leases.
9.4 Replies to preliminary enquiries in respect of the Properties raised
by the Buyer's Solicitors in writing or in correspondence with the
Seller's Solicitors were when given and are now correct in all
material respects.
9.5 The Company has no actual or contingent obligations or liabilities
(whether as principal contracting party or guarantor or otherwise) in
relation to any lease, licence or other interest or agreement relating
to land apart from the Properties.
10 ASSETS AND STOCK
OWNERSHIP OF ASSETS
10.1 The assets included in the Accounts were, at the Accounts Date, and
are now (unless since disposed of in the ordinary course of business),
in the absolute beneficial ownership and possession of the Group and
there is no option, mortgage, charge, pledge, agreement for payment on
deferred terms, lien (other than a lien arising by operation of law in
the ordinary course of trading) or other form of security on, over or
affecting any of such assets or any part of the Company's undertaking
and those assets since acquired by the Company and there is no
agreement or commitment to give or create any of the foregoing.
PLANT IN WORKING ORDER
10.2 The plant, machinery, vehicles and other equipment used in connection
with the business of the Company are in a reasonable and safe state of
repair and condition and reasonable working order given their age and
usage.
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ASSETS SUFFICIENT FOR BUSINESS
10.3 The assets owned or used under licence by the Company comprise all
assets necessary for the continuation of the business of the Company
as previously carried on.
11 INTELLECTUAL PROPERTY
11.1 Each item of Intellectual Property which is capable of registration
has been properly registered and is listed in Schedule 5 and is in
full force and effect.
11.2 No service mark or trade mark of the Company has been acquired from,
or was previously used by, any other person and so far as the Seller
is aware there are no proceedings pending or threatened before the
European Court relating to any trade mark or service marks of the
Company.
11.3 The Company has not granted to any third party any rights or licences
over any of its Intellectual Property.
12 CONTRACTS
ONEROUS CONTRACTS
12.1 The Company is not a party to, or subject to, any agreement,
obligation, understanding, arrangement or liability which:-
12.1.1 is long term (that is to say not terminable on six
months' notice or less);
12.1.2 is unusual or abnormal (that is to say contracts or
arrangements for capital commitments or contracts or
arrangements differing from those necessitated by the
ordinary nature of its business or entered into other
than on arm's length terms);
12.1.3 in any way restricts the freedom to carry on the whole
or part of its business in any part of the world;
12.1.4 restricts the freedom of the Company to provide and take
goods from or to such persons as it may from time to
time think fit.
CUSTOMERS AND SUPPLIERS
12.2 During the six months preceding the date of this Agreement there has
been no substantial change in the basis or terms on which any person
(including any supplier) is prepared to enter into contracts or do
business with the Company (apart from normal price changes).
12.3 The loss of any single supplier to or customer of the Company would
not have a material effect on its business, and during the financial
year ended on the Accounts Date or in the period since
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the Accounts Date not more than ten per cent of the Company's supplies
were derived from the same supplier, and not more than ten per cent of
its sales were to the same customer.
12.4 There are attached to the Disclosure Letter copies of each contract to
which the Company is a party which individually is of material
importance to the Company's business as presently carried on (other
than the contracts and arrangements listed in Schedule 3).
13 GENERAL BUSINESS MATTERS
OTHER INTERESTS OF THE SELLERS AND CONNECTED PERSONS
13.1 Neither the Sellers nor any Connected Persons have any rights or
interests directly or indirectly in any business (other than that of
the Company) or any Intellectual Property rights which are or are
likely to be or become, competitive with the business of the Company
(save as the beneficial owner of any class of securities of any
company listed on a recognised investment exchange (as defined in the
Financial Services Act 1986) and in respect of which the Sellers or
any Connected Persons are beneficially interested in less than five
per cent of all the issued securities of that class).
EFFECT OF SALE OF SHARES
13.2 The Sellers are not aware that after Completion:-
13.2.1 any supplier to the Company will cease supplying the
Company or materially reduce its volume of supplies to
the Company;
13.2.2 any customer will cease or materially reduce its volume
of dealings with the Company.
TRANSACTIONS WITH SELLERS AND CONNECTED PERSONS
13.3 There are:-
13.3.1 no loans made by the Company to the Sellers and/or any
director of the Company and/or any person connected with
any of them as described in Section 839 of the Taxes
Act);
13.3.2 no debts owing to the Company by the Sellers and/or any
director of the Company and/or any such person as
aforesaid.
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13.4 There are no existing agreements, arrangements, contracts or
engagements to which the Company is a party and in which the Sellers
and/or any director of the Company and/or any person connected with
any of them as mentioned in paragraph 13.3.1 above is interested.
BUSINESS NAME
13.5 The Company does not use on its letterhead, books or vehicles or
otherwise carry on its business under any name other than its
corporate name.
FINDER'S FEE ETC.
13.6 No person, firm or corporation is entitled to receive from the Company
any vendor's fee, finder's fee or brokerage or other commission
payable by the Company in connection with the purchase of the Shares.
14 EMPLOYEES AND DIRECTORS
14.1 The names and remuneration of each employee of the Company have been
disclosed in the Disclosure Letter and no other person not named
therein is an employee of the Company and since the Accounts Date no
change has been made in the terms of engagement of any Director or
employee of the Company.
14.2 There are no agreements or other arrangements between the Company and
any trade union or other body representing employees.
14.3 There is no liability or claim against the Company outstanding or so
far as the Sellers are aware anticipated under the Equal Pay Act 1970,
the Sex Discrimination Act 1975, the Race Relations Act 1976, the
Disability Discrimination Act 1995 or the Employment Rights Act 1996
or the Transfer of Undertakings (Protection of Employment) Regulations
1981.
BONUS SCHEMES
14.4 There are no schemes in operation by, or in relation to, the Company
under which any employee of the Company or any self-employed
superintendent, nurses or carers engaged by the Company is entitled to
a commission, payment or remuneration of any other sort calculated by
reference to the whole or part of the turnover, profits or sales of
the Company or any other targets or objectives.
CONSULTANCY AGREEMENTS
14.5 There are not in existence any consultancy agreements between the
Company and any other person, firm or company.
MISCELLANEOUS
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14.6 The Company has not received written notice of any employee intending
to terminate his employment with the Company on or within six months
of Completion and no employee is under notice of termination of
employment from the Company nor is suspended from employment with or
without pay.
14.7 No trade dispute (as defined in section 218 of the Trade Union and
Labour Relations (Consolidation) Act 1992) exists or has existed
within the 2 years preceding the date hereof or is anticipated between
the Company and any of its employees or any trade union.
14.8 Within a period of one year preceding today's date the Company:-
14.8.1 has not given notice of any redundancies to the
Secretary of State or given information to or consulted
with any independent trade union or unions or any other
representative of workers under the provisions of the
Employment Rights Act 1996 or the Trade Union and Labour
Relations (Consolidation) Act 1992 nor has the Company
failed to comply with any such obligation under the said
Acts;
14.8.2 has not been a party to any relevant transfer as defined
in the Transfer of Undertakings (Protection of
Employment) Regulations 1981 nor has the Company failed
to comply with any duty to inform and consult any
independent trade unions or any other representatives of
any workers under the said Regulations.
14.9 The Company has complied in all material aspects with all relevant
provisions of all applicable legislation, codes of conduct and terms
and conditions of employment relevant to the Company's Directors,
officers and employees.
14.10 The salaries and other benefits of all employees of the Company and
all payments due to self-employed superintendents, nurses or carers
engaged by the Company have been paid or discharged in full in respect
of the period up to and including Completion.
14.11 Details of any profit sharing, incentive, bonus, commission, share
option, medical, permanent health insurance, directors' and officers'
insurance, travel, car, redundancy and other benefit schemes,
arrangements and understandings (the "Schemes") operated for all or
any of the employees or any self-employed superintendents, nurses and
carers engaged by the Company or former employees of the Company or
their dependents whether legally binding on the Company or not have
been disclosed in the Disclosure Letter.
14.12 The Schemes have at all times been operated in all material respects
in accordance with their governing rules or terms and all applicable
laws, and all documents which are required to be filed with any
regulatory authority have been so filed.
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14.13 The terms of employment or engagement of all employees, agents,
consultants and professional advisers of the Company are such that
their employment or engagement may be terminated by not more than
three months' notice given at any time without liability for any
payment including by way of compensation or damages (except for unfair
dismissal or a statutory redundancy payment).
14.14 The Disclosure Letter contains copies of all the standard terms and
conditions, staff handbooks and policies which apply to the employees
of the Company and to any self-employed superintendents, nurses and
carers engaged by the Company and identifies which terms and
conditions apply to which employees or other persons engaged by the
Company as aforesaid.
14.15 There are no terms and conditions in any contract with any director,
officer or employee of the Company or any self-employed
superintendent, nurses or carers engaged by the Company pursuant to
which such person will be entitled to receive any payment or benefit
of such person's rights will change as a direct consequence of the
transaction contemplated by this Agreement.
14.16 No past or present Director, officer, employee of the Company or any
self-employed superintendent, nurses or carers engaged by the Company
has any outstanding claim against the Company including any claim:
(a) in respect of any accident or injury which is not fully covered
by insurance; or
(b) for breach of any contract of services or for services; or
(c) for loss of office arising out of or connected with the
termination of his office or employment
and so far as the Sellers are aware no event has occurred which is
likely to give rise to such claim.
14.17 So far as the Sellers are aware there are no enquiries or
investigations existing, pending or threatened affecting the Company
in relation to any Directors, officers or employees of the Company or
any self-employed superintendent, nurses or carers engaged by the
Company by the Equal Opportunities Commission, the Commission for
Racial Equality or the Health and Safety Executive or any other bodies
with similar functions or powers in relation to workers.
14.18 The Company has maintained records which are in the reasonable opinion
of the Sellers adequate and suitable regarding the service of its
Directors, officers, employees and any self-employed superintendent,
nurses or carers engaged by the Company and such records comply with
the requirements of the Data Protection Act 1984.
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14.19 Since the Accounts Date, the Company has not made, announced or
proposed any changes to the emoluments or benefits of or any bonus to
any of the Directors, officers or employees of the Company or any self
employed, superintendents, nurses or carers engaged by the Company and
the Company is under no obligation to made any such changes with or
without retrospective effect.
ACAS
14.20 So far as the Sellers are aware the Company has complied with all
recommendations made by the Advisory Conciliation and Arbitration
Service and with all awards and declarations made by the Central
Arbitration Committee.
SHARE SCHEMES
14.21 The Company does not have in existence nor is it proposing to
introduce any share incentive scheme, employee share trust or share
option scheme for all or any of its directors or employees.
15 SELF EMPLOYED CONTRACTORS
A copy of the standard terms and conditions for self employed
superintendents, nurses and carers are attached to the Disclosure
Letter.
16 PENSION MATTERS
16.1 The Company is not and never has been a party to any agreement or
arrangement (other than the Pension Schemes) for the provision of any
relevant benefits (as defined in Section 612(1) of ICTA) for any
Employee or former employee of the Company.
16.2 The Company has no obligation to contribute to any personal pension
scheme (as defined in Section 630 of ICTA) or to make any ex gratia
pension payments in respect of any Employee or former employee of the
Company.
16.3 Copies of the trust deeds, rules and other documents containing the
provisions currently governing the Pension Schemes and particulars of
the benefits and entitlements under the Pension Schemes have been
delivered to the Buyer and there is no obligation to provide benefits
under the Pension Schemes other than as revealed in such documents and
particulars.
16.4 The Sellers are the only two members of the Self-Administered Pension
Scheme.
16.5 No undertaking or assurance has been given to all or any of the
Employees as to the continuance introduction increase or improvement
of any pension arrangements.
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16.6 The Company and the trustees and administrators of the Pension Schemes
have respectively complied with their obligations under the Pension
Schemes in accordance with the trust powers and provisions of their
governing documentation and the Pension Schemes have been administered
in accordance with and comply with all applicable legislation and
general requirements of trust law and all amounts due to be paid to
the Pension Schemes from the Company have been paid.
16.7 All of the assets of the Self-Administered Pension Scheme are under
the possession or control of its trustees and the assets of the other
Pension Scheme are secured under an insurance policy.
16.8 The Pension Schemes are approved as exempt approved schemes (within
the meaning of Chapter I of Part XIV of ICTA) and the Sellers are not
aware of anything that has been done or omitted to be done which will
or may result in the Pension Schemes ceasing to be approved as exempt
approved schemes.
16.9 All lump sum death benefits which may be payable under the Pension
Schemes (other than a refund of members' contributions) are fully
insured with an insurance company authorised to carry on a long term
insurance business under the Insurance Companies Act 1982. All
policies and contracts under which such benefits are insured are
enforceable.
16.10 No claim has been made or threatened against the Trustees or
administrator of the Pension Schemes or against any person whom the
Company is or may be liable to indemnify or compensate in respect of
any event, omission or other matter arising out of or in connection
with the Pension Schemes or any of them (other than routine claims of
benefits).
16.11 In addition to lump sum death in service benefits the Pension Schemes
provide only money purchase benefits (as defined in Section 181
Pension Schemes Act 1993) for the beneficiaries of the Pension Schemes
and no promise or assurance (oral or written) has been given to any
beneficiary that his or her benefits under the Pension Scheme (other
than lump sum death in service benefits) will be calculated by
reference to any persons remuneration or equate (approximately or
exactly) to any particular amount.
17 CONTINGENT LIABILITIES
So far as the Sellers are aware, the Company has no material
contingent liabilities save for any contingent liabilities arising in
the ordinary course of business since the Accounts Date.
18 COMPLIANCE WITH LAWS
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The Company has in all material respects conducted its business in
accordance with all applicable law and regulations of any jurisdiction
in which it carries on business.
19 INSURANCE
19.1 POLICIES
The Disclosure Letter contains a list of each current insurance and
indemnity policy in respect of which the Company has an interest
(together the "POLICIES"). Each of the Policies is valid and in force
and so far as the Sellers are aware there are no circumstances which
might make any of the Policies void or voidable or lead any claim
under the Policies to be avoided by the insurers.
19.2 CLAIMS
No claim is outstanding under any of the Policies and so far as the
Sellers are aware no events have occurred which may give rise to a
claim under any of the Policies.
20 LIABILITIES OF THE COMPANY
20.1 No sums have been paid or are payable by or on behalf of the Company
to any employee of the Company which are dependant upon, or related
to, the sale of the Company contemplated by this Agreement or the
Consideration.
20.2 The Company has no liability, actual or contingent, to pay any costs
or expenses, professional or otherwise, in connection with the sale
contemplated by this Agreement and neither has the Company made any
such payments.
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SCHEDULE 5
INTELLECTUAL PROPERTY
<TABLE>
<CAPTION>
TRADEMARK TERRITORY NUMBER CLASS PROPRIETOR
<S> <C> <C> <C> <C>
Florence Nightengale device and Allied Medicare UK 1544682 42 The Company
Medicare UK 1285745 42 The Company
Florence Nightengale device UK 1285744 42 The Company
</TABLE>
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SCHEDULE 6
TAX COVENANT
1 INTERPRETATION
1.1 In this schedule unless the context otherwise requires:-
"BUYER'S RELIEF" means:-
(a) any Relief which arises in respect
of, by reference to or in
consequence of any period after the
Relevant Date or any Event
occurring after the Relevant Date;
(b) any Relief which was taken into
account in computing, and so
reducing or eliminating any
provision for deferred Taxation
which appears in the Net Asset
Statement (or which, but for such
Relief, would have appeared in the
Net Asset Statement); and
(c) any Relief which was treated as an
asset in the Net Asset Statement;
"CLAIM FOR TAXATION" means any assessment, notice, demand,
letter or other document issued by or
action taken by or on behalf of any
Taxation Authority or any circumstances
indicating that the Company is or may be
placed or is sought to be placed under a
Liability for Taxation;
"EVENT" means any event, act, failure, omission,
occurrence, dealing, circumstance,
arrangement or transaction (including the
sale of the Shares pursuant to this
Agreement);
"LIABILITY FOR TAXATION" means:-
(a) any liability (including a
liability which is a primary
liability of some other person and
whether or not there is a right of
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recovery against another person) to
make an actual payment or increased
payment of or in respect of
Taxation whether or not such
liability has been discharged prior
to Completion;
(b) any liability (including a
liability which is a primary
liability of some other person and
whether or not there is a right of
recovery against another person) to
make a payment or increased payment
of Taxation which would have arisen
but for being satisfied, avoided or
reduced by any Buyer's Relief; and
(c) the disallowance, loss, clawback,
reduction, restriction or
modification of any Buyer's Relief
within paragraph (b) or (c) of the
definition of Buyer's Relief;
"RELIEF" means any relief, allowance, deduction,
exemption or set-off relevant to the
computation of any Liability for Taxation,
any credit against Taxation or any right
to a repayment of Taxation;
"TAXATION" means:-
(a) advance corporation tax, capital
gains tax, corporation tax, customs
and excise duties, income tax
(including PAYE), inheritance tax,
national insurance contributions
and VAT;
(b) all former and foreign taxes;
(c) all other levies, imposts, duties,
charges or withholdings in the
nature of taxes imposed by any
Taxation Authority other than
rates, community charge or council
tax; and
(e) all interest, penalties, fines and
other charges relating to any of
the above save insofar as
attributable to the delay or
default after Completion of the
Company or the Buyer;
"TAXATION AUTHORITY" means the Inland Revenue, HM Customs &
Excise, the Department of Social Security
and any other body having functions in
relation to Taxation.
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1.2 In interpreting this schedule:-
1.2.1 words and expressions defined elsewhere in this
Agreement shall have the same meanings in this schedule
except where otherwise provided or expressly defined in
this schedule and, unless the context otherwise
requires, clause 1.2 of this Agreement shall apply to
the interpretation of this schedule;
1.2.2 any reference to income, profits or gains earned,
accrued or received or an Event which has occurred
includes income, profits or gains deemed to have been or
treated as or regarded as earned, accrued or received or
an Event deemed to have or treated as having or regarded
as having occurred, as the case may be.
2 COVENANT TO PAY
The Sellers covenant with the Buyer to pay to the Buyer an amount
equal to:-
2.1 any Liability for Taxation of the Company in respect of, by reference
to or in consequence of:-
2.1.1 any income, profits or gains earned, accrued or received
on or before Completion; or
2.1.2 any Event which occurred on or before Completion;
2.2 any liability for Taxation of the Company under Section 767A ICTA by
reason of corporation tax assessed on any company remaining unpaid
where the company in question is or was under the control of any
person who has at any time prior to Completion has control of the
Company within the meaning in Section 767 (B) 4 ICTA.
2.3 any reasonable costs or expenses properly incurred by the Company in
connection with any liability falling within 2.1 above.
2.4 All sums payable by the Sellers under this deed shall be paid free and
clear of all deductions or withholdings (including Taxation) unless
the deduction or withholding is required by law, in which event or in
the event that the Buyer shall incur any liability for Taxation
chargeable or assessable in respect of any payment pursuant to this
Schedule, the Covenantor shall pay such additional amounts as shall be
required to ensure that the net amount received and retained by the
Buyer (after Taxation) will equal the full amount which would have
been received and retained by it had no such deduction or withholding
been made and/or no such liability to Taxation been incurred and in
applying this clause 2.3 no account shall be taken of the extent to
which any liability for Taxation may be mitigated or offset by any
Relief available to the Buyer so that where such Relief is available
the additional amount payable hereunder shall be the amount which
would have been payable in the absence of such availability provided
that
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the Sellers shall have no obligation to make any payment pursuant to
this clause 2.4 to the extent that the liability arises as a result of
a voluntary act of the Buyer which takes the payment made by the
Sellers pursuant to this Schedule outside the provisions of ESC D33.
3 EXCLUSIONS
The covenant contained in paragraph 2 shall not apply and the Buyer
shall have no claim against the Sellers under it to the extent that:-
3.1 provision or reserve in respect of the liability in question or the
discharge or payment thereof was made in the Net Asset Statement;
3.2 the liability in question arises in respect of, by reference to or in
consequence of any income, profits or gains earned, accrued or
received (or any Event which occurred) after the Relevant Date and on
or before Completion in the ordinary course of business of the Company
and for this purpose, but without limitation, the following shall not
be regarded as being in the ordinary course of business:-
(i) the declaration or payment of any dividend or the making of
any other distribution; or
(ii) any transaction entered into by the Company in circumstances
where the consideration (if any) received by or as the case
may be, paid by the Company in respect thereof is less than or
more than the consideration deemed to have been received or
paid for Taxation purposes but to the extent only that the
Liability for Taxation arises in respect of the amount by
which the deemed consideration exceeds or is less than the
actual consideration; or
(iii) the Company ceasing or being deemed to cease, for Taxation
purposes, to be the member of any group or associated with any
other company or person whether in consequence of the entering
into of the Sale Agreement or anything done under it or
otherwise; or
(iv) an Event which gives rise to a liability on the Company in
respect of the income, profits or gains, whether actual or
deemed, of any non-resident person; or
(v) any other Event which gives rise to a liability to Taxation on
deemed (as opposed to actual) income, profits or gains;
(vi) the failure by the Company to operate correctly the PAYE
system, including deducting Tax (including national insurance
contributions) from all payments to or treated as made to or
benefits provided for employees or independent contractors of
the Company (including any such payments within s.134 ICTA)
duly accounting to the Inland Revenue for Tax deducted and for
all employers national insurance contributions in
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connection with any such payments made or benefits provided
and complying with its reporting obligations to the Inland
Revenue in connection with any such payments or benefits;
(vii) the failure of the Company to comply in all material respects
with its payment and other obligations under the legislation
relating to VAT (including all regulations and orders relating
thereto);
3.3 the Buyer has recovered damages from the Sellers for breach of any of
the Warranties in respect of the same liability;
3.4 the liability in question arises or is increased as a result of any
change or changes in legislation made after Completion or the
withdrawal or change after Completion of any published practice by any
Taxing Authority where such change or changes purport to be effective
retrospectively to periods prior to Completion except where the change
is:-
3.4.1 a change in legislation announced in the Budget on 2
July 1997 which brings into the charge to national
insurance contributions or within the PAYE system the
benefit in kind with a value of pound sterling 1,340,000
which was provided to the Sellers in respect of the
accounting period to 31 March 1997 in the form of a
reversionary interest in an offshore trust and the
benefit in kind with a value of pound sterling 1,050,000
which was provideD to the Sellers in respect of the
accounting period to 31 March 1996 in respect of a
reversionary interest in an offshore trust; or
3.4.2 a change in legislation announced in the Budget on 2
July 1997 which imposes a liability on the Company to
account for capital gains tax in respect of the gain
made by the Sellers on the transfer of the Shares
pursuant to this Agreement;
3.5 the liability in question would not have arisen but for a voluntary
act or omission of the Buyer or the Company after Completion outside
the ordinary course of business of the Company or the Buyer (as the
case may be) which the Buyer knew or ought reasonably to have known
would give rise to the Liability for Taxation in question and which is
not solely to ensure that the VAT/PAYE policies after Completion
comply with all relevant laws as at Completion;
3.6 the liability in question would not have arisen but for:
3.6.1 any claim, disclaimer or election made or notice of
consent given by the Buyer or the Company (as the case
may be) other than one the giving or doing of which was
taken into account in calculating any provision for
Taxation in the Net Asset Statement;
3.6.2 any failure by the Company after Completion to make any
claim election, surrender or disclaimer or give any
notice or do any other thing after Completion, the
making, giving
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or doing of which was taken into account in computing
any provision or reserve for Taxation in the Net Asset
Statement;
3.7 the liability in question arises as a result of any change in the date
to which the Company makes up its accounts or any change in accounting
policies of the Company or the basis upon which the Company values its
assets other than where such change is made to comply with generally
accepted accounting principles or law at Completion;
3.8 Reliefs arising before Completion other than Buyer's Reliefs are
available to set against the liability in question; or
3.9 the liability in question arises under regulation 107 or 108 of Part
XIV of the Value Added Tax (General) Regulations 1995 by reason of any
Event or change in circumstances after Completion.
4 AMOUNT OF LIABILITY FOR TAXATION
The amount of any Liability for Taxation shall be as follows:-
4.1 to the extent that a Liability for Taxation involves a liability of
the Company to make an actual payment or increased payment of
Taxation, the amount of such payment or increased payment;
4.2 to the extent that a Liability for Taxation involves a liability of
the Company to make a payment or increased payment of Taxation which
would have arisen but for being satisfied, avoided or reduced by any
Buyer's Relief, the amount of Taxation which the Buyer's Relief in
fact saves;
4.3 to the extent that a Liability for Taxation involves the disallowance,
loss, clawback, reduction, restriction or modification of any Buyer's
Relief (other than a right to a repayment of Taxation), the amount of
Taxation which the use of the Buyer's Relief would have saved had the
Buyer's Relief been used by the Company in the later of the period in
which the relevant Taxation Authority first disallows, withdraws,
claws-back, reduces, restricts or modifies the Buyer's Relief or
threatens to do so and the period in which it could first actually
have been used (taking into account whether the Company then had
sufficient profits or was otherwise in a position actually to use the
Buyer's Relief); and
4.4 to the extent that a Liability for Taxation involves the disallowance
or reduction by any Taxation Authority of a right to a repayment of
Taxation, the amount of the repayment so disallowed or lost.
5 TIME FOR PAYMENT
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5.1 Any amount which the Sellers are obliged to pay to the Buyer under
this Schedule shall be paid in cleared funds on or before the
following dates:-
5.1.1 in the case of a Liability for Taxation which involves a
liability of the Company to make an actual payment or
increased payment of Taxation, the later of the fifth
Business Day prior to the date on which the Taxation is
due and payable to the relevant Taxation Authority and
the fifth Business Day after service by the Buyer to the
Sellers of a written demand for payment;
5.1.2 in the case of a Liability for Taxation which involves a
liability of the Company to make a payment or increased
payment of Taxation which would have arisen but for
being satisfied, avoided or reduced by the use by the
Company of any Buyer's Relief, later of the fifth
Business Day prior to the date on which the Taxation
would have been payable to the relevant Taxation
Authority; and the fifth Business Day after service by
the Buyer to the Sellers of a written demand for
payment.
5.1.3 in any other case, the fifth Business Day after service
by the Buyer to the Sellers of a written demand for
payment.
6 CONDUCT OF CLAIMS
6.1 If the Buyer becomes aware of any Claim for Taxation which could give
rise to a claim being made by the Buyer under this Schedule it shall
notify the Sellers as soon as reasonably practicable and in any event
in a case involving an assessment with a time limit for appeal within
five Business Days after receipt and in any other case within 30 days
after becoming aware of the Claim for Taxation.
6.2 The Buyer agrees (if the Sellers indemnify and secure the Buyer and
the Company to the reasonable satisfaction of the Buyer against any
loss, liability, costs, damages or expenses which may thereby be
incurred) to take and procure that the Company shall take such action
and give such information and assistance as the Sellers may reasonably
request to resist, appeal or compromise any Claim for Taxation
notified to the Sellers in accordance with paragraph 6.1.
6.3 The action which the Sellers may request under paragraph 6.2 shall
include the Buyer or the Company applying to postpone (so far as
legally possible) the payment of any Taxation and allowing
professional advisers nominated by the Sellers to take over at the
Sellers's own expense the conduct of all negotiations and proceedings
in connection with the Claim for Taxation provided that the Buyer is
kept fully informed of all matters pertaining to the dispute and all
material correspondence is submitted in advance to the Buyer for
approval (such
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approval not to be unreasonably withheld or delayed) before submission
to the relevant Taxation Authority.
7 OVER PROVISIONS AND RELIEFS
7.1 The Sellers shall be entitled to require the Buyer to request the
auditors for the time being of the Company to determine (as experts
and not as arbitrators and at the expense of the Sellers) whether any
provision for Taxation in the Net Asset Statement has proved to be an
over-provision, and the amount of any over-provision so determined by
the auditors shall be dealt with as follows:-
7.1.1 the amount of the overprovision shall first be set off
against any payment then due from the Sellers under this
Schedule; and
7.1.2 to the extent there is an excess, a refund shall be made
to the Sellers as soon as reasonably practicable of any
previous payment or payments made by the Sellers under
this Schedule and not previously refunded under this
paragraph up to the amount of such excess; and
7.1.3 to the extent that the excess referred to in paragraph
7.1.2 is not exhausted under that clause, the remainder
of that excess shall be carried forward and set off
against any future payment or payments which become due
from the Sellers under this Schedule.
7.2 If any Liability for Taxation which has resulted in a payment having
been made by the Sellers under this Schedule or for breach of any
Warranty in relation to Taxation has given rise to a Relief for the
Company or the Buyer which would not otherwise have arisen, then:
7.2.1 the Buyer shall procure that full details of the Relief
are given to the Sellers as soon as reasonably
practicable;
7.2.2 the Buyer shall procure that relevant Company uses the
Relief (to the extent permitted by law) as soon as
reasonably practicable; and
7.2.3 as and when the liability of the Company or the Buyer to
make an actual payment or in respect of Taxation is
reduced by reason of that Relief from the amount that
that liability would have been but for the availability
of that Relief the Buyer shall make a payment to the
Sellers as soon as reasonably practicable of an amount
equal to the lesser of the amount previously paid and
the amount by which that liability is so reduced.
8 CLAIMS AGAINST THIRD PARTIES
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8.1 Where the Sellers have made a payment under this Schedule and the
Company is entitled to recover from any third party (including a
Taxation Authority) any sum in respect of the matter to which the
payment made by the Sellers relates, the Buyer shall notify the
Sellers of the entitlement as soon as reasonably practicable and in
any event within 30 days of the Buyer becoming aware of such
entitlement.
8.2 The Buyer shall or shall procure that the Company shall (at the
request and expense of the Sellers and upon the Sellers indemnifying
and securing the Buyer and the Company to the reasonable satisfaction
of the Buyer against all costs or expenses which may thereby be
incurred) take such action as the Sellers shall reasonably request to
enforce such recovery as is mentioned in paragraph 8.1 against the
third party in question and shall account to the Sellers as soon as
reasonably practicable for the lesser of any sums so recovered
(including any interest or repayment supplement paid by the third
party) and the amount paid by the Sellers under this Schedule.
9 BUYER'S COVENANT
9.1 The Buyer covenants with the Sellers to pay to the Sellers an amount
equal to any corporation tax liability of the Company (together with
all interest, penalties, costs and expenses incurred by the Sellers or
any company (other than the Company) of which he had control (within
the meaning of section 767B(4) ICTA) within the period of three years
before the date of this Agreement in connection therewith) in respect
of any accounting period of the Company beginning before the date of
the Agreement which is assessed on any of the Sellers or any company
(other than the Company) of which any of the Sellers had control
(within the meaning of section 767B(4) ICTA) within the period of
three years before the date of this Agreement pursuant to sections
767A and 767B ICTA.
9.2 Any payment which the Buyer is obliged to make pursuant to paragraph
9.1 shall be made on or before the date which is five Business Days
before the Sellers or the relevant company is obliged to pay the
corporation tax in question in order to avoid interest or penalties
and any payment not made on or before the due date for payment
pursuant to this paragraph shall carry interest at the rate of 2 per
cent above the base lending rate of Barclays Bank Plc from the due
date until payment.
9.3 The Buyer shall be entitled to set off against any amount which it is
liable to pay to the Sellers under this paragraph any amount which the
Buyer is liable to pay to the Sellers under paragraph 2 of this
Schedule.
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9.4 If the Sellers recover any amount in respect of a corporation tax
liability of the Company pursuant to clause 9.1 they shall not be
entitled to recover any amount in respect of the same liability
pursuant to Section 767 (B) (2) ICTA and vice versa.
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SCHEDULE 7
ESCROW ACCOUNT
1 The Buyer shall for a period of two years commencing on the day of
Completion be entitled to deduct in accordance with the provisions of
this Schedule from the Escrow Amount the amount of any claim in
respect of a breach of the Warranties or any claim that the Buyer may
have under the terms of the Tax Covenant (a "CLAIM") provided such
Claim has not been withdrawn or lapsed and provided the Buyer has
complied with Clause 6.1.
2 In settling a Claim the Buyer shall give the Sellers notice of the
Claim stating the nature of the Claim, the amount claimed and a
reasonable estimate of the Buyer's costs in connection with enforcing
the Claim (together an "AMOUNT CLAIMED").
3 Within 30 Business Days starting on the day after receipt of notice of
the Claim the Sellers or the Sellers' Solicitors shall give the Buyer
notice stating:-
3.1 whether or not the Sellers accept liability for the
Claim; and
3.2 whether or not the Sellers accept the Amount Claimed and
if they do not accept the Amount Claimed that part of
the Amount Claimed that they do accept.
4 If the Sellers or the Sellers' Solicitors fail to give notice in
accordance with paragraph 3, the amount of the Claim shall be paid to
the Buyer out of the Escrow Amount and the Buyer and the Sellers shall
instruct the Buyer's Solicitors and Sellers' Solicitors accordingly in
accordance with paragraph 9.
5 If the Sellers accept liability in respect of a Claim but accepts only
part of the Amount Claimed that part of the Amount Claimed that is
accepted shall be paid to the Buyer out of the Escrow Amount and the
Buyer and the Sellers shall instruct the Buyer's Solicitors and
Sellers' Solicitors accordingly in accordance with paragraph 9.
6 If the Sellers accept the Amount Claimed or there is a determination
of the amount payable in respect of the Claim by a court of competent
jurisdiction and such determination is final and not or no longer
appealable, the amount so accepted or determined (less any money
previously paid under paragraph 5 in respect of such Claim) shall be
paid to the Buyer and the Buyer and the Sellers shall instruct the
Buyer's Solicitors and Sellers' Solicitors accordingly in accordance
with paragraph 9.
7 To the extent that a payment to the Buyer out of the Escrow Amount in
respect of a Claim is less than the Amount Claimed it shall be a
payment on account of the amount agreed or determined to be payable in
respect of that Claim.
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8 The Buyer and the Sellers shall ensure that all rights to the Escrow
Account remain free from any Encumbrance except as set out in this
Schedule.
9 If the Sellers or the Buyer is entitled to the Escrow Amount (or part
thereof) the Buyer and the Sellers shall within 20 Business Days
commencing on the day the entitlement arises jointly instruct the
Buyer's Solicitors and the Sellers' Solicitors in the form of Schedule
1 to the Escrow Account Instruction Letter to release the money to the
Sellers or Buyer, as appropriate.
10 Upon the expiration of one year after Completion fifty per cent of the
excess of the amount then standing to the credit of the Escrow Account
over the Outstanding Amount shall be paid to the Sellers and the Buyer
and the Sellers shall instruct the Buyer's Solicitors and the Sellers'
Solicitors accordingly in accordance with paragraph 9.
11 Upon the expiration of two years after Completion:-
11.1 the amount then standing to the credit of the Escrow Account (less the
total of all the Outstanding Amounts) shall be paid to the Sellers and
the Buyer and the Sellers shall instruct the Buyer's Solicitors and
the Sellers' Solicitors accordingly in accordance with paragraph 9;
and thereafter
11.2 any amount standing to the credit of the Escrow Account representing
the balance of an Outstanding Amount in respect of any Claim which is
agreed by the parties or determined pursuant to Clause 6 as not
payable to the Buyer shall be paid to the Sellers and the Buyer and
the Sellers shall instruct the Buyer's Solicitors and the Sellers'
Solicitors accordingly in accordance with paragraph 9.
12 The Buyer's Solicitors and the Sellers' Solicitors shall be entitled
to withdraw from the Escrow Account amounts equal to any tax on the
interest earned on the monies in the Escrow Account for which they are
or may become liable.
13 Any costs incurred in respect of the establishment and maintenance of
the Escrow Account shall be debited to the Escrow Account.
14 "OUTSTANDING AMOUNT" shall mean in respect of any Claim outstanding at
the relevant time, the lesser of:-
14.1 the Amount Claimed; and
14.2 if the Sellers do not accept the Amount Claimed, the sum
determined as being the estimated likely liability of
the Sellers in respect of such Claim by counsel of
appropriate experience and standing ("the Counsel")
appointed by the Buyer and the Sellers or, in the
absence of agreement, Counsel nominated by the Chairman
for the time being of the Council of the Bar (or if he
is unable to nominate then by the Vice Chairman or other
duly authorised officer of the Council of the Bar), such
Counsel acting as expert and not
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arbitrator, whose decision shall, in the absence of
manifest error, be final and binding and whose costs
shall be deducted from the Escrow Amount or otherwise as
he directs.
Provided always that the sum determined in accordance with paragraph
14.2 is for the purpose only of determining the sums to be paid
pursuant to paragraphs 10 and 11.1 and shall not otherwise be used in
determining the liability of the Sellers in respect of any Claim.
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SCHEDULE 8
PENSIONS
1 In this Schedule:
"THE SCHEME" means the Self-Administered Pension Scheme
(as defined in Clause 1.1)
2 The Buyer and the Sellers hereby agree that the Company's obligations,
liabilities, duties and responsibilities under the Scheme shall cease
upon Completion and that the Company shall not be liable to make any
contribution to the Scheme or to pay any liability, tax, costs or
expenses in respect of the Scheme after Completion (save as provided
for in the Accounts).
3 The Buyer and the Sellers hereby agree to procure that the Scheme
shall continue to exist after Completion as a closed scheme (as
permitted under Rule 39.3(b) of the rules governing the Scheme) and
that the Company shall continue to act as principal employer of the
Scheme until the earliest of the following events:-
3.1 the Scheme ceases to hold any assets;
3.2 the expiry of Notice (as hereinafter defined) in writing
given by the Company to the trustees of the Scheme of
its intention to cease acting as principal employer;
3.3 the members of the Executive Scheme become employed by
another person or company which is capable of and agrees
to take over the role of principal employer in place of
the Company;
3.4 the trustees of the Scheme resolve to wind up the
Scheme;
For the purpose of sub-paragraph 3.2 of this Schedule "Notice" means
any period of twelve months commencing not earlier than on the first
anniversary of Completion.
4 The Sellers hereby agree to procure that the provisions of the
definitive deed and rules governing the Scheme shall be amended if and
so far as necessary as soon as practicable after Completion in order
to reflect the agreed terms of this Schedule.
5. The Sellers hereby indemnify and hold harmless the Buyer and the
Company against all liabilities, reasonable costs, demands and losses
which either may suffer at any time after Completion and which derive
from or relate in any way to the Scheme, save for any liabilities of
the Company under the terms of the lease dated 21 February 1990
between (1) the Sellers and W F (Trustees) Limited and (2) the
Company.
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EXECUTED as a DEED )
(but not delivered until dated) by ) /s/ Vanessa Rosamunde
VANESSA ROSAMUNDE ) Wynn Griffiths
WYNN-GRIFFITHS in the presence of:- )
Witness signature:
Witness name:
Witness address:
EXECUTED as a DEED )
(but not delivered until dated) by ) /s/ David Wynn
DAVID WYNN GRIFFITHS ) Griffiths
in the presence of:- )
Witness signature:
Witness name:
Witness address:
EXECUTED as a DEED )
(but not delivered until dated) by ) /s/ Wayne A. Palladino
TRANSWORLD HEALTHCARE ) Director
(UK) LIMITED acting by:- )
/s/ Robert W. Fine
Director/Secretary
65
