CONFORMED COPY
DATED 6 APRIL 2000
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(1) W-A ▇▇▇▇▇▇▇▇, ▇ ▇ ▇▇▇▇▇▇▇▇ AND OTHERS
(2) TRANSWORLD HEALTHCARE (UK) LIMITED
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SHARE SALE AND
PURCHASE AGREEMENT
CONFORMED COPY
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▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TEL: ▇▇▇ ▇▇▇▇ ▇▇▇▇
FAX: ▇▇▇ ▇▇▇▇ ▇▇▇▇
REF: 815/943
CONTENTS
PAGE
1 Definitions and Interpretation...................................1
2 Sale of Shares...................................................8
3 Earn-Out.........................................................9
4 Pre-Tax Profits.................................................14
5 Warranties......................................................16
6 Completion......................................................18
7 Sellers' Guarantees.............................................21
8 Competition.....................................................22
9 Ancillary Provisions............................................23
9.1 Confidential Information...............................23
9.3 Further Assurances.....................................24
9.4 Assignment.............................................24
9.5 Severability...........................................25
9.6 Costs and expenses.....................................25
9.7 Entire agreement.......................................25
9.8 Announcements..........................................25
9.9 Non-merger.............................................26
9.10 Counterparts...........................................26
9.11 Notices................................................26
9.12 Governing law..........................................28
Schedule 1...............................................................29
Part 1.......................................................29
The Sellers..................................................29
Schedule 1...............................................................31
Part 2.......................................................31
Details of the Company.......................................31
Schedule 2...............................................................32
Part 1.......................................................32
Warranties...................................................32
Schedule 2...............................................................63
Part 2.......................................................63
Limitations..................................................63
Schedule 2...............................................................67
Part 3.......................................................67
Buyer's Warranties...........................................67
Schedule 3...............................................................69
Part I.......................................................69
UK Premises..................................................69
Schedule 4...............................................................71
Tax Deed.....................................................71
1 Definitions And Interpretation..................................71
2 Covenant........................................................73
3 Limitations to the Covenant.....................................75
4 Claims Procedures...............................................77
5 Payments........................................................79
6 Recoveries......................................................80
7 Joint and Several Obligations...................................81
8 Assignment......................................................81
9 General.........................................................81
Schedule 5...............................................................84
Accounting Policies..........................................84
DATED: 6 APRIL 2000
BETWEEN:
(1) The several persons whose names and addresses are set out in column
(1) of part 1 of schedule 1 (the "SELLERS"); and
(2) TRANSWORLD HEALTHCARE (UK) LIMITED a company incorporated in England
and Wales with registered number 3370146, having its registered office
at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the
"BUYER")
1 DEFINITIONS AND INTERPRETATION
In this Agreement unless inconsistent with the context or otherwise
specified:-
1.1 the following expressions have the following meanings:-
"ACCOUNTS" : the audited financial statements of
the Company comprising the profit and
loss account of the Company for the
accounting period ended on 28
November 1999 and the audited balance
sheet of the Company as at the
Balance Sheet Date together with the
notes on such financial statements,
director's report and auditors
certificate;
"ACCOUNTS" : means financial statements of the
Company, comprising the balance sheet
of the Company, the balance sheet and
profit and loss account of the
Company together with the notes
thereon as at and for the financial
period specified;
"2000 ACCOUNTS" : means the accounts as at and for the
12 month period ending on 3 December
2000 prepared in accordance with
clause 4;
"2001 ACCOUNTS" : means the accounts as at and for the
12 month period ending on 2 December
2001 prepared in accordance with
clause 4;
"THIS AGREEMENT" : this agreement (and the schedules to
it), as varied from time to time
pursuant to its terms;
"AUDITORS" : means the auditors from time to time
of the Buyer;
"AVERAGE GROWTH" : means the average growth in Pre-Tax
Profits over two years calculated by
adding together the per centage
growth in Pre-Tax Profits in respect
of the 2000 Pre-Tax Profits as
against the Pre-Tax Profits for the
period ended 28 November 1999 (deemed
Pre-Tax Profits for such period
being(pound)1,100,000) and in respect
of 2001 Pre-Tax Profits as against
the 2000 Pre-Tax Profits and dividing
the resulting figure by two;
"BALANCE SHEET DATE" : 28 November 1999;
"BUSINESS IP" : all Intellectual Property used by the
Company in its business;
"BUYER'S GROUP" : the group of companies comprising the
Buyer and any company which is for
the time being a subsidiary of the
Buyer and "BUYER'S GROUP MEMBER"
means any one of them;
"BUYER'S SOLICITORS" : Ashurst ▇▇▇▇▇▇ ▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ and any successor firm;
"COMPANY" : Nightingale Nursing Bureau Limited,
brief particulars of which are set
out in part 2 of schedule 1;
"COMPLETION" : completion of the sale and purchase
of the Shares in accordance with
clause 6;
"COMPUTER SYSTEMS" : the computer hardware, firmware and
peripherals belonging to or used by
the Company and all material computer
programs, operating systems and
2
other software licensed to the
Company or used by the Company or
resident on any Company computer
equipment in combination with one
another;
"CONFIDENTIAL INFORMATION" all information, trade secrets and
know-how relating to the Company's
business, financial or other affairs
(including future plans and targets
of the Company) which is not in the
public domain;
"CONSIDERATION SHARES" : the 1,050,000 A1 ordinary shares of
five ▇▇▇▇▇ each in the capital of the
Buyer to be issued pursuant to clause
3;
"DEFERRED CONSIDERATION: means the dates set out for payment
of the Deferred
PAYMENT DATES" Consideration in clause 3.7;
"DEFERRED CONSIDERATION": means together the sums payable
pursuant to clause 3;
"DISCLOSURE LETTER" : the letter of the same date as the
date of this Agreement from the
Sellers to the Buyer disclosing
certain exceptions to the Warranties;
"EARN-OUT ACCOUNTS" : means one or both of the 2000 and
2001 Accounts (as the context may
require);
"ENCUMBRANCE" : any mortgage, charge (fixed or
floating), pledge, lien,
hypothecation, trust, right of
set-off or other third party right or
interest (legal or equitable)
including any right of pre-emption,
assignment by way of security,
reservation of title or any other
security interest of any kind
howsoever created or arising or any
other agreement or arrangement
(including a sale and repurchase
arrangement) having similar effect;
"ESCROW ACCOUNT" : means an account in the joint names
of the Buyer's Solicitors and the
Sellers' Solicitors opened and
3
operated in accordance with the
Escrow Instruction letter;
"ESCROW INSTRUCTION LETTER" : means the instruction letter from the
Buyer and the Sellers to the Buyer's
Solicitors and the Sellers'
Solicitors in the agreed form;
"GROWTH" : means the growth in Pre-Tax Profits
as compared with the previous
financial period, which in the case
of the 2000 Pre-Tax Profits will be
the period to 28 November 1999 (in
respect of which Pre-Tax Profits will
be deemed to be(pound)1,100,000) and
in the case of the 2001 Pre-Tax
Profits will be the 2000 Pre-Tax
Profits;
"GUARANTEE" : the guarantees, details of which are
listed at paragraph 13.3 of the
specific disclosures in the
Disclosure Letter;
"HOMECARE BUSINESS" : the business of providing nursing
support to individuals at home
carried on by the Company;
"ICTA" : the Income and Corporation Taxes ▇▇▇
▇▇▇▇;
"INTELLECTUAL PROPERTY : copyright, patents, registered and
unregistered trade and service marks,
trade names, domain names, registered
and unregistered design rights,
semiconductor topography and chip
design rights, know-how, trade
secrets, confidential and proprietary
information and other intellectual
property rights and rights of a
similar nature in any jurisdiction
and applications and registrations
for and extensions and renewals of
such rights in any jurisdiction;
"MANAGEMENT ACCOUNTS" : Management accounts for the period
from 30 November 1998 to 28 February
2000, in the agreed form;
4
"NON-CONTRACT CLIENT : the business of supplying temporary nursing
BUSINESS" staff to hospitals under the Company's
standard terms and conditions carried
on by the Company;
"PARTIES" : the parties to this Agreement; and "PARTY"
means any of them;
"PERMIT" : a permit, licence, consent, approval,
certificate, registration and all other
authorisations necessary in any
jurisdiction for the proper and efficient
operation of the Company's business;
"PREMISES" : the premises specified in schedule 3;
"PRE-TAX PROFITS" : means the net profits on ordinary
activities of the Company before deducting
United Kingdom corporation tax (excluding,
for the avoidance of doubt, profits and
losses of a capital nature) for the
financial period in question as drawn from
the relevant Earn-Out Accounts and agreed
or determined as such pursuant to clause 4;
"1999 PRE-TAX PROFITS" : means the Pre-Tax Profits in respect of the
12 month period ended 28 November 1999
which shall be deemed to be
(pound)1,100,000;
"2000 PRE-TAX PROFITS" : means the Pre-Tax Profits in respect of the
12 month period ending 3 December 2000;
"2001 PRE-TAX PROFITS" : means the Pre-Tax Profits in respect of the
12 month period ending 2 December 2001;
"PRICE" : the sum of(pound)9,651,000 and the Deferred
Consideration (if any);
"RELATED PERSON" : shall be in relation to one person a person
connected with that person in accordance
with section 839 of
5
ICTA except that in construing section 839,
"control" has the meaning given by Section
840 or Section 416 ICTA so that there is
control whenever Section 840 or 416 ICTA
requires);
"SELLERS" : the several persons whose names and
addresses are set out in column (1) of part
1 of schedule 1;
"SELLERS' ACCOUNT" : means the account in the name of ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Client No. 2 Account number
20341109 at The Royal Bank of Scotland PLC,
London City Office Branch, (Bank Sort Code
15-10-00);
"SELLERS' REPRESENTATIVE" : means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or such other person
as may be appointed from time to time by
service of a notice in writing on the Buyer
specifying such other person duly signed by
persons who are entitled to a majority of
the Deferred Consideration;
"SELLERS' SOLICITORS" : ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇▇ ▇▇ ▇▇▇▇'▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ and any
successor firm;
"SHARES" : all of the issued shares in the capital of
the Company;
"SOLE AGENCY BUSINESS" : the business of supplying nursing staff to
hospitals under sole agency agreements
carried on by the Company;
"TARGET RETURN" : means in relation to the 2000 Pre-Tax
Profits (pound)1,320,000 and in relation to
the 2001 Pre-Tax Profits (pound)1,584,000;
"TAX AUTHORITY" : any local, municipal, governmental, state,
federal or other fiscal or revenue
authority, body or official anywhere in the
world (which shall include reference to
customs and excise authorities) competent
to impose Taxation;
6
"TAX DEED" : the deed to be entered into between (1) the
Sellers and (2) the Buyer in the form set
out in schedule 4;
"TCGA" : the Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇;
"TMA" : the Taxes Management ▇▇▇ ▇▇▇▇;
"VAT" : value added tax;
"VATA 1994" : the Value Added Tax ▇▇▇ ▇▇▇▇;
"WARRANTIES" : the warranties set out in part 1 of
schedule 2;
"WORKING DAY" : any week day (except Saturdays and public
holidays);
1.2 references to clauses and schedules are to clauses of and the
schedules to this Agreement;
1.3 words importing gender include each gender;
1.4 references to persons include bodies corporate, firms and
unincorporated associations;
1.5 the singular includes the plural and vice versa;
1.6 clause headings are included for the convenience of the
Parties only and do not affect its interpretation;
1.7 references to statutory provisions shall be construed as
references to those provisions as respectively amended,
consolidated, extended or re-enacted from time to time and
shall include any orders, regulations, instruments or other
subordinate legislation made under the relevant statute
(except to the extent that any amendment, consolidation,
extension or re-enactment of any statutory provision or the
making of any subordinate legislation in each case after the
date of this Agreement would increase the Seller's liability
under this Agreement);
1.8 the expressions "TAXATION" and "TAX" have the meanings given
to them in clause 1 of the Tax Deed;
7
1.9 the expression "COMPANY" has the same meaning as in the
definition in section 735 of the Companies ▇▇▇ ▇▇▇▇, the
expressions "DIRECTOR" and "SHADOW DIRECTOR" have the
respective meanings given to them by section 741 of the
Companies ▇▇▇ ▇▇▇▇ and the provisions of sections 736 and 736A
of the Companies ▇▇▇ ▇▇▇▇ apply in determining whether one
company is a subsidiary or holding company of another;
1.10 the expression "DISCLOSED" means fairly disclosed to the Buyer
in or by the Disclosure Letter;
1.11 a reference to an SSAP means a Statement of Standard
Accounting Practice published by the Institute of Chartered
Accountants in England and Wales or a Financial Reporting
Standard adopted or issued by the Accounting Standards Board;
1.12 where a statement is qualified by the expression "SO FAR AS
THE SELLERS ARE AWARE" or "TO THE BEST OF THE KNOWLEDGE,
INFORMATION AND BELIEF OF THE SELLERS", or any similar
expression, that statement shall be deemed to be made on the
basis that the Sellers' have made all reasonable enquiries to
ascertain the relevant facts of each other and of ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇; and
1.13 the expression "IN THE AGREED TERMS" means in relation to any
document, in the form agreed between the Parties and for the
purposes of identification, signed on the date of this
Agreement by the Buyers' Solicitors and the Sellers'
Solicitors.
2 SALE OF SHARES
2.1 Subject to the terms of this Agreement and for the
consideration appearing in it, the Sellers shall sell with
full title guarantee and the Buyer shall buy the Shares free
from Encumbrances and together with all rights and benefits
now and hereafter attaching or accruing to them and all
dividends and distributions declared, made or paid after the
Balance Sheet Date.
2.2 Each of the Sellers waives or agrees to procure the waiver of
any rights or restrictions conferred upon them or any other
person which may exist in relation to the Shares under the
Articles of Association of the Company or otherwise.
8
2.3 The Buyer shall not be obliged to complete the purchase of
any of the Shares unless the Sellers complete the sale of all
the Shares simultaneously, but completion of the purchase of
some Shares shall not affect the rights of the Buyer with
respect to its rights to the other Shares.
3 EARN-OUT
3.1 The consideration for the sale of the Shares shall be the
aggregate of:-
3.1.1 the sum of(pound)9,651,000 to be satisfied at
Completion as to(pound)8,601,000 in cash allocated
between the Sellers in the amounts set out against
each of the Sellers' names under the heading "Cash
((pound))" in column 6 of schedule 1, part 1 in
cleared and immediately available funds for same day
value by telegraphic transfer to the Sellers' Account
and as to(pound)1,050,000 by the allotment and issue
to the Sellers of such numbers of Consideration
Shares as are set out against each of the Sellers'
names under the heading "Shares" in column 6 of
schedule 1, part 1 at a price of(pound)1.00 per share
credited as fully paid and save as set out in the
Articles of Association of the Buyer ranking pari
passu with the existing issued ordinary shares of 5p
each in the capital of the Buyer; and
3.1.2 an additional sum of up to (pound)3,500,000 in
aggregate Deferred Consideration dependent upon the
2000 Pre-Tax Profits and the 2001 Pre-Tax Profits on
the basis and subject to the terms and conditions set
out in this clause 3.
3.2 Subject as set out in this clause 3 and in particular clause
3.6, the sum of (pound)1,500,000 shall be payable to the
Sellers by way of Deferred Consideration if the 2000 Pre-Tax
Profits are at least (pound)1,320,000.
3.3 Subject as set out in this clause 3 and in particular clause
3.6, the sum of (pound)1,500,000 shall be payable to the
Sellers by way of Deferred Consideration if the 2001 Pre-Tax
Profits are at least (pound)1,584,000.
3.4 If the Target Return is achieved in respect of both the 2000
Pre-Tax Profits and the 2001 Pre-Tax Profits then Deferred
Consideration of up to (pound)500,000 in aggregate may be
payable to the Sellers in addition to the sums payable
pursuant to clauses 3.2 and 3.3, the amount of such additional
sum shall be calculated in accordance with 3.4.1.
9
3.4.1 If the considerations in clause 3.4 are satisfied,
the Average Growth shall be calculated and additional
consideration shall be payable to the Sellers in the
following amounts:-
(a) of(pound)100,000 in aggregate if the Average
Growth is equal to or greater than 23 per
cent and less than 24 per cent; or
(b) of(pound)300,000 in aggregate if the Average
Growth is equal to or greater than 24 per
cent and less than 25 per cent; or
(c) of(pound)500,000 in aggregate if the Average
Growth is equal to or greater than 25 per
cent;
if the Average Growth is less than 23 per cent no
further Deferred Consideration shall be payable.
3.5 If the Target Return has not been achieved in respect of both
the 2000 Pre-Tax Profits and the 2001 Pre-Tax Profits none of
clauses 3.2, 3.3 and 3.4 shall be applicable and any payment
of Deferred Consideration shall be calculated on the basis of
the Average Growth. The Deferred Consideration shall be
payable (if at all) in the following sums:
3.5.1 of (pound)1,000,000 in aggregate if the Average
Growth is equal to or greater than 18 per cent and
less than 18.5 per cent; or
3.5.2 of (pound)1,500,000 in aggregate if the Average
Growth is equal to or greater than 18.5 per cent and
less than 19 per cent; or
3.5.3 of (pound)2,000,000 in aggregate if the Average
Growth is equal to or greater than 19 per cent and
less than 19.5 per cent; or
3.5.4 of (pound)2,500,000 in aggregate if the Average
Growth is equal to or greater than 19.5 per cent and
less than 20 per cent;
if the Average Growth is less than 18 per cent no Deferred
Consideration shall be payable to the Sellers.
10
3.6 3.6.1 If the Target Return is achieved in respect of
either but not both of the 2000 Pre-Tax Profits or
the 2001 Pre-Tax Profits then the Deferred
Consideration shall be payable to the Sellers as set
out in this clause 3.6.
3.6.2 If the Target Return is not achieved in respect of
the 2000 Pre-Tax Profits:-
(a) there shall be no Deferred Consideration
payable pursuant to clauses 3.2 or 3.4;
(b) whether or not the Target Return is achieved
in respect of the 2001 Pre-Tax Profits there
shall be no Deferred Consideration payable
pursuant to clause 3.3;
(c) the Average Growth shall then be calculated
and using the Average Growth figure there
shall be calculated and payable to the
Sellers the amount that would be payable
pursuant to clause 3.5 if the Deferred
Consideration fell to be calculated pursuant
to that clause save that Deferred
Consideration of (pound)3,000,000 shall be
payable in aggregate if the Average Growth
is equal to or greater than 20 per cent.
3.6.3 If the Target Return is achieved in respect of the
2000 Pre-Tax Profits but the Target Return is not
achieved in respect of the 2001 Pre-Tax Profits:-
(a) Deferred Consideration shall be payable in
accordance with the terms of clause 3.2;
(b) there shall be no Deferred Consideration
payable pursuant to clause 3.3;
(c) if the 2001 Pre-Tax Profits are less than
(pound)1,478,400 no additional Deferred
Consideration shall be payable and the
Sellers' Consideration Shares shall convert
into deferred shares in accordance with
article 34.1 of the articles of association
of the Buyer unless the sum of
(pound)1,500,000 shall be paid in
immediately available funds by the Sellers
to the Buyer within twenty one days of
determination of the 2001 Pre-Tax Profits in
accordance with clause 4;
11
(d) if the 2001 Pre-Tax Profits are equal to or
more than(pound)1,478,400 the Average Growth
shall then be calculated and using the
Average Growth figure there shall be
calculated the amount that would be payable
pursuant to Clause 3.5 if the Deferred
Consideration fell to be calculated pursuant
to that clause save that Deferred
Consideration of (pound)3,000,000 shall be
payable in aggregate if Average Growth is
equal to or greater than 20 per cent and if
the amount so calculated is greater than the
amount paid pursuant to Clause 3.6.3(a)
above the excess shall be paid to the
Sellers.
3.7 Any amounts payable pursuant to clauses 3.1 to 3.6 shall be
paid within fifteen Business Days after the date on which the
relevant Pre-Tax Profits shall be agreed or determined
pursuant to clause 3 and shall be satisfied in cash to be
allocated between the Sellers in the proportions set out
against each of the Sellers' names in column 7 of schedule 1,
part 1. Provided that, subject to the Pre-Tax Profits having
been determined in accordance with clause 4, such amounts
shall be paid no later than 6 months after the end of the
relevant financial period.
3.8 Any payment of cash pursuant to clauses 3.1 to 3.6 shall be
made by means of telegraphic transfer (or such other means as
the Sellers' Representative and Buyer shall agree in writing)
on the Deferred Consideration Payment Date to the Sellers'
Account and receipt of such sum shall be good discharge to the
Buyer.
3.9 The Sellers' Representative is irrevocably authorised to act
on behalf of the Sellers for the purpose of giving any consent
or approval pursuant to or approving any amendment of any of
the provisions of this agreement relating to or having a
bearing on the calculation of the amount of the Deferred
Consideration or resolving with the Buyer any dispute as to
the interpretation of this agreement relating to or having a
bearing on the same.
3.10 Each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ agree not to
transfer the Consideration Shares (or any shares deriving
therefrom) prior to 6 April 2002 unless, subject as set out in
this clause, prior to such date a listing for such Shares (or
any shares deriving therefrom) has been obtained when, if the
Consideration Shares have converted into ordinary shares in
accordance with Article 34.1 of the Articles of Association of
the Buyer they shall be free to sell such shares. If such
Shares shall not have converted into ordinary shares a third
party on-market sale of
12
the Consideration Shares may be made provided that
arrangements reasonably satisfactory to the Buyer are made to
ensure that an amount equal to the purchase price to be paid
by the transferee of any shares to be transferred and held by
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is paid into the Escrow
Account. At such time as there is (pound)1,500,000 in
aggregate in the Escrow Account there shall be no further
restrictions upon the transfer of Consideration Shares by
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ other than those set out in
the Articles or clause 3.12. All sums held in the Escrow
Account shall be released to the Sellers when such Shares
would otherwise have converted into ordinary shares under
Article 34.1 \(a) and (b) of the Buyer's Articles of
Association. Sums held in the Escrow Account shall be released
to the Buyer in circumstances where clause 3.6.3 applies and
the sum of (pound)1,500,000 referred to in clause 3.6.3 has
not been paid to the Buyer in which case sums held in the
Escrow Account, to the extent required to satisfy such sum,
shall be released to the Buyer. Interest shall follow
principal.
3.11 For the purposes of this clause the following shall constitute
a transfer of shares in the Buyer:-
(a) any direction (by way of renunciation or otherwise)
by a holder entitled to an allotment or transfer of
shares that a share be allotted or issued or
transferred to some person other than himself; or
(b) any sale or other disposition of any legal or
equitable interest in the share (including any voting
right attached to it)
(i) whether or not by the relevant holder;
(ii) whether or not for consideration; and
(iii) whether or not effected by an instrument
in writing.
3.12 Each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ agree to enter into
such reasonable and customary restrictions in relation to the
Consideration Shares (or any shares deriving therefrom) held
by them following a listing as any investment bank, sponsor or
similar entity engaged by the Buyer or other member of the
Buyer's group or any holding company of the Buyer shall
request on a listing of any or all of the shares of the Buyer
(or other
13
member of the Buyer's Group or any holding company of the Buyer on any
stock exchange).
4 PRE-TAX PROFITS
4.1 For the purpose of determining the Pre-Tax Profits the Buyer
shall cause the Company to prepare and deliver to each party
and the Auditors, as soon as practicable following the end of
the period to which the relevant Earn-Out Accounts relate, but
in any event within 60 days after such date, draft Earn-Out
Accounts. The Earn-Out Accounts shall be prepared in
accordance with Schedule 5 and the Companies Acts 1985 to 1989
(as amended).
4.2 Immediately following preparation of the relevant draft
Earn-Out Accounts by the Company, the Buyer shall instruct the
Auditors to review the same and to determine the Pre-Tax
Profits for the relevant period as soon as possible and in any
event not later than 90 days after the end of the period to
which the relevant Earn-Out Accounts relate.
4.3 Immediately following the Auditors' determination of the
relevant Pre-Tax Profits, there shall be supplied to the Buyer
and the Sellers' Representative a statement of the relevant
Pre-Tax Profits determined by the Auditors together with the
draft Earn-Out Accounts and such supporting documentation as
is necessary to enable the Sellers to review each of them. The
Buyer and the Sellers' Representative shall have a period of
30 days (the "PROFIT AGREEMENT PERIOD") in which to review and
agree or dispute the Auditors' determination of the relevant
Pre-Tax Profits.
4.4 The Auditors' determination of the relevant Pre-Tax Profits
shall in the absence of the service of a notice within the
Profit 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.
4.5 In the event that the relevant Pre-Tax Profits have not been
agreed by the termination of the Profit Agreement Period the
determination of the Pre-Tax Profits shall be referred to an
independent firm of chartered accountants (the "EXPERT")
appointed by agreement between the Sellers' Representative and
Buyer or, in default of agreement on such appointment within
ten Business Days of the expiry of the Profit Agreement
Period, on the application of either the Buyer or the Sellers'
14
Representative, by the President for the time being of the
Institute of Chartered Accountants in England and Wales, or
his duly appointed deputy. In making such determination the
Expert shall act as an expert and not as an arbitrator and his
decision shall (in the absence of manifest error (and the
Expert shall give reasons for his determination)) be final and
binding on the Parties. Each Party shall bear the costs and
expenses of all counsel and other advisers, witnesses and
employees retained by it and the costs and expenses of the
Expert shall be borne by the Parties in the proportions he may
direct or, in the absence of direction, equally. Subject to
any rule of law or of any regulatory body or any provision of
any contract or arrangement entered into prior to the date of
this Agreement to the contrary, the Buyer shall afford as soon
as reasonably practicable upon request to the Sellers and
their agents and to the Expert all facilities and access to
the Company's premises, books, accounts, records, returns and
other documents as may be in the Company's possession or
control as may be required by the Expert to make his
determination.
4.6 The Buyer hereby covenants with the Sellers that during the
period commencing on the date hereof and ending on 2 December
2001 the business of the Company as carried on prior to the
date hereof shall be carried on and developed solely within
the Company without prejudice to the Buyer's ability to run
and develop its existing business (including without
limitation its existing operations in ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇)
and to acquire similar or competing businesses.
4.7 The Sellers agree with the Buyer (on behalf of itself and on
behalf of the Company) to pay to the Buyer the amount of any
sums paid pursuant to clause 4.7.1 and 4.7.2 and to keep the
Buyer and the Company fully indemnified against any cost,
liabilities or expenses associated with or arising from:-
4.7.1 any costs, sums or expenses paid by or payable by the
Company and associated with or relating to the sale
and purchase, including any management bonuses (other
than normal Christmas bonuses and bonuses of
(pound)9,206 and AUS$1,527 to ▇▇▇ ▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇ respectively); or
4.7.2 arising from any payment, sale, transfer, gift,
distribution or other similar or like payment made
other than in the ordinary course of trading on or
after 28 November 1999 or arising from a breach of
warranties 11.3, 11.5, 11.6, 11.7 or 11.8.
15
5 WARRANTIES
5.1 The Sellers warrant to the Buyer in the terms set out in part
1 of schedule 2.
5.2 Each of the Warranties set out in each paragraph of part 1 of
schedule 2 is separate and independent and shall not be
limited by the terms of any of the other Warranties or any
other term of this agreement.
5.3 The Warranties are given subject to the matters disclosed.
5.4 Without prejudice to the Buyer's duty to mitigate its loss,
the Sellers' liability in respect of any claim under the
Warranties shall be limited as provided in part 2 of schedule
2.
5.5 The Buyer acknowledges that it has not entered into this
Agreement in reliance upon any representation or warranty
other than the Warranties. Save for the warranties and
indemnities set out in this Agreement and the Tax Deed or as
required by statute, all representations and warranties,
express or implied, statutory or otherwise, in respect of the
Company and/or any business or assets of the Company are
expressly excluded. Without prejudice to the foregoing the
Buyer irrevocably and unconditionally waives any right it may
have to claim rescission for misrepresentation whether or not
contained in this Agreement, or damages for breach of any
warranty not contained in this Agreement or the Tax Deed
unless such misrepresentation or warranty was made
fraudulently.
5.6 Any information supplied by or on behalf of the Company to or
on behalf of any or all of the Sellers in connection with the
Warranties, the Disclosure Letter or otherwise in relation to
the business and affairs of the Company shall not constitute a
representation or warranty or guarantee as to the accuracy
thereof by the Company and each of the Sellers undertakes to
the Buyer that it will not bring any and all claims which it
might otherwise have against the Company or any of its
respective directors, employees, agents or advisers in respect
thereof.
5.7 Without restricting the rights of the Buyer or the ability of
the Buyer to claim damages on any basis available to it if the
Sellers are in breach of any of the Warranties the Seller
shall pay to the Buyer the amount necessary to put the Company
into the position which would have existed if the said
Warranties had not
16
been breached together with all reasonable costs and expenses
incurred by the Buyer and the Company as a result of such
breach.
5.8 Each of ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the
"TRUSTEES") the Trustees of the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1998 Settlement
and the Doctor ▇.▇. ▇▇▇▇▇▇▇▇ Bare Trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(the "TRUSTS") undertakes in relation to the Trusts from the
date of this Agreement until whichever is the later of:-
5.8.1 two years after the date hereof; or
5.8.2 if before the expiry of such two year period notice
of any claim hereunder or under the Tax Deed has been
given to him in his capacity as a Trustee the date
upon which all such claims shall have been settled in
full or withdrawn or finally dismissed;
such Trustee will not:
5.8.3 without the prior written consent of the Buyer (such
consent not to be unreasonably withheld) mortgage
charge or pledge any assets of the relevant Trust or
use such assets in any other way as security for any
borrowings (whether of the Trustees or any other
person);
5.8.4 distribute such assets of the relevant Trust (whether
by way of outright transfer loan or otherwise) to
beneficiaries of the relevant Trust who are not
themselves Sellers without the consent of the Buyer.
For the avoidance of doubt, the word "ASSETS" as used
in this clause is not intended to include any income
arising thereon.
5.9 In the event that any of the Trustees (the "RETIRING TRUSTEE"
which expression shall where the context permits include any
New Trustee as defined below) shall retire as a trustee of
either Trust he hereby undertakes with the Buyer immediately
prior to his so retiring to obtain from any person or persons
replacing him (the "NEW TRUSTEE") a covenant to the Buyer and
the Retiring Trustee to be bound by this agreement and all the
obligations of the Retiring Trustee hereunder in place of the
Retiring Trustee and on the giving of such a covenant by the
New Trustee the Retiring Trustee shall (except in relation to
any claim notice of which has
17
previously been given) thereupon be discharged from all or any
liability under this agreement or under the Tax Deed.
5.10 Any Retiring Trustee who retires without the appointment of a
New Trustee in his place shall continue to be liable under
this Agreement to the same extent as if he had continued to be
a Trustee until a New Trustee is appointed in place of the
Retiring Trustee and gives a covenant to be bound by this
Agreement and all the obligations of the Retiring Trustee
hereunder in place of the Retiring Trustee.
5.11 The personal representatives of any Trustee who shall have
been the last surviving trustee of either Trust (the "DECEASED
TRUSTEE") shall be liable under this Agreement to the same
extent as the Deceased Trustee would have been if he were
alive until a new trustee or trustees is appointed in place of
the Deceased Trustee and gives a covenant to the Buyer and the
personal representatives of the Deceased Trustee to be bound
by this agreement and all the obligations of the Deceased
Trustee hereunder in place of the Deceased Trustee.
5.12 The Buyer warrants to the Sellers in the terms set out in Part
3 of Schedule 2.
5.13 The aggregate liability of the Buyer in respect of all claims
made on it under clause 5.12 shall not exceed(pound)1,050,000;
6 COMPLETION
6.1 Completion shall take place at the offices of the Sellers'
Solicitors immediately after the signing of this Agreement (or
at such other place and time as shall be mutually agreed
between the Parties) when the events set out in clauses 6.2 to
6.6 (inclusive) shall take place.
6.2 The Sellers shall cause to be delivered to the Buyer:-
6.2.1 transfers in common form in respect of the Shares
duly executed by the respective registered holders in
each case in favour of the Buyer (or as it may
direct) accompanied by the relative certificates;
6.2.2 the certificate of incorporation, the common seal and
the statutory books of the Company;
6.2.3 the agreed list of deeds and other documents relating
to the Premises;
18
6.2.4 a counterpart of the Tax Deed duly executed by the
Sellers;
6.2.5 duly executed agreements for the provision of
services (in the agreed terms) in respect of ▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; and
6.2.6 the resignation letters referred to in clause 6.4.
6.3 The Sellers shall procure the passing of board resolutions of
the Company:-
6.3.1 approving for registration the transfers referred to
in clause 6.2.1 (subject to their being duly
stamped);
6.3.2 appointing such persons as the Buyer may nominate as
directors of the Company;
6.3.3 appointing such person as the Buyer may nominate as
secretary of the Company;
6.3.4 resolving that the Company enter the agreements for
the provision of services referred to in clause
6.2.5;
6.3.5 revoking all mandates to bankers and giving authority
in favour of the directors appointed under clause
6.3.2 or such other persons as the Buyer may nominate
to operate the bank accounts thereof; and
6.3.6 changing the accounting reference date of the Company
to 30 September, the first such accounting period
ending 30 September 2000.
6.4 The Sellers shall:-
6.4.1 cause such of the directors of the Company as the
Buyer shall require to resign from their
directorships in and all offices of profit under the
Company without any payment under the Employment
Rights ▇▇▇ ▇▇▇▇ or otherwise and shall deliver to the
Buyer their written resignations containing an
acknowledgement by deed signed by each of them that
he has no claim against the Company for compensation
for loss of office or termination of employment or
otherwise (except only for any accrued remuneration
and expenses remaining to be reimbursed, details of
which are set out in the Disclosure Letter);
19
6.4.2 cause the secretary of the Company to resign from
such office and from all other offices of profit
under the Company without any payment under the
Employment Rights ▇▇▇ ▇▇▇▇ or otherwise and shall
deliver to the Buyer her written resignation
containing an acknowledgement by deed in the terms
set out in clause 6.4.1; and
6.4.3 procure the resignation without compensation of any
nature of the auditors of the Company and shall
deliver to the Buyer a copy of the auditors' written
resignation containing both an acknowledgement that
they have no claim for compensation for loss of
office, professional fees or otherwise, and a
statement expressed to be for the purposes of section
394(1) of the Companies ▇▇▇ ▇▇▇▇ that there are no
circumstances connected with their resignation which
they consider should be brought to the notice of the
members or creditors of the Company, the original of
the written resignation having been deposited at the
registered office of the Company.
6.5 The Sellers shall procure that at Completion:-
6.5.1 there are repaid all sums (if any) owing to the
Company by the Sellers or any Related Person except
those arising in the ordinary course of trade and
whether or not such sums are due for repayment;
6.5.2 the Company is released from any guarantee,
indemnity, bond, letter of comfort or Encumbrance or
other similar obligation given or incurred by it
which relates in whole or in part to debts or other
liabilities or obligations, whether actual or
contingent, of any Seller or Related Person other
than the Company;
and prior to such repayment or release the Sellers undertake
to the Buyer (on behalf of themselves and as trustee on behalf
of the Company) to keep the Company fully indemnified against
any failure to make any such repayment or any liability
arising under any such guarantee, indemnity, bond, letter of
comfort or Encumbrance.
6.6 The Sellers hereby irrevocably release and discharge the
Company and its officers and employees from all claims,
demands, obligations and causes of action whatsoever which
they now have, ever have had or (but for this clause) might
20
hereafter have against the Company and its officers and
employees in respect of any matter, fact or circumstance
occurring prior to the date hereof whatsoever.
6.7 Each of the Sellers undertakes to the Buyer (on behalf of
themselves and as trustee on behalf of the Company) to
indemnify the Company against any claims, demands, obligations
and causes of action (including any claims for unfair
dismissal or relating to termination of employment) against
the Company purportedly released pursuant to clause 6.6 above
if such release and/or discharge shall be ineffective, void or
unenforceable for any reason.
6.8 The Buyer shall:-
6.8.1 pay the Price in the manner provided by clause 3.1.1;
6.8.2 cause to be delivered to the Sellers a counterpart of
the Tax Deed duly executed by the Buyer; and
6.8.3 cause to be delivered to the Sellers Share
Certificates in respect of the Consideration Shares.
6.9 Each of the Sellers acknowledges that, immediately following
Completion until such time as the transfer(s) of the Shares
have been registered in the register of members of the
Company, each of the Sellers will hold those Shares registered
in his or her name on trust for and as nominee for the Buyer
or its nominees and undertakes to hold all dividends and
distributions and exercise all voting rights available in
respect of those Shares in accordance with the directions of
the Buyer or its nominees and if the Sellers are in breach of
the undertakings contained in this clause each of the Sellers
irrevocably authorise the Buyer to appoint some person or
persons to execute all instruments or proxies (including
consents to short notice) or other documents which the Buyer
or its nominees may reasonably require and which may be
necessary to enable the Buyer or its nominees to attend and
vote at general meetings of the Company and to do any thing or
things necessary to give effect to the rights contained in
this clause.
7 SELLERS' GUARANTEES
The Buyer shall use all reasonable endeavours to procure the release,
as soon as practicable after Completion, of the Guarantees. Until such
release, the Buyer undertakes to the Sellers
21
to keep the Sellers indemnified and held harmless from and against all
actions, proceedings, costs, expenses, loss and damage whatsoever
arising out of or in connection with each such Guarantee insofar as it
relates to an obligation or liability of the Company.
8 COMPETITION
8.1 The Sellers acknowledge that there is considerable scope to
expand the Company's business in Australia and acknowledge
that the Company intends to expand it shortly. The Sellers
undertake to the Buyer that they will not directly or
indirectly on their own account or on behalf of any other
person and whether as principal, shareholder, partner,
employee, agent or otherwise:-
8.1.1 during the period of 3 years after Completion carry
on or be concerned or interested or engaged (except
as a shareholder in a public listed company holding
not more than 5 per cent of the share capital
generally entitling the holder to cast a vote at a
general meeting of such company) in the United
Kingdom in any business competing with the type of
business carried on by the Company as at Completion;
8.1.2 during the period of 3 years after Completion carry
on or be concerned or interested or engaged (except
as a shareholder in a public listed company holding
not more than 5 per cent of the share capital
generally entitling the holder to cast a vote at a
general meeting of such company) in Australia in any
business competing with the type of business carried
on by the Company as at Completion;
8.1.3 during the period of 3 years after Completion
canvass, solicit the custom of any person who was a
customer of the Company during the 1 year prior to
Completion in respect of services competitive with
those supplied by the Company;
8.1.4 during the period of 3 years after Completion solicit
induce or seek to induce or endeavour to entice away
from the Company any person who was an employee of
such Company as at Completion, provided that this
restriction only applies to employees who are likely
to come into possession of confidential information
during the course of their employment with the
Company or who, in the course of such employment,
have had dealings
22
with persons who were customers of the Company
sufficient to influence customer relationships or
connections of the Company during the 1 year prior to
Completion.
8.1.5 use any trade or domain name (including the
expressions "Nightingale", "NNB" or "Nightingale
Nursing Bureau") or e-mail address used by the
Company at any time during the 2 years immediately
preceding the date of this Agreement or any other
name intended or likely to be confused with any such
trade or domain name or e-mail address.
8.2 The Sellers agree that the undertakings contained in this
clause 8 are reasonable and are entered into for the purpose
of protecting the goodwill of the business of each member of
the Buyer's Group and that accordingly the benefit of the
undertakings may be assigned within the Buyer's Group by the
Buyer and its successors in title without the consent of the
Sellers provided that if the assignee ceases to be a member of
the Buyer's Group the benefit of the assignment will be
transferred back to a member of the Buyer's Group.
8.3 Each undertaking contained in this clause 8 is and shall be
construed as separate and severable and if one or more of the
undertakings is held to be against the public interest or
unlawful or in any way an unreasonable restraint of trade or
unenforceable in whole or in part for any reason the remaining
undertakings or parts thereof, as appropriate, shall continue
to bind the Sellers.
8.4 If any undertaking contained in this clause 8 shall be held to
be void but would be valid if deleted in part or reduced in
application, such undertaking shall apply with such deletion
or modification as may be necessary to make it valid and
enforceable. Without prejudice to the generality of the
foregoing, such period (as the same may previously have been
reduced by virtue of this clause 8.4) shall take effect as if
reduced by six months until the resulting period shall be
valid and enforceable.
9 ANCILLARY PROVISIONS
9.1 CONFIDENTIAL INFORMATION
The Sellers shall not, and shall procure that no adviser or
agent or Related Party of the Sellers shall use or disclose to
any person Confidential Information.
23
9.2 Clause 9.1 does not apply to:-
(a) disclosure of Confidential Information to or at the
written request of the Buyer;
(b) use or disclosure of Confidential Information
required to be disclosed by law, regulation or any
revenue authority;
(c) disclosure of Confidential Information to
professional advisers for the purpose of advising the
Sellers; or
(d) Confidential Information which is in the public
domain other than by the Seller's breach of clause
9.1.
9.3 FURTHER ASSURANCES
Following Completion the Sellers shall from time to time
forthwith upon request from the Buyer at the Seller's
expense do or procure the doing of all acts and/or execute
or procure the execution of all such documents in a form
reasonably satisfactory to the Buyer 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.
9.4 ASSIGNMENT
9.4.1 Subject to clause 9.4.2 neither any of the Sellers
nor the Buyer shall assign, encumber, dispose of or
otherwise transfer any of their rights under this
Agreement without the prior written consent of the
other Parties. The Buyer may assign within the
Buyer's Group provided that if the assignee ceases to
be a member of the Buyer's Group the benefit of the
assignment will be transferred back to a member of
the Buyer's Group.
9.4.2 It is hereby agreed and declared that the Buyer shall
be entitled to assign the benefit of all or part of
this agreement and the Tax Deed by way of security to
any lender, group of lenders, agent or security
trustee by way of security for the borrowings,
guarantees and/or other indebtedness of all or any
part of the Buyer's Group made or to be made pursuant
to facility or other agreements or any amendment,
restatement or extension of them.
24
9.5 SEVERABILITY
If any part of this Agreement is found by any court or other
competent authority to be invalid, unlawful or unenforceable
then such part shall be severed from the remainder of this
Agreement which shall continue to be valid and enforceable to
the fullest extent permitted by law.
9.6 COSTS AND EXPENSES
9.6.1 Each Party shall pay their own costs and expenses
incurred in the sale and purchase of the Shares and
the Sellers agree with the Buyer (on behalf of itself
and on behalf of the Company) to keep the Company
fully indemnified against any costs, expenses or
liabilities associated with or relating to the sale
and purchase including any management bonuses (other
than normal Christmas bonuses and bonuses of
(pound)9,206 and AUS$1,527 to ▇▇▇ ▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇ respectively);
9.6.2 The stamp duty payable in relation to the transfer of
the Shares shall be payable by the Buyer.
9.7 ENTIRE AGREEMENT
9.7.1 This Agreement constitutes the entire understanding
between the Parties in relation to its subject
matter.
9.7.2 Except as otherwise permitted by this Agreement, no
change to its terms shall be effective unless it is
in writing and signed by or on behalf of all Parties.
9.8 ANNOUNCEMENTS
No announcement or circular in connection with this Agreement
or any matter arising from this Agreement shall be made or
issued by or on behalf of any of Party or its Related Persons
or professional advisers without the prior written consent of
the other Party which shall not be unreasonably withheld. The
restrictions in this clause 9.8 shall not apply to any
statement which is required to be made by law or applicable
regulation or to announcements, communications or circulars
made or sent by the Buyer after Completion to customers,
clients or suppliers of the
25
Company save for the initial announcements to customers,
clients or suppliers which shall be in the agreed terms.
9.9 NON-MERGER
Notwithstanding Completion, this Agreement shall remain in
full force and effect as regards any of its unperformed or
unimplemented provisions including, without limitation, all
guarantees, warranties and undertakings. The remedies of the
Buyer in respect of any breach of the Warranties shall
continue to subsist notwithstanding Completion.
9.10 COUNTERPARTS
9.10.1 This Agreement may be executed in any one or more
number of counterparts each of which, when executed,
shall be deemed to form part of and together
constitute this Agreement.
9.10.2 This Agreement shall be immediately binding and
effective when each of the Parties has
unconditionally executed either this Agreement or any
of those counterparts.
9.11 NOTICES
9.11.1 Any notice or other communication to be given under
this Agreement shall either be delivered by hand or
sent by first class post or facsimile transmission
(provided that, in the case of facsimile
transmission, the notice is confirmed by being
delivered by hand or sent by first class post within
two Working Days after transmission) as follows:
(a) (in the case of the Sellers) to: ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
26
Address: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇
(b) (in the case of the Buyer) to: The Company
Secretary
Address: Transworld Healthcare (UK) Limited
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Fax: ▇▇▇▇▇ ▇▇▇▇▇▇
9.11.2 A Party may change the address or facsimile number or
the name of the person for whose attention notices
are to be addressed by serving a notice on the others
in accordance with this clause 9.11.
9.11.3 All notices shall be deemed to have been served as
follows:-
(a) if delivered by hand, at the time of
delivery;
(b) if posted by first-class inland post at the
expiration of two Working Days after the
envelope containing the same was delivered
into the custody of the postal authorities;
and
(c) if communicated by facsimile, six hours
after the time of transmission;
PROVIDED that where, in the case of delivery
by hand or by facsimile transmission, such
delivery or transmission occurs after 5 p.m.
on a Working Day or on a day which is not a
Working Day, service shall be deemed to
occur at 9.00 a.m. on the next following
Working Day.
9.11.4 In proving such service it shall be sufficient to
prove that the envelope containing such notice was
properly addressed and delivered either to the
27
address shown thereon or into the custody of the
postal authorities or that a completed report
confirming that such notice has been transmitted in
full was received by the sender as the case may be.
9.12 GOVERNING LAW
This Agreement shall be construed and take effect in all
respects in accordance with English law.
28
SCHEDULE 1
PART 1
THE SELLERS
(1) (2) (3) (4) (5)
NAME AND ADDRESS "A" SHARES "B" SHARES "C" SHARES "D" SHARES
OF SELLER
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ 63,316 91,350 158,290 228,375
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,200 - 3,000 -
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 5,075 5,075 12,687 12,687
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 5,075 5,075 12,687 12,687
▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ and 25,634 - 64,085 -
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(The ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
1998 Settlement)
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ and 1,200 - 3,000 -
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(The Doctor ▇.▇. ▇▇▇▇▇▇▇▇
Bare Trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇
----------- ------------ ------------ -----------
TOTAL 101,500 101,500 253,749 253,749
------------ ------------ ------------ ------------
29
(1) (6) (7)
NAME AND ADDRESS CONSIDERATION PAYABLE DEFERRED CONSIDERATION (%)
OF SELLER CASH (POUND) SHARES
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ 6,353,111.16 1,000,000 76.19
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 57,050.25 - 0.59
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 482,550.00 - 5.00
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 432,550.00 50,000 5.00
▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ and 1,218,688.34 - 12.63
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(The ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
1998 Settlement)
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ and 57,050.25 - 0.59
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(The Doctor ▇.▇. ▇▇▇▇▇▇▇▇
Bare Trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇
--------- --------- -------
8,601,000 1,050,000 100
TOTAL --------- --------- -------
30
SCHEDULE 1
PART 2
DETAILS OF THE COMPANY
Country of incorporation : United Kingdom
Company number : 2158123
Date of incorporation : 27 August 1987
Registered office : ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Tax residence: UK
Authorised share capital : (pound)329,874.50, consisting of 101,500 A
ordinary shares of (pound)1 each, 101,500 B
ordinary shares of (pound)1 each, 253,749 C
ordinary shares of 25p each aND 253,749 D
ordinary shares of 25p each
Issued share capital : (pound)329,874.50, consisting of 101,500 A
ordinary shares of (pound)1 each, 101,500 B
ordinary shares of (pound)1 each, 253,749 C
ordinary shares of 25p each aND 253,749 D
ordinary shares of 25p each
Directors : ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Secretary : ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Auditors : Fraser ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇/▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇
31
SCHEDULE 2
PART 1
WARRANTIES
1 Documents delivered
2 The Company and the Sellers
3 Accounts
4 Tax
5 Premises
6 Assets
7 Material contracts and liabilities
8 Intellectual Property and Information Technology
9 Compliance with legislation etc
10 Employment
11 Events since Balance Sheet Date
12 Shares and Securities
13 Loans
14 Litigation etc
15 Insolvency
16 Insurances
17 Other
18 Constitution
19 Pensions
32
1 DOCUMENTS DELIVERED
1.1 The Sellers have delivered to the Buyer:
1.1.1 a true and complete copy of the Accounts; and
1.1.2 a true and complete copy of the memorandum and articles of
association of the Company.
1.2 All written information contained in the disclosure files and the
supplemental information files made available to the Buyer for
inspection before or during the negotiations leading to this Agreement
is accurate and not misleading.
1.3 The information set out in schedules 1 and 3 is accurate and not
misleading.
2 THE COMPANY AND THE SELLERS
2.1 The Sellers are the only legal and beneficial owners of the Shares.
2.2 The Company has not now, and has not since its incorporation had, any
subsidiary nor has it since its incorporation been a subsidiary of any
body corporate.
2.3 The Company has been in continuous existence since incorporation.
2.4 The Company has not allotted any shares other than the Shares and the
Shares are fully paid or credited as fully paid.
2.5 The Company is not the owner or the registered holder of any share in
or other security of any body corporate wherever incorporated nor has
it agreed to become the owner or registered holder of any such share or
security.
2.6 Each Seller has full power to enter into and perform this Agreement and
the Tax Deed respectively and this Agreement constitutes and the Tax
Deed will, when executed, constitute legally valid and binding
obligations of each Seller which will be enforceable in accordance with
their terms.
2.7 The execution of this agreement, the acquisition of the Shares by the
Buyer or compliance with the terms of this Agreement will not:
2.7.1 cause the Company to lose the benefit of any Permit, right,
privilege or licence it currently enjoys;
33
2.7.2 give rise to or cause to become exercisable any right of
pre-emption;
2.7.3 conflict with or result in a breach of or give rise to an
event of default under or require the consent of a person
under or enable a person to terminate or relieve a person from
an obligation under an agreement, arrangement or obligation to
which the Company is a party;
2.7.4 result in any customer being entitled:
(a) to cease dealing with the Company;
(b) substantially to reduce its existing level of
business; or
(c) to change the terms upon which it deals with the
Company; or
2.7.5 so far as the Sellers are aware (but without any requirement
to make enquiries as referred to in clause 1.12), result in
any officer or senior employee leaving the Company.
2.8 There is no agreement or arrangement (legally enforceable or not) to
which the Company is or during the three years ending on the date of
this Agreement was a party and in which any Seller or a Related Person
is or was interested in any way and there is not outstanding any
indebtedness or other liability (actual or contingent) or obligations
owing by the Company to any of the Sellers nor is there any
indebtedness, other such liability or obligations owing to the Company
by any such person.
3 ACCOUNTS
3.1 The Accounts:
3.1.1 have been prepared on a basis consistent with previous
accounts of the Company and have been prepared and audited
in accordance with the law and Generally Accepted
Accounting Principles, Standards and Policies in the
United Kingdom;
3.1.2 comply with the Companies ▇▇▇ ▇▇▇▇ and all other
applicable statutes and regulations and show a true and
fair view of the assets, liabilities, financial position
and state of affairs of the Company and of the profits and
losses for the financial period ended on the Balance Sheet
Date;
34
3.1.3 make full provision or reserve for all actual liabilities
and contain proper and adequate provision or reserve for
or disclose all contingent liabilities or financial
commitments existing at the Balance Sheet Date;
3.2 The results shown by the audited profit and loss account of the Company
for each of the three financial years of the Company ended on the
Balance Sheet Date have not (except as disclosed in those accounts)
been affected by an extraordinary, exceptional or non-recurring item or
by any other matter making the profits or losses for a period covered
by any of those accounts unusually high or low.
3.3 The Management Accounts have been prepared by the Company on the bases
set out in the Disclosure letter with due care and attention and show
with reasonable accuracy the state of affairs and profit or loss of the
Company as at the date to which and for the period in respect of which
they were prepared.
3.4 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 are true and complete in
accordance with the law and applicable standards, principles and
practices generally accepted in the United Kingdom.
3.5 All deeds and documents (properly stamped where stamping is necessary
for the enforcement thereof) belonging to the Company or which ought to
be in the possession of the Company are in the possession of the
Company.
4 TAX
RETURNS
4.1 All returns of the Company and all records, information and notices
reasonably requested or required by law for Taxation purposes have been
made or supplied within the requisite periods and on a proper basis and
were correct and accurate in all material respects and are not subject
to any dispute with the Inland Revenue or any other fiscal authority at
the date of this Agreement.
RECORDS
4.2 The Company retains sufficient records to calculate the tax liability
or relief arising on any disposal or realisation of any asset owned at
the Balance Sheet Date or acquired since that
35
date and has kept and maintained all records required by the Inland
Revenue in respect of self-employed nurses and/or nurses working in
patients' own homes.
ACCOUNTS
4.3 The Accounts contain full provision or reserve for all Taxation
(including deferred Taxation) which may be assessed on the Company for
the accounting period ended on the Balance Sheet Date or for any prior
period (on the basis of the rates of tax and taxation statutes in force
at the Balance Sheet Date) in respect of any transaction, event or
omission occurring or deemed to occur or any income, profit or gains
earned, accrued or received or deemed to be earned, accrued or received
by the Company on or prior to the Balance Sheet Date or for which the
Company is accountable up to such date and all contingent or disputed
liabilities for Taxation have been properly provided for or disclosed
in the Accounts.
POST BALANCE SHEET DATE
4.4 Since the Balance Sheet Date no further liability or contingent
liability for Taxation has arisen otherwise than as a result of trading
activities in the ordinary course of business.
PAYMENT OF TAXATION
4.5 The Company has paid all Taxation for which it is liable to account to
the Inland Revenue or other fiscal authority on the due date for
payment of such Taxation and is under no liability to pay any penalty
or interest in connection with such Taxation.
DEDUCTIONS
4.6 The Company has deducted all Taxation required to be deducted from any
payments made by the Company.
PAY AS YOU EARN
4.7 The Company has in all material respects properly operated the PAYE and
National Insurance systems and has complied with all of its reporting
obligations in connection with the same. No PAYE audit in respect of
the Company has been made by the Inland Revenue nor has the Company
been notified of such audit.
36
GIVE AS YOU EARN
4.8 No payroll deduction scheme pursuant to section 202 of ICTA has been
operated by the Company.
VALUE ADDED TAX
4.9 (a) The Company is a registered taxable person for the purpose
of the VAT legislation and has not at any time been treated as
a member of a group of companies for such purpose and has not
made any application to be so treated and no circumstances
exist whereby the Company would or might become liable for VAT
as an agent or otherwise by virtue of section 47 of the VATA
1994.
(b) The Company has complied in all material respects with the
requirements and provisions of the VAT legislation and has
made and maintained accurate and up to date records invoices
accounts and other documents required by or necessary for the
purposes of the VAT legislation and the Company has at all
times punctually paid and made all payments and returns
required thereunder.
(c) The Company has not made any exempt supplies in consequence of
which it is or will be unable to obtain credit for all input
tax paid by it during any VAT quarter ending after the Balance
Sheet Date.
CLEARANCES
4.10 No action has been taken by the Company in respect of which any consent
or clearance from the Inland Revenue or other Taxation Authority was
required except in circumstances where such consent or clearance was
validly obtained and where any conditions attaching thereto were met
and will, immediately following Completion, continue to be met.
CORPORATION TAX
DUAL RESIDENCE
4.11 The Company is not and has not within the past six years been a dual
resident company within the meaning of section 404(4) of ICTA and has
not been involved in a transaction to which section 404 of ICTA or any
other provision (including any exclusion from a provision) relating to
dual resident investment companies as there defined could apply.
37
SECONDARY LIABILITY
4.12 No transaction or event has occurred in consequence of which the
Company is or may be held liable for any tax or deprived of relief or
allowances otherwise available to it in consequence of any tax or may
otherwise be held liable for or to indemnify any person in respect of
any tax, where some other company or person is or may become primarily
liable for the tax in question (whether by reason of any such other
company being or having been a member of the same group of companies or
otherwise).
DEDUCTIONS
4.13 The Company has not made any payment or incurred any liability to make
any payment of a revenue nature which could be disallowed as a
deduction in computing the taxable profits of the Company or as a
charge on the Company's income.
TRANSFER PRICING
4.14 All transactions entered into by the Company have been entered into on
an arm's length basis and the consideration (if any) charged or
received or paid by the Company on all transactions entered into by it
has been equal to the consideration which might have been expected to
be charged, received or paid (as appropriate) between independent
persons dealing at arm's length and no notice or enquiry pursuant to
section 770 of ICTA or the transfer pricing provisions of any
arrangements made under section 788 of ICTA (relief by agreement with
other countries) has been made in connection with any of such
transactions.
CAPITAL ALLOWANCES
4.15 No balancing charge in respect of any capital allowances claimed or
given would arise if all the assets of the Company were to be realised
for a consideration equal to the amount of the book value thereof as
shown or included in the Completion Accounts. All necessary conditions
for all capital allowances (as defined in section 832(1) of ICTA)
claimed by the Company were at all material times satisfied and remain
satisfied and the Company has not since the Balance Sheet Date become
liable for any balancing charge.
REPAYMENTS OF SHARE CAPITAL
4.16 The Company has not made (and will not be deemed to have made) any
distribution within the meaning of sections 209 and 210 (bonus issue
following repayment of capital) of ICTA since incorporation except
dividends properly authorised and shown in its Accounts nor is the
Company bound to make any such distribution.
38
SALES AT BOOK VALUE
4.17 No chargeable gain or profit (disregarding the effects of any
indexation relief available) would arise if any asset of the Company
(other than trading stock) were to be realised for a consideration
equal to the amount of the book value thereof as shown or included in
the Accounts.
VALUATION OF ASSETS
4.18 (a) The Company has not since the Balance Sheet Date disposed
of any asset so that section 17 of the TCGA (disposals and
acquisitions treated as made at market value) might apply to
increase the consideration deemed to be given on such
disposal.
(b) The Company has not since the Balance Sheet Date held or had
any interest in any asset where section 17 of the TCGA might
apply to reduce the consideration deemed to be given on the
acquisition of that asset.
CLOSE COMPANIES
TRANSFERS OF VALUE
4.19 The Company has made no transfer of value such as is specified in
section 94(1) (or section 99(2)) of the Inheritance Tax ▇▇▇ ▇▇▇▇.
LOANS TO PARTICIPATORS
4.20 The Company has not made any loan advance or payment or given any
consideration falling within sections 419-420 or 422 of ICTA.
DISTRIBUTIONS
4.21 The Company has made no payments and conferred no benefits falling to
be treated as distributions under section 418 of ICTA.
TRANSFERS AT UNDERVALUE
4.22 The Company has not made a transfer at an undervalue so that section
125 of the TCGA could apply.
39
STAMP DUTY
4.23 All documents in the enforcement of which the Company is interested and
which are in its possession have been duly stamped and since the
Balance Sheet Date the Company has not been a party to any transaction
whereby the Company was or is or could become liable to stamp duty
reserve tax.
INHERITANCE TAX
4.24 The Company is not, nor will become, liable to be assessed to capital
transfer tax or inheritance tax as donor or donee of any gift or
transferor or transferee of value (actual or deemed) nor as a result of
any disposition, chargeable transfer or transfer of value (actual or
deemed) made by or deemed to be made by any other person.
5 THE PREMISES
UK PREMISES
5.1 The Premises set out in Schedule 3 Part 1 ("THE UK PREMISES") comprise
all the freehold and leasehold land owned, used or occupied by the
Company in the United Kingdom and all agreements whereby the Company
has any financial entitlement relating to any land in the United
Kingdom at the date hereof.
NO OTHER LIABILITIES
5.2 The Company has no actual or contingent obligations or liabilities (in
any capacity including as principal contracting party or guarantor) in
relation to any lease or other interest in land apart from the leases
of the Premises referred to in Schedule 3 Part 1.
GOOD AND MARKETABLE TITLE
5.3 The Company has a good and marketable title to the UK Premises which
title is leasehold and the Company is solely legally and beneficially
entitled to the UK Premises for an unencumbered estate in possession.
40
TITLE DEEDS AND DOCUMENTS
5.4 The Company has under its control all title deeds and documents
necessary to prove its leasehold title to the UK Premises and the same
are original documents or properly examined abstracts; where any of the
UK Premises are leasehold the title documents include all necessary
consents for the grant and assignment of the lease, memoranda of rent
increases where appropriate and all reversioners' consents required
under the lease.
NO ADVERSE RIGHTS IN COURSE OF ACQUISITION
5.5 No liberty, right, easement, licence or other arrangement is enjoyed or
is in the course of being acquired by or against the UK Premises (and
none is needed) nor is any needed for obtaining access to any land or
for repair of the UK Premises or to comply with any fire regulations.
ADEQUACY OF EXISTING BENEFICIAL RIGHTS
5.6 Each of the UK Premises has the benefit of all rights necessary for the
continued present use which is in the Sellers' reasonable view not
inconsistent with the permitted use and enjoyment of the same such
rights not being capable of withdrawal by any person nor liable to be
made subject to any charge therefor save for the usual service charges
under the leases of the UK Premises.
NO ENCUMBRANCES
5.7 The UK Premises and the title deeds thereto are not subject to any
encumbrance or any lease or agreement for lease and the UK Premises are
free from mortgages charges and liens and are not subject to any
outgoings other than uniform business rates charges for utilities and
the like and rent and service charge.
NO OVERRIDING INTERESTS
5.8 The UK Premises are not subject to any overriding interests within the
meaning of section 70 of the Land Registration ▇▇▇ ▇▇▇▇.
OTHER MATTERS ADVERSELY AFFECTING THE UK PREMISES
5.9 The terms of the documents affecting or subject to which the UK
Premises are held are not of an onerous or unusual nature for a lease
of this type nor do they, in the Sellers'
41
reasonable view conflict with the user thereof and there is no material
subsisting breach on the part of the Company of any covenant condition
or agreement contained in any lease under which the Company holds the
UK Premises and no Landlord has refused to accept rent or made any
complaint or objection.
NO DEFAULT
5.10 To the Sellers' knowledge the Company has duly performed, observed and
complied with all statutory and common law requirements, by-laws,
orders, building regulations and other stipulations and regulations
affecting the UK Premises and (in the Sellers' reasonable view) the
uses of the UK Premises and (without prejudice to the generality of the
foregoing) all outgoings have been paid to date and (in the case of
leasehold property) no notice of any alleged breach of any of the terms
of any such lease or tenancy agreement as aforesaid has been served on
the Company.
LEASEHOLD PREMISES
5.11 (a) Each of the UK Premises which is leasehold is held under
the leases brief details of which are set out in Schedule 3
Part 1 and save as aforementioned no licences or collateral
arrangements or concessions have been entered into or granted
each such lease being a head lease nor any rights of
determination on the part of the landlord save for usual
forfeiture provisions and there are no rent reviews which are
in the course of being determined.
(b) No agreement has been entered into nor has any application
been made to any Court for the exclusion from the leases under
which the Company holds the UK Premises of sections 24-28 of
the Landlord and Tenant Act 1954 (as amended)
(c) The Company is not holding over pursuant to any lease of any
of the UK Premises
OCCUPATIONAL INTERESTS
5.12 There are no occupational interests in the UK Premises other than those
of the Company.
USE
5.13 The existing use of each of the UK Premises is only that specified in
Schedule 3 Part 1 and is in the Sellers' reasonable view not
inconsistent with the lawful permitted use whether
42
under the current Town and Country Planning legislation or other
statutory provision and are not temporary uses and all necessary
consents to such existing uses have been obtained.
DEVELOPMENT
5.14 All development carried on by the Company has been and is lawful and
all necessary consents and permissions have been or are being obtained
for such development.
ADEQUACY OF PLANNING CONSENTS
5.15 The consents referred to in paragraph 5.13 above are subsisting and are
not temporary or suspended and are also either unconditional or subject
only to conditions which have been satisfied so that nothing further
remains to be done thereunder or are not such as would be regarded as
onerous by a prudent occupier of commercial property of the nature of
the UK Premises and no such planning permission remains unimplemented
(whether in whole or in part) nor has any planning application been
submitted by the Company which awaits determination.
NO COMPULSORY ACQUISITION OR ENFORCEMENT PROCEEDINGS
5.16 There are no outstanding enforcement or other notices or proceedings
issued by the Company in respect of any of the UK Premises.
REPLIES TO ENQUIRIES
5.17 All disclosures and written replies to enquiries and requisitions
relating to the UK Premises made or given by or on behalf of the
Sellers or the Company to the Buyer or its solicitors are complete and
correct in all material respects to the best of the Sellers' knowledge.
NO LITIGATION
5.18 The Company is not engaged in any litigation or arbitration proceedings
in connection with any of the UK Premises. There is no cause of action
which has arisen or accrued or law suit or arbitration threatened or
pending against the Company in connection with the UK Premises and no
circumstances are believed to exist which are likely to give rise to
any.
43
NO VITIATION OF INSURANCE
5.19 The Company has not knowingly done or omitted to do anything whereby
any policy of insurance has or may become void or voidable and all
requisite insurances are in force and all current premiums are fully
paid.
NO DISPUTES
5.20 The UK Premises are not to the Sellers' knowledge affected by any
outstanding disputes, notices or complaints which affect the use of the
UK Premises for the purposes for which they are now used and there are
to the Sellers' knowledge no encumbrances affecting the UK Premises and
which in the Sellers' reasonable view would prevent or impede the
Company from operating and carrying on the businesses currently carried
on at the UK Premises.
LOCAL AUTHORITIES - LAND CHARGES AND REPLIES TO ENQUIRIES
5.21 The UK Premises are not affected by any matter or thing which would be
revealed by official certificates of search made or raised within a
period of 6 months prior to the date of this Agreement in the register
of local land charges or by replies to enquiries on form CON 29D or (if
appropriate) form CON 29D (London) made or raised within a period of 6
months prior to the date of this Agreement which would adversely affect
the UK Premises or the value thereof or the continued uses thereof for
the existing uses indicated in Schedule 3 Part 1.
FIRE PRECAUTIONS ▇▇▇ ▇▇▇▇
5.22 So far as the Sellers are aware the Company has complied with its
obligations under the Fire Precautions ▇▇▇ ▇▇▇▇ and the Company's
landlord has applied for and obtained fire certificates thereunder in
respect of UK Premises to the extent required by such Act.
VAT
5.23 The Landlord has elected the UK Premises in the United Kingdom for the
purpose of VAT and the Company pays VAT on rent payments.
44
AUSTRALIAN PREMISES
5.24 The Premises set out in Schedule 3 Part 2 ("THE AUSTRALIAN PREMISES")
comprise all the freehold and leasehold land owned, used or occupied by
the Company in Australia and all agreements whereby the Company has any
financial entitlement relating to any land in Australia at the date
hereof.
NO OTHER LIABILITIES
5.25 The Company has no actual or contingent obligations or liabilities (in
any capacity including as principal contracting party or guarantor) in
relation to any lease or other interest in land apart from the leases
of the Australian Premises referred to in Schedule 3 Part 2.
GOOD AND MARKETABLE TITLE
5.26 The Company has a good and marketable title to the Australian Premises
which title is leasehold and the Company is solely legally and
beneficially entitled to Australian Premises for an unencumbered estate
in possession.
TITLE DEEDS AND DOCUMENTS
5.27 The Company has (subject to the mortgage hereinafter referred to) all
title deeds and documents necessary to prove its leasehold title to the
Australian Premises and the same are original documents or properly
examined abstracts; where any of the Australian Premises are leasehold
the title documents include all necessary consents for the grant and
assignment of the lease, memoranda of rent increases where appropriate
and all reversioners' consents required under the lease.
NO ENCUMBRANCES
5.28 The Australian Premises and the title deeds thereto are not subject to
any encumbrance or any lease or agreement for lease and the Australian
Premises are free from mortgages charges and liens (other than a
mortgage to National Australia Bank) and are not subject to any
outgoings other than uniform business rates charges for utilities and
the like and rent and service charge.
45
NO OVERRIDING INTERESTS
5.29 The Australian Premises are not subject to any undocumented
occupational rights of third parties.
OTHER MATTERS ADVERSELY AFFECTING THE PREMISES
5.30 The terms of the documents affecting or subject to which the Australian
Premises are held are not of an onerous or unusual nature for a lease
of this type nor do they, in the Sellers' reasonable view conflict with
the user thereof and there is no material subsisting breach on the part
of the Company of any covenant condition or agreement contained in any
lease under which the Company holds the Australian Premises and no
Landlord has refused to accept rent or made any complaint or objection.
NO DEFAULT
5.31 To the Seller's knowledge the Company has duly performed, observed and
complied with all requirements of Australian law affecting the
Australian Premises and (in the Seller's reasonable view) the uses of
the Australian Premises and (without prejudice to the generality of the
foregoing) all outgoings have been paid to date and (in the case of
leasehold property) no notice of any alleged breach of any of the terms
of any such lease or tenancy agreement as aforesaid has been served on
the Company.
LEASEHOLD PREMISES
5.32 (a) The Australian Premises which is leasehold is held under the
lease brief details of which are set out in Schedule 3 Part 2
and save as aforementioned no licences or collateral
arrangements or concessions have been entered into or granted
each such lease being a head lease nor any rights of
determination on the part of the landlord save for usual
forfeiture provisions and there are no rent reviews which are
in the course of being determined. The lease provides that
rent is to be reviewed on the exercise of the option for new
lease in accordance with the Consumer Price Index and after
each subsequent 12 month period. The relevant review dates are
23 April 2000, 23 April 2001 and 23 April 2002.
(b) The Company is not holding over pursuant to any lease of any
of the Australian Premises.
46
OCCUPATIONAL INTERESTS
5.33 There are no occupational interests in the Australian Premises other
than those of the Company.
USE
5.34 The existing use of each of the Australian Premises is only that
specified in Schedule 3 Part 2 and is in the Sellers' reasonable view
not inconsistent with the lawful permitted use whether under current
Australian Town and Country Planning legislation or other Australian
statutory provision and are not temporary uses and all necessary
consents to such existing uses have been obtained.
NO COMPULSORY ACQUISITION OR ENFORCEMENT PROCEEDINGS
5.35 So far as the Sellers are aware there are no outstanding enforcement or
other notices or proceedings issued by the Company in respect of any of
the Australian Premises.
REPLIES TO ENQUIRIES
5.36 All disclosures and written replies to enquiries and requisitions
relating to the Australian Premises made or given by or on behalf of
the Seller or the Company to the Buyer or its solicitors are complete
and correct in all material respects to the best of the Sellers'
knowledge.
NO LITIGATION
5.37 The Company is not engaged in any litigation or arbitration proceedings
in connection with any of the Australian Premises. There is no cause of
action which has arisen or accrued or law suit or arbitration
threatened or pending against the Company in connection with the
Australian Premises and no circumstances are believed to exist which
are likely to give rise to any.
NO VITIATION OF INSURANCE
5.38 The Company has not knowingly done or omitted to do anything whereby
any policy of insurance has or may become void or voidable and all
requisite insurances are in force and all current premiums are fully
paid.
47
NO DISPUTES
5.39 The Australian Premises are not to the Sellers' knowledge affected by
any outstanding disputes, notices or complaints which affect the use of
the Australian Premises for the purposes for which they are now used
and there are to the Sellers' knowledge no encumbrances affecting the
Australian Premises and which in the Sellers' reasonable view would
prevent or impede the Company from operating and carrying on the
businesses currently carried on at the Australian Premises.
FIRE PRECAUTIONS
5.40 So far as the Sellers are aware its fit out contractor complied with
its fire precaution obligations under Australian law
6 ASSETS
6.1 There are no Encumbrances, nor has the Company agreed to create any
Encumbrances over any part of its undertaking, or assets and all the
undertaking, property and assets (tangible or intangible) used by the
Company in connection with its business (other than the Premises) are
in the sole legal and beneficial ownership of the Company and are in
the exclusive possession of the Company.
7 MATERIAL CONTRACTS AND LIABILITIES
7.1 True and complete copies of the agreements relating to the Sole Agency
Business ("the Sole Agency Agreements") are set out in the Disclosure
Letter.
7.2 A true and complete list of the Non-Contract Client Business undertaken
by the Company between 1 December 1998 and 28 November 1999 is set out
in the Disclosure Letter.
7.3 A true and complete list of the Homecare Business undertaken by the
Company between 1 December 1998 and 28 November 1999 is set out in the
Disclosure Letter.
7.4 A copy of the standard terms and conditions of the business of the
Company are annexed to the Disclosure Letter and the Company has not
entered into any agreement or arrangement with a customer on terms
different from these.
48
7.5 The Company has no liabilities (actual or contingent) other than the
liabilities disclosed in the Accounts or which have arisen in the
ordinary course of business since the Balance Sheet Date.
7.6 The Company is not a party to:-
7.6.1 any hire, hire-purchase, leasing or conditional sale agreement
or payment on deferred terms or credit sale contract or
similar agreement;
7.6.2 any joint venture, partnership association or consortium
agreement or arrangement or obligation; 7.6.3 any agency,
marketing or management agreement;
7.6.3 any agency, marketing or management agreement;
7.6.4 any material agreement or arrangement (including without
limitation the Sole Agency Agreements) which is capable of
being terminated as a direct result of the change of the
control of the Company effected by or pursuant to this
Agreement;
7.6.5 any contract which is not on an arm's-length commercial basis;
7.6.6 any contract which is of an unusual or abnormal nature or
outside the ordinary and proper course of business;
7.6.7 any contract which is of a long-term nature (that is unlikely
to have been fully performed in accordance with its terms more
than six months after the date on which it was entered into);
7.6.8 any contract which would restrict its freedom to engage in any
activity or business or confines its activities or business to
a particular place.
7.7 The Company is not in default under, and has not committed any breach
of any of the terms of, any agreement, instrument or arrangement to
which it is a party, and no threat or claim of any such default or
breach has been made and is outstanding against the Company nor are
there any outstanding disputes relating to any such agreement,
arrangement or obligation no party with whom the Company has entered
into an agreement, arrangement or obligation has given notice of its
intention to terminate or has sought to repudiate or disclaim the
agreement, arrangement or obligation.
49
7.8 No party with whom the Company has entered into an agreement or
arrangement is in material breach of the agreement or arrangement.
7.9 Since the Balance Sheet Date book debts owed to the Company have been
incurred, paid and collected in the ordinary course and on a basis
consistent with past practices. All book debts owed to the Company
included in the Accounts or arising since the Balance Sheet Date are
capable of collection in the ordinary course.
7.10 No customer is entitled to repayment of the amounts invoiced in respect
of holiday pay for nurses, whether or not that holiday has been taken.
8 INTELLECTUAL PROPERTY AND INFORMATION TECHNOLOGY
8.1 So far as the Sellers are aware, all registered and unregistered
Business IP used by the Company is either:
(a) solely, legally and beneficially owned by the Company; or
(b) used by the Company subject to and in accordance with the
terms of licences granted to the Company by the owners
thereof.
8.2 The Business IP owned by the Company is free from any mortgage, charge
(fixed or floating), pledge, trust, right of set off or other third
party right or interest (legal or equitable) including any right of
pre-emption, assignment by way of security, reservation of title or any
other security interest of any kind however created or arising or any
other agreement or arrangement (including a sale and repurchase
arrangement) having similar effect;
8.3 The details of all registered Business IP set out in the Disclosure
Letter are correct and:
(a) all procedural steps, including the payment of all applicable
fees, have been taken diligently for the prosecution and
maintenance of the registered Business IP owned by the
Company; and
(b) commercially reasonable steps have been taken for the
maintenance and protection of unregistered Business IP owned
by the Company.
8.4 The terms of all material licences or rights relating to the Business
IP which have been granted by the Company or which the Company intends
to grant for the purposes of its
50
business or which are being currently negotiated by the Company are set
out in the Disclosure Letter and unless disclosed, the Company is not
obliged to enter into any of the agreements set out therein which the
Company intends to grant or which the Company is currently negotiating.
So far as the Sellers are aware, there has been or is no material
breach nor are the Sellers aware of any fact or matter which would or
may create a breach of any of the licences set out in the Disclosure
Letter which have been granted by the Company relating to the Business
IP.
8.5 The terms of all material licences or rights relating to the Business
IP granted to the Company or which the Company intends to acquire for
the purposes of its business or which are being currently negotiated by
the Company are set out in the Disclosure Letter, and unless disclosed,
the Company is not obliged to enter into any of the agreements set out
therein which the Company intends to grant or which the Company is
currently negotiating. So far as the Sellers are aware, there has been
or is no material breach nor are the Sellers aware of any fact or
matter which would or may create a breach of any of the licences which
have been granted to the Company relating to the Business IP.
8.6 The terms of all other written agreements or consents or undertakings
entered into by the Company relating to the Business IP are set out in
the Disclosure letter. So far as the Sellers are aware, there has been
or is no material breach nor are the Sellers aware of any fact or
matter which would or may create a breach of any of such agreements,
consents or undertakings.
8.7 The Company is the sole legal and beneficial owner of the copyright in
the logo registered as a trade ▇▇▇▇ with registration number 2120432.
8.8 The Company is the sole legal and beneficial owner of copyright in
databases compiled or used by it or of any database rights which exist
in the same.
8.9 So far as the Sellers are aware, all Business IP owned by the Company
is valid and enforceable and none of it is being challenged or opposed
by any person.
8.10 So far as the Sellers are aware, none of the business operations of the
Company infringe, or are alleged to infringe, any Intellectual Property
held by any third party or involve, or are alleged to involve, the
unauthorised use of confidential information disclosed to the Company
in circumstances which might entitle a third party to make a claim. No
written claim has been received by the Company in the last three years
which alleges any such infringing act or
51
process or misuse of confidential information or which otherwise
disputes the right of the Company to use any Business IP.
8.11 So far as the Sellers are aware, no person is infringing or threatening
to infringe, or has during the last three years infringed or threatened
to infringe, any Business IP (including, without limitation, misuse of
Confidential Information).
8.12 The Company has taken all reasonable steps to prevent the unauthorised
disclosure of Confidential Information and so far as the Sellers are
aware, no such unauthorised disclosure has occurred in the past three
years, (except insofar as the same has fallen into the public domain
through no fault of the Company).
8.13 The Computer Systems have suffered no material failure or breakdown in
the twelve months preceding this Agreement and the Sellers are not
aware that any material Computer Systems are likely to require
replacement or material upgrading within one year of Completion if the
Company's business continues on the same scale as it did immediately
prior to Completion.
8.14 Maintenance contracts are in full force and effect in respect of all
elements of the Computer Systems which the Sellers and/or the Company
reasonably believe are critical to the Company's business. Details of
all such maintenance contracts are set out in the Disclosure Letter,
and so far as the Sellers are aware there is no reason to believe that
those maintenance contracts will not be renewed by the other
contracting party or parties upon their expiry (if so required by the
Company) upon substantially similar terms to those now applicable.
8.15 So far as the Sellers are aware, the Computer Systems are free of any
software lock, time bomb, virus infection or similar code.
8.16 The Company has taken the steps set out in the Disclosure Letter with
regard to the issue of Year 2000 Compliance (as defined in British
Standard Disc PD 2000-1) and the Company has suffered no material
disruption to its business attributable to the Year 2000 non-compliance
of any software, hardware or other equipment.
8.17 The Company is registered under the UK Data Protection Act 1984 and the
Company has not received any notice, letter or complaint alleging a
breach by it of the provisions of any UK Data Protection Act and has no
reason to believe that circumstances exist which may give rise to such
a notice, letter or complaint, including in respect of processing which
was
52
underway immediately before 24 October 1998, and the Company has taken
the steps set out in the Disclosure Letter in the light of the 1998
Data Protection Act.
9 COMPLIANCE WITH LEGISLATION
9.1 The Company has, and so far as the Sellers are aware, all of its
directors, officers, agents and employees have during the course of
their duties in relation to the Company complied in all material
respects with all applicable legislation and regulation of the United
Kingdom and any relevant foreign jurisdiction.
9.2 There are not in existence nor have there been, nor so far as the
Sellers are aware are there pending, any investigations, enquiries or
disciplinary proceedings by or on behalf of any governmental or other
body in respect of the affairs of the Company.
9.3 All Permits necessary for the carrying on of the Company's business
have been obtained and the terms thereof are being complied with.
9.4 There are no pending or threatened proceedings which might in any way
affect the Permits and the Sellers are not aware of any reason why any
of them should be suspended, threatened or revoked or be invalid.
9.5 Neither the Company nor a person for whose acts or defaults the Company
may be vicariously liable has:-
(a) induced a person to enter into an agreement or arrangement
with the Company by means of an unlawful or immoral payment,
contribution or gift or other inducement;
(b) offered or made an unlawful or immoral payment, contribution,
gift or other inducement to a government official or employee.
9.6 The Company has complied with all its duties and obligations under the
Nurse Agencies Act 1957 or equivalent applicable legislation in any
other jurisdiction.
9.7 So far as the Sellers are aware (without being under any obligation to
make enquiries) there are no pending changes in the current exemption
for agency nurses to undertake work in the United Kingdom on a working
holiday visa.
53
10 EMPLOYMENT
10.1 The information set out in the employment section of the Disclosure
Letter is accurate and shows as at the date of this Agreement the
names, job title, date of commencement of employment or consultancy and
date of birth of all officers, employees and consultants of the Company
and all remuneration payable and other benefits which the Company is
obliged to or actually provides (whether now or in the future) to each
category of officers, employees and consultants, or former officers,
employees or consultants or their dependants including particulars of
all commission, incentive, profit sharing, bonus and share option
schemes medical, permanent health insurance, directors' and officer's
insurance, travel, car, redundancy and other benefit schemes,
arrangements and understandings "the Schemes") which the Company has
operated together with the entitlement to notice of different
categories of employees, officers and consultants and the length of
continuous employment of those categories of employees and officers for
the purposes of the Employment Rights ▇▇▇ ▇▇▇▇ (the "ERA").
10.2 No remuneration is due from the Company to any category of officer,
employee or consultant or former officer, employee or consultant other
than the outstanding part of any current salaries, commissions and fees
and other benefits which are payable to the present officers, employees
and consultants. All forms PII(D) required to be submitted to the
Inland Revenue in respect of benefits in kind for officers and
employees of the Company have been accurately completed and duly
submitted to the Inland Revenue.
10.3 No variation to any of the terms of employment or consultancy listed in
the employment schedule to the Disclosure Letter has been agreed by the
Company and no changes in fees, salaries, wages, pension contributions
or other benefits have been made, announced or proposed to any category
of officer, employee or consultant of the Company since the Balance
Sheet Date and the Company is under no obligation to make any such
changes with or without retrospective operation.
10.4 The Company has not, within a period of one (1) year immediately
preceding the date of this Agreement, dismissed any employee by reason
of redundancy or given or become obliged to give notice of any
redundancies to the Secretary of State nor started nor been obliged to
start consultation with any independent trade union under the relevant
provisions of either the Trade Union and Labour Relations
(Consolidation) ▇▇▇ ▇▇▇▇ or the ERA. The Company has no customary
arrangement or agreed procedure for selecting employees for redundancy
or
54
any contractual redundancy scheme providing payments or benefits in
addition to statutory entitlement.
10.5 The Company is not required to pay compensation for any breach of the
Race Relations ▇▇▇ ▇▇▇▇, the Equal Pay ▇▇▇ ▇▇▇▇, the Sex Discrimination
Acts 1975 and 1986, the Disability Discrimination ▇▇▇ ▇▇▇▇, the
Employment Rights ▇▇▇ ▇▇▇▇ or for loss of office or damages for
wrongful dismissal, or to make any payment in respect of redundancy,
unfair dismissal, failure to inform and consult under either the Trade
Union and Labour Relations (Consolidation) ▇▇▇ ▇▇▇▇ (the "TULR(C)A) the
Transfer of Undertakings (Protection of Employment) Regulations 1981 or
to reinstate or re-engage any former employee, nor has any gratuitous
payment been made in connection with the actual or proposed termination
or suspension of employment or the variation of any contract of
employment.
10.6 The Disclosure Letter contains copies of all the standard terms and
conditions, staff handbooks and policies which apply to employees and
consultants of the Company and identifies which terms and conditions
apply to which employees and consultants.
10.7 There are no terms and conditions in any contract with any director,
officer, employee or consultant of the Company pursuant to which such
person will be entitled to receive any payment or benefit or such
person's rights will change as a direct consequence of the transaction
contemplated by this agreement.
10.8 All employees of the Company have received a written statement of
particulars of their employment as required by section 1 of the ERA.
10.9 The Schemes have at all times been operated in accordance with their
governing rules or terms.
10.10 No past or present director, officer, employee or any dependant thereof
or any other participant in any Scheme has made any claim against the
Company in respect of any Scheme and no event has occurred to the
Sellers knowledge which could or might give rise to any such claim.
10.11 There are no amounts owing or agreed to be loaned or advanced by the
Company to any directors, officers, employees and consultants of the
Company (other than amounts representing remuneration accrued due for
the current pay period, accrued holiday pay for the current holiday
year or for reimbursement of expenses).
55
10.12 No director, officer or employee of the Company has given or received
notice to terminate his employment.
10.13 There are no directors, officers or employees of the Company who are on
secondment, maternity leave or absent on grounds of disability or other
leave of absence (other than normal holidays or absence of no more than
one week due to illness).
10.14 No directors, officers or employees of the Company are members of a
trade union, staff association or any other body representing workers
and no such union, association or body is recognised by the Company for
the purposes of collective bargaining.
10.15 The Disclosure Letter contains copies of and full details of all rights
and liabilities relating or pursuant to any collective agreements
(whether with a trade union, staff association or any other body
representing workers and whether legally binding or not) concerning the
Company.
10.16 So far as the Sellers are aware within the three years preceding the
date hereof the Company has not been engaged or involved in any trade
dispute (as defined in section 218 of the TULR(C)A) with any employee,
trade union, staff association or any other body representing workers
and no event has occurred which could or might give rise to any such
dispute and no industrial action involving employees of the Company,
official or unofficial, is now occurring or threatened nor has any
industrial relations or employment matter been referred either by the
Company or its employees or by any trade union staff association or any
other body representing works to ACAS for advice, conciliation or
arbitration.
10.17 So far as the Sellers are aware no past or present director, officer,
employee or consultant of the Company or any predecessor in business
has any claim or right of action 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 or arising out of or connected with the
termination of his office or employment
and no event or inaction has occurred which could or might give rise
to any such claim.
56
10.18 There are no enquiries or investigations existing, pending or
threatened affecting the Company in relation to any directors,
officers, employees or consultants by the Equal Opportunities
Commission, the Commission for Racial Equality or the Health and Safety
Executive.
10.19 So far as the Sellers are aware, there are no terms or conditions under
which any director, officer or employee of the Company is employed, nor
has anything occurred or not occurred prior to Completion that may give
rise to any claim for sex discrimination, race discrimination,
disability discrimination or equal pay either under domestic United
Kingdom or European Law whether by such director, officer.
10.20 So far as the Sellers are aware, the Company has complied in all
material respects with all relevant provisions of the Treaty of Rome,
EC Directives, statutes, regulations, codes of conduct, collective
agreements, terms and conditions of employment, orders, declarations
and awards relevant to the Company's directors, officers, employees and
consultants or the relations between the Company and any trade union,
staff association or any other body representing workers.
10.21 The Company has not entered into any agreement and no event has
occurred which may involve the Company in the future acquiring any
undertaking or part of one such that the Transfer of Undertakings
(Protection of Employment) Regulations 1981 may apply thereto.
10.22 In relation to any transactions prior to the date of this Agreement to
which the following legislative provisions apply, the Sellers and the
Company have complied with their obligations to inform and consult with
Trade Unions and other representatives of workers and to send notices
to the Secretary of State pursuant to s.188 - 194 of the TULR(C)A and
Regulations 10 and 11 of the Transfer Regulations. In relation to the
transaction to which this Agreement relates, the Seller and Company
have complied with such obligations pursuant to s.188 - 194 of the
TULR(C)A.
10.23 The Company has maintained adequate and suitable records regarding the
service of its directors, officers, employees and consultants such
records comply with the requirements of the Data Protection ▇▇▇ ▇▇▇▇.
10.24 The Company has not entered into any agreement or arrangement for the
management or operation of its business or any part thereof other than
with its employees.
57
11 EVENTS SINCE BALANCE SHEET DATE
Since the Balance Sheet Date:
11.1 the business of the Company has been carried on in the ordinary and
usual course, without any interruption or alteration in its nature,
scope or manner, and so as to maintain the same as a going concern;
11.2 there has been no material adverse change in the financial or trading
position of the Company;
11.3 no dividends, bonuses or other distributions have been paid, declared
or made in respect of any shares or stock of the Company;
11.4 no share or loan capital of the Company has been allotted or issued or
agreed to be allotted or issued and the Company has not undergone any
capital reorganisation or change in its capital structure;
11.5 the Company has not other than in the ordinary course of trading
disposed of, or agreed to dispose of, an asset or assumed or incurred
or agreed to assume or incur a liability, obligation or expense (actual
or contingent);
11.6 the Company has not acquired or agreed to acquire an asset for an
amount which is higher than open market arms-length value;
11.7 the Company has not repaid any sum in the nature of borrowings in
advance of any due date or made any loan or incurred any indebtedness;
11.8 the Company has not paid nor is under an obligation to pay any service,
management or similar charges or any interest or amount in the nature
of interest to any other person or incurred any liability to make such
a payment or made any payment to any Seller or any of their Related
Parties;
11.9 as regards the Sole Agency Business no customer has
11.9.1 ceased; or
11.9.2 materially reduced its trade with the Company or informed or
threatened the Company that it may so cease or materially
reduce such trade, or altered the terms of trade to the
Company's disadvantage;
58
11.10 as regards the Homecare Business and the Non-Contract Client Business
no customer has ceased or materially reduced its trade with the Company
or informed or threatened the Company that it may so cease or
materially reduce such trade, or altered the terms of trade to the
Company's disadvantage, in each case such as is material in the context
of the Company's business.
12 SHARES AND SECURITIES
12.1 There is no Encumbrance in relation to any of the shares or unissued
shares of the Company and are no options or other agreements or
arrangements outstanding which call for the sale, transfer, issue,
allotment, conversion, redemption or repayment of, or accord to any
person the right (whether exercisable now or in the future and whether
contingent or not) to call for the sale, transfer, issue, allotment,
conversion, redemption or repayment of, any shares, loan stock or other
securities in the capital of the Company and there are no claims,
charges, liens, equities or Encumbrances on the shares issued or
unissued of the Company.
13 LOANS
13.1 Details of all financial facilities available to the Company are
contained in the Disclosure Letter. The Company has no borrowings.
13.2 The Company has not factored any of its debts or engaged in any
financing of a type which would not require to be shown or reflected in
its accounts.
13.3 The Company is not party to and is not liable (including contingently)
under a guarantee indemnity or other agreement to secure or incur a
financial or other obligation with respect to another person's
obligation.
13.4 The Company does not have nor has it had an investment or other grant
or subsidy made to it by any person.
13.5 A statement in the agreed terms of all the bank accounts of the Company
as at the opening of business on the date of this Agreement has been
supplied to the Buyer and the balances are as stated in the statement.
The Company does not have any other bank or deposit accounts not
included in such statement. Since such statement there have been no
payments out of any such account except for routine payments.
59
14 LITIGATION ETC.
14.1 Except as plaintiff in proceedings relating to the collection of debts
arising in the ordinary course of business of less than (pound)5,000
each and (pound)10,000 in aggregate;
14.1.1 the Company is not involved and has not during 4 years ending
on the date hereof been involved (whether as plaintiff or
defendant or otherwise), in any civil, criminal or arbitration
proceedings or in any other proceedings in any jurisdiction
and no such proceedings are threatened or pending; and
14.1.2 no person for whose acts or defaults the Company may be liable
is, or has during 4 years ending on the date hereof has been
involved (whether as plaintiff or defendant or otherwise), in
any civil, criminal or arbitration proceedings or in any other
proceedings in any jurisdiction resulting from their conduct
in relation to the Company's business and no such proceedings
are threatened or pending.
14.2 So far as the Sellers are aware there are no facts which are likely to
result in any such proceedings being brought by or against the Company
or against any person for whose acts or defaults the Company may be
vicariously liable or whom the Company is liable to indemnify.
14.3 There is no outstanding judgment, order, decree, arbital award or
decision of a court, tribunal, arbitrator or government agency in any
jurisdiction against the Company or a person for whose acts or defaults
the Company may be vicariously liable.
15 INSOLVENCY
15.1 No order has been made or petition presented or resolution passed for
the winding up of the Company or for the appointment of a provisional
liquidator to the Company or for an administration order in respect of
the Company.
15.2 No distress, execution or other process has been levied on any of the
assets of the Company.
15.3 The Company has not stopped payment of its debts as they fall due nor
is insolvent or unable to pay its debts for the purposes of section 123
of the Insolvency ▇▇▇ ▇▇▇▇ (but for this purpose ignoring the reference
to "if it is proved to the satisfaction of the court that" in section
123(1)(e) and 123(2)).
15.4 No administrative receiver or receiver and manager or receiver has been
appointed of the whole or part of the business or assets of the
Company.
60
15.5 No voluntary arrangement under Section 1 of the Insolvency ▇▇▇ ▇▇▇▇ has
been proposed or approved in respect of the Company. No compromise or
arrangement under Section 425 of the Companies ▇▇▇ ▇▇▇▇ has been
proposed, agreed to or sanctioned in respect of the Company. Neither
the Company nor any of the Sellers has entered into any compromise or
arrangement with its or their respective creditors generally or any
class of its or their respective creditors.
15.6 No action has been taken by the Registrar of Companies to strike the
Company off the register under Section 652 of the Companies ▇▇▇ ▇▇▇▇.
15.7 None of the Sellers has been made bankrupt nor has a petition been
presented to make any of them bankrupt.
16 INSURANCES
16.1 Details of all current insurances effected by the Company are set out
in the Disclosure Letter (the "Policies") and all such insurances are
valid and effective and not void or voidable and all premiums have been
duly paid to date and so far as the Sellers are aware there is no fact
or matter which could lead to any such policy being avoided or
repudiated.
16.2 No claim is outstanding as to any of the Policies and so far as the
Sellers are aware no matter exists which might give rise to a claim
under any of the Policies.
17 OTHER
17.1 No person is entitled to receive from the Company a finder's fee,
brokerage or commission in connection with this Agreement or anything
in it and the Company is not liable to pay to any of its directors,
employees, agents and advisers any sum whatsoever in connection with
the sale of the Shares.
18 CONSTITUTION
18.1 The Company has the power to carry on its business as now conducted and
the business of the Company has at all times been carried on intra
▇▇▇▇▇.
REGISTER OF MEMBERS
18.2 The register of members of the Company has been properly kept and
contains true and complete records of the members from time to time of
the Company and the Company has
61
not received any notice or allegation that any of them is incorrect or
incomplete or should be rectified.
POWERS OF ATTORNEY
18.3 The Company has not executed any power of attorney or conferred on any
person other than its directors, officers and employees any authority
to enter into any transaction on behalf of or to bind the Company in
any way and which power of attorney remains in force or was granted or
conferred within three years of the date of Completion.
STATUTORY BOOKS AND FILINGS
18.4 (a) The statutory books of the Company are up-to-date, in its
possession and are true and
complete in accordance with the law.
(b) All resolutions, annual returns and other documents required
to be delivered to the Registrar of Companies (or other
relevant company registry or other corporate authority in any
jurisdiction) have been properly prepared and filed and are
true and complete and the common seal of the Company is in its
possession.
19 PENSIONS
19.1 Save as disclosed the Company is under no obligation or commitment, nor
is it a party to any custom or practice, to pay, provide or contribute
towards any "RELEVANT BENEFITS" within the meaning of section 612 of
the TA (ignoring the exception in that section), or sickness or
disability benefits, to or in respect of any person and has not at any
time participated in or contributed towards any scheme or arrangement
(including personal pension schemes and retirement annuity contracts)
which has as its purpose or one of its purposes the provision of any
such benefits (other than schemes which have been fully wound up).
19.2 No undertaking or assurance (whether legally binding or not) has been
given by the Company to any person as to the continuance, introduction,
increase or improvement of any such benefit or scheme or arrangement as
is referred to in paragraph 19.1 of this schedule as disclosed.
19.3 Full and accurate details of the payments made to the personal pension
plans of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ have been supplied to the
Buyer or the Buyer's Solicitors.
62
SCHEDULE 2
PART 2
LIMITATIONS
1.1 The Warranties are given subject to the matters disclosed in this
Agreement and in the Disclosure Letter.
1.2 The Sellers shall not be liable in respect of any claim under the
Warranties unless they shall have received from the Buyer written
notice giving details of the relevant claim including, if reasonably
practicable, the Buyer's estimate of the amount of the claim:
1.2.1 in the case of any claim other than a claim for breach of
Warranties relating to Taxation, within a period of two years
after Completion;
1.2.2 in the case of any claim under the Warranties relating to
Taxation, within a period ending on 28 November 2006;
and so that any such claim shall (if not previously satisfied, settled
or withdrawn) be deemed to have been waived or withdrawn at the
expiration of twelve months after notification of such claim unless
proceedings in respect of such claim shall then have already been
served upon the Sellers.
1.3 The Sellers shall not be liable in respect of any claim under the
Warranties:-
1.3.1 if and to the extent that such liability arises or is
increased as a result of:-
(a) any voluntary act or omission of the Buyer or the
Company or of any holding company or subsidiary of
either of them or their respective successors in
title after Completion otherwise than in the ordinary
course of business as carried on at the date of this
Agreement, pursuant to a legally binding obligation
incurred prior to the date of this Agreement or
required by law or applicable regulation; or
63
(b) any change in any rate of Taxation made after
Completion with retroactive effect; or
(c) legislation being introduced or amended or a judgment
made the effect of which is to restate common law
after the date of this Agreement;
1.3.2 if and to the extent that provision or reserve in respect of
the matters giving rise to such liability has been made in the
Accounts; or
1.3.3 if and to the extent that such liability relates to Taxation
for which the Company is or may become liable wholly or
primarily as a result of transactions or the implementation of
transactions in the ordinary course of its business after the
Balance Sheet Date; or
1.3.4 if and to the extent that the Buyer or the Company have made
recovery (and subject to full recovery of the costs of such
recovery and after deduction of any tax paid in respect of
such recovery) in respect of any loss or damage suffered by
either of them arising out of the breach of Warranty under the
terms of any insurance policy for the time being in force; or
1.3.5 which would not have arisen but for anything expressly
provided to be done pursuant to this Agreement or which is
otherwise done at the written request or with the consent of
the Buyer; or
1.3.6 if any claim arising under the Warranties shall arise by
reason of some liability of the Buyer or the Company which at
the time the claim is notified to the Sellers is contingent
only, in which case the Sellers shall not be under any
obligation to make any payment in respect of such claim until
such time as the contingent liability becomes an actual
liability and is due and payable.
1.4 In addition, the Sellers shall not be liable in respect of any claim
under the Warranties to the extent that the amount by which any
Taxation for which the Company is or would be liable to be assessed or
accountable is reduced or extinguished as a result of the matter giving
rise to such claim.
64
1.5 The Sellers shall not be liable in respect of any claim under this
Agreement unless and until the liability of the Sellers for all such
claims exceeds in aggregate (pound)100,000 after taking inTO account
all amounts available for set off or deduction pursuant to the
provisions of this schedule
1.6 The total liability of the Sellers arising by reason of any claims
under this Agreement and the Tax Deed shall not exceed the aggregate
amount of (pound)8,500,000.
1.7 If the Buyer or the Company is entitled to recover from some other
person any sum in respect of any matter or thing which is or has been
the subject of a successful claim under the Warranties, the Buyer
shall, and shall procure that the Company shall, if so required by the
Sellers and at the cost of the Sellers, take all appropriate and
reasonable steps to enforce such recovery (subject to the Buyer being
indemnified and secured to its reasonable satisfaction against all
costs and expenses which may be incurred by reason of such action). The
Buyer shall have no obligation to take any action which in its opinion
would or is likely to cause material damage to the business or goodwill
of the Company or any member of the Buyer's Group.
1.8 The Buyer shall reimburse to the Sellers any amounts subsequently
recovered by or paid to the Buyer or the Company from or by any third
party in respect of any matter or liability in respect of which the
Sellers have paid any sum to the Buyer and/or the Company under the
Warranties up to a maximum sum equal to the amount paid provided that
the Buyer and/or the Company shall be entitled to deduct from such
amounts all reasonable expenses of recovery and Taxation payable in
respect of such amounts.
1.9 The only remedy of the Buyer in respect of a claim under the Warranties
shall be in damages and no breach of Warranty shall entitle the Buyer
to rescind or terminate this Agreement.
1.10 No successful claim under the Warranties relating to Taxation shall
become payable until one calendar month prior to the date on which the
Taxation in respect of which the claim is made becomes legally due and
payable.
1.11 Nothing in this Agreement or in the Warranties shall be deemed to
relieve the Buyer or the Company from any common law duties to mitigate
any loss or damage incurred by it or them.
65
1.12 The Buyer shall promptly give to the Sellers such information as they
may reasonably request to enable them to investigate such claim and
their potential liability in respect of such claim;
1.12.1 the Buyer shall procure that the Company shall take such
action as the Sellers may reasonably request in writing to
avoid, dispute, resist, appeal, compromise or defend any third
party claim which is the subject of a warranty claim but
subject to the Buyer or the Company being indemnified and
secured to its reasonable satisfaction by the Sellers against
all losses, costs, charges and expenses incurred and provided
always that the Buyer shall not be required to procure the
Company to take any action which in the reasonable opinion of
the Buyer would be likely to or may materially damage or
prejudice the business interests or goodwill of the Company.
If the Sellers do not request the Buyer or the Company to take
any such action within 30 days of the notice to the Sellers,
the Buyer or the Company shall be free subject to paragraph
1.11 above to admit, settle, pay or discharge the claim;
1.12.2 Any failure by the Sellers to exercise their entitlement under
paragraph 1.12.1 above shall not prejudice their rights under
this Agreement.
66
SCHEDULE 2
PART 3
BUYER'S WARRANTIES
1 DOCUMENTS DELIVERED
The Buyer has delivered to the Sellers:
1.1 a true and complete copy of the Buyer's audited financial statements
comprising the profit and loss account for the accounting period ended
30 September 1999 and the balance sheet as at 30 September 1999
together with the notes on such financial statements, directors' report
and auditors certificate (the "BUYER'S ACCOUNTS"); and
1.2 a true and complete copy of:
1.2.1 the memorandum and articles of association of the Buyer;
1.2.2 the securities purchase agreement between the Buyer and
Transworld Holdings (UK) Limited dated 17 December 1999;
1.2.3 a schedule showing the categories of shareholders and holders
of warrants of the Buyer as at the date of this Agreement;
1.2.4 the warrant instrument dated 17 December 1999; and
1.2.5 the voting trust agreement dated 17 December 1999.
all as annexed to this Agreement and initialled by or on behalf of the
Parties for identification, together known as the "BUYER'S
INFORMATION".
2 BUYER'S INFORMATION
2.1 Save as disclosed in the Buyer's Information:
2.1.1 the Buyer has no share capital in issue; and
2.1.2 there are no options or other agreements or arrangements
outstanding which call for the sale, transfer, issue,
allotment, conversion, redemption or repayment of, or accord
to any person the right (whether exercisable now or in the
future and
67
whether contingent or not) to call for the sale, transfer,
issue, allotment, conversion, redemption or repayment of, any
shares, loan stock or other securities in the capital of the
Buyer and there are no claims, charges, liens, equities or
Encumbrances on the shares issued or unissued of the Buyer;
and
2.2 the particulars given in the Buyer's Information of all categories of
registered holders of its issued Share Capital or such rights as are
referred to in paragraph 2.1.2 are true and accurate.
3 ACCOUNTS
3.1 The Buyer's Accounts comply with the Companies ▇▇▇ ▇▇▇▇ and all other
applicable statutes and regulations and show a true and fair view of
the state of affairs of the Buyer as at 30 September 1999 and of its
results for the financial period ended on 30 September 1999;
68
SCHEDULE 3
PART I
UK PREMISES
UNITED KINGDOM - LEASEHOLD
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
DOCUMENT PROPERTY DATE PARTIES CURRENT CURRENT ESTATE
TENANT LANDLORD OWNER
1 Lease Basement 20 December Markheath Nightingale London & Nightingale
1995 Properties Nursing Bureau Regional Nursing
Limited (1) Limited Properties Bureau
Nightingale Nursing (awaiting Limited
Bureau Limited (2) confirmation)
▇ ▇ ▇▇▇▇▇▇▇▇ and
W-A ▇▇▇▇▇▇▇▇
Guarantors (3))
2 Lease Lower Ground 27 July 1992 Markheath Nightingale London & Nightingale
Floor Properties Nursing Bureau Regional Nursing
Limited (1) Limited Properties Bureau
▇ ▇ ▇▇▇▇▇▇▇▇ and (awaiting Limited
W-A ▇▇▇▇▇▇▇▇ (2) confirmation)
3 Lease ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Nightingale London & Nightingale
Properties Nursing Bureau Regional Nursing
Limited (1) Limited Properties Bureau
Nightingale Nursing (awaiting Limited
Bureau Limited (2) confirmation)
▇ ▇ ▇▇▇▇▇▇▇▇ and
W-A ▇▇▇▇▇▇▇▇ (3)
4 Licence to ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Assign Floor and 1995 Properties
Ground Floor Limited (1)
▇ ▇ ▇▇▇▇▇▇▇▇ and
W-A ▇▇▇▇▇▇▇▇ (2)
Nightingale Nursing
Bureau Limited (3)
5 Assignment Lower Ground 21 February ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Floor 1995 ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇-
▇▇▇▇ ▇▇▇▇▇▇▇▇ (1)
Nightingale Nursing
Bureau Limited (2)
6 Rent Review Ground Floor 18 September TBI plc (1)
Memorandum 1997 Nightingale Nursing
Bureau Limited (2)
7 Deed of Ground Floor 20 December Markheath
Variation and Lower 1995 Properties
Ground Floor Limited (1)
Nightingale Nursing
Bureau Limited (2)
PART II
AUSTRALIAN PREMISES
AUSTRALIA - LEASEHOLD
▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
8 Lease Suite 13 28 June 1999 Juketop Pty Limited Nightingale Juketop Nightingale
ACN 056 896 327 (1) Nursing Bureau Pty Nursing
Nightingale Nursing Limited (2) Limited Bureau
Bureau Limited (2) ACN 056 Limited
896 327
69
DOCUMENT RENT TERM DATES RENT RENT USE
PAYMENT REVIEW DATE
1 Lease (pound) 25 December Quarterly 25 March Offices within Class
6,000 pa 1995 to 27 in advance 1997 B1(a) of the Town and
subject July ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇
to review Classes) Order 1987
2 Lease (pound) 10 years Quarterly 25 March Offices within Class
9,120 pa from 27 in advance 1997 B1(a) of the Town and
subject July ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇
to review Classes) Order 1987
3 Lease (pound) 10 years Quarterly 25 March Offices within Class
5,500 pa from 27 in advance 1997 B1(a) of the Town and
subject July ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇
to review Classes) Order 1987
4 Licence to
Assign
5 Assignment
6 Rent Review
Memorandum
7 Deed of
Variation
8 Lease $16,450 23 April Monthly Not Commercial offices
per 1999 to 22 in advance applicable including operation as a
annum April 2003 nursing employment bureau
70
SCHEDULE 4
TAX DEED
DATED: 2000
BETWEEN:
(1) The several persons whose names and addresses are set out in schedule 1
("THE SELLERS") and
(2) TRANSWORLD HEALTHCARE (UK) LIMITED ("THE COMPANY") a company
incorporated in England and Wales with registered number 3370146,
having its registered office at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("THE BUYER");
PRELIMINARY
This Deed is entered into pursuant to an agreement dated April 2000 (the
"Agreement") made between the Sellers and the Buyer for the sale and purchase of
the whole issued share capital of Nightingale Nursing Bureau Limited (the
"Company").
1 DEFINITIONS AND INTERPRETATION
In this Deed unless inconsistent with the context or otherwise
specified:
1.1 the following expressions have the following meanings:
"BUSINESS DAY" : a day on which the clearing banks are
open in London for the transaction of
all normal business.
"EVENT" : any event, act, transaction or
omission and without limitation
includes the earning, receipt or
accrual of any profit, income or
gains or any distribution, failure to
distribute, acquisition, disposal,
transfer,
71
payment, loan or advance, and
membership of a group or VAT group;
"RELIEF" : includes any loss, relief, allowance,
exemption, set-off, deduction, right
to repayment or credit or other
relief of a similar nature granted by
or available in relation to Taxation
pursuant to any legislation or
otherwise;
"TAXATION OR TAX" : includes any form of taxation, levy,
duty, charge, contribution,
withholding or impost of whatever
nature (including any applicable
fine, penalty, surcharge or interest)
imposed by a Tax Authority;
"TAX AUTHORITY" : any local, municipal, governmental,
state, federal or other fiscal or
revenue authority, body or official
anywhere in the world (which shall
include reference to customs and/or
excise authorities) competent to
impose Taxation;
"TAX CLAIM" : includes any claim, assessment,
notice, demand, letter or other
document issued or any action taken
by or on behalf of a Tax Authority
(or any other circumstance in
relation to the operation of the pay
and file system concerning the
running of tax affairs) from which it
appears that the Company is liable or
is sought to be made liable to make
any payment to a Tax Authority or to
any other person (whether or not the
same is primarily payable by the
Company and whether or not the
Company shall or may have any right
of reimbursement against any other
person) or is denied or sought to be
denied any Relief or is denied or
sought to be denied any repayment of
Taxation within clause 2.2 below;
72
"TAXATION STATUTES" : means all statutes, statutory
instruments, decrees, orders,
enactments, directives and
regulations whether domestic or
foreign, providing for or imposing
tax.
1.2 Words and expressions defined in the Agreement shall bear the
same meanings wherever used herein and those provisions of the
Agreement dealing with construction or interpretation,
governing law, jurisdiction, service of notice and agents for
the service of process shall (except where otherwise provided)
apply equally herein.
1.3 References to any English legal term for any action, remedy,
method of judicial proceedings, legal document, legal status,
court, official or any legal concept or thing shall in respect
of any jurisdiction other than England be deemed to include
what most nearly approximates in that jurisdiction to the
English legal term.
1.4 Any reference to an Event occurring on or before Completion
shall be deemed to include a reference to an Event which is
deemed for the purposes of any Taxation to have occurred on or
before Completion and any reference to an Event occurring
shall be deemed to include any Event which is deemed to have
occurred for the purposes of any Taxation.
2 COVENANT
2.1 Subject as hereinafter provided the Sellers hereby covenant to
pay the Buyer an amount equal to any liability:
2.1.1 of the Company for Taxation which arises in
connection with or as a result of one or more Events
occurring on or before Completion whether or not the
Taxation is chargeable against or attributable to any
other person;
2.1.2 of the Company for Taxation which would not otherwise
have been payable but for the loss, reduction,
modification or cancellation of some Relief as a
result of an Event occurring on or before Completion
where the Relief has been shown as available as an
asset in the Accounts or has been taken into
73
account in computing any provision for deferred
taxation or otherwise which appears in the Accounts
or has resulted in no provision for deferred tax
being shown in the Accounts;
2.1.3 of the Company for Taxation which would have arisen
in consequence of an Event occurring on or before
Completion but which is not payable as a result of
the utilisation or set-off of some Relief where such
Relief has arisen in respect of an Event occurring
after Completion;
2.1.4 of the Buyer or the Company for costs, charges,
interest, fines, penalties or expenses incurred by
the Buyer or the Company in connection with any Tax
Claim or liability for Taxation as mentioned in this
clause 2.1 or clause 2.2 or in taking or defending
any action under this Deed;
2.1.5 of the Company for Taxation which is properly
attributable to and/or primarily the liability of any
of the Sellers or to any company controlled by the
Sellers and for which the Company is liable as a
result of any of the Sellers or any company
controlled by the Sellers failing to discharge its
primary liability;
2.1.6 of the Company for Taxation in respect of or by
reference to any income profits or gains earned
accrued or received on or before Completion;
2.1.7 of the Company for Taxation which arises in
connection with or as a result of any failure
correctly to operate the PAYE or national insurance
contributions systems and in particular but without
prejudice to the foregoing in respect of any nurse
registered with the Company who undertakes to work in
a patient's home who is not a "qualified nurse" as
defined by the Inland Revenue or who is subsequently
found to be unqualified;
2.1.8 of the Company for Taxation in connection with the
declaration and payment of a scrip dividend and in
particular any of the transactions set out or
referred to in the Board Minutes of the Company dated
4 April 2000.
74
2.2 Any Taxation (including any repayment supplement or interest)
which would have been repaid but for the loss, reduction,
set-off or cancellation of any right to repayment of such
Taxation in consequence of an Event occurring on or before
Completion shall for the purposes of clause 2.1.1 be deemed to
be Taxation for which the Company is liable and which arises
in consequence of the Event.
3 LIMITATIONS TO THE COVENANT
3.1 The Sellers shall not be liable in respect of any claim under
the Tax Deed unless they shall have received from the Buyer
written notice giving details of the relevant claim including,
if reasonably practicable, the Buyer's estimate of the amount
of the claim within a period ending on 28 November 2006 and so
that any such claim shall (if not previously satisfied,
settled or withdrawn) be deemed to have been waived or
withdrawn at the expiration of twelve months after
notification of such claim unless proceedings in respect of
such claim shall then have already been served upon the
Sellers.
3.2 The Sellers shall not be liable in respect of any claim under
the Tax Deed to the extent that the Buyer has recovered an
amount in respect of the same liability under the Agreement
save that nothing in this clause 3.2 shall ▇▇▇▇▇▇ the right of
the Buyer to choose whether to claim under the Warranties or
the Tax Deed.
3.3 The Sellers shall not be under any liability under this Deed
to the extent that:-
3.3.1 provision or reserve has been made for such liability
in the Accounts; or
3.3.2 the liability arises as a result of transactions in
the ordinary course of business since the Balance
Sheet Date 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
75
(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 of the Tax
Claim arising 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; or
(vi) any disposal of a capital asset for a
consideration in excess of (pound)10,000; or
(vii) any failure by the Company to comply with
any provision of the Taxation Statutes or
correctly to operate the PAYE or National
Insurance Systems
3.3.3 such liability arises or is increased only as a
result of any increase in the rates of Taxation
occurring after the Balance Sheet Date with
retrospective effect;
3.3.4 such liability arises or is increased as a result of
any act or omission of the Buyer, the Company or of
any holding company or subsidiary of either of them
or their respective successors in title after
Completion otherwise than
76
in the ordinary course of business as carried on at
the date of this Deed and otherwise than pursuant to
a legally binding obligation incurred prior to the
date of this Deed and otherwise than as required by
law or applicable regulation;
3.3.5 any claim shall arise by reason of some liability of
the Buyer or the Company which at the time the claim
is notified to the Sellers is contingent only, in
which case the Sellers shall not be under any
obligation to make any payment in respect of such
claim until such time as the contingent liability
becomes an actual liability and is due and payable;
3.3.6 the amount by which any Taxation for which the
Company is assessed has at the time of payment in
respect of any Tax Claim by the Sellers to the Buyer
under this Deed or the Agreement, already been
reduced or extinguished as a result of the matter
giving rise to such claim (other than a reduction in
a liability to Tax which would otherwise have itself
given rise to a payment hereunder); or
3.4 The total liability of the Sellers arising by reason of any
claims under this Deed and the Agreement shall not exceed the
aggregate amount of (pound)8,500,000.
3.5 No claim under this Deed shall entitle the Buyer to rescind or
terminate the Agreement.
4 CLAIMS PROCEDURES
4.1 The Buyer shall, and shall procure that the Company shall, as
soon as reasonably practicable, give written notice to the
Sellers of any Tax Claim. Any failure by the Buyer to comply
with the foregoing shall entitle the Sellers to claim for any
resulting loss to the Sellers but shall not prejudice any
claim by the Buyer under this Deed.
4.2 The Buyer shall and shall procure that the Company will take
such action as the Sellers may reasonably request to avoid,
dispute, resist or compromise the Tax
77
Claim. If the Sellers do not request the Buyer to take any
such action within 21 days of notice to the Sellers pursuant
to clause 4.1 the Buyer shall be free to admit, settle, pay or
discharge the Tax Claim.
4.3 The Sellers shall have the right to have any action referred
to in clause 4.2 conducted by professional advisers nominated
by them for this purpose provided that:
4.3.1 the Buyer is kept informed of all matters pertaining
to such action;
4.3.2 the appointment of solicitors or other professional
advisers shall be subject to the approval of the
Buyer (such approval not to be unreasonably withheld
or delayed);
4.3.3 the Sellers shall make no settlement or compromise of
the Tax Claim which is the subject of the action
without the prior written approval of the Buyer (such
approval not to be unreasonably withheld or delayed);
4.3.4 no material communication, written or otherwise,
pertaining to the dispute (and in particular no
proposal for or consent to any settlement or
compromise thereof) shall be transmitted to the
Inland Revenue, H.M. Customs & Excise or other
taxation authority or governmental body or authority
without the same having been submitted to and
approved by the Buyer, such approval not to be
unreasonably withheld or delayed;
4.3.5 no application shall be made for postponement of Tax
unless the Buyer and the Company shall be provided
with such security as the Buyer may reasonably
require in respect of sums subsequently becoming
payable under this Deed; and
4.3.6 the Sellers shall not be entitled to resist any Tax
Claim before any court, tribunal or other appellate
body unless it has been advised by a professional tax
adviser of appropriate seniority, after disclosure of
all relevant information and documents, that it is
reasonable to resist the Tax Claim in the manner
proposed by the Sellers.
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4.4 The Buyer shall and shall procure that the Company shall give
the Sellers all reasonable co-operation, access and
assistance, technical or otherwise, for the purpose of
resisting such a Tax Claim provided that each of the Buyer and
the Company is indemnified to the reasonable satisfaction of
the Buyer by the Sellers against all losses (including
additional Tax Claims, reasonable costs, damages and expenses)
which may thereby be incurred.
5 PAYMENTS
5.1.1 The Sellers shall pay the Buyer any amount which is
required to be paid by the Sellers pursuant to clause
2.1.1 in cleared funds on or before the fifth
Business Day prior to the date on which the Taxation
in question is recoverable by or payable to the Tax
Authority demanding the Taxation or the day on which
any repayment (or increased repayment) of Tax which,
but for such Tax Claim, would have been available
would have been due;
5.1.2 notice of the amount of the payment required to be
made by the Sellers under clauses 2.1.2, 2.1.3,
2.1.4, 2.1.5, 2.1.6, 2.1.7, 2.1.8 or 2.2 shall be
given in writing by the Buyer and the Sellers shall
pay the amount to the Buyer on or before the fifth
Business Day following the date of the notice;
5.1.3 if any sum due under clause 2 is not paid by the
Sellers by the later of the due date and the date
seven days after the date of the demand made
therefor, the same shall carry interest (from such
later date until the date of payment) at the rate of
two per cent. over base rate for the time being of
National Westminster Bank PLC (or in the absence of
such rate at such equivalent rate as the Buyer shall
reasonably select) save that interest shall not start
to run in respect of any payments of Tax above until
the day on which the Company makes the payment of Tax
due.
5.2 All sums payable by the Sellers to the Buyer shall be paid
insofar as it is lawful free and clear of all deductions and
withholdings whatsoever.
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6 RECOVERIES
6.1 Subject to clause 6.3 and clause 3.3.6 in calculating amounts
due from the Sellers under this Deed no account shall be taken
of any entitlement of the Buyer or the Company to make any
recovery in respect of that amount or the circumstances giving
rise to the same from some other person or of any Relief or
other benefit which may become available to the Buyer or the
Company in consequence of the Tax Claim in question, or the
circumstances giving rise to the same.
6.2 If the Buyer or the Company is or becomes entitled to recover
from some other person (not being the Company or any employee
of the Company or (in a case where recovery from the same
could reasonably be expected significantly to damage the
Business) a customer but including, inter alia, any Tax
Authority) any amount in respect of the Tax Claim which has
resulted in a payment by the Sellers to the Buyer under this
Deed, then the Buyer shall promptly notify the Sellers of the
said entitlement and, if so required by the Sellers and if the
Sellers shall undertake to pay all costs and expenses
reasonably incurred by the Buyer and the Company, shall take
all reasonable steps to enforce or procure that the Company
shall enforce the recovery (keeping the Sellers fully informed
of progress).
6.3 If the Buyer or the Company receive:
6.3.1 a recovery as mentioned in clause 6.2; or
6.3.2 a Relief (other than a Relief provided for in the
Accounts) or other benefit as a result of a claim for
Tax giving rise to a claim by the Buyer under the
terms of this Deed (other than a reduction in a
liability to Tax which would otherwise have itself
given rise to a payment hereunder), then the Buyer
shall promptly pay to the Sellers an amount equal to
so much of that Relief or other benefit received or
sum recovered (less any Tax paid by the recipient in
respect thereof and less any costs and expenses
reasonably incurred by the Buyer and the Company) as
does not exceed the amount which the Sellers paid to
the Buyer in respect of the Tax Claim in question
(together with so much of any interest or repayment
supplement paid to the recipient of the recovery or
benefit in respect thereof as corresponds to the
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proportion of the recovery or benefit accounted for
under this clause 6.3, less any Tax thereon).
7 JOINT AND SEVERAL OBLIGATIONS
All obligations of the Sellers created by this Deed shall be their
joint and several obligations.
8 ASSIGNMENT
8.1 Subject to clause 8.2 neither any of the Sellers nor the Buyer
shall assign, encumber, dispose of or otherwise transfer any
of their rights under this Deed without the prior written
consent of the other Parties. The Buyer may assign within the
Buyer's Group provided that if the assignee ceases to be a
member of the Buyer's Group, the benefit of the assignment
will be transferred back to a member of the Buyer's Group.
8.2 It is hereby agreed and declared that the Buyer shall be
entitled to assign the benefit of all or part of this Tax Deed
by way of security to any lender, group of lenders, agent or
security trustee by way of security for the borrowings,
guarantees and/or other indebtedness of all or any part of the
Buyer's Group made or to be made pursuant to facility or other
agreements or any amendment, restatement or extension of them.
9 GENERAL
The provisions of clause 9 of the Agreement shall be deemed
incorporated herein as if expressly set out herein.
This Agreement has been signed as a deed and delivered on the date first stated
on page 1 above.
Signed and delivered as a deed )
By ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as attorney for )
Transworld Healthcare (UK) Limited )
In the presence of:- ) ..................
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Signed and delivered as a deed )
By ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ )
In the presence of:- ) ..................
Signed and delivered as a deed )
By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
In the presence of:- ) ..................
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Signed and delivered as a deed )
By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ acting through )
His duly authorised attorney )
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ )
In the presence of:- ) ..................
Signed and delivered as a deed )
By ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ acting through )
His duly authorised attorney )
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ )
In the presence of:- ) ..................
Signed and delivered as a deed )
By W-A ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇▇▇▇ )
As trustees for the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
1998 Settlement acting through their )
Duly authorised attorney )
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
In the presence of:- ) ..................
Signed and delivered as a deed )
By W-A ▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇▇▇▇ )
As trustees for the Doctor )
▇▇ ▇▇▇▇▇▇▇▇ Bare Trust for Olivia )
▇▇▇▇▇▇▇ acting through their )
Duly authorised attorney )
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
In the presence of:- ) ..................
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SCHEDULE 5
ACCOUNTING POLICIES
SPECIFIC POLICIES FOR THE PREPARATION OF THE DRAFT EARN OUT ACCOUNTS
The draft earn out accounts to be drawn up in accordance with clause 3 shall
consist of a profit and loss statement together with associated notes. It shall
be prepared in accordance with clauses 1 to 6 below.
1. BASIS OF PREPARATION
1.1 The draft earn out accounts shall be prepared in accordance with the
policies that appear, and in the order shown, below:
a) the specific accounting policies set out in clauses 2 to 6 below;
b) to the extent not covered by a) above, in accordance with the
accounting policies, principle and practices, used in the
preparation of the Accounts for the 12 month period ended 28
November 1999;
c) to the extent not covered by a) or b) above, in accordance with UK
GAAP as at the Accounts date, 28 November 1999.
1.2 The Australian profit and loss account will be prepared in the same way
as that for the year ended 28 November 1999 on an accruals basis and
will be consolidated in the same way.
2. REVENUE RECOGNITION
2.1 Sales shall be recognised and included as turnover on the date the
timesheet is entered onto the system, this date being the billing date.
Services are billed to all clients based on individual nurse's time sheet
information.
3. COSTS RECOGNITION
3.1 All direct costs of nursing services, including but not limited to
nurses' wages and expenses shall be charged to the profit and loss on the
date the associated timesheet is entered onto the system to match against
the recognition of income with appropriate adjustments for prepayments
and accruals.
3.2 All other costs, including Nightingale's central overheads and sales and
marketing costs shall be expensed in the period they relate to with
appropriate adjustments for prepayments and accruals. No accruals will be
made for the holiday pay of office employees.
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3.3 Three fifths of the salary and any other remuneration paid by the company
to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be an expense in the earn out accounts.
3.4 Remuneration of up to (pound)30,000 paid by the Buyer on account of
Nightingale (`The Company') to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ pursuant to her letter of
appointment shall, unless waived by her, be an expense in the earn out
accounts.
3.5 All costs charged should be those relating exclusively to the business of
Nightingale.
3.6 A 33% writeback of gross holiday pay collected will be credited to the
profit & loss account in each of the earn out years. The remaining 67%
collected will be set up as a reserve against which legitimate actual
holiday pay claims will be offset during the course of the earn out
years. Should the legitimate actual claims for holiday pay during an earn
out year be greater than 67% of gross holiday pay collected relating to
that period the excess claimed and paid will be a charge against the 33%
credited to the relevant earn out accounts.
3.7 Any charges (excluding any intercompany charge arising from the payment
of up to (pound)30,000 to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ set out in 3.3. above) including
management charges allocated to the Company in respect of the Buyer's
Group shall be excluded.
3.8 Full accrual shall be made for all other staff costs, including for the
avoidance of doubt, bonuses payable to directors and employees. Bonuses
shall only be payable to staff and directors other than ▇▇▇ ▇▇▇▇ (UK) and
▇▇▇▇▇ ▇▇▇▇▇ (Australia) for whom contractually defined amounts are
payable, if after an accrual is made for their payment the required earn
out profit of (pound)1.32 million remains for the year ending 3 December
2000 and (pound)1.584 million remains for the year ending 2 December
2001. In the event that either ▇▇▇ ▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇ terminate their
employment with the company during the course of the earn out period any
bonus relating to any replacement for either ▇▇▇ ▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇
should be added back for the purposes of calculation of the earn out
profit to the extent that, when aggregrated with bonuses already paid in
the period, it exceeds the amount that either ▇▇▇ ▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇
would have earned had they remained with the company.
Any bonus payable in excess of 5% of gross salary for individuals other
than those named above or their replacements will be treated as an
addback in the earn out accounts.
3.9 An adjustment shall be made in order to ensure that Nightingale does not
incur a duplication of charges due to changing over insurance policies,
for example any `run off' insurance costs will not be charged as an
expense in the earn out accounts. A minimal increment in insurance costs
is anticipated with an estimate of the total cost being (pound)28,000 per
annum.
3.10 Minimal additional net financial reporting costs will be deducted. These
are anticipated as being the reasonable costs of employing an accountant
or book-keeper to provide
85
information necessary for the Buyer if and only if the Buyer cannot, in
its reasonable view, get ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or another employee of the
Company to provide such information (without incurring material
expenditure in training ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or such other employee).
Nightingale will not suffer audit charges during the earn out period.
3.11 Interest or other charges charged by the companies in the Buyer's Group
or charged by third parties in respect of monies lent to the Company
shall be added back.
3.12 An adjustment shall be made to eliminate any exceptional expenditure or
excess depreciation incurred by Nightingale at the direction of the Buyer
which is not incurred for the benefit of Nightingale's business. In the
case of exceptional expenditure which has not been so eliminated, if the
payback period is not within the earn out period then associated net
costs will not be charged in the earn out accounts. Net costs are defined
as the value of the costs of any specific project (including for the
avoidance of doubt any depreciation incurred on any capital expenditure
relating to that project) after deducting any incremental turnover
achieved as a direct result of that project.
3.13 Monetary assets and liabilities denominated in foreign currencies are
translated into sterling at the rates of exchange ruling at the balance
sheet date. Transactions in foreign currencies are recorded at the rate
ruling at the date of the transaction. All differences are taken to the
profit and loss account.
3.14 50% of certain expenses totalling (pound)62,000 incurred during the
period from 29 November 1999 to completion shall be added back in the
earn out accounts for the year ending 3 December 2000. The figure added
back will be (pound)31,000. Details of these are set out overleaf:
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Salaries 44 (Breakdown: WAT 31, DT 9, RT 4)
BUPA 1
Pension 5
Accounting charge 8
Amortisation 4
------------
62
------------
50% of above costs 31
-----------
3.15 The costs associated with the financial assistance provided on or around
the date of this Agreement shall if deducted be added back.
4. FIXED ASSETS
4.1 No amortisation of goodwill arising in the books of the purchaser on the
purchase of Nightingale shall be suffered by Nightingale. In addition
there will be no amortisation of any other intangible asset that might be
included in the earn out accounts.
4.2 The cost of tangible fixed assets is their purchase cost, together with
any incidental costs of acquisition.
Depreciation is calculated so as to write off the cost, or valuation, of
fixed assets net of residual value on a straight line basis over the
expected useful economic lives of the assets concerned. The principal
annual rates used for this purpose are:
Freehold land Not depreciated
Freehold buildings 4%
Short leasehold property Over term of lease
Computers 25%
Office equipment 25%
Motor vehicles 25%
Fixtures and fittings 20%
5. CURRENT ASSETS
5.1 All debtors aged greater than 120 days in the Nightingale business at the
year end to be provided for in the earn out accounts.
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6. LIABILITIES
6.1 Amounts received from customers for services not yet given at the end of
each earn out accounting period, shall be treated as a liability and
included in deferred income. For clarification such amounts will not be
recognised as income or turnover.
6.2 Full provision shall be made for NIC, PAYE & VAT, including any interest
and penalties, as at the end of each earn out accounting period.
6.3 Provision for dilapidation and maintenance costs shall be provided for in
the earn out accounts as billed.
This Agreement has been signed on the date first stated on page 1 above.
By ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as attorney for )
Transworld Healthcare (UK) Limited )
In the presence of:- ) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Signed by ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ )
In the presence of:- ) ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Signed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
In the presence of:- ) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Signed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
acting through his duly authorised )
attorney ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ )
In the presence of:- ) ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Signed by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
acting through his duly authorised )
attorney ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ )
In the presence of:- ) ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
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Signed by W-A ▇▇▇▇▇▇▇▇ and )
▇▇ ▇▇▇▇▇▇▇▇ as trustees for )
the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
1998 Settlement acting through their )
Duly authorised attorney ) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
In the presence of:- ) ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Signed by W-A ▇▇▇▇▇▇▇▇ )
and ▇▇ ▇▇▇▇▇▇▇▇ )
As trustees for the Doctor )
▇▇ ▇▇▇▇▇▇▇▇ Bare Trust for Olivia )
▇▇▇▇▇▇▇ acting through their )
Duly authorised attorney ) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
In the presence of:- ) ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
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