AREMISSOFT (UK) PLC (1)
and
TOREX HEALTH LIMITED (2)
AGREEMENT
For the sale and purchase
of business and assets
CONTENTS
1. Definitions and interpretation........................................... 1
2. Agreement for Sale....................................................... 6
3. Debtors andCreditors..................................................... 7
4. Continuing Contracts..................................................... 7
5. Companycars.............................................................. 9
6. Employees................................................................ 9
7. Consideration............................................................11
8. Completion...............................................................11
9. Post-Completion matters..................................................12
10. Records..................................................................12
11. Value Added Tax..........................................................13
12. Warranties...............................................................14
13. Indemnities..............................................................15
14. Apportionments...........................................................16
15. Restrictive covenants....................................................17
16. Continuing effects of this Agreement.....................................18
17. Further assurance........................................................18
18. Announcements and Confidentiality........................................18
19. Releases, waivers etc....................................................19
20. Notices..................................................................19
21. Entire agreement.........................................................20
22. Alterations..............................................................20
23. Counterparts.............................................................21
24. Costs....................................................................21
25. Successors and assigns...................................................21
26. Applicable law and jurisdiction..........................................21
Schedule 1....................................................................22
Schedule 2....................................................................23
Excluded Assets...............................................................23
Schedule 3....................................................................24
Warranties....................................................................24
1. The Vendor...............................................................24
2. Accounts and Financial Information.......................................24
3. The Assets...............................................................25
4. The Business.............................................................25
5. Events since the Accounts Date...........................................26
6. Contracts................................................................26
7. Employees................................................................27
8. Pensions.................................................................28
9. Business intellectual property rights....................................28
10. Litigation...............................................................29
11. Compliance with law etc..................................................29
12. VAT......................................................................29
13. Property.................................................................29
14. General..................................................................30
Schedule 4....................................................................31
Limitations of the liability of the Vendor and Remedy.........................31
1. Remedy..............................................................
2. Exclusion of certain claims.........................................
3. Claims against thirdparties.........................................
4. Time Limits.........................................................
5. Thresholds..........................................................
6. Aggregate maximum...................................................
7. No duplication of liability.........................................
8. Successful claims deemed to constitute a reduction in Purchase Price
9. Mitigation..........................................................
10. Fraud etc...........................................................
Schedule 5...............................................................
Employees................................................................
Schedule 6...............................................................
Details of the Property..................................................
Schedule 7...............................................................
Business Contracts.......................................................
Schedule 8...............................................................
Leasing Agreements.......................................................
Agreed form documents
Goodwill Assignment
Debtors Assignment
Equipment List
Vehicles List
The Licence
Disclosure Letter
Management Accounts
1
THIS AGREEMENT is dated 5th September 2000 and is made BETWEEN:
(1) AREMISSOFT (UK) PLC (No. 2968497) whose registered office is at ▇▇▇▇▇▇▇▇▇▇
House, ▇▇▇▇▇▇ Way, ▇▇▇▇▇▇▇▇▇▇ Park, Woking, Surrey, GU21 3LG ("the
Vendor");
(2) TOREX HEALTH LIMITED (No. 2116828) whose registered office is at
Churchfields, Stonesfield, Witney, Oxfordshire 0X8 8PQ ("the Purchaser").
NOW IT IS HEREBY AGREED as follows:
1. Definitions and interpretation
1.1 In this Agreement, unless the context otherwise requires:
"Accounts Date" means 31 "December 1999;
"Accrued Liabilities" means the accrued liabilities of the Business as
at the Completion Date being, the responsibility for the discharge of
which shall pass to the Purchaser,
"Assets" means the assets listed in column (1) of Schedule I,
excluding the Excluded Assets;
"Business" means the business of the supply of IT systems and services
to the primary healthcare market as carried on by the Vendor as at the
date hereof;
"Business Contracts" means the benefit (subject to the burden) of all
contracts, engagements and orders relating exclusively to the Business
which have been entered into or placed (whether in writing or orally)
with the Vendor on or before the Completion Date but which remain to
be performed in whole or in part at the Completion Date by the Vendor
or the other party to such contract and including, without limitation,
the contracts, engagements and orders listed in Schedule 7;
"business day" means a day (other than a Saturday or Sunday) on which
banks are ordinarily open for the transaction of normal banking
business in the City of London;
"Business Names" means "AremisSoft, AremisSoft Healthcare, LK Global
and LK Global Healthcare";
"Business Records" means all books, files, documents and records owned
by the Vendor (including records held in computerized form) relating
exclusively to the Business, the Employees or any of the Assets, but
excluding the Retained Records;
"CA 1985" means the Companies ▇▇▇ ▇▇▇▇;
"Cash" means the cash balances at bank and in hand held by the Vendor
at the Completion Date;
"Completion" means completion of the Sale by the performance by the
parties of their respective obligations under clause 8;
2
"Completion Date" means 7 September 2000
"Continuing Contracts" means the Business Contracts and the Leasing
Agreements;
"Creditors" means suppliers and other trade creditors to which or to
whom the Vendor owes a debt in connection with the Business as at the
Completion Date and the amounts due as at Completion from the Vendor
to Customs for VAT and any other liability of the Vendor to Taxation
and any sums due to the Vendor's bankers and to other members of the
Vendor's Group but excluding the Excluded Liabilities;
"Customs" means HM Customs & Excise;
"Debtors" means:
(a) all book debts due to the Vendor at the Completion Date,
(including any VAT thereon) from trade debtors exclusively
in connection with the Business (including pursuant to any
of the Business Contracts);
(b) all sums (including any VAT thereon) in respect of
prepayments made by the Vendor which relate exclusively to
the Business at the Completion Date;
"Debtors Assignment" means the deed of assignment of the Debtors, in
the agreed form, to be entered into on Completion;
"Deferred Income" means the deferred income in respect of the Business
comprising the total payments made to the Vendor prior to the
Completion Date by clients and customers for maintenance, support and
other services to be provided in relation to the Business after the
Completion Date, the benefit of the cash amount of such deferred
income remaining with the Vendor and the responsibility for the
provision of such services passing to the Purchaser, such
responsibility being hereinafter referred to as the "Deferred Income
Liability";
"Disclosure Letter" means the letter of the same date as this
Agreement in the agreed form from the Vendor to the Purchaser
(including all documents and other written material annexed to it)
disclosing certain matters in relation to the Warranties;
"Employees" means the employees of the Vendor whose names are listed
in Schedule 5 being persons employed in connection with the Business
as at the date hereof and whose employment details are set out in the
Disclosure Letter,
"Encumbrances" includes all claims, liens, mortgages, pledges,
charges, hypothecations, options, encumbrances, restrictions, powers
of sale and equities and other rights exercisable by third parties (or
an agreement or commitment to create any of the foregoing) but
excluding normal retention of title provisions in connection with the
sale of goods;
"Equipment" means all fixed and loose plant and machinery, equipment,
fixtures and fittings, furniture and motor vehicles owned by the
Vendor and used exclusively in the Business at
3
Completion being the equipment listed in the equipment list in the
agreed form;
"Excluded Assets" means the assets listed in Schedule 2;
"Excluded Liabilities" means:
(a) the Prepayment Liabilities;
(b) the Accrued Liabilities; and
(c) the Deferred Income Liability
"Excluded Products" means the software products known as Global
Clinical System (GCS), Genisyst 4NT and FundHolder and shall include
all derivations and versions thereof and all source code in relation
thereto;
"Goodwill" means the goodwill and trade of the Business together with
the right (so far as the Vendor can grant the same) for the Purchaser
to represent itself as carrying on the Business in succession to the
Vendor after Completion, but excluding the Business Names and any
right to use the same;
"Goodwill Assignment" means the deed of assignment of goodwill, in the
agreed form, to be entered into on Completion;
"Group" means; in relation to any company, that company and any
company which is a holding company or subsidiary of that company, and
any subsidiary of any such holding company;
"holding company" has the meaning ascribed to it by sections 736 and
736A CA 1985;
"Independent Accountant" means an independent chartered accountant of
at least 10 years standing to be nominated (in default of agreement
between the parties) by the President for the time being of the
Institute of Chartered Accountants m England and Wales at the request
of either party. The Independent Accountant shall act as an expert and
not as an arbitrator and his decision in relation to any dispute shall
be final and binding on the parties in the absence of manifest error;
"the Lease" means a new lease in agreed form to be granted by KGT
Investment Company Limited to the Purchaser in respect of the Property
(excluding ▇▇▇▇ ▇ of the Property);
"Leasing Agreements" means the benefit (subject to the burden) of the
leasing, conditional sale, deferred purchase, credit sale, hire
purchase and like agreements under which the Vendor holds equipment or
other items used exclusively in, or otherwise relating exclusively to,
the Business at the Completion Date which are listed in Schedule 8 and
the leases detailed in the Vehicles List;
"the Licence" means an exclusive perpetual royalty free licence for
the United Kingdom only in agreed form to be granted on Completion by
the Vendor and LK Global Healthcare Systems (UK) Limited to the
Purchaser in respect of the Excluded Products including software
embedded therein
4
provided under Third Party Licences;
"London Stock Exchange" means London Stock Exchange Limited;
"the Management Accounts" means the unaudited internal management
accounts of the Vendor in respect of the Business for the period
commencing on I* January 2000 and ending on 31" July 2000;
"Nominated Account" means the bank account numbered ▇▇▇▇▇▇▇▇ in the
name of the Vendor's Solicitors at the Hanover Square branch of
Barclays Bank PLC at ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, Wl, sort code
20-36-47;
"Prepayments" means the prepayments and deposits made to the Vendor in
relation to the Business prior to the Completion Date, the benefit of
which shall remain with the Vendor and the responsibility and
liability for the carrying out of services or supplying goods in
relation to the matters in respect of which the Prepayments and
deposits have been made shall pass to the Purchaser, such
responsibility and liability being hereinafter referred to as the
"Prepayment Liabilities";
"Property" means the leasehold premises of the Vendor details of which
are set out in Schedule 6;
"Relevant Claim" means any claim by the Purchaser for a breach of any
of the Warranties;
"Retained Records" means:
(a) all such Business Records as are referred to in section
49(l)(b) VATA and arc kept by the Vendor in relation to the
Business;
(b) Statutory Records; and
(c) all other books and records of the Vendor not relating
exclusively to the Business;
"Sale" means the sale and purchase referred to in clause 2.1;
"Statutory Records" means all Records in relation to the Business as
are required by any enactment to be kept by the Vendor and retamed in
its possession;
"Stock" means all items of stock of computer equipment materials and
components held for re-sale or as spares by the Vendor as at
Completion for the purposes of the Business details of which are
contained in the Disclosure Letter,
"Subsidiary" means a subsidiary (as defined by sections 736 and 736A
CA 1985) or a subsidiary undertaking (as defined by section 258 CA
1985);
"Third Party Licences" means the licences obtained from third parties
in respect of software used
5
in connection with the Business including third party software
incorporated into the Excluded Products;
"Taxation" means any liability to any form of taxation, whenever
created or imposed and whether of the United Kingdom or elsewhere (and
without limitation includes income tax, PAYE, corporation tax, advance
corporation tax, capital gains tax, capital transfer tax, insurance
premium tax, stamp duty, stamp duty reserve tax, landfill tax, VAT,
withholding tax, rates. Customs and Excise duties. National Insurance
contributions. Social Security and other similar liabilities or
contributions) and all charges, surcharges, fines, interest and/or
penalties related to or arising in respect of them but excluding stamp
duty payable in relation to this Agreement or the documents to be
executed by the Vendor pursuant hereto, the responsibility for the
payment or discharge of which shall be that of the Purchaser,
"Transfer Regulations" means the Transfer of Undertakings (Protection
of Employment) Regulations 1981 as amended by the Trade Union Reform
and Employment Rights ▇▇▇ ▇▇▇▇ and the Collective Redundancies and
Transfer of Undertakings (Protection of Employment) (Amendment)
Regulations 1995;
"VAT" means Value Added Tax as provided in VATA;
"VATA" means the Value Added Tax ▇▇▇ ▇▇▇▇;
"Vehicles List" means the list of vehicles used by employees of the
Business, in the agreed form;
"Vendor's Solicitors" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co of ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇,▇▇▇▇▇▇;
"Warranties" means the warranties referred to in clause 12.1 and set
out in Schedule 3 and the term Warranty shall be construed
accordingly.
1.2 In this Agreement, unless the context otherwise requires:
(a) a document expressed to be "in the agreed form" means a document in a
form which has been agreed by the Vendor and the Purchaser (or in the
case of the Lease by the Landlord mentioned therein) contemporaneously
with or before the execution of this Agreement and which has, for the
purposes of identification, been signed or initialed by them or on
their behalf;
(b) references to a. clause or schedule are to a clause of, or a schedule
to, this Agreement; references to this Agreement include its schedules
and references in a schedule or part or section of a schedule to a
paragraph are to a paragraph of that schedule or a paragraph in a part
or section of that schedule;
(c) references to this Agreement or any other document or to any specified
provision of this Agreement or any other document are to this
Agreement, that document or that provision as in force for the time
being and as altered from time to time in accordance with the terms
6
of this Agreement or, as the case may be, with the agreement of the
relevant parties;
(d) words importing the singular include the plural and vice versa; words
importing a gender include every gender and references to persons
include corporations;
(e) the contents table and the descriptive headings to clauses, schedules
and paragraphs are inserted for convenience only, have no legal effect
and shall be ignored in the interpretation of this Agreement; and
(f) the words and phrases "other", "including" and "in particular" shall
not limit the generality of any preceding words or be construed as
being limited to the same class as the preceding words where a wider
construction is possible.
1.3 In this Agreement, unless the context otherwise requires, references to any
enactment shall be construed as including a reference to:
(a) any enactment which that enactment has directly or indirectly replaced
(whether with or without modification); and
(b) that enactment as re-enacted, replaced or modified from time to time,
whether before, on or after the date of this Agreement;
PROVIDED ALWAYS that any liability of the Vendor hereunder shall not
thereby be extended or increased.
1.4 Where, under any provision of this Agreement, any party shall be allowed by
another to inspect any document or record, it or its authorised
representatives and agents (including its professional advisers) shall be
permitted at its own expense to inspect and take or make copies of or
extracts from that document or record (whether by photographic means or
otherwise) and, for such purposes, to have reasonable access to the
premises of that other where such document or record is located at all
reasonable times during normal office hours on such prior notice to the
other as may be prescribed in that provision or, if no period of notice is
so prescribed, on such prior notice as is reasonable in the circumstances.
2. Agreement for Sale
2.1 Subject to the terms and conditions of this Agreement, the Vendor shall
sell (or procure the sale thereof) and the Purchaser shall purchase the
Assets and the Business as a going concern for the consideration specified
in clause?.
2.2 The Excluded Assets are excluded from the Sale.
2.3 The Vendor shall sell (or procure the sale of) the Assets (subject to
clause 4.2 in the case of the Continuing Contracts) free from all
Encumbrances and with full title guarantee.
2.4 The Business and the Assets shall be deemed to be sold with effect from the
Completion Date and
7
risk in respect of the Business and the Assets shall pass to the Purchaser
on the Completion Date.
2.5 Title to and beneficial ownership of those of the Assets which are capable
of transfer by delivery shall pass on their delivery and such delivery
shall be deemed to take place on possession of them being given to the
Purchaser by the Vendor on the Completion Date in accordance with clause
8.1(a)(ii). Title to and beneficial ownership of all other Assets shall
pass on the Completion Date.
2.6 The Sale is in respect of all of the Assets and the Vendor shall not be
required to sell and the Purchaser shall not be required to purchase part
or some only of them.
3. Debtors and Creditors
3.1 The Vendor and the Purchaser agree that the Debtors shall be assigned to
the Purchaser on and with effect from the Completion Date in consideration
of the sum referred to as the consideration therefor in column (2) of
Schedule 1.
3.2 If the Vendor receives any payment in respect of any of the Debtors after
Completion, the Vendor shall notify the Purchaser of the amount so received
and shall account to the Purchaser for any such amounts on a monthly basis.
3.3 With effect from the Completion Date, the Vendor shall pay or discharge all
of the Creditors in accordance with the Vendors normal policy and the
Purchaser shall be responsible for paying or discharging the Accrued
Liabilities.
3.4 In the event that the Vendor shall, after the Completion Date, pay or
discharge any of the Accrued Liabilities due to be paid or discharged by
the Purchaser under clause 3.3 (whether in whole or in part and whether
directly or by virtue of any right of return, set-off or counterclaim
exercised or claimed by any person in respect of sums otherwise payable to
the Vendor or any member of its Group or otherwise howsoever), the
Purchaser shall forthwith upon demand by the Vendor, pay or procure the
payment to the Vendor in cleared funds of a sum equal to the amount of the
Accrued Liabilities so paid or discharged.
3.5 The Purchaser shall indemnify and keep indemnified the Vendor against any
liability arising from any claims, actions or proceedings brought against,
or costs and expenses incurred by the Vendor in relation to the Accrued
Liabilities due to be paid or discharged by the Purchaser under clause 3.3
or otherwise arising by virtue of any breach by the Purchaser of its
obligations under clauses 3.3 or 3.4.
3.6 For the avoidance of doubt the benefit of the Deferred Income and the
Prepayments shall remain with the Vendor.
4. Continuing Contracts
4.1 Subject to clause 4.2, this Agreement shall operate as an assignment, with
effect from the Completion Date, of the benefit and burden of the
Continuing Contracts, by the Vendor to the Purchaser.
8
4.2 If any Continuing Contract contains a prohibition on its assignment or
requires the consent of any other party or the satisfaction of any
requirement or condition for its assignment or novation, this Agreement
shall not operate so .as to transfer the benefit of any such Continuing
Contract or any rights thereunder and in that event:
(a) each of the Vendor and the Purchaser shall, if the other reasonably
requires and with the co-operation of the other, use its reasonable
endeavors at its own cost to obtain the relevant consent or to satisfy
any such requirement or condition as soon as reasonably practicable
after the Completion Date and shall enter into and shall (subject to
obtaining the relevant consent or satisfying the requirement or
condition as aforesaid) use its reasonable endeavors to procure that
any other party to such Continuing Contract shall enter into any
assignment or novation or similar agreements regarding that Continuing
Contract in terms reasonably satisfactory to each of the parties in
order effectively to substitute the Purchaser with effect from the
Completion Date in place of the Vendor as a party to any such
Continuing Contract;
(b) until any Continuing Contract is assigned fo or assumed by the
Purchaser or in the event that any Continuing Contract is incapable of
being assigned (under clause 4.2(c)):
(i) the Vendor shall (unless prohibited by the relevant Continuing
Contract) hold that Continuing Contract or its relevant interest
therein from the period after the Completion Date on trust for
the Purchaser absolutely and the Purchaser shall (unless
prohibited by the relevant Continuing Contract), without cost to
the Vendor, perform all the obligations and exercise all the
rights of the Vendor under it as subcontractor; and
(ii) the Purchaser shall, subject to the Purchaser obtaining the
benefit of such Continuing Contract or such interest therein
under clause 4.2(b)(I) above, reimburse to the Vendor any
reasonable costs and expenses or any payment required to be made
by the Vendor in each case arising as a result of complying with
clause 4.2(b)(I) in respect of the period after the Completion
Date;
(c) if (the Vendor and Purchaser having used their respective reasonable
endeavors in this regard) the consent of any third party to the
assignment of any Continuing Contract is not obtained or an
appropriate novation agreement is not executed within twelve months
after the Completion Date (or such longer period as the parties may
agree) in respect of any Continuing Contract, and the Vendor has been
unable to give the Purchaser or to provide that the Purchaser
continues to have the benefit of such Continuing Contract before the
expiry of the said period of twelve months, whether in accordance with
this clause 4.2 or otherwise, the Vendor and the Purchaser will make
such other arrangements between themselves as may be permissible to
implement so far as possible the effect of the transfer of the benefit
and burden of such Continuing Contract to the Purchaser, but if such
other arrangements arc unable to be implemented, that Continuing
Contract shall be deemed to have been excluded from the Sale and the
Purchaser shall indemnify and keep the Vendor fully indemnified
against all costs, demands, expenses and other liabilities, in excess
of any benefit (if any) accruing to the Vendor, arising out of the
Vendor either:
9
(i) terminating such Continuing Contract, whether or not in
accordance with its terms; or
(ii) the Vendor continuing to discharge its obligations under such
Continuing Contract until its expiry whether through effluxion of
time or otherwise.
4.3 As from the Completion Date, the Purchaser shall assume and discharge all
of the liabilities and obligations of the Vendor under the Continuing
Contracts (including any Continuing Contract referred to in clause 4.2) and
hereby undertakes to indemnify the Vendor and keep the Vendor indemnified
in respect of:
(a) any and all obligations and liabilities of the Vendor so assumed by
the Purchaser in relation to the Continuing Contracts;
(b) (for the avoidance of doubt) any obligation, cost, expense or other
liability whatsoever (except as aforesaid) arising from any failure by
the Purchaser duly to perform the Continuing Contracts in accordance
with their terms after Completion, or arising from the termination of
any Continuing Contract after Completion; and
(c) any and all liabilities and obligations arising from the carrying on
of the Business after Completion. .
4.4 For the avoidance of doubt, no warranty is given by the Vendor as to
whether any Continuing Contract is capable of being assigned or novated,
and, without prejudice to any other provision of this Agreement, if any
Continuing Contract shall not be capable of being assigned or novated, this
shall not be a ground or grounds for the Purchaser rescinding or avoiding
any or all of the provisions hereof.
5. Company cars
5.1 Subject to the consent where necessary of the other parties the Purchaser
shall assume the obligations of and become entitled to the benefits of the
Vendor under the Leasing Agreements relating to the Vehicles With effect
from Completion.
5.2 The risk in or in respect of the Vehicles shall pass to the Purchaser on
Completion
5.3 The Vendor and the Purchaser shall do all things reasonably required of
them to give effect to the arrangements described in this clause,
including, if necessary, entering into assignments and re-assignments in
relation to the contracts of hire or hire-purchase applicable to the
relevant Vehicles.
6. Employees
6.1 The parties hereto acknowledge and agree:
(a) that the Transfer Regulations apply to the Sale and that the transfer
of the Business effected
10
by the Sale is a "relevant transfer" within the meaning of those
regulations; and
(b) that, in accordance with the Transfer Regulations, regulations 5 and 7
of the Transfer Regulations shall apply and:
(i) the contracts of employment between the Vendor and the Employees
(save insofar as such contracts relate to any occupational
pension scheme) will have effect after the Completion Date (which
is agreed to be the time of the relevant transfer) as if
originally made between the Purchaser and each of the Employees;
and
(ii) on Completion, all of the Vendor's rights, powers, duties and
liabilities under or in connection with each such contract will
be transferred to the Purchaser; and
(iii)anything done before Completion by or in relation to the Vendor
in respect of each such contract or any Employee will be deemed
to have been done by or in relation to the Purchaser.
6.2
(a) The Vendor hereby undertakes to indemnify the Purchaser and to keep
the Purchaser indemnified from and against all losses, costs, claims,
expenses, penalties, demands and liabilities arising out of any act or
omission of the Vendor in connection with the employment of the
Employees before the Completion Date but excluding for the avoidance
of doubt any failure to comply with regulation 10 of the Transfer
Regulations and any claim arising directly or indirectly from any act
or omission by the Purchaser in relation to the Employees prior to the
Completion Date and subject always to the
provisionsofclause6.2(c)below.
(b) The Purchaser hereby undertakes to indemnify the Vendor and to keep
the Vendor indemnified from and against all losses, costs, claims,
expenses, penalties, demands and all other liabilities arising out of
or in connection with the employment of the dismissal or constructive
dismissal of, and any act or omission in relation to, any of the
Employees by the Purchaser in respect of the period after the
Completion Date in relation to any of the Employees, including, but
not limited to any such liability which arises because an Employee's
period of continuous employment with the Purchaser is deemed to
include his previous employment with the Vendor and any previous
employer, and any claims by an Employee in consequence of this
Agreement having been entered into.
(c) The indemnity referred to in clause 6.2(b) above shall include,
without limitation, an obligation on the Purchaser to indemnify the
Vendor against all liabilities arising out of the failure to comply
with regulation 10 of the Transfer Regulations as it applies to any
transfers in consequence of this Agreement having been entered into
and in particular any failure to consult with any of the Employees
pursuant to the Transfer Regulations.
6.3 The Purchaser confirms to the Vendor that it has prior to the date hereof
provided the Vendor with all information required pursuant to the Transfer
Regulations to be so provided to enable the
11
Vendor to comply with its obligations thereunder, and the Purchaser further
confirms and undertakes to the Vendor that all such information is complete
and accurate.
6.4 In the event that any of the Employees or other person brings a claim
against the Vendor or the Purchaser arising out of or in connection with
this Agreement and/or the subject matter hereof, the Vendor and the
Purchaser shall at their own respective expense give to the other as soon
as practicable after any request therefor all cooperation, assistance and
information which may be reasonably relevant to the claim.
7. Consideration
7.1 The consideration for the sale of the Business and the Assets shall be the
payment by the Purchaser to the Vendor on Completion of the sum of
(pound)2,250,000, together with the assumption by the Purchaser of the
Accrued Liabilities (in accordance with clauses 3.3,3.4 and 3.5 above).
7.2 The consideration referred to in sub-clause 7.1 is calculated on the basis
that as at the 31" July 2000 the Net Liabilities figure shown in the
Statement of Net Assets to be Acquired by Torex Health Limited (the
Statement) contained in the Management Accounts is no greater than
u200,000. As a separate warranty to the Warranties the Vendor warrants that
the values attributed in the Statement represent true values assessed in
accordance with generally accepted accounting principles within the United
Kingdom.
8. Completion
8.1 Completion shall take place at the Property or such other place as the
parties may agree on the Completion Date when all (but not part only,
unless the parties shall so agree) of the following business shall be
transacted:
(a) The Vendor shall:
(i) deliver to the Purchaser evidence reasonably satisfactory to the
Purchaser that the Assets have been released from any
Encumbrances;
(ii) give physical possession to the Purchaser at their normal
locations of such of the Assets as are transferable by delivery;
(iii)make available to the Purchaser at their normal locations all
documents of title or other records establishing title to the
Assets (if any);
(iv) make available to the Purchaser at their normal locations the
originals of all documents in the Vendor's possession,
constituting or of employment;
(v) make available to the Purchaser at their normal location the
Business Records;
(vi) deliver to the Purchaser duly executed originals of the Goodwill
Assignment, the Debtors Assignment and the Licence (including the
source codes and copies of all
12
relevant technical and other documents in respect of the Excluded
Products as set out in the Schedule to the Licence); and
(vii)deliver to the Purchaser evidence of title to the Assets
including duly executed deed of assignment from LK Global
Healthcare Systems Limited to the Vendor pursuant to the
reorganization of the Vendor's group completed on 31 December
1999 together with a copy of an executed Statutory Declaration,
and confirmation that such declaration has been lodged at the
appropriate Stamp Office for adjudication.
(b) The Lease will be completed
(c) The Purchaser shall pay the sum of(pound)2,250,000 by telegraphic
transfer for same day value to the Nominated Account
(d) The Purchaser shall deliver to the Vendor duly executed counterparts
of the Goodwill Assignment, the Debtors Assignment and the Licence.
9. Post-Completion matters
9.1 Forthwith following Completion:
(a) the Vendor shall wholly discontinue carrying on the Business in the
United Kingdom (it being understood that the Vendor and/or any member
of its group shall be at liberty to carry on the Business elsewhere);
and
(b) the Purchaser shall, at its expense, send to the Employees the
suppliers and customers of the Business letters in a form agreed with
the Vendor (provided that such letters do not contain any comments
prejudicial or harmful to the Business or reputation of the Vendor)
informing them of the transfer of the Business.
9.2 For a period of twelve months following the Completion Date, the Vendor
shall, as soon as reasonably practicable following receipt, forward to the
Purchaser any notices, correspondence, information or enquiries which
relate to the Business in the United Kingdom or the Assets, save for any
such items which relate to accounting or taxation matters.
10. Records
10.1 The Vendor shall for a period of 6 years after the Completion Date, have
access to such of the Business Records as may reasonably be required by it
or by its professional advisers for accounting purposes, audits, the
preparation of taxation returns and otherwise in connection with Taxation.
The Purchaser shall retain all of the Business Records for not less than 6
years after the Completion Date, after which the Purchaser may dispose of
them as it thinks fit. The Purchaser shall give to the Vendor such
assistance as the Vendor shall reasonably require for the purpose of
preparing the annual accounts of the Vendor for the accounting reference
period during which the Completion Date occurs.
13
10.2 The Purchaser shall not destroy such of the Business Records as are
required to be kept pursuant to statute until the expiry of the period
prescribed by statute.
10.3 The Purchaser shall for a period of 6 years after the Completion Date have
access to such of the Retained Records as may reasonably be required by the
Purchaser for the operation of the Business, but to the extent only that
such Retained Records relate exclusively to the Business as carried on by
the Vendor prior to the Completion Date. The Vendor shall retain the
Retained Records for not less than 6 years after the Completion Date. The
Vendor shall give to the Purchaser such assistance as the Purchaser shall
reasonably require for the purpose of preparing the opening balance sheet
of the Purchaser for the accounting reference period during which the
Completion Date occurs.
11. Value Added Tax
11.1 All payments to be made pursuant to this Agreement shall (save where
otherwise specifically stated) be taken to be exclusive of VAT (if
applicable) and any VAT chargeable in respect of the matters giving rise to
such payments shall be added to the amount of, and paid in addition to,
them.
11.2 The Vendor and the Purchaser:
(a) acknowledge and agree that the Sale represents the transfer of a
business as a going concern;
(b) consider that section 49(1) VATA and Article 5 of the Value Added Tax
(Special Provisions) Order 1995 apply, and intend that they should
apply, to the Sale; and (c) shall use all reasonable endeavors to
secure that, in consequence, the Sale is treated as neither a supply
of goods nor a supply of services for the purposes of VAT.
11.3 Accordingly, the Purchaser warrants to the Vendor that:
(a) the Purchaser intends, with effect from Completion, to use the Assets
in carrying on (whether or not as part of its existing business) the
same kind of business as the Business; and
(b) the Purchaser is, at the date hereof, a taxable person for VAT
purposes and duly registered for such purposes under VATA.
11.4 If, notwithstanding clause 11.2 and clause 11.3, Customs rule that the Sale
(or any part of it) does not fall within section 49(1) VATA and Article 5
of the Value Added Tax (Special Provisions) Order 1995 and that VAT is
chargeable on the Sale (or that part of it), the Purchaser shall, subject
to production and delivery by the Vendor to the Purchaser of an appropriate
VAT invoice, within 10 business days following such delivery, pay to the
Vendor the amount of such VAT together with any interest, fine or penalty
levied by Customs, by transferring such sum to the Nominated Account.
11.5 All VAT payable in respect of goods and services supplied or deemed to be
supplied by the Vendor
14
in connection with the Business prior to the Completion Date shall be paid
to Customs by the Vendor, and the Vendor shall be entitled to receive and
to retain for its own benefit all reimbursement or credit from Customs for
VAT borne by the Vendor on goods and services supplied to the Vendor prior
to the Completion Date and any payments received in respect of VAT overpaid
to Customs prior thereto.
12. Warranties
12.1 Subject to clause 12.2, in consideration of the Purchaser entering into
this Agreement, the Vendor hereby warrants to the Purchaser that as at the
date hereof the Warranties contained in Schedule 3 are true and accurate in
all respects. The Vendor undertakes that it will not, between the date
hereof and Completion, voluntarily do or omit to do anything which will
result in any of the Warranties being breached prior to Completion and will
notify the Purchaser immediately if any circumstances arise which have
caused or are likely to cause the Warranties to be breached prior to
Completion.
12.2 Each of the statements in Schedules is qualified by, and is subject to,
those matters fairly disclosed in the Disclosure Letter.
12.3 The Warranties shall not in any respect be extinguished by Completion.
12.4 The Purchaser shall have no claim under this Agreement for damages or
compensation in respect of any event, matter or circumstance constituting
or giving rise to a Relevant Claim or other breach by the Vendor hereunder
to the extent that the Purchaser had actual knowledge prior to .the date of
this Agreement. The Purchaser further confirms to the. Vendor that save as
may have been disclosed to the Vendor in writing at the date of this
Agreement it is not aware of any breach of any of the Warranties.
12.5 A breach by the Vendor of any of the terms of this Agreement (including the
Warranties) shall give rise only to an action by the Purchaser for damages
and costs and shall not entitle the Purchaser to rescind or repudiate this
Agreement.
12.6 The provisions of Schedule 4 shall operate so as to limit, qualify or
exclude the liability of the Vendor in connection with any Relevant Claim.
12.7 Where any Warranty is qualified by the expression "so far as the Vendor is
aware" or any similar expression, the awareness referred to shall mean the
actual awareness of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ and such
qualification shall also assume that the said individuals have made careful
enquiry, in the circumstances of this transaction, as to the facts and
circumstances relevant to such statement to ensure that such Warranties are
true and accurate.
15
13. Indemnities
13.1 The Vendor undertakes to indemnify the Purchaser and keep the Purchaser
indemnified in respect of claims by any of the Employees against the
Purchaser and in respect of liabilities actually incurred by the Purchaser
in relation to the non-provision by the Vendor to the Employees of benefits
to which they were contractually entitled up to the Completion Date
including without limitation membership of the income protection scheme,
private health insurance and the group life assurance scheme; and
13.2 The Vendor undertakes to the Purchaser to procure the AremisSoft
Corporation Stock Option Plan Rules to be changed in such manner as shall
ensure that the rights of the employees thereunder shall be unaffected by
the transfer of the Business to the Purchaser, to the extent that they
shall have the same rights thereunder as though they had remained as
employees of the Vendor including the right to exercise any vested options
for a period of at least 3 months from the date of termination of contracts
of employment and the Vendor shall indemnify the Purchaser against any
losses, costs and other liabilities arising out of any breach of this
undertaking save in respect of any such losses, costs and liabilities
arising out of any such employees who have been dismissed or have deemed to
have been dismissed by the Purchaser claiming damages on the basis that the
benefit of the right to participate in unvested options has been lost by
virtue of such dismissal.
13.3 If the Purchaser becomes aware of any matter which constitutes or would or
might give rise to a claim under clauses 13.1 or 13.2:
(a) the Purchaser shall as soon as practicable give notice to the Vendor
of die matter and shall consult with the Vendor with respect to the
matter, and will promptly forward to the Vendor all communications and
correspondence in respect thereof;
(b) the Purchaser shall provide to the Vendor and its advisers reasonable
access to premises and personnel and to relevant documents and records
within the power or control of the Purchaser for the purposes of
investigating the matter and enabling the Vendor to take the action
referred to in sub-clause 13.3(d)(I);
(c) the Vendor (at its cost) may take copies of the documents or records
referred to in sub clause 13.3(b);
(d) the Purchaser shall;
(i) take any action and institute any proceedings and give any
information and assistance, as the Vendor may reasonably request
to dispute, resist, appeal, compromise, defend remedy or mitigate
the matter or enforce against a person the rights of the
Purchaser in relation to the matter;
(ii) in connection with proceedings related to the matter use advisers
nominated by the Vendor and, if the Vendor .requests allow and
delegate to the Vendor the full conduct of the proceedings.
16
And in each case on the basis that (I) the Vendor shall indemnify
the Purchaser for all reasonable costs incurred as a result of a
request or nomination of the Vendor and (ii) the Purchaser may
refuse to comply with the provisions of this sub-clause if it can
reasonably demonstrate that to take the actions in question would
have a materially detrimental effect on the operation of the
Business.
13.4 The Purchaser shall not admit liability in respect of, or compromise or
settle, the matter without the prior written consent of the Vendor or
without a declaration of the appropriate court permitting such admission,
compromise or settlement.
13.5 Nothing in this clause 13 restricts or limits the Purchaser's general
obligation at law to mitigate any loss or damage which it may incur in
consequence of a matter giving rise to a claim under this clause 13.
13.6 The provisions of this clause 13 shall not be affected by the limitation of
liability provisions of schedule 4 any other matters referred to in this
Agreement which would limit or avoid liability on the part of the Vendor,
save that the total liability of the Vendor under sub-clauses 13.1 and 13.2
shall not exceed in aggregate (pound)1.5m.
14. Apportionments
14.1 All periodical charges and other outgoings of the Business (including but
not limited to rates, gas, electricity, water and telephone charges and all
liabilities in relation to salaries, national insurance and pension
contributions and other payments to or in respect of the Employees but
excluding the Deferred Income, the Prepayments and the Accrued Liabilities
which will be dealt with as herein specifically provided) shall be
apportioned so that such part of the relevant charges and outgoings
relating to the Assets or the Employees and which is attributable to or
arises by reference to any period ending on or before the Completion Date
shall be borne by the Vendor, and such part of the relevant charges and
outgoings relating to the Assets or the Employees and which is attributable
to or arises by reference to the period commencing immediately following
the Completion Date shall be borne by the Purchaser. . The Parties shall
account in respect of apportionments pursuant to this clause from time to
time as appropriate following Completion.
14.2 If any dispute or disagreement arises between the Vendor and the Purchaser
in relation to the provisions of this clause 14 and/or any apportionments
to be made hereunder, which cannot be resolved between them within 7 days
of the same arising.
(hereinafter referred to as a "Dispute"), the following provisions shall
apply:
(i) either the Vendor or the Purchaser may require that the Dispute
be referred to the decision of the Independent Accountant;
(ii) all of the costs of the Independent Accountant shall be shared
equally by the Vendor and the Purchaser unless the Independent
Accountant decides otherwise;
(iii)the Vendor and the Purchaser shall each procure that the
Independent Accountant
17
is afforded all facilities and access to personnel, premises,
papers, accounts, records and such other documents as may
reasonably be required by him in order to reach his decision;
(iv) the Vendor and the Purchaser and/or their professional advisers
shall each be entitled to make one or more written submission to
the Independent Accountant in relation to any Dispute referred to
him, provided that a copy of any such submission shall be
supplied simultaneously to the other party; and
(v) the Vendor and the Purchaser shall each use all reasonable
endeavors to procure that the Independent Accountant issues his
determination within 30 business days of the initial reference to
him under this clause 13 and shall accordingly cooperate with the
Independent Accountant and with each other in agreeing and
complying with any procedural requirements and any timetable
suggested by the Independent Accountant or, if reasonable, by the
other party.
15. Restrictive covenants
15.1 The Vendor undertakes to and covenants with the Purchaser that it will not,
and that it will procure that no member of the Vendor's Group will, for a
period of 2 years after the date hereof, directly or indirectly:
(a) In the United Kingdom approach, canvass or solicit, in competition
with the Business, the custom of any person who, at any time during
the period of 24 months preceding the Completion Date, has been a
customer of the Vendor in connection with the Business;
(b) approach, canvass or solicit the employment of any of the Employees
save by means of advertisements placed in newspapers;
(c) be engaged, concerned or interested in any business which competes
with the Business as carried on at the Completion Date in the United
Kingdom or in the Republic of Ireland or in the Netherlands;
(d) disclose to any person any confidential information concerning the
Business save for confidential information which relates to the
Business and to other businesses carried on by the Vendor or another
member of the Vendors Group;
(e) in the course of carrying on any trade or business, claim, represent
or otherwise indicate ongoing ownership or management of the Business
or any continuing association therewith;
(f) knowingly do or say anything which would discredit the name or
goodwill of the Purchaser in relation to the Business.
15.2 The Vendor agrees with the Purchaser that the restrictions contained in
this clause arc reasonable and necessary for the protection of the value of
the Assets and the Business and do not work
18
harshly on it.
15.3 The duration extent and application of each of the restrictions contained
in clause 15.1 above are considered to be reasonable by the parties but in
the event that any such restriction shall be found to be void but would be
valid if some part thereof were deleted or the period or area of
application reduced such restriction shall apply with such deletion as may
be necessary to make it valid and effective and shall be enforced to the
extent permitted by law.
15.4 The Purchaser hereby undertakes to the Vendor that as from Completion it
shall not use the names "AremisSoft" or "LK Global" for the carrying on of
the Business and shall not hold the Business out as being carried on by the
Vendor or by a member of the Vendor's Group after Completion.
16. Continuing effects of this Agreement
16.1 Save as expressly otherwise provided, all provisions of this Agreement
(including the Warranties) shall, so far as they are capable of being
performed or observed, continue in full force and effect after and
notwithstanding Completion except in respect of those matters then already
performed and Completion shall not constitute a waiver of any of the rights
of the Vendor or the Purchaser in relation to this Agreement.
17. Further assurance
17.1 Subject to the provisions of Schedule 6 relating to the Property, the
Vendor shall take all reasonably necessary steps to ensure that the
Purchaser obtains the full benefit of the Business and Assets and shall
execute such documents and take such other steps as the Purchaser may
reasonably require to carry out the terms of this Agreement and fully and
effectively to vest in the Purchaser all its interest and rights in the
Assets and to assure to the Purchaser the rights hereby agreed to be
granted.
17.2 The Vendor shall if so requested by the Purchaser assign to the Purchaser
such manufacturer's guarantees and warranties relating to the Equipment or
the Stock as may be in force at Completion insofar as the same are capable
of assignment and the benefit of all other claims against third parties
relating to any of the Assets (including, without limitation, any claim for
breach of warranty or representation).
18. Announcements and Confidentiality
18.1 Save as required by the London Stock Exchange or NASDAQ or by any relevant
national or supra-national regulatory, governmental or quasi-governmental
authority, all disclosures and announcements by or on behalf of any of the
parties and relating to the Sale shall be in terms to be agreed between the
Vendor and Purchaser in advance.
18.2 Subject to Clause 18.3 neither party shall without the consent of the other
communicate publish or otherwise disseminate details or particulars
(whether in whole or in part) of the transaction effected or contemplated
hereunder save as may be required:
19
(a) by law or any statutory regulation or order having the force of law or
any rule or directive of any stock exchange; or
(b) for the purpose of any proceedings in court or any tribunal of fact or
law; or
(c) by order requestor regulation or any person or body or authority with
whose order or requests the party in question is obliged to comply; or
(d) by the auditors of the party in question;
(e) for the purpose of preparing statutory accounts.
PROVIDED THAT any such information disclosed pursuant to the above
paragraphs shall be disclosed after consultation insofar as practicable
with the other party.
18.3 Nothing contained in Clause 18.2 shall prevent either of the parties from
disclosing details of this Agreement to their respective professional
advisers or bankers on a confidential basis or disclosing in any manner
details which are in the public domain other than as a consequence of a
breach by the Vendor or the Purchaser of its obligations under this
Agreement
19. Releases, waivers, etc
19.1 Any party may, in its discretion, in whole or in part release, compound or
compromise, or waive its rights or grant time or indulgence in respect of
any liability to it under this Agreement.
19.2 Subject to clause 19.3, neither the single or partial exercise or temporary
or partial waiver by either party of any right, nor the failure by either
party to exercise in whole or in part any right or to insist on the strict
performance of any provision of this Agreement, nor the discontinuance,
abandonment or adverse determination of any proceedings taken by either
party to enforce any right or any such provision shall (except for the
period or to the extent covered by any such temporary or partial waiver)
operate as a waiver of, or preclude or restrict any exercise or enforcement
or (as the case may be) further or other exercise or enforcement by that
party of, that or any other right or provision.
19.3 Clause 19-2 is without prejudice to clause 12.3 and all references in
clause 19.2:
(a) to any right, shall include any power, right or remedy conferred by
this Agreement on, or provided by law or otherwise available to, the
parties; and
(b) to any failure to do something, shall include any delay in doing it.
19.4 The giving by a party of any consent to any act which by the terms of this
Agreement requires such consent shall not prejudice the right of that party
to withhold or give consent to the doing of any similar act.
20. Notices
20
20.1 Except as otherwise provided in this Agreement, every notice under this
Agreement shall be in writing and shall be deemed to be duly given if it
(or the envelope containing it) identifies the party to whom it is intended
to be given as the addressee and:
(a) it is delivered by being handed personally to any one of its directors
or its secretary; or
(b) it is delivered by being left in a letter box or other appropriate
place for the receipt of letters at the addressee's registered office
for the time being; or
(c) the envelope containing the notice is properly addressed to the
addressee at its registered office and duly posted by the recorded
delivery service,
and, in proving the giving or service of such notice, it shall be
conclusive evidence that the notice was duly given within the meaning of
this clause 20.
20.2 A notice sent by post (or the envelope containing it) shall not be deemed
to be duly posted for the purposes of clause 20.1 (c) unless it is put into
the post properly stamped or with all postal or other charges in respect of
it otherwise prepaid.
20.3 Any notice duly given within the meaning of clause 20.1 shall be deemed to
have been both given and received:
(a) if it is delivered in accordance with clause 20.1(a) or 20.1(b), on
such delivery;
(b) if it is duly posted in accordance with clause 20.1 (c) on the second
business day after the day of posting.
20.4 For the purposes of this clause 209, "notice" shall include any request,
demand, instructions or other document
20.5 Copies of all notices to the Vendor shall, at the same time, be sent by the
Purchaser to the Vendor's Solicitors, for the attention of ▇ ▇ ▇▇▇▇▇▇▇.
21. Entire agreement
21.1 This Agreement (together with all documents which are required by its
terras to be entered into by the parties or any of them and all other
documents which are in the agreed form and are entered into by the parties
or any of them in connection with this Agreement) sets out the entire
agreement and understanding between the parties or any of them in
connection with the Business and the sale and purchase and other
transactions described in it
21.2 Each party acknowledges that, in agreeing to enter into this Agreement, it
has not relied on any representations, warranties, covenants, indemnities
or undertakings of any other party, or any terms or conditions (including
any implied by statute or common law), except as expressly stated or
referred to in this Agreement
21
22. Alterations
22.1 No purported alteration of this Agreement (or of any document in the agreed
form) shall be effective unless it is in writing, refers specifically to
this Agreement and is duly executed by all parties hereto.
23. Counterparts
23.1 This Agreement may be entered into in the form of two counterparts each
executed by one or more of the parties and, provided that all parties so
enter into the Agreement, each of the executed counterparts, when duly
exchanged or delivered, shall be deemed to be an original, but, taken
together, they shall constitute one instrument
24. Costs
24.1 Each party shall be responsible for and shall bear and pay its respective
professional fees and legal and other costs and expenses incurred in
relation to the negotiations leading to the Sale, and the preparation,
signing, completion and carrying into effect of this Agreement and all
other documents referred to in it
24.2 The Purchaser shall pay any stamp duties payable in respect of this
Agreement or any other document entered into or executed in connection
herewith or pursuant hereto.
25. Successors and assigns
25.1 None of the rights or obligations of any party hereto under this Agreement
may be assigned, novated, transferred, charged or otherwise dealt with
(whether in whole or in part) to or in favour of any third parties without
the prior written consent of the other parties hereto.
26. Applicable law and jurisdiction
26.1 This Agreement shall be governed by and construed in accordance with
English law and the parties submit to the exclusive jurisdiction of the
English courts in connection with any dispute arising hereunder.
AS WITNESS the hands of duly authorized representatives of the Vendor and of the
Purchaser the day and year first above written.
22
Schedule 1
The Assets, and the Licence and apportionments of
the consideration to such items
-------------------------------------------------
(1) Assets (2) Value Attributed ((pound))
1 The Goodwill 1,581,096.00
2 The Equipment 122,049.00
3 The Stock 92,462.00
4 The Debtors 497,889
5 The Contracts 1.00
6 The Business Records 1.00
7 The Licence 1.00
8 The Accrued Liabilities (43,499.00)
----------
(pound)2,250,000
23
Schedule 2
Excluded Assets
---------------
1 The Retained Records
2 The Business Names
3 The Cash
4 The Deferred Income
5 The Prepayments
6 The Excluded Products
7 All documentation owned by the Vendor in relation to the Excluded Products
8 Any insurance prepayments
9 Any right to use or continue to use after Completion any trade or service
name or ▇▇▇▇ of the Vendor
24
Schedule 3
Warranties
----------
1. The Vendor
1.1 The Vendor has all the requisite power and authority to enter into, deliver
and perform this Agreement and all other documentation to which it is a
party relating to the sale of the Business and Assets effected hereby.
1.2 The execution and delivery of, and the performance by the Vendor of its
obligations under, this Agreement and the other documents which are to be
executed by the Vendor at Completion will not contravene or result in a
breach of any provision of the Memorandum or Articles of Association of the
Vendor, or otherwise be ultra ▇▇▇▇▇.
1.3 No:
(a) voluntary arrangement under section I of the Insolvency ▇▇▇ ▇▇▇▇ or
scheme of arrangement under section 425 CA 1985 has been proposed in
respect of the vendor,
(b) receiver, receiver and manager or administrative receiver has been
appointed in respect of the Vendor,
(c) administration order has been made or petition for such an order
presented in respect of the Vendor;
(d) resolution has been passed (or meeting convened at which such a
resolution will be proposed), or petition presented, or order made,
for:
(i) the winding-up of the Vendor; or
(ii) the appointment of a provisional liquidator in respect of the
Vendor.
1.4 No distress or execution has been levied on, and no receiver, receiver and
manager or administrator receiver has been appointed in respect of, the
whole or any part of the undertaking or assets of the Vendor.
2. Accounts and Financial Information
2.1 The accounting records of the Vendor comply with the requirements of
sections 221 and 222 Companies Act 1985 and do not contain any material
inaccuracy or discrepancy.
2.2 All relevant financial books and records of the Vendor required by law to
be in its possession or under its direct control are in its possession or
otherwise under its direct control.
2.3 The Management Accounts fairly reflect the profits, assets and liabilities
in relation to the Business
25
as at the end of the period to which they relate, it being understood that
the Management Accounts have been prepared for internal purposes only.
3. The Assets
3.1 The Assets are all the assets used by the Vendor at the date hereof in
connection with the Business and are the absolute property of the Vendor
free from any Encumbrance (save for normal retention of title protection)
and (save for equipment and assets the subject of the Leasing Agreements)
are not the subject of any hire or hire-purchase agreement or agreement for
payment on deferred terms and are all in the possession of the Vendor or
under its control and there are no agreements or arrangements restraining
the freedom of the Vendor to transfer the Assets to the Purchaser or
otherwise to use or dispose of the same as it thinks fit.
3.2 So far as the Vendor is aware all documents which in any way affect the
right, tide or interest of the Vendor in or to any of the Assets and which
attract stamp duty have been duly stamped within the requisite period for
stamping.
3.3 The Business does not depend to any material extent upon any assets,
facilities or services provided by any other member of the Vendor's Group.
3.4 No floating charge created by the Vendor affecting the Business has
crystallized and so far as the Vendor is aware, there are no circumstances
likely to cause any such floating charge to crystallize prior to the
Completion Date.
3.5 The Vendor has not received notice from any person intimating that it will
enforce any security which it may hold over any of the Assets and, so far
as the Vendor is aware, there are no circumstances likely to give rise to
such a notice.
3.6 All material items of computer hardware comprised in the Equipment List in
the agreed form are in the possession or under the control of the Vendor.
4. The Business
4.1 So far as the Vendor is aware, the Vendor has obtained all necessary
licences and consents from any person, authority or body for the proper
carrying on of the Business and, so far as the Vendor is aware, is not in
breach of any of their material terms or conditions.
4.2 The Vendor has not been a party to any agency, distributorship, marketing,
purchasing, manufacturing or licensing agreement or arrangement or any
restrictive trading or other agreement or arrangement pursuant to which any
part of the Business has been carried on which in any way has restricted
its freedom to carry on the whole or any part of the Business or to use or
exploit any of the Assets in any part of the United Kingdom in such manner
as it thought fit.
4.3 So far as the Vendor is aware the Vendor is not and has not been a party in
relation to the Business to any agreement practice or arrangement which in
whole or in part:
26
(a) contravenes or is subject to registration under the Restrictive Trade
Practices Acts 1976 and 1977;
(b) contravenes the provisions of Part K Fair Trading ▇▇▇ ▇▇▇▇;
(c) would or might result in a reference of a "consumer trade practice"
within the meaning of the Fair Trading Act 1973 sl3, and be liable to
reference to the Consumer Protection Advisory Committee under Part H
of the said Act;
(d) contravenes the provisions of the Trade Descriptions Acts 1968;
(e) (so far as the Vendor is aware) contravenes any other anti-trust,
antimonopoly or anti-cartel legislation in any jurisdiction in which
the Vendor trades through the Business. . 4.4 The Vendor is not and
has not engaged in any anti-competitive practice, as defined in the
Competition ▇▇▇ ▇▇▇▇, in relation to the Business.
4.5 The Third Party Licences disclosed in the Disclosure Letter represent all
the third party licences necessary for the operation of the Business and
are all valid and the Vendor has or will procure the requisite rights to
subsidence any rights granted under the Third Party Licences pursuant to
the terms of the Licence.
4.6 The Vendor and LK Global Healthcare Systems {UK) Limited have, between
them, the right and title to enter into the Licence in respect of the
Excluded Products.
4.7 The Excluded Products which are the subject of the Licence are all the
software programs necessary for the purposes of operating the Business.
5. Events since the Accounts Date
5.1 The Vendor has, since the Accounts Date, carried-on the Business in the
ordinary' course and without interruption, so as to maintain it as a going
concern, and paid its creditors in accordance with the Vendor's normal
policy.
5.2 Since the Accounts Date:
(a) so far as the Vendor is aware no supplier of the Business has refused
to supply the Business or .threatened in writing to the Vendor to do
so;
(b) the Vendor has not received notice in writing of the loss of any
individual customer which, in the accounting reference period ended on
the Accounts Date, represented more than one per cent of the turnover
of the Business;
(c) no management charge has been levied on the Vendor by any member of
the Vendor's Group.
27
6. Contracts
6.1 Accurate details .or copies of the Continuing Contracts have been disclosed
to the Purchaser and there are no material agreements to which the Vendor
is or has within the previous twelve months been a party which materially
affect the operation at the Business which have not been disclosed to the
Purchaser and which will be material to the carrying on of the Business by
the Purchaser after Completion.
6.2 None of the Continuing Contracts has been entered into otherwise than in
the ordinary course of the Business.
6.3 So far as the Vendor is aware no written threat or claim or default under
any of the Continuing Contracts or any other agreement, instrument or
arrangement to which the Vendor is a party relating to the Business or the
Assets has been received by the Vendor.
6.4 The Vendor has no actual knowledge (this being deemed to be notice in
writing from a third party or customer of an intention to terminate or
withhold consent to an assignment) that any party to any of the Continuing
Contracts whose consent or approval is required for the assignment of that
contract to the Purchaser will refuse or withhold such consent or
assignment
6.5 There is no material dispute known to the Vendor in relation to any
Business Contract and there is no written claim of which the Vendor has
notice presently outstanding that any software products supplied to
customers of the Business did not meet Year 2000 Conformity as defined by
the British Standards Institution in Document DISC PD2000-1.
6.6 None of the Business Contracts entered into by the Vendor:
(a) relates to matters outside the Vendor's ordinary course of business or
was entered into otherwise than on arm's length terms;
(b) will become terminable as a result of the entry into or completion of
this Agreement.
6.7 No claim has been made by any third party under any guarantee given by any
member of the Vendor's Group in respect of liabilities of the Vendor.
6.8 All Business Contracts entered into by the Vendor for the supply,
maintenance and support of systems to general practitioners are in the
standard terms and conditions of the Vendor (copies of which are attached
to the Disclosure letter) without material variation.
7. Employees
7.1 The details regarding the Employees set out in Schedule 5 are true and
accurate in all material respects.
7.2 None of the Employees has given written notice to the Vendor of termination
of his employment.
28
7.3 So far as the Vendor is aware no written notice has been received alleging
noncompliance by the Vendor with any obligation imposed on it by law or
regulation relating to, or under the contract or terms and conditions of
employment of, any Employee.
7.4 So far as the Vendor is aware, there are no amounts owing or promised by
the Vendor to the Employees other than the current month's salary and
benefits payable under their respective employment contracts.
7.5 The Vendor has not, in respect of any Employee, entered into any
membership, recognition or collective agreements (whether legally binding
or not) with a trade union, works council, staff association or other
similar body.
7.6 All material particulars of the terms and conditions of employment of all
the Employees, including without limitation profit sharing or commission or
discretionary bonus arrangements, are set out in or annexed to the
Disclosure Letter.
7.7 None of the Employees is involved in any industrial dispute and so far as
the Vendor is aware there are no circumstances which may result in any
industrial dispute involving any Employees.
7.8 The Vendor has in all material respects maintained adequate and up to date
records relating to the service and terms and conditions of employment of
the Employees.
7.9 All obligations under statute or otherwise concerning working time and the
health and safety at work of the employees have been complied with and so
far as the Vendor is aware, there are no circumstances which will give rise
to a claim against the Vendor by any of the Employees in respect of any
accident or injury.
7.10 There is no Profit Related Pay scheme in force in relation to the Employees
which has been registered (or for which an application for registration has
been made) under Chapter III of Part V of the Income and Corporation Taxes
▇▇▇ ▇▇▇▇.
8. Pensions
8.1 Other than the pension arrangements disclosed in the Disclosure Letter the
Vendor has no plans, schemes or arrangements for the provision of relevant
benefits ("Relevant Benefits") (as defined in Section 612 ICTA) for any of
the Employees.
8.2 The Disclosure Letter -contains a statement of the amount of pension
contributions currently payable in respect of each Employee. All
contributions which have fallen due for payment have been paid.
9. Business intellectual property rights
9.1 So far as the Vendor is aware but without making enquiry, the Business does
not infringe any patent, registered design, design right, trade ▇▇▇▇,
copyright or other intellectual or industrial property right of any other
person or give rise to a liability to pay compensation pursuant to the
29
Patents Act 1977 ss40 and 41.
9.2 So far as the Vendor is aware, the Vendor has not (except in the ordinary
and normal course of business) disclosed or permitted to be disclosed, or
undertaken or arranged to disclose to any person other than the Purchaser,
any of its know-how, trade secrets, confidential information, price lists
or lists of customers or suppliers relating to the Business. . 9.3 Copies
of all licences and other agreements to which the Vendor is a party and
which are material to the Business relating to the intellectual property
rights used in the Business are contained in the Disclosure Letter.
10. Litigation
10.1 In relation to the Business, or the Property, there are no actions or
proceedings of which the Vendor has received service before or by any
court, governmental department, commission, board, agency, tribunal or
competent authority which involve a claim or demand for any judgement
order, relief, decree or liability.
10.2 So far as the Vendor is aware, there are no disputes, claims, legal
actions, proceedings or other litigation threatened in writing against the
Vendor in relation to the Business or the Property.
11. Compliance with law, etc
11.1 The Vendor has not, in relation to the Business or the Property, committed,
nor is it liable for, any criminal, illegal, unlawful or unauthorized act
or material breach of any statutory duty.
11.2 The Vendor has not, in relation to the Business, received notice in writing
that any investigation or inquiry is being or has been conducted by, or
received any request for information from, any governmental or other
authority, department, board, body or agency in respect of its affairs and
so far as the Vendor is aware, there are no circumstances which will give
rise to any such investigation, inquiry or request
11.3 The Vendor has not received notice in writing of any investigation or
inquiry by, or received any complaint in connection with, health and safety
matters.
12. VAT
12.1 The Vendor
(a) is registered for the purpose of and has complied in all material
respects with the VATA and is not in relation to the Business subject
to any conditions imposed by or agreed with Customs;
(b) is not or has not within the six years prior to the date hereof been
an agent or representative for, or otherwise liable to account for,
VAT for or on account of any other person pursuant to sections 47 or
48 VATA.
30
13. Property
13.1 The Vendor has complied with all covenants and conditions contained in the
lease under which the Vendor presently occupies the Property or in any
licence, consent or other document entered into supplemental to such lease
including covenants to repair.
13.2 The Property is and has during the Vendor's occupation been used and
occupied for the purpose of the Business of the Vendor.
13.3 The Property has the benefit of mains electricity, gas and water supply,
sewage and telecommunications.
14. General
14.1 The facts set out in the Schedules are true and accurate in all material
respects.
31
Schedule 4
Limitations of the liability of the Vendor and Remedy
-----------------------------------------------------
1. Remedy
1.1 Where the matter or default giving rise to a Relevant Claim is capable of
remedy, the Vendor shall not be liable unless written notice of the
Relevant Claim and such matter or default is given to the Vendor promptly
and the matter or default is not remedied to the reasonable satisfaction of
the Purchaser within 30 days after the date on which such notice is served.
1.2 Upon the Purchaser becoming aware that matters have arisen which will or
are likely to give rise to a Relevant Claim, the Purchaser will:
1.2.1not make any admission of liability, agreement or compromise with any
person, body or authority in relation to the potential claim without prior
consultation with the Vendor;
1.2.2at all times disclose in writing to the Vendor all information and
documents relating to the potential claim or the matters which will or are
likely to give rise to such claim and, if requested by the Vendor, give the
Vendor and its professional advisers reasonable access to the personnel of
the Purchaser as the case may be and to any relevant premises, chattels,
accounts, documents and records with the power, possession or control of
the Purchaser to enable the Vendor and its professional advisers to
interview such personnel, and to examine such claim, premises, chattels,
accounts, documents and records and to take copies or photographs thereof
at its own expense; and
1.2.3at the cost of the Vendor (and subject to the Vendor providing security for
such costs) take such action as the Vendor reasonably require (including
the appointment of solicitors nominated by the Vendor) to avoid, resist,
contest or compromise the potential claim or the matters which will or are
likely to give rise to such claim.
2. Exclusion of certain claims
2.1 No claim shall be made by the Purchaser against the Vendor, and the Vendor
shall have no liability to the Purchaser, under this Agreement (including
the Warranties) or otherwise in respect of any warranty, condition,
representation, indemnity, covenant, undertaking or otherwise arising out
of or in connection with the Sale (including any implied by statute or by
common law) except where it is expressly contained or incorporated by
reference in this Agreement.
2.2 No Relevant Claim shall be made, and the Vendor shall have no liability:
(a) in respect of any matter or thing disclosed in, or done in the
execution or performance of, this Agreement; or
(b) in respect of any matter which is fairly disclosed in the Disclosure
Letter; or
32
(c) in respect of th& physical condition of any assets owned or used in
connection with the Business; or
(d) in respect of any liability or other matter or thing if that
liability, matter or thing would not have arisen or occurred but for
an act, omission or transaction done, made or carried out after the
Completion Date; or
(e) in respect of any matter resulting from a change on or after the
Completion Date in any accounting or taxation policies or practices
relating to the Business; or
(f) in respect of any liability or other matter or thing which occurs or
arises as a result of or is otherwise attributable to any legislation
not in force at the date hereof or any change of law or administrative
practice which comes into force after the date hereof or any increase
in. any rate of taxation in force at the date hereof; or
(g) in respect of a liability which is contingent only unless and until
such contingent liability becomes an actual liability and is due and
payable;
(h) to the extent that it relates to any matter specifically identified
and provided for, or included as a liability or disclosed in the
Audited Accounts or the Management Accounts;
(i) to the extent that it relates to any loss for which the Purchaser
is indemnified by insurance.
2.3 The Vendor shall have no liability in respect of any Relevant Claim made in
relation to the Business Intellectual Property Rights other than any
Relevant Claim made in relation to a breach of any provision of paragraph 9
of Schedule 3.
3. Claims against third parties
3.1 Where the Purchaser is or becomes entitled (whether under any insurance or
by way of payment, discount, credit, set off, counterclaim or otherwise) to
recover from any third party (including any fiscal or taxation authority or
body) any sum in respect of Taxation or any other loss, damage or liability
which is or may be the subject of a Relevant Claim, the Purchaser shall, if
so required by the Vendor and if the Vendor agrees beforehand in writing
that it shall indemnify the Purchaser in respect of an agreed amount of
costs and expenses thereby reasonably incurred by the Purchaser, take or
procure that there are taken all such steps as the Vendor may reasonably
require to ensure or enforce such recovery, and in the event that the
Vendor shall have discharged a Relevant Claim, will pay over to the Vendor
the sum so recovered (or part thereof) in accordance with paragraph 3.4.
3.2 The Purchaser shall procure that the Vendor is promptly provided with all
such information and reports concerning any such steps or proceedings taken
by the Purchaser as the Vendor may from time to time reasonably request.
3.3 If any such sum as is referred to in sub-paragraph 3.1 shall be recovered
by the Purchaser from the
33
third party, any claim by the Purchaser against the Vendor in respect of
any loss, damage or liability to which the sum relates shall be limited
(without prejudice to the operation of any other paragraph of this
schedule) to the amount (if any) by which the amount of such loss, damage
or liability exceeds the aggregate of:
(a) the sum recovered less all reasonable costs, charges and expenses
incurred by the Purchaser in recovering that sum from the third party;
and
(b) any sum or sums previously paid to the Purchaser in respect of such
loss, damage or liability.
3.4 If the aggregate of the sums referred to in sub-paragraphs 3.3(a) and (b)
exceeds the amount of the loss, damage or liability to which the sum
recovered relates the Purchaser shall forthwith pay to the Vendor the
amount of the excess.
4. Time Limits
4.1 No Relevant Claim shall be brought by the Purchaser unless notice in
writing of such claim (specking, in reasonable detail and with supporting
evidence, the event, matter or default which gives rise to the Relevant
Claim and slating, or giving an estimate of, the amount claimed) has been
given to the Vendor within 18 months after Completion.
4.2
(a) Any Relevant Claim notified to the Vendor in accordance with paragraph
4.1 shall (if it has not been previously satisfied, settled or
withdrawn) be deemed to have been irrevocably waived and withdrawn on
the expiration of 6 months after the date on which it was so notified
unless court proceedings in respect of it shall then have been
commenced against the Vendor.
(b) For the purposes of paragraph 4.2(a), court proceedings shall not be
deemed to have been commenced unless they have been both issued and
served on the Vendor.
4.3 Time shall be of the essence for the purposes of this paragraph 4.
5. Thresholds
5.1 For the purposes of paragraph 5.2:
(a) a Relevant Claim shall be regarded as "material" if the amount of the
Relevant claim exceeds the individual threshold;
(b) "the individual threshold" means (pound)10,000 and "the cumulative
threshold" means (pound)100,000.
34
5.2 The Vendor shall have no liability in respect of any Relevant Claim unless
that Relevant Claim is material and the amount of that Relevant Claim, when
added to the aggregate amount of all other material Relevant Claims
notified to the Vendor in accordance with paragraph 4.1 exceeds the
cumulative threshold.
6. Aggregate maximum
6.1 The maximum aggregate liability of the Vendor in respect of all Relevant
Claims shall not exceed (pound)1,500,000.
7. No duplication of liability
7.1 The Purchaser hereby agrees with the Vendor that the Vendor shall not be
liable more than once in respect of the same fact, matter or circumstance.
8. Successful claims deemed to constitute a reduction in Purchase Price
8.1 Any payment by the Vendor to the Purchaser in full or partial satisfaction
of any Relevant Claim under this Agreement (including the Warranties) shall
be deemed to constitute a reduction in the Purchase Price by an amount
equal to the amount so paid.
9. Mitigation
9.1 Nothing in this Agreement shall affect any common law duty of the Purchaser
to mitigate its loss.
10. Fraud, etc
10.1 Nothing in this Agreement shall restrict or prevent any liability for fraud
or fraudulent misrepresentation or misstatement.
35
Schedule 5
Employees
---------
See Annexure 1
36
Schedule 6
Details of the Property
-----------------------
▇▇▇▇▇ ▇, ▇, ▇, ▇, ▇, ▇, ▇, ▇▇ and 11 ▇▇▇▇▇▇▇▇ Business Centre, Knowl Piece,
Wilbury Way, Hitchin, Herts
37
Schedule 7
Business Contracts
------------------
See Annexure 2
38
Schedule 8
Leasing Agreements
------------------
See Annexure 3
39
Signed by )
For and on behalf of )
AREMISSOFT (UK) PLC ) /s/ ▇▇▇▇ VOICE
-----------------
Signed by )
For and on behalf of )
TOREX HEALTH LIMITED ) /s/
-----------------