The Asset Transfer Agreement

APPENDIX 2.
4
(referred to in paragraph 2.44)
The Asset Transfer Agreement
1. The agreement was made on 3 November 1991 between (a) Medicopharma Ltd and Medicopharma (UK)
BV as vendors, (b) PIUK as purchaser, and (c) Medicopharma NV as guarantor. The following is a summary of
its relevant provisions.
2. The introductory recitations include: `On the date hereof the Guarantor has announced its decision to close
down the Business with immediate effect and the Vendors and the Purchaser have given notices of redundancy to
each of their employees.'
Assets of the vendors

3. Under Clause 2.1 the vendors agreed to sell, and PIUK agreed to purchase, forthwith upon execution of
the Agreement:
(a) the properties, defined as the leasehold properties at Harold Hill, Weedon and Aberdeen;
(b) the tangible fixed assets, defined as such of the computer systems and software, plant and vehicles located
at the properties, together with such additional items selected by PIUK which, when aggregated with the
motor vehicles owned by PIUK, amounted to not less than £2 million (reduced by the amount of any
liabilities assumed by PIUK under Clause 6.2) or such lower figure as might arise if good title to any of
those assets could not be transferred by 14 January 1992; and
(c) the stock, defined as the stock owned by the vendors as at the close of business on the completion date (ie
3 November 1991) for the purpose of or in connection with the business (excluding any such stock in
transit); provided that PIUK should pay any amount realised on stock to which a nil value was ascribed in
the completion balance sheet, and that any such stock remaining unsold on 14 January 1992 should be
returned to the vendors.
4. In Clause 2.2 `For the avoidance of doubt only (and so that the absence of any item from the following list
shall not because of that fact be used as evidence that it was intended to be sold to the Purchaser)' it was agreed
that the following assets of the vendors were not included in the sale:
(a) the goodwill of the business;
(b) the benefit of any contracts or orders;
(c) any interest in freehold or leasehold properties other than the properties referred to in paragraph 3(a);
(d) any fixed assets other than the tangible fixed assets defined in paragraph 3(b);
(e) the vendors' debts;
(f) cash in hand or at bank;
(g) the statutory books and records of the vendors;
(h) all assurance and rights thereto save for the proceeds of insurance claims relating to the vendors' assets;
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(i) any right to use the names `Medicopharma', `Macarthy', `Macarthy Medical', `E H Butler', `Mediphase'
and `Pharmacy Systems' or any derivative of any such names used by the vendors in connection with the
business; and
(j) the shares held by Medicopharma (UK) BV in Pharmacy Systems Ltd.
5. Clause 2.3 provided that, in relation to any of the tangible fixed assets which were the subject of hire
purchase or leasing agreements or other third party rights, the vendors should use their reasonable endeavours to
procure the assignment or transfer of the benefit of such agreements to PIUK on or after the completion date.
6. Under Clause 2.4 the vendors should use all reasonable endeavours to procure the consent of the landlords
of the properties to the assignment of the properties to PIUK. Pending such assignment, PIUK should be allowed
to occupy the properties as licensee.
Assets of PIUK
7. Under Clause 3.1 PIUK agreed to sell, and the vendors agreed to purchase, all the assets of PIUK
including, for the avoidance of doubt:
(a) the goodwill attaching to the business of PIUK;
(b) the benefit of any contracts or orders;
(c) all interests owned by PIUK in freehold or leasehold properties other than the properties referred to in
paragraph 3(a);
(d) any tangible assets other than motor vehicles;
(e) the debts of PIUK;
(f) cash in hand or at bank;
(g) all assurances and rights thereto save for the proceeds of insurance claims relating to PIUK's stock and
motor vehicles; and
(h) all monies standing to the credit of any rent deposit held by a landlord in respect of any property of PIUK.
8. In Clause 3.2 it was expressly agreed that PIUK's stock and motor vehicles were not included in the sale.
9. Clause 3.3 provided that, in relation to any of PIUK's assets (other than property) which were subject to
hire purchase, leasing or or other third party rights, PIUK should use its reasonable endeavours to procure the
assignment or transfer of the benefit of such agreements to the vendors on or after the completion date.
10.Under Clause 3.4 PIUK should use all reasonable endeavours to procure (if required) the consent of the
landlord to the assignment of PIUK's property to the vendors. Pending such assignment, the vendors should be
permitted to occupy the property as licensees.
11.Under Clause 3.5 the vendors assumed the burden of discharging all PIUK's existing liabilities as at the
completion date, including any redundancy, unfair dismissal or other payments incurred in connection with the
dismissal of PIUK's employees, any creditors or other liabilities appearing in the books or accounts of PIUK on
the completion date. The clause also provided that this should be reflected in the completion balance sheets.
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12.Under Clause 3.6 the vendors agreed to indemnify PIUK in respect of all liabilities assumed under Clause
3.5 and all contingent or undisclosed liabilities of PIUK.
Consideration
13.Under Clause 4 the consideration for the vendors' assets, less the consideration for PIUK's assets (less all
its liabilities), was to be £23,956,000 (or such other figure as should be established as the value of the stock and
tangible fixed assets of PIUK in the completion balance sheet), exclusive of VAT. PIUK and the vendors should
each pay the appropriate amount of VAT.
14.Under Clause 5.4 the amount of the consideration set out in Clause 4 was to be left outstanding as an
interest-free loan by the vendors to PIUK, repayable on demand.
15.Clause 6 stated, for the avoidance of doubt only, that it was expressly agreed that nothing in the agreement
should operate to transfer to PIUK the burden of paying any creditors or discharging any liabilities of the vendors
as at the completion date, except that PIUK undertook to assume all the vendors' obligations and liabilities under
any hire purchase or leasing agreements affecting the tangible fixed assets.
16.The First Schedule provided that completion balance sheets should be drawn up of each of the vendors and
PIUK. Stock-in-trade was to be valued at the lower of cost and net realisable value, with provision in full for
obsolete, damaged or shortdated stock, and further deduction in respect of any such stock to which clean title had
not been obtained by 7 December 1991 (or such later date prior to 7 January 1992 as might apply to any
creditor's settlement date). Tangible fixed assets were to be valued at net book value after normal depreciation,
less any related hire purchase or finance lease obligations assumed by PIUK under Clause 6. Debtors were to be
valued after full provision for discounts, assuming settlement on the due date, retrospective rebates due in
relation to any period prior to completion, bad and doubtful debts, and all accounts which were overdue at
completion.
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APPENDIX 2.

The Asset Transfer Agreement

Assets of the vendors

(a) the goodwill of the business;

(b) the benefit of any contracts or orders;

(e) the vendors' debts;

(f) cash in hand or at bank;

(g) the statutory books and records of the vendors;

(j) the shares held by Medicopharma (UK) BV in Pharmacy Systems Ltd.

(a) the goodwill attaching to the business of PIUK;

(b) the benefit of any contracts or orders;

(d) any tangible assets other than motor vehicles;

(e) the debts of PIUK;

(f) cash in hand or at bank;

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