<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
ALPHAREL, INC.
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, no par value
- -------------------------------------------------------------------------------
(Title of Class of Securities)
020799 10 2
- -------------------------------------------------------------------------------
(CUSIP number)
Mr. Brian J. Pierce
Reads Trust Company
No. 1 Seaton Place
St. Helier, Jersey JE4 8YJ Channel Islands
011-44-1534-605600
- -------------------------------------------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
December 27, 1995
- -------------------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with the statement /X/.
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
NOTE. Six copies of this statement, including all exhibits, should be
filed with the Commission. SEE Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
(Page 1 of 57 Pages)
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CUSIP No. 020799 10 2 13D Page 2 of 57 Pages
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Document Management Systems Limited
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
OO
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(D) or 2(E) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
- -------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
SHARES 985,719
--------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY -0-
--------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING 985,719
--------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
985,719
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 020799 10 2 13D Page 3 of 57 Pages
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
The Major Trust
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
N/A
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(D) or 2(E) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Jersey, Channel Islands
- -------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
SHARES 985,719
--------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY -0-
--------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING 985,719
--------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
985,719
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
OO - Trust
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 020799 10 2 13D Page 4 of 57 Pages
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Union Trust Company Limited
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
N/A
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(D) or 2(E) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
- -------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
SHARES 985,719
--------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY -0-
--------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING 985,719
--------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
985,719
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 020799 10 2 13D Page 5 of 57 Pages
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Brian John Pierce
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
N/A
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(D) or 2(E) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
British Isles
- -------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
SHARES -0-
--------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 1,425,511
--------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING -0-
--------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
1,425,511
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,425,511
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.3%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 020799 10 2 13D Page 6 of 57 Pages
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Peter Edward Francis Newbald
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
N/A
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(D) or 2(E) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
British Isles
- -------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
SHARES -0-
--------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 1,425,511
--------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING -0-
--------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
1,425,511
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,425,511
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.3%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 020799 10 2 13D Page 7 of 57 Pages
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Richard John Stobart Prosser
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
N/A
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(D) or 2(E) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
British Isles
- -------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
SHARES -0-
--------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 1,425,511
--------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING -0-
--------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
1,425,511
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,425,511
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.3%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 020799 10 2 13D Page 8 of 57 Pages
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Ian Robert Richardson
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
N/A
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(D) or 2(E) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
British Isles
- -------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
SHARES -0-
--------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 1,425,511
--------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING -0-
--------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
1,425,511
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,425,511
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.3%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 020799 10 2 13D Page 9 of 57 Pages
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
James Norman Henry Bennett
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
N/A
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(D) or 2(E) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
British Isles
- -------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
SHARES -0-
--------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 1,425,511
--------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING -0-
--------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
1,425,511
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,425,511
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.3%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 020799 10 2 Page 10 of 57
ADDENDUM TO SCHEDULE 13D
On December 27, 1995, Document Management Systems Limited, a British
Virgin Islands corporation ("DMS") and Henley Documents Limited, a British
Virgin Islands corporation ("Henley"), along with the other shareholders of
Trimco Group plc, a United Kingdom company ("Trimco"), entered into a Sale
and Purchase Agreement, in the form attached as Exhibit A (the "Sale and
Purchase Agreement") with Alpharel, Inc., a California corporation (the
"Issuer"), providing for the acquisition of all of the outstanding shares of
Trimco by the Issuer.
Pursuant to the Sale and Purchase Agreement, the Issuer acquired all of
the outstanding shares of Trimco in exchange for the payment of an aggregate
purchase price of $14,650,000, comprised of $5,550,000 in cash, 1,614,189
shares of the Issuer's common stock, no par value (the "Common Stock"), and a
promissory note in the principal amount of $1,000,000.
As shareholders of Trimco, DMS and Henley received from the Issuer an
aggregate of 735,719 shares and 439,792 shares, respectively, of the Issuer's
Common Stock. In addition, DMS received a $1,000,000 convertible promissory
note (the "Convertible Loan Note"), a copy of which is attached hereto as
Exhibit B. The Convertible Loan Note bears interest at the rate of 7% per
annum and is due on September 27, 1996. The Convertible Loan Note is
convertible at any time prior to such due date, at the election of DMS, into
Common Stock at a rate of $4.00 per share, or an aggregate of 250,000 shares.
The conversion must be made with respect to the entire principal amount
thereof.
<PAGE>
CUSIP No. 020799 10 2 Page 11 of 57
Item 1. SECURITY AND ISSUER
The class of securities to which this Schedule 13D relates is the
Common Stock, no par value (defined above as the "Common Stock") of Alpharel,
Inc., a California corporation (defined above as the "Issuer"), whose
principal executive offices are located at 9339 Carroll Park Drive, San
Diego, California 92121.
Item 2. IDENTITY AND BACKGROUND
Document Management Systems Limited (defined above as "DMS") is a
corporation organized under the laws of the British Virgin Islands. Its
principal business is as an investment company. Its principal office and
principal business address is Tropic Isle Buildings, Road Town, Tortola,
British Virgin Islands. All of the outstanding shares of DMS are owned by the
Major Trust.
The Major Trust (the "Trust") is a trust formed under the laws of
Jersey, Channel Islands. Its principal address is No. 1 Seaton Place, St.
Helier, Jersey, Channel Islands. Union Trust Company Limited ("Union Trust
Company") is the sole trustee of the Trust.
Union Trust Company Limited is a corporation organized under the
laws of the British Virgin Islands. Its principal business is providing
trust services. Its principal office and principal business address is Bank
of Nova Scotia Building, Road Town, Tortola, British Virgin Islands.
Henley Documents Limited (defined above as "Henley") is a
corporation organized under the laws of the British Virgin Islands. Its
principal business is as an investment company. Its principal office and
principal business address is Tropic Isle Building, Road Town, Tortola,
British Virgin Islands. All of the outstanding shares of Henley are owned by
the Henley Trust.
The Henley Trust is a trust formed under the laws of Jersey,
Channel Islands. Its principal address is No. 1 Seaton Place, St. Helier,
Jersey, Channel Islands. Reads Trustees Limited is the sole trustee of the
Henley Trust.
Brian John Pierce, Peter Edward Francis Newbald, Richard John
Stobart Prosser, Ian Robert Richardson and James Norman Henry Bennett
(collectively, the "Shareholders") own all of the outstanding shares of each
of Union Trust Company and Reads Trustees Limited and thus may be deemed to
be the beneficial owners of the shares of Alpharel Common Stock beneficially
owned by DMS and Henley.
Brian John Pierce is a citizen of the British Isles whose principal
business address is No. 1 Seaton Place, St. Helier, Jersey JE4 8YJ, Channel
Islands. Mr. Pierce is a director of DMS. Mr. Pierce's principal occupation
is chartered accountant with Reads & Company Limited.
Richard John Stobart Prosser is a citizen of the British Isles
whose principal business address is No. 1 Seaton Place, St. Helier, Jersey
JE4 8YJ, Channel Islands. Mr. Prosser is a director of DMS. Mr. Proseer's
principal occupation is chartered accountant with Reads & Company Limited.
Stephen David Parrott is a citizen of the British Isles whose
principal business address is No. 1 Seaton Place, St. Helier, Jersey JE4 8YJ,
Channel Islands. Mr. Parrott is a director of DMS. Mr. Parrott's principal
occupation is chartered accountant with Reads & Company Limited.
Peter Edward Francis Newbald is a citizen of the British Isles
whose principal business address is No. 1 Seaton Place, St. Helier, Jersey
JE4 8YJ, Channel Islands. Mr. Newbald is a director of Union Trust Company.
Mr. Newbald's principal occupation is chartered accountant with Reads &
Company Limited.
<PAGE>
CUSIP No. 020799 10 2 Page 12 of 57
Dennis Anthony McGurgan is a citizen of the British Isles whose
principal business address is 19/21 Circular Road, Douglas, Isle of Man. Mr.
McGurgan is a director of Union Trust Company. Mr. McGurgan's principal
occupation is chartered accountant with RHR Corporate Services (Isle of Man)
Limited.
Ian Robert Richardson is a citizen of the British Isles whose
principal business address is No. 1 Seaton Place, St. Helier, Jersey JE4 8YJ,
Channel Islands. Mr. Richardson's principal occupation is chartered
accountant with Reads & Company Limited.
James Norman Henry Bennett is a citizen of the British Isles whose
principal business address is No. 1 Seaton Place, St. Helier, Jersey JE4 8YJ,
Channel Islands. Mr. Bennett's principal occupation is chartered accountant
with Reads & Company Limited.
None of the persons or entities reporting hereunder nor, to their
knowledge, any executive officer, director or controlling person of any of
them, has, during the last five years, been convicted in any criminal
proceeding, excluding traffic violations or similar misdemeanors.
None of the persons or entities reporting hereunder nor, to their
knowledge, any executive officer, director or controlling person of any of
them, has, during the last five years, been a party to a civil proceeding or
a judicial or administrative body of competent jurisdiction as a result of
which it was or is subject to a judgment, decree or final order enjoining
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws, or finding any violation with respect to such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The shares of the Issuer's Common Stock owned by DMS and Henley
were acquired by DMS and Henley as of December 27, 1995 as described in the
introductory paragraphs of this Addendum. The source of funds used by DMS
and Henley in making the purchases was the shares of Trimco previously held
by DMS and Henley which were transferred to the Issuer. With respect to DMS'
right to acquire additional shares upon conversion of the Convertible Loan
Note, there will be no additional consideration due from DMS upon such
conversion.
Item 4. PURPOSE OF TRANSACTION
The shares acquired by DMS and Henley (and those that may be
acquired by DMS pursuant to the terms of the Convertible Loan Note) have been
acquired for investment purposes.
(a) Pursuant to the Convertible Loan Note, DMS also has the right
to receive from the Issuer 250,000 additional shares of Common Stock. Such
right is based on an election by DMS, prior to the due date of the
Convertible Loan Note (September 27, 1996), to convert it into an aggregate
of 250,000 shares of Common Stock at a rate of $4.00 per share (the
"Conversion Right").
(b)-(j) Paragraphs (b)-(j) of Item 4 are inapplicable.
Item 5. INTEREST IN SECURITIES OF THE ISSUER
(a)-(b) Reference is made to Items 7 through 13 of the Schedule
13D on pages 2-4 and Item 2 of the Addendum to the Schedule 13D on pages 11
and 12, which items are incorporated by reference herein, for the description
of the beneficial ownership of each reporting person herein. For DMS, the
Trust, Union Trust Company, and the Shareholders, the Common Stock shown as
beneficially owned includes 250,000 shares of Common Stock beneficially owned
by virtue of the Conversion Right described in Item 4(a) above.
<PAGE>
CUSIP No. 020799 10 2 Page 13 of 57
None of the persons named in Item 2, other than DMS, the Trust,
Union Trust Company and the Shareholders, beneficially owns any securities of
the Issuer.
(c) None of the persons referred to in Item 5(a) has effected any
transactions in the Issuer's Common Stock during the past 60 days, except as
set forth herein.
(d)-(e) Paragraphs (d)-(e) of Item 5 are inapplicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
As disclosed in Item 4 above, the Issuer has executed the
Convertible Loan Note, which grants DMS the right to acquire an additional
250,000 shares of Common Stock at a conversion rate of $4.00 per share.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
The following exhibits are attached to this Schedule 13D:
Exhibit 99.1 - Sale and Purchase Agreement dated December 27, 1995 by
and among the Issuer, the shareholders of Trimco and Jayantilal Velji Tanna.
Exhibit 99.2 - Convertible Loan Note dated December 27, 1995 made by
the Issuer in favor of DMS.
Exhibit 99.3 - Agreement with Respect to Group Filing.
<PAGE>
CUSIP No. 020799 10 2 Page 14 of 57
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: January 8, 1996
DOCUMENT MANAGEMENT SYSTEMS LIMITED, a
corporation organized under the laws of
the British Virgin Islands
By: /s/ BRIAN J. PIERCE
------------------------------------
Its: Director
-----------------------------------
THE MAJOR TRUST
By: UNION TRUST COMPANY LIMITED
Its: Trustee
By: /s/ PETER E.F. NEWBALD
-----------------------------------
Its: Director
----------------------------------
UNION TRUST COMPANY LIMITED, a
corporation organized under the laws of
the British Virgin Islands
By: /s/ PETER E.F. NEWBALD
-----------------------------------
Its: Director
----------------------------------
/s/ BRIAN JOHN PIERCE
---------------------------------------
Brian John Pierce
/s/ PETER EDWARD FRANCIS NEWBALD
---------------------------------------
Peter Edward Francis Newbald
/s/ RICHARD JOHN STOBART PROSSER
---------------------------------------
Richard John Stobart Prosser
/s/ IAN ROBERT RICHARDSON
---------------------------------------
Ian Robert Richardson
/s/ JAMES NORMAN HENRY BENNETT
---------------------------------------
James Norman Henry Bennett
<PAGE>
CUSIP No. 020799 10 2 Page 15 of 57
Exhibit Index
Exhibit
Number Exhibit
------- -----------------------------------------------------------
99.1 Sale and Purchase Agreement dated December 27, 1995 by and
among the Issuer, the shareholders of Trimco and Jayantilal
Velji Tanna.
99.2 Convertible Loan Note dated December 27, 1995 made by the
Issuer in favor of DMS.
99.3 Agreement with Respect to Group Filing
<PAGE>
DATED 27TH DECEMBER, 1995
THE SELLERS NAMED IN SCHEDULE 1
AND
THE OPTIONHOLDERS NAMED IN SCHEDULE 1
AND
JAYANTILAL VELJI TANNA
AND
ALPHAREL, INC.
AGREEMENT
FOR THE SALE AND PURCHASE OF
ALL THE ISSUED SHARE CAPITAL
OF TRIMCO GROUP PLC
ALLEN & OVERY
LONDON
<PAGE>
CONTENTS
CLAUSE PAGE
1. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Sale and Purchase of the Shares . . . . . . . . . . . . . . . . . . . . 3
3. Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Purchaser's Common Stock. . . . . . . . . . . . . . . . . . . . . . . . 5
6. Completion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7. Insider Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8. Loan Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9. Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10. Protective Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . 9
11. Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
13. Resolutions and Waivers . . . . . . . . . . . . . . . . . . . . . . . .11
14. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
15. Whole Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
16. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SCHEDULES
1. Particulars of the Sellers and the Optionholders. . . . . . . . . . . .14
2. Particulars of the Company. . . . . . . . . . . . . . . . . . . . . . .19
3. Particulars of the Subsidiaries . . . . . . . . . . . . . . . . . . . .20
4. City Code on Takeovers and Mergers. . . . . . . . . . . . . . . . . . .25
<PAGE>
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THIS AGREEMENT is made on 27th December, 1995 BETWEEN:
(1) THE PERSONS whose names and addresses are set out in column A of Part A of
Schedule 1 (each a "Seller" and together the "Sellers");
(2) THE PERSONS whose names and addresses are set out in column A of Part B of
Schedule 1 (each an "Optionholder" and together the "Optionholders");
(3) JAYANTILAL VELJI TANNA whose address is 16 Willow Chase, Hazlemere,
Buckinghamshire HP15 7QP ("Jay Tanna"); and
(4) ALPHAREL, INC. whose principal place of business is at 9339 Carroll Park
Drive, San Diego, California, United States of America (the "Purchaser")
WHEREAS:
(A) Trimco Group plc ("Trimco") is a public company limited by shares short
particulars of which are set out in Schedule 2 having an authorised capital
of L600,000 and US$50 divided into 100,000 preference shares of L1 each,
50,000 of which have been issued fully paid or credited as fully paid
("Preference Shares"), 206,600 deferred 'A' ordinary shares of L1 each,
all of which have been issued fully paid or credited as fully paid
("Deferred 'A' Ordinary Shares"), 293,400 deferred ordinary shares of L1
each, 123,400 of which have been issued fully paid or credited as fully
paid ("Deferred Ordinary Shares"), 206,600 'A' ordinary shares of US$0.0001
each, all of which have been issued fully paid or credited as fully paid
("'A' Ordinary Shares") and 293,400 ordinary shares of US$0.0001 each,
123,400 of which have been issued fully paid or credited as fully paid
("Ordinary Shares").
(B) The Sellers are beneficially entitled to all the Shares (as defined in
clause 1).
(C) Trimco is the beneficial owner of the entire issued share capitals of all
the companies short details of which are set out in Schedule 3.
(D) The Sellers wish to sell and, in reliance upon the undertakings set out in
this agreement, the Purchaser wishes to purchase all the issued share
capital of Trimco on the terms set out in this agreement.
(E) The Optionholders are beneficially entitled to the Options.
(F) The Optionholders wish to waive all of their rights in respect of the
Options and to cancel the Options at Completion on the terms set out in
this agreement.
(G) For the purposes of the City Code on Takeovers and Mergers (the "Code"),
each of the Sellers, who together comprise all of the holders of the entire
issued share capital of Trimco, acknowledges the terms of Schedule 4,
whereby the Seller waives the application of the Code.
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2
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IT IS AGREED as follows:
1. INTERPRETATION
(1) In this agreement:
"Agreed Form" means, in relation to any document, the form of that document
which has been initialled for the purpose of identification by the Seller's
Solicitors and the Purchaser's Solicitors;
"Business Day" means a day (other than a Saturday or a Sunday) on which
banks are generally open in London and San Diego for normal business;
"Companies" means Trimco and the Subsidiaries and "Company" means any of
them;
"Completion" means completion of the sale and purchase of the Shares in
accordance with clause 6;
"Deferred Shares" means all of the Deferred 'A' Ordinary Shares and the
Deferred Ordinary Shares;
"Disclosure Letter" means the letter of the same date as this agreement
from the Sellers to the Purchaser in the Agreed Form;
"Group" means Trimco and the Subsidiaries;
"Non-Deferred Shares" means all of the Preference Shares, the 'A' Ordinary
Shares and the Ordinary Shares;
"Options" means those share option agreements granted by Trimco to the
Optionholders;
"Purchaser's Solicitors" means Allen & Overy of One New Change,
London EC4M 9QQ;
"Sellers' Solicitors" means Nabarro Nathanson of 50 Stratton Street, London
W1X 6NX;
"Shares" means all of the Ordinary Shares, the 'A' Ordinary Shares, the
Preference Shares, the Deferred 'A' Ordinary Shares and the Deferred
Ordinary Shares;
"subsidiary" means a subsidiary for the purposes of the Companies Act 1985;
and
"Subsidiaries" means all the companies mentioned in Schedule 3 and
"Subsidiary" means any of them.
(2) Words denoting persons shall include bodies corporate and unincorporated
associations of persons.
(3) Subclauses (1) and (2) above apply unless the contrary intention appears.
(4) The headings in this agreement do not affect its interpretation.
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3
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(5) The expression "with full title guarantee" means that the person selling,
or agreeing to sell:
(a) has the right to dispose of the relevant property, undertaking or
asset as it purports to;
(b) will, at its own cost, do all it reasonably can to give its transferee
the title it purports to give. This includes doing all it reasonably
can to ensure that the transferee is registered with the same class of
title and, in the case of any property or asset not yet registered,
giving all reasonable assistance to establish the transferee's right
to be so registered;
(c) disposes of the whole interest in the relevant property, undertaking
or asset;
(d) covenants that there is no subsisting breach which could result in
forfeiture of the relevant property, undertaking or asset; and
(e) disposes of the relevant property, undertaking or asset free from all
encumbrances (whether monetary or not) and from all other rights
exercisable by third parties.
2. SALE AND PURCHASE OF THE SHARES
(1) Each of the Sellers shall sell the number of Shares set out against its
name in Schedule 1 with full title guarantee and the Purchaser shall
purchase the Shares together with all rights attaching to them other than
the dividends provided for in the audited accounts of Trimco to 30th June,
1995 and the dividend which has accrued in respect of the Preference Shares
up until Completion.
(2) Each of the Sellers covenant with the Purchaser as follows:
(a) that it has the right to sell and transfer the full legal and
beneficial interest in the Shares set out against its name in Schedule
1 to the Purchaser on the terms set out in this agreement; and
(b) that on or after Completion it will, at its own cost and expense,
execute and do (or procure to be executed and done by any other
necessary party) all such deeds, documents, acts and things as the
Purchaser may from time to time reasonably require in order to vest
any of the Shares set out against its name in Schedule 1 in the
Purchaser or its nominee or as otherwise may be necessary to give
full effect to this agreement.
(3) Each of the Sellers covenants that the Shares set out against its name in
Schedule 1 shall be sold free from all liens, charges, equities and
encumbrances and other rights exercisable by third parties.
(4) The parties expressly acknowledge that no representations and warranties
have been given in relation to the sale and purchase of the Shares and the
cancellation of the Options. Each of the Sellers and the Optionholders
acknowledge that prior to the date of this agreement Jay Tanna has provided
or arranged to provide information to the Purchaser, the Purchaser's
accountants and the Purchaser's solicitors in response to written requests
from them. Provided that there has been no fraud or recklessness as to the
accuracy or completeness of information provided to the Purchaser, the
Purchaser's accountants and the Purchaser's solicitors, the Purchaser shall
have no claim against the Sellers or the Optionholders in respect of such
information.
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4
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If there has been fraud or recklessness as to the accuracy or completeness
of the information provided to the Purchaser, the Purchaser's accountants
or the Purchaser's solicitors, the Sellers and the Optionholders shall be
liable to the Purchaser for any loss suffered by the Purchaser as a result
of such fraud or recklessness provided that the maximum liability of each
Seller and each Optionholder shall not exceed the total consideration
received by the Seller or the Optionholder (as the case may be), which, in
the case of a Seller shall equal the aggregate of:
(a) the sum of cash paid to, or to the direction of, that Seller under
clause 3(1)(a); and
(b) the value of the Common Stock allotted to that Seller under clause
3(1)(b) determined by multiplying the number of shares allotted to the
Seller by US$5.018.
For the purposes of this subclause (4):
(a) there shall have been fraud or recklessness as to the accuracy or
completeness of the information provided to the Purchaser, the
Purchaser's accountants or the Purchaser's solicitors if the person
who provided such information:
(i) made a statement, which he knew to be misleading, false or
deceptive or dishonestly concealed any material fact; or
(ii) recklessly made (dishonestly or otherwise) a statement, which is
misleading, false or deceptive;
(b) references to the Sellers or to a Seller shall exclude 3i plc and 3i
Group plc.
(5) The Optionholders shall waive all rights relating to the Options.
(6) The Optionholders covenant with the Purchaser as follows:
(a) that they have the right to waive all rights to the Options on the
terms set out in this agreement; and
(b) that on or after Completion they will, at their own cost and expense,
execute and do (or procure to be executed and done by any necessary
party) all such deeds, documents, acts and things as the Purchaser may
from time to time require in order to cancel all of the Options as may
be necessary to give full effect to this agreement.
3. CONSIDERATION
(1) The consideration for the sale of the Shares shall be:
(a) the sum of US$6,521,133 payable to the Sellers in cash on Completion
in the proportions set out in Schedule 1; and
(b) the allotment to the Sellers of 1,614,189 common stock of the
Purchaser (the "Common Stock") in the proportions set out in
Schedule 1.
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5
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(2) The consideration for the waiving by the Optionholders of all of their
rights under the Options and the cancellation of the Options shall be the
sum of US$28,867 payable to the Optionholders in cash on Completion in the
amounts set out in Schedule 1.
4. CONDITIONS PRECEDENT
(1) The sale and purchase of the Shares is conditional on receipt by the
parties (in a form to the reasonable satisfaction of the Sellers) of an
opinion in writing from the Purchaser's legal advisers that:
(i) no consent, approval or authorisation of and no registration,
declaration or filing with, any court or governmental authority or
agency of the United States of America is required by United States
federal law to be obtained or made by the Purchaser for the
consummation of the transactions contemplated by this agreement in
connection with the issuance of the Common Stock by the Purchaser to
the Sellers, except such as have been made or obtained prior to
Completion; and
(ii) subject to the accuracy of the statements made in clause 5(3) and
subject to the restrictions contained in clause 5(5), the offer and
sale of the Common Stock to the Sellers in the manner provided in this
agreement is exempt from the registration requirements of Section 5 of
the Act (as defined in clause 5(4)) by virtue of the provisions of
Regulation S promulgated thereunder; provided, however, that such
legal advisers shall express no opinion with respect to any resale of
such Common Stock by the Sellers; and provided, further, that such
legal advisers shall be entitled to assume the accuracy of the
respective factual representations of, and the compliance with the
respective agreements and undertakings by, the parties hereto
necessary to establish the applicability of the exemption from
registration provided by Regulation S.
(2) The Purchaser shall use reasonable endeavours to procure that the
conditions in subclause (1) above are fulfilled on or before 15th December,
1995.
(3) If the conditions in subclause (1) above are not fulfilled or waived on or
before the date specified in subclause (2) above all the preceding clauses
of this agreement shall cease to have effect and none of the parties
(provided he shall have used reasonable endeavours as aforesaid) will have
any rights or liabilities under those clauses.
5. PURCHASER'S COMMON STOCK
(1) Jay Tanna represents and warrants that no Seller which holds 50% or more of
the voting securities of Trimco or has a contractual power presently to
designate 50 per cent. or more of the members of the board of directors of
Trimco either has (or controls entities that have in the aggregate) annual
net sales or revenues of $100 million or more (as shown on their most
recent regularly prepared annual statement of income and expenses) or has
(or controls entities that have in the aggregate) total assets of $100
million or more (as shown on their most recently prepared balance sheet).
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6
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(2) Jay Tanna shall procure that the Companies shall provide to the Purchaser
such information and documents as the Purchaser may reasonably request from
time to time prior to Completion for the purpose of complying with the
disclosure and other requirements of US federal and state securities (the
"Required Information") including financial information in compliance with
the requirements of the US Securities and Exchange Commission. None of
such Required Information provided to the Purchaser by the Companies will
include any untrue statement of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(3) None of the Sellers is, or at the time of Completion will be, a "US
person", as such term is defined in Rule 902(o) of Regulation S of the US
Securities and Exchange Commission.
(4) The Sellers understand that the Common Stock has not been and will not be
registered under the US Securities Act of 1933 (the "Act") and may not be
offered or sold in the United States or to US persons unless it is
registered under the Act, or an exemption from the registration
requirements of the Act is available. None of the Sellers will engage in
any hedging transaction with respect to the Common Stock or take a short
position in the common stock of the Purchaser prior to the expiration of 40
days after the issuance of the Common Stock to the Sellers.
(5) Each of Document Management Systems Limited and Henley Documents Limited
undertakes to the Purchaser that it shall not dispose of its interest in
such Common Stock for a period of two years from the date of Completion,
save that it may dispose of its interest in up to 12 1/2 per cent. of the
total amount of Common Stock acquired by it under this agreement in each
three month period commencing on the day following Completion.
(6) If any of the Common Stock cannot be traded by reason of the Act after the
expiration of the 40 days period referred to in sub-clause (4) but within 2
years of Completion the Purchaser shall, as soon as reasonably practicable
after receiving notification from any of the Sellers, procure registration
under the Act of all Common Stock issued to the Sellers. The cost of such
registration shall be borne as to half by the Purchaser and as to the other
half by the Sellers (pro rata to their interests in the Common Stock)
provided that the obligation of all of the Sellers under this subclause
shall not exceed US$30,000.
6. COMPLETION
(1) Completion shall take place at the offices of the Purchaser's Solicitors
upon execution of this agreement.
(2) At Completion:
(a) each Seller shall procure the delivery to the Purchaser of:
(i) duly executed transfers in favour of the Purchaser or its
nominee(s) of all the Seller's Deferred Shares and, in the case
of 3i, of all the Preference Shares;
(ii) the warrants issued to the Seller by Trimco with respect to all
the Seller's Non-Deferred Shares;
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7
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(iii) the share certificate(s) representing any of the Seller's
Shares (or an express indemnity in a form satisfactory to the
Purchaser in the case of any found to be missing);
(b) Jay Tanna shall procure the delivery to the Purchaser of:
(i) the certificate of incorporation, common seal, minute books,
statutory registers and share certificate books of each Company
as the Purchaser may direct;
(ii) a service agreement between Trimco and Jay Tanna in the Agreed
Form;
(iii) duly executed transfers of each share in a Subsidiary as is not
registered in the name of Trimco in favour of the Purchaser or
as it may direct together with the relevant share
certificate(s); and
(iv) the resignation of the auditors of each Company in the Agreed
Form in each case confirming, in accordance with section 394 of
the Companies Act 1985, that there are no circumstances
connected with their resignation which should be brought to the
attention of the members or creditors of that Company and that
no fees are due to them.
(c) each Seller shall (so far as it is able) procure that a board meeting
of each Company is held at which it is resolved that:
(i) such persons as the Purchaser nominates are appointed as
additional directors and the secretary of that Company;
(ii) the transfers referred to in paragraph (a) above (subject only
to their being duly stamped) are approved for registration;
(iii) Price Waterhouse are appointed as auditors; and
(iv) its bank mandates are revised in such manner as the Purchaser
requires;
(d) each of 3i plc and 3i Group plc shall deliver a written notice to the
Purchaser, addressed to Trimco and the Purchaser, confirming it waives
all rights:
(i) under article 9 of Trimco's articles of association; and
(ii) under Trimco's articles of association to have the Preference
Shares redeemed,
in a form satisfactory to the Purchaser;
(e) Document Management Systems Limited shall deliver a written notice to
the Purchaser, addressed to Trimco and the Purchaser, confirming that
it waives all of its rights under article 9 of the Trimco's articles
of association; and
(f) each of the Optionholders shall deliver a written notice waiving all
rights in respect of the Options and cancelling the Options.
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8
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(3) Upon completion of all the matters referred to in subclause (2) above the
Purchaser shall:
(a) pay the cash consideration for the sale of the Shares to the Sellers'
Solicitors or otherwise as each Seller may direct the Purchaser in
writing except, in the case of 3i plc and 3i Group plc, in which case
the cash consideration for the sale of the Shares shall be paid to 3i
plc on behalf of itself and 3i Group plc;
(b) issue a share certificate to each Seller or its nominee for the number
of Common Stock set out next to the Seller's name in column H of Part
A of Schedule 1; and
(c) pay the cash consideration for the waiver by the Optionholders of
their rights under the Options and the cancellation of the Options to
the Sellers' Solicitors.
(4) If for any reason the provisions of subclause (2) above are not fully
complied with the Purchaser may elect (in addition and without prejudice to
all other rights or remedies available to it) to rescind this agreement or
to fix a new date for Completion.
7. INSIDER CONTRACTS
(1) Each Seller other than 3i plc and 3i Group plc covenants with the Purchaser
that neither that Seller nor any person or company or other entity
connected (subject to the proviso set out below) with that Seller:
(a) is a party to any outstanding agreement or arrangement for the
provision of finance, goods, services or other facilities to or by any
Company or in any way relating to any Company or its affairs except as
is set out in the Disclosure Letter; and
(b) has any claim against the Company and hereby waives any claim it may
have against the Company except as is set out in the Disclosure
Letter,
provided that no regard shall be had regarding any financial interest of
the nature described in the proviso to clause 10(2)(a) .
(2) Jay Tanna covenants with the Purchaser that neither Jay Tanna nor any
person or company or other entity connected with Jay Tanna:
(a) is a party to any outstanding agreement or arrangement for the
provision of finance, goods, services or other facilities to or by any
Company or in any way relating to any Company or its affairs except as
is set out in the Disclosure Letter; and
(b) has any claim against the Company and hereby waives any claim it may
have against the Company except as is set out in the Disclosure
Letter,
provided that no regard shall be had regarding any financial interest of
the nature described in the proviso to clause 10(2)(a) .
(3) Each of 3i plc and 3i Group plc covenants with the Purchaser that it:
(a) is not a party to any outstanding agreement or arrangement for the
provision of finance, goods, services or other facilities to or by any
Company or in any way relating to any Company or its affairs except as
is set out in the Disclosure Letter; and
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9
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(b) does not have any claim against the Company and hereby waives any
claim it may have against the Company except as is set out in the
Disclosure Letter.
8. LOAN ACCOUNTS
Each of the Sellers and Jay Tanna shall procure that on Completion all
indebtedness due from that Seller (or any person connected with that
Seller) to any Company is satisfied in full other than as is set out in the
Disclosure Letter.
9. GUARANTEES
(1) Each of the Sellers (other than 3i plc and 3i Group plc) and Jay Tanna
shall procure that on Completion each Company is released from all
guarantees and indemnities given by it other than a guarantee in respect
only of the liabilities of another Company.
(2) The Purchaser shall use reasonable endeavours to procure that as from
Completion each Seller and Jay Tanna is released from all guarantees and
indemnities given by him in respect of obligations of any Company and of
which full particulars are contained in the Disclosure Letter and pending
its release the Purchaser shall indemnify the relevant Seller or Jay Tanna
(as the case may be) against all liabilities under those guarantees and
indemnities.
10. PROTECTIVE COVENANTS
(1) Jay Tanna covenants with the Purchaser (for itself and as trustee for each
Company) that he shall not:
(a) for a period of 2 years from Completion be concerned in any business
(other than the business of a Company) carrying on business which is
competitive or likely to be competitive with any of the businesses
carried on by a Company at Completion; or
(b) for a period of 2 years from Completion and except on behalf of a
Company canvass or solicit orders for goods of similar type to those
being manufactured or dealt in or for services similar to those being
provided by any Company at Completion from any person who is at
Completion or has been at any time within the year prior to Completion
a supplier or customer of a Company; or
(c) for a period of 2 years from Completion induce or attempt to induce
any supplier of a Company to cease to supply, or to restrict or vary
the terms of supply, to that Company; or
(d) for a period of 2 years from Completion induce or attempt to induce
any employee of a Company to leave the employment of that Company; or
(e) make use of or (except as required by law or any competent regulatory
body) disclose or divulge to any third party any information of a
secret or confidential nature relating to the business or affairs of
any Company or its customers or suppliers; or
(f) use or (insofar as it can reasonably do so) allow to be used (except
by the Companies) any trade name used by a Company at Completion or
any other name intended or likely to be confused with such a trade
name.
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10
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(2) For the purposes of subclause (1) above:
(a) Jay Tanna is concerned in a business if he carries it on as principal
or agent or if:
(i) he is a partner, director, consultant or agent in, of or to any
person who carries on the business; or
(ii) he has any direct or indirect financial interest (as
shareholder or otherwise) in any person who carries on the
business; or
(iii) he is a partner, director, consultant or agent in, of or to any
person who has a direct or indirect financial interest (as
shareholder or otherwise) in any person who carries on the
business
provided that no regard shall be had to any financial interest of a person
in securities which are listed on the London Stock Exchange or traded on
the Unlisted Securities Market and/or the Alternative Investment Market
and/or any internationally recognised stock exchange or similar securities
market if that person is interested in securities which amount to less than
five per cent. of the issued securities of that class and which, in all
circumstances, carry less than five per cent. of the voting rights (if any)
attaching to the issued securities of that class; and
(b) references to a Company include its successors in business.
(3) Each of the restrictions in each paragraph or subclause above shall be
enforceable by the Purchaser independently of each of the others and its
validity shall not be affected if any of the others is invalid; if any of
those restrictions is void but would be valid if some part of the
restrictions were deleted the restriction in question shall apply with such
modification as may be necessary to make it valid.
(4) Jay Tanna acknowledges that the above provisions of this clause are no more
extensive than is reasonable to protect the Purchaser as the purchaser of
the Shares.
(5) If by virtue of any provision of this agreement or of any other agreement
or arrangement of which this agreement forms part the agreement or
arrangement is subject to registration under the Restrictive Trade
Practices Act 1976, that provision shall not take effect until the day
after particulars of the agreement or arrangement have been given to the
Director General of Fair Trading under section 24 of that Act.
11. ANNOUNCEMENTS
No party shall make any announcement concerning this sale and purchase or
any ancillary matter before Completion except as required by law or any
competent regulatory body or with the written approval of Jay Tanna, 3i
plc and the Purchaser, such approval not to be unreasonably withheld or
delayed.
12. NOTICES
(1) Any notice or other document to be served under this agreement may be
delivered or sent by post or telex or facsimile process to the party to be
served at its address appearing in this agreement or at such other address
as it may have notified to the other party in accordance with this clause.
Any notice or document sent by post shall be sent by prepaid first class
recorded delivery post (if within the United Kingdom) or by prepaid airmail
(if elsewhere).
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(2) Any notice or document shall be deemed to have been served:
(a) if delivered, at the time of delivery; or
(b) if posted, at 10.00 a.m. on the second Business Day after it was put
into the post, if sent within the United Kingdom, or at 10.00 a.m.
(local time at place of destination) on the seventh Business Day after
it was put into the post, if sent by airmail; or
(c) if sent by telex or facsimile process, at the expiration of 2 hours
after the time of despatch, if despatched before 3.00 p.m. (local time
at the place of destination) on any Business Day, and in any other
case at 10.00 a.m. (local time at the place of destination) on the
Business Day following the date of despatch.
(3) In proving service of a notice or document it shall be sufficient to prove
that delivery was made or that the envelope containing the notice or
document was properly addressed and posted as a prepaid first class
recorded delivery letter or that the telex or facsimile message was
properly addressed and despatched as the case may be.
13. RESOLUTIONS AND WAIVERS
(1) In relation to each Company the Sellers shall procure (so far as they each
are able) the convening of all meetings, the giving of all waivers and
consents and the passing of all resolutions as are necessary under the
Companies Act 1985, its articles of association or any agreement or
obligations affecting it to give effect to this agreement.
(2) The Sellers waive (and shall procure the waiver by its nominee(s) of) all
rights of preemption which it (or such nominee(s)) may have (whether under
Trimco's articles of association or otherwise) in respect of the transfer
to the Purchaser or its nominee(s) of the Shares or any of them.
(3) For so long after Completion as it remains the registered holder of any of
the Shares the Sellers shall hold them and any distributions, property and
rights deriving from them in trust for the Purchaser and shall deal with
the Shares and any distributions, property and rights deriving from them as
the Purchaser directs; in particular, the Sellers shall exercise all voting
rights as the Purchaser directs or shall execute an instrument of proxy or
other document which enables the Purchaser or its representative to attend
and vote at any meeting of Trimco.
14. GENERAL
(1) Each of the obligations and undertakings set out in this agreement which is
not fully performed at Completion will continue in force after Completion.
(2) Unless otherwise expressly stated all payments to be made under this
agreement shall be made in US Dollars to the party to be paid as follows:
(a) to the Sellers' Solicitors at:
bank Midland Bank plc
196A Piccadilly
London W1
sort code: 40-05-27
account name: Nabarro Nathanson Re Trimco Group US$ Client Account
account number: 35942762
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or such other account as the Sellers may specify; and
(b) to the Purchaser at such account as the Purchaser may specify.
(c) to 3i plc on behalf of itself and 3i Group plc at:
bank: Chase Manhattan Bank, New York
Swift LLOYDGB2CITY
Lloyds Bank plc
City International Branch London
Favour 3i Group plc
account number: 11074873
(3) The receipt of the Sellers' Solicitors (except for 3i plc and 3i Group plc)
for any sum or document to be paid or delivered to the Sellers (except 3i
plc and 3i Group plc) or to the Optionholders will discharge the
Purchaser's obligation to pay or deliver it to the Sellers (except 3i plc
and 3i Group plc) or to the Optionholders (as the case may be). The
receipt of 3i plc for any sum or document to be paid or delivered to 3i plc
or 3i Group plc will discharge the Purchaser's obligation to pay or deliver
it to 3i plc or 3i Group plc.
(4) If the Shares are sold or transferred after Completion to any wholly-owned
company within the Purchaser's Group the benefit of each of the obligations
and undertakings undertaken or given by the Sellers and/or Jay Tanna may be
assigned to the purchaser or transferee of the Shares who may enforce them
as if it had been named in this agreement as the Purchaser.
(5) Subject to subclause (4) above none of the rights or obligations under this
agreement may be assigned or transferred without the prior written consent
of all the parties.
(6) Each party shall pay the costs and expenses incurred by it in connection
with the entering into and completion of this agreement.
(7) This agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same agreement and any party
may enter into this agreement by executing a counterpart.
15. WHOLE AGREEMENT
(1) This agreement and the documents referred to in it contain the whole
agreement between the parties relating to the transactions contemplated by
this agreement and supersede all previous agreements between the parties
relating to these transactions except as otherwise agreed in writing.
(2) Each of the parties acknowledges that in agreeing to enter into this
agreement it has not relied on any representation, warranty or other
assurance except those set out in this agreement and in the absence of
fraud or recklessness he will not have any remedy or right arising out of
or in connection with this agreement or the information and responses
provided to the Purchaser on behalf of the Sellers (as defined in clause
2(4)) except as otherwise agreed in writing.
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<PAGE>
13
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16. GOVERNING LAW
This agreement is governed by and shall be construed in accordance with
English law and the Purchaser agrees to submit to the jurisdiction of the
courts of England. The address for the service of notices for the
Purchaser shall be 111 Uxbridge Road, Ealing, London, W5 2TZ or such other
address in England as it shall notify Jay Tanna from time to time.
AS WITNESS the hands of the Sellers or their authorised signatories, the hands
of the Optionholders or their authorised signatories and of a duly authorised
officer of the Purchaser on the date which appears first on page 1.
- -------------------------------------------------------------------------------
<PAGE>
14
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SCHEDULE 1
PARTICULARS OF THE SELLERS AND THE OPTIONHOLDERS
PART A
THE SELLERS
<TABLE>
<CAPTION>
B. No. of C. No. of 'A' D. No. of E. No. of F. No. of G. Amount of H. No. of
A. Name and Address Preference Ordinary Shares Ordinary Deferred 'A' Deferred Cash Common
Shares Shares Ordinary Shares Ordinary Shares Consideration Stock
<S> <C> <C> <C> <C> <C> <C> <C>
Document Management
Systems Ltd.
Tropic Isle Buildings
Road Town, Tortola
British Virgin Islands 150,000 150,000 US$3,077,436 735,719
3i plc
91 Waterloo Road
London SE1 8XP 50,000 45,600 45,600 US$969,746
3i Group plc
91 Waterloo Road
London SE1 8XP 11,000 11,000 US$215,265 276,231
Henley Documents
Limited
PO Box 641
No. 1 Seaton Place
St Helier, Jersey 90,114 90,114 US$1,763,489 439,792
Channel Islands JE4
8YJ
- -----------------------------------------------------------------------------------------------------------------------------
<PAGE>
15
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William Turner
14 Brands Hill Avenue
High Wycombe
Bucks 6,000 6,000 US$83,991 29,282
Hazel Elizabeth Turner
14 Brands Hill Avenue
High Wycombe
Bucks 2,000 2,000 US$39,139 9,761
Dr Michael Hadjitofi
Sint Hubertusureg 3
2597 JH Den Haag 7,195 7,195 US$140,803 35,114
Margaret Prosser
10 Apex Court
Sutherland Road
Ealing
London W13 ODU 4,401 4,401 US$82,227 21,478
Haickanoosh Liddell
3 Vernon Road
Bushey
Watford WDL 2JL 8,195 8,195 Nil 39,995
Jay Patel
6 Parkside
Hampton Hill
Middlesex TW12 1NU 895 895 US$15,287 4,368
- -----------------------------------------------------------------------------------------------------------------------------
<PAGE>
16
- -----------------------------------------------------------------------------------------------------------------------------
Sima Patel
6 Parkside
Hampton Hill
Middlesex TW12 1NU 1,700 1,700 US$33,268 8,297
J Dhanpaul
8 Meadowview Road
Kennington
Oxford OX1 5QX 950 950 US$13,299 4,636
B Clarke
6 Ascham Road
Bournemouth
Dorset BH8 8LY 500 500 US$6,999 2,440
P Reeves
79 Elder Road
Bisley, Nr Woking
Surrey GU25 9HB 400 400 US$5,600 1,952
S King
The Retreat
Flowers Bottom Lane
Speen
Nr Princes Risborough
Bucks NP27 3PZ 350 350 US$4,899 1,708
- -----------------------------------------------------------------------------------------------------------------------------
<PAGE>
17
- -----------------------------------------------------------------------------------------------------------------------------
P Dhaliwal
51 Minterne Avenue
Norwood Green,
Southall 250 250 US$3,499 1,220
Middlesex UB2 4HP
S Sullivan
32 Norton Road
Heatherside
Camberley
Surrey 250 250 US$3,499 1,220
J Smith
19 Gloucester Street
Farringdon
Oxon SN7 7JA 150 150 US$2,099 732
L Brannigan
5 Church Drive
Kingsbury
London NW9 50 50 US$699 244
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
18
- --------------------------------------------------------------------------------
PART B
THE OPTIONHOLDER
<TABLE>
<CAPTION>
A. Name and Address B. No. of Options C. Amount of Cash Consideration
<S> <C> <C>
Michael Boses 750 US$28,867
1378 76th Avenue N.
Seminole
F 1 34646
United States of America
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
19
- -------------------------------------------------------------------------------
SCHEDULE 2
PARTICULARS OF THE COMPANY
Registered number: 2253256
Registered office: 111, Uxbridge Road, Ealing, London W5 2TZ
Date and place of incorporation: 9th May, 1988 at Cardiff
Directors: Robert Edward Liddell
Jayantilal Velji Tanna
William Alan Turner
David Bantin
Sunil Jay Tanna
Jayendra Nagin Patel
Secretary: David Bantin
VAT number: GB 538819602
Accounting reference date: 30th June
Auditors: Gane Jackson Scott
- --------------------------------------------------------------------------------
<PAGE>
20
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SCHEDULE 3
PARTICULARS OF THE SUBSIDIARIES
A. TRIMCO ENTERPRISES LIMITED
Registered number: 2625912
Registered office: 111 Uxbridge Road, Ealing, London, W5 2TZ
Date and place of 26th June, 1991, London
incorporation:
Directors: Jayantilal Velji Tanna
William Alan Turner
Robert Edward Liddell
Jayendra Nagin Patel
David Bantin
Sunil Jay Tanna
Secretary: David Bantin
Accounting reference date: 30th June
Auditors: Gane Jackson Scott
Authorised capital: L1000
Issued capital: L2
Shareholders: Trimco Group Plc No. of shares: 2
- --------------------------------------------------------------------------------
<PAGE>
21
- --------------------------------------------------------------------------------
B. IMAGEN ENTERPRISES LIMITED
Registered number: 2527310
Registered office: 111 Uxbridge Road, Ealing, London, W5 2TZ
Date and place of 2nd August, 1990, Cardiff
incorporation:
Directors: Jayantilal Velji Tanna
David Bantin
Secretary: David Bantin
Accounting reference date: 30th June
Authorised capital: L1000
Issued capital: L100
Shareholders: Trimco Group Plc No. of shares:100
Status: Registered as a dormant company
- --------------------------------------------------------------------------------
<PAGE>
22
- --------------------------------------------------------------------------------
C. MICRO SYNERGY ASSOCIATES, INC.
FEI Number: 59-2763224
Principal Place of Business: 15950 Bay Vista Drive
Suite 140
Clearwater
Florida 34620
Date of Incorporation: 29th January, 1987
Directors: Jay Tanna
Secretary: David Bantin
Authorised capital: $500
Issued capital: $67
Shareholders: Trimco Enterprises Limited
This Company ceased to trade on 30th November, 1995
- --------------------------------------------------------------------------------
<PAGE>
23
- --------------------------------------------------------------------------------
D. TRIMCO AMERICA INC.
FEI Number: 59-3109048
Principal Place of Business: 15950 Bay Vista Drive
Suite 140
Clearwater
Florida 34620
Date of Incorporation: 23rd December, 1991
Directors: Jay Tanna
David Bantin
Secretary: David Bantin
Authorised capital: $1000
Issued capital: $100
Shareholders: Trimco Group plc
- --------------------------------------------------------------------------------
<PAGE>
24
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E. TRIMCO DOCUMENT MANAGEMENT INC.
Registration No.: 290490-0
Date of Incorporation: 20th April, 1993 (Canada Business Corporation
Acts)
Principal Place of Business: 1253 McGill College Street
Suite 695
Montreal
Province of Quebec H3B 2Y5
Nominee Director: Andre Sicard (Canadian resident)
Authorised capital: Unlimited
Shareholders: Trimco Group plc
Issued capital: C$100
- --------------------------------------------------------------------------------
<PAGE>
25
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SCHEDULE 4
CITY CODE ON TAKEOVERS AND MERGERS
1. Under the terms of this agreement, all of the Sellers, as all the
shareholders in Trimco acknowledge that the Panel on Takeovers and Mergers
(the "Panel") has agreed to a waiver of the City Code on Takeovers and
Mergers (the "Code") in respect of the sale and purchase of the Shares
provided that all of the Sellers agree to waive their rights under the Code
as set out in this Schedule. Brief details of the Panel, the Code and the
protections they afford are described below. Each of the Sellers
acknowledges that in waiving their rights under the Code they have had the
opportunity to take independent professional advice.
2. The Code is issued and administered by the Panel. The Code applies to all
takeover and merger transactions, however effected, where the offeree
company is (inter alia) an unlisted public company resident in the United
Kingdom. Trimco is such a company and its shareholders are entitled to the
protection afforded by the Code.
3. The Code and the Panel operate principally to ensure fair and equal
treatment of shareholders in relation to takeovers. The Code also provides
an orderly framework within which takeovers are conducted.
4. The Code has not, and does not seek to have, the force of law. It has,
however, been acknowledged by both government and other regulatory
authorities that those who seek to take advantage of the facilities of the
securities market in the United Kingdom should conduct themselves in
matters relating to takeovers in accordance with best business standards
and so according to the Code.
5. The Code is based upon a number of General Principles which are essentially
statements of good standards of commercial behaviour. The General
Principles are set out in Appendix 1 to this Schedule 4. These General
Principles apply to all transactions with which the Code is concerned.
They are, however, expressed in broad general terms and the Code does not
define the precise extent of, or the limitations on, their application.
They are applied by the Panel in accordance with their spirit to achieve
their underlying purpose: the Panel may modify or relax the effect of their
precise wording accordingly.
In addition to the General Principles, the Code contains a series of Rules,
of which some are effectively expansions of the General Principles and
examples of their application and other provisions governing specific
aspects of takeover procedure. Although most of the Rules are expressed in
more detailed language than the General Principles, they are not framed in
technical language and, like the General Principles, are to be interpreted
to achieve their underlying purpose. Therefore, their spirit must be
observed as well as their letter and the Panel may modify or relax the
application of a Rule in certain circumstances.
6. The following points are of particular relevance:-
(i) General Principle 1 of the Code states that all shareholders of the
same class must be treated similarly by an offeror. Furthermore, the
effect of Rule 16 is that, except with the consent of the Panel,
special arrangements may not be made with shareholders in Trimco if
there are favourable conditions attached which are not being extended
to all shareholders.
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<PAGE>
26
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(ii) The Board of Directors of Trimco is required by Rule 3.1 of the
Code to obtain competent independent advice on the Offer and the
substance of such advice must be made known to its shareholders.
General Principle 4 requires that shareholders must be given
sufficient information and advice to enable them to reach a
properly informed decision and must have sufficient time to do so.
(iii) In support of the latter requirement, Rule 24 requires that the
document setting out the Offer must deal in detail with the
following matters:-
(a) the Offeror's intentions regarding Trimco and its employees;
(b) detailed financial information regarding the Offeror for the
past three years; the names of its Directors; the nature of its
business; financial and trading prospects; and a summary of the
principal contents of material contracts entered into during
the preceding two years;
(c) full details of the terms of the Offer;
(d) detailed financial information on Trimco for the past three
years and the names of its Directors;
(e) a description of how the Offer is to be financed and the source
of the finance;
(f) if appropriate, middle market quotes for the last six months of
the shares to be acquired and if not, details of the prices at
which shares have been transferred during the previous six
months;
(g) appropriate details of shareholdings and recent dealings in the
securities of the Offeror and Trimco by relevant parties;
(h) details of any special arrangements between the Offeror or any
person acting in concert with it and any of the Directors,
recent directors, shareholders or recent shareholders of Trimco
having any connection with or dependence upon the Offer;
(i) certain extracts from the Code relating to acceptances of the
Offer, timing obligations, restrictions on Offerors or
provisions conferring rights on shareholders in Trimco;
(j) confirmation by an appropriate third party that resources are
available to the Offeror sufficient to satisfy the cash
payments required under the Offer;
(k) a statement as to whether or not any shares acquired under the
Offer will be transferred to any other persons; and
(l) a statement to the effect that, except with the consent of the
Panel, settlement of the consideration to which any shareholder
is entitled under the Offer will be implemented in full in
accordance with the terms of the Offer without regard to any
lien, right of set-off, counterclaim or other analogous right
to which the Offeror may otherwise be entitled.
- --------------------------------------------------------------------------------
<PAGE>
27
- --------------------------------------------------------------------------------
(iv) Rule 25 requires that the Board of Trimco must circulate its
views on the Offer and make known to its shareholders the substance
of the advice given to it by independent advisers appointed pursuant
to Rule 3.1. The Board must also comment upon the Offeror's
statements regarding its intentions in respect of the Company and
its employees. The circular from the Board of Trimco must also deal
with the following matters:-
(a) appropriate details of shareholdings and recent dealings in the
securities of the Offeror and Trimco by relevant parties;
(b) whether the Directors of Trimco intend to accept or reject the
Offer in respect of their own beneficial shareholdings; and
(c) a summary of the principal contents of each material contract
entered into by Trimco and its subsidiaries during the period
beginning two years before the Offer was made.
(v) Rule 20.1 states that information about the companies involved in
the Offer must be made equally available to all shareholders as
nearly as possible at the same time and in the same manner.
7. Compliance with the Code inevitably imposes time constraints and additional
costs. Each of the Sellers believes that in respect of the sale and
purchase of Shares as set out in this agreement, these costs and
constraints may well outweigh the advantages to all parties and each of the
Sellers agrees to the waiver from the Code by the Panel for the purposes of
the sale and purchase of the Shares in accordance with the terms of this
agreement.
APPENDIX 1 - THE GENERAL PRINCIPLES OF THE CODE
1. All shareholders of the same class of an offeree company must be treated
similarly by an offeror.
2. During the course of an offer, or when an offer is in contemplation,
neither an offeror, nor the offeree company, nor any of their respective
advisers may furnish information to some shareholders which is not made
available to all shareholders. This principle does not apply to the
furnishing of information in confidence by the offeree company to a bona
fide potential offeror or vice versa.
3. An offeror should only announce an offer after the most careful and
responsible consideration. Such an announcement should be made only when
the offeror has every reason to believe that it can and will continue to be
able to implement the offer: responsibility in this connection also rests
on the financial adviser to the offeror.
4. Shareholders must be given sufficient information and advice to enable them
to reach a properly informed decision and must have sufficient time to do
so.
5. Any document or advertisement addressed to shareholders containing
information or advice from an offeror or the board of the offeree company
or their respective advisers must, as is the case with a prospectus, be
prepared with the highest standards of care of accuracy.
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<PAGE>
28
- --------------------------------------------------------------------------------
6. All parties to an offer must use every endeavour to prevent the creation of
a false market in the securities of an offeror or the offeree company.
Parties involved in offers must take care that statements are not made
which may mislead shareholders or the market.
7. At no time after a bona fide offer has been communicated to the board of an
offeree company, or after the board of an offeree company has reason to
believe that a bona fide offer might be imminent, may any action be taken
by the board of the offeree company in relation to the affairs of the
company, without the prior approval of the shareholders in general meeting,
which could effectively result in any bona fide offer being frustrated or
in the shareholders being denied an opportunity to decide on its merits.
8. Rights of control must be exercised in good faith and the oppression of a
minority is wholly unacceptable.
9. Directors of an offeror and the offeree company must always, in advising
their shareholders, act only in their capacity as directors and not have
regard to their personal or family shareholdings or to their personal
relationships with the companies. It is the shareholders' interests taken
as a whole, together with those of employees and creditors, which should be
considered when the directors are giving advice to shareholders. Directors
of the offeree company should give careful consideration before they enter
into any commitment with an offeror (or anyone else) which would restrict
their freedom to advise their shareholders in the future. Such commitments
may give rise to conflicts of interest or result in a breach of the
directors' fiduciary duties.
10. Where control of a company is acquired by a person, or persons acting in
concert, a general offer to all other shareholders is normally required; a
similar obligation may arise if control is consolidated. Where an
acquisition is contemplated as a result of which a person may incur such an
obligation, he must, before making the acquisition, ensure that he can and
will continue to be able to implement such an offer.
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<PAGE>
29
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SIGNED by )
Brian John Pierce )
and )
by Richard John Stobart Prosser ) /s/ Brian John Pierce
as authorised signatories )
for and on behalf of ) /s/ Richard John Stobart Prosser
DOCUMENT MANAGEMENT )
SYSTEMS LIMITED )
SIGNED by )
Brian John Pierce )
and )
by Richard John Stobart Prosser ) /s/ Brian John Pierce
as authorised signatories )
for and on behalf of ) /s/ Richard John Stobart Prosser
HENLEY DOCUMENTS LIMITED )
SIGNED by )
Christine Wilson as )
authorised signatory ) /s/ Christine Wilson
for and on behalf of )
3i plc )
SIGNED by )
Christine Wilson as )
authorised signatory ) /s/ Christine Wilson
for and on behalf of )
3i GROUP plc )
SIGNED by
HAZEL ELIZABETH TURNER )
/s/ Hazel Turner
SIGNED by DR MICHAEL HADJITOFI )
/s/ Michael Hadjitofi
SIGNED by MARGARET PROSSER )
/s/ Margaret Prosser
- --------------------------------------------------------------------------------
<PAGE>
30
- --------------------------------------------------------------------------------
SIGNED by HAICKANOOSH LIDDELL )
/s/ Haickanoosh Liddell
SIGNED by JAY PATEL )
/s/ Jay Patel
SIGNED by SIMA PATEL )
/s/ Sima Patel
SIGNED by J DHANPAUL )
/s/ J Dhanpaul
SIGNED by B CLARKE )
/s/ B Clarke
SIGNED by P REEVES )
/s/ P Reeves
SIGNED by S KING )
/s/ S King
SIGNED by P DHALIWAL )
/s/ P Dhaliwal
SIGNED by S SULLIVAN )
/s/ S Sullivan
SIGNED by J SMITH )
/s/ J Smith
SIGNED by L BRANNIGAN )
/s/ L Brannigan
SIGNED by JAY TANNA )
/s/ Jay Tanna
SIGNED by MICHAEL BOSES )
/s/ Michael Boses
- --------------------------------------------------------------------------------
<PAGE>
31
- --------------------------------------------------------------------------------
SIGNED by WILLIAM ALAN )
TURNER )
/s/ William Alan Turner
SIGNED by )
)
for and on behalf of ) /s/ Robert T. Bruce
ALPHAREL, INC. )
<PAGE>
NEITHER THIS CONVERTIBLE LOAN NOTE NOR THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS NOTE HAVE BEEN REGISTERED WITH
THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER REGULATIONS S PROMULGATED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NEITHER
THIS CONVERTIBLE LOAN NOTE NOR THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS NOTE MAY BE OFFERED OR SOLD IN
THE UNITED STATES OR TO ANY U.S. PERSON (AS SUCH TERM IS DEFINED
IN REGULATION S) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR PURSUANT TO APPLICABLE EXEMPTION FROM
THE PROVISIONS OF THE ACT.
PRINCIPAL AMOUNT OF THIS LOAN NOTE: US$1,000,000
ALPHAREL, INC.
CONVERTIBLE LOAN NOTE
This Note is authorised by a resolution of the Board of Directors
passed on the 7th day of December, 1995.
1. Alpharel, Inc. whose principal place of business is at
9339 Carroll Park Drive, San Diego, California, United
States of America ("the Company") will pay to Document
Management Systems Limited of Tropic Isle Buildings,
Tortola, Road Town, British Virgin Islands being the
Registered Holder of this Note the principal sum of
US$1,000,000 in accordance with and subject to the
Conditions attached hereto ("the Conditions").
2. The Company will also pay to such Registered Holder interest
at the rate and in the manner specified in the Conditions.
3. This Note is issued subject to, and with the benefit of, the
Conditions.
Given under the hand of an authorised signatory of the Company
this 27th day of December, 1995.
ALPHAREL, INC.
By: /s/Robert T. Bruce
Robert T. Bruce, Chairman
This Note is not transferable.
<PAGE>
THE CONDITIONS
1. STATUS
(A) This Note is a convertible loan note (the "Note") for a
principal sum of US$1,000,000 secured by the assets of the
Company excluding the US$1,000,000 letter of credit issued
by Merrill Lynch.
(B) The Company hereby undertakes that within 30 days of the
date of this Note it will secure the amount due hereunder on
the assets of the Company by way of a valid and enforceable
continuing security interest in priority to the creditors of
the Company subject only to the prior interest of Merrill
Lynch in relation to a US$1,000,000 letter of credit issued
to the Company. Such security interest shall be in a form
to the reasonable satisfaction of the Registered Holder.
In the event that (a) the Company fails to provide such
security interest within the said period of 30 days (b) the
Registered Holder converts this Note pursuant to Condition 3
and immediately sells all of the Shares arising on
conversion at the current market price of the Shares and (c)
the proceeds (less reasonable brokerage) realised upon such
sale is less than the principal sum of this Note, then and
in such event the Company shall on demand pay to the
Registered Holder an amount equal to the difference between
such proceeds and the principal sum of this Note.
2. REPAYMENT
(A) Subject to clause 3 and sub-clause (B) below, the principal
amount of this Note shall be repaid at par on the expiry of
nine months from the date of issue of this Note together
with interest accrued thereon (less tax) to the date of
repayment.
(B) The Company may repay the principal amount of this Note,
together with accrued interest, at any time.
3. CONVERSION
(A) Subject to clause 3(E), the Registered Holder may elect, at
any time prior to repayment of the Note, to convert the
whole of this Note (but not less than the whole of this
Note) into common stock of the Company (the "Shares") by
giving written notice of such election to the Company in
accordance with clause 3(E).
(B) Upon receipt of the written notice from the Registered
Holder, the Company shall issue the Shares in accordance
with clause 3(C) to the Registered Holder within 14 days of
receipt of such written notice from the Registered Holder.
<PAGE>
(C) The number of the Shares to be issued to the Registered
Holder by the Company shall be equal to the aggregate of the
principal amount of this Note up until and including the
Trading Day before the date on which the Shares are issued
to the Registered Holder, divided by a price per Share equal
to the "Conversion Price" as defined in clause 3(D).
Accrued interest will be paid up to and including the date
on which the Shares are issued. If the number of Shares to
be issued under this clause is not a whole number, it shall
be rounded to the nearest whole number. For purposes of
this Note, the term "Trading Day" means:
(a) a day on which the Company's common stock is traded on
The Nasdaq National Market or principal stock exchange
on which the common stock has been listed; or
(b) if the common stock is not listed on The Nasdaq
National Market or any stock exchange, a day on which
the common sock is traded in the over-the-counter
market, as reported by The NASDAQ Stock Market; or
(c) if the common stock is not quoted on The NASDAQ Stock
Market, a day on which the common stock is quoted in
the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar
organisation or agency succeeding its functions of
reporting prices).
(D) For the purposes of clause 3(C), the Conversion Price shall
be a price per Share equal to 80% of the Per Share Market
Value on the Trading Day immediate preceding the date of
this Note. For purposes of this Note, the term "Per Share
Market value" means on any particular date:
(a) the last sale price per share of the Company's common
stock on such date on The Nasdaq National Market or
other stock exchange on which the common stock has been
listed or if there is no such price on such date, then
th last price on such exchange on the date nearest
preceding such date; or
(b) if the common stock is not listed on The Nasdaq
National Market or any stock exchange, the average of
the bid and asked price for a share of common stock in
the over-the-counter market, as reported by the NASDAQ
Stock Market at the close of business on such date; or
(c) if the common stock is not quoted on The NASDAQ Stock
Market, the average of the bid and asked price for a
shares of common stock in the over-the-counter market
as reported by the National Quotation Bureau
Incorporated (or similar organisation or agency
succeeding to its functions of reporting prices).
<PAGE>
(E) In the written notice given in accordance with clause 3(A),
the Registered Holder shall:
(a) acknowledge that this Note and the Shares have not and
will not be registered under the Act and may not be
offered or sold in the United States or to "US persons"
(as that term is defined in Rule 902(o) of Regulation S
of the US Securities and Exchange Commission) unless
they are registered under the Act, or an exemption from
the registration requirements of the Act is available;
and
(b) undertake that it will not take a short position in
common stock of the Company or engage in any hedging
transaction with respect to the Shares prior to the
expiration of 40 days after the issuance of the Shares
to the Registered Holder.
(F) The issue of the Shares by the Purchaser to the Registered
Holder in accordance with this clause shall satisfy all of
the Purchaser's obligations under this Note and the
Purchaser shall have no further liability to repay any
principal or pay any interest to the Registered Holder.
4. EVENTS OF DEFAULT
The principal amount of this Note together with interest
accrued thereon (less tax) shall become immediately due and
repayable upon written demand by the Registered Holder of
this Note following the happening of any of the following
events:
(a) if the Company fails to pay within 14 days of the due
date any monies payable on or in respect of the Note;
or
(b) if the Company fails to issue any of the Common Stock
within 14 days of the due date under these Conditions
after compliance by the Registered Holder of the terms
and conditions of clause 3; or
(c) if any order is made or an effective resolution passed
for winding-up the Company (other than a solvent
winding-up for the purposes of amalgamation or
reconstruction); or
(d) if an encumbrancer takes possession or any
administrator or administrative or other receiver is
appointed of the whole or a substantial part of the
assets or undertaking of the Company.
<PAGE>
5. INTEREST
(a) Subject to clause 3, this Note bears interest from and
including the date of issue of this note and such interest
will be payable monthly, in arrears, in respect of the
period from the date of this Note up to and including the
date or repayment of the principal amount of this Note.
(b) Interest will cease to accrue on this Note (or, in the case
of partial repayment, on the amount to be repaid) on the
date of repayment thereof.
(c) The rate of interest payable on this Note will be seven per
cent. per annum.
6. TITLE
The Registered Holder will be regarded as exclusively
entitled to the benefit of this Note and all persons may act
accordingly, and the Company shall not be bound to enter in
the Register notice of any Trust or to recognise any right
in any other person, save as herein provided or as ordered
by a Court of competent jurisdiction.
7. TRANSFERS
The Note may not be transferred or assigned either in whole
or in part.
8. PAYMENTS
(A) The receipt of the Registered Holder hereof for such
principal sum and interest shall be a good discharge to the
Company for the same.
(B) In respect of any payment on this Note, a bank draft drawn
on the Company's bankers, payable to the order of the
Registered Holder hereof, will be sent by post to the
registered address of such Holder and the Company shall not
be responsible for any loss in transmission and the payment
of the warrant or cheque shall be a good discharge to the
Company for payment of the amount for which it was drawn.
9. UNLISTED SECURITY
No application will be made for a listing for or permission
to deal in this Note upon any Stock Exchange (in the United
Kingdom, the United States of America or elsewhere) or any
alternative securities market and the Note shall not be
offered to the public for subscription or purchase.
<PAGE>
10. NOTICES
(A) A notice may be served by the Company upon the Registered
Holder by sending it through the post in a pre-paid envelope
addressed to him or them at the registered address of such
Registered Holder.
(B) A notice may be served by the Registered Holder of this Note
upon the Company by sending it through the post in a pre-
paid envelope addressed to the Company at its registered
office for the time being.
(C) Any notice served by post shall be deemed to have been
served at the expiration of four business days after it is
posted and in providing such service it shall be sufficient
to prove that the envelope or wrapper containing the notice
was properly addressed and stamped and put into the post.
11. NO VOTING RIGHTS
The Registered Holder shall not be entitled, by virtue of
this Note, to vote or receive dividends or distributions or
be considered a shareholder of the Company for any purpose,
nor shall anything in this Note be construed to confer on
the Registered Holder, as such, any rights of a shareholder
of the Company or any right to vote, to give or withhold
consent to any corporate action, to receive notice of
meetings of shareholders or to receive dividends,
distributions or subscription right or otherwise.
12. GOVERNING LAW
This Note will be construed in accordance with English Law.
<PAGE>
EXHIBIT C
AGREEMENT WITH RESPECT TO GROUP FILING
THIS AGREEMENT is made as of this 8th day of January, 1996 by and
among the undersigned parties.
WHEREAS, pursuant to Rules 13d-1 and 13d-2 of the Securities and
Exchange Commission (the "SEC"), under the Securities Exchange Act of 1934,
as amended (the "Act"), each of the undersigned parties is obligated to file
with the SEC, and from time to time to file with the SEC amendments to, a
Schedule 13D relating to shares of the Common Stock, no par value, of
Alpharel, Inc., a California corporation.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as
follows:
The parties, from time to time, will file one statement containing
the information required by Schedule 13D on behalf of each of them in
satisfaction of the obligation of each of them under Rules 13d-1 and 13d-2 of
the SEC. Each party is responsible for the completeness and accuracy of only
that information relating to him or its respective executive officers and
directors and controlling persons, and is not responsible for the
completeness or accuracy or any information concerning any other party. The
execution of any statement by each party shall constitute a representation by
such party that it neither knows nor has reason to believe that any
information concerning any other party contained in such statement is
inaccurate at the time of such execution.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the undersigned have signed this Agreement or
caused this Agreement to be executed by its duly authorized officers as of
the date first above written.
DOCUMENT MANAGEMENT SYSTEMS LIMITED
By: /s/ BRIAN J. PIERCE
-----------------------------------
Its: Director
----------------------------------
THE MAJOR TRUST
By: UNION TRUST COMPANY LIMITED
Its: Trustee
By: /s/ PETER E.F. NEWBALD
------------------------------
Its: Director
-----------------------------
UNION TRUST COMPANY LIMITED
By: /s/ PETER E.F. NEWBALD
-----------------------------------
Its: Director
----------------------------------
/s/ BRIAN JOHN PIERCE
---------------------------------------
BRIAN JOHN PIERCE
/s/ PETER EDWARD FRANCIS NEWBALD
---------------------------------------
PETER EDWARD FRANCIS NEWBALD
2
<PAGE>
/s/ RICHARD JOHN STOBART PROSSER
---------------------------------------
RICHARD JOHN STOBART PROSSER
/s/ IAN ROBERT RICHARDSON
---------------------------------------
IAN ROBERT RICHARDSON
/s/ JAMES NORMAN HENRY BENNETT
---------------------------------------
JAMES NORMAN HENRY BENNETT
3
