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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
December 20, 1997
Date of Report
(Date of earliest event reported)
ADVANCED DEPOSITION TECHNOLOGIES, INC
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-12230 04-2865714
(Commission File Number) (IRS Employer Identification No.)
Myles Standish Industrial Park
580 Myles Standish Blvd.
Taunton, Massachusetts, 02780
(Address of principal executive offices) (Zip Code)
(508) 823-0707
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
------------------------------------
On December 20, 1997, Advanced Deposition Technologies, Inc. ("ADT")
purchased (the "Acquisition") 65% of the capital stock of Alexander Boxall,
S.A., a corporation organized under the law of Spain ("ABSA"). ABSA manufactures
and distributes AC capacitor components for lighting and motors. The Acquisition
is being accounted for as a purchase whereby ADT will be deemed to have acquired
ABSA for financial reporting purposes. ADT intends to continue to use the assets
of ABSA to manufacture and distribute AC capacitor components.
ADT purchased 50% of the capital stock of ABSA from Pedro Nunez-Barranco
Guembe and the remaining 15% from Alexander Peter Boxall. The remaining 35% of
ABSA is owned by Mr. Boxall.
In conjunction with the Acquisition, ADT paid Mr. Nunez-Barranco Guembe
$2,800,000 and agreed to pay Mr. Nunez-Barranco Guembe $990,000, plus interest
accruing at 5.39% per annum, on December 19,1999, in exchange for his shares in
ABSA. In conjunction with the Acquisition, ADT issued to Mr. Boxall 280,000
shares of its common stock in exchange for 15% of the shares in ABSA. The
280,000 shares were issued from treasury stock and represent 6.6% of ADT's
outstanding stock after the Acquisition.
Effective upon the closing of the Acquisition, ADT expanded its Board of
Directors from six to seven members and appointed Mr. Boxall to fill the vacancy
created by such expansion. Mr. Boxall will be the Managing Director of ABSA.
Effective upon the closing of the Acquisition, three executive officers of ADT
were elected to ASBA's five-member Board of Directors. The remaining directors
are Mr. Boxall and his wife, Maria Franchesca Martinez Vegas.
ADT develops, manufactures, markets and sells standard and proprietary
metallized films for energy management applications, primarily within the
electronics and microwave food packaging industries. ADT sells film to ABSA for
use in ABSA's capacitor components. In ADT's 1995, 1996 and 1997 fiscal years,
ADT sales to ABSA amounted to approximately $2,620,000, $453,000 and $602,000,
respectively. There are no other material relationship between ADT (or any of
ADT's affiliates, officers or directors (or any associates thereof))and ABSA or
the sellers.
To consummate the Acquisition, ADT used $1,800,000 of its working capital,
plus a $1,000,000 term loan (the "Term Loan")from its primary lender, National
Bank of Canada. The Term Loan, plus accrued interest, are due and payable in
June 1998 and are secured by all of ADT's assets, including a pledge of the
shares of ABSA acquired in the Acquisition.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of business acquired.
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Audited financial statements of ABSA, and the notes thereto, required by
this Item will be filed by amendment to this Form 8-K not later than March 6,
1998.
(b) Pro forma financial information.
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The pro forma financial information required by this Item will be filed by
amendment to this Form 8-K not later than March 6, 1998.
(c) Exhibits.
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The following exhibits are filed as part of this report pursuant to Item
601 of Regulation S-K:
Exhibit 2.1 Share Purchase Agreement, dated December 19, 1997,
between ADT and Pedro Nunez-Barranco Guembe
Exhibit 2.2 Share Purchase Agreement, dated December 19, 1997,
between ADT and Alexander Peter Boxall
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 5, 1998 ADVANCED DEPOSITION TECHNOLGIES, INC.
/s/ Mark Thomas
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Mark Thomas
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit 2.1 Share Purchase Agreement, dated December 19, 1997,
between ADT and Pedro Nunez-Barranco Guembe
Exhibit 2.2 Share Purchase Agreement, dated December 19, 1997,
between ADT and Alexander Peter Boxall
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EXHIBIT 2.1
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SHARE PURCHASE AGREEMENT
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In Madrid, on December 19, 1997.
APPEAR
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(1) On the one part:
Mr. Alexander Peter Boxall, of British nationality, of legal age, married,
with domicile at Urbanizacion Monte Rozas, and passport number 740049961,
in force.
(2) On the other part:
Mr. Glenn J. Walters, of American nationality, of legal age, married, with
domicile at 61 Crescent Street, Duxberry, Massachusetts, USA, and Passport
Number P-102507232.
THEY INTERVENE
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(1) Mr. Alexander Peter Boxall, (hereinafter, the "VENDOR"), in his own name
and on his own behalf.
(2) Mr. Glenn J. Walters on behalf of ADVANCED DEPOSITION TECHNOLOGIES,
INC. (hereinafter, "ADT" or the "PURCHASER"), an American company,
incorporated under the Laws of Delaware, with registered address in 1290
Orange Street, Wilmington, Delaware. He is empowered to execute this deed
by virtue of a special power of attorney granted thereto by Mr. Mark R.
Thomas dated December 12, 1997 before the Notary Public of Massachusetts,
Mr. Albert A Ferreira, in English and Spanish, duly legalized by means of
an apostle pursuant to The Hague Convention of October 5, 1961.
RECITALS
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I. The Vendor is the absolute legal owner of 3,150 shares of ABSA, numbers 501
to 800, both inclusive, and numbers 11,001 to 13,850, both inclusive,
representing fifteen per cent (15%) of ABSA's share capital, with all
rights attached thereto and free of any liens, charges, third party rights
or restrictions to transfer (hereinafter, the "SHARES"), represented by
means of a multiple certificate ("titulo multiple").
II. The Shares are fully subscribed and paid-up as follows:
- Shares numbers 501 to 800 fully paid;
- Shares numbers 11,001 to 17,000 paid in a 25%, i.e., 250 Pesetas
each.
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III. The Vendor acquired the Shares as follows:
a) Shares numbers 501 to 800, by subscription, by means of the Public
Deed of Incorporation of Alexander Boxall, S.A. executed on November
26, 1979 before the Notary Public of Madrid Mr. Roberto Blanquer
Uberos, file number 2,813.
b) Shares numbers 11,001 to 17,000 by subscription, by means of the
Public Deed of share capital increase, executed on May 25, 1988,
before the Notary Public of Madrid Mr. Robert Blanquer Uberos, file
number 1,802.
VI. The two parties are interested in entering into this Share Purchase
Agreement, which shall be governed by the following:
CLAUSES
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1. PURPOSE
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1.1 The Vendor hereby transfers the Shares to the Purchaser, who purchases and
acquires, the Shares, with all the rights attached thereto and free from
any liens, charges, third party rights or restrictions on their
transferability.
1.2 The Vendor hereby transfers the Shares to the Purchaser by means of the
delivery of a multiple certificate representing the Shares.
2. PRICE
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2.1 The parties agree to a total purchase price of US$1,120,000 (the "PRICE").
2.2. The Purchaser pays to the Vendor in this act the total Price by means of
the transfer of title to 280,000 unregistered common shares of the
Purchaser with a market value of US$4 each (the "ADT SHARES") by means of
the delivery of a common stock certificate representing the ADT Shares. The
Vendor expressly acknowledges receipt in this act of the Price, this deed
serving as a receipt for full payment of the Price.
3. NON OBLIGATION TO REPAIR DAMAGES
--------------------------------
3.1 The Purchaser has carried out a legal and tax audit of ABSA in all aspects
and declares that it is aware of all the information disclosed during this
audit, in particular the lack of the opening license of the factory located
in Ciudad Industrial de Parla, a circumstance which it assumes for its own
account and risk. Consequently, the parties agree that no repair of damages
for defects, whether apparent or hidden, shall apply and the Purchaser
hereby expressly waives any right to any action it may be entitled to in
this respect, except as provided for in Clause 4 below.
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3.2 The Vendor will not be liable for any past or future contingency or fact
affecting ABSA or the value of the Shares, except for tax contingencies, as
provided for in Clause 4 below.
4. TAX CONTINGENCIES
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4.1 If, as a result of a tax audit or any other act of the tax authorities,
which must not be triggered by ABSA or by the Purchaser directly or
indirectly in any case, ABSA is held liable for tax debts derived from
facts occurred in the tax years 1995, 1996 or within the period stating on
January 1, 1997 and ending on the date hereof the Vendor will reimburse ADT
or will pay to the tax authorities, a 15% of the amount assessed in
accordance with the procedure described below.
4.2 If ABSA receives any tax notice from which tax liabilities might arise, the
Vendor will notify the Purchaser within the shorter of the following two
periods: (i) eight business days or (ii) the first half of the term granted
by the Spanish Tax Authorities.
4.3 Until the matter is finally solved, the parties will cooperate, act
jointly, exchange all information available, and try to minimize the tax
liability of ABSA. The Vendor will be allowed to appoint, at his cost, an
independent advisor who will participate in the procedure along with the
one appointed by ABSA and/or the Purchaser, if any. At the option of the
Vendor, ABSA will use all appeals available in the administrative-judicial
and judicial procedures. In those procedures, the Vendor will provide, at
his own cost, any guaranties or bonds which might be necessary to suspend
enforcement up to 15% of the assessed debt.
The party which, against the express opinion of the other party, decides
not to consent the tax inspection and/or challenge the tax assessment made,
will be liable for any damages caused to the other party as a result of the
administrative judicial and judicial procedures initiated against his
opinion.
5. MISCELLANEOUS
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5.1 The letter of intent executed between the parties on October 24,1997 shall
be understood as novated and substituted hereby, except with respect to the
confidentiality covenant contained therein.
5.2 No variation of this Share Purchase Deed shall be valid unless it is made
in writing and signed by or on behalf of each of the parties.
5.3 The failure to exercise or delay in exercising a right or remedy under this
Share Purchase Deed shall not constitute a waiver of the right or remedy or
a waiver of any other rights or remedies and no single or partial exercise
of any right or remedy under this Share Purchase Deed shall prevent any
further exercise of any other right or remedy.
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5.4 The invalidity, illegality or unenforceability of any provision of this
Share Purchase Deed shall not affect or impair the continuation in force of
the remainder of this Share Purchase Deed. Furthermore, in lieu of any such
invalid, illegal or unenforceable term or provision, the parties intent is
that there shall be added as a part of this Share Purchase Deed a provision
as similar in terms to such invalid or unenforceable provision as may be
possible and be valid and enforceable.
5.5 For the purposes of this Share Purchase Deed, every day of the year except
Sundays and holidays in tile cities of Madrid or Boston shall be deemed
business days.
6. CONFIDENTIALITY
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6.1 The parties agree to keep confidential the terms of this Share Purchase
Deed, as well as all undertakings or obligations assumed hereunder unless
required by any applicable law or regulation. If any applicable law or
regulation currently in force requires the publication or disclosure of any
information concerning this Share Purchase Deed, the party compelled to
make such publication or to disclose such information shall give prior
notice to the other party of the need to do so, and such party may not
object to it.
6.2 Notwithstanding the confidentiality obligation assumed by the parties in
the preceding paragraph, the parties may reveal to their managers and
employees those aspects of the present Share Purchase Deed that they deem
necessary for its fulfillment and the Purchaser may disclose it to any
potential assignee of its fights hereunder or to any potential purchaser of
the Shares or of any shares in the Company or in the Subsidiary.
6.3 None of the parties will make any press release or other public disclosures
related to this Share Purchase Deed or other transactions contemplated
hereby, without the written consent of the other party, except when the
parties are under an obligation to release specific information pursuant to
existing laws or regulations. In particular, the Vendor acknowledges that
the Purchaser, as a publicly traded company, may be required to make press
releases and/or other public disclosures regarding this Share Purchase Deed
and any transaction contemplated herein.
7. EXPENSES AND TAXES
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7.1 Each party will bear 50% of the taxes, costs and expenses arising from the
execution of this Share Purchase Deed.
7.2 Taxes shall be borne by the parties in accordance with applicable law.
8. NOTICES
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8.1 All notices between the parties relating to or arising from this Share
Purchase Deed shall be made by mail or by facsimile unless otherwise
provided for herein. If made by
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facsimile, the notices shall be deemed valid, and binding, provided that
the facsimiles are signed by an authorized officer of the counterpart.
8.2 The parties have designated the following addresses notices:
The Purchaser
Myles Standish Industrial Park,
Taunton, Massachusetts, 02780 USA
Tel. 508-823 0707
Fax. 508-823 4434
Attn. Mr. Glenn J. Walters, President
The Vendor
DNA EXPORT, S.L.
C/Hermosilla 43
28001 Madrid
Tel. 34-1-435-7770
Fax. 34-1-431-6063
Attn. Mr. Alexander Boxall
8.3 Any notice sent to the above referenced addresses will be deemed to be
received by the addressee, except if prior to the sending of such notice
the addressee had notified the sender a change of address or telefax
numbers.
9. GOVERNING LAW AND ARBITRATION
-----------------------------
9.1 This Share Purchase Deed shall be governed by and construed in accordance
with the laws of the Kingdom of Spain.
9.2 Any disputes arising under this Share Purchase Deed shall be definitively
resolved according to the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by three (3) arbitrators named in
accordance with the said rules. Where no arbitrator is named in the request
for arbitration or within thirty (30) days from receipt of the request, the
aforesaid arbitrator shall be appointed by the International Chamber of
Commerce. The chairman of the Arbitration Tribunal shall be appointed by
the two co-arbitrators and, where thirty (30) days after the appointment of
the second arbitrator the co-arbitrators have not reached an agreement, the
chairman of the Arbitration Tribunal shall be appointed by the
International Chamber of Commerce. The arbitration shall be an arbitration
at law, the arbitration proceedings shall be conducted in the city of
Madrid, and the language of the arbitration proceeding shall be English.
The parties undertake to comply with the arbitration award.
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As an expression of their consent, the parties, either directly or through their
authorized representatives, execute this Share Purchase Deed and initialize its
pages and annexes at the place and on the date first above written.
ADVANCED DEPOSITION Alexander Peter Boxall
TECHNOLOGIES, INC.
/s/ Glenn J. Walters /s/ Alexander Peter Boxall
__________________________ _____________________________
Glenn J. Walters Alexander Peter Boxall
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EXHIBIT 2.2
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SHARE PURCHASE AGREEMENT
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In Madrid, on December 19, 1997.
APPEAR
On the one part, Mr. Pedro Nunez-Barranco Guembe, of Spanish nationality, of
legal age, separated, with domicile at C/Dalia, 375, Alcobendas, Madrid, and Tax
Identification Number ("N.I.F.") 5.590.151 R.
On the other part, Mr. Glenn J. Walters, of American nationality, of legal age,
married, with domicile at 61 Crescent Street, Duxberry, Massachusetts, USA, and
Passport Number P- 102507232.
THEY INTERVENE
Mr. Pedro Nunez-Barranco Guembe, (hereinafter, the "VENDOR"), in his own name
and on his own behalf.
Mr. Glenn J. Walters on behalf of ADVANCED DEPOSITION TECHNOLOGIES, INC.
(hereinafter "ADT" or the "PURCHASER"), an American company, incorporated under
the Laws of Delaware, with registered address in 1290 Orange Street, Wilmington,
Delaware. He is empowered to execute this deed by virtue of a special power of
attorney granted thereto by Mr. Mark R. Thomas dated December 12, 1997 before
the Notary Public of Massachusetts, Mr. Albert A. Ferreira, in English and
Spanish, duly legalized by means of an apostle pursuant to The Hague Convention
of October 5, 1961.
RECITALS
I. The Vendor is the absolute legal owner of 10,500 bearer shares of ALEXANDER
BOXALL, S.A. (hereinafter, "ABSA"), grouped in a sole series, numbers l to
500, both inclusive, and number 1,001 to 11,000, both inclusive, with a
face value of Pesetas 1,000 each, representing fifty per cent (50%) of
ABSA's share capital.
II. The shares are represented by means of a global certificate and are free of
any liens, charges, third party rights or restrictions to transfer, and
they do not entail any ancillary performances. The shares numbered 1 to 500
are fully subscribed and totally paid up. The shares numbered 1,001 to
11,000, were fully subscribed and paid-up in a twenty-five per cent (25%).
The Vendor undertakes hereby to pay in all the outstanding amount,
representing Pesetas 7.500,000 within three (3) days from the date
hereof.
III. The Vendor acquired the shares by the following means:
a) Shares numbers I to 300, by subscription, by means of the Public Deed
of Incorporation (of Alexander Boxall, SA.) executed on November 26,
1979 before the Notary Public of Madrid Mr. Roberto Blanquer Uberos,
file number 2,813.
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b) Shares numbers 301 to 500, by means of the Public Deed of winding up
of the marriage community of assets ("escritura de liquidation y
adjudication de gananciales"), executed on April 24, 1985, before the
Notary Public of Madrid, Mr. Jess del Fraile Sarmiento, file number
596.
c) Shares numbers 1,001 to 11,000, by subscription, by means of the
Public Deed of share capital increase, executed on May 25, 1988,
before the Notary Public of Madrid Mr. Robert Blanquer Uberos, file
number 1,802.
IV. Article 108 of the Spanish Law on the Securities Market is not applicable
to this Share Purchase Agreement.
V. Both parties are interested in entering into this Share Purchase Agreement,
which shall be governed by the following
CLAUSES
1. PURPOSE
The Vendor hereby sells and transfers his shares in ALEXANDER BOXALL S.A.,
to the Purchaser, who purchases and acquires them as described above and
under the conditions set forth herein. In this act, the global certificate
representing the shares is delivered to the Purchaser.
2. PRICE
The purchase price is three million seven hundred ninety thousand dollars
(US$ 3,790,000), to be paid as follows:
a) US$ 2,800,000 are paid by means of the delivery of two banker checks
of the Citibank Madrid branch number 33 which are delivered to the
Vendor in this act, this Share Purchase Agreement serving as a receipt
for payment of such amount. A photocopy of the checks is attached
hereto as Annex 1.
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b) US$ 990,000 shall he payable by means of the delivery of a banker
check for the foregoing amount, on the second anniversary from the
date hereof. Interest shall accrue on the deferred payments at an
interest rate of 5.39%, resulting in an amount of US$109,598 that
shall be paid together with the remaining part of the price.
Early maturity of the term shall occur and payment of the deferred installment
shall be immediately demanded, in the event that the Purchaser seeks relief
under bankruptcy or suspension of payments proceedings, or admits his inability
to pay his liabilities in due time. Interest shall accrue up to the time of
early maturity. Notwithstanding, in the event that the deferred portion of the
price is not paid when due, in whole or in part, the unpaid amount shall accrue
interest the legal interest rate applicable at that time.
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3. GUARANTEES GRANTED BY THE PURCHASER FOR THE DEFERRED PAYMENT
3.1 In case of unpayment of the deferred portion of the purchase price, the
Vendor may choose:
(i) to request payment of the price in cash together with the accrued
interest, plus the legal interest applicable at that time plus
US$340,000, as a penalty; or
(ii) to terminate the sale and purchase, in which case the Purchaser shall
be bound to return to the Vendor shares of Alexander Boxall, S.A.
representing 50% of its share capital and with a value equal to the
total purchase price. In this case, the Vendor shall be obliged to
reimburse to the Purchaser the portion of the Price paid hereby,
notwithstanding the Vendor's right to request damages.
3.2. The price will be considered to have been unpaid in the event that, once
the term has expired, no payment has been made or when, the Purchaser being
bound to make the discount referred to in clause 5.5.1 below, the Purchaser
has not made the bank deposit of the discounted amount and has not
fulfilled the remaining obligations set forth in clauses 5.5.1 through
5.5.6 below.
4. EXCLUSION OF OBLIGATION TO REPAIR DAMAGES
The Vendor will not be liable for any past or future contingency or fact
affecting ABSA or the value of the shares, Consequently, and except as set
forth in clauses 5 below. no repair of damages for defects, whether
apparent or hidden shall be applicable and the Purchaser expressly waives
any right to any action it may be entitled in this respect.
5. TAX LIABILITIES
5.1 As an exception to clause 4 above, if, as a result of a tax audit or any
other act of the tax authorities, which must not be triggered by ABSA or by
the Purchaser directly or indirectly in any case, ABSA is held liable for
tax debts derived from facts occurred in the tax years 1995, 1996 or within
the period starting on January 1, 1997 and ending on the date hereof, the
Vendor will reimburse ADT or will pay to the tax authorities, a 50% of the
amount assessed in accordance with the procedure described below.
5.2 Before drawing up the 1997 financial statements, the panics will negotiate
in good faith so that the account entries of ABSA reflect in the most
appropriate way the economic facts of ABSA, and to avoid tax errors or
contingencies, for facts occurred during the in the tax years 1995, 1996 or
within the period starting on January 1, 1997 and ending on the date
hereof; Will try that the accounts be prepared in a correct way.
Notwithstanding, the final decision of the approval of the accounts will
correspond to the directors of ABSA at the given time.
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5.3 If ABSA receives any tax notice from which tax liabilities might arise for
facts occurred during the in the tax years 1995, 1996 or within the period
starting on January 1, 1997 and ending on the date hereof that should have
been paid before the date hereof , it will notify the Vendor within eight
business days or within half the period granted by the tax authorities if
shorter, in order to allow the Vendor to make up his mind on the notice.
5.4 From that time and until the matter is finally solved, the parties will act
jointly, will exchange all information, and will try to minimize the tax
liability. The Vendor will be allowed to appoint, at his cost, an
independent advisor who will participate in the procedure along with the
one appointed by ABSA, if any. At the option of the Vendor, ABSA will use
all appeals available in the administrative-judicial and judicial
procedures. In those procedures, the Vendor will provide the guaranties or
bonds which might be necessary to suspend enforcement up to 50% of the
assessed debt.
The party which, against the express opinion of the other party, decides
not to consent the tax inspection and/or challenge the tax assessment made,
will be liable for any damages caused to the other party as a result of the
administrative-judicial and judicial procedures initiated against his
opinion.
5.5 If at maturity of the payment of the installment set forth in clause 2b)
above, there is a tax procedure not finalized or open due to an outstanding
appeal, the following rules will apply:
5.5.1. If on the payment date of the deferred installment there is no tax
assessment, ADT will pay the Vendor the amount of the installment
less the amount which in the opinion of the auditing firm Price
Waterhouse Madrid at that time represents 50% of the tax
contingency. Should Price Waterhouse not be able to quantify the
tax contingency before the date of the payment of the installment,
either party request Arthur Andersen Madrid to quantify the
contingency within a maximum of 30 days. In this case, the amount
to be deducted from the installment will be the one quantified by
Arthur Andersen. If Arthur Andersen fails to quantity the
contingency within the aforesaid 30 days, the amount to be
deducted shall be the countervalue of 42.000.000 Ptas. The fees of
Price Waterhouse and Arthur Andersen, if any, will be paid by the
party which assessment of the tax contingencies differs in a
bigger amount from the final assessment of the auditors. If the
tax assessment had been made, the amount to be deducted from the
price will be 50% of the assessment less the amount that might
have been guaranteed by the Vendor according to Clause 5.4 above.
5.5.2. ADT will deposit the amount referred to in Clause 5.5.1. with a
Spanish reputable bank, having a branch in Madrid, in an account
remunerated and Liquid.
5.5.3. ADT will provide the bank with irrevocable instructions at the
time of the deposit in the sense that the deposited amount, along
with the accrued interest, corresponds to the Vendor and must be
used only for the payment of the tax liabilities of the Vendor,
i.e., fifty per cent (50%) of the total tax liability.
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5.5.4. In order to limit the use of the deposit, ADT will inform the bank
about the exact tax procedure which is outstanding, because if
there is not any started by the authorities directly, neither a
discount from the price nor the deposit will be made.
5.5.5. ADT will instruct the bank so that the deposited amount, along
with the accrued interest, only may he withdrawn (i) by agreement
of the two parties, or (ii) to the party or parties determined by
the arbitral award the arbitral award rendered under the procedure
referred to in Clause 11.2 below; or (iii) against delivery by the
Vendor or the Purchaser of a final resolution condemning ABSA to
pay tax liabilities corresponding to fiscal years 1995, 1996 or
the period from January 1, 1997 to the date hereof. In this latter
case, the bank shall only deliver the deposited amount and accrued
interest by means of a check in favor of the tax authorities or by
means of a bank transfer to the tax authorities.
5.5.6. ADT will deliver to the Vendor, within 30 days from the date of
maturity of the installment, a copy of the document issued by the
bank acknowledging receipt of the funds and the instructions given
to the bank.
5.5.7. Any breach by ADT of what is contemplated in Clauses 5.5.1 to
5.5.6 above will be considered to be a breach of its obligation to
pay the installment. ADT will not be authorized to withdraw or
postpone payment except in accordance with Clause 5.5.1 above.
6. NON COMPETITION
6.1 The Vendor undertakes not to carry out anywhere in the world, directly or
through other individuals or entities, any competing activities against
ABSA, within five (5) years from the date of this agreement,
notwithstanding to what is established in Clause 6.3. For these purposes,
an activity will be deemed to be a competing one, if it consists of the
manufacturing and marketing of motor and lighting capacitors.
6.2 The Purchaser will not carry out in Spain and Chile, directly or through
other individuals or entities, in particular ABSA, any competing activities
against the Vendor or related entities (such as DNA Energia S.A. and
Condensadores DNA Chile Limitada), within five (5) years from the date of
this Agreement. For these purposes, an activity will be deemed to be a
competing one, if it consists of the manufacturing and marketing of three
phase power capacitors, self-regulated batteries, and auxiliary and
accessories for reactive energy.
6.3 The Purchaser will not be allowed, directly or through other individuals or
entities, and in particular ABSA, during five (5) years, to compete with
Condensadores DNA Chile Limitada or related entities regarding the
manufacturing and sale of motor and lighting capacitors in Chile, Colombia,
Bolivia, Peru, Ecuador and Venezuela.
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7. USE OF THE DNA TRADEMARK
7.1 Notwithstanding that today the Vendor transfers to ABSA his share in the
DNA trademark, which is registered in Spain, that trademark can be used
within five (5) years from the date of this agreement by DNA Energia S.A.
for three phase power capacitors, self regulated batteries, regulators and
accessories for reactive energy, according to the terms provided for in the
licensing agreement entered into between ABSA and DNA ENERGIA, S.A.
7.2 Condensadores DNA Chile Limitada is the registered owner of the trademark
DNA in several countries of South America. The Vendor undertakes to cause
it to cease the use of that trademark within five (5) years. Until that
time, it wilt be authorized to use it for three phase power capacitors,
auxiliary equipment and accessories for reactive energy. It will also be
allowed to use it for three phase power capacitors manufactured in Chile
8. TEMPORARY SUPPLY TO DNA ENERGIA AND CONDENSADORES DNA CHILE
8.1 The purchaser undertakes to cause ABSA to supply DNA Energia S.A. and
Condensadores DNA Chile Limitada, within the period normally applied to its
ordinary customers, with the products that ABSA has being supplying until
now to these two companies, and on an amount equal to the total amount
invoiced during 1997, with a 20% upward or downward variation.
8.2 This supply obligation shall have a six (6) month period, which may be
automatically extended for another six (6) month period as an option of the
supplied companies, which may cancel the commercial relation with a prior
written notice of two months, before the expiration of the initial six (6)
month period.
8.3 The supplies' price, including those effected before the execution of this
agreement, shall be paid within the 120 day period following delivery. The
supplies effected after the execution of the agreement shall be subject to
the prices table signed by both parties on the date hereof and attached as
Annex 2. The Vendor hereby personally guarantees any amounts now or in the
future due by his two companies with respect to products supplied by ABSA.
9. CONFIDENTIALITY
9.1. The parties will keep confidential all the information provided by one
part to the other, directly or through his directors, officers, employees,
advisors or auditors, regarding this Agreement or the due diligence review,
with due diligence, unless such information is available to the public,\\
and the parties will notify to their respective directors, employees or
other representatives having access to such information. the aforesaid
confidentiality obligation.
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9.2. Neither party will make any press release or of any other public
announcement regarding this Agreement or the transactions contemplated
hereby without the written consent of the other party, unless the parties
are bound to release specific information pursuant to existing applicable
regulations. In particular, the Vendor acknowledges that ADT, as a
publicly traded company, may be required to make press releases and/or
other public disclosures regarding the transaction.
10. MISCELLANEOUS
10.1. Language:
--------
This agreement is executed in both the English and Spanish languages,
having both languages the same authority. In case of any discrepancies
between the English and the Spanish versions, the literal interpretation
rule should be avoided.
10.2. Previous acts of the parties:
----------------------------
The letter of intent dated October, 24, 1997 arid any other expression of
the parties will shall previous to this agreement, shall be understood as
novated and replaced hereby. Nevertheless, the Vendor expresses wish and
ADT its shall that the level and other labor conditions in ABSA shall be
maintained, should the market so permit, as it was expressed in the
letter of intent.
10.3. Notices:
-------
All notices between the parties could be made both in English and
Spanish, by facsimile or any other written support, addressed to:
a) ADT, Myles Standich Industrial park, Taunton, Massachusetts, 02780
USA, tel. 07.1.508.8230707, fax 07.1.508.8234434.
b) M. Pedro Nez-Barranco, c/ Colibries n4 Poligono Industrial Pinto
Estacion, 28320 Pinto, Espana. tel. 34.1.6916612, fax.
34.1.6912257.
10.4. Expenses and taxes
------------------
Taxes shall be borne by the parties in accordance with applicable law.
Costs and expenses derived from the intervention of a Public officer
("fedatailo publico") shall be paid by the Vendor and the Purchaser
equally, up to the limit, for ADT, of US$3,750.
10. GOVERNING LAW AND ARBITRATION
10.1 This agreement shall be governed by and construed in accordance with the
laws of the Kingdom of Spain.
10.2 Any disputes arising under this agreement between the parties that may
not be amicably solved between them, shall be definitively solved
according to the Rules of Conciliation
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and Arbitration of the International Chamber of Commerce. Each party
shall appoint an arbitrator, and these shall elect a third one, who shall
chair the Arbitration Tribunal. If one party, required by the other to
appoint an arbitrator, does not do it within a 30 calendar days period,
or if the arbitrators appointed by the parties do not reach an agreement
to appoint the third one within a 15 calendar days period, the
corresponding appointment shall be effected by the International Chamber
of Commerce. The arbitration shall be an arbitration at law, the
arbitration proceedings shall be conducted in the city of Madrid, and the
parties may use its own language, the arbitration award should be issued
both in English and Spanish with an identical authority. The parties
undertake to immediately comply with the arbitration award.
Notwithstanding the above, the Vendor will be entitled to enforce its payment
rights under clauses 2 and 3 above by judicial enforcement procedures.
ADVANCED DEPOSITION Pedro Nunez-Barranco Guembe
TECHNOLOGIES
/s/ Glenn J. Walters /s/ Pedro Nunez-Barranco Guembe
_______________________________ ________________________________
Glenn J. Walters Pedro Nunez-Barranco Guembe
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