<PAGE> 1
UNITED STATES
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
Date of Report (Date of earliest event reported) December 11, 1997
------------------------------
EPL Technologies, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 0-28444 84-0990658
- --------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of incorporation) File Number) Identification No.)
2 International Plaza, Suite 245, Philadelphia, PA 19113-1507
- --------------------------------------------------------------------------------
( Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 521-4400
------------------------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE> 2
ITEM 2. ACQUISITION OF ASSETS
On December 11, 1997, EPL Technologies, Inc. (the "Company") acquired
all of the issued and outstanding share capital of Fabbri Artes Graficas
Valencia S.A. ("Fabbri"), a Spanish company, through a newly formed, wholly-
owned subsidiary of the Company, EPL Technologies SL. Fabbri is based in
Valencia, Spain and is a converter, printer and marketer of specialty flexible
packaging, serving principally the southern European citrus fruit market. The
business was acquired from UK-based Sidlaw Group Plc, an English public company,
in a cash transaction valued at US $5,500,000 (825 million pesetas @ $1.00 -
150 pesetas). The Company will account for the Fabbri acquisition under the
purchase method of accounting.
2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND
EXHIBITS.
(a) Financial Statements of business acquired
It is impracticable to provide the Company's pro forma condensed
consolidated financial statements, together with the audited financial
statements of Fabbri required under Item 7(a) and (b) of Form 8-K at the time
this report on Form 8-K is required to be filed. In accordance with Item 7(a)
(4) and 7(b) (2) of Form 8-K, the Company will thus file the required financial
statements under cover of Form 8 as soon as practicable and in any event not
later than February 24, 1998.
(b) Pro forma financial information
See Item 7(a)
(c) Exhibits
2.1 Agreement for the sale and purchase of the entire issued share
capital of Fabbri Artes Graficas Valencia S.A., dated 11 December, 1997.
3
<PAGE> 4
SIGNATURES
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, thereunto duly authorized.
Dated: December ___, 1997 EPL Technologies, Inc.
By: /s/ Paul L. Devine
--------------------------
Paul L. Devine
Chairman and President
4
<PAGE> 5
EXHIBIT 2.1
Agreement for the sale and purchase of the entire issued share capital of Fabbri
Artes Graficas Valencia S.A., dated 11 December, 1997.
<PAGE> 6
DATED DECEMBER 11, 1997
-----------------------------------------------------
(1) SIDLAW GROUP PLC
(2) EPL TECHNOLOGIES SL
(3) EPL TECHNOLOGIES, INC
-----------------------------------------------------
AGREEMENT
FOR THE SALE AND PURCHASE OF THE
WHOLE OF THE ISSUED SHARE CAPITAL
OF FABBRI ARTES GRAFICAS VALENCIA, SA
-----------------------------------------------------
ASJ/SJSB/(0915629.20)04.12.97
DENTON HALL
FIVE CHANCERY LANE
CLIFFORD'S INN
LONDON EC4A 1BU
FAX: 0171-404-0087
TEL: 0171-242-1212
REF: 18209.00007
<PAGE> 7
CONTENTS
CLAUSE HEADING PAGE
1. INTERPRETATION................................................1
2. SALE AND PURCHASE.............................................4
3. CONSIDERATION.................................................5
4. COMPLETION....................................................5
5. REPRESENTATIONS AND WARRANTIES................................5
6. COMPETITION...................................................9
7. VENDOR'S AND PURCHASER'S UNDERTAKINGS........................11
8. DISCHARGE OF INDEBTEDNESS....................................12
9. WAIVER OF PRE-EMPTION RIGHTS.................................12
10. SECRECY......................................................12
11. ANNOUNCEMENTS................................................13
12. SALE OF THE PROPERTIES AFTER COMPLETION......................13
13. USE OF SIDLAW NAME etc.......................................13
14. INDEMNITIES..................................................14
15. GENERAL......................................................14
16. EXECUTION OF PUBLIC DEED, COSTS AND EXPENSES.................15
17. GUARANTEE....................................................15
18. NOTICES......................................................15
19. LAW..........................................................16
SCHEDULE I Particulars of the Company ..................
SCHEDULE II Representations and Warranties...............
Part I: Title and Ability to Sell......
Part II: Accounts.......................
Part III: Compliance.....................
Part IV: Contractual....................
Part V: Financial......................
Part VI: Trading........................
<PAGE> 8
Part VII: Corporate.....................................
Part VIII: Assets........................................
Part IX: Land..........................................
Part X: Intellectual Property.........................
Part XI: Employees etc.................................
Part XII: Pensions......................................
Part XIII: Disclosure Letter and Due Diligence Report....
Part XIV: Environmental.................................
Part XV: Taxation......................................
SCHEDULE III Completion Arrangements.....................................
SCHEDULE IV Particulars of the Property held by the Company.............
SCHEDULE V Particulars of registered Intellectual Property Rights......
Part I: Trade Marks...................................
Part II: Patents.......................................
Part III: Registered Designs............................
Part IV: Commercial Name...............................
<PAGE> 9
THIS AGREEMENT is made on 1997
BETWEEN:
(1) SIDLAW GROUP PLC (the "VENDOR") registered in England under number
170846 whose registered office is at Plumtree Court, London EC4A 4HT;
(2) EPL TECHNOLOGIES SL (the "PURCHASER") registered in Spain whose
registered office is at Plaza Pablo Ruiz, Picasso Sin Torre, Picasso
28020, Madrid, Spain; and
(3) EPL TECHNOLOGIES INC (the "GUARANTOR") incorporated under the law of
the State of Colorado whose principal office is at 2 International
Plaza, Suite 245, Philadelphia, PA 19113 - 1507 USA
WHEREAS:
(A) Fabbri Artes Graficas Valencia, S A (the "COMPANY") is a company
limited by shares incorporated in Spain the authorised and issued share
capital and other particulars whereof are set out in Schedule I
(B) The Vendor wishes to sell and the Purchaser wishes to purchase the
Shares (as hereinafter defined) on the terms and subject to the
conditions hereinafter contained
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement and the Schedules hereto the following words and
expressions shall have the following meanings:
"ACCOUNTING STANDARDS": Statements of Standard Accounting Practice and
Financial Reporting Standards or their equivalent in Spain;
the "ACCOUNTS": the audited balance sheet profit and loss account and
cash flow statement of the Company for the financial period ended on
and as at the Accounts Date;
the "ACCOUNTS DATE": 30th September 1996;
the "ACQUISITION DATE": 31st August 1993 being the date on which the
Vendor acquired the Company;
the "ACT": the Companies Acts 1985 to 1989 and all regulations made
under those Acts;
"BUSINESS DAY": a day (not being a Saturday) on which banks are open
for normal banking business in the City of London;
"COMPLETION": completion of the obligations of the parties required by
Clause 4 and Schedule III;
<PAGE> 10
the "COMPLETION ACCOUNTS": a separate unaudited balance sheet of the
Company as at the close of business on 30 May 1997;
the "COMPLETION DATE": the date of Completion;
"CONSIDERATION": the amount payable by the Purchaser to the Vendor for
the Shares as set out in Clause 3.1;
the "DISCLOSURE LETTER": a letter of even date herewith in the agreed
form, written from the Vendor to the Purchaser;
the "DUE DILIGENCE REPORT": the due diligence report produced for the
Purchaser by the Purchaser's Accountants (with the assistance of their
Madrid office in relation to tax matters);
"ENCUMBRANCE": includes any mortgage, charge, pledge, hypothecation,
lien, assignment by way of security, title retention, option, right to
acquire, right of pre-emption, right of set off, counterclaim, trust
arrangement or other security, preferential right or agreement to
confer security, or any equity or restriction or any agreement to
create any of the aforesaid;
"ENVIRONMENTAL LEGISLATION": includes all provisions of treaty,
convention, statute, local law or bylaw, common law or equity or
otherwise and of any jurisdiction (including directives, regulations,
circulars, codes of practice and guidance notes) concerning the
environment, waste, pollution, contamination, noise, radiation, electro
magnetic fields, vibration, health, safety, the conditions of the
workplace, the condition of buildings or structures (including the
presence of harmful or potentially harmful substances) (including,
where the context permits, any licence, authorisation or consent issued
pursuant to any of the foregoing);
"GROUP": in relation to any company means another company which is a
subsidiary or a holding company of the first company or any company
which is a subsidiary of the same holding company as the first company;
"INTELLECTUAL PROPERTY RIGHTS": patents, trademarks, service marks,
trade names, registered designs, designs, copyrights and other forms of
intellectual or industrial property (in each case in any part of the
world and whether or not registered or registrable and for the full
period thereof and all extensions and renewals thereof and applications
for registration of or otherwise in connection with the foregoing),
Know-how, confidential or secret processes and information, and other
rights of a similar nature;
"KNOW-HOW": means industrial and commercial information and techniques
including (but not limited to) drawings, formulations and formulae,
test reports, trial data, operating and testing procedures,
instructions on use and information on operating conditions all in
relation to the Company and its business;
the "LETTER OF INDEMNITY": the letter from the Vendor to the Company of
even date herewith confirming the right of the Company to enforce
certain indemnities in this Agreement directly against the Vendor;
the "LONDON STOCK EXCHANGE": the London Stock Exchange Limited;
"MANAGEMENT ACCOUNTS": the management accounts of the Company for the
period from 1st October 1996 to 30th May 1997;
2.
<PAGE> 11
the "MINORITY SHAREHOLDERS": those persons who prior to 14th May 1997
were the holders of shares in the capital of the Company namely Vicente
Silvestre Gisbert, Rafael Silvestre Gisbert, Francisco Silvestre
Gisbert, Ramon Torres Izquierdo and Jose Fernando Donat Amoros;
"PERSON": any individual, firm, company or other incorporated or
unincorporated body;
the "PRODUCTS": shall bear the meaning set out in Clause 6.1;
the "PROPERTY" the "PROPERTIES": one or more of the properties referred
to in Schedule IV;
the "PURCHASER'S ACCOUNTANTS": Deloitte & Touche of Colon 60, 46004
Valencia, Spain;
the "PURCHASER'S SOLICITORS": Denton Hall, Five Chancery Lane,
Clifford's Inn, London EC4A IBU;
the "SHARES": the 112,029 Class A Shares of 500 pesetas each and the
37,343 Class B Shares of 500 pesetas each in the capital of the
Company;
the "STATUTES OF THE COMPANY": the memorandum and articles of the
Company registered with the Commercial Registry in Valencia;
"SUBSIDIARY" "SUBSIDIARY UNDERTAKING" "HOLDING COMPANY" and "PARENT
UNDERTAKING": the meanings respectively ascribed thereto as at the date
hereof in the Act;
"TAXATION" or "TAX": the meaning ascribed thereto in the Tax Deed;
the "TAX DEED": a deed of indemnity in respect of Taxation of even date
herewith;
the "UK": Great Britain and Northern Ireland, the Channel Islands and
the Isle of Man;
"VALUE ADDED TAX" OR "VAT": Impuesto Valor Anadido;
the "VENDOR'S SOLICITORS": Browne Jacobson of 44 Castle Gate,
Nottingham NG1 7BJ;
the "WARRANTIES": the warranties and representations given by the
Vendor pursuant to Clause 5 and Schedule II;
"IN WRITING": includes any communication made by letter or facsimile
transmission;
the "1988 ACT": the Income and Corporation Taxes Act 1988.
1.2 Words and expressions defined in the Act shall have the same meanings
herein except as specifically otherwise provided.
1.3 In this Agreement references to statutes, by-laws, regulations and
delegated legislation shall include any statute, by-law, regulation or
delegated legislation modifying, re-enacting, extending or made
pursuant to the same or which is modified, re-enacted, or extended by
the same or pursuant to which the same is made and where the context
permits shall include the corresponding provisions of English or
Spanish law (as the case may be) provided always that this clause shall
not operate to extend or increase the liabilities or obligations of any
of the parties.
3.
<PAGE> 12
1.4 A document is in the "AGREED FORM" if it is in the form of a draft
agreed between and initialled by or on behalf of the parties hereto on
or before the date hereof.
1.5 The Schedules to this Agreement are an integral part of this Agreement
and references to this Agreement include references to such Schedules.
1.6 References in this Agreement to Clauses, Sub-Clauses, paragraphs and
Schedules are references to those contained in this Agreement.
1.7 For the purposes of this Agreement generally and of the Disclosure
Letter a matter shall be treated as being within the knowledge
information or belief of the Vendor if such matter is within the
knowledge information or belief individually or collectively of any one
or more of Ian Bodie, David Maitland, Colin Nichol, Juan Navarro
Sanchez-Collado, Browne Jacobson or Coopers & Lybrand (but only in
relation to Tax matters), and in relation to any matter warranted "SO
FAR AS THE VENDOR IS AWARE" or "TO THE BEST OF THE KNOWLEDGE
INFORMATION AND BELIEF OF THE VENDOR" or with any similar qualification
the Vendor warrants it has made careful enquiries of such persons
before giving such warranty.
1.8 Headings are for ease of reference only and shall not be taken into
account in construing this Agreement.
2. SALE AND PURCHASE
(a) The Vendor shall sell and the Purchaser shall purchase the
Shares together with all rights attached to them.
(b) The Vendor covenants with the Purchaser as follows:
(i) that it has the right to sell and transfer the full
legal and beneficial interest in the Shares to the
Purchaser on the terms set out in this Agreement;
and
(ii) 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 properly require in
order to vest the full legal and beneficial
ownership of the Shares in the Purchaser.
(c) The Shares constitute the entire issued share capital of the
Company, are all fully paid up, and shall be sold free from
any Encumbrances.
(d) The Vendor shall on the Completion Date sell the Shares to the
Purchaser before a Public Notary without any restrictions as
regards transferability, having previously fulfilled any
requirements established by the Statutes of the Company and
other applicable rules for the transfer of the Shares.
(e) The Vendor undertakes to procure (so far as it is able) that
on the Completion Date and immediately following the
acquisition the secretary of the board of directors of the
Company will proceed to register the Shares in favour of the
Purchaser as holder of those shares in the
4.
<PAGE> 13
Registry of Members of the Company, and will issue and deliver
to the Purchaser the corresponding share certificates.
3. CONSIDERATION
3.1 The Consideration is the sum of pesetas 825,375,000.
3.2 At Completion the sum of pesetas 801,185,160 shall be paid by the
Purchaser by telegraphic transfer to such bank account as the Vendor
shall nominate in writing in full satisfaction of the Consideration
(the Purchaser having previously paid the Vendor prior to the date of
this Agreement the sum of pesetas 24,189,840 on account of the
Consideration, receipt whereof the Vendor hereby acknowledges).
4. COMPLETION
4.1 Completion shall take place at the offices of the Notary in Valencia in
Spain attended for the purposes of Completion on the date of this
Agreement when the parties shall fulfil the obligations imposed on them
respectively by Schedule III.
4.2 The Vendor shall deliver on the Completion Date to the Purchaser the
certificates representing the Shares amounting to 100% of the capital
stock of the Company, each of those certificates having been duly
signed in accordance with the provisions of paragraph 2 of Section 56
of the Spanish Companies Act (and duly registered in favour of the
Purchaser in the Registry Book of the shares of the Company),
simultaneously with the payment of the Consideration being made.
4.3 The Purchaser shall not be obliged to complete this Agreement unless
the purchase of all the Shares representing 100% of the share capital
of the Company issued or agreed to be issued or under option to be
issued is completed simultaneously.
5. REPRESENTATIONS AND WARRANTIES
5.1 The Vendor hereby represents and warrants, to and with the Purchaser in
the terms of the Warranties which shall be construed separately and
independently of each other and shall continue in full force and effect
hereafter notwithstanding Completion. The Warranties are given subject
to matters fairly disclosed in the Disclosure Letter.
5.2 The Vendor hereby acknowledges and agrees that the Purchaser is
entering into this Agreement in reliance upon the representations and
warranties contained in this Agreement. The Purchaser acknowledges that
it has no right to rescind this Agreement.
5.3 The Vendor hereby waives any and all claims which it might otherwise
have against the Company and/or against any director or employee
thereof in respect of the completeness or accuracy of any information
supplied, or of any failure to supply information, by or on behalf of
the Company or any director or employee thereof to the Vendor or any of
its advisers in connection with this Agreement, the Tax Deed or the
Disclosure Letter or otherwise.
5.
<PAGE> 14
5.4 The Vendor undertakes after Completion as soon as reasonably
practicable to notify the Purchaser in writing of any matter or thing
which is or might in the reasonable opinion of the Vendor be a breach
or non-fulfilment of any of the Warranties.
5.5 In this Clause 5 "CLAIM" means any claim which would (but for the
provisions of this Clause) be capable of being made against the Vendor
in respect of any liability for breach of the Warranties and/or under
the Tax Deed. Notwithstanding any other provisions of this Agreement
the liability of the Vendor under the Warranties and the Tax Deed shall
be limited as follows:
(a) the aggregate liability of the Vendor in respect of all Claims
and all claims under Clauses 7.3 and 14 and under the Letter
of Indemnity shall be limited to the sum of pesetas
649,060,000, provided that in the case of a Claim under any of
Warranties 1.1(a), 1.1(b) and/or 1.1(c) the aggregate
liability of the Vendor shall be limited to the full amount of
the Consideration;
(b) the Vendor will be under no liability in respect of any Claim
where the amount for which the Vendor would be liable under
such Claim is less than pound sterling 5,000 provided that
claims relating to the same subject matter shall be regarded
as one claim for this purpose;
(c) the Vendor will be under no liability in respect of any Claim
unless the amount of its liability in respect of such Claim is
(when aggregated with its liability in respect of any other
Claim or Claims made by the Purchaser and disregarding any
Claims within Clause 5.5(b)) in excess of pound sterling
40,000 in which event the Vendor will subject to the
application of Clause 5.5(b) be liable for the full amount of
the Claim and not merely the excess over the said sum of pound
sterling 40,000;
(d) the Vendor will be under no liability in respect of any Claim
unless written particulars of the Claim (giving details of the
matter in respect of which such Claim is made and the
Purchaser's reasonable estimate of the damage so far as
information is then reasonably available to the Purchaser)
shall have been given to the Vendor within a period of five
years from the Completion Date or (in the case only of any
Claim not relating to Taxation) prior to the earlier of the
expiry of one complete calendar month after the publication of
the statutory audited accounts of the Company for the year
ended 31st December 1998 and 31st May 1999 and unless legal
proceedings in respect of such Claim are commenced and served
upon the Vendor within 9 months after such written particulars
have been given to the Vendor;
(e) the Vendor will have no liability in respect of any Claim:
(i) to the extent that it arises or is increased as a
result of the passing of any legislation (or making
of any subordinate legislation) with retrospective
effect;
(ii) if it would not have arisen but for anything
voluntarily done or knowingly and voluntarily
omitted to be done after Completion by or
authorised on behalf of the Purchaser or the
Company or any member(s) of the Purchaser's Group
outside the ordinary course of their business;
(iii) to the extent that it relates to any loss for which
the Purchaser or the Company is actually
indemnified by insurance, after deducting the
amount of any costs properly incurred in making
recovery under the relevant policy or policies and
the cost of any additional premiums levied as a
result of such claim being made by the insurer;
6.
<PAGE> 15
(iv) to the extent that it relates to:
(aa) any matter provided for, or included as a
liability or otherwise taken into account
in the Completion Accounts; or
(bb) any liability for Taxation arising out of
the ordinary course of business of the
Company after the Completion Date;
(v) to the extent that it arises as a result of any
change in the accounting policy or practice or in
the accounting reference date of the Company after
Completion other than in any case to correct a
prior failure by the Vendor (or the Company whilst
it was owned by the Vendor) to comply with any
relevant law or other requirement;
(f) where the Purchaser or the Company is entitled to recover from
some other person any sum in respect of any matter or event
which could give rise to a Claim, the Purchaser will (or will
procure that the Company will) at the request of the Vendor
take all appropriate steps subject to being indemnified
against its costs by the Vendor to recover that sum and any
sum recovered will reduce the amount of such Claim (and, if
the recovery is delayed until after such Claim has been
satisfied by the Vendor, the sum recovered will, to the extent
it does not exceed the payment made by the Vendor in
satisfaction of the Claim, be paid to the Vendor, after
deduction of all reasonable costs and expenses of the
recovery);
(g) payment of any Claim shall to the extent of such payment
satisfy and preclude any other Claim which is capable of being
made in respect of the same subject matter so that the
Purchaser shall not be capable of being compensated more than
once in respect of the same loss.
5.6 Upon the Purchaser becoming aware that matters have arisen which will
or are likely to give rise to a Claim, the Purchaser will:
(a) as soon as reasonably practicable notify the Vendor in writing
of the potential Claim and of the matters which will or are
likely to give rise to such Claim;
(b) not knowingly make any admission of liability, agreement or
compromise with any person, body or authority in relation to
the potential Claim without prior consultation with the
Vendor;
(c) at all times disclose in writing to the Vendor all information
and documents relating to the potential Claim or the matters
which will or are likely to give rise to such Claim and, if
requested by the Vendor, give the Vendor and their
professional advisers reasonable access to the personnel of
the Purchaser and/or the Company as the case may be and to any
relevant documents and records within the possession of the
Purchaser and/or the Company solely to enable the Vendor and
its professional advisers to evaluate such Claim and for such
purpose to take copies or photographs of such documents and
records at their own expense;
(d) take at the Vendor's sole cost and expense such action as the
Vendor may reasonably request (as long as such action does not
materially damage the Company, the Purchaser or any member of
the Purchaser's Group's business) to avoid, dispute, resist,
appeal, compromise or defend any claim which may result in a
breach of any Warranty; and
7.
<PAGE> 16
(e) allow the Vendor the right at its sole cost and expense
(subject to the agreement of the Purchaser's insurers, where
appropriate) to commence and/or conduct any action,
negotiations or proceedings in the name of the Company by
professional advisers nominated by the Vendor.
For the purposes of this Clause:
(i) the Purchaser shall be kept fully informed of all
relevant matters and shall be entitled to see
copies of all correspondence pertaining to any such
action, negotiations or proceedings;
(ii) all written communications pertaining to any such
action, negotiations or proceedings, which are to
be transmitted to the other party or parties to the
dispute shall first be submitted to the Purchaser
for approval (such approval not to be unreasonably
withheld or delayed); and
(iii) other than a Claim arising under the Tax Deed, the
Vendor shall make no settlement of or compromise
any claim which is the subject of any such action,
negotiations or proceedings which is likely to
affect the future liability of the Company or the
Purchaser in respect of Taxation or otherwise
without the prior written approval of the
Purchaser, such approval not to be withheld or
delayed unreasonably.
5.7 Nothing herein shall in any way diminish the Purchaser's or the
Company's common law duty to mitigate its loss.
5.8 If any potential Claim shall arise in respect of a liability of the
Company which is contingent only, then the Vendor shall not be under
any obligation to make any payment in respect of such Claim until such
time as the contingent liability ceases to be contingent and becomes
actual and provided the Purchaser gives notice of the Claim within the
time period referred to in Clause 5.5(d) the Purchaser shall not be
required to commence legal proceedings pursuant to that Clause until 9
months after the liability becomes actual.
5.9 Any amount paid by the Vendor in respect of any Claim shall be deemed
to constitute a reduction in the Consideration.
5.10 The Vendor undertakes to take such action (at its own expense) as is
required in order to maintain credit insurance for the benefit of the
Vendor in relation to debts due to the Company at Completion (and
providing the same benefits as those existing prior to Completion). The
Purchaser undertakes to procure that the Company shall comply with the
conditions attaching to such insurance as notified to the Purchaser by
the Vendor prior to the date of this Agreement. In relation to any bad
debt of the Company at Completion which is recoverable under such
insurance, the Vendor undertakes at its own expense to seek to make
such recovery and to remit any monies so recovered to the Company. The
Vendor shall have no liability under the relevant Warranties in
relation to any bad debt of the Company which is recovered under such
insurance provided that the Vendor has complied with its obligations
under this Clause.
8.
<PAGE> 17
6. COMPETITION
6.1 In this Clause, the following expressions shall have the following
meanings:
"PRODUCTS": all products of the nature or type manufactured and sold by
the Company during the period of two years ending on Completion namely:
(a) net based tray covers;
(b) macro perforated polyethalene film-based tray covers;
(c) tray covers;
(d) silk paper for wrapping fruit;
(e) polyethalene net base material orange bags;
"NETTING PRODUCTS": those Products described in paragraphs (a) and (e)
of the definition of Products;
the "PROHIBITED AREA": Spain, Portugal, France and Morocco.
6.2 Subject to Clause 6.3, the Vendor covenants with the Purchaser that the
Vendor shall not and shall procure that each member of the Vendor's
Group shall not either on its own account or jointly with, on behalf of
or for any person, whether as principal, agent, partner, shareholder,
director, consultant, employee or otherwise and whether directly or
indirectly:
(a) during the period of two years immediately following
Completion carry on or be engaged concerned or interested in
any business all or a material part of which is or is to be
the design, manufacture, distribution or sale of any Products
other than the Netting Products within the Prohibited Area;
(b) during the period of two years immediately following
Completion assist with technical or other advice in relation
to any Products other than Netting Products any person engaged
or to be engaged in the design, manufacture, distribution or
sale of any Products within the Prohibited Area;
(c) during the period of two years immediately following
Completion solicit in relation to any Products other than
Netting Products the custom within the Prohibited Area of any
person who at any time during the period of two years ending
on Completion was a customer or client of the Company (or who
at any time during the period of twelve months before
Completion was in the course of negotiating therewith) in
relation to any Products;
(d) during the period of three years immediately following
Completion carry on or be engaged concerned or interested in
any business all or a material part of which is or is to be
the design, manufacture, distribution or sale of any Netting
Products within the Prohibited Area;
(e) during the period of three years immediately following
Completion assist with technical or other advice in relation
to any Netting Products any person engaged or to be engaged in
the design, manufacture, distribution or sale of any Netting
Products within the Prohibited Area;
9.
<PAGE> 18
(f) during the period of three years immediately following
Completion solicit in relation to any Netting Products the
custom within the Prohibited Area of any person who at any
time during the period of two years ending on Completion was a
customer or client of the Company (or who at any time during
the period of twelve months before Completion was in the
course of negotiating therewith);
(g) during the period of two years immediately following
Completion solicit or entice away or endeavour to solicit or
entice away, employ or engage any director, manager,
consultant or senior employee of the Company whether or not
such person would commit any breach of contract by reason of
leaving the service thereof;
(h) at any time after Completion knowingly cause or seek to cause
to be terminated or adversely affected or otherwise knowingly
interfere with any agreement or arrangement of any kind to
which the Company is party; or
(i) at any time after Completion use any trading name, mark or
style which may suggest a connection with the Company or which
is similar to any trading name, mark or style now or at any
time in the period of two years ending on Completion used by
the Company, provided always that nothing in this Clause shall
prevent the Vendor from using the Sidlaw name and colourable
imitations thereof and associated logos and styles.
6.3 Nothing in this Clause 6 shall however prevent:
(a) the Vendor or any member of the Vendor's Group from
distributing and/or selling those Products described in
paragraphs (b) and (c) of the definition of "Products" in the
Prohibited Area notwithstanding the provisions of Clause 6.2
so long as neither the Vendor nor any member of the Vendor's
Group has manufactured them in whole or in part in Spain;
(b) the Vendor or any member of the Vendor's Group from acquiring
any business or the shares or other securities of any company
if:
(i) not more than 10% of the business or of that
company's business relates to the Products;
(ii) the principal reason for the acquisition is not the
ownership of an interest in the restricted
business;
(iii) the Vendor or the relevant Group company (as the
case may be) forthwith offers to dispose of that
part of the business in question to the Purchaser
(which shall be entitled to invite a member of its
Group to purchase it instead) on an arms' length
basis and keeps such offer open for acceptance for
90 days; and
(iv) if the Purchaser (or any member of the Purchaser's
Group) accepts such offer, and the Vendor or the
relevant member of its Group (as the case may be)
cooperates in good faith with the Purchaser's
pre-contract investigation of the business in
question and proceeds in good faith to the timely
completion of the disposal to the Purchaser or any
member of its Group.
(c) the Vendor or any member of the Vendor's Group from retaining
its interest in any business or the shares or other securities
of any company if:
10.
<PAGE> 19
(i) not more than 10% of the business or of that
company's business is in respect of the Products;
and
(ii) having been given the opportunity referred to in
clause 6.3(b) above, the Purchaser (or any member
of its Group) shall not acquire that part of the
business in question.
6.4 If any one or more of the provisions contained in this Clause 6 shall
be invalid, illegal or unenforceable in any respect the validity,
legality and enforceability of the remaining provisions of this Clause
shall not in any way be affected or impaired thereby.
6.5 The parties agree that the restrictions and undertakings contained in
this Clause 6 are reasonable and necessary for the protection of the
Purchaser's legitimate interests in the goodwill of the Company but if
any of the above restrictions are held not to be valid as going beyond
what is reasonable for the protection of the Purchaser's interests as
aforesaid but would be valid if part of the wording were deleted or
altered or its extent reduced or modified then such restriction shall
apply with such reduction in extent, modification, deletion or
alteration as may be necessary to make it enforceable.
6.6 No provision contained in this Agreement or in any arrangement of which
this Agreement forms part by virtue of which this Agreement or such
arrangement is subject to registration under the Restrictive Trade
Practices Act 1976 shall come into effect until the day following the
date on which particulars of this Agreement and of any such arrangement
have been furnished to the Office of Fair Trading (or on such later
date as may be provided for in relation to any such provision) and to
the extent that this Agreement is subject to registration under the
Restrictive Trade Practices Act 1976 the parties hereto agree to
furnish such particulars within three months from the date of this
Agreement at the Purchaser's cost.
7. VENDOR'S AND PURCHASER'S UNDERTAKINGS
7.1 The Vendor shall, subject to appropriate confidentiality undertakings,
for the period of seven years from Completion make available to the
Purchaser upon reasonable written request from the Purchaser and at the
Purchaser's expense and will permit the Purchaser or any duly
authorised representative thereof to inspect and take copies of all
books, records, accounts and documents (including computer programs)
relating to the business of the Company or any part thereof not passed
to the Purchaser on Completion and remaining, at that time, in the
Vendor's possession.
7.2 The Purchaser shall, subject to appropriate confidentiality
undertakings, for the period of seven years from Completion make
available to the Vendor upon reasonable written request from the Vendor
and at the Vendor's expense and will permit the Vendor or any duly
authorised representative thereof to inspect and take copies of all
books, records, accounts and documents (including computer programs)
relating to the business of the Company prior to Completion or any part
thereof passed to the Purchaser on Completion and remaining, at that
time, in the Purchaser's possession.
7.3 The Vendor undertakes that, if any of the Minority Shareholders bring
claims against the Company after Completion, it will (at its own
expense) enforce the waiver of claims provided by the Minority
Shareholders to the Vendor prior to Completion. If, notwithstanding
such action by the Vendor any claims which are the subject of the
waiver of claims are made by the Minority Shareholders against the
Company, the Vendor shall indemnify the Company and the Purchaser
against all liabilities arising from such claims.
11.
<PAGE> 20
8. DISCHARGE OF INDEBTEDNESS
The Vendor shall procure on or before Completion:
(a) that the Vendor and any member of the Vendor's Group
(excluding for the avoidance of doubt the Company) and the
directors, officers and employees thereof will each have
discharged in full any indebtedness of such person (other than
inter-company trading in the ordinary course) to the Company
(whether or not then due for payment); but so that, without
prejudice to the foregoing, to the extent to which any such
indebtedness is not so discharged the same shall continue to
be due and payable on demand on and after Completion; and
(b) that the Company shall be released, without payment by or
other cost to the Company from all debts and obligations of
any kind owed or outstanding to, and from all guarantees,
indemnities, mortgages and surety or security arrangements of
any kind given by the Company in favour of, and all rights of
subrogation arising against the Company from, the Vendor or
any member of the Vendor's Group or any past or present
director, officer or employee thereof (excluding for the
avoidance of doubt the Company), (other than, in each case,
those relating to inter-company trading in the ordinary
course)
and the Vendor shall indemnify the Purchaser and keep it indemnified
from and against any failure so to procure and from any liability
pending any such release.
9. WAIVER OF PRE-EMPTION RIGHTS
The Vendor hereby waives all pre-emption rights (whether arising upon
allotment, on issue, transfer or otherwise) in respect of the share
capital of the Company now or hereafter existing and the transaction
hereby contemplated whether such rights are conferred by the Statutes
of the Company, by agreement or otherwise.
10. SECRECY
The Vendor hereby undertakes to the Purchaser that the Vendor shall not
and shall procure that each Group company, director, officer and
employee of the Vendor or of any Group company shall not at any time
hereafter save with the prior consent in writing of the Purchaser
divulge or communicate to any person other than to directors, officers,
employees or professional advisers of the Purchaser and the Company
whose province it is to know the same any secret or confidential
information concerning the Company save to the extent to which such
information shall come within the public domain other than through any
unauthorised disclosure by the Vendor or any member of the Vendor's
Group, or any director, officer or employee thereof and save as
required by law or any Court or tribunal or the US Securities and
Exchange Commission or the London Stock Exchange.
12.
<PAGE> 21
11. ANNOUNCEMENTS
Save as specifically otherwise agreed in writing or required by law or
by the London Stock Exchange or by the US Securities and Exchange
Commission (and then, save where not practicable, only after prior
consultation between the parties as to the form and content of such
announcement) no public announcement shall be made in respect of the
subject matter of this Agreement without the prior written approval of
both the Vendor and the Purchaser of its form and content.
12. SALE OF THE PROPERTIES AFTER COMPLETION
In the event that any of the Properties are contracted to be sold
outside the Purchaser's Group by the Purchaser or any Group company of
the Purchaser prior to the date which is 18 months after the date of
Completion at a price in excess of the value attributed to such
Property in the Completion Accounts, the Purchaser shall pay to the
Vendor within 30 days of completion of the said sale a sum equal to the
amount by which the net sale price (after provision for tax on the
sales proceeds) exceeds the value attributed to such Property in the
Completion Accounts as aforesaid, up to a maximum payment to the Vendor
of the amount of the discount (that is to say 15% as reduced for the
release of the deferred tax provision) applied in the Completion
Accounts to the book value of that Property as set out in the Accounts
PROVIDED THAT in calculating the sale price achieved by the Purchaser
or the relevant member of the Purchaser's Group there shall be deducted
the cost of any improvements (as opposed to maintenance work) carried
out by any member of the Purchaser's Group including without limitation
the Company. The Purchaser shall keep the Vendor informed about the
progress of any such sale which is to occur within 18 months after the
date of Completion.
13. USE OF SIDLAW NAME ETC
13.1 In relation to the "SIDLAW" name and proprietary "S" logo the
Purchaser's and the Company's right to use the same after Completion
shall be limited as follows:
(a) for a period of 6 weeks only from Completion in respect of
signs and plaques bearing the same;
(b) for a period of 6 months only from Completion in respect of
documentation bearing the same but subject thereto the
Purchaser shall have no right to use the "Sidlaw" name in
relation to any Product;
(c) there shall be no time limit on the use of the said
proprietary "S" logo where it is incorporated into any Product
get up or design which is currently being manufactured,
distributed or sold by the Company as at the Completion Date.
Any new Product get up or design created by or on behalf of
the Company or the Purchaser after Completion must not
incorporate the said proprietary "S" logo.
13.2 The Purchaser undertakes not to do or omit to do any act or thing which
may damage the name, standing, reputation or business of the Vendor or
any of its Group companies in connection with the use of the name
"Sidlaw" and proprietary "S" logo pursuant to Clause 13.1 above and
hereby undertakes to indemnify and keep indemnified the Vendor and/or
its Group companies (as the case
13.
<PAGE> 22
may be) against all costs, claims, demands, damages or liabilities
arising out of a breach of the Purchaser's obligations contained in
this Clause 13.
14. INDEMNITIES
14.1 Notwithstanding any other provisions of this Agreement (other than
Clause 5.5(a)), the Vendor hereby agrees to indemnify and keep
indemnified the Purchaser from and against:
(a) all and any costs, claims, damages or liabilities brought or
claimed by or incurred in respect of the termination of the
employment of Don Salvador Gualde Araiz; and
(b) any fines or penalties incurred by the Company arising from
any use by the Company since the Acquisition Date and prior to
the date of this Agreement of non-registered persons to
dispose of hazardous waste.
14.2 The Purchaser agrees for itself and the Company not knowingly to make
any admission in respect of the matters described in Clause 14.1
without the prior written approval of the Vendor of its form and
content and to pass all relevant communications promptly to the Vendor
and to provide such assistance as is reasonably necessary at the
request and expense of the Vendor.
15. GENERAL
15.1 Save as provided in this Agreement and the Tax Deed, each party will
pay its own costs and expenses in relation to the negotiation,
preparation and execution of this Agreement, the Tax Deed and all
documents ancillary hereto or thereto.
15.2 If the Shares are sold or transferred after Completion to any company
which is a member of the same Group as the Purchaser, the benefit of
this Agreement including without limitation the right to bring a claim
in respect of the Warranties may be freely assigned to the purchaser or
transferee of the Shares who may enforce the same as if it had been
named in this Agreement as the Purchaser. No such assignment shall be
capable of operating to increase the liability of the Vendor under this
Agreement. If any company to which the Shares are sold or transferred
after Completion ceases to be a member of the same Group as the
Purchaser, the benefit of this Agreement including without limitation
the right to bring a claim in respect of the Warranties shall be
assigned back to the Purchaser who may enforce the same in the same way
as was originally intended under this Agreement.
15.3 The Vendor may not assign or transfer any of its rights or benefits
hereunder.
15.4 No breach of any provision of this Agreement shall be waived or
discharged except with the express written consent of the party not in
breach.
15.5 No failure or delay by the Purchaser in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof nor
shall any single or partial exercise by the Purchaser of any right,
power or privilege preclude any further exercise thereof or the
exercise of any other right, power or privilege.
14.
<PAGE> 23
15.6 All sums payable under this Agreement shall be paid without deduction
withholding set off or counterclaim.
15.7 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. Each of the parties acknowledge
that in agreeing to enter into this Agreement they have not relied on
any representation, warranty, collateral contract or other assurance
(other than those set out in this Agreement and the documents referred
to in it) made by or on behalf of any other party before the signature
of this Agreement. Each of the parties waive all rights and remedies
which but for this Clause might otherwise be available to them in
respect of any such representation, warranty, collateral, contract or
other assurance, provided that nothing in this Clause shall limit or
exclude any liability for fraud.
15.8 The Vendor confirms that the signature, execution and performance of
this Agreement, the Tax Deed and all ancillary documents by the Vendor
and (where appropriate) the Company have been duly authorised and are
within the corporate power of the Vendor, and (where appropriate) the
Company, constitute binding obligations in accordance with their terms
and will not give rise to any breach of any instrument, agreement, law,
order, judgment or decree by which the Vendor or the Company is bound.
15.9 The Purchaser confirms that the signature, execution and performance of
this Agreement, the Tax Deed and all ancillary documents by the
Purchaser have been duly authorised and are within the corporate power
of the Purchaser constitute binding obligations in accordance with
their terms and will not give rise to any breach of any instrument,
agreement, law, order, judgment or decree by which the Purchaser is
bound.
16. EXECUTION OF PUBLIC DEED, COSTS AND EXPENSES
Save as provided in this Agreement, the parties undertake that, upon
the request of either of them, they will execute this Agreement in a
Public Deed before a Notary Public. The notarial costs of such
execution of the Public Deed shall be borne by the parties in equal
shares.
17. GUARANTEE
The Guarantor hereby unconditionally and irrevocably guarantees, as
primary obligor, the due and punctual performance of the obligations of
the Purchaser under this Agreement.
18. NOTICES
18.1 Any notice or other communication given or made under this Agreement
shall be in writing and may be delivered to the relevant party or sent
by airmail letter or facsimile transmission to the address of that
party specified in this Agreement or to that party's facsimile
transmission number thereat or such other address or number as may be
notified hereunder by that party from time to time for this purpose and
shall be effectual notwithstanding any change of address not so
notified.
15.
<PAGE> 24
18.2 Unless the contrary shall be proved, each such notice or communication
shall be deemed to have been given or made and delivered, if by letter,
7 days after posting, if by delivery, when left at the relevant address
and, if by facsimile transmission, when transmitted.
18.3 The Purchaser hereby appoints the Purchaser's Solicitors (marked for
the personal attention of Simon Brown or Catherine Bingham) as its
authorised agent for the purpose of accepting service of process for
all purposes in connection with this Agreement.
19. LAW
This Agreement shall be governed by and construed in all respects in
accordance with English law and the parties agree to submit to the
non-exclusive jurisdiction of the English Courts as regards any claim
or matter arising in relation to this Agreement.
IN WITNESS whereof this Deed has been duly executed the day and year first above
written
16.
<PAGE> 25
SCHEDULE I
PARTICULARS OF THE COMPANY
Date of Incorporation: 3rd February 1965
Place of registration: Registro Mercantil de Valencia
Company Registration Number: Torno 4527 libro 1838, de la seccion
general
Folio 217 No. 462664
Registered Address: Avenida Comarques del Pais Valencia No 56,
Quart de Poblet,
(Valencia),
Spain.
Authorised Share Capital: The same as the issued share capital
Issued Share Capital
(all held by the Vendor): 74,686,000 pesetas divided into:
112,029 Class A Shares of 500 pesetas each
37,343 Class B Shares of 500 pesetas each
Particulars of any issued share Nil
capital not fully paid up:
Accounting Reference Date: 30th September in each year
Names and addresses of Robert de Wilde
Directors: c/o Sidlaw Packaging-Soplaril,
Apartado de Correos 1719,
C/Santander,
71 int no 10,
08020 Barcelona.
Raphael Alegre
c/o Sidlaw Packaging-Soplaril,
Apartado de Correos 1719,
C/Santander,
71 int no 10,
08020 Barcelona.
Juan Navarro Sanchez-Collado,
c/o Sidlaw Packaging-Soplaril,
Apartado de Correos 1719,
C/Santander,
71 int no 10,
08020 Barcelona.
17.
<PAGE> 26
Name and address of Juan Navarro Sanchez-Collado
Secretary: as above
Name and address Coopers & Lybrand, S.A.
of Auditors: Calle Ulises 18
Madrid
Spain
Names of subsidiaries: None
18.
<PAGE> 27
SCHEDULE II
REPRESENTATIONS AND WARRANTIES
For the purposes of Schedule II the "DATE" is 30th May 1997.
Save as provided in Clause 5 of this Agreement, that:
PART I - TITLE AND ABILITY TO SELL
1.1 TITLE TO SHARES:
(a) The Shares constitute the whole of the issued and allotted
share capital of the Company and are all fully paid up.
(b) No consents, permissions or conditions are required to be
obtained or fulfilled in respect of the Vendor or the Company
or otherwise to enable the Purchaser to become the sole legal
and beneficial owner of the Shares.
(c) All the Shares are solely legally and beneficially owned by
and registered in the name of the Vendor and the Shares and
the unissued share capital (if any) of the Company are free
from any Encumbrance and there are no arrangements in force or
claimed entitling or allegedly entitling any person to any
Encumbrance.
(d) The Company is not and has not within the past three years
been the legal or beneficial owner of nor is it committed to
acquire any shares or securities of any description, and the
Company is not and so far as the Vendor is aware has not been
a member of a partnership or unincorporated association. The
Company does not have and has not had any subsidiaries in the
past three years.
1.2 ASSETS VESTED IN THE COMPANY: All of the business of the Company
relating to the design, manufacture, distribution and sale of the
Products and related activities (the "BUSINESS") is comprised in, all
assets and contracts relating thereto are legally and beneficially
owned by and in the name of, the Company, all employees of the Business
are employed by the Company and the Company does not carry on any
business other than the Business.
PART II - ACCOUNTS
2.1 ACCURACY OF ACCOUNTS:
The Accounts (true copies whereof have been supplied to the Purchaser)
have been prepared in accordance with and comply with the Spanish
Companies Act, all relevant Accounting Standards, and principles
generally accepted in Spain and show a true and fair view of the state
of affairs and the financial position of the Company as at and for the
financial period ending on the Accounts Date and of the profits and
losses of the Company for the period ended on the Accounts Date.
19.
<PAGE> 28
2.2 CONSISTENCY OF PREPARATION; EXTRAORDINARY ITEMS:
(a) The bases and policies of accounting of the Company adopted
for the purpose of preparing the Accounts are the same as
those adopted for the purpose of preparing the audited
accounts of the Company for the three years last preceding the
Accounts Date.
(b) The profits and losses of the Company shown by the Accounts
have not been affected by any exceptional or extraordinary
item or by any other matter which has rendered such profits or
losses unusually high or low.
2.3 CHANGES:
(a) Since the Accounts Date:
(i) the Company has carried on business in the ordinary
and usual course and there has been no material
adverse change in its financial or trading position
or in the nature or scope of its business or so far
as the Vendor is aware in its prospects; and in
particular the Company has not entered into any
unusual or abnormal contract or, prior to the Date
any contract(s) involving expenditure by the
Company in excess of pound sterling 25,000 in
total;
(ii) there has been no resolution of or consent by the
members or any class of members of the Company and
the Company has not paid or declared any dividend
or other actual or deemed distribution or agreed to
do any of the foregoing;
(iii) prior to the Date no donation or covenant for
charitable or political purposes or any ex gratia
payment has been made or agreed to be made by the
Company;
(iv) prior to the Date no repayment or waiver of
repayment of any loan or part of a loan (save as
expressly required by this Agreement or in the
ordinary course of business) has been made by or in
favour of the Company;
(v) prior to the Date no Intellectual Property Rights
whatsoever and no other asset(s) having a price or
value in excess of pound sterling 25,000 in total
have been or have been agreed to be acquired or
disposed of (other than in the ordinary course of
trading);
(vi) prior to the Date the Company has not made any
unusual augmentation or diminution in stock levels;
(vii) the Company has not changed its accounting
reference period.
2.4 NAV WARRANTY: A balance sheet of the Company prepared as at the date of
this Agreement on the same bases as the Accounts would show net
tangible assets for the Company of not less than 90% of its net
tangible assets as shown in the Accounts.
2.5 MANAGEMENT ACCOUNTS: The Management Accounts have been prepared from
the books and account records of the Company on a consistent basis over
the period to which they relate. They have further been prepared using
bases and assumptions which are consistent with those applied in
20.
<PAGE> 29
the Accounts. The Management Accounts reflect, in all material
respects, the trading results of the Company over the period to which
they relate and reflect, in all material respects, the financial
position of the Company as at the relevant date up to 30th May 1997.
The Vendor is further not aware of any material inaccuracies in the
Management Accounts.
PART III - COMPLIANCE
3.1 LEGISLATION; ILLEGAL ACTS: Save in respect of Environmental Legislation
the Company and (in relation to the business and assets of the Company)
its directors, officers and employees:
(a) have complied at all times with all applicable laws,
directives, regulations and codes of practice; and
(b) have not at any time committed any tortious act or been party
to any agreement or arrangement or activity which is or might
be (and entry into and performance of this Agreement will not
be) in breach of, registrable under, the subject of a
reference or investigation or inquiry, or require the giving
of any notice under any law or regulation (including without
limitation the Treaty of Rome).
3.2 EEC: The Company is not in a dominant position in any market in any
part of the European Economic Community for the purpose of Article 86
of the Treaty of Rome nor is it party to any agreement, arrangement or
activity which has been or should be notified to the Commission of the
European Community for an exemption or in respect of which an
application has been or should be made to the said Commission for
negative clearance.
3.3 LICENCES: All permissions, consents and licences required in connection
with the business of the Company have been obtained, are valid,
subsisting and in the name of the Company. So far as the Vendor is
aware, there are no circumstances (including the sale and purchase
hereunder) which might cause any of the foregoing to become invalid or
liable to be amended, withdrawn or not renewed.
3.4 INDUSTRY APPROVALS: All plant and machinery used by the Company in the
course of its business has been approved by the applicable regional or
national industry authorities and the said plant and machinery complies
with all applicable laws and regulations relating to safety and
environment.
3.5 HEALTH AND CONSUMPTION LEGISLATION: The Company has complied with all
applicable Health and Consumption legislation.
3.6 LITIGATION ETC:
(a) Neither the Company nor so far as the Vendor is aware (in
relation to any matter for which the Company may be liable)
any third party is or at any time within the three years
ending on the date hereof has been involved in any litigation,
arbitration, administrative action, tribunal, inquiry or other
proceedings, (other than in each case in respect of debt
collection or employment claims in the ordinary course). None
of the foregoing is or are so far as the Vendor is aware
pending or threatened by or against the Company or (in
relation to any such matter) any such person.
21.
<PAGE> 30
(b) So far as the Vendor is aware no governmental or other
investigation or inquiry is in progress or threatened in
respect of the Company or its business and there are no
circumstances likely to lead to any of the same.
3.7 INSURANCE:
(a) Summary information regarding all insurance policies in force
at the Date in respect of the Company has been disclosed to
the Purchaser; nothing has been done or omitted to be done
which would or might make any such policy void or voidable at
the date hereof, there were no insurance claims by the Company
pending or outstanding at the Date and so far as the Vendor is
aware there are no circumstances likely to lead to any such
claim or which may cause an application for renewal of the
policy to be refused or accepted subject to a materially
increased premium.
(b) Since the Acquisition Date no insurance company has refused to
insure the property assets or risks of the Company or has
imposed conditions (by way of increased premiums by way of
special loading or penalty) for such insurance.
(c) All insurance policies disclosed to the Purchaser prior to the
Date have remained in force and were still in force at
Completion.
3.8 RESTRICTIVE COVENANTS/NON-COMPETE PROVISIONS: At the Date neither the
Company nor any aspect of its business nor any of its employees of
managerial status were subject to any restrictive covenant or practice
and so far as the Vendor is aware there are no circumstances which
restrict or might lead to a restriction on any aspect of its business.
3.9 USE OF NAMES: Since the Acquisition Date the Company has not carried on
business under any name other than its full corporate name and save as
provided under the terms of this Agreement there are no circumstances
by reason of which the Company may become obliged to change its name or
trade under a different name.
3.10 COMPETITION LAW: EU AND SPAIN: The Company complies with all Spanish
and EU Competition Laws in the conduct of its activities and, in
particular, Articles 85 and 86 of the Treaty of Rome and Articles 1 and
6 of the Law 16/89 of "Defensa de la Competencia". The Company is not a
party to any agreement which should have been reported to the
competition authorities and it is not involved in any administrative or
judicial proceedings before Spanish or EU administrative or judicial
authorities competent in matters of competition and unfair trading.
PART IV - CONTRACTUAL
4.1 VALIDITY OF CONTRACTS:
(a) In relation to all agreements arrangements and understandings
to which the Company was a party at the Date or by which it
was then bound:
(i) the same were in the name of or validly legally
assigned to the Company, were not ultra vires,
unauthorised, invalid or unenforceable and were if
required appropriately registered;
22.
<PAGE> 31
(ii) neither the Company nor (to the best of the
Vendor's knowledge information and belief) any
third party was in breach of any of the same;
(iii) the Company and (to the best of the Vendor's
knowledge information and belief in any respect
which would or might affect the Company) every
other party thereto or liable in respect thereof,
was then fully able to perform and comply with the
same with the assets and rights then (and after
Completion to remain) owned by the Company or such
other person and with the employees then currently
(and after Completion to remain) employed by the
Company or such other person.
4.2 (a) COMMITMENTS AT THE DATE: At the Date the Company was not a
party to or bound by nor had it made any offer or tender to
enter into:
(i) any capital commitment in excess of pound
sterling 25,000; or
(ii) any loan by the Company; or
(iii) any agreement arrangement or understanding which
did not or which was unlikely to make a profit
within or which involved payments or receipts
linked to any index or in any currency other than
pesetas (other than international trading in the
ordinary course); or
(iv) any joint venture, consortium, partnership, agency
or distributorship arrangement or any agreement
containing a grant to or by the Company of any sole
or exclusive or limited right (whether by reference
to territory, product, type of customer or supplier
or otherwise) right.
(b) COMMITMENTS: The Company is not a party to or bound by nor has
it made any offer or tender to enter into:
(i) any obligation outside the normal ordinary course
of the Company's trade or of an onerous or long
term nature (for which purposes a "LONG TERM"
obligation shall mean one which is not terminable
by the Company without liability to damages within
six months from the date hereof); or
(ii) any agreement arrangement or understanding not on
arms' length terms under which the Company is or
may become liable to pay any service, management or
similar charge; or
(iii) so far as the Vendor is aware any material
agreement, arrangement or understanding which is
likely to or capable of being terminated or
adversely affected as a result of any change in the
control or management or shareholders of the
Company.
23.
<PAGE> 32
4.3 DISTRIBUTION AND AGENCY AGREEMENTS ETC: Copies of (or where such
agreements are not reduced to writing full details of) all agency
agreements and distribution agreements to which the Company is party or
by which it is bound have been disclosed to the Purchaser. Otherwise
the Company is not a party to or negotiating any agency,
distributorship or sales representation arrangement.
4.4 OUTSTANDING AUTHORITIES: The business of the Company is managed
exclusively by its directors and no person other than a director or
employee of the Company has any actual or ostensible authority, whether
under a power of attorney or otherwise, to commit the Company.
PART V - FINANCIAL
5.1 INDEBTEDNESS:
(a) Other than in the ordinary course of trading, at the Date the
Company had not drawn, accepted, or endorsed any bill of
exchange, cheque, promissory note or other instrument (whether
maturing before, at or after Completion and whether or not
negotiable).
(b) Full particulars of, and of the amounts outstanding under and
the maximum amounts available under, all bank facilities,
loan, guarantee, acceptance, acceptance credit, indemnity,
factoring and other borrowing facilities and arrangements of
the Company at the Date have been disclosed to the Purchaser;
no such maxima have been exceeded; and the Company has not,
and will not by virtue of any aspect of the transaction hereby
contemplated, become bound or liable to be called upon to pay
or repay prematurely any indebtedness or to pay or discharge
any obligation under any such facility or arrangement nor has
the Company failed to pay or repay any indebtedness or to meet
any obligation in full on the due date.
5.2 OUTSTANDING CHARGES, MORTGAGES AND OTHER ENCUMBRANCES: There are no
outstanding mortgages, debentures, charges and other Encumbrances
granted to or by the Company or affecting its assets.
5.3 INSOLVENCY:
(a) There has not been and there is not, in respect of the Company
or any part of its business or assets, any order made,
petition presented or resolution passed for its suspension of
payment, bankruptcy or winding up ("LIQUIDACION"), or any
proposal or petition therefor or any distress, execution or
other process levied or the appointment of a receiver
("SINDICO"), interventor ("INTERVENTOR"), liquidator or other
encumbrancer or any unfulfilled or unsatisfied judgment or
court order outstanding or any delay by the Company in the
payment of any obligation due for payment or any circumstance
which might lead to any of the foregoing.
(b) The Company has not stopped payment or ceased to carry on
business and is not insolvent or unable to pay its debts as
they fall due for payment.
(c) The Company is not party to any transaction as a result of
which any asset owned or used by the Company is liable to be
transferred or re-transferred pursuant to any legislation
concerning insolvency nor is it party to any transaction which
may otherwise be liable to be set aside or avoided for any
reason.
24.
<PAGE> 33
5.4 BANK ACCOUNTS: Complete and accurate statements of the accounts of the
Company with all banks and other financial institutions as at the
business day preceding Completion will be so supplied to the Purchaser.
5.5 FACTORING: No invoice has been discounted or otherwise paid by any bank
or other financial institution under any debt factoring agreement
(including without limitation those disclosed to the Purchaser) or
other agreement whereby the invoice in question might have to be repaid
by the Company.
5.6 OVERDRAFT ETC: The Company does not make use of any overdraft or other
loan facility including without limitation under the banking agreements
disclosed to the Purchaser.
PART VI - TRADING
6.1 NATURE OF TRADE: The trade of the Company comprises exclusively the
design, manufacture, distribution and sale of the Products and related
activities and the Company carries on and has since the Acquisition
Date carried on such trade (and similar activities) and no other trade.
6.2 DEBTORS AND CREDITORS
(a) A schedule of creditors of the Company as at 30th April 1997
has been supplied to the Purchaser and no such amount was then
overdue for payment.
(b) So far as the Vendor is aware, the book debts and other
receivables due and owing to the Company at the Date were good
and recoverable in the ordinary course of trade, save to the
extent of any provision in the Completion Accounts.
6.3 CUSTOMERS AND SUPPLIERS:
(a) Not more than 10 per cent in value of purchases by the Company
were placed with any one supplier and not more than 10 per
cent of the Company's turnover relating to any one product or
service supplied by the Company in the year prior to the Date
was provided to any single customer of the Company and for the
purposes of this paragraph purchases from and supplies to
different entities in the same group of companies shall be
aggregated and treated as purchases from or supplies to the
same person.
(b) No significant customer or supplier of the Company had since
one year before the Date ceased or indicated an intention to
cease or to the best of the knowledge and belief of the Vendor
might as a result of Completion cease to contract with or
supply to the Company or might substantially reduce its
business with the Company. "Significant" for the purposes of
this warranty means a client, customer or supplier who
purchased or sold (as the case may be) goods and/or services
from or to the Company of a value in excess of 5% of turnover
in the year immediately preceding Completion.
6.4 TERMS AND CONDITIONS:
(a) Save as implied by law and not capable of exclusion neither
the Company nor any other person on its behalf had at the Date
given or made expressly or impliedly any unusual
25.
<PAGE> 34
guarantee, indemnity, warranty or representation in respect of
any goods or services sold or supplied or agreed to be sold or
supplied by the Company.
(b) Prior to the Date no notice had been given or received by the
Company since the Accounts Date of any material adverse price
or other changes in trading terms (other than those affecting
the industry generally) with any customer or supplier, no such
change was to the knowledge of the Vendor then intended or
likely and since the Accounts Date and prior to the Date there
has been no material reduction in work-in-hand or instructions
received below normal levels and no material adverse change
(other than those affecting the industry generally) had
occurred in the cost of selling the goods or completing, or
providing the services sold or supplied by the Company.
6.5 VENDOR'S OTHER INTERESTS, ARM'S LENGTH DEALINGS:
(a) Neither the Vendor nor any of its subsidiaries has, save for
ownership of the Company, any interest, direct or indirect, in
any business which competes or is likely to compete with the
business of the Company or intends to acquire any such
interest.
(b) The Company is not party to or interested in any agreement
arrangement or understanding in which the Vendor, or any
director, officer or employee of the Vendor or the Company or
any person connected (within the meaning of Section 839 of the
1988 Act) with any such person is or has been directly or
indirectly interested.
(c) The Company is not party to nor have its profits over the
three years ending on the date hereof been affected by any
agreement arrangement or understanding which is not of an
entirely arm's length nature.
6.6 PRODUCT LIABILITY: The Company has not manufactured, marketed,
supplied, sold or provided any product which does not comply with all
applicable laws, regulations or standards or which is injurious or
dangerous and has not prior to the Date manufactured, marketed,
supplied, sold or provided any product which is defective or not in
accordance with any representation or warranty, express or implied,
given by the Company in respect of it.
6.7 CUSTOMER COMPLAINTS: Details of all outstanding and unsettled
complaints (not being purely frivolous and not being purely in the
ordinary course) from customers about the Company's products and
services over the year preceding the Date have been disclosed to the
Purchaser.
PART VII - CORPORATE
7.1 CORPORATE STANDING:
(a) The Company is a duly organised limited liability company
("Sociedad Anonima") validly existing in accordance with
Spanish Law and has the power to own with full beneficial
ownership its assets of any kind and carry on its business as
now being conducted.
(b) The copies of the current Statutes of the Company which have
been produced to the Purchaser's Solicitors are complete and
accurate have attached to them all documents required by law
and fully set out all rights attaching to the share capital of
the Company.
26.
<PAGE> 35
(c) All documents required to be registered at the Companies
Registry for Valencia, and published in the Official Gazette
of the Company Registry in respect of the Company have been
duly registered.
(d) The particulars of the Company set out in Schedule 1 are
accurate.
7.2 CORPORATE RECORDS:
(a) All the accounting records, statutory and other books and
records required by law (including without limitation , the
Registry Book of Shares, Book of Minutes, the Accounts Books
and the registers of debenture and loan stock holders) of the
Company are kept up to date in all material respects,
registered with the Companies Registry when required by law,
and are a complete and accurate record of all matters required
by law to be recorded or registered therein; the Company has
not received any application or request for rectification of
any such registers and all of the foregoing and all documents
needed to prove the Company's title to its assets (duly
stamped where appropriate) are in the possession of the
Company.
(b) All of the records, control and other systems, data and
information of the Company are recorded, stored, maintained or
operated or otherwise held by the Company and are not wholly
or partly dependent on any means (including any electronic,
mechanical or photographic process, computerised or otherwise)
which (and all means of access to and from which) are not
under the exclusive ownership and direct control of the
Company.
7.3 PLACES OF BUSINESS: The Company has no branch, place of business or
asset outside Spain other than any supplies subject to retention of
title claims in the ordinary course of trading.
7.4 DISTRIBUTIONS AND SHARE CAPITAL:
(a) The Company has not repaid, redeemed or purchased or agreed to
repay, redeem or purchase any of its own shares, debentures or
securities of any kind or reduced or agreed to reduce its
share capital since the Acquisition Date.
(b) The Company has not made or agreed to make any subdivision or
reclassification of its share capital since the Acquisition
Date.
(c) The Company has not breached the restrictions imposed by
statute in Spain on Spanish companies providing financial
assistance for the purchase of their own shares since the
Acquisition Date.
(d) The Company has not capitalised or agreed or resolved to
capitalise any profits or reserves; nor advanced any loan or
borrowed any amount or issued any share, debenture or other
security in manner giving rise to a distribution or deemed
distribution nor made any other distribution (whether of
income or capital) except dividends shown in its audited
accounts since the Acquisition Date.
(e) The Company has not paid nor (in circumstances in which it may
be required to repay all or part of the same) has it received
any dividend or other distribution paid in breach of
applicable laws since the Acquisition Date.
27.
<PAGE> 36
(f) No share has been or has been agreed to be allotted or issued
by the Company other than for full consideration or in
circumstances which would or might involve a breach of
applicable law since the Acquisition Date.
PART VIII - ASSETS
8.1 LEASED ASSETS: Complete and accurate particulars of all contracts of
lease, hire purchase, hire conditional sale, and similar contracts to
which the Company was party as at the Date and of the assets to which
such contracts relate (the "EXCEPTED ASSETS"), have been disclosed to
the Purchaser.
8.2 TITLE TO THE ASSETS: The Company is the sole legal and beneficial owner
of the assets to which a value is attributed in the Completion Accounts
(including without limitation the Property) and all documentation
required to prove its title thereto and none of the same are subject to
or affected by any Encumbrance or subject to any arrangements entitling
any person to any Encumbrance. The Company is the sole legal and
beneficial owner of all the assets required by the Company in order to
carry on its business as hitherto carried out.
8.3 CONDITION OF THE ASSETS: The aforementioned assets were, at the Date,
in good repair and working order having regard to their age and did not
constitute a risk to health or safety by virtue of their state of
repair working order and or age.
8.4 ACCURACY OF ASSET/PLANT SCHEDULE: The list of equipment, machinery,
vehicles and other tangible assets of the Company provided to the
Purchaser constitutes all material items owned or used by the Company
at the Date or in the possession or reputed ownership of the Company at
the Date other than stocks of raw materials, parts, spare parts,
semi-finished and finished goods.
8.5 COMPUTER SYSTEM:
The computer system and software was acquired new and has not been
reconditioned, has been properly used maintained and serviced in
accordance with the manufacturer's instructions and has not been (and
the Vendor has no reason to believe will be) susceptible to breakdown
malfunction or failure.
PART IX - LAND
9.1 PARTICULARS: Accurate particulars of each of the Properties are set out
in Schedule IV; the Properties comprise the only land and buildings in
which the Company has any right title or interest or which the Company
uses or occupies.
9.2 TITLE:
(a) Each of the Properties described in Schedule IV are in the
full ownership of the Company.
(b) The Company has good title (which title has been registered at
the Property Registry at Paterna, free of any charge or
encumbrances) in respect of each of the Properties. There is
28.
<PAGE> 37
no requirement of obtaining any third party permission for the
disposal of any of the Properties or for any other dealings
with any of the Properties.
(c) The Company neither owns nor has any interest in nor
obligation (actual or contingent) in respect of any property
other than the Properties.
9.3 POSSESSION AND USE: With the exception of the letting agreement between
the Company and DISCANA S.L. the Company possesses, occupies and uses
the Properties for the purpose of conducting its business.
9.4 OCCUPATION: The Properties are occupied exclusively by the Company
which (save as stated in Schedule IV and subject to the letting
agreement between the Company and DISCANA S.L.) is entitled to vacant
possession thereof and there is no tenancy, sub-tenancy, service
occupancy, licence or other encumbrance whatsoever affecting any of the
Properties other than those particulars of which are correctly
summarised in Schedule IV nor is there any person in possession or
occupation of or who has any claims any right or easement of any kind
in respect of the Properties.
9.5 COMPLIANCE WITH OBLIGATIONS: The Company and all persons claiming under
the Company have complied with all laws, regulations, covenants,
obligations, restrictions and provisions binding upon them in relation
to the Properties (including without limitation those relating to
planning matters) and no such covenants, obligations, restrictions and
provisions have been waived and the Company is not under any liability
to any person in respect of any past failure to so comply.
PART X - INTELLECTUAL PROPERTY
10.1 RIGHTS HELD: The Intellectual Property Rights specified in Schedule V
comprise all the registrable Intellectual Property Rights used or
required by the Company for the purposes of its business.
10.2 PATENT: So far as the Vendor is aware there has been no opposition to
the application made by the Company for a patent details of which are
set out in Schedule V.
10.3 LICENCES ETC.: The Company has not granted any licences or assignments
under or in respect of any Intellectual Property Rights specified in
Schedule V or disclosed or provided to any person (other than an
employee) any confidential or secret material in which any such
Intellectual Property Right exists, including without limitation,
know-how, trade secrets, technical assistance, confidential information
or lists of customers or suppliers and is not obliged so to grant or
disclose any of the same.
10.4 NON-INFRINGEMENT:
(a) So far as the Vendor is aware, no employee (past or present)
of the Company has any right to compensation payable by the
Company in respect of Intellectual Property Rights of which he
or she is the inventor, creator, or author either alone or
with any other person(s);
(b) The Vendor is not aware of any unauthorised use of any of the
Intellectual Property Rights specified in Schedule V or of any
activity or the use of any material, which or the use of which
might infringe, invalidate or dilute any right comprised in
such Intellectual Property Rights.
29.
<PAGE> 38
10.5 FEES: All fees for the grant or renewal of the Company's registered
Intellectual Property Rights have been paid and so far as the Vendor is
aware no circumstances exist which might lead to the cancellation,
forfeiture or modification of any Intellectual Property Rights of the
Company or to the termination of or any claim for damages under any
licence of Intellectual Property Rights to the Company.
PART XI - EMPLOYEES, ETC
11.1 TERMS OF EMPLOYMENT:
(a) Accurate details of the terms of employment or engagement of
all directors, employees, agents and consultants of the
Company (including, without limitation, details of their
length of service, relevant service with previous employers,
dates of birth, job titles, remuneration, benefits and other
perquisites, whether or not legal entitlements) as at the Date
have been disclosed to the Purchaser. The Company is under no
obligation (whether legally enforceable or not) to increase
any such remuneration or alter any such other terms.
(b) No director, employee, agent or consultant of the Company has
ceased to be employed by or to be under contract to the
Company in circumstances in which he or it could claim damages
or compensation or has given or is under notice of
resignation, dismissal or termination or is to the best of the
knowledge information and belief of the Vendor contemplating
leaving the Company or under threat of dismissal or
termination.
(c) There were not in existence at the Date any contracts with
directors, employees agents or consultants which could not be
lawfully terminated by three months' notice or less without
giving rise to any claim for damages or compensation (other
than any claim for unfair dismissal).
11.2 PROFIT SHARING ARRANGEMENTS: The Company is under no obligation
(whether legally enforceable or not) to provide any share incentive,
share option or profit sharing scheme.
11.3 BARGAINING AGREEMENTS: At the Date there was no recognition, wage
bargaining, closed shop or other collective or similar agreement,
arrangement or understanding in force or proposed between the Company
and any trade union staff association or other organisation
representing any employees of the Company. At the Date the Company had
not entered into any Company Bargaining Agreement different from the
ones disclosed to the Purchaser and no amount was outstanding in
relation to these agreements. A copy of the only Collective Labour
Bargaining Agreement in force applicable to the employees of the
Company at the Date has been disclosed to the Purchaser. Such agreement
was observed or taken into account for fixing levels of remuneration,
benefits or other terms or conditions of employment. The agreed
increase for 1997 was 2.6% of salary and negotiated bonuses,
information regarding which has been disclosed to the Purchaser.
11.4 TRADE UNIONS: At the Date there was no dispute (then current or so far
as the Vendor is aware threatened) between the Company and any trade
union or similar organisation or any section of its workforce and there
was not and there had not been during the immediately preceding three
years any strike, lock-out or other labour related dispute or
industrial action affecting the Company.
11.5 SOCIAL SECURITY: At the Date all the employees of the Company were
registered with the Social Security regime.
30.
<PAGE> 39
11.6 MISCELLANEOUS EMPLOYEE MATTERS:
At the Date:
(a) there were no amounts owing to any present or former director
or employee of the Company other than for remuneration and
social security contributions accrued due (in each case) in
respect of the current month or for reimbursements of business
expenses properly incurred;
(b) each of the employees who was by law subject to immigration
control, had been granted leave to remain in Spain and had a
valid work permit issued in relation to his employment with
the Company and had obtained all necessary extensions to his
leave to remain in Spain and so far as the Vendor is aware
there were in existence no grounds upon which any such leave
to remain or work permit might be curtailed or the employee
may be required to leave Spain;
(c) there were not and had not been any training schemes,
arrangements or proposals in respect of which a levy may
become payable by the Company under Spanish law;
(d) the Company had taken all required precautions to ensure that
its employees had a working environment and working practices
which were not injurious to their health and safety;
(e) none of the Company's senior employees had expressed to the
Vendor opposition to the Purchaser's acquiring the Shares or
offered to purchase any of the Shares whether alone or jointly
with others;
(f) the Company did not use the services of any person who whilst
not formally treated as an employee of the Company could be
regarded by the Spanish authorities as an employee of the
Company;
(g) no investigations were taking place in respect of accidents,
injuries, illness, disease or any other harm to the health and
safety of employees or contractors of the Company and the
Vendor was not aware of any facts or circumstances which may
lead to any such investigations.
PART XII - PENSIONS
12. The Company does not provide any life assurance, retirement,
redundancy, termination, pension, death, health or disability benefit
or payment to any present or former director, employee, agent or
consultant of the Company or any spouse or dependant of any thereof.
PART XIII - DISCLOSURE LETTER AND DUE DILIGENCE REPORT
13. So far as the Vendor is aware all information contained in the
Disclosure Letter and the Due Diligence Report is true and accurate in
all material respects and not misleading (in the case of the Disclosure
Letter as at the Date and in the case of the Due Diligence Report, as
at 31st December 1996).
31.
<PAGE> 40
PART XIV - ENVIRONMENTAL
14. No activities of the Company which have taken place since the
Acquisition Date have been in breach of any Environmental Legislation.
PART XV - TAXATION
15.1 RETURNS, PAYMENTS AND LIABILITY:
(a) The Company has:
(i) maintained all material records;
(ii) made all returns, accounts, and computations;
(in each case) for Tax purposes as are required by any Tax
Authority and reasonably necessary for the conduct of the
business.
(b) At the Date the Company was not and would not become liable to
pay or make reimbursement or indemnity in respect of any
Taxation (or amounts corresponding thereto) in consequence of
the failure by any other person to discharge that Taxation
within any specific period where such Taxation is in respect
of any profit, income, gain, transaction, act, omission,
event, or circumstance arising, occurring or due to arise
wholly or partly before the Date.
(c) So far as the Vendor is aware at the Date all necessary
consents and clearances had been obtained from Ministerio de
Economia y Hacienda, Banco de Espana, Direccion General de
Transacciones Exteriores or any other relevant institution or
authority.
(d) So far as the Vendor is aware the Company had sufficient
records at the Date to determine the Tax consequences which
would arise on any disposal or realisation of any asset owned
at the Accounts Date or acquired since that date but before
the Date.
15.2 TAX ON DISPOSAL OF ASSETS: On a disposal of any of its assets by the
Company for:
(a) in the case of each asset owned by the Company at the Accounts
Date and before the Date, a consideration equal to the value
attributed to each asset in preparing the Accounts, the
liability to Tax (if any) which would be incurred by the
Company in respect of that asset (disregarding any statutory
right to claim any allowance or relief) would not exceed the
amount taken into account in respect of that asset in
computing the maximum liability to deferred Taxation as stated
in the Accounts; or
(b) in the case of each asset acquired since the Accounts Date and
before the Date, a consideration equal to the consideration
actually given for the acquisition, no liability to Tax
(disregarding any statutory right to claim any allowance or
relief) would be incurred by the Company in respect of that
asset.
32.
<PAGE> 41
15.3 VALUE ADDED TAX:
(a) At the Date the Company was a taxable person and was
registered for the purposes of VAT.
(b) The Company did not make exempt supplies for VAT purposes
except such exempt supplies as may be disregarded in
calculating the amount of input tax for which the Company may
claim a credit or repayment.
15.4 STAMP, REGISTRATION AND TRANSFER TAXES: All stamp, registration and
transfer taxes, capital duties and any other similar types of duty and
levy which were due at the Date from the Company or which were then
required to be paid on documents by virtue of which the Company had any
right, title or interest, had been duly paid and/or the instruments
concerned had been duly stamped.
15.5 SOCIAL SECURITY, TAX AND LABOUR OBLIGATIONS: At the Date all Social
Security obligations had been materially complied with, and the Company
had made such payments on account, quotas, charges, withholdings,
penalties and interests as should have been made under Spanish Social
Security Laws and Regulations.
The tax, labour and Social Security obligations of the Company are
substantially those contained in the Accounts and the Completion
Accounts.
33.
<PAGE> 42
SCHEDULE III
COMPLETION ARRANGEMENTS
1. AT THE COMPLETION MEETING IN VALENCIA: The Vendor shall deliver to the
Purchaser's Solicitors or to their representative in Spain or make
available at the Company:
(a) the registration certificate containing the Shares in favour
of the Purchaser duly signed according to the provisions of
paragraph 2 of provision 56 of the Spanish Company Act, and
duly registered in favour of the Purchaser in the Registry
Book of the Shares of the Company;
(b) the Shares certificates issued under the name of the Vendor be
cancelled or be endorsed and delivered to the Purchaser;
(c) the letters of resignation of the directors, company secretary
and auditors confirming that they do not have any claim
against the Company for compensation for loss of office or
otherwise howsoever (other than any accrued employment
rights); whose signatures are to be authorised by a Notary;
(d) list of power of attorneys granted by the Company;
(e) statements of the balance standing to the credit/debit of all
accounts of the Company as at the close of business on the day
preceding Completion;
(f) all cheque books containing unused cheques relating to all
bank accounts of the Company;
(g) such documents as have been specified by the Purchaser acting
reasonably prior to Completion relating to the Property;
(h) all books, manuals, files, records, journals, ledgers,
accounts, agreements, deeds, correspondence and other
documents together with all printouts, disks and tapes where
the information concerned is kept or maintained on computer or
otherwise electronically as are in each case in the possession
of the Company including without limitation those relating to
Intellectual Property Rights, customers, suppliers, the
Products, operating manuals in respect of the Company's
equipment and assets and employees.
(i) such waivers, consents or other documents as may be necessary
to enable the Purchaser or its nominees to be registered as
the holder of the Shares and to substantiate the right of the
transferor of the Shares pursuant to this Agreement;
(j) the Tax Deed duly executed as a deed by the Vendor;
(k) the Letter of Indemnity duly executed as a deed by the Vendor
and the Company.
34.
<PAGE> 43
2. DELIVERY BY PURCHASER: The Purchaser shall deliver to the Vendor's
Solicitors:
(a) the Tax Deed duly executed as a deed by the Purchaser;
(b) the letter in the agreed form regarding non-solicitation of
employees.
35.
<PAGE> 44
SCHEDULE IV
PARTICULARS OF THE PROPERTY
(1) Plot "finca": 18740
Volume "tomo": 1506
Book "libro": 181
Page "folio": 50
Entry "inscripcion": 1st entry
Registered owner: FABBRI ARTES GRAFICAS VALENCIA S.A.
Title: By a consolidation of three plots and
planning consents
Type of plot: Urban plot limited to "industrial uses"
Size of the plot: 9,626.34 m(2)
Location: Site located at Quart de Poblet, Partida de
Camino, Real de Madrid
Premises: a) Industrial building 3,318.92 m(2)
b) Industrial building 2,673 m(2)
c) Ground Floor and First Floor building
1,470 m(2)
d) Industrial building 296.91 m(2)
Charges or mortgages: The said plots are not affected by any charge or
easement.
(2) Plot "finca": 8098
Volume "tomo": 619 and 706
Book "libro" 66 and 79
Page "folios": 19, 20 from book 66, volume 619 and 183, 184
and 185 from book 79, volume 706
Entries: 1st, 2nd, 3rd and 4th
Registered owner: FABBRI ARTES GRAFICAS VALENCIA SA
Title: By purchase, previous segregation of the
plot, declaration of new work and
enlargement of the declaration of new work.
Charges or mortgages: The said plot is not affected by any charge
or easement.
36.
<PAGE> 45
SCHEDULE V
PARTICULARS OF REGISTERED INTELLECTUAL PROPERTY RIGHTS
(All registrations or applications are in the name
of the Company unless otherwise stated)
PART I
TRADE MARKS
<TABLE>
<CAPTION>
Mark Country and Number; and Class
- ---- ----------- ----------- -----
date of name of
------- -------
registration holder if
------------ ---------
not the
-------
Company
-------
<S> <C> <C> <C>
(A) Registered Trade Marks
(1) FABBRI No.: 00649766/7 Class 31
(2) FABBRI No.: 00742997/5 Class 20
(3) FABBRI No.: 00742998/3 Class 42
(4) DISENO No.: 00742999/1 Class 20
(5) FRUTAS Y VERDURAS FRESCAS No.: 00743000/0 Class 31
(6) DISENO No.: 00743001/9 Class 42
(7) FABBRI No.: 00753972/X Class 16
(8) DISENO No.: 00753973/8 Class 16
(9) Maquinas y maquinas herramientas No.: 00772462/4 Class 7
(10) Hojas, laminas, peliculas, placas, varillas No.: 00772463/2 Class 17
tubos, semitubos y bobinas de materias
plasticas (productos semi laborados).
(11) Colores, barnices, lacas; preservativos No.: 00773414/X Class 2
antioxidantes y contra la deterioracion
de la madera, materias tintureas, mordientes
resinas naturales, metales en hojas y en
polvo para pintores y decoradores.
</TABLE>
37.
<PAGE> 46
<TABLE>
<S> <C> <C> <C>
(12) Para distinguir preparaciones para No.: 00773415/8 Class 4
blanquear y otras sustancias para
la colada; preparaciones para limpiar,
pulir, desengrasar y pulimentar; jabones;
perfurmeria; aceites esenciales;
cosmeticos; lociones capilares;
dentifricos.
(13) Para distinguir aceites y grasas No.: 007734416/6 Class 8
industriales (que no sean aceites o
grasas comestibles ni aceites
esenciales); lubrificantes, compuestos
para concentrar el polvo; compuestos
combustibles (incluidas las esencias para
motores) y materias para alumbrado;
velas; bujias, lamparillas y mechas.
(14) Herramientas e instrumentos manuales, No.: 00773417/4 Class 8
cuchilleria, tenedores y cucharas;
armas blancas.
(15) Aparatos y accesorios de alumbrados, No.: 00773418/2 Class 11
materiales y aparatos de calefaccion, de
produccion de vapor, de cocion, de
refrigeracion, de secado, de ventilacion,
de distribucion de agua y de
instalaciones sanitarias no incluidos en
otras clases.
(16) Cuero e imitaciones de cuero; articulos No.: 00773420/4 Class 18
de estas materias no incluidas en otras
clases; pieles; baules y maletas;
paraguas, sombrillas y bastones; fustas,
jaeces y guarnicioneria.
(17) Cuerdas, bramantes, redes, tiendas, No.: 00773421/2 Class 22
toldos, velas, sacos, materiales de
relleno (crin, capoc, plumas,
algasmarinas, etc.) materias fibrosas
textiles en bruto.
(18) Tejidos, colchas y tapetes, articulos No.: 00773423/9 Class 24
textiles no incluidos en otras clases
(19) Puntillas y bordados, cintas y lazos; No.: 00773424/7 Class 26
botones, automaticos, corchetes, ojetes
alfileres y agujas; flores artificiales
(20) Maquinas para empaquetar No.: 00782689/3 Class 7
</TABLE>
38.
<PAGE> 47
PART II
PATENTS
Brief Country and Number; and
Description date of name of
of Patent registration holder if
not the
Company
(A) Registered Patents
None
(B) Patent Applications
093000968/2
PART III
REGISTERED DESIGNS
Registered Design Number and name of
holder if not the Company
(1) AaF "Laminas para embalajes de Frutas" 00095111/0
(2) AyB "Laminas para embalajes de Frutas" 00095112/9
PART IV
COMMERCIAL NAME
Name Number Class
FABBRI ARTES GRAFICAS VALENCIA, S.A. 00070161/0 Class 42
Dedicado a todas las actividades que sean propias de la industria de Artes
Graficas.
39.
<PAGE> 48
EXECUTED as a DEED by )
SIDLAW GROUP PLC )
acting by: )
Director
Director/Secretary
EXECUTED as a Deed by )
EPL TECHNOLOGIES SL )
acting by: )
Sole Director
EXECUTED as a DEED by )
EPL TECHNOLOGIES, INC )
acting by: )
Director
40.
