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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 (Dates of Earliest event reported) March 13, 1998
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EPL Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Colorado 0 - 28444 84-0990658
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2 International Plaza, Suite 245, Philadelphia, PA 19113
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 521-4400
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Not Applicable
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
On March 13, 1998, EPL Technologies, Inc. ("EPL") announced the execution
of an agreement with American National Can Company ("ANC") to create a joint
venture company, to be named ANC-Respire L.L.C. ("ANC-RESPIRE").
Under this agreement, which is subject to extension beyond its initial
three-year term or earlier termination, it is expected that ANC-Respire will
develop, manufacture, market, promote and sell variety-specific, proprietary and
other packaging products to the fresh produce industry under the new ANC-Respire
brand name. EPL and ANC will have equal ownership interests in the venture and
intend to introduce perforated film into the fresh produce market as the first
of a broad range of products designed to capitalize on the combined expertise of
EPL and ANC.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
a) Not Applicable
b) Not Applicable
c) Exhibits
99.1 Press Release dated March 13, 1998 in relation to the
joint venture agreement between EPL Technologies, Inc.
and American National Can Company.
99.2 Agreement between EPL Technologies, Inc. and American
National Can Company to form a joint venture company,
ANC-Respire L.L.C.
99.3 Operating Agreement of ANC-Respire L.L.C.
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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 : March 30, 1998 EPL Technologies, Inc.
By: /s/Paul L. Devine
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Paul L. Devine
Chairman and President
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Exhibit 99.1
Press Release dated March 13, 1998 in relation to the joint venture agreement
between EPL Technologies, Inc. and American National Can Company
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CONTACT:
EPL Technologies, Inc. [EPL TECHNOLOGIES, INC. LETTERHEAD]
Investor Relations Department, Philadelphia
Timothy B. Owen, Secretary and Treasurer
Bruce M. Crowell, Chief Financial Officer
(610) 521-4400
FOR IMMEDIATE RELEASE
EPL TECHNOLOGIES AND AMERICAN NATIONAL CAN COMPANY ENTER INTO A JOINT VENTURE
AGREEMENT, JOINING FORCES TO OFFER THEIR PROPRIETARY FLEXIBLE PACKAGING PRODUCTS
TO THE U.S. MARKET FOR FRESH PRODUCE.
Philadelphia, PA -- March 13, 1998 -- EPL Technologies, Inc. (NASDAQ:EPTG)
announced today that EPL and American National Can Company (ANC) have entered
into an agreement to create a joint venture company to market flexible packaging
systems for the U.S. fresh produce market.
ANC, a major supplier of packaging materials and containers in the US, is a US
subsidiary of Paris, France-based Pechiney (NYSE:PY), an international packaging
group with reported annual revenues of approximately FF69,745 million
($11.47billion @FF6.08=$1.00).
It is anticipated that the new company, ANC-RESPIRE LLC, will develop,
manufacture, market, promote and sell variety-specific, proprietary and other
packaging products to the fresh produce industry under a new brand name -
"ANC-RESPIRE". RESPIRE(R) is EPL's federally registered trademarked brand name
for its line of variety-specific, fresh-cut produce packaging systems which
include film manufactured by outside vendors in accordance with EPL's
specifications. EPL believes that the amount of fresh-cut produce packaged in
the U.S. will grow substantially by the year 2000 due to recent, rapid growth of
the fresh-cut segment of the produce industry and the increasing shift in the
industry's distribution from foodservice to retail.
EPL, through its "EPL Flexible Packaging" subsidiaries, has developed a range of
flexible packaging products, some of which utilize proprietary perforating
technologies. These flexible packaging products are marketed under the
RESPIRE(R) brand name for fresh-cut produce and EPL Flexible Packaging for other
markets. EPL and ANC will have equal ownership interests in the venture and
intend to introduce perforated film into the fresh produce market as the first
of a broad range of products designed to capitalize on the combined expertise of
EPL and ANC.
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EPL Technologies, Inc.
March 13, 1998
Page 2
The joint venture agreement has an initial three-year term and can be extended
by mutual agreement of the parties.
EPL believes that the new joint venture company will have competitive advantages
derived from the respective technologies and customer relationships of each
partner.
Paul L. Devine, Chairman, President and Chief Executive Officer of EPL stated:
"We believe that the significant manufacturing capability of ANC and its
knowledge of packaging technology, when combined with EPL's variety-specific
know-how and experience in produce microbiology and related packaging
requirements, represents an enhanced capability to begin to penetrate an
established and rapidly growing market."
EPL Technologies, Inc. develops, manufactures and markets proprietary processing
aids, packaging technologies and scientific and technical services, which are
designed to maintain the quality and integrity of fresh-cut produce.
The expectations expressed herein regarding the prospects for marketing flexible
packaging systems in a joint venture between EPL and ANC are forward-looking
statements and, as such, the actual results of such activities may vary
materially from expectations. Meaningful factors that may affect the results of
such efforts include, but are not limited to, delays or difficulties in joint
marketing or market penetration, technical issues in producing products and
systems for fresh-cut produce, possible inefficiencies between the parties in
operating the joint venture or responding to market opportunities, changes in
price structure and other matters. There can be no assurance that the joint
venture company will operate profitably.
# # # #
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Exhibit 99.2
Agreement between EPL Technologies, Inc. and American National Can Company
to form a joint venture company, ANC-Respire L.L.C.
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AGREEMENT
This agreement is made as of the first day of February, 1998, by and between EPL
TECHNOLOGIES, INC. ("EPL"), with offices at 2 International Plaza, Suite 245,
Philadelphia, Pennsylvania 19113-1507 and AMERICAN NATIONAL CAN COMPANY
("ANCC"), with offices at 8770 W. Bryn Mawr Avenue, Chicago, Illinois
60631-3542.
1. RECITALS
(a) EPL possesses certain confidential and proprietary know-how and
technologies relating to the development and specification of food
science requirements of flexible packaging materials marketed to the
fresh produce industry (the "EPL Know-how"). The EPL Know-How
excludes EPL's proprietary know-how and technology in relation to
the perforation of flexible packaging materials, as well as EPL's
confidential and proprietary know-how and scientific resources that
facilitate the maintenance of fresh produce (the "Excluded
Know-how").
(b) EPL manufactures and markets perforated flexible packaging materials
(the "EPL Products") and provides services related to the
maintenance of fresh product (the "EPL Services").
(c) ANCC possesses certain confidential and proprietary know-how and
technologies relating to the development, manufacture and marketing
of flexible packaging materials (the "ANCC Know-how").
(d) ANCC manufactures and markets flexible packaging material (the "ANCC
Products").
(e) ANCC currently is not materially engaged in developing, marketing or
selling ANCC Products for the fresh produce market in the United
States (the "Market").
(f) EPL and ANCC desire to combine their expertise for the purpose of
developing and selling flexible packaging materials to the Market.
EPL acknowledges that ANCC will continue to market ANCC Products to
markets other than the Market, such activities to be outside the
scope of this Agreement. ANCC acknowledges that EPL will continue to
market the Excluded Know-how and EPL Services to the Market, as well
as EPL Products to markets other than the Market, and confirms that
such activities are outside the scope of this Agreement.
2. BUSINESS OPPORTUNITIES AND NON-COMPETITION
(a) Cooperative Marketing Arrangement
(1) EPL and ANCC agree to form an Illinois limited liability
company under the name "ANC-RESPIRE, L.L.C." ("ANC-RESPIRE")
for the purpose of marketing, promoting, and selling flexible
packaging materials incorporating the EPL Know-how, the EPL
Products and the ANCC Know-how and the ANCC Products (the
"ANC-RESPIRE Products") to the Market (the "Project").
(2) The Parties agree that ANC-RESPIRE is the intended and
exclusive vehicle for selling the ANC-RESPIRE Products to the
Market.
(3) EPL and ANCC will give first consideration to ANC-RESPIRE with
regard to the development and implementation of activities
which are within the scope of this Project. If any fresh
produce packaging opportunity, which is first offered to
ANC-RESPIRE, is refused by ANC-RESPIRE, then the Party which
offered the opportunity to ANC-RESPIRE shall be free to pursue
such opportunity, provided that such opportunity shall not be
performed under terms and conditions more favorable than those
on which the opportunity was offered to ANC-RESPIRE.
(4) The existing EPL US produce packaging business, which is
currently conducted through a wholly owned subsidiary of EPL
(Respire Films, Inc.) will be reviewed regularly with a view
to determining which, if any, of this business it would be
appropriate for the Project to handle.
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(b) Exclusivity and Other Activities.
(1) During the term of this Agreement ANCC shall be free to pursue
sales of ANCC Products other than to the Market.
(2) During the term of this Agreement EPL shall be free to pursue
sales of EPL Products other than to the Market.
(3) During the term of this Agreement and for a period of 60
months after the expiration or termination of this Agreement
by EPL or ANC pursuant to section 5(d) below, neither ANCC nor
EPL shall use the Know-how or other confidential information
conveyed to it by the other to make or to sell, either on its
own or in conjunction with any third party, any EPL or ANCC
Products to the Market or for any other purpose not
contemplated by this Agreement, except as otherwise provided
in Section 5(d).
(c) Establishment of ANC-RESPIRE Company
(1) In order to implement the Project, the parties shall form
ANC-RESPIRE pursuant to the Articles of Formation and
Operating Agreement attached as Exhibit A hereto.
(2) All activities of the Project shall be conducted through
ANC-RESPIRE.
(3) Each party shall own a 50% percentage interest in ANC-RESPIRE
and shall contribute $100,000 each initially in return for
such percentage interest.
(4) EPL hereby grants ANC-RESPIRE a royalty-free license to use
the EPL Know-How in connection with the Project from the date
hereof until the earlier of (A) three years from the date
hereof of (B) dissolution of ANC-RESPIRE. ANCC hereby grants
ANC-RESPIRE a royalty-free license to use the ANCC Know-How in
connection with the Project from the date hereof until the
earlier of (A) three years from the date hereof of
(B) dissolution of ANC-RESPIRE.
3. RESPONSIBILITIES OF PARTIES
(a) Responsibilities of ANCC. ANCC shall have the following principal
responsibilities:
(1) allow the use of the "ANC" name in connection with the
Project;
(2) designate sufficient personnel to the Project in accordance
with the marketing plan agreed upon by EPL and ANCC;
(3) assist the Project in marketing and promotion efforts;
(4) assist the Project with ANCC Know-how to address product
requirements in the Market;
(5) assist the Project with the supply of ANCC Products upon terms
and conditions mutually established from time to time by EPL
and ANCC, on a customer by customer basis, as more
particularly set forth in Section 4 below;
(6) liaise with EPL customer service to track progress of all
orders for ANCC Products; and
(7) bill the customer, collect outstanding billings and pay
expenses as detailed in section 4 below.
(b) Responsibilities of EPL. EPL shall have the following principal
responsibilities:
(1) allow the use of the "RESPIRE" name in connection with the
Project;
(2) assign its RESPIRE sales team to the Project in accordance
with the marketing plan agreed upon by EPL and ANCC;
(3) assist the Project in marketing and promotion efforts;
(4) assist the Project with EPL Know-how to address product
requirements in the Market;
(5) assist the Project with the supply of EPL Products upon terms
and conditions mutually established from time to time by EPL
and ANCC, on a customer by customer basis, as more
particularly set forth in Section 4 below; and
(6) bill any customers currently doing business through Respire
Films, Inc. that are not transferred into the Project, until
such time as the parties agree that the said customers should
be transferred into the Project and billed by ANCC.
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4. SALE OF PRODUCTS
(a) Supply and Pricing. The supply prices and terms for purchases of
products from ANCC and EPL and the prices and terms of sale of the
ANC-RESPIRE Products sold to ANC-RESPIRE customers in connection
with the Project shall be determined by unanimous decision of the
Managers of ANC-RESPIRE on a case-by-case basis, taking into account
the requirements of the Market, the respective production costs of
the EPL Products and the ANCC Products, the ANC-RESPIRE product
warranties and the payment and delivery terms.
(b) Sale Proceeds. The products will be sold and invoiced to customers
in the name of ANC-RESPIRE and the net proceeds from such sales
shall be deposited in an ANC-RESPIRE account at a mutually agreed
financial institution.
(c) Warranty and Liability. EPL and ANCC warrant that the ANC-RESPIRE
Products made by each of them and sold to ANC-RESPIRE shall conform
to the specifications agreed upon by ANC-RESPIRE with the
ANC-RESPIRE customers, shall be of good workmanship and materials,
and shall comply with the U.S. Food and Drug and Cosmetic Act of
1938, as amended, and all regulations and/or directives issued
thereunder. Each party shall bear its own costs and expenses arising
from the failure of any such Products made by it to conform to the
foregoing warranty.
5. TERM AND TERMINATION
(a) Initial Term. The term of this Agreement shall be for a period of
three(3) years from February 1, 1998, unless terminated in whole or
in part by either party on 60 days' prior written notice to the
other party, if the other party:
(1) fails to comply with any provisions of this Agreement,
provided that the defaulting party shall have been given
written notice of the default and shall not have corrected
such default within 30 days from receipt of such notice;
(2) becomes bankrupt or is insolvent or is wound up or liquidated
or enters into any arrangement with its creditors or takes or
suffers any similar action in consequence of debt; or
(3) causes, implements, or suffers any change in the ownership or
management control (either direct or indirect) of its
business, where such change results in an apparent conflict of
interest with a competitor of the terminating party.
(b) Extension. The term of this Agreement may be extended by written
agreement of EPL and ANCC within 30 days prior to the expiration
date.
(c) Joint Venture. Commencing on the earlier of 30 days prior to the
expiration date or when ANC-RESPIRE cumulative gross sales exceeds
one million dollars, EPL and ANCC agree to discuss the conversion of
ANC-RESPIRE into a longer term joint venture company and to
negotiate in good faith the terms and conditions of a revised
operating agreement. If the parties are unsuccessful in finalizing
such an agreement, then the parties shall be free to:
(1) extend this agreement on the same terms by written agreement
of both parties; or
(2) modify the arrangement between the parties on mutually
agreeable terms by written agreement of both parties; or
(3) terminate this Agreement and pursue fresh produce packaging
opportunities either on their own or in collaboration with
other parties.
(d) Effect of Termination.
(1) Any current customer of ANCC shall be referred to herein as an
"ANCC Customer." Any current customer of EPL shall be referred
to herein as an "EPL Customer." Upon termination of this
Agreement, the parties shall negotiate in good faith:
(A) to designate as either ANCC Customers or EPL Customers
those ANC-RESPIRE customers which are not ANCC Customers
or EPL Customers, and
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(B) an agreement by which each party will continue to supply
to the other or to the ANCC Customers or EPL Customers
respectively those elements of the ANC-RESPIRE products
and services as were provided by such party to
ANC-RESPIRE (including specifically the ANCC products
and ANCC know-how and the EPL Products and EPL Services
and EPL Know-how) prior to termination for an agreed
transition period to serve ANCC Customer and EPL
Customer, respectively.
(2) Upon termination of this Agreement, EPL hereby grants ANCC a
non-exclusive, royalty-free and perpetual license to the EPL
Know-How to use, manufacture, have manufactured and sell
ANC-RESPIRE Products to ANCC Customers. Upon termination of
this Agreement, ANCC hereby grants EPL a non-exclusive,
royalty-free and perpetual license to the ANCC Know-How to
use, manufacture, have manufactured and sell ANC-RESPIRE
Products to EPL Customers. Upon termination of this Agreement
neither party shall sell any products or services using or
under the "ANC-RESPIRE" name.
6. CONFIDENTIALITY
(a) EPL and ANCC agree to maintain all customer lists, prices, research
data, specifications, formulas, techniques, Know-how or other
similar information received from each other relating to the
development, production or sales of the EPL Products, the ANCC
Products and the ANC-RESPIRE Products as the Confidential
Information of ANCC or EPL respectively. Each party further agrees
not to disclose this information to any person other than those whom
it deems necessary for the effective performance of this Agreement
or as required by law.
(b) The obligations set forth above shall not apply when, and to the
extent that, such specific Confidential Information as a whole;
(1) is already in the Receiving Party's possession as of the date
hereof and was not acquired directly from the Disclosing
Party; or
(2) at the time of disclosure or thereafter becomes rightfully
available to the Receiving Party from a third party without
secrecy restriction and who has obtained the Confidential
Information through no fault of the Receiving Party; or
(3) at the time of disclosure is generally available to the public
as evidenced by generally available documents or publications
through no fault of the Receiving Party; or
(4) can be demonstrated to have been independently developed by
the Receiving Party; or
(5) is required to be disclosed, based on the good faith opinion
of the Receiving Party's counsel, pursuant to a lawful court
order or government mandate but, in such event, the Receiving
Party shall use its commercially reasonable efforts to
maintain the confidentiality of the Confidential Information
by means of a protective order or other similar protection.
(c) Neither party shall disclose the contents of this agreement to any
third party without the prior written consent of the other party.
7. MISCELLANEOUS
(a) Right of First Refusal. In the event that EPL receives an
unsolicited offer or initiates discussions with third parties to
purchase all or part of EPL's flexible packaging business or all or
substantially all of the assets of EPL during the term of this
Agreement, then EPL agrees to inform ANCC promptly of the terms of
such offer or discussions before any agreement for sale is
considered or approved by the shareholders of EPL and to allow ANCC
to submit an offer to purchase such business or assets on
substantially similar terms.
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(b) Publicity. With the exception of compliance with SEC rules and
regulations, all announcements and disclosures in relation to this
Agreement or activities thereunder will be agreed upon by the
parties prior to release.
(c) Prior Agreements. This Agreement constitutes the entire agreement
between the parties with respect to the within subject matter, and
to that extent terminates and supersedes all previous agreements,
whether written or oral, relating to the same subject matter,
including the terms and conditions of sale contained in any purchase
order issued by either of the parties.
(d) Indemnity. Each of the parties hereto (hereinafter the "Indemnifying
Party") respectively agrees to indemnify and hold harmless the other
party (hereinafter the "Indemnified Party") from and against (1) any
and all liabilities, losses, costs or actual damages (hereinafter
"Loss"), and (2) any and all reasonable attorneys' and accountants'
fees and expenses, court costs and other out-of-pocket expenses
(hereinafter "Expense"), incurred by the Indemnified Party in
connection with or arising from (A) any action taken in the name of
ANC-RESPIRE by such party or its representatives which is
inconsistent with the terms of this Agreement or the Operating
Agreement, (B) any claim of infringement by the EPL Know-How, in the
case of EPL or the ANCC Know-How, in the case of ANCC, or (C) the
failure by the Indemnifying Party to fulfill any of its respective
agreements set forth in this Agreement or the Operating Agreement.
The parties agree to secure and maintain commercial insurance
coverages sufficient to respond to their respective indemnity
obligations under this Section. Each party will cause the other
party to be named as an additional insured on its general and
product liability insurance and will from time to time upon request
of the other party provide a certificate of insurance or other
evidence to that effect. The indemnification provided for in this
Section shall be of a continuing nature and shall survive
termination of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day
and year first above written.
AMERICAN NATIONAL CAN COMPANY EPL TECHNOLOGIES, INC.
By: /S/ Dennis Kester By: /S/ Paul Devine
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Dennis Kester Paul L. Devine
Senior Vice President, Chairman and Chief Executive Officer
Plastic Packaging
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Exhibit 99.3
Operating Agreement of ANC-Respire L.L.C.
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OPERATING AGREEMENT
OF
ANC-RESPIRE, L.L.C.
This Operating Agreement of ANC-RESPIRE, L.L.C., an Illinois limited liability
company (the "Company"), is adopted as of the first day of February, 1998, by
AMERICAN NATIONAL CAN COMPANY ("ANCC"), and EPL TECHNOLOGIES, INC. ("EPL") being
all the members of the Company (individually "Member" and collectively
"Members").
1. Formation of Company. The Members are all the members of a limited
liability company (the "Company") formed pursuant to the provisions of the
Illinois Limited Liability Company Act (the "Act"), and the rights and
liabilities of the Members shall be as provided in the Act, except as
herein otherwise provided. The Company is being formed in connection with
an Agreement (the "Marketing Agreement") dated the date hereof between the
parties which provides for a cooperative marketing arrangement relating to
flexible packaging materials for fresh produce.
2. Name. The Company shall be conducted under the name of ANC-RESPIRE,
L.L.C., or such other name as the Members may from time to time select.
3. Principal Place of Business. The principal place of business of the
Company shall be at Chicago, Illinois. The business of the Company also
may be conducted at such other or additional place or places as may be
designated by the Members.
4. Term of the Company. The Company shall commence on the date hereof and
shall continue until dissolved pursuant to the terms of Paragraph 11(a)
below.
5. Purposes of the Company. The purposes of the Company are:
(a) To develop, manufacture or have manufactured, market and sell
flexible packaging materials for the fresh produce market in the
United States (the "Business"), provided that each of the Members
may pursue activities outside the Business and such outside
activities shall not constitute opportunities of the Company;
(b) To engage in such other activities and do such other things as may
be necessary, advisable or incidental to the carrying out of its
purpose; and
(c) To engage in any and all other lawful activities as the Members
shall determine in accordance with the terms hereof.
6. Capital Contributions and Percentage Interests.
(a) Initial Contributions. The Members initially shall make the
contributions described below:
ANCC - $100,000
EPL - $100,000
(b) Initial Percentage Interests. The Initial Percentage Interests of
the Members shall be as follows until such time as the Percentage
Interests may be adjusted by unanimous agreement of the Members:
ANCC - 50%
EPL - 50%
(c) Additional Capital Contributions. The Members may make additional
capital contributions only upon the unanimous agreement of the
Members.
7. Distributions and Allocations.
(a) Distributions. Cash distributions shall be made in the amounts and
at the times determined by unanimous agreement of the Members. All
cash distributions shall be made to the Members in proportion to
their Percentage Interests.
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(b) Tax Allocations. Except as otherwise required by applicable
provisions of tax law, Company taxable income and loss shall be
allocated to the Members in proportion to their Percentage
Interests.
8. Books of Account, Accounting and Reports, Fiscal Year, Tax Return, and Tax
Election.
(a) Books of Account. The Company's books and records shall be
maintained by the Members at such place as they from time to time
deem appropriate and each Member shall have access thereto at all
reasonable times.
(b) Accounting and Reports. As soon as reasonably practicable after the
end of the Company's fiscal year, in sufficient time to permit the
timely filing of income tax returns, the Company shall cause to be
prepared and furnished to each Member financial statements for the
Company for the year then ending an individual statement showing the
amounts allocated to or allocated against each such Member during or
in respect of such year, including any items of income, deductions,
credit, or loss allocated to him for purposes of the Internal
Revenue Code, and any applicable state of local income tax laws. The
financial statements of the Company need not be audited.
(c) Fiscal Year. The fiscal year of the Company shall end on the 31st
day of December in each year.
(d) Banking. All funds of the Company received from any and all sources
shall be deposited in such separate checking and/or savings account
or accounts as shall be determined by the Members.
(e) Tax Returns. ANCC shall be the Tax Matters Partner and shall provide
for the preparation and filing of all necessary tax returns or other
filings required under any governmental authority.
9. Management and Duties.
(a) Management. Except as otherwise provided herein and subject to
Section 9(b) below, the management, operation and policy of the
Company shall be and hereby is vested a Board of Managers consisting
of two managers appointed by ANCC (the "ANCC Managers") and two
Managers appointed by EPL (the "EPL Managers"). Once appointed, the
Managers shall serve until their death, adjudicated incompetence,
resignation or removal. The ANCC Managers may be removed or replaced
at any time only by ANCC. The EPL Managers may be removed or
replaced at any time only by EPL. Any action taken in the name of
the Company must be approved by at least one ANCC Manager and one
EPL Manager, subject to Section 9(b) below.
(b) Actions in the name of the Company. No act shall be taken or sum
expended or obligation incurred by the Company, with respect to any
matter within the scope of any of the major decisions listed below,
unless such act or expenditure or obligation has been approved in
writing by all four Managers. The major decisions requiring such
approval shall be the following:
(1) joining or forming any partnership, limited liability company
or corporation, or acquiring or transferring any interests
therein;
(2) purchase or sale of assets outside the ordinary course of
business involving amounts in excess of $25,000;
(3) mergers, consolidations, or other business combinations of the
Company or any of its subsidiaries;
(4) issuance or repurchase of Percentage interests or other equity
of the Company or any subsidiary (or any options, warrants or
other rights to acquire such Percentage Interests or other
equity);
(5) establishment and capitalization of any joint venture or other
similar entity or operation;
(6) material change of scope of the business of the company or any
subsidiary;
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(7) distributions, dividends and the retention of significant
balances of cash or cash equivalents not required for working
capital (it being understood that any cash balances in excess
of working capital or other cash requirements will be
distributed);
(8) any transactions between the Company or any subsidiary and any
of the Members or their affiliates;
(9) issuance of any note, bond, indenture or other debt or the
incurrence, assumption or guarantee of any indebtedness for
borrowed money by the entity or any subsidiary;
(10) grants of liens, pledges, mortgages or other security
interests;
(11) adoption of employee benefit plans;
(12) choice of and changes in accounting and tax policies;
(13) modification, termination or breach of any contracts material
to the Company or any subsidiary;
(14) adoption, amendment or repeal of any provision of the articles
of organization or other governing document of the Company or
any subsidiary;
(15) admission of any new members to the Company;
(16) making any expenditure or incurring any obligation involving a
sum in excess of $25,000 for any transaction or group of
similar transactions;
(17) any action outlined above with respect to any subsidiary or
other entity in which the Company has an interest;
(18) any action that requires approval of both Members pursuant to
the Marketing Agreement; and
(19) any other decision or action which by any provision of this
Agreement is required to be approved or determined by the
Members.
10. Transfer of Interests.
(a) Consent Required. No Member shall dispose of or encumber all or any
part of its Company interest without the prior written approval of
the other Member.
(b) Right of First Refusal. If any Member wishes to transfer any portion
of its Company interest, such interest must first be offered for
sale to the other member on the same terms and conditions as the
proposed transfer. The other Member may purchase all or any portion
of the Company interest so offered on such terms in the same
relative proportions as the Company interest held by it within 90
days of being notified by the transferor. Any transferee of any
Company interest shall only have the rights of an assignee of the
transferring Member's distributions, unless the transferee is
admitted as a member of the Company.
11. Dissolution of the Company.
(a) Events Resulting in Dissolution. The Company shall be dissolved upon
the earlier of (1) the written election of both Members and (2)
termination of the Marketing Agreement.
(b) Liquidation. In the event of the dissolution of the Company for any
reason, the Members shall commence to wind up the affairs of the
Company and to liquidate its assets. The Members shall continue to
share profits and losses during the period of liquidation in the
same proportion as before the dissolution. Any property distributed
in kind in liquidation shall be valued and treated as thought the
property were sold and the cash proceeds were distributed.
(c) Distribution of Liquidation Proceeds. Upon liquidation, the assets
of the Company shall be used and distributed in the following order:
(a) to pay or provide pursuant to for the payment of all debts and
liabilities of the Company to creditors who are not Members and all
expenses of liquidation; (b) to pay or provide for the payment pro
rata of all debts and liabilities of the Company to creditors who
are Members; and (c) to be distributed to the Members in proportion
to their Percentage Interests.
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<PAGE> 5
(d) Liquidation Accounting. Within a reasonable time after the date the
assets have been distributed in liquidation, the Members shall cause
to be prepared and provided to each Member a statement which shall
set forth the assets and the liabilities of the Company as of the
date of complete liquidation and each Member's pro rate portion of
distributions made pursuant to paragraph 11(c) hereof.
(e) Termination. Upon the completion of liquidation of the Company and
the distribution of all company assets, the Company shall terminate.
(f) Name. Upon liquidation, ANCC shall have the sole right to the name
"ANC" as ever used by the Company. EPL shall have the sole right to
the name "RESPIRE" as ever used by the Company. ANCC and EPL shall
jointly own the name "ANC-RESPIRE" and they each agree never to use
such jointly owned name without the prior written consent of the
other party.
12. Amendments. This Agreement may be amended at any time and from time to
time only by a written instrument signed by all the Members.
13. Prior Agreements. This Agreement, together with the Marketing Agreement,
constitutes the entire agreement between the parties with respect to the
within subject matter and to that extent terminates and supersedes all
previous agreements, whether written or oral, relating to the same subject
matter.
IN WITNESS WHEREOF, the Members have adopted this Agreement as of the date and
year first above written:
AMERICAN NATIONAL CAN COMPANY EPL TECHNOLOGIES, INC.
By: /S/ Dennis Kester By: /S/ Paul Devine
----------------------- ---------------------------
Dennis Kester Paul L. Devine
Senior Vice President, Chairman and Chief Executive Officer
Plastic Packaging
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